FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BACCARAT FREMONT DEVELOPERS,
LLC, a California limited liability
company,
Plaintiff-Appellant,
v.
UNITED STATES ARMY CORPS OF
ENGINEERS; TIMOTHY A. O’ROURKE;
SAN FRANCISCO DISTRICT OF UNITED No. 03-16586
STATES ARMY CORPS OF ENGINEERS;
STATE WATER RESOURCES CONTROL D.C. No.
CV-02-03317-CW
BOARD; CELESTE CANTU, Executive
Officer of State Water Resources OPINION
Control Board; SAN FRANCISCO
REGIONAL WATER QUALITY
CONTROL BOARD; LORETTA K.
BARSAMIAN, Executive Officer of
San Francisco Regional Water
Quality Control Board; CITY OF
FREMONT,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Claudia Wilken, District Judge, Presiding
Argued and Submitted
February 16, 2005—San Francisco, California
Filed October 14, 2005
Before: Dorothy W. Nelson, William A. Fletcher, and
Raymond C. Fisher, Circuit Judges.
14095
14096 BACCARAT FREMONT v. US ARMY CORPS
Opinion by Judge William A. Fletcher
14098 BACCARAT FREMONT v. US ARMY CORPS
COUNSEL
Robert R. Moore and David H. Blackwell, Allen Matkins
Leck Gamble & Mallory, San Francisco, California, for the
plaintiff-appellant.
Todd S. Kim, US Department of Justice, Washington, D.C.,
James A. Coda and David M. Shapiro, Office of the U.S.
Attorney, San Francisco, California, Mark A. Rigau and
Thomas S. Sansonetti, US Department of Justice, San Fran-
cisco, California, Jack M. Kerns, US Army Corps of Engi-
neers, San Francisco, California, for the defendants-appellees.
OPINION
W. FLETCHER, Circuit Judge:
Baccarat Fremont Developers, LLC (“Baccarat”) seeks to
set aside the determination by the Army Corps of Engineers
(the “Corps”) that under the Clean Water Act (“CWA”) it has
jurisdiction over 7.66 acres of wetlands located on property
owned by Baccarat in Fremont, California. The Corps asserts
jurisdiction based on the fact that the wetlands are adjacent to
waters of the United States. Baccarat argues that after the
Supreme Court’s decision in Solid Waste Agency of N. Cook
County v. United States Army Corps of Engineers, 531 U.S.
BACCARAT FREMONT v. US ARMY CORPS 14099
159 (2001) (“SWANCC”), adjacency is no longer sufficient to
establish the Corps’ jurisdiction under the CWA. In Bacca-
rat’s view, the Corps failed to demonstrate an adequate hydro-
logical or ecological connection between these particular
wetlands and the adjacent waters of the United States. We
affirm the district court’s grant of summary judgment in favor
of the Corps.
I. Background
In July 1997, Baccarat purchased a 30.98 acre site (“the
site”) near San Francisco Bay in Fremont, California, on
which it planned to develop a six-building office, research,
and manufacturing facility. The site is roughly rectangular. It
is bordered on the north by Cushing Parkway, on the east by
Fremont Boulevard, and on the south and west by property
owned by the Alameda County Flood Control District
(“ACFCD”). Two ACFCD flood control channels run parallel
to the southern and western boundaries of the site. The flood
control channels are navigable and connect with the Bay.
The site contains 7.66 acres of wetland. The wetlands are
separated from the flood control channels by man-made
berms, which follow the southern and western boundaries of
the site. A maintenance road runs on top of the berms. If the
berms were removed, the wetlands would connect directly to
the flood control channels. Baccarat asserts that if the berms
were removed, the wetlands would drain entirely. At the clos-
est point, the wetlands are 65-70 feet from the flood control
channels. The wetlands on the site are separated into six
delineated areas, five of which are at issue in this case. The
sixth area (designated Wetland 4) receives tidal flow through
a culvert from an ACFCD channel, and the Corps’ jurisdiction
over the wetlands in that area is not in dispute.
