National Association of Home v. EPA

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 24, 2014 Decided May 15, 2015
No. 13-5290
NATIONAL ASSOCIATION OF HOME BUILDERS, ET AL.,
APPELLANTS
v.
ENVIRONMENTAL PROTECTION AGENCY, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:13-cv-00078)
Norman D. James argued the cause for appellants. With
him on the briefs was Aaron T. Martin. Felicia K. Watson
entered an appearance.
Katherine J. Barton, Attorney, U.S. Department of
Justice, argued the cause for appellees. With her on the brief
were Robert G. Dreher, Acting Assistant Attorney General,
and Andrew J. Doyle and Robert J. Lundman, Attorneys.
Before: PILLARD, Circuit Judge, and SILBERMAN and
SENTELLE, Senior Circuit Judges.
2
Opinion for the Court filed by Circuit Judge PILLARD.
Concurring opinion filed by Senior Circuit Judge
SILBERMAN, joined by Senior Circuit Judge SENTELLE.
PILLARD, Circuit Judge: We addressed the basic
controversy in this case in Nat’l Ass’n of Home Builders v.
EPA (“Home Builders I”), 667 F.3d 6 (D.C. Cir. 2011), which
dismissed a similar suit involving the same parties for want of
constitutional standing. In both that case and this one, trade-
group plaintiffs (collectively, Home Builders) challenged a
preliminary, internal determination, made by the
Environmental Protection Agency and the United States
Army Corps of Engineers in 2008, that two stretches of the
Santa Cruz River in southern Arizona are traditional
navigable waters. The Clean Water Act regulates “waters of
the United States.” 33 U.S.C. § 1362(7); see Rapanos v.
United States, 547 U.S. 715, 722-23 (2006) (plurality); id. at
760-61 (Kennedy, J., concurring). Some of Home Builders’
members own property within the Santa Cruz River watershed
that they wish to develop. They contend that the agencies’
2008 navigability determination has cognizably harmed them
by making it more likely that they will need Clean Water Act
permits to discharge on their land. They assert that the Corps’
memorandum and the EPA’s letter concluding that the
relevant stretches of the Santa Cruz River are traditional
navigable waters announced a final, binding, legislative rule
unlawfully promulgated without public notice and comment,
thus depriving them of any opportunity to contest it. We hold
that Home Builders’ case for standing, although since
supplemented with new declarations from members adding
factual detail to their assertions of injury, is materially
unchanged and thus precluded by Home Builders I.
3
I.
The Clean Water Act requires a permit for any discharge
of pollutants into the “waters of the United States.” 33 U.S.C.
§§ 1319, 1342, 1344, 1362(7). The Army Corps of Engineers
is responsible for permitting discharges of “dredged or fill
material,” id. § 1344, and the EPA (or a coordinate state
agency) does the permitting for discharges of wastewater or
other pollutants, id. § 1342. In either case, the agency notifies
the public and provides a hearing before ruling on a permit
application. Id. §§ 1342(a)(1), 1344(a); 33 C.F.R. § 325.3.
Precisely which watery—or even intermittently wet—
landscape features count as the “waters of the United States”
for purposes of Clean Water Act jurisdiction is not always
immediately obvious. The variability of natural geography,
and the myriad ways that water runs, washes, trickles, seeps,
or gushes, complicate the task of giving specificity to “waters
of the United States” under the Act. Landowners like Home
Builders’ members may often be uncertain whether to
undertake the cost and inconvenience of seeking a Clean
Water Act permit or whether, conversely, they might safely
dredge, fill, and discharge without one. A bright-line rule
certainly would make things clearer for landowners like
Home Builders, but the Act contains no such rule.
The Supreme Court’s most recent guidance on the matter
comes from the fractured decision in Rapanos, 547 U.S. 715,
where the Court considered whether wetlands adjacent to
tributaries of traditional navigable waters are subject to Clean
Water Act jurisdiction. Justice Scalia wrote for four members
of the Court supporting reversal and remand for further
consideration of the Corps’ asserted jurisdiction. That
plurality concluded that “waters of the United States,” while
not limited to waters that are navigable in the traditional
4
sense, see id. at 730-31, is confined to “only those relatively
permanent, standing or continuously flowing bodies of water
‘forming geographic features’ that are described in ordinary
parlance as ‘streams, oceans, rivers, and lakes,’” id. at 739
(internal alteration marks omitted). Providing a fifth vote to
reverse and remand, Justice Kennedy rejected as unduly
narrow the plurality’s reading of the Act’s text, structure and
purpose—a reading he thought makes “little practical sense in
a statute concerned with downstream water quality.” Id. at
769. The Act also applies to wetlands, he concluded, insofar
as they have a “significant nexus” with traditional navigable
waters. Id. at 779-82. Four dissenting Justices would have
deferred to the Corps’ assertion of its jurisdiction under what
they viewed as its longstanding, reasonable interpretation of
the Act as applicable to traditional navigable waters, their
tributaries, and wetlands adjacent to either. Id. at 792-93
(Stevens, J., dissenting).
