EXHIBIT II

FEDERAL AUTHORITY OVER NAVIGABLE WATERS-POWER TO FIX BULKHEAD LINES A. SOURCE AND SEAT OF ORIGINAL AUTHORITY

The power over navigable waters is in the Congress. (Gibbons v. Ogden 9 Wheat 1, 6 L.Ed. 23 (U.S. 1824)

The grant of power to Congress to regulate commerce is the source of this power to regulate navigation and navigable waters. (United States Constitution, Art. 1, Sec. 8, Clause 3., Gibbons v. Ogden, supra.)

By virtue of this clause, and the clause empowering Congress to make all laws necessary to carry into execution the federal judicial power in admiralty and maritime matters, "navigable waters of the United States" are under the Control of Congress which has the power to legislate with respect thereto, as far as commerce is concerned. (United States Constitution, Article 1, Sec. 8. Cl 18; Silas Mason Co. v. Tax Commission of State of Washington, 58 S. Ct. 233, 302 U.S. 186, 82 L.Ed. 187; 65 C.J.S.) 10.

There was no provision for federal control of inland waterways in the U.S. Constitution, so that national jurisdiction over maritime matters was first confined to tidewaters (The Thomas Jefferson, 10 Wheat 358 (U.S. 1825). This view was soon repudiated and the rule that navigability in fact constituted navigability in law was adopted. (The Genesee Chief v. Fitzhugh, 12 How. 443 (U.S. 1851). The landmark decision in the Gibbons ease, supra, that navigation was commerce within the meaning of the "commerce clause" of the U.S. Constitution permitted the extension of federal jurisdiction in this area.

B. POWER TO FIX HARBOR LINES

It was further decided that the federal government, in the exercise of its authority to regulate commerce upon navigable waters, was empowered to establish harbor lines, thus defining limits beyond which the erection of wharves, piers, docks or other structures, or the deposit of materials shall not be made in navigable waters. (Seattle v. Oregon, etc., R. Co. 41 S. Ct. 237. 255 U.S. 56, 65 L.Ed. 503; Gibson v. U.S., 17 S. Ct. 578, 166 U.S. 269 41 L.Ed. 996; Scranton v. Wheeler 21 S. Ct. 48, 179 U.S. 141 45 Led. 126; Union Bridge Co. v. U.S. 27 S. Ct. 367, 204 U.S. 364 51 Led 523; Philadelphia Co. v. Stimson, 32 S. Ct. 340, 223 U.S. 605, 56 L.Ed. 570; Greenleaf-Johnson Lumber Co. v. Garrison, 35 S. Ct. 551, U.S. 251, 59 L.Ed. 939.

C. DELEGATION OF POWER BY CONGRESS TO FIX HARBOR LINES

The power of Congress to fix and determine harbor (bulkhead) lines has been delegated to the Secretary of the Army.

By Act of 1886, (Act August 5, 1886, c. 929, sec. 2, 24 Stat. 329) the Congress had delegated the authority to fix harbor lines to the Secretary of War for the purpose of limiting the line beyond which deposits could be made.

In subsequent years this legislation was extended and broadened. (Act August 11, 1888, c. 860 sec. 12, 25 Stat 425 as amended by Act Sept. 19, 1890, c. 907, sec 12, 26 Stat. 455) authorizing the establishment of harbor lines by the Secretary of War for general navigable purposes.

"Where it is made manifest to the Secretary of War that the establishment of harbor lines is essential to the preservation and protection of harbors, he may, and is hereby authorized to cause such lines to be established, beyond which no piers, wharves, bulkheads or other works shall be extended or deposits made, except under such regulation as may be prescribed from time to time by him."

This section was thereafter transposed verbatim into the Rivers and Harbors Appropriation Act of 1899 (30 Stat. 1151, sec. 11 3-3-1899) the provisions of which were codified in 33 U.S.C.A., sec. 404 and which is the present applicable law on the subject.

The title of the Secretary of War was changed to Secretary of the Army, and the Department of War was designated the Department of the Army by section 205 (a) of Act July 26, 1947, c. 343, Title II, 61 Stat. 501.

The delegation by Congress to the Secretary of the Army of the power to fix harbor lines has been held a valid one (Greenleaf-Johnson Lumber Co. v. Garrison, supra, Philadelphia Co. v. Stimson, 32 S. Ct. 340, 223 U.S. 605, 56 L.Ed. 570.)

The rules and regulations of the Secretary of the Army pertaining to the determination of harbor lines are presently set forth in the Code of Federal Regulations, Corps of Engineers, 33 C.F.R. sec 209.150.

Under these regulations harbor lines, (bulkhead and pierhead) are established by the Secretary of the Army acting through the Corps of Army Engineers.

