United States Court of Appeals

For the Eighth Circuit

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No. 13-3067

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Hawkes Co., Inc., et al.

lllllllllllllllllllll Plaintiffs - Appellants

v.

United States Army Corps of Engineers

lllllllllllllllllllll Defendant - Appellee

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American Farm Bureau Federation; National Association of Home Builders;

National Mining Association; American Petroleum Institute; Utility Water Act

Group; Foundation for Environmental and Economic Progress

lllllllllllllllllllllAmici on Behalf of Appellants

____________

Appeal from United States District Court 

for the District of Minnesota - Minneapolis

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 Submitted: December 11, 2014

 Filed: April 10, 2015

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Before LOKEN, BRIGHT, and KELLY, Circuit Judges.

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LOKEN, Circuit Judge.
Hawkes Co., Inc. (Hawkes), wishes to mine peat from wetland property owned

by two affiliated companies in northwestern Minnesota. The United States Army

Corps of Engineers derailed that plan when it issued an Approved Jurisdictional

Determination (“JD”) that the property constitutes “waters of the United States”

within the meaning of the Federal Water Pollution Control Act (the “Clean Water

Act” or “CWA”), and therefore appellants must have a permit to discharge dredged

or fill materials into these “navigable waters.” See 33 U.S.C. §§ 1344(a), 1362(7). 

Appellants brought this action seeking judicial review of the JD and now appeal the

district court’s grant of the government’s motion to dismiss their Amended Complaint. 

The district court concluded that an approved JD, though the consummation of the

Corps’ jurisdictional decisionmaking process, was not a “final agency action” within

the meaning of the Administrative Procedure Act, 5 U.S.C. § 704. While the appeal

was pending, a panel of the Fifth Circuit reached the same conclusion. Belle Co.,

LLC v. U.S. Army Corps of Eng’rs, 761 F.3d 383 (5th Cir. 2014), cert. denied, 83

U.S.L.W. 3291 (U.S. Mar. 23, 2015) (No. 14-493). 

We conclude that both courts misapplied the Supreme Court’s decision in

Sackett v. EPA, 132 S. Ct. 1367 (2012). Therefore, we reverse. 

I.

The CWA requires a permit from the Corps to discharge dredged or fill

materials into “navigable waters,” and a permit from the Environmental Protection

Agency (or an authorized state agency) to discharge any “pollutant” into navigable

waters. See 33 U.S.C. §§ 1311(a), 1342, 1344. The statute defines “navigable

waters” to mean “the waters of the United States,” § 1362(7). This broad definition

prompted the Corps and the EPA to make “sweeping assertions of jurisdiction” over

every stream, ditch, and drain that can be considered a tributary of, and every wetland

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that is adjacent to, traditional navigable waters. Rapanos v. United States, 547 U.S.

715, 726-727 (2006) (plurality opinion). 

In United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 139 (1985),

the Supreme Court held that the Corps may require permits for the discharge of fill

material into wetlands adjacent to the “waters of the United States.” But in Solid

Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S.

159, 166 (2001), the Court rejected the Corps’ assertion of CWA jurisdiction over

“nonnavigable, isolated, intrastate waters” where migratory birds are present. And in

Rapanos, the Court concluded that the Corps’ asserted jurisdiction over “wetlands

based on adjacency to nonnavigable tributaries” went beyond its statutory authority. 

547 U.S. at 782 (Kennedy, J., concurring in the judgment). Because the Court’s

plurality and Justice Kennedy adopted different narrower tests to determine when

wetlands are “waters of the United States,” we held “that the Corps has jurisdiction

over wetlands that satisfy either . . . test” in United States v. Bailey, 571 F.3d 791, 799

(8th Cir. 2009). 

