The 2015 regulation revising federal jurisdiction over wetlands and streams, promulgated by the Environmental Protection Agency (the EPA) and U.S. Army Corps of Engineers (the Corps), is currently in litigation and has been enjoined. This rule, defining "waters of the United States" or "WOTUS" for purposes of the Clean Water Act (CWA), is extremely controversial. Multiple lawsuits are pending in district and appellate courts. Congress has held hearings and introduced legislation to set aside the regulation. The President promises to veto any such legislation. Hardly a week passes without some new event involving the "WOTUS" regulation.
So what governs now, and what will govern for the foreseeable future? We offer this brief guidance free of the noise of pending judicial and legislative action.
- The new regulation would have expanded federal jurisdiction in a number of ways. It was scheduled to take effect August 28, 2015, but IS NOT IN EFFECT anywhere in the nation.
- Litigation schedules are hard to predict, but it appears that, absent a settlement, federal litigation over the new regulation (and the injunction against the rule) will continue throughout 2016.
- Jurisdiction now is determined using Federal Guidance and the results of several federal cases that predate the new regulation.
That is it, in a nutshell. However, the federal jurisdiction pre-regulation had very fuzzy edges. The remainder of this Client Alert highlights the issues of federal jurisdiction that are important to consider as the battles over the regulation continue. You should continue to contact your legal and technical advisors for site-specific assistance, as the scope of federal jurisdiction is murky and in flux.
As Much Background as You Need
More than 40 years after its passage, the CWA still remains a mystery in some crucial respects. Specifically, the most important question remains unanswered: What bodies of water are covered by the law? The CWA covers discharges into "navigable waters," which is defined in the statute as "waters of the United States, including the territorial seas." See 33 U.S.C. §§ 1311(a) & 1362(7), (12)(A). This jurisdictional definition has been the subject of multiple Supreme Court and federal appeals court cases, which have not provided any clear answer.
Regulations defining "waters of the United States" to include "not only actually navigable waters but also … all 'freshwater wetlands' that [are] adjacent to other covered waters" have been on the books since 1975. See United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 123-24 (1985) (Riverside Bayview Homes). The law is well settled that some non-navigable waters, such as wetlands and headwaters of streams, are covered by the law.
What has not been clearly established is whether there is a line in the water (not the sand) where federal CWA jurisdiction ends. At that point, presumably, states could exercise such jurisdiction as needed to protect "WOTUS" from pollution that might originate on land or on non-federal waters. This came to a head in 2006, when the Supreme Court addressed the Corps' assertion of CWA jurisdiction over wetlands "which lie near ditches or man-made drains that eventually empty into traditional navigable waters." Rapanos v. United States, 547 U.S. 715, 729 (2006) (Rapanos). In the particular situation under consideration, a majority of the Court found that there was no such jurisdiction, but without a majority agreeing on the reasons. The plurality opinion, authored by Justice Scalia, asserted that federal jurisdiction existed only where water was permanently present. Justice Kennedy authored a concurrence in which he established a separate governing standard. While there is not unanimous agreement, most circuits agree either that Justice Kennedy's concurrence contains the sole governing standard for whether wetlands may be considered a "water of the United States" under the CWA or that the Kennedy standard is at least as controlling as the plurality's. See United States v. Gerke Excavating, Inc., 464 F.3d 723, 724-25 (7th Cir. 2006); United States v. Bailey, 571 F.3d 791, 799 (8th Cir. 2009).
Justice Kennedy's concurrence established the "significant nexus" test for jurisdiction over "wetlands based on adjacency to nonnavigable tributaries." In regard to jurisdiction over seasonally dry wetlands, Justice Kennedy stated in Rapanos:
[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." Rapanos, 547 U.S. at 780.
Since 2006, the Corps and EPA have applied this "significant nexus" test under a series of Federal Guidance documents. A few federal courts have considered application of the "significant nexus" test, offering some judicial guidance on its meaning. In the absence of the new regulation, the agencies will follow their Guidance documents and the lessons from court decisions.
State of the Law at Present
The few courts that have attempted to apply the "significant nexus" standard to wetlands adjacent to non-navigable tributaries have had to address similar issues.
"Aggregation" means that jurisdiction over wetlands is determined "in combination with similarly situated lands" – i.e., it's not just your property that is evaluated.
