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The Fallout from Hawkes: A Little Relief

By Quentin Riegel, Vice President and Deputy General Counsel

The Supreme Court’s unanimous ruling two weeks ago in the Hawkes Co. case is an important victory that will allow manufacturers immediately to challenge agencies that improperly claim that one needs a permit. The decision gives a property owner the right to go to court after an agency—in this case the U.S. Army Corps of Engineers—decides that his or her property is under its regulatory authority. The scope of an agency’s own jurisdictional reach is critical to avoiding—or having to comply with­—a vast number of regulatory requirements with civil and criminal fines for violations.

For the Hawkes Company, the ruling means that the company can proceed in federal district court to resolve whether the Corps actually had jurisdiction over the peat mining at issue. Another company, Kent Recycling Services, LLC, also has an appeal pending at the Supreme Court, and that case is expected to be reversed and remanded to the lower courts for reconsideration.

The Court’s ruling is grounded on the conclusion that the Corps’ jurisdictional determination was final agency action subject to judicial review. The critical questions are whether the agency action ends the agency’s decision-making process and whether the company’s rights or obligations are determined, creating legal consequences. In this case, the Court said “yes” to both questions, making court challenges possible for the tens of thousands of jurisdictional determinations approved every year by the Corps.

Can this ruling be applied to jurisdictional determinations by other agencies under other laws? The decision arises from requirements in the Administrative Procedure Act, which creates a presumption of reviewability of final action by many federal agencies. Even before this case, courts had granted judicial review of prescription drug labeling decisions by the Food and Drug Administration and transport decisions for agricultural commodities by the Interstate Commerce Commission. Consider, for example, whether court challenges become available when the Environmental Protection Agency or state enforcement authorities decide which areas of land are subject to clean-up requirements under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.

The Manufacturers’ Center for Legal Action (MCLA), which filed an amicus brief calling for this result, is interested in learning from you about other regulatory decisions that might become immediately reviewable in court, aside from final regulations that are already the focus of many of our litigation efforts. We’ll update you with what we hear.

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