U.S. Court of Appeals Issues Split WOTUS Ruling

On February 22, a three-judge panel of the U.S. Court of Appeals for the Sixth Circuit (Cincinnati) issued a split 2-1 decision, ruling that it has jurisdiction to proceed with challenges to the Obama administration’s “Waters of the United States” rule, or WOTUS, as opposed to federal district courts. A wide range of government, industry and agriculture interests have filed lawsuits in several district courts across the U.S. challenging the WOTUS rule.

The decision came in the form of three separate opinions, as each judge had a different view of the law on this complex issue. Two judges concluded that the appellate court has jurisdiction over the legal challenges to the WOTUS rule; the third judge concluded that the appellate court lacks jurisdiction over these cases.

It is speculated that the split decision makes it very likely that the state and industry petitioners will seek en banc review of the ruling, meaning that it would go to rehearing before the entire Sixth Circuit for additional review. Challengers will need to petition the court within 45 days to request rehearing.

The decision, which does not answer the legality of the WOTUS rule, but rather which court has authority to review it, means that stay of the WOTUS rule issued last year by the Sixth Circuit will continue in effect until further rulings.

The decision could also be appealed, potentially to the U.S. Supreme Court.

Article By Aaron M. Phelps of Varnum LLP

© 2016 Varnum LLP

Agriculture, Food, and Health Issues to Watch for 2016

Label Food Organic.jpgAs the agriculture and food industries head into the new year, a number of important cases and regulatory issues that have the potential to dramatically affect the industry are front and center. Below, an overview of the status of several of the key cases and issues that related industries should keep an eye on during 2016.

Waters of the United States

On October 9, 2015, following an earlier ruling by the U.S. District Court for the District of North Dakota, the United States Circuit Court for the Sixth Circuit issued a nationwide stay of the so-called “Waters of the United States” or “WOTUS” rule. The stay halted implementation of the WOTUS rule, pending resolution of jurisdictional issues that were the subject of oral argument on December 8, 2015. Those jurisdictional issues are focused on whether the Sixth Circuit is the proper venue to hear challenges to the rule. A ruling is expected in 2016.

A number of district court cases across the country also remain pending, and the District of North Dakota’s earlier injunction against implementation of the WOTUS rule in 13 states, including Missouri, remains in place.

Vermont Act 120

On October 8, 2015, the U.S. Circuit Court of Appeals for the Second Circuit heard oral argument of an appeal filed by the Grocery Manufacturers Association and other plaintiffs seeking review of the U.S. District Court for the District of Vermont’s denial of their Motion for Preliminary Injunction on April 27, 2015. The motion sought a preliminary injunction enjoining implementation of Vermont Act 120, passed on May 8, 2014, with an effective date of July 1, 2016. Act 120 would, among numerous provisions, mandate new labeling requirements on the part of manufacturers and other food processors for any food that is “produced with genetic engineering,” “partially produced with genetic engineering,” or “may be produced with genetic engineering.” Violators of Act 120 are subject to civil penalties of up to $1,000 per day, per product.

A decision is expected in the first two quarters of 2016 in advance of the July 1, 2016, effective date of the law.

Federal Activity Regarding GMOs and the Safe and Accurate Food Labeling Act

The U.S. House of Representatives passed the Safe & Accurate Food Labeling Act (SAFL) on July 23, 2015. The SAFL Act would, among other things, serve to pre-empt any state laws governing labeling of GMO-containing food products, including Vermont’s Act 120 due to become effective on July 1, 2016. Despite pressure on the U.S. Senate to address the SAFL Act and pass a companion or similar bill before the end of 2015, efforts to include any such bill or related provisions in the year-end omnibus spending bill were unsuccessful. Senate Agricultural Committee Group leaders, including Sen. Debbie Stabenow, D-Mich., have pledged to make the issue a top priority in January 2016, and many expect Sen. John Hoeven, R-N.D., to play a role in trying to secure passage of a bipartisan bill.

Food Safety Modernization Act Roll-Out

The Food Safety Modernization Act (FSMA) was signed into law on January 4, 2011, and represents the most comprehensive overhaul of the U.S. food safety regulatory scheme since the passage of the Food, Drug and Cosmetic Act in 1938. For nearly five years, the U.S. Food and Drug Administration (FDA) has been developing the seven final rules that implement FSMA. Each final rule impacts a different fundamental area of the U.S. food system.

In September and November 2015, the FDA issued the first five of the seven final rules: (1) Preventive Controls for Human Food; (2) Preventive Controls for Animal Food; (3) Foreign Supplier Verification Program; (4) Standards for Produce Safety; and (5) Accredited Third-Party Certification. The issuance of these rules initiates the countdown for the relevant compliance deadlines for covered entities.

