This piece is a follow-up from Peter McGrath to his article “Supreme Court Considers Whether Wetlands Jurisdictional Determinations are Immediately Appealable.”
In a unanimous decision in May[1], the United States Supreme Court ruled that a jurisdictional determination by the United States Army Corps of Engineers stating that particular property contains “waters of the United States” is a final agency action judicially reviewable under the Federal Administrative Procedure Act. That Act allows a party aggrieved by certain types of federal agency actions to ask a Federal court to review the action. Courts have previously not reviewed jurisdictional determinations.
The Clean Water Act prohibits the discharge of any pollutant into the waters of the United States without a proper permit.[2] All of those terms – “discharge,” “pollutant” and “waters of the United States” – are broadly, but perhaps unclearly, defined. A landowner who owns property which contain waters of the United States must obtain a permit from the United States Army Corps of Engineers before filling the wetlands or any portion of them. Filling wetlands, or otherwise discharging pollutants into the waters of the United States without a permit can result in substantial civil and even criminal penalties.[3] It can be extremely difficult to determine whether any particular piece of property is or includes “waters of the United States.[4]” Because of that difficulty, the Corps allows property owners to request a “jurisdictional determination” specifying whether their property contains waters of the United States.[5] A jurisdictional determination may be either preliminary, stating that waters of the United States may be present, or approved, definitively stating the presence or absence of such waters.[6] An approved jurisdictional determination is valid for five years and is binding on the Corps and the Environmental Protection Agency.
If the Corps issues an approved jurisdictional determination, the affected property owner may find that the owner’s ability to use or develop the property may be significantly impaired or even eliminated. What to do, then, if the Corps issues an approved jurisdictional determination with which the property owner disagrees? The Corps does provide an administrative process for appealing jurisdictional determination, but property owners often find that process unsatisfactory. The appeals board is also a Corps body, so property owners may feel that the appeals board is not necessarily independent.
In the United States Army Corps of Engineers vs. Hawkes Co., Inc. case, property owners engaged in mining peat in Minnesota sought a permit from the Corps to discharge fill material into wetlands on property they owned and hoped to mine. The property owners received and approved jurisdictional determination from the Corps stating affirmatively that the property contained waters of the United States, because its wetlands had a “significant nexus” to the Red River of the North, located some 120 miles away. The property owners disagreed with the jurisdictional determination. After exhausting administrative remedies by unsuccessfully appealing the determination through the Corps process, the property owners sought review of the jurisdictional determination in Federal Court under the Administrative Procedure Act, but their complaint was initially dismissed for lack of jurisdiction. The District Court held that the jurisdictional determination was not an action a federal court could review under the Administrative Procedure Act. The property owners appealed that decision to the Court of Appeals for the Eighth Circuit. The Court of Appeals reversed that decision, directing the District Court to review the determination. The Corps then appealed that reversal to the Supreme Court.
The position of the Corps had been that it took no agency action reviewable in court until it issued or denied a permit. The Supreme Court in Hawkes disagreed. The Supreme Court held that in general, two conditions must be satisfied for an agency action to be final. First, the action must mark the consummation of the agency’s decision-making process and second, the action must be one by which rights or obligations have been determined from which legal consequences will flow.[7] The Corps believed that landowners had two alternatives after receiving a jurisdictional determination with which they would disagree. The landowner may proceed without a permit and argue in an enforcement action that a permit was not required, or they may complete the permit process and then seek judicial review which, the Corps believed, is what the Clean Water Act favors. The Supreme Court held that neither alternative adequately protects the rights of the property owner. The parties need not await enforcement proceedings before challenging final agency action where such proceedings carry the risk of serious criminal and civil penalties. Further, the Court found that the permitting process is not only costly and lengthy, but also irrelevant to the finality of the jurisdictional determination and suitability for judicial review.
Although it is too early to develop much meaningful data about how often property owners will look to courts to review adverse jurisdictional limitations, we can assume requests for review will happen with some regularity in the future. Judicial decisions in those cases may provide some meaningful definition to the confusing questions about which properties are waters of the United States.
[1] United State Army Corps of Engineers v. Hawkes Co., Inc., __ U.S. __ (2016)
[2] 33 U.S.C. §§ 1311(a), 1362(7), (12).
[3] Id., §§ 1319(c), (d).
[4] Hawkes, p. 2
[5] 33 CFR 331.2.
[6] Id.
[7] See, Bennett v. Spear, 520 U.S. 154.
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