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US Supreme Court Rules Against the Corps and in Favor of Landowners With Respect to the Reviewability of Jurisdictional Determinations

Reserving for Another Day the Full Scope of Finality under the Administrative Procedure Act

In one of the most closely watched environmental and administrative law cases this term, the US Supreme Court ruled unanimously against the government on Tuesday, May 31, 2016, affirming the Eighth Circuit’s decision allowing federal courts to review the US Army Corps of Engineers’ jurisdictional determinations. Jurisdictional determinations are decisions wherein the Corps determines whether wetlands or dry river and stream beds are subject to the “waters of the United States” regulation under the Clean Water Act and have long been problematic for landowners who disagree with the Corp’s decision. Before the Court’s decision, there was a circuit split over whether jurisdictional determinations are final agency actions and thus subject to review by the courts under the Administrative Procedure Act.

In US Army Corps of Engineers v. Hawkes Co., Inc., et al., the Corps unsuccessfully argued that a jurisdictional determination does not meet the two-prong standard for finality enunciated in Bennett v. Spear. Essentially, they attempted to argue that the second prong of Bennett creates a mandatory test and that these jurisdictional determinations—and all other similar agency actions opining on the application of law to particular facts—are generally exempt from judicial review because they do not themselves alter legal rights or impose binding legal obligations. Hawkes Co., represented by the Pacific Legal Foundation, combated against this on behalf of the landowners by arguing that the Eighth Circuit decision was correct and tracked previous administrative law decisions. The landowners were supported by 16 amici curiae , all of which sent an overarching message that landowners and developers need access to the courts in the face of possible government overreach.  And no entity filed an amicus brief in support of the Corps.

With Chief Justice John Roberts writing the opinion, the  Court unanimously upheld the Eighth Circuit’s ruling that jurisdictional determinations are final agency actions and subject to review by the courts. Simply put, the Court’s decision resolved the circuit split against the government and in favor of regulated entities seeking judicial review.

Chief Justice John Roberts wrote that the Corps’ jurisdictional determinations are final agency actions because, at a minimum, they meet the criteria set forth by the Court in Bennett v. Spear. Under Bennett, an agency action is final if (1) it is not “merely tentative or interlocutory in nature” and (2) if (but not necessarily only if) it is an action “by which rights or obligations have been determined, or from which legal consequences will flow”  Chief Justice Roberts wrote that a jurisdictional determination is a final agency action that “not only deprives respondents of a five-year safe harbor from liability under the act, but warns that if they discharge pollutants onto their property without obtaining a permit from the Corps, they do so at the risk of significant criminal and civil penalties.”

Notably, the Court expressly reserved the question of whether an agency action that satisfies the first prong of Bennett, but lacks legal consequences in the second prong, can constitute a final agency action. Chief Justice Roberts writing for the Court stated that, “[b]ecause we determine that a jurisdictional determination satisfies both prongs of Bennett, we need not consider respondents’ argument that an agency action that satisfies only the first may also constitute final agency action.” The Court further referred to the Bennett criteria only as conditions that “generally must be satisfied,” as opposed to mandatory prerequisites in every case.

In addition to the Court’s decision not to resolve the debate over whether the second prong of Bennett is a universal prerequisite for judicial review, Justice Ginsburg in an opinion concurring in part and concurring in judgment appeared to repudiate the second prong of Bennett by citing only “an immediate and practical impact” as a basis for finding final agency action and by stating in a footnote that “Bennett v. Spear . . . , contrary to Justice Kagan’s suggestion” in a separate concurring opinion,  “does not displace or alter the approach to finality established by Abbott Laboratories v. Gardner . . . and Frozen Food Express v. United States . . . . Bennettdealt with finality quickly, and did not cite those pathmarking decisions.”

Professor Jonathan Adler also pointed out this rare instance of Justice Kagan and Ginsburg disagreeing with each other in his blog, The Volokh Conspiracy, and noted that this debate is an important issue of administrative law that has been left open for another day.

Finally, of interest to those following the pending challenges to the US EPA’s proposed definition of “waters of the United States,” is Justice Kennedy’s concurring opinion, joined by Justices Thomas and Alito. Justice Kennedy wrote that “based on the Government’s representations in this case, the reach and systemic consequences of the Clean Water Act remain a cause for concern.”

The Court’s various concurring opinions suggest that the Court is particularly wary of administrative overreach under the Clean Water Act, but not entirely in agreement as to whether the second prong of Bennett is actually a mandatory prerequisite for the finality doctrine. Corps v. Hawkes is not the last time we will see the Court address finality and the availability of judicial review.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume VI, Number 153

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About this Author

Danelle Gagliardi Environmental Attorney Squire Patton Boggs Columbus, OH
Associate

Danelle Gagliardi represents a wide variety of clients in complex environmental transactions, litigation and regulatory compliance, including those in the metals, mining, iron and steel, oil and chemical industries, as well as real estate developers and shipping and logistics companies. She has a strong background in the Clean Air Act (CAA), Clean Water Act (CWA), Toxics Substances Control Act (TSCA), Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and California’s Proposition 65 (Prop 65).

Danelle has a multistate, global practice involving all aspects...

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Matthew Rojas, Environmental Litigatior, Squire Patton Boggs Law FIrm
Senior Associate

Matthew Rojas’ practice focuses on environmental and natural resources law. With a background in environmental science, Matthew assists clients with environmental considerations of both litigation and transactions.

He helps clients work with state and federal agencies to procure required permits and approvals for a wide variety of projects. Matthew advises on brownfield redevelopment issues including questions related to tax credits, environmental remediation and covenants. His legislative experience includes defeating a proposed tax on a recycling facility and submitting comments on proposed regulatory rules.

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