United States v. Brace

• Court: Court of Appeals for the Third Circuit
• Decided: November 22, 1994
• Docket: 94-3076
• Status: Unknown

Opinion

Opinions of the United 1994 Decisions States Court of Appeals for the Third Circuit

11-22-1994

United States v. Brace Precedential or Non-Precedential:

Docket 94-3076

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_______________

No. 94-3076 _______________

UNITED STATES OF AMERICA,

Appellant

v.

ROBERT BRACE; ROBERT BRACE FARMS, a Pennsylvania Corporation _______________

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 90-cv-00229E) _______________

Argued September 19, 1994

Before: BECKER and COWEN, Circuit Judges and POLLAK*, District Judge

(Filed: November 22, 1994)

Bonnie R. Schlueter Office of United States Attorney 633 United States Post Office & Courthouse Pittsburgh, PA 15219

William B. Lazarus (argued) United States Department of Justice P.O. Box 23795 L'Enfant Plaza Station Washington, DC 20026

COUNSEL FOR APPELLANT UNITED STATES OF AMERICA *Honorable Louis H. Pollak, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.

Samuel W. Braver Henry McC. Ingram (argued) Buchanan Ingersoll Professional Corporation 600 Grant Street 58th Floor Pittsburgh, PA 15219

John D. Ward Buchanan Ingersoll 30 North Third Street Vartan Parc, 8th Floor Harrisburg, PA 17101-2023

COUNSEL FOR APPELLEES ROBERT BRACE; ROBERT BRACE FARMS, a Pennsylvania Corporation

OPINION OF THE COURT _______________

COWEN, Circuit Judge.

The United States brought this action in the United States

District Court for the Western District of Pennsylvania against

Robert Brace, individually, and Robert Brace Farms, Inc., a

Pennsylvania corporation (collectively, "Brace" or "defendants"),

alleging violations of the requirement in Section 404 of the

Clean Water Act ("CWA"), 33 U.S.C. § 1344, that a permit be

obtained for the discharge of dredged or fill material into

waters of the United States. The United States sought

restoration of the site, a permanent injunction and civil

penalties pursuant to 33 U.S.C. § 1319(d). The district court bifurcated the action: a trial on

liability issues and a trial on remedy issues. Shortly before

the liability trial, Brace stipulated that at the time of the

discharges, "the approximately thirty-acre site that is the

subject of this lawsuit was wetlands as defined at 33 C.F.R. §

328.3(b) and 40 C.F.R. § 232.2(r)." Pre-Trial Stipulation (Dec.

16, 1993); Appendix ("App.") at 40.

The United States, either by stipulation or at trial,

established the five elements of a prima facie case for

violations of Section 404 of the CWA: (1) defendants admitted

that they are "persons" within the meaning of the CWA; (2)

defendants admitted that the activities at the site were

conducted without a permit; (3) defendants stipulated that the

site was a wetland at the time of the discharges; (4) the

district court held that the site constituted waters of the

United States at the time of defendants' activities; and (5) the

district court held that defendant's clearing, mulching,

churning, and levelling of the formerly wooded and vegetated site

constituted a discharge of pollutants into the waters of the

United States and that defendants paid for excavation and

installation of drainage tubing in an effort to drain the site.

Brace asserted, and the district court held, that the

discharges were exempt from the permit requirement under Section

404(f)(1). The court concluded that: (1) Brace's activities on

the wetland constituted "normal farming activities" exempt under

Section 404(f)(1)(A); and (2) Brace's activities constituted

"upland soil and water conservation practices" also exempt under that same provision of the CWA. United States v. Brace, C.A. No.

90-229 (W.D. Pa. Dec. 16, 1993), slip op. at 22-23. In addition,

the court found that Brace's conduct in "preserving and regularly

cleaning the existing drainage system on the site" was exempt

from the permit requirement as "maintenance of the drainage

system" under Section 404(f)(1)(C). Id. at 23. The court also

held that the recapture provision of Section 404(f)(2) does not

apply to this case because "[t]he land is not being converted to

a use to which it was not previously subject, nor has significant

impairment to the reach or flow of waters been proven." Id. at

22.

The district court entered judgment in defendants' favor.

We hold that the district court incorrectly applied the

requirements of the CWA permit exemption provisions. We will

reverse the order of the district court and remand the case to

determine the appropriate remedy.

I.

Brace is a farmer who owns approximately 600 acres of real

property in Erie County, Pennsylvania, including the subject

thirty-acre wetland site ("the site"). Brace Farms, Inc. is a

Pennsylvania corporation engaged principally in the farming

business. Brace's parents and other family members have always

earned their principal livelihood from farming activities. Brace

purchased a parcel of farm property from his father in 1975. A

portion of that property contains the site. The property has been in the Brace family since the 1930's when Brace's

grandfather farmed the land. Prior to 1975, Brace's father used

the site for pasturing of cows and horses, and Brace's brother

used the site for pasturing cows until 1976.

