Water Laws

Can BWSR be found to have acted arbitrarily and capriciously in wetland determination when no factual information rebuts BWSR’s wetland determination?

In the Matter of the Wetland Conservation Act, No. A16-0380, 2017 WL 393565 (Minn. Ct. App. 2017)

Court declines to overturn a no-loss wetland determination denied by the Wright County Soil and Water Conservation District, and appeal denied by BWSR.

BWSR did not act arbitrarily and capriciously because appellant did not supply factual information to rebut the wetland determinations.

What constitutes a “feasible and prudent” alternative under a Wetland Conservation Act avoidance analysis?

In re Wetland Conservation Act Appeal involving the Zander Property, A04-314 (Minn. Ct. App. 2014) (unpublished)

Waseca County landowners charged that under the avoidance requirement of the Wetland Conservation Act, the Minnesota Department of Transportation was obligated to choose a road alignment that avoided impact to 7.34 acres of wetland on their property. The Minnesota Court of Appeals noted that WCA requires an alternative that avoids wetland impact only if it is “feasible and prudent.” It found that the record supported MnDOT’s finding that the alternative for which the landowners argued was not feasible and prudent, because it would convert 16.75 additional acres of farmland to highway right-of-way; disrupt existing farm fields and increase travel distances to those fields; would diminish safety by adding curves and retaining rail crossings; and would increase project costs by $2,345,000. The Court also found that MnDOT had met its obligation to avoid impacts to endangered species and that the landowners’ evidence of potential impacts was speculative.

How does the "least adverse impact" requirement limit the Corps of Engineer's discretion in approving a 404 permit?

Johnson v. U.S. Army Corps of Engineers, 6 F. Supp.2d 1105 (D.Minn. 1998)

The Red Lake Band of Chippewa Indians (the "Band"), the United States Bureau of Indian Affairs (the "BIA"), and Pennington County attempted to realign and reconstruct a portion of BIA Route 19, located on the Red Lake Indian Reservation. The Band prepared an environmental assessment ("EA") for the project pursuant to the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. The stated purpose of the project was to address safety and traffic concerns. The EA identified six alternatives for the site: one no-action, two off-Reservation, and three on-Reservation alternatives. The preferred alternative required the filling of some 30 acres of wetland. Other alternatives would destroy less than one acre of wetland. The District Engineer from the U.S. Army Corps of Engineers issued a permit to the Band to allow construction of the preferred alternative.

The plaintiffs were landowners whose land would be severed in two by the project, resulting in disruption of their farming operations. They sought an injunction to stop condemnation proceedings against them that would grant an easement for construction of the project. They also sought an injunction to suspend the permits issued by the Corps of Engineers.

U.S. COE regulations implement § 404 prohibit permit issuance if a practicable alternative exists with less adverse impact on wetlands. 40 CFR 230.10. The District Engineer determined that the less-damaging alternatives would not address safety concerns, because those alternatives would not bypass traffic, but would simply upgrade or would intersect the existing road system. Moreover, the alternatives were determined to have an unacceptable impact on the socioeconomic resource, consuming 75 acres of agricultural land and causing considerable loss of income and a higher burden on taxpayers. Accordingly, the Court found that the District Engineer's decision was not arbitrary and capricious.

The Court also rejected Plaintiff's argument that permit issuance, delegable to the U.S. CEO Chief of Engineers under the Clean Water Act, could not be redelegated to the District Engineer. In so doing, the Court explicitly rejected the contrary holding in U.S. v. Mango, 997 F. Supp. 264 (N.D.N.Y. 1998).

Do the USDA's Swampbuster regulations limit the dredging of converted wetlands to the depth existing as of the statute's effective date?

Barthel v. U.S. Dept. of Agriculture, 1999 WL 398715 (8th Cir. 1999)

The Barthels own agricultural land next to a ditch. At various times before 1985, they dredged the ditch to remove debris that had caused flooding of their land. In 1985, the Federal Food Security Act was passed with a provision (commonly called "Swampbuster") that denies eligibility for federal farm-assistance programs if wetlands are converted to agricultural use. 16 U.S.C. § 3801, 3821-24. In 1987, the Barthels sought to dredge the ditch again, but the USDA determined that dredging below a particular elevation would violate the Swampbuster provision. The Barthels brought this action.

