Lake Mich. Fed. v. US Army Corps of Engineers

• Decision Date: 18 July 1990
• Docket Number: No. 90 C 2809.,90 C 2809.
• Citation: 742 F. Supp. 441
• Parties: LAKE MICHIGAN FEDERATION, an Illinois not-for-profit corporation; Laurie Leigh, Larry Heinemann, Seymour Meier and Capt. Don Thayer, Jr., as individual Illinois taxpayers, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS; Michael P.W. Stone, as Secretary of the Army; Henry T. Hatch, as Chief of Engineers; Jess J. Franco, as District Engineer, North Central Division, Corps of Engineers; and Loyola University of Chicago, a not-for-profit corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

742 F. Supp. 441

LAKE MICHIGAN FEDERATION, an Illinois not-for-profit corporation; Laurie Leigh, Larry Heinemann, Seymour Meier and Capt. Don Thayer, Jr., as individual Illinois taxpayers, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS; Michael P.W. Stone, as Secretary of the Army; Henry T. Hatch, as Chief of Engineers; Jess J. Franco, as District Engineer, North Central Division, Corps of Engineers; and Loyola University of Chicago, a not-for-profit corporation, Defendants.

No. 90 C 2809.

United States District Court, N.D. Illinois, E.D.

June 22, 1990.

Supplemental Opinion on Denial of Rehearing July 18, 1990.

Barry J. Freeman, Jeffrey P. Smith, Gottlieb & Schwartz, Chicago, Ill., for plaintiffs.

David Engel, Frederic J. Artwick, Sidley & Austin, Chicago, Ill., Gail Ginsberg, Asst. U.S. Atty., Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

The Lake Michigan Federation ("Federation") has filed this action for declaratory and injunctive relief against Loyola University of Chicago ("Loyola"), the United States Army Corps of Engineers, and various officials of the United States Army Corps of Engineers (collectively referred to as "the Corps"). The Federation seeks an injunction restraining Loyola from constructing a twenty acre lakefill on its Lake Shore campus in Chicago, Illinois. Because we find that the property to be used for this project was conveyed in violation of the public trust, we grant the Federation's motion for injunctive relief.¹

Loyola is a private educational institution organized as a not-for-profit corporation. Among Loyola's campuses in the Chicago area is its Lake Shore campus bordering Lake Michigan on the north side of the city. In 1988, Loyola decided to expand this campus. Loyola determined that it would not be feasible to expand onto adjacent land. Instead, it developed plans to construct a lakefill of approximately twenty acres in the waters of neighboring Lake Michigan. Because erosion had damaged the existing shoreline, Loyola viewed the lakefill both as a means for the expansion and protection of its campus.

The plans developed by Loyola called for a lakefill of about 18.5 acres. Along the perimeter of the lakefill, Loyola intended to construct a stone revetment, as well as bike and walking paths, a seatwall, and lawn areas. The public would have unrestricted access to these areas, which comprise about 2.1 acres of lakefill.² In the interior portion of the lakefill, Loyola plans to build athletic facilities, including a running track, a women's softball field, and multi-purpose athletic fields. The public would have access to these areas, but subject to Loyola's right of ownership. In addition, Loyola proposed restoration and improvements to Hartigan Park Beach, which borders the proposed lakefill.

Loyola sought and received legislative and municipal approval of this project. In Public Act 85-1145, S.B. 1171, the Illinois Legislature conveyed approximately 18.5 acres of the lakebed to Loyola for the purpose of expansion. In this act, the legislature acknowledged that it holds the title of submerged lands in trust for the people of Illinois. However, because the public would benefit from the lakefill in various ways, the legislature reasoned that it had the power to convey the land to Loyola. In addition to obtaining approval from the Illinois legislature, Loyola also entered into a contract with the Park District of the City of Chicago allowing Loyola to proceed with the project.

After securing the approval of state and local governmental entities, Loyola also cleared federal statutory hurdles. Pursuant to § 404 of the Clean Water Act, 33 U.S.C. § 1344, and § 10 of the Rivers and Harbors Act, 33 U.S.C. § 403, Loyola had to obtain a permit from the Corps before proceeding with construction. Loyola submitted a permit application on December 9, 1988. In addition to its permit review under the Clean Water Act and the Rivers and Harbors Act, the Corps was also required to consider the potential environmental impact of the project the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq. The Corps received and considered information provided by Loyola and its consultants, state and federal agencies, citizens' groups and individuals. The Corps ultimately concluded that the project would have no adverse impact on the environment, and issued a Finding of No Significant impact ("FONSI"), pursuant to 33 C.F.R. part 325. Because the Corps issued a FONSI, it was not required to prepare an Environmental Impact Statement ("EIS") under NEPA. The Corps also concluded that the project was permissible under the Clean Water Act and the Rivers and Harbors Act. Accordingly, on April 20, 1990, the Corps issued a permit to Loyola, which proceeded with its plans to begin construction of the project.³

The Federation seeks to enjoin the construction of the lakefill. Its complaint for declaratory and injunctive relief recites several legal grounds upon which an injunction should issue. The Federation attacks both the Corp's decision to issue the permit and the validity of the legislative grant of property to Loyola. Because we find that the legislative conveyance of the lakebed to Loyola violated the public trust doctrine, we need not reach the issue of whether the Corp's review of the permit application was arbitrary or capricious.

