July 31, 2014

Stale thinking, bad decision

By M. Reed Hopper Senior Attorney

For years, the Corps of Engineers has conducted Jurisdictional Determinations on private land.  These JD’s constitute an adjudicative determination as to whether an area has wetlands or other jurisdictional waters subject to regulation under the Clean Water Act.  Projects that result in a discharge of dirt (or other materials) to jurisdictional waters require a federal “discharge” permit with an average cost to the applicant of more than $270,000.

Although this cost is prohibitive, even punitive, the federal courts have routinely held that a project proponent must go through the permit process before challenging the accuracy of a Jurisdictional Determination in court.  In other words, land owners must pay an exorbitant “entrance fee” to get their day in court.  This is unfair, unnecessary, and, we believe, contrary to Supreme Court precedent.

In Belle Company v. Corps of Engineers, the company received a permit from the State of Louisiana to operate a landfill on private land.  The land was considered exempt from federal regulation until the Corps suddenly reclassified the land based on a questionable Jurisdictional  Determination that reversed the exemption.  When Belle sought to challenge the JD in court, the Corps argued that the Jurisdictional Determination was not subject to judicial review because the JD was essentially advisory and had no “independent” legal effect.

That was a winning argument for decades, but that should have changed with our Supreme Court victory in Sackett.  In Sackett, the EPA issued a compliance order commanding the Sacketts to restore their property to a pristine condition after allegedly filling in a small wetland on their half acre home lot without a federal permit, or face fines up to $75,000 a day.  When the Sacketts sought to challenge the EPA’s claim that the property contained jurisdictional wetlands, the EPA made the same argument the Corps made in Belle; that the order was advisory and had no “independent” legal effect.  But the Supreme Court disagreed and held agency action could be challenged in court so long as the action, like the compliance order, establishes a legal right or obligation.  An “independent” legal effect is not required.

Based on the Supreme Court’s reasoning in Sackett, Jurisdictional Determinations should be treated like a compliance order and subjected to judicial review.  Although a JD does not subject the land owner to fines or compel the land owner to take specific action, like a compliance order, a JD does establish a legal obligation for the land owner to obtain a federal “discharge” permit before proceeding with a specific project, even if the property is not subject to jurisdiction under the Clean Water Act.    However, yesterday, the Fifth Circuit Court of Appeals applied the same stale pre-Sackett reasoning in the Belle case that the lower courts have employed for decades to deny project applicants their day in court.

PLF filed an amicus brief in support of Belle in the Fifth Circuit and will do so again when the case is petitioned to the U.S. Supreme Court.

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