Wetlands Development: Legal Trends and Challenges Navigating Strict New Federal Guidance, Permitting Requirements and Emerging Case Law

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A Wetlands Development: Legal Trends and Challenges Navigating Strict New Federal Guidance, Permitting Requirements and Emerging Case Law TUESDAY, NOVEMBER 29, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: Philip G. Mancusi-Ungaro, Attorney-Advisor, United States Environmental Protection Agency Office of Water Legal Support, Atlanta Beverlee E. Silva, Partner, Alston & Bird, Atlanta The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 WETLANDS UPDATE Wetlands Development: Legal Trends and Challenges Navigating Strict New Federal Guidance, Permitting Requirements and Emerging Case Law Philip G. Mancusi Ungaro USEPA Attorney Advisor Mancusi The views expressed in this presentation are those of the author and do not represent the position i of the US Environmental Protection Agency

6 Summary Rapanos Appellate Update What is new in the Courts? Surface Mining Enhanced Coordination Process, National Mining Association litigation challenging mining guidance. CWA 404(c) Determinations background and recent litigation. Sackett Litigation Are EPA s Section 309(a) injunctive orders subject to pre enforcement judicial review? 6

7 Rapanos Update Rapanos v. United States and Carabell v. United States 126 S. Ct (2006). Justsurdity Thereis a split in the appellatecourts on which test to use; Kennedy or Scalia or just Kennedy. No courts have said Scalia only. For Practitioners, need to know which Rapanos Test to use to determine jurisdiction. Still use the 1987 Manual and the three part test to delineate wetlands. 7

8 Post-Rapanos Legal Challenges Courts of appeal have not taken a consistent position on which test applies: 1 st Circuit: it United dstates t v. Charles Johnson, 467 F.3d F3d56 (1st Cir. Oct. Ot31, 2006), petition for rehearing and rehearing en banc denied Feb. 21, 2007, petition for certiorari denied Oct. 9, 2007; Jurisdiction exists if either standard satisfied 3 rd Circuit: United States v. David H. Donovan, appeal from US U.S. Dist. Court for the District of Delaware (D.C. Civil No cv 00484, 1996). On October 31, 2011, affirming the District Court's grant of summary judgment in favor of the United States, the 3rd Circuit joined the 1st Circuit and the 8th circuits in holding that a wetland is subject to the CWA if it meets either Justice Scalia s or Justice Kennedy's test. 4 th Circuit: no current appellate interpretation Precon Development Corporation, Incorporated v. United States Army Corps of Engineers, 633 F.3d 278 (4 th Cir. Jan. 25, 2011); The parties had agreed that Kennedy's test was controlling in this case, so the court does not address the plurality standard or indicate what test or tests it might apply in subsequent cases. Case remanded back to COE for further significant nexus analysis. 8

9 Post Rapanos Legal Challenges Cont d 5 th Circuit: United States v. Robert J. Lucas, Jr., 516 F.3d 316 (5 th Cir. Feb. 1, 2008), petitionfor certiorarideniedoct Oct. 15, 2008; Uphelddefendants defendants CWAconvictions concluding government presented evidence at trial that satisfied all three Rapanos standards (plurality, concurring, and dissent). 6 th Circuit: United States v. George Rudy Cundiff, 555 F.3d 200 (6 th Cir. Feb. 4, 2009), petition for certiorari denied October 5, 2009; Upheld district court s finding of liability finding government satisfied both Kennedy standard and plurality standard. 7 th Circuit: United States v. Gerke Excavating, Inc., 464 F.3d 723 (7th Cir. Sept. 22, 2006), petition for rehearing and rehearing en banc denied Dec. 1, 2006, petition for certiorari denied Oct. 1, 2007; Kennedy standard applies in most cases. 8 th Circuit: United States v. Gary Bailey, 571 F.3d 791 (8 th Cir. July 9, 2009); The appellate court found that the United States is entitled to demonstrate CWA jurisdiction under either of the Rapanos standards and found that in this case, Justice Kennedy s standard was satisfied. 9