To help agency personnel and the regulated community
understand the impact of Rapanos on implementation of the
Clean Water Act, the agencies in 2007 issued interpretive
guidance. The 2007 Rapanos Guidance concluded that the
Act extended only to traditional navigable waters (waters that
are navigable in fact), and non-navigable waters that have a
“significant nexus” with traditional navigable waters—a
narrowing of the agencies’ prior interpretation. See Home
Builders I, 667 F.3d at 10 & n.7, 13 n.8 (citing the agencies’
2007 Rapanos Guidance).
Landowners and developers who want to confirm how
such general standards apply to their particular circumstances
may, in advance of seeking a permit, solicit a written, site-
specific Jurisdictional Determination (JD) from the Corps. A
JD reflects the agency’s judgment about whether and to what
extent a property contains jurisdictional waters, and hence is
5
or is not subject to regulatory jurisdiction under the Clean
Water Act.1 See 33 C.F.R. §§ 320.1(a)(6), 331.2, 325.9. Both
EPA and the Corps use JDs in their respective spheres of
administration of the Act.
JDs may be issued as either “preliminary” or “approved.”
A preliminary JD is an advisory determination, not
administratively appealable, that indicates that “there may be
waters of the United States on a parcel,” and identifies aquatic
features on the property that could be affected by the
proposed activity. 33 C.F.R. § 331.2 (emphasis added).
Preliminary JDs are usually issued at the request of
landowners wishing “to voluntarily waive or set aside
questions regarding CWA[] jurisdiction” over their property,
such as where jurisdiction is clear or is otherwise not worth
contesting. U.S. Army Corps of Eng’rs, No. 08-02, Guidance
Letter: Jurisdictional Determinations (June 26, 2008)
(Appellant Br. Add. 17-23) (hereinafter “JD Guidance”), at 3;
see also id. at 6 (preliminary JDs render an “effective
presumption” of CWA jurisdiction). As part of a shortcut
into the permitting process, a preliminary JD does not make
an official designation of jurisdictional waters. See id. at 3, 6;
Corps Preliminary JD Form, Appellant Br. Add. 24-26; App.
at 311. Rather, an applicant willing to accept a preliminary
JD may move directly to permitting.
An approved JD, in contrast, is a considered statement of
the agency’s view of “the presence or absence of waters of the
United States on a parcel.” 33 C.F.R. § 331.2; see JD
1
See also Home Builders I, 667 F.3d at 10, 13-14 & n.8; Hawkes
Co. v. U.S. Army Corps of Eng’rs, No. 13-3067, 2015 WL
1600465, at *3 (8th Cir. Apr. 10, 2015); Belle Co. LLC v. U.S.
Army Corps of Eng’rs, 761 F.3d 383, 386-87, 390-91 (5th Cir.
2014); Fairbanks N. Star Borough v. U.S. Army Corps of Eng’rs,
543 F.3d 586, 589-90, 592-93 (9th Cir. 2008).
6
Guidance at 1. An approved JD thus announces the agency’s
official determination whether or not the parcel contains
either traditional navigable waters, or features such as washes,
tributaries or wetlands with a significant nexus to traditional
navigable waters, meaning that the Clean Water Act applies.
See Corps Approved JD Form, Appellant. Br. Add. 28-34.
The regulations characterize an approved JD as final agency
action. 33 C.F.R. § 320.1(a)(2), (6). As noted above, a party
can get a discharge permit with a preliminary JD. However,
if a party ever wants to pursue an administrative appeal
challenging Clean Water Act jurisdiction, an approved JD
must be in place. See JD Guidance at 2-5; see 33 C.F.R.
§§ 331.2-331.7. Thus, a party that believes that the agencies
have erroneously asserted Clean Water Act jurisdiction and
wishes to contest it must first obtain (or earlier have obtained)
an approved JD.
