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Appeals Court Affirms Corps’ Watershed Approach to General Permit for Filling Wetlands

January 9, 2008

The Eleventh Circuit Court of Appeals recently upheld a novel Clean Water Act (“CWA”) § 404(e) dredge and fill permit of “unprecedented scope,” which will allow the development of 48,150 acres in the Florida Panhandle for commercial and residential “suburban development” while preserving 10,000 acres of wetlands. The novel permitting approach endorsed by the court in Sierra Club v. United States Army Corps of Engineers[1] may also ease some of the uncertainty surrounding § 404 jurisdiction that abounds since the Supreme Court’s decision in Rapanos v. United States.[2]

The Eleventh Circuit upheld the Corps’ issuance of a regional § 404 permit and rejected the arguments made by the Sierra Club and the Natural Resources Defense Council that the wide variety of construction-related activities authorized – ranging from “horse stables to public works buildings, from light industrial facilities to multiple unit residential developments, from restaurants to roads, and from hospitals to utility lines, all under the rubric of ‘suburban development’”[3] – were not sufficiently similar. If the Eleventh Circuit’s reasoning is followed elsewhere, this approach may result in more general permits that protect wetlands on a watershed basis, while at the same time allow development to proceed without the need for multiple individual permits.

Dredge and Fill Permits Under the Clean Water Act

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 § 404 of the Act.[4] The Corps and the Supreme Court have interpreted “waters of the United States” to include wetlands adjacent to waters that are navigable in fact.[5] 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.

A general permit is issued on a national, regional, or statewide basis and allows the dredge and fill of wetlands for an entire category of activities, provided that the activities are similar in nature and will cause only minimal adverse environmental effects, both separately and cumulatively.[6] Like an individual permit, a general permit is subject to public notice and comment. However, once issued, a landowner wishing to conduct activities under the authority of a general permit typically needs to only secure an “authorization” from the Corps – usually in the form of a letter – which is far less onerous than the original general permitting process.[7] A third type of § 404 permit, a nationwide permit, is a form of general permit that authorizes various categories of activities throughout the nation, and nationwide permits are currently available for nearly 50 types of activities ranging from bank stabilization and wetland restoration projects, to oil and gas development and mining activities, to agricultural and recreational activities. The Corps reissues its nationwide permits every five years, with the most recent reissuance occurring in March, 2007.[8]

Nationwide permits are issued by the Office of the Chief Engineer in Washington DC, while regional general permits are issued by the local division or district engineer. A regional general permit (RGP) is a general permit issued on a regional basis, with limited geographic scope, for a category of activities that are substantially similar in nature and cause only minimal individual and cumulative impacts on the aquatic environment.[9] An RGP may modify a nationwide permit for a particular region or authorize discharges not covered by a nationwide permit.[10] Once an RGP is issued, as with a nationwide permit, a landowner seeking to conduct activities authorized under the RGP is not subject to an additional application process, unless the RGP so requires.

Regional General Permit SAJ-86[11]

In Sierra Club v. United States Army Corps of Engineers, the area covered by RGP SAJ-86 is a 48,150-acre parcel in the Florida panhandle. The St. Joe Company owns more than 75% of the land covered by the permit, 39,055 acres, and much of the activity on the property owned by the St. Joe Company focused on pine tree production, an industry that has dominated the region since the 1920s.[12] In response to expanding population growth in the area, the St. Joe Company modified its business plan from silviculture to include commercial and residential development.[13] With wetlands accounting for 60% of the land area in the Florida panhandle, most of the St. Joe Company’s projects required a § 404 permit.[14]

In 2000, after noting that the St. Joe Company was submitting an increased number of individual permit applications for development projects, the Corps initiated discussions with the St. Joe Company and other federal and state agencies regarding the development of an RGP that would guide growth in a manner that would maximize wetland protection on a larger scale than would be possible on an individual project-by-project basis.[15] For the next several years, the Corps collaborated with the St. Joe Company and a variety of governmental agencies, including the Florida Department of Environmental Protection, the U.S. Fish and Wildlife Service, the National Marine Fisheries Service, and the Environmental Protection Agency,[16] to develop a comprehensive plan for wetlands management, resulting in the June 30, 2004 issuance of RGP SAJ-86.[17]