In February 1998, at Baccarat’s request, the Corps’ San
Francisco District (“the District”) determined that it had juris-
diction under the CWA over 7.66 acres of wetland on the site.
14100 BACCARAT FREMONT v. US ARMY CORPS
Baccarat then sought a permit from the District to fill 2.36 of
those acres. On January 29, 2001, Baccarat requested that the
Corps reconsider its jurisdiction over the wetlands on the site
in light of the Supreme Court’s decision in SWANCC. By a
letter dated May 8, 2001, the District reaffirmed its determi-
nation of jurisdiction, explaining that SWANCC “did not elim-
inate the Corps’ authority to regulate wetlands adjacent to a
tidal waterway.” The District noted that the flood control
channels are “within 250 feet of the site’s western and south-
ern boundaries,” and that under 33 C.F.R. § 328.3(c), the
presence of the man-made berms did not defeat adjacency.
Finally, the District noted that water from the wetlands would
flow into the flood control channel during storms if not for the
man-made berms.
Baccarat appealed the District’s determination to the
Corps’ South Pacific Division (“the Division”). After an
appeal conference and site visit, the Division issued its deci-
sion on October 25, 2001. The Division rejected Baccarat’s
contention that SWANCC modified the Corps’ jurisdiction
over adjacent wetlands. However, the Division found that the
District had not provided sufficient evidence for its adjacency
determination, and that the District’s finding that the wetlands
would drain into the ACFCD channels but for the berms was
irrelevant to the jurisdictional determination. The Division
remanded to the District.
On January 28, 2002, the District determined once again
that the wetlands on the site are adjacent to tidal waters and
thus subject to the Corps’ jurisdiction under the CWA. In an
accompanying Memorandum for Record, the District set forth
six reasons for so holding: (1) that barriers such as berms do
not defeat adjacency pursuant to 33 C.F.R. § 328.3(c); (2) that
the wetlands are in reasonable proximity to the ACFCD flood
control channels; (3) that the wetlands serve important func-
tions that contribute to the aquatic environment in general and
to the nearby tidal waters in particular; (4) that the wetlands’
functions are particularly important given the reduction of
BACCARAT FREMONT v. US ARMY CORPS 14101
wetlands in the San Francisco Bay area; (5) that the wetlands
are within the 100 year floodplain of tidal waters; and (6) that
the wetlands are part of a hydric soil unit that is contiguous
with the area covered by tidal waters. The District noted that
it agreed with the Division that it was irrelevant to the juris-
dictional determination that the wetlands would drain into the
ACFCD channels but for the berms. The District’s January
28, 2002, decision was the Corps’ final decision under 33
C.F.R. § 331.10.
On February 6, 2002, the Corps offered Baccarat a permit
to fill 2.36 acres of wetland, subject to the condition that it (1)
create on-site a minimum of 2.36 acres of seasonal freshwater
wetlands and (2) enhance the remaining 5.3 acres of existing
brackish wetlands. Baccarat signed the permit, reserving the
right to seek judicial review of the Corps’ jurisdictional deter-
mination. The permit was issued on March 1, 2002.
Baccarat sued the Corps in California Superior Court, seek-
ing declaratory and injunctive relief from the Corps’ determi-
nation that it has jurisdiction under the CWA. Baccarat also
named as defendants Lt. Colonel O’Rourke of the Corps; the
State Water Resources Control Board and its Director, Celeste
Cantu; the San Francisco Regional Water Quality Control
Board and its Executive Officer, Loretta K. Barsamian; and
the City of Fremont. The suit was removed to federal district
court. The district court granted the City of Fremont’s motion
to dismiss for lack of jurisdiction, and remanded to state court
Baccarat’s claims against the state defendants. The district
court granted summary judgment to the Corps, holding that
the Corps has jurisdiction.
II. Discussion
A. Standard of Review
We review the district court’s grant of summary judgment
de novo. Universal Health Servs., Inc. v. Thompson, 363 F.3d
14102 BACCARAT FREMONT v. US ARMY CORPS
1013, 1019 (9th Cir. 2004). Viewing the evidence in the light
most favorable to the nonmoving party, we ask whether there
are any genuine issues of material fact in dispute and whether
the district court applied the relevant substantive law cor-
rectly. Far Out Prods., Inc. v. Oscar, 247 F.3d 986, 992 (9th
Cir. 2001).
Under the Administrative Procedure Act (“APA”), we may
set aside an agency decision if it is “arbitrary, capricious, or
an abuse of discretion, or otherwise not in accordance with
the law.” 5 U.S.C. § 706(2)(A). The arbitrary and capricious
standard is appropriate for the resolution of factual disputes
implicating substantial agency expertise. Marsh v. Oregon
Natural Res. Council, 490 U.S. 360, 375-76 (1989). In
reviewing an agency decision under the APA, we ask whether
the decision was based on a consideration of the relevant fac-
tors and whether there has been a clear error of judgment. Id.
at 378. We may reverse under the arbitrary and capricious
standard only if the agency has
relied on factors which Congress has not intended it
to consider, entirely failed to consider an important
aspect of the problem, offered an explanation for its
decision that runs counter to the evidence before the
agency, or is so implausible that it could not be
ascribed to a difference in view or the product of
agency expertise.
Pacific Coast Fed’n of Fishermen’s Ass’ns, Inc. v. National
Marine Fisheries Serv., 265 F.3d 1028, 1034 (9th Cir. 2001)
(citation omitted).
B. The Corps’ Adjacency Jurisdiction
[1] We conclude that the Corps has jurisdiction over wet-
lands under the Clean Water Act, 33 U.S.C. §§ 1251 et seq.
The CWA prohibits the discharge of pollutants into navigable
waters. See 33 U.S.C. §§ 1311(a), 1344(b), 1344(d) and
BACCARAT FREMONT v. US ARMY CORPS 14103
1362(12). “The term ‘navigable waters’ means the waters of
the United States.” 33 U.S.C. § 1362(7). The Corps has issued
a regulation defining “waters of the United States” as follows:
(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), mudflats,
sandflats, wetlands, sloughs, prairie potholes, wet
meadows, playa lakes, or natural ponds, the use, deg-
radation or destruction of which could affect inter-
state or foreign commerce including any such
waters;
***
(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 para-
graphs (a)(1) through (6) of this section.
33 C.F.R. § 328.3 (emphasis added). The regulations further
provide that the term “ ‘adjacent’ means bordering, contigu-
ous, or neighboring,” and they specify that “[w]etlands sepa-
rated from other waters of the United States by man-made
dikes or barriers, natural river berms, beach dunes and the like
are ‘adjacent wetlands.’ ” 33 C.F.R. § 328.3(c).
14104 BACCARAT FREMONT v. US ARMY CORPS
[2] The parties agree that the ACFCD flood control chan-
nels contain waters of the United States. The Corps deter-
mined that the wetlands on Baccarat’s site are adjacent to the
flood control channels, thus placing them within the jurisdic-
tion of the Corps pursuant to the adjacency clause in 33
C.F.R. § 328.3(a)(7). Baccarat argues that adjacency alone is
insufficient to support the Corps’ jurisdiction. In Baccarat’s
view, for the Corps to have jurisdiction, there must be a sig-
nificant hydrological or ecological connection between the
wetlands and the jurisdictional water on which the adjacency
determination is based.
[3] The text of the CWA and the implementing regulations
promulgated by the Corps give no indication that a significant
hydrological or ecological connection is a condition of Corps
jurisdiction over adjacent wetlands. Baccarat relies on the
Supreme Court’s decision in SWANCC to support its conten-
tion that adjacent wetlands must be hydrologically or ecologi-
cally connected to waters of the United States. SWANCC,
however, did not address the Corps’ adjacency jurisdiction.
