On August 30, 2021, in Pasqua Yaqui Tribe et al. v. EPA et al. (Case No. 4:20-cv-00266-RM, Dkt. 99), the U.S. District Court in Arizona vacated the Trump administration’s 2020 Navigable Waters Protection Rule (“NWPR”), which had significantly walked back the scope of navigable “waters of the United States” (“WOTUS”) regulated under the Clean Water Act to include solely (1) territorial seas and traditional navigable waters; (2) tributaries of such waters; (3) certain lakes, ponds and impoundments of jurisdictional waters; and (4) wetlands adjacent to other jurisdictional waters. The NWPR sought to eliminate the Obama administration’s 2015 “significant nexus” rule, which aligned with Justice Kennedy’s plurality opinion in Rapanos v. United States that defined “navigable waters” to include “water or wetland[s] [that] . . . possess a ‘significant nexus’ to waters that are or were navigable in fact or that could reasonably be so made.” 547 U.S. 715, 759 (2006).

Finding clear agency error in promulgating the NWPR, the Arizona district court cited a substantial risk of environmental harm and inadequate consideration of the Clean Water Act’s statutory scheme and underlying policy goals. Indeed, the Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers had conceded those very concerns, but  sought only remand given the EPA’s ongoing rulemaking and deliberations to further update the definition of WOTUS.

The Arizona court’s vacatur order succeeded numerous decisions by district courts across the country that remanded the NWPR without vacatur, renewing the controversial open question of law regarding whether a district court’s vacatur order applies solely to the parties in the case, within the court’s geographical jurisdiction, or nationwide. Confusion on this question has been further exacerbated by district court decisions that came after the Arizona court’s decision. Several district courts—including in Massachusetts and New York—held the vacatur question moot in light of the Arizona court’s vacatur order or otherwise unnecessary to take up at present in light of ongoing litigation in other forums. But then a district court in New Mexico changed course again and remanded the NWPR with vacatur in Navajo Nation v. Regan (Case No. 2:20-cv-00602-MV-GJF, Dkt. 43), citing similar justifications as those articulated in the earlier Arizona district court’s decision.

Notwithstanding uncertainty on the scope of district court vacatur orders, the EPA has interpreted the Arizona court’s vacatur order to apply nationwide, issuing a statement that it and the Army Corps of Engineers have “halted implementation of the Navigable Waters Protection Rule and are interpreting ‘waters of the United States’ consistent with the pre-2015 regulatory regime until further notice” and that the EPA is continuing to “review the order and consider next steps.” To date, there has been no challenge to the EPA’s nationwide application of the vacatur order, though additional litigation may be on the horizon for existing parties in the cases discussed herein or future affected parties negatively impacted by the pre-2015 WOTUS standard’s reimplementation.

For example, should the Army Corps issue an adverse jurisdictional determination on a project based on application of the stricter pre-2015 WOTUS standard instead of a favorable determination via the NWPR, the affected party may have a viable cause of action on the grounds that the Arizona and New Mexico vacatur orders only apply to the parties in those respective cases or solely within those courts’ jurisdictions and, in turn, the EPA never properly repealed the NWPR nationwide and readopted the pre-2015 standard through formal notice and comment rulemaking. Indeed, a court’s vacatur order finding a particular statute or regulation unlawful does not automatically render that law repealed and erased from the books entirely; rather, the court order typically only precludes application of that law to the parties bound by the court’s judgment.

Significant uncertainties therefore remain as to whether the vacatur order (and thus the pre-2015 WOTUS definition) applies to affected projects prospectively, retrospectively, or both, and whether, notwithstanding the EPA’s one-size-fits-all reversion to the pre-2015 standard, the vacatur can be applied to parties outside of the Ninth or Tenth Circuits. Further clarity on WOTUS’s application to the regulated community may unfold as more courts weigh in and any appeals move forward.

In practical terms, the EPA’s decision to revert to the pre-2015 WOTUS definition serves as a placeholder as the agency actively pursues an updated definition, as announced on June 9, 2021. The Biden Administration has expressed interest in pursuing a durable definition that balances various stakeholder interests and toes the political middle—an ambition which may prove difficult in light of diversely opinionated comments received thus far in the pre-proposal public comment period that principally advocate for reimplementation of either the Obama- or Trump-era rules, respectively, or seek a permanent return to the pre-2015 regime.

On October 12, 2021, the EPA submitted its draft proposed updated WOTUS rule to the White House Office of Management and Budget for pre-publication review. The BakerHostetler Environmental and Energy teams continue to monitor this developing situation.