A federal appeals court in September overturned a lower court ruling that would have significantly limited state and federal ability to protect wetlands from development.

A three-judge panel of the Fourth U.S. Circuit Court of Appeals unanimously reversed a lower court ruling that said the Army Corps of Engineers and the Virginia State Water Control Board did not have the power to stop developers from draining their land in Newport News.

Lawyers for the developers, Newdunn Associates, had argued that the federal government did not have jurisdiction over the 38 acres of wetlands because they were only connected to a stream through a manmade ditch, and that the state’s regulatory authority was linked to the federal wetland program.

The appeals court disagreed on both counts, saying that only a “perverse” reading of the state law could conclude that its program was inextricably linked to the federal program. It also called arguments that the Corps lacked jurisdiction “illogical” and would cause goals of the Clean Water Act to be “subverted.”

The case had been a cloud over Virginia’s fledgling wetlands regulatory program, which was created in 2000 to help preserve areas left unprotected by loopholes in federal regulations.

“This is great news for Virginia’s environment,” Attorney General Jerry Kilgore said in a statement. “It firmly establishes that we may craft our own regulations to protect our own natural resources from destruction, especially where they are not covered by federal law.”

If the state program was successfully curtailed, some environmentalists and state wetland managers feared it would have led to challenges to wetland programs in other states.

“This reinforces the conclusion that state wetland programs are not dependent upon the federal Clean Water Act; they can have a broader scope,” said Roy Hoagland, an attorney and director of the Chesapeake Bay Foundation’s Virginia Office. “States will be much more likely, more empowered, and more confident, in their ability to operate statewide nontidal wetlands programs.”

The court’s decision may also add pressure on the Bush administration to drop from consideration any plans to reduce federal protection for small streams and wetlands.

In January, the Corps and the EPA announced an “advanced notice of proposed rulemaking” to clarify the extent of federal authority over wetlands and other small waterways because of a January 2001 U.S. Supreme Court ruling that raised questions about the federal government’s ability to regulate some isolated wetlands.

In their case, lawyers for Newdunn cited that ruling to argue that the Corps could not regulate wetlands on the Newdunn property which were connected to a navigable waterway only through a manmade ditch.

But the appeals court rejected that interpretation of the Supreme Court ruling—a decision in line with a spate of other recent court rulings that have reaffirmed an expansive federal role in regulating rivers, streams and wetlands throughout a tributary system.

“It’s building a case against that whole advanced notice of proposed rulemaking, and the broad interpretation of the Supreme Court decision,” said Ann Jennings, a CBF wetlands scientist.

The opinion of the Fourth Circuit is particularly significant because it has a reputation for narrow interpretations on environmental issues.

The case involved a 43-acre tract in Newport News, of which 38 acres were wetlands, that was purchased by Newdunn Associates in 1978. The wetlands were historically linked by a stream to a navigable waterway, Stony Run, but that connection was disturbed by the construction of Interstate 64. Today, the wetlands are connected to Stony Run through the intermittent flow of surface water along 2.4 miles of natural streams and manmade ditches.

In 2001, Newdunn and other builders began ditching and draining the wetlands without a permit from the Corps or the state, arguing that neither had the authority to halt the project.

The state took the builders to court, but last year a federal district court judge ruled in favor of the developers, saying the Corps lacked jurisdiction under the Clean Water Act to regulate wetlands on the Newdunn property, and further ruling that the state law was “coextensive with federal law” and could not regulate additional areas.

Attorneys for Newdunn had argued that the state law was narrowly written to close a loophole in the federal program which allowed sites to be ditched and drained—as long as they were not filled—without federal oversight. That loophole led to the loss of more than 10,000 acres of wetlands in Virginia in the late 1990s, and ultimately resulted in the state General Assembly creating a state program to protect wetlands.

Newdunn contended the law was bound to the federal program, except for the ditching issue.

The court disagreed, saying that a “plain reading” of the state law made it “inconceivable” that state authority was bound to federal law. “It would be perverse, therefore, to conclude that the jurisdictional limits of the Virginia Act depend upon the [Clean Water Act],” Judge Roger L. Gregory wrote in the court’s opinion.

Although many parts of the federal and state programs overlap—and in some cases applicants can meet federal requirements through their state permits—nothing prevented the state program from being even more demanding than federal requirements, the court said.

The court further ruled that the wetlands were not exempt from federal regulation.

Attorneys for the developer had argued that in its 2001 decision, Solid Waste Agency of Northern Cook County v. the U.S. Army Corps of Engineers, the Supreme Court had limited the federal government’s jurisdiction, allowing it to only regulate wetlands adjacent to navigable waterways.

In that decision, the Supreme Court had rejected the Corps’ argument that it could regulate isolated ponds where the only connection to “waters of the United States” was through the presence of migratory waterfowl which could be hunted and were therefore part of interstate commerce and subject to federal regulation under the Commerce Clause of the Constitution. Some have interpreted the ruling as removing federal protection of all isolated waters and even nonnavigable waterways—leading to the federal government’s proposed rulemaking on the issue.

But the appeals court disagreed with that interpretation. It agreed that the Corps’ jurisdiction “does not extend to the limits of the Commerce Clause” but added that the Corps can regulate wetlands adjacent to navigable waters, including those connected to navigable waters through tributary streams and manmade ditches.

It said the Supreme Court decision was limited to isolated wetlands with no hydrologic connection between navigable waters. The appeals court cited an earlier ruling that agreed the Corps had jurisdiction over wetlands adjacent to a waterway that was eight miles from a navigable waterway, but was connected through a variety of nonnavigable ditches and streams. It called that linkage an “unremarkable interpretation of the term ‘waters of the United States.’”

It noted that pollutants from such upstream areas will inevitably find their way to the navigable waters that Congress sought to protect in the Clean Water Act, and that the Corps may regulate “any branch of a tributary system that eventually flows into a navigable body of water.”

The court said it was “illogical” to conclude that the Newdunn property could be regulated by the Corps prior to the construction of I-64, but not after construction. It noted that the Clean Water Act goal is “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters” and added: “If this court were to conclude that the I-64 ditch is not a ‘tributary’ solely because it is manmade, the CWA’s chief goal would be subverted,” Gregory wrote on behalf of the court.

Attorneys for Newdunn did not immediately comment on the decision.