The Role of EPA's Guidelines in the Clean Water Act § 404 Permit Program -- Judicial Interpretation and Administrative Application

The Role of EPA's Guidelines in the Clean Water Act § 404 Permit Program — Judicial Interpretation and Administrative Application

Lawrence R. Liebesman

Editors' Summary: Although the Army Corps of Engineers has the power to issue permits for discharge of dredge and fill materials under Clean Water Act § 404, the Act directs EPA to establish guidelines for the permit program. The role of those guidelines and their legal effect has been a topic of debate recently among both administrative reformers and litigants. This Article examines the genesis of the guidelines, the intragovernmental debate over their role, and their application by the courts. It particularly considers the settlement in National Wildlife Federation v. Marsh, in which the Corps agreed to promulgate regulations accepting the guidelines as binding. The Article concludes that though the settlement has resolved a major issue in the debate, questions about the meaning of particular guideline provisions and administrative authority to interpret the guidelines remain.

Mr. Liebesman is an attorney with the Environmental Defense Section, Land and Natural Resources Division, Department of Justice and has been actively involved in litigation under § 404 of the Clean Water Act. The views presented in this Article are solely those of the author and do not in any way reflect the views of the Department of Justice, EPA, Corps of Engineers, or any other federal agency.

[14 ELR 10272]

The Environmental Protection Agency's (EPA's) 404(b)(1) guidelines¹ have been at the center of the current debate on the Clean Water Act § 404 dredge and fill material permit program. Section 404(b)(1) directs EPA, in conjunction with the Army Corps of Engineers, to develop guidelines to govern the issuance of § 404 permits.² EPA has taken this responsibility very seriously, promulgating guidelines aimed at preserving wetlands, conserving wetland-dependent resources, and protecting water quality. Among other things, the guidelines raise a presumption against developing a wetland site if other alternatives are practical, particularly if the development is not "water dependent." EPA considers its guidelines binding on the Corps, which administers the permit program.

The precise effect of the EPA guidelines and the parallel provisions of the Corps' regulations on the Corps' permit review process has been the subject of intense discussion within EPA, the Corps, and the Office of Management and Budget (OMB) as well as the topic of several recent court decisions. This debate has especially addressed the issue of whether the "water dependency" test and the presumption against altering a wetland if feasible alternatives exist should take priority over the broad range of other factors that the Corps must consider in making permit decisions.

The Genesis of EPA's Guidelines

In 1972 Congress added § 404 to the Federal Water Pollution Control Act (FWPCA) to control pollution from discharges of dredge and fill material.³ Since the Corps had been regulating dredge and fill for years under the Rivers and Harbors Act,⁴ Congress gave the Corps authority to administer the 404 program. However, Congress directed EPA to develop guidelines for the program, in conjunction with the Corps.⁵ The guidelines were to be based on "criteria comparable" to the ocean discharge criteria set [14 ELR 10273] out in § 403.⁶ Nothing in § 404 clearly delineated the role of the guidelines or EPA's power to veto a permit if the discharge would have "an unacceptable adverse effect on municipal water supplies, shellfish beds and fishing areas …, wildlife, or recreation areas."⁷ The legislative history added little to the statute on this point. The most complete description of the permit-issuing process was Senator Muskie's statement during the debate on the conference report. Senator Muskie stated that "EPA must determine whether or not a site" would be acceptable "when judged against the criteria established."⁸ In effect, Congress split the authority to implement § 404 indefinitely between two agencies.

In its early years, the 404 program was shaped in three forums: before the Corps, the courts, and EPA.The role of the Corps and the courts has been well told elsewhere.⁹ Briefly, the Corps, through its regulations, first set narrow bounds for the 404 program. The courts, through judicial review, forced the Corps to expand the 404 program to cover all navigable waters, adjacent wetlands, and many isolated wetlands such as prairie potholes.¹⁰ The EPA guidelines encouraged the Corps to incorporate environmental goals in its permit program.

EPA first published the 404(b)(1) guidelines in interim final form on September 5, 1975 after consultation with the Corps.¹¹ The interim final guidelines set out general considerations and objectives intended to govern the permit process. These included avoiding discharges that disrupt the aquatic food chain and destroy significant wetlands, avoiding degradation of water quality,¹² and protecting fish and shellfish populations.¹³ For the first time, the regulations set forth a presumption that a permit not be granted for work in a wetland unless the "applicant clearly demonstrates" that the activity is "water dependent" or that "other site or construction alternatives are not practicable."¹⁴ The interim guidelines also set forth technical evaluation procedures for assessing the chemical, physical, and biological effects of disposal of dredge and fill material.¹⁵

In 1977, subsequent to that publication, Congress substantially amended the FWPCA through the Clean Water Act. The amended act established a procedure for transferring certain permit authorities to the states, exempted certain discharges from any § 404 permit requirements, and gave the Corps enforcement authority. But Congress did not change the basic outline of § 404, and thus, sub silentio, Congress endorsed the emerging implementation of the program.

