1902 Atlantic Ltd. v. Hudson

• Decision Date: 28 September 1983
• Docket Number: Civ. A. No. 82-533-N.
• Court: U.S. District Court — Eastern District of Virginia
• Parties: 1902 ATLANTIC LIMITED, Plaintiff, v. Ronald E. HUDSON, Colonel, District Engineer, Norfolk Division, U.S. Army Corps of Engineers, Defendant.

574 F. Supp. 1381

1902 ATLANTIC LIMITED, Plaintiff, v. Ronald E. HUDSON, Colonel, District Engineer, Norfolk Division, U.S. Army Corps of Engineers, Defendant.

Civ. A. No. 82-533-N.

United States District Court, E.D. Virginia, Norfolk Division.

September 28, 1983.

COPYRIGHT MATERIAL OMITTED

Edward R. Baird, Jr., Norfolk, Va., for plaintiff.

Diane L. Donley, Environmental Defense Section, Land and Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., for defendant.

OPINION

DOUMAR, District Judge.

This matter is before the Court on the complaint of the plaintiff, 1902 Atlantic Limited, in which the plaintiff seeks judicial review of an administrative decision of the United States Army Corps of Engineers (Corps). Pursuant to Section 10 of the Rivers and Harbors Act, 33 U.S.C. Section 403, and Section 404 of the Clean Water Act, 33 U.S.C. Section 1344, the Corps denied plaintiff's application for a permit to fill approximately eleven acres of a tidally-influenced borrow pit for eventual use as an industrial park.

The borrow pit consists of approximately 11 acres of sand and mud flat bottom area (intertidal and subtidal bottoms), and of slightly less than three-quarters of an acre (approximately 32,000 square feet) of wetlands. It is situated in the City of Chesapeake, Virginia, and is zoned industrial. Being triangular in shape, it is completely contained within the embankments of three man-made structures. The northwestern side of the pit consists of the embankment of the main line of the Norfolk and Southern Railway (formerly the Norfolk & Western Railway); to the south is the embankment of United States Route 13 (Military Highway, a limited-access divided highway); and to the northeast is the embankment of the Interstate Highway 464 project. Access to the site can only be gained from Military Highway. The surrounding area is largely industrial and is graced with such occupants as an industrial fertilizer plant, an oil refinery and storage area, a coal electrical generating complex, and an automobile junkyard. The surrounding highways sustain or will sustain a very heavy flow of industrial and private motor vehicle traffic, and the railroad is a very high traffic road through which passes the enormous coal shipments headed for the port in the city of Norfolk.

Until approximately 1954, the site in question was entirely highland and not subject to regulation by the Corps. Pursuant to an agreement between the then owner and the United States, the site was excavated to provide fill material for the construction of a "triple-decker" overpass near the site for U.S. Route 13, thereby creating the borrow pit. Sometime after its excavation, unknown persons constructed a ditch connecting the northerly end of the pit with Mill Dam Creek,¹ a tributary of the Southern Branch of the Elizabeth River. This connection caused the pit to be subjected to inundation by tidal flow from the creek.

Over the years, as a result of the tidal influence from Mill Dam Creek, saltwater wetland vegetation such as Spartina alterniflora, spartina patens, baccharis halmifolia, and iva frutescens grew up along the fringe of two sides of the pit.² Approximately 32,000 square feet of wetlands, as that term is defined at 33 C.F.R. Section 323.2(c), have developed. The pit now consists partially of saltwater wetlands, and of "waters of the United States". Accordingly, the plaintiff concedes that the pit is subject to Section 404 of the Clean Water Act, which provides for and requires Corps approval of a proposed project before a permit to fill can be granted. The plaintiff contends, however, that the Government has no jurisdiction over the pit under Section 10 of the Rivers and Harbors Act.

The plaintiff asserts that the Corps' denial of its permit application has destroyed all economic value the property may have had, thereby amounting to a taking of the property without just compensation in violation of the fifth amendment to the Constitution. The plaintiff also alleges that the Corps issued a permit to the Virginia State Highway Department allowing the highway department to fill about half of the original borrow pit for its Interstate Highway 464 project. By denying the plaintiff a permit under similar circumstances, plaintiff claims that the Corps acted arbitrarily and capriciously, abused its discretion, and otherwise did not act in accordance with law, in violation of the Administrative Procedure Act, 5 U.S.C. Section 706. Finally, the plaintiff claims that the requirement contained in 40 C.F.R. Section 230.10(a)(3) that a project be "water dependent" before a permit should be issued to fill wetlands, and upon which the defendant relied in making his decision, is inconsistent with and exceeds the statutory authority granted by the Clean Water Act (and the Rivers and Harbors Act), and is therefore unlawful.

