Vindication in NFIB’s WOTUS Lawsuit

Date: January 22, 2018

Today the United States Supreme Court handed-down an opinion siding with National Federation of Independent Business and vindicating arguments we’ve made since the beginning of our lawsuit challenging the Environmental Protection Agency’s 2016 Waters of the United States (WOTUS) Rule. The WOTUS Rule would wildly expand federal authority over private property in a manner that would impose tremendous red-tape and exorbitant costs on many small business owners seeking to devote their lands to economically productive purposes. As such, we sued in federal court, in the Eastern District of Oklahoma where we had identified a number of NFIB members voicing special concerns about how the WOTUS Rule would affect their business. But the District Court never even gave us a hearing.

Instead the District Court deferred to a decision from the Sixth Circuit Federal Court of Appeals in Cincinnati, which had ruled that it had exclusive jurisdiction to hear any challenge to the WOTUS Rule. We appealed to the Tenth Circuit Federal Court of Appeals, arguing that the district court had an independent obligation to decide the jurisdictional question for itself. But the Tenth Circuit washed its hands of the issue, which meant that only the Supreme Court could correct the error.

Of course, the government argued vigorously that lawsuits challenging the WOTUS Rule should be heard by a federal court of appeal in the interest of obtaining a single national ruling. But, as we argued, these lawsuits belong in the district courts where they were initiated for a handful of reasons. First, there is a general presumption under the Administrative Procedures Act that suits should be brought first in district court. Second, as practical matter it makes more sense for district courts to be deciding questions of Clean Water Act jurisdiction, given that judges in district courts are more likely to appreciate local conditions on the ground. To be sure, it may be difficult for a judge in Cincinnati, Ohio to fully appreciate how his or her decision may affect lands in the arid west.

But, our most important argument was that there was no textual basis in the Clean Water Act for requiring our lawsuit to be brought in a federal court of appeal. And the Supreme Court agreed in a very well-reasoned and unanimous opinion, authored by Justice Sotomayor. You can read the opinion here.

Still, there was another aspect of this case that we thought important to small business. Indeed, there was reason for concern that a decision siding with the government would have not only meant that our WOTUS lawsuit would have to be prosecuted in the Sixth Circuit, but would impose a cloud of uncertainty as to whether small business landowners would be statutorily barred from challenging Clean Water Act jurisdiction in future cases—since the government’s supposed statutory requirement to bring an action in a court of appeals imposed a short statute of limitations. In such a case, we would have argued—as a matter of due process—that landowners should be entitled to challenge the constitutionality of a rule defining CWA jurisdiction as it may apply to them in an enforcement action; however, that would have placed farmers, ranchers and ordinary small business owners in the unenviable position of having to pursue a petition for certiorari in the Supreme Court. But considering the tremendous costs of litigation, that would foreclose the possibility of contesting Clean Water Act jurisdiction for all practical purposes, in most cases.

But happily, the Supreme Court’s decision today makes clear that no one will ever be put in that box. So, this is a good day for small business. And more good news may be on the way, as the Trump Administration is currently working to revise and or rescind the 2016 WOTUS Rule. In the interim, our lawsuit will now proceed against the 2016 WOTUS Rule in the Eastern District of Oklahoma, at least until we know definitively that the Rule has been thrown-out.

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