It is anticipated that the final two FSMA rules regarding Sanitary Transportation and Intentional Adulteration will be issued on March 31, 2016. The Sanitary Transportation final rule will establish criteria for the sanitary transportation of food, including criteria targeted at shipping conditions and practices, employee training, and record keeping. The Intentional Adulteration final rule will require domestic and foreign food processing facilities to address vulnerabilities in their operations to prevent acts on the food supply intended to cause large-scale public harm. In 2016, the FDA will also be working with certain alliance groups to further develop FSMA compliance and enforcement guidance.

FDA Menu Labeling Requirements

Section 4205 of the Affordable Care Act charges the FDA with establishing labeling requirements for certain retail food establishments and vending machines. On December 1, 2014, the FDA issued two rules requiring calorie information to be listed on menus and menu boards at retail food establishments if they are a part of a chain of twenty or more locations operating under the same name and offering for sale substantially the same restaurant-type food items.

In July 2015, the FDA announced that the compliance deadline for the menu labeling rule was being extended by one year. All covered establishments (e.g., restaurants, grocery stores, and gas station convenience stores) now have until December 1, 2016, to identify calorie count and other information on their menus and menu boards as required by the FDA menu labeling rules.

© Copyright 2016 Armstrong Teasdale LLP. All rights reserved

EPA and U.S. Army Corps of Engineers Approve New Definition of "Waters of the United States"

The U.S. EPA and the U.S. Army Corps of Engineers announced today that they have jointly approved a new definition of the key term “waters of the United States,” a term that defines the limits of federal jurisdiction over surface waters under the Clean Water Act and several other federal laws. The rule containing the new definition will become effective 60 days after its publication in the Federal Register, which typically occurs within a week or so of the agencies’ public announcement of a new rule.

The agencies announced the new rule after several years of wrestling with this regulatory definition, which establishes the scope of federal wetlands permitting authority, federal discharge limitations, and other important programs. EPA and the Corps assert in the preamble to the rule that this new definition is “narrower” than the existing regulatory definition, and that “fewer waters will be defined as ‘waters of the United States'” than under existing regulations. In the debate leading up to today’s announcement, however, a variety of affected parties – landowners, developers, farmers, manufacturers and others – have argued that the agencies’ effort to redefine “waters of the United States” will lead to a broadening of federal jurisdiction.

Several features of the new rule are of particular importance to interested parties in California and other western arid states:

  • All “tributaries” are jurisdictional (i.e., subject to federal regulation) “by rule” if they have an ordinary high water mark and a “bed and bank” and if those features can be shown to be hydrologically linked to navigable waters or interstate waters. The “by rule” designation means that it will no longer be necessary for the agencies to establish that a tributary has a significant link to a navigable water, regardless of how attenuated that connection might be. There are no threshold requirements for volume of water nor for frequency of flow. By way of example, it appears that a “tributary” that is miles removed from the closest river, lake or ocean, with only a trickle of flow that occurs once every 10 years or more, will nevertheless be deemed jurisdictional as long as there is physical evidence of a “bed and bank” and an ordinary high water mark.

  • Certain “adjacent wetlands” are now also jurisdictional “by rule” if, for example, they are located in a 100-year floodplain and are within 1,500 feet of a “traditional navigable water” (e.g., a river, lake, or ocean) or of a tributary.

  • Case-by-case determinations of whether an aquatic feature has a “significant nexus” to a navigable water – thereby rendering it jurisdictional – will continue to be made for a variety of different waterbody types, including “western vernal pools in California” and any surface water feature within the 100-year floodplain or within 4,000 feet of a navigable water or covered tributary that is not already defined as jurisdictional by the “by rule” standard. The term “significant nexus” is given some definition in the final rule by reference to a familiar list of functional ecosystem values served by wetlands and other water bodies.

The final rule does call out a narrow class of “waters” that are determined not to be jurisdictional as “waters of the United States,” including, but not limited to,

  • certain types of ditches;

  • artificially irrigated areas that would revert to dry land should the irrigation cease;

  • erosional features, including gullies, rills, non-wetland swales;

  • groundwater, including groundwater drained through subsurface drainage systems;

  • stormwater control features

  • swimming pools, ornamental waters created in dry land, “puddles.”

Added to this list is a statement in the preamble to the final rule that it does not “regulate shallow subsurface connections nor any type of groundwater.”

Importantly, this rule applies only to new jurisdictional determinations that are required after the rule’s “effective date.” The agencies will not reopen existing approved jurisdictional determinations unless the usual conditions apply for a revision of the determination.

Implementation of this rule will be far more complicated and detail-driven than what can possibly be captured here in this very brief synopsis. It is hard to calculate its impact on the regulated community, especially in places like California where the Corps and EPA have traditionally taken a very aggressive approach to their claims of jurisdiction. At the very least, this rule will bolster those claims by giving the agencies a formal regulation to rely upon. Litigation challenging this rule has been threatened for months, and certain Members of Congress have vowed to do what they can to take legislative action.

