Mashni v. U.S. Army Corps of Eng'rs

• Decision Date: 22 April 2021
• Docket Number: No. 2:20-cv-4235-DCN,2:20-cv-4235-DCN
• Citation: 535 F.Supp.3d 475
• Parties: Paul Edward MASHNI; Kiawah River Farms, LLC; and KRF XSL, LLC, Plaintiffs, v. U.S. ARMY CORPS OF ENGINEERS and Lt. Colonel Rachel Honderd, in her official capacity as District Engineer, Defendants.
• Court: U.S. District Court — District of South Carolina

535 F.Supp.3d 475

Paul Edward MASHNI; Kiawah River Farms, LLC; and KRF XSL, LLC, Plaintiffs,

v.U.S. ARMY CORPS OF ENGINEERS and Lt. Colonel Rachel Honderd, in her official capacity as District Engineer, Defendants.

No. 2:20-cv-4235-DCN

United States District Court, D. South Carolina, Charleston Division.

Signed April 22, 2021

Jeffrey Heath Wood, Pro Hac Vice, Baker Botts LLP, Washington, DC, Matthew Todd Carroll, Womble Bond Dickinson US LLP, Columbia, SC, for Plaintiffs.

Jacqueline LaPan Edgerton, US Attorneys Office, Charleston, SC, for Defendants.

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE

The following matter is before the court on defendants U.S. Army Corps of Engineers ("the Corps") and Lt. Colonel Rachel Honderd's (collectively, "defendants") motion to dismiss, ECF No. 6. For the reasons set forth below, the court grants the motion and dismisses the action.

I. BACKGROUND

Before reciting the facts of the case, the court outlines the relevant statutory and regulatory landscape to set the backdrop necessary for understanding this dispute. The story begins with the Clean Water Act ("CWA"). The CWA establishes a comprehensive statutory scheme designed to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). To that end, the CWA prohibits the discharge of any pollutant, including dredged or fill material, into navigable waters, unless the discharges are made pursuant to statutorily authorized permits. 33 U.S.C. § 1311(a) (emphasis added). The term "navigable waters" encompasses "the waters of the United States" (or "WOTUS"), a phrase that the regulations define to include both traditionally navigable waters—like lakes and ponds—and some waters that are not practically navigable—like certain wetlands. 33 U.S.C. § 1362(7) ; see also 33 C.F.R. § 328.3(a). The contours of the phrase "waters of the United States" and the extent of its constitutionality authorized reach have, to put it mildly, been the source of much confusion and controversy. See Rapanos v. United States, 547 U.S. 715, 126 S.Ct. 2208, 165 L.Ed.2d 159 (2006) (plurality opinion); see also Sackett v. E.P.A., 566 U.S. 120, 132, 132 S.Ct. 1367, 182 L.Ed.2d 367 (2012) ("The reach of the Clean Water Act is notoriously unclear."). Current jurisprudence reveals that the CWA's constitutional grasp extends to waters falling somewhere between "transitory puddles or ephemeral flows of water" on the shallow end, Rapanos, 547 U.S. at 733, 126 S.Ct. 2208, and "traditionally navigable waters" on the deep end, Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Engineers, 531 U.S. 159, 190, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001) (J. Stevens, dissenting). That constitution-based confusion has only been compounded by differing regulations promulgated by changing administrations. Suffice it to say, a landowner, even if well-versed in cannons of statutory interpretation and armed with a legion of constitutional law professors, would have a difficult time discerning whether water on his or her property is subject to federal regulation under the CWA.

Recognizing that "it is often difficult to determine whether a particular piece of property contains waters of the United States," U.S. Army Corps of Engineers v. Hawkes Co., 578 U.S. 590, 136 S. Ct. 1807, 1812, 195 L.Ed.2d 77 (2016), the regulations authorize the Corps to issue landowners "jurisdictional determinations" ("JDs"), which the regulations define as "written Corps determination[s] that a wetland and/or waterbody is subject to regulatory jurisdiction under ... the Clean Water Act," 33 C.F.R. § 331.2. As the Supreme Court has explained, JDs "come in two varieties: ‘preliminary’ and ‘approved.’ " Hawkes Co., 136 S. Ct. at 1812. "While preliminary JDs merely advise a property owner ‘that there may be waters of the United States on a parcel,’ approved JDs definitively ‘stat[e] the presence or absence’ of such waters." Id. (quoting 33 C.F.R. § 331.2 ). Once issued, an approved JD is binding for five years on the Corps and constitutes a "final agency action" for the purposes of the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701, et seq. Id. (citing 33 C.F.R. § 320.1(a)(6) ). A preliminary JD, on the other hand, is neither binding nor final. Id.

