United States v. Cundiff

*204 OPINION

After eight years of failed negotiations and ignored orders, the United States sued George Rudy Cundiff (who goes by Rudy) and his son, Christopher Seth Cundiff (who goes by Seth), seeking injunctive relief and civil penalties against them for discharging “pollutants” into “waters of the United States” without a permit in violation of the Clean Water Act. 33 U.S.C. § 1362. The district court granted summary judgment for the government, imposed injunctive relief in the form of a restoration plan for the Cundiffs’ wetlands, and imposed a civil penalty of $225,000. All but $25,000 of that penalty was suspended, however, provided that the Cun-diffs implemented the restoration plan. The district court also dismissed the Cun-diffs’ array of statutory, common law, and constitutional counterclaims. While the original appeal in this case was pending, the Supreme Court issued its splintered ruling in Rapanos v. United, States, 547 U.S. 715, 126 S.Ct. 2208, 165 L.Ed.2d 159 (2006), which defined the Act’s jurisdiction over “waters of the United States.” In light of Rapanos, we returned the case to the district court to reconsider whether jurisdiction was proper over the Cundiffs’ wetlands. The district court determined that it was because the Cundiffs’ wetlands were in fact waters of the United States, and the Cundiffs appealed. We affirm the district court on all grounds.

I.

Defendants Rudy and Seth Cundiff own two adjacent tracts of land in Muhlenberg County, Kentucky. Their properties together sit next to Pond and Caney Creeks, which are tributaries of the Green River. The Green River, in turn, flows into the Ohio River. In 1990, Rudy Cundiff bought the southern tract, which contains roughly eighty — five acres of wetlands and an upland area where his house sits. When Rudy bought it, portions of the wetlands contained exceptionally acidic orangish to reddish colored water that had drained out of an abandoned coal mine located on a neighbor’s nearby property. As a result, locals referred to the Cundiffs’ property as a putrid eyesore, and this stagnant, discolored water caused the wetlands to become a festering mosquito haven — though the Cundiffs knew all this when they bought it. 1 Shortly after his purchase, Cundiff began excavating drainage ditches and clearing trees to make the wetlands suitable for farming.

In October 1991, federal officials from the Army Corps of Engineers and state officials from the Kentucky Division of Water observed ditches, artificially filled wetlands, and mechanically cleared land on the wetlands. The Corps suspected possible Clean Water Act violations. Rudy had failed to obtain a section 404 permit as required for such dredging and filling activities, and further inspection revealed that Cundiff had excavated ditches in the wetlands and placed dredged material into *205 them as filler (known as “sidecasting”). Consequently, the Corps sent him a cease- and-desist letter “specifically prohibiting any further activity involving the placement of excavated or fill material into these jurisdictional wetlands” without a federal permit.

Federal and state officials then began meeting with Cundiff in 1992, though they reached no agreement. Instead, he insisted on converting the wetlands into farmland and continued to drain and clear the property. The Corps referred the matter to the Environmental Protection Agency. Over the next several years, Cundiff continued his draining and ditch digging activities, simply ignoring whatever government directives came his way. In 1997 he planted wheat on the southern tract, and government officials observed downed trees in that area. The EPA issued an Order of Compliance informing him that he had violated the Clean Water Act by depositing fill material into waters of the United States without authorization, and it directed him to “immediately cease participating in or causing any additional discharges” of pollutants.

In 1998 Rudy’s son, Seth, purchased a tract of land located north of Rudy’s which contains roughly 103 acres of wetlands. (Seth leases this property back to Rudy for the exact amount of the mortgage payment.) Rudy quickly began excavating and clearing that property as well, activity of which Seth was aware. In October 1998, officials from the EPA informed Rudy Cundiff that he needed a permit for this work too. Rudy — somewhat surprisingly — said that, though he knew he needed a permit, he thought the Corps would never grant him one so he planned on digging his ditches anyway. He eventually completed a two-hundred foot ditch through the wetlands that extended all the way to Caney Creek, and the dredged material was “sidecast” into the wetlands to dry them out to make them arable. In 1999, Kentucky officials told Cundiff that he was destroying wetlands without a permit in violation of state law (he ignored this too), and the EPA issued additional Orders of Compliance to both Rudy and Seth Cundiff requiring them to cease their excavation activities and to restore the unauthorized ditches by refilling them. The Cundiffs responded to these orders as they had to the others.

