Environmental YIR: 2024 Regulatory Legacies and Impacts
This report provides an overview of major federal environmental regulations and court decisions of 2024. Landmark U.S. Supreme Court decisions with lasting consequences for environmental policy include Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024),1 which ended judicial deference to administrative agencies, and Corner Post v. Federal Reserve, 603 U.S. 799 (2024), which opened the doors of federal courts to many more plaintiffs challenging regulations. These decisions have subsequently bolstered efforts to limit or rollback regulatory actions, both by industry and by members of the Trump administration. The Congressional Review Act (CRA), which allows Congress to rescind or invalidate new regulations, has also been used as the basis for invalidating many of the environmental regulations adopted since August 2024.
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United States: House Committee on Financial Services Urges the SEC to Withdraw Final and Proposed Rules
On 31 March 2025, the House Committee on Financial Services (Committee), in a letter to Acting Chairman of the US Securities and Exchange Commission (SEC), Mark Uyeda, identified a series of proposed and adopted rules that the SEC should withdraw or rescind. The letter notes the Committee’s view that the SEC, under the prior Chair, had lost sight of its mission. The identified proposals and rules represent significant rulemaking efforts on the part of the SEC, many of which were controversial and subject to significant industry opposition. The specific proposals identified are the following:
Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure;
Short Position and Short Activity Reporting by Institutional Investment Managers;
Reporting of Securities Loans;
Pay Versus Performance;
Investment Company Names;
Form N-PORT and Form N-CEN Reporting; Guidance on Open-End Fund Liquidity Risk Management Programs;
Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker Dealers and Investment Advisers;
Open-End Fund Liquidity Risk Management Programs and Swing Pricing;
Regulation Best Execution;
Order Competition;
Position Reporting of Large Security-Based Swap Positions;
Regulation Systems Compliance and Integrity;
Outsourcing by Investment Advisers; and
Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices.
While the Committee does not have the authority to compel the SEC to take action on any if these final or proposed rules, the letter is a strong indication of support for an overall deregulatory environment and could provide a blueprint for SEC regulatory policy once Paul Atkins is confirmed.
EC Begins Public Consultation on Upcoming EU Bioeconomy Strategy
The European Commission (EC) began a public consultation on March 31, 2025, on the upcoming European Union (EU) Bioeconomy Strategy. The EC states in its March 31, 2025, press release that the Strategy “marks a significant step forward in harnessing the opportunities of the bioeconomy to support European businesses and drive progress towards the EU’s environmental, climate and competitiveness objectives.” According to the call for evidence, the Strategy’s main aims include:
Ensuring the long-term competitiveness of the EU bioeconomy and investment security. The Strategy will identify measures to scale up and commercialize existing and emerging biotechnology solutions and biobased products, in particular by tapping into the significant growth potential of biobased materials substituting fossil-based ones (e.g., sources of alternative proteins, biobased materials, or biochemicals). It will entail looking at practical measures to remove unnecessary barriers to biobased manufacturing and bio-innovation and unleash the full opportunities of primary biobased production;
Increasing resource-efficient and circular use of biological resources, by creating an efficient demand. This means transforming how the EU values and uses biomass resources, prioritizing extended high-value applications while encouraging industries and consumers to embrace circular practices that maximize economic returns from each unit of biomass. It might also entail providing targeted support and incentives for higher value added uses of biomass feedstock and by-products in line with the cascading principle;
Securing the competitive and sustainable supply of biomass, both domestically and from outside the EU. The Strategy will strengthen the role of primary producers, generating wealth in rural areas by creating jobs and diversifying incomes for foresters and farmers and rewarding them for the preservation of ecosystems; and
Positioning the EU in the rapidly expanding international market for biobased materials, biomanufacturing, biochemicals, and agri-food and biotechnology sectors. This will be done by steering existing foreign policy mechanisms in the area of the bioeconomy in the context of the EU’s Global Gateways initiative, exploring the need and appropriateness of bringing bioeconomy under international multilateral fora, and promoting green diplomacy on bioeconomy.
