United States v. Sexton Cove Estates, Inc., 75-1638.

• Decision Date: 17 February 1976
• Docket Number: No. 75-1638.,75-1638.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. SEXTON COVE ESTATES, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

526 F.2d 1293

UNITED STATES of America, Plaintiff-Appellee, v. SEXTON COVE ESTATES, INC., et al., Defendants-Appellants.

No. 75-1638.

United States Court of Appeals, Fifth Circuit.

February 17, 1976.

Michael D. Sikes, Robyn Greene, Miami, Fla., for defendants-appellants.

Robert W. Rust, U.S. Atty., Lawrance B. Craig, III, Asst. U.S. Atty., Miami, Fla., Wallace H. Johnson, Carl Strass, Eva R. Datz, Charles E. Biblowit, Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Before BELL, AINSWORTH and DYER, Circuit Judges.

DYER, Circuit Judge:

Sexton Cove Estates (Sexton) and its former president Ralph Oesterle, appeal from the judgment of the district court requiring, because they had violated the Rivers and Harbors Act of 1899, 33 U.S.C.A. § 403, restoration, in varying degrees, of ten canals that they had dredged shoreward of the mean high tide line (MHTL) in Sexton Cove, a part of Blackwater Sound, in Key Largo, Florida, without a permit from the Army Corps of Engineers (Corps). The district court, 389 F.Supp. 602, ordered defendants to completely fill five plugged¹ canals, which had no connection with Blackwater Sound, and partially² fill five unplugged canals that physically connected with the Sound, and to replant the mangrove fringe along the banks of the restored canals. It also enjoined defendants from selling, conveying or disposing of any real property in the development without its approval.

Defendants contend (1) that the Corps lacks jurisdiction over the ten canals because they are above the MHTL; (2) that if the Corps has jurisdiction, there was no Section 403 violation; (3) that reliance upon internal Corps jurisdictional policy should be sustained as an affirmative defense; (4) that the restoration order was an abuse of the district court's discretion; (5) that individual lot owners are indispensable parties; and (6) that Oesterle may not be held personally liable for the restoration.

We agree with the district court that appellants reliance argument lacks merit and that the lot owners are not indispensable parties. We further agree that the district court had jurisdiction to grant restoration relief with respect to the unplugged canals connected to the Sound but remand for a further hearing on the appropriate relief. We find that the district court lacked jurisdiction with respect to the five plugged canals not connected to the Sound, and that the judgment against Oesterle cannot stand.

Sexton Cove Estates is a 73-acre mobile home development which fronts on Sexton Cove in Blackwater Sound. Blackwater Sound is navigable water of the United States. Oesterle was Sexton's President from 1970 to 1972, the time of the questioned activities.

Sexton purchased the land in 1969 and took immediate steps to develop it. Preliminary studies were made by an engineering firm in May, 1969. In February, 1970, a plat was prepared and filed in Monroe County, Florida, indicating the proposed construction of ten canals connecting to Blackwater Sound. Paving, grading and drainage plans were completed by March, 1970. Lots were first sold in 1969.

Sexton was advised by a representative of the engineering firm and informally, by an attorney familiar with Corps procedure that no permit was necessary since the dredge and fill activities would be shoreward of the mangrove fringe³ in Sexton Cove. However, neither Sexton nor any of its advisors, sought the opinion of any Corps representative concerning the proposed construction.

On May 20, 1970, Sexton employed a contractor to perform the dredge and fill work on the canals. For convenience, we allude to the canals as one through ten. Canals one and two were excavated shoreward of the MHTL. Canals three, four and five were pre-existing canals which were deepened and widened by Sexton. They, too, are shoreward of the MHTL. Canals six-ten were excavated but plugged by "many"⁴ feet of land.⁵

Canals one, two and three were completed and connected with Blackwater Sound by February, 1971, when Charles Allen, a field inspector of the Corps, visited Sexton Cove. Upon a subsequent search of Corps records, Allen determined that no dredging permit had been applied for by Sexton. As a result, on February 22, 1971, the Corps' resident engineer wrote to Oesterle to inform him that a permit was necessary for the excavation. Sexton responded on March 22, 1971, that it had been advised by counsel that no permit was required. On May 19, 1971, Allen returned to Sexton Cove and discovered that work was underway on canals four and five. These, as noted, were pre-existing canals which had connected to Blackwater Sound, but were plugged at this time in order to facilitate their widening, lengthening, and deepening.

On June 2, 1971, the Corps sent another letter to Oesterle which pointed out that the connection of the canals to Blackwater Sound without a permit was illegal, and no further connection should be made. On June 16, 1971, the Chief of the Corps' Operations Division also wrote to Oesterle telling him that a permit was required for the work at Sexton Cove.

