Leslie Salt Co. v. US

• Decision Date: 11 January 1989
• Docket Number: No. C-85-8615-CAL,C-86-4187-CAL.,C-85-8615-CAL
• Parties: LESLIE SALT CO., a Delaware corporation, Plaintiff, v. The UNITED STATES of America; John O. Marsh, et al., Defendants. UNITED STATES of America, Plaintiff, v. LESLIE SALT CO., a Delaware corporation, Cargill Inc., a Delaware corporation, Defendants.
• Court: U.S. District Court — Northern District of California

700 F. Supp. 476

LESLIE SALT CO., a Delaware corporation, Plaintiff, v. The UNITED STATES of America; John O. Marsh, et al., Defendants.

UNITED STATES of America, Plaintiff, v. LESLIE SALT CO., a Delaware corporation, Cargill Inc., a Delaware corporation, Defendants.

Nos. C-85-8615-CAL, C-86-4187-CAL.

United States District Court, N.D. California.

September 29, 1988.

As Amended January 11, 1989.

Edgar B. Washburn, John P. Yeager, David M. Ivester, Ronald E. Altman, Washburn & Kemp, San Francisco, Cal., for Leslie Salt Co.

Francis B. Boone, Asst. U.S. Atty., San Francisco, Cal., for U.S., et al.

E. Clement Shute, Jr., Shute, Mihaly & Weinberger, San Francisco, Cal., for Save San Francisco Bay Ass'n and Nat. Audubon Society, defendants in intervention.

OPINION

LEGGE, District Judge.

These cases were tried to the court, sitting without a jury. The cases were then argued and submitted for decision following the completion of briefing. The court has heard and reviewed the testimony of the witnesses, and has reviewed the designated deposition transcripts, the exhibits, the designated discovery responses, the record of the case, and the applicable authorities. This opinion constitutes the court's findings of fact and conclusions of law, as provided in Rule 52(a) of the Federal Rules of Civil Procedure.

I. Parties

Leslie Salt Co., a Delaware corporation, is the plaintiff in C-85-8615 and a defendant in C-86-4187. Cargill Inc., a Delaware corporation, is the owner of Leslie Salt Co. and is also a defendant in C-86-4187. Those parties will jointly be called "Leslie" in this opinion. The United States of America is the plaintiff in C-86-4187 and the defendant in C-85-8615. The Secretary of the Army, the United States Army Corps of Engineers, and certain officers of the Corps of Engineers are also defendants in C-85-8615. The United States, the Secretary, the Corps and its officers are collectively called the "Corps." The Save San Francisco Bay Association, Inc., and the National Audubon Society were granted leave to intervene as defendants in C-85-8615.

II. Jurisdiction of the Court

There is no dispute between the parties as to the jurisdiction and venue of this court. Jurisdiction is predicated on 28 U.S.C. §§ 1331, 1345, 1346, and 2201-2202, 33 U.S.C. §§ 406 and 1319(b). The property in dispute is located in this district, and venue is proper under 28 U.S.C. §§ 1391(b), 1391(e) and 1402, and 33 U.S.C. § 406 and 1319(b).

These actions arose when the Corps issued a cease and desist order to Leslie pertaining to Leslie's activity on certain property that Leslie owns in the City of Newark, California. The Corps asserted jurisdiction over the property under § 1344 of the Clean Water Act, 33 U.S.C. § 1251 et seq., and subsequently also asserted jurisdiction under § 403 of the Rivers and Harbors Act, 33 U.S.C. § 401 et seq. Leslie filed action C-85-8615 to contest the Corps' jurisdiction over the property. The Corps then brought action C-86-4187 to establish its jurisdiction over the property under those two Acts, and claimed that Leslie had violated those Acts in connection with its activities on or connected with the property. The principal, but not the only, question to be resolved is whether the property is a "wetland" within the meaning of the applicable statutes and regulations, and hence is under the jurisdiction of the Corps.

III. Burden of Proof

Before trial the Corps moved for a bifurcation and stay of the action. The motion in essence asked this court to refer the central issue in this case — whether the property is under the jurisdiction of the Corps — to the Corps for its administrative decision. That decision would have then been reviewable by this court under the Administrative Procedure Act, 5 U.S.C. § 706. The record for that review would have been confined to the Corps' decision and its administrative record, and the review would have been under the limited standard of whether the Corps' decision was arbitrary, capricious, an abuse of discretion, or contrary to law. This court denied that motion and determined that the issues should be tried as plenary actions in this court. Leslie Salt Co. v. United States, 660 F.Supp. 183 (N.D.Cal.1987).

