Taylor v. District Engineer, U.S. Army Corps of Engineers, Jacksonville, Fla., 76-1922

• Decision Date: 17 February 1978
• Docket Number: No. 76-1922,76-1922
• Citation: 567 F.2d 1332
• Parties: , 8 Envtl. L. Rep. 20,194 Henry H. TAYLOR, Jr., as Trustee, owner of a 34-acre parcel, and Arthur B. Lujan, and Betty L. Lujan, as owners of adjacent 11 and 4-acre parcels, Plaintiffs-Appellants, v. DISTRICT ENGINEER, U. S. ARMY CORPS OF ENGINEERS, JACKSONVILLE, FLORIDA, an agency of the United States of America, Defendant-Appellee. UNITED STATES of America, Plaintiff-Appellee, v. Arthur B. LUJAN et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1332

567 F.2d 1332

11 ERC 1219, 8 Envtl. L. Rep. 20,194

Henry H. TAYLOR, Jr., as Trustee, owner of a 34-acre parcel,

and Arthur B. Lujan, and Betty L. Lujan, as owners

of adjacent 11 and 4-acre parcels, Plaintiffs-Appellants, v. DISTRICT ENGINEER, U. S. ARMY CORPS OF ENGINEERS,

JACKSONVILLE, FLORIDA, an agency of the United

States of America, Defendant-Appellee.

UNITED STATES of America, Plaintiff-Appellee, v. Arthur B. LUJAN et al., Defendants-Appellants.

No. 76-1922.

United States Court of Appeals Fifth Circuit.

Feb. 17, 1978.

R. Bruce Wallace, Jr., Robert J. Paterno, Miami, Fla., for plaintiffs-appellants.

Jack V. Eskenazi, U. S. Atty., Miami, Fla., Peter R. Taft, Asst. Atty. Gen., Carl Strass, Atty., Maryann Walsh, Atty., Dept. of Justice, Washington, D. C., for defendant-appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before GOLDBERG, AINSWORTH and FAY, Circuit Judges.

FAY, Circuit Judge:

The appeal before us today centers around the appellants' heretofore unsuccessful challenge to an administrative determination of the United States Army Corps of Engineers. Most of the issues raised by the appellants are without merit and will not be discussed. The appellants do, however, point out two irregularities in the processing and determination of their permit application, and, because of these irregularities, reversal of the district court order is mandated.

I. FACTS

The procedural and factual history of this case is long and complicated, but it need not be related in detail in order to understand properly the points to be discussed in this opinion. In 1970, the appellants, Arthur B. Lujan, Betty L. Lujan, and Henry H. Taylor, bought a thirty-four acre parcel of land which included Enchanted Island and its surrounding submerged lands. Enchanted Island is a three acre mangrove island in Florida Bay to the east of Key Haven and north of U.S. Highway 1. In late December 1972, Arthur Lujan began the process of either originally building an access road to the western tip of the island from U.S. Highway 1 (as the government contends), or repairing a previously constructed access road (as Lujan argues). Since this work was being performed without a federal permit, the Department of the Army on January 4, 1973, advised Lujan that he should cease and desist all unauthorized work in navigable waters or else subject himself to potential civil and criminal liability. ¹ Lujan stopped all further operations, but filed suit to enjoin any further interference with the use and enjoyment of Enchanted Island. A hearing was held on Lujan's motion for temporary injunction, but no ruling was made since Lujan agreed to submit an after-the-fact permit application to the Corps of Engineers.

On May 30, 1973, Lujan submitted a permit application with a supporting environmental impact study. The application sought the "restoration of pre-existing land and construction of three (3) culverts." The application also sought approval for the removal of an eastern access road.

In accordance with the regulations of the Corps of Engineers, public notice of the application was issued on September 7, 1973. ² As a result of public requests and responses to the public notice, a public hearing was scheduled. At that hearing, on December 5, 1973, the applicant, through his counsel, made a statement and offered exhibits. Subsequently, on June 17, 1974, the Corps of Engineers denied Lujan's permit. The Corps offered the following five reasons for denial:

1. Would be contrary to Section 301 of the Federal Water Pollution Control Act of 1972 in that you have not obtained certification from the State of Florida Department of Pollution Control;

2. Would be contrary to the Corps' policy of not issuing a Department of the Army permit when a state permit is required but has not been issued;

3. Would remove a biologically productive area from the marine ecosystem;

4. Is opposed by the Bureau of Sport Fisheries and Wildlife of the Department of Interior, the National Marine Fisheries Service of the Department of Commerce, and the Environmental Protection Agency; and

5. Is not believed to be consistent with the current public interest in protection of the natural environment as enunciated in the National Environmental Policy Act of 1969.

