Wendling Quarries v. United States Army Corps of Engineers

MOTION to Dismiss for Lack of Jurisdiction

S.D. IowaOctober 31, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA __________________________________________ ) WENDLING QUARRIES, INC., ) ) Plaintiff, ) ) v. ) Case No. 3:16-cv-00083-CRW-CFB ) UNITED STATES ARMY CORPS OF ) ENGINEERS ) ) Defendant. ) __________________________________________) MOTION TO DISMISS THE COMPLAINT Defendant United States Army Corps of Engineers (the “Corps”), pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), hereby moves the Court to dismiss the Complaint for lack of subject matter jurisdiction, or in the alternative, for failure to state a claim. As explained more fully in the memorandum in support of this motion, filed contemporaneously herewith, Plaintiff’s claims should be dismissed for three reasons, any one of which calls for dismissal: (1) Plaintiff seeks to challenge statements in a cover letter which are not “final agency action”; (2) Plaintiff’s claims lack a substantive legal basis; and (3) Plaintiff’s claims are not ripe for review. In support of this motion, the Corps relies on the accompanying memorandum, as well as any other arguments to be properly submitted in support of the relief requested herein. Respectfully submitted, KEVIN E. VANDERSCHEL JOHN C. CRUDEN United States Attorney Assistant Attorney General Environment & Natural Resources Division /s/ Nathan J. Borland /s/ Amy J. Dona NATHAN BORLAND AMY J. DONA Case 3:16-cv-00083-CRW-CFB Document 12 Filed 10/31/16 Page 1 of 3 2 Assistant U.S. Attorney Environmental Defense Section 110 East Court Avenue, Suite 286 P.O. Box 7611 Des Moines, Iowa 50309-2053 Washington, D.C. 20044 Telephone: (515) 473-9309 (202) 514-0223 Facsimile: (515) 473-9282 (202) 514-8865 E-Mail: nathan.borland@usdoj.gov amy.dona@usdoj.gov OF COUNSEL: THOMAS B. MINEAR Deputy District Counsel United States Army Engineer District Rock Island Clock Tower Building P.O. Box 2004 Rock Island, IL 61204-2004 Dated: October 31, 2016 Case 3:16-cv-00083-CRW-CFB Document 12 Filed 10/31/16 Page 2 of 3 CERTIFICATE OF SERVICE The undersigned hereby certifies that on October 31, 2016, I electronically filed the foregoing Motion to Dismiss and accompanying memorandum with the Clerk of Court using the ECF system, and true copies of these documents were served electronically through the ECF system upon the following: Bradley R. Cahoon Douglas Farr John J. Bouma Kelsey K. Crosse /s/ Amy J. Dona Amy J. Dona Environmental Defense Section P.O. Box 7611 Washington, DC 20044 Phone: (202) 514-0223 Fax: (202) 514-8865 amy.dona@usdoj.gov Case 3:16-cv-00083-CRW-CFB Document 12 Filed 10/31/16 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA __________________________________________ ) WENDLING QUARRIES, INC., ) ) Plaintiff, ) ) v. ) Case No. 3:16-cv-00083-CRW-CFB ) UNITED STATES ARMY CORPS OF ) ENGINEERS ) ) Defendant. ) __________________________________________) MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS THE COMPLAINT Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 1 of 22 ii TABLE OF CONTENTS INTRODUCTION ...........................................................................................................................1 BACKGROUND .............................................................................................................................2 A. The Clean Water Act and Permitting Programs ..................................................................2 B. The Tulloch Rules and Cases Reviewing Those Rules .......................................................3 C. Plaintiff’s Complaint ...........................................................................................................6 STANDARD OF REVIEW .............................................................................................................7 ARGUMENT ...................................................................................................................................8 I. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THE CORPS COVER LETTER IS NOT FINAL AGENCY ACTION ..................................................................9 A. The Corps Cover Letter Does Not Mark the Consummation of the Corps’ Decisionmaking Process ........................................................................................10 B. The Corps Cover Letter Does Not Create Any Legal Rights or Obligations ........12 II. THE COMPLAINT SHOULD BE DISMISSED BECAUSE WENDLING’S CLAIMS LACK A SUBSTANTIVE LEGAL BASIS ......................................................15 III. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THE CORPS COVER LETTER IS NOT RIPE FOR JUDICIAL REVIEW ..........................................18 CONCLUSION ..............................................................................................................................20 Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 2 of 22 1 INTRODUCTION Plaintiff Wendling Quarries (“Wendling”) filed this case against Defendant the United States Army Corps of Engineers (the “Corps”), alleging that a letter sent by the Corps contains statements that are “arbitrary, capricious and illegal” in violation of the Administrative Procedure Act (“APA”), and requesting declaratory and injunctive relief. ECF No. 1 (hereinafter “Compl.”) ¶ 120-143. Pursuant to well established principles of administrative law, the claims should be dismissed for lack of subject matter jurisdiction. Wendling challenges statements in a cover letter sent by a Corps Project Manager at the Rock Island District of the Corps on February 17, 2016 (hereinafter “Corps cover letter”), which according to Wendling requires that it obtain a Clean Water Act permit and perform an onsite demonstration