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U.S. Department of Transportation
Federal Highway Administration
Subject: Legal Analysis of New Supreme Court Case on Wetlands, Solid Waste
Agency of Northern Cook County v. US Army Corps of Engineers, No. 99-1178

Date: February 8, 2001

From: Acting Chief Counsel

Reply to: HCC-30

To: Ms. Cynthia J. Burbank
Program Manager
Planning and Environment (HEP-1)

The recent Supreme Court case on wetlands, Solid Waste Agency of Northern Cook County v. US Army Corps of Engineers, (SWANCC) No. 99-1178, (decided January 9) deals with a relatively narrow issue: whether an abandoned gravel pit was subject to the Clean Water Act's (CWA) regulations. A memorandum issued ten days later by the Corps of Engineers (COE) and the Environmental Protection Agency (EPA) initially interprets the SWANCC decision to be applicable to relatively few wetlands. The COE/EPA memorandum will be discussed below after a brief analysis of SWANCC. We understand that more formal guidance regarding this decision is still being developed.

In SWANCC, the Supreme Court found that the regulations promulgated by the COE impermissibly extended the CWA's reach to include a gravel pit pond because the pond was a habitat for migratory birds. The lawsuit was filed by the Solid Waste Agency of Northern Cook County, a group of 23 Chicago cities and villages seeking the use of the abandoned gravel pit as a disposal site for nonhazardous waste, against the COE for requiring a 404 permit for the site.

Section 404(a) of the CWA, codified at 33 U.S.C. §1344(a), regulates the discharge of dredged or fill material into "navigable waters." The CWA authorizes the COE to issue permits allowing discharge of dredged or fill materials into "navigable waters" which are defined as "waters of the United States." 33 U.S.C. §1362(7). The COE's regulations define such waters to include intrastate waters, "the use, degradation or destruction of which could affect interstate or foreign commerce," 33 CFR §328.3(a)(3). In 1986, the COE attempted to clarify its jurisdiction, stating, in what has been dubbed the "Migratory Bird Rule," that §404(a) extends to intrastate waters that, inter alia, provide habitat for migratory birds.

The Supreme Court found it improper that the COE interpreted the CWA to define an abandoned, intrastate gravel pit, isolated from any "waters of the United States," as a jurisdictional wetland under its "Migratory Bird Rule." The Supreme Court held that the Migratory Bird Rule was an overreaching by the Corps to extend its authority under the CWA to isolated, intrastate wetlands when Congress's intent to do so was not clear. The Court noted that the COE's Migratory Bird Rule raised significant constitutional and federalism questions that the Court avoided by ruling on the issue of statutory interpretation. The Court held that the COE exceeded the authority granted to it under §404(a) of the CWA when it promulgated and applied the Migratory Bird Rule to the gravel pit at issue.

On January 19, the EPA and the COE issued a joint guidance memorandum on the Supreme Court ruling. The COE is the agency charged with enforcing the CWA and the EPA has a veto authority on wetland decisions, so their views carry special weight. The memorandum very narrowly construes the reach of the Supreme Court's January 9 decision. Only "nonnavigable, isolated and intrastate" waters or wetlands are clearly exempt from the CWA if the sole basis for the COE claiming such authority is the fact that migratory birds use them for habitat. If there is some other reason aside from migratory bird use, even isolated, intrastate wetlands might still be under section 404 of the CWA. For example, if the degradation or destruction of an isolated wetland can somehow affect other "waters of the United States" or interstate or foreign commerce, the COE might claim that the isolated wetland is still under the CWA. The COE's Assistant Chief Counsel for Environmental Law and Regulatory Programs, Lance Wood, said in a January 29 telephone conversation that the main non-jurisdictional wetlands that the COE is concerned about are the playa lakes in the Southwest, the vernal pools in California, and the prairie potholes in the upper Midwest. He thought that nearly all wetlands encountered by highway projects would be jurisdictional ones.

The effect of the SWANCC decision on the Federal Highway Administration (FHWA) will probably not be that great. The COE and the EPA are interpreting SWANCC very narrowly, so proposed highway projects will encounter few nonjurisdictional wetlands. For the few wetlands not governed by the CWA, the FHWA is still guided by its wetlands regulation at 23 CFR 777.31 , and Executive Order 11990, which direct federal agencies to avoid new construction in wetlands unless there is no practicable alternative. There is no distinction made between wetlands under the jurisdiction of the COE and isolated, intrastate wetlands. Those determinations are reviewable under an "arbitrary and capricious standard" of the Administrative Procedure Act. See City of Carmel-by-the-Sea v. US DOT, 123 F.3d 1142, 1166 (9th Cir. 1997).

For the State DOTs themselves, the SWANCC decision will probably not greatly change their project development process. Many States have their own wetlands laws, which the new Supreme Court decision will not affect. To protect themselves from liability under the federal CWA, the States should operate their project development processes essentially the same regarding wetlands. Early in the environmental documentation process, the State DOT should alert the COE about any wetlands in the project area and specifically list which ones they believe are not covered by the CWA. If the COE agrees, it could concur in writing, and the State has protected itself. If the COE does not agree, or worse, if the State does not seek early concurrence and the COE later maintains that the wetlands fall under its jurisdiction, the project could get bogged down in court. Because wetlands are not under the FHWA's authority, we could not overrule the COE or EPA in the dispute. The State would be compelled to shoulder its own defense while the FHWA waited for a resolution before agreeing to fund the project. If the COE agrees that the wetland is not under its jurisdiction, the FHWA must then determine if there is a practicable alternative to using the wetland. If not, the FHWA must then determine that all practicable mitigation to the wetland is considered and ultimately implemented.

In summary, while the new Supreme Court decision affects the COE and EPA's authority to administer the 404 permit program, its effect upon the FHWA and the State DOTs is not clear. In general, because the number of wetlands no longer under the COE's authority will probably not be that great, the effect upon FHWA and the State DOTS should not be great. Only in the case of isolated intrastate wetlands, such as prairie potholes, will the approach to wetland impacts be different. In these few cases, the FHWA will be forced into a decisionmaking role under EO 11990.

If you have any legal questions or would like further information, including copies of the SWANCC decision or the COE/EPA guidance, please contact Robert Black of my staff at (202)366-1359.


Edward V. A. Kussy

1The newly amended part 777 was to become effective January 29, 2001, but its effective date has been suspended for at least 60 more days. The newly amended FHWA wetland regulations do not substantively change the duty to avoid or mitigate highway impacts.