In May of 2023 the U.S. Supreme Court decision in Sackett v. EPA significantly limited the scope of the Clean Water Act and reduced the number of our nation’s waterways that can be federally regulated. The result is a potential boon for developers and property owners.
Background
Sackett arose from a legal challenge by Idaho landowners against the EPA. In short, the Sacketts sought to build a single-family home on wetland property. The EPA opposed the Sacketts’ unpermitted wetland removal on the basis of a broad reading of the Clean Water Act, arguing that the wetland’s connection to a ditch that feeds into a creek, which feeds into a navigable, intrastate lake, made the wetlands federally regulated “waters of the United States.”
The Sacketts sued the EPA, arguing that the wetlands on their property were not “waters of the United States” and thus not subject to EPA regulatory power. The District Court, applying the “significant nexus” test from Rapanos v. United States (2006), granted the EPA’s motion for summary judgment. In Rapanos, the Court, interpreting the Clean Water Act, held that “waters of the United States” were those that were connected in some way with navigable waters—not just in terms of continuously flowing surface waters. If the pollution of one water source resulted in damage to another, there was a “significant nexus” between the waters sufficient for the Clean Water Act to apply.
The Supreme Court unanimously ruled in favor of the Sacketts. The Court narrowed the definition of the “waters of the United States,” holding that the use of “waters” in the Clean Water Act refers only to streams, oceans, rivers, and lakes that are adjacent to wetlands such they are “indistinguishable” from those bodies of water due to their “continuous surface connection.” The Court further stated that such “waters of the United States are “relatively permanent, standing or continuously flowing” so that there is no “clear demarcation between waters and wetlands”. The Court stated that a statute must be “exceedingly clear” before an administrative agency, such as the EPA, could exert any jurisdiction over private property.
This ruling narrows the “significant nexus” standard from Rapanos and, as a result, the EPA’s jurisdiction over waters and wetlands significantly retracts. Where once nearly every wetland, stream, or other body of water was subject to EPA jurisdiction, now only those that have an “indistinguishable” surface connection are. As a result of this contraction, it will now be up to individual states to create rules to governing waterways and wetlands that are not “waters of the United States.”
In developing areas like the Triangle, this is a decision with potentially significant consequence as it relates to previously regulated waterbodies like farm ponds.
North Carolina Response
As a result of Sackett, it will now be up to the states to adopt regulations to protect any wetlands and waterways that fail the significant nexus standard. In North Carolina, state regulators will not be stepping in to fill the void left by the federal retreat. In the wake of Sackett, the North Carolina General Assembly overcame Governor Roy Cooper’s veto and successfully included a provision in the state’s 2023 Farm Act that limits the state’s regulatory authority to the wetlands and waterways already protected by the Federal Government. This ensures that only those water bodies satisfying the federal significant nexus standard will be regulated by the State of North Carolina.
The North Carolina Department of Environmental Quality estimates that nearly half of North Carolina’s wetlands–2.5 million acres–are impacted by Sackett and the new Farm Act provision. The waterways and wetlands that are most likely to lose protection include those that are isolated, ephemeral, or not clearly connected to a navigable lake or stream.
On February 12, 2024, Gov. Cooper issued Executive Order (EO) 305. The goals of the executive order include (1) the permanent preservation of 1,000,000 new acres of natural lands with special focus on wetlands, (2) the restoration or reforestation of 1,000,000 new acres of North Carolina’s forests and wetlands, and (3) planting 1,000,000 trees in urban areas across the state. To achieve these goals, the executive order, among other things, directs state agencies to study the social, economic, and environmental value of protecting North Carolina’s wetlands, particularly wetlands that recently lost state and federal protections, and directs the state to avoid or minimize new projects that would adversely impact vulnerable wetlands. However, ultimately, the executive order does not change jurisdictional wetlands definitions or permit requirements.
The Takeaway
Moving forward, property owners and developers in North Carolina may now find it easier to build on properties with water features. However, in the short-term there undoubtedly will be significant confusion regarding what is considered a regulated wetland or waterway while agencies adapt to the new regulatory landscape.
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