From 1977 through 1980, the Corps and EPA moved to expand and flesh out a broad implementation of § 404. The Corps revised its permit regulations on July 19, 1977, in part, to provide specifically for protection of wetland systems and recognize the instances where wetlands would be destroyed for projects that were not "water dependent." The regulations also expanded the definition of "wetlands" to cover areas that are "inundated or saturated" by surface or groundwater with a prevalence of vegetation "typically adapted for life in saturated soil conditions."¹⁶ The Corps' regulations declared that "[w]etlands are vital areas that constitute a productive and valuable public resource, the unnecessary alteration or destruction of which should be discouraged as contrary to the public interest."¹⁷ They identified seven types of functions performed by wetlands that are "important to the public interest"¹⁸ and reiterated the presumption against filling in wetlands first identified in the 1975 interim EPA guidelines. The Corps' regulations stated that before a permit could be issued for an activity in wetlands, the district engineer had to find that (1) under the public interest review analysis, "the benefits of the proposed alteration outweigh the damage to the wetlands resource," and (2) "the proposed alteration is necessary to realize those benefits."¹⁹ In making this determination, [14 ELR 10274] the district engineer was required to consult closely with the Fish and Wildlife Service (FWS), the National Marine Fisheries Service (NMFS), the Soil Conservation Service, EPA, and the appropriate state agencies.²⁰ He also had to "consider whether the proposed activity is primarily dependent on being located in, or in close proximity to, the aquatic environment and whether feasible alternative sites are available."²¹ The regulations also placed a heavy burden on an applicant to provide information on the project's water dependency and also data that would allow evaluation of feasible alternative sites.

In light of these legislative, judicial, and regulatory developments, EPA undertook to revise and expand its 404(b)(1) guidelines. After proposal and extensive public comment, the guidelines were issued in final form on December 24, 1980.²² These final guidelines are a comprehensive product that reiterates the same "water dependency" test and "presumption against alteration of wetlands" found in the 1975 interim EPA guidelines and the 1977 Corps regulations.²³ In addition, EPA expanded these presumptions to cover "special aquatic sites" that include important fish and wildlife habitats, marine sanctuaries, and refuges as well as wetlands.²⁴ The guidelines state a fundamental policy that "the degradation or destruction of special aquatic sites … may represent an irreversible loss of valuable aquatic resources" and the precept that "dredged or fill material should not be discharged into the aquatic ecosystem, unless it can be demonstrated that such a discharge will not have an unacceptable adverse impact."²⁵ The guidelines then set forth expanded and detailed chemical, biological, and physical evaluations and testing procedures for judging the impact of dredged and fill material disposal on the aquatic ecosystem along with proposed actions that can be taken to minimize adverse effects.²⁶ Further, for the first time, EPA stated that the guidelines were clearly intended to be "binding" and "regulatory."²⁷ In EPA's view, Congress contemplated that discharges could be "prohibited" by the guidelines. In reaching this conclusion, EPA relied on congressional intent behind the § 403 ocean discharge criteria, which were the model for the 404(b)(1) guidelines.²⁸

The Effort to Reform the 404 Program

Until 1981, the central questions in the implementation of § 404 concerned the power of the government generally to regulate dredge and fill, not the power of individual agencies. The regulatory reform programs of the 1980s, aiming to streamline the 404 program, have focused attention on the role of EPA and its guidelines. In August 1981, the President's Task Force on Regulatory Relief targeted the 404 program for reform.²⁹ In response to the Task Force's charge and Executive Order 12291, which requires agencies to conduct a regulatory impact analysis of their major regulations, the Corps initiated several reforms of the 404 program. This reform effort raised the question of to what extent EPA's guidelines should be treated as binding and regulatory in nature, especially the guidelines' presumptions against discharges for a non-water-dependent project. The Corps chose not to directly confront this issue in its 1982 interim final regulations issued in July 1982.³⁰ The primary objectives of the interim final regulations were to expedite the permit-issuing process and expand the nationwide permit program. However, the issue of the 404(b)(1) guidelines came to a head in the spring and summer of 1983, resulting in exchange of correspondence and policy positions between EPA, the Assistant Secretary of the Army for Civil Works, and OMB.