The United States finally sued both Rudy and Seth Cundiff, alleging that they violated Section 301(a) of the Clean Water Act for discharging pollutants into waters of the United States without a permit. 33 U.S.C. § 1311(a). The district court granted the United States’s motion for summary judgment, thus finding the Cun-diffs liable, and, after a bench trial, permanently enjoined them from discharging dredged or fill material or any other pollutants into waters of the United States (which it concluded that the Cundiffs’ wetlands were) and imposed a civil penalty of $225,000 but suspended $200,000 of that pending the Cundiffs’ adequate implementation of the restoration plan. The defendants appealed, and while that appeal was pending, the Supreme Court decided Rapanos v. United States, 547 U.S. 715, 126 S.Ct. 2208, 165 L.Ed.2d 159 (2006), which addressed the scope of the term “waters of the United States” in the Clean Water Act. The parties jointly moved for a limited remand from this Court so the district court could reconsider whether jurisdiction over the wetlands was proper, and this Court remanded the case on that question. The district court concluded that the Cun-diffs’ wetlands were “waters of the United States,” and the Cundiffs now appeal the district court’s: (1) grant of summary judgment in the government’s favor; (2) imposition of a civil penalty and injunctive *206 relief; and (3) the dismissal of their counterclaims.

II.

We review the district court’s legal conclusions de novo, Lindstrom v. A-C Prod. Liab. Trust, 424 F.3d 488, 492 (6th Cir.2005), and its factual findings for clear error. Id. The imposition of a monetary penalty and injunctive relief is reviewed for abuse of discretion. United States v. Midwest Suspension & Brake, 49 F.3d 1197, 1205 (6th Cir.1995); United States v. Norris, 937 F.2d 286, 288 (6th Cir.1991). We review the dismissal of the Cundiffs’ counterclaims de novo. Blakely v. United States, 276 F.3d 853, 863 (6th Cir.2002).

III.

Congress 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). Section 301(a) of the Act prohibits “the discharge of any pollutant by any person” except in compliance with the Act. 33 U.S.C. § 1311(a). “[Discharge of any pollutant” is broadly defined to mean “any addition of any pollutant to navigable waters from any point source.” 33 U.S.C. § 1362(12)(A). In turn, “pollutant” is defined to include not only traditional contaminants, but also solids such as “dredged spoil, ... rock, sand [and] cellar dirt.” 33 U.S.C. § 1362(6). The Act defines “navigable waters” to mean “the waters of the United States, including the territorial seas.” 33 U.S.C. § 1362(7).

The Act also sets up two permit schemes. Section 404(a) authorizes the Secretary of the Army (through the United States Army Corps of Engineers), or a state with an approved program, to issue permits “for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” 33 U.S.C. § 1344(a). Section 402 authorizes the Environmental Protection Agency (or a state with an approved program) to issue a National Pollutant Discharge Elimination System (NPDES) permit for the discharge of pollutants other than dredged or fill material. 33 U.S.C. § 1342. The Corps and the EPA share responsibility for implementing and enforcing Section 404. See, e.g„ 33 U.S.C. § 1344(b)-(c).

Although at one time the term “navigable waters” included only waters that were navigable in fact, The Daniel Ball, 77 U.S. (10 Wall.) 557, 563, 19 L.Ed. 999 (1870), “navigable waters” is a defined term in the Act that expressly includes all “waters of the United States.” 33 U.S.C. § 1362(7). The Supreme Court has repeatedly recognized that, with this definition, Congress “evidently intended to repudiate limits that had been placed on federal regulation by earlier water pollution control statutes and to exercise its powers under the Commerce Clause to regulate at least some waters that would not be deemed ‘navigable’ under the classical understanding of that term.” United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 133, 106 S.Ct. 455, 88 L.Ed.2d 419 (1985). As a result, the Corps and EPA have put out substantively equivalent regulatory definitions of “waters of the United States,” compare 33 C.F.R. § 328.3(a), with 40 C.F.R. § 230.3(s), that define it to encompass not only traditional navigable waters of the kind susceptible to use in interstate commerce, but also tributaries of traditional navigable waters and wetlands adjacent to covered waters. See 33 C.F.R. § 328.3(a)(1), 328(3)(a)(5), 328(a)(7).

