Sackett v. EPA: The End of Significant Nexus

The Supreme Court’s decision in Sackett v. Environmental Protection Agency, No. 21–454, 598 U.S. ___ (2023) (“Sackett”) may create some immediate opportunities for landowners and operators, likely leaves certain obligations unchanged, but certainly reverses course on seventeen years of defining the scope of federal control over water.

Immediate Considerations for Landowners

The most immediate opportunities created by Sackett are for developments and operations still in the planning phase and not yet permitted. Onsite wetlands, streams and other waters without a direct connection to a navigable water may no longer fall under federal jurisdiction. Accordingly, landowners should reevaluate any opinions regarding the jurisdictional status of such waters, including any pending jurisdictional determinations or permit applications. Speed may be important to withdraw any permit applications or requests for an approved jurisdictional determination before the agencies act on those requests.

Additionally, any entities now the subject of a notice of violation or enforcement action based on impacts to federal waters should consider whether those waters remain jurisdictional. Although Sackett does not affect obligations under a currently effective permit or under state law, eliminating certain federal implications could change the scope of the violation or the applicable penalties.

Important Caveats

Although Sackett creates opportunities, it does not change any separate legal obligations. Permits are not only rooted in federal environmental law but also state law and contract. They carry independent authority and are not automatically voided by Sackett or any other shift in the legal landscape. Certainly Sackett may create opportunities for amending or terminating a permit and will be very important when permits come up for renewal, but all permitting requirements remain in effect as long as the permits remain operational.

In particular, Sackett will not affect many permits issued under the parallel authority of the states either under delegated programs or independent state law. States set their own contours for regulatory control, and Sackett does not change any of those state statutes and regulations. However, Sackett may cause ripple effects in state laws, regulations, and permitting decisions. For example, many state programs are operated under a delegation of federal authority and are required to be at least as stringent as federal regulations but may be more stringent. States could respond to the Sackett decision by either conforming state law to the more circumscribed limits of regulatory authority or bolstering state law as a counter-response. Until then, however, state-issued permits and enforcement actions based on state law are unaffected by Sackett.

The Sackett Sea Change

From 2006 until last week, the scope of federal jurisdiction over water was based on one of two interpretations of the Rapanos v. United States, 547 U.S. 715 (2006) (“Rapanos”) decision. According to the federal agencies and some circuits, federal jurisdiction over certain tributaries and wetlands existed whenever either Justice Scalia’s “relatively permanent, continuous surface connection” test or Justice Kennedy’s “significant nexus” test was satisfied. Other circuits solely utilized Justice Kennedy’s “significant nexus” test, disregarding Justice Scalia’s test entirely. With Sackett, the Supreme Court eliminated Justice Kennedy’s “significant nexus” test and determined that Justice Scalia’s “relatively permanent, continuous surface connection” test is the appropriate analysis.

Although the Court was split 5-4 over the requisite test, all nine Sackett justices agreed on two things. First, EPA reached too far in asserting jurisdiction over the wetlands on the Sacketts’ property which were not adjacent to any water under federal jurisdiction and were even farther from any traditional navigable water. Second, Justice Kennedy’s “significant nexus” test should not be the law. It is unconstitutionally vague and enabled federal overreach in claiming jurisdiction over some wetlands and other waters.

But on the more appropriate test for determining federal jurisdiction over wetlands and tributaries, the justices were more divided, with five of the justices agreeing with Justice Scalia’s plurality decision in Rapanos. Under that test, a water falls within federal jurisdiction if it is (a) a traditional interstate navigable water; (b) a relatively permanent body of water (e.g., lake, stream) that is connected to a traditional interstate navigable water; or (c) a wetland with a continuous surface connection with either of those waters. In so defining federal waters, the majority interpreted the term “adjacent” to mean “adjoining,” i.e. physically touching with no separation.

