Amicus Curiae Brief — Laguna Gatuna, Inc. v. Browner

| PILED

2) *

IN THE DEC 11 190Q)

Supreme Court Of-Fhe=

United States

OCTOBER TERM, 1995

No. 95-465

LAGUNA GATUNA, INC.,

Petitioner,

V.

BROWNER, et al.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Tenth Circuit

BRIEF OF THE AMERICAN FOREST & PAPER

ASSOCIATION, INC. AND THE NATIONAL

ASSOCIATION OF HOME BUILDERS OF THE

UNITED STATES AS AMICI CURIAE IN

SUPPORT OF PETITIONER

Of Counsel: RUSSELL S. FRYE*

ERIN B. BRADLEY

2 H. Evans TIMOTHY J. DICINTIO

illiam R. my CHADBOURNE &

American Forest & Paper PARKE LLP

Association, Inc. 1101 Vermont Ave., N.W.

Washington, D.C. 20005

Phoebe Schlanger (202) 289-3000

National Association

of Home Builders Attorneys for Amici Curiae

of the United States the American Forest &

Paper Association, Inc.

Thomas C. Jackson and the National Association

Kelley Drye & Warren of Home Builders of the

United States

December 11, 1995 *Counsel of Record

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES cccccscscsccccescoscosccseseseossesess ii

INTEREST OF THE AMICI CURIAE ..........:::ccseeee

SUMMARY OF ARGUMENT ..........ccsccssscesseeeereeees

I. THIS COURT'S REVIEW IS

NEEDED TO PROTECT THE

DUE PROCESS RIGHTS OF

COUNTLESS PRIVATE

yi) 8B eb, fo +. er

Il. | AVAILABILITY OF JUDICIAL

REVIEW IN A SUBSEQUENT

ACTION TO RECOVER

PENALTIES DOES NOT

SATISFY DUE PROCESS ...........00000++-

II. _ORDERS SUCH AS THIS ONE

CONSTITUTE BINDING,

SUBJECTIVE ADJUDICATIONS

OF CLEAN WATER

ACT JURISDICTION ............cssceeeee

IV. THE STATUTORY ANALYSIS

ADOPTED BY THE TENTH

CIRCUIT RESTS ON AN

UNWARRANTED

INTERPRETATION OF

JUDICIAL REVIEW UNDER

ENVIRONMENTAL LAWS

AND IS INCONSISTENT WITH

A DECISION OF THE EIGHTH

ii

TABLE OF AUTHORITIES

CASES Page

Abbott Laboratories v. Gardner,

SOT Cele SE aiiedbonnaittacicesscneces 16

Avoyelles Sportman's League v. Alexander,

473 F. Supp. 525 (W.D. La. 1979)............ 8

Ex Parte Youn

209 US FR Se crtasssieantecincnceves be 4,12

Hofjman Homes, Inc. v. EPA,

999 F.2d 256 Se a cscvescesdeens 8

Leslie Salt Co. v. United States,

700 F. . 476 (N.D. Cal. 1988),

rev'd, 896 F.2d 354 (9th Cir. 1990),

cert. denied, 498 U.S. 1126 ae 7, 15

Mathews v. ee

GA Ri i ar es 4

Quivira Mining Co. v. EPA, 765 F.2d 126

(10th Cir. 1985), cert. denied, .

474 U.S. 1055 (1986) Soot LAL eA ie 7,8

Rueth v. EPA, 13 F.3d 227 (7th Cir. 1993)...... 5,17

Swanson v. United —,

600 F. Supp 802 (D. Idaho 1985)

aff'd, 780 F 2d 13 8 (9th Cir. 1986) eS 4

Solid State Circuits, Inc. v. EPA,

812 F.2d 383 (8th Cir. 1987)......0....ccceeee 18

Southern Ohio Coal Co. v. wot ac

Mining, 20 F.3d eg 6th ir. 1994),

cert. enied, __ es: =| 17

iii

Southern Pines Associates v. United States,

912 F.2d 713 (4th Cir. 1990) .........ccceeeeeeeeees 17

Stoeco Development, Ltd. v. Department of

the Army Corps thes Engineers,

701 F. upp. 107 ude 1988),

ret peal Mitel, & F.2d 860

ins slid ciecisatlaswbssapnovesvensseesseseoeses 4

United States v. Cumberland Farms of Conn.,

826 F.2d 1151 (1st Cir. 1987),

cert. denied, 484 U.S. 1061 1988) Sah Teesksii 10

United States v. Ellen, 961 F.2d 462

ban 9 ae" cert. denied,

i A ceulichdesthunegicovsoesversscosss 10, 14

United States v. Jones, No. 5-90-0216

(D. Md. filed May 30, 1990).........:.:eseeseeees 10

United States v. Marathon Development Corp.,

867 F.2d 96 (Ist Cir. 1989)..........cccceeeeeereeees 11

Unites States v. Mills, 817 F. at. 1546

ch i Fla. 1993), aff'd, 36 F.3d 1052

1th = "19 Tle denied,

SE PLO eee 7,9, 10, 13

United States v. aD 31 Env't +g . Cas. 1230

or Pa. Jan. 8, 1990), pf 97 F.2d

24 (3d Cir. 1990 crete, cert. denied,

498 i S. 812 (1990).

