Preserving Your Ability to Collect Damages When You Buy Damaged Property

The Senns bought the surface estate to 23,013 acres on June 5, 1997. Part of this land had been used for active oil production since 1948, which had left oil and gas related roads, well locations, treatment plants, exposed pipelines, and tank batteries scattered around, by the time the Senns bought it.

The deed transferring title to the Senns contained normal language often considered boilerplate:

AS IS WHERE IS, AND WITH ALL FAULTS AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER EXPRESS OR IMPLIED, WRITTEN OR ORAL, EXCEPT SOLELY THE WARRANTY OF TITLE EXPRESSLY SET FORTH HEREIN ABOVE; IT BEING THE INTENTION OF GRANTOR AND GRANTEE TO EXPRESSLY REVOKE, RELEASE, NEGATE AND EXCLUDE ALL REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES AS TO…..(viii) ANY ENVIRONMENTAL, GEOLOGICAL, METEOROLOGICAL, STRUCTURAL, OR OTHER CONDITION OR HAZARD OR THE ABSENCE THEREOF HERETOFORE, NOW, OR HEREAFTER AFFECTING IN ANY MANNER ANY OF THE PROPERTY, INCLUDING, WITHOUT LIMITATIONS, CONCERNING WATER IN, ON, UNDER, OR ABOUT THE PROPERTY.

Then, the Senns sued Texaco, Exxon, and seemingly every other oil company in sight, to recover for all these surface damages to their land, as well as additional damage caused to the underground water aquifer. Needless to say, the oil companies were less than impressed. They basically walked right into court and said “the damage had already been done, so there’s no way the Senns can win.” The rule the oil companies relied on is simply this:

a cause of action for damages to real property is a personal right which belongs to the person who owns the property at the time the thing that causes the damage commences to affect the land. It is not a right that “runs with the land” from owner to owner.

Strike one.

But the Senns said “not so fast” and threw out a few “come backs”: (1) the seller conveyed us their rights against these big, bad oil companies for surface damages, and (2) we, and nobody before us, discovered the aquifer damage, so since we discovered it, that cause of action, at least, is ours, all ours.

Said the court “well, let’s take a peek at the written documents you signed or accepted.” And that was pretty much the end of the case. In response to the Senns’ first comeback argument, the court simply read from the deed:

Nothing contained herein is intended to limit the right of [Seller]….to seek to recover whatever surface damages to which [Seller]…..may be entitled under Texas law in the event of the production or mining of any of the foregoing minerals and other substances.

The Sellers expressly kept to themselves the right to sue the oil companies for damages relating to oil and gas production. If the Sellers kept it, by definition they couldn’t have also conveyed it to the Senns. Strike Two.

On the Senns’ comeback argument No. 2, the Court said the whole “I discovered it first” applies to statutes of limitations, where, for example, a person has 2 years to bring a lawsuit, and they don’t bring it until 3 years after the damaging event, but they argue “the statute of limitations should be extended because I only now discovered the injury.” The court basically said “this is an irrelevant argument for land damage. The question of statute of limitations can’t even apply unless and until a party has the right to bring a cause of action, and the Senns have absolutely no right to bring any cause of action for surface damages. Strike three, and the Senns were poured right out of court.

In a very similar case, David Pluff bought the surface estate to 10 acres in Rusk County, Texas, for $1,000 per acre. The year was 1992. By this time all oil production on this land had come to a halt. He moved “two cattle and some horses” onto it, but soon had to get them back off the property because there was just too much abandoned oil production material. It had all been, DOM DoM dom……..Left Behind.

So he sued all these oil companies that had operated on his land, and he actually won a jury trial verdict against Exxon for $30,000. Unfortunately, the Court of Appeals overturned the verdict and awarded him a big, fat zero. Why? Because he didn’t own any cause of action against Exxon. The damage had been done to the land before he bought it.

In technical legal terms, we call it “standing.” A plaintiff must have standing to come before the court. Standing requires the plaintiff to have a legally recognized injury producing legally recognized damages, and a defendant that has caused those damages.

Pluff’s case went a little further, though. He also argued that the terms of the oil and gas lease required these oil companies to remove all their equipment from the land. But here’s the language from the lease:

[Exxon] shall have the right at any time during or after the expiration of this lease to remove all property and fixtures placed by [Exxon] on said land including the right to draw and remove all casings.