The EC encourages all stakeholders to participate in the online consultation. Comments are due June 23, 2025. Stakeholders can also contribute by participating in targeted sessions on the bioeconomy in upcoming events such as the European Circular Economy Stakeholder Platform (ECESP) Circular Economy Stakeholder Dialogue, taking place on April 10, 2025, and EU Green Week, taking place from June 3 to 5, 2025.
UK Grid Connection Reforms: Breaking the Bottleneck
Go-To Guide:
The UK is transforming its grid connection system to address a backlog of over 739 GW of projects, aiming to streamline access and reduce delays.
New reforms focus on prioritizing projects that are ready for development and essential for grid stability, eliminating the speculative applications.
A structured gate-based queue process would be implemented, requiring projects to meet specific criteria to secure grid connection.
NESO has temporarily paused new grid connection applications pending reform implementation, with certain exceptions.
Investors and lenders may prioritize projects with secured grid access, potentially impacting valuations and project economics.
The UK’s grid connection system is undergoing its most significant transformation in decades. With 739 GW of projects stuck in the queue and over 1,700 new applications in 2023 and 2024 alone, the system has hit a breaking point, clogging the project pipeline and causing years-long delays.
Recognizing the urgency, the National Energy System Operator (NESO) introduced reforms to cut through the backlog and bring order to the chaos. These changes, now under review by the Office of Gas and Electricity Markets (Ofgem), are designed to prioritise viable projects, eliminate speculative applications, and fast-track grid access.
In February 2025, Ofgem gave in-principle approval to the reforms, launching a consultation that closed on 14 March 2025. A final decision is expected by the end of Q1 2025. These reforms would reshape the UK’s energy landscape if implemented, aligning with the government’s Clean Power 2030 Action Plan (CP30 Plan).
What might this mean for businesses? Let’s break it down.
Continue reading the full GT Alert.
Updates on SB 54: CalRecycle to Take a Second Stab at Implementing Regulations
On 7 March 2025, Gov. Gavin Newsom sent the Department of Resources Recycling and Recovery (CalRecycle) back to the drawing board on proposed regulations to implement the state’s Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54). Senate Bill (“SB”) 54 is one of many state extended producer responsibility laws that seek to make product manufacturers responsible for the environmental burden associated with single-use packaging and similar materials. Newsom signed SB 54 into law in 2022, and CalRecycle has been working to implement the law since 2023.
SB 54 targets single-use plastic packaging and food service ware (Covered Materials) and has the lofty goals of achieving by 2032 making 100% of Covered Materials recyclable or compostable, reducing the use of Covered Materials by 25%, and actually recycling Covered Materials at a minimum of 65%.
SB 54 mandated CalRecycle to propose permanent regulations for SB 54 by 8 March 2025. The recently rejected proposed regulations were originally released for public comment in February 2024 and underwent two rounds of public comment. After two public comment periods, CalRecycle arrived at the proposed permanent regulations that Newsom declined to accept. Newsom declined to adopt CalRecycle’s proposed regulations due to the unacceptable burdens and costs the proposed regulations would have imposed on businesses. CalRecycle will have to convene another series of stakeholder meetings and develop new regulations, but CalRecycle’s timeline for proposing these new regulations is not yet clear.
In addition to monitoring the updated rulemaking process for California’s SB 54, our firm is keeping up with several other proposed and enacted state regulations impacting food packaging and food-contact material producers, including the following:
Expected release of CalRecycle’s final “material characterization study” required under SB 343 by 4 April 2025; the report will determine what materials are considered “recyclable” for purposes of “chasing arrows” symbols and SB 54.
Introduced 16 January 2025, Minnesota’s Senate File 188/House File 44 would require food-packaging manufacturers and brand owners to test for and report ortho-phthalates. If enacted, the law would take effect 1 July 2026.
On 20 February 2025, California introduced the Safer Food Packing Act of 2025 to regulate antimony trioxide, bisphenols, and ortho-phthalates in food packaging.
