Clean Water Act – Compliance Orders and “Normal Farming Activities”

Overview

Section 404 of the Clean Water Act (makes illegal the discharging of dredge or fill material into the “navigable waters of the United States” without obtaining a permit from the Secretary of the Army acting through the Corps of Engineers (COE). But, over the years, the Environmental Protection Agency (EPA) has used compliance orders to stymie the issuance of Section 404 permits.  Another aspect of Section 404 permitting is the exemption for “normal farming activities.” 

EPA compliance orders and “normal farming activities” – they are the topics of today’s post.

EPA Compliance Orders

As noted above, the EPA has issued "compliance orders" to landowners and other parties when it believes that the land in issue contains wetlands subject to its jurisdictional control. The issuance of a compliance order has the effect of freezing the affected party in place until a Section 404 permit is obtained. EPA has also taken the position that such orders do not give the affected party the right to a hearing or the ability to obtain judicial review because (in EPA's view) such orders are not "final agency action" that carries appeal rights with it. However, in Sackett v. United States Environmental Protection Agency, 566 U.S. 120 (2012), rev'g., 622 F.3d 1139 (9th Cir. 2010), a unanimous Supreme Court held that the CWA does not preclude pre-enforcement judicial review of EPA administrative compliance orders. Preclusion, the Court held, would violate constitutional due process requirements.  

Under the facts of Sackett, the plaintiff had filled-in approximately one-half acre of their property with dirt and rock in preparation to build a house.  The EPA issued a compliance order alleging that the parcel contained a wetland subject to the CWA permit requirements. The plaintiff sought a hearing with the EPA to challenge the finding, but EPA did not grant a hearing.   The EPA continued to assert jurisdiction and the plaintiff sued in federal district court seeking injunctive and declaratory relief. The trial court granted the EPA's motion to dismiss for lack of subject matter jurisdiction because, according to the court, the CWA precludes judicial review of compliance orders before EPA starts enforcement action. The case was affirmed on appeal, but the U.S. Supreme Court reversed, noting that compliance order constitutes "final agency action" under the Administrative Procedure Act, and the landowners did not have an adequate remedy at law.

In 2015, the U.S. Court of Appeals for the Eighth Circuit held that a Corps of Engineers “preliminary determination” that the wetlands at issue on a tract that the owner sought to mine for peat had a “significant nexus” to a navigable river more than 100 miles away constituted a final agency action that could be appealed.  Hawkes Co., Inc., et al. v. United States Army Corps of Engineers, 782 F.3d 994 (8th Cir. 2015), rev’g., 963 F. Supp. 2d 868 (D. Minn. 2013), cert. granted, United States Army Corps of Engineers v. Hawkes, Co., Inc., 136 S. Ct. 615 (2015).  On further review, the U.S. Supreme Court unanimously affirmed. 136 S. Ct. 1807 (2016).  The Court noted that the memorandum of agreement between the EPA and the Corps established that jurisdictional determinations are “final actions” that represent the government’s position, are binding on the Government in any subsequent federal action or litigation involving the position taken in the jurisdictional determination. When the landowners received an “approved determination” that meant that the government had determined that jurisdictional waters were present on the property due to a “nexus” with the Red River of the North, located 120 miles away. As such, the landowners had the right to appeal in court after exhausting administrative remedies and the government’s position take in the jurisdictional determination was judicially reviewable. Not only did the jurisdictional determination constitute final agency action under the Administrative Procedure Act, it also determined rights or obligations from which legal consequences would flow. That made the determination judicially reviewable.

Exemption for “Normal Farming Activities”

An exemption from the CWA § 404 permit requirement exists for “normal farming activities” such as plowing, seeding, cultivating, minor drainage, harvesting, upland soil and water conservation projects, construction or maintenance of farm ponds, irrigation ditches, maintenance of drainage ditches and construction or maintenance of farm roads not otherwise impairing navigable waters.  33 U.S.C. § 1344(f)(1).  In general, COE regulations limit the exemption to pre-established  farming activities that do  not bring a new area into farming or require modifications to the  hydrological regime. 33 C.F.R. § 323.4(a)(1)(ii). In addition, the EPA, not the COE, is the final authority to decide the scope of the exemption. 43 Op. Att'y. Gen. 15 (1979).

In general, the courts have narrowly construed the exemption to those situations where the agricultural activity is extremely minimal and no additional areas of “navigable waters” are brought into use.  See, e.g., United States v. Huebner, 752 F.2d 1235 (7th Cir. 1985). As such, the exemption for agricultural activities applies only to prior established and continuing farming activities. For example, the conversion of wetlands to fish farming ponds has been held to constitute a new use that is ineligible for the “normal farming activities” exemption.  Also, filling to stabilize riverbanks and re-channel streambeds has been held not to fall within the scope of the exemption as normal ranching or upland soil and water conservation practices.

Exempt activities are subject to a “recapture” provision that requires a permit if a discharge changes the use of the waters, impairs the waters' flow or circulation, brings an area of navigable waters into a use to which it was not previously subject, or reduces the reach of the waters.   33 U.S.C. § 1344(f)(2).  Thus, only routine activities with relatively minor impacts on waters are exempt and the exemption will be lost if the activity is a new use and the activity reduces the reach or impairs the flow of water.  For  example, in United States v. Brace, 41 F.3d 117 (3d Cir. 1994), the court held that the “normal farming activity” exemption only applied to activities occurring on the particular site in question regardless of the relationship to the activities occurring on the remainder of the land. The site in issue adjoined cropland and was part of the same drainage system. In addition, the court held as irrelevant for CWA purposes a prior SCS classification of the drainage activities as a “commenced conversion.” The court also noted that even if the activities were held to be exempt, they would be subject to the recapture provision.

The same farming operation was still in court over a quarter of a century later over alleged wetland violations concerning their farming operations.  All of the litigation stems from not being able to use the “normal farming activity” exemption.  See United States v. Brace, No. 1:17-cv-00006 (BR), 2020 U.S. Dist. LEXIS 33423 (W.D. Pa. Feb. 27, 2020).

Conclusion

Farmers and ranchers have had to deal with the EPA and the COE for decades.  The Section 404 permitting requirement of the CWA can be a difficult issue for some farming operations.  However, it’s important to know that due process rights must be assured.  It’s also important to understand the scope of the “normal farming activities” exemption from the permit rules.  That can be a very useful exemption when needed.