Perhaps a Corps Jurisdictional Interpretation is Final Agency Action After All

Posted on April 16, 2015 by Seth Jaffe

After Sackett, the question on everyone’s mind was “How far does it go?”  The first test of that question was the decision by the 5th Circuit Court of Appeals – not known as a bastion of liberalism – in Belle Company v. Corps of Engineers, holding that a Corps jurisdictional determination is not final agency action subject to judicial review.  Late last week, however, in Hawkes Co. v. Corps of Engineers, the 8th Circuit disagreed, creating a circuit split.

As we noted at the time, the 5th Circuit decision in Belle focused on the differences between the Sacketts’ position facing an enforcement order and that of Belle Company facing a Corps JD.  As the 5th Circuit emphasized, the JD did not require Belle Company to do anything.  Nor did the JD expose Belle Company to penalties.  Nor did it prejudice Belle Company’s ability to obtain a permit.  Nor did it include a finding of a CWA violation.

The 8th Circuit took a different tack, focusing instead on the one great, glaring similarity between the enforcement order in Sackett and the JD in Hawkes Co. – in both cases, the Corps’ decision, as a practical matter, defined the property owner’s rights and ended the proceeding.

It’s not obvious to me that the Supreme Court will take the case, even with the circuit split.  I don’t think that the Court likes these cases.  On the other hand, it is obvious that the conservative wing of the court sees Sackett as a very important decision and there could well be four votes to decide the issue at this point.

If the Court does take the case, all bets are off.  I think that the 5th Circuit still has the better of the legal argument, and I expect that will be sufficient for all but the most ardent property rights advocates on the Court.  Whether there are five ardent property rights advocates on the Court is what remains to be seen.

Toppling Caligula’s Column: Time To Clarify Murky Jurisdictional Waters

Posted on January 28, 2015 by Zach C. Miller

Caligula was the cruelest and craziest of a string of deranged Roman emperors.  Among his meanest and most irrational acts was to have edicts carved at the top of tall columns and then punish unsuspecting violators, who had no way to decipher the obscure laws etched far over their heads.  For this and other cruel acts, he was killed by his own Praetorian Guards.

For all its virtues, American environmental law has traces of this same sort of lunacy and unfair lack of certainty and notice to its regulated citizens.  Examples include the chronic uncertainty, after over three decades, about what constitutes a “solid” or “hazardous waste” under RCRA, our basic waste management law, and what constitutes a “major modification” that triggers the onerous PSD Program of the Clean Air Act. 

Nowhere is this uncertainty more glaring than in the Clean Water Act (CWA).  More than 40 years after its passage, what constitutes a vaguely-defined “water of the U.S.” regulated under the Act is now murkier than ever.  At this juncture, however, EPA and the Army Corps of Engineers have a unique opportunity to provide clarity, certainty, and consistency to this key concept by taking three critical actions that would (1) properly clarify by rule the nature and scope of CWA-regulated waters; (2) clearly describe the process for making and also tracking “jurisdictional determinations” made under such rule; and (3) provide affected parties the right to seek prompt judicial review of any final approved determination.

EPA and the Corps have undertaken the first key task by an ongoing rulemaking set to be completed in 2015.  While aspects of the agencies’ initial proposed rule were problematic, calls by some quarters to ban or “ditch the rule” altogether are misguided.  EPA and the Corps already have on the books vague rules defining regulated waters that are inconsistent with the Supreme Court‘s 2006 Rapanos decision and subsequent case law, and it is in no one’s interest simply to maintain the current status quo of uncertainty and inconsistency.  As Chief Justice Roberts emphasized in Rapanos, if the agencies had adopted reasonable rules clarifying the scope of regulated waters a decade ago, as originally planned, the confusing result in Rapanos would likely have been avoided.

In finalizing such rule, however, the agencies should recall that their role and legal duty is to identify and implement the intent of Congress under the 1972 Act, not embark on a policy making exercise about what additional areas should be regulated as a matter of public policy.  They should also strive to increase, not decrease, the clarity and certainty of what constitutes regulated wetlands and other waters.  For example, aspects of the proposed rule properly and helpfully exclude groundwater and minor ephemeral drainages but then elsewhere create confusion and inconsistency by suggesting that subsurface hydrologic connections and overly broadly defined tributaries can still make an area jurisdictional.  Overly expansive proposed approaches to determining “adjacency” and aggregating numerous small areas for their cumulative nexus to downstream navigable waters similarly increase, rather than lessen, the current regulatory confusion and uncertainty.  Whether the pending rulemaking is a helpful clarification, or just yet another Caligula’s column, depends on how the agencies resolve those and other problematic provisions in the final rule.

The agencies should also use this occasion to develop a specific process and procedures for making approved “jurisdictional determinations (JDs)” under the final rule.  That process should include improved procedures for regulated entities to present evidence that an area is not a “jurisdictional water” under the Act, and for the agencies to track and publically post all final approved JDs as they are made, so they can be used to ensure consistency and inform the public about past determinations in an area.

The third critical fix to make this JD process fair and transparent is to provide that final agency jurisdictional determinations are subject to judicial review.  The Corps’ rules already provide for an administrative appeal of approved JDs, as well as proffered or denied 404 permits.  33 CFR Part 331.  Inconsistent with that appeal process, however, the Corps and EPA have taken the position that their final decisions on JDs, unlike permitting decisions, are not judicially reviewable “final agency actions” under the Administrative Procedure Act (APA).  The 5th Circuit agreed with that position in July 2014 in Belle Company, LLC  v. U.S. Army Corps of Engineers, which is subject to a pending Petition for Certiorari to the U.S. Supreme Court.  In a pending appeal of this issue before the 8th Circuit in Hawkes Co. v. U.S. Army Corps of Engineers, two judges during oral argument on December 11, 2014 indicated disagreement with Belle, suggested the agencies’ position is inconsistent with the Corps’ administrative appeal rules, and described this claimed exemption from judicial review as “government by regulatory tyranny.”  An eventual adverse ruling by the 8th Circuit would greatly increase the odds of the Supreme Court granting certiorari in the Belle case or later in the Hawkes case.  The agencies could avoid that uncertainty and the cost, effort, and risk of litigating this issue before the Supreme Court by simply confirming by rule that final approved JDs are final agency actions subject to judicial review under the APA.  That confirmation would be consistent with the Corps’ administrative appeal rules and the Supreme Court’s 2012 ruling in Sackett v. EPA, which held that EPA compliance orders (that have a parallel practical effect) are subject to judicial review.

EPA and the Corps are at a crossroads.  They can decide to make the definition and identification of jurisdictional “waters of the U.S.” subject to the Clean Water Act clear, consistent, based on Congress’ original intent in 1972, and subject to prompt, objective judicial review.  Or, they can decide to keep that process complex and ambiguous, expanded beyond Congress’ original intent, determined case-by-case in the varying judgment of agency personnel, and unreviewable by any court – in effect etched on a proverbial Caligula’s column.  The choice should be clear.  It’s time to knock that column down.