Rapanos, Guidelines and Deference: Wetlands Beware

The Supreme Court's last determination of what wetlands are subject to the Clean Water Act and hence may not be filled without a permit, left behind a matted mess. In Rapanos v. United States, the 4-1-4 opinion articulated two tests for when a wetland constitutes a water of the United States.  In the plurality opinion, wetlands must have “a continuous surface connection to bodies that are waters of the United States.”  Justice Kennedy's swing vote decision for the plurality's remand stated that while there needed to be a connection, it would be sufficient if there was a “significant nexus” with the waters of the U.S.; that is, it would be sufficient if the wetlands, alone or in combination with other lands in the region, would significantly affect the chemical, physical and biological characteristics of the U.S. waters. So which test should be applied?

Since Rapanos, the Seventh and Eleventh Circuits have found that Justice Kennedy’s test must be met under a “weakest link” theory – it is the narrowest grounds for the Supreme Court’s decision in Rapanos. On the other hand, the First, Eighth and recently the Third Circuits have held that if the wetlands can meet either test set forth in Rapanos, then the fill would be in violation of the Clean Water Act.

EPA and the Corp of Engineers, deciding that they needed to "clarify" things, issued a proposed guidance document to help identify waters subject to Clean Water Act jurisdiction.  The Agencies added that the proposed guidance would result in more waters being brought within their jurisdiction - a statement that is the political equivalent of poking a bear with a stick.  Predictably, the proposed guidance quickly came under attack as being an attempt by EPA and the Corp to expand their jurisdiction and to promulgate rules without following proper procedure. 

The "clarification" guidance also did not sit well with several Republican members of Congress -- John Mica, Bob Gibbs, James Inhofe and Jeff Sessions.  On November 8, 2011, these four Congressmen wrote a letter to EPA and the Army Corps of Engineers. They noted that EPA had apparently decided not to finalize the draft guidance but, rather, that the Agencies were planning to address the scope of CWA jurisdiction via rulemaking. The authors commended the agencies for deciding to follow the rulemaking procedure, but lamented that if they were simply going to incorporate the guidance documents into the rulemaking, the Agencies had effectively (and improperly) prejudged the issue, particularly given their view that the guidance “misconstrues or manipulates the legal standards announced in the Supreme Court decisions.”

The letter goes on to “encourage” the agencies to start the rulemaking process fresh, open the matter to an advanced notice of proposed rule-making to obtain public input, and to do a cost-benefit analysis of whatever proposed rule is developed. The authors sincerely hoped that the agencies would not make a “mockery of the rule-making process under the Administrative Procedure Act.”

Perhaps there is more to the letter than a gentle reminder that the Agencies shouldn't consider mocking the law.  If EPA promulgates the rule rather than issues a guidance, the inevitable challenge will be much more difficult because of the deference (frequently referred to as Chevron deference) that will attach to the rule. Deference is a powerful weapon in any agency's arsenal and anyone who seeks to diminish the power of an agency would do well to find a way to challenge that deference.   In this case, the letter is preemptively making the case that if the final rule looks like the guidance, it proves that EPA prejuged the outcome, that the rule should be thrown out and that it would be a "mockery" to allow deference to save it. Given the recent decisions regarding  deference, it just might work.  And if it does, letter-writing will be back in vogue.

(This entry is cross-posted at American College of Environmental Lawyers)

 RELATED POST: An Agency Must Earn Deference

Moving Day Blues For EPA

After having a new building constructed for it 10 years ago, EPA’s Region 7 Headquarters is preparing to move out of the heart of Kansas City, Kansas to a nearby suburb, Lenexa . . . and a lot of people are very upset about it.

The move will take 600 EPA regional office employees out of a building that has done great things for Kansas City’s urban core and will move them to an abandoned Applebee’s headquarters in the suburb. I have had the dubious pleasure of being at the current headquarters many times and I always thought it was a great building and a great location.

The debate is devolving into a classic he-said, she-said argument. Each side is pointing at the other and it is all playing out in the newspapers and internet. No one really knows all the facts as to whether the landlord was demanding some outrageous sum or the General Service Administration (which negotiates these leases) was making unreasonable demands. Until all the facts are known, you just cannot condemn either side.

