Permapost Prods., Inc. v. McHugh, Civil Action No. 13–1736ESH

Citation55 F.Supp.3d 14
Decision Date07 July 2014
Docket NumberCivil Action No. 13–1736ESH
PartiesPermapost Products, Inc., et al., Plaintiffs, v. John M. McHugh, Secretary of the Army, et al., Defendant.
CourtUnited States District Courts. United States District Court (Columbia)

Mark C. Rutzick, Mark C. Rutzick, Incorporated, Oak Hill, VA, for Plaintiffs.

Mark Arthur Brown, Sr., Michele L. Walter, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION AND ORDER

ELLEN SEGAL HUVELLE, United States District Judge

Plaintiffs Permapost Products, Inc., Treated Wood Council, J.H. Baxter & Co., Conrad Forest Products, Inc., Western Wood Preservers Institute, Western Wood Structures, Inc., Railway Tie Association, Southern Pressure Treaters' Association, and Creosote Council (plaintiffs) have sued John M. McHugh in his official capacity as the Secretary of the Army, the United States Army Corps of Engineers (“Corps”), Penny S. Pritzker in her official capacity as Secretary of Commerce, and the National Marine Fisheries Service (“NMFS”). Plaintiffs challenge defendants' approval of two regional conditions to nationwide permits under the Clean Water Act, as well as the issuance of certain operating procedures for activities that are regulated by that Act. Before the Court is defendants' motion to dismiss plaintiffs' complaint under Fed.R.Civ.P. 12(b)(1) and (b)(6). (Feb. 10, 2014 [ Dkt. No. 18–1] (Mot.).)1 For the foregoing reasons, the Court will grant defendants' motion in part.

FACTUAL BACKGROUND
I. REGIONAL CONDITIONS

The Clean Water Act, 33 U.S.C. § 1251 et seq . (“CWA”), prohibits, inter alia, the discharge of dredged or fill materials into navigable waters unless authorized by an individual or general section 404 permit issued by the Army Corps of Engineers. See id. §§ 1311(a), 1344(a), (e). The issuance of an individual section 404 permit requires a case-by-case analysis. See id. § 1344(a). In contrast, general permits may be issued on a state, regional, or nationwide basis for categories of activities that “will cause only minimal adverse environmental effects when performed separately, and will have only minimal cumulative adverse effect on the environment.” Id. § 1344(e)(1); 33 C.F.R. § 322.2(f)(1). Any party may engage in an activity within the scope of a general permit. Nationwide general permits may be conditioned or restricted by District and Division Engineers within the Corps, resulting in what are known as regional conditions. 33 C.F.R. § 330.1(d).

On February 16, 2011, the Corps proposed to re-issue forty-eight existing nationwide permits and two new nationwide permits for the five-year period from 2012 through 2017. (See Mot. at 7 (citing Proposal To Reissue and Modify Nationwide Permits, 76 Fed.Reg. 9174–01, 9175 (Feb. 16, 2011) ); Complaint, Nov. 4, 2013 [Dkt. No. 1] (“Compl.”) ¶ 19.) Two district offices of the Corps then announced proposed regional conditions for those nationwide permits: (1) on February 25, 2011, the Portland District proposed a regional condition that would prohibit nationwide permittees from using “wood products treated with biologically harmful leachable chemical components,” including various wood preservatives, “to come in contact with waters or wetlands” in the State of Oregon (Compl.¶ 20); and (2) on March 4, 2011, the Alaska District proposed a regional condition that would prohibit nationwide permittees from using products treated with creosote and pentachlorophenol in certain waters in Alaska (id. ¶ 21) (collectively, the “Regional Conditions”). The nationwide permits were published on February 21, 2012. (Id. ¶ 22 (citing Reissuance of Nationwide Permits, 77 Fed.Reg. 10184–01 (Feb. 21, 2012) ).) The Oregon Regional Condition was approved on March 16, 2012 (id. ¶ 23), and the Alaska Regional Condition was approved on March 19, 2012 (id. ¶ 24).

Plaintiffs allege that the Regional Conditions were issued in violation of the Administrative Procedure Act, 5 U.S.C. § 500 et seq. (“APA”) (Claims 1–3, 7–8), Corps regulations (Claim 4), the ESA (Claim 5), and the Regulatory Flexibility Act, 6 U.S.C. § 601 et seq . (“RFA”) (Claim 6). (Compl.¶¶ 34–74.)