The CWA imposes heavy civil and criminal penalties on a person who

discharges into navigable waters without a required permit, or in violation of an issued

permit. See 33 U.S.C. § 1319; Rapanos, 547 U.S. at 721. When the Corps or the EPA

finds that a person is violating the CWA’s discharge restrictions, or a permit issued

under the CWA, the agency “shall issue an order requiring such person to comply,”

as in Sackett, or bring a civil enforcement action, as in Riverside Bayview Homes and

Rapanos. See 33 U.S.C. §§ 1319(a)(3) (EPA) and 1344(s) (Corps). In Sackett, the

EPA issued an administrative compliance order against a person for depositing fill

into jurisdictional wetlands without a permit, ordering, among other remedies, that the

site be restored. The EPA persuaded the lower courts the order was not subject to

“pre-enforcement judicial review.” Applying the test for determining a final agency

action in Bennett v. Spear, 520 U.S. 154, 177-78 (1997), a unanimous Court held that

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the compliance order was a final agency action subject to immediate judicial review

under the APA:

[I]t is hard for the Government to defend its claim that the issuance of

the compliance order was just “a step in the deliberative process” when

the agency rejected the Sacketts’ attempt to obtain a hearing and when

the next step will either be taken by the Sacketts (if they comply with the

order) or will involve judicial, not administrative, deliberation (if the

EPA brings an enforcement action). 132 S. Ct. at 1373.

The question in this case is whether the Court’s application of its flexible final

agency action standard in Sackett1

 should also apply in this case, where appellants

seek judicial review of an adverse JD without either completing the CWA permit

process or risking substantial enforcement penalties by mining peat and discharging

dredged or fill materials without a permit. That question requires a close look at the

allegations in their Amended Complaint.

II.

In reviewing the district court’s Rule 12(b)(6) dismissal, we accept as true the

facts alleged in the Amended Complaint. Hawkes is in the business of mining and

processing peat, a “wetland dependant” activity regulated in Minnesota through

permits issued by the Minnesota Department of Natural Resources. Pierce Investment

Co. and LPF Properties, LLC, have property interests in a 530-acre parcel in

1

The Court has consistently taken a “pragmatic” and “flexible” approach to the

question of finality, and to the related question whether an agency action is ripe for

judicial review. See Abbott Labs. v. Gardner, 387 U.S. 136, 148-50 (1967); accord

Bell v. New Jersey, 461 U.S. 773, 779 (1983); Pac. Gas & Elec. Co. v. State Energy

Res. Conserv. & Dev. Comm’n, 461 U.S. 190, 200-201 (1983). 

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northwestern Minnesota that contains high quality peat near Hawkes’s existing peatmining operations. All three companies are owned by members of the Pierce family.

After obtaining an option to purchase the property subject to regulatory

approval, Kevin Pierce and Hawkes met with Corps and MDNR representatives to

discuss Hawkes’s plan to expand its operations to include the property, which would

extend the life of its peat mining ten to fifteen years. In December 2010, Hawkes

applied to the Corps for a CWA permit. At a January 2011 meeting, Corps

representatives urged Pierce to abandon his plan, emphasizing the delays, cost, and

uncertain outcome of the permitting process. Pierce responded that he had an option

to purchase and intended to proceed. In March, the Corps sent a letter advising it had

made a “preliminary determination” the wetland is a regulated water of the United

States and, “at a minimum,” an environmental assessment would be required. At an

April meeting, a Corps representative told Pierce a permit would take years and the

process would be very costly. During a site visit in early June, another Corps

representative told a Hawkes employee that “he should start looking for another job.” 

In August, the Corps sent Hawkes a letter advising that nine additional information

items costing more than $100,000 would be needed, including hydrological and

functional resource assessments and an evaluation of upstream potential impacts. In

November, Corps representatives met with the land owner and urged that he sell the

property to a “wetlands bank,” advising that an environmental impact statement would

likely be required, delaying the issuance of any permit for several years. 

Appellants challenged the Corps’ preliminary determination. In November, the

Corps provided a “draft” JD concluding the property was connected by a “Relatively

Permanent Water” (a series of culverts and unnamed streams) that flowed into the

Middle River and then into the Red River of the North, a traditional navigable water

some 120 miles away. Appellants’ wetland consultant pointed out numerous errors

in the analysis. Nonetheless, in February 2012 the Corps issued an Approved JD

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concluding the property was a water of the United States because of its “significant

nexus” to the Red River. See 33 C.F.R. §§ 320.1(a)(6), 325.9. Appellants responded

by filing a timely administrative appeal. See 33 C.F.R. §§ 331.2, 331.3, 331.6.

