In a Victory for Businesses and Developers, the United States Supreme Court Holds that Clean Water Act Jurisdictional Determinations Are Appealable

The United States Supreme Court ruled today that an approved jurisdictional determination under the Clean Water Act constitutes an immediately appealable agency action under the Administrative Procedure Act, 5 U.S.C. §§ 500 et seq. This decision, United States Army Corps of Engineers v. Hawkes Co., Inc., rejects the United States Army Corps of Engineers’ (the Corps) position—and overturns adverse precedent in several judicial circuits—that an approved jurisdictional determination is not appealable. This decision benefits businesses and developers by allowing these parties to appeal an approved jurisdictional determination prior to undertaking the costly and time-consuming Clean Water Act permitting process.

As background, the Clean Water Act prohibits the discharge of a pollutant into “waters of the United States” without a permit. A party can request that the Corps determine whether a property contains “waters of the United States” through two types of jurisdictional determinations: a “preliminary jurisdictional determination” or an “approved jurisdictional determination.”  Preliminary jurisdictional determinations merely advise a property owner that there “may” be waters of the United States at a particular property.  By contrast, an approved jurisdictional determination identifies whether a particular property in fact contains or lacks waters of the United States.  An approved jurisdictional determination is binding on the Corps and the United States Environmental Protection Agency (EPA) for up to five years.

In this case, three peat mining companies requested an approved jurisdictional determination of a 530-acre wetland-filled property. Thirteen months later, the Corps issued an approved jurisdictional determination concluding that the property contained waters of the United States because its wetlands had a significant nexus to a river located 120 miles away.

On appeal, the Corps argued that the approved jurisdictional determination was not an appealable action under the Administrative Procedure Act. Specifically, the Corps argued that the jurisdictional determination did not trigger the Administrative Procedure Act because it was not a “final agency action” and there were other “adequate alternatives” for challenging the agency’s jurisdictional determination.

The Supreme Court rejected the Corps’ arguments. First, the Supreme Court observed that the approved jurisdictional determination triggers the Administrative Procedure Act because the determination has “direct and appreciable consequences.”  Specifically, an approved jurisdictional determination will either establish or deny a five-year litigation safe harbor against the Corps and EPA.

Second, the Court concluded that the Corps’ proposed alternatives to judicial review under the Administrative Procedure Act were inadequate given the significant cost and risk imposed upon the property owner. For example, the Corps argued that a party could elect to discharge without a Clean Water Act permit, and in the event EPA commenced an enforcement action, such party could then argue the permit is unnecessary at that time.  The Supreme Court rejected this argument, noting that a property owner should not have to await an enforcement action before challenging a final agency action, particularly given the specter of potential civil penalties under the Clean Water Act of $37,500 per day.

Notably, Justice Kennedy—joined by Justices Thomas and Alito—added in a separate concurring opinion that the Clean Water Act “continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.”  Justices Kagan and Ginsburg also each filed separate concurring opinions debating the relevance to the Court’s analysis of the Corps and EPA’s longstanding memorandum of agreement regarding approved jurisdictional determinations.