May 31, 2016
The Supreme Court opened the door to more lawsuits over the Clean Water Act in a Tuesday ruling that allowed businesses to challenge the federal government’s decisions on which wetlands and streams it can regulate.
The ruling that Army Corps of Engineers wetland determinations are reviewable by courts also offers hints about the justices’ leanings on broader, high-stakes questions about the law’s reach that the high court will likely eventually consider in lawsuits over the Obama administration’s Waters of the United States rule, which is being challenged by dozens of states, industry groups, activists and environmental nonprofits.
In Tuesday’s case, U.S. Army Corps of Engineers v. Hawkes Co., Inc., the eight active justices unanimously agreed that the determinations should be open to court review, but four offered concurring opinions outlining separate lines of reasoning for reaching that conclusion.
Justice Anthony Kennedy’s opinion signaled major doubts about the government’s power under the fundamental water law. After observing during oral arguments that the Clean Water Act is perhaps “unconstitutionally vague,” Kennedy wrote Tuesday that the law “continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.” That could signal trouble for WOTUS, given that the rule is pegged squarely to Kennedy’s opinion in a 2006 wetlands case that turned Clean Water Act regulation into a muddy mess.
“The fact that the ruling was unanimous shows that even the liberal justices will not automatically defer to the Obama administration’s Clean Water Act policy interpretations which impact property rights,” said Larry Liebesman, a senior adviser at Dawson and Associates and former Justice Department environmental attorney. “The ruling also suggests that the WOTUS rule will likely face similar scrutiny should it reach the Court.”
The Hawkes decision is a big win for conservatives and property rights activists who have long challenged the federal government’s broad reach under the Clean Water Act.
“Everyone who values property rights and access to justice should welcome this historic victory,” Reed Hopper, an attorney with the Pacific Legal Foundation who argued the case for Hawkes, said in a statement. The foundation also successfully argued a 2012 wetlands case in which the high court unanimously ruled that EPA compliance orders are subject to judicial review, and is among the parties challenging the new water rule.
But environmentalists argued the Hawkes ruling underscored the need for WOTUS, also known as the Clean Water Rule. Jan Goldman-Carter, who leads wetlands work for the National Wildlife Federation, said that the corps’ process “will get even more cumbersome and time consuming” if regulators have to continue making individual, case-by-case decisions about properties — now with the threat of a lawsuit hanging over each one. The new water rule, which an appeals court put on hold across the country, would place more streams and wetlands under federal protection automatically.
Hawkes Co., Inc., a peat-mining operation that had plans to mine a piece of property in Minnesota, brought the case after the Army Corps of Engineers said it would need permits because wetlands on the property were connected to the Red River of the North, roughly 120 miles away. The company argued that the process of obtaining a permit to mine the property would be prohibitively expensive, and fundamentally disagreed that the wetlands fell under federal regulation.
The Justice Department argued that the determinations are not final, binding agency decisions, and that applicants still have options after receiving a determination that their property is subject to Clean Water Act protections — namely that they can either proceed without a permit and, if the agency brings an enforcement action, challenge that in court, or they can apply for a permit and then seek judicial review of that.
Those options did not sit well with the court. “Neither alternative is adequate,” Chief Justice John Roberts wrote in the lead opinion, which was joined by six of the seven other active justices.
In part, Roberts’ opinion rested on a Memorandum of Agreement between the corps and EPA, which jointly administers the Clean Water Act, making the corps’ jurisdictional determinations “binding” for both agencies. This memorandum was key to Justice Elena Kagan, who appeared to lean toward the government during oral arguments, saying that both the federal government and regulated entities benefit from agencies being able to offer informal advice about how to interpret their regulations. In her concurring opinion, Kagan said that the memorandum “is central to the disposition of this case” because it creates a direct legal consequence to the jurisdictional determinations.
But Justice Ruth Bader Ginsburg argued that the memorandum came from left field in oral arguments — indeed, the Justice Department’s attorney had to fumble through his papers to figure out what the justices were referring to when it was first raised — and wasn’t ready to rest her opinion on it. She was the only justice not to join Roberts’ lead opinion, although she concurred in a separate opinion with the judgment that jurisdictional determinations are the government’s final say on the issue, and thus should be reviewable under the Administrative Procedures Act.