Under SAJ-86, landowners can dredge or fill wetlands to construct residential, commercial, recreational and institutional projects in the RGP area, with the following limitations. First, impacts to “high quality” wetlands (defined as anything that is not “low quality”) are limited to 125 acres throughout the RGP area. Second, impacts to “low quality” wetlands (wetlands planted with pine trees and ditches) are limited to 20% of the wetlands in any one of the nineteen different geographic sub-basins. Third, mitigation is required for all lost wetlands either through on-site mitigation or through two off-site mitigation banks, both owned by the St. Joe Company. Finally, the RGP designated up to 13,200 acres of land as “conservation units” that the St. Joe Company, which owns the land, is ultimately to place into conservation by granting perpetual easements to the Florida Department of Environmental Protection.[18] Other noteworthy permit conditions include wetland buffer requirements, restrictions on the use of certain types of fill material, septic tank and drainfield prohibitions, stormwater management requirements for new construction, and limitations on the placement of road crossings.[19]

The Appeal

The Sierra Club and the Natural Resources Defense Council challenged the issuance of SAJ-86, alleging that the permit violated the CWA because: (1) the activities covered under the RGP were not sufficiently similar in nature; (2) the activities would cause more than minimal adverse impacts when performed separately; and (3) the activities would have more than minimal cumulative adverse effects on the environment. The environmental groups further argued that SAJ-86 contemplated activities of a type and size that required individual permits, and that by authorizing such projects under a general permit, SAJ-86 avoided the level of scrutiny required under individual permits.[20]

The Corps, in justifying its permit, acknowledged that it had never issued an RGP on this scale before, but asserted that it was consistent with statutory and regulatory requirements, and within the Corps’ discretion. The Corps asserted that the activities were “similar in nature” because they are all components of “suburban development.” The Corps further contended that the activities would cause only minimal adverse impacts separately and cumulatively because of mitigation requirements contained in the permit.[21]

The court recognized the legitimate concerns over “abuse of the general permitting process” and that unchecked expansion of the general permit beyond its statutory scope would “gut the individual permitting process and allow the Corps to circumvent the notice and public hearing requirements of Section 404(a).”[22] Nonetheless, the court concluded that, “while a very close case,” the more than 20 special conditions in the RGP effectively limited the scope of permitted activities, mitigated any environmental impacts, and were intended to preserve 10,000 acres of wetlands such that the RGP was not inconsistent with the CWA but a proper exercise of the Corps’ general permitting authority.[23] Indeed, the permit conditions were critical to the Eleventh Circuit’s reasoning affirming the district court: “The special conditions in the Permit are extensive, and we believe they reflect the Corps’ efforts to design a permit that is considerate of the Act and yet tailored to the unique problems presented by this large area of northwest Florida. The Permit both strategically manages development in the entire Permit Area and provides the Corps with wide powers to control adverse impacts associated with any particular individual project.”

Implications

SAJ-86 is unique and unprecedented. No other Corps district in the nation has developed an RGP the size and scope of SAJ-86.[24] The RGP covers an extraordinarily large land area, over 75 square miles, in comparison to other RGPs; and a single landowner, the St. Joe Company, owns an overwhelming proportion of the land covered by the permit, and has specific rights and obligations under the permit terms that do not apply to other landowners who own property within the RGP area.[25] By way of comparison, the six RGPs that the Seattle District of the Corps has issued[26] are for limited activities such as building watercraft lifts (RGP 1) or the U.S. Forest Service’s Fish Passage Program (RGP 8); and limited regions such as docks and moorage pilings in Lake Washington, Lake Sammamish, the Sammamish River and Lake Union (RGP 3) or the Mid-Columbia and Lower Okanogan Rivers (RGP 5).

