Di Vosta Rentals, Inc. v. Lee

• Decision Date: 04 December 1973
• Docket Number: No. 73-1893.,73-1893.
• Citation: 488 F.2d 674
• Parties: Di VOSTA RENTALS, INC., Plaintiff-Appellee, v. Emmett C. LEE, Jr., Colonel, Corps of Engineers, etc., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

488 F.2d 674 (1973)

Di VOSTA RENTALS, INC., Plaintiff-Appellee, v. Emmett C. LEE, Jr., Colonel, Corps of Engineers, etc., et al., Defendants-Appellants.

No. 73-1893.

United States Court of Appeals, Fifth Circuit.

November 14, 1973.

Rehearing Denied December 4, 1973.

COPYRIGHT MATERIAL OMITTED

Lawrence E. Shearer, Carl Strass, Attys., Dept. of Justice, Washington, D. C., Robert W. Rust, U. S. Atty., Robert N. Reynolds, Asst. U. S. Atty., Miami, Fla., Wallace H. Johnson, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., for defendants-appellants.

James E. Weber, Douglas C. Fulton, West Palm Beach, Fla., for plaintiff-appellee.

Before GEWIN, AINSWORTH and MORGAN, Circuit Judges.

LEWIS R. MORGAN, Circuit Judge:

The question presented to us for review in this case is whether the district court erred in ordering the Secretary of the Army to issue a permit to fill navigable waters to Di Vosta Rentals, Inc. (hereinafter referred to as Di Vosta). To answer the question, we must examine the scope of authority granted to the Secretary by § 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403,¹ and the scope of review which the district court should have used to test the validity of the Secretary's refusal to issue a permit. After receiving stipulated evidence and trial briefs from the parties, the district court ordered defendants to issue a permit to the plaintiff. We reverse.

I

On February 3, 1967, Di Vosta acquired title to a parcel of land fronting on Lake Worth, Florida. On September 10, 1969, having paid $18,221 to the Trustees of the Internal Improvement Trust Fund of the State of Florida, Di Vosta acquired title to .614 acres of submerged land adjoining its lakeside property. Di Vosta's purpose, which did not become known to the government agencies involved until much later, was to build an apartment building on the property. To make the land suitable for this project, Di Vosta had to obtain fill permits for the submerged land from both the state and federal governments. Di Vosta first applied to the Trustees for a permit. They refused. Di Vosta successfully sued in the state courts of Florida to compel issuance of the permit, which was issued July 23, 1970.

Di Vosta applied to the Corps of Engineers for a dredge and fill permit on July 31, 1970. After distributing public notice of the request, the Corps received objections from private citizens, the Palm Beach County Board of County Commissioners and several federal agencies.

The Corps informed Di Vosta of the objections and offered the opportunity to present arguments in support of the project. Di Vosta did so in late January, 1971. This information was sent to the objecting federal agencies, and in March, the Corps was informed that these agencies remained opposed to the permit. Negotiations continued throughout 1971, but all parties held staunchly to their positions. The District Engineer informed Di Vosta on April 19, 1972, that its application for a permit had been denied because the permit:

1. Is not believed to be consistent with current public interest in the preservation of man\'s natural environment as enunciated in Public Law 91-190,

2. Would not involve, a water-dependent development, and

3. Is opposed by the Department of the Interior and the Environmental Protection Agency and was approved by the Board of Trustees of the Internal Improvement Trust Fund only after an order from circuit court.

Di Vosta filed suit in district court on May 25, 1972, and the court entered its final judgment March 16, 1973, requiring the federal defendants to issue the fill permit to Di Vosta. The defendants filed a notice of appeal April 19, 1973.

II

The Secretary's decision to deny the permit must be examined in relation to the applicable institutional framework. Section 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403, is a total ban on all obstructions of navigable waters, subject only to exceptions specifically authorized by the Secretary of the Army. The Act allows the Secretary wide discretion in deciding whether to issue a permit. In fact, it places no restrictions on the decision at all. Nevertheless, the authority of the Secretary to grant or deny permits is not unlimited. His decision may be reviewed by a court. 5 U.S.C. § 706. Zabel v. Tabb (5 Cir. 1970) 430 F.2d 199, cert. denied, 401 U.S. 910, 91 S.Ct. 873, 27 L.Ed.2d 808 (1971). See, Association of Data Processing Service Organization, Inc. v. Camp, 397 U.S. 150, 156-157, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).

A reviewing court is limited in its review of an agency decision, however. Its function is not to determine the correctness, in some ultimate sense, of an agency's actions. A reviewing court is limited to determining only the legality of the challenged action. If an agency acts within the scope of its authority, and if that authority is consistent with the Constitution, then a court may not overturn the agency's decision. St. Joseph Stock Yards Company v. United States, 298 U.S. 38, 51, 56 S.Ct. 720, 80 L.Ed. 1033 (1936).

In § 10, Congress has left certain decisions within the discretion of the Secretary of the Army. A court may review the legality of the Secretary's exercise of discretion, American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 108, 23 S.Ct. 33, 47 L.Ed. 90 (1902), but may not substitute its judgment for that of the Secretary. Federal Reserve System v. Agnew, 329 U.S. 441, 444, 67 S.Ct. 411, 91 L.Ed. 408 (1947).

Congress has codified the rules which control court review of agency action. In the Administrative Procedure Act, 5 U.S.C. § 701 et seq., Congress set forth specific guidelines which courts are obliged to use in reviewing agency decisions. The primary question before this court is one of the applicability of the various subsections of 5 U.S.C. § 706,² setting standards for the judicial review of administrative action.

The district court held 5 U.S.C. § 706(2)(E) to be applicable to the Secretary's decision to refuse a permit. That section allows a court to set aside agency action found to be "unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute . . . ."

The defendants argue that subsection (E) is not applicable because the proceedings herein do not fall into either of the two categories of that subsection. They further argue that the only relevant subsection of § 706(2) is § 706(2)(A), providing that agency action may be set aside if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law . . . ."

Defendants' position is unexceptionable. At no time has Di Vosta argued that the Secretary's actions fall into either of the two categories of subsection (E), proceedings under 5 U. S.C. §§ 556 and 557, or decisions "otherwise reviewed on the record of an agency hearing provided by statute." Actions which do not fall within either of these categories are not subject to the "substantial evidence" test. Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L. Ed.2d 106, 111 (1973).

Di Vosta's citation of General Motors Corporation v. United States, (6 Cir. 1963) 324 F.2d 604, is unavailing, since that case involved a tariff-setting proceeding before the Interstate Commerce Commission. The G.M. case was based on the landmark case of Universal Camera Corporation v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Concededly, proceedings before both the I.C.C. and the N.L.R.B. are subject to the "substantial evidence" requirement. But decisions of the Secretary of the Army under 33 U.S.C. § 403 are not.

Di Vosta argues that the following language in Zabel v. Tabb, supra, indicates that the Secretary's decision is subject to "substantial evidence" review.

The question presented to us is whether the Secretary of the Army can refuse to authorize a dredge and fill project in navigable waters for factually substantial ecological reasons even though the project would not interfere with navigation, flood control, or the production of power. 430 F.2d at 203.

The question of the proper standard of review was not before the court in Zabel. The only question presented was whether the Secretary could consider ecological factors in making his decision on the granting of a permit. Id. The court answered this question in the affirmative. The Zabel opinion cannot be read to include any holding with respect to the proper scope of judicial review of the Secretary's decision.

Di Vosta also argues that by submitting the case to the district court on stipulated evidence, the defendants agreed to de novo review of the Secretary's decision. This contention is totally without merit. Parties may not agree to expand the jurisdiction of the federal courts. American Fire & Casualty Company v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951).

III

Under different circumstances, it might be advisable to end the opinion at this point and simply remand the case to the district court for a determination of the issue of whether the Secretary's action in denying the permit was "arbitrary and capricious" within the meaning of 5 U.S.C. § 706(2)(A). We feel, however, that additional litigation in the district court would be a waste of resources for all concerned. This case was submitted to the district court on stipulated documentary evidence and written trial briefs. Although this circumstance does not change this court's scope of review, it does affect our disposition of the case. For the reasons explained below, we are convinced that the Secretary's action was not arbitrary or capricious. Believing that nothing that might happen in the district court on remand could change our view of the case, we reverse, not for further proceedings not inconsistent with this opinion, but with directions to dismiss the complaint. Because we are making a final disposition of this case in this...