United States v. Riverside Bayview Homes, Inc.,

NS IE CRIED diinstcescrccctises conccssnoesscccceveees 7

United States v. Torres, 656 F. Supp. 251

Dt oe 1987), aff'd, 826 F.2d 151

i ccccecdecpwecunscesvescs 15

iV

Page

United States v. Weitzenhoff,

1 F.3d 1525 (9th Cir. 1993),

oe A Se). . ) SRR nneiee 6

STATUTES

Clean Air Act

§ eee. 1), 42 U.S.C. § 7413(c)(1)

_, SRERERR Ra eee nor ee ee ANE er aeE TT Teer 19

Clean Water Act |

309, 33 USC. § 1319 oes 10 |

309(a), 33 U.S. Seti te lL | 15 |

309(c)(1), 33 U.S. 131923 a cateiosiaaitiel 6 |

309(c)(2), 33 U.S.C. § 1319(c)(2).......... 6, 11 |

309(d), 33 U.S.C. 131 a) Bee Essceaiaussss 6, 12 |

309 far S.C. a OSE ER aS 6 |

402, T U.S.C. § 134

1986 and S 1995) ilableenisnkccchbudinckassetin 5

33 U.S. ce 1344 |

"(1886 and Supp i 5,7 |

§ 502(7), 33 USE . § 1362(7) (1986) caraparrcrcd 5

Comprehensive Environmental Response,

Compensation and Liability Act

: BOR AEE Fras We I si cnr iichcecincsineciaccseseses 18

113(h), 42 U.S.C. § 9613(h) (1995)............ 17

REGULATIONS

33 C.F.R. § 320.1 ay(6) SEs Sis ee isin Secsletlis 16

33 CER, BS Baste tee ee (hI os ceccieccdaceiciccstscvasenses 8

GO CF Fs 0 Se itaticicireeacdaes 7

Page

FEDERAL REGISTER

56 Fed. Reg. 40,446 may ee |) ee ee 15

57 Fed. Reg. 26,894 (June 16, 1992).........:ceeeeeeeees 8

58 Fed. Reg. 4,995 Genny BE nisi ccasessane 15

58 Fed. Reg. 7,610 (February 8, 1993)............... 13, 14

60 Fed. Reg. 58,605 (November 28, 1995)..........:000+ 5

LEGISLATIVE MATERIALS

H.R. Rep. No. 112, 104th Cong.,

Let Sess. 147 (1995)......ccccccccccscoscssevercseesoeeess 15

LAW REVIEWS

Justin Lamunyon, Wetlands and the

Swampbuster Provisions: The

Delineation Procedures, Options, and

Alternatives for the American Farmer,

73 Neb. L. Rev. 163 (1994).........:cccssreererers 14

MISCELLANEOUS

EPA Enforcement Accomplishments Report

FE F5e, FII DI inncrsscecsnsccctccrcsescccecevsessses 10

EPA's "Revised Interim Clean Water Act

Settlement Penalty Policy,"

March 1, 1995, reprinted in

FS Beh Ti: TA, FIG icisssenssisscsicrscsvesveesecvees 12

EPA, Report to Congress on Clean Water

Act Enforcement Mechanisms,

pursuant to P.L. 100-4, Section 314(b)

Clay 1D, TID). nscessvetisiecrinvecccticareney 10, 14, 15

Federal Sentencing Guidelines §2Q1.3, note 8

vi

F. Henry Habicht, The Federal ——_

on Environmental Criminal Enforcement:

How to Remain on the Civil Side,

17 Env. L. Rep. 10478 (December 1987)....... 11

Memorandum of Agreement Between the

Department of the Army and the

Environmental Protection Agen

Concerning the Determination of the

Geographic Jurisdiction of the

a 404 + he the

pplication of the Exemptions

Under Section 404(f) of the Clean

Water Act, Jan. 19, 1989, reprinted

Soe TD TV. Li TRA eRe cnccsessctcsccsevecseies 15, 16

Memorandum of Agreement Between the

Department of the Army and the

Environmental Protection Agency

Concerning Federal Enforcement

for the Section 404 Pro of the

Clean Water Act, Jan. 19, 1989,

reprinted in 19 Env. L. Rep. 35183 ...............4. 7

National Research Council, Wetlands:

Characteristics and

Bema ENS TTPO iisscsiscsceentcnciincintetes 14, 15, 20

U.S. Army Corps of Engineers, 1995 Wetlands

Delineation Field Evaluation Forms

CHG Te i iisialacectseitcctiiiibinalnbiiatcididpeianeineiin 8

Water Pollution, 22 Env't Rep. (BNA) 2169

to a: Ee Se ee 8

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1995

No. 95-465

LAGUNA GATUNA, INC.,

Petitioner,

v.

BROWNER, et ai.,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Tenth Circuit

BRIEF OF THE AMERICAN FOREST & PAPER

ASSOCIATION, INC. AND THE NATIONAL

ASSOCIATION OF HOME BUILDERS OF THE

UNITED STATES AS AMICI CURIAE IN SUPPORT OF

PETITIONER

INTEREST OF THE AMICI CURIAE

Amicus curiae the American Forest & Paper

Association, Inc. ("AF&PA") is a non-profit trade

association whose member companies grow, harvest,

and process wood and wood fiber, and manufacture

pulp, paper, and paperboard products and solid wood

products. Its member companies account for over 8%

of total U.S. manufacturing output. Amicus curiae the

National Association of Home Builders of the United -

States ("NAHB") represents 185,000 builders and

associate members (e.g., land planners, land developers,

industrial developers) organized in approximately 850

affiliated state and local associations in all fifty states,

the District of Columbia, and Puerto Rico.