10 Post Rapanos Legal Challenges Cont d 9 th Circuit: Northern California River Watch v. Carl Wilcox, 633 F.3d 766 (9th Cir. Aug. 25, 2010, amended djan. 26, 2011); In this Endangered Species Act case, the Ninth Circuit had initially found that Justice Kennedy s concurrence was the controlling rule of law. The United States then filed an amicus brief requesting that the court revise its decision to indicate that although the Kennedy test provided the rule of law in this case, it did not preclude the use of the plurality in other cases. On January 26, 2011 the court issued an amended decisionconsistent consistent with this position. 11 th Circuit: United States v. McWane, 505 F.3d 1208 (11th Cir. Oct. 24, 2007)petition for rehearing en banc denied, 521 F.3d 1319 (Mar. 27, 2008), petition for certiorari denied Dec. 1, 2008 Kennedy s significant nexus standard is the controlling rule of law. Remanded to District Court Judge called it: Justsurdity 10

11 Litigation over Guidance National Mining Association (NMA), et al. v. Jackson, et al. (D.C. Cir. Civil Action No , 2010) 11

12 National Mining Association (NMA), et al. v. Jackson, et al. EPA jointly issued the Enhanced Coordination Procedure and Interim Detailed Guidance with the Army COE. It set out a process for coordinating review of a series of mining permits under existing CWA regulations. On July 20, 2010, the NMA sued EPA and other federal agencies challenging the ECP and Interim Detailed Guidance as improper rulemaking without notice and comment. Four additional cases were transferred from other courts in West Virginia and Kentucky to the DC Cir. and consolidated with the NMA case. On 11/6/2011, in the consolidated cases, the District Court granted NMA s Motion for Summary Judgment while denying the U.S. Motion for summary judgment. In the decision, the court ordered: "The MCIR Assessment and the E[nhanced] C[oordination] Process, as unlawful agency actions, are hereby set aside." The original complaint also challenged the Interim Detailed Guidance which implemented the ECP. That part of the case is still pending. There has been no decision on whether to appeal. 12

13 Litigation Update Clean Water Act Section 404(c) Determinations 13

14 CWA Section 404(c) Background Prohibit or restrict specification of defined area as disposal site 404(c) process starts in the Regions; ends at HQ To ensure avoidance of unacceptable adverse effects May be used before, during or after Corps action on a permit application May be used in absence of permit application EPA has the final decision and burden of proof 14

15 CWA Section 404(c) Under Section 404(c), EPA must determine that the discharge of dredged d d or fill material will have an unacceptable adverse effect on: Municipal water supplies; Shellfish beds and fishery areas (including spawning and breeding grounds); Wildlife; or Recreational areas. EPA regulations identify a very specific process that must be followed to initiate and finalize a Section 404(c) action. 40 C.F.R Part

16 Existing Section 404(c) Actions Therehavebeen13 have Section 404(c) final actions to date. Six have been in EPA Region 4. p// p /yp / / / p load/404c.pdf Seefollowing url for links to Federal Register Notices and draft, recommended and final determinations: s/404c.cfm 16

17 Section 404(c) First Section 404(c) action was in North Miami, the Munisport Landfill; final determination issued January19 19, Stopped further action under existing permit and prevented future use of adjacent site for discharge of dredged or fill material. Section 404(c) final determinations have been modified. 17

18 Recent Challenges to 404(c) Actions There have been two recent Section 404(c) Determinations that have been challenged. Yazoo Backwater Pumps Project August 31, 2008 Final Determination; Issaquena County, MS. Spruce No. 1 Surface Mine January 13, 2011 Final Determination; i Logan County West Virginia. 18

19 Yazoo Backwater Pumps Project EPA s August 31, 2008 Final Determination prohibited the specification of wetlands and other waters of the United States in Issaquena County, MS, as a disposal site for the discharge of dredged or fill material for the purpose of construction of the proposed Yazoo Backwater Area Pumps Project. EPA s determination was based upon a finding that the discharge of dredged or fill material associated with the construction and operation of these projects would result in unacceptable adverse effects on fishery areas and wildlife. EPA was sued by the Project Sponsor, the Levee Board, who alleged EPA hadno authority to issue the 404(c). They argued that the project was authorized under section 404(r). This was not a challenge to the underlying 404(c). EPA s Motion for Summary Judgment was granted partially based on the argument that the record did not support the 404(r) claim. The Levee Board has appealed the matter to the 5 th Circuit Court of Appeals. The 5 th Circuit recently granted the Levee Board s motion to amend the record with certain additional documents. The matter is fully briefed; no hearing date scheduled. 19

