Recent State Wetlands Cases: The Continuing Battle Over the Proper Scope of Regulation

Controversies involving the propriety of regulating activities on privately-owned wetlands and coastal marshes have increasingly supplied grist for the judicial mill in the form of land use and takings cases. Private development of marshes, induced by the attractively low land capital costs, must continually buck governmental regulation fashioned to preserve our remaining wetlands. In the past few years, the resulting decisions have run the gamut, from upholding regulations that allow virtually no use of private marshes to striking down any restrictions on wetlands aterations.

The ecological and economic value of wetlands, both coastal and inland, has only recently received widespread recognition.¹ Wetlands are among the most productive of all environmental areas: it has been estimated that one acre of marsh produces ten tons of organic matter per year, compared with one and one half tons produced by a wheat field of the same size.² Coastal wetlands also blunt the erosive action of ocean waves and serve as natural water pollution control facilities. Inland wetlands act as flood control basins and groundwater recharge zones. Marshes provide fish breeding grounds: recent figures indicate that they support two-thirds of the commercially valuable fisheries on the East and Gulf Coasts.³ Despite recent regulatory efforts, however, centuries of neglect have allowed the destruction of nearly 50 percent of the wetlands existing at the time of America's colonization,⁴ mainly by navigation dredging, filling for residential and commercial development, and agricultural drainage.

State efforts at wetlands preservation are doubly noteworthy, primarily because, until recently, federal jurisdiction did not extend to most wetlands. Four sources provide statutory authority for federal wetlands regulation: the estuarine sanctuaries fund in the Coastal Zone Management Act of 1972; marine sanctuary designation under the Marine Protection, Research and Sanctuaries Act of 1975;⁵ § 10 of the Rivers and Harbors Act of 1899;⁶ and § 404 of the Federal Water Pollution Control Act Amendments of 1972,⁷ under which the Army Corps of Engineers issues permits for dredging and filling activities in all "waters of the United States." Although the Corps has recently taken an expansive view of its power to deny such permits, this ability is threatened by pending amendments to $404 that would retract the Corps' regulatory jurisdiction to activities in the "navigable waters" of the United States,⁸ the traditional [6 ELR 10126] scope of its regulatory authority under § 10 of the Rivers and Harbors Act. In this context, state wetlands decisions may again assume unusual importance.

Three State Cases

The diversity of judicial thought in wetlands cases is illustrated by recent decisions in the supreme courts of Georgia, Rhode Island, and Massachusetts. In State v. Ashmore,⁹ the Georgia supreme court reaffirmed the common law rule that title to a state's foreshore — the beach and marshland between the ocean's high and low water marks — is held by the state itself, and not by upland owners, despite an ambiguous 1902 Georgia statute that arguably conveyed title to the low water mark to private owners. While actually involving beach land, Ashmore affects several hundred thousand acres of both marsh and beach, and decreases the extent to which Georgia coastal wetlands need be protected only by the state's Coastal Marshlands Protection Act of 1970.¹⁰

J.M. Mills, Inc. v. Murphy,¹¹ decided by the Rhode Island supreme court, involved a challenge to the state Fresh Water Wetlands Act¹² on grounds of improper delegation of legislative power, denial of equal protection, and taking without compensation. The court, rejecting these allegations, held that both state agency and municipal consideration of applications for wetlands alterations are cloaked with sufficient standards to prevent arbitrary action, and that the statute's unique alternative compensation scheme, which allows a landowner to compel the state to acquire his land at its value as a wetland, is not confiscatory.

On the other side of the judicial coin is MacGibbon v. Board of Appeals (MacGibbon III),¹³ in which an exasperated Massachusetts supreme judicial court ordered the Town of Duxbury board to issue an excavation and fill permit to a coastal wetlands developer after having twice before had to chastise the board for improperly denying the permit.¹⁴ The court held preservation of the ocean food chain to be a legally insufficient reason for the board's denial, at least for plaintiffs' land, which lay mostly above the high water mark, while emphasizing that conditions attached to the permit could mitigate any resulting erosion or flooding. Seemingly troubled by the potentially dangerous implications of its holding for future wetlands preservation efforts, the court issued a supplementary opinion stating that its primary opinion interpreted only the scope of the town's zoning power and not other state and federal wetiands laws.

