Hawkes Company is a family-owned business in Minnesota that harvests peat moss, for landscaping, in nearby bogs. The U.S. Army Corps of Engineers improperly claimed jurisdiction over the property as regulated wetlands. This put Hawkes in the untenable position of (1) abandoning all use of the land at great loss; (2) spending several hundred thousand dollars to seek an unnecessary federal permit; or (3) using the land without federal approval at the risk of $37,500-a-day fines and criminal prosecution. When Hawkes challenged the Corps in court, lower courts dismissed the case as unripe for review. But the Supreme Court disagreed, holding that a Jurisdictional Determination is a binding legal decision subject to immediate judicial challenge.
The Pierce family in Marshall County, Minnesota, own and operated peat moss harvesting businesses to provide high-quality peat for golf course greens. Peat naturally occurs in bogs, which are temporarily drained for harvest, and then restored by replacing the topsoil and allowing wetland characteristics to reemerge. Although the bogs are wetlands, not all wetlands are subject to federal jurisdiction under the Clean Water Act. The Corps of Engineers may assert jurisdiction and regulate the property only if the wetlands have some connection to waters of the United States. When Hawkes and its partners sought approval from the state Department of Natural Resources to harvest peat on approximately 150 acres of land adjoining their current operations in Minnesota, the Corps asserted jurisdiction over Hawkes’ property, and Hawkes filed a lawsuit to challenge the determination.
Lower courts dismissed the lawsuit on the grounds that the Corps’ “Jurisdictional Determination” was not a final order that could be reviewed in court. The Supreme Court agreed to review the case and unanimously decided that landowners have a right to challenge such federal agency determinations in court. The Court agreed that it is absurd to spend years and hundreds of thousands of dollars for a permit that wouldn’t be necessary if the Corps is incorrect about its jurisdiction over the property. The property owners also should not have to forgo their business plans, or risk draconian penalties, without an opportunity to make their case in court.
On remand, the federal district court ruled the Corps had gone too far and failed to provide site-specific evidence that the Hawkes property would have a significant effect on a downstream navigable water located 90 miles away. As a result, the property was not subject to federal regulation under the Clean Water Act.