Rather, it invalidated the Corps’ Migratory Bird Rule.
Under the Migratory Bird Rule, the Corps asserted jurisdic-
tion based on the CWA over intrastate waters that migratory
birds used as a habitat. SWANCC, 531 U.S. at 163-64. The
waters at issue in SWANCC were “isolated ponds, some only
seasonal, wholly located within two Illinois counties.” Id. at
171. The Court held that the Migratory Bird Rule was not
“fairly supported by the CWA,” id. at 167, on the ground that
reading the CWA to extend jurisdiction to inland ponds like
those at issue in SWANCC would effectively read the term
“navigable waters” out of the statute. Id. at 171-72. The Corps
did not assert that the waters at issue in SWANCC were adja-
cent to waters of the United States, and the Court’s opinion
did not address the Corps’ jurisdiction over adjacent wetlands.
[4] The Supreme Court had explicitly addressed the Corps’
jurisdiction over adjacent wetlands based on the CWA in an
BACCARAT FREMONT v. US ARMY CORPS 14105
earlier case, United States v. Riverside Bayview Homes, Inc.,
474 U.S. 121 (1985). In that case, the Court unanimously
upheld the Corps’ jurisdiction over wetlands adjacent to
waters of the United States, reasoning that “the Corps’ eco-
logical judgment about the relationship between waters and
their adjacent wetlands provides an adequate basis for a legal
judgment that adjacent wetlands may be defined as waters
under the Act.” Id. at 134. In so holding, the Court acknowl-
edged that some adjacent wetlands might not be environmen-
tally significant to their adjoining bodies of water.
Nevertheless, the Court concluded that the Corps had acted
properly in defining all adjacent wetlands as waters of the
United States. Id. at 135. In footnote 9, the Court wrote:
Of course, it may well be that not every adjacent
wetland is of great importance to the environment of
adjoining bodies of water. But the existence of such
cases does not seriously undermine the Corps’ deci-
sion to define all adjacent wetlands as “waters.” If it
is reasonable for the Corps to conclude that in the
majority of cases, adjacent wetlands have significant
effects on water quality and the aquatic ecosystem,
its definition can stand. That the definition may
include some wetlands that are not significantly
intertwined with the ecosystem of adjacent water-
ways is of little moment, for where it appears that a
wetland covered by the Corps’ definition is in fact
lacking in importance to the aquatic environment —
or where its importance is outweighed by other val-
ues — the Corps may always allow development of
the wetland for other uses simply by issuing a per-
mit.
Id. at 135 n.9 (citation omitted). In this passage, the Court
rejected the idea that for the Corps to have jurisdiction over
adjacent wetlands it must demonstrate a significant hydrologi-
cal or ecological connection between the particular wetlands
in question and the jurisdictional water to which it is adjacent.
14106 BACCARAT FREMONT v. US ARMY CORPS
As the Court explained, the fact that the Corps has determined
that the majority of adjacent wetlands have significant effects
on neighboring aquatic ecosystems is sufficient to support the
Corps’ assertion of jurisdiction over other wetlands that are
not “significantly intertwined” with such ecosystems.
Baccarat argues that we should read footnote 9 of Riverside
Bayview Homes differently. According to Baccarat,
refusing to invalidate a regulatory “definition” on the
grounds that “not every adjacent wetland is of great
importance to the environment of adjoining bodies
of water” is not the same thing as saying that in an
individual case requiring a jurisdictional delineation
by the Army Corps, no evidence of a hydrological
and ecological connectivity is required. Every juris-
dictional claim made by the Army Corps must be
factually based. Otherwise, the Army Corps’ claim
of jurisdiction is arbitrary and capricious for failure
to articulate a rational connection between the facts
found and the choice made.
