On May 25, 2023, the U.S. Supreme Court issued a landmark decision regarding property rights for small business owners in the case Sackett v. Environmental Protection Agency (EPA). The Court determined the EPA and the U.S. Army Corps of Engineers had exceeded their authority to regulate waters on private property under the Clean Water Act (CWA).
“Today’s decision in Sackett v. EPA provides long-needed clarity for small business owners and landowners,” said Beth Milito, Executive Director of the NFIB Small Business Legal Center. “The ever-changing standard and definition of ‘waters of the United States’ has disproportionately impacted small businesses, including farmers, ranchers, home builders, and contractors. The Supreme Court’s ruling today affirmed the limits set by Congress and will rein in the extreme interpretation of the Clean Water Act.”
This particular case hinged on the appropriate test for determining if wetlands are “waters of the United States” (WOTUS). When a wetland is deemed to be a “water of the United States” it is subject to the EPA’s jurisdiction, which means the owner of the land that contains that wetland is subject to bureaucratic and financial obstacles before they can improve their land. The Supreme Court’s decision significantly restricts the EPA’s jurisdiction going forward.
Under the CWA, the federal government maintains regulatory authority over certain bodies of water. The EPA and U.S. Army Corps of Engineers are charged with enforcing the CWA. For many years, different courts and administrations have offered their interpretation of what sort of jurisdiction the CWA grants the federal government over wetlands on private property. For more information on the WOTUS issue and the EPA’s most recent WOTUS Rule (effective March 20, 2023), see the NFIB Small Business Legal Center’s WOTUS Explainer and NFIB.com/Waters.