Petition for Writ of Certiorari — Hobbs v. United States

I

FILED

. : | WAR G 82

Bpa L422 Lorrie OF THE Cuca

oe

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

S. PAUL HOBBS, AND DONNA M. Hopps, his wife and

PHILLIP RAY Hoprs, AND DoroTHY V. Hopps, his wife,

Petitioners,

v.

UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

RICHARD R. NAGEOTTE *

JAMES SCOTT KREIN

NAGEOTTE & KREIN

385 Garrisonville Road, Suite 201

Stafford, Virginia 22554

(703) 659-5050

* Counsel of Record

WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. Whether a federal agency, that does not have per-

mitting authority under a federal statute, may use its

own standards rather than the standards of the permit-

ting authority and maintain an enforcement action

against a citizen for injunctive relief and civil penalties

of millions of dollars, when the federal agency with per-

mitting authority under the statute using its standards

declines to assert jurisdiction and require the citizen to

have a permit.

2. Whether a citizen’s property which does not actually

abut on a navigable waterway and has no wetlands ad-

jacent to bodies of open water are “waters of the United

States” subject to regulation by the Corps of Engineers

and the requirement of a Section 404, Clean Water Act

permit before the land can be disturbed.

3. Whether the term “neighboring” contained in the

regulatory definition of adjacent wetlands is unconstitu-

tionally void for vagueness.

4. Whether constitutional due process and the Seventh

Amendment require that a citizen be permitted to assert

a good faith belief in the invalidity or inapplicability of

an Administrative Order issued by a federal agency, as a

disputed factual issue to the jury, during the liability

phase of a trial to enforce penalties of $25,000 per day

for each day of violation of that Order.

(i)

ee

il

PARTIES

The defendants-appellants below were individuals, S.

Paul Hobbs, Donna M. Hobbs, Phillip Ray Hobbs and

Dorothy V. Hobbs. The plaintiff-appellee was the United

States.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ..................... ecient uhendeletateen i

a tudian bagadadbioes il

po Bs ee. 6 hy See iv

REMI EEO oocccccnccesccstesuonccanncnckscocesectes sadecaebicseaiouee 1

EIR ERS SESS a i Ee Re 1

STATUTE AND REGULATIONS INVOLVED .......... 1

Be A ME GPR MIs CABBIE cases ccnnscccccccnccccnscncncncscccascs 1

REASONS FOR GRANTING THE WRIT ................... 9

I. A NON-PERMITTING FEDERAL AGENCY

MAY NOT BRING AN ENFORCEMENT AC-

TION USING ITS OWN AND DIFFERENT

STANDARDS, WHEN THE PERMITTING

FEDERAL AGENCY DECLINES TO ASSERT

JURISDICTION AND REQUIRE A PERMIT

USING ITS OWN STANDARDS ...................... 10

Il. PRIVATE PROPERTY WHICH DOES NOT

ACTUALLY ABUT ON OR BORDER A

“WATER OF THE UNITED STATES” IS

NOT SUBJECT TO THE REQUIREMENT OF

A SECION 404, CWA PERMIT BEFORE THE

LAND MAY BE DISTURBED ...........00000000..... 18

lil. THE REGULATORY DEFINITION OF “AD-

JACENT” WETLANDS WHICH CONTAINS

THE SUBJECTIVE STANDARD OF “NEIGH-

BORING” IS VOID FOR VAGUENESS

(ili)

iv

TABLE OF CONTENTS—Continued

Page

IV. DUE PROCESS AND THE SEVENTH

AMENDMENT REQUIRE THAT A CITIZEN

BE PERMITTED TO ASSERT A GOOD

FAITH BELIEF THAT A FEDERAL AGEN-

CY’S ADMINISTRATIVE ORDER IS _IN-

VALID OR INAPPLICABLE, AS A DIS-

PUTED FACTUAL ISSUE FOR THE JURY

TO DECIDE, DURING THE LIABILITY

PHASE OF AN ENFORCEMENT ACTION

SEEKING CIVIL PENALTIES FOR VIOLA-

TION OF THAT ORDER ............. piaieiine eases 24

CONCLUSION .......... icbilsedbse stb va ananibeae betadindadnpbcesematmenicaeteas 30

Pg gg 5 i) AUC ome ee ES Separately Bound

4

TABLE OF AUTHORITIES

Cases: Page

Avoyelles Sportsmen’s League, Inc. Vv. Marsh, 715

ef 8 me) Bt | IRR renee 12, 13, 14

Connally v. General Construction Co., 269 U.S. 385

CUNO TD <xubieincpspeenriscaslabbanunstaeatcoaneaeaaeiemacamlabaddadian 22

Ex parte Young, 209 U.S. 440 (1964) ...00000.... 27, 30

Federal Communications Comm’n Vv. American

Broadcasting Co., 347 U.S. 284 (1953) ............. 24

Golden Gate Audubon Society, Inc. v. U.S. Army

Corps of Engineers, 700 F. Supp. 1549 (N.D.

CK IID 'acisioscicisnace i ricsatcabenleecaiag le ee cada 12

Heckler v. Chaney, 470 U.S. 821 (1985) .............. . 12-13

Hoffman Group, Inc. Vv. U.S.E.P.A., 902 F.2d 567

¢, BS A | Peper penal rtae 2h Ee toMy ana Pee da 13

Huntington v. Attrill, 146 U.S. 657 (1892) 23

Massachusetts Vv. Morash, 490 U.S. 107 (1989) .. eS 22

N.W.F. v. Laubscher, 662 F. Supp. 548 (S.D. Tex.

BOIEE D xiiasi:scicnsesvehisncintenhigcaditcanetadielasmsticcaladadatamesiiniid iain 13

Oklahoma Operating Co. v. Love, 252 U.S. 331

PINE sciccusaxsuvancinbntancipasccceatiabeioaeeia aan iene 27

Orleans Audubon Soc. v. Lee, 742 F.2d 901 (5th

AEG IER hsncachvsencissnes cake eeaedea mae eee eens 12, 14, 15

Reisman V. Caplin, 375 U.S. 440 (1964) -......0...... .. 21,28

Smith v. Goquen, 415 U.S. 566 (1974) ...........00... 23

Southern Pines v. U.S., 912 F.2d 713 (4th Cir.

BOTOD skcssecixssvasncsinbeedabadaoeieeenaametie maaan 28

St. Regis Paper Co. v. U.S., 368 U.S. 208 (1961)... 28

Tate V. Us, SBE OB GE CRED sekevenmiceriecveccess 25, 29

Udall v. Tallman, 380 U.S. 1 (1965) 2202200202... 19

U.S. v. J.B. Williams Co., 498 F.2d 414 (2nd Cir.

BPG UD x kccseaicaasavapinssioeienelvoniibdainldakarca aaa 28

U.S. v. Lambert, 694 F.2d 536 (11th Cir. 1983) .. 13

U.S. v. Marathon Dev. Corp., 867 F.2d 96 (1st Cir.

1989) sis dina sceucasiameaibecepppmuiahen Manaaaainaeaana mE eae 13

U.S. v. Mersky, 361 is. oF 3 . | | | pees 23

U.S. v. National Dairy Products Corp., 372 U.S.

29 (1968) .............. Licks inant at Ce 23

vi

TABLE OF AUTHORITIES—Continued

Page

U.S. v. Riverside Bayview Homes, Inc., 474 U.S.

BEER IIE kink iantsdcnscxsancesussanaunbicgnverinastaamaite ace passim

Wadley Southern Railway Co. v. Georgia, 235 U.S.

RE: SUE ois bch sseusctansicessideucensdauiensiaeaeend 27, 28

Constitution and Statutes:

U.S. Constitution, Fifth Amendment ...........00............ 24

U.S. Constitution, Seventh Amendment .................... 24

Administrative Procedure Act, 5 U.S.C. 551 et

Re ARAL Sea tn ME AAS ANE TENCE TE ECE jexkete canal nea, 12

a es Oe BIE. ea secssicinancdcincntecisatncszarcacedias ease aaa! G

28 U.S.C. § 1346 ........ wadcinstlle ckiedistakaduadyaebenent cetera 6

RIE fe GRMN GRE CA Cee ner ns ee ves bins) 6

- pik Toe |) Reeenereenaes cidade Riipenkasadicen cana 6

Be ears Oe HII os csetcacsunnchbasccatanb acice a aeeaeleene 6

ee rE I acc cceacocinicecsgentaccedian ete eee 29

Clean Water Act, 33 U.S.C. § 1251 et seq. ........0.......

