Amicus Curiae Brief — U.S. Army Corp of Eng'rs v. Hawkes Co., 136 S. Ct. 615 (2015) (No. 15-290)
Supreme Court brief2015
Ask Donna
What actually matters in this document.
Text
No. 15-290
In The
Supreme Court of the Gnited 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 OF AMICI CURIAE
THE NATIONAL ASSOCIATION OF HOME
BUILDERS AND NATIONAL ASSOCIATION OF
REALTORS® IN SUPPORT OF RESPONDENTS
RALPH HOLMEN THOMAS J. WARD*
NATIONAL ASSOCIATION JEFFREY B. AUGELLO
OF REALTORS NATIONAL ASSOCIATION
430 N. Michigan Ave. OF HOME BUILDERS
Chicago, IL 60611-4087 1201 15th Street, N.W
Washington, D.C. 20005
(202) 266-8200
tward@nahb.org
* Counsel of Record
SERN enter ete
i
TABLE OF CONTENTS
Page(s)
pe FR Gt Be). |, , Sennen ann ene nT. 1
TABLE OF AUTHORITIES ......................0...0..... ill
TABLE OF APPENDICES ....................c.cccscceeees xll
INTEREST OF AMICI CURIAE ........................- 1
SUMMARY OF ARGUMENT ............................... 4
SITET wissniiinisinintciensiiecssaniasnabbaiiaiiadmamiecnn aan 5
I. THE APA’S JUDICIAL REVIEW SECTION
MUST NOT BE CONSTRAINED.................. 5
II. REGULATIONS, POLICIES, AND COURT
DECISIONS ESTABLISH THAT CWA
JURISDICTIONAL DETERMINATIONS
ARE REVIEWABLE.....................:::cccccseeeeeeees 8
A. The Corps’s Regulations and Policies
DUETS GRID ccessscerivecrintuiiciniaananiin 8
B. Rivers and Harbors Act Jurisdictional
Determinations are Judicially
SII ccccesvcsiiviiineencsepenitaiiiiiapibameeee 12
ll
TABLE OF CONTENTS (cont.)
Page(s)
Ill. A CWA JURISDICTIONAL
DETERMINATION HAS MANY
CONSEQUENCES BEYOND THE
CORPS’S PERMIT PROCESS ................... 15
A. The Value of Real Property is Impacted by
a Jurisdictional Determination .............. 15
B. Some States Require Real Property
Owners to Disclose the Presence of
ES ETE TR 21
C. Housing Grant and Assistance Programs
are Affected by Jurisdictional
ET 24
D. The Recipient of a Jurisdictional
Determination is Subject to Additional
Se 26
1. Jurisdictional Determinations
Impact the Amount of Civil Penalties
ES 27
2. Jurisdictional Determinations
Impact the Amount of Administrative
Penalties the Agencies Assess.................. 30
E. Jurisdictional Determinations Control
Where Landowners Have a Right to
ill
TABLE OF AUTHORITIES
Page(s)
Cases
Abbott Labs. v. Gardner, 387 U.S. 136 (1967) .... 4, 5
Bennett v. Spear, 520 U.S. 154 (1997)............ passim
Bowen v. Massachusetts, 487 U.S. 879 (1988) .... 6, 7
Califano v. Sanders, 430 U.S. 99 (1977) ................. 5
Catskill Mountains Chapter of Trout Unlimited,
Inc. v. City of New York, 244 F Supp.2d
5 ERE Se 28
Cincinnati Soap Co. v. United States,
re 7
Dept. of Transp. v. La Salle Nat'l Bank,
251 Ill. App.3d 901 (1993)................ccsccecseeees 16, 21
General Elec. Co. v. E.P.A., 290 F.3d 377
SERRE: TAO AS ER ed 10-11
Hawaii's Thousand Friends v. City & County
of Honolulu, 821 F Supp. 1368
a 28
Japan Whaling Ass'n v. Am. Cetacean Soc’y,
a lll 5
Leslie Salt Co. v Froehlke, 578 F.2d 742
ARE erate eee a A en ew oe 14
1V
TABLE OF AUTHORITIES (cont.)
Page(s)
Loretto v. Teleprompter Manhattan CATV Corp.,
I itl 34
Loving v. Alexander, 548 F Supp 1079
(W.D. Va. 1982), aff'd, 745 F.2d 861
I 14
Lykes Bros., Inc v. U.S. Army Corps of Engrs,
64 F.3d 630 (Lith Cir. 1995)..................ccccccscceees 13
Lykes Bros., Inc v. U.S. Army Corps of Eng’rs,
821 F Supp 1457 (M.D. Fla. 19993)..................... 13
McLouth Steel Products Corp. v. Thomas,
838 F.2d 1317 (D.C. Cir. 1968) ...............c0cccccceees 11
Miami Valley Conservancy Dist. v. Alexander,
692 F.2d 447 (6th Cir. 1982)...................c000eceeeees 14
Minnehaha Creek Watershed Dist. v. Hoffman,
597 F.3d 617 (Oth Cir. 1979).....................ccceceeees 14
Normandy Corp. v. S.C. Dept. of Transp.,
386 S.C. 393, S.E. 2d 136 (S.C. Ct. App. 2009),
cert. denied (Mar. 2, 2011) ................cccccceeeeeee 19, 20
Rapanos v. United States, 547 U.S. 715 (2006) .... 17
Roberts v. United States, 445 U.S. 552 (1980) ........ 7
Shaughnessy v. Pedreiro, 349 U.S. 48 (1955).......... 6
Vv
TABLE OF AUTHORITIES (cont.)
Page(s)
Solid Waste Agency of N. Cook Cty. v. U.S. Army
Corps of Eng’rs, 531 U.S. 159 (2001).................. 12
Swanson v. United States, 789 F.2d 1368
I caliente 12
United States of America v. 48.86 Acres of Land,
2001 WL 474410 (E.D. Pa. April 30, 2001) ...20, 21
United States v. Avatar Holdings, Inc.,
No. 93-281-CIV-FTM-21, 1996, WL 479533
8 fe ere 28
United States v. C.E. Harrell, 926 F.2d 1036
I 13
United States v. Craft, 535 U.S. 274 (2002)..... 33-34
United States v. General Motors Corp.,
323 U.S. 373, 65 S.Ct. 357 (1945)........................ 34
United States v. Smithfield Foods, Inc.,
191 F.3d 516 (4th Cir. 1991), cert. denied,
| TICS IESE AT aS aT 29
United States v. Smithfield Foods, Inc.,
ee hs Ci IT ciccincncercinncenteiiisiatinensenncdtonatiis 29
United States v. Twin City Power Co.,
STE ee 19
United States v. Woods, 134 S. Ct. 557 (2013)........ 6
vl
TABLE OF AUTHORITIES (cont.)
Page(s)
United States ex rel. and for Use of Tennessee
Valley Auth. v. Powelson, 319 U.S. 266 (1943) .. 19
STATUTORY AND REGULATORY
PROVISIONS
5 U.S.C. § 704........ | LOTR 5, 13, 34
Rivers and Harbors Act of 1899,
er aicaichsioniincieneieiestintassduiineieindnianioteniedil 8, 12
ee CE cecinitentcinniontcnncinsnsninsienidiniamecenntiiis 30
ee ae GID cnintttrnnncenecusstennvedionntieinnetnbtundsniats 27
I tT citsthcnvtniccianinetadsnnsiitiniabinasmnlennimniiettl 30
ee ae I inierncicerecnenintetaninidinnsnnipneannnsatsinies 30
ts Oe SE ticnsiecnousencanintinediistinsiniminssesienntenseonneiitia 33
ee EE hcriniiciaichsioreniinicicineesieintiintarseneianindnetinianed 33
Be ED vinisitncnsennciincimntniiodincicinninctiieiniel 25
re I itietrincniitninecinincemaiticnenpionimtencinianei 25
ry te EE scsirctiecccnecnnnsincniiiineisnicunienmaiaitein 25
ne Oe ccchteircsititiiedineciieiadiennisidemmpiiminiannanadti 25
8 8 | eee 8,11, 12
ee eee ee cttcsccnsntonpinccecestmennnnineiniini 12
vill
TABLE OF AUTHORITIES (cont.)