Introduced 3 February 2025, Illinois House Bill 2516 will prohibit the sale or distribution of any cookware and food packaging that contains potentially added per- and polyfluoroalkyl substances (PFAS). If passed, this regulation will take effect 1 January 2026.
Introduced 13 February 2025, Hawaii SB 683 will prohibit the sale or distribution of any cookware and food packaging that contains potentially added PFAS. If passed, this regulation will take effect 1 January 2028.
Breaking News: SEC Withdraws Its Defense of Climate Disclosure Regulations
On March 27, the US Securities and Exchange Commission (SEC) announced that it will no longer defend Biden-era regulations requiring large corporations to disclose the impacts of climate change on their businesses. This announcement follows a vote by the SEC’s three-member governing body to end its defense of the rule and comes amid industry complaints that the rule was an overstep of the SEC’s authority.
Read the press release here.
This news follows significant shifts in the United States’ approach to climate change under the Trump Administration, including the deregulation of the US Environmental Protection Agency as discussed in our prior alert. The SEC’s acting chair described the climate disclosure mandates as “costly” and “unnecessarily intrusive.”
The Enhancement and Standardization of Climate-Related Disclosures for Investors (the Rule) was the first federal sustainability disclosure requirement in the United States and sought to inform investors by requiring registrants to provide information on greenhouse gas emissions, severe weather-related financial statement disclosures, and climate-related governance, targets, and risks disclosures. Among other mandates, the Rule required publicly traded companies to discuss climate-related risks that materially impacted, or were reasonably likely to materially impact, their companies when filing registration statements and annual reports.
However, the Rule never saw the light of day as it was quickly challenged and stayed following its adoption in March 2024, and has since been the subject of ongoing litigation consolidated in the Eighth Circuit.[1] In February, the SEC indicated its reluctance to defend the Rule before the Eighth Circuit, with the acting chairman calling it “deeply flawed.”
Though publicly traded companies will have less compliance burdens related to climate change as a result of the SEC’s decision, companies and investors alike should bear in mind the growing awareness of how climate impacts investment performance on a global level. In addition, the California climate disclosure laws (discussed here) and the European Union’s Corporate Sustainability Reporting Directive (though proposed to be pared back) will continue to drive disclosure of climate-related information for the time being.
Our team will continue to monitor developments and provide updates as they become available.
[1] Iowa v. Securities Exchange Commission, No. 24-1522 (8th Cir.)
Additional Authors: Jeffrey J. Kennedy and Maria Ortega Castro
ESG Update: Corporate Directors May Be Obligated to Assess Political Risk
Right now, much about the world is uncertain. Risks posed by political changes dominate the headlines and also weigh heavily on many decisions made by corporations, their advisors, and their stakeholders.
Businesses, of course, want to succeed even in chaotic environments. Success requires appropriate planning, and planning can help lead to predictability. Good corporate governance — making sure directors have appropriate information to timely assess compliance with legal obligations and fulfill duties they owe to the business, its employees, and stakeholders — can help mitigate downside impacts to businesses.
Delaware law obligates corporate directors to, among other things, take steps sufficient to assess corporate legal compliance. What has come to be known as “Caremark liability” attaches when directors fail to adequately oversee the company’s operations and compliance with the law. Below we frame out what Caremark liability is, how it applies to evaluating a politically uncertain environment, and outline six steps companies can take to appropriately manage risk.
Caremark Liability Defined
Caremark liability takes its name from the 1996 decision In re Caremark International Inc. Derivative Litigation, which established that directors of a Delaware corporation have a duty to ensure that appropriate information and reporting systems are in place within the corporation.
Caremark stems from an action where shareholders of Caremark International alleged that they were injured when Caremark employees violated various federal and state laws applicable to health care providers, resulting in a federal mail fraud charge against the company. In a subsequent plea agreement, Caremark agreed to reimburse various parties approximately $250 million. Caremark shareholders filed a derivative action against the company’s directors alleging that the directors breached their duty of care to shareholders by failing to actively monitor corporate performance.
