Wetlands, waterfowl, and the menace of Mr. Wilson: commerce clause jurisprudence and the limits of federal regulation.

I. INTRODUCTION

To some, James J. Wilson is "a conscientious, environmentally sensitive" builder of planned communities known for their parks, scenic trails, and substantial open space.(1) One of his most recent developments, St. Charles, in Charles County, Maryland, even provided for the preservation of seventy-five acres of wetlands.(2) "In my experience with developers all over America, I have met few who have as much concern for the environment as Jim Wilson," commented one of his colleagues.(3)

To others, however, Wilson was a menace to the environment, a greedy developer who, in his lust for profit, "wantonly destroy[ed]"(4) approximately fifty acres of wetlands that were "very critical to the continued health of the Potomac River watershed and the Chesapeake Bay."(5) Wilson began the development of St. Charles in 1976, at which time the U.S. Army Corps of Engineers (the Corps) determined that "[t]he construction of St. Charles [C]ommunities will have no impact on our area of responsibility."(6) Fourteen years later, after a significant expansion of the Corps's asserted jurisdiction over wetlands,(7) federal officials thought otherwise. Wilson was notified to cease construction on areas determined to be jurisdictional wetlands. Wilson complied, but turned around and slapped the federal government with a lawsuit demanding compensation for the regulatory taking of his land.(8)

In 1995, Wilson and his company, Interstate General Company (IGC), were indicted on four felony and misdemeanor counts for filling wetlands w without a federal permit between 1988 and 1993. Wilson's "egregious conduct"(9) made him an environmental criminal. "This case shows that wetlands are critical environmental resources," declared Environmental Protection Agency Regional Administrator W. Michael McCabe, adding "[t]he American people will not tolerate reckless lawbreaking, especially by those who know the rules."(10)

After a seven-week trial, Wilson and IGC were found guilty of "knowingly discharging fill and excavated material into wetlands of the United States"(11) in violation of section 404 of the Clean Water Act.(12) On June 17, 1996, a federal judge sentenced Wilson to 21 months in prison and imposed a $1 million fine.(13)

Wilson's conviction did not stand for long. On appeal, Wilson alleged that the regulations promulgated by the U.S. Army Corps of Engineers to regulate wetlands were invalid. In particular, Wilson charged that the Corps did not have jurisdiction over all wetlands that merely "could affect" interstate commerce,(14) as this regulation implied a "limitless view of federal jurisdiction."(15) Regulatory authority of such a broad scope, Wilson argued, would violate the Supreme Court's ruling in United States v. Lopez,(16) which reaffirmed the presence of constitutional limits of federal regulatory jurisdiction.(17) The Court of Appeals for the Fourth Circuit agreed, finding that the regulation was "unauthorized by the Clean Water Act as limited by the Commerce Clause."(18) The Corps's regulations defined "waters of the United States' to include intrastate waters that need have nothing to do with navigable or interstate waters" and therefore "expand[ed] the statutory phrase ... beyond its definitional limit."(19) In other words, the Corps did not have jurisdiction over the parcels that Wilson drained for his development. His conviction was reversed and remanded to the district court for a new trial.(20)

United States v. Wilson was not the first time a federal appeals court considered whether isolated wetlands could be regulated by Congress under the Commerce Clause,(21) and it is unlikely to be the last.(22) The federal wetlands regulations promulgated under section 404 of the Clean Water Act(23) have been one of the more contentious areas of federal environmental policy for the past several years, spawning substantial litigation(24) and political controversy.(25) Lopez is one of several recent decisions indicating that the Supreme Court will actively enforce constitutional limits on federal regulatory authority.(26) This creates an opportunity for those who wish to restrict the reach of federal environmental regulations.(27)

In the wake of the Lopez decision, commentators noted that federal wetlands regulation was one of the federal environmental programs most vulnerable to a Commerce Clause challenge.(28) Although most of the courts that have considered Commerce Clause challenges to section 404 have upheld the Corps's regulations, no federal appeals court has given substantial attention to the matter since the Lopez decision in 1995.(29) The Wilson decision, however, assuming that the reach of federal wetland regulations is constrained by the Commerce Clause, conflicts with prior appeals court holdings on this issue. Thus, the circuits appear to be split on the question of whether the regulation of isolated wetlands is within the scope of Congress's Commerce Clause power.

The purpose of this Article is to assess the extent to which the Commerce Clause doctrine explicit and implicit in the Lopez decision limits the federal government's constitutional authority to regulate wetlands, particularly those wetlands that are isolated or not otherwise near or adjacent to a navigable water of the United States. There is little doubt, as Richard Lazarus noted, that the current wetland regulations, as written, are "clearly out of bounds post-Lopez."(30) The relevant question is thus whether the dubious constitutional validity of the Corps's regulation is an artifact of its loose wording, or a function of what the Corps is seeking to accomplish.(31)

In addition, there is reason to conclude that for some judges and justices, deciding Commerce Clause cases is not purely a matter of interpreting the relevant constitutional text and history; Commerce Clause jurisprudence is no longer based upon the plain meaning of Article I, section 8 of the Constitution, if it ever was. Thus, strong textual arguments for scaling back federal power alone may be insufficient to convince a majority of the present Court to invalidate a prominent federal program. As Justice Kennedy noted in his Lopez concurrence, a sharp departure from post-New Deal jurisprudence would upset settled expectations.(32) The fact that few federal courts have taken Lopez as a green light to question the constitutional legitimacy of well-established federal programs suggests some courts believe "the court as an institution and the legal system as a whole have an immense stake in the stability of our Commerce Clause jurisprudence as it has evolved to this point."(33) Therefore, the practical impact of limiting federal jurisdiction over wetlands bears on whether such limits will be found by the courts. Whether such practical considerations form the basis of a principled decision or not, they are clearly relevant to the decision makers in many courtrooms.(34) Thus, this Article also questions whether constraining the federal government's regulatory authority will compromise wetland conservation efforts.

Part II of this Article briefly reviews the Supreme Court's Commerce Clause jurisprudence culminating in the Lopez decision and its subsequent application by federal courts. Part III provides background on wetlands a nd the evolution of federal regulatory efforts to protect these valued environmental resources. Part IV applies the Commerce Clause tests explicit and implicit in Lopez to the regulation of wetlands by the federal government. Finally, Part V assesses the likely environmental impact of restricting the federal government's ability to regulate wetlands, and it suggests that limiting wetlands regulation under Lopez, as was done in Wilson, need not have dire ecological consequences and could even yield environmental improvements.

II. THE INTERSTATE COMMERCE CLAUSE

It is a fundamental principle of constitutional law that "[t]he Constitution creates a Federal Government of enumerated powers."(35) Because the legitimacy of the federal government rests upon the consent of the governed, the federal government only has those powers that have been delegated to it by the people. Indeed, the basis of judicial review of congressional statutes is premised on the fact that the "powers of the legislature are defined and limited; and that those limits may not be mistaken, or forgotten, the [C]onstitution is written."(36)

Article I of the Constitution vests Congress with substantial, albeit limited, powers. Perhaps the most expansive power delegated to Congress is the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."(37) This clause, commonly known as the "Commerce Clause," could perhaps be better termed the "Interstate Commerce Clause," as it vests Congress with the power to regulate commerce "among the several States," and not commerce generally.(38) Indeed, if the regulation of all commerce had been the Framers' intent, it would have been simple for them to spare the additional words that characterize the sorts of commerce that Congress could regulate.(39) "The Commerce Clause is ... clear and cannot be interpreted as a grant of authority without limits," notes Judge Alex Kozinski.(40) Nonetheless, until 1995, the Commerce Clause had been read as the grant of near-plenary power for over half a century.

Despite its clear textual limitations, the Commerce Clause is postulated as the source of Congress's power to regulate most environmental matters. Revisiting the scope of the Commerce Clause power therefore means questioning whether Congress has the power to enact environmental regulations at its discretion.(41) Since the Supreme Court's decision in Lopez, there have been several Commerce Clause challenges to various environmental laws.(42) Wilson, however, is the only case to date in which a federal appeals court has looked favorably on a Commerce Clause challenge to environmental regulations.(43)

A. Pre-Lopez Development

The Supreme Court first addressed the scope of the Commerce Clause in Gibbons v. Ogden in 1824.(44) At issue was whether a federal statute licensing ships in the "coastal trade" preempted New York's conferral of an exclusive franchise for steamship travel between New York and New Jersey. Chief Justice Marshall, writing for the Court, invalidated the New York statute and held that the Commerce Clause grants Congress "the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution."(45) Federal regulation of interstate commerce preempted state efforts within that sphere.

While this statement is often taken as evidence that the Commerce Clause was always read in an expansive manner,(46) Marshall was clear that the Commerce Clause bestowed only a limited power on Congress. There is an "immense mass of legislation, which embraces every thing within the territory of a State, not surrendered to the general government."(47) Among those laws the Gibbons Court cited as remaining in state hands are "[i]nspection laws, quarantine laws, health laws of every description, as well as laws for regulating the internal commerce of a State."(48)

The Gibbons Court made clear that Congress's power is limited by the explicit text of Article I, section 8. The identification of "commerce" meant that noncommercial activities could not be regulated through that power; the qualification of what types of commerce would be subject to regulation implied that other sorts of commerce would be beyond Congress's reach.(49) "Comprehensive as the word `among' is, it may very properly be restricted to that commerce which concerns more States than one."(50)

The Court had few opportunities to revisit the extent of the Commerce Clause in the following decades. The first case in which the Court invalidated a federal law for exceeding Congress's Commerce Clause power was not until 1870.(51) In the following decades the Court actively policed what it perceived to be the outer bounds of Congress's authority as defined in Gibbons.(52) After the turn of the century, however, the Court began to stretch the edges of the Commerce Clause power, upholding Congress's authority to regulate intrastate rail carriers,(53) stockyards,(54) and labor strikes.(55)

The true turning point in the Court's approach to the Commerce Clause came in NLRB v. Jones & Laughlin Steel Corp., when the Court concluded that Congress could regulate intrastate activities that "have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions."(56) Jones & Laughlin was a large, national, integrated steel producer. Therefore, the Court reasoned, work stoppages and labor conflicts could have a substantial impact on interstate commerce. After Jones & Laughlin, the Court would uphold the regulation of activities that affect commerce, even if the activities were not commercial. While the Court insisted that there were still activities beyond Congress's reach,(57) the case marked the end of the Court's restraint on congressional assertion of power under Article I, section 8.

Indeed, after Jones & Laughlin, there was little, if anything, that the Court would find beyond Congress's reach. In Wickard v. Filburn(58) the Supreme Court upheld the federal prosecution of a farmer growing wheat on his own farm for his own family's consumption in violation of federal agricultural production quotas. Because of interdependent national markets, the Court found that the federal government could regulate the farmer's noncommercial activity--growing wheat for his family--because it affected the amount of wheat he grew for sale in interstate commerce. Adopting the "aggregation principle," the Court deemed that even when a noncommercial activity's impact on commerce is by itself trivial, it can be regulated if the activity "taken together with that of many others similarly situated, is far from trivial."(59) That the farmer's growing of wheat for his family had insignificant impacts on interstate commerce was irrelevant, the Court reasoned, because the aggregate impact of all farmers growing wheat for their own consumption would be substantial. The doctrine announced in Wickard created a basis for congressional authority with "no stopping point."(60) Indeed, it would be hard to devise a more expansive test without wholly abandoning any pretense that Congress's Commerce Clause power is limited.(61)

Despite the admonitions in Jones & Laughlin and subsequent cases about the limits of the Commerce Clause power, the Court upheld one congressional enactment after another.(62) By the early 19908, the statement that Congress could conceivably exceed its delegated power seemed to be an empty mantra.(63) Indeed, the Court's consistent deference to Congress's assertion of authority from the New Deal until Lopez suggests that truth-in-labeling would require calling the Commerce Clause the "Hey, you-can-do-whatever-you-feel-like Clause."(64)

B. United States v. Lopez

In 1995 the Supreme Court found an explicit limitation on Congress's Commerce Clause power for the first time in over fifty years. At issue in United States v. Lopez was the Gun-Free School Zones Act of 1990 (GFSZA),(65) a federal statute prohibiting the knowing possession of a gun within one thousand feet of a school. Alfonso Lopez, Jr., a high school student in San Antonio, Texas, was arrested in 1992 for carrying a concealed handgun to school and subsequently prosecuted under the GFSZA even though Texas law prohibited gun possession on school grounds.(66) His conviction was overturned by the Fifth Circuit Court of Appeals,(67) and the Supreme Court affirmed. The Court's decision invalidating the GFSZA was subsequently greeted, and condemned, as a significant shift in Commerce Clause jurisprudence.(68)

Writing for the majority, Chief Justice Rehnquist stressed that the decision was based on the founding principle that "the Constitution creates a Federal government of enumerated powers."(69) Congress has no plenary power to regulate the affairs of the nation as its members see fit. No matter how compelling the perceived need for federal action, Congress only has those powers explicitly delegated to it in Article I of the Constitution.(70)

While Lopez marked a clear departure from earlier decisions, in tone and result, Chief Justice Rehnquist stressed that even cases upholding congressional exercises of Commerce Clause power acknowledged that power's limits.(71) Reviewing the Court's Commerce Clause decisions, he noted that "the pattern is clear. Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained."(72) The GFSZA, however, "neither regulates a commercial activity nor contains a requirement that the possession be connected in any way to interstate commerce," and therefore exceeds Congress's power "[t]o regulate Commerce.(73)

The Court based its decision on a narrow reading of the traditional three-part test to determine whether regulating a given activity falls within Congress's power to regulate commerce. Under this test, Congress may regulate the "channels of interstate commerce" and their use, the instrumentalities of interstate commerce, and those activities that "substantially affect" interstate commerce.(74) Possession of a gun in a school zone, even if that gun had traveled in interstate commerce, fails to meet this test.

For most cases in which federal jurisdiction under the Commerce Clause is challenged, the "substantial effects" part of the test will be the most significant. Even a radical Supreme Court would be unlikely to invalidate regulations covering the channels or instrumentalities of commerce. The explicit question to be addressed in most future Commerce Clause cases is whether given activities--from the burning of homes(75) and the filling of wetlands to hazardous waste cleanup(76) and violence against women(77)--have a substantial effect on interstate commerce. But assessing what does or does not substantially affect commercial activity is not the only issue. The majority and concurring opinions both stress a second concern that appears to be of equal import in the Court's recent jurisprudence: preventing congressional interference with "traditional state functions" so as to preserve state autonomy within the federal system. Thus, a second question to be addressed in future Commerce Clause cases is the extent to which congressional enactments, and the subsequent edicts of regulatory agencies, infringe upon the prerogatives of state governments to handle their own affairs.

1. "Substantially Affects"

The pivotal prong in the Court's announced test in Lopez--whether an activity "substantially affects" interstate commerce--is, to say the least, incredibly elastic. There are few things that do not affect interstate commerce in some fashion, particularly if one aggregates the impacts of individual activities with otherwise insignificant effects, as the Court did in Wickard v. Filburn.(78) If the only question is whether a particular class of activities impacts interstate economic activity there is hardly anything that falls outside of Congress's authority; "Congress could regulate not only all violent crime, but all activities that might lead to violent crime, regardless of how tenuously they relate to interstate commerce."(79) As the dissent noted and as the government stressed to the Court, the potential aggregate economic impacts of allowing handguns in schools are quite large,(80) Guns in schools can "undermine the quality of education in our Nation's classrooms," which in turn reduces the future productive capacity of students, which substantially affects interstate commerce.(81)

Yet this approach proves too much and destroys the notion of enumerated powers. After all, similar exercises could extend Congress's Commerce Clause authority to just about anything.(82) As the majority noted, "if we were to accept the Government's arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate."(83) And that is the whole point of the Lopez test--identifying a line of power that Congress may not cross,(84) The only problem is that the "substantially affects" test, on its face, does not demarcate a clear line.

Some have argued that the answer to this dilemma may be resolved by the application of "fuzzy logic."(85) As noted by Deborah Jones Merritt, some things clearly affect interstate commerce more than others, but the exact position of this line is unclear, even for the staunchest originalist.(86) Just as it is a relatively facile intellectual game to trace the aggregate economic impacts of any activity the federal government could seek to regulate, the concept of "commerce," or that which affects it, is infinitely expandable. The distinctions are not absolute, but matters of degree. "Interstate commerce, like birds and baldness, is not a crisp set."(87)

Judicial rules, however, require making fine distinctions that, at least in appearance, clearly demarcate where one realm ends and another begins. The fuzzy nature of the line between what is or is not subject to the Commerce Clause power does not prevent drawing the line, but it does force the Court to provide a broader explanation than simply declaring that interstate commerce can be regulated under Article I, section 8 and everything else cannot. Hence, the Court provides numerous fuzzy rules as indications of how to draw the line between what is legitimately regulated as affecting commerce, and what is not.(88)

In Lopez, the Court did not measure whether gun possession in school zones has a substantial effect on interstate commerce by attempting to tally the aggregate economic impact of guns in schools around the country. As gun possession in school zones is not an economic activity, the Court refused to engage in Wickard-style aggregation.(89) Nor did the Court seek to outline "a constitutional gate that would open once a prescribed number of interstate dollars had passed."(90) "Showing that something affects the national economy does not suffice to show that it has a substantial effect on interstate commerce."(91) Rather, the Court was more concerned with qualitative issues: the nature of the regulation and regulated activities in question.

In invalidating the GFSZA, the Court stressed the noneconomic nature of gun possession in a school zone.(92) Chief Justice Rehnquist's opinion notes that in prior cases the Court "upheld a wide variety of congressional Acts regulating intrastate economic activity," but the GFSZA "by its terms has nothing to do with `commerce' or any sort of economic enterprise, however broadly one might define those terms."(93) Justice Kennedy made the same point in his concurrence that "neither the actors nor their conduct has a commercial character, and neither the purposes nor the design of the statute has an evident commercial nexus."(94) The "substantial affects" test is therefore best understood not as a quantitative measure of a given activity's economic impact, but a more qualitative, and less precise, inquiry into the nature of the regulation and regulated activity at issue. This not only entails questioning whether the activity is commercial, but also the regulation's impact on the federalist system. If the challenged rule is "not an essential part of a larger regulation of economic activity," then it is less likely to pass constitutional muster under Lopez.(95)

2. Traditional State Functions

Although the test announced in the majority opinion focused on the relationship between the regulated item or activity and interstate commerce, the Court did not exactly apply it to the facts at issue.(96) Lurking in the background of the majority and concurring opinions is a concern for the potential impact of an unrestrained Commerce Clause on federal-state relations. Lopez can be read as a decision that seeks to defend state sovereignty.(97) Banning guns near schools was too much of an intrusion upon areas traditionally handled by state governments. Therefore, implicit in Lopez is a second, potentially more important question than the commercial nature of a given activity: Does the federal regulation in question intrude upon "traditional state functions"? If so, the regulation is more likely to be struck down. This may be the most important fuzzy rule for future Commerce Clause cases.

From this standpoint, Lopez is best viewed as part of the Supreme Court's recent federalist revival.(98) At a fundamental level, federalism and Commerce Clause cases address the same issue. As Justice O'Connor noted in New York v. United States,(99) constitutional inquiries as to whether sovereign powers have been granted to the federal government under the Constitution, or are retained by the states, are "mirror images" of the same question,(100) "If a power is delegated to Congress in the Constitution, the Tenth Amendment expressly disclaims any reservation of that power to the States; if a power is an attribute of state sovereignty reserved by the Tenth Amendment, it is necessarily a power the Constitution has not conferred on Congress."(101)

Thus, insofar as the Court finds limitations on federal authority to regulate matters of state or local concern, it reinforces the dual sovereignty of the federal system.(102) This point was explicit in Justice Kennedy's concurrence: "Were the Federal Government to take over the regulation of entire areas of traditional state concern, areas having nothing to do with the regulation of commercial activities, the boundaries between the spheres of federal and state authority would blur and political responsibility would become illusory."(103) The majority also recalled that even in NLRB v. Jones & Laughlin Steel Corp.,(104) decided at the outset of truly expansive Commerce Clause interpretation, the Commerce Clause was to be interpreted "in the light of our dual system of government." To hold otherwise "would effectually obliterate the distinction between what is national and what is local and create a completely centralized government."(105) A plenary Commerce Clause power would completely eviscerate the governmental design that the founders sought to create. Thus, for federalism to be a meaningful concept and for individual liberty to be protected, the Court recognized that Congress's Commerce Clause power could not operate without constraint.

In the context of the GFSZA, the Court found it significant that "[u]nder our federal system, the `states possess primary authority for defining and enforcing the criminal law.'"(106) This was an even larger concern for Justices Kennedy and O'Connor. As Justice Kennedy noted, "it is well established that education is a traditional concern of the states."(107) Equally important, the vast majority of states, over forty, already outlawed gun possession in or near schools.(108) Insofar as gun possession in school zones is a problem, states fulfilled their role within the federal system by developing means of addressing the problem. Federal intervention, through the GFSZA, can only impede this process. "The statute now before us forecloses the States from experimenting and exercising their own judgment in an area to which States lay claim by right of history and expertise, and it does so by regulating an activity beyond the realm of commerce in the ordinary and usual sense of that term."(109) Undue interference in matters traditionally left to the states "contradicts the federal balance the Framers designed and that this Court is obliged to enforce."(110)

What exactly constitutes a traditional state function is unclear, though the Court's decisions provide some guidance on the matter. In Lopez, the majority and concurrence identified crime and education as areas where states have typically dominated.(111) Even the government allowed that the arguments made in defense of the GFSZA could support federal regulation of marriage, divorce, child custody, and other issues traditionally left to the states.(112) Not only are family law and education areas in which states have played the dominant policy role, they also fail to generate substantial interstate pressures on other states to modify their policies.(113) Property law, including title, transfer, and inheritance, has also been recognized as "an area traditionally left to the States."(114) More important for the purposes of this Article, in 1982 the Supreme Court declared regulation of land use a "quintessential state activity."(115)

Typically, as Justice Kennedy noted, granting states the leeway to set their own policies will spur a competitive dynamic through which states experiment and compete to provide the mix of services and amenities desired by present and prospective residents. There is usually substantial pressure to discard burdensome regulations that produce minimal benefits.(116) In the context of crime prevention, however, federalism "cuts the opposite way" as states benefit from increasing, not decreasing, the stringency of criminal laws.(117) Whereas tightening economic regulations theoretically risks driving industry to other states,(118) tightening criminal codes may encourage more law-abiding families to migrate to the state and encourage criminals (and perhaps some civil libertarians) to migrate to states with lower standards.(119) In other areas, however, there is a concern that the Court not invalidate federal intervention in an area where stateled efforts are impracticable.(120)

Thus, it appears that the Court wishes to protect state prerogatives in those areas in which they have traditionally held sway as long as doing so does not unleash competitive pressures that could frustrate the protection of important national interests. The GFSZA was struck down because failing to make gun possession in social studies class a federal crime does not threaten an epidemic of schoolyard violence. Invalidating other federal statutes, however, may create powerful obstacles to protecting certain interests, and in those cases the Court may be less eager to curtail the Commerce Clause's reach.

C. Application of Lopez by Federal Courts

Since 1995, only one federal appeals court invalidated a federal statute based upon Lopez. Appellate courts have upheld federal laws prohibiting, among other things, carjacking,(121) arson,(122) and blocking access to abortion clinics.(123) They also upheld federal programs governing, among other things, the destruction of endangered species habitat(124) and hazardous waste cleanup.(125) To date, Subtitle C of the Violence Against Women Act is the only federal law felled by an appellate court under Lopez.(126) Although most "courts have resisted urgings to extend Lopez beyond [sections] 922(q),"(127) it would be wrong to presume that Lopez is a dead letter. Few courts have actually engaged in the sort of analysis that Lopez explicitly requires.(128)

While courts have been reticent to extend the logic of Lopez into new areas, a handful of appellate decisions, including Wilson, have relied upon Lopez to limit the jurisdiction of federal authority under otherwise constitutional statutes. In United States v. Denalli(129) and United States v. Pappadopoulos,(130) the Eleventh and Ninth Circuits, respectively, overturned convictions under the federal arson statute(131) because the properties burned in each case were private homes. As the Ninth Circuit reasoned, "an essential element of the crime of arson under section 844(i) is that the property was `used in' or `used in any activity affecting' interstate or foreign commerce."(132) Even though the home in question "received natural gas from out-of-state sources," this connection was insufficient to create the required nexus with interstate commerce.(133) Similarly, in Denalli, the mere presence of a home office was insufficient to grant federal jurisdiction over the home.(134) Yet, just as Wilson left the Clean Water Act fully intact, the statute was not invalidated in either of these cases. Federal jurisdiction under the statute, however, was limited by the reach of the Commerce Clause.

As more cases work their way through the federal court system, the primary impact of Lopez may be a narrower interpretation of federal jurisdiction under existing statutes, rather than "the wholesale invalidation of portions of the U.S. Code."(135) This is particularly true in the case of environmental law where it is typical for Congress to enact sweeping statutes with the potential to encompass all manner of activities, from those that are intimately intertwined in interstate commerce, such as the transportation of hazardous materials across state lines, to those that are quite parochial in nature, such as the regulation of an isolated wetland in the center of a large western state. The application of Lopez in this context does not necessarily call for invalidating these laws as much as it might call for reining in the interpretations that various federal agencies have given them.(136) This is precisely the effect that the Lopez decision should have on section 404 of the Clean Water Act.

III. FEDERAL WETLANDS REGULATION

Federal regulation of wetlands did not begin until the mid-1970s. Prior to that time, most wetland protection was provided by private parties or state and local regulators.(137) The first state wetland protection statutes were passed in the 1960s to protect coastal wetlands.(138) Long before then, however, private organizations, such as the National Audubon Society and Ducks Unlimited, sought to protect those wetlands that were important for waterfowl and other species.(139)

Despite these early conservation efforts, widespread appreciation for the ecological value of most wetlands is a relatively recent phenomenon.(140) Today's wetlands are the swamps, bogs, and fens of yesteryear.(141) At the turn of the century, the Supreme Court characterized wetlands as "the cause of malarial and malignant fevers" and noted that "the police power is never more legitimately exercised than in removing such nuisances."(142) Not only were wetlands not valued, they were actively destroyed. The country "had its time when it was draining everything in sight to make communities healthful."(143)

Indeed, for many decades it was active government policy to destroy wetlands.(144) Under the Swamp Land Act of 1849, wetlands were transferred into private hands under the condition that the lands were drained.(145) Agricultural subsidies, subsidized disaster insurance, and Army Corps of Engineers channelization projects were all substantial sources of wetland loss. According to the National Wildlife Federation, "[m]uch of the money for draining and diking" Mississippi River bottomlands came from government programs.(146) By some estimates "30 percent of the loss of forested wetlands in the lower Mississippi Valley resulted from private conversions encouraged by federal flood-control projects."(147)

As a result of these policies, and America's development, millions of acres of wetlands were destroyed. For over two centuries, wetlands were filled or drained to build homes, plant crops, construct infrastructure and provide various amenities. According to the U.S. Fish and Wildlife Service, over half of the wetlands in the continental United States have been lost since European settlers arrived on the continent.(148) Official estimates placed the amount of wetlands in the United States at just over one million acres in 1985.(149) The development of wetlands had both benefits and costs. Had there been a "no net loss" of wetlands policy in place at the time of the nation's founding, California would be without Mission Bay and Marina Del Ray, and Washington, D.C. would be a hamlet.(150)

A. What Is a Wetland (and Why Do We Care)?

Wetlands are conventionally defined as lands that are "periodically or seasonally wet."(151) The National Academy of Sciences defines a wetland as "an ecosystem that depends on constant or recurrent, shallow inundation or saturation at or near the surface of the substrate. The minimum essential characteristics of a wetland are recurrent, sustained inundation or saturation.... Common diagnostic features of wetlands are hydric soils and hydrophytic vegetation."(152) The official regulatory definition is similar. According to the U.S. Army Corps of Engineers and the Environmental Protection Agency, the two agencies with primary federal responsibility for wetland regulation, wetlands are "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."(153) In other words, the official definition of a wetland focuses on three variables: hydrology, vegetation, and soil.(154)

Wetlands come in many varieties and are found in every state. Types of wetlands range from the saltwater marshes along the Gulf of Mexico and Florida's mangrove swamps, to South Carolina pocosins and the Alaskan tundra, to prairie potholes in the upper Midwest and the bottomland hardwood swamps of the lower Mississippi River Valley. While each is different, all provide ecological values of some sort. Among the more important values that wetlands can provide are water purification, groundwater recharge, erosion and sediment control, flood mitigation, and species habitat.(155) Characterized as "America's most biologically-productive" ecosystems,(156) wetlands provide food for aquatic animals, feeding and breeding areas for shellfish and fish, and nesting and wintering grounds for ducks and other waterfowl. Artificial wetlands are even used to purify wastewater and mine wastes.(157) Of course, many wetlands have substantial recreational and aesthetic values as well. What each wetland provides is largely a function of its particular condition at a given point in time and its location.(158)

Estimates of the amount of wetland acreage in the United States and current wetland trends vary greatly.(159) It is commonly estimated that the nation's acreage of wetlands has been cut in half since Colonial times.(160) The U.S. Fish and Wildlife Service estimates that approximately 220 million acres of wetlands existed in the 1600s(161) and that approximately 101 million acres of wetlands remained in 1995.(162) The most recent data reported by federal agencies indicates that gross wetland losses are approximately 141,000 to 156,000 acres per year.(163) By contrast, this is substantially lower than the loss figures typically cited by environmental activists.(164) Net wetland loss estimates, which incorporate the substantial amount of wetland restoration and creation that occurs each year, range from approximately 80,000 acres per year(165) to "no net loss" of wetlands,(166) the official policy goal adopted by the Bush Administration in 1989.(167) Most remaining wetlands in the United States are palustrine, or freshwater, wetlands. It is estimated that only five percent of wetlands are estuarine, or saltwater, wetlands.

Some of the disparity in wetland acreage and trend data is due to the lack of a uniform federal definition of what constitutes a wetland.(168) What the Corps of Engineers considers to be a wetland for regulatory purposes is not the same thing as what the Fish and Wildlife Service considers to be a wetland for its programs.(169) The lack of a single federal definition should be no surprise. "At least 36 federal agencies, to varying degrees, conducted wetland-related activities" since 1990, according to the General Accounting Office.(170) The difficulty in arriving at a universal definition is compounded by the great differences in wetland types and the difficulties in determining precisely where a given wetland ends and the uplands begin. In addition, standard methods of determining what is or is not a wetland for regulatory purposes, such as the number of days of soil inundation or saturation, are "a poor basis for characterizing an area as a wetland," as they are merely proxies for the ecological characteristics that conservationists seek to protect.(171)

While scientists have a fairly consistent idea of what lands perform wetland functions, efforts to create a single, uniform wetland definition for use in federal regulatory programs have been particularly controversial. Landowners and those subject to wetlands regulation seek a brightline definition of "wetland." However, "[w]etlands are characterized by a number of features that pose problems for any attempt to develop highly quantitative nationwide delineation criteria."(172) A definition that draws such a line, therefore, is likely to be overinclusive, underinclusive, or both.

For the purposes of conserving the ecological functions that wetlands can provide, the most effective wetlands definitions will be those that reflect regional ecological conditions. To maximize the ecological value of wetland conservation efforts, wetland definitions "should be tailored to each state or subregion within the state to better protect individual needs of varying wetland types."(173) Wetlands vary from place to place. "What is considered wet in one area of the nation, such as the arid southwest United States, may be relatively dry for another area, such as Louisiana."(174) Additionally, "regional variations in rainfall and relative wetness and location are extremely important to wetland functions and values."(175) The ecological value of a given wetland is largely a function of its particular characteristics and its location.(176) This is one of the reasons that different states have adopted different approaches to wetland conservation, and why it can be argued that state governments are better situated to conserve wetlands than federal agencies.(177) The fact that wetland values are so contingent upon their location and ecological context makes the creation of an official nation-wide definition particularly problematic. Yet as difficult as this question is, it is distinct from the question of which wetlands are legitimately subject to federal jurisdiction under the Commerce Clause.

B. From Rivers and Harbors to Riverside Bayview Homes

For decades, the primary regulatory responsibility of the U.S. Army Corps of Engineers was to regulate the dredging and filling of waterways used in interstate commerce, pursuant to section 10 of the Rivers and Harbors Act of 1899.(178) Placing structures or fill material in or over navigable water is prohibited without a permit from the Corps.(179) This permitting process later became the model for wetland permitting under the Clean Water Act.(180)

In the 1960s and early 1970s, water pollution became an increasing national concern. In response, the Corps expanded its review of section 10 permit applications to consider environmental and other nonnavigational concerns.(181) More significantly, Congress passed amendments to the Federal Water Pollution Control Act, commonly referred to as the "Clean Water Act" (CWA), in 1972.(182) The purpose of the CWA is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters."(183) In particular, the 1972 Act sought to control water pollution "at its source," and therefore expanded federal regulatory authority over potentially polluting activities.(184)

Under the CWA, the "discharge of any pollutant" into navigable waters of the United States without a federal permit is prohibited.(185) Section 404 authorizes the Army Corps of Engineers to issue permits "for the discharge of dredged or fill material into the navigable waters at specified disposal sites."(186) The term "pollutant" includes dredged material, rock, sand, and solid and industrial waste.(187) "Navigable waters" are defined simply as "the waters of the United States.(188) This language has been interpreted as an indication that the Corps's jurisdiction over "navigable waters" is substantially broader under the CWA than under the Rivers and Harbors Act.(189)

While the CWA clearly broadened the Corps's authority, it was anything but clear at the time that the federal government had established federal authority over wetlands. Not even the U.S. Army Corps of Engineers believed that the 1972 law empowered them to regulate the filling of wetlands.(190) As former wetland regulator Bernard Goode noted: "If Congress meant in 1972 for section 404 to protect wetlands, it kept that secret to itself."(191) The Corps's regulation promulgated under the Clean Water Act reflects this understanding.(192)

Environmental groups and a federal court saw what the Corps did not. In 1974, the Natural Resources Defense Council (NRDC) sued the Corps for failing to assert jurisdiction over wetlands under the 1972 law. The term "navigable water," NRDC argued, encompassed all waters, including wetlands, irrespective of whether they were truly navigable. In 1975, the United States District Court for the District of Columbia agreed, holding that Congress "asserted federal jurisdiction over the nation's waters to the maximum extent permissible under the Commerce Clause of the Constitution."(193) The Corps declined to appeal.

Following NRDC v. Callaway, the Corps issued interim regulations expanding the definition of "waters" to include nonnavigable waters, the use of which could impact interstate commerce.(194) The definitions were slightly modified over the following decade, to conform with those of EPA,(195) and promulgated. The final regulations, as amended in 1982, define "waters of the United States" to include all waters used for interstate commerce,(196) all interstate waters and wetlands,"(197) all tributaries or impoundments of such waters,(198) and, most significantly,

   [a]ll 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, degradation
   or destruction of which could affect interstate or foreign commerce
   including any such waters: (i) Which are or could be used by interstate or
   foreign travelers for recreational or other purposes; or (ii) From which
   fish or shellfish are or could be taken and sold in interstate or foreign
   commerce; or (iii) Which are used or could be used for industrial purpose
   by industries in interstate commerce.(199)

Finally, the definition also includes "wetlands adjacent to waters (other than waters that are themselves wetlands)."(200)

The new regulations amounted to a dramatic expansion of the Corps's authority to regulate wetlands and other nonnavigable waters significantly beyond what was contemplated when the Clean Water Act was passed in 1972. As approximately three-quarters of wetlands occur on private land,(201) this generated substantial opposition from farmers and other landowners who believed the new rules threatened their property rights.(202)

Despite the controversy, there was no consensus in Congress for reducing the Corps's authority or for enacting specific provisions concerning wetland protection. Thus when the CWA was amended in 1977, provisions were merely added exempting certain activities-such as ongoing farming, ranching, and timber harvesting-from regulation under section 404.(203) Efforts to create specific wetlands legislation failed.

Opponents of the Corps's expanded jurisdiction had no more luck in the courts than in Congress. In 1985 the Supreme Court considered a challenge to the validity of the Corps's expansive definition in United States v. Riverside Bayview Homes, Inc.(204) Riverside Bayview Homes challenged the validity of the Corps's assertion of jurisdiction over "wetlands adjacent to navigable bodies of water and their tributaries" claiming that such sweeping regulation was not authorized by the Clean Water Act.(205)

The Court rejected Riverside Bayview Homes's argument, finding that Congress sought "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 that term."(206) Citing the Corps's determination that navigable waters and adjacent wetlands are part of the same "aquatic system,"(207) the Court found that the Corps's "conclusion that adjacent wetlands are inseparably bound up with the `waters' of the United States" was a reasonable interpretation of its regulatory authority under the CWA.(208)

The Court's determination was buttressed by Congress's failure to modify section 404 when the CWA was amended in 1977.(209) Due to this failure to act "Congress acquiesced in the administrative construction" that had been promulgated in the wake of the Callaway decision.(210) Characterizing the debate over the 1977 amendments, the Court concluded as follows:

   [E]ven those who thought that the [Corps's] existing authority under
   [sections] 404 was too broad recognized (1) that the definition of
   "navigable waters" then in force for ... [sections] 404 was reasonably
   interpreted to include adjacent wetlands, (2) that the water quality
   concerns of the Clean Water Act demanded regulation of at least some
   discharges into wetlands, and (3) that whatever jurisdiction the Corps
   would retain over discharges of fill material after passage of the 1977
   legislation should extend to discharges into wetlands adjacent to any
   waters over which the Corps retained jurisdiction.(211)

While it upheld the Corps's jurisdiction over adjacent wetlands, the decision did not give the Corps carte blanche to regulate all wetlands. Explicitly unaddressed by the court in Riverside Bayview Homes was whether the Corps's authority extended to "wetlands not necessarily adjacent to other waters."(212)

C. Pre-Lopez Challenges to Federal Wetlands Regulation

As the Corps's section 404 jurisdiction expanded, constitutional challenges to the Corps's regulatory reach were inevitable. Although federal courts were generally deferential to assertions of federal power under the Commerce Clause, the use of this power to regulate isolated wetlands on private property remained controversial and Landowners took the Corps to court.

The first time a federal appellate court heard a Commerce Clause challenge to an application of section 404 was Hoffman Homes v. Administrator, Environmental Protection Agency (Hoffman Homes I).(213) Hoffman filled a small depression of less than one acre in preparation for building a housing development in Hoffman Estates, Illinois. Because the depression was lined with clay, rainwater collected in it, causing EPA to declare it an "intrastate wetland" even though the portion of Hoffman's land "had no surface or groundwater connection to any other body of water."(214) After EPA informed Hoffman that the depression was a wetland, Hoffman sought a permit from the Corps of Engineers, but was denied. In December 1987, EPA issued a Compliance Order requiring Hoffman to restore the wetland to its prior state, and shortly thereafter lodged an administrative complaint seeking full compliance and administrative penalties.(215)

Hoffman challenged EPA's jurisdiction over the parcel, charging that the wetland had no connection to interstate commerce and was beyond the federal government's regulatory reach. An administrative law judge agreed, but EPA's chief judicial officer did not, finding that the land had a "minimal, potential effect" on interstate commerce due to the potential use of the land by migratory birds.(216)

The Court of Appeals for the Seventh Circuit was unimpressed with EPA's argument that the potential use of an isolated wetland by migratory birds for nesting or feeding was sufficient to support jurisdiction under the Commerce Clause.(217) While Riverside Bayview Homes clearly accepted federal jurisdiction over wetlands adjacent to navigable waterways, isolated wetlands that "have no hydrological connection to any body of water" were a whole different matter.(218) Other than a theoretical impact on migratory birds, EPA could offer no explanation of how the filling of Hoffman's small wetland would affect interstate commerce.(219) Yet allowing the potential alighting of waterfowl to trigger federal jurisdiction would obliterate any limitation of the federal government's Commerce Clause power. "After all, what area of the United States is not a potential landing spot for migratory birds?," asked Judge Manion in the court's opinion.(220) The Commerce Clause confers substantial power, the Seventh Circuit ruled in 1992, but not so substantial as to permit an assertion of unlimited jurisdiction.

EPA sought a rehearing of the case, and the decision in Hoffman Homes I was vacated in favor of a narrower ruling.(221) This time around, the court held that EPA failed to produce substantial evidence that the wetland in question had an effect on interstate commerce, but upheld EPA's regulations and the use of migratory birds to assert jurisdiction. "After every April shower, not every temporary wet spot necessarily becomes subject to government control," the court ruled.(222) Rather, the federal government must simply document the use of the land in question by migratory birds or establish some other connection to interstate commerce.(223)

The Ninth Circuit Court of Appeals upheld an even more expansive interpretation of the federal government's ability to regulate wetlands under the Commerce Clause in the Leslie Salt cases.(224) Leslie Salt's property south of San Francisco contained several constructed pits used for crystallizing salt that, like Hoffman's land, would fill with water during the rainy season.(225) Additional modifications Leslie Salt made to its property resulted in "the creation of some wetland features" around the salt pits and the use of the pits as habitat by migratory birds.(226) When Leslie Salt later attempted to drain part of the land in 1985, the Corps intervened and sought to enjoin Leslie Salt's activities.

While the district court accepted Leslie Salt's argument that its land was beyond the Corps's jurisdiction, the Ninth Circuit reversed, holding simply that "[t]he commerce clause power, and thus the Clean Water Act, is broad enough to extend the [Corps's] jurisdiction to local waters which may provide habitat to migratory birds and endangered species."(227) On these grounds the case was remanded for a determination of "which parts of Leslie Salt's land had a sufficient connection to interstate commerce" to be under the jurisdiction of the Corps.(228) Because fifty-five species of migratory birds were said to use the seasonally ponded areas as habitat, the district court upheld the Corps's jurisdiction.(229) Leslie Salt appealed, but the Ninth Circuit refused to reconsider its prior holding that the occasional use of land by migratory birds could form the basis of federal regulatory jurisdiction under the Commerce Clause.(230) The Court acknowledged that "[t]he migratory bird rule certainly tests the limits of Congress's commerce powers and, some would argue, the bounds of reason."(231) "Nevertheless," it concluded, "given the broad sweep of the Commerce Clause, the holding in [Leslie Salt I] cannot be considered clearly erroneous on this ground."(232)

During the second Leslie Salt appeal, the Supreme Court handed down its decision in United States v. Lopez, prompting Leslie Salt's successor in interest, Cargill, to seek review by the Supreme Court in light of the newfound limits on Commerce Clause power. The Court, however, was not interested in revisiting the issue and denied certiorari. Justice Thomas dissented, noting that the Lopez decision had clear implications for wetlands regulations that the Court would eventually be forced to address.(233) Thomas wrote, "The point of Lopez was to explain that the activity on the land to be regulated must substantially affect interstate commerce before Congress can regulate it pursuant to its Commerce Clause power."(234) The migratory bird rule, he suggested, could not meet this test as the fact "that substantial interstate commerce depends on the continued existence of migratory birds does not give the Corps carte blanche authority to regulate every property migratory birds could use as habitat."(235) Whether his colleagues would agree with this assessment was left for another day.

IV. APPLICATION OF LOPEZ TEST TO FEDERAL WETLANDS REGULATION

At the time of Wilson's conviction, St. Charles consisted of 10,000 housing units, more than 30,000 residents, and covered some 4000 acres.(236) When completed, the development would cover over 9000 acres.(237) It is not surprising that a housing development of that size in Maryland contained lands that are periodically wet, if not wet all year round. Four parcels in particular were identified as wetlands on public documents and maps because they contained wetland characteristics including seasonal standing water, hydrologic soils, and hydrophytic plants.(238) Nonetheless, in 1988 the Army Corps of Engineers determined that the "wet woods" in the area "do not have a clear connection to interstate commerce" and therefore would not be regulated.(239) The federal government clearly felt otherwise in 1995 when it indicted Wilson and Interstate General Company (IGC) for violating section 404 of the Clean Water Act.

Wilson challenged the Corps's jurisdiction over the St. Charles development. St. Charles lies approximately 200 feet above sea level and is more than six miles from the Potomac River. The development is several hundred yards away from nearby creeks, which are themselves nonnavigable.(240) However, the government provided evidence that water from wetlands drained into ditches or intermittent streams(241) that eventually flowed into the Potomac River, itself a tributary of the Chesapeake Bay.(242) In effect, the government argued that because water from St. Charles eventually drained into tributaries of the Chesapeake Bay for part of the year, the lands were subject to federal jurisdiction.(243)

The government made no effort at trial to demonstrate that the wetlands drained by Wilson and IGC affect interstate commerce. In its regulations, the Corps asserts jurisdiction over all wetlands that merely "could affect" interstate commerce.(244) Thus, the government showed that beavers and other animals that rely upon wetlands are trapped for commercial purposes in Charles County, Maryland, and that filling some wetlands might affect the food supply of fish caught in navigable waters.(245) It was also shown that wetlands "such as" those at St. Charles perform various functions that affect commercial and sport fisheries.(246) The government did not, however, demonstrate that the specific wetlands drained by Wilson and IGC performed such functions.(247) Rather it asserted that Wilson's actions, when aggregated with similar actions on similarly situated wetlands, would have a substantial affect on interstate commerce.(248) On this basis, the government asserted that the Corps's regulatory authority applies to all wetlands in the Untied States.(249)

The Court of Appeals for the Fourth Circuit rejected the Corps's arguments.(250) Interpreting the Clean Water Act to preserve constitutional boundaries established by Lopez, the Court found that the Corps's regulations expanded "the statutory phrase `waters of the United States' beyond its definitional limit."(251) While the Fourth Circuit was willing to accept, for the sake of argument, that Congress could regulate "the discharge of pollutants into nonnavigable waters to the extent necessary to protect the use or potential use of navigable waters as channels or instrumentalities of interstate commerce," as well as those waters that themselves cross state boundaries, the Corps's regulations went well beyond these limits.(252)

The deficiency in the Corps's regulations was that they asserted jurisdiction over nonnavigable intrastate wetlands, including isolated wetlands, merely because of the unrealized potential that their use, degradation, or destruction might conceivably impact interstate commerce. "The regulation requires neither that the regulated activity have a substantial effect on interstate commerce, nor that the covered waters have any sort of nexus with navigable, or even interstate, waters."(253) In other words, the Corps sought to regulate every bit of land that could be classified as wet with little regard for whether there was a demonstrated impact on interstate commerce. This policy was "left totally exposed" by the Supreme Court's Lopez decision, for it denied the existence of jurisdictional limits that the Court insisted are necessary.(254)

In the wake of Wilson, the Corps sought to reestablish its jurisdiction over all lands it previously regulated. On May 29, 1998, the Corps and the Environmental Protection Agency issued a guidance (EPA/Corps Guidance) for field offices within the Fourth Circuit outlining the impact of Wilson on federal government policy.(255) The Corps has faced this sort of difficulty before. As a result of the Fourth Circuit's prior decision in Tabb Lakes v. United States.(256) the Corps had already stopped applying the migratory bird rule within the Fourth Circuit. True to form, the Corps of Engineers is construing the decision as narrowly as possible and has issued guidance that maintains an expansive definition of "waters of the United States" that are subject to federal regulation under section 404.

The EPA/Corps Guidance only applies within the Fourth Circuit; it is federal policy to use the regulations invalidated in Wilson throughout the rest of the country. Moreover, within the Fourth Circuit, the guidance explicitly "does not change the substantive requirements of existing Corps or EPA regulations, except to the extent necessary to comply" with the court's decision.(257) In particular, the Corps "will continue to assert [Clean Water Act] jurisdiction over any and all" wetlands, including isolated wetlands, where the Corps or EPA "can establish an actual link" between the wetland and interstate or foreign commerce, and where "individually and/ or in the aggregate, the use, degradation or destruction of isolated waters [including wetlands] with such a link would have a substantial effect on interstate or foreign commerce."(258) The EPA/Corps Guidance asserts that migratory bird usage of an isolated wetland, in and of itself, is sufficient to establish jurisdiction because the use or destruction of all such wetlands would have a substantial affect on interstate commerce.(259)

The policy changes outlined in EPA/Corps Guidance are minimal and do not cure existing federal wetlands regulations of their constitutional deficiencies. While the assertion of jurisdiction over wetlands based on the mere potential of some effect on interstate commerce was clearly in excess of the Commerce Clause's limits, the rationale set forth in Lopez requires more than the aggregation of an activity to produce a substantial economic effect.(260) The assertion of federal jurisdiction over isolated wetlands, and perhaps even some that are not so isolated, exceeds Congress's delegated powers, whether viewed from the standpoint of what "substantially affects" interstate commerce, or whether the regulations infringe upon "traditional state functions." The relevant issue is not whether federal wetlands regulation provides for greater environmental protection than state, local, and private efforts.(261) the issue is what the Constitution permits.(262)

A. Do Wetlands `Substantially Affect" Interstate Commerce?

Much like the Lopez dissent, defenders of existing wetlands regulations seek to demonstrate the validity of the Corps's jurisdiction over all wetlands by tabulating the substantial economic benefits that wetlands provide. Wetlands, it is claimed, provide billions of dollars of benefits by facilitating commercial seafood harvests,(263) improving water quality,(264) preventing shoreline erosion(265) and serving as breeding and wintering grounds for waterfowl, which are hunted and watched,(266) as well as habitat for muskrat and beaver, which are trapped for their pelts.(267) These economic benefits are no doubt substantial, but they are no more relevant to the constitutional inquiry into whether the federal government may regulate wetlands than the tremendous economic impact of a poor educational environment was to the constitutionality of the Gun Free School Zone Act (GFSZA). The Lopez inquiry is more qualitative than quantitative.(268)

The language of the Lopez decision makes clear that exercises of federal power under the Commerce Clause must seek to regulate "commercial" or "economic" activity that has a substantial effect on interstate commerce. "Even Wickard, which is perhaps the most far reaching example of Commerce Clause authority over intrastate activity, involved economic activity," noted the Court.(269) That many who wish to develop wetlands seek commercial gain, or must engage in commercial activity for the development to occur, is immaterial to whether or not such activity falls within the jurisdictional limits outlined in Lopez. As Justice Kennedy noted in his concurrence, "[i]n a sense any conduct in this interdependent world of ours has an ultimate commercial origin or consequence, but we have not yet said the commerce power may reach so far."(270) For an activity to be commercial or economic, it must entail more than a tangential relationship to some economic activity.(271) The challenged application of the regulation must itself be "an essential part of a larger regulation of economic activity" before courts begin to aggregate the effects of all like situations.(272) Adopting an unrestrained Wickard analysis without requiring that the activities in question be in and of themselves commercial in nature would obliterate the distinction that Lopez seeks to uphold.

Much of the activity that the Corps seeks to regulate in wetlands is noncommercial--the building of an extension on one's own house, the planting of a garden, and so on. The Corps's regulation is not a regulation of commercial development per se, it is a regulation of any activity, save those specifically exempted by Congress, that could impact wetlands in a particular manner. Indeed, that the activity in any given case is commercial in nature is completely incidental to the Corps's assertion of jurisdiction. That is the defect. This is also what differentiates the regulation of wetlands from the regulation of mining activity sustained in Hodel.(273) Mining per se is a commercial activity.(274) The filling of wetlands, however, is not. Many wetland permits concern nothing more than a family's effort to expand its home.(275) Moreover, the Corps has asserted that it could regulate "walking, bicycling or driving a vehicle through a wetland," if it so chose, because such activities could result in the "discharge of dredged material."(276) Clearly, regulatory authority of this scope extends far beyond the regulation of purely commercial activity, and is therefore constitutionally suspect.

Attempting to aggregate these affects, as the Corps of Engineers does in justifying its jurisdiction,(277) fares no better. Although the Supreme Court has upheld the use of "cumulative effects" to establish jurisdiction, in each case the activity to be regulated was economic in nature. This was true when the doctrine was first enunciated in Wickard v. Filburn, which sought to regulate wheat production to maintain federal price controls.(278) In Perez v. United States,(279) the Supreme Court upheld the regulation of intrastate loansharking because "[w]here the class of activities is regulated and that class is within the reach of federal power, the courts have no power `to excise, as trivial, individual instances' of the class."(280) This rationale was used by the Court of Appeals for the Third Circuit, prior to Lopez, to uphold a conviction for filling wetlands without a permit.(281) Unlike the regulation of wetlands, however, the activity in Perez-loaning money at usurious rates-is inherently commercial. Loaning money is a commercial transaction, and it is the commercial nature of the activity that subjects the class to federal authority. As Perez makes clear, the "class of activities" itself must be subject to federal jurisdiction for an individual instance to come under federal control.(282) The filling of intrastate, isolated wetlands does not meet this test, as this "class of activities" is not inherently economic or commercial in nature.

Thus, for federal regulation of wetlands to meet the Lopez test, it must conform to the limits suggested by the Court in Wilson. It can regulate interstate waters and navigable waters without question, as it can regulate those things in interstate commerce. Presumably, this entails the ability to regulate those wetlands that are adjacent to such waters as well. But, this does not confer authority upon the Corps to regulate all lands that meet the regulatory definition of wetness. As the Seventh Circuit noted even before the Lopez decision, "[a]fter April showers, not every temporary wet spot necessarily becomes subject to government control,"(283) even though existing regulations purport to regulate lands that are rarely wet.(284)

B. Wetlands Regulation and Traditional State Functions

The regulation of wetlands, particularly when nonpolluting activities are involved, entails the regulation of a myriad of ordinary land uses, from building homes to filling ditches, and so on. As the Supreme Court noted in FERC v. Mississippi,(285) "regulation of land use is perhaps the quintessential state activity."(286) As such, the regulation of wetlands is a traditional state function, much like zoning. Thus, it should be no surprise that literally thousands of local governments regulate the use and modification of wetlands.(287)

As noted below, state and local efforts to conserve wetlands through land-use controls and other means predate the section 404 regulatory program.(288) Yet the extension of federal regulatory authority over all wetlands bars states from performing "their role as laboratories for experimentation to devise various solutions where the best solution is far from clear," such as in environmental policy.(289) Much like the GFSZA, the current regulatory program "forecloses the States from experimenting and exercising their own judgment in an area to which States lay claim by right of history and expertise."(290) Although states are not barred from administering their own programs and are able to seek delegation of the federal regulatory program to state agencies, states have no ability to supplant the federal regulatory program with a substantive alternative.

The federal interest in protecting wetlands arises first from keeping navigable waterways navigable, and second from controlling interstate externalities, such as interstate pollution caused by contamination of the nation's interstate waterways. At a minimum, this suggests that the federal government's assertion of authority over isolated wetlands is unjustified, as such regulation cannot be defended on either ground. Applied more rigorously, this approach would require the Corps to make a case-by-case determination that the activity in question would impact a federal, as opposed to a state, interest. Thus, the Corps could stop wetlands development that might cause downstream flooding or potentially disrupt the flow of a navigable waterway. It could also stop activities that presented a substantial risk of polluting a waterway or otherwise disrupting interstate commerce. But simple home construction and other activities that involve filling wetlands, without more, would not be subject to federal jurisdiction.

Some argue that when courts create a jurisdictional distinction between intrastate, isolated wetlands and wetlands adjacent to navigable waterways, such as the Seventh Circuit did in Hoffman Homes I,(291) they are making an unscientific, and therefore unjustifiable, policy judgment that is better left in the hands of the legislative branch.(292) Yet it is those who make this argument that are actually guilty of conflating scientific and legal questions. Whether a wetland is, or should be, subject to federal jurisdiction is a legal issue. It is a question of statutory or, in this case, constitutional law. That isolated wetlands may provide some of the same values as those wetlands clearly within federal jurisdiction is immaterial. It is not the wetlands' "value" that forms the basis of federal jurisdiction. It is their connection to interstate commerce. Defenders of federal jurisdiction can demonstrate that wetlands are extremely valuable to our nation's future-as valuable as the schools in which our children are educated-but that does not confirm federal jurisdiction. An isolated wetland's value, ecological or otherwise, in and of itself, cannot form the basis of federal jurisdiction any more than the value of well-educated school children can provide the basis for federal regulation of guns in schools.

C. What About the Waterfowl?

Both before and after Lopez, many have sought to argue that federal jurisdiction over wetlands, whether isolated or not, is conferred by the use of wetlands by migratory birds.(293) As Justice Thomas noted, "the Corps regulations are based on the assumption ... that the self-propelled flight of birds across state lines creates a sufficient interstate nexus to justify the [Corps's] assertion of jurisdiction over any standing water that could serve as habitat for migratory birds."(294) Ducks, geese, and other waterfowl regularly cross state lines. They are also, arguably, often items in interstate commerce, given that hunters shoot them and birdwatchers watch them, often crossing state lines before and after such excursions. Congress's authority to regulate direct harm to wildlife, including waterfowl, is well established.(295) This does not mean, however, that Congress can regulate wetlands, no matter how essential wetlands are to the existence of ducks.(296)

The first problem for the migratory bird rule is that "as birdwatchers will attest, migratory birds will alight almost anywhere."(297) Thus, basing federal jurisdiction on the potential, or even actual, presence of migratory birds destroys the Court's effort to outline a boundary that Congress may not cross. This was sufficient for the Ninth Circuit in the Leslie Salt cases,(298) but it cannot withstand the reasoning put forward in Lopez for much the same reasons articulated by the Seventh Circuit in Hoffman Homes I: "Since creation (of the states), migratory birds have flown interstate. But this annual traverse by itself does not affect commerce."(299) There is a fundamental difference between regulating the killing of birds in order to sell them or regulating the actual commerce in the birds themselves and regulating activities that have an incidental impact on land that the birds in question may covet.

The Seventh Circuit in Hoffman Homes I, like the Lopez Court, also recognized that the subject of federal jurisdiction must itself have an economic character before the federal government can seek to aggregate the effects on interstate commerce to establish jurisdiction. "The birds obviously do not engage in commerce. Until they are watched, shot at or otherwise impacted by people who do ... engage in interstate commerce, migratory birds do not ignite the Commerce Clause."(300) These particular activities-hunting, bird watching, and so on-may, at times, be subject to federal authority, but that does not place every environment upon which these activities rely, or in which they may occur, within federal jurisdiction.

The Commerce Clause can allow the regulation of waterfowl without authorizing the regulation of every bit of land upon which they may depend. As the Lopez Court made clear, Congress can regulate the sale and interstate transportation of guns, but that does not entitle Congress to regulate every environment in which guns may be found, even if the presence of guns in that area may eventually produce a measurable effect on commerce. Similarly, the ability of Congress to regulate ducks and development activity does not mean that Congress can regulate every environment in which ducks and development activity are found, even if there is a distant nexus to commerce or the cumulative impact of an activity would eventually impact the nation's gross domestic product. Lopez does not support the claim that "the power to protect migratory birds extends to the habitats in which they live."(301)

Consider that the federal government can place limits on the use of highway funds, but cannot regulate the roads on which a car is driven. The power to regulate cars or to condition the receipt of highway funds on the performance of various tasks does not confer the power to regulate every environment, public and private, in which cars are operated. That all cars offered for sale in the United States must conform with federal regulatory requirements does not allow the federal government to condition the modification, or outright destruction, of private garages or driveways. The existence of one power does not establish the other. If it did, we would once again be confronted with unlimited federal power under the Commerce Clause, the single state of affairs that Lopez most conclusively rejects.(302)

Houck and Rolland argue that wetlands "are aptly seen as biological factories, producing interstate goods,"(303) of which waterfowl are a part. Characterizing wetlands in this manner appears to provide a clear justification for regulation under the Commerce Clause. After all, given federal jurisdiction over industrial factories, it would seem logical to extend to biological factories as well. Yet it does not. For one, the running of an industrial facility is inherently an economic activity, whereas maintaining wetlands is not. More importantly, if their argument were adopted, the Commerce Clause power would be unlimited and would require the overturning of Lopez if applied to the GFSZA.

It is true that wetlands are places where migratory birds, which may themselves have a substantial effect upon interstate commerce, spend time, feed, and so on. There is no doubt that migratory birds rely upon wetlands and that they fly across state lines. Yet to accept the argument of Houck and Rolland is to argue that Congress has similar jurisdiction over schools. After all, children, who will grow up to have very substantial effects on interstate commerce-effects even greater than those of ducks and other waterfowl-spend more time in schools than anywhere but their homes. If children rely upon schools to become productive members of society-if they rely upon schools to have that effect on interstate commerce-then federal regulation of guns in schools would seem to be as valid as regulating shovels and backhoes in wetlands. Schools are as much the "factories" that produce productive, educated members of society as wetlands are the "factories" that produce waterfowl, shellfish, and so on. Adopting this line of argument, we are back at the point that the Supreme Court has already rejected, that of allowing any tangential connection to interstate commerce to provide for federal Commerce Clause jurisdiction.

Without the ability to rely upon migratory waterfowl, there is no basis for the Corps to assert jurisdiction over the vast majority of isolated wetlands without making a case-by-case determination that the specific wetlands in question have a substantial effect on interstate commerce. That is to say that they must be used for commercial activity that is itself not trivial (after all, children often buy their lunches at school and that did not save the GFSZA) and that has some interstate character. This may be relatively easy for wetlands that are truly adjacent to navigable or interstate waterways, but it is not for the millions of wetlands for which there is, at most, only a tangential relationship to interstate commerce.

V. THE ENVIRONMENTAL IMPLICATIONS OF APPLYING LOPEZ TO WETLANDS

A strict application of the principles enunciated in Lopez would impose substantial limitations on the regulatory authority of the Corps of Engineers. Even if the precise line demarcating the extent of the Corps's jurisdiction is unclear, that it would be more limited than contemplated in the Leslie Salt cases and the Corps's current regulations is clear. Even if Lopez did little more than free up isolated wetlands sufficiently removed from interstate commerce, this would provide substantial relief for landowners. By the Corps's own estimates, isolated wetlands may account for less than two million acres, out of approximately 100 million acres of wetlands, but there are approximately nine million isolated wetlands in the United States.(304) Removing federal regulation from these parcels would be significant. As noted above, the impact of Lopez on section 404 regulation could be even greater. That said, the obvious question is what this would mean for environmental protection.

It is generally assumed in discussions of environmental policy that restricting the power of the federal government will lead to less environmental protection. Relying upon state governments or, worse, private parties to safeguard environmental quality is assumed to be a recipe for disaster. Without a federal safety net, spillover problems, institutional incompetence, and competitive pressures allegedly conspire to result in substantial environmental degradation and social welfare losses.(305) There is a growing body of theoretical and empirical research that casts strong doubts on this presumption.(306) Indeed, there are many who argue federal control of environmental policy, whatever its merits in the past, is no longer capable of providing the level of environmental protection that Americans want at a cost that they will accept.(307)

This section reviews the past and present wetland conservation efforts by state governments, contrasting the comparative institutional competence of federal and state regulators to conserve wetland functions and values. It also considers the relative contribution of voluntary, government-funded, incentive-based programs and private conservation efforts. Taken together, state regulations, nonregulatory federal programs, and private efforts potentially are more than capable of compensating for reductions in federal regulatory authority. Indeed, there are reasons to believe that a federal retreat from the regulatory front would even enhance environmental protection in this area.

A. Wetland Federalism

In the 1970s the federal government passed a series of sweeping environmental regulatory statutes, including the Clean Water Act of 1972.(308) It is generally presumed that these laws were enacted because states were unwilling to enact strong environmental protections, unable to do so, or both. For the following two decades, it was generally taken for granted that the federal government must be the primary guardian of environmental quality. In this respect, wetlands are no different than any other major environmental issue. To some, it is simply "as obvious today" as it was in 1972 and 1977 "that the national interest in clean water and related wetlands functions merits a strong federal presence."(309)

In the wake of the Wilson decision, environmental leaders expressed concern that the decision would lead to wholesale destruction of wetlands.(310) Leaving the protection of wetlands to state agencies, they feared, would produce a destructive race to the bottom.(311) Such concerns, however widely held by policymakers, are unjustified. It is well accepted that federalism encourages interjurisdictional competition and spurs policy innovation.(312) It is for this reason, among others, that federalism is an integral part of the American system. Environmentalists should rest easy on both theoretical and empirical grounds. Wetland federalism is likely to provide sounder policy and more effective environmental protection than the current approach.(313)

1. The "Race to the Bottom"

The race-to-the-bottom theory is straightforward: states will compete to attract industry by lowering regulatory burdens on those companies. This competition creates a spiral of downward pressure on environmental safeguards as companies seek to locate in states where regulatory burdens are the lowest. Correspondingly, states seek to attract industry by lessening the economic burden of environmental safeguards.(314) So powerful are these pressures, that the public's strong preference for high levels of environmental protection is overcome.(315) Under the theory, although "all states would be better off if they each cooperated with each other by collectively maintaining optimally stringent environmental standards, the incentives are such that each state will instead relax its standards in an ultimately unsuccessful bid to attract industry."(316) Thus, minimum federal standards are required to ensure a minimum, socially desirable level of environmental protection.(317)

The theory is simple, but it is also flawed,(318) First, it incorrectly assumes that environmental regulation is the only area, or one of only a handful of areas, in which states compete for business.(319) This is not the case. Company siting and relocation decisions are a function of numerous variables, not simply environmental regulation. The availability of labor, transportation infrastructure, and other factor inputs all have a significant impact on these decisions, as do political decisions about regulatory and tax policies. Thus, even if improving environmental protection inherently requires imposing substantial burdens upon industry, it is only one of many factors influencing company decisions and will not necessarily produce capital flight to other jurisdictions. Moreover, for many citizens, stronger environmental protections are a reason to move to a state. This fact creates pressures not to reduce environmental standards.(320) The result is that there is more than one set of competitive pressures that influence state decisions.

The race-to-the-bottom argument in the context of environmental regulation is substantively no different than in any other regulatory arena. If interstate competition produces unduly lax environmental regulation, it would also be expected to produce undertaxation and insufficient regulation of safety, health, competition, and land use. Yet, in numerous fields, state and local regulation of industrial practices preceded federal intervention. For example, the race-to-the-bottom theory implies that few, if any, states would impose minimum wage requirements of their own that exceed the federal minimum wage due to interstate competition for the provision of cheap labor. In reality, however, many states impose minimum wage requirements above those required under federal law.(321) Indeed, many states enacted minimum wage laws several years before the federal government sought to do so.(322)

When welfare policy was decentralized in the 1990s, there were immediate predictions of a race to the bottom in the provision of benefits. However, even prior to these reforms, states were able to cut benefits under federal law, and insofar as there are economic pressures to cut benefits, these pressures were already in play.(323) Yet, according to Craig Volden, "no such race has taken place."(324) Indeed, "[t]he effect of competition is neither to lower nor to raise welfare spending but to bring it in line with citizen demands."(325) Similarly, in the context of corporate charters, "[s]tate competition has produced innovative corporate codes that quickly respond to changing market conditions and firm demands," resulting in a race to the top, not a race to the bottom.(326)

The race-to-the-bottom argument is not new, nor is the empirical evidence that casts doubt on its validity. Shortly after the turn of the century, fear of a race to the bottom prompted the federal government to enact a law prohibiting the interstate shipment of goods produced in plants that employed children under the age of fourteen.(327) "The shipment of child-made goods outside of one State directly induces similar employment of children in competing states," the government warned in 1918 while defending the law in Hammer v. Dagenhart.(328) Yet at the time "every State in the Union" had a law regulating child labor, the competitive economic dynamic between states notwithstanding.(329)

There is little reason to believe that environmental policy is fundamentally different than other areas in which states presumably compete for business. Despite the repeated charge that states cannot bear the costs of imposing environmental regulation on local businesses in a competitive environment, states routinely impose environmental standards that exceed federal requirements.(330) New Jersey, for instance, "contains some of the most costly regulations in the nation."(331) Despite the fact that increasing regulatory requirements may discourage some businesses from locating within New Jersey, the state legislature is willing to impose these costs because of the local demand for greater environmental protection than would be provided by federal statutes alone. Many other states have similar experiences. "Almost every State has some area where it has either adopted a standard higher than the federal standard or adopted a standard in an area where there was no federal standard," according to Robbie Roberts of the Environmental Council of the States.(332) Given the strong public demand for environmental protection, this should be no surprise.

The rarity of destructive jurisdictional competition can be readily observed in the environmental arena as states are demonstrating that there is no inherent trade off between environmental protection and economic growth,(333) While the federal Superfund program is generally regarded as an abject failure,(334) several states have discovered how to accelerate cleanup times at hazardous waste sites while spending substantially less money than the federal government.(335) National forests lose money on timber sales and have a poor record of environmental protection; state forests, such as those in Montana, turn a profit from timber management and have superior environmental performance.(336) Concerned that environmental enforcement efforts are inordinately focused on measures of "inputs," rather than tangible environmental results, two dozen states have passed environmental audit privilege laws since 1993.(337) These laws reduce penalties for companies that voluntarily disclose and correct environmental violations, leading to greater disclosure and cleanup of pollution problems. New Jersey may have more costly regulations than most states, but it was also the first state to statutorily authorize multimedia environmental permits,(338) This approach to permitting increases the operational flexibility afforded to regulated firms and consolidates reporting and paperwork requirements while facilitating more accurate emission inventories and reducing cross-media transfers of pollutants.(339)

Allowing the states to operate as green "laboratories of democracy"(340) can produce both economic and environmental gains. Both the theoretical and empirical evidence demonstrate that "[t]he possibility of competition will lead inexorably to experimentation and product differentiation," and this, in turn, produces "innovation and improvement."(341) This is as true of competition between states as it is of competition between buyers and sellers in the marketplace.(342) Thus it should be no surprise that there is more innovation in environmental policy at the state level than at the federal level.

This is not to say that no state will ever enact bad environmental laws. States do, and will continue to, adopt short-sighted policies in the environmental arena, as in every other area of public policy.(343) This, in and of itself, does not make the case for federal regulation. First, it is just as possible that states will overregulate in the environmental arena as it is they will underregulate.(344) For instance, if a state's taxes on capital are less than the costs of providing infrastructure and other services to new facilities, it may compensate for this by adopting more stringent environmental regulations to prevent excessive industrial development.(345) Additionally, just as a state's legislature could be captured by corporate interests that seek to reduce environmental safeguards to lower their operating costs, another state legislature could be disproportionately influenced by a NIMBY(346) group that seeks to use environmental regulation as a means of preventing additional local development, even development that may be largely beneficial.

The race-to-the-bottom argument also assumes that federal regulation will solve those problems that states do not. This assumption is highly questionable. To begin with, because states compete for businesses in a variety of ways, ranging from favorable tax rates to less burdensome regulations of every stripe, establishing a federal minimum standard in one area simply shifts the competitive pressures into other areas. If racing to the bottom is necessary to attract corporate investment, states will find somewhere to race. If this is the case, then all federal intervention accomplishes is shifting that race from one medium-environmental protection-to another, such as worker safety, labor regulation, or something else.(347) The race-to-the-bottom argument thus proves too much, and becomes the basis for creating national minimum standards in every conceivable area of public policy; it is a "frontal attack" on federalism.(348)

The failure of states to adopt perfect regulatory schemes is more likely to be the result of the inherent limitations of governmental institutions than it is particular failings of state-based institutions. Absent substantial interstate spillover effects, a centralized government program is only likely to match the social welfare gains of decentralized policy making and implementation if the following three conditions are met: 1) there are fairly uniform preferences among individuals across the nation; 2) the central entity has ready access to information about local tastes and conditions; and 3) the central entity can accurately predict the consequences of policy decisions.(349) Even with spillovers, extensive federal regulation is difficult to justify. Spillovers can only justify federal intervention that is designed to address those particular problems, and yet only a small portion of federal wetlands regulation, indeed only a tiny sliver of federal environmental regulation generally, can be justified in this manner.(350)

2. State Wetland Protection

If the race-to-the-bottom theory were accurate, one would expect states to lag behind the federal government in developing wetland protection programs. Further, one would expect those states with the greatest proportion of wetlands to have provided the least wetlands protection if, as is usually claimed in the context of environmental regulations, wetland regulations could suppress in-state economic growth. This is not what has occurred, however. States did not wait for the federal government to begin protecting wetlands. Indeed, the history of state wetland regulation suggests that environmentalists need not rely solely, or even primarily, on the federal government for the protection of wetlands.(351)

As discussed above, broad recognition of the ecological value of wetlands is fairly recent.(352) Up until the 1960s, wetlands were neither particularly prized ecosystems nor the focus of substantial conservation efforts, beyond those that focused on discreet functions that some wetlands could provide (such as waterfowl habitat). Despite this, wetland conservation efforts in many states preceded federal regulation by the Corps of Engineers pursuant to Callaway.(353) This is particularly the case in those states with substantial wetland acreage. Moreover, once the Corps's regulatory program was firmly in place, states continued to enact new wetland conservation programs, both regulatory and nonregulatory, to ensure greater wetland conservation.

The first wetlands protection statute in the United States was passed in Massachusetts in 1963.(354) This law, enacted nearly a decade before the CWA and twelve years before the Corps of Engineers was instructed to protect wetlands under section 404 by a federal court,(355) required a state permit for filling or dredging coastal wetlands.(356) Two years later, Massachusetts enacted regulatory protections for inland wetlands, and, in 1972, regulations were added to protect floodplains.(357) By the time Congress enacted the CWA in 1972, Massachusetts had nine years of experience regulating wetlands, and was already reforming its laws to provide greater local control and accountability while maintaining state-level oversight.(358) Other states, including Connecticut, Georgia, and Washington, were beginning to enact wetland protection statutes too. Although Massachusetts was the first state to enact an explicit wetlands protection statute, many localities had already done so. The Massachusetts law was itself "based on a number of local zoning permit requirements already to be found in coastal states."(359)

By 1975, when the federal District Court for the District of Columbia declared that the Corps was required to protect wetlands under the CWA, every coastal state, save Texas, had already adopted coastal wetland protections of some kind, and eleven states had passed statutes to protect freshwater wetlands as well.(360) It is quite possible that several of these states enacted coastal wetland programs in response to incentives provided by the Coastal Zone Management Act (CZMA) of 1972.(361) If so, this simply reinforces the argument that the federal government can promote wetland conservation without resorting to federal land-use controls.(362)

Under the race-to-the-bottom theory, states enacting regulations that negatively impact industry will suffer economic costs as industries opt to locate elsewhere. If these economic costs are substantial enough, states will refrain from enacting stringent regulations. Because most wetland regulations restrict land use, such regulations can increase the costs to corporations of siting and modifying facilities. These regulations will also discourage commercial and residential development. It stands to reason that these costs will be greatest in those states that contain the greatest amount of wetlands as a percentage of each state's total land area. "As a general rule, the larger a state's wetland inventory, the more important it is to the nation, but the less important saving it may appear to the state itself--indeed, the more onerous the burden of protecting it will appear."(363) A state in which more lands are wet has more to lose by restricting land use than a state that has relatively few wetlands. Thus, those states with the greatest proportion of wetlands would be expected to be the last states to enact wetland protection regulations. This is not the case.

Fifteen states have more than ten percent of their land area in wetlands, according to the National Wetland Inventory.(364) Every one of these states, save Alaska, enacted its first wetland protection statute prior to 1975. Moreover, most of these states have some form of protections for both inland and coastal wetlands. As noted in a recent review of state efforts, "most of the states with the largest wetland acreages have adopted wetland regulatory efforts for all or a portion of their wetlands."(365) This is the exact opposite of what the race-to-the-bottom theory would predict. It is equally significant that competitive pressures that should produce a race to the bottom have not done so. "[N]o state has repealed or substantially undercut its wetland statutes once adopted."(366)

The race-to-the-bottom theory suggests two reasons why few states impose substantial regulatory burdens in excess of those mandated by the federal government. First, as noted above, exceeding the federally mandated floor risks driving investment to other states. Second, state governments face resource constraints and are likely to devote their resources to those areas not already occupied by the federal government. Once the federal government has asserted regulatory authority, state regulation that overlaps or duplicates federal actions may be superfluous and waste administrative resources. It is one thing for a state to seek to implement a program in lieu of a federal agency, perhaps to reduce the burdensome nature of the program. But many state supplemental programs deliberately exceed stringent federal wetlands regulations, suggesting that they seek to address environmental concerns uncovered by federal regulations.

Despite incentives not to act, fifteen states have regulatory statutes covering freshwater wetlands.(367) Other states protect some freshwater wetlands through shoreline or coastal zone protection programs(368) or other specialized statutes.(369) States have also sought to develop nonregulatory programs to supplement or substitute for regulatory programs.(370) "States are frequently finding the outright purchase of wetlands to be a viable political alternative to regulation of privately held lands" and other conservation measures, according to the National Conference of State Legislatures.(371) State freshwater protection efforts are rather diverse, but this reflects "the diversity of freshwater wetland types across the nation and state preferences."(372) Some state programs are also more flexible and quick to respond to changing information about what types of protections are worthwhile. "State wetland regulatory programs have evolved considerably over the last thirty years, and most are much more sophisticated than even five years ago."(373) States are also taking the lead in developing systems for classifying wetlands and evaluating their function.(374) Yet at present there is little evidence that the Corps considers wetland function in the regulatory process at all.(375)

Where state regulatory programs have been put in place, they are generally regarded to have slowed wetland destruction.(376) Virginia, for example, passed its first wetlands protection statute in 1972, and "documented alteration of wetlands dropped dramatically in the year of implementation from over 600 to less than 20 acres per year."(377) Because this drop occurred before there was any federal effort to conserve wetlands, "that reduction can probably all be attributable to the state program."(378) Similarly, "Maryland has reduced its annual wetland losses substantially" and "has in fact prevented far more wetland destruction than would occur under section 404 alone."(379) Maryland's Department of the Environment (MDE) even claims that its program has come close to meeting its goal of no net loss of wetlands, though that claim is disputed.(380)

Several states also impose broader restrictions than the Corps, which is only authorized to regulate discharges into wetlands under the Clean Water Act.(381) In Maryland for instance, "virtually any activity which may impact the wetland is regulated" under its wetland protection statute.(382) Several states regulate sizable buffer zones and not just the wetlands themselves. The Maryland Department of the Environment, for instance, regulates buffer zones of between 25 and 100 feet for nontidal wetlands.(383) New York's statute protects a 100 foot buffer zone that local governments may extend.(384) "Regulation of activities in the buffer zone is unique to state law, and is not found in the section 404 program."(385) The Corps does not have such regulations, nor could it under even a generous reading of Lopez.

That various states have sought to supplement federal wetland conservation efforts with targeted programs is to be expected. As information about the importance of wetlands has increased, wetland protection has become a more important state-level priority.(386) State officials, even if they lack the same level of expertise as federal officials, have better knowledge of local environmental concerns than federal officials ever could. As noted above, the ecological value and function of a wetland is going to be determined, in large part, by its location and surroundings.(387) In other words, which wetlands are most vital to protect in a given area will be based upon information that is more readily available at the state and local level.(388) For this reason, many localities choose to regulate wetlands even more stringently than states with wetlands statutes.(389) "Local governments are better able to assess the potential impacts of wetland modification," noted one state regulatory official at a 1984 wetlands conference.(390) Another articulated that there is "a need for a community perspective, not because local governments are more perfect, but because they are more local."(391)

Freshwater wetlands are more varied than coastal wetlands in type, function, and location. Moreover, "[u]nlike open water, which is easily identified and delineated, the exact boundaries between uplands and wetlands are often difficult to distinguish."(392) Thus, protection of freshwater wetlands has been limited, in part, due to the inherent difficulties of determining where they are and how best to protect them.(393) Insofar as this creates problems for state and local regulators, it will cause even greater difficulties for federally administered programs.(394) To put this in perspective, consider that the Corps is theoretically responsible for protecting the nation's approximately 100 million acres of wetlands. Yet the Corps's regulatory division contained fewer than 1200 full-time equivalent employees in 1996.(395) Excluding Alaska, and assuming that every Corps regulatory official is solely focused on administering the wetland portion of the section 404 program,(396) this would mean that each Corps official "would be responsible for regulating 90,000 acres of wetlands spread out over 1.7 million acres."(397) In other words, each official would be responsible for regulating an area the size of a small state, the vast majority of which is privately owned.

Federal regulators, regardless of their intentions or regulatory authority, are inherently limited in their ability to regulate wetlands. They simply do not have the ready access to the relevant information. This is a problem throughout environmental policy. As Butler and Macey note, "Federal regulators never have been and never will be able to acquire and assimilate the enormous amount of information necessary to make optimal regulatory judgments that reflect the technical requirements of particular locations and pollution sources."(398)

State and local wetland regulation is not only likely to be more effective at devoting resources to the greatest environmental concerns, but it will also be more able to provide the regulated community with the certainty, predictability, and equity that it seeks. There are no federal jurisdictional maps that enable landowners to conclusively determine whether or not their lands are wetlands.(399) On the other hand, "virtually all state and local governments map wetlands as part of their regulatory processes."(400) The state of Michigan, for instance, began wetland mapping in 1979.(401) The federal maps that exist are generally considered unreliable and are explicitly not to be used for regulatory purposes.(402) Even if a private landowner hires a wetland consultant to examine the land, there is no guarantee that a Corps official will agree with the private consultant's assessment of the land. In addition, state and local regulatory requirements for wetlands are typically more detailed and specific.(403) This makes it easier for private landowners to comply with the regulatory requirements and reduces opposition to the regulatory program.

None of this is to say that state wetland conservation efforts are flawless. There is little doubt that the record of state wetland conservation efforts is far from perfect. That, however, is not the relevant issue. The question for this Article is not whether state programs meet a predetermined standard of perfection or could use improvement. The question is whether a greater reliance on state regulatory efforts, in lieu of federal efforts, would produce a substantial decline in the quality and extent of wetland conservation. From this standpoint, it is far from evident that limiting federal regulatory efforts will produce substantial ecological harm, particularly when one recognizes the substantial potential for nonregulatory wetland conservation efforts to continue, at both the state and federal level.

B. Conservation Without Regulation

In discussions of environmental policy, it is traditional to equate environmental protection with environmental regulation. This connection is unfounded, however. Direct government regulation is only one means of addressing environmental problems. Other approaches include the use of fiscal instruments (for example, subsidies and taxes), direct government provision or purchase of public goods, and the creation or recognition of property rights in environmental resources.(404) Fiscal instruments are typically used to modify behavior in the marketplace by changing the incentives faced by individuals and corporations. For example, providing a financial incentive to maintain habitat for endangered species will induce more landowners to protect species habitat than if the government had not provided an added incentive. Similarly, taxing certain activities, such as the emission or particular substances, will reduce those activities on the margin.(405)

In circumstances in which federal policymakers believe that the private sector will underprovide a public good, the federal government can provide the good directly.(406) Federal agencies can, and do, purchase ecologically sensitive lands from private landowners and groups to ensure their protection.(407) In those cases where landowners are unwilling to sell, the Fifth Amendment to the Constitution allows the federal government to take land for public use so long as compensation is provided.(408) Thus, the federal government can use the spending power to advance environmental goals where its regulatory powers are limited.

Governments need not take direct action to facilitate conservation efforts. The creation of property interests empowers owners to act as stewards of environmental resources and facilitates conservation efforts in the private sector.(409) Thus, the recognition of conservation easements empowers conservation groups to purchase development rights from a given parcel of land and protect the present ecological values.(410) Similarly, when states recognize property interests in instream water flows, a local environmental group can purchase instream flows to improve salmon habitat.(411) Internationally, allowing the commercial utilization and quasi-ownership of elephants in Zimbabwe has led to larger herds and the devotion of greater acreage for wildlife habitat.(412) In New Zealand the creation of fishing rights known as "individual transferable quotas" (ITQs) reduced overfishing and encouraged fishermen to support sustainable harvesting.(413) The expansion of property rights in these areas further enhances the already substantial private conservation efforts going on today.(414)

Both nonregulatory conservation efforts and the use of property rights are important in the context of wetland conservation because both have been used to stem wetland loss and preserve substantial amounts of wetlands. Therefore, any consideration of the likely impact of limiting federal regulatory authority under section 404 must assess the role that nonregulatory and property-based conservation strategies can, and already do, play in wetlands conservation.

1. Nonregulatory Federal Programs

The first wetland conservation efforts were nonregulatory in nature. Federal acquisition of waterfowl habitat dates back to 1929.(415) Beginning in 1934, the sale of "duck stamps" to hunters created a dedicated source of revenue for habitat conservation. This program has conserved an estimated 3.5 million acres(416) Such efforts expanded in 1970 when Congress enacted the Water Bank Act that authorized payments to farmers to conserve additional habitat.(417) Under this program, the federal government enters into ten-year, renewable contracts with farmers and other private landowners to preserve essential habitat.(418)

All these early programs were important in stemming the loss of wetlands but were frustrated by competing government programs that subsidized extensive wetland destruction. Federal flood control and drainage projects, subsidized agricultural loans, subsidized disaster insurance, agricultural price supports, and even direct payments for the draining of potential cropland all exacerbated wetland loss rates.(419) Some of these subsidies for wetland destruction have been limited or curtailed, but not before inducing substantial wetland losses.(420)

More recently, the federal government has created several programs that finance the restoration, in addition to the conservation, of wetlands. These programs include the Fish and Wildlife Service's Partners for Wildlife program begun in 1987, the North American Waterfowl Management Plan, created in 1986, and the Wetland Reserve Program, authorized in the 1990 Food, Agriculture, Conservation, and Trade Act.(421) In 1995, these three programs restored an estimated 48,000 acres, 42,000 acres, and 118,000 acres of wetlands respectively, for a total of over 200,000 acres of restored wetlands in a single year.(422) This is in addition to wetland restoration efforts conducted on federal lands, restoration conducted as mitigation under section 404 (approximately 46,000 acres in 1995),(423) and purely private efforts.(424)

These partial wetland restoration numbers suggest that the United States has achieved, or is at least close to achieving, the stated goal of no net loss. A recent Department of Agriculture report concludes that "we are moving toward the goal of `no net loss' of wetland acreage that has been Federal policy for the last 8 years."(425) The Natural Resources Conservation Service estimated an average gross wetland loss rate of 156,000 acres per year from 1982 to 1992.(426) It is generally accepted that the rate of wetland loss has continued to decline since 1992,(427) and that wetland losses in 1995 were therefore less than the 1982-1992 average. Nevertheless, if one assumes a gross wetland loss rate of 156,000 acres, this is still likely to be less than the amount of acreage restored by the North American Waterfowl Management Program, the Wetlands Reserve Program, and Partners for Wildlife combined.(428) Although wetland loss and restoration numbers are not completely reliable,(429) when one also includes restoration efforts by state agencies and private groups, the case that America has achieved no net loss of wetlands becomes even stronger.(430)

The aforementioned federal incentive programs operate by entering into private agreements with landowners to restore wetlands on their property. The programs typically cover the cost of restoration and the purchase of a permanent or multi-year easement to ensure that the wetland is protected. While the North American Waterfowl Management Program, Wetlands Reserve Program, and Partners for Wildlife have restored nearly one million acres since their inception, the cost of these programs is relatively low, typically less than $1000 per acre, including the cost of restoration, technical assistance, and the purchase of an easement.(431)

The cost-effectiveness of incentive programs compares favorably with the costs of wetland restoration performed as mitigation under the section 404 program. In 1995, the Corps required only 45,900 acres of wetland restoration as mitigation for wetland permits.(432) However, because the Corps granted permits to convert 26,300 acres of wetlands,(433) the net restoration due to Corps mitigation requirements is less than 20,000 acres per year. While the costs to the federal program of administering this program may be fairly low, the entire Corps regulatory program spent approximately $78 million on all of section 404, including nonwetland, activities,(434) the actual per-acre costs of restoration under section 404 mitigation have been estimated to be as high as $30,000 per acre. Thus, section 404 costs are many times higher than the costs of the voluntary, incentive-based programs.(435)

Critics of restoration projects note the high failure rate of section 404 mitigation projects.(436) In 1990, the Fish and Wildlife Service found that two-thirds of wetland mitigation projects were "too wet or too dry."(437) Restoration of tidal wetlands face particular difficulty.(438) Overall, it appears that approximately half of mitigation projects fail to produce functioning wetlands.(439)

If so, net per-acre costs of wetland restoration through section 404 mitigation are even higher. Although restoring wetlands is inherently difficult--simply making land wet does not guarantee that it will perform wetland functions--voluntary incentive-based programs do not face quite the same problems as mandated mitigation efforts. It is well recognized that "wetland restorations undertaken outside the regulatory context are much more likely to achieve restoration goals."(440) From an economic standpoint, this makes sense. In the regulatory context, a landowner who must perform mitigation to secure a wetlands permit is focused on jumping whichever hurdles are necessary to achieve the permit. Whether the wetland mitigation project provides ecological values once it is completed is a secondary concern, at best. Moreover, "so long as the permittee makes at least some mitigation effort, it is unlikely, even if the mitigation is unsuccessful, that the Corps will take the extraordinary measure of withdrawing the permit."(441)

Incentive programs, on the other hand, as well as the private efforts discussed below, focus on enhancing particular wetland functions, typically species habitat or water purification. Therefore, the restoration efforts do not focus upon satisfying a regulatory definition, but rather on achieving the particular environmental goal. This increases the attention to ensuring that restored wetlands perform desired ecological functions and do not simply meet some arbitrary definition of wetness. Properly restored wetlands are capable of providing most, if not all, of the functions that natural wetlands provide.(442) The success of these projects demonstrates that voluntary wetland restoration, whether subsidized or not, can be a viable conservation strategy.

Finally, wetland regulation under section 404 entails additional costs, both to landowners as well as to the federal government. Landowners who are prevented from making productive use of part or all of their land can suffer substantial economic losses. To fairly evaluate the relative cost-effectiveness of voluntary programs and regulatory programs, these costs must be included.(443) Moreover, in some cases, when regulations impose near-complete economic losses, landowners will sue the federal government for compensation.(444) In these instances, the costs merely to conserve a wetland acre can reach tens of thousands of dollars. While this compensation may not be paid out of the Corps's budget, it is nonetheless a cost to the taxpayer of administering the program. When these costs, which can reach tens of thousands of dollars per acre, are incorporated into the analysis, it is hard to believe that regulatory programs are as cost-effective at conserving wetlands as voluntary, incentive-based programs.

2. Private Conservation Efforts

Not all wetland preservation and restoration is the result of government policies. Private conservation groups have been purchasing threatened habitat and funding ecological restoration efforts for decades. The most prominent of these groups is Ducks Unlimited (DU). DU restored or enhanced over 50,000 acres of wetlands in 1994 alone, in addition to its contributions to federal restoration programs.(445) Overall, DU claims that its efforts have provided "more than eight million acres of valuable nesting, brood-rearing, staging, migration, and wintering habitat."(446)

DU is merely the largest group focusing on wetland preservation and restoration. Chesapeake Wildlife Heritage (CWH), for one, focuses on wetland restoration projects in the Chesapeake Bay watershed as a means of increasing local duck populations and controlling agricultural runoff and other nonpoint source pollution.(447) The group also maintains approximately 6000 wood duck boxes that are estimated to produce approximately 25,000 wood ducks per year. Wetland restoration costs for CWH average under $2000 per acre.(448)

Even some private companies, both large and small, get into the act. Dow Chemical received a Wetland Conservation Award in 1995 for restoring several thousand acres on its various properties.(449) With the help of Ducks Unlimited, the Sebastiani Vineyards in Sonoma Valley restored ninety acres of wetlands on the winery's property despite significant regulatory obstacles.(450) The resulting marsh, though only a few years old, is already home to over forty different species of waterfowl.(451)

Private conservation and restoration efforts play a critical role in protecting prairie potholes and other wetlands that may be beyond the reach of federal regulatory authority. In 1991 the private conservation group Delta Waterfowl created the "Adopt a Pothole" program under which it contracts with farmers to preserve or restore prairie potholes. By 1994 the program was leasing 1400 sites in Minnesota, North Dakota, and southern Manitoba, Canada.(452) Nesting success rates at "adopted" sites are substantially higher than at unadopted sites.(453)

Whether private conservation efforts could fully replace federal regulatory efforts or not, they already play a significant and underappreciated role in wetlands conservation. Combined with state regulatory programs and federal nonregulatory efforts, private conservation would likely contribute to substantial wetlands conservation even if the section 404 program were to disappear altogether. Indeed, there is reason to believe that private conservation efforts would increase in the absence of federal land-use controls. Because the section 404 program applies equally to human-created or restored and natural wetlands, it can create substantial incentives against wetland restoration. This is because wetland restoration projects on private land can expose a private landowner to new federal land-use controls on his or her land, thereby lowering land values and increasing bureaucratic limitations on desired land uses. If the specter of onerous environmental regulation hangs over private land use decisions, private landowners will be less likely to allow, let alone invest in, environmental improvements on their lands.

It is well documented that land-use controls can create perverse incentives against private conservation efforts. For instance, it is widely accepted that the Endangered Species Act, which operates in a similar fashion to section 404, often discourages conservation efforts, and even creates incentives for habitat destruction.(454) As Sam Hamilton, former Fish and Wildlife Service administrator for the State of Texas, noted, "The incentives are wrong here. If I have a rare metal on my property, its value goes up. But if a rare bird occupies the land, its value disappears."(455) Given these incentives, why would a landowner wish to engage in sound environmental stewardship and risk substantial economic penalties? If anything, the landowner would want to destroy existing habitat, insofar as such actions are legal.

Conservationists working on the ground confirm that land-use regulations have these perverse effects at the expense of habitat. According to Dr. Larry McKinney, Director of Resource Protection for the Texas Parks and Wildlife Department, "While I have no hard evidence to prove it, I am convinced that more habitat for the black-capped vireo, and especially the golden-cheeked warbler, has been lost in ... Texas since the listing of these birds than would have been lost without the ESA at all."(456) Similarly, the Fish and Wildlife Service has acknowledged that the threat of federal regulation on private land has led to habitat loss. In the Pacific Northwest, habitat destruction has been encouraged by land-use restrictions imposed to protect the northern spotted owl. In 1995, the Fish and Wildlife Service reported in the Federal Register that these regulations have made private landowners fear the lost use of their land and that "this concern or fear has accelerated harvest rotations in an effort to avoid the regrowth of habitat that is usable by owls."(457)

There is little empirical evidence that this phenomenon is occurring in the context of wetlands, but landowners have clearly been penalized for actions that had the effect of creating wetlands.(458) It is impossible to measure the amount of wetlands that would have been restored or created absent federal regulations that discourage such activities, and the legal risks of actively destroying wetlands is greater than that of making unoccupied land unsuitable for endangered species.(459) Insofar as private landowners are threatened with the potential loss of the productive use of their land by environmental statutes, they will have an incentive not to provide whatever environmental amenity the federal government is seeking to protect.(460) The end result is that in some instances federal regulations discourage the conservation efforts they are supposed to support, leading inexorably, to the final question for this Article to address.

C. Does Section 404 Save Wetlands Anyway?

It is quite possible that the combination of state wetland conservation programs, private efforts, and nonregulatory federal programs will still provide less environmental protection than some environmental activists would like. Given the absolutist nature of many environmentalist goals, this should be no surprise. When measured against such utopian standards, however, each and every environmental program will be deemed a failure. Whether or not a given environmental regime leads to the recreation of an earthly Eden is not the relevant measure of its desirability. The relevant question is whether wetlands fare better, worse, or the same when protected by a combination of state regulation, nonregulatory federal programs, and private efforts than under the current regime, which is dominated by the section 404 program.

Given the record of section 404, one could argue that subjecting federal wetlands regulations to the limits of Lopez would lead to better wetland protection. Environmentalists have long noted that the nationwide permits, under which whole classes of activities are effectively exempt from regulation, allow for substantial wetland losses.(461) The result, some charge, is that section 404 does not protect many wetlands. According to one prominent environmental critic:

   Section 404 has mutated into a fast track for wetland wreckers and a hoax
   on the American public. It is a hoax perpetrated and perpetuated by a
   wasteful bloated bureaucracy that is efficient only at finding ways to
   shirk its obligations and that when beaten upon by developers, spews
   wetland destruction permits as if it were a pinata.(462)

While those who have been on the receiving end of Corps regulation would no doubt dispute the claim that the Corps "spews" permits,(463) there is a growing realization that section 404 is not providing the level of wetland protection that is expected of it, and may not even be able to take much credit for the wetland conservation successes that have been achieved over the preceding decades.

Wetland losses have slowed substantially over the past several decades. The first National Wetlands Inventory report, covering 1954 to 1974, estimated that annual losses averaged 458,000 acres per year.(464) A second study, covering 1974 to 1983, estimated that wetland losses averaged 290,200 acres per year during that period.(465) A third government study, the Natural Resources Inventory, estimated that from 1982 to 1992 wetland losses slowed even further to approximately 156,000 acres per year.(466) According to federal wetland specialists, since the 1970s "wetland losses, particularly due to agricultural uses, have dropped sharply."(467)

At first blush, one might conclude that a decline in wetland losses beginning in the mid-1970s would be due to the section 404 program. A closer look at the data, however, suggests otherwise. Most of the decline in wetland losses is due to the dramatic slowdown in wetland conversions for agricultural purposes. Wetland losses due to development have increased in recent years, even as the overall rate of wetland losses declined.(468) Indeed, wetland losses due to development were actually higher during the 1980s than in the 1954 to 1974 period, prior to the existence of any federal wetlands regulation.(469) As even defenders of the section 404 program note, these trends do not "seem consistent with a perceived tightening of wetland regulation under section 404 and in state programs since 1987."(470)

Defenders of federal regulations under section 404 no doubt would argue that wetland losses would be substantially higher were it not for federal regulations. If section 404 protects wetlands from development, then one would expect it to reduce overall development in those areas with the greatest proportion of wetlands. As the federal program expanded over the past fifteen years, an increasing amount of development should have been diverted from areas with a high proportion of wetlands to areas with fewer wetlands, and, therefore, fewer federal limitations on development. Wetland losses due to urban development from 1982 to 1992, however, did not decline.(471) Therefore, if section 404 is a substantial deterrent to development of wetlands, increases in urban development over the period should be higher in those areas with fewer wetlands. This is not the case. An analysis of state-by-state housing trends, adjusted for initial housing stock and population, finds that housing starts were actually greater in those states with a higher percentage of wetlands.(472) Thus, if section 404 is preventing substantial wetland losses, there is little evidence for it in the data.

If section 404 is not responsible, then what explains the decline in wetlands losses? The available evidence suggests that the drop is primarily the result of declines in agricultural conversions due to increased agricultural productivity. The Swampbuster program, which cuts off most federal agriculture subsidies to farmers that convert wetlands, may have had a role in this trend, but the reduction in conversions occurred prior to Swampbuster's enactment in 1985, suggesting that other factors must have played a role.(473) The Office of Technology Assessment, for example, noted in 1984 that the decline in wetland conversion rates from the 1950s and 1960s was "due primarily to declining rates of agricultural drainage, and secondarily to government programs that regulate wetlands."(474) As the productivity of farmland increases, the demand for new cropland falls, as does the demand to convert wetlands into farmland. Draining wetlands to plant crops is simply not as profitable as it once was.(475) As a result, gross losses of wetlands due to development now outnumber losses to agriculture by more than two to one.(476)

Gross rates of wetland loss are estimated at over 150,000 acres per year.(477) Yet in 1995 the Corps of Engineers processed wetland permits to fill only 26,000 acres of wetlands.(478) This means that section 404 does not account for over eighty percent of the wetland losses that occur each year. Environmental activists claim that the answer is to tighten the screws, close the loopholes provided by the nationwide permits, and further extend federal land use regulations. Such an approach would severely tax the Corps's ability to perform its current functions, including regulatory programs other than 404, exacerbate any perverse incentives to develop wetlands created by existing regulation, and do little to encourage greater conservation. If the Corps were forced to review and process individual permits for all of the landowners that are estimated to take advantage of nationwide permit 26, which expedites the approval of plans to fill small, isolated wetlands, the resulting increase in workload "would render the program ineffective and would be a disservice to the American public and overall environmental protection."(479) Simply prohibiting all use of all lands nationwide conceivably classifiable as wet is not a politically viable option--and with good reason.

Section 404 certainly discourages some development. Although only a small percentage of individual permit applications are denied, a substantial number are withdrawn. Between October 1, 1988 and September 30, 1993, over half of all the individual permits submitted were withdrawn before the Corps could make a decision.(480) Since October 1990, "withdrawals have exceeded issuances and denials combined.(481) Even when the Corps eventually grants the permit, substantial delays may be involved. According to one study, delays prior to a decision usually exceed the Corps's own guidelines.(482) In one case, it took the Corps 705 days to process an application to fill 0.009 acres of wetland for a local mosquito control project.(483) Another permit that would have affected 0.0006 acres of wetlands-26 square feet, or half the size of a ping-pong table-experienced delays of 450 days before it was withdrawn.(484) Permits for federal agencies appear to be processed more rapidly, and with fewer mitigation requirements. When the Fish and Wildlife Service sought a permit to clear nearly 900 acres of wetlands, most of which it had already cleared, the Corps processed the permit in 160 days and required no mitigation.(485)

The section 404 program faces limits that are difficult, if not impossible, to overcome. Even though the Corps evaluates permits for only a small portion of wetland development, it has neither the staff nor the resources to engage in a more comprehensive job. Additionally, federal agencies are inherently limited in their ability to control local land use; a federal regulatory program can accomplish only so much in this area. A combination of less constitutionally suspect, alternative approaches could well result in substantial improvements in wetlands conservation while avoiding much of the cost and controversy associated with federal wetlands regulation. Thus, were federal courts to restrict the regulatory reach of the Army Corps of Engineers, the results would be anything but an environmental disaster.

VI. CONCLUSION

When the Fourth Circuit ruled that the Corps of Engineers had exceeded constitutional limits on federal regulation of wetlands, environmental activists responded with great concern.(486) If the Constitution limits federal Commerce Clause authority to protect wetlands and other environmental amenities, they wondered, how can environmental protection continue? The assumption that only federal regulation is capable of safeguarding environmental quality is so ingrained in environmental discussions that few considered the possibility that federal regulation might be unnecessary for the maintenance and enhancement of many environmental values. Yet, as this Article has attempted to show, there is substantial reason to believe that reimposing constitutional limits on federal regulatory authority could improve environmental protection efforts. Federal incentive programs, combined with state and private efforts, could well provide better environmental protection than federal regulation from Washington D.C. of every wet spot in the nation. As conservation writer George Reiger noted, "even if the size of the Corps's stick has been whittled down, we'll still have carrots to offer wetland owners, and that may have always been the best way to achieve a net national gain in wetlands."(487)

Regrettably, it seems that few within regulatory agencies or the broader environmental policy community understand this message. The Corps may not have appealed the Wilson ruling, but it continues to proceed in the rest of the country as if the ruling never happened. As this Article is being written, the Corps is resuming its prosecution of Mr. Wilson. Like a persistent child from the Sunday comics, the Corps does not know how to quit when it is ahead. If wetlands conservation is its true goal, it would do better to stop menacing the likes of Mr. Wilson, and allow the Fourth Circuit's decision to prompt a long-overdue reevaluation of federal environmental policy.

(1) Todd Shields, Filled Maryland Wetland at Center of Criminal Trial; Developer Accused of Several Violations, WASH. POST, Jan. 21, 1996, at B4.

(2) United States v. Wilson, 133 F.3d 251, 254 (4th Cir. 1997).

(3) Timothy B. Wheeler, Builder May Face Jail for Filling in Wetlands; Stiff Fines Could Make Company Go Bankrupt, BALTIMORE SUN, June 17, 1996, at B1 (quoting James Parker, President of HOH Associates, a Virginia-based land planning firm).

(4) U.S. EPA Announces Prison Time, Big Fines in Wetlands Case, P.R. NEWSWIRE, June 18, 1996, available in LEXIS, News Library, PR Newswire File (quoting U.S. Attorney Lynne A. Battaglia).

(5) Todd Shields, Judge Fines Developers $4 Million; IGC Illegally Filled Wetlands in Charles, WASH. POST, June 18, 1996, at D1 (quoting U.S. Attorney Lynne A. Battaglia),

(6) Letter from Harold L. Nelson for William E. Treischman, Jr., Chief, Planning Division, Baltimore District, U.S. Army Corps of Engineers to Earl DeMaris, Acting Assistant Administrator, NSW Communities Administration, U.S. Dep't of Housing & Urban Dev. (Sept. 30, 1976) (on file with author).

(7) See infra Part II.B.

(8) Max Boot, The Wetlands Gestapo, WALL ST. J., Mar. 3, 1997, at A18.

(9) Todd Shields, Md. Builder Accused of Wetland Violations; Charles County Firm Faces Federal Charges, WASH. POST, Oct. 14, 1995, at C3 (quoting U.S. Attorney Lynne A. Battaglia).

(10) U.S. EPA Announces Prison Time, supra note 4.

(11) United States v. Wilson, 133 F.3d 251, 253 (4th Cir. 1997).

(12) 33 U.S.C. [subsections] 1311(a), 1319(c)(2)(A) (1994).

(13) Shields, supra note 5, at D1. IGC and its subsidiary, St. Charles Associates, were fined an additional $3 million and required to engage in a wetland restoration project. Wilson, 133 F.3d at 254.

(14) The regulations define waters of the United States to include wetlands, the "degradation ... of which could affect interstate ... commerce." 33 C.F.R. [sections] 328.3(a)(3) (1998).

(15) Wilson, 133 F.3d at 255 (quoting United States v. Lopez, 514 U.S. 549 (1995)).

(16) 514 U.S. 549 (1995).

(17) Id.

(18) Wilson, 133 F.3d at 254.

(19) Id. at 257. The court presumed that Congress intended to limit the Corps's jurisdiction under the Clean Water Act to the bounds proscribed by the Commerce Clause, and therefore the statute itself was not an unconstitutional assertion of federal power. Id. at 256-57.

(20) Federal prosecutors unsuccessfully petitioned the Fourth Circuit panel to rehear the case. Rehearing Sought on Appeals Court Ruling Limiting Reach of Army Corps Regulation, 10 Daily Env't Rep. (BNA) A4 (Jan. 15, 1998); Appeals Court Upholds Reversal in Wetlands Case, WASH. Post, Jan. 30, 1998, at B3. No petition for en banc review or certiorari to the Supreme Court was ever filed. On January 30, 1998, however, federal prosecutors announced that they would retry Wilson and IGC. Prosecutors Will Retry Wetlands Case, WASH. POST, Jan. 31, 1998, at B3.

(21) See, e.g., Leslie Salt Co. v. United States, 896 F.2d 354, 360 (9th Cir. 1990), cert. denied, 498 U.S. 1126 (1991) (Leslie Salt I); Leslie Salt v. United States, 55 F.3d 1388, 1395 (9th Cir.), cert. denied, 516 U.S. 955 (1995) (Leslie Salt II); Hoffman Homes v. Administrator, United States Envtl. Protection Agency, 961 F.2d 1310, 1317 (7th Cir. 1992), vacated, 975 F.2d 1554 (Hoffman Homes I); Hoffman Homes v. Administrator, United States Envtl. Protection Agency, 999 F.2d 256, 263 (7th Cir. 1993) (Hoffman Homes II); United States v. Pozsgai, 999 F.2d 719, 733-34 (3d Cir. 1993).

(22) Given the indication in Wilson that the regulation of isolated wetlands is beyond the scope of the Commerce Clause, other landowners are likely to challenge Corps and EPA actions on similar grounds. See, e.g., Marc Davis, Builder Sues to Develop 632 Acres in Chesapeake, VIRGINIAN-PILOT, May 14, 1998, at B1 (discussing developer suing Corps alleging his land is beyond the Corps's jurisdiction). Chesapeake Bay Foundation attorney Roy Hoagland commented that "the Wilson ruling is litigation fodder for the development community.... We are going to have more and more of these disputes over the corps' [sic] jurisdiction." Id. Moreover, one Justice indicated his eagerness for the Supreme Court to address this question before Wilson was decided. Cargill v. United States, 116 S. Ct. 407, 408-09 (1995) (denial of certiorari) (Thomas, J., dissenting).

(23) 33 U.S.C. [sections] 1344 (1994).

(24) See, e.g., National Mining Ass'n v. United States Army Corps of Eng'rs, 145 F.3d 1399, 1401 (D.C. Cir. 1998); Loveladies Harbor Inc. v. United States, 27 F.3d 1545, 1547 (Fed. Cir. 1994) (en banc), aff'd, 28 F.3d 1171; Florida Rock Indus. v. United States, 18 F.3d 1560, 1562 (Fed. Cir. 1994), cert. denied, 513 U.S. 1109 (1995); Solid Waste Agency of North Cook County v. United States Army Corps of Eng'rs, 998 F. Supp. 946, 948 (N.D. Ill. 1998); Bowles v. United States, 31 Fed. Cl. 37, 40 (1994); Formanek v. United States, 26 Cl. Ct. 332, 334 (1992); Beure-Co. v. United States, 16 Cl. Ct 42, 43 (1988).

(25) "Wetlands regulation may be the most controversial issue in environmental law. It pits America's most biologically-productive and most rapidly-diminishing ecosystems against rights of private ownership and property development in more than 10,000 individual permit decisions a year...." Oliver A Houck & Michael Rolland, Federalism in Wetlands Regulation: A Consideration of Delegation of Clean Water Act Section 404 and Related Programs to the States, 54 MD. L. REV. 1242, 1243 (1995).

(26) See City of Boerne v. Flores, 521 U.S. 507 (1997) (limiting Congress's powers under [sections] 5 of the Fourteenth Amendment to those enumerated); Printz v. United States, 521 U.S. 98 (1997) (holding that Congress may not commandeer state officials to implement a federal regulatory scheme); Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996) (holding Congress lacks the authority to abrogate states' Eleventh Amendment immunity from liability); New York v. United States, 505 U.S. 144 (1992) (holding Congress may not compel state legislatures to adopt a regulatory program); Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) (holding that historic state police powers will not be superseded by federal law without clear statement of congressional intent); Gregory v. Ashcroft, 501 U.S. 542 (1991) (upholding state constitution's mandatory retirement age for judges against challenge under federal law).

(27) Other recent federalism decisions create opportunities for limiting federal environmental regulation as well. See infra note 43.

(28) See Richard Lazarus, Corps Slips on Lopez, FWS Wins, ENVTL. F., Mar.-Apr. 1998, at 8 (noting that the Corps's wetlands regulations were "clearly" constitutional prior to Lopez, but unconstitutional afterwards); see also David A. Linehan, Endangered Regulation: Why the Commerce Clause May No Longer Be Suitable Habitat for Endangered Species and Wetlands Regulation, 2 TEX. REV. L. & POL. 365 (1998); Lori J. Warner, The Potential Impact of United States v. Lopez on Environmental Regulation, 7 DUKE ENVTL. L. & POL'Y F. 321 (1997); J. Blanding Holman IV, After United States v. Lopez: Can the Clean Water Act and the Endangered Species Act Survive Commerce Clause Attack? 15 VA. ENVTL. L. REV. 139 (1995). But see Steven M. Johnson, United States v. Lopez: A Misstep, But Hardly Epochal for Federal Environmental Regulation, 5 N.Y.U. ENVTL. L.J. 33 (1996) (arguing that federal wetlands regulation will survive the inevitable Commerce Clause challenges).

(29) The Fourth Circuit's analysis in Wilson was rather brief because the court sought to interpret the Clean Water Act so as to avoid the constitutional difficulty of determining the outer bounds of the Commerce Clause. United States v. Wilson, 133 F.3d 251, 257 (4th Cir. 1997) ("Absent a clear indication to the contrary, we should not lightly presume that merely by defining `navigable waters' as `the waters of the United States,' ... Congress authorized the Army Corps of Engineers to assert its jurisdiction in such a sweeping and constitutionally troubling manner."). In the Leslie Salt cases the analysis of the Ninth Circuit Court of Appeals was even more cursory. Leslie Salt v. United States, 896 F.2d 354, 360 (9th Cir. 1990) (Leslie Salt I); Leslie Salt v. United States, 55 F.3d 1388, 1392 (9th Cir. 1995) (Leslie Salt II).

(30) Lazarus, supra note 28.

(31) It is quite possible that the Corps of Engineers could defend the existing regulatory program simply by reformulating the construction of the rule. See id.; see also, Dennis J. Priolo, Section 404 of the Clean Water Act: The Case for Expansion of Federal Jurisdiction over Isolated Wetlands, 30 LAND & WATER L. REV. 91 (1995) (arguing that the Corps should explicitly adopt the "cumulative effect" doctrine to establish jurisdiction over isolated wetlands).

(32) United States v. Lopez, 514 U.S. 549, 574 (1995) (Kennedy, J., concurring).

(33) Id.

(34) See Antonin Scalia, Originalism: The Lesser Evil, 57 U. CIN. L. REV. 849, 863-64 (1989) (noting that even staunch advocates of originalist jurisprudence are "faint-hearted" in their application of it).

(35) Lopez, 514 U.S. at 552.

(36) Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176 (1803); see also, City of Boeme v. Flores, 117 S. Ct. 2157, 2162 (1997).

(37) U.S. CONST. art. I, [sections] 8.

(38) See Lopez, 514 U.S. at 588 n.2 (Thomas, J., concurring) ("Even to speak of `the Commerce Clause' perhaps obscures the actual scope of that Clause.'). Nonetheless, this Article will observe the convention of referring to it as the Commerce Clause.

(39) Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 194-95 (1824).

(40) Alex Kozinski, Introduction to Volume Nineteen, 19 HARV. J. L. & PUB. POL'Y 1, 6 (1995).

(41) See, e.g., John Dwyer, The Commerce Clause and the Limits of Congressional Authority to Regulate the Environment, 25 Envtl. L. Rep. (Envtl. L. Inst.) 10, 408 (1995).

(42) See, e.g., National Ass'n of Home Builders v. Babbitt, 103 F.3d 1041 (D.C. Cir. 1997), cert. denied, 118 S. Ct. 2340 (1998); United States v. Olin, 107 F.3d 1506 (11th Cir. 1997).

(43) It should be noted, however, that other recent Supreme Court decisions, such as New York v. United States, 505 U.S. 144 (1992), limiting the scope of federal power vis-a-vis the states have resulted in successful challenges to environmental laws. See ACORN v. Edwards, 81 F.3d 1387 (5th Cir. 1996) (court invalidates federal requirement that states establish program to test for lead in drinking water); Board of Natural Resources v. Brown, 992 F.2d 937 (9th Cir. 1993) (court invalidates federal statute requiring state-imposed limits on timber exports). See generally Jonathan H. Adler, Comment, The Green Aspects of Printz: The Revival of Federalism and Its Implications for Environmental Law, 6 GEO. MASON L. REV. 573 (1998) [hereinafter Adler, Green Aspects].

(44) Gibbons, 22 U.S. (9 Wheat.) at 196.

(45) Id.

(46) See, e.g., United States v. Lopez, 514 U.S. 603, 604, 609 (1995) (Souter, J., dissenting).

(47) Gibbons, 22 U.S. (9 Wheat.) at 203.

(48) Id.

(49) The Court was very explicit on this point:

   [T]he enumeration of the particular classes of commerce, to which the power
   was to be extended, would not have been made, had the intention been to
   expand the power to every description. The enumeration presupposes
   something not enumerated; and that something, if we regard the language or
   the subject of the sentence, must be the exclusively internal commerce of a
   State.

Id. at 194-95.

(50) Id. at 194.

(51) Lopez, 514 U.S. at 597 (Thomas, J., concurring) (citing United States v. Dewitt, 76 U.S. (9 Wall.) 41 (1870) (striking down ban on sale of illuminating oils)).

(52) See United States v. E.C. Knight Co., 156 U.S. 1 (1895) (holding that Congress cannot bar monopoly in manufacture); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (invalidating federal regulation of intrastate poultry sales); Carter v. Carter Coal Co., 298 U.S. 238 (1936) (invalidating regulation of "unfair" labor practices).

(53) Houston, E. & W. Tex. Ry. v. United States, 234 U.S. 342 (1914) (Shreveport Rate Cases).

(54) Stafford v. Wallace, 258 U.S. 495 (1922).

(55) Coronado Coal v. United Mine Workers, 268 U.S. 295 (1925).

(56) 301 U.S. 1, 37 (1937) (upholding the National Labor Relations Act).

(57) Id.

(58) 317 U.S. 111 (1942) (upholding the application of the Agricultural Adjustment Act to the growing of wheat for home consumption).

(59) Id. at 128.

(60) United States v. Lopez, 514 U.S. 549, 600 (1995) (Thomas, J., concurring).

(61) Some argue, quite persuasively, that the Wickard test "facilitated unlimited expansion of the scope of the commerce power." Richard A. Epstein, Constitutional Faith and the Commerce Clause, 71 NOTRE DAME L. REV. 167, 173 (1996). Note, however, that the activity in Wickard, growing wheat, was still economic in character, and that Filburn himself was a commercial wheat farmer engaged in interstate commerce.

(62) See Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264 (1981); Perez v. United States, 402 U.S. 146 (1971); Maryland v. Wirtz, 392 U.S. 183 (1968); Katzenbach v. McClung, 379 U.S. 294 (1964); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964).

(63) In Hodel, for example, Justice Rehnquist insisted that the Commerce Clause had limits, and cited dicta to that effect from numerous prior cases, but still voted to uphold the Surface Mining Control and Reclamation Act. 452 U.S. at 310 (Rehnquist, J., concurring) ("It would be a mistake to conclude that Congress'[s] power to regulate pursuant to the Commerce Clause is unlimited.").

(64) Kozinski, supra note 40, at 5. Or, as Justice Rehnquist noted in Hodel, "one could easily get the sense from this Court's opinions that the federal system exists only at the sufferance of Congress." Hodel, 452 U.S. at 308 (Rehnquist, J., concurring).

(65) 18 U.S.C. [sections] 922(q)(1)(A) (Supp. V 1998).

(66) United States v. Lopez, 514 U.S. 549, 551 (1995) (citing Tex. Penal Code Ann. [sections] 46.03(a)(1) (West Supp. 1994)).

(67) Lopez v. United States, 2 F.3d 1342 (5th Cir. 1993).

(68) See Epstein, supra, note 61, at 167 ("At long last the federal government has lost a case that challenged its power to regulate under the Commerce Clause."); see also, Linda Greenhouse, Focus on Federal Power, N.Y. TIMES, May 24, 1995, at A1 (quoting Professor Laurence H. Tribe that "[i]t is hard to overstate the importance of how close they [are] to something radically different from the modern understanding of the Constitution.").

(69) Lopez, 514 U.S. at 552.

(70) Of course, other portions of the Constitution, notably the Fourteenth Amendment, also confer powers upon the Congress, but this does not change the fact that the federal government is one of delegated power.

(71) Lopez, 514 U.S. at 559.

(72) Id. at 560.

(73) Id. at 551.

(74) Id. at 558-59.

(75) See, e.g., United States v. Pappadopoulos, 64 F.3d 522 (9th Cir. 1995).

(76) See, e.g., United States v. Olin, 107 F.3d 1506 (11th Cir. 1997) (upholding the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) under Lopez).

(77) See, e.g., Brzonkala v. Virginia Polytechnic Inst. & State Univ., 1999 U.S. App. LEXIS 3457 (4th Cir. 1999) (en banc) (invalidating subtitle C of the Violence Against Women Act under Lopez).

(78) 317 U.S. 111 (1942). "Any first-year law student can show by cumulating individually insignificant effects that any given congressional regulation of commerce rationally might be based on the belief that a state activity was generating significant external effects on other states and thus on interstate commerce." Steven G. Calabresi, A Government of Limited and Enumerated Powers: In Defense of United States v. Lopez, 94 MICH. L. REV. 752, 802 (1995). This is exactly the approach taken in Justice Breyer's dissent to argue for upholding the Gun Free School Zone Act. Lopez, 514 U.S. at 619-23 (Breyer, J., dissenting).

(79) Lopez, 514 U.S. at 564. Indeed, as Justice Thomas noted, "When asked at oral argument if there were any limits to the Commerce Clause, the Government was at a loss for words. Likewise, the principal dissent insists that there are limits, but it cannot muster even one example." Id. at 600 (Thomas, J., concurring) (citations omitted).

(80) Id. at 619-23 (Breyer, J., dissenting).

(81) Id. at 620.

(82) Estimates of the aggregate economic impact of insomnia to the national economy range from $15 billion to over $100 billion per year. Brzonkala v. Virginia Polytechnic Inst. & State Univ., 935 F. Supp. 779, 793 (W.D. Va. 1996).

(83) Lopez, 514 U.S. at 564.

(84) Both the dissent and various observers note that the Lopez court applied a stricter level of scrutiny than the "rational basis" test traditionally applied in challenges to congressional authority under the Commerce Clause. Id. at 608-14 (Souter, J., dissenting); Epstein, supra note 61, at 177 (noting that the Court's willingness to, question congressional findings indicates that it is actually applying a form of intermediate scrutiny).

(85) This argument is laid out in Deborah Jones Merritt, Commerce!, 94 MICH. L. REV. 674, 742-50 (1995).

(86) See id. at 675. This is part of the reason that the pre-New Deal Court's Commerce Clause decisions are so routinely criticized for their inconsistencies.

(87) Id. at 742.

(88) See id. at 746-47.

(89) Lopez, 514 U.S. at 560-61 (noting that growing wheat for home consumption is an economic activity in a manner that gun possession is not).

(90) Merritt, supra note 85, at 679.

(91) Brzonkala v. Virginia Polytechnic & State Univ., 935 F. Supp. 779, 792 (W.D. Va. 1996).

(92) Id; see Philip P. Frickey, The Fool on the Hill: Congressional Findings, Constitutional Adjudication, and United States v. Lopez, 46 CASE W. RES. L. REV. 695, 706 (1996). As Professor Frickey notes, "the Court seemed to distinguish all earlier cases, in which commercial transactions were the justifications for the exercise of the commerce power." Id.; see also Brzonkala v. Virginia Polytechnic Inst. & State Univ., 1999 U.S. App. LEXIS 3457, *25 (4th Cir. 1999) (en banc) ("The Court also emphasized that, any dictum in its previous cases notwithstanding, it had never extended the substantially affects test to uphold the regulation of a noneconomic activity in the absence of a jurisdictional element.").

(93) Lopez, 514 U.S. at 559, 561 (emphasis added).

(94) Id. at 580 (Kennedy, J., concurring).

(95) Id. at 561 (emphasis added).

(96) See Robert F. Nagel, The Future of Federalism, 46 CASE W. RES. L. REV. 643, 646 (1996) ("the Court does not engage in the required analysis.... [T]hey did not make the inquiry at all.").

(97) See generally MICHAEL S. GREVE, REAL FEDERALISM: WHY IT MATTERS, HOW IT COULD HAPPEN (1999) (especially Chapter 3).

(98) See supra Part II.B; Adler, Green Aspects, supra note 43, at 586-89.

(99) 505 U.S. 144 (1992).

(100) Id. at 156.

(101) Id.

(102) Lopez v. United States, 514 U.S. 549, 583 (1995). (Kennedy, J., concurring).

(103) Id. at 577 (Kennedy, J. concurring).

(104) 301 U.S. 1, 37 (1937).

(105) Id. Justice O'Connor made a similar point in Garcia v. San Antonio Metropolitan Transit Authority: "If state autonomy is ignored in assessing the means by which Congress regulates matters affecting commerce, then federalism becomes irrelevant simply because the set of activities remaining beyond the reach of such a commerce power `may well be negligible.'" 469 U.S. 528, 588 (1985) (O'Connor, J., dissenting).

(106) Lopez, 514 U.S. at 561 n.3 (quoting Engle v. Isaac, 456 U.S. 107, 128 (1982)).

(107) Id. at 580 (Kennedy, J., concurring).

(108) Id. at 581 (Kennedy, J., concurring).

(109) Id. at 583 (Kennedy, J., concurring).

(110) Id. As Hamilton noted, "[t]he administration of private justice between the citizens of the same State, the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation, can never be desirable cares of a general jurisdiction." THE FEDERALIST NO. 17, at 111 (Alexander Hamilton) (Tudor Publishing 1937).

(111) The language of the Domestic Violence Clause may suggest that the federal government's authority over crime is particularly limited. U.S. CONST. art. IV, [sections] 4. A strict reading implies that the federal government does not have jurisdiction over domestic criminal activity except in those cases in which a state government requests assistance. See Jay S. Bybee, Insuring Domestic Tranquility: Lopez, Federalization of Crime, and the Forgotten Role of the Domestic Violence Clause, 66 GEO. WASH. L. REV. 1 (1997) for an elaboration of this argument.

(112) Lopez, 514 U.S. at 564 (citing the government's oral argument).

(113) This can be challenged for, as Michael Greve notes, nuisance abatement is also a traditional state concern even though the Supreme Court has routinely authorized expansions of federal authority in this area. Moreover, there is substantial federal involvement in the education arena, suggesting that this issue is not the prerogative of state and local governments that it once was. GREW, supra note 97, at 30-31.

(114) United States v. Oregon, 366 U.S. 643, 649 (1961); see also Bybee, supra note 111, at 13-15.

(115) Federal Energy Regulatory Comm'n v. Mississippi, 456 U.S. 742, 768 n.30 (1982).

(116) Lopez, 514 U.S. at 581-83 (Kennedy, J., concurring).

(117) Epstein, supra note 61, at 180.

(118) See infra Part V.A.1.

(119) GREVE, supra note 97, at 32.

(120) Kennedy argues that the emergence of a "single national market" justifiably led to the expansion of Congress's Commerce Clause power, such that today "Congress can regulate in the commercial sphere on the assumption that we have a single national market and a unified purpose to build a stable national economy." Lopez, 514 U.S. at 568, 574 (Kennedy, J., concurring).

(121) United States v. Cobb, 144 F.3d 317 (4th Cir. 1998); United States v. Romero, 122 F.3d 1334 (10th Cir. 1997), cert. denied, 118 S. Ct. 1310 (1998); United States v. McHenry, 97 F.3d 125 (6th Cir. 1996); United States v. Coleman, 78 F.3d 154 (5th Cir. 1996); United States v. Hutchinson, 75 F.3d 626 (11th Cir. 1996) (per curiam); United States v. Bishop, 66 F.3d 569 (3d Cir. 1995); United States v. Robinson, 62 F.3d 234 (8th Cir. 1995); United States v. Oliver, 60 F.3d 547 (9th Cir. 1995).

(122) See, e.g., United States v. Pappadopoulos, 64 F.3d 522 (9th Cir. 1995); United States v. Denalli, 73 F.3d 328 (11th Cir. 1996). In these cases, the federal arson law, 18 U.S.C. [setions] 844(i), was upheld, even though the convictions were overturned.

(123) See, e.g., Hoffman v. Hunt, 126 F.3d 575 (4th Cir. 1997); United States v. Soderna, 82 F.3d 1370 (7th Cir. 1996); Cheffer v. Reno, 55 F.3d 1517 (11th Cir. 1995).

(124) National Ass'n of Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997).

(125) United States v. Olin, 107 F.3d 1506 (11th Cir. 1997).

(126) Brzonkala v. Virginia Polytechnic Inst. & State Univ., 199 U.S. App. LEXIS 3457 (4th Cir. 1999) (en banc) (invalidating 42 U.S.C. [sections] 13981).

(127) United States v. Wall, 92 F.3d 1444, 1448 (6th Cir. 1996) (upholding 18 U.S.C. [sections] 1955, prohibiting intrastate illegal gambling).

(128) Compare Brzonkala v. Virginia Polytechnic Inst. & State Univ., 132 F.3d 949 (4th Cir. 1997) (upholding subtitle C of the Violence Against Women Act), rev'd, 1999 U.S. App. LEXIS 3457 (4th Cir. 1999) (en banc), with Hoffman v. Hunt, 126 F.3d 575 (4th Cir. 1997) (upholding the Freedom of Access to Clinic Entrances Act). "The majority opinion [in Brzonkala] is ... categorically inconsistent with our court's recent carefully written and analyzed opinion in Hoffman v. Hunt." Brzonkala, 132 F.3d at 977 (Luttig, J., dissenting) (emphasis omitted).

(129) 73 F.3d 328 (11th Cir. 1996).

(130) 64 F.3d 522 (9th Cir. 1995).

(131) 18 U.S.C. [sections] 844(i) (1994).

(132) Pappadopoulos, 64 F. 3d at 524.

(133) Id. at 525.

(134) Denalli, 73 F.3d at 331.

(135) Merritt, supra note 85, at 713. Taken as a whole, however, the Supreme Court's reinvigoration of federalism could lead to substantial legal changes. See, e.g., Condon v. Reno, 155 F.3d 453 (4th Cir. 1998) (invalidating the Driver's Privacy Protection Act under the Tenth Amendment); see also, Adler, Green Aspects, supra note 43, at 609-16.

(136) Of course, were courts to apply the original interpretation of the Commerce Clause, as outlined in Gibbons, many of these statutes would be judged facially unconstitutional. Although Lopez has been characterized as a radical decision, it is actually less far reaching than a rigorous textualist interpretation. See United States v. Lopez, 514 U.S. 549 (1995) (Thomas, J., concurring).

(137) There were some early nonregulatory federal efforts, however, that were focused almost exclusively on protecting waterfowl habitat. For instance, as early as 1929 Congress authorized land acquisition to protect migratory bird habitat, and in the 1930s Congress created the duck stamp program and dedicated tax revenues from excise taxes on hunting equipment to fund additional habitat preservation. Robert Beck, The Movement in the United States to Restoration and Creation of Wetlands, 34 NAT. RESOURCES J. 781, 783-84 (1994).

(138) Id. at 788-89.

(139) The National Audubon Society was formed in 1905, although the first local society was created in 1886. JONATHAN H. ADLER, ENVIRONMENTALISM AT THE CROSSROADS 2 (1995) [hereinafter ADLER, ENVIRONMENTALISM]. Ducks Unlimited was founded in 1937. Beck, supra note 137, at 784.

(140) Paul Scodari notes that a "historical lack of knowledge concerning the beneficial aspects of wetlands helps explain" federal policies that directly caused or subsidized wetland loss and degradation. PAUL SCODARI, MEASURING THE BENEFITS OF FEDERAL WETLANDS PROGRAMS 16 (1997). This lack of knowledge is most likely the explanation for the slowness of state-level wetland conservation efforts as well. However, many state efforts began before or during the creation of federal regulatory programs. See infra Part V.A.2.

(141) According to Kent Jeffreys, the first use of the term "wetlands" by the federal government was by the Fish and Wildlife Service in the 1950s. Kent Jeffreys, Whose Lands Are Wetlands?, J. REG. & SOC. COSTS, Mar. 1992, at 35.

(142) Leovy v. United States, 177 U.S. 621, 636 (1900).

(143) Beck, supra note 137, at 781.

(144) Kent Jeffreys notes that "[w]hatever they have been called, throughout most of American history, the federal government has viewed true wetlands as an obstacle to progress." Jeffreys, supra note 141, at 35.

(145) Swamp Land Act, ch. 84, 9 Stat. 519 (1850) (codified as amended at 43 U.S.C. [subsections] 982-994 (1994)).

(146) Jeffreys, supra note 141, at 38 (quoting NATIONAL WILDLIFE FEDERATION, STATUS REPORT ON OUR NATION'S WETLANDS 30 (1987)).

(147) SCODARI, supra note 140, at 16.

(148) THOMAS E. DAHL & CRAIG E. JOHNSON, WETLANDS, STATUS AND TRENDS IN THE COTERMINOUS UNITES STATES, MID-1970S TO MID-1980s 17 (1991).

(149) Id. Whether substantial wetland losses continued into the 1990s or not is the subject of some dispute. See discussion infra notes 159-71 and accompanying text.

(150) Michael M. Berger & Gideon Kanner, The Need for Takings Law Reform: A View from the Trenches-A Response to Taking Stock of the Takings Debate, 38 SANTA CLARA L. REV. 837, 847 n.46 (1998). Whether this would be a good or a bad thing is left to the reader.

(151) SCODARI, supra note 140, at 7.

(152) COMMITTEE ON CHARACTERIZATION OF WETLANDS, WETLANDS' CHARACTERISTICS AND BOUNDARIES, NATIONAL RESEARCH COUNCIL 3 (1995).

(153) 33 C.F.R. [sections] 328.3(b) (1998).

(154) See Margaret N. Strand, What Is a Wetland and Why Are We Still Asking?, PRACTICAL REAL EST. LAW., Mar. 1997, at 59, 61. It should be noted, however, that other federal agencies, such as the Department of Agriculture and the Fish and Wildlife Service have their own definitions, as do international treaties, such as the Ramsar Convention. Id. at 62-66.

(155) See generally OFFICE OF TECH. ASSESSMENT, WETLANDS' THEIR USE AND REGULATION 37-60 (1984).

(156) Houck & Rolland, supra note 25, at 1243.

(157) Jeffreys, supra note 141, at 36.

(158) SCODARI, supra note 140, at 5.

(159) It is important that all wetland acreage and loss estimates, including those cited in the balance of this Article, be taken with a grain of salt. The reliability of federal data on wetland acreage and trends is "questionable" according to the General Accounting Office. U.S. GENERAL ACCOUNTING OFFICE, GAO/RCED-98-150, WETLANDS OVERVIEW: PROBLEMS WITH ACREAGE DATA PERSIST 2 (1998) [hereinafter GAO].

(160) Houck & Rolland, supra note 25, at 1251.

(161) GAO, supra note 159, at 1.

(162) Id. at 10 tbl. 1.

(163) The Natural Resources Conservation Service estimates an average gross loss rate of 156,000 acres per year from 1982 to 1992. Id. at 10 tbl. 1. If the reduction in the rate of agricultural losses over this period continued, and other loss rates remained constant, the United States would have lost an estimated 141,000 acres in 1995. JONATHAN TOLMAN, COMPETITIVE ENTERPRISE INST. ENVTL. STUDIES PROGRAM, SWAMPED: How AMERICA ACHIEVED `No NET Loss' 8 (April 1997) [hereinafter TOLMAN, SWAMPED]. The GAO reports a Fish and Wildlife Service estimate of an average gross loss rate of 336,000 acres per year over the period 1985 to 1995. GAO, supra note 159, at 10 tbl. 1. However, these estimates are from a draft report that was withdrawn due to concerns about the methodology used to create the estimates. In response to inquiries, an FWS official asked that the numbers listed in the GAO report not be cited because the draft report upon which they were based "is being scrapped." E-mail from Craig Faanes, Division of Habitat Conservation, U.S. Fish and Wildlife Service (July 29, 1998) (on file with author). For a critique of the draft FWS estimates, see RALPH E. HEIMLICH, ET AL., AGRICULTURAL ECONOMIC REPORT NO. 765, WETLANDS AND AGRICULTURE: PRIVATE INTERESTS AND PUBLIC BENEFITS 23 (1998).

(164) See, e.g., Wetlands Regulatory Reform Act of 1995: Hearings on S. 851 Before the Subcomm. on Clean Air, Wetlands, Private Property, and Nuclear Safety of the Senate Comm. on Env't and Public Works, 104th Cong. 536 (1995) (testimony of January Goldman-Carter, counsel, National Wildlife Federation) (citing wetland loss rate of 290,000 acres per year from the 1970s and early 1980s as evidence "that the Nation's wetland hemorrhage continues") [hereinafter Goldman-Carter]; Vicki Monks, The Beauty of Wetlands, NAT'L WILDLIFE, June-July 1996, at 20, 24 ("[I]n spite of regulations, the most recent data show a continued loss of 290,000 acres of U.S. wetlands a year."); Houck & Rolland, supra note 25, at 1251 ("They continue to disappear at a rate approaching 300,000 acres per year."). Kathy Nemsick of the Clean Water Network, however, cites loss numbers of only 117,000 per year. Sally Deneen, Paradise Lost: America's Disappearing Wetlands, E: THE ENVTL. MAG., Nov.-Dec. 1998, at 38.

(165) HEIMLICH, ET AL., supra note 163, at 20 tbl. 2. Heimlich and his coauthors, while skeptical of the "no net loss" claim, acknowledge that "[p]rogress toward the `no net loss' goal has been more rapid than many anticipated when it was first enunciated in the late 1980's." Id. at 53.

(166) See TOLMAN, SWAMPED, supra note 163, at 8; Jonathan Tolman, Achieving No Net Loss, 17 NAT'L WETLANDS NEWSL. (Envtl. L. Inst., Washington, D.C.), May-June 1995, at 5 [hereinafter Tolman, Achieving No Net Loss]; Jonathan Tolman, How We Achieved No Net Loss, 19 NAT'L WETLANDS NEWSL. 4 (Envtl. L. Inst., Washington, D.C.), July-Aug. 1997; see also infra Part V.C.

(167) Memorandum of Agreement Between the Department of the Army and the Environmental Protection Agency Concerning the Determination of Mitigation Under the Clean Water Act Section 404(b)(1) Guidelines (Nov. 14, 1989) (on file with author). This memorandum was revised and reissued in modified form two months later. Memorandum of Agreement between the Department of the Army and the Environmental Protection Agency Concerning the Determination of Mitigation Under the Clean Water Act Section 404(b)(1) Guidelines (Feb. 6, 1990) (on file with author). For a discussion of the revisions, see Oliver A. Houck, More Net Loss of Wetlands: The Army-EPA Memorandum of Agreement on Mitigation Under the [sections] 404 Program, 20 Envtl. L. Rep. (Envtl. L. Inst.) at 10,212 (1990).

(168) GAO, supra note 159, at 9.

(169) See Jeffreys, supra note 141, at 44.

(170) GAO, supra note 159, at 1.

(171) Jon Kusler, Wetlands Delineation: An Issue of Science or Politics?, ENV'T, Mar. 1992, 7 at 10.

(172) Id. at 30.

(173) Sherry Lynn Jacobs, Comment, Strengthening Wetland Protection Programs Through State Regulation, 21 U.C. DAVIS L. REV. 227, 255 (1987).

(174) Kusler, supra note 171, at 10.

(175) Id. at 31.

(176) SCODARI, supra note 140, at 5.

(177) See infra Part V.A.2.

(178) Rivers and Harbors Act, [sections] 10, 33 U.S.C. [sections] 403 (1994).

(179) Id. [subsections] 403, 407.

(180) Mark A. Chertok, Federal Regulation of Wetlands, SB91 A.L.I.-A.B.A. 859, 864 (1997).

(181) See F. Henry Habicht II, Implementing Section 404: The View from the Justice Department, [1986] 16 Envtl. L. Rep. (Envtl. L. Inst.) 10,073, 10,074.

(182) 33 U.S.C. [subsections] 1251-1387 (1994).

(183) Id. [sections] 1251(a).

(184) United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 132-33 (1985) (citing S. Rep. No. 92-414, at 77, reprinted in 1972 U.S.C.C.A.N. 3668.).

(185) 33 U.S.C. [sections] 1311(a) (1994).

(186) Id. [sections] 1344(a). Approval of a permit by the Corps is subject to EPA's veto authority. Id. [sections] 1344(c). Additionally, the Corps must give the Fish and Wildlife Service and National Marine Fisheries Service the opportunity to comment on permit applications. 33 C.F.R. [sections] 320.4(c) (1998).

(187) 33 U.S.C. [sections] 1362(6) (1994).

(188) Id. [sections] 1362(7). It is worth noting, however, that the CWA defines "discharge of a pollutant" as "any addition of any pollutant to navigable waters from any point source." Id. [sections] 1362(12) (emphasis added).

(189) ROBERT E. BECK & C. PETER GOPERLUND, WATERS AND WATER RIGHTS 113-14, 184 (3d ed. 1988).

(190) But see United States v. Holland, 373 F. Supp. 665 (M.D. Fla. 1974) (upholding Corps's jurisdiction over nonnavigable waters and intertidal wetlands connected to navigable waters).

(191) Bernard N. Goode, The Geographic Expansion of Section 404, SB99 A.L.L.-A.B.A. 29, 31 (1997).

(192) 39 Fed. Reg. 12,119 (Apr. 3, 1974).

(193) Natural Resources Defense Council v. Callaway, 392 F. Supp. 685, 686 (D.D.C. 1975), see also, Holland, 373 F. Supp. at 665 (1972 Act establishes jurisdiction over all "waters" of the United States including intertidal wetlands).

(194) 40 Fed. Reg. 31,320 (July 25, 1975).

(195) See Goode, supra note 191, at 34-35.

(196) 33 C.F.R. [sections] 328.3(a)(1) (1998).

(197) Id. [sections] 328.3(a)(2).

(198) Id. [sections] 328.3(a)(4), (5).

(199) Id. [sections] 328.3(a)(3) (emphasis added).

(200) Id. [sections] 328.3(a)(7). The regulatory definition also excludes prior converted cropland. Id. [sections] 328.3(a)(8).

(201) Kusler, supra note 171, at 29.

(202) Even defenders of federal wetlands regulations note that "[t]he benefits of wetland protection accrue to the general public, while a large share of protection costs are borne by private landowners." SCODARI, supra note 140, at 1.

(203) 33 U.S.C. [sections] 1344(f)(1) (1994).

(204) 474 U.S. 121 (1985).

(205) Id. at 123. The Court scarcely addressed the question of what, if any, limits the Commerce Clause placed on the Corps's authority to regulate wetlands.

(206) Id. at 133.

(207) 42 Fed. Reg. 37,128 (July 19, 1977).

(208) Riverside Bayview Homes, 474 U.S. at 134. "An agency's construction of a statute it is charged with enforcing is entitled to deference if it is reasonable and not in conflict with the expressed intent of Congress." Id. at 131 (citing Chemical Manufacturers Ass'n. v. Natural Resources Defense Council, 470 U.S. 116, 125 (1985), and Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 842-45 (1984)).

(209) Riverside Bayview Homes, 474 U.S. at 137.

(210) Id. at 136. The Court noted that "[a]lthough we are chary of attributing significance to Congress'[s] failure to act, a refusal by Congress to overrule an agency's construction of legislation is at least some evidence of the reasonableness of that construction, particularly where the administrative construction has been brought to Congress'[s] attention." Id. at 137.

(211) Id. at 138.

(212) Id. at 124 n.2.

(213) 961 F.2d 1310, vacated, 975 F.2d 1554 (7th Cir. 1992) (Hoffman Homes I).

(214) Id. at 1311.

(215) Id. at 1312.

(216) Id.

(217) Id. at 1321.

(218) Id. at 1314. The court noted that "[t]he case law leaves little doubt that tributaries of navigable waters, intrastate waters which are used to irrigate crops, support a fishery, or are visited by interstate travelers, and wetlands adjacent to such waters may be regulated under the Commerce Clause." Id. at 1319.

(219) Id. at 1319.

(220) Id. at 1321.

(221) Hoffman Homes v. Administrator, United States Envtl. Protection Agency, 999 F.2d 256 (7th Cir. 1993) (Hoffman Homes H).

(222) Id. at 262.

(223) Judge Manion, believing EPA clearly overstepped its bounds, concurred in the judgment and incorporated his opinion in Hoffman Homes I by reference. Id. (Manion, J., concurring).

(224) Leslie Salt Co. v. United States, 896 F.2d 354 (9th Cir. 1990) (Leslie Salt I); Leslie Salt Co. v. United States, 55 F.3d 1388 (9th Cir. 1995), cert. denied sub nom., Cargill, Inc. v. United States, 516 U.S. 955 (1995) (Leslie Salt II).

(225) Leslie Salt I, 896 F.2d at 355-56.

(226) Id. at 356.

(227) Id. at 360. The court provided virtually no discussion of the basis for this finding. Id. Judge Rymer, in his dissent, challenged the court's acceptance of the Corps's jurisdiction, noting that "there is nothing in the record to show that water flows directly or indirectly from the ... pits into another body of water." Id. at 361 (Rymer, J., dissenting). In addition, the court found that the fact that the wetlands in question were artificially created, in part due to actions taken by the government, was immaterial. Id. at 358.

(228) Leslie Salt II, 55 F.3d at 1392.

(229) Id.

(230) Id.

(231) Id. at 1396.

(232) Id.

(233) Cargill, Inc. v. United States, 116 S. Ct. 407, 409 (1995) (denial of certiorari) (Thomas, J., dissenting).

(234) Id.

(235) Id.

(236) United States v. Wilson, 133 F.3d 251, 254 (4th Cir. 1996).

(237) Id. at 254.

(238) Id. at 254-55. While National Wetland Inventory maps identified portions of St. Charles as wetlands, warnings on these maps state that they are not to be used for regulatory purposes. Appellants Reply Brief at 2, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774).

(239) Appellants Brief at 5, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774) (quoting Memorandum CENAB-OP-R (1145) from Colonel Bernard E. Stalmann, Commander, U.S. Army Corps of Eng. (Apr. 21, 1988) (on file with author) (presented as evidence for the defense in the Wilson case)); see also Wilson, 133 F.3d at 255.

(240) Appellants Brief at 6, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774).

(241) Intermittent streams are those that have a defined channel but do not flow year round. Respondents' Brief at 38 n. 15, Wilson (Nos. 96-4498(L), 96-4503, and 96-4537).

(242) Wilson, 133 F.3d at 254-55.

(243) See Respondents' Brief at 38-40, Wilson (Nos. 96.4498(L), 96-4503, and 96-4537); see also, Appellants' Brief at 35-36, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774) (quoting the prosecutor's statements at trial that "[i]t's all in the drainage, it all drains downward," and that jurisdiction can be based on rainfall which eventually drains into a tributary of a navigable water).

(244) 33 C.F.R. [sections] 328.3(a)(3) (1998) (emphasis added).

(245) Appellants' Reply Brief at 24, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774).

(246) Respondents' Brief at 49, Wilson (Nos. 96-4498(L), 96-4503, and 96-4537).

(247) Appellants' Reply Brief at 24, Wilson (Nos. 96-4498(L), 96-4503, 96-4537, and 96-4774).

(248) Respondents' Brief at 50-51, Wilson (Nos. 96-4498(L), 96-4503, and 96-4537) (citing Perez v. United States, 402 U.S. 146 (1971); Wickard v. Filburn 317 U.S. 111 (1942)).

(249) See, e.g., Respondents' Brief at 5, Wilson (Nos. 96-4498(L), 96-4503, and 96-4537) (asserting that [sections] 404 "prohibits the discharge of dredged or fill materials into any wetland unless the activity is specifically authorized by a permit" (emphasis added)).

(250) United States v. Wilson, 133 F.3d 251, 257 (4th Cir. 1996).

(251) Id.

(252) Id. at 256. The Court noted that "the existence of such a far reaching power could be drawn into question by the Court's recent federalism jurisprudence" without resolving the question. Id.

(253) Id. at 257.

(254) Lazarus, supra note 28.

(255) U.S. ENVTL. PROTECTION AGENCY AND U.S. DEP'T OF THE ARMY, GUIDANCE FOR CORPS AND EPA FIELD OFFICES REGARDING CLEAN WATER ACT SECTION 404 JURISDICTION OVER ISOLATED WATERS IN LIGHT OF UNITED STATES V. JAMES J. WILSON, (May 29, 1998) [hereinafter EPA/CORPS GUIDANCE].

(256) Tabb Lakes v. United States, 715 F. Supp. 726 (E.D. Va. 1988), aff'd, 885 F.2d 866 (4th Cir. 1989). Indeed, although the Tabb Lakes decision held that the Corps could not rely upon an EPA/Corps guidance that asserted jurisdiction based upon the presence of migratory birds, the Corps and EPA maintain that "the decision did not prohibit the use of migratory birds to establish a connection to interstate commerce under the Clean Water Act." EPA/ CORPS GUIDANCE, supra note 255, at 6 n.3.

(257) EPA/CORPS GUIDANCE, supra note 255, at 1.

(258) Id.

(259) Id. at 5.

(260) See supra Part II.B.1.

(261) This is a questionable assumption, as discussed infra Part V.

(262) It is worth remembering that the effectiveness of a particular policy does not determine its constitutionality. Stanley v. Illinois, 405 U.S. 645, 656 (1972) ("[T]he Constitution recognizes higher values than speed and efficiency."). Nonetheless, it is a rare judge or justice that renders a decision without at least some minimal regard for the likely consequences. See Scalia, supra note 34.

(263) Houck & Rolland, supra note 25, at 1247.

(264) Goldman-Carter, supra note 164.

(265) Id.

(266) Houck & Rolland, supra note 25, at 1248.

(267) Respondents' Brief at 48-49, Wilson (Nos. 96-4498(L), 96-4503, and 96-4537).

(268) See supra Part I.B.

(269) United States v. Lopez, 514 U.S. 549, 560 (1995).

(270) Id. at 580 (Kennedy, J., concurring).

(271) See, e.g., United States v. Denalli 73 F.3d 328 (11th Cir. 1996); United States v. Pappadopoulos, 64 F.3d 522 (9th Cir. 1995) (overturning convictions under federal arson statute because private homes lacked connection to interstate commerce). Simply because a law "may, on occasion, reach activity that arises in part from economic motives does not transform it into a statute regulating economic activity." Brzonkala v. Virginia Polytechnic Inst. & State Univ., 1999 U.S. App. LEXIS 3457, *33 (4th Cir. 1999) (en banc) (invalidating subtitle C of the Violence Against Women Act).

(272) Lopez, 514 U.S. at 561 (emphasis added).

(273) Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264 (1981).

(274) See id. at 277-81.

(275) See, e.g., 60 Fed. Reg. 38,650 (July 27, 1995) (creating a nationwide permit for single-family housing).

(276) 58 Fed. Reg. 45,008, 45,020 (Aug. 25, 1993).

(277) See Dennis J. Priolo, Section 404 of the Clean Water Act: The Case for Expansion of Federal Jurisdiction over Isolated Wetlands, 30 LAND & WATER L. REV. 91 (1995). This article was adopted by the Corps "in substantially the same form" as it was published as its "working position" for negotiations with EPA over federal wetlands regulations. Id. at 91 n.*.

(278) Wickard v. Filburn, 317 U.S. 111, 127 (1942).

(279) 402 U.S. 146 (1971).

(280) Id. at 154 (citation omitted).

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

(282) Perez, 402 U.S. at 154.

(283) Hoffman Homes v. Administrator, United States Envtl. Protection Agency (Hoffman Homes II), 999 F.2d 256, 262 (7th Cir. 1993).

(284) VIRGINIA S. ALBRECHT & BERNARD N. GOODE, WETLAND REGULATION IN THE REAL WORLD 1 (1994) (citing letter dated Feb. 2, 1994, from Lt. Col. R.O. Buck, Asst. Dir. of Civil Works for the Corps of Engineers to Congressman Owen Pickett that an area can be classified as a wetland "even though `the top plane of the soil' is dry").

(285) Federal Energy Regulatory Comm'n v. Mississippi, 456 U.S. 742 (1980).

(286) Id. at 768 n.30.

(287) JON A. KUSLER, FEDERAL, STATE, AND LOCAL GOVERNMENT ROLES AND PARTNERSHIPS FOR FAIR FLEXIBLE, AND EFFECTIVE WETLAND REGULATION 1 (1994).

(288) See infra Part V.

(289) United States v. Lopez, 514 U.S. 549, 581 (1995) (Kennedy, J., concurring).

(290) Id. at 583 (Kennedy, J., concurring).

(291) Hoffman Homes v. Administrator, United States Envtl. Protection Agency (Hoffman Homes II), 961 F.2d 1310, vacated, 975 F.2d 1554 (7th Cir. 1992).

(292) Steven M. Johnson, Federal Regulation of Isolated Wetlands, 23 ENVTL. L. 1 (1993).

(293) One commentator noted that "[t]he regulation of isolated wetlands under the CWA based on the migratory bird rule was on tenuous Commerce Clause grounds even before Lopez was decided in the spring of 1995." Holman, supra note 28, at 195.

(294) Cargill Inc. v. United States, 116 S. Ct. 407, 409 (1995) (denial of certiorari) (Thomas, J., dissenting).

(295) See, e.g., Babbitt v. Sweet Home Chapter of Communities for a Great Or., 515 U.S. 687 (1995) (upholding federal regulation of "harm" to endangered species).

(296) This is a distinction that the Supreme Court made in Sweet Home, as the Court upheld the challenged regulations only insofar as they prohibited "significant habitat modification or degradation that actually kills or injures wildlife." Id. at 691 (quoting 50 C.F.R. [sections] 17.3 (1994)) (emphasis added). The Court indicated that the mere fact that a government regulator could infer some harm to a population of endangered species at some point due to the modification of habitat was not sufficient to confer jurisdiction under the Endangered Species Act (ESA).

(297) Holman, supra note 28, at 197.

(298) Leslie Salt v. United States, 896 F.2d 354, 360 (9th Cir. 1990); Leslie Salt v. United States, 55 F. 3d 1388, 1392 (9th Cir. 1995).

(299) Hoffman Homes v. Administrator, United States Envtl. Protection Agency (Hoffman Homes I), 961 F.2d 1310, 1320 (7th Cir. 1992), vacated, 975 F.2d 1554 (7th Cir. 1992).

(300) Id.

(301) Solid Waste Agency of N. Cook County v. United States Army Corps of Eng'rs, 998 F. Supp. 946, 952 (N.D. Ill. 1998).

(302) The reasoning that the district court used to uphold federal jurisdiction over isolated wetlands in Solid Waste Agency reads curiously like the causal chain explicitly rejected by the Supreme Court in Lopez. Id. (quoting Warner, supra note 28).

(303) Houck & Rolland, supra note 25, at 1248.

(304) Brief for the National Ass'n of Home Builders et al., at 7, Cargill, Inc. v. United States, 516 U.S. 955 (1995)(No. 95-73) (citing U.S. ARMY CORPS OF ENGINEERS, 1995 WETLANDS DELINEATION FIELD EVALUATION FORMS (June 1995)). It should be noted that the Corps's study did not include data from seven states, and therefore the total number of isolated wetlands is likely to be greater than nine million. Id.

(305) See Adler, Green Aspects, supra note 43, at 625-32.

(306) See, e.g., ENVIRONMENTAL FEDERALISM (Terry L. Anderson & Peter J. Hill eds., 1997); HENRY N. BUTLER & JONATHAN R. MACEY, USING FEDERALISM TO IMPROVE ENVIRONMENTAL POLICY (1996); Jonathan H. Adler, A New Environmental Federalism, 13 F. FOR APPLIED RES. & PUB. POL'Y 55 (1998); Richard L. Revesz, The Race to the Bottom and Environmental Regulation: A Response to Critics, 82 MINN. L. REV. 535 (1997); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 97 (John Ferejohn & Barry R. Weingast eds., 1997) [hereinafter Revesz, A Normative Critique]; Richard L. Revesz, Rehabilitating Interstate Competition: Rethinking the `Race-to-the-Bottom' Rationale for Federal Environmental Regulation, 67 N.Y.U. L. REV. 1210 (1992) [hereinafter Revesz, Rehabilitating Interstate Competition].

(307) For a listing and brief summary of much of this literature, see COMPETITIVE ENTERPRISE INST., THE FREE MARKET ENVIRONMENTAL BIBLIOGRAPHY (Jonathan H. Adler ed., 4th ed. 1995-96).

(308) 33 U.S.C. [subsections] 1251-1385 (1994). See also National Environmental Policy Act of 1969, 42 U.S.C. [subsections] 4321-4370d (1994); Clean Air Act of 1970, 42 U.S.C. [subsections] 7401-7671q (1994 & Supp II 1996); Endangered Species Act of 1973, 16 U.S.C. [subsections] 1531-1544 (1994); Safe Drinking Water Act of 1974, 42 U.S.C. [subsections] 300f-300j (1994); Federal Insecticide, Fungicide, and Rodenticide Act of 1975, 7 U.S.C. [subsections] 136-136y (1994); Resource Conservation and Recovery Act of 1976, 42 U.S.C. [subsections] 6901-6992k (1994); Toxic Substances Control Act of 1976, 15 U.S.C. [subsections] 2601-2692 (1994).

(309) Houck & Rolland, supra note 25, at 1244. Of course, many would argue that it was anything but "obvious" in 1972 that the federal government was asserting a regulatory presence over wetlands at all. See, e.g., Goode, supra note 191.

(310) Drew Caputo, an attorney specializing in wetlands issues at the Natural Resources Defense Council, said a broad interpretation of the Wilson case would be a "really bad thing for wetlands." Wetlands: Government Jurisdiction Ruling `Significant,' U.S. Appeal Unlikely, Industry Lawyer Says, 9 Daily Env't Rep. (BNA) A2 (Jan. 14, 1998). Howard Fox of the Earthjustice Legal Defense Fund expressed similar fears: "We're very concerned by this decision, which limits the power of the federal government to set a uniform national standard to prevent water pollution." Peter S. Goodman, Potential Ramifications of Md. Wetlands Case Concern U.S. Officials, WASH. PosT, Jan. 4, 1998, at B5. In the wake of the Wilson decision, however, a Corps official told the Washington Post that most wetlands in the eastern United States are adjacent to navigable rivers and would therefore not be affected by the decision. Id.

(311) Earthjustice Legal Defense Fund's Howard Fox told the Washington Post that "[t]o kick this back to the states opens up a bidding war to attract industry by lowering water pollution standards." Peter S. Goodman, Potential Ramifications of Md. Wetlands Case Concern, U.S. Officials, WASH. PosT, Jan. 4, 1998, at B5.

(312) See United States v. Lopez, 514 U.S. 511, 581 (1995) (Kennedy, J., concurring) (noting that federalism allows states to "perform their roles as laboratories for experimentation to devise various solutions where the best solution is far from clear"); see also, Calabresi, supra note 78, at 774-79.

(313) Unfortunately, as this author has documented elsewhere, many leaders in "mainstream" environmental lobbying organizations adopt policy positions that are at odds with improved environmental protection. See ADLER, ENVIRONMENTALISM, supra note 139. Survey data also indicate that environmental activists are more predisposed to endorse larger federal programs, environmental and otherwise, than the public at large. STANLEY ROTHMAN & ROBERT LICHTER, ENVIRONMENTAL CANCER: A POLITICAL DISEASE? 118-30 (1999).

(314) See, e.g., Daniel C. Esty, Revitalizing Environmental Federalism, 95 Mich. L. REV. 570, 603-04 (1996).

(315) Proponents of the race-to-the-bottom theory also suggest that environmental advocates will have less political influence at the state and local level than at the national level. See, e.g., Richard B. Stewart, Pyramids of Sacrifice?: Problems of Federalism in Mandating State Implementation of National Environmental Policy, 86 YALE L.J. 1196, 1213 (1977); see also, Esty, supra note 314, at 597-99.

(316) Kirsten H. Engel, State Environmental Standard-Setting: Is There a "race" and Is It "To the Bottom"?, 48 HASTINGS L.J. 271, 274 (1997).

(317) It is important to distinguish the race-to-the-bottom argument from other arguments for federal environmental standards, such as spillovers or economies of scale. See, Adler, Green Aspects, supra note 43, at 625-32; see also Revesz, Rehabilitating Interstate Competition, supra note 306.

(318) For the most substantial critique of the race to the bottom theory, see Revesz, Rehabilitating Interstate Competition, supra note 306; see also supra note 301 and the citations listed therein.

(319) Revesz, A Normative Critique, supra note 306, at 105.

(320) Deborah Jones Merritt notes that "[r]esidents have flocked to some western states that use aggressive measures to protect the environment-despite the fact that these laws impose significant costs on business and taxpayers." Merritt, supra note 85, at 706.

(321) Joseph Z. Fleming, Analysis of Relevant Labor, Employment Discrimination, and Humanitarian Relief Laws Affecting Sports, Arts, and Entertainment Industries, SC47 A.L.I.-A.B.A. 293, 301 (1998)

(322) William P. Quigley, `A Fair Day's Pay for a Fair Day's Work': Time to Raise and Index the Minimum Wage, 27 ST. MARY'S L.J. 513, 518-19 (1996).

(323) Craig Volden, Entrusting the States with Welfare Reform, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 66, 74 (John Ferejohn & Barry R. Weingast eds., 1997).

(324) Id. Although "states had the incentive to cut welfare benefits," empirical research "suggests that very few states made sizable welfare cuts." Id. at 75.

(325) Volden, supra note 323 at 87 (citing THOMAS R. DYE, AMERICAN FEDERALISM: COMPETITION AMONG GOVERNMENTS 189).

(326) Roberta Romano, State Competition for Corporate Charters, in THE NEW FEDERALISM, supra note 323, at 129, 149.

(327) Act of Sept. 1, 1916, ch. 432, 39 Stat. 675 (1916). The law also limited the number of hours that children between the ages of 14 and 16 could work.

(328) 247 U.S. 251, 256-57 (1918).

(329) Id. at 275. The Supreme Court struck down the statute for exceeding the scope of Congress's Commerce Clause power, but was subsequently overturned in United States v. Darby, 312 U.S. 100 (1941).

(330) See, e.g., Margaret Kriz, Ahead of the Feds, NATL. J. (Dec. 9, 1989), 2989-93.

(331) Dana C. Joel, Rhetoric vs. Reality: New Jersey Regulatory Reform, REGULATION, Spring 1996, at 53, 55.

(332) Robert E. Roberts, Debunking the `Race to the Bottom' Myth, ECOSTATES, NOV. 1997, at 13, 14.

(333) See Adler, Green Aspects, supra note 43, at 631; see also David L. Markell, States as Innovators: It's Time for a New Look to Our "Laboratories of Democracy" in the Effort to Improve Our Approach to Environmental Regulation, 58 ALB. L. REV. 347 (1994); ALEXANDER VOLOKH ET AL., REASON FOUND. POL'Y STUDY NO 239, RACE TO THE TOP: THE INNOVATIVE FACE OF STATE ENVIRONMENTAL MANAGEMENT 1-2 (1998); Adler, supra note 306, at 55.

(334) See, e.g., JAMES V. DELONG, SUPERFUND XVII: THE PATHOLOGY OF ENVIRONMENTAL POLICY (1997); RICED STROUP, PERC POLICY SERIES 5, SUPERFUND: THE SHORTCUT THAT FAILED (1996); Jerry Taylor, Salting the Earth: The Case for Repealing Superfund, REGULATION, Spring 1995, at 53; Brett A. Dalton, Superfund: The South Carolina Experience, in TAKING THE ENVIRONMENT SERIOUSLY 103-39 (Roger E. Meiners & Bruce Randle eds., 1993); Robert W. McGee, Superfund: It's Time for Repeal After a Decade of Failure, 12 UCLA J. ENVTL. L. & POL'Y 1 (1993).

(335) J. WINSTON PORTER, REASON FOUND. POL'Y STUDY No. 195, CLEANING UP SUPERFUND: THE CASE FOR STATE ENVIRONMENTAL LEADERSHIP (1995).

(336) DONALD LEAL, PERC Policy Series PS-4, TURNING A PROFIT ON PUBLIC FORESTS (1995).

(337) Jonathan H. Adler, Bean Counting for a Better Earth, REGULATION, Spring 1998, 40, 45.

(338) Jeanne Herb, Success and the Single Permit, ENVTL. F., Nov./Dec. 1997, at 17.

(339) Id. at 18.

(340) This phrase originated with Justice Brandeis's opinion in New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).

(341) Calabresi, supra note 78, at 777.

(342) Indeed, states are essentially acting as sellers of places to live, work, and produce goods. Id. Were this not the case, there could be no argument for a "race to the bottom" produced by interstate competition.

(343) A prime example of this is repeated state efforts to enhance economic growth by subsidizing sports arenas. See JOSEPH L. BAST, HEARTLAND POLICY STUDY #86, SPORTS STADIUM MADNESS: HOW IT STARTED, HOW TO STOP IT (1998). For more studies of sports arena studies, see <http://www.heartland.org/studies/sports/index.html>.

(344) Revesz, Rehabilitating Interstate Competition, supra note 306, at 1241-42.

(345) Revesz, A Normative Critique, supra note 306, at 104-05.

(346) "Not-In-My-Back-Yard." The acronym typically refers to groups that focus on preventing locally undesirable land uses, such as industrial facilities or waste disposal sites, but have relatively little concern about whether these same land uses occur elsewhere.

(347) Revesz, A Normative Critique, supra note 306, at 106.

(348) Id. Of course, this impact is largely irrelevant for some advocates of national environmental standards, as they would argue that environmental policy is qualitatively different, and that environmental protection requires greater safeguards than worker safety, wage rates, and so on. Indeed, some have argued that national policy is necessary to address the moral component of environmental protection. See, e.g., Stewart, supra note 315, at 1217-19.

(349) Ronald McKinnon & Thomas Nechyba, Competition in Federal Systems: The Role of Political and Financial Constraints, in THE NEW FEDERALISM, supra note 323, at 3, 10.

(350) Revesz argues that "the rationale for federal regulation premised on the problem of interstate externalities is analytically unimpeachable but has not been effectively redressed in the current pollution-control scheme." Richard L. Revesz, Federalism and Interstate Environmental Externalities, 144 U. PA. L. REV. 2341, 2346 (1996). Revesz may actually be giving federal regulation too much credit. There is a growing amount of scholarship that suggests common-law mechanisms are capable of dealing with some portion of interstate environmental problems. See, e.g., CENTER FOR PRIVATE CONSERVATION, THE COMMON LAW APPROACH TO POLLUTION PREVENTION: A ROUNDTABLE DISCUSSION (Washington, D.C. 1998); BRUCE YANDLE, COMMON SENSE AND COMMON LAW FOR THE ENVIRONMENT (1997); Todd J. Zywicki, A Unanimity-Reinforcing Model of Efficiency in the Common Law: An Institutional Comparison of Common Law and Legislative Solutions to Large Number Externality Problems, 46 CASE W. RES. L. REV. 961 (1996); Roger E. Meiners, Elements of Property Rights: The Common Law Alternative, in LAND RIGHTS: THE 1990S PROPERTY RIGHTS REBELLION (Bruce Yandle, ed., 1995); Roger E. Meiners & Bruce Yandle, Clean Water Legislation: Reauthorize or Repeal?, in TAKING THE ENVlRONMENT SERIOUSLY 88-93 (Bruce Yandle & Roger E. Meiners, eds., 1993).

(351) Indeed, given the federal government's sorry record of subsidizing substantial wetland destruction even after wetland regulations were put in place, one could argue that wetlands would be in better shape if the federal government had never intervened at all.

(352) See infra Part III.A.

(353) Natural Resources Defense Council v. Callaway, 392 F. Supp. 685 (D.D.C. 1975).

(354) Alexandra D. Dawson, Massachusetts' Experience in Regulating Wetlands, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 255 (1985).

(355) Callaway, 392 F. Supp. at 685.

(356) Dawson, supra note 354, at 255.

(357) Id.

(358) Id.

(359) Id. For a fuller discussion of wetlands regulation in Massachusetts, see Cymie Payne, Local Regulation of Natural Resources: Efficiency, Effectiveness, and Fairness of Wetlands Permitting in Massachusetts, 28 ENVTL. L. 519 (1998).

(360) JON. A. KUSLER ET AL., ASSOCIATION OF STATE WETLAND MANAGERS, STATE WETLAND REGULATION: STATUS OF PROGRAMS AND EMERGING TRENDS 1 (1994).

(361) 16 U.S.C. [subsections] 1451-1464 (1994).

(362) See infra Part V.B.1.

(363) Houck & Rolland, supra note 25, at 1253.

(364) KUSLER ET AL., supra note 360, at 5-8 tbl.1. These states are Alabama, Alaska, Delaware, Florida, Georgia, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, North Carolina, South Carolina, and Wisconsin. Id.

(365) Id. at 3.

(366) Id. at 20.

(367) Id. at 2. These states are Connecticut, Florida, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oregon, Rhode Island, Vermont, and Wyoming. Id.

(368) Id. at 3. These states include Washington, Wisconsin, Delaware, and California, among others. Id.

(369) Several states have so-called "critical area" statutes that impose special requirements on land use or local zoning in areas of special ecological or other importance. Id. Numerous states also have statutes protecting floodplains, which, in many cases, will include protection of wetlands. JON A. KUSLER, U.S. FISH & WILDLIFE SERV., STRENGTHENING STATE WETLAND REGULATION, app. D (1978) (listing floodplain regulations in 24 states as of 1978).

(370) KUSLER ET AL., supra note 360, at 20-21, 31-35; Bruce H. Geibig, The Minnesota Water Bank and Wetland Tax Credit Program, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 600 (1985); Scott McCreary & Rence McCreary, The California Conservancy Experience in Wetland Protection, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 612 (1985); GORDON MEEKS JR. & L. CHERYL RUNYON, NATIONAL CONFERENCE OF STATE LEGISLATURES, WETLANDS PROTECTION AND THE STATES 14-15 (April 1990).

(371) MEEKS & RUNYON, supra note 370, at 14.

(372) KUSLER ET AL., supra note 360, at 12.

(373) Id. at 20. By contrast, there have been no substantive legislative changes in the Clean Water Act this decade, and few substantive changes in the regulatory program that have not been the result of court judgments or threats of legal action.

(374) For instance, as of 1992 ten states were using wetland classification systems to evaluate function and value in the regulatory process. William E. Taylor & Dennis Magee, Should All Wetlands Be Subject to the Same Regulation? 7 NAT. RESOURCES & ENV'T. 32, 34 (1992). The development of these sorts of programs is important because "[a]bsent regulatory classification, there is a presumption that all wetlands are of equal significance with respect to functional value, and that no distinctions are necessary in the level of regulation or in designating mitigation requirements." Id. at 32.

(375) See Michael Mortimer, Irregular Regulation Under Section 404 of the Clean Water Act: Is the Congress or the Army Corps of Engineers to Blame? (1997) (draft presented at the Political Economy Research Center) (on file with author).

(376) MEEKS & RUNYON, supra note 370, at 17.

(377) Norman E. Larsen, Wetlands Protection in Virginia--The Local Option Approach, in WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 251 (1985).

(378) Id. Even if the program's implementation lowered reporting rates, the drop in conversion is so dramatic that wetland conversion likely slowed even if reporting rates dropped.

(379) Stephen R. Rubin, Note, An Analysis of Nontidal Wetland Regulation in Maryland, 16 VA. ENVTL. L.J. 459, 495-96 (1997).

(380) Id. at 495-96. While Rubin criticizes MDE for not including wetland losses due to activities that are exempt from state regulation, his charge that Maryland has not achieved no net loss of wetlands ignores wetland restoration efforts that occur outside of the MDE program. Such gains could be substantial. For example, a single private group, Chesapeake Wildlife Heritage, restored over 100 acres of wetlands in the Chesapeake Bay watershed between 1992 and 1997. JONATHAN TOLMAN, CENTER FOR PRIVATE CONSERVATION, CHESAPEAKE WILDLIFE HERITAGE, PRIVATE CONSERVATION CASE STUDY 1 (1997) [hereinafter TOLMAN, CHESAPEAKE WILDLIFE HERITAGE]; see also infra Part IV.B.2.

(381.) The Corps's regulations that sought to prevent the draining of wetlands were found to be unauthorized by the Clean Water Act and were rescinded. National Mining Ass'n v. United States Army Corps of Eng'rs, 145 F.3d 1399 (D.C. Cir. 1998).

(382) Rubin, supra note 379, at 478.

(383) Id. at 477.

(384) Patricia Riexinger, Local Implementation of New York's Freshwater Wetlands Act, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 229 (1985).

(385) Rubin, supra note 379, at 477.

(386) MEEKS & RUNYON, supra note 370, at 10.

(387) See supra Part III.A.

(388) In the context of Florida, one official noted that "Okeechobee County doesn't need to worry about mangrove estuaries. Dade doesn't need to worry about phosphate. Leon doesn't need to worry about the Everglades." Maggy Hurchalla, A Community Perspective for Wetlands Protection, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 260 (1985).

(389) For instance, in New York, many localities opt to implement the state wetlands program and tighten the regulatory requirements because "local governments know their resources better than the state regulating agency does." Riexinger, supra note 384, at 229.

(390) Id. (Ms. Riexinger was then Wetlands Program Manager for the New York State Department of Environmental Conservation).

(391) Hurchalla, supra note 388, at 260. (Ms. Hurchalla was then Commissioner of Martin County, Florida).

(392) TOLMAN, SWAMPED, supra note 163, at 19.

(393) KUSLER ET AL., supra note 360, at 2.

(394) The Corps is well aware of its limited ability to centrally-regulate wetlands and has sought to develop various partnerships under the Clean Water Act through which it can take advantage of the location and information advantage possessed by state and local regulators, in some cases delegating substantial regulatory authority to the state under the federal program. For example, the Clinton Administration began to encourage the use of "State Programmatic General Permits," under which federal approval of certain types of wetland modifying activities is "determined by the review and approval of state regulators." Rubin, supra note 379, at 470.

(395) TOLMAN, SWAMPED, supra note 163, at 18.

(396) The Corps's regulatory responsibilities under [sections] 404 extend to the filling of nonwetland waters of the United States, as well as to activities subject to the Rivers and Harbors Act. See generally Clean Water Act, 33 U.S.C. [sections] 1344 (1994); River and Harbor Act of 1970, 33 U.S.C. [sections] 1293(a) (1994).

(397) TOLMAN, SWAMPED, supra note 163, at 18. Nearly haft of Alaska meets the federal definition of wetlands, amounting to approximately 170 million acres. KUSLER ET AL., supra note 360, at 5. Thus, including Alaska would skew the resulting figures, more than doubling the average acreage of wetlands for which each Corps official is responsible.

(398) BUTLER & MACEY, supra note 306, at 27. This argument is based on the insights of Nobel Laureate F.A. Hayek, who discussed the "knowledge problem" inevitably faced by large, Centralized bureaucracies. See, e.g., F.A. Hayek, The Use of Knowledge in Society, 35 AMER. ECON. REV. 519 (1945).

(399) Kusler, supra note 171, at 29.

(400) Id.

(401) Hal F. Harrington, Michigan's Wetlands Inventory, in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 147 (1985).

(402) Appellants' Reply Brief at 2, Wilson v. United States, 133 F.3d 251 (4th Cir. 1997) (Nos. 96-4498(L), 96-4503, and 96-4774).

(403) Kusler, supra note 171, at 30.

(404) See, e.g., ELIZABETH BRUBAKER, PROPERTY RIGHTS IN DEFENSE OF NATURE (1995); Fred L. Smith Jr., Reappraising Humanity's Challenges, Humanity's Opportunities, in THE TRUE STATE OF THE PLANET (R. Bailey ed., 1995); Fred L. Smith Jr., Markets and the Environment: A Critical Reappraisal, 13 CONTEMP. ECON. POL'Y 62 (1995); Richard Stroup, Controlling Earth's Resources: Markets or Socialism? POPULATION & ENV'T., Spring 1991, 265-84. As noted ecologist Garrett Hardin observed in his seminal essay on environmental problems, "[t]he tragedy of the commons as a food basket is averted by private property, or something formally like it." Garrett Hardin, The Tragedy of the Commons, 162 Sci. 1243, 1245 (1968).

(405) This approach is generally associated with A.C. Pigou. A.C. PIGOU, THE ECONOMICS OF WELFARE: (1920). For a critique of the Pigouvian approach that suggests the superiority of focusing on institutional arrangements, see R. H. COASE, THE FIRM, THE MARKET, AND THE LAW 20-30, 133-53, 179-85 (1988).

(406) It is important to note that simply because something meets the traditional economic definition of a public good, this does not mean that it will not be provided privately. See, e.g., R. H. Coase, The Lighthouse in Economics, 17 J. L. & ECON. 357 (1974); see also RANDY E. BARNETT, THE STRUCTURE OF LIBERTY 160-67 (1998).

(407) Of course, some would argue that federally owned lands have not been protected, as evidenced by the poor condition of the national parks and U.S. forest system. See, e.g., KARL HESS, ROCKY TIMES IN ROCKY MOUNTAIN NATIONAL PARK: AN UNNATURAL HISTORY (1993); RANDAL O'TOOLE, REFORMING THE FOREST SERVICE (1988); ALSTON CHASE, PLAYING GOD IN YELLOWSTONE: THE DESTRUCTION OF AMERICA'S FIRST NATIONAL PARK (1986); FORESTLANDS: PUBLIC AND PRIVATE (Robert T. Deacon & M. Bruce Johnson, eds. 1985).

(408) The "takings clause" of the Fifth Amendment reads "nor shall private property be taken for public use without just compensation." U.S. CONST. amend. V.

(409) It should be noted that here the phrase "private sector" is used to encompass all nongovernmental institutions and undertakings, and not just for-profit corporations and profit-seeking individuals.

(410) See STEPHEN EAGLE, CENTER FOR PRIVATE CONSERVATION, CONSERVATION EASEMENTS AND PRIVATE LAND STEWARDSHIP (1997).

(411) TERRY L. ANDERSON & PAMELA SNYDER, WATER MARKETS: PRIMING THE INVISIBLE PUMP 111-32 (1997).

(412) Ike Sugg & Urs Kreuter, Elephants and Ivory: Lessons from the Trade Ban, in IEA STUDIES ON THE ENVIRONMENT NO. 2, 16, 51-53 (1994).

(413) Michael DeAlessi, Fishing for Solutions, in IEA STUDIES ON THE ENVIRONMENT NO. 11, 4043 (1998).

(414) See Robert J. Smith, Resolving the Tragedy of the Commons by Creating Property Rights in Wildlife, 1 CATO J. 439 (1981). For more examples of private stewardship, see TERRY ANDERSON & DONALD LEAL, ENVIRO-CAPITALISTS (1997), as well as the website of the Center for Private Conservation (visited Mar. 14, 1999) <http://www.cei.org/cpc/>.

(415) See supra note 137.

(416) MEEKS & RUNYON, supra note 370, at 8.

(417) The Water Bank Act, 84 Stat. 1468 (1970) (codified as amended at 16 U.S.C. [subsections] 1301-1311 1994).

(418) Beck, supra note 137, at 785 n.20.

(419) Richard L. Stroup & Jane S. Shaw, Environmental Harms from Federal Government Policy, in TAKING THE ENVIRONMENT SERIOUSLY 54-55 (R. Meiners & B. Yandle eds., 1993); see also infra notes 142-47 and accompanying text.

(420) For instance, the "Swampbuster" provisions of the Food Security Act of 1985 cut off agricultural subsidies to farmers that drain wetlands to grow crops. 16 U.S.C. [sections] 3821 (1994 & Supp. III 1997). But by that time wetland losses due to agriculture had already begun to decline substantially. See infra notes 473-76 and accompanying text.

(421) HEIMLICH ET AL., supra note 163, at 31-32.

(422) TOLMAN, SWAMPED, supra note 163, at 4. Analysts at the Department of Agriculture believe that this estimate is slightly inflated. HEIMLICH ET AL., supra note 163, at 53. Nonetheless, these analysts also attest that the amount of restoration per year doubled from 1992 to 1996, and exceeds 180,000 acres per year. Id.

(423) TOLMAN, SWAMPED, supra note 163, at 4.

(424) See infra Part V.B.2.

(425) HEIMLICH ET AL., supra note 163, at 21.

(426) Id. at 20 tbl.2.

(427) GAO, supra note 159, at 2.

(428) There is some imprecision in the aggregate restoration numbers of these three programs due to the possibility of double-counting wetland acres that are included in both programs, or counting buffer zone acreage as restored wetland acreage.

(429) See David Smith, Comparing Apples to Oranges, NAT'L. WETLANDS NEWSL. (Envtl. L. Inst., Washington, D.C.), July-Aug. 1997, at 11-13.

(430) While recent government studies question whether no net loss has been achieved, they acknowledge that the nation is very close to achieving this goal without counting the substantial efforts undertaken by private conservation organizations or nonfederal governments. See HEIMLICH ET AL., supra note 163, at 53 (noting that none of the estimates relied upon by the government "include purely private efforts at restoration, such as those of Ducks Unlimited, the Izaak Walton League, The Nature Conservancy, and other groups and individuals, nor efforts by State and local governments").

(431) TOLMAN, SWAMPED, supra note 163, at 13-14. In 1995, the per-acre cost of wetland restoration, including the costs of easements, was $790 for the Wetland Reserve Program, and $133 for the North American Waterfowl Management Program. Id. at 13-15.

(432) However, as noted, infra note 436-41 and accompanying text, success rates for restoration under section 404 are fairly low.

(433) TOLMAN, SWAMPED, supra note 163, at 15. This number does not include wetland losses under nationwide permits or those from draining or clearing, as opposed to filling.

(434) U.S. ARMY CORPS OF ENGINEERS, REGULATORY QUARTERLY REPORT (1995).

(435) Dennis King & Curtis Bohlen, Estimating the Costs of Restoration, NAT'L. WETLANDS NEWSL. (Envtl. L. Inst., Washington, D.C.), May-June 1994, at 5. This figure is misleading, however, as it assumes that the acreage of wetland restoration claimed by the Corps accurately reflects the amount of restoration that is performed.

(436) SCODARI, supra note 140, at 40; see also, Roy R. Lewis, Why Florida Needs Mitigation Banking, NAT'L WETLANDS NEWSL (Envtl. L. Inst., Washington, D.C.), Jan.-Feb. 1992, at 7; Ann Redmond, How Successful Is Mitigation?, NAT'L WETLANDS NEWSL, Jan.-Feb. 1992, at 5.

(437) Timothy B. Wheeler, Making New Wetlands for Maryland, BALT. SUN, June 7, 1998, at lA.

(438) David Malakoff, Restored Wetlands Flunk Real-World Test, 280 Sci. 371 (1998). However, some wetland experts think that tidal wetland restoration will be effective, albeit more time consuming, than was initially anticipated. Id. at 372.

(439) King & Bohlen, supra note 435, at 3.

(440) SCODARI, supra note 140, at 45.

(441) Tolman, How We Achieved, supra note 166, at 21.

(442) For example, the Smithsonian Environmental Research Center has found that restored wetlands can purify water by removing a substantial percentage of nutrients from agricultural runoff. TOLMAN, CHESAPEAKE WILDLIFE HERITAGE, supra note 380.

(443) As James Huffman, Dean of the Northwestern School of Law of Lewis and Clark College notes, "[t]he pervasive notion that society can avoid the costs of public action if government can avoid compensating for property affected is simple self-deception. The costs of government action will be borne by someone." James L. Huffman, Avoiding the Takings Clause Through the Myth of Public Rights: The Public Trust and Reserved Rights Doctrines at Work, J. LAND USE & ENVTL. L. 171, 173 n.9 (1987).

(444) See, e.g., Loveladies Harbor v. United States, 27 F.3d 1545 (Fed. Cir. 1994) (rehearing in banc); Florida Rock Indus. v. United States, 18 F.3d 1560 (Fed. Cir. 1994); Bowles v. United States, 31 Fed. Cl. 37 (Fed. Cl. 1994); Formanek v. United States, 26 Cl. Ct. 332 (Cl. Ct. 1992); Beure-Co. v. United States, 16 Cl. Ct. 42 (Cl. Ct. 1988).

(445) TOLMAN, SWAMPED, supra note 163, at 6. Because groups such as DU facilitate many of the wetland restoration efforts conducted under federal incentive programs, it is possible that some wetland acres are double counted.

(446) Ducks Unlimited, Frequently Asked Questions (visited July 27, 1998) <http://www.ducks.org/4x/general.html#2>.

(447) TOLMAN, CHEASAPEAKE WILDLIFE HERITAGE, supra note 380, at 2.

(448) Id.

(449) North American Waterfowl Management Plan Committee Selects Recipients of Its 1995 Wetland Conservation Awards, PR NEWSWIRE, May 8, 1995.

(450) ROBERT J. SMITH, CENTER FOR PRIVATE CONSERVATION, VIANSA WINERY WETLANDS, PRIVATE CONSERVATION CASE STUDY (June 1997). Regulatory requirements delayed the project for over a year and more than tripled the cost of the project. Id. at 4.

(451) Id. at 2.

(452) ANDERSON & LEAL, supra note 414, at 60-61. Due to seasonal migration, pothole preservation in southern Canada, while beyond the reach of U.S. government programs, is important for conserving waterfowl in the United States.

(453) Id. at 61. Nesting success averages above 50% at adopted sites but only 10% to 15% at unadopted sites.

(454) See Lee Ann Welch, Property Rights Conflicts Under the Endangered Species Act: Protection of the Red-Cockaded Woodpecker, in LAND RTS 151, 167-68, 173-78 (Bruce Yandle ed., 1995). Ben Cone owned substantial forest land in North Carolina on which he engaged in selective cutting and other practices to provide habitat for various species. After red-cockaded woodpeckers were discovered on his land, his conservation efforts were rewarded with federal regulations that reduced the value of his land by an estimated 96%. Id. at 175. Cone's case received significant national attention, and he eventually received an incidental take permit for portions of his land, after much potential habitat had been lost. 62 Fed. Reg. 54, 121-422 (Oct. 17, 1997).

(455) Quoted in Betsy Carpenter, The Best-Laid Plans: Habitat Conservation Is Not Nearly as Simple or Rational as It Sounds, U.S. NEWS & WORLD REPORT, Oct. 4, 1993, at 89, 90.

(456) Larry McKinney, Reauthorizing the Endangered Species Act-Incentives for Rural Landowners, in DEFENDERS OF WILDLIFE, BUILDING INCENTIVES INTO THE ENDANGERED SPECIES ACT 74 (1993).

(457) Endangered and Threatened Wildlife and Plants; Proposed Special Rule for the Conservation of the Northern Spotted Owl on Non-Federal Lands, 60 Fed. Reg. 9484, 9508 (Feb. 17, 1995) (to be codified at 50 C.F.R. pt. 17) (proposed Feb. 17, 1995).

(458) See, e.g., Leslie Salt Co. v. United States, 896 F.2d 354 (9th Cir. 1990) (subjecting landowner to wetland regulation even though the wetland in question was artificially created); John Miller, Land of the Free, in POLICY REVIEW, Winter 1993, at 66. Rancher Dayton Hyde found his land "regulated for wetlands which did not exist until he created them." Id. at 67.

(459) Filling a wetland without a permit from the Corps of Engineers violates federal wetland regulations. Modifying land that is not deemed actual or potential habitat by the Fish and Wildlife Service is not itself a violation of federal regulations.

(460) Of course, if the federal government compensated landowners for the costs imposed by federal land-use controls, the perverse incentives would be significantly reduced. See Richard Stroup, The Economics of Compensating Property Owners, 15 CONTEMP. ECON. POL'Y 55 (1997); JONATHAN H. ADLER, COMPETITIVE ENTERPRISE INST., PROPERTY RIGHTS, REGULATORY TAKINGS AND ENVIRONMENTAL PROTECTION (1996).

(461) The Nationwide Permit 26 program, for example, allowed the filling of small isolated wetlands without a section 404 permit from the Corps. See Drew Caputo, Nationwide Permit Program, SB99 ALI-ABA 119 (1997); Jodi Fender & Steven Reiness, Note, General Permits under Wetlands Law: The Rise and Fall of Nationwide Permit 26, 3 ENVTL. LAW. 891 (1997). In 1996, the Corps announced plans to phase out nationwide permit 26 and replace it with a more effective policy. 61 Fed. Reg. 65,874 (Dec. 13, 1996).

(462) Ted Williams, The Wetlands Protection Farce, AUDUBON, Mar.-Apr. 1995, at 30.

(463) For examples of wetland "horror stories" see Jonathan H. Adler, Protection for Property Owners, WASH. POST, June 3, 1996, at A16; Jonathan H. Adler, Regulatory Assaults on Your Personal Turf, WASH. TIMES, Apr. 30, 1996, at A15; Jonathan H. Adler, Takings Cause: The Property Rights Revolt, NAT'L REV., Dec. 19, 1994; Jonathan Tolman, A Sign of the Times, WALL ST. J., Sept. 20, 1994, at A22; Jonathan Tolman, Attack of the Wetland Enforcers, WALL ST. J., July 18, 1994, at A12; see also infra notes 480-85 and accompanying text for data on permit approval times.

(464) W.E. FRAYER ET AL., STATUS AND TRENDS OF WETLANDS AND DEEPWATER HABITATS IN THE COTERMINOUS UNITED STATES, 1950s TO 1970s (1983).

(465) THOMAS E. DAHL & CRAIG E. JOHNSON, WETLANDS, STATUS AND TRENDS IN THE CONTERMINOUS UNITED STATES, MID-1970s TO MID-1980s 18 (1991).

(466) Ralph Heimlich & Jeanne Melanson, Wetlands Lost, Wetlands Gained, 17 NAT'L. WETLANDS NEWSL. 24 (Envtl. L. Inst. Washington, D.C.), May-June 1995.

(467) Ralph E. Heimlich et al., Sustaining Our Wetland Gains, 19 NAT'L. WETLANDS NEWSL. (Envtl. L. Inst. Washington, D.C.), July-Aug. 1997, at 5.

(468) Ralph Heimlich and Jeanne Melanson of the Department of Agriculture note that "data from the 1987 NRI suggest that conversion for developed uses was greater after 1987 than before." Heimlich & Melanson, supra note 466, at 25.

(469) Tolman, Achieving No Net Loss, supra note 166, at 6.

(470) Heimlich & Melanson, supra note 467, at 25.

(471) Tolman, How We Achieved, supra note 166, at 20.

(472) The author, with Professor Daniel Benjamin of Clemson University, performed a regression analysis of historical state housing starts, adjusted by housing stock and initial population, and found no indication that development has slowed in areas with a higher percentage of land classified as wetlands as wetland regulations have expanded.

(473) See TOLMAN, SWAMPED, supra note 163, at 6.

(474) William D. Barnard et al., The Use and Regulation of Wetlands in the U.S., in ASSOCIATION OF STATE WETLAND MANAGERS, WETLAND PROTECTION: STRENGTHENING THE ROLE OF THE STATES 27, 27 (1985) (emphasis added).

(475) TOLMAN, SWAMPED, supra note 163, at 7.

(476) GAO, supra note 159, at 10 tbl.1.

(477) See supra note 163 and accompanying text.

(478) TOLMAN, SWAMPED, supra note 163, at 19.

(479) Final Notice of Issuance, Reissuance, and Modification of Nationwide Permits, 61 Fed. Reg. 65,874, 65,893 (Dec. 13, 1996).

(480) VIRGINIA S. ALBRECHT & BERNARD N. GOODE, WETLAND REGULATION IN THE REAL WORLD 23 tbl.9 (1994). It is worth noting that a majority of these permits were withdrawn by the Corps, and not by the applicant. Id. at 26 tbl.11.

(481) Id. at 24.

(482) "Of the 173 cases that reported both a complete application-to-notice and notice-to-decision time, only 12, or 7 percent, met the 60-day limit." Id. at 17. In none of these cases was the Corps required to conduct an Environmental Impact Statement. Id.

(483) Id. at 20.

(484) Id. at 21.

(485) Id. This permit application involved the largest impact to wetlands of any in Albrecht and Goode's study. Id.

(486) See United States v. Wilson, 133 F.3d 251 (4th Cir. 1997); see also supra notes 310-11 and accompanying text.

(487) George Reiger, The Corps Revisited, FIELD & STREAM, Aug. 1, 1998, at 27.

JONATHAN H. ADLER, Senior Director of Environmental Policy, Competitive Enterprise Institute, Washington, D.C. This Article was written while the author was the 1998 William S. Broadbent Research Fellow at the Political Economy Research Center (PERC), Bozeman, Montana The author would like to thank Daniel Benjamin, Susan Dana, Anne Hayes, Richard Stroup, Jonathan Tolman, and Todd Zywicki for their comments and assistance, as well as all those who participated in the PERC summer seminars at which earlier drafts of this Article were presented.