Brace purchased the property from his father with the intent

of continuing and improving his father's established farming

operation. It was Brace's intention to integrate the various

portions of the property into an overall operation for an

effective and productive farming business. At the time Brace

purchased the property containing the site from his father, the

site was vegetated with areas of scrub brush, including red brush

and briars.

In 1977, Brace sought the advice and assistance of the

Agricultural Stabilization and Conservation Service ("ASCS") as

part of his plan to develop an integrated farming operation on

the property that includes the site. The ASCS is "an agency of

the United States Department of Agriculture which is generally

responsible for administering commodity production adjustment and

certain conservation programs of the Department." 7 C.F.R. §

12.2(a)(2) (1994). Brace's father had previously worked with the

ASCS to prepare a drainage plan relating to the site for the

purpose of farming the entire property. At the time he purchased

the property from his father, Brace obtained and utilized the

soil and conservation plans that had been prepared for his father

by the ASCS. The drainage system impacts the ability to produce

crops on all parts of Brace's property. The existing drainage system was in poor condition and not

yet complete at the time of Brace's acquisition. Brace began

cleaning the system in 1976 in order to improve upon the existing

system and make it effective for agricultural development. In

the following years, Brace maintained and improved the drainage

system pursuant to the plan recommended by the ASCS. From 1977

to 1985 the ASCS periodically visited the site and provided

technical assistance and cost-sharing arrangements to Brace.

As of 1977, the essential portions of Brace's improvements

to the existing drainage system were intact and operating.

Brace's work in improving upon the interconnected drainage system

progressed continuously from 1977 to 1987, as time, funds and

equipment were available. If the necessary funds had been

available to him in 1977, Brace would have expedited his farming

plans and completed the project at that time. As a result of

Brace's efforts, by the end of 1979 the site was dry, with the

exception of times of excessive rainfall.

Brace cleared, mulched, churned, levelled, and drained the

formerly wooded and vegetated site from 1985 through 1987. In

1986 and 1987, Brace paid for excavation in the site and the

burying of plastic tubing or "drainage tile" in an effort to

drain the site. Throughout the 1980's, Brace used appropriate

equipment to remove unconsolidated soil, pebbles, silt, and

growth which were impeding water flow. Farmers in the area

typically engaged in such practices.

As a result of Brace's levelling, spreading, and tiling,

Brace began to grow crops on the site in 1986 and 1987. Brace did not have a permit issued pursuant to Section 404 of the CWA

authorizing his activities.

The United States became aware of Brace's activities in

1987. During 1987 and 1988, the United States issued three

orders to Brace, directing him, inter alia, to refrain from

further disturbing the site, so that it could naturally

revegetate with indigenous plant species. After the issuance of

these orders, Brace continued to mow vegetation on the site. In

October of 1988, Brace received an administrative complaint in

connection with his farming activities on the site. Brace

requested a hearing to contest the complaint, believing that his

activities were exempt from any and all permit requirements.

Prior to the hearing, the complaint was dismissed.

In the summer of 1988, Brace approached the ASCS in order to

gain the status of "commenced conversion from wetlands" prior to

December 23, 1985 with respect to the site. The ASCS was

authorized to make such a determination under the Food Security

Act of 1985, 16 U.S.C. §§ 3801, et seq. This Act contains a

provision, referred to as the "Swampbuster," which denies certain

Department of Agriculture benefits to farmers who produce an

"agricultural commodity on converted wetland," unless such

conversion commenced before December 23, 1985. 16 U.S.C. §§

3821, 3822 (1988 & Supp. V 1993).

The ASCS granted the status to the site, finding that

Brace's on-going farming activities had commenced prior to

December of 1985, which would enable Brace to complete conversion

and produce an agricultural commodity without losing USDA benefits. Letter from Erie County ASCS Office to Robert Brace

(9/21/88); App. at 172. However, the ASCS expressly noted that

"[t]he granting of a commencement . . . request does not remove

other legal requirements that may be required under State or

Federal water laws." USDA Form; App. at 173.

In April 1990, as a cautionary measure, Brace approached the

Army Corps of Engineers ("COE") in an effort to obtain an after-

the-fact permit to conduct his farming activities on the site,

despite his belief that the activities were exempt from the

permit requirements of the CWA. The United States Environmental

Protection Agency ("EPA") requested that the COE not review an

application from Brace for an after-the-fact permit. Brace was

advised that because the matter was then in litigation, the

government would not act on his request for a permit. Since the

time of the cease and desist orders Brace has terminated farming

activity on the site except for routinely mowing the vegetation.

II.

The district court exercised its jurisdiction pursuant to 33

U.S.C. § 1319(b) (1988) and 28 U.S.C. §§ 1331, 1345, 1355 (1988 &

Supp. V 1993). Our jurisdiction rests on 28 U.S.C. § 1291

(1988).

Presently, there are three issues before us. The first

issue is whether the district court erred in determining that

Brace's discharges of dredged and fill material into the wetland

were exempt from the permit requirement pursuant to Section 404(f)(1) of the CWA, 33 U.S.C. § 1344(f)(1). The second issue

is whether the district court erred in determining that Brace's

discharges were not "recaptured" by the permit requirement under

Section 404(f)(2) of the CWA, 33 U.S.C. § 1344(f)(2). We have

plenary review over the question of whether the district court

erroneously interpreted the meaning of the applicable statutes.

