The U.S. Supreme Court decided last week to review a ruling from the U.S. Court of Appeals for the Eighth Circuit that jurisdictional determinations under the Clean Water Act are final agency actions subject to judicial review. See Hawkes Co., Inc. v. U.S. Army Corps of Engineers, 782 F.3d 994 (8th Cir. 2015) (Supreme Court No. 15-290). The Eighth Circuit’s ruling directly conflicts with a prior ruling by the U.S. Court of Appeals for the Fifth Circuit in Belle Co., LLC v. Army Corps of Engineers, 761 F.3d 383 (5th Cir. 2014), which held that Clean Water Act jurisdictional determinations are not subject to judicial review. The Supreme Court’s resolution of this issue will have important implications for landowners, developers and regulators.
Jurisdictional Determinations under the Clean Water Act
A “jurisdictional determination” is an official determination by the U.S. Army Corps of Engineers that waters regulated under the Clean Water Act are either present or not present on a particular site. If the Corps determines that jurisdictional waters are present, filling those waters—for example, as part of a development project—requires a permit from the Corps. The Corps issues tens of thousands of jurisdictional determinations every year.
Eight Circuit’s Decision in Hawkes
The Hawkes Company sought to mine peat moss on its property in Minnesota, but the Corps of Engineers issued a jurisdictional determination that the property contained wetlands that qualified as “waters of the United States” under the Clean Water Act. Based on this jurisdictional determination, the company was required to obtain a permit from the Corps before commencing any mining in the wetlands on its property. After an unsuccessful administrative appeal, the company sought judicial review of the Corps’ jurisdictional determination.
The district court held the jurisdictional determination was not a final agency action and therefore could not be challenged in court. The district court reasoned that a jurisdictional determination, in and of itself, does not fix any legal rights or obligations. Under this line of reasoning, a jurisdictional determination is not reviewable by the courts until either the Corps denies a Clean Water Act permit application or the Corps (or the Environmental Protection Agency) issues a compliance order or brings an enforcement action against the property owner for violating the Clean Water Act.
In reversing the district court, the Eight Circuit in Hawkes soundly rejected this line of argument. The court observed that it would be prohibitively costly, and potentially futile, for property owners to pursue contentious permit applications that likely would be denied before seeking judicial review of the Corps’ assertion of federal jurisdiction. Further, according to the court, the other option available to seek judicial review—commencing fill activities without a permit and then await an enforcement action—“is even more plainly an inadequate remedy.” The court reasoned that the property owners cannot initiate the enforcement process and “each day they wait for the agency to drop the hammer, they accrue huge additional potential liability.” The Eighth Circuit therefore concluded that a jurisdictional determination is immediately appealable in the courts.
Implications of U.S. Supreme Court Review
The Supreme Court is now set to resolve the split among the circuit courts on this important issue. If the Court holds that jurisdictional determinations are reviewable by the courts, landowners and regulators may receive definitive answers as to whether a particular property is subject to federal jurisdiction without having to undergo the timely and costly permitting or enforcement process. However, if the Court decides that jurisdictional determinations are subject to review in court, the Corps may curtail its issuance of these determinations, which could add a layer of uncertainty in the Clean Water Act permitting process for landowners and developers.
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