Page(s)
ET ee ee A TN 29
33 C.F.R. § 328.3(a).................. nibcasenaiiahioammensiiadied 2, 33
oe ee 12-13
ee cciicsdiinipnideniignmsenententnanainicenediul passim
ne ae EN iceiitctinenicincesitinsicipinrssniaiinesiniiaaitniiainiaiabai 2
40 C.F.R. § 19.4 (Dec. 6, 2013)......................0... 27 30
re a csisciinbaninsniephesenidisehatineintahilttdeinietanunainaninanbiini 2
Final Rule for Regulatory Programs of the Corps
of Engineers, 51 Fed. Reg. 41206 (1986).............. 8
Property Condition Disclosure Act,
NY Real Prop. Law § 460........................00000 22, 23
Haw. Rev. Stat. Ann. § 508D-1...................000.ee 23
ene Ms STE rcsininsininteitnicishintsnerietininidenniiaieiniiebiiiaion 22
ETRE ene ene 22
Or. Rev. Stat. § 105.464..................... saatieladiisliasiseadian 23
is hs BRI Or CIID occnconccissvccccsaccnsnneocesnnons 23
R.I. Gen. Laws § 5-20.8-2(b)(2)(xxvili) .................. 23
is ese I ceccnecenennneenirenntninsitaapnntniieinie 23-24
vill
TABLE OF AUTHORITIES (cont.)
Page(s)
OTHER
4 Julius L. Sackman, Nichol’s The Law of Eminent
Domain (Rev. 3d ed. 1990) § 12 B.12................
William Bunkley & Charles P Edmunds,
Appraising Wetlands, Appraisal
a EE a re Ee a
Randall S. Guttery, Stephen L. Poe & C.F
Sirmans, Federal Wetlands Regulation:
Restrictions on the Nationwide Permit
Program and the Implications for
Residential Property Owners, 37 Am.
Business Law J. 2 (2000) ...................cccecceeeeeeees
Randall S. Guttery, Stephen L. Poe & C.F
Sirmans, An Empirical Investigation of
Federal Wetlands Regulation and Flood
Delineation: Implications for Residential
Property Owners, 26 J. Real Estate Research,
BS IEE ccciniscsinecnintnensinntasecinciniicsediinincnninereicsine
Katherine A. Kiel, Environmental Regulations
and the Housing Market: A Review of the
Literature in 8 Cityscape: A Journal of
Policy Development and Research,
SN Te SIE tecnecncecnveseenivennenssenseineninpersncencescunneens
19
1X
TABLE OF AUTHORITIES (cont.)
Page(s)
D. Linda Kone, Land Development (Home Builder
Press, National Association of Home Builders,
Donald T. Morrison, Highest and Best Use of
Property Taken Under Eminent Domain,
19 Am. Jur. Proof of Facts 3d 613 § 5 (West,
Westlaw Feb. 2016) (1993).................c cece cece cece. 16
Margaret N. Strand, Wetlands: Avoiding the
Swamp Monster, in Environmental Aspects of
Real Estate Transactions, in Brownfields to
Green Buildings 720 (James B. Witkin 2nd ed..,
STITT distthitelldicaibehnbuintaeelbeicadecdaanadatiaiaeabiigliinedandiidededins 17
Heather Taylor, Cost of Constructing A Home,
Special Studies (Jan. 2, 2014), available at
http://www.nahbclassic.org/generic.aspx?section
ID=734&genericContentID=221388&
a ea lieidiinleiininpteneeseniinnaie 2
Informational Statement for Louisiana
Residential Property Disclosure Form
(Rev. Feb. 1, 2015), available at
http://www.lrec.state.la.us/
pdf.files/forms/Residential-Property-
TEN ee Se EOD 22
x
TABLE OF AUTHORITIES (cont.)
Page(s)
Memorandum from Sylvia Lowrance, Acting Asst.
Adm'r, EPA OECA, to Waters Prot./Mgmt. Div.
of Dir. et al., Issuance of Revised CWA Section
404 Settlement Penalty Policy (Dec. 21, 2001),
avatlable at http:// www.epa.gov/sites/
production/files/documents/404pen.pdf... 27, 30-31
Regulatory Guidance Letter, U.S. Army Corps
of Eng’rs, (June 5, 2007) No. 07-01,
available at http://www.usace.army.mil/Portals/2/
docs/civilworks/RGLS/rgl07-01.pdf .................... 16
Regulatory Guidance Letter, U.S. Army Corps
of Eng’rs (June 26, 2008) No. 08-02,
available at http://www.usace.army.mil/Portals/2/
docs/civilworks/RGLS/rgl08-02.pdf ............. passim
Brief for the Petitioner, U.S. Army Corps of
Eng’rs v. Hawkes Co., Inc., No. 15-290,
2016 WL 322596 (filed Jan. 22, 2016)......... passim
Brief of Amicus Curiae the National Association
of Home Builders in Support of Petitioner,
United States Army Corps of Eng’s v.
Hawkes Co., Inc, No. 15-290
ERE ee ae RR 21
Property Condition Disclosure Statement,
NYS Dept. of State Division of Licensing
and Services (Rev. 8/06), available at
https://www.dos.ny.gov/forms/licensing/
ET ES EE ERIE cee ere ee ROE 23
xl
TABLE OF AUTHORITIES (cont.)
Page(s)
NAHB Land Development Checklist,
available at https://www.nahb.org/en/research/~/
media/887C0A886D0644248ECBAAF501CE
RESTS A SAAS Sree Hn ES Ee Al 17
xll
TABLE OF APPENDICES
Page(s)
APPENDIX A, Property Disclosure Document
for Residential Real Estate (Rev. 01.01.15)....... la
APPENDIX B, Feb. 7, 2012 U.S. Army Corps of
Eng’rs Approved Jurisdictional Determination. 4a
1
INTEREST OF AMICI CURIAE!
The National Association of Home Builders
(“NAHB”) is. a Washington, D.C.-based trade
association whose mission is to enhance the climate
for housing and the building industry. Chief among
NAHB’s goals is providing and expanding
opportunities for all people to have safe, decent, and
affordable housing. Founded in 1942, NAHB is a
federation of more than 750 state and local
associations. About one-third of NAHB’s
approximately 140,000 members are home builders
or remodelers, and they construct approximately
80% of all homes in the United States.
NAHB has been involved with litigation concerning
whether Clean Water Act jurisdictional
determinations are reviewable under the
Administrative Procedure Act. In addition, as a
representative of land developers, NAHB brings
considerable expertise to the issue before the Court.
The National Association of Realtors® (“NAR”) is a
nationwide, nonprofit professional association,
incorporated in Illinois, that represents persons
engaged in all phases of the real estate business,
including, but not limited to, brokerage, appraising,
management, and counseling. Founded in 1908,
NAR was created to promote and encourage the
: Letters of consent are on file with the Clerk. No
counsel for a party authored this brief in whole or in part, and
no counsel or party made a monetary contribution intended to
fund the preparation or submission of this brief. No person
other than amici curiae, its members, or its counsel made a
monetary contribution to its preparation or submission.
2
highest and best use of the land, to protect and
promote private ownership of real property, and to
promote the interests of its members and their
professional competence. The membership of NAR
includes 54 state and territorial Associations of
REALTORS®, approximately 1,300 local
Associations of REALTORS®, and more than 1
million REALTOR® and REALTOR ASSOCIATE®
members.
A large part of building and selling homes consists
of obtaining and preparing the land for
construction?. That land often contains “waters of
the United States,” as the federal government has
defined and interpreted that term. See 33 C.F.R. §
328.3(a); 40 C.F.R. § 122.2. Often land developers
must alter those “waters” to ensure that their
community makes the best use of the land in
accordance with local and state zoning and land use
requirements.
Unfortunately, property owners cannot simply look
at their property to determine the presence and
boundaries of “waters of the United States.” They
must hire consultants (i.e. engineers, scientists, and
regulatory and compliance specialists) who assist
the developers with the permitting process. Those
specialists will often develop a “jurisdictional
2 NAHB estimates that the cost of the “finished” lot
averages 19 percent of the sales price of a home. Heather
Taylor, Cost of Constructing A Home, Special Studies (Jan. 2,
2014), http://www.nahbclassic.org/generic.aspx?section! D=734
&genericContent!] D=221388&channell D=311 (last visited Feb.
16, 2016).
