# Petition for Writ of Certiorari — Krilich v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2000
- **Citation:** 531 U.S. 992

## Text

/ {Moree Luu, U.S.

(IV) FILED
O0U-239 AUG 1 0 2000'

nn OFFICE OF IHE CLERK

In The
Supreme Court of the United States

®

ROBERT R. KRILICH, et al.,

Petitioners,

UNITED STATES,
Respondent.

¢

On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Seventh Circuit

¢

PETITION FOR A WRIT OF CERTIORARI

¢

Carter G. PHILuIPs*
Mark D. Hopson
KrisTIN GRAHAM KOEHLER
Sipcey & AvusTIN

1722 Eye Street, N.W.
Washington, D.C. 20006
(202) 736-8000

Counsel for Petitioners
: *Counsel of Record
August 10, 2000

———— lS
COMMS LAN Sere hee
OR CALL COLLECT (402) 342-283

QUESTION PRESENTED

Whether the Environmental Protection Agency, con-
sistent with the Clean Water Act and Commerce Clause of
the United States Constitution, may assert jurisdiction
over isolated, intrastate waters solely because those

waters do or potentially could serve as a habitat of migra-
tory birds.

STATEMENT REQUIRED BY RULES 14.1 AND 29.6

Pursuant to Supreme Court Rule 14.1, the Petitioners
other than the one listed in the caption are Krilich Com-
panies, Inc. and Riverwoods Development Corp. The
other parties in the proceedings below were Lakemoor
Country Club, Inc., Austin State Bank Trust, not individu-
ally, but as Trustee under the Trust Agreement dated
December 18, 1968 and known as Trust No. 4580, Manu-
facturers’ Affiliated Trust Co., not individually, but as
Trustee under the Trust Agreements dated July 30, 1982
and known as Trust Nos. 866 and 867, f/k/a Affiliated
Bank/Franklin Park f/k/a First State Bank & Trust of
Franklin Park.

Pursuant to Supreme Court Rule 29.6, Krilich Com-
panies, Inc. and Riverwoods Development Corp. are cor-
porations closely held by Petitioner Robert R. Krilich.
These corporations do not have parent companies, or
subsidiaries, or affiliates that have issued common stock
or debt securities to the public.

TABLE OF CONTENTS

Page
KPUBSTION PRESENTED. ....0 0... ccc ccccccccuacess i
STATEMENT REQUIRED BY RULES 14.1 AND 29.6... ii
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OO RMON 555 vncasevasissaseseacancaecacs i
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RELEVANT CONSTITUTIONAL AND STATUTORY
I oie 8a Ss 6 65a A 4A Kank dA ek os 0 hn 1
enue SP BOOM CASE. oo... cca sesacn veces 2
A. Statutory And abitinory Background....... 2
ee 3
C. Decision Of The Court Of Appeals .......... 6
I i CR ae 6 C5 nA KSA SAK as 006d nd veces 8

iv

TABLE OF AUTHORITIES

Page
CASES
Cargill, Inc. v. United States, 516 U.S. 955 (1995) ..... 11
Leslie Salt Co. v. United States, 896 F.2d 354 (9th Cir.
WOOD k 6. knee dees dvidans te uathsdevecnsens 8, 12, 14, 15
Leslie Salt Co. v. United States, 55 F.3d 1388 (9th Cir.
| Ore rrr rer Tere Tere rr Tri rere re rr re 6
Solid Waste Agency v. United States Army Corps of
Eng’rs, 998 F. Supp. 946 (N.D. Ill. 1998), aff'd,
191 F.3d 845 (7th Cir. 1999), cert. granted, 120 S.
CE, DID Te ovo oun cache vores ess eo bed ereecisins 6
Solid Waste Agency v. United States Army Corps of
Eng’rs, 191 F.3d 845 (7th Cir. 1999), cert. granted,
eee Ce Peer ee passim
United States v. Gaydos, 108 F.3d 505 (3d Cir. 1997) ..... u
United States v. Krilich, 948 F. Supp. 719 (N.D. IIl.
1996), aff'd, 126 F.3d 1035 (7th Cir. 1997)........... 4
United States v. Krilich, 126 F.3d 1035 (7th Cir.
0 EERE SET OCTETS Opa 4
United States v. Lopez, 514 U.S. 549 (1995) ..... 8, 9, 10, 11
United States v. Morrison, __ U.S. __, 120 S. Ct.
SP Ss bss Asc nase Laub Ga yeekua eee neeekinees 11
United States v. Walker, 59 F.3d 1196 (11th Cir.
Pee ery eer ee eee re rey Pee ree gs eee 9
United States v. Wilson, 133 F.3d 251 (4th Cir. 1997) :
ERR E PLAGE CARLENE NUE CER AAEM ORAS OCR ENAS 6, 8, 12, 13
Utah v. Marsh, 740 F.2d 799 (10th Cir. 1984)...8, 12, 15.
Ex parte Yarbrough, 110 U.S. 651 (1884)............... 9 :

ne nee

Vv

TABLE OF AUTHORITIES - Continued

Page
CONSTITUTION AND STATUTES
Pa aS ls aos CSO kd 5 el eon ie i 1
se EE ov ea Cs ork k chek nan a 2
PTE kev oe ve caeaes cacceon ene es 2, 4
SONA Sis ainv erlavlavcapecideur aus 2, 4
DP TE hs aw ah y bu hvevaieeuaecel oak oes 2
REGULATIONS
ae Ss Te ND oo des vc v's Kahn Caen dceeeek a ee
Se Se ED 8 5 on Vn ous no cad eieseccescnite > ae
Os Pod. Rep. 41,206 (1906) . 2.2... 00. cc ccsccccccdace 2, 3

:
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PETITION FOR A WRIT OF CERTIORARI

Petitioners Robert R. Krilich, Krilich Companies, Inc.,
and Riverwoods Development Corp. respectfully petition
for a writ of certiorari to review the judgment of the
United States Court of Appeals for the Seventh Circuit in
this case.

OPINIONS BELOW

The opinion of the court of appeals is reported at 209
F.3d 968 (7th Cir. 2000) and is reprinted in the Appendix
to this Petition (“Pet. App.”) at 1a-10a. The memorandum
opinion and order of the district court is unreported and
is reprinted in Pet. App. at 11la-18a.

*

JURISDICTION

The court of appeals entered judgment on April 12,
2000. On July 5, 2000, Justice Stevens extended the time
for filing the petition for a writ of certiorari to and
including August 10, 2000. The jurisdiction of this Court
is invoked under 28 U.S.C. § 1254(1).

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RELEVANT CONSTITUTIONAL AND
STATUTORY PROVISIONS

The Commerce Clause of the United States Constitu-
tion provides, in relevant part, as follows: “The Congress
shall have Power . . . To regulate Commerce. . . among
the several States.” U.S. Const. art. I, § 8.

The relevant provisions of the Clean Water Act, 33
U.S.C. §§ 1311(a), 1344(a), and 1362(7), are reprinted in
Pet. App. at 19a. The pertinent regulations, 40 C.F.R.
§ 230.3(s)(3) and 33 C.F.R. § 328.3(a)(3), are reprinted in
Pet. App. at 20a-21a. The migratory bird rule, which is
found in the preamble to 51 Fed. Reg. 41,206 (1986), is
reprinted in Pet. App. at 21a.

¢

STATEMENT OF THE CASE

The issue in this case is whether the Environmental
Protection Agency (“EPA”) has the authority, under the
Clean Water Act and the Commerce Clause, to regulate
isolated, intrastate waters, whose only connection to
interstate commerce is the actual or potential presence of
migratory birds.