After the Supreme Court decided Rapanos and the
agencies issued their Rapanos Guidance, EPA and the Corps
made the traditional navigable waters determination (“TNW
Determination”) that Home Builders challenge here. In a
December 2008 letter from an EPA Assistant Administrator to
an Assistant Secretary of the Army, EPA communicated that
it had reviewed and was thereby affirming a navigability
determination made by the Army Corps of Engineers’ Los
Angeles District regarding the Santa Cruz River. The
District’s staff had concluded, based on evidentiary analysis
and on-site study, that two specified reaches of the Santa Cruz
are traditional navigable waters. In particular, the District
found that the reaches were deep and wide enough, with
sufficient flow, to be commercially and recreationally
navigated, that they had been so navigated, and were likely to
7
be in the future.2 EPA specified that the TNW Determination
was consistent with the Rapanos Guidance, and that the
agencies should immediately implement the determination in
pending and future JDs for the Santa Cruz watershed.
Without more, the agencies’ internal TNW Determination
did not necessarily decide the Clean Water Act’s applicability
to Home Builders’ properties. None of their properties is
alleged to be on the Santa Cruz River. For land positioned
away from the river, a JD could rely on the navigable reaches
of the Santa Cruz as a point of reference in its Rapanos
analysis, but would also have to contain a determination of a
“significant nexus” between waters on the property and the
navigable river reach. And, to the extent that an approved JD
relied on the Santa Cruz River TNW Determination, that
determination would be subject at least to immediate
administrative appeal.3
2
The TNW Determination was made pursuant to a “special case”
classification by EPA under a 1989 Memorandum of Agreement
between the Corps and EPA, pursuant to which EPA, not the Corps,
makes final jurisdictional decisions for purposes of 33 U.S.C.
§ 1344.
3
There is some question whether landowners may seek immediate
judicial review of an approved JD, other than within a challenge to
a compliance order, permit denial, or other action applying the JD.
The Fifth and Ninth Circuits say no, because issuance of an
approved JD is not an action “‘by which rights or obligations have
been determined, or from which legal consequences will flow,’”
Belle, 761 F.3d at 388, 390-94 (quoting Bennett v. Spear, 520 U.S.
154, 178 (1997)); Fairbanks, 543 F.3d at 591, 593-97 (same). The
Eighth Circuit, by contrast, recently held that an approved JD, even
without more, is subject to immediate judicial review. Hawkes,
2015 WL 1600465, at *4-7. We express no opinion on the
question.
8
II.
A.
Home Builders filed their first lawsuit in 2009
challenging the agencies’ 2008 TNW Determination, which
identified reaches of the Santa Cruz River as traditional
navigable waters within the jurisdiction of the Clean Water
Act. The agencies disputed Home Builders’ standing to sue.
Home Builders claimed representational standing based on
asserted concrete injury to their members from the agencies’
designation of the Santa Cruz River—rather than the distant
Colorado River, for example—as the traditional navigable
water nearest to their property. Home Builders contended that
the TNW Determination put its members to the choice of
applying for a permit or facing enforcement penalties. They
emphasized the cost of getting permits, and claimed that the
TNW Determination burdened the investment and project-
development activities of their members. Home Builders
further argued that the agencies’ determination amounted to a
legislative rule, and that standing of regulated entities, such as
their members, to challenge legislative rules is self-evident.
The district court dismissed the case, and a prior panel of
this Court affirmed for want of standing.4 667 F.3d at 11-16.
4
We discuss in text those aspects of our prior holding relevant to
representational standing, the only theory of standing that Home
Builders assert in this case. Home Builders’ complaint also alleged
what they characterized as organizational injury, but they did not
brief that theory, which we rejected in Home Builders I. See 667
F.3d at 11-12. Nor do Home Builders reassert their previously
rejected argument that they have standing based on deprivation of a
procedural right in vacuo. See id. at 15-16.
 9
The earlier panel stated that,
[u]nless and until [an approved] jurisdictional
determination applies the TNW Determination to
particular property (and its watercourses) and finds a
sufficient nexus—or the Agencies use the TNW
Determination in an enforcement action against a
party discharging without a permit—the owner or
developer of the property suffers no incremental
injury in fact from the TNW Determination and any
challenge to it is therefore premature. In the
meanwhile, [Home Builders’] members face only the
possibility of regulation, as they did before the TNW
Determination: Any watercourse on their property
may (or may not) turn out to be subject to [Clean
Water Act] dredging permit requirements because of
a nexus (or not) with the two Santa Cruz reaches.
Id. at 13. Home Builders’ argument that “the TNW
Determination forecloses the issue of the nearest TNW for
site-specific [JDs] within the watershed” was unconvincing,
because an individual landowner or developer might still
“contest the TNW Determination in a challenge to a site-
specific [JD].” Id. at 14 (internal quotation marks, original
alterations omitted). For example, a landowner faced with a
compliance order, penalty assessment, or permit action
predicated on the site-specific JD could certainly challenge it
in that context. See id.; see also supra n.3. We were
unpersuaded by Home Builders’ assertion that its “members
now face the choice of applying for a permit for activities that
[they asserted] are outside the scope of the agencies’ authority
under the [Clean Water Act] or face significant civil or
criminal enforcement penalties for failing to do so”; those
were “the same statutory and regulatory alternatives . . .
members faced before the TNW Determination.” 667 F.3d at
10
14. With or without a generalized TNW Determination, the
agencies could equally have concluded, in a site-specific JD,
that the designated river reaches were traditional navigable
waters. We noted that, “[w]ithout an additional allegation
that the TNW [Determination] substantially increased the risk
of regulation or enforcement relating to particular property,”
the TNW Determination caused no “concrete and
particularized” and “actual or imminent” injury to any
landowner for purposes of standing. Id.
Further, we recognized that the declarations of Home
Builders’ members did not allege that the TNW
Determination “motivated the landowner to seek an
application for a permit,” nor did they explain how the
declaratory or injunctive relief Home Builders sought “would
remedy the past injuries the members may have already
incurred in applying for the permits.” Id. at 14-15. None of
the declarations alleged facts demonstrating that there was a
“greater likelihood of regulation, if any, after than before the
TNW Determination,” or that “any member plan[ned] in fact
to discharge contaminants into a likely jurisdictional
watercourse anytime soon.” Id. at 15.
B.
In 2013, Home Builders filed this case, raising the same
legal challenges they pressed in Home Builders I, and praying
for essentially the same declaratory relief.5 Home Builders
5
The current complaint no longer seeks a declaration from the
federal courts that the two identified stretches of the Santa Cruz
River are not traditional navigable waters. Home Builders dropped
that prayer for relief presumably out of recognition that, if we were
to declare unlawful and vacate the TNW Determination, it would be
for the agencies in the first instance, not the courts, to make that
11
have again submitted supporting declarations from members,
expanding on those submitted in the earlier case.
One declarant, developer Larry Kreis, states that the
TNW Determination resulted in an “increased risk of
regulation stem[ming] from the fact that [his] properties are
now located within a few miles of the nearest TNW.” Kreis
Decl. ¶ 17. Kreis further states that, absent the TNW
Determination, he “probably would have moved forward with
development of the additional lands without filing an
amended application [in 2012] because the minor, braided
washes on the property would not have a significant nexus to
the Colorado River or other TNW” besides the Santa Cruz.
Id. ¶ 24. Kreis also recounts that, in 2005, the Corps issued
an “Approved Jurisdictional Delineation” concerning one
property; in 2011, he filed an application to discharge into
two washes on that property that had been previously
delineated as jurisdictional waters; and, in 2012, the Corps
issued a permit accordingly. Id. ¶¶ 29-30. Kreis further states
that he is “concerned about having to obtain a permit” for one
of the properties he intends to develop. Id. ¶ 33. Another
declarant, developer Jerry DeGrazia, states that the Corps
issued preliminary JDs for certain of his properties after the
district court’s 2011 dismissal, DeGrazia Decl. ¶¶ 30, 35, and
that the Corps has also issued a permit at one of his former
properties, id. ¶¶ 20, 24-25.
The district court held that Home Builders lacked
standing under the criteria identified in Home Builders I, and
alternatively that Home Builders had failed to identify final
navigability determination (e.g., in a site-specific JD or a
rulemaking).
12
agency action subject to APA review.6 956 F. Supp. 2d 198,
205-12 (D.D.C. 2013).
III.
We review de novo the district court’s dismissal for lack
of standing, accepting as true Home Builders’ non-
conclusory, factual allegations. Mendoza v. Perez, 754 F.3d
1002, 1010 (D.C. Cir. 2014). To establish standing, Home
Builders must show “that at least one of its members ‘is under
threat of suffering “injury in fact” that is concrete and
particularized; the threat must be actual and imminent, not
conjectural or hypothetical’; it ‘must be fairly traceable to the
challenged action of the defendant’—namely the TNW
Determination—and ‘it must be likely that a favorable judicial
decision will prevent or redress the injury.’” Home Builders
I, 667 F.3d at 12 (quoting Summers v. Earth Island Inst., 555
U.S. 488, 493 (2009)); see also Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992). Home Builders must
allege ongoing or imminent injury, rather than purely past
injury, because they seek only declaratory relief. Home
Builders I, 667 F.3d at 12, 14; see also City of Los Angeles v.