The significant nexus standard requires the government to show that a wetlands' functions "significantly affect the chemical, physical, and biological integrity of other covered waters." This analysis, however, is not necessarily confined solely to the functions of the portion of wetlands at issue in a case. Instead, adopting the ecological truism that alteration of any given portion may affect the entire body, the court may examine the functions performed by an entire wetlands formation to determine if jurisdiction is proper.
In Precon Development Corp., the developer sought to fill a 4.8-acre section of wetlands adjacent to a man-made ditch. Precon Development Corp., Inc. v. U.S. Army Corps of Engineers, 633 F.3d 278, 282 (4th Cir. 2011) (Precon I). The man-made ditch joined with a series of related ditches downstream that eventually emptied into a jurisdictional river approximately seven miles away. In analyzing whether the site at issue satisfied the significant nexus test, the Corps did not just analyze the functions of the 4.8-acre section alone. Instead, it considered that section in conjunction with the entire 448-acre surrounding wetlands, because "they were historically part of the same naturally defined wetland drainage feature," all of which "were part of a physical, chemical and biological connection of wetlands and streams that existed and had always existed in the area." Id. at 291. (Internal quotations omitted.)
The Fourth Circuit approved of this "aggregation" method, even though the 4.8-acre parcel of wetlands was partially separated from the other wetlands by a man-made berm. The court deferred to the Corps' finding that the berm "did not disconnect these wetlands from surrounding ones, because it neither inhibited wildlife movement nor wetland function." Id. The court similarly deferred to the Corps' emphasis on the "historical" and "natural" layout of the wetlands, finding that man-made improvements were unlikely to separate any single portion from the rest of the larger wetlands formation. Id. at 292.
Nexus can be shown in many ways.
Under the agency's guidance and the court cases, the nexus between wetlands and navigable waters can be shown in a number of ways. The primary method is a hydrological connection, water flowing at least some time during the year between the wetlands and the downstream water. Great distances are not an obstacle to a hydrological nexus.
However, a hydrological connection is not the only type of nexus recognized by the Corps or the courts. Most recently, the Fourth Circuit considered a wetlands' carbon sequestration functions to be "beneficial…for food-chain support and wildlife" downstream and therefore supportive evidence of a nexus. Precon Development Corp., Inc. v. United States Army Corps of Engineers, 603 Fed. Appx. 149, 154 (4th Cir. 2015) (Precon II). In the same case, the Fourth Circuit also approved of the Corps' consideration of species present within the "river system" which used the wetlands and tributary system as a travel corridor and/or feeding, breeding, or nursery area. These species included non-aquatic animals such as "an endangered species of rattlesnake" which inhabited the wetlands and an endangered species of bat that was "nearby" the wetlands. Id.
The "significance" of the nexus is where things get murky.
Ever since this standard was articulated, determining whether a nexus is "significant" has been the most difficult aspect of jurisdictional determinations. Justice Kennedy recognized in Rapanos that some connections were not significant: "When…wetlands' effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term 'navigable waters.'" Rapanos, 547 U.S. at 780. However, does this mean, as the government maintains, that any nexus that is not "speculative or insubstantial" is significant? There has been some limited guidance provided in caselaw.
- "Significance" does not require a quantitative showing.
Since the Raponos concurrence in 2006, everyone has been trying to determine what constitutes a "significant" nexus, in contrast to an insignificant nexus. Justice Kennedy's words offer little clarity. Some have argued that the Corps cannot show a significant nexus without providing specific quantitative measurements related to the wetlands' impact on a navigable water. However, courts have soundly rejected arguments that significance must have some quantitative measure.
The Sixth Circuit has stated that the government's expert witnesses may properly establish a significant nexus by using either quantitative or qualitative evidence. No "laboratory analysis" is necessary. United States v. Cundiff, 555 F.3d 200, 211 (6th Cir. 2009). The Fourth Circuit agrees that no "particular quantitative measurements" are necessary to examine "the comparative relationship between the wetlands at issue, their adjacent tributary, and the traditional navigable waters." Precon I, 633 F.3d at 294. These courts simply require physical evidence – qualitative or quantitative – to determine that a nexus exists and is significant to the covered water. Even those courts that have considered quantitative evidence have also considered ecological, qualitative evidence alongside the empirical data. See Northern California River Watch v. City of Healdsburg 496 F.3d 993, 1000-01 (9th Cir. 2007); U.S. v. Donovan, 661 F.3d 174, 186-87 (3d. Cir. 2011).
- Significance requires an actual – not potential or hypothetical – impact on the navigable water.
