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Farm Bureau Suit Seeks to Reinstate Exclusion From Wetland Regulation for Former Farmlands

April 28, 2010

A suit recently filed by the American Farm Bureau Federation (Farm Bureau) and U.S. Sugar seeks to reinstate a categorical exclusion from Clean Water Act (CWA) regulation for wetlands converted to agricultural lands prior to 1985 (“prior converted croplands”). The U.S. Army Corps of Engineers (Corps) takes the position in a 2009 policy directive that prior converted croplands are only exempt from CWA jurisdiction as long as they remain farmland.[1] The Farm Bureau alleges that the April 2009 Corps policy constitutes rulemaking, and that the policy was issued without notice and comment, in violation of the Administrative Procedures Act (APA).[2] The Corps' policy, plaintiffs allege, would reinstate federal CWA jurisdiction over 53 million acres of prior converted croplands, reducing their value and potential uses.

The Prior Converted Wetlands Exemption

The filling of wetlands is regulated under the CWA, which prohibits the discharge of materials, such as soil or sand, into “waters of the United States,” unless authorized by a permit issued under CWA Section 404.[3] In 1993, the Corps adopted a rule that established that prior converted croplands, defined as agricultural lands that were converted from wetlands prior to 1985, were excluded from the definition of “the waters of the United States” and, therefore, were not subject to regulation under CWA Section 404.[4] Such prior converted cropland is not considered wetlands because the water regime in the soils has been substantially altered and therefore considered to be of low ecological value.[5]

Farm Bureau and U.S. Sugar

Farm Bureau members and U.S. Sugar own prior converted cropland that they routinely lease or sell for non-agricultural uses, including construction of utility lines, sewer lines, residences, windmills, and mining.[6] Farm Bureau members also use their prior converted cropland for their own non-agricultural uses, including for development and as collateral for farm and other loans. The Farm Bureau asserts that the land’s collateral value is often reportedly based on its development value, but a farm that contains a substantial number of wetland acres has a lower development value than the same parcel without any wetland acres.[7]

The Farm Bureau is the largest non-profit general farm organization in the United States. U.S. Sugar and its wholly-owned subsidiaries own approximately 187,000 acres of land in Florida, of which 104,000 acres are located within the Everglades Agricultural Area (EAA) and used by U.S. Sugar in its agricultural operations. Some of that land is subject to a lease to an aggregate company, Stewart Mining Industries, Inc. (Stewart Mining).

Recent Corps Policy Statement on Scope of Prior Converted Cropland Exemption

In a memorandum dated April 30, 2009, Steven L. Stockton, on behalf of the Corps, approved and adopted a standard that purports to regulate prior converted croplands as “waters of the United States” upon a change in use.[8] The issue addressed in the April 30, 2009 memorandum was whether the prior converted croplands designation still applied once a property changes from an agricultural use to non-agricultural use, and specifically responded to applications including Stewart Mining’s proposed mining in the EAA.[9]

The Farm Bureau Suit

The Farm Bureau asserts that under the Corps’ prior converted croplands rule “regardless of how these prior converted croplands are used, the Corps lacks jurisdiction over such lands and no jurisdictional determination or Corps permit is required for their use.”[10] The Farm Bureau Suit alleges, therefore, that the Corps has now illegally amended the prior converted croplands rule by requiring Section 404 permits for non-agricultural uses of such lands, thus regulating them as “waters of the United States” upon a change of use.

Section 404 permits are issued by the Corps, or in a very few instances, by authorized state agencies. The Corps may issue either an individual or a general dredge and fill permit. Individual permits are issued for a single, specific project following a full public interest review of an individual application. Public notice of the application is distributed to all resource agencies and all known interested persons. The individual permit decision is generally based on the outcome of a public interest balancing process, and the requested permit is usually issued unless the proposal is deemed contrary to the public interest. The process is, however, generally time-consuming and expensive and can result in litigation.