Moody v. Sec. Pac. Business Credit, Inc., 971 F.2d 1056, 1063 (3d

Cir. 1992); Manor Care, Inc. v. Yaskin, 950 F.2d 122, 124 (3d

Cir. 1991). To the extent that the court's ruling on these

issues was also premised on findings of fact, we review any such

findings under the clearly erroneous standard. Zenith Radio

Corp. v. Hazeltime Research, Inc., 395 U.S. 100, 108, 89 S. Ct.

1562, 1568 (1969); Sheet Metal Workers Int'l Ass'n Local 19 v.

2300 Group, Inc., 949 F.2d 1274, 1278 (3d Cir. 1991).

The third issue is whether the district court erred in

determining that Brace was not subject to liability for

violations of administrative orders. Our review of questions of

law such as this is plenary. Moody, 971 F.2d at 1063; Manor

Care, 950 F.2d at 124.

III.

The Clean Water Act was enacted to "restore and maintain the

chemical, physical, and biological integrity of the Nation's

waters." 33 U.S.C. § 1251(a) (1988). Section 301(a) of the CWA

prohibits the discharge of any pollutant into navigable waters of

the United States, unless the discharge is authorized by a permit. 33 U.S.C. §§ 1311(a), 1362(12) (1988). We recognize

that: The Act defines the operative terms of this prohibition broadly. The term "pollutants" includes fill material such as "dredged spoil, . . . rock, sand, [and] cellar dirt," 33 U.S.C. § 1362(6), and "navigable waters" means "the waters of the United States," id. § 1362(7). In so defining the term "navigable waters," Congress expressed a clear intent "to repudiate limits that had been placed on federal regulations by earlier water pollution control statutes and to exercise its powers under the Commerce Clause to regulate at least some waters that would not be deemed `navigable' under the classical understanding of the term."

United States v. Pozsgai, 999 F.2d 719, 724 (3d Cir. 1993), cert.

denied, U.S. , 114 S. Ct. 1052 (1994) (citations omitted).

The district court found that Brace's clearing, churning,

mulching, levelling, grading, and landclearing of the formerly

wooded and vegetated site was a discharge of a dredged spoil,

biological material, rock and/or sand, each of which fits the

definition of pollutant. Brace, slip op. at 18.

Section 404 of the CWA authorizes the Secretary of the Army,

through the COE, to issue permits "for the discharge of dredged

or fill material into the navigable waters at specified disposal

sites." 33 U.S.C. § 1344(a) (1988). See also 33 C.F.R. § 323.1 (1993). The permit program, as we recognized in Pozsgai, "is the

central enforcement tool of the Clean Water Act . . . .

Unpermitted discharge is the archetypical Clean Water Act

violation, and subjects the discharger to strict liability." 999

F.2d at 724-25. The COE and EPA have issued regulations defining the term

"waters of the United States" to include "wetlands," among other

bodies of water: (a) The term waters of the United States means

(1) All waters which are currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide; . . .

(3) All other waters such as intrastate lakes, rivers, streams (including intermittent streams), . . . wetlands, . . . the use, degradation or destruction of which could effect interstate or foreign commerce . . .

(5) Tributaries of waters identified in paragraphs (a)(1) through (4) of this section . . .

(7) Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (a)(1) through (6) of this section.

33 C.F.R. § 328.3(a) (1993); 40 C.F.R. § 230.3(s) (1993)

(emphasis in original). The district court found that the site

constituted waters of the United States at the time of Brace's

activities. Brace, slip op. at 17. The term "wetlands" is

defined as: those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.

33 C.F.R. § 328.3(b); 40 C.F.R. § 230.3(t). The parties have

stipulated that the site constituted wetlands at the time of

Brace's activities. Exemptions to the general requirement for a Section 404

permit are contained in Section 404(f) of the CWA. Under Section

404(f)(1), a permit is not required for: (1) the discharge of

dredged or fill material "from normal farming, silviculture, and

ranching activities such a plowing, seeding, cultivating, minor

drainage, harvesting for the production of food, fiber, and

forest products, or upland soil and water conservation

practices," 33 U.S.C. § 1344(f)(1)(A); and (2) the discharge of

dredged or fill material "for the purpose of . . . the

maintenance of drainage ditches." 33 U.S.C. § 1344(f)(1)(C).

The COE and EPA have promulgated regulations which provide

that the "normal farming activities" exemption is available only

to discharge activities that are "part of an established (i.e.,

on-going) farming . . . operation," and expressly stipulate that

the exemption is not available either: (1) for "[a]ctivities

which bring an area into farming . . . use"; or (2) where

"modifications to the hydrological regime are necessary to resume

operations." 33 C.F.R. § 323.4(a)(1)(ii) (1993); 40 C.F.R. §

232.3(c)(1)(ii)(A), (B) (1993).