20 Spruce No. 1 Surface Mine January 13, 2011 Final Determination withdrew specification of certain streams as a disposal sites for the discharge of dredged or fill materials and prohibited the use of other streams as disposal sites for future mining. EPA has been sued by Mingo Logan, g the owner of the mine challenging the authority to issue a veto, and the merits of the veto itself. (Mingo Logan vs. USEPA, (D.C. Cir. No. 1:10 CV ABJ, 2011). Cross motions for summary judgment have been filed and fully briefed. 20

21 Sackett v. USEPA Litigation over whether Section 309(a) wetlands compliance orders are subject to judicial review 21

22 Sackett v. United States On June 28, 2011 the U.S. Supreme Court granted certiorari to hear a case concerning whether a Section 309(a) wetlands compliance order should be subject to judicial review before the US seeks to enforce it in Federal Court. The order granting the petition for writ of certiorari limited the issues on review to two questions: May petitioners seek pre enforcement judicial review of the administrative compliance order pursuant to the Administrative Procedure Act, 5 U.S.C. 704? If not, does petitioners' inabilityto to seek pre enforcementjudicial enforcement review of the administrativecompliance order violate their rights under the Due Process Clause? In 2007 EPA had issued a Section 309(a) compliance order to the Sacketts for allegedly filling in approximately ½ acre of wetlands, discharging pollutants without a Section 404 permit. The Sacketts then sued the EPA, arguing that the issuance of the compliance order without opportunity for judicial review was arbitrary and capricious and a violated their due process rights. EPA filed a motion to dismiss the case for lack of subject matter jurisdiction arguing that the CWA precluded review of CWA Section 309(a) orders before EPA has brought an enforcement action in federal court. The U.S. District Court for the District of Idaho granted summary judgment. The Sacketts appealed the District Court opinion and the 9 th Circuit affirmed the dismissal. The Court of appeals held that pre enforcement judicial review of administrative compliance orders was precluded under the Clean Water Act and that does not violate due process rights (Sackett v. EPA, 622 F.3d 1139, (9th Cir. 2010)). The Sacketts filed the petition for certiorari on Feb. 23,

23 Proposed Post Rapanos Guidance: An Expansion of EPA and the Corps Jurisdiction over Wetlands Wetlands Development: Legal Trends and Challenges Navigating Strict New Federal Guidance, Permitting Requirements and Emerging Case Law November 29, 2011, Strafford Webinars and Teleconferences Beverlee E. Silva Alston & Bird LLP

24 Rapanos v. United States 547 U.S. 715 (2006)* *Revisited, yet again

25 Is it a Water of the United States Rapanos sought to determine the scope of Clean Water Act s jurisdiction: Regulates Navigable Waters navigable waters are waters of the United States, including the territorial seas U.S.C. 1362(7) What is a Water of the United States? 25

26 The Disharmonious Supremes Scalia (4) Plurality lit opinion i Kennedy (1) Significant Nexus opinion Stevens (4) Dissenting opinion 26

27 Plurality Decision (Scalia) Corps expansive land is waters approach goes beyond CWA Waters are 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. Waters are NOT channels through which water flows intermittently or ephemerally or channels that periodically provide drainage for rainfall. 27

28 Scalia Two-Part Test 1. (Adjacent) Relatively permanent body of water connected to traditional interstate navigable water, and 2. (Connected) Continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins. 28

29 Kennedy Opinion i Requires significant nexus between the wetlands and navigable waters (traditional) Significant nexus is met if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemistry, physical and biological integrity of navigable waters Adjacent wetlands meet the test, but otherwise case-by-case determination 29

30 EPA/Corp Attempt to Interpret EPA and the Army Corps of Engineers have made three attempts to issue guidance about what the Rapanos decision means in practice. Issued Post-Rapanos guidance on June 5, 2007 and December 3, Guidance was not much help because it failed to adequately define significant nexus Guidance is currently in effect. Third Attempt: 2011 Proposed Guidance issued on April 27,

