NATIONAL ASSOCIATION OF HOME BUILDERS, et al., Appellants v. ENVIRONMENTAL PROTECTION AGENCY, et al., Appellees.
No. 13-5290.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 24, 2014. Decided May 15, 2015.
786 F.3d 34
Katherine J. Barton, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Robert G. Dreher, Acting Assistant Attorney General, and Andrew J. Doyle and Robert J. Lundman, Attorneys.
Before: PILLARD, Circuit Judge, and SILBERMAN and SENTELLE, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge PILLARD.
Concurring opinion filed by Senior Circuit Judge SILBERMAN, joined by Senior Circuit Judge SENTELLE.
PILLARD, Circuit Judge:
We addressed the basic controversy in this case in Nat‘l Ass‘n of Home Builders v. EPA (Home Builders I), 667 F.3d 6 (D.C. Cir. 2011), which dismissed a similar suit involving the same parties for want of constitutional standing. In both that case and this one, trade-group plaintiffs (collectively, Home Builders) challenged a preliminary, internal determination, made by the Environmental Protection Agency and the United States Army Corps of Engineers in 2008, that two stretches of the Santa Cruz River in southern Arizona are traditional navigable waters. The Clean Water Act regulates “waters of the United States.”
I.
The Clean Water Act requires a permit for any discharge of pollutants into the “waters of the United States.”
Precisely which watery—or even intermittently wet—landscape features count as the “waters of the United States” for purposes of Clean Water Act jurisdiction is not always immediately obvious. The variability of natural geography, and the myriad ways that water runs, washes, trickles, seeps, or gushes, complicate the task of giving specificity to “waters of the United States” under the Act. Landowners like Home Builders’ members may often be uncertain whether to undertake the cost and inconvenience of seeking a Clean Water Act permit or whether, conversely, they might safely dredge, fill, and discharge without one. A bright-line rule certainly would make things clearer for landowners like Home Builders, but the Act contains no such rule.
The Supreme Court‘s most recent guidance on the matter comes from the fractured decision in Rapanos, 547 U.S. 715, where the Court considered whether wetlands adjacent to tributaries of traditional navigable waters are subject to Clean Water Act jurisdiction. Justice Scalia wrote for four members of the Court supporting reversal and remand for further consideration of the Corps’ asserted jurisdiction. That plurality concluded that “waters of the United States,” while not limited to waters that are navigable in the traditional sense, see id. at 730-31, is confined to “only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic features’ that are described in ordinary parlance as ‘streams, oceans, rivers, and lakes,‘” id. at 739 (internal alteration marks omitted). Providing a fifth vote to reverse and remand, Justice Kennedy rejected as unduly narrow the plurality‘s reading of the Act‘s text, structure and purpose—a reading he thought makes “little practical sense in a statute concerned with downstream water quality.” id. at 769. The Act also applies to wetlands, he concluded, insofar as they have a “significant nexus” with traditional navigable waters. id. at 779-82. Four dissenting Justices would have deferred to the Corps’ assertion of its jurisdiction under what they viewed as its longstanding, reasonable interpretation of the Act as applicable to traditional navigable waters, their tributaries, and wetlands adjacent to either. id. at 792-93 (Stevens, J., dissenting).
To help agency personnel and the regulated community understand the impact of Rapanos on implementation of the Clean Water Act, the agencies in 2007 issued interpretive guidance. The 2007 Rapanos Guidance concluded that the Act extended only to traditional navigable waters (waters that are navigable in fact), and non-navigable waters that have a “significant
Landowners and developers who want to confirm how such general standards apply to their particular circumstances may, in advance of seeking a permit, solicit a written, site-specific Jurisdictional Determination (JD) from the Corps. A JD reflects the agency‘s judgment about whether and to what extent a property contains jurisdictional waters, and hence is or is not subject to regulatory jurisdiction under the Clean Water Act.1 See
JDs may be issued as either “preliminary” or “approved.” A preliminary JD is an advisory determination, not administratively appealable, that indicates that “there may be waters of the United States on a parcel,” and identifies aquatic features on the property that could be affected by the proposed activity.