of its proposed excavation activity. The Corps cover letter, in fact, imposes no such requirements on Wendling. The cover letter, which is incorporated in Wendling’s pleading as an attachment, merely states that the Corps cannot provide Wendling with a definitive answer to its question, advises Wendling of the Corps Project Manager’s interpretation of a Corps regulation, and offers Wendling the opportunity to perform an onsite demonstration in hopes of relieving some of Wendling’s uncertainty. As discussed below, Wendling’s claims should be dismissed for three reasons: (1) Wendling’s challenge to statements in the Corps cover letter is barred because those statements, which merely provided advice from a regional Corps employee, are not “final agency action” subject to judicial review; (2) Wendling seeks injunctive and declaratory relief that is contrary to the legal authority that it relies on; and (3) Wendling’s claims are not ripe for review. Any one of these principles would call for dismissal, and all of them apply here. Accordingly, the Court should dismiss the Complaint for lack of subject matter jurisdiction or, alternatively, for failure to state a claim upon which relief can be granted. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 3 of 22 2 BACKGROUND A. The Clean Water Act and Permitting Programs The Clean Water Act (“CWA”), 33 U.S.C. §§ 1251-1388, is a “comprehensive legislative attempt ‘to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.”’ United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 132 (1985) (quoting 33 U.S.C. § 1251(a)). To this end, section 301(a) of the CWA prohibits the discharge of any pollutant into waters of the United States except in compliance with, inter alia, a permit issued under section 404 of the Act. 33 U.S.C. §§ 1311(a), 1344. Defined broadly, “pollutants” include not only more obvious types of toxins but also rock, sand, and other forms of dredged or fill material. 33 U.S.C. §§ 1344(a), 1362(6); see also 33 C.F.R. § 323.2(c) & (e); 40 C.F.R. § 232.2(d)(3)(i). “[W]aters of the United States” include waterbodies like those located on Wendling’s property, i.e., open waters and wetlands that are adjacent to Beaver Slough and the Mississippi River. See 33 C.F.R. § 328.3(a)(1), (2), (5) and (7); 40 C.F.R. § 232.2. CWA section 404(a), 33 U.S.C. § 1344(a), authorizes the Secretary of the Army, acting through the Corps, to issue permits for the discharge of dredged or fill material. See generally Riverside, 474 U.S. at 123-25 (discussing CWA section 404 permit program). These are commonly referred to as “section 404 permits.” Pursuant to CWA section 404(b)(1), the Corps and the United States Environmental Protection Agency (“EPA”) have promulgated regulations governing, inter alia, permit processing and decision-making criteria. See 33 C.F.R. pts. 320- 331. Generally speaking, individual permit decisions involve “extensive administrative proceedings and investigation which include site-specific documentation, public notice and consideration of all public comments on the specific activity.” Rueth v. EPA, 13 F.3d 227, 229 (7th Cir. 1993). The overarching objective of the permit program is to protect the public interest Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 4 of 22 3 by balancing the favorable and detrimental impacts of activities conducted in the nation’s waters. See generally Nat'l Wildlife Fed’n v. Whistler, 27 F.3d 1341, 1344 (8th Cir. 1994). B. The Tulloch Rules and Cases Reviewing Those Rules Central to this litigation is Wendling’s contention that its proposed excavation activities, specifically the excavation of root balls from wetlands, fall outside the definition of a “discharge of dredged material” as that phrase is defined by the Corps at 33 C.F.R. § 323.2(d).1 This regulatory definition has been amended multiple times. In 1986, the Corps promulgated a final rule that, in relevant part, defined “discharge of dredged material” to exclude “de minimis, incidental soil movement occurring during normal dredging operations.” 51 Fed. Reg. 41,206, 41,232 (Nov. 13, 1986). In 1993, the Corps revised the definition of “discharge of dredged material” to clarify jurisdiction over discharges incidental to activities such as excavation by promulgating what became known as the “Tulloch Rule.” 58 Fed. Reg. 45,008 (Aug. 25, 1993) (formerly codified at 33 C.F.R. § 323.2(d)(1)(iii) (1994)). This rule defined the phrase “discharge of dredged material” to include, inter alia, “any addition, including any redeposit, of dredged material, including excavated material, into waters of the United States, which is incidental to any activity, including mechanized landclearing, ditching, channelization, or other excavation,” 33 C.F.R. § 323.2(d)(1)(iii), and narrowed the de minimis exclusion. Id. § 323.2(d)(3)(i) (1994). Several trade associations challenged the Tulloch Rule as outside the scope of the Corps’ regulatory authority, and the District Court for the District of Columbia agreed that the regulation was too broad and held that in the CWA Congress had not intended the Corps to regulate “incidental fallback” from excavation. Am. Min. Cong. v. U.S. Army Corps of Eng’rs, 1 The Corps acted jointly with EPA in promulgating each regulatory definition of “discharge of dredged material.” Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 5 of 22 4 951 F. Supp. 267, 278 (D.D.C. 1997) (hereinafter “AMC I”). The court differentiated incidental fallback from CWA regulated discharges, stating “[i]ncidental fallback does not include soil movements away from the original site.... sloppy disposal practices involving significant discharges into waters, have always been subject to § 404.” Id. at 270 n.4 (citing 58 Fed. Reg. at 45,013) (emphasis added). The AMC I decision was affirmed on appeal. Nat’l Min. Ass’n v. U.S. Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998). The Court of Appeals for the District of Columbia explained its holding as follows: [W]e do not hold that the Corps may not legally regulate some forms of redeposit under its § 404 permitting authority. We hold only that by asserting jurisdiction over “any redeposit,” including incidental fallback, the Tulloch Rule outruns the Corps’ statutory authority. Id. at 1405 (footnote omitted) (emphasis added).2 The court explained that the CWA does not establish a “bright line” between incidental fallback and regulable redeposits. Id. The court noted that a “reasoned attempt” by the Corps to establish such a line would be entitled to judicial deference. Id. In 1999, the Corps amended its regulation “to respond to the Court of Appeals’ holding in [National Mining], and ... comply with the district court’s injunction.” 64 Fed. Reg. 25,120 (May 10, 1999) (hereinafter “1999 Rule”). The 1999 Rule addressed the D.C. Circuit’s finding that the Tulloch Rule changed the prior regulatory regime primarily by regulating incidental fallback for the first time, and that the Corps had accomplished this result by regulating “any” redeposit of dredged material. Id. at 25,121. Under the 1999 Rule, the Corps stressed that determining whether a particular redeposit is regulable or is incidental fallback excluded from 2 The court of appeals described fallback as occurring “when redeposit takes place in substantially the same spot as the initial removal.” Id. at 1401. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 6 of 22 5 CWA jurisdiction “will require a case-by-case evaluation, based on the particular facts of each case.” Id. The same trade association plaintiffs who challenged the previous rule in 1997 sought an injunction prohibiting the Corps from enforcing the 1999 Rule and a declaration that the Corps could not regulate a range of excavation activities, including the excavation of root balls. Am. Min. Cong. v. U.S. Army Corps of Eng’rs, 120 F. Supp. 2d 23, 26 & n.5 (D.D.C. 2000) (hereinafter “AMC II”). The district court denied the motion. The court held that the 1999 Rule is consistent with the D.C. Circuit’s decision in National Mining and upheld the case-by-case approach set forth in the rule. The court also held that there was no basis to say that the use of root rakes and removing tree stumps would always be limited to incidental fallback. Id. at 32. In 2001, the Corps promulgated a new definition of “discharge of dredged material” to clarify what would qualify as incidental fallback, but in a facial challenge in National Association of Home Builders v. U.S. Army Corps of Engineers, No. CIV.A.01 0274 JR, 2007 WL 259944, at *3 (D.D.C. Jan. 30, 2007), the district court invalidated the 2001 rule. The district court held that the Corps could not base a determination of what is “incidental fallback” on the volume of the discharge. Id. Instead, incidental fallback and a regulable redeposit could be distinguished based on: (1) the time the material was held before being dropped; and (2) the distance between the place where it was collected and the place where it was dropped. Id. In 2008, the Corps responded to National Association of Home Builders by deleting the language invalidated by the court, effectively reinstating the 1999 Rule. 73 Fed. Reg. 79,641, 79,643 (Dec. 30, 2008). With the reinstatement of the 1999 Rule, the Corps must determine the necessity of a CWA section 404 permit for excavation activities on a case-by-case basis. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 7 of 22 6 C. Plaintiff’s Complaint The Complaint sets forth three claims for relief, all relating to Wendling’s allegations that the Corps has “directed” Wendling to obtain a section 404 permit and “required” a demonstration of proposed excavation work in violation of the APA and “federal case law.” Compl. ¶¶ 120-43. Wendling pleads that the proposed excavation work includes the removal of root balls. Compl. ¶¶ 93, 98, 101, 130. In addition, in prior communications to the Corps, Wendling has indicated that it plans to engage in hydraulic dredging in the project area. ECF No. 1-1 at 22. On February 17, 2016, the Corps issued Wendling an approved jurisdictional determination (“JD”) for the project area concluding that there are approximately 76.7 acres of CWA jurisdictional waters on the property, including 46.6 acres of forested wetlands and 30.1 acres of open water adjacent to Beaver Slough and the Mississippi River. Compl. ¶ 85; ECF No. 1-1 at 21, 25-26. With the approved JD, a project manager at the Rock Island Corps District sent Wendling a cover letter responding to questions and contentions raised by Wendling in prior correspondence. Wendling does not challenge that approved JD, only statements that it alleges are contained in the Corps cover letter. Compl. ¶¶ 87, 91, 93-96. Central to its claims, Wendling argues that the Corps cover letter states that: (1) “Wendling’s work cannot be done ‘without a discharge due to the excavation and removal of root balls from the trees that were cut,’” id. ¶ 93; and (2) “Wendling show the Corps with an onsite demonstration that the work will not be a discharge,” id. ¶ 94. The Corps cover letter, which is attached to the Complaint, see ECF No. 1-1 at 21-22, on its face demonstrates that Wendling has mischaracterized the letter. Paragraph 93 of the Complaint selectively quotes from the first sentence of the letter’s third paragraph, which states in full: “We have reviewed your mining plan and are not convinced that the work proposed can be Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 8 of 22 7 accomplished without a discharge due to the excavation and removal of root balls from the trees that were cut.” ECF No. 1-1 at 21. While the Corps did not foreclose the possibility that Wendling could remove the root balls without a discharge of dredged material, it could not give Wendling that assurance in the letter. Thus, the Corps “suggest[ed] that this could be remedied simply if Wendling Quarries, Inc., would show us, through an on-site demonstration, that the mechanized land clearing (removal of the root balls) can be accomplished without more than minimal discharge.” Id. The Corps cover letter does not order that Wendling obtain a CWA section 404 permit or that Wendling perform an onsite demonstration of its excavation work. STANDARD OF REVIEW Because federal courts are courts of limited jurisdiction and may hear cases only to the extent expressly provided by statute, the first and fundamental question presented by every case is whether the court has subject matter jurisdiction to hear it. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998) (“jurisdiction [must] be established as a threshold matter”). The Supreme Court has made clear that it is “to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994) (citations omitted). The burden of proving subject matter jurisdiction falls on the plaintiff. V S Ltd. P’ship v. Dep’t of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000). A motion to dismiss for lack of jurisdiction under Rule 12(b)(1) may challenge either the facial sufficiency or the factual truthfulness of the plaintiff’s jurisdictional allegations. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In considering a facial challenge to the sufficiency of the pleading, the well-pled factual allegations in the Complaint must be taken as true and viewed in a light most favorable to the non-moving party. A court confronted with a factual challenge Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 9 of 22 8 must weigh the conflicting evidence concerning jurisdiction, without presuming the truthfulness of the plaintiff’s allegations. Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990). ARGUMENT The three Counts in the Complaint arise out of Wendling’s displeasure with advice conveyed through the Corps cover letter that the excavation of root balls from a water of the United States could, under some circumstances, result in a discharge of dredged material requiring a CWA section 404 permit. Counts I and II are pled under the Declaratory Judgment Act; Count III is pled under the APA. Wendling’s claims should be dismissed on numerous grounds, any one of which would be sufficient to mandate dismissal: lack of final agency action; failure to identify a substantive legal right transgressed by the alleged agency action; and ripeness. Wendling has not met its burden of establishing subject matter jurisdiction in the Complaint. Because Wendling seeks to sue the United States, the Court lacks subject matter jurisdiction unless Congress has waived the United States’ sovereign immunity from suit. FDIC v. Meyer, 510 U.S. 471, 475 (1994). A waiver of sovereign immunity must be unequivocally expressed in the statutory text and must be strictly construed in favor of the sovereign. United States v. Nordic Village, Inc., 503 U.S. 30, 33-34 (1992). Wendling cites 28 U.S.C. § 1331 and 28 U.S.C. §§ 2201-02 as purported bases for jurisdiction. Compl. ¶ 16. Neither of the cited statutes waives the United States’ sovereign immunity. The federal question statute establishes subjects that are within the jurisdiction of federal courts to entertain (“civil actions arising under the Constitution, laws, or treaties of the United States”), but it does not waive sovereign immunity. Hagemeier v. Block, 806 F.2d 197, 202–03 (8th Cir. 1986). The Declaratory Judgment Act authorizes an additional remedy where the Court otherwise has subject matter jurisdiction over a claim, but does not provide a basis for Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 10 of 22 9 jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72 (1950). Wendling may attempt to argue that the APA’s waiver of sovereign immunity applies to its claims. But as explained below, Wendling cannot fit its claims within the bounds of the waiver of sovereign immunity in the APA. Although the absence of a waiver of sovereign immunity alone bars Wendling’s claims, the claims also must be dismissed because they are not ripe for judicial review. Wendling seeks an advisory opinion on how the Corps should interpret and apply its own regulations to factual circumstances that are speculative and may never occur. I. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THE CORPS COVER LETTER IS NOT FINAL AGENCY ACTION. The APA authorizes judicial review of “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704. Where an agency has not taken final action, a federal court lacks subject matter jurisdiction. Sierra Club v. U.S. Army Corps of Eng’rs, 446 F.3d 808, 812-15 (8th Cir. 2006) (affirming in part district court dismissal for lack of subject matter jurisdiction where plaintiff could not carry burden of proof of demonstrating final agency action); see also Luminant Generation Co. v. EPA, 757 F.3d 439, 440 (5th Cir. 2014); Nat’l Parks Conservation Ass’n v. Norton, 324 F.3d 1229, 1236 (11th Cir. 2003). Wendling’s APA claim is premised on its allegation that the Corps has “attempt[ed] to require Wendling to obtain a section 404 permit for its excavation work,” and argues that this “attempt” is final agency action. Id. ¶¶ 142, 143. Wendling challenges statements made in the Corps cover letter as “arbitrary, capricious, and illegal.” Compl. ¶¶ 93-96. To be “final,” these statements must: (1) mark the consummation of the agency’s decision-making process; and (2) be an action by which rights or obligations have been determined, or from which