The Farm Bureau Suit alleges that the Corps’ 2009 memorandum violates the prior converted cropland rule, is arbitrary and capricious because the Corps failed to provide a reasoned explanation for its decision to amend the rule, and violates the APA because the Corps did not follow any of the requirements for an agency rulemaking.[11] As a remedy for the Corps’s alleged violations of law, the Farm Bureau and U.S. Sugar seek an order: (1) declaring that the Corp’s April 2009 memo and all underlying, associated documents issued by the Corps’s Districts and Headquarters violate the prior converted cropland rule and the APA; (2) declaring the April 2009 memo and additional documents to be unlawful and setting them aside; (3) enjoining the Corps and its Districts from applying or enforcing the April 2009 memorandum and additional documents; and (4) instructing the Corps on the proper treatment of “prior converted cropland” under the existing rule.[12] The Corps has not yet filed its answer to the Farm Bureau Suit.

If the court upholds the Corps’ position that prior converted croplands are only exempt from CWA jurisdiction as long as they remain farmland, then all prior converted croplands that are no longer farmed may be required to undergo CWA jurisdictional determinations and possibly obtain Section 404 permits for any activity that involves a possible discharge of material into waters of the United States. Such activities would include development, construction, and mining on prior converted croplands.

Proposed Clean Water Restoration Act

EPA and the courts have been struggling for years with the scope of federal jurisdiction over “navigable waters” and wetlands under the CWA. The CWA strictly prohibits discharging pollutants into the “navigable waters of the United States” without an NPDES permit from the EPA or authorized state environmental authority.[13] After Congress passed the CWA, an issue arose concerning the extent to which wetlands adjacent to navigable waters constitute “waters of the United States.” The Corps and the Supreme Court have interpreted “waters of the United States” to include wetlands adjacent to waters that are navigable in fact.[14] In 2006, the United States Supreme Court issued a decision in Rapanos v. United States,[15] that the courts, EPA, and the Army Corps of Engineers (“Corps”) have found difficult to interpret and apply. For more on post-Rapanos jurisdictional issues under the CWA, see J. Kray, Post-Rapanos Courts Setting High Evidentiary Bar for Clean Water Act Jurisdiction, Marten Law Environmental News (December 19, 2007).

On April 21, 2010, Rep. James Oberstar (D-Minn.) introduced a bill titled “America’s Commitment to Clean Water Act,” H.R. 5088, in the House of Representatives. The proposed Act seeks to broaden federal CWA jurisdiction over wetlands and other isolated waterbodies.[16] A comparable bill titled the “Clean Water Restoration Act,” S.787, was introduced in the Senate in January 2009. The Farm Bureau opposes such amendments.[17] For more on proposed amendments to the Clean Water Act, see J. Kray, Three Strikes – You’re Still Not Out: Senate to Again Consider Controversial Legislation to Broaden Clean Water Authority, Marten Law Environmental News (June 12, 2009).

For more information on water and wetlands issues, please contact Jeff Kray or any other member of Marten Law’s Water Quality practice group.

[1] American Farm Bureau and U.S. Sugar Corp. v. U.S. Army Corps of Engineers, et al. Case 1:10-cv-00489-RWR, filed in the United States District Court for the District of Columbia on March 24, 2010 (“Farm Bureau Suit”).

[2] 5 U.S.C. § 553.

[3] 33 U.S.C. § 1344.

[4] 33 U.S.C. § 1344. See Final Rule, Clean Water Act Regulatory Program, 58 Fed. Reg. 45,008 (Aug. 25, 1993) (“1993 Final Rule”) (codified at 33 C.F.R. § 328.3(a)(8) (2009)).

[5] Regulatory Guidance Letter (RGL) 90-7 (Sept. 27, 1990).

[6] Farm Bureau Complaint at p. 3.

[7] Id.

[8] Apr. 30, 2009 Memorandum from Steven L. Stockton, Director of Civil Works (attached as Exhibit 1 to Farm Bureau Suit). See Farm Bureau Complaint at pp. 26-27.

[9] Id.

[10] Farm Bureau Complaint at p. 2.

[11] Farm Bureau Complaint at p. 4.

[12] Id.

[13] 33 U.S.C. § 1311(a).

[14] 33 C.F.R. §§ 328(a)(7) and United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[15] 126 S. Ct. 2208 (2006).

[16] P. Quinlan, Water: Oberstar Floats bill to make Clean Water Act ‘navigable’ (E&E News April 20, 2010), available at http://www.eenews.net/EEDaily/2010/04/20/archive/4?terms=oberstar (subscription required).

[17] Id.

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