Hoosier Envir. Council v. U.S. Army Corps of Eng.

• Decision Date: 19 July 2000
• Docket Number: No. IP98-0606-C-M/S.,IP98-0606-C-M/S.
• Citation: 105 F.Supp.2d 953
• Parties: HOOSIER ENVIRONMENTAL COUNCIL, INC, Protect Our River Environment, Protect Our Woods Inc, Plaintiffs, v. U.S. ARMY CORPS OF ENGINEERS, ROBERT M. Walker, in His Official Capacity as Acting Secretary of the U.S. Department of the Army, Joe N. Ballard, Lieutenant General, in His Official Capacity as Commander and Chief of Engineers of the U.S. Army Corps of Engineers, Harry L. SPEAR, Colonel, in His Official Capacity as District Commander, Louisville District, RDI/Caesars Riverboat Casino, LLC, Defendants.
• Court: U.S. District Court — Southern District of Indiana

105 F.Supp.2d 953

HOOSIER ENVIRONMENTAL COUNCIL, INC, Protect Our River Environment, Protect Our Woods Inc, Plaintiffs, v. U.S. ARMY CORPS OF ENGINEERS, ROBERT M. Walker, in His Official Capacity as Acting Secretary of the U.S. Department of the Army, Joe N. Ballard, Lieutenant General, in His Official Capacity as Commander and Chief of Engineers of the U.S. Army Corps of Engineers, Harry L. SPEAR, Colonel, in His Official Capacity as District Commander, Louisville District, RDI/Caesars Riverboat Casino, LLC, Defendants.

No. IP98-0606-C-M/S.

United States District Court, S.D. Indiana, Indianapolis Division.

July 19, 2000.

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Keith Guthrie, Elizabethtown, IN, Michael A Mullett, Mullett & Associates, Indianapolis, IN, for plaintiffs.

Sue Hendricks Bailey, Office of the U.S. Attorney, Indianapolis, IN, Ronald E Elberger, Bose McKinney & Evans, Indianapolis, IN, Thomas A Lorenzen, Environmental Defense Section, Washington, DC, Bradley L Williams, Ice Miller Donadio & Ryan, Indianapolis, IN, for defendants.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

McKINNEY, District Judge.

This matter comes before the Court on cross-motions for summary judgment filed by the plaintiffs and the government defendants on September 21, 1999. At issue is whether the United States Army Corps of Engineers, Robert M. Walker, Lt. Gen. Joe N. Ballard, or Col. Harry L. Spear (collectively the "COE" or the "COE and its officers"), in issuing a permit to RDI/Caesars Riverboat Casino, L.L.C. ("Caesars") for construction and operation of its riverboat gambling facility, violated the Administrative Procedures Act, 5 U.S.C. §§ 701-706 ("APA"), the National Environmental Policy Act, 42 U.S.C. §§ 4321-4370d ("NEPA"), the Clean Water Act, 33 U.S.C. §§ 1251-1387 ("CWA"), and section 10 of the Rivers and Harbors Appropriations Act of 1899, 33 U.S.C. § 403 ("RHA"). The plaintiffs seek a ruling from the Court that will invalidate the permit issued to Caesars in February of 1998, remand the case to the COE for further review, and enjoin the operation of Caesars' riverboat casino and hotel resort complex until such review is completed. For the reasons fully expressed below, the Court GRANTS the defendant's motion for summary judgment, and DENIES the plaintiffs' cross-motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

During the May 1994 primary election, the citizens of Harrison County, Indiana, voted by referendum to authorize a riverboat gaming operation on the county's southern border along the Ohio River. Indiana law allows such a vote by citizens in the counties contiguous to Lake Michigan, the Ohio River or Patoka Lake. Ind. Code § 4-33-1-1; § 4-33-6-19. Before a gaming operation can be constructed, however, an abundance of regulatory procedures and state and federal agencies must be satisfied. One of the most prominent agencies, the Indiana Gaming Commission (the "IGC"), was established by the General Assembly to administer, regulate and enforce the state's riverboat gambling system. Ind.Code §§ 4-33-3-1, 4-33-4-1. The IGC has the power to determine who is entitled to a riverboat gambling license and in what area the vessel may be located. Id. § 4-33-4-13(b). It makes this decision after consulting with the COE about the waterways that are navigable for purposes of riverboat gambling operations and the proper routes and stops of such vessels. Ind.Code § 4-33-4-10, 4-13. Only after the applicant secures the COE's approval for the operation of a riverboat on a specific waterway may the IGC issue a license for such operation. Id. § 4-33-4-13(b); § 4-33-4-20 (voiding license if COE rescinds an approval).

