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Holding Pond Not Subject to Clean Water Act, Court Rules
Home builders seeking clarity on Clean Water Act regulations got one step closer on March 8 when the Ninth Circuit U.S. Court of Appeals reversed a lower court ruling in San Francisco Baykeeper v. Cargill Salt Division, deciding that a pond is not covered by the law. NAHB filed a friend-of-the-court brief in this case.
“These regulatory burdens translate into expenses that increase the price of homes,” said NAHB President Brian Catalde. “We need to stop this bureaucratic expansion on behalf of our home buyers.”
In Baykeeper, the district court ruled last year that a holding pond used to deposit waste saltwater from Cargill’s salt-making business was subject to regulation under the act because it is next to Mowry Slough, a navigable tributary of the San Francisco Bay.
However, Judge William C. Canby Jr. pointed out in last week’s decision, an earthen berm separates the pond from the slough. “We conclude that mere adjacency provides a basis for [Clean Water Act jurisdiction] only when the relevant waterbody is a ‘wetland,’ ” he said.
Thursday’s decision is particularly striking because it came from the Ninth Circuit, said Randy Lee, chair of the NAHB Legal Action Committee and a lawyer and developer in New York City. “This is the most environmentally-oriented court in the country, yet it has limited the scope of the Clean Water Act in a very important way. The Ninth Circuit has recognized that both Congress and the U.S. Supreme Court do not allow federal regulation over any and all water in the United States. The court made it crystal clear that there are limits on what the federal government can regulate. This is a great victory for NAHB's members.”
Arguments on both sides of the case also focused on whether the pond had a “significant nexus” to the slough, the test created by Supreme Court Justice Anthony M. Kennedy in last year’s Rapanos and Carabell decision, in which NAHB also submitted an amicus brief. Judge Canady said that test only applies to “wetlands with a significant nexus to a navigable-in-fact waterway” — and not to ponds or other non-wetland waters.
And even if the test were applicable, there was not enough evidence to find that the pond had a significant nexus to the slough, the court said, a point that NAHB made clear in its brief.
The Clean Water Act was originally written to cover “navigable waters of the United States,” but since then jurisdiction has stretched in some cases to cover roadside ditches, curbs and gutters and ephemeral desert washes — sparking a wave of lawsuits.
And almost a year after the Rapanos decision, the Corps has yet to act on its stated intention to issue clearer guidance to builders, leaving home building projects on hold or in limbo, driving up costs and eventually impairing housing affordability.
In its Baykeeper decision, the circuit court said that the lower court was incorrect when it found that “‘the same characteristics that justify protection of adjacent wetlands …apply to adjacent ponds.’ This analysis was improper.”
“We should all want the same thing: protection for the nation’s water supply. But the rules about how to achieve that need to be clear, for the sake of all of us,” said Catalde.
“Let’s keep our environmental regulations strong, but make them sensible. Make them consistent. Our nation’s home builders — and our nation’s home buyers — deserve no less,” he said.
For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.
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