ALI-ABA Course of Study Clean Water Act: Law and Regulation The - - PDF document

ALI-ABA Course of Study Clean Water Act: Law and Regulation The Clean Water Act in the Supreme Court: Recent Developments Timothy S. Bishop Mayer, Brown, Rowe & Maw LLP Chicago, Illinois Washington, D.C. October 27-29, 2004

The Clean Water Act in the Supreme Court: Recent Developments By Timothy S. Bishop*, Mayer, Brown, Rowe & Maw LLP The Supreme Court has in recent Terms waded into two jurisdictional issues under Clean Water Act Sections 402 and 404: the scope of the federal government’s “geographic” jurisdiction over water and, with regard to jurisdiction over “activities,” the meaning of the key statutory term “addition.” 1. Developments in Geographic Jurisdiction: “Navigable Waters.” In SWANCC1 the Court curtailed the Corps’ and EPA’s “geographic” jurisdiction

• ver “navigable waters,” announcing that “isolated” waters are not within the CWA

simply because migratory birds land on them and those birds have some connection to interstate commerce through hunting and bird watching. In so holding, the Court, 5-4, adopted the view that the constitutional grounding of the CWA is Congress’s Commerce Clause power over commercial navigation, not the alternative “instrumentalities of commerce” or “substantial connection with commerce” strands of the commerce power. Properly understood, SWANCC means that because CWA jurisdiction rests on Congress’s power over navigation, isolated, intra-state, non-navigable waters may not be regulated by the federal government at all under the statute. In that regard, the Court’s decision in SWANCC is consistent with its renewed insistence, since Lopez and Morrison, that the Commerce Clause has teeth and that the limits of that power are to be rigorously policed by the courts using close analysis of the relevant commerce connection.2 Since SWANCC many state and local governments have moved to fill the jurisdictional gap over isolated waters, exercising power that Congress intended in the CWA to reserve to the state and local governments best placed to understand the needs of local environments and economies.3 Not content, however, with the federalist allocation

• f power ordained by Congress and confirmed by the Court in SWANCC—or with other

powers by which the federal government could readily protect isolated waters, such as the

* In the interests of full disclosure, the author argued SWANCC, Borden Ranch, and SFWMD for

petitioners in the Supreme Court and represented petitioner in Newdunn and GDF Realty, all cases discussed in this article.

1 Solid Waste Agency of Northern Cook County v. United States Army Corps of Eng’rs, 531 U.S.

159 (2001).

2 A certiorari petition currently pending before the Court, GDF Realty Invs. v. Norton, No. 03-

1619, tests the Court’s willingness to extend its reinvigorated Commerce Clause jurisprudence to environmental regulation, there the Endangered Species Act.

3 See 33 U.S.C. § 1251(b) (expressing Congress’s intent to “preserve and protect the primary

responsibilities and rights of States to prevent, reduce, and eliminate pollution” and “plan the development and use * * * of land and water resources”).

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spending power—the Corps and EPA have taken the litigating position that there is virtually no such thing as an isolated water. Stretching the words of the Supreme Court in SWANCC that only waters “adjacent” to or having a “significant nexus” with navigable waters fall within Sections 402 and 404,4 the Corps and EPA have asserted broad

• jurisdiction. According to the Corps’ and EPA’s litigators, whose position has generally

been accepted by the lower courts, any physical surface connection at all between non- navigable water and a navigable water—no matter how remote or intermittent or ephemeral—is enough of a nexus to bring that water within the scope of the NPDES and dredge-and-fill permit programs. Landowners and amicus industry groups challenged this strained interpretation of SWANCC and the CWA this year in three certiorari petitions from the Fourth Circuit (Newdunn, Deaton) and Sixth Circuit (Rapanos).5 Deciding these cases together, the Supreme Court denied certiorari in all three. Not too much should be read into these denials, however. The agencies and lower courts were for years similarly unanimous in their support of the migratory bird rule, and the Supreme Court denied certiorari to address the propriety of that rule before holding it baseless in SWANCC.6 The Fifth Circuit, interpreting parallel “navigable waters” language in the Oil Pollution Act in Rice