An approved JD, in contrast, is a considered statement of the agency‘s view of “the presence or absence of waters of the United States on a parcel.”
After the Supreme Court decided Rapanos and the agencies issued their Rapanos Guidance, EPA and the Corps made the traditional navigable waters determination (“TNW Determination“) that Home Builders challenge here. In a December 2008 letter from an EPA Assistant Administra-
Without more, the agencies’ internal TNW Determination did not necessarily decide the Clean Water Act‘s applicability to Home Builders’ properties. None of their properties is alleged to be on the Santa Cruz River. For land positioned away from the river, a JD could rely on the navigable reaches of the Santa Cruz as a point of reference in its Rapanos analysis, but would also have to contain a determination of a “significant nexus” between waters on the property and the navigable river reach. And, to the extent that an approved JD relied on the Santa Cruz River TNW Determination, that determination would be subject at least to immediate administrative appeal.3
II.
A.
Home Builders filed their first lawsuit in 2009 challenging the agencies’ 2008 TNW Determination, which identified reaches of the Santa Cruz River as traditional navigable waters within the jurisdiction of the Clean Water Act. The agencies disputed Home Builders’ standing to sue. Home Builders claimed representational standing based on asserted concrete injury to their members from the agencies’ designation of the Santa Cruz River—rather than the distant Colorado River, for example—as the traditional navigable water nearest to their property. Home Builders contended that the TNW Determination put its members to the choice of applying for a permit or facing enforcement penalties. They emphasized the cost of getting permits, and claimed that the TNW Determination burdened the investment and project-development activities of their members. Home Builders further argued that the agencies’ determination amounted to a legislative rule, and that standing of regulated entities, such as their members, to challenge legislative rules is self-evident.
The district court dismissed the case, and a prior panel of this Court affirmed for want of standing.4 Home Builders I, 667 F.3d at 11-16. The earlier panel stated that,
[u]nless and until [an approved] jurisdictional determination applies the TNW Determination to particular property (and its watercourses) and finds a sufficient nexus—or the Agencies use the TNW Determination in an enforcement action against a party discharging without a permit—the owner or developer of the property suffers no incremental injury in fact from the TNW Determination and any challenge to it is therefore premature. In the meanwhile, [Home Builders‘] members face only the possibility of regulation, as they did before the TNW Determination: Any watercourse on their property may (or may not) turn out to be subject to [Clean Water Act] dredging permit requirements because of a nexus (or not) with the two Santa Cruz reaches.
id. at 13. Home Builders’ argument that “the TNW Determination forecloses the issue of the nearest TNW for site-specific [JDs] within the watershed” was unconvincing, because an individual landowner or developer might still “contest the TNW Determination in a challenge to a site-specific [JD].” id. at 14 (internal quotation marks, original alterations omitted). For example, a landowner faced with a compliance order, penalty assessment, or permit action predicated on the site-specific JD could certainly challenge it in that context. See id.; see also supra n. 3. We were unpersuaded by Home Builders’ assertion that its “members now face the choice of applying for a permit for activities that [they asserted] are outside the scope of the agencies’ authority under the [Clean Wa-
Further, we recognized that the declarations of Home Builders’ members did not allege that the TNW Determination “motivated the landowner to seek an application for a permit,” nor did they explain how the declaratory or injunctive relief Home Builders sought “would remedy the past injuries the members may have already incurred in applying for the permits.” id. at 14-15. None of the declarations alleged facts demonstrating that there was a “greater likelihood of regulation, if any, after than before the TNW Determination,” or that “any member plan[ned] in fact to discharge contaminants into a likely jurisdictional watercourse anytime soon.” id. at 15.
