New Hope Power Co. v. United States Army Corps of Engineers

• Citation: 746 F.Supp.2d 1272
• Decision Date: 29 September 2010
• Docket Number: Case No. 10–22777–CIV.
• Parties: NEW HOPE POWER COMPANY, and Okeelanta Corporation, Plaintiffs,v.UNITED STATES ARMY CORPS OF ENGINEERS and Steven L. Stockton, in his official capacity as Director of Civil Works, United States Army Corps of Engineers, Defendants.
• Court: U.S. District Court — Southern District of Florida

746 F.Supp.2d 1272

NEW HOPE POWER COMPANY, and Okeelanta Corporation, Plaintiffs,

v.UNITED STATES ARMY CORPS OF ENGINEERS and Steven L. Stockton, in his official capacity as Director of Civil Works, United States Army Corps of Engineers, Defendants.

Case No. 10–22777–CIV.

United States District Court, S.D. Florida.

Sept. 29, 2010.

Dan Chorost, Daniel Riesel, Sive, Paget & Riesel, P.C., New York, NY, Thomas Neal McAliley, White & Case, Miami, FL, for Plaintiffs.Christina L. Richmond, Jessica O'Donnell, U.S. Department of Justice, Washington, DC, Christopher Macchiaroli, U.S. Attorney's Office, Miami, FL, for Defendants.

CORRECTED ORDER GRANTING IN PART PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND FOR SUMMARY JUDGMENT; DENYING DEFENDANTS' CROSS–MOTION FOR SUMMARY JUDGMENT ¹

K. MICHAEL MOORE, District Judge.

THIS CAUSE came before the Court upon Plaintiffs' Motion for Preliminary Injunction and for Summary Judgment (ECF No. 18) and Defendants' Cross–Motion for Summary Judgment (ECF No. 27). These motions are now fully briefed.

UPON CONSIDERATION of the Motions, the Responses, the Replies, the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order.

I. BACKGROUND

Plaintiffs in this case are Okeelanta Corporation (“Okeelanta”), a Florida sugarcane grower, and New Hope Power Company (“New Hope”), a renewable energy company. In this action, brought pursuant to the Administrative Procedure Act (“APA”), Plaintiffs allege that Defendants United States Army Corps of Engineers (“the Corps”) and Steven L. Stockton (“Stockton”), the Corps' Director of Civil Works, have improperly extended the Corps' jurisdiction under the Clean Water Act (“CWA”) by enacting new legislative rules related to prior converted croplands ² without allowing the required public notice period. Specifically, Plaintiffs allege that Defendants' new rules have improperly extended the Corps' jurisdiction to situations where (1) prior converted croplands are converted to non-agricultural use; and (2) dry lands are maintained using continuous pumping. Under this new rule, wetland determinations are made based on what the property's characteristics would be if the pumping ceased. Therefore, Plaintiffs seek to have the new rules set aside.

A. History of the CWA

The CWA is a statute which seeks to “restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. § 1251(a). Since 1972, pursuant to section 404 of the CWA, the Corps has regulated the “navigable waters” of the United States. See 33 U.S.C. § 1344(a). “Wetlands” are considered “navigable waters” that are defined as “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.” 33 C.F.R. § 328.3(b) (emphasis added).

In 1977, the Corps released Final Rules that clarified that the phrase “under normal circumstances” in the regulation does not refer to properties “that once were wetlands and part of an aquatic system, but which, in the past, have been transformed into dry land for various purposes.” 42 Fed.Reg. 37122, 37122 (July 19, 1977). Thus, former wetlands that were altered to dry land before the CWA's passage were exempted from the delineation of “wetlands.”

In 1986, the Corps released a Regulatory Guidance Letter (“RGL”) stating:

[I]t is our intent under Section 404 to regulate discharges of dredged or fill material into the aquatic system as it exists and not as it may have existed over a record period of time. The wetland definition is designed to achieve this intent. [ ] Many areas of wetlands converted in the past to other uses would, if left unattended for a sufficient period of time, revert to wetlands solely through the devices of nature. However, such natural circumstances are not what is meant by ‘normal circumstances' in the definition quoted above. ‘Normal circumstances' are determined on the basis of an area's characteristics and use, at present and recent past. Thus if a former wetland has been converted to another use [other than by recent unauthorized activity] and that use alters its wetland characteristics to such an extent that it is no longer a ‘water of the United States,’ that area will no longer come under the Corps' regulatory jurisdiction for purposes of Section 404.

