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ENVIRONMENTAL LAW — Wetlands No. 99-3500; United States District Court (DNJ); opinion by Ackerman, U.S.D.J.; filed January 15, 2003. DDS No. 17-7-2594 I. Plaintiff FD&P Enterprises is a corporation engaged in providing freight transportation services to the New York-New Jersey metropolitan area. Its 100-acre property is located on Secaucus Road in Jersey City. FD&P hopes to construct an intermodal rail facility on its property, which would be used for transferring cargo from trains to trucks. The western border of the property is adjacent to Penhorn Creek, a nonnavigable tributary of the Hackensack River. The Hackensack River is a navigable body of water used in interstate commerce. The United States Army Corps of Engineers has deemed 77 acres of the FD&P property to be wetlands, as defined in 33 C.F.R. � 328.3(b). As part of the construction of the intermodal facility, FD&P plans to fill 53.5 acres of the wetlands on its property. FD&P applied to the Corps for a permit under � 404 of the Clean Water Act in 1992. FD&P seeks summary judgment on count II of its amended complaint, alleging that the Corps lacks jurisdiction over the wetlands in question. II. Section 404(a) of the CWA, 86 Stat. 884, as amended, 33 U.S.C. � 1344(a), regulates the discharge of dredged or fill material into “navigable waters.” Under the statute, the Corps may issue permits “for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” 33 U.S.C. � 1344 (a) (2002). The statute defines the term “navigable waters” as “the waters of the United States, including the territorial seas.” 33 U.S.C. � 1362(7) (2002). United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 106 S.Ct. 455, 88 L.Ed.2d 419 (1985), concluded that, given “the inherent difficulties of defining precise bounds to regulable waters,” wetlands that are not themselves navigable bodies of water may nonetheless be regulated under the CWA when they are adjacent to navigable waters. It is important to note that the Court in Riverside Bayview explicitly declined to extend its holding to cases involving wetlands adjacent to nonnavigable waters. Despite this limiting language, most courts, including the Third Circuit, held that the reasoning of Riverside Bayview extended CWA jurisdiction to wetlands adjacent to nonnavigable tributaries that flowed into navigable waters. Until recently, therefore, the law on this issue was relatively clear. The Supreme Court’s decision in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159 (2001), however, has limited the scope of the CWA. Solid Waste involved several ponds that had formed in pits that were originally part of a sand and gravel mining operation. Although the ponds were completely isolated from any navigable waters and the entire area in question was within Illinois, the government argued that it had jurisdiction over the area under an Army Corps of Engineers regulation known as the “Migratory Bird Rule.” The Migratory Bird Rule states that � 404(a) of the CWA extends to intrastate waters “[w]hich are or would be used as habitat by other migratory birds which cross state lines.” Id. at 164. The Supreme Court held that federal regulation of the waters at issue in Solid Waste under the Migratory Bird Rule exceeded the authority granted to the Corps under the CWA. In reaching this conclusion, the Court did not overturn Riverside Bayview, but instead reasoned as follows: In order to rule for [the government], we would have to hold that the jurisdiction of the Corps extends to ponds that are not adjacent to open water. But we conclude that the text of the statute will not allow this. Id. at 167-68. Courts interpreting the scope of Solid Waste have essentially split into two camps. Under one reading, the Solid Waste case represents a significant shift in the Court’s CWA jurisprudence, calling into question the continuing validity of CWA jurisdiction over waters that are not either actually navigable or directly adjacent to navigable waters. On the other hand, an alternative reading of Solid Waste holds that the case applied only to “isolated waters,” and thus would permit continued CWA jurisdiction over all waters that have at least a minimal hydrological connection to navigable waters. A reading of Solid Waste that would confine CWA jurisdiction solely to navigable waters and those waters one step removed from navigable waters could ultimately serve to undermine the basic purposes of the CWA. Indeed, courts that have read Solid Waste as continuing to permit broad CWA jurisdiction doubtless fear the specter of pollution harmful to the “chemical, physical, and biological integrity” of navigable waters, yet remaining beyond the reach of the CWA. As Justice John Paul Stevens pointed out in his dissent, the CWA represented a “shift in the focus of federal water regulation from protecting navigability toward environmental protection.” 