The U.S. Supreme Court issued a ruling today (link is external) that will allow the construction and development industries with a way to respond immediately to overly aggressive assertions by the federal government that the property they want to build contains jurisdictional “Waters of the United States” (WOTUS). A “jurisdictional determination” (JD) significantly impacts how land may be used and dramatically raises the cost, and often reduces the feasibility, of constructing critical infrastructure. AGC submitted a joint “friend of the court” brief in the case, US Army Corps of Engineers v. Hawkes Co., making a strong case for why it is vital for contractors to know with certainty whether their projects contain WOTUS.
In a fact-pattern all to familiar to AGC members: the case involved landowner(s)/operator(s) who wanted to engage in an activity in a wet area but the federal government put all activities on hold when it determined the property contained WOTUS – which triggered the need to first apply for a costly and time consuming Clean Water Act Section 404 permit to authorize the earth-disturbing work. Going ahead without a permit puts both landowners and construction contractors at risk of substantial penalties and even possible jail time. Today, the United Stated Supreme Court issued a decision that allows landowners and operators, in situations such as this, to proceed immediately with a lawsuit that challenges the federal government’s claim to jurisdiction over their land, when they disagree with it.
The Department of Justice (DOJ) had argued on behalf of the U.S. Army Corps of Engineers (Corps) that property owners who disagree with an approved JD – and instead believe their land includes no protected waters – can either seek a CWA Section 404 permit and then sue over its terms, or discharge without a permit and raise jurisdiction as a defense against a federal enforcement action. “Neither alternative is adequate. As we have long held, parties need not await enforcement proceedings before challenging final agency action where such proceedings carry the risk of 'serious criminal and civil penalties,'” Chief Justice Roberts wrote in the Court’s 10-page opinion. They shouldn’t have to wait until the end of the permitting process, which “can be arduous, expensive and long,” he added. DOJ’s “count your blessings argument" (i.e., landowners/operators benefit from the JD process the Corps created and lawsuits shouldn’t be allowed until after the Corps takes permitting or enforcement action) is not an "adequate” response where there is the risk of serious criminal and civil penalties,” Roberts writes.
The Court’s findings closely track the points AGC argued in its joint amicus brief (link is external) that explains why “the regulated community must be afforded a way to respond, at a definitive but still early point in the process, to overly aggressive determinations” that WOTUS are present on land. AGC was the only trade association to advance the commercial construction industry’s interest in the outcome of this case and, once again, AGC has succeeded in changing facts on the ground. This decision will have a material impact on the way that the Section 404 permit program actually functions.
"For a landowner or operator faced with an adverse jurisdictional determination, therefore, the only 'adequate remedy in a court' is immediate review of the jurisdictional determination itself," AGC's brief states. For more background on AGC’s involvement in this landmark case and why it is important for construction, click here and here.
For additional question, please contact AGC’s Leah Pilconis at firstname.lastname@example.org