Russo Development Corp. v. Reilly

No. 87-3916 (D.N.J. March 16, 1990)

The court holds that § 404(c) of the Federal Water Pollution Control Act authorizes the Environmental Protection Agency (EPA) to veto a proposed after-the-fact permit as to land that has already been filled. The court bases its decision on statutory language and EPA regulations.

[A previous decision in this litigation is published at 20 ELR 20290.]

Counsel for Plaintiff
William J. Prout Jr., Michael S. Miller
Tompkins, McGuire & Wachenfeld
4 Gateway Ctr., Newark NJ 07102
(201) 622-3000

Counsel for Defendant
Paul G. Shapiro, Ass't U.S. Attorney
970 Broad St., Rm. 502, Newark NJ 07102
(201) 621-2700

[20 ELR 20938]

Sarokin, J.:

Memorandum Opinion and Order

Plaintiff seeks declarative and injunctive relief from an Environmental Protection Agency ("EPA") veto of an after-the-fact permit that the U.S. Army Corps of Engineers ("Corps") granted to plaintiff. The court in its opinion of November 6, 1989, held that the Corps, in refusing to process the application for a permit unless plaintiff included a second 44 acre parcel in the application, exceeded its statutory authority. The outstanding issue from the November opinion was whether the EPA has the authority pursuant to § 404(c) of the Clean Water Act ("CWA"), 33 U.S.C. § 1344(c) to veto a proposed after-the-fact permit as to land that plaintiff has already filled. The court requested and received additional briefing from the parties.

A. Background

The relevant facts are described in detail in the prior opinion of November 6, 1989. For purposes of this supplemental opinion, the court restates only the following summary of facts.

Plaintiff, Russo Development Corp. ("Russo") is a New Jersey real estate developer. In 1979, plaintiff purchased a 44-acre parcel of land located in Carlstadt, New Jersey. Plaintiff completed the filling of this parcel by 1982.

[20 ELR 20939]

In January 1985, plaintiff contracted to purchase a 13.5 acre parcel which is located due east of the 44 acre parcel. Plaintiff began excavating and filling the 13.5 acre parcel until the Corps advised plaintiff on March 25, 1985, that it considered the 13.5 acres protected wetlands under the CWA. Plaintiff suspended work with five of the 13.5 acres remaining to be filled.

Plaintiff prepared a permit application for the 13.5 acre parcel, but on June 10, 1985, the Corps notified plaintiff that it would only process the application if plaintiff also applied for an after-the-fact permit as to the 44 acre parcel. Plaintiff, therefore, submitted an application for a permit to fill the remaining five acres of the 13.5 acre tract and for an after-the-fact permit as to the remaining 8.5 acres and for the 44 acre parcel. The Corps issued a Notice of Intent to Issue a § 404(b) permit to plaintiff on March 23, 1987.

On May 26, 1987, the EPA initiated proceedings under § 404(a) of the CWA, 33 U.S.C. § 1344(c). On March 21, 1988, the EPA vetoed the Corps permit.

B. Discussion

As part of a larger summary judgment motion, plaintiff claims that the EPA cannot withdraw a permit when a landowner has already converted the land in question into a disposal site. In order to prevail on a motion for summary judgment, plaintiff must establish that no genuine issues of material fact exist and that, viewing the facts in the light most favorable to the opposing party, defendant cannot prevail as a matter of law. Fed. R. Civ. P. 56. See, Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Wisniewski v. Johns-Mansville Corp., 812 F.2d 81 (2d Cir. 1976). Because the question before the court is purely one of statutory interpretation, disposition by summary judgment is appropriate.

The starting point for any legislative analysis is the language of the statute itself. See, Consumer Product Safety Commission v. GTE Sylvania, Inc., 477 U.S. 102, 108 (1980). Section 404(c) provides as follows:

The Administrator [of the EPA] is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and he is authorized to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site, whenever he determines . . . that the discharge of such materials into such area will have an unacceptable adverse effect . . . .

33 U.S.C. § 1344(c). The term "specification" refers to the process by which the Corps of Engineers authorizes a discharge. See, § 404(b), 33 U.S.C. § 1343(b). The granting of an after-the-fact permit necessarily involves specification. See, Sections 404(a) and (b).¹

The parties do not dispute the preventative purpose of § 404(c) but disagree as to the scope of the EPA's jurisdiction. Plaintiff argues that the use of the future tense, "will have" in § 404(c) limits EPA's authority to act once land is filled, and the avoidance of future adverse impact is no longer possible. Plaintiff further claims that once wetlands become filled, the assertion of authority under § 404(c) can only satisfy a punitive function that is contrary to the legislative purpose. Plaintiff concludes that the government should not be permitted to rely on § 404(c) as a substitute for enforcement proceedings explicitly provided for in 33 U.S.C. § 1319(c).

