CHAPTER 10 FEDERAL WETLAND PERMITTING CHALLENGES AND THE CHANGING REGULATORY FRAMEWORK

• Jurisdiction: United States

Advanced Public Land Law - The Continuing Challenge of Managing for Multiple Use
(Jan 2017)
CHAPTER 10
FEDERAL WETLAND PERMITTING CHALLENGES AND THE CHANGING REGULATORY FRAMEWORK
Lisa A. Kirschner
Shareholder, Parsons Behle & Latimer
Salt Lake City, UT
Dennis Wenger ¹
Frontier Corporation USA
Providence, UT

[Page 10-1]

LISA A. KIRSCHNER is a shareholder in the Salt Lake City office of Parsons Behle & Latimer. Her practice focuses on regulatory counseling under major federal environmental and public lands statutes with a focus on local, state, and federal water quality laws and regulations. She has teamed with clients to obtain, comply with, and defend permits involving all aspects of water quality regulation, including surface and groundwater discharge, underground injection, municipal water supply and treatment, and wetlands. Ms. Kirschner has extensive experience related to the variety of issues associated with the scope of federal Clean Water Act regulation at different types of sites. Her practice includes work with agencies, consultants and private parties addressing mitigation obligations such as those related to mitigation bank instrument implementation and functional assessment modeling for projects on both public and private lands.

I. Introduction

Many projects on public lands trigger permitting requirements under Section 404 of the federal Clean Water Act (referred to as "the CWA" or "the Act"), i.e., the required authorization for discharges of dredged or fill material into waters of the United States (also referred to as "jurisdictional waters" and including both wetlands and non-wetland waters such as rivers, lakes and streams). 33 U.S.C. § 1344. The Section 404 (or "CWA 404") permitting program is in the national spotlight because, among other things, it addresses impacts to a limited and, what some would refer to as, a disappearing resource. Additionally, the CWA has and continues to garner attention given its broad reach; areas far distant from a waterbody are potentially within its scope. Given the likelihood that many projects encounter CWA 404 issues at some point, this paper focuses on aspects of the associated permitting challenges. In particular, the following provides a brief Section 404 program background and addresses some of the practical issues associated with program implementation including considerations relative to documenting jurisdictional waters, some examples of regional program differences and how regulatory authorities often approach the mitigation requirements as well as how those requirements have been evolving. Finally, the paper provides a brief update on the ongoing litigation over the scope of the CWA and the recent U.S. Supreme Court decision identifying when agency decisions relative to that scope can be challenged in the courts.

II. The 404 Permitting Program - Overview

The CWA has two overarching goals: 1) to achieve a level of water quality that provides for the protection and propagation of fish, shellfish, and wildlife and for recreation in and on the water, where attainable (the "fishable/swimmable" goal); and 2) to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. 33 U.S.C. § 1251(a), 1313(c). Section 404 of the CWA is one program furthering the achievement of those goals and provides that: "[t]he Secretary [of the Army] may issue permits, after notice and opportunity for public hearings for the discharge of dredged or fill material into the navigable waters at specified disposal sites. . . ." It is a program administered jointly by the U.S. Army Corps of Engineers ("USACE") (33 C.F.R. pt. 328) and the U.S. Environmental Protection Agency ("EPA") (40 C.F.R. pt. 230). Many aspects of the program have been developed as a result of inter-agency memoranda of agreement ("MOA") or the issuance of Regulatory Guidance Letters ("RGLs") from the USACE. The following briefly reviews the regulations that define certain key CWA 404 program terms.

"Fill Material" is defined to include material placed in waters governed by the CWA that has the effect of replacing those waters with dry land or of changing the bottom elevation of any

[Page 10-2]

water body.² See, e.g., 33 C.F.R. § 323.2(e). "Navigable Waters" are defined as "Waters of the United States" and include adjacent wetlands and those waters which, if degraded, could affect interstate commerce as well as tributaries of the same (which can include headwaters and ephemeral drainages).³ See, e.g., 33 C.F.R. § 328.3(7) and 33 C.F.R. § 328.3(3).⁴ In general, waters are regulated (or jurisdictional) if currently used, were used in the past, or may be susceptible to use in interstate/foreign commerce (referred to as "traditionally navigable waters" or "TNWs"). Jurisdictional waters also include all interstate waters (and interstate wetlands) and impoundments of waters defined as waters. Tributaries are generally assessed on a case-by-case basis if those waters are not a TNW or interstate water. Additionally, wetlands adjacent to waters (not other wetlands) are jurisdictional (bordering, neighboring, contiguous).

