Comprehensive Wetlands Protection: One Step Closer to Full Implementation of § 404 of the FWPCA

A recent court ruling has brought one step closer to resolution the long-simmering dispute between the Army Corps of Engineers on the one hand and EPA, the Department of Justice, and numerous environmental groups on the other, concerning the proper scope of federal regulatory jurisdiction over dredge and fill activities throughout the nation. The Corps' position has been that § 404 of the Federal Water Pollution Control Act Amendments of 1972 does not significantly expand the Corps' traditionally limited jurisdiction over the depositing of dredged or fill material in "navigable waters." EPA and several environmental groups have contended, however, that § 404 does indeed enlarge the scope of the Corps' fill jurisdiction so as to cover such projects in "waters of the United States," a much broader category of water resources including for instance, environmentally-critical, non-tidal, inland wetlands.

The Corps' refusal to accept this expanded jurisdiction in its initial regulations governing the issuance of dredge and fill permits was challenged in federal district court by the Natural Resources Defense Council (NRDC) and the National Wildlife Federation. The primary motivation behind both the enactment of § 404 and the filing of the lawsuit challenging the Corps' implementation of that provision was the protection of the nation's rapidly dwindling wetlands areas. These areas serve a number of vital ecological functions, including fish and shellfish propagation, recharge of ground water supplies, natural flood control, biological and chemical water purification, and wildlife habitat. Yet according to the National Wildlife Federal, the United States has already lost 40 percent — 45 million acres — of its wetland resources, largely to filling projects.

In the district court, the two environmental groups argued that the Corps' interpretation of the scope of its regulatory jurisdiction under § 404 was unduly restrictive and seriously frustrated the statute's implementation. The court agreed with the plaintiff's contentions and on March 27, 1975, ordered the Corps to promulgate revised regulations recognizing the statute's full regulatory mandate.¹

Since 1899 the dredging or filling of "any navigable water of the United States" has been unlawful under § 403 of the Rivers and Harbors Act² if done without a permit from the Corps of Engineers. The concept of "navigable waters of the United States" has evolved considerably through judicial and administrative interpretation since the Rivers and Harbors Act became law, however. As most recently defined by the Corps for administrative and regulatory purposes, the term includes, up to the mean high water line or mean higher high water line on the Pacific coast, "those waters which are presently, or have been in the past, or may be in the future susceptible for use for purposes of interstate or foreign commerce," and "all water bodies subject to tidal action."³

Section 404 of the Federal Water Pollution Control Act Amendments of 1972 (FWPCA Amendments) reinstituted the "filling" half of the permit program by making unlawful the discharge of dredged or fill material into "the navigable waters" without a permit.⁴ [5 ELR 10100] Although § 404 accorded the Corps primary responsibility for issuing filling permits, EPA was given the power to overrule the Corps on permit approvals and deny or restrict discharges at a specific site if the agency finds, after notice and opportunity for public hearings, that the discharge in question will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas, wildlife, or recreational areas. In a significant departure from previous federal water pollution control law, however, § 502(7) of the FWPCA Amendments define the term "navigable waters," as used throughout the statute, as "the waters of the United States, including the territorial seas."⁵

The legislative history demonstrates quite clearly that this departure represented a deliberate congressional attempt to expand the regulatory scope of the federal water pollution control effort. The conference report stated the intent behind this new definition as follows:

The Conferees fully intend that the term 'navigable waters' be given the broadest possible constitutional interpretation unencumbered by agency determinations which would have been made or may be made for administrative purposes.⁶

This point was further emphasized by Congressman Dingell (D.-Mich.) on the floor of the House just prior to the vote which enacted the FWPCA Amendments:

[T]he conference bill defines the term 'navigable waters' broadly for water quality purposes. It means all 'the waters of the United States' in a geographical sense. It does not mean 'navigable waters of the United States' in the technical sense as we sometimes see in some laws.

