Southern Pines Associates v. United States

No. 89-453-N (E.D. Va. August 11, 1989)

The court holds that it lacks subject matter jurisdiction under the Federal Declaratory Judgment Act and the federal question statute over a developer's challenge to an Environmental Protection Agency administrative order to cease and desist the filling of wetlands. The Declaratory Judgment Act does not supply its own jurisdictional base and thus does not provide plaintiff a private cause of action. Similarly, the federal question statute does not provide plaintiff access to the federal courts under the Federal Water Pollution Control Act (FWPCA). Although the FWPCA confers the right to sue on both government officials and private citizens, the FWPCA enforcement provisions, the citizen suit provision, and the nondiscretionary duty provision, nor the savings clause do not afford the developer a cause of action or an implied right of action. Private remedies in addition to those expressly provided should not be implied and thus judicial review is limited to the FWPCA's express enforcement provisions. Additionally, the court holds that the developer must exhaust its administrative remedies to ensure that EPA has the first opportunity to consider the adjacency issue and develop a record for judicial review. The question of whether plaintiff's property is an adjacent or isolated wetland is a factual and not a purely legal issue. EPA's jurisdiction is a factual issue properly left to the agency's expertise. The developer's attempt to seek preenforcement review of EPA's jurisdictional decision not only encroaches on EPA's expertise but constitutes an attempt to make an end-run around the Administrative Procedure Act.

Counsel for Plaintiffs
Richard Nageotte
Nageotte & Borinsky
14908 Jefferson Davis Hwy., Woodbridge VA 22191
(703) 643-2066

Counsel for Defendants
Susan L. Watt, Ass't U.S. Attorney
Rm. 401, 600 Granby St., Norfolk VA 23510
(804) 441-6331

[20 ELR 20003]

Clarke, J.:

Memorandum Opinion and Order

This matter comes before the Court on plaintiff Southern Pines Associates' Motion for a preliminary injunction. An evidentiary hearing was conducted, the parties have fully briefed the issues, and the matter is therefore ripe for disposition.

This action arises from an administrative order issued by the Environmental Protection Agency (EPA) directing plaintiffs Southern Pines Associates (Southern Pines) and VICO Construction, Inc. (VICO) to cease and desist the filling of wetlands and to discuss with the EPA a plan for restoration. (Plaintiff's Ex. 6.) Plaintiff Southern Pines, a Virginia limited partnership, is the owner of 293.41 acres of land located in Chesapeake, Virginia which is the subject of this litigation. (Plaintiff's Complaint P5.) Plaintiff VICO, acting under contract with Southern Pines, conducted clearing and construction activities upon approximately 40 acres of the subject property. Upon receiving the EPA's order, the plaintiffs discontinued all work except logging which is permitted without a permit. (Plaintiff's Petition for Preliminary Injunction P5.)

In December of 1987, John Cote of Armada-Hoffler, a company which had an option to purchase the site, contacted the Corps of Engineers (Corps) and asked that a pre-application site visit be conducted in order to determine if wetlands were present. In January of 1988, officials from the Corps, EPA and United States Fish and Wildlife Service visited the site, gathered data and preliminarily determined that the site was a wetland. (Defendant's Brief in Opposition, Exs. A and B.) In March of 1988, Steve Walls, an environmental scientist with the Corps, met with representatives of plaintiff VICO and told them that the site appeared to contain extensive wetlands. Walls testified that he informed plaintiff VICO that a wetlands delineation would be required to determine the exact limits of wetlands on the property before a permit would issue. At the time of this communication, no land clearing or surface disturbance had occurred on the site. In April of 1989, Gary Frazer, a biologist with the Fish and Wildlife Service conducted a wetlands determination using current federal methodology. As a result of this wetlands determination, Frazer concluded that the site was wetland subject to the Corps' jurisdiction. Based upon Frazer's field investigation, the EPA issued the May 23, 1989 cease-and-desist Order at issue in this case.

On July 19, 1989, the plaintiffs filed a Complaint and Petition for Temporary Restraining Order in this matter. The plaintiff predicates jurisdiction on the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 and § 2202, and federal question jurisdiction pursuant to 28 U.S.C. § 1331. Plaintiffs allege that the EPA's assertion of jurisdiction over plaintiffs' real property under the Clean Water Act (CWA), 33 U.S.C. § 1251, et seq., creates an actual controversy within the meaning of the Declaratory Judgment Act. Plaintiffs also seek a preliminary injunction prohibiting the government from enforcing the cease-and-desist order.