The contractor left canals four and five plugged but they were unplugged in December, 1971. Canals six-ten were excavated after Allen's first visit but they have never been connected to Blackwater Sound.

On October 28, 1971, Sexton applied to the Corps for an after-the-fact permit. It was denied on June 12, 1973. Fourteen months later, the government filed this suit against Sexton and Oesterle.

Section 403 of the Rivers and Harbors Act makes it unlawful to

1) create an obstruction to the navigable capacity of any of the waters of the United States;

2) build any wharf, pier, dolphin, boom, weir, breakwater, bulkhead, jetty, or other structures in any port, haven, harbor, canal, navigable river or other water of the United States outside of established harbor lines or where no harbor lines have been established; or

3) excavate or fill, or in any manner to alter or modify the course, location, condition, or capacity of any port, haven, harbor, canal, or of the channel of any navigable water of the United States,

unless the work has been approved by the Army Corps of Engineers.⁶

The statute does not use the words "mean high water mark" or "mean high tide line." After the passage of the Act, the Corps apparently adopted the MHTL as a self-imposed jurisdictional boundary. Power, "The Federal Role in Coastal Development," ELI(ed.), Federal Environmental Law, 808-813 (1974); Hoyer, "Corps of Engineers Dredge and Fill Jurisdiction: Buttressing a Citadel under Siege," 26 Fla.L.Rev. 19, 25 (1973). That this occurred is not surprising. The MHTL traditionally had been the limit of admiralty jurisdiction in tidal waters. Waring v. Clarke, 1847, 5 How. 441, 463, 46 U.S. 441, 463, 12 L.Ed. 226. MHTL is also the boundary of tidal lands for property law purposes. Borax Consolidated, Ltd. v. Los Angeles, 1935, 296 U.S. 10, 22, 56 S.Ct. 23, 80 L.Ed. 9. Furthermore, promoting and protecting navigation was the dominant theme of the Act;⁷ hence, there was "little need to focus attention on activities beyond the ordinary reach of the water." United States v. Holland, M.D.Fla.1974, 373 F.Supp. 665, 670.

There is, however, necessity for focusing on activities beyond MHTL today. Dredging or other activities may seriously "alter or modify" the course, condition, location, or capacity of navigable waters, yet take place just shoreward of the MHTL. Does mere location above MHTL insulate them from the Act's prohibitions?

The answer to this question, is rooted in traditional Supreme Court analysis of the scope of the federal authority over navigable waters. In United States v. Rio Grande Irrigation Co., 1899, 174 U.S. 690, 19 S.Ct. 770, 43 L.Ed. 1136, the Court applied Section 10 of the Rivers and Harbors Act of 1890, 26 Stat. 454, the predecessor to Section 403 of the 1899 Act. Defendant desired to build a dam across the Rio Grande River which the United States claimed would obstruct the navigable capacity of the river. Defendant argued that the river was not navigable in the New Mexico territory where the dam would be built and therefore the statute was inapplicable. The Court disagreed: "any obstruction to the navigable capacity, and anything, wherever done or however done, within the limits of the jurisdiction of the United States which tends to destroy the navigable capacity of one of the navigable waters of the United States, is within the terms of the prohibition." Id. at 708, 19 S.Ct. at 777.

The Court used the Hudson River as an example to illustrate when relief is available. The Croton River was a non-navigable stream which flowed into and contributed to the volume of the Hudson. "Unquestionably," said the Court, the state of New York had a right to appropriate its waters and "the United States may not question such appropriation, unless thereby the navigability of the Hudson be disturbed." (emphasis added.) The Court continued that if the state should, "even at a place above the limits of navigability, by appropriation for any domestic purposes, diminish the volume of waters which flowing into the Hudson, make it a navigable stream, to such an extent as to destroy its navigability, undoubtedly the jurisdiction of the national government would arise and its power to restrain such appropriation would be unquestioned." Id. at 709, 19 S.Ct. at 777. (emphasis added.)⁸

The Congressional grant under the Rivers and Harbors Act, of regulatory power to the Corps over navigable waters is the beneficiary of the same broadly reaching analysis. The local origin of the activity or the source of its operation is thus not wholly determinative; of at least equal significance is the "effect." Zabel v. Tabb, 5 Cir. 1970, 430 F.2d 199, 203, cert. denied, 1971, 401 U.S. 910, 91 S.Ct. 873, 27 L.Ed.2d 808; United States v. Underwood, M.D.Fla.1972, 344 F.Supp. 486, 492. See Kramon, Section 10 of the Rivers and Harbors Act: The Emergence of a New...