United States District Court, D. Minnesota
Hawkes Co., Inc., Pierce Investment Co., and LPF Properties, LLC, Plaintiffs,
United States Army Corps of Engineers, Defendant.
Gregory R. Merz, Esq., and Nancy Quattlebaum Burke, Esq.,
Gray Plant Mooty Mooty & Bennett, PA, Minneapolis, MN, on
behalf of Plaintiffs.
R. Dertke, Esq., United States Department of Justice,
Washington, D.C., Friedrich A.P. Siekert, Esq., United States
Attorney's Office, Minneapolis, MN, and Molly McKegney
Hunt, Esq., United States Army Corps of Engineers, St. Paul,
MN, on behalf of Defendant.
MEMORANDUM OPINION AND ORDER
MONTGOMERY U.S. DISTRICT JUDGE
October 28, 2016, the undersigned United States District
Judge heard oral argument on Plaintiffs Hawkes Co., Inc.
(“Hawkes”), Pierce Investment Co. (“Pierce
Investment”), and LPF Properties, LLC's
(“LPF”) Motion for Summary Judgment [Docket No.
49] and Defendant United States Army Corps of Engineers'
(the “Corps”) Cross Motion for Summary Judgment
[Docket No. 79]. For the reasons set forth below,
Plaintiffs' Motion is granted and the Corps' Cross
Motion is denied.
case arises from a determination made by the Corps that it
has jurisdiction, under the Clean Water Act, 33 U.S.C. §
1251 et seq. (“CWA”), over 150 acres of wetlands
located more than 90 river miles and 40 aerial miles from the
nearest navigable water, the Red River of the North
(“Red River”). Plaintiffs seek judicial review
pursuant to the Administrative Procedures Act, 5 U.S.C.
§ 702 et seq. (“APA”), of this
jurisdictional determination. Plaintiffs argue that the
determination must be reversed as arbitrary, capricious, and
contrary to law because the administrative record lacks
sufficient evidence to support the exercise of CWA
jurisdiction over the specific wetlands at issue.
Proposed Expansion of Peat Mining Operations
Hawkes is a peat mining company that plans to mine peat from
150 acres of wetlands (the “Wetlands”) located on
a 530-acre parcel of land owned by affiliated corporations
Pierce Investment and LPF, also Plaintiffs. Administrative
Record (“AR”) [Docket No. 65] 87.The Wetlands are
located in Marshall County, Minnesota and contain high
quality peat that Hawkes seeks to mine for use in the
construction of golf greens. Id. Hawkes is already
mining peat from nearby land. Expanding operations to include
the 150 additional acres would extend the life of Hawkes'
mining operations for approximately 16 more years. AR 88.
Clean Water Act and Significant Nexus Test for
expanded peat mining project would involve the filling or
discharge of materials onto the Wetlands. The CWA prohibits
the discharge of materials into “navigable waters,
” which are broadly defined as “waters of the
United States.” 33 U.S.C. §§ 1251(a),
1311(a), 1362(6). The Corps has authority under the CWA to
issue permits for the discharge of dredged or fill materials
into navigable waters, including wetlands. See 33
U.S.C. § 1344. The Corps determines whether particular
property qualifies as “waters of the United
States” (and is thus subject to its permitting
jurisdiction under the CWA) by issuing a document called an
“Approved Jurisdictional Determination” or
“JD.” 33 C.F.R. §§ 320.1(b), 325.9,
determine whether the wetlands at issue are “waters of
the United States” under the CWA, the Corps has applied
the “significant nexus” test established by
Justice Kennedy in his concurring opinion in Rapanos v.
United States, 547 U.S. 715, 778-82 (2006) (Kennedy, J.,
concurring). Under this standard, the Corps has
jurisdiction over the wetlands in question if a
“significant nexus” exists between the wetlands
and navigable waters in the traditional sense. Id.
at 779. “The required nexus must be assessed in terms
of the [CWA's] goals and purposes, ” which are
“to ‘restore and maintain the chemical, physical,
and biological integrity of the Nation's
waters.'” Id. (quoting § 33 U.S.C.
§ 1251(a)). The rationale for regulating wetlands under
the CWA is that “wetlands can perform critical
functions related to the integrity of other waters-functions
such as pollutant trapping, flood control, and runoff
storage.” Id. at 779-80 (citing 33 C.F.R.
