ISSUE  3   JANUARY  2016

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THE WATERLOGUESRecent  Developments  in  the  Wetlands  Regulatory  Program

Wetlands  Professional  Services www.wetlandsprofessional.com

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!There  were  two  important  changes  in  2015  that  impacted  wetlands  in  the  greater  Houston  area  and  east  Texas.    

First,  the  EPA  and  Corps  of  Engineers  issued  new  regulations,  which  expanded  the  wetlands  regulatory  program.  Second,  a  federal  court  in  Houston  narrowly  interpreted  the  boundaries  of  Clean  Water  Act  jurisdiction,  which  reduced  the  reach  of  wetlands  regulations.  

Since  its  inception  almost  forty  years  ago,  the  federal  wetlands  regulatory  program  has  been  in  a  constant  state  of  change  due  to  ongoing  disputes  over  property  rights,  interagency  conRlicts,  political  pressure  and  federal  court  decisions.  Now  this  program  is  even  more  unsettled.  

NEW  REGULATIONS  FAIL  TO  BE  IMPLEMENTED:

On  August  28,  2015,  the  Environmental  Protection  Agency  (EPA)  and  the  Army  Corps  of  Engineers  (Corps)  imposed  new  regulations  that  redeRine  and  expand  the  boundaries  of  federal  regulatory  jurisdiction  over  wetlands  and  waters  of  the  United  States.    

Soon  after  these  new  regulations  went  into  effect,  a  federal  Appeals  Court  issued  an  order,  which  “stayed”  or  halted  the  EPA  and  Corps  from  implementing  their  new  regulations,  nationwide,  pending  further  action  of  the  court.  

If  these  new  regulations  were  still  in  effect,  the  boundaries  of  Clean  Water  Act  jurisdiction  would  have  greatly  expanded  and  put  a  big  chill  on  many  development  and  infrastructure  projects  throughout  America.  

Below:  Isolated  Wetlands  -­‐  center  of  controversy  over  federal  regulatory  authority

 If  there  is  a  conRlict  between  federal  regulations  and  relevant  court  decisions  regarding    wetlands,  ditches  and  streams,  then  the  applicable  language  of  relevant  federal  court  decisions  is  the  controlling  legal  authority  to  determine  the  correct  boundaries  of  Clean  Water  Act  jurisdiction.

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!Numerous  lawsuits  have  been  Riled  against  the  new  regulations  in  different  federal  courts  across  America.  These  lawsuits  are  slowly  proceeding  through  a  complex  legal  quagmire  that  will  take  years  to  resolve.  Eventually,  the  new  regulations  may  be  modiRied,  reissued  or  abandoned  altogether.    

Until  such  time  as  the  court  lifts  the  stay,  the  EPA  and  Corps  of  Engineers  have  returned  to  using  their  old  rules  that  were  previously  in  effect  to  administer  the  wetlands  regulatory  program.      

Wetlands  jurisdictional  determinations  under  the  old  rules  are  narrower  than  the  new  regulations.  This  present  situation  may  offer  some  relief  to  landowners  who  choose  to  document  the  regulatory  status  of  their  property  while  the  old  rules  remain  in  effect.  

RELEVANT  COURT  DECISIONS  

Another  major  legal  development  occurred  in  2015.    A  federal  district  court  issued  a  ruling  in  a  long-­‐running  EPA  lawsuit  against  a  Houston  area  developer  –  Thomas  Lipar  of  LGI  Development.      

On  August  30,  2015,  federal  Judge  Lynn  Hughes  in  the  Southern  District  of  Texas  (Houston)  issued  a  ruling  in  the  case  of  United  States  of  America  (EPA)  vs.  Lipar  (LGI).  This  case  involved  alleged  unauthorized  discharges  of  Rill  material  into  wetlands  at  two  projects  located  in  Montgomery  County  –  Lake  Windcrest  and  Benders  Landing  Estates.      

