Air Liquide America v. U.S. Army Corps of Eng'Rs.
| Decision Date | 30 January 2004 |
| Docket Number | No. 02-20442.,02-20442. |
| Citation | 359 F.3d 358 |
| Parties | AIR LIQUIDE AMERICA CORPORATION; EGP Fuels Company; Equilon Pipeline Company, LLC; Exxon Pipeline Company; Florida Gas Transmission Company; Houston Pipe Line Co.; HSC Pipeline Partnership LP; Mobil Chemical Company, an unincorporated division of Mobil Oil Corporation; Mobil Pipeline Company; Seadrift Pipeline Corporation; TE Products Pipeline Company Limited Partnership; Texas Eastern Transmission Corp.; UCAR Pipeline Incorporated; Chevron Chemical Co.; Chevron Pipeline Co.; Dynegy Midstream Services; Teppco Crude Oil LLC, Plaintiffs-Counter Defendants-Appellees-Cross-Appellants, Duke Energy Transport and Trading Company, Plaintiff-Counter Defendant-Appellee, Air Products Incorporated; Air Products Manufacturing Corporation; Black Marlin Pipeline Company; Tejas Ship Channel LLC; Tejas South Pipeline Partnership, Intervenor Plaintiffs-Appellees-Cross-Appellants, v. U.S. ARMY CORPS OF ENGINEERS, Defendant-Counter Claimant-Appellant-Cross-Appellee, Port of Houston Authority of Harris County, Texas, Movant-Appellant-Cross-Appellee. Air Liquide America Corporation; EGP Fuels Company; Equilon Pipeline Company LLC; Exxon Pipeline Co.; Florida Gas Transmission Company; Houston Pipe Line Co.; HSC Pipeline Partnership LP; Mobil Chemical Company, an unincorporated division of Mobil Oil Corporation; Mobil Pipeline Company; Seadrift Pipeline Corporation; TE Products Pipeline Company Limited Partnership; Texas Eastern Transmission Corp.; UCAR Pipeline Inc., Plaintiffs-Appellees-Cross-Appellants, Duke Energy Transport and Trading Company, Plaintiff-Appellee, v. Port of Houston Authority of Harris County, Texas, Defendant-Appellant-Cross-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Osborne J. Dykes (argued), David Wilks Corban, William Joseph Boyce, Fulbright & Jaworski, Houston, TX, for Plaintiffs.
T. Christopher Trent, Eileen K. Wilson, R. Todd Marshall, Johnson, Spalding, Doyle, West & Trent, Houston, TX, for Intervenors.
Richard H. Caldwell (argued), Gene L. Locke, Dillon James Ferguson, Andrews & Kurth, Craig Smyser, Larry R. Veselka, Smyser, Kaplan & Veselka, Houston, TX, for Port of Houston Auth. of Harris Cty., TX.
Fred R. Disheroon (argued), William Brandt Lazarus, John A. Bryson, U.S. Dept. of Justice, Environment & Natural Resources, Washington, DC, for U.S. Army Corps of Engineers.
Appeal from the United States District Court for the Southern District of Texas.
Before BARKSDALE, DeMOSS and BENAVIDES, Circuit Judges.
At issue is cost-allocation for privately owned pipelines under the Houston Ship Channel (channel) being relocated as part of the project by the United States Army Corps of Engineers and the Port of Houston Authority to widen and deepen the channel. The Corps and the Port appeal the partial summary judgment awarded the pipeline owners: inter alia, the Port was held responsible for the relocation cost. Owners' conditional cross-appeal is from the district court's denial of their alternative summary judgment claim: that the project was for a deep-draft harbor; and that, accordingly, the Port would have to bear half of the relocation cost.
The principal sub-issues are: whether, as held by the district court, the Port must bear the cost, pursuant to TEX. WATER CODE § 60.102 (); and, if not, whether, in requiring Owners to relocate the pipelines at their expense, the Corps was properly enforcing both the federal navigational servitude and the Corps' associated federal permit authority.
Texas law does not control. Consistent with, inter alia, the Corps' well-settled authority to enforce its permits, Owners were required to relocate their pipelines at their expense. Concerning Owners' conditional cross-appeal, the project was not for a deep-draft harbor; therefore, the Port was not required to bear half of the relocation cost. VACATED in PART; AFFIRMED in PART; and RENDERED.
The Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq., prohibits construction in navigable waters of the United States unless the work has been approved by the Secretary of the Army. Pursuant to this Act, and for more than 100 years, the Corps has regulated such construction, in part by issuing permits under § 10 of that Act. 33 U.S.C. § 403. These § 10 permits provide, inter alia, that pipelines and other structures beneath navigable waters are to be relocated at no expense to the United States if required by federal navigation interests or projects. In the 1940s and 50s, the Corps issued § 10 permits to Owners to install pipelines beneath the channel. Each permit mandates pipeline-relocation as required by navigation needs and at no cost to the government.