Key points of Caremark liability under Delaware law include:
Duty of Oversight: Directors must make a good faith effort to oversee the company’s operations and ensure compliance with applicable laws and regulations.
Establishing Systems: Directors are expected to implement and monitor systems that provide timely and accurate information about the corporation’s compliance with legal obligations.
Breach of Duty: To establish a breach of Caremark duties, plaintiffs must show that directors either utterly failed to implement any reporting or information system or controls, or, having implemented such a system, consciously failed to monitor or oversee its operations.
High Threshold for Liability: Proving a breach of Caremark duties requires evidence of bad faith or a conscious disregard by directors of their duties.
Good Faith Effort: Directors are generally protected if they can demonstrate that they made a good faith effort to fulfill their oversight responsibilities, even if the systems in place were not perfect.
Caremark liability emphasizes the importance of proactive and diligent oversight by directors to prevent corporate misconduct and to demonstrate that directors are acting in good faith. Cases following Caremark emphasize that liability only attaches when directors disregard their obligations to companies, not when their business decisions result in “unexceptional financial struggles.”
Caremark claims remain difficult to plead but remain viable and, therefore, may lead to significant defense costs.
Is Caremark “ESG litigation”?
Yes. Since the November 2024 election, discussions of environmental, social, and governance (ESG) activities have been commonplace, with discussions of whether corporations should walk back prior commitments dominating the headlines. Caremark claims are distinct from claims frequently lumped together as “ESG litigation.” These “ESG litigation” claims typically involve either “greenwashing”-style product marketing claims (for examples, see here and here) or claims that investment managers, by factoring in ESG investment criteria, deprived investors of appropriate returns (two recent decisions are here and here). Caremark focuses on the “G” in ESG; it speaks directly to corporate governance and directors’ duties to monitor and oversee in good faith a corporation’s compliance with laws.
While the nomenclature of corporate governance may be shifting away from “ESG,” corporate officers remain obligated to oversee corporate operations and ensure compliance with the law. Caremark claims can be used to assess their efforts.
Corporate Governance and Political Risk
Political uncertainty in the United States is affecting regulated entities ranging from Fortune 100 corporations to law firms and from mom-and-pop importers to universities. Recent US Supreme Court decisions including Trump v. United States and Loper Bright v. Raimondo have fundamentally reshaped relations both between the branches of government and between the government and the regulated community.
Over time, members of the regulated community have increasingly faced pressure not just to comply with the law but also to take positions on political issues outside their immediate economic environment. While corporations may have systems in place to monitor risk incident to product liability or supply chain issues, they may not be monitoring risks related to the whipsawing of political positions on issues such as diversity, equity, and inclusion (DEI), the challenges posed by a dramatically slimmed (and thus less responsive) bureaucracy, or recissions of expected government funding.
These political issues can generate corporate risk. Good corporate governance practices can help cabin new corporate risks, thereby minimizing the potential for financial impacts on the corporation. Practices which could be evaluated include:
Ensure appropriate data-gathering and compilation. Political policies do not arise in a vacuum. Internal and external policy advisors, trade associations, and business contacts can help track potential political risks.
Review and assess policy positions and evaluate whether they continue to be appropriate on a regular basis. At the federal level, we have seen DEI-related activities move from being universally lauded to potential reasons for imposition of federal civil or criminal liability. Executive Order 14173, issued on January 21, directed the US Attorney General to develop an enforcement plan to target private sector DEI programs believed to be unlawful. Actions like designating corporate personnel tasked with understanding points of emphasis in government enforcement and mapping them across a corporate footprint may be appropriate.
Evaluate what corporate efforts are appropriate to use in marketing efforts in the current political environment. Recent years have seen sustainability reports become key tools to influence stakeholders ranging from consumers to employees. Businesses which previously leaned into social issues or community involvement in the ESG-era may want to deemphasize aspirational goals and/or provide additional data on their factual conclusions, practices, and achievements.