App. at 335.

In February, 1975, appellants again filed suit against the Corps in the United States District Court for the Southern District of Florida seeking injunctive and declaratory relief and de novo review of the Corps' permit denial. ³ The United States responded to this suit by instituting an action against the appellants for violation of the permit requirements of Section 10 of the Rivers and Harbor Act of 1899, 33 U.S.C. § 403, and the Federal Water Pollution Control Act Amendments of 1972, 33 U.S.C. § 1341 et seq. In their action, the government sought civil penalties, and an order that the unauthorized work be removed and the area restored to its pre-existing condition. These two actions were ultimately consolidated.

On the government's motion, the district court entered a partial summary judgment on September 29, 1975. The matter then proceeded to trial on the issues of the construction of the access road, liability under the Federal Water Pollution Control Act, and the Corps' denial of Lujan's after-the-fact permit.

On December 5, 1975, the district court ruled that the Corps' permit denial was neither arbitrary nor capricious. The court further ordered Lujan to remove the western access road and restore the area to the natural depth of the adjacent bottom, and to pay a $10,000.00 civil penalty for violation of the Federal Water Pollution Control Act. This appeal followed.

II. ARGUMENT

The appellant's primary attack on appeal is focused on the procedures employed by the Corps of Engineers in determining their after-the-fact permit application. The "bottom line" of their argument is that the denial of their application was wrong for one of two reasons. First, the appellants attempt to argue that the Administrative Procedure Act, 5 U.S.C. § 551 et seq., requires that the determination of this license or permit should be made in accordance with all the procedural protections accorded in § 556 of the APA. ⁴ This being the case, the appellants assert that the standard of review to be employed by the district court should be the "substantial evidence" test set forth in § 706(2)(E) of the APA rather than the "arbitrary, capricious, an abuse of discretion" test outlined in § 706(2)(A). ⁵ The second point the appellants raise is that regardless of the requirements of the APA, the Due Process Clause of the Fifth Amendment was violated by the actions and procedures of the Corps of Engineers.

A. The APA Argument

The appellants have two theories on why § 556 and the § 706(2)(E) substantial evidence test apply. One of these approaches is more unique than the other both of these approaches are wrong.

The first of the appellants' theories is one that has been traditionally advanced by litigants dealing with the Corps of Engineers, and also happens to be a theory which has been repeatedly rejected by this court. The determination of whether a reviewing court applies the substantial evidence test, and whether an applicant is entitled to a § 556 hearing are closely interrelated. Section 706(2)(E) provides that a reviewing court shall hold unlawful and set aside agency actions, findings and conclusions found to be:

unsupported by substantial evidence in a case subject to section 556 and 557 of this title. . . . (emphasis added)

Section 557 need not be discussed because it applies only if a hearing is required under § 556. ⁶ Thus, for the substantial evidence test to apply, we need only determine if § 556 is applicable.

Section 556 deals with the conduct of agency hearings. It sets forth in particular who shall preside at hearings, their powers and duties, who has the burden of proof, and the types of evidence which may or may not be received. However, subsection (a) of § 556 explains that these procedural requirements come into play only for "hearings required by section 553 or 554 of this title to be conducted in accordance with this section." Our inquiry, therefore, must now turn to whether either § 553 or § 554 requires a § 556 hearing in our type of controversy. Section 553 deals with rulemaking, and is, therefore, inapplicable. Section 554 is entitled "Adjudications." "Adjudication" is defined in § 551(7) as the "agency process for the formulation of an order." Subsection (6) of § 551 defines "order" as the:

whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing. (emphasis added)

Subsection (9) defines "licensing" to include the agency process respecting the "grant . . . denial . . . or conditioning of a license." Finally, subsection (8) defines "license" to mean "the whole or a part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption, or other form of permission."

In a manner that is no doubt less than lucid, we have attempted to show that the process of determining whether or not an applicant is entitled to a permit from the Corps of Engineers is considered "adjudication" under the APA. Section 554, entitled "Adjudications", provides for hearings to be conducted in accordance with § 556, ⁷ and the appellants contend that since a permit application is "adjudication," they were entitled to a § 556 hearing. Section 554, however, does not affect all adjudications, but rather this section comes into play only in cases of adjudication which are required by statute to be determined on the record after an opportunity for an agency hearing. Thus, to determine whether a § 556 hearing is required, we must examine the relevant statute to see if it requires the permit application "to be...