In our view, Baccarat misreads footnote 9. According to the
Supreme Court, when the Corps is confronted with adjacent
wetlands that are not “significantly intertwined” with the
ecosystem of adjacent waterways, it “may . . . allow develop-
ment . . . simply by issuing a permit.” 474 U.S. at 135 n.9.
Thus, the Court clearly contemplates the Corps’ jurisdiction
over adjacent wetlands, even when they lack a significant eco-
logical connection with waters of the United States. Other-
wise the issuance of a permit would be both unnecessary and
ultra vires. We do not read Riverside Bayview Homes to
deprive the Corps of jurisdiction over particular wetlands that
fall within the adjacency regulation if they lack a significant
hydrological or ecological connection to waters of the United
States. Rather, under Riverside Bayview Homes, the Corps’
determination that a majority of adjacent wetlands have
important ecological connections to waters of the United
BACCARAT FREMONT v. US ARMY CORPS 14107
States is sufficient to support its regulations establishing juris-
diction over other adjacent wetlands that fall within the adja-
cency clause in 33 C.F.R. § 328.3(a)(7).
Baccarat’s reading of SWANCC is similarly unpersuasive.
SWANCC did not retreat from the view expressed in Riverside
Bayview Homes that the Corps’ determination that the major-
ity of adjacent wetlands have an ecological connection to
waters of the United Sates is sufficient to support broader
jurisdiction over other adjacent wetlands. Indeed, SWANCC
repeatedly referred to the holding of Riverside Bayview
Homes — “that § 404(a) [of the CWA] extend[s] to nonnavi-
gable wetlands adjacent to open waters” — without giving
any indication that it intended to modify or overrule that
unanimous ruling. Id. at 167-68, 172.
[5] SWANCC simply did not address the issue of jurisdic-
tion over adjacent wetlands. The Court noted in SWANCC that
to hold for the Corps, it would have “to hold that the jurisdic-
tion of the Corps extends to ponds that are not adjacent to
open water.” Id. at 168 (emphasis in original). The fact that
the Court in SWANCC refused to allow the Corps to extend
its jurisdiction to waters that are not adjacent to jurisdictional
waters on the basis of migratory bird patterns has no bearing
on its earlier holding that the Corps has jurisdiction over wet-
lands that are adjacent to jurisdictional waters.
[6] Our decision in Headwaters, Inc. v. Talent Irrigation
District, 243 F.3d 526 (9th Cir. 2001), does not support the
conclusion that a significant hydrological or ecological con-
nection is necessary for Corps jurisdiction over adjacent wet-
lands. In Headwaters, we upheld the EPA’s jurisdiction over
irrigation canals, finding that they were “tributaries” and thus
fell within the regulatory definition of “waters of the United
States.” We distinguished SWANCC by noting that the irriga-
tion canals were not isolated, but rather “receive[d] water
from natural streams and lakes, and . . . [were] connected as
tributaries to other ‘waters of the United States.’ ” Id. at 533.
14108 BACCARAT FREMONT v. US ARMY CORPS
Headwaters might be read to suggest that when the question
is whether a water is properly classified as a “tributary” sub-
ject to Corps jurisdiction, that water must exchange water, at
least intermittently, with a water of the United States. How-
ever, Headwaters cannot be read to address the different ques-
tion at issue here — whether a significant hydrological or
ecological connection to a particular adjacent wetland is
required for Corps jurisdiction.
[7] Baccarat’s contention that a significant hydrological or
ecological connection is required to support the Corps’ juris-
diction over particular adjacent wetlands is thus not supported
by the CWA, by the implementing regulations, by Supreme
Court case law, or by our case law. We hold that no such con-
nection is required, and that the district court appropriately
granted the Corps’ motion for summary judgment.