At trial, the Corps acknowledged that the burden of proof in this plenary civil trial is the preponderance of the evidence. However, the parties disagree about what must be proved. Leslie contends that it has the burden of showing that the Corps lacks jurisdiction over its property. The Corps contends that Leslie must prove that the Corps' assertion of jurisdiction is arbitrary and capricious.

The basis for the Corps' argument is the well-settled principle that an agency's interpretation of a statute which it administers is generally entitled to substantial deference, as is the agency's interpretation of its own regulations. Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566, 100 S.Ct. 790, 797, 63 L.Ed.2d 22 (1980). Under this principle, the court must accept the agency's interpretation so long as it is "reasonable and not in conflict with the expressed intent of Congress." United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131, 106 S.Ct. 455, 461, 88 L.Ed.2d 419 (1985).

The court cannot determine whether the Corps has jurisdiction over Leslie's property with no reference at all to the Corps' interpretation of the applicable statutes and regulations. However, the Corps' interpretation is not entitled to prevail simply because it is not capricious or arbitrary. The issue is whether it "is reasonable, in light of the language, policies, and legislative history of the Acts for the Corps to exercise jurisdiction." Id. at 131, 106 S.Ct. at 461 (emphasis added).

The standard of reasonableness requires evaluating the evidence in light of the language of the Clean Water Act, the Rivers and Harbors Act, and the applicable regulations under those Acts. That requires consideration of a number of factors, including the degree of the Corps' scientific or technical expertise necessarily drawn upon in reaching its interpretation, the consistency of the interpretation within the Corps, the length of adherence to the interpretation, and the explicitness of the Congressional grant of authority to the Corps. See Avoyelles Sportsmen's League v. Marsh, 715 F.2d 897, 910-11 (5th Cir.1983).¹

This is the standard which this court has followed in this case. The court emphasizes that this reasonableness standard does not affect the parties' evidentiary burdens in proving disputed factual issues. Deference does not require the court to accept the Corps' version of the evidence. And the facts stated in this opinion are found by this court to be facts by a preponderance of the evidence.

IV. The Role of the Court

Underlying the legal and factual issues to be decided in this case is the financial question of what use will be made of the property. It is obviously a valuable piece of commercial property, and Leslie seeks to develop it. By asserting jurisdiction, the Corps seeks to preclude or restrict that development, and in essence to maintain the property in its present undeveloped state.

This case therefore involves a balance between the rights of private property on the one hand, and the interests of the government and the public on the other. The scale for measuring that balance is defined by Congress in the Clean Water Act and the Rivers and Harbors Act.

The role of this court is not to sit as a super-ecologist. That is, it is not the function of this court to decide what should be done with the property in the best interests of ecological balance. If that were the court's function, this court would probably say that the San Francisco Bay Area has too much development and that more land should be left undeveloped. But that is not the court's function. This court's role is to define what Congress did under the Acts, to define what powers the Corps has been given by Congress and by the regulations, and to apply those definitions to the evidence which the court has heard about the property. In order to restrict or prevent Leslie's right to develop its property, the court must find from the evidence that the property is within the jurisdiction of the Corps under those Acts and regulations. That is the extent of the judicial power in this dispute.

V. The Property

The property is owned by Leslie. It totals one hundred fifty-three acres, divided by a road into two parcels of approximately one hundred forty-three acres and ten acres. Except where there is a reason to distinguish between them, both parcels will be collectively called the "property."

The property is located in the City of Newark, Alameda County, California. It is surrounded on all sides by roads and highways. The one hundred forty-three acre parcel ("parcel 143") is bounded on the north by State Highway 84, on the west by Thornton Avenue, on the south by relocated Jarvis Avenue, and on the east by Jarvis Avenue, with residential subdivisions of the City of Newark lying east across Jarvis Avenue. The ten acre parcel ("parcel 10") is located across relocated Jarvis Avenue to the south of parcel 143 and is bounded by Thornton and Jarvis Avenues.

Across Thornton Avenue to the west of the property is the San Francisco National Wildlife Refuge, situated on land which was previously taken from Leslie by condemnation action of United States. The nearest navigable water is Newark Slough, which is approximately one quarter mile from the southernmost tip of the property, and that point is approximately two miles from San Francisco Bay.

Parcel 143 consists of areas of differing characteristics which are important for purposes of this litigation. Approximately the eastern one-third of the parcel is pastureland. Located on the pastureland are two pits, which were formerly used by Leslie for the deposit of calcium chloride. The remaining two thirds of parcel 143 constitutes land surface which Leslie...