United States v. Acquest Transit LLC
| Decision Date | 04 June 2020 |
| Docket Number | 09CV55S |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. ACQUEST TRANSIT LLC, et al., Defendants. |
| Court | United States District Courts. 2nd Circuit. United States District Court of Western District of New York |
Before this Court are the parties' Motions for Summary Judgment (Docket Nos. 267 (defendants), 269 (plaintiff United States, the "Government")) and their respective Objections (Docket Nos. 337 (defendants' Objections), 338 (Government's Objections), 339 (defendants' Objections to denial of their Motion for Summary Judgment), 340 (amended defense Objection to denial of Motion for Summary Judgment)) to the 103-page Report & Recommendation from Magistrate Judge Leslie Foschio, United States v. Acquest Transit LLC, No. 09CV55, 2018 WL 3861612 (W.D.N.Y. Aug. 14, 2018), on those motions () (Docket No. 334, the "Report" or "R&R"). Familiarity with that comprehensive Report is presumed.
Also, before this Court is an appeal from the denial of the Government's Motions (Docket Nos. 293 (Steven Apfelbaum), 294 (Ray Kagel and Dr. Susan Kagel), 296 (Dr. Alan Busacca)) to strike portions of defense expert opinions considered in that Report. In a separate Decision and Order (Docket No. 348, June 3, 2020) (familiarity with which also presumed), these Motions were granted in part (Docket Nos. 294 (Ray Kagel), 296 (Dr. Busacca)), denied in part (Docket Nos. 294 (Dr. Susan Kagel), 293 (Apfelbaum)). That Decision and Order (Docket No. 348, at 1, 31) also terminated one set of defense Objections (Docket No. 339) which were superseded by their amendment (Docket No. 340).
The parties exchanged responses to their Objections (Docket Nos. 342, 343; see also Docket No. 341 (Rule 72 certification)) but did not file any replies. This Court then sought briefing on the significance of the Supreme Court's recent decision in County of Maui v. Hawaii Wildlife Fund, 590 U.S. ___, 140 S.Ct. 1462 (Apr. 23, 2020), to this case, with simultaneous responses due May 14, 2020 (Docket No. 344). The Government (Docket No. 347) and defendants (Docket No. 346) filed their timely memoranda answering this query. The matter then was deemed submitted without oral argument.
The issues in this case involve the application of the Clean Water Act to defendants' Amherst, New York, parcel (hereinafter the "Site"); namely, whether that Site contains "wetlands" connected to the "waters of the United States" for Clean Water Act jurisdiction.
For future reference in this Decision and Order some of the common shorthand, abbreviations, and acronyms used in herein include:
For the reasons stated below, defendants Objections (Docket Nos. 337, 339) are granted in part, denied in part and the Government's Objections (Docket No. 338) are denied. As a result, defendants' Motion for Summary Judgment (Docket No. 267) is denied and the Government's Motion for Summary Judgment (Docket No. 269) is granted in part, denied in part.
Defendants filed two sets of Objections (Docket No. 337; see Docket No. 340, Defs. Amended Objections at 1 n.1, noting defendants filing distinct Objections). In the first Objections (addressing the Government's Motion for Summary Judgment, see Docket No. 337, Defs. Memo. at 1; Docket No. 340, Defs. Memo. at 1), they raise three issues: the Government's failure to establish entitlement to judgment as a matter of law on the validity of the permit held by defendant Acquest Transit LLC ("Acquest"); whether the prior converted cropland (or "PCC") status for the Site can be abandoned under theClean Water Act; and whether the Magistrate Judge erred in admitting the Grand Jury testimony of a deceased witness (Patrick Huntress) who was never cross-examined by defendants (Docket No. 337, Defs. Memo. at 1, 9-12; cf. Docket No. 334, R&R at 75-76, 2018 WL 3861612, at *26). The third issue was addressed separately (Docket No. 348, Decision and Order of June 3, 2020).
