Landowner Faces Possible $2.8 Million Clean Water Act Fine in Upcoming Trial
Update: This case was settled in August 2017 before going to trial.
Last summer, a federal court found a California landowner liable for violating the Clean Water Act (CWA) because he tilled a 450-acre parcel of his land to plant wheat. He is now preparing for an August 14, 2017, trial. At issue in the trial will be (1) the scope of his CWA violations, (2) the appropriateness of the United States’ requests for restoration and mitigation, and (3) the amount of his civil penalty. The government is asking for a civil penalty of $2.8 million, plus tens of millions more worth of off-site mitigation. The landowner argues that the case raises the larger question of whether the federal government even had jurisdiction to pursue the CWA case against him. Although he asked the federal court to delay his trial pending resolution of a different Ninth Circuit case addressing the same jurisdictional question, the district court recently denied his motion.
The debate over the definition of Waters of the United States (WOTUS) has been raging for years. A change in administration has ushered in a change in executive policy. Nonetheless, the question of which waters should be jurisdictional for purposes of the Clean Water Act is far from resolved. And the prosecution of this case and others like it continues.
The facts of the Duarte case may be familiar. John Duarte was president of Duarte Nursery when it purchased approximately 450 acres of real estate in Tehama County, California. The Nursery retained an environmental consulting firm to provide for the parcel a report and delineation map, which identified 16.17 acres of pre-jurisdictional waters of the U.S. The report stated that these “waters” were vernal pools, vernal swales, seasonal wetlands, seasonal swales and other waters including intermittent and ephemeral drainages. The report noted that its findings were preliminary, subject to review and modification by the U.S. Army Corps (Corps) during the wetland delineation verification process.
In November of 2012, Duarte arranged for some farming activities to be conducted on the property, which had not been farmed since 1988. The Nursery hired a farmer to plant, care for, and harvest wheat on the property. The farmer was instructed to till the property 12 inches or less to “loosen the soil for rip penetration.” The farmer testified that when he tilled the ground, it was hard from “just [sitting] there” and that the shanks of the ripper were unable to penetrate more than four to six inches.
The farmer’s equipment did not avoid all of the wetlands delineated by the environmental consulting company. On November 28, 2012, a Corps employee drove past the property and noted that potential CWA violations were taking place. In 2013, the Corps sent Duarte a cease and desist letter instructing him to “cease and desist all work in waters of the United States until this violation is resolved.”
Duarte obtained counsel and responded by letter, asking the Corps to clarify its “false allegation” of wrongdoing and noting that agricultural activities were exempted from permitting requirements. In reply, the Army Corps provided a copy of a 1994 delineation of the property on a compact disc and requested information from Duarte, who did not respond. In November of 2013, Duarte and the Nursery filed an action against the Corps, alleging a deprivation of due process because the Corps had directed the Nursery to cease its farming activities without an opportunity for a hearing. Because of the order, Duarte was unable to harvest the wheat that had been planted. The Corps asserted a CWA enforcement action as a counterclaim, and the plaintiffs amended their complaint to include a claim of retaliatory prosecution.
District Court Summary Judgment
On June 10, 2016, the U.S. District Court for the Eastern District of California entered summary judgment in favor of the Corps, with respect to both the plaintiffs’ claims and the Corps’ counterclaim asserting a CWA violation. The court ruled that Duarte had (1) discharged (2) a pollutant (3) to navigable waters (4) from a point source without a permit.
The CWA defines the “discharge of pollutant” as “any addition of any pollutant to navigable waters from any point source.” 33 U.S.C. § 1362. From this definition, the court reasoned that soil was the pollutant and that the ripper or plow was the point source. The court also found that John Duarte, as a responsible corporate officer, could be held individually liable for the CWA violation.
The court ruled that Duarte’s wetlands were waters of the U.S., subject to CWA enforcement because the Duarte property had a “significant nexus” to Coyote Creek, which was a tributary of the Sacramento River, a traditionally navigable waterway. The Sacramento River was seven to eight miles from the Duarte property. In making its determination, the court relied on Justice Kennedy’s concurring opinion in Rapanos v. United States, 547 U.S. 715 (2006), which set forth the oft-maligned “significant nexus” test. The court noted that the Ninth Circuit had adopted the significant nexus test as the proper CWA jurisdictional test for the Circuit in N. Cal. River Watch v. City of Healdsburg, 496 F.3d 993, 999 (2007). Specifically, Healdsburg stated that a “significant nexus” exists where “wetlands have a significant effect on the chemical, physical, and biological integrity of the nearby navigable waters.” Id. at 1001.