§ 320.4(b)(2)). Accordingly, wetlands satisfy the
significant nexus test if:
the wetlands, either alone or in combination with similarly
situated lands in the region, significantly affect the
chemical, physical, and biological integrity of other covered
waters more readily understood as “navigable.”
When, in contrast, wetlands' effects on water quality are
speculative or insubstantial, they fall outside the zone
fairly encompassed by the statutory term “navigable
Id. at 780. The test is met if the wetlands in
question significantly affect any one of the three
attributes-physical, biological, or chemical.
a wetland will not satisfy the significant nexus test if its
effect on water quality is speculative or insubstantial.
Bailey, 571 F.3d at 798 (citing Rapanos,
547 U.S. at 780). “Justice Kennedy created the
significant nexus test specifically because he was disturbed
by the assertion of jurisdiction over wetlands situated along
a ditch ‘many miles from any navigable-in-fact water,
' carrying ‘only insubstantial flow toward
it.'” Precon Dev. Corp., Inc. v. U.S. Army
Corps of Eng'rs, 633 F.3d 278, 295 (4th Cir. 2011)
(quoting Rapanos, 547 U.S. at 786 (Kennedy, J.,
as here, the Corps seeks to regulate wetlands based on
adjacency to a non-navigable tributary, it must establish a
significant nexus on a case-by-case basis. Rapanos,
547 U.S. at 782 . “Given the potential overbreadth of
the Corps' regulations, this showing is necessary to
avoid unreasonable applications of the statute.”
Id. Although the significant nexus test “does
not require laboratory tests or any particular quantitative
measurements in order to establish significance, ” the
Corps must present “some evidence of both a nexus and
its significance.” Precon, 633 F.3d at 294.
“Otherwise, it would be impossible to engage
meaningfully in an examination of whether a wetland ha[s]
‘significant' effects or merely
‘speculative' or ‘insubstantial' effects
on navigable waters.” Id. Moreover, the use of
conditional language to assess the significance of the
tributaries to which the wetlands are connected “could
suggest an undue degree of speculation, and a reviewing court
must identify substantial evidence supporting the Corps'
claims” of jurisdiction. Rapanos, 547 U.S. at
Initial Jurisdictional Determination
December 2010, Hawkes applied to the Corps for a permit to
begin mining peat from the Wetlands. AR 80. On February 7,
2012, the Corps' St. Paul District
(“District”) issued an Approved Jurisdictional
Determination (the “Initial JD”) in which it
concluded that the Corps has jurisdiction over the Wetlands
based upon a significant nexus between the Wetlands and the
Red River, the nearest traditional navigable water. See
generally AR 421-42. The Red River is located at least
93 river miles and 42 aerial miles from the Wetlands.
See AR 120.
Initial JD determined that the Wetlands are part of a
contiguous 591-acre wetland complex (the “Wetland
Complex”) that flows through a man-made ditch, then
into an unnamed seasonal tributary, then to the Middle River,
and ultimately to the Red River. AR 427, 430. More
specifically, water from the 151-acre Wetlands flows south
under a county road via two 24" culverts, and onto
neighboring wetlands located on the other side of the road.
AR 430, 439. The water then continues to flow south through
the neighboring wetlands until it reaches a 448-linear foot
wetland drainage feature that directs the water east. AR 430,
440. The drainage feature connects with a 512-linear foot
man-made ditch that cuts through an upland pasture or
hayfield of a neighboring farm. Id. The 512-foot
upland ditch does not have a continuous ordinary high water
mark. AR 430. Water travels through the upland
ditch and is discharged into an unnamed seasonal tributary.
Id. The seasonal tributary then flows approximately
1, 500 feet southeast before merging with another stream and
entering the Middle River, which flows into the Red River. AR
427, 430, 436.
Initial JD acknowledged that water flow in the seasonal
tributary connecting Wetlands to the Red River had not been
observed during the Corps' field investigations.
