First Quarter 2007

Clean Water Act "Tulloch Rule" Struck Down by D.C. Federal Judge

Holland & Knight Newsletter
Rafe Petersen

On January 30, 2007, United States District Court for the District of Columbia Judge James Robertson issued an opinion regarding the scope of activities that are regulated under Section 404 of the federal Clean Water Act (CWA). Section 404 requires permits from the U.S. Army Corps of Engineers for the any “discharge” (i.e., “addition” of “dredged or fill material” into a “waters of the Untied States,” including wetlands. In a sweeping decision that set aside what is commonly known as the Tulloch II Rule, the court took strong issue with the Corps’s and the Environmental Protection Agency’s (EPA) view that the CWA authorizes the federal agencies to require permits for mechanized earthmoving and other excavation activities. The court sent a strong message to the federal agencies that they had once again overstepped the limits of their authority by enacting a rule that attempted to regulate all earthmoving activities in regulated waters regardless of whether such activities actually resulted in a “discharge” of a pollutant.

The ruling was actually the second time that the federal courts have held that the Corps and EPA had overreached their authority by attempting to regulate activities that do not result in “additions” of material into regulated waters – a statutory prerequisite for the agencies to regulate an activity. In 1998, the D.C. Circuit invalidated the first Tulloch Rule, which was issued after the Corps entered into a settlement agreement over an enforcement action related to draining of wetlands without a permit (Tulloch was the name of the Corps District Engineer that was named in the complaint). The D.C. Circuit held that the 1993 rule improperly allowed the agencies to assert jurisdiction over virtually any activity conducted in regulated waters, including those that merely resulted in “incidental fallback” of soil (i.e., the small amounts of soil that fall from a dredge bucket during excavation activities). See NMA v. Corps, 145 F.3d 1399 (D.C. Cir. 1998). The court noted that:

… the straightforward statutory term “addition” cannot reasonably be said to encompass the situation in which material is removed from the waters of the United States and a small portion of it happens to fall back. Because incidental fallback represents a net withdrawal, not an addition, of material, it cannot be a discharge.

Id. Observing that the “overriding purpose” of Tulloch I “appears to be to expand the Corps’s permitting authority to encompass incidental fallback and, as a result, a wide range of activities that cannot remotely be said to ‘add’ anything to waters of the United States,” id. at 1405, the Court overturned the rule. The Court then indicated that a “reasoned attempt” to draw a “bright line between incidental fallback on the one hand and regulable redeposits on the other” “would merit considerable deference” and upheld the lower court’s injunction. Id.

The Corps and EPA issued Tulloch II in 2001 in response to the NMA opinion. Tulloch II defined unregulated “incidental fallback” for the first time. Significantly, the rule stated that the agencies “regarded” all mechanized earthmoving activities as regulated unless project specific evidence was provided demonstrating that such activities resulted in no more than “incidental fallback.” The rule was immediately challenged by the National Stone Sand and Gravel Association, the American Road and Transportation Builders Association, the Nationwide Public Projects Coalition and the National Association of Home Builders. Collectively, these associations alleged that the agencies had once again overstepped the limited scope of their authority.

In its January 30 ruling, the court held that the Corps and EPA had failed to properly address the issues raised by the 1998 opinion of the DC Circuit. The court ruled that EPA and the Corps failed to heed the earlier ruling by not coming up with a clear “bright line” test that distinguished between deliberate redeposit of material (e.g., side casting of material), which is properly regulated, and “incidental fallback,” which cannot be regulated.

The court offered insight into the most significant flaws of Tulloch II, which defined unregulated “incidental fallback” as:

The redeposit of small volumes of dredged material that is incidental to excavation activity in waters of the United States when such material falls back to substantially the same place as the initial removal. Examples of incidental fallback include soil that is disturbed when dirt is shoveled and the back-spill that comes off a bucket when such small volume of soil or dirt falls into substantially the same place from which it was initially removed.

33 C.F.R. § 323.2(d)(2)(ii). The court held that “by defining incidental fallback partly in terms of volume, the EPA and the Corps appear to have done exactly what they were warned not to do.” Citing to the DC Circuit’s opinion that struck Tulloch I, the court stated that “the difference between incidental fallback and redeposit is better understood in terms of two other factors: (1) the time the material is held before being dropped to earth, and (2) the distance between the place where the material is collected and the place where it is dropped.”

The court was also troubled by the fact that the rule was based on a blanket statement that the agencies “regard” all mechanized earth-moving equipment as resulting in a discharge of dredged or fill material (i.e., everything is regarded as regulated). Under Tulloch II, the regulated community would have to provide “project specific evidence” to prove that no more than “incidental fallback” would take place (with incidental fallback being defined by the agencies in a very narrow manner discussed above). In what is best described as a “slap” at the agencies, the court stated that the rule’s “coy explanation” that the project-specific evidence requirement “is not intended to shift any burden,” onto the regulated community “essentially reflects a degree of official recalcitrance that is unworthy of the Corps.” The court also noted that the agencies “cannot require ‘project-specific evidence’ from projects over which they have no regulatory authority.” The court issued a nationwide injunction against enforcing the rule and remanded it back to the Corps and EPA.

It remains to be seen whether the Corps and EPA will make another attempt to fix the rule or whether they will seek to reverse Judge Robertson’s opinion in the DC Circuit.

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