In a March 1983 meeting of the Cabinet Council on Natural Resources and Environment, Acting EPA Administrator John Hernandez and Assistant Army Secretary William Gianelli disagreed over whether EPA's 404 guidelines were binding on the Corps or merely advisory.³¹ As a result of this meeting, Assistant Secretary Gianelli wrote Vice President Bush as Chairman of the Task Force on Regulatory Relief on March 23, 1983 asking that the EPA guidelines be reinterpreted as merely advisory and not regulatory.³² He cited the "delay, duplication and uncertainty" in requiring the application of the guidelines to the permit program. In Mr. Gianelli's view, the Corps could not effectively administer the 404 program and balance the numerous factors under the public interest review process if the permit applicant is required to comply with the guidelines in every instance. Further, such a requirement would "severely inhibit the agency's ability to adopt the program regionally and in individual cases to best serve the interests of the public."³³ Mr. Gianelli also noted that the guidelines were originally advisory when they were published in 1975 and were only made mandatory in December 1980. He stated that, as revised, the guidelines also "introduced policies and procedures which overlap and conflict with regulations of the Corps of Engineers and Council on Environmental Quality in the area of alternative analysis, consideration of economic and social factors and several other important concepts."³⁴

On March 22, 1983, Acting EPA Administrator Hernandez wrote Vice President Bush expressing concern that such a change would seriously undercut the level of environmental protection provided by the 404 program.³⁵ [14 ELR 10275] Dr. Hernandez noted that "EPA, not the Army," is "ultimately responsible for the environmental guidelines"³⁶ and cited EPA's consistent position of treating the guidelines as binding, substantive decisionmaking criteria. In particular, he argued that the proposed change would be inconsistent with the "better reading" of the Clean Water Act that the guidelines were intended to be regulations. In EPA's view, the use of the term "guidelines" does not make them advisory. The letter noted that "both the § 403(c) ocean discharge 'guidelines' and the § 304 effluent limitation 'guidelines' are in fact 'regulations.'" Turning to the express language of the Act, EPA noted that § 404(b)(2) states that the guidelines alone may "prohibit" the specification of a site, subject to an override based on the "economic impact of the site on navigation and anchorage."³⁷ In EPA's view, there would be no need for the navigational override if "the Army were free to treat the environmental guidelines as non-binding guidance."³⁸ In addition, EPA cited §§ 404(h) and 404(j), dealing with state 404 programs, which "require" states to have authority to "apply" and "assure compliance" with the Act, specifically including the guidelines and giving EPA veto authority for permits that are "outside the requirements" of the guidelines.³⁹ In EPA's judgment, Congress would not have given EPA such authority over approval of state programs and veto of state permits if the guidelines were to be nonbinding. Hernandez attached a legal opinion prepared by EPA's Office of General Counsel that supported his view.Concern about the Corps' effort to reform the interpretation of the guidelines was also expressed by Senator John Chafee in a March 1983 letter to Vice President Bush.⁴⁰

On June 14, 1983, Christopher DeMuth, OMB's Administrator for Information and Regulatory Affairs, wrote EPA Administrator William Ruckelshaus and Army Assistant Secretary Gianelli stating OMB's position on the EPA guidelines. In OMB's view, "the EPA guidelines should be treated as mandatory, but should be properly developed in conjunction with the Army and limited to the kinds of issues envisioned in § 404(b)."⁴¹ In describing this position, OMB indicated that the current EPA position on the guidelines was too expansive and was contrary to the express language and intent of Congress in enacting § 404.

The OMB opinion stated that while EPA's guidelines should be considered mandatory, § 404(b)(1) only applied to the "specification" of individual disposal sites and was not intended to be taken as "general advice." Thus, EPA's guidelines should not apply to the Army's administration of the entire permit program. Therefore, in OMB's view, the guidelines could set forth general parameters such as those relating to water quality but should not prescribe "the documentation requirements, scientific methodologies, procedures or kinds of mitigation" that the Army must follow in making individual permit decisions.⁴² Further, OMB reasoned, Congress would not have included the § 404(c) veto provisions for EPA if it contemplated that the guidelines were to be so "detailed" as to control the outcome of "a significant number of close cases."⁴³ Thus, the guidelines should be general enough to allow for a "genuine choice by Army engineers in individual cases … coupled with limited EPA veto authority on a case-by-case basis according to certain procedures and substantive standards." OMB then indicated that EPA's guidelines "go well beyond these limitations" by establishing too much detail as to such areas as "factual determinations, documentation requirements, testing methodologies and water quality criteria" that must be applied in individual permit cases.⁴⁴ Finally, OMB called for the Corps and EPA to work closely together, as expressly mandated in § 404(b)(1), in reforming the guidelines consistent with the scope and limitations set forth in its opinion.