This provision further requires that, to be exempt from the

permit requirement, such activities "must be in accordance with

definitions in 33 C.F.R. § 323.4(a)(1)(iii)." 33 C.F.R. §

323.4(a)(1)(ii). The definitions in 33 C.F.R. § 323.4(a)(1)(iii)

provide that "the redistribution of surface materials by blading,

grading, or other means to fill in wetland areas is not plowing."

33 C.F.R. § 323.4(a)(1)(iii)(D); 40 C.F.R. § 232.3(d)(4). The

definitions also define "minor drainage" as meaning "[t]he discharge of dredged or fill material incidental to connecting

upland drainage facilities to waters of the United States,

adequate to effect the removal of excess soil moisture from

upland croplands." 33 C.F.R. § 323.4(a)(1)(C)(1)(i); 40 C.F.R. §

232.3(d)(3)(i)(A). This latter definition is modified by 33

C.F.R. § 323.4(a)(1)(iii)(C)(2) and 40 C.F.R. § 232.3(d)(3)(ii),

which further provide that the term minor drainage "does not

include drainage associated with the immediate or gradual

conversion of a wetland to a non-wetland . . . , or conversion

from one wetland use to another."

The COE has also promulgated definitions concerning the

second exemption to the permit requirement, i.e. the exemption

for the maintenance of drainage ditches. The definitions provide

that the exemption from the permit requirement applies to

"maintenance (but not construction) of drainage ditches." 33

C.F.R. § 323.4(a)(3).

Even where Section 404(f)(1) exempts a discharge from the

permit requirement, the discharge may be "recaptured" by the

permit requirement under Section 404(f)(2): Any discharge of dredged or fill material into the navigable waters incidental to any activity having as its purpose bringing an area of the navigable waters into a use to which it was not previously subject, where the flow or circulation of navigable waters may be impaired or the reach of such waters be reduced, shall be required to have a permit under this section.

33 U.S.C. § 1344(f)(2). The regulation governing the "recapture"

provision stipulates in part that "[a] conversion of a section

404 wetland to a non-wetland is a change in use of an area of waters of the United States," 33 C.F.R. § 323.4(c), and states

as an example, that "a permit will be required for the conversion

of a cypress swamp to some other use . . . when there is a

discharge of dredged or fill material into waters of the United

Stated in conjunction with construction of . . . structures used

to effect such conversion." Id.

Thus, to be exempt from the CWA permit requirement, a

defendant has the burden of demonstrating that proposed

activities both satisfy the requirements of Section 404(f)(1) and

avoid the recapture provision of Section 404(f)(2). United

States v. Akers, 785 F.2d 814, 819 (9th Cir.), cert. denied, 479

U.S. 828, 107 S. Ct. 107 (1986). See also United States v.

Cumberland Farms, 647 F. Supp. 1166, 1176 (D. Mass. 1986)

("[E]ven if [defendant] could establish that it is exempt from

the permit requirements under § 1344(f)(1), it must also

demonstrate that its activities avoid `recapture' under the

provisions of 33 U.S.C. § 1344(f)(2)."), aff'd, 826 F.2d 1151

(1st Cir. 1987), cert. denied, 484 U.S. 1061, 108 S. Ct. 1016

(1988). Read together, the two parts of Section 404(f) provide a

narrow exemption for agricultural activities that have little or

no adverse effect on the waters of the United States. Avoyelles Sportsmen's League, Inc. v. Marsh, 715 F.2d 897, 926 (5th Cir.

1983). Congress intended this narrow exemption. As Senator

Muskie, one of the primary sponsors of the CWA, explained: New subsection 404(f) provides that Federal permits will not be required for those narrowly defined activities that cause little or no adverse effects either individually or cumulatively. While it is understood that some of these activities may necessarily result in incidental filling and minor harm to aquatic resources, the exemptions do not apply to discharges that convert extensive areas of water into dry land or impede circulation or reduce the reach or size of the water body.

3 A Legislative History of the Clean Water Act of 1977: A

Continuation of the Legislative History of the Water Pollution

Control Act, at 474 (1978).

IV.

The district court held that Brace's activities on the

thirty-acre wetland site were exempt from Section 404's permit

requirement "because they constitute: (a) normal farming

activities; (b) upland soil and water conservation practices; and

(c) maintenance of drainage ditches." Brace, slip op. at 22. We

find that the district court's determination is erroneous as a

matter of law.

The district court's conclusion that Brace's discharges on

the thirty-acre site constituted "normal farming activities"

which are exempt from Section 404's permit requirement cannot be

reconciled with the statute, the applicable regulations, and case

law governing the "normal farming activities" exemption. As we

described above, Section 404(f) of the CWA provides exemptions to

the general permit requirement, including the discharge of

dredged or fill material without a permit in connection with

"normal farming . . . activities such as plowing, seeding,

cultivating, minor drainage, harvesting . . . or upland soil and water conservation practices." 33 U.S.C. § 1344(f)(1)(A). In

determining that Brace's activities fell within this provision,

the district court relied on facts that are irrelevant to the

inquiry required by the applicable law. The district court

appears to have based its conclusion on a casual observation that

what Brace did was "normal" activity for a farmer in Erie County,

rather than on the application of the regulatory construction

accorded the statutory term "normal farming activities" by the

agencies charged with the implementation of the statute.1

The applicable regulation provides that, to constitute

"normal farming activity" within the meaning of the statute, the

activity: must be part of an established (i.e., on-going) farming . . . operation and must be in accordance with the definitions in § 323.4(a)(1)(iii) . . . . Activities which bring an area into farming . . . use are not part of an established operation. An operation ceases to be established when the area on which it was conducted has been converted to another use or has lain idle so long that modifications to the hydrological regime are necessary to resume operations.