Lyons, 461 U.S. 95, 105 (1983).
A.
The doctrine of issue preclusion, or collateral estoppel,
bars “successive litigation of an issue of fact or law actually
litigated and resolved” that was “essential to the prior
judgment, even if the issue recurs in the context of a different
claim.” Taylor v. Sturgell, 553 U.S. 880, 892 & n.5 (2008)
(internal quotation marks omitted); see also Martin v. Dep’t of
6
Under the law of this Circuit, final agency action is not a
jurisdictional requirement, but bears on the existence of an APA
claim. Trudeau v. FTC, 456 F.3d 178, 183-85 (D.C. Cir. 2006).
13
Justice, 488 F.3d 446, 454 (D.C. Cir. 2007). The doctrine
serves to “protect against ‘the expense and vexation attending
multiple lawsuits, conserv[e] judicial resources, and foste[r]
reliance on judicial action by minimizing the possibility of
inconsistent decisions.’” Taylor, 553 U.S. at 892 (brackets in
original) (quoting Montana v. United States, 440 U.S. 147,
153-54 (1979)).
Issue preclusion applies to threshold jurisdictional issues
like standing as well as issues going to a case’s merits. See,
e.g., Underwriters Nat’l Assurance Co. v. N.C. Life & Acc. &
Health Ins. Guar. Ass’n, 455 U.S. 691, 706 (1982); Coll.
Sports Council v. Dep’t of Educ., 465 F.3d 20, 22-23 (D.C.
Cir. 2006); Dozier v. Ford Motor Co., 702 F.2d 1189, 1191
(D.C. Cir. 1983) (Scalia, J.). Issue preclusion operates
differently from claim preclusion with respect to jurisdiction-
based prior decisions: Because a jurisdictional dismissal does
not involve “an adjudication on the merits,” it “will not bar
relitigation of the cause of action originally asserted,” but it
“may preclude . . . relitigation of the precise issues of
jurisdiction adjudicated.” Cutler v. Hayes, 818 F.2d 879, 888
(D.C. Cir. 1987). That is, “[a]lthough the dismissal of a
complaint for lack of jurisdiction does not adjudicate the
merit[s] so as to make the case res judicata on the substance
of the asserted claim, it does adjudicate the court’s
jurisdiction, and a second complaint cannot command a
second consideration of the same jurisdictional claims.” GAF
Corp. v. United States, 818 F.2d 901, 912 & n.72 (D.C. Cir.
1987) (internal quotation marks and citation omitted).
Unless Home Builders satisfy the “curable defect”
exception that they claim shields them from issue preclusion,
they are barred from relitigating here the standing issue
decided in Home Builders I. The curable defect exception
allows relitigation of jurisdictional dismissals when “a
14
‘precondition requisite’ to the court’s proceeding with the
original suit was not alleged or proven, and is supplied in the
second suit.” Dozier, 702 F.2d at 1192. The exception is
sharply limited, however, by the requirement that new
allegations of a sufficient “precondition requisite” identify
“occurrences subsequent to the original dismissal” that
“remed[y]” “the jurisdictional deficiency.” Id. (emphasis in
original); accord GAF Corp., 818 F.2d at 912-13. The
exception permits litigants whose claims were dismissed on
jurisdictional grounds to establish jurisdiction in a subsequent
case only if a material change following dismissal cured the
original jurisdictional deficiency.7 Dozier, 702 F.2d at 1192
& n. 5, 1193 n. 7. That limitation prevents the “curable
defect” exception from undermining the preclusive effect of
issues already fairly and finally determined in prior litigation.
Id. at 1192-94; see also Magnus Elecs., Inc. v. La Republica
Argentina, 830 F.2d 1396, 1400-01 (7th Cir. 1987).
B.
Issue preclusion bars us from reconsidering whether
Home Builders suffered Article III injury, unless they have
alleged that events after the original dismissal cure the
jurisdictional inadequacy identified in Home Builders I.
Plaintiffs failed in Home Builders I to allege at least one of
following types of harm, and thus were unable to establish
constitutionally cognizable injury traceable to the TNW
7
We look to the August 2010 date of the district court’s dismissal
in Home Builders I as the relevant date for purposes of the curable
defect exception. That is consistent with the logic of the
opportunities that procedural rules provide for plaintiffs to amend
complaints prior to dismissal, see Dozier, 702 F.2d at 1192-93 &
n.6, and in any event, it is the date that the Agencies propose and is
more favorable to Home Builders than the 2011 date of this Court’s
affirmance.