The courts have rejected assertions of jurisdiction based on "it could impact" arguments. The government must show that the wetlands at issue "perform significant ecological functions in relation to" the navigable water. Cundiff, 555 F.3d at 211 (emphasis added). It is not enough to analyze the wetlands' functions in isolation. Instead, the evidence must show that the wetlands' functions significantly impact the condition of the navigable water. See, e.g., United States v. Lucas 516 F.3d 316, 327 (5th Cir. 2008) (finding a significant nexus because the evidence showed that the wetlands at issue "control flooding in the area and prevent pollution in downstream navigable waters"); Simsbury-Avon Pres. Soc'y, LLC v. Metacon Gun Club, Inc. 472 F. Supp. 2d 219, 229-30 (finding no significant nexus, despite the proximity of the wetlands to the navigable water, because plaintiff provided no evidence that the pollutants near the wetlands ever actually migrated to or had an actual effect on the nearby navigable water).
The Sixth Circuit found a significant nexus where a government expert showed that the defendant's alterations to the wetlands "affected the frequency and extent of flooding, and increased the flood peaks" in a jurisdictional navigable water. Cundiff, 555 F.3d at 211. A separate expert witness further supported the significant nexus by explaining how the defendant's alterations to the wetlands caused "direct and significant impacts to navigation (via sediment accumulation in the [navigable water]) and to aquatic food webs." Id.
The Fourth Circuit initially rejected the Corps' claim for jurisdiction where the agency analyzed the wetlands' functions without analyzing those functions specifically in relation to the navigable water. Precon I, 633 F.3d at 294-96. Specifically, the court stated: "although we know that the wetlands and their adjacent tributaries trap sediment and nitrogen and perform flood control functions, we do not even know if the [related navigable water] suffers from high levels of nitrogen or sedimentation, or if it is ever prone to flooding." Id. at 295. In 2015, after the Corps supplemented its record, the Fourth Circuit approved the agency's significant nexus finding based on the agency's analysis of the relevant wetlands' functions in relation to the navigable water. See Precon II.
Watch out for deference granted to the government, which lowers the bar to prove jurisdiction.
There is a set of legal issues involving the burden of proof in court that weave their way into the cases dealing with CWA significant nexus jurisdiction. In general, if the government brings a civil enforcement action, it has the burden of proof "by preponderance of the evidence." In criminal enforcement, that burden is "beyond a reasonable doubt." In contrast, if a citizen challenges a final agency action, such as a determination of jurisdiction, the government's action is granted a degree of deference by the reviewing court, on the principle that agencies have specialized expertise in the programs they administer. As early as 1985, in Riverside Bayview Homes, the Supreme Court deferred to the Corps' finding of jurisdiction, based on granting deference to the agency's technical expertise and ecological judgment that wetlands adjacent to navigable-in-fact waters necessarily are jurisdictional. This was restated (or short-handed) in post-Rapanos decisions as a presumption that wetlands adjacent to navigable-in-fact waters are jurisdictional. Precon I, 633 F.3d at 289; see also Cundiff, 555 F.3d at 207; Northern California River Watch, 496 F.3d at 1000.
Read more carefully, it appears that these appellate decisions addressing the Kennedy "significant nexus" standard were granting the Corps' or EPA's evidence in support of jurisdiction a measure of deference. There does not seem to be a presumption similar to the presumption of innocence rather than guilt in the criminal system. Rather, it appears that reviewing courts to date have lowered the bar for the government to prove a significant nexus by granting deference to the government's position that certain kinds of evidence demonstrate the nexus and its significance. Wetlands adjacent to navigable-in-fact waters face the least scrutiny because of the "reasonable inference of ecologic interconnection," while more evidence is required to prove jurisdiction over more remote wetlands and streams. Rapanos, 547 U.S. at 780. Moreover, at least one court has indicated that there is a lower bar for permitting cases, where no damages can yet be measured, as opposed to enforcement cases where the downstream impacts can be recorded. Precon II, 603 Fed. Appx. at 152.
It remains to be seen whether the different burdens of proof applicable in different kinds of cases – enforcement or challenge to agency action – will play a role in the evidence needed to prove CWA jurisdiction.
Federal courts have begun to interpret the "significant nexus" standard as applied, even in the absence of the new regulation. In all likelihood, these cases will govern CWA jurisdictional determinations for the foreseeable future while the Rule is caught up in the courts and/or after litigation ends (if the Rule is struck down).