Experts Assess Significance Of Chevron Victory In Texas Spill Case

Lucy Kafanov, Greenwire reporter. “Within days of a controversial Supreme Court ruling questioning the scope of federal wetlands regulation, a federal judge in Texas cited the High Court decision as he blocked the government from penalizing Chevron for an oil spill in a dry creek bed. The Chevron case in the U.S. District Court for the Northern District of Texas was the first to cite the Supreme Court's June ruling in two Michigan cases, Rapanos v. United States and Carabell v. U.S. Army Corps of Engineers. At issue: Does the Clean Water Act protect wetlands without clear, direct links to larger water bodies?

Experts are assessing District Judge Sam Cummings' summary judgement in United States of America v. Chevron Pipe Line Co. for hints at how Rapanos might play out in future cases.

Chevron successfully argued the government lacked authority to penalize the company for a 2000 spill because the tributary in question did not qualify as "waters of the United States" under the Clean Water Act. While Cummings cited other 5th U.S. Circuit Court of Appeals cases, his ruling also appeared to rely heavily on Associate Justice Antonin Scalia's narrow definition of what constitutes protected waters.

Experts studying the ruling agree on one point: Litigation challenging U.S. regulatory authority will grow until the government clarifies its position with agency guidance or rulemaking or until Congress passes legislation to address the issue.

In the Supreme Court case, the plurality of Chief Justice John Roberts and Associate Justices Scalia, Clarence Thomas, Anthony Kennedy and Samuel Alito agreed in principle that U.S. EPA and the Army Corps misinterpreted the law in denying permits to two Michigan landowners whose properties were not directly connected to navigable water. But Kennedy's concurring opinion called on the corps to consider whether the wetlands at issue possess "a significant nexus" with navigable waters.

Under section 404 of the Clean Water Act, those who want to dump fill material into "navigable waters" must obtain a permit from the corps. Congress then defined "navigable waters" in the broadest terms possible as simply "the waters of the United States."

Environmentalists expressed hope the Chevron ruling will not be the normal judicial response.

"This case is a cautionary tale," said Natural Resource Defense Council senior attorney Jon Devine. "It shows that courts might interpret the Rapanos decision differently and in ways that certainly we think is unjustified. Any reliance on Justice Scalia's opinion to deny protection for water is completely unjustified in our view."

But even those siding with business interests agree that the details of each case are crucial to the outcome and no predictions can be made about the future regulation of wetlands.

"What this court did is probably what most courts are going to have to do when confronted with a case to which Rapanos applies," said Gary Sawyers, an attorney for Family Farm Alliance, which represents farm and development interests. "The courts are going to have to look at these situations on a case-by-case basis, at least until we get some more bright-line guidance from the corps or EPA."

The definition of "navigable waters" rests at the heart of the Chevron case.

In August 2000, a 6-inch crude oil gathering pipeline operated by Chevron in the Kelly-Snyder field in Texas ruptured, spilling more than 3,000 barrels -- about 126,000 gallons -- of crude into a tributary of Ennis Creek. Crude oil ponded and stained soils in the creek bed that stretched nearly 100 feet upstream from the spill and 500 feet downstream.

Chevron argued that the both the tributary and Ennis Creek were dry when the spill occurred. The company also said it cleaned up much of the spill by digging up contaminated soil and cleansing groundwater. But EPA contractors say pooled water was in fact present at the time of the spill.

In his summary judgement, Cummings observed that the lawsuit does not seek to force Chevron to clean up the spill, as much of the remediation work was completed when the lawsuit was filed in December of 2005. Instead, Cummings said EPA sought to impose civil fines on Chevron because of the spill.

The crux of Chevron's argument is that the government lacks authority to punish the company because it lacks jurisdiction under the Clean Water Act. Key to the argument: The spill did not occur in "navigable waters."

The Justice Department accused Chevron of misunderstanding "navigable waters."

"[Chevron's] position is at odds with applicable law and the explicit objective of the CWA to 'restore and maintain the chemical, physical, and biological integrity of the Nations' waters,'" wrote DOJ's Sue Ellen Wooldridge in a brief opposing Chevron's motion for summary judgement.

"This case concerns [Chevron's] unlawful discharge of oil to navigable waters of the United States and its adjoining shorelines," Wooldridge wrote. "Under CWA Section 311, [Chevron] is liable for a civil penalty."

DOJ declined to comment for this story. "Because any decision about a possible appeal is still pending, it would be inappropriate for us to discuss the case or the potential impact of the decision at this time," said DOJ spokeswoman Cynthia Magnuson in an e-mail.

In his decision, Cummings cited heavily from Scalia's plurality opinion, which states that the only plausible interpretation of "the waters of the United States" includes only relatively permanent and continuously flowing bodies of water, such as oceans, rivers and lakes.

