I. INTRODUCTION
On July 9, 2013, the undersigned United States District Judge heard oral argument on Defendant United States Army Corps of Engineers’ (the “Corps”) Motion to Dismiss [Docket No. 11]. Plaintiffs Hawkes Co., Inc. (“Hawkes”), Pierce Investment Co. (“Pierce”), and LPF Properties, LLC (“LPF”) filed this action seeking a declaratory judgment and injunctive relief to challenge a jurisdictional determination made by the Corps under the Clean Water Act (“CWA”). For the reasons stated herein, the Corps’ motion is granted.
II. BACKGROUND
Plaintiffs Pierce and LPF own a 530 acre parcel of land in Marshall County, Minnesota (the “Property”). The Property contains peat, and because peat forms in wetlands, the Property is necessarily considered a wetland. Am. Compl. [Docket No. 7] ¶¶ 6, 7, 27. Plaintiff Hawkes seeks permission to mine peat from the Property for use in the construction of golf greens. Hawkes is already mining peat from nearby land, and intends to pay royalties to Pierce and LPF in exchange for permission to expand its mining operation onto the Property. All three companies are closely-held corporations owned by members of the Pierce family, and Kevin Pierce is an officer in all of the companies. Id. ¶¶ 8, 32-33.
On March 20, 2007, Kevin Pierce, representing Hawkes, met with the Corps and the Minnesota Department of Natural Resources (“MDNR”) to discuss Hawkes’ plan to mine peat on the Property. On January 15, 2008, the parties met again. At this second meeting, Hawkes informed the Corps and MDNR that the high quality peat available on the Property could support Hawkes’ mining operation for another 10 to 15 years. Id. ¶¶ 35-37.
The CWA prohibits the discharge of materials into “navigable waters,” which is broadly defined as “waters of the United States.” 33 U.S.C. §§ 1251(a), 1311(a), 1362(6). The Corps has interpreted the term “waters of the United States” to include wetlands adjacent to navigable waters. The Supreme Court has affirmed this interpretation. See 33 C.F.R. § 328.3; United States v. Riverside Bayview Homes, Inc.,
Hawkes’ intended mining operation involves the filling or discharge of materials onto the Property. As a result, in December 2010, Hawkes applied for a permit from the Corps to begin mining. In January 2011, the parties met to discuss Plaintiffs’ plans. The Corps attempted to dissuade Plaintiffs from expanding their mining operations, in part by stressing the time and cost involved in the permitting process. Am. Compl. ¶ 40.
On March 15, 2011, the Corps by letter informed Hawkes it had tentatively determined that the Property was connected to Red River of the North, a “water of the United States,” and thus regulated by the Corps under the CWA. Over the next several months, the parties met several times, and the Corps conducted a site visit of the Property. In connection with the permitting process, the Corps also requested Plaintiffs conduct a series of assessments relating to the Property, which Plaintiffs
On November 8, 2011, the Corps sent Plaintiffs a preliminary version of its jurisdictional determination for the Property (sometimes referred to as the “JD”). The preliminary JD stated that CWA jurisdiction existed over the Property because it was a wetland connected to a “relatively permanent water,” which in turn connected to the Red River of the North, a navigable water.
On February 7, 2012, the Corps issued an Approved Jurisdictional Determination (the “Approved JD”) in which it apparently' abandoned the “relatively permanent water” rationale and instead concluded a “significant nexus” existed between the Property and the Red River of the North. An “approved jurisdictional determination” is the first formal decision the Corps makes with regard to jurisdiction, and it is appealable to a “Review Officer” within the agency. See 33 C.F.R. §§ 331.2, 331.3.
On April 4, 2012, in accordance with CWA regulations, Plaintiffs appealed the Approved JD to the designated Corps Review Officer. Am. Compl. ¶ 51. On October 24, 2012, the Corps issued an appellate decision in which it rejected several of the Plaintiffs’ appeal arguments. However, the appeal concluded that the Corps had failed to evaluate the Property’s chemical, physical, and biological effects on the Red River of the North, and thus had not established a significant nexus. As a result, the JD was remanded to the St. Paul District of the Corps for further factfinding. Id. at Ex. C.