3
determination” and submit it to the U.S. Corps of
Engineers (“Corps”) for approval. It is common for
the developer’s consultants and the Corps to
disagree on the Corps’s jurisdiction. The extent to
which the Corps asserts jurisdiction over a project
will directly impact whether and how the
development proceeds, and sometimes results in a
community not being built.
Furthermore, jurisdictional determinations affect
property owners, builders and real estate brokers
involved in sales of property that contain
jurisdictional waters. The presence of jurisdictional
“waters” has a well-recognized impact on the value
of property And a number of states require the
disclosure of the presence of jurisdictional waters to
subsequent buyers. In such states, failure to make
the required disclosures can lead to liability for
misrepresentation, breach of contract, or even fraud,
as well as corresponding liability for damages or
other remedies being imposed.
Thus, the Court’s decision in this matter will have
an appreciable impact on NAHB’s and NAR’s
members.
4
SUMMARY OF ARGUMENT
The Administrative Procedure Act’s (“APA”) judicial
review provisions must be given a “hospitable”
interpretation. Abbott Labs. v. Gardner, 387 U.S.
136, 140-141 (1967). Petitioner, however, attempts to
constrain APA judicial review. and fails to explain why
the Court should disregard Corps regulations and
guidance, which clearly show that Clean Water Act
(“CWA”) “approved jurisdictional determinations” are
reviewable under the APA. 33 C.F.R. § 331.2.
Furthermore, when the federal government makes a
final determination that it has jurisdiction over
property pursuant to the CWA the impact on the
property owner extends far beyond the Corps’s
permitting process. The Petitioner fails to recognize
many of the rights impacted, obligations affected, and
legal consequences that flow from approved
jurisdictional determinations.
5
ARGUMENT
I. THE APA’S JUDICIAL REVIEW SECTION
MUST NOT BE CONSTRAINED.
The Administrative Procedure Act (“APA”) provides
for judicial review of “final agency action for which
there is no other adequate remedy in court.” 5
U.S.C. § 704. The Court has established that an
agency action is a “final agency action” if it 1)
“mark[s] the consummation of the agency’s decision
making process,” and 2) is an action “by which rights
or obligations have been determined or from which
legal consequences will flow.” Bennett v. Spear, 520
U.S. 154, 178 (1997) Gnternal quotations omitted).
Congress enacted the APA to address a wide range
of agency activities. “The legislative material
elucidating [the APA] manifests a congressional
intention that it cover a broad spectrum of
administrative actions, and this Court has echoed
that theme by noting that the [APA’s] ‘generous
review provisions must be given a ‘hospitable’
interpretation.” Furthermore, “the Court [has] held
that only upon a showing of ‘clear and convincing
evidence’ of a contrary legislative intent should the
courts restrict access to judicial review” Abbott
Labs. v. Gardner, 387 U.S. 136, 140-141 (1967)
(internal citations and footnotes omitted) (abrogated
on other grounds by Califano v. Sanders, 430 U.S.
99 (1977)); See also Japan Whaling Ass'n v. Am.
Cetacean Soc’y, 478 U.S. 221, 230 n.4 (1986)
(providing that “the rule is that the cause of action
for review of such action is available absent some
clear and convincing evidence of legislative intention
6
to preclude review.”). “A restrictive interpretation of
§ 704 would unquestionably, in the words of Justice
Black, ‘run counter to § 10 and § 12 of the
Administrative Procedure Act. Their purpose was to
remove obstacles to judicial review of agency action
under subsequently enacted statutes’ ..” Bowen v.
Massachusetts, 487 U.S. 879, 904 (1988) (quoting
Shaughnessy v. Pedreiro, 349 U.S. 48, 51 (1955)).
As evidence of the APA’s “generous review
provisions” the Bennett court specifically used the
word “or” within the second prong. “Or” is “almost
always disjunctive, that is, the words it connects are
to be given separate meanings.” United States v.
Woods, 134 S. Ct. 557, 567 (2013) (internal
quotations omitted). Thus, an agency action can
satisfy Bennett’s second prong in any one of three
distinct ways. It can determine “rights,” it can
determine “obligations,” or it can be an action from
which “legal consequences will flow.” Each of these
must have “separate meanings.” Id.
The Petitioner correctly concludes that a
jurisdictional determination? marks the
consummation of its decision making process,
thereby satisfying Bennett’s first prong. Brief for the
Petitioner, U.S. Army Corps of Eng’rs v. Hawkes Co.,
Inc., No. 15-290, 2016 WL 322596 (2016) (“Pet’rs
Br.”) at 25-26. It, however, attempts to limit
Bennett’s second prong, thereby incorrectly
3 Unless preceded by “preliminary,” when Amici refer to
a jurisdictional determination it means an approved
jurisdictional determination. See 33 C.F.R. § 331.2.
7
concluding that the APA precludes review of
jurisdictional determinations.
Petitioner adds obstacles to Bennett’s second prong
throughout its brief by stating that an action must
determine “legal rights,” effect “legal obligations” or
“impose legal consequences.” Pet’rs Br. at 17, 24, 25,
26, 34, 35. These are not the words used in Bennett.
A legal consequence can flow from an agency action,
like a chain of causation, without that action
necessarily “imposing” said consequence. Similarly,
not all obligations are necessarily “legal” obligations.
Cf. Cincinnati Soap Co. v. United States, 301 U.S.
308, 314 (1937) (explaining that the United States
had a “moral obligation to protect, defend, and
provide for the general welfare of, the inhabitants”
of the Philippine Islands.); Roberts v. United States,
445 U.S. 552, 557-58, (1980) (discussing the “social
obligation” to report crime). By improperly adding
the limiting words “legal” to “rights” and to
“obligations,” and “impose” before “legal
consequences” the government attempts to “defeat
the [APA’s] central purpose of providing a broad
spectrum of judicial review of agency action.” Bowen
v. Massachusetts, 487 U.S. 879, 903 (1988).
Accordingly, the Court must reject Petitioner's
efforts to restrict judicial review under the APA and
should acknowledge that agency action is reviewable
unless it is clear that Congress intended otherwise.
8
Il. REGULATIONS, POLICIES, AND COURT
DECISIONS ESTABLISH THAT CWA
JURISDICTIONAL DETERMINATIONS
ARE REVIEWABLE.
The Corps’s regulations and policies, combined with
Court of Appeals decisions under the Rivers and
Harbors Act of 1899, 33 U.S.C. § 401 et seq. (“RHA”),
demonstrate that CWA jurisdictional
determinations are reviewable under the APA.
A. The Corps’s Regulations and Policies
Support Review.
The Corpss own. regulation provides’ that
jurisdictional determinations are “Corps final
agency action.” 33 C.F.R. § 320.1(a)(6). This
regulation was adopted in 1986, well after the
enactment of the APA. Its purpose was to codify the
existing practice of ensuring that when the Corps
conducts a jurisdictional determination the “public
can rely on that determination.” Final Rule for
Regulatory Programs of the Corps of Engineers, 51
Fed. Reg. 41206-01 (1986).
Similarly, Corps guidance provides confirmation of
the agency’s regulatory position. In June 2008, the
Corps issued Regulatory Guidance Letter, U.S.
Army Corps of Eng’rs (June 26, 2008) No. 08-024, on
the subject of jurisdictional determinations
(hereinafter “RGL 08-02”). In RGL 08-02, the agency
4 Available at http://www.usace.army.mil/Portals/
2/docs/civilworks/RGLS/rgl08-02.pdf (last visited February 10,
2016).
9
addresses the differences between “preliminary”
jurisdictional determinations and “approved”
jurisdictional determinations. The Corps describes
preliminary determinations as non-binding, but
describes an approved jurisdictional determination
as “an official Corps’ determination that
jurisdictional ‘waters of the United States,’ or
‘navigable waters of the United States,’ or both, are
either present or absent on a particular site.” RGL
08-02 at 1 (emphasis added). The agency’s own
description of an approved determination is thus a
far cry from “additional information that [a]
landowner may find useful _ .,” or the “agency’s non-
binding view.” Pet’rs Br. at 16, 18, 41.