Thus, the new definition clearly encompasses all water bodies, including main streams and their tributaries, for water quality purposes. No longer are the old narrow definitions of navigability, as determined by the Corps of Engineers, going to govern matters covered by this bill.⁷

In its proposed regulations⁸ for governing the issuance of permits for activities in navigable or ocean waters, published in response to enactment of the FWPCA Amendments, the Corps implicitly accepted this expanded regulatory role by juxtaposing its existing definition of "navigable waters of the United States" (which limits its jurisdiction under the Rivers and Harbors Act) with a definition of "navigable waters" (for the purposes of its filling jurisdiction under § 404) as "waters of the United States, including the territorial seas." But when the final revised permit regulations were promulgated on April 3, 1974,⁹ the Corps defined both terms synonymously as waters which are "subject to the ebb and flow of the tide and/or are presently, or have been in the past, or may be in the future susceptible for use of purposes of interstate or foreign commerce." The Corps' jurisdiction under § 404 was thereby limited to those waters already under the Corps' regulatory authority before the Amendments were enacted.

The Corps' restrictive interpretation of its jurisdictional responsibilities under § 404 drew swift responses from both EPA and the Justice Department. EPA, which shares permit authority under § 404 with the Corps, had already arrived at its own definition of "navigable waters" as that term is used in the FWPCA Amendments. In a February 6, 1973 memorandum to all Regional Counsels, John R. Quarles, Jr., at the time Assistant Administrator for Enforcement and General Counsel, stated that "navigable waters" means waters of the United States, including the territorial seas. According to the memorandum the following waters are "waters of the United States":

(1) All navigable waters of the United States;

(2) Tributaries of navigable waters of the United States;

(3) Interstate waters;

(4) Intrastate lakes, rivers and streams which are utilized by interstate travelers for recreational or other purposes;

(5) Intrastate lakes, rivers and streams from which fish or shellfish are taken and sold in interstate commerce; and

(6) Intrastate lakes, rivers and streams which are utilized for industrial purposes by industries in interstate commerce.¹⁰

It is thus not surprising that EPA responded quickly and critically to the Corps' final revised regulations. A June 5, 1974 memorandum from EPA's Office of Enforcement and General Counsel stated that the regulations "could substantially undermine our efforts to assert jurisdiction under the [FWPCA Amendments]." The memorandum was particularly critical of the Corps' definition of navigable waters:

These regulations set forth a definition of 'navigable waters' which we believe substantially restricts our jurisdiction under the Water Act. The statute defines 'navigable waters' to mean 'waters of the United States.' The word 'navigable' was intentionally removed from the definition by the Conference Committee. It has been our consistent position that the omission of the word 'navigable' from this definition in Section 502 of the [Act] was intended to eliminate all restraints which would otherwise be imposed on jurisdiction by the need to determine navigability.¹¹

[5 ELR 10101]

Two weeks later this position was conveyed to the Corps in a letter from the Administrator to the Chief of Engineers.¹²

The Justice Department also took issue with the Corps' regulations. In an August 16, 1974 letter to the Corps' Office of General Counsel, the Assistant Attorney General for Land and Natural Resources asserted that:

The legislative history of the Act shows that Congress did not intend to limit the government's jurisdiction for environmental protective purposes to the same line of mean high water which limits the Corps' jurisdiction for navigational protective purposes.¹³

The House Committee on Government Operations gave further support to the position of EPA and the Justice Department in a report criticizing the Corps' refusal to accept its broadened responsibility under § 404:

Congress intended the term 'navigable waters' in the [FWPCA Amendments] to be construed broadly and to encompass many water areas heretofore not protected by the 1899 Act. But the Corps has resisted this congressional intention.¹⁴

The Corps steadfastly refused to rescind or modify the regulations, and on August 16, 1974, the Natural Resources Defense Council and the National Wildlife Federation brought suit challenging the rules. After reciting the objections of EPA, the Justice Department and the House Committee to the scope of the final regulations, the plaintiffs argued that the restricted definition of "navigable waters" in the regulations conflicted with the plain meaning of the FWPCA Amendments, and with their legislative history. Plaintiffs also pointed out that this definition was at odds with several recent court decisions which have held that the statute extends the reach of federal regulatory authority over water pollution beyond the classical limitation of navigability.¹⁵

