Case Study: Precon V. US Army Corps Of Engineers

Law360, New York (March 11, 2011) -- The Fourth Circuit recently joined several other Circuits in embracing Justice Anthony Kennedy's "significant nexus test" from Rapanos as the controlling test for finding jurisdiction under the Clean Water Act over wetlands which are not adjacent to navigable waterways.1 Precon Dev. v. U.S. Army Corps of Eng'rs, No. 09-2239, 15-16 (4th Cir. Jan. 25, 2011), citing Rapanos v. United States, 547 U.S. 715 (2006)(Kennedy, A., concurring).

In an analysis that reflects the continuing confusion among the courts about the reach of the Clean Water Act, the Fourth Circuit appeared to up the ante on what level of evidence is required to establish a significant nexus, arguably going beyond what other Circuits have required.

At issue in this case was whether the U.S. Army Corps of Engineers has jurisdiction over 4.8 acres of wetlands — adjacent to a drainage ditch and seven miles upstream from the nearest river — such that it could prohibit the landowner, Precon Development, from dredging and filling the wetlands under Section 404 of the Clean Water Act.

Applying Kennedy's test, the court looked at whether the Corps had established that the wetlands have a "significant nexus" to a traditionally "navigable waterway."2 Precon at 15-16. Because neither Kennedy nor the Corps of Engineers has provided much guidance on how exactly this nexus must be shown, the Fourth Circuit undertook a detailed analysis of the types of evidence that would be useful in establishing the required nexus.

The court did not question that there was a connection between the wetlands and the Northwest River, the closest navigable waterway. Nor did they question the significance per se of the services the wetlands provided as habitat for wildlife and water purification. However, they did question the impact and significance of the wetlands to the downstream navigable waterway.

Ultimately, the Fourth Circuit found the physical observation data presented by the Corps regarding the wetlands and adjacent tributaries to be insufficient to support a significant nexus determination between these wetlands and the Northwest River, seven miles downstream. Id. at 24-30.

The Corps' administrative record was thus held to be inadequate to support its conclusion that it had jurisdiction over the wetlands at issue, and the case was remanded back to the Corps to reevaluate their jurisdictional determination.

BACKGROUND AND FACTS

Precon Development, the developer of a 658-acre Planned Unit Development in Chesapeake, Va., had been granted permits to fill 77 acres of wetlands between 2004 and 2006.3 Precon at 3. However, when Precon announced that it would need to fill 4.8 additional acres of wetlands, to build an additional 10 residential lots within the PUD, the Corps denied the permit. Id.

The Corps' based their determination on the fact that 1) the wetlands site is adjacent to a drainage ditch, which qualifies as "waters of the United States," and 2) that the tributaries and their adjacent wetlands have "a significant nexus that has more than a speculative or insubstantial effect on the Northwest River." Id. at 5, 12.

The relevant wetlands sit adjacent to a man-made drainage ditch that flows seasonally and joins a larger, perennial drainage ditch approximately 900 feet downstream of the site wetlands. Id. at 3-4.

The site wetlands do not technically abut the ditch — i.e. there is no continuous surface connection — because the material that was excavated to create the drainage ditch was piled up alongside the ditch, creating a man-made berm between the wetlands and the ditch. Id. These drainage ditches continue into another perennial tributary three miles downstream before ultimately flowing into the Northwest River seven miles downstream from the site wetlands.

Precon, who had revised its development plans to reduce the impact on the wetlands from 10.7 to 4.8 acres, appealed the Corps' significant nexus determination and contested the Corps' jurisdiction over these wetlands.

The district court upheld the Corps' jurisdiction determination, finding that the Corps had permissibly defined the scope of its review area as including 448 acres of similarly situated wetlands and that substantial factual findings supported the determination that these wetlands had a significant nexus to the Northwest River.

The Fourth Circuit deferred to the Corps' definition of similarly situated wetlands, but found the administrative record inadequate to support a significant nexus determination.4 Thus, the Fourth Circuit remanded the case to the Corps of Engineers to reevaluate whether Clean...