State of Texas v. United States Environmental Protection Agency

In the United States District Court March 19, 2023

Nathan Ochsner, Clerk

for the Southern District of Texas

GALVESTON DIVISION

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No. 3:23-cv-17

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STATE OF TEXAS, ET AL., PLAINTIFFS,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

DEFENDANTS.

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MEMORANDUM OPINION AND ORDER

GRANTING PRELIMINARY INJUNCTION

══════════════════════════════════════════

JEFFREY VINCENT BROWN, UNITED STATES DISTRICT JUDGE:

A federal rule revising the definition of “waters of the United States”

under the Clean Water Act, 33 U.S.C. § 1251 et seq., will take effect on March

20, 2023. Revised Definition of “Waters of the United States,” 88 Fed. Reg.

3004 (Jan. 18, 2023) (“the Rule” or “the 2023 Rule”). Two states—Texas and

Idaho (“the States”)—and eighteen national trade associations (“the

Associations”) have asked the court to preliminarily enjoin the Rule while the

court considers their consolidated request to vacate and remand. Dkts. 13,

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34; 20 Dkt. 15.1 The States have asked to enjoin the Rule within their borders,

Dkts. 13, 34; the Associations have asked for a nationwide injunction, 20 Dkt.

15. The court grants the States’ motion2 but denies the Associations’.

Background

A. The Act

Congress passed the Clean Water Act to “restore and maintain the

chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C.

§ 1251(a). Congress also carefully crafted the Act “to recognize, preserve, and

protect the primary responsibilities and rights of States to prevent, reduce,

1 The States and Associations filed their original complaints and motions for

preliminary injunction before the parties requested, and this court granted, their

motion to consolidate the Associations’ case, Civil Action No. 3:23-cv-20,

American Farm Bureau Federation, et al. v. United States Environmental

Protection Agency, et al., with the States’ case. Dkts. 23, 27. When the court refers

in this opinion to docket entries from the merged case, Civil Action No. 3:21-cv-20,

the numeral “20” will precede the docket entry (e.g., “20 Dkt. [number]”). All

citations to a docket entry not preceded by “20” refer to documents filed in the lead

case, Civil Action No. 3:23-cv-17.

2 Though the States did not request it in their preliminary-injunction

motion, Dkts. 13, 34, counsel for the Associations represented at the injunction

hearing that the States now seek nationwide relief. Hearing Tr. 38:18–19. The

plaintiffs’ joint surreply following the hearing reiterates this. Dkt. 59. The first hint

of such a request by the States was a passing reference tucked in a footnote in the

States’ reply brief. See Dkt. 50 at 10 n.14 (“The States incorporate [the

Associations’] discussion of the scope of injunction.”). But the States have not

independently requested nationwide relief—in their motion for preliminary

injunction, in the cited reply brief, or at the hearing. And they have made “no

argument why relief outside their borders is ‘necessary to prevent irreparable

injury’ to them.” Dkt. 57 at 2 (emphasis added) (citing 5 U.S.C. § 705).

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and eliminate pollution [and] to plan the development and use (including

restoration, preservation, and enhancement) of land and water resources.”

Id. § 1251(b).

Discharging pollutants into, dredging, or filling “navigable waters”

without a federal permit may expose a person to civil or criminal penalties

under the Act. Id. §§ 1311, 1319, 1342, 1344. For instance, one who violates

the Act’s permitting requirements may suffer monetary penalties of up to

$25,000 per day, imprisonment for up to one year, or both. Id. at

§ 1319(c)(1). The phrase “discharge of a pollutant” encompasses “any

addition of any pollutant to navigable waters from any point source,” and

“pollutant” includes not only traditional contaminants but also solids such

as “dredged spoil, . . . rock, sand, [and] cellar dirt.” Id. § 1362(6), (12).

The Act defines “navigable waters” as “waters of the United States,

including the territorial seas.” Id. § 1362(7). “Because many of the Act’s

substantive provisions apply to ‘navigable waters,’ the statutory phrase

‘waters of the United States’ circumscribes the geographic scope of the Act in

certain respects.” Nat’l Ass’n of Mfrs. v. Dep’t of Def., 138 S. Ct. 617, 624

(2018).

Congress authorized the Environmental Protection Agency to

administer the Act, 33 U.S.C. § 1251(d), and the U.S. Army Corps of

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Engineers to issue permits for projects on land or water under the Act’s

jurisdiction, id. § 1344. But the EPA and the Corps (“the Agencies”) do not

have unbridled jurisdiction to regulate all the nation’s waters. Rather, “[i]n

regulating discharge, the Act ‘anticipates a partnership between the States

and the Federal Government,’ with both sovereigns sharing regulatory

responsibilities for water protection.” Gulf Restoration Network v.

McCarthy, 783 F.3d 227, 230 (5th Cir. 2015) (quoting Arkansas v.

Oklahoma, 503 U.S. 91, 101 (1992)).

B. Supreme Court Precedent

The Supreme Court has taken a few opportunities to interpret the

meaning of “waters of the United States” under the Act. First, in United

States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), the Court held

that a wetland directly abutting a traditionally navigable creek qualified as

“waters of the United States.” Rapanos v. United States, 547 U.S. 715, 765–

66 (2006) (Kennedy, J., concurring) (citing Riverside Bayview, 474 U.S. at

139). But the Riverside Bayview Court reserved “the question of the Corps’

authority to regulate wetlands other than those adjacent to open waters.”

Rapanos, 547 U.S. at 766 (citing Riverside Bayview, 474 U.S. at 131–32, 131

n.8).

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Sixteen years later, Solid Waste Agency of Northern Cook County

(SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001), presented

another opportunity. The SWANCC Court rejected the Corps’ interpretation

of isolated sand and gravel pits that “seasonally ponded” as “waters of the

United States,” id. at 164, 172–74, and held that the phrase excluded

“nonnavigable, isolated, intrastate waters,” id. at 172.

