USA v. Mango, Austin,et al

• Decision Date: 01 August 1998
• Docket Number: Docket No. 98-1215
• Citation: 199 F.3d 85
• Parties: (2nd Cir. 1999) UNITED STATES OF AMERICA, Appellant, v. LOUISE MANGO, KENNETH AUSTIN, KEVIN DOMINSKE and PHENIX ENVIRONMENTAL, INC., Defendants-Appellees
• Court: U.S. Court of Appeals — Second Circuit

Page 85

199 F.3d 85 (2nd Cir. 1999)

UNITED STATES OF AMERICA, Appellant, v. LOUISE MANGO, KENNETH AUSTIN, KEVIN DOMINSKE and PHENIX ENVIRONMENTAL, INC.,

Defendants-Appellees.

Docket No. 98-1215

August Term, 1998

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

Argued: Jan. 20, 1999

Decided: Dec. 8, 1999

Appeal from a judgment entered in the United States District Court for the Northern District of New York (Howard G. Munson, Judge) dismissing counts of indictment brought pursuant to Clean Water Act.

Reversed and remanded.

JARED A. GOLDSTEIN, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C. (David C. Shilton, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C., Peter D. Coppelman, Acting Assistant Attorney General, Thomas J. Maroney, United States Attorney for the Northern District of New York (Craig A. Benedict, of Counsel), on the brief) for Appellant.

R. STAN MORTENSON, JAY L. ALEXANDER, DAVID R. FONTAINE, JAMES R. HEAVNER, JR., JODY MANIER KRIS, Miller, Cassidy, Larroca & Lewin, L.L.P., Washington, D.C., for Defendants-Appellees Louise Mango and Phenix Environmental, Inc.

BRADFORD A. BERENSON, Sidley & Austin, Washington, D.C. (John N. Gallo and Stephen B. Kinnaird, of Counsel, on the brief) for Defendant-Appellee Kenneth Austin.

Before: LEVAL and POOLER, Circuit Judges, and CURTIN, District Judge.^*

POOLER, Circuit Judge:

This appeal requires us to determine whether the Clean Water Act, 33 U.S.C. 1251-1387 ("CWA") allows the Secretary of the Army (the "Secretary") to delegate authority to issue discharge permits to district engineers in the Army Corps of Engineers (the "Corps"). If so, we must also decide the scope of the district engineer's authority to set permit conditions. The United States District Court for the Northern District of New York (Howard G. Munson, Judge) found that the Secretary lacked the power to delegate the issuance of permits to anyone other than the Chief of Engineers (the "Chief"). Because a lower level Corps employee issued the permit in question, the district court dismissed all of the indictment counts that charged defendants with violating CWA permit conditions. In the alternative, the court found that permit conditions that were not directly related to the discharge of dredged or fill material were invalid. Based on our holdings that the Secretary properly delegated his permit-issuing authority to district engineers and that permits may include conditions reasonably related to the discharge of dredged or fill material whether the relationship is direct or indirect, we reverse the district court's dismissal of counts two through thirteen and twenty through thirty-one and remand for reconsideration of their viability under the standard set forth in this opinion.

BACKGROUND

I. Statutory and Regulatory Framework

With several exceptions, the CWA prohibits the discharge of all pollutants into the nation's waters. See 33 U.S.C. 1311(a). The Administrator of the Environmental Protection Agency ("EPA") bears the major federal responsibility for enforcement and interpretation of the CWA.¹ Thus, although the "Secretary" -- defined as "the Secretary of the Army, acting through the Chief of Engineers" -- has authority to issue permits "for the discharge of dredged or fill material into the navigable waters at specified disposal sites," 33 U.S.C. 1344(a), (d), the EPA Administrator can override any individual decision to issue a permit if she finds "that the discharge of such materials . . . will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . ., wildlife, or recreational areas." 33 U.S.C. 1344(c). The CWA instructs the Administrator, in conjunction with the Secretary, to develop guidelines for issuing permits that include consideration of the effect of disposed pollutants on human health and welfare, marine life, and esthetic, recreational and economic values, as well as various scientific criteria and alternatives to the proposed disposal. See 33 U.S.C. 1344(b) (referencing 33 U.S.C. 1343(c)). Knowing or negligent violation of a permit condition subjects the violator to criminal liability. See 33 U.S.C. 1319(c).