A. Statutory And Regulatory Background

Congress enacted the Clean Water Act in order “to
restore and maintain the chemical, physical, and biolog-
ical integrity of the Nation’s waters.” 33 U.S.C. § 1251(a).
To that end, the Clean Water Act specifically prohibits
“the discharge of dredged or fill material into the naviga-
ble waters” without a permit. 33 U.S.C. §§ 1311(a),
1344(a), Pet. App. at 19a. According to the terms of the
Clean Water Act, “navigable waters” are defined as
“waters of the United States, including the territorial
seas.” 33 U.S.C. § 1362(7), Pet. App. at 19a.

The EPA and the United States Army Corps of Engi-
neers, pursuant to their shared responsibility for adminis-
tering and enforcing the Clean Water Act, have
promulgated identical regulations which define “waters
of the United States” broadly to include not only inter-
state waters, but also intrastate waters - otherwise com-
pletely unrelated to interstate commerce - whose use
could affect interstate commerce. Specifically, the regula-
tions define “waters of the United States” as “[al]ll other
waters. such as intrastate lakes, rivers, streams (including
intermittent streams), mudflats, sandflats, wet-
lands, . . . the use, degradation or destruction of which could
affect interstate or foreign commerce.” 40 C.F.R. § 230.3(s)(3)
(EPA); 33 C.F.R. § 328.3(a)(3) (Army Corps), Pet. App. at
20a-21a (emphasis added).

In addition, the preamble to these regulations states
that the phrase “waters of the United States” includes all
other waters “[w]hich are or would be used as habitat by
birds protected by Migratory Bird Treaties” or “[w]hich
are or would be used as habitat by other migratory birds
which cross state lines.” 51 Fed. Reg. 41,206, 41,217
(1986), Pet. App. at 21a. This language in the preamble is
commonly referred to as the “migratory bird rule.”

B. Factual Background

Robert R. Krilich, Krilich Companies, Inc., and River-
woods Development Corp. (collectively “Petitioners”) are
involved in real estate development in the Chicago area.
The specific site at issue in this case is the Royce Renais-
sance property in Oakbrook Terrace, Illinois. On August
7, 1992, the EPA filed a complaint in the United States

District Court for the Northern District of Illinois, alleg-
ing that Petitioners had illegally discharged fill into iso-
lated, intrastate wetlands on the Royce Renaissance
property, in violation of section 301(a) of the Clean Water
Act, 33 U.S.C. § 1311(a), because they had not obtained a
permit issued by the Army Corps of Engineers, pursuant
to Section 404 of the Clean Water Act, 33 U.S.C. § 1344.
The EPA’s position was that these isolated, intrastate
waters were “waters of the United States” because of
their actual or potential use by migratory birds.

Petitioners and the EPA entered into a consent decree
regarding the Royce Renaissance property, which was
adopted by the district court on October 29, 1992
(“Decree”). Pursuant to the Decree, Petitioners were
required to remediate specified wetlands on the property,
to construct a 3.1 acre pond to compensate for wetlands
that were allowed to remain filled, and to pay a fine. The
Decree provided specific deadlines for the construction of
the pond and monetary penalties for failure to meet those
deadlines.

When Petitioners were unable to meet the deadlines
for construction of the pond on the Royce Renaissance
property, the United States moved to enforce the penalty
provisions in the Decree. The district court found that
Petitioners had violated the remediation plans contained
in the Decree and imposed a penalty of $1,307,500. United
States v. Krilich, 948 F. Supp. 719, 728 (N.D. Ill. 1996). The
United States Court of Appeals for the Seventh Circuit
affirmed the district court’s judgment. United States v.
Krilich, 126 F.3d 1035 (7th Cir. 1997). The appellate court,
however, remanded the case for entry of an amended

judgment in order to correct a miscalculation of the pen-
alty, which the United States had conceded on appeal.
Consequently, on December 15, 1997, the district court
entered a modified judgment in the amount of $1,257,500.

On November 2, 1998, Petitioners moved, pursuant
to Rule 60(b) of the Federal Rules of Civil Procedure, to
bar enforcement of the penalty. Pet. App. at 12a. Because
the wetlands in question were isolated, intrastate wet-
lands,’ Petitioners contended that those wetlands did not
have a sufficient connection to interstate commerce and
were beyond the EPA’s power to regulate. Id. at 14a. If the
wetlands were not within the EPA’s power to regulate,
Petitioners argued that the district court lacked subject
matter jurisdiction over the EPA’s complaint and that its
earlier orders and judgments were void. Id. at 12a.
Finally, Petitioners asserted that this challenge to the
court’s subject matter jurisdiction had not been waived
because defects in subject matter jurisdiction may be
raised at any time. Id. at 13a. Simply stated, Petitioners’
position was: if the EPA had no authority to commence
the action, then the district court had no jurisdiction to
entertain it.

1 Throughout this action, Petitioners have maintained, and
the lower courts have assumed, that the wetlands at issue were
isolated, intrastate wetlands. Pet. App. at 3a, 15a. The only
arguable basis for the EPA’s jurisdiction over the wetlands,
therefore, would have been if the use of the wetlands affected
interstate commerce. 40 C.F.R. § 230.3(s)(3); 33 C.F.R.
§ 328.3(a)(3), Pet. App. at 20a-21a. There could be no alternative
basis for jurisdiction because the wetlands at issue are neither
interstate wetlands nor wetlands adjacent to other navigable
waters of the United States. 40 C.RR. § 230.3(s); 33 C.FR.
§ 328.3(a).

The district court agreed with Petitioners that “the
question of whether there is a sufficient nexus to inter-
state commerce is clearly a jurisdictional issue that can be
raised at any time.” Pet. App. at 15a. The district court,
therefore, addressed directly the issue presented regard-
ing whether the EPA, consistent with Commerce Clause
and Clean Water Act limitations, may regulate isolated,
intrastate wetlands. The court relied upon the Ninth Cir-
cuit’s decision in Leslie Salt Co. v. United States, 55 F.3d
1388, 1395-96 (9th Cir. 1995), and the district court’s deci-
sion in Solid Waste Agency v. United States Army Corps of
Engineers, 998 F. Supp. 946, 954-55 (N.D. Ill. 1998), as
precedent supporting the position “that isolated wetlands
are a sufficient basis for CWA regulation.” Pet. App. at
16a. The district court acknowledged that the Fourth
Circuit had reached a contrary conclusion in United States
v. Wilson, 133 F.3d 251, 257 (4th Cir. 1997). However,
according to the district court, “[t]here was and continues
to be a colorable basis for exercising jurisdiction over the
Decree’s subject matter and it cannot be held that juris-
diction in this case was totally wanting.” Pet. App. at 16a.
The court, therefore, concluded that “[t]he December
1997 judgment is not a void judgment that is subject to
being vacated for lack of subject matter jurisdiction.” Id.