Perhaps SAJ-86 only reflects the unique nature of the Florida landscape and its approach will have only a limited following outside the Sunshine State. However, as EPA and the Corps focus more acutely on watershed approaches to permitting, SAJ-86 may represent the future of the Corps’ regional general permit program. Certainly from the perspective of administering a regulatory program, the approach taken in SAJ-86 could result in a more efficient permitting regime for both the Corps and permit applicants who are involved in wide scale development projects with multiple phases. Rather than requiring the submission of numerous individual permit applications for each phase, requiring the devotion of substantial Corps resources to review and approve the sought-after permits, the expanded RGP approach recognized by the Eleventh Circuit appears to achieve a balance between competing interests. That is, this novel permitting approach allows, on the one hand, the Corps to approve development projects on a large-scale, watershed basis that through the inclusion of appropriately tailored special permit conditions protect wetlands, while on the other hand allows growth and development to proceed without the need for, or substantial costs associated with, multiple individual § 404 permits. The SAJ-86 approach to general § 404 permitting also may lessen some of the jurisdictional uncertainties that could repeatedly arise with the submittal of numerous individual permit applications.

For more information about this case, contact any member of Marten Law Group’s Environmental Permitting practice group.

[1] ___ F.3d ___, 2007 WL 4276553 (11th Cir. 2007), available at http://media.mgnetwork.com/mbb/pdf/08dec07_tmach_ruling.pdf.

[2] The Rapanos decision, and post-Rapanos issues, have been discussed in this newsletter. See, e.g., Post-Rapanos Courts Setting High Evidentiary Bar for Clean Water Act Jurisdiction [12/19/07], Latest Ninth Circuit Decision Interpreting Rapanos Extends Clean Water Act Jurisdiction to Intermittent Streams [10/10/07], and Clear as Mud: Newest Ninth Circuit Case Interpreting Rapanos Test for Clean Water Act Jurisdiction Offers Little Clarity [9/12/07].

[3] Sierra Club v. United States Army Corps of Engineers, 399 F. Supp.2d 1335, 1343 (M.D. Fla. 2005) (“Injunctive Order”), overruled by 464 F. Supp.2d 1171 (M.D. Fla. 2006).

[4] 33 U.S.C. §1344.

[5] 33 C.F.R. §§328(a)(7) and United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[6] Sierra Club v. United States Army Corps of Engineers, 464 F. Supp.2d 1171 (M.D. Fla. 2006) (“District Court decision”) at 1177.

[7] Id. at 1177-78.

[8] 72 Fed. Reg. 11,092, list of all nationwide permits available at http://www.usace.army.mil/cw/cecwo/reg/nwp/nwp_2007_final.pdf

[9] Seattle District, Corps of Engineers, public information regarding Regional General Permits, available at http://www.nws.usace.army.mil/PublicMenu/Menu.cfm?sitename=REG&pagename=mainpage_RGPs.

[10] 3 C.F.R. § 325.2(e)(2).

[11] http://www.saj.usace.army.mil/regulatory/permitting/gen/saj-86.htm

[12] District Court decision at 1177, Corps of Engineers’ Memorandum for Record, Environmental Assessment and Statement of Finding, Finding No. 1, available at http://www.saj.usace.army.mil/regulatory/assets/docs/permitting/gen/saj_86/sof.pdf

[13] District Court decision at 1177.

[14] Id.

[15] Id at 1178.

[16] The St. Joe Company’s Regional General Permit information page, available at http://www.joe.com/web/JoeStory/ConservationByCooperation/RegionalGeneralPermitEcosystemMgmtAgreement.

[17] Id. SAJ-86 may be found at http://www.saj.usace.army.mil/regulatory/permitting/gen/saj-86.htm.

[18] Id at 1178 – 79.

[19] Id at 1180.

[20] Id at 1186.

[21] Id at 1185.

[22] 2007 WL 4276553 at *4.

[23] 2007 WL 4276553 at *2.

[24] District Court decision at 1185, quoting Corps project manager for SAJ-86, Gordon Hambrick.

[25] Id at 1185.

[26] http://www.nws.usace.army.mil/PublicMenu/Menu.cfm?sitename=REG&pagename=mainpage_RGPs

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