To  understand  the  ramiRications  of  Lipar  we  must  Rirst  explain  some  background  about  regulatory  practices  and  relevant  court  decisions.    

After  the  U.S.  Supreme  Court’s  SWANCC  decision  in  2001,  the  EPA/Corps  no  longer  had  jurisdiction  over  isolated  wetlands.  However,  regulatory  staff  opposed  and  resisted  SWANCC  and  continued  to  improperly  assert  regulatory  authority  over  isolated  wetlands.

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“……Waters  of  the  United  States  has  been  interpreted  to  include  more  than  waters  that  are  navigable-­in-­fact.  It,  however,  does  not  include  every  water  or  patch  of  mud  tangentially  connected  to  a  navigable  water.  Nor  does  its  reach  extend  to  the  impossibly  broad  and  distant  outer  limit  of  the  vogue  interpretation  of  Congress’s  power  to  regulate  commerce…..”          

 Judge  Lynn  Hughes  

Below:  Intermittent  Stream  -­‐  not  a  continuous  surface-­‐water  hydrology  connection,  does  not  establish  Clean  Water  Act  jurisdiction

ISSUE  3   JANUARY  2016

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!For  two  years  following  SWANCC  there  were  no  ofRicial  procedures  for  applying  relevant  court  decisions,  so  regulatory  staff  was  not  required  to  apply  the  rulings  of  SWANCC.  This  caused  numerous  legal  disputes.  

After  much  controversy,  the  EPA  and  Corps  issued  a  guidance  document  in  2003  (Joint  Memorandum)  with  procedures  and  guidelines  for  applying  relevant  court  decisions  when  determining  Clean  Water  Act  jurisdiction.  This  Joint  Memorandum  is  still  in  effect.

If  there  is  a  conRlict  between  federal  regulations  and  federal  court  decisions  regarding  wetlands,  ditches  and  streams,  then  the  applicable  language  of  relevant  court  decisions  is  the  controlling  legal  authority  to  determine  the  boundaries  of  Clean  Water  Act  jurisdiction.    

Relevant  court  decisions  must  be  considered  when  regulatory  staff  (or  an  independent  expert)  undertakes  the  task  of  properly  determining  the  boundaries  of  Clean  Water  Act  jurisdiction  on  raw  land.  

The  Lipar  case  

Judge  Lynn  Hughes  ruled  in  favor  of  Lipar  by  Rinding  that  the  wetlands  in  question  were  not-­‐subject  to  Clean  Water  Act  jurisdiction.    

Judge  Hughes  wrote:    “Waters  of  the  United  States  has  been  interpreted  to  include  more  than  waters  that  are  navigable-­in-­fact.  It,  however,  does  not  include  every  water  or  patch  of  mud  tangentially  connected  to  a  navigable  water.  Nor  does  its  reach  extend  to  the  impossibly  broad  and  distant  outer  limit  of  the  vogue  interpretation  of  Congress’s  power  to  regulate  commerce.  ”  

Prior  to  construction,  I  (Jim  Coody  PE)  prepared  a  wetlands  report  for  Lipar,  which  documented  with  facts  and  evidence  that  no  jurisdictional  wetlands  existed  on  the  site,  and  sealed  this  document  as  a  

Above:  Shallow  inland  tributary  –  does  not  meet  the  deRinition  of    “Traditional  Navigable  Waters”

Below:  Isolated  pond  –  not  regulated  under  the  Clean  Water  Act

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Professional  Engineer.  When  the  EPA  began  its  investigation  it  ignored  this  wetlands  report.    

The  EPA  refused  to  answer  our  requests  for  information  and  proceeded  with  enforcement  action;  it  issued  multiple  Cease  &  Desist  orders  and  Riled  a  lawsuit.  

The  EPA  conducted  extensive  investigations  of  the  site  and  surrounding  area  but  was  unable  to  produce  evidence  showing  that  the  wetlands  in  question  were  hydrologically  connected  to  navigable  waters,  or  otherwise  had  a  “signiRicant  nexus”  to  navigable  waters.    