D. POWER TO PROHIBIT OR CAUSE REMOVAL

Under the provisions of the Rivers and Harbors Act of 1899, (Act March 3, 1899, c. 425, sec 10, 30 Stat 1151; 33 U.S.C.A. sec 403),

"The creation of any obstruction not affirmatively authorized by Congress to the navigable capacity of any of the waters of the United States is prohibited; . . . and it shall not be lawful to excavate or fill, or in any manner to alter or modify the . . . condition or capacity of, any port, roadstead, haven, harbor, canal, lake, harbor or refuge . . . of any navigable water of the United States, unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army prior to beginning the same.' Congress has the power, which has been delegated to the Secretary of the Army, to prohibit the creation of any obstruction in navigable waters and to require the removal of such obstructions (Philadelphia Co. v. Stimson, supra; U.S. v. Chandler-Dumbar Water Power Co., 33 S. Ct. 667, 229 U.S. 53, 57 L.Ed. 1063; Greenleaf-Johnson Lumber Co. v. Garrison, supra; U.S. v. Bethlehem Steel Co. (D. Md. 1964 235 F. Supp. 569.) notwithstanding the former express authorization of Congress to erect the structure in question (Louisville Bridge Co. v. U.S. 37 S. Ct. 158, 242 U.S. 409, 61 L.Ed. 395)

In the Louisville Bridge case, supra, the bridge company built a bridge under the direct authorization of Congress, (Acts of July 14, 1862, c. 167, 12 Stat. 569 and February 17, 1865, c. 38, 13 Stat 431) and it was declared to be, a lawful bridge as built. Subsequently, the then Secretary of War declared the bridge as built an obstruction to navigation and required its modification or removal.

It was held that the Secretary of War had the power to declare the structure an obstruction to navigation and that no compensation was due under the fifth amendment of the Constitution.

Similarly, the Secretary of the Army has the power to order the removal of fill in a navigable water. In U.S. v. Martin etal (177 F. 2d 733) the United States brought suit to establish title to certain lands, part of it under water, along the eastern branch of the Potomac River.

Appellees Martin etal derived title to lots fronting on the river through conreyances to their predecessor in 1794. The land had since been extended into the river, partly by accretion but largely by artificial fill. A bulkhead line had been established in the river and some lots had been further filled to that line. The U.S. claimed all lands channelward of the high water line of 1794. Held—an owner of riparian lands has a "qualified right" to make fills in the river. But the exercise of this qualified right does not affect the power of the U.S. with regard to navigation. "Structures in the bed of a navigable stream. . . may be injured or destroyed without compensation by a federal improvement of navigable capacity... Any structure is placed in the bed of a stream at the risk that it may be so injured or destroyed."

Any land originally under water and part of a navigable river continues to be treated as land under water even after it is filled. (City of New York v. Wilson & Co., 278 N.Y. 86, 97; U.S. v. Martin etal, supra.

Therefore, the right of a riparian owner to fill out to the bulkhead line is a "qualified right" at most.

E. COMPENSATION FOR REMOVAL

The damage sustained by one who must remove an obstruction in navigable waters is not compensable under the fifth amendment. It has always been held that the damage sustained results not from a taking of the riparian owners property in the stream bed, but from the lawful exercise of a power to which the property has always been subject. (Greenleaf-Johnson Lumber Co. v. Garrison, Supra, Philadelphia Co. v. Stimson, supra, Union Bridge Co. v. U.S. supra, Louisville Bridge Co. v. U.S. supra, U.S. v. Martin etal supra.)

The only limitations on the right of the United States to require removal of structure on navigable waters without compensation are that it be to aid navigability and that it not be arbitrary. (U.S. v. Martin etal, supra.)

F. WATERS DECLARED NONNAVIGABLE

The incidence of commerce is the basis of federal control over navigable waters. If waters are declared nonnavigable by Congress, necessarily the incidence of commerce is destroyed, and the federal government is ousted from authority to control.

Congress has at various times declared certain waters to be nonnavigable within the meaning of the U.S. Constitution. The acts fall into three broad categories: (a) abandonment of inland channels, (b) nonnavigable declaration with reservation of right to repeal and (c) nonnavigable declaration without reservation of right to repeal.

Of the approximately 46 instances contained in 33 U.S.C.A. §21-59b in which Congress has abandoned or declared nonnavigable certain waters, the right to repeal the section was reserved in 28 of such acts. (as one example-East River, Wisconsin, 33 U.S.C.A. sec 29 a. "All of that portion of the East River, in the County of Brown, State of Wisconsin, extending from Baird Street, in the City of Green Bay, east and south, is declared to be a nonnavigable within the meaning of the Constitution and Laws of the United States of America. The right to alter, amend, or repeal this section is expressly reserved. "Aug. 30, 1935, c. 831, sec. 9. 49 Stat 1048.)

