Alliance, Environment v. Pyramid Crossgates

• Decision Date: 24 January 2006
• Docket Number: No. 04-3000-CV.,04-3000-CV.
• Citation: 436 F.3d 82
• Parties: ALLIANCE FOR ENVIRONMENTAL RENEWAL, INC. and SAVE THE PINE BUSH INC., Plaintiffs-Appellants, v. PYRAMID CROSSGATES COMPANY, also known as Crossgates Mall Company LLP., Crossgates Mall General Company, LLP, Crossgates Mall Holdings, Inc., c/o the Pyramid Companies, and Crossgates Mall Enterprises Company, LLC., Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

Page 82

436 F.3d 82

ALLIANCE FOR ENVIRONMENTAL RENEWAL, INC. and SAVE THE PINE BUSH INC., Plaintiffs-Appellants, v. PYRAMID CROSSGATES COMPANY, also known as Crossgates Mall Company LLP., Crossgates Mall General Company, LLP, Crossgates Mall Holdings, Inc., c/o the Pyramid Companies, and Crossgates Mall Enterprises Company, LLC., Defendants-Appellees.

No. 04-3000-CV.

United States Court of Appeals, Second Circuit.

Argued: September 1, 2005.

Decided: January 24, 2006.

Peter Henner, Clarksville, N.Y., for Plaintiffs-Appellants.

Robert L. Sweeney, Albany, N.Y. (Thomas A. Shepardson, Douglas R. Kemp, Shanley, Sweeney, Reilly & Allen, P.C., Albany, N.Y., on the brief), for Defendants-Appellees.

(Eliot Spitzer, N.Y. State Atty. General, Caitlin J. Halligan, Solicitor General, Daniel Smirlock, Deputy Solicitor General, Peter H. Lehner, John J. Sipos, Philip M. Bein, Asst. Attys. General, Office of N.Y. State Atty. General, Albany, N.Y., submitted a brief for amicus curiae State of New York, in support of Plaintiffs-Appellants.)

(Carter H. Strickland, Jr., Timothy Petrin, Law Student, Rutgers Environmental Law Clinic, Newark, N.J.; Nancy K. Stoner, Lawrence M. Levine, Natural Resources Defense Council, Inc., New York, N.Y., submitted a brief for amicus curiae National Resources Defense Council, Inc., in support of Plaintiffs-Appellants.)

Before: NEWMAN, CALABRESI, and STRAUB, Circuit Judges.

JON O. NEWMAN, Circuit Judge.

This appeal of a dismissal of claims under the Clean Water Act, 33 U.S.C. § 1251 et seq. ("CWA"), concerns the proper course for a district court when confronted with a motion to dismiss both on the merits and for lack of subject matter jurisdiction in circumstances where subject matter jurisdiction is adequately pleaded but the underlying jurisdictional facts are in question. Plaintiffs-Appellants Alliance for Environmental Renewal, Inc., and Save the Pine Bush, Inc., appeal from the May 20, 2004, judgment of the District Court for the Northern District of New York (Gary L. Sharpe, District Judge) dismissing their CWA claims against Defendants-Appellees Pyramid Crossgates Company and several affiliated entities (collectively "Crossgates"). The District Court dismissed for lack of statutory standing, a ruling premised on the Court's view that salt is not a pollutant under the CWA. We hold that the District Court must first resolve the subject matter jurisdictional issue on which the Plaintiffs' Article III standing depends before awarding either side a judgment that is, in essence, a judgment on the merits. The Court may resolve the factual issues concerning jurisdiction either on a summary judgment motion, if appropriate, or, if not, after an evidentiary hearing. Because the Article III jurisdictional facts have not yet been determined, we vacate and remand.

Background

The Plaintiffs-Appellants are non-profit organizations dedicated to preserving the environment. Crossgates operates a shopping mall in Guilderland, New York. The complaint alleges that Crossgates discharges waste-water into the Krum Kill Creek pursuant to a permit issued by the New York State Department of Environmental Conservation ("NYSDEC"). Among other things, this permit limits the concentration of sodium chloride—salt—in Crossgates' waste-water discharges.

In October 2003, the Plaintiffs sent Crossgates a notice of intent to sue, citing violations of salt concentration limits in the previous winter. After NYSDEC and the United States Environmental Protection Agency ("EPA") declined to bring suit, the Plaintiffs filed a citizens' suit in the United States District Court for the Northern District of New York, pursuant to 33 U.S.C. § 1365.