In contending that the situation created by the jurisdictional disagreement between EPA and the Corps was untenable, the plaintiffs cited the case¹⁶ of a developer who was filling areas both above and below the mean high tide line. EPA issued a stop-work order prohibiting further filling in these areas until a § 404 permit was obtained from the Corps. Upon inquiring about the need for a permit, the developer was informed by the Corps that under its interpretation of the statute no permit was necessary for activities above the mean high tide line. The developer was therefore left in the position of not knowing whether to commence work in reliance on the Corps' opinion and risk further sanctions from EPA in the form of a civil action under § 309 seeking injunctive relief or a fine, or to abandon the project. The confusion which this failure to achieve a uniform federal regulatory policy toward filling activities creates among developers, landowners, and the federal regulators serves to facilitate the continued loss of the nation's environmentally vital wetland areas. EPA's enforcement powers under § 309, while useful against projects involving particularly egregious wetlands destruction without a permit, are much too costly and time-consuming to serve as an alternate means of regulating all fill projects throughout the nation. Plaintiffs therefore asked the court to order the Corps to revise is regulations relating to the implementation of § 404 by adopting a new definition of "navigable waters" consonant with the terms and purposes of the FWPCA Amendments.

The court accepted the plaintiffs' arguments, and granted their motion for partial summary judgement on March 27, 1975. The Declaration and Order of Final Judgement¹⁷ stated that Congress, by defining the term "navigable waters" in § 502 of the FWPCA Amendments to mean "the waters of the United States," asserted federal jurisdiction over the nation's waters to the maximum extent permissible under the Commerce Clause. Accordingly, as used in the statute, the term is not limited to the traditional tests of navigability. The Corps was declared to be without authority to amend or change this statutory definition of navigable waters, and therefore to have acted in derogation of its responsibilities under § 404 by adopting the definition of navigability contained in the April 3, 1974 regulations. The court then ordered the Corps to publish proposed and final regulations clearly recognizing the full regulatory mandate of the statute.

The Corps wanted to appeal the decision, but was prevented from doing so by the Justice Department, which had acted as the Corps' counsel in the case and felt that the court's ruling represented a proper interpretation of the law. This disparity in viewpoint between client and counsel was evidenced earlier by a March 25, 1975 letter¹⁸ from the Corps' General Counsel to the Assistant Attorney General handling the case. The letter noted that the complex questions at issue on the case were the subject of an interagency [5 ELR 10102] dispute, and then went on to request that the Department raise certain arguments, centering on the difference between dredged and fill material and other pollutants, and the discretionary nature of § 404. The Corps felt that these positions had not been adequately developed in the briefs filed on its behalf. The court handed down its decision two days after the letter was written, however, effectively mooting the request.

In compliance with the Court order, the Corps, on May 6, 1975, published proposed revised regulations¹⁹ governing its permit jurisdiction under § 404. Claiming that the meaning of the term "waters of the United States" as used in the FWPCA has never been further defined by statute or court decision, the Corps published the proposal in the form of four alternative versions, saying in effect that it had no sound legislative or judicial guidance as to which one to choose.

Alternative I incorporates EPA's definition of "waters of the United States" with the addition of intrastate lakes, rivers and streams which are used in the production of agricultural commodities sold or transported in interstate commerce, and leaves primary permit-issuing responsibility with the Corps. Alternative II adopts a slightly expanded version of the Corps' pre-existing definition of navigable waters, including tidal waters and all inland navigable waters and their primary tributaries up to their headwaters. Under this option, the Corps would retain primary permit-issuing authority, but no § 404 permits would be required for the discharge of less than 100 cubic yards of dredged or fill material. Alternative III uses the broad definition of "waters of the United States" adopted by Alternative I, but makes the states responsible for preliminarily evaluating permit applications and then forwarding them to the Corps. Under this option, the Corps would not process an application or issue a permit unless the state had voiced its lack of objection to the discharge in question, while a permit would ordinarily be issued following a favorable state determination. Alternative IV, which the Corps acknowledged it favors, adopts both the limited jurisdicitonal definition of Alternative II and the preliminary state certification procedure of Alternative III.

