The petitioners in this case, Sackett v. EPA, sought judicial review after EPA issued an order applying to property that the agency had determined was within its wetlands jurisdiction.  The EPA order prevented the petitioners from building a house and also directed the petitioners to restore the land to its original condition or face heavy penalties. 

The Supreme Court granted review on two critical questions: (1) whether pre-enforcement judicial review of administrative compliance orders is available under the Administrative Procedure Act, and (2) if not, whether the unavailability of such review violates the due process clause of the Fifth Amendment.  

EPA argued that Supreme Court review was unnecessary because the four other circuit courts which have considered this same issue have all agreed that the absence of pre-enforcement review of orders under the Clean Water Act is authorized and permissible.  The Supreme Court appears to have accepted the petitioner’s view that the inability to immediately challenge EPA orders is an issue of significant nationwide importance.

It remains to be seen whether the Supreme Court’s decision in this case will be confined to matters arising under the Clean Water Act.  The Supreme Court recently declined to review a decision by the D.C. Circuit upholding the absence of pre-enforcement judicial review under the Superfund law. 

Mark Lebel is a Summer Associate at Sive, Paget & Riesel, P.C.

Background

The Clean Water Act applies to “waters of the United States,” a term that has been regulatorily defined by both EPA and ACOE[1], and which has been extensively litigated – particularly in regard to the extent to which this term encompasses wetlands.  In United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), the Court held that wetlands adjacent to a traditional navigable water were properly considered to be “waters of the United States.”  In Solid Waste Agency of Northern Cook County v. ACOE, 531 U.S. 159 (2001), the Court addressed the question of federal jurisdiction over isolated, non-navigable, intrastate ponds, and concluded that such jurisdiction could not be based solely on the presence of migratory birds.  In Rapanos v. United States, 547 U.S. 715 (2006) (“Rapanos”), the Court addressed the question of CWA jurisdiction over wetlands lying near ditches or man-made drains that eventually empty into traditional navigable waters located 11-20 miles away from the wetlands.  The Court failed to reach a majority on this question.  Four justices, led by Justice Scalia, rejected the ACOE’s assertion of jurisdiction, Justice Kennedy concurred in the judgment, and four dissenting justices led by Justice Stevens deferred to the agency’s assertion of jurisdiction.  Since Rapanos, courts have applied both the plurality’s view and Justice Kennedy’s approach, which are described in greater detail below.

• The plurality opinion authored by Justice Scalia stated that, in addition to traditional navigable waters, “waters of the United States” are “relatively permanent, standing or flowing bodies of water,”[2] and that “only those wetlands with a continuous surface connection to [such water bodies], so that there is no clear demarcation between ‘waters’ and wetlands, are ‘adjacent to’ such waters and covered by the Act.”[3]
• Justice Kennedy concluded that “waters of the United States” included wetlands that had a significant nexus to traditional navigable waters, and that wetlands could possess such a nexus if they, “either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’” [4]

The Court’s fractured opinion left much confusion in its wake, including over which standard to apply.  In a 2008 guidance document aiming to clarify the scope of CWA jurisdiction, EPA and ACOE took the position that regulatory jurisdiction under the CWA exists over a water body if either the plurality’s or Justice Kennedy’s standard is satisfied. The new guidance, which would supersede the 2008 guidance, is the agencies’ most recent attempt to clarify the evolving and elusive definition of “waters of the U.S.” as pronounced by the Supreme Court.

The 2011 Draft Guidance

As compared to the 2008 guidance, the new guidance places a greater emphasis on Justice Kennedy’s “significant nexus” test, providing an extensive description of how the test is to be applied and discussing a broader range of situations where this test would be dispositive.  In another departure from existing guidance, the new guidance explicitly describes interstate waters as categorically jurisdictional.  Furthermore, the new guidance modifies the agencies’ positions concerning swales, erosional features, and upland-draining ditches characterized by infrequent or low volume flow.  While the 2008 guidance states that these bodies are not jurisdictional, the new guidance only excludes them if they are not tributaries or wetlands, and discusses how to determine if they are tributaries or wetlands.  Finally, as compared to the 2008 guidance, the new proposed guidance provides a more explicit and extensive list of waters over which the agencies would generally not assert jurisdiction, thus providing greater certainty that activities affecting these waters would not trigger federal jurisdiction.

