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Fourth Circuit Ends Multi-Year Legal Battle: Court Upholds Army Corps’ Assertion that Virginia Wetland is a “Water of the United States”

March 24, 2015

By: Blair M. Gardner

“This is the way the world ends, Not with a bang but a whimper.”

                                                            T. S. Eliot, The Hollow Men

On March 10, 2015, the U.S. Court of Appeals for the Fourth Circuit brought to an end a 13-year saga in which the Army Corps of Engineers (“Corps”) successfully asserted its authority over 4.8 acres of forested wetlands in the city of Chesapeake, Virginia. The decision will prohibit the construction of ten homes in a 658 acre planned unit development. For the owner of the 4.8 acres, Precon Development Corp., the only real significance of the decision might be the loss of the use of the 4.8 acres. What the decision really signifies, however, is how much federal jurisdiction over wetlands has expanded over the life of the lawsuit, and how willing federal courts are to defer to the Corps and Environmental Protection Agency’s assertion of their Clean Water Act (“CWA”) authority.

Chesapeake, Virginia is perhaps the only city in America where one can lawfully shoot a bear. It comprises more than 350 sq. miles of which approximately 3% is open water. Most of the municipality comprises what historically has been known as the Great Dismal Swamp, an area which extends from the harbor area at Hampton Roads to the North Carolina border. In a landscape with such abundant wetlands, §404 of the CWA presents a significant challenge to development.

Precon has developed the Edinburgh Planned Unit Development (PUD) since 2001. It comprises 658 acres of commercial shopping, a light industrial complex and several neighborhoods of residential housing. The Corps granted CWA §404 permits to construct residences over at least 77 acres between 2004 and 2007. The PUD includes more than 166 acres of forested wetlands which drain to the Northwest River. The 4.8 acres that have been at the center of the controversy are adjacent to a 2500’ artificial ditch created in the 1970s which exhibits a seasonal flow. The ditch connects to the St. Bride’s ditch which intercepts yet a third ditch that discharges into the Northwest River approximately seven miles from the 4.8-acre parcel in dispute. All of the PUD acreage adjacent to the ditches is separated from them by a berm created by side-casting the material removed when the ditchers were constructed decades ago.

Precon acquired the Edinburgh PUD in 2003 from another developer which had been sued by the Corps in 2001 over filling wetlands without a permit. Ironically, the original district court decision had denied the Corps’ jurisdiction over any of the 166 acres in the PUD. United States v. RGM Corp., 222 F.Supp.2d 780 (E.D Va. 2003). To settle the Corps’ appeal and to promote further development, the decision was vacated. Precon agreed to a limited plan of development and the Corps agreed to issue some permits.  It all broke down when Precon sought to expand the residential development by adding ten more housing units on the 4.8 acres in 2006.

The Fourth Circuit first decided the case in 2011when it determined the Corps had failed to establish a “significant nexus” – the test singly devised by Justice Kennedy in United States v. Rapanos – between the 4.8 acres and the Northwest River. The court so concluded for two reasons: first, the Corps’ failure to establish any evidence in the administrative record regarding measurements of actual flow; and second, the Corps’ failure to supply any analysis of actual significance of the flow between the wetlands at issue and the traditionally navigable water. Precon Development Corporation v. United States Army Corps of Engineers,633 F.3d 278, 294 (4th Cir. 2011).  The Fourth Circuit indicated that the finding which the Corps should make need not be particularly onerous .Id.  at 297 (“We ask only that . . . the Corps pay particular attention to documenting why such wetlands significantly, rather than insubstantially, affect the integrity of navigable waters.”). Indeed, the court’s decision verified that the Corps will not be troubled by anything which resembles a high burden.

The Fourth Circuit panel emphasized that the “significant nexus” test is “flexible ecological inquiry” which may be supported either by quantitative or qualitative evidence. The company’s contention that its 4.48 acres out of the 448 total wetland acres which the Corps had aggregated for the purpose of its analysis could not constitute a substantial contribution to flow and effect into the Northwest River, was summarily rejected as setting too high a bar. The court found the estimated flow measurements for two, ten and fifty year flood events to be sufficient evidence of flow. Of greater significance was information about low dissolved oxygen found in the Northwest River based on a total maximum daily load (TMDL) developed for the watershed. Because it was shown that the 448 acres function to trap sediment and nutrients which impaired oxygen, store water, and decrease the velocity of flows, this finding was essentially dispositive. Evidence of beneficial wildlife functions were essentially make-weight. One can question whether the “significance” analysis required by the 2011 panel was really met by the Corps, but the new decision gives the Corps a useful road map for making future determinations in such cases.

A final note on the standard of review: both panels observed that they would review the Corps’ findings using a highly deferential standard of review based on an old case, Skidmore v. Swift, 323 U.S. 134, 140 (1944) (“[A]n agency’s interpretation may merit some deference whatever its form, given the ‘specialized experience and broader investigations and information’ available to the agency....”). Last week, concurring opinions in a Supreme Court decision in Perez v. Mortgage Bankers’ Association raised the possibility that Skidmore may no longer be good law. Based on the willingness of the Fourth Circuit to rely on it, we can only hope that it has a speedy demise.

This article was authored by Blair M. Gardner, Jackson Kelly PLLC.

 

 

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