DocketNumber: No. 17-3403
Judges: Barrett, Bauer, Eve
Filed Date: 6/27/2018
Status: Precedential
Modified Date: 10/19/2024
This case concerns just shy of 13 acres of wetlands, which lie in a south-suburban plot of land called the Warmke parcel. Orchard Hill Building Company purchased the Warmke parcel in 1995 with plans for a large-scale residential development. Not wanting to run afoul of the Clean Water Act, Orchard Hill requested a determination from the United States Army Corps of Engineers that the wetlands (or the "Warmke wetlands") were not jurisdictional "waters of the United States." The Corps decided that they were, and Orchard Hill has spent the last 12 years challenging that decision. We find that the Corps has not provided substantial evidence of a significant nexus to navigable-in-fact waters, and therefore vacate and remand with instructions that the Corps reconsider its determination.
I. Background
A braid of regulatory, judicial, and administrative events led to the Corps' final *1020claim of jurisdiction over the Warmke wetlands. We start at the beginning.
Congress enacted the Clean Water Act in 1972 "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters."
That job falls to the Corps of Engineers and the Environmental Protection Agency-and it has proven "a contentious and difficult task." Nat'l Ass'n of Mfrs. v. Dep't of Def. , --- U.S. ----,
The Corps defined waters of the United States broadly to include waters "subject to the ebb and flow of the tide," "rivers" that could be used for interstate recreation or commerce, "tributaries" of such waters, and-most importantly here-"wetlands adjacent to" other waters of the United States, including tributaries.
Despite, or perhaps because of, those definitions, "[i]t is often difficult to determine whether a particular piece of property contains waters of the United States."
*1021U.S. Army Corps of Eng'rs v. Hawkes Co. , --- U.S. ----,
Orchard Hill was such a landowner. In 1995, it completed its purchase of the Warmke parcel, a 100-acre former farm-land located in Tinley Park, Illinois. Orchard Hill then received permits to build a two-phase residential development on the parcel. The first phase started in 1996, and over the next seven years, Orchard Hill constructed more than a hundred homes. Construction altered the area's water drainage, and about 13 acres pooled with rainwater and grew wetland vegetation. Before starting the second phase and building on those acres-the Warmke wetlands-Orchard Hill sought a jurisdictional determination from the Corps in 2006.
"The history of the Warmke [wetlands] jurisdictional determination can be described as lengthy, contentious and complex," as a Corps district engineer aptly put it.
While that appeal was pending, the Supreme Court issued a landmark decision paring back the Corps' jurisdictional reach. Rapanos v. United States ,
Justice Kennedy decided that a wetland's adjacency to a tributary of a navigable-in-fact *1022water is alone insufficient to make the wetland a water of the United States. Instead, "the Corps' jurisdiction over [such] wetlands depends upon the existence of a significant nexus between the wetlands in question and navigable waters in the traditional sense." Rapanos ,
[W]etlands possess the requisite nexus, and thus come within the statutory phrase "navigable waters," if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as "navigable." When, in contrast, wetlands' effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term "navigable waters."
After Rapanos , the Corps, too, decided to follow Justice Kennedy's significant-nexus test. In late 2008, it published internal guidance titled Clean Water Act Jurisdiction Following the U.S. Supreme Court's Decision in Rapanos v. United States & Carabell v. United States (the " Rapanos Guidance"). The Rapanos Guidance interprets "similarly situated lands" in the significant-nexus test to mean all "wetlands adjacent to the same tributary," because "such wetlands are physically located in a like manner." It instructs the Corps to determine first if any such adjacent wetlands exist, and if so, to "consider the flow and functions of the tributary together with the functions performed by all the wetlands adjacent to that tributary in evaluating whether a significant nexus is present."
In light of Rapanos , the Corps' division engineer remanded the 2006 jurisdictional determination of the Warmke wetlands for further review. Between 2008 and 2010, the district engineer reviewed the wetlands' soil composition, and in March 2010, he made a site visit. There, the district engineer observed an "intermittent flow" of water from the Warmke wetlands to the Midlothian Creek. The district engineer did not test or sample the Warmke wetlands' composition, but based on the observed hydrological connection, he again concluded that the Corps had jurisdiction over the wetlands. Orchard Hill filed an appeal, which the Corps denied.
That might have been the end of the administrative road, but for another federal-court decision. In September 2010, a district court set aside a Corps rule that excluded "non-agricultural" land from the prior-converted-cropland exemption (a rule which the Corps devised after and apart from its five-year-abandonment limitation), reasoning that it was a legislative rule that had not gone through notice-and-comment under the APA. New Hope Power Co. v. U.S. Army Corps of Eng'rs ,
*1023The reconsidered determination also elaborated on the significant-nexus analysis. Its report listed 165 wetlands purportedly "adjacent" to the Midlothian Creek, and thus "similarly situated" to the Warmke wetlands per the Rapanos Guidance. The report did not show or explain these wetlands' proximity to the Midlothian Creek. Nor did the report reflect that the Corps had conducted observation or testing of the 165 wetlands. The district engineer, nevertheless, concluded that the wetlands collectively "decrease sedimentation, pollutants, and flood waters downstream while offering beneficial nutrients and habitat" to the Midlothian Creek and Little Calumet River. He thus found that the Warmke "wetland[s] alone or in combination with the wetlands in the area significantly affect the chemical, physical and biological integrity of the Little Calumet River."