2

Amicus AF&PA's member companies own or

lease extensive tracts of land used for large

manufacturing facilities or for the production of timber,

including approximately 71 million acres of forest land.

In addition, these companies rely on timber from the

over 250 million acres of private, nonindustrial forest

land. These lands contain many isolated areas where

topographical depressions occasionally collect rainfall

runoff that, under current U.S. Environmental Protection

Agency ("EPA") policy, may be considered "waters of

the United States." These companies also own and

operate hundreds of man-made surface impoundments,

used as water storage, treatment, or evaporation basins;

cooling water or fire protection water ponds; log storage

ponds; surface runoff sedimentation ponds; and the like.

Many of amicus NAHB's members engage in

grading and construction on undeveloped land and often

encounter questions about whether a particular area is

regulated as a "wetland." They also construct temporary

or permanent storm water runoff retention ponds,

ornamental ponds, drainage ditches, and the like which

may be considered "waters of the United States" under

certain circumstances.

Because EPA's definition of "waters of the

United States" is so broad and so vague that it could

apply to virtually any property, under the Tenth Circuit's

decision almost any of the amici's members (and

countless other landowners) could be subjected to ad

hoc EPA determinations of Clean Water Act ("CWA")

jurisdiction that will escape judicial review unless the

landowner risks harsh civil or criminal penalties.

SUMMARY OF ARGUMENT

The decision below would allow vast areas of

land and millions of property owners across the country

to be held captive to onerous regulatory restrictions

3

without the possibility of judicial review. If allowed to

stand, the decision would permit EPA and the U.S.

Army Corps of Engineers ("Corps") to deny landowners

the productive use of their property, without any hearing

whatsoever, unless the landowners elect to ignore the

agencies’ restrictions on land use and accept the risk of

severe civil and criminal punishment. Unfortunately for

property owners, by "rolling the dice" and disregarding

the orders of EPA or the Corps, landowners not only

significantly increase their chances of prosecution at the

hands of the agencies, but also concomitantly increase

the gravity of the penalties (including criminal

sanctions) which may be levied against them.

The severe curtailment of property owners’ rights

condoned in the decision below, without the possibility

of judicial review, clearly constitutes a deprivation of

due process. This constitutional transgression is

magnified by the ad hoc and unpredictable nature of

assertions of jurisdiction by EPA and the Corps.

Additionally, as a statutory matter, the preclusion of

judicial review giving rise to this deprivation is

unfounded in the Clean Water Act itself. Simply put,

the issuance of a cease-and-desist order by EPA or the

Corps pursuant to their wetlands authority constitutes a

firm adjudication of a landowners' rights, yet the

decision below would summarily deprive a landowner

of the constitutional and statutory right to judicial

review of this admittedly final adjudicatory

determination. This Court's intercession is necessary to

ensure that property owners are not stripped of their

rights in derogation of both the Clean Water Act and the

due process guarantee of the Constitution.

4

ARGUMENT

I. THIS COURT'S REVIEW IS NEEDED TO

PROTECT THE DUE PROCESS RIGHTS

OF COUNTLESS PRIVATE PROPERTY

OWNERS

Seminal precedent from this Court holds that,

pursuant to the Fifth Amendment of the Constitution,

individuals must receive notice and an opportunity to be

heard before the government may deprive them of

property. See, e.g., Mathews v. Eldridge, 424 U.S. 319,

333 (1976). In this case, the actual determination by

EPA of its jurisdiction under the Clean Water Act

amounted to an ad hoc adjudication of the Petitioner's

property rights. Nevertheless, under the Tenth Circuit's

decision, the only way Petitioner could seek review of

this determination would entail subjecting the Petitioner

to the possibility of severe criminal and civil

punishment.! This deprivation of constitutionally-

protected property rights -- in the absence of judicial

review -- simply does not meet the minimum

requirements of due process.2

1 Other courts have reached a different conclusion on

this point. See, e.g., Stoeco Development, Lid. v.

Department of the Army Corps of Engineers, 701 F. Supp.

1075 (D.N.J. 1988), appeal dismissed, 879 F.2d 860 (3d Cir.

1989) (considering a challenge brought by a developer to a

cease and desist order issued by the Corps pursuant to its

wetlands jurisdiction, before any penalties were sought or

imposed); Swanson v. United States, 600 F. Supp. 802 (D.

Idaho 1985), aff'd, 789 F.2d 1368 (9th Cir. 1986).

- See Ex Parte Young, 209 U.S. 123, 147 (1908)

(where "the penalties for disobedience are by fines so

enormous and imprisonment so severe as to intimidate the

company and its officers from resorting to the courts ...," "a

5

The cease and desist order issued in this case

included a determination by EPA that a sinkhole known

as Laguna Gatuna was a "water of the United States"

under the CWA. 33 U.S.C. § 1362(7) (1986). Such a

determination subjects a property owner to the full

panoply of CWA requirements. In this case, Petitioner

was required to cease discharging to its own evaporation

basin and, consequently, was driven out of business.

