by Scott McFadin, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.
On April 21, the Environmental Protection Agency (EPA) and the United States Army Corps of Engineers issued proposed regulations that would increase their regulatory jurisdiction under the Clean Water Act (CWA). The Act gives EPA authority to regulate “waters of the United States.” Over the past two decades, federal courts have (pardon the pun) muddied the waters on agencies’ authority. The most recent Supreme Court pronouncement on federal regulators’ jurisdiction, Rapanos v. U.S., held that the agencies only have jurisdiction over waters or wetlands with a “significant nexus” to traditional navigable waters. EPA has taken advantage of this unclear legal guidance, proposing a stunningly broad definition of “waters of the United States.” EPA claims its definition merely clarifies existing guidance on “waters,” and will in fact reduce the scope of its jurisdictions. When one considers EPA’s own proposed definitional language, testimony from respected trade groups, and social scientists, however, the truly expansive reach of the new rule becomes quite clear. In classic bureaucratic fashion, EPA has proposed a regulation that is long enough to deter it being read and far-reaching enough to arguably provide jurisdiction over a dry ditch in your backyard.
Much like Humpty Dumpty in Through the Looking Glass, EPA is quite masterful at using words in just the way they choose them to mean.1 For example, part of the proposed definition includes “all tributaries of a traditional navigable water, interstate water, the territorial seas, or impoundment.”2 EPA then defines “tributary” to include man-made ditches and “perennial, intermittent, and ephemeral streams.”3 EPA also claims jurisdiction over all waters and wetlands “adjacent to” traditional navigable waters. In conjunction with this change, EPA asserts any land within a floodplain will automatically be considered adjacent to traditional navigable waters. Testimony before the House Small Business Committee illustrates the wide ranging impact of “adjacent” as it relates to floodplains. Jurisdiction over floodplains will prevent many other private landowners from pursuing the most efficient use of their own land. For example, one rancher testified that the automatic jurisdiction over floodplains would completely eliminate his summer pasture.4 One study demonstrates that 5.2 million acres of the state of Mississippi is located in floodplains.5 If your land is in a floodplain, under the proposed rule you must obtain a permit for building, farming, making alterations, etc. A study by David Sunding estimates that an individual permit can “cost $271,596 and take an average of 788 days to complete.”6
One might expect that before proposing such a burdensome rule, an agency would conduct conscientious cost-benefit analysis. Here, though, EPA plainly refused to analyze how the new definitions would impact small businesses. Instead, it performed an error-filled, opaque assessment that disserves the public EPA is meant to serve.7 Under the Regulatory Flexibility Act (RFA), an agency must prepare a regulatory flexibility analysis that evaluates a proposed rule’s implications for small businesses unless that agency certifies that the proposed rule will not have significant economic impact.8 EPA brazenly invoked that exception to the RFA, boldly declaring that the rule will not significantly impair small businesses.
Furthermore, EPA’s menial cost-benefit analysis could never survive any amount of scientific peer review. First, EPA’s analysis underestimates the amount of new acreage that will be within the reach of its CWA jurisdiction if the proposed rule is implemented as written. EPA estimates that the amount of jurisdictional waters would increase by only 2.7%.9 In arriving at this number, EPA used an Army Corps database of CWA permit applications for fiscal years 2009 and 2010. During that time, construction spending decreased by 24% compared to 2007 and 2008. The poor sample selection produces “artificially low numbers of applications and effected acreage.”10 EPA’s analysis also lacks credibility because it calculates the increased acreage and costs for all types of CWA permits using only data related to CWA Section 404 permit applications. Using only one type of data to estimate the added number and cost of all types of CWA permits does not accurately analyze the proposed rule’s true cost. Finally, EPA’s cost-benefit analysis is not transparent, so the public is unable to properly dissect its claims. The agency hardly bothers to explain how it arrived at certain numbers and conclusions. Conveniently for EPA, the Army Corps of Engineers’ database on which EPA bases a large amount of its findings cannot be accessed by nongovernment parties who wish to scrutinize the analysis.
Despite the widespread and costly impact EPA’s proposed “waters” definition could have on private land, the agency has utterly failed to provide the public with an accurate assessment of the costs associated with the proposed definition. The public deserves more transparency and conscientiousness from its government. Instead of conducting misleading cost-benefit analysis and arbitrarily declaring that its new rule will not harm small businesses, EPA should withdraw the proposal and perform impact analyses that comply with federal law and due process rights.
1. “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master — that’s all.” Lewis Carroll, Through the Looking Glass, ch. 6.
We are not the first to reference Lewis Carroll when assessing EPA’s interpretation of “waters of the United States.” In his 1993 U.S. v. Mills opinion, Federal District Court Judge Roger Vinson remarked that EPA’s use of a rule meant to protect wetlands against a landowner whose land was dry represented “a reversal of terms that is worthy of Alice In Wonderland.”
2. See Definition of “Waters of the United States” Under the Clean Water Act, 79 Fed. Reg. 22,188, 22,913 (Apr. 21, 2014) (to be codified at 33 C.F.R. pt. 328).
3. See id. at 22,197, 22,202; Lewis B. Jones & Adam G. Sowatzka, EPA & U.S. Army Corp of Engineers Propose to Expand Federal Jurisdiction over Waters and Wetlands, King & Spalding LLP (Mar. 27, 2014).
4. See Testimony of Jack Fields, National Cattlemen’s’ Beef Association, House of Representatives Small Business Committee, at 2.
5. See Mississippi Emergency Management Agency Quick Guide, at 2.
6. See David Sunding & David Zilberman, The Economics of Environmental Regulation by Licensing: An Assessment of Recent Changes to the Wetland Permitting Process, 42 Natural Resources J. 59, 74-76 (2002).
7. See David Sunding, Review of 2014 EPA Economic Analysis of the Proposed Definition of Waters of the United States, at 32.
8. See 5 U.S.C. § 603, 604, 605; Cement Kiln Recycling v. EPA, 255 F.3d 855, 868 (D.C. Cir. 2001).
9. Sunding at 8.
10. Sunding at 10.