A third appeal followed. The reviewing division engineer agreed that Orchard Hill's claim of the prior-converted-cropland exemption had no merit given the Warmke wetlands' 15-year abandonment. She found lacking, however, the district engineer's significant-nexus analysis. As she put it, the Corps had "failed to provide the required explanation," and "failed to show its work justifying its summary conclusions." The division engineer remanded with instructions to comply with the Rapanos Guidance, which requires the Corps to provide grounds and explanations for its significant-nexus conclusions. The district engineer's subsequent decision, according to the remand order, would be the Corps' final approved jurisdictional determination for the Warmke wetlands.
On remand, in July 2013, the district engineer supplemented his findings with an 11-page report. The supplement asserted that the 165 wetlands considered were all a part of the "Midlothian Creek watershed," though it did not describe that term or map that area. The supplement further explained the significant flooding problems the Tinley Park area had faced in recent years, and, relying on scientific literature and studies, detailed how wetlands help reduce floodwaters. It also described the effect of wetlands generally on reducing pollutants in downstream waters, and the wildlife that inhabited the Warmke wetlands. The supplement's conclusion ultimately mirrored the earlier determination: the Warmke wetlands, alone or in combination with the area's other wetlands, have a significant nexus to the Little Calumet River.
With that final determination made, Orchard Hill turned to federal court. It sought review of the Corps' jurisdictional determination as a "final agency action" under the APA. As such, no discovery occurred, and the parties filed cross motions for summary judgment based on the administrative record. In its decision, the district court examined the Corps' findings-specifically those set forth in the 11-page supplement-and deferred to the Corps' conclusions regarding the physical, chemical, and biological impact of the Warmke wetlands on the Little Calumet River. It also decided that the Corps had appropriately applied the five-year-abandonment limitation. The district court therefore granted the Corps' summary-judgment motion and denied Orchard Hill's, entering judgment in favor of the Corps. Orchard Hill appealed.
II. Standards of Review
We review de novo a district court's decision to grant summary judgment. Laborers' Pension Fund v. W.R. Weis Co. ,
*1024Stable Invs. P'ship v. Vilsack ,
Under the APA, a court must set aside an agency determination if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," or if it is "unsupported by substantial evidence."
That does not mean the review is "toothless," though. Pioneer Trail Wind Farm, LLC v. Fed. Energy Regulatory Comm'n ,
III. Discussion
The significant-nexus test requires that the Corps determine on a case-by-case basis whether wetlands, "either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as 'navigable.' " Rapanos ,
Take the effect of the Warmke wetlands "alone." According to the supplement, wetlands are "nature's kidneys," able to filter out pollutants that would otherwise reach downstream waters. Northeastern Illinois waters are known to suffer relatively high rates of nitrogen, and the Warmke wetlands have a "discrete and confined intermittent flow" to the Midlothian Creek. From this connection, the Corps concluded that the Warmke wetlands have the "ability" to pass pollutants along. But such a "speculative" finding cannot support a significant nexus. Rapanos ,
The supplement further pointed out that the almost-13-acre Warmke wetlands are the fourth largest wetlands in the area, making up 2.7 percent of the 462.9 total acres of the wetlands in the Midlothian Creek watershed. According to the supplement, if all the wetlands in the watershed were lost, floodwaters in the area would rise by 13.5 percent. That "rough estimate" also fails to support a significant nexus for the Warmke wetlands alone. Based on the Corps' figures, loss of the Warmke wetlands would result in a floodwater rise of a fraction of a percent. If the Corps thinks that trivial number significant, it needs to give some explanation as to why. See, e.g. , BP Energy Co. v. Fed. Energy Regulatory Comm'n ,
The same goes for the supplement's finding about the potential increase on downstream nitrogen. It reasoned that, if all the watersheds' wetlands were lost, 27 to 51 percent more nitrogen would enter the Midlothian Creek, which would then pollute the Little Calumet River in some unestimated amount. Assuming there is nitrogen in the Warmke wetlands (which the Corps did not test), they, again, make up just 2.7 percent of the watersheds' total wetlands, and so would presumably account for a small fraction of that increase to the Midlothian Creek (to say nothing of the increase to the navigable-in-fact River). Such a bit impact seems "insubstantial," Rapanos ,
Notwithstanding the Corps' claim that the Warmke wetlands "alone" have a significant nexus to the Little Calumet River, both the supplement and the Corps' arguments on appeal focus on the net impact of the 165 total wetlands in the "Midlothian Creek watershed." As noted, the Corps found that loss of those wetlands would increase the area's peak floodwaters and result in nitrogen loading into the Midlothian Creek. But even if those findings mean something significant to the Little Calumet River, the Corps has not provided substantial evidence for its finding that the 165 wetlands are in fact "similarly situated" such that the Corps can consider their impacts in its jurisdictional analysis in the first place.
