Entities seeking federal authorization for infrastructure projects that may impact waters of the United States must obtain a Section 401 certification under the Trump administration’s narrowed Section 401 certification rule—for now. On April 6, 2022, the U.S. Supreme Court held that the Trump administration’s Section 401 certification rule will stay in place while further litigation proceeds, potentially signaling how the court may view the underlying merits of the case pending before the U.S. Court of Appeals for the Ninth Circuit.
Section 401 of the Clean Water Act, 33 U.S.C. Section 1341, prohibits a federal agency from issuing a permit or license to conduct any activity that may result in any discharge into waters of the United States unless a certification is granted or waived. States and authorized tribes are responsible for issuing, denying or waiving these Section 401 certifications. A Section 401 certification or waiver is necessary to obtain certain federally issued permits, such as Section 404 dredge and fill permits, Rivers and Harbors Act Section 9 and 10 permits, and Federal Energy Regulatory Commission licenses for pipelines or hydropower facilities.
At issue before the Supreme Court—and now pending before the Ninth Circuit—was a 2020 Trump rule that reduces the time for states and tribes to make decisions on Section 401 certifications, and that limits the scope of review to “water quality requirements,” as defined by the rule. As outlined in a prior Brownstein alert, the effect of the rule is to limit the authority of states and tribes to deny Section 401 certifications or add water quality-related conditions to permits issued by the federal government.
Environmental groups and predominantly Democrat-led states challenged the Trump rule, and the cases were consolidated in the U.S. District Court for the Northern District of California. The Biden administration, having previously announced its intent to promulgate a new rule, asked the court to remand the Trump rule to the EPA for reconsideration without vacatur (not unlike it seeking remand without vacatur of the Trump “waters of the U.S.” rule in 2021). Certain states and environmental groups instead sought vacatur. The court agreed, remanding and issuing a nationwide vacatur of the Trump rule. Industry groups and predominantly Republican-led states then sought a stay of this ruling pending appeal to the Ninth Circuit. Both the district court and the Ninth Circuit rejected this request, and the appellants petitioned the U.S. Supreme Court for an emergency stay of the district court’s ruling.
The Supreme Court granted the petitioners’ stay request in a 5-4 decision, keeping the Trump rule in place while the appeal of the district court ruling proceeds to the Ninth Circuit. The Trump rule thus will remain until the underlying merits case is finally resolved or the Biden administration replaces it. The Biden administration is expected to issue a final replacement rule in 2023.
The Supreme Court’s decision has immediate, but potentially fleeting, implications:
- Regulated industries may, at least in the short term, face a lower barrier to obtaining certification or waiver. The Trump rule is generally thought to be more lenient because it limits the scope of state and tribal review.
- Entities with operations that will need federal permits with Section 401 certification requirements should consider how this decision affects the timeline for prospective projects. Until a new rule is promulgated or the Ninth Circuit adjudicates the merits, Section 401 certification review is subject to limits on timing and scope.
- This decision signals how the Supreme Court may rule on the merits of the industry group’s challenge to the district court’s nationwide vacatur of the Trump rule. If the Supreme Court upholds the Trump rule on the merits, it will remain in place until superseded by a new rule.
- The Biden administration’s plans to issue a new rule may be hastened by the Supreme Court’s decision, and there is greater uncertainty for projects whose certification and permitting process may begin under the Trump rule and conclude under the Biden rule.
This document is intended to provide you with general information regarding litigation over the Trump-era Section 401 certification rule. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.