Finally, the Court most recently considered this question in Rapanos.

In a plurality opinion by Justice Scalia, the Rapanos Court vacated and

remanded a rule extending the meaning of “waters of the United States”

under the Act to “wetlands, which lie near ditches or man-made drains that

eventually empty into traditional navigable waters.” Rapanos, 547 U.S. at

729; see also id. at 787 (Kennedy, J., concurring in the judgment). The four-

justice plurality proposed the so-called “relatively permanent” test for

determining whether wetlands were “waters of the United States.” Id. at 739,

742. Justice Kennedy’s concurrence suggested a different approach: the

“significant nexus” test. Id. at 779–80.

In October 2022, the Supreme Court heard oral argument in Sackett v.

EPA, 142 S. Ct. 896 (2022) (No. 21-454). Sackett is on appeal from the Ninth

Circuit, where the court “appl[ied] Justice Kennedy’s ‘significant nexus’

inquiry to evaluate whether EPA has jurisdiction to regulate” wetlands.

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Sackett v. EPA, 8 F.4th 1075, 1091 (9th Cir. 2021), cert. granted in part, 142

S. Ct. 896 (2022). In granting the petition for writ of certiorari, the Court

characterized the Sackett issue as “[w]hether the Ninth Circuit set forth the

proper test for determining whether wetlands” amount to “waters of the

United States” under the Act. Sackett, 142 S. Ct. 896 (2022) (No. 21-454).

The Court is anticipated to decide Sackett before the end of the term.

C. The 2023 Rule

The Rule defines “waters” to include the five following categories:

▪ traditional navigable waters, the territorial seas, and

interstate waters (“paragraph (a)(1) waters”);

▪ impoundments of ‘waters of the United States’ (“paragraph

(a)(2) impoundments”);

▪ tributaries to traditional navigable waters, the territorial seas,

interstate waters, or paragraph (a)(2) impoundments when

the tributaries meet either the relatively permanent standard

or the significant nexus standard (“jurisdictional

tributaries”);

▪ wetlands adjacent to paragraph (a)(1) waters, wetlands

adjacent to and with a continuous surface connection to

relatively permanent paragraph (a)(2) impoundments,

wetlands adjacent to tributaries that meet the relatively

permanent standard, and wetlands adjacent to paragraph

(a)(2) impoundments or jurisdictional tributaries when the

wetlands meet the significant nexus standard (“jurisdictional

adjacent wetlands”); and

▪ intrastate lakes and ponds, streams, or wetlands not identified

in paragraphs (a)(1) through (4) that meet either the relatively

permanent standard or the significant nexus standard

(“paragraph (a)(5) waters”).

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88 Fed. Reg. at 3005–06. The Rule also lists eight exclusions, including

waste-treatment systems, artificially irrigated areas that are naturally dry,

and ditches that are “excavated wholly in and draining only dry land and that

do not carry a relatively permanent flow of water.” Id. at 3067.

Two of the 2023 Rule’s features are particularly salient to the plaintiffs’

claims. First, the Rule codifies a modified version of Justice Kennedy’s

significant-nexus test. Compare id. at 3006, with Rapanos, 547 U.S. at 780.

Second, the Rule imposes jurisdiction on all “interstate waters, regardless of

their navigability.” 88 Fed. Reg. at 3072.

D. This Litigation

In January 2023, the Agencies published the 2023 Rule to define “the

scope of waters protected under” the Act. Id. at 3004. This consolidated case

challenges and seeks to enjoin the Rule’s implementation. Dkts. 13, 32; 20

Dkts. 12, 15.

Asserting that the 2023 Rule will burden state agencies and violate

state sovereignty, the State of Texas and five Texas state agencies sued the

Agencies on January 18. Dkt. 1 ¶¶ 4–9. Meanwhile, the Associations—on

behalf of their members—also sued the Agencies in a separate action. 20 Dkt.

1 ¶¶ 15–31. The Associations amended their complaint on February 2. 20

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Dkt. 12. On February 27, Texas amended its complaint to add the State of

Idaho and Idaho’s interested agencies as plaintiffs. Dkt. 32.

The two sets of plaintiffs have sued on both statutory and

constitutional grounds. First, the plaintiffs challenge the 2023 Rule under

the Administrative Procedure Act (“the APA”) on four bases:

(1) arbitrary & capricious, 5 U.S.C. § 706(2)(A);

(2) “contrary to a constitutional right, power, [or] privilege,” id.

§ 706(2)(B);

(3) exceeding statutory authority, id. § 706(2)(C); and

(4) promulgated “without observance of procedure required by law,”

id. § 706(2)(D).

Dkt. 32 ¶¶ 67–83; 20 Dkt. 12 ¶¶ 93–98, 102–03.

The plaintiffs also allege that the 2023 Rule is unconstitutional in at

least four ways: it violates the Commerce Clause, the Tenth Amendment, the

Due Process Clause, and the Non-Delegation Doctrine. Dkt. 32 ¶¶ 75–83; 20

Dkt. 12 ¶¶ 104–05. Finally, the Associations claim the Rule violates the

Regulatory Flexibility Act of 1980, as amended, 5 U.S.C. §§ 601–612.3 20 Dkt.

12 ¶¶ 102–03.

3 The court acknowledges that the Associations also alleged a separate

“claim” that the Rule violates the “major questions” doctrine. 20 Dkt. ¶¶ 98–100.

To the extent that doctrine applies, it is more aptly categorized as a tool for

deciding whether an agency exceeded its statutory authority than as a stand-alone

claim. See, e.g., Dkt. 32 ¶ 74.

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The court consolidated the States’ and Associations’ actions on

February 13. Dkt. 27. The next day, it granted intervenor—defendant Bayou

City Waterkeeper’s unopposed motion to intervene. Dkts. 20, 30.