In October 2012, the Corps’ Deputy Commanding General for Civil and

Emergency Operations sustained the appeal, concluding after detailed analysis that the

administrative record “does not support [the District’s] determination that the subject

property contains jurisdictional wetlands and waters,” and remanding to the District

“for reconsideration in light of this decision.” On December 31, 2012, the Corps

nonetheless issued a Revised JD concluding, without additional information, that there

is a significant nexus between the property and the Red River of the North, and

advising appellants that the Revised JD was a “final Corps permit decision in

accordance with 33 C.F.R. § 331.10,” which meant their administrative remedies were

exhausted. See 33 C.F.R. § 331.12.

Appellants then filed this action seeking judicial review of the Revised JD,

alleging that it does not meet either of the applicable tests for the assertion of CWA

jurisdiction established in Rapanos – the plurality’s “relatively permanent” test, or

Justice Kennedy’s “significant nexus” test. The Corps moved to dismiss the

complaint, arguing the Revised JD was not a final agency action and the issue was not

ripe for judicial review. The district court dismissed the complaint for lack of final

agency action. Hawkes Co., Inc. v. U.S. Army Corps of Eng’rs, 963 F. Supp. 2d 868,

871, 878 (D. Minn. 2013). This appeal followed.

III. 

The APA provides for judicial review of a “final agency action for which there

is no other adequate remedy in a court.” 5 U.S.C. § 704. The APA “evinces

Congress’ intention and understanding that judicial review should be widely available

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to challenge the actions of federal administrative officials.” Califano v. Sanders, 430

U.S. 99, 104 (1977). When an agency action is final and, if final, appropriate for

judicial review are issues that have arisen in a variety of federal agency contexts in the

past one hundred years. See, e.g., Port of Bos. Marine Terminal Ass’n v.

Rederiaktiebolaget Transatl., 400 U.S. 62, 70-71 (1970); Rochester Tel. Corp. v.

United States, 307 U.S. 125, 132 n.11, 143-44 (1939). In Bennett, 520 U.S. at 177-78,

the Court synthesized its prior precedents on the first issue: 

As a general matter, two conditions must be satisfied for agency action

to be “final”: First, the action must mark the consummation of the

agency’s decisionmaking 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.

A. Though the Corps argues otherwise, we agree with the district court (and

every court to consider the issue) that the Revised JD clearly meets the first Bennett

factor -- it was the consummation of the Corps’ decisionmaking process on the

threshold issue of the agency’s statutory authority. See Belle Co., 761 F.3d at 389-90;

Fairbanks N. Star Borough v. U.S. Army Corps of Eng’rs, 543 F.3d 586, 591-93 (9th

Cir. 2008). The regulations provide that an Approved JD “constitute[s] a Corps final

agency action.” 33 C.F.R. § 320.1(a)(6). The Corps’ Regulatory Guidance Letter No.

08-02, at 2, 5, described an Approved JD as a “definitive, official determination that

there are, or that there are not, jurisdictional ‘waters of the United States’ on a site,”

and stated that an Approved JD “can be relied upon by a landowner, permit applicant,

or other affected party . . . for five years” (quotation omitted). Jurisdictional

determinations and permitting decisions are discrete agency actions; a party may

obtain a JD without seeking a permit, and may obtain a permit without seeking an

Approved JD. Fairbanks, 543 F.3d at 593. Thus, when an Approved JD has issued,

“the process of administrative decisionmaking has reached a stage where judicial

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review will not disrupt the orderly process of adjudication.” Port of Bos., 400 U.S.

at 70-71; see Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S. 726, 733 (1998). The

possibility that the agency might informally reconsider its decision “does not suffice

to make an otherwise final agency action nonfinal.” Sackett, 132 S. Ct. at 1372

(quotation omitted). 

B. The district court concluded that the Approved JD does not satisfy Bennett’s

second factor because it is not an agency action “by which ‘rights or obligations have

been determined,’ or from which ‘legal consequences will flow.’” In Sackett, the EPA

compliance order required petitioners to restore property they had altered without a

permit and subjected them to the risk of $75,000 per day in penalties if they chose to

disobey. By contrast, the district court reasoned, appellants “face no such obligations

or changes in their rights as a result of their jurisdictional determination.” They “may

pursue a permit without a disadvantage.” 963 F. Supp. 2d at 876-77. 

