NOTE: the following article updates events contained in Wine Industry Insight’s special five article series that ran this week.

• Dire consequences face every farmer & landowner who fails to grasp the vast and vague regulation of the Clean Water Act
• Clean Water Act Permits: Expensive, time-consuming, uncertain
• Ag exemptions to the CWA in law and as interpreted by Courts, EPA & Army Corps of Engineers
• How does soil become a pollutant? And a plow a “point source” of pollution?
• Supreme Court’s “Nexus” author expresses second thoughts
• Clean Water Act: A Bare-Bones Primer

‘Significant Nexus’ Jurisdiction Test To Be Scrutinized

The U.S. Court of Appeals for the 9th Circuit will hear a new case over whether the Supreme Court’s years-old “significant nexus” test for determining Clean Water Act (CWA) jurisdiction is still binding within the circuit’s nine states, and if the court rejects the test it could exacerbate legal and regulatory confusion over the scope of the water law.

The case, Duarte Nursery Inc. v. Army Corps of Engineers, et al., will test whether Justice Anthony Kennedy’s opinion in the 2006 landmark split high court case Rapanos v. United States remains controlling law within the 9th Circuit. Duarte is claiming that a recent appellate ruling on how to apply split high court decisions means Kennedy’s test should no longer be seen as precedential, since he wrote only for himself and not a majority of the court.

In Rapanos the late Justice Antonin Scalia issued a competing opinion that set out a narrower test for granting CWA jurisdiction. But the two tests led to confusion over the law’s reach, prompting the George W. Bush administration to issue guidance seeking to implement Kennedy’s significant nexus test in jurisdictional decisions.

Industry groups, environmentalists and others said the guidance failed to resolve uncertainty over scope of the CWA, prompting the Obama EPA and Army Corps of Engineers to issue their joint rule designed to clarify the law’s reach. But that regulation drew attacks from all sides, and a legal challenge is pending in the 6th Circuit. The court has blocked EPA and the Corps from implementing the rule until the lawsuits are resolved.

Even while that case — which will set an important precedent on the agencies’ interpretation of the CWA — is pending, the Duarte 9th Circuit case threatens to create major new complications. If the court rejects the significant nexus test, it would be a break for the appellate court that has to date relied on Kennedy’s test, and it would also put the court at odds with other circuits that have generally used the test.

A ruling for the plaintiffs in Duarte — which deals with whether the farming operation is liable for discharging fill material into protected wetlands without a permit — would cover the 9th Circuit states of California, Nevada, Arizona, Oregon, Washington, Idaho, Montana, Alaska and Hawaii, but not be binding elsewhere.

Pending Litigation

Duarte originally filed suit U.S. District Court for the Eastern District of California over a cease-and-desist letter it received from the Corps telling it to stop farming on property where the agency feared fill was being released into protected wetlands.

District Judge Kimberly J. Mueller in a June 10 order then rejected many of Duarte’s claims that the the Corps unlawfully ordered it to stop farming on its property, but has yet to rule on the penalties it faces. Among the claims that the judge rejected was that the wetlands on Duarte’s property are not jurisdictional under the CWA, using the significant nexus test and not Scalia’s narrower test.

However, Mueller in subsequent Aug. 30 minute order said that she would allow the nursery to seek a 9th Circuit appeal on the question of whether the significant nexus test should still be binding in 9th Circuit states.

“Having carefully considered the parties’ briefing and the applicable law, the court is prepared to deny the motion for reconsideration in its entirety but grant a certificate of interlocutory appeal on the question of whether the ‘significant nexus’ test articulated in the Rapanos concurrence remains applicable,” she wrote.

It is unclear whether that interlocutory appeal will be combined with Duarte’s existing petition to the 9th Circuit asking it to overturn a separate portion of Mueller’s order, where she said the Corps’ enforcement action against Duarte, which it brought after the lawsuit began, was not unconstitutional “retaliation.”

Duarte is arguing that a new 9th Circuit decision shows Kennedy’s test should be disregarded since the 2006 high court decision represented a 4-1-4 vote among the justices, with no opinion commanding majority support. The farm says a June 13 en banc ruling from the 9th Circuit, United States v. Davis, established a rule that the reasoning of a split decision has no binding effect on lower courts.

“[W]here we can identify no rationale common to a majority of the Justices, we are bound only by the result,” Circuit Judge Richard Paez wrote for the en banc majority in Davis, a case dealing with criminal sentencing and the effects of the fractured 2011 high court opinion Freeman v. United States.

In a June 14 notice of supplemental authority to the district court, Duarte said “[A]ll eight of the other Justices in Rapanos specifically disagreed with Justice Kennedy’s sole concurrence. Under Davis, Justice Kennedy’s sole concurrence would not be controlling.”

Significant Nexus

If the 9th Circuit agrees with Duarte, it could undo the circuit’s test for CWA jurisdiction, leaving it up to appellate and district judges to consider anew whether to apply Kennedy’s test for a significant nexus between waterbodies; Scalia’s more narrow test, set out in his separate Rapanos opinion, for a “continuous surface connection” between the marginal wetland and other jurisdictional waters; or another standard entirely.

Such a decision would also create new confusion over the joint EPA-Corps rule on which waters are protected by the CWA, since the agencies’ jurisdiction rule is based on the significant-nexus test. EPA and the Corps wrote the jurisdiction rule to resolve uncertainty that grew out of Rapanos over the definition of “waters of the United States” that the law says are subject to its terms.

The rule is currently stayed nationwide pending the result of appellate challenges from states, industry and environmentalists that were consolidated in the 6th Circuit, while a host of district court challenges are on hold thanks to ongoing conflict over which courts properly have authority over a rule governing the CWA’s reach.

An eventual Supreme Court decision on the jurisdiction rule’s merits could provide new authority on whether the significant-nexus test is the proper standard for applying the CWA going forward — potentially superseding whatever ruling the 9th Circuit issues in Duarte.

However, the appellate court’s ruling would be controlling until the justices decide the jurisdiction rule challenges, meaning regulators in the 9th Circuit states would be required to apply to rapidly shifting tests for CWA protection to respond to each new court decision. — David LaRoss (dlaross@iwpnews.com)