U.S. v. Marathon Development Corp., 88-1619

• Decision Date: 09 January 1989
• Docket Number: No. 88-1619,88-1619
• Citation: 867 F.2d 96
• Parties: , 19 Envtl. L. Rep. 20,683 UNITED STATES of America, Appellee, v. MARATHON DEVELOPMENT CORPORATION and Terrence Geoghegan, Defendants, Appellants. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 96

867 F.2d 96

29 ERC 1145, 19 Envtl. L. Rep. 20,683

UNITED STATES of America, Appellee, v. MARATHON DEVELOPMENT CORPORATION and Terrence Geoghegan Defendants, Appellants.

No. 88-1619.

United States Court of Appeals First Circuit.

Heard Jan. 9, 1989.

Decided Feb. 8, 1989.

Stephen R. Delinsky with whom Treazure R. Johnson and Fine & Ambrogne were on brief, for appellants.

Richard E. Welch, III, Asst. U.S. Atty., with whom Frank L. McNamara, Jr., U.S. Atty., Andrew E. Lauterback, Sp. Asst. U.S. Atty., Edward J. Shawaker, Dept. of Justice, Ann Williams-Dawe, Sr. Asst. Regional Counsel, Region I, E.P.A., and Martin R. Cohen, Asst. Chief Counsel for Litigation, Army Corps of Engineers, were on brief, for appellee.

Roberta K. Schnoor, Asst. Atty. Gen., Environmental Protection Division, and James M. Shannon, Atty. Gen., on brief for the Com. of Mass., the States of Alaska, Md., Mo., Wis., Vt., the Pennsylvania Dept. of Environmental Resources, the Rhode Island Dept. of Environmental Management and the National Wildlife Federation, amici curiae.

Before CAMPBELL, Chief Judge, COFFIN and BOWNES, Circuit Judges.

Levin H. CAMPBELL, Chief Judge.

Marathon Development Corporation ("Marathon"), a Rhode Island real estate development corporation, and Terrence Geoghegan, its senior vice-president, were indicted on 25 counts of violating the Clean Water Act of 1977, 33 U.S.C. Secs. 1251 et seq. (1982). See 33 U.S.C. Sec. 1319(c) (specifying criminal penalties). ¹ According to the government, Marathon, acting through Geoghegan, was engaged in developing a large shopping mall in southeastern Massachusetts, on a site that contained more than 20 acres of federally protected wetlands. In February 1986, Marathon was notified by the Army Corps of Engineers ("the Corps"), which administers relevant aspects of the Clean Water Act, that under the Act, Marathon could not deposit dredged or fill material into the wetlands without first obtaining a permit from the Corps. Despite this notification, Marathon, between June and September 1986, bulldozed more than five acres of wetlands clear of all vegetation, and piled debris and deposited gravel onto the wetlands. According to the government, the area leveled by Marathon roughly approximated the area designated for the shopping mall's parking lot.

Before trial, defendants raised the defense that their activities were protected by a "headwaters nationwide permit" set forth in the Corps' regulations, 33 C.F.R. Sec. 330.5(a)(26) (1986). If such a nationwide permit were applicable to their activities, defendants would not be required to obtain an individual permit from the Corps. The government filed a motion in limine to exclude any evidence relating to the alleged nationwide permit. The government argued that the evidence would be irrelevant because the headwaters nationwide permit was not applicable in Massachusetts at the time of defendants' actions. The district court granted the motion in limine.

Defendants then entered conditional pleas of guilty under Fed.R.Crim.P. 11(a)(2), preserving for appeal the single issue of whether the headwaters nationwide permit was applicable in Massachusetts. In pleading guilty, defendants admitted to the conduct charged in the indictment. The district court fined Marathon $100,000. The court imposed on Geoghegan a suspended six-month sentence, one year of probation, and a $10,000 fine. Marathon and Geoghegan now appeal to us on the single issue they preserved. We agree with the district court's conclusion that the headwaters nationwide permit was not applicable in Massachusetts, and affirm the convictions.

The Clean Water Act was enacted to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. Sec. 1251(a). Under 33 U.S.C. Secs. 1311(a) and 1362, any discharge of dredged or fill material, such as dirt and gravel, into the nation's waters is unlawful unless authorized by a permit issued by the Corps, pursuant to section 404 of the Act ("Permits for dredged or fill material"). The nation's waters protected by the Act have been broadly construed so as to include wetlands. See United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131-39, 106 S.Ct. 455, 461-65, 88 L.Ed.2d 419 (1985).