33 eipebedi sig Sepnebiubsbaesnauaac entero eae 11, 13, 14

33 U.S.C. § 1819 (b) ........... kee cee 6, 23

ee Oy ak Be oo ncincccvensiicceuendencatinicscaiceeen 23

33 U.S.C. § 1819 (d) ....... csksdaieleae nah Casa eee aes 6, 25

33 U.S.C. < Eatin Si Sor APA 11

33 U.S.C. g IID a acne cdarceteneicceactaaree ead a 11, 16

33 U.S.C. R BID heccevectrvaesscsuasecaveside ciucareee ae 11

RiP Roe & | 1) RAR merece nnerea | wie tee 11

gk Ee & |” | Ree eerecamemmrecy ni Ty oven ty 4

ee Tay Oe I sles oeacvisistasanceeoneceee ee a 12

Tee EE 8 TT 6 | 5 f een eae 19

fee gf Ff Th ¢ ener mnmeeUD aoe 3

33 C.F.R. § 328.3 (a) (1-7) (1987) .....................7, 18, 19, 21

33 C.F.R. § 328.8(b) (1987) ....................... ee

33 C.F.R. § 328.3(c) (1987) ............. Ree eet 7,8, 20, 21

40 C.F.R. §§ 230.1-230.80 000000. BONEN NAR ne ; 11

ei ese OR aes sccetscc ans cick 20

40 C.F.R. § 280.8(n) (1988) ................................ 10

vil

TABLE OF AUTHORITIES—Continued

Page

Miscellaneous:

Tiner, Ralph W., Jr., Mid-Atlantic Wetlands: A

Disappearing National Treasure, cooperative

publication of U.S. Fish & Wildlife Service and

the U.S.E.P.A., June, 1987 _... aetna

Scodari, Paul F., Wetlands Protection: The Role

of Economics, Environmental Law _ Institute,

Washington, D.C., 1990

PETITION FOR A WRIT OF CERTIORARI

Petitioners 8. Paul Hobbs, Donna M. Hobbs, Phillip

Ray Hobbs, and Dorothy V. Hobbs respectfully pray that

a Writ of Certiorari issue to review the judgment and

opinion of the United States Court of Appeals for the

Fourth Circuit entered in this case.

OPINIONS BELOW

The opinion of the Court of Appeals is unreported and

appears at Appendix (“App.”) la. The final order and

judgment order of the District Court are unreported and

appear at App. 16a, and App. 58a respectively. The find-

ings of fact and conclusions of law of the District Court

appear at App. 21a.

JURISDICTION

The judgment of the Court of Appeals was entered on

November 8, 1991. A timely-filed petition for rehearing

and suggestion for rehearing en banc was denied on De-

cember 11, 1991. App. 95a. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

STATUTE AND REGULATIONS INVOLVED

The Fifth Amendment, Seventh Amendment and rele-

vant provisions of the Clean Water Act of 1977, 33

U.S.C. $8 1251, et seg. (“CWA”) and implementing reg-

ulations promulgated by the United States Army Corps

of Engineers (“Corps Regulations”) and United States

Environmental Protection Agency Regulations (“EPA

Regulations”) are reprinted at App. 134a.

STATEMENT OF THE CASE

For more than nine years before this case began, Peti-

tioners Paul Hobbs and his father, Phil Hobbs (‘Hobbs’)

had been converting their wooded, agriculturally zoned

property in Gloucester County, Virginia, to agricultural

fields under the direct supervision of the U.S. Department

of Agriculture, Soil Conservation Service (“SCS”). The

ee |

2

SCS representatives reviewed federal wetland maps and

made on site studies to satisfy their agency’s requirement

that wetlands did not exist. The SCS laid out the ditch

system, established specifications and staked the ditches

that the Hobbs were to dig. Joint Appendix filed in the

Court of Appeals (“JA”) 432-436. The SCS representa-

tives inspected the work after it was done to ensure that

it complied with their directions. JA 436. The ditches

were improvements to existing ditches and new ditches

both of which were connected to previously existing

ditches, not on the Hobbs property, which ultimately

empty into the Ware River after passing through other

developed property and road culverts under Va. State

Route 623.! JA 463. The Hobbs’ property is located ap-

proximately '. mile from the Ware River. JA 227. In

1980 Phil Hobbs, (JA 225) and in 1986 Paul Hobbs, (JA

224) entered into “Cooperator’s Agreement” with the SCS.

In September, 1988 a Mr. Frazer of the Fish and Wild-

life Service (“F&WS”) came to the property and claimed

Paul Hobbs “might be doing work in a non-tidal wet-

lands.” JA 492. No other federal agency had ever made

such a claim before. JA 491. Mr. Frazer arranged a

site visit, the purpose of which, the Hobbs were told, was

“to involve someone from the Corps of Engineers, the

regulatory agency, to make a more definitive call over

whether the activities and the site would be regulated ~

under Section 404 of the Clean Water Act.” JA 392.

Mr. MeGlaun of the Corps testified Mr. Frazer “[c]alled

me and asked if I would accompany him to a site in the

Ware Neck vicinity to determine whether or not an area

that he felt was within our jurisdiction was, in fact,

within our jurisdiction,” and that when they arrived at

the Hobbs’ property, “[wle walked a portion of the prop-

erty to see what had been—what work had already been

‘The District Court found that after chemical tests of the water

in the ditches, “Those tests show a very high water quality currently

coming off the property, a water quality that meets both the EPA

and the State Water Control Board’s drinking water standards.”

App. 26a.

3

performed and, to the best of our ability, make a jurisdic-

tional determination as to whether or not the work was

within the Corps of Engineers’ jurisdiction.” JA 440-441.

The site visit occurred on October 4, 1988. Paul Hobbs

testified that when Mr. McGlaun left the property he

told him “. . . that he didn’t see where we had, you know,

done anything wrong... and he would get back to us.”

JA 494-495. Mr. McGlaun never got back to the Hobbs

JA 496, never told the Hobbs the Corps had jurisdiction

JA 465, never toid the Hobbs they needed a permit from

the Corps JA 465, and never told Paul Hobbs to stop the

ongoing work. JA 466. Mr. McGlaun testified that from

the date of the site visit to the date of the Hobbs’ trial

he has never issued a Cease and Desist Order to the

Hobbs, which the Corps Regulations, 33 C.F.R. § 326.3,

require be issued when a violation exists. JA 464-465.

App. 144a.

At Mr. Frazer’s office immediately after the October 4,

1988 site visit Mr. McGlaun told Mr. Frazer “. . . that

I felt like unless we could have a consensus of all sites

meeting the multiparameter approach, it would be too

vague and too gray and that we would not want to assert

jurisdiction” (JA 450), and “|t]hat it would be difficult

because it is not the type of area that the Corps normally

likes to become involved in.” JA 451. Mr. McGlaun

specifically told Mr. Frazer that unless a wetland de-

lineation was done using the Corps’ Manual he would not

take any action. JA 456-457. Mr. McGlaun reported the

results of the October 4, 1988 site visit to his department

head in the Norfolk District Corps, Mr. Poore, and to Ms.

Steele, Mr. McGlaun’s immediate superior and, “.

told them that Gary Frazer was going to refer this to

EPA if the Corps didn’t assert jurisdiction, and Mr.

Poore told me to go ahead and let Gary Frazer refer the

property or the situation to EPA.” JA 452.

Mr. MeGlaun testified at trial that the Corps has never

determined that the Hobbs’ work was unauthorized. “I

have not. I have never determined that that is an un-

4

authorized—or that is a 404 area.” ? JA 465. The Corps

is the sole permitting agency under Section 404 of the

CWA.* JA 342-343, 381, 392. To determine whether

jurisdiction existed to require a Section 404, CWA permit

in this case, the Norfolk District Corps required that the

standards and procedures set out in the Corps’ Wetlands

Delineation Manual (“Corps Manual’’) be applied to a

particular property to determine whether it met the regu-

latory definition of a wetland, 33 C.F.R. § 328.3(b). App.

145a; JA 454-457. The Corps would not accept wetland

jurisdictional determinations using the EPA Wetlands

Manual, Revised Interim Final Edition of April 1988

(“EPA Manual”). JA 456-457. After the October 4, 1988

site meeting Mr. Frazer submitted data to his superiors

at F&WS reflecting that he claimed only 2 of 5 sites he

examined on the Hobbs property were wetlands pursuant

to the Corps’ Manual, but that all 5 sites “would be wet-

lands under EPA methodology”.* JA 159. After formal

written requests from the EPA on November 17, 1988

(JA 157) and the F&WS on December 12, 1988 (JA

159) that the Corps assert CWA jurisdiction over the

2 During the Government’s case the District Court pointed out

this problem to the Government’s Counsel. “So at the threshold

level, before you can have a violation of Section 1311—and the

Army Corps of Engineers is the only permitting authority under

this statute. The EPA can’t go out and determine whether to

issue permits or not issue permits. The Army Corps of Engineers

does that. Now, maybe your evidence is going to show they are

willing to assume jurisdiction and require permits, but so far it

doesn’t, and in fact it looks like it may be to the contrary. So you

have certainly got a problem in that regard on Count I. If your

permitting authority isn’t willing to take jurisdiction, it would be

difficult to have a violation.” Trial Transcript at 335-336.

3 The Court of Appeals erroneously determined that the EPA has

authority to issue Section 404 permits. App. 8a. Only the Secretary

of the Army, by delegation to the Chief of Engineers and further

to District Engineers, has authority to issue Section 404 permits.

