In a very significant case for property owners and developers, the U.S. Supreme Court issued its decision today that Army Corps Jurisdictional Determinations (JDs) are final agency actions which can be challenged in Court. In U.S. Army Corps of Engineers v. Hawkes, the Court determined that JDs meet the test for final agency actions:
- A JD marks the consummation of the Agency’s decision making process; and
- JDs determine rights or obligations from which legal consequences flow
Federal Jurisdiction under the Clean Water Act
It has been well documented on this blog that whether a stream or wetland falls under the jurisdiction of the Clean Water Act (i.e. federally regulated) has been a complex issue. There have been numerous challenges to the Army’s Corps of Engineer’s (ACOE) jurisdiction under the Clean Water Act.
In a prior decision, the Supreme Court in Rapanos created the "Significant Nexus Test" as the means to determine jurisdiction. The test involves balancing various factors as to how closely related small water bodies are to larger water bodies. Under the test, a waterway or wetland is evaluated to determine whether it impacts the "chemical, physical, and the biological integrity" of a navigable water. If it does impact a navigable water in that manner, then it falls under federal jurisdiction.
The Army Corps has been aggressive in asserting jurisdiction under the Significant Nexus Test. The Clean Water Rule, currently under appeal before the Sixth Circuit, was the EPA’s attempt to define jurisdiction in conformance with prior Supreme Court guidance. The Rule has been challenged as going well beyond the Supreme Court’s guidelines for federal jurisdiction under the Clean Water Act.
Jurisdictional Determinations (JDs)
A Jurisdictional Determination (JD) is issued by the ACOE as its determination whether particular property contains federally protected wetlands or streams. The JD is the ACOE application of the Significant Nexus Test to the property. Due to the ACOE aggressiveness in asserting jurisdiction, many property owners and developers have wanted to challenge JDs.
However, a complicating issue for property owners and developers is that the ACOE had maintained that JDs were not final appealable actions that could be challenged in Court. This left the property owners and developers with a "Hobson choice:"
- Administratively appeal the JD which means the ACOE makes the decision as to whether the JD is valid;
- Assert the ACOE is without jurisdiction, proceed with the development and risk enforcement with criminal sanctions or civil penalties; or
- Comply by submitting a costly permit application (404 permit)
None of these choices were deemed attractive. With the Court’s decision in Hawkes, Courts can now hear challenges to JDs.
Due to the subjective nature of the Significant Nexus Test, property owners and developers should be entitled challenge ACOE determinations in court. Today’s decision will likely result in a flood of challenges to JDs in federal courts.