As the U.S. Environmental Protection Agency (EPA) prepares its Clean Water Act (CWA) Section 401 rule proposal, litigation regarding the 2020 Trump-era rule (Certification Rule) continues. Currently, the issue of whether to re-instate the Certification Rule is proceeding before U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit). The U.S. District Court for the Northern District of California had vacated and remanded the Certification Rule, and intervenors and several states appealed the vacatur. Appellants, including several industry groups, have filed motions to stay the District Court’s vacatur pending the outcome of the appeal and are now awaiting the Ninth Circuit’s ruling that could, at least temporarily, re-instate the Certification Rule.

The EPA and several Tribes, states, and environmental groups joined the case and have sought to dismiss the appeal. Among the key subjects likely to be addressed during the proceeding is whether appellants can challenge the District Court’s order. The Ninth Circuit has a procedural rule that provides that a remand back to an agency is not a final order capable of appeal by any party other than the promulgating agency. Citing the procedural rule, EPA has sought to dismiss the case, arguing that appellants lack jurisdiction to challenge the District Court’s remand and vacatur. If the Ninth Circuit agrees with EPA, there is the potential that its district courts could bar any appeal of a vacated rule by aggrieved parties (other than the agency itself) by simply including an order to remand the rule back to the agency.

If the case is allowed to proceed, the Ninth Circuit may address the merits question of whether a court can vacate a fully promulgated rule without reviewing the record. Courts have consistently not rejected agency rules without first reviewing the merits of whether the rule is defective, which involves a review of the underlying record.

Although the Biden administration’s EPA had already announced its intention to revisit the Trump-era 2020 Certification Rule, the District Court’s vacatur created significant uncertainty and prompted the EPA to issue a Frequently Asked Questions (FAQ) document to alleviate some confusion. With the FAQ, EPA announced that it would return to the 1971 Clean Water Act (CWA) 401 certification regulations until it promulgates a new 401 rule.

EPA expects to propose a new CWA Section 401 rule in spring 2022. Whether the vacatur of the Certification Rule is allowed to stand will likely affect how EPA approaches the rule proposal. If the Certification Rule is re-instated, EPA would have to propose to rescind or modify the Certification Rule and pursue notice and comment on the withdrawal, as well as the proposal.