U.S. Supreme Court building in Washington, D.C.
U.S. Supreme Court building in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)

The U.S. Supreme Court on Friday agreed to decide where a major challenge over an Obama administration clean-water rule should be waged—in a federal appellate court or in the federal district courts.

The justices agreed to hear claims by national companies, 29 states and agriculture-related groups that argued the litigation should take place in federal district courts and not in a federal appellate court. Businesses argue multicourt review will offer a wider perspective of views on the legality of the regulations.

The Clean Water Rule has been called one of the most consequential regulations ever promulgated under the Clean Water Act. Finalized by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers in May 2015, the regulations clarify the definition of the “waters of the United States” protected by the Clean Water Act in the wake of several Supreme Court decisions.

Thirty-one states and business and agriculture groups challenged the rule in eight appellate and 13 district courts. Eight states and about a dozen environmental groups joined the defense of the rule. The U.S. Court of Appeals for the Sixth Circuit earlier imposed a nationwide stay on the rule’s implementation.

The fight over the water rule and the Obama administration’s Clean Power Plan are among the largest environmental challenges in decades. And whether the litigation continues may depend on what positions the incoming Trump administration takes on the regulations.

In National Association of Manufacturers v. U.S. Department of Defense, the business group, represented by Mayer Brown’s Timothy Bishop, argued the Clean Water Act’s Section 1369 did not give courts of appeals original jurisdiction over challenges to the regulation.

“Because of the great uncertainty in the case law, parties cannot know which court (or courts) will rule that it has power to decide a CWA rule challenge,” Bishop wrote. That uncertainty, he added, “produces duplicative litigation, conflicting decisions on jurisdiction, significant delay, and tremendous waste of judicial and party resources. It also leaves merits decisions vulnerable to appellate reversal on grounds other than the merits, creating additional uncertainty.”

Bishop said the government agencies are concerned about “their own convenience and desire to suppress the full airing of issues that comes with multi-court review.”

But the government countered that “because the purpose and effect of the Clean Water Rule is to identify the locations where the CWA’s prohibitions apply and where permits are required, the rule falls within the categories of agency action that are reviewable” under the act’s section providing jurisdiction in the appellate courts.

“By providing for direct court of appeals review on an expedited timeline, Congress sought to ‘establish a clear and orderly process for judicial review’ that would prevent the extended uncertainty and risk of conflicting judicial decisions that petitioner embraces,” Ian Gershengorn, the acting solicitor general, wrote in court papers.