United States v. Interstate General Co.

No. 01-4513 (39 Fed. Appx. 870) (UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT July 2, 2002)

The court holds that the U.S. Supreme Court's decision in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159, 31 ELR 20382 (2001) (SWANCC), did not fundamentally or significantly change the law governing a development company's conviction for discharging fill material into protected wetlands in violation of the Clean Water Act. In 1999, the company pled guilty to one count of knowingly filling wetlands and entered into a consent decree with the United States. After the Supreme Court decided SWANCC, the company filed a petition for writ of error coram nobis and a motion to vacate the consent decree under Fed. R. Civ. P. 60(b)(5), arguing that SWANCC legalized the conduct underlying the criminal conviction and the consent decree. The court holds that the district court properly denied both applications. Neither the writ of error coram nobis nor the motion to vacate is warranted unless there has been a fundamental or significant change in the law governing the case. The company argued that such a change had occurred because SWANCC eliminated the federal government's jurisdiction over the wetlands at issue. The court holds, however, that the company is incorrect. At issue in SWANCC was the U.S. Army Corps of Engineers' jurisdiction over an isolated intrastate body of water under 33 C.F.R. § 328.3(a)(3), the only subsection that covers isolated bodies of water. Here the Corps' jurisdiction does not rest on subsection (a)(3). Rather, the Corps' jurisdiction for purposes of the guilty plea and the consent decree is based on 33 C.F.R. § 328.3(a)(1), (a)(5), and (a)(7). Further, because the Fourth Circuit already invalidated 33 C.F.R. § 328.3(a)(3) in its entirety in United States v. Wilson, 133 F.3d 251, 28 ELR 20299 (4th Cir. 1997), an opinion issued before either the plea or the consent decree, SWANCC effected no relevant change in decisional law in the circuit.

[Prior decisions in this litigation are published at 28 ELR 20299 and 31 ELR 20750.]

Counsel for Plaintiff
William W. Hamel, Ass't U.S. Attorney
U.S. Attorney's Office
101 W. Lombard St., Baltimore MD 21201
(410) 209-4800

Counsel for Defendants
Alfred H. Moses
Covington & Burling
1201 Pennsylvania Ave. NW, Washington DC 20004
(202) 662-6000

Before Lutting, Williams, and Michael, JJ.

[32 ELR 20781]

Per curiam (before Lutting, Williams, and Michael, JJ.):

Opinion

In 1999 Interstate General Co., L.P. (IGC) pled guilty to one count of knowingly discharging fill materials into protected wetlands in violation of the Clean Water Act, 33 U.S.C. §§ 1311(a) & 1319(c)(2)(A), and entered into a consent decree with the United States. The consent decree, among other things, required IGC to implement a remediation plan for the disturbed wetlands. In January 2001 the Supreme Court decided Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159 [31 ELR 20382] (2001) (SWANCC), which limited the scope of the Clean Water Act. Soon after, IGC filed a petition for writ of error coram nobis and a motion to vacate the consent decree under Fed. R. Civ. P. 60(b)(5), arguing that SWANCC legalized the conduct underlying the criminal conviction and the consent decree. Concluding that SWANCC did not change the decisional law applicable to this case, the district court rejected both the petition for writ of error coram nobis and the motion to vacate. We agree with the district court and therefore affirm its order.

In September 1995 the United States began parallel criminal and civil proceedings against IGC, St. Charles Associates, L.P. (SCA), and James J. Wilson, the chief executive officer of both companies. IGC is a publicly traded land development company. IGC is also the general partner of SCA, a limited partnership that owns land under development in St. Charles, Maryland. The defendants were charged with violating the Clean Water Act by discharging fill material onto four parcels of wetlands in St. Charles without a permit from the United States Army Corps of Engineers (the Corps).

Section 404(a) of the Clean Water Act authorizes the Corps to regulate the discharge of fill materials into "navigable waters." 33 U.S.C. § 1344(a) (2001). The Act defines "navigable waters" as "the waters of the United States." 33 U.S.C. § 1362(7) (2001). The Corps has issued regulations defining "waters of the United States" to include

(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 . . .;

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

(5) Tributaries of waters identified 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.

