18 ELR 10479 | Environmental Law Reporter | copyright © 1988 | All rights reserved

EPA's Evolving Role in Wetlands Protection: Elaboration in Bersani v. U.S. EPA

Shannon J. Kilgore

Editors' Summary: Wetlands protection is at once one of the most important environmental needs as well as one in which the workings of federal environmental law are most intricate. Wetlands are fragile ecosystems that serve important roles in bringing together water, groundwater, soil, and the life that lives in and depends on this unique combination. The principal federal program to protect wetlands, § 404 of the Federal Water Pollution Control Act, is almost Jeffersonian in its elaborate checks and balances, with roles for permit applicants, public commenters, the Corps of Engineers, the Environmental Protection Agency, and ultimately the courts.

This Comment reviews the overall contours of the § 404 program, focusing on EPA's role and ways in which it can be improved within the structure Congress has established. The Comment then analyzes key recent litigation, Bersani v. U.S. EPA, generally. Bersani, together with authority under the statute and regulations, points the way for effective EPA participation to help protect these critical ecosystems.

[18 ELR 10479]

Important questions of law sometimes arise in cases that begin modestly. This has recently been true in a case addressing the breadth of the Environmental Protection Agency's (EPA's) involvement in wetlands protection under § 404 of the Federal Water Pollution Control Act (FWPCA).

In 1982, the Edward J. DeBartolo Corporation purchased a 50-acre wetland in South Attleboro, Massachusetts. Situated near sizeable population centers and Interstate 95, Sweedens Swamp is commercially promising. It is also valuable in its natural state, its red maples serving serving as habitat to a range of songbirds and small mammals and its water system providing flood protection and water purification functions.

DeBartolo began efforts to obtain the necessary state approval to build a shopping mall on the wetland.1 In December 1983, Sweedens Swamp was purchased by the Pyramid Companies, which pursued state approval2 and sought a dredge and fill permit from the Army Corps of Engineers under FWPCA § 404.3 The Corps' district engineer recommended denying the permit because alternate, non-wetland property in the area was also suitable for such non-water dependent development. Pyramid then proposed mitigation measures that would attempt to replace lost wildlife habitat by creating offsite artificial wetlands in an abandoned gravel pit. The district engineer's recommendation to deny the permit was overruled by the Corps' Washington headquarters on the grounds that the mitigation measures would diminish the adverse environmental consequences of developing Sweedens Swamp, and thereby eliminate the advantage of the non-wetland alternative. Moreover, the Corps' headquarters concluded that the alternate site was unavailable to Pyramid because an option on the property had been purchased by a competitor, and the site may in any event not be suitable for Pyramid's shopping center project. In addition, the Washington office deemed the wetland to be relatively unimportant since it had already suffered some degradation and its red maple songbird habitat is not unusual in that area of Massachusetts. The Corps announced that it would issue the permit, conditioned on Pyramid's implementation of mitigation measures.

EPA disagreed with the Corps' decision. Pursuant to its authority under FWPCA § 404(c),4 EPA vetoed the permit on the grounds that significant adverse effects on wildlife would result, and the availability of a non-wetland alternative helped to render those effects unacceptable, despite the proposed mitigation. Pyramid challenged the [18 ELR 10480] veto in court, and both the district court and the Second Circuit in Bersani v. United States Environmental Protection Agency5 upheld EPA's action.

In many ways, Sweedens Swamp is an "average" wetland; it is not the only one of its kind in the region, and while it makes important contributions to the local environment, this is true of wetlands generally. Sweedens Swamp's very ordinariness makes this litigation special, since the fact pattern seems ready for repetition across the country.

The Bersani case litigated more than just the fate of South Attleboro's shopping center; it raised controversial issues that go to the heart of the relationship between EPA and the Corps in the conduct of the dredge and fill program. The history of this unusual program, where two institutionally and philosophically distinct organizations share regulatory responsibility, has been characterized by uncertainty and dispute; Bersani represents the most recent chapter in the evolution of the division of responsibility and authority between the agencies. The courts' approval of EPA's move to protect Sweedens Swamp and to challenge the Corps' alternatives analysis and mitigation policy reaffirms EPA's pre-eminent position in determining permissible environmental impacts, and supports the view that Congress intended the agency to have an active, ongoing role in wetlands protection.

This Comment first reviews the legal framework within which the federal government makes wetlands regulatory decisions, focusing on EPA's role. It then analyzes how Bersani clarifies ambiguities within that framework, and examines what questions remain unanswered.

EPA's Functions in the § 404 Program

FWPCA § 404's language represents a compromise between those who would have given EPA virtually complete control over the regulation of discharges of dredged and fill material (in keeping with EPA's administration of other pollution control programs under the FWPCA) and those who would have favored overwhelming dominion by the Corps of Engineers (in keeping with the Corps' historical role in policing disposal of dredged and fill material into traditionally navigable waters and the ocean).6 The 1972 FWPCA Amendments7 reflected aspects of both the House and Senate bills, which varied enormously with regard to the structure of the program. The House measure vested primary administrative responsibility for the program with the Corps, while giving EPA power to designate "critical areas" where the discharge of particular materials would be prohibited, as well as to recommend areas where discharges should be allowed.8 However, the Corps would be free to issue a permit not in accordance with EPA's designation if the Corps certified that there was "no economically feasible alternative reasonably available."9 Under the House scheme, final authority for permit decisions was intended to rest unambiguously with the Corps.10 In contrast, the original Senate bill contained no separate dredge and fill program; discharges of dredged spoil would be treated like other pollutants and regulated by EPA under the national pollutant discharge elimination system (NPDES) program.11 The Senate, however, agreed to a compromise amendment on the floor providing that if a permit application for the disposal of dredged spoil were accompanied by a certificate from the Corps stating that the disposal site was the only reasonably available alternative, then EPA would be required to issue the permit, absent a finding by the agency that the project would have an unacceptable adverse effect on water supplies, wildlife, fisheries, or recreation areas.12

The debate in the Senate is instructive with regard to members' perceptions of the Corps and EPA. The discussion of permitting for the disposal of dredged material centered around the perceived dichotomy between economic well-being and environmental protection.13 The Corps was seen as the embodiment of economic values because of its primary mission of preserving and promoting the navigational integrity of the nation's waters, while EPA was regarded as the protector of environmental values. Sen. Muskie stated:

[M]ission-oriented agencies whose mission is something other than concern for the environment simply do not adequately protect environmental values. That is not their mission. They would do a disservice to their mission if they would try to act as environmental protectors. The mission of the Corps of Engineers is to protect navigation. It is not to protect the environment.14

The conference report adopted a structure for the program similar to that in the House measure, giving the Corps [18 ELR 10481] primary responsibility for running the program.15 However, the conference report reversed the House bill's presumption that the Corps would have final say in the issuance or denial of any given permit: the conferees agreed that EPA would have authority to "prohibit specification of any site for the disposal of any dredge or fill material which [the Administrator] determines will adversely affect municipal water supplies, shellfish beds and fishery areas …, wildlife, or recreational areas."16 This power includes the withdrawal, or veto, of a specification already made by the Corps.17 Section 404 as enacted gives the Corps no authority to override EPA's determination that a site may not be used for disposal. A discussion of the conference process concerning each section of the 1972 FWPCA Amendments was prepared and entered into the Congressional Record by Senator Muskie. The section on the conference report's dredge and fill provision stated:

The Conferees were uniquely aware of the process by which the dredge and fill permits are presently handled and did not wish to create a burdensome bureaucracy in light of the fact that a system to issue permits already existed. At the same time, the Committee did not believe there could be any justification for permitting the Secretary of the Army to make determination as to the environmental implications of either the site to be selected or the specific spoil to be disposed of in a site. Thus, the Conferees agreed that the Administrator of the Environmental Protection Agency should have the veto over the selection of the site for dredged spoil disposal and over any specific spoil to be disposed of in any selected site.18

This veto power is arguably one of the single most promising legal mechanisms for the protection of wetland habitats, since it specifically addresses protection of wildlife and it leaves open the question of what constitutes an adverse impact severe enough to trigger a veto. But the provision's broad grant of discretion to EPA is a double-edged sword: the agency has used the veto quite sparingly.19

EPA's institutional role in the § 404 program is not limited to the veto, however. Congress required EPA to issue guidelines for the Corps' consideration of permit applications,20 spelling out how and on what basis the Corps may issue or deny a permit. This power is important as well, although without the use or at least the credible threat of a veto, EPA has little say in the implementation of the guidelines. Moreover, EPA has a hand in the determination of crucial threshold jurisdictional issues that control whether particular activities are subject to the § 404 program's requirements.21 Finally, EPA is authorized to enforce violations of the requirements of the program.22