Similarly, when the Texas legislature granted ownership of the land under the channel to the Port in 1927, the Port was given authority to franchise or lease the land for limited periods and purposes. See Act of March 11, 1927, 40th Leg., R.S., ch. 292, 1927 Tex. Gen. Laws 437. Accordingly, in addition to a federal § 10 permit, each Owner holds a license from the Port. One license condition is that Owners must relocate their pipelines at their cost if necessary for the channel.
In 1967, the House Committee on Public Works authorized a study for improving deep-draft channels, including the channel. The reconnaissance report for this study was completed in 1980.
The next step was the Water Resources Development Act of 1986 (WRDA-86), Pub.L. No. 99-662, 100 Stat. 4082 (1986); 33 U.S.C. § 2201 et seq. It contained the following cost-allocation provision:
The non-Federal interests [here, the Port] for a [harbor navigation project] shall perform or assure the performance of all relocations of utilities necessary to carry out the project, except that in the case of a project for a deep draft harbor [deeper than 45 feet] one-half of the cost of each such relocation shall be borne by the owner of the facility being relocated and one-half of the cost ... shall be borne by the non-Federal interests.
33 U.S.C. § 2211(a)(4) (emphasis added).
The feasibility study for the project was completed in 1987. In May 1995, the Corps published a draft report for public review that recommended proceeding with the channel's expansion. The draft report stated that Owners would bear the cost for relocation of approximately 130 pipelines. No Owner responded to the Corps about this notice.
The final version of the notice — the Limited Reevaluation Report (LRR) — was published in November 1995. The LRR estimated the pipeline relocation cost would exceed $100 million; and, as did the draft report, the LRR stated that Owners would bear that cost. Again, the Corps received no response from Owners. At the end of the comment period, the LRR was incorporated in the Chief of Engineers' Report (Chief's Report), which was transmitted to Congress by the Secretary of the Army.
The project was authorized by the Water Resources Development Act of 1996 (WRDA-96), Pub.L. No. 104-303, 110 Stat. 3658 (1996); 33 U.S.C. § 2330 et seq. That Act provided: "[t]he removal of pipelines and other obstructions that are necessary for the project shall be accomplished at non-Federal expense", id. § 101(a)(30), 110 Stat. at 3666; and the project would be "substantially in accordance with the plans, and subject to the conditions, described in" the Chief's Report, id. § 101(a), 110 Stat. at 3662. Again, one condition in that report was for the relocation cost to be borne by Owners.
As required for commencing the project, the Port entered into a Project Cooperation Agreement (PCA) with the Corps in June 1998. 42 U.S.C. § 1962d-5b(a); see Pub.L. No. 99-662, 100 Stat. 4082, 4083 (1986). Shortly thereafter, as requested by the Port, the Corps, by removal-notices to Owners, enforced the § 10 permit conditions and instructed Owners to relocate their pipelines at their expense because of the project's requirements. Owners complied.
In November 1998, however, Owners filed this action, seeking a declaration that the Corps' removal-notices were void. Simultaneously, Owners filed an action in state court, claiming: pursuant to TEX. WATER CODE § 60.102, the Port had "required" the relocation and was therefore responsible for the cost; and the Port's not paying it was an unconstitutional taking. In the alternative, Owners' state action claimed the project was for a deep-draft harbor pursuant to WRDA-86, subject to its mandated cost-sharing among the Port and Owners.
The state action was removed by the Port and consolidated with this action. The Port counterclaimed, seeking a declaration that either WRDA-96 or the § 10 permits required Owners to pay the relocation cost.
In early 2002, on cross-motions for summary judgment, the district court granted partial judgment to Owners, holding: WRDA-96 did not amend the cost-sharing provisions of WRDA-86; pursuant to WRDA-86, state law was to answer the cost-allocation question; under Texas law, that cost was to be borne by the Port; and the licenses issued by the Port (placing cost with Owners) were preempted by Texas law. The district court amended the Corps' removal-notices to Owners to reflect this ruling. On the other hand, the district court rejected Owners' alternative claim that the project was for a deep-draft harbor.
A summary judgment is reviewed de novo. E.g., Texas Soil Recycling, Inc. v. Intercargo Ins. Co., 273 F.3d 644, 648-49 (5th Cir.2002). The Corps and Port contest the Port's being liable for the relocation cost and the amendment of the Corps' removal-notices. If those rulings are vacated, Owners contest the not-deep-draft-harbor-project ruling.
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