SCOTUS Levels the Playing Field

The Supreme Court’s decision in Corps of Engineers v. Hawkes provides a welcome and much-needed avenue for review of approved jurisdictional determinations (JD) issued by the Corps of Engineers. Hopefully, the decision will inhibit the Corps from unfounded or tenuous assertions of jurisdiction over wetlands and other waters of the United States.

An approved JD is the Corps’ determination regarding the presence or absence of ‘waters of the United States,’ such as wetlands, on a parcel of land. These JDs are extremely important to landowners and developers as a permit is required from the Corps to place dredged or fill material into a water of the United States.

Prior to the Supreme Court’s ruling, the recipient of an approved JD had three unattractive options to seek review to a forum or venue other than the Corps’ district issuing the JD. First, they could seek an administrative appeal. However, the appeal is to the Corps’ division in which the district is located and the division would merely remand the JD back to the district to correct any perceived errors in the JD. Second, the recipient could begin work or development in the wetlands and subject themselves to possible civil and criminal enforcement proceedings during which the underlying JD could be contested. Finally, the recipient could go through the permit process and appeal a final permit. However, the opinion itself notes that obtaining a ‘Section 404’ permit from the Corps is costly (running from $28,915 to $271,596) and time-consuming (313 days to 788 days).

Hawkes provides an alternative to these options. Now, the recipient of an approved JD may seek judicial review of the JD in a federal district court under the Administrative Procedure Act (APA). The Supreme Court’s reasoning is very straightforward. Under the court’s precedent, an agency decision is a ‘final agency action’ and thus subject to judicial review when it marks the consummation of the decision making process and from which rights and obligations have been determined or from which legal consequences flow.

An approved JD marks the consummation of the decision making process as the Corps has “ruled definitively” that the parcel contains jurisdictional waters. Indeed, the Corps’ own regulations state that an approved JD is a final action which remains valid for five years. Additionally, the JD is issued only after “extensive factfinding by the Corps regarding the physical and hydrological characteristics of the property.”

An approved JD also gives rise to “direct and appreciable legal consequences.” The court noted that a ‘negative JD’ (i.e., one that property does not contain jurisdictional waters) creates a five-year ‘safe harbor’ from enforcement actions by the EPA and the Corps under the Memorandum of Agreement between the two agencies. On the other hand, a positive JD, (i.e., one that states that the property does contain jurisdictional waters) represents a “denial of [that] safe harbor” and is therefore a legal consequence.

The Supreme Court’s decision follows a similar decision relating to compliance orders issued by EPA. In its Sackett decision, the court ruled that such an order was a ‘final agency action’ and subject to judicial review under the APA. The Sackett decision prompted EPA to include language in a variety of orders notifying the recipient that judicial review was available. Presumably, similar language will now be placed in an approved JD.

The Hawkes decision provides some relief to recipients of positive JDs. In issuing JDs, the Corps routinely asserted jurisdictional over isolated wetlands, using the most spurious of facts. For example, in one case in Louisiana, the Corps claimed that a very small patch of wetlands had a significant nexus on a traditional navigable waterway 23 miles downstream. The Corps found that the wetlands had a significant impact on the physical, biological, and chemical integrity of the downstream water. In Hawkes itself, the Corps found that the wetlands at issue had a significant nexus with a traditional navigable waterway 120 miles away. These types of aberrant decisions can now be contested in an impartial federal district court.

However, the relief afforded to potential litigants is merely the opportunity for an impartial review. The odds remain stacked in favor of the Corps. First, under the APA, the reviewing court is generally limited to the administrative record. As a result, it is critically important to have all of the facts and expert opinions submitted to the Corps prior to the time the approved JD is issued. Second, the courts generally afford a great deal of deference to the technical and scientific decisions of an agency that has the presumed expertise to make such decisions. Third, the new definition of ‘waters’ of the United States (which is currently stayed by the U.S. Sixth Circuit) expands the definition to include waters and isolated wetlands which are not now included. If it goes into effect, many of the legal and factual arguments against jurisdiction will be mooted.

Nevertheless, the ability to seek judicial review of an approved JD levels the playing field for recipients. The Corps had the power and authority to make virtually unfettered decisions affecting private property. While they can still make those decisions, at least now there is a direct pathway to challenge them.

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