The statute provides an exemption from Swampbuster for wetland converted to farmland before the effective date of the law. USDA regulations implementing Swampbuster provide that farmers may continue to farm converted wetlands as they did before the effective date, but that they can take no action to increase the effects on the wetlands. See 7 C.F.R. § 12.33 (a). The National Food Security Act Manual, USDA guidance, allows the agency to "determine the scope and effect of original manipulation on all farmed wetlands." NFSAM § 514.23. The USDA conceded that the hay meadow had been drained before the effective date of the statute; it determined the scope and effect of the original manipulation by specifying the depth to which the Barthels might dredge. However, that depth was insufficient to prevent flooding.

The Court overturned the agency's interpretation of its own regulations as arbitrary and capricious. The regulations say nothing about preserving the precise depth of a drainage ditch. Ditch depth may be used as evidence of the water regime that previously existed, but the prior condition of the land is the focal point. In other words, "[t]he unambiguous focus of the statute and implementing regulations is to maintain the status quo of the manipulated wetlands-not the drainage ditch." The USDA was directed to determine the degree of dredging that would permit the Barthels the same "water and farming regime" existing as of the Act's effective date.

Does the Wetland Conservation Act apply to Type 3, 4 and 5 wetlands greater than 2.5 acres in incorporated areas and 10 acres in unincorporated areas but not identified on the DNR protected waters inventory?

Drum v. Douglas Soil and Water Conservation District, 574 N.W.2d 71 (Minn. Ct. App. 1998)

Ralph Drum owned land next to a 15-acre marsh in Douglas County. Drum sought approval from the Douglas Soil and Water Conservation District (the "District") to install a drainage outlet because the marsh was growing and threatened to undermine the foundation of his house. The District denied Drum's request under the Wetland Conservation Act (the "Act"). Drum appealed the decision to the Minnesota Board of Water and Soil Resources (BWSR), which affirmed the District's decision.

As a Type 4 wetland larger than 10 acres, the marsh in question was subject to DNR regulation under the State's protected waters statute and, if so regulated, excluded from operation of the Act. However, under DNR practice, only those protected waters identified on the DNR's public waters inventory maps are regulated by the DNR. The District claimed jurisdiction over the disputed wetland pursuant to a BWSR rule applying the Act to all wetlands except "public waters, wetlands, and public waters that are designated on the public waters inventory maps . . . ." Minn. R. 8420.0112, subpt. 52C. Drum argued that the Act did not authorize BWSR to apply the Act so broadly.

The court disagreed. The purposes of the Act are to "achieve no net loss in . . . wetlands;" "increase the quantity, quality, and biological diversity of . . . wetlands;" avoid destroying or diminishing "the quantity, quality, and biological diversity of wetlands; and replace wetlands impacted by activity." Minn. Stat. § 103A.201, subd. 2(b)(1)-(4). The court concluded that leaving some large wetlands in an unprotected gap between the Act and the protected waters statute would undermine these purposes.

Drum also argued that he fell within an exception to the Act stating that a wetland replacement plan is not required for wetlands "created solely as a result of . . . actions by public or private entities that were taken for a purpose other than creating the wetland." Minn. Stat. § 103G.2241, subd. 5(3) (1996). Drum argued that the marsh was expanding due to a road constructed next to the marsh. The court found that BWSR was not arbitrary or capricious in finding that the marsh expanded due to precipitation rather than the road built next to it. Even though the road could have been a factor in the expansion of the marsh, Drum had not proven that the wetland was enlarged "solely" due to the road.

When a government wetlands restoration project allegedly results in a nuisance or a trespass, does the Statute of Limitations run from the time of the construction of the project, or the time of the actual knowledge of the nuisance?

Lhotka v. United States, 114 F.3d 751 (8th Cir. 1997)

In 1964, the United States Fish and Wildlife Service purchased a perpetual easement from the Lhotkas. The easement allowed the USFWS the right to entry and to maintain the wetlands in the status in which they existed in 1964, while the Lhotkas were allowed to continue farming their land when it is dry due to natural causes. In October of 1992, after the Lhotkas failed to comply with a 1990 district court order requiring them to restore the wetlands to their 1964 status, the USFWS entered the land and constructed a series of six inch dikes on the farm designed to maintain the wetlands at 1964 levels.