"The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall," Scalia wrote. Cummings also concluded that there was no need to apply Kennedy's test because he "failed to elaborate on the 'significant nexus' required," forcing the court to look at prior reasoning in the 5th Circuit.

"As a matter of law in this circuit, the connection of generally dry channels and creek beds will not suffice to create a 'significant nexus' to a navigable water simply because one feeds into the next during the rare times of actual flow," Cummings wrote.

He also deemed U.S. allegations of oil contamination of navigable waters as speculation, placing the burden of proof of contamination on the government.

"What Cummings is saying is that it's going to take more than the government arguing navigable waters to seek jurisdiction of all waters of the U.S. -- in other words they'll really have to prove that this water is in jurisdiction," said Jefferson Edgens a policy specialist in the University of Kentucky's forestry department and an expert at the Bluegrass Institute for Public Policy Solutions. "What he essentially did was reaffirm at the lower level the Rapanos decision. ... He's on solid 5th Circuit reasoning."

But William Buzbee, director of the Emory Environmental and Natural Resources Law Program, argued that the Texas Chevron ruling was unsound and that other lawyers and judges will soon develop a sounder understanding of the Supreme Court case.

"I think the judge errs in thinking that Justice Scalia's plurality opinion is the law that he must apply," Buzbee said. "He looked at Justice Kennedy's test and found it difficult or amorphous and just sort of disregarded it. I think that's a pretty clear legal error, but it does show you how the Supreme Court left a confusing morass for people to sort out."

Sawyers categorized the Chevron decision as a win for agricultural and developer interests but cautioned that it provides no indication of how future cases will be decided.

"We now know that at a minimum, there has to be some sort of nexus between a wetlands and some navigable water," Sawyers said. "But the mystery still really lies in what constitutes as enough of a nexus. And that's going to be case by case."

Edgens hailed the Chevron ruling as a step toward limiting EPA and the corps' definition of water.

"I thought the ruling was good in the sense that Judge Cummings cited Rapanos and basically dismissed Kennedy's 'significant nexus' test out of hand," Edgens said. "He argued essentially what I have argued – that the EPA and the corps need to stick to navigable in fact streams rather than waters of the United States as definition for controlling what goes on in water bodies of the U.S."

But Earthjustice attorney Joan Mulhern said the Texas judge "got it wrong."

"You can't turn the Clean Water Act on and off like a faucet," Mulhern said. "The judge here clearly got it wrong.

"Even if a creek is dry part of the year, it's eventually going to be polluting water," Mulhern said. "The way the Clean Water Act is supposed to work is that you don't have to wait until the bigger water all the way downstream is polluted. All of the CWA is aimed at eliminating pollution as its source."

Mulhern said the Chevron case is at least the third from the 5^th Circuit ruling that various waterways lack protection. She noted that the first case after the Supreme Courts landmark 2001 wetlands decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, or SWANCC, also landed in the 5th Circuit.

In United States v. Needham, Mulhern said, the 5th Circuit judge applied a reasonable scope to jurisdiction based on the term "waters of the United States" following SWANCC under the Oil Pollution Control Act rather than the CWA. In the Needham case, which was cited by Cummings, the court upheld government claims of jurisdiction over a bayou adjacent to a navigable water, to which an oil spill had migrated.

But the Needham court also stated that "in this circuit the United States may not simply impose regulation over puddles, sewers, roadside ditches and the like," she said.

"It's unfortunate that it seems that some of the 5th Circuit judges seem to prefer to have oil instead of water flowing through their tributaries," Mulhern said.

The Chevron case was cited last month by Sen. Hillary Rodham Clinton (D-N.Y.) at a hearing examining the Supreme Court decision. She predicted that much of the legal trouble on wetland regulation will center on tributaries that go dry.

"When it's wet it flows, and it flows somewhere or it goes into the ground," Clinton said. "Effective regulation of navigable waters would hardly be possible if pollution of tributaries fell outside the jurisdiction of those responsible for maintaining water quality downstream."

Many believe legal confusion will continue until Congress addresses the issue with legislation.

"There will be a lot of additional litigation and uncertainty, and the only way to pre-empt these challenges is for Congress to say 'These are the kinds of waters we want EPA to protect,'" NRDC's Devine said.

But Family Farm Alliance's Sawyers said future court rulings and agency rulemaking should clarify matters.

"What a lot of folks had hoped for out of the Rapanos decision, regardless of which side of they were on, is a bright-line test that would clear up some of this confusion," Sawyers said. "I would expect that rulings from the various circuits over the next few years will clarify that. ... I'm also confident that the corps or EPA will issue some sort of policy guidance or regulations at some point."