Federal Regulation of Isolated Wetlands: SWANCC's Shrinking Effect Over Time

Keith G. Wagner
Law Office of J. William Yeates
Endangered Species Committee Newsletter Regional Reporter,
Central California, Utah, Nevada

In January 2001, the Supreme Court decided in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC), that the Army Corps of Engineers (Corps) had exceeded its statutory authority by asserting Clean Water Act (CWA) Section 404 jurisdiction over an abandoned sand and gravel pit in Illinois. On appeal from district court and Seventh Circuit rulings upholding the Corps' jurisdiction over the abandoned mine site, a familiar 5 - 4 Court majority held that, as applied, the Migratory Bird Rule exceeded the Corps' CWA authority.

The Corps' Migratory Bird Rule is an interpretation of the Corps' regulations extending the CWA's reach to intrastate waters that "are or would be used as habitat by . . . migratory birds which cross state lines." 51 Fed. Reg. 41,217. In a separate subsection, the Migratory Bird Rule also extends jurisdiction to intrastate waters that "are or would be used as habitat for endangered species." Id. The subsection of the Rule applying to endangered species was not at issue in SWANCC and the Court did not specifically rule on this provision.

Shortly after the Court issued its ruling, regulated interests declared sweeping victory: SWANCChad invalidated the "Migratory Bird Rule" and clarified that the Corps has no power to regulate isolated, intrastate waters under the CWA. The decision shocked the environmental community and led to predictions that the Court would follow up with limits on federal jurisdiction over other environmental resources - particularly endangered species.

In SWANCC, the Solid Waste Agency of Northern Cook County sought to convert a 533-acre, abandoned sand and gravel pit into a regional dump. Initially, the Corps concluded that it did not have jurisdiction over the site because it "contained no 'wetlands' or areas which support 'vegetation typically adapted for life in saturated soil conditions.'" SWANCC, 531 U.S. at 164. Later, however, the Corps determined that the gravel pits had, in fact, become "waters of the United States" because "(1) the [gravel pit] had been abandoned . . .; (2) the water areas and spoil piles had developed a natural character; and (3) the water areas are used as habitat by migratory bird[s] which cross state lines." Id. at 164-165. On these facts, the Corps declared CWA section 404 permitting authority over the site pursuant to its 1986 "Migratory Bird Rule." Id. at 164 (citing 51 Fed. Reg. 41,217).

In response to the Court's decision, legal counsel for the Corps and the EPA issued a joint memorandum narrowly interpreting SWANCC's scope. The memorandum's only explicit, new direction is that "[Corps] field staff should no longer rely on the use of waters or wetlands as habitat by migratory birds as the sole basis for the assertion of [CWA] jurisdiction . . . ." Corps/EPA Memo, Jan. 19, 2001, at 2 (emphasis added). The memorandum advises that staff should consult agency legal counsel on a case-by-case basis where "nonnavigable, isolated, intrastate waters" are involved. See, e.g., Corps/EPA Memo, at 4. Other than these limitations, the Corps/EPA memorandum largely upholds all other regulatory bases for Corps jurisdiction over intrastate waters.

The Corps/EPA memorandum notes that several factors not addressed in SWANCC may still result in Corps jurisdiction, even in the absence of a demonstrated connection to navigable waters. See Corps/EPA Memo at 5. The Corps/EPA memo does not expressly address whether the endangered species portion of the migratory bird rule survived the SWANCC ruling. The Corps/EPA memorandum does state, however, that jurisdiction over isolated waters may exist if (1) their use, degradation or destruction could affect other waters of the United States, thus establishing a significant nexus between the isolated waters and the waters of the United States, or (2) their use, degradation or destruction might affect interstate or foreign commerce (including interstate recreational use, use for fishing or use by industry). Id.

In retrospect, the Corps' and EPA's narrow interpretation of SWANCC is consistent with the "as applied" nature of the Court's decision. In SWANCC, the Corps initially concluded the abandoned sand and gravel pit was not a jurisdictional wetland because it contained no vegetation adapted for saturated soil conditions. But later the Corps determined that the site was subject to Corps jurisdiction onlybecause migratory birds used the area. In the opening paragraph of SWANCC, the Court states that it is deciding whether the CWA may be fairly extended to "confer jurisdiction over an abandoned sand and gravel pit in northern Illinois which provides habitat for migratory birds." SWANCC, 531 U.S. at 162. In closing, the Court concludes, "We hold that [the Corps' regulation], as clarified and applied to petitioners [dump] site pursuant to the 'Migratory Bird Rule,' . . . exceeds the authority granted to respondents under [the CWA]." Id. at 174 (emphasis added).

Some members of the regulated community have also called for limiting the decision's scope. In some parts of the country (e.g., vernal pool habitats in central California), federally listed species may inhabit the "nonnavigable, isolated, intrastate waters" that were once clearly regulated by the Corps' pre-SWANCC interpretation of its Migratory Bird Rule. With CWA jurisdiction, the Corps could address impacts to these listed species through ESA Section 7(a)(2) consultation. Now, post-SWANCC uncertainty about the Corps' jurisdiction over these intrastate waters may force some project applicants to navigate the ESA's more burdensome Habitat Conservation Plan (ESA § 10) process to lawfully permit take of listed species.

Even with these emerging limits, the SWANCC decision has placed increased importance on state and local governments' efforts to regulate isolated wetlands. Many states are stepping forward. For example, on May 7, 2001, the Wisconsin Legislature enacted a comprehensive state law to protect its nonnavigable, isolated wetlands. Similarly, California's State Water Resources Control Board has issued post-SWANCC memoranda stating (1) that isolated wetlands remain fully subject to regulation under the state's Porter-Cologne Act, and (2) that the terms and conditions of the board's certifications under CWA Section 401 (state approval of discharges under federal CWA permits) remain effective as state orders, regardless of the Corps' post-SWANCC authorities.

Early SWANCC commentary also hinted that the decision signaled the Court's readiness to limit federal jurisdiction over endangered species. Recently, however - almost exactly one year after SWANCC - the Supreme Court again denied certiorari in a case asserting the Commerce Clause prevented the ESA from regulating intrastate species . See Building Industry Association of Superior California v. Norton, 247 F.3d 1241 (D.C. Cir. 2001), cert. denied, ___ U.S. ___,122 S.Ct. 913 (2002). In Building Industry, the Court declined to decide whether the U.S. Fish & Wildlife Service has constitutional authority to regulate three listed, vernal-pool species in California's Central Valley and Oregon - the Conservancy fairy shrimp, longhorn fairy shrimp and vernal pool tadpole shrimp. These species would also typically give the Corps CWA jurisdiction under the Migratory Bird Rule's endangered species provision. Building Industry represents the third time in recent years that the Court has declined to review Commerce Clause challenges to the ESA. See Nat'l Ass'n of Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997), cert. denied, 524 U.S. 937 (1998); Gibbs v. Babbitt, 214 F.3d 483 (4th Cir. 2000), cert. denied, 531 U.S. 1145 (2001).

The "as applied" nature of SWANCC, the Corp/EPA's narrowly drawn memorandum and the Court's refusal to grant certiorari in Building Industry may provide cautious insight into SWANCC's limits. Without a clear determination regarding federal authority to regulate listed species that depend on isolated wetlands, it is not clear that SWANCC's fact-limited holding should be categorically extended to preclude the Corps' jurisdiction over isolated wetlands containing such species - especially in circumstances where the wetlands might otherwise satisfy the Corps' jurisdictional requirements.