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2001 Term, Number 19 / June 10, 2002

Today the Supreme Court granted certiorari in one case of potential interest to the business community. Amicus briefs in support of the petitioners are due on Thursday, July 25, 2002, and amicus briefs in support of the respondents are due on Monday, August 26, 2002. Any questions about this case should be directed to Miriam Nemetz (202-263-3253) or Robert Bronston (202-263-3244) in our Washington office.

Clean Water Act — Deep Plowing — Maximum Daily Civil Penalty. The Clean Water Act ("CWA") prohibits "any addition of any pollutant" into waters of the United States, including wetlands adjacent to navigable waters, "from any point source" (33 U.S.C. § 1362(12)), without first obtaining a permit from the United States Army Corps of Engineers (id. § 1344(a), (d)), and provides for a maximum civil penalty of "$25,000 per day for each violation" of the permitting requirement (id. § 1319(d)). However, the CWA expressly exempts from the permitting requirement "normal farming * * * and ranching activities, such as plowing" that do not bring a water of the United States "into a use to which it was not previously subject," and that do not "impair[]" the "flow or circulation of navigable waters" or "reduce" their "reach." Id. § 1344(f)(1)(A), (f)(2). The Supreme Court granted certiorari in Borden Ranch Partnership v. United States Army Corps of Engineers, No. 01-1243, to decide whether a CWA permit is required prior to the "deep plowing" of agricultural land that includes protected wetlands and, if so, whether the maximum daily civil penalty may be imposed for each pass of the plow through a protected wetland.

In 1993, Angelo Tsakopoulos (the managing partner of petitioner Borden Ranch Partnership and himself a petitioner) purchased the 8400-acre Borden Ranch in California's Central Valley with the intent of planting vineyards and orchards on parts of the property. Prior to that time, the Ranch had been used principally as rangeland for cattle grazing and the growing of certain forage crops. Because the root systems of vineyards and orchards are deeper than those of the forage crops previously grown on the Ranch, deep plowing, also known as "deep ripping" or "deep slip plowing," was necessary to prepare the land for the new planting.

The Army Corps of Engineers asserted CWA jurisdiction over certain wetlands on the Ranch and contended that deep plowing in the wetlands added pollutants — defined by the CWA as, inter alia, "dredged spoil, * * * biological materials, * * * rock, sand [and] cellar dirt" (33 U.S.C. § 1362(6)) — and thus required a CWA permit. Between 1993 and 1997, Tsakopoulos and the Corps repeatedly disagreed about the authority of the Corps to regulate deep plowing on the Ranch and whether Tsakopoulos had violated the CWA by engaging in deep plowing without a permit. Finally, in 1997, the Environmental Protection Agency ("EPA") investigated the plowing activities at the Ranch, concluded that Tsakopoulos had violated the CWA, and issued an Administrative Order that Tsakopoulos cease and desist from deep plowing wetlands.

Tsakopoulos then filed suit in federal district court challenging the authority of the Corps and the EPA to regulate deep plowing. The United States filed a counterclaim seeking an injunction barring deep plowing at the Ranch and civil penalties for Tsakopoulos's alleged violations of the CWA. On cross-motions for summary judgment, the district court, in an unreported opinion, ruled that the Corps had jurisdiction over deep plowing in waters covered by the CWA. After a trial to determine whether deep plowing actually had occurred on the Ranch, the district court determined that Tsakopoulos had committed 358 violations of the CWA, counting each pass of the plow through a protected wetland as a separate violation. See 1999 WL 1797329, at *15 (E.D. Cal. Nov. 8, 1999). The district court gave Tsakopoulos the option of paying a $1.5 million civil penalty or paying $500,000 and restoring four acres of wetlands. Id. at *21. Tsakopoulos appealed, and a divided panel of the Ninth Circuit affirmed. See 261 F.3d 810.

Relying upon the Ninth Circuit's prior decision in Rybachek v. United States Environmental Protection Agency, 904 F.2d 1276 (9th Cir. 1990), and that of the Fourth Circuit in United States v. Deaton, 209 F.3d 331 (4th Cir. 2000), the panel majority rejected Tsakopoulos's argument that deep plowing alone does not constitute an "addition" of a "pollutant" within the meaning of the CWA "because it simply churns up soil that is already there, placing it back basically where it came from." 261 F.3d at 814. In Rybachek, the Ninth Circuit had held that placer mining, i.e., "removing material from a stream bed, sifting out the gold, and returning the material to the stream bed," required a CWA permit. Ibid. In Deaton, the Fourth Circuit held that the CWA governed "sidecasting," i.e., "the deposit of dredged or excavated material from a wetland back into that same wetland." 209 F.3d at 334. "These cases," the majority concluded, "recognize that activities that destroy the ecology of a wetland are not immune from the [CWA] merely because they do not involve the introduction of material brought in from somewhere else." 261 F.3d at 814-815. The majority also rejected Tsakopoulos's contention that no case had ever held a plow to be a "point source" under the CWA, explaining that the statutory definition of "point source" is "extremely broad," and that other courts had found that "bulldozers and backhoes can constitute point sources." Id. at 815 (internal quotation marks omitted).

The majority further held that the deep plowing undertaken on Borden Ranch was not entitled to the CWA's "normal farming" exemption because, "[c]onverting ranch land to orchards and vineyards is clearly bringing the land into a use to which it was not previously subject," and because the record contained a "clear basis" for concluding that the deep plowing "constitute[d] an impairment of the flow of nearby navigable waters." 261 F.3d at 815 (internal quotation marks omitted).

Finally, the panel majority rejected Tsakopoulos's contention that the calculation of a civil penalty under the CWA should be "based on the number of days in which illegal ripping occurred, not on the number of individual passes with the ripper." 261 F.3d at 817. The majority reasoned that the statute's provision for a penalty of up to $25,000 "per day for each violation" (33 U.S.C. § 1319(d)), rather than "per each day in which violations occur" or "per day in which a party pollutes," places the focus "clearly on each violation." 261 F.3d at 817 (emphasis in original). "A contrary rule," the majority concluded, "would encourage individuals to stack all their violations into one ‘Pollution Day,' in which innumerable offenses could occur, subject only to the $25,000 maximum." Ibid.

Judge Gould dissented, explaining that, rather than following the Ninth Circuit's prior decision in Rybachek and the Fourth Circuit's decision in Deaton, he "would follow and extend National Mining Association v. U.S. Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998), and hold that the return of soil in place after deep plowing is not [an addition] of a pollutant." 261 F.3d at 819 (internal quotation marks omitted). Judge Gould explained that, in National Mining, the D.C. Circuit "held that the Corps exceeded its authority under * * * the [CWA] by regulating the redeposit of dredged materials that incidentally fall back in the course of dredging operations." Ibid. Judge Gould concluded that it was "an undue stretch for us, absent a more clear directive from Congress, to reach and prohibit the plowing done here, which seems to be a traditional form of farming activity." Id. at 820.

This case is of obvious interest to all businesses engaged in farming on lands that contain waters within the jurisdiction of the CWA. Moreover, the Supreme Court's resolution of the scope of the maximum daily civil penalty under the CWA should be of substantial concern to all businesses whose operations raise issues of CWA compliance and liability. Mayer, Brown, Rowe & Maw is co-counsel for petitioners Borden Ranch Partnership and Angelo Tsakopoulos.

This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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