Sabine Shell, Inc. v. Alexander

No. 79-0227 (W.D. La. May 28, 1980)

The court rules that the Army Corps of Engineers' denial of a dredge and fill permit for land adjacent to Sabine Lake, Louisiana was not arbitrary and capricious, but dismisses challenges to a required restoration plan for failure to exhaust administrative remedies. The court rules that the Corps has jurisdiction because the dredging, although on private land, is located in navigable waters waters and in a wetlands area. The court also finds that the Corps complied with its regulations in denying the permit and in providing proper notice to plaintiff. While the court finds unnecessary defendants' argument that judicial review is foreclosed because the parties previously entered into a consent judgment, it rules that there has been no final agency action giving rise to judicial review since the Corps has yet to approve an adequate restoration plan.

Counsel for Plaintiff
Karl E. Boellert
Camp, Carmouche, Palmer, Barsh & Hunter
P.O. Drawer 9001, Lake Charles LA 70602
(318) 433-0355

Counsel for Defendants
Frances O. Allen, Ass't U.S. Attorney
3d Floor, Fed. Bldg., 500 Fannin St., Shreveport LA 71101
(318) 226-5277

[12 ELR 20861]

Veron, J.:

Ruling on Defendants' Motion to Dismiss

The defendants (Government) have made a motion to dismiss the instant suit based on plaintiff's failure to state a claim upon which relief may be granted or in the alternative, for summary judgment.

When considering a motion to dismiss under Rule 12(b)(6) the court's inquiry is directed to whether the allegations, which are taken as true, constitute a statement of a claim under Rule 8(a). WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE: Civil § 1357. Summary judgment is proper if there is no genuine issue as to any material fact and if the moving party is entitled to a judgment as a matter of law. Save Our Cemeteries v. Arch Diocese of New Orleans, 568 F.2d 1074 (5th Cir. 1978), cert. denied 439 U.S. 836.

The court does not find the complaint insufficient in stating a claim as to the denial of the permit and will deny the motion for dismissal for failure to state a claim. The court will now deal with the alternative motion for summary judgment as to this claim.

This action arises out of the plaintiff's dredging operations on land adjacent to Sabine Lake in Cameron Parish, Louisiana. Plaintiff, Sabine Shell, Inc. (Sabine), had been dredging for shell from June 10, 1974 until August 31, 1974. The United States brought a civil action in this court (Civil Action No. 75-0803, "U.S.A. v. Sabine Shell, Inc., et al." to enjoin Sabine from further dredging, to compel restoration and to impose civil penalties for violation of the Federal Water Pollution Control Act (33 U.S.C. § 1311). A consent judgment was entered into by the parties on May 1, 1976 which consent judgment in part allowed Sabine to apply for a permit. On May 14, 1976 Sabine applied for the permit. The permit request was denied on October 31, 1977 and Sabine was requested to submit a restoration plan as requested by the consent judgment. The restoration plan was submitted in a pleading filed on August 3, 1978 in the action entitled "United States of America v. Sabine Shell, Inc., Civil Action No. 75-0803." The Galveston District Corps of Engineers informed the United States Attorney's office that the restoration plan submitted by Sabine would not be acceptable and made suggestions as to what an adequate restoration plan should include. This information was incorporated in a responsive pleading filed in Civil Action No. 75-0803.

The Government asserts that the issues in this action are determined by the judgment entered in Civil Action No. 75-0803. While it is true that when a judgment is final it becomes law as between the parties, this action relates to issues which have arisen since the entry of that judgment. The consent judgment obviously contemplated further dealings and negotiations between the parties. Certainly Sabine is entitled to review of the administrative proceedings which could not have been raised as an issue in the previous case.

The court does not believe that the doctrine of laches should be applied in this case. The case cited by the Government, Chiriacon v. U.S., 339 F.2d 588 (5th Cir. 1964), deals with a very different situation, that of employee removal and discipline. The policy considerations there are different and therefore the reasoning of the case should not be used here.

Sabine urges that the Government lacked the jurisdiction and authority to control the dredging of shell on privately owned land. The court finds that the Secretary of the Army does have jurisdiction under 33 U.S.C. §§ 403 and 1344 because this work is located in navigable waters and is in an area characterized by the prevalence of wetland vegetation.