33 C.F.R. § 323.4(a)(1)(ii). Brace's activities between 1985 and

1987 meet neither prong of this provision: they were neither

part of an "established (i.e., on-going) farming operation," nor

were they conducted "in accordance with the definitions in §

323.4(a)(1)(iii)."

A. 1 . See 33 U.S.C. §§ 1251(d) and 1344 for the implementation authority of the EPA and COE. Brace points out that in determining whether farming

activities are established and continuing, the conduct must be

analyzed by a contextual review of the total activities.

Cumberland Farms, 647 F. Supp. at 1175. He argues that the

district court correctly undertook a contextual analysis in its

determination that the site was an integral part of an

established and on-going farm operation, and Brace's activities

between 1985 and 1987 did not bring a new area into the

operation. Brace, slip op. at 12. The district court based its

conclusion on: (1) its determination that the site is an integral

part of the drainage system previously installed in adjoining

crop producing fields; (2) its finding that the installation of a

drainage system at the site "is normal farming activity in order

to make land suitable for farming," because "[e]xtensive

underground drainage systems are typical and necessary aspects of

farming in Erie County," id. at 3; and (3) the ASCS determination

that Brace had "commenced conversion" of the site from wetland to

cropland prior to December 23, 1985.

The district court's reasoning and conclusion are improper.

The district court misinterpreted the meaning of the "established

farming operation" requirement. The district court believed it

was appropriate to examine the relationship of the site in

question to the rest of the land owned by the same property-owner

in determining whether land was being brought into farming use.

Brace maintains that it is arbitrary to delineate artificially a

portion of the farm and without rational justification sever it from his overall operations. We cannot agree with this

interpretation of the statute's requirement.

The regulations provide that, "[a]ctivities which bring an

area into farming . . . use are not part of an established

operation." 33 C.F.R. § 323.4(a)(1)(ii); 40 C.F.R. §

232.3(c)(1)(ii)(B) (emphasis added). The regulations do not

specify the precise area to which we should look in determining

whether there is an established farming operation. There are no

minimum limits placed on the "area" being brought into farming

use. Thus, we read the regulations to provide that an exemption

is available only to activities that are part of an "established

farming operation" at the site. A proper "contextual review of

its total activities" only requires us to analyze whether such

activities are "established and continuing" on the thirty-acre

wetland site itself. See Cumberland Farms, 647 F. Supp. at 1175

(referring to "the site," rather than the property owner's total

land holdings).2 Our reading of the regulation recognizes the

statute's legislative history and is in accord with the strict

construction of the permit exemptions afforded by other Courts of

Appeals. See, e.g., Akers, 785 F.2d at 819, 823; United States v. Huebner, 752 F.2d 1235, 1240-41 (7th Cir.), cert. denied, 474

U.S. 817, 106 S. Ct. 62 (1985); Marsh, 715 F.2d at 925 n.44. 2 . We recognize that the designation of the use of some very small sites will be effectively inseparable from the use of the surrounding land for established farming operations. Thus, we would not require that every square foot be used for farming in order for a site to meet the established operation exemption. In this case, however, it is clearly reasonable to require that all or substantially all of the thirty-acre site be part of an established operation. Brace himself testified that: (1) for the nine-year period

prior to the discharges onto the site, from 1977 to 1986, his

activities at the site included no pasturing or growing of any

crops, but consisted entirely of efforts to drain the wetland;

(2) the site was fully covered in 1983 with indigenous plants,

but that all plants had been stripped from the site in 1987,

subsequent to the discharge activities; and (3) the purpose of

his 1985-1987 discharges was to drain the wetland and make it

suitable for row cropping. The district court found that "[a]s a

result of Defendants' levelling, spreading and tiling, Defendants

began to grow crops on the site in 1986 and 1987." Brace, slip

op. at 9 (emphasis added). These facts do not justify the

district court's determination that Brace's activities on the

site were exempt from the permit requirements as "normal farming

activities." Indeed, the factual findings of the district court

can only lead to the opposite conclusion. Brace converted a

thirty-acre site that was not suitable for farming into a site

that is suitable for farming, and thus "brought an area into

farming use."