33 U.S.C. § 1344(a) and (d). App. 139a.

4The Court of Appeals acknowledged that, “the EPA Manual

does represent a significant change in the definition [of a wetland |

and an expansion of jurisdiction.”’” App. 10a.

2)

Hobbs property and require the Hobbs to obtain a permit,

the Corps did not do so.*

The EPA, with no prior notice or opportunity to be

heard given to the Hobbs, issued a Findings of Violation

and Order for Compliance to the Hobbs on March 23,

1989 (App. 118a.), which was amended on April 25, 1989

(App. 126a.) after the Hobbs asserted that their property

was not adjacent to the Ware River ‘collectively, “EPA

Orders”). Both of EPA’s Orders alleged that the Yobbs

had violated Section 404 of the CWA by filling wetlands

without a permit from the Corps." App. 124a. and 1382a.

In part, because the Hobbs had been told that the Corps

was the agency that had jurisdiction and would say

whether or not a permit was required, and because Mr.

McGlaun ef the Corps had been at the site on October 4,

1988 specifically to make a determination of jurisdiction,

the Hobbs in a good faith belief that the EPA’s Orders

were in error did not comply, although Paul Hobbs did

stop all work. JA 496-500. Phil Hobbs had not done any

work on his property since the summer of 1985. JA

478-479.

5 The Court of Appeals’ finding that “. . . nothing in the record

suggests that the Corps actually refused to exert jurisdiction over

the Hobbs’ property throuch a wetlands determination” is inex-

plicable. App. 7-8a. In addition to Mr. McGlaun’s site visit and

discussions with his superiors, the formal request to assert jurisdic-

tion from F&WS specifically stated F&WS “made wetland determi-

nations” and enclosed “field forms ... for both the Corps and [EPA]

methodologies”. JA 160. The formal request to assert jurisdiction

from EPA specifically stated “one of our field biologists visited the

site to verify the fact that the site was being converted from PFOIA

forested wetlands into hayfields.” JA 157.

8’ Compliance with the EPA’s Orders required, among other affirma-

tive acts, plugging the ditches and submission of a plan for restor-

ing much of the property to the condition it was in prior to the

work the Hobbs had performed over the previous 9 vears under the

SCS’s supervision. The Court of Appeals held that the Government

is not estopped under the facts of this case and that ruling has not

been appealed. App. 18a.

6

Having no administrative remedy to assert their belief

in the invalidity and inapplicability of the EPA Orders,

and knowing their property was not adjacent to the Ware

River or tributaries of the Ware River as alleged in the

EPA Orders, the Hobbs filed a suit for Declaratory Judg-

ment pursuant to 28 U.S.C. §§ 2201 and 2202 in the

District Court asserting jurisdiction pursuant to 28 U.S.C.

$ 1831. JA 19. The Hobbs obtained a Temporary Injunc-

tion preventing the Government from further enforcing

the EPA Orders and allowing the Hobbs to continue to

harvest their hay. JA 59. The Hobbs’ Complaint was

later dismissed for lack of subject matter jurisdiction and

the Government’s Counterclaim pursuant to section 309

(b) of the CWA, 33 U.S.C. $1319(b) and 28 U.S.C.

$$ 1331, 1345 and 1355, for civil penalties of potentially

more than $66,975,000, was permitted to proceed at trial.’

App. 102a. The trial was bifurcated into liability and

penalty phases.

Mr. Frazer and representatives of the EPA performed

further wetland studies using the EPA Manual adopted

in April 1988 and a Federal Manual adopted in 1989

(“Federal Manual’). JA 402-403. No wetland studies

were done using the standards of the Corps Manual. All

wetland experts testified that application of the EPA

Manual and the Federal Manual effective on March 20,

* The actual total of civil penalties to which the Hobbs were ex-

posed was clearly debilitating. From 1980 through February 4,

1987, each day discharged material remained on the ground was a

separate violation subject to a $10,000 civil penalty, 33 U.S.C.

§ 1319(d). App. 189a. The CWA penalty provisions were increased

to $25,000 per day after February 4, 1987. App. 138a. From 1980

through the District Court’s judgment, the unpermitted discharge

claim alone exposed the Hobbs’ to the potential of $42,675,000 in

civil penalties. In addition, failure to comply with the EPA Orders

constituted a separate per day violation of $25,000 for each day the

Hobbs did not comply. Because the Hobbs’ Complaint for Declara-

tory Judgment which supported the Temporary Injunction was

dismissed for lack of subject matter jurisdiction, the Hobbs were

exposed to $12,150,000 each in additional civil penalties for failure

to comply with EPA Orders. App. 10a.

1989, after all of Phil Hobbs’ and much of Paul Hobbs’

work had been completed, expanded the jurisdictional

reach of Section 404 of the CWA because it allowed them

to determine property to be a wetland using the Corps

Regulatory definition 33 C.F.R 328.3(b), which they

would not have been able to do, applying the standards

of the Corps’ Manual.* JA 373, 381-382, 390-391, 412-

415, 468 516-517. In response to special interrogatories

propounded by the District Court, the jury found that

the Hobbs filled wetlands as defined by 33 C.F.R. § 328.3

(b). App. 97a. and 100a.

All witnesses including the Government’s own photo

interpreter testified at trial that the waterways on the

Hobbs property were mandug drainage ditches and that

they were non-tidal. JA 3638-368. Paul Hobbs testified

that they were mandug, non-tidal drainage ditches dug

on dry land. JA 499. An EPA expert witness marked

the point on an Exhibit where in his opinion tributaries

to the Ware River stopped and mandug drainage ditches

began. This point was well short of the Hobbs property

lines. JA 358-363. Notwithstanding that prior Corps

Regulations, in effect when Phil Hobbs did the work on

his property (App. 141a.) state that mandug non-tidal

drainage ditches are not tributaries and the Corps regu-

lations effective since January 12, 1987, in effect when

Paul Hobbs did the work on his property (App. 148a.)

state in the Preamble that the Corps did not normally

consider mandug, non-tidal drainage ditches dug on dry

land to be “waters of the United States” defined at 33

C.F.R. § 828.31a) 11-7) (App. 144a.) the District Court

refused to so instruct the jury. JA 232. The District

Court also refused to instruct the jury that the use of

the wora “neighboring” in the regulatory definition of

adjacent (wetlands), 33 CF.R. S$ 328.3(¢e) (App. 145a.)

must he given the same meaning as “contiguous” and

“bordering” or be unconstitutionally “void for vagueness”.

“

‘The Court of Appeals agreed, “. .. the EPA Manual does repre-

sent a significant change in the definition and an expansion of

jurisdiction.” App. 10a.

8

Finally the District Court refused to instruct the jury

that the Hobbs had the right to rely upon their good

faith belief that the EPA Orders were incorrect or in-

applicable as an absolute defense to Count II of the Com-

plaint which sought civil penalties of $25,000 per day

for each day the Hobbs did not comply. JA 236; App.

114a. In response to special interrogatories the jury

found that the Hobbs violated the EPA Orders. App. 99a.

and 10la. Because the Hobbs conceded that they did not

have a permit, the District Court ruled that no issue of

fact was presented and refused to allow the jury to deter-

mine if the Hobbs discharged, without a permit required

by the Corps. App. 62a-63a.

At the conclusion of the penalty phase of the trial Phil

Hobbs was fined $100 and Paul Hobbs $200. App. 19a.

Twenty five acres of Paul Hobbs’ land must be allowed to

revegetate naturally (App. 18a.) and the Hobbs must

implement a restoration plan which will cost Phil Hobbs

$105,400 and Paul Hobbs $128,000 before they can change

the agricultural use of the land to another agricultural

use. App. 17a and 38la.

The Hobbs appealed. The Court of Appeals affirmed,

finding no merit in the Hobbs’ argument “. . . that because

the Corps did not find that the Hobbs were discharging

pollutants into wetlands nor requiring them to secure a

permit, the EPA has nothing to enforce.’”” App. 7a. The

Court of Appeals held that “the discharge itself is illegal.”

App. 8a. The Court of Appeals expanded this Court’s

holding in United States v. Riverside Bayview Homes,

Inc., 474 U.S. 121 (1985) (“Riverside Bayview Homes”)

‘ to include wetlands on the Hobbs property which do not

“actually abut on a navigable waterway”, 474 U.S. at

135, and included “wetlands that are not adjacent to

bodies of open water.” 474 U.S. 132 n.8 App. lla. The

Court of Appeals rejected the Hobbs’ claim that the term

“neighboring” found in the regulatory definition of “ad-

jacent”, 33 C.F.R. § 328.3(c), is void for vagueness. App.

lla. The Court of Appeals also rejected the Hobbs claim

9

that constitutionally mandated due process required that

they be permitied to assert their good faith belief defense

to the EPA’s Orders, as a factually disputed issue to the

jury during the liability phase of the trial, holding that

the Hobbs are afforded constitutionally adequate process

because the District Court considered these claims during

the penalty phase of the trial. App. 12-13a.

