U.S. v. City of Detroit

• Citation: 329 F.3d 515
• Decision Date: 15 May 2003
• Docket Number: No. 01-1277.,01-1277.
• Parties: UNITED STATES of America, et al., Plaintiffs, UNITED STATES Army Corps of Engineers, Movant-Appellant, v. CITY OF DETROIT, et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

329 F.3d 515

UNITED STATES of America, et al., Plaintiffs, UNITED STATES Army Corps of Engineers, Movant-Appellant, v. CITY OF DETROIT, et al., Defendants-Appellees.

No. 01-1277.

United States Court of Appeals, Sixth Circuit.

Argued December 11, 2002.

Decided and Filed May 15, 2003.

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Todd S. Aagaard (argued and briefed), United States Department of Justice, Environment Division Appellate Section, Washington, DC, for Appellant.

Joseph C. Basta, Dykema Gossett (argued and briefed), Ann Arbor, MI, John Fordell Leone, Office of the Attorney General, Natural Resources Division, Lansing, MI, Jill M. Wheaton, Mark D. Jacobs, R. Craig Hupp (briefed), Bodman, Longley & Dahling, Detroit, MI, for Appellees.

Before MARTIN, Chief Circuit Judge; KEITH, BOGGS, NORRIS, BATCHELDER, DAUGHTREY, MOORE, COLE, CLAY, GILMAN, GIBBONS and ROGERS, Circuit Judges.

KEITH, J., delivered the opinion of the court, in which BOYCE F. MARTIN, Jr., C.J., DAUGHTREY, COLE, CLAY, and GILMAN, JJ., joined. MOORE, J. (pp. 527-530), joined in J. KEITH's opinion as to Parts I, II, and III.A., and also delivered a separate opinion concurring in part and concurring in the judgment. ALAN E. NORRIS, J. (pp. 531-534), delivered a separate opinion concurring in part and dissenting in part, in which BOGGS, BATCHELDER, GIBBONS, and ROGERS, JJ., joined.

OPINION

KEITH, Circuit Judge.

In this case, the district court issued an order under the All Writs Act, 28 U.S.C. § 1651(a), directing the United States Army Corps of Engineers ("Corps") to accept dredged waste material in order to prevent the frustration of a consent judgment designed to address water pollution problems in the greater Detroit area. For reasons set forth below, we hold that the All Writs Act provides district courts with the authority to bind nonparties in order to prevent the frustration of consent decrees that determine parties' obligations under the law. However, we find that remand is necessary in this case because of the district court's failure to consider the following two issues: (1) whether Detroit could have brought suit under the Administrative Procedure Act ("APA"), and if so, whether this case presents the type of "exceptional circumstances" that would render the APA inadequate; and (2) whether the Corps' determination that another Environmental Assessment ("EA") was necessary was "arbitrary and capricious" under Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). Accordingly, we REMAND this case to the district court for further consideration consistent with this opinion.

I. BACKGROUND AND FACTUAL SUMMARY

In 1977, the United States brought suit against the City of Detroit ("Detroit"), the Detroit Water and Sewage Department ("DWSD"), and the State of Michigan ("the State"), alleging that the Detroit wastewater treatment system was operating in violation of the Clean Water Act, 33 U.S.C. §§ 1251-1387, and its National Pollutant Discharge Elimination System ("NPDES") permit. That year, the parties signed a consent judgment setting a schedule to bring the treatment plant into compliance. Detroit's failure to comply led to a party-negotiated amended consent judgment in 1981 that contained a revised compliance schedule.

The State revised the NPDES permit in July of 1997, and Detroit fell out of compliance. In 1998, the State issued a notice of violation to Detroit, and the parties thereafter entered into negotiations for a proposed administrative consent order. In August of 2000, Detroit and the State negotiated a second amended consent judgment, which was approved by the district court, to bring Detroit into compliance.¹ The second amended consent judgment required Detroit to dredge and dispose of 146,000 cubic yards of sediment from Conner Creek, a channel connected to the Detroit River. Discharges from Detroit's sewage treatment plant had contaminated the creek. Under the agreement, this dredging was to be completed "as soon as possible," and definitely before the completion of a combined sewer overflow basin that Detroit was building in the vicinity. The sediment was to be disposed of "in accordance with state and federal requirements." The United States Environmental Protection Agency ("EPA") refused to participate in the negotiation of the agreement, explaining that it had not been part of the administrative proceedings.

