Duarte Nursery Requests Postponement of New Biden “Waters of the United States” Rule

Note: This letter was sent to Wine Industry Insight by John Duarte with permission to publish it in its entirety.

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BRISCOE IVESTER & BAZEL LLP

235 MONTGOMERY STREET

SUITE 935

SAN FRANCISCO, CALIFORNIA 94104 (415) 402-2700

 

 

February 7, 2022

 

 

U.S. Environmental Protection Agency 1200 Pennsylvania Avenue NW Washington, D.C. 20460

 

Re:      Docket ID No. EPA-HQ-OW-2021-0602

Revised Clean Water Act Definition of “waters of the United States” Dear Administrator Regan and Office of Water Staff,

The following comments are submitted on behalf of Duarte Nursery, Inc., on the U.S. Environmental Protection Agency (EPA) and United States Army (the Army)’s proposed joint rulemaking to redefine, for the fourth time in seven years, the term “navigable waters” or “waters of the United States” under the Clean Water Act. See 86 Fed. Reg. 69,372 (Dec. 7, 20221) (“the Proposal” or “Proposed Rule”). We appreciate the opportunity to comment on this very important rulemaking.

 

The Agencies Should Withdraw the Proposed Rule in Light of the Supreme Court’s Grant of Certiorari in Sackett v. EPA

 

The Supreme Court of the United States has granted the petition for writ of certiorari in Sackett v. United States, 2022 WL 199378 (Mem) (January 24, 2022). As you know, the question presented in that petition was whether the Court wished to revisit Rapanos v United States, 547 U.S. 715 (2006), to adopt the plurality opinion’s test for wetlands jurisdiction under the Clean Water Act. Given that the Proposed Rule uses both the Rapanos plurality test and Justice Kennedy’s concurring opinion to define “navigable waters,” it would make sense to defer completion of the pending rulemaking until after the Supreme Court rules on that question.

 

We therefore recommend that EPA and the Army (the Agencies) publish a notice in the Federal Register that they are withdrawing the Proposed Rule, leaving the existing Navigable Waters Protection Rule in place pending the Supreme Court’s decision in Sackett v. EPA.

 

 

 

The Costs of The Proposal Far Exceed “Zero”

 

The Preamble to the Proposed Rule asserts that the costs of the Proposal are zero. 86 Fed. Reg. 69,375 (“The agencies’ primary estimate is that the proposed rule would have zero impact.”). This is untenable. The real-world effect of the Proposal will be to impose billions of dollars on farm properties which contain vernal pools in California’s Central Valley. We expect that similar costs would be visited on farmland across the Upper Midwest in the Prairie Pothole Region and in other parts of the nation.

 

This cost impact begins with the fact that permitted discharges to “navigable waters” under the Act typically require mitigation for unavoidable impacts, frequently at a 3-1 or higher mitigation ratio. Vernal pool mitigation credits in California generally can be expected to cost more than $100,000 per acre. The following chart, taken from the website of Eco-Asset Solutions & Innovations at http://www.easillc.com/mitigation-credit-price-report-mcpr/, substantiates the

$100,000/acre estimate used in these comments.

 

 

 

This companion chart from the same source documents a national trend in wetland mitigation bank credit costs rising sharply above $100,000/acre nationally.

 

 

From this $100,000/acre base mitigation cost, we next turn to the experience of California farmers like Duarte Nursery and Jack LaPant, each of whom have been sued civilly by the Army for plowing farmland allegedly containing vernal pools without a dredge and fill permit from the Army. See United States Answer and Counterclaim, Duarte Nursery, Inc., v. U.S. Army, E.D. Cal. case no. 2:13-cv-02095, ECF 28; and Complaint, United States v. Roger J. LaPant, E.D. Cal. case no. 2:16-cv- 01498, ECF 1. In each of these cases, the Army through the Department of Justice took the position that the Clean Water Act’s statutory exemption from dredge and fill permitting for ordinary farming activities, see 33 U.S.C. § 1344(f)(1)(A) (the Farming Exemption), was not applicable due to the interval in time since the previous time the properties in question had been plowed. See Brief in Support of United States Motion for Summary Judgment at 19, Duarte Nursery, Inc., v. U.S. Army, 2:13-cv- 02095, ECF 145-1; Brief in Support of United States Motion for Summary Judgment at 25, U.S. v. LaPant, 2:16-cv-01498, ECF 124-1.

 

We estimate that the majority of the farmland in California’s Central Valley that still contains identifiable vernal pools would be considered by the Army, the EPA, and the Justice Department, to be “ineligible” for the Farming Exemption on the same basis as the federal government’s arguments in the Duarte Nursery and LaPant litigation, and therefore in the view of the Agencies not be farmed without a dredge and fill permit.

 

The next question then is how many such acres there are. California’s Great Valley Vernal Pool Habitat Status and Loss: Photorevised 2005 (Holland, Robert F.,

 

 

 

December 2009), reports that in 2005 the Central Valley had 896,000 acres of vernal pool habitat. It does not appear that all of those roughly 900,000 acres of habitat are susceptible to delineation as vernal pools. If the same density of the Duarte Nursery Property in Tehama County (roughly 5-10%) were applied Valley-wide, then the actual acreage of potentially regulated vernal pools would be between 45,000 and 90,000 acres.

