U.S. v. Mt. Vernon Memorial Estates, Inc., 83-1694

• Decision Date: 10 November 1983
• Docket Number: No. 83-1694,83-1694
• Citation: 734 F.2d 1230
• Parties: , 14 Envtl. L. Rep. 20,503 UNITED STATES of America, Plaintiff-Appellee, v. MT. VERNON MEMORIAL ESTATES, INC. and John Sexton Sand & Gravel Corp., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1230

734 F.2d 1230

39 Fed.R.Serv.2d 285, 14 Envtl. L. Rep. 20,503

UNITED STATES of America, Plaintiff-Appellee, v. MT. VERNON MEMORIAL ESTATES, INC. and John Sexton Sand &amp Gravel Corp., Defendants-Appellants.

No. 83-1694.

United States Court of Appeals Seventh Circuit.

Submitted Nov. 10, 1983. ^*

Decided May 16, 1984.

As Amended May 31, 1984.

Rehearing Denied June 6, 1984.

Russell J. Topper, Chicago, Ill., for defendants-appellants.

Gail C. Ginsberg, Asst. U.S. Atty., Dan K. Webb, U.S. Atty., Chicago, Ill., Kay L. Richman, Land & Natural Resources Div Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Before ESCHBACH, POSNER, and FLAUM, Circuit Judges.

ESCHBACH, Circuit Judge.

The procedural history of this protractive yet intermittent litigation dates to September 27, 1976, when the United States filed a complaint for injunctive relief against Mt. Vernon Memorial Estates, Inc. and John Sexton Sand and Gravel Corporation ("the companies"), alleging that they had disposed of dredged or fill material in navigable waters at the Smitty Road landfill in Cook County, Illinois, without obtaining the required permit from the United States Army Corps of Engineers ("the Corps"), in violation of the Clean Water Act, 33 U.S.C. Secs. 1311, 1319, and 1344. The complaint further alleged that the companies had ignored an August 20, 1976 stop work order and an August 25, 1976 cease and desist order issued by the Corps. The United States sought a permanent injunction barring further disposals at the site until a permit had been obtained. A motion for a temporary restraining order, filed by the United States on September 28, 1976, reiterated the allegations of the complaint. On October 5, 1976, the United States filed a motion for a preliminary injunction. On that same day, the district court, pursuant to an agreement between the parties, ordered the companies to cease disposal at the site pending a ruling on the motion for a preliminary injunction.

On November 16, 1976, the companies filed an answer to the complaint, admitting that they had disposed of dredged or fill material at the site without a Corps permit, but raising three affirmative defenses: (1) that the Corps lacked jurisdiction over the site; specifically, that the Corps regulation defining "navigable waters," 33 C.F.R. Sec. 209.120(d)(2)(i)(i), "is an unauthorized and invalid exercise of delegated legislative authority"; (2) that pursuant to section 101(b) of the Clean Water Act, 33 U.S.C. Sec. 1251(b), federal regulatory authority was preempted by prior state administrative and judicial authorizations to construct a sanitary landfill at the site; and (3) that the Corps' regulatory authority over discharges of dredged or fill material in primary tributaries, their contiguous or adjacent wetlands, and all lakes, effective as of July 1, 1976, could not operate retroactively to defeat the companies' vested land use rights. The companies' response to the United States' motion for a preliminary injunction, also filed on November 16, 1976, incorporated by reference their answer to the complaint. That same day, the companies filed a motion for summary judgment and supporting memorandum which expounded the asserted affirmative defenses. The United States filed its response on December 10, 1976, and the companies replied on January 3, 1977.

On June 17, 1977, the district court, per Judge Crowley, denied the companies' motion for summary judgment. In its memorandum opinion, the court concluded that the existence of disputed issues of material fact as to whether the Smitty wetlands are "navigable waters" precluded summary judgment. Specifically, questions remained as to whether the Smitty wetlands "serve important natural biological functions, including food chain production, general habitat, and nesting, spawning, rearing and resting sites for aquatic or land species." 40 C.F.R. Sec. 230.4-1(1)(i). In addition, the court found unresolved factual issues remained concerning the wetlands connection with interstate commerce. The companies' preemption argument was explicitly rejected and all other contentions were stated to be without merit.