However, there was a statement made that I think is worth noting. Charlie Cook, a spokesman for G.S.A., reportedly said that the decision was purely a matter of economics:

We worked with them on several different terms and rates from what they were proposing. After several attempts, we thought it would be irresponsible to accept the offers that were made.

We’re the stewards of the federal tax dollars, and we can’t just sign a lease based on what’s popular with some. We have to stick to our principles.

To me, that sounds like the overriding consideration in making the siting decision was money and, if so, EPA has done itself a huge disservice.  Most things that are good for the environment are more expensive than those that are not – it's always cheaper to skip installing the liner at a landfill; it is a huge cost savings to dump hazardous waste in a stream rather than take it to a treatment facility; and if a business wants to save money, avoiding the installation of air scrubbers would do the trick. But the idea is that a cleaner environment sometimes requires expenditures beyond what is convenient. 

If it was someone else, say Microsoft or Ford or Aetna, would we be having this discussion? Probably not. But EPA is not a private company. EPA is in charge of the environment. Even if it can consider only the economics, it shouldn’t.  There should be some sort of a cost-benefit analysis, not just a cost analysis.

As I said, it does not appear that all of the facts have been provided to us. If EPA has balanced all of the environmental factors as well as the economic ones and has decided that the move is warranted, then the agency should make its case. But if it has done that, we haven’t seen it.

I should add that this is not just a credibility issue. If EPA can use the defense that it costs too much to consider the environment, then businesses should be granted that same exemption. And if that argument catches on, EPA is not going to need any headquarters.

Ignoring The Storm Water Elephant

The picture on the left shows a farm field. The picture on the right could be a site being prepared for residential construction. Both of them receive rainfall, both of them allow runoff of sediments and contaminants and both of them impact the quality of surface water in nearby streams. What is the difference between the two? The picture on the right costs about $3,000 per acre more for storm water regulatory compliance than the picture on the left.


Lisa Jackson, the U.S. EPA Administrator, was in Iowa a few days ago with Agricultural Secretary Tom Vilsack (Iowa’s former Governor). She was visiting some farms to review runoff issues. After visiting the farms, Ms. Jackson told reporters:

I am ruling out the need for us to move directly to a regulatory mechanism when we have folks stepping up and are willing to do the conservation measures. 

Ms. Jackson believes that farmers are adequately addressing the issue of fertilizer runoff into water ways on a voluntary basis and they do not require regulatory oversight. While others may disagree, I will defer to Ms. Jackson's expertise.  My problem is that Ms. Jackson apparently has no such faith in land developers.

Six days ago, EPA released a draft permit that will further increases the regulation of discharge of storm water from construction sites. If all of the effluent limitation rules are put into place, it has been estimated that nearly one billion dollars in annual costs will be incurred at those sites. This is in addition to the existing costs of storm water regulation.  While current stormwater compliance costs can vary depending upon the regulatory scheme of the particular state and whether construction is occurring within an MS4 city, a rough estimate would place it at about $3,000 per acre in increased construction costs for compliance with the existing regulations.  The proposed new regulations will add to those costs.

Before concluding that this is a small amount to pay, bear in mind that these costs will be passed on to the home owner. A study conducted by the National Association of Home Builders found that for each $1,000 increase in home building costs, a certain number of potential buyers will be “priced out” of the market. This number varies from city to city, but for Des Moines,  a $1,000 increase will bump 522 people out of a home purchase. (In La Crosse, Wisconsin only 10 people will be priced out; in Atlanta, Georgia 4,022 people are affected).

So why not make the trade-off?  Well, because of that pesky thing called cost/benefit analysis.  These costs are being imposed on an industry that contributes less than 1% to the surface water contamination problem, while agricultural runoff creates well in excess of 50% of that problem.  For the dollars being expended and the loss of home sales, it is not possible to receive any significant benefit.

But even if you could justify the expenditure, my question is, why should there be there such a huge discrepancy in dealing with these two groups? I'm happy to agree with Ms. Jackson that agricultural runoff does not need the heavy hand of federal regulation and its accompanying costs. However, if she is not going to address the elephant in the room, it seems a bit unfair to require the expenditure of such huge sums to sweep up the peanut shells.



Guidelines for Cost Benefit Analysis -- So It Begins

Agricultural Runoff Comes Under Scrutiny

More Stink About Agricultural Runoff