A. Are the Wetlands “Waters of the United States”?

1. Rapanos

Rapanos involved two consolidated cases in which the Act had been applied to actual *207 or proposed discharges of pollutants into wetlands adjacent to nonnavigable tributaries of traditional navigable waters. 547 U.S. at 729-30, 126 S.Ct. 2208. Although there was no single majority opinion, all the Justices agreed that the statutory phrase “waters of the United States” encompasses some waters not navigable in the traditional sense. See id. At 731 (Scalia, J., plurality opinion); id. at 767-68, 126 S.Ct. 2208 (Kennedy, J., concurring in the judgment); id. at 793, 126 S.Ct. 2208 (Stevens, J., dissenting). The four-Justice plurality interpreted the Act to cover “relatively permanent, standing, or continuously flowing bodies of water,” 547 U.S. at 739, 126 S.Ct. 2208, that are connected to traditional navigable waters, id. at 742, 126 S.Ct. 2208, as well as wetlands with a continuous surface connection to such water bodies. Id. at 732 n. 5, 126 S.Ct. 2208 (observing that the Act’s reference to “relatively permanent” waters “d[id] not necessarily exclude streams, rivers, or lakes that might dry up in extraordinary circumstances, such as drought,” or “seasonal rivers, which contain continuous flow during some months of the year but no flow during dry months”).

Justice Kennedy, writing only for himself, interpreted the term to cover wetlands that “possess a ‘significant nexus’ to waters that are or were navigable in fact or that could reasonably be so made.” Id. at 759, 126 S.Ct. 2208 (Kennedy, J., concurring in the judgment) (quoting Solid Waste Agency v. United States Army Corps, of Eng’rs., 531 U.S. 159, 167, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001)). He explained:

[Wjetlands possess the requisite nexus, and thus come within the statutory phrase “navigable waters,” if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as “navigable.” When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term “navigable waters.”

Id. at 780, 126 S.Ct. 2208. And Justice Kennedy, relying on Riverside Bayview, concluded that the Corps’ assertion of jurisdiction over “wetlands adjacent to navigable-in-fact waters” may be met “by showing adjacency alone.” Id. On the other hand, where the wetlands are adjacent to nonnavigable tributaries, “[ajbsent more specific regulations,” Justice Kennedy would require the government to “establish a significant nexus on a case-by-case basis.” Id. He therefore concurred in the judgment vacating the lower court’s decision and voted to remand the case for more fact-finding on whether the government could prove the existence of a significant nexus between the wetlands and nearby navigable-in-fact waters.

The dissenters, with Justice Stevens writing, would have upheld the determination that the wetlands at issue were “waters of the United States” as a reasonable agency interpretation of the Act under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). In the dissenters’ view, any “significant nexus” requirement — insofar as the Act contained one — would be “categorically satisfied as to wetlands adjacent to navigable waters or their tributaries.” Rapanos, 547 U.S. at 807-08, 126 S.Ct. 2208.

Parsing any one of Rapanos’s lengthy and technical statutory exegeses is taxing, but the real difficulty comes in determining which — if any — of the three main opinions lower courts should look to for guidance. As the Chief Justice observed: “It is unfortunate that no opinion commands a *208 majority of the Court on precisely how to read Congress’ limits on the reach of the Clean Water Act. Lower courts and regulated entities will now have to feel their way on a case-by-case basis.” Id. at 758, 126 S.Ct. 2208 (Roberts, C.J., concurring) (citing Grutter v. Bollinger, 539 U.S. 306, 325, 123 S.Ct. 2325, 156 L.Ed.2d 304 (2003), and Marks v. United States, 430 U.S. 188, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977)). The dissent, for its part, offered its view of what lower courts should do:

In these cases, however, while both the plurality and Justice Kennedy agree that there must be a remand for further proceedings, their respective opinions define different tests to be applied on remand. Given that all four Justices who have joined this opinion would uphold the Corps’ jurisdiction in both of these cases-and in all other cases in which either the plurality’s or Justice Kennedy’s test is satisfied-on remand each of the judgments should be reinstated if either of those tests is met.

Rapanos, 547 U.S. at 810, 126 S.Ct. 2208 (emphasis added). Fortunately, as the following section explains, jurisdiction is proper here under each of the primary Rapanos opinions and therefore we do not have to decide here, once and for all, which test controls in all future cases.

