Alert July 17, 2007

Courts EPA and Army Corps Continue to Refine Jurisdictional Boundaries After Rapanos

In June 2006, the U.S. Supreme Court released its plurality decision in Rapanos v. United States, 126 S. Ct. 2208. Four Justices voted to limit the U.S. Army Corps of Engineers’ (“Corps”) jurisdiction over wetlands and other non-navigable waters for purposes of §404 of the Clean Water Act (“CWA”), 42 U.S.C. §1344, to “relatively permanent, standing or continuously flowing bodies of water” connected to navigable waters, and to “wetlands with a continuous surface connection to” those relatively permanent waters. 126 S. Ct. 2208, 2225-27. Justice Kennedy wrote a separate concurring opinion, in which he opined that a wetland (and potentially any other non-navigable water) is subject to the Corps’ jurisdiction only if it has a “significant nexus” to navigable waters. In dissent, Justice Stevens argued for an even broader notion of §404 jurisdiction that incorporates all those waters that satisfy the plurality or Kennedy tests, as well as various other types of wetlands.

The circuit courts are split on whether the plurality opinion, issued by only four Justices, establishes an authoritative test to be followed in defining §404 jurisdiction. The Seventh and Ninth Circuits have held that Justice Kennedy’s significant nexus test alone must be satisfied to establish jurisdiction under §404. United States v. Gerke Excavating, Inc., 464 F.3d 723, 724 (7th Cir. 2006) and Northern California River Watch v. City of Healdsburg, 457 F.3d 1023, 1025, 1029 (9th Cir. 2006). On the other hand, the First Circuit has ruled that §404 jurisdiction exists if either test is satisfied, since wherever the plurality or Justice Kennedy would find jurisdiction, the four dissenters would do the same. See United States v. Johnson, 467 F.3d 56, 60, 64-66 (1st Cir. 2006). While the plaintiffs in Johnson have asked the Supreme Court to resolve this conflict among the circuits, the Corps and the U.S. Environmental Protection Agency (“EPA”) are continuing to assert jurisdiction where it may be substantiated under either the plurality or Kennedy tests. Despite this uncertainty, the circuits are all in agreement that jurisdiction lies if the Kennedy test is satisfied.

Justice Kennedy acknowledged that in order to implement his significant nexus test, the Corps must either promulgate new regulations consistent with his opinion or determine whether the standard is met on a case-by-case basis. To that end, the Corps and the EPA recently released joint Guidance in an effort to fill in the details of Justice Kennedy’s significant nexus standard and otherwise clarify the agencies’ interpretation of §404 jurisdiction in the wake of Rapanos. See “Clean Water Act Jurisdiction Following U.S. Supreme Court’s Decision in Rapanos v. United States & Carabell v. United States,” (June 5, 2007; referred to as “Guidance”).

This advisory discusses what questions have, and have not, been answered since Rapanos and provides an overview of their implications for property owners, developers, mining companies, and others that may need to wholly or partially fill wetlands and other non-navigable waters as part of their operations.

Rapanos and the Need for Guidance

Sections 301 and 502 of the CWA prohibit the discharge of dredged or fill material into “navigable waters” unless such discharge is authorized by a permit issued by the Corps pursuant to §404(a). The CWA defines “navigable waters,” in relevant part, as “waters of the United States.” 33 U.S.C. §1362(7). Accordingly, the Corps’ jurisdiction under §404 is limited to dredged and fill material discharged into the “waters of the United States.”

Rapanos addressed the previously unsettled issue of whether “waters of the United States” include wetlands that are not physically adjacent to “traditional” navigable waters. Traditional navigable waters are “waters which are currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide.” 33 C.F.R. §328.3(a)(1); Guidance at 4-5, Fn19.