During the time OMB was developing its position, William Ruckelshaus took over as the new EPA Administrator. In testimony before the Senate Environment and Public Works Subcommittee on Environmental Pollution on June 17, 1983, Mr. Ruckelshaus had the opportunity to address the issue of the EPA guidelines.⁴⁵ He noted that the Corps "now agrees that the use of the EPA criteria is mandatory" and "must be harmonized."⁴⁶ Ruckelshaus pledged to continue his dialogue with the Army regarding "mutually acceptable" revisions to the EPA guidelines. At that hearing, Senator Chafee also urged Ruckelshaus to work out a satisfactory agreement "without giving ground."⁴⁷

While the debate within the administration over the EPA guidelines was taking place, the Corps was also moving forward in its effort to comprehensively revise the 404 program. On May 12, 1983, the Corps issued even more extensive proposed revisions to the 404 program than were found in the 1982 interim final regulations. The new proposal undertook to substantially revise the entire program by omitting any reference to the EPA guidelines and reversing the presumption against discharge in wetlands.⁴⁸ The proposal also sought to revise the burden of proof on an applicant by stating "a permit will be granted unless its issuance is found to be contrary to the public interest."⁴⁹ EPA strongly objected to these changes as inconsistent with the purposes and goals of the Clean Water Act.⁵⁰ In particular, EPA objected to alteration of the burden of proof as possibly reversing the [14 ELR 10276] "protection of important public resources from the effects of incremental decisions being made by individuals" — a goal that the prior regulations and guidelines sought to achieve. EPA expressed fear that the change would "mislead applicants and undermine the Corps' ability to uphold permit conditioning and denials against legal challenges."⁵¹

Case Law

While the executive branch was considering the policy aspects of the 404 program, the courts were considering related questions against a legal background. Over the past two years, several decisions have come down construing the effect of compliance with the guidelines and the water dependency test in the permit review process as well as EPA's role in the 404 permit process. This case law is inconsistent on the extent to which the presumptions set forth in the guidelines and Corps' regulations must be followed in the permit process.

The first significant case dealing with these issues was the November 1982 Fifth Circuit opinion in Buttrey v. United States,⁵² where the court upheld the Corps' denial of a permit to a developer for a residential home tract near Slidell, Louisiana. The denial was based in large part on the finding that the project would not comply with the 404(b) guidelines. Emphasizing the goal of the Clean Water Act "to restore and maintain the chemical, physical and biological integrity of the Nation's waters,"⁵³ the court reviewed the language in the Corps' regulations and EPA guidelines on protecting wetlands resources and the fact that the Corps must begin its analysis with the presumption against destruction of wetlands, which it termed as "very strong."⁵⁴ It then addressed the heavy burden that Buttrey failed to meet, noting that Buttrey had "not even attempted to make the three showings required" under the regulations.⁵⁵ In short, the court held that the basic congressional and agency determination that "wetlands are vital areas that constitute a protective and valuable public resource"⁵⁶ could not be challenged by Buttrey.

In Hough v. Marsh,⁵⁷ decided 11 days after Buttrey, the United States District Court in Massachusetts addressed the effect of the water-dependency test in more detail. In Hough, the court overturned a decision to issue a permit for a residential development abutting Edgartown Harbor on Martha's Vineyard because the Corps had not adequately explained how the applicant had overcome the presumption set forth in the regulations. The district engineer had found that the project, although not "water dependent," was "nonetheless necessary because of the absence of feasible alternatives."⁵⁸ The court rejected the argument that "water dependency" was a prerequiste to the issuance of any permit. In doing so, the court noted that the regulations only required "consideration" of water-dependency and feasiblity factors and did not explicitly prohibit permit issuance for non-water-dependent activity.⁵⁹ However, citing the EPA guidelines, the court held that "a more persuasive showing than otherwise concerning the lack of alternatives" would be required for a non-water-dependent project.⁶⁰ In reviewing the record, the court held that the applicant had not met this burden, and the permit decision thus did not analyze the availability of suitable alternative sites in sufficient detail to overcome the presumption in the regulations. The permit was then remanded for fuller consideration.

Two months later, in January 1983, the Maryland United States District Court in Shoreline Associates v. Marsh⁶¹ upheld denial of a permit to fill wetlands in Ocean City, Maryland. Relying on Buttrey and the language in both the Corps' regulations and EPA guidelines, the court reviewed the record, finding that the Corps' conclusions on the value of the wetlands at issue were sound and based on site-specific scientific evidence. It then held that the Corps was "bound" to consider the EPA guidelines and that it had properly applied the guidelines in finding that Shoreline had non-water-dependent alternatives available for its planned townhouse community.⁶² In particular, the court held that the Corps committed no error under either the Administrative Procedure Act or the Clean Water Act in finding that "the proposed project was contrary to the [EPA] guidelines because the alternative available, elimination of wetland destruction, was more environmentally acceptable than the project as proposed."⁶³

In September 1983, the United States District Court for the Eastern District of Virginia came down with a ruling in direct contrast to these prior opinions. In 1902 Atlantic Ltd. v. Hudson,⁶⁴ the court overturned a permit denial for a non-water-dependent project, an industrial park planned for wetlands near the City of Chesapeake, Virginia. In doing so, it approached the Corps' permit review process obligations from an entirely different perspective. Instead of stressing the presumptions against altering wetlands and the need for wetlands protection, it emphasized the general balancing of all the public interest factors. The court delved into the legislative history of the 1977 amendments to the Clean Water Act, noting that Congress wanted to "curb" the "Corps" penchant for overregulation, particularly in cases of de minimus environmental concern."⁶⁵ As such, it held that the "balancing process" in the Corps' regulation "achieves these goals by directing that the defendant's decisions reflect not only national concern for the protection of important resources but reflect national concern for the utilization of resources as well."⁶⁶ Turning to the water-dependency test, the court cited Hough in holding that water dependency was "not a prerequisite to issuance of a permit …. [14 ELR 10277] Rather [it] is one more factor to be considered … in the general balancing process."⁶⁷ In doing so, the court concluded that for evaluating a permit application to alter wetlands, water dependency was neither a high priority nor a prerequisite.