B.
In 2013, Home Builders filed this case, raising the same legal challenges they pressed in Home Builders I, and praying for essentially the same declaratory relief.5 Home Builders have again submitted supporting declarations from members, expanding on those submitted in the earlier case.
One declarant, developer Larry Kreis, states that the TNW Determination resulted in an “increased risk of regulation stem[ming] from the fact that [his] properties are now located within a few miles of the nearest TNW.” Kreis Decl. ¶ 17. Kreis further states that, absent the TNW Determination, he “probably would have moved forward with development of the additional lands without filing an amended application [in 2012] because the minor, braided washes on the property would not have a significant nexus to the Colorado River or other TNW” besides the Santa Cruz. Id. ¶ 24. Kreis also recounts that, in 2005, the Corps issued an “Approved Jurisdictional Delineation” concerning one property; in 2011, he filed an application to discharge into two washes on that property that had been previously delineated as jurisdictional waters; and, in 2012, the Corps issued a permit accordingly. Id. ¶¶ 29-30. Kreis further states that he is “concerned about having to obtain a permit” for one of the properties he intends to develop. Id. ¶ 33. Another declarant, developer Jerry DeGrazia, states that the Corps issued preliminary JDs for certain of his properties after the district court‘s 2011 dismissal, DeGrazia Decl. ¶¶ 30, 35, and that the Corps has also issued a permit at one of his former properties, id. ¶¶ 20, 24-25.
The district court held that Home Builders lacked standing under the criteria identified in Home Builders I, and alternatively that Home Builders had failed to identify final agency action subject to APA review.6 Nat‘l Ass‘n of Home Builders v. EPA, 956 F. Supp. 2d 198, 205-12 (D.D.C. 2013).
III.
We review de novo the district court‘s dismissal for lack of standing, accepting as true Home Builders’ non-conclusory, factual allegations. Mendoza v. Perez, 754 F.3d 1002, 1010 (D.C. Cir. 2014). To establish standing, Home Builders must show “that at least one of its members ‘is under threat of suffering “injury in fact” that is concrete and particularized; the threat must be actual and imminent, not conjectural or hypothetical‘; it ‘must be fairly traceable to the challenged action of the defendant‘—namely the TNW Determination—and ‘it must be likely that a favorable judicial decision will prevent or redress the injury.‘” Home Builders I, 667 F.3d at 12 (quoting Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)); see also Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). Home Builders must allege ongoing or imminent injury, rather than purely past injury, because they seek only declaratory relief. Home Builders I, 667 F.3d at 12, 14; see also City of Los Angeles v. Lyons, 461 U.S. 95, 105 (1983).
The doctrine of issue preclusion, or collateral estoppel, bars “successive litigation of an issue of fact or law actually litigated and resolved” that was “essential to the prior judgment, even if the issue recurs in the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892 & n. 5 (2008) (internal quotation marks omitted); see also Martin v. Dep‘t of Justice, 488 F.3d 446, 454 (D.C. Cir. 2007). The doctrine serves to “protect against ‘the expense and vexation attending multiple lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the possibility of inconsistent decisions.‘” Taylor, 553 U.S. at 892 (brackets in original) (quoting Montana v. United States, 440 U.S. 147, 153-54 (1979)).
