Ripplin Shoals Land v. U.S. Army Corps/Engineers

• Decision Date: 17 March 2006
• Docket Number: No. 05-1289.,05-1289.
• Citation: 440 F.3d 1038
• Parties: RIPPLIN SHOALS LAND COMPANY, LLC Appellant, v. UNITED STATES ARMY CORPS OF ENGINEERS; Wally Z. Walters, Colonel, District Engineer, Little Rock District, Corps of Engineers, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1038

440 F.3d 1038

RIPPLIN SHOALS LAND COMPANY, LLC Appellant, v. UNITED STATES ARMY CORPS OF ENGINEERS; Wally Z. Walters, Colonel, District Engineer, Little Rock District, Corps of Engineers, Appellees.

No. 05-1289.

United States Court of Appeals, Eighth Circuit.

Submitted: October 10, 2005.

Filed: March 17, 2006.

G. Alan Perkins, argued, Little Rock, Arkansas, for appellant.

E. Fletcher Jackson, Asst. U.S. Atty., argued, Little Rock, Arkansas, for appellee.

Before BYE, BEAM, and SMITH, Circuit Judges.

SMITH, Circuit Judge.

Ripplin Shoals Land Company, LLC ("RSLC") brought suit against the United States Army Corps of Engineers ("the Corps"), requesting declaratory and injunctive relief. The district court dismissed RSLC's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), stating that its prior orders in the separate but somewhat related case of Arkansas Nature Alliance, Inc. v. United States Army Corps of Engineers, No. 02-00037, 2002 WL 32897558 (E.D. Ark. filed Apr. 9, 2002), had preclusive effect and barred the instant action. We reverse and remand for further proceedings.¹

I. Facts

We accept as true all facts alleged in the complaint. RSLC, the developer of Landers Island on the White River, desired improved access to enable development of the island for recreation and vacation homes. RSLC applied to the Corps for a permit to add to an already existing low-water bridge. The Corps issued a Letter of Permission ("LOP") to allow the proposed changes. After receiving the LOP, RSLC constructed the improved low-water bridge and began developing a 49-lot subdivision on Landers Island. Thereafter, an environmental group, the Arkansas Nature Alliance, sued the Corps, challenging the LOP issued to RSLC, claiming a violation of the National Environmental Policy Act ("NEPA"). Arkansas Nature Alliance, Inc. v. United States Army Corps of Engineers, No. 02-00037, 2002 WL 32897558 (E.D. Ark. filed Apr. 9, 2002). RSLC moved to intervene. The district court allowed RSLC to intervene, as the developers, for remedial issues and to participate in all further proceedings in which they had an interest.

In Arkansas Nature Alliance, the district court found that the Corps' issuance of the LOP to modify the existing low-water bridge was not reasonable and ordered the Corps to revoke it. The district court ordered the Corps to "address the original application under the full permit process regulation and NEPA regulation, which requires the preparation of the proper environmental documents ...." The district court also directed that the bridge be returned to its original dimensions. As intervenors, RSLC filed a motion for clarification, asking whether an Environmental Impact Statement ("EIS") was necessary in the permitting process. The district court entered an order specifically stating that the permitting process used by the Corps was to include an EIS.

Rather than continue with its plans, RSLC decided to withdraw its application to improve the already existing low-water bridge, which was the subject of the Arkansas Nature Alliance litigation. Instead, RSLC submitted a new application that described an entirely new span bridge design. RSLC asked the Corps to authorize the span bridge under the Nationwide Permit Process ("NWP").² Thereafter, RSLC removed the improvements to the existing low-water bridge and returned the structure to its original low-water dimensions.

RSLC submitted a new permit application to the Corps, requesting approval for construction of a span bridge pursuant to Nationwide Permit 14 for Linear Transportation Crossings ("NWP14"). Before processing RSLC's new span bridge application, the Corps sought relief under Fed. R.Civ.P. 60(b)(5) from the order in the Arkansas Nature Alliance case, which required an EIS for the prior low-water bridge modifications. The district court denied the Corps' motion.

Relying on the district court's order regarding the Corps' Rule 60(b)(5) motion, the Corps advised RSLC that a Nationwide Permit could not be issued and that the project would require a full public interest review, including an EIS to be prepared by a third party contractor selected by the Corps at RSLC's expense. Specifically, the Corps stated "[a]s directed by the court's order, your request for a span bridge to Lander's Island cannot be issued through the Corps of Engineer's Nationwide Permit Program." The Corps instructed RSLC that it had 15 days to respond to these requirements or its application would be withdrawn.

