By Ashley Ellixson
This case all started because Hawkes Co., Inc. (Hawkes) was interested in purchasing a piece of land in northern Minnesota to mine high-quality peat. What is peat? I was wondering the same thing! Peat moss is used in agriculture, horticulture, and forestry. Peat is a brown, soil-like material consisting of partly decomposed vegetable matter, used mainly in horticulture as a growing medium. It stimulates plant growth by improving seepage and root development, increasing soil buffering, and preventing the leaching of nutrients.
Hawkes applied to the Army Corps of Engineers (Corps) and the Minnesota Department of Natural Resources for a permit to begin extracting peat from the land after purchasing the property in October 2010. At first, the Corps issued a preliminary determination finding that the property contained jurisdictional waters, excluding the fact that the property was 120 miles from the Red River of the North. After further determination, the Corps issued an “approved jurisdictional determination,” concluding that the property contained “waters of the U.S.” which are protected under the Clean Water Act (CWA).
As you may have guessed, Hawkes was not pleased with this determination and appealed the decision to the Corps (remember, we are not in court yet). The reviewer sided with Hawkes, finding that the record did not support the jurisdictional determination that Hawkes’ land was“waters of the U.S.” The Corps then revised their determination, stating that the wetlands on the property had a “significant nexus” to the Red River of the North.
In a prior case, Rapanos, the “significant nexus” test was coined by U.S. Supreme Court Justice Kennedy and determines if a body of water is a waterway or wetland by evaluating whether it impacts the “chemical, physical, and the biological integrity” of a navigable water. If it does impact navigable water in that approach, then it falls under CWA and is subject to federal jurisdiction. By using this test, the Corps’ determination now carried more weight than before because it used a U.S. Supreme Court case as its reasoning rather than assigning jurisdiction based on reasons with less value in the legal realm.
Hawkes, as you may have guessed again, was unhappy with the Corps action and sued in federal court. Now we have made it to the court system. Hawkes claimed the determination was “arbitrary and capricious” and violated the Administrative Procedure Act. In other words, Hawkes was saying the Corps made the determination without reasonable grounds or adequate consideration of the facts. The district court where Hawkes filed the suit dismissed the claims stating 1) the Corps’ jurisdictional determination was not a final agency action subject to the courts review process and 2) Hawkes must go through the permitting process to mine peat on wetlands before it can receive judicial review.
The Eighth Circuit Court of Appeals reversed the district court’s decision and the Corps appealed to the U.S. Supreme Court where oral arguments were heard March 30, 2016.
That brings us to the final opinion issued by the U.S. Supreme Court on May 31, 2016. What did the Supreme Court say? With all eight justices agreeing, the court said the Corps’ jurisdictional determination is a final agency action reviewable by the court.
Why is this important? Under the concerns surrounding the proposed “waters of the U.S.” definition, many wetlands and waterways are now open for jurisdictional determination. The Corps argued that Hawkes had two alternatives to obtain court review for its jurisdictional determination: proceed to build on the wetland at issue and risk EPA criminal and civil fines, or go through the permitting process which one study found took “788 days and $271, 596” for an individual applicant. The justices did not agree that these two alternatives were reasonable. This is good news for landowners! Knowing that after a Corps’ jurisdictional determination (now considered a final agency action) is set on their property, the landowners do not have to risk fines and great expense without first getting a fair and legitimate answer as to the real jurisdiction of their property.
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