Supreme Court wades into major permitting squabble

By Robin Bravender, Jeremy P. Jacobs | 12/11/2015 03:54 PM EST

The Supreme Court agreed today to consider whether a federal finding that a wetland qualifies for Clean Water Act protections may be challenged in court. In a customary short order, the justices agreed to hear U.S. Army Corps of Engineers v. Hawkes Co. Inc., setting the stage for what many see as the term’s highest-profile environmental case.

The Supreme Court agreed today to consider whether a federal determination that a wetland qualifies for Clean Water Act protection can be subject to a court challenge.

The justices will hear U.S. Army Corps of Engineers v. Hawkes Co. Inc., setting the stage for what many see as the term’s highest-profile environmental case.

The Obama administration and property rights advocates had asked the Supreme Court to review whether Army Corps and U.S. EPA Clean Water Act jurisdictional determinations are subject to judicial review.


M. Reed Hopper of the Sacramento-based Pacific Legal Foundation, which represents property owners in the case, said the issue "affects millions of people" who could decide to seek determinations from the Army Corps.

"If the Supreme Court does not authorize judicial review of jurisdictional determinations," he said, "it literally will leave millions of landowners without a defense of erroneous application of the law under the Clean Water Act."

The corps issues tens of thousands of jurisdictional determinations to landowners each year, the administration said. Those determinations represent regulators’ views about whether planned development would require permits under the Clean Water Act.

Property rights advocates contend landowners should be able to challenge those determinations in court if they disagree with the corps’ jurisdiction calls. If they can’t sue, they argue, landowners may be forced to undergo a costly permitting process, risk fines by proceeding without a permit or abandon their development plans.

The government argues that jurisdictional determinations aren’t final agency decisions and therefore shouldn’t be subject to review in court. Solicitor General Donald Verrilli told the high court that landowners who don’t obtain such determinations face "precisely the same set of options, and precisely the same exposure to penalties," under the Clean Water Act as landowners who do obtain them.

"Receipt of a jurisdictional determination simply provides the landowner with additional information that may assist him in choosing among the available options," Verrilli said in court documents.

The Supreme Court’s decision will have broad implications.

Patrick Parenteau, a Vermont Law School professor and former EPA regional counsel, said the decision could have a bearing on whether the corps continues to issue jurisdictional determinations.

"The corps doesn’t have the staff to be doing these things and then defending it in court," Parenteau said. The corps is authorized but not required to issue the determinations to landowners.

If the high court allows those determinations to be challenged in court, "that’s opening a door to a lot of potential federal actions that have heretofore not been subject to review," Parenteau added. "The environmental community could very well end up cheering this result because it’s going to open up to challenge" many more agency actions, he said. "Final agency action has been a big barrier to environmental lawsuits. … It cuts both ways."

The Obama administration asked the Supreme Court to consider the Hawkes case. The high court took no action on another appeal raising the same issue, Kent Recycling Services LLC v. U.S. Army Corps of Engineers.

Hawkes, Kent Recycling circuit split

Hawkes involves Minnesota property owner Hawkes Co. Inc., which wanted to mine peat moss from wetlands for use in landscaping. The corps issued a jurisdictional determination finding that the property contained areas subject to Clean Water Act permitting rules, and the company sought to challenge the determination in court.

The St. Louis-based 8th U.S. Circuit Court of Appeals found that the corps’ 2012 determination did represent a "final agency action" that could be challenged under the Administrative Procedure Act (Greenwire, April 15).

The 8th Circuit’s decision created a conflict with the New Orleans-based 5th U.S. Circuit Court of Appeals. That court ruled unanimously last year that a jurisdictional determination did not constitute a final agency action that could be challenged under the Administrative Procedure Act.

That case concerns Kent Recycling LLC, which had an option to buy property in southern Louisiana if it could build a landfill there. The Army Corps said in 2011 that the parcel qualifies as a wetland and that the company would need to obtain a Clean Water Act permit.

Kent Recycling challenged that determination in court, but the New Orleans appeals court sided with the government last July (Greenwire, July 31, 2014).

The Supreme Court in March declined to take Kent Recycling’s original appeal, but the company’s lawyers urged the high court to take another look at the case in light of the 8th Circuit’s Hawkes decision.

Challengers in both the Hawkes and Kent Recycling cases are represented by the Pacific Legal Foundation.

PLF attorneys urged the high court to consolidate the two cases for review, while the Obama administration urged the justices to keep the Kent Recycling case on hold while it considered the Hawkes case (E&ENews PM, Nov. 12).

The jurisdictional determination issue bears similarities to a previous Clean Water Act case that the Supreme Court reviewed in 2012, Sackett v. EPA. In that case, the court ruled unanimously that EPA compliance orders, which prevented an Idaho family from developing its property, could be challenged in court. The Sacketts were also represented by PLF (Greenwire, March 21, 2012).

Verrilli told the high court this year that jurisdictional determinations are significantly different than those compliance orders and aren’t final agency actions because they don’t create the same legal and financial constraints on the landowners (Greenwire, Sept. 9).

The Supreme Court will hear arguments in Hawkes next year and will decide the case by the end of June.