LawFlash

Supreme Court Stays District Court Order Vacating 2020 Clean Water Act Certification Rule

April 11, 2022

The US Supreme Court issued an order on April 6 staying the district court vacatur of the US Environmental Protection Agency’s 2020 Clean Water Act Section 401 Certification Rule, which imposed restrictions on state and tribal authority to deny permits under Section 401 of the Clean Water Act. This order allows the Trump-era certification rule to remain in place until the disposition of the appeal in the US Court of Appeals for the Ninth Circuit and the disposition of a petition for writ of certiorari, if certiorari is sought following the appeal.

This decision by the Supreme Court limits, at least in the short term, the ways in which certifying states and tribes may condition their approval of water quality certifications as well as their time for review, which could ease the certification process for projects such as hydropower dams and pipelines.

BACKGROUND

Under Section 401 of the Clean Water Act, federal licenses or permits that may result in a discharge to waters of the United States (WOTUS) may not be issued until the applicant has received a water quality certification from the relevant state or states.[1]

In 2019, President Donald Trump issued Executive Order (EO) 13,868, the Executive Order on Promoting Energy Infrastructure and Economic Growth.[2] In part, EO 13,868 directed the Administrator of the US Environmental Protection Agency (EPA) to issue new guidance on Section 401 and to publish proposed rules revising the implementing regulations. Accordingly, EPA revised its Section 401 guidance in June 2019 and published the final Clean Water Act Section 401 Certification Rule (the 2020 Rule) on July 13, 2020.[3]

The 2020 Rule contained three significant restrictions on the Section 401 certification process: 

  1. The 2020 Rule codified the US Court of Appeals for the DC Circuit’s decision in Hoopa Valley Tribe v. FERC, which provided that certifying authorities are bound by a strict one-year timeline in making their certification decisions.[4]
  2. The 2020 Rule imposed limits on the conditions that states and tribes may impose as part of their certification by providing that the scope of certification is “limited to assuring that a discharge from a Federally licensed or permitted activity will comply with water quality requirements.”[5]
  3. Under the 2020 Rule, states and tribes must make certification decisions based on specific discharges from a proposed activity, rather than the water quality effects of the activity as a whole.

DISTRICT COURT DECISION

The 2020 Rule was quickly challenged in US District Courts in California, Pennsylvania, and South Carolina. 

In January 2021, President Joseph Biden issued EO 13,990, titled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.”[6] EO 13,990 listed several rules, including the 2020 Rule, as rules that should be reviewed by EPA. EPA published a notice of intention to reconsider and revise the 2020 Rule in June 2021.[7]

In light of that stance, EPA requested that the 2020 Rule be remanded to the agency without vacatur. The South Carolina and Pennsylvania district courts did just that. The US District Court for the Northern District of California, after acknowledging that case law is unsettled as to whether vacatur is appropriate without reviewing an agency action on its merits, vacated the 2020 Rule and remanded it to EPA in October 2021. In December 2021, the court denied a request to stay the vacatur pending appeal, stating that the rule’s supporters had made no more than a marginal showing of irreparable harm.

Appeals seeking a stay of the California district court’s vacatur were filed in the US Court of Appeals for the Ninth Circuit by various trade associations and Louisiana, Arkansas, Mississippi, Missouri, Montana, West Virginia, Wyoming, and Texas. In February 2022, the Ninth Circuit consolidated those appeals and rejected the request for a stay, leaving the district court’s vacatur in place.

SUPREME COURT ORDER

Following the Ninth Circuit’s rejection of the stay request, appellants sought a stay from the Supreme Court, arguing that certain states had in the past exceeded their authority during the certification process and that the vacatur would cause irreparable harm. The Court granted the stay in a 5-4 split. This decision allows the 2020 Rule to remain in effect while the appeal in the Ninth Circuit, as well as any subsequent Supreme Court writ of certiorari, continues.

The majority declined to provide a rationale. Justice Kagan dissented, writing that the applicants “failed to substantiate their assertions of irreparable harm” and “fail[ed] to show that proper implementation of the reinstated regulatory regime—which existed for 50 years before the vacated rule came into effect—is incapable of countering whatever state overreach may (but may not) occur.”[8] Chief Justice Roberts, Justice Breyer, and Justice Sotomayor joined in the dissent.

IMPLICATIONS

The Supreme Court’s order revives the 2020 Rule—and its limitations for certifying states and tribes—while the Ninth Circuit hears the appeal. Practically, this means that certifying states and tribes will be required to act on certification applications within one year and are restricted in the types of conditions they may impose on certifications. As a result, a broad range of projects, including hydropower dams and pipelines, could face a lower barrier to certification than they otherwise might.

The outcome of the Ninth Circuit appeal remains to be seen. Prior cases, such as Hoopa, suggest that the 2020 Rule’s limitations on state efforts to extend the time for Section 401 certification will likely be upheld. However, as noted in the district court’s initial vacatur, the proposed rule’s limitations on the contents of certification conditions appear to be in tension with the Supreme Court’s decision in PUD No. 1 of Jefferson County v. Washington Department of Ecology,[9] which held that conditions in Section 401 certifications are not limited to conditions on “discharges.”

EPA sent a proposed rule regarding Section 401 certifications to the Office of Management and Budget for review on March 25, 2022, and a final rule is anticipated in spring 2023. While the exact contents of the rule likely depend in part on the outcome of the Ninth Circuit appeal, that forthcoming rule may include more flexibility for certifying states and tribes.

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CONTACTS

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Dallas
Stephen Fitzgerald

Houston
Laura C. Williams

San Francisco
Ella Foley Gannon

Los Angeles
James Dragna
Rick Rothman
David K. Brown

Philadelphia
Jeffrey Hurwitz

Princeton
John McGahren
Christopher McAuliffe

Washington, DC
Duke K. McCall, III
Douglas A. Hastings



[1] 33 U.S.C. § 1341(a)(1).

[2] 84 Fed. Reg. 15,495 (Apr. 10, 2019).

[3] 85 Fed. Reg. 42,210 (July 13, 2020).

[4] 913 F.3d 1099, 1101 (DC Cir. 2019).

[5] 85 Fed. Reg. at 42,211.

[6] 86 Fed. Reg. 7,037 (Jan. 20, 2021).

[7] 86 Fed. Reg. 29,541 (June 2, 2021).

[8] Louisiana et al. v. American Rivers et al., 596 U.S. ­____ (2022) (Kagan, J., dissenting).

[9] 511 U.S. 700 (1994).