The four-justice plurality in Rapanos held that “waters of the United States” encompasses only “relatively permanent, standing or continuously flowing bodies of water” connected to navigable waters, and “wetlands with a continuous surface connection to” those relatively permanent waters. See 126 S. Ct. at 2225-27. Consequently, the plurality would limit the Corps’ jurisdiction to these waters. See id. The plurality also stated that “channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall,” are not subject to §404 jurisdiction. Id. at 2225. Throughout its opinion, the plurality emphasized that the Corps has no jurisdiction over ephemeral streams, storm drains, or roadside ditches, regardless of whether waters might occasionally flow through such channels and reach navigable waters.

However, only four Justices signed the plurality opinion, allowing Justice Kennedy’s concurrence to guide subsequent interpretations of the Corps’ jurisdiction. In his concurring opinion, Justice Kennedy wrote that wetlands will be subject to §404 jurisdiction only if they have a “significant nexus” to traditional navigable waters. Id. at 2248. Justice Kennedy went on to explain that a significant nexus exists “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity” of traditional navigable waters. Id. In the alternative, when these alleged effects on water quality are “speculative or insubstantial,” a significant nexus is lacking, and the non-navigable water will not be subject to the Corps’ jurisdiction. Id. Consistent with the holding in United States v. Riverside Bayview Homes, Inc, 474 U.S. 121 (1985), Justice Kennedy also determined that wetlands physically adjacent to navigable waters always satisfy the “significant nexus” test. See id. In addition, Justice Kennedy stated that wetlands adjacent to “certain major tributaries” may satisfy the “significant nexus” test simply due to their adjacency to these tributaries. See id.

The divergent opinions in Rapanos left stakeholders wondering not only which of the Supreme Court’s standards represents the actual reach of §404 jurisdiction, but also how the Corps would apply these standards to particular waters and wetlands. It was under these circumstances that the EPA and the Corps issued their joint Guidance to explain how the agencies understand and intend to apply Rapanos. The Guidance follows the First Circuit’s opinion that either Justice Kennedy’s test or the plurality’s test will suffice to support a claim of jurisdiction. Thus the Guidance specifies certain waters that will be subject to §404 jurisdiction in all cases, waters that will be examined case-by-case under the Kennedy test, and waters that will generally be non-jurisdictional under both tests.

Waters Over Which the Corps Will Always Assert Jurisdiction

According to the Guidance, certain waters will be subject to the Corps’ jurisdiction in all cases. For instance, the Corps will always assert jurisdiction over “traditional” navigable waters, meaning waters that are “currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide.” 33 C.F.R. §328.3(a)(1); Guidance at 4-5, Fn19. In addition, any wetlands adjacent to traditional navigable waters will always be subject to CWA jurisdiction. The EPA and the Corps define “adjacent” to mean “bordering, contiguous, or neighboring.” Guidance at 5. A continuous surface connection is not required to establish adjacency for wetlands adjacent to traditional navigable waters. Id.

Furthermore, “relatively permanent” non-navigable tributaries of traditional navigable waters will also be subject to CWA jurisdiction in all cases. Id. at 5-6. To be considered “relatively permanent,” a tributary must continuously flow either year round or on at least a seasonal basis. Id. The Guidance defines “tributary” as “the entire reach of a stream that is of the same order (i.e., from the point of confluence, where two lower order streams meet to form the tributary, downstream to the point such tributary enters a higher order stream).” Id. at 5, Fn21. A tributary may be man-altered or man-made. Id.

Finally, all wetlands with a “continuous surface connection” to relatively permanent non-navigable tributaries of traditional navigable waters will always be subject to CWA jurisdiction under the plurality test from Rapanos. See id. at 6. The Guidance states that a continuous surface connection does not require the continuous presence of surface water between wetland and tributary. Id. at 6, Fn25. Instead, a continuous surface connection is present “where a wetland directly abuts [a] tributary (e.g., they are not separated by uplands, a berm, dike, or similar feature).” Id. at 6.

