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AMENDED STATEMENT OF PATRICK PARENTEAU

PROFESSOR OF LAW, VERMONT LAW SCHOOL

BEFORE THE HOUSE OF REPRESENTATIVES

COMMITTEE ON GOVERNMENT REFORM

REGARDING IMPLICATIONS OF

THE SUPREME COURT=S SWANCC DECISION

                     

SEPTEMBER 19, 2002

INTRODUCTION

Mr. Chairman, members of the Committee, thank you for this opportunity to appear before you and provide these views on the implications of the Supreme Court=s controversial and sharply divided decision in Solid Waste Agency of Northern Cook County v Corps of Engineers, 121 S.Ct. 675 (2001) (SWANCC ). Though the Supreme Court has issued controversial environmental decisions in the past, few have generated as much heated debate over what the decision means. ^[1] The decision has created substantial uncertainty regarding the geographic jurisdiction of the Clean Water Act, and has had a particularly destabilizing effect on the section 404 wetlands protection program. Many groups, including the states, the regulated community, and the conservation community,  have called upon the responsible agencies, the Corps of Engineers and the Environmental Protection Agency, to issue more definitive guidance on how SWANCC is to be interpreted and applied in the field. Absent such guidance, jurisdictional determinations are being made on an ad hoc basis across the country, with frequent reports of conflicting interpretations from one Corps District to another. The agencies have agreed that guidance is necessary, but have not been able to finalize it. Obviously, there are competing views within the Bush Administration as to how these difficult issues ought to be resolved.

WHAT=S AT STAKE

The stakes in this debate, particularly for wetlands conservation, are high. ^[2] According to the latest assessment by the U.S. Fish and Wildlife Service, issued the same day the SWANCC decision was released, the nation has lost 53% of its wetlands. ^[3] Out of an original inventory of 220 million acres of wetlands, approximately 105 million acres remain. The great majority of these are on private land and are vulnerable to development. Once scorned as wastelands, wetlands are now recognized as providing a host of Aecosystem services@Bflood control, water purification, groundwater recharge, fish and wildlife habitat, carbon sequestration, recreation, etc.Bof tremendous economical, ecological, and cultural importance to the nation. These values, however, are not reflected in market economics. Government policies and programs are needed to correct the failure of the market to account for these values.

Due to a combination of federal and state policies, as well as private stewardship initiatives, the rate of wetland loss has been reduced dramatically. In particular the section 404 program, which relies primarily on compensatory techniques to offset unavoidable wetland losses through wetland restoration and enhancement, and the ASwampbuster@ provision of the Food Security Act of 1985, ^[4] which ties federal crop subsidies to wetland conservation, have stemmed the loss of wetlands. Nevertheless, the nation continues to lose almost 60,000 acres per year to urban development, agricultural conversion, energy extraction, highways, and other human activities.

 Much of the credit for the reduction in acreage losses can be attributed to former President George Bush=s adoption in 1989 of a national goal of Ano net loss@ of wetlands. ^[5] Though this goal has not been fully realized, the rate of wetland loss has declined by 80% in the past decade thanks in large part to federal policies and programs like 404. ^[6]

SWANCC has placed all this progress in jeopardy. Proponents of de-regulation see an opportunity to use SWANCC to make major changes in the 404 program, not only to roll back federal protection for Aisolated wetlands,@ but even questioning jurisdiction over tributaries of navigable rwtaers and adjacent wetlands, which were not at issue in SWANCC. Though the SWANCC Court=s specific holding was very narrow, ^[7] some point to statements in the opinion suggesting a more profound change in the scope of federal jurisdiction under the CWA. ^[8] These interpretations seek to erase over two decades of legislative, regulatory and judicial history under the statute. ^[9]   Until the SWANCC decision, the controlling legal principle had been that Congress intended federal jurisdiction under the CWA to extend to Athe limits of the Commerce Clause.@ ^[10] Literally tens of thousands of regulatory actions and hundreds of judicial decisions have been premised on this fundamental principle. The Supreme Court had declined numerous opportunities to review cases raising the very same issues presented in SWANCC.  The argument that this longstanding principle should be jettisoned Balong with an an untold number of wetlands, ponds, streams and other aquatic sites-- in the wake of a single case involving an abandoned sand and gravel pit in Northern Illinois ought to raise serious doubts among the members of Congress. It behooves this Committee to proceed cautiously, and with full, accurate information regarding the effect of changing the jurisdictional predicate of the nation=s premier water quality law. Most importantly, I urge the Committee to base any action it may take on solid scientific evidence. These issues should not be approached from the standpoint of attempting to Amaximize@ or Aminimize@ federal regulatory authority. Rather, decisions ought to be made on the basis of what is required to achieve the purposes of the CWA, which are widely supported by the public. Absent a compelling legal and scientific case, I urge the Committee to discourage the Administration from proposing radical changes in a law that has served the nation well for over 30 years.