Crossgates moved to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, asserting that the Plaintiffs lacked standing, and pursuant to Rule 12(b)(6), asserting failure to state a claim on which relief can be granted. Crossgates challenged the Plaintiffs' standing both for lack of injury in fact sufficient to satisfy Article III standing and for lack of statutory standing under the CWA. In support of the Article III standing challenge, Crossgates contended that the Plaintiffs' injury from the pollutants was not "fairly traceable," Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984), to Crossgates because multiple sources for the salt run-off existed and the creek actually drained away from the Pine Bush Preserve. In support of the statutory standing challenges, Crossgates contended that the Plaintiffs lacked standing to sue under the CWA for a violation of a state-issued permit. Crossgates also argued, pursuant to Rule 12(b)(6), that the Plaintiffs' counts alleging violations of state statutes were not actionable under the CWA.

The Plaintiffs responded to the Article III standing challenge by submitting affidavits from officers of their organizations who stated that their members visit, observe, or recreate in and around the Krum Kill Creek itself, and that their interest in the preservation of the Pine Bush extended beyond the geographic bounds of the Pine Bush Preserve. These officers noted that one member lived near the creek and had children who had played in the creek, and many of their members had observed the creek as it flowed by a major highway and were offended by its appearance. In reply, Crossgates attacked the lack of specificity and the substantiality of the interests asserted in the affidavits.

To adjudicate the motion to dismiss the District Court first considered whether the Plaintiffs lacked statutory standing to sue under the citizens' suit provision of the CWA. In the Court's view, this question turned on whether salt is a pollutant within the meaning of section 502(6) the CWA, 33 U.S.C. § 1362(6).¹ The Court ruled that it is not. The Court further ruled that the Plaintiffs were claiming at most a violation of a state regulation, and, because the state regulation was broader in scope than the CWA, the District Court held, citing Atlantic States Legal Foundation, Inc. v. Eastman Kodak Co., 12 F.3d 353, 358 (2d Cir.1993) ("Kodak"), that the Plaintiffs did not have statutory standing to sue under the CWA. The Court dismissed without prejudice to state court litigation the counts based on violations of state statutes and regulations.

On appeal, the Plaintiffs principally argue that the District Court erred in ruling that salt could not be regulated as a "pollutant" under the CWA. Crossgates supports the District Court's ruling on salt and also urges affirmance on the alternative ground that the Plaintiffs did not establish Article III standing.

Discussion

An important component of the Article III jurisdictional limit of federal courts to deciding "cases" or "controversies" is standing. The Supreme Court has called Article III standing "perhaps the most important" of the case-or-controversy doctrines placing limits on federal judicial power. See Allen, 468 U.S. at 750, 104 S.Ct. 3315. More fundamental than judicially imposed, prudential limits on the exercise of federal jurisdiction is the "core component" of standing "derived directly from the Constitution." Id. at 751, 104 S.Ct. 3315. "A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Id.

Before 1998, federal courts, including the Second Circuit, see Browning-Ferris Industries of South Jersey, Inc. v. Muszynski, 899 F.2d 151, 154-59 (2d Cir. 1990), occasionally assumed the existence of jurisdiction and proceeded directly to the merits of a case in circumstances where the jurisdictional issue was close or complicated and the plaintiff's claim on the merits could be easily rejected. See, e.g., SEC v. American Capital Investments, Inc., 98 F.3d 1133, 1139-42 (9th Cir.1996); Smith v. Avino, 91 F.3d 105, 108 (11th Cir.1996). However, the Supreme Court has substantially ended that practice, ruling that a district court must generally resolve material factual disputes and establish that it has federal constitutional jurisdiction, including a determination that the plaintiff has Article III standing, before deciding a case on the merits. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 101, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).

Although Steel Co. makes clear that, with exceptions not relevant to the pending case,² the jurisdictional issue must be resolved before the merits issue, the decision creates an uncertainty as to the proper course in a case, like the pending one, presenting issues of both Article III and what the District Court viewed as statutory standing. The uncertainty arises from Justice Stevens's concurring opinion in Steel Co., which pointed out that the Court had frequently decided statutory standing issues before deciding issues of Article III standing. See id. at 117, 118 S.Ct. 1003 (Stevens, J., with whom Souter, J., joins in relevant part, concurring in the judgment). Notably, Justice Stevens cited Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997), written just one year before Steel Co. by Justice Scalia for a unanimous court.³ In Bennett, Justice Scalia wrote, "The first question in the present case is whether the [Endangered Species Act]'s citizen-suit provision ... negates the zone-of-interests test," id. at 164, 117 S.Ct. 1154 (emphasis added), a test he acknowledged derived from prudential limitations on standing, not Article III, see id. at 162-63, 117 S.Ct. 1154. Only after determining that the plaintiffs in Bennett were entitled to sue under the relevant statute did the Court proceed to consider the defendants' contention that the plaintiffs lacked Article III standing. See id. at 167-71, 117 S.Ct. 1154.

Although the sequence of issues considered in Bennett appears to illustrate Justice Stevens's contention in Steel Co. that statutory standing issues may be resolved before Article III standing...