June 7, 2016

SCOTUS Deals Obama Another Blow

  • Last week, the Supreme Court sided with private property owners and rejected President Obama’s attempts to expand Washington control over more Americans.
  • The unanimous decision adds to a string of high court failures for Obama by reversing another regulatory power grab.
  • The decision could spell trouble for the administration’s rule expanding the definition of “waters of the U.S.”

In a unanimous decision last week, the Supreme Court ruled that landowners can challenge attempts by the U.S. Army Corps of Engineers to subject private property to the Clean Water Act. The decision was the latest by a federal court slapping down the administration’s abuse of this law. It could spell trouble for the Obama administration’s rule expanding the definition of “waters of the U.S.”

“The [Clean Water] Act … continues to raise troubling questions regarding the Government’s power to cast doubt on the full use and enjoyment of private property throughout the Nation.” – Justice Anthony Kennedy, 05-31-2016

In this case, Army Corps of Engineers v. Hawkes Co., the Corps issued an “approved jurisdictional determination” that the property of three companies in Minnesota contained wetlands that could be considered waters of the United States. The Corps decided that there was a “significant nexus” to the Red River 120 miles away. Under the agency’s rules, this determination meant that the land was subject to federal regulation under the Clean Water Act.

The Supreme Court explained that this left the property owners with three options:

(1) Go through an arduous and expensive process to get a permit to use the land, including filing suit if they were denied. The court noted that the permit application process on average takes 788 days and costs $271,596 to complete.

(2) Face substantial civil and criminal penalties by going ahead without a permit. Civil penalties alone could add up to $37,500 per day.

(3) Completely abandon their plans to use the property.

The Administrative Procedure Act authorizes judicial review of a final agency action, like an approved jurisdictional determination, for which there is no other adequate remedy. The Obama administration argued that the companies’ three options amounted to adequate remedies, and so they could not even challenge the Corps’ jurisdictional determination in court. The justices rejected that argument, writing that the companies “need not assume such risks while waiting for [the administration] to ‘drop the hammer’ in order to have their day in court. Nor is it an adequate alternative to APA judicial review for a landowner to apply for a permit and then seek judicial review in the event of an unfavorable decision.”

The court’s decision in this case could fracture the legal foundation of the Obama administration’s rule expanding the definition of “waters of the United States” for purposes of the Clean Water Act. The WOTUS rule, which the administration finalized last summer, extends federal jurisdiction to irrigation ditches, isolated ponds, prairie potholes, and other non-navigable waters. The rule is a flawed, overreaching attempt to address previous court cases.

Nearly 90 plaintiffs have filed lawsuits regarding the legality of the rule, including 31 state governments. The U.S. Court of Appeals for the Sixth Circuit has imposed a nationwide stay on the rule pending further judicial proceedings, which are expected to conclude at the Supreme Court. If the Hawkes case is an indication, the justices could reject the Obama administration’s rules that make it hard for Americans to prove that their property contains no “waters of the United States.” 

Issue Tag: Energy