2. Marks-meets-Rapanos

In Marks v. United States, the Supreme Court instructed that “[w]hen a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.” 430 U.S. at 193, 97 S.Ct. 990 (quoting Gregg v. Georgia, 428 U.S. 153, 169 n. 15, 96 S.Ct. 2909, 49 L.Ed.2d 859 (1976) (opinion of Stewart, Powell, and Stevens, JJ.)). But all is not always so rosy. The Supreme Court has oft-noted Marks’ limitations, stating that it is “more easily stated than applied to the various opinions supporting the result,” Grutter, 539 U.S. at 325, 123 S.Ct. 2325 (2003), and that “[i]t does not seem useful to pursue the Marks inquiry to the utmost logical possibility when it has so obviously baffled and divided the lower courts that have considered it,” Nichols v. United States, 511 U.S. 738, 745, 114 S.Ct. 1921, 128 L.Ed.2d 745 (1994) (quotations omitted).

In its short life, Rapanos has indeed satisfied any “bafflement” requirement. The first court to decide what opinion was controlling decided to ignore all of them and instead opted for earlier circuit precedent which it felt was clearer and more readily applied. United States v. Chevron Pipe Line Co., 437 F.Supp.2d 605, 613 (N.D.Tex.2006). The Courts of Appeals have not fared much better. The Ninth Circuit has stated that Justice Kennedy’s test applies in most instances, Northern California River Watch v. City of Healdsburg, 496 F.3d 993, 1000 (9th Cir.2007), while the Eleventh Circuit has held that the Act’s coverage may be established only under his test. United States v. Robison, 505 F.3d 1208, 1219-22 (11th Cir.2007). By contrast, the First and the Seventh Circuits, though differing somewhat in their analyses, have followed Justice Stevens’ advice and held that the Act confers jurisdiction whenever either Justice Kennedy’s or the plurality’s test is met. United States v. Johnson, 467 F.3d 56, 60-66 (1st Cir.2006); United States v. Gerke Excavating, Inc., 464 F.3d 723, 725 (7th Cir.2006). This is the approach the district court here followed, largely in reliance on the First Circuit’s thoughtful reasoning.

Taken literally, Marks instructs lower courts to choose the “narrowest” concurring opinion and to ignore dissents. Marks, 430 U.S. at 193, 97 S.Ct. 990. But *209 what does “narrowest” mean? Marks considered an earlier Supreme Court obscenity decision, A Book Named “John Cleland’s Memoirs of a Woman of Pleasure” v. Attorney General of Massachusetts, 383 U.S. 413, 86 S.Ct. 975, 16 L.Ed.2d 1 (1966), where the Court split on whether a particular work was protected by the First Amendment. In Marks, the Court determined that the Memoirs plurality’s standard controlled because, while two Justices would have held that the First Amendment applies equally to all materials — whether obscene, hardcore, or Grated, id. at 433, 86 S.Ct. 975 (Douglas, J., concurring); id. at 421, 86 S.Ct. 975 (Black, J., concurring)— the plurality would have afforded protection only to non-obscene materials, id. at 419-20, 86 S.Ct. 975, and therefore that concurring opinion was doctrinally the “narrowest.”

The so-called Marks rule in fact derived from the Court’s earlier opinion in Gregg v. Georgia, 428 U.S. 153, 96 S.Ct. 2909, 49 L.Ed.2d 859 (1976). Gregg had interpreted Furman v. Georgia, 408 U.S. 238, 92 S.Ct. 2726, 33 L.Ed.2d 346 (1972), in which a majority found that Georgia’s death penalty scheme was unconstitutional. Two Justices believed that the death penalty was per se unconstitutional, while three others merely stated that it was unconstitutional as then administered in Georgia. So the Gregg Court stated that “[sjince five Justices wrote separately in support of the judgments in Furman, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.... ” 428 U.S. at 169 n. 15, 96 S.Ct. 2909.

As these cases indicate — and contrary to assertions by the Cundiffs and their ami-ci — Marks does not imply that the “narrowest” Rapanos opinion is whichever one restricts jurisdiction the most. But it also makes little sense for the “narrowest” opinion to be the one that restricts jurisdiction the least, as the government’s ami-ci allege; the ability to glean what substantive value judgments are buried within concurring, plurality, and single-Justice opinions would require something like divination to be performed accurately. Instead, “narrowest” opinion refers to the one which relies on the “least” doctrinally “far-reaching-common ground” among the Justices in the majority: it is the concurring opinion that offers the least change to the law. See Johnson v. Bd. of Regents of the Univ. Of Ga., 263 F.3d 1234, 1247 (11th Cir.2001); Johnson, 467 F.3d at 63. In both Memoirs and Furman the controlling opinion was less doctrinally sweeping. The Memoirs controlling opinion did not agree that obscenity laws per se violated the Constitution, and the Furman controlling opinion did not agree that the death penalty was per se unconstitutional.

