High court ruling for landowners a ‘double-edged sword’

By Tiffany Stecker | 11/01/2016 01:15 PM EDT

The Supreme Court’s unanimous decision this spring that landowners could sue the government over disputes on federally protected waters was hailed as a victory for property owners and developers.

The Army Corps of Engineers has issued guidance in light of May's <em>Army Corps v. Hawkes Co. Inc.</em> decision.

The Army Corps of Engineers has issued guidance in light of May's Army Corps v. Hawkes Co. Inc. decision. Photo courtesy of Pacific Legal Foundation.

The Supreme Court’s unanimous decision this spring that landowners could sue the government over disputes on federally protected waters was hailed as a victory for property owners and developers.

But, legal experts say, that win could make the permitting process harder for developers.

The 8-0 ruling in Army Corps of Engineers v. Hawkes Co. Inc. gives landowners legal recourse to challenge "approved" jurisdictional determinations, which are formal decisions on whether jurisdictional wetlands are present on a tract of land (Greenwire, May 31).


The Supreme Court found that the Army Corps’ approved jurisdictional determinations are "final agency actions" and subject to legal review if a landowner disagrees with them.

But some legal experts believe the decision could discourage the Army Corps — the agency responsible for making the determinations — from issuing such decisions, a move that could delay big projects and rack up costs.

"I think it’s a double-edged sword, that decision," said Josh Bloom, an environmental attorney with Meyers Nave in Oakland, Calif. "I think it’s a little bit of ‘be careful what you wish for.’"

Previously, approved jurisdictional determinations were only appealable through the corps’ administrative process. Jurisdictional determinations are needed to establish whether a project needs Clean Water Act and Rivers and Harbors Act permits to go forward.

Approved jurisdictional determinations are legally binding. "Preliminary" determinations are not.

"On the one hand, when the regulated community started reading the opinion, they were happy," said Andrew Stewart, an attorney with Vinson & Elkins. "On the other hand, when they went through the repercussions of the opinion and the potential to strongly incentivize preliminary [jurisdictional determinations], they weren’t as happy with the outcome."

Pacific Legal Foundation attorney Reed Hopper, who argued on behalf of the Minnesota peat mining company Hawkes Co. Inc. at the Supreme Court, disagrees that the high court decision discourages Army Corps regulators from issuing approved jurisdictional determinations.

The vast majority of these determinations are done quickly and without controversy. There’s no incentive for the agency to drag its feet, said Hopper.

"If they did so, it would be counterproductive for them," he said. The corps "wants to be able to assert jurisdiction."

In most cases, a developer will accept a preliminary determination of jurisdictional waters, which is advisory in nature and only discloses whether jurisdictional waters may be on the property. The developers will then proceed with permitting on the assumption that waters are present or not present.

But for large, complicated projects planned near wetlands, approved jurisdictional determinations are necessary. Approved determinations offer a five-year "safe harbor" of guaranteed certainty that can shield landowners from potential Clean Water Act violations.

The Army Corps argued in court briefs that a decision in favor of the peat mining company could skew the corps toward issuing preliminary determinations over approved ones.

Regulatory guidance

In an effort to help regulators complete the determinations post-Hawkes, the corps has released a regulatory guidance letter, or RGL (pronounced "regal"), to offer advice for completing the determinations.

"They’re moving ahead knowing that they may end up in court defending it, and they want to do it well," said Jeanne Christie, executive director for the Association of State Wetland Managers.

RGLs are issued as a result of evolving policy, judicial decisions and changes to regulations that affect the corps’ permiting program, said Army Corps spokesman Doug Garman.

The RGL signed yesterday explains the differences between preliminary and approved determinations and gives information on when it may be appropriate to issue an approved one over a preliminary or when it may be appropriate to not prepare any jurisdictional determination whatsoever.

The guidance is the first RGL of the Obama administration. Even before its release, the RGL had already stirred up some concern.

Senate Environment and Public Works Chairman Jim Inhofe (R-Okla.) sent a letter last week to Chief of Engineers Lt. Gen. Todd Semonite, asking the corps to meet the committee before releasing any guidance (E&ENews PM, Oct. 26).

Inhofe said he is worried that the upcoming RGL could repeal or change key parts of two George W. Bush-era guidance letters. The 2007 RGL from the corps established that only approved determinations could be appealed.

One year later, the corps issued another RGL that provided a definition for approved determinations and described when approval is necessary. It also clarified that preliminary determinations are nonbinding, allowing property owners and developers to voluntarily waive jurisdiction questions in order to expedite permitting.

Central to the Supreme Court’s Hawkes decision is the memorandum of agreement between the Army Corps and EPA, which protected landowners from potential Clean Water Act violations for five years if the agencies found no jurisdictional waters.

The choice of a RGL is likely a deliberate move from the Army Corps, said Stewart of Vinson & Elkins. Unlike with other types of guidance, like a memorandum of agreement, the corps won’t need to collaborate with U.S. EPA to the same degree to develop a RGL. A RGL from a single agency could avoid the complications of an MOA, said Stewart.

"I can understand the strategic appeal" of a RGL, he said.

It’s not a coincidence that this is the first RGL in eight years, Stewart added. The Obama administration’s development of the Clean Water Rule, which clarifies which wetlands, streams and water bodies are protected under the Clean Water Act, has taken up a lot of the administration’s attention and resources. Finalized last year, the contentious rule is on hold and being litigated in the 6th U.S. Circuit Court of Appeals.

The Clean Water Rule, also known as the Waters of the U.S. rule, or WOTUS, was written to clarify two muddled Supreme Court rulings in 2001 and 2006. In the latter decision, the 4-1-4 ruling in Rapanos v. United States, Justice Anthony Kennedy wrote in his stand-alone opinion that streams and wetlands must have a "significant nexus" to navigable waters to be protected under the Clean Water Act.

Today, regulators look at wetlands to decide whether they pass the significant nexus test before making a jurisdictional determination, often a confusing and laborious process.

Overall, assessing jurisdictional determinations has become increasingly complicated, said Jan Goldman-Carter, director of the National Wildlife Federation’s wetlands program. Between the Rapanos guidance, a regulation in limbo and now the Hawkes decision, a RGL from the corps may be welcomed.

"Right now, it seems to me there are a lot of layers and a lack of clarity for an agency person in the field making a determination," she said.