ESTIMATING SWANCC=s IMPACT

Various estimates have been made of the impact that SWANCC could have, depending on how the Administration comes down on a number of issues subsumed under the jurisdictional rubric. ^[11] Following is a brief review of estimates by various entities:

Congressional Research Service(CRS)

Asked for its views shortly after the SWANCC decision came out, CRS had this to say:

Estimates of wetland acreage likely to be removed from the section 404 permitting program as a result of the SWANCC decision are very difficult to assess, in part because of questions about Corps and EPA interpretation of the ruling, but the decision may affect up to 79% of wetland acreage. One likely result is that in those cases where case-by-case evaluations will be required to determine if regulatory jurisdiction exists, the length of time to obtain 404 permits will be longer than in the past ^[12]

CRS also observed: APlainly, the degree of section 404 program contraction occasioned by

SWANCC will depend on which aspects of the decision shape the government=s response.@

The Association of State Wetland Managers (ASWM)

ASWM is a nonpartisan, non-profit organization whose mission includes Atranslating wetland science into fair and reasonable government policies,@ ASWM has estimated that, nationally, between 20% and 60% of wetlands could be at risk depending on how key terms such as Anavigable-in-fact,@Atributary,@Aadjacent,@ and Asignificant nexus@ are defined in the wake of SWANCC. ^[13]

 The US Fish and Wildlife Service (FWS)

In a preliminary report on the functions and values of Ageographically isolated wetlands,@ FWS identifies 19 categories of Aisolated wetlands@ including such critical biological resources as the prairie potholes (containing most of the nation=s waterfowl breeding habitat), playa lakes (providing critical wintering habitat and groundwater recharge in arid regions), and vernal pools (containing aquatic organisms found nowhere else), as well as irreplaceable wetlands such as bogs and fens. Regarding the values represented by these wetlands FWS concludes:

The profiles of isolated wetlands presented in this report show that many of the functions and benefits (e.g., water storage, nutrient retention and cycling, sediment retention, and wildlife habitat) ascribed to non-isolated wetlands are performed by isolated wetlands. Moreover, their geographic isolation and local and regional distribution place isolated wetlands in a rather unique position to provide habitats crucial for the survival of many plant and animal species (e.g., endemism and breeding grounds for numerous amphibian and bird species). ^[14]

Ducks Unlimited (DU)

DU has more than a little interest in the fate of prairie potholes, playa lakes and other Aisolated wetlands@ that provide critical habitat for the nation=s migratory waterfowl. Adopting what I would call a Aworst case@ assumption regarding an interpretation of SWANCC, DU estimates that up to a million acres would be vulnerable if there was no protection under 404. ^[15]

National Wildlife Federation (NWF) and the Natural Resources Defense Council (NRDC)

NWF and NRDC have just released a report evaluating the benefits that Aisolated wetlands@ provide to different regions of the country, calling upon Congress to resolve the confusion and controversy that SWANCC has spawned by enacting legislation to clarify its intent regarding jurisdiction under the CWA. ^[16]

The important point concerning these various reports is that an overly broad interpretation of SWANCC has the potential to undo all of the wetland conservation efforts  that have occurred over the 30 year history of the CWA and Swampbuster combined. Even a loss of only 1% of the Ageographically isolated wetlands@ identified in the FWS report would amount to millions of acres of vital aquatic resources. That total represents more than all of the wetlands that have been conserved through the 404 mitigation program, Swampbuster, and the set-aside programs under the Farm Bill.

