In a recent unpublished opinion for Precon Development v. U.S. Army Corps of Engineers, the Court of Appeals for the Fourth Circuit upheld a lower court's ruling determining that the U.S. Army Corps of Engineers (Corps) had correctly asserted jurisdiction over wetlands pursuant to the Clean Water Act (CWA). The Court's decision marks another milestone in the 13-year battle over Precon Development Corporation's proposed housing development in Chesapeake, Virginia and provides greater detail than prior court applications of Justice Kennedy's "significant nexus" jurisdiction standard from Rapanos v. United States. Following a 2011 Circuit decision, Precon 1, which addressed the nexus and remanded for proof of significance, this 2015 decision upholds the Corps' demonstration of significance. The combined opinions in the Precon case are the first to address nexus in detail and to address an evidentiary showing of significance.
Now the Fourth Circuit has determined that the significance showing as well as the nexus showing are fairly modest burdens for the government to meet to exercise jurisdiction over wetlands. Aided by judicial deference to the Corps' proof and jurisdiction based on aggregation of "similarly situated" wetlands, the "significant nexus" test can be met with very little nexus or significance between the actual wetland at issue and navigable waters.
Why Does This Matter?
Since the 2006 Rapanos decision, most Circuits have adopted the "significant nexus" standard and everyone has been trying to understand what proves a nexus and its significance. The Precon decisions were watched because they involved trials on these issues. The resulting Circuit opinions have set what appears to be a very low standard for the government to assert jurisdiction under this test. This means that most wetlands, even at great distances from navigable waters with little direct connection, can be found to be jurisdictional, at least in the Fourth Circuit. When faced with proving or disproving jurisdiction based on a "significant nexus," careful review by consultants and counsel is very important to assure compliance.
Background
The 2006 Rapanos decision was split, with a plurality holding that CWA jurisdiction depended upon a showing of water – a hydrological connection between wetlands and navigable waters – while Justice Kennedy concurred in the result but maintained that in addition to the plurality standard, the Corps could establish jurisdiction over wetlands that have a "significant nexus" to downstream navigable waters. As Precon made its way through the courts, the lower court determined there was a nexus between the wetlands' function and the quality of downstream waters, and the Fourth Circuit agreed that there was a nexus but remanded the case for trial to determine whether that nexus was significant. The recent 2015 decision addresses the significance.
It is critical to note that the Kennedy standard allows aggregation of "similarly situated" wetlands to determine if there is a "significant nexus." Precon involved potential impacts to 4.8 acres of wetlands but the jurisdictional analysis used a region of 448 wetland acres within the watershed. To avoid losing jurisdiction because the actual wetland is too small to be significant on its own, significance can be measured by asking, "What is the function of this one and all similarly situated wetlands?" Upon remand, the Corps presented new evidence including expert testimony showing that the carbon sequestration properties of the wetlands reduced the water quality impairments to the Northwest River and that there was habitat use of the aggregated wetlands by several common wildlife species. The Fourth Circuit stated it was unnecessary to provide quantitative or statistically significant evidence; instead, purely qualitative evidence would suffice.
In response to Precon's argument that the function of wetlands should be viewed individually and that the relevant wetlands were only a small percentage of the entire watershed, the Fourth Circuit disagreed and reiterated that it had already decided in Precon 1 that aggregation was allowed. It stated that the more important inquiry is to analyze the collective impacts of the wetlands' function. The Fourth Circuit reiterated that viewing the wetlands on an individual basis, as Precon suggested, "would destroy the Corps' jurisdiction through 'death by a thousand cuts.'" Therefore, the analysis of the wetlands' aggregated impacts, along with the evidential substantiation the Corps presented, adequately proved "significant nexus" and the lower court's ruling was upheld.
Future Implications from the Precon Ruling
The Precon case represents the first time a court has weighed evidence of significance to support jurisdiction under the "significant nexus" test. The evidentiary burden articulated in the Fourth Circuit's decision, however, appears fairly low. The Fourth Circuit's statement that quantitative or statistically significant evidence "sets the bar too high" purports to reduce the amount and quality of evidence the government must present to establish a "significant nexus." Therefore, it is likely that the Corps' demonstration of a general relationship between wetland functions and downstream receiving water will be sufficient to satisfy the test in the future. Moreover, the Fourth Circuit gave deference to the Corps' evidence, which gives the government an added boost in showing jurisdiction. With such a low burden of proof, it is likely the Corps will rarely fail to establish jurisdiction.
The determination of the "similarly situated" wetlands that can be used to show "significant nexus" will be the next set of legal and factual battles. Under Precon, "similarly situated" wetlands were those laid within the same watershed, but there are many other possible constructions of "similarly situated." It will be important to understand watersheds and distribution of wetland types within an area of potential aggregation used for jurisdiction. There remain many unanswered questions about the role of aggregation in establishing jurisdiction. While the Kennedy concurrence authorized aggregation, as it is applied in Precon, there are serious questions of fundamental fairness to landowners. Administration of the CWA should have standards that are repeatable and understandable. Right now, the owner of land with wetlands will find it difficult to know what aggregated wetlands and what functions it must evaluate to determine jurisdiction.
Precon's counsel has publicly stated they will seek an en banc hearing from the Fourth Circuit and, if necessary, a review by the U.S. Supreme Court. Venable's Environmental Group will pay close attention to developments in this case. For questions, please contact any of the listed authors or your Venable counsel.