Colorado Sues Federal Government over Clean Water Act Rule
Complaint says new rule would reduce amount of federally protected wetlands, impede development and infrastructure

by Jessica Folker

Colorado on May 22 sued the Environmental Protection Agency and the U.S. Army Corps of Engineers over a new federal government rule the state says would “significantly reduce the waters in Colorado protected by the Clean Water Act.”

The rule, set to go into effect June 22, would narrow the definition of “waters of the United States,” which are protected by the CWA. The state claims the rule violates the Administrative Procedure Act and the National Environmental Policy Act and has asked a federal judge to declare it unlawful. The complaint, filed in the U.S. District Court for the District of Colorado, follows on the heels of a similar lawsuit filed May 1 by 17 states in a California federal court.

The new WOTUS rule is “significantly narrower” than any prior definition in the CWA’s 50-year history, according to the complaint. The 2020 rule restricts CWA protections to traditionally navigable waters, certain tributaries, lakes, ponds and impoundments as well as wetlands adjacent to jurisdictional waters.

Colorado says the new definition is inconsistent with case law on the scope of the CWA and abandons the “significant nexus” test laid out in U.S. Supreme Court Justice Anthony Kennedy’s concurring opinion in the 2006 case Rapanos v. United States. According to this test, wetlands or non-navigable bodies of water fall under the CWA if they “significantly affect the chemical, physical and biological integrity of other covered waters more readily understood as ‘navigable.’”

However, Rapanos failed to produce a majority opinion, muddying the waters as to which opinion is controlling. The plurality opinion in the case, penned by Justice Antonin Scalia, offered a much narrower interpretation of federal authority under the CWA, largely limiting jurisdiction to traditional navigable waters and adjacent wetlands.

The new WOTUS rule excludes ephemeral bodies of water, such as streams or pools that are only present for a short time as a result of rain or snow melt. In Colorado and other dry Western states, many streams are classified as intermittent — meaning they stop flowing for weeks or months — or ephemeral, the lawsuit states, citing data from the U.S. Geological Survey showing at least 68% of Colorado’s waters are temporary in nature.

“I don’t think we know the full extent of the damage that’s going to be caused by this new rule,” said Mark Squillace, professor at the University of Colorado Law School. “But certainly, many people believe it’s going to significantly reduce the amount of land that’s covered [by the CWA], particularly the wetlands.”

According to the lawsuit, the narrowed definition creates a “404 permitting gap” that would impede development and infrastructure projects in Colorado. Under Section 404 of the Clean Water Act, a permit is required to discharge dredged or fill material into waters of the U.S. The new rule means all dredging and filling activities affecting ephemeral waters and many of Colorado’s wetlands will be ineligible for such federal permits, according to the lawsuit. Without a permit, discharges of fill material could be illegal under the state’s own water quality laws, requiring Colorado to come up with its own permitting and mitigation programs, the complaint said, which would be time-consuming and costly.

“The reason this is so important is because developers often want to build or use property that is essentially defined as a wetland in biological terms,” said Squillace.

The lawsuit also claims the new rule could harm Colorado’s natural resources and recreation industry, which rely on good water quality and healthy wildlife habitats. Additionally, Colorado’s headwaters supply water to 19 states and Mexico for drinking, agriculture, industry and recreation, the complaint said, saddling the state with protecting the quality of water that flows out of state.

But Greenberg Traurig shareholder Paul Seby dismissed concerns of the 2020 rule bringing new or heavier burdens for states in regulation, noting Colorado already has a “robust and stringent” water quality program.

“The Trump administration is merely realigning the ‘waters of the United States’ definition to what the Supreme Court has said it is,” he said. That is, the narrower definition that existed before 2015, when the Obama administration issued a broader WOTUS rule that incorporated Kennedy’s “significant nexus” analysis.

Colorado fought the EPA and Corps of Engineers over that version of the rule as well and, along with 12 other states that sued, was granted a statewide injunction blocking the rule. “The [2020] rule does nothing but restore state authority,” Seby said. “And Colorado once fought for that, they got it and now [there is] a rule that recognizes that states have the primary role [in regulating water quality].”

“There’s no real environmental rationale to Colorado’s lawsuit,” he added. “It’s sheer politics of just throwing stones at the Trump administration for going back to what the law was in the first place.”

Politics, and especially the November election, likely played a role in the timing of the new rule. “[The rule is] partly controversial because it was done in a way that really did not effectively engage the interested community in a way that was appropriate,” said Squillace. “They really rushed this thing through.”

If Republicans face a backlash at the ballot box in November, Trump could risk having rules made late in his term overturned through the Congressional Review Act, according to Squillace, so agencies had been under pressure to finalize rules early so they wouldn’t be vulnerable to easy undoing by a new administration. However, in order for the CRA to pose a threat, he added, the Democrats would have to capture both the White House and the Senate.

To read other articles published in the June 1 issue of Law Week Colorado, purchase a copy online.