The plaintiff asserts that the Government failed or refused to consider the general criteria stated in the applicable regulations. 33 CFR § 320.4(a)(2)(i) through (iv). The Statement of Findings in the Administrative Record reflects that these criteria were considered in evaluating Sabine's application. Sabine also complains that the Government refused or failed to consider the approval of the State of Louisiana in violation of 33 CFR § 430.5(b)(3) and refused or failed to consult with the state Soil Conservation service as "required" by 33 CFR § 209.120(g)(3)(iii).¹ However, the court finds that the applicable regulation, 33 CFR § 320.4(b)(3) is only permissive in nature and does not require such consultation. Plaintiff also urges that the Government failed or refused to consider possible modifications to Sabine's proposal as required by 33 CFR 209.120(g)(4)(i) and 40 CFR § 23105(a) [now 33 CFR 320.4(c)]. However, the applicable regulation states that the "applicant will be urged to modify his proposal." The letter from Mr. Karl Boellert as attorney for Sabine (Exhibit 22) clearly reflects that Sabine had confronted several agencies opposed to the granting of the permit as regards possible modifications. Sabine, apparently convinced such efforts would be fruitless, requested an early decision from the District Engineer.

Sabine also alleges that proper public notice was not given. However, the court finds the notice given (See Exhibit 10 in the record of the Administrative Proceedings) was sufficient under the regulations. Sabine also alleges that it was improperly denied an effective opportunity and means of rebutting the Government agencies. The record reflects that Sabine was given full notice and information and was in contact with the objecting agencies. Therefore, the court finds no opportunity was denied. Sabine also alleges as error the failure to hold a public hearing. However, such a hearing is discretionary and no such hearing was requested by Sabine.

At this point it is incumbent to discuss the nature of the review to be undertaken by this court. The jurisdiction of the court is founded upon § 10 of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. Review is limited to determining only the legality of the action, not its correctness. DiVosta Rentals, Inc. v. Lee, 488 F.2d 674 [4 ELR 20005] (5th Cir. 1973). DiVosta was a case which involved the denial of a permit by the Secretary of the Army. The court in that case stated:

In § 10, Congress has left certain decisions within the discretion of the Secretary of the Army. A Court may review the legality of the Secretary's exercise of discretion, * * * but may not substitute its judgment for that of the Secretary.

Id. at 678.

The standards for judicial review of an administrative action are set forth in the Administrative Procedure Act, 5 U.S.C. § 706. The plaintiff argues that the Corps' decision was arbitrary because it was unsupported by substantial evidence. Plaintiff cites C.A. White Trucking Co. v. U.S., 555 F.2d 1260 (5th Cir. 1977) in [12 ELR 20862] support of this position. However, C. A. White Trucking is not applicable here as it involved a review of a decision of the Interstate Commerce Commission. Such a case would clearly fall into the § 706(2)(E) substantial evidence category of review. Decisions of the Secretary of the Army under 33 U.S.C. § 403 do not. DiVosta Rentals, Inc. v. Lee, supra at 679. Therefore, the only applicable standard of review is whether or not it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(a). The court after closely examining the alleged defects in the administrative proceedings as stated by Sabine in its complaint does not find the Corps' decision denying the permit to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The court finds no genuine issue as to any material fact raised here.

The court turns now to the plan of restoration. The Government has urged that review of the issue is foreclosed by the consent judgment entered into by the parties. For the reasons stated above the court does not believe that review of the restoration plan is foreclosed. However, from the plan submitted by Sabine and the response of the government both filed in Civil Action No. 75-0803 it is apparent to the court that there has been no final agency action which would give rise to judicial review. Therefore, the complaint as to the restoration plan is premature and should be dismissed for failure to exhaust administration remedies. Specifically the court will not grant an order staying formulation or execution of the restoration plan.

In light of all of the above it is unnecessary to discuss the contention of the Government that the United States of America is an improper party.

The motion of the Government for summary judgment is in part GRANTED. The motion of the Government to dismiss is GRANTED as to the remainder of the complaint dealing with the restoration plan.

THUS DONE AND SIGNED at Lake Charles, Louisiana, this 27th day of May, 1980.

1. The court must assume that this cite refers to 33 CFR 320.4(b)(3).