Update: On October 9, 2015, the US Court of Appeals for the Sixth Circuit issued a nationwide stay against the enforcement of the Waters of the United States rule. The court stated that the petitioners demonstrated a substantial possibility of success on the merits of their claims and that it was unclear if the rule followed the instructions set out by the Supreme Court in Rapanos v. United States (547 U.S. 715 (2006)). Most significantly, the court was concerned with the burden on the government of redrawing jurisdictional lines according to uncertain definitions of "navigable waters" and "waters of the United States" under the rule.

On August 27, 2015, in North Dakota et al. v. US Environmental Protection Agency et al., the US district court for the district of North Dakota granted a preliminary injunction temporarily blocking implementation of a controversial new Environmental Protection Agency (EPA) rule in 13 states including Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming. The contested rule is important because it defines federal jurisdiction over bodies of water under the Clean Water Act (3:15-cv-00059 (D.N.D. Aug. 27, 2015)).

On April 21, 2014, the US Army Corp of Engineers and the EPA issued a proposed rule to change the definition of “Waters of the United States” under the Clean Water Act. Following a period for comment, both agencies promulgated a final rule on June 29, 2015 which had an effective date of August 28, 2015.

Since the rule was finalized, many challenges have been filed claiming that the new rule unlawfully expands the jurisdiction of the EPA and the Army Corps beyond the scope of their statutory authority. On June 29, 2015, 12 states and two New Mexico executive agencies brought suit seeking to vacate the rule and request a declaration that the rule is unconstitutional, violates the Clean Water Act, the National Environmental Policy Act and the Administrative Procedure Act. The states and executive agencies moved for preliminary injunction. The EPA and Army Corps challenged the district court’s jurisdiction over the case.

First, the court rejected the agencies’ argument that the US circuit court of appeals has exclusive jurisdiction over the suit. While Section 509(b)(1)(F) of the Clean Water Act (33 U.S.C.A. §1369(b)(1)) grants the federal circuit courts original jurisdiction over certain challenges, the district court held that a challenge to a jurisdictional rule is not the kind of challenge limited to the circuit courts.

Next, the court applied the following well-known four-factor inquiry, known as the Dataphase factors, to determine that preliminary injunction on behalf of the states was appropriate:

The court found that the states would likely succeed on the merits for two reasons. First, using the significant nexus standard developed by Justice Kennedy in Rapanos v. United States (547 U.S. 715 (2006)), the court found that the EPA’s rule would expand the definition of “tributary” to include bodies of water with no connection to the navigable waters that the EPA generally has authority to regulate. The court also held that success by the states was likely because the agencies acted in an arbitrary and capricious manner when formulating the rule by failing to show a rational link between their factual findings and the final rule as promulgated. The court cited the Army Corp’s admission that the rule sets an arbitrary geographical limitation for determining jurisdiction.

In finding irreparable harm to the states, the court pointed to economic losses, such as the cost of jurisdictional studies that would be necessary to determine jurisdictional boundaries, as well as the loss of power associated with loss of control over what were traditionally state-controlled waters.

The court found that the harm to the states caused by the failure to grant the injunction outweighed any harm to the agency that would be caused by a delay in the implementation of the new rule.

Finally, the court found that it was in the public interest to ensure that federal agencies to do not extend their power beyond their express delegation from Congress.

The findings in this case mark a significant departure from two other rulings that came out in the days prior to this decision. On August 26, 2015, a West Virginia federal court dismissed a private challenge based on lack of jurisdiction (Murray Energy Corp. v. US. EPA, N0. 1:15-cv-00110 (D.W.Va.)). The court ruled that the case should have been brought in the Court of Appeals for the Sixth Circuit. On August 27, 2015, a Georgia federal judge denied 11 additional states’ requests for preliminary injunction, on the same jurisdictional grounds (State of Georgia, et al v. McCarthy, et al, No. 2:15-cv-00079 (S.D.Ga.)).

While no other court has yet to find against the validity of the rule, this decision may factor in as other courts face the same issues raised in this suit. For developers of real estate, infrastructure, and other projects that may need a Clean Water Act permit from the EPA or Army Corps, uncertainty over the Clean Water Rule’s validity and applicability will likely remain as these cases continue to make their way through the courts.

For additional information on the Clean Water Act, see Practice Note, Stormwater Management: Project and Facility Permits Under the Clean Water Act, and for more information on other environmental law matters, see: