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Environmental Blog

  • 09
  • January
  • 2015

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The Supreme Court Could Revisit its Landmark Clean Water Act Decision, Sackett v. EPA, in 2015

In March 2014, we reported on lawsuits filed in two federal courts of appeals testing the reach of the Supreme Court’s 2012 decision in Sackett v. EPA, which recognized the right of landowners to obtain judicial review of EPA compliance orders issued under the Clean Water Act (CWA). The primary issue presented in these cases is whether the recipient of a jurisdictional determination (JD) issued by the U.S. Army Corps of Engineers (the Corps) may immediately challenge the JD in federal court or must wait for the Corps to take “final action” as defined by the Administrative Procedure Act (APA)—either by issuing a discharge permit or bringing an enforcement action against the owner—before filing suit.

On July 30, 2014, the Fifth Circuit handed down Belle Company, LLC v. U.S. Army Corps of Engineers, holding that a JD is not a final agency action reviewable in federal court. In its decision, the court gave several reasons why a JD lacks the same “hallmarks of finality” as the compliance order in Sackett. First, a JD only provides notice to the landowner that a permit is necessary before a discharge of dredged or fill materials may occur. By contrast, a compliance order declares that the owner is already in violation of the CWA. The court said that JDs do not affect an owner’s future right to seek and obtain a permit, whereas a compliance order raises a heavy presumption against issuing a permit. In addition, a JD does not force the owner to take additional action, unlike an administrative order that requires an owner to restore the property or pay significant fines if it decides not to comply.

The Fifth Circuit also drew support for Belle from its July 2014 decision, Luminant Generation Co. LLC v. EPA, in which several power plants contended that Clean Air Act notices of violations (NOVs) were final actions subject to judicial review. The Fifth Circuit found that “a notice of violation does not have the finality of the order in Sackett. Issuing a notice of violation does not create any legal obligation, alter any rights, or result in any legal consequences and does not mark the end of the EPA’s decision-making process.” The court further opined that judicial review of NOVs would reduce operators’ incentives to take corrective action and could also make EPA more reluctant to issue NOVs. The Fifth Circuit’s opinion in Belle echoed those concerns when it suggested that judicial review of JDs would frustrate the Corps’ enforcement efforts and unsettle the current system of owners’ rights and obligations under the CWA. Together, Belle and Luminant suggested that other courts might construe Sackett narrowly and only review agency actions accompanied by injunctive relief or monetary fines.

The Eighth Circuit, however, may reach a different conclusion. In December 2014, the Eighth Circuit heard oral arguments in Hawkes Co. v. Corps of Engineers. In this case, plaintiffs are protesting that the Corps issued a JD without providing evidence sufficient to show the presence of jurisdictional wetlands. On administrative appeal, the hearing officer agreed with Hawkes that the agency needed to support the JD with site-specific data, but the Corps reissued the JD in final form without providing additional evidence. During oral arguments, the three-judge panel seemed sympathetic toward the plaintiff’s argument that JDs force owners into a Hobson’s choice between undertaking the lengthy and expensive permitting process or risking criminal penalties if they disagree with the Corps and proceed with development. One judge went so far as to call the Corps’ claim that JDs should be exempt from judicial review a form of “government by regulatory tyranny,” leading some observers to opine that the court will rule against the Corps.

Belle is now on petition for certiorari to the Supreme Court (restyled as Kent Recycling Services v. U.S. Army Corps of Engineers). The deadline for the Corps’ response is January 30, which means that the Justices will consider the Kent petition at their March 6 conference at the earliest. Should the Eighth Circuit rule against the Corps, the split between the circuits would greatly increase the odds that the Supreme Court will revisit issues left open by Sackett and perhaps provide lower courts with much-needed guidance in applying its holding. Justice Alito’s concurring opinion in Sackett suggests that at least one of the Justices may agree that JDs are reviewable. (See his slip opinion at p.2: “At least, property owners like petitioners will have the right to challenge the EPA’s jurisdictional determination under the Administrative Procedure Act.”).

We will keep you apprised of future updates in this litigation.

Posted at 01/09/2015 12:33 PM

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