legal Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 11 of 22 10 consequences will flow. Bennett v. Spear, 520 U.S. 154, 177-78 (1997). The Corps cover letter satisfies neither requirement. A. The Corps Cover Letter Does Not Mark the Consummation of the Corps’ Decisionmaking Process. The Corps cover letter is not a definitive or final statement of any kind. Contrary to Wendling’s argument, the cover letter does not direct or require that Wendling submit a section 404 permit application. Nor does the cover letter come to any conclusion on whether Wendling’s hypothetical activities would result in a regulable discharge. The letter merely responds to Wendling’s inquiry, outside the context of any formal decision-making process, and states that it is possible that a permit may be required. The Supreme Court recently distinguished between an agency’s conditional statement and final agency action in a way that is instructive. In United States Army Corps of Engineers v. Hawkes Co., 136 S. Ct. 1807, 1811 (2016), the Court considered whether an approved jurisdictional determination issued by the Corps, delineating the extent of CWA jurisdictional waters on a landowner’s property, was final agency action. The Court noted that the Corps did not dispute that an approved jurisdictional determination (“JD”) met the first Bennett requirement, as it represented the “‘consummation’ of the Corps’ decisionmaking process.” Id. at 1813. The Court agreed, and it contrasted the approved JD with a “preliminary” JD, which “simply indicate[s] that there ‘may be waters of the United States’ on a parcel of property.” Id. at 1813-14. The Court thus recognized the difference between a final agency decision and a conditional statement regarding possible regulatory jurisdiction.3 Cf. Missouri Pac. Employes’ 3 The Corps issued an approved JD, addressing the presence of CWA jurisdictional waters, which Wendling does not contest. Compl. ¶¶ 85, 87. Nonetheless, Wendling attempted to appeal statements in the Corps cover letter through the administrative process for reviewing approved JDs. Compl. ¶ 112. The Corps Mississippi Valley Division Commander did not accept the Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 12 of 22 11 Hosp. Ass'n v. Donovan, 576 F. Supp. 208, 211 (E.D. Mo. 1983) (letter expressing an informal, preliminary opinion rather than a definitive agency ruling did not constitute final agency action), aff’d sub nom. Missouri Pac. Employees’ Hosp. Ass’n v. Donovan, 745 F.2d 1174 (8th Cir. 1984). Moreover, the Corps cover letter is not a culmination of the CWA section 404 permit process, which Wendling began but later abandoned.4 Under its section 404 permitting regulations, the Corps must first receive a complete application. The Corps reviews each permit application for completeness and, within 15 days, will either: determine that the application is complete for public notice purposes, in which case the Corps will issue a public notice; or, notify the applicant of additional information that is needed. 33 C.F.R. § 325.2(a)(1)-(2). If a public notice is issued, the Corps then determines after public comments whether a response from the applicant is necessary, and if so the applicant will be given the opportunity to respond. Id. § 325.2(a)(3). The Corps must consider adverse effects of any proposed project on water quality. Id. § 320.4(d). The Corps will also comply with the National Environmental Policy Act, and complete any other consultation or inquiry required by other federal statutes and the Corps’ own regulations, as necessary. Id. § 325.2(a)(4)-(5), 320.4(c). After completing these steps, the Corps will reach a final decision on the permit application and issue a decision document. Id. § 325.2(a)(6). A permittee that objects to the terms of its permit can initiate an administrative appeal process. See 33 C.F.R. Part 331. Corps regulations require exhaustion of this appeal, stating: “The objections you raised in your [Request for Appeal (RFA)] deal only with district statements that certain activities could result in a regulated discharge. Because your RFA does not challenge issues related to the determination of jurisdiction, your RFA is not accepted.” ECF No. 1-1 at 43. 4 Wendling submitted a permit application, but the Corps determined after several requests for additional information that the application did not contain sufficient information for public notice. Compl. ¶¶ 52, 53, 57-59. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 13 of 22 12 administrative appeal process before the permittee seeks judicial review of a permit decision. 33 C.F.R. § 331.12. It is the decision at the end of the administrative appeal process that constitutes the “consummation of the agency’s decisionmaking process.” Bennett, 520 U.S. at 178; See also In re Sac & Fox Tribe of Mississippi in Iowa/Meskwaki Casino Litig., 340 F.3d 749, 758 (8th Cir. 2003) (challenge to temporary closure order not final agency action under the APA); Ocean Cty. Landfill Corp. v. EPA, 631 F.3d 652, 655 (3d Cir. 2011) (intermediate decision during permit proceeding not final agency action); City of San Diego v. Whitman, 242 F.3d 1097, 1101 (9th Cir. 2001) (letter from EPA responding to permitting question not final agency action); cf. Franklin v. Massachusetts, 505 U.S. 788, 797 (1992) (“An agency action is not final if it is only ‘the ruling of a subordinate official’ . . . .” (citation omitted)) B. The Corps Cover Letter Does Not Create Any Legal Rights or Obligations. The Corps cover letter also did not fix any rights or obligations, or give rise to any legal consequences. The CWA prohibits unauthorized discharges of pollutants to waters of the United States, and that prohibition exists whether or not a Corps employee sends a letter responding to