Property Owners Find Relief in Supreme Court Decision on Jurisdictional Determinations

By Christina M. Sartorio

Property owners who have been impacted by whether wetlands or waters are under the jurisdiction of the United States Army Corps of Engineers have received long-awaited guidance from the United States Supreme Court. Pursuant to a recent Court ruling, property owners will now be able to challenge the Army Corps’ jurisdictional determination. This is expected to save property owners the additional time and money otherwise required in obtaining a permit before initiating such a challenge.

Under the Administrative Procedure Act (“APA”), courts can only review a challenged agency or government decision if it is considered a “final agency action.” In U.S. Army Corps of Eng'rs v. Hawkes Co., 2016 BL 171974, U.S., No. 15-290, May 31, 2016, a Minnesota peat producer challenged a 2012 determination that wetlands existed on its property and, therefore, the company would be required to obtain a Section 404 dredge-and-fill permit to extract peat from the property. The Army Corps of Engineers argued that this jurisdictional determination was not a final agency action because a property owner faced with such a determination had adequate alternatives: specifically, the property owner could choose to either discharge without the required permits or obtain the permit and challenge it in court.

The Supreme Court rejected the Army Corps’ arguments, emphasizing the substantial criminal and civil penalties imposed for discharging into waters covered by the Clean Water Act without a permit. The Supreme Court held that a jurisdictional determination is a consummation of the agency decision-making process and, therefore, a jurisdictional determination, in itself, is a judicially reviewable final agency action.