The U.S. District Court for the Middle District of Louisiana recently ruled that an U.S. Army Corps of Engineers’ approved jurisdictional determination finding wetlands subject to the Clean Water Act (CWA) is not a final agency action within the meaning of the Administrative Procedure Act (APA). The court further held that its holding was not impacted by the U.S. Supreme Court’s recent decision in Sackett v. EPA.

In Belle Company, LLC v. United States Army Corps of Engineers, No: 12-247-BAJ-SCR (M.D. La. Feb. 28, 2013), plaintiffs, believing that their property contained no jurisdictional wetlands, applied for and received from the Louisiana Department of Environmental Quality a permit to construct and operate a solid waste landfill. Years after the permit approval, the U.S. Department of Agriculture informed plaintiffs that their property had never been classified as “converted cropland,” a classification which would have exempted plaintiffs’ property from CWA requirements. To resolve the issue, plaintiffs sought a jurisdictional determination from the Army Corps, who issued a preliminary jurisdictional determination that plaintiffs’ property contained wetlands subject to the CWA. The Corps subsequently issued an approved jurisdictional determination confirming the presence of jurisdictional wetlands. Pursuant to the administrative appeals process under 33 CFR § 331, plaintiffs appealed the jurisdictional determination to the Corps’ division engineer, who ultimately concluded that the property contained wetlands subject to the CWA. Plaintiffs then sought a declaratory judgment and an injunction against the Corps’ for its issuance of the approved jurisdictional determination.

A court may not review the decisions of an administrative agency unless there is a “final agency action” under the APA. In Bennett v. Spear, 520 U.S. 154, the Supreme Court articulated a two-part test for determining whether an agency action is final within the meaning of the APA. First, an agency action must mark the “consummation” of an agency’s decision-making process and cannot be “merely tentative” or “interlocutory.” Second, the agency action must have determined a party’s “rights or obligations,” or be one from which “legal consequences flow.”

The court found that plaintiffs satisfied the first prong of the Bennett Test because they appealed the jurisdictional determination in accordance with statutorily prescribed administrative process to the district engineer who concluded that the jurisdictional determination was correct. As such, there was no further agency action that plaintiffs could have expected regarding the presence of jurisdictional wetlands. Plaintiffs, however, failed to satisfy the second prong of the Bennett Test because in concluding that plaintiffs’ property contained jurisdictional wetlands, the Corps simply reminded plaintiffs of their existing duties under the CWA. Therefore, the jurisdictional determination did not decide plaintiffs’ rights or obligations, nor did any legal consequences flow from the decision. Quoting Fairbanks North-Star v. U.S. Army Corps of Engineers, 543 F.3d 586 (9th Cir. 2008), the court noted that a jurisdictional determination “at most simply reminds affected parties of existing duties imposed by the CWA itself and commands nothing of its own accord.” The fact that plaintiffs would need to seek a 404 permit from the Corps or amend their landfill permit application was irrelevant, as the court found these CWA obligations to be preexisting.

Furthermore, the court distinguished this case from the Supreme Court’s recentSackett decision, where EPA issued a compliance order that also included a jurisdictional finding that plaintiffs’ property contained wetlands. The Supreme Court ruled that the order constituted a final agency action within the meaning of the APA. In accordance with the order, the Sackett plaintiffs faced potential fines for each day that they refused to follow EPA’s demand for remedial action. In the present case, however, the court noted that there was no evidence that plaintiffs had done anything to violate the CWA, and plaintiffs did not face any imminent penalties. In fact, the court noted that plaintiffs are still able to apply for and receive a permit for any activities that might result in discharge of pollutants to the wetlands on their property, giving them options unavailable to the Sackett plaintiffs. Because of these factual distinction, the court held that Sackett was not controlling.

This post was authored by MGKF associate Michael Dillon.

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