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Hawkes Co. v. United States Army Corps of Engineers

ELR Citation: 45 ELR 20070
Nos. 13-3067, (8th Cir., 04/10/2015)

The Eighth Circuit held that a U.S. Army Corps of Engineers jurisdictional determination (JD) is a final agency action under the APA, thereby creating a split between the circuits. The case arose after a company sought to mine peat from wetland property owned by two affiliated companies in northwestern Minnesota. The Corps issued a JD that the property is a "water of the United States" under the CWA and therefore subject to permitting requirements. The company appealed, and the lower court ruled the JD was not a final agency action subject to judicial review. The circuit court, however, reversed, concluding that the court misapplied the U.S. Supreme Court's decision in Sackett v. EPA, 132 S. Ct. 1367, 42 ELR 20064 (2012). In Sackett, the Court held that property owners may bring a civil action under the APA to challenge EPA's issuance of a CWA §309 compliance order directing them to restore their property immediately pursuant to an EPA work plan. According to the Eighth Circuit, Sackett reflects the Supreme Court's concern that failing to permit immediate judicial review of assertions of CWA jurisdiction would leave regulated parties unable, as a practical matter, to challenge those assertions. Here, the lower court had concluded that the JD is not a final agency action because the company has other adequate ways to contest the JD in court: complete the permit process and appeal if a permit is denied, or commence peat mining without a permit and challenge the agency's authority if it issues a compliance order or commences a civil enforcement action. But these remedies were held not to preclude judicial review of the EPA compliance order in Sackett. In addition, the JD requires appellants either to incur substantial compliance costs (the permitting process), forego what they assert is lawful use of their property, or risk substantial enforcement penalties. According to the court, the Corps' assertion that the JD is merely advisory and has no more effect than an environmental consultant's opinion "ignores reality." This decision runs counter to the Fifth Circuit's opinion in Belle Co. v. United States Army Corps of Engineers, 761 F.3d 383, 44 ELR 20175 (5th Cir. 2014).