On May 25, 2023, the United States Supreme Court ruled in favor of landowners seeking to build a modest home on “wetlands” in Sackett v. EPA. This ruling represents not only a clarification of a major law relevant to companies seeking to develop land near water bodies, but also a significant limitation on the EPA’s and Army Corps of Engineer’s power to regulate wetlands. The Supreme Court’s clarification of the Clean Water Act’s jurisdictional reach significantly benefits landowners from the standpoint of concerns over federal regulation of their property. However, the landowners must still comply with state and local requirements.
In 2004, the Sacketts purchased a plot of land near Priest Lake in Idaho. In preparation for building their home, they began backfilling their property with dirt and rocks. A short while later, the EPA sent the Sacketts a compliance order informing them their backfilling violated the CWA because their property contained protected wetlands. The EPA demanded the Sacketts to immediately restore the site and threatened the Sacketts with penalties of over $40,000 per day if they did not comply, despite their lot being worth only $23,000.
The Sacketts filed suit alleging that the EPA lacked jurisdiction because any wetlands on their property were not “waters of the United States.” The District Court entered summary judgment for the EPA and the Ninth Circuit affirmed, holding that the CWA covers adjacent wetlands with a significant nexus to traditional navigable waters and that the Sacketts’ lot satisfied that standard. The United States Supreme Court granted certiorari to decide the proper test for determining whether wetlands are “waters of the United States.”
The Supreme Court recognized the need for clarification of the definition of “wetlands” under the CWA, due to the Act’s severe consequences even for justifiably ignorant violations. Property owners who unknowingly violate the CWA can face criminal penalties, including imprisonment, or fines of over $60,000 per day.
Before the Court’s recent opinion, agency guidance instructed officials to assert jurisdiction over wetlands “adjacent” to non-navigable tributaries when those wetlands had “a significant nexus to a traditional navigable water.” In looking for evidence of a “significant nexus,” field agents were told to consider a wide range of open-ended hydrological and ecological factors. The significant nexus test and other obscure rules promulgated by the agencies over the years resulted in decades of uncertainty for permit applicants. Without a uniform rule established by the Court, the EPA and the Corps were free to implement a system of vague rules granting themselves broad jurisdictional reach. These interpretations led to rulings such as United States v. Deaton, where the Court held that a property owner violated the CWA by piling soil near a ditch 32 miles from navigable waters.
In Sackett, the Court rejected the “significant nexus” test (from earlier decisions) in favor of a more objective rule. A five-Justice majority held that “the CWA extends to only those wetlands that are as a practical matter indistinguishable from waters of the United States. This requires the party asserting jurisdiction over adjacent wetlands to establish “first, that the adjacent [body of water constitutes] . . . ‘water[s] of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” Note that a wetland must be affirmatively connected to, not just close to, a navigable waterway in order to qualify. The Court acknowledged that a surface connection could be interrupted by “low tides or dry spells” without precluding an area from qualifying as a wetland, but the text of the opinion makes clear that, in the Court’s view, a continuous surface connection to a navigable waterbody must be maintained the majority of the time in order for an area to so qualify.
The EPA attempted to argue that “wetlands are “adjacent” when they are “neighboring” to [CWA] covered waters, even if they are separated from those waters by dry land.” The Court rejected this interpretation as “inconsistent with the text and structure of the CWA,” and also stated that such a broad scope of authority would “give rise to serious vagueness concerns in light of the CWA’s criminal penalties.”
The Supreme Court’s new interpretation of wetlands covered under the CWA will effectively limit the geographical reach of the EPA’s jurisdiction. Obviously, the Sackett decision does not impact state and local wetlands regulations. We encourage the reader to carefully evaluate all of the applicable requirements when dealing with wetlands issues.
 Rapanos v. United States, 547 U.S. 715 (2006).
 United States v. Deaton, 332 F.3d 698, 702 (C.A.4 2003).
 Sackett, 143 S. Ct. at 1324 (quoting Rapanos, 547 U.S., at 755, 742, 126 S.Ct. 2208. Pp. 1338–41).