The court decided that “shall have the right” doesn’t mean “must” but rather made it optional at Exxon’s discretion. Here’s another example of language that just doesn’t quite impose a duty to remove equipment:

upon termination of this lease, lessee shall have 90 days to remove its machinery, structures and other property erected on the land by lessee.”

There is no implied duty to repair damage done to land caused by rightful and necessary use. Aren’t written documents wonderful? They can clear up a lot of misunderstandings, if people would just believe what they said.

So what are the morals to these stories? Well, there are several:

As buyer:

1. Put an express provision in deeds or the sales contract conveying all the seller’s personal rights to damages for prior surface damage to the real property. This is in the nature of an assignment of a personal right.

2. Make sure you understand the effect of prior leases affecting the property, so you know what can be enforced against prior users of the property, assuming you do get the assignment of the seller’s rights to sue for those damages. That effect could well be zero, or several hundred thousand dollars.

3. Bargain for warranties in the deed about the condition of the land and any subsurface aquifer.

4. Perform a complete inspection of the land and any subterranean waterways before purchasing the land. This is typically referred to as “due diligence.” Do your homework.

As Seller, make sure whatever warranties you agree to make, whether about title, land condition, improvements, aquifer condition, or any other matter, are accurate. And as the Buyer bargains for more warranties, bargain for more cash. Lots more cash.

Exxon Corp. v. Pluff, Case No. 12-01-000009-CV, Texas Court of Appeals, Tyler, May 31, 2002; Senn, et al., v. Texaco, Inc., et al., 55 S.W.3d 222 (Tex. App.–Eastland 2001).

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Non-Jurisdictional Waters in the EPA’s Draft “waters of the US” Rule; Clean Water Act

In the newly proposed rule to re-define “waters of the United States” for purposes of determining which waters (and land areas) are within the jurisdiction of the Clean Water Act, the EPA also proposes to exclude certain waters defined in the draft rule. This post will summarize these non-jurisdictional waters.

These exemptions will become very valuable, and I can foresee fierce disputes over whether a water feature comes within one of these exemptions, because the EPA proposes to let the exclusions trump any language of inclusion elsewhere in the proposed rule. The non-jurisdictional waters are:

(i) Waste treatment systems, including treatment ponds or lagoons, designed to meet the requirements of the CWA.

(ii) Prior converted cropland, although the final authority regarding CWA jurisdiction would remain with EPA notwithstanding any other Federal agency’s determination of an area’s status as prior converted cropland.

(iii) Ditches that are excavated wholly in uplands. This means ditches that: (1) at no point along their length are excavated in a jurisdictional wetland (or other water); (2) drain only uplands; and (3) have less than perennial flow. To meet this exclusion the ditch must meet all three sub-parts at all times.

(iv) Ditches that do not contribute flow, either directly or through another water, to a water used or susceptible to being used in interstate or foreign commerce, or interstate waters and wetlands, or the territorial seas, or any impoundments of any of these waters.

(v) The following “features”:

(A) Artificially irrigated areas that would revert to upland should application of irrigation water to that area cease;

(B) Artificial lakes or ponds created by excavating and/or diking dry land and used exclusively for such purposes as stock watering, irrigation, settling basins, or rice growing;

(C) Artificial reflecting pools or swimming pools created by excavating and/or diking dry land;

(D) Small ornamental waters created by excavating and/or diking dry land for primarily aesthetic reasons;

(E) Water-filled depressions created incidental to construction activity;

(F) Groundwater, including groundwater drained through subsurface drainage systems; and

(G) Gullies and rills and non-wetland swales.

Now let’s look at some statements included in this draft rule that define “gullies”, “rills” and “swales.” Put aside for the moment any preconceived notions of these terms, or how they may be defined in other contexts.

Gullies. Gullies are relatively deep channels that are ordinarily formed on valley sides and floors where no channel previously existed. The two main processes that result in the formation of gullies are downcutting and headcutting, which are forms of longitudinal (incising) erosion. These actions ordinarily result in erosional cuts that are often deeper than they are wide, with very steep banks, often small beds, which typically only carry water during precipitation events. Gullies are younger than streams in geologic age and typically lack an ordinary high water mark (OHWM). They are commonly found in areas with low-density vegetative cover or with soils that are highly erodible. EPA notes that some ephemeral streams are called ‘‘gullies’’ when they are not gullies in the technical sense.