• v. Harken Exploration Co. and In re Needham, has disagreed with the expansive view

that essentially all water is “adjacent” to navigable water.7 The Supreme Court is likely to take up this important and contentious issue if the Fifth Circuit or another court of appeals rejects the government’s position in a CWA case, or once the issue has otherwise fully percolated in the lower courts. In the meantime, the government’s aggressive litigating position is not uniformly reflected in jurisdictional determinations in the field.8

4 531 U.S. at 167-68, 172-74. 5 Treacy v. Newdunn Assocs., LLP, 344 F.3d 407 (4th Cir. 2003), cert. denied, 124 S. Ct. 1874

(2004); United States v. Deaton, 332 F.3d 698 (4th Cir. 2003), cert. denied, 124 S. Ct. 1874 (2004); United States v. Rapanos, 339 F.3d 447 (6th Cir. 2003), cert. denied, 124 S. Ct. 1875 (2004). The Question Presented in Newdunn, for example, was “whether federal Clean Water Act jurisdiction over ‘navigable waters’ extends to wetlands that are not adjacent or contiguous to open waters but from which rainwater runoff may occasionally reach navigable waters located miles away through a series of manmade, indirect, ephemeral, and intermittent surface water connections.”

6 See Cargill, Inc. v. United States, 516 U.S. 955 (1995). 7 Rice v. Harken Exploration Co., 250 F.3d 264 (5th Cir. 2001); In re Needham, 354 F.3d 340

(5th Cir. 2003).

8 See Petition for Writ of Certiorari at 19-23, Newdunn Assocs., LLP v. United States Army

Corps of Eng’rs, No. 03-637 (U.S. filed Oct. 27, 2003); Supplemental Brief for Petitioners at 1- 2, id. (U.S. filed Mar. 8, 2004); Waters and Wetlands: Corps of Engineers Needs to Evaluate Its District Office Practices in Determining Jurisdiction, Report to the Chairman, Subcommittee on (cont’d)

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2. The “Addition” of Pollutants to Navigable Waters. Permits are required under CWA Sections 402 and 404 only for “discharges” of pollutants or dredge-and-fill material, defined as “any addition of any pollutant to navigable waters from any point source.”9 The Supreme Court has twice taken up the meaning of “addition,” in very different contexts, without yet shedding a great deal of light on the concept. a. Borden Ranch. In Borden Ranch10 the Corps fined the Ranch $1 million for deep plowing in wetland areas to convert pasture land to vineyards and orchard. By breaking up the clay pan, this deep plowing allowed water to drain from the surface to reach the deep roots of vines and fruit trees. But the plowing did not bring new “pollutants” into the wetland from outside. It only moved soil around within the wetland by cutting and turning the soil

• ver. For the Ninth Circuit majority, that was enough to trigger Section 404: “activities

that destroy the ecology of a wetland are not immune from the [CWA] merely because they do not involve the introduction of material brought in from somewhere else.”11 The Supreme Court agreed to review the Ninth Circuit’s surreal opinion that plowing within a wetland to turn over rich native soil for planting constitutes the addition

• f a pollutant. Justice Kennedy, however, recused himself from the case. After oral

argument, the remaining eight Justices deadlocked 4-4 and therefore affirmed the decision below without issuing an opinion. Having failed to resolve this issue in December 2002, the Court is highly likely to take it up again as soon as a case presents itself in which all nine Justices can participate. Knowing this, and seeing the writing on the wall—Justice Kennedy is unlikely to agree to read the “addition” requirement out of the statute—the Corps appears to be settling potential candidates for Supreme Court review on terms extremely favorable to the landowner. b. South Florida Water Management District. The Court’s second “addition” case involves a state agency’s movement of truly navigable water that already contains pollutants. The transformation of central and

(… cont’d) Energy Policy, Natural Resources and Regulatory Affairs of the House Committee on Government Reform, GAO-04-297 (Feb. 27, 2004).

9 33 U.S.C. § 1362(12). 10 Borden Ranch Partnership v. United States Army Corps of Eng’rs, 261 F.3d 810 (9th Cir.

2001), aff’d by an equally divided Court, 537 U.S. 99 (2002). The Borden Ranch case is discussed in more detail in Bishop, Tilley, & Bamzai, Counting the Hands on Borden Ranch, 34

• Envtl. L. Rep. 10040 (2004).

11 261 F.3d at 814-15.

