Real Estate and Construction Law Blog

By Robert J. Uram and Aaron Foxworthy

In Northern California River Watch v. City of Healdsburg, the Ninth Circuit held that a man-made pond that (a) contains and is largely surrounded by wetlands, (b) is separated from a traditionally navigable water only be a levee, and (c) shares a significant nexus with the adjacent navigable water can be considered a regulable water of the United States.  (Case No. 04-15442, slip op. at 9373, August 6, 2007).  The Healdsburg decision revised the court’s August 2006 opinion in the case.  (Earlier opinion at 457 F.3d 1023).

By Stephanie J. Helfrich

U.S. v. Moses, No. 06-30379 (9^th Cir. 2007)

In upholding an 18-month prison sentence, plus monetary fines, under the Clean Water Act (CWA) of an eastern Idaho developer who bulldozed a creek bed, the Ninth Circuit held that a seasonally intermittent stream which ultimately empties into a river that is a water of the United States can, itself, be a water of the United States. The Court further held that deposition of materials into the intermittent stream during the 10-month dry season still constituted a discharge of fill into waters of the United States.

By Robert Uram, Ella Foley-Gannon and Aaron Foxworthy

On June 5, 2007, the Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (US EPA) published long-awaited guidance on the United States Supreme Court's decisions in Rapanos v. United States and Carabell v. United States Army Corps of Engineers.  Posted on the agencies' respective web sites, the guidance sets out their interpretation of the Rapanos and Carabell decisions, particularly their effects on the agencies' regulatory jurisdiction under Section 404 of the Clean Water Act (CWA Jurisdiction).

By Bob Uram and Keith Garner

National Wildlife Federation v. National Marine Fisheries Service, No. 06-35011 (9th Cir. 2007)

On April 9, 2007, the Ninth Circuit held that the jeopardy analysis under the Endangered Species Act regulations must consider the effects of an action on a listed species’ chance of recovery in a Section 7 consultation.  The regulations, which were promulgated in 1986, prohibit any agency action “that reasonably would be expected, directly or indirectly, to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild.”  50 C.F.R. § 402.02.  In a challenge to a biological opinion issued for the proposed operations of the Federal Columbia River Power System dams and related facilities, the National Marine Fisheries Service had argued that the restriction bars only actions that will both reduce the likelihood of survival and recovery of the species.  Because a species may survive without recovering to the point where it is no longer imperiled, the requirement to reduce the species’ chance of both survival and recovery was effectively a survival standard.  The Ninth Circuit upheld a district court’s decision invalidating the biological opinion, noting that the agency’s interpretation “reads ‘and recovery’ entirely out of the text.” The decision also contains important guidance on the definition of discretionary federal actions and rejects the NMFS effort to view the scope of the federal action narrowly.

Stockton East Water District, et al. v. United States (February 20, 2007) _________; http://www.eswr.com/latest/stocktoneastopcfc.pdf

By Philip Atkins-Pattenson and Katharine Allen

By Robert Uram and Aaron Foxworthy

In San Francisco Baykeeper v. Cargill Salt Division, the Ninth Circuit Court of Appeals provided further guidance on the limits of Clean Water Act (“CWA”) regulatory authority.  ___ F.3d ___; Case No. 05-15051, slip op. at 2666 (9th Cir., filed March 8, 2007).  Cargill argued that a non‑navigable, non‑wetland pond does not fall within the Environmental Protection Agency’s definition of jurisdictional water of the United States simply by virtue of its adjacency to a navigable waterway.  The Court of Appeals agreed, holding that pursuant the agency’s CWA regulations, wetlands are the only waterbodies that  fall within CWA regulatory authority based on their adjacency to navigable waters of the United States.  Since the waterbody in question was a diked pond, not a wetland, the adjacency rule did not apply.  Baykeeper argued that the pond was nevertheless subject to regulatory authority because attendant circumstances indicated it had a “significant nexus” to navigable waters.  The court rejected this argument finding no indication in previous case law that the significant nexus test is intended to apply to waterbodies other than wetlands, and that, in any event, the evidence presented by Baykeeper did not indicate that water ever flowed from the pond to adjacent navigable waters.