Rills. Rills are formed by overland water flows eroding the soil surface during rain storms. Rills are less permanent on the landscape than streams and typically lack an OHWM.

Swales. Swales are non-channelized, shallow trough-like depressions that carry water mainly during rainstorms or snowmelt. Swales typically lack the OHWM that is characteristic of jurisdictional streams. Swales may also be considered wetlands if they fit that definition. Wetland swales would also be analyzed either as adjacent waters or as “other waters”, depending on whether they meet the proposed definition of “adjacent.”

Finally we come to “puddles” which, you will note, is not included in the list of excluded waters. Supposedly this is not because EPA considers puddles jurisdictional, it is because EPA now thinks ‘puddles’ is an insufficiently precise hydrologic term. So while you may still call your favorite Poodle Puddles, using the term in this rule would be contrary to the stated goals of increased clarity, predictability, and certainty. The EPA was also concerned that listing puddles could have created the misunderstanding that anything larger than a puddle was jurisdictional, which is not the intent of this rule.

Now, remember that the overall concept behind this draft rule is that all waters in a basin that have a “significant nexus” or connection with a traditional “waters of the US”, are also waters of the US. While this section defines non-jurisdictional waters, the EPA still plans to use non-jurisdictional waters to connect other waters together.

Exclusion as a “waters of the US” is not a complete pass under the CWA. Some of these geographic features (ditches, rills, gullies) may function as ‘‘point sources’’ under CWA section 502(14), such that discharges of pollutants to waters through these features may be subject to other CWA regulations (e.g., CWA section 402).
The EPA is specifically requesting comments to more clearly define the differences between jurisdictional waters and non-jurisdictional waters, including these proposed defined terms. Please see my separate blog post compiling the issues on which the EPA is specifically requesting comments throughout the entire draft rule.

So here’s where the water really turns to mud on these non-jurisdictional waters. Can you and nine other people of normal but different intelligence and experience, exercising normal discernment, look at the same property and come to the exact same conclusion about which parts of the property are jurisdictional? And remember, the fine for being wrong could be a cool $75,000 per day. If not, then maybe there are some changes you could suggest to the EPA in the form of written comments to this rule.

 

How to Comment on the EPA’s “Waters of the US” Proposed Rule; Clean Water Act

UPDATED 2014-10-08: On April 21, 2014, the EPA published its draft rule redefining “waters of the US” for purposes of the Clean Water Act.  The 90 day comment period closes July 21, 2014 October 20, 2014 November 14, 2014.

The best source of information about the mechanics of filing the comments, and the substantive rule, may be found at:

http://www.regulations.gov/#!documentDetail;D=COE_FRDOC_0001-0673

The process is very simple.  You can create a PDF document of your comments and upload it on this page.  Your comments will be available to the public, and you can see all other comments filed. While it is possible to upload a document in other formats than PDF, such as Word, I strongly suggest you use PDF so it cannot be easily manipulated by others.

The Docket ID number for this rule project is EPA-HQ-OW-2011-0880, and the official proposal is in 79 Fed. Reg. 22,188 (April 21, 2014), but you can most easily access it on the website referenced above.

In fact, in my opinion this website’s design and function is superb, certainly at the other end of the spectrum from all the negative criticisms made about the health care website.

While I don’t have high expectations that comments which are radically different than the draft rule will successfully persuade the EPA to change its draft, I think it is important to understand that comments have other important effects.  The ultimate purpose of filing comments is to bring about change, and that change may come in any number of different ways.  They give you the opportunity to communicate with others who have a similar perspective.  Comments identify you to allies that otherwise may never know you.  Your comments will encourage others that have like concerns.  Your comments may inspire others to incorporate your ideas with theirs as they move forward with further challenges to the rule.  And your comments may be useful in future lawsuits filed against the rule.

Just remember, the deadline to file comments is July 21, 2014.  Other of my blog posts describe the substance of the proposed rule, summarize some of my concerns with this proposed rule, and one lists the issues on which the EPA has specifically requested comment.  If you file comments to this rule proposal, I’d appreciate it if you would Email me a copy when you do, to mark@texasenvironmentallaw.com.

