Audit, Compliance and Risk Blog

Supreme Court Decides When Corps of Engineers’ Jurisdictional Determinations are “Final” and Appealable

Posted by Jon Elliott on Tue, Jul 05, 2016

Dredging.jpgSection 404 of the Clean Water Act (CWA) authorizes the U.S. Army Corps of Engineers (Corps) to regulate the “discharge” of “dredged material” or “fill material” into “navigable waters.” Section 404 provision applies if someone wants to dredge a waterway, put fill (or a constructed feature such as a pier or berm) into a waterway, or fill a wetland that occupies a waterway, if that waterway is regulated by CWA as a “water of the United States.” That definition is subject to extreme controversy at the moment – several U.S. Supreme Court decisions struck down a century of agency interpretations, which the Corps and the Environmental Protection Agency (EPA) sought to readjust by changing rules that have now been stayed pending litigation that’s certain to reach the Supreme Court again (I blogged about the rules here).

While this controversy festers, other disputes about Corps and EPA regulatory efforts continue to arise. On May 31 the Supreme Court settled one of these, involving a question of whether someone who disagrees with a “approved jurisdictional determination (JD)” by the Corps can appeal that decision to court. In lawyer parlance, the question is whether or not a JD is a “final agency action.” Lower courts had split, but the Supreme Court decided unanimously that JDs are final. This decision will be important to anyone seeking to dredge or fill in a waterway – including a wetland or other area that might contain “waters of the United States” – and will also have broader implications for decision-makers in other agencies and the people about whose actions they decide.

What’s The Process?

A party who wants to conduct a project in or near a waterway can apply to the Corps for a JD – filing information about the project and its location, and asking the Corps to opine whether waters or wetlands within its jurisdiction will be affected, and if so whether the project would require a 404 permit to proceed. The Corps reviews the applicant’s materials, and gathers enough information and analysis that its staff can complete an “Approved Jurisdictional Determination Form” that requires provides detailed information in the following enumerated Sections:

  • I – Background Information [about the project location, and relevant hydrologic features]

  • II – Summary of Findings

  • III – CWA Analysis

  • IV – Data Sources

I say “opine” because the determination may or may not be enforceable (more on that below). If the JD determines that the location doesn’t require a permit, the Corps binds itself not to (change its mind and) prosecute a violation for at least 5 years. The Corps and EPA have entered a memorandum of understanding (MOU) stating that EPA will not enforce either – although the Supreme Court decision notes that parties disagree whether or not EPA is actually bound by that statement or might conduct enforcement anyway. The Corps expressly retains discretion to change its decision if subsequent information indicates that the site is actually within its jurisdiction.

Once a JD is entered, a party can choose to rely on a negative decision and proceed without a dredge and fill permit in relative safety against enforcement. A party can respond to a positive JD by filing a permit application, either meeting conditions to secure a permit or arguing that the JD was erroneous and seeking a reversal. A party can also choose to ignore a positive JD and proceed anyway, prepared to defend itself against likely Corps prosecution.

Until now, a party could not appeal the JD decision to a court. The Corps’ official view was that JDs were not “final agency actions” since:
  • The determination isn’t a “final” action, because additional information can be submitted to reopen or continue the process.

  • Even if “final”, the decision isn’t appealable because the party still had additional administrative options, i.e., filing for a permit while contesting its applicability, or proceeding without a permit and responding if and when it was prosecuted.

Around the country, multiple parties fought the Corps’ conclusion by applying to federal courts to overturn that conclusion and seek judicial review of the JD as a “final agency action.” The Eighth Circuit Court of Appeals ruled that JDs are appealable final decisions, but the Ninth Circuit Court of Appeals sided with the Corps and rejected judicial appeals.

What Has The Supreme Court Just Determined?

The Hawkes Company mines peat in wetlands in Minnesota, which it sells for installation under golf greens. The Company sought a JD from the local Corps District office, seeking to expand its operations enough to maintain production for another 10-15 years. After 14 months of review, the Corps issued a JD determining that the boglands were sufficiently connected hydrologically to the navigable Red River (120 miles away) that the project would require a permit. Unwilling to give up its plans or seek a permit, Hawkes ignored the Corps’ admonition and sued in federal court to overturn the determination. The District Court sided with the Corps, but on further appeal the Eighth Circuit agreed with Hawkes, and the Corps appealed to the Supreme Court.

The Supreme Court unanimously affirmed the Eighth Circuit opinion and sided with Hawkes. In doing so, the Court applied a two pronged test from decades of precedent about final agency determinations:

  • The decision was “final”, reached as the “consummation” of extensive administrative action, and typically not revisited thereafter.

  • The decision gives rise to “direct and appreciable legal consequences.” The Court cited evidence showing that the average 404 permit process lasts 788 days and costs the applicant over $270,000, so applying for a permit is a major undertaking. Alternatively, enforcement under CWA can subject a defendant to civil penalties up to $37,500 per day per count.

Accordingly, the Court has now allowed Hawkes to pursue their appeal of the JD (that’s right, Hawkes didn’t win, they just get to try to win).

If I’m Not A Peat Miner Or A Golfer, Why Should I Care?

Many federal agency have procedures in place to collect and analyze evidence, to provide members of the public with guidance that falls short of a formal permit or other permission. For example, the Federal Trade Commission (FTC) offers opinions about whether particular advertising is misleading (I blogged about FTC’s “Green Guides” for environmental advertising here). As another example, the Securities and Exchange Commission (SEC) staff issue No-Action Letters advising public companies whether particular actions might run afoul of the Securities Acts (I blogged about shareholder efforts to include climate change questions in oil company annual meeting proxies here). It’s potentially important to many people in many situations to know not just how to secure less-than-fully-formal agency guidance, but what to do if they disagree with such guidance. Recourse to courts has just gotten easier.

Self-Assessment Checklist

Is my organization undertaking a construction or other project that disturbs a waterway, or disturbs soil or rock that might contaminate runoff into a waterway?

Has my organization evaluated the receiving waters to determine whether they qualify as “waters of the United States” subject to CWA requirements?

  • Under existing regulations and permits?

  • Under the definitions included in the May 2015 regulation?

Has my organization sought a Jurisdictional Determination from the Corps?

Has the organization sought an received informal guidance from a federal agency about the regulatory status of an existing or planned activity, and disagrees with the agency's guidance?

Where Can I Go For More Information?

Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:


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About the Author

http://www.stpub.com/environmental-compliance-a-simplified-national-guide-onlineJon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. He was involved in developing 12 existing products, including Environmental Compliance: A Simplified National Guide and The Complete Guide to Environmental Law.

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at: tei@ix.netcom.com.



photo credit: Dredging the Baltimore Harbor 2016 via photopin (license)

Tags: EPA, Environmental, Environmental risks, Hazcom, effluent