Wetlands are areas inundated or saturated with surface or ground water, including swamps, marshes, and bogs. The Army Corps of Engineers has recognized that wetlands "play a key role in protecting and enhancing water quality." Riverside Bayview Homes, 474 U.S. at 133, 106 S.Ct. at 463. As this court has noted,

Freshwater wetlands are ecologically valuable for various reasons. They act as a natural flood control mechanism by slowing and storing storm water runoff. They help supply fresh water to recharge groundwater supplies. They serve as biological filters by purifying water as it flows through the wetlands. They provide seasonal and year-round habitat for both terrestrial and aquatic wildlife.

United States v. Cumberland Farms of Connecticut, Inc., 826 F.2d 1151, 1153 (1st Cir.1987) (citing 33 C.F.R. Sec. 320.4(b) (1986)), cert. denied, --- U.S. ----, 108 S.Ct. 1016, 98 L.Ed.2d 981 (1988).

In monitoring the discharge of dredged or fill materials under the Clean Water Act, the Corps issues both individual permits, which require the making of individual applications, and general permits, which do not require individual applications. The general permits, established pursuant to section 404(e) of the Act, 33 U.S.C. Sec. 1344(e), allow categories of activities that the Corps determines will do little or no harm to the environment. General permits that have been established nationwide are called "nationwide permits." The "headwaters nationwide permit" on which defendants base their appeal is set forth in the Corps' regulations at 33 C.F.R. Sec. 330.5(a)(26):

Sec. 330.5 Nationwide permits. ²

(a) Authorized activities. The following activities, including discharges of dredged or fill material, are hereby permitted provided the conditions listed in paragraph (b) of this section and the notification procedures, where required, of Sec. 330.7 are met. Comment. Because some states have denied water quality certification/coastal zone consistency for some nationwide permits reissued herein and many states have granted conditional water quality certification, applicants should check with the district engineer regarding eligibility under the nationwide permits.

....

(26) Discharges of dredged or fill material into the waters listed in paragraphs (a)(26)(i) and (ii) of this section except those which cause the loss or substantial adverse modification of 10 acres or more of waters of the United States, including wetlands. For discharges which cause the loss or substantial adverse modification of 1 to 10 acres of such waters, including wetlands, notification of the district engineer is required in accordance with Sec. 330.7 of this part.

(i) Non-tidal rivers, streams, and their lakes and impoundments, including adjacent wetlands, that are located above the headwaters.

(ii) Other non-tidal waters of the United States, including adjacent wetlands, that are not part of a surface tributary system to interstate waters or navigable waters of the United States (i.e., isolated waters).

As noted above, defendants wished to present evidence at trial that their activities were allowed by this headwaters nationwide permit. They claim that the wetlands in question were adjacent to a channelized stream located above the headwaters, ³ and that their activities caused the "loss or adverse modification" of less than one acre, so that no individual permit or notification was required. If they had been permitted to show this, defendants argue, they would have had a complete defense to the charged crime. The government disputes defendants' contention that their activities fell within the terms of the headwaters nationwide permit, claiming that the wetlands in question were in fact adjacent to the Runnins River (a large, interstate waterway that is not located above the headwaters) and that more than five acres were adversely affected. But this factual dispute need not detain us here because we agree with the government that the headwaters nationwide permit was not in any event applicable in the Commonwealth of Massachusetts, as Massachusetts had denied the water quality certification that is requisite to the granting of a federal permit.

Under the Clean Water Act, states are empowered to set more stringent water quality standards than those set by the Act and its attendant regulations. Under section 401 of the Act ("Certification"), if a state determines that discharges from a certain category of activity will not meet state water quality requirements, the federal government is prohibited from authorizing the activity by federal permit: "No license or permit shall be granted if certification has been denied by the State...." 33 U.S.C. Sec. 1341(a)(1). A state's ability to impose more stringent water quality standards is also ensured by 33 U.S.C. Sec. 1370, which provides that any state may generally adopt a more stringent--although not a less stringent--"standard or limitation respecting discharges of pollutants" than that provided on a nationwide basis by the Clean Water Act. The Commonwealth of Massachusetts and its fellow amici curiae ⁴ contend that a state's authority to grant or deny water quality certification is central to its ability to ensure the protection of water resources within its borders.

The ability of states to enforce their own more stringent water quality standards by denying certification for a nationwide permit is consistent with the legislative purpose and history of the Clean Water Act. In stating the overall goals of the Act, Congress declared its policy "to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution." 33 U.S.C. Sec....