Treacy v. Newdunn Associates, Llp

• Decision Date: 10 September 2003
• Docket Number: No. 02-1594.,No. 02-1480.,02-1480.,02-1594.
• Citation: 344 F.3d 407
• Parties: Dennis H. TREACY, Director, Department of Environmental Quality; State Water Control Board, Plaintiffs-Appellants, and United States of America, Plaintiff, v. NEWDUNN ASSOCIATES, LLP; Orion Associates; Northwest Contractors, Defendants-Appellees. Mary Margaret Whipple, Virginia State Senator; L. Preston Bryant, Virginia State Delegate; Chesapeake Bay Foundation, Incorporated, Amici Supporting Appellants. National Association of Realtors; The National Association of Home Builders; NFIB Legal Foundation; National Association of Industrial and Office Properties; National Multi Housing Council; National Apartment Association; Real Estate Roundtable; Building Industry Legal Defense Foundation; Foundation for Environmental and Economic Progress; International Council of Shopping Centers, Amici Supporting Appellees. United States of America, Plaintiff-Appellant, and Dennis H. Treacy, Director, Department of Environmental Quality; State Water Control Board, Plaintiffs, v. Newdunn Associates, LLP; Orion Associates; Northwest Contractors, Defendants-Appellees. Mary Margaret Whipple, Virginia State Senator; L. Preston Bryant, Virginia State Delegate; Chesapeake Bay Foundation, Incorporated, Amici Supporting Appellant. National Association of Realtors; The National Association of Home Builders; NFIB Legal Foundation; National Association of Industrial and Office Properties; National Multi Housing Council; National Apartment Association; Real Estate Roundtable; Building Industry Legal Defense Foundation; Foundation for Environmental and Economic Progress; International Council of Shopping Centers, Amici Supporting Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

344 F.3d 407

Dennis H. TREACY, Director, Department of Environmental Quality; State Water Control Board, Plaintiffs-Appellants, and United States of America, Plaintiff, v. NEWDUNN ASSOCIATES, LLP; Orion Associates; Northwest Contractors, Defendants-Appellees.

Mary Margaret Whipple, Virginia State Senator; L. Preston Bryant, Virginia State Delegate; Chesapeake Bay Foundation, Incorporated, Amici Supporting Appellants.

National Association of Realtors; The National Association of Home Builders; NFIB Legal Foundation; National Association of Industrial and Office Properties; National Multi Housing Council; National Apartment Association; Real Estate Roundtable; Building Industry Legal Defense Foundation; Foundation for Environmental and Economic Progress; International Council of Shopping Centers, Amici Supporting Appellees.

United States of America, Plaintiff-Appellant, and Dennis H. Treacy, Director, Department of Environmental Quality; State Water Control Board, Plaintiffs, v. Newdunn Associates, LLP; Orion Associates; Northwest Contractors, Defendants-Appellees.

Mary Margaret Whipple, Virginia State Senator; L. Preston Bryant, Virginia State Delegate; Chesapeake Bay Foundation, Incorporated, Amici Supporting Appellant.

National Association of Realtors; The National Association of Home Builders; NFIB Legal Foundation; National Association of Industrial and Office Properties; National Multi Housing Council; National Apartment Association; Real Estate Roundtable; Building Industry Legal Defense Foundation;

Foundation for Environmental and Economic Progress; International Council of Shopping Centers, Amici Supporting Appellees.

No. 02-1480.

No. 02-1594.

United States Court of Appeals, Fourth Circuit.

Argued: February 25, 2003.

Decided: September 10, 2003.

ARGUED: Katherine J. Barton, Environment & Natural Resources Division, United States Department of Justice, Washington, D.C., for Appellant United States; John Kenneth Byrum, Jr., Assistant Attorney General, Richmond, Virginia, for State Appellants.

Mark Randolf Baumgartner, Pender & Coward, P.C., Virginia Beach, Virginia, for Appellees.

ON BRIEF: Thomas J. Sansonetti, Assistant Attorney General, Ellen Durkee, Ethan G. Shenkman, Kent E. Hanson, Environment & Natural Resources Division, United States Department of Justice, Washington, D.C.; Katherine D. Will, Office of General Counsel, U.S. Army Corps of Engineers, Norfolk, Virginia; Catherine Winer, Office of General Counsel, U.S. Environmental Protection Agency, Washington, D.C., for Appellant United States.

Jerry W. Kilgore, Attorney General of Virginia, Roger L. Chaffe, Senior Assistant Attorney General, Rick R. Linker, Assistant Attorney General, Richmond, Virginia, for State Appellants.

Douglas E. Kahle, Richard H. Matthews, Pender & Coward, P.C., Virginia Beach, Virginia, for Appellees.

Roy A. Hoagland, The Chesapeake Bay Foundation, Inc., Richmond, Virginia; Deborah M. Murray, Southern Environmental Law Center, Charlottesville, Virginia, for Amici Curiae Whipple, et al. Virginia S. Albrecht, Hunton & Williams, Washington, D.C., for Amici Curiae Realtors, et al.

Before GREGORY and SHEDD, Circuit Judges, and C. Arlen BEAM, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

Reversed and remanded by published opinion. Judge Gregory wrote the opinion, in which Judge Shedd and Senior Judge Beam joined.