For  ten  years,  the  EPA  conducted  its  investigations,  enforcement  actions  and  litigation  activities  in  a  perverse  and  obstinate  manner,  which  Judge  Hughes  described  as  “intractable,  uncooperative  and  deRiant.”  That  is  why  the  court  sanctioned  the  EPA  and  ordered  it  to  pay  Lipar’s  attorney  fees.  

Pertinent  ?indings  from  the  Lipar  decision:

• When dealing with isolated wetlands, the agencies must employ one of two tests from the Supreme Court’s Rapanos decision; 1) a wetland must have a permanent, direct, abutting and continuous surface-water connection to relatively permanent waters of the United States, or 2) a wetland must possess a “significant nexus” to traditional navigable waters.

• The isolated wetlands in Lipar did not meet either test.

• Wetlands with only an intermittent and physically remote hydrologic connection lack the necessary connection to establish Clean Water Act jurisdiction.

• EPA failed to prove that the isolated wetlands in Lipar “significantly affects” the chemical, biological and physical integrity of Spring Creek and other waters farther downstream.

• EPA’s “significant nexus” analysis and regression to downstream waters was too tenuous, not based on physical evidence, and amounted to nothing more than “conclusory legal generalizations.”

• EPA’s definition of navigable waters was too broad because it included small shallow inland streams that may only be navigable for recreational use by canoes and kayaks.

Lipar  demonstrates  that  it  is  very  difRicult  for  the  agencies  to  prove  a  violation  of  the  Clean  Water  Act  jurisdiction  in  cases  that        involve  isolated  wetlands.  

The  Lipar  decision  is  based  on  the  EPA/Corps  old  rules  that  were  in  effect  at  the  time  of  the  alleged  violations.  These  old  rules  have  recently  been  reactivated  after  a  federal  court  stayed  the  new  regulations.  

Lipar  is  applicable  relevant  case  law  for  projects  located  within  the  region  of  the  federal  district  court,  Southern  District  of  Texas  -­‐  which  includes  the  greater  Houston  area  and  most  of  east  Texas.    

ISSUE  3   JANUARY  2016

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The  Rindings  in  Lipar  should  be  carefully  applied  when  determining  the  boundaries  of  Clean  Water  Act  jurisdiction.  

Landowners  should  maintain  their  property  as  allowed  under  law  to  remedy  poor  drainage  conditions,  which  can  create  low  quality  emergent  wetlands.  

During  this  current  period  when  the  new  regulations  have  been  temporarily  halted  by  a  federal  court,  landowners  may  obtain  more  favorable  wetlands  determinations  by  documenting  the  regulatory  status  of  their  property  under  the  old  rules  and  in  accordance  with  the  Lipar  decision.  

The  federal  wetlands  regulatory  program  is  very  unsettled  and  fraught  with  delays.  We  will  continue  to  monitor  this  situation  and  provide  updates  in  future  editions  of  The  WaterLogues.  Please  contact  us  for  more  information.  

Jim  Coody,  PE

Jim  Coody  is  a  Professional  Engineer  with  over  25  years  of  experience  in  wetlands  and  related  environmental  regulatory  issues  that  affect  land-­use  permits  and  approvals.  Our  clients  include  owners  of  large  and  small  tracts  of  land,  developers,  brokers,  municipal  utility  districts,  school  districts,    businesses  and  institutions.  Areas  of  specialization  include  analysis  and  documentation  of  wetlands,  streams,  ditches  and  ponds;  endangered  and  threatened  species,  stormwater  drainage,  maintenance  of  raw  land  to  re-­establish  good  drainage,  coordination  with  government  agencies,  and  project  management.

We specialize in helping landowners plan, design and manage development projects to avoid impacts to jurisdictional wetlands.

PO  Box  842462,  Houston,  Texas  77284  Phone  713-­‐983-­‐6635  Jim  Coody,  President  

Mikal  Maxim,  VP  Marketing  www.wetlandsprofessional.com