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southern Florida from a swampland during the 19th Century to the ever-more-heavily- populated region it is today required huge engineering projects to contain and control the flow of water. These were prompted by the desire to convert swamps to agricultural and residential use, prevent flooding of the sort that killed thousands of people in the 1920s through 1940s, and maintain fresh water supplies. These massive Corps of Engineers projects succeeded in those regards—the system reportedly worked extremely well to prevent serious flooding during this year’s hurricanes. But they also disrupted the historic flow of water through the Everglades and brought pollutants, especially phosphorus, that began to change the flora and fauna of the region. The damage the engineering caused to the Everglades, a unique and irreplaceable ecological wonder, is now well understood and the United States and Florida are engaged in an $8 billion cooperative enterprise to remedy the problems. That restoration project is the main event, and this case a sideshow—albeit one that threatened to divert resources from restoration to endless wasteful NPDES permitting and litigation. The South Florida Water Management District (the District) operates a canal, the C-11, that collects water from the C-11 basin, which includes agricultural, residential and

• ther uses from which runoff reaches the canal. The canal runs from the Atlantic Coast

west to a levee, on the other side of which is a water conservation area, WCA-3. When water in the canal reaches a certain height, the District turns on the S-9 pump and water from the canal is pumped across the levee into the WCA-3. Historically, the areas east and west of the levee were part of the Everglades and a single body of water. Without the artificial levee, pump, and canal, both areas would again be under water. A common and high aquifer underlies both areas. Water in the canal contains somewhat more phosphorus than water in the conservation area into which it is pumped, as a result of pollutants in the runoff reaching the canal. The Miccosukee Tribe of Indians and an environmental group sued the District, saying that it needed a Clean Water Act Section 402 NPDES permit to operate the S-9 pump, because the pump added pollutants to the navigable waters of the conservation area from a point source. The Tribe prevailed in the district court and Eleventh Circuit, and the United States, asked for its views by the Supreme Court, recommended against the grant of certiorari. The United States argued that, although the Eleventh Circuit got it wrong, it erred for the fact-bound reason that the waters either side of the levee constituted a single water body, and facilities that connect and convey water within a single body of navigable water cannot result in any “addition” of pollutants. Any pollutants are already in the water body. The United States did not consider the factual question whether the C-11 Canal and WCA-3 were a single water body worthy of the Court’s attention. Nevertheless, the Court granted review. The “single water body” ruling. By an 8-1 vote, the Supreme Court set aside the

• rder requiring the District to obtain an NPDES permit, holding that the trial court and

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court of appeals had not identified a legally or factually adequate basis for their rulings.12 In an opinion by Justice O’Connor, the Court ruled that the district court was premature in granting summary judgment to the plaintiffs and remanded the case for further inquiry into whether the conservation area and canal are to be treated as a single body of water, which would obviate the need for an NPDES permit because movement of pollutants within a body of water cannot constitute an “addition” of pollutants to navigable waters.13 The Court’s opinion contains strong hints that the Justices agreed with the United States and District that the canal and water conservation areas were a single water body for purposes of the “addition” analysis. Every fact alluded to in the Court’s opinion supports the District’s claim that a single body of water is at issue: the WCA-3 and C-11 “share a common underlying aquifer,” the artificial dividing levees “continually leak,” “any boundary” between them “is indistinct,” there is “significant mingling” of their waters, and, if the pump were shut down (or the levees removed) the C-11 would flood, creating “a larger water body extending over WCA-3 and the C-11 basin.”14 The Court recognized that these indisputable facts, the last one in particular, “call into question the Eleventh Circuit’s conclusion that [the S-9 pump] is the cause in fact of phosphorous addition to WCA-3.”15 Without the pump and levee system any pollutants would mingle in the waters that would flow as a sheet across the entire area. Though the Supreme Court did not feel it had a sufficient factual record on which to make this determination in the first instance, it clearly indicated that on the basis of the record before it the district court might find that “C-11 and WCA-3 are not meaningfully distinct water bodies.”16 On remand to the trial court, the District will have the opportunity to adduce additional evidence to show that historically, naturally, hydrologically, and legally, the WCA-3 and C-11 form a single water body so that pumping water between them does not trigger NPDES permitting. The “unitary waters theory” ruling. The “single water body” approach was essentially the argument that the United States had made to the Court in its certiorari stage brief. But at the merits stage the United States virtually abandoned that argument in

