For the second time in two weeks, the U.S. Supreme Court sides unanimously with an AGC Construction Advocacy Fund-backed legal effort; this time on a critical Waters of the United States (WOTUS) case impacting Clean Water Act permits. 

On May 25, the U.S. Supreme Court unanimously decided in favor of landowners and AGC on a case (Sackett v. U.S. Environmental Protection Agency) that hinges on federal limits over waters and wet areas. As AGC of America has long held, attempting to redefine nearly every wet area, including even some ditches, in the U.S. as a federal water is clearly not legal. This decision comes on the heels of another AGC victory before the Court on May 11 in a decision protecting contractor-owner pre-bid communications.

The decision aligns with an AGC Construction Advocacy Fund-backed brief, and the Justices acknowledge the need for clarity due to the severity of criminal sanctions under the Clean Water Act that AGC raised. The Court roundly rejects the use of the flawed “significant nexus” test for determining when projects require a federal permit and establishes a new test for evaluating when a wetland is a waters of the United States (WOTUS).

While all nine justices agreed with AGC and the landowners, they had different opinions on their reasons for coming to such conclusion. All justices voted in favor of the Sacketts, although the court was split on reasoning. Justice Alito wrote the majority opinion (5-4). No justices dissented.

Justice Alito’s majority opinion states that EPA’s “’significant nexus’ theory is particularly implausible” and that “EPA has no statutory basis to impose it.” This decision throws the Biden Administration’s new rule into question—as it heavily relies on significant nexus. It also bolsters AGC’s ongoing legal challenges to that rule, which have already halted its implementation in 27 states.

The majority opinion outlined a test for determining when an adjacent wetland would fall under federal jurisdiction based on prior Supreme Court decisions. First, the water adjacent to the wetland has to be a WOTUS (i.e., a relatively permanent body of water connected to traditional interstate navigable waters). Secondly, “the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

Challenges Ahead

The federal agencies now have to determine how to apply the new test and figure out if any of the Biden Administration’s rule can still stand now that the “significant nexus” test is off the table.

Thanks to AGC Construction Advocacy Fund-backed litigation, the Biden administration’s rule is on hold in 27 states; however, the “significant nexus” test predates that rule. This means all projects in the U.S. are using the “significant nexus” test in some form to determine whether a federal water permit is needed. Contractors can expect some confusion in the short-term. AGC will continue to challenge the rule and work to provide clarity for permitting decisions.

For more information, contact Leah Pilconis at [email protected] or Melinda Tomaino at [email protected].