While Petitioner suffered particularly severe

consequences as a result of EPA's assertion of

jurisdiction, such assertions typically have significant

consequences. Indeed, the mere identification of an

area as a "water of the United States" severely

encumbers the property. For example, an owner of land

determined by EPA or the Corps to be a water of the

United States is not only stripped of the right to freely

landscape, cultivate, and develop the area, but may also

be prevented from securing bank loans or obtaining title

insurance for the property or otherwise managing the

property as a productive asset. See, e.g., Rueth v. EPA,

13 F.3d 227, 230 (7th Cir. 1993) (noting the substantial

curtailment of a landowner's property interest after

EPA's exercise of "water of the United States"

jurisdiction). A permit to use the land as desired may be

denied outnght, or it may be issued only after the

landowner agrees to costly "mitigation" measures.3

law which ... imposfes] such conditions upon the right to

appeal for judicial relief as works an abandonment of the

right rather than face the conditions upon which it is offered

or may be obtained, is also unconstitutional").

3 See, e.g., 60 Fed. Reg. 58605, 58607 (1995). The

government may argue that a person may avoid enforcement

and challenge EPA's jurisdictional determination after

applying for a permit to discharge pollutants under CWA

sections 402 or 404, 33 U.S.C. §§ 1342, 1344 (1986 and

6

Petitioner has excellent reasons for believing that

its treatment basin is not a "water of the United States":

the intrastate sinkhole is not hydrologically connected to

any other water body. More significantly, at Petitioner's

request in 1987, EPA's Office of Regional Counsel

declared in writing that the Laguna Gatuna sinkhole was

not a water of the United States. Nevertheless,

according to the Tenth Circuit decision, Petitioner's

only recourse with respect to EPA's reversal of its

original position is to defy EPA's cease and desist order

and subject itself fo the possibility of grave civil and

criminal penalties.4 The amici are concerned that their

members, too, could be forced to make a Hobson's

choice between defying a compliance order to obtain

review of an EPA determination, or acquiescing in the

order, which would require them to forfeit substantial

property interests without judicial review.

Supp. 1995). While such an appeal provides an opportunity

to challenge either the denial of the issuance of the permit or

the terms of the permit upon issuance, it is not clear that this

forum provides the applicant who does not believe he needs

a permit any real opportunity to challenge the underlying

subjective determination as to whether a "water of the United

States" exists in the first place.

4 _A violation of the Clean Water Act can result in a

civil penalty of $25,000 a day, a criminal penalty of up to

$25,000 per day plus one year in prison, or administrative

penalties of up to $125,000 per violation. 33 U.S.C.

§ 1319(c)(1), (d) & (g). Moreover, a "knowing" violation of

the Act is further punishable by up to $50,000 per day, plus

three years in prison. 33 U.S.C. § 1319(c)(2). A violation

may be "knowing" even though the discharger was unaware

its actions were regulated. United States v. Weitzenhoff,

1 F.3d 1523 (9th Cir. 1993), cert. denied, ___ U.S. ___

(1995).

7

This fundamentally unfair situation is especially

deserving of this Court's review in light of the broad

implications of the Tenth Circuit's decision. The

enforcement provisions at issue apply not only to

discharges of wastewater as in this case, but also to

discharges of dredged or fill material, which are subject

to the Corps permit program under CWA section 404,

33 U.S.C. § 1344 (1986 and Supp. 1995). Both types of

discharges are regulated only when they are to "waters

of the United States" (which this Court has held also

include wetlands, see United States ¥, Riverside

Bayview Homes, Inc., 474 U.S. 121 (1985)).>

EPA has defined "waters of the United States" so

broadly as to include any isolated wetland or "other

water" with no connection to navigable-in-fact waters.

See 40 C.F.R. § 122.2 (1994). In fact, EPA asserts and

courts have agreed that "waters of the United States"

may include isolated areas that are only seasonally or

ephemerally wet. See, e.g., Quivira Mining Co. v. EPA,

765 F.2d 126 (10th Cir. 1985), cert. denied, 474 U.S.

1055 (1986). Rainwater collecting on dry land for a few

days may be enough to create a regulated wetland. See

Leslie Salt Co. v. United States, 700 F. Supp. 476, 487

(N.D. Cal. 1988), rev'd, 896 F.2d 354 (9th Cir. 1990)

("Leslie Salt IT"), cert. denied, 498 U.S. 1126 (1991).

The term also can encompass man-made impoundments.

See, e.g., Leslie Salt II, 896 F.2d at 358-60. Moreover,

5 For additional explanation of the roles of EPA and

the Corps, see Memorandum of Agreement Between the

Dept. of the Army and the Environmental Protection Agency

concerning Federal Enforcement for the Section 404

Program of the Clean Water Act, Jan. 19, 1989, reprinted in

19 Env. L. Rep. 35183 ("Enforcement Memorandum of

t") and United States v. Mills, 817 F. Supp. 1546,

1551 (N.D. Fla. 1993), aff'd, 36 F.3d 1052 (11th Cir. 1994),

cert. denied, __ U.S. ___ (1995).

8

according to EPA, the only connection to interstate

commerce that is required for a "water" to be within its

regulatory jurisdiction is that the area is or could

potentially be used by migratory birds or endangered

species. See, e.g., Hoffman Homes, Inc. v. EPA, 999

F.2d 256, 261 Oth Cir. 1993).