The Secretary has delegated his CWA permit-issuing authority to "authorized representatives" of the Chief including "district engineers." 33 C.F.R. 325.8(a), (b). Although permits must contain the name of the district engineer, a lower level employee designated by the district engineer may sign the permit. See 33 C.F.R. 325.8(b). In making permitting decisions, the authorized Corps representative considers criteria contained in 40 C.F.R. Part 230, which was developed by the Administrator, in conjunction with the Secretary, to govern discharge permits issued pursuant to 33 U.S.C. 1344(b), as well as criteria set out in 33 C.F.R. 320.4(a), which lists public interest factors the Army must consider in connection with any permit it issues. The Secretary also has defined by regulation certain terms relevant to his jurisdiction. For instance, "dredged material means material that is excavated or dredged from waters of the United States," 33 C.F.R. 323.2(c), and "fill material means any material used for the primary purpose of replacing an aquatic area with dry land or of changing the bottom elevation of a[] waterbody," 33 C.F.R. 323.2(e).

II. The Iroquois Project

The charges against defendants stem from the construction in 1991 and 1992 of the 370-mile Iroquois pipeline project from Ontario, Canada to Long Island, New York. Defendant Kenneth Austin was the vice president and director of engineering and construction for Iroquois Gas Transmission System Limited Partnership and its agent, the Iroquois Pipeline Operating Co. (collectively, "Iroquois"), which constructed the pipeline. Phenix Environmental, Inc. ("Phenix") performed environmental inspections for Iroquois. Defendant Louise Mango, Phenix' president and principal owner, also acted as Iroquois' manager of environmental affairs. Defendant Kevin Dominske, a Phenix employee, oversaw environmental compliance for Spread Two, a portion of the pipeline project located in northern New York.

Prior to constructing the pipeline, Iroquois had to satisfy several regulatory masters including the Federal Energy Regulatory Commission ("FERC"), which evaluated Iroquois' application to construct the natural gas pipeline. After preparing a final environmental impact statement ("FEIS"), FERC approved the project but required Iroquois to comply with many conditions including those contained in Appendices C and D of the FEIS certificate. See Iroquois Gas Transmission Sys. L.P., 53 FERC 61,194 (Nov. 14, 1990). Appendix D detailed stream and wetland construction and mitigation procedures, while Appendix C set out an erosion control, revegetation, and maintenance plan for all other disturbed areas.

Iroquois also applied to the Army Corps of Engineers for a discharge permit pursuant to the CWA and the Rivers and Harbors Act, 33 U.S.C. 403. The Corps identified two areas of the pipeline work as regulated by the CWA: "backfilling of trenches excavated in waterways and wetland areas, and the placement of any temporary fills in waters of the United States necessary to support construction activities." Record of Decision for Application No. 89-1123-L4 by the Iroquois Gas Transmission System at 15. The Corps' discharge permit, signed by Lieutenant Colonel Richard C. Boston, acting on behalf of Colonel R.M. Danielson, the Corps' New York District Engineer, required, among other things, that Iroquois implement the environmental mitigation measures contained in Appendices C and D of the FEIS.

III. The Indictment

An indictment filed in the United States District Court for the Northern District of New York on October 16, 1996, charges that Iroquois, Phenix, the individual defendants, and certain other individuals violated many of the conditions in the Corps' permit.² The first count of the indictment charges a conspiracy to defraud the United States and violate the CWA, the mail fraud statute, and the bank false reporting statute. Counts two through thirty-one allege knowing and negligent violations of the permit conditions.

IV. District Court Proceedings

After obtaining a bill of particulars, defendants moved to dismiss counts two through thirty-one of the indictment. The district court granted defendants' motion on alternative grounds. See United States v. Mango, 997 F. Supp. 264, 299 (N.D.N.Y. 1998). The court first dismissed counts two through thirty-one because the CWA forbids delegation of permit issuing authority to anyone other than the Chief. See id. at 281. In a ruling not questioned on appeal, the court alternatively dismissed counts fourteen through nineteen pursuant to the rule of lenity, because the conditions incorporated in those counts were ambiguous. See id. at 290-91. The court also indicated that even absent the delegation problem, it would dismiss counts eight through thirteen and twenty-six through thirty-one as well as preclude the government from relying on certain particulars concerning counts two through seven and twenty through twenty-five, because these counts and specifications did not relate to the discharge of dredged or fill materials into the navigable waters of the United States. See id. at 298. These counts and particulars derive from Appendices C and D. The district court did not dismiss count one, the conspiracy count, and the government does not appeal from the district court's dismissal of counts fourteen through nineteen.

V. Scope of Appeal

The government appeals from the dismissal of counts two through thirteen and twenty through thirty-one of the indictment.

DISCUSSION

The district court correctly assumed the truth of the facts described in the indictment, see Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 343 n.16 (1952) but dismissed counts two through...