Challenges to Corps Waters Findings Still a Trickle After Ruling

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A U.S. Supreme Court decision giving property owners the right to sue over findings that wetlands or waters on their property may be subject to Clean Water Act protections hasn’t unleashed the flood of litigation many expected, attorneys told Bloomberg BNA.

One reason may be that it still is too early, as the decision was only handed down last spring. Another may be that it is just too expensive and time-consuming to undertake such a challenge.

Yet another reason may be the Trump administration’s pledge to make permitting more streamlined and less burdensome for businesses.

Neil McAliley, shareholder attorney in the Miami office of Carlton Fields Jorden Burt P.A., said he wasn’t surprised to learn there hasn’t been an increase in challenges to jurisdictional determinations made by U.S. Army Corps of Engineers.

“The decision is still fairly recent, and any such challenges would be unlikely to garner widespread attention in their early stages,” McAliley said

He was referring to the high court’s decision in the case of the Hawkes Co., a peat mining company that pushed for a right to challenge a final jurisdictional finding of wetlands made by the corps. The court said a determination by the corps that a parcel of land contained wetlands or other protected waters was considered a final agency action subject to judicial review (U.S. Army Corps of Eng’rs v. Hawkes Co.136 S. Ct. 1807, 82 ERC 1465, 2016 BL 171974 (2016)).

The Clean Water Act doesn’t require jurisdictional determinations, but such a finding means a landowner would have to obtain a Section 404 dredge-and-fill permit for activities that may affect any protected waters on the property, as was the case with Hawkes Co.

Business-Friendly Corps

Peter McGrath, an attorney with the Charlotte, N.C., office of Moore Van Allen PLLC, has a more nuanced explanation for why more challenges haven’t been filed as yet.

“It will be interesting to see if the Trump administration causes the corps to become more business friendly in making its initial jurisdictional determinations, but I think if the corps acts as they have in the past, by trying to assert jurisdiction over as wide an area as possible, an uptick in litigation is practically inevitable,” McGrath said.

Nearly all attorneys interviewed by Bloomberg BNA agree they haven’t seen any uptick yet, while some say they don’t expect to see an increase any time soon.

“No, not aware of any uptick,” Cynthia Taub, a partner with Steptoe & Johnson LLP in Washington, D.C., told Bloomberg BNA Feb. 14.

A jurisdictional finding takes time to materialize, particularly the final approved version, because it requires field visits to the property.

The length of time it takes to obtain a corps jurisdictional finding depends on the region, complexity of the project, and whether the corps believes the finding will be challenged, according to McAliley, who said he has seen the corps take a few months to several years in issuing approved determinations in Florida.

But that isn't the only countervailing factor preventing what could be an uptick in challenges, Taub said.

“One is that challenging a jurisdictional determination is still an expensive and time-consuming proposition,” Taub said.

Some applicants may find it easier to go for the permit than undertake an appeal, while others may be hesitant to sue the corps, since they may have to work with them in the future, she said.

Kirsten Nathanson, an attorney who specializes in environmental practice at Crowell & Moring LLP in Washington, D.C., agreed it takes time for the corps to go through the process of asserting jurisdiction. But she said, “whether litigation will pick up will be dependent on how aggressively the corps interprets the scope of its jurisdiction in this new administration.”

Exhausting Administrative Remedies

A property owner may exhaust administrative remedies by going through the appeals process at the corps instead of suing in court, some attorneys said.

The purpose of an administrative appeals process is to correct errors internally before resorting to courts.

“If the appeals process works as it should, landowners may be able to avoid the cost of litigation altogether by winning their challenge on administrative appeal,” said Reed Hopper, the nonprofit Pacific Legal Foundation’s principal attorney who represented the Hawkes Co. before the Supreme Court in its quest for the right to challenge jurisdictional determinations.

But exhausting administrative remedies before resorting to a legal challenge isn't a requirement, corps spokesman Doug Garman told Bloomberg BNA in November when the agency issued its guidance in response to the Hawkes decision .

Property owners can challenge a jurisdictional finding in court without having to go through either the permit process or an administrative appeals process, Garman said at the time.

