Greetings, Court Fans!

So, the relatively boring unanimity of this Term finally has given way as the Court releases opinions in “harder” cases. Last week brought us Hudson, and Monday brought us the first official “mess” of the Roberts era in Rapanos v. United States (04-1034) and Carabell v. United States Army Corps of Engineers (04-1384), which vacated two lower court judgments regarding the scope of the Corps’ authority to regulate wetlands under the Clean Water Act (“CWA”), but which yielded no majority opinion. Instead, there was a four-Justice plurality led by Justice Scalia that would scale back the Corps’ authority dramatically, a four-Justice dissent led by Justice Stevens that would defer to the Corps’ regs, and a Bakke-like opinion from Justice Kennedy that concurred in the plurality’s decision to vacate while forging its own definition (that, also like Bakke’s impact on affirmative-action cases, may dominate future litigation for years). To top it all off, there were serious fireworks in the opinions – indeed, it’s unclear who ticked off Scalia more, Kennedy or the dissenters. Interested? Read on! (But be warned that it’s lengthy; if the CWA is not your cup of tea, skip ahead for the new cert grants on the order list. Due to the length of this summary, our Update on the Court’s other decisions from Monday will follow later this evening.)

The cases concerned four parcels of wetlands: three owned by Rapanos that ultimately drained into navigable waterways through “surface-water connections,” and a fourth owned by Carabell that was next to a lake-bound drainage ditch (but which was separated from the ditch by a manmade berm). Rapanos backfilled his wetlands without a permit from the Corps, and the government brought civil and criminal charges against him; Carabell was denied a permit to fill her property and challenged the denial in court. Rapanos and Carabell both challenged the Corps’ claim that their properties were “navigable waters” under the CWA, which the statute defines as “the waters of the United States, including the territorial seas.” The district courts in both cases deferred to the Corps’ construction of “the waters of the United States,” which includes traditional navigable waters plus any tributaries with “an ordinary high-water mark” and wetlands “adjacent to” those waters or tributaries. Under the regulations, “adjacent” can include wetlands separated by river berms (also, in case you were wondering, the Corps defines “wetlands” as areas saturated by surface or ground water frequently enough that they normally support vegetation adapted for these conditions). The Sixth Circuit affirmed in Rapanos on the ground that his properties had “hydrologic connections” to adjacent tributaries of navigable waters; it similarly affirmed in Carabell on the ground that her property was “adjacent,” if not directly connected, to navigable waters.

Thanks to the combination of the Scalia plurality (including the Chief, Thomas, and Alito) and Kennedy, those opinions are now vacated. The outcome was clear from the beginning of the plurality opinion, in which Scalia noted the costs of compliance and described the Corps as “an enlightened despot” and its regulatory activity over time as “an immense expansion of federal regulation of land use . . . without any change in the governing statute.” He disparaged the Corps’ construction of “the waters of the United States” as one that would encompass “storm drains, roadside ditches, ripples of sand in the desert that may contain water once a year, and lands that are covered by floodwaters once every 100 years.” With that kind of a setup, it’s hardly surprising that the plurality refused to defer to the Corps’ definition. Scalia began by summarizing the Court’s past two reviews of the Corps’ regulations: United States v. Riverside Bayview Homes (1985), which upheld the Corps’ view that wetlands “actually abutting” on traditional navigable waters fall under the CWA, and SWANCC v. Army Corps of Engineers (2001), which rejected the Corps’ view that it had jurisdiction over any wetlands accessible by migratory birds (noting that at least in Riverside the abutting wetlands had a “significant nexus” to navigable waters). The plurality was annoyed that the Corps and lower courts had maintained an expansive view of the CWA after SWANCC, with one court holding that a “significant nexus” exists if even one molecule of water in a wetland inevitably would get to a navigable waterway. While agreeing that “navigable waters” as defined in the CWA – that is, “the waters of the United States” – were not limited to actually navigable waters, the plurality referred to Webster’s Dictionary to find that the “the waters” referred to “relatively permanent, standing or flowing bodies of water,” not “transitory puddles or ephemeral flows.” Moreover, the CWA actually includes intermittent water sources like ditches and canals in its definition of “point sources” that discharge into “navigable waters,” so it would not make sense for the latter to include items that are defined as the former. Further, while one purpose of the CWA was to curb water pollution, another purpose was to preserve the authority of the States to regulate water quality, and the Corps’ expansive definition did exactly the opposite. As to the Sixth Circuit’s “hydrologic connection” basis for affirmance in Rapanos, the plurality urged that only wetlands with a “continuous surface connection” to bodies that are “‘waters of the United States’ in their own right (so that there is no clear demarcation between “waters” and wetlands) should count. Scalia dismissed concerns that this limited definition would hinder efforts to curb water pollution by noting that the Corps’ authority over “navigable waters” was distinct from the CWA’s separate ban on pollution, which bars even indirect pollution of “navigable waters”; in any event, Scalia noted, backfill typically does not flow downstream, so the plurality’s interpretation should not have a significant impact. The plurality would remand to apply its definition.