RGL 86–9 (Aug. 27, 1986) (ECF No. 18–10); see also RGL 05–06 (Dec. 7, 2005) (ECF No. 18–11) (stating that RGL 86–9 still applies).B. Wetlands Manual

In 1987, the Corps released a Wetlands Delineation Manual (“Wetlands Manual”) which the Corps' personnel follow in making wetland determinations. See Defs.' Counter Statement of Facts ¶ 7 (ECF No. 27–9). According to the updated online edition of the Wetlands Manual, use of the 1987 Manual is mandatory in making wetlands determinations. See Wetlands Manual (ECF No. 18–13), at vii. The Wetlands Manual requires present evidence of wetland indicators as to the hydrology, soil and vegetation of the land to make “a positive wetland determination.” Id. at v, 10. The Wetlands Manual provides an exception to this rule for atypical situations such as where unauthorized activities, natural events, or manmade wetlands are involved. Id. at 73–74. A situation is not considered atypical where “areas have been drained under [the Corps'] authorization or that did not require [the Corps'] authorization.” Id. at 74.

C. Prior Converted Croplands

In 1993, the Corps indicated in its regulations that “[w]aters of the United States do not include prior converted cropland.” 33 C.F.R. § 328.3(a)(8). In a joint final rule by the EPA and the Corps, the agencies stated that:

By definition, [prior converted] cropland has been significantly modified so that it no longer exhibits its natural hydrology or vegetation. Due to this manipulation, [prior converted] cropland no longer performs the functions or has the values that the area did in its natural condition. [Prior converted] cropland has therefore been significantly degraded through human activity and, for this reason, such areas are not treated as wetlands under the Food Security Act. Similarly, in light of the degraded nature of these areas, we do not believe that they should be treated as wetlands for the purposes of the [CWA].

58 Fed.Reg. 45008–01, at 45032. Moreover, the agencies stated that:

In response to commentors who opposed the use of [prior converted] croplands for non-agricultural uses, the agencies note that today's rule centers only on whether an area is subject to the geographic scope of CWA jurisdiction. This determination of CWA jurisdiction is made regardless of the types or impacts of the activities that may occur in those areas.

Id. at 45033. The only method provided for prior converted croplands to return to the Corps' jurisdiction under this regulation is for the cropland to be “abandoned,” where cropland production ceases and the land reverts to a wetland state. Id.D. Jacksonville Issue Paper

In January 2009, the Corps' Jacksonville Field Office prepared an Issue Paper announcing for the first time that prior converted cropland that is shifted to non-agricultural use becomes subject to regulation by the Corps. See Issue Paper Regarding “Normal Circumstances” (ECF No. 18–22) (the “Issue Paper”). This paper was written in response to five pending applications for jurisdictional determinations involving the transformation of prior converted cropland to limestone quarries. The Issue Paper concluded that such a transformation would be considered an “atypical situation” within the meaning of the Wetlands Manual and, thus, subject to regulation. Id. at 1–5. The Issue Paper further found that active management such as continuous pumping to keep out wetland conditions was not a “normal condition” within the meaning of 33 C.F.R. § 328.3(b). This Issue Paper was sent to the Corps' headquarters along with a request for guidance as to whether the Issue Paper reflected the Corps' rules. The Issue Paper was adopted as being an accurate reflection of the Corps' national position by Stockton in an Affirming Memorandum. See Memorandum for South Atlantic Division Commander (Apr. 30, 2009) (ECF No. 18–23) (“Affirming Memorandum”).³ No notice-and-comment period occurred before this memorandum issued. The Corps has implemented and enforced the Stockton Rules nationwide since the Affirming Memorandum issued, and the Corps has issued additional memoranda supporting this policy.

E. New Hope's Proposed Ash Monofill

New Hope runs a renewable energy facility on Okeelanta's property. This property is located on a mill lot (the “Mill Lot”) that was previously used to farm sugarcane. In 1993, the Corps indicated in a letter that the property was a prior converted wetland and thus, New Hope did not need a permit to build a renewable energy facility. See Letter from Charles A. Schnepel, Chief, Regulatory Section, the Corps' Miami Field Office to John M. Bossart, KBN Engineering (May 26, 1993) (ECF No. 18–3). This renewable energy facility was eventually built. New Hope now seeks to construct an ash monofill ⁴ near the renewable energy facility on the same Mill Lot. The hydrology of the Mill Lot is such that drains, pumps and other devices are used to prevent the area from becoming saturated with water.

On September 1, 2009, after the Corps became aware of the proposed construction, the Corps notified New Hope that “commencement of the proposed work prior to Department of the Army authorization would constitute a violation of Federal laws and subject [New Hope] to possible enforcement action.” Letter from Krista Sabin, Project Manager, Jacksonville District Corps of Engineers to Rebecca Kelner, P.E., Jones Edmunds & Assocs. (Sept. 1, 2009) (ECF No. 18–33).

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