Furthermore, RGL 08-02 highlights the rights,
obligations, and legal consequences that stem from
an approved jurisdictional determination:
An approved JD:
(1) constitutes the Corps’ official, written
representation that the JD’s findings
are correct;
(2) can be relied upon by a landowner,
permit applicant, or other “affected
party” (as defined at 33 C.F.R. 331.2)
who receives an approved JD for five
years (subject to certain limited
exceptions explained in RGL 05-02);
(3) can be used and relied on by the
recipient of the approved JD (absent
extraordinary circumstances, such as
10
an approved JD based on incorrect
data provided by a landowner or
consultant) if a CWA citizen’s lawsuit
is brought in the Federal Courts
against the landowner or other
“affected party,” challenging the
legitimacy of that JD or its
determinations; and
(4) can be immediately appealed through
the Corps’ administrative appeal
process set out at 33 CFR Part 331.
RGL 08-02 at 2 (emphasis added). Legal
consequences certainly flow to a landowner that
holds a jurisdictional determination when that
landowner can rely on it for five years as against the
Corps and EPA, and can use it to defend against a
CWA citizen suit.
Furthermore, RGL 08-02 demonstrates that
jurisdictional determinations obligate the Corps. In
Bennett, the Court presented the second prong of the
final agency action test in the passive voice. Bennett,
520 U.S. at 178. Therefore, it is not necessary for
the agency action to determine the rights or
obligations of the regulated party, nor must it cause
legal consequences to flow to the regulated party.
The agency action at issue may obligate the action
agency or it may cause legal consequence to flow
back to the agency
The Court of Appeals for the District of Columbia
Circuit has recognized this point. For example, in
General Elec. Co. v. E.P.A., 290 F.3d 377 (D.C. Cir.
11
2002), plaintiffs challenged an EPA guidance
document claiming that (among other things) the
Agency had not properly promulgated it under the
APA. The court explained, “it is clear that the
Guidance Document is final agency action because it
marks the consummation of the EPA’s
decisionmaking process and it determines the rights
and obligations of both applicants and the Agency.”
Id. at 380 (emphasis added).
Similarly, in McLouth Steel Products Corp. v.
Thomas, 838 F.2d 1317 (D.C. Cir. 1988) plaintiffs
brought an APA challenge against EPAs “VHS
model.” Holding that the model was _ judicially
reviewable, the D.C. Circuit explained “If a
statement denies the decisionmaker discretion in
the area of its coverage, so that he, she or they will
automatically decline to entertain challenges to the
statement's position, then the statement is binding,
and creates rights or obligations’ ..” Jd. at 1320.
Therefore, (putting aside the Corpss litigating
position), 33 C.F.R. § 320.1(a)(6) combined with RGL
08-02 demonstrate that when the Corps develops a
jurisdictional determination the Agency binds itself
for five years with respect to the precise
identification of the limits of jurisdictional waters on
a project site. RGL 08-02 at 1. Thus, if a landowner
with a jurisdictional determination seeks a permit,
the Corps does not revisit that determination. This
no doubt “creates rights or obligations.” McLouth,
838 F.2d at 1320.
12
B. Rivers and Harbors Act Jurisdictional
Determinations are Judicially
Reviewable.
Both the Corps’s rule which explains. that
jurisdictional determinations are “final agency
action,” 33 C.F.R. § 320.1(a)(6), and its definition of
“jurisdictional determination,” 33 C.F.R. § 331.2,
apply equally to the CWA and the Rivers and
Harbors Act of 1899, 33. U.S.C. § 401 et seq.
(“RHA”). Likewise, RGL 08-02 provides that
“[a]pproved jurisdictional determinations (JDs) and
preliminary JDs are tools used by the U.S. Army
Corps of Engineers (Corps) to help implement
Section 404 of the Clean Water Act (CWA) and
Sections 9 and 10 of the Rivers and Harbors Act of
1899.” RGL 08-02 at 1.
The RHA, similar to the CWA, “requires that a
permit be obtained from ... the Army Corps of
Engineers, for any activity which takes place in
navigable waters of the United States, or which
affects the navigable capacity of such waters.”
Swanson v. United States, 789 F.2d 1368, 1371 (9th
Cir. 1986)5; see Solid Waste Agency of N. Cook Cty.
v. U.S. Army Corps of Eng’rs, 531 U.S. 159, 179
(2001) (recognizing the similarities between the
CWA and RHA). Also similar to the CWA, the
jurisdiction of the RHA is limited to “navigable
waters of the United States,” 33 U.S.C. §§ 401, 407,
defined as “those waters that are subject to the ebb
5 The Corp's Rivers and Harbors Act regulations
require a permit “for structures and/or work in or affecting
navigable waters of the United States ..” 33 C.F.R. § 322.3
(2015).
13
and flow of the tide and/or are presently used, or
have been used in the past, or may be susceptible for
use to transport interstate or foreign commerce.” 33
C.F.R. § 329-4 (2015). Thus, as with the CWA, the
statutory text of the RHA establishes the limits of
the Act, and the Corps developed a regulation
interpreting that limit.
In contrast to the CWA, however, many courts have
reviewed jurisdictional determinations made
pursuant to the RHA. For example, in Lykes Bros.,
Inc. v. U.S. Army Corps of Eng’rs, 64 F.3d 630 (11th
Cir. 1995), property owners along Fisheating Creek
erected fences, felled trees, and posted “no
trespassing’ signs to keep the public from using the
Creek. Subsequently, the Corps prepared a report,
finding that Fisheating Creek was a “navigable
water of the United States” under the RHA. Lykes
Brothers “brought a civil action pursuant to 5 U.S.C.
§ 704 against the [Corps] seeking to review and set
aside the [agency’s] determination that Fisheating
Creek ... is a navigable water of the United States
.... Id. at 633 (emphasis added). Thus, the Lykes
Brothers invoked the APA to obtain judicial review
over the Corps’s action. The trial court concluded
that Fisheating Creek was not a “navigable water of
the United States.” Lykes Bros., Inc v. U.S: Army
Corps of Eng’rs, 821 F. Supp 1457, 1458 (M.D. Fila.
1993). On appeal, the Eleventh Circuit reviewed the
factual findings and found no error in the trial
court’s decision. Thus, the merits of the Corps’s RHA
jurisdictional determination were tried and
appealed - all without raising the question of
whether the Corpss jurisdictional determination
was final agency action. See also United States v.
14
C.E. Harrell, 926 F.2d 1036 (llth Cir. 1991)
(reaching the merits and overturning Corps’s
determination that Lewis Creek was a navigable
water of the United States, even though no permits
had been sought to use the waterbody and without
any question of whether the agency’s action was
final).
Similarly, in Loving v. Alexander, 548 F Supp 1079
(W.D. Va. 1982), affd, 745 F.2d 861, 863 (4th Cir.
1984) approximately 67 riparian land owners sought
a “judgment declaring that the Jackson River is
nonnavigable from the mouth of Dunlap Creek __ to
the base of the Gathright Dam ....” Jd. The district
court upheld the Corps’s assertion of RHA
jurisdiction, found its “determination of navigability
is an agency action,” and decided that the “plaintiffs
stated a cause of action under the Administrative
Procedure Act.” On appeal, the Fourth Circuit
recognized that “navigability is a term that has
traditionally been defined by decisions of the federal
courts” and affirmed the district court’s decision.
Loving, 745 F.2d at 864. See also Leslie Salt Co. v
Froehlke, 578 F.2d 742, 747 (9th Cir. 1978)
(reaching the question of Corps’s jurisdiction even
though the suit “did not involve action or inaction by
the Corps on any particular application by [the
plaintiff] for a permit under the Rivers and Harbors
Act or the [CWA],” because the plaintiff refused to
apply for a permit); Minnehaha Creek Watershed
Dist. v. Hoffman, 597 F.2d 617, 620 (8th Cir. 1979)
(Court reviewed the Corps’s “Determination of
Navigability” developed pursuant to the RHA even
though no permit or authorization had been
sought.); Miami Valley Conservancy Dist. v.
15
Alexander, 692 F.2d 447, 451 (6th Cir. 1982) (holding
that tributaries of Miami River did not fall under the
jurisdiction of the RHA in a declaratory judgment
case).
Hence, the Courts of Appeals have had little trouble
reviewing the Corps’s jurisdictional determinations
made pursuant to the RHA. The Petitioner,
however, offers no justification why jurisdictional
determinations made under the CWA should not
similarly be subject to APA judicial review.
