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Feeling The Pain From A Divided Supreme Court Ruling

When Alston & Bird LLP partner Paul Beard II surveys a property owner’s site, the land might be completely dry and situated nowhere near a body of water, but a nagging question still crosses his mind: Is there a jurisdictional wetland here?

While it’s a question any land use attorney is prone to ask, it’s become especially pertinent ever since the U.S. Supreme Court justices failed to reach consensus on when wetlands are considered “waters of the United States” under the Clean Water Act and issued a spectacularly fractured decision in Rapanos v. U.S. in 2006.

The 4-1-4 decision generated several opinions, none of which garnered enough votes to produce a majority opinion, leaving the lower courts and the U.S. Environmental Protection Agency in the years since to decide for themselves which opinion to follow — and attorneys to grapple with the fallout.

“The Supreme Court’s and agency’s interpretations have forced [lawyers] to ask this question … and perform due diligence in every permitting scenario,” Beard said.

Known as a plurality decision, Rapanos v. U.S. is one of a handful of cases every year in which the justices issue a ruling without a majority opinion. While they typically account for a small percentage of rulings, plurality decisions have ticked up in recent terms, and some lawyers say they expect more on the horizon.

Last term, the proportion of cases resulting in a plurality opinion with no majority reached 7.6%, the highest level yet during Chief Justice John Roberts’ tenure. During the 2017 term, it was 6.8%.

More broadly, the percentage of closely split opinions — both 5-4 rulings and 4-3 rulings — has risen over the decades and accelerated since 2000. While the average percentage of decisions with a one-vote margin was 16% during the 1950s, that figure was 20% from 2010-2018.

Even when the conservative justices align against the four liberal justices in a politically charged case, they seem more inclined to write separately and share how their philosophies diverge, said Barry McDonald, a professor at Pepperdine University School of Law.

“There’s sort of no sense left that you ought to subordinate your individual preferences in order to speak as a cohesive voice on the Supreme Court,” he said. “That culture is being lost.”

A Splintered Decision

When the justices fail to speak with one voice, where does that leave the law? The Supreme Court’s so-called Marks rule holds that when there’s no clear majority, lower courts should go with the position taken by the justices who concurred in the judgment “on the narrowest grounds.”

The problem is that’s not always easy to figure out.

“Sometimes it’s hard to tell whether the grounds are broader or narrower or whether the opinions are more like circles that intersect a little bit,” said Scott Nelson, an attorney at Public Citizen Litigation Group.

In Rapanos, Justice Antonin Scalia, writing for the plurality, said regulatory authority under the Clean Water Act should extend only to "relatively permanent, standing or continuously flowing bodies of water" connected to traditional navigable waters and to "wetlands with a continuous surface connection to" those types of waters.

However, retired Justice Anthony Kennedy issued a solo concurrence, agreeing with the outcome, but not the test. He articulated a less restrictive view of federal authority, stating that CWA coverage depends on whether the water has a "significant nexus" with traditional navigable waters. The federal appellate courts have since split on which opinion to apply.

At the time, Chief Justice Roberts bemoaned the lack of a majority opinion in a separate concurrence, saying lower courts and regulated entities “will now have to feel their way on a case-by-case basis.”

Confronted with the issue in 2007, the late Robert Propst, a senior federal judge for the Northern District of Alabama, was frank in his displeasure: “I will not compare the ‘decision’ to making sausage because it would excessively demean sausage makers,” he wrote in a footnote.

“One would think that if Marks determines that Justice Kennedy’s test is the controlling one, the Supreme Court would have been helpful enough to so acknowledge in at least a joint footnote in Rapanos itself. Just think how many later contradictory analyses that would save,” Judge Propst wrote in the opinion.

He added in another footnote: “Better yet, the court could perhaps recognize that rather than just argue with each other, they should reach clearly established law by at least a majority.”

As of late September, 63 district courts in 42 states as well as Washington, D.C., and Puerto Rico, have cited the Rapanos decision in a total of 223 cases, according to Anthony Francois, senior attorney at the Pacific Legal Foundation, the group that represented landowner John Rapanos.

The federal appellate courts have been divided over which opinion in the Rapanos case controls. Four circuits — the Fourth, Seventh, Ninth and Eleventh — have relied on Justice Kennedy’s concurrence, while four other circuits — the First, Third, Sixth and Eighth — have ruled that the government may provide jurisdiction under either the plurality opinion or the concurrence, according to Francois.

Administrative Limbo

Further complicating the issue is how the regulatory response has changed over time. The EPA under the Obama administration based its controversial 2015 water regulation on Justice Kennedy’s opinion, taking a wider view of the CWA, while the agency under the Trump administration has tried to shift its allegiance to the plurality opinion limiting federal authority.

