Ebb & Flow of Wetland Regulations

By Brian E. Humphrey

In the early history of the United States, wetlands—those transitional areas between land and water such as marshes, swamps and bogs—were almost universally viewed as undesirable. However, their significant beneficial role in the overall health of the national ecosystem was gradually recognized, which ultimately led to their protection under the Clean Water Act (the “CWA”) in the 1970s. In an effort to balance the competing goals of continuing economic development and protecting the natural environment, the federal government adopted a policy of “no net loss of wetlands.” Recent court decisions and changes in regulations have produced mixed results.

Clean Water Act Influence

The CWA is applicable to all “navigable waters,” which is defined as the “waters of the United States, including territorial seas.” Courts have interpreted this language to mean that the federal government’s authority over water reaches to the fullest extent permissible under the Commerce Clause of the Constitution. Thus, if a waterway is used in interstate or foreign commerce, or if it connected to another waterway used in the interstate or foreign commerce, it is one of the “waters of the United States.” The broad reach of the federal government under this definition was illustrated by a regulatory interpretation in the 1980s that an isolated pond or small wetlands area that is not connected to any larger body of water could still be subject to the CWA if it is used, or even if it is simply likely to be used, by waterfowl migrating from one state to another or to a foreign country. This became known as the Migratory Bird Rule.

The CWA generally prohibits the discharge of “pollutants” into navigable waters without a permit. Most relevant to wetlands is Section 404 of the CWA, which authorizes the U.S. Army Corps of Engineers (subject to EPA oversight) to issue permits for the discharge into navigable waters of “dredged or fill material.” This term includes mud, dirt, rocks, sand, and vegetation, and is not limited to what one might ordinarily think of as a pollutant.

The penalties for violating the permit requirements of the CWA can be quite severe. The CWA authorizes the imposition of civil penalties, administrative penalties, injunctions, orders of restoration, and criminal sanctions including fines of up to $50,000 per day of violation and/or imprisonment for up to three years.

The Permit Process

The permit application process is quite involved and lengthy, often taking up to a year or more. The wetlands area to be filled must be delineated and evaluated for its ecological significance, requiring the expertise of professional wetlands consultants. In furtherance of the “no net loss of wetlands” principle, the Corps often requires that the permitee mitigate the loss of wetlands by creating new wetlands elsewhere. The ratio of the area of new wetlands to the area of filled wetlands may be as low as 1:1 if the new wetlands are created in an area contiguous to the filled wetlands. However, the ratio is usually something more like 2:1, 3:1, 4:1, or even higher depending upon the distance from the filled wetlands and its ecological significance. An entire industry of “mitigation banking” has arisen to facilitate the creation of new wetlands for Section 404 permit applicants. The cost is generally several thousand dollars per acre for the creation and maintenance of wetlands in this way.

Because the individual permit process is so lengthy and difficult, the Corps has established several Nationwide Permits (“NWPs”) for relatively small and routine matters. Although notification is required in some cases, no application is needed for an NWP as long as the activity meets the specified conditions. The NWPs were recently overhauled by the Corps, the likely effect being a reduction in the overall availability of NWPs and an increase in the workload of the Corps.  This may result in even lengthier approval time for individual permit applications, but it should also have the effect of supporting the “no net loss of wetlands” goal.

The Tulloch Rule

All recent developments, however, have not been favorable towards the “no net loss” goal. Sharp observers will note that the CWA prohibits the “discharge” of pollutants. Therefore, digging a channel to drain a wetlands area (which could then be filled once it is dry land) would seem to be technically outside the reach of the CWA because no discharge of pollutants into water is involved in the activity. Sharper observers, however, will note that the act of digging mud out of wetlands always results in a “discharge” of some incidental fallback of mud and other dredged material. In 1993, the EPA and the Corps issued a regulation, which became known as the “Tulloch Rule,” that expressly asserted federal regulatory jurisdiction over any incidental fallback of dredged material.

The Tulloch Rule was challenged by the American Mining Congress and the National Association of Home Builders, which resulted in an opinion from the U. S. Court of Appeals for the D.C. Circuit in 1998 that invalidated the Tulloch Rule. The court stated that the Tulloch Rule impermissibly expanded the scope of the CWA because “incidental fallback” returns the dredged material to virtually the same spot from which it came, so it does not result in the addition of pollutants to navigable waters.

In the wake of the invalidation of the Tulloch Rule, it has been reported that tens of thousands of acres of wetlands have been ditched and drained. The EPA and Corps have recently responded with a revised rule stating that they will regard any use of mechanized earth-moving equipment to conduct ditching or channelizing in navigable waters as resulting in a regulatory discharge (i.e., one requiring a permit) unless project-specific evidence shows that the activity results in only an incidental fallback. Additionally, the EPA has warned developers that it will increase its scrutiny of ditching and channelizing activity. While these responses from the EPA and Corps should slow the rate of wetland loss through draining activity, there is no question that the invalidation of the Tulloch Rule was a significant blow to wetlands protection.

For The Birds

Another setback to wetlands protection was the Supreme Court’s invalidation of the Migratory Bird Rule in the case of Solid Waste Agency of Northern Cook County v. U. S. Army Corp of Engineers (“SWANCC”) in 2001. In that case, a consortium of suburban Chicago municipalities sought to fill some man-made ponds at an abandoned quarry site for use as a sanitary landfill. The ponds were not connected to any other navigable waters, but the Corps asserted jurisdiction over the site because the ponds were sometimes used by migratory birds. In a 5-4 decision, the Supreme Court sided with the municipalities and said that the ponds were a “far cry” from the kind of large or navigable bodies of water that Congress intended to protect in the CWA. Thus, the SWANCC decision calls into question the jurisdiction of the Corps and the EPA over any isolated waters where those agencies have traditionally asserted authority.

In the wake of the apparent weakening of federal authority over wetlands by virtue of the invalidation of the Tulloch Rule and the Migratory Bird Rule, some states have taken measures to strengthen their own wetlands protection regulations. Unfortunately, many states lack sufficient budgets to fund comprehensive permit review and enforcement programs like the federal system, so not all states have separate wetlands protection laws. However, any developer planning to fill or drain wetlands must be sure to check state laws and municipal ordinances prior to undertaking any action to avoid getting caught up in a regulatory quagmire. Like wetlands themselves, the laws and regulations governing the development of wetlands are in a constant state of flux with boundaries that are sometimes difficult to define.

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