K&LNG
JUNE 2006
Alert
Environmental
Supreme Court Decides What Waters Are Subject to Clean
Water Act Jurisdiction
In a decision likely to shake some of the roots of
wetlands and clean water regulation, the U.S.
Supreme Court has tackled the much-debated
question of what waters are subject to regulation
under the federal Clean Water Act (CWA).
Specifically, in a June 19, 2006, decision, the Court
sought to define when wetlands are part of “waters of
the United States” and trigger permitting
requirements. The court’s split opinion underscored
one point: that the scope of federal regulation over
wetlands and other waters in the United States is not
as broad as federal regulators – including the U.S.
Environmental Protection Agency (EPA) and the
Army Corps of Engineers (Corps) – have long
maintained. The precise scope of that jurisdiction
(and even the questions that guide what defines such
jurisdiction), however, remains unsettled.
Under section 404 of the CWA1 , a permit is required
from the Corps before any person may dredge or fill
materials into “waters of the United States.”2 In
Rapanos v. United States, the Supreme Court
addressed the scope of CWA section 404 jurisdiction
over “waters of the United States,” including
“wetlands,” for the third time in 20 years. The Court
vacated lower court decisions that had broadly
interpreted this term to include any area where water
existed and could ultimately flow down to a truly
navigable water, regardless of how minimal the
connection. While only a plurality of justices joined
the opinion, it is clear that certain Corps and EPA
regulations,3 extending jurisdiction over ephemeral
streams and isolated waters with questionable
1
2
3
4
5
6
connections to navigable waters, are either invalid or
at a minimum may not have the conclusive reach that
federal agencies had asserted and that lower courts
had allowed. This Alert addresses the potential
pragmatic impacts of Rapanos on permit applicants.
The wider-ranging impacts of this decision on
questions of federalism, deference to agencies, and
other issues will be addressed in subsequent Alerts.
BACKGROUND
Which bodies of water are “waters of the United
States” for purposes of CWA jurisdiction has been
the subject of protracted debate since Congress
enacted the statute in 1972. The regulatory definition
adopted by the Corps and EPA for purposes of
issuing dredge and fill permits under section 404
includes all interstate waters, tributaries, and
ephemeral streams, and all wetlands adjacent to such
waters.4
In a unanimous decision in 1985, United States v.
Riverside Bayview Homes, Inc.,5 the Court held that
the Corps may assert jurisdiction over wetlands that
are “adjacent to” or immediately abut other “waters
of the United States” and their tributaries. The Court
found the Corps’ assertion of jurisdiction over the
wetlands at issue in Riverside Bayview was
reasonable in light of the Act's "language, policies,
and history," and was thus entitled to deference
under Chevron U.S.A. Inc. v. Natural Resources
Defense Council.6
33 U.S.C. §1251 et seq.
33 U.S.C. §1344.
E.g., 33 C.F.R. 323.1.
33 C.F.R. 328.3(a)(1)-(7), 40 C.F.R. 232.2.
474 U.S. 121 (1985).
467 U.S. 837 (1984).
Kirkpatrick & Lockhart Nicholson Graham LLP |
JUNE 2006
In 2001, the Court by a five-to-four majority found
that the Corps has no authority under the CWA to
require permits for filling isolated wetlands that have
no hydrological connection at all to “waters of the
United States,” but are connected only because
migratory birds move in commerce among isolated
ponds, holding the wetlands at issue lacked a
substantial nexus to navigable-in-fact waters.7
Since Solid Waste Agency of Northern Cook County
v. Army Corps of Engineers ("SWANCC"), parties
have argued about what the “substantial nexus”
language means, including what constitutes wetlands
“adjacent” to navigable waters and how substantial
the relationship or connection must be to navigable
waters or their surface water tributaries. The
majority of lower courts have accepted the United
States government’s argument that the hydrological
connection between the “adjacent” wetlands and a
truly navigable water need only be enough to create
the potential in theory for pollution from the adjacent
wetlands to find its way to a river.8 This broad view
of the nexus issue has allowed the Corps to assert
jurisdiction over relatively isolated areas. A minority
of lower courts have limited Corps jurisdiction to
waters that are “truly adjacent” or have a “significant
measure of proximity” to navigable waters.9
In 2004, the Supreme Court declined to grant
certiorari to resolve this conflict; and numerous cases
have ensued in which the central question was
whether a “substantial nexus” existed and how to
define it.
RAPANOS AND CARABELL
The decision rendered by the Supreme Court on
June 19 addressed two such cases – brought
respectively by the Rapanos and Carabell families,
involving four Michigan wetlands lying near ditches
or man-made drains.