The CWA is a comprehensive statute designed "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Under 33 U.S.C. §§ 1311 and 1362, any discharge of dredge or fill materials into "navigable waters" or "waters of the United States" is forbidden unless authorized by a permit issued by the Corps pursuant to § 404, 33 U.S.C. § 1344. The EPA continues to carry ultimate responsibility for the concerns of the CWA, including determinations of what constitutes "navigable waters" for purposes of § 404. See Avoyelles Sportsmen's League, Inc. v. Marsh, 715 F.2d 897, 903 n.12 [13 ELR 20942] (5th Cir. 1983); 43 Op. Att'y Gen. No. 15 (Sept. 5, 1979). The term "navigable waters" is defined as "waters of the United States including the territorial seas." 33 U.S.C. § 1362(7) (1986). The term "waters of the United States" means "wetlands adjacent to waters (other than waters that are themselves wetlands). . . ." 40 C.F.R. § 230.3(s)(7) (1988). For purposes of the § 404 permit program, "wetlands" are:

those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.

40 C.F.R. § 230.3(t) (1988). Finally, as it applies to the jurisdictional limits of the EPA's authority, "adjacent" means "bordering, contiguous, or neighboring." 40 C.F.R. § 230.3(b) (1988). The regulations further provide that "Wetlands separated from other waters [20 ELR 20004] of the United States by man-made dikes or barriers, natural riverberms, beach dunes, and the like are 'adjacent wetlands.'" Id.

The plaintiffs concede that the Southern Pines site contains "wetlands" as that term is defined in the regulations. Plaintiffs take the position, however, that the EPA is without authority to assert jurisdiction over the site because it is not an "adjacent" wetland. The EPA argues that the structure and objectives of the CWA's enforcement scheme precludes pre-enforcement review of a cease-and-desist order. See, Hoffman Group Inc. v. EPA, 20 Env't. Rep. Cas. 1180 [20 ELR 20002] (N.D. Ill. 1989). The plaintiffs counter that the issue of whether the site is an isolated or adjacent wetland is a "purely legal" issue capable of judicial resolution. See, A. O. Smith v. Federal Trade Commission, 530 F.2d 515, 521 (3d Cir. 1976). While the Court is of the opinion that the question of adjacency is factual and not purely legal, the Court need not reach that issue as it otherwise lacks subject-matter jurisdiction to hear this matter.

The plaintiffs have alleged that this Court has jurisdiction pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, and 28 U.S.C. § 1331, the federal question statute. The Declaratory Judgment Act authorizes a federal court to give a declaratory judgment only with respect to "a case of actual controversy within its jurisdiction." 28 U.S.C. § 2201 (emphasis added). The Fourth Circuit in Delavigne v. Delavigne, 530 F.2d 598, 601 (4th Cir. 1976) found that, "it is axiomatic that the Act does not supply its own jurisdictional base, and where jurisdiction is lacking, declaratory relief should be denied." Citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950). Thus, the remaining issue is whether Section 1331 provides the plaintiffs with access to the federal courts under the CWA.

A suit "arises under" federal law if federal law creates the cause of action. American Well Works Co. v. Wayne & Bowler Co., 241 U.S. 257, 260 (1916); City National Bank v. Edmisten, 681 F.2d 942, 945 (4th Cir. 1982). In Middlesex County Sewerage Authority v. National Sea Clammers Assoc., 453 U.S. 1 [11 ELR 20684] (1981), the Supreme Court addressed the issue of whether an implied right of action existed under the CWA. The Court began its analysis by noting that the CWA confers the right to sue on both government officials and private citizens. Id. at 13. The CWA authorizes the EPA administrator to respond to violations of the Act with compliance orders and civil suits. 33 U.S.C. § 1319. The administrator may seek civil penalties of up to $ 25,000 per day, as well as criminal penalties. 33 U.S.C. § 1319(c) and (d). Moreover, "any interested person" may seek judicial review in the United States Court of Appeals of the various actions of the administrator in establishing effluent standards and issuing discharge permits. 33 U.S.C. § 1369(b) (1989).

These enforcement mechanisms are supplemented by the citizens-suit provisions contained in 33 U.S.C. § 1365. Section 1365(a)(1) provides a cause of action against any person or governmental instrumentality "alleged to be in violation of . . . an effluent standard or limitation under this chapter." This section provides a cause of action against one discharging pollutants into a waterway and therefore is of no assistance to the plaintiffs in the case at bar. See, City of Las Vegas v. Clark County, 755 F.2d 697, 703 [15 ELR 20353] (9th Cir. 1985). Similarly, Section 1365(a)(2) provides a cause of action against the administrator where there is an alleged failure of the administrator to perform a nondiscretionary duty under 33 U.S.C. § 1313(d). Again, this provision of the statute does not provide plaintiffs with a cause of action. Id.