1. In our view, this analysis seriously understates the impact of the regulatory

action at issue by exaggerating the distinction between an agency order that compels

affirmative action, and an order that prohibits a party from taking otherwise lawful

action. Numerous Supreme Court precedents confirm that this is not a basis on which

to determine whether “rights or obligations have been determined” or that “legal

consequences will flow” from agency action. 

-- In Bennett, the Court held that a Fish and Wildlife Service biological opinion

satisfied the second factor because it required the Bureau of Reclamation to comply

with its conditions and thereby had “direct and appreciable legal consequences.” 520

U.S. at 158, 178. Though not self-executing, the biological opinion was mandatory. 

Likewise, here, the Revised JD requires appellants either to incur substantial

compliance costs (the permitting process), forego what they assert is lawful use of

their property, or risk substantial enforcement penalties.

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-- In Abbott Laboratories, the Court held that prescription drug labeling

regulations were a final agency action subject to pre-enforcement judicial review

because they “purport to give an authoritative interpretation of a statutory provision”

that puts drug companies in the dilemma of incurring massive compliance costs or

risking criminal and civil penalties for distributing “misbranded” drugs. 387 U.S. at

152-53.

-- In Frozen Food Express v. United States, 351 U.S. 40 (1956), plaintiff sought

judicial review of an Interstate Commerce Commission order declaring that certain

agricultural commodities were not exempt from regulations requiring carriers to

obtain a permit to transport. Id. at 41-42. As in this case, the order “would have

effect only if and when a particular action was brought against a particular carrier.” 

Abbott Labs., 387 U.S. at 150. The Court nonetheless held the order reviewable

because the “determination by the Commission that a commodity is not an exempt

agricultural product has an immediate and practical impact”; it “warns every carrier,

who does not have authority from the Commission to transport those commodities,

that it does so at the risk of incurring criminal penalties.” Frozen Food Express, 351

U.S. at 43-44. Here, the Revised JD is a determination regarding a specific property

that has an even stronger coercive effect than the order deemed final in Frozen Food

Express, which was not directed at any particular carrier. In Port of Boston, 400 U.S.

at 70-71, the Court rejected as having “the hollow ring of another era” the contention

that an “order lacked finality because it had no independent effect on anyone,” citing

Frozen Food Express. 

-- In Columbia Broadcasting System v. United States, 316 U.S. 407 (1942), the

Court held that FCC regulations barring the licensing of stations that enter into

network contracts, though not self-executing, were subject to immediate review. “It

is enough that, by setting the controlling standards for the Commission’s action, the

regulations purport to operate to alter and affect adversely appellant’s contractual

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rights and business relations with station owners whose application for licenses the

regulations will cause to be rejected.” Id. at 422. Here, the Revised JD alters and

adversely affects appellants’ right to use their property in conducting a lawful business

activity. The adverse effect is caused by agency action, not simply by the existence

of the CWA. Though the Revised JD is not-self-executing, “the APA provides for

judicial review of all final agency actions, not just those that impose a self-executing

sanction.” Sackett, 132 S. Ct. at 1373.

2. The Corps argues, and the district court further concluded, that the Revised

JD is not a final agency action “for which there is no other adequate [judicial]

remedy,” 5 U.S.C. § 704, because appellants have two other adequate ways to contest

the Corps’ jurisdictional determination in court -- complete the permit process and

appeal if a permit is denied, or commence peat mining without a permit and challenge

the agency’s authority if it issues a compliance order or commences a civil

enforcement action. These other CWA remedies were held not to preclude judicial

review of the EPA compliance order in Sackett, 132 S. Ct. at 1372. 