Comments EPA Wants on its Proposed “Waters of the US” Rule

I originally intended this post to be a list of the issues on which the EPA and USACE have specifically requested comments in the draft rule proposing to redefine “waters of the US” for purposes of the Clean Water Act.  But the list is too long for a post.  So I will instead provide a very broad overview of the comments the agencies hope you will file.  If you want the full compilation, please send an Email to mark@texasenvironmentallaw.com and I will send you that PDF.

The agencies see the world of water in three categories: (1) those clearly subject to CWA jurisdiction; (2) those clearly not subject to CWA jurisdiction; and (3) “other waters”, the jurisdiction of which must be determined on a case-by-case basis.  In the most general terms, the agencies want a rule that eliminates as many of these class-3 “other waters” as possible.

On one hand, the agencies want to write a rule that provides predictable, consistent “yes” or “no” answers to the jurisdictional question, reasoning that this certainty is more efficient for both the regulators and the regulated.  Without countervailing considerations, such a rule would be fairly easy to write.

But on the other hand, the agencies want to include as a “water of the US” every water the federal government has power to regulate under the Commerce Clause, in order to fulfill their CWA responsibilities.  Since the exact outer limit of Commerce Clause power is clear as mud, these two highest priorities are incompatible from the get-go.

Within these priorities, the agencies have proposed a series of new and pre-existing defined-water-feature terms.  They generally want comments as to how the rule could better differentiate between these terms, which include “tributaries”, “wetlands”,“ditches”, “gullies”, “rills”, and “swales.”  They seem to want a specific water feature to clearly fit only one of these definitions.  Obviously, these types of comments are more in the wheelhouse of hydrologists and environmental consultants.  However, the definition of “tributary” also tests the outer boundaries of Commerce Clause jurisdiction.

This draft rule also includes old and new defined terms that describe how one water feature relates to other water features.  These terms include “adjacent”, “region”, “neighboring”, “riparian area,” “floodplain”, “bordering” areas, and waters with a “significant nexus” to other waters in the relevant watershed/basin.  I think these definitions seem to mostly answer the question “do I [the agency] have legal jurisdiction over this water feature?”  These are blended legal and scientific queries.

In regard to the case-by-case category of jurisdiction, i.e. “other waters with a significant nexus”, the agencies want as many suggestions as possible which propose to identify classes and categories of waters within this category that could instead be jurisdictional or non-jurisdictional by rule.  The agencies will even consider different rules for different areas of the country.  For example, the agencies are considering whether to determine by rule that prairie potholes, Carolina and Delmarva bays, pocosins, Texas coastal prairie wetlands, and western vernal pools, either alone or in combination with ‘‘other waters’’ of the same type in a single point of entry watershed, have a significant nexus and are jurisdictional (or, perhaps, non-jurisdictional).

Finally, in their ideal world, the agencies want a rule that “rolls with the changes.”   By this I mean they want a rule that automatically expands their CWA jurisdiction in the future as new scientific research identifies more connections between water features.  If this rule proposal hasn’t challenged you enough yet, this concept should get your noodle gyrating.

As I said at the outset, this is a very, very broad overview of what types of comments the agencies hope you will file.  For the more complete compilation (which has much more detail), please send an Email to me at mark@texasenvironmentallaw.com and I will forward you my list.

The Substance of the Draft EPA “Waters of the US” rule; Clean Water Act

In prior blog posts I’ve explained different aspects of this new draft rule that proposes to re-define the term “navigable waters” in the Clean Water Act.  In this post I will (finally) address the substance of the draft rule, including the challenges presented by the general theory of the rule and the text of the rule. And I am going to try to do this all in layman’s terms, with the occasional wit and sarcasm.

First, a bit of context to help understand the draft rule.  The purpose of the Clean Water Act is to attain or maintain a certain water quality of those waters to which the Act applies, i.e. clean water.  The Clean Water Act establishes several different processes that must be followed when humans do something that affects, or may affect, the clean-ness of water.  For one of these processes, the Clean Water Act makes it illegal for anyone to affect navigable waters without first obtaining a permit from the US Army Corps of Engineers.  These are often referred to as “dredge and fill permits” but don’t let that tag fool you.  Thou shalt not disturb navigable waters without a permit.