C. Decision Of The Court Of Appeals

The United States Court of Appeals for the Seventh
Circuit affirmed. First, the Seventh Circuit panel held that
the absence of a nexus between the subject property and
interstate commerce did not affect the district court’s
subject matter jurisdiction, but was rather an element of
the offense. Pet. App. at 9a. Second, the panel held that

“just as a guilty plea (in which the criminal defendant
admits — at least implicitly - the connection between his
conduct and interstate commerce) forecloses an appellate
attack on subject matter jurisdiction, [Petitioners] cannot
now assail the district court’s subject matter jurisdiction
because [they] entered into a consent decree” which con-
ceded jurisdiction over the controversy. Id. at 8a. Thus,
the court declined to reach the constitutional and statu-
tory issue presented to it and decided by the district
court:

Because the district court had subject matter
jurisdiction over the EPA’s complaint based on
the terms of the consent decree, we need not
determine whether, in light of the Supreme
Court’s decision in United States v. Lopez, regula-
tion of isolated intrastate wetlands is beyond
Congress’ power under the Commerce Clause.
Compare, United States. v. Wilson, 133 F.3d 251
(4th Cir. 1997), with Solid Waste Agency of North-
ern Cook County v. United States Army Corps of
Engineers, 191 F.3d 845, 848 (7th Cir. 1999), peti-
tion for cert. filed, 68 U.S.L.W. 3480 (U.S. Jan. 14,
2000) (No. 99-1178). See also Cargill, Inc. v. United
States, 516 U.S. 955, 958, 116 S. Ct. 407, 133
L.Ed.2d 325 (1995) (Thomas, J., dissenting from
denial of certiorari) (“In this case, the Corps’
basis for jurisdiction rests entirely on the actual
or potential presence of migratory birds on peti-
tioner’s land. In light of Lopez, I have serious
doubts about the propriety of the Corps’ asser-
tion of jurisdiction over petitioner’s land in this
e's

Pet. App. at 10a n.5.

ARGUMENT

This case presents an important and recurring issue
of federal law regarding whether the EPA may regulate
isolated, intrastate waters, consistent with the limits on
EPA’s regulatory authority inherent in the Clean Water
Act and the Commerce Clause. Although the panel below
refused to reach this issue, the answer certainly must be
“no,” particularly in light of this Court’s decision in
United States v. Lopez, 514 U.S. 549 (1995), which signifi-
cantly altered the Court’s Commerce Clause jurispru-
dence. To date, however, at least four courts of appeals
have issued decisions on this question of substantial legal
significance and great practical importance and have
reached conflicting conclusions. Compare United States v.
Wilson, 133 F.3d 251, 253-54 (4th Cir. 1997), with Solid
Waste Agency v. United States Army Corps of Eng’rs, 191
F.3d 845, 847 (7th Cir. 1999), Leslie Salt Co. v. United States,
896 F.2d 354, 355 (9th Cir. 1990), and Utah v. Marsh, 740
F.2d 799, 800 (10th Cir. 1984). As a result, a clear conflict
currently exists among the circuit courts. This Court has
granted the petition for a writ of certiorari in Solid Waste,
and the Court’s decision in that case likely will resolve
the conflict and provide guidance on the question pre-
sented in this case. Solid Waste Agency v. United States
Army Corps of Eng’rs, 191 F.3d 845 (7th Cir. 1999), cert.
granted, 120 S. Ct. 2003 (2000). Accordingly, the Peti-
tioners respectfully submit that their petition for a writ of
certiorari should be held pending the Court's decision in
Solid Waste and then disposed of as appropriate in light of
the Court’s decision.

me ii |

1. Contrary to the decision below, the question of
whether a federal enforcement action exceeds congres-
sional authority under the Commerce Clause bears directly
on a court’s subject matter jurisdiction and, therefore, is
never waived. For example, in Ex parte Yarbrough, 110 U.S.
651 (1884), this Court held that “[i]f the law which defines
the offense and prescribes its punishment is void, the court
was without jurisdiction and the prisoner must be dis-
charged.” Id. at 654. Similarly, in United States v. Walker, 59
F.3d 1196 (11th Cir. 1995), a defendant challenged on’
appeal the constitutionality of one of the statutes under
which he was convicted on the ground that the statute
exceeded congressional authority under the Commerce
Clause. Id. at 1198. The United States argued that the
defendant had waived his constitutional challenge to the
statute. Id. The Eleventh Circuit held that the conviction
could not “stand under a statute which Congress was
without power to enact. In essence, the statute was void ab
initio, and consequently, the district court below lacked
subject matter jurisdiction with respect to that charge.” Id.;
see also United States v. Gaydos, 108 F.3d 505, 508-09 (3d
Cir. 1997) (acknowledging that the question whether a
statute exceeds congressional authority under the Com- -
merce Clause affects federal courts’ subject matter jurisdic-
tion). Thus, the refusal of the panel below to reach the
constitutional issue decided by the district court does not
and should not preclude Petitioners from challenging the
EPA’s constitutional and statutory power to assert regula-
tory authority over the isolated, intrastate wetlands in
question.

2. The significant shift in this Court’s Commerce
Clause jurisprudence, which began in United States v.

10

Lopez, 514 U.S. 549 (1995), casts considerable doubt on the
EPA’s assertion of federal jurisdiction over isolated, intra-
state wetlands and calls into question the continued va-
lidity of the consent decree entered into in this case. In
Lopez, the Court held that the Gun-Free School Zones Act
of 1990, which made it a federal crime to knowingly
possess a firearm in a school zone, exceeded Congress’
authority under the Commerce Clause. Id. at 551. In
reaching this conclusion, the Court identified the “three
broad categories of activity that Congress may regulate
under its commerce power”: (1) “the use of the channels
of interstate commerce”; (2) “the instrumentalities of
interstate commerce, or persons or things in interstate
commerce”; and (3) “those activities that substantially
affect interstate commerce.” Id. at 558-59. With respect to
the third category, the Court admitted that its “case law
has not been clear whether an activity must ‘affect’ or
‘substantially affect’ interstate commerce in order to Be
within Congress’ power to regulate it under the Com-
merce Clause.” Id. at 559. The Court concluded that “the
proper test requires an analysis of whether the regulated
activity ‘substantially affects’ interstate commerce.” Id.
The Court determined that the firearm statute at issue did
not regulate an activity that substantially affects inter-
state commerce. Id.

The Court’s decision in Lopez marked a departure
from decades of this Court’s decisions that had afforded
tremendous deference to congressional action under the
Commerce Clause. The Lopez Court acknowledged that
such a retreat was necessary in order to maintain “a
distinction between what is truly national and what is
truly local.” Id. at 567-68. That distinction, which always

11

had existed in theory, has become one of increasing prac-
tical significance as this Court has demonstrated a will-
ingness to scrutinize congressional action under Lopez's
analytical framework. See, e.g., United States v. Morrison,
—__._ U.S. __, 120 S. Ct. 1740, 1745 (2000) (holding that
Congress lacked authority under the Commerce Clause to
enact the civil remedy in the Violence Against Women
Act, 42 U.S.C. § 13981).

In the instant case, the “all other waters” regulation
requires only that the waters “could affect interstate or
foreign commerce” and the “migratory bird rule”
requires only that the waters “are or would be used” by
migratory birds. Because these regulations do not require
any actual effect on interstate commerce - let alone a
substantial effect on interstate commerce — they are insuf-
ficient to pass constitutional muster under Lopez. See
Cargill, Inc. v. United States, 516 U.S. 955, 958 (1995)
(Thomas, J., dissenting from denial of certiorari) (“In this
case, the Corps’ basis for jurisdiction rests entirely on the
actual or potential presence of migratory birds on peti-
tioner’s land. In light of Lopez, I have serious doubts
about the propriety of the Corps’ assertion of jurisdic-
tion. . . . [T]he Corps’ expansive interpretation of its
regulatory powers under the Clean Water Act may test
the very ‘bounds of reason,’ and, in my mind, likely
stretches Congress’ Commerce powers beyond the break-
ing point.”) (citations omitted). Although Petitioners
could not reasonably have expected to succeed in chal-
lenging the EPA’s assertion of jurisdiction in 1992, when
the consent decree was entered, given this Court’s Com-
merce Clause jurisprudence at that time, this Court’s 1995
decision in Lopez effectively places the conduct at issue in

12

this case beyond the reach of federal law. Petitioners
should not now be forced to acquiesce in an essentially
lawless assertion of federal jurisdiction over their prop-

erty.