Publication of the proposals was accompanied by a press release which stated that under some of the proposed regulations (i.e., Alternatives I and III), "Federal permits may be required by the rancher who wants to enlarge his stock pond, or the farmer who wants to deepen an irrigation ditch or plow a field, or the mountaineer who wants to protect his land against stream erosion." The release also asserted that "[u]nder the broad interpretation of the 1972 FWPCA Amendments [Alternatives I and III], millions of people may be presently violating the law," and thus subject to a large fine.

The Corps' press-oriented hyperbole had two simultaneous and predictable results. It aroused a political backlash from farmers and stockmen, which led to the initiation of efforts in Congress to specifically define both "navigable waters" and "waters of the United States." And it produced charges from EPA and irate environmental groups that the Corps was deliberately misrepresenting both the import of the court order and the prospective effect of the proposed regulations in order to incite a political push to undo the court's ruling. NRDC and nine other environmental organizations charged the Corps with launching "a nationwide scare campaign" and EPA Administrator Russell Train, in a sharply worded letter,²⁰ demanded that the Chief of Engineers "take immediate action to correct the misunderstandings which your department's public statements have created." EPA, according to Train, was "particularly concerned that the faulty impression that farmers must obtain permits whenever they plow a field be corrected. Since this was clearly not contemplated by either the Corps or EPA and is not required by the statute, we fail to understand how such a statement could appear in this press release."²¹

EPA and the environmental groups both believe that of the four proposals Alternative I comes closest to embodying the full regulatory mandate of the FWPCA. But they disagree with the Corps and each other as to the potential scope of this alternative. While admitting that a rice farmer who dikes, levees, and floods his fields would need a permit for new fields put under cultivation, EPA still strenuously denies that a permit would be required for plowing by the ordinary farmer, of for the alteration of stock ponds. NRDC does recognize that there are some problems with Alternative I as proposed, however. In its formal comments on the proposed rules, the environmental group recommended certain modifications designed to bring that alternative more fully into line with the statutory mandate, while at the same time keeping the § 404 program manageable. One suggested change was that wetlands and lakes smaller than one acre in surface area should not be included in the definition of "waters of the United States." NRDC also recommended that the Corps' proposed definition of dredged and fill material be modified to exempt from regulation discharges below a certain minimum quantity, but that this de minimis discharge exemption level should not exceed 100 cubic yards.

In view of the legislative history of the FWPCA Amendments and several recent court decisions²² delineating the scope of federal regulatory jurisdiction under the statute, it is clear that Alternative I, with minor modifications such as those suggested by NRDC, represents the proper interpretation of the statutory requirements and a reasonable response to the statute's [5 ELR 10103] regulatory mandate. The Corps, however, favors adoption of Alternative IV and asserts that the broader interpretation of its responsibilities embodied in Alternative I would require 1,750 additional employees and an initial expenditure of $53 million.

The motivation behind the Corps' recalcitrant refusal to accept the proper interpretation of its statutory responsibilities is hard to pinpoint. In Zabel v. Tabb,²³ an early and important case in the development of environmental law, the Corps fought for and won the right to deny a dredge and fill permit application on environmental grounds alone, despite the traditional limitation of the agency's decision-making criteria in such instances to considerations relating to navigation, flood control and hydro-electric power generation. After some initial battles with environmentalists, the Corps also became one of the first federal agencies to respond energetically to NEPA's procedural requirements. The agency's behavior regarding the interpretation of § 404 is thus a surprising throwback to the old navigation-oriented Corps. This reversion is no doubt at least partially due to fears regarding increased budgetary and staffing needs. One possible additional explanation, however, is that while the Corps could easily accept the addition of environmental considerations to its existing decision-making criteria for issuing fill permits in navigable or tidal waters traditionally under its jurisdiction, the agency objected strongly to having that jurisdiction itself greatly expanded to include areas, such as inland wetlands, over which the Corps has no regulatory experience.

