Orchard Hill Building Company v. United States Army Corps Of Engineers

Filing 67

MEMORANDUM Opinion and Order Signed by the Honorable John Robert Blakey on 9/19/2017. Mailed notice(gel, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ORCHARD HILL BUILDING
COMPANY,
Plaintiffs,

Case No. 15-cv-06344

v.

Judge John Robert Blakey

UNITED STATES ARMY CORPS OF
ENGINEERS,
Defendants.
MEMORANDUM OPINION AND ORDER
This case is before the Court on cross motions for summary judgment. For
the reasons explained below, the Court denies Plaintiff’s motion for summary
judgment [40] and grants Defendant’s motion [55]. The Court also denies Plaintiff’s
motion to strike [32].
I.

FACTUAL BACKGROUND
Orchard Hill Building Company, d.b.a. Gallagher & Henry (“G&H”), acquired

title to a 100-acre parcel of property (referred to as the “Warmke Parcel”) in 1995
for the purpose of developing residential housing. Soon thereafter, the Village of
Tinley Park executed an annexation agreement and passed a zoning ordinance
allowing G&H to develop the entire Warmke Parcel. Record [30] at 65.
The Warmke Parcel was divided into three sections. Twenty-five acres on the
southern portion of the property were to be developed as a 168-unit townhome
neighborhood. Sixty-one acres on the northern portion were to be developed as a

169-unit single-family neighborhood. The remaining section, situated between the
townhome community to the south and the single-family community to the north,
was designed to function as a storm water detention area to serve the two
neighborhoods. The water detention area was to be constructed concurrent with the
development of the townhomes on the southern portion of the property. Id.
The entire development was scheduled to take place in two phases. Id. at 66.
The townhomes, storm water detention area, and sewer and water infrastructure
necessary to serve both neighborhoods were to be constructed during Phase I. After
Phase I was developed and the townhomes substantially sold, Phase II was
scheduled to commence, during which the 169 single-family homes were scheduled
to be built. Id.
G&H began Phase I construction in early 1996, and the first sales of
townhomes took place in 1997. From 1998 until 2005, 132 townhomes were built
and sold at a rate of 16.5 per year. Id. The development plan was on target to begin
construction of the Phase II single-family homes as scheduled, but the plan abruptly
halted on November 17, 2006, when the United States Army Corps of Engineers
designated approximately 13 acres of the undeveloped property as “wetlands” and
asserted jurisdiction to regulate them. 1 Id. at 67.
The wetlands in question are on the northern portion of the property, the
section designated for Phase II development. They drain south through a ditch into
Wetlands are defined as “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.” 33 C.F.R. § 328.3(b).
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an open water detention pond and then east into another open pond. From there,
they flow north via storm sewer pipe into a third open water pond, and then into
Midlothian Creek, a stream that flows directly to the Little Calumet River, a
traditional navigable water. Record [30] at 16, 19, 24. The wetlands had been
converted to farming operations prior to December 23, 1985, but farming stopped in
1996 and has not resumed. Wetland conditions returned sometime thereafter. Id. at
14.
II.

RELEVANT STATUTORY AND REGULATORY PROVISIONS
A.

The Clean Water Act

The Corps asserted jurisdiction pursuant to the Clean Water Act (“CWA”),
which prohibits discharging any “pollutant” into “navigable waters” without a
permit. 33 U.S.C. §§ 1311(a), 1362(12). “Navigable waters” are defined in the CWA
as “waters of the United States.” 33 U.S.C. § 1362(7). Although the phrase “waters
of the United States” is not defined in the statute, it is defined in the regulations
promulgated by the Corps pursuant to the CWA.
The Corps’ regulations define “waters of the United States” in seven
categories: (1) traditional navigable waters; (2) interstate waters; (3) other waters,
the use, degradation, or destruction of which could affect interstate commerce; (4)
impoundments of jurisdictional waters; (5) tributaries of waters identified in (1)
through (4); (6) the territorial seas; and (7) wetlands adjacent to waters identified in
(1) through (6). 33 C.F.R. § 328.3(a)(1)-(7) (1987).

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In Rapanos v. United States, the Supreme Court reviewed this regulatory
definition of waters of the United States as it applied to wetlands. 547 U.S. 715
(2006). In a plurality opinion authored by Justice Scalia, the Court adopted the
“relatively permanent” standard, holding that “waters of the United States”
includes “relatively permanent, standing or continuously flowing bodies of water”
that are connected to traditional navigable waters. As the Seventh Circuit noted
United States v. Gerke Excavating, Inc., 464 F.3d 723 (7th Cir. 2006), however, the
Court could not agree on the scope of federal authority over wetlands.

