Michigan Peat, a Div. of Bay- Houston Towing Co. v. U.S. E.P.A.
| Decision Date | 28 April 1999 |
| Docket Number | BAY-HOUSTON,No. 98-1595,98-1595 |
| Citation | 175 F.3d 422 |
| Parties | MICHIGAN PEAT, A DIVISION OFTOWING COMPANY, Plaintiff-Appellant, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; United States of America; Regional Administrator of Region V of the United States Environmental Protection Agency; State of Michigan; Michigan Department of Environmental Quality; Director of the Michigan Department of Environmental Quality, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Steven D. Weyhing (argued and briefed), Butzel Long, Ann Arbor, MI, for Plaintiff-Appellant.
Robert L. Klarquist (argued and briefed), U.S. Department of Justice, Land & Natural Resources Division, Washington, DC, for Defendant-Appellee United States Environmental Protection Agency.
S. Peter Manning (argued and briefed), Office of Attorney General, Environmental Protection Division, Lansing, MI, for Defendants-Appellees State of Michigan, Michigan Department of Environmental Quality and Rusell J. Harding.
Before: SILER, BATCHELDER, and COLE, Circuit Judges.
Plaintiff, Michigan Peat, a division of Bay-Houston Towing Co., filed a declaratory action against defendants, the United States of America, the United States Environmental Protection Agency ("EPA"), the Regional Administrator of Region V of the EPA ("Region V Administrator"), the State of Michigan, the Michigan Department of Environmental Quality ("MIDEQ"), and the Director of the MIDEQ ("Director"), generally seeking a finding that defendants (1) acted contrary to the regulations and statutory law that govern the unified Clean Water Act ("CWA") Section 404 program, and (2) violated Michigan Peat's constitutional rights. The district court dismissed the action against the federal defendants for lack of subject-matter jurisdiction and dismissed the action against the state defendants on grounds that the suit was barred by the Eleventh Amendment. For the following reasons, we AFFIRM the dismissal of the action against the state defendants and REVERSE the dismissal of the action against the federal defendants.
The CWA was enacted "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). It prohibits the discharge of any pollutant into the navigable waters of the United States except when authorized by a permit or exception spelled out in the Act. See 33 U.S.C. § 1311(a). Wetland areas are considered navigable waters for purposes of applying the Act. See United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 106 S.Ct. 455, 88 L.Ed.2d 419 (1985).
Section 404 of the CWA authorizes the Secretary of the Army, acting through the United States Army Corps of Engineers ("Corps"), to issue permits allowing the release of dredged and fill matter into the waterways subject to the terms and procedures set forth in the CWA. See 33 U.S.C. § 1344(a). The CWA empowers the EPA to authorize a unified wetlands permitting program which gives a state the authority to render a comprehensive federal/state wetland permit decision with the federal government playing the role of the overseer in the consideration of permit applications. See 33 U.S.C. §§ 1344(g)-(m); 40 C.F.R. §§ 233.10-233.16, 233.53. In short, the scheme provides applicants with "one stop shopping" for a wetland permit. 1 Under the Section 404 program, the EPA retains full enforcement authority. See 33 U.S.C. § 1344(n). To date, only Michigan and New Jersey have been approved to operate the Section 404 scheme. See 40 C.F.R. §§ 233.70, 233.71. Michigan has been operating its program for 13 years, currently through the MIDEQ. See 40 C.F.R. § 233.70.
In order to obtain a permit to engage in activity within a wetland in Michigan, an applicant must proceed through the prescribed permit process. See 40 C.F.R. § 233.30. A brief outline of the steps in the application process follows:
1. An applicant must file an application with the Director of the MIDEQ.
2. Once the application is deemed complete, the MIDEQ must issue a public notice announcing the opportunity to request a public hearing.
a. The minimum time for public notice is 30 days during which interested parties may express their views concerning the application.
b. Any interested person may request a public hearing, which will be held at the MIDEQ's discretion.
3. The MIDEQ must promptly send the EPA a copy of the application.
4. Within 10 days of its receipt of the application, the EPA must forward the application to the Corps, the United States Fish & Wildlife ("USFW"), and the National Management Forestry Service ("NMFS").
a. These agencies must advise the EPA of their desire to comment on the application within 15 days of their receipt of the application.
b. If these agencies desire to comment, they must submit their comments to the EPA within 50 days of their receipt of the application.
