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NATIONAL ASS'N OF HOME BUILDERS v. U.S. ARMY CORPS OF ENGINEERS

March 31, 2004.

NATIONAL ASSOCIATION OF HOME BUILDERS, et al., Plaintiffs,
v.
U.S. ARMY CORPS OF ENGINEERS, et al., Defendants



The opinion of the court was delivered by: JAMES ROBERTSON, District Judge

MEMORANDUM

Plaintiffs challenge a regulation issued by the Army Corps of Engineers and the Environmental Protection Agency dealing with the discharge of dredged material into waters of the United States. The challenge asserts that the agencies have exceeded their authority under the Clean Water Act, the Administrative Procedure Act, and the Tenth Amendment. This matter is before me on plaintiffs' motions for summary judgment, defendants' cross-motion for summary judgment, and defendant-intervenors' cross-motion for summary judgment. The Court also has considered the parties' submissions of supplemental authority and the amicus curiae brief filed by the Pacific Legal Foundation. Having reviewed the entire record, I find that the merits controversy presented by this record is not ripe for judicial review. Plaintiffs also make a procedural challenge, contending that the Corps of Engineers and the EPA violated the APA by failing to seek notice and comment on certain Page 2 language of the regulation. That procedural challenge does not appear to be well taken, but it will not be ruled upon at this time.

BACKGROUND

  Congress passed the Clean Water Act ("CWA") in 1972 to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251. The key enforcement provision of the CWA is section 301, which declares "any discharge of any pollutant by any person" unlawful, unless the discharge is pursuant to a permit. § 1311(a). "Discharge" is defined as "any addition of any pollutant to navigable waters from any point source." § 1362 (12).*fn1 Authority to enforce the CWA is shared by the Environmental Protection Agency (EPA) and the Army Corps of Engineers (the "Corps"). Pursuant to CWA section 402, the EPA is authorized to issue permits for the discharge of pollutants into navigable waters, provided the discharge meets CWA requirements. This permit system, which is Page 3 not of central concern in this case, is known as the National Pollutant Discharge Elimination System (NPDES). § 1342.