Promulgation of the § 404(b)(1) Guidelines

FWPCA § 404(b)(1) provides that guidelines developed by EPA "in conjunction with the Corps" shall be applicable to the Corps' permitting process.23 In 1980, EPA promulgated guidelines establishing procedures and requirements for the Corps' consideration of applications for dredge and fill permits.24 The Corps' use of the guidelines is mandatory; EPA intended them to be binding on the Corps,25 and the Corps in 1984 entered into a consent decree with environmental groups in which the Corps agreed that it must abide by the guidelines.26

EPA's guidelines set forth the general precept that a permit should not be approved "unless it can be demonstrated that such a discharge would not have an unacceptable adverse impact."27 The adverse impact may result solely from the proposed activity, or may be the result of the proposed activity in combination with the known or probable effects of other activities.28 The guidelines also indicate that the filling of wetlands in particular, as opposed to other dredge and fill activities, is to be considered an especially severe form of environmental degradation.29

The heart of the guidelines is a set of restrictions that they impose on discharges of dredged and fill materials. A discharge shall not be permitted if: (1) there is a practicable alternative that would have less adverse impact on [18 ELR 10482] the environment;30 (2) the discharge would violate any state water quality standard or toxic effluent standard or prohibition, or jeopardize a threatened or endangered species or critical habitat, or violate any federal regulations pertaining to marine sanctuaries;31 (3) the discharge would cause or contribute to significant degradation of the waters of the United States;32 or (4) appropriate and practicable steps have not been taken that would minimize adverse impacts of the discharge on the aquatic system.33

The guidelines provide that when the Corps (usually in the person of the district engineer)34 considers an application for a permit, it first considers whether a general permit is applicable.35 The district engineer should then examine practicable alternatives to the proposed discharge, such as not discharging at all or discharging at another site.36 Next, the candidate disposal site is delineated, and the characteristics of the site, its environment, and the material to be discharged are evaluated.37 The district engineer then identifies ways to minimize the environmental harm of the project.38 Finally, the district engineer makes factual findings, and determines whether the proposed activity will comply with the guidelines' restrictions on discharge. If the activity will violate those restrictions, then the district engineer must decide whether permit conditions that will minimize environmental damage are appropriate, or whether the permit should be denied.39 As a practical matter, the Corps rarely denies permits, although it often conditions permits on the performance of actions that will reduce adverse effects.40

The Corps' own regulatory policies and procedures supplement the EPA guidelines. When considering permit applications under any of its regulatory programs,41 the Corps conducts a "public interest review" that balances the favorable aspects of the proposed activity against its detrimental effects, and "reflects the national concerns for both the protection and utilization of important resources."42 Among the factors to be considered in public interest review are environmental values as well as economic and property values.43 In the context of the § 404 program, public interest review is a one-way street. Considerations of the general public interest give the Corps a basis, in addition to violations of the requirements set forth in EPA's guidelines, for denying a § 404 permit.44 However, the Corps may not issue a permit for any activity that violates the guidelines, even if the Corps' public interest review might weigh in favor of granting the permit.45

Public interest review has been called "standardless"46 because it purports to consider everything and gives no guidance as to how to arrive at the best result. Special language has been accorded in the regulations to the protection of wetlands;47 however, the actual test for decisions affecting wetlands remains the general balancing of benefit and detriment.48 That the Corps rarely denies a permit49 [18 ELR 10483] suggests that it generally regards dredge and fill projects, even those affecting wetlands, as socially beneficial activities.50

Threshold Jurisdictional Determinations

* Geographical jurisdiction. Before the Corps commences the process of issuing or denying a permit, it must first conclude that it has jurisdiction over the property and the proposed activity. EPA is involved in these decisions to some degree. For example, the question of the geographical jurisdiction of the § 404 program, which has long been one of the most vexing and controversial issues of the program,51 appears to be within EPA's authority to decide. It is an issue of great importance, since a negative jurisdictional determination leaves the property subject to no federal dredge and fill restrictions. However, EPA has delegated much of this authority to the Corps.

In 1979, the Corps asked then-Attorney General Benjamin Civiletti to render an opinion on whether the Corps or EPA has the final say on jurisdictional questions. Noting that the term "navigable waters" recurs a number of times in the FWPCA and is defined under the Act's general provisions rather than under § 404,52 the Attorney General concluded that EPA has the ultimate authority to decide whether, and to what extent, a body of water is within the FWPCA's jurisdiction.53

In response to the Attorney General's opinion, the Corps and EPA entered into a memorandum of understanding (MOU) concerning determination of geographic jurisdictional questions.54 Under the MOU, the Corps has the ultimate authority to decide whether, and to what extent, an area comes within the jurisdictional reach of the statute unless the area is a "special case." "Special cases" are defined as "those situations where significant issues or technical difficulties exist concerning the jurisdictional scope of Section 404 waters, the environmental consequences of jurisdiction are significant, and EPA has declared a special interest." In these cases, EPA retains final say. But there is a catch that severely restricts EPA's ability to have a meaningful role even in jurisdictional decisions in special cases: it is the Corps who reviews all permit applications in the first instance and decides which applications [18 ELR 10484] involve special cases. The volume of applications coming to the Corps — about 11,000 a year — means that EPA must rely on the Corps to identify special cases properly. The result of this arrangement, then, is that as a practical matter EPA has only a limited role in deciding the geographic reach of the program.

* "Fill." The relationship between § 404 and § 402, under which EPA issues NPDES permits regulating discharges of pollutants other than dredged or fill materials, gives rise to another threshold determination on which § 404 program authority hinges: exactly what constitutes "dredged or fill materials"?55 "Fill" is of particular importance, since it is involved in most wetland conversions. EPA and the Corps disagree as to how to distinguish discharges that are subject to § 402 from those that come under § 404.56 EPA looks to the nature of the discharge, believing that all discharges of solid waste should be regulated under § 404, while the Corps maintains that only discharges intended to replace an aquatic area or change the bottom elevation of a water body should come under § 404.57 The difference could be important: the regulatory authority to restrict or deny a discharge permit because of its effect on special wetlands values such as wildlife habitat is arguably broader under § 404 than under § 402. For the time being, EPA and the Corps have called an uneasy ceasefire concerning this issue, having entered into a memorandum of agreement (MOA) setting forth a compromise set of criteria by which particular discharges may be designated subject to one program or the other.58

Issuance and Denial of Permits: Advance Identification, Consultation, Elevation, and Veto

* Advance identification. Section 404 is structured to give the Corps control over the day-to-day functioning of the program, while EPA monitors the issuance and denial of permits to assure the protection of environmental values. EPA offers consultation to the Corps concerning individual permit applications. However, as with jurisdictional determinations, the enormity of the permit program necessarily limits EPA's hands-on participation in the permit process. For EPA to attempt to keep pace with the myriad applications submitted to the Corps is to some extent a losing battle. However, EPA has another method of protecting sensitive wetlands: the agency has authority to identify, in advance, areas where dredge and fill activities are definitely or probably unacceptable.

There are two sources of authority for advance identification. The first constitutes one arm of EPA's § 404(c) veto authority. While § 404(c) authorizes EPA to veto or restrict individual permits approved by the Corps,59 it also authorizes the agency to prohibit the specification of any area as a disposal site for dredged or fill materials.60 EPA may exercise its authority wherever the agency finds that a discharge would have an unacceptable adverse effect on water supplies, fishery areas, wildlife, or recreational areas.

As yet, EPA has not chosen to use this authority. This is unfortunate, since such an action offers an opportunity for the agency to develop and implement a wetlands policy that is based on a careful consideration of wetlands ecosystems and their interrelationship, rather than one thatarises piecemeal out of isolated responses to individual development decisions. The statutory language is clear in granting EPA broad power to use this advance identification to protect certain environmental values, including wildlife, against whatever EPA deems to be the unacceptable consequences of dredge and fill activities. With advance identification, developers could avoid wasting time and resources on areas for which permits would ultimately be denied, and would be able to steer their efforts toward more suitable sites in the first instance.61 The benefit of advance identification for the Corps would be clarity; for the designated wetland areas, there would be no need to work through lengthy negotiations with EPA to try to arrive at permit conditions that would bring the project into compliance with the § 404(b)(1) guidelines. Issuance of a permit would simply be prohibited. General permits and advance identification could serve as opposite but complementary aspects of the same effort to plan comprehensive wetlands management and streamline administrative red tape.

The second source of authority for advance identification lies in EPA's § 404(b)(1) guidelines. The guidelines state that EPA and the Corps may, on their own initiative, identify sites that will be considered as: (1) Possible future disposal sites, including existing disposal sites and nonsensitive areas; or (2) Areas generally unsuitable for disposal site specification.62

Unlike the § 404(c) advance identification, this form of designation does not actually prohibit applications for dredge and fill permits for the areas deemed "generally unsuitable."63 The idea behind this form of advance identification [18 ELR 10485] is that the government is predicting what it would do if confronted by a permit application for a given piece of wetland property. EPA up to now has made fairly limited use of this authority, but the agency isincreasing its efforts to move forward with such designations. As with the § 404(c) prohibitions, the effect of more extensive use of the guidelines' advance identification would be salutary; developers would be encouraged to direct their efforts from the outset to non-wetland property, or at least to less critical wetlands.

