A 2001 U.S. Supreme Court decision limiting the Army Corps of Engineers’ regulatory authority under the Clean Water Act does not limit the Corps’ jurisdiction over wetlands adjacent to “waters of the United States,” the Ninth U.S. Circuit Court of Appeals has ruled.

In a case from Fremont, the Ninth Circuit held that the Supreme Court decision in Solid Waste Agency of N. Cook County v. United States Army Corps of Engineers, 531 U.S. 159 (SWANCC) did not alter the Corps’ longstanding “adjacency rule.” The Ninth Circuit rejected the argument from Baccarat Fremont Developers that, under the Clean Water Act (CWA), the Corps can assert control only if there is a hydrological or ecological connection between the wetlands and the adjacent waters.

“The text of the CWA and the implementing regulations promulgated by the Corps give no indication that a significant hydrological or ecological connection is a condition of Corps jurisdiction over adjacent wetlands,” Judge William Fletcher wrote for the Ninth Circuit. “Baccarat relies on the Supreme Court’s decision in SWANCC to support its contention that adjacent wetlands must be hydrologically or ecologically connected to waters of the United States. SWANCC, however, did not address the Corps’ adjacency jurisdiction. Rather, it invalidated the Corps’ Migratory Bird Rule.”

The Ninth Circuit’s decision, however, could come under scrutiny. The Ninth Circuit’s reasoning closely follows — and the decision cites — a 2004 Sixth Circuit decision,Carabell v. U.S. Army Corps of Engineers. Shortly after the Ninth Circuit’s decision, the Supreme Court accepted Carabell and a similar case for review. Oral arguments are scheduled in February.

In 1997, Baccarat acquired 31 acres near San Francisco Bay and proposed the development of a six-building business park. The site contains 7.66 acres of wetlands, so in early 1998, Baccarat asked the Corps to make a jurisdiction determination. The Corps’ San Francisco District office determined that it had jurisdiction. Baccarat subsequently filed a permit to fill 2.36 acres of wetlands. However, days after the Supreme Court issued its decision in SWANCC, Baccarat asked the Corps to reconsider its jurisdiction determination. After a year-long administrative process, the Corps stuck to its original position. In February 2002, the Corps offered Baccarat a permit to fill the 2.36 acres with conditions, including creation of a like-sized freshwater wetland elsewhere on-site and enhancement of the remaining 5.3 acres of existing brackish wetlands.

Baccarat signed the permit but reserved the right to seek judicial review. Baccarat then sued the Corps and other parties in state court. The suit was moved to federal court, and District Court Judge Claudia Wilken ruled for the Corps. On Baccarat’s appeal, the Ninth Circuit upheld the lower court.

The Corps had asserted its authority because the wetlands are separated only by manmade berms from flood control channels that are navigable and connect to tidal waters. Under the Clean Water Act, navigable waters and tidal waters are “waters of the United States” over which the Corps has clear regulatory authority.

Baccarat argued that the SWANCC decision blocked the Corps of Engineers’ regulatory authority over isolated waters that are not hydrologically or ecologically linked to “waters of the United States.” In SWANCC, the Supreme Court ruled that the Corps did not have jurisdiction over isolated ponds in Illinois where a consortium of cities planned to bury garbage (see CP&DR Environment Watch, May, 2001; CP&DR Legal Digest, February 2001).

However, according to the Ninth Circuit, the Supreme Court rejected the Corps’ use of its Migratory Bird Rule, in which the Corp asserted jurisdiction over isolated waters that are used by migratory birds. “The Corps did not assert that the waters at issue in SWANCC were adjacent to waters of the United States, and the court’s opinion did not address the Corps’ jurisdiction over adjacent wetlands,” Judge Fletcher wrote.

Instead, the Ninth Circuit said that United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985) was the controlling case. In Riverside Bayview Homes, the Supreme Court unanimously upheld the Corps’ jurisdiction over wetlands adjacent to waters of the United States, whether or not the wetlands and waters were “significantly intertwined.” The fact that there is connection is most cases was adequate justification for the Corps’ adjacency rule, the Supreme Court ruled. If wetlands were lacking in importance to the larger aquatic environment, the Corps could always issue a permit for development, the Supreme Court ruled.

Baccarat argued that the high court’s decision in SWANCC was a retreat from Riverside Bayview Homes — an argument the Ninth Circuit rejected. “Indeed, SWANCCrepeatedly referred to the holding in Riverside Bayview Homes — ‘that § 404 (a) of the Clean Water Act extends to nonnavigable wetlands adjacent to open waters’ — without giving any indication that it intended to modify or overrule that unanimous ruling,” Flecher wrote. “SWANCC simply did not address the issue of jurisdiction over adjacent wetlands.”

Even if the connection demanded by Baccarat were required, Fletcher continued, the Corps found that the connection existed. The Corps found that the wetlands are in “reasonable proximity” to the flood control channels, contribute to the aquatic environment in general, are within the 100-year floodplain of tidal waters, and are part of a hydric soil unit contiguous with the area covered by tidal waters. “Taken together, the Corps’ findings would be more than sufficient to establish a significant nexus between the wetlands on the site and the flood control channels, were such a showing required,” the court concluded.

The Case:
Baccarat Fremont Developers, LLC v. United States Army Corps of Engineers, No. 03-16586, 05 C.D.O.S. 9028, 2005 DJDAR 12321. Filed October 14, 2005.

The Lawyers:
For Baccarat: Robert R. Moore, Allen, Matkins, Leck, Gamble & Mallory, (415) 837-1515.
For the Corps: James Coda, Office of the U.S. Attorney, (415) 436-7200.