United States: Supreme Court Ruling Creates Uncertainty Over Corps Jurisdiction

In March of 2000, the Corps of Engineers substantially modified its Nationwide Permit Program and in the process reduced acreage thresholds, subjecting an increased number of projects to individual permit requirements. The pendulum has reversed course in less than a year, thanks to a recent Supreme Court ruling restricting federal regulatory authority over intrastate waters. Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers ("SWANCC"); 531 U.S. _____, 121 S. Ct. 675 (2001).

SWANCC involved a proposed disposal site for nonhazardous waste. A group of Chicago-area municipalities had acquired a 533-acre parcel with over 200 permanent and seasonal ponds which resulted from former strip-mining operations. Over 100 species of birds, including endangered, water-dependent, and migratory varieties, had been observed at the site. The second largest breeding colony of great blue herons in northeastern Illinois were seasonal residents. The Corps asserted jurisdiction based on the presence of migratory birds, several of which depend upon aquatic environments, and refused to grant a permit to fill the wetlands because (1) SWANCC had not demonstrated that its proposal was the least environmentally damaging, most practicable alternative; (2) SWANCC had not set aside sufficient funds to prevent leaks, creating an unacceptable risk to the public's drinking water supply; and (3) the project's impact on area-sensitive species was unmitigable. As its basis for jurisdiction, the Corps was relying on a 1986 clarification of its definition of "waters of the United States" known as the Migratory Bird Rule. 51 Fed. Reg. 41217.

In December 1994, SWANCC attacked the Corps' jurisdiction in court. The Corps prevailed at the district court and in the court of appeals, but, in an opinion issued on January 9, 2001, the Supreme Court reversed, holding the Corps lacked jurisdiction over the site because "waters of the United States" as defined in the Clean Water Act does not extend to intrastate waters simply based on the presence of migratory birds.

On January 22, 2001, EPA and the Corps issued a legal interpretation of SWANCC. The agencies acknowledged the potential impact of the ruling beyond dredge and fill activities and into the NPDES and oil spill programs, which also apply only to "waters of the United States." Beyond their loss of authority over waters or wetlands solely based on their use as habitat by migratory birds, the agencies identified as potentially affected by SWANCC the portion of the definition of "waters of the United States" in 33 CFR § 328.3 (a) (3), which reads, "all other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation, or destruction of which could affect interstate or foreign commerce...." The memorandum indicates the jurisdiction over such "other waters" should be considered on a case-by-case basis in consultation with agency legal counsel.

It will be interesting to see how the Bush administration handles this issue. The January 22 memorandum certainly did not reflect the considered views of new agency management, although it appears safe to say that the new administration was not so upset by the memorandum as to prevent its issuance. The situation will likely remain unsettled for another several years. In the meantime, projects involving streams that are connected to intrastate streams or lakes with minimal interstate commerce connections now appear to be less likely to be subject to Corps permitting. It is worth noting that the Corps definition quoted above is also linked to the clause, "which are used or could be used for industrial purpose by industries in interstate commerce." If industries along an intrastate waterbody resist federal permitting efforts, they will probably implicate the Commerce Clause of the Constitution, which the Court sidestepped in SWANCC.

There is widespread speculation about the impact of SWANCC. An article by counsel to the Association of State Wetland Managers stated that the ruling potentially removes 30-60% of the Nation's wetlands from Clean Water Act protection. The range results from uncertainty as to the ultimate interpretation of "adjacent" wetlands, "tributaries," and "significant nexus" between wetlands and navigable waters. Delaware is cited as estimating 33% or more of its freshwater wetlands will not be subject to Corps permitting depending on whether wetlands connected to navigable waters by drainage ditches are deemed "tributaries" or "adjacent."

The Supreme Court acknowledged state primacy over intrastate activities. Many states, including New Jersey and Pennsylvania, have comprehensive programs for isolated waters and freshwater wetlands. Withdrawal of federal authority in these jurisdictions will not necessarily affect the status quo in terms of wetlands filling. However, other states have largely deferred to the Corps. It remains to be seen whether those states will institute new programs in the wake of SWANCC.