Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs, Civil No. 13–2262 (JRT/LIB)

• Decision Date: 07 September 2017
• Docket Number: Civil No. 13–2262 (JRT/LIB)
• Citation: 279 F.Supp.3d 846
• Parties: RICHLAND/WILKIN JOINT POWERS AUTHORITY, Plaintiff, and Minnesota Department of Natural Resources, Intervenor–Plaintiff, v. UNITED STATES ARMY CORPS OF ENGINEERS, Robert Speer, Assistant Secretary of the Army for Civil Works, and Col. Sam Calkins, Defendants, and Fargo–Moorhead Flood Diversion Board of Authority and City of Oxbow, Intervenor–Defendants.
• Court: U.S. District Court — District of Minnesota

279 F.Supp.3d 846

RICHLAND/WILKIN JOINT POWERS AUTHORITY, Plaintiff,andMinnesota Department of Natural Resources, Intervenor–Plaintiff,

v. UNITED STATES ARMY CORPS OF ENGINEERS, Robert Speer, Assistant Secretary of the Army for Civil Works, and Col. Sam Calkins, Defendants,andFargo–Moorhead Flood Diversion Board of Authority and City of Oxbow, Intervenor–Defendants.

Civil No. 13–2262 (JRT/LIB)

United States District Court, D. Minnesota.

Signed September 7, 2017

Gerald W. Von Korff and Anna K.B. Finstrom, RINKE NOONAN, P.O. Box 1497, Saint Cloud, MN 56302, for plaintiff.

Colin Patrick O'Donovan and Max H. Kieley, Assistant Attorneys General, MINNESOTA ATTORNEY GENERAL'S OFFICE, 445 Minnesota Street, Suite 900, Saint Paul, MN 55101, for intervenor-plaintiff.

Devon Lehman McCune, UNITED STATES DEPARTMENT OF JUSTICE, 999 18^th Street, South Terrace, Suite 370, Denver, CO 80202, for defendants.

Robert E. Cattanach, Michael R. Drysdale, and Theresa M. Bevilacqua, DORSEY & WHITNEY LLP, 50 South Sixth Street, Suite 1500, Minneapolis, MN 55402, for the Fargo–Moorhead Flood Diversion Board of Authority.

MEMORANDUM OPINION AND ORDER

JOHN R. TUNHEIM, Chief Judge

For as long as people have lived and worked in the Red River Valley that borders the States of North Dakota and Minnesota, the Red River of the North ("Red River") has caused significant flooding problems for local communities. The parties to this case and the Court all recognize the need for permanent flood protection for the individuals residing in the Red River Valley, especially the growing Fargo–Moorhead community. In addition to the serious flood-related issues, this case presents difficult and complex questions regarding a state's ability to regulate border projects on major waterways when non–Federal actors undertake significant portions of a federally-approved project.

Here, Plaintiff Richland/Wilkin Joint Powers Authority ("JPA") and Intervenor–Plaintiff Minnesota Department of Natural Resources (the "DNR") allege that Defendant U.S. Army Corps of Engineers (the "Corps")¹ and Defendant–Intervenor Fargo–Moorhead Flood Diversion Board of Authority (the "Diversion Authority") violated state and federal laws by signing a project partnership agreement and beginning construction on a permanent flood protection project without the Diversion Authority obtaining requisite permits from the State of Minnesota. The DNR and JPA seek a preliminary injunction to prevent the Corps and the Diversion Authority from continuing construction until the Diversion Authority obtains the allegedly requisite permits.

In response, both the Corps and the Diversion Authority argue that a preliminary injunction is inappropriate. The Corps and the Diversion Authority further move to dismiss certain claims under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. After the hearing on these motions, JPA filed a motion for sanctions under Rule 37(c)(1) of the Federal Rules of Civil Procedure, seeking postponement of the Court's ruling on the pending motions until the record is fully supplemented and supplemental briefing is completed.

The Court will grant the Diversion Authority's limited motion to dismiss, grant in part and deny in part the Corps' motion to dismiss, grant the DNR's and JPA's motions for a preliminary injunction, and deny JPA's sanctions motion.

BACKGROUND

I. THE PARTIES

JPA is a joint authority created by Richland County, North Dakota, and Wilkin County, Minnesota, pursuant to statutes in each state allowing their respective government units to jointly and cooperatively exercise power with other government units, even those in other states. (Pl. Fourth Am. Compl. ("JPA Compl.") ¶¶ 2–5, April 3, 2017, Docket No. 419);² see also Minn. Stat. § 471.59 ("Joint Exercise Powers"); N.D. Cent. Code § 54–40.3 ("Joint Powers Agreements"). Richland and Wilkin Counties formed JPA to protect their citizens and their citizens' property from flooding. (JPA Compl. ¶ 2.)

The DNR is a statutory agency of the State of Minnesota responsible for administering and enforcing Minnesota statutes and rules related to the state's natural resources, including its navigable waters. (Compl. by the Minn. DNR ("DNR Compl.") ¶ 6, Mar. 24, 2017, Docket No. 411.)

The Corps is a federal agency involved in the development of the permanent flood protection project at issue in this case. (Id.¶ 8; JPA Compl. ¶ 8.) Robert Speer, Assistant Secretary of the Army for Civil Works, and Colonel Sam Calkins are employees of the Corps. (DNR Compl. ¶¶ 9–11; JPA Compl. ¶¶ 7, 9–10.)

