U.S. v. Rgm Corp.

• Decision Date: 26 July 2002
• Docket Number: No. Civ.A. 2:01CV719.,Civ.A. 2:01CV719.
• Parties: UNITED STATES of America, Plaintiff, v. RGM CORPORATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

222 F.Supp.2d 780

UNITED STATES of America, Plaintiff, v. RGM CORPORATION, et al., Defendants.

No. Civ.A. 2:01CV719.

United States District Court, E.D. Virginia, Norfolk Division.

July 26, 2002.

Craig Paul Wittman, Office of the United States Attorney, Norfolk, VA, Steven Edward Rusak, Kent Edmund Hanson, Kenneth C. Amaditz, U.S. Department of Justice, Environmental Div., Washington, DC, for Plaintiff.

Mark Randolf Baumgartner, Pender & Coward, Virginia Beach, VA, Hunter Wilmer Sims, Jr., Kaufman & Canoles, Norfolk, VA, for Defendants.

OPINION AND ORDER

MORGAN, District Judge.

The parties in this matter come before the Court for a non-jury trial seeking to resolve Clean Water Act ("CWA") jurisdictional issues surrounding a 658 acre tract of land in Chesapeake, Virginia, known as the Edinburgh Planned Unit Development (the "property,").¹ At the conclusion of the four day non-jury trial, the Court ruled from the bench that the property was not within the United States Army Corps of Engineers (the "Corps") jurisdiction under the Clean Water Act, 33 U.S.C. § 1251, et seq (the "CWA"). This opinion and order further explains the reasoning of the Court's May 7, 2002 ruling.

FACTUAL AND PROCEDURAL BACKGROUND

Defendants RGM Corporation, RGM Land Trust, and Wilson Corp (collectively referred to as "RGM") are the principle owners of several parcels of contiguous land in the Pleasant Grove Borough of Chesapeake, Virginia. They have combined their land to create a proposed 658 acre development that will consist of an upscale residential neighborhood with an adjacent golf course. It will be located west of the Route 168 Bypass and south of Peaceful Road. Surface water drains from the property to the south via the Saint Brides drainage ditch toward the Northwest River, a navigable waterway. To the north, water flows from the property to the north via a system of man-made ditches that feed into Cooper's Ditch, which flow into the Intracoastal Waterway, a navigable waterway.²

On August 2, 2001, the Corps issued a cease and desist order to RGM³ in reaction to dredging and filling that were taking place on the property. The Corps believed this activity by the Defendants to be in violation of the CWA section 404(a) ("Section 404(a)"), 33 U.S.C. § 1344(a), and CWA section 301(a) ("Section 301(a)"), 33 U.S.C. § 1311(a), because they observed lands which they believed to be wetlands hydrologically connected to the Northwest River to the south and to the Intracoastal Waterway to the north being disturbed without a permit. Further cease and desist orders were delivered to RGM on August 29, 2001, regarding what the Corps believed to be unauthorized filling of wetlands on August 22 and 28, 2001. Again on September 7, 2001, the Corps observed what they characterize as unauthorized filling. RGM did not believe that its work violated the CWA, so they continued on schedule.⁴

The Corps instituted this action on September 21, 2001, seeking to enforce its claims to Section 404 jurisdiction. Simultaneous with the filing of this civil action, the Corps moved for a Temporary Restraining Order ("TRO") to immediately stop all work, while the Court decided whether it would grant the Corps' request for a Preliminary Injunction (PI). On September 27, 2001, the Court held an evidentiary hearing, and granted the United States a TRO lasting six days.⁵ At the conclusion of that six day period, the Court held a second hearing on October 3, 2001 and extended the TRO through October 12, 2001, requesting the parties to supply more detailed information about the character and topography of the property, as well as the percentage of the land the parties were contending constituted wetlands.

The parties provided the further information requested by the Court on the property during a third hearing on October 12, 2001. After reviewing the information provided by the parties and the record, the Court applied the four part Blackwelder test⁶ and denied the Corps' request that the Court enter a PI, finding that the Plaintiff had not carried its burden of proof.

RGM has continued its work on the property, but all parties stipulated to the fact that the wetlands impacted could be restored if the Court later ruled that the Corps had jurisdiction. Final Pre-Trial Order at 2.

CWA REGULATIONS AS PROMULGATED BY THE CORPS

The Corps first promulgated regulations for the CWA on April 3, 1974 (the "1974 regulations"). Subsequently, it enacted major revisions in 1975, 1977, and 1986 (the "1986 regulations"), and significant revisions almost biannually. While the scope of the Corp's regulations has grown steadily over the past few decades, the authority vested in the Corps by Congress has not been expanded since the Corps promulgated its first set of regulations.