The Lhotkas brought a Federal Tort Claims Act action against the USFWS on September 30, 1995, alleging state claims of nuisance and trespass. The District Court, Judge Rosenbaum presiding, dismissed the claims, holding that more than two years had passed since the construction of the dikes, so that the claims were time-barred.

The Eighth Circuit Court of Appeals reversed and remanded the case. In its decision, the court held that the appropriate time for the two year statute of limitations to begin was the point at which the Lhotkas had actual knowledge of the alleged injury to their property. The Court of Appeals found that the Lhotkas could not have had such knowledge until the rainy season, in the summer of 1993. The Court of Appeals remanded the case to the trial court, with directions to determine whether the statute of limitations ran in the time between the LhotkasÍ actual knowledge and the filing of their suit.

May federal agencies regulate removal of material from wetlands under the Clean Water Act?

American Mining Congress v. U.S. Army Corps of Engineers, 951 F.Supp. 267 (D.D.C. 1997)

In 1993, the Corps of Engineers and the EPA adopted the "Tulloch rule," which resulted in a significant change in the definition of the term "discharge of dredged material" for purposes of the Clean Water Act. Up until this time, the agencies had regulated only the addition of materials to waters under § 404 of the Clean Water Act (CWA). Under the Tulloch rule, the agencies began to regulate the removal of materials from wetlands as well. This allowed the Corps and EPA to extend their regulatory powers to include nearly all excavation, land clearing, ditching, and channelization activities within a wetland. The Tulloch rule expanded the definition of "discharge of dredged material" to include "incidental fallback." Incidental fallback is the minor soil movement associated with excavation, such as the soil that is disturbed when shoveled, or the material which spills back into the place from which it was shoveled. Removal of material from a wetland without such fallback is impossible for all practical purposes.

The American Mining Congress (AMC) brought suit to challenge the authority of the agencies to enforce the Tulloch rule. They argued that the Congress never intended for incidental fallback to be regulated under the § 404 permitting program. AMC argued that the concept of incidental fallback was being used by the agencies to create regulatory powers that were outside the scope of the § 404 permitting program.

The agencies argued that they are empowered to regulate wetlands generally by the CWA. They further argued that the Tulloch rule simply closed a loophole which had previously existed, and that they were simply applying the regulatory authority vested in the them by the Act.

The Federal District Court for the District of Columbia invalidated the Tulloch rule, setting it aside after examining the specific language and the legislative history of the CWA. In so doing, the court prohibited the agencies from regulating removal activities in wetlands through the regulation of incidental fallback. The court observed, "the appropriate remedy for what the agencies now perceive as an imperfect statute is congressional action; defendants' authority is limited to adopting regulations that effect the will of Congress as expressed in the statute."

The court's ruling prohibits the agencies from using "incidental fallback" as a means to regulate activities in wetlands that are not otherwise subject to § 404. Exactly what those activities are is not yet entirely clear, but on March 11, 1997 the government released the "Tulloch guidance" to help agency personnel interpret the decision.

U.S. Circuit Court of Appeals in D.C. allows agencies to continue enforcing the "Tulluch Rule" while the AMC v. Corp of Engineers case is on appeal.

Tulloch Ruling in American Mining Congress v. U.S. Corps of Engineers Stayed; Guidance Letter No Longer in Effect.

On June 25, 1997, the U.S. Circuit Court of Appeals for the District of Columbia granted a stay of the District Court's decision that the federal regulation of activities involving only "incidental fallback" under the "Tulloch Rule" were beyond the Corps of Engineers' and EPA's (the Agencies') authority. The Agencies had used the rule to regulate activities in wetlands where no foreign materials were introduced into the waters because of the harmful affects of the movement of large amounts of materials within waters and wetlands. The stay allows the Agencies to continue enforcing the rule while the case is on appeal.

In response to the stay, John F. Studt, Chief of the Regulatory Branch of The Corps of Engineers issued a "Memorandum for Major Subordinate Commands" which stated that the April 11, 1997 joint guidance (see "How is the Corps of Engineers Reacting . . ." ) is no longer in effect and that the "excavation rule" (i.e. the Tulloch rule) is in full effect. This memorandum went on to say, however, that no enforcement actions should be initiated for activities involving only incidental fallback which occurred between January 23, 1997 and June 25, 1997.

