Fifth Circuit Rejects Application of Sackett to Corps’ Jurisdictional Determination
In Belle Company, LLC et al v. USACE, No. 13-30262 (July 30, 2014), the Fifth Circuit rejected an effort to apply the Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012), to a determination by the Army Corps of Engineers that part of a proposed landfill constituted wetlands. The Fifth Circuit held that while the determination of wetland status marked the consummation of the Corps’ decision-making process, it satisfied only one prong of the required test for subject matter jurisdiction under the Supreme Court’s decision in Bennett v. Spear, 520 U.S. 154 (1997). The court held that the jurisdictional determination, by itself, did not adversely affect the plaintiff. The determination could only adversely affect his rights in a future administrative action, e.g., through a future decision on plaintiff’s application for a 404 permit. If the permit were denied, the plaintiff could then seek judicial review of that decision. In so ruling, the Fifth Circuit relied on its recent decision in Luminant Generation Co. LLC v. EPA, in which it held that a notice of a Clean Air Act violation was not final agency action because “adverse legal consequences will flow only if the district court determines that Luminant violated the Act or the SIP.” 2014 WL 3037692 at *3 (5th Cir 2014).
In Sackett, the Supreme Court held that an EPA administrative order to a landowner directing it to restore filled wetlands constituted final agency action for purposes of the Administrative Procedure Act (APA), even though EPA had not moved to enforce the order and had offered the landowner an opportunity to engage in informal negotiations. However, once the order had been issued, Sackett risked penalties for non-compliance with the order, as well as for violation of the Clean Water Act, and was unable to take any action to challenge the order. As the Fifth Circuit noted, Belle, unlike Sackett, could initiate an action for review of any permit denial based on the jurisdictional determination, and in the interim did not risk the incurrence of $75,000 a day in penalties while waiting for the agency to take some action based on its administrative determination.
The jurisdictional determination by the Army Corps obviously has an immediate impact on the landowner, affecting its decisions regarding future development of the property, even if it does not, like the order in Sackett, immediately subject the landowner to penalties for non-compliance. If it stands, the Fifth Circuit’s decision here (and in Luminant) suggests that the impact of Sackett may be more narrow than some had hoped, and that parties unhappy with agency administrative determinations may in many cases remain unable to immediately seek judicial review.