“If we had a clear majority opinion in the original case in 2006, I don’t think there would’ve been as much room for interpretation by lower courts or by the agencies,” said S. Keith Garner, leader of Sheppard Mullin Richter & Hampton LLP’s real estate and environmental practice.

The 2015 rule, which sought to limit water pollution based on the “significant nexus” test, was challenged in litigation, and a few courts issued injunctions preventing its implementation nationwide. As a result, it took effect in 22 states, while nearly all the remaining states have followed 1986 guidelines.

The EPA under the Trump administration in September announced the repeal of the 2015 rule, a move that will take effect in November. It also plans to replace it with a new rule that would scale back federal jurisdiction, and that, too, is expected to wind up in court.

Dave Ross, the EPA’s water chief, remarked at a Texas conference in August that the most challenging environmental law question of his time has been how to define “waters of the United States” under the Clean Water Act.

Trickle-Down Effect

Because circuit courts disagree over which Rapanos opinion to follow and some circuits have yet to weigh in, litigation can be costly for landowners, especially when it comes to experts addressing the significant nexus test, according to Francois.

In civil enforcement suits, each side can spend hundreds of thousands to potentially millions of dollars, he said.

“The Clean Water Act is an issue of immense practical importance to business,” said Michael Kimberly, co-chair of McDermott Will & Emery’s appellate practice. “It touches everything from farming to homebuilding, mining, forestry, manufacturing, road building — everything.”

The fallout has been a source of concern not just for new developers, but also for longtime ones, such as agencies that manage reservoirs and flood control facilities, over how changes to the interpretation of the law will affect existing infrastructure.

“No one wants to see the Clean Water Act gutted. [Water agencies] want it to be interpreted in a way that makes operating of existing infrastructure manageable,” said Andre Monette, a Best Best & Krieger LLP partner who represents California water agencies. “Everybody is in a waiting period.”

Some think concerns over the uncertainty in the law are overblown, especially given that the EPA issued a guidance document in 2007 adopting Justice Kennedy’s significant nexus test, according to Pat Gallagher, director of the Sierra Club’s environmental law program.

“The primary motive of those who oppose Rapanos or [the 2007] Clean Water Act guidance is not uncertainty or confusion, just that they want to develop wetlands or watercourses, and they don’t want to go through permitting,” Gallagher said. “It’s not uncertainty; it’s profit motive.”

However, most agree the issue will probably resurface before the Supreme Court and get resolved there, especially now that the makeup of the court has changed.

Justice Brett Kavanaugh, in particular, may be more willing than his predecessor to side with conservative justices in a post-Rapanos wetlands case, “not simply because Kavanaugh might be more conservative than Justice Kennedy, but because he’s very recently been a lower court judge who understands the need for clarity and giving guidance to lower courts,” said George Hicks Jr., a Kirkland & Ellis LLP partner.

More Division Ahead

As the Rapanos decision continues to play out, some legal experts think plurality and closely split opinions will become a bigger share of the rulings that come out of the Supreme Court in the coming years.

The uptick in plurality rulings in particular reflects greater divisions on the court than just the traditional liberal-conservative axis, said Kimberly of McDermott Will.

“A ‘conservative’ law-and-order justice will sometimes vote differently from a ‘conservative’ libertarian, rights-oriented justice,” he said. “These intra-bloc divisions are relatively more pronounced in recent terms, producing more plurality opinions.”

The rise in closely split rulings seems partly a result of advocacy groups pushing more politically oriented, hot-button issues onto the court’s docket in light of the new conservative majority, Kimberly said. But it also may have to do with Chief Justice Roberts’ evolving role after Justice Kennedy’s retirement.

“With the chief justice perceived as the new ‘swing justice,’ the court has taken a turn to the right and is likely to test precedents established by its more liberal, predecessor courts,” Kimberly said. “These kinds of cases, too, will encourage divided opinions at a higher rate.”

Hicks of Kirkland predicted that there may be more closely split rulings, but not an appreciably greater number of plurality opinions. After all, Justice Kennedy, who played a key part in many plurality opinions, is no longer on the court, and his replacement, Justice Kavanaugh, seems less inclined to follow that approach.

It also seems as though the court, under Chief Justice Roberts’ efforts, prefers to decide issues narrowly, rather than issue fractured decisions on a broader issue.

“It is probably the best way, if not the only way, to ensure that there are majority decisions that provide guidance to lower courts and practitioners in an era when it seems nobody can agree on anything,” Hicks said.