The following table compares selected key features of the 2008 guidance and the 2011 Draft Guidance:

Public Participation and Future Regulations

EPA and ACOE have opened the draft to public comment.  Comments are due July 1, 2011 and may be submitted here (click on the “What Do You Think” tab in the middle of the page).  While borrowing the notice-and-comment procedures applicable to rulemaking, the Guidance explicitly states that it is “not a rule, and hence is not binding and lacks the force of law.”[5] The agencies have indicated their intent to commence rulemaking after the guidance is finalized.[6] However, the American College of Environmental Lawyers (“ACOEL”) has pointed out that certain aspects[7] of the 2011 Draft Guidance are identified as subject to future rulemaking, but other issues are not, “leav[ing] open the question of how much of the Proposed Guidance ultimately will be covered by a proposed rule.”

New Hope owns and operates a renewable energy facility in the EAA, an area of the Florida Everglades that was formerly wetlands but has been hydrologically managed through pumps and drainage systems since the mid-20^th century to allow for agriculture.  New Hope’s facility, constructed on former sugarcane fields, generates electric power through the burning of non-usable portions of sugarcane as well as wood waste.  New Hope recently obtained state and local permits to construct a monofill on neighboring land, currently farmed for sugarcane, where it could place ash from the waste-burning operations, and thereby avoid trucking the ash to a distant landfill.

Existing ACOE regulations under the Clean Water Act provide that a permit is needed to conduct certain activities within wetlands.  However, exempt from the definition of wetlands are lands that do not support wetlands vegetation under normal circumstances.  The ACOE had in past rulemaking documents explained that “normal circumstances” was not to be read to include properties that had been transformed into dry land.  Also exempt from regulations are “prior converted croplands,” lands formerly wetlands but converted to agricultural use.  Rulemaking documents previously issued by the ACOE provided that a prior converted cropland could only lose such designation if wetland vegetation returned.  In 1993, the ACOE had determined that the land on which New Hope’s power facility is built was prior converted cropland. In addition, the ACOE’s Wetlands Delineation Manual provides that in order to be a regulated wetland, land must exhibit both wetlands hydrology and vegetation, unless one of three types of “atypical situations” apply: (1) an unauthorized activity resulting in the loss of one of these characteristics; (2) man-made creation of a wetland; or (3) natural events.

However, in 2009, the ACOE issued internal memoranda interpreting “normal circumstances” in hydrologically managed lands to mean “pumps off,” and stating that prior converted croplands lost such designation upon a change to non-agricultural use.  Based on these memoranda, the ACOE informed New Hope that it would likely need a permit to construct the proposed monofill.  New Hope filed a lawsuit challenging the memoranda as legislative rules that the ACOE had failed to promulgate in accordance with the APA.  The court agreed, holding that the memoranda extended the ACOE’s regulatory jurisdiction beyond that provided for in existing regulations, and diverged from the Wetlands Manual in deeming lands hydrologically managed with ACOE authorization an “atypical situation” to which the general delineation rules did not apply.  The court therefore enjoined the ACOE from applying these new rules.

New Hope Power Company was represented in the litigation by Daniel Riesel, Dan Chorost and Elizabeth Knauer of Sive, Paget & Riesel and Neal McAliley of White & Case.

In 2005, the Army Corps. issued a permit to Coeur Alaska Inc. (“Coeur”) with respect to reopening the Kensington Gold Mine, north of Juneau, Alaska.  Couer’s plans included use of a “froth flotation” technique that churns mined rock in tanks of water, causing gold-bearing materials to float to the surface.  Once the gold is skimmed off the top, a mixture of crushed rock and water is left behind.  This mixture, known as slurry, is typically disposed of in tailing ponds.  Coeur proposed an alternative disposal method that would involve pumping 4.5 million tons of slurry into Lower Salt Lake and then discharging purified lake water into a downstream creek.  The Army Corps approved of Coeur’s plan and issued a fill permit under Section 404 of the Clean Water Act.

Environmental groups challenged the permit by arguing that EPA, and not the Army Corps, had authority to issue the permit.  The environmental groups claimed that the Army Corps permit violated the CWA’s new source performance standards (“NSPS”) which prohibit the “discharge of process wastewater to navigable waters from mills that use the froth-flotation process” for mining gold. 40 CFR §440.104(b)(1).  The U.S. District Court of Alaska found for the Army Corp by holding that the permit was properly issued under the CWA.  The Ninth Circuit Court of Appeals reversed and blocked the permit, holding that the discharge was “prohibited by clearly applicable and specific performance standards.”  486 F.3d 638 (9th Cir. 2007).