whether a hypothetical excavation activity could be a regulated discharge rather than incidental fallback. Although Wendling might contend that the Corps cover letter is a possible predictor of future action, only that future final action itself is final and subject to judicial review. The Corps cover letter, which is distinct from the approved JD it conveyed, has no independent or binding legal effect and is neither a rule nor an order. It is not an edict; it is merely an advisory letter, written in response to an inquiry. It does not bind the Corps, Wendling, or anyone else. Nothing in the letter requires Wendling to take any affirmative action or to refrain from acting. Likewise, nothing in the letter denies Wendling any legal right. Nor is there anything in the letter that can be violated. Instead the letter provides, in response to Wendling’s Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 14 of 22 13 prior correspondence, information about the Corps regulation that defines a discharge of dredged materials and offers the opportunity for further feedback after a demonstration of the proposed work. The Corps cover letter was not intended to, and does not, establish binding requirements. See Mada-Luna v. Fitzpatrick, 813 F.2d 1006, 1013 (9th Cir. 1987) (agency directive providing guidance did not establish binding norm); Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 537 (D.C. Cir. 1986) (policy and guidelines did not establish binding substantive regulation that agency was required to strictly observe). “Legal consequences” will flow only when the Corps takes action on a permit application submitted by Wendling. If Wendling’s permit application is denied, or if the Corps requires conditions on the permit that Wendling finds unacceptable, Wendling may appeal administratively, and, if that appeal is unavailing, seek judicial review under the APA and raise, among other arguments, challenges to the Corps’ interpretation of what constitutes a discharge of dredged material under the CWA and the Corps implementing regulations. This course of action would be available regardless of whether the Corps advises a potential permittee that they may need a permit. In any judicial review of a permit decision, the Corps’ initial view on whether a permit was necessary has no independent legal consequence. A court reviewing a permit decision would consider the issue of whether the redeposit of dredged materials was a “discharge” under normal standards of APA review whether or not the Corps provides its preliminary view to the permittee Alternatively, Wendling may choose to proceed without seeking a permit, and the United States would retain the discretion to commence an enforcement proceeding if its excavation activities result in a discharge of dredged material. 33 U.S.C. § 1319; 33 C.F.R. § 326.3(c). Any such enforcement proceeding would provide an appropriate forum for Wendling to contest Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 15 of 22 14 whether the excavation activities actually performed resulted in regulable discharges. See, e.g., Avoyelles Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 923 (5th Cir. 1983). The overwhelming weight of authority confirms that the Corps cover letter is not the consummation of the agency’s decision-making process, does not fix legal rights or obligations, and thus is not final agency action subject to review under the APA. The Supreme Court’s recent decisions in Hawkes, 136 S. Ct. 1807, and Sackett v. EPA, 132 S. Ct. 1367 (2012), do not affect this conclusion. In Sackett, the Court held that a CWA administrative compliance order issued by EPA under 33 U.S.C. § 1319 was a final agency action reviewable under the APA. Sackett, 132 S. Ct. at 1371-72. The Court explained that “[b]y reason of the [compliance] order” the Sackett plaintiffs were legally obligated to, inter alia, restore certain alleged wetlands that they had filled with dirt and rock; were potentially subject to double penalties in any enforcement action (for violation of the order and for violation of the statute); and had a limited ability to obtain a section 404 permit for the existing fill. Id. Here, contrary to Wendling’s allegations, the Corps cover letter does not require that Wendling obtain a section 404 permit or require Wendling perform an onsite demonstration of the planned excavation work. Thus, unlike the administrative compliance order at issue in Sackett, the Corps cover letter does not require any affirmative actions. Nor does the cover letter expose Wendling to double penalties in a future enforcement proceeding, or limit the processing of any CWA permit that Wendling may choose to pursue. In Hawkes, the Court found that an approved JD gives rise to “direct and appreciable consequences” because the Corps and EPA have agreed to give formal “negative” JDs binding effect for five years, thus impacting whether the United States would initiate a CWA enforcement proceeding. 