The Ninth Circuit, reviewing its earlier decision in Leslie Salt Co. v. United States (Leslie Salt II),followed the law of the case doctrine and held that the migratory bird rule was valid and that civil penalties are mandatory under section 309(d) of the Clean Water Act (CWA). The migratory bird rule establishes that the Commerce Clause power is broad enough to extend Army Corps of Engineers (Corps) jurisdiction to local waters that may provide habitat to migratory birds and endangered species.
The law of the case doctrine requires a panel of an appellate court to reconsider only matters not resolved in a prior appeal to another panel in the same case. After remand to the district court of the Leslie Salt II case, the Ninth Circuit found that its scope of review should be limited to the issue of what parts of Leslie Salt's property had sufficient connections to interstate commerce due to migratory bird use to be subject to Corps's jurisdiction under the CWA.
Cargill, Inc., the corporate successor to Leslie Salt, argued for a broader scope of review. It wanted the court to ignore the law of the case doctrine because, it asserted, the court failed to adequately support its decision in Leslie Salt II to uphold the migratory bird rule. To make this showing, the Ninth Circuit required Cargill to show not only that Leslie Salt II was wrong, but that it was clearly wrong. Cargill attempted to meet this burden with a three-pronged argument.
First, Cargill argued that the Corps's preamble to the 1986 regulations defining "waters of the United States"--a key element necessary for Corps jurisdictional under the CWA--was only published in the Federal Register and not subjected to notice and comment as required by the Administrative Procedure Act. The Leslie Salt IV court held that the preamble, which set out migratory bird examples, was not a substantive rule, but rather an interpretive rule of the Corps's understanding of the statutory term "waters of the United States." Because interpretive rules are not subject to notice and comment procedures, the court held that Leslie Salt II could not be deemed clearly wrong.
Second, Cargill argued that the Corps unreasonably interpreted its CWA jurisdiction to extend to habitat used by migratory birds. After finding that the legislative history of the CWA supported Corps jurisdiction over waters of the United States to the maximum extent possible under the commerce clause, and finding some support in the U.S. Supreme Court's holding in United States v. Riverside Bayview Homes, Inc. and the Seventh Circuit's holding in Hoffman Homes, Inc. v. EPA, the Leslie Salt IV court held that the Leslie Salt II court was not incorrect in concluding that the Corps's jurisdiction extended to migratory bird habitat.
Third, Cargill argued that even if the migratory bird rule was a reasonable interpretation of the CWA, it exceeded Congress's powers under the commerce clause. The Leslie Salt IV court found support in Hughes v. Oklahoma and Palila v. Hawaii Department of Land and Natural Resources for the proposition that Congress's commerce clause powers extend to the regulation of migratory birds. While the Ninth Circuit admitted that the migratory bird rule tested the limits of the commerce clause power, it held that its broad sweep precluded a holding that the Leslie Salt II court erroneously decided this matter against Cargill.
Finally, in an issue of first impression, Judge Harry Pregerson wrote a concurring opinion in which the Ninth Circuit concluded that civil penalties under section 309(d) of the CWA are mandatory. Cargill argued that the district court, in Leslie Salt III, incorrectly held that the language "shall be subject to" a civil penalty mandates that civil penalties be imposed for violations of the CWA. Based on the plain language of the statute, the Ninth Circuit agreed with the conclusion of the Fourth and Eleventh Circuits that the words "shall be subject to" means that civil penalties are mandatory. "Shall," the court found, has always been a word of command, not guidance. Moreover, the court determined that when Congress intended penalties to be discretionary, it used less definitive language such as "may assess as penalty" to indicate its intent to grant courts discretion. In his dissent, majority opinion writer Judge Diarmuid O'Scannlain argued that if Congress intended CWA penalties to be mandatory, it could have provided that a violator "shall pay" a civil penalty. Instead, it used more permissive language that two district courts and the Sixth Circuit have found grant courts discretion in assessing civil penalties. Judge O'Scannlain concluded that even if section 309(d) is ambiguous, the rule of lenity favors an interpretation least likely to unintentionally impose penalties, and therefore, even applied to civil sanctions, the rule of lenity requires civil penalties under the CWA to be discretionary.
896 F.2d 354 (9th Cir. 1990), cert. denied, 498 U.S. 1126 (1991).
33 U.S.C. § 1319 (1994).
In Leslie Salt II, the Ninth Circuit held that artificially made salt crystallization pits that were dry part of the year were not excluded from the Corps's jurisdiction.
474 U.S. 121, 131-35 (1985) (holding it was reasonable for the Corps to exercise jurisdiction over wetlands adjacent to other waters).
999 F.2d 256, 261 (7th Cir. 1993) (holding it is reasonable to interpret the CWA as allowing migratory birds to be the connection between a wetland and interstate commerce).
441 U.S. 322, 329-36 (1979) (holding that state regulations of intrastate wildlife fall within the ambit of the Dormant Commerce Clause).
471 F. Supp. 985, 995 (D. Haw. 1979), aff'd, 639 F.2d 495 (9th Cir. 1981) (holding that programs to protect and improve habitat preserve the possibility of interstate commerce in certain species and of interstate movement of people interested in studying the species).