Justice

Scalia believed that wetlands fell within the scope of the CWA only when the Army
Corps of Engineers could show: “first, that the adjacent channel contains a ‘water of
the United States’ (i.e., a relatively permanent body of water connected to
traditional interstate navigable waters); and second, that the wetland has a
continuous surface connection with that water, making it difficult to determine
where the ‘water’ ends and the ‘wetland’ begins. 547 U.S. at 742. Justice Kennedy,
in a concurring opinion, wrote that the Corps’ jurisdiction over wetlands “depends
upon the existence of a significant nexus between the wetlands in question and the
navigable waters in the tradition sense.” Id. at 779. For a nexus to be “significant”
in this context, the wetlands must “either alone or in combination with similarly
situated lands in the region significantly affect the chemical, physical, and
biological integrity of other covered waters more readily understood as ‘navigable.’”
Id. at 780. In Gerke, the Seventh Circuit adopted Justice Kennedy’s more narrow
approach to federal authority. As a result, this Court follows suit.

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B.

Prior Converted Cropland Exemption

Corps regulations contain various exemptions to the CWA’s prohibition on
discharges into waters of the United States based upon the nature or use of the
land. Specifically, Corps regulations specify that “prior converted cropland” is not a
water of the United States and therefore the CWA discharge prohibitions do not
apply to such land. 33 C.F.R. § 328.3(a)(8). Upon the adoption of this regulation,
the Corps clarified that “prior converted cropland” refers to wetlands that were
manipulated for farming purposes before December 23, 1985. The exemption does
not apply to areas where farming has been abandoned for five consecutive years and
where wetland characteristics have returned. 58 Fed. Reg. 45008, 45034 (Aug. 25,
1993).
III.

PROCEDURAL BACKGROUND
Regulations promulgated by the Corps authorize a District Engineer to make

a jurisdictional determination as to whether an area is a water of the United States
and thus within the Corps’ regulatory jurisdiction pursuant to the CWA. 33 C.F.R.
§§ 320.1(a)(6), 325.9. Once a jurisdictional determination has been made by a
District Engineer, there is a single level of administrative appeal to the Division
Engineer. Id. § 331.3(a)(1). The appeal is initiated when an affected party submits a
Request for Appeal, but the administrative appeal “is limited to the information
contained in the administrative record by the date of the NAP [Notification of
Appeal Process].” Id. §§ 331.6(a), 331.7(f). The NAP is a fact sheet that accompanies
the jurisdictional determination and that explains the administrative appeal

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process. Neither party to the appeal may present new information, but either party
may “interpret, clarify or explain issues and information contained in the record.”
Id. § 331.7(f).
If the Division Engineer determines that an appeal is without merit, his
letter, which advises the applicant that the appeal is without merit and confirms
the District Engineer’s initial decision, becomes the final Corps decision. Id.
§ 331.10(a). If, however, the Division Engineer determines that the appeal has
merit, he may remand the matter to the District Engineer with instructions to
correct procedural errors or to “reconsider the decision where any essential part of
the district engineer’s decision was not supported by accurate or sufficient
information, or analysis, in the administrative record.” Id. § 331.9(b). In the case of
remand, the District Engineer’s decision, made pursuant to the remand from the
Division Engineer, becomes the final Corps decision is Id. § 331.10(b).
A.

First Jurisdictional Determination

In this case, the Chicago District Engineer issued an initial jurisdictional
determination on November 17, 2006, concluding that approximately 13 acres of
wetlands on the Warmke Parcel are “waters of the United States” subject to
regulation under the CWA. Record [30-5] at 19. Significant to the District
Engineer’s decision was the fact that the identified wetlands drain via a storm
sewer pipe “to Midlothian Creek which is a tributary to the Little Calumet River, a
navigable water.” Id. G&H administratively appealed that decision to the Division
Engineer, arguing that the November 2006 jurisdictional determination failed to

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apply Rapanos. The Division Engineer agreed and remanded the jurisdictional
determination to the District Engineer with instructions to reconsider its decision in
light of Rapanos. Id. at 1-2.
B.

Second Jurisdictional Determination

The District Engineer issued a second approved jurisdictional determination
in October 2010, applying Rapanos and concluding that jurisdictional waters
encompass the Warmke Property because there is a significant nexus to the
navigable Little Calumet River. Record [30-3] at 3-4. The District Engineer’s
decision was based upon a finding that the wetlands in question drained into
Midlothian Creek, establishing a “physical hydrologic connection” to the navigable
Little Calumet River. Id. at 3. This “significant nexus” enables “pollutants,
floodwaters, nutrients and organic carbon to transport from the onsite wetland to
the navigable water,” significantly affecting “the chemical, physical and biological
integrity of the Little Calumet River, a traditional navigable water.” Id. G&H filed
a second administrative appeal in January 2011, arguing that the District Engineer
erred in finding a significant nexus and in concluding that the property was not
exempt as prior converted cropland. Record [30-2] at 75-77. The Division Engineer
determined that the second administrative appeal was without merit in June 2011.
Id. at 67-74.
C.