If EPA chooses to make greater use of these authorities, it should make it clear that they are not a substitute for informal and formal consultation with the Corps, or for EPA's § 404(c) power to veto a particular permit. Advance identification should be used to identify areas of special or readily discernible concern, but an area's failure to be designated should not constitute a statement that dredge and fill activities are necessarily permissible there.

* Consultation and elevation. Despite administrative problems arising from the large and decentralized nature of the Corps' § 404 program, some EPA regions are fairly active in overseeing implementation of the program. Disagreements between EPA and the Corps over the handling of permit applications can implicate fundamental policy questions, including issues involving the interpretation of the § 404(b)(1) guidelines. The § 404 program's split of authority between two agencies gives rise to a troublesome problem: which agency's interpretation of the guidelines should prevail?64 The manner in which the agencies resolve their differences is therefore important both with respect to individual applications as well as generally applicable program policy.

In 1985, EPA and the Corps entered into an MOA that establishes a blueprint for consultation, cooperation, and elevation within the Department of the Army of disputed permit decisions. The MOA serves to comply with the statutory mandate of FWPCA § 404(q),65 which requires the various agencies interested in the dredge and fill program to enter into agreements to expedite the consideration of permit applications.66 The MOA attempts to regularize contacts between the organizations to ensure that lagging communications do not slow the permit process. It is also intended to ensure that EPA has an opportunity to air its environmental concerns about a proposed permit early in the decisionmaking process, so that the permit can be crafted, if possible, to address those concerns. In this way, the MOA is designed to forestall EPA's exercise of its § 404(c) authority to veto permits.

Under the MOA, when the Corps intends to make a decision on a permit application it sends out the usual public notice to the EPA region. EPA must make any comments, such as recommending denial of the permit or modification of the project, in writing within the basic comment period. Where the district engineer plans to issue a permit not in accordance with EPA's comments, he or she should initiate informal contacts with the EPA region to attempt to arrive at a compromise. If these contacts do not produce an agreement satisfactory to EPA, then EPA may request that the permit decision be elevated to a higher level within the Department of the Army. EPA's ability to request elevation is limited to situations where there has been "insufficient interagency coordination" (defined to include a failure by the Corps to resolve EPA's concerns about compliance with the § 404(b)(1) guidelines), where significant new information has come to light, or where the project implicates environmental issues "of national importance." Even when properly requested to do so, the Army is under no obligation to elevate the decision; the Assistant Secretary for Civil Works makes the decision whether to elevate and, if so, to what level.

The interagency memorandum provides only process; exhaustion of its procedures could still leave the agencies at loggerheads. Where a disagreement remains unresolved at the conclusion of formal and informal contacts between the agencies and the Corps chooses to issue a permit unacceptable to EPA, EPA's recourse is to veto the permit pursuant to its § 404(c) authorities.

* Veto. FWPCA § 404(c) authorizes EPA to veto or restrict a dredge and fill permit issued by the Corps whenever "the discharge of such material into such an 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."67 "Unacceptable adverse effect" is broadly defined in EPA's regulations as an effect on an aquatic or wetland ecosystem that is "likely to result in significant degradation of municipal water supplies (including surface or ground water) or significant loss of or damage to fisheries, shellfishing, or wildlife habitat or recreation areas."68 The regulations also state that the requirements of the § 404(b)(1) guidelines are relevant to whether a proposed activity will have an unacceptable adverse effect.69

EPA's veto power is the source of the agency's ability to remain a force in the implementation of the dredge and fill program. Without the veto, EPA's participation in the issuance and denial of permits would be limited to its initial promulgation of the guidelines and its recommendations [18 ELR 10486] to the Corps, which are not binding. Section 404(c) gives EPA authority to do two things. First, EPA can exercise final say on any individual permit decision where the agency decides that the permitted activity would exact too high a price with respect to water supplies, fisheries, wildlife, or recreation. Second, the agency can interject its voice in the interpretation (rather than just the promulgation) of the § 404(b)(1) guidelines.

Enforcement

FWPCA § 404(s)70 authorizes the Corps to issue compliance orders and to commence enforcement actions in federal district court to redress violations of conditions or limitations in dredge and fill permits. EPA's authority to enforce § 404 is not entirely parallel with the Corps'. Like the Corps, EPA is authorized to issue compliance orders and to seek judicial remedies for violations, but only of state-issued § 404 permits.71 In addition, EPA may issue compliance orders and file suit in connection with permitless discharges.72 Both the Corps and EPA are the recipients of a powerful new enforcement authority added by the Water Quality Act of 1987: administrative penalties.73 Early signs indicate that EPA intends to put its new administrative penalty authority to use.74

The Bersani Case

The Scope of EPA's Veto Power

Prior to Bersani, EPA's veto power had never been tested in the courts. EPA has issued vetoes on only five occasions so far,75 and only the Sweedens Swamp case has generated case law. The unusual structure of the § 404 program — one agency administering a program over which another agency wields veto power — has induced opponents of EPA's involvement to ask whether Congress really meant to grant EPA broad authority to revisit every aspect of the Corps' decision. They have questioned whether EPA may review independently a proposed dredge and fill project's compliance with any aspect of the § 404(b)(1) guidelines in the agency's determination of whether the project will have an "unacceptable adverse effect." The Sweedens Swamp cases76 have answered these questions with a clear affirmative.

By upholding EPA's veto, the district and circuit court opinions in Bersani acknowledged the agency's ability to override the Corps' decision to issue a permit. In so doing, the courts implicitly recognized and reaffirmed the clear language of the statute. More importantly, the Bersani decisions upheld the reasoning behind EPA's veto — that there was a practicable alternative to the siting of the project, and that the existence of a practicable alternative helped render the effects of the project on wildlife "unacceptable," regardless of a proposed mitigation plan.

Pyramid had argued that EPA's § 404(c) authority to veto a permit for an activity that would have an "unacceptable adverse effect" does not give EPA license to evaluate the existence of a practicable alternative to the proposed project.77 In other words, Pyramid contended that the process by which the Corps determines whether a discharge would violate any of the restrictions of the § 404(b)(1) guidelines78 is entirely distinct from the process by which EPA determines if the discharge would have an unacceptable adverse effect. According to this argument, EPA is prohibited from considering the "nonenvironmental" requirements of the guidelines; the Corps' determination on such matters is final, not subject to veto. It is not entirely clear what the "nonenvironmental" provisions of the guidelines, other than the no practicable alternative requirement, might be; arguably, they might include requirements that the proposed activity conform to state water quality standards, toxic effluent standards and limitations, and marine sanctuary requirements.79

The district court examined the language of the statute, the regulations, and the legislative history, and found no support for Pyramid's restrictive view of EPA's authority.80 The court ruled that the statute only places two restrictions on EPA's veto power: first, the agency must abide by notice and hearing requirements and, second, the unacceptable adverse effect must pertain to one of the designated § 404(c) resources.81 But the reasoning by which [18 ELR 10487] the agency arrives at its determination of unacceptable adverse effect on a designated resource is not limited at all by the statute.

Therefore, EPA's conclusion that the Sweedens Swamp development would exact too high a price in lost wildlife habitat was a sufficient basis for a § 404(c) veto, since proper procedures were followed and wildlife is a § 404(c) resource. That EPA reached its conclusion by finding that Pyramid could have chosen another, non-wetland site is not grounds for challenging the agency's decision.82 The district court also rejected Pyramid's argument that EPA's alternatives analysis violated the § 404(c) regulations83 by considering portions of the § 404(b)(1) guidelines that go to the avoidability of the harm as opposed to its magnitude.84 The regulations define "unacceptable adverse effect" as one producing "significant loss of or damage to" § 404(c) resources.85 The court ruled that the significance of a harm can encompass its avoidability as well as its dimensions.86 Moreover, neither the statute nor the legislative history indicates that EPA is in any way bound by a previous, contrary determination of the Corps on the practicable alternatives issue.87

On appeal, Pyramid did not raise the issue of EPA's authority to consider the availability of an alternative, but instead focused its argument on the manner in which EPA conducted its alternatives analysis.88 The district court's ruling adopts a liberal definition of "unacceptability" that encompasses factors that do not necessarily relate directly to the amount of harm. That EPA may consider alternatives to the proposed activity when making a § 404(c) decision is potentially of great practical importance, since an expansive view of availability could subject many projects to veto. It also appears that under the court's ruling, EPA may have the final say as to whether the project would violate the other environmental laws with which the § 404(b)(1) guidelines require compliance;89 the Agency could determine that a project would violate such legal requirements and that any violation would help tip the scale toward finding unacceptable adverse effects. While EPA's vetoes of course remain subject to review to ensure that they are not arbitrary and capricious, under the ruling in Bersani they may not be successfully challenged simply because they were based on a consideration of particular aspects of the guidelines.

