Client Alert Newsletter

High Court Denies Review of Post-Rapanos Wetlands Decision

On October 9, the U.S. Supreme Court declined review of the First Circuit's wetlands decision in Johnson v. United States. In doing so, the Court passed upon an opportunity to clarify its June 2006 ruling in Rapanos v. United States, a decision addressing how closely wetlands must be connected to surface "waters of the United States" to be regulated by the U.S. Army Corps of Engineers (the "Corps") under Section 404 of the Clean Water Act ("CWA"). While Rapanos purported to set forth a controlling standard for lower courts to apply in determining which wetlands are subject to CWA regulation, the decision lacked a clear majority consensus.

Rapanos was a split decision that included two opinions each garnering four votes: Justice Scalia's opinion, describing a jurisdictional standard requiring a connection to relatively permanent surface waters; and Justice Stevens' opinion, providing a standard that would find jurisdiction where any hydrological connection to surface water exists. Justice Kennedy, however, issued an opinion that concurred with the Scalia result to reverse and remand the case, but indicated that the proper jurisdictional standard was the existence of a "significant nexus" between the wetlands and surface waters, to be determined on a case-by-case basis. Because Rapanos lacked a clear majority consensus on the required connectivity of wetlands to surface waters to invoke CWA jurisdiction, lower courts have been left to their own interpretation of what standard controls.

The First Circuit Johnson litigation is one such case. The initial Johnson dispute, decided by the U.S. District Court of Massachusetts in January 2005 and prior to the Rapanos decision, involved cranberry
farmers located in Carver, Massachusetts, who were discharging dredged and fill material into wetlands to construct, expand and maintain their cranberry bogs. The farmers believed that the wetlands at issue were not "regulated" and therefore did not seek a Corps permit for their activities. The district court disagreed, finding that the areas filled were indeed within Corps jurisdiction and that by making unpermitted discharges, the farmers had violated the CWA. Accordingly, the farmers were ordered to pay a $75,000 civil fine and to restore the wetlands at an estimated cost of approximately $1.1 million.

While the First Circuit initially affirmed the district court's ruling that the wetlands were subject to CWA regulation, that decision was issued prior to the Rapanos ruling. Accordingly, upon petition for rehearing in October 2006, the First Circuit vacated its prior decision and remanded the case to the district court to determine whether the wetlands constituted "waters of the United States" subject to CWA regulation, noting that the wetlands would be regulated not only if it met the narrow standard set forth by the plurality (Scalia) opinion, but even if it only met the broader standard proposed by Justice Kennedy's concurring opinion. The First Circuit determined that jurisdiction would be invoked in all circumstances where either standard is met, reasoning that "whenever either the plurality or Justice Kennedy would find jurisdiction, the Rapanos dissenters would agree." Therefore, the First Circuit found it appropriate to "combin[e] a dissent with a concurrence to find the ground of decision embraced by a majority of the Justices," which the appellate court believed to be both the Scalia and Kennedy standards. The cranberry farmers filed a petition for certiorari asking the Supreme Court to rule on which jurisdictional test is controlling (the narrow plurality or the broader concurrence), and further sought review of the First Circuit's decision to aggregate the dissent with the concurrence to give Justice Kennedy's standard the weight of controlling law.

The Supreme Court's decision not to review the Johnson decision leaves the First Circuit's determination intact, and thus requires the district court to perform additional fact finding to determine the jurisdictional issues. As a result, interested parties will have to wait for the district court's determination to learn whether it will analyze the facts based solely on the Scalia connection to relatively permanent waters test, and/or the Kennedy "significant nexus" test. In the interim, as reported in our August 2007 Client Alert, the U.S. Environmental Protection Agency ("EPA") and the Corps finally issued guidelines earlier this summer on how the jurisdictional determination is to be made in light of Rapanos, which appear to be largely based on the Kennedy "significant nexus" test.