SCOTUS Brings Forseeable Hit to Clean Water Act

By Zosha Millman | LXBN | June 1, 2016

It may not be a particularly surprising review, but the U.S. Supreme Court’s decision in Hawkes Co., Inc., et al v. U.S. Army Corps of Engineers may have some bigger implications nonetheless.

On Tuesday the Justices unanimously decided that landowners can go to court with federal regulators to decide if a piece of property containing wetlands is covered by the Clean Water Act. And in many ways their decision comes with no shock.

Many development projects may impact or interact with “waters of the U.S.” under the Clean Water Act, which means the activities might fall under the Army Corps’ purview for requirements of permitting and implementation of mitigation measures. But it’s not always clear if the “waters of the U.S.” will be impacted by a project.

Photo Credit: Sangre-La.com cc

In light of that, many project developers and property owners request jurisdictional determinations from the Army Corps before proceeding—decisions which the Army Corps has long held are final decisions, not judicially reviewable since no party is required to act or refrain based solely on the decision.

A separate Fifth Circuit case in 2014 upheld the Army Corps view, claiming that the agency was just making “notifications” regarding a property’s classification. But when the Hawkes Company’s case reached the Eighth Circuit, a circuit split was born. Although they agreed that the Army Corps were not making a final agency action, they were still causing the Hawkes Company to “incur substantial compliance costs (the permitting process), [and] forego what they assert is lawful use of their property, or risk substantial enforcement penalties.”

And when SCOTUS announced they’d clarify the circuit split many people felt pretty confident in how it’d go. AsFred Wagner predicted on Envirostructure (with “no unequivocation or uncertainty”) the justices’ decision to affirm the Eighth Circuit was clear from the start:

The Waters of the United States litigation will have an impact. Yes, the Hawkes’ plight doesn’t necessarily have anything to do with the proposed wetlands rule, now being challenged in 627 federal courts. (Not that many, but it feels like it.) However, the foundational arguments of those challenges – that the government’s rule is complicated, vague and applied unevenly – will resonate here. Something’s very wrong when it takes years and lots of money just to find out what everyone knows based on the JD, that you’re not getting a 404 permit.

The Supreme Court has already played its hand in the unanimous Sackett ruling. It seems almost impossible to fathom an outcome that would be inconsistent with the Court’s previous opinion dealing with a Clean Water Act compliance order. A JD clearly “determines rights and obligations,” even more so in this case when the Corps informed the Hawkes that their best option was to sell their peat farm to a wetlands mitigation bank. As Justice Alito commented in a concurring opinion in Sackett, “In a nation that values due process, not to mention private property, such treatment is unthinkable.” Did I mention that the ruling was unanimous?

…I won’t be so cocky as to predict another unanimous ruling, but the Hawkes will prevail and will get their day in court.  Whether they will ever get to expand their peat mining operations, well, that might be the subject of even more litigation and yet another blog post.

Which is true: Though this is the second time in four years the Supreme Court has appeared to unanimously expand the rights of the landowners in court with disputes about the application of the Clean Water Act, the ultimate resolution of these cases does not fall at the feet of the justices. And that’s a fraction of the nine cases in the past few decades where SCOTUS has poked or pushed the Corps or the EPA.

In this case though a system of checks and balances for the Army Corps—who, as the court argued, are able impose substantial criminal and civil penalties for discharging any pollutant into waters covered by the act—seemed predetermined, even necessary. The Army Corps’ position has left the regulated community with very few enforcement options. As Vox writes, it’s a get for those looking to challenge the Obama administration’s environmental platform:

Because the court determined that [jurisdictional determinations] are in fact like other federal agency actions, and can be challenged in court, it opens the door for more companies to try to overturn USACE determinations of which waters should be protected and which shouldn’t.

…Strategically, there are strong incentives for land developers to repeatedly question the Clean Water Act’s procedures, and for the EPA and USACE, it’s “incredibly threatening because it is a procedure that has already come under court scrutiny,” Robertson said.

In 2006, the Supreme Court split on Rapanos v. United States, which questioned whether a Michigan wetland was protected under the Clean Water Act. Justice Anthony Kennedy, the swing vote in the case, didn’t clearly define “navigable waters” or property rights in the case, and the laws since have becomes increasingly vague.

Of course even that might be calmer waters than a future where the general constitutionality of the Clean Water Act is challenged, as Justice Kennedy hinted at during the oral arguments in Hawke Co., Inc. vs. U.S. Army Corps of Engineers. This week’s case isn’t the first or necessarily the biggest loss to the Clean Water Act. It’s just one more potential hole in the dam. Now it’s time to see if the courts tear it down or plug it up.

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