Justice Kennedy did not define "similarly situated"-a broad and ambiguous term-but the Rapanos Guidance does. It *1026interprets "similarly situated" as "all wetlands adjacent to the same tributary." It in turn defines "adjacent" to mean "bordering, contiguous, or neighboring," and notes that wetlands separated from other waters of the United States by, for example, "man-made dikes or barriers," are still "adjacent wetlands."
The Corps' approved jurisdictional-determination form calls for a listing of all wetlands "adjacent to the tributary (if any)." The Corps listed the 165 wetlands there. The only hint of those lands' proximity to the Midlothian Creek is a column named "Directly abuts? Y/N," under which just four of the 165 lands were affirmatively designated. The list purports to draw its information from a map vaguely titled "National Wetlands Inventory: Tinley Park, Illinois Quadrangle, 1981," which hardly suggests a focus on the Midlothian Creek. That National Wetlands Inventory ("NWI") map does not appear in the record, and the only NWI map that does shows nowhere near 165 wetlands. The supplement, nevertheless, claimed that NWI data "identifies 165 wetlands in the Midlothian Creek watershed." That claim is unsupported by anything in the record, but even assuming it is correct, the Corps has failed to provide any explanation as to how wetlands in the same watershed are, ipso facto , adjacent to the same tributary. Indeed, the so-called Midlothian Creek watershed is 12,626 acres-almost 20 square miles-and that considerable size belies any assumption that lands within the watershed are necessarily, or even likely, adjacent to the Creek.
The Corps offers several responses to this shortcoming. It contends first that Orchard Hill has waived any argument about the failure to identify the other wetlands' adjacency to the Midlothian Creek by not raising that issue at the administrative level. This contention is misguided. Orchard Hill did, in fact, protest the Corps' use of the 165-wetlands list as insufficient during its third appeal. Even had it not, "claims of waiver may themselves be waived." United States v. Dunkel ,
On the merits, the Corps argues that it need not show or explain how each of the 165 wetlands is adjacent to the Midlothian Creek. But accepting this argument, especially on this record, would invite jurisdictional overreach. The significant-nexus test has limits: the Corps can consider the effects of in-question wetlands only with the effects of lands that are similarly situated. Rapanos ,
*1027The Corps nonetheless claims we owe its findings deference, citing Precon for support. Courts, however, extend no deference to agency decisions that lack record support or explanation, e.g. , Epsilon Elecs., Inc. v. U.S. Dep't of Treasury, Office of Foreign Assets Control ,
The Corps also submits that it need not "justify its reliance" on the NWI data. This misunderstands the problem. The APA requires some record evidence reasonably adequate to support the finding that the 165 wetlands were similarly situated or adjacent to the Midlothian Creek. See
The fairest reading of the record is this: The district engineer reviewed an NWI document that identified 165 wetlands in the Tinley Park area, and assumed that all those wetlands were similarly situated. Maybe the assumption was defensible, but the Corps "does not provide record support for that assumption." Susquehanna Int'l Grp., LLP v. Sec. and Exch. Comm'n ,
IV. Conclusion
This dispute has consumed almost as many years as the Warmke wetlands have acres. In that time, the Corps has not provided substantial evidence that the wetlands and those similarly situated have a significant nexus to the Little Calumet River. We therefore VACATE the district court's grant of summary judgment to the Corps and REMAND with instructions to remand to the Corps for reconsideration of its jurisdiction over the Warmke wetlands.
All future citations to
Because we find that the Corps failed to justify its jurisdictional determination with substantial evidence in the record, we do not decide, as Orchard Hill argues we should, whether the Corps' interpretation of "prior converted cropland" to exclude lands abandoned for five or more years (the "five-year-abandonment limitation") is a legislative rule that violates the Administrative Procedure Act's ("APA") notice-and-comment requirements.
District engineers perform first-level jurisdictional reviews, and division engineers review appeals of those determinations. See
Some of our sister courts have concluded that the Corps can establish jurisdiction by using either the standard Justice Kennedy explained or the standard described in Justice Antonin Scalia's plurality opinion. See United States v. Donovan ,
Orchard Hill does not protest the APA's standard of review, but it argues that the Corps' determination requires a more demanding inquiry. It invokes the constitutional concerns supposedly implicated by the Corps' claim of jurisdiction to intrastate waters, but compare Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps of Eng'rs ,