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).

The City of Healdsburg appealed the District Court’s holding that a man-made pond adjacent to the Russian River was a regulated water of the United States and therefore required a National Pollution Discharge Elimination System (NPDES) permit for discharge to the pond from the City’s water treatment plant.  The man-made pond – known as Basalt Pond – formed when a dormant sand and gravel pit adjacent to the Russian River filled with groundwater from the underlying aquifer.  The 58-acre pond lies separated from the Russian River, a navigable waterway, by a levee and associated wetlands.  There was no dispute that the Russian River is a traditionally navigable water, and that water from the pond reaches the River, either via seepage through the separating levee, or through groundwater movement.

Based on these facts, the Ninth Circuit determined the pond to be within the Corps’ regulatory definition of waters of the United States.  First, the court found that “the pond is part of a larger wetland that is ‘adjacent’ to the River” and thus regulated as an adjacent wetland pursuant to the Corps’ regulatory definition, 44 CFR 328.3(a)(7) (adjacent wetlands).  Second, the court found there to be a significant nexus between the pond and the Russian River, thus satisfying Justice Kennedy’s “significant nexus” test, established in the Supreme Court’s June 2006 decision in Rapanos v. United States.

Adjacent Wetland.

In finding the pond to be a regulated wetland adjacent to a water of the United States, the revised opinion carefully expanded on the court’s earlier characterization of the pond.  In its August 2006 opinion, now withdrawn, the court stated:

the mere adjacency of Basalt Pond and its wetlands to the Russian River is not sufficient for CWA protection.  The critical fact is that the Pond and navigable Russian River are separated only by a man-made levee so that water from the Pond seeps directly into the adjacent River. This is a significant nexus between the wetlands and the Russian River and justifies CWA protection.

The Court had initially declined to call the pond a water of the United States based purely on its adjacency to the River, choosing instead to rely on a perceived significant nexus between the two.  In its recently published opinion, however, the court adds the following:

[t]he district court explicitly found that the Pond is not only surrounded by extensive wetlands, which connect to the Russian River, but also that the Pond’s shoreline has receded so substantially that much of the area that was originally Basalt Pond has turned into wetland . . ..  [B]ecause it contains and is surrounded by wetlands [the pond is] regulable under the Clean Water Act.

Thus, it appears the court found that the pond, as part of a larger wetland area, could fall within the Corps’ regulatory definition of regulable waters of the United States at 328.3(a)(7).

The court may have revised the Healdsburg opinion in this manner to distinguish the facts in that case from those discussed in the Ninth Circuit’s recent decision in San Francisco Baykeeper v. Cargill Salt Div., 481 F.3d 700 (9th Cir. 2007).  In Baykeeper, the court declined to hold that a man-made pond that was part of a larger waste containment facility was a regulable water of the United States under Section 328.3(a)(7) due to its adjacency to the traditionally navigable San Francisco Bay.  The Baykeeper court held that only adjacent wetlands may be regulated under Section 328.3(a)(7), thus, ponds that do not meet the regulatory definition of a wetland cannot be regulated under 328.3(a)(7), even if they are adjacent to traditionally navigable waters.  On the other hand, the Healdsburg court – pointing to the District Court’s factual findings – made the determination that “[t]he Basalt Pond and its surrounding area are regulable . . . because they qualify as wetlands under the regulatory definition.”

Significant Nexus.

The court next applied the significant nexus test – articulated in the Rapanos decision – to the pond.  A significant nexus exists “if the wetlands, alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical and biological integrity of other covered waters more readily understood as ‘navigable.’“  126 S.Ct. 2208, 2248 (2006) (Kennedy, J. concurring).  In Healdsburg, the court found the significant nexus test to be satisfied in this case, because (1) a surface connection exists between the River and the pond when the river overtops the levee and the two bodies of water commingle (no indication as to the frequency of overflows); (2) higher levels of chloride present in the River downstream of the pond were attributable to water moving from the pond to the River; (3) the pond and the River shared a significant ecological connection because each supported similar bird, mammal and fish populations.

It may have been unnecessary to employ the Rapanos “significant nexus” test in this case, given that the court had already found the pond to be regulated under Section 328.3(a)(7) of the Corps’ regulations.  In his Rapanos opinion, Justice Kennedy acknowledges that when seeking to regulate wetlands adjacent to navigable-in-fact waters (e.g., the Russian River), the Federal Government could rely upon adjacency to establish its jurisdiction under 33 CFR 328.3(a)(7).  126 S.Ct. at 2249.  The “significant nexus” test focused on those situations where the Federal Government sought to establish regulatory jurisdiction over wetlands based on their adjacency to non-navigable tributaries, which does not appear to be case in Healdsburg.  Nevertheless, the Healdsburg case is instructive application of facts to the necessarily fact-specific significant nexus test.

Exemptions Rejected.

In addition, the court rejected the City’s contention that the pond fit within regulatory exemptions for waste treatment system facilities and for excavation operations.  The court stated that the waste treatment system exemption is intended for water systems that either “do not discharge into waters of the United States or waters that incorporated in an NPDES permit as part of a treatment system.”  Basalt Pond fit into neither category, and was thus not eligible for the exemption.  Regarding the exemption for ongoing excavation operations, the court found that the activities going on at the pond (reclamation activities) did not constitute ongoing excavation activities and thus were not subject to the excavation exemption.

For further information please contact Robert Uram and Aaron Foxworthy. Bob Uram is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office. Aaron Foxworthy is an associate in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office.