Issue preclusion applies to threshold jurisdictional issues like standing as well as issues going to a case‘s merits. See, e.g., Underwriters Nat‘l Assurance Co. v. N.C. Life & Acc. & Health Ins. Guar. Ass‘n, 455 U.S. 691, 706 (1982); Coll. Sports Council v. Dep‘t of Educ., 465 F.3d 20, 22-23 (D.C. Cir. 2006); Dozier v. Ford Motor Co., 702 F.2d 1189, 1191 (D.C. Cir. 1983) (Scalia, J.). Issue preclusion operates differently from claim preclusion with respect to jurisdiction-based prior decisions: Because a jurisdictional dismissal does not involve “an adjudication on the merits,” it “will not bar relitigation of the cause of action originally asserted,” but it “may preclude ... relitigation of the precise issues of jurisdiction adjudicated.” Cutler v. Hayes, 818 F.2d 879, 888 (D.C. Cir. 1987). That is, “[a]lthough the dismissal of a complaint for lack of jurisdiction does not adjudicate the merit[s] so as to make the case res judicata on the substance of the asserted claim, it does adjudicate the court‘s jurisdiction, and a second complaint cannot command a second consideration of the same jurisdictional claims.” GAF Corp. v. United States, 818 F.2d 901, 912 & n. 72 (D.C. Cir. 1987) (internal quotation marks and citation omitted).
Unless Home Builders satisfy the “curable defect” exception that they claim shields them from issue preclusion, they are barred from relitigating here the standing issue decided in Home Builders I. The curable defect exception allows relitigation of jurisdictional dismissals when “a ‘precondition requisite’ to the court‘s proceeding with the original suit was not alleged or proven, and is supplied in the second suit.” Dozier, 702 F.2d at 1192. The exception is sharply limited, however, by the requirement that new allegations of a sufficient “precondition requisite” identify “occurrences subsequent to the original dismissal” that “remed[y]” “the jurisdictional deficiency.” Id. (emphasis in original); accord GAF Corp., 818 F.2d at 912-13. The exception permits litigants whose claims were dismissed on jurisdictional grounds to establish jurisdiction in a subsequent case only if a material change following dismissal cured the original jurisdictional deficiency.7 Dozier, 702 F.2d at 1192 & n. 5, 1193 n. 7. That limitation prevents the “curable defect” exception from undermining the preclusive effect of issues already fairly and finally deter-
B.
Issue preclusion bars us from reconsidering whether Home Builders suffered Article III injury, unless they have alleged that events after the original dismissal cure the jurisdictional inadequacy identified in Home Builders I. Plaintiffs failed in Home Builders I to allege at least one of following types of harm, and thus were unable to establish constitutionally cognizable injury traceable to the TNW Determination: (1) application of the TNW Determination to a particular site in an approved JD or an enforcement action based on the TNW Determination, Home Builders I, 667 F.3d at 13; (2) plans imminently to discharge into a likely jurisdictional watercourse, id. at 15; or (3) substantially increased risk of regulation or enforcement at a specific site in light of the TNW Determination, id. at 14. None of Home Builders’ new declarations makes up for any of the prior shortfalls or adds any new evidence of standing.
For one, Home Builders I required approved JDs for the requisite injury, id. at 13, yet Home Builders’ new declarations refer only to preliminary JDs or, in one case, to an approved JD that preceded the challenged TNW Determination.8 Moreover, Home Builders fail to allege that any JD applied the TNW Determination. See, e.g., DeGrazia Decl. ¶¶ 30, 35 (alleging that preliminary JDs identified “potentially jurisdictional” waters and referenced the Santa Cruz River, but not that they relied on the TNW Determination). The TNW Determination was not a predicate to Kreis‘s 2012 permit, either: The washes that necessitated that permit were delineated as jurisdictional years earlier, in a 2005 approved JD. See Kreis Decl. ¶¶ 29-30. Home Builders also allege the issuance of a permit (based on a preliminary JD) at one member‘s former property, DeGrazia Decl. ¶¶ 20, 24-25, but because that member no longer owns that property, the requested declaratory relief could not redress his alleged injury there, see Home Builders I, 667 F.3d at 12, 14.
Nor have Home Builders shown plans imminently to discharge into a likely jurisdictional watercourse. Home Builders’ allegations that “development activities on [member] property will result in discharges” into washes that are allegedly tributaries of the Santa Cruz, Kreis Decl. ¶ 33, are materially the same as those we previously held to be insufficiently concrete and imminent, see Home Builders I, 667 F.3d at 15. We found allegations that members “‘regularly’ undert[ook] construction projects” that could not “be conducted without impacting [certain water features] within the Santa Cruz River watershed” were not allegations of discharges “any time soon,” and thus fell short of “‘establishing certainly impending dangers.‘” Id.