Waters Subject to Corps Jurisdiction on a Case-by-Case Basis

Following Justice Kennedy’s concurring opinion in Rapanos, there are certain waters over which the Corps may or may not assert §404 jurisdiction. In the case of these waters, the Corps and the EPA will conduct a case-by-case, fact-specific analysis to determine whether or not such waters have a “significant nexus” to traditional navigable waters. If a significant nexus exists, the Corps will assert jurisdiction under the CWA. In the absence of a significant nexus, the Corps will decline to assert jurisdiction.

The Guidance states that there are three different types of waters that are subject to a case-by-case significant nexus analysis. First, the Corps and the EPA will perform a case-by-case significant nexus analysis for all non-navigable tributaries that are not relatively permanent. Id. at 7. Second, wetlands adjacent to such non-permanent non-navigable tributaries must be evaluated in the same manner. Id. Finally, “wetlands adjacent to, but not directly abutting, a relatively permanent tributary (e.g., separated from it by uplands, a berm, dike, or similar feature),” will also be evaluated on a case-by-case basis for a significant nexus. Id.

The Guidance states that if a tributary has adjacent wetlands, the significant nexus analysis will consider the function and flow characteristics of both the tributary and the adjacent wetlands to determine their effect on “… downstream traditional navigable waters.” See id. at 9. It is of note that when performing a significant nexus analysis for a given wetland, the Corps will consider not only the function and flow characteristics of the wetland itself and the adjacent tributary, but also all other wetlands adjacent to the tributary. Id. If a tributary has no adjacent wetlands, only the functions and flow characteristics of the tributary itself will be evaluated for these effects.

Pursuant to Justice Kennedy’s concurrence in Rapanos, the Corps’ and EPA’s significant nexus analysis will look to whether the waters or wetlands, “either alone or in combination with similarly situated [waters or] lands in the region, significantly affect the chemical, physical, and biological integrity” of traditional navigable waters. See Guidance at 8; Rapanos v. United States, 126 S. Ct. at 2248. In order to determine whether particular waters or wetlands fit these criteria, the Corps and the EPA will examine the function and flow characteristics of the above tributaries and their adjacent wetlands. Guidance at 9. The Guidance lists many complex hydrologic and ecologic factors that enter into this analysis, including volume, duration, and frequency of flow, proximity to traditional navigable waters, and capacity to transfer nutrients and pollutants to those waters. Id. at 9-10. At bottom, however, the Guidance provides little to no indication of the relative importance of these factors or the point at which they combine to establish CWA jurisdiction.

Waters Typically Not Subject to Corps Jurisdiction

In addition to outlining the waters that will be subject to the Corps’ outright or case-by-case jurisdiction under §404, the Guidance describes certain waters that typically will not be subject to such jurisdiction. The Guidance states that the Corps generally will not assert jurisdiction over swales or erosional features, as they tend neither to be tributaries nor have a significant nexus to traditional navigable waters. Id. at 11. As examples of such features, the Guidance cites “gullies [and] small washes characterized by low volume, infrequent, or short duration flow.” Id. The Guidance also suggests that ditches (including the roadside variety) will not be subject to the Corps’ jurisdiction as long as they do not transmit a “relatively permanent” flow of water and are located within, and only drain, uplands. Id. However, the Guidance cautions that any of these features, “even when not jurisdictional waters subject to CWA §404 ... may still contribute to a surface hydrologic connection between an adjacent wetland and a traditional navigable water.” Id. Furthermore, it is possible that these features could be regulated elsewhere under the CWA (e.g., §§ 311 and 402) if they transmit pollutants to other waters. Id. It is also crucial to note that some waters that would otherwise be non-jurisdictional under the principles described above might be subject to the Corps’ jurisdiction where the waters are tributaries and they have a significant nexus to downstream traditional navigable waters. Id. As an example, the Guidance refers to ephemeral tributaries that “may serve as a transitional area between the upland environment and … traditional navigable waters.” Id.

§404 Jurisdiction in Practice

While the Guidance provides categories of analysis and a list of factors to be considered, jurisdictional determinations under §404 remain heavily fact-specific and somewhat subjective. Thus it may be instructive to examine a few cases where the courts have had to wrestle with these issues in order to gain a sense of how they are handled in practice.