Both the 1974 and 1986 regulations share the definition for navigable waters: "The term `navigable waters of the United States' and `navigable waters,' as used herein mean those waters of the United States which are subject to the ebb and flow of the tide and/or are presently, or have been in the past, or may be in the future susceptible for use for purposes of interstate or foreign commerce." 33 C.F.R. 209.120(d)(1) (1974), 33 C.F.R. 321.2(a) (1986). Both sets of regulations include the same conditions that must be met to be considered a navigable water:

(1) Past, present, or potential presence of interstate or foreign commerce;

(2) Physical capabilities for use by commerce as in paragraph (a) of this section; and

(3) Defined geographic limits of the waterbody. 33 C.F.R. 209.260(b) (1974), 33 C.F.R. 329.5 (1986).

The 1986 regulations distinguish the applicability of the term "navigable waters" from the term "waters of the United States." The 1986 regulations state:

The terms `navigable waters of the United States' and `waters of the United States' are used frequently throughout these regulations, and it is important from the outset that the reader understand the difference between the two. `Navigable waters of the United States' are defined in 33 C.F.R. Part 329. These are waters that are navigable in the traditional sense where permits are required for certain work or structures pursuant to Section 9 and 10 of the Rivers and Harbors Act of 1899. `Waters of the United States' are defined in 33 C.F.R. Part 328. These waters include more than navigable waters of the United States and are the waters where permits are required for the discharge of dredged or fill material pursuant to Section 404 of the Clean Water Act. 33 C.F.R. § 320.1(d) (1986).

The 1974 regulations make no such distinction.

The 1986 regulations state that the definition for "waters of the United States" applies to the authority of the Corps under the CWA. 33 C.F.R. § 328.1 (1986). It also clearly states that the definition for "navigable waters" "does not apply to authorities under the Clean Water Act ..." 33 C.F.R. § 329.1(1986). Again, there is no such distinction in the 1974 regulations.

The 1986 regulations define the term "waters of the United States," which it states defines CWA jurisdictional limits, 33 C.F.R. § 328.1 (1986), in much broader terms than the definition for "navigable waters:"

(1) All waters which are currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide;

(2) All interstate waters including interstate wetlands;

(3) All other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce including any such waters;

(i.) Which are or could be used by interstate or foreign travelers for recreational or other purposes; or

(ii.) From which fish or shellfish are or could be taken and sold in interstate or foreign commerce; or

(iii.) Which are used or could be used for industrial purpose by industries in interstate commerce;

(4) All impoundments of waters otherwise defined as waters of the United States under the definition;

(5) Tributaries of waters identified in paragraphs (a)(1)-(4) of this section;

(6) The territorial seas;

(7) Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (1)-(6) of this section. 33 C.F.R. 328.3 (1986).

The 1974 regulations state under "General Policies" that, "[t]he term navigable waters of the United States' is used to define the scope and extent of the regulatory powers of the Federal government." 33 C.F.R. § 209.260(b) (1974). The 1986 regulations do not contain this statement.

In several places throughout the regulations, the 1986 regulations have substituted the term "waters of the United States," where the 1974 regulations had used "navigable waters." These changes took place in otherwise identical sections of the 1986 and 1974 regulations. See e.g. 33 C.F.R. 209.120(b)(7) (1974) and 33 C.F.R. § 209.120(b)(7) (1986); 33 C.F.R. § 209.120(c) (1974) and 33 C.F.R. § 209.120(c) (1986); 33 C.F.R. § 209.120(d)(3) (1974) and 33 C.F.R. § 323.2(c) (1986); 33 C.F.R. § 209.120(e)(2) (1974) and 33 C.F.R. § 323.3(a) (1986).

The 1975 regulations' definition of "Navigable waters" includes, "All tributaries of navigable waters of the United States up to their headwaters and landward to their ordinary high water mark." 33 C.F.R. 209.120(2)(i)(e) (1975). The 1975 regulations further define "Primary tributaries" as "the main stems of tributaries directly connecting to navigable waters of the United States up to their headwaters and does not include any additional tributaries extending off of the main stems of these tributaries." 33 C.F.R. § 209.120(d)(2)(ii)(e). The 1986 regulations do not have a definition of Primary tributaries, nor do they exclude "additional tributaries extending off of the main stems of...