United States v. Smith

Decision Date24 July 2014
Docket NumberCIVIL ACTION NO. 12-00498-KD-C
PartiesUNITED STATES OF AMERICA, Plaintiff, v. HAMILTON SMITH, Defendant.
CourtU.S. District Court — Southern District of Alabama
ORDER

This matter came before the Court for a non-jury trial on June 2-3, 2014 ("Phase II"), at which time the issue of remedies concerning Dams/roads A, B, D and E, were tried. Upon consideration of the arguments, and documentary and testimonial evidence presented, and all other pertinent portions of the record including the parties' post-trial briefs (Docs. 137-142), the Court finds as follows.

I. Statement of the Case & Factual Background

This is a civil action arising under the Clean Water Act ("CWA").1 The purpose of the CWA is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. 33 U.S.C. § 1251(a). Accordingly, the CWA prohibits all discharges of pollutants, including dirt, rock, clay and other materials, into "waters of the United States" except as authorized by a "Section 404 permit" granted under the CWA, or as provided in one of the statute's permit exemptions. Section 404 requires that, before discharging dredged infill material into jurisdictional waters of the United States, you must obtain a permit from the Secretary of the Army.

Defendant Hamilton Smith ("Smith")'s family owns (and Smith manages) approximately 800 acres of real property in Baldwin County, Alabama. The property contains wetlands and streams that are protected by the CWA, including Dennis Creek and three (3) unnamed tributaries that flow into Dennis Creek, which are referred herein as Creek A, Creek B, and Creek E. Dennis Creek flows directly intothe Tensaw River, which is three (3) miles away from Smith's property, and ultimately into Mobile Bay, approximately 15 miles down the Tensaw River. Between approximately 1998-2004, Smith built five (5) dams on his property at the cost of $180,000 (Doc. 90 at 56; Doc. 103 at 69), which provided roads and resulted in several lakes, referenced herein as Dams/roads A, B, C, D, and E.2 Smith did not request permission from the Government before making these improvements, and did not apply for Section 404 CWA permits.3 As such, the Government sued Smith for CWA Section 404 permit violations.

The Government has established, and Smith does not dispute, that the tributaries at issue are jurisdictional waters of the United States and that he built the dams/roads using point sources that discharged pollutants. Smith also does not contest that one (1) dam/road, Dam/road E, was built in violation of the CWA Section 404 permitting requirement.

At the Phase 1 trial (liability only), Smith contended that Dams A-D did not require a Section 404 permit because they were built in compliance with the CWA permitting exemption for forest roads (and for silviculture).4 The forest roads exemption covers the discharge of dredged or fill material "for the purpose of construction or maintenance of farm roads or forest roads ... where such roads are constructed and maintained, in accordance with best management practices, [BMPs] to assure that flow and circulation patterns and chemical and biological characteristics of the navigable waters are not impaired, that the reach of the navigable waters is not reduced, and that any adverse effect on the aquatic environment will be otherwise minimized." 33 U.S.C. § 1344(f)(1)(E). This permitting exemptionrequires that the roads be constructed in accordance with 15 mandatory Best Management Practices ("BMPs"). 33 C.F.R. § 323.4(a)(6)(i-xv); 40 C.F.R. § 232.3(c)(6)(i-xv). To qualify for the forest roads exemption, Smith bore the burden of establishing that his activities satisfied the exemption's requirements. U.S. v. Brink, 795 F.Supp.2d 565, 582 (S.D. Tex. 2011); Avoyelles Sportsmen's League, Inc. v. Marsh, 715 F.2d 897, 926 (5th Cir. 1983); U.S. v. Akers, 785 F.2d 814715 F.2d 897, 819 (9th Cir. 1986); In re Carsten, 211 B.R. 719, 732 (Bkrtcy. D. Mont. 1997).

At trial, the Government argued that Smith failed to comply with the mandatory BMPs such that he could not avail himself of the forest road exemption, and moreover, even if he could, he still would not be entitled to the exemption because his activities were subject to "recapture"5 -- an exception to the forest roads exemption. To support recapture applying to Smith's dams/roads, the Government asserted that because they altered the ecosystem and affected the hydrology of the jurisdictional waters, the use and the reduction or reach/circulation of the waters was altered.

