Second Court Weighs in on Water Board Powers – This Time Expanding the Scope of Water Board Wetland Permitting Authority

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Second Court Weighs in on Water Board Powers –
This Time Expanding the Scope of Wetland Permitting Authority

Just last month, a California Court of Appeal ruled against the wetlands permitting program administered by California’s Regional Water Quality Control Boards (Regional Water Boards), effectively limiting that program to wetlands as defined under federal law, at least for a time (see our update dated December 21, 2020).  Even as the ink on that decision continues to dry, a second court has ruled on the scope of the Regional Boards’ authority.  But this time, the Court actually expanded the Regional Water Board’s permitting authority by removing procedural requirements related to the use of that authority.   As a result, public and private landowners who need to fill wetlands, ditches and drainages, and other features in connection with construction activities may now find their permit processes to be even less predictable.

In this case, the Santa Clara Valley Water District (the District) sued the San Francisco Regional Water Board over compensatory mitigation requirements the water board imposed on a flood control project proposed by the District.  Although the water board had already approved the flood control project without imposing mitigation, the board later replaced that permit (known as a Section 401 water quality certification) with a second permit (known as waste discharge requirements or WDRs) that did require the District to provide mitigation.  While the District had originally agreed that its permit would be replaced, it claimed that the Regional Water Board had waived its right to require additional mitigation when it issued the first permit.

The Court’s opinion is complicated, but it can be boiled down to the following essentials:

Waivers of Certification.  When the Regional Water Boards consider whether to certify a wetland fill permit issued by the Army Corps of Engineers, they must act in accordance with deadlines established under federal law (i.e., 60 days to one year).  If they fail to act, the requirement for certification is deemed to be waived.  According to the Court, however, in the event of waiver the Regional Water Boards may still require permits pursuant to their  independent permitting authority under California’s Porter-Cologne Water Quality Control Act (Porter-Cologne).  That is, even if a Regional Water Board has waived certification because it failed to meet federal deadlines, it can still require a permit under Porter-Cologne in the form of WDRs.  In these situations, the Regional Boards are governed by the more flexible time requirements established under California’s Permit Streamlining Act.

Waivers of certification still have meaning because a Corps permit cannot be issued or (in the case of nationwide permits) become effective until certification is issued or waived. Accordingly, even though the Regional Boards can still require WDRs under Porter-Cologne if they have waived certification, a waiver will allow a Section 404 permit to be issued (or become effective) without the Corps having to wait for the Regional Board to act. But waivers of certification do not result in a forfeiture by the Regional Water Boards of their regulatory authority.

CEQA and Responsible Agency Powers.  There has been a longstanding debate about the extent to which permitting agencies (e.g., the Regional Water Boards, California Department of Fish and Wildlife) are bound by CEQA documents approved by “lead agencies” (e.g., cities and counties or in this case the District).  Certain provisions in the CEQA Guidelines require permitting agencies to rely on EIRs prepared by lead agencies, but the extent to which the permitting agencies are bound by the conclusions in those CEQA documents has been uncertain.  This uncertainty can be problematic where a permitting agency fails to participate in a years-long CEQA process and then imposes requirements that are inconsistent with those found in an EIR or negative declaration approved by a city or county.

Here, the Court held that the CEQA Guidelines may prevent a “responsible agency” from requiring additional environmental review after a lead agency has completed the CEQA process, but only if the responsible agency “does not have its own independent authority to enforce or administer an environmental law.” That is, where a permitting agency such as a Regional Water Board has independent permitting authority, the lead agency’s CEQA document does not constrain the use of the permitting agency’s authority to impose additional mitigation, as long as that mitigation is within the powers granted to the permitting agency by other environmental laws. Accordingly, even where a lead agency has completed a protracted CEQA process, and the permitting agency failed to raise any objection to the lead agency’s document, that permitting agency is still free to impose whatever requirements are allowed under its independent authority. As stated by the Court, citing the language of CEQA itself, “[n]o provision of [CEQA] is a limitation or restriction on the power or authority of any public agency in the enforcement or administration of any provision of law which it is specifically permitted or required to enforce or administer … .”

Definition of Waste under Porter-Cologne.  One open question under Porter-Cologne is whether it requires permits for the discharge of material that in most circumstances would not be considered a pollutant.  For example, can the Regional Boards classify as “waste” the soil or other fill material that may be moved from place to place on a development site during construction?  The Regional Boards have asserted this authority for years, relying primarily on a 1989 court decision known as Lake Madrone (involving sediment released from a dam during operation).  The regulated community has been pushing back recently, arguing (in the current case) that material is “waste” only if it is “useless, left over or discarded.”

In last month’s decision involving California’s wetland permitting program, the Court held that the definition of waste must be tested on a case-by-case basis. In yesterday’s decision, the Court also side-stepped the issue. In particular, the Court held that, even if the definition of waste were limited to useless, left over or discarded material, the District’s activities resulted in the discharge of that type of regulated material. But the Court did not rule out that even clean fill material could be regulated as waste under Porter-Cologne.

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