Kennedy’s concurrence in the judgment took a wildly different tack. He first noted that the Corps’ definition was not so outlandish as Scalia made it seem and was based on 100 pages of technical guidance on vegetation and hydrological requirements. He then chastised the plurality (and the dissent) for ignoring the “significant nexus” language from SWANCC. In Kennedy’s view, the plurality’s “relative permanence” and “continuous connection” requirements made little sense in light of the nexus rule – a mere trickle from a remote wetland would count if continuous, but an irregular torrent from a nearby wetland would not, despite the latter’s far larger impact on downstream water quality (e.g., the Los Angeles River, which is often dry but nevertheless can flow so violently that it is encased in concrete for fifty miles). Observing that the dictionary provides an alternative definition of “waters” as connoting “floods or inundations,” Kennedy would: (1) stick to Riverside Bayview and allow the Corps jurisdiction over wetlands adjacent to actually navigable waters; and (2) apply SWANCC by requiring a case-by-case showing of “significant nexus” for wetlands (like Carabell’s and Rapanos’s) adjacent only to nonnavigable tributaries. While this test might not align perfectly with the traditional bounds of federal authority (an admission that Scalia thought “tested the limits of understatement”), Kennedy thought it would avoid constitutional problems most of the time. On remand, he would instruct the lower courts to see if the Corps had made a nexus showing. (Kennedy appears to have really aroused Scalia’s ire. Noting that Kennedy’s alternative definition of “waters” was “somewhat poetic,” he wrote that it was “strange to suppose that Congress had waxed Shakespearean in the definition section of an otherwise prosaic, indeed downright tedious, statute.” Also, Kennedy appeared to allow for the possibility that the Corps’ jurisdiction “appear[ed] and evaporate[d]” along with water in intermittent waterways, which Scalia found even stranger. And while Kennedy dismissed the plurality’s federalism concerns by noting that a majority of states appeared as amici to support the Corps, Scalia responded that the meaning of the CWA is independent of whether states would prefer to shift blame for controversial decisions to someone else. Finally, Scalia wrote that Kennedy’s use of the “significant nexus” test was taken entirely out of the context of Riverside Bayview and SWANCC – it was not, in fact, a test – and that his reasoning was “turtles all the way down” (as in the story of the guru who says that the earth sits on the back of a tiger on top of an elephant; when asked what supports the elephant, he says a turtle; when asked what supports the turtle, he says “it is turtles all the way down”).)