Finally, Section 1365 contains a savings clause which provides that, "nothing in this section shall restrict any right which any person . . . may have under any statute or common law to seek enforcement of any effluent standard or limitation or to seek any other relief. . . ." 33 U.S.C. § 1365(e). The Supreme Court in Middlesex rejected the Court of Appeals argument that the Section 1365(e) savings clause coupled with Section 1331 provides an independent remedy for injured parties. Middlesex, 453 U.S. at 15-18. The Court in Middlesex concluded that Congress intended to limit access to federal court to enforce the CWA to the express enforcement provisions of the Act which preclude suit brought under 28 U.S.C. § 1331 and 42 U.S.C. § 1983. Id. at 21. See, City of Las Vegas, 755 F.2d at 703. The Supreme Court in Middlesex explicitly held:

Both the structure of the [CWA] and [its] legislative history lead us to conclude that Congress intended that private remedies in addition to those expressly provided should not be implied. Where, as here, Congress has made clear that implied private actions are not contemplated, the courts are not authorized to ignore this legislative judgment.

Middlesex, 453 U.S. at 18. Therefore, even if plaintiff had alleged a cause of action under Section 1365(e), it would not provide this Court with subject-matter jurisdiction. Accordingly, the Court finds that the enforcement provisions of the CWA do not provide plaintiffs in the instant case with a cause of action, nor does the CWA afford plaintiffs an implied right of action.

Although the Court need not reach the issue, the Court also finds that plaintiffs' attempt to enjoin the EPA from asserting jurisdiction constitutes pre-enforcement review and encroaches on the duties and expertise of the EPA and Corps. This Court is of the opinion that pre-enforcement review is inconsistent with the enforcement scheme of the CWA. The Court finds the decision in Hoffman Group Inc. v. EPA, 29 Env't. Rep. Cas. 1180 [20 ELR 20002] (N.D. Ill. 1989) to be a correct interpretation of the CWA. In Hoffman, the plaintiffs brought an action seeking declaratory and injunctive relief from the enforcement of a compliance order issued by the EPA. The district court in Hoffman found that plaintiffs' Complaint challenged the factual determinations of the EPA in delineating wetland boundaries. The Hoffman court concluded that "Congress intended for judicial review of a compliance order to occur if and when the EPA seeks to enforce the order in district court under 33 U.S.C. § 1319(b)." Id. at 1183.

As a general rule, parties are required to exhaust administrative remedies before resorting to the courts. Deltona Corp. v. Alexander, 682 F.2d 888, 893 [12 ELR 20963] (11th Cir. 1982). The Eleventh Circuit in Deltona noted that,

[t]he exhaustion rule serves a number of policies, including promoting consistency in matters which are within agency discretion and expertise, permitting full development of a technical issue and factual record prior to court review, and avoiding unnecessary judicial decision by giving the agency the first opportunity to correct any errors and possibly moot the need for court action.

Id. The circuit courts which have considered the issue have held that the agency should be given the first opportunity to consider a challenge to its jurisdiction. Id.

Despite plaintiffs' assertions to the contrary, the Court finds that the question of whether the Southern Pines property is an adjacent or isolated wetland is a factual and not a purely legal issue. Plaintiffs argue that a contrary conclusion is warranted because the existence, not the extent, of agency jurisdiction is at issue in this case. See, Avoyelles Sportsmen's League, 715 F.2d at 906. The Court finds, however, that the existence of EPA jurisdiction in the case at bar is a factual issue properly left to the expertise of the agency. In the instant case, the Corps and EPA should be given the initial opportunity to consider the adjacency issue and develop a record for judicial review.

Finally, the Court finds that plaintiffs' attempt to seek pre-enforcement review of the EPA's jurisdictional decision not only encroaches on EPA expertise, but also, constitutes an attempt to make an end-run around the Administrative Procedures Act, 5 U.S.C. § 702. If plaintiffs were allowed to maintain this action, federal courts would always become embroiled in the intricacies of initially determining whether a site is a "wetland" or "adjacent wetland." These matters are properly left to the expertise of the EPA and Corps of Engineers, the administrative agencies chosen by Congress to make such determinations.

Accordingly, plaintiffs' Complaint and Petition for Temporary Restraining Order are DISMISSED with prejudice.

The Clerk is DIRECTED to send a copy of this Order to counsel for the plaintiffs and defendants.

IT IS SO ORDERED.