Now before the court is the plaintiffs’ request to preliminarily enjoin

the Rule before it goes into effect on March 20. Dkt. 13; 20 Dkt. 15 at 4. The

intervenor and federal defendants have filed response briefs, Dkts. 39, 40,

and the States and Associations have replied to those responses, Dkts. 49,

50. After reviewing the parties’ filings, the court convened a hearing on

March 15, where all parties presented argument. Finally, the parties

submitted short post-hearing briefs at the court’s invitation. Dkts. 58, 59.

II. Legal Standards

A. Standing

1. Generally

To meet the constitutional minimum for standing, a plaintiff must

show the following:

(1) “an injury in fact—an invasion of a legally protected

interest which is (a) concrete and particularized; and

(b) actual or imminent, not conjectural or hypothetical”;

(2) “a causal connection between the injury and the conduct

complained of”; and

(3) a likelihood—as opposed to a mere speculation—that a

favorable decision will redress the injury.

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Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (cleaned up).

The first element, injury in fact, requires “an invasion of a legally

protected interest that is concrete and particularized and actual or imminent,

not conjectural or hypothetical.” Spokeo, Inc. v. Robins, 578 U.S. 330, 340

(2016) (internal quotation marks omitted). “An allegation of future injury

may suffice if the threatened injury is certainly impending, or there is a

substantial risk that the harm will occur.” Susan B. Anthony List v. Driehaus,

573 U.S. 149, 158 (2014) (internal quotation marks omitted).

The second element, causation, “requires a ‘traceable connection’

between the plaintiff’s injury and the defendant’s conduct.” Aransas Project

v. Shaw, 775 F.3d 641, 648 (5th Cir. 2014) (quoting Steel Co. v. Citizens for

a Better Env’t, 523 U.S. 83, 103 (1998)). And the third element,

redressability, “requires a likelihood that the requested relief will redress the

alleged injury.” Shaw, 775 F.3d at 648 (internal quotation marks omitted).

“[E]ach form of relief requested in the complaint” must be supported

by “[a]t least one plaintiff” with standing. Town of Chester v. Laroe Ests.,

Inc., 581 U.S. 433, 439 (2017). But a plaintiff seeking relief apart from that

sought by other plaintiffs must show its own standing to obtain that relief.

Id. (“[A] plaintiff who has standing to seek damages must also demonstrate

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standing to pursue injunctive relief.”); see also Barber v. Bryant, 860 F.3d

345, 352 (5th Cir. 2017).

States’ Standing

“States are not normal litigants for the purposes of invoking federal

jurisdiction” and are owed “special solicitude.” Massachusetts v. EPA, 549

U.S. 497, 518, 520 (2007). “When special solicitude is appropriate, a state

can establish standing ‘without meeting all the normal standards for

redressability and immediacy.’” Texas v. United States (DACA), 50 F.4th

498, 514 (5th Cir. 2022) (quoting Massachusetts, 549 U.S. at 517–18).

Instead, state standing requires merely “some possibility that the requested

relief will prompt the injury-causing party to reconsider the decision that

allegedly harmed the litigant.” Texas (DACA), 50 F.4th at 514 (quotation

omitted). “Special solicitude” requires that (1) the state “have a procedural

right to challenge the action in question, and (2) the challenged action must

affect one of the [s]tate’s quasi-sovereign interests.” Id.

For the first requirement, the Fifth Circuit has held that “[i]n enacting

the APA, Congress intended for those ‘suffering legal wrong because of

agency action’ to have judicial recourse, and the states fall well within that

definition.” Id. (quotation omitted); see also 5 U.S.C. § 702. The second

requirement considers whether the state has an interest in protecting “public

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or governmental interests that concern the state as a whole,” such as those

“involving boundaries and jurisdiction over lands and their inhabitants, and

in cases directly affecting the property rights and interests of a State.”

Massachusetts, 549 U.S. at 520 n.17 (quotations omitted).

3. Organizational and Associational Standing

Organizations can show standing two ways: organizational standing or

associational standing. Vote.Org v. Callanen, 39 F.4th 297, 303 n.2 (5th Cir.

2022). “Organizational standing requires the organization to establish its

own standing premised on a cognizable Article III injury to the organization

itself.” Id. Associational standing, on the other hand, occurs when the

organization’s individual members have standing and the interests the

organization seeks to protect on their behalf are “germane to its purpose.”

Id. (quotation omitted).

B. Preliminary Injunction

The party seeking a preliminary injunction must show the following:

(1) a substantial likelihood that it will prevail on the merits, (2) a

substantial threat that it will suffer irreparable injury if the

injunction is not granted, (3) that its threatened injury outweighs

the threatened harm to the party whom it seeks to enjoin, and

(4) that granting the preliminary injunction is in the public’s

interest.

Texas v. EPA, No. 3:15-CV-00162, 2018 WL 4518230, at *1 (S.D. Tex. Sept.

12, 2018) (citing PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535,

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545 (5th Cir. 2005)). An injunction is “an extraordinary remedy” that a court

should not grant “unless the party seeking it has clearly carried the burden

of persuasion on all four requirements.” Dennis Melancon, Inc. v. City of

New Orleans, 703 F.3d 262, 268 (5th Cir. 2012) (quotation omitted).

III. Analysis

A. Standing

The defendants have challenged the States’ and Associations’ standing.

Dkt. 40 at 26-29. Because the court has determined that the States have

standing, it need not determine whether the Associations do. See Laroe Ests.,

Inc., 581 U.S. at 439.

The defendants first argue that the States lack standing because

“federal regulation of water or land for the purpose of pollution control is not

a cognizable harm to ‘state sovereignty.” Dkt. 40 at 28 (citing Hodel v. Va.

Surface Mining & Reclamation Ass’n, Inc., 452 U.S. 264, 284-93 (1981)).

But Hodel does not support the defendants’ broad contention. The Hodel

Court considered Tenth Amendment limits on congressional power to pre-

empt or displace state regulation of private activities affecting interstate

commerce. Id. at 288-90. Moreover, Hodel is premised on the fact that the

challenged regulation did not regulate “States as States.” Id. at 286-89, 293.