Yet problems await. For cases like Furman and Memoirs, Marks’ application is straightforward. But when “one opinion supporting the judgment does not fit entirely within a broader circle drawn by the others, Marks is problematic.” King v. Palmer, 950 F.2d 771, 782 (D.C.Cir.1991) (en banc). Specifically, “Marks is workable — one opinion can be meaningfully regarded as ‘narrower’ than another — only when one opinion is a logical subset of other, broader opinions.” Id. at 781. Where no standard put forth in a concurring opinion is a logical subset of another concurring opinion (or opinions) that, together, would equal five votes, Marks breaks down.

Enter Rapanos. Although “in most cases in which [Justice Kennedy] concludes that there is no federal authority he will command five votes (himself plus the four Justices in the Rapanos plurality),” in other cases Justice Kennedy “would vote *210 against federal authority only to be outvoted 8-to-l (the four dissenting Justices plus the members of the Rapanos plurality) because there was a slight surface hydrological connection.” Gerke, 464 F.3d at 725. Indeed, there is quite little common ground between Justice Kennedy’s and the plurality’s conceptions of jurisdiction under the Act, and both flatly reject the other’s view. See Rapanos, 547 U.S. at 756, 126 S.Ct. 2208 (Scalia, J., plurality opinion) (“[Justice Kennedy’s] test simply rewrites the statute.”); id. at 778, 126 S.Ct. 2208 (Kennedy, J., concurring) (“[T]he plurality reads nonexistent requirements into the Act.”). 2

Thus, because Rapanos is not easily reconciled with Marks, the question becomes what to do. Fortunately, we need not reconcile Rapanos with Marks. Here, jurisdiction is proper under both Justice Kennedy’s and the plurality’s tests (and thus also the dissent’s). Recently, this Court addressed an analogous situation:

Because the Supreme Court divided 4-1-4 in [Missouri v. Seibert, 542 U.S. 600, 124 S.Ct. 2601, 159 L.Ed.2d 643 (2004) ], there has been some confusion about whether the plurality or concurring opinion controls. Most circuits have assumed that Justice Kennedy’s concurrence operates as the controlling precedent, though others have raised doubts about whether his concurrence actually represents the narrowest grounds for decision. We do not need to resolve this issue because regardless of the applicable framework Lopez’s statement must be suppressed.

United States v. Pacheco-Lopez, 531 F.3d 420, 427 n. 11 (6th Cir.2008) (citations omitted). As the next section demonstrates, jurisdiction is proper here under both Justice Kennedy’s and the plurality’s tests, so we leave ultimate resolution of the Marks-meebs-Rapanos debate to a future case that turns on which test in-fact controls. 3

3. Jurisdiction is proper under both tests

Justice Kennedy’s test. Under this test, the Clean Water Act applies to wetlands that “possess a significant nexus to waters that are or were navigable in fact or that could reasonably be so made.” Rapanos, 547 U.S. at 758, 126 S.Ct. 2208. This nexus exists “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as navigable.” Id. at 755, 126 S.Ct. 2208. By contrast, “[w]hen ... wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory terms ‘navigable waters.’ ” Id. This standard must be met on a case-by-case basis. Id.

The district court found that the Cundiffs’ wetlands have a significant nexus with the navigable-in-fact Green River, via *211 Pond and Caney Creeks, which are tributaries of that river. The court credited the government’s expert who testified that the wetlands perform significant ecological functions in relation to the- Green River and the two creeks, including: temporary and long-term water storage, filtering of the acid runoff and sediment from the nearby mine, and providing an important habitat for plants and wildlife. And the court found that the Cundiffs’ alterations — unauthorized ditch digging, the mechanical clearing of land, and the dredging of material and using it as filler — have undermined the wetlands’ ability to store water which, in turn, has affected the frequency and extent of flooding, and increased the flood peaks in the Green River. Thus, it has “impacted] navigation, crop production in bottomlands, downstream bank erosion, and sedimentation.” United States v. Cundiff, 480 F.Supp.2d 940, 945 (W.D.Ky.2007) (quoting Report of Dr. Lyndon C. Lee, J.A. 172). The dist