31 Status of Proposed Guidance EPA and the Corps put the guidance out for public comment. 60-day public comment period was originally set to expire on July 1, Extended to July 31, 2011 EPA received 3863 comments on the proposed p guidance. Currently awaiting the issuance of the final guidance. 31

32 Existing 2008 Guidance How does it categorize waters of the United States? 32

33 Definitely it Jurisdictional The agencies will assert jurisdiction over the following waters: Traditional navigable waters Wetlands adjacent to traditional navigable waters Non-navigable tributaries of traditional navigable waters that are relatively permanent where the tributaries typically flow year-round or have continuous flow at least seasonally (e.g., typically three months) Wetlands that directly abut such tributaries 33

34 Maybe Jurisdictional The agencies will decide jurisdiction over the following waters based on a factspecific analysis to determine whether they have a significant nexus with a traditional navigable water: Non-navigable tributaries that are not relatively permanent Wetlands adjacent to non-navigable tributaries that are not relatively permanent Wetlands adjacent to but that do not directly abut a relatively permanent nonnavigable tributary 34

35 Not Jurisdictional The agencies will generally not assert jurisdiction over the following features: Swales or erosional features (e.g., gullies, small washes characterized by low volume, infrequent, or short duration flow Ditches (including roadside ditches) excavated wholly in and draining only uplands and that do not carry a relatively ypermanent flow of water 35

36 The agencies will apply the significant nexus standard as follows: A significant nexus analysis will assess the flow characteristics and functions of the tributary itself and the functions performed by all wetlands adjacent to the tributary to determine if they significantly affect the chemical, physical and biological integrity of downstream traditional navigable waters. Significant nexus includes consideration of hydrologic and ecologic factors. 36

37 How Has the Existing Guidance Been Received? Not popular with anybody Democrats in Congress proposed new legislation to significantly increase definition of jurisdictional waters, but it went nowhere Administration i i decided d to try again 37

38 2011 Proposed Guidance Attempt # 3

39 Important Links The Proposed Guidance and relevant related documents: Comments on the Proposed Guidance: 39

40 What is the Expected Impact? The proposed guidance is a significant departure from the Existing Guidance and relies more explicitly on the view taken by Justice Kennedy in the Supreme Court s Rapanos decision Many in industry are interpreting it to significantly expand federal jurisdiction under the Clean Water Act over millions of acres of property. 40

41 What s New? This guidance reflects the relevant science and responds to the agencies experience implementing previous guidance documents.... alleviates the need to develop extensive administrative records for certain jurisdictional determinations that caused delays and added costs to both federal agencies and the regulated community. The draft guidance seeks to address limits on the water law s scope by offering a new interpretation of the test provided by Kennedy, while reiterating EPA s litigation position that regulators can rely on either the Kennedy test or the Scalia test when determining jurisdiction. 41

42 Why? The 2008 Rapanos guidance [Attempt #2] reflected a policy choice to interpret Justice Kennedy s opinion narrowly, resulting in fewer waterbodies found to be jurisdictional under the CWA than under a more faithful interpretation. t ti The Proposed Guidance purports to refine the agencies interpretation of the significant ifi nexus standard dso it is consistent with Kennedy s opinion and the science of aquatic ecosystems. Also purports to determine the jurisdictional status of waters not addressed by earlier guidance (for example, interstate waters). 42

43 Still Guidance Not Regulation Attempt #3 is still just guidance. It does not have a legally binding effect on EPA, the Corps, or the regulated community.... Interested persons are free to raise questions regarding the application of this guidance to a particular situation

44 So what s inthedraftproposed Guidance? SUMMARY OF KEY POINTS 44

45 Jurisdictional Waters The Agencies will assert jurisdiction over: Traditional Navigable Waters Interstate Waters Wetlands adjacent to either traditional navigable waters or interstate waters Non-navigable tributaries to traditional navigable waters that are relatively permanent, meaning at least seasonal Wetlands that directly abut relatively permanent waters 45

46 Maybe Jurisdictional The following waters are subject to CWA jurisdiction if a fact-specific analysis determines they have a significant nexus to a traditional navigable water or interstate waters: Tributaries to traditional navigable waters or interstate waters Wetlands adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters Waters that fall under the other waters category of the regulations. 46

