Property owners should take note that the United States Supreme Court, in a unanimous decision, expressed concern over the scope and uncertainty of the Clean Water Act (“CWA”).  In recent weeks, the Supreme Court made an important decision about wetlands determinations under the CWA. For years, the Army Corps has tried to clarify the definition of “waters of the United States” by offering preliminary determinations or approved jurisdictional determinations (“JDs”). To keep the courts out of the process, the Army Corps said the JDs were not subject to judicial review. In other words, they are not final decisions and, even if JDs are final, sufficient alternatives exist to challenge outside the courts. The Supreme Court disagreed.

The Supreme Court reiterated for us that the two conditions for finality are a definitive ruling that gives rise to direct and appreciable legal consequences, which JDs satisfy. In addition, landowners do not have adequate alternatives besides review in court. Precedent makes clear that you don’t need to wait for enforcement proceedings to challenge final agency action – especially when considering the risk of criminal liability or $37,500 per day penalties. At the same time, a possible permit appeal may not be the best alternative when the permit process is likely to be long and expensive.

For the agriculture community, this decision is a step in the right direction. The previous revision to the “waters of the United States” definition created considerable uncertainty for agriculture landowners with respect to whether certain farm ditches, ephemeral drainages, agricultural ponds, and isolated wetlands located on their property would be subject to CWA jurisdiction. The sentiment from the justices over the uncertain scope of the CWA suggests this issue, if reviewed in a forthcoming challenge, would likely be addressed and hopefully remedied in subsequent opinions.  How the justices will interpret the scope of the CWA, including whether certain agriculture land will be subject to CWA jurisdiction and the consequent permit requirements, still remains to be determined.  Whatever the fate of the “waters of the United States” definition, this opinion is significant for all landowners by providing an opportunity to challenge JDs and avoid unnecessary expense and delay as well as affirming the binding nature of a JD on both the Army Corps and the EPA.

For property owners in general, the opportunity to challenge JDs is important considering the expensive and prolonged permitting process. For example, the property owners in this case wanted to mine peat from a portion of their properties in Minnesota and in 2010 submitted an application to the Army Corps for a CWA discharge permit. Early discussions between the applicants and the Army Corps made it clear that the permitting process would be long and expensive, with no certain outcome. In this case, 15 months into the process, the Army Corps issued a decision stating the properties contained wetlands with a significant nexus to the Red River, located a mere 120 miles away. The Army Corps’ decision was not merely a preliminary determination, but a fully approved JD. The consequences and importance of this JD to the permitting process led to the property owners seeking review by the court.  This successful challenge is significant for property owners, but could result in the Army Corps changing or abandoning the JD process altogether.

As this week’s opinion shows, the justices are clearly troubled by the uncertain reach of the CWA, the potentially ruinous penalties for violations and the impact on private property rights. These concerns will likely come to light again in subsequent decisions.

Written by Ice Miller LLP

Kristina Tridico, partner, Tom Dimond, partner, Melissa Proffitt, partner, Amy Berg, associate, Beth Bechdol, director of agribusiness strategies, Katie Glick, agribusiness strategy manager

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances. 

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