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Ninth Circuit Declines to Extend CWA Jurisdiction to “Adjacent Waters” Other Than Wetlands

April 11, 2007

The Ninth Circuit Court of Appeals last month refused to extend the federal government’s jurisdiction under the Clean Water Act (“CWA”) to ponds adjacent to navigable waters. The decision in San Francisco Baykeeper v. Cargill Salt Division,[1] also interprets the Supreme Court’s ruling last term in Rapanos v. United States to extend only to wetlands, and not non-wetland waters.

Background

Cargill, Inc. (“Cargill”) operates a salt processing facility near San Francisco Bay. The facility includes a 17-acre waste containment facility used to dispose of salt processing wastes. During storms, rainwater carries run-off from Cargill’s waste containment facility to a non-navigable pond (“the Pond”) that lies at a lower elevation, adjacent to Mowry Slough. The Slough is considered a navigable “water of the United States.” The Pond is separated from Mowry Slough by a levee. On occasion, water from Mowry Slough has over-topped the levee and flowed into the Pond. However, the Court found no evidence that water from the Pond ever flowed into Mowry Slough.[2]

The CWA

The Clean Water Act prohibits the discharge of pollutants into “navigable waters.”[3] The term “navigable waters” is defined in the CWA to mean “waters of the United States.”[4] The United States Army Corps of Engineers (“Corps”) and Environmental Protection Agency (“EPA”) have issued nearly identical regulations interpreting “waters of the United States” to include certain intrastate waters that are not navigable-in-fact. Particularly relevant to this case, EPA’s NPDES regulations, 40 C.F.R. § 122.2 et seq., define “waters of the United States to include “‘wetlands’ adjacent to waters (other than waters that are themselves wetlands)” that are otherwise covered by the CWA.[5]

Procedural History

In 1996, San Francisco Baykeeper and Citizens Committee to Complete the Refuge (collectively “Baykeeper”), filed a citizen suit under the Clean Water Act citizen against Cargill. Baykeeper alleged that Cargill: 1) illegally discharged stormwater associated with industrial activities into “waters of the United States” without a permit i.e., the Pond, in violation of 33 U.S.C. §§ 1311 and 1342(p)(2)(B); and 2) illegally discharged non-stormwater pollutants into “waters of the United States” without a permit in violation of 33 U.S.C. § 1311 (collectively “the two claims”). Baykeeper also alleged other claims that were ultimately dismissed with prejudice.

The parties disputed whether the Pond is a “water of the United States” under the CWA and associated regulations. Initially, Baykeeper alleged that the pond qualified as a “water of the United States” under the Migratory Bird Rule[6] because migratory birds intermittently used the Pond as habitat. The district court granted summary judgment in favor of Baykeeper on this basis and, following the summary judgment motion, Baykeeper dismissed its remaining claims with prejudice. Shortly thereafter, the United States Supreme Court invalidated the Migratory Bird Rule as a basis for upholding CWA jurisdiction over isolated intrastate waters in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers (“SWANCC”).[7] Consequently, the Ninth Circuit Court of Appeals, vacated the district court’s summary judgment in favor of Baykeeper and remanded the case for consideration of alternate bases for CWA jurisdiction.

On remand, Baykeeper again moved for summary judgment, arguing that the Pond was a “water of the United States” by virtue of the fact that it lies adjacent to Mowry Slough, a navigable “water of the United States.” In opposition to that motion, Cargill argued that, under the controlling regulations, merely being adjacent to a “water of the United States” provides a basis for CWA coverage only when the relevant waterbody is a wetland. The district court again granted summary judgment in favor of Baykeeper. After acknowledging that adjacent wetlands qualify for CWA protection under CWA regulations and Supreme Court precedent, the district court reasoned that the characteristics that qualify adjacent wetlands for CWA protection, should similarly apply to protect adjacent ponds.[8]

The Ninth Circuit’s Decision

The Ninth Circuit reversed, making a distinction between wetlands that are located adjacent to navigable waters and similarly located ponds, streams, and other waterbodies.

The Court first looked to the plain language of 40 C.F.R. § 122.2 which defines “waters of the United States” to include “wetlands adjacent to waters (other than waters that are themselves wetlands)”[9] that are otherwise covered by the Act. Based on the unambiguous language, the Court reasoned that this regulatory definition reaches only adjacent wetlands, not adjacent ponds, streams, or other waters. As the Court explained, the agencies’ regulation plainly limiting adjacency to wetlands was entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-44 (1984).[10] It concluded that a court may strike down a regulation that exceeds Congress’ mandate, but “may not substitute its construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.”[11] Accordingly, the Court found that the district court had erred in extending this definition to find that the Pond – which is not a wetland – was subject to the CWA because of its location adjacent to Mowry Slough.