In 2016, the Corps issued Regulatory Guidance Letter No. 16-10 (the "2016 RGL") to "provide guidance to the field and the regulated public on when it may be appropriate to issue an [approved] JD as opposed to a [preliminary] JD, or when it may be appropriate not to prepare any JD whatsoever." ECF No. 1-2 at 7. The letter explains:

The regulations implementing the CWA and [the Rivers and Harbors Act] introduced the concept of JDs when they "... authorized its district engineers to issue formal determinations of the applicability of the [CWA] to ... tracts of land." 33 C.F.R. 320.1 (a)(6). The use of such determinations was not addressed by either statute, and the regulations make their use discretionary and do not create a right to a JD. The regulations authorize their use as a service to the public, and the Corps has developed a practice of providing JDs when requested, and in appropriate circumstances.

Id. at 8 (emphasis added) (ellipses in original).

With the stage set, the court turns to the facts. Plaintiff Paul Edward Mashni ("Mashni") owns several multi-acre parcels of land on Johns Island, South Carolina, near the Stono and Kiawah Rivers. The parties refer to the parcels relevant to this action as the "Legareville Site." Plaintiffs Kiawah River Farms, LLC and KRF XSL, LLC (together with Mashni, "plaintiffs") are entities owned and operated by Mashni that co-own the Legareville Site along with him. According to plaintiffs, Mashni uses the Legareville Site as a farm for his horses. In 2017, the Corps sent Mashni a letter stating its preliminary view that his properties house "waters of the United States" subject to CWA jurisdiction. On June 22, 2018, plaintiff KRF XSL, LLC, joined by two of Mashni's other owned entities, sought judicial review of the Corps’ letter in this court. Finish Line Foundation v. U.S. Army Corps of Engineers, No. 2:18-cv-1727-DCN. On October 18, 2018, the court granted the Corps’ motion to dismiss, finding that the plaintiffs there failed to state a viable claim under the APA because the Corps’ letter did not constitute a "final agency action." Id., ECF No. 17. On August 17, 2018, as a result of the Corps’ referral of its CWA investigation to the U.S. Attorney's Office, the United States filed a CWA enforcement action against Mashni and eight of his affiliated companies, including Kiawah River Farms, LLC and KRF XSL, LLC, United States v. Mashni, No. 2:18-cv-2288-DCN, 2020 WL 6875598 (the "Enforcement Action").

Plaintiffs claim that they still face uncertainty as to whether certain water on the Legareville Site falls under the umbrella of "waters of the United States," such that it is subject to CWA regulation. Plaintiffs note that they are "particularly concerned about the potential scope of CWA jurisdiction because of" the pending Enforcement Action against them. ECF No. 7 at 9. On September 14, 2020, a consultant working for plaintiffs sent a letter to the Corps requesting an approved JD for the Legareville Site. Hearing nothing after three weeks, plaintiffs’ consultant inquired about the status of his request on October 6, 2020 and provided the Corps with his own expert report, which he prepared in conjunction with the Enforcement Action. On October 13, 2020, the Corps responded, informing the consultant that he needed to fill out a formal JD request form and providing him with a copy of the 2016 RGL. ECF No. 1-2. Plaintiffs’ consultant submitted his formal JD application with the Corps on October 16, 2020. On October 27, 2020, the Corps deferred action on the application via letter. ECF No. 1-4. The Corps explained:

As you know, fourteen of the fifteen parcels listed in your JD form, and comprising the "Kiawah River Farms Property," are associated with an active [CWA] enforcement matter in the U.S. District Court for the District of South Carolina, United States v. Mashni et al., Civil Case No. 2:18-cv-02288-DCN, 2019 WL 1229788. It is my understanding that you have been identified, and continue to serve, as Defendants’ expert in the litigation, and, furthermore, that you have submitted the JD form on behalf of Kiawah River Farms, LLC and KRF XSL, LLC, both of whom are Defendants in the above referenced CWA enforcement matter.

[...]

After a preliminary review of your JD form on behalf of [plaintiffs], including its scope, the Corps believes it would be inappropriate under the circumstances of this case to issue an [approved] JD to [plaintiffs] at this time.

[...]

Deferring action on your request is also consistent with the [Corps’] need to prioritize its resources. It would not be an efficient use of the [Corps’] resources to process your request at this time, when the JD form indicates that there are no immediate plans to conduct activities requiring a permit.

Id. at 1–2.

Plaintiffs now challenge the Corps’ decision declining to issue an approved JD at this time. On December 7, 2020, plaintiffs filed this action seeking judicial review and injunctive relief pursuant to the APA and alternatively seeking a writ of mandamus pursuant to the All Writs Act, 28 U.S.C. § 1651. ECF No. 1, Compl. Specifically, plaintiffs bring four claims: (1) "Violation of APA – Arbitrary and Capricious Denial of Approved JD," (2) "Violation of APA – Unreasonable Delay in Processing Request for Approved JD," (3) "Violation of the APA – Unlawful Withholding of Agency Action," and (4) "Mandamus." Id. Defendants filed a motion to dismiss on February 12, 2021. ECF No. 6. Plaintiffs responded in opposition on February 26, 2021, ECF No. 7, and defendants replied on March 10, 2021, ECF No. 11. The court held a hearing on the matter on April 15, 2021. As such, the motion is ripe for review.

II. STANDARD

A...