Bypassing Scylla & Charybdis:
Pre-enforcement Judicial Review of Wetlands Determinations under the Clean Water Act
By Russell W. Wilson, Esq.
In the Odyssey, Homer told of the inescapable sailing hazards that confronted Odysseus: the six-headed sea monster, Scylla, on one side of a strait and a whirlpool, Charybdis, on the other.
Odysseus chose to avoid losing all to the whirlpool and take his chances with the monster. This was a good choice; Odysseus made it through the strait, though he lost a few oarsmen to the monster.
On the return passage, however, the whirlpool took down the ship and only Odysseus survived.
Deciding whether to dredge or fill wetlands can trigger twin dangers under the Clean Water Act: concede the existence of jurisdictional wetlands and incur enormous cost, effort and delay in seeking a permit from the U.S. Army Corps of Engineers (“Corps”) or develop without a permit and face restoration costs, penalties up to $37,500 per day and even imprisonment for knowing violations.
At what point may a would-be developer have a federal court review a wetlands order issued by the Corps or the U.S. Environmental Protection Agency (EPA) as to whether the land in question contains wetlands that fall within the jurisdictional reach of the Clean Water Act (CWA)?
The Corps and EPA have asserted that judicial reviews of their decisions on wetlands are not reviewable by the courts prior to the agency bringing enforcement actions in court.
Recent developing case law, however, might establish a right to challenge wetlands decisions in court before having to face the twin dangers. Odysseus would certainly have appreciated wings for his ship that could have flown it safely over Scylla and Charybdis.
Unless a statute, such as CWA, expressly precludes judicial review of agency action (which term includes inaction), judicial review may be available if the action is “final” and “no other adequate remedy in a court” is available.
In Sackett v. EPA, 132 S. Ct. 1367 (2012), the United States Supreme Court ruled that (1) the CWA neither expressly nor impliedly precludes judicial review; (2) the EPA’s order to restore wetlands under threat of $75,000 in penalties per day was “final” agency action; and (3) the Sacketts had no other adequate remedy in court.
The Supreme Court reversed the Ninth Circuit Court of Appeals and accorded the Sacketts the right to have the EPA restoration order reviewed in federal district court.
Chantelle and Mike Sackett bought a residential lot in a Priest Lake, Idaho, subdivision. They secured necessary local permits and began site preparations for construction of their home.
EPA and the Corps visited the site and told the Sacketts to stop work due to the presence of wetlands regulated under the CWA.
Later, the EPA issued an administrative compliance order to restore the alleged wetlands or face penalties up to $75,000 per day ($37,500 for dredging or filling wetlands and $37,500 for not complying with the order). The Sacketts sought judicial review, but they were denied it at the district court and court of appeals levels.
A remarkable feature of the Supreme Court’s decision, authored by Justice Scalia, is that it was unanimous. The Supreme Court had little difficulty in ruling that the presumption favoring judicial review applies to CWA, which by its terms does not make judicial review unavailable. Nor does it do so, the Court ruled, by implication.
In similar vein, the Court readily held that the EPA’s administrative compliance order constituted final agency action. The order had determined rights or obligations.
It compelled the Sacketts to restore the asserted wetlands or face legal consequences in the form of crushing monetary penalties.
It severely limited the Sacketts’ ability to obtain a wetlands permit from the Corps because the Corps does not ordinarily issue such permits in the wake of an EPA compliance order. Moreover, EPA’s order provided for no further administrative review.
Lastly, the Court had no trouble in deciding that the Sacketts had no other adequate remedy in court. They had no other legal avenue by which to initiate judicial relief.
They could, of course, violate the order and wait for the EPA to file suit to collect daily monetary penalties, at which time they could challenge the existence of jurisdictional wetlands. Some choice, the Court felt.
Or, the Sacketts could apply to the Corps for a permit and sue the Corps upon denial. But, suing one agency (Corps) for the action of another (EPA) does not provide an adequate remedy at law.
The Court thus remanded the case to the district court so as to allow the Sacketts to pursue their challenge to the jurisdiction of the CWA to their property.
The stakes could hardly have been higher for the Sacketts, but a less elevated, more common type of order will fall under the scrutiny of the Supreme Court.
Corps regulations provide for form assistance in wetlands matters with “judicial determinations” (JDs).
The nomenclature may be misleading; these are preliminary wetlands determinations are made by the agency, not by the judiciary. The right of judicial review of JDs would be of a great help to landowners and developers.
The Supreme Court has accepted such a case for review. Hawkes Co., Inc. obtained from the Corps an unfavorable JD on several hundred acres in northwestern Minnesota on which it intended to mine peat.
Hawkes Co., Inc. v. United States Army Corps of Engineers, 82 F.3d. 994.
On April 10, 2014, the Eighth Circuit Court of Appeals, applying Sackett, held that judicial review is available to JDs. The Corps filed for review by the Supreme Court, and on December 11, 2015, the Court announced that it would hear the case.
Notable parties who filed briefs in support of Hawkes in the Eighth Circuit were American Farm Bureau Federation, the National Association of Home Builders, American Petroleum Institute, Utility Water Act Group and the Foundation for Environmental and Economic Progress.
In contrast to the Eighth Circuit’s decision, the Fifth Circuit held that JDs do not constitute final agency action and were thus not reviewable.
Belle Co., LLC v. United States Army Corps of Engineers, 761 F.3d. 383 (2014).
The Supreme Court denied Bell’s initial petition for review. In the wake of the Eighth Circuit’s decision in Hawkes, however, Belle renewed its request to the Supreme Court on December 11, 2015.
As of the time of this writing, the Court’s decision whether to hear an appeal in Hawkes is pending. The Court will decide the Hawkes appeal whether or not it takes Belle. Look for a decision on this important issue in mid-2016.