5. Within 30 days of its receipt of the application, the EPA must indicate to the MIDEQ in writing whether it will comment on the application.
a. If the EPA declines to comment, the MIDEQ may issue a permit after the close of the public comment period upon (1) reviewing the application for compliance with designated environmental criteria, and (2) considering all comments received. The MIDEQ's determinations regarding each application must be in writing and the basis thereof must be outlined.
6. Within 90 days of its receipt of the application, the EPA must provide its written comments and issue objections to the permit request.
a. If the EPA timely objects, the State shall not issue the proposed permit unless it modifies the permit in accordance with the EPA's comments.
b. If the State does not satisfy the EPA's objections or deny the permit, authority to process the Section 404 permit is transferred to the Corps.
c. In cases where the EPA objects to the issuance of a permit, within 90 days after the propoundment of any objections by the EPA and after discussions with the Director of the MIDEQ, the EPA may withdraw its objections and a final permit decision may issue.
d. If the EPA's objections are not timely, the State may not issue a permit, but must forward the application to the Corps.
7. Based on whether 6(a), (b), (c) or (d) occurs, a permit may or may not issue.
See 33 U.S.C. § 1344(j); 40 C.F.R. §§ 233.30-53.
The Section 404 scheme does not usurp the state's authority to issue a permit under state law.
Michigan Peat engages in business activities which include the extraction of peat. It owns and controls two noncontiguous parcels of land in Minden, Sanilac County, Michigan, referred to as Minden North and Minden South and situated within a wetland area known as the Minden Bog. The Minden North parcel is approximately 2,000 acres and the Minden South parcel comprises approximately 819 acres. Since 1958, Michigan Peat has extracted peat from a portion of the Minden North site.
In 1991, Michigan Peat filed a wetland permit application under the Section 404 program which would authorize it to discharge dredged or fill materials and to conduct related activities at the Minden tracts. Midway through the application process, the State of Michigan requested that Michigan Peat place its then incomplete application on hold and develop an environmental site assessment ("ESA"). Michigan Peat complied; it developed an ESA from 1992-1994. In September 1994, Michigan Peat renewed its permit application to expand its operations to Minden South and to the unopened portions of Minden North. Specifically, Michigan Peat requested (1) a definition concerning the extent of the peat mining areas which were opened prior to October 1, 1980, (2) an after-the-fact authorization for areas where peat mining was initiated after October 1, 1980, and (3) authorization to expand the peat removal operations into an additional 1,792 acres of previously unmined wetlands.
Thereafter, the EPA reviewed Michigan Peat's application and on October 6, 1994 notified the MIDEQ Section 404 Director that it intended to comment. The EPA forwarded its written comments, as well as those of the Corps and the USFW, to the MIDEQ on December 23, 1994. The EPA objected to the permit application which sought permission to expand mining from 951 to all 2,819 acres of the facility. Michigan Peat responded to the EPA's objections. The MIDEQ and the EPA discussed the latter's objections and created a revised draft permit. With its concerns addressed by the new draft permit, on March 21, 1995 the EPA withdrew its objections. 2 Thereafter, the MIDEQ tendered a proposed permit to Michigan Peat along with a letter which outlined the proposed permit. The letter read in part:
Approximately 749 acres of the bog [Minden North] ... were impacted prior to October 1, 1980 and therefore do not fall under [our] jurisdiction.
...
Approximately 202 acres of the bog [Minden North] have been impacted from October 1, 1980 to the present.... [A]n after the fact permit can be issued for the 202-acre area if the applicant agrees to accept all conditions shown on the attached permit. Please be advised that failure to accept the permit leaves the company with no authorization to extract peat within the areas opened since October 1, 1980.
Attached you will find a modified permit for continuation of peat mining in areas defined in the paragraph above. This permit is not valid until it is signed by the permittee. The applicant is requested to fully review the limitations (conditions) and terms of the permit. Upon agreeing to accept and comply with all limitations (conditions) and terms of the permit, the applicant must sign, date, and return it to this office. The signed permit must be received by this office no later than 15 days from the date of this letter.
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[T]he portion of your application proposing expansion of the peat removal operation into the unmined area of the...
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