Because the States challenge the Rule as violating their quasi-sovereign

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interests in regulating the land and water within their borders, Hodel is

inapplicable.

The defendants next rely on Crane v. Johnson, 783 F.3d 244 (5th Cir.

2015), to argue that the States’ projected mitigation and implementation

costs are not specific enough to show standing. Dkt. 40 at 28 (citing Crane,

783 F.3d at 252). In Crane, Mississippi sued federal agencies implementing

the Deferred Action for Childhood Arrivals (DACA) program, claiming DACA

injured the state by forcing it “to spend money on providing social services.”

Crane, 783 F.3d at 247. In support, Mississippi offered one piece of evidence:

a decades-old study about the state’s general costs stemming from illegal

immigration. Id. at 252. Mississippi produced no evidence about the costs—

if any—that DACA imposed on it. Id.

Conversely, Texas has submitted detailed declarations outlining

projected mitigation and compliance costs the 2023 Rule will impose. See,

e.g., Dkts. 13-1 ¶ 16 (“[The Texas Department of Transportation] estimates

the amount of mitigation needed will increase by 30%[,] which translates to

an increased cost of approximately $3 million dollars per year.”); 50-2 ¶ 6

(estimating that mitigation costs for an active highway project in Dallas

County will increase from $292,600 to $80,591,000); see also Dkts. 13-2, 13-

3, 13-4. Idaho’s declarations are less detailed. Dkts. 34-1, 34-2, 34-3, 34-4.

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But the Fifth Circuit has—more recently than Crane—accepted “big-picture

evidence” and noted that “large-scale policy” is “amenable to challenge using

large-scale statistics and figures, rather than highly specific individualized

documents.” See Texas v. Biden, 20 F.4th 928, 971 (5th Cir. 2021), rev’d and

remanded on other grounds, 213 L. Ed. 2d 956 (2022).

In sum, the States have constitutional standing.

B. Preliminary Injunction

The defendants assert that the plaintiffs have not carried their burden

of persuasion on each factor necessary for the court to grant preliminary

relief. The court finds that the States have satisfied each factor, but the

Associations have not shown irreparable harm.

Likelihood to Succeed on the Merits

“If the party requesting a preliminary injunction cannot show a

substantial likelihood of success on the merits, the injunction should be

denied . . . .” Big Tyme Invs., L.L.C. v. Edwards, 985 F.3d 456, 464 (5th Cir.

2021) (emphasis omitted) (quotation omitted). But the plaintiff neither has

“to demonstrate that he is certain to win” nor that he “is entitled to a

summary judgment.” Allied Home Mortg. Corp. v. Donovan, 830 F. Supp.

2d 223, 227 (S.D. Tex. 2011) (citing Canal Auth. of State of Fla. v. Callaway,

489 F.2d 567, 595–96 (5th Cir. 1974)); see also 11A Charles Alan Wright &

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Arthur Miller, Federal Practice and Procedure § 2948.3 (3d ed. 2022).

Rather, “[i]t will ordinarily be enough that the plaintiff has raised questions

going to the merits so serious, substantial, difficult[,] and doubtful, as to

make them a fair ground for litigation and thus for more deliberate

investigation.” Donovan, 830 F. Supp. 2d at 227 (quotation omitted). In

evaluating the likely success on the merits, “the court considers the

‘standards provided by the substantive law.’” Id. (quoting Janvey v. Alguire,

647 F.3d 585, 596 (5th Cir. 2011)).

Both sides devote extensive portions of their briefs to this factor. Dkts.

13 at 7–21; 39 at 14–31; 40 at 34–53; see also 20 Dkt. 15 at 18–31. Though

there is much the court could say, two aspects of the 2023 Rule make the

plaintiffs particularly likely to succeed on the merits—first, the Rule’s

significant-nexus test, and second, the Rule’s categorical extension of federal

jurisdiction over all interstate waters, regardless of navigability. Before

reaching those issues, the court pauses to consider the deference owed to the

Agencies in exercising their delegated authority to implement the Act.

Deference Owed

The foundational question undergirding the court’s assessment of the

plaintiffs’ claims is whether the Act authorizes the Agencies to interpret

“waters of the United States” in the manner set forth in the 2023 Rule. City

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of Arlington v. FCC, 569 U.S. 290, 297 (2013) (“No matter how it is framed,

the question a court faces when confronted with an agency’s interpretation

of a statute it administers is always, simply, whether the agency has stayed

within the bounds of its statutory authority.”) (Scalia, J.).

This inquiry usually invokes the familiar two-step framework4

introduced in Chevron, U.S.A., Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837 (1984). At step one, the court determines whether the

statute’s text clearly expresses Congress’s intent as to the statute’s meaning.

Huawei Techs. USA, Inc. v. FCC, 2 F.4th 421, 433 (5th Cir. 2021). If the text

is ambiguous, the court proceeds to step two and asks if the agency’s

interpretation is “a permissible construction of the statute.” Id. (quotation

omitted). “Chevron’s purpose is to recognize the institutional competence of

executive agencies and to defer to their expertise where appropriate.” Cargill

v. Garland, 57 F.4th 447, 466 n.10 (5th Cir. 2023). But Chevron is not

appropriate here for at least two reasons.

4 Admittedly, Chevron has “become something of the-precedent-who-must-

not-be-named—left unmentioned by the Supreme Court in two recent decisions

addressing the reasonableness of agency action.” Mexican Gulf Fishing Co. v. U.S.

Dep’t of Com., 60 F.4th 956, 963 n.3 (5th Cir. 2023) (citing Am. Hosp. Ass’n. v.

Becerra, 142 S. Ct. 1896 (2022), and Becerra v. Empire Health Found., 142 S. Ct.