REASONS FOR GRANTING THE WRIT

The Court of Appeals is in conflict with the decisions of

other Circuits which hold that under Section 404 of the

CWA, the Corps’ decision to assert jurisdiction and re-

quire a permit is discretionary and until the Corps has

determined whether or not it has jurisdiction and a per-

mit is required, the Courts have no jurisdiction to inter-

fere. The Court of Appeals has permitted a lay jury to

make a wetland determination using standards which the

permitting agency, the Corps, refuses to recognize, which

e other Circuits have held not even the District Court

has jurisdiction to make. This case demonstrates faulty

statutory construction of Section 404 of the CWA and

the unwarranted expansion by the Court of Appeals of this

Court’s decision in Riverside Bayview Homes, supra, ex-

panding federal regulatory jurisdiction over as much as

4,400,000 acres of private wetland property converted,

mostly for agricultural purposes, nationwide since 1980

into “waters of the United States”.’ This decision sub-

jects the owners of these millions of acres of expanded

“waters of the United States” to retroactive enforce-

ment actions by the EPA seeking millions of dollars in

civil penalties in each case. The future implications of

this case upon private property owners whose property

is not “bordering” or “contiguous” to any “water of the

United States” are dependent only upon the subjective

standards applied by a jury that the wetlands are “neigh-

® See, Tiner, Ralph W., Jr., Mid-Atlantic Wetlands: A Disappear-

ing National Treasure, June 1987, a cooperative publication of the

U.S. Fish & Wildlife Service and the U.S. Environmental Protection

Agency; Scodari, Paul F., 1990 Wetlands Protection: The Role of

Economics, Envy. Law Institute, Washington, DC.

10

boring’’, or as the Court of Appeals believes is supported

by this Court’s holding in Riverside Bayview Homes,

supra, “in reasonable proximity to other waters of the

United States.” These private property owners and the

federal agencies which seek to regulate their private

property as “waters of the United States’ pursuant to

Section 404 of the CWA are in need of this Court’s

guidance, by answering the question left unanswered in

Riverside Bayview Homes, supra.’” Finally, the denial of

the constitutional right of a citizen to assert a good faith

belief in the invalidity or inapplicability of an Adminis-

trative Order issued by a federal agency as a complete

defense to liability for civil penalties of $25,000 each day

the Order is not complied with, where no remedy exists

to contest the Order’s validity, save-noncompliance, raises

a substantial constitutional issue. This Court should grant

certiorari to resolve these issues.

I. A NON-PERMITTING FEDERAL AGENCY, MAY

NOT BRING AN ENFORCEMENT ACTION USING

ITS OWN AND DIFFERENT STANDARDS, WHEN

THE PERMITTING FEDERAL AGENCY DECLINES

TO ASSERT JURISDICTION AND REQUIRE A

PERMIT USING ITS OWN STANDARDS

The Court of Appeals is incorrect as a matter of law

in holding that both the Corps and EPA have authority

to issue permits under Section 404 of the CWA." The

EPA in its own regulations, 40 C.F.R. $ 230.3(n) (1988)

(App. 146a.), acknowledges that the Corps is the sole

permitting authority under Section 404 of the CWA.

While the Court of Appeals is correct that both the Corps

10 “We are not called upon to address the question of the author-

ity of the Corps to regulate discharges of fill material into wetlands

that are not adjacent to bodies of open water, see 33 C.F.R.

§$§ 323.2(a)(2) and (3) 1985 and we do not express any opinion on

that question.” 474 U.S. at 132 n.&8 (emphasis added).

11 See, App. 8a. (“EPA would not be much of an authority if it

could make wetlands determinations, issue permits, but could not

enforce the very rule for which those permits provide the excep-

tion.””) (emphasis added).

11

and EPA have enforcement authority under the CWA,

Congress did not grant permitting authority to the EPA

under Section 404 of the CWA." App. 139a.

Congress, in Section 404 of the CWA, explicitly and

without equivocation gave authority to determine juris-

diction and the requirement of a permit solely to the

Secretary, by delegation here to the Norfolk District Engi-

neer, and no other federal agency. App. 139a. Nothing

in Section 404 of the CWA gives the Administrator the

right to make “jurisdictional determinations” or substi-

tute his judgment of when a Section 404(a), CWA permit

is required. Until the Corps has exercised its discretionary

authority pursuant to 33 U.S.C. § 1344(a), the question

of whether or not “the discharge of any pollutant” is “in

compliance with Section 404” under 33 U.S.C. § 1311(a)

is incapable of determination.

The Administrator’s only statutory jurisdictional role

in the Section 404 permitting program is Section 404 (ce)

“veto” authority over permitting decisions made by the

Secretary that have specified impacts, none of which are

applicable here, 33 U.S.C. $ 1344(¢c), and the develop-

ment, in conjunction with the Secretary, of guidelines for

the Secretary’s permit decisions. 33 U.S.C. § 1344(b).

App. 189a. These guidelines are not issued on a case by

case basis as each permit application or decision is made,

rather they are applicable to all permit applications sub-

mitted to the Corps. See, 40 C.F.R. §§ 230.1-230.80.

Because the evidence was uncontradiced that the Corps

has never determined that the Hobbs required a Section

404 permit for the activities the EPA alleged in this case

were “not in compliance with Section 404” of the CWA,

the Hobbs moved for a Directed Verdict at the close of

the Government’s case and again at the conclusion of all

12 Section 404 of the CWA is totally distinguished from other per-

mit programs of the CWA which the EPA administers as the permit

authority. See, 33 U.S.C. $1242 (National Pollutant Discharge

Elimination System, NPDES).

12

evidence."* No evidence was presented by the Govern-

ment that the Hobbs committed the Section 301(a) vio-

lation with which they were charged by the EPA. The

Government’s own witnesses conceded that if the Corps

did not assert Section 404, CWA jurisdiction over prop-

erty or require a permit that there would be no violation

of the CWA for discharging dredged or fill material onto

that property. JA 336-337, 384-387. Both the District

Court (App. 59a.) and the Court of Appeals (App. 8a.)

held that because the Hobbs did not have a permit, even

if the permitting agency, the Corps, did not require one,

an enforcement action alleging an unpermitted discharge

by the EPA is nevertheless authorized."

The Secretary’s exercise of, or refusal to exercise, his

discretionary authority pursuant to Section 404 of the

CWA is only subject to arbitrary and capricious judicial

review pursuant to the citizens suit provision of the

CWA, 33 U.S.C. § 1365, and the APA, 5 U.S.C. 551

et seq. See eg, Avoyelles Sportsmen's League, Inc. Vv.

Marsh, 715 F.2d 897, 902 n.11 (5th Cir. 1983) (“We

have held that enforcement of the CWA is not a ‘manda-

tory duty.’”) (citation omitted)" See also, Heckler. v.

'SMr. McGlaun of the Corps testified, “I have not. T have never

determined that that is an unauthorized—or that is a 404 area’

JA 465.

'4The District Court stated “. . . but even if they had applied,

for the sake of argument, for a permit and. the Army Corps of

Engineers had made a determination that a permit wasn't necessary

because there weren't jurisdictional wetlands involved I’m of. the

opinion that the EPA could still go forward with an enforcement

action.” App. 90a.

18 See, Orleans Audubon Soc. vy. Lee, 742 F.2d 901, 904 (5th Cir

1984) (“Orleans concedes that we normally must review decisions

of the Corps under the arbitrary and capricious standard and it

concedes that decisions not to require permits for actions by pri-

vate developers, such as those at issue here. are usually considered

to be discretionary.”). See, also, Golden Gate Audubon Soci: ty, Ine.

v. U.S. Army Corps of Engineers, 700 F. Supp. 1549, 1550-1551

(N.D.Cal. 1988) (“When it learned from the Perkins dk position that

the Corps had disclaimed jurisdiction on November 7, the EPA

13

Chaney, 470 U.S. 821 (1985) (Absent statutory method

of review, agency’s decision not to take enforcement ac-

tion presumed immune from review).

The split in the Circuit decisions presented in the

instant case is unusual in that it occurs sub silentio. No

other Circuit has found a Section 30] (a), CWA violation,

because of a discharge without a Section ,04 permit, with-

out the permitting authority, the Corps, having asserted

the requirement for a permit.” Even in those cases where

a wetland determination made by the Corps has been

determined to be deficient, other Circuits limit the District

Court’s jurisdiction to remand to the Corps for a proper

wetland determination,'?

In the instant case the Court of Appeals has held that

When the Corps did not make a detailed wetland deter-

mination (App. 8a.), a lay jury may do so based upon

evidence presented by non-permitting authorities using

an HPA Manual, which did not exist until & years after

the Hobbs began work, which the Corps did not recog-

nize, and the 1989 Federal Manual which did not exist

When the Hobbs did any of the work.'* The Hobbs jury

Was permitted to disregard the Corps’ Manual, which

the Corps required be used (JA 456-457), use whatever

evidence it found appropriate from non-Corps expert

voluntarily withdrew its January 12 Findings and Order, declaring

them null and void.”); N.W.F. v. Laubseche r, 662 F. Supp. 548 (S.D.