A brief word on disturbing water. It’s not limited to what would make water less clean in the common sense.  It includes anything that affects the water-dirt, rock, heat, etc.  And the disturbance can come from practically any activity, from turning a shovel of dirt, or landscaping, or operating a dairy farm or other agricultural business, or oil and gas exploration and drilling activities, fracing, etc.  The Clean Water Act only excludes two things from its coverage even though they may disturb water: agricultural stormwater discharges and return flows from irrigated agriculture.

One of the most vexing questions created by this legislation has always been, and still is, to what waters does it apply?  We’ve always understood that it applies to only surface water (groundwater is not navigable).  And we’ve always understood that it applies to large rivers like the Mighty Mississippi, which is clearly navigable.  But at what point does a water become not navigable waters?  And where, exactly, does a navigable water end and land begin?  These are the questions this new draft rule is intended to answer.

Not surprisingly, the EPA wants to expand the definition of “navigable waters” to the greatest extent possible, by including as “navigable waters” everything the federal government could lawfully regulate under the Commerce Clause of the US Constitution.  And that certainly seems to be the EPA’s intent with this new draft rule.

The Commerce Clause.  Congress has the power to make all laws necessary and proper to regulate commerce among the States and with the Indian Tribes.  The powers not delegated to Congress by this provision are reserved to the States.  Back in the old days the federal power to regulate commerce was limited to interstate commerce-stuff that crossed state lines, like that trailer full of Coors Beer in Smokey and the Bandit.  Regulation of commercial activity that stayed inside one state, intrastate commerce, was reserved to that state.

But over time our federal government successfully argued, over and over, that more commercial activity was actually interstate, or affected interstate commerce, and so today basically all commercial activity is considered interstate commerce which Congress can regulate.  So let’s see how this draft rule proposes to bring all that power to real estate around you and me, because ultimately this new rule is about real estate more than water.

First, suspend your common sense as you interpret this.  The rule is not intended to make common sense, it’s to grab land.  Land, not just water.

The Clean Water Act applies to waters used in interstate or foreign commerce, territorial seas, waters that flow from one state to another (interstate waters), and the wetlands adjacent to all these waters.  Wetlands still means areas inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions.  Examples include swamps, marshes, bogs, and such.  So far, so good.  If you see water on land, a red flag appears and you at least know to ask the question.

Now to begin the illogical.  The EPA wants to add all tributaries of all these waters, which practically writes the word “navigable” right out of the statute.  Some tributaries have a bed and banks and an ordinary high water mark which practically directs the flow of water into a navigable water.  But EPA proposes to include as tributaries wetlands, lakes, and ponds even if they lack a bed, a bank, or an ordinary high water mark, if they contribute flow to a navigable water, whether directly or indirectly.  How do lakes and ponds contribute flow to a navigable water?  Seems to me it’s called the hydrological cycle which could, in theory, pull into this definition every lake and pond except those specifically excluded in the Clean Water Act.  Notice there is no requirement that the water actually be capable of moving goods in interstate commerce.

But wait, there’s more.  If something could be a tributary as described above, it does not lose its “qualification” as a tributary if, for any length, there are one or more man-made breaks (such as bridges, culverts, pipes or dams), or one or more natural breaks (wetlands, debris piles, boulder fields, or a stream that flows underground) so long as a bed and banks and an ordinary high water mark can be identified upstream of the break.  The way I read this, altering one of these bridges, culverts, pipes, dams, debris piles, boulder fields, or underground streams in a natural break would affect a “navigable water” and require a permit.  So parts of tributaries don’t actually have to connect to navigable water to be subject to the Clean Water Act.

And yes, there’s still more.  These tributaries can be natural, man-altered, or man-made.  They include waters such as rivers, streams, lakes, ponds, impoundments, canals, and certain ditches.  So now, someone could take dry land not otherwise subject to the Clean Water Act, and cause it to become navigable waters by constructing a stream, lake, pond, canal or ditch.  Can you imagine ever being able to remove a water from Clean Water Act jurisdiction?  Jurisdictional creep.  Addition easy, subtraction not so much.

Tributaries don’t even have to contain water all the time, either.  Many features, like dry arroyos and mountain channels, have beds and banks even though they only flow when it rains or the snow melts.  If you see any dry bed and bank on a piece of land you might want to buy, beware.

