Orchard Hill Building Company, doing business as Gallagher & Henry, Plaintiff-Appellant,
United States Army Corps of Engineers, Defendant-Appellee.
May 29, 2018
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 1:15-cv-06344 -
John Robert Blakey, Judge.
Bauer, Barrett, and St. Eve, Circuit Judges.
Eve, Circuit Judge.
case concerns just shy of 13 acres of wetlands, which lie in
a south-suburban plot of land called the Warmke parcel.
Orchard Hill Building Company purchased the Warmke parcel in
1995 with plans for a large-scale residential development.
Not wanting to run afoul of the Clean Water Act, Orchard Hill
requested a determination from the United States Army Corps
of Engineers that the wetlands (or the "Warmke
wetlands") were not jurisdictional "waters of the
United States." The Corps decided that they were, and
Orchard Hill has spent the last 12 years challenging that
decision. We find that the Corps has not provided substantial
evidence of a significant nexus to navigable-in-fact waters,
and therefore vacate and remand with instructions that the
Corps reconsider its determination.
of regulatory, judicial, and administrative events led to the
Corps' final claim of jurisdiction over the Warmke
wetlands. We start at the beginning.
enacted the Clean Water Act in 1972 "to restore and
maintain the chemical, physical, and biological integrity of
the Nation's waters." 33 U.S.C. § 1251(a). One
of the Act's primary means to that end is its general
prohibition on polluting "navigable waters," which
it defines as "waters of the United States."
Id. §§ 1311(a), 1362(7), (12). The Act
imposes significant criminal and civil penalties for such
pollution, id. §§ 1319(c), (d), and
obtaining a permit to build on or near such waters can be a
lengthy and costly process. Ye t the Act does not define what
constitutes "waters of the United States." See,
e.g., United States v. Krilich, 209 F.3d 968,
970 (7th Cir. 2000).
job falls to the Corps of Engineers and the Environmental
Protection Agency-and it has proven "a contentious and
difficult task." Nat'l Ass'n of Mfrs. v.
Dep't of Def., 138 S.Ct. 617, 624 (2018); see
also 33 C.F.R. § 328.3 (the Corps' definition
of waters of the United States); 40 C.F.R. § 122.2 (the
EPA's definition of waters of the United States). To take
a recent example, the agencies' attempt in 2015 to
redefine the statutory phrase resulted in a new
administration's swift overhaul and a slew of litigation.
See generally Nat'l Ass'n of Mfrs., 138
S.Ct. at 625-27; Executive Order 13778: Restoring the Rule of
Law, Federalism, and Economic Growth by Reviewing the
"Waters of the United States" Rule, 82 Fed. Reg.
12, 497 (Feb. 28, 2017); Definition of "Waters of the
United States"-Addition of an Applicability Date to 2015
Clean Water Rule, 83 Fed. Reg. 5, 200 (Feb. 6, 2018); James
Conrad, Wetlands Jurisdiction, Env. Sci. Deskbook
§ 9:1 (2018). This case, however, concerns the
Corps' definition of waters of the United States as it
existed before 2015. See Schaefer v. Walker Bros.
Enters., 829 F.3d 551, 558 (7th Cir. 2016).
Corps defined waters of the United States broadly to include
waters "subject to the ebb and flow of the tide,"
"rivers" that could be used for interstate
recreation or commerce, "tributaries" of such
waters, and-most importantly here- "wetlands adjacent
to" other waters of the United States, including
tributaries. 33 C.F.R. §§ 328.3(a)(1)-(7)
(1994). There was (and is) an exemption, though,
for "prior converted cropland." Id. §
328.3(8). The Corps considers "prior converted
cropland" to mean wetlands "manipulated …
and cropped" before 1985 (when Congress enacted the
"Swampbuster" program, which denies benefits to
farmers who use wetlands for farming), but not abandoned of
farming use for five or more years. See Proposed Rule
for the Clean Water Act Regulator Programs of the Army Corps
of Engineers and the Environmental Protection Agency
(Proposed Rule), 57 Fed. Reg. 26, 894, 26, 897-26, 900 (June
16, 1992); Clean Water Act Regulatory Programs (Final Rule),
58 Fed. Reg. 45, 008, 45, 031-45, 034 (Aug. 25, 1993).
or perhaps because of, those definitions, "[i]t is often
difficult to determine whether a particular piece of property
contains waters of the United States." U.S. Army
Corps of Eng'rs v. Hawkes Co., 136 S.Ct. 1807, 1812
(2016). But concerned landowners need not risk fines or
endure the permit-application process before deciding whether
to build on or alter their property. They can instead seek a
"jurisdictional determination" from the Corps as to
whether their property contains waters of the United States.
33 C.F.R. §§ 320.1(a)(6), 325.9, 331.2.
Hill was such a landowner. In 1995, it completed its purchase
of the Warmke parcel, a 100-acre former farmland located in
Tinley Park, Illinois. Orchard Hill then received permits to
build a two-phase residential development on the parcel. The
first phase started in 1996, and over the next seven years,
Orchard Hill constructed more than a hundred homes.
Construction altered the area's water drainage, and about
13 acres pooled with rainwater and grew wetland vegetation.
Before starting the second phase and building on those
acres-the Warmke wetlands-Orchard Hill sought a
jurisdictional determination from the Corps in 2006.
history of the Warmke [wetlands] jurisdictional determination
can be described as lengthy, contentious and complex,"
as a Corps district engineer aptly put it. The Warmke
wetlands, like all of the Warmke parcel, are surrounded by
residential development. The closest navigable water (as that
phrase is literally understood, meaning navigable-in-fact) is
the Little Calumet River, which is 11 miles away. In between
the Warmke wetlands and the Little Calumet River are man-made
ditches, open-water basins, sewer pipes, and the Midlothian
Creek-a tributary of the Little Calumet River. The assigned
district engineer determined the Warmke wetlands were
adjacent to that tributary, and thus waters of the United
States. See 33 C.F.R. §§ 283.3(a)(5), (7).
That determination rested on the fact that the Warmke
wetlands drained, by way of sewer pipes, to the Midlothian
Creek. Orchard Hill appealed that decision, pursuant to its
regulatory right. See id. §§ 331.6(a),
that appeal was pending, the Supreme Court issued a landmark
decision paring back the Corps' jurisdictional reach.
Rapanos v. United States, 547 U.S. 715 (2006),
involved two consolidated appeals from decisions upholding
jurisdictional determinations. Both cases posed the question:
When do wetlands that are not adjacent to waters that are
navigablein-fact constitute waters of the United States?
Rapanos did not produce a majority opinion, and
without one to definitively answer the question, we have held
that Justice Anthony Kennedy's concurrence controls.
United States v. Gerke Excavating, Inc., 464 F. 3 d
723, 724-25 (7th Cir. 2006) (per curiam); see also N.
Cal. River Watch v. City of Healdsburg, 496 F. 3 d 993,
999-1000 (9th Cir. 2007); United States v. Robison,
505 F.3d 1208, 1221 (11th Cir. 2007).
Kennedy decided that a wetland's adjacency to a tributary
of a navigable-in-fact water is alone insufficient to make
the wetland a water of the United States. Instead, "the
Corps' jurisdiction over [such] wetlands depends upon the
existence of a significant nexus between the wetlands in
question and ...