Tex. 1987) (citizens suit, holding enforcement decision is discre-

tionary).

See, eg., US. Vv. Marathon Deve lopment Corp., 867 F.2d 96, 97

(Ist Cir, 1989); Avoyelles, supra, 715 F.2d at 901: Hoffman Group,

Inc. V. US.E.P.A., 902 F.2d 567, 568 (7th Cir. 1990); U.S. v.

Lambert, 695 F.2d 906, 539 (11th Cir. 1983).

'T See, footnote 19 infra.

'’ The jury found that Paul Hobbs did not discharge a pollutant

into wetlands in 1989. App. 98a and Phil Hobbs had not discharged

a pollutant into wetlands since 1985. App. 101la.

14

witnesses who used the standards of the EPA Manual

and the 1989 Federal Manual and instructed by the Dis-

trict Court to find whether or not wetlands existed on

the Hobbs property by applying the Corps regulatory def-

inition of a wetland, 33 C.F.R. § 328.3(b). App. 144a.

Thus, the Court of Appeals in this case has split with

the other Circuits by sanctioning a lay jury’s “de novo

wetland determination”, which all other Circuit Courts

have, until the instant case, held not even a District

Court has jurisdiction to make."”

In the instant case the Court of Appeals held that the

permitting authority’s requirement that a permit is neces-

sary is irrelevant: “[ujnder 33 U.S.C. $1311(a) the

discharge of a pollutant is illegal ‘except’ as in compliance

with sections authorizing permits . . . thus the discharge

itself is illegal.” App. 8a. In Orleans Aububon Soc.,

supra at n.15, the landowner did not have a Section 404,

CWA permit because the District Engineer had deter-

mined that no permit was required. Under circumstances

similar to the Corps reliance upon its field scientist, Mr.

McGlaun, in the instant case, the Fifth Circuit refused

to find a District Engincer’s decision not to require a

permit to be arbitrary and capricious under the citizens

1” Avoyclles, 715 F.2d at 906 (“The wetlands determination is

precisely the type of agency decision that is normally subject to

limited judicial review ... De novo review would permit the courts

to intrude into an area in which they have no particular com-

petence, and the presentation of the scientific evidence at both the

administrative and judicial levels of the proceedings would result in

inefficiencies and delays where they are most harmful.”) and Jd.

at 903 n.14 (“The private defendants now concede that the Court

below was without power to substitute its own wetland determina-

tion for that made by the agency. The role of the Court ended upon

a finding that the jurisdictional determination made by the agency

was not proved. Remand was the only appropriate judicial action.” ) ;

Orleans, 742 F.2d at 907 (“On the other hand, if the decision repre-

sents a valid exercise of the Corps’ decision-making powers, then

this Court should not interfere with the Corps’ judgment. Overton

Park, 401 U.S. at 416, 91 S.Ct. at 824.”).

15

suit provision of the CWA and the APA.” In the instant

case the Court of Appeals has held that when the field

scientists of the F&WS and EPA disagree with the Corps

and its field scientist, the property owner can be the re-

cipient of an Administrative Order and a subsequent

enforcement action for millions of dollars in civil penal-

ties, despite the fact that the Corps has never asserted

the requirement for a Section 404 permit.

The Court of Appeals is simply wrong in stating,

“[mjoreover, nothing in the record suggests that the

Corps actually refused to exert jurisdiction over the

Hobbses property through a wetlands determination.”

App. 8a. After being specifically requested by formal

written requests from the EPA on November 17, 1988

(JA 157) and the F&WS on December 12, 1988 (JA

159) to assert jurisdiction and require the Hobbs to ob-

tain a permit, the Corps declined to do so. These formal

requests to assert jurisdiction over the Hobbs property

and require a permit contained Wetland Determination

Data Sheets applying both the EPA’s and the Corps’

standards for determining jurisdiction, and referenced

those agencies’ representatives as having visited the prop-

erty and determined it to be wetlands. Jd. The Corps’

enforcement officials testified that the Corps did not as-

sert jurisdiction over the Hobbs property and require

a permit after these formal requests, and that both re-

quests were received after the Corps’ field investigator

had made his investigation of the Hobbs property on Oc-

tober 4, 1988 specifically for the purpose of determining

“° Orleans, 742 F.2d at 911 (“Relying on this report, and having

no concrete information which would indicate that the field inspector

was in error, Colonel Sands agreed that the Corps had no jurisdic-

tion under section 404 to require C.I.T. to obtain a permit for the

culvert installation. His reliance on this report appears to have been

in good faith, and we find no basis for holding that Colonel Sands

decision was arbitrary or capricious. Even assuming that the re-

port was erroneous, we cannot find in the record before us any

indication that Colonel Sands’ reliance upon the findings of the field

investigator was so unreasonable as to indicate that. the Corps’

handling of this matter was actionable under the APA.”).

16

if the Corps had jurisdiction and a permit would be re-

quired? JA 389, 940, 440-441, 465.

The injustice in this case is readily apparent. The

F&WS and EPA, dissatisfied with the Corps’ decision not

to assert Section 404, CWA jurisdiction over the Hobbs

property and require a permit, issued the EPA Orders

and subsequently filed this enforcement action seeking

what could have been more than $66,975,000 in civil pen-

alties against the Hobbs.** Although the United States

21 The Hobbs concede that the Corps never issued a formal letter

to the EPA and F&WS stating that the Corps refused to assert

jurisdiction. However, the lack of a formal response of any kind

was not relevant to the Court of Appeals’ determination. The Court

of Appeals held that because the Hobbs did not have a permit,

irrespective of the reason, the Hobbs violated the CWA. App. &a.

Even if the Corps had issued a formal letter that there was no

CWA jurisdiction and no permit was required, the Hobbs would not

have had a permit and under the Court of Appeals’ decision would

have violated the law. Jd.

22 The Court of Appeals relied upon Avoyelles as authority for

this transfer of a permit program entrusted by Congress to the

Corps under 33 U.S.C. § 13844(a) to the EPA. However, the Court

of Appeals failed to appreciate that, unlike the instant case, wher

the Corps has never asserted Section 404 authority and the require-

ment for a permit and so notified the property owner through :

cease and desist order, the Corps did in Avoyelles. See, supra at

n.16. Nor did the Court of Appeals give any weight to the differing

jurisdictional results obtained by applying the Corps’ Manual, the

EPA Manual and 1989 Federal Manual. Compare Avoyelles at 911

n.27 (“Heightened deference is due an agency’ interpretation of “its

own” regulations. Although here it was the EPA thet applied the

Corps’ definition in making the final wetlands determ ination, we see

no reason to lessen our deference in this case. The methodology was

developed through consultations between the Corps and EPA. Fur-

ther, the EPA subsequently added the same definition to its own

regulations. 40 C.F.R. $§ 230.3(t), 280.41(a)(1) (1982). On appe al

hoth agencies have offered the same interpretation of “thetr own

regulations.”) (emphasis added). The Court of Appeals in the in-

stant case found unimportant the lack of evidence that any “dis-

charge” occurred in a “wetland” as determined by the Corps’ Man-

ual. and that the Corps did not assert at trial a permit was required.

Undaunted, the EPA proceeded on its own standards, not the Corps,

which the Court of Appeals concedes, “does represent a significant

17

was the named Plaintiff it was the EPA and not the

Corps that instituted this enforcement action against the

Hobbs.** In Mr. McGlaun’s 13 years with the Corps,

it is the Corps and not the EPA that makes these de-

terminations.**

The Court of Appeals decision in this case is likely

to be recurring because it sanctions Section 404, CWA

enforcement actions by the EPA against the owners of

millions of acres of land throughout the United States,

converted to other uses since 1980, irrespective of the

Corps’ position, either expressly or through application

of its standards, that jurisdiction did not exist and a

permit was not required. The EPA now has judicial au-

thority to apply its jurisdictional standards rather than

the jurisdictional standards established by the permit-

ting authority authorized by Congress. Even in those

cases where the Corps has determined that no jurisdic-

tion existed and a permit was not required, EPA Admin-

istrative Orders and enforcement actions have now been

~ judicially sanctioned, with the only issue necessary to im-

position of civil and criminal penalties being did the prop-

erty owner have a permit. The only means by which a

property owner can insulate himself from an EPA Admin-

istrative Order which requires the restoration of nine

years of work or face the potential of ruinous civil penal-

ties is by actually having a@ permit, even if nine years ago

change in the definition [of a wetland] and an expansion of juris-

diction.” App. 10a.

*3 Mr. Carson: Well, the Corps isn’t bringing this case, Your

Honor. He is a Corps employee.

The Court: Who is bringing it?

Mr. Carson: The EPA.