Review and assess places where rollbacks in federal, state, or local government spending could impact the viability of business operations. Investments reliant on federal grants or subsidies need to be reviewed.
Review corporate compliance programs in light of federal priorities. The US Department of Justice has listed initial federal compliance priorities including terrorism financing, money laundering, and international restraints on trade. As above, taking a systematic approach to understanding and evaluating points where corporate activities could be impacted by enforcement priorities may be appropriate.
Finally, the regulated community should conduct a thorough census of regulations or statutory laws that have the potential to negatively impact corporate operations. They should assess whether any impediments can be addressed through a forward-looking government relations strategy, especially given current efforts to streamline regulations and government operations, particularly related to environmental and energy issues. (For more, see here and here.)
When directors fail to consider and weigh political factors and shifts in governmental initiatives and program enforcement such as those listed above, stakeholders may ask why the board made no effort to make sure it was informed about an issue so intrinsically critical to the company’s business operation.
Maine Board of Environmental Protection Will Consider Proposed PFAS Rule at Its April 7, 2025, Meeting
The Maine Board of Environmental Protection (MBEP) will consider the Maine Department of Environmental Protection’s (MDEP) December 2024 proposed rule regarding products containing per- and polyfluoroalkyl substances (PFAS) during its April 7, 2025, meeting. As reported in our December 31, 2024, memorandum, on December 20, 2024, MDEP published a proposed rule that would establish criteria for currently unavoidable uses (CUU) of intentionally added PFAS in products and implement sales prohibitions and notification requirements for products containing intentionally added PFAS but determined to be a CUU. MBEP’s meeting agenda includes links to the following new documents:
Staff memo: According to the staff memo, MDEP received and reviewed 57 comments on its December 2024 proposed rule, totaling 419 pages. Based on comments received, MDEP amended the draft rule to correct typos, eliminate superfluous language, and add clarifying language. MDEP notes that “[n]one of these changes are significant”;
Chapter 90 proposed rule mark-up;
Chapter 90 proposed rule clean;
Chapter 90 written comments received; and
Chapter 90 draft basis statement and response to comments.
According to the meeting agenda, MBEP will accept and consider additional oral public comment on the proposed rule at its April 7, 2025, meeting, “only if the additional public comment is directly related to comments received during the formal rulemaking comment period or is in response to changes to the proposed rule.”
SEC Ends Defense of Climate Disclosure Rules
In March of 2024, we reported on the US Securities and Exchange Commission’s adoption of a comprehensive set of rules governing climate-related disclosures. The rules would require public companies to disclose climate-related risks, including their impact on financial performance, operations, and strategies, along with greenhouse gas emissions data, governance structures and efforts to mitigate climate impacts. To no one’s surprise, the adopted rules were met with a flurry of court challenges from states and private parties, which led the SEC to issue a stay of the rules pending resolution of the litigation.
Also unsurprisingly, on March 27, 2025, the SEC, under the new administration, voted to end its defense of the climate-related disclosure rules in court. SEC Acting Chairman Mark T. Uyeda stated, “The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules.”
The SEC’s decision to end its defense of the rules very likely means that companies will never be required to comply with the rules. Despite this decision, however, the rules will remain in effect until a court rules them invalid or the SEC rescinds them through the rulemaking process (although the stay remains in effect for now). For that reason, there is currently some uncertainty regarding the rules’ future, and we will continue to follow developments. But, in any case, given the SEC’s recent statements, it seems unlikely that the SEC and its staff would seek to enforce compliance with the rules while they remain in effect.
Although it probably is safe for public companies to assume that they do not need to continue planning for compliance with the climate-related disclosure rules adopted in 2024, companies should remember that climate-related disclosures may be required under other SEC rules and guidance and, in certain cases, climate disclosure requirements of states or non-US jurisdictions. In particular, the SEC’s 2010 guidance on climate-related disclosures remains in effect, requiring public companies to report the impact of climate change on their financial performance, operations, and risks, particularly when such factors are material. While it remains unclear to what extent the SEC under the current administration will enforce, or perhaps even revise, this guidance, companies would be well-advised to be consistent with their climate-related disclosures from period to period.