By Ella Foley-Gannon and Julie Austin

On March 12, 2007, the U.S. Army Corps of Engineers released new and modified Nationwide Permits (NWP), which authorize dredge and fill activities that will cause minimal individual and cumulative adverse effects.  The revised NWPs include modified versions of several of the existing 43 NWPs, along with 6 new NWPs.  The NWPs include new and revised definitions and will be subject to 28 revised General Conditions.  (Final notice submitted to the Federal Register on March 12, 2007)  The new permits take effect on March 19, 2007 and will expire on March 18, 2012.  Under a grandfathering provision, projects that have commenced or are under contract to commence under prior NWPs will have until March 18, 2008 to complete the activity under the terms and conditions of those NWPs.  In addition, the Los Angeles, Sacramento, and San Francisco Army Corps Districts have published notices of proposed regional conditions that could significantly change the requirements of obtaining NWP coverage in those areas.  (See proposed regional conditions for Sacramento and Los Angeles.)  These regional conditions are still under consideration and no final regional conditions have been issued.  Also, the State Water Resources Control Board and Regional Water Quality Control Boards will consider whether any or all of the NWPs should be certified under Section 401 or whether individual certification for each project authorized under a NWP will be required.

By Robert J. Uram and Aaron Foxworthy

District courts for the Northern District of California and the District of Connecticut recently applied the Supreme Court’s 2006 Rapanos decision to decide whether certain intermittent and ephemeral streams and adjacent wetlands were subject to Clean Water Act regulatory jurisdiction.  (Please click for further discussion of Rapanos).  In both instances, the courts found that plaintiffs had not presented sufficient evidence that the streams or wetlands in question had a significant effect on downstream navigable waters.

National Association of Homebuilders v. U.S. Army Corps of Engineers, 01-274 JR (D. D.C. Jan. 30, 2007)

By Robert J. Uram and Stephanie  J. Helfrich

            On January 30, 2007, U.S. District Judge James Robertson ruled in favor of several major trade associations when he held that a rule jointly issued by the Army Corps of Engineers and the Environmental Protection Agency defining whether “incidental fallback” that can result from activities such as ditch digging and excavation, and subjecting the activity to Section 404 jurisdiction, was invalid.  Judge Robertson held that the rule does not properly address issues raised by a 1998 D.C. Circuit Court of Appeals Decision (National Mining Association v. United States Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998)) and that the rule violates the Clean Water Act.  This decision coupled with the Supreme Court’s ruling in the Carabell and Rapanos cases leaves the Section 404 program awash with uncertainty.

By Keith Garner

By Bob Uram and Keith Garner

By Robert Uram and Keith Garner

On September 26, 2006, the U.S. Army Corps of Engineers published a notice of its proposal to reissue and modify the existing Nationwide Permits, general conditions, and definitions, and to issue six new Nationwide Permits and one new general condition. The Corps proposes to retain the current acreage limits, but thirty-two of the existing Nationwide Permits and most of the general conditions would be modified in other ways. Some modifications are minor, intended to make the existing text clearer and more concise. Other changes are substantive. Some of the more important proposals are:

by Robert Uram and Keith Garner

Pursuant to its authority under the Clean Water Act, the U.S. Army Corps of Engineers has issued general permits, called Nationwide Permits, for activities that have minimal effect on the environment. Discharges of dredged or fill material in wetlands and other waters of the U.S. are permitted in connection with these activities upon verification by the Corps that an activity qualifies under a Nationwide Permit. The current Nationwide Permits were issued in January of 2002 and are scheduled to expire on March 19, 2007. The Corps has not yet commenced the rulemaking process that is required to reissue Nationwide Permits, and no announcements have been made concerning the Corps' intention or schedule for doing so. Although activities authorized under Nationwide Permits are supposed to finish before the expiration date, verifications are generally issued with a "grandfather" provision that gives activities that have commenced or are under contract to commence before the expiration date an additional year to be completed. Please contact Robert Uram or Keith Garner if you have specific questions about the expiration of the current Nationwide Permits or activities authorized thereunder.

By Stephanie Helfrich, an associate in the San Francisco office.

