August 15, 2005

Federal Appeals Court Holds That Challenges to Corps of Engineers Wetlands Permit Regulations Are Ripe for Review

Holland & Knight Newsletter
Rafe Petersen

In a big win for aggregates companies and for public agencies that build transportation and water resource projects, the U.S. Court Appeals for the District of Columbia Circuit, on July 29, 2005, reversed a lower court decision finding that their challenge to the U.S. Army Corps of Engineers (Corps) 2002 Nationwide Permit Regulations (NWP) under the federal Clean Water Act was final agency action and, therefore, “ripe for review.” The aggregates industry and public agencies had challenged numerous provisions in the NWP regulations, particularly focusing on NWP 43 for storm water management and NWP 44 for mining, asserting that these NWPs were essentially useless given the severe restrictions on floodplain impacts and the one-half acre national cap in wetlands impacts. In November 2003, Judge Richard Leon refused to address the merits, finding that the NWP regulations were not final and reviewable.

Writing for the unanimous three-judge panel reversing the lower court, Judge Karen Henderson held that the NWP regulations were final and “ripe for review.” The Court stated that “because the Corps NWPs mark the completion of the Corps decision-making process and affect the appellants day-to-day operations, they constitute final agency action regardless of the fact that the Corps action might carry different (or no) consequences for a different challenger, such as an environmental group.” The Court particularly cited the NWPs adverse impacts on a company’s decision making stating that “if the appellants planned activities do not meet the applicable NWP’s conditions and thresholds they have two options. They can either put their projects on hold and run the Corps individual-permit gauntlet or modify the project conditions. Either way, through increased delay or project modification, the NWPs directly affect the investment and project development choices of those whose activities are subject to the CWA.”

The Court also held that the NWPs were regulations and subject to the Federal Administrative Procedure Act requirements and that the Regulatory Flexibility Act claim requiring consideration of economic impacts on small businesses was also ripe for review. The Court, however, held that the appellants could not press their NEPA claim for lack of standing. The case will now be sent back to the District Court which will consider numerous claims that the 2002 NWP regulations violated the CWA.

Larry Liebesman, Rafe Petersen and Ethan Arenson of Holland & Knight’s Washington, D.C. office represented the National Stone Sand and Gravel Association (NSSGA), the American Road and Transportation Builders Association (ARTBA) and the Nationwide Public Projects Coalition (NPPC). Other appellants included the National Association of Home Builders (NAHB), the National Federation of Independent Businesses (NFIB) and Wayne Newnam, an Ohio homebuilder.

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