3. The proper scope of the EPA’s authority under
the Clean Water Act and the Commerce Clause is an issue
that has sharply divided the courts of appeal. Specifically,
the Fourth Circuit has held that the EPA’s assertion of
jurisdiction over isolated, intrastate waters is constitu-
tionally impermissible. United States v. Wilson, 133 F.3d
251, 257 (4th Cir. 1997). To the contrary, the Seventh,
Ninth, and Tenth Circuits have upheld the EPA’s author-
ity under the Commerce Clause to assert such jurisdic-
tion. Solid Waste Agency v. United States Army Corps of
Eng’rs, 191 F.3d 845, 847 (7th Cir. 1999); Leslie Salt Co. v.
United States, 896 F.2d 354, 355 (9th Cir. 1990); Utah v.
Marsh, 740 F.2d 799, 800 (10th Cir. 1984).

In United States v. Wilson, 133 F.3d 251 (4th Cir. 1997),
the Fourth Circuit held that the asserted federal authority
to regulate isolated, intrastate waters was not supported
by the terms of the Clean Water Act as limited by the
Commerce Clause. In Wilson, the conduct in question -
like the conduct at issue in this petition - involved the
discharge of fill materials into “wetlands,” without a
permit, in alleged violation of the Clean Water Act. On
appeal, the defendants challenged the asserted basis for
federal jurisdiction under 33 C.F.R. § 328.3(a)(3), which
defines “” ‘waters of the United States’ ” to include ” ‘[a]ll
other waters . . . the use, degradation or destruction of
which could affect interstate or foreign commerce.’ ”
Wilson, 133 F.3d at 255, 256-57.

a a TL TN a EE TT Cee B

13

The Fourth Circuit began its analysis by noting that
“[the] regulation purports to extend the coverage of the
Clean Water Act to a variety of waters that are intrastate,
nonnavigable, or both, solely on the basis that the use,
degradation, or destruction of such waters could affect
interstate commerce.” Id. at 257 (emphasis added). Thus,
“[t]he regulation requires neither that the regulated activ-
ity have a substantial effect on interstate commerce, nor
that the covered waters have any sort of nexus with
navigable, or even interstate, waters.” Id. According to
the Fourth Circuit, the regulation authorized the asser-
tion of jurisdiction in “a sweeping and constitutionally
troubling manner.” Id. Thus, the court held that the regu-
lation exceeded the authority granted under the Clean
Water Act, as limited by the Commerce Clause, and was
invalid. Id. at 253-54.

By contrast, in Solid Waste Agency v. United States
Army Corps of Engineers, 191 F.3d 845 (7th Cir. 1999), the
Seventh Circuit upheld the EPA’s authority to regulate
isolated, intrastate waters under the Clean Water Act as
consistent with the Commerce Clause. In that case, the
plaintiff sought to convert approximately 414 acres of
property into a landfill. Id. at 848. The. Army Corps of
Engineers asserted jurisdiction over the property under
the migratory bird rule on the ground that the intrastate
waters on the property were used or could be used as
habitat for migratory birds. Id. at 847. Plaintiff filed suit,
asserting that the Corps did not have jurisdiction over the
property. Id. The district court found that the Corps had
jurisdiction, and the Seventh Circuit affirmed. Id.

The Seventh Circuit rejected the argument that Con-
gress lacked the power to grant regulatory jurisdiction

14

over isolated, intrastate waters. Id. at 849. Rather, the
court held that “a federal statute based on the Commerce
Clause must serve one of three purposes: (1) regulation of
the channels of interstate commerce; (2) regulation or
protection of the instrumentalities of interstate com-
merce, or persons or things in interstate commerce; or (3)
regulation of activities that ‘substantially affect’ interstate
commerce.” Id. (citing United States v. Lopez, 514 U.S. 549,
558-59 (1995)). Applying the “third variety of regulatory
power,” the court ruled that “a single activity that itself
has no discernable effect on interstate commerce may still
be regulated if the aggregate effect of that class of activity
has a substantial impact on interstate commerce.” Id. at
849-50. Because the court found that “millions of people
annually spend more than a billion dollars on hunting,
trapping, and observing migratory birds,” it concluded
that “the destruction of migratory bird habitat and the
attendant decrease in the populations of these birds ‘sub-
stantially affects’ interstate commerce. The effect may not
be observable as each isolated pond used by the birds for
feeding, nesting, and breeding is filled, but the aggregate
effect is clear, and that is all the Commerce Clause
requires.” Id. at 850. Accordingly, “the decision to regu-
late isolated waters based on their actual use as habitat
by migratory birds is within Congress’ power under the
Commerce Clause.” Id. at 853.

Two other circuits have reached decisions that essen-
tially are in accord with the Seventh Circuit’s decision in
Solid Waste. In Leslie Salt Co. v. United States, 896 F.2d 354
(9th Cir. 1990), the Ninth Circuit held that “[t]he com-
merce clause power, and thus the Clean Water Act, is
broad enough to extend the Corps’ jurisdiction to local

15

waters which may provide habitat to migratory birds and
endangered species.” Id. at 360. Similarly, the Tenth Cir-
cuit in Utah v. Marsh, 740 F.2d 799 (10th Cir. 1984), upheld
the Army Corps of Engineers’ assertion of jurisdiction
over an intrastate lake on the ground that the discharge
of dredged or fill material into the lake “could well have
a substantial economic impact on interstate commerce.”
Id. at 803-04.

In sum, the validity of the EPA’s asserted authority
over isolated, intrastate waters under the Clean Water
Act and the Commerce Clause - and, in particular, its
authority under the “migratory bird rule” — is an impor-
tant and recurring question of federal law on which there
is a direct conflict among the courts of appeal.

4. This Court has granted the petition for a writ of
certiorari to review the Seventh Circuit’s decision and
judgment in Solid Waste. Solid Waste Agency v. United
States Army Corps of Eng’rs, 191 F.3d 845 (7th Cir. 1999),
cert. granted, 120 S. Ct. 2003 (2000). Resolution of that case
very likely will resolve the existing split among the
courts of appeals on the question presented in this peti-
tion. In fact, the question presented in Solid Waste is
virtually identical to the question presented here: “May
U.S. Army Corps of Engineers, consistent with the Clean
Water Act and commerce clause of the U.S. Constitution,
assert jurisdiction over isolated intrastate waters solely
because those waters do or potentially could serve as
habitat of migratory birds?” 68 U.S.L.W. 3505 (U.S. Feb. 8,
2000) (No. 99-1178).

This Court’s decision in Solid Waste likely will affect
the proper disposition of this case. In particular, this

16

Court’s decision in Solid Waste is likely to resolve the
recurring question of the validity of the migratory bird
rule. More generally, the decision in Solid Waste likely will
clarify the scope of regulatory authority under the Clean
Water Act and the Commerce Clause. Accordingly, this
petition for a writ of certiorari should be held pending
the Court’s decision in Solid Waste and then disposed of
as appropriate in light of the Court’s decision in that case.

€

CONCLUSION

For the foregoing reasons, Petitioners respectfully
submit that the petition for a writ of certiorari should be
held pending this Court’s decision in Solid Waste Agency
v. United States Army Corps of Engineers, No. 99-1178, and
then disposed of as appropriate in light of the Court's
resolution of that case.

Respectfully submitted,

CarTER G. PHILLIPs*
Mark D. Hopson
KrisTIN GRAHAM KOEHLER
SipLtey & AUSTIN

1722 Eye Street, N.W.
Washington, D.C. 20006
(202) 736-8000

Counsel for Petitioner

* Counsel of Record

August 10, 2000

la

APPENDIX A

UNITED STATES of America,
Plaintiff-Appellee,

Vv.