II. SLOPES PROCEDURES

The Endangered Species Act, 16 U.S.C. §§ 1531 –1544 (“ESA”), provides certain protections for species listed as “threatened” or “endangered.” Id. § 1533(a). As relevant to this case, the Act provides that federal agencies must ensure that any proposed agency action will not “jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [that species's critical habitat].” Id. § 1536(a)(2). The determination of what constitutes a “critical habitat” is to be made by the Secretary of the Interior or the Secretary of Commerce, who have delegated that responsibility to the U.S. Fish and Wildlife Service (“FWS”) and the NMFS, respectively.Id. § 1532(15). Thus, federal agencies must consult with the FWS or NMFS whenever an agency action “may affect” an endangered or threatened species. 50 C.F.R. § 402.14(a). Formal consultation with those entities results in their issuance of a “biological opinion,” assessing whether the species or its habitat is likely to be jeopardized, and if so, identifying any “reasonable and prudent alternatives” that may exist to avoid that jeopardy. Id. § 402.14(h)(3). Of particular importance to this case, consultation is required when a party seeks an individual section 404 permit from the Corps, but is not necessarily required when a party operates pursuant to a nationwide permit. (Compl.¶ 32.)

In order to streamline its ESA consultation process, the Corps has adopted several Standard Local Operating Procedures for Endangered Species, known as “SLOPES” procedures, that set out design criteria for categories of recurring activities. The Corps then consults with the NMFS to receive a biological opinion on whether the use of those design criteria would jeopardize the existence or critical habitats of any threatened or endangered species. (Compl.¶¶ 26–28.) If the NMFS agrees that a set of SLOPES procedures complies with the ESA, then the Corps may issue individual section 404 permits for any proposed project that complies with those design criteria without seeking further consultation from the NMFS.

On November 2, 2011, the Corps consulted with NMFS on a new set of procedures, known as SLOPES IV, which addressed construction or maintenance of certain in-water and over-water structures in Oregon. (Compl.¶¶ 29–30.) One of the design criteria in SLOPES IV provided that treated wood could not be used as part of an in-water or over-water structure in Oregon. (Id. ¶ 30.) On April 5, 2012, the NMFS issued a Biological Opinion that those design criteria would not jeopardize any endangered or threatened species or their critical habitats, and therefore, projects that satisfy those design criteria would comply with the ESA and not require individual consultation. (Id. ¶ 29.) If, however, a proposed project did not comply with the design criteria in the SLOPES IV procedures, that would not prevent the issuance of a permit for that project: the Corps would simply need to request additional consultation from the NMFS. (See id. ¶ 32.)

Plaintiffs allege that the SLOPES IV procedures were issued in violation of mandatory procedural requirements in the APA and the ESA (Claims 9 and 10) and the RFA (Claim 11). (Compl.¶¶ 75–89.)

III. WESTERN WOOD

In July 2012, the five associational plaintiffs in this case sued three of the four defendants who are the subject of this suit, raising substantially the same claims against the Regional Conditions and SLOPES IV Biological Opinion as are raised here. W. Wood Preservers Inst. v. McHugh (Western Wood I ), 925 F.Supp.2d 63, 67–69 (D.D.C.2013). Defendants moved to dismiss plaintiffs' complaint for lack of standing under Fed.R.Civ.P. 12(b)(1) and for failure to state a claim under Rule 12(b)(6). This Court granted that motion. See id. at 77. With respect to standing, the Court first found that the plaintiffs could not establish associational standing because they had not identified a single member firm that had suffered the alleged economic harm. Id. at 69–70. Furthermore, the associations themselves had not sufficiently alleged any environmental or procedural harm. Id. at 70–73. Additionally, the Court concluded that the associational plaintiffs had failed to state a claim under the RFA and ESA. Id. at 75–77.

Plaintiffs filed a motion for leave to file an amended complaint or, in the alternative, for reconsideration. See W. Wood Preservers Inst. v. McHugh (Western Wood II ), 292 F.R.D. 145, 146 (D.D.C.2013). The Court granted plaintiffs' motion for reconsideration in part, agreeing that plaintiffs had stated a claim under the ESA. Id. at 149–50. However, the Court did not reconsider the issue of plaintiffs' standing, and the case remained dismissed without prejudice. Id. at 147–49.

In an effort to correct the jurisdictional inadequacies found by the Court in Western Wood, the associational plaintiffs are now joined by four member-companies that either manufacture pressure-treated wood (Permapost, Baxter, and Conrad) or design, sell, and install engineered wood systems that utilize treated wood products (Western Wood Structures). (Compl.¶¶ 4, 6–7, 10.)

ANALYSIS

Defendants have again filed a motion to dismiss plaintiffs' complaint, arguing that plaintiffs lack Article III standing to bring any of their claims and that they lack prudential standing to bring certain of their claims.

I. ARTICLE III STANDING

To establish constitutional standing, plaintiffs must demonstrate (1) that they have suffered an injury-in-fact, (2) that the injury is fairly traceable to the defendant's challenged conduct, and (3) that the injury is likely to be redressed by a favorable decision. See NB ex rel. Peacock v. Dist. of Columbia, 682 F.3d 77, 81 (D.C.Cir.2012) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).

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