Additionally, companies may still be required to disclose climate-related risks and greenhouse gas emissions in other jurisdictions, such as California or the European Union, where climate-related disclosure rules are already in place. Other states are also considering similar regulations, potentially expanding the scope of companies subject to such disclosure requirements. Notwithstanding the SEC’s recent action, climate-related disclosures appear to be here to stay.
The SEC Effectively Ends Climate Disclosure Requirements Under Trump Administration
On Thursday, March 27, 2025, the U.S. Securities and Exchange Commission announced via letter to the U.S. Court of Appeals for the Eighth Circuit that SEC attorneys would no longer defend its climate change disclosure rules. These disclosure obligations were established by the SEC’s “Enhancement and Standardization of Climate-Related Disclosures for Investors” Rule, adopted by the Commission on March 6, 2024.
According to the SEC’s current acting chair, Mark Uyeda, the disclosure requirements are “costly and unnecessarily intrusive.”
Disclosure Rule Background
The Disclosure Rule targeted material risks that companies face related to climate change and how those companies are managing that risk. The Disclosure Rule required companies to disclose certain climate-related information in their registration statements and annual reports including:
Climate-related risks that have or may impact business strategy, results of operation, or financial condition;
Actions to mitigate or adapt to material climate-related risks;
Management’s role in assessing and managing material climate-related risks;
Processes used by the company to assess or manage these risks;
Any targets or goals that have materially affected or are likely to affect the company’s business; and
Financial statement effects of severe weather events and other natural conditions, including costs and losses.
Following multiple petitions seeking review of the final Rule, the SEC stayed the Disclosure Rule pending judicial review before the Eight Circuit. In February, Uyeda provided some indication that its position was changing when he directed staff to notify the court not to schedule the case for argument to provide the Commission time to deliberate and determine appropriate next steps. The reason cited for the notice was “changed circumstances.” As such, the March 27 announcement is not all that surprising.
Impact of SEC Announcement
While the SEC has not officially repealed the Disclosure Rule, by no longer defending the Rule, the SEC will allow the stay to continue indefinitely and/or allow the Eighth Circuit to remand the rule to the SEC. This sequence of events indeed creates “changed circumstances,” as it means the SEC will likely take no further action to effectuate a new Rule. As a result, the March 27, 2025, announcement by the SEC effectively terminates the Disclosure Rule.
What Does this Development Mean for You?
While the SEC’s announcement means that public companies operating in the United States are not required to make publicly available disclosures concerning greenhouse gas emissions and climate-change risks and impacts, the impact of this action may be quite limited in reality. Many U.S. companies already report climate-related risks voluntarily in response to investor demand and this action has done nothing to change the requirements imposed by individual states like California or elsewhere around the globe. And, despite this limited reprieve, companies should consider potential changes to SEC rules under future administrations. While the “pendulum” of regulatory focus has swung wide under the Trump administration, there is a strong possibility that there will be a reciprocal swing in the future. As a result, companies should consider maintaining documentation of climate-related risks and management strategies should a similar rule be promulgated.
These events are developing rapidly and will continue to move at a fast pace.