15
Determination: (1) application of the TNW Determination to
a particular site in an approved JD or an enforcement action
based on the TNW Determination, 667 F.3d at 13; (2) plans
imminently to discharge into a likely jurisdictional
watercourse, id. at 15; or (3) substantially increased risk of
regulation or enforcement at a specific site in light of the
TNW Determination, id. at 14. None of Home Builders’ new
declarations makes up for any of the prior shortfalls or adds
any new evidence of standing.
For one, Home Builders I required approved JDs for the
requisite injury, id. at 13, yet Home Builders’ new
declarations refer only to preliminary JDs or, in one case, to
an approved JD that preceded the challenged TNW
determination.8 Moreover, Home Builders fail to allege that
any JD applied the TNW Determination. See, e.g., DeGrazia
Decl. ¶¶ 30, 35 (alleging that preliminary JDs identified
“potentially jurisdictional” waters and referenced the Santa
Cruz River, but not that they relied on the TNW
Determination). The TNW Determination was not a predicate
to Kreis’s 2012 permit, either: The washes that necessitated
that permit were delineated as jurisdictional years earlier, in a
2005 approved JD. See Kreis Decl. ¶¶ 29-30. Home Builders
also allege the issuance of a permit (based on a preliminary
JD) at one member’s former property, DeGrazia Decl. ¶¶ 20,
8
When we stated that no Article III injury has occurred “[u]nless
and until such a jurisdictional determination applies the TNW
Determination,” we cited the definition of approved JDs. 667 F.3d
at 13 (emphasis added). Preliminary JDs merely advise that there
“may be” jurisdictional waters on a site. 33 C.F.R. § 331.2. We
also emphasized the “prematur[ity]” of a challenge so long as it
remains the case that “[a]ny watercourse on the[] property may (or
may not) turn out to be subject to [Clean Water Act] . . . permit
requirements because of a nexus (or not) with the two Santa Cruz
reaches.” 667 F.3d at 13.
16
24-25, but because that member no longer owns that property,
the requested declaratory relief could not redress his alleged
injury there, see Home Builders I, 667 F.3d at 12, 14.
Nor have Home Builders shown plans imminently to
discharge into a likely jurisdictional watercourse. Home
Builders’ allegations that “development activities on
[member] property will result in discharges” into washes that
are allegedly tributaries of the Santa Cruz, Kreis. Decl. ¶ 33,
are materially the same as those we previously held to be
insufficiently concrete and imminent, see Home Builders I,
667 F.3d at 15. We found allegations that members
“‘regularly’ undert[ook] construction projects” that could not
“be conducted without impacting [certain water features]
within the Santa Cruz River watershed” were not allegations
of discharges “any time soon,” and thus fell short of
“‘establishing certainly impending dangers.’” Id.
Finally, a principal focus of Home Builders’ renewed
standing case is what they see as increased risk of regulation.
Their complaint is that the TNW Determination makes it
“more difficult to challenge the assertion of CWA jurisdiction
over the washes” on their members’ property. Kreis Decl.
¶ 31.9 Any such harm is not an “occurrence[] subsequent to
the original dismissal,” Dozier, 702 F.2d at 1192 (emphasis
omitted), but had already happened when Home Builders
litigated standing in Home Builders I—indeed, it was the
9
See also Kreis Decl. ¶ 35 (“we have a very small chance of
demonstrating that the washes are not ‘waters of [the] United
States’”); id. ¶ 17 (“Following the [TNW Determination], it became
far more likely that [water features] on our properties will constitute
‘waters of the United States,’” thereby posing an “increased risk of
regulation”); DeGrazia Decl. ¶ 32 (“Absent the [TNW
Determination], I would have been able to demonstrate the lack of
any significant . . . nexus.”).
17
basis of that suit. Our opinion in Home Builders I cannot be
used as a mere instruction manual on how Home Builders
might correct defects in its claim of standing by doing a better
job of pleading preexisting facts and arguing the law more
forcefully in a new case. See, e.g., id. at 1193-94 & n.6;
Magnus Electronics, 830 F.2d at 1400-01; cf. Montana, 440
U.S. at 153-54.