State law allows the IGC to issue a total of eleven licenses for riverboat gaming operations at any one time. Only five licenses, however, are available for operations along the Ohio River, with no more than one riverboat per county. Ind.Code §§ 4-33-6-1(a), 6-1(a)(5). Voter approval of riverboat gambling in the abstract must be obtained before a license may be issued for any riverboat to be docked in a county. Ind.Code § 4-33-6-19. Next, the county fiscal body must approve an ordinance permitting the docking of the riverboat in the county. Ind.Code § 4-33-6-18(c). Once those two steps are taken, potential riverboat owners must apply for and obtain one of the five Ohio River licenses. Part of that process involves convincing the IGC to select its project as the one that offers the most economic development and best serves the interests of the citizens of Indiana. One step along the way is to obtain a Certificate of Suitability from the IGC.

In an attempt to earn one of these licenses, defendant Caesars, on April 1, 1996, applied to the COE for a permit under § 10 of the Rivers and Harbors Appropriations Act of 1899 ("RHA"), § 403 and § 404(b) of the Clean Water Act ("CWA"), 33 U.S.C. § 1344(b). App. to Am. Compl. for Decl. and Inj. Rel. ("Compl."), Ex. 1, Statement of Findings and Env'l Assess. by Col. Harry L. Spear ("Col.Spear"), Commander and District Engineer, Louisville Dist. U.S. COE, Feb. 10, 1998, (hereafter "Findings") at 1. The application requested authorization under the two environmental laws to construct a permanent mooring facility for a riverboat gambling vessel on the banks of the Ohio River near Bridgeport, in Harrison County (the "Townsend Site").¹ Findings at 1. Caesars' proposed gambling vessel was a multi-level riverboat with a deck level dimension of approximately 105 feet by 450 feet long, intended to hold approximately 4,000 passengers and 400 staff members. Findings at 2. Indiana law prohibits any gambling on a riverboat while it is docked, with certain exceptions related to weather water or traffic conditions. Ind.Code § 4-33-9-2. To enable the proposed riverboat vessel to cruise as required by Indiana law, Caesars needed to dredge approximately 28,000 cubic yards of material from the river bottom. Findings at 1. Because Kentucky law prohibits gambling and the state line is closer to the Indiana bank of the river at this point, Caesars also needed to excavate from the river bank along the cruising lane, construct mooring piles both in the water and on the bank, and stabilize a section of the bank to facilitate its operations. Id. at 1-2, 33, 64. Thus, the COE permit was a necessary step toward getting IGC approval for a riverboat gambling license for development on Caesars' Bridgeport, Indiana, property.

Nearly two years after receiving Caesars' initial application, Col. Spear released his Findings, on February 10, 1998, which included an Environmental Assessment of Caesars' proposed riverboat gambling project. Amend. Compl. Ex. 1, Findings at 69. Col. Spear had specifically found that the project would have no significant impact on the human environment, which is formally considered a "finding of no significant impact" ("FONSI"). Id.; see 33 C.F.R. §§ 230.10-230.11 (allowing an environmental assessment instead of an environmental impact statement when there is a FONSI). Nevertheless, in response to the comments and additional information he had received from state and federal agencies and members of the public during the public interest review, Col. Spear added numerous special conditions to the permit to limit, prevent or mitigate the environmental impacts he identified in the environmental assessment. Findings at 47, 59-69. As a result, the RHA and CWA permit issued to Caesars for construction and operation of its project contained all of the standard conditions and some thirty-four special conditions. Id. at 69-73.

Because of the FONSI, Col. Spear determined that an Environmental Impact Statement ("EIS"), pursuant to § 102 of NEPA, would not be necessary. Id. at 58, 69. Section 102 expresses our national commitment to considering the environmental impact of actions and decisions by the executive agencies of the federal government. See generally, 42 U.S.C. § 4332. Specifically, the law requires that "all agencies of the Federal Government ... include in every recommendation or report on ... major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible officer on — (I) the environmental impact of the proposed action...." 42 U.S.C. § 4332(2)(C) (emphasis added). By finding no significant impact from the project, the COE was authorized both by the statute and by Department of the Army regulations not to prepare an EIS before issuing a permit. See 33 C.F.R. § 230.10-11.

After the permit was approved by the COE, February 10, 1998, Caesars began construction below the Ordinary High Water Mark ("OHWM"). Construction above the OHWM had already commenced in November of 1997. Findings at 68. The project itself, located approximately ten miles south of the City of New Albany, Indiana, included the gaming vessel, as well as a 500 room hotel, an entertainment complex, a golf academy, parking for 3,200 vehicles, and an off-site eighteen-hole golf course. Administrative Record ("AR"), Vol. II, Tab 1, Traffic Study dated Dec. 1995 at 1 ("Traffic Study"); Findings at 2. The entire complex is located directly across the river from the City of Louisville, the most populous metropolitan area in the State of Kentucky, and is accessed by Indiana State Road 111. Traffic Study at 1; Findings at 13. The land-side facilities also included a deep-water well and water treatment plant for potable water, which were to be deeded to the Town of Elizabeth upon completion, and a wastewater treatment plant. Findings at 2, 67. These land-side structures constitute the elements of the project begun before the permit issued. Findings at 68.

Throughout its review of Caesars' permit application, the COE received many comments from the public, including the plaintiff organizations, Hoosier Environmental...