Institutional Arrangements

As population pressures build, land use decisions that were formerly made in the private sector with no obvious outward consequences come to assume more important dimensions. At one time, nuisance law provided a settlement mechanism sufficient to resolve most land use disputes. However, the recognition that land use decisions impact land beyond the immediate boundaries of the parcels in question has fostered the correlative notion that larger, more representative institutions may better declare land use policy. This concept is especially important in natural resource decisions, where diffuse public benefits often are inadequately represented in the face of more powerful private or parochial interests.¹⁵

This dissatisfaction with small constituency land use decisions concerning wetlands is evident in the three decisions descussed herein. In Mills, the court grappled with a wetlands statute that on its face differentiated between the powers of the state and local governments to deny a wetlands alteration permit.¹⁶ The state Department of Natural Resources could deny the permit "if in the opinion of the director, grant of such approval would not be in the best public interest." For municipalities, however, the denial power is seemingly unrestricted: "Such approval shall not be granted [by the director] if the city council or town council of the town within whose borders the project lies shall have disapproved" the application within the statutory time period. Given the apparent lack of standards to guide these administrative actions, the plaintiffs, who had been denied permission by the state to relocate part of a river on their property, sought to declare the statute invalid as an improper delegation of legislative power. The court, however, read into the state agency's authority the requirement that its decisions be based upon the policy of preserving wetlands, a legislatively-declared policy that also recognized the ecological and recreational importance of such areas.

This incorporation of standards into an otherwise largely unfettered administrative decision was not accomplished so smoothly for municipal wetlands decisions. The court blandly asserted, over a disbelieving dissent, that to read the statute

to confer upon local government the power to disapprove a proposed wetland change without regard to those same purpose and policy standards would be, in our opinion, a highly dubious if not absurd construction of that sentence and one we are therefore unable to accept. Thus, while there are no express limitations placed on a town's or city's authority under § 2-1-21, the same standards that control the director's determination obtain by implication to actions taken thereunder by the local governmental units.¹⁷

Not content with this partial judicial revision of the statute, the court legislated further by specifying that, even in the absence of statutory language, a landowner is entitled to notice and the opportunity to be heard and offer evidence in municipal consideration of wetlands applications.

The most plausible explanation for the court's action is that, in attempting to uphold the statute, it overreached [6 ELR 10127] its goal. In the court's view, local governments, no matter how well intentioned, could not be allowed a veto power over wetlands permits that might frustrate a more coordinated statewide policy. Therefore, any residual municipal arbitrariness had to be further reduced by reading into the statute the judicial review provisions otherwise applicable only to state agency decisions.

In MacGibbon III, the Massachusetts court took an even less solicitous view of local authority over wetlands, probably because its patience was worn thin. The court in 1964 (MacGibbon I¹⁸) had admonished the Duxbury board to consider the plaintiffs' application to excavate and fill the upland coastal marsh as exactly that, and not as an application for residential construction. Then in 1970 (MacGibbon II¹⁹), the court was again required to overturn the board's permit denial, on the grounds that the zoning bylaw, which generally prohibited wetlands alterations, allowed a special permit to be granted for coastal wetlands, and that the town's powers did not include preservation of private land for public benefit where no "practical" uses of the land remained.

In MacGibbon II, the court had upheld as adequate the standards employed by the town in exercising its discretion on the permit application. In MacGibbon III, the town employed this discretion to deny the permit because of the damage to the ocean food chain from filling in the plaintiffs' marsh and probable pollution from the plaintiffs' proposed sewage system. The court found this to be an ultra vires action, however, since the zoning enabling act at the time of MacGibbon's application did not provide for the establishment of a wetlands protection district²⁰ and denial of the excavation permit could not be based upon possible later denials of sewage and construction permits.