33 C.F.R. § 328.3(a) (2001). The wetlands at issue here are adjacent to the headwaters of small streams that flow into Port Tobacco Creek, Piney Branch, or Mattawoman Creek. These waters in turn flow into the Potomac River and ultimately the Chesapeake Bay. The Chesapeake Bay is navigable. In short, the wetlands are adjacent to tributaries of traditional navigable waters.¹

In February 1996 a jury convicted the defendants on four felony counts of knowingly discharging fill material into wetlands protected by the Clean Water Act. Wilson received a 21-month prison term and a $ 1 million fine. IGC was fined $ 2 million and placed on five years probation, and SCA was fined $ 1 million and placed on five years probation. The defendants were also ordered to implement a wetlands restoration plan.

This court subsequently reversed the convictions and remanded the matter for a new trial. See United States v. Wilson, 133 F.3d 251 [28 ELR 20299] (4th Cir. 1997). The problem was that the district court, in instructing the jury, had relied on 33 C.F.R. § 328.3(a)(3) as a possible basis for the Corps's jurisdiction. We concluded that the Corps had exceeded its congressional authorization under the Clean Water Act in promulgating § 328.3(a)(3). Consequently, we held that § 328.3(a)(3) was invalid and that the district court's instruction based on that regulation was erroneous. Id. at 256-57.

After remand the parties settled both the criminal and civil aspects of the controversy. IGC pled guilty to a single felony count and paid a $ 1.5 million fine. The parties also signed a consent decree, which required IGC to pay a civil penalty of $ 400,000 and to implement a wetland remediation plan. In return, the government dismissed all charges against Wilson and SCA. The district court sentenced IGC and entered the consent decree on November 22, 1999. After the Supreme Court decided SWANCC, IGC filed a petition for a writ of error coram nobis and a motion to vacate the consent decree under Fed. R. Civ. P. 60(b)(5). The district court denied both applications on June 12, 2001, and IGC appealed.

II.

Neither the writ of error coram nobis nor the motion to vacate is warranted unless there has been a fundamental or significant change in the law governing this case. IGC contends that such a change has occurred because SWANCC eliminated the federal government's jurisdiction over the St. Charles wetlands. As a result, IGC claims that it did not violate the Clean Water Act by filling in those wetlands. We disagree because SWANCC deals with a provision of the regulation. [32 ELR 20782] 33 C.F.R. § 328.3(a)(3), that the government did not use to assert jurisdiction for the plea agreement or the consent decree.

Federal courts have the power under the All-Writs Act, 28 U.S.C. § 1651(a), to grant a writ of error coram nobis vacating a conviction after a sentence has been served. United States v. Morgan, 346 U.S. 502 (1954). But this extraordinary relief should be granted only if an error "of the most fundamental character" has occurred, and no other remedy is available. United States v. Mandel, 862 F.2d 1067, 1075 (4th Cir. 1988). While historically this common law writ was used to correct fundamental errors of fact, Mandel recognized that the writ may also be issued to correct fundamental errors of law. Id. Such an error may occur when a significant change in the law following a conviction means that the defendant was convicted for conduct that is no longer illegal. For example, in Mandel we granted a writ of error coram nobis because the defendants' convictions were based on acts subsequently determined to be beyond the reach of the federal statute under which they were convicted. As with coram nobis, a threshold question under Fed. R. Civ. P. 60(b)(5) is whether there has been a significant change in the law. Agostini v. Felton, 521 U.S. 203, 215-16 (1997).² Rule 60(b)(5) gives a court discretion to void a consent decree if "it is no longer equitable that the judgment should have prospective application." In other words, it is appropriate to grant a Rule 60(b)(5) motion "if the court is convinced that [its prior decision] is clearly erroneous and would work a manifest injustice." Agostini, 521 U.S. at 236 (internal quotations omitted). According to the Supreme Court, this may occur "when the party seeking relief from an injunction or consent decree can show a significant change either in factual conditions or in law." Id. at 215 (internal quotations omitted). IGC argues that SWANCC significantly changed the law applicable to its conduct.