The Court: I thought it was the United States that was the

named Plaintiff.

Mr. Carson: Well, that’s true, Your Honor. JA 480.

“+The Court: But basically, in your experience then, it has

been the Corps who has been making these field inspections and

determinations in this area.

The Witness: Yes, ma’am, since we are the permitting authority.

JA 457-458.

LCC nnnnnnnnn

18

the Corps said no jurisdiction existed and a permit was

not required.

II. PRIVATE PROPERTY WHICH DOES NOT ACTU-

ALLY ABUT ON OR BORDER A “WATER OF THE

UNITED STATES” IS NOT SUBJECT TO THE RE-

QUIREMENTS OF A SECTION 404, CWA PERMIT

BEFORE THE LAND MAY BE DISTURBED

At trial, the Hobbs moved for a directed verdict be-

cause the evidence failed to establish jurisdiction, i.e.,

that wetlands, even if they existed, were adjacent to

mandug, non-tidal drainage ditches dug on dry land and

therefore were not wetlands adjacent, 33 C.F.R. $ 328.3

(a) (7), to other “waters of the United States” as de-

fined by 33 C.F.R. $ 328.3(a) (1-6).** When this motion

was denied, the Hobbs proffered a Jury Instruction re-

questing that the District Court instruct the jury that,

from July 19, 1977 through July 22, 1982, the Corps

explicitly excluded “man-made, non-tidal drainage and ir-

rigation ditches excavated on dry land” from the defini-

tion of tributaries contained within the jurisdictional def-

initions of “waters of the United States.” App. 141a. The

Hobbs further requested that the District Court instruct

the jury that the Corps regulations effective January 12,

1987, through the time of trial, explicitly stated in the

Preamble that, “We generally do not consider the follow-

ing waters to be ‘waters of the United States’: (a) non-

25 Defining the terms “navigable waters of the United States’

and “waters of the United States” is synonymous with jurisdiction.

If the property is not a “water of the United States” there is no

jurisdiction pursuant to Section 404 of the Clean Water Act to

require a permit. 33 C.F.R. 328.3(a) (1-7). See, Riverside Bayview

Homes, 474 U.S. at 132 (“In determining the limits of its power to

regulate under the [Clean Water] Act, the Corps must necessarily

choose some point at which water ends and land begins.”) The Dis-

trict Court noted the importance of this jurisdictional requirement,

“On the other hand, in this case the Court wouldn't have jurisdic-

tion over these wetlands if they weren’t adjacent to the Ware River

or one of its tributaries, so the Court has to take that into con-

sideration.” App. 29a. (emphasis added).

19

tidal drainage and irrigation ditches excavated on dry

land. . .” App. 148a. JA 232. The District Court. re-

fused to so instruct the jury.

The Court of Appeals and the District Court were re-

quired, but refused, to give deference to the interpreta-

tion of the statute given by the agency administering

it." None of the Corps’ definitions of “waters of United

States”, which wetlands must be adjacent to, include non-

tidal drainage ditches. See, 33 C.F.R. § 328.3(a) (1-6)

App. 144a. The lack of inclusion of non-tidal drainage

ditches in the Corps definitions of “waters of the United

States”, and its regulatory exclusion of such drainage

ditches as “waters of the United States” in the Preamble.

demonstrate that the Corps did not prior to 1982, and

does not now, consider drainage ditches to be bodies of

open water or “waters of the United States” over which

the Corps asserts jurisdiction under the CWA. See. 33

C.F.R. § 323.2(a) (1977). App. 142a.

The Hobbs do not dispute that their drainage ditches

are hydrologically connected to the Ware River, as the

Court of Appeals notes. App. 1la. Common sense com-

pels recognition of the fact that all drainage ditches

throughout the United States ultimately form a hydro-

logical connection at some point to a water body which

is pursuant to the Corps Regulations a “water of the

United States”. The Court of Appeals’ reliance upon a

hydrological connection as sufficient to bring wetlands

adjacent to drainage ditches into regulation as “adjacent

within the meaning of the statute” (App. 10a.) disre-

gards the Corps’ interpretation of the statute, which the

Court of Appeals was required to grant great deference

and expressly violates this Court’s decision in Riverside

Bayview Homes, supra that, “. .. the Corps must neces-

“6 See, Udall v. Tallman, 380 U.S. 1. 16 (1965) (“When faced with

the problem of statutory construction, this Court shows great def-

erence to the interpretation given the statute by the officers or

agency charged with its administration.”): Riverside Bayview

Homes, 474 U.S. at 131 (according deference to the Corps’ inter-

pretation of Section 404 of the CWA.)

20

sarily choose some point at which water ends and land

begins.” 470 U.S. 132.°° Rather than deferring to the

Corps’ interpretation of the statute, the Court of Ap-

peals has substituted its judgment for the Corps.”

The Court of Appeals ignored that under this Court’s

holding in Riverside Bayview Homes, supra wetlands

adjacent to drainage ditches would not be subject to regu-

lation, if the Corps itself, excludes drainage ditches from

its definition of waters of the United States.** This Court

emphasized that its holding in Riverside Bayview Homes,

supra was limited to those wetlands adjacent, i.e., which

“actually abuts on a navigable waterway” which are

bodies of open water.”

This Court should grant this Petition to answer the

uncertainty left by Riverside Bayview Homes Inc., supra,

27 The Court of Appeals’ reference to “adjacent” as “the express

language of the statute” is incorrect. App. lla. The CWA does not

contain a definition of adjacent. This definition is*tontained in the

Corps Regulations at 33 C.F.R. § 328.3(c). App. 145a. The same

definition is found in the EPA’s Regulations at 40 C.F.R. § 230.3(b).

App. 146a.

28 Relying on dicta in Riverside Bayview Homes, supra the Court

of Appeals determined that “. . . the landward limit of Federal

jurisdiction under Section 404 must include any adjacent wetlands

that form the border or are in reasonable proximity to other waters

of the United States as these wetlands are part of this aquatic

system” to support its refusal to defer to the Corps’ Regulations

defining the extent of its jurisdiction under Section 404 of the

CWA. App. lla. (emphasis added)

29Again, we cannot say that the Corps’ judgment on these

matters is unreasonable, and we therefore conclude that a de fini-

tion of “waters of the United States” encompassing all wetlands

adjacent to other bodies of water over which the Corps has jurisdic-

tion is a permissible interpretation of the Act. Because respondent's

property is part of a wetland that actually abuts on a navigable

waterway, respondent was required to have a permit in this case.”

437 U.S. 135. (emphasis added).

20 “We are not called upon to address the question of the authority

of the Corps to regulate discharge of fill material into wetlands

that are not adjacent to bodies of open water, see 33 C.F.R.

$$ 323.2(a)(2) and (3) (1985) and we do not express any opinion

on that question.” 474 U.S. at 132 n8 (emphasis added).

21

which is likely to be recurring and define for the reg-

ulatory agencies and the regulated community how far

landward the private property of citizens, “adjacent” to

drainage ditches, may be regulated under Section 404 of

the CWA, as “waters of the United States”.

Ill. THE REGULATORY DEFINITION OF “ADJACENT”

WETLANDS WHICH CONTAINS THE SUBJEC-

TIVE STANDARD OF “NEIGHBORING” IS VOID

FOR VAGUENESS

Central to this enforcement action seeking civil penal-

ties which could have exceeded $66,975,000 was the Hobbs

defense that their property was not adjacent to the Ware

River or one of its tributaries. As the trial evidence

conclusively demonstrated the Hobbs property was not

“contiguous” or “bordering” to the Ware River or one

of its tributaries. It is undisputed that the Hobbs prop-

erty was connected hydrologically and could be “neighbor-

ing” depending upon how such a subjective standard was

applied.* The Hobbs objected to the District Court’s in-

struction of “adjacent” without the further instruction

that the term “neighboring” as used in the Corps defini-

tion of “adjacent”, 33 C.F.R. § 328.3(¢), is to be given

the same meaning or a meaning consistent with the terms

“bordering” and “continguous”. The District Court’s in-

struction allowed the Jury to determine that “adjacent”

could mean any physical distance the jury determined to

be “neighboring” to a “water of the United States”. As

instructed, the jury was permitted to render a standard-

less verdict on the factual issue of whether any of the

Hobbs property was “adjacent” to a “water of the United

States” and therefore itself a “water of the United

States”. 33 C.F.R. § 328.3(a) (7). In affirming, the

“1 Neither the definition of “adjacent” in the Corps’ Regulations,

33 C.F.R. 328.3(c) (App. 145a.) or the EPA Regulations, 40 C.F.R.

§ 230.3(b) (App. 146a.) which are identical contain any provision

that wetlands are adjacent based on a hydrological connection.

*2 Contrary to the Court of Appeals’ decision such a geographi-

cally standardless jurisdictional reach has never been approved by

this Court. See, Riverside Bayview Homes, 474 U.S. at 135 (“Be-

22

Court of Appeals relied upon dicta of this Court in

Riverside Bayview Homes, supra that, “. .. the landward

limit of Federal jurisdiction under Section 404 must in-

clude any adjacent wetlands that form the border or are

in reasonable proximity to other waters of the United

States, as these wetlands are part of this aquatic system.

