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SCOTUS Dives Into the Murky Waters of the CWA, APA

By Casey C. Sullivan, Esq. | Last updated on

The goal of the Clean Water Act is fairly straight forward: to protect and restore the waters of the United States. But what counts as "waters of the United States" is often a tricky and highly contentious question. And if federal agencies determine that your isolated marsh, seasonal ponds, or agricultural slough are subject to regulation under the act, then a whole host of legal restrictions can suddenly apply. Yet, you may not be able to challenge that determination until years in the future.

That is to say, CWA disputes can quickly get a bit murky. The Supreme Court jumped right into those muddy waters today, in its first major environmental case since the death of Justice Scalia. The court heard arguments in a challenge to CWA determinations that blended environmental and administrative law with questions of justice and jurisdiction.

What Flows From CWA Jurisdiction Determinations

The Clean Water Act regulates the nation's "navigable waters," which it defines as the "waters of the United States," also known as WOTUS. As part of the CWA, anyone who wishes to discharge dredged or fill material into applicable waters, including wetlands, needs a Section 404 Permit.

The Section 404 permitting program is administered by the U.S. Army Corps of Engineers and places strong limits on the loss of wetlands and degradation of water. The program requires mitigation of environmentally destructive impacts and compensation of other, non-avoidable impacts. In practice, that compensation usually takes the place of offsetting wetland loss through the creation, enhancement, or preservation of wetlands, streams, and other resources.

Hawkes Co., a company that wishes to mine peat from wetlands in northwestern Minnesota, asked the Corps for a jurisdictional determination, a ruling by the Corps over whether the wetland was subject to the CWA. Those determinations are purely administrative and voluntary, lasting only five years.

To Hawkes Co.'s chagrin, the Corps of Engineers determined that the wetlands were WOTUS. (After all, a major focus of the program is the preservation of wetlands.) As such, Hawkes Co. could be required to get a Section 404 permit before embarking on its peat mining venture or risk significant punishment in the future.

Is a Jurisdictional Determination Final Agency Action?

Hawkes Co., sued. While the EPA and Corps of Engineers have adopted expansive interpretations of WOTUS (the EPA's most recent WOTUS Rule is currently being litigated), the Corps' jurisdictional determination here wasn't justified under the Act, Hawkes argued. After all, these were isolated marshlands, over 100 miles from the nearest actually navigable waters.

That suit came too soon, the Corps argued. Under the Administrative Procedure Act, a party can challenge an agency action, but that action must be final. Since the actual rights and consequences that flow from a jurisdictional determination are established during the permitting process, the Corps argued, there was no final action to challenge.

The case is, in many ways, an extension of the Court's 2012 ruling in Sackett v. EPA. There, the Court found that "compliance orders" could be challenged as final agency actions, even before the EPA had taken legal steps to enforce the order.

Supreme Court Swims Hawkes Co.'s Way

Opponents to CWA jurisdiction, such as developers, property rights advocates, and agricultural interests, view early challenges to jurisdiction determinations as an important way to avoid potentially massive penalties and prevent the federal agencies from strong-arming individuals into compliance. The government, as well as many environmentalists and state agencies, view early challenges as unnecessary roadblocks to effective enforcement of the act.

In oral arguments today, the Justices seemed more sympathetic toward Hawkes Co.'s position. Though the Corps held that such jurisdictional determinations were not final -- the Corps could always change its mind later, it argued -- even liberal justices were skeptical. As Justice Sotomayor pointed out, while the Corps might reserve the right to change its jurisdictional determination, it has never done so in the past.

Justice Ginsburg mentioned the "arduous and very expensive" nature of the permitting process Hawkes Co. would have to go through if it could not challenge the determination beforehand.

Chief Justice Roberts emphasized that the risk involved with disregarding a jurisdictional determination -- potentially huge fines and years of imprisonment -- essentially made them inescapable.

But the arguments weren't a total loss for the Corps. While the justices were sympathetic to Hawkes Co., several pointed out the practical implications of allowing challenges to early determinations. If you could challenge a WOTUS determination, why not challenge Treasury Department tax letters, even though no enforcement action has flowed from that advice? Why not sue over advice from the SEC? Those are just two of "at least a hundred different examples," Justice Kagan noted, where early challenges could severely disrupt the functioning of the government.

Who knows if those considerations will be enough to save the Corps, however. It may take the justices several months to determine if the existing CWA procedures will stay afloat.

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