In this case, the contention ignores the prohibitive cost of taking either of these

alternative actions to obtain judicial review of the Corps’ assertion of CWA

jurisdiction over the property. First, as a practical matter, the permitting option is

prohibitively expensive and futile. The Supreme Court reported in Rapanos, 547 U.S.

at 721, that the average applicant for an individual Corps permit “spends 788 days and

$271,596 in completing the process.” Moreover, the Amended Complaint alleged that

the Corps’ District representatives repeatedly made it clear to Kevin Pierce, to a

Hawkes employee, and to the landowner that a permit to mine peat would ultimately

be refused. In our view, this alone demonstrates that the second Bennett factor is

satisfied. Moreover, even if appellants eventually complete the permit process, seek

judicial review of the permit denial, and prevail, they can never recover the time and

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money lost in seeking a permit they were not legally obligated to obtain. Cf. Iowa

League of Cities v. EPA, 711 F.3d 844, 868 (8th Cir. 2013).

Second, appellants’ other option -- commencing to mine peat without a permit

and await an enforcement action -- is even more plainly an inadequate remedy. 

Appellants “cannot initiate that process, and each day they wait for the agency to drop

the hammer, they accrue” huge additional potential liability. Sackett, 132 S. Ct. at

1372. Because appellants were forthright in undertaking to obtain a permit, choosing

now to ignore the Revised JD and commence peat mining without the permit it

requires would expose them to substantial criminal monetary penalties and even

imprisonment for a knowing CWA violation. Thus, like the compliance order at issue

in Sackett, the Revised JD increases the penalties appellants would risk if they chose

to begin mining without a permit. See 33 U.S.C. § 1319(c). 

The prohibitive costs, risk, and delay of these alternatives to immediate judicial

review evidence a transparently obvious litigation strategy: by leaving appellants with

no immediate judicial review and no adequate alternative remedy, the Corps will

achieve the result its local officers desire, abandonment of the peat mining project,

without having to test whether its expansive assertion of jurisdiction -- rejected by one

of their own commanding officers on administrative appeal -- is consistent with the

Supreme Court’s limiting decision in Rapanos. For decades, the Corps has

“deliberately left vague” the “definitions used to make jurisdictional determinations,”

leaving its District offices free to treat as waters of the United States “adjacent

wetlands” that “are connected to the navigable water by flooding, on average, once

every 100 years,” or are simply “within 200 feet of a tributary.” Rapanos, 547 U.S.

at 727-28, quoting a GAO report. The Court’s decision in Sackett reflected concern

that failing to permit immediate judicial review of assertions of CWA jurisdiction

would leave regulated parties unable, as a practical matter, to challenge those

assertions. The Court concluded that was contrary to the APA’s presumption of

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judicial review. “[T]here is no reason to think that the Clean Water Act was uniquely

designed to enable the strong-arming of regulated parties into ‘voluntary compliance’

without the opportunity for judicial review -- even judicial review of the question

whether the regulated party is within the EPA’s jurisdiction.” 132 S. Ct. at 1374. 

In our view, a properly pragmatic analysis of ripeness and final agency action

principles compels the conclusion that an Approved JD is subject to immediate

judicial review. The Corps’s assertion that the Revised JD is merely advisory and has

no more effect than an environmental consultant’s opinion ignores reality. “[I]n

reality it has a powerful coercive effect.” Bennett, 520 U.S. at 169. Absent immediate

judicial review, the impracticality of otherwise obtaining review, combined with “the

uncertain reach of the Clean Water Act and the draconian penalties imposed for the

sort of violations alleged in this case . . . leaves most property owners with little

practical alternative but to dance to the EPA’s [or to the Corps’] tune.” “In a nation

that values due process, not to mention private property, such treatment is

unthinkable.” Sackett, 132 S. Ct. at 1375 (Alito, J., concurring). We conclude that

an Approved JD is a final agency action and the issue is ripe for judicial review under

the APA.2

The judgment of the district court is reversed and the case is remanded for

further proceedings not inconsistent with this opinion.

2

The question of ripeness “turns on ‘the fitness of the issues for judicial

decision’ and ‘the hardship to the parties of withholding court consideration.’” Pac.

Gas & Elec. Co., 461 U.S. at 201, quoting Abbott Labs., 387 U.S. at 149. The issues

of ripeness and final agency action are distinct, but in this case, our analysis of the

final agency action factors in Bennett resolves the ripeness issue as well.