Now, for every “water” identified by any of the above criteria, add bordering or contiguous waters.  Next, Fonzi jumps the shark.  You didn’t think he’d already jumped, did you?

The EPA wants to add “neighboring” waters.  Neighboring waters include areas (note that “areas” could be land) bordering waters where surface or subsurface hydrology directly influence the ecological processes and plant and animal community structure (these are termed “riparian areas”).  These riparian areas are transitional areas (i.e. land) between aquatic and terrestrial ecosystems that influence the exchange of energy and materials between those ecosystems.  They don’t have to be connected to surface water-they can be connected to groundwater and thus not be visually adjacent to any surface water whatsoever.  Any chance a normal non-expert human being could visually identify a riparian area?

There’s still more.  Neighboring waters also include areas (again, possibly dry land) bordering inland or coastal waters formed by sediment deposition from such water under present climactic conditions which are inundated during periods of moderate to high water flows.  This is termed “floodplain.”  But in times of drought, which describes most of Texas much of the time, these areas will not be obvious.

All of the waters and land identified so far would be automatically covered by the Clean Water Act and any activity on those waters or land would require a permit.  It is the EPA’s position that they are doing us a favor by clarifying that all these waters and non-water areas (land) are subject to Clean Water Act jurisdiction, which is why I said in a prior post that, in relative terms, they propose to solve a concern over a hangnail by amputating an arm.

So now we come to the case-by-case determinations to further expand the lands and waters covered by this new draft rule.  Waters and wetlands, either alone or in combination with other similarly situated waters in a watershed that drains to the nearest sea, or water used or capable of being used in commerce, or water that flows from one state to another, that significantly affects the chemical, physical, or biological integrity of one of these waters or wetlands, may be covered by the Clean Water Act also.  These areas are not adjacent to a water or wetland but they have a “significant nexus” to already-covered waters, wetlands and areas.  The connection must be more than speculative or insubstantial.  They include waters and wetlands that perform similar functions and are located sufficiently close together or sufficiently close to a navigable water that they can be evaluated as a single landscape unit with regard to their effect on the chemical, physical, or biological integrity of a navigable water.

Put this in the context of enforcement.  You disturb your land (or you hire someone else to).  EPA shows up and claims the land is regulated under the Clean Water Act because some feature of the land has a “significant nexus” to a navigable water located somewhere in the same watershed as your land.  You basically now have to stop working on the land, and file a court action where the EPA has to prove that your land has a significant nexus to a navigable water.  This practically means you have to invest some time and money to disprove the significant nexus.  Experts.  Lawyers.  Time.  Time.  Time.  Appeals perhaps.  EPA does not necessarily have to win, they just have to outlast you.

And in all likelihood you will be fighting this battle with the risk of being fined up to $75,000 per day for every day the land was disturbed without a permit, until you restore the land, until you win the case, making the fine retroactively disappear.  No pressure.

Over a decade in the making, in my opinion the rule, once finalized, will literally redefine the landscape of federal water pollution regulation, impacting laws governing wetlands fill, water discharge permits, oil spill liability, spill contingency planning, hazardous substance spill response, and more.  It will impact municipalities, states, and industry of every type, from natural resource extraction like energy and mining, to construction and development and beyond.

What to do?  Try to change the form of the final rule by filing comments to the draft rule.  Some of the best comments will be your story-how will this rule affect you and your business?  Be as specific as possible.

Work with an association that will file comments to this draft rule.  For example, I work with the Dallas Builders Association.  Share your story with those at the association who are working on this.  It could help them write their comments.

Contact your federal congressmen and senators.  Share with them your story about how this draft rule will affect you.  Ask them to sponsor legislation to rein in the EPA on this rule.  There are already legislative efforts underway.

Contact me with any questions, or if I may be of service, and stay tuned for future developments.

EPA Enforcement Actions Spotlight the Insanity of Clean Water Act Draft Rule

To understand just how gargantuan my concerns are about the EPA’s new Clean Water Act “waters of the US” draft rule, let’s consider two real life stories from the EPA’s files.  First up, Michael and Chantell Sackett.

The Sacketts bought a 2/3rds acre residential lot in Northern Idaho.  Between their lot and Priest Lake (which is surrounded by mountains) sat several lots already developed with houses.  The Sackett’s lot needed some pre-construction prep work, so in April and May of 2007, they filled in about ½ acre of their lot to level it out.