136 S. Ct. at 1814. In this case, Wendling “does not dispute and is not challenging the JD.” Compl. ¶ 88. Unlike the approved JD in Hawkes, the advice provided in the Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 16 of 22 15 Corps cover letter has no binding effect on either the Corps or EPA. The Corps cover letter is more akin to a preliminary JD, which the Court in Hawkes characterized as “advisory in nature.” Id. at 1813. The Corps cover letter merely references the applicable Corps regulation and advises Wendling that the Corps could not make a determination based on the information that Wendling had provided. The underlying requirement to obtain a permit before discharging dredged material into waters of the United States arises from the CWA, 33 U.S.C. § 1344(a), and not from the Corps cover letter. An agency action is not final because “an agency merely expresses its view of what the law requires of a party, even if that view is adverse to the party.” AT&T v. EEOC, 270 F.3d 973, 975 (D.C. Cir. 2001) (citations omitted). Because the Corps cover letter is not a final agency action, the APA does not provide the requisite waiver of sovereign immunity and the Court should dismiss the Complaint for lack of subject matter jurisdiction. II. THE COMPLAINT SHOULD BE DISMISSED BECAUSE WENDLING’S CLAIMS LACK A SUBSTANTIVE LEGAL BASIS. Wendling’s claim also does not fit within the bounds of the APA’s waiver of sovereign immunity because it has not identified a substantive statute, regulation, or legal right that the Corps cover letter allegedly violated. The APA’s waiver of sovereign immunity is limited “to judicial review of agency action where such action results in a legal wrong or adversely affects the plaintiff ‘within the meaning of a relevant statute.’” Preferred Risk Mut. Ins. Co. v. United States, 86 F.3d 789, 792 (8th Cir. 1996) (quoting 5 U.S.C. ¶ 702). In Preferred Risk, the Eighth Circuit held that the APA’s waiver of sovereign immunity contains two requirements: 1) the identification of agency action; and 2) a showing that the party seeking review “has suffered a legal wrong or been adversely affected by that action within the meaning of a relevant statute.” Id. A legal wrong is the invasion of a protected legal right. See id. at 793 n.5. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 17 of 22 16 The Complaint does not plainly allege what legal right, substantive statute or regulation is supposedly transgressed by the Corps cover letter. See Compl. ¶¶ 120-43 (failing to identify any substantive statutory or regulatory provisions other than the APA). The crux of Wendling’s argument, however, is that excavation of root balls in waters of the United States will per se result in only incidental fallback, and that the Corps is prohibited—either by the terms of 33 C.F.R. § 323.2(d) or cases interpreting that provision—from performing case-by-case determinations of whether such excavation work results in a discharge of dredged material requiring a section 404 permit under the CWA. Compl. ¶¶ 36-45, 95, 125, 130. These legal arguments are unsupported by 33 C.F.R. § 323.2(d), and are directly contradicted by AMC II, 120 F. Supp. 2d. at 23, the case upholding the current regulatory text. The Corps’ definition of “discharge of dredged material” does not establish precisely what types of activities will cause only incidental fallback and what will produce regulable redeposits as opposed to incidental fallback. Compare 33 C.F.R. § 323.2(d)(2)(iii) with 33 C.F.R. § 323.2(d)(1). Instead, the regulation uses a case-by-case approach to determine whether a particular activity involves regulable discharges. See 73 Fed. Reg. at 79,643 (“As with the 1999 rule, deciding when a particular redeposit of dredged material is subject to [CWA] jurisdiction will entail a case-by-case evaluation, consistent with our [CWA] authorities and governing case law.”). The only reference to root systems in the regulatory definition is a clarifying statement that distinguishes between activities that involve cutting or removing vegetation aboveground (which are excluded from the definition) from activity that “substantially disturbs the root system” and may produce regulable redeposits. See 33 C.F.R. § 323.2(d)(2)(ii). When the plaintiffs in AMC II argued that this regulation should be enjoined, the district court rejected the request and held that the Corps’ case-by-case approach was reasonable. 120 F. Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 18 of 22 17 Supp. 2d at 32. The district court was “unwilling to state that certain soil movements will always constitute incidental fallback.” Id. AMC II looked to the D.C. Circuit decision in National Mining, which recognized that some redeposits of dredged material are regulable, that “the Act sets out no bright line” between incidental fallback and regulable redeposits, and that it is up to the Agencies to make a “reasoned attempt . . . to draw such a line.” 145 F.3d at 1405. In addition, the AMC II noted that “sloppy disposal practices involving significant discharges into waters, have always been subject to § 404.” 120 F. Supp. 2d. at 25 n.3 (citing AMC I, 951 F. Supp. at 270 n.4 and 58 Fed. Reg. 45,008, 45,013 (Aug. 25, 1993)). Thus, AMC II denied plaintiffs’ request for injunctive and declaratory relief that would have prohibited the Corps from regulating the excavation of root systems—the same relief that Wendling seeks here—because there is not a blanket rule exempting root ball excavation from the CWA’s prohibition against discharges. The D.C. district court decision in National Association of Home Builders, 2007 WL 259944, considering the now-vacated 2001 definition of “incidental fallback,” is not to the contrary. There, the court’s holding was narrow; it concluded only that the Corps could not include a volume requirement when determining whether redeposits of dredged material are regulable rather than incidental fallback. Id. at *3. Based on Congress’ use of the word “addition,” the court reasoned that regulable redeposits and incidental fallback should be distinguished based on a temporal component, i.e., the time the redeposited material is held before it is redeposited, and a spacial component, i.e., the distance between the excavation and redeposit. Id. Applying those two components to a hypothetical root ball excavation, one can easily imagine scenarios that either result in regulable redeposits or are limited to incidental fallback. National Association of Home Builders, 2007 WL 259944, does not support Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 19 of 22 