During the Phase I trial, which dealt only with liability, the jury heard the testimony and evidence, and considered Smith's CWA liability for Dams/roads A, B, C, and D. The jury found Smith liable for Dams/roads A and B (that the forest road exemption applied but so did recapture which removed that exemption).6 The jury found Smith was not liable for Dams/roads C and D (that the forest road exemption applied and recapture did not). Thereafter, the Government filed a post-trial motion for judgment as a matter of law regarding Dams/roads C and D (Doc. 100), which the Court granted as to D7but denied as to C (upholding the jury's verdict on C). (Doc. 106). At a later date, this case proceeded to Phase II of the trial (remedies only) regarding Dams/roads A, B, D and E. For purposes of Phase II, the Parties agreed that Dams/Roads A, B and D are located in protected streams and/or wetlands and that each of the dams/roads created impoundments of water of various sizes that inundated protected streams and/or wetlands. Smith also admitted liability for Dam/road E. Phase II then addressed the remedies and damages for the admitted or adjudicated CWA violations by Smith for Dams/roads A, B, D and E.

As damages, the Government seeks injunctions, compensatory mitigation, and civil penalties. Specifically, the Government asserts the following relief against Smith:

Permanent Injunction: a general permanent injunction forever prohibiting Smith's discharge of pollutants into waters of the United States without a permit in violation of CWA section 301(a), 33 U.S.C. § 1311(a). (Doc. 133 at 4).
Temporary Restorative Injunction (Restoration Plan): a restorative temporary injunction relating to a restoration plan (based on the findings of William L. Kruczynski- "Dr. Kruczynski") (Docs. 138-1, Doc. 141-1 (as amended)) requiring Smith, from October 1, 2014 through October 1, 2015, at his own expense and at the direction of the EPA, to fully restore the site by returning the violation areas to their pre-violation conditions through the removal of all unauthorized fill (the earthen material that comprises the dams/roads) from the protected streams and wetlands at the site and planting new vegetation to restore the pre-violation forested wetland condition. (Doc. 133 at 4, 6-7). Included in this request is removal of the dams/roads because there are other ways to cross the streams (e.g., bridges), or at the minimum, Dams/roads A and B should be redesigned via culverts and to restore the flow/circulation of Creeks A and B.8 (Id. at 5-6, 8). Additionally, the Government seeks 3 years of annual monitoring/reporting to the EPA to ensure the plan is working and the site is being restored. (Id. at 7-8). (Seealso Docs. 138-1, 141-1). The Government estimates the costs of restoration as $89,900. (Doc. 138-1 at 10; Doc. 141-1 at 11).
Compensatory Mitigation: compensatory mitigation for any unauthorized fill Smith cannot remove, or that the Court determines should be allowed to remain at the site, given the statute's policy of "no net loss" of wetlands. (Doc. 133 at 4-5). For the Government, this addresses both permanent and temporary losses since the fill has been in place (the time of the violations) from 2003 to the present, as during that time the wetlands and streams have not been functioning as they should and there should be compensatory mitigation for those losses. (Id. at 5, 9).
• Temporal Losses. Compensatory mitigation for temporal losses of stream and wetland function due to Dams A, B, D, and E and their impoundments until they are restored, inthe form of mitigation credits. (Doc. 107; Doc. 133 at 9-13; Doc. 137 at 6, 20).
• Mitigation Bank Credits. The Government seeks an order specifying that Smith satisfy the requirement to mitigate for temporal losses for more than decade by purchasing credits at an existing mitigation bank9 in the service area, or nearby within the State of Alabama, in recognition of the preference under applicable regulations (40 C.F.R. § 230.93(b)) for mitigating through mitigation banks rather than through other forms of mitigation that involve further temporal losses and increased risk of failure. (Id.)
o Post-trial, the Government produced a specific figure of $217,365 and requests that this Court require Smith to purchase credits for Dams/roads A, B and E equivalent to 20% of the mitigation that would have been required for the impacts if they had been permitted, to offset the functional losses that occurred during the 12 years the violations remained unabated. (Doc. 137 at 6, 14). The Government also seeks credits equivalent to 15% for Dam/road D to reflect that its size decreased in 2010 after a large culvert was installed. (Doc. 137 at 15). The Government adds that the temporal mitigation request will address only the impoundment and not the filling impacts at Dams/roads A, B, and D based on the expectation that these dams will be brought into compliance with the forest road exemption and will not impound water "in which case the remaining fill would not require a permit." (Id.)
• Compensation for permanent impacts (none if restoration is complete). (Doc. 133 at 13).
Civil Penalties. The Government seeks civil penalties against Smith in the amount of $1,500,000 for the Dams/roads A, B, D and E, pursuant to 33 U.S.C. § 1319(d), depending on the other relief being ordered in full by the Court.

III. ...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT