Why is ARNI an environmental permitting stumbling block?

By Frank E. Matthews, Amelia A. Savage, and John J. Truitt

ARNI, as used by federal wetland regulators, stands for "aquatic resources of national importance."  In the current context of environmental permitting, the Environmental Protection Agency (EPA) uses ARNI to justify elevated review and veto Army Corps of Engineers' (Corps) Clean Water Act (CWA) section 404 wetland permits.  But, ARNI is neither a legislatively created term nor defined in regulations. 

Section 404(q) of the CWA directs the Secretary of the Army to enter into agreements with the heads of various federal agencies to minimize duplication, needless paperwork, and delays in the issuance of dredge and fill permits.  Ironically, this led to multiple Memoranda of Agreement (MOAs) between the Corps and other agencies.  These MOAs created ARNI.

Essentially, the multiple memoranda provide the same elevation process for ARNIs and only differ as to the named agencies.  An MOA frequently cited as a source of the term ARNI is the Aug. 11, 1992, MOA between the EPA and the Corps - the "ARNI MOA."  The ARNI MOA states that EPA may request elevated review for ARNIs; however, the MOA does not define the term ARNI.  In fact, nothing defines ARNI -- no law, no regulation, not even a published guidance document.

A review of multiple projects where EPA has used the term reveals that ARNI is a broad term with almost limitless boundaries.  The Chesapeake Bay, vernal pools, bottomland hardwoods, sub-alpine fens, bogs, coastal marshes, forested wetlands, priority habitat for migratory birds, essential fish habitat for federally managed fisheries, and seagrass have all been termed ARNIs.

In a recent example, EPA requested elevated review of a permit for a phosphate mining operation in North Carolina because the permit would result in unacceptable impacts to an ARNI.  The North Carolina Natural Heritage Program deemed the wetlands at issue to be "Significant Natural Heritage Areas" -- a term the state agency uses to identify areas important for conservation of biodiversity.  EPA partially relied on the state's determination, made for state purposes, in deeming the wetlands an ARNI.  EPA told the Corps that the permit should not be issued because the impacts to the ARNI were unacceptable and could not be mitigated.  In part, EPA relied on the ARNI classification as justification for elevating the review and threatening to veto the permit under EPA's Section 404(c) veto powers.

The significant legal problem associated with projects such as the phosphate mine is that the permittee often has little to no idea as to whether it is impacting an ARNI or not.  Under the Federal Administrative Procedures Act, an agency must rely on published regulations when it applies interpretations of general applicability or statements of general policy.  The Corps, by creating ARNI, and EPA, by using ARNI, have created a mere interpretive rule. 

Obviously the agencies believe that aquatic resources of national importance should gain special review given their nature as special aquatic sites.  The ARNI label is not needed, however, because regulations exist for special aquatic sites.  EPA's regulations governing special aquatic sites are found at Subpart E of 40 C.F.R. Part 230.  The "special aquatic sites" label encompasses: sanctuaries and refuges, wetlands, mud flats, vegetated shallows, coral reefs, and riffle and pool complexes.  These special aquatic site categories encompass all of the ARNIs listed earlier. 

Occasionally judges confuse ARNIs and special aquatic sites, although it appears the terms may be used interchangeably.  In the opinion for Jones v. Rose, 2008 WL 552666 (D. Or. 2008) (not published in the Federal Supplement), the judge stated that ARNIs are those resources listed at Subpart E (i.e., special aquatic sites).  If a judge cannot tell the difference between ARNIs and special aquatic sites, how can EPA continue to use the undefined label ARNI as justification for elevated review or exercise of section 404(c) veto power?  And if there is no difference between the two, why is the term ARNI needed?

The ARNI problem is especially relevant in Florida, where EPA Region 4 now uses the ARNI label more frequently than ever before.  The use of "ARNI," rather than the use of "special aquatic sites," increases the uncertainty in environmental permitting.  As uncertainty increases, so do resource expenditures.  Applicants are forced to spend more money as lawyers and consultants are forced to spend more time navigating the undefined field of ARNIs.

Therefore, one of two things must occur.  Either EPA ceases its use of the term ARNI and returns to using the properly promulgated labels for special aquatic sites, or EPA properly promulgates regulations defining and clarifying ARNI.  Until one of these options occurs, applicants and their agents must continue wading through the uncertainty caused by ARNI.

Frank E. Matthews is a shareholder with the firm Hopping Green & Sams in Tallahassee, Florida and his full biography can be found at http://www.hgslaw.com/lawyers/frank-e-matthews.html.  Amelia A. Savage is an associate with Hopping Green & Sams and John J. Truitt was a law clerk and summer associate with the firm.

Published in Trends, ABA Section of Environmental, Energy, and Resources Newsletter, Volume 41, Number 3, January/February 2010. © 2010American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.