Relatedly, Home Builders contend that “the regulated
community normally has standing to bring facial challenges to
agency rules that regulate their members’ activities,”
Appellant Br. 34, and that their standing in this case “should
be self-evident, given that their members’ land development
activities are regulated by the challenged agency rule,”
Appellant Reply 14. They are correct that regulated entities’
standing to challenge the rules that govern them is “normally
not an issue,” Appellant Br. 30; Appellant Reply 10 (same),
because regulatory constraints typically qualify as injury in
fact, see, e.g., Fund for Animals, Inc. v. Norton, 322 F.3d 728,
733 (D.C. Cir. 2003); Sierra Club v. EPA, 292 F.3d 895, 899-
900 (D.C. Cir. 2002). Such standing is not, however,
automatic, but depends on plaintiffs showing that they satisfy
the doctrinal requirements of Article III. See, e.g., Lujan,
504 U.S. at 561-62, 571-73; CTS Corp. v. EPA, 759 F.3d 52,
57-58 (D.C. Cir. 2014) (recognizing that the “court, as a
matter of constitutional duty, must assure itself of its
jurisdiction to act in every case,” including where a
corporation challenged an EPA listing action that harmed the
firm’s reputation and increased its risk of liability); Nat’l
Ass’n of Home Builders v. U.S. Army Corps of Eng’rs, 417
F.3d 1272, 1286-87 (D.C. Cir. 2005) (observing that
organizations representing regulated parties must “satisfy the
‘irreducible constitutional minimum’ of Article III standing”);
CropLife Am. v. EPA, 329 F.3d 876, 884 (D.C. Cir. 2003)
(concluding that binding agency directive caused injury to
18
industry petitioners that was sufficiently concrete and
redressable to satisfy Lujan). In regulated-party cases, as in
other types of challenges, “standing is always a case- and
context-specific inquiry.” CTS, 759 F.3d at 58. For the
reasons already set forth, Home Builders have failed to show
Article III injury in a manner that satisfies the curable defect
exception to issue preclusion.
We are bound by the conclusion in Home Builders I that
Plaintiffs alleged no actual or imminent harm that is
sufficiently concrete and particularized to support their
Article III standing. Because Home Builders have not found
a new cure for the fatal standing defect in their first suit, issue
preclusion must bar this second attempt.
* * *
Because we affirm for lack of standing, we need not
decide whether the TNW Determination constitutes final
agency action.
It is so ordered.
SILBERMAN, Senior Circuit Judge, concurring, with whom
SENTELLE, Senior Circuit Judge, joins: I agree with the court
that we are precluded by our prior opinion from acknowledging
appellants’ standing. I write separately because I think Home
Builders I1 is incorrectly decided and is quite at odds with our
jurisprudence. To put it bluntly, it sticks out like a sore thumb.
I.
Our prior holding, which binds us, concluded that appellants
did not have standing unless and until their members were a
target of an enforcement action (charging illegal discharge) or
the government (the Corps of Engineers) issued an “approved
jurisdictional determination.” That latter action follows a
request of a property owner for the government’s official
position as to whether its property contains “waters of the
United States” or navigable waters of the United States. In other
words, our prior opinion concluded that appellants lacked
standing to challenge the alleged rule until the government took
official action to assert authority over a member of appellants’
associations. I believe that reasoning conflates the appropriate
standing analysis for an adjudicatory challenge and a challenge
to a rulemaking. The latter asks only whether parties are likely
covered by the regulation – or purported regulation – not
whether the government has actually started an enforcement
action or officially asserted a right to do so.
Of course, for standing purposes, we must assume the
validity of appellants’ challenge on the merits; i.e., we must
assume that when the EPA issued a “determination” asserting
that more than 50 miles of the Santa Cruz River were designated
as traditional navigable waters, it should have done so through
1
Judge Kavanaugh did not join the court’s core standing
analysis.
2
a traditional rulemaking under section 553 of the APA. This
designation – it is undisputed – affected the entire watershed of
the Santa Cruz River, roughly 8,600 square miles, which means
that developers were more likely to encounter regulatory
obstacles to development. That is because the agency is bound
to apply the designation in individual jurisdictional
determinations and permitting decisions.
Previously, as Corps staff members observed in emails
urging the EPA to affirm the Corps’ recommendation, the
nearest traditional navigable water to that watershed basin was
likely 300 miles away. Post-Rapanos, the agencies had not
taken the position that land parcels within the watershed were
categorically affected by the presence of a traditional navigable
water (that is, to the extent a parcel containing a water feature
has a significant nexus to the Santa Cruz River). To reiterate, in
asking whether appellants have standing, the question is exactly
the same as asking whether they would have had standing to
challenge this legal position if it were embodied in an APA rule.