Even if Brace's father's pre-1975 use of the site for

pasturing could be considered to have been a prior, "established

farming operation" on the site, Brace's drainage activities

demonstrate that the court erred as a matter of law in finding

the exemption from the permit requirement available for his

subsequent activities. Under the regulations, a farming

operation is not "ongoing" where "modifications to the hydrological regime are necessary to resume operations." 33 C.F.R. § 323.4(a)(1)(ii); 40 C.F.R. § 232.3(c)(1)(ii)(B). Here,

Brace admitted that "modifications to the hydrological regime,"

i.e., drainage of the site through excavating and burying four

miles of plastic tubing for drainage, were necessary to grow

crops on the site.

Our determination is consistent with the holdings of

numerous other courts that have found the "normal farming"

exemption inapplicable because modifications were required to

resume farming. See, e.g., Akers, 785 F.2d at 819-20

("[Defendant] argued below that unless he were allowed to

complete the work he had started, the effect of which is to drain

the wetland, he would be unable to engage in the farming

activities he had planned. By his own admission, his activities

require substantial hydrological alteration to [the site], and

run afoul of the regulations."); Bayou Marcus Livestock & Agric.

Co. v. EPA, No. 88-30275, 20 Envtl. L. Rev. (Envtl. L. Inst.)

20445, 20446 (N.D. Fla. Nov. 3, 1989) ("Before plaintiffs could

have effectively harvested the timber and begun farming, it was

necessary to dredge, fill, construct roads and dig ditches . . .

. [I]f an ongoing operation had been previously functioning,

such changes in the landscape would have been unnecessary.");

United States v. Larkins, 657 F. Supp. 76, 85-86 n.23 (W.D. Ky. 1987) ("Activities cease to be established when the property on

which they were once conducted `. . . has lain idle so long that

modifications to the hydrological regime are necessary to resume operations.' Reducing the reach of the [site] required

modifications of the site's hydrological regime. Consequently, even if the wetland had a history of farm use, that use was no

longer established at the time [of defendant's activities]."

(emphasis by court) (citations omitted)), aff'd, 852 F.2d 189

(6th Cir. 1988), cert. denied, 489 U.S. 1016, 109 S. Ct. 1131

(1989).

Brace suggests that this line of cases is distinguishable

from his circumstances because of, inter alia, the larger size of

the farms and wetlands at issue in those cases, and the fact that

one site was a habitat for an endangered species. We cannot

agree. There is no provision in Section 404(f)(1) of the CWA or

its implementing regulations under which either the size of a

wetland or the effect of discharge activities on wildlife are

factors relevant to determining whether particular discharge

activities are exempt from the permit requirement. Although

wetland protection in Section 404 serves the important function

of protecting wildlife habitats, in addition to several other

functions including flood and erosion control and water

purification, see 33 C.F.R. § 320.4(b)(2), neither the statute

nor the regulations condition the permit requirement on the

existence of adverse impacts on wildlife or on the particular

size of a wetland. Indeed, we have upheld determinations of both

civil and criminal liability for the discharge of fill material

onto a 14-acre wetland site, a substantially smaller site than

Brace's, where there was no claim of adverse impact on wildlife.

United States v. Pozsgai, 999 F.2d 719 (3d Cir. 1993), cert. denied, U.S. , 114 S. Ct. 1052 (1994) (civil), and United States v. Pozsgai, 897 F.2d 524 (3d Cir.), cert. denied, 498 U.S.

812, 111 S. Ct. 48 (1990) (criminal).

In addition to the district court's erroneous interpretation

of the "established farming operation" requirement, the district

court erred as a matter of law in finding that Brace's

installation of a drainage system at the site "is a normal

farming activity in order to make land suitable for farming,"

because "[e]xtensive underground drainage systems are typical and

necessary aspects of farming in Erie County." Brace, slip op. at

3. Brace argues that the court correctly considered the area-

specific context in its fact finding inquiry. However, this

factual determination is a legal conclusion, and is not merely a

matter for factual findings. The question is not whether farmers

in a particular county install extensive drainage systems.

Rather, the proper question is whether the activities performed

by Brace at this particular site, and at a time when the CWA

applied, were within the meaning of the statutory term "normal

farming activities" as defined by the regulations. Regardless of

how "typical" or "necessary" such drainage systems may be in Erie

County, Section 404 of the CWA requires a permit for "activities

which bring an area into farming . . . use," as opposed to

activities that are part of an "established farming operation."

Brace did not have an "established farming operation" on the site

prior to his discharges, and brought the site into farming use by

discharging pollutants into waters of the United States.

Moreover, the district court erred in relying upon a

determination from the ASCS in September of 1988 that Brace had "commenced conversion" of his property from wetland to cropland

prior to December 23, 1985, as evidence of an "established

farming operation" at the site. The USDA Swampbuster Commenced

and Third-Party Determinations form signed by Brace expressly

states that "[t]he granting of a commencement . . . does not

remove other legal requirements that may be required under State

or Federal water laws." USDA Form; App. at 173. The purpose of

the "commenced conversion" determination is solely to prevent the

loss of USDA benefits. The ASCS determination is not a

dispositive factor in our analysis.