Ill. A CWA JURISDICTIONAL DETERMINATION
HAS MANY CONSEQUENCES BEYOND THE
CORPS’S PER“iIT PROCESS.
The Petitioner incorrectly concludes that a CWA
jurisdictional determination is just “additional
information that the landowner may find useful in
choosing between” obtaining a CWA permit, or
discharging pollutants without a permit. Pet’rs Br.
at 16, 21. That view is not grounded in practical
business reality. There are many instances in which
a jurisdictional determination affects the rights or
obligations of a property owner aside from the
section 404 permitting process or agency-initiated
enforcement.
A. The Value of Real Property is Impacted
by a Jurisdictional Determination.
An essential ingredient in calculating the market
value of real property is the “highest and best use”
for which the property may be utilized. Without a
doubt, the presence of federally designated wetlands
16
on a parcel of property can constrain its use and
considerably impact its value. Donald T. Morrison,
Highest and Best Use of Property Taken Under
Eminent Domain, 19 Am. Jvr. Proof of Facts 3d 613
§ 5 (West, Westlaw Feb. 2016) (1993). As
commented by a land appraisal expert, a
“reasonably prudent and knowledgeable buyer
would be ‘crazy’ not to investigate for the presence of
jurisdictional wetlands.” Dept. of Transp. v. La Salle
Nati Bank, 251 Ill. App.3d 901, 915 (1993). Due to
the potentially disastrous financial and legal
consequences flowing from a_ jurisdictional
determination, securing an “official Corps
determination that jurisdictional waters...are either
present or absent on a particular site” has become
routine in real property business transactions. RGL
08-02, at 1.
Consider, for example, a small land developer who
holds an option contract to purchase unimproved
property. As part of a due diligence investigation the
developer will want to determine if the property
contains CWA “navigable waters.” A jurisdictional
determination request form is prepared’ and
submitted to the iocal Corps district office. The
Corps responds with an approved jurisdictional
determination reporting the presence of several
° The Corp recognizes that requests for jurisdictional
determinations may accompany a permit application or be
made independent of a permit application, such as where a
“landowner [needs] a JD to allow or facilitate the sale of his or
her land.” Regulatory Guidance Letter, U.S. Army Corps of
Engrs, (June 5, 2007) No. 07-01, available at
http://www.usace.army,mil/Portals/2/docs/civilworks/RGLS/rg
107-01.pdf at 4 (hereinafter “RGL 07-01”).
17
jurisdictional wetlands along with a map identifying
their precise locations.
If the wetlands consume the property line which is
coincident with the edge of the public roadway,
access to the property may be severely restricted. If
the wetlands pock-mark the property the buildable
envelope may be reduced or entirely eliminated. The
developer must also consider whether permit
authorization to alter the wetlands can be secured,
the time and expense of securing’ such
authorizations (including avoidance, minimization
and mitigation costs) 7, and whether any judgment
liens or enforcement actions involving the wetlands
encumber the property. Margaret N. Strand,
Wetlands: Avoiding the Swamp Monster, in
Environmental Aspects of Real Estate Transactions,
in Brownfields to Green Buildings 720, 721 (James
B. Witkin 2d ed., 1999); See NAHB Land
Development Checklist, https://www.nahb.org/
en/ research/~/media/887C0A886D0644248ECBA
AF501CE18B0.ashx; See Randall S. Guttery,
Stephen L. Poe & C.F Sirmans, An Empirical
Investigation of Federal Wetlands Regulation and
Flood Delineation: Implications for Residential
Property Owners, 26 J. Real Estate Research, No. 3,
303 (2004). Each of these considerations flow from a
jurisdictional determination and may profoundly
7 See Rapanos v. United States, 547 U.S. 715, 721 (2006)
(plurality opinion) (“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’).
18
impact a property's market value. See Randall S.
Guttery, Stephen L. Poe and C.F Sirmans, Federal
Wetlands Regulation: Restrictions on the Nationwide
Permit Program and the Implications for Residential
Property Owners, 37 Am. Business Law J. 2, 340
(2000) (sale price of residential properties located in
areas likely to be delineated as jurisdictional
wetlands fell by 10.5 percent, relative to unregulated
properties). See Katherine A. Kiel, Environmental
Regulations and the Housing Market: A Review of
the Literature in 8 Cityscape: A Journal of Policy
Development and Research, No. 1, 195 (2005)
(presence of jurisdictional wetlands will decrease the
value of land due te uncertainty over whether fill
permits will be granted).
Similarly, a lender will always want to assess the
value of real property before advancing funds for
property acquisition. As an executive for the
Maryland Bankers Association remarked on loans
secured by unimproved property, “Unless we have a
reason to know that it is or isn’t a wetland, we just
don’t know the value of it.” William Bunkley and
Charles P Edmunds, Appraising Wetlands,
Appraisal Journal (1992) (quoting John Bowers, Jr.
Executive Vice President, Maryland Bankers
Association). A jurisdictional determination will be
considered alongside any private _ restrictions,
zoning, building codes, historic district controls and
other environmental regulations to reach a
reasonable market value opinion. In addition, a
jurisdictional determination will trigger a marked
increase in the amount of site feasibility
documentation required by a lender for loan
approval. This will directly affect the borrower's
19
investment and development choices by increasing
the length of time required to secure loan approval,
the types of outside consultants needed to produce
necessary documentation, and the costs associated
with both. D. Linda Kone, Land Development, 50-51
(Home Builder Press, National Association of Home
Builders, 1994).
Perhaps the most telling examples of rights being
determined and legal consequences flowing from a
jurisdictional determination arise in the context of
land condemnation proceedings. The just
compensation constitutionally required in
condemnation cases is the fair cash market value of
the condemned property when put to its highest and
best use. U.S. v. Twin City Power Co., 350 U.S. 222,
235-236 (1956); U.S. ex rel. and for Use of Tennessee
Valley Auth. v. Powelson, 319 U.S. 266, 275-276
(1943); 4 Julius L. Sackman, Nichol’s The Law of
Eminent Domain (Rev. 3d ed. 1990) § 12 B.12, pp.
89-133. When determining market value it is proper
to consider all physical, legal and government
restrictions delimiting the availability of property
for a proposed use. This calculus necessarily
includes the presence of regulable wetlands, as
identified through a Corps jurisdictional
determination.
In Normandy Corp. v. S.C. Dept. of Transp., 386 S.C.
393, 688 S.E. 2d 136 (S.C. Ct. App. 2009), cert.
denied (Mar. 2, 2011), the South Carolina
Department of Transportation (“DOT”) brought a
condemnation action to acquire six acres of private
property for the construction of a parkway. The
DOT argued that just compensation for the property
20
should be caiculated using a 1997 jurisdictional
determination representing the Corps’ “final word”
that 50% to 75% of the property was comprised of
jurisdictional wetlands. Normandy Corp. 399-400,
406-407 The property owner countered that DOT’s
appraisal severely undervalued its condemned
parcel because the jurisdictional determination
predated the condemnation date by three years.
The state appeals court agreed with the property
owner. It found that “because the amount of
jurisdictional wetlands existing on a tract of land
has a significant impact on the value of that tract,
evidence regarding jurisdictional wetland amounts
fas of the condemnation date] is relevant and
material to fixing just compensation.” Normandy
Corp. at 407 Thus, legal consequences clearly
emanate from the issuance of a jurisdictional
determination.
Similarly, U.S.A. v. 48.86 Acres of Land, More or
Less, 2001 WL 474410 (E.D. Pa. April 30, 2001)
involved a 1989 condemnation action concerning the
valuation of the landowner’s property. To establish
current market value the landowner’s expert
certified that the “highest and best use” of the
property was commercial development. The United
States challenged the landowners appraisal
evidence as flawed for failure to analyze the impact
of Corps designated jurisdictional wetlands on such
development plans, contending that the presence of
jurisdictional wetlands will have “a major impact on
the value of the property.” Jd. at 2. The district court
agreed with the United States. Based on the legal
relevance of a jurisdictional determination, the court
issued an Order authorizing federal entry onto
21
Defendants’ land to conduct a determination. 48.86
Acres of Land®; See also Dept. of Transp. v. LaSalle
Nati Bank, 251 IlL.App.3d 901 (1993) (illustrating
how a Corps jurisdictional determination is used by
courts in determining the value of real property).