Consequently, under this definition, almost any

"water" could be determined by EPA to be within its

regulatory jurisdiction. Millions of acres of land® and

millions of land owners are potentially subject to EPA's

jurisdiction under this regulatory scheme. Moreover,

EPA regulates virtually all activities in wetlands and

other "waters" that involve any kind of soil movement

(even movement of soil on a vehicle's treads). 7

6 Under present wetlands determination policy,

approximately 111 million acres of land in the United States

could be affected as regulated wetlands. Water Pollution, 22

Env't Rep. (BNA) 2169, 2194, January 24, 1992. Millions

of additional acres of normally dry washes, playas, and other

areas are also potentially regulated as "waters of the U.S.,"

as in Quivira Mining, supra. The Corps conducted a study

that identified over 8 million isolated depressions of less

than one-half acre that could be considered jurisdictional

wetlands under the "migratory bird test." U.S. Army Corps

of Engineers, 1995 Wetlands Delineation Field Evaluation

Forms (June 1995).

7 The term "discharge" may include dredging an area,

grading or road construction, mechanical clearing of land, or

even cutting a ditch for the purpose of draining an area. See

-33CF.R §§ 323.2-323.4 (1994) and, eg. Avoyelles

Sportman's League, Inc. v. Alexander, 473 F. Supp. 525

(W.D. La. 1979). See also 57 Fed. Reg. 26,894, 26,896

(1992).

9

Thus, countless land owners are subject, under

the decision below, to ad hoc, unreviewable EPA

determinations that property they own is, despite its

appearance and contrary to common sense, really a

"water of the United States," and that activities on those

lands are therefore subject to federal regulation.

Moreover, under the decision below, any of these land

owners could, like Laguna Gatuna, make substantial

investments in and improvements to their property in

reliance on the good faith belief -- or on EPA's own

representations -- that an area is not a "water of the

United States," only to have EPA subsequently change

its position and destroy these expectations, without any

reasonable opportunity for judicial review.

Il. AVAILABILITY OF JUDICIAL REVIEW IN

A SUBSEQUENT ACTION TO RECOVER

PENALTIES DOES NOT SATISFY DUE

PROCESS

The Tenth Circuit assumed that judicial review of

EPA's assertion of Clean Water Act jurisdiction could

be had after the EPA imposed an administrative penalty

or the United States sought a civil or criminal penalty.

The court then concluded this was sufficient to pass

constitutional muster. It is unfortunately not clear that a

defendant charged with violating an EPA enforcement

order will be able to challenge the jurisdictional finding

on which the order was based. See United States v.

Mills, 817 F. Supp. at 1548-49 (refusing to disturb

criminal convictions, where Eleventh Circuit had

previously affirmed convictions even though criminal

defendants were not allowed to put on evidence that the

area in question was not a "wetland" at the time of their

filling). Even if such a subsequent opportunity for

review were Clear, however, it would not satisfy the Due

Process Clause in light of the severe and aggravated

penalties that can and often do accompany violation of

an EPA or Corps enforcement order.

10

As noted above, CWA section 309 provides

severe civil, criminal, and administrative penalties for

aa to a "water of the United States" without a

ese penalties are not just theoretical: EPA's

eva program "places a _ high priority on

enforcement against unpermitted discharges," and there

are many examples of EPA civil and criminal

enforcement against companies and _ individuals

discharging into areas they did not believe to be "waters

of the United States." EPA Enforcement

Accomplishments Report FY 1993, April 1994 at 3-17,

3-17-3-19; see also, e.g., U.S. v. Ellen, 961 F.2d 462

(4th Cir. 1992), cert. denied, __ U.S. ___ (1992). For

example, this Court recently denied a petition for

certiorari in a case where, although the district court

noted "the disturbing implications of he expansive"

Corps definition of "waters of the United States,"

nevertheless a father and son were each sentenced to 21

months incarceration for placing fill material on a lot

that "does not have the appearance of what most lay

people think of as a 'wetland." Mills, 817 F. Supp. at

1548.

In addition to these serious penalties, EPA may

require companies to restore wetlands following a

determination by EPA that a piece of property is a

"water of the United States,” see, e.g., United States v.

Cumberland Farms of Conn., 826 F.2d 1151 (1st Cir.

1987), cert. denied, 484 U.S. 1061 (1988); and in fact

EPA "enforcement efforts . . generally seek removal of

the fill and restoration of the site."8 Thus, a person who

in good faith believes his activity is not regulated under

the CWA still faces possible imprisonment and costly

8 EPA Report to Congress on Clean Water Act

Enforcement Mechanisms, pursuant to P.L. 100-4, Section

314(b), May 11, 1990 at 22; see also United States v. Jones,

No. 5-90-0216 (D. Md. filed May 30, 1990).

1]

restoration requirements if he chooses to challenge

EPA's assertion of jurisdiction by violating the

compliance order.

In fact, a person who violates a restoration or

compliance order to obtain judicial review of an EPA

determination subjects himself both to increased

likelihood of enforcement action and increased

sanctions for "knowing" violations. As explained by F.

Henry Habicht II, former Assistant Attorney General for

the Land and Natural Resources Division of the

Department of Justice, "EPA seeks cooperation and

voluntary compliance; continued violations in the face

of repeated notices from EPA are therefore viewed

especially seriously. Violations after receipt of notice

also help [to] establish the knowledge element of

environmental crimes." Habicht, "The Federal

Perspective on Environmental Criminal Enforcement:

How to Remain on the Civil Side," 17 Env. L. Rep.