Robert R. KRILICH, Krilich Companies,
Incorporated, Riverwoods Development
Corporation, et al.,
Defendants-Appellants.

Nos. 99-2271, 99-2397.

United States Court of Appeals,
Seventh Circuit.

Argued Nov. 9, 1999
Decided April 12, 2000

Before COFFEY, MANION, and EVANS, Circuit
Judges.

MANION, Circuit Judge.

The EPA civilly charged Robert Krilich with illegally
filling a wetland on property he was developing in subur-
ban Chicago, Illinois. Krilich entered into a consent
decree with the EPA to settle the dispute, the terms of
which required him, among other things, to create a
substitute wetland by a specific date, or pay a substantial
penalty for any delay. He failed to complete the new
wetland by the stated time, so the EPA moved to enforce
the terms of the consent decree. The district court granted
that motion and fined Krilich in excess of $1.2 million.
Krilich appealed from that judgment and we affirmed
(although the case was remanded to correct an error in
calculating the penalty). Krilich then filed a Rule 60(b)(4)

2a

motion to vacate the judgment as void. The district court
denied that motion and he again appeals. We affirm.

I.
Factual and Legal Background

To understand this appeal, we must return to 1992 -
both factually and legally. In 1992, the EPA charged
Robert Krilich,1 who was developing the Royce Renais-
sance Property in Oakbrook Terrace, Illinois, with violat-
ing section 301(a) of the Clean Water Act by discharging
fill into “wetlands” without first obtaining a section 404
permit. Section 301(a) of the Clean Water Act prohibits
“the discharge of any pollutant,” except as otherwise
authorized by the Clean Water Act. 33 U.S.C. § 1311.
Section 404 of the Clean Water Act authorizes the Secre-
tary to issue a permit approving “the discharge of fill
material into the navigable waters.”2 33 U.S.C. § 1344.
The Clean Water Act defines “navigable waters” as
“waters of the United States,” 33 U.S.C. § 1362(7), but
does not further describe what is included as part of
“waters of the United States.” The Act may not cover all
of the “water in the United States,” but it comes close:
The EPA and the Army Corps of Engineers have promul-
gated regulations defining “waters of the United States”
to include “intrastate lakes, rivers, streams (including

1 The EPA’s charge was against Robert R. Krilich
individually, and numerous corporations which he controlled.
For simplicity, we refer to them merely as “Krilich.”

2 Section 404(a) authorizes the Secretary to issue permits
allowing fill materials to be discharged into “navigable waters”
but it does not mention “wetlands.” See 33 U.S.C. § 1344(a).

a caeaaaiaceaenara aaa iana a eae

3a

intermittent streams), mudflats, sandflats, wetlands,
sloughs, prairie potholes, wet meadows, playa lakes, or
natural ponds, the use, degradation or destruction of
which could affect interstate or foreign commerce.” 33
C.F.R. § 328.3(a)(2); 40 C.RR. § 230.3(s)(3).%

’ Both the EPA and the Corps have long maintained
that this regulatory definition of “waters of the United
States” includes “all waters, including those otherwise
unrelated to interstate commerce, ‘which are or would be
used as habitat by birds protected by Migratory Bird
Treaties’ or ‘which are or would be used as habitat by
other migratory birds which cross state lines.’” Solid
Waste Agency of Northern Cook County v. United States

_ Army Corps of Engineers, 191 F.3d 845, 848 (7th Cir. 1999)
(quoting 51 Fed. Reg. 41,206, 42,217 (1986)). Based on its
view that isolated intrastate waters were “waters of the
United States” because of the actual or potential use by
migratory birds, the EPA charged Krilich with violating
section 301. However, at the time that the EPA first
charged Krilich with violating section 301 in August 1992,
the law of this circuit was more narrow. This court had
just held that Congress did not have the power to regu-
late isolated intrastate waterways based simply on the
supposition that migratory birds, while migrating to sea-

sonal nesting areas, could potentially use the waters.
Hoffman Homes, Inc. v. Administrator, United States EPA,
961 F.2d 1310, 1311 (7th Cir. 1992) (Hoffman I) (rejecting

3 The Army Corps of Engineers and the EPA share
responsibility for administering and enforcing the Clean Water
Act. 33 U.S.C. §§ 1319(a)(3), 1344.

4a

the EPA’s claim of jurisdiction “over the intrastate wet-
land solely on the ground that migratory birds could,
potentially, use the wetland as a place to feed, or nest or
as a stopover on the way to the Gulf States for the Winter
months”), vacated 975 F.2d 1554 (7th Cir.1992). But this
holding had a short life; it was vacated on September 4,
1992, before the birds had reason to migrate south. Hoff-
man Homes, 975 F.2d 1554.

After Hoffman I was vacated, Krilich entered into a
consent decree with the EPA, this in spite of the fact that
the EPA’s charge asserted that he had violated section 301
by filling isolated intrastate wetlands.4 In the consent
decree, Krilich agreed to pay a fine of $185,000, remediate
some of the wetlands, and construct a 3.1-acre replace-
ment wetland on the Royce Renaissance property to com-
pensate for the wetlands that had already been filled. The
consent decree included specific deadlines for the con-
struction, and provided for monetary penalties for any
delay.

As noted, the parties agreed to the consent decree
after Hoffman I had been vacated for rehearing. On Octo-
ber 29, 1992, the district court entered final judgment
pursuant to the terms of that consent decree, and that
final judgment was entered before this court issued its
decision on rehearing in Hoffman II.

4 On appeal, the EPA asserts that Krilich also filled
wetlands which were not isolated. The district court assumed
for purposes of Krilich’s Rule 60(b)(4) motion that all of the
wetlands were isolated intrastate wetlands, and because it does
not alter the outcome of this appeal, we also make this
assumption.

5a

After rehearing, on July 19, 1993, this court held in
Hoffman II that the EPA lacked jurisdiction over the wet-
lands at issue in that case because the government had
failed to present evidence that migratory birds actually
used the wetlands as a habitat. Hoffman Homes, Inc. v.
Administrator, United States EPA, 999 F.2d 256 (7th
Cir.1993) (Hoffman II). Because the government did not
prove actual use by the birds, Hoffman II did not reach the
issue of whether that would be a sufficient connection to
interstate commerce to allow Congress to regulate iso-
lated intrastate wetlands.

Throughout and following the proceedings in Hoff-
man I and II, Krilich went about his business constructing
the Royce Renaissance Property. He failed, however, to
complete the 3.1-acre mitigation pond by the date speci-
fied in the consent decree, so the United States moved to
enforce the penalties contained in the decree. The district
court imposed civil penalties against Krilich of
$1,307,500. Krilich appealed from that judgment, arguing
that the deadlines had been modified, that the doctrines
of impossibility and frustration excused his non-perfor-
mance, or that the government was equitably estopped
from enforcing the penalty provisions. This court rejected
those arguments and affirmed the assessment of penal-
ties, but remanded the case to the district court to correct
an error made in calculating the penalty, which the gov-
ernment had pointed out on appeal. United States v.
Krilich, 126 F.3d 1035 (7th Cir.1997).

On remand, Krilich decided to take a different tack —
he moved pursuant to Rule 60(b)(4) to vacate the district
court’s original judgment entered pursuant to the terms
of the consent decree. Krilich argued that the district

6a

court lacked subject matter jurisdiction over the EPA’s
complaint, and therefore that its judgment was void. The
district court rejected Krilich’s argument, and denied his
motion to vacate. Krilich once again appeals.