18 Wendling’s contention that the Corps (or a court) can conclusively prejudge whether Wendling’s yet-to-occur root ball excavation will be limited to incidental fallback. Wendling also misconstrues National Association of Home Builders when it suggests that decision prohibited the Corps from seeking additional, relevant information when considering a permit application, see Compl. ¶ 104. National Association of Home Builders, 2007 WL 259944, at *3, addressed a sentence in the now-vacated definition of incidental feedback, and expressed concern about a presumption codified in the now-vacated definition that the use of mechanized earth-moving equipment results would result in regulable redeposits, absent more specific information. Nothing in National Association of Home Builders would prohibit the Corps from requesting an onsite demonstration, as Wendling suggests. Indeed, placing “the burden of proof” on the Corps during the permitting process to show that a permit applicant’s proposed activity results in a regulable discharge would effectively eviscerate the CWA’s central prohibition against the discharge of pollutants into waters of the United States, except when those discharges comply with the Act’s permitting requirements or limited exclusions. III. THE COMPLAINT SHOULD BE DISMISSED BECAUSE THE CORPS COVER LETTER IS NOT RIPE FOR JUDICIAL REVIEW. Even were the Court to conclude the Corps letter was final agency action under the APA, the Court should still dismiss the Complaint because Wendling’s claim is not ripe for judicial review. The basic rationale of the ripeness doctrine is to “prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements.” Abbott Labs. v. Garner, 387 U.S. 136, 148 (1967). Agency action may be final without being ripe for judicial review. See National Park Hospitality Ass’n v. Dep’t of the Interior, 538 U.S. 803, 812 (2003). Application of the ripeness doctrine requires consideration of two basic factors: (1) “the fitness of the issues for judicial decision,” and (2) “the hardship to the parties of withholding Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 20 of 22 19 court consideration.” Abbott Labs., 387 U.S. at 149. Both factors counsel against judicial review of the Corps cover letter. Here, the dispute about whether, and to what extent, the incidental fallback provision of 33 C.F.R. § 323.2(d) applies to Wendling’s proposed excavation activities remains abstract. Only when Wendling actually performs the as-yet hypothetical excavation work or performs a demonstration of the proposed excavation activities will the Corps have a concrete opportunity to determine whether the excavation results in a discharge of dredged material. Wendling emphatically contends that it intends to conduct its excavation activities in a manner such that no discharge will occur and thus no permit would be required. Compl. ¶¶ 98, 100-01, 107. However, as AMC II noted, “sloppy disposal practices involving significant discharges into waters, have always been subject to § 404.” 120 F. Supp. 2d. at 25, n.4 (citations omitted). It simply is not possible for the Corps (or this Court) to determine before the excavation occurs whether it will actually result in a discharge of dredged material, rather than incidental fallback. Abundant case law provides that issues are not ripe for review when future events may or may not occur as anticipated, or not at all. See, e.g., Texas v. United States, 523 U.S. 296, 300 (1998); Parrish v. Dayton, 761 F.3d 873, 875 (8th Cir. 2014). Nor can Wendling satisfy the ripeness doctrine’s second prong—whether “delayed review would cause hardship to the plaintiffs.” Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S. 726, 733 (1998). The letter inflicts no practical harm on Wendling’s interests. The letter simply declines to determine whether Wendling’s future actions will result in a discharge of dredged material. Wendling’s alleged future injury— the uncertainty inherent in whether a future excavation might result in a discharge of dredged materials—exists even in the absence of the challenged letter. Moreover, “the acts necessary to make the injury happen are at least partly within [Wendling’s] own control.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 564 n.2 (1992). Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 21 of 22 20 Wendling is being treated the same as any other party whose activities are subject to CWA section 404 permit requirements. Such potential applicants are not entitled to advance advisory opinions by district courts on how the Corps should interpret and apply its own regulations to hypothetical, yet-to-occur actions. As the AMC II court recognized when it refused to issue a declaration regarding the excavation of vegetation like root balls, if a regulated party disagrees with the Corps’ assessment of whether a discharge occurs, they may challenge it “in the appropriate enforcement proceeding.” 120 F. Supp. at 32 n.12. CONCLUSION For the foregoing reasons, the Court should grant the Motion to Dismiss the Complaint. Respectfully submitted, KEVIN E. VANDERSCHEL JOHN C. CRUDEN United States Attorney Assistant Attorney General Environment & Natural Resources Division /s/ Nathan J. Borland /s/ Amy J. Dona NATHAN BORLAND AMY J. DONA Assistant U.S. Attorney Environmental Defense Section 110 East Court Avenue, Suite 286 P.O. Box 7611 Des Moines, Iowa 50309-2053 Washington, D.C. 20044 Telephone: (515) 473-9309 (202) 514-0223 Facsimile: (515) 473-9282 (202) 514-8865 E-Mail: nathan.borland@usdoj.gov amy.dona@usdoj.gov OF COUNSEL: THOMAS B. MINEAR Deputy District Counsel United States Army Engineer District Rock Island Clock Tower Building P.O. Box 2004 Rock Island, IL 61204-2004 Case 3:16-cv-00083-CRW-CFB Document 12-1 Filed 10/31/16 Page 22 of 22