See AR 436 (“Flow in the unnamed tributary has
not been quantitatively assessed and the only direct
observations of the [tributary] were made in December of 2011
at which time there was standing water in pools but no
continuous flow.”); AR at 428 (“Surface flows
were not observed in the tributary by the Corps
staff.”). Nevertheless, the Initial JD stated that
“[a]lthough not verified, surface flows [in the
tributary] are believed to occur in response to snowmelt and
precipitation and would most likely be present between March
and June and after significant precipitation events in other
portions of the growing season.” AR 429.
evaluate this potential flow, the Corps utilized its seasonal
stream evaluation protocol, which uses drainage area
measurements to predict whether a tributary will have
seasonal flow (i.e., continuous flow for at least three
months). AR 427. The tributary's drainage area was more
than double the threshold size that typically satisfies the
Corps' definition of seasonal flow. Id. Thus,
the Initial JD found it “reasonable to conclude”
that the tributary has seasonal flow. Id.; see
also AR 436 n.3 (“The Corps has not quantitatively
assessed the flow regime of the tributary but, based on the
size of the drainage area, observed flow through the wetlands
in June , and direct observations of what are believed
to be groundwater supported pools in the stream channel, has
preliminarily established that the stream has an intermittent
Initial JD also speculated that groundwater may contribute to
the tributary's flow based on the existence of the pools
in the midst of a severe drought, but stated that
“additional site investigations would be required to
confirm this contribution, ” AR 427, and that the
groundwater contribution “ha[d] not been
confirmed.” AR 428. Additionally, the water quality of
the tributary was not formally assessed but was
“expected to be good based on adjacent land uses,
amount of wetlands in the area, and buffers around the
Initial JD also discussed functions that are generally
performed by wetlands, such as reducing downstream flooding
by providing floodwater storage, and reducing downstream
pollution by retaining excess nutrients and sediments. AR
438. The general functions of streams and tributaries were
also discussed, including their role in transporting
nutrients and chemicals to downstream waters. Id.
Initial JD also described characteristics of the Red River,
including its history of frequent flooding, and its listed
status with the Minnesota Pollution Control Agency as
impaired for aquatic life and aquatic consumption due to
turbidity, as well as mercury and PCB in fish tissue. AR 437.
The Initial JD concluded that “[t]he functions of the
wetlands . . . combined with the functions provided by the
tributary results in a significant nexus to the Red
River.” AR 434.
April 4, 2012, Plaintiffs administratively appealed the
Initial JD to the designated Corps Review Officer. AR
471-518. Plaintiffs argued, among other things, that the
Corps had not provided site-specific data showing that the
Wetlands have more than a speculative or insubstantial effect
on the chemical, physical, or biological integrity of the Red
the chemical connection, Plaintiffs argued that the Initial
JD provided no measurable or quantitative data on how the
Wetlands would affect the chemical integrity of the Red
River. AR 654. Rather, the Initial JD talked only in
generalities about the functions of headwater streams and
wetlands and their importance for nutrient transformation.
the physical connection, Plaintiffs contended that any
connection was insignificant because there was little to no
flow from the Wetlands to the Red River. AR 656.
Additionally, Plaintiffs argued that the Wetlands'
considerable distance from the Red River caused any
connection between them to be speculative and insubstantial
at best. AR 478.
respect to the biological connection, Plaintiffs argued that
the Wetlands provide no fish habitat to support such a
connection, the flow in the tributary is too minimal to
constitute a significant biological contribution to the Red
River, and the Wetlands are ecologically different from the
Middle River biome because they are a rich fen, whereas the
Middle River is a bottomland forest. AR 659.
October 24, 2012, the Corps issued an Administrative Appeal
Decision (“Appeal Decision”), concluding that the
Administrative Record lacked sufficient documentation to
support a finding that the Wetlands have a significant nexus
that is more than insubstantial or speculative on the
chemical, physical, and biological integrity of the Red
River. AR 648, 660. The Appeal Decision stated that the
Initial JD spoke only to the overall functions provided by
stream headwaters and wetlands in general, and did “not
speak to how the functions that the specific onsite wetland
and tributaries have a significant nexus that is more than
speculative or insubstantial on the chemical, physical, or
biological integrity of the downstream [traditional navigable
water].” AR 660. For each of these attributes-chemical,
physical, and biological-the Appeal Decision identified the
reasons that the Administrative Record was deficient and the
actions needed to complete the record.
Appeal Decision noted that the Initial JD's description
of the tributary's chemical properties includes
statements that “[s]urface flows were not observed in
the tributary by the Corps staff, ” that “[w]ater
quality has not been formally assessed, ” and that
“there is no water quality data for the unnamed
tributary.” AR at ...