The Rapanos case arose when the subject landowner
began filling wetlands on three properties to prepare
them for commercial development. The Rapanos
family declined to obtain Corps permits, thinking
that the areas in question were outside of CWA
jurisdiction. The United States filed suit in the
United States District Court for the Eastern District
of Michigan and also pursued criminal charges for
the landowners’ failure to obtain CWA permits. The
7
8
9
10
11
2
district court held the Rapanoses liable for filling
approximately 54 acres of wetlands on the three
properties, after determining that those wetlands
were adjacent to tributaries of “traditional navigable
waters” subject to regulation under the CWA and
that the wetlands shared a hydrological connection
with regulated waters. (The government also
obtained a criminal conviction against Mr. Rapanos.)
The United States Court of Appeals for the Sixth
Circuit affirmed. It claimed to be following the
majority rule interpretation of SWANCC, declaring
that that ruling did not restrict CWA coverage to
“wetlands directly abutting navigable water.”10
The Carabell litigation arose when the subject
landowners were denied a Corps permit to deposit
fill in a wetland that was separated from a drainage
ditch by an impermeable berm. The Carabells sued,
but the District Court found Clean Water Act
jurisdiction. The Sixth Circuit affirmed, holding that
the wetland in question was “adjacent” to navigable
waters (even though separated by the berm).11
On appeal from the Sixth Circuit the Rapanos and
Carabell cases were consolidated for review before
the Supreme Court. In this decision, the Court
considered how broadly the Corps could define the
term “adjacent” to extend its jurisdiction under the
CWA.
The Rapanoses argued that the “significant nexus”
standard required that contested wetlands have more
than a mere hydrological connection to navigable
waters. They contended that wetlands should be
considered “adjacent” to “waters of the United
States” only when the two were “inseparably bound
up.” The Petitioners further argued that the history,
policies, and goals of the CWA supported the need
for a “strict nexus” requirement. Failure to enforce
such a strict requirement, they claimed, would create
federalism and due process problems. Alternatively,
they argued that extensive and ambiguous Corps
jurisdiction exceeded Congress’ constitutional power
to regulate commerce among the states.
The United States contended that Riverside Bayview
upheld the Corps’ regulatory determination that
“waters of the United States” included both
tributaries of navigable waters and wetlands adjacent
to all other waters. It further argued that extending
Solid Waste Agency of Northern Cook County v. Army Corps of Engineers, 531 U.S. 159 (2001).
United States v. Deaton, 332 F.3d 698 (4th Cir. 2003), United States v. Rueth Dev. Co., 335 F.3d 598 (7th Cir. 2003),
Headwaters v. Talent Irrigation Dist., 243 F.3d 526 (9th Cir. 2001).
In re Needham, 354 F.3d 340, 345-47 (5th Cir. 2003).
United States v. Rapanos, 339 F.3d 447, 453 (6th Cir. 2003).
Carabell v. United States Army Corps of Eng’rs, 391 F.3d 704 (6th Cir. 2004).
Kirkpatrick & Lockhart Nicholson Graham
LLP
|
JUNE 2006
Corps jurisdiction to ephemeral streams and wetlands
adjacent to tributaries, as is done in the regulations, is
a reasonable interpretation of the CWA necessary to
achieve the goals of the CWA because the potential
exists for pollution from these somewhat distant
areas to move into navigable waters. Thus, the
United States argued, its position was entitled to
judicial deference under Chevron. The United States
also defended Congress’s grant of jurisdiction over
such wetlands as an appropriate exercise of power
under the Commerce Clause. Under United States v.
Lopez12 the government argued, either (1) “waters of
the United States” were channels of interstate
commerce, or (2) the regulation of those waters
constituted an activity having a “substantial effect”
on commerce.
The Sixth Circuit had agreed with the United States,
at one point essentially eliminating the concept of
“substantial” from the nexus requirement for
adjacent wetlands to be considered part of “waters of
the United States.”
factors as economics, aesthetics, recreation,
and in general, the needs and welfare of the
people.” Op at 3.13
■
"[Thus,] establishing that wetlands such as
those at the Rapanos and Carabell sites are
covered by the Act requires two findings:
First, that the adjacent channel contains a
“water of the United States,” (i.e., a
relatively permanent body of water
connected to traditional interstate, navigable
water); and second, that the wetland has a
continuous surface connection with that
water, making it difficult to determine
where the water ends and the wetland
begins." Op. at 11.
■
The plurality’s opinion minimized the
importance of the phrase “significant nexus”,
which the Court had referenced in SWANCC,
explaining it was only a characterization of the
exercise of discretion required in the Riverside
Bayview case to determine the precise point at
which wetlands that are adjacent to a navigablein-fact water become “waters of the United
States.”
