US Supreme Court Allows for Pre-Permit Judicial Review of Clean Water Act Jurisdictional Determinations | Practical Law

US Supreme Court Allows for Pre-Permit Judicial Review of Clean Water Act Jurisdictional Determinations | Practical Law

The US Supreme Court recently held that a jurisdictional determination by the Army Corps of Engineers that a property contains "waters of the United States" is a final agency action subject to judicial review under the Administrative Procedure Act. The ruling allows landowners to challenge a jurisdictional determination before engaging in the frequently lengthy and expensive process of applying for a Clean Water Act permit.

US Supreme Court Allows for Pre-Permit Judicial Review of Clean Water Act Jurisdictional Determinations

by Practical Law Real Estate
Published on 03 Jun 2016 • USA (National/Federal)
The US Supreme Court recently held that a jurisdictional determination by the Army Corps of Engineers that a property contains "waters of the United States" is a final agency action subject to judicial review under the Administrative Procedure Act. The ruling allows landowners to challenge a jurisdictional determination before engaging in the frequently lengthy and expensive process of applying for a Clean Water Act permit.
On May 31, 2016, the US Supreme Court held that an approved jurisdictional determination (JD) that property contains "waters of the United States" is a final agency action under the Administrative Procedure Act (APA), such that it can be judicially reviewed (United States Army Corps of Engineers v. Hawkes Co., Inc., No. 15-290 (U.S. May 31, 2016)).

Background

Under the Clean Water Act (33 U.S.C. §§1311(a), 1362(7) and (12)), landowners must obtain a Section 404 permit from the Environmental Protection Agency (EPA) in order to discharge a pollutant (including dirt, rocks, and fill material) into the waters of the US (including wetlands). Without such a permit, landowners risk substantial criminal and civil penalties. The permitting process is arduous, long and expensive, and it is often a significant challenge to determine whether the waters in question are waters of the US.
In order to speed the process, the Corps allows landowners to obtain a standalone JD specifying whether a particular property contains waters of the US.
Three companies engaged in peat mining began the permitting process and obtained a JD from the Corps definitively stating that the property contained waters of the US.
After exhausting administrative remedies, the companies sought review of the JD in federal district court under the APA. The district court dismissed the case for a lack of jurisdiction and the Eighth Circuit reversed. The US Supreme Court granted certiorari.

Outcome

The APA allows for the judicial review of an agency action if:
  • The action is considered final. An action is final if:
    • the action is the consummation of the agency's decision making process; and
    • the action determines the rights or obligations of a person or entity, or will lead to legal consequences.
  • There are no adequate alternatives to APA review in court.
The Court held that the JD issued by the Corps met the qualification of a final agency action subject to judicial review under the APA.
The Court limited its holding to "approved" (or final) JDs, which are definitive determinations, in contrast to those that are "preliminary", which only say that waters of the US may be present but not definitively.
The Court did not consider the question of whether the wetlands in question were waters of the US, but rather remanded that issue to the district court. For more information on the EPA's efforts to clarify the definition of waters of the US see Legal Update, Waterlogged! District Court Injunction Blocks Clean Water Act Rule from Taking Effect in 13 States.

Practical Implications

This case is a significant development for landowners undertaking a project that requires a Section 404 permit. Section 404 permits are generally required for projects that may fill or impact wetlands, marshes, streams or other water bodies. The ability to challenge a JD from the Army Corps prior to applying for a Section 404 permit has given landowners a judicial avenue of review prior to undertaking the lengthy and often expensive process of applying for a permit.
Landowners and their counsel should be sure to consider the option of requesting a JD when undertaking a project that may impact wetlands or other water bodies and should make note of the limitation of this Supreme Court holding to only approved JDs.