Moreover, to the extent that the ASCS determination has any

relevance to our analysis of "normal farming activities," it

undermines such a conclusion. The very title of the

determination -- "commenced conversion" -- indicates that Brace's

discharge activities were not part of an ongoing farming

operation, but rather, were directed at converting the wetland to

the farming operation of growing crops. Even if the ASCS

determination had stated that a conversion had been completed by

December 23, 1985, the CWA permit requirement would not have been

affected. Brace's activities were unpermitted and unauthorized

when they occurred, and the "commenced conversion" determination

provides no basis for an after-the-fact legitimization of those

activities.

B. As we explained above, the regulation governing the "normal

farming activities" exemption has a second prong, under which

drainage activities, in addition to being a part of an

"established farming operation" as defined by the regulation,

must be "in accordance with definitions in § 323.4(a)(1)(iii)."

33 C.F.R. § 323.4(a)(1)(ii). Brace's activities failed to meet

the requirements of this second prong in addition to not being a

part of an ongoing, established farming operation. Brace's

undisputed activities: (1) excavating soil and discharging in

connection with burying approximately four miles of plastic

tubing for drainage; (2) levelling and clearing the formerly

wooded and vegetated site; and (3) spreading dredged material,

are all excluded from the activities allowed under 33 C.F.R. §

323.4(a)(1)(iii).

Brace's installation of four miles of tubing which drains

the site is barred by the provision's express prohibition of

both: (1) "the construction of any . . . structure which drains

or otherwise significantly modifies . . . a wetland or aquatic

area constituting waters of the United States"; and (2) "drainage

associated with the immediate or gradual conversion of a wetland

to a non-wetland . . ., or conversion from one wetland use to

another." 33 C.F.R. § 323.4(a)(1)(iii)(C)(2). See also 40

C.F.R. § 232.3(d)(3)(D)(ii). Brace's clearing of all vegetation

from the wetland site, and his spreading of dredged materials

onto the site, are barred by the provision's express prohibition

of both: (1) "the redistribution of soil, rock, sand, or other

surficial materials in a manner which changes any area of the waters of the United States to dryland"; and (2) "the

redistribution of surface materials by blading, grading, or other

means to fill in wetland areas." 33 C.F.R. §

323.4(a)(1)(iii)(D). See also 40 C.F.R. § 232.3(d)(4).

Accordingly, by definition, Brace's discharge activities cannot

constitute "normal farming activities" under the applicable

regulation.

We are unpersuaded by Brace's assertion that we need not

reach the definitions of 33 C.F.R. § 323.4(a)(1)(iii) because

there was no conversion from one wetland use to another. Brace

bases his argument on the district court's determination that

Brace simply maintained and improved his drainage system, and

continued, piece by piece, to farm land which, in one form or

another, had always been used for crops or pasture. Brace

asserts that spreading materials that he dredged from ditches on

the site onto other portions of the site was an ordinary and

normal maintenance procedure employed by local farmers. Under

the CWA, a permit is not required for the discharge of dredged or

fill material for the purpose of maintaining drainage ditches.

33 U.S.C. § 1344(f)(1)(C). Thus, Brace argues and the district

court agreed that Brace's activities constituted maintenance of

drainage ditches, an activity clearly exempt from the permit

requirements of the CWA.

The exemption from the permit requirements under Section

404(f)(1)(C) for "maintenance of drainage ditches" applies to

"any discharge of dredged or fill material that may result from .

. . the maintenance (but not construction) of drainage ditches." 33 C.F.R. § 323.4(a)(3) (emphasis added). We find the district

court erred as a matter of law in finding that Brace was simply

maintaining rather than constructing the drainage ditches.

Likewise, the conclusion of the district court that the

activities of Brace do not require a permit because they

constitute maintenance of drainage ditches, Brace, slip op. at

22, is not supported by the evidence. Brace caused the

excavation of the site and the burying of several miles of

plastic tubing to facilitate drainage. It is not realistic to

describe what Brace was doing as "continuing maintenance."

Brace's construction of a drainage system absent a permit was

expressly prohibited by the regulation absent a permit. See

Huebner, 752 F.2d at 1242 (defendants' cleaning and deepening

existing ditches, excavating a new ditch, and discharging dredged

materials required a permit when it brought an area of navigable

waters into a use to which it was not previously subject).

Moreover, any activity that could be described as

maintenance of drainage ditches was accomplished, if at all, by

dredging ditches at the site. Brace's subsequent levelling at

the site and spreading of the dredged material were separate,

independent activities that are not subject to an exemption from

the permit requirement. This subsequent spreading of dredged

materials onto other portions of the site served no purpose

beyond converting the thirty-acre wetland site to an upland site

that could accommodate the growing of crops; it did not "result"

from the maintenance of drainage ditches. There is no statutory

or regulatory provision under which the spreading of the dredged materials is permissible absent a permit. The district court

erred as a matter of law in holding Brace's activities

permissible.

