Supreme Court Ruling Limits Federal Wetlands Jurisdiction

On January 9, 2001, a narrowly divided U.S. Supreme Court, in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, - U.S. - (2001), decided that the Army Corps of Engineers lacks authority to regulate certain isolated intrastate wetlands. The pivotal issue in this case was a challenge to federal jurisdiction over state (and private) activities based upon the premise that the potential use of habitat by migratory birds provides a sufficient connection to interstate commerce. The Court seized the opportunity to reconcile its recent federalism opinions with one of the most contentious environmental principles, the so-called "migratory bird rule."

Section 404(a) of the Clean Water Act ("CWA" or "Act") authorizes the Army Corps of Engineers ("Corps") to issue permits for the "discharge of dredged or fill material into the navigable waters at specified disposal sites." The CWA expressly limits the jurisdiction of the Corps by defining "navigable waters" as "the waters of the United States." The Corps regulations define the phrase "waters of the United States," to include: all other waters such as intrastate lakes, rivers, streams... wetlands... meadows... or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce. Without the usual notice-and-comment procedure, the Corps announced what is now known as the "migratory bird rule" in the preamble to the Corps 1986 regulations. The Corps stated that the Act extends to intrastate waters: (a) which are or would be used as habitat by birds protected by Migratory Bird Treaties; or (b) which are or would be used as habitat by other migratory birds which cross state lines...51 Fed. Reg. 41217. This "rule" has generated considerable controversy as it has impeded commercial and other development on private property in the absence of a direct connection to interstate waterways.

In the decision issued last month, the Supreme Court decided whether isolated wetlands may properly be included within the Corps’ jurisdiction. The Solid Waste Agency of Northern Cook County ("SWANCC"), a consortium of suburban Chicago municipalities, purchased 533 acres of abandoned sand and gravel mines to create a solid waste disposal site. The old mining site’s remnant excavation trenches evolved into scattered permanent and seasonal ponds of varying size (from under one-tenth of an acre to several acres). After passing various permitting and land use approval hurdles, including approval from the local zoning board, Cook County, the Illinois Department of Conservation, and the Illinois Environmental Protection Agency, the SWANCC requested a ruling from the Corps to determine whether a permit under Section 404 would be needed for the filling of approximately 17 acres. After the Illinois Nature Preserves Commission informed the Corps that migratory birds had been observed on the property, the Corps concluded that the isolated, intrastate strip-mining depressions were "navigable" waters of the United States because they "are or could be used as habitat by migratory birds which cross state lines." In addition, the Corps determined that SWANCC put the public’s drinking water supply at risk by setting aside insufficient funds to remediate leaks and failed to establish that the proposal was the "least environmentally damaging, most practicable alternative." According to the Corps, the impact upon area-sensitive species could not be mitigated since "a landfill surface cannot be redeveloped into a forested habitat." Ultimately the Corps denied the permit because of the possible impact on migratory birds.

SWANCC argued that the doubt about whether the migratory bird rule comports with the Commerce Clause mandated rejection of the Corps’ broad interpretation of its CWA powers. However, both the district court and Seventh Circuit Court of Appeal disagreed, prompting the Supreme Court to agree to review the case. In the 5-4 decision written by Chief Justice William Rehnquist, the Corps’ efforts to assert jurisdiction over the abandoned gravel pit used as habitat by migratory birds would "result in a significant impingement of the States’ traditional and primary power over land and water use." The Court concluded that the text of the statute would not allow the Corps to extend its jurisdiction to ponds that are not adjacent to open water. If an administrative interpretation of a statute, such as the Migratory Bird Rule, invokes the outer limits of Congress’ power, the Court stated that it expects a clear indication that Congress intended that result. The Court failed to find clear evidence that Congress intended §404(a) to reach an abandoned sand and gravel pit.

In sum, the Supreme Court ruled that the Clean Water Act does not provide the Corps with jurisdiction over ponds that are not connected or adjacent to open water. Because the migratory bird rule was found to be invalid, the Court did not address the scope of the Clean Water Act’s jurisdiction under the Commerce Clause, thereby avoiding a sweeping ruling on constitutional grounds. Because there was no clear intent by Congress to impinge upon traditional states’ power over local issues via the Clean Water Act, the court interpreted the Act to avoid raising the constitutional and federalism issues created by the Corps’ interpretation of its jurisdiction.

The SWANCC case stripped the Corps of its previous jurisdiction over isolated waters solely because they are habitat to migratory birds. This case could have far reaching consequences beyond providing guidance to the circuit courts that have issued conflicting decisions regarding isolated waters and wetlands. Depending on how the decision is interpreted, some isolated wetlands may lose their federal regulated status, including areas throughout Florida. The balance between federal and local authority and the control over decisions local in nature, may be shifted away from the federal government. The ramifications of this decision may also affect mitigation banking and NPDES permitting. This opinion is sure to generate significant judicial and academic controversy in the months ahead.

A guidance memorandum released by the EPA and the Corps on January 19, 2001 forecasts an attempt to retain jurisdiction over these wetlands on an alternative basis. The guidance document conceded that field staff should not rely on the use of wetlands by migratory birds as the sole basis for asserting jurisdiction. However, the question of what other connections with interstate commerce might be relied on to support the assertion of jurisdiction over non-navigable, isolated, intrastate waters was left unanswered. The guidance memorandum relies strongly upon an earlier Supreme Court decision that upheld the Corps’ definition of "waters of the United States" to include wetlands adjacent to navigable waters. See United States v. Riverside Bayview Homes, 474 U.S. 121 (1985). How "adjacent" is distinguished from "isolated" likely will remain unclear until the decision is put into effect by the EPA and Corps or until the issue is addressed through the rule-making process. Regardless, the Corps must assert jurisdiction on some basis other than migratory birds. Until the wrinkles of the decision are ironed out by the regulatory authorities, permit applicants should proceed cautiously and seek the advice of experienced counsel.

© 2000 Greenberg Traurig