At least three questions were left unanswered in Justice Alito’smajority opinion. First, what constitutes a traditional navigable water? It is unclear the extent to which the majority intended to offer an opinion. In examining the history of the scope of federal waters, Justice Alito noted that “traditional navigable waters” meant “interstate waters that were either navigable in fact and used in commerce or readily susceptible of being used in this way.” But Justice Alito did not clearly state whether he intended this commerce-based definition to remain effective today or placed in historical context. The agencies’ understanding of “traditional navigable waters” has expanded significantly across the history of the Clean Water Act. If Justice Alito intends the commerce-based definition to be the current standard, his decision even further curtails agency authority beyond the majority’s adoption of the continuous surface connection test.

In his concurrence, Justice Thomas, joined by Justice Gorsuch, opined at length on this question, concluding that, consistent with decades of Supreme Court interpretation before the enactment of the Clean Water Act and, consistent with the U.S. Army Corps’ first interpretation of the term after the enactment of the Clean Water Act, a traditional navigable water of the United States is a water that is used or is susceptible of being used as part of “a continued highway over which commerce is or may be carried on with other States or foreign countries in the customary modes in which such commerce is conducted by water.” The Daniel Ball, 10 Wall. 557, 563 (1871). Justice Thomas concluded that, not only did the Sacketts’ wetlands lack a continuous surface connection to a traditional navigable water, but neither the nearby tributary nor the ultimate lake were highways of interstate commerce and thus not traditional navigable waters.

Justice Thomas acknowledged that Commerce Clause jurisprudence evolved materially in the century following The Daniel Ball thus rendering these historic concepts of commerce and navigation inapplicable in other contexts. But he did not observe any similar evolution in Clean Water Act jurisprudence. As a result, he concluded that Congress’ intention, in using words with an established and longstanding definition in courts of law, was to retain the historic understanding of “navigable waters of the United States.”

Justice Thomas then took the opportunity to voice his general objection to the expansion of federal authority under the Commerce Clause, citing laws targeting mining and agriculture and protecting endangered species as having a tenuous connection with actual market commerce. Indeed, under his analysis arguably most national environmental laws would rest on questionable authority. This is not the first signal from the Supreme Court that some justices would like to revisit the scope of congressional authority under the Commerce Clause, making this an issue to watch in coming terms.

A second unanswered question in Justice Alito’s majority opinion is how “continuous” a surface connection must be to qualify as jurisdictional. Federal agencies have historically interpreted Justice Scalia’s opinion in Rapanos to include both continuous and intermittent connections but not ephemeral connections. But, as Justice Kavanaugh points out in his Sackett concurrence, Justice Alito did not expound further.

Finally, none of the justices provide any direction for waters besides traditional navigable waters, tributaries and wetlands. For example, “interstate waters” have been included in many, but not all, definitions of federal waters both before and immediately after the passage of the Clean Water Act. Under a Commerce Clause analysis these might be the most tenuous class of waters (because the fact that a water crosses state lines says nothing about the water’s size or commercial import), but the majority almost appears to concede their federal jurisdiction. Additionally, other waters besides tributaries and wetlands (e.g., ponds, puddles) may have continuous surface connections with traditional navigable waters, and the Sackett decision does not address which, if any, of those waters fall rightfully under federal jurisdiction.

In the two other concurring opinions, Justices Kagan, Sotomayor, Jackson, and Kavanaugh agreed the agencies’ Clean Water Act authority to regulate wetlands should be more circumscribed. However, they disagreed with the majority’s continuous surface connection test for determining federal jurisdiction. Instead, they contended wetlands should be jurisdictional if they have a continuous surface connection with other covered waters or if they are separated only by “a man-made dike or barrier, natural river berm, beach dune, or the like.” The concurring justices reasoned that this interpretation is a more natural understanding of the term “adjacent” than that expounded by the majority. With four justices agreeing on this definition and the degree of uncertainty left by the majority, the Supreme Court may again consider this interpretation.

But what is now settled is that Justice Kennedy’s significant nexus test no longer defines the contours of “waters of the United States.” Instead, at least for now, a wetland or tributary must have a “continuous” surface water connection to a covered water to allow a federal agency to assert jurisdiction. Any more precise guideposts on the majority’s interpretation will likely need to await a response from the agencies and could beget still more litigation. To date, EPA has issued a general statement in response, expressing its disappointment and explaining that it is considering its next steps.