Now for the Stevens dissent, which says, in essence: The CWA was enacted to protect the Nation’s waters by preserving habitats and curbing pollution; the phrase “waters of the United States” is ambiguous; the Corps’ decision to include wetlands adjacent to tributaries in its definition is reasonable; Congress has acquiesced in that decision for decades by failing to enact a different standard (we probably don’t need to tell you what the plurality thought of this “curious appeal to entrenched Executive error”); the lower courts have enforced it repeatedly; so it should stand. Stevens dismissed the plurality’s concerns over the cost of obtaining permits as “exaggerated” and utterly lacking in an examination of environmental benefits, a failure that “sheds a revelatory light on the quality (and indeed the impartiality) of its cost-benefit analysis.” (Scalia responded that Stevens’ dissent was “long on praise of environmentalism and notably short on analysis of the statutory text and structure”; in turn, Stevens retorted that his policy considerations came from Congress and that the plurality was simply deflecting attention from “its own antagonism to environmentalism.”) The plurality’s “relative permanence/continuous connection” requirements, while “creative,” had no support in the CWA or in prior cases – indeed, no party or amicus had suggested them – and Stevens had no idea what “relative permanence” even meant or how lower courts would apply the standard. Moreover, the plurality’s parsing of the terms “river,” “stream,” “ditch,” “canal” (even “moat” – don’t ask) struck Stevens as an “attempt to achieve its desired outcome by redefining terms [that] does no credit to lexicography – let alone to justice.” As for Kennedy’s “significant nexus” test, Stevens thought it would not be too different in practice from the Corps’ regs, but saw no reason to deviate from “the Executive’s sensible, bright-line rule” in favor of a case-by-case approach. While joining Stevens’ dissent, Justice Breyer wrote his own dissent (after all, what’s two more pages when 100 already have been written?) in which he stated his views that the Corps’ authority extends to the limit of Congress’ Commerce power, that the “significant nexus” test appears to be law but is unfounded, and that the Corps should issue new regulations to which the Court should defer.

Finally, the Chief wrote his own concurrence lamenting two things: (1) the fact that there was no majority, forcing lower courts to feel their way on a case-by-case basis; and (2) the Corps easily could have avoided this mess by issuing proper regs after SWANCC that still would have left it with plenty of room to maneuver.

Before moving on, we should return to Stevens’ dissent for an interesting point for appellate-law junkies. Usually, the need for a mandate on remand leads some Justices to join a judgment despite their disagreement. But here, while the plurality and Kennedy would remand, they came up with two different tests to apply. Stevens suggested, therefore, that since the dissenters would affirm anyway, the lower courts should uphold the Corp’s jurisdiction if the Corps satisfied either Kennedy’s “significant nexus” test or the plurality’s “relative permanence/continuous flow” test – meaning, since it is a more liberal test, that Kennedy’s one-Justice rule would control (hence the Bakke analogy). The Court may not take another one of these cases anytime soon, but the lower courts certainly are not done with this issue . . . .

There were three cert grants this week. Most prominent among them was the grant in Gonzales v. Planned Parenthood (05-1382), in which the Court agreed to review a second partial-birth abortion case (along with Gonzales v. Carhart (05-380), in which it granted cert in February). The new case asks “[w]hether, notwithstanding Congress’s determination that a health exception was unnecessary to preserve the health of the mother, the Partial-Birth Abortion Ban Act of 2003 is invalid because it lacks a health exception or is otherwise unconstitutional on its face.”

The other grants were as follows:

Wallace v. Chicago, Illinois (05-1240): When does a claim for damages arising out of a false arrest or other search or seizure forbidden by the Fourth Amendment accrue when the fruits of the search were introduced in the claimant’s criminal trial and he was convicted?

Watters v. Wachovia Bank, N.A. (05-1342): (1) Is the interpretation of the Comptroller of the Currency that 12 CFR 7.4006 preempts Michigan’s laws regulating mortgage lending as applied to State chartered nonbank operating subsidiaries, entitled to judicial deference under Chevron USA, Inc v Natural Resources Defense Council? (2) Does 12 CFR 7.4006, by equating a State-chartered nonbank operating subsidiary with a national bank for purposes of federal preemption of State regulation, violate the Tenth Amendment to the United States Constitution?

Finally, the Court asked the SG for his views on the petition in Credit Suisse First Boston Ltd. v. Billing (05-1157), which asks “[w]hether, in a private damages action under the antitrust laws challenging conduct that occurs in a highly regulated securities offering, the standard for implying antitrust immunity is the potential for conflict with the securities laws or, as the Second Circuit held, a specific expression of congressional intent to immunize such conduct and a showing that the SEC has power to compel the specific practices at issue.”

More summaries will follow tonight, and we expect more announcements Thursday as the Court rushes to finish the Term. Thanks for reading!

Ken & Kim

From the Appellate Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart, Ken Heath, Aaron Bayer, or Jeff Babbin at 203-498-4400