424 U.S. at 133-134, quoting 42 Fed. Reg. 37,128 (1977)

(emphasis added).” App. lla. The Hobbs seek this

Court’s clarification that it never intended to approve a

literal interpretation of such a subjective standard as

“reasonable proximity” when instructing any jury as to

the law they are required to apply.

The Hobbs could not determine in advance whether

their property was “neighboring” or in “reasonable prox-

imity” to any “water of the United States” so as to sub-

ject them to a CWA enforcement action for civil penalties

exceeding $66,975,000 for work they had done over a

period of nine years. The Hobbs did know that their

property was not “contiguous” or “bordering” on the

Ware River or its tributaries. It was precisely because

the EPA’s first Order claimed the Hobbs property was

adjacent to the Ware River, (App. 128a.) that after be-

ing advised by the Hobbs that their property was not ad-

jacent to the Ware River, the EPA issued the Amended

Order claiming that the Hobbs property was adjacent to

tributaries of the Ware River. App. 1381a.

Refusal to instruct the jury that it must construe the

list of definitional terms in a related fashion violated the

“familiar principa[]] that ‘words grouped in a list should

be given related meaning’. . .“‘ as recently instructed by

this Court in Massachusetts v. Morash, 490 U.S. 107,

114-115 (1989). Constitutional due process requires that

Congress legislate in terms which will inform a citizen of

what conduct is required. See, Connally v. General Con-

struction Co., 269 U.S. 385 (1925). Where Congress has

cause respondent’s property is part of a wetland that actually abuts

ona navigable waterway, respondent was required to have a permit

in this case.”’) (footnote omitted) (emphasis added).

23

delegated to a federal administrative agency authority to

define regulatory terms required by the statute, as it

has in the CWA, the constitutional due process suffi-

ciency of the notice provided by the statute necessarily

depends upon the clarity of the regulation. United States

V. Mersky, 361 U.S. 481, 441 (1960) (“. . . business-

men must not be left to guess the meaning of regula-

tions.”) ; U.S. v. National Dairy Products Corp., 372 U.S.

29, 32-33 (1963) (statute “[m]ust be sufficiently focused

to forewarn of both its reach and coverage”’.) (emphasis

added ) .**

Any argument that this is a “civil” case not subject

to the constitutional prohibition against vague legisla-

tion must fail.** Whether the Government seeks a “civil’’

penalty, 33 U.S.C. § 1319(d), or criminal “prosecution”’,

33 U.S.C. § 1319(c), under the CWA the due process con-

cerns are exactly the same, as the factual predicate for

jurisdiction is identical, i.e. whether “wetlands” are “ad-

%3““The constitutional due process doctrine of void for vagueness

is concerned not only with protection of citizens, but equally with

preventing arbitrary, discriminatory enforcement and providing

clear standards for those charged with enforcing the statute. The

doctrine incorporates notions of fair notice or warning. Moreover,

it requires legislatures to set reasonably clear guidelines for law

enforcement officials and triers of fact in order to prevent ‘arbitrary

and discriminatory enforcement.’ .. . Statutory language of such

a standardless sweep allows policemen, prosecutors, and juries to

pursue their personal predilections. Legislatures may not so abdi-

cate their responsibilities for setting the standards of the criminal

law.” Smith vy, Goguen, 415 U.S. 566, 572-575 (1974) (citations

omitted) (emphasis added).

** By imposing civil, criminal, and administrative penalties for

violation of its prohibitions the CWA is clearly penal legislation.

See e.g., Huntington y. Attrill, 146 U.S. 657, 666 (1892) (“In the

municipal law of England and America, the words ‘penal’ and

‘penalty’ have been used in various senses. Strictly and primarily,

they denote punishment, whether corporal or pecuniary, imposed or

enforced by the State, for a crime or offense against its laws.”’)

(emphasis added) (footnotes omitted).

24

jacent” (i.e, “neighboring’) to ‘waters of the United

States’’.®®

Only by the jury’s subjective application of the term

“neighboring” contained in the District Court’s instruc-

tion, for which the Hobbs were not forewarned, could the

Hobbs property fall within the “reach and coverage” of

Section 404 of the CWA and subject them to the potential

for civil penalties in this enforcement action.

IV. DUE PROCESS AND THE SEVENTH AMEND-

MENT REQUIRE THAT A CITIZEN BE PERMIT-

TED TO ASSERT A GOOD FAITH BELIEF THAT

A FEDERAL AGENCY’S ADMINISTRATIVE OR-

DER IS INVALID OR INAPPLICABLE, AS A DIS-

PUTED FACTUAL ISSUE FOR THE JURY TO

DECIDE, DURING THE LIABILITY PHASE OF AN

ENFORCEMENT ACTION SEEKING CIVIL PEN-

ALTIES FOR VIOLATION OF THAT ORDER

At the liability phase of the trial the District Court

ruled that the Hobbs would be “strictly liable” if they

failed to comply with the EPA’s Orders threatening civil

penalties of $25,00.00 per day for the separate and dis-

tinct offense of failure to comply, if the Hobbs were found

by the jury to have filled wetlands, because the District

Court held that the CWA is a “strict liability statute.”

JA 309, App. 7la. Notwithstanding that the District

Court agreed that the Hobbs failure to comply with the

EPA’s Orders was a fact issue to be submitted to the

jury, ‘App. 99a; 10la.), the District Court refused to

35 See, Federal Communications Comm’n V. American Broadcast-

iny Co., 347 U.S. 284, 296 (1953) (“It is true, as contended by the

Commission, that these are not criminal cases, but it is a criminal

statute that we must interpret. There cannot be one construction

for the Federal Communications Commission and another for the

Department of Justice. If we should give § 1304 the broad con-

struction urged by the Commission, the same construction would

likewise apply in criminal cases. We do not believe this construc-

tion can be sustained. Not only does it lack support in the decided

cases, judicial and administrative, but it would do violence to the

well-established principle that penal statutes are to be strictly con-

strued.”’) (emphasis added).

25

allow the Hobbs to present evidence and instruct the jury

as requested, that the Hobbs were entitled to assert a good

faith belief in the invalidity or inapplicability of EPA

Orders served upon them as a complete defense, irrespec-

tive of whether it was ultimately determined that the

Hobbs had violated the CWA. JA 236. App. 7la. The

Court of Appeals affirmed the District Court’s applica-

tion of “strict liability.” App. 8a.

The Hobbs were entitled to submit this defense, which

of necessity, involves issues of fact, to the jury during

the liability phase of the trial. This Court specifically

held in Tull v. U.S., 481 U.S. 412, 425 (1987) (that “. ..

the petitioner has a constitutional right to a jury trial to

determine his liability on the legal claims.” The Court of

Appeals ignored this Court’s holding in Tull, supra.*

Assuming, without conceding, that the Court of Ap-

peals is correct “. .. a penalty in some form is mandated.

Liability under the Clean Water Act is a form of strict

liability,” (App. 12a.) it does not necessarily follow that

failure to comply with the EPA Orders resulted in strict

liability. The violation of Section 404 of the CWA is

predicated upon a discharge without a permit, if a permit

is required. The EPA Orders were issued in March and

April, 1989, and ordered the Hobbs to “Refrain from all

further unauthorized discharge of dredged or fill mate-

rial into wetlands or waters at the Respondents’ proper-

ties, . . .” App. 124 and 132a (emphasis added) The

Jury found that Phil Hobbs did not discharge a pollutant

36 The Court of Appeals either misunderstood the Hobbs due proc-

ess argument or believed that due process is satisfied if received in

the imposition of a remedy after the jury’s determination of lia-

bility. “The Hobbs, therefore conclude that the lack of due process

protection prior to the imposition of liability for civil remedies

violates their due process rights. This contention is without merit.

The administrative orders do not in themselves impose penalties.

Instead pursuant to CWA § 309(d), the penalties were imposed by

the district court following a jury determination that the Hobbses

violated the CWA.” App. 12a. The Court of Appeals apparently

failed to appreciate that violation of the EPA Orders was a sepa-

rate and distinct claim by the Government for civil penalties. Jd.

26

after 1985 (App. 100a.) and that Paul Hobbs did not

discharge a pollutant in 1989. App. 98a. The District

Court agreed. App. 3la. However, the same Jury found

that both Phil Hobbs (App. 101a.) and Paul Hobbs (App.

