U.S. v. Marion L. Kincaid Trust

• Citation: 463 F.Supp.2d 680
• Decision Date: 03 November 2006
• Docket Number: No. 02-10149.,02-10149.
• Parties: UNITED STATES of America, Plaintiff, v. MARION L. KINCAID TRUST and Marion L. Kincaid, Trustee, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

463 F.Supp.2d 680

UNITED STATES of America, Plaintiff, v. MARION L. KINCAID TRUST and Marion L. Kincaid, Trustee, Defendants.

No. 02-10149.

United States District Court, E.D. Michigan, Southern Division.

November 3, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Geneva S. Halliday, U.S. Attorney's Office, Detroit, MI, Janet L. Parker, U.S. Attorney's Office, Bay City, MI.

Jonathan C. Martin, David L. Powers, Smith, Martin, Bay City, MI, Roger J. Marzulla, Marzulla & Marzulla, Washington DC, Michael E. Wooley, Braun, Kendrick, Saginaw, MI, for Defendants.

OPINION AND ORDER DENYING DEFENDANTS' MOTION FOR ATTORNEY'S FEES AND EXPENSES AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR REVIEW OF CLERK'S ACTION DENYING COSTS

LAWSON, District Judge.

The government originally filed suit against the defendants, owners of residential property on the shore of Saginaw Bay, for violations of the Clean Water Act (CWA) and the Rivers and Harbors Act (RHA) based upon its belief that they were conducting unauthorized grading and dozing activities on their property on the bottom lands and wetlands of Lake Huron. The merits action was dismissed with prejudice. However, this matter is now before the Court on, the defendants' motion for attorney's fees and expenses and the defendants' motion for review of clerk's action denying costs. On December 3, 2003, the Court ordered the parties to present supplemental briefs relating to whether costs and attorney's fees can and should be awarded to the defendants pursuant to Rule 11 of the Federal Rules of Civil. Procedure. Motion papers have been filed by all parties relating to the issue, and the Court heard oral argument on May 4, 2004. The Court now finds that the defendants are the prevailing parties in the matter; although the government investigation and reliance on a theory of liability tied to the concept of an "administrative high water mark" has no justification in existing law, it's position was substantially justified based on a theory of liability intended to Protect wetlands; the defendants may not receive Rule 11 sanctions because they did not adhere to the safe harbor procedures set forth in the rule; the defendants are not entitled to attorney's fees under their alternate theories; and the defendants are entitled to some relief from the Clerk's actions regarding their bill of costs. Therefore, the Court will deny the motion for attorney fees and grant in part and deny in part the motion to review the Clerk's denial of costs.

I

Herb and Marion Kincaid, a retired couple, own a beachfront home near Caseville, Michigan, along the shore of Saginaw Bay. According to the government, an Engineer Corps' investigator, William Leiteritz, was driving down M-25 in May of 2001 when he noticed a bulldozer in the water on property adjacent to the Kincaids' land. He "got out, talked to the bulldozer operator ... [and] could see that there had been several properties where the grading activity had been performed, and the bulldozer operator told [him] that he had done the work." Defs.' Supp. Br. Mot. for Atty. Fees Ex 1, Leiteritz Dep. at 105. Leiteritz also "spoke to the property owner [of the adjacent property] that day. He [the Kincaids' neighbor, Richard or Robert Gillingham] was — he was down in the beach area. He indicated that this was work that they had done on a fairly routine — fairly regular basis." Ibid. This was the extent of Lieteritz's initial examination of the Kincaid property. Apparently, Lieteritz made no contact with the Kincaids at that time. On June 5, 2001, the Kincaids hired Beachy Esch Excavating to perform grooming work on their beach. Defs.' Supp. Br. Mot. for Atty. Fees Ex. 4, Decl. of Marion Kincaid at ¶ 4. Before that time, the Kincaids state that they "primarily used a hand rake to level and smooth the sand on our beach which was wind-blown during the winter months; however, we have also had the sand leveled by a bulldozer a handful of times (approximately 6 or 8 times) in the past 50 years." Ibid. The Kincaids turned to mechanical aid to level the sand on that sole occasion in 2001 because "the work became too back breaking for us to do ourselves." Ibid.

On June 14, 2001, Leiteritz caused cease and desist letters to be sent out to all of the residents from Gilingham's property to the Kincaids' property based upon the results of his investigation on May 18, 2001. The letter to the defendants reads:

                  Marion Kincaid[] Trust
                  7688 Port Austin Road
                  Pigeon, Michigan 48755
                  Dear Sir
                

My representative recently inspected your property at 7688 Port Austin Road, Pigeon, Michigan (Section 4, Township 17N, Range 10E). The inspector reported that an unauthorized beach grading operation had taken place at this site.

