If only Vegas betting were this easy.
A few months ago, we (and most everyone else not working at the Justice Department) predicted that the Supreme Court would rule that property owners seeking to develop potential federal wetlands on their property may immediately challenge in federal court approved jurisdictional determinations (“JD”) by the U.S. Army Corps of Engineers. The government had countered that JDs are not final agency actions. Instead, recipients must either await denial of a Clean Water Act Section 404 wetlands permit after a lengthy and expensive administrative process, or proceed to fill wetlands at their own risk. The federal appellate courts had split on this issue.
Based on the oral argument and recent Supreme Court rulings, the outcome was never in doubt. On May 31, the Court unanimously ruled 8-0 against the Corps in Hawkes Co., Inc. v. U.S. Army Corps of Engineers. The late Justice Scalia surely would have made it 9-0, based on his 2012 authored unanimous opinion in Sackett that Clean Water Act administrative compliance orders are immediately appealable. The Court applied its 20-year-old test for finality and, lest there be any doubt in that application, further endorsed its overarching “pragmatic” approach to finality.
What can we take away from this relatively predictable and straightforward Hawkes decision?
First and foremost, from now on property owners and developers need not repeat the Section 404 permitting saga experienced by the family-owned peat mining business in Hawkes. As evidenced at oral argument, most JDs are uncontested. But now a recipient of an adverse and unsupported JD has an immediate avenue to seek what the Court labeled as “safe harbor” from Section 404. This in turn should dissuade tactics by the Corps or EPA at the outset of the permitting process to deter development.
This new early resolution tool is particularly noteworthy given the unsettled scope of Section 404 jurisdiction given the Corps’ and EPA’s final rule redefining “waters of the United States,” which is currently in litigation and stayed nationwide. The Hawkes opinion dropped a footnote to that case, indicating the Supreme Court’s full awareness of that hotly contested issue that ultimately will find its way to the Court as well.
It is unclear how exactly the Corps will react. Given that JDs are not required by the CWA, the Corps had insinuated that it might take its ball and go home, by curbing its use of JDs prior to permitting or enforcement decisions. There also was disagreement among the parties and the Justices regarding the importance of a longstanding Memorandum of Agreement between the Corps and EPA regarding the finality of JDs. Though rescission of the JD process or the 1989 MOA is each highly unlikely, the majority opinion appears to deter such steps expressly and by highlighting the futility of restricting judicial review to a final permit or enforcement action.
While the Hawkes decision settles the issue for “approved” JDs, it remains unclear whether “preliminary” JDs are similarly reviewable by courts. Based on Hawkes’ language, however, there is a good chance that the Court would rule in the negative on that question.
In any event, we surely have not heard the last from the Supreme Court on the jurisdictional scope of the Clean Water Act. Justice Kennedy filed a curious three-paragraph concurrence bemoaning the current state of Clean Water Act practice: “based on the Government’s representations in this case, the reach and systemic consequences of the Clean Water Act remain a cause for concern. As Justice Alito has noted in an earlier case, the Act’s reach is ‘notoriously unclear’ and the consequences to landowners even for inadvertent violations can be crushing.” Justice Kennedy of course contributed to this current situation through his concurring opinion in Rapanos in 2006, which the government in turn purported to rely upon for its “waters of the U.S. rule” currently in litigation. After another decade of no Congressional intervention, and with little indication that the agencies will adopt less aggressive implementation, Hawkes is likely to just be the next in a continuing long line of seminal Supreme Court Clean Water Act cases.