RSLC objected to the Corps' approach, arguing that the Corps' regulations require a review of the span bridge application for eligibility under NWP 14 apart from any prior consideration of the low-water bridge application. Further, RSLC stated that because the Corps had not made a final decision on the span bridge and, thus, had no administrative record, the Arkansas Nature Alliance court had no jurisdiction to make decisions regarding the span bridge application. The Corps then notified RSLC of its final agency action on the pending span bridge application, stating "your application has been officially withdrawn and the permitting evaluation process has been closed." RSLC filed the instant action to compel the Corps to proceed on its application for a span bridge under the NWP. The Corps filed a motion to dismiss pursuant to Rule 12(b)(6). The district court granted the Corps' motion, stating that its prior orders in the Arkansas Nature Alliance case barred the instant action under the doctrines of res judicata and collateral estoppel.

II. Discussion

RSLC contends that the district court erred in dismissing its complaint pursuant to Rule 12(b)(6), arguing that the district court's prior decisions in Arkansas Nature Alliance have no preclusive effect on RSLC's right to have its new permit application for a different project reviewed for verification under the NWP. RSLC maintains that the Arkansas Nature Alliance court had no jurisdiction to rule on future permit decisions by the Corps based upon new applications.

Moving to the merits of the case, RSLC argues that, as a matter of law, the Corps must review each incoming application for NWP verification, and in refusing to do so in this case, the Corps violated its own regulations. RSLC avers that the Corps' argument that it has discretion to deny any Nationwide Permit application is disingenuous. The district court relied on the Corps' discretionary argument, claiming that even if it were to reach the merits of RSLC's claims, the conclusion would be the same. However, the Corps admitted that it was coerced by the district court to adopt its advisory opinion rather than rely on the information in the administrative record. In fact, in the Corps' letter to RSLC regarding its decision on the span bridge, the Corps stated that "[a]s directed by the court's order, your request for a span bridge cannot be issued through the Corps of Engineer's Nationwide Permit Program." This statement illustrates that the Corps never deferred to the discretion of the District Engineer. For these reasons, RSLC urges this court to reverse the judgment of the district court and remand this case for further proceedings.

The Corps responds by stating that res judicata and collateral estoppel preclude RSLC from re-litigating the requirements necessary for approval of a Corps permit regarding a bridge to Landers Island. Moreover, the Corps claims that the issuance of a Nationwide Permit is at the discretion of the District Engineer, and he is authorized to set the same requirements as imposed by the district court. In the alternative, the Corps maintains that even if res judicata and collateral estoppel did not apply, this lawsuit is unfounded.

The Corps states that permit applicants are not entitled to a Nationwide Permit as a matter of right. As long as there is reason to believe that there is public dissent to the proposed project, the District Engineer has the discretion to require the applicant to go through the individual permit application process.³ Further, the Corps argues that it can rely on the prior order of the district court in exercising its discretion on whether a Nationwide Permit is appropriate. The Corps claims that in this case, as was shown from the earlier lawsuit, there was public dissent against the project, not only because of the form of the low-water bridge, but also because of the cumulative impacts of constructing a subdivision on a low-lying island in the middle of the White River. These concerns did not change between the end of the original lawsuit and the time RSLC filed its application for a span bridge. The Corps posits that regardless of what the district court said in its Rule 60(b) ruling, the District Engineer would have been negligent to ignore the possible cumulative impacts and public opinion against the bridge. In sum, the Corps urges this court to affirm the district court's dismissal of RSLC's action based on res judicata and collateral estoppel.

We review de novo the district court's dismissal for failure to state a claim pursuant to Rule 12(b)(6), taking all facts as alleged in the complaint as true. Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934, 937 (8th Cir.2005); Ferris, Baker Watts, Inc. v. Ernst & Young, LLP, 395 F.3d 851, 853 (8th Cir.2005). Both res judicata and collateral estoppel have the impact of foreclosing future litigation based upon factors found to exist in past but related litigation. Upon review, we find that neither the doctrines of res judicata nor collateral estoppel preclude RSLC from pursuing its complaint against the Corps.

A. Res Judicata

RSLC contends that res judicata does not bar its claim because its claim did not exist when the first suit was litigated. RSLC submits that the Corps could not have denied an application that did not exist; thus, res judicata, or claim preclusion, cannot apply. Further, there were no claims presented in the previous...