© 2010-2015 Allen Matkins Leck Gamble Mallory & Natsis LLP

EPA and U.S. Army Corps of Engineers Approve New Definition of “Waters of the United States”

The U.S. EPA and the U.S. Army Corps of Engineers announced today that they have jointly approved a new definition of the key term “waters of the United States,” a term that defines the limits of federal jurisdiction over surface waters under the Clean Water Act and several other federal laws. The rule containing the new definition will become effective 60 days after its publication in the Federal Register, which typically occurs within a week or so of the agencies’ public announcement of a new rule.

The agencies announced the new rule after several years of wrestling with this regulatory definition, which establishes the scope of federal wetlands permitting authority, federal discharge limitations, and other important programs. EPA and the Corps assert in the preamble to the rule that this new definition is “narrower” than the existing regulatory definition, and that “fewer waters will be defined as ‘waters of the United States'” than under existing regulations. In the debate leading up to today’s announcement, however, a variety of affected parties – landowners, developers, farmers, manufacturers and others – have argued that the agencies’ effort to redefine “waters of the United States” will lead to a broadening of federal jurisdiction.

Several features of the new rule are of particular importance to interested parties in California and other western arid states:

  • All “tributaries” are jurisdictional (i.e., subject to federal regulation) “by rule” if they have an ordinary high water mark and a “bed and bank” and if those features can be shown to be hydrologically linked to navigable waters or interstate waters. The “by rule” designation means that it will no longer be necessary for the agencies to establish that a tributary has a significant link to a navigable water, regardless of how attenuated that connection might be. There are no threshold requirements for volume of water nor for frequency of flow. By way of example, it appears that a “tributary” that is miles removed from the closest river, lake or ocean, with only a trickle of flow that occurs once every 10 years or more, will nevertheless be deemed jurisdictional as long as there is physical evidence of a “bed and bank” and an ordinary high water mark.

  • Certain “adjacent wetlands” are now also jurisdictional “by rule” if, for example, they are located in a 100-year floodplain and are within 1,500 feet of a “traditional navigable water” (e.g., a river, lake, or ocean) or of a tributary.

  • Case-by-case determinations of whether an aquatic feature has a “significant nexus” to a navigable water – thereby rendering it jurisdictional – will continue to be made for a variety of different waterbody types, including “western vernal pools in California” and any surface water feature within the 100-year floodplain or within 4,000 feet of a navigable water or covered tributary that is not already defined as jurisdictional by the “by rule” standard. The term “significant nexus” is given some definition in the final rule by reference to a familiar list of functional ecosystem values served by wetlands and other water bodies.

The final rule does call out a narrow class of “waters” that are determined not to be jurisdictional as “waters of the United States,” including, but not limited to,

  • certain types of ditches;

  • artificially irrigated areas that would revert to dry land should the irrigation cease;

  • erosional features, including gullies, rills, non-wetland swales;

  • groundwater, including groundwater drained through subsurface drainage systems;

  • stormwater control features

  • swimming pools, ornamental waters created in dry land, “puddles.”

Added to this list is a statement in the preamble to the final rule that it does not “regulate shallow subsurface connections nor any type of groundwater.”

Importantly, this rule applies only to new jurisdictional determinations that are required after the rule’s “effective date.” The agencies will not reopen existing approved jurisdictional determinations unless the usual conditions apply for a revision of the determination.

Implementation of this rule will be far more complicated and detail-driven than what can possibly be captured here in this very brief synopsis. It is hard to calculate its impact on the regulated community, especially in places like California where the Corps and EPA have traditionally taken a very aggressive approach to their claims of jurisdiction. At the very least, this rule will bolster those claims by giving the agencies a formal regulation to rely upon. Litigation challenging this rule has been threatened for months, and certain Members of Congress have vowed to do what they can to take legislative action.

© 2010-2015 Allen Matkins Leck Gamble Mallory & Natsis LLP

House Passes Bill to Prevent EPA Overreach

Varnum LLP

The U.S. House of Representatives recently passed legislation prohibiting the U.S. Army Corps of Engineers and the Environmental Protection Agency (EPA) from developing, finalizing, adopting, implementing, applying, administering, or enforcing the EPA rule defining what constitutes “waters of the United States” under the Clean Water Act.

This Waters of the United States Regulatory Overreach Protection Act of 2014, H.R. 5078, comes as a response to a move by the EPA in April of this year that proposed changes to how the EPA will define “waters of the United States.” The EPA’s update uses scientific terms from hydrogeology to define which waters are covered under the Clean Water Act.

Farmers, however, have criticized the EPA update as 80 pages of technical and legal jargon. After Congressional hearings, the House passed The Waters of the United States Regulatory Overreach Protection Act of 2014. This bill will go to the Senate next for consideration.

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