Not only will President George Bush=s no net loss policy go by the boards, but the objective of the CWA to Arestore and maintain the chemical, physical and biological integrity of the nation=s waters@ will not be achievable. In the Riverside Bayview case the Supreme Court, citing the legislative history of the 1972 Act, noted that Athe word integrity refers to a condition in which the natural structure and function ecosystems is maintained.@ 106 S. Ct. at 462. AStructure and function@ is exactly what wetlands provide. The scientific literature is loaded with information on the vital functions that wetlands provide to the aquatic ecosystem. Congress has recognized that here is no more valuable biological system in the country. ^[17] The CWA=s Asystemic goals@ simply cannot be achieved without protecting wetlands. Congress understood that in 1972, and reinforced the nation=s commitment to wetlands conservation in the 1977 amendments by decisively rejecting proposals to roll back federal jurisdiction to traditional Anavigable waters.@ ^[18] It is unfortunate that the SWANCC Court failed to respect these legislative policies regarding protection of wetlands, but there is no reason for this Congress to compound that mistake.

The nation has made considerable progress cleaning up the most egregious sources of pollution, primarily through the discharge permit programs and the large federal investment in sewage treatment, but according to EPA=s most recent report to Congress, close to 40% of the nation=s watersBover 291,000 miles of rivers and streams--still do not meet water quality standards established by the states. ^[19] The primary cause of this impairment is Anonpoint@ source pollution, or polluted runoff. Sediments and nutrients (phosphorous and nitrogen) are two of the most pervasive pollutants preventing rivers and lakes from meeting the basic standard of Afishable/swimmable@ water. Wetlands are especially effective at filtering sediments and nutrients. Recent studies have shown that headwater streamsBthe ones most at risk from SWANCC-- are actually more effective at nutrient uptake than major rivers. ^[20] Not only do we need to preserve the remaining wetlands to achieve water quality goals, we must actively restore them wherever possible. Water does indeed Amove in hydrologic cycles,@ as the 92d Congress presciently observed 30 years ago, and pollution must be attacked Aat the source,@ throughout the watershed.

THE IMPACT ON THE STATES

Can the states fill the gap if the 404 program is Acontracted?@ In a word, no. At least not now, and not without substantial federal assistance going forward. According to ASWM, only 15 states have laws regulating wetland alterations, and they vary greatly in geographic scope and activities regulated. This means that two-thirds of the states currently have no programs to fill the gap. In the wake of SWANCC some states, such as Wisconsin, Virginia, and North Carolina moved quickly to fill the gap. Others, such as Delaware, Indiana, Illinois and Nebraska, have been trying to do so. However, given staff and budget constraints, and the need for a major public education campaign to explain the sudden need for action by the states, it is not at all clear how many will be successful, especially in the absence of any federal assistance.  Meanwhile, as the DU report points out, some of the most valuable isolated wetlands are located in regions of the country where there are no state wetland laws and where the Swampbuster program does not apply.

Over the years an effective state-federal partnership has been created under the CWA. That is not to say that there haven=t been controversies and spirited disagreements over policies and priorities. But substantial progress has been made that could not have been made without a national regulatory program providing a floor of protection for the nation=s wetlands. SWANCC threatens to undermine the strong partnership that exists under the 404 program and other water quality programs. For the two-thirds of the states that do not have wetland programs, the major handle that states have had on activities that impact wetlands has been the section 401 water quality certification authority. Under this authority states are able to condition federal permits, including section 404 permits, on compliance with state water quality standards. This has proven to be a very effective way for states to control polluting activities they would not otherwise be able to control; for example, the licensing and re-licensing of hydro-electric dams by the Federal Energy regulatory Commission (FERC). ^[21] If SWANCC is used as an excuse to remove isolated waters form the jurisdiction of the CWA, states will lose the opportunity to condition 404 permits for activities that degrade such waters. Moreover, because states will not be able to include isolated waters in their water quality standards, they will lose some of their leverage over FERC-licensed projects and other federally permitted discharges.

