Unanimous Supreme Court Sides With Property Owners In Clean Water Act Row

by Morrison & Foerster LLP
Contact

Introduction

On Tuesday, the U.S. Supreme Court issued an important decision that continues a trend of judicial skepticism toward federal agency efforts to avoid judicial review of agency permitting and related actions. In the high-stakes Clean Water Act (CWA) case Army Corps of Engineers v. Hawkes Co., Inc., a unanimous Court held that the Army Corps of Engineers’ “jurisdictional determination” findings that property features are “waters of the U.S.” subject to CWA requirements are “final agency actions” amenable to immediate legal challenge. Tuesday’s decision comes four years after the Court ruled, also unanimously, in Sackett v. EPA that a landowner could sue to challenge an EPA “compliance order” finding that it had filled “wetlands” qualifying as “waters of the U.S.” under the CWA. Although both decisions came in the context of CWA jurisdictional findings, which have long been controversial because of the federal government’s sweeping view of its authority in this area, the decisions could signal a greater willingness on the part of the Court to allow for speedy judicial review in cases arising from other permitting and enforcement regimes.

CWA Jurisdictional Determination

In 2010, Hawkes Co. Inc. applied to the Army Corps of Engineers (Corps) for a CWA section 404 permit to “fill” wetlands in the course of expanding its northwestern Minnesota peat mining operation. Two years later, the Corps issued a final jurisdictional determination finding that Hawkes’ 150-acre property included “waters of the U.S.” subject to the CWA.

The wetlands in question, according to the Corps, had a “significant nexus” to the Red River, a traditional navigable water of the U.S. located some 120 miles from the wetlands themselves. Hawkes and related property owners filed suit against the Corps under the Administrative Procedure Act (APA), contending that the Corps’ jurisdictional determination was unlawful and that the land in question was therefore not subject to CWA permitting requirements.

Circuit Split

The district court granted the Corps’ motion to dismiss, concluding that the property owner could not challenge the jurisdictional determination under the APA because the determination was not a “final agency action for which there is no other adequate remedy in a court.” The Eighth Circuit reversed, concluding that the jurisdictional determination was amenable to immediate judicial review. That decision created a conflict with an earlier Fifth Circuit decision. The Supreme Court then granted a petition for a writ of certiorari filed by the Solicitor General on behalf of the Corps asking the Court to resolve the conflict by finding that Corps jurisdictional determinations are not final agency actions.

Supreme Court Finds Final Agency Action

In an opinion written by Chief Justice John Roberts, the Court rejected the Corps’ position and concluded that the property owner could immediately challenge the jurisdictional determination. In so finding, the Court relied heavily on its 1997 decision in Bennett v. Spear, which held that agency actions are “final” if they meet two conditions. First, the action must constitute the completion of the agency’s decision-making process. Second, the action must result in the conferral of rights, obligations, or legal consequences.

In Hawkes, the Corps conceded that the first condition was satisfied because a jurisdictional determination “clearly ‘mark[s] the consummation’ of the Corps’ decisionmaking process” on the question of “waters of the U.S.” The Court also found the second condition satisfied because a jurisdictional determination has “direct and appreciable legal consequences.” In particular, a jurisdictional determination that property does not include waters of the U.S. provides a safe harbor for certain federal enforcement actions. Conversely, a positive jurisdictional determination constitutes a denial of that safe harbor.

Even a final agency action may not be amenable to immediate review under the APA if there exist adequate alternatives for review. The Court rejected the Corps’ argument that such adequate alternatives were present in this case, and this portion of the decision is the one that potentially has the most long-term significance. The Corps noted that a party that fills wetlands without a permit may defend itself in any enforcement action on the ground that the jurisdictional determination was wrong and that no permit was actually needed. In addition, the Corps observed, a party can seek a permit and then “seek judicial review if dissatisfied with the results.”

The Court found neither of the Corps’ alternative routes to judicial review sufficient. Citing its Sackett decision, the Court rejected the notion that a property owner can reasonably be expected to risk sanctions and “wait[] for EPA to ‘drop the hammer’ in order to have their day in court.” Second, the Court rejected the notion that property owners should have to go through the “arduous, expensive, and long” permitting process before securing judicial review of whether that permitting process was even required in the first place.

In a concurring opinion joined by Justices Thomas and Alito, Justice Kennedy stated that “the reach and systemic consequences of the Clean Water Act remain a cause for concern.” He went on to shoot what appear to be a couple of warning shots across the bow of the Corps. First, in response to the government’s suggestion that the Environmental Protection Agency might not be obligated to respect a negative jurisdictional determination by the Corps, Justice Kennedy suggested that the Due Process Clause might embody such a requirement. Second, in response to the government’s suggestion that the Corps could simply cease issuing jurisdictional determinations altogether, Justice Kennedy stated that the absence of such an important safeguard for property owners would “raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.”

Increased Judicial Scrutiny Under the Clean Water Act and Beyond?

The Court’s decision allowing immediate challenges to jurisdictional determinations is a major victory for property owners. The Corps issues thousands of CWA jurisdictional determinations each year, and they may now be immediately challenged in court. Yet much uncertainty lingers in this area. For example, it remains to be seen whether and how the Corps will respond to the Court’s ruling and the prospect of increased judicial scrutiny of its jurisdictional determinations. On the one hand, the Corps may react by making less expansive jurisdictional determinations. On the other hand, however, the Corps may seek to revise its regulations in an attempt to render jurisdictional determinations of little value to property owners, or even to eliminate them altogether (notwithstanding Justice Kennedy’s cautions to the contrary). At the same time, the Corps’ new Clean Water Rule embodying the government’s global view of its authority over “waters of the U.S.” remains stayed pending judicial review. The Supreme Court’s unanimous skepticism of the government’s position in both Hawkes and Sackett suggests that this important rule will get a hard look from the Supreme Court when and if it goes there for review.

Taking a broader view, the Court’s unequivocal rejection of the government’s long-standing opposition to “pre-enforcement review” in CWA cases may have wide-ranging implications for other federal regulatory programs involving permitting and similar actions. The Court’s focus on the unfairness of subjecting regulated entities to the delays and costs of the Corps’ permitting process before they may seek judicial review could have implications in other areas outside of the CWA and environmental regulation. Parties facing such lengthy and expensive pre-judicial review processes often view themselves as having no choice but to make concessions to the government to secure a permit — even when they think the government’s position is legally wrong — because they cannot afford to spend the time and money necessary to finally secure judicial review. Hawkes shows that the Court “gets” this dynamic and may signal its willingness to adapt judicial review doctrines to do something about it. 

[View source.]

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:

Morrison & Foerster LLP
Contact
more
less

Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.