Respondents Brief — U.S. Army Corp of Eng'rs v. Hawkes Co., 136 S. Ct. 615 (2015) (No. 15-290)
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“Supreme Court, U.S.
FILED
FEB 24 20%
No. 15-290 OFFICE OF THE CLERK
In the
Supreme Court of the Anited States
—~~——
UNITED STATES ARMY CORPS OF ENGINEERS,
Petitioner,
v.
HAWKES CO, INC., et al.,
Respondents.
+
On Writ of Certiorari
to the United States Court of Appeals
for the Eighth Circuit
+
BRIEF FOR THE RESPONDENTS
+
NANCY QUATTLEBAUM BURKE M. REED HOPPER
GREGORY R. MERTZ Counsel of Record
Of Counsel Pacific Legal Foundation
Gray Plant Mooty 930 G Street
500 IDS Center Sacramento, CA 95814
80 South Eighth Street Telephone: (916) 419-7111
Minneapolis, MN 55402 Facsimile: (916) 419-7747
Telephone: (612) 632-3029 mrh@pacificlegal.org
MARK MILLER
Pacific Legal Foundation
8645 N. Military Trail, Ste. 511
Palm Beach Gardens, FL 33410
Telephone: (561) 691-5000
mm@pacificlegal.org
Counsel for Respondents
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i
QUESTION PRESENTED
Is a Jurisdictional Determination, that is
conclusive as to federal jurisdiction under the Clean
Water Act, and binding on all parties, subject to
judicial review under the Administrative Procedure
Act?
‘i
THE PARTIES
Petitioner is the United States Army Corps of
Engineers.
Respondents are Hawkes Co., Inc.; LPF
Properties, LLC; and Pierce Investment Company.
CORPORATE
DISCLOSURE STATEMENT
Respondents have no parent corporations and no
publicly held company owns 10% or more of the stock.
ill
TABLE OF CONTENTS
QUESTION PRESENTED
THE PARTIES
CORPORATE DISCLOSURE STATEMENT
TABLE OF AUTHORITIES
OPINIONS BELOW
JURISDICTION
STATEMENT OF THE CASE
STATEMENT OF FACTS
SUMMARY OF THE ARGUMENT
ARGUMENT
I. THE JURISDICTIONAL
DETERMINATION IS FINAL
AGENCY ACTION
A. An Approved Jurisdictional
Determination Is the Corps’
Final Word on Jurisdiction
B. Final Agency Action Does Not Require
“Independent” Legal Consequences
C. An Approved Jurisdictional
Determination Is Designed
To Have Legal Consequences
D. An Approved Jurisdictional
Determination Has Legal
Consequences for Permitting
and Enforcement
18
18
22
26
I.
E.
IV
TABLE OF CONTENTS—Continued
An Approved Jurisdictional
Determination Increases the
Landowner’s Potential! Liability
An Approved Jurisdictional
Determination Has Other
Legal Consequences
APA Review of an Approved
Jurisdictional Determination
Is Supported by Numerous
Supreme Court Cases
The Approved Jurisdictional
Determination Has “Independent
Legal Consequences
”
THERE IS NO ADEQUATE
REMEDY IN COURT
A.
The Cost of Seeking a Permit
Prior to Judicial Review of
an Approved Jurisdictional
Determination Is Prohibitive
Requiring a Landowner To
Seek a Permit Prior to
Judicial Review of an Approved
Jurisdictional Determination
Is Wasteful and Unnecessary
Requiring a Landowner To Seek
a Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Is Tantamount
to a Decision on the Merits
Page
28
30
31
37
39
39
4]
44
Vv
TABLE OF CONTENTS—Continued
Page
D. Requiring a Landowner To Seek a
Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Circumvents
the Intent of Congress 46
E. Requiring a Landowner To Seek
a Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Undermines the
Presumption of Reviewability 50
F An Enforcement Action Is Not
An Adequate Remedy in Court 53
G. The APA Should Be Interpreted
To Avoid Constitutional Questions 56
CONCLUSION 58
vi
TABLE OF AUTHORITIES
Cases
Abbott Labs. v. Gardner,
387 U.S. 136 (1967)
Armstrong v. Manzo, 380 U.S. 545 (1965)
Ashcroft v. Iqbal, 556 U.S. 662 (2009)
Bell v. New Jersey, 461 U.S. 773 (1983)
Belle Co. v. U.S. Army Corps of Engineers,
761 F.3d 383 (5th Cir. 2014)
Bennett v. Spear, 520 U.S. 154 (1997)
Block v. Community Nutrition Institute,
467 U.S. 340 (1984)
Bowen v. Michigan Academy of
Family Physicians, 476 U.S. 667 (1986)
Cary v. Curtis, 44 U.S. (3 How.) 236 (1845)
Chicago and Southern Air Lines, Inc. v.
Waterman Steamship Corp.,
333 U.S. 103 (1948)
Clark v. Martinez, 543 U.S. 371 (2005)
Columbia Broadcasting System v.
United States, 316 U.S. 407 (1942)
Ex parte Young, 209 U.S. 123 (1908)
Fairbanks North Star Borough v.
U.S. Army Corps of Engineers,
543 F.3d 586 (9th Cir. 2008)
Page
passim
57
38
18
7, 20
passim
15, 53
50, 58
41
36
58
37
54-55
7, 20, 28
Vil
TABLE OF AUTHORITIES—Continued
Page
Frozen Food Express v. United States,
351 U.S. 40 (1956) 33-34
FTC v. Standard Oil Co. of California,
449 U.S. 232 (1980) 31-32
Harrison v. PPG Indus., Inc.,
446 U.S. 578 (1980) 19
Lassiter v. Dep’t of Social Services,
452 U.S. 18 (1981) 56
Mathews v. Eldridge, 424 U.S. 319 (1976) 57
Moore v. United States,
943 F. Supp. 603 (E.D. Va. 1996) 47-49
Ohio v. Roberts, 448 U.S. 56 (1980) 41
Pacific Gas and Electric Co. v. State Energy
Resource Conservation and Development
Commission, 461 U.S. 190 (1983) 18
People ex rel. Bailey v. Greene County
Supervisors, 12 Barb. 217 (N.Y. 1851) 41
Port of Boston Marine Terminal
Association v. Rederiaktiebolaget
Transatlantic, 400 U.S. 62 (1970) 20-22, 33
Rapanos v. United States,
547 U.S. 715 (2006) 1-4, 30, 38-39, 42
Sackett v. E.P.A., 132 S. Ct. 1367 (2012) passim
Seaconsar Far East, Ltd. v. Bank
Markazi Jomhouri Islami Iran,
[1999] 1 Lloyd’s Rep. 36
(English Court of Appeal 1998) 41
vill
TABLE OF AUTHORITIES—Continued
Page
Stevens v. United States, 2 Ct. Cl. 95 (1866) 41
United States v. Bailey,
571 F.3d 791 (8th Cir. 2009) 2
Statutes
5 U.S.C. § 551(4) 21
§ 551(6) 21
§ 551(11) 21
§ 551(13) 21
§ 701(a)(1) 53
§ 704 4, 19, 39, 46, 59
28 U.S.C. § 1254(1) l
33 U.S.C. § 1311(a) 1
§ 1319 29, 56
§ 1252(7) 1
Regulations
33 C.F.R. § 320.1 57
§ 320.1(a)(2) 4, 25, 42
§ 320.1(a)(6) 2-3, 24-25, 32, 42
§ 329.3 57
§ 331.2 3, 23
§ 331.6 12
§ 331.9 24
ix
TABLE OF AUTHORITIES—Continued
Page
§ 331.10 13-14
§ 331.21 14
Miscellaneous
Definition of Peat, http://www.oxforddictionaries.
com/us/definition/american_english/peat 8
U.S. Army Corps of Engineers,
Regulatory Guidance Letter
No. 08-02 (June 26, 2008) 23, 27
U.S. General Accounting Office, Waters and
Wetlands: Corps of Engineers Needs to
Evaluate Its District Office Practices in
Determining Jurisdiction (Feb. 2004) 3, 42
l
OPINIONS BELOW
The opinion of the Eighth Circuit Court of Appeals
(Pet. App. at la-21a), is reported at 782 F.3d 994. The
opinion of the district court (Pet. App. at 22a-43a), is
reported at 963 F. Supp. 2d 868.
JURISDICTION
The court of appeals entered its judgment on
April 10, 2015. The court of appeals denied the United
States Army Corps of Engineers’ petition for rehearing
on July 7, 2015 (Pet. App.103a-104a). The jurisdiction
of this Court is invoked under 28 U.S.C. § 1254(1).
STATEMENT OF THE CASE
The Legal Background
The Clean Water Act authorizes the Corps of
Engineers to regulate certain discharges to “navigable
waters” or “waters of the United States.” 33 U.S.C.
§§ 1311(a) & 1362(7). The term “navigable waters” has
been variously defined by the Corps over the years, but
this Court redefined the term most recently in
Rapanos v. United States, 547 U.S. 715 (2006). In
Rapanos, the plurality defined “navigable waters” as
Traditional Navigable Waters (capable of use in
interstate commerce) and nonnavigable but relatively
permanent rivers, lakes, and streams, as well as
abutting wetlands, with a continuous surface water
connection to Traditional Navigable Waters. Id. at
739-42. In a concurring opinion, Justice Kennedy
opined that the Clean Water Act covered wetlands with
a significant physical, biological, and chemical impact
on Traditional Navigable Waters. Id. at 779. The
Eighth Circuit has held the Corps can establish federal
jurisdiction over wetlands under either the plurality’s
2
“continuous surface water” test or Justice Kennedy’s
“significant nexus” test. See United States v. Bailey,
571 F.3d 791, 799 (8th Cir. 2009). In this case, the
Corps relied on the “significant nexus” test.
The Clean Water Act is unique; it requires an
expert “to determine if [it] even appl[ies] to you and
your property.” Pet. App. at 20a (Kelly, J., concurring).
This is because the “reach of the Clean Water Act is
notoriously unclear. Any piece of land that is wet at
least part of the year is in danger of being classified by
[federal] employees as wetlands covered by the Act
” Sackett v. E.P.A., 132 S. Ct. 1367, 1375 (2012)
(Alito, J., concurring). Since the inception of the Act in
1972, “[t]he Corps has [] asserted jurisdiction over
virtually any parcel of land containing a channel or
conduit--whether man-made or natural, broad or
narrow, permanent or ephemeral—through which
rainwater or drainage may occasionally or
intermittently flow.” Rapanos, 547 U.S. at 722. This
implicates “the entire land area of the United States.”
Id. “Any plot of land containing such a channel may
potentially be regulated as a ‘water of the United
States.“ Id.
To provide some clarity to agency officials and the
regulated public for this expansive assertion of
jurisdiction, that Congress did not intend and could not
have foreseen, the “Corps has authorized its district
engineers to issue formal determinations concerning
the applicability of the Clean Water Act to
activities or tracts of land and the applicability of
general permits or statutory exemptions to proposed
activities.” 33 C.F.R. § 320.1(a)(6). A formal Approved
Jurisdictional Determination, or JD, provides a site-
specific delineation of wetlands or other waters subject
3
to regulation under the Clean Water Act, along with
detailed physical, chemical, and biological data in
support of the determination. 33 C.F.R. § 331.2. The
regulations themselves declare a “determination
pursuant to this authorization shall constitute a Corps
final agency action.” 33 C.F.R. § 320.1(a)(6). The
regulations also provide for Preliminary JD’s that are
written indications that there may be “waters of the
United States” on a parcel. 33 C.F.R. § 331.2. But the
Corps states these JD’s are only “advisory in nature
and may not be appealed.” Pet. Opening Brief at 25(a).
The Corps not only interprets jurisdictional
“waters of the United States” expansively, the Corps
interprets jurisdictional waters inconsistently. This is
confirmed by a report from the General Accounting
Office (GAO) cited by this Court in Rapanos, 547 U.S.
at 725. The report documents the Corps’ loca] districts
“differ in how they interpret and apply the federal
regulations when determining what wetlands and
other waters fall within the [Clean Water Act’s]
jurisdiction.” U.S. General Accounting Office, Waters
and Wetlands: Corps of Engineers Needs to Evaluate Its
District Office Practices in Determining Jurisdiction 3
(Feb. 2004). This is because “the definitions used to
make jurisdictional determinations’ are deliberately
left ‘vague.” Rapanos, 547 U.S. at 727 (citation
omitted).
In its effect, a -urisdictional Determination
requires property owners to: (1) abandon all use of the
regulated portion of the land (often at ruinous cost);
(2) seek a potentially unnecessary permit (often at
4
ruinous cost)’; or, (3) proceed with an otherwise
lawful use of the land (risking ruinous fines’? and
imprisonment).
Corps regulations authorize an administrative
appeal of an Approved JD. The procedure for this
appeal is the same for an appeal of a permit denial or
a permit that is declined by the applicant. See 33
C.F.R. § 320.1(a)(2) (“A district engineer’s decision on
an approved jurisdictional determination, a permit
denial, or a declined individual permit is subject to an
administrative appeal by the affected party in
accordance with the procedures and authorities
contained in 33 C.F.R. part 331.”).
An action brought in the federal courts is subject
to the requirements of the Administrative Procedure
Act (APA). The APA states “[a]gency action made
reviewable by statute and final agency action for which
there is no other adequate remedy in a court are
subject to judicial review.” 5 U.S.C. § 704. The general
test for determining final agency action is often
described as a two-prong analysis: “First, the action
must mark the ‘consummation’ of the agency's
decisionmaking process.” And second, “the action must
be one by which ‘rights or obligations have been
determined,” or from which “legal consequences will
flow.” Bennett v. Spear, 520 U.S. 154, 177-78 (1997)
(citation omitted). Finally, the agency action must be
' According to this Court, the “average applicant for an individual
permit [as in this case] spends 788 days and $271,596 in
completing the process, and the average applicant for a nationwide
[more general] permit spends 313 days and $28,915—not counting
costs of mitigation or design changes.” Rapanos, 547 U.S. at 719.
2 The Clean Water Act authorizes fines up to $37,500 a day. Pet.
Opening Brief at 9 n.4.
5
one for which there is no other remedy in court other
than APA review.
This case involves a challenge to a formal
Approved Jurisdictional Determination issued by the
Corps after an administrative appeal. Respondent
Hawkes argues the JD is invalid (as determined by a
Corps Review officer) and the project site is not subject
to the Clean Water Act under any relevant standard.
The Corps defends its JD on the basis the
determination is not final agency action under Bennett
and Respondent Hawkes has an adequate remedy in
court; Hawkes can seek a permit, then decline the
permit and seek redress in court for the contested
Jurisdictional Determination. Or, if the permit is
denied, Hawkes can challenge the need for a permit in
court. In other words, Hawkes must go through the
costly and time-consuming permit process before a
court can determine whether Hawkes was required to
go through the costly and time-consuming permit
process in the first instance.
The Eighth Circuit Decision
The trial court dismissed the challenge to the
Jurisdictional Determination on a 12(b)(6) motion for
lack of subject matter jurisdiction under the APA,
However, the Eighth Circuit Court of Appeals held
formal Approved Jurisdictional Determinations
represent final agency action subject to immediate
judicial review. According to the Eighth Circuit, the
Jurisdictional Determination is conclusive as to federal
jurisdiction under Sackett and Hawkes has no other
adequate remedy in court:
The Corps’s assertion that the Revised JD is
merely advisory and has no more effect than
6
an environmental consultant’s opinion
ignores reality. “[I]n reality it has a powerful
coercive effect.” Bennett, 520 U.S. at 169, 117
S. Ct. 1154. Absent immediate judicial
review, the impracticality of otherwise
obtaining review, combined with “the
uncertain reach of the Clean Water Act and
the draconian penalties imposed for the sort
of violations alleged in this case leaves
most property owners with little practical
alternative but to dance to the EPA’s [or to
the Corps’) tune.” “In a nation that values due
process, not to mention private property, such
treatment is unthinkable.” Sackett, 132 S. Ct.
at 1375 (Alito, J., concurring). We conclude
that an Approved JD is a final agency action
and the issue is ripe for judicial review under
the APA.
Pet. App. at 16a-17a.
The court determined the test for APA finality is
based on “practical considerations” and the Corps
grossly understated the impact of a JD by
“exaggerating the distinction between an agency order
that compels affirmative action,” like the compliance
order in Sackett, “and an order that prohibits a party
from taking otherwise lawful action,” like the JD in
this case. The Eighth Circuit found “[n]umerous
Supreme Court precedents confirm that this is not a
basis on which to determine whether ‘rights or
obligations have been determined’ or that ‘legal
consequences will flow’ from agency action.” Id. at 11a.
7
In her concurring opinion, Judge Kelly added:
In my view, the Court in Sackett was
concerned with just how difficult and
confusing it can be for a landowner to
predict whether or not his or her land
falls within CWA jurisdiction—a threshold
determination that puts the administrative
process in motion. This is a unique aspect of
the CWA; most laws do not require the hiring
of expert consultants to determine if they
even apply to you or your property. This
jurisdictional determination was precisely
what the Court deemed reviewable in Sackett.
See Sackett, 132 S. Ct. at 1374-75 (Ginsburg,
J., concurring). Accordingly, I concur in the
judgment of the court.
Pet. App. at 20a-21a.
The judgment of the Eighth Circuit conflicts with
Belle Co. v. U.S. Army Corps of Engineers, 761 F.3d
383 (5th Cir. 2014) (aka Kent Recycling now pending on
petition in this Court, 14-493), and Fairbanks North
Star Borough v. U.S. Army Corps of Engineers, 543
F.3d 586 (9th Cir. 2008). This Court granted certiorari
to resolve this conflict.
8
STATEMENT OF FACTS
The Property
The property at issue (the Property) is located in
New Maine Township, Marshal County, Minnesota,
and contains organic peat® found in wetland
environments. JA at 13. In Minnesota, peat harvesting
requires wetland replacement and restoration and is
regulated under permits issued by the Minnesota
Department of Natural Resources (MDNR). Jd. The
Property lies over 120 river miles from the nearest
Traditional Navigable Water, the Red River of the
North. Id. There is no continuous surface water
connection between wetlands on the Property and a
“water of the United States.” Jd. A farm, a separate,
shallow ditch dug for farming purposes in an area the
Corps concedes is upland at the border of the farm
most distant from the Property, and another sizable
upland area, are all located between the Property and
the area the Corps claims is a “Relatively Permanent
Water.” Id. at 13-14.
Administrative Proceedings
In October, 2006, Hawkes obtained an option to
purchase the Property, subject to receiving approval to
conduct peat harvesting operations on the Property. Id.
at 14. On March 20, 2007, Kevin Pierce, a Hawkes
officer, met with representatives of the Corps and the
Minnesota Department of Natural Resources. Jd. The
discussion at this meeting focused on potential
° Peat is a “brown, soil-like material characteristic of boggy, acid
ground, consisting of partly decomposed vegetable matter. It is
widely cut and dried for use in gardening and as fuel[.]” See
http://www.oxforddictionaries.com/us/definition/american_englis
h/peat.
9
roadblocks to the plan to harvest peat on the Property,
including discussion of the Property’s status as a rich
fen and a wetland. Jd. at 14-15.
On January 15, 2008, Mr. Pierce again met with
representatives of the Corps and the MDNR to review
plans to conduct peat harvesting on the Property. Id.
at 15. At this meeting, Mr. Pierce discussed with the
Corps and MDNR representatives the high quality of
the peat available at the Property and the importance
to Hawkes’ business of being able to harvest peat on
the Property. Jd. As Mr. Pierce explained, the peat
available to Hawkes, as of January, 2008, provided the
company approximately seven to ten years of future
operations. Jd. Mr. Pierce also explained that by
expanding peat harvesting to the Property, Hawkes
could extend the lifespan of its business by ten to
fifteen additional years. Jd.
On or about December 13, 2010, Hawkes applied
for an individual permit from the Corps under Section
404 of the Clean Water Act to expand its existing peat
harvesting operations to a portion of the
Property—approximately 150 acres. Jd. As part of its
permit application, Hawkes identified fifteen sites that
it had evaluated as potential alternatives to the
Property. None of those sites provided a viable
alternative to peat harvesting on the Property. Jd.
In January, 2011, Mr. Pierce again met with the
Corps and MDNR. 7d. At that meeting, Corps
representatives spent the majority of time attempting
to persuade Mr. Pierce to abandon his plans to use the
Property. Id. Corps representatives played up the cost
associated with the permitting process; arguing there
was no guarantee that a permit would ever be granted;
and suggesting that, even if a permit were to be
10
granted, the process would take many years before it
would be completed. Jd. at 15-16. But Mr. Pierce stated
his intent to proceed. Jd.
On or about March 15, 2011, the Corps issued a
letter to Hawkes stating the Corps had made a
“preliminary determination” that the Property is a
“water of the United States” and “is regulated by the
Corps under Section 404 of the Clean Water Act.” Id.
at 16. The Corps’ letter also stated that “at a
minimum” an environmental assessment will be
required. Jd. Mr. Pierce again met with representatives
of the Corps and the MDNR on April 23, 2011. Id. At
that meeting, one of the Corps representatives,
Tamara Cameron, stated the opinion that the Property
would be completely and permanently destroyed if peat
were to be harvested on the Property. Jd. Ms. Cameron
also stated it could take years before a permit would be
granted and the process would be very costly. Jd.
On May 31 through June 3, 2011, representatives
of the Corps conducted a site visit of the Property. Jd.
At that time, a Hawkes employee told Steve Eggers,
from the Corps, how important expanding operations
to the Property was to Hawkes’ ability to continue its
business and how much he hoped that Hawkes would
be able to begin harvesting soon. Jd. In response,
Mr. Eggers suggested the employee should start
looking for another job, or words to that effect. Jd.
On or about August 25, 2011, the Corps
sent another letter to Hawkes with a list of nine
additional information items that would be needed
for the permit application. Jd. at 17. These included
hydrological assessments of the wetland and of
groundwater flow spatially and vertically, functional
resource assessments including vegetation surveys,
11
inventorying and analyzing the quality of wetlands in
the entire watershed, evaluation of upstream potential
impacts, and more. Jd. The cost of performing all of
these requirements is estimated to exceed $100,000.
