On February 3, 2011, the United States Court of Appeals for the Ninth Circuit ruled that an owner of timberland in the Redwood Creek watershed had constitutional standing to challenge the listing of Redwood Creek as an impaired body of water under §303(d) of the Clean Water Act, 33 U.S.C. §1313(d). Barnum Timber Co. v. EPA, No. 08-17715 (9th Cir. Feb. 3, 2011). The decision is noteworthy because designating a body of water as impaired is only a preliminary regulatory step; the listing does not on its own impose restrictions on the property.
Under the CWA, states must identify bodies of water that are impaired by thermal or effluent pollution and submit a roster to the EPA for periodic approval. After the body of water is listed, the state and EPA must develop "total maximum daily loads" of pollution (TMDL) for each body and develop a plan to bring the body of water in compliance with the TMDL. California has listed Redwood Creek as impaired since 1992, and it again included Redwood Creek when it offered its 2006 list to EPA. Barnum Timber Company challenged the 2006 listing, claiming that it reduced the value of its Redwood Creek watershed property. The district court dismissed the complaint for lack of standing on the ground that Barnum Timber hadn't identified a connection between the asserted reduction in property values and EPA's listing of Redwood Creek.
The court of appeals reversed in a 2-1 decision, concluding that Barnum Timber satisfied all three elements of constitutional standing. The court concluded that Barnum Timber established an injury-in-fact by submitting declarations from two forestry experts that timberland in a listed watershed is worth less than similar property that is not in a listed watershed. The same declarations established a causal connection between EPA's listing and the reduction in property value through their assertion that property values fell as a result of the listing because the public perceives that listing portends regulation, which reduces property values. Finally, the court held that Barnum Timber satisfied the redressability requirement because the property value allegedly lost would be restored if Redwood Creek were removed from the list. Although the possibility of regulation of a listed water may be only speculative, the alleged injury to Barnum Timber based on the market perception of the listing was sufficiently concrete, causally connected to the listing, and capable of redress by a favorable court decision. The case was remanded for further proceedings.