State of California v. Wheeler

Background

The plaintiffs were seventeen states, the North Carolina Department of Environmental Quality, the District of Columbia, and the City of New York. They challenged the Environmental Protection Agency and Army Corps of Engineers’ Navigable Waters Protection Rule, published on April 21, 2020. The rule was scheduled to take effect on June 22, 2020, and substantially narrowed the definition of “waters of the United States” covered by the Clean Water Act.

The rule covered territorial seas and traditional navigable waters, their tributaries, certain lakes, ponds, and impoundments, and wetlands adjacent to other covered waters. It categorically excluded ephemeral features. The plaintiffs argued that the rule was arbitrary and capricious because the agencies had not adequately justified their major policy change, had improperly discounted scientific evidence, and had not adequately addressed the Clean Water Act’s goals. They also argued that the rule was contrary to the statute, including because it excluded some interstate waters.

The plaintiffs sought a preliminary injunction and, alternatively, an order under Section 705 of the Administrative Procedure Act postponing the rule’s effective date. Twenty-three other states were permitted to intervene in support of the rule. The court noted that the requirements for a Section 705 order were substantively identical to those for a preliminary injunction.

Legal standard

To obtain preliminary relief, a plaintiff must show a likely chance of success, likely irreparable harm without relief, that the balance of hardships favors relief, and that relief would serve the public interest. The court also applied the Ninth Circuit’s “sliding scale” approach, under which serious questions may support relief when the balance of hardships strongly favors the plaintiff, so long as the other requirements are met.

Under the Administrative Procedure Act, a court must set aside agency action that is arbitrary and capricious, contrary to law, beyond the agency’s statutory authority, or adopted without required procedures. The court’s role is to review whether the agency gave a logical and rational explanation, not to decide whether the agency selected the best environmental policy.

Court’s analysis

The court concluded that the plaintiffs had not shown a likelihood of success on their claim that the rule was contrary to the Clean Water Act. It found that the phrase “waters of the United States” was ambiguous and applied Chevron deference, meaning that a court generally accepts an agency’s reasonable interpretation of an ambiguous statute that the agency administers. The court determined that the Supreme Court’s prior decisions did not establish that the Clean Water Act required the agencies to adopt a broader definition than the 2020 Rule. The plaintiffs’ policy arguments therefore did not provide a sufficient basis for substituting the court’s judgment for the agencies’ choices at this stage.

The court also found that the plaintiffs had not shown a likelihood of success on their argument that the rule was unlawful because it excluded certain interstate waters. The statute did not use “interstate” in defining “navigable waters” or “waters of the United States,” according to the court.

On the arbitrary-and-capricious claims, the court held that the agencies adequately explained their change in policy. The agencies had conducted notice-and-comment rulemaking and assembled a substantial record explaining the change. The court rejected the argument that the agencies were required to maintain the broader prior approach merely because earlier scientific evidence supported it. It also found that the plaintiffs’ concerns about the rule’s treatment of “typical year,” ephemeral streams, intermittent streams, and reliance interests did not justify a preliminary injunction.

The court recognized that withdrawing federal protection could cause environmental effects and that preserving the existing situation might favor the plaintiffs to some extent. It nevertheless found that the balance of hardships did not overcome the plaintiffs’ insufficient showing on the merits. The court did not need to decide whether a Section 705 order could suspend the rule nationwide because the plaintiffs had not otherwise met the requirements for preliminary relief.

Disposition

The court denied the motion for a preliminary injunction or an order staying the effective date of the 2020 Rule. Judge Richard Seeborg signed the order on June 19, 2020. The opinion decided whether preliminary relief was warranted; it did not state that the court had entered a final judgment on the validity of the rule.