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Wetlands, Peat, and Permits: The U.S. Supreme Court Makes Challenges to the Clean Water Act Easier
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By Marianne Jennings

6/5/2016

 

Hawkes Co., a North Dakota-based corporation, wanted to harvest peat from wetlands in the northern area of Minnesota on a 530-acre tract that it owned. The Army Corps of Engineers determined that the property with the peat was located on “waters of the U.S.” and could not be used by Hawkes without a permit under the Clean Water Act (CWA). The Army Corps of Engineers said that the wetlands were of exceptional quality and had a significant nexus with the Red River that required federal supervision. Hawkes argued that the land was far away from the Red River (120 miles) and that it had no connection to any navigable waters. U.S. Army Corps of Engineers v. Hawkes, Co., Inc., 2016 WL 3041052 (2016)

 

The Army Corps of Engineers, as an administrative agency, argued that Hawkes had to first go through the process of permitting to exhaust administrative remedies before it could have a court make the determination of whether the wetlands constituted navigable waters for purposes of the CWA. However, if Hawkes just went ahead without the permit and incurred penalties, those penalties could be $37,500 per day.

 

The federal district court found (Hawkes Co. Inc. v. U.S. Army Corps of Engineers, 963 F. Supp. 2d 868 (D. Minn. 2013) for the Corps. The appellate decision reversed that lower court decision and remanded (782 F.3d 994 (8th Cir. 2015)), but the U.S. Supreme Court granted certiorari. In a decision in which six justice concurred, and Justice Ginsburg mostly concurred, the court held that the permitting process was “arduous and expensive” and that companies needed the right to have a determination made on the jurisdiction of the CWA before requiring the permit process. Determining whether a particular piece of property contains waters of the United States is difficult, but there are important consequences if it does. The CWA imposes substantial criminal and civil penalties for discharging any pollutant into waters covered by CWA without a permit from the Corps. (33 U.S.C. §§ 1311(a), 1319(c), (d), 1344(a)). The costs of obtaining a permit are average about 788 days and $271,596 in costs.

The case was argued for Hawkes by a lawyer for the Pacific Legal Foundation, who said that the case is a victory for the property rights of individuals who have had their rights curbed by unilateral determinations of agency jurisdiction under CWA.

 

Several of the concurring opinions took aim at the Clean Water Act’s “notoriously unclear provisions” that allow federal agencies such broad jurisdiction against property owners who may not have the means to litigate the claim of navigable waters.

 

The EPA has issued new regulations attempting to clarify (and actually broaden) what wetlands are covered under the Clean Water Act, but those regulations are under legal challenge.

 

The court’s nearly unanimous holding means that companies can challenge federal agency’s unilateral determination of CWA application before either seeking permits or incurring fines. The court concluded its decision with this summary:

 

the Corps emphasizes that seeking review in an enforcement action or at the end of the permitting process would be the only available avenues for obtaining review “[i]f the Corps had never adopted its practice of issuing standalone jurisdictional determinations upon request.” True enough. But such a “count your blessings” argument is not an adequate rejoinder to the assertion of a right to judicial review under the APA.

 

Discussion Starters

 

Explain what the Corps had done and why.

 

Explain why the exhaustion of administrative remedies is not necessary for a review of an agency’s determination of CWA application.