Supreme Court Reduces Federal Authority Over Intrastate Wetlands

Wm. Roger Truitt

In an important decision limiting the Clean Water Act (CWA) jurisdiction of the U.S. Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (EPA), the Supreme Court recently ruled that the CWA does not extend to intrastate wetlands where the only federal jurisdictional connection is the presence of migratory birds. The Supreme Court, in a 5-4 ruling, held in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, No. 99-1178, Jan. 9, 2001 (SWANCC), that neither the CWA nor the Constitution's Commerce Clause applied to an isolated, non-navigable, intrastate pond.

The Court's decision in SWANCC has far-reaching implications for real estate developers and local governments whose projects involve the dredging and/or filling of inland waters, including isolated wetlands, vernal pools, wet meadows, prairie potholes, forested wetlands, playas, flats, bogs and large amounts of Alaskan tundra. The decision will have an immediate impact on projects in those states which do not have wetlands regulations and permitting comparable to the federal program.

Although the SWANCC case specifically addressed only the CWA's § 404 dredge and fill regulations, the Court's decision also affects the scope of EPA's regulatory jurisdiction under other provisions of the CWA, including the § 402 National Pollutant Discharge Elimination System (NPDES) Program and the § 311 oil spill program, because the Court limited the scope of Corps's and EPA's regulatory definition of "waters of the United States."

The SWANCC case involved a consortium of suburban Chicago municipalities (SWANCC) that united to develop a site in which to place baled non-hazardous solid waste. SWANCC selected a large parcel which had been used as a sand and gravel pit prior to 1960. The old trenches had evolved into seasonal and permanent ponds, ranging from less than an acre to several acres in size and from several inches to several feet in depth, that were not connected to navigable or interstate waterways. After learning that migratory bird species had been observed at the site, the Corps asserted § 404 permitting jurisdiction pursuant to its so-called Migratory Bird Rule. The Corps contended that the Commerce Clause granted it broad authority to regulate isolated wetlands because hunters and tourists travel from state to state to view migratory birds.

After the Corps denied SWANCC's proposal to fill in some of the ponds, the consortium challenged the Corps' permitting jurisdiction in court, arguing that the CWA only allowed the Corps to regulate wetlands when they are in some way connected to "navigable waters" which are defined in the CWA as "waters of the United States." SWANCC's arguments did not persuade the district court or the U.S. Court of Appeals for the Seventh Circuit, which held that Congress had authority under the Commerce Clause to regulate intrastate waters and that the Corps' Migratory Bird Rule was a reasonable interpretation under the CWA. However, the Supreme Court overruled the Seventh Circuit, finding that the Corps' regulatory definition of "waters of the United States," as clarified and applied to SWANCC's site pursuant to the Migratory Bird Rule, exceeded the authority granted to the Corps under § 404 of the CWA. Recognizing that it upheld the Corps' permitting jurisdiction over wetlands "adjacent" to a navigable waterway in its United States v. Riverside Bayview Homes, Inc. opinion in 1985, the Court refused to extend the Riverside Bayview Homes holding to include ponds not adjacent to open water. Since the Court did not make a bright line distinction between those wetlands which have a sufficient nexus to navigable waters to be "adjacent" versus those wetlands and other waters which are "isolated" and "intrastate," future Corps permit decisions and litigation will shape the definition of these terms.

It is noteworthy that the Supreme Court did not accept the federal government's argument that the Court should defer to the Corps' interpretation of the CWA in its application of the Migratory Bird Rule to isolated intrastate wetlands. In fact, the Court said that such an interpretation would raise significant constitutional questions and result in significant impingement of the States' traditional and primary power over land and water use. These findings suggest that the Court believes that Congress will not be able to constitutionally amend the CWA to provide the Corps with authority over isolated intrastate waters.

The SWANCC decision is good news for developers who face the specter of fines and penalties in developing land with isolated wet spots. Often, significant time and expense is spent in analyzing and permitting such lands because they may contain water for brief periods during the year. In addition, projects such as SWANCC's landfill can now proceed without federal permitting and enforcement.

In the wake of the SWANCC decision, state environmental agencies are evaluating and revising their wetlands permitting laws and regulations. An attorney for the Association of State Wetland Managers notes that eleven states - Alaska, Georgia, Kansas, Louisiana, Mississippi, Nebraska, North Carolina, North Dakota, South Carolina, South Dakota and Texas - provide little or no permitting requirements for isolated wetlands, while another 21 states have only partial programs for wetlands adjacent to waterways. The States of Florida, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Virginia have regulations which are similar to the federal § 404 program, although some contain exemptions based upon the size of the wetland or the activity proposed.

Wm. Roger Truitt, is a partner in the Environmental Practice Group of Piper Marbury Rudnick Wolf LLP. He is resident in the firm's Baltimore office and can be contacted at (410) 580-4277 or at roger.truitt@piperrudnick.com.