NFIB’s ‘WOTUS’ Lawsuit: Small Business Takes on EPA

Date: October 05, 2015

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It’s as if we are playing a high-stakes game of “whack-a-mole” with EPA. Time-and-again we’ve struck down their regulations, temporarily fending-off their strangle-hold on the small business community. But, EPA continuously finds evermore ingenious (and dubious) ways to stretch its jurisdictional authority. For example, on the heels of our recent Supreme Court victories, slowing EPA’s environmental crusade to expand the reach of the Clean Air Act, we are once more opposing new EPA regulations aimed at curbing greenhouse gas emissions. And in our latest showdown, the fight has turned from the Clean Air Act to the Clean Water Act (CWA).
With finalization of its so-called “Waters of the United States” (WOTUS) Rule, the EPA and Army Corps of Engineers now seek a radical expansion of their jurisdiction over private property. Of course this comes nearly a decade after the Supreme Court’s decision in Rapanos v. United States, where the Supreme Court repudiated EPA’s attempt to expand its jurisdictional authority under the CWA. With that history in mind, it’s safe to say that EPA and Army Corps are on thin ice here.

In announcing the WOTUS Rule, EPA’s Administrator proclaimed that the Rule would extend new protections—under the guise of the CWA—to cover 1/3rd of the nation’s drinking water. But, the Agency is arguing in court that the WOTUS Rule actually narrow’s the scope of CWA jurisdiction, or that the Rule results in only a modest (three percent) expansion of federal authority over private property. The truth is that the WOTUS Rule greatly expands CWA jurisdiction. To be sure, EPA’s own maps have identified at least 8.1 million miles of rivers and streams that are newly regulated under the Rule. In the State of Kansas alone, the Rule has resulted in a 400% expansion of federal jurisdiction.

The WOTUS Rule so expansively interprets EPA’s charge to protect “waters of the United States,” that EPA and Army Corps now consider properties to contain regulated “waters,” even if they are dry 99 percent of the year. So long as water occasionally flows over a property—even if only during, or following, a storm—the WOTUS Rule may deem that portion of land to be a regulated “tributary.” All of this is a major concern for small business landowners because it’s illegal to build (or to do anything) on affected portions of land without a federal permit, which on average costs in excess of $200,000. And landowners who errantly use affected portions of their land, without proper permits, face potential federal penalties of as much as $37,500 per day.

Accordingly, it’s not surprising that other industry groups have joined with the National Federation of Independent Business, and numerous states, in challenging the WOTUS Rule. Since the Rule was finalized in late spring, more than a dozen lawsuits have been filed throughout the country; however, NFIB’s lawsuit is unique in that it does not merely challenge EPA and Army Corps’ authority to redefine “waters of the United States.” NFIB’s lawsuit also seeks to enforce an important statute that Congress adopted to protect the small business community from unnecessarily burdensome regulations.

Our lawsuit alleges that EPA and Army Corps violated the Regulatory Flexibility Act, which requires federal agencies to consider alternatives before adopting a regulation that adversely impacts small businesses. Rather than taking that requirement seriously, the Agencies merely certified that the WOTUS Rule would not have any meaningful impact on the small business community. Of course that argument is untenable in light of the severe economic impact that the Rule has on effected landowners—including many small business ranchers, farms and developers.

Unfortunately, at this point, we are still a long way from the ultimate resolution of this case. Given procedural questions over which federal court should hear our case, we expect that we will not likely get a decision until late next year. For the time-being small business landowners are advised to proceed cautiously if contemplating building—or other uses—of potentially affected lands. The good news is that a federal judge has temporarily blocked the rule in North Dakota and twelve other states, including: Alaska, Arizona, Colorado, Idaho, Missouri, Montana, Nebraska, New Mexico, South Dakota and Wyoming. Meanwhile NFIB is continuing to work to block the rule in the other 37 states.

*If you are concerned that the WOTUS Rule may impact your property, check out NFIB Small Business Legal Center’s recent webinar, archived online at http://www.nfib.com/article/epa-waters-rule-threatens-small-businesses-65795/

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