10478, 10481 (December 1987). This policy makes it

more likely that a company violating a compliance or

restoration order would be la cwa. for the more

severe "knowing" violation of the CWA, punishable by

imprisonment for up to three years under 33 U.S.C.

§ 1319(c\(2).9

9 See, e.g., United States v. Marathon Development

Corp., 867 F.2d 96 (ist Cir. 1989) (company and senior

vice-president convicted for continuing to clear land after

receipt of notice from the Army Corps of Engineers that

property was regulated wetland); United States v. Pozsgai,

31 Env't Rep. Cas. 1230 (E.D. Pa. Jan. 8, 1990), aff'd, 897

F.2d 524 (3d Cir. 1990) (Table), cert. denied, 498 U.S. 812

(1990) (individual sentenced to three years imprisonment

and fined $200,000 for knowingly filling a wetland without

a permit after warnings and Corps cease-and-desist order).

12

The violation of a compliance order will also

typically result in increased civil or criminal penalties.

See, e.g., Federal Sentencing Guidelines §2Q1.3, note 8

(upward departure in a pollution case may be warranted

where defendant "has failed to comply with an

administrative order"); EPA's "Revised Interim Clean

Water Act Settlement Penalty Policy," March 1, 1995,

reprinted in 25 Env. L. Rep. 35618 (failure to comply

with an EPA administrative order is a basis for

increasing the gravity component of a civil penalty by

up to 150 percent). In fact, it could be argued that

violation of such an order represents a separate violation

of the CWA, punishable by a penalty of $25,000 per day

in addition to the $25,000 per day penalty for the

underlying violation of discharging without a permit.

See CWA § 309(d), 33 U.S.C. § 1319(d).

While the penalties are substantial, there is no

"good faith" defense in a civil or criminal prosecution

under the CWA, even though the defendant may have

had a reasonable belief that his property fell outside

CWA jurisdiction. In fact, in most of the reported cases

involving criminal prosecution for filling a wetland, the

defendant claimed that the particular area in question

did not fall within the definition of "waters of the United

States." This is exactly the type of situation that this

Court found to deprive a person, as a practical matter, of

the right to judicial review in Ex Parte Young.

Ill. ORDERS SUCH AS THIS ONE

CONSTITUTE BINDING, SUBJECTIVE

ADJUDICATIONS OF CLEAN WATER

ACT JURISDICTION

Because the definition of "waters of the United

States" is fundamentally unclear, and because EPA

makes such determinations on a case-by-case basis,

companies such as those represented by amici have no

way of knowing whether their property and their

13

activities on that property are covered by the Clean

Water Act. 10

Thus, issuance of an administrative order

asserting CWA jurisdiction and ordering a property

owner to cease activity represents, for that property

owner, an adjudication of the often-uncertain question

of whether CWA jurisdiction extends to his activities.

In this way, an order like the one at issue here differs

from an order to cease exceeding discharge permit

effluent limitations, for example (or to cease

constructing a source of air pollutants without a

construction permit). In those cases, there is no

question that the federal law applies to the activity, and

no case-by-case determinations of jurisdiction are

involved.

EPA has even acknowledged that its

determinations regarding wetlands and "waters of the

United States" are undertaken on a case-by-case and

often inconsistent basis. For example, in the preamble

to its National Pollutant Discharge Elimination System

General Permit and Reporting Requirements for

Discharges from Concentrated Animal Feeding

Operations, EPA Region VI set out a list of factors to be

considered in determining whether certain "playas" are

"waters of the United States." 58 Fed. Reg. 7610, 7621

(1993). EPA also stated, however, that the factors "are

neither exclusive nor regulatory; they are simply

10 As noted above, supra pp. 7-8, almost any activity

can constitute a "discharge," and the term "water of the

United States" can mean, in EPA's view, almost any area that

is ever wet. At least one court has questioned the

constitutionality of imposing penalties where a person of

common intelligence could not ascertain that the Clean

Water Act "prohibition applies to clean fill dirt placed onto a

waterfront lot." Mills, 817 F. Supp. at 1554.

14

examples of the sort of factors EPA will probably apply

in making individual determinations." Jd. (emphasis

added). EPA adds that "[t]here are various types of

commerce which may be affected by the degradation of

many playa lakes, but EPA has to date asserted

jurisdiction over them only on a case-by-case basis,

generally in the context of enforcement actions." /d.

at 7620.

Similarly, courts have recognized the substantial

technical inconsistency associated with wetlands

determinations. In United States v. Ellen, for example,

the court addressed the delineation of "waters of the

United States" by EPA and the Corps, and recognized

that "[t]he absence of a uniform federal methodology

resulted in inconsistent wetlands determinations for

similar areas."!1

Both EPA and the Corps have acknowledged the

significant uncertainty accompanying decisions to assert

CWA jurisdiction over wetlands.!2 In its 1990 Report

11-961 F.2d 462, 465 (4th Cir. 1992) (notwithstanding

inconsistencies in wetland determinations, defendant

convicted of five felony counts for filling wetlands despite

Corps' cease and desist order).