2354, (2022)). But Chevron remains relevant “until and unless it is overruled by

our highest Court.” Mexican Gulf Fishing, 60 F.4th at 963 n.3.

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First, Chevron does not apply because the Act implicates criminal

penalties. See 33 U.S.C. § 1319(c).5 Recently, the Fifth Circuit—by the vote of

twelve of sixteen judges sitting en banc—reversed an agency’s rule on lenity

grounds, holding that “Chevron does not apply [where] the statutory

language at issue implicates criminal penalties.” Cargill, 57 F.4th at 449,

468. “The rule of lenity is a ‘time-honored interpretive guideline’” that

requires courts to resolve ambiguity in favor of the party that may face

criminal penalties.6 Id. at 471 (quoting Liparota v. United States, 471 U.S.

419, 429 (1985)).

Second, this court must interpret the Act “as written to avoid the

significant constitutional and federalism questions” that the Agencies’

interpretation raises concerning the “outer limits” of Congress’s power.

SWANCC, 531 U.S. at 172–74 (Rehnquist, J.) (rejecting the Corps’ request

for Chevron deference). This interpretive approach is especially important

“where the administrative interpretation alters the federal-state framework

5 Notably, for criminal penalties to apply—including a fine, imprisonment,

or both—a party need only “negligently” violate the Act’s permitting requirements.

33 U.S.C. § 1319(c)(1).

6 “As Chief Justice Marshall explained long ago, the rule ‘is founded on the

tenderness of the law for the rights of individuals . . . . It is the legislature, not the

Court, which is to define a crime, and ordain its punishment.’” Cargill, 57 F.4th at

451 (quoting United States v. Wiltberger, 18 U.S. (5 Wheat.) 76, 95 (1820)).

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by permitting federal encroachment upon a traditional state power.” Id. at

173.

In SWANCC, the Court also considered the meaning of “waters of the

United States” and an agency interpretation that concerned the proper

application of Congress’s Commerce Clause power under the Act. Id. at 166,

172—73. In both SWANCC and in this case, the boundaries—if any—that the

word “navigable” places on “waters of the United States” unavoidably “alters

the federal-state framework,” id. at 173, because the Rule invokes

“categorical protections for interstate waters, regardless of their

navigability,” 88 Fed. Reg. at 3072. The Agencies’ effort to read navigability

out of the statute’s text to permit categorical encroachment on States’ rights

raises constitutional questions this court should—if any other reasonable

interpretation of the Act exists—avoid. See SWANCC, 531 U.S. at 173.

b. The Significant-Nexus Test

The 2023 Rule trades the interstate-commerce test for two new tests,

the significant-nexus and relatively-permanent tests, which the Agencies—

under the Rule—would use to decide whether certain waters fall within the

Act’s jurisdiction. Under the interstate-commerce test, the Agencies must

consider “whether the use, degradation, or destruction of... water could

affect interstate or foreign commerce” before claiming jurisdiction to

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regulate it under the Act. See 88 Fed. Reg. at 3029. The Rule’s significant-

nexus test instead asks whether waters “either alone or in combination with

similarly situated waters in the region, significantly affect the chemical,

physical, or biological integrity of traditional navigable waters, the territorial

seas, or interstate waters.” Id. at 3006. And the Rule’s relatively-permanent

test would empower the Agencies to regulate “relatively permanent, standing

or continuously flowing waters connected to paragraph (a)(1) waters, and

waters with a continuous surface connection to such relatively permanent

waters or to traditional navigable waters, the territorial seas, or interstate

waters.” Id.

The Agencies draw the 2023 Rule’s new tests from Rapanos, but

neither the Rapanos plurality nor its concurrence advocates applying both

tests. Nevertheless, courts applying Rapanos have either determined that

(1) Justice Kennedy’s concurrence is the controlling opinion7 or (2) the

Agencies can use either the plurality or concurrence test to establish their

jurisdiction under the Act.8 Assuming without deciding that either of these

7 Sackett, 8 F.4th at 1089; United States v. Gerke Excavating, Inc., 464 F.3d

723, 724 (7th Cir. 2006); United States v. Robison, 505 F.3d 1208, 1221 (11th Cir.

2007).

8 United States v. Johnson, 467 F.3d 56, 66 (1st Cir. 2006); United States v.

Bailey, 571 F.3d 791, 799 (8th Cir. 2009); United States v. Donovan, 661 F.3d 174,

184 (3d Cir. 2011).

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approaches is correct,9 the Rule is unlikely to withstand judicial review

because its version of the significant-nexus test is materially different from

the standard Justice Kennedy articulated in Rapanos. See 20 Dkt. 12

(arguing that “the Rule expands federal jurisdiction over features that Justice

Kennedy [did not], such as ephemeral drainages, many ditches, and non-

navigable interstate waters”) (citing Rapanos, 547 U.S. at 784 (Kennedy, J.,

concurring)).

The 2023 Rule’s significant-nexus standard identifies “waters that,

either alone or in combination with similarly situated waters in the region,

significantly affect the chemical, physical, or biological integrity of

traditional navigable waters, the territorial seas, or interstate

waters.” 88 Fed. Reg. at 3006 (emphasis added). Justice Kennedy’s test

would not extend federal jurisdiction to nontraditional waters unless the

water “either alone or in combination with similarly situated lands in the

region, significantly affects the chemical, physical, and biological integrity of

9 See M. Reed Hopper, Running Down the Controlling Opinion in Rapanos

v. United States, 21 U. DENV. WATER L. REV. 47 (2017), for a compelling criticism

of these courts’ applications of Marks v. United States, 430 U.S. 188 (1977), to

derive the controlling opinion from the fractured Rapanos decision. When the

Rapanos tests were presented to the Fifth and Sixth Circuits, those courts did not

weigh in on which controlled because the facts before the courts satisfied either

standard. United States v. Cundiff, 555 F.3d 200, 210 (6th Cir. 2009); see United

States v. Lucas, 516 F.3d 316, 327 (5th Cir. 2008).

