On February 18, 2021, the First Appellate District issued an opinion in Sweeney et al. v. California Regional Water Quality Control Bd., San Francisco Bay Region et al. (Case No. A153583) (“Sweeney”). The opinion is much anticipated given its relevance to the continued validity of the State Water Resources Control Board’s recently adopted State Procedures for Discharges of Dredged and Fill Material (“Procedures”). The Appellate Court reversed the lower court in the entirety, substantially deferring to the actions and prosecutorial discretion of the State Water Resources Control Board (“State Water Board”) and San Francisco Bay Regional Water Quality Control Board (“Regional Water Board”, collectively, “Water Boards”) based on application of a revised standard of review. Importantly, according to the court, the appropriate interpretation of the Porter-Cologne Water Quality Control Act’s (“Porter-Cologne Act”) definition of waste provides the Water Boards adequate authority to regulate discharges of dredge and fill material, bolstering the Water Boards’ efforts to continue with implementation and enforcement of the Procedures, which were recently called into question and narrowed by the trial court order issued in San Joaquin Tributaries Authority v. State Water Resources Control Bd. (Case No. 34-2019-80003133) (“SJTA”). A full analysis of that order is available here.
In 2011, John D. Sweeney purchased a 39-acre tract of land in Suisun Marsh, which included Point Buckler Island (“Site”). The island was previously operated as a wetland for duck hunting due to the 1985 construction of a levee that partially circumscribed the island. However, at the time of Sweeney’s purchase, the levee had been significantly degraded and breached in multiple locations. As part of the Site development, Sweeney sought to restore the levee such that the Site could once again be used, in part, as a duck hunting club, but allegedly failed to seek necessary permitting from various agencies. In 2014, Sweeney transferred title of the Site to Point Buckler Club, LLC (hereinafter Sweeney and Point Buckler Club, LLC are collectively referred to as “Respondents”).
Following the repair and expansion of the Site’s levees, the Bay Conservation and Development Commission (“BCDC”), Regional Water Board, and U.S. Army Corps of Engineers (“Army Corps”) commenced separate enforcement to address the alleged violations. Regional Water Board enforcement actions consisted of the issuance of a cleanup and abatement order (“CAO”) directing Respondents to implement corrective actions that would address alleged impacts to tidal marshlands, fish migration, and aquatic habitat caused by the unpermitted discharges of dredge and fill material, and later an administrative civil liability complaint (“ACL”) that sought to impose $4.6 million in fines. According to the Regional Water Board, the discharges required multiple permits that Respondents failed to obtain, violated several provisions of the Clean Water Act, violated a Water Quality Control Plan for the San Francisco County Basin (“Basin Plan”) prohibition on discharges of harmful quantities of dredged and fill material, and degraded the beneficial uses of the waters in and around the Site. Following an administrative hearing, Respondents were assessed a fine of $2.8 million in penalties for the discharges of dredged and fill material.
Respondents challenged the Regional Water Board ACL, CAO, and the imposed fines, among other agency enforcement actions, in a writ proceeding brought in Solano County Superior Court (Case No. FCS048861, decided December 26, 2017.). The Solano Superior Court set aside both the CAO and ACL, agreeing with Respondents that the Regional Water Board had exceeded its authority. Additionally, in analyzing whether the dredged material used for levee repair was waste, the trial court explained that a “waste” is something discarded as worthless or useless, and determined that “the dirt used for the levee work was a valuable binding material, not something discarded as worthless or useless.” Consequently, according to the trial court, the dredged material discharged did not qualify as waste. However, the Appellate Court found that the lower court applied the wrong standard of review when analyzing the issues, and made multiple legal and factual errors, overturning the lower court order in its entirety, including its determination regarding the scope of the Porter-Cologne Act definition of waste.
