The Deterrent Effect of SWANCC and ESA on Development

Ramona L. Monroe
Stoel Rives LLP

Since the Supreme Court's decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC), no Clean Water Act (CWA) Section 404 permit is necessary to discharge dredged or fill material into isolated wetlands and waters. But what constitutes an "isolated" wetland or water?

In the recent Eastern District of Virginia case United States v. Newdunn Associates, Civ. No. 2:01cv508 (E.D. Va. Apr. 3, 2002), the court considered whether Section 404 jurisdiction reached 38 acres of non-tidal, forested wetlands and a spur ditch which discharged through a series of manmade ditches, a culvert under an interstate highway, and a non-navigable stream which eventually became navigable downstream. The court determined the wetlands and the spur ditch were not subject to CWA Section 404 under SWANCC.

Citing heavily to the dissent's characterization of the SWANCC majority, the Newdunn court posited that Section 404 of the CWA extends only to "actually navigable waters, their tributaries and wetlands adjacent to each," excluding tributaries and wetlands that are not contiguous or adjacent to navigable waters. Newdunn, slip op. at 21 (citing SWANCC, 531 U.S. at 176, 188 n.14 (Stevens, J. dissenting)). Thus, at least one court has found that a wetland with a visible surface hydrologic connection to navigable waters, albeit lengthy and artificial, is not within the scope of Section 404.

Prior to SWANCC, the Fourth Circuit had already held that navigability requires a connection to waters that could be used in commerce. United States v. Wilson, 133 F.3d 251 (4th Cir. 1997) (invalidating the Corps' regulatory definition of "waters of the United States" to the extent it does not require any nexus with navigable or interstate waters). Although the Newdunn decision is not binding precedent, and the Wilson decision is not applied outside the Fourth Circuit, they set up an interesting question: if Section 404 applies to those non-navigable waters that are directly tributary to navigable water or adjacent to navigable waters (see United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985)), but does not apply to non-navigable waters that are remote from navigable waters but nonetheless hydrologically connected, where do we draw the line?

Wherever the CWA jurisdictional line is drawn, it is not likely to be respected by salmon and other listed fish species, nor by plants and other animals listed under the Endangered Species Act (ESA) whose habitat includes "isolated" waters or wetlands. Nor is ESA jurisdiction so limited. ESA issues are just as likely to arise in non-navigable waters as they are in navigable waters.

From the perspective of the regulated community, ESA imposes much more than take liability. It is a ripe basis for project opponents to bring challenges, cause delays and increase project costs, even when impacts, let alone take, are remote and unlikely. Controversial projects in areas where listed species may be present are likely to draw ESA-related challenges in which dueling experts argue over whether impacts to the species are likely regardless of take liability. Although no project proponent relishes the thought of obtaining a Section 404 permit, or completing the Section 7 consultation that is inevitably part of the process in many areas, these processes provide some protection from ESA liability and a meaningful defense to a legal challenge. A Habitat Conservation Plan is not feasible for most private projects and absent Section 404 jurisdiction to trigger a Section 7 consultation, the risk of increased costs and delays associated with project challenges, meritorious or not, may become a primary factor limiting development. In these cases, SWANCC may not be the triumph it is often hailed to be.

When projects face little or disorganized opposition, ESA-based risks may be small and non-deterrent. But limitations on Section 404 jurisdiction from SWANCC and its progeny create larger obstacles than they solve for controversial projects in areas where listed species or critical habitat may be present but which have no nexus to a federal action.