99a.) failed to comply with the EPA Orders. The Hobbs

failure to comply with the EPA Orders was their failure

to plug the ditches and submit a plan to the EPA which

required restoration of much of their property to its

former condition. App. 124a and 182a. The Hobbs failure

to comply was not a failure to comply with the CWA, but

a failure to comply with restoration which the EPA re-

quired and the District Court ultimately refused to im-

plement. The District Court and Court of Appeals by

the application of “strict liability’ circumvented this

Court’s holding in Tul/, supra and prohibited the Hobbs

from presenting to the jury evidence of their good faith

belief that the EPA Orders were erroneous and the resto-

ration demanded by the EPA was not physically or finan-

cially practical and not necessary to address the environ-

mental harm alleged in the EPA Orders. App. 125 and

133a. As the District Court ultimately found, the quality

of the water in the ditches met the EPA and State Water

Control Board’s drinking water standards. App. 26a. Ac-

cordingly the restoration demanded by the EPA Orders

was clearly inappropriate.

The Court of Appeals’ approval of the District Court’s

linkage of liability upon Count I (violation of the CWA

for a discharge without a permit, if required) to liability

upon Count IT (failure to comply with the EPA Orders)

results in precisely the due process deprivation prohibited

by this Court. Until there has been a judicial determina-

tion of liability, which Tull, supra requires be determined

by a jury, the claim alleged in the EPA Orders that the

CWA has been violated, cannot be established. In the in-

stant case, the Court of Appeals has approved the District

Court’s ex post facto validation of EPA Orders issued in

March, 1989 and April, 1989 based upon a Jury Verdict

rendered on January 26, 1990, thereby exposing the Hobbs

to “. . . heavy penalties for violation of commands of an

27

unascertained quality ...” which might be imposed dur-

ing the penalty phase of the trial.*”

Under the Court’s decision in Reisman v. Caplin, 375

U.S. 440, 447 (1964) the Hobbs were entitled to inter-

pose as a defense to the Government’s claim for civil

penalties for violation of the EPA’s Orders a good faith

defense to noncompliance, which the Reisman Court held

to be a remedy at law. Otherwise the CWA provisions

for EPA’s issuance of Administrative Orders and suits

to enforce Orders are unconstitutional on their face. Be-

ginning with Ex Parte Young, 209 U.S. 123, 147-148

(1907) the Court has held that laws are unconstitutional

on their face, “. . . when the penalties for disobedience

are by fines so enormous . . . as to intimidate the citizen

from resorting to the Courts to test the validity of the

legislation .’. In Oklahoma Operating Co. v. Love,

252 U.S. 331, 336-337 (1920) the Court again held that

the recipient of an Administrative Order had a right to

assert the defense, irrespective of the outcome, when the

penalty for each days violation was $500. In the instant

case Count II of the Government’s Counterclaim sub-

jected the Hobbs to civil penalties of $25,000 per day for

each day they failed to comply with the EPA’s Orders.

App. 116a.

The Government cannot and did not dispute that there

were no administrative or pre-enforcement judicial pro-

37 Each Order given to the Hobbs is “. . . in its nature, somewhat

akin to an ex post facto law, since it punishes for an act done when

the legality of the command has not been authoratively determined.

Liability to a penalty for violation of such orders before their

validity has been determined, would put the party affected in a

position where he himself must at his own risk, pass upon the ques-

tion. He must either obey what may ultimately be held to be a void

order, or disobey what may ultimately be held to be a lawful order.

If the statute could constitutionally impose heavy penalties for vio-

lation of commands of such disputable and uncertain legality, the

result would inevitably be that the carrier [or the Hobbs] would

yield to void orders, rather than risk the enormous cumulative or

confiscatory punishment that might be imposed if they should there-

after be declared to be valid.” Wadley Southern Railway Co. v.

Georgia, 235 U.S. 651, 662-663 (1915).

28

cedures by which the Hobbs could contest the EPA’s

Orders, thereby distinguishing this case from Wadley

Railway Co., supra and Reisman, supra which did pro-

vide such a remedy. This trial provided the Hobbs their

only opportunity to challenge the EPA Orders. The Gov-

ernment admitted that the Hobbs were provided with no

prior notice, nor opportunity to be heard concerning the

validity of the EPA Orders. JA 92. The District Court’s

dismissal of the Hobbs Complaint, based in part on

the trial courts ruling which was affirmed, Southern Pines

v. U.S., 912 F.2d 713 (4th Cir. 1990), holding that Con-

gress impliedly intended to preclude District Court review

until an enforcement action was instituted, further dem-

onstrates that the Hobbs only opportunity to contest the

invalidity or inapplicability of the EPA’s Orders was in

defense of Count II of the Government’s Counterclaim,

during this trial.**

The Court of Appeals said in Southern Pines v. U.S.,

912 F.2d 713, 717 (4th Cir. 1990), “Southern Pines and

VICO will have an opportunity to make their constitu-

tional arguments at any enforcement proceeding before

they are subjected to any injunction or penalty”. The

Court of Appeals has now clarified that a litigant’s good

faith belief defense will not be heard during the trial’s

liability phase before the jury, but during the penalty

phase before the Court. The Court of Appeals has for

the second time, held in direct conflict with the Second

Circuit, United States v. J.B. Williams Co., 498 F.2d

414 (2nd Cir. 1974), a conflict resolved by this Court in

Tull v. United States, 481 U.S. 412 (1987), in favor of

the right to trial by jury, that a Defendant in a Section

404, CWA enforcement action is not entitled to have the

38 Until the Court of Appeals’ decision in Southern Pines, supra

it was presumed that the recipient of an Administrative Order

under Section 404 of the CWA had Declaratory Judgment access to

the District Courts to stay civil penalties, based upon this Court’s

decision in St. Regis Paper Co. v. United States, 368 U.S. 208, 225-

226 (1961).

29

issue of his liability for the separate and distinct offense

of failure to comply with an EPA Order, fairly submitted

to the jury.” Because the District Court refused to per-

mit the Hobbs to explain to the jury why they did not

comply with the EPA’s demand that they plug the ditches

and restore their property, when they had to concede that

they did not comply, the Jury’s Verdict on the issue of the

Hobbs liability for failure to comply with the EPA Or-

ders is nothing more than a directed verdict.

The Court of Appeals has placed the Hobbs and all fu-

ture recipients of EPA Orders, issued pursuant to See-

tion 404 of the CWA in a double or nothing position. If

they are found to have violated the CWA they are also

automatically subjected to the Separate and distinct im-

position of civil penalties of $25,000 per day for each day

they have violated the EPA’s Order, subject only to the

mercy of the District Court at the penalty phase of the

trial. If they are found, not to have violated the CWA,

they are not subject to penalties for violating the EPA’s

Order. As a result of Southern Pines, supra the recipient

may not challenge the EPA’s Order through a Declaratory

Judgment action to stay the penalties until the validity of

the Order is determined in Court. The recipient must

await the EPA’s enforcement action as penalties accrue

at the rate of $25,000 per day. Because the applicable

*9 In Tull v. United States, 481 U.S. 412 (1987) the Court unani-

mously held that where “. . . the Government sought penalties of

over 22 million dollars for violation of the Clean Water Act and

obtained a judgment in the sum of $325,000 . . . federal courts

have rightly assumed that the Seventh Amendment required a jury

trial.” 481 U.S. 420. Having established that Tull was entitled to

a jury trial to determine the factual dispute of liability for a viola-

tion of the CWA, there should be no different result for the Hobbs.

The Hobbs were entitled to have the jury, rather than the District

Court, resolve the factual issue of the Hobbs asserted good faith

belief that the EPA’s Orders were erroneous or invalid during the

liability phase of a trial, which exposed the Hobbs to potential civil

penalties of $12,150,000 each, for the separate offense of failure to

comply with the EPA’s Orders.

30

statute of limitations is five years, 28 U.S.C. § 2462, the

EPA may delay enforcement until the civil penalty ex-

posure reaches $45,625,000. The recipient’s only alterna-

‘ive is to submit to what may well be a void EPA Order,

. yesult the Court has held unconstitutional, Ex Parte

Young, supra.

The Court of Appeals has by its decision in this case

-ent a clear message to the regulated community that

when a citizen receives an Administrative Order pursuant

‘o the CWA or any similar federal statute, exposure to

enormous fines upon a finding of liability for a violation

of the statute, will automatically result in exposure to

enormous fines for failure to comply with the Administra-

tive Order, no matter how valid the recipient’s position

that the Administrative Order is erroneous or invalid.

This is precisely the coercive intimidation by the Admin-

istrative Branch of government of the citizen, the Court

has held unconstitutional since Ex Parte Young, supra.

The Hobbs were constitutionally entitled to defend

against the EPA’s Orders in this case without facing

the imposition of potentially ruinous penalties, simply for

availing themselves of their only means, administrative or

‘udicial, to contest the EPA’s Orders. The Hobbs were

entitled, pursuant to Tull, supra, to have their defense

presented to the jury, as a factual issue during the li-

ability phase of their trial.

CONCLUSION

For the reasons outlined above, certiorari should be

vyanted and the judgment below reversed.

Respectfully submitted,

RICHARD R. NAGEOTTE *

JAMES SCOTT KREIN

NAGEOTTE & KREIN

385 Garrisonville Road, Suite 201

Stafford, Virginia 22554

(703) 659-5050

* Counsel of Record