47 Not Jurisdictional The following aquatic areas are generally not subject to Clean Water Act jurisdiction as waters of the United States: Wet areas that are not tributaries or open waters or do not meet the agencies regulatory definition of wetlands Waters excluded from coverage under the CWA by existing regulations Waters that tlack a significiant ifi i nexus where one is required dfor a water to be subject to CWA jurisdiction 47

48 Also Not Jurisdictional Artificially irrigated areas that would revert to upland should irrigation cease Artificial lakes or ponds created by excavating and/or diking dry land and used exclusively for such purposes as stock watering, irrigation, settling basins, or rice growing Artificial reflecting pools or swimming pools created by excavating and/or diking dry land 48

49 Also Not Jurisdictional Small ornamental waters created by excavating and/or diking dry land for primarily aesthetic reasons Water-filled depressions created incidental to construction activity 49

50 2011 Draft Guidance is Very Robust Divided into Eight Separate Sections The first two sections address the fundamental classes of waters subject to Clean Water Act jurisdiction: traditional navigable waters and interstate waters. Section 3 provides general guidance relating to Kennedy s significant nexus standard The next three sections provide guidance on determining whether various types of waters are subject to CWA jurisdiction, including: Tributaries (Section 4); Adjacent wetlands (Section 5); and Oh Other waters (Section 6) Section 7 discusses examples of waters over which the CWA has no jurisdiction Section 8 provides guidance on the documentation necessary to jurisdictional decisions 50

51 Significant Nexus: An Expansive, New 4 Page Explanation Waters have the requisite nexus if they, either alone, or in combination with similarly situated waters in the region, significantly affect the chemical, physical, or biological integrity of traditional navigable waters or interstate waters. 51

52 What will the Agencies Look at? Significant ifi Nexus Determination i Are the waters similarly situated with other waters of the same regulatory or resource type? Are they in the same watershed, defined by the area draining into the nearest traditional navigable water or interstate water If so, there is a significant nexus if they alone or in combination they would have an effect on the chemical, physical, or biological integrity of traditional navigable waters or interstate waters that is more than speculative or insubstantial 52

53 Hydrologic Connection Not Necessary The draft guidance also notes that a hydrologic connection is not necessary to determine jurisdiction under Kennedy s test because: in some cases the lack of hydrologic connection would be a sign of the water s function in relationship to the traditional navigable or jurisdictional water, such as retention of flood waters or pollutants that would otherwise flow downstream to the traditional i navigable or interstate water 53

54 Expansion of Jurisdictional Wetlands Has the potential to assert jurisdiction over wetlands away from traditional navigable waters, based on the impacts of proposed activity in those wetlands... while it may be difficult to demonstrate that a particular individual wetland adjacent to a small headwater tributary has a significant nexus to a traditional navigable water, the destruction of all such adjacent wetlands in a region could have significant effect on the traditional navigable water and, thus, in such circumstances the CWA must protect those wetlands in order to protect the traditional navgiable water, The same logic applies to tributaries and similarly situated other waters. 54

55 Expected Results in the Field The Agencies expect that the number of waters found to be subject to CWA jurisdiction will increase significantly compared to practices under [past] guidance. The scope of waters subject to CWA jurisdiction will still not be as extensive as it was prior to the Supreme Court s action. 55

56 Reactions? Comments are predictably mixed. Industry groups oppose what they consider a monumental expansion of CWA jurisdiction, and predict profound detrimental impacts on industry interests. Some local governments love it -- many with the same letter because they perceive it as carefully-drafted... guidance [that will]... restore and clarify Clean Water Act protections. Other local governments hate it because it could cause significant economic hardship. The Sierra Club membership endorses it because it will conform federal policy to scientific reality: it's impossible to safeguard rivers and lakes downstream without protecting the small, headwater streams that feed them. 56

57 Will this Guidance be the Last Word? No. Common comment by those who oppose the policy is that it redefines what constitutes a water of the United States and expands the jurisdiction of the CWA. Thus, the argument is, the Guidance is a de facto legislative rule that under the APA can only be promulgated through a formal rulemaking. EPA has, in fact, promised to further clarify which waters are subject to CWA jurisdiction in a future rulemaking. Unclear when these future regulations will be promulgated. 57