The classic statement of the public trust doctrine was promulgated in Illinois Central Railroad Company v. Illinois, 146 U.S. 387, 13 S.Ct. 110, 36 L.Ed. 1018 (1892). In this case, the Supreme Court invalidated the transfer of 1000 acres of submerged lands in Lake Michigan to the Illinois Central Railroad. The Court explained that dominion and sovereignty over submerged lands belong to the State in which the land is found. Id. at 435, 13 S.Ct. at 111. However, the title to these submerged lands is "different in character from that which the State holds in lands intended for sale." Id. at 452, 13 S.Ct. at 118. "It is a title held in trust for the people of the State that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or interference of private parties." Id. "The State can no more abdicate its trust over property in which the whole people are interested, like navigable waters and the soils under them, so as to leave them entirely under the use and control of private parties ... than it can abdicate its police powers in the administration of government and the preservation of peace." Id. at 453, 13 S.Ct. at 118.

Since the Supreme Court's decision in Illinois Central Railroad Co. v. Illinois, several attempts by the State of Illinois to transfer public lands have been scrutinized under the public trust doctrine. For example, in Illinois Cent. R. Co. v. City of Chicago, 173 Ill. 471, 50 N.E. 1104 (Ill. 1898), the Illinois Supreme Court, relying heavily on Illinois Central Railroad Co. v. Illinois, held that the Illinois legislature lacked the power to allow the Illinois Central Railroad to appropriate a parcel of the lakebed for private use. Similarly, in People v. Kirk, 162 Ill. 138, 45 N.E. 830 (Ill. 1896), the Illinois Supreme Court utilized the public trust doctrine to evaluate a transfer of the lakebed. In this case, a portion of the lakebed was transferred in order to construct an extension of Lake Shore Drive. The Court found that the transfer did not violate the public trust doctrine because the legislature had not attempted to relinquish its power over the land and because the project would directly benefit the public. Id. at 835. See also, Paepcke v. Public Building Commission of Chicago, 46 Ill.2d 330, 263 N.E.2d 11 (Ill.1970) (Diversion of land previously used as a park to a new public use did not violate public trust doctrine).

The most recent and exhaustive analysis of the public trust doctrine was given in People ex rel. Scott v. Chicago Park Dist., 66 Ill.2d 65, 4 Ill.Dec. 660, 360 N.E.2d 773 (Ill.1976). The Illinois Attorney General challenged a bill which conveyed 194.6 acres of land submerged in the waters of Lake Michigan to the United States Steel Corporation ("U.S. Steel"). The Illinois Supreme Court observed that, "it is obvious that Lake Michigan is a valuable resource belonging to the people of this State in perpetuity ... and any attempted ceding of a portion of it in favor of a private interest has to withstand a most critical examination." Id. 4 Ill.Dec. at 667, 360 N.E.2d at 780. The Court ultimately concluded that the conveyance of land to U.S. Steel could not withstand this critical examination.

In holding that the conveyance violated the public trust doctrine, the Court focused on the purpose behind the challenged legislation. Reviewing its prior public trust jurisprudence, the Court noted that it had never upheld a grant of governmental land where its primary purpose was to benefit a private interest. Id. 4 Ill.Dec. at 667, 360 N.E.2d at 780. Indeed, the Court observed that in the only case in which a grant to a private entity had been sustained, People ex rel. Moloney v. Kirk, "the main purpose of the statute was to allow public officials to construct a needed extension of Lake Shore Drive for direct public benefit." Id. 4 Ill.Dec. at 666, 360 N.E.2d at 779. Therefore, the Court concluded that in order to satisfy the public trust doctrine, the primary purpose of the challenged grant must be to benefit the public, rather than a private interest. Moreover, the Court held that the public purpose advanced by the grant must be direct. Thus, it found that benefits to the public through additional employment and economic improvement were "too indirect, intangible, and elusive to satisfy the requirement of a public purpose." Id.

Three basic principles can be distilled from this body of public trust case law. First, courts should be critical of attempts by the state to surrender valuable public...