United States v. Cundiff  illustrates the power of expert testimony and detailed evidence-gathering in the process of determining §404 jurisdiction. See 480 F.Supp.2d 940 (W.D. Ky. 2007). Under the significant nexus test, the court found jurisdiction based upon expert testimony on the myriad functions of the wetlands at issue, including “vital filtering and sediment trapping functions.” Id. at 945. Under the plurality test, the court found jurisdiction based upon maps, video of the waters, historical and current aerial photographs, and expert testimony. Id. at 946-47. Relying on all of this evidence, the court found a continuous surface connection where there was no clear demarcation between the waters and wetlands at the site and, as a result, it was difficult to determine where the water ends and the wetlands begin. Id.

Where adjacency to navigable waters is the only issue, however, experts may be less useful. In United States v. Fabian, the U.S. Government successfully argued for §404 jurisdiction over wetlands because those wetlands were adjacent to traditional navigable waters. No. 2:02-CV-495, 2007 WL 1035078, at *13 (N.D.Ind. Mar. 29, 2007). The court found such adjacency even though the wetlands had no surface hydrological connection to navigable waters and were separated from those waters by a 15-foot-high levee because the wetlands neighbor, at least in part, the levee. Id. at *3, 13. Here the court looked to Justice Kennedy, who adopted the Corps’ definition of adjacency – “bordering, contiguous, or neighboring,” in Rapanos. 2007 WL 1035078, at *13; Rapanos, 126 S.Ct. at 2238. The court then drew a comparison to other Corps regulations that bring wetlands separated from navigable waters by “man-made dikes or barriers [and] natural river berms” under the umbrella of the term “adjacent.” 2007 WL 1035078, at *13.

In Environmental Protection Information Center v. Pacific Lumber Company, 469 F.Supp.2d 803, 823-24 (N.D. Cal. 2007), the presence of a hydrologic connection was insufficient to show a significant nexus under the Kennedy test. Despite this connection, the plaintiffs failed to introduce evidence that the streams in question have any physical, chemical, or biological significance for the water quality of the navigable waters into which they fed. See id. Because Pacific Lumber took place in the Ninth Circuit, the court applied Justice Kennedy’s test alone. In the First Circuit, a hydrologic connection might have been sufficient to establish §404 jurisdiction provided that it is a continuous surface connection, though the court did not address this issue.

Conclusion

Although some lower courts have held Justice Kennedy’s significant nexus test to be the only way to evaluate whether the Corps has §404 jurisdiction over a particular water or wetland, others have agreed with the Corps that either test will suffice. Until the Supreme Court rules on the matter, the Corps itself will continue to follow its own interpretation of Rapanos, asserting jurisdiction where it may be found under either test. Practically speaking, however, where a significant nexus exists, jurisdiction will almost certainly be upheld. In the absence of a significant nexus, it may be difficult to rule out the possibility of §404 jurisdiction unless the plurality test is also unfulfilled.

While there may be some uncertainty as to how the courts will treat some assertions of §404 jurisdiction, it remains certain that wetlands adjacent to traditional navigable waters will continue to be subject to jurisdiction under the Kennedy test. In addition, the Guidance is at least somewhat specific as to where the Corps otherwise intends to claim jurisdiction in the first place. For instance, the Corps will always claim jurisdiction over traditional navigable waters; “relatively permanent,” non-navigable tributaries of those waters; and wetlands with a continuous surface connection to those waters.

However, a large portion of the waters or wetlands potentially subject to the Corps’ jurisdiction will be evaluated by the agencies in a case-by-case, fact-intensive manner for a significant nexus to traditional navigable waters. As a result, those that must discharge fill material into the waters or wetlands must demonstrate to the Corps and the courts that the “chemical, physical, and biological integrity” of navigable waters is not affected. While the Guidance lists the factors that will be considered in this analysis, it provides little indication of the relative importance of these factors. Most importantly, the Guidance does not explain when, individually or together, these factors amount to a significant nexus.