EPA's Interpretations of the Guidelines: What Effect?

A corollary effect of Bersani is to clarify that EPA has a role in the interpretation of the guidelines, and particularly the no practicable alternative requirement. In fact, this is precisely what happened in Bersani: EPA based its veto decision on a view of the alternatives analysis that differed from that of the Corps, and EPA's interpretation was challenged and upheld in court.90 However, the exact nature of EPA's role remains somewhat uncertain.

Neither the district nor the appellate court explicitly concluded that EPA's interpretation is binding on the Corps in the future, or that as a general matter the Corps' interpretations of the guidelines may be improper solely because they differ from EPA's. The courts could have made such a ruling, based on the statute and legislative history. It is entirely plausible that by vesting EPA with the authority to promulgate the guidelines, as well as the authority to overturn the Corps' application of the guidelines in a particular case, Congress intended EPA's interpretations to be conclusive.91 Although the district court opinion did hold that EPA's position was entitled to deference,92 the Second Circuit expressly declined to accept that notion,93 and held only that EPA's interpretation was reasonable.94

Despite Bersani's failure to establish that EPA's interpretations [18 ELR 10488] of its own guidelines carry greater legal weight than the Corps', the practical effect of the ruling could be much the same. In order to avoid future vetoes, the Corps may be inclined to heed EPA's viewpoints more closely, and over time EPA's interpretation of any given requirement may influence the actions of the Corps.95 At any rate, Bersani made one thing clear: the § 404(c) veto power is a viable means by which EPA can assert its own interpretation of the guidelines in individual cases.

Alternatives analysis

At the heart of the dispute in Bersani was the proper interpretation of the requirement in the guidelines that there be no less harmful practicable alternative to the proposed discharge.96 EPA and the Corps differed with regard to two different aspects of the alternatives analysis.

* Availability: the "market entry" theory. Under the § 404(b)(1) guidelines, the existence of a practicable alternative that would yield less harm than the proposed activity is a sufficient basis for denial of a permit.97 The guidelines further provide that where a proposed activity affecting a wetland is not "water-dependant" — that is, does not require proximity to water — practicable non-wetland alternatives are are presumed to exist unless clearly demonstrated otherwise.98 Moreover, all non-wetland alternatives are presumed to have less adverse effect on the aquatic ecosystem.99 "Practicable" is defined in the guidelines as "available and capable of being done after taking into consideration cost, existing technology, and logistics in light of overall project purposes."100 An alternate site need not be owned by the applicant in order for the alternative to be practicable, so long as the other site "could reasonably be obtained, utilized, expanded, or managed in order to fulfill the basic purpose of the proposed activity."101

The controversy in Bersani centered around the "availability" of an alternate site.102 Since the proposed project for Sweedens Swamp involved the construction of a shopping mall rather than, for example, a marina, Pyramid had the burden of establishing the unavailability of alternatives.

It was undisputed in Bersani that Pyramid began to investigate potential mall locations in the area — in other words, that Pyramid "entered the market" — sometime in 1983. EPA and Pyramid disagreed as to exactly when Pyramid entered the market; Pyramid maintained that it was not in the area until September 1983, while EPA concluded that Pyramid had begun to scout locations as early as the spring of 1983. The parties agreed that Pyramid's competitor purchased an option for another possible site in the area, the site identified by EPA as a practicable alternative, in July 1983. Pyramid purchased Sweedens Swamp in December 1983, and applied for a § 404 permit the following August. The Corps issued its proposal to grant the permit in 1985, partly on the basis that the alternate site was unavailable because someone other than Pyramid had purchased an option on it. EPA, on the other hand, found the site available because in the spring of 1983, when, the Agency believed, Pyramid entered the market, the alternate site was still available.

The factual dispute concerning exactly when Pyramid entered the market was unimportant to the district and the appellate courts, which both concluded that the alternate site was potentially subject to Pyramid's acquisition at least as late as September 1983.103 The courts' reasoning was based on the fact that the site options were not completed until sometime in 1984, and in any event Pyramid could have attempted to purchase from the optionholder.104

Pyramid argued that availability must be determined with reference to the time a permit application is filed or when the Corps makes its decision, and not the time of the applicant's entry into the market. In support of its argument, Pyramid noted that the provision of the guidelines concerning alternatives is expressed entirely in the present tense.105 Pyramid also contended that nothing in prior case law or previous EPA practice indicated that availability should be figured from the time of market entry.106 EPA, on the other hand, argued that the market entry approach is reasonable because it serves the very purpose of the alternatives test, to discourage dredging and filling activities, particularly those that are not water-dependant, in wetland areas.107

The district court stated simply that it found EPA's approach to be reasonable. The Second Circuit delved into [18 ELR 10489] a more extensive analysis, finding the market entry theory in accord with the intent of the guidelines to create an incentive for developers to choose upland sites.108 The court noted that Pyramid's reliance on the use of the present tense in the relevant provision of the guidelines is unduly literal, and that the "present" of the regulations may be some time other than when the Corps determines how to act on the application.109 Given this ambiguity, the court examined the intent of the no practicable alternative requirement, and found that EPA's approach furthered the regulation's purpose:

If the practicable alternatives analysis were applied to the time of the application for a permit, the developer would have little incentive to search for alternatives, especially if it were confident that alternatives would soon disappear. Conversely, in a case in which alternatives were not available at the time the developer made its selection, but became available by the time of application, the developer's application would be denied even though it could not have explored the alternative site at the time of its decision.110

The effect of the "no practicable alternative" requirement is to make wetland development more costly by making it more risky. A developer who contemplates buying a piece of wetland property for a project for which a § 404 permit is needed must factor into the decision the possibility that the permit will be denied by the Corps, or vetoed by EPA, because of the availability of an alternate site. The salient feature of the market entry theory with respect to wetlands preservation, however, is that the economic risk to the developer can be minimized by a careful examination of possible upland alternatives and actual selection of any such feasible alternative.

* The relationship between alternatives analysis and mitigation. EPA and the Corps disagree as to the proper role of mitigation in the § 404 permit process. The § 404(b)(1) guidelines provide that "no discharge shall be permitted unless appropriate and practicable steps have been taken which will minimize potential adverse impacts of the discharge on the aquatic system."111 The guidelines set forth a number of possible forms of mitigation, including both onsite efforts to reduce the effects of a project, as well as offsite attempts to compensate for any environmental degradation.112 Although the district engineer is directed to consider the practicability of an alternative prior to considering possible mitigation techniques,113 the exact proper role of mitigation remains unclear. One of the most fundamental questions, and one that was implicated in Bersani, is whether mitigation may be used to reduce the impacts of a project to a level at which the existence of a practicable non-wetland alternative will not bar the issuance of a permit.

The Corps sees mitigation as an "important aspect" of § 404(c) and public interest review.114 Indeed, the Corps often requires project modifications as conditions for the issuance of dredge and fill permits. Despite the fact that the guidelines specify the order in which alternatives and mitigation are to be considered, the Corps "considers mitigation throughout the public interest review process and does not view it in a stepwise fashion."115 EPA, relying on the sequential nature of the guidelines' requirements, takes the opposite position, arguing that mitigation be used only for unavoidable harms.116 In other words, EPA does not believe that mitigation can be used to make a wetland project equal to or less harmful than a non-wetland project. EPA is particularly concerned about the scientific uncertainty of compensatory offsite mitigation, such as that proposed by Pyramid in Bersani, where the artificial duplication of highly complex natural systems is attempted.117

This difference of opinion was played out clearly in Bersani. The Corps,118 performing its combination of § 404 and public interest review, concluded in part that offsite mitigation would bring the net adverse effects of Pyramid's project down to a level where resort to the existing alternative would no longer be necessary.119 In vetoing the permit, EPA stated:

EPA encourages mitigation efforts when there are no practicable alternatives other than filling in a wetland for a particular project and the project does not cause significant degradation to aquatic resources … [I]t is unacceptable to trade the certain benefits provided by this functioning wetland for the uncertain benefits of a large scale wetland creation. The language, regulations, and purpose of section 404 all point to a fundamental principle: The degradation or destruction of special aquatic sites, such as wetlands, should be avoided if there are practical alternatives.120

The reasonableness of EPA's policy that compensatory mitigation cannot eliminate the relevance of a practicable alternative was not directly raised in Bersani. In fact, only the district court opinion discussed mitigation at all, and it did so very briefly. Pyramid contended that EPA had [18 ELR 10490] failed to make an explicit finding of unacceptable adverse effects, and improperly based its veto solely on the existence of a practicable alternative.121 The district court found that EPA did in fact make a finding of unacceptable impact.122 The court noted that the Agency had considered the substantial effects of the project on wildlife, the existence of an alternative, and the uncertain success of the proposed mitigation. The court declined to hold that EPA's finding of unacceptable adverse effects, based on these considerations, was arbitrary and capricious.123 The issue was not raised on appeal. This holding is similar to the court's earlier holding that EPA is not barred by the statute from considering a practicable alternative in determining the unacceptability of a project's effects.124

The district court did not address or even acknowledge EPA's more general policy that mitigation is not anappropriate means of satisfying the no practicable alternative requirement. However, the court's opinion did clearly hold that a combination of significant effects on wildlife, uncertain mitigation,125 and the existence of a practicable alternative together constitute a sufficient basis for a veto. The opinion therefore lends support to EPA's line of reasoning, without explicitly upholding the agency's policy.

