In Belle Company v. U.S. Army Corps of Engineers, 761 F.3d 383 (5th Cir. 2014) [http://www.ca5.uscourts.gov/opinions/pub/13/13-30262-CV0.pdf], the Fifth Circuit distinguished the jurisdictional determination (JD) issued to Belle from the compliance order issued to the Sacketts and declined to extend “final agency action” status to a JD issued by the Corps. In Sackett v. EPA, 132 S. Ct. 1367 (2012) [http://www.supremecourt.gov/opinions/11pdf/10-1062.pdf], the Supreme Court ruled that a compliance order issued by the EPA was a final agency action and thus subject to judicial review under the Administrative Procedure Act (APA).
The Corps issued the JD to Belle, decreeing that the vast majority of the property on which a solid waste landfill was to be constructed was jurisdictional wetlands, effectively killing the project due to mitigation costs and difficulties in obtaining state permit modifications to accommodate that decision. After administrative appeals were exhausted, Belle sought judicial review in federal district court, claiming that the JD was “final agency action” under the APA. An appeal to the Fifth Circuit followed after the district court disagreed with Belle.
On appeal, Belle argued that the JD met the familiar two-prong test of Bennett v. Spear, 520 U.S. 154 (1997). Not only did the JD mark the consummation of the agency’s decision-making process, it determined Belle’s rights or obligations and legal consequences flowed to Belle from the JD.
Based on Fairbanks North Star Borough v. Corps, 543 F.3d 586 (9th Cir. 2008), an oft-cited Ninth Circuit decision on this point, the Fifth Circuit had no trouble finding (as did the district court) that the JD represented the consummation of the Corps’ decision making process. The issuance of the JD concluded an internal process (the administrative appeal process) for parties such as Belle to solicit the Corps’ ”official position” about the property. Additionally, through the JD, the Corps asserted its final position on the facts.
In assessing the second prong, the panel noted that both prior to and after Sackett, all of the courts, including the Fifth Circuit itself, that had considered the question held that a JD is not a final agency action because it does not determine rights or obligations or have legal consequences. Indeed, the reasoning of Sackett as to the second pronghighlights the “determinative distinctions between a JD and an EPA compliance order.” Belle, 761 F.3d at 391. The Fifth Circuit then examined four distinctions it found dispositive, relying in part on its recent decision in Luminant Generation Co. v. EPA, 757 F.3d 439 (5th Cir. 2014) [http://www.ca5.uscourts.gov/opinions%5Cpub%5C12/12-60694-CV0.pdf], in which it distinguished an EPA notice of violation under the Clean Air Act from the compliance order in Sackett, concluding that the former was not final agency action.
First, the compliance order independently imposed obligations, as it ordered the Sacketts to restore their property and provide access to records. The JD, on the other hand, was merely a notification of the property’s classification as wetlands but did not obligate Belle to do or refrain from doing anything on the property. Belle argued that, under state law, the JD required Belle to modify its existing solid waste permit to include information about the status of wetlands on the property and its plans to protect any wetlands that would be impacted due to the landfill’s construction. However, the Fifth Circuit rebuffed that notion, stating that state-agency action “does not transform nonfinal federal-agency action into final action for APA purposes.” Belle, 761 F.3d at 392.
Second, the compliance order imposed, independently, coercive consequences for its violation and exposed the Sacketts to penalties. The JD “erects no penalty scheme,” does not itself impose any penalties, and does not require Belle to comply with it. Id. The possible use of the JD against Belle in future penalty calculations was too “speculative” when compared to the actual accrual of penalties against the Sacketts for failure to restore the property.
Third, the compliance order limited the Sacketts’ ability to obtain a permit from the Corps based on explicit statements in Corps regulations. The JD created no such hindrance for Belle.
Fourth, the compliance order determined that the Sacketts’ property contained wetlands and that they had violated the CWA. The JD, however, does not state that Belle is in violation of the CWA and does not issue an order to comply with the JD or take any steps to alter or restore the property.
After considering the distinctions between Belle’s JD and the Sacketts’ compliance order, the Fifth Circuit found that “under the [Bennett v. Spear] standard and under current doctrine, especially Sackett, the JD is not an action by which rights or obligations have been determined, or from which legal consequences will flow.” Belle, 761 F.3d at 394.
In short, the Fifth Circuit followed its own precedent as to the second Bennett prong. As toSackett, the Fifth Circuit simply found too many distinctions between a JD and a compliance order to determine that Sackett mandated a similar result for Belle. For now, at least, a JD is not a final agency action and thus not subject to judicial review. The Fifth Circuit’s decision in Belle, along with Luminant, indicates that Sackett’s impact is narrower than some may have anticipated, leaving certain would-be petitioners without immediate judicial recourse.[A1]
[A1]This additional sentence is just my attempt to speak to the broader implications of Belle. Please feel free to replace it with different language in view of that goal.