WASHINGTON, Jan. 26, 2017 – The Army Corps of Engineers cannot require a permit to mine peat on a Minnesota tract because it could not show a sufficient connection between wetlands on the property and the nearest navigable water, a federal judge has ruled.

The decision could conclude a multiyear effort by Hawkes Co. to mine peat from 150 acres of wetlands in northwestern Minnesota. A Justice Department spokesman said DOJ had not decided whether to appeal, but with the Trump Administration now in charge, it seems unlikely that the Corps or DOJ will want to prolong the matter.

The case has already been to the Supreme Court, which affirmed an 8th Circuit ruling that Hawkes and the companies that own the property, Pierce Investments and LPF, can challenge Corps jurisdictional determinations (JD’s) in court.

“Probably the most important thing” about the ruling by U.S. District Judge Ann Montgomery, Hawkes attorney Gregory Merz said, is it shows that “the courts are not going to just be rubber stamps for whatever the Army Corps says about its jurisdiction.” Instead, they will provide “an appropriate degree of scrutiny.”

The American Farm Bureau Federation also was pleased. General counsel Ellen Steen said

“the decision illustrates how the Corps (and EPA) commonly assert regulatory power over isolated wetlands, with no real evidence of any significant connection to any navigable waters.”

Most landowners do not have the resources to fight those decisions, Steen said. “That’s why we need action by the incoming administration to develop new regulations that respect the limits on federal power and create clarity and certainty for regulators and landowners.”

The Corps’ initial JD, issued in February 2012, concluded that a permit was needed because the wetlands are part of a 591-acre wetlands complex “that flows through a man-made ditch, then into an unnamed seasonal tributary, then to the Middle River, and ultimately to the Red River,” more than 90 miles away, Montgomery said in her opinion.

Hawkes appealed the decision through the Corps’ administrative process, and the Corps review officer found that the JD did not adequately demonstrate a connection between the wetlands and the Red River. The Corps’ revised determination upheld the initial JD, which is when Hawkes and the other companies sued.

Montgomery agreed with the Corps that the revised JD was not judicially reviewable, but the 8th Circuit reversed and the Supreme Court affirmed that holding, putting the matter back in Montgomery’s court.

She said the Corps’ revised JD simply repackaged the findings of the initial JD. “The revised JD is based on essentially the same information and documentation that was already determined by the (Corps) review officer to be insufficient for establishing more than a speculative or insubstantial nexus between the wetlands and the Red River,” Montgomery said.

“To the extent that the revised JD includes additional information, the added information fails to remedy the deficiencies in the initial JD that were identified by the review officer,” Montgomery said.

The judge rejected the Corps’ request to allow it to fix things.

“After falling short in the initial JD, the Corps was given a chance to supplement the Administrative Record with additional site-specific evidence and information to support its significant nexus determination,” the judge said. “It did not do so. Allowing the Corps a third bite at the apple would force plaintiffs back through a ‘never ending loop.’”

Montgomery specifically enjoined the Corps from asserting jurisdiction over the wetlands, a conclusion she said she did not reach “lightly.”

“The court is aware that peat mining can have significant impacts on the environment,” Montgomery said. “However, peat mining and processing is regulated in Minnesota through permits issued by the Minnesota Department of Natural Resources, thereby ensuring that

plaintiffs’ peat mining operations will not go unregulated or unchecked.”

Plaintiffs’ attorney Nancy Burke, a colleague of Merz’s at Gray Plant Mooty in Minneapolis, said the DNR is currently conducting an environmental review. Once that’s done, she said that the project will need permits from the DNR for peat mining and wetland impacts, and from the Minnesota Pollution Control Agency for discharges related to construction and operations.   


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