Ninth Circuit Says that Homeowner’s Property Has “Significant Nexus” to Waters of the U.S.
On August 16, 2021, the Ninth Circuit brought closure to long-standing wetlands litigation between Idaho property owners and the Environmental Protection Agency (EPA). Despite the EPA’s intent to no longer pursue enforcement action, the court held that the case was not moot and that the property consisted of wetlands under the “significant nexus” test.
The case is Sackett v. Environmental Protection Agency, 2021 WL 3611779 (9th Cir. Aug. 16, 2021).
In 2004, the Sacketts purchased a 0.63-acre lot in Idaho, intending to build a home on the property. The property is located near a large wetlands complex. The water from the wetlands flows from an unnamed tributary, to a creek, and eventually runs into Priest Lake about 300 feet away from the property. Priest Lake is a navigable water. The Clean Water Act (CWA) prohibits the discharge of a pollutant, including rocks and sand, into navigable waters. The CWA defines navigable waters as “waters of the United States.”
Soon after the Sacketts began construction, the EPA issued a formal administrative compliance order alerting the Sacketts that their property contained wetlands considered “waters of the United States.” As such, the backfilling of sand and gravel into the wetlands constituted a violation of the Clean Water Act (CWA). The EPA instructed the Sacketts to immediately restore the site or face penalties in an amount up to $40,000 per day.
Instead of completing remediation, the Sacketts filed this lawsuit against the EPA claiming that the agency’s order was arbitrary and capricious because their property was not subject to the CWA. The EPA conducted a second site visit in 2008, but argued that the CWA precludes judicial review of administrative orders. The case made its way to the U.S. Supreme Court, which determined that such an order was final agency action subject to judicial review under the Administrative Procedure Act (APA). Sackett v. EPA, 566 U.S. 120, 131 (2012). The Court remanded the case for further proceedings.
In 2019, after seven years of district court proceedings, the district court found that the EPA’s amended compliance order was not arbitrary or capricious. The Sacketts appealed, and the EPA notified the homeowners that the agency was withdrawing the 2008 amended compliance order, explaining that “several years ago EPA decided to no longer enforce the [order] against you.” The EPA, alleging that the appeal was moot, moved to dismiss the case. The Sacketts resisted the motion and sought a ruling on the merits of the case. On appeal the Ninth Circuit affirmed.
First, the court considered whether the case had become moot due to the EPA’s voluntary withdrawal of the amended compliance order. A case becomes moot when it absolutely clear that the defendant cannot reengage in the alleged wrongful behavior. Here, the EPA sent a notice stating that it did not intend to conduct enforcement action now or in the future. However, the court found that this intention was not binding on future agency action. Additionally, at no point during the decade of litigation did the agency concede that it lacked the authority to regulate the Sackett’s land. Therefore, it was not “absolutely clear” that the agency would not begin enforcement proceedings at a later date. Because the withdrawal of the challenged order did not give the Sacketts full relief, the appeal was not moot.
Significant Nexus Inquiry
Next, the court addressed whether the EPA’s order determining that the Sackett’s property contained wetlands was arbitrary and capricious in violation of the APA. The court applied the regulations in effect at the time the agency issued the order. At that time, the definition of waters of the United States included wetlands that were adjacent to traditional navigable waters and their tributaries. 33 C.F.R. § 328.3(a) (2008). This determination was made using the “significant nexus” test.
The Sackett’s property contains wetlands just 30 feet away from the unnamed tributary which eventually runs into Priest Lake, a navigable water. The relevant regulations stated that tributaries to navigable waters, such as the creek feeding Priest Lake, are also jurisdictional. See 33 C.F.R. § 328.3(a)(5). Therefore, the EPA’s conclusion that the Sackett’s wetlands were adjacent to a tributary or navigable water was not arbitrary or capricious.
The court next confirmed that the significant nexus test was the proper standard under which to consider the case. In Rapanos v. United States, Justice Kennedy wrote a concurring opinion finding that “jurisdiction over wetlands depends upon the existence of a significant nexus between the wetlands in question and navigable waters in the traditional sense.” 547 U.S. 715, 779 (2006). Thus, wetlands are “waters of the United States” when they “either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’” Id. at 780.
In its amended order, the EPA explained that “similarly situated wetlands include all wetlands adjacent to the same tributary.” After several site visits, the EPA determined that the wetland complex was “especially important in maintaining the high quality of Priest Lake's water, fish, and wildlife.” Because the Sackett’s property was similarly situated to the adjacent wetlands, the EPA found that it shared a significant nexus with Priest Lake. The court ruled that EPA did not abuse its discretion in making this determination and that the Sackett’s property was regulable under the CWA and its associated regulations.
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