Federal Agencies Release Final "Waters of the United States" Rulemaking, Sending Ripples Through the Regulated Community

After receiving over 1 million public comments on their proposed rule, the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers (“Army Corps”) (collectively the “agencies”) issued a final rule re-defining “waters of the United States” under the Clean Water Act (“CWA”), on May 27, 2015.  The new definition will be used to determine whether federal permits are needed for filling or discharging pollution to wetlands and other water bodies throughout the Country.  The final rule expands federal control over several types of water bodies and provides some specific criteria that may make it easier for the agencies to administer their CWA programs.

The final rule now classifies eight categories of waters (compared to the proposed rule, which only had seven categories) that may be federally regulated: the first six are considered jurisdictional-by-rule, while the last two categories will require a case-specific “significant nexus” determination before these types of waters fall under the agencies’ jurisdiction.  The jurisdictional-by-rule waters include: traditional navigable waters; interstate waters; or territorial seas (referred to here as a “Big Three” water); impoundment of jurisdictional waters; tributaries; and adjacent waters.  The final rule also contains an updated list of “excluded” waters, including new types of excluded “ditches,” as well as new definitions for terms such as: tributary, adjacent, and significant nexus.  In addition to releasing the final rule and its preamble, the agencies also released an economic analysis and lengthy technical support document for the final rule. 

Click here to read the full article. 

Update on The 2015 Legislative Session

The Washington State Legislature started their second special session on May 29, after lawmakers failed to reach agreement on the state’s $38 billion biennial budget.  As of publication, budget negotiators had agreed on the size of the overall budget and were having daily meetings in the Governor’s office, but had not reached a final deal.  If the legislature can’t agree on a budget by June 30, the end of the fiscal year, the state government faces a partial shutdown.  The “upside” is that thanks to similar brinksmanship in 2013, agencies are better prepared and have already submitted updated contingency plans to the governor’s office.

Slim majorities in both chambers (Democrats in the House, Republicans in the Senate) and a hefty legislative agenda (biennial budget, Supreme Court K-12 mandate, transportation, and pressing mental health and environmental concerns) meant that legislators did not take on many extra initiatives.  While state lawmakers look for agreement on the budget, we take a brief look at what did pass this session and will provide relevant updates in future issues of Northwest Land Matters.  

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IN BRIEF

New HPA Rules in Effect July 1

Anyone working in or near any water in Washington State should carefully review the New Rules for Hydraulic Project Approvals (HPA) issued by the Washington Department of Fish & Wildlife (DFW), which affect construction of docks, boat lifts, water diversions and intakes, road crossings, marine terminals, utilities crossings, and outfalls and those involved in mineral prospecting, dredging, beaver dam management, and stormwater discharges.  Among the changes:

• Requires HPA for work in wetlands landward of the Ordinary High Water Mark if the wetlands connect to the water body by surface water. 
• A new concept of “riparian zones” to include upland components in an HPA for work adjacent to streams, rivers, ponds, lakes, and wetlands whose soils and vegetation are influenced by ponded or channelized water. 
• A new mitigation section incorporating traditional mitigation sequencing but allowing DFW to require compensatory mitigation (including mitigation banks and in-lieu fee programs) if other measures insufficiently avoid, reduce, or rectify impacts. 
• Two new, simplified permitting processes, “general” and “model” HPAs. DFW issues general HPAs primarily to local and state governments to perform the same work in multiple water bodies across a large geographic area.  It may issue model HPAs for qualifying individual, simple, low risk projects that can comply with published fish protection criteria.

Justices SLAPP Back

Developers frustrated by opponents’ tactics to delay or stop projects have occasionally sued their opponents.  Such lawsuits have been labeled Strategic Lawsuits Against Public Participation (SLAPP) because opponents claim these lawsuits violate their constitutional rights to participate in the public process.  RCW 4.24.525, Washington’s Anti-SLAPP statute, provided relief to those claiming the right to participate in matters of public concern by providing an expedited process for trial judges to dismiss claims brought against such opponents and to award significant penalties and attorney’s fees. 

In Davis v. Cox, the Washington Supreme Court unanimously declared Washington’s Anti-SLAPP statute unconstitutional because it deprived those filing claims of their right to a jury trial.  The Court recognized that the Anti-SLAPP statute intended to strike a balance between the rights of persons to file lawsuits and to trial by jury, and the rights of persons to participate in matters of public concern, but held the statute unconstitutional because it required trial judges to invade the jury’s province to resolve disputed facts and find claims frivolous, subjecting plaintiffs to statutory penalties without a trial. The Court did not address the remaining federal claims a plaintiff can bring for violation of an opponent’s valid first amendment rights of free speech and the right to petition the government for redress of grievances. 

Junior Lienholder Out of Luck

In the recent Merry v. Northwest Trustee Services, Inc. And Nationstar Mortgage, LLC  decision,  Division III of the Washington Court of Appeals rejected an attempt by a junior lienholder to establish the priority of his deed of trust after a trustee's sale was completed on behalf of the senior lienholder.  The junior lienholder pointed to alleged violations of the Washington Deed of Trust Act related to the senior lienholder's participation in the MERS system - issues raised by the 2012 Bain case.  The court held that the junior lienholder waived his right to challenge the sale because he did not try to enjoin the sale before it occurred.  The decision recognized that courts can, based on the particular circumstances of the case, reject the waiver defense and set aside a trustee's sale for equitable reasons.  But here, the court found that the claimed violations of the deed of trust statute were "technical, formal, likely correctable and non-prejudicial", and that it was not inequitable to reject the junior lienholder's challenge on waiver grounds.  Foreclosing lenders can take some comfort from the fact that, for courts that follow this decision, technical violations of the deed of trust act will not necessarily provide grounds for setting aside a trustee's sale, but should recognize that with different facts a court might uphold a post-sale challenge.  Debtors and junior lien holders should realize that they are at risk of losing legitimate claims if they try to invalidate a non-judicial foreclosure sale after it is conducted, rather than trying to enjoin the sale in advance. 

Be Careful When Drafting Homeowner's Use Restrictions  

In the recent unpublished White v. Lakeland case, the Washington Court of Appeals decided that a restriction in the declaration of a master community on leasing "Single-Family Homes" did not prohibit a lease of a condominium unit within one of the neighborhoods in the master community.  The Court looked to the language of the declaration, noting, among other things, separate definitions of "home" and "condominium".  The homeowner's association seeking to uphold the leasing restriction also pointed to unrecorded community rules and regulations that purported to bar all owners from leasing for the first year of ownership.  The court held that unrecorded rules or bylaws are ineffective as a use restriction where the recorded declaration permits the use in question.  The case highlights the need for careful drafting of use restrictions in homeowner's declarations, and the need to record condominium use restrictions.

Commerce Seeks Comments on Rules for Voluntary Stewardship Program and Voluntary Reversion

The Department of Commerce has prepared draft rules as part of the Voluntary Stewardship Program, an alternative means for counties to protect critical areas on lands used for agricultural activities.  The comment period ends July 8, 2015.  The Department also prepared draft rules to allow smaller, slow-growth counties the option to revert to partial planning status under the GMA.  The comment period for the draft rule ends July 23, 2015. 

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