When the D.C. Circuit Court issued its stay, it also agreed to hear the appeal on an expedited schedule. Final briefs are due November 19, 1997-so the decision should come out in early 1998.

Must a local government enforce the Wetlands Conservation Act when enforcement activities directly conflict with other legal obligations to maintain drainage systems?

McLeod County Board of Commissioners as the Drainage Authority for McLeod County Ditch No. 8 v. The State of Minnesota and the Department of Natural Resources, 549 N.W.2d 630 (Minn. Ct. App. 1996)

Under the Wetlands Conservation Act (WCA), the DNR and the McLeod County commissioners entered into a stipulation wherein the parties stipulated the 20 year surface water level of Bullhead Lake to be at a 96.7 foot elevation. Under WCA, no wetlands may be drained which have been in existence for more than 20 years, or which have been designated as constituting the 20 year surface level.

Subsequently, the county commenced a repair project on a ditch, "Lateral No. 3," in order to improve drainage for adjacent farms. The county undertook this repair project in order to satisfy its duty under Minnesota law to maintain the ditch in "the same condition as it was when originally constructed." Id. at 633, citing Fischer v. Town of Albin, 104 N.W.2d 32, 34 (Minn. 1960) (note that there is no statutory obligation to maintain ditches). Shortly after construction began, the DNR issued a "cease and desist" order upon finding that the proposed repairs would drop the level of Bullhead Lake below the 96.7 foot level. The DNR offered to rescind the order only if the county could otherwise maintain the level of the lake at 96.7 feet or if the county could otherwise construct replacement wetlands at its own expense.

The county brought suit against the state and the DNR on behalf of those landowners funding the ditch system. The county alleged an unconstitutional taking of the landowners' property right to have ditches maintained and asked for relief in the form of an injunctive order against the enforcement of the WCA. Pointing to its obligation under Fischer to maintain the ditch in "the same condition as it was when originally constructed," the county argued that it should not be required to enforce the state law in contradiction with this duty. Id. at 633.

The Court of Appeals disagreed, holding that the "the county has an obligation to maintain a ditch in manner consistent with the policies established by the legislature in the WCA." Id. at 633-634. The county's request for injunctive relief was denied, and it was ordered to enforce the WCA. Responding to oral argument inferences that "McLeod and other counties are in opposition to the [WCA] . . . and may choose not to implement or enforce it," the court held such action would amount to an abandonment of the county's obligations and that its "remedy lies with the legislature." Id. at 634.

It is important to note that the county did not request any monetary award for a taking. Because of this, the court did not decide the issue of whether WCA's impact on the property owner's right to have a ditch maintained in the manner in which it was originally constructed resulted in a taking which required compensation. The court did state that the injunctive relief which the county sought could not be awarded even if a taking had occurred.

How much weight may the Department of Natural Resources (DNR) Commissioner and Administrative Law Judges give to testimony given by DNR experts in making permit determinations?

In the Matter of the Application of the Lac Qui Parle-Yellow Bank Watershed District to Excavate Four Floodways in the Lac Qui Parle River, Lac Qui Parle County, 1995 WL 6419 (Minn. Ct. App. 1995)

The Lac Qui Parle-Yellow River Watershed District sought public waters work permits from the Department of Natural Resources (DNR) in order to excavate four floodways on the Lac Qui Parle River. The DNR refused to issue the permits. At a contested hearing, DNR experts presented evidence that the proposed floodways would be "detrimental to significant fish habitat" and that there were two "non-structural alternatives" to the proposed project, and the Administrative Law Judge (ALJ) ruled in the DNR's favor.

The DNR Commissioner adopted the ALJ findings and conclusions almost in their entirety, and the watershed district challenged the Commissioner's decision. The watershed district argued that there was not substantial evidence to support either the Commissioner's conclusions that the proposed floodways would substantially affect fish habitat or the Commissioner's decision that there existed other feasible and prudent alternatives to the project.

The Minnesota Court of Appeals rejected the watershed district's arguments, holding that the DNR Commissioner, and the ALJ on whose findings and conclusions he based his decision, could "give most weight to [DNR expert's] testimony." Id. at *1, citing Quinn Distributing Co. V. Quast Transfer, 181 N.W.2d 696, 700 (1970).