Id.
Faced with these overly burdensome demands by
the Corps, Hawkes put its permit application on hold
and asked the Corps to justify its preliminary
Jurisdictional Determination. Jd. On November 1,
2011, representatives of the Corps met with the then
owner of the Property. Jd. Although Mr. Pierce had
asked to be present in any meeting between the Corps
and the landowner, the Corps chose to exclude him
from this meeting. Jd. At the meeting, the Corps
representatives stressed to the landowner the harm
that would result if peat harvesting were to be
permitted on the Property and insisted the landowner
try to sell the Property to a wetlands bank or to
another party. Jd. The Corps made these statements
even though the Corps representatives were aware
Mr. Pierce had obtained an option to purchase the
Property. Jd. The Corps also indicated there is a very
good possibility that a full Environmental Impact
Statement would be required for the project that would
delay issuance of any permit for several years. Jd. at
17-18.
On November 8, 2011, the Corps provided Hawkes
with a copy of a draft Jurisdictional Determination for
the Property. Jd. at 18. The draft JD claimed the
Property was connected by a Relatively Permanent
Water through a series of culverts and unnamed
streams which flowed into the Middle River and then
to a Traditional Navigable Water (the Red River of the
North) 120 miles away. Jd. The Corps, therefore,
12
deemed the Property subject to Corps’ jurisdiction
under the Clean Water Act. The draft JD did not
determine whether there was a significant nexus
between the Property and any navigable waters. Id.
On December 1, 2011, Corps representatives
conducted a site visit of the Property for the purpose
of making a formal Approved Jurisdictional
Determination. Jd. By correspondence dated
December 19, 2011, Hawkes, through their wetland
consultant, identified numerous errors in the draft JD
and provided the Corps with additional information to
be considered in connection with its formal site
investigation. Id. This information showed there was
no Relatively Permanent Water that connected the
Property to a Traditional Navigable Water. Id.
On or about February 7, 2012, the Corps issued a
formal Approved Jurisdictional Determination (the
“Initial JD”), concluding there was a “significant
nexus” between the Property and the Red River of the
North and, accordingly, the Property was a “water of
the United States” subject to Corps’ jurisdiction. Jd. On
or about April 4, 2012, Hawkes filed a timely appeal of
the JD under 33 C.F.R. § 331.6 setting forth the
reasons why the Property is not a “water of the United
States.” Id. at 18-19.
On or about April 23, 2012, the Regulatory
Appeals Review Officer sent Hawkes’ consultant a
letter stating the appeal was appropriate for
consideration. Jd. at 19. The parties presented their
oral arguments before the Review Officer on July 24,
2012, and an Administrative Appeal Decision was
issued on October 24, 2012, finding the appeal had
merit and the administrative record “[did] not contain
sufficient documentation/analysis to support a finding
13
of Clean Water Act jurisdiction.” Jd. The
Administrative Appeal Decision noted, among other
things:
* “The [Administrative Record] does not
contain data supporting flow regime, volume.
duration, or frequency from the wetlands to
the river. Additionally, the District states
that indicators of the transport of energy,
materials, and nutrients were observed
during a site visit, but there is no
quantitative date [sic] given to support the
finding.” (footnote omitted)
* “While the [Administrative Record]
provides information indicating an OHW [i.e.,
“ordinary high water” mark for the unnamed
tributary exists, it does not provide sufficient
evidence to establish a significant nexus that
the number of flow events, volume, duration,
and frequency of water flowing through the
tributary are such that it has an appreciable
effect on the TNW [Traditional Navigable
Water].” (footnote omitted)
* “The [Administrative Record] included a
description of the stream channel riparian
corridor from the unnamed tributary to the
TNW However, the water flow regime
information was not sufficient to indicate that
a significant nexus exists.” (footnote omitted)
Id. at 19-20.
Following remand, on or about December 31, 2012,
the Corps issued a revised JD (the “Revised JD”) and
advised that the Revised JD is a “final Corps permit
[sic] decision in accordance with 33 C.F.R. § 331.10.”
14
Id. at 20. According to 33 C.F.R. § 331.21, Plaintiffs are
considered to have exhausted their administrative
remedies when a final decision is made pursuant to 33
C.F.R. § 331.10. JA at 20.
The Revised JD did not contain additional data
that would support a significant nexus between the
Property and the Red River of the North. Jd. However,
the Revised JD still purportedly relies on Justice
Kennedy’s “significant nexus’ test to assert jurisdiction
over the Property, which is described by the Revised
JD as a “Non-Relatively Permanent [Water] that
flow|s] directly or indirectly into [a] Traditional
Navigable [Water].” Jd.
The Revised JD did not correct the deficiencies of
the Initial JD that would demonstrate how the
Property, either quantitatively or qualitatively,
significantly affects the physical, biological, and
chemical integrity of the Red River of the North located
120 river miles from the Property. Jd. at 20-21. Even
though the Corps had two years to establish
jurisdiction, its Revised JD, like the Initial JD, speaks
only to the overall functions provided by wetlands and
stream headwaters in general. Jd. at 21. As the Review
Officer found, it does “not speak to how the specific
onsite wetland and tributaries have a significant nexus
that is more than speculative or insubstantial on the
chemical, physical or biological integrity of the
downstream TNW.” Id.
Any further efforts to obtain a permit to conduct
peat harvesting on the Property would be futile, either
because the Corps has already decided that it will not
issue a permit or because the delay and expense of
finally obtaining a permit would substantially impede,
15
if not prevent, Hawkes from proceeding with its plans
to harvest peat on the Property. Jd.
SUMMARY OF THE ARGUMENT
This case arises from a challenge to a formal
Approved Jurisdictional Determination, or wetlands
delineation, issued by the U.S. Army Corps of
Engineers concluding peat bogs found on Respondents’
property are subject to the Clean Water Act because
the Property has a purported “significant nexus” with
downstream “navigable waters.” Hawkes contests this
conclusion as contrary to the Act and Supreme Court
precedent and seeks to have the JD overturned under
the Administrative Procedure Act.
The APA “creates a presumption favoring judicial
review of administrative action.” Sackett v. Envtl. Prot.
Agency, 132 S. Ct. at 1373 (quoting Block uv.
Community Nutrition Institute, 467 U.S. 340, 349
(1984)). That presumption applies in this case. Like the
Sacketts, Hawkes is subject to agency strong-arming
under the law.
The Corps has conceded the Jurisdictional
Determination is the agency’s final word on
jurisdiction. A plain reading of the APA should satisfy
the “final agency action” requirement without further
analysis. However, under Bennett, this Court has
generally required such actions to have a
particularized legal consequence. This Court employs
a practical approach to determine if the agency action
changes the legal regime or fixes a “right” or
“obligation,” even if the agency action does not have
legal consequences independent of the underlying
statute.
16
The JD in this case changes the legal regime by
declaring through a formal site-specific adjudication
that the Hawkes property contains “waters of the
United States” subject to federal control under the
Clean Water Act. The JD is conclusive as to federal
jurisdiction and may be relied on for a period of five
years. The JD has practical and legal consequences for
the Corps and an inescapable coercive effect on
Hawkes such that Hawkes is compelled to abandon
any use of the Property (at ruinous cost), obtain an
individual federal permit (at ruinous cost), or ignore
the JD and proceed with the peat harvesting project
without a permit and risk ruinous fines and criminal
liability. The JD has other significant effects on
Hawkes as well, including increased risk of liability,
loss of an otherwise legal right to use the Property, and
substantially increased costs.
Judicial review of the Jurisdictional
Determination is consistent with this Court’s case law,
including Sackett and Bennett, and more particularly,
Abbott Labs., Port of Boston, and Frozen Food Express.
The Corps has provided no contrary authority on facts
analogous to this case. Therefore, the JD must be
deemed “final agency action” under the APA.
Also, there is no “adequate remedy in court” that
would justify any further delay in judicial review. The
requirement that Hawkes go through a separate
permit process before seeking judicial review, urged on
this Court by the Corps, is nonsensical. The permit
process is prohibitively costly in time and money, and
punitive in effect. More importantly, it contributes
nothing to the judicial resolution of the jurisdictional
issue. It serves no litigation goal other than delay. The
permit process does not, and cannot, advance the case
17
because it adds no relevant facts nor clarifies
application of the law. The permit requirement is
wasteful, unnecessary, and likely unconstitutional.
Additionally, the permit requirement undermines
the presumption of reviewability and is tantamount to
a decision on the merits in favor of the Corps. The
primary reason to challenge the JD is to avoid the
crippling cost and delay of an unnecessary permit. If
Hawkes were to seek a permit and then successfully
challenge the underlying Jurisdictional Determination
in court, as the Fifth and Ninth Circuits require,
Hawkes could never recover the needless expense of
seeking the permit. This alone is sufficient to
demonstrate the permit process is not an adequate
remedy in court to challenge an _ erropedus
jurisdictional claim.
Seeking judicial review by violating the Clean
Water Act to trigger an enforcement action is likewise
inadequate. The risk is too high. The penalties for
discharging a pollutant without a permit are
astronomical; tens of thousands of dollars a day in
fines and criminal liability. Under Ex parte Young, a
scheme requiring aggrieved parties to risk devastating
fines and imprisonment to challenge the validity of a
regulation is unconstitutional and invalid on its face.
Finally, the facts in this case give rise to
numerous due process claims. This Court should rely
on the constitutional avoidance canon and interpret
the APA to avoid a constitutional conflict and allow
immediate judicial review of the Jurisdictional
Determination.
18
ARGUMENT
I
THE JURISDICTIONAL
DETERMINATION IS
FINAL AGENCY ACTION
The test for determining final agency action under
the APA is generally described as a two-prong analysis:
“First, the action must mark the ‘consummation’ of the
agency’s decisionmaking process.” And second, “the
action must be one by which ‘rights or obligations have
been determined,” or from which “legal consequences
will flow.” Bennett, 520 U.S. at 177-78 (citations
omitted). The second prong of the Bennett test is
written in the disjunctive. Even if new “legal
consequences” do not flow, the agency action may still
be final if it determines “rights” or “obligations.”
In furtherance of the “generous review provisions”
of the APA, id. at 163, and the Act’s strong
presumption of reviewability, this Court’s decisions
take a pragmatic approach to finding agency action is
final under the APA. See Abbott Labs. v. Gardner, 387
U.S. 136, 148-50 (1967); accord Bell v. New Jersey, 461
U.S. 773, 779 (1983); and Pacific Gas and Electric
Co. v. State Energy Resource Conservation and
Development Commission, 461 U.S. 190, 200-01 (1983).
A. An Approved Jurisdictional
Determination Is the Corps’
Final Word on Jurisdiction
The Corps has abandoned its previous argument
that an Approved Jurisdictional Determination is not
the “consummation of the agency’s decisionmaking
process,” as required under the first Bennett prong.
19
The Corps now concedes “the issuance of an approved
jurisdictional determination marks the culmination of
the distinct process by which the Corps informs a
landowner whether the Corps believes that covered
waters are present on a specified tract.” Pet. Opening
Brief at 26. This is a necessary concession because the
argument is untenable under Sackett. In Sackett,
this Court held a compliance order, that may be
issued “on any information” and without any right of
administrative review, is the agency’s “last word” on
jurisdiction, whereas the Jurisdictional Determination
here is the result of a lengthy and detailed site-specific
analysis concluding with an administrative appeal and
remand.
“As a logical prerequisite to the issuance of
the challenged compliance order,” the
Sacketts contend, “EPA had to determine
that it has regulatory authority over [our]
property.” Id., at 54-55. The Court holds that
the Sacketts may immediately litigate their
jurisdictional challenge in federal court. I
agree, for the Agency has ruled definitively
on that question.
Sackett, 132 S. Ct. at 1374 (Ginsburg, J., concurring).
Under a literal reading of the APA, this should
end the inquiry into the finality question. The APA
states in relevant part that “final agency action(s] for
which there is no other adequate remedy in a court are
subject to judicial review.” 5 U.S.C. § 704. This
language is not ambiguous, and under the standard
norms of statutory interpretation, the term “final”
takes its ordinary meaning (i.e., conclusive or decisive).
_ See Harrison v. PPG Indus., Inc., 446 U.S. 578 (1980)
(holding the phrase “any other final action” in
20
§ 307(b)(1) of the Clean Air Act is clear and is to be
construed in accordance with its literal meaning so as
to reach any action of the Administrator that is final);
see also Sackett, 132 S. Ct. at 1373 (“[T]he APA
provides for judicial review of all final agency actions,
not just those that impose a self-executing sanction.”).
Such a straightforward reading of the APA would give
due deference to the presumption of reviewability on
which the Act rests. Jd.
Nevertheless, Hawkes addresses the second
Bennett prong below.
B. Final Agency Action Does
Not Require “Independent”
Legal Consequences
Under the second Bennett prong, “the action must
be one by which ‘rights or obligations have been
determined,” or from which “legal consequences will
flow.” Bennett, 520 U.S. at 178 (quoting Port of Boston
Marine Terminal Association v. Rederiaktiebolaget
Transatlantic, 400 U.S. 62, 71 (1970)). In evaluating
whether legal consequences flow from an Approved
Jurisdictional Determination, the Corps misconstrues
the Bennett test. The Corps asserts, in reliance on the
Fifth and Ninth Circuits, that legal consequences must
flow from the JD, independent of the Clean Water Act.
This is not the test.
In Fairbanks North Star Borough v. U.S. Army
Corps of Engineers, 543 F.3d at 594, the court held a
JD cannot satisfy the Bennett second prong because
“Fairbanks’ legal obligations arise directly and solely
from the CWA and not from the Corps’ issuance of an
approved jurisdictional determination.” Similarly, in
Belle Co., 761 F.3d at 391-92, the Fifth Circuit held the
21
JD was not reviewable under the APA because legal
consequences did not flow “independently” from that
determination but from the CWA. However, neither of
these circuits nor the Corps cites any controlling
authority for that proposition.
The language of the APA does not require “agency
action” to have “independent” legal consequences,
either expressly or impliedly. If such a requirement
were imposed on the APA, it would preclude judicial
review of most, if not all, interpretive or ceclaratory
decisions and eviscerate the Act. See 5 U.S.C. § 551(13)
(Defining “agency action” as “the whole or part of an
agency rule, order, license, sanction, relief, or the
equivalent ”); id. § 551(4) (Defining “rule” as “the
whole or a part of an agency statement of general or
particular applicability and future effect designed to
implement, interpret, or prescribe law or policy.”); id.
§ 551(6) (Defining “order” as “the whole or a part of a
final disposition, whether affirmative, negative,
injunctive, or declaratory in form, of an agency in a
matter other than rule making.”); and, id. § 551(11)
(Defining “relief? as “the whole or a part of an
agency—{A) grant of money, assistance, license,
authority, exemption, exception, privilege, or remedy;
(B) recognition of a claim, right, immunity, privilege,
exemption, or exception; or, (C) taking of other action
on the application or petition of, or beneficial to, a
person.”).
Moreover, no Supreme Court precedent is cited in
support of this interpretation. There is, however,
express contrary precedent. Bennett itself relied on
Port of Boston, 400 U.S. at 70-71, that rejected the
argument that a commission order about dockside
storage fees “lacked finality because it had no
22
independent effect on anyone.” The Court stated that
argument had the “hollow ring of another era.” Id.
More importantly, the Court acknowledged agency
actions “that have no independent coercive effect are
common” and this Court had found such actions final
and reviewable. Jd. at 71.
According to this Court, “the relevant
considerations in determining finality are whether the
process of administrative decisionmaking has reached
a stage where judicial review will not disrupt the
orderly process of adjudication and whether rights
or obligations have been determined or legal
consequences will flow from the agency action.” Jd. If
“rights,” “obligations,” or “legal consequences” do not
flow “independently” from the agency action, they must
flow from the underlying statute. Therefore, the
question before this Court is not whether a JD has
legal consequences beyond the Clean Water Act, but
whether the JD determines if the “rights” and
“obligations” imposed by the Act apply to aggrieved
parties. Through “the orderly process of adjudication,”
that’s exactly what the JD did here. Jd. In Abbott
Labs., 387 U.S. at 148-54, this Court cited a string of
cases that found agency action “final” under the APA
that involved nothing more than an interpretation of a
statute, including many of those cases relied on by the
Eighth Circuit below.
C. An Approved Jurisdictional
Determination Is Designed
To Have Legal Consequences
A recurring theme in the Corps’ argument is that,
in its effect, an Approved Jurisdictional Determination
is similar to an informal agency opinion or warning
letter, or even a consultant’s report, and is merely
23
advisory. See Pet. Opening Brief at 33. The Eighth
Circuit rejected this argument:
The Corps’s assertion that the Revised JD is
merely advisory and has no more effect than
an environmental consultant’s opinion
ignores reality. “[I]n reality it has a powerful
coercive effect.” Bennett, 520 U.S. at 169.
Pet. App. at 16a.
The “powerful coercive effect” of the Jurisdictional
Determination in this case is that Hawkes must suffer
grave consequences no matter what it does. Under the
JD, Hawkes’ only options are: (1) abandon the peat
harvesting project, at great loss; (2) complete the
permit process at exorbitant cost with no certainty of
success; or (3) proceed with the project without a
permit and incur crushing civil and criminal liability.
The Corps simply ignores that reality when it argues
a JD has no legal consequences.
The Corps appears to be confusing an informal
Preliminary JD with a formal Approved JD. Corps’
regulations provide for issuance of Preliminary
Jurisdictional Determinations, which are “written
indications that there may be waters of the United
States on a parcel or indications of the approximate
location(s) of waters of the United States on a
parcel.” 33 C.F.R. § 331.2. Preliminary Jurisdictional
Determinations do not reflect a final conclusion about
whether “waters of the United States” are present. Jd.;
see U.S. Army Corps of Engineers, Regulatory
Guidance Letter No. 08-02, 74 4, 7 (June 26, 2008).
Accordingly, Preliminary JD’s “are advisory in nature
and may not be appealed.” Pet. Opening Brief at
24
25(a). This suggests that formal Approved JD’s are
something more than “advisory” in nature.”
Contrary to a Preliminary JD that is more like an
informa] opinion letter, a formal Approved JD is based
on a costly and extensive onsite investigation by the
Corps itself: “Significant agency resources are
necessary to perform the scientific and technical
analysis required to produce” Jurisdictional
Determinations. Pet. Opening Brief at 24. The
investigator must consider the actual physical,
chemical, and biological aspects of the site and draw
complex factual and legal conclusions from the data
gathered. See 33 C.F.R. § 331.9. Each investigation is
different. Only an expert in this aspect of the law and
science can make the final determination. “This is a
unique aspect of the CWA; most laws do not require
the hiring of expert consultants to determine if they
even apply to you or your property.” Pet. App. at 20a-
21a (Kelly, J., concurring).
The Clean Water Act does not cover all waters.
Therefore, jurisdictional waters must be determined on
a case-by-case basis. This is the very purpose of the
Jurisdictional Determination: “A landowner who
procures a[n] [approved] jurisdictional determination,
however, has the advantage of knowing the Corps’
current, considered view as to whether there are
waters of the United States on the landowner’s
property.” Pet. Opening Brief at 22.
An Approved JD goes even further and determines
what exemptions and permits apply: The “Corps has
authorized its district engineers to issue formal
determinations concerning the applicability of the
Clean Water Act to activities or tracts of land and
the applicability of general permits or statutory
25
exemptions to proposed activities.” See 33 C.F-.R.
§ 320.1(a)(6).
The JD regulatory process even provides for a
right of administrative appeal on exactly the same
basis as a formal permit. See 33 C.F.R. § 320.1(a)(2) (“A
district engineer’s decision on an approved
jurisdictional determination, a permit denial, or a
declined individual permit is subject to an
administrative appeal by the affected party in
accordance with the procedures and authorities
contained in 33 C.F.R. part 331.”). Upon completion of
an administrative appeal, Corps regulations declare a
“determination pursuant to this authorization shall
constitute a Corps final agency action.” 33 C.F.R.
§ 320.1(a)(6). And, “[t]he determination reflects the
agency’s official view, and it will remain in effect for
five years unless conditions change or new information
comes to light.” Pet. Opening Brief at 25.
An Approved JD has all the earmarks of final
agency action: (1) it goes beyond the informal opinion
of a Preliminary JD; (2) it is based on a costly and
detailed site-specific analysis; (3) it addresses the
“applicability of general permits or statutory
exemptions;” (4) it represents the agency’s “official
view” on jurisdiction; (5) it is subject to the same
administrative appeals process as a permit decision;
(6) after appeal, the determination is considered “final
agency action;” and (7) the JD can be relied on for five
years. It is hard to believe the government would
create such elaborate procedures and expend such
extensive resources on a determination that was not
intended to fix a legal “right” or “obligation.” “It would
be adherence to a mere technicality to give any
26
credence to [the government’s] contention.” Abbott
Labs., 387 U.S. at 152.
If the Act answered the question of whether a
particular parcel contains jurisdictional wetlands,
there would be no need for a Jurisdictional
Determination. But there is such a need, as evidenced
by the existence of the Corps regulations. It is the JD,
not the Clean Water Act “that puts the administrative
process in motion.” Pet. App at 20a-21la (Kelly, J.,
concurring).
D. An Approved Jurisdictional
Determination Has
Legal Consequences for
Permitting and Enforcement
The Corps repeatedly argues any relevant “rights”
or “obligations” are determined by the Clean Water
Act, not the Jurisdictional Determination. This is
ironic in light of the Corps’ admission that a JD is
provided precisely because “[t]he CWA itself does not
establish any mechanism whereby a property owner,
without first seeking a permit or discharging without
a permit, may obtain the government’s view as to
whether the Act applies to particular sites.” Pet.
Opening Brief at 3.