The Court next addressed Baykeeper’s argument that, despite the plain language of the regulation, summary judgment was nevertheless appropriate since “the Supreme Court has repeatedly held that the CWA protects all waterbodies with a ‘significant nexus’ to navigable waters.” The Ninth Circuit disagreed, finding that nothing in the Supreme Court’s decisions in United States v. Riverside Bayview,[12] SWANCC,[13] or Rapanos v. United States “require or support the view that Cargill’s Pond is a water of the United States because it is adjacent to Mowry Slough”[14] The Court continued:

Baykeeper contends, however, that the Pond is more than merely adjacent; it has a nexus to Mowry Slough. It is not sufficient, however, for Baykeeper to make its individual case; it must establish that it was unreasonable for the EPA to confine to wetlands the CWA’s reach to non-navigable waterbodies adjacent to protected waters.

In rejecting Baykeepers’ argument, the Court reviewed the trio of Supreme Court cases, distinguishing each. The Court held that Baykeepers’ reliance on Riverside Bayview was misplaced, since that case upheld the Corps’ “adjacent wetlands” regulations, but did not address Corps authority over adjacent ponds, streams, or other waterbodies. In Riverside Bayview, the Supreme Court held that the Corps definition of “waters of the United States” to include adjacent wetlands was reasonable under the CWA. However, the Court noted, nothing in Riverside Bayview stood for the proposition that “a court is authorized to conclude, when the administering agencies have reasonably ruled to the contrary, that other non-navigable bodies of water, which are not wetlands, are waters of the United States because they are adjacent to such waters.”[15]

The Court similarly rejected Baykeepers’ reliance on SWANCC. In SWANCC, the Supreme Court invalidated a Corps rule that extended the definition of “navigable waters” to include isolated intrastate waters used as habitat for migratory birds (i.e. the Migratory Bird Rule), noting that, unlike wetlands, isolated intrastate ponds lack a significant nexus to navigable waters. Rejecting Baykeepers’ arguments, the Ninth Circuit noted that SWANCC could not be read to expand CWA jurisdiction to all non-navigable bodies of water with some nexus to “waters of the United States.” Moreover, and relevant to the instant case, SWANCC “did not hold that a court would be free to impose such a regulatory requirement if the administering agency did not.”[16]

Finally, the Court distinguished Rapanos on the grounds that Rapanos, like Riverside Bayview, concerned the Corps jurisdiction over adjacent wetlands, not adjacent ponds or other waterbodies. Rapanos, the Court noted, was a decision that was limited to wetlands, and never considered “whether all waterbodies with a significant nexus to navigable waters are covered by the Act.”[17] Consequently, the “significant nexus” test advanced by Justice Kennedy’s Rapanos concurrence was a test to be applied to determine Corps jurisdiction over adjacent wetlands, not other adjacent waters.

In dicta, the Ninth Circuit then went on to decide that the Pond did not possess the requisite nexus mandated by the Rapanos “significant nexus” test. Under that test, “wetlands possess the requisite nexus, and thus come within the 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.’ When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters’”[18]

In this case, the Pond fell “far short” from meeting the Kennedy standard, since the effects of the Pond on Mowry Slough were speculative or insubstantial. The Court placed considerable weight on the absence of direct evidence that water from the Pond ever flowed into Mowry Slough, despite evidence that water from the Slough occasionally entered the Pond. Following this analysis, the Court emphasized that Justice Kennedy’s “standard was for wetlands, for which the Corps has made special allowance beyond the margins of the usual navigable waters at which the CWA is aimed.”

Conclusion

The Cargill decision provides additional clarity with respect to the reach of federal CWA jurisdiction over ponds, streams, and other waterbodies adjacent to protected waters. The Court’s conclusion that the “significant nexus” test advanced in Rapanos v. United States applies to wetlands only, and not ponds or other non-wetland waters, provides additional insight into the limits of that recent ruling.

[1] San Francisco Baykeeper v. Cargill Salt Division, 2007 WL 686352 (9th Cir. 2007).

[2] Cargill, 2007 WL 686352 at 1.

[3] 33 U.S.C. § 1311(a).

[4] 33 U.S.C. § 1362(7).

[5] 40 C.F.R. § 122.2 (g).

[6] See 53 Fed. Reg. 20,764, 20,765 (June 6, 1988).

[7] Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers (“SWANCC”), 531 U.S. 159 (2001).

[8] Prior to appeal, the parties entered into a settlement agreement in which Baykeeper waived any right to assert theories of jurisdiction over the Site (including the pond) other than that based on adjacency.

[9] 40 C.F.R. § 122.2(g).

[10] In reaching this decision, the Court acknowledged a certain tension between “the purpose of authorized citizen suits and Chevron deference,” but decided that relevant case law did not support denying deference to EPA and the Corps in this case. See Cargill, 2007 WL 686352 at 4.

[11] Cargill, 2007 WL 686352 at 4, citing Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844 (1984).

[12] United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[13] Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001) (“SWANCC”).

[14] Cargill, 2007 WL 686352 at 6.

[15] Cargill, 2007 WL 686352 at 5-6.

[16] Cargill, 2007 WL 686352 at 6.

[17] Cargill, 2007 WL 686352 at 6.

[18] Cargill, 2007 WL 686352 at 6-7, citing Rapanos v. United States, 126 S.Ct 2208, 2248 (2006).

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