Borden Ranch Partnership, et al. v. U.S. Army Corps of Engineers

01-1243

Appealed From: 9th Circuit Court of Appeals (261 F.3d 810)

Oral Argument: Dec. 10, 2002

Opinion Issued:

Subject: Clean Water Act, civil penalties, wetlands

Question(s) presented: (1) Whether deep ripping, an activity that disgorges and redeposits soil in wetlands and waters of the United States to convert those areas to dry land, may result in a discharge of a pollutant for purposes of the Clean Water Act, 33 U.S.C. 1251 et seq. (2) Whether petitioners' deep ripping of a wetland qualified for the conditional exemption from regulation under Section 404(f) of the Clean Water Act, 33 U.S.C. 1344(f). (3) Whether each violation of the Clean Water Act should be counted in determining the maximum civil penalty under Section 309(d) of the Clean Water Act, 33 U.S.C. 1319(d).

When Angelo Tsakopoulos purchased the 8,350-acre Borden Ranch in California’s Central Valley, he intended to convert the land, formerly used for grazing, so that it could support orchards and vineyards.

Some of the ranch was designated by the U.S. Army Corps of Engineers (the Corps) as wetlands under the federal Clean Water Act, for its vernal pools that collect water, especially after heavy rain.

The pools, which connect to each other and to streams through swales (sloped wetlands) that filter and regulate the water flows, are a habitat for wildlife.

When he bought the property, Tsakopoulos knew about the wetlands and contacted the Corps. "He was initially told agricultural activities were exempt prior to purchasing the property and he always believed that plowing was legally exempt," said Arthur Coon, Tsakopoulos’ attorney.

After sorting through advice from the Corps, Tsakopoulos began plowing, using methods he thought would not require a permit. In the fall of 1993 he began "deep ripping," a plowing process in which the soil is loosened using deep metal prongs pulled by bulldozers or tractors. This enables water to drain farther into the soil and feed the deeper roots of vineyards and orchards, effectively destroying the water retaining characteristic of the land that defines it as a wetland.

The Corps subsequently decided that the deep ripping required a permit and granted it "after-the-fact" because Tsakopoulos agreed to certain reparations. Tsakopoulos then questioned the Corps’ authority, and in 1994 the Corps turned to the Environmental Protection Agency, which sided with the Corps.

To that point, the facts are not in dispute. After that, the Corps claims that it and the EPA again informed Tsakopoulos in fall 1994 that he was not to deep rip in protected waters. Borden Ranch claims plowing was authorized "under the Corps’ guidance." The following spring a cease and desist order was issued because the Corps and EPA found that more deep ripping had occurred.

Over the next couple of years, Tsakopoulos and the Corps consulted with other agencies and attempted to resolve the issue, but the language governing whether deep ripping was subject to regulation was still vague enough to result in further disputes. By May 1996, a 1,418-acre seasonal wetlands preserve in the heart of Borden Ranch was created in order to settle some of the alleged earlier violations.

Nevertheless, disputes continued and in 1997, Tsakopoulos filed suit in federal court against the EPA and the Corps. The suit questioned whether farming practices, including deep ripping, could be regulated by the Corps and EPA. The EPA filed a counterclaim to prevent further plowing and for payment of fines amassed through the alleged violations.

In 1999, the court ruled in favor of the Corps and EPA. Based on evidence from more than 20 witnesses and hundreds of exhibits, the court found 358 violations of the Clean Water Act. According to the act, each individual violation is punishable by a fine of up to $25,000, or a maximum civil penalty of up to $8,950,000. After taking into account other factors specified by the act, the court settled on a $1.5 million fine, or $500,000 and restoration of four acres to wetland.

On Aug. 15, 2001, a divided 9th Circuit Court of Appeals affirmed, except for one count.

