This morning a divided panel of the U.S. Court of Appeals for the Sixth Circuit issued a nationwide stay against the enforcement of a regulation issued by the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers defining the scope of the “waters of the United States” subject to federal regulatory jurisdiction under the Clean Water Act (CWA). This rule — the so-called WOTUS rule — represents the EPA and Army Corps’ effort to clarify the scope of federal regulatory jurisdiction in light of Supreme Court decisions in 2001 and 2006 concluding that the agencies had adopted an unduly broad interpretation of the scope of their authority. Numerous challenges against the WOTUS rule are pending in courts around the country, including one in North Dakota I covered here.

A particularly interesting aspect of the court’s decision is that there is some question as to whether the court of appeals has jurisdiction to consider a challenge to the rule under the CWA. Specifically, there is a question whether, under the terms of the CWA, challenges to the rule are to be brought in district or circuit courts. Other courts considering WOTUS rule challenges have split on this question. Also interesting is that those parties seeking a stay — those opposing the rule — are also those who are arguing that the challenges should be heard in district courts, and that Sixth Circuit lacks jurisdiction to hear the initial challenge.

On the merits, the majority concluded that the opponents of the WOTUS rule have shown a sufficient likelihood of prevailing in their challenge to justify the stay. Judge McKeague, joined by Judge Griffin, wrote for the court:

[W]e conclude that petitioners have demonstrated a substantial possibility of success on the merits of their claims. Petitioners first claim that the Rule’s treatment of tributaries, “adjacent waters,” and waters having a “significant nexus” to navigable waters is at odds with the Supreme Court’s ruling in Rapanos, where the Court vacated the Sixth Circuit’s upholding of wetlands regulation by the Army Corps of Engineers. Even assuming, for present purposes, as the parties do, that Justice Kennedy’s opinion in Rapanos represents the best instruction on the permissible parameters of “waters of the United States” as used in the Clean Water Act,it is far from clear that the new Rule’s distance limitations are harmonious with the instruction.

Moreover, the rulemaking process by which the distance limitations were adopted is facially suspect. Petitioners contend the proposed rule that was published, on which interested persons were invited to comment, did not include any proposed distance limitations in its use of terms like “adjacent waters” and significant nexus.” Consequently, petitioners contend, the Final Rule cannot be considered a “logical outgrowth” of the rule proposed, as required to satisfy the notice-and-comment requirements of the APA, 5 U.S.C. § 553. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). As a further consequence of this defect, petitioners contend, the record compiled by respondents is devoid of specific scientific support for the distance limitations that were included in the Final Rule. They contend the Rule is therefore not the product of reasoned decision-making and is vulnerable to attack as impermissibly “arbitrary or capricious” under the APA, 5 U.S.C. § 706(2).

The majority also concluded that there were good reasons to maintain the status quo pending the resolution of challenges to the rule.

What is of greater concern to us, in balancing the harms, is the burden—potentially visited nationwide on governmental bodies, state and federal, as well as private parties—and the impact on the public in general, implicated by the Rule’s effective redrawing of jurisdictional lines over certain of the nation’s waters. Given that the definitions of “navigable waters” and “waters of the United States” have been clouded by uncertainty, in spite of (or exacerbated by) a series of Supreme Court decisions over the last thirty years, we appreciate the need for the new Rule. See Rapanos, 547 U.S. 715; Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985). In one sense, the clarification that the new Rule strives to achieve is long overdue. We also accept that respondent agencies have conscientiously endeavored, within their technical expertise and experience, and based on reliable peer-reviewed science, to promulgate new standards to protect water quality that conform to the Supreme Court’s guidance. Yet, the sheer breadth of the ripple effects caused by the Rule’s definitional changes counsels strongly in favor of maintaining the status quo for the time being.

The court also noted that (as discussed here), the rule has already been stayed in 13 states. A nationwide stay serves the additional purpose of maintaining nationwide uniformity while the litigation proceeds.

Judge Keith dissented from the court’s opinion on the grounds that the court should not issue a stay against the rule until it determines that it has jurisdiction under the CWA to review the rule. In response, the majority argued that it has the discretionary power to issue a stay pending the resolution of the jurisdictional question, and that briefing on that matter is underway.