With this interpretation in mind, the court examined numerous factors and found that the Corps had overestimated the environmental harm that would result from the project and failed to "indicate whether [it] considered the extent and permanence of such benefits as the additional jobs created by this project, the increased local tax base … the elimination of a safety hazard and eyesore, and the like."⁶⁸ In the court's view, the Corps' ultimate decision was not based on an accurate weighing of all these factors.

Most recently, in an October 1983 bench opinion, the United States District Court for New Jersey in National Audubon Society v. Hartz Mountain Development Corp.⁶⁹ upheld a permit issued to Hartz Mountain to fill 127 acres of wetlands for construction of a commercial complex in the Meadowlands section of northern New Jersey. In doing so, it held that sufficient evidence of the infeasibility of alternatives had been presented to overcome the presumption against discharge in a wetland for a non-water-dependent project. The court concluded that feasible alternatives were not available, rejecting as impractical other possible sites offering a less attractive marketing package to prospective purchasers. In doing so, the court stressed the economic goals of the applicant and upheld the reasonableness of the Corps' consideration of alternatives that were limited to the general area of the site selected by the applicant. The court then addressed the requirement of the EPA guidelines that all practicable steps be taken to minimize or mitigate adverse impacts on the aquatic ecosystem. Despite objections by EPA, FWS, and NMFS that Hartz Mountain had not provided for sufficient mitigation, the court held that Hartz's mitigation proposal was acceptable since it "substantially compensated" for the expected loss of wetland values.⁷⁰ The court clearly rejected the argument advanced by National Audubon that a project must attain 100 percent mitigation.⁷¹ Thus, the National Audubon opinion is significant in that it demonstrates a case where the presumption against discharge was overcome, especially where there were no economically viable alternatives and where the project incorporated substantial provisions to mitigate the loss of wetlands.

The National Wildlife Federation Suit

Judicial and administrative consideration of the 404 program came together in National Wildlife Federation v. Marsh (NWF),⁷² a suit challenging the Corps' July 1982 interim final revisions to the § 404 regulations. In a settlement of the suit, reached in February 1984, the Corps agreed to promulgate new regulations acknowledging the EPA guidelines as mandatory. The settlement expressly provides that "a permit application will be denied if the discharge … would not comply with the EPA § 404(b)(1) guidelines" and requires that the Corps' regulations be amended to so indicate.⁷³ It also requires that permits issued must add any special conditions that "are necessary to satisfy legal requirements, including compliance with the § 404(b)(1) guidelines."⁷⁴ Such conditions can include either off-site or on-site mitigation of significant losses "which are specifically identifiable and reasonably likely to occur, and of importance to the human or aquatic environment."⁷⁵ Further, the settlement specifically preserves the presumption against alteration of wetlands and states that once compliance with the guidelines is found, a permit will be issued unless "the district engineer determines that it would be contrary to the public interest."⁷⁶ On March 29, 1984, the Corps published proposed revisions to its 1982 interim final regulations specifically incorporating the provisions of the settlement.⁷⁷

The February 1984 NWF settlement preserves the existing structure, presumptions, and burden of proof found in the EPA guidelines and Corps regulations and clearly sets forth the requirement that the EPA guidelines must be complied with before a permit is issued. As such, the settlement does not invalidate the various interpretations of the guidelines in recent court decisions. The proposed regulations issued under the settlement still require the kind of very strong evidentiary showing that the Buttrey, Hough, and Shoreline Associates cases found was necessary to overcome the presumption against discharge in wetlands for non-water-dependent projects. Aside from the settlement's express incorporation of the guidelines, there is also a requirement to "give full consideration" to the views of the resource agencies such as FWS and NMFS.⁷⁸ This appears to lend further weight to the priority given wetlands resource values inherent in the EPA guidelines.

