Understanding New Rulings on Federal Regulations

David Jackson

Water and Wastewater Treatment Practice Leader

Koby Boman

Water/Wastewater Treatment Engineer

As water utilities plan for dealing with regulatory requirements and deadlines, it’s important to understand when and how the legal landscape might be changing.

Several recent developments indicate turbulence in the water industry that’s worth monitoring.

Challenges to New Federal PFAS Standards

The Environmental Protection Agency (EPA) in April issued the National Primary Drinking Water Regulation for PFAS, requiring public water systems to test, monitor and plan for changes to remove these contaminants from their drinking water. Water systems have three years to complete initial monitoring, with ongoing compliance monitoring and other requirements kicking in starting in 2027.

Since that time, several groups, including the American Water Works Association (AWWA) and the Association of Metropolitan Water Agencies (AMWA), have asked for federal court review of the new federal limits on PFAS in drinking water (AWWA and AMWA File Petition for Judicial Review). The water groups argue that EPA didn’t adequately take into account public comments or the best available data in formulating the rule and greatly underestimated the costs of compliance. Their challenge asks the court to verify whether EPA complied with the Safe Water Drinking Act and, if not, order EPA to revise the PFAS regulation.

The significance of court review has become magnified because the U.S. Supreme Court in late June shifted the legal standard for accepting regulators’ interpretation of the rules they adopt. And in July, the high court changed the time limit for suing the government over a regulation.

More Leeway to Contest Regulations

Two Supreme Court rulings have opened the door for more pushback on federal regulations:

“Chevron Deference”: The justices overturned a 1984 precedent, named after the federal case of Chevron vs. NRDC, under which federal courts generally have deferred to agencies’ reasonable interpretation of disputed regulations if the governing statute written by Congress was unclear or included intentional ambiguity. The earlier ruling had allowed Congress to write laws more flexibly while letting the agencies exercise their judgment and specialized expertise in developing and enforcing regulations.

Now, however, courts will have more power to decide whether federal agencies properly exercised their authority, rather than deferring to the agencies’ guidance. This could open the door for more challenges to new or pending regulations, including greater potential for them to be modified or overturned.

Statute of Limitations: In a separate case, Corner Post vs Board of Governors of the Federal Reserve System, the court extended the time for filing suit to undo a regulation. The statute of limitations for challenging a federal regulation has been considered six years, starting when the rule was adopted. However, the justices said the statute of limitations for challenging a rule’s validity now should start when someone is affected by the rule rather than the date of promulgation.

In the case they decided, a truck stop joined a lawsuit over credit card processing fees that went into effect more than six years before the business even opened. This ruling could end up having ramifications for new and older federal rules in many areas.

Murky Waters

A move in the U.S. Senate is developing to adopt legislation that would restore the Chevron Deference as the legal standard. Sen. Elizabeth Warren, D-Mass, is leading this. The bill has an uphill climb in the Senate as there is quite a bit of resistance along party lines, but the fight over these changes is likely to continue.

It’s not yet clear how broad the impact of these changes in the legal landscape will be, but utilities should be aware that they could affect a range of water-related regulations as well as other federal rules. For now, utilities have more freedom to challenge regulations in federal court than in the past, and federal agencies will now carry a heavier burden in justifying interpretations of regulations in future litigation.

To learn more about Freese and Nichols’ PFAS, water/wastewater treatment or regulatory compliance services, contact David Jackson, david.jackson@freese.com, Koby Boman, koby.boman@freese.com or Viraj deSilva, viraj.desilva@freese.com

David Jackson, PE, BCEE, is Water and Wastewater Treatment Practice Leader, based in Fort Worth.

Koby Boman, PE, is a Water/Wastewater Treatment Engineer focusing on regulatory compliance, based in Houston.