United Affiliates Corp. v. United States
| Decision Date | 27 March 2020 |
| Docket Number | No. 17-67L,17-67L |
| Parties | UNITED AFFILIATES CORPORATION AND MINGO LOGAN COAL LLC, Plaintiffs, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Motion to Compel; Fifth Amendment Takings Claim; Protective Order; Discovery Dispute; Relevance; Privilege; High-Ranking Government Officials; Constitutional Challenge; Administrative Record; Administrative Procedure Act.
Kevin P. Holewinski, with whom was, Daniella Einik, Jones Day, Washington, D.C., for Plaintiff United Affiliates Corporation. Robert M. Rolfe, with whom was George P. Sibley, III, Hunton Andrews Kurth LLP, Richmond, Virginia, for Plaintiff Mingo Logan Coal LLC.
Joshua P. Wilson, with whom were, Lucinda Bach, and Dustin Weisman, Natural Resource Section, Prerak Shah, Acting Deputy Assistant Attorney General, Environment & Natural Resources Division, U.S. Department of Justice, Washington, D.C., for Defendant.
DISCOVERY ORDER
Before the Court are the United States' motion for a protective order and Plaintiffs' motion to compel. In its motion, the Government asserts that Plaintiffs United Affiliates Corporation and Mingo Logan Coal, LLC ("Plaintiffs") made discovery requests that seek material beyond the scope of Plaintiffs' takings claims, impose undue burdens, and target privileged communications. Therefore, the Government argues that it is entitled to a protective order pursuant to Rule 26(c) of the Rules of the United States Court of Federal Claims ("RCFC"). Plaintiffs contend that their discovery requests are relevant to their takings claims and assert that the Government's privilege arguments are not ripe until they provide a privilege log. Therefore, Plaintiffs seek an order compelling the Government to produce the requested materials. For the reasons discussed below, the Government's motion for a protective order is DENIED and Plaintiffs' motion to compel is GRANTED in part.
On March 31, 1992, Plaintiffs Mingo Logan and United Affiliates entered into a lease. Compl. ¶ 20. The lease allows Mingo Logan to operate a coal mine in West Virginia known as Spruce No. 1. Id. United Affiliates owns Spruce No. 1. Id. at ¶ 14. In 2007, the Army Corps of Engineers ("Corps") issued a permit to Mingo Logan pursuant to § 404 of the Clean Water Act. Id. at ¶ 42. Section 404 deals with the discharge of dredged or fill material and vests the Corps with the authority to grant and revoke permits. 33 U.S.C. § 1334(a)-(b). The permit at issue allowed Plaintiffs to discharge fill material from the Spruce No. 1 coal mine into several nearby streams. Compl. ¶ 42-48.
Section 404(c) grants the EPA concurrent authority to prohibit, restrict, or withdraw the issuance of a permit. 33 U.S.C. § 1344(c). In 2011, the EPA revoked the permit specification of the Pigeonroost and Oldhouse Branch streams as disposal sites, preventing Plaintiffs from discharging into them. Compl. ¶ 3. These streams and their tributaries accounted for 88 percent of the total discharge area that had been authorized under the original permit. Id. The EPA's withdrawal of the specification of disposal sites after the Corps issued a valid permit is unprecedented in the history of the Clean Water Act. Id.
Plaintiff Mingo Logan previously filed a suit in the United States District Court for the District of Columbia alleging that the EPA's decision to withdraw the permits violated the Administrative Procedure Act ("APA"). See Mingo Logan Coal Co. Inc. v. EPA, 850 F. Supp. 2d 133, 134 (D.D.C. 2012). The district court held that the EPA lacked the authority under § 404(c) of the Clean Water Act to modify or revoke existing permits issued by the Corps. Id. at 134. On appeal, the D.C. Circuit reversed the district court, finding that under the Clean Water Act the EPA had the authority to withdraw the two streams from the Corps permit. See Mingo Logan Coal Co. v. EPA, 714 F.3d 608, 616 (D.C. Cir. 2013).
In 2017, United Affiliates and Mingo Logan initiated this action, asserting the Court's jurisdiction under the Tucker Act, 28 U.S.C. § 1491. In this case, Plaintiffs allege that the EPA's permit revocation constituted both a categorical taking and a regulatory taking. Compl. ¶ 10-11. According to Plaintiffs, the permit revocation (1) prohibited Plaintiffs' ability to engage in the authorized activities that had been specifically granted by the Corps, (2) resulted in millions of dollars of damages and significantly reduced the property's value, (3) "dramatically overturned" Plaintiffs' reasonable expectations which they formed after receiving the permits, and (4) unduly shifted the costs to Plaintiffs. Id.