Section 404 Alevels the playing field@so that those states who desire to protect wetlands are not disadvantaged by those who choose not to do so. States should not be penalized for protecting wetlands by having other states gain a competitive economic advantage by offering developers a free ride. Moreover, since wetlands are part of a larger aquatic ecosystem, the objectives of conservation cannot succeed if large areas are exempt. For example, where several states share a large watershed, such as the Chesapeake Bay, all of them must participate in the effort to control wetland losses which have figured prominently in water quality degradation. With active federal involvement there is a greater likelihood that all states will participate, or at least that the failure of one or more states will not scuttle the whole effort. In short, the feds provide both a prod and a safety net to undergird the efforts of states that want to be good stewards of the environment.

THE QUESTIONS POSED BY THE COMMITTEE

I have been given a copy of the 6 questions sent by the Committee to the EPA, and will offer brief observation on each:

Q1.  Does EPA intend to withdraw the memorandum issued on January 19, 2001? If so, does EPA intend to replace the memorandum with additional internal agency guidance? If so, when?

 Comment:  The 1/19/01 Memorandum was actually a joint Corps-EPA memorandum by their respective Offices of General Counsel. In my view the memorandum fairly interprets the SWANCC decision, and identifies the legal issues that should be addressed in more detailed agency guidance. The Department of Justice apparently agrees with the thrust of the memo since it continues to assert jurisdiction over non-navigable waters and adjacent wetlands where there is a hydrological connection with navigable waters The memo correctly points out that the decision only affects the Aother waters@ category under 33 CFR ' 328.3 (a) (3), and that it only invalidated the use of migratory bird rule as the sole basis for asserting jurisdiction over non-navigable, intrastate, isolated waters. ^[22] The opinion left open the question whether there could be other bases for federal jurisdiction, such as water quality or flood control, that would have a significant nexus to navigable waters and interstate commerce. Agency guidance is clearly needed, and it should focus on what scientifically sound methodologies should be used in the field to establish the significant nexus between Aisolated wetlands@ and navigable waters.

Q 2.  Does EPA intend to issue internal agency guidance and initiate a rulemaking clarifying the navigational nexus to regulated waters? If so, when?

Comment: It is not clear why a rulemaking is necessary to provide guidance. Again, SWANCC did not strike down any of the 404 regulations; it struck down the so-called Migratory Bird Rule, which was simply language that had appeared in the preamble to the 1986 rulemaking. ^[23] All that is required to fix this problem is to develop better, more comprehensive guidance on what constitutes a Asignificant nexus.@

Q 3.  In SWANCC, the Supreme Court upheld a previous decision that supported CWA jurisdiction over wetlands adjacent to navigable waters. The Court observed that Aadjacent@ waters in the earlier case Aactually abutted on a navigable waterway,@ and stressed that the prior decision reflected Congressional intent to regulate wetlands Ainseparably bound up with@ navigable waters of the United States. Does EPA intend to revise its regulatory definition of Aadjacent?@

Comment: The case referred to is United States v Riverside Bayview, Inc, 106 S.Ct. 455 (1985)  (Riverside). Unlike SWANCC, Riverside Bayview was a unanimous decision that read the legislative history of the CWA to confer broad jurisdiction over Awaters of the United States,@ including adjacent wetlands. Riverside Bayview did not involve a wetland that Aactually abutted a navigable waterway.@ ^[24] It involved a portion of a larger wetland that was adjacent to Lake St. Clair, and that was wet as a result of groundwater levels, not over-flooding by the Lake. The fact that there was no direct hydrological connection between the wetland and the Lake was not deemed critical by the Court; rather, it was the ecological relationship of the wetland to the navigable water that the Riverside Bayview Court focused on.