II.
Analysis

Rule 60(b)(4) provides that “[o]Jn motion and upon
such terms as are just, the court may relieve a party or a
party’s legal representative from a final judgment, order,
or proceeding . . . [if] the judgment is void. .. . ” Fed.
R.Civ.P. 60(b)(4). Krilich contends that the district court’s
judgment, which adopted the consent decree and the
sanctions contained therein, was void because the court
lacked subject matter jurisdiction over the EPA’s case
against him. Specifically, Krilich asserts that the land he
allegedly filled was an “isolated intrastate wetland”
which was beyond the federal government’s commerce
power to regulate. Because Congress lacked authority to
regulate his property, Krilich contends that the district
court lacked subject matter jurisdiction over the EPA’s
complaint. And even though he agreed to the terms of the
consent decree, which included a provision that the wet-
lands filled were “waters of the United States,” Krilich
now argues that this does not change the result because
you can never consent to subject matter jurisdiction, and
lack of jurisdiction can be raised at any time.

In making this argument, however, Krilich confuses
the meaning of “jurisdiction” - “a word of many, too
many meanings” according to the Supreme Court. Steel
Co. v. Citizens for a Better Environment, 523 U.S. 83, 90, 118

7a

S.Ct. 1003, 140 L.Ed.2d 210 (1998). This court recently
examined the problem. “Lawyers and judges sometimes
refer to the interstate commerce element that appears in
many federal crimes as the ‘jurisdictional element,’ but
this is a colloquialism - or perhaps a demonstration that
the word ‘jurisdiction’ has so many different uses that
confusion ensues.” Hugi v. United States, 164 F.3d 378, 381
(7th Cir.1999) (citing Kanar v. United States, 118 F.3d 527,
529-30 (7th Cir.1997)).

“[T]he nexus with interstate commerce, which courts
frequently call the ‘jurisdictional element,’ is simply one
of the essential elements of [the offense]. Although courts
frequently call it the ‘jurisdictional element’ of the stat-
ute, it is ‘jurisdictional’ only in the shorthand sense that
without that nexus, there can be no federal crime. . . . It is
not jurisdictional in the sense that it affects a court's
subject matter jurisdiction, ...” Hugi, 164 F.3d at 381 (7th
Cir.1999). Thus, while “[a] link to interstate commerce
may be essential to Congress’s substantive authority, see
United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131
L.Ed.2d 626 (1995), . . . the existence of regulatory power
differs from the subject-matter jurisdiction of the courts.”
Hugi, 164 F.3d at 380-81. The “subject matter jurisdiction
in every federal criminal prosecution comes from 18
U.S.C. § 3231, and there can be no doubt that Article III
permits Congress to assign federal criminal prosecutions
to federal courts. That’s the beginning and the end of the
‘jurisdictional’ inquiry.” Hugi, 164 F.3d at 381 (quoting
United States v. Martin, 147 F.3d 529 (7th Cir.1998)). And
“once a defendant pleads guilty in a court which has
jurisdiction of the subject matter and of the defendant, as
did the court in the instant case, the court’s judgment

8a

cannot be assailed on grounds that the government has
not met its burden of proving ‘so-called jurisdictional
facts.’ ” Hugi, 164 F.3d at 381 (internal quotations omit-
ted). “Even if the government fails to establish the con-
nection to interstate commerce, the district court is not
deprived of jurisdiction to hear the case.” Hugi 164 F.3d at
381 (quoting Martin, 147 F.3d at 532).

While Krilich attempts to distinguish Hugi and Mar-
tin as criminal in nature and not civil, he fails to explain
why that makes any difference. It does not. In this case,
the interstate connection, i.e. that the waters involved
were “waters of the United States,” is merely an element
of the United States’ Clean Water Act case under section
301; subject matter jurisdiction over this question involv-
ing federal law comes from 28 U.S.C. § 1331. On appeal,
Krilich argues at great length that his wetlands cannot
constitutionally satisfy the “waters of the United States”
element. But “[j]urisdiction under the federal question
statute is not defeated by the possibility that the aver-
ments, upon close examination, might be determined not
to state a cause of action.” Turner/Ozanne v. Hyman/Power,
111 F.3d 1312, 1316-17 (7th Cir. 1997). Moreover, just as a
guilty plea (in which the criminal defendant admits — at
least implicitly — the connection between his conduct and
interstate commerce) forecloses an appellate attack on
subject matter jurisdiction, Krilich cannot now assail the
district court’s subject matter jurisdiction because he
entered into a consent decree in which he agreed that the
waters involved were “waters of the United States.” Cf.
Hugi, 164 F.3d at 380-81; Martin, 147 F.3d at 533.

In response, Krilich also cites United States v. U.S.
Fidelity & Guaranty, Co., 309 U.S. 506, 60 S.Ct. 653, 84

9a

L.Ed. 894 (1940), and Jordon v. Gilligan, 500 F.2d 701 (6th
Cir.1974), to support his position that the consent decree
was void. Those cases held that the judgments entered by
_ the trial courts were void because the defendants were
immune from suit. He also cites Kalb v. Feuerstein, 308
U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940), which held that
a state court lacked jurisdiction to enter a judgment
against the defendant because a federal statute divested
the court of jurisdiction. These cases, however, involve a
different meaning of “jurisdiction.” As we explained in
Hugi, “some jurisdictional shortcomings are constitu-
tional in nature, for Article III and the eleventh amend-
ment set limits to the duties Congress may assign to the
courts; other jurisdictional deficits are just the result of
statutory limitations; ...” Hugi, 164 F.3d at 380. Both U.S.
Fidelity and Jordon involved what we referred to in Hugi
as the jurisdictional “shortcoming” of immunity. We dis-
tinguished that defect from the interstate commerce ele-
ment which is not jurisdictional in the same sense, but
rather is an element of the offense. The absence of such
an element is separate from the issue of subject matter
jurisdiction. Hugi, 164 F.3d at 380. And Kalb involved the
other jurisdictional shortcoming noted in Hugi - a statu-
tory divestment of power, also distinguished from the
jurisdictional element of the offense. Hugi, 164 F.3d at
380. As explained in Hugi, both of these jurisdictional
shortcomings “affect[ ] a court’s subject matter jurisdic-
tion, i.e., a court’s constitutional or statutory power to
adjudicate a case,” id. at 381, whereas the interstate com-
merce element does not deprive a court of subject matter
jurisdiction. Therefore, Krilich’s reliance on these cases is
misplaced.

10a

In sum, the district court had subject matter jurisdic-
tion over the EPA’s case against Krilich because the suit
civilly charged a violation of a federal statute which is
within the federal courts’ federal question jurisdiction.
And Krilich’s attempt to now assail the court’s subject
matter jurisdiction fails because he entered into a consent
decree stipulating that the waters involved were “waters
of the United States,” and that is merely an element of the
offense and not the basis for federal subject matter juris-
diction.> Accordingly, we Arrirm the district court’s
denial of Krilich’s 60(b)(4) motion to bar the enforcement
of the penalty.

5 Because the district court had subject matter jurisdiction
over the EPA’s complaint based on the terms of the consent
decree, we need not determine whether, in light of the Supreme
Court’s decision in United States v. Lopez, regulation of isolated
intrastate wetlands is beyond Congress’ power under the
Commerce Clause. Compare, United States v. Wilson, 133 F.3d 251
(4th Cir.1997), with Solid Waste Agency of Northern Cook County v.
United States Army Corps of Engineers, 191 F.3d 845, 848 (7th
Cir.1999), petition for cert. filed, 68 U.S.L.W. 3480 (U.S. Jan. 14,
2000) (No. 99-1178). See also Cargill, Inc. v. United States, 516 U.S.
955, 958, 116 S.Ct. 407, 133 L.Ed.2d 325 (1995) (Thomas, J.,
dissenting from denial of certiorari) (“In this case, the Corps’
basis for jurisdiction rests entirely on the actual or potential
presence of migratory birds on petitioner’s land. In light of
Lopez, I have serious doubts about the propriety of the Corps’
assertion of jurisdiction over petitioner’s land in this case. ...”).

lla

APPENDIX B

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF
AMERICA,

Plaintiff, No. 92 C 5354
v.