OPINION

GREGORY, Circuit Judge:

During the summer of 2001, without obtaining a permit from the Army Corps of Engineers (the "Corps") or the Virginia State Water Control Board (the "Board"), Newdunn Associates, Orion Associates, and Northwest Contractors (collectively "Newdunn") began ditching and draining wetlands on a forty-three-acre property near Newport News, Virginia (the "Newdunn Property"). Pursuant to its authority under the Clean Water Act ("CWA" or the "Act"), the Corps brought a civil enforcement action in federal district court. The Board initiated its own enforcement action in state court, premised on the Virginia Nontidal Wetlands Resources Act of 2000 (the "Virginia Act"). Newdunn removed the state action to federal court, and the two cases were consolidated. After a five-day bench trial, the district court ruled for Newdunn in both cases, finding that the Corps lacked jurisdiction over wetlands on the Newdunn Property under the Clean Water Act, and that the jurisdictional reach of Virginia law was merely coextensive with federal law. For the reasons stated below, we reverse.

I.

In 1978, Newdunn Associates purchased forty-three acres of land located in Newport News, Virginia. It is undisputed that approximately thirty-eight acres of the Newdunn Property (the "Newdunn Wetlands") were "wetlands," as that term is defined by the Corps in its CWA regulations. 33 C.F.R. § 328.3(b) (2002) (defining "wetlands" as "those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions"). Historically, before the construction of Interstate 64 ("I-64"), the wetlands on the Newdunn Property had a natural hydrologic connection to Stony Run, which is a navigable waterway-in-fact. Presently, the Newdunn Wetlands remain connected to the navigable waters of Stony Run by the intermittent flow of surface water through approximately 2.4 miles of natural streams and manmade ditches (paralleling and crossing under I-64). Silt-laden waters from the Newdunn Wetlands merge with clear water flowing south of the manmade ditch on the west side of I-64.

In May of 2001, following the Supreme Court's ruling in Solid Waste Agency of N. Cook County ("SWANCC") v. United States, 531 U.S. 159, 167, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001), which struck down the Corps' attempted exercise of jurisdiction under its Migratory Bird Rule, Newdunn informed the Corps that it believed the Corps lacked jurisdiction over the Newdunn Property, and began filling the Newdunn Wetlands without a permit. Newdunn argued that there were no "jurisdictional" wetlands on the property, even though the property contained "scientific" wetlands. The Corps disagreed with Newdunn's interpretation of SWANCC, and on July 6, 2001, attempted to assert jurisdiction over wetlands on the Newdunn Property by commencing an enforcement action in federal district court, alleging violations of sections 301 and 404 of the Clean Water Act.

Based on the same activities, and pursuant to Virginia state law, the Board issued an Emergency Special Order ("ESO"), mandating that Newdunn cease stumping and grading on its property. Va.Code. Ann. § 62.1-44.15(8b). Newdunn ignored the ESO, and as a result, on August 7, 2001, the Board filed a civil enforcement action in state court, alleging violations of Va.Code Ann. §§ 62.1-44.5, 62.1-44.14, 62.1-44.15, 62.1-44.15:5, 62.1-44.23, and 62.1-44.32 (2001). Newdunn removed the Board's action to federal court. The Board, claiming that the district court was without jurisdiction to consider its case, filed a motion to remand. The court denied the Board's motion, and the Corps' and the Commonwealth's cases were consolidated for a five-day bench trial in March of 2002.

As to the federal suit, the district court held that the Corps' wetlands regulations were invalid because they exceeded Congress' grant of authority to the Corps under the Clean Water Act. On the state suit, the court ruled that the Commonwealth "has been unable to show that the Virginia Legislature has, at this time, granted regulatory authority independently of the Corps' jurisdiction." Accordingly, the district court determined that the Commonwealth lacked jurisdiction over the Newdunn Wetlands, since its authority was presumably coextensive with the Corps'. This consolidated appeal followed.

II.

We review de novo both the district court's statutory interpretation of the Clean Water Act, Hughes River Watershed Conservancy v. Glickman, 81 F.3d 437, 448 (4th Cir.1996), and the district court's conclusion that it had subject matter jurisdiction over the Commonwealth's enforcement action, In re Celotex Corp., 124 F.3d 619, 625 (4th Cir.1997). We review any factual findings of the district court for clear error. Virginia Vermiculite, Ltd. v. Historic Green Springs, Inc., 307 F.3d 277, 284 (4th Cir.2002).

III.

A.

Before reaching the merits of either case, we must first determine whether we have jurisdiction over the Board's enforcement action premised on Virginia law. In cases where state law creates the cause of action, federal question jurisdiction is "unavailable unless it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 13, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (emphasis added). For a federal issue to be both a necessary and disputed element, "the vindication of a right under state law [must] necessarily turn[] on some construction of federal law." Id. at 9, 103 S.Ct. 2841 (emphasis added).

In the present case, the district court noted that both the Virginia state statute and the Corps' federal regulations define "wetlands" as "those areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions." 33 C.F.R. § 328.3(b); Va.Code Ann. § 62.1-44.3. Based on this shared scientific definition,¹ the district court concluded "that the state statute is coextensive with the CWA." In making this finding, however, the district court confused the definition of "scientific wetlands" and "jurisdictional wetlands."

Newdunn concedes, and the district court recognized, that at least thirty-eight acres of the Newdunn...