Finally, a principal focus of Home Builders’ renewed standing case is what they see as increased risk of regulation. Their complaint is that the TNW Determination makes it “more difficult to challenge the assertion of CWA jurisdiction over the
Relatedly, Home Builders contend that “the regulated community normally has standing to bring facial challenges to agency rules that regulate their members’ activities,” Appellant Br. 34, and that their standing in this case “should be self-evident, given that their members’ land development activities are regulated by the challenged agency rule,” Appellant Reply 14. They are correct that regulated entities’ standing to challenge the rules that govern them is “normally not an issue,” Appellant Br. 30; Appellant Reply 10 (same), because regulatory constraints typically qualify as injury in fact, see, e.g., Fund for Animals, Inc. v. Norton, 322 F.3d 728, 733 (D.C. Cir. 2003); Sierra Club v. EPA, 292 F.3d 895, 899-900 (D.C. Cir. 2002). Such standing is not, however, automatic, but depends on plaintiffs showing that they satisfy the doctrinal requirements of Article III. See, e.g., Lujan, 504 U.S. at 561-62, 571-73; CTS Corp. v. EPA, 759 F.3d 52, 57-58 (D.C. Cir. 2014) (recognizing that the “court, as a matter of constitutional duty, must assure itself of its jurisdiction to act in every case,” including where a corporation challenged an EPA listing action that harmed the firm‘s reputation and increased its risk of liability); Nat‘l Ass‘n of Home Builders v. U.S. Army Corps of Eng‘rs, 417 F.3d 1272, 1286-87 (D.C. Cir. 2005) (observing that organizations representing regulated parties must “satisfy the ‘irreducible constitutional minimum’ of Article III standing“); CropLife Am. v. EPA, 329 F.3d 876, 884 (D.C. Cir. 2003) (concluding that binding agency directive caused injury to industry petitioners that was sufficiently concrete and redressable to satisfy Lujan). In regulated-party cases, as in other types of challenges, “standing is always a case- and context-specific inquiry.” CTS, 759 F.3d at 58. For the reasons already set forth, Home Builders have failed to show Article III injury in a manner that satisfies the curable defect exception to issue preclusion.
We are bound by the conclusion in Home Builders I that Plaintiffs alleged no actual or imminent harm that is sufficiently concrete and particularized to support their Article III standing. Because Home Builders have not found a new cure for the fatal standing defect in their first suit, issue preclusion must bar this second attempt.
Because we affirm for lack of standing, we need not decide whether the TNW Determination constitutes final agency action.
It is so ordered.
I agree with the court that we are precluded by our prior opinion from acknowledging appellants’ standing. I write separately because I think Home Builders I1 is incorrectly decided and is quite at odds with our jurisprudence. To put it bluntly, it sticks out like a sore thumb.
I.
Our prior holding, which binds us, concluded that appellants did not have standing unless and until their members were a target of an enforcement action (charging illegal discharge) or the government (the Corps of Engineers) issued an “approved jurisdictional determination.” That latter action follows a request of a property owner for the government‘s official position as to whether its property contains “waters of the United States” or navigable waters of the United States. In other words, our prior opinion concluded that appellants lacked standing to challenge the alleged rule until the government took official action to assert authority over a member of appellants’ associations. I believe that reasoning conflates the appropriate standing analysis for an adjudicatory challenge and a challenge to a rulemaking. The latter asks only whether parties are likely covered by the regulation—or purported regulation—not whether the government has actually started an enforcement action or officially asserted a right to do so.