12 Since 1987, EPA and the Corps have employed three

distinct wetlands delineation manuals for the identification

of regulated wetlands. See, e.g., Ellen, 961 F.2d at 464-65;

Lamunyon, Wetlands and the Swampbuster Provisions: The

Delineation Procedures, Options, and Alternatives for the

American Farmer, 73 Neb. L. Rev. 163, 172-73 (1994).

This dispute over the appropriate manual for use in wetlands

determinations involves more than mere procedural flip-

flopping. Which manual is used to identify and delineate

wetlands can make a great difference in the amount of land

considered to be wetlands. Lamunyon, supra, 73 Neb. L.

Rev. at 173-74; National Research Council, Wetlands:

ef fe Of ry peer hy WE POP ngnene fn on OI EN het a

15

to Congress, supra n. 8, EPA stated that: "The agencies’

differing interpretations of issues related to the

geographic jurisdiction of section 404 or whether a

particular activity is regulated or has been authorized,

have hampered section 404 enforcement." /d. at 20; see

also 58 Fed. Reg. 4995 (1993); 56 Fed. Reg. 40,446,

40,449 (1991). Congress also has recently observed that

"EPA has not consistently applied the regulatory

definition of navigable waters, creating uncertainty for

the regulated community." House Comm. on Transp.

and Infrastructure, H.R. Rep. No. 112, 104th Cong., ist

Sess. 147 (1995).

Because of the vague and confusing criteria for

determining whether CWA prohibitions apply to a given

activity, and the government's application of those

criteria on a case-by-case basis, a compliance order

issued under CWA section 309(a), 33 U.S.C. § 1319(a)

(1986), is more than simply an order to cease violating

the law. It includes, both implicitly and explicitly, an

agency determination that the particular facts of that

case bring the activity within CWA jurisdiction.!3

Recognizing this, on January 19, 1989, EPA and the

Corps entered into a "Memorandum of Agreement

Between the Department of the Army and the

Environmental Protection Agency Concerning the

Characteristics and Boundaries (1995) at 77-78 ("NRC

Report").

13 See, e.g., Leslie Salt II, 896 F.2d at 360 (even where

the Corps has created an exemption from its wetlands

jurisdiction for certain "waters," "those waters are subject to

such jurisdiction on a ‘case-by-case’ basis of review");

United States v. Torres, 656 F. Supp. 251, 254 (D.P.R.

1987), aff'd, 826 F.2d 151 (ist Cir. 1987) ("the Corps

usually works on a case-by-case basis in determining

whether a certain area is a wetland").

16

Determination of the Geographic Jurisdiction of the

Section 404 Program and the Application of the

Exemptions Under Section 404(f) of the Clean Water

Act" (reprinted in 19 Env. L. Rep. 35181). That

document not only acknowledges that an agency

determination of jurisdiction is a necessary part of any

enforcement action; it also recognizes that such a

jurisdictional decision is a final, binding agency action:

"Case-specific determinations made pursuant to the

terms of this [Memorandum of Agreement] will be

binding on the Government and represent the

Government's position in any subsequent Federal action

or litigation regarding the case." Jd. See also 33 C.F.R.

§ 320.1(a)(6) (1994) (authorizing Corps district

engineers to issue "formal determinations concerning

the applicability of the Clean Water Act" which "shall

constitute a Corps final agency action"). In light of the

binding nature and serious consequences of

jurisdictional determinations, the Tenth Circuit was

unwarranted in concluding, without any real analysis,

that the adjudications of Clean Water Act jurisdiction

provided for in these governmental procedures are

exempt from review despite the strong presumption of

reviewability of federal agency actions under Abbott

Lab. v. Gardner, 387 U.S. 136, 140-41 (1967).

IV. THE STATUTORY ANALYSIS ADOPTED

BY THE TENTH CIRCUIT RESTS ON AN

UNWARRANTED INTERPRETATION OF

JUDICIAL REVIEW UNDER

ENVIRONMENTAL LAWS AND IS

INCONSISTENT WITH A DECISION OF

THE EIGHTH CIRCUIT

Laguna Gatuna's petition for certiorari showed

how inappropriate it was for the Tenth Circuit to infer

congressional intent to shield CWA enforcement orders

from judicial review. Laguna Gatuna could have gone

further, however, to show that the cases relied on by the

Tenth Circuit are based on faulty analogies. The Tenth

17

Circuit relies on a decision from the Court of Appeals

for the Fourth Circuit, Southern Pines Assocs. v. United

States, 912 F.2d 713 (4th Cir. 1990).!4 The Southern

Pines court in turn based its conclusion in part on cases

examining "pre-enforcement" review in the context of

the Comprehensive Environmental Response,

Compensation and Liability Act ("CERCLA") and the

Clean Air Act ("CAA"). Jd. at 716. Reliance on this

approach, however, is inappropriate for several

reasons.

Most importantly, at least one court has

questioned whether EPA orders under CERCLA would

be constitutional if there were not a meaningful

14 The Tenth Circuit also relied upon a another decision

following Southern Pines Assocs., Rueth v. EPA.

Additionally, the court relied on Southern Ohio Coal Co. v.

Office of Surface Mining, 20 F.3d 1418 (6th Cir. 1994), cert.

denied, __ U.S. __ (1994). That case is distinguishable

from the instant case insofar as EPA had only threatened to

issue a compliance order and had not yet done so.