12 South Fla. Water Management Dist. v. Miccosukee Tribe, 124 S. Ct. 1537 (2004). 13 Id. at 1545 (“The Tribe does not dispute that if C-11 and WCA-3 are simply two parts of the

same water body, pumping water from one into the other cannot constitute an ‘addition’ of

• pollutants. As the Second Circuit put it in Trout Unlimited, ‘[i]f one takes a ladle of soup from a

pot, lifts it above the pot, and pours it back into the pot, one has not “added” soup or anything else to the pot.’ 273 F.3d, at 492.”). Landowners can certainly be expected to argue, in Section 404 dredge-and-fill cases, that this ruling precludes finding that moving soil around within a wetland by deep plowing or otherwise constitutes a regulated “addition” of pollutants.

14 Id. at 1546. 15 Id. 16 Id. at 1547.

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favor of a different and more far reaching analysis, set forth in an amicus brief in support

• f the District. The United States and District argued that Section 402 does not apply

when navigable water containing pollutants is moved around by point sources within the navigable waters. This “unitary waters” theory is based on plain statutory language requiring a permit for any addition from any point source of any pollutant “to navigable waters” (not “any” navigable waters), defined as “the waters of the United States,” as well as on consistent agency practice. On this approach, an addition triggering the Section 402 permit requirement occurs when a pollutant first enters the navigable waters

• f the United States. Once the pollutant is in the navigable waters, it may be moved or

transferred around within the navigable waters without any “addition” occurring that would require a permit. In other words, activities that convey or connect navigable waters were not intended to be encompassed by NPDES. See, e.g., National Wildlife Fed’n v. Gorsuch, 693 F.2d 156, 175 (D.C. Cir. 1982) (an “addition” of pollutants “occurs only if the point source itself physically introduces a pollutant into water from the outside world,” not when polluted water “passes through the [point source] from one body of navigable water * * * to another”). This rule is important not only in Southern Florida, where there are many facilities that connect and convey navigable waters, but throughout the country and especially in the West, where the collection and distribution of water depends on a complex array of systems that connect and convey waters, documented in a number of amicus briefs filed in SFWMD. The District and United States acknowledged that “water control facilities” like the pump in this case can influence water quality, but argued to the Court that Congress intended these issues to be addressed through nonpoint source programs. Section 1314(f)(2)(F), which relates to nonpoint sources of pollution, instructs EPA to assist the States in dealing with “pollution resulting from * * * changes in the movement, flow, or circulation of any navigable waters * * * including changes caused by the construction of dams, levees, channels, causeways, or flow diversion facilities.” Instead of requiring point source operators to redress urban and agricultural runoff, “these problems are more sensibly addressed through water resource planning and land use regulations, which attack the problem at its source.”17 While setting forth in a balanced manner the parties’ arguments concerning the unitary waters approach, the Court declined to resolve the case on that basis, stressing that the United States and District never made the argument in those terms until late in the litigation in the Supreme Court.18 The Court stated that on remand the District will be entitled to contend that, as a matter of law, the movement of navigable waters containing pollutants into other navigable waters through pumps and other diversions never requires a permit: Essentially, the Court wants this argument to further percolate in trial and

17 Brief for the United States as amicus curiae in SFWMD, at 27. 18 124 S. Ct. at 1543-45.

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appellate courts (or be committed by the agencies to new regulations) before it may rule

• n it at a later date. The Court’s opinion is entirely noncommital on the Court’s view of

the merits of the arguments made as to this issue—so assiduously so that it seems clear that Justice O’Connor was writing to get the votes of Justices who had expressed very different opinions on the merits of this issue at the post-argument Conference. The SFWMD case is currently before the Eleventh Circuit, from whence it will presumably be remanded—with or without opinion—to the trial court for resolution of the issues left open by the Supreme Court. The “unitary waters” issue has also been raised by the City of New York in its penalty-phase-only appeal to the Second Circuit of the $5.75 million penalty imposed on the City for moving water without an NPDES permit.19 It is unclear, however, whether the court of appeals in that case, which has yet to be argued, will be prepared to reconsider its previous liability ruling.

19 Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New York, 244 F. Supp. 2d 41

(N.D.N.Y. 2003), appeal pending. The Second Circuit previously affirmed the City’s liability for failing to get an NPDES permit, on a theory completely inconsistent with the position taken by the United States in SFWMD. 273 F.3d 481 (2d Cir. 2001).