The right to repeal, etc. was not reserved in approximately eighteen instances. Sec. 307 of the River and Harbor Act of 1965, (Pub. Law 89-298, 79 Stat 1094) contains no such reservation.

"That portion of the East River, in New York County, State of New York, lying between the south line of East Seventeenth Street, extended eastwardly, the United States pierhead line as it existed on July 1, 1965, and the south line of East Thirtieth Street, extended eastwardly, is hereby declared to be not a navigable water of the United States within the meaning of the Constitution and the laws of the United States."

G. CONSTITUTIONALITY

Since the rule is well settled that water which is navigable in fact is navigable in law, a constitutional question may arise over the authority of Congress to declare as nonnavigable, water which is in fact navigable and which has been judicially declared navigable.

EXHIBIT III

PART II.-RECOMMENDATIONS FOR DEALING AT A FEDERAL LEVEL WITH THE
PROBLEM OF THE NAVIGATION SERVITUDE

1. BACKGROUND OF THE PROBLEM

As a result of the paramount right of the United States to control navigable waters for purposes of commerce and navigation under the commerce clause (Art. 1, §8) of the United States Constitution, any effort to develop permanent construction projects over such waters are subject to uncompensated taking by the federal government in condemnation. This right, which has been designated as the "navigation servitude," has inhibited the development of waterfront areas over navigable waters by private enterprise, because the right of the sovereign to take in eminent domain without compensation creates a hazard to financing which makes the development of such project difficult from a practical point of view.' Title companies generally list this right as an exception in policies of title insurance which has the effect of rendering the property largely unmortgageable.2

Increasingly, the devolepment and expansion of facilities in urban areas has been impeded by a lack of available space for the construction of new residential, commercial and industrial facilities. This has compelled developers of real

1 A comprehensive discussion of the problem is contained in an article "Underwater Land and the Navigation Servitude" beginning at page 6 of the May 2nd, 1966 issue of Columbia Journal of Law and Social Problems. When it is cited hereafter, it will be referred to as "Columbia Journal."

2 See, "Are Offshore Properties Insurable?," Real Estate Forum, January 1966, p. 8: Schlitt, Carl D., "Waterfront Renewal Held Back by Obscure Legal Impediment." New York Law Journal, September 12, 1966, p. 1 supp.. col. 2; Johnson and Austin, "Recreational Rights and Titles to Beds of Western Lakes and Streams," 7 Nat. Res. J. 1, 4 (1967).

estate in urban areas to seek new ways of expanding the city's physical facilities to keep them in step with the rapid growth currently being experienced in most metropolitan areas. The waterfront of our major cities, most of which abuts on navigable waters, present a most fruitful area for the creation of a relatively new and untapped space resource. However, since this crucial avenue of future urban expansion gives rise to the problem posed by the doctrine of the navigation servitude, a study of the legal aspects of that doctrine, in the context of this need, became one of the two subject for this Committee's study this year.

2. WHERE DOES THE NAVIGATION SERVITUDE APPLY

The test of navigability in the United States, as distinguished from the common law where only tidal waters were navigable, is one of fact. Waters are navigable in fact "when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water." " Many fresh water rivers and lakes, therefore, constitute navigable waters, irrespective of whether they are tidal or not, and are affected by the problem.

Title to the land underlying navigable waters (the "bed" thereof) is generally vested in the state in which such land is located unless it has previously been conveyed by the state to a municipality or a private upland owner. In any event, ownership of such navigable areas is impressed with a trust or servitude in favor of the general public which requires it to be used for purposes of navigation, fishing, commerce or a public purpose or public use. The state has the power to alienate rights in such land, if they "may afford foundation for wharves, piers, docks and other structures in aid of commerce" or which "being occupied, do not substantially impair the public use in the lands and waters remaining.” ' While the state, in granting such ownership or rights may impose use restrictions, they are, nevertheless, subject to the paramount right of the navigation servitude in the United States.

The bed of a navigable water-way ordinarily is deemed to extend to the high water mark. Obviously, all of the area up to the high water mark may not be navigable in fact, and it may be necessary to utilize part of the area for wharves, piers, docks and other structures in order to reach the part which is actually navigable. Consequently, the Secretary of the Army has been authorized to permit filling and the erection of wharves, piers and other structures in navigable waters when the project is recommended by the Chief of Engineers.10 The Secre tary is likewise authorized to establish "harbor lines" " and when a harbor line has been established, the permit to erect wharves, piers and other improvements is required only if they are on the water side of the harbor line.12

13

12

But the permits granted by the Secretary for obstructions in waters where no harbor line has been established, or beyond the harbor line when one has been established, are made expressly subject to revocation. Moreover, the power of the Secretary to re-establish a harbor line and to require the removal of obstructions erected on the shore side of the former line without payment of compensation for the value of the improvements, or for the damage resulting from the removal thereof, has been expressly recognized by the United States Supreme Court." Consequently, any improvement made by the owner of land underlying navigable water, regardless of whether or not made pursuant to permit by the Secretary of the Army, and even if made within an established harbor line, possibly made be subject to removal without compensation to the owner if, in the judgment of the then Secretary of the Army, it constitutes an obstruction to navigation.'