As originally proposed, the plaintiff's project called for the placement of 11,250 cubic yards of construction debris and nonfloatable material between the mean high and low water lines, and 5,625 cubic yards of the same type of material below the mean low water line, in order to make the entire pit level with the surrounding grades.³ The plaintiff's original permit application for this project, dated April 22, 1981, stated that the primary purpose of the project was to develop usable upland for industrial sites. The secondary purpose of the project as stated on the application was to raise the tax base of the City of Chesapeake to provide employment, and to produce developable land. The public benefits expected to be derived from the project were stated to be job openings, an increase in the tax base, and the elimination of a safety hazard and an eyesore.⁴

A joint Federal/State Public Notice of the proposed project was prepared by the Corps and was issued on May 7, 1981, in accordance with Section 404 of the Federal Water Pollution Control Act. The Corps received no comment on, and received no objections to, the proposed project from any environmental organizations or from any private citizens, and no public hearings were requested or held.

A Preliminary Environmental Assessment of the plaintiff's permit application was issued on June 8, 1981. The assessment recommended denial of the application on the grounds that the proposed project was environmentally degrading and not water dependent.

The proposed project was again discussed at a June 11, 1981 interagency meeting attended by representatives of the Environmental Protection Agency (EPA), the Fish and Wildlife Service, the National Marine Fisheries Services, and the Corps of Engineers. The Corps' preliminary recommendation was that the permit be denied because the project was contrary to EPA's Section 404(b) guidelines and to the Corps' Wetlands Policy. The Corps argued that approximately 32,000 square feet of wetlands would be destroyed, the creation of an industrial site was not a water-dependent activity, and other alternative upland sites were available for the project. The attending agencies concurred in the Corps' recommendation. The plaintiff was advised of the Corps' objections and of the preliminary decision to deny the application by letter dated July 10, 1981. The plaintiff was advised further that he could submit additional information with regard to the objections noted in the letter.

By letter dated July 30, 1981, the plaintiff responded to the preliminary decision, and submitted a number of additional reasons in support of its application. The additional information concerned the economic, historic, and health and safety factors affecting the proposed project, along with a review of the alternate site options for the proposed project. Of the information set forth in the letter, the following is of particular importance to this litigation:

1. The site has rail access that many sites in Virginia Beach and Chesapeake would not have.

2. One of the strongest benefits of this site over any available alternative sites is its prime central location to the Norfolk, Portsmouth, Virginia Beach, Chesapeake and Suffolk areas. The construction industry operations that would occupy the site, by the nature of their work, would substantially be facilitated by a centralized "hub" location from which equipment, manpower, and materials could be mobilized and sent out to job locations. The site has easy access onto a main local highway (U.S. Route 13) and onto an interstate system (I-64). It also is located adjacent to another major local highway (Bainbridge Boulevard). Alternative sites with the same zoning do not offer the same central location advantages as does this site, nor do they offer comparable natural access to so many motor vehicle arteries.

3. The material for the fill operation would come from locations where the plaintiff is conducting construction operations, material which otherwise would have to be deposited on local land fills. By relieving some of the industrial pressure on local landfills, more capacity for these increasingly scarce landfills will result.⁵

4. An alternative upland site will not accept the quantity of fill to be deposited on the site in question, and thus none of the alternative sites offer the same public benefit of relieving the pressure on local landfills as does the site in question.

5. The site does not offer water access of any meaningful type. It is empty at low tide.⁶

6. The site can be developed for about one-third to one-sixth of the cost of developing a comparably zoned, comparably situated site, assuming such a site were to exist.

7. The City of Chesapeake Planning Commission, Chesapeake City Council, and the Chesapeake Wetlands Board have found that the benefits of the project outweigh the detriments and therefore have issued the necessary local permits for the project. (The Commonwealth of Virginia State Water Control Board also has issued a certification for the project. All state and local agencies thus...