In a unanimous decision released today, the Supreme Court found that Jurisdictional Determinations (JDs) made by the Army Corps of Engineers (Corps) under the Clean Water Act constitute "final agency action" and are therefore reviewable in federal court under the Administrative Procedure Act. U.S. Army Corps of Engineers v. Hawkes Co., No. 15-290, slip op. at 7 (U.S. May 31, 2016)

The Clean Water Act regulates discharges of pollutants into "waters of the United States." Id. at 1. What constitutes a water of the United States is, in many cases, difficult to determine. It can require a fact-intensive inquiry as to the nexus between, for example, a wetland, and a nearby river or lake. The Corps, as a result, provides JDs to landowners by request to advise them on whether a particular feature would be regulated under the Clean Water Act as a "water of the United States." Id. at 2-3.

While, the exact scope of the definition of waters of the United States is currently the subject of other legal challenges related to a recent EPA/Corps rulemaking redefining the scope of the term, the decision in Hawkes does not address that issue and instead decides only the status of Corps-issued JDs under the Administrative Procedure Act.

The Corps has long argued that its JDs are issued basically as a courtesy, and that because the Corps is not strictly required to issue them under the Clean Water Act, landowners who are disappointed with the results of a JD should not be allowed to challenge the JD in court. Id. at 10. Similarly, the Corps argued that JDs, while binding on the agency for 5 years, are not reviewable in federal court because they do not constitute "final agency action." As the Corps argued in its Supreme Court reply brief:

Although the Corps' longstanding practice of providing jurisdictional determinations upon request affords significant benefits to landowners, the CWA neither mandates nor explicitly references that practice. If jurisdictional determinations are not subject to immediate review, a landowner may challenge the agency's coverage determination if it is denied a permit, is granted a permit on terms that it finds objectionable, or is subjected to an enforcement action. In enacting the CWA without providing for standalone jurisdictional determinations, Congress evidently contemplated that those avenues of judicial review, taken together, would provide an adequate means of resolving disputes about the scope of CWA coverage.

Reply Brief for Petitioner at 2, United States Army Corps of Engineers v. Hawkes Co., Inc., 578 U.S. __ (2016), 2016 WL 1165964, at *2.

The Court rejected this argument in full, and found that because the JDs represent the consummation of the Corps' decision-making process, and because important legal consequences flow from the JD, that a JD is judicially reviewable under the Administrative Procedure Act. Chief Justice Roberts, writing for the Court, explained the important consequences of JDs as follows:

The definitive nature of approved JDs also gives rise to "direct and appreciable legal consequences," thereby satisfying the second prong of Bennett. Consider the effect of an approved JD stating that a party's property does not contain jurisdictional waters—a "negative" JD, in Corps parlance. As noted, such a JD will generally bind the Corps for five years. Under a longstand­ing memorandum of agreement between the Corps and EPA, it will also be "binding on the Government and represent the Government's position in any subsequent Federal action or litigation concerning that final determination." A negative JD thus binds the two agencies authorized to bring civil enforcement proceedings under the Clean Water Act, creating a five-year safe harbor from such proceedings for a property owner.

* * *

It follows that affirmative JDs have legal consequences as well: They represent the denial of the safe harbor that negative JDs afford. Because "legal consequences . . . flow" from approved JDs, they constitute final agency action.

Hawkes at 6-7 (internal citations omitted). The court also took note of the significant civil and criminal penalties that can result from violations of the Clean Water Act, rebutting the Corps argument that a party dissatisfied with the results of a JD could always proceed with a discharge and challenge the resulting enforcement action in court. Id at 8-9. Similarly, the Court noted the significant costs of going through the Clean Water Act permitting process:

The costs of obtaining such a permit are significant. For a specialized "individ­ual" permit of the sort at issue in this case, for example, one study found that the average applicant "spends 788 days and $271,596 in completing the process," without "counting costs of mitigation or design changes." Even more readily available "general" permits took applicants, on average, 313 days and $28,915 to complete.

Hawkes at 2 (internal citations omitted).

While this decision is a significant win for regulated parties, it is not yet clear how the Corps will respond to the decision. Because the Corps has no statutory obligation to provide JDs, it is conceivable that the JD process will undergo significant changes in light of the Court's decision. Because JDs will now be potentially subject to judicial scrutiny, the Corps may issue them more carefully, or, possibly, may decline to issue them at all.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.