Both IGC's guilty plea and the consent decree assume that the Corps has jurisdiction under the Clean Water Act to regulate the St. Charles wetlands. This jurisdiction is no longer asserted under 33 C.F.R. § 328.3(a)(3) because United States v. Wilson, 133 F.3d 251 [28 ELR 20299] (4th Cir. 1997), declared that subsection of the regulation invalid. Instead, the Corps asserts jurisdiction over the wetlands because they are adjacent, 33 C.F.R. § 328.3(a)(7), to tributaries, § 328.3(a)(5), of traditional navigable waters, § 328.3(a)(1).The factual predicate for this jurisdiction, specifically, that the St. Charles wetlands are adjacent to tributaries of traditionally navigable waters, has been acknowledged by the parties and this court. For example, the superseding information to which IGC pled guilty describes the wetlands as "jurisdictional wetlands, adjacent to waters of the United States." In addition, in Wilson we concluded that "the government demonstrated that water from these lands flowed in a drainage pattern through ditches, intermittent streams, and creeks, ultimately joining the Potomac River, a tributary of the Chesapeake Bay." Wilson, 133 F.3d at 254-55.

IGC's argument is that SWANCC eliminated jurisdiction over wetlands adjacent to waters that are not traditionally navigable even if those waters eventually flow into traditional navigable waters. According to IGC, SWANCC limited the Corps's jurisdiction to (1) traditional navigable waters and (2) wetlands immediately adjacent to traditional navigable waters. Consequently, IGC continues, SWANCC eliminated the Corps's jurisdiction over the disputed wetlands so that discharging fill into them without a permit does not violate § 404(a) of the Clean Water Act.

IGC is incorrect. The only clear change in law made by SWANCC is much more narrow. At issue in SWANCC was the Corps's jurisdiction over an isolated intrastate body of water. "Petitioner argued that respondents have exceeded their statutory authority in interpreting the CWA to cover nonnavigable, isolated, intrastate waters based upon the presence of migratory birds," SWANCC, 531 U.S. at 165-66 (emphasis added). The Corps's jurisdiction in SWANCC was based solely on 33 C.F.R. § 328.3(a)(3), the only subsection that covers isolated bodies of water. The Supreme Court's actual holding is limited to one particular application of 33 C.F.R. § 328.3(a)(3):

We hold that 33 C.F.R. § 328.3(a)(3) (1999), as clarified and applied to petitioner's balefill site pursuant to the "Migratory Bird Rule," 51 Fed. Reg. 41217 (1986), exceeds the authority granted to respondents under § 404(a) of the CWA.

SWANCC, 531 U.S. at 174. See also id. at 167 ("We conclude that the 'Migratory Bird Rule' is not fairly supported by the CWA."); id. at 171-72 ("We thus decline [to] . . . hold[] that isolated ponds, some only seasonal, wholly located within two Illinois counties, fall under § 404(a)'s definition of 'navigable waters' because they serve as habitat for migratory birds."). Because this court had already invalidated 33 C.F.R. § 328.3(a)(3) in its entirety in United States v. Wilson, 133 F.3d 251 [28 ELR 20299] (4th Cir. 1997), an opinion issued before either the plea or the consent decree, SWANCC effected no relevant change in decisional law in this circuit. In sum, SWANCC's holding addressed only the validity of 33 C.F.R. § 328.3(a)(3), and here the Corps's jurisdiction does not rest on subsection (a)(3). Rather, the Corps's jurisdiction for purposes of the guilty plea and the consent decree is based on 33 C.F.R. § 328.3(a)(1), (a)(5), and (a)(7). We therefore affirm the district court's order denying IGC's petition for writ of error coram nobis and denying IGC's motion to vacate the consent decree.

AFFIRMED

1. To avoid confusion between the statutory term "navigable waters" as defined in the Clean Water Act and the traditional use of the term to indicate waters that may be used in commerce, we refer to the latter as "traditional navigable waters."

2. Rule 60(b)(5) also applies if there has been a significant change in the facts, but IGC does not claim a factual change.