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For anyone hoping for clear direction from the U.S. Supreme Court on the question of the extent of federal jurisdiction over adjacent wetlands, the court’s recent decision in the consolidated cases, Rapanos v. United States, 04-1034, and Carabell v. U.S. Army Corps of Engineers, 04-1384, is a disappointment. Unable to muster a majority opinion, the court split 4-1-4, divided equally between Justice Antonin Scalia’s plurality and Justice John Paul Stevens’ dissent, with Justice Anthony Kennedy taking retiring Justice Sandra Day O’Connor’s traditional centrist role on the court. The issue was whether wetlands adjacent to non-navigable tributaries were “waters of the United States” under the Clean Water Act, and therefore subject to jurisdiction of the Army Corps of Engineers. While the plurality would have significantly curtailed federal jurisdiction, the dissent favored maintaining the status quo. Although Justice Kennedy agreed with the plurality that the cases should be remanded for further proceedings, he rejected Justice Scalia’s narrow view that “waters of the United States” included “only those relatively permanent, standing or continuously flowing bodies of water, ‘forming geographic features’ that are described in ordinary parlance as ‘streams[,] … oceans, rivers, [and] lakes.” However, Justice Kennedy also rejected the dissent’s position that the court should defer jurisdictional questions to the Army Corps. Instead, he devised a new test. Citing legislative intent and the primary purpose of the Clean Water Act, Justice Kennedy stated that in order to assert jurisdiction over wetlands adjacent to non-navigable tributaries, the Army Corps must show a “significant nexus” between the wetlands and traditional navigable waters (i.e., navigable-in-fact): “[W]etlands 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.’” Given the court’s 4-1-4 split, although it is not mandated, it is likely that lower courts will follow Justice Kennedy’s opinion and apply his significant nexus text in accordance with Marks v. United States, 430 U.S. 188, 193 (1977). Before examining the court’s decision, it is worth noting what the court did not decide. The Army Corps’ jurisdiction over wetlands adjacent to traditional navigable waters � i.e., waters that are subject to the ebb and flow of the tide, or waters that are presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce (33 CFR ��.3(a)(1)) � is not affected. The Supreme Court previously decided that issue in United States v. Riverside Bayview Homes, 474 U.S. 121 (1985), when it concluded that the Army Corps had jurisdiction over such wetlands. Nor does last month’s decision affect the Supreme Court’s determination in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159 (2001) (“ SWANCC“), that the Army Corps did not have jurisdiction over isolated, intrastate, non-navigable waters based solely on their use or potential use as habitat by migratory birds (the “Migratory Bird Rule”). Thus, wetlands that fall into one of these categories will still be subject to the same jurisdictional analysis that was in effect prior to the court’s recent ruling. Turning to the facts of the cases, John Rapanos wanted to develop property containing wetlands. Rather than apply for a permit, he filled a portion of the wetlands. When the federal government sued, Rapanos contended the Army Corps did not have jurisdiction, because none of the wetlands abut traditional navigable water. For example, one site connected to a drain that flowed into a creek, which, in turn, flowed into a navigable river between 11 and 20 miles from the property. The government presented evidence that the wetlands “provided ecological functions in terms of ‘habitat, sediment trapping, nutrient recycling, and flood peak diminution.’” The U.S. District Court found that Rapanos had violated the Clean Water Act and the Sixth Circuit U.S. Court of Appeals affirmed. Carabell applied for a permit to fill wetlands on property he wanted to develop. Those wetlands bordered a ditch (separated by a four-foot man-made berm) that flowed into a drain, which, in turn, flowed into a creek that flowed into a lake. When the Army Corps denied the permit, Carabell sued. Justice Scalia’s plurality opinion (joined by Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito), characterized the Army Corps as an “enlightened despot” and asserted that under the Corps’ view of its jurisdiction, “storm drains, roadside ditches, ripples of sand in the desert that may contain water once a year and lands that are covered by floodwaters once every 100 years” are waters of the United States. Examining the plain text of the Clean Water Act, the plurality concluded that “ only those wetlands with a continuous surface connection to” traditionally navigable waters are adjacent wetlands subject to Army Corps jurisdiction. Thus, the act covers only those wetlands that are adjacent to a “relatively permanent body of water connected to traditional interstate navigable waters” and if the wetlands have “a continuous surface connection with that water, making it difficult to determine where the ‘water ends’ and the ‘wetland’ begins” (emphasis added). This restrictive standard would deprive the Army Corps of jurisdiction over millions of acres of wetlands adjacent to tributaries. To Justice Kennedy, the plurality opinion is “an unprecedented reading of the Act,” which “is inconsistent with the Act’s text, structure, and purpose,” and gives insufficient deference to Congress’ purposes in enacting it and to the authority of the executive implementing it. Justice Kennedy focused on the objective of the act to “restore and maintain the chemical, physical, and biological integrity of the Nations’ waters.” He observed that “it may be the absence of an interchange of waters … that makes protection of the wetlands critical