Thus, in 48.86 Acres of Land, the government
recognized the impact of a_ jurisdictional
determination on the value of real property, while
here it claims it is just an informational tool. Pet’rs
Br. at 16. The government cannot have it both ways.
B. Some States Require Real Property
Owners to Disclose The Presence of
Wetlands to Buyers.
Recognizing the potentially devastating impact
jurisdictional wetlands may have on real property
values, a number of state now impose strict wetland
disclosure obligations on sellers of residential real
property. Failure to disclose the presence of
wetlands, as identified through a jurisdictional
8 This case also illustrates that landowners do not
always request jurisdictional determinations. While in U.S.A.
u. 48.86 Acres of Land the court ordered the determination, in
some cases the Corps will conduct the jurisdictional
determination on its own. See Brief of Amicus Curiae the
National Association of Home Builders in Support of
Petitioner, United States Army Corps of Eng'rs v. Hawkes Co.,
Inc, No. 15-290 (filed Oct. 6, 2015) (explaining that in Arizona
the Corps issued a jurisdictional determination on its own that
affected thousands of square miles of property, did not notify
any of the affect property owners, and still claimed that the
determination was not an APA final agency action.)
22
determination, can carry significant legal
consequences.
For example, in the state of Louisiana, all known
real property defects must be disclosed prior to a
sale. LA R.S. 9:3195-3199. The Louisiana Real
Estate Commission, a state government regulatory
agency, has identified defects that may have a
“substantial adverse affect on the value of property”
and produced them in the Louisiana Residential
Property Disclosure form. LA R.S. 9:3198(A)(1);
Informational Statement for Louisiana Residential
Property Disclosure Form’, revised Feb. 1, 2015.
The mandatory form requires seller to disclose
whether “any part of the property [has] been
determined a wetland by the United States Army
Corps of Engineers under § 404 of the Clean Water
Act,” to attach a copy of the jurisdictional
determination, and to provide notice that additional
costs for a § 404 permit may result. Property
Disclosure Document for Residential Real Property,
revised Feb. 1, 2015. App. la.
Historically, New York state home sellers had no
duty to disclose the presence of property defects
prior to a transfer. In 2002, the state legislature
created exceptions to the general rule of “caveat
emptor” through passage of the Property Condition
Disclosure Act. NY Real Prop. Law §§ 460-467 The
Act requires every seller of residential real property
complete a property condition disclosure statement,
9 Available at http://www.lrec.state.la.us/pdf_files/
forms/Residential-Property-Disclosure-Legal.pdf (last visited
02.29.16)
23
or pay a credit of $500 to the purchaser at closing.
Id. at §462. One of the questions on the disclosure
statement is whether any part of the property
contains a “designated wetland.” If so, the seller
must provide details about the wetland to the buyer.
NYS Dept. of State Division of Licensing and
Services (Rev. 8/06), available at
https://www.dos.ny.gov/forms/licensing/1614-a.pdf
at 2.
In Hawaii, the seller is required to provide a
purchaser with a disclosure statement that fully and
accurately exposes all known or reasonably
discoverable “material fact[s]” relating to the
property. Haw. Rev. Stat. Ann. § 508D-1. “Material
fact[s]” are defined as “any fact, defect, or condition,
past or present, that would be expected to
measurably affect the value to a reasonable person
of the residential property being offered for sale.” Jd.
Because a Corps wetland determination measurably
impacts the value of property, such determination
would need to be disclosed to all prospective
purchasers. See also, K.I. Gen. Laws § 5-20.8-2(a) &
(b)(2)(xxviii) (requiring disclosure of all “material
facts” regarding the property, including the location
of coastal wetlands, fresh water wetlands, marshes
or swamps that many impact future development).
The seller of residential real property in Oregon
faces a similar duty to disclose “any governmental
studies, designations, zoning overlays, surveys or
notices that would affect the property.” Or. Rev.
Stat. § 105.464. Finally, the Wisconsin Code
includes a report form entitled Real Estate
Condition Report Disclaimer. Wis. Stat. § 709.03.
24
Part C.11 of the report requires disclosure of all
“floodplain, wetland or shoreland zoning area{s]. Jd.
While the above described wetland disclosure
obligations will place the prospective purchaser in a
more informed position regarding pitfalls associated
with the property, they also have the effect of
commanding the property owner to aifirmatively
disclose the presence of regulated wetlands. Failure
to do so may trigger legal consequences sounding in
breach of contract, fraudulent concealment, and
negligent misrepresentation.
C. Housing Grant and Assistance Programs
are Affected by Jurisdictional
Determinations.
The U.S. Department of Housing and Urban
Development (“HUD”) administers a number of
housing grant and financial assistance programs
that involve Amici’s members. HUD’s programs are
designed to provide states, municipalities, and
communities with the resources they need to provide
housing and community development projects that
benefit low-income individuals and _ at-risk
communities.
Projects receiving HUD financial assistance must
undergo an environmental review process, which
varies depending on the scope and circumstances of
the project!° However, for all projects involving new
construction or the expansion of an existing building
10 Available at www.hudexchange.info/programs/
environmental-review/ (last visited March 1, 2016)
25
footprint, HUD or its grantees must determine
whether there are wetlands on the project site, or if
there are off-site wetlands that may be impacted by
the development of the site!! HUD’s regulations
provide that “wetlands” include (among others)
wetlands “subject to section 404 of the Clean Water
Act,” 24 C.F.R. § 55.2(b)(11), and require project
proponents to avoid impacts to wetlands. 24 C.F.R
§§ 55.1(a)(2), 55.11(b).
Thus, if a developer receiving HUD financial
assistance holds an approved _ jurisdictional
determination that indicates wetlands on the
property, and i) plans to take an action in the
wetland that does not require a Corps permit, or ii)
plans to obtain a Corps general permit, HUD’s
regulations mandate that the landowner complete
an 8-step process to determine that there are no
practicable alternatives to wetlands development.
24 C.F.R. § 55.20. This 8-step process requires the
proponent to publish public notices and accept public
comment; identify and evaluate practicable
alternatives to the proposed site; and identify and
evaluate potential direct and indirect impacts to
wetlands and means, such as compensatory
mitigation, that restore or preserve a wetland’s
natural beneficial functions. At the end of the
process, the proponent must re-evaluate the
proposed project in light of the information gleaned
through the above-described process, and determine
whether no practicable alternative to impacting a
nN Available at www .hudexchange.info/programs/
environmental-review/wetlands-protection/ (last visited March
1, 2016)
26
wetland exists. If the agency determines that there
are no practicable alternatives, it may pursue the
original project only after another public notice and
opportunity for public comment is published. Jd.
HUD’s wetlands protection requirements apply,
regardless of whether the proponent ultimately
obtains a permit to fill the on-site wetlands. Thus,
compliance with HUD’s 8-step regulatory process
flows from the presence of an approved jurisdictional
determination.
D. The Recipient of a Jurisdictional
Determination is Subject to Additional
Penalties.
Petitioner repeatedly claims that the recipient of an
approved Corps jurisdictional determination is not
exposed to additional penalties if a CWA violation is
later identified. See Pet’rs Br. at 10, 16-17, 20, 22-
23, 24, 26, 29-32. In support of that position
Petitioner attempts to blur the distinction between
preliminary jurisdictional determinations, written
indications that there “may be” jurisdictional waters
and which are “advisory in nature,” and approved
jurisdictional determinations, a definitive, official
determination that there are, or that there are not,
jurisdictional waters on a site. 33 C.F.R. § 331.2;
RGL 08-02, 1, 3 (emphasis added). Petitioner labels
an approved jurisdictional determination an
innocuous information tool not dissimilar from
informal agency guidance or opinion letters. Pet’rs
Br. at 16-17, 33. In reality, an approved
jurisdictional determination carries the legal effect
necessary for final agency action because it affects
27
federal administrative and judicial enforcement
actions and the extent of penalties available.
1. Jurisdictional Determinations Impact
the Amount of Civil Penalties Courts
Consider.
Section 309(b) of the CWA _ authorizes. the
Administrator to initiate civil actions in federal
court seeking injunctive relief as well as civil
penalties!2, 33 U.S.C. 1319(b). Section 309(d) of the
CWA provides that “[i]n determining the amount of
a civil penalty the court shall consider” the following
six factors: “the seriousness of the violation or
violations, the economic benefit (if any) resulting
from the violation, any history of such violations,
any good-faith efforts to comply with the applicable
requirements, the economic impact of the penalty on
the violator, and such other matters as justice may
require.” 33 U.S.C. § 1319(d) !3 (emphasis added).