This viewpoint was reflected in the arguments which the Corps requested the Justice Department to present more adequately before the district court. In its March 25 letter,²⁴ the Corps asserted that in enacting § 404 Congress intended to carve out a narrow exception to the National Pollutant Discharge Elimination System permit program established by § 402. The purpose of this exception, according to the Corps, was to allow the agency to continue to protect waterways subject to its traditional navigable waters jurisdiction, and to extend, at its discretion, such protection to additional waterways and wetlands only insofar as its budgetary and personnel resources would allow. The letter also contended that portions of the legislative history and other sections of the statute show that Congress considered dredged and fill materials to be qualitively different from other water pollutants and even went so far as to argue that the purpose behind enactment of § 404 was essentially navigational.

While this letter failed to influence the Justice Department's handling of the litigation, it now appears to be having a delayed impact on the Department's position in the long-standing interagency dispute over § 404 between the Corps and EPA. The Corps recently won the support of the Justice Department and the Office of Management and Budget (OMB) for a compromise solution to the dispute which would have the practical effect of giving the Corps basically what it argued unsuccessfully for in the district court. Under the proposed compromise, EPA's view of the scope of § 404 would be accepted as correct by all parties, but the Corps would continue to exercise regulatory jurisdiction over filling activities only within navigable waters as traditionally defined. EPA would be responsible, under its broad § 402 authority for the regulation of point source discharges of all pollutants, for the regulation of filling activities in all "waters of the United States" not covered by the Corps' traditional navigable waters jurisdiction.

EPA is not pleased with this solution, viewing it as probably illegal under the statute and as a final Corps attempt to avoid shouldering the full responsibilities of § 404. The agency believes that the Corps, if left to its own devices, would largely neglect the regulation of dredged and fill material discharges for the purposes of environmental protection. A strong set of regulations implementing § 404, however, in conjunction with adequate supplementary personnel, funding and EPA's permit oversight and veto authority, would force the Corps to regulate vigorously such discharges for the protection of the nation's wetland resources. On the basis of this belief and its feeling that the clear intent of the statute should be carried out, EPA has thus far refused to agree to the OMB and Justice Department-backed compromise.

The Corps remains adamant in its opposition to accepting any expansion of its regulatory responsibilities under § 404, however, and apparently intends to adopt Alternative IV from among its various proposed regulations, despite the fact that this alternative clearly does not comply with the district court's order. If Alternative IV is adopted in the final regulations, now due to be promulgated on July 26, 1975, NRDC is certain to seek a ruling from the court that the regulations do not constitute compliance with its March 27 order because they do not recognize the full regulatory mandate of § 404. And if such a decision is forthcoming, the entire rulemaking proceeding would have to be repeated.

The Corps' apparent motive in playing this delaying game is twofold. First, it may enable the Corps to out-last EPA's ability to hold off the pressures from OMB and the Justice Department for a compromise. Second, it buys time for the movement in Congress to amend the FWPCA and relieve the Corps of its additional § 404 responsibilities.

Some observers have been struck by the similarity between the Corps' conduct in this case and the Federal Highway Administration's (FHWA) response to the Second Circuit's ruling in Conservation Society of Southern Vermont v. Secretary of Transportation.²⁵ FHWA, employing an obdurately legalistic reading of the court's holding that delegation of EIS preparation to state officials [5 ELR 10104] is illegal under NEPA, chose to halt all highway projects in the three second circuit states rather than develop acceptable guidelines for state participation in the federal EIS preparationprocess. This move was quite obviously designed to generate political pressure on Congress for an amendment to NEPA legitimizing EIS preparation by state agencies, and has in fact been fairly successful in doing so.²⁶

Whether such a ploy will work for the Corps in this instance, however, depends on the strength of EPA's arguments against the compromise, and the agency's staying power in this new manifestation of the old interagency dispute. It also depends on the ability of the Congress to withstand self-serving agency efforts to win modifications in statutorily-mandated responsibilities regarding environmental protection.²⁷

