A federal appellate court has struck down a permit requirement for wetlands development that had been a major headache for many developers, including small landowners. The case has added significance because the court's injunction against the regulation was expressly given nationwide application.

Under the Clean Water Act, the United States Army Corps of Engineers has the authority to require and issue permits for the "discharge" of dredged or fill materials into navigable waters at specified disposal sites. For purposes of the Act, "navigable waters" has been interpreted to include wetlands. "Wetlands," in turn, is basically defined to include areas that normally have enough surface or ground water to support vegetation suited to such conditions.

Prior to 1993, the Corps operated under a regulation that required permits for the addition of dredged material into wetlands, but which expressly excluded de minimis, incidental soil movement that happens during normal earthmoving operations. In 1993, as part of a settlement of a case in which a developer sought to drain and clear 700 acres of wetlands, the Corps changed its regulation by dropping the de minimis exception and bringing within the permit process "any ­redeposit" of dredged material. A redeposit occurs whenever material moved from water is returned to it, including "fallback" of material that is virtually unavoidable for any excavation or dredging done in wetlands.

What may have seemed like minor amendments to the rule at the time had far‑reaching consequences. The combination of a broad definition of wetlands and the addition of incidental fallback to regulated conduct meant that a host of new activities were subject to the expensive and time‑consuming process of getting the Corps' stamp of approval. Suddenly, federal permits were required for some previously unregulated activities, such as digging wells, removing trees and vegetation, creating drainage ditches, grading roads, and digging foundations.

Trade associations whose members engage in dredging and excavation were able to topple the regulation, commonly known as the "Tulloch Rule," on the basis of an elementary principle of law. No regulation issued by an administrative body can exceed the reach of the statute under which it was created.