July 25, 2011

An almost helpful judicial review decision

By An almost helpful judicial review decision

Author:  Damien M. Schiff

A federal judge in South Carolina earlier this month ruled in Deerfield Plantation Phase II-B Property Owners Association, Inc. v. U.S. Army Corps of Engineers that a "negative" jurisdictional determination (JD) issued by the Corps under the Clean Water Act is judicially reviewable.


  (A negative JD means that the Corps has determined that it does not have regulatory control over a site's wetlands or waterbodies).  The decision is interesting because the Ninth Circuit Court of Appeals held in Fairbanks North Star Borough v. US Army Corps of Engineers that courts cannot review positive JDs (PLF was lead counsel in that case).  Of course, it's very rare for a landowner to sue over a negative JD, because usually the landowner does not want jurisdiction but instead wants the okay from the Corps to begin land disturbance activity.  As it happens, the plaintiff-landowner here wanted to challenge the negative JD (perhaps because of some contractual or other advantage attendant upon federal jurisdiction being present).

In any event, the court's finality analysis seems a little perfunctory.  After distinguishing Fairbanks on the grounds that the case dealt with a positive JD and expressly declined to discuss whether a negative JD would be reviewable, the district court here concluded that the "undersigned is persuaded that legal consequences do flow from the Corps' 2010 JD ("negative" determination), as any developer of the property could conceivably immediately begin to fill and dredge the eighty-plus acres that the Corps determined to be non-jurisdictional."  That's not entirely so, for a court could ultimately find that the JD was arbitrary and capricious and that therefore the developer was liable; or the feds could reconsider and seek injunctive relief (although perhaps not fines) to keep the project from going forward.  I recognize that there may be an estoppel defense somewhere here (and perhaps some argument about good faith reducing civil penalty liability), but the Ninth Circuit rejected the idea that the opportunity for an estoppel defense (and presumably a good faith defense to a civil penalty) is enough to make an affirmative JD "final agency action."

In my view, so long as the agency action is the consummation of the administrative process (which even the Ninth Circuit acknowledged was so with respect to positive JDs), then whether legal consequences flow from the process's completion should not depend on the particular outcome.  In other words, the denial of a right has as much legal consequence, for purposes of enabling judicial review, as the grant of a right.  Unfortunately, the Ninth Circuit didn't grasp that point, and I doubt that the district court here did either.

 

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