First, under Count Two defendants contend that they had valid Section 402 permits and conclude that the Report (Docket No. 334, at 101, 2018 WL 3861612, at *36) erred in accepting the Government's contrary view (Docket No. 337, Defs. Memo. at 3-6). They contest the Government's assertion that defendants' notice of intent ("NOI") submitted with the permit applications misrepresented the dates and acreage of defendants' planned activity (id. at 3-6; see Docket No. 279, Defs. Statement ¶ 64; Docket No. 279, Defs. Memo. at 10-11). Defendants contend that their activities in 2006 were agricultural and did not require a Section 402 permit; thus, these activities cannot form the basis for any claim that the essentially unnecessary NOI contained false representations (Docket No. 337, Defs. Memo. at 5).
Defendants next argue that the prior converted cropland status (or "PCC") of the Site (and exclusion from the Act's definition for "waters of the United States") cannot be abandoned as a matter of law (Docket No. 337, Defs. Memo. at 7-9). They claim that the Report cites the abandonment provision in the Food Security Act, 16 U.S.C. § 3822(b)(1)(G) (Docket No. 334, R&R at 24, 93-94, 2018 WL 3861612, at *33), and not the CWA which has no abandonment provision (Docket No. 337, Defs. Memo. at 8-9).
Defendants also opposed admission of the Grand Jury testimony (Docket No. 270, Pl. Ex. 15) of Patrick Huntress, the late brother of defendant William Huntress (DocketNo. 337, Defs. Memo. at 9; see Docket No. 334, R&R at 75, 2018 WL 3861612, at *26). In the Decision and Order of June 3, 2020, this Court granted defendants' Motion and struck Patrick Huntress' Grand Jury testimony as inadmissible hearsay (Docket No. 348, at 26-29).
Plaintiff the United States of America (the "Government") argues that the Report incorrectly found triable issues of fact as to whether defendants committed wetlands or stormwater violations (Docket No. 338, Pl. Memo. at 3-17). First, the Government contends that the Report concluded in error that there is an issue of fact whether the Site had wetlands when acquired by defendants and whether these wetlands were "waters of the United States." The Government asserts it need only show that some portion of the Site contained wetlands for CWA jurisdiction over the Site and an acknowledged portion of the Site was declared wetlands by the New York State Department of Environmental Conservation ("DEC"). This area also was not part of the PCC that defendants claim is outside of CWA jurisdiction. (Id. at 3-5, 6 n.5.) The Government argues that defendants' expert did not analyze the protected area to raise a fact issue whether that parcel was wetlands (id. at 5-6), assuming this expert was not stricken as the Government urged (id. at 5, 17-25). The Government next states that wetland hydrology does not raise an issue of fact, that the relevant period to evaluate the Site was before defendants' earth moving in 2006 (id. at 8, 10). The Government asserts that the Report was wrong in discounting the findings of Earth Dimensions, Inc. ("EDI"), defendants' contractor in determining the boundaries of the wetlands that ultimately led to the reduction of defendants' purchase price of the Site due to the extent of wetlands there (id. at 7).
Next, the Government contends that there is no issue of fact that the Site's wetlands are "waters of the United States" under the CWA as construed by the Supreme Court in Rapanos v. United States, 547 U.S. 715 (2006) (id. at 10-13). The Government applies both the Rapanos plurality's standard of continuous surface connection (id. at 11-12) and Justice Anthony Kennedy's significant nexus standards (id. at 12-13) to establish that these wetlands as connected to "waters of the United States." The Government claims that there is a continuous surface connection to a permanent waterway, here Ransom Creek, flowing from the wetlands on the Site through ditches on the property to the West Millersport Highway ditch into Ransom Creek (id. at 11-12). The Government disputes the Report's conclusion that the significant nexus standard cannot be applied on summary judgment (id. at 12; but cf. Docket No. 334, R&R at 88, 2018 WL 3861612, at *31; Docket No. 342, Defs. Memo. at 14-15 (); also Vander Salm v. Bailin & Assocs., Inc., No. 11-40180-TSH, 2014 WL 1117017, at *4 (D. Mass. Mar. 18, 2014) ()). The Government also argues that it is not required to establish amount of fill from the Site into waters to establish the significant nexus with TNW, found to...
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