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other covered waters more readily understood as ‘navigable.’”

Rapanos, 547 U.S. at 780 (Kennedy, J., concurring) (emphasis added).

The Agencies’ construction of the significant-nexus test ebbs beyond

the already uncertain10 boundaries Justice Kennedy established for it.

Specifically, by extending the significant-nexus test to “interstate waters,”

and not just to those “waters . . . understood as ‘navigable,’” the Rule

disregards the Act’s “central requirement”—“the word ‘navigable.’” Id. at

778. As explained more thoroughly below, linking the significant-nexus test

to “interstate waters” greatly expands its breadth beyond what Justice

Kennedy envisioned; the Rule—unlike his suggested test—defines “interstate

waters” as jurisdictional regardless of navigability. 88 Fed. Reg. at 3072.

Even if the court assumes that Justice Kennedy’s significant-nexus test

appropriately measures the Agencies’ jurisdiction under the Act, the Rule

does not accurately reflect his test. Indeed, the Rule’s substantial variance

10 The court has considerable concerns with the significant-nexus test, even

as contrived in Justice Kennedy’s Rapanos concurrence. Justice Scalia’s plurality

highlighted the following problems (among others) with Justice Kennedy’s

significant-nexus test: it misreads and misapplies Supreme Court precedent

interpreting the Act, Rapanos, 547 U.S. at 753–55; it “ignore[es] the text of the

statute,” id. at 755; and it improperly disregards the Act’s policy to preserve the

“primary state responsibility for ordinary land-use decisions,” id. at 755–56 (citing

33 U.S.C. § 1251(b)).

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from Justice Kennedy’s test compels the court to question its legitimacy—

and persuades the court that the plaintiffs will likely succeed on the merits.11

Categorical Extension to All Interstate Waters

Under the 2023 Rule, the Agencies may regulate “interstate waters,

regardless of their navigability.” Id. at 3072. Additionally, because interstate

waters are “paragraph (a)(1) waters,” the Agencies do not have to rely on

either the significant-nexus or relatively-permanent test to apply the Act to

interstate waters—jurisdiction is automatic. Id. at 3066–67 (“If a waterbody

is determined to be a paragraph (a)(1) water, then it is jurisdictional with no

need for further evaluation.”).

The plaintiffs argue that the plain language of the Act simply does not

extend the Agencies’ jurisdiction to (1) non-navigable interstate waters,

(2) impoundments and wetlands with no hydrologic connection to navigable

waters, or (3) isolated ponds and mudflats. Dkt. 59 at 1 (citing Georgia v.

Wheeler, 418 F. Supp. 3d 1336, 1355–60 (S.D. Ga. 2019), Rapanos, 547 U.S.

11 The court is also concerned that the significant-nexus test poses due-

process concerns. Securing a permit under the Act is an expensive and time-

consuming endeavor, Rapanos, 547 U.S. at 721, and failing to secure such a permit

can result in significant fines, id.; 33 U.S.C. § 1319(c)(1). Even determining whether

one needs to pursue a permit has long been a tall order: “[t]he outer limit of the

phrase ‘waters of the United States’ remains fuzzy.” See Gulf Restoration Network,

783 F.3d at 230 n.3. The Rule’s proposed significant-nexus test, with its numerous

factors and malleable application, seems to muddy the water even more.

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at 718, and SWANCC, 531 U.S. at 174). The defendants argue that

categorically extending federal jurisdiction to all interstate waters is

consistent “with the Act’s history, text, and purpose.” Dkt. 40 at 35 (quoting

88 Fed. Reg. at 3072–75).

Specifically, the defendants point out that the Act’s

“predecessors . . . explicitly protected interstate waters independent of their

navigability.” Dkt. 40 at 35 (citing 33 U.S.C. §§ 466a(d)(1) & 466i(e) (1952),

33 U.S.C. § 466g(a) (1964), and 33 U.S.C. §§ 1160(c)(1) & 1173(e) (1970)). But

the Agencies are not exercising jurisdiction under those older statutes; they

derive their authority from the current Act’s plain text—extending

jurisdiction to “navigable waters.” 33 U.S.C. § 1362(7). The court agrees with

the defendants that “the scope of ‘waters of the United States’ extends

beyond traditional navigable waters.” Dkt. 40 at 46. But “navigable” is

unavoidably an “important” limiting principle against “a significant

impingement of the States’ traditional and primary power over land and

water use.” Rapanos, 547 U.S. at 731, 738 (Scalia, J.); see also id. at 778

(Kennedy, J., concurring).

The Agencies’ interpretation of the Act to include all interstate waters

irrespective of any limiting principle raises serious federalism questions;

accordingly, the court will prefer any “otherwise acceptable construction” not

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“plainly contrary” to Congress’s intent. See SWANCC, 531 U.S. at 173

(quotation omitted). Certainly, the court agrees with the defendants that

federally regulating some interstate waters may be necessary to carry out

Congress’s intent to protect the nation’s waters, Dkt. 39 at 27, but the court

is not convinced that the Act’s text supports unrestrained federal jurisdiction

over all interstate waters.

The defendants also argue that Congress’s intent that the Act

categorically include interstate waters is evident in 33 U.S.C. § 1313(a)(1).

Under that provision, “water quality standard[s]” governing “interstate

waters” that pre-dated the Act would “remain in effect unless the

Administrator determined that such [a] standard is not consistent” with the

Act. Id. Contrary to the defendants’ position, however, the plain text of 33

U.S.C. § 1313(a)(1) indicates that Congress anticipated that federal

jurisdiction over at least some interstate waters would not be consistent with

the Act and its “purpose” to preserve the “primary state responsibility for

ordinary land-use decisions.” See Rapanos, 547 U.S. at 755–56 (citing 33

U.S.C. § 1251(b)).