Conclusion

The courts in Bersani rejected a narrow and restricted view of EPA's veto authority, upheld a view of the "no practicable alternative" requirement that encourages developers and others who might fill wetland property to look elsewhere first, and indirectly lent support to EPA's policy that mitigation, particularly the creation of artificial wetlands, should be used sparingly and not in lieu of non-wetland choices.

The central theme of EPA's approach to the Sweedens Swamp case was that wetlands, where possible, should be left undisturbed, and society should look to other kinds of property first for development. Given the FWPCA's mandate to protect the biological integrity of the nation's waters,126 there is no justification for destroying valuable and increasingly threatened wetlands when identical or similar projects can be accomplished elsewhere.127 That EPA chose Sweedens Swamp as a place to assert this policy is encouraging, because the swamp is neither unusually important or beautiful, nor does it harbor rare or exotic wildlife — it is simply a good wetland habitat.128 Perhaps the agency will continue to assert interpretations of the § 404(b)(1) guidelines that are protective of wetland values. In this way, in addition to making greater use of its veto, advance identification, and enforcement authorities, EPA can help to enhance the § 404 program's protection of the nation's diminishing wetland resources. While EPA's role in the § 404 program is only as strong as the agency chooses to make it, the agency's conduct and the courts' rulings in this case show promise.

1. Massachusetts law requires approval by the Department of Environmental Quality Engineering (DEQE). Approval was initially denied.

2. Following initial disapproval, see supra note 1, the DEQE reversed itself and approved the project. The approval was ultimately upheld by the Massachusetts Supreme Judicial Court. See Citizens for Responsible Environmental Management v. Attleboro Mall, Inc., 400 Mass. 658, 511 N.E.2d 562, 18 ELR 20118 (1987).

3. 33 U.S.C. § 1344, ELR STAT. FWPCA 054-057.

4. 33 U.S.C. § 1344(c), ELR STAT. FWPCA 054.

5. 674 F. Supp. 405, 18 ELR 20001 (N.D.N.Y. 1987), aff'd, 850 F.2d 36, 18 ELR 20874 (2d Cir. 1988). The district court's rulings were rendered in its decision on cross-motions for summary judgment. The court granted EPA's motion and denied Pyramid's.

6. The Corps regulates construction, excavation, and fill activities in navigable waterways pursuant to § 10 of the Rivers and Harbors Appropriations Act, 33 U.S.C. § 403, and administers a permit program under § 103 of the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1413, governing ocean disposal of dredged material.

7. Pub. L. 92-500, 86 Stat. 1034 (1972).

8. H.R. 11896, 92d Cong., 2d Sess. § 404 (1972), reprinted in 1 A LEGISLATIVE HISTORY OF THE WATER POLLUTION CONTROL ACT AMENDMENTS OF 1972, 93d Cong., 1st Sess., Ser. No. 93-1 (1973) at 1063-1064 [hereinafter 1972 LEGISLATIVE HISTORY].

9. H.R. 11896, 92d Cong., 2d Sess. § 404 (1972), reprinted in 1 1972 LEGISLATIVE HISTORY, supra note 8, at 1064.

10. "[U]nder section 404 the Secretary of the Army shall have final decision-making responsibility and he shall not abdicate his responsibility to any other agency. For example, after consultation with the Administrator [of EPA], the Secretary can override the Administrator's designation if he determines that it is not economically feasible to use the designated site." H.R. REP. No. 911, 92d Cong., 2d Sess. 130 (1972), reprinted in 1 1972 LEGISLATIVE HISTORY, supra note 8, at 817.

11. See S. 2770, 92d Cong., 1st Sess., § 402 (1971), reprinted in 2 1972 LEGISLATIVE HISTORY, supra note 8, at 1685-1692. Discharges of fill material were not explicitly mentioned at all.

12. See id.

13. At the time, senators were concerned chiefly with dredging, rather than filling, and they were focusing primarily on dredging conducted by the Corps itself in the context of its navigational improvement activities. Now, however, much of the § 404 program concerns the filling of wetlands not by the federal government, but by private individuals. In 1977, most dredge and fill activities by the federal government were exempted from regulation. Pub. L. No. 95-217, § 67(b), 91 Stat. 1605 (1977) (codified at 33 U.S.C. § 1344(r), ELR STAT. FWPCA 065). Nevertheless, the general impressions of the senators concerning the institutional personalities of the Corps and EPA are still relevant, since they explain why the program was bifurcated, vesting regulatory responsibilities in two different agencies. Moreover, the same perceptions of trade-offs between economic and environmental values they expressed in 1972 continue to be at the center of most controversies involving the program.

14. Senate Debate on S. 2770, November 2, 1971, reprinted in 2 1972 LEGISLATIVE HISTORY, supra note 8, at 1389.

15. See S. REP. No. 1236, 92d Cong., 2d Sess. 141-142 (1972), reprinted in 1 1972 LEGISLATIVE HISTORY, supra note 8, at 324-325.

16. S. REP. No. 1236, 92d Cong., 2d Sess. 142 (1972), reprinted in 1 1972 LEGISLATIVE HISTORY, supra note 8, at 325.

17. See FWPCA § 404(c), 33 U.S.C. § 1344(c), ELR STAT. FWPCA 054.

18. Senate Consideration of the Report of the Conference Committee, October 4, 1987, reprinted in 1 1972 LEGISLATIVE HISTORY, supra note 8, at 177. For another perspective on the institutional division of responsibility between the agencies, see Habicht, Implementing Section 404: The View From the Justice Department, 16 ELR 10073 (1986).

19. See infra note 75 and accompanying text.

20. FWPCA § 404(b)(1), 33 U.S.C. § 1344(b)(1), ELR STAT. FWPCA 054.

21. See infra notes 51-58 and accompanying text.

22. FWPCA § 309, 33 U.S.C. § 1319, ELR STAT. FWPCA 035. The FWPCA also authorizes EPA to oversee any authorized state dredge and fill program covering waters that are not traditionally navigable. FWPCA § 404(g)-(1), 33 U.S.C. § 1344(g)-(1), ELR STAT. FWPCA 055-056. However, only Michigan has assumed the § 404 program within its borders under these provisions. See OFFICE OF TECHNOLOGY ASSESSMENT, WETLANDS: THEIR USE AND REGULATION, at 71 (1984) [hereinafter OTA].

23. The guidelines are to be based on criteria similar to those used in the determination of the degradation of the waters of the territorial seas, contiguous zone, and the oceans, as specified in FWPCA § 403(c). 33 U.S.C. § 1343, ELR STAT. FWPCA 054. Those criteria include the effect of disposal on human health and welfare, marine life, and aesthetic, recreational, and economic values; the persistence and permanence of the effects of disposal; the effect of disposal at varying rates; other possible locations and methods of disposal including land-based alternatives; and the effect on alternate uses of the water resource, such as scientific study. Id. Section 404(b)(1) also provides that where the guidelines alone would prohibit specification of a site, the Corps must additionally consider the economic impact of the site on navigation and anchorage.

24. The guidelines are codified at 40 C.F.R. part 230.

25. 45 Fed. Reg. 85336 (1980).

26. See National Wildlife Federation v. Marsh, 14 ELR 20262 (D.C. Cir. 1984). Various environmental organizations had sued the Corps to challenge its newly promulgated regulations implementing the § 404 program. As part of the agreement settling the case, the Corps agreed that:

a permit application will be denied if thedischarge that would be authorized by such permit would not comply with the EPA § 404(b)(1) guidelines. If the District Engineer determines that the proposed discharge would comply with the § 404(b)(1) guidelines the permit will be granted unless the District Engineer determines it would be contrary to the public interest.

14 ELR at 20264. See also Liebesman, The Role of EPA's Guidelines in the Clean Water Act § 404 Permit Program — Judicial Interpretation and Administrative Application, 14 ELR 10272 (July 1984). The Corps' § 404 regulations now reflect this agreement. See 33 C.F.R. § 323.6(a) (1987).

27. 40 C.F.R. § 230.1(c) (1987). At least one court has used this statement as a basis for invalidating a permit issued by the Corps. See Sierra Club v. United States Army Corps of Engineers, 772 F.2d 1043, 15 ELR 20998 (2d Cir. 1985).

