Court Sides With Plaintiff, Binds Fed Agency To Its Agreement

If a company garners regulatory approval from a government agency, do the conditions embodied in the instrument rise to the level of a binding contract? The U.S. Army Corps of Engineers argued  they do not, after it reduced the number of credits it was willing to allow an Alaska land management company in a wetlands mitigation bank agreement and the management company went to court. But the Corp lost its case. The U.S. Court of Federal Claims, in Pioneer Reserve, LLC v. United States, ruled that the document setting forth the terms and conditions governing Pioneer’s operation of a wetland mitigation bank constituted a contract, and the Corps was bound to honor its terms. It was the second decision in a year that came to a similar conclusion. “In many cases regulatory approvals, permits and licenses granted by federal agencies can be revised or even withdrawn without legal consequence,” notes Greenberg Traurig attorney Jerry Stouck.  “But these two recent decisions show that in some cases, even though private parties negotiate with agencies in a regulatory context, the resulting agreements can be deemed binding contracts that can be enforced against the agencies.”