Environmental Law Update

Environmental Law Update provides information on developments in environmental law as it applies to property, probate and trust matters. The editors of Probate & Property welcome information and suggestions from readers.

Return to Tulloch: New Rule on Regulated Activities in Wetlands and Streams

On January 17, 2001, the U.S. Army Corps of Engineers and the Environmental Protection Agency issued a final regulation addressing the scope of the agencies’ jurisdiction to regulate land clearing, excavation and other activities in regulated wetlands and streams. Known as the “Tulloch Rule” for the litigation that gave it birth, the regulation is the result of several years of dispute among the agencies, the regulated community and environmental groups.

The agencies’ earlier version was struck down by the federal courts. It was therefore not surprising that the new rule was immediately challenged by the National Stone, Sand and Gravel Association and other members of the regulated community. They claim the new version of the rule is essentially the same as the one rejected by the courts. What may not have been expected, however, was that the Bush administration came out in support of the controversial rule in a press release in April and has since expressed its commitment to keeping it in place. Whether one considers the Tulloch Rule as necessary to close a loophole in the Clean Water Act (CWA) or an improper expansion of the agencies’ authority, this regulation has the potential to affect a wide spectrum of activities that regularly take place in the nation’s wetlands and streams.

Under § 404 of the CWA, the Corps issues permits “for the discharge of dredged or fill material into the navigable waters at specified disposal sites. ” The Tulloch case involved a North Carolina developer who engaged in land clearing and excavation activities without a § 404 permit on a development located on 700 acres of wetlands. Environmental groups filed suit against the agencies and the landowners, claiming such activities should be subject to regulation. In 1993, the parties settled Tulloch by agreeing to a revised definition of the term “discharge of dredged material.”

Fallback as Discharge

The 1993 definition (Tulloch 1) regulated, without limitation, any addition or redeposit of dredged materials, including excavated materials, into waters of the United States that is incidental to any activity, including mechanized land clearing, ditching, channelization or other excavation that has or would have the effect of destroying or degrading any area of waters of the United States.

The regulated community challenged Tulloch 1’s interpretation that incidental fallback attendant to dredging is a “discharge.” The U.S. Court of Appeals for the D.C. Circuit agreed, explaining:

[T]he straightforward statutory term ‘addition’ cannot reasonably be said to encompass the situation in which material is removed from the waters of the United States and a small portion of it happens to fall back. Because incidental fallback represents a net withdrawal, not an addition, of material, it cannot be a discharge.

National Mining Ass’n v. U.S. Army Corps of Engineers, 145 F.3d 1399, 1404 (D.C. Cir. 1998).

The court also agreed that the proper focus of the CWA is on whether or not there is a “discharge” of material and that other sections of the CWA generally addressing water quality cannot be used by the agencies to regulate the “effects” of removal activities that cause incidental discharge. Tulloch 1 was set aside and the agencies were required to enter into another round of rulemaking.

The new Tulloch Rule states that the agencies “regard the use of mechanized earth-moving equipment to conduct land clearing, ditching, channelization, in-stream mining or other earth moving activity in Waters of the United States as a discharge unless project-specific evidence shows that the activity results in only incidental fallback.” 65 Fed. Reg. at 4575.

Same Song, Second Verse

The plaintiffs in the challenge allege that the new rule is essentially “Tulloch progeny,” reanimating the effects-based standard and presumption that removal activities are “discharges” unless proved otherwise by the party conducting such activities. They also claim the rule does not contain a “bright line standard” against which the regulated community will be measured for the purposes of determining CWA jurisdiction, including civil and criminal enforcement by the agencies. Finally, they claim there is no definition of “incidental fallback” (which the courts held may be regulated under certain undefined circumstances) in the proposed rule, thus denying the public a meaningful opportunity to comment on a key aspect of the rule.

Published just before Bill Clinton left office, the new Tulloch Rule is one of the few “last minute” environmental regulations the Bush administration has supported, asserting it is necessary to prevent wetlands loss. In turn, the environmental community has argued that even activities that only remove materials from waters are regulated as a result of the effects of the soil disturbance and the potential loss of wetlands from draining. The scope of activities regulated under the rule covers virtually all soil disturbance activities in regulated waters. The requirement to prove that the activity is incidental fallback adds both time and expense as parties attempt to discern whether or not the activity is covered. Given the civil and criminal penalties imposed for knowing violations, caution ought to be exercised in making that determination without the concurrence of the agencies. If the agencies determine that the activity does indeed fall within the rubric of “discharge,” the Corps’ permitting process adds yet another layer of permitting requirements and the potential exercise of regulatory veto over the proposal.

Given Bush’s campaign platform, one cannot help but wonder if his administration is secretly hoping the new Tulloch Rule will be set aside. That said, it appears the rule will remain in effect until the courts determine otherwise. Stay tuned for Tulloch 3?

Environmental Law Update Editor: Rafe Petersen, Holland & Knight, LLP, 2099 Pennsylvania Ave., N.W., Ste. 100, Washington, DC 20006, rapetersen@hklaw.com.