28. 40 C.F.R. § 230.1(c) (1987).

29. 40 C.F.R. § 230.1(d) (1987).

30. 40 C.F.R. § 230.10(a) (1987). See infra notes 96-110 and accompanying text.

31. 40 C.F.R. § 230.10(b) (1987).

32. 40 C.F.R. § 230.10(c) (1987). This restriction is subject to the ability of the Corps to issue permits for discharges that would cause significant degradation, but that are needed to avoid an unacceptable economic effect on navigation and anchorage. See 40 C.F.R. § 230.10(c) (1987); FWPCA § 404(b)(2).

33. 40 C.F.R. § 230.10(d) (1987).

34. The Corps' § 404 program is very decentralized, with officers at the district level making most decisions on individual permit applications. See 33 C.F.R. § 320.1 (1987) (Corps' general regulatory policies); 33 C.F.R. § 323.6 (1987) (Corps' § 404 regulations).

35. 40 C.F.R. § 230.5(b) (1987). The Act allows the Corps to develop general permits for dredge and fill activities that shall be exempt from the usual individual permitting process because of their minimal individual or cumulative adverse effects on the environment. See 40 C.F.R. §§ 230.5(b), 230.7 (1987). General permits may be nationwide, regional, or statewide. The Corps' regulations establishing nationwide permits are codified at 33 C.F.R. part 330 (1987). Examples of activities covered by nationwide permits include the placement of aids to navigation, 33 C.F.R. § 330.5(1) (1987), discharge of material for backfill or bedding for utility lines resulting in no change in bottom contours, 33 C.F.R. § 330.5(12) (1987), certain bank stabilization work, 33 C.F.R. § 330.5(13) (1987), and minor road crossing fills, 33 C.F.R. § 330.5(14) (1987). An especially controversial nationwide permit is #26, which includes activities affecting nontidal wetlands above headwaters and isolated nontidal waters. 33 C.F.R. § 330.5(26) (1987). However, activities causing the "loss or substantial adverse modification of 10 acres or more of such waters" are not included in the general permit. Although applicants whose activities are governed by general permits do not have to undergo the individual permitting process, they are supposed to comply with applicable best management practices for nationwide permits, and any other permit-specific requirements. See Ray, Section 404 of the Clean Water Act: An EPA Perspective, NATURAL RESOURCES AND ENVIRONMENT (Winter 1987) at 22.

36. 40 C.F.R. § 230.5(c) (1987). See infra notes 96-125 and accompanying text.

37. 40 C.F.R. §§ 230.5(d)-(h) (1987).

38. 40 C.F.R. § 230.5(j) (1987). Various possible ways to minimize the adverse effects of dredge and fill projects are set forth at 40 C.F.R. § 230.70 (1987).

39. 40 C.F.R. §§ 230.5(k)-(l), 230.11, 230.12 (1987).

40. See OTA, supra note 22, at 143-144.

41. In addition to implementing the FWPCA § 404 program, the Corps administers two other permit programs. See supra note 6.

42. 33 C.F.R. §§ 320.1(a), 320.4 (1987). The Corps historically was strictly a civil engineering organization; however, as Congress has given the Corps increasing regulatory authority, see supra note 6, the Corps has developed this balancing process as a general blueprint for its regulatory policy. Actual procedures followed by the Corps in processing applications for permits under its various regulatory programs are set forth at 33 C.F.R. part 325 (1987). The Corps has promulgated a set of regulations addressing the § 404 program specifically, see 33 C.F.R. part 323 (1987), but these regulations pertain almost exclusively to the issues of jurisdiction and nationwide permits. In addition, the Corps must comply with the requirements of the National Environmental Policy Act, 42 U.S.C. §§ 4321-4370a, ELR STAT. NEPA 001-014. Environmental assessments must be prepared for the issuance of permits, and an environmental impact statement is required where the permit issuance amounts to a major federal action significantly affecting the environment.

43. The regulations list the following specific items for consideration in public interest review: conservation, economics, aesthetics, general environmental concerns, wetlands, historic properties, fish and wildlife values, land use, navigation, shore erosion and accretion, recreation, water supply and conservation, water quality, energy needs, safety, food and fiber production, mineral needs, considerations of property ownership, and, in general, the needs and welfare of the people. 33 C.F.R. § 320.4(a)(1) (1987).

44. See supra note 26; 33 C.F.R. § 320.4(a) (1987).

45. The Second Circuit in Bersani contrasted the mandatory nature of the § 404(b)(1) guidelines with the discretionary use of public interest review. 850 F.2d 39-40, 18 ELR at 20875 ("In addition to following the § 404(b)(1) guidelines, the Corps may conduct a 'public interest review.' … This public interest review is not mandatory under § 404, unlike the § 404(b) guidelines.")

46. W. RODGERS, ENVIRONMENTAL LAW: AIR AND WATER, § 4.12 at 204-205 (1986).

47. "Most wetlands constitute a productive and valuable public resource, the unnecessary alteration and destruction of which should be discouraged as contrary to the public interest." 33 C.F.R. § 320.4(b)(1) (1987).

48. The Corps' public interest review regulations identify the characteristics of wetlands that are to be considered of particular importance, such as those providing significant wildlife habitat or water purification functions. 33 C.F.R. § 320.4(b) (1987). The regulations recognize that a small and seemingly minor site may be important because of its relationship to a larger wetlands system. See id. The Corps is not to grant a permit that alters an important wetland unless the district engineer concludes that the benefits of the proposed alteration outweigh the harm. See id.

49. See supra note 40 and accompanying text.

50. It is sometimes argued that the Corps' tendency to grant permits is due to the fact that permit applicants avoid designing projects that would do too much environmental damage to be approved.

The open-ended public interest standard makes it very easy for persons challenging the Corps' decisions to establish federal court jurisdiction by alleging a violation of the regulations; however, courts generally do not rigorously scrutinize the policy choices made by the Corps under the standard. See W. RODGERS, supra note 46, at 205-206.

51. Interpretation of the statute has proved controversial since the enactment of the § 404 program in 1972, and continues to provoke disagreement today. Section 404 provides that the Corps may issue permits for the discharge of dredged or fill material "into the navigable waters," 33 U.S.C. § 1344(a), ELR STAT. FWPCA 054, which are defined in the § 502(7) as "waters of the United States." 33 U.S.C. § 1362(7), ELR STAT. FWPCA 058. In the past, the Corps' regulatory jurisdiction had only extended to traditionally navigable waters — waters actually or potentially subject to navigation. Therefore, the Corps initially interpreted its § 404 jurisdiction to extend only to such traditionally navigable waters. However, in 1974 the District Court for the District of Columbia ruled that "navigable waters" encompasses all waters of the United States within the full reach of the Commerce Clause, and ordered the Corps to issue regulations reflecting its full jurisdiction. See Natural Resources Defense Council v. Callaway, 392 F. Supp. 685, 5 ELR 20285 (D.D.C. Mar. 27, 1975). The Corps' altered its regulations in 1975 to comply with the court's mandate, and the regulations now state:

(a) The term "waters of the United States" means:

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

(2) All interstate waters including interstate wetlands;

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

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

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

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

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

(5) Tributaries of waters defined in paragraphs (a)(1) through (4) of this section;

(6) The territorial seas;

(7) Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (a)(1) through (6) of this section …

(b) The term "wetlands" means those areas that are 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. Wetlands generally include swamps, marshes, bogs, and similar areas.

33 C.F.R. § 328.3 (1987).

In 1977 Congress considered and rejected suggestions that it limit the scope of the § 404 program to traditionally navigable waterways and their adjacent wetlands. The Supreme Court in United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 16 ELR 20086 (1985) upheld the broader view of jurisdiction expressed in the Corps' regulations. The Court ruled that wetlands adjacent to "waters of the United States," even those that are not subject to frequent flooding, are covered under § 404. The Court also acknowledged § 404's role as a mechanism for the protection of wetlands, and that the FWPCA reflects Congress' concern both for water quality as well as the integrity of ecosystems. See Comment, The Supreme Court Endorses a Broad Reading of Corps Wetland Jurisdiction under FWPCA § 404, 16 ELR 10008, 10010 (1986).

Controversy over the dredge and fill program's jurisdiction is far from over, however. The Court in Riverside expressly declined to rule whether "isolated" wetlands, those that are not adjacent to waters otherwise covered under the FWPCA, are within the Corps' jurisdiction, since that issue was not before the Court. See 474 U.S. at 131 n.8, 16 ELR at 20088 n.8. Moreover, application of the law to individual pieces of property is a difficult task, generating considerable disagreement and litigation. See, e.g., United States v. Rivera Torres, 656 F. Supp. 251, 17 ELR 20813 (D.P.R. 1987), preliminary injunction aff'd, 826 F.2d 151, 17 ELR 21285 (1st Cir. 1987) (mangrove forest located on firm, wet soil and separated from the sea by dunes is "adjacent wetland"); Bailey v. United States, 647 F. Supp. 44, 17 ELR 20501 (D. Idaho 1987) (50 acres saturated as a result of dam construction constitute covered wetlands).