Third Jurisdictional Determination and Final Remand

In July 2011, G&H asked the Corps to reconsider its previous appeal decision
because of the 1993 prior converted cropland designation excluding the parcel from

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CWA jurisdiction. Id. at 27-32. The Corps agreed to reconsider the decision and the
District Engineer issued a third jurisdictional determination on March 26, 2012,
affirming the prior decision. Record [30-1] at 75-77. Although the District Engineer
recognized that the property had previously been used for agricultural activities,
she determined that those activities had ceased by the fall of 1996, that the
“wetland areas have not been farmed for 15 consecutive years and wetland
conditions have returned.” Id. at 76. G&H filed a third administrative appeal to
the Division Engineer on May 24, 2012, arguing that the District Engineer’s
significant nexus determination was not supported by sufficient evidence. Id. at 6473. The Division Engineer issued its review of the appeal on May 9, 2013,
concluding that the appeal had merit “because the District [Engineer] failed to
provide the requisite explanation for its significant nexus determination.” Id. at 48.
The Division Engineer remanded the appeal to the District Engineer with
instructions “to include sufficient documentation to support its decision” and “to
follow procedures set forth in the 2008 Rapanos Guidance.” Id. at 48, 52.
Upon remand the District Engineer issued a new jurisdictional determination
on July 19, 2013, again concluding that there is a significant nexus to the Little
Calumet River, a traditional navigable water, placing the property within the
protection of the CWA. Id. at 11. The District Engineer concluded that the relevant
wetlands “drain via surface and subsurface connection to Midlothian creek, a
perennial stream tributary to the navigable Little Calumet River,” significantly
affecting—alone and in combination with other wetlands in the area—the chemical,

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physical and biological integrity of the river.

Record [30-1] at 11. The District

Engineer determined that this impact constitutes a significant nexus under
Rapanos. In reaching this decision, the District Engineer provided additional
“significant nexus documentation” in an eleven-page document titled “Warmke Site
Wetland Functions and Benefits to Downstream Waters.” Record [30-1] at 11, 3646. This document had not previously been included in the administrative record. 2
Id.

The July 19, 2013 jurisdictional determination constituted the final agency

decision. 33 C.F.R. § 331.10(b).
D.

Current Proceedings

G&H brought suit in this Court challenging the Corps’ jurisdictional
determination over its property. Here, G&H claims that the Corps failed to follow
its own regulations, disregarded the explicit instructions of the Division Engineer,
and violated the Administrative Procedure Act when it “supplemented the record by
adding 11 pages discussing approximately 30 extra-record studies, and concluding,
based almost entirely on those studies, that a significant nexus existed between the
13 acres and the Little Calumet River.” Plaintiff’s Memorandum in Support of
Summary Judgment [40] at 3. G&H also argues that the jurisdictional
determination is invalid, even if there is a sufficient nexus, because the property
falls within the prior converted cropland exception to the CWA. G&H claims that
the jurisdictional determination subjects it to the risk of severe civil and criminal
sanctions if it continues its development activities, rendering the entire
G&H has moved to strike this document, see Doc. 32. The Court addresses the motion
below.

2

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undeveloped portion of the Warmke Parcel (consisting of approximately 65 acres)
essentially unmarketable. Id. at 9. The parties filed cross motions for summary
judgment, [40], [55], which the Court considers below.
IV.

APPLICABLE LEGAL STANDARDS
A court should grant summary judgment “if the movant shows that there is

no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute as to any material fact
exists if “the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
party seeking summary judgment has the burden of establishing that there is no
genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). In determining whether a genuine issue of material fact exists, this
Court must construe all facts and reasonable inferences in the light most favorable
to the nonmoving party, here, each party with respect to the other’s motion. See
CTL ex rel. Trebatoski v. Ashland School District, 743 F.3d 524, 528 (7th Cir. 2014).
This Court’s review of a final agency decision by the United States Army
Corps of Engineers is governed by the Administrative Procedure Act (“APA”). This
Court may reverse the Corps’ decision under limited circumstances, such as where
the decision is arbitrary and capricious or otherwise not in accordance with the law.
5 U.S.C. § 706(2). The standard does not mean no review at all, but that the Corps’
decision will “be accorded a high degree of deference.” Mt. Sinai Hospital Medical
Center v. Shalala, 196 F.3d 703, 708 (7th Cir. 1999). The Court’s review presumes