In stark contrast to SWANCC, Riverside Bayview recognized the broad remedial purposes of the CWA , the fact that Awater moves in hydrologic cycles, the need to attack pollution Aat its source,@ and the need to take an Aecosystem approach@ in order to achieve the statutory goal of restoring and maintaining the Achemical, physical, and biological integrity of the nations= waters.@ Nothing in SWANCC calls into question the regulation of adjacent wetlands, and there is no need for the agencies to change their long-standing approach to determining adjacency. As mentioned, the Department of Justice continues to take the position in court that adjacency is a flexible concept that looks to establish a hydrological and ecological connection with navigable waters, regardless of proximity to Aopen waters.@ To date, there have been approximately 17 cases decided since SWANCC came down, and in all but a handful (some of which are on appeal), the government has prevailed. I have information on these cases if the Committee would like it.

Q 4.  In SWANCC, the Supreme Court struck down the jurisdiction over isolated wetlands. Does EPA have a regulatory definition of what constitutes an isolated water? If not, when does EPA intend to issue such a definition?

Comment: As discussed, I do not agree that SWANCC struck down all regulation of isolated wetlands. It clearly struck down use of migratory bird habitat as the sole basis for regulation of Aintrastate, non-navigable, isolated waters.@ But it also acknowledged the legitimacy of regulating waters the have a Asignificant nexus= with navigable waters, as well as wetlands that are Ainseparably bound up with waters of the United States.@ The Court offered no guidance on how these concepts should be defined or applied. These are as much scientific determinations as legal, and they cannot be determined in the abstract. Moreover, given the Riverside Bayview Court=s strong endorsement of the CWA=s  Asystemic@ approach to water quality management, the agencies need to develop methodologies that will document the ecological relationships of classes of isolated wetlands to navigable waters. The FWS report mentioned above is a first step in this direction.

Q5. In addition to affecting EPA regulations regarding Section 404, the Supreme Court decision also appears to potentially affect other regulations. In particular, the CWA=s Section 401 refers to certification for activities involving navigable waters. Does EPA anticipate that it will revise its regulations pertaining to section 401 water quality certifications?

Comment: As mentioned, any reduction in federal jurisdiction will negatively affect the ability of the states to condition federally permitted activities, including 404, to protect their water quality standards. This will make it harder for states to clean up Aimpaired waters,@ and may lead to degradation of waters that currently exceed standards. 

Q 6.  Does EPA ever require National Pollutant Discharge Elimination System (NPDES) permits for discharges into isolated waters? If so, how does the SWANCC decision effect [sic] the NPDES program?

Comment: Any guidance that EPA develops on the regulation of Aisolated waters@ will necessarily affect the scope of the NPDES program, as well as many other programs under the CWA. That is why extreme care must be taken in re-defining federal jurisdiction under the CWA. Mistakes will be very costly to the nation=s water quality and biological diversity.

THE NEED FOR CONGRESSIONAL ACTION TO CLARIFY CWA JURISDICTION

One thing that everyone can agree upon is that SWANCC has generated a great deal of confusion and controversy over the geographic scope of the CWA. This is, of course, a lawyer=s fondest dream. It will take years of litigation to sort out all of the questions that SWANCC has raised, but not resolved. Regardless of which way the Administration goes with guidance, there is bound to be litigation over that as well. Though this may be good for those of us in the business of producing environmental lawyers, it is not necessarily good for the environment, or for the nation.

Congress can cut through all this by clarifying the scope of CWA jurisdiction to put the focus back on the aquatic ecosystem rather than artificial characterizations such as whether a wetland is Aadjacent@ or Aisolated.@ Because the SWANCC Court based its decision on its reading of legislative intent, Congress is free to correct any misunderstanding of what Congress actually intends. This would not be the first time Congress has corrected the Court for misreading the CWA.  Bills have been introduced by Representatives Dingell and Oberstar in the House (H.R. 5194) and by Senator Feingold in the  Senate (S. 2780 ) to put the law back where it was before SWANCC scrambled it. That would be a good thing for America=s priceless wetland heritage. 

Mr Chairman, thank you for allowing me to share these thoughts. I look forward to your questions and to continuing the dialogue on these important matters.

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