The settlement also should not significantly affect the interpretations set forth in 1902 Atlantic Ltd. and National Audubon Society. The 1902 Atlantic Ltd. approach was at odds with the thrust of the guidelines and the Corps regulations as they existed before the settlement in that the court did not give special consideration to preventing the loss of wetlands for a non-water-dependent project. The settlement's express requirement that the guidelines must be complied with simply makes 1902 Atlantic Ltd. appear further off base. In National Audubon, enough evidence was presented to rebut the presumption against alteration of wetlands. Therefore, the [14 ELR 10278] court did not go as far as 1902 Atlantic Ltd. in downplaying the importance of the presumptions in the EPA guidelines. Further, the court stressed the requirement that district engineers must look at numerous factors, especially economics and feasibility of alternatives, in evaluating whether a permit should issue. The NWF settlement certainly did not alter this "balancing" requirement nor did it transform the rebuttable presumption against discharge in wetlands to an irreversible presumption. In fact, the March 29, 1984 proposal in response to that settlement explicitly requires that "all factors which may be relevant to [a permit application] must be considered including the cumulative effects thereof."⁷⁹ However, the settlement also did not alter the paramount objective of protecting wetlands resources from unnecessary alteration.

At present, the future application of the EPA guidelines in the Corps' permit review process remains very much an open question. EPA and the Corps have not come up with proposals to streamline the technical aspects of the guidelines as suggested in the June 14, 1983 OMB letter. Further, while the recent NWF settlement appears to require compliance with the EPA guidelines, it by no means resolves the role of the guidelines in the permit review process. The NWF settlement makes clear that the district engineer "shall apply the guidelines" in making permit decisions.⁸⁰ It does not require the district engineer to defer to the judgment of EPA on compliance with the guidelines in a particular case. Thus, the settlement affirms the primary role of the district engineer in balancing all the public interest factors, including application of the guidelines.

Recently, the Corps issued a regulatory guidance letter that addresses the role of the district engineer in making determinations of compliance with the guidelines.⁸¹ As stated in that letter, district engineers must "submit and give full consideration to the views of EPA officials with respect to the environmental effects of the Corps' permit actions."⁸² However, it further states that "any EPA determinations of compliance with the § 404(b)(1) guidelines are to be considered advisory only."⁸³ Further, if EPA recommends a permit denial based upon noncompliance, the elevation provisions of the existing EPA-Corps memorandum of agreement must still be complied with.⁸⁴

This most recent Corps interpretation epitomizes the uncertainties that still surround application of the EPA guidelines. Clearly, Congress gave the Corps, not EPA, the authority to issue permits under § 404 but required application of the 404(b)(1) guidelines to be developed cooperatively between both agencies. EPA's only express veto power is found in § 404(c). In making permit decisions, the Corps also must apply numerous factors in its "public interest review process." Therefore, an EPA decision to oppose a project because of a noncompliance with the guidelines where the Corps has found it to be in "the public interest" would arguably be giving EPA an additional veto, which is not authorized under the Act. On the other hand, Congress clearly intended that the guidelines be developed by EPA "in conjunction with" the Secretary of the Army. Thus, the requirement for cooperation between the agencies in development of the guidelines arguably reflects congressional intent that any disagreements between the agencies on the guidelines' application in a particular case should be minimized.

Conclusion

The past several years have seen a flurry of activity within thevarious executive agencies and in the courts over the issue of EPA's 404(b)(1) guidelines. This debate has focused on the inherent tension in the application of both the "public interest review criteria" of the Corps' regulations and the guidelines' special protections for aquatic resources and wetlands.

The judicial decisions appear to diverge on the guidelines' role in the process. Buttrey and Shoreline Associates clearly emphasize the need to conform permit decisions to the resource values in the guidelines and place the burden of proof squarely on the permit applicant to overcome the presumption against discharge for a non-water-dependent project. Hough appears to take the same approach, although it clearly holds that "water dependency" is not a prerequisite to the issuance of a permit. 1902 Atlantic Ltd. and, to a lesser extent, National Audubon Society address the role of the guidelines from a completely different perspective. They emphasize the overall Corps balancing process, especially the economic benefits in a particular proposal.

Administratively, the importance of the guidelines in the permit review process has been reaffirmed by the recent settlement in the NWF v. Marsh case and the positions of OMB and EPA in the debate with the Corps on reform of the 404 program. At present, the presumption against alteration of wetlands and the requirement that the Corps determine compliance with the guidelines before a permit may be issued remain a part of the 404 program. However, the precise role of EPA's interpretation of the guidelines in the permit review process remains an open question since the NWF settlement gives the district engineer principal authority for determining compliance with the guidelines.⁸⁵

The debate has not ended over the role of EPA's guidelines. There will be those advocating greater emphasis in balancing energy and economic concerns with environmental concerns and those opposing it. However, unless Congress finds otherwise, the Clean Water Act's objective of "restoring and maintaining the chemical, physical and biological integrity of the Nation's waters"⁸⁶ must still be the guiding principle in any analysis of the role of the EPA guidelines in the 404 permit program.

1. 40 C.F.R. pt. 230, ELR REG. 46321.