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the validity of agency actions so long as they satisfy minimum standards of
rationality in light of the administrative record. Citizens to Preserve Overton Park v.
Volpe, 401 U.S. 402, 416 (1971) (“[T]he court must consider whether the decision
was based on a consideration of the relevant factors and whether there has been a
clear error of judgment…. The court is not empowered to substitute its judgment for
that of the agency.”)
When judicial review involves determining the meaning of an agency
regulation, the agency’s interpretation of its own regulation is entitled to significant
deference, unless that interpretation is “plainly erroneous or inconsistent with the
regulation.” Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413 (1945). If the
agency’s interpretation is not plainly erroneous or inconsistent with the regulation,
that interpretation bears “controlling weight.” Id. The agency is entitled to judicial
deference even if its interpretation is advanced in a legal brief. Chase Bank USA v.
McCoy, 562 U.S. 195, 208 (2011) (“[W]e defer to an agency’s interpretation of its
own regulation, advanced in a legal brief, unless that interpretation is plainly
erroneous or inconsistent with the regulation.”) (internal quotations omitted). The
reviewing court need not agree with the agency’s interpretation and must defer if
that interpretation is reasonable. Decker v. Northwest Envtl. Def. Ctr., 568 U.S. 597,
613 (2013) (“It is well established that an agency’s interpretation need not be the
only possible reading of a regulation—or even the best one—to prevail.”).

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V.

DISCUSSION
A.

The Administrative Record and Supplemental Information

Before turning to the merits of the parties’ motions for summary judgment,
the Court considers G&H’s motion to strike eleven pages from the administrative
record. See [32]. G&H argues that when the District Engineer relied upon eleven
pages of studies that were not included in the administrative record at the time of
the Notification of Appeal Process, the Corps violated: (1) its own regulations on
administrative appeals; (2) the Division’s remand order; and (3) the APA.
1.

The Corps’ Regulations

G&H maintains that regulations promulgated by the Corps require that “the
decision of the district on remand shall be based solely on the existing
administrative record.” [40] at 30. Because the District included additional
information in the record on remand, G&H argues that it violated its own
regulations. The Corps disagrees, arguing that “if the division engineer remands
the decision to the district engineer, the district engineer may further analyze and
evaluate whatever issues are identified in the remand order….” [57] at 32.
According to the Corps, “[t]his is precisely what happened here.” Id. at 31.
An administrative appeal “is limited to the information contained in the
administrative record” as of the date of the Notification of Appeal Process. 33 C.F.R.
§ 331.7(f). Once the administrative appeal is decided, however, the Division
Engineer may instruct the District Engineer on remand to reconsider the decision
where any part of it “was not supported by accurate or sufficient information, or

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analysis, in the administrative record.” Id. § 331.9(b). The Division Engineer may
also instruct the District Engineer “to further analyze or evaluate specific issues.”
Id. § 331.10(b).
Given that the regulations specifically allow the Division Engineer to require
the District Engineer to provide further analysis, it is reasonable to conclude that
the limitation on supplementing the administrative record applies only to the
Division Engineer on appeal and is not applicable to the District Engineer upon
remand. Therefore, the Corps’ interpretation of its regulations is reasonable and is
entitled to this Court’s deference. See Chase Bank USA v. McCoy, 562 U.S. 195, 208
(2011).
2.

The Remand Order

G&H argues next that the supplemental information violated the explicit
instructions of the Division Engineer in his remand order. The remand stated that
“[t]he AR [administrative record] is limited to information contained in the record
by March 29, 2012.” [30-1] at 50. This statement, however, refers to the record
reviewed during the administrative appeal itself.

The plain context of the

statement concerns the “information received during this appeal review and its
disposition.” Id. This reference constitutes a clear statement regarding the
information the Division Engineer had considered during his review of the appeal,
not an instruction prohibiting the District Engineer from supplementing the record
during his further analysis upon remand.

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This understanding remains consistent with the Corps’ interpretation of the
process required by its own regulations: the Division Engineer may not go beyond
the administrative record when reviewing the District Engineer’s decision on
appeal, but it may instruct the District Engineer to provide further analysis on
remand. That is exactly what occurred in this instance.
3.

The Administrative Procedure Act

Finally, G&H argues that including the supplemental information was
inconsistent with the APA. Judicial review of a final agency decision under the
APA is based upon consideration of “the whole record or those parts of it cited by a
party….” 5 U.S.C. § 706. The “whole record” consists of the record that was “before
the agency” at the time of the final agency decision at issue. Citizens to Preserve
Overton Park v. Volpe, 401 U.S. 402, 420 (1971). The Corps’ final agency decision
here is “the district engineer’s decision made pursuant to the division engineer’s
remand of the appealed action.” 33 C.F.R. § 331.10(b). Here, that means the July
2013 jurisdictional determination issued by the District Engineer pursuant to the
May 2013 remand from the Division Engineer. The supplemental information in
dispute here was included in the administrative record and provided part of the
basis for the July 2013 reviewable final agency decision, consistent with the APA.
For all of these reasons, the Court rejects G&H’s arguments concerning the
propriety of the eleven-page document and denies G&H’s motion to strike.

