Access to courts to resolve disputes early on in a permitting process is critical for land use projects in terms of time- and cost-savings. In Army Corps of Engineers v. Hawkes, issued on May 31, 2016, the U.S. Supreme Court effectively agreed by ruling that a permit applicant need not await the completion of the permitting process before challenging the Corps’ determination that wetlands exist on the property, nor must an applicant wait until the Corps brings enforcement proceedings, if the applicant filled the wetlands, because of the risk of serious criminal and civil penalties.
At issue in this case is whether an owner can appeal the Corps’ “jurisdictional determination” of the existence, extent and nature of wetlands on a development site to court at the time the Corps makes the determination, and whether this is a final agency action for the purposes of the Administrative Procedure Act. A final agency action is necessary before litigants can seek remedies in court, and is found when (1) the agency has consummated its decision-making process; (2) a party’s rights or obligations have been determined from which legal consequences will flow; and (3) there is no adequate alternatives to court.
In Hawkes, three peat-mining companies sought to discharge material into wetlands so that these areas could be mined. The Corps determined that the area contained waters of the United States regulated by the Clean Water Act. The consequence of the Corps finding jurisdiction under the Clean Water Act meant that the companies had to complete an expensive and time-consuming permitting process even if they disagreed with the extent or nature of the wetlands on-site. Given the 8-0 decision in which the justices either agreed, or concurred in whole or in part, with the majority decision, the Supreme Court easily found that a jurisdictional determination is a final agency action capable of being appealed at the time it is issued, and met the above test for a final agency action. Among other arguments it made, the Corps argued that if it never adopted the practice of issuing standalone jurisdictional determinations, then an applicant would have to wait until the end of the permitting process to appeal, but the Court pointedly noted that this was true enough, but “such a ‘count your blessings’ argument is not an adequate rejoinder to the assertion of a right to judicial review” under the Administrative Procedure Act. Because the Clean Water Act does not require the Corps to issue jurisdictional determinations, it will be interesting to see if it will keep up this practice in light of Hawkes.