The WOTUS rule, which revised the definition of covered waters and would affect the scope of the CWA, was finalized by EPA and the USACE (collectively "Agencies") on June 29, 2015 (effective August 28, 2015). Clean Water Rule: Definition of "Waters of the United States", 80 Fed. Reg. 37053. In October of 2015, the Sixth Circuit issued a nationwide stay of the rule. In re EPA, 803 F.3d 804 (6th Cir. 2015). Some of the most significant changes in the WOTUS rulemaking relate to the broader definition of tributary and the revised definition of adjacency (e.g., based on characterizations of the distance of the "water" from covered waters and that water's presence within relevant floodplains). For example, any portion of water (not just wetlands) within 100 feet of the Ordinary High Water Mark ("OHWM" which defines the lateral extent of federal jurisdiction under the Act in the absence of adjacent wetlands)⁵ of a TNW, interstate water, sea, impoundment, tributary would be characterized as adjacent. Similarly, any portion of water within the 100-year floodplain of a TNW, interstate water, sea,

[Page 10-3]

impoundment, or tributary and within 1,500 feet from the OHWM of such a water would be characterized as adjacent.⁶ The rule would also require case-specific significant nexus assessments for certain waters if those waters are located within the floodplain and/or within specific distances from OHWMs; that determination could be based on the evaluation of that water "either alone or in combination with other waters in the region." In other words, "other" waters not specifically identified as jurisdictional could be determined to be jurisdictional because collectively (e.g., on a watershed basis), those waters, when considered with other like waters, have an effect on the chemical, physical or biological integrity of the down-gradient jurisdictional water. For example, such a test could evaluate wetlands in and around headwaters cumulatively (if characterized as "like" waters). That approach would extend the reach of the CWA in some situations. As further described in the litigation update below, the future of the rulemaking is in question. In light of the nationwide stay and unless specifically stated otherwise, the following references to the scope of waters covered by the CWA are to the pre-WOTUS rulemaking definitions.

A. Documenting Waters on a Project Site

Longstanding confusion over the regulatory definitions of jurisdictional waters can be exacerbated without defensible technical support for identifying waters regulated by the CWA on a project site. For example, there can be substantial disagreement as to whether there are wetlands on a project site. Often, areas that appear wet or have wetland type vegetation may not be wetlands and may not, therefore, fall within the scope of CWA permitting obligations. Wetlands are "those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas." 33 C.F.R. § 328.3(b). In 1987, the USACE developed a manual with guidance on delineating wetlands. USACE WETLANDS DELINEATION MANUAL (1987) [hereinafter the "1987 Manual"]. The manual identifies three physical characteristics for determining the scope of Section 404 coverage: 1) hydric soils; 2) wetland hydrology; and 3) wetland-indicator vegetation. See 1987 MANUAL at 12-34. Other agencies (e.g., the U.S. Fish and Wildlife Service, EPA, NRCS) also developed separate manuals for delineating wetlands. In an effort to coordinate delineation standards, a joint wetlands delineation manual was issued in 1989 (the "1989 Manual"). FEDERAL MANUAL FOR IDENTIFYING AND DELINEATING JURISDICTIONAL WETLANDS (July 1989). The 1989 Manual was

[Page 10-4]

controversial and is not used. For purposes of wetland delineation, the 1987 Manual remains the wetlands reference manual of choice.

Over time, the USACE has recognized that a "one size fits all" approach to wetlands delineation does not work. In the early 2000s, the USACE began adapting the 1987 Manual to specific regions within the United States. The USACE developed a series of Regional Supplements to the 1987 Manual. There are currently ten Regional Supplements. The Regional Supplements identify and describe wetland indicators that are specific to a Region and provide guidance on how to interpret and apply these indicators within the Region. Notably, there are exceptions to the application of the three-parameter indicators for identifying the presence or absence of wetland conditions. In particular, if all three wetland criteria are not present on a site, those...