APHIS Evaluates Petitions Reviewed under 2012 Process, Will Use Process Consistent with USDA Biotechnology Regulations Going Forward
The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) announced on March 27, 2025, that it will no longer use the process it outlined in 2012 for reviewing petitions seeking a determination that a modified plant should not be subject to the regulations for the introduction of organisms altered or produced through genetic engineering (modified organisms) that are plant pests or that there is reason to believe are plant pests. On March 6, 2012, APHIS announced that it would publish two separate Federal Register notices for petitions for which it prepares an environmental assessment. 77 Fed. Reg. 13258. The first notice would announce the availability of the petition, and the second notice would announce the availability of APHIS’ decision-making documents, providing two opportunities for public comment. According to APHIS’ March 2025 announcement, at the time, APHIS anticipated that enabling earlier public engagement on the petition would help scope the subsequent analyses, including whether the petition raised substantive new issues. After evaluating the 34 petitions reviewed under the 2012 process, APHIS states that it “found that the first comment period has not yielded comments that significantly impacted the scoping for APHIS’ evaluation.” Given this experience, APHIS will institute the following process consistent with USDA’s biotechnology regulations:
Once APHIS deems a petition to be complete, it will publish a Federal Register notice that will begin a 60-day comment period on the petition and APHIS’ draft evaluation documents; and
After the comment period closes, APHIS will review the comments and any other relevant information it receives during the comment period, complete its evaluation documents, and make a final determination. APHIS will either approve or deny the petition and publish a Federal Register notice announcing the regulatory status of the modified plant and the availability of the regulatory determination and final supporting documents.
Trump Administration Launches Comprehensive Review of Clean Water Act Definition for “Waters of the United States” (WOTUS)
On March 24, 2025, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the “Army Corps”) (collectively the “Agencies”) announced a comprehensive stakeholder engagement process to revise the definition of “waters of the United States” (WOTUS), a phrase that defines the geographic scope of regulatory jurisdiction under the Clean Water Act (CWA). In a formal notice published in the Federal Register, the Agencies stated that they intend to use stakeholder feedback from this process to “inform future administrative actions” on the WOTUS definition, including rulemaking.
This initiative follows decades of WOTUS litigation and shifting WOTUS rules promulgated by the Agencies during the Obama, Biden, and Trump administrations, and it responds to ongoing challenges in implementing the Supreme Court’s landmark decision in Sackett v. EPA, issued in 2023, which significantly narrowed federal jurisdiction over wetlands.
The Sackett Decision and Ongoing Regulatory Challenges
The Sackett case was a dispute over wetlands, but the Supreme Court’s holding is also relevant to other water bodies:
As to wetlands, Sackett held that CWA jurisdiction covers “only those wetlands with a continuous surface connection to bodies that are [WOTUS] in their own right, so that they are indistinguishable from those waters.” The Court rejected EPA’s position that jurisdiction extended to wetlands that are “separated from [WOTUS] by dry lands.”
As to streams, lakes, and other water bodies, Sackett held that CWA jurisdiction covers only those waters that are “relatively permanent, standing or continuously flowing.”
Scope of “Relatively Permanent” Waters: To date, the Supreme Court has not clearly defined “relatively permanent” waters. This category includes certain streams and other water conveyances. In Sackett, the Court held that jurisdiction is not cut off by “temporary interruptions in surface connection” that “may sometimes occur because of phenomena like low tides or dry spells.” Sackett also adopted Justice Scalia’s plurality opinion from Rapanos v. United States, issued in 2006. In that opinion, the plurality confirmed that “intermittent” and “ephemeral” streams do not fall within the scope of CWA jurisdiction. Besides saying CWA jurisdiction could potentially extend to a hypothetical “seasonal river” that flowed continuously for 290 days per year, the plurality declined to spell out “exactly when the drying-up of a streambed is continuous and frequent enough” to cut off jurisdiction.
Jurisdiction over Ditches: The Rapanos plurality also analyzed the contentious issue of CWA jurisdiction over ditches. The Agencies have historically treated ditches as a type of jurisdictional “tributary” unless exempted by regulation, but the Rapanos plurality suggested that most ditches are not jurisdictional because the CWA defines ditches as “point sources” rather than “navigable waters” and because ditches typically convey “intermittent” flow. Sackett’s majority opinion did not directly analyze CWA jurisdiction over ditches, but a concurring opinion in Sackett stated that a roadside ditch at issue in that case was not a jurisdictional “tributary”—because the ditch “is not, has never been, and cannot reasonably be made a highway of interstate or foreign commerce.”