12 The maximum penalty for civil violations occurring
after Dec. 6, 2013, is $37,500 per day for each violation. 33
U.S.C § 1319(d); 40 C.F.R. § 19.4 (2013).
13 When a federal judicial enforcement action seeking
civil penalties is filed, the United States general practice is not
to request a specific proposed penalty. Rather, a request for
penalties “up to” the CWA statutory maximum is typically
recited. Memorandum from Sylvia Lowrance, Acting Asst.
Adm'r, EPA OECA, to Waters Prot./Mgmt. Div. of Dir. et al.,
Issuance of Revised CWA Section 404 Settlement Penalty
Policy (Dec. 21, 2001) at 7, available at http:// www.epa.gov/
sites/production/files/documents/404pen.pdf. (last visited
March 1, 2016)
28
If Hawkes had disobeyed the findings of the Corps’s
Dec. 31, 2012 revised approved jurisdictional
determination, Pet’rs App. 44a-102a (hereinafter
“Dec. 31 Jurisdictional Determination”), and
commenced peat mining without the necessary CWA
permits a reviewing court would certainly take into
consideration the information detailed in the Dec. 31
Jurisdictional Determination before calculating a
penalty. The extent of wetlands and their
“exceptional quality” would speak to the seriousness
of the violation. Pet’rs App. 64a; see Hawaii's
Thousand Friends v. City & County of Honolulu, 821
F Supp. 1368, 1383 (D. Haw. 1993) (looking at the
significance of the CWA violation and the actual or
potential harm to human health and _ the
environment when assessing a civil penalty); United
States v. Avatar Holdings, Inc., No. 93-281-CIV-
FTM-21, 1996 WL 479533, at 6 (M.D. Fla. Aug. 20,
1996) (finding the seriousness of a violation is
determined by considering “the number, duration
and degree of the violations as well as the actual or
potential harm to human health and_ the
environment”); See Catskill Mountains Chapter of
Trout Unlimited, Inc. v. City of New York, 244 F
Supp.2d 41, 49-50 (N.D. N.Y. 2003) (noting that
courts should consider the severity of the violations
and their effect on the environment when
calculating penalties under the CWA).
Likewise, Hawkes’s good-faith efforts to comply with
the law would be brought into question because
Hawkes received not one, but three jurisdictional
29
determinations '!4 Each of those jurisdictional
determinations reported, albeit under different
theories, that “There are ‘waters of the U.S.’ within
Clean Water Act (CWA) jurisdiction (as defined by
33 CFR part 328) in the review area.” See e.g. Dec.
31 Jurisdictional Determination at App. 50a.
Evidence of good-faith efforts would include whether
the defendant should have known that its conduct
might be prohibited and whether the findings of the
jurisdictional determination were ignored.
In United States v. Smithfield Foods, Inc., 191 F.3d
516 (4th Cir. 1991), cert. denied, 531 U.S. 813, 121
(2000), the court refused to find any good-faith
efforts at CWA compliance because the defendants
demonstrated little urgency to meet the terms of
their existing permit and their discharge violations
actually increased over time. Jd. at 531. The court
was also unimpressed with defendants’ claim of
good-faith by reason of their engagement of
compliance consultants. It explained that if a
defendant seeks a consultant’s expert advice but
ignores the advice and fails to implement
suggestions, then the defendant has not shown good-
faith. Id.; See United States v. Smithfield Foods, Inc.,
972 F.Supp. 338, 350-351 (1997). Likewise, if a
defendant requests a Corps jurisdictional
determination, and later ignores the official findings
of that determination, good-faith as an aggravating
4 Nov. 8, 2011, U.S. Army Corps of Engrs Draft
Jurisdictional Determination; Feb.7, 2012 U.S. Army Corps of
Eng’rs Approved Jurisdictional Determination at App. 4a; Dec.
31 Jurisdictional Determination at App. 44a.
30
rather than mitigating factor will be used in
fashioning a civil penalty
2. Jurisdictional Determinations Impact
the Amount of Administrative
Penalties the Agencies Assess.
The large majority of Corps and EPA CWA
enforcement actions are brought through civil
administrative orders, which command corrective
action by a date certain and often impose penalties.
33 U.S.C. § 1319(a) 5 The agencies must assess
administrative penalties after taking into account
the factors identified in CWA section 309(g). The
factors are: “the nature, circumstances, extent and
gravity of the violation, or violations, and, with
respect to the violator, ability to pay, any prior
history of such violations, the degree of culpability,
economic benefit or savings (if any) resulting from
the violation, and such other matters as justice may
require.” 33 U.S.C. § 1319(g)(3) (emphasis added).
EPA has incorporated and elaborated on these
factors in its “404 Settlement Penalty Policy,”
(hereinafter, “Penalty Policy”) which it uses to
calculate appropriate administrative penalties.
Memorandum from Sylvia Lowrance, Acting Asst.
Adm'r, EPA OECA, to Waters Prot./Mgmt. Div of
Dir. et al., Issuance of Revised CWA Section 404
18 The CWA prescribes two classes of administrative
penalties: Class! for less egregious conduct, which cannot
exceed $16,000 per violation or $37,500 in total; and Class II
for serious conduct, which are assessed at an amount not to
exceed $16,000 per violation but which can be as high as
$187,500 in total amount. 33 USC § 1319(g); 40 C.F.R. § 19.4
(2013).
31
Settlement Penalty Policy (Dec. 21, 2001), available
at http:// www.epa.gov/sites/production/files/
documents/404pen.pdf
When the government’s case development “Team” !6
analyzes the “degree of culpability” the “principal
criteria” are “previous experience with or knowledge
of the Section 404 regulatory requirements, the
degree of the violator’s control over the illegal
conduct, and the violator’s motivation...” Jd. at 13
(emphasis added). When assessing the violator’s
previous experience or knowledge the Team will look
to whether “the violator knew or should have known
of the need to obtain a Section 404 permit or of the
adverse environmental consequences of the
discharge prior to proceeding with the discharge
activity.” Id. The Team will assign a gravity value
at the high end of the spectrum if there was
“previous receipt of a Section 404 authorization or a
prior independent opinion of the need for a permit.”
Id.
After calculating the preliminary gravity amount,
the Team may adjust the amount up or down based
on factors including: (1) recalcitrance (bad-faith); (2)
cooperation; (3) inability to pay; (4) litigation
consideration; and (5) other case-specific factors. Id.
at 15-17
16 The case development team refers to the Agency 404
technical and legal staff responsible for developing and
pursuing a particular administrative or judicial enforcement
action.
32
The Dec. 31 Jurisdictional Determination reported
to Hawkes that “there are ‘waters of the U.S.’ within
Clean Water Act (CWA) jurisdiction (as defined by
33 CFR part 328) in the review area.” Pet’rs App.
50a. That same jurisdictional determination
reported the presence of a jurisdictional wetland
complex of “high vegetative biodiversity... [with]
pre-European’ settlement conditions and
outstanding statewide biodiversity significance
ranking...represent[ing] one of the best examples of
ridge and swale communities in Marshall County
and northwestern Minnesota...[with a] full suite of
functions...include[ing]: vegetative diversity/
integrity, maintenance or characteristic hydrology,
flood attenuation, downstream water quality.
characteristic wildlife habitat structure, and
maintenance of characteristic amphibian habitat.”
Dec. 31 Jurisdictional Determination at Pet’rs App.
64a -65a.
Thus, by virtue of the Dec. 31 Jurisdictional
Determination, Hawkes knew that waters of the
United States were present on the property, that 404
permit requirements applied, and that the biological
value of the site was significant. Furthermore,
Petitioner admits “[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’rs Br. at
32.
Yet, Petitioner claims that Hawkes would not expose
itself to increased judicial or administrative
penalties if, with all of this knowledge, it thumbed
33
its nose at the Corps and willfully destroyed the high
value wetlands on the site. Pet’rs Br. at 17
Petitioner's. claim is implausible and the facts
illustrate the legal consequences that flow from
jurisdictional determinations.