52. FWPCA § 502(7) defines "navigable waters" as "waters of the United States, including the territorial seas." 33 U.S.C. § 1362(7), ELR STAT. FWPCA 058.

53. See 43 Op. Att'y Gen. No. 15 at 5 (1979).

54. See Memorandum of Understanding, Geographical Jurisdiction of the Section 404 Program, 45 Fed. Reg. 45018 (July 2, 1980). This MOU is presently under review, and is expected to be reissued in the near future.

55. In addition to geographical jurisdiction and the definition of "fill," EPA is involved in other threshold § 404 determinations as well. For example, the Civiletti opinion, see supra notes 52-53 and accompanying text, stated that EPA has final authority to construe exemptions from the requirements of the dredge and fill program that are set forth in FWPCA § 404(f). See 43 Op. Att'y Gen. 15 at 6-7.

56. See Memorandum of Agreement on Solid Waste, 51 Fed. Reg. 8871 (Mar. 14, 1986).

57. See id.

58. See id.

59. See infra notes 67-69 and accompanying text.

60. This power is subject to the usual notice and hearing requirements. FWPCA § 404(c), 33 U.S.C. § 1344, ELR STAT. FWPCA 054. In addition, EPA must consult with the Corps before issuing such a prohibition. See id.

61. Landowners with property subject to a § 404(c) prohibition might argue that such an action constitutes a compensable taking. The effect of advance identification — an inability to place dredged or fill material on the property — would be identical to that of denial of a permit. While the regulatory takings doctrine and its application to § 404 permit denials have not been clearly articulated by the courts, in general a claimant has the heavy burden of demonstrating that the governmental regulation serves no legitimate state interest or that the regulation deprives the land of all economic value. See Keystone Bituminous Coal Association v. De Benedictis, 107 S. Ct. 1232, 17 ELR 20440 (1987); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 130, 16 ELR 20086, 20087 (1985); Agins v. City of Tiburon, 447 U.S. 255, 10 ELR 20361 (1980). Advance identification could very well weaken the takings claims of developers purchasing land after its designation under § 404(c); knowing purchasers of regulated property often buy at a discount, and the effect of the regulation on their economic interests is therefore diminished. See Ragsdale, Guide to Regulatory Takings Jurisprudence: A Synthesis and Integration of Supreme Court Precedent, 55 UMKC L. REV. 213 (Winter 1987), reprinted in N. GORDON, 1988 ZONING AND PLANNING LAW HANDBOOK 301 (1988).

62. 40 C.F.R. § 230.80(a) (1987).

63. 40 C.F.R. § 230.80(b) (1987). Takings issues are therefore even less likely to be an obstacle to the use of this kind of advance identification than to the prohibitory kind authorized by § 404(c).

64. See Liebesman, supra note 26, at 10278 ("[T]he precise role of EPA's interpretation of the guidelines in the permit review process remains an open question …")

65. 33 U.S.C. § 1344(q), ELR STAT. FWPCA 056. See Memorandum of Agreement Between the Environmental Protection Agency and the Department of the Army (Jan. 1987).

66. The Fish and Wildlife Service (FWS), which is specifically authorized by FWPCA § 404(m), 33 U.S.C. § 1344(m), ELR STAT. FWPCA 056, to comment on permit applications, has entered into a similar MOA with the Corps. See OTA, supra note 22, at 71. The National Marine Fisheries Service is also a party to the agreement between FWS and EPA.

67. 33 U.S.C. § 1344(c), ELR STAT. FWPCA 054. EPA's procedures for implementing § 404(c) are codified at 40 C.F.R. Part 231 (1987). These procedures include consultation with the Corps, public notice and comment, and a public hearing where appropriate. See id. Veto decisions are to be made by the regions, subject to review by the EPA Administrator. See 40 C.F.R. §§ 231.5-231.6 (1987). The regulations impose a deadline on the regional administrator's issuance of a veto recommendation; however, a federal district court, in a decision arising out of the early stages of the Sweedens Swamp controversy, has ruled that the deadline is not jurisdictional. Bersani v. Deland, 640 F.2d 716, 719, 16 ELR 20795, 20796 (D. Mass. 1986) ("Congress … chose not to confine the EPA to a rigid timetable.") The initiation of the § 404(c) process is to occur after exhaustion of the consultation and elevation procedures set out in the interagency MOA. 40 C.F.R. § 231.3(a)(2) (1987). Where EPA begins the § 404(c) review while a permit application is still pending before the Corps, the district engineer must await final EPA action on the veto before issuing the permit. See id.

68. 40 C.F.R. § 231.2(e) (1987).

69. 40 C.F.R. §§ 231.1(a), 231.2(e) (1987).

70. 33 U.S.C. § 1344(f), ELR STAT. FWPCA 056.

71. See FWPCA § 309(a)(3), (b), 33 U.S.C. § 1319(a)(3), (b), ELR STAT. FWPCA 036. See supra note 22.

72. See id. Section 309(a)(3) provides that EPA may issue a compliance order for a violation of FWPCA § 301. Section 301, 33 U.S.C. § 1311, ELR STAT. FWPCA 025, states that discharges of pollutants are unlawful unless they comply with the relevant sections of the FWPCA, such as § 404.

73. See FWPCA § 309(g), 33 U.S.C. § 1319(g), ELR STAT. FWPCA 037-038.

74. See 16 Land Use Planning Report 47 (1988). While this is promising news, as a general matter effective enforcement by either agency has been lacking. See UNITED STATES GENERAL ACCOUNTING OFFICE, WETLANDS: THE CORPS OF ENGINEERS' ADMINISTRATION OF THE SECTION 404 PROGRAM, at 55-74 (1988).

75. The five occasions are: North Miami Landfill, 46 Fed. Reg. 10203 (Feb. 2, 1981); M.A. Norden Site, 49 Fed. Reg. 29142 (July 18, 1984); Jack Maybank Site, 50 Fed. Reg. 20291 (May 15, 1985); Bayou Aux Carpes Site, 50 Fed. Reg. 47267 (1985); and Sweedens Swamp Site (Pyramid), 51 Fed. Reg. 22977 (June 24, 1986).

76. The dispute over the proposed mall at Sweedens Swamp has generated four federal opinions in four different courts, and these opinions constitute the existing body of case law concerning EPA's veto powers under § 404(c). The first opinion, issued by the district court for the District of Columbia, upheld EPA's authority to initiate the § 404(c) process in the face of the Corps' decision to issue a dredge and fill permit to Pyramid. Pyramid had agrued that EPA could begin § 404(c) procedures only after determining that the permitted activity could have an unacceptable adverse effect, and that the agency cannot revisit issues already decided by the Corps in its consideration of a permit application. See Newport Galleria Group v. Deland, 618 F. Supp. 1179, 16 ELR 20033 (D.D.C. 1985). The second decision, by the district court for the District of Massachusetts, ruled that the deadline established in EPA's regulations for issuance of a veto recommendation is not jurisdictional. See Bersani v. Deland, 640 F. Supp. 716, 16 ELR 20795 (D. Mass. 1986); see also supra note 67. The district and circuit court opinions upholding the veto itself constitute the remaining two decisions. See Bersani v. United States Environmental Protection Agency, 674 F. Supp. 405, 18 ELR 20001 (N.D.N.Y. 1987), aff'd, 850 F.2d 36, 18 ELR 20874 (2d Cir. 1988) References in text to the Bersani case refer to these latter two decisions.

For a general discussion of the background and issues of the case, see NATIONAL AUDUBON SOCIETY, AUDUBON WILDLIFE REPORT 1987 186-88, 196 (1987). For a discussion of the district court's holding, see Liebesman, The "Sweedens Swamp" Controversy — Focusing on EPA's Role in the Clean Water Act § 404 Program, National Wetlands Newsletter at 15 (Nov.-Dec. 1987).

77. See 674 F. Supp. at 413, 18 ELR at 20004.

78. See supra notes 23-33 and accompanying text.

79. See 40 C.F.R. § 230.10(b) (1987).

80. 674 F. Supp. at 415-417, 18 ELR at 20004-20005.

81. 674 F. Supp. at 414, 18 ELR at 20004.

82. The court notes that all of the guidelines, and the FWPCA § 403 criteria for determining ocean degradation on which they are based, are "a means to evaluate discharges into the aquatic environment," and that "applying these standards to a proposed discharge in a particular context does no violence to the policy underlying the Act." Id. The criteria listed at § 403, 33 U.S.C. § 1343, ELR STAT. FWPCA 054, include the existence of alternatives. See supra note 23. The court stated that it "rejects Pyramid's contention that the fact that Section 403(c) and Section 404(b) are concerned with a greater number of environmental factors than is Section 404(c) limits the manner in which the EPA may determine the effect on the 404(c) resources, including the practicable alternatives test." 674 F. Supp. at 414, 18 ELR at 20004 (emphasis by court).

