On March 10, 2015, the United States Court of Appeals for the Fourth Circuit held that the U.S. Corps of Engineers (Corps) had lawfully denied a permit to an applicant seeking to fill 4.8 acres of wetlands in order to build ten homes in Chesapeake, Virginia. Precon Development Corporation, Inc. v. U.S. Army Corps of Engineers, No. 13-2499, unpublished op. (4th Cir. Mar. 10, 2015). The Corps found that it had jurisdiction over the wetlands pursuant to the federal Clean Water Act.

Under section 404 of the Clean Water Act, it is illegal to discharge dredged or fill material into "waters of the United States" without a permit issued by the Corps. The U.S. Supreme Court has held that "waters of the United States" include wetlands that are adjacent to tributaries of a traditional navigable water, but only if the Corps makes a case-specific showing that a "significant nexus" exists between the wetlands and the traditional navigable water. Rapanos v. United States, 547 U.S. 715, 779 (2006). A "significant nexus" exists when the wetlands, either alone or in combination with similarly situated lands in the region, "significantly affect the chemical, physical, and biological integrity of a traditional navigable water."

The traditional navigable water at issue in the case was the Northwest River. The 4.8 acres of wetlands that the developer sought to fill lie adjacent to a man-made drainage ditch. That man-made drainage ditch drains into another ditch, which then joins another tributary to form a channel that flows into the Northwest River. The total distance from the wetlands and the Northwest River is approximately seven miles.

The Corps originally found that it had jurisdiction over the wetlands due to the nexus between them and the Northwest River, but the Fourth Circuit remanded the Corps' decision because  the administrative record lacked sufficient evidence to establish whether that nexus was significant. The second time around, the Corps provided two additional pieces of evidence that were crucial to the Court: (1) measurements of tributary flow, including photographs documenting Corps site visits and showing flow in the ditches; and (2) studies that conclusively established that the Northwest River suffers from low dissolved oxygen. According to the Corps' reports, dissolved oxygen is one of the most important measures of water quality. An overabundance of nutrients, primarily phosphorous and nitrogen, can cause low dissolved oxygen. Because the wetlands in question trap nitrogen, the Corps found that filling in the wetlands would exacerbate the Northwest River's dissolved oxygen deficiency by adding nitrogen to the river.

The Corps also provided evidence that the Northwest River had flooded twice in the past fifteen years in a subdivision across from the proposed development and that fish in the Northwest River benefit from carbon sequestration that occurs in the wetlands. The Court found that, in light of this new evidence, a significant nexus exists between the wetlands and the Northwest River, and the Corps' finding of jurisdiction over the wetlands was not arbitrary, capricious, or an abuse of discretion, the standard for overturning an agency's finding under the federal Administrative Procedure Act.

The decision ends a thirteen-year battle between the Corps and the developer, who is ultimately seeking to build a shopping center, an industrial complex, and residential homes in the area. The extent to which the case will set a precedent for future wetlands development is unclear, however, because the opinion is unpublished, and unpublished opinions are not binding precedent in the Fourth Circuit, and because the Corps and the U.S. Environmental Protection Agency are expected to issue a final rule this year that redefines the extent of the agencies' jurisdiction under the Clean Water Act. If the rule is adopted as it is currently proposed, it will affirmatively define as waters of the United States all wetlands adjacent to navigable waters or within the same watershed or floodplain as navigable waters.  As a result, the rule would likely make it unnecessary for the Corps to develop the sort of evidence required by the court in this case in order to establish a significant nexus to support its assertion of jurisdiction.