For the time being, however, the hiatus in effective federal protection of inland wetland areas from filling will go on as the nation continues to pay a high price for the Corps' recalcitrance in the form of irreversible loss of vital environmental resources. This situtation is doubly unfortunate, because in the words of then-Attorney General William Saxbe,

[I]f we fail to save the wetlands, we will be losing more than an economic and aesthetic asset that can never be re-created. The loss may also signal an impending and crushing defeat in the larger effort to maintain an environment that civilized man can inhabit.²⁸

1. Natural Resources Defense Council, Inc. v. Callaway, 5 ELR 20285 (D.D.C. Mar. 27, 1975).

2. 33 U.S.C. § 403, 2 ELR 41141.

3. 37 Fed. Reg. 18289 (Sept. 9, 1972), ELR 46301.

4. 33 U.S.C. § 1344, ELR 41123.

5. 33 U.S.C. § 1367, ELR 41125.

6. H.R. Rep. No. 1465, 92d Cong., 2d Sess. 144 (1972); S. Rep. No. 1236, 92d Cong., 2d Sess. 144 (1972).

7. 118 Cong. Rec. 9124-25 (daily ed. Oct. 4, 1972).

8. 38 Fed. Reg. 12217 (May 10, 1973).

9. 39 Fed. Reg. 12115 (Apr. 3, 1974).

10. Memorandum to All Regional Counsels from John R. Quarles, Jr., Asst. Administrator for Enforcement and General Counsel, Feb 6, 1973, ELR 46318.

11. Memorandum of Jeffrey H. Howard, Office of Enforcement and General Counsel, EPA, June 5, 1974.

12. Letter from John Quarles for Russell Train, Administrator, to Lt. Gen. W. C. Gribble Jr., Chief of Engineers, June 19, 1974.

13. Letter from Wallace H. Johnson, Asst. Attorney General, Land and Natural Resources, to Manning E. Seltzer, Office of General Counsel, Army Corps of Engineers, August 16, 1974.

14. House Comm. on Governmental Operations, Our Threatened Environment: Florida and the Gulf of Mexico, H.R. Rep. No. 1396, 93d Cong., 2d Sess. 24 (1974).

15. United States v. Holland, 373 F. Supp. 665, 4 ELR 20710 (M.D. Fla. 1974); United States v. Ashland Oil and Transportation Co., 364 F. Supp. 349, 4 ELR 20185 (W.D. Ky. 1973), aff'd, __ F.2d __, 4 ELR 20784 (6th Cir. 1974).

16. E.P.A. Region III v. Caine, Administrative Order No. 74-184 (E.P.A. Aug. 23, 1974).

17. Natural Resources Defense Council, Inc. v. Callaway, 5 ELR 20285 (D.D.C. Mar. 27, 1975).

18. Letter from Charles D. Ablard, General Counsel, to Wallace H. Johnson, Asst. Attorney General, Mar. 25, 1975.

19. 40 Fed. Reg. 19766 (May 6, 1975).

20. Letter from Russell E. Train, Administrator, to Lt. Gen. W. C. Gribble, Jr., Chief of Engineers, May 16, 1975.

21. Id.

22. Supra, n. 15.

23. 430 F.2d 199, 1 ELR 20023 (5th Cir. 1970).

24. Supra, n. 18.

25. 5 ELR 20068 (2d Cir. 1974).

26. See Comment, Congress Under Pressure to Amend NEPA to Allow State Participation in Impact Statement Preparation, 5 ELR 10081 (June 1975).

27. The following seven amendments to the statute, each of which would effectively undo the district court's ruling, have already been introduced in the Congress: S. 1843, S. 1846, H.R. 6072, H.R. 6375, H.R. 6727, H.R. 6935, and H.R. 7441.

28. Address by Attorney General Saxbe, Conference on the Protection of Gulf Coast Wetlands, July 18, 1974.