In February of 2011, the U.S. District Court for the Southern District of Florida denied the U.S. Army Corps of Engineers ("Corps") motion to alter or amend the Court's September 2010 decision in the case, New Hope Power Company and Okeelanta Corporation v. U.S. Army Corps of Engineers and Stockton, 2010 WL 3834991 (S.D. Fla. September 29, 2010) ("New Hope"). In this case, the court entered an order prohibiting the enforcement of certain Corps guidance documents ("Stockton Rules"). At issue was whether the Stockton Rules improperly modified the Corps' interpretation of a wetlands regulation which provided that waters of the United States do not include prior converted croplands (see 33 C.F.R. §328(a)(8)).
The filling of wetlands is regulated under the Clean Water Act ("CWA"), which prohibits the discharge of materials into "waters of the United States" unless authorized by a permit issued under CWA Section 404. In 1993, the Corps adopted a rule establishing that converted croplands, defined as agricultural lands that were converted from wetlands prior to 1985, were excluded from the definition of "the waters of the United States." As a result, croplands were not subject to regulation under CWA Section 404. The Corps did not consider such property as wetlands because the water regime in the soils had been altered and, therefore, was considered to be of low ecological value.
In January 2009, however, the Corps' Jacksonville Field Office prepared an Issue Paper announcing that prior converted cropland that is shifted to non-agricultural use could become subject to regulation by the Corps. Subsequently, in an affirming memorandum, the Corps adopted the Issue Paper as being an accurate reflection of the Corps' national position. The Corps proceeded to implement and enforce this new rule shift nationwide and issued additional memoranda supporting the policy shift. These guidance documents became known as the Stockton Rules.
One of the plaintiffs in the New Hope case, the New Hope Power Company, operated a renewable energy facility on a property that was previously used to farm sugarcane. In 1993, the Corps indicated that the property was a prior converted wetland and, therefore, New Hope was not required to obtain a CWA permit for its operation on the property. In September of 2009, the Corps informed New Hope that construction of a planned ash monofill would constitute a violation of the CWA and subject it to possible enforcement action (New Hope at 6).
The New Hope Power Company argued that the Corps' rule changes regarding prior converted croplands were improper because the Corps did not provide a notice-and-comment period before enforcement (New Hope at 13). In a victory for New Hope, the court provided that "the Stockton Rules broadly extended the Corps' jurisdiction and sharply narrowed the number of exempt prior converted croplands" (New Hope at 15). The court further held that the Stockton Rules were procedurally improper because the Corps did not follow the required notice-and-comment procedures for new rules, as set forth by the Administrative Procedure Act (New Hope at 18). As a result, the court provided that the Stockton Rules must be set aside and prohibited the Corps from enforcing the rule without engaging in appropriate notice-and-comment procedures (Id).