As we discussed above, Brace has the burden of proving both

that he qualifies under Section 404(f)(1) for the normal farming

activities exemption, and that the permit requirement was not

"recaptured" under Section 404(f)(2) of the CWA, 33 U.S.C. §

1344(f)(2). The "recapture" provision stipulates that: Any discharge of dredged or fill material into the navigable waters incidental to any activity having as its purpose bringing an area of the navigable waters into a use to which it was not previously subject, where the flow or circulation of navigable waters may be impaired or the reach of such waters be reduced, shall be required to have a permit under this section.

33 U.S.C. § 1344(f)(2). The applicable regulation provides that

"[a] conversion of a section 404 wetland to a non-wetland is a

change in use of an area of the waters of the United States." 33

C.F.R. § 323.4(c).

Initially, the district court incorrectly stated that the

application of the recapture provision required the United States

to establish the two elements: First, it must be established that Brace's activities were conducted in order to bring the property into a use to which it was not previously subject. Second, if this element is established, it must then be established that Brace's activities will impair the flow or circulation of navigable waters or will reduce the reach of such waters. Brace, slip op. at 21. The court's articulation of the legal

standard implies that the burden of demonstrating "recapture" is

on the United States. This legal standard is erroneous.

Since we have held that Brace's drainage activities on the

thirty-acre wetland site are not exempt from the CWA permit

requirement under the "normal farming activities" or maintenance

of drainage ditches exemptions, we need not reach the application

of the recapture provision. We note, however, that the district

court's conclusion that the recapture provision does not apply

because "[t]he land is not being converted to a use to which it

was not previously subject, nor has significant impairment to the

reach or flow of waters been proven," Brace, slip op. at 22, is

incorrect as a matter of law. The evidence establishes that

Brace's activities drained the site to convert it from a wetland

to a new, non-wetland use: the district court found that the

site was inundated with water at various times in the past; the

parties stipulated, and the court found, that the site

constituted a wetland at the time of the discharges; Brace

admitted that the purpose of installing the four miles of plastic

tubing at the site in 1986 and 1987, and of clearing the

vegetation from the site between 1985 and 1987, was to drain the

site and make the ground ready for growing crops; and the court

found that as a result of Brace's levelling, spreading and

tiling, he began to grow crops on the site in 1986 and 1987.

Thus, Brace's activities fall squarely within the statutory

definition of "recapture." VI.

The last issue that we must address is that of Brace's

penalty for violations of the permit requirements of Section 404

of the CWA and for his violations of the EPA administrative

orders. Clearly, under the CWA Section 309(d), Brace is subject

to a civil penalty for his violation of the CWA permit

requirements. 33 U.S.C. § 1319(d) (1988).3 Upon remand the

district court must determine the appropriate amount of the

penalty, based on the statutory factors delineated in Section

309(d).

The more difficult issue is whether Brace is also subject to

civil penalties for his noncompliance with the EPA administrative

orders. The district court found both that: (1) the EPA's

administrative order had required Brace "to cease and desist all

activities on the site," Brace, slip op. at 14; and (2)

3 . Section 1319(d) provides in pertinent part:

Any person who violates section 1311, 1312, 1316, 1317, 1318, 1328, or 1345 of this title, or any permit condition or limitation implementing any of such sections in a permit issued under section . . . 1344 of this title by a State, . . . and any person who violates any order issued by the Administrator under subsection (a) of this section, shall be subject to a civil penalty not to exceed $25,000 per day for each violation. In determining the amount of a civil penalty the court shall consider the seriousness of the violation or violations, the economic benefit (if any) resulting from the violation, any history of such violations, any good-faith efforts to comply with the applicable requirements, the economic impact of the penalty on the violator, and such other matters as justice may require. "Defendants failed to totally comply with Administrative Orders

issued to them." Brace, slip op. at 14. However, the district

court did not attach liability for violating the orders, based on

its findings that "Defendants have not disturbed the soil on the

site in any significant way since being served with the cease and

desist orders, and in the view of this Court acted only out of

sincere conviction, although undoubtedly misguided." Id.

Section 309(d) provides that "any person who violates any

order issued by the Administrator under subsection (a) of this

section, shall be subject to a civil penalty." 33 U.S.C. §

1319(d). Section 309(d) does not afford the district court

discretion to grant an exemption from liability for violating the

EPA administrative orders. See, e.g., Atlantic States Legal

Foundation v. Tyson Foods, 897 F.2d 1128, 1142 (11th Cir. 1990)

(the language of Section 309(d) "makes clear that once a

violation has been established, some form of penalty is

required.") However, the record is not sufficiently clear for us

to determine whether civil penalties are mandatory under the

circumstances of this case. We remand this issue to the district

court for further review of Brace's non-compliance with the EPA

administrative orders. Thereafter, the district court must

determine what, if any, civil penalties should be assessed

against Brace for his violations of the EPA administrative

orders.

VII. CONCLUSION For the foregoing reasons, the order entered December 17,

1993, granting judgment in favor of the defendants, Robert Brace

and Robert Brace Farms, Inc., will be reversed. This matter will

be remanded to the district court to enter judgment in favor of

the United States and to assess upon further proceedings

appropriate penalties for defendants' violations of the permit

requirements, and to assess what, if any, penalties are

appropriate for violations of the EPA administrative orders.