 

Recent field experience shows that many of these vernal pools are not currently regulated, however, under the Clean Water Act as interpreted by the Navigable Waters Protection Rule, 85 Fed.Reg. 22,250 (April 21, 2020).

 

Attached at Exhibit A is a delineation of the Duarte Nursery Property approved by the Army. It shows two categories of vernal pools. One, in pink, are those that are regulated as “adjacent wetlands” under the NWPR. The other, in blue, are vernal pools that are not regulated as “adjacent wetlands” under the NWPR. Both categories were previously alleged by the Justice Department in the Duarte Nursery litigation to be regulated as “adjacent wetlands” under the 1986 regulations and the Post-Rapanos Guidance. In other words, essentially the same rules that the Agencies seek to reinstate under the Proposed Rule.

 

The result of the application of the current regulations (i.e. the NWPR) is the reduction of 12.531 acres of regulated vernal pools from the 24.363-acre total that had been (per Justice Department and Army allegations) subject to Clean Water Act permitting under the 1986 regulations and Post-Rapanos Guidance. That is, a 51% reduction.

 

It is clear from this that the effect of the Proposed Rule will be to reregulate those vernal pools which are currently not federally regulated by the Navigable Waters Protection Rule. If it is assumed that the 51% reduction in vernal pool acreage regulated as “adjacent wetlands” under the Act were generally applicable Valley- wide, then of the 45,000 – 90,000 acres of vernal pools in the Valley estimated above, approximately 22,500 – 45,000 acres of those vernal pools are not currently federally regulated as “adjacent wetlands” under the Clean Water Act and the Navigable Waters Protection Rule.

 

Thus, the adoption of the Proposed Rule would impose dredge and fill permitting requirements on 22,500 – 45,000 acres of vernal pools that are not currently subject to that permitting requirement. The cost of such permitting would include the costs of compensatory mitigation, at no less than $100,000 per credit acre, at a likely ratio of at least 3-1. We estimate that the permitting costs imposed only for compensatory mitigation on agricultural and other activity in California’s Central

 

 

 

Valley simply due to the Proposal’s inclusion of currently unregulated vernal pools as “adjacent wetlands” is conservatively $6.75 to $13.5 billion.

 

The remaining point in this cost analysis is that whatever the status of the Agencies failure to defend the NWPR in litigation in the District Courts of Arizona and New Mexico, the vacatur of that regulation by those courts is binding only between the limited number of parties to those two proceedings and is therefore not the status quo as to every other regulated party in the country. See, e.g., United States

1. Mendoza, 464 U.S. 154, 158 (1984) (nonmutual offensive collateral estoppel does not operate against the federal government where government declined to appeal district court judgment). The Agencies cannot therefore, in a notice and comment rulemaking whose avowed purpose is to revise the Navigable Waters Protection Rule, see 86 Fed. Reg. at 69,382-69,383, pretend that the NWPR is not the status quo for purpose of assessing the economic impacts of the Proposed Rule.

 

Joinder in Other Comments Identifying Legal Defects in the Proposed Rule

 

Duarte Nursery joins in those other comments filed which point out that the Proposed Rule exceeds the legal authority of the Agencies under the Act, on the bases that:

 

• the text of the Act does not extend to the regulation of wetlands and swales that are situated on private property and are not directly adjacent to (i.e. cannot be distinguished from) navigable in fact waterbodies,

 

• the Commerce Clause and Tenth Amendment forbid the Agencies from exercising federal authority over local land use regulation (a traditional subject of state police power) in the areas of farming and ranching,

 

• the Agencies failed to properly identify a reasonable range of interpretation of the phrases “navigable waters” and “waters of the United States” and in the Proposed Rule exceeded any alleged delegation of authority in the Clean Water Act to interpret those phrases,

 

• the non-delegation and void for vagueness doctrines forbid an interpretation of the Act that would allow the Agencies the unbound discretion to “choose a point on a continuum,” see 86 Fed. Reg. at 69,386,

 

• the Supreme Court’s decision in Solid Waste Agency of Northern Cook County v. U.S. Army, 531 U.S. 159 (2001) (SWANCC), forecloses the Agencies from regulating water bodies and wetlands that are not directly adjacent to navigable-in- fact water bodies,

 

 

 

 

• SWANCC limits the holding of Riverside Bayview Homes v. United States, 474 U.S. 121 (1985), to the limited facts of wetlands that are immediately adjacent to navigable-in-fact waterways, and

 

• the Rapanos plurality supplies the applicable rule of law, rather than the Justice Kennedy’s Rapanos

 

Conclusion

 

On the foregoing basis, Duarte Nursery submits that the Proposed Rule is illegal, that is supporting economic analysis is flawed and fails to support the Proposed Rule, and the adoption of the Proposed Rule would be arbitrary and capricious. The Agencies should formally withdraw the Proposal, and await the outcome of Sackett v. United States at the Supreme Court before resuming rulemaking.

 

 

Sincerely yours,

 

BRISCOE IVESTER & BAZEL LLP

 

Tony Francois

 

 

TF