An analysis of MacGibbon III can proceed from several different vantage points. The case can be construed narrowly to apply only to towns that attempt to save wetlands without statutory authority. The inherently arbitrary nature of such a system which depends upon the whim of the zoning board benefits neither private property owners nor wetlands preservation advocates in the long run. However, the court tried to make clear in its supplementary opinion that the Massachusetts statutes relating to coastal wetlands, which establish a state-administered program or provide state-level review over local decisions,²¹ were not affected by its decision. Thus, MacGibbon III can be limited to a unique local statute and unusual facts. On the other hand, the opinion promises to foster dangerously fragmented wetlands decision making. Refusing to allow consideration of probable subsequent land uses during a fill permit proceeding disregards the purpose behind wetlands preservation. The filling of a wetland is a fait accompli, even though the owner may not thereafter be given permission to build on the fill. Indeed, in terms of a rational investment policy, it would be doubly ironic if the developer had invested in the fill project and destroyed the wetland, and subsequently were denied a construction permit on wetlands protection grounds.

Ashmore involved a situation somewhat different from the wetlands issues raised in Mills and MacGibbon: who, as between the state and upland landowners, has title to the foreshore? The common law rule places title to the foreshore in the state,²² although some states have statutorily ceded title to the adjacent landowners.²³ The question is of unusual importance, because the foreshore includes not only beach but also hundreds of thousands of acres of salt marshes.

Prior to 1902, Georgia adhered to the common law rule.²⁴ However, an ambiguously worded statute passed that year by the Georgia legislature specified that

the boundaries and rights of owners of land adjacent to or covered in whole or in part by navigable tide-waters … shall extend to low water mark in the bed of the water; provided, however, that nothing in this Act contained shall be so construed as to authorize such an exclusive appropriation of any tide-water, navigable or unnavigable, by any person whomsoever, as to prevent the free use of the same by others for purposes of passage and for the transportation of such freights as may be capable of being carried thereover.²⁵

Ashmore dealt with the effect of this provision, in a suit brough by the state alleging that 13 acres of accreted beach between the foreshore and a subdivision, upon which a developer wished to build condominiums, had been dedicated to public use. The court remanded the case for consideration of the dedication issue, after having declared that the statutory language quoted above granted property rights to adjacent landowners only to harvest oysters in foreshore tidal waters. The court reasoned that the statute overturned its 1902 decision,²⁶ which had reversed the conviction of a defendant who had taken oysters from an allegedly private tidal bed located in the foreshore.

Ashmore, even more so than Mills and MacGibbon, moves wetlands decision-making authority up the institutional ladder. Instead of scattered decisions based on conflicting private land uses, Georgia's tidal wetlands now come under state aegis. Presumably, this makes them subject to public trust considerations²⁷ whereby the state legislature, rather than an administrative delegatee, must ultimately be held accountable for their management.

The Takings Problem

Any analysis of environmental regulation must begin with an awareness of the constitutional requirement that private property cannot be taken without just compensation, keeping in mind Justice Holmes oft-quoted and oft-criticized statement in Pennsylvania Coal v. Mahon: "The general rule at least is, that while property [6 ELR 10128] may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking."²⁸ The takings problem is especially acute in the wetlands context, where putative public benefits derived from wetlands preservation are often subtle, and private economic losses are often dramatic. Even if the takings clause is viewed as a mechanism for spreading the cost of public benefits uniformly over society, regulation cannot be based merely on preserving general public rights, such as recreation or aesthetics, in wetlands or any other publicly-valuable land. In order to maintain private land in a natural state, government must also show that property or other interest held by other members of the public are harmed by the planned private use. This "cause of the harm" formulation has been relied upon in most recent cases sustaining wetlands regulations,²⁹ where flooding danger or fisheries disruptions would result absent the regulations.

