Fairbanks North Star Borough v. U.S. Army Corps of Engineers (Sept. 12, 2008, 9th Cir. No. 07-35545) ___ F.3d ____
In Fairbanks North Star Borough v. USACE, 07-35545, the Ninth Circuit held that an approved jurisdictional determination issued by the Army Corps of Engineers is not a final agency action for purposes of judicial review under the Administrative Procedures Act (APA), 5 U.S.C. §704.
In a case of first impression in the Court of Appeals, the court affirmed the district court’s dismissal of municipality Fairbanks’ suit to set aside a Corps approved jurisdictional determination (JD) which found jurisdictional wetlands present throughout a 2.1 acre parcel slated for development. Relying on Bennet v. Spear, 520 U.S. 154, the court stated that "two conditions must be satisfied for agency action to be final: First, the action must mark the consummation of the agency’s decision-making process – it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow." (Fairbanks at 12744)
The court agreed with Fairbanks that, by concluding wetlands were present on the property, the JD "marked the consummation of the agency’s decision making process" for determining whether the property was subject to Clean Water Act (CWA) jurisdiction, thereby meeting the first prong of the Bennet test. (Fairbanks at 12748) However the court concluded that the second prong of Bennet was not met, as the JD "does not itself command Fairbanks to do or forbear from anything," and is not an action "from which legal consequences will flow." (Fairbanks at 12748) The court reasoned that the approved JD is merely the agency’s opinion that, due to the presence of what the Corps determined to be waters of the U.S. on the parcel, the Clean Water Act will apply to Fairbanks’ construction activities on that parcel. As the court noted, the JD "simply ‘reminds’ the affected parties of existing duties imposed by the CWA itself and commands nothing of its own accord." (Fairbanks 12751 fn 10).
Fairbanks further argued that three legal consequences flow from the approved JD: "it prevents Fairbanks from claiming in mitigation that it had acted with good faith; it effectively requires Fairbanks to submit to the CWA’s permitting regime before proceeding with construction; and it deprives Fairbanks of a ‘negative’ jurisdictional determination, which might have been relied upon as a defense to enforcement action." The court rejected these arguments, pointing out that the first and second "erroneously conflate a potential practical effect with a legal consequence," since whatever Fairbanks chose to do next, "it will be no more or less in violation of the CWA than if it had never requested an approved jurisdictional determination." (Fairbanks 12753).
The court concluded by stating: "We do not have jurisdiction to review the Corps’ approved jurisdictional determination finding that Fairbanks’ property contains wetland subject to CWA regulatory jurisdiction. Although the approved jurisdictional determination is the Corps’ official, last word about its view of the status of Fairbanks’ property, the Corps’ view does not impose an obligation, deny a right or fix some legal relationship. Accordingly, it is not final agency action under the APA."
Developers and municipalities alike will have to take Fairbanks into consideration when dissatisfied with an approved JD. Instead of challenging the JD itself, beyond the administrative appeals process, parties would either have to proceed with the 404 permitting process and challenge a permit decision based on the contested JD, or proceed with construction or fill activities and respond to enforcement actions.
Stephanie Helfrich is an associate in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office.