ROBERT R. KRILICH,
KRILICH COMPANIES,
INC., RIVERWOODS
DEVELOPMENT CORP.,
LAKEMOOR CLUB, INC.,
AUSTIN STATE BANK
TRUST, etc., and
MANUFACTURERS
AFFILIATED TRUST CO.,
etc.,

Defendants.

i i i i i a eo oe

MEMORANDUM OPINION AND ORDER

In 1992, the parties to this case entered into a consent
decree regarding Clean Water Act (“CWA”) violations
involving wetlands in an area being developed by defen-
dants.! Following consideration by the court, the pro-
posed decree, as modified, was entered on October 29,
1992 (the “Decree”). The United States subsequently con-
tended that defendants had violated certain provisions of

1 For present purposes, it is unnecessary to make any
distinctions among the defendants.

12a

the Decree. The issue was presented on stipulated and
asserted facts and briefed by the parties. It was held none
of the facts claimed to be in dispute were material and a
ruling was issued on the basis of the documents that had
been presented. Defendants were held to have violated
deadlines for a mitigation plan that were contained in the
Decree and therefore were subject to a substantial penalty
under the terms of the Decree. See United States v. Krilich,
948 F. Supp. 719 (N.D. Ill. 1996) (“Krilich I”). In an opinion
dated October 15, 1997, this holding was upheld on
appeal, except that the government conceded that there
had been a miscalculation of the penalty. See United States
v. Krilich, 126 F.3d 1035 (7th Cir. 1997). On December 15,
1997, a modified judgment in the amount of $1,257,500
was entered on the docket. On November 2, 1998, defen-
dants moved to bar enforcement of this penalty. That
motion, which should be construed as being pursuant to
Fed. R. Civ. P. 60(b), is presently pending for ruling.

Defendants argue that relief from the judgment
should be granted because this court lacked jurisdiction
to enforce the mitigation plan deadlines. It is argued that
subject matter jurisdiction was lacking because the land
that allegedly was improperly filled did not constitute a
wetland under the CWA or did not have a sufficient
connection with interstate commerce in order to invoke
federal jurisdiction. Alternatively, defendants argue that
the penalty should not be enforced because the Decree
should be modified in light of more recent precedents
supporting that the filled lands do not fall within the
purview of the CWA. As is explained below, defendants’
contentions are without merit.

13a

Defendants contend that jurisdictional issues-rnay be
raised at any time. Defendants, however, cite cases in
which the jurisdictional issue was raised while the case
was still pending. See, e.g., Clinton v. City of New York, 524,
[sic] U.S. 417, 118 S. Ct. 2091, 2098 (1998) (jurisdictional
issue raised for the first time in the Supreme Court);
United States v. Stillwell, 900 F.2d 1104, 1110 n.2 (7th Cir.),
cert. denied, 498 U.S. 838 (1990) (jurisdictional issue of
sufficient interstate commerce nexus raised for the first
time in court of appeals). The present case is different.
Here, a judgment was previously entered and the time for
filing any further appeal had expired well before the
present motion was filed. Still, the jurisdictional issue
may be raised at any time. See Fed. R. Civ. P. 60(b)(4);
Hertz Corp. v. Alamo Rent-A-Car, Inc., 16 F.3d 1126, 1129-31
(11th Cir. 1994); R.C. v. Nachman, 969 F. Supp. 682, 692
(M.D. Ala. 1997), aff'd by unpublished order, 145 F.3d 363
(11th Cir. 1998); C.A. Wright, A. Miller, & M.K. Kane,
Federal Practice & Procedure § 2862 at 324-25 (2d ed. 1995).
In the present posture, however, the applicable standard
is different than when the jurisdictional issue is raised
while a case is still pending. “Want of jurisdiction is not
waivable - until the loser has exhausted his appellate
remedies, after which courts will not treat the judgment
as void unless the jurisdictional error is egregious .. . . If
it is not egregious, the courts say that the court that
issued the judgment in excess of its jurisdiction had juris-
diction to determine jurisdiction, and its jurisdictional
finding, even if erroneous, is therefore good against col-
lateral attack, like any other erroneous but final judg-
ment.” In re Edwards, 962 F.2d 641, 644 (7th Cir. 1992). See
also Nachman, 969 F. Supp. at 692-93; Honneus v. Donovan,

14a

691 F.2d 1, 2-3 (1st Cir. 1982); Kansas City Southern Ry. Co.
v. Great Lakes Carbon Corp., 624 F.2d 822, 825 (8th Cir.),
cert. denied, 449 U.S. 955 (1980); Wright, Miller, & Kane,
§ 2862 at 326-31.

The Decree required that defendants implement a
mitigation plan because of allegedly improper filling of
specified wetlands. Defendants now contend that the
areas filled,2 which allegedly were isolated wetlands,
were not “navigable waters” as that term is used in the
CWA, see 33 U.S.C. § 1344(a),3 and therefore this court
lacked jurisdiction under the CWA. It is also contended
that the isolated wetlands are not in interstate commerce
and therefore could not be the subject of federal legisla-
tion. The government contends that the question of
whether the isolated wetlands were navigable waters is
not a question that goes to the court’s subject matter
jurisdiction. However, at least one case has held that it is
a requirement for subject matter jurisdiction. See Patterson
Farm, Inc. v. City of Britton, $.D., 22 F. Supp. 2d 1085, 1091
(D.S.D. 1998). See also United States v. United Homes, Inc.,
1999 WL 117701 (N.D. Ill. March 1, 1999) (question of
whether pollutant fell within Corp of Engineers jurisdic-
tion under the CWA is a question that goes to the court’s

2 In Krilich I, the question of whether area W9, an isolated
wetland, was a navigable water was at issue. It was held that,
under the terms of the Decree which had a specific provision
regarding area W9, W9 was not a navigable water and therefore
not subject to certain provisions of the Decree. Id. at 721-25. The
mitigation plan presently at issue is based on filled lands other
than area W9.

3 The CWA defines “navigable waters” as “waters of the
United States.” 33 U.S.C. § 1362(7).

15a

subject matter jurisdiction). Whether the presence of nav-
igable waters is an issue going to the court’s subject
matter jurisdiction need not be determined because the
question of whether there is a sufficient nexus to inter-
state commerce is clearly a jurisdictional issue that can be
raised at any time. Stillwell, 900 F.2d at 1110 n.2.

At the time the Decree was being negotiated, defen-
dants were well aware of the jurisdictional issue they
now attempt to raise. Hoffman Homes, Inc. v. Administrator,
United States EPA, 961 F.2d 1310 (7th Cir. 1992) (“Hoffman
I”), is specifically referred to in the Decree and some of
the requirements of the Decree were conditioned on
whether Hoffman I might be reversed.* See Krilich I, 948
F. Supp. at 721-24. The jurisdictional issue that is now
raised could have been raised by defendants at the time
Krilich I was being litigated. More importantly, there is
nothing in the Decree nor any other pleadings filed prior
to defendant’s present motion that makes it apparent that
the mitigation plan may have been based solely on the
filling of isolated wetlands. Neither was there any infor-
mation indicating that those wetlands’ only possible con-
nection to interstate commerce was their occasional use

4 After the parties agreed to the Decree, but before the
Decree was approved by the court, Hoffman I was vacated for
rehearing. Subsequently, the same result was reached, but
without having to reach the question of whether isolated
wetlands could support jurisdiction under the CWA. See
Hoffman Homes, Inc. v. Administrator, United States EPA, 999 F.2d
256 (7th Cir. 1993) (“Hoffman II”). See also Krilich I, 948 F. Supp. at
721-25 (discussing Hoffman I and Hoffman II and their effect on
the construction of certain terms of the Decree).