Of course, for standing purposes, we must assume the validity of appellants’ challenge on the merits; i.e., we must assume that when the EPA issued a “determination” asserting that more than 50 miles of the Santa Cruz River were designated as traditional navigable waters, it should have done so through a traditional rulemaking under
Previously, as Corps staff members observed in emails urging the EPA to affirm the Corps’ recommendation, the nearest traditional navigable water to that watershed basin was likely 300 miles away. Post-Rapanos, the agencies had not taken the position that land parcels within the watershed were categorically affected by the presence of a traditional navigable water (that is, to the extent a parcel containing a water feature has a significant nexus to the Santa Cruz River). To reiterate, in asking whether appellants have standing, the question is exactly the same as asking whether they would have had standing to challenge this legal position if it were embodied in an APA rule.
And the law is rather clear; any party covered by an agency‘s regulatory action has standing to challenge a rule when it issues—it certainly need not wait until a government agency seeks to enforce a rule. See Chamber of Commerce v. Fed. Election Comm‘n, 69 F.3d 600, 604 (D.C. Cir. 1995). That proposition is so clearly established it is beyond question. Nor do parties have to wait until the government takes preliminary steps before enforcing—clearing its throat, so to speak. It is only necessary for a potential litigant to show that it is part of the regulated class and its behavior is likely affected by the government‘s action.
I think that would have sufficed for standing under our cases. See Nat‘l Ass‘n of Home Builders v. U.S. Army Corps of Eng‘rs, 417 F.3d 1272, 1286-87 (D.C. Cir. 2005) (“[I]t is fairly ‘self-evident’ that the various appellants as representatives of the regulated parties ... [have] Article III standing“); Sierra Club v. EPA, 292 F.3d 895, 899-900 (D.C. Cir. 2002) (if a petitioner is an object of the agency action or is directly affected by it—as is the case usually in a rulemaking—there should be little question that it has standing); Fund for Animals, Inc. v. Norton, 322 F.3d 728, 733-34 (D.C. Cir. 2003) (standing can be self-evident when the challenged rule directly regulates the disposition of a petitioner‘s property); Sabre, Inc. v. Dep‘t of Transp., 429 F.3d 1113, 1119 (D.C. Cir. 2005) (previously unregulated independent computer reservation system operator had standing to challenge an FAA regulation that subjected it to the Department‘s regulatory authority); Shays v. Fed. Election Comm‘n, 414 F.3d 76, 93 (D.C. Cir. 2005) (congressmen had standing to launch a conventional administrative law claim, i.e., a facial challenge to allegedly invalid regulations affecting their interests); Am. Trucking Ass‘ns v. Fed. Motor Carrier Safety Admin., 724 F.3d 243, 247 (D.C. Cir. 2013) (an association created to promote and protect the interests of the trucking industry had representational standing because it had an obvious interest in challenging a rule that directly and negatively impacts its members); Nat‘l Min. Ass‘n v. U.S. Army Corps of Eng‘rs, 145 F.3d 1399, 1401 (D.C. Cir. 1998) (omitting mention of standing (surely because it was so obvious), allowing trade association whose members engage in dredging and excavation to mount a facial challenge to the Corps’ amendment of a regulation defining section 404‘s term “discharge of dredged material“).
In the case before us—our second case—we have even more. We have affidavits of developers who had obtained “preliminary jurisdictional determinations.” Under the government‘s regulations, a party can hire a consultant to examine its property and prepare a report determining whether it has “waters of the United States” on its property, and therefore must obtain a permit to proceed with development. (After the EPA issued the determination any amount of water on a particular property has different legal significance). The consultant report is submitted to the Corps and qualifies as a “preliminary jurisdictional determination” upon the Corps’ adoption of it, oftentimes with edits. There can be no doubt that such affidavits show standing under any interpretation of our prior cases—or for that matter, I suspect any other court‘s cases. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 562-63 (1992) (an affidavit that a person was planning to visit a particular location would be sufficient to show Article III injury).