This formulation entails a balancing of public rights and general societal benefits against private loss. Massachusetts has emerged as a leading exponent of this method, as illustrated in Turnpike Realty Co. v. Town of Dedham,³⁰ where the supreme judicial court upheld a flood plain building regulation that engendered an 88 percent of value loss to the plaintiff, since forestalling flooding harm to private property and expenditure of public flood relief monies was an overriding consideration. The Massachusetts court has also held,in Golden v. Board of Selectmen,³¹ that protection of marine fisheries through coastal wetlands preservation is a legitimate public purpose. Thus it is somewhat surprising to find the court in MacGibbon III holding that maintenance of the ocean food chain and flood prevention do not supply "legally tenable" grounds for Duxbury's denial of MacGibbon's wetland fill permit. MacGibbon's land lies mostly above mean high water. The court seized on this fact to distinguish Turnpike Realty on the flooding issue, and to declare that food chain maintenance, standing alone, could not supply sufficient public purpose to the regulation.

The court thus disallowed any aggregation of public benefits in a balancing test, and instead substituted the significantly more difficult threshold test of a municipality first demonstrating a "legally tenable" ground for its regulation. The only justification likely to meet this standard is prevention of substantial flooding harm by regulating land in a flood plain or below the high water mark. But more importantly, the court held that agricultural uses of marshes are not sufficiently remunerative to justify halting any development of the marsh notwithstanding the fact in this case that the value of MacGibbon's marsh, as a marsh, had increased five-fold since its purchase. Thus, the balancing test in Massachusetts has been crippled, since landowners may allege speculative losses when challenging wetlands regulations, even though the United States Supreme Court has held that diminution of such value is not a prime determinate in takings questions.³²

The takings challenge in Mills arose in a fashion quite dissimilar to MacGibbon III. In Mills, the plaintiffs sought to declare the Wetlands Act's unusual alternative compensation procedure unconstitutional per se, rather than only unconstitutional as applied to their property. The Act provides that if a wetlands owner prefers not to challenge a permit denial, he may "elect" to force the government to purchase his wetland, at its wetland value, but only after he has shown the court that

the proposed alteration would not essentially change the natural character of the land, would not be unsuited to the land in the natural state, and would not injure the rights of others….³³

While noting that a landowner would face a difficult task in proving these factors, the court sustained the provision, largely because it provided for judicial review and offered a remedy supplementary to the normal takings challenge.

What the court failed to realize, as the dissent pointed out, is that by proving his case under the above scheme the landowner has actually established that a taking occurred, while accepting lesser compensation. Such a scheme, which implicitly recognizes the difficulty of grounding a regulatory system solely on police power objectives, gives impetus to the search for alternative conceptual mechanisms for controlling land use.³⁴ Barring such innovative remedies, however, the Rhode Island statute exemplifies the effort to find intermediate compensation procedures that will eliminate the speculative value problem evident in cases like MacGibbon III.

Conclusions

MacGibbon III, Mills, and Ashmore did not advance any takings or land use doctrinal refinements. Indeed, the dust kicked up by MacGibbon's conceptual confusion may not settle for many years. Even though the MacGibbon court expressly rejected the allegation that its decision would frustrate other environmental laws, the opinion cannot help but have a chilling effect on administrative boldness in environmental regulation. In Rhode Island, the Fresh Water Wetlands Act survived intact. However, the outcome of future challenges to its compensation provisions may affect the willingness of other states to find innovative alternatives to eminent domain. Georgia's Ashmore decision heralds a tempting opportunity for effective coastal management, but whether in fact Georgia will live up to its newly-reclaimed public trust responsibilities remains to be seen. In sum, the growth of land use law in the wetlands context, as is evidenced by these decisions, continues only in fits and spurts.

1. See generally J. Teal & M. Teal, Life and Death of the Salt Marsh (1969); Binder, Taking Versus Reasonable Regulation: A Reappraisal in Light of Regional Planning and Wetlands, 25 U. Fla. L. Rev. 1, 18-30 (1972).