The 2023 “Conforming Rule” and Agency Interpretations: In 2023, the Biden administration adopted a rule that attempted to conform the regulatory definition of WOTUS to Sackett (the “2023 Conforming Rule”). In the 2023 Conforming Rule, the Agencies took a minimalistic approach to the task at hand: they removed language that was clearly inconsistent with Sackett, but did not attempt to clarify the meaning of “continuous surface connection” or “relatively permanent” waters.
In part because the 2023 Conforming Rule left room for interpretation by the Agencies, the WOTUS definition remains controversial. In the March 24 notice, the Agencies noted stakeholder concerns that the Conforming Rule does not “adequately comply with the Sackett decision” on its face. The Agencies also noted concerns about how the Agencies have interpreted and applied to 2023 Conforming Rule in particular cases, raising questions such as: which features are “connected to” waters that are “relatively permanent” WOTUS; which waters as “relatively permanent” in the first place; how to implement the “continuous surface connection” requirement; and “which ditches are properly considered to be [WOTUS].”
These concerns have sometimes played out in court, where the Agencies have argued that ditches and channels with “intermittent” flow can still be WOTUS after Sackett. At least one district court has agreed, holding that a channel conveying only “intermittent” flow was jurisdictional because it conveyed flow “continuously during certain times of the year.” As a result of the 2023 Conforming Rule’s ambiguity and the continuing WOTUS litigation, the regulated community continues to face significant uncertainty.
March 12 Announcement and Policy Memo on “Abutting” Wetlands: The March 24 notice follows a March 12 announcement by EPA Administrator Zeldin of the WOTUS stakeholder engagement effort. The March 12 announcement included an unpublished preview of the March 24 notice. As part of the announcement, EPA also issued a new policy memorandum discussing “abutting” wetlands. The memo provides guidance on how to distinguish non-jurisdictional wetlands that are near but separated from jurisdictional waters by a berm, a dike, uplands, or a similar feature, from jurisdictional wetlands (which “directly abut” and have a “continuous surface connection” to jurisdictional waters).
Comprehensive Stakeholder Engagement Strategy
The Agencies will conduct a multi-pronged approach to gather input on the WOTUS definition through listening sessions and written comments, as follows:
Listening sessions: Six targeted listening sessions will be held in April and May 2025. Two sessions will be open to all stakeholders, and one session held for each of the following: industry and agricultural stakeholders; States; environmental and conservation groups; and Tribes. Oral comments will be accepted on a first-come, first-serve basis.
Written comments: Comments are due by April 23, 2025, and can be submitted through the Federal eRulemaking Portal, via email, or by mail or hand delivery.
Specific topics for input: The Agencies are seeking stakeholder input on key WOTUS implementation issues that impact a wide range of private and public stakeholders, including:
The geographic scope of “relatively permanent” waters;
The meaning of “continuous surface connection” and related issues, including the Sackett court’s statement that ‘temporary interruptions in surface connection may sometimes occur because of phenomena like low tides or dry spells’”; and
How to determine the jurisdictional status of ditches and related issues, including whether the Agencies should consider factors such as flow regime (“e.g., relatively permanent status or perennial or intermittent flow regimes”), physical features, “excavation in aquatic resources versus uplands,” “type or use of the ditch (e.g., irrigation and drainage), or “biological indicators like the presence of fish.”
Implications for the Regulated Community
This initiative represents a critical opportunity for stakeholders in the regulated community to influence the future interpretation of WOTUS by the Agencies and the courts. The Trump Administration and the Agencies have emphasized their commitment prioritizing “practical implementation approaches” and seeking to provide durability, stability, and more efficient regulatory processes. This suggests that the Agencies will be especially receptive to comments from the regulated community.
After reviewing the full Federal Register notice, stakeholders impacted by WOTUS issues should consider submitting comments. In the past, many WOTUS commenters have provided detailed descriptions of their own properties, operations, infrastructure, and projects, along with examples of particular local waters. These kinds of comments can help the Agencies better understand how the WOTUS definition impacts different stakeholders “on the ground.” The most effective comments will also include arguments explaining how particular waters fit within the Sackett-Rapanos legal framework discussed above.