Important New CWA Cases

On March 10, 2015, the U.S. Court of Appeals for the Fourth Circuit issued an unpublished opinion in Precon Development Corporation, Inc., v. U.S. Army Corps of Engineers. For several years, Precon has been contesting the Corps’ assertion of Clean Water Act (CWA) jurisdiction over Precon’s planned commercial and residential development in Chesapeake, Virginia. At issue is the jurisdictional status of 4.8 acres of wetlands that Precon wants to fill in: Is this land subject to the Corps’ permitting authority under Section 404 of the CWA because the wetlands are “water of the United States” on the basis of Justice Kennedy’s “significant nexus” test, as explicated in the 2006 Supreme Court case of Rapanos v. United States, 547 U.S. __ (2006)?

In 2011, on its first trip to the Court of Appeals, the court held that the “significant nexus” test will be controlling in the Fourth Circuit, but that the administrative record assembled by the Corps at that time did not support the agency’s finding of “significant nexus.” See 633 F.3d 278 (4th Cir. 2011). The matter was returned to the Corps which supplemented the record with additional findings, again determining that there was a “significant nexus” between the wetlands and the nearest traditional body of water, the Northwest River. The river is located about seven miles distant from the wetlands, which are linked to the Northwest River through a series of drainage ditches.

Precon again contested this determination, and appealed the lower court’s grant of summary judgment to the Corps. The Court of Appeals subjected Precon’s arguments to an exacting analysis, holding that the “significant nexus” test is, basically, a flexible ecological inquiry, and that either qualitative or quantitative evidence may support the Corps’ jurisdiction. Also, because this is a permitting action and not an enforcement action, the Corps is charged by the CWA with maintaining the integrity of the nation’s waters, and the agency cannot be expected at this time to present evidence of the actual ecological impact of the wetlands on downstream waters. In this case, the Court of Appeals also accorded substantial deference to the Corps’ factual findings Corps when they were challenged by Precon’s experts.

Anyone building a home–or anything else–may be interested in this Fourth Circuit case.

On March 11, 2015, the Fifth Circuit Court of Appeals issued another Deepwater Horizon decision. The case is United States v. Kaluza and Vidrine. The court’s ruling affirmed the holding of the lower court that these two BP employees, working on the Deepwater Horizon drilling rig as “well site leaders” were not for that reason subject to the criminal provisions of the “seaman’s manslaughter” provisions of 18 U.S.C. § 1115. Their conduct of “negative pressure tests” immediately before the explosion and fire on the Deepwater Horizon was alleged to be a cause of the catastrophe. Felony criminal indictments against these individuals were handed down by the Grand Jury, which were later dismissed by the trial court, which held that the Section 1115 does not, by its terms, apply to these defendants. The Government appealed, arguing that the natural reading of the law and its history favored the Government’s interpretation. The Court of Appeals disagreed, noting that the statute was originally enacted in 1838, and was developed to prevent “steamboat explosions and collisions on inland waters”, which is a far cry from oil and gas operations conducted far offshore under the provisions of the Outer Continental Shelf Lands Act.