Tabb Lakes, Ltd. v. US, Civ. A. No. 87-635-N.

• Decision Date: 07 November 1988
• Docket Number: Civ. A. No. 87-635-N.
• Parties: TABB LAKES, LTD., a Virginia corporation, Plaintiff, v. UNITED STATES of America; Lee M. Thomas, Administrator, United States Environmental Protection Agency, Region III; Honorable John O. Marsh, Jr., Secretary of the Army; Lt. General E. R. Heiberg, III, Chief, Army Corps of Engineers: Brigadier General Charles E. Williams, North Atlantic Division Engineer; Col. J.J. Thomas, Norfolk District Engineer, U.S. Army Corps of Engineers, Defendants.
• Court: U.S. District Court — Eastern District of Virginia

715 F. Supp. 726

TABB LAKES, LTD., a Virginia corporation, Plaintiff, v. UNITED STATES of America; Lee M. Thomas, Administrator, United States Environmental Protection Agency, Region III; Honorable John O. Marsh, Jr., Secretary of the Army; Lt. General E. R. Heiberg, III, Chief, Army Corps of Engineers: Brigadier General Charles E. Williams, North Atlantic Division Engineer; Col. J.J. Thomas, Norfolk District Engineer, U.S. Army Corps of Engineers, Defendants.

Civ. A. No. 87-635-N.

United States District Court, E.D. Virginia, Norfolk Division.

November 7, 1988.

Richard R. Nageotte, Douglas R. Hansen, Nageotte and Borinsky, P.C., Woodbridge, Va., for plaintiff.

Michael D. Rowe, U.S. Dept. of Justice, Land and Natural Resources Div., Environmental Defense Section, Washington, D.C., Cynthia R. Martin, Atty. Advisor, U.S. Army Corps of Engineers, Norfolk, Va., Bruce E. Byrd, Asst. Regional Counsel, U.S. Environmental Protection Agency, Region III, Philadelphia, Pa., John F. Kane, Asst. U.S. Atty., Walter E. Hoffman, Norfolk, Va., for defendants.

MEMORANDUM OPINION

MacKENZIE, Senior District Judge.

This matter is before the Court on the plaintiff's and defendants' cross Motions for Summary Judgment. The issue is whether the Army Corps of Engineers (Corps) has jurisdiction to require a permit in this case.

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Originally plaintiff, Tabb Lakes, Ltd. (Tabb Lakes), sought a permit under section 404 of the Clean Water Act (CWA), in October, 1986, requesting permission to fill portions of its property for development purposes. 33 U.S.C. § 1344. While a decision was pending, Tabb Lakes withdrew its permit application in August 1987 on grounds that it had determined that the property in question was not subject to the Corps' jurisdiction. After Tabb Lakes had commenced this declaratory judgment action, the Corps, in July, 1988, completed its Quantitative Wetlands Jurisdictional Determination which it alleges is the basis for the Corps' asserted jurisdiction over Tabb Lakes' property.

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Tabb Lakes filed this complaint on September 21, 1987 seeking a declaratory judgment that its property did not fall within the jurisdictional parameters of section 404 of the CWA. In January 1988 the United States filed its Motion to Dismiss or for Partial Summary Judgment and in March and May 1988 Tabb Lakes filed its own Motion to Dismiss and for Summary Judgment (Amended).

In its Motion for Summary Judgment, Tabb Lakes challenges, among other things, the failure of the Corps to comply with proper notice and comment procedures under the Administrative Procedures Act (APA) before it issued a memorandum, in effect, rule making, which was subsequently the basis for making the jurisdictional determination in this case, claiming that Corps' jurisdiction stems from the regulations implementing section 404 of the CWA. 33 C.F.R. §§ 320, et seq.

The specific regulations set out at 33 C.F.R. § 328.3(a)(3) provide the definition of waters subject to Corps regulation:

"For the purpose of this regulation these terms are defined as follows:

(a) The term `waters of the United States' means

(1) N/A

(2) N/A

(3) All other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce including any such waters;

(i) Which are or could be used by interstate or foreign travelers for recreational or other purposes; or

(ii) From which fish or shellfish are or could be taken and sold in interstate or foreign commerce; or

(iii) Which are used or could be used for industrial purposes by industries in interstate commerce; ..."

On November 8, 1985, Brigadier General Patrick J. Kelly, the Deputy Director of Civil Works for the U.S. Army Corps of Engineers in Washington, D.C., issued a memorandum to all district Corps offices listing the seven 7 standards which would indicate a sufficient interstate commerce connection to warrant exercise of jurisdiction by the Corps over isolated waters and wetlands. Specifically, number 5 is the indicator relied on by the Corps in this case and it reads, "Waters which are used or could be used as habitat by other migratory birds which cross state lines."

Before a rule is promulgated or amended, section 553 of the APA requires agencies to afford notice of such impending action and to provide an opportunity for public comment. However, an exemption applies:

"(A) to interpretative rules, general statements of policy, or rules of agency organization, or procedure, or practice; ..." 5 U.S.C. § 553(b)(3)(A).

The threshold issue here is whether Brigadier General Kelly's November 8, 1985 Memorandum falls within this exception, which exception, according to Batterton v. Marshall, 648 F.2d 694, 703 (D.C.Cir.1980), is a "narrow one" and to be "only reluctantly countenanced." The United States urges that these are merely interpretive rule changes, or at most policy statements.

The APA's § 553 notice and comment provisions seek to insure public participation and fairness to affected parties where agencies hold governmental authority, and to provide for an input of all relevant facts and alternatives. American Hospital Association v. Bowen, 640 F.Supp. 453 (D.D.C.1986), rev'd, 834 F.2d 1037, 1044 (D.C.Cir.1987). Although the distinction between a substantive and interpretive rule is a gray area, the Courts generally differentiate cases "in which an agency is merely explicating Congress' desires from those cases in which the agency is adding substantive content of its own." Id. at 1045.

"Substantive rules are ones which grant rights, impose obligations, or produce other significant effects on public interests, or which effect a change in existing law or policy. Id. Interpretive rules, by contrast, are those which merely clarify or explain existing law or regulations, are essentially ... instructional, and do not have the full force and effect of a substantive rule but are in the form of an explanation of particular terms." Id. The task is very fact specific, however the Court in American Hospital Association, 834 F.2d at 1046, noted that a typical example of a substantive rule was a parole board's use of guidelines that established factors for determining parole eligibility and were thus critical to the ultimate parole decision. Id. (citing Pickus v. United States Board of Parole, 507 F.2d 1107, 1112-13 (D.C.Cir.1974)).

Beyond any doubt, the memorandum produced a ...