2. (b) Subject to subsection (c) of this section, each such disposal site shall be specified for each such permit by the Secretary (1) through the application of guidelines developed by the Administrator, in conjunction with the Secretary, which guidelines shall be based upon criteria comparable to the criteria applicable to the territorial seas, the contiguous zone, and the ocean under section 1343(c) of this title, and (2) in any case where such guidelines under clause (1) alone would prohibit the specification of a site, through the application additionally of the economic impact of the site on navigation and anchorage.

Clean Water Act § 404(b), 33 U.S.C. § 1344(b), ELR STAT. 42142-43. The Clean Water Act appears at 33 U.S.C. §§ 1251-1376, ELR STAT. 42101.

3. 33 U.S.C. § 1342, ELR STAT. 42141.

4. 33 U.S.C. §§ 401-466n, ELR STAT. 41141.

5. 33 U.S.C. § 1344(b)(1), ELR STAT. 42142-45.

6. (c)(1) The Administrator shall, within one hundred and eighty days after October 18, 1972 (and from time to time thereafter), promulgate guidelines for determining the degradation of the waters of the territorial seas, the contiguous zone, and the oceans, which shall include:

(A) the effect of disposal of pollutants on human health or welfare, including but not limited to plankton, fish, shellfish, wildlife, shorelines, and beaches;

(B) the effect of disposal of pollutants on marine life including the transfer, concentration, and dispersal of pollutants or their by-products through biological, physical, and chemical processes; changes in marine ecosystem diversity, productivity, and stability; and species and community population changes; …

Clean Water Act § 403(c)(1), 33 U.S.C. § 1343(c)(1), ELR STAT. 42142.

7. (c) The Administrator is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and he is authorized to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site, whenever he determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas. Before making such determination, the Administrator shall consult with the Secretary. The Administrator shall set forth in writing and make public his findings and his reasons for making any determination under this subsection.

Clean Water Act § 404(c), 33 U.S.C. § 1344(c), ELR STAT. 42143.

EPA has only exercised its 404(c) authority once: In re North Miami Landfill Site, 11 ELR 30002 (EPA, Final Determination of the Administrator, Jan. 19, 1981).

8. Statement of Senator Muskie, CONGRESSIONAL RESEARCH SERVICE, 93D CONG., 1ST SESS., 1 LEGISLATIVE HISTORY OF THE FEDERAL WATER POLLUTION CONTROL ACT AMENDMENTS OF 1972 at 177 (Comm. Print 1973).

9. E.g., Comment, Section 404 Permit Program Survives Legal Challenges, Faces Congressional and Administrative Review, 11 ELR 10233, 10234-36 (1981).

10. See United States v. Ashland Oil & Transportation Co., 504 F.2d 1317, 4 ELR 20784 (6th Cir. 1974); United States v. P.F.Z. Properties, 393 F. Supp. 1370, 1381 (D.D.C. 1975); Natural Resources Defense Council, Inc. v. Callaway, 392 F. Supp. 658, 5 ELR 20285 (D.D.C. 1975); Leslie Salt Co. v. Froehlke, 403 F. Supp. 1292, 1296-97, 5 ELR 20039, 20040 (N.D. Cal. 1974), modified and rev'd in part, 578 F.2d 742, 8 ELR 20480 (9th Cir. 1978); United States v. Holland, 373 F. Supp. 665, 4 ELR 20710 (M.D. Fla. 1974).

11. 40 Fed. Reg. 41292-98 (1975).

12. Id. at 41295 (formerly codified at 40 C.F.R. § 230.5(a)).

13. Id. (formerly codified at 40 C.F.R. § 230.5(b)).

14. Id. at 41296 (formerly codified at 40 C.F.R. § 230.5(b)(8)(ii)).

15. Id. at 41294-95 (formerly codified at 40 C.F.R. § 230.4-1).

16. 33 C.F.R. § 323.2(c), ELR REG. 46380.

17. 42 Fed. Reg. 37136 (codified at 33 C.F.R. § 320.4(b)(1), ELR REG. 46371, as revised by 47 Fed. Reg. 31804 (1982)).

18. Id. (codified at 33 C.F.R. § 320.4(b)(2), ELR REG. 46371, as revised by 47 Fed. Reg. 31804 (1982)).

19. Id. at 37137 (codified at 33 C.F.R. § 320.4(b)(4), ELR REG. 46371, as revised by 47 Fed. Reg. 31804 (1982)).

20. Id. at 37136-37 (codified at 33 C.F.R. § 320.4(b)(3), ELR REG. 46371, as revised by 47 Fed. Reg. 31804 (1982)).

21. Id. at 37137 (codified at 33 C.F.R. § 320.4(b)(4), ELR REG. 46371, as revised by 47 Fed. Reg. 31804 (1982)).

22. 45 Fed. Reg. 85336-57 (1980).

23. 40 C.F.R. § 230.10, ELR REG. 46323.

24. 40 C.F.R. § 230.3, ELR REG. 46321.

25. 40 C.F.R. § 230.1(c) & (d), ELR REG. 46321.

