Supreme Court's Wetlands Decision Pays Off For Business

  • 01.31.2017

It did not take long for the Hawkes Company to see the benefits of the Supreme Court’s May 31, 2016 decision granting the company the right to challenge in federal court the U.S. Army Corps of Engineers’ (the Corps) approved jurisdictional determination that concluded wetlands existed on its property.  See Army Corps of Engineers v. Hawkes Co., Inc., 578 U.S. __ (2016).  On January 24, 2017, the U.S. District Court for the District of Minnesota definitively and emphatically set aside as arbitrary and capricious the Corps’ determination that the property contained jurisdictional wetlands as defined under the Clean Water Act (CWA) and ruled that the company could move forward with plans to expand peat mining on the property.

In issuing the decision, Judge Ann D. Montgomery blasted the Corps’ administration of the jurisdictional determination process and found that the Corps is not entitled to an infinite number of chances to prove that property qualifies as jurisdictional wetlands under the CWA.

“Here, the Corps already had two opportunities to establish a significant chemical, physical, or biological nexus between the Wetlands and the Red River,” Montgomery wrote.  “After falling short in the Initial JD, the Corps was given a chance to supplement the Administrative Record with additional site-specific evidence and information to support its significant nexus determination.  It did not do so.  Allowing the Corps a third bite at the apple would force [the company] back through a ‘never ending loop.’”

The Court recognized that the company has desired to mine peat on the property since 2007 and that the Corps should finally be stopped from using the administrative process itself as a club to beat back the company’s right to make productive use of its property.

“Remand [back to the Corps for more administrative processing] under these circumstances would fuel what the Eighth Circuit characterized as the Corps’ ‘transparently obvious litigation strategy’—leaving [the company] without an adequate remedy until ‘the Corps … achieve[s] the result its local officers desire, abandonment of the peat mining project’—without ever having to establish CWA jurisdiction,” Judge Montgomery wrote.  “[The company] should not have to continue to wait to mine their land while the Corps engages in a third effort to establish regulatory jurisdiction over the Wetlands.”

The result is a triumph for the business community who for decades has been held hostage by the Corps’ byzantine and often arbitrary administrative process.