Detroit planned to dredge Conner Creek before the project was added as a requirement in the consent judgment. In 1998, Detroit asked the Corps if it could dispose of the sediment at the Confined Disposal Facility ("CDF") at Pointe Mouillee, which is a wetlands area on the western shore of Lake Erie. Pointe Mouillee, operated by the Corps on bottomland owned by Michigan, includes a state game area and a 3.5-mile dike built to contain dredged material from the Detroit and Rouge Rivers. The CDF, which has a capacity of 18,600,000 cubic yards, was constructed in 1981 under the authority of a statute on soil disposal facilities, 33 U.S.C. § 1293a.

The Corps refused to accept the Conner Creek sediment, citing the elevated concentrations of lead and cadmium in the material. Detroit next explored the idea of dewatering the dredged sediment at the edge of the creek and then transporting the sediment to a landfill. Vigorous community opposition to the prospect of a malodorous dewatering along the creek led Detroit to table this plan. Detroit then returned to the Corps and suggested putting the sediment in a containment cell at the Pointe Mouillee facility; the cell would be covered with clean material to prevent contamination of the environment. The Corps expressed concern over the level of contaminants but agreed to work with Detroit and the State to find a solution. Negotiations ensued. The Corps requested and received the State's approval for the use of Pointe Mouillee for the sediment. The Corps then required the State to obtain the approval of the EPA and the United States Fish and Wildlife Service and to agree to hold the federal government harmless from liability arising out of the Conner Creek disposal. The Corps also insisted upon an environmental assessment to determine whether the disposal would comply with the National Environmental Policy Act of 1969 ("NEPA"), 42 U.S.C. § 4332 et. seq., requirements. The Corps also directed Detroit to obtain a dredging permit, a permit already required by the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403. The State responded to the Corps' demands by refusing to obtain the concurrence of either EPA or the Fish and Wildlife Service on the ground that these approvals would take too much time.

In the meantime, Detroit agreed to undertake another project that became linked to the dredging — the construction of a thirty-million gallon settling basin at Conner Creek to contain the combined sewer overflow ("CSO") from industrial and sanitary sewage and stormwater runoff. The basin was required by Detroit's NPDES permit for its sewage treatment plan. Under the state-issued permit, Detroit was to begin construction of the basin by January 1, 2001, and to complete it by January 1, 2005. The high cost of the project prompted Detroit to apply to the State Revolving Loan Fund, which required a project description and environmental studies. When Detroit presented its basin project description, the State required that Detroit include in the proposal its plans for the Conner Creek dredging (even though the dredging is not being funded by the state revolving fund, and Detroit maintained that the two projects were separate). As a result, Detroit could not get funding for the basin unless it had secured a place to put its Conner Creek sludge. The city stated that, if it completed the basin project without state funding, there would be an additional cost to rate-payers of $40,000,000.

On October 12, 2000, the State and Detroit filed a motion seeking an order to show cause as to why the Corps should not be ordered to accept the Conner Creek sediment. The district court concluded that the Corps was frustrating the August 2000 consent judgment, and it issued an order that "[t]he ACE [Army Corps of Engineers] accept dredged materials from Conner Creek for disposal at the Pointe Mouillee Confined Disposal Facility." United States v. Michigan, 122 F.Supp.2d 785, 793 (E.D.Mich.2000). The district court continued by rejecting the Corps' conditions on the acceptance of the sediment:

I find that, pursuant to the Agreement Between the United States of America and the State of Michigan Acting Through the Michigan State Department of Natural Resources for Local Cooperation at Detroit and Rouge Rivers, Michigan, dated May 10, 1974, the ACE has obtained from the State of Michigan the statutorily required liability protection language to which it is entitled under Section 123 of the River and Harbor Act of 1970, 33 U.S.C. § 1293a, and I ORDER that no further liability protection language from the State of Michigan is required or authorized by law.

Since I find that the proposed disposal at the Pointe Mouillee CDF [Confined Disposal Facility] of dredged materials from Conner Creek does not constitute a new use of the facility, I ORDER that it is not necessary that the ACE conduct a review of such disposal under the National Environmental Policy Act, or have developed a new EIS [Environmental Impact Statement] or EA [Environmental Assessment] by NEPA.

Id. at 793-94 (paragraph numbers omitted). The "new use" issue related to the Corps' assertion that the CDF had been used previously for "navigational dredging" and the Conner Creek sludge was "environmental dredging," a new use prompting a need for supplemental environmental studies. The district court denied the Corps' motion for reconsideration. The Corps timely appealed the district court's judgment to our Court, asserting that sovereign immunity on the part of the Corps barred the injunctive order issued...