Finally, the court rejected the plaintiffs’ assertions that that their farming activities were exempt from CWA permitting requirements under 33 U.S.C. § 1344(f)(1). The court agreed that the law provides for such an exemption, but found that exempt farming activities must have been “established and ongoing.” Here, no farming activities had taken place on the property since 1988. As such, the court ruled that the tillage and planting of wheat by plaintiffs could not be considered a continuation of established and ongoing farming activities.
Trial on Deck
While the summary judgment disposed of the liability question, triable issues remain as to the plaintiffs’ affirmative defenses to the counterclaim, and the government’s claimed penalty. The trial of those issues is now scheduled for August 14, 2017. On May 19, the court from the bench denied the plaintiff’s motion for a stay, pending resolution of U.S. v. Robertson, a Ninth Circuit case considering the question of whether Justice Kennedy’s significant nexus test is still the applicable CWA jurisdictional test in the Ninth Circuit. Last year, Mr. Robertson, a 77-year-old defendant, was sentenced to 18 months in prison and three years’ supervised release for the unauthorized discharge of pollutants into waters of the United States. His conviction stemmed from his creation of ponds on his Montana property. Mr. Robertson has argued that U.S. v. Davis, 825 F.3d 1014 (9th Cir. 2016), another opinion issued last summer, modified how courts in the Ninth Circuit are to apply fractured decisions (like Rapanos) from the U.S. Supreme Court.
While the case is poised for trial, Duarte has received vocal support from some well-connected advocates. Last week, House Agriculture Committee Chairman K. Michael Conaway and House Judiciary Committee Chairman, Bob Goodlatte sent a letter to U.S. Attorney General Jeff Sessions calling for a review of the Department of Justice’s decision to continue to prosecute the case against Duarte. The letter states:
Mr. Duarte’s case clearly highlights the need to keep the federal government out of America’s backyards, fields and ditches. Little-by-little we watched the previous administration chip away at the rights of land and property-owners, aiming to expand its authority through broad new rules under WOTUS, all while providing little clarity to farmers and ranchers about what qualifies for exemptions. Our letter aims to work with the new administration to better define current interpretations of both WOTUS and farming exemptions so we can begin to set new rules of the road that will protect our farmers and ranchers from onerous fines, penalties and regulations.
The Duarte case was also raised during the Senate confirmation hearing of EPA Administrator Scott Pruitt. When Iowa Senator Joni Ernst showed Pruitt a photograph of Duarte’s property and asked about whether he would work with the Department of Justice to stop the prosecution of Duarte and others like him, Pruitt stated that he would.
The future of the Duarte case remains uncertain. At the conclusion of any trial, Duarte could appeal the summary judgment, as well as any penalty assessment, to the Ninth Circuit. We will also be watching the Robertson case, which is set for oral argument this September. These cases continue as we await proposed regulations from the EPA and the Corps to rescind or revise the Clean Water Rule.
We’ll keep you posted!
 On June 10, 2016, John Duarte was found liable of violation sections 301 and 404 of the CWA, 33 U.S.C. §§ 1311 and 1344, as a result of unpermitted earthmoving activities undertaken in waters of the United States on a 450-acre parcel of real property in Tehama County, California, in November and December 2012
 U.S. v. Robertson, No. 16-30178, on appeal to the Ninth Circuit from the U.S. District Court for the District of Montana.
 On February 28, 2017, President Trump directed the EPA to prepare for public notice and comment a proposed rule to rescind or revise the Clean Water Rule. The Order said that officials should consider incorporating into any new rulemaking the definition of “navigable waters” suggested by Justice Scalia in Rapanos: “only those wetlands with a continuous surface connection to adjacent waters covered by the Clean Water Act are ‘waters of the United States.’”
 This is the process of turning the garden so the soil is loosened and water, roots, and air can penetrate.
 This argument is made based upon U.S. v. Davis, 825 F.3d 1014 (9th Cir. 2016), which was issued after the Duarte June 10, 2016, summary judgment order and modified how courts in the 9th Circuit are to apply fractured decisions of the Supreme Court of the United States, such as Rapanos. U.S. v. Robertson, No. 16-30178, on appeal from the U.S. District Court for the District of Montana and awaiting oral argument, presents the question of whether the federal government may continue to establish jurisdiction over “waters of the United States” using Justice Kennedy’s concurring opinion in Rapanos, as the 9th Circuit has held since City of Healdsburg, or whether Davis implicitly overruled City of Healdsburg.
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