  A separate provision, section 404, authorizes the Corps to issue permits "for the discharge of dredged or fill material into the navigable waters at specified disposal sites." § 1344. One of the central regulatory goals of section 404 is to protect the nation's wetlands.*fn2 In 1986, the Corps issued a regulation that defined the term "discharge of dredged material" to mean "any addition of dredged material into the waters of the United States," while expressly excluding "de minimis, incidental soil movement occurring during normal dredging operations." 51 Fed. Reg. 41,206, 41,232 (Nov. 13, 1986). The Corps acknowledged that dredging cannot be performed without some fallback and observed that, if it were to define such fallback as "discharge," it would be asserting jurisdiction over dredging, which it did not (at the time) believe was the intent of Congress. Id. at 41,210. In 1990, however, the Corps changed course, issuing a guidance letter stating its "position that mechanized landclearing activities in jurisdictional wetlands result in a redeposition of Page 4 soil that is subject to regulation under section 404." United States Army Corps of Eng'rs Regulatory Guidance Letter 90-5 (Jul. 18, 1990). Three years later, as part of a settlement agreement reached between the Corps and environmental interests in California Wildlife Federation v. Tulloch, Civ. No. C90-713-CIV-5-BO (E.D.N.C. 1996), the Corps issued a regulation that eliminated the de minimis exception promulgated in 1986. Instead, the so-called "Tulloch rule" redefined "discharge of dredged material" to include redeposits of material incidental to activities such as mechanized landclearing and excavation:
[A]ny addition, including any redeposit, of dredged material, including excavated material, into waters of the United States which is incidental to any activity, including mechanized landclearing, ditching, channelization, or other excavation.
58 Fed. Reg. 45,008, 45,035 (Aug. 25, 1993).*fn3 Page 5
  Industry groups, among them the National Association of Home Builders (NAHB), challenged the Tulloch rule. Plaintiffs argued, essentially, that the rule exceeded the agencies' authority under the CWA, because section 404 only applies to "discharge," which is statutorily defined as the "addition of any pollutant to the navigable waters." Judge Harris agreed, in American Mining Congress v. United States Army Corps of Engineers, 951 F. Supp. 267, 270-71 (D.D.C. 1997) [hereinafter AMC] (emphasis added). He found no case law addressing the narrow question of whether incidental fallback constitutes a discharge, concluded that Congress did not intend for either section 301 or section 404 to cover incidental fallback, declared the rule invalid, and enjoined the agencies from applying or enforcing it. Id. at 277. The D.C. Circuit affirmed, National Mining Association v. United States Army Corps of Engineers, Page 6 145 F.3d 1399, 1404 (1998) [hereinafter NMA], agreeing that the rule was contrary to the statutory language:
We agree with the plaintiffs, and with the district court, that the straightforward statutory term "addition" cannot reasonably be said to encompass the situation in which material is removed from the waters of the United States and a small portion of it happens to fall back. Because incidental fallback represents a net withdrawal, not an addition, of material, it cannot be a discharge.
The panel gave the Corps some guidance on how to restructure its rulemaking:
[W]e do not hold that the Corps may not legally regulate some forms of redeposit under its § 404 permitting authority. We hold only that by asserting jurisdiction over "any redeposit," including incidental fallback, the Tulloch Rule outruns the Corps's statutory authority. Since the [CWA] sets out no bright line between incidental fallback on the one hand and regulable redeposits on the other, a reasoned attempt by the agencies to draw such a line would merit considerable deference. But the Tulloch Rule makes no effort to draw such a line, and indeed its overriding purpose appears to be to expand the Corps's permitting authority to encompass incidental fallback and, as a result, a wide range of activities that cannot remotely be said to "add" anything to the waters of the United States.
Id. at 1405. Page 7
  In 1999, the agencies promulgated an interim rule that defined "discharge of dredged material" to include:
[A]ny addition, including redeposit other than incidental fallback, of dredged material, including excavated material, into waters of the United States which is incidental to any activity, including mechanized landclearing, ditching, channelization, or other excavation.
64 Fed. Reg. 25,120, 25,123 (May 10, 1999). NAHB and others moved to compel compliance with the 1997 AMC injunction. Judge Harris denied the motion, American Mining Congress v. United States Army Corps of Engineers, 120 F. Supp.2d 23 (D.D.C. 2000), finding the interim rule "facially consistent with the Court's injunction," and noting in particular that "the rule makes clear that the agencies may not exercise § 404 jurisdiction over redeposits of dredged material to the extent that the redeposits involve only incidental fallback." Id. at 29. Judge Harris noted that the agencies planned to make a "reasoned attempt to more clearly delineate the scope of CWA jurisdiction over redeposits of dredged material" through notice and comment rulemaking, id., and approved the agency's interim approach — to determine on a case-by-case basis whether a particular redeposit constitutes incidental fallback, Id. (citing SEC v. Chenery Corp., 332 U.S. 194, 203 (1947) (agency may choose between proceeding by general rule or adjudication)). Page 8
  In 2000 the Corps and EPA proposed a rule that added the following text to the definition of "discharge of dredged material":
A discharge of dredged material shall be presumed to result from mechanized landclearing, ditching, channelization, in-stream mining, or other mechanized excavation activity in waters of the United States. This presumption is rebutted if the party proposing such an activity demonstrates that only incidental fallback will result from its activity.
65 Fed. Reg. 50,108, 50,117 (Aug. 16, 2000); 33 C.F.R. § 323.2, 40 C.F.R. § 232.2.

  In January 2001, after reviewing comments from the public and interested parties,*fn4 the agencies issued their final rule (Tulloch II) amending the definition of "discharge of dredged material" by adding:

  The Corps and EPA regard the use of mechanized earth-moving equipment to conduct landclearing, ditching, channelization, in-stream mining or other earth-moving activity in waters of the United States as resulting in a discharge of dredged material unless project-specific evidence shows that the activity results in only incidental fallback. This paragraph does not and is Page 9 not intended to shift any burden in any administrative or judicial proceeding under the CWA.

 66 Fed. Reg. at 4,575 (emphasis added). This revised text abandoned the "rebuttable presumption" of the draft rule in favor of language that the agencies felt better captured their stated intent

 
to express our expectation that the activities in question typically result in regulable discharges, not to create a formal new process or record keeping requirements. . . . To make this point unmistakably clear, we also have added a new sentence to the rule language that expressly provides the rule does not and is not intended to shift any burden in any administrative or judicial proceeding under the CWA. In addition, the rule language has been clarified to make it more evident that we will not look to project proponents alone to provide information that only incidental fallback results.
Id. at 4,552.

  Comments from the industry asked for a definition of the term "incidental fallback." The agencies obviously had difficulty formulating a precise response:

  Incidental fallback is the redeposit of small volumes of dredged material that is incidental to excavation activity in waters of the United States when such material falls back to substantially the same place as the initial removal. Examples of incidental fallback include soil that is disturbed when dirt is shoveled and the back-spill that comes off a bucket when such small volume of ...


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