On July 1, 1977, a hearing on the United States' motion for a preliminary injunction began, but was never resumed. The matter lay dormant until June 30, 1981, when the case was reassigned to Judge Aspen and the companies filed an amended answer to the complaint. The amended answer again challenged the Corps' jurisdiction over the site and the unconstitutional retroactive destruction of vested land use rights. The companies further claimed that the "adoption and enforcement" of section 404 of the Clean Water Act and its implementing regulations had deprived them of the economic use of their property, without due process and without just compensation; by way of counterclaim, the companies sought $7 million as just compensation for the property and $1 million in damages for the unconstitutional taking.

By order dated November 13, 1981, the district court granted the United States' motion to dismiss the counterclaim on the ground that exclusive jurisdiction of all claims against the United States in excess of $10,000, not sounding in tort, lies with the United States Court of Claims pursuant to 28 U.S.C. Sec. 1491. Settlement discussions ensued pursuant to court order, and the companies ultimately agreed to apply for a Corps permit. Upon the United States' motion, the case was dismissed formally by order dated December 14, 1981; the order of dismissal was entered on December 16, 1981.

On January 8, 1982, the companies filed an emergency motion to modify the dismissal to provide for leave to reinstate the cause within 90 days. The motion was granted and the companies were given leave to reinstate on or before April 8, 1982. The time within which the companies might reinstate subsequently was extended to July 9, 1982 and September 13, 1982. On August 13, 1982, the Corps denied the companies' permit application. On September 14, 1982, the companies filed instanter a motion to reinstate and for judgment in their favor. They sought dismissal of the United States' complaint pursuant to Rules 12(b), (c), (h)(3), and 56 of the Federal Rules of Civil Procedure, arguing again that the Corps lacked jurisdiction over the site and that the Corps' denial of their permit application constituted a taking of their property without just compensation in violation of the Fifth Amendment.

By order dated October 27, 1982, the companies' motion was denied. In its memorandum opinion, the district court noted that it had granted "leave to reinstate should [the companies] subsequently desire judicial review of whatever action the Corps of Engineers took on their permit application," suggesting that leave to reinstate the original cause was never contemplated. The court concluded that reinstatement of the original cause would be inappropriate, stating:

The government's action was predicated on the fact that defendants had never applied for a permit for their landfill activities. Defendants have now applied for a permit. Notwithstanding the fact that defendants' application has been denied, the dispute is in a different posture than it was prior to its dismissal and their attempt to reinstate the original action is misplaced.

Finally, the court explained that the companies were free to pursue administrative or judicial review of the denial of their permit application.

The companies' subsequent motion to vacate the order of October 27, 1982, filed on November 5, 1982, was denied on March 17, 1983. On April 15, 1983, the companies filed notice of appeal from the order of March 17, 1983, which denied their motion of November 5, 1982 to vacate the order of October 27, 1982, which denied their September 14, 1982 motion to reinstate, and from the December 16, 1981 dismissal.

I

The initial issue to be addressed in this case is the scope of appellate review. Although the companies' notice of appeal challenges the December dismissal, in their brief they contend that the order of October 27, 1982, denying their motion for leave to reinstate, is the sole final and reviewable order. They argue that their motion of January 8, 1982 "to add the parties' reinstatement agreement that had been previously approved but mistakenly or inadvertently omitted" from the order of dismissal was timely filed under Fed.R.Civ.P. 60(b). They further argue that modification of the order of dismissal to provide for leave to reinstate within 90 days rendered the order of dismissal interlocutory; the dismissal became final only upon the denial of leave to reinstate on October 27, 1982. A timely appeal was taken from the denial of their Rule 59(e) motion to vacate the October 27, 1982 denial of leave to reinstate.

The government takes the position that this court has jurisdiction to review only the order of March 17, 1983, denying the companies' motion to vacate the order of October 27, 1982. In its view, the December 16, 1981 order of dismissal is the final judgment in this case. The government notes that the companies characterize their motion of January 8, 1982 as a Rule 60(b) motion; the companies therefore have effectively acknowledged the finality of the December 16, 1981 dismissal because Rule 60(b) applies only to final orders. In addition, because a Rule 60(b) motion does not affect the finality of the judgment, the district court's grant of the motion did not render the order of dismissal interlocutory. Accordingly, the April 15, 1983 notice of appeal does not bring up for review the December 16, 1981 dismissal.

The government further argues that the October 27, 1982 order is unreviewable because the companies failed to file notice of appeal within 60 days after its entry; because Rule 59(e) permits motions to alter or amend only the original judgment in a case, here the dismissal of December 16, 1981, the companies' November 5, 1982 motion to alter or ...