National Environmental Enforcement Journal
Adjacency Not Basis for Coverage Under CWA Unless Wetland Involved
San Francisco Baykeeper et al. v. Cargill Salt Division
No. 04-17554 (9th Cir. Mar. 8, 2007)
Since the 1860s, Cargill and its predecessors have been involved in salt-making operations around the edge of San Francisco Bay in Alameda County, California. In the late 1970s, the United States acquired 15,000 acres of Cargill?s lands for inclusion in the Don Edwards San Francisco Bay Wildlife Refuge. However, Cargill retains an easement over 12,000 acres to continue its salt-making operation.
Manufacturing salt involves evaporating water from the Bay in a series of ponds. This operation produces waste residue that is heavily saline and contains other pollutants. To dispose of this waste product, Cargill maintains a 17-acre waste containment facility within the Refuge. The northern portion of the site contains several acres of piles of uncovered waste. During storms, rainwater carries some residue from this area to the southern portion, which is at a lower elevation, where the water drains into the pond. An earthen levee separates the southern edge of the pond from the Mowry Slough, a navigable tributary of San Francisco Bay. All parties agree that the waters of the Mowry Slough are ?waters of the United States,? covered by the Clean Water Act (CWA). At high tide, waters from the Slough have, on occasion, overtopped the levee and flowed into the pond.
In 1966, Baykeeper filed a citizen suit under the CWA, alleging that Cargill had, without a permit, discharged pollution into the pond and that the pond was included within the CWA?s ?waters of the United States.? In its first motion for summary judgment, Baykeeper alleged that the pond was within the purview of the CWA because of the Migratory Bird Rule. The district court agreed. While an appeal was pending in the Ninth Circuit, the U.S. Supreme Court issued its decision in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers (SWANCC), 531 U.S. 159, 174 (2001). In that case, the Court held that applying the Migratory Bird Rule to isolated intrastate waters exceeded the Corps? authority under the CWA. In light of SWANCC, the appellate court vacated the district court?s summary judgment and remanded for consideration of whether alternative grounds exist for CWA jurisdiction. San Francisco Baykeeper v. Cargill Salt Division, 263 F.3d 963 (9th Cir. 2001).
On remand, Baykeeper again moved for summary judgment, this time on the theory that the pond is within the coverage of the CWA because it is adjacent to Mowry Slough. Cargill argued, in opposition, that, under controlling regulations, adjacency provides a basis for CWA coverage only in the case of wetlands. The district court granted summary judgment to Baykeeper a second time after determining that ?bodies of water that are adjacent to navigable waters are ?waters of the United States? and are therefore protected under the Clean Water Act.? The district court found as undisputed facts that the pond was adjacent to Mowry Slough, that the soils between the pond and the slough are saturated and that the berm between the pond and slough leaked and allowed slough water to enter the pond at high tide. It reasoned that the characteristics that justify protection of adjacent wetland apply equally to adjacent ponds.
The parties then entered into a settlement agreement but Cargill preserved the right to appeal certain issues including the district court?s finding of CWA jurisdiction based on adjacency. Baykeeper waived the right to assert all jurisdictional theories other than the adjacent waters theory. The district court incorporated the terms of the settlement agreement in its final order and this appeal followed.
The court began its discussion by noting that Congress did not define the meaning of ?navigable waters? in the CWA other than these being ?waters of the United States.? Congress, thus, implicitly delegated policy-making authority to EPA and the Corps to determine the coverage of the act. These agencies have now issued nearly identical regulations that include some intrastate water bodies that are not navigable in the traditional sense of ?waters of the United States.? Current regulations protect tributaries of navigable-in-fact waters as well as ??wetlands? adjacent to waters (other than waters that are themselves wetlands).? 40 C.F.R. ¿ 122.2. ?Wetlands? are defined to mean
[A]reas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.
The regulatory definition is intended to be exhaustive; the regulation reads ?Waters of the United States . . . means.? It is also clear that the only areas that are defined as waters of the United States by reason of adjacency are ?wetlands.? The district court disregarded the unambiguous regulations because it felt that the same characteristics that justify protection of adjacent wetlands apply to adjacent ponds. The appellate court found this analysis improper.
