By Susan Bruninga and John Stam

A deep-plowing technique used to convert part of a California ranch into orchards involved a discharge requiring a dredge-and-fill permit, the U.S. Supreme Court said Dec. 16 in a 4-4 vote upholding an appeals court decision (Borden Ranch Partnership v. United States, U.S., No. 01-1243, 12/16/02).

Attorneys representing development interests, while acknowledging the setback, said the opinion leaves room for other cases to move forward to try to answer some of the questions left open by this decision.

The one-sentence opinion affirmed the ruling by the U.S. Court of Appeals for the Ninth Circuit that Angelo Tsakopoulos violated the Clean Water Act when he did not obtain a Section 404 permit for "deep ripping" activities on his 8,000-acre ranch, which straddles Sacramento and San Joaquin counties (Borden Ranch Partnership v. U.S. Army Corps of Engineers, 261 F.3d 810, 52 ERC 2025 (9th Cir. 2001); 161 DEN A-4, 08/21/01 261 F.3d 810, 52 ERC 2025 (9th Cir. 2001); 161 DEN A-4, 08/21/01 ). A short opinion is common when the high court splits on a decision and thus does not include precedent-setting language.

Timothy Bishop, of Mayer, Brown, Rowe & Maw in Chicago, said the ruling focuses on issues that people have been wrestling with under Section 404 of the Clean Water Act. It deals specifically with the limits of the terms "addition," "dredge and fill material," and "point sources," he said. Bishop represented Tsakopoulos in the oral arguments before the Supreme Court.

On the ranch were 28 swales or intermittent drainages and a vernal pool, both of which are considered protected wetlands under the Clean Water Act, and activities affecting them require a permit.

Tsakopoulos argued Dec. 10 that the appeals court erred in determining that he needed a permit for deep-plowing his land because his actions were allowed under the "normal farming" exemption of the Clean Water Act (238 DEN AA-1,
12/11/02).

The oral arguments focused extensively on whether the deep-ripping plow, which consists of metal shanks up to 7 feet long used for turning packed soil, was a point source. The justices sought to understand whether the process of dragging the plow through the soil actually moved the material to another location, in effect creating a discharge or a fill.

Jeffrey P. Minear, the Justice Department attorney who argued the case on behalf of the government, said it did and that the U.S. Army Corps of Engineers, which issues the Section 404 dredge-and-fill permits, informed Tsakopoulos that he needed a permit.

Tsakopoulos was fined $1.5 million because the corps said he violated the act each time the plow passed over one of the wetlands. However, the appeals court reduced the penalty to $500,000.

Closely Watched Case

The regulated community, particularly developers, watched the case with interest in hopes that the Supreme Court might clarify some issues, such as to what extent activity in wetlands warrants a permit. For example, the U.S. Court of Appeals for the District of Columbia Circuit ruled that "incidental fallback," the material that falls back into a water that is being dredged, does not constitute a discharge as the Corps of Engineers had said it did (National Mining Association v. U.S. Corps of Engineers, , 145 F.3d 1399, 46 ERC 1769 (D.C. Cir., 1998)). That decision invalidated the so-called Tulloch rule, which sought to regulate dredging activities by calling this incidental fallback a regulable discharge.

The question of incidental fallback was discussed in the Dec. 10 oral arguments.

"The Court is focused on these issues now," Bishop said, "and typically after a four-four split the Court looks for a similar case that does not have the same recusal problem." Considering Kennedy's position in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 248 F.3d 1159, 52 ERC 1128 (2001); 7 DEN AA-1, 01/10/01, 248 F.3d 1159, 52 ERC 1128 (2001); 7 DEN AA-1, 01/10/01, Bishop said he was hopeful that a different result will occur when the Supreme Court again addresses the issue.

Tulloch Fix

One of the cases that may move forward as a result is pending litigation involving the National Association of Homebuilders, who challenged a Clinton-era regulation that sought to address what has become known as the Tulloch decision. The January 2001 rule was held up for review by the Bush administration, but was eventually released untouched in April 2001 (66 Fed. Reg. 4549; 74 DEN AA-1,4/17/01).

The homebuilders challenged the regulation saying the corps defined "incidental fallback" too narrowly and have tried to assert jurisdiction over all removal activities in wetlands contrary to the Clean Water Act (National Association of Homebuilders v. U.S. Army Corps of Engineers, D.D.C., 1:01 CV 00-274, filed 2/6/01).

Settlement discussions in the case broke down, Virginia Albrecht, the Hunton and Williams attorney representing NAHB, told BNA Dec. 16. However, the plaintiffs held off on the case once they heard that the Supreme Court would hear the Borden Ranch case, she said.

She called the appeals court decision in that case "a strong opinion that says [the federal government can] take jurisdiction based on a finding that if something causes environmental damage without regard to whether it's a discharge."

The question will be back before the court, she predicted, and maybe in the form of the NAHB challenge of the so-called "Tulloch fix" regulation.

"We will pursue it with vigor," she said, adding that the plaintiffs will now try to get a briefing schedule. "We were hoping the Supreme Court would cast light on this."

Bullet Dodged

Patrick Parenteau, a professor at the Vermont Law School who filed briefs on behalf of the Association of State Wetlands Managers, characterized the Supreme Court decision as "a bullet dodged."

Many who support increased protections for wetlands "held our breath" pending a decision, fearing that the high court would deal "another blow to the 404 program," he said.

The concern in the Borden Ranch case was not so much deep ripping, but rather expanding the category of activities not subject to wetlands permitting requirements, he said.

The battleground in wetlands policy, he said, is not so much discharging or adding material, but excavating and extracting, Parenteau said, adding that these issues are why mining and homebuilding interests all filed briefs in the case.

According to the latest figures from the Fish and Wildlife Service, about 58,000 acres of wetlands are lost each year.

Parenteau said this is mostly from land-clearing and excavation activities.