■
Justice Kennedy, concurred in the
judgment but strongly disagreed with the
plurality’s analysis. He emphasized the
“significant nexus” between wetlands and
navigable-in-fact water required to assert
jurisdiction over the wetlands, stating his view
as follows:
WHAT DID THE SUPREME COURT SAY?
The Supreme Court’s decision was a classic split
decision. A plurality of four conservative justices,
led by Justice Scalia, provided the lead opinion
which sharply criticized the federal agencies’
interpretations of the CWA. Justice Kennedy joined
in the result and filed a narrower concurring opinion.
The resulting five-to-four majority of the Court
vacated the lower court decisions, reflecting the
following positions:
■
■
All five justices supporting the judgment
agreed that there must be a “significant
nexus” between the area to be regulated and a
traditional navigable water, and that the lower
courts did not apply that standard properly.
The plurality (Justice Scalia, writing for
Chief Justice Roberts, and Justices Thomas
and Alito) concluded that the Corps had
improperly expanded its jurisdiction over
the past 30 years by defining “waters of the
United States” to include wetlands not
adjacent to navigable-in-fact waters,
exceeding the plain meaning of the statute’s
text, and prompting the observation:
"In deciding whether to grant a
permit, the [Corps] exercises the discretion
of an enlightened despot, relying on such
12
13
3
The plurality concluded:
"…the Corps jurisdiction over wetlands depends
upon the existence of a significant nexus between
the wetlands in question and navigable waters in
the traditional sense. The required nexus must be
assessed in terms of the statute’s goals and
purposes…Accordingly, wetlands possess the
requisite nexus, and thus come within the
statutory phrase “navigable waters,” if the
wetlands, 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. When in contrast,
wetlands effects on water quality are speculative
or insubstantial, they fall outside the zone fairly
encompassed by the statutory term 'navigable
waters.'" Op at 30.
514 U.S. 549 (1995).
33 C.F.R. § 320.4(a) (2004).
Kirkpatrick & Lockhart Nicholson Graham
LLP
|
JUNE 2006
When the Corps seeks to regulate wetlands
adjacent to navigable-in-fact waters, it may rely
upon adjacency to establish jurisdiction. Absent
more specific regulations, however, the Corps
must establish a significant nexus on a case-bycase basis when it seeks to regulate wetlands
based on adjacency to non-navigable tributaries.
Given the potential overbreadth of the Corps’
regulations, this showing is necessary to avoid
unreasonable applications of the statute." Op. at
31.
and Riverside Bayview decisions as establishing a
“significant nexus” test that turns on the
ecological significance of the wetlands in
question. The dissenters would defer to the
Corps’ interpretation and application of this term,
which has, as was noted in various opinions, been
inconsistent at best.
■
Future cases will likely turn on expert opinions
concerning the nature of connections between
wetland areas and navigable waters or their
surface tributaries. Agency “expert” opinions
addressing only hydrological connections between
areas sought tobe regulated under the 404
program, and a “traditional” navigable water may
no longer be sufficient to justify CWA
jurisdiction. Similarly, agency opinions regarding
the ecological significance of a minimal
hydrological connection may also be insufficient
to justify CWA jurisdiction. Landowners will still
need to present expert testimony regarding the
nature and tenuousness of such connections.
■
Entities seeking to challenge CWA permit
decisions may have stronger legal and factual
arguments to make.
■
EPA and the Corps must consider whether their
regulations defining jurisdictional waters need to
be reconsidered, especially in light of the
concurring opinion by the Chief Justice, and
especially if the Corps and EPA want lower courts
to defer to their expertise. There will likely be
much debate within the agencies regarding
whether those regulations should reflect the
plurality’s approach or that of Justice Kennedy.
■
Those decisions that had previously been
described as representing the “majority” of case
law – including Headwaters, Rueth, Deaton, and
Needham – may no longer be controlling
precedent in their respective circuits.
■
Although Rapanos focused on issues under
section 404 of the CWA, the same basic analysis
follows through the remainder of the statute,
because the term “waters of the United States”
defines the scope of not only dredge and fill
permits, but also NPDES discharge permits and
federal water quality standards.
■
Rapanos may well signal a renewed interest and
vigor behind state regulatory programs. Although
the scope of federal water quality regulation may
be trimmed by Rapanos, state programs rest on
different and often broader state constitutional
Justice Kennedy concluded the lower courts did not
apply that standard properly, stating: “[a]bsent some
measure of the significance of the connection for
downstream water quality, this standard [employed
in Rapanos] was too uncertain…mere hydrological
connection should not suffice in all cases.” Op. at
32.