Defendant concedes that the phrase "will have an unacceptable adverse effect" restricts the veto authority to those cases where the harm is expected to continue in the future. Defendant's Supplemental Brief at 6-7. Defendant seizes, however, on the use of the word "whenever" and emphasizes the fact that the filling of wetlands may have continuing effects on the environment.

While § 404(c) is not a model of clarity, the court is persuaded that the statutory language supports the government's position. The authorization of EPA to withdraw specification after the Army Corps of Engineers has issued a permit coupled with the Army Corp of Engineers's power to issue after-the-fact permits leads to the conclusion that EPA is empowered to take action even after the filling has begun. While EPA may have to establish that the filling has continued effects on the environment, simply because a party has destroyed the wetland area by filling does not necessitate finding that the environmental damage has ended.² This is particularly true in the case of a site that has been partially filled, as the 13.5 acre parcel in the case at bar.

In order to find § 404 applicable, this court would have to conclude that Congress intended to create a category of discharges wholly exempt from the oversight responsibility that Congress expressly delegated to EPA. The reason is that once a party obtains an after-the-fact permit from the Army Corps of Engineers, the EPA cannot commence an enforcement action. 33 U.S.C. § 1344(p). See, e.g., Student Public Interest Group v. Fritzsche, Dodge, and Olcott, 759 F.2d 1131, 1133 [15 ELR 20427] (3d Cir. 1985) (interpreting § 402(k) and finding one who complies with a § 402 permit "is generally deemed in compliance with the Act"). If EPA cannot proceed under its authority under § 404(c), then EPA is absolutely precluded from seeking restoration or mitigation to halt or offset the adverse effects of the discharge.

As a practical matter the probability of a party obtaining an after-the-fact permit is slim because of an agreement between the Army Corps of Engineers and EPA that provides that the Corps will not accept an after-the-fact permit application until the agencies resolve whether any enforcement action is warranted. Memorandum of Agreement Between the Department of the Army and the Environmental Protection Agency Concerning Federal Enforcement for the Section 404 Program of the Clean Water Act (January 19, 1989), Certification of Michael S. Miller, Exh. A. The very existence of the agreement, however, only reinforces this court's conclusion that under the statute, the Corps has the exclusive power to issue an after-the-fact permit without consultation with EPA. This motion requires this court to interpret the statutory language, rather than the agencies' implementation of it.

The court's interpretation of § 404(c) is consistent with EPA regulations to which this court should defer had it found the statute ambiguous. The court is mindful that it must give "considerable weight" to "an executive department's construction of a statutory scheme it is entrusted to administer." Chevron U.S.A. v. NRDC, 467 U.S. 837, 843 [14 ELR 20507] (1984). See, National Small Shipments Traffic Conf. v. United States, 887 F.2d 443, 445, 447-448 (3d Cir. 1989); Am. Disabled of Accessible Public Tr. v. Skinner, 881 F.2d 1184, 1191 (3d Cir. 1989). The agency provides that, in addition to vetoing a Corps decision to specify a site, the Administrator may also prohibit specification of "any existing or potential disposal site before an application has been submitted to or approved by the Corps. . . ." 40 C.F.R. § 231.1(a) (1989) (emphasis added). The regulations unquestionably provide EPA with the power to prevent the Corps from granting a permit to a landowner seeking a permit for filled wetlands.

Russo contends that the term "existing" applies only to disposal sites where a disposal is continuing and does not apply to land where the filling is complete. The regulations, however, refer to "any" and "all" existing sites, id.; 40 C.F.R. § 2311(c), language that in no way limits the regulation to sites that are in progress, rather than complete.

Russo also cites to the preamble of the regulations which emphasizes EPA's intention to restrict the statute's application to preventing future discharges. 44 Fed. Reg. at 58077 (Oct. 9, 1979). Read in context, the passage refers to the situation landowner who relies on a Corps permit that the EPA is considering vetoing. Because a past discharge would involve detrimental reliance on the Corps, the EPA could properly distinguish between past and future discharges. The rest of the language of the regulations, cited above, does not support such a distinction in cases where no permit exists.

Conclusion

For the foregoing reasons, the court concludes that EPA may rely on its authority under § 404(c) when the landowner has filled a portion of the land in question before seeking an after-the-fact permit. The court denies plaintiff's motion for summary judgment as to the filled portion of the 13.5 acre parcel.

SO ORDERED.

1. Plaintiff claims that the Corps does not specify a site in an after-the-fact permit because the already completed disposal specifies the area. Plaintiff argues that the EPA, therefore, lacks authority under § 404(c) to veto the decision of the Corps, a position which this court finds lacking in merit.

2. It could be argued that destroying wetlands by filling has greater long-term effects than many ongoing discharges because of the difficulty, if not impossibility, of restoring the land to its prior condition.