531 U.S. at 179. Therefore, 33 U.S.C. � 1362(7), which defined “navigable waters” as “waters of the United States,” essentially deleted the navigability requirement from the statute. Id. at 182. Thus, in the pre- Solid Waste world, the CWA conferred jurisdiction over any water so long as there was even the most minimal hydrological connection between that water and navigable waters. Nevertheless, the CWA must be read in light of the Supreme Court’s most recent interpretation of that statute. Solid Waste represents a clear statement from the Supreme Court on the scope of CWA jurisdiction. Held: In light of Solid Waste, the “hydrological connection” test is no longer the valid mode of analysis. In this context, the language of Chief Justice William Rehnquist’s opinion is instructive: it is “the significant nexus between the wetlands and ‘navigable waters’” that must inform the reading of the CWA. 531 U.S. at 168. Because, as Justice Stevens points out, Solid Waste has substantially altered the meaning of “navigable waters” in the CWA, a “significant nexus” must constitute more than a mere “hydrological connection.” Thus, the question presented is whether there is a substantial nexus — beyond a mere hydrological connection — between the FD&P property and the navigable waters of the Hackensack River. Both parties agree that the wetlands on the FD&P property drain into Penhorn Creek, which flows into the Hackensack River one mile away from the wetlands. As a general matter, wetlands stabilize and incorporate inorganic sediments and chemicals, a process that benefits downstream waters. The Corps argues that, given the proximity of the wetlands on the FD&P property to the Hackensack River, filling of the wetlands would have an injurious impact on the river by increasing the sediments and chemicals flowing into the river. The Corps further argues that because the FD&P property is within the 100-year flood plain, the proposed fill will displace flood storage capacity, increasing the likelihood of rain-induced flooding. FD&P, on the other hand, asserts that the wetlands on the property do not provide any environmental benefits to either Penhorn Creek or the Hackensack River, and therefore the placement of fill onto the wetlands will not be detrimental to the river. In fact, FD&P argues, placement of fill will actually enhance the water quality of Penhorn Creek and the Hackensack River, because FD&P plans to install catch basins and storm-water retention basins, which will trap sediment from the property. Moreover, FD&P argues that because the property is located at the lowest point in the Meadowlands watershed, the wetlands do not provide any flood storage function, and therefore filling the property will not impact the likelihood of flooding. In light of Solid Waste, the court was strongly tempted to grant summary judgment in favor of FD&P. If, as FD&P asserts, the filling of the wetlands will not be detrimental to the Hackensack River, then there is no substantial nexus, and therefore no CWA jurisdiction. Nevertheless, the evidence submitted by the parties does not permit the court to conclude that no genuine issue of material fact exists as to the effect of the filling of the wetlands on the Hackensack River. The Corps has submitted sufficient evidence such that a reasonable jury could find that the filling of the wetlands will have a substantial injurious impact on the chemical, physical, and/or biological integrity of the Hackensack River. Under these circumstances, there would be a substantial nexus between the wetlands and the river, and the Corps would have jurisdiction under the CWA. Because the court cannot resolve this factual issue based on the record before it, a genuine issue of material fact exists as to whether there is a substantial nexus between the FD&P wetlands and the Hackensack River. Therefore, this court must deny FD&P’s motion for summary judgment. III. FD&P additionally argues that the Corps’ assertion of jurisdiction over the FD&P wetlands violates the commerce clause. FD&P’s purpose for seeking the � 404 permit is to construct a commercial facility. Indeed, this commercial facility would be engaged in interstate freight transportation services. As such, FD&P’s argument that its filling activities would not “substantially affect” interstate commerce must fail. — Digested by Steven P. Bann [The slip opinion is 16 pages long.] For plaintiff — Marc D. Haefner, Agnes Antonian and Kevin J. Coakley (Connell Foley). For defendant — John C. Cruden, Scott J. Jordan and Steven E. Rusak (U.S. Department of Justice, Environmental and Natural Resources Division, Washington, D.C.), Robert J. Cleary and Susan Handler-Menahem (U.S. Attorney’s Office) and James G. Palmer (U.S. Army Corps of Engineers, New York District).

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