This is not the first time the Agencies have read navigability out of the

Act. Relying on Rapanos, a Georgia district court vacated and set aside the

Agencies’ previous attempt to extend their jurisdiction to “all interstate

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waters . . . regardless of navigability” in a final rule. See Wheeler, 418 F.

Supp. 3d at 1358–60. The Agencies’ most recent attempt to read navigability

out of the Act’s plain text is unlikely to fare better.

* * *

In sum, the Rule’s particular version of Justice Kennedy’s significant-

nexus test and its categorical inclusion of interstate waters are at least two

aspects that are unlikely to withstand judicial review. Thus, the court is

satisfied that the plaintiffs have carried their burden on this factor and weigh

it in their favor.

Irreparable Harm

The plaintiffs raise two types of irreparable harm: (1) intrusion into the

States’ “sovereignty over intrastate land and waters and ([2]) unrecoverable

compliance costs that will unnecessarily burden the plaintiffs despite the

improbability the Rule will survive judicial review.” Dkt. 13 at 21; see also 20

Dkt. 15 at 31–32. The defendants respond that (1) the Rule does not harm the

States’ sovereignty and (2) neither party has submitted declarations that

sufficiently detail immediate irreparable compliance costs. Dkts. 39 at 14–

25; 40 at 29–34.

As to the compliance costs, the court finds that the States—but not the

Associations—have shown that the Rule poses irreparable harm. “Where

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costs are nonrecoverable because the government–defendant enjoys

sovereign immunity from monetary damages, as is the case here, irreparable

harm is generally satisfied.” VanDerStok v. Garland, No. 4:22-CV-00691-O,

2022 WL 4809376, at *3 (N.D. Tex. Oct. 1, 2022) (citing Wages & White Lion

Invs., L.L.C. v. FDA, 16 F.4th 1130, 1142 (5th Cir. 2021)). Moreover,

“complying with a regulation later held invalid almost always produces the

irreparable harm of nonrecoverable compliance costs.” Texas v. EPA, 829

F.3d 405, 433 (5th Cir. 2016) (quoting Thunder Basin Coal Co. v. Reich, 510

U.S. 200, 220–21 (1994) (Scalia, J., concurring in part and in the judgment)).

“Such harm, however, must be more than speculative; there must be

more than an unfounded fear on the part of the applicant.” Louisiana v.

Biden, 55 F.4th 1017, 1034 (5th Cir. 2022) (internal quotations omitted). The

scale of the projected harm must be “more than de minimis,” but “it is not so

much the magnitude but the irreparability that counts.” Id. at 1035

(quotations omitted).

As discussed above, the States have produced numerous declarations

that detail specific anticipated costs—monetary and otherwise—of complying

with the Rule. Dkts. 13-1, 13-2, 13-3, 13-4, 34-1, 34-2, 34-3, 34-4, 50-2.

Specifically, the Texas Department of Transportation anticipates the Rule

imposing millions of dollars in mitigation costs within just the first year.

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Dkts. 13-1 ¶ 16; 50-2 ¶ 6. And Idaho has submitted a declaration predicting

that the Rule would “increase cost in both monetary and labor hours” by

staff. Dkt. 34-3, Terilizzi Decl. ¶ 4. Contrary to what the defendants argue,

the Fifth Circuit regularly accepts such costs—even projected and

nonmonetary costs—as posing irreparable harm. See, e.g., Louisiana, 55

F.4th at 1034 (“The loss of an employee and the associated costs—monetary

and otherwise—are nonrecoverable costs.”).

The Fifth Circuit has been less generous with private-sector plaintiffs’

efforts to show irreparable harm. In upholding the district court’s

irreparable-harm finding in Texas v. EPA, the Fifth Circuit noted both the

significant financial costs the Clean Air Act would impose on the business

community and the likelihood of plant closures. 829 F.3d at 433 (noting that

“compliance with the Final Rule would impose $2 billion in costs on power

companies, businesses, and consumers”). In addition to requiring more

specificity, the law generally compels industry plaintiffs to ascribe more

urgency to the consequences of a challenged action. E.g., Div. 80, LLC v.

Garland, No. 3:22-CV-148, 2022 WL 3648454, at *4 (S.D. Tex. Aug. 23,

2022) (“[A] preliminary injunction is not appropriate where the potential

harm to the movant is strictly financial, unless the potential economic loss is

so great as to threaten the existence of the movant’s business.”) (quotation

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omitted); see also EPA, 829 F.3d at 434 (holding that financial losses posed

irreparable injury where “plant closures” would “threaten the very existence

of” the plaintiffs’ businesses). Finally, self-inflicted harm is not irreparable.

Texas v. Biden, 10 F.4th 538, 558 (5th Cir. 2021).

The conclusory and speculative allegations in the Associations’

declarations simply do not show that they or their members face irreparable

harm. E.g., 20 Dkt. 15-1, Chetti Declaration ¶ 14 (generally noting that the

Rule will “likely cause permitting delays, add development costs[,] and

create additional legal risks”). Additionally, the Associations’ claim that the

Rule imposes a “chilling” effect on business decisions, 20 Dkt. 15 at 11 (citing

Pilconis Decl. ¶ 20), falls within the realm of self-inflicted harm, making it

irreparable.

As to the injury to the States’ sovereignty, the Fifth Circuit has held that

the “institutional injury” to a state “from the inversion of the federalism

principles enshrined in” legislation “may constitute irreparable injury.” EPA,

829 F.3d at 434. The States persuasively argue that the Rule’s threat to their

sovereign rights may amount to irreparable harm, Dkt. 13 at 21–22

(collecting cases), but the court need not reach that issue. The States have

already shown irreparable harm because they will expend unrecoverable

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resources—monetary and otherwise—complying with a rule unlikely to

withstand judicial scrutiny.12

In sum, the court finds that the States, but not the Associations, have

shown irreparable harm.

3. Equities and Public Interest

“Once an applicant satisfies the first two factors,” the equities and

public-interest factors “merge when the Government is the opposing party.”

