This week the City of Waukesha celebrates the success of an impressive technical effort 13 years in the making.  After inserting some final conditions, the Great Lakes Compact Council unanimously approved Waukesha’s application to divert water from Lake Michigan for its public supply.  The application has generated significant regional and national interest because of its status as a “test case” for the Great Lakes Compact.  The Compact generally bans diversions of Great Lakes water outside the Great Lakes basin, but offers limited exceptions for communities that straddle the basin line, or that lie within counties that straddle the basin line, provided a community’s application meets certain stringent technical conditions.  Waukesha is the first community wholly outside the Great Lakes basin to apply for a diversion (though not the first community to receive a diversion; New Berlin, which straddles the basin line, successfully achieved that distinction in 2009).  As I have written previously in this space, the Waukesha case has been a striking demonstration that the process set up under the Compact works, no matter what one’s position on the outcome.

Yet from a legal perspective, that process may not be complete.  The technical review and approval challenge remains subject to legal challenges.  One vehicle for such a challenge is the Compact itself.  It contains a “dispute resolution and enforcement” provision that offers redress to “any person aggrieved” by an action of the Compact Council or of a party to the Compact.  The provision offers a glimpse of a legal process that may be just as complex as the technical approval process just completed.

The Clean Water Act requires regulatory agencies to make difficult choices about exactly where “water ends and land begins.”[1]  Whether a particular property contains “waters of the United States,” the touchstone for federal jurisdiction under the Act,[2] is not easy to determine, especially when the question involves not traditionally navigable waters but wetlands.  The Environmental Protection Agency defines “wetlands” as areas such as swamps, marshes, and bogs that are periodically inundated with water.  Severe consequences flow from unpermitted actions that impact “waters of the United States.”  The Act imposes criminal liability and civil penalties to the tune of $37,500 per day of violation.[3]  Upon request, the Army Corps of Engineers will issue jurisdictional determinations (“JDs”) specifying whether a particular property contains jurisdictional waters.  In recent years, the Supreme Court has wrestled with various aspects of wetlands issues again and again and again and again.  The most recent such case, United States Army Corps of Engineers v. Hawkes Co., No. 15-290, raised the question of whether Corps JDs constitute “final agency action” that is immediately appealable in federal court under the Bennett v. Spear analysis rooted in the Administrative Procedure Act.

Earlier this week, the Supreme Court unanimously ruled that JDs constitute final agency action and are immediately appealable.  The Court quickly rejected the Corps’ two arguments to the contrary: first, the rather unreasonable suggestion that affected citizens could simply proceed without a permit, risking an enforcement action during which one could argue that no permit was required; and second, that upon receiving a “positive” JD, affected citizens could apply for a permit and seek judicial review of the JD upon the conclusion of the lengthy permitting process (the property owners in Hawkes estimated that it would cost well over $100,000 to “earn” the appeal right under that scenario).

Despite its importance, the decision is not particularly surprising given the tenor of the oral argument as well as the Court’s recent decision in Sackett v. Environmental Protection Agency, 566 U.S. — (2012) that an EPA compliance order is immediately appealable to federal court when it was based on the factual assumption that a parcel contained wetlands.  Perhaps for that reason, it’s not the majority opinion that has everyone talking; instead, Justice Kennedy stole the show with a three-paragraph concurrence.

Waukesha Mayor Shawn Reilly and Racine Mayor John Dickert visited Marquette Law School on February 4 for a wide-ranging conversation about Waukesha’s application to divert water from Lake Michigan pursuant to the Great Lakes Compact.  At the time, few observers expressed confidence about the application’s prospects for approval.  Now, after several intervening meetings by the Regional Body that governs the Compact, we have more clarity on a path forward.

The Regional Body has offered a revised plan for consideration under which it could grant a conditional approval if, in exchange, Waukesha accepts a smaller water service area (and a diversion reduced by a corresponding amount.)  In its application papers, Waukesha took the position that state law required it to request enough water to supply a water service area contiguous with its sewer service area.  The boundaries extended well beyond the city limits and included parts of the City of Pewaukee and the Towns of Delafield, Genesee, and Waukesha.  During a Regional Body meeting on April 21, it became clear that the expanded service area was a sticking point for several other states, all of which hold a veto power over the application.  Partly, this is because the exception to the Compact’s ban on diversions refers only to a “community,” in the singular; it makes no reference to a water service area.  The Regional Body therefore drafted, and yesterday posted to its website, a revised map showing a reduced service area that would decrease the estimated diversion request from about 10.1 million gallons of water per day (MGD) to about 8.2 MGD.  Waukesha leaders appear willing to accept the change: “[W]e’re approaching a workable solution for residents of the city,” said Waukesha Water Utility General Manager Dan Duchniak.  The decreased water service area may satisfy the requirements of the Compact.  But does it simultaneously violate state law for Waukesha’s water service area to be non-contiguous with its sewer service area, as the city originally posited?  The answer isn’t readily apparent, but some statutory calisthenics reveal the dilemma.