WASHINGTON, March 30, 2016 - The federal government ran into some tough questioning from the Supreme Court today in a case that could determine when landowners can challenge Army Corps of Engineers wetlands determinations.

Most of the justices were skeptical of Deputy Solicitor General Malcolm Stewart’s argument that a Corps jurisdictional determination (JD) is merely an expression of the agency’s “opinion” of whether the property in question is a wetland and thus should be regulated under the Clean Water Act. In the case at issue, Minnesota peat farmers want to expand their operations onto 150 acres that the Corps has deemed wetlands and thus technically “waters of the U.S.,” despite being 120 miles from the nearest navigable water (U.S. Army Corps of Engineers v. Hawkes Co., 15-290; a transcript of the arguments is here).

M. Reed Hopper, an attorney with the Pacific Legal Foundation who is representing the landowner in the case, was confident after the oral arguments, telling reporters, “It’s clear that the justices are not buying the government argument that this is not final agency action. I think on balance, we can expect a favorable ruling.”

The government contends that landowners seeking to conduct activities in wetlands need to receive an unfavorable permit decision before they can go to court. But the Hawkes Co., the landowner in this case, decided to sue after receiving an unfavorable JD. The 8th Circuit agreed with Hawkes that the JD represented final agency action under the Administrative Procedure Act, and the government petitioned the Supreme Court for review. The American Farm Bureau Federation and National Cattlemen’s Beef Association joined an amicus brief supporting Hawkes. The California Farm Bureau Federation also filed a brief.

Under pointed questioning from Chief Justice John Roberts, Stewart said a JD simply “expresses the Corps’ opinion” and has no binding effect.

But when he said that landowners would have to go through the entire permitting process in order to receive a judicially reviewable decision, Justice Ruth Bader Ginsburg called that process “very arduous and very expensive.” And Justice Stephen Breyer said an unfavorable jurisdictional determination results in “a change in legal relations” because the person subject to it must take certain steps to comply with it or risk moving forward with his plans and face enforcement action.

When Stewart said that a landowner always has the option of filling wetlands without a permit, Breyer chimed in, “Then he goes to jail!”

Breyer quoted from the government’s brief in the case, which said “the issuance of an approved jurisdictional determination marks the culmination of the distinct process by which the Corps informs a landowner whether the Corps believes that covered waters are present on a specified tract.”

“That doesn’t sound like someone giving informal advice,” Breyer observed, noting also that JD’s remain in effect for five years.

Stewart pivoted to the legal system, which frowns on considering issues before all the claims in a case have been resolved – a process known as an interlocutory appeal. He also said that allowing courts to review JDs would result in “piecemeal” litigation, a possibility that courts have traditionally sought to avoid.

Hopper also received his share of tough questions, but appeared to have a more sympathetic audience than his opponent. Justice Elena Kagan was the only justice who appeared to be wholly on the government’s side in the matter, though Hopper said afterwards he wasn’t sure if she was simply playing devil’s advocate.

Of the JD process, Kagan said, “It’s only supposed to give you more information,” but Hopper said, “It does more than that” by establishing an obligation – in this case, that Hawkes cannot use the area designated as wetlands.

Hopper said a JD that concludes wetlands are on a property exposes a landowner to an increased risk of enforcement, which Justice Anthony Kennedy thought sounded more like a “practical, not legal” effect. But Hopper replied, “I think that is legal, your honor.”

The Clean Water Act came in for some criticism, with Kennedy calling it “quite vague – arguably unconstitutionally vague.” Stewart, however, said that “with respect to the vast majority of sites in this country, it’s readily apparent whether the Clean Water Act applies.”

The arguments took place against the backdrop of legal challenges to the Corps/EPA “waters of the U.S.” rule, currently stayed while the 6th Circuit Court of Appeals and a federal judge in North Dakota decide who has jurisdiction. The 6th Circuit recently ruled that it did, but that court’s split ruling has resulted in a number of parties asking for en banc review – a rehearing of the case by all the court’s judges.

A decision from the court in Hawkes is expected in June.


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