to the statutory scheme,” noting that “[s]cientific evidence indicates that wetlands play a critical role in controlling and filtering runoff,” rather than a continuous surface connection with other jurisdictional waters as suggested by the plurality. Nor did he agree with Justice Stevens’ deferential approach, noting that the “the dissent would permit federal regulation whenever wetlands lie alongside a ditch or drain, however remote and insubstantial, that eventually may flow into traditional navigable waters.” In Justice Kennedy’s view, the phrase “navigable waters” has to be given some significance or meaning. A significant nexus could be established by showing that the wetlands “significantly affected the chemical, physical, and biological integrity” of navigable waters. A mere hydrologic connection would not suffice without showing the significance of that connection for downstream water quality. On the other hand, “[g]iven the role wetlands play in pollutant filtering, flood control, and runoff storage, it may well be the absence of a hydrologic connection (in the sense of interchange of waters) that shows the wetlands’ significance for the aquatic system.” Justice Kennedy suggested that the Corps could adopt new regulations, which “identif[ied] categories of tributaries that, due to their volume of flow (either annually or on average), their proximity to navigable waters, or other relevant considerations, are significant enough that wetlands adjacent to them are likely, in the majority of cases, to perform important functions for an aquatic system incorporating navigable waters.” Absent such regulations, the Army Corps must show a significant nexus on a case-by-case basis when seeking to regulate wetlands adjacent to non-navigable tributaries. As a practical matter, this means the Army Corps will have to include in the record sufficient evidence that shows that the wetlands have a significant impact on water quality of navigable water in order to establish jurisdiction. Just how much evidence will be sufficient is an open question. Speculative or insubstantial effects on water quality are insufficient to establish the requisite nexus. Conditional language in permit evaluations such as the language used in Carabell (e.g., “potential ability,” “possible flooding”), “could suggest an undue degree of speculation.” However, Justice Kennedy observed that on remand much of the same evidence already presented in Rapanos and Carabell should help establish the requisite significant nexus with navigable waters. At this point it is difficult to predict the effects of the court’s decision. The real impact will depend in large part on regulations the Army Corps may adopt in response (which could take more than a year). The Army Corps may adopt criteria for determining a significant nexus, which generally preserve the Corps’ broad jurisdiction developed over the last 30 years. However, the Supreme Court’s split decision may give the Bush administration an opportunity to scale back the Army Corps’ jurisdiction over wetlands by revising long-established regulations. Corps headquarters has advised its districts not to finalize any jurisdictional determinations until headquarters issues guidance on the Rapanos decision. Even if the Army Corps does issue new guidance or regulations restricting its jurisdiction, landowners should keep in mind that they may be revised again by a new administration in 2009. Most states, including California, do not currently have a comprehensive wetlands permitting program; however, California regulators intend to regulate nonjurisdictional wetlands as waters of the state. Further, Congress has pending the Clean Water Authority Restoration Act of 2005 (H.R. 1356, S. 912), a bipartisan bill responding to the Supreme Court’s decision in SWANCC. The bill re-defines waters of the United States broadly as “all waters subject to the ebb and flow of the tide, the territorial seas, and all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds, and all impoundments of the foregoing, to the fullest extent that these waters, or activities affecting these waters, are subject to the legislative power of Congress under the Constitution.” It also eliminates from the Clean Water Act the words “navigable waters” and replaces them with “waters of the United States.” Although the bill has languished in committee for a year, after the Rapanos decision came down, calls for enacting that legislation began again. It is unlikely, however, that Congress will take action before the fall midterm elections. In the short term, it appears that the court’s decision in Rapanos and Carabell has temporarily stalled final jurisdictional determinations for wetlands adjacent to non-navigable tributaries until the Army Corps issues new guidance. If the Army Corps’ reaction to SWANCC is any guide, it is more likely to be “business as usual” (with each of the Corps’ districts interpreting any new guidance or regulations in their traditional way), rather than a significant reduction in Corps jurisdiction. Until the Army Corps issues its guidance and implements new regulations, one thing is certain: the decision should be a boon to wetlands and hydrology consultants, as land owners and the Corps attempt to implement Justice Kennedy’s significant nexus test and show on a case-by-case basis whether such wetlands have an impact on water quality of traditional navigable waters. Thiele R. Dunaway is an attorney in Wendel, Rosen, Black & Dean’s land use and litigation practice groups in Oakland. Jonathan W. Redding is chair of the firm’s environmental group. For more information, visit www.wendel.com. � Practice Center articles inform readers on developments in substantive law, practice issues or law firm management. Contact Sheela Kamath with submissions or questions at [email protected].

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