According to the Corps, a JD.adds nothing to the
Act, has no effect, and is not final agency action under
the second Bennett prong. See Pet. Opening Brief at 20-
44. But the same could be said of almost any agency
action backed by statute, including a permit grant or a
permit denial, which the Corps admits are reviewable
under the APA. Id. at 45.
27
The JD here is reminiscent of the drug labeling
requirement in Abbot Labs., which the government
argued was not reviewable because it could not be
enforced directly but only when the Attorney General
authorized “criminal and seizure actions for violations
of the statute.” Abbott Labs., 387 U.S. at 151. This
Court found “the argument unpersuasive” because “the
agency does have direct authority to enforce this
regulation in the context of passing upon applications
for clearance of new drugs.” Jd. at 151-52.
Likewise, if a landowner discharges a pollutant
into covered waters (as defined by the JD), without
federal approval, the Corps has “direct authority” to
rely on the JD in determining the nature of the
violation. Moreover, with respect to the scope of
covered waters, the Corps is legally bound by the JD
during the permit process. See Pet. App. at 9a-10a.
(“The Corps’ Regulatory Guidance Letter No. 08-02, at
2, 5, described an Approved JD as a ‘definitive, official
determination that there are, or that there are not,
jurisdictional “waters of the United States” on a site,’
and stated that an Approved JD ‘can be relied upon by
a landowner, permit applicant, or other affected party
for five years”).
Also, a third party can rely on the JD as prima
facie evidence of a violation of the Clean Water Act. See
Pet. App. at 34(a) (The Corps views the JD as final
agency action “in the sense the public may rely on the
determination.”); see also Pet. Opening Brief at 3 (“In
addition to establishing various government
enforcement mechanisms, the CWA _ authorizes
aggrieved private citizens to file suit against persons
who are alleged to have made unlawful pollutant
discharges into waters of the United States. See 33
28
U.S.C. § 1365(a)(1)[.}”). Such waters are defined by the
JD.
If, on the other hand, a landowner discharges a
pollutant into waters the Corps has determined are not
covered by the Act (i.e., through a negative JD), the
landowner can raise an estoppel defense against any
related Corps enforcement action. See Fairbanks North
Star Borough, 543 F.3d at 597 (“A negative finding
would effectively assure [the landowner] that the
Corps would not later be able to fault [the landowner’s]
failure to seek a permit.”).
An Approved JD has very real legal consequences
for the Corps, the landowner, and even the public.
Under Bennett, it is enough if the agency action
“alter[s] the legal regime to which the [agency] is
subject.” Bennett, 520 U.S. at 156. Therefore, the JD is
final agency action under the APA.
E. An Approved Jurisdictional
Determination Increases the
Landowner’s Potential Liability
In Sackett, this Court determined legal
consequences flowed from the compliance order
because, among other things, it increased the
petitioners’ potential liability “in a future enforcement
proceeding.” Sackett, 132 S. Ct. at 1372. So does the JD
here.
The Eighth Circuit stated below an Approved
Jurisdictional Determination increases “the penalties
[Hawkes] would risk if they chose to begin mining
without a permit” by exposing the landowner to
“substantial criminal monetary penalties and even
imprisonment for a knowing CWA violation.” Pet. App.
at 15a. The Corps does not dispute that such a risk
29
exists. Rather, the Corps affirms the increased risk of
liability:
The CWA does provide that a court, in
assessing an appropriate civil penalty for a
violation, should consider, inter alia, “any
good-faith efforts” to comply with the CWA’s
requirements. 33 U.S.C. 1319(d). The statute
also imposes criminal penalties for knowing
violations of the CWA, 33 U.S.C. 1319(c)(2).
A landowner’s receipt of a jurisdictional
determination—and its consequent
knowledge that the agency believes the CWA
applies—could be offered as evidence of the
owner's knowledge of the CWA’s applicability.
Pet. Opening Brief at 32.
The only argument the Corps offers in mitigation
of this risk is that the Clean Water Act does not
assign any particular weight to a Jurisdictional
Determination. Jd. Therefore, the risk is only
contingent. Jd. But the Corps cannot deny that scienter
is an element of a knowing violation and that
landowners cannot claim ignorance or mistake once
they are in receipt of an Approved JD. This necessarily
increases the landowners’ potential for increased
liability, which is substantial. For example, a negligent
violation of the Act limits civil fines to $37,500 per day,
but allows a fine of up to $50,000 per day (or more
when adjusted for inflation) for a knowing violation
and increases jail time from | to up to 3 years. 33
U.S.C. § 1319. The Eighth Circuit was correct in
holding the JD is like a compliance order in this
respect and, under Sackett, the JD is subject to
immediate review.
30
F. An Approved Jurisdictional
Determination Has Other
Legal Consequences
The effects of the Approved Jurisdictional
Determination in this case are “direct and
appreciable.” See Bennett, 520 U.S. at 178.
The Jurisdictional Determination severely limits
Hawkes’ ability to use the Property for peat harvesting
because Hawkes must now obtain an individual Clean
Water Act (section 404) permit before the project can
proceed. This is no small matter:
The burden of federal regulation on those
who would deposit fill material in locations
denominated “waters of the United States” is
not trivial. In deciding whether to grant or
deny a permit, the U.S. Army Corps of
Engineers (Corps) exercises the discretion of
an enlightened despot, relying on such factors
as “economics,” “aesthetics,” “recreation,” and
“in general, the needs and welfare of the
people,” 33 C.F.R. § 320.4(a) (2004). The
average applicant for an individual permit
spends 788 days and $271,596 in completing
the process, and the average applicant for a
nationwide permit spends 313 days and
$28,915—not counting costs of mitigation or
design changes. Sunding & Zilberman, The
Economics of Environmental Regulation by
Licensing: An Assessment of Recent Changes
to the Wetland Permitting Process, 42
Natural Resources J. 59, 74-76 (2002).
Rapanos, 547 U.S. at 721 (footnote omitted).
31
Those costs will likely be higher in this case
because of the nine hydrological studies requested by
the Corps, estimated at more than $100,000, and the
looming requirement for a lengthy and costly
Environmental Impact Statement the Corps has
threatened to impose. JA at 17-18.
The JD has other, equally severe, consequences for
Hawkes. It is axiomatic that the JD decreases the
value of the property for peat harvesting and increases
production, carrying, and loan costs. These effects are
real and, in the aggregate, can effectively rob the
landowner of all viable economic use. Simply
depositing a bucket of soil in the wetland areas is a
violation of the law. To say the JD has no consequences
is to deny the obvious.
G. APA Review of an Approved
Jurisdictional Determination
Is Supported by Numerous
Supreme Court Cases
The Corps has failed to cite a single Supreme
Court case where APA review was denied in a case
like this, where the agency action involved a case-
specific adjudication and the applicant exhausted
all administrative remedies, including appeal and
remand. FTC v. Standard Oil Co. of California, 449
U.S. 232 (1980), on which the Corps relies, is not such
a case. Pet. Opening Brief at 37.
In FTC, the Federal Trade Commission served a
number of oil companies with a complaint stating the
Commission had “reason to believe” these companies
violated the Federal Trade Commission Act. 449 U.S.
at 234. However, that complaint did not purport to be
the Commission’s final word on the violation. Instead,
32
it provided the offending oil company with an
opportunity to participate in an administrative hearing
for the purpose of determining whether the oil
company actually violated the Act. Jd. at 241-43. An
opportunity the oil company declined. Jd. This Court
held the complaint was not “final agency action”
because it was not a final adjudicative decision and for
that reason the complaint itself had no legal
consequence. Jd. at 243. But that is quite different
from the JD in this case where the recipient has
completed the administrative review process and the
JD itself purports to be a final adjudicative decision on
jurisdiction. See 33 C.F.R. § 320.1(a)(6). FTC is,
therefore, not analogous to this case.
Having found no analogous Supreme Court case,
the Corps goes to great lengths to distinguish this case
from the compliance order in Sackett and the Biological
Opinion in Bennett. But this misses the mark. Under
the APA, a final agency action need not have the
compulsory effects of a compliance order or the coercive
effects of a Biological Opinion, although the JD is
similar in effect. In her concurrence below, Judge Kelly
observed that Sackett compelled judicial review of the
JD in this case:
In my view, the Court in Sackett was
concerned with just how difficult and
confusing it can be for a landowner to
predict whether or not his or her land falls
within CWA jurisdiction—a _ threshold
determination that puts the administrative
process in motion. This is a unique aspect of
the CWA; most laws do not require the hiring
of expert consultants to determine if they
even apply to you or your property. This
33
jurisdictional determination was precisely
what the Court deemed reviewable in Sackett.
Pet. App. at 20a.
Although judicial review of a JD is consistent with
Sackett and Bennett, this Court has granted judicial
review of other agency actions more akin to the
Jurisdictional Determination in this case.
In Port of Boston Marine Terminal Ass’n v.
Rederiaktiebolaget Transatlantic, 400 U.S. 62, cited by
both Sackett and Bennett, this Court had to decide who
had primary jurisdiction to review a rate order by the
Maritime Commission and, in the process, this Court
addressed the standard for determining final agency
action. Relevant here is this Court’s holding that
agency orders need not create a new, independent legal
consequence to be final. Jd. at 70-71.
Citing Frozen Food Express v. United States, 351
U.S. 40 (1956), this Court concluded: “Agency orders
that have no independent coercive effect are common”
but that is not the “relevant consideration[] in
determining finality.” Port of Boston, 400 U.S. at 70-71.
The relevant consideration, this Court stated, was
“whether the process of administrative decisionmaking
has reached a stage where judicial review will not
disrupt the orderly process of adjudication and
whether rights or obligations have been determined.”
Id. at 71. In that case, there was “no possible
disruption of the administrative process” because there
was “nothing else for the Commission to do.” Jd. So it
is in this case. No further administrative review of the
JD is required or even allowed. Now that the Corps has
issued the JD, it will not revisit that determination
even during the permit process. See Pet. Opening Brief
34
at 28. The JD is conclusive as to jurisdiction and
legally binding on Hawkes and the Corps.
As for agency action that has “no independent
coercive effect,” an examination of Frozen Food
Express, 351 U.S. 40, is helpful because it is most
analogous to the present case. Frozen Food Express
was a motor carrier that transported certain
“agricultural commodities” that were exempt from
regulation by the Interstate Commerce Commission,
much like the remote wetlands in this case. When the
Commission issued a determination that certain
commodities were no longer subject to the agricultural
exemption, Frozen Food Express sought to challenge
the order in court. In determining the order was final
and subject to judicial review, this Court recited these
facts: (1) that “the determination by the Commission
that a commodity is not an exempt agricultural
product has an immediate and practical impact on
carriers who are transporting the commodities;”
(2) that the “order” serves as a warning that
transporting these commodities without authorization
will subject the carrier to “civil and criminal risks;”
(3) when unauthorized transportation occurs, the
Commission can issue a cease and desist order
enforceable in court; (4) that “[t]he ‘order’ of the
Commission which classifies commodities as exempt
or nonexempt is, indeed, the basis for carriers in
ordering and arranging their affairs;” and (5) the
“determination made by the Commission is not
therefore abstract, theoretical, or academic.” Jd. at 43-
44.
The facts here are remarkably similar to the facts
in Frozen Food Express: (1) the determination that the
wetlands on Hawkes’ property are not exempt but
35
subject to federal jurisdiction has an immediate and
practical effect on Hawkes’ use of the Property,
requiring federal approval to proceed; (2) the JD serves
as a warning that anyone filling the wetlands at this
site without authorization will be subject to civil and
criminal liability; (3) when unauthorized filling occurs,
the Corps can issue a cease and desist order
enforceable in court; (4) a JD which classifies specific
wetlands as subject to federal control is, indeed, the
basis for Hawkes ordering and arranging its
affairs; and (5) the JD is “not therefore abstract,
theoretical, or academic.” In its effect, the JD is
virtually indistinguishable from the Commission’s
determination in Frozen Food Express that this Court
found final and reviewable.
The only response the Corps offers to Frozen Food
Express is that the ICC order in that case involved a
rule of general applicability whereas this case does not.
But, as the Eighth Circuit held below, the “JD is a
determination regarding a specific property that has
an even stronger coercive effect than the order deemed
final in Frozen Food Express, which was not directed at
any particular carrier.” Pet. App. at 12a. In Abbott
Labs., this Court described the case this way:
Although the dissenting opinion noted that
this ICC order had no authority except to give
notice of how the Commission interpreted the
Act and would have effect only if and when a
particular action was brought against a
particular carrier, and argued that “judicial
intervention (should) be withheld until
administrative action has _ reached its
complete development,” 351 U.S., at 45, 76
36
S.Ct. at 572, the Court held the order
reviewable.
Abbott Labs., 387 U.S. at 150.
For the same reasons, the JD should be reviewable
here.
Chicago and Southern Air Lines, Inc. v. Waterman
Steamship Corp., 333 U.S. 103 (1948), is another case
relied on in Bennett. Chicago held that administrative
determinations are reviewable if they “impose an
obligation, deny a right or fix some legal relationship
as a consummation of the administrative process.” Id.
at 113.
In this case, by reason of the Jurisdictional
Determination, Hawkes is obliged to obtain a section
404 permit from the Corps if it wishes to proceed with
its peat harvesting project. This obligation was only
inchoate before the JD was issued. The Clean Water
Act only requires a permit for discharges to “navigable
waters” generally, which Hawkes can show do not exist
on the Property. In contrast, the JD is an actual
adjudicative decision requiring a federal permit for
discharges on this specific property. It is a
quintessential application of the law to the facts of the
case. For the first time, this obligation is now final and
conclusive; thereby denying Hawkes its legal right to
proceed with the peat harvesting project without
federal approval.
In addition to these cases, the Eighth Circuit
relied on Abbott Labs. in which this Court held
prescription drug labeling regulations were subject to
pre-enforcement review as final agency action, because
the regulations “purport to give an authoritative
interpretation of a statutory provision” that puts drug
37
companies in the quandary of either incurring massive
compliance costs or risking civil and criminal sanctions
for distributing misbranded drugs. The Eighth Circuit
found Abbott Labs. analogous to this case because the
JD puts Hawkes in a similar quandary. In light of the
JD, Hawkes must either “incur substantial compliance
costs (the permitting process), forego what they assert
is lawful use of their property, or risk substantial
penalties.” Pet. App. at 11a.
Finally, the Eighth Circuit relied on Columbia
Broadcasting System v. United States, 316 U.S. 407
(1942), for the proposition that final agency action
need not be self-executing, like the JD in this case.
Pet. App. at 12a-13a. “Though the Revised JD is
not-self-executing, ‘the APA provides for judicial review
of all final agency actions, not just those that impose a
self-executing sanction.” /d. at 13a (citing Sackett, 132
S. Ct. at 1373). Under this Court’s precedents, the
Jurisdictional Determination here has al! the
hallmarks of final agency action.
H. The Approved Jurisdictional
Determination Has “Independent”
Legal Consequences
If this Court decides, contrary to Supreme Court
precedent, to accept the Corps’ argument that the
second Bennett prong requires final agency action to
have independent legal consequences, this Court
should take into account the facts of this case. The
facts show the Corps did not carry its burden of
demonstrating a “significant nexus” between the
Hawkes property and the Red River of the North 120
miles away.
38
This is a 12(b)(6) dismissal case wherein the facts
are taken as asserted, as the Eighth Circuit did below.
See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (In a
motion to dismiss, “a court must accept a complaint’s
allegations as true.”).
The JD is based on the Corps’ unsupported
conclusion that the Property meets the “significant
nexus’ test proffered by Justice Kennedy in Rapanos.
JA at 18-19. That test requires the Corps to show the
Property has a significant impact on a Traditional
Navigable Water. Rapanos, 547 U.S. at 780 (Kennedy,
J., concurring). However, as alleged in the complaint,
on appeal the Review Officer found: “the District states
that indicators of the transport of energy, materials,
and nutrients were observed during a site visit, but
there is no quantitative [data] given to support the
finding.” JA at 48. The record “does not provide
sufficient evidence to establish a significant nexus that
the number of flow events, volume, duration, and
frequency of water flowing through the tributary are
such that it has an appreciable effect on the TNW
[Traditional Navigable Water].” JA at 52-53. And, “the
water flow regime information was not sufficient to
indicate that a significant nexus exists.” JA at 54.
Nevertheless, on remand, the District Engineer issued
the Approved JD without providing the missing data.
On these facts, the Corps should have issued a
negative JD, finding no jurisdictional “waters of the
United States” on Hawkes’ property. Therefore, the
permit requirement for Hawkes’ peat harvesting
project flows from the JD, not the Clean Water Act.
But for the JD, Hawkes would be free to exercise its
right to harvest the Property without federal approval.
39
The JD changed the legal regime and is final agency
action under the APA.
II
THERE IS NO
ADEQUATE REMEDY IN COURT
“Final” agency action is judicially reviewable
under the APA if there is “no other adequate remedy
in a court.” 5 U.S.C. § 704. There is no such remedy
for an Approved Jurisdictional Determination.
The alternative of seeking a permit first or
risking an enforcement action is not adequate. To
the contrary, these approaches are prohibitive,
wasteful, unnecessary, insupportable, and likely
unconstitutional.
A. The Cost of Seeking a Permit
Prior to Judicial Review of
an Approved Jurisdictional
Determination Is Prohibitive
In Rapanos, this Court relied on the Sunding
Report that estimated the average cost of seeking an
individual permit (like that required here) at more
than $270,000 and two years to process. The report
estimated that even a nationwide permit would cost
almost $29,000 and take almost a year to process. See
Rapanos, 547 U.S. at 721.
The Corps quibbles with Sunding’s data but offers
no better. The Corps admits it has no formal reporting
data on permit costs—either for nationwide or
individual permits. Pet. Opening Brief at 48. Instead,
the Corps relies on anecdotal evidence of sample
projects or ad hoc interviews. Id. 48-49. The Corps’
2001 study on the cost of individual permits
40
inexplicably “excluded projects affecting more than
three acres.” Pet. Opening Brief at 49. This would
necessarily skew the data to show a lower than
average cost for such permits. The Corps data is more
unreliable than the Sunding data, giving the Court
every reason to take the Sunding estimates at face
value.
Also, the Corps puts great weight on the fact that
most permits are of the general or nationwide variety
that cost much less than an individual permit. Id. at
48-49. But the Corps ignores the fact that an
individual permit is required in this case. This is
undisputed. Hawkes actually commenced the permit
process to harvest 150 acres of peat on the Property
but put things on hold when the Corps asked for
expensive hydrological studies (estimated at $100,000),
played up the cost and delay from a full Environmental
Impact Statement, and pointedly suggested the Corps
might never grant the individual permit after years of
study. JA at 16-19. Whatever the average cost of an
individual or nationwide permit, in this case the cost
became prohibitive, even punitive. And should Hawkes
ultimately win the case in court, after obtaining a
permit cr permit denial, Hawkes can never recover the
costs expended in the permit process. Pet. App. at 14a.
Only those who can afford to seek a permit and the
subsequent cost of litigation, which can also run into
hundreds of thousands of dollars, can ever be
vindicated. Therefore, Hawkes sought immediate
judicial review of the JD in court.
41
B. Requiring a Landowner
To Seek a Permit Prior to
Judicial Review of an Approved
Jurisdictional Determination
Is Wasteful and Unnecessary
If a landowner wishes to contest an erroneous
Jurisdictional Determination, it should be unnecessary
for the landowner to seek a permit after the
administrative appeal. The process is costly and time
consuming yet it contributes nothing to the judicial
resolution of the jurisdictional issue. The Corps admits
it will not revisit the JD during the permit process,
except in the unusual case of changed circumstances.
See Pet. Opening Brief at 28. The permit process does
not make a JD more fit for judicial review. It would
neither add any relevant facts nor clarify application of
the law. It’s a costly and pointless exercise which the
law does not abide.
Stated in various ways, the ancient maxim “lex
non cogit ad inutilia,” or “the law does not know
useless acts,” has been a fundamental tenet in Anglo-
American jurisprudence for centuries. See Seaconsar
Far Eest, Ltd. v. Bank Markazi Jomhouri Islami Iran,
[1999, i Lloyd’s Rep. 36, 39 (English Court of Appeal
1998); People ex rel. Bailey v. Greene County
Supervisors, 12 Barb. 217, 221-22 (N.Y. 1851); see also
Ohio v. Roberts, 448 U.S. 56, 74 (1980) (“The law does
not require the doing of a futile act.”); Cary v. Curtis,
44 US. (3 How.) 236, 246 (1845) (“[T]he law never
requires a vain act.”); and Stevens v. United States,
2 Ct. Cl. 95, 100 (1866) (“[T}he law does not require the
performance of a useless act.”).
The Corps seeks to impose a useless permit
requirement on landowners to delay or avoid its
42
untested claims of jurisdiction which are often wildly
broad and unpredictable. This is because “the
definitions used to make jurisdictional determinations’
are deliberately left ‘vague.” Rapanos, 547 U.S. at 727
(citing U.S. General Accounting Office, Waters and
Wetlands: Corps of Engineers Needs to Evaluate Its
District Office Practices in Determining Jurisdiction 3
(Feb. 2004)).
There is no regulatory or statutory provision that
requires Hawkes to seek a permit that has nothing to
do with the underlying jurisdictional challenge, to
obtain APA review. To the contrary, a JD, standing
alone, is as fit for judicial review as any permit
decision. See 33 C.F.R. § 320. 1(a)(6) (“A [jurisdictional]
determination pursuant to this authorization shall
constitute a Corps final agency action.”). Corps
regulations acknowledge the JD as a_ separate,
adjudicatory action on a par with a permit decision.
They even provide for identical administrative appeal
procedures as a predicate for judicial review. See 33
C.F.R. § 320.1(a)(2) (“A district engineer’s decision on
an approved jurisdictional determination, a permit
denial, or a declined individual permit is subject to an
administrative appeal by the affected party in
accordance with the procedures and authorities
contained in 33 C.F.R. Part 331. An affected party
must exhaust any administrative appeal available
pursuant to 33 C.F.R. Part 331 and receive a final
Corps decision on the appealed action prior to filing a
lawsuit in the Federal courts (see 33 C.F.R. 331.12).”).
It would be perverse, therefore, to require a
landowner to go through the costly and time-
consuming process of obtaining a JD and
administrative appeal, then require the landowner to
43
run the gauntlet of a costly and time-consuming
process of seeking a permit and another administrative
appeal that has nothing to do with the question of
jurisdiction. This approach is unnecessary and
undermines the presumption of reviewability.
Moreover, rather than preserve private and
judicial resources, the permit requirement squanders
resources. First, it requires a costly and lengthy
process that adds nothing to the case. This drains both
private and agency resources to no beneficia! end.
Second, if a court ultimately decides a permit was not
required, neither the landowner nor the Corps can
recover the costs expended in processing an
unnecessary permit. Pet. App. at 14a. Third, the issues
surrounding a permit, such as mitigation, timing,
restoration, etc., are all issues that are irrelevant to
the jurisdictional question and are more likely to
complicate rather than expedite the case. And fourth,
the permit requirement defies commonsense. Why is it
necessary to seek a permit to determine whether a
permit was required in the first place? As Judge Kelly
noted in her concurrence below, this is an odd and
circuitous route to judicial review.
Despite the[] dissimilarities with the
circumstances in Sackett, I agree that
Hawkes is left without acceptable options to
challenge the JD, absent judicial review.
Hawkes’s choice is to either (1) follow through
on their peat-mining plans until either the
EPA issues a compliance order or the Corps
commences an enforcement action, to both of
which Hawkes could raise lack of CWA
jurisdiction as a defense; or (2) apply for a
permit (on the grounds that no permit is
44
required) and, if the application is denied,
appeal the denial in court. But what happens
if Hawkes is, after all, granted a permit yet
maintains it never needed one in the first
place? It must decline the permit and
challenge the original jurisdiction in court.
This roundabout process does not seem to be
an “adequate remedy” to the alternative of
simply allowing Hawkes to bring the
jurisdictional challenge in the first instance
and to have an opportunity to show the CWA
does not apply to its land at all.
Pet. App. at 20a.
C. Requiring a Landowner To Seek
a Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Is Tantamount
to a Decision on the Merits
The obvious purpose of seeking immediate judicial
review of an Approved Jurisdictional Determination is
to avoid the unnecessary cost and delay of seeking a
permit. Given the expense and uncertainty associated
with seeking a permit, very few would have the ability
to pile on even more expense and delay in court just to
determine whether the Corps’s claim of jurisdiction
was correct. The impact on Hawkes would be severe;
expanding to the new property is essential to the
company’s future growth. JA at 14-15. A win in court
is a hollow victory if the landowner has already
endured the arduous permit process without any hope
of recouping the attendant costs. But, this is by design:
The prohibitive costs, risk, and delay of these
alternatives to immediate judicial review
45
evidence a transparently obvious litigation
strategy: by leaving appellants with no
immediate judicial review and no adequate
alternative remedy, the Corps will achieve
the result its local officers desire,
abandonment of the peat mining project,
without having to test whether its expansive
assertion of jurisdiction—rejected by one of
their own commanding officers on
administrative appeal—is consistent with the
Supreme Court’s limiting decision in
Rapanos. The Court’s decision in Sackett
reflected concern that failing to permit
immediate judicial review of assertions of
CWA jurisdiction would leave regulated
parties unable, as a practical matter, to
challenge those assertions. The Court
concluded that was contrary to the APA’s
presumption of judicial review. “[T]here is no
reason to think that the Clean Water Act was
uniquely designed to enable the strong-
arming of regulated parties into ‘voluntary
compliance’ without the opportunity for
judicial review—even judicial review of the
question whether the regulated party is
within the EPA’s jurisdiction.” 132 S. Ct. at
1374.
Pet. App at 15a-16a.
Requiring a permit before judicial review of a JD
denies Hawkes any meaningful remedy in court.
46
D. Requiring a Landowner To Seek
a Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Circumvents
the Intent of Congress
Once it is acknowledged that an agency action is
final, the only thing remaining is to ensure the
aggrieved party has an “adequate remedy in a court.”
5 U.S.C. § 704. This is not a limitation on judicial
review. Rather, it is a mandate to ensure the intent of
Congress is carried out—“[T]he APA provides for
judicial review of all final agency actions.” Sackett, 132
S. Ct. at 1373. Therefore, any process imposed on the
aggrieved party must facilitate judicial review. But the
permit requirement is not such a process. It obstructs
judicial review.
The Jurisdictional Determination is valid for
five years and the Corps cannot revisit the
determination during the permit process, except in
changed circumstances. See Pet. Opening Brief at 28.
Therefore, the permit process cannot aid in resolving
the underlying dispute—whether the Hawkes property
contains “waters of the United States” subject to
federal regulation under the Clean Water Act. Its sole
purpose is to delay or deter judicial review.
Imposing the permit requirement on Hawkes
allows the Corps, rather than Hawkes, to set the time
for judicial review, contrary to congressional intent.
The Corps can use the permit process to delay or avoid
judicial review of a permit decision, and hence the
jurisdictional question, indefinitely. The Corps can
declare the permit application incomplete, or fail to
process the application in a timely manner, or even
refuse to issue a permit decision at all so as to avoid
47
judicial review of its jurisdictional decisions. By that
means, the Corps can wear down the applicant so the
applicant must accede to all Corps demands or walk
away from the project at great loss.
This Court found the option of waiting on an
enforcement action inadequate as a remedy in the
Sackett case in part because of the landowners’
inability to initiate judicial review. See Sackett, 132 S.
Ct. at 1372. The same reasoning applies here. The pace
of the permit process is dictated by the Corps.
To illustrate, in Moore v. United States, 943 F
Supp. 603 (E.D. Va. 1996), taxpayers sought a refund
of taxes paid to the Internal Revenue Service, arguing
they could claim as a loss the involuntary conversion of
some of their investment property (called “the Boy
Scout Tract”) as a result of the land being reclassified
as wetlands. Jd. at 607. Though the Moores had not
tried to obtain a section 404 permit, they argued the
denial of a permit should not be a prerequisite to their
claim, because seeking a permit would have been
futile. As reported by the Court, several experienced
individuals, including Bernard Goode, an
environmental consultant that had been a Corps
employee for 34 years, testified on the Moores’ behalf:
When asked for his opinion concerning the
likelihood that [an individual] § 404 permit
would be issued for the Boy Scout Tract,
Goode testified: “It is my opinion that there
was a very low likelihood that this project
would have been approved.” When asked
about the likelihood that a § 404 permit for
the Boy Scout Tract would have been
formally denied, Goode testified:
48
“It has been my experience in studying this
very issue nationwide that there was a very
low likelihood that the Corps would have
denied the application. Because the Corps
can’t reach that point until they have gone
through the full analysis, which includes the
mitigation sequencing.
“And it is a much more likely outcome that
more and more information is requested until
eventually the applicant loses staying power
and either withdraws the application himself,
or the Corps says because of the lack of
information to continue the valuation, the
Corps withdraws the application.
“And that is the outcome of well over half of
the 404 applications.
“Here in the Norfolk district I looked at some
statistics and there is [sic] over 3/4 of the
cases [that] end up being withdrawn for
section 404 permit applications. Only one
percent end up being denied.”
Goode’s testimony on this latter point was
corroborated by the Moores’ other two expert
witnesses. Robert Kerr (“Kerr”), an
environmental consultant with experience in
over sixty (60) § 404 permit applications,
testified:
“We advised the [Moores] that there was no
chance of getting a permit.
“We also told Mr. Moore [the Corps] would
never reject the permit.
49
“Because rejecting a permit could set a
precedent also. And as the government’s
attorney stated, you have to have a permit
denial to go for a taking.
“Well, the Corps knows that and will not
issue a denial, an open denial. They will just
request additional information, and more
additional information, and the more you give
them the more they ask for They
basically bleed a client to death financially
until you have spent so much money on the
alternatives analysis you've drained the
profitability out of the project.”
Doug Davis (“Davis”), an environmental
consultant who at one time worked in the
Corps’ wetlands program, testified that the
likelihood of a permit being issued for the Boy
Scout Tract was “as close to zero as it can
get,” and that a permit would not have been
finally denied because projects like that
contemplated for the Boy Scout Tract “just
sort of wither on the vine and no final agency
action is taken.” In addition, both Kerr and
Davis testified that completing the § 404
permit process in this case would have been
a very lengthy and expensive proposition,
costing hundreds of thousands of dollars.
Id. at 612 (citations omitted).
This excerpt demonstrates the remarkable
leverage the Corps has over CWA permit applicants.
With very little risk to the agency, the Corps can
scuttle a project with dilatory practices or condition
approval on extraordinary demands.
50
The inability of a landowner to seek judicial
review of an Approved Jurisdictional Determination
shields the Corps from suit and allows the agency to
exercise plenary authority over disputed waters with
impunity. The APA should not be read to allow such a
blatant subversion of the law. This is not an adequate
remedy in court.
E. Requiring a Landowner To Seek
a Permit Prior to Judicial Review
of an Approved Jurisdictional
Determination Undermines the
Presumption of Reviewability
In Bowen v. Michigan Academy of Family
Physicians, 476 U.S. 667, 670 (1986), this Court
discussed the legislative and common law history of
the APA and concluded the Act is animated by “the
strong presumption that Congress intends judicial
review of administrative action.” That presumption,
ignored by the Corps, dictates that statutory
limitations on judicial review of agency action should
be interpreted narrowly. See id. (“[J]udicial review of
a final agency action by an aggrieved person shall not
be cut off unless there is persuasive reason to believe
that such was the purpose of Congress.” (quoting
Abbott Labs., 387 U.S. at 140)). This strong
presumption requires “that ‘only upon a showing of
“clear and convincing evidence” of a _ contrary
legislative intent should the courts restrict access to
judicial review [of administrative action].” Jd. at 671
(quoting Abbott Labs., 387 U.S. at 141). But the Corps
has provided no such evidence.
The Corps’ argument that Congress intended the
permit process to provide the sole means of access to
the Courts for review of JD’s has no support in the law.
51
Neither the CWA nor its implementing regulations
show “clear and convincing evidence” that Congress
intended judicial review of administrative decisions
only after completion of the permit process. See
Sackett, 132 S. Ct. at 1372 (“Nothing in the Clean
Water Act expressly precludes judicial review under
the APA or otherwise.”).
In Sackett, this Court rejected EPA arguments
that the Clean Water Act was intended to preclude
review of nonpermit decisions. The EPA argued
judicial review of compliance orders would undermine
the Clean Water Act because such orders serve an
informational purpose and are designed to encourage
voluntary compliance and avoid judicial proceedings.
Id. at 1372. The Corps says the same for Jurisdictional
Determinations here. Pet. Opening Brief at 20. But
this Court held, “It is entirely consistent with this
function to allow judicial review when the recipient
does not choose ‘voluntary compliance.” Sackett, 1325S.
Ct. at 1373. “The Act does not guarantee the EPA that
issuing a compliance order will always be the most
effective choice.” Jd.
