1. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Wetlands and Rapanos – An Evolving, Ephemeral Concept IMA – North America Industrial Minerals Technology Workshop, March 5-7, 2007 Robert W. Lawrence, Esq. (303) 892-7409 robert.lawrence@dgslaw.com

2. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com The issue Long-standing dispute on scope of Clean Water Act (CWA) § 404 jurisdiction – Section 404(a) of CWA authorizes Corps (or a state with an approved program) to issue a permit for the discharge of dredged or fill material into the navigable waters at specified disposal sites. Query: How broad is the jurisdictional reach of navigable waters –Congress defined term ambiguously in CWA as waters of the United States

3. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com In the beginning... U.S. v. Riverside Bayview, 474 U.S. 121 (1985) –Issue: whether wetland adjacent to a navigable water is within the scope of CWA Section 404 jurisdiction –Unanimous opinion: Justice Byron White found jurisdiction on basis of adjacency to navigable water not because of hydrological connection Court emphasized role of wetlands in the overall ecology and ecosystem upheld Corps interpretation of waters of the United States to include wetlands that actually abutted on traditional navigable waters

4. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com The migration of birds Solid Waste Agency of Northern Cook County v. U.S. Army Corp. of Engineers (SWANCC) (2001) –Supreme Court struck down migratory bird rule which extended Corps jurisdiction to intrastate waters which are or could be used as habitat by migratory birds. –Court found no Congressional intent to extend CWA jurisdiction to such isolated, intrastate ponds –Majority identifies significant nexus test - whether there is a significant nexus between water body at issue and interstate navigable water

5. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Scrambling in the aftermath of SWANCC EPA/Corps quickly issue legal memo –SWANCC applies narrowly; focuses on isolated, non-navigable intrastate waters –But EPA/Corps never issued a final post- SWANCC rule Many lower courts followed majority significant nexus test Nearly 20 appellate circuit court decisions post -SWANCC

6. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Finally, Rapanos June19, 2006 – U.S. Supreme Court Issues Consolidated Cases of Rapanos v. United States and Carabell v. U.S. Army Corps of Engineers (Rapanos) – Purports to define scope of Corps jurisdiction over wetlands under CWA § 404 – But doesnt resolve conclusively many questions of CWA § 404 jurisdiction found at industrial minerals sites, especially sites in western U.S.

7. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Jurisdictional Waters Are Still Muddy Why? Because of how Supreme Court decided Rapanos –Justice Scalias 4 Justice plurality opinion –Justice Kennedys solo concurrence –Justice Stevens 4 Justice dissent – Five Justices agreed to vacate and remand the cases But, a majority could not agree on the proper approach for determining jurisdiction over wetlands/tributaries under CWA

8. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com What is the effect of a plurality opinion? Lower courts commonly do not view plurality opinions as creating binding precedent Chief Justice Roberts view: – It is unfortunate that no opinion commands a majority of the Court on precisely how to read Congress limits on the reach of the Clean Water Act. Lower courts and regulated entities will now have to feel their way on a case-by-case basis.

9. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Does a plurality opinion decide anything? When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those members who concurred in the judgments on the narrowest grounds. See Marks v. U.S. (1977) –But in Rapanos, the Scalia plurality and Kennedy concurrence agreed upon the result – and thats about it!

10. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Rapanos – just the facts Mr. Rapanos filled in 54 acres of wetlands at three different sites without a permit –Nearest body of navigable water was 11-20 miles away –Wetlands hydrologically connected by drains or surface water connections to navigable waters, but did not directly abut navigable waters –Corps had informed Rapanos that wetlands were waters of the U.S. subject to jurisdiction. Rapanos proceeded regardless. U.S. initiated enforcement action against him for violating CWA § 404.

11. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Carabell facts Carabell sought a permit from the Corps to fill in forested wetlands and construct over 100 condos A man-made ditch was located along one side of the wetland, separated from the wetland by a four-foot-wide manmade berm – Berm itself was largely impermeable and blocked drainage from the wetland, but may have infrequently overflowed Corps determined that Carabells property provided water storage functions that, if destroyed, could result in an increased risk of erosion and degradation of water quality in a downstream drain, a creek, and ultimately Lake St. Clair, located a mile away

12. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Lower Court Decisions in Rapanos In both Rapanos and Carabell, the district court found that federal CWA jurisdiction existed over the respective wetlands On appeal, the Sixth Circuit Court of Appeals affirmed, ruling against the property owners and in favor of the Corps. Rapanos and the Carabells petitioned the Supreme Court to accept their cases, and the Supreme Court did so.

13. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com What happened in the Supreme Court? Justice Scalia obtained the votes of Chief Justice John Roberts, Jr., Justice Clarence Thomas and Justice Samuel Alito for plurality, but not a majority Under plurality opinion, the Corps CWA jurisdiction is substantially reduced: – Ephemeral waters, dry washes, etc., are not jurisdictional waters – Relatively permanent, standing or flowing bodies of water would fall within the scope of jurisdictional waters under the CWA – Wetlands must have a continuous surface connection to bodies that are waters of the United States in their own right

14. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Kennedy concurrence retains significant nexus test The Corps jurisdiction over wetlands depends upon the existence of a significant nexus between the wetlands in question and navigable waters in the traditional sense Significant nexus between a wetland and a navigable water must be evaluated based upon the CWAs objectives of restoring and maintaining the chemical, physical, and biological integrity of the nations waters

15. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Kennedy concurrence (cont.) In the Carabell case, Justice Kennedy said Corps improperly based jurisdiction solely on fact that wetland was adjacent to ditch opposite berm on propertys edge. Under either Scalia or Kennedy approach, mere adjacency to a tributary is not enough to establish jurisdiction. Kennedy would require a more significant inquiry, based on the significant nexus standard

16. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com When Does Jurisdiction Exist? (Plurality) Waters of the United States are only relatively permanent, standing or flowing bodies of water forming geographic features that are described in ordinary parlance as streams, oceans, rivers and lakes – Terms suggest continuously present, fixed bodies of water, as opposed to ordinarily dry channels through which water occasionally or intermittently flows – Continuous flow of water in a permanent channel generally is required for jurisdiction; none of these terms encompasses transitory puddles or ephemeral flows of water

17. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com When does CWA jurisdiction not exist? (Plurality) Waters of the U.S. does not include ephemeral streams, wet meadows, storm culverts, sheet flows during storm events, drain tiles and drainage ditches or dry desert arroyos – does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall Note: by requiring waters to be relatively permanent, Court was not necessarily excluding streams, rivers or lakes that might dry up in extraordinary circumstances such as drought or seasonal rivers from jurisdiction. Common sense and common usage distinguish between a wash and a seasonal river. Scalia Opinion, footnote 5.

18. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Pluralitys treatment of wetlands Only wetlands with a continuous surface connection to water that is a water of the United States, so that there is no clear demarcation between such water and the wetlands, are adjacent to waters of the United States and thus subject to CWA jurisdiction – Wetlands with intermittent, physically remote hydrologic connection to waters of the United States lack necessary connection to jurisdictional waters – Under plurality opinion: 1) the adjacent channel must contain a relatively permanent body of water connected to traditional interstate navigable water; and (2) wetland must have a continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins

19. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com When does CWA jurisdiction exist? (Kennedy concurrence) Must be a significant nexus between the wetlands in question and navigable waters in the traditional sense – nexus exists if wetlands, either alone or in combination with similarly situated lands in region, significantly affect chemical, physical, and biological integrity of other navigable waters Disagreed with plurality views that Corps and EPA have jurisdiction only over relatively permanent, standing or flowing bodies of water, and not over intermittent or ephemeral streams Disagreed with plurality that wetlands are jurisdictional only if they bear a continuous surface-water connection to water bodies that are waters of the United States in their own right

20. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Limitations on CWA jurisdiction (Kennedy concurrence) Allowing jurisdiction over wetlands whenever a wetlands lies along a ditch or a drain, however remote and insubstantial, that eventually may flow into a navigable water, goes too far –The word navigable must be given some effect –If wetlands impact on water quality is speculative or insubstantial, they would not be jurisdictional –Corps standard for jurisdiction over tributaries – that it feeds into a navigable water or tributary thereof and possesses an ordinary high watermark – is too wide open –Mere hydrologic connection not enough in most cases – connection may be too insubstantial to establish nexus with navigable waters

21. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com U.S. v. Chevron Pipeline (N.D. Tex.)(June 2006) Intermittent Stream – Dry, except in significant rainfall events Followed prior 5 th Circuit precedent and Scalia test But court noted that government failed to satisfy Kennedy test as well

22. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com U.S. v. Evans (M.D. Fla.)(Aug. 2006) Discharge of sewage into creek that constituted headwaters of tributary of navigable river CWA jurisdiction can be found if either the Scalia or Kennedy tests are satisfied Court found CWA jurisdiction under Scalia test

23. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Northern California River Watch v. City of Healdsburg (9 th Cir.) (Aug. 06) 58 acre water-filled quarry pit separated from navigable river by levee CWA jurisdiction found under Kennedy test – Mere adjacency not sufficient for jurisdiction, but Significant physical nexus (water seeping into river; river overtops levee in flood) Biological nexus (wildlife) Chemical nexus (increased chloride levels in river)

24. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com U.S. v. Gerke Excavating, Inc. (7 th Cir.)(Sept. 06) Kennedy test adopted Case remanded for further fact finding

25. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com U.S. v. Johnson (1 st Cir.)(Oct. 06) CWA jurisdiction can be found if either the Scalia or Kennedy tests are satisfied Case remanded for further fact finding

26. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com U.S. v. Kincaid Trust (E.D. Mich.)(Nov. 06) Acknowledges both Scalia and Kennedy tests Beach grading in wetland area violated CWA

27. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Sierra Club v. USACE (M.D. Fla.)(Nov. 06) Development of wetlands References both Scalia and Kennedy tests Cites Johnson and Gerke

28. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Envtl Protection Info. Center v. Pacific Lumber Co. (N.D. Cal.)(Jan. 07) Streams impacted by sediment from logging Kennedy test followed per N. Cal. River Watch Hydrologic connection established; but no evidence that streams significantly affect the chemical, physical, and biological integrity of other covered waters Therefore, not navigable waters under Rapanos

29. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Simsbury-Avon Preservation Society v. Metacon Gun Club (D.Conn.)(1/07) Lead from shooting range located in wetland CWA jurisdiction can be found if either the Scalia or Kennedy tests are satisfied No surface water connection – failed Scalia test Analytical testing revealed only potential exposure to elevated lead levels; thus effects on water quality are speculative or insubstantial – fails Kennedy test

30. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com National Ass'n of Home Builders v. U.S. Army Corps of Engineers, D.D.C. (1/30/07) Tulloch II rule violates CWA EPA may not enforce the Tulloch II rule. The rule governs when "mechanized earth-moving equipment" results in discharge of dredged/fill material subject to permitting under the CWA –The rule aims at clarifying when excavation activities near lakes and rivers result in "incidental fallback" of dredged material that is deposited in the water, which would not require a permit, and when the dredged material constitutes a discharge subject to a permit. –Rule defines incidental fallback as "the redeposit of small volumes of dredged material that is incidental to excavation activity... when such material falls back to substantially the same place as the initial removal."

31. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Tulloch II Rule Invalidated (Cont. The National Association of Home Builders (lead plaintiff in lawsuit) says decision means that homebuilders and developers "do not need a federal Clean Water Act permit to operate construction equipment in wetlands unless they are actually dredging or filling them in"

32. Davis Graham & Stubbs LLP attorneys at law 1550 Seventeenth Street, Suite 500, Denver, CO 80202 Tel: 303.892.9400 www.dgslaw.com Baccarat Fremont Developers LLC v. U.S. Army Corps of Engineers (Cert. Denied. U.S. S.Ct. 2/20/07) Court declined to decide whether Corps is authorized to restrict development on wetlands separated from adjoining streams and lakes by man-made ditches –let stand Ninth Circuit decision that Corps need not show "significant hydrological and ecological connection" between wetlands and adjoining streams in order to exert authority over the wetlands (Baccarat Fremont Developers LLC v. U.S. Army Corps of Engineers, 425 F.3d 1150 (9th Cir. 2005)