[8] In so holding, we join the Sixth Circuit in rejecting the
idea that SWANCC modified the holding of Riverside Bayview
Homes. See Carabell v. U.S. Army Corps of Engineers, 391
F.3d 704 (6th Cir. 2004). The facts in Carabell are remark-
ably similar to the facts here. The Carabells sought permission
to fill 15.9 acres of wetland. The Corps declined to issue a
permit. The Carabells then brought suit in federal court, argu-
ing that the Corps lacked jurisdiction over the wetlands. The
court described the relationship of the plaintiffs’ wetlands to
waters of the United States as follows:
The record here establishes that the unnamed ditch
running along the hypotenuse of the Carabells’
triangle-shaped property is separated from wetlands
only by a man-made berm or barrier. At its north-
eastern end, the ditch is connected to the Sutherland-
Oemig Drain, a drain that empties into the Auvase
Creek, which, in turn, empties into Lake St. Clair,
which connects to Lake Huron and Lake Erie. At its
southwestern end, the ditch is connected to other
ditches, which — like the Sutherland-Oemig Drain
BACCARAT FREMONT v. US ARMY CORPS 14109
— outlet into the Auvase Creek and eventually into
Lake St. Clair. The ditch, then, is connected on
either end to tributaries of “waters of the United
States” as defined in the regulations.
Id. at 708. The Sixth Circuit concluded that
[b]ecause the wetlands on the Carabells’ property are
separated from a tributary of “waters of the United
States” only by a man-made berm or barrier, they are
considered “adjacent wetlands” under § 328.3(a)(7).
As such, the wetlands at issue fall within the juris-
diction of the Corps for purposes of the CWA.
Id. at 708-09.
Like Baccarat, the Carabells argued that SWANCC modi-
fied Riverside Bayview Homes and limited the Corps’ juris-
diction over adjacent wetlands. The Sixth Circuit
emphatically rejected the argument:
In SWANCC . . . the Court did not alter the
Riverside-Bayiew holding. Indeed, while noting
Congress’s “unequivocal acquiescence to, and
approval of, the Corps’ regulations interpreting the
CWA to cover wetlands adjacent to navigable
waters,” the SWANCC Court did not decide any
issue with regard to “adjacent wetlands” under 33
C.F.R. § 328.3(a)(7).
391 F.3d at 709 (citation omitted).
[9] We note that even if the CWA did require demonstra-
tion of a significant nexus on a case-by-case basis (which it
does not), there is no question that one exists here. In making
its jurisdictional determination, the Corps found (1) that the
wetlands on the site are in reasonable proximity to the
ACFCD flood control channels; (2) that the wetlands serve
14110 BACCARAT FREMONT v. US ARMY CORPS
important functions that contribute to the aquatic environment
in general and to the nearby tidal waters in particular; (3) that
the wetlands’ functions are particularly important given the
reduction of wetlands in the San Francisco Bay area; (4) that
the wetlands are within the 100 year floodplain of tidal
waters; and (5) that the wetlands are part of a hydric soil unit
that is contiguous with the area covered by tidal waters. Even
viewing the evidence in the light most favorable to Baccarat,
we cannot hold that these findings are arbitrary or capricious,
as would be required to set them aside under the APA. Marsh,
490 U.S. at 376-77. Taken together, the Corps’ findings
would be more than sufficient to establish a significant nexus
between the wetlands on the site and the flood control chan-
nels, were such a showing required.
Conclusion
In Riverside Bayview Homes, the Supreme Court upheld
the Corps’ exercise of jurisdiction over adjacent wetlands as
defined in 33 C.F.R. § 328.3(c). SWANCC did not modify
Riverside Bayview Homes. The Corps’ jurisdiction over wet-
lands falling within the adjacency clause in 33 C.F.R.
§ 328.3(a)(7) does not depend on the existence of a significant
hydrological or ecological connection between the particular
wetlands at issue and waters of the United States. Since there
is no genuine issue of material fact in dispute as to whether
the wetlands on the site fall within the Corps’ jurisdiction, we
affirm the district court’s grant of summary judgment.
AFFIRMED.