Quoting from Chevron USA Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844 (1984), the appellate court noted that a ?court may not substitute its own construction of a statutory provision for a reasonable interpretation made by an agency.? There was no argument in the district court that EPA?s regulation is unreasonable nor can it be considered unreasonable for EPA to view wetlands as a special category.
The court noted that there is a tension between the purpose of authorized citizen suits and Chevron deference. Occasionally, a citizen sues because of a discharge EPA has elected not to regulate. Complete deference would foreclose such a suit. Therefore, the Ninth Circuit has determined that courts could decide whether a discharge of certain matter into navigable waters violates the CWA even if the regulating agency determined that the discharge was not subject to the requirement of a permit. Association to Protect Hammersley, Eld, and Totten Inlets v. Taylor Resources, Inc., 299 F.3d 1007, 1012-13 (9th Cir. 2002).
However, such an interpretation of a court?s authority involving citizen suits under the CWA does not justify a court denying deference to a formal regulation that construes the meaning of a statutory term that establishes the reach of the CWA. Deference is particularly suitable where the regulation involves conflicting policies and expert factual considerations for which the agencies are especially well suited. Washington Department of Ecology v. U.S. EPA, 752 F.2d 1465, 1469 (9th Cir. 1985).
Baykeeper acknowledges that the regulatory definition does not support the district court?s expansive construction. However, it argued that summary judgment was appropriate granted because ?the Supreme Court has repeatedly held that the CWA protects all water bodies with a ?significant nexus? to navigable waters.? The appellate court, however, disagreed with Baykeeper?s interpretation of recent Supreme Court decisions. In United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), the Court held that the Corps did not exceed its authority in including adjacent wetlands within the purview of the CWA despite their non-navigability. Sixteen years later, in SWANCC, the Court noted that isolated intrastate ponds, unlike wetlands, lack a significant nexus to navigable waters. However, it did not hold that the Corps must regulate non-navigable bodies of water with some nexus to navigable waters. Baykeeper also relied on the holding in Rapanos v. United States, 126 S. Ct. 2208 (2006). However, there is nothing in that decision that addressed the question of whether all water bodies with a significant nexus to navigable waters are covered by the CWA.
The appellate court, thus, concluded that there is nothing in these three decisions that requires or supports the view that the pond is a water of the United States simply because it is adjacent to Mowry Slough. Baykeeper argued that it is not the mere adjacency that puts it within the purview of the act; it is because the pond has a nexus to Mowry Slough. There are two problems with that argument. First, Baykeeper must show that it is unreasonable for EPA to confine adjacency to wetlands. Furthermore, the nexus in this case falls far short of the nexus that Justice Kennedy required in Rapanos:
[W]etlands possess the requisite nexus, and thus come within the statutory phrase ?navigable waters,? if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more easily understood as ?navigable.? When, in contrast, wetlands? effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ?navigable waters.?
Rapanos, 126 S. Ct. at 2248 (Kennedy, J., concurring) (emphasis added).
The court also noted that the key claim in this case was that Cargill discharged pollutants into the pond without a permit. There is no claim and only speculative evidence that pollutants were or could be discharged into the slough itself from the pond.
As a fallback, Bayview also argued that the pond qualifies for CWA protection as a waterbody whose use or misuse could affect interstate commerce and as a Tributary? of a protected waterbody 40 C.F.R. ¿122.2. However, neither of these theories was urged as an independent ground of jurisdiction in support of the recent summary judgment. Furthermore, it its settlement agreement Baykeeper waived the right to assert all jurisdictional theories ?other than the Adjacent Waters Theory upon which the District Court based its Jurisdictional Ruling.? Although Baykeeper argued that the adjacency theory was broad enough to encompass considerations other than mere physical proximity, the court determined that the district court did not rely on evidence of tributary status or effect on interstate commerce in its decision on the adjacency theory. The court thus concluded that Baykeeper had waived these alternative theories in its settlement agreement.
The court therefore reversed the grant of summary judgment to Baykeeper.
Published by the National Association of Attorneys General with the cooperation and support of the Office of Enforcement and Compliance Assurance of the U.S. Environmental Protection Agency.
Chief Counsel for Environment