In Lake Huron as in all navigable waters of the United States including their adjacent wetlands, any construction or discharge of dredged and/or filled material must be authorized by the Department of the Army. The authority of the Corps of Engineers to regulate construction or other work in navigable waters of the United States is contained in Section 10 of the Rivers and Harbors Act, Section 404 of the Clean Water Act and regulations promulgated pursuant to these Acts. Please be advised that filling and grading work, mechanized landclearing, the sidecasting of excavated material, and some forms of piling installation constitute or otherwise involve discharges of dredged and/or fill material under the Corps' regulatory authority.

I hereby direct all persons responsible for and/or involved in this activity to cease and desist from further unauthorized activities within the navigable waters of the United States.

This incident is currently under review, after which a recommendation may be made to the U.S. Justice Department concerning initiation of legal action against the responsible party or parties. To assist me in my evaluation of the pertinent facts, you have the opportunity to furnish me any appropriate information, which will become a part of the record and as such may be used against the responsible party in any proceedings.

We have enclosed a brochure to explain the need to protect Great Lakes coastal wetlands. I request your written reply within fourteen (14) days to the attention of William E. Leiteritz

                  Sincerely
                  Robert Tucker
                  Chief Enforcement Branch
                  Regulatory Office
                

Defs.' Supp. Br. Mot. for Atty. Fees Ex. 2, Letter from Tucker to Kincaid Trust of 6/14/01. The Kincaids replied to this letter on June 21, 2001 as follows:

Dear Sir:

I do not totally understand your letter of June 14, 2001. The only action that I have taken on the beach is the leveling of sand that accumulated in piles along snow fencing. I installed this fencing to collect sand over the winter. I tried leveling this sand by hand with a wheelbarrow. It was backbreaking work and at the end of eight hours, I had not made a dent in the accumulated sand. There was a bulldozer driving along the beach. I asked the operator to please level my piles of sand, which he did in less than an hour. I couldn't have done that by hand if I worked all summer. This beachfront property has been in the family for five decades. The original landowners along this four-mile stretch of property on Saginaw Bay owned the land to the water's edge. During this time, water levels have varied greatly. There was a period in the 1960's when the water was approximately as low as it is now. During this period of time, we have never experience any wetlands. There are pictures available which cover this time period.

Beach erosion has never been a problem. The wind and wave action are directed toward shore and build up the beach area.

I do admit that the vegetation I have seen growing the last two years is the worst I have ever seen and water does accumulate in low spots after a heavy storm. This water generally dissipates after a few days of hot weather. There has never been any vegetation in the water, no matter what the water level. In summary, this is our permanent residence and we consider the beach front to be our front yard. It is 175 feet from our house to the water's edge. If I interpret your letter correctly, it states that I can do nothing to level sand that accumulates over the winter. I disagree with this position and believe this is totally unfair and inappropriate.

                  Sincerely
                  Marion L. Kincaid
                  Trustee of the Marion L. Kincaid Revocable
                  Trust
                

Defs.' Supp. Br. Mot. for Atty. Fees Ex. 4, Letter from M. Kincaid to Dep't of Army of 6/21/01.

The government brought suit against the Kincaids, but not against any of their neighbors. Donald Reinke, a representative of the Army Corps of Engineers, explained that he pursued an action against the Kincaids instead of others based on the Corps' decision "to select two or three representative cases ... of unauthorized work on exposed bottom lands of Saginaw Bay ... [to] try and forward to the Office of Council for legal action." Defs.' Supp. Br. Mot. for Atty. Fees Ex 7, Reinke Dep. at 12. Reinke, a biologist in the Corps' Detroit Regulatory Office, selected these cases and described his process of selection as follows: "It was basically random, but we had a, again, quote, unquote, pool of individuals that, you know, we had on record of performing unauthorized work on the exposed bottom lands of Saginaw Bay. We picked out of that pool people who responded either in writing or electronically or by phone to our letters that notified them that their work was conducted without necessary Corps permits. And out of that grouping of people we picked people that continued to do unauthorized work even after they were given notification and had responded." Id at 16. Gary R. Mannesto, Supervisor of the Corps' Detroit Regulatory Office, also opined that the decision was made to initiate a legal enforcement action against the Kincaids because "[i]t was felt it was necessary to pursue a...