2. J. Teal & M. Teal, supra note 1, at 192-93.

3. Council on Environmental Quality, Sixth Annual Report 142 (1975).

4. Binder, supra note 1, at 26-27. It should be noted, however, that only one percent of Georgia's 400,000 acres of wetlands have been lost. Abbott, Some Legal Problems Involved in Saving Georgia's Marshlands, 7 Ga. St. B.J. 27 (1970).

5. 16 U.S.C. § 1461, ELR 41704; 16 U.S.C. § 1432(a), ELR 41821.

6. 33 U.S.C. § 403, ELR 41141. See Zabel v. Tabb, 430 F.2d 199, 1 ELR 20023 (5th Cir. 1970).

7. 33 U.S.C. § 1344, ELR 41124.

8. See Comment, Corps Confirms Policy Against "Unnecessary" Development in Wetiands, 6 ELR 10117 (June 1976).

9. 6 ELR 20438 (Ga. Sup. Ct. Feb. 24, 1976).

10. Ga. Code Ann. §§ 45-136 to -148.

11. 6 ELR 20455 (R.I. Sup. Ct. Feb. 26, 1976).

12. R.I. Gen. Laws §§ 2-1-18 to -24.

13. 1976 Mass. Adv. Shs. 143, 336 A.2d 239, 6 ELR 20444 (Jan. 9, 1976).

14. MacGibbon v. Board of Appeals, 347 Mass. 690 (1964); MacGibbon v. Board of Appeals, 356 Mass. 635, 255 N.E.2d 349 (1970).

15. See generally Sax, The Public Trust Doctrine in Natural Rescurce Law: Effective Judicial Intervention, 68 Mich. L. Rev. 471 (1970).

16. R.I. Gen. Laws § 2-1-21.

17. J.M. Mills, Inc. v. Murphy, 6 ELR at 20457.

18. MacGibbon v. Board of Appeals, 347 Mass. 690 (1964).

19. MacGibbon v. Board of Appeals, 356 Mass. 635, 255 N.E.2d 349 (1970).

20. MacGibbon v. Board of Appeals, 6 ELR at 20445 n. 1.

21. Mass. Gen. Laws c. 130, § 105; c. 131, § 40.

22. Borax Consolidated Ltd. v. City of Los Angeles, 296 U.S. 10 (1935); Shively v. Bowlby, 152 U.S. 1 (1893).

23. E.g., Massachusetts. See Note, Coastal Wetlands in New England, 52 B.U. L. Rev. 724, 732 (1972).

24. Johnson v. State, 114 Ga. 790, 40 S.E. 807 (1902).

25. Ga. Code Ann. § 85-1309.

26. Johnson v. State, supra note 24.

27. Shively v. Bowlby, supra note 22.

28. 260 U.S. 393 (1922). The Holmes formulation is extensively criticized in Sax, Takings and the Police Power, 74 Yale L.J. 36 (1964).

29. Candlestick Properties, Inc. v. San Francisco Bay Conservation and Dev. Comm'n, 11 Cal. App. 3d 557, 89 Cal. Rptr. 897, 3 ELR 20446 (1970); Potomac Sand & Gravel Co. v. Mandel, 226 Md. 358, 293 A.2d 241, 2 ELR 20466 (1972); Turnpike Realty Co. v. Town of Dedham, 362 Mass. 221, 284 A.2d 891, 3 ELR 20221 (1972); Sibson v. State, __ N.H. __, 336 A.2d 239, 5 ELR 20300 (1975); Just v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761, 3 ELR 20167 (1972).

30. 362 Mass. 221, 284 A.2d 891, 3 ELR 20221 (1972).

31. 358 Mass. 519, 265 A.2d 573 (1970).

32. Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962); cf. Consolidated Rock Products Co. v. Los Angeles, 57 Cal.2d 515, 370 P.2d 342, appeal dismissed, 371 U.S. 36 (1962).

33. R.I. Gen. Laws § 2-1-21(b).

34. Cf. Costonis, "Fair" Compensation and the Accommodation Power: Antidotes for the Taking Impasse in Land Use Controversies, 75 Colum. L. Rev. 1021 (1975).