83. 40 C.F.R. part 231 (1987).

84. 674 F. Supp. at 414-415, 18 ELR 20004. In a related argument, Pyramid argued before the district court that EPA's veto was arbitrary and capricious because the agency failed to make an explicit finding of unacceptable adverse effects. Instead, asserted Pyramid, EPA based its veto solely on its conclusion that an alternative existed. See Memorandum in Support of Plaintiffs' Motion for Summary Judgment at 47-50, ELR PEND. LIT 65941, No. 86-CIV-772 (TAM) (plaintiffs' motion for summary judgment filed Nov. 24, 1986) [hereinafter Plaintiffs' Memorandum]. The district court rejected this argument, noting that EPA's final determination characterized the potential wildlife losses as "substantial" and "significant." 674 F. Supp. at 419-420, 18 ELR at 20006-07. The court stated, "Although [EPA's veto] decision bases its finding of unacceptability, in part, on avoidability, it also considers the cumulative impact of similar losses and the nature of the loss in this particular context in reaching its decision." 674 F. Supp. at 420, 18 ELR at 20007. Pyramid did not reassert the argument on appeal. See infra notes 121-125 and accompanying text.

85. 40 C.F.R. § 231.2(e) (1987).

86. 674 F. Supp. at 414-415, 18 ELR at 20004. As a logical matter, Pyramid's insistence that the unacceptability and avoidability of a harm are unrelated is puzzling. By this line of reasoning, a doctor's decision whether to use a treatment with harmful side effects should not be influenced by the existence of an alternate treatment that would accomplish much the same result, but with none of the incidental harm. The judgment of a doctor who fails to see the relevance of the less harmful treatment is surely questionable, because avoidability is necessarily a factor in the equation of unacceptability.

87. 674 F. Supp. at 415-417, 18 ELR at 20004-20005. This issue was also addressed by the district court for the District of Columbia in an earlier Sweedens Swamp case, Newport Galleria Group v. Deland. 618 F. Supp. 1179, 1183, 16 ELR 20033, 20035 (D.D.C. 1985) ("Section 404(c) would be a curious veto power, indeed, if, as Pyramid suggests, courts could prevent the EPA from reviewing those very findings upon which the Corps based its decision to issue the permit.").

88. See infra notes 96-125 and accompanying text.

89. See supra note 31 and accompanying text. This is clearly appropriate, since EPA administers most of the other federal programs with which proposed dredge and fill activities must comply, while the Corps administers none of them.

90. The dispute over the application of the alternatives analysis to Sweeden Swamp, and the district and appellate courts' rulings on the availability of the alternative, are discussed at infra notes 96-125 and accompanying text.

91. Such a conclusion, although based on different reasons, would be similar to Attorney General Civiletti's opinion that Congress intended EPA to have final say with regard to questions of geographical jurisdiction. See supra notes 52-53 and accompanying text.

92. 674 F. Supp. at 412, 18 ELR 20003.

93. 850 F.2d at 45-46, 18 ELR at 20879.

94. 850 F.2d at 46, 18 ELR at 20879.

95. Of course, this will not happen if EPA does not present a credible veto threat. Given the massive number of permit applications and the extremely small number of past EPA vetoes, the Corps may not see any practical reason to abide by an EPA interpretation with which it disagrees.

96. See supra notes 30-33 and accompanying text.

97. See 40 C.F.R. § 230.10(a) (1987). See also supra note 30 and accompanying text.

98. See id. at § 230.10(a)(3).

99. See id.

100. 40 C.F.R. § 230.3(q) (1987). The main components of practicability are the availability of an alternative, and its feasibility.

101. 40 C.F.R. § 230.10(a)(2) (1987).

102. Pyramid had also argued before the district court that EPA had erroneously found that the alternative was a feasible site for the shopping mall. See 674 F. Supp. at 417, 18 ELR at 20005-06. The court, noting that EPA had considered all of the factors that Pyramid had cited — distance from the primary trade area, lack of visibility from nearby highways, zoning, past commercial failures at the site — declined to hold that EPA's finding of feasibility was arbitrary. See id. The issue was not raised on appeal. The issue of what constitutes a feasible (as opposed to an available) alternative will likely prove very controversial in future § 404 disputes.

103. 674 F. Supp. at 419, 18 ELR at 20006; 850 F.2d at 47, 18 ELR at 20880.

104. See supra note 103. The Second Circuit alternatively held that there was sufficient evidence in the record for EPA to have reasonably concluded that Pyramid entered the market in the spring of 1983. See 850 F.2d at 47, 18 ELR at 20880.

105. See Plaintiffs' Memorandum, supra note 84, at 29-33; at 25-26; Brief for Plaintiffs-Appellants at 23-25, ELR PEND. LIT. 65996, No. 87-6275 (appellants' brief filed Jan. 19, 1988) [hereinafter Appellants' Brief].

106. See Plaintiffs' Memorandum, supra note 84, at 29-33; Appellants' Brief, supra note 105, at 29.

107. EPA argued:

At least in the situation where a developer acquires property for a specific project, it is both fair and consistent with the guidelines to review the period of availability including the period when the developer is selecting the site for his project. If the regulations are going to have any effect on the conduct of citizens, the consideration of alternative, non-wetland sites must occur before the permit application is made, not just at the time the permit application is submitted.

Memorandum in Support of Defendants' Motion for Summary Judgment and in Opposition to Plaintiffs' Motion for Summary Judgment at 60, ELR PEND. LIT. 65941, No. 86-CIV-722 (defendants' memorandum filed Feb. 18, 1987) (emphasis added).

108. 850 F.2d at 43-44, 18 ELR at 20878. The dissent asserted that practicable alternatives should be considered with respect to the time of agency decision on the permit application, and views the market entry theory as "punishing" and "vague." 850 F.2d at 47-50, 18 ELR 20881 (Pratt, J., dissenting). The dissent was clearly troubled by the fact that developers who enter the market at one particular time may be rewarded with permits, while those entering the market at a different time will be denied permits because alternatives happen to be available. The dissent fails to explain, however, how shifting the relevant point of time from market entry to agency decision will alter this objection; whenever consideration of alternatives is linked to a particular point in time, circumstances at a different point in time may yield a different result.

109. See 850 F.2d at 44, 18 ELR at 20878.

110. Id. The court also rejected Pyramid's argument that the market entry theory is not in accord with prior case law, noting that this precise question has never before arisen. See 850 F.2d at 44-45, 18 ELR at 20878-79.

111. 40 C.F.R. § 230.10(d) (1987). See also supra note 33 and accompanying text.

112. See 40 C.F.R. subpart H (1987).

113. See 40 C.F.R. § 230.5 (1987).

114. See 33 C.F.R. § 320.4(r) (1987). See also 33 C.F.R. § 325.4 (1987).

115. Barrows, Mitigation in the Army Corps of Engineers Regulatory Program, National Wetlands Newsletter at 11 (Sept.-Oct. 1986).

116. See Ciupek, Protecting Wetlands Under Clean Water Act § 404: EPA's Conservative Policy on Mitigation, National Wetlands Newsletter at 12 (Sept.-Oct. 1986).

117. See id. at 13.

118. The actual decision to deny the permit was made by the Corps' headquarters in Washington. The district engineer had recommended that the permit for Sweedens Swamp be denied. See supra notes 1-3 and accompanying text.

119. See supra notes 1-5 and accompanying text.

120. Final Determination of the Assistant Administrator for External Affairs Concerning the Sweedens Swamp Site in Attleboro, Massachusetts Pursuant to Section 404(c) of the Clean Water Act at 3 (May 13, 1986) [hereinafter Final Determination].

121. See supra note 84. A § 404(c) veto must be based on a finding of unacceptable adverse effects.

122. See 674 F. Supp. at 419-420, 18 ELR at 20007. See also supra note 84.

123. See 674 F. Supp. at 420, 18 ELR at 20007.

124. See supra notes 77-89 and accompanying text.

125. EPA's final determination on the veto, to which the court cited at length, made it very clear that most of EPA's objections to the proposed mitigation were of a generic nature. See Final Determination, supra note 120.

126. 33 U.S.C. § 1251, ELR STAT. FWPCA 003.

127. Perhaps an even more expanded approach to what constitutes a practicable alternative is needed. Arguably, even an alternate project capable of being done by someone other than the applicant could be a practicable alternative to the applicant's proposal, so long as the same basic social purposes were fulfilled. Under this approach, an upland shopping mall project by another developer would be cause for denial of a permit to an applicant who wished to build a mall on a wetland in the same area.

128. See Final Determination, supra note 120, at 3 ("The truth is the Swamp is neither dysfunctional and useless, nor is it a pristine wetland of supreme individual value.")

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