26. 40 C.F.R. §§ 230.20-230.61, ELR REG. 46325-30.

27. 45 Fed. Reg. 85336 (1980).

28. Id.

29. See President's Task Force on Regulatory Relief, Administrative Reforms to the Regulatory Program Under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act (May 7, 1982).

30. 47 Fed. Reg. 31794 (1982) (codified at 33 C.F.R. pts. 320-330).

31. [13 Current Developments] ENV'T REP. (BNA) 2100 (Mar. 25, 1983).

32. Letter from William R. Gianelli, Assistant Secretary of the Army for Civil Works, to Vice President George Bush (Mar. 23, 1983), reported at [13 Current Developments] ENV'T REP. (BNA) 2100 (Mar. 25, 1983).

33. Id. at 2.

34. Id.

35. Letter from John W. Hernandez, Jr., Acting Administrator, EPA, to Vice President George Bush (Mar. 22, 1983), reprinted in [13 Current Developments] ENV'T REP. (BNA) 2172 (Mar. 25, 1984).

36. Id. at 2173.

37. Id.

38. Id.

39. Id.

40. Letter from Senator John Chafee to Vice President George Bush (Mar. 23, 1983), reported at [13 Current Developments] ENV'T REP. (BNA) 2182 (Apr. 1, 1983).

41. Memorandum from Christopher DeMuth, Administrator for Information and Regulatory Affairs, OMB, to William Ruckelshaus, Administrator, EPA, and William R. Gianelli, Assistant Secretary of the Army for Civil Works (June 14, 1983).

42. Id. at 2.

43. Id. at 2-3.

44. Id. at 3.

45. [14 Current Developments] ENV'T REP. (BNA) 251 (June 17, 1983).

46. Id.

47. Id.

48. 48 Fed. Reg. 21466-76 (1983).

49. Id. at 21469.

50. Letter from Pasquale A. Alberico, Acting Director, Office of Federal Activities, EPA, to Office of the Chief of Engineers (Aug. 31, 1983), reported at [14 Current Developments] ENV'T REP. (BNA) 868 (Sept. 16, 1983).

51. Id. at 3-4 of attached comments.

52. 690 F.2d 1170, 13 ELR 20085 (5th Cir. 1982).

53. Id. at 1180, 13 ELR at 20089.

54. Id.

55. Id. at 1183, 13 ELR at 20090.

56. Id. at 1180, 13 ELR at 20089.

57. 557 F. Supp. 74, 13 ELR 20610 (D. Mass. 1982).

58. Id. at 83, 13 ELR at 20614.

59. Id.

60. Id.

61. 555 F. Supp. 169, 13 ELR 20421 (D. Md. 1983), aff'd, 14 ELR 20269 (4th Cir. Jan. 10, 1984).

62. 555 F. Supp. at 179-80, 13 ELR at 20425-26.

63. Id. at 180, 13 ELR at 20426.

64. 574 F. Supp. 1381, 14 ELR 20023 (E.D. Va. 1983).

65. Id. at 1398 & n. 16, 14 ELR at 20030 & n. 16.

66. Id. (emphasis in original).

67. Id.

68. Id. at 1402, 14 ELR at 20032.

69. No. 83-1534 (D.N.J. Oct. 24, 1983).

70. Transcript at 81-82.

71. Indeed, neither the Clean Water Act nor the EPA guidelines require a minimum percentage of mitigation, see 33 U.S.C. § 1344, ELR STAT. 42142, and 40 C.F.R. § 230.10(d).

72. No. 82-3632 (D.D.C. complaint filed Dec. 22, 1982), ELR PEND. LIT 65775.

73. National Wildlife Federation v. Marsh, 14 ELR 20262, 20264 at P18 (D.D.C. Feb. 11, 1984).

74. Id. at P16.

75. Id.

76. Id. at P18.

77. 49 Fed. Reg. 12660-64 (1984). Also, the recent Fifth Circuit opinion in Avoyelles Sportsmen's League v. Marsh, 715 F.2d 897, 13 ELR 20942 (5th Cir. 1983), while not addressing the issue of the binding effect of EPA's guidelines, nevertheless lent support to EPA's role in determining the extent of 404 jurisdiction and application of the definition of "wetlands."

78. 49 Fed. Reg. 12662.

79. Id. at 12661.

80. Id.

81. Regulatory guidance letter from General C. E. Edgar III, Deputy Director of Civil Works, U.S. Army Corps of Engineers, to District Engineer (Mar. 26, 1984).

82. Id.

83. Id.

84. Id.

85. Recently Congress has been grappling with the question of whether the Clean Water Act should more specifically address the guidelines. See H.R. REP. NO. 827, 98th Cong., 2d Sess. 5 (1984).

86. Clean Water Act § 101(a), 33 U.S.C. § 1251(a), ELR STAT. 42105.