E. Jurisdictional Determinations Control
Where Landowners Have a Right to
Proceed.
Finally, consider a development project that
contains “waters of the United States.” 33 CFR §
328.3(a). However, consider it from the position of
the upland instead of from the jurisdictional water.
When the Corps conducts a_ jurisdictional
determination it does not simply determine if the
property does or does not contain “waters of the
United States.” It “precisely identifies the limits of
those waters on the project site determined to be
jurisdictional ..” RGL 08-02, at 1. Thus, the Corps
literally stakes the bounds of the jurisdictional
waters. Within those bounds, the landowner may
not add a pollutant without either a Corps or EPA
permit!’
Outside the bounds of the jurisdictional
determination, however, the property owner has
(with respect to the CWA) the right to use the
property how he or she sees fit. See United States v.
7 If the pollutant is “dredge or fill material” then the
landowner obtains a permit from the Corps under 33 U.S.C. §
1344. If the pollutant is not dredge or fill material, then EPA
must issue a permit under 33 U.S.C. § 1342.
34
Craft, 535 U.S. 274, 279 (2002) (explaining that each
of the three types of concurrent ownership provides
the owner with the right to use the property); Loretto
v. Teleprompter Manhattan CATV Corp., 458 U.S.
419, 435 (1982) (“Property rights in a physical thing
have been described as the rights ‘to possess, use
and dispose of it.’ United States v. General Motors
Corp., 323 U.S. 373, 378, 65 S.Ct. 357, 359, 89 L.Ed.
311 (1945)”). In other words, a jurisdictional
determination does not only explain where the CWA
applies, it explains precisely where it does not apply.
This illustrates the error with the Petitioners’
assertion that a person who believes there exist
“waters of the United States” on his or her property
may either seek a permit, or alternatively proceed
without a permit if “it believes that the relevant site
does not contain ‘waters of the United States.” Pet’rs
Br. at 21. There exists a third option where many of
Amici’s members fall. These members believe there
are some “waters of the United States” on their
property and they want to proceed by avoiding those
areas. Thus, they need to know where the CWA does
not apply so that they can proceed in those areas
without a permit—which they have a right to do!
Clearly, for these landowners jurisdictional
determinations affect their rights.
18 Additionally, it is also not an “adequate remedy” to
force these landowners to obtain a permit that they do not
desire just so they can obtain judicial review. See 5 U.S.C. §
704.
35
CONCLUSION
The Petitioner attempts to constrain APA judicial
review, and fails to adequately address its regulations
and guidance documents, which both recognize that
approved jurisdictional determinations satisfy the
final agency action test the Court established in
Bennett. Furthermore, the Petitioner views approved
jurisdictional determinations myopically by not
considering all of the rights impacted, obligations
affected, and legal consequences that flow from
approved jurisdictional determinations. For these
reasons, the Court must affirm the decision below and
hold that approved jurisdictional determinations are
subject to APA judicial review.
DATED: March 2, 2016
Respectfully submitted,
RALPH HOLMEN THOMAS J. WARD*
NATIONAL ASSOCIATION JEFFREY B. AUGELLO
OF REALTORS NATIONAL ASSOCIATION OF
430 N. Michigan Ave. HOME BUILDERS
Chicago, IL 60611-4087 1201 15th Street, N.W
Washington, D.C. 20005
(202) 266-8200
tward@nahb.org
*Counsel of Record
APPENDIX
i
TABLE OF APPENDICES
Page(s)
APPENDIX A, Property Disclosure Document
for Residential Real Estate (Rev 01.01.15).......... la
APPENDIX B, Feb. 7, 2012 U.S. Army Corps of
Eng’rs Approved Jurisdictional Determination....4a
APPENDIX A
la
PROPERTY DISCLOSURE DOCUMENT FOR
RESIDENTIAL REAL ESTATE
Answer all questions to the best of your
knowledge. Explain any “ys” answers fully at
the end of each section.
Y = Yes N = No NK = No Knowledge
SECTION 1: LAND
(1) Lot size or acres
(2) Are there any servitudes/encroachments
regarding the property, other than typical/customary
utility servitudes, that would affect the use of the
property? OY ON ONK
(3) Are there any rights vested in others? Check all
that apply and explain at the end of this section.
Timber rights OY ON GNK
Common driveway OY ON ONK
Right of ingress oregress 7 Y JN ©ONK
Mineral rights OY ON ONK
Right of way OY ON ONK
Surface rights OY ON ONK
Right of access OY ON ONK
Air rights OY ON ONK
Servitude of passage OY ON ONK
Usufruct OY ON ONK
Servitude of drainage OY ON ONK
Other OY ON ONK
2a
(4) Has any part of the property been determined a
wetland by the United States Army Corps of
Engineers under §404 of the Clean Water Act?
OY ON ONK
(a) Is such a determination pending?
OY ON ONK
(b) What date was determination made?
The Clean Water Act is a federal law that protects
the wetlands of the United States. Section 404 of
the Act contains permit requirements for altering or
building on property that has been determined a
wetland by the Army Corps of Engineers. The Corps
may assess a fee to the SELLER or PURCHASER
of a property for this determination. A property that
has been determined a wetland may result in
additional costs for a Section 404 permit.
Documentation is attached and becomes a part of
this property disclosure if the property described
herein has been determined a wetland by the Corps.
(5) Has any flooding, water intrusion, accumulation,
or drainage problem been experienced with respect
to the land? If yes, indicate the nature and frequency
of the defect at the end of this section.
OY ON ONK
(6) What is/are the flood zone classification(s) of the
property?
3a
(a) What is the source and date of this information?
Check all that apply. \) Survey/Date
‘| Flood Elevation
() Certificate/Date
() Other/Date
Question Number __ Explanation of “Yes” answers
0 Additional] sheet is attached
SECTION 2: TERMITS, WOOD-DESTROYING
INSECTS AND ORGANISMS
(7) Has the property ever had termites or other
wood-destroying insects or organisms?
OY ON ONK
(8) Was there any damage to the property?
TY ON ONK
(9) Was the damage repaired?
OY ON CNK
(10) Is the property currently under a termite
contract? OY ON ONK
(a) Name of company
(b) Date contract expires
(c) List any structures not covered by contract
***
APPENDIX B
4a
DEPARTMENT OF THE ARMY
St. Paul District, Corps of Engineers
180 Fifth Street East, Suite 700
St. Paul MN 55101-1678
Reply to attention of FEB 07 2012
Operations Regulatory
(2007-1914-DJS)
Mr. Kevin Pierce
Hawkes Peat Company, Inc.
P.O. Box 14111
Grand Forks, North Dakota 58208
Dear Mr. Pierce:
This is in response to your request that the Corps
of Engineers provide an Approved Jurisdictional
Determination on the 520- acre property (Mercil Site),
now owned by Hawkes Peat Company, Inc. The
project site is located in Sec. 13, T. 157N., R. 44W.,
Marshall County, Minnesota.
This letter contains an approved jurisdictional
determination for your subject site. If you object to
this determination, you may request an
administrative appeal under Corps regulations at 33
CFR Part 331. Enclosed you will find a Notification of
Appeal Process (NAP) fact sheet and Request for
Appeal (RFA) form. If you request to appeal this
determination, you must submit a completed RFA
form to the Mississippi Valley Division Office at the
following address:
APPENDIX B
5a
Administrative Appeals Review Officer
Mississippi Valley Division
P.O. Box 80 (1400 Walnut Street)
Vicksburg, MS 39181-0080
(601) 634-5821
(601) 634-5816 (fax)
In order for an RFA to be accepted by the Corps,
the Corps must determine that it is complete, that it
meets the criteria for appeal under 33 C.F.R. part
331.5, and that it has been received by the Division
Office within 60 days of the date of the NAP Should
you decide to submit an RFA form, it must be received
at the above address by
It is not necessary to submit an RFA form to the
division office if you do not object to the determination
in this letter
Please be aware that this determination does not
specifically identify the limits of our jurisdiction on
the Mercil Site. The attached Approved Jurisdictional
Determination confirms that there are wetlands
present and that they are waters of the U.S. and are
subject to our jurisdiction under section 404 of the
Clean Water Act (CWA). In this case, the limits of
Federal jurisdiction would be established with a
wetland delineation. As you are aware, my staff has
EXHIBIT
| 6 |
***
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.