In a widely publicized decision published last week, the United States Supreme Court (“SCOTUS”) held that Environmental Protection Agency (“EPA”) authority to regulate wetlands of the United States pursuant to the federal Clean Water Act (CWA) extends only to wetlands that are indistinguishable from waters of the United States.

In that case, Sackett v. EPA, 2023 U.S. LEXIS 2202, the Sacketts, an Idaho couple, began construction on their property to prepare for building a home. Upon learning of the construction, the EPA informed the Sacketts that their property contained wetlands and that the work being done violated the CWA’s prohibition against discharging pollutants into “the waters of the United States,” including adjacent wetlands (33 U.S.C.S. § 1362(7)). The EPA ordered the Sacketts to restore their property to its natural state or face fines of over $40,000 per day. According to the EPA, the wetlands on the Sacketts’ property constituted “waters of the United States” because they were near a ditch that fed into a creak, which fed into Priest Lake, a navigable, intrastate lake. The Sacketts sued the EPA, arguing that the EPA did not have jurisdiction over their property because the wetlands on their property was not “waters of the United States.”

SCOTUS agreed with the Sacketts. According to the Court, the CWA only covers wetlands with a continuous surface connection to bodies that are “waters of the United States” in their own right. The Court rejected the prior “significant nexus” test for determining whether wetlands are “adjacent” to “waters of the United States” and held that the proper test for whether the EPA has authority over wetlands was whether the wetlands are “as a practical matter indistinguishable from waters of the United States.” In the case of the Sacketts, the Court found that the wetlands on their property were distinguishable from “waters of the United States” and thus not subject to EPA oversight.

Although the decision was unanimous, the justices disagreed on the proper test for determining whether wetlands are “waters of the United States.” Justice Alito, writing for the majority, reasoned that the EPA’s interpretation of the CWA was too broad, “putting a staggering array of landowners at risk of criminal prosecution for such mundane activities as moving dirt.” On the other hand, Justice Kavanaugh, in his concurrence, contended that the majority’s test “departs from the statutory text, from 45 years of consistent agency practice, and from this court’s precedents.” Justice Kavanaugh also expressed concern that the majority’s opinion would have “significant repercussions for water quality and flood control through the United States.”

While this decision restrains the EPA’s authority to regulate wetlands pursuant to the Clean Water Act, on a state level, the New Jersey Department of Environmental Protection (“NJDEP”) still has extensive regulatory oversight over State waters, including wetlands.