Moreover, that case involved discharges to the Ohio River,

clearly a “water of the United States," and consequently did

not involve a challenge to EPA's jurisdictional determination

of whether or not a “water of the United States" was

involved.

15 CERCLA was enacted in 1980, eight years after the

relevant provisions of the Clean Water Act. CERCLA is

therefore hardly an indication of inferred congressional

intent in the Clean Water Act. In addition, although

CERCLA initially did not affirmatively grant or deny

judicial review of pre-enforcement clean-up orders,

Congress subsequently amended CERCLA in 1986 to

include a provision which specifically precludes federal

review of pre-enforcement remedial actions. 42 U.S.C.

§ 9613(h) (1995).

s

CR

18

opportunity to challenge such orders without penalty.

Solid State Circuits v. EPA, 812 F.2d 383 (8th Cir.

1987). The Solid State Circuits court addressed the

constitutionality of treble damages for non-compliance

with EPA clean-up orders under CERCLA.

Specifically, the Eighth Circuit held that CERCLA's

clean-up order scheme may pass constitutional muster if

it "may be interpreted so that no penalty is imposed if

the challenging party has reasonable grounds to contest

the validity or applicability of an administrative order."

Id. at 390 (emphasis added). The court concluded that,

because CERCLA provides an exemption from treble

damages for parties bringing good-faith challenges to

remediation orders, the CERCLA scheme satisfied the

minimum elements of due process. Jd. at 391. In other

words, the court found the CERCLA treble damage

provision constitutional because it allows an individual

to violate a pre-enforcement order without the threat of

treble damages, in the good-faith belief that the order is

improper, in order to obtain judicial review of the

administrative action.

If this standard were applied to the Clean Water

Act, as interpreted by the Tenth Circuit, the Clean

Water Act would fail: a company violating a cease and

desist order to obtain judicial review, even in the good-

faith belief that its property is not subject to Clean

Water Act jurisdiction, is entirely subject to the full

range of grave criminal and civil penalties available

under the statute. The CERCLA analogy relied on by

the Tenth Circuit therefore not only is inapposite, but

actually cuts against the unreviewable deprivation of

property rights allowed in the decision below.

Finally, CERCLA Section 106 does not contain

the threat of a criminal penalty, in contrast to the Clean

Water Act. If the treble damages hinging on non-

compliance with the CERCLA pre-enforcement order in

Solid State Circuits were sufficient to trigger the need

for a good-faith exemption to preserve constitutionality,

19 :

then certainly the criminal sanctions available for non-

compliance with enforcement orders under the CWA

demand due process at the time of the orders’

issuance.

CONCLUSION

Because EPA's definition of "waters of the

United States" is so broad and so vague that it could

apply to virtually any property, the Tenth Circuit's

decision has the potential to affect millions of acres of

property and millions of landowners. This court's

intercession is needed to guarantee that private property

owners such as amici can obtain judicial review of

EPA's case-by-case determinations of their rights,

without having to risk severe criminal and civil liability.

The fact that disobeying an EPA order increases the

likely size of penalties and the likelihood of criminal

prosecution, coupled with the lack of a good-faith

defense for landowners, renders post-enforcement

review of these assertions of federal jurisdiction

unavailable as a practical matter.

Far from interfering with the government's

effective enforcement of the CWA, as claimed by the

16 — Both the Fourth Circuit and the Tenth Circuit also

inappropriately rely on provisions of the Clean Air Act in

holding that the Clean Water Act precludes judicial review

in this instance. A compliance order under the Clean Air

Act does not involve the same case-by-case factual

determination of jurisdiction as is the case under the Clean

Water Act for discharges to a "water of the United States."

No subjective determination of jurisdiction by EPA is

required to initiate enforcement action under the Clean Air

Act, which may be based on violation of specific regulatory

provisions or construction of defined sources of air

pollution. See, e.g., 42 U.S.C. § 7413(c)(1) (1995).

20

Tenth Circuit, providing for judicial review of

jurisdictional determinations would probably enhance

compliance. In those cases where there is a genuine

controversy about CWA jurisdiction, EPA or the Corps

would simply have to justify their final, "binding"

determinations earlier in the process, when a

compliance order is challenged; in most cases, though,

enforcement orders would still be complied with

summarily, as they are now. In fact, the availability of

judicial review would likely reduce the admitted

inconsistencies in jurisdictional determinations and

improve public confidence in the system, resulting in

higher levels of compliance. As the National Research

Council recently observed in discussing jurisdictional

determinations under the CWA, "Citizens lose faith in a

legal system that is administered inconsistently even as

it imposes penalties for noncompliance." NRC Report,

supra n. 12, at 185.

Respectfully submitted,

OfCounsel: —

RUSSELL S. FRYE*

Cynthia H. Evans ERIN B. BRADLEY

William R. Murray TIMOTHY J. DICINTIO

American Forest & CHADBOURNE &

Paper Association, Inc. ©PARKE LLP

1101 Vermont Ave., N.W.

Phoebe Schlanger Washington, D.C. 20005

National Association (202) 289-3000

of Home Builders

of the United States Attorneys for Amici Curiae

the American Forest &

Thomas C. Jackson Paper Association, Inc.

Kelley Drye & Warren and the National

Association of Home

Builders of the

United States

December 11, 1995 *Counsel of Record

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