On August 30, 2019, the Government produced its initial disclosures and a copy of the administrative record compiled by the EPA for the D.C. District and D.C. Circuit cases. Dkt. No. 55-3 at 4. On November 12, 2019, Plaintiffs served on the Government a request for additional documents not included in the administrative record. Dkt. No. 55-1. In response, on January 13, 2020, the Government served its objections to Plaintiffs' requests. Dkt. No. 56 at 7. Plaintiffs note that the Government used the same generic objection for a majority of the discovery requests. Id. at 8-9.
After the parties failed to arrive at a compromise, the Government filed a motion for a protective order to limit discovery. Dkt. No. 55. The Government objected to the categories of requested documents, stating that many categories were "already represented in the administrative record." Dkt. No. 56-2 at 3. Specifically, the Government sought a protective order for three categories of information:
(1) extra-record communications and materials underlying the Environmental Protection Agency's (EPA) Clean Water Act § 404(c) action . . .; (2) communications involving EPA Administrators, other high level EPA officials or White House personnel concerning the § 404(c) Action . . . ; and (3) communications of EPA's office of counsel concerning legal matters related to the § 404(c) Action.
Following the Government's motion, Plaintiffs filed a motion to compel production of the requested documents and a privilege log. Dkt. No. 56. In their motion, Plaintiffs aver that "the law in fact does not limit discovery in a regulatory taking case to the underlying administrative record." Dkt. No. 56 at 7. Moreover, Plaintiffs argue that the Government's privilege claims are not ripe. At this juncture, without a privilege log, Plaintiffs argue that it is impossible to test the sufficiency of the Government's privilege claims. As a result, Plaintiffs request that the Court compel the Government to produce a privilege log as required by Rule 26 and the parties' November 19, 2019 stipulated discovery order. Dkt. No. 53-2 at 4-5; Dkt. No. 54.
Claims brought under the APA are generally limited to "the administrative record already in existence, not some new record made initially with the reviewing court." Knowledge Connections, Inc. v. United States, 79 Fed. Cl. 750, 759 (2007) (quoting Camp v. Pitts, 411 U.S. 138, 142 (1973)). Thus, under the APA, supplementation of the administrative record "should be limited to cases in which the 'omission of extra-record evidence precludes effective judicial review.'" Axiom Resource Mgmt., Inc. v. UnitedStates, 564 F.3d 1374, 1380 (Fed. Cir. 2009) (quoting Murakami v. United States, 46 Fed. Cl. 731, 735 (2000)).
However, "[w]here constitutional rights are in issue an independent examination of the record will be made in order that the controlling legal principles may be applied to the actual facts of the case." Pickering v. Bd. of Educ., 391 U.S. 563, 580 n.2 (1968) (Douglas, J., concurring). The Fifth Amendment to the U.S. Constitution provides that "private property [shall not] be taken for public use, without just compensation." U.S. Const. amend. V. "The purpose of the takings clause is to prevent 'Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206, 1212 (Fed. Cir.2005) (quoting Penn Cent. Transp. Co. v. City of N.Y., 438 U.S. 104, 123 (1978)). Thus, in takings cases, the record is not limited to the administrative record already in existence.
To state a claim for a taking under the Fifth Amendment's just compensation clause, the plaintiff must establish that it was the owner of the property and that the United States took the property for a public purpose. See Acceptance Ins. Cos., Inc. v. United States, 583 F.3d 849, 854 (Fed. Cir. 2009); Shanghai Power Co. v. United States, 4 Cl. Ct. 237, 239-40 (1983). Whether there has been a taking depends largely upon the particular circumstances in each case. See Penn Central, 438 U.S. at 124; Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426 (1982) (). In other words, the Court must weigh all relevant factors to determine whether Plaintiffs' loss is one that in all fairness and justice ought to be shifted to the public rather than be shouldered by Plaintiffs alone. See Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 326 (2002); Belk et al. v. United States, 858 F.2d 706, 709 (Fed. Cir. 1988).
The Government maintains that the takings claim should be evaluated based on the agency's § 404(c) administrative record. According to the Government, allowing extra-record discovery would "subvert the administrative process and disrupt the Agency's presumption of regularity." Dkt. No. 60 at 12. The Government submits that the administrative record provides Plaintiffs with the necessary facts to put on their case. In the Government's view, Plaintiffs are improperly seeking to use a Tucker Act takings claim to collaterally attack the agency's decision to withdraw § 404(c)...
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