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B.

Significant Nexus

Having determined that the eleven-page document is properly part of the
record on review, this Court turns to the merits of the case. At least in this Circuit,
establishing CWA jurisdiction under Rapanos requires showing the “existence of a
significant nexus between the wetlands in question and navigable waters in the
traditional sense.” 547 U.S. 715, 779 (2006) (Kennedy, J., concurring). A significant
nexus exists “if the wetlands, either alone or in combination with similarly situated
lands in the region, significantly affect the chemical, physical, and biological
integrity of other covered waters more readily understood as ‘navigable.’” Id.
Conversely, no significant nexus exists (and consequently no jurisdiction may be
established under the CWA) if the wetlands in question have only a “speculative or
insubstantial” impact on traditional navigable waters. Id.
As previously noted, agency decisions are entitled to significant judicial
deference, particularly when they involve scientific and technical determinations
within that agency’s field of expertise. See Indiana v. EPA, 796 F.3d 803, 811 (7th
Cir. 2015). This case involves such determinations. The Corps’ empirical scientific
findings conclude that the thirteen acres of wetlands on the Warmke Parcel
significantly affect the physical, chemical, and biological integrity of the Little
Calumet River, and thus establish the requisite significant nexus to that traditional
navigable water. See [30-1] at 11-46. Based upon the findings identified below, this
conclusion is a reasonable one, it is neither speculative nor insubstantial, and it is
entitled to the deference of this Court. Therefore, the Corps has established a

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significant nexus between the Warmke Parcel and the Little Calumet River
sufficient to assert jurisdiction under the CWA.
1.

Physical Impact

The Corps’ findings conclude that the wetlands on the Warmke Parcel do
significantly affect the physical integrity of the Little Calumet River because they
considerably reduce peak flows, thereby helping prevent flooding downstream
surrounding the River. The wetlands and dense vegetation on the Warmke Parcel
provide “stormwater storage.” Id. at 23. This water storage “function helps reduce
the frequency and extent of downstream flooding and reduces downstream bank
erosion and sedimentation in Midlothian Creek and the Little Calumet River.” Id.
Concerns already exist concerning flooding problems in the Midlothian Creek
watershed, particularly given the expectation of extensive urban development over
the next decade and the corresponding increase of impervious surfaces. Id. at 38.
Midlothian Creek is a major source of floodwaters to the navigable Little Calumet
River, where flooding annually causes millions of dollars of damage. Id. The area
has been identified by the Metropolitan Water Reclamation District of Greater
Chicago as a priority for new flood-control projects because “[h]undreds of
structures and multiple roadways in this watershed are threatened by flood waters
on an annual basis.” Id. The Corps itself is close to completing a $270 million flood
control project on the Little Calumet River just over the Illinois border in Lake
County, Indiana. Id.

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In reaching its conclusion about the physical impact of the Warmke Parcel
wetlands on the Little Calumet River, the Corps considered the “size, topography,
roughness of the wetland surface, and location in the watershed.” Id. Out of 165
wetlands in the watershed, the Warmke Parcel contains the fourth largest emergent
wetland, which makes it one of the largest “flood storage and velocity reduction
contributions to downstream waters.” Id. Furthermore, the Corps noted that dense
vegetation on the site and the slope of the topography increase the residence time of
stormwater and reduces “the likelihood of flood and erosion damage downstream by
detaining and slowly releasing storm flows.” Id. at 39.
2.

Chemical Impact

The Corps also determined that the wetlands on the Warmke Parcel have a
significant chemical impact on the traditionally navigable Little Calumet River
because they filter, slow, and retain pollutants that would otherwise flow to the
River. Id. at 40. Of particular concern here is the wetlands’ capacity to reduce
nitrogen pollution, which “has been associated with lower quality stream habitats in
northeastern Illinois, including Midlothian Creek.” Id. Wetlands have been
identified as effective filters with the potential to remove seventy-seven percent of
onsite nitrogen. Id. at 41. The Corps estimates that without the aggregated
wetlands in the watershed, twenty-seven to fifty-one percent more nitrogen would
“enter and adversely affect Midlothian Creek, which in turn would pollute the
navigable Little Calumet River.” Id. The Warmke Parcel has been identified as

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particularly crucial to the water quality of navigable waters because there are no
other wetlands located between it and the Midlothian Creek.
3.

Biological Impact

Finally, the Corps concluded that the wetlands significantly affect the
biological integrity of traditionally navigable waters because the aggregation of
wetlands in the Midlothian Creek watershed “has a significant effect on wildlife
within the watershed and wildlife located downstream in the Little Calumet River.”
Id. at 42. This conclusion is based upon the finding that numerous species of fish
and wildlife utilize the Warmke Parcel, Midlothian Creek, and the Little Calumet
River for different phases of their lifecycle. Thus, disturbing wetlands on the
Warmke Parcel would affect wildlife in the navigable Little Calumet River by
removing a portion of their upstream habitat. Id. at 43.
Because the Warmke Parcel wetlands “alone or in combination with similarly
situated lands in the region, significantly affect the chemical, physical, and
biological integrity of other covered waters more readily understood as ‘navigable,’”
the Corps’ “significant nexus” determination and attendant assertion of jurisdiction
were reasonable.
C.

