Sixth Circuit to Hear Oral Arguments on Water Rule

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By Amena H. Saiyid

Dec. 7 — The U.S. Court of Appeals for the Sixth Circuit will hear oral arguments Dec. 8 on whether it is the appropriate venue to hear challenges to a rule seeking to clarify the reach of the Clean Water Act that was issued by the Environmental Protection Agency and the U.S. Army Corps of Engineers in June.

A decision by the Sixth Circuit on whether it even has jurisdiction in the case could either mean a stay it issued on the rule in October remains in effect nationwide or is lifted. Even if it is lifted, a stay could remain in place after the U.S. District Court for the District of North Dakota blocked the rule in August following a separate challenge in that court.

“What is really ironic about all this right now is that EPA and the corps are arguing very strenuously that the Sixth Circuit does have jurisdiction, although the court has already sent a pretty strong signal (in its Oct 9 order) that it believes the Clean Water Rule is illegal! So if EPA and corps win on the jurisdiction issue, it looks like the odds are better than even that the clean water rule will not survive judicial review,” Richard Stoll, partner in the Washington, D.C., and Milwaukee offices of Foley & Lardner LLP, said in a Dec. 7 e-mail to Bloomberg BNA, describing the proceedings as “a holy mess.”

The Sixth Circuit in early October issued a nationwide stay on the rule that will remain in place until it settles the question of whether an appellate or a district court has jurisdiction to hear challenges to the clean water rule (Ohio v. U.S. Army Corps of Eng'rs. (In re EPA and Dep't of Def. Final Rule), 6th Cir., No. 15-3799, 10/9/15; 81 ERC W-2, (10/23/15))197 DEN A-1, 10/13/15).

The question of the court's jurisdiction arises because the Clean Water Act is unclear as to where challenges to rules under that statute should be heard, attorneys have said, leading to multiple complaints and challenges filed in the district and appellate courts. Section 509 (b)(1) of the Clean Water Act allows challenges to effluent limits and permit issuance or denials to be heard in appellate courts.

“Equally ironic is that lots of the states and industry, agriculture, development groups who want to see the rule vacated are arguing that the Sixth Circuit doesn't have jurisdiction. If they prevail on their jurisdictional arguments, the nationwide stay goes out the window! You would still have the stay effective in 13 states as covered by that North Dakota judge's order,” Stoll said.

The Eleventh Circuit also will be considering the court's jurisdiction question during oral arguments on Feb. 22 (219 DEN B-1, 11/13/15).

Attorneys agree that the ban on the rule that the U.S. District Court for the District of North Dakota imposed on 13 states in late August will take effect if the Sixth Circuit finds that an appellate court has no jurisdiction over hearing challenges to the clean water rule North Dakota v. EPA, 2015 BL 277809 (2015) ; 173 DEN A-11, 9/8/15).

The Sixth Circuit said that its stay would allow for “more deliberate determination” of whether the administration's rule is “proper” under federal law.

“A stay temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new Rule and whether they will survive legal testing,” the Sixth Circuit said, while noting that the petitioners had demonstrated that they could win on the merits of their arguments.

Lowell Rothschild, a senior attorney with Bracewell & Giuliani LLP, agreed with Stoll, but warned that the legal fray could get messier if the Eleventh Circuit rules on the question of jurisdiction. An appeal was filed with the Eleventh Circuit on the question of jurisdiction because the U.S. District Court for the Southern District of Georgia held that an appellate court, not a district court, had jurisdiction over the water rule challenge.

“If the Eleventh Circuit also finds that the district court has jurisdiction then those states will be left in a no-man's land,” Rothschild said.

He said the significance of the Dec. 8 arguments lies primarily with the government that has to litigate each one of the cases in half a dozen venues. The odds are high these challenges will land at the U.S. Supreme Court, “but the question is how quickly will they get there.”

It is highly unlikely in Rothschild's opinion that the Obama administration will be the one litigating these cases before the Supreme Court, particularly if the Sixth and the Eleventh circuits find the district court's to be the jurisdiction for the challenges. “It will most likely be the next administration that will be arguing the merits of this case before the Supreme Court,” he said.

According to Justin Pidot, associate professor at the University of Denver Sturm College of Law, “The tenor of the questions asked at oral argument will go a long way to indicating what the judges think about that question.”

Water Rule is ‘Other Limitation.'

Regardless of how the appellate courts rule on the question of the court's jurisdiction, both Rothschild and Stoll say the Dec. 8 oral arguments will narrowly focus on the applicability of Section 509(b)1) of the Clean Water Act.

Under this provision, a federal appeals court can be established as the appropriate venue if the Justice Department can prove that the Clean Water Rule falls under the category of “other limitation,” according to Rothschild.

At the oral arguments in Cincinnati, 18 states will join multiple industry groups including the American Farm Bureau Federation and the Utility Water Act Group in asking the Sixth Circuit to dismiss the case over lack of jurisdiction. The EPA and the corps along with seven states—Connecticut, Hawaii, Massachusetts, New York, Oregon, Vermont and Washington—and the District of Columbia and a coterie of environmental groups are requesting that the Sixth Circuit retain jurisdiction.

In its Oct. 23 brief, the Justice Department argued for a practical rather than a “cramped” reading of the judicial review provisions in the Clean Water Act. The DOJ also said giving district court jurisdiction would be akin to wasting judicial and party resources, resulting in substantial delays in resolving the challenges to the rule.

“The Clean Water Rule is a nationally-applicable regulation that must be considered in each and every Section 402 permitting decision (in addition to other actions implementing the CWA),” the Justice Department brief said.

Government Attempts to ‘Gloss Over.'

The Utility Water Act Group, which represents three national trade associations of public, investor-owned, and rural power companies, plans to focus its arguments on the Justice Department attempting to gloss over Section 509 of the Clean Water Act.

Andrew Tuner, an attorney with the Washington, D.C., office of Hunton & Williams LLP, told the Sixth Circuit in a Nov. 4 brief that the Clean Water Rule is “a wholesale redefinition” of the waters of the U.S. term under the Clean Water Act.

“The Rule would result in a nationwide shift in federal jurisdiction over land and water, as reflected by the expanse of States, industry, and others challenging the Rule in the district courts,” wrote attorneys Kristy Bulleit and Turner, both with Hunton & Williams, in their motion to dismiss the case over lack of jurisdiction.

They said the Clean Water Rule is not an “effluent limitation or other limitation” under any “common-sense reading” of that term, and is distinct from the rules subject to review under § 509(b)(1)(E), which involve specific, readily apparent limits on point sources and pollutants under the National Pollutant Discharge Elimination System program run by the EPA or by delegated states.

“The Rule goes well beyond the NPDES program, involves myriad other CWA programs, and affects States’ sovereignty over their own waters, and its reach and consequences are unknown,” they concluded.

The UWAG attorneys also rejected the Justice Department's argument about efficiency and conservation of party resources, saying it is irrelevant to interpretation of Section 509 (b).

To contact the reporter on this story: Amena H. Saiyid in Washington at asaiyid@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com