And the law is rather clear; any party covered by an
agency’s regulatory action has standing to challenge a rule when
it issues – it certainly need not wait until a government agency
seeks to enforce a rule. See Chamber of Commerce v. Fed.
Election Comm’n, 69 F.3d 600, 604 (D.C. Cir. 1995). That
proposition is so clearly established it is beyond question. Nor
do parties have to wait until the government takes preliminary
steps before enforcing – clearing its throat, so to speak. It is
only necessary for a potential litigant to show that it is part of
the regulated class and its behavior is likely affected by the
government’s action.
3
It seems to me that any property owner in the Santa Cruz
watershed who contemplated development and therefore would
need a permit from the Corps if its property had a significant
nexus to the river, is covered by the regulation. As the court
points out, a significant nexus is much more than an abutment
to or direct tributary of the river; it can include desert washes,
arroyos or any other particular drainage feature that exists in
response to local precipitation. Although it is not determinative,
by virtue of the regulation, that a particular landowner is
affected by the rule, it is fair to assume that a local developer
would potentially fall into that category. See JEM Broad. Co. v.
FCC, 22 F.3d 320, 326 (D.C. Cir. 1994) (holding that any
person or entity within the class affected by the FCC’s “hard
look” rules, that is, actual or potential license applicants, had
standing to challenge the rules as illegally promulgated).
Essentially that was the position of appellants representing
developers in our primary case.
I think that would have sufficed for standing under our
cases. See Nat’l Ass’n of Home Builders v. U.S. Army Corps of
Eng’rs, 417 F.3d 1272, 1286-87 (D.C. Cir. 2005) (“[I]t is fairly
‘self-evident’ that the various appellants as representatives of
the regulated parties . . . [have] Article III standing”); Sierra
Club v. EPA, 292 F.3d 895, 899-900 (D.C. Cir. 2002) (if a
petitioner is an object of the agency action or is directly affected
by it – as is the case usually in a rulemaking – there should be
little question that it has standing); Fund for Animals, Inc. v.
Norton, 322 F.3d 728, 733-34 (D.C. Cir. 2003) (standing can be
self-evident when the challenged rule directly regulates the
disposition of a petitioner’s property); Sabre, Inc. v. Dep’t of
Transp., 429 F.3d 1113, 1119 (D.C. Cir. 2005) (previously
unregulated independent computer reservation system operator
had standing to challenge an FAA regulation that subjected it to
4
the Department’s regulatory authority); Shays v. Fed. Election
Comm’n, 414 F.3d 76, 93 (D.C. Cir. 2005) (congressmen had
standing to launch a conventional administrative law claim, i.e.,
a facial challenge to allegedly invalid regulations affecting their
interests); Am. Trucking Ass’n., Inc. v. Fed. Motor Carrier
Safety Admin., 724 F.3d 243, 247 (D.C. Cir. 2013) (an
association created to promote and protect the interests of the
trucking industry had representational standing because it had an
obvious interest in challenging a rule that directly and negatively
impacts its members); Nat’l Min. Ass’n. v. U.S. Army Corps of
Eng’rs, 145 F.3d 1399, 1401 (D.C. Cir. 1998) (omitting mention
of standing (surely because it was so obvious), allowing trade
association whose members engage in dredging and excavation
to mount a facial challenge to the Corps’ amendment of a
regulation defining section 404’s term “discharge of dredged
material”).
In the case before us – our second case – we have even
more. We have affidavits of developers who had obtained
“preliminary jurisdictional determinations.” Under the
government’s regulations, a party can hire a consultant to
examine its property and prepare a report determining whether
it has “waters of the United States” on its property, and therefore
must obtain a permit to proceed with development. (After the
EPA issued the determination any amount of water on a
particular property has different legal significance). The
consultant report is submitted to the Corps and qualifies as a
“preliminary jurisdictional determination” upon the Corps’
adoption of it, oftentimes with edits. There can be no doubt that
such affidavits show standing under any interpretation of our
prior cases – or for that matter, I suspect any other court’s cases.
See Lujan v. Defenders of Wildlife, 504 U.S. 555, 562-63 (1992)
5
(an affidavit that a person was planning to visit a particular
location would be sufficient to show Article III injury).
Because the opinion we are obliged to follow is so much out
of step with our case law it should not have continuing
jurisprudential significance. And Home Builders should be able
to easily establish standing upon the government’s issuance of
either an “approved jurisdictional determination” or permit
applying the navigability determination (rule?).