Prior Converted Cropland Exemption

G&H also argues that its property does not fall within the regulatory
jurisdiction of the CWA—even if a significant nexus is established under Rapanos—
because it is exempted as prior converted cropland.

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The Corps does not dispute that the property in question was “converted from
wetland to agricultural use before December 23, 1985, and for that reason would
likely be considered PC [prior converted] cropland….” Record [30-1] at 13. But the
Corps determined that the prior converted cropland exemption does not apply
where agricultural activities have been abandoned, as they were here. Id. G&H
argues that the abandonment limitation does not apply; it also argues that
agricultural activities were not abandoned for purposes of this limitation.
1.

Regulatory Overview

An understanding of the development of regulatory overlap between different
agencies is necessary to understand the arguments surrounding the prior converted
cropland issue. Three federal agencies regulate wetlands: (1) the Corps; (2) the
Environmental Protection Agency (“EPA”); and (3) the National Resources
Conservation Service (“NRCS”), formerly known as the Soil Conservation Service
(“SCS”) and part of the United States Department of Agriculture (“USDA”). The
Corps determines whether particular property contains regulatory wetlands under
the CWA and issues permits allowing permittees to discharge dredged or fill
materials into such property. 33 C.F.R. §320.1(a)(6). The EPA aids the Corps by
providing criteria to evaluate permit applications and has joint authority with the
Corps to enforce the CWA. 33 U.S.C. § 1344(b). Finally, the NRCS has authority to
determine whether wetlands exist on a given property for the purpose of federal
agricultural financial benefits under the “Swampbuster” provisions of the Food
Security Act. 16 U.S.C. § 3821.

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The Food Security Act’s Swampbuster program was adopted to discourage
farmers from converting wetlands into farming operations. It does so by denying
eligibility for federal farm program benefits when wetlands are used for farming. 16
U.S.C. § 3821(a). Exempt from such penalties, however, are “prior converted
croplands”—wetlands that were converted to agricultural use prior to December 23,
1985. 16 U.S.C. §3822; 7 C.F.R. § 12.2(a)(8). The NRCS regulations limited the prior
converted cropland exemption, however, by incorporating an abandonment
provision. Under this limitation, prior converted cropland loses its exemption if
abandoned. The regulations define abandonment as “the cessation for five
consecutive years of management or maintenance operations related to the use of a
farmed wetland or farmed-wetland pasture.” 7 C.F.R. § 12.33(c).
Because of differing standards among the three agencies, farmers often found
it difficult to comply with all three sets of regulations. Thus in 1993, in an effort to
provide consistency between the three agencies, the Corps and EPA jointly adopted
a rule implementing the NRCS’s prior converted cropland exemption for purposes of
the CWA. 33 C.F.R. § 328.3(b)(2). This general regulation, however, contained no
specific reference to the relevant abandonment limitation recognized by the NRCS,
and the Corps and EPA never expressly published the abandonment limitation
within the Code of Federal Regulations.

Nevertheless, the Corps and EPA did

explain in the Federal Register itself that they will “use the [NRCS] provisions on
‘abandonment,’ thereby ensuring that PC [prior converted] cropland that is
abandoned within the meaning of those provisions and which exhibit wetlands