The majority based its decision on two appeals court opinions. Borden Ranch had argued that deep ripping did not constitute the addition of a pollutant into wetlands. In the 9th Circuit’s 1990 opinion in Rybachek v. U.S. Environmental Protection Agency, the court found that sifting through stream beds in search of gold and returning the sifted material to stream bed qualified as the addition of a pollutant because the materials returned were of a different composition. In U.S. v. Deaton, the 4th Circuit Court of Appeals found in 2000 that material removed from and then redeposited into a wetland was also considered an addition of a pollutant.

"[The previous cases] recognize that activities that destroy the ecology of a wetland are not immune from the Clean Water Act merely because they do not involve the introduction of material brought in from somewhere else," Judge Michael Hawkins wrote for the majority. "In this case, the Corps alleges that Tsakopoulos has essentially poked a hole in the bottom of protected wetlands. That is, by ripping up the bottom layer of soil, the water that was trapped can now drain out…[and although] no new material has been ‘added,’ a ‘pollutant’ has certainly been added."

In another argument, Tsakopoulos contended that the discharge must be from a point source and a plow has never been considered a point source. But in previous cases, bulldozers and backhoes were found to be point sources, and at Borden Ranch, bulldozers and tractors pulled large metal prongs through the soil. Hawkins concluded that the majority "can think of no reason why this combination would not satisfy the definition of a ‘point source.’"

Finally, the majority disputed Tsakopoulos’ contention that his practices were exempt under "farming exceptions" of the Clean Water Act. The exception states that discharge of materials into navigable waters from an activity that either puts those waters into a use never seen before or affects the circulation, flow, or reach of the waters, would require a permit. The majority concluded that conversion of ranch land into orchards or vineyards was bringing the land into a use to which it was not previously subject and that there was clear evidence that destruction of soil on those lands did impair the flow of nearby navigable waters. "In this case," Hawkins wrote, "Tsakopoulos’s activities were not intended simply to substitute one wetland crop for another; rather, they radically altered the hydrological regime of the protected wetlands."

Judge Ronald Gould dissented. "The problem of interpretation here arises because Congress prohibited the discharge or addition of any pollutant to navigable waters from any point source," he wrote. "It did not literally prohibit any conduct by farmers or ranchers that changes the hydrological character of their land."

"The majority opinion … makes new law by concluding that a plow is appoint source and that deep ripping includes the discharge of pollutants into protected waters," Gould wrote. "It would be preferable for the public, the regulators, and us were Congress to speak explicitly on the subjects [in question]. The alternatives are an agency power too unbounded or judicial law-making, which is worse."

The court reversed in the case of one isolated vernal pool because the Corps withdrew its claim of jurisdiction. The withdrawal was based on the Supreme Court ruling earlier in 2001 in Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers that "the Corps’ rule extending the definition of ‘navigable waters’ under the Clean Water Act to include intrastate waters used as habitat for migratory birds exceeds the authority granted to the Corps under the Clean Water Act."

On June 10, 2002, the U.S. Supreme Court accepted review in the case. Justice Anthony Kennedy took no part in the decision.

Attorneys in this case:
For Borden Ranch, Partnership, et al.:
Arthur Fred Coon
Miller, Starr & Regalia
1331 N. CA Blvd., 5th Floor
Walnut Creek, CA 94596
(925) 935-9400

For U.S. Army Corps of Engineers and Environmental Protection Agency:
Theodore B. Olson
Solicitor General, Counsel of Record
Thomas L. Sansonetti
Assistant Attorney General
David C. Shilton
Sylvia Quast
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
 
Other Attorneys:
For California Farm Bureau Federation, et al.:
Robin L. Rivett
Pacific Legal Foundation
10360 Old Placerville Rd.#100
Sacramento, CA 95827
(916) 362-2833

For National Association of Home Builders: 
Virginia S. Albrecht
Hunton & Williams
1900 K Street, NW
Washington, DC 20006
(202) 955-1500

For American Farm Bureau Federation: 
John J. Rademacher
American Farm Bureau Federatio
225 Touhy Avenue
Park Ridge, IL 60068
(847) 685-8600

(This brief written by Adrienne Kovalsky)