Supreme Court weighs review of Army Corps’ jurisdiction decisions

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The Supreme Court may decide as soon as Mon­day to review a high-pro­file case on whether an Army Corps of Engi­neers deter­mi­na­tion that prop­er­ty qual­i­fies for Clean Water Act pro­tec­tions can be chal­lenged in court.

In Kent Recy­cling Ser­vices LLC v. Army Corps of Engi­neers, the jus­tices are pre­sent­ed with the ques­tion of whether a corps “juris­dic­tion­al deter­mi­na­tion” for a wet­land qual­i­fies for judi­cial review.

Busi­ness and farm groups, prop­er­ty right activists, and Louisiana Sen. David Vit­ter — who was for­mer­ly the top Repub­li­can on the Sen­ate Envi­ron­ment and Pub­lic Works Com­mit­tee — have all urged the court to take up the case.

They con­tend that a corps deci­sion that prop­er­ty is juris­dic­tion­al, and there­fore qual­i­fies for Clean Water Act pro­tec­tions, places sig­nif­i­cant bur­dens on its own­er — includ­ing hav­ing to apply for cost­ly per­mits or being sub­ject­ed to penal­ties to the tune of thou­sands of dol­lars per day.

These are not legit­i­mate options,” the peti­tion­er, Kent Recy­cling, said in court doc­u­ments.

The case presents the high court the oppor­tu­ni­ty to go one step fur­ther than it did in a 2012 Supreme Court Clean Water Act case, Sack­ett v. U.S. EPA. Then, the jus­tices unan­i­mous­ly ruled that an EPA com­pli­ance order is a final agency action that can be chal­lenged in court.

If the court does review the case, it could have sig­nif­i­cant impli­ca­tions for the Oba­ma administration’s pro­posed Waters of the Unit­ed States juris­dic­tion­al rule, which is set to be final­ized this year.

Kent Recy­cling con­cerns a tract of south­ern Louisiana land and dates back to 1991 when its own­er, Belle Co. LLC, tried to sell the prop­er­ty to Kent Recy­cling for use as a land­fill.

At the time, the corps told Belle that the land qual­i­fied as a “pri­or-con­vert­ed crop­land” and wasn’t sub­ject to Clean Water Act juris­dic­tion. EPA lat­er con­firmed that pol­i­cy.

In 2003, how­ev­er, the corps reversed itself, say­ing its pre­vi­ous cor­re­spon­dence wasn’t valid. Two years lat­er, it put new reg­u­la­tions on the books that said pri­or-con­vert­ed wet­lands would be exempt from Clean Water Act pro­tec­tions only if they were still being used for agri­cul­ture.

The Belle prop­er­ty wasn’t, and in 2011 the corps issued a final deter­mi­na­tion that the prop­er­ty qual­i­fied as juris­dic­tion­al and there­fore the com­pa­ny would have to apply for a per­mit.

Both com­pa­nies chal­lenged the juris­dic­tion­al deter­mi­na­tion, or JD, in court.

The 5th U.S. Cir­cuit Court of Appeals, how­ev­er, sided with the corps last July and drew a sig­nif­i­cant dis­tinc­tion between a JD and EPA com­pli­ance orders that were at issue in Sack­ett.

By con­trast, the JD is a noti­fi­ca­tion of the property’s clas­si­fi­ca­tions as wet­lands but does not oblige Belle to do or refrain from doing any­thing to its prop­er­ty,” wrote Judge Stephen Hig­gin­son, who was appoint­ed by Pres­i­dent Oba­ma.

Fur­ther, the com­pli­ance order made the Sack­etts sub­ject to future enforce­ment pro­ceed­ings, includ­ing fines.

The JD erects no penal­ty scheme,” Hig­gin­son said. “It impos­es no penal­ties on Belle. And nei­ther the JD nor Corps reg­u­la­tions nor the [Clean Water Act] require Belle to com­ply with the JD.”

There­fore, he con­clud­ed, a JD is not a final agency action that is eli­gi­ble for court review under the Admin­is­tra­tive Pro­ce­dure Act (Green­wire, July 31, 2014).

The case is slat­ed to be con­sid­ered at the jus­tices’ pri­vate con­fer­ence tomor­row. It takes the votes of four jus­tices to grant a case, and at this point in the court’s term an order on whether it has tak­en up or denied review is like­ly to come Mon­day, or the jus­tices may hold the peti­tion for future con­sid­er­a­tion.

Incredibly significant’ consequences

Sev­er­al Clean Water Act lawyers who typ­i­cal­ly rep­re­sent prop­er­ty own­ers and indus­try inter­ests hope the jus­tices will take up the case.

They note, as Kent Recy­cling did, that a juris­dic­tion­al deter­mi­na­tion can force a prop­er­ty own­er to either aban­don a project, go through a per­mit process that typ­i­cal­ly takes two years and costs up to $270,000, or pro­ceed with­out a per­mit and risk fines of up to $37,500 per day.

It impos­es a lot of hard­ship on the peo­ple try­ing to devel­op land because if they go ahead, they do so at their own per­il,” said Richard Schwartz, a Clean Water Act lawyer at Crow­ell & Mor­ing. “The con­se­quences are incred­i­bly sig­nif­i­cant, and there should be judi­cial review.”

Tim Bish­op of May­er Brown in Chica­go, who has argued water cas­es before the Supreme Court, was more emphat­ic.

Under the Clean Water Act, he said, “a des­ig­na­tion imme­di­ate­ly affects how you can use your prop­er­ty and its val­ue. It is tru­ly absurd to hold that a des­ig­na­tion has no legal con­se­quences.”

Vit­ter, the Amer­i­can Farm Bureau and the Nation­al Fed­er­a­tion of Inde­pen­dent Busi­ness have also asked the Supreme Court to review the case.

The corps makes sev­er­al coun­ter­ar­gu­ments. Pro­ce­du­ral­ly, it notes that Kent Recy­cling is not the actu­al own­er of the prop­er­ty — Belle is. Kent Recy­cling had an option to buy the land if it can be used as a sol­id-waste land­fill.

Belle, the corps notes in court doc­u­ments, has stopped pur­su­ing the case after the 5th Cir­cuit rul­ing. Kent Recy­cling, under the government’s rea­son­ing, there­fore lacks stand­ing and can’t prove it is direct­ly harmed by the JD.

Fur­ther, the corps said Belle has since pro­posed to use the prop­er­ty as part of a mit­i­ga­tion bank — that is, to pre­serve it as wet­lands to com­pen­sate for impacts on oth­er water bod­ies.

Belle’s action rais­es ques­tions about the con­tin­ued exis­tence of the petitioner’s option to pur­chase the prop­er­ty and the extent of its con­tin­u­ing inter­est in the prop­er­ty,” the Jus­tice Depart­ment wrote in a court brief. “In addi­tion, if Belle suc­ceeds in trans­form­ing the prop­er­ty into a mit­i­ga­tion bank, it is unlike­ly that this case would remain live.”

The gov­ern­ment also sup­port­ed the 5th Circuit’s con­clu­sions regard­ing the dif­fer­ence between a JD and the com­pli­ance orders from Sack­ett. And it point­ed out that the 9th U.S. Cir­cuit Court of Appeals reached the same con­clu­sion.

Pat Par­enteau, an envi­ron­men­tal law pro­fes­sor at Ver­mont Law School, agreed with that assess­ment and didn’t think the court would bite on review­ing the case.

I don’t think it’s any­thing like Sack­ett,” he said. “There is no sanc­tion here at all.”