Months later, the EPA sent the Sacketts a written notice that the land they filled in included “waters of the US” (wetlands related to Priest Lake) and, as such, they were in violation of the Clean Water Act for failing to obtain a permit from the US Army Corps of Engineers before disturbing their land.  The notice came with a Compliance Order, which among other things included a Restoration Work Plan, drafted by the EPA, directing them as to how, and how quickly, the EPA required them to restore their land to its pre-construction condition.

Here’s where things get sticky. The Clean Water Act authorizes the EPA to impose a civil penalty against violators of up to $37,500 per day, from the day the land is first disturbed until the day it is restored.  The EPA believes the amount doubles, to a maximum of $75,000 per day, when the EPA prevails against a person who has been issued a compliance order and has failed to comply.  That’s $37,500 for violating a statute, and $37,500 for violating a compliance order.  So the EPA puts alleged violators in this squeeze: do what we say now, and pay no more than $37,500 per day, OR don’t do what we say, and risk having to pay us $75,000 per day once we decide to sue you in court for the violation.  And once the EPA issues a compliance order, the US Army Corps of Engineers won’t issue a permit for that land until the alleged violators complete the compliance order requirements.

With no good option, the Sacketts sued the EPA for violating their right to due process of law.  And fortunately, in March of 2012, the US Supreme Court (9-0!) ordered the EPA to allow alleged violators the right to challenge these compliance orders when they are issued.  Even the US Supreme Court had no hesitation calling this tactic “strongarming.”  In my opinion, the Supreme Court chastised the EPA for using unreasonably sharp, harsh tactics in their enforcement efforts.  But the EPA must have read a different opinion than I did, because they are still continuing those harsh tactics, so here’s the second, more recent story.

In 2011, Andy Johnson pulled a permit from the Wyoming State Engineer’s Office to construct a stock tank on his property in Southwestern Wyoming, by damming up Six Mile Creek as it ran across his property.  At this point Six Mile Creek flowed two feet wide and about six inches deep.  Not. Navigable.  He dug a hole, lined the stock tank with large rocks and put a drain at the bottom.  While he built the stock tank, the water flowed through the drain.  When he finished, he closed the valve on the drain.  Now water flows out of the stock tank like a spillway.

In October of 2012, the US Army Corps of Engineers inspected the stock tank and concluded it was a pond instead of a stock tank, and concluded that this portion of Six Mile Creek contained “waters of the US”…into which Andy discharged fill material without a permit.  Six Mile Creek is a tributary of Blacks Fork Creek, which is a tributary of Green River, which is clearly navigable.  But water has to successfully travel almost 100 miles to get from six-inch-deep Six Mile Creek to the navigable Green River.  Undaunted, the EPA sent Andy one of their infamous compliance orders and assessments of $75,000 per day until Andy deconstructs his properly-permitted-by-Wyoming stock tank/pond.

The “which is it, a pond or a stock tank” is critical to the EPA’s success here, because stock tanks are generally exempt from the EPA’s Clean Water Act jurisdiction.  Ponds aren’t.

Now, if these true stories stand as examples of how EPA intends to operate after completing its current “waters of the US” rulemaking which will greatly expand the lands subject to its jurisdiction under the Clean Water Act, and I believe they do, these stories should give pause to each and every landowner throughout the country.

A possible sanction of $37,500 per day, for every day the condition of the land is in violation, in and of itself fiercely preaches against adopting a rule that is the least bit vague or ambiguous.  It argues against adopting a rule that is illogical to the reasonable person.  When that possible sanction doubles to $75,000 per day, and when that possible sanction also includes the cost of restoring the land to its pre-disturbance condition before being able to even attempt to obtain a permit, well, let me state it positively.  Such a rule would be generally considered insane by reasonable persons.  No reasonable person would willingly submit themselves to such a rule.

We can do better than this new EPA draft rule proposal.  I believe it is possible to design and write a rule that has a much better probability of bringing about on Earth the Heavenly goals listed in the Clean Water Act.  You probably have some good ideas too.  But this rule can’t improve without concerned citizens and businesses getting involved in the rulemaking process.  Please take the time and energy to write and submit written comments.  For information about filing comments, please contact me at mark@texasenvironmentallaw.com.