The Diversion Authority is also a joint authority formed pursuant to Minnesota's and North Dakota's joint powers statutes. (DNR Compl. ¶ 12; JPA Compl. ¶ 11.) The Diversion Authority was formed by the following government units: the City of Fargo, North Dakota; Cass County, North Dakota; Cass County Joint Water Resources District, North Dakota; the City of Moorhead, Minnesota; Clay County, Minnesota; and the Buffalo–Red River Watershed District, Minnesota. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs (Dist. Court Order II) , 176 F.Supp.3d 839, 842 (D. Minn. 2016). The Corps designated the Diversion Authority as the non–Federal sponsor of the permanent flood protection project at issue in this case, meaning the Diversion Authority is the local entity tasked with developing and managing the project. Id.

II. FACTUAL BACKGROUND

The Red River originates at the confluence of two tributaries, demarking the Minnesota–North Dakota border. Id. The broader, flat valley of the Red River was formed over thousands of years as the lakebed of Glacial Lake Agassiz which receded slowly as the ice melted to the north. Through this flat valley, the Red River flows northward, eventually emptying into Lake Winnipeg in Canada. Id. For as long as humans have lived along the Red River, the river has flooded. Id. In 2008, the Corps, along with the cities of Fargo, North Dakota, and Moorhead, Minnesota, began a feasibility study to examine "alternatives ... to reduce flood risk in the entire Fargo–Moorhead Metropolitan area." Id. After a major flood in 2009, the project gained momentum and eventually the Fargo–Moorhead Flood Risk Project (the "Project") was developed. Id. ; (DNR Compl. ¶ 57).

As required by federal law, the Corps conducted an environmental review of the Project. (DNR Compl. ¶ 71.) In May 2010, the Corps published a Draft Environmental Impact Statement ("EIS"). Dist. Court Order II , 176 F.Supp.3d at 843–44. The Draft EIS discussed how the Corps had studied the benefits and costs of several potential options for flood control in the area. Id. In a later Supplemental Draft EIS, the Corps continued to refine its plans, and to publish and describe the varying drawbacks and advantages of specific plans. Id. at 844. During this process, the DNR submitted multiple comment letters to the Corps regarding its concerns with the Project. (DNR Compl. ¶ 72.) The Corps acknowledged the DNR's concerns during the process and "ensured the DNR that the Project required compliance with obligations imposed by Minnesota's statutes and regulations." (Id. ¶ 73.)

In July 2011 the Corps issued its Final Feasibility Report and Environmental Impact Statement ("FFREIS") regarding the Project. (Id. ¶¶ 19, 71.) In section 3.14.4 for the FFREIS, the Corps acknowledged that

[a]s part of implementing this project, the non-federal sponsors [were] required to obtain a [DNR] protected waters permit .... In order to obtain the necessary permits from the State of Minnesota, the non-federal sponsors [were required to] complete the scoping and review process required by the Minnesota Environmental Policy Act.... The construction contractors [were] responsible for acquiring all local licenses/permits required to comply with state and municipal laws, codes and regulations.

(DNR Compl. ¶ 74; accord JPA Compl. ¶ 34; Notice of Submission of Exs., Ex. F at 109, Feb. 12, 2015, Docket No. 162.)

The Corps ultimately selected the "locally preferred plan" ("LPP") as its proposed action. Dist. Court Order II , 176 F.Supp.3d at 844. In December 2011, the Corps issued its Chief's Report recommending the Project to Congress. (DNR Compl. ¶ 75; JPA Compl. ¶ 35; Notice of Submission of Exs., Ex. I ("Chief's Report").) The Chief's Report endorsed the FFREIS and noted in several locations that the Project would comply with "Federal and State laws and regulations." (DNR Compl. ¶ 75; JPA Compl. ¶ 35 n.2; Chief's Report at 4, 6–7.)

The Assistant Secretary of the Army signed a Record of Decision ("ROD") and forwarded the Corps' relevant reports and studies to Congress in April 2012. Dist. Court Order II , 176 F.Supp.3d at 844. In 2014 Congress passed and the President signed the Water Resources Reform and Development Act of 2014 ("WRRDA–2014"), authorizing the Project. Id. at 845 (citing Pub. L. No. 113–121, § 7002(2)(4), 128 Stat. 1193 (2014)).

In February 2016 the Diversion Authority submitted its application for a Dam Safety and Public Waters Work Permit ("Permit") to the DNR. (DNR Compl. ¶ 82.) In July 2016 the Corps and the Diversion Authority signed a project partnership agreement ("PPA"), "which set forth the rights and obligations of the Corps and the Diversion Authority pertaining to Project construction and operation." (Id. ¶¶ 26, 91; JPA Compl. ¶ 46; Decl. of Michael Drysdale in Supp. of Mot. for Summ. J., Ex. G ("PPA"), Dec. 1, 2016, Docket No. 354.) The PPA divided construction responsibilities into two categories—"Federal Work" and "Non–Federal Work"—and primarily limited the "Non–Federal Work" to construction occurring on the North Dakota side of the Red River. (DNR Compl. ¶ 93; PPA at 2.) The Corps took responsibility for most of the work to occur in Minnesota, excluding certain "flood risk reduction projects undertaken in the F–M Metro Area." (DNR Compl. ¶ 93.) The PPA further provided that the Diversion Authority "will operate, maintain, repair, rehabilitate, and replace the Project" a...