In a 6-3 decision, the Supreme Court found that the agencies’ permitting authority under the CWA was mutually exclusive, with the Army Corps’ authority extending over permits for the discharge of “dredged or fill material” and the EPA’s authority applying to permits for the discharge of “any pollutant,” except where the permit is for the disposal of fill material.   Consequently, the Court established that the Army Corps had sole authority to issue permits to discharge slurry because slurry is a type of “fill material.”   Both agencies define “fill material” as material changing the bottom elevation of water and “discharge of fill material” to include “placement of … slurry, or tailings or similar related materials.” 40 CFR § 232.2.

The dissent touted the CWA’s “text, structure, and purpose” as a mandate to adhere to EPA’s pollution-control requirements.  It argued that the pollution-control mandate was intended to be read throughout the CWA and adherence to the mandate was one of the main reasons the EPA and not the Army Corps, should have jurisdiction over the permit process to dispose of slurry.

• Further reading: Justices Say Waste Can be Dumped in Lake (NYTimes)

Section 404 of the Clean Water Act regulates the discharge of dredged or fill material into “navigable waters,” defined as “the waters of the United States, including the territorial seas.” The Environmental Protection Agency and Army Corps of Engineers, which issues wetlands fill permits, had historically interpreted “navigable waters” to cover a broad range of lakes, rivers, streams, and wetlands that were not navigable in fact – limited by the constraints of the Constitution’s Commerce Clause. In SWANCC, however, the Supreme Court suggested that the Clean Water Act covers only those wetlands with a “significant nexus” to waters that were actually navigable, rejecting the Army Corps’ more expansive interpretation. A divided Supreme Court further muddied the waters in Rapanos, with the plurality opinion limiting Clean Water Act jurisdiction to wetlands with a surface connection to navigable waterways or seasonal tributaries, and a key concurrence by Justice Kennedy retaining SWANCC’s significant nexus test.

Appellate courts have struggled to reconcile Rapanos’s multiple standards, and earlier this year the Obama administration called on Congress to clarify the Clean Water Act’s scope. The Environment and Public Works Committee responded with a bill that replaces the phase “navigable waters” with “waters of the United States” and “reaffirms Federal Jurisdiction over all waters of the United States, as the [Clean Water Act] was applied and interpreted” prior to SWANCC and Rapanos.” An amendment by Sen. Max Baucus (D-MT) at yesterday’s mark-up excludes “prior converted cropland” and “waste treatment systems,” including agricultural waste ponds and lagoons.

While the bill passed out of the Senate Committee 12-7, Sens. Jim Inhofe (R-OK) and Mike Crapo (R-ID) have already announced their plans to put a hold on it, meaning 60 votes would be needed to bring the legislation to a floor vote.

The measure defines wetlands generally as follows: “those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs and similar areas.”  5 N.Y.C. Admin. C. § 24-528(2).

Notably, the City will be required to consider wetlands “smaller than 12.4 acres in size,” which may result in regulation extending beyond federal and state requirements.  5 N.Y.C. Admin. C. § 24-528(3)(c)(2).   The final strategy is to include “appropriate legal requirements, management mechanisms, funding mechanisms, enforcement mechanisms and incentives to conserve, protect, enhance, restore, stabilize and expand wetlands and associated buffer areas in the city, whether publicly or privately owned.”  5 N.Y.C. Admin. C. § 24-528(3)(d)(3)(1).

In addition to Introductory Number 506-A, the Mayor also signed into law Local Law 83 of 2005, a measure seeking to protect city-owned wetlands (pdf).

• Mayor’s Office Press Release
• Full text: Introductory Number 506-A

One proposal is to replace the plainly confusing reference to “navigable waters” in the CWA with the term “waters of the United States,” though any statutory revision would still have to pass muster under the U.S. Constitution by having some relationship to interstate commerce.  The change, however, would likely eliminate the need to link waterways and, especially wetlands, with other “navigable” water bodies.

The Obama Administration’s letter to the key Congressional committees urged Congress to consider a number of general principles, including a goal of broadly protecting the nation’s waters and making the definition of covered waters predictable.  There can be no arguing with either goal, especially the second one, because the recent Supreme Court decisions have been inconsistently interpreted by federal courts of appeals and have essentially paralyzed the U.S. Army Corps of Engineers, the agency charged with regulation of activities in regulated wetlands, as it seeks to develop coherent regulations identifying regulations subject to CWA jurisdiction.