Analysis – Porter-Cologne Act
The most notable aspect of the Sweeney decision is the Court’s analysis of whether the Porter-Cologne Act provides the Water Boards with adequate authority to regulate discharges of dredged and fill material as “waste.” Water Code section 13050(d) defines waste as “includ[ing] sewage and any and all other waste substances, liquid, solid, gaseous, or radioactive, associated with human habitation, or of human or animal origin, or from any producing, manufacturing, or processing operation, including waste placed within containers of whatever nature prior to, and for purposes of, disposal.”
To evaluate the scope of materials encompassed by the Water Code definition of “waste,” the Court applied the decision in Lake Madrone Water Dist. v. State Water Resources Control Bd. (1989) 209 Cal.App.3d 163 (Lake Madrone), which found that sediment accumulated as a result of dam operations, which later passed through the dam’s gates, constituted waste. The Lake Madrone court opined that the accumulated sediment was associated with human habitation and therefore fell within the Porter-Cologne Act definition of waste. Similarly, here, the Sweeney Court found that placement of dredge and fill to repair a levee that facilitates recreational opportunities is associated with human habitation, and therefore is considered “waste” pursuant to the Porter-Cologne Act. The Court also opined that “Porter-Cologne does not require ‘waste’ to be sewage or some sort of worthless byproduct. Its characterization did not turn on the purported value of the discharged material[,] but rather the harm it caused the environment.” This broad language in the Court’s dicta will no doubt have repercussions for the regulated community by establishing that an analysis of a discharge’s harm to the environment rather than application of the strict language of Water Code section 13050 is appropriate when evaluating what comprises waste for purposes of the Porter-Cologne Act.
Bay Conservation and Development Commission Enforcement
In an unpublished companion opinion, the First Appellate District addressed the BCDC enforcement action, upholding the civil penalty imposed for violations of the McAteer-Petris Act and the Suisun Marsh Preservation Act and reversing additional aspects of the trial court order. BCDC imposed a penalty of $772,000 for numerous violations including improper placement of fill and development without necessary permits. The trial court found that the Respondents were exempt from the requirement to obtain a marsh development permit under the “repair exception” provided in Public Resources Code section 29508. However, the Appellate Court disagreed, finding that the repair exception did not apply because the Respondents’ work went well beyond levee repair, exceeding the exception’s explicit language.
The trial court also found that the penalty amount exceeded the limits imposed by the McAteer-Petris Act. Disagreeing, the Appellate Court held that BCDC did not abuse its discretion because the penalty was supported by its findings, and the number of separately identified violations prevented the penalty from exceeding the statutory maximum of $30,000 per violation. Based on these (and other) holdings, the Appellate Court vacated the writ of mandate and remanded the matter to the trial court with directions to uphold the BCDC Order.
Interestingly, the Sweeney opinion’s evaluation of the Porter-Cologne Act’s waste definition is consistent with the SJTA trial court order regarding the Procedures. In SJTA, the court found that the Porter-Cologne Act’s definition of “waste” extended to at least one category of dredged and fill material – that which is associated with “human habitation.” In Sweeney, the Appellate Court determined that because the dredged material was placed to facilitate recreational opportunities, such as kiteboarding and duck hunting, the discharge was associated with human habitation, and was therefore subject to regulation under the Porter-Cologne Act. Both holdings, as they relate to the Porter-Cologne Act definition of “waste,” hinge on the relationship between certain discharges of dredged and fill material and human habitation.
The Sweeney opinion is dense and addresses a number of issues not addressed in this alert in the interest of brevity, pertinent to the Water Boards’ enforcement authority, the imposition of reasonable fines, and the appropriate conduct and scope of the ability to pay analysis. Thus, the regulated community may find the opinion instructive on a number of prosecutorial issues. Moreover, in a separate enforcement action, the Army Corps imposed fines in addition to the $2.8 million Regional Board fine, and $772,000 BCDC fine. Consequently, Sweeney provides an important reminder that where projects involve multiple federal and state agencies with overlapping jurisdictions and independent authority, fines can quickly increase in severity if necessary approvals are not acquired.