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KELLY, Circuit Judge, concurring.

I view whether a JD is reviewable under the APA as a close question. In

Sackett, the Supreme Court concluded that a compliance order issued by the EPA

“severely limits [petitioners’] ability to obtain a permit for their fill from the Army

Corps of Engineers [because] [t]he Corps’ regulations provide that, once the EPA has

issued a compliance order with respect to certain property, the Corps will not process

a permit application for that property unless doing so ‘is clearly appropriate.’” Sackett

v. EPA, 132 S. Ct. 1367, 1372 (2012) (internal citation omitted) (quoting 33 C.F.R.

§ 326.3(e)(1)(iv)).3

 The record in the present case does not reveal that a similar

impediment to receiving a permit exists once a JD has been issued. In Sackett, the

Corps had a published policy regarding the decreased likelihood of receiving a permit;

here, the record includes case-specific facts, such as informal comments made by

Corps representatives, suggesting that a permit application made by Hawkes might be

“futile.” See Majority Opinion, supra, slip op. at 10. However, I question how much

weight should be given to the futility of the permit application for an individual

applicant, or the time and cost spent applying, in determining whether or not the JD

constitutes a final agency action. If a JD is a final agency action, an applicant who is

likely to obtain a permit would still be in a position to seek judicial review of the JD. 

Similarly, it must be the case that were the Corps to take steps to make the permit

process both more efficient and less costly, the reviewability of the JD would not

change. 

3

 “No permit application will be accepted nor will the processing of an

application be continued when the district engineer is aware of enforcement litigation

that has been initiated by other Federal, state, or local regulatory agencies, unless he

determines that concurrent processing of an after-the-fact permit application is clearly

appropriate.” 33 C.F.R. § 326.3(e)(1)(iv)

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I also note other differences between the compliance order in Sackett and the

JD in the present case. A compliance order, once issued, begins the accumulation of

penalties (potentially doubled) for each day the landowner remains in violation. Id.

A JD, however, has no such penalty scheme. Indeed, 33 U.S.C. § 1319(d), the CWA’s

enforcement section on civil penalties, makes no mention of JDs. While the existence

of a JD may affect a court’s assessment of a party’s “good faith” while determining

civil penalties, I agree with the other courts that have considered this issue that any

penalties resulting from a JD are far more “speculative” than those threatened in

Sackett. Belle Co., LLC v. U.S. Army Corps of Eng’rs, 761 F.3d 383, 392 (5th Cir.

2014); see also, Fairbanks N. Star Borough v. U.S. Army Corps of Eng’rs, 543 F.3d

586, 595 (9th Cir. 2008). The Appellants fail to point to a single case in which

increased civil penalties were levied against a party for ignoring a JD. 

Despite these dissimilarities with the circumstances in Sackett, I agree that

Hawkes is left without acceptable options to challenge the JD, absent judicial review. 

Hawkes’s choice is to either (1) follow through on their peat-mining plans until either

the EPA issues a compliance order or the Corps commences an enforcement action,

to both of which Hawkes could raise lack of CWA jurisdiction as a defense; or (2)

apply for a permit (on the grounds that no permit is required) and, if the application

is denied, appeal the denial in court. But what happens if Hawkes is, after all, granted

a permit yet maintains it never needed one in the first place? It must decline the

permit and challenge the original jurisdiction in court. This roundabout process does

not seem to be an “adequate remedy” to the alternative of simply allowing Hawkes to

bring the jurisdictional challenge in the first instance and to have an opportunity to

show the CWA does not apply to its land at all. 

In my view, the Court in Sackett was concerned with just how difficult and

confusing it can be for a landowner to predict whether or not his or her land falls

within CWA jurisdiction—a threshold determination that puts the administrative

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process in motion. This is a unique aspect of the CWA; most laws do not require the

hiring of expert consultants to determine if they even apply to you or your property. 

This jurisdictional determination was precisely what the Court deemed reviewable in

Sackett. See Sackett, 132 S. Ct. at 1374–75 (Ginsburg, J., concurring). Accordingly,

I concur in the judgment of the court. 

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