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An Arizona District Court's recent ruling has effectively eliminated the Trump-era Navigable Waters Protection Rule (NWPR) on a nationwide scale and could dramatically alter the Federal 404 wetland dredge-and-fill permit program. Judge Rosemary Marquez of the U.S. District Court for the District of Arizona ruled last week that the controversial NWPR, which redefined the waters of the United States protected by the Clean Water Act (CWA), involved "fundamental, substantive flaws" that were in conflict with the purpose of the CWA.

The definition of "waters of the United States," or "WOTUS", which identifies the waters regulated under the CWA, has been an important point of debate in the environmental sector for decades. In 2015, the Obama administration enacted regulations which broadly expanded the definition of WOTUS to include nearly 60% of the nation's waterways, including many man-made ditches, drawing criticism from industry opponents that it was too expansive and cumbersome. The rules triggered the need to obtain a CWA 404 Permit from the U.S. Army Corps of Engineers to disturb land where previously no permit was required. The Trump NWPR, enacted in 2020, eliminated the CWA protections for many man-made ditches, ephemeral streams, intermittent streams, and wetlands, drawing criticism from environmental groups that it severely weakened the CWA. Last week's ruling effectively returns the definition of WOTUS to the pre-2015 regulatory regime until the Biden administration EPA issues new rules.

In June the EPA had announced that it was beginning the lengthy process of undoing the Trump NWPR by restoring the pre-2015 regulatory scheme and that it further intended to formulate a new WOTUS rule shortly thereafter. Judge Marquez's opinion has fast-tracked the EPA's efforts by arguably removing the first arduous step of taking formal action to repeal the NWPR. Indeed, the EPA issued a statement only days after the ruling–and over a holiday weekend–indicating that in light of the Court’s opinion, "the agencies have halted implementation of the Navigable Waters Protection Rule and are interpreting 'waters of the United States' consistent with the pre-2015 regulatory regime until further notice." The EPA's quick adoption of the opinion could be seen as an attempt to side-step the debate over whether an Arizona District Court has the authority to issue a nationwide repeal of the 2020 NWPR, especially given that at least two other district courts have remanded the 2020 NWPR back to the EPA without vacating it.

It is clear that the EPA now considers both the Trump-era and Obama-era WOTUS rules to be vacated, and intends to enforce the CWA using the 2008 “Rapanos Guidance” issued by the Bush Administration following the Supreme Court's decision in Rapanos v. United States, 547 U.S. 715; 126 S.Ct. 2208; 165 L.Ed.2d 159 (2006). However, whether this action is premature remains to be seen, since the Arizona District Court ruling will inevitably be appealed. Only a few years ago, the nation was experiencing the impractical effect of split decisions from federal judges over the Obama-era WOTUS rule, resulting in 22 states using the 2015 Obama rule and 28 states using the Rapanos Guidance. Should the Arizona District Court ruling be overturned–or even stayed on appeal–the effect on the practical application of the CWA will once again be confusing, to say the least.

Many developers may be eager to obtain development permits to meet important scheduling milestones, but the EPA's swift adoption of Judge Marquez's opinion likely means that they will have to first obtain a U.S. Army Corps 404 wetlands permit utilizing the more expansive Rapanos Guidance and pay for any required mitigation. Alternatively, industry interests would be required to engage in a lengthy battle with the EPA or the Corps to identify which regulatory definition of WOTUS those agencies should use.

Florida entities face an additional dilemma. In 2020, the EPA delegated much of the Federal 404 wetland permitting program to the State of Florida, which has been issuing 404 Permits based on the NWPR rule. Significantly, Florida's agreement with the EPA also requires Florida to adopt any federal rule changes within one year of publication. The EPA has yet to publicly state, however, whether it considers the Arizona District Court ruling to have triggered the need for a new rule or other procedural changes to Florida’s 404 Permit Program. In the absence of such an announcement or directive from the EPA, Florida developers and regulators may have to make the practical decision to utilize the more expansive definition of WOTUS, using the Rapanos Guidance, to prevent interference by the EPA.