The EPA also argued the compliance order was
not reviewable under the APA because the order was
not self-executing. However, this Court rejected the
argument outright observing “the APA provides for
judicial] review of all final agency actions, not just those
that impose [] self-executing sanction[s].” Jd. This is
consistent with this Court’s application of the APA in
other cases, such as Abbott Labs., Bennett, Port of
Boston, and Frozen Food Express discussed above.
Finally, the EPA warned in Sackett it was less
likely to use compliance orders if they are subject to
immediate judicial review. This Court did not consider
52
that rationale a reason to preclude judicial review of
compliance orders. Jd. To the contrary, the Court
explained, “That may be true—but it will be true for all
agency actions subjected to judicial review.” Jd. at
1374. And, indeed, the Corps makes this same claim
for Jurisdictional Determinations here. See Pet.
Opening Brief at 37. But this Court held the
presumption of reviewability trumps such concerns:
The APA’s presumption of judicial review is a
repudiation of the principle that efficiency of
regulation conquers all. And there is no
reason to think that the Clean Water Act was
uniquely designed to enable the strong-
arming of regulated parties into “voluntary
compliance” without the opportunity for
judicial review—even judicial review of the
question whether the regulated party is
within the EPA’s jurisdiction. Compliance
orders will remain an effective means of
securing prompt voluntary compliance in
those many cases where there is no
substantial basis to question their validity.
Sackett, 132 S. Ct. at 1374.
That conclusion applies equally to Jurisdictional
Determinations. According to the agency, the “Corps
issues tens of thousands of approved jurisdictional
determinations every year. [However] in fiscal
year 2015, interested parties filed [only] eight
administrative appeals of approved jurisdictional
determinations issued outside of the permitting
process.” Pet. Opening Brief at 5-6.
53
The dearth of appeals does not indicate a lack of
need for judicial review; rather, it demonstrates that
opening the courthouse doors to judicial review of
JDs will not undermine the Corps program in that
few landowners challenge the Corps’ decisions.
Curtailment of the JD program is unlikely and would
be counterproductive. It is the Corps that has the most
to gain by continuing the JD program, even if JD’s are
subject to immediate judicial review. Statistically, all
but a few recipients (i.e., eight in 2015) defer to the
agency's determination on jurisdiction. This allows the
Corps to implement the Clean Water Act with wide
discretion without pursuing tens of thousands of
enforcement actions that would result from curtailing
or eliminating JDs. Therefore, providing judicial
review of JDs will not deter Corps reliance on
Jurisdictional Determinations, but it would potentially
bring justice to those who have a legitimate grievance
with the Corps over the scope of federal authority
under the Clean Water Act.
The Clean Water Act does not “preclude judicial
review” under the APA, 5 U.S.C. § 701(a)(1). The APA
creates a “presumption favoring judicial review of
administrative action.” Block v. Community Nutrition
Institute, 467 U.S. at 349. While this presumption
“may be overcome by inferences of intent drawn from
the statutory scheme as a whole,” id., the Corps’
arguments do not support an inference that the Clean
Water Act’s statutory scheme precludes APA review.
F. An Enforcement Action Is Not
An Adequate Remedy in Court
The Corps argues Hawkes has an adequate
remedy in court because Hawkes can proceed with the
project without federal approval and precipitate an
54
enforcement action by the Corps, the EPA, or a third-
party citizen. In each case, the Corps maintains
Hawkes could seek review of the jurisdictional
question in any subsequent judicial proceeding. Pet.
Opening Brief at 50. But this is far from adequate.
In Sackett this Court rejected the idea that the
Sacketts could seek judicial review in an enforcement
proceeding because they “[could not] initiate that
process, and each day they wait for the agency to drop
the hammer, they accrue, by the Government’s telling,
an additional $75,000 in potential liability,” not to
mention criminal sanctions. Sackett, 132S. Ct. at 1372.
The situation in this case is no better. If Hawkes
proceeds with the peat harvesting project without a
permit, Hawkes has no control over the timing or
nature of the ensuing enforcement action. In Sackett,
EPA officials issued a verbal cease and desist order but
left the Sacketts hanging for more than six months
before issuing a compliance order. The government
could do the same here. Likewise, there is no telling if
or when a third party may bring a citizen suit against
Hawkes. But onerous penalties would accrue from
the first day of the unauthorized discharge. An
enforcement action could be delayed for years without
judicial review, wearing down the landowner to compel
compliance.
This Court rejected such an approach in Ex parte
Young, 209 U.S. 123 (1908). In that case, this Court
considered the validity of a shipping rate increase
imposed on railroads by the state legislature. The
railroads took the position the rates were “unjust,
unreasonable, and confiscatory.” Jd. at 130. Anyone
who refused to adhere to the rate increases, including
the officers and employees of the railroads, would be
55
subjected to severe civil and criminal liability. Jd. at
130-31. But the only way to test the validity of the rate
orders was to disobey the order and risk such liability.
This Court held the order raised a_ serious
constitutional question:
But when the legislature, in an effort to
prevent any inquiry of the validity of a
particular statute, so burdens any challenge
thereof in the courts that the party affected is
necessarily constrained to submit rather than
take the chances of the penalties imposed,
then it becomes a serious question whether
the party is not deprived of the equal
protection of the laws.
Id. at 146.
This Court held: “when the remedy is so onerous
and impracticable as to substantially give none at all,
the law is invalid, although what is termed a remedy
is in fact given.” Id. at 147.
It may therefore be said that when the
pena'ties for disobedience are by fines so
enormous and imprisonment so severe as to
intimidate the company and its officers from
resorting to the courts to test the validity of
the legislation, the result is the same as if the
law in terms prohibited the company from
seeking judicial construction of laws which
deeply affect its rights.
Id.
The enormity of the penalties for violating the
Clean Water Act are well documented and may include
penalties of tens of thousands of dollars a day and
56
imprisonment, with heightened sanctions for knowing
violations. See 33 U.S.C. § 1319. Thus, under Ex parte
Young, triggering an enforcement action to challenge
the validity of a Jurisdictional Determination raises a
constitutional question and is not an adequate remedy
in court. Moreover, because the requirement to seek
an individual permit in this case would itself be
“unjust, unreasonable, and confiscatory,” even that
requirement would raise a constitutional question and
fail to provide an adequate remedy in court.
G. The APA Should Be Interpreted
To Avoid Constitutional Questions
In addition to the constitutional questions raised
above under Ex parte Young, it should be observed that
in Kent Recycling Services v. U.S. Army Corps of
Engineers (14-493), now pending in this Court, the
petitioner raised a due process challenge to the
Jurisdictional Determination on facts nearly identical
to the facts in this case. In that case, as in this case,
the Corps issued a final Approved Jurisdictional
Determination without correcting the deficiencies
identified by the Corps Review Officer on
administrative appeal. Kent Recycling Pet. at 9. The
Approved JD was demonstrably invalid and its
issuance deprived the landowner of the right to use its
property without a fair hearing. See Lassiter v. Dep’t of
Social Services, 452 U.S. 18, 24 (1981) (“[D]ue process
has never been, and perhaps can never be, precisely
defined. [But] the phrase expresses the
requirement of ‘fundamental fairness.”). Although
Hawkes did not raise a due process challenge to the JD
in this case, the case does give rise to such a claim. In
fact, there are a number of circumstances in this case
that raise constitutional questions:
57
First, the amended complaint alleges the final
Approved Jurisdictional Determination was issued on
remand without correcting the deficiencies the Corps
Review Officer documented on administrative appeal.
Hawkes was deprived of an impartial] hearing.
Second, as the Eighth Circuit observed: “the
Amended Complaint alleged that the Corps’ District
representative repeatedly made it clear to Kevin
Pierce, to a Hawkes employee, and to the landowner
that a permit to mine peat would ultimately be
refused.” Pet. App. at 14a. On these facts, it would be
futile to impose a permit requirement on Hawkes to
“ripen” the case for judicial review.
Third, the documented cost (in money and delay)
of an individual permit is prohibitive and punitive,
perhaps beyond the reach of Hawkes. If a permit is
required for judicial review under the APA, that cost
and delay could never be recovered. Pet. App. at 14a.
Fourth, the permit requirement does not and
cannot advance the case because the Jurisdictional
Determination is conclusive as to jurisdiction. The
permit process serves no meaningful purpose; it is
an arbitrary barrier to timely redress in court. See
Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (“The
fundamental requirement of due process is the
opportunity to be heard ‘at a meaningful time and ina
meaningful manner.”) (citing Armstrong v. Manzo, 380
U.S. 545, 552 (1965)).
And fifth, the permit requirement is inconsistent
with the plain language of the APA and Corps
regulations that say the JD is final agency action. See
33 C.F.R. §§ 320.1; 329.3.
58
In Clark v. Martinez, 543 U.S. 371, 380-81 (2005),
this Court cited the constitutional avoidance canon for
the proposition that “when deciding which of two
plausible statutory constructions to adopt, a court
must consider the necessary consequences of its choice.
If one of them would raise a multitude of constitutional
problems, the other should prevail.” According to this
Court, “one of the canon’s chief justifications is that it
allows courts to avoid the decision of constitutional
questions. It is a tool for chcuosing between competing
plausible interpretations of a statutory text, resting on
the reasonable presumption that Congress did not
intend the alternative which raises. serious
constitutional doubts.” Jd. at 381. And further, “[t]he
canon is thus a means of giving effect to congressional
intent, not of subverting it.” Id. at 382.
In this case, this Court must choose between the
implausible interpretation that the APA requires an
aggrieved party to obtain a costly and needless permit
as a predicate for judicial review, on the one hand, and
immediate judicial review of a binding, site-specific
adjudicative Jurisdictional Determination, on the
other. The former raises a multitude of constitutional
questions. The latter reinforces the purpose and intent
of Congress—“the strong presumption that Congress
intends judicial review of administrative action.”
Bowen, 476 U.S. at 670.
CONCLUSION
Landowners should have the right to challenge
agency overreaching in court, especially a contested
“threshold determination that puts the administrative
process in motion.” Pet. App. at 20a (Kelly, J.,
concurring). The only practical way for that to happen
is through immediate judicial review of Approved
59
Jurisdictional Determinations under the APA. A JD
has all the hallmarks of final agency action, but a
landowner has no adequate remedy in court. See 5
U.S.C. § 704.
This Court should therefore sustain the Eighth
Circuit decision below.
DATED: February, 2016.
Respectfully submitted,
NANCY QUATTLEBAUM BURKE M. REED HOPPER
GREGORY R. MERTZ Counsel of Record
Of Counsel Pacific Legal Foundation
Gray Plant Mooty 930 G Street
500 IDS Center Sacramento, CA 95814
80 South Eighth Street Telephone: (916) 419-7111
Minneapolis, MN 55402 Facsimile: (916) 419-7747
Telephone: (612) 632-3029 mrh@pacificlegal.org
MARK MILLER
Pacific Legal Foundation
8645 N. Military Trail, Ste. 511
Palm Beach Gardens, FL 33410
Telephone: (561) 691-5000
mm@pacificlegal.org
Counsel for Respondents
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