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In United States Army Corps of Engineers v. Hawkes, 578 U.S. __ (2016), the U.S. Supreme Court affirmed the Eighth Circuit and held that an approved jurisdictional determination (“JD”) issued under the federal Clean Water Act (“Act”) by the U.S. Army Corps of Engineers’ (“Corps”) is a final agency action that can be challenged in federal court. The Act’s Section 404 prohibits the discharge of dredged or fill material into jurisdictional “waters of the United States” without a Section 404 permit from the Corps. A JD provides property owners with the Corps’ determination as to whether a property contains a water of the U.S. Note, the ruling applies only to “approved” JDs and not “preliminary” JDs, which simply advise a property owner that there may be waters of the U.S. on the property.

In December 2010, Hawkes and two other companies (“Respondents”) applied to the Corps for a Section 404 permit to mine peat on their 530-acre parcel in Marshall County, Minnesota. Peat, an organic material that forms in wetlands and bogs, is used for soil improvement, fuel, and to provide structural support and moisture for golf greens.

In February 2012, the Corps issued an approved JD stating that the property contained a water of the U.S. because its wetlands had a significant nexus to the Red River of the North, located approximately 120 miles away. Respondents appealed the JD to the Corps’ Mississippi Valley Division Commander, but the Corps merely reaffirmed its original conclusion. Respondents then sought judicial review of the JD under the Administrative Procedure Act (“APA”) as a final agency action.

The Court held that the JD constituted a reviewable “final agency action” because (1) the JD marked the consummation of the agency’s decisionmaking process and (2) the JD also gave rise to direct and appreciable legal consequences: It deprived Respondents of a five-year safe harbor from enforcement proceedings by the Corps and EPA under the Act, which would have been provided by a determination that the parcel did not contain a water of the U.S. The Court further held that the JD was reviewable under the APA because Respondents had no adequate alternatives to judicial review. Finally, the Court rejected the Corps’ argument that approved JDs should not be subject to judicial review because the determinations are not required by the Act but are voluntarily made by the Corps.

While the notably brief opinion was unanimous, Justice Kennedy filed a concurring opinion, in which Justices Thomas and Alito joined, which noted that the Act continued to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property. Justices Ginsburg and Kagan also wrote separate concurring opinions.

Key Point:

The ruling is positive news for property owners as they can now challenge “approved” jurisdictional determinations without having to wait for their day in court until an enforcement proceeding occurs or the “arduous, expensive and long” permitting process ends. This should be particularly reassuring given the complex nature of these determinations. After Rapanos v. United States (2006) 547 U.S. 715, the Corps and EPA attempted to clarify the test for determining Waters of the U.S. in a controversial final rule that has been challenged by multiple states. However, because approving JDs is not required by statute, the benefits of this ruling may be limited if, in order to avoid litigation, the Corps stops issuing approved JDs as part of the Section 404 permitting process.

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