Today, the United States Supreme Court heard oral arguments in Hawkes v. US Army Corps of Engineers, a case involving a jurisdictional determination (“JD”) under the Clean Water Act (“CWA”) Section 404 permitting program. Specifically, the case deals with the question of whether a JD is subject to immediate judicial review, or if landowners must wait until after the issuance of a permit before bringing a challenge.
The 404 permitting process, which applies to the discharge of dredge or fill materials to “waters of the United States,” is commonly lengthy and expensive and landowners cannot legally proceed with projects until the permit is issued. Often the first step in the process is determining whether or not the waters at issue are even subject to the program; i.e., the issuance of a JD by the Army Corps of Engineers (the “Corps”).
The CWA prohibits the discharge of pollutants into waters of the U.S. without a permit. But the question of what exactly constitutes waters of the U.S. has been the subject of much debate and litigation. The question is particularly thorny as it applies to wetlands and other bodies of water that are not navigable in the traditional sense. As a result, previous Supreme Court decisions have developed tests based on the connection of those non-navigable waters to waters that are more clearly subject to jurisdiction, but the decisions have failed to provide a bright-line standard.
In the case currently before the Supreme Court, Hawkes Company, the owner of a peat bog in Minnesota, 120 miles from any navigable waters, intended to use the bog for peat mining activities. The Corps issued a JD finding that the bog was waters of the U.S. and, according to the Complaint, told Hawkes to expect a very lengthy and expensive permit process and that at least one employee should “start looking for another job.”
Hawkes brought an administrative appeal challenging the JD, and a hearing officer found that the JD was not legally sufficient and remanded the issue back to the Corps. On remand, the Corps reviewed the facts again and reissued its determination that the bog was subject to its jurisdiction. Hawkes then challenged the determination in federal court under the Administrative Procedure Act (“APA”), and the district court dismissed the case, finding that the determination was not a final agency action subject to judicial review. Hawkes appealed, and the Eight Circuit Court of Appeals reversed, finding that the determination is subject to review under the APA. The Corps then filed a petition for certiorari, and the US Supreme Court accepted jurisdiction.
During today’s argument, the justices engaged the parties in a lively discussion and appeared to be close to a majority opinion in favor of judicial review. Chief Justice John Roberts and Justice Samuel Alito questioned the government’s position on the binding effect of a JD for purposes of the APA right out of the gate, quoting heavily from a memorandum of agreement between EPA and the Corps. Justice Stephen Breyer seemed almost eager to argue the case in favor of Hawkes. Breyer very eloquently stated how neatly the finality and effect of the JD fit within the Court’s analysis in Abbott Labs, noting that concrete legal consequences flow from the JD, such as halting projects or requiring costly enforcement or permitting, and stating:
So we have harm flowing from a change in legal relations, we have an agency that has nothing left to do on this particular matter, and we have a court that is perfectly suited to review it. I would say it flows from Abbott Labs, almost QED.
Justice Sonia Sotomayor cut right to the chase and asked the Corps what would be the least offensive way the Court could find that the JD is reviewable that the government could live with.
In the same vein, Justice Elena Kagan, who appeared most likely leaning in favor of the Corps, asked both the government and Hawkes how the JD differs from other situations in which administrative agencies provide nonbinding opinions on statutory matters. Justice Ruth Bader Ginsburg probed along similar lines and also pointed out that litigants who receive an unfavorable decision on the issue of a court’s jurisdiction over a case must similarly proceed with litigation before being permitted to proceed with an appeal. Justice Alito came to the defense of judicial review of the JD, however, pointing out that unlike the decisions of an impartial federal judge, the JD is issued by an enforcement agency.
Overall, the justices appeared to be leaning heavily in favor of Hawkes, with Kagan the only likely dissenter, but such a decision is not without its complications. A decision in favor of judicial review would represent a win for NACWA members seeking to complete projects on time and on budget; however, it could also open the door to additional citizen suits as environmental groups seek review of determinations that waters are not subject to protection and permitting requirements under the CWA.
Although it seems unlikely after today’s argument, if the Court is evenly divided on the issue, as it has been on a handful of recent cases argued since Justice Antonin Scalia’s death, the result could be a chaotic patchwork of uncertainty across the country. A circuit split exists on the matter. In July 2014, the Fifth Circuit in Belle Co. v. United States Army Corps of Engineers reached the exact opposite conclusion – the court held that JDs are not final agency action. If the Supreme Court fails to reach a majority decision, Hawkes will be affirmed and the two cases will stand in opposition and apply only in their respective circuits. In the rest of the country, the issue of reviewability will be up for debate.
For more facts and background about Hawkes, members can access a recording of NACWA’s March 16, 2016 Hot Topics in Clean Water Law Web Seminar, which featured a presentation from one of the lawyers representing Hawkes Company. A transcript of today’s oral argument is available here, and an audio recording of the oral argument can also be accessed here.
 The issuance of a new rule defining “waters of the US” postdates the JD in this case.