Despite this clarification from the corps, many lawyers continue to claim the corps requires the applicants to exhaust the administrative review process because the corps didn't explicitly spell out that option in its guidance.

As for administrative appeals, the corps hadn’t seen any increase, significant or otherwise, Garman told Bloomberg BNA Feb. 14.

‘Free Ride’

It is immaterial whether a property owner chooses to challenge a federal finding through the corps appeals process or in courts, several attorneys said. The right to sue shouldn’t be seen as a “free ride” for dredging and filling wetlands and streams without the requisite permit, cautioned Larry Liebesman, a senior adviser to Washington D.C.-based Dawson & Associates.

In either case, the onus is on the property owner to show evidence to counter the corps' claims of jurisdiction, Liebesman said.

The administrative appeals process, in fact, gives the corps more time to collect evidence to back its claim that in some cases can be detrimental to the property owner’s interests, he added.

McAliley agrees that parties who challenge a corps jurisdictional determination won't necessarily win. “The Hawkes case just allows challengers to get into court, but the court will still have to adjudicate each case on its facts,” he said.

Change in Case Types

But McAliley predicts the types of cases that may appear before the court may not be the same as they were before the Hawkes ruling. The nature of federal wetland legal practice may change, with more cases being filed by private parties, McAliley said, as he alluded to in his Feb. 10 talk at the American Law Institute-Continuing Legal Education seminar on Environment Law.

In the past, McAliley said, courts were asked to rule on enforcement cases the corps and Environmental Protection Agency brought against developers and landowners that refused to obtain permits for dredging and filling wetlands deemed jurisdictional by the corps. Also, the corps’ claims of jurisdiction couldn’t be challenged until a permit was issued or denied, he said.

“After the Hawkes case, private parties now can decide which cases to bring to court, which means courts may consider more circumstances where Clean Water Act jurisdiction is more marginal,” McAliley said. “Over time, one might expect there to be more decisions that a given site is not within the scope of Clean Water Act jurisdiction.”

For instance, in January the U.S. District Court for the District of Minnesota, upon remand from the Supreme Court, refused to allow the corps a “third bite at the apple” to issue a Clean Water Act jurisdictional determination over the peat bogs that Hawkes Co. wanted to mine. The court rejected the corps' initial and revised finding of jurisdiction because the agency failed to provide evidence in each instance ( Hawkes Co. Inc. v. U.S. Army Corps of Eng’rs, 2017 BL 19962, D. Minn., No. 13-107, 1/24/17).

McAliley saw that ruling as an example of courts increasingly taking on the roles to find jurisdiction when the corps has fallen short.

Unique to Hawkes

Liebesman, Hopper and others consider the circumstances in the Hawkes remand unique and expect most future jurisdictional challenges to be resolved at the administrative appeals process.

What Liebesman does expect is heightened scrutiny of the corps' claims of jurisdiction. The federal court in Minnesota made it clear the corps didn’t provide quantitative evidence to claims of jurisdiction in Hawkes.

McGrath also doesn’t expect courts to substitute their own judgment for that of the corps.

“I think almost all courts will either accept the dorps’ determination, or find fault with the corps’ determination, and order the corps to redo the determination itself,” he said.

The corps for its part may simply limit itself to preliminary jurisdictional determinations whenever possible to avoid getting into a Hawkes-like situation where its final approved finding is rejected by the courts, according to Nathanson, of Crowell & Moring.

Less Priority to Stand-Alone Findings

Taub thinks fewer cases of the Hawkes variety will make it to the courts because the corps made it clear in its November guidance that it would give less priority to stand-alone jurisdictional determinations for owners who want to find out whether they have federally protected wetlands or waters on a property.

In the instance of Hawkes, the Minnesota mining company had approached the corps to determine whether the peat wetlands on its property fell under Clean Water Act protections.

“If the Corps starts to slow down/limit stand-alone, final [jurisdictional determinations], this could limit future ‘ Hawkes’ challenges,” Taub said.

For More Information

The U.S. Army Corps of Engineers’ regulatory guidance letter on jurisdictional determinations is available at http://src.bna.com/jMq.

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