15

See, e.g., the 98-acre, $600,000,000 project proposed by New York's Governor Rockefeller to be constructed on filled-in land along lower Manhattan, New York Times, May 13, 1966, p. 1, col. 2.

The Daniel Ball, 77 U.S. 557 (1870).

The Daniel Ball, supra, note 4.

III American Law of Property, Sec. 12-27, 1.c.p. 248.

Illinois Central Railroad v. Illinois, 146 U.S. 387 (1892).

*Columbia Journal, supra, note 2, 1.c. 6.

III American Law of Property, Sec. 12-27 1.c. 250.

30 Stat 1151 (1899) 33 USC Sec. 403 (1964).

1130 Stat 1151 (1899), 33 USC Sec. 404 (1964).

1230 Stat 1151 (1899), 33 USC Sec. 403 (1964).

"See, Page 8, Pamphlet, Permits For Work In Navigable Waters, issued by Corps of Engineers, Department of the Army, 1962."

Greenleaf-Johnson Lumber Company v. Garrison. 237 U.S. 251 (1915).

15 See, discussion and authorities cited in Columbia Journal, supra, note 1.

3. THE IMPORTANCE OF THE PROBLEM

As has been stated, private ownership or rights may be created in land underlying navigable water if the purpose of such ownership is either in aid of, or does not interfere with commerce. Many improvements made in aid of commerce, such as wharves, docks, piers, etc.. may be of semi-permanent nature and are subject to removal if the area of practical navigability changes or expands. Many such improvements, however, are permanent and are made only after the bed has been filled in so that the area is no longer occupied by water and, unless removal of the fill is required by governmental action, will never again be occupied by water. Even when we recognize that the Secretary cannot act in an arbitrary fashion and also that no reported case has been found where action by the Secretary has resulted in the removal of permanent improvements erected on filled ground, the fact that the right of removal without compensation exists nevertheless remains a deterrent to such permanent improvements."

As a consequence of the inexorable drive of urbanization and population expansion, action must be taken to blunt the impact of the navigation servitude as a deterrent to the development of these crucial areas in the United States, and this Committee believes that procedures can be developed which would per mit such redevelopment without in any way impairing the rights and responsibilities of the Federal Government. This would involve developing some method whereby a determination can be made concerning present or reasonably foreseeable future need, so that a navigable area can be made available for permanent development. Thus, where no real need related to navigation and commerce appears, it is believed that the rights of the United States should be relinquished to permit permanent development, to be re-established only by a taking with compensation. At the same time, it is recognized that the public interest requires that the relinquishment of these rights must be surrounded by safeguards which will preclude hasty or improvident action.

20

Apparently the only method presently employed to accomplish this purpose is to have Congress pass an act directed at the specific navigable water affected. Acts so passed have either constituted a relinquishment of the right to exercise the power or a declaration that the particular water, or part of it, is nonnavigable an approach which has been subject to criticism. Critics of this approach have pointed out that a declaration by Congress of "non-navigability" offers little assurance to a mortgagee, title insurer, or developer, because at a later date Congress may re-evaluate the public need and declare the affected area "navigable" once again. Since the Federal Government has the power to assert its authority over navigable waters under the commerce clause, it seems that it may not permanently divest itself of that power by legislative fiat."

In any event, these procedures do not clarify the legal uncertainties that presently deter much needed waterfront development. Whatever the rationale for the doctrine of the navigation servitude may be, it has been applied only to naviga tion in water since it has been long established that the condemnation of rights to land by the government, which might happen to be for the benefit of naviga tion, may not be made without compensation.” It is the opinion of the Committee that, if it is conceded that there are factual circumstances which justify the permanent relinquishment by the United States of its navigation rights to a particular area of navigable water, a procedure should be formulated which would permit a final determination to be made and the relinquishment accomplished without further Congressional action on each specific situation.

16 United States v. Kansas City Life Insurance Company, 339 U.S. 799 (1950). 17 See, note 3, supra.

18 See, for example, 33 USC Sec. 27 (1964).

19 See, for example, 33 USC Sec. 40 (1964).

20The Navigation Servitude and Waterfront Development," speech delivered by Curtis J. Berger to New York State Land Title Assn., Cooperstown, N.Y., July 13, 1966. 21 Ibid.

22 See, e.g., Adaman Mut. Water Co. v. U.S., (Ct. Cl., 1960) 181 F. Supp. 658