On December 31, 2012, the Corps issued a Revised Approved Jurisdictional Determination (the “Revised JD”) in which it again concluded CWA jurisdiction existed. Id. at ¶ 54. The Corps informed Plaintiffs that the Revised JD constituted the “final Corps approved jurisdictional decision,” meaning no further appeals of jurisdiction could be taken. Cameron Deck [Docket No. 13] Ex. 1. On January 11, 2013, Plaintiffs filed this action seeking review of the Revised JD.
III. DISCUSSION
A. Motion to Dismiss Standard
Rule 12 of the Federal Rules of Civil Procedure states that a party may move to dismiss a complaint- for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The court construes the pleadings in the light most fa
B. Review of Final Agency Actions
Under the Administrative Procedure Act (APA), “agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.” 5 U.S.C. § 704. For an agency action to be considered “final,” it must satisfy two conditions. First, the action must “mark the consummation of the agency’s decisionmaking process,” meaning it must be more than “tentative or interlocutory” in nature. Bennett v. Spear,
The parties do not dispute that Plaintiffs here could obtain judicial review by pursuing the permitting process, as Corps regulations expressly make the final permit decision renewable under the APA. See 33 C.F.R. § 331.12. However, Plaintiffs argue that by itself, a jurisdictional determination qualifies as a “final agency action” subject to immediate judicial review.
C. Judicial Review of Jurisdictional Determinations
Although no Eighth Circuit court has yet ruled on the issue, several other federal courts have held , that a jurisdictional determination is not a “final agency action,” and thus not subject to immediate judicial review. See, e.g., Fairbanks N. Star Borough v. U.S. Army Corps of Eng’rs,
Fairbanks illustrates the above-cited cases’ reasoning for denying judicial review of jurisdictional determinations. Like Plaintiffs in this case, the plaintiff in Fairbanks sought judicial review after the Corps issued an approved jurisdictional determination for the wetlands at issue. Fairbanks,
Considering the first Bennett condition, the Ninth Circuit held that the plaintiffs jurisdictional determination represented a consummation of the Corps’ decisionmaking process. The court reasoned that
However, the Ninth Circuit ultimately held that a jurisdictional determination was not a “final agency action” — and thus not subject to immediate judicial review— because it did not alter a party’s rights or obligations. See id. at 591-94. A jurisdictional determination, the court held, “does not itself command [a party] to do or forbear anything; as a bare statement of the agency’s opinion, it can be neither the subject of ‘immediate compliance’ nor of defiance.” Id. at 591-92 (citation omitted). A finding of jurisdiction in this context, the court held, is akin to recognizing already-existing facts about the nature of the wetlands at issue. When the Corps finds jurisdiction, it “does not alter physical reality or the legal standards used to assess that reality.” Id. at 594. In other words, the Corps’ jurisdictional determination clarifies a plaintiffs position but does not alter it. As a result, the jurisdictional determination fails the second Bennett condition, and the determination is not subject to judicial review.
As part of its analysis, the Ninth Circuit briefly noted its holding did not impair the plaintiffs ability to challenge CWA jurisdiction. Id. at 594-95. The plaintiff could still challenge jurisdiction when judicial review was appropriate, such as in connection with a permit application or an enforcement proceeding. See id. As a result, the plaintiff was not without “other adequate remedy in a court.” See id.; 5 U.S.C. § 704.
D. Plaintiffs’ Appeal of the Revised Jurisdictional Determination
As discussed below, Plaintiffs’ jurisdictional determination satisfies the first Bennett condition, but not the second.
1. Consummation of the Agency’s Decisionmaking Process
The Corps argues Fairbanks reached the . correct end result, but disagrees with the Ninth Circuit’s conclusion that a jurisdictional determination marks the consummation of the agency’s decision-making process. Instead, the Corps urges the Court to view jurisdictional determinations as the beginning, or at least as some non-definitive, stage of the permit process. In response, Plaintiffs note that Fairbanks, a case on which the Corps relies, held that a jurisdictional determination was the consummation of a Corps decision-making process. Plaintiffs further argue the language of Corps regulations themselves indicate an intent to treat jurisdictional determinations as final.
Plaintiffs’ jurisdictional determination marked the consummation of the Corps’ decisionmaking process, and as such satisfies the first Bennett condition. Despite the Corps’ argument to the contrary, the jurisdictional determination process is not — as this case demonstrates — necessarily contiguous with a permit application process. Here, Plaintiffs received the Revised JD but have not yet decided whether to pursue a permit. At this point, Plaintiffs could choose to abandon their mining
The possibility of the Corps revising its jurisdictional determination does not, as the Corps urges, transform this determination into an advisory opinion. .The Ninth Circuit in Fairbanks concluded that the possibility of new information arising did not suggest that the determination “might be subject to subsequent revision ... consideration or modification.” Fairbanks,
The language of Corps regulations further supports this conclusion. The Corps concedes CWA regulations describe a jurisdictional determination as “a Corps final agency action.” 33 C.F.R. § 320.1(a)(6). However, the Corps argues that this language does not mean the Corps views jurisdictional determinations as final for APA purposes, but rather only as “final” in the sense the public may rely on the determination.
2. Determines a Party’s Rights or Obligations
Although Plaintiffs’ Revised JD may mark the consummation of a Corps’ decisionmaking process, it does not determine Plaintiffs’ rights or obligations, and thus does not satisfy the second Bennett condition. Plaintiffs argue Bennett stressed the practical nature of its articulated finality test, focusing on the legal consequences of the agency decision even if the decision itself did not expressly alter legal rights. See Bennett,
Plaintiffs’ jurisdictional determination does not fix their rights or obligations. The Revised JD does not order Plaintiffs to take any kind of action. Although Plaintiffs may want to obtain a permit if they wish to expand their mining operations, the Corps has in no way obligated them to do so. See Fairbanks,
E. Compliance Orders and Sackett
Neither Plaintiffs nor the Court have identified a single decision contrary to the holding of Fairbanks and the other cases cited above. However, Plaintiffs argue the Supreme Court’s recent holding in Sackett v. EPA, — U.S. -,
The Supreme Court sided with the petitioners. The Court held the compliance order bore the hallmarks of a “final agency action” under the two Bennett conditions. First, the compliance order marked the consummation of the EPA’s decisionmaking process, because the petitioners were not entitled to any further administrative review. Id. at 1372. Second, the compliance order determined the petitioners’ rights and obligations. The order legally obligated the petitioners to “restore” their land in accordance with an EPA restoration plan, it required them to provide the EPA with access to the property, and it required them to provide EPA employees with “access and documentation related to the conditions of the site.” Id. at 1371 (citation omitted). If the petitioners did not comply, they would immediately risk accruing substantial, daily penalties. Id.
1. Bennett Conditions Under Sackett
Plaintiffs argue the Revised JD satisfies the same criteria for a “final agency action” as the compliance order reviewed by the Supreme Court in Sackett. As a result, Plaintiffs argue the Court should extend Sackett’s holding to apply to all final CWA jurisdictional determinations as well. The Corps responds that Fairbanks and the other above-cited cases have correctly stated the law, and that because jurisdictional determinations are distinguishable from compliance orders, Sackett should have no effect here. Plaintiffs are unable to demonstrate how Sackett applies to jurisdictional determinations.
As discussed above, the jurisdictional determination satisfies the first Bennett condition.
As discussed above in Section III.D.2., Plaintiffs face no such obligations or changes in their rights as a result of their jurisdictional determination. Plaintiffs attempt to avoid this conclusion by arguing the threat of liability comprises a material change in their legal obligations, just as it did for the petitioners in Sackett. See Sackett,
Also unlike the petitioners in Sackett, Plaintiffs may pursue a permit without a disadvantage. The compliance order “severely” limited the petitioners’ ability to obtain a permit from the Corps. Sackett,
2. Adequacy of Judicial Remedies
In addition to considering the Bennett conditions, Sackett also considered whether the petitioners were left without “other adequate remedy in a court.” Id. at 1372 (quoting 5 U.S.C. § 704). Generally, the party seeking to alter wetlands subject to the CWA may seek judicial review by one of two methods. First, he may proceed with the planned development or other alteration without consulting the Corps or the EPA. The EPA may then choose to bring an enforcement action against him, which would bring the party into court. See 33 U.S.C. § 1319; 33 C.F.R. §§ 326.3, 326.5. The Court in Sackett rejected this option, holding that waiting to be sued while incurring potentially significant penalties was not a sufficient remedy. See generally Sackett,
Second, the party may apply for a permit from the Corps, and if the permit is denied through the administrative process, he may file suit. See 33 C.F.R. §§ 331.10, 331.12. The Supreme Court held that this was not an adequate remedy for the petitioners in Sackett, because the EPA, a separate agency, had already issued a compliance order. Id. at 1372 (“The remedy for denial of action that might be sought from one agency does not ordinarily provide an ‘adequate remedy’ for action already taken by another agency.”).
Neither of these “dead ends” apply to Plaintiffs. First, unlike the petitioners in Sackett, Plaintiffs are not at the mercy of the Corps while they continue to accrue liability. On the contrary, Plaintiffs may choose if future administrative proceedings regarding the Property will occur and Plaintiffs will not accrue liability in the meantime. Unlike the petitioners, Plaintiffs have the ability to “initiate [the] process” which will bring them before the Court. See Sackett,
Regarding the second remedy, as noted, Plaintiffs have the unhindered option of pursuing a permit from the Corps. Both Sackett and Fairbanks viewed the permit process as a proper avenue after which judicial review of agency action under the CWA was appropriate. See Sackett,
Finally, Plaintiffs now have a third avenue to judicial review. If Plaintiffs choose to begin mining without a permit and the government issues a compliance order, Plaintiffs may, as a result of Sackett’s holding, seek immediate judicial review of the compliance order and resolve the status of their operations. Because the Revised JD does not satisfy both Bennett conditions, and because Plaintiffs have “other adequate remedy in a court,” the determination is not reviewable at this time.
F. Ripeness
Both parties offer brief arguments regarding why the doctrine of ripeness might also determine the outcome of this motion. Because the Court holds judicial review is not appropriate for the reasons stated above, it declines to reach the issue of ripeness.
IV. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:
1. Defendant’s Motion to Dismiss [Docket No. 11] is GRANTED; and,
2. All claims in the Amended Complaint [Docket No. 7] are DISMISSED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Notes
. For jurisdiction to exist under the CWA, the wetland at issue must have some connection to a "traditionally navigable water." The nature of this connection is somewhat in dispute due to Rapanos v. United States,
The Eighth Circuit Court of Appeals has held that either test can establish CWA jurisdiction. United States v. Bailey,
. This argument also reflects the overall regulatory scheme, as 33 C.F.R. § 331.12 states administrative remedies have not been exhausted for APA purposes until a final permit decision is reached under § 331.10.
. The Court in Belle,
. The EPA and the Corps have concurrent jurisdiction to enforce the CWA. The EPA has the authority under the Act to issue complianee orders, binding decisions which the EPA can then choose to enforce in court by bringing an enforcement action. See 33 U.S.C.§ 1319(a, b). Prior to Sackett, courts had held that a party subject to a compliance order had no judicial recourse until the EPA brought a civil action to enforce the order. See, e.g., Hoffman Grp. v. EPA,
. Regarding the first Bennett condition, Sackett and Fairbanks actually adopt the same reasoning in concluding a compliance order and a jurisdictional determination mark the consummations of their respective decision-making processes. Sackett held the "mere possibility" of an agency revisiting and revising its original decision based on new information does not "suffice to make an otherwise final agency action nonfinal.” Sackett,
. .At the hearing, Plaintiffs argued that proceeding without a permit when the Corps has already determined jurisdiction could put Plaintiffs at risk of steeper penalties and even criminal liability if the Corps succeeded in an enforcement action, because violating the CWA after gaining knowledge of CWA jurisdiction could demonstrate Plaintiffs’ bad faith. Whether a particular agency action may be used as evidence against a party in a subsequent proceeding does not amount to a change in that party’s rights or obligations, nor is it fairly characterized as a legal consequence. See Fairbanks,