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characteristics will be considered wetlands subject to [CWA] regulation.” 58 Fed.
Reg. 45008, 45034 (Aug. 25, 1993). The purpose of this regulatory decision was to
provide uniformity between the agencies and “a mechanism for ‘recapturing’ into
[CWA] jurisdiction those PC croplands that revert back to wetlands where the PC
cropland has been abandoned.” Id. The definition of abandonment for purposes of
the CWA is, therefore, specifically contained within the definition set forth by the
NRCS.
In Huntress v. U.S. Dep’t of Justice, No. 12-CV-1146S, 2013 WL 2297076, at
*10 (W.D.N.Y. May 24, 2013), the court was asked to determine, among other
issues, whether the CWA’s exemption of “prior-converted croplands” included the
abandonment provision. The court held that it did:
Lands that qualify as prior-converted croplands, or wetlands converted
to farming prior to December 23, 1985, are categorically excluded from
the definition of “waters of the United States” and are therefore beyond
the jurisdiction of the CWA. 40 C.F.R. § 230.3(s), 33 C.F.R. § 328.3(a)
(8); see 7 C.F.R. § 12.2. . . . But the implementing regulations also
provide that such a designation can be lost if the land is not used for
farming purposes for five consecutive years. As explained in the
relevant Federal Register preamble, the EPA and Corps excluded
prior-converted croplands “to ensure consistency in the way various
federal agencies are regulating wetlands.” 58 Fed.Reg. 45008, 45034
(August 25, 1993). In this vein, the agencies used the abandonment
provisions set out by the Soil Conservation Service—an arm of the
United States Department of Agriculture (“USDA”) that is now called
the National Resources Conservation Service—and applied them to the
CWA. Id. Specifically, the Register provides:
The Corps and EPA will use the S[oil] C[onservation]
S[ervice] provisions on “abandonment,” thereby ensuring
that P[rior] C[onverted] cropland that is abandoned
within the meaning of those provisions and which exhibit
wetlands characteristics will be considered wetlands
subject to Section 404 regulation.... In particular, P[rior]
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C[onverted] cropland which now meets wetland criteria is
considered to be abandoned unless: For once in every five
years the area has been used for the production of an
agricultural commodity, or the area has been used and
will continue to be used for the production of an
agricultural commodity in a commonly used rotation with
aquaculture, grasses, legumes or pasture production.
Huntress, 2013 WL 2297076, at *10 (quoting 58 Fed.Reg. 45008, 45034 (August 25,
1993)). The court concluded that “under both the National Resources Conservation
Service’s and the EPA’s regulations, when land has been abandoned for a
continuous five-year period, . . . it loses any prior exemption from the CWA that it
may have once had.” Id. at *11.
Although not binding, this Court finds that the reasoning in Huntress is
sound, and therefore agrees that the regulations must be read within context. Here,
properly reading the preamble and the regulation together, the regulatory language
confirms that the prior converted cropland exemption may be lost if agricultural
activities are abandoned. Indeed, Plaintiff could provide no contrary authority to
support its argument that the CWA incorporated the Food Security Act’s prior
converted cropland exemption but without any abandonment provision. Besides
Huntress, the only other case to consider the issue came out the same way. See
United States v. Righter, No. 1:08-CV-0670, 2010 WL 2640189, at *2 & n.4. (M.D.
Pa. June 30, 2010) (defining “prior converted cropland” to include the abandonment
provision because, according to “agency rule, ‘[t]he Corps and EPA will use the SCS
provisions on ‘abandonment,’” citing the preamble). Accordingly, the Court rejects

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G&H’s argument that under the CWA, prior converted cropland, once designated,
may not lose that designation through abandonment.
2.

Abandonment Analysis

The record here establishes that the specific thirteen-acre portion of the
Warmke Parcel in question has not been farmed since 1996, and that wetland
conditions have returned. Record [30-1] at 90. Indeed, there is no evidence that
agricultural activities continued on that property after that date. As a result, the
abandonment requirement is satisfied. 7 C.F.R. § 12.33(c). G&H argues, however,
that the prior converted cropland in question is not abandoned because “major
portions of the Warmke Parcel continue to be farmed.” [40] at 20. Specifically, G&H
argues that abandonment has not occurred because farming elsewhere on the onehundred-acre parcel (where the Corps has never attempted to assert jurisdiction)
preserves the prior converted cropland status of the thirteen acres of wetlands.
This Court disagrees.
The abandonment rule is directed toward wetlands individually. It does not
consider or effect activities on adjacent property. The documented purpose for
adopting the abandonment rule was to bring within CWA jurisdiction prior
converted croplands “that revert back to wetlands where the PC cropland has been
abandoned.” 58 Fed. Reg. 45008, 45034 (Aug. 25, 1993). Such is the case here. The
Corps has not attempted to argue abandonment or assert jurisdiction over other
portions of the property that continue to be farmed. Instead, it asserts jurisdiction
only over a thirteen-acre portion of the property where farming activities have

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ceased for considerably more than five years and where wetland conditions have
returned.
3.

Artificial Wetlands and Conversion under 7 C.F.R. § 12.5(b)(1)

G&H makes two other arguments in opposition to federal jurisdiction. First,
G&H argues that the Corps’ assertion of jurisdiction is improper because the
thirteen acres are “artificial wetlands” under 7 C.F.R. § 12.2(a). An “artificial
wetland” is a “wetland that is temporarily or incidentally created as a result of
adjacent development activity”; unlike true wetlands, artificial wetlands do not lose
their prior converted cropland status even if farming is abandoned. Id. §§ 12.2(a),
12.5(b)(1)(vii).