In what can be characterized as a win for habitat conservation planning generally, and for development in the Natomas Basin specifically, California's Third Appellate District has just published its August 9, 2006 decision, Environmental Council of Sacramento v. City of Sacramento et al., affirming the trial court's conclusion that the city of Sacramento and Sutter County's certification of the Environmental Impact Report (EIR) for the 2003 Natomas Basin Habitat Conservation Plan fully accounted for the environmental consequences of the HCP and implementation agreement under the California Environmental Quality Act (CEQA), and that the Department of Fish and Game met its responsibilities to protect threatened species through issuance of incidental take permits for the HCP under the California Endangered Species Act (CESA). The court concluded that plaintiffs failed to show an abuse of discretion under either statute.

by Robert J. Uram, Esq.

On June 19, 2006, the U.S. Supreme Court decision in Rapanos v. United States, 547 U.S. ___ (2006), which consolidated two Clean Water Act (CWA) challenges to U.S. Army Corps jurisdiction, vacated and remanded both the Rapanos (04–1034) and Carabell (04–1384) decisions to the lower courts for further consideration.  The 5-4 decision resulted in three separate opinions: four Justices voted to severely restrict the scope of the Corps' CWA jurisdiction, four voted to uphold the Corps' current jurisdiction, and one Justice, Justice Kennedy, voted to add a new requirement that the Corps must satisfy, on a case-by-case basis, before it can claim jurisdiction.

by Robert J. Uram, Ella Foley-Gannon and Mary C. Klima

 On March 14, 2006, in Center For Biological Diversity v. Bureau of Land Management, et al., 2006 WL 662735 (N.D. Cal.), the United States District Court for the Northern District of California concluded that the U.S. Fish and Wildlife Service (the “Service”) improperly ignored the recovery goal of critical habitat in finding that there were no additional regulatory benefits to be gained by designating critical habitat in areas that were ultimately excluded. Additionally, the Court concluded the Service improperly considered economic impacts of critical habitat designation that are coextensive with restrictions resulting from the listing of milk-vetch in excluding significant areas from the final critical habitat designation.

The House has passed H.R. 3824, the Pombo ESA bill, by a vote of 229-193. Before voting on the bill, the House defeated, 216-206, a substitute introduced by Rep. George Miller (D-Calif.) and other representatives. 36 Democrats joined 193 Republicans in voting for the Pombo bill. Opposing were 158 Democrats and 34 Republicans, and one Independent.

On the substitute, 176 Democrats were joined by 29 Republicans and Independent Bernie Sanders (Vt.) in voting for, and 198 Republicans and 18 Dems voted against.

For further information, please contact Robert Uram in Sheppard Mullin's San Francisco office.

On September 22, 2005, the House Resources Committee passed by a 26-12 margin H.R. 3824, the Threatened Endangered Species Recovery Act of 2005 ("TESRA"). TESRA represents the most significant effort to modify the Endangered Species Act ("ESA") in over a decade. TESRA is currently scheduled for debate and possible amendment before the full House on September 28 or 29, 2005.

On August 4 the California Supreme Court ruled, in Grafton Partners v. Superior Court (Pricewaterhouse Coopers LLP), 2005 DJDAR 9387 that California contractual provisions in which the parties thereto pre-agree to waive the right to a trial by jury are unenforceable. The unanimous opinion stated that a right to a jury trial is a fundamental constitutional entitlement that cannot be waived in advance of a dispute between the contracting parties unless such a waiver is permitted by statute. Thus, the court has left the door open for the legislature to pass a statute allowing such waivers, and the forum for interests pursuing this debate will likely shift to the legislature now.

In the meanwhile, those entities doing business in California who desire such jury trial waivers in their contracts in order to guard against the perceived inordinate expense, time and unpredictability of California jury trials might consider a renewed emphasis on mediation, arbitration and judicial review proceedings to avoid them.

Sheppard Mullin attorneys are happy to discuss the advantages and potential pitfalls of such techniques.

Douglas Van Gessel is a partner in the Real Estate, Land Use and Environmental Practice Group in Sheppard Mullin's San Francicso office.

In a ruling with broad implications for land development in California, the Ninth Circuit Court of Appeals recently overturned the U.S. Fish and Wildlife Service's longstanding interpretation of the Endangered Species Act's requirement to prevent adverse modification of designated critical habitat.