Nken v. Holder, 556 U.S. 418, 435 (2009). The equities favor an injunction

if the benefits to the movants outweigh the harm to the nonmovants. See

Robinson v. Ardoin, 37 F.4th 208, 228 (5th Cir. 2022). “[P]reserving the

status quo ‘is an important’ equitable consideration in the stay decision.”

Louisiana v. Becerra, 20 F.4th 260, 263 (5th Cir. 2021) (citing Dayton Bd.

of Educ. v. Brinkman, 439 U.S. 1358, 1359 (1978)). And there is public

interest “in having governmental agencies abide by the federal laws that

12 The concern over the States’ sunk compliance costs is particularly strong

in this case because the Supreme Court is anticipated to release an opinion later

this term clarifying whether the significant-nexus test is a proper tool to measure

the EPA’s jurisdiction to regulate under the Act. Sackett, 142 S. Ct. 896 (No. 21-

454). Indeed, the Agencies represented during an exchange with Justice Barrett at

oral argument that for them “to win, [the Court] ha[s] to find that [the Agencies

are] right about significant nexus.” Transcript of Oral Argument at 115, id. (No. 21-

454).

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govern their existence and operations.” Wages & White Lion, 16 F.4th at 1143

(quotation omitted).

The defendants take starkly different positions with respect to the

competing equities and public interests. The intervenor–defendant says

there are intrastate waters in Texas and Idaho that the States are not

adequately regulating that will fall under the 2023 Rule’s jurisdiction. See

Dkt. 39 at 42. On the other hand, the federal defendants repeatedly

emphasize in their response that the 2023 Rule essentially codifies the

regulatory “status quo.” Dkt. 40 at 29, 32, 34, 37–38, 51. Taking as genuine

the federal defendants’ convictions that the Rule’s differences from the status

quo are “slight,” id. at 17, it is difficult to see how an injunction will harm the

Agencies as this court considers the merits. And if the intervenor–defendant

is correct that the Rule will expand the waters that come under the Agencies’

jurisdiction, then the equities would favor granting an injunction—rather

than denying one—to preserve the status quo.

The court is sympathetic to the intervenor–defendant’s interest in and

devotion to protecting Texas’s wetlands, but even the most admirable

aspirations “do[] not permit agencies to act unlawfully.” Ala. Ass’n of

Realtors v. Dep’t of Health & Hum. Servs., 141 S. Ct. 2485, 2490 (2021)

(citing Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 582, 585–86

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(1952), for the proposition “that even the Government’s belief that its action

‘was necessary to avert a national catastrophe’ could not overcome a lack of

congressional authorization”). As explained above, the court finds a

substantial likelihood that the 2023 Rule exceeds the Agencies’ statutory

authority under the Act.

On the other hand, granting the injunction eliminates the risk of

enforceable penalties that set the Rule apart from the status quo. And there

is little public interest or efficiency gained with implementing a rule

codifying the significant-nexus test mere months before the Supreme Court

decides whether the Rapanos version of that test is an appropriate exercise

of the Agencies’ jurisdiction under the Act.

When a similar rule came before this court, Judge George C. Hanks

found an “overwhelming” public interest in favor of granting a preliminary

injunction that would prevent Texas and its citizens from “expend[ing]

valuable resources and time operationalizing a rule that may not survive

judicial review.” EPA, 2018 WL 4518230, at *1. This concern persists. The

court weighs this factor in the States’ favor.

C. The Injunction’s Scope

“Principles of judicial restraint control” when deciding a motion for

preliminary injunction. Becerra, 20 F.4th at 263. In Becerra, the Fifth

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Circuit narrowed a nationwide injunction to apply to just the states

appearing as plaintiffs, reiterating that the circumstances must justify an

injunction’s scope. Id. at 263–64. Though the “constitutional command” for

consistency in immigration laws may warrant such extreme relief, id. at 263,

there was no similarly compelling need for uniform relief there; nor is there

such a need here.

At least twenty-five other states have filed complaints and motions for

preliminary injunctions against the Rule. See West Virginia v. EPA, No.

3:23-cv-32 (D.N.D.), Dkt. 44; Kentucky v. EPA, No. 3:23-cv-7 (E.D. Ky.),

Dkt. 10. The judicial process will benefit from the reasoning and conclusions

of other courts weighing in:

The traditional system of lower courts issuing interlocutory relief

limited to the parties at hand may require litigants and courts to

tolerate interim uncertainty about a rule’s final fate and proceed

more slowly until this Court speaks in a case of its own. But that

system encourages multiple judges and multiple circuits to weigh

in only after careful deliberation, a process that permits the

airing of competing views that aids this Court’s own

decisionmaking process.

Becerra, 20 F.4th at 264 (quoting DHS v. New York, 140 S. Ct. 599, 600

(2020) (Gorsuch, J., concurring in the grant of a stay)).

Moreover, the states that have not challenged the Rule may actually

welcome it. The court is reluctant to deprive states that embrace the Rule

from exercising their sovereign rights to conform their conduct accordingly—

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at least until the Rule’s statutory and constitutional validity has been

determined.

Finally, only the Associations offered any argument in favor of

nationwide relief. And the court has determined that they are not entitled to

any injunctive relief apart from that granted the States. Accordingly, the

court limits its injunction to the states of Texas and Idaho.

* * *

In sum, the court grants the States’ motion for injunctive relief within

their sovereign borders, Dkt. 13, and denies the Associations’ request for a

nationwide injunction, 20 Dkt. 15. Therefore, within the states of Texas and

Idaho, the court enjoins the defendants from implementing or enforcing the

final rule entitled “Revised Definition of ‘Waters of the United States,’” 88

Fed. Reg. 3004 (Jan. 18, 2023), pending further order of this court.

Signed on Galveston Island this 19th day of March, 2023.

___________________________

JEFFREY VINCENT BROWN

UNITED STATES DISTRICT JUDGE

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