■
The dissent (Justice Stevens, joined by Justices
Souter, Ginsburg, and Breyer) concluded that the
lower court decisions applied the right test –
requiring a significant nexus – and properly
deferred to the Corps’ expertise regarding what
that means and whether it existed between the
areas to be regulated and traditional navigable
waters.
WHAT DOES RAPANOS/CARABELL MEAN?
The Court’s decision is interesting both for what is
decided, and for the open questions left for future
cases. The key points, we believe, are:
■
■
4
The Court narrowed the jurisdiction historically
asserted by the Corps, holding that a mere
hydrological connection is not sufficient to
establish the “significant nexus” required for
wetlands to be “waters of the United States,” and
criticized the Corps’ regulations for their
overbreadth.
The split decision provides limited authoritative
interpretation of CWA that will end these
controversies. As pointed out by Chief Justice
Roberts in his concurring opinion, no opinion
commanded a majority of the Court on precisely
how to read Congress’ limits on the reach of the
CWA, leaving regulated entities and the courts to
“feel their way on a case-by-case basis.” On the
one hand, the plurality of justices read section 404
as applying only to wetlands with a “continuous
surface connection to bodies that are ‘waters of
the United States’ in their own right…” On the
other hand, Justice Kennedy reads the SWANCC
Kirkpatrick & Lockhart Nicholson Graham
LLP
|
JUNE 2006
police powers and frequently broader statutory
provisions. Thus, while the Corps and EPA may
not be able to regulate wetlands and waters that
are not directly or substantially connected to
surface streams and rivers, state programs may
well reach such wetlands and waters. Regulated
entities may anticipate a renewed push for more
vigorous enforcement of those state-level
programs.
At the same time, this decision contains analysis that
touch upon issues ranging from federalism, to the
deference due federal agencies, to the use of
legislative history. All may be important not only to
how the wetlands programs will be administered, but
also to how the Court views these kinds of programs.
Future alerts will address these wide-ranging issues.
Barry M. Hartman
bhartman@klng.com
202.778.9338
R. Timothy Weston
tweston@klng.com
717.231.4504
John F. Spinello, Jr.
jspinello@klng.com
973.848.4061
Morey Barnes, summer associate, contributed to this
K&LNG Alert.
If you have questions or would like more information about K&LNG’s Environmental Practice, please contact
one of our lawyers listed below:
BOSTON
Michael DeMarco
NEWARK
617.951.9111 mdemarco@klng.com
William H. Hyatt, Jr.
DALLAS
NEW YORK
Robert Everett Wolin 214.939.4909 rwolin@klng.com
Donald W. Stever
HARRISBURG
PITTSBURGH
R. Timothy Weston
717.231.4504 tweston@klng.com
LOS ANGELES
Frederick J. Ufkes
212.536.4861 dstever@klng.com
412.355.8612 rhosking@klng.com
SAN FRANCISCO
310.552.5079 fufkes@klng.com
Edward P. Sangster
MIAMI
Daniel A. Casey
Richard W. Hosking
973.848.4045 whyatt@klng.com
415.249.1028 esangster@klng.com
WASHINGTON
305.539.3324 dcasey@klng.com
Barry M. Hartman
202.778.9338 bhartman@klng.com
www.klng.com
BOSTON • DALLAS • HARRISBURG • LONDON • LOS ANGELES • MIAMI • NEWARK • NEW YORK • PALO ALTO • PITTSBURGH • SAN FRANCISCO • WASHINGTON
Kirkpatrick & Lockhart Nicholson Graham (K&LNG) has approximately 1,000 lawyers and represents entrepreneurs, growth and middle market companies, capital
markets participants, and leading FORTUNE 100 and FTSE 100 global corporations nationally and internationally.
K&LNG is a combination of two limited liability partnerships, each named Kirkpatrick & Lockhart Nicholson Graham LLP, one qualified in Delaware, U.S.A. and
practicing from offices in Boston, Dallas, Harrisburg, Los Angeles, Miami, Newark, New York, Palo Alto, Pittsburgh, San Francisco and Washington and one
incorporated in England practicing from the London office.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in
regard to any particular facts or circumstances without first consulting a lawyer.
Data Protection Act 1988—We may contact you from time to time with information on Kirkpatrick & Lockhart Nicholson Graham LLP seminars and with our regular
newsletters, which may be of interest to you. We will not provide your details to any third parties. Please e-mail london@klng.com if you would prefer not to receive
this information.
© 2006 KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP. ALL RIGHTS RESERVED.
Kirkpatrick & Lockhart Nicholson Graham
LLP
|
JUNE 2006