G&H argues its property is an artificial wetland because the

wetland conditions on the thirteen acres were caused solely by a damaged drainage
tile associated with construction on the property, which caused water pooling at the
site. [40] at 21.
G&H also argues that the Swampbuster abandonment provision does not
apply if the property has been converted to “a purpose that does not make the
production of an agricultural commodity possible, such as . . . building and road
construction. . . .” [40] at 20; 7 C.F.R. § 12.5(b)(1)(iv). This conversion provision
applies to the property here, G&H argues, because it “was converted to a purpose
inconsistent with the production of an agricultural commodity when it was graded
and clay was compacted for housing construction,” making farming impossible. [40]
at 20-21.

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As a threshold matter, the Corps responds that G&H waived this latter
argument about the exemptions in §§ 12.5(b)(1) by failing to raise it in any of its
administrative appeals. It is well established, however, that “[o]nce a federal claim
is properly presented, a party can make any argument in support of that claim;
parties are not limited to the precise arguments they made below.” Yee v. City of
Escondido, 503 U.S. 519, 534 (1992). Although G&H may not have raised this
particular argument during its administrative proceedings, it repeatedly argued
that the property did not lose its prior converted cropland status. Therefore, G&H
did not waive any arguments in support of that claim, including the § 12.5(b)(1)
exemption claims. Accordingly, this Court will address the merits of G&H’s
arguments.
First, the structure of § 12.5(b) indicates that the prior converted cropland
exemption is distinct from the artificial wetland and building conversion provisions.
G&H treats all three provisions as applicable to the Corps’ ability to exert
jurisdiction over its property, but fails to note that the three provisions are
substantively and structurally distinct. Each is one of seven independent
limitations concerning when a person “shall not be determined ineligible for [farm]
program benefits” under the Food Security Act.

When it adopted the prior

converted cropland exemption and the related abandonment provisions in 1993, the
Corps did not adopt the artificial wetland and building conversion provisions. In
fact, those provisions were the result of later amendments made in 1996; fully three
years after the Corps adopted the NRCS definitions. As such, it does not follow

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automatically that because in one instance the Corps adopted NRCS’s prior
converted cropland exclusion that it, therefore, adopted lock-step inclusion of all
future provisions subsequently issued by the NRCS relating to how farmland might
be used without losing farm program benefits.

G&H treats these separate

provisions as synonymous with the prior converted cropland provisions, but they are
not synonymous.
Second, even if the artificial wetland and building conversion provisions were
relevant to G&H’s prior converted cropland abandonment issue, the applicability of
both of those provisions must be based upon a predicate determination by NRCS.
No such determination, however, occurred here.

The NRCS never issued a

determination that the thirteen acres are artificial wetlands or that they had been
converted for a building purpose that made farming impossible. In response, G&H
simply maintains that the necessity of a prior determination from NRCS, as the
text requires, is “nonsensical” because NRCS only makes such findings for farmers
in consideration of farm subsidies, not residential developers such as G&H. Doc. 61
at 14-15.

But this plain language interpretation of the regulation is only

“nonsensical” because G&H seeks to misapply these provisions in the context of the
CWA, which never adopted or incorporated them.
G&H’s statutory construction arguments are internally inconsistent. On the
one hand, G&H argues that if the Corps elected to adopt provisions from the Food
Security Act, it must adopt them in their entirety for all time (i.e., if you adopt the
Prior Converted Cropland exemption, you must also adopt the subsequent artificial

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wetlands and building and construction exemptions). On the other hand, it is also
arguing that, even though the CWA incorporates the artificial wetlands and
building and construction exemptions, it does not incorporate the specific
prerequisites for those exemptions (e.g., the express foundational determinations by
the NRCS). G&H cannot have it both ways.
Fundamentally, simply because the EPA adopted one exemption from the
Food Security Act does not mean that all exemptions apply. Indeed, as the court in
Huntress noted, “the regulations implementing the CWA recognize this and caution
that, although the EPA fashioned a rule identical to that of the USDA, the EPA
retains ‘ultimate statutory responsibility for determining the scope of CWA
jurisdiction.’” Huntress, 2013 WL 2297076, at *12 (quoting 58 Fed.Reg. 45008–01,
45033); see also, 33 C.F.R. § 328.3(a)(8) (“[F]or the purposes of the Clean Water Act,
the final authority regarding Clean Water Act jurisdiction remains with EPA.”).
Thus, based upon the reasons discussed above, the thirteen acres of wetlands
on the Warmke Parcel do not qualify for the prior converted cropland exemption.
Furthermore, the artificial wetlands and building conversion exemptions outlined in
7 C.F.R. § 12.5(b)(1) do not apply here because those exemptions are not relevant to
jurisdictional determinations under the CWA.
CONCLUSION
For the reasons stated herein, this Court denies Plaintiff’s motion to strike
[32], denies Plaintiff’s motion for summary judgment [40], and grants Defendant’s

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cross motion for summary judgment [55]. The Clerk is directed to enter judgment
in favor of Defendant and against Plaintiff.
Dated: September 19, 2017

ENTERED:

____________________________
John Robert Blakey
United States District Judge

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