Under the Clean Water Act (CWA), you cannot impact a federally protected stream or wetland unless you obtain a 404 permit from the Army Corps of Engineers (ACOE). The key issue- what is a "federally protected stream or wetland?"
As discussed previously on this blog, which streams and wetlands are protected under the CWA has been in a state of flux ever since the Supreme Court issued its decisions in Rapanos and SWANCC. Whether a wetland or stream are protected by the CWA depends on the legal standard known as the "Significant Nexus Test."
Under the test, a waterway is evaluated to determine whether impacts to it could affect the chemical, physical, and the biological integrity of a navigable water. If the answer is "yes," then the waterway falls under the federal jurisdiction pursuant to CWA.
Making the determination is not a simple exercise. It involves a complex evaluation of various factors. Two experts could come to two different conclusions regarding whether a waterway falls under federal jurisdiction.
Due to the grey area surrounding this regulatory area, many businesses and developers want a preliminary determination as to whether proposed wetland or stream impacts would require a Section 404 permit.
Under applicable regulations, the ACOE can consult with potential permit applicants prior to processing the permit application. See, 33 CFR 325.1(b). The regulations also authorize the ACOE to "issue formal determinations concerning the applicability of the Clean Water Act…" See, 33 CFR 320.1(a)(6). These "formal determinations" are called "Jurisdictional Determinations" or "JDs."
The ACOE currently uses a form to make its Jurisdictional Determinations.
What if you disagree with the ACOE’s JD?
Due to the complexities involved in determining whether a stream or wetland is federally protected, developers and businesses will seek a JD to determine whether regulators consider the waterway protected by the CWA. However, what happens if you want to challenge the regulators determination that the waterway meets the Significant Nexus test?
The first step in the process is the ACOE’s administrative appeal process. See, 33 CFR 331. However, if you obtain an unfavorable result through the administrative appeal process, it appears you have little recourse in the courts to challenge the JD.
Courts have consistently ruled that JDs are not agency final actions that can be legally challenged. Many had hoped that U.S. Supreme Court ruling in Sackett may have opened up JDs to legal challenge.
In Sackett, a homeowner filled wetlands to build a residence. U.S. EPA issued a compliance order that contained a finding that the property contained federally protected wetlands. The order required the homeowner to restore the property or face penalties for noncompliance.
EPA argued that the homeowner could not challenge the administrative order because it did not constitute a final agency action. The Supreme Court disagreed, and ruled the order was a final action and could be challenged.
JDs and Sackett
After Sackett, new legal actions were brought in attempt to challenge JDs as final agency actions. However, based upon a recent case, it appears Sackett did not change the outcome. In Belle v. United State Army Corps of Engineers, Case No. 13-30262, the Court distinguished the enforcement order at issue in Sackett versus a JD.
The Court held a JD is not a final action for the following reasons:
- A JD is a notification that the property contains federally protects wetlands or streams, but it does not prevent the property owner from doing anything to its property. The order in Sackett required restoration of the property;
- The administrative order in Sackett imposed coercive consequences for its violation (i.e. penalties for noncompliance). A JD does not impose any penalties;
- The compliance order made it more difficult for a homeowner to obtain a 404 permit because there is a policy against after-the-fact permits. The Court held that the "JD operates oppositely informing the [property owner] of the necessity of a 404 permit to avoid an enforcement action."
While the Court’s analysis of the difference between the Sackett administrative enforcement order and a JD is logical, the practical reality is that JDs do have dramatic impacts on the property owner.
The Court suggests that the ability to challenge the JD would "disrupt the regulatory review system already in place." Namely, the property owner should file for a 404 permit and if denied, it will have legal recourse post-denial.
However, the Court’s analysis ignores the fact that a JD places the property owner into the regulatory system. Once in the regulatory system, negative consequences result. For example:
- The owner must spend significant amounts of money on a 404 permit application;
- The owner must wait for the ACOE to rule on the 404 permit application, which could takes months if not a year or more to obtain a determination;
- After exhausting administrative appeal rights and filing a judicial action, it may be years before the owner can get a court to review whether the JD in the 404 permit decision was correct;
- The owner’s development plans are put on hold while the permitting and legal process unfolds;
- Or, the owner can proceed with the impacts and face a potential enforcement action that includes penalties and the possibility they will never obtain an after-the-fact permit.
The consequences outlined above seem more than significant enough, from a policy perspective, to allow challenges to JDs. Unfortunately, the Courts don’t see it that way.