16a

by migratory birds.> Moreover, both presently and in
1996, precedent in this circuit supports that isolated wet-
lands are a sufficient basis for CWA regulation. See Rueth
v. United States EPA, 13 F.3d 227, 231 (7th Cir. 1993);
United States v. Hallmark Construction Co., 14 F. Supp. 2d
1069, 1072-75 (N.D. 111. 1998); Solid Waste Agency of
Northern Cook Cy. v. United States Army Corps of Engineers,
998 F. Supp. 946, 954-55 (N.D. Ill. 1998). See also United
States v. Hallmark Construction Co., 30 F. Supp. 2d 1033,
1041-42 (N.D. Ill. 1998). At least one other circuit is in
accord. See Leslie Salt Co. v. United States, 55 F.3d 1388 (9th
Cir.), cert. denied, 516 U.S. 955 (1995). One circuit has
reached a contrary conclusion. See United States v. Wilson,
133 F.3d 251, 257 (4th Cir. 1997). There was and continues
to be a colorable basis for exercising jurisdiction over the
Decree’s subject matter and it cannot be held that juris-
diction in this case was totally wanting. See Nachman, 969
F. Supp. at 692-93. The December 1997 judgment is not a
void judgment that is subject to being vacated for lack of
subject matter jurisdiction.

Defendants’ other argument is that the Decree should
be vacated in light of a change in the law represented by
the Commerce Clause holding in United States v. Lopez,
514 U.S. 549 (1995), and Wilson's application of that hold-
ing in construing the provisions of the CWA as regards

5 The government disputes defendants’ present
contentions that the only basis for these wetlands falling into
the purview of the CWA is as isolated wetlands that are visited
by migratory birds. For present purposes, resolution of that
factual dispute is unnecessary and it will be assumed that the
pertinent wetlands are all isolated wetlands that are visited by
migratory birds.

17a

isolated wetlands. See Wilson, 133 F.3d at 255-57. Lopez
was decided after the Decree was entered, but before
Krilich I was decided in 1996. Wilson was issued on
December 23, 1997, eight calendar days after the Decem-
ber 15, 1997 modified judgment in the present case.

It is true that, pursuant to Fed. R. Civ. P. 60(b)(5),
consent decrees may (or even must) be modified or
vacated in light of changed circumstances, including sig-
nificant changes in the law or factual conditions. Agostini
v. Felton, 521 U.S. 203, 117 S. Ct. 1997, 2006 (1997); Rufo v.
Inmates of Suffolk County Jail, 502 U.S. 367, 384 (1992);
David B. v. McDonald, 116 F.3d 1146, 1147 (7th Cir. 1997).
Defendants ignore that this rvle is limited to relief from
the prospective application of a decree. See Fed. R. Civ. P.
60(b)(5) (“it is no longer equitable that the judgment
should have prospective application”); Agostini, 117 S. Ct.
at 2018. It is not a basis for vacating or modifying a
previously entered money judgment. Id.; Cincinnati Insur-
ance Co. v. Flanders Electric Motor Service, Inc., 131 F.3d
625, 630 (7th Cir. 1997); Norgaard v. DePuy Orthopaedics,
Inc., 121 F.3d 1074, 1077 (7th Cir. 1997). If defendants are
correct that the present state of the law no longer sup-
ports the continuing vitality of the Decree, all that would
happen would be that the Decree would be vacated effec-
tive today. That would not change the fact that the Decree
was in effect in 1993 when defendants failed to satisfy the
deadlines for implementing the mitigation plan. Presently
vacating the Decree would not preclude the government
from continuing to collect on the December 1997 judg-
ment. Cf. Balark v. City of Chicago, 81 F.3d 658 (7th Cir.),
cert. denied, 117 S. Ct. 507 (1996) (vacating of consent
decree does not preclude plaintiffs from subsequently

18a

pursuing statutory attorney fees for the time period when
the decree was in effect). Since defendants do not com-
plain about any prospective effect of the Decree, it is
unnecessary to reach the merits of whether the Decree
should be vacated in light of alleged changes in the law.

IT IS THEREFORE ORDERED that defendants’
motion to bar enforcement of penalty [109-1] is denied.
ENTER:

/s/ William T. Hart
UNITED STATES
DISTRICT JUDGE

DATED: MARCH 24, 1999

19a

APPENDIX C
RELEVANT STATUTES AND REGULATIONS
33 U.S.C. § 1311 Effluent limitations

(a) Illegality of pollutant discharges except in com-
pliance with law

Except as in compliance with this section and sec-
tions 1312, 1316, 1317, 1328, 1342, and 1344 of this title,
the discharge of any pollutant by any person shall be
unlawful.

* * *
33 U.S.C. § 1344 Permits for dredged or fill material

(a) Discharge into navigable waters at specified dis-
posal sites

The Secretary may issue permits, after notice and
opportunity for public hearings for the discharge of
dredged or fill material into the navigable waters at spec-
ified disposal sites... .

* *, +
33 U.S.C. § 1362 Definitions

Except as otherwise specifically provided, when used
in this chapter:. .. .

(7) The term “navigable waters” means the waters
of the United States, including the territorial seas.

* * *

20a

40 C.F.R. § 230.3 Definitions

For purposes of this Part, the following terms shall
have the meanings indicated:. .. .

(s) The term “waters of the United States”
means:. .. .

(3) All other waters such as intrastate lakes, rivers,
streams (including intermittent streams), mudflats, sand-
flats, wetlands, sloughs, prairie potholes, wet meadows,
playa lakes, or natural ponds, the use, degradation or
destruction of which could affect interstate or foreign
commerce including any such waters:

(i) Which are or could be used by interstate or for-
eign travelers for recreational or other purposes; or

(ii) From which fish or shellfish are or could be
taken and sold in interstate or foreign commerce; or

(iii) Which are used or could be used for industrial
purposes by industries in interstate commerce;

* * +

33 C.FR. § 328.3 Definitions

For the purpose of this regulation these terms are
defined as follows:

(a) The term “waters of the United States”
means...

(3) All other waters such as intrastate lakes, rivers,
streams (including intermittent streams), mudflats, sand-
flats, wetlands, sloughs, prairie potholes, wet meadows,
playa lakes, or natural ponds, the use, degradation or

2la

destruction of which could affect interstate or foreign
commerce including any such waters:

(i) Which are or could be used by interstate or for-
eign travelers for recreational or other purposes; or

(ii) From which fish or shellfish are or could be
taken and sold in interstate or foreign commerce; or

(iii) Which are used or could be used for industrial
purpose by industries in interstate commerce;

* * *

51 Fed. Reg. 41206

Section 328.3: Definitions. This section incorporates
the definitions previously found in § 323.3 (a), (c), (d), (f)
and (g). Paragraphs (c), (d), (f) and (g) were incorporated
without change. EPA has clarified that waters of the
United States at 40 CFR 328.3(a)(3) also include the fol-
lowing waters:

a. Which are or would be used as habitat by birds
protected by Migratory Bird Treaties; or

b. Which are or would be used as habitat by other
migratory birds which cross states lines; or

c. Which are or would be used as habitat for endan-
gered species; or

d. Used to irrigate crops sold in interstate commerce.

* * .

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1761%3A1. Public record. Not legal advice.