DUNBAR STONE COMPANY, INC., ET AL., Appellants v. UNITED STATES OF
AMERICA, ET AL., Appellees
No. 84-1915
IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA
BRIEF FOR THE UNITED STATES, ET AL., APPELLEES
Opinion below
Question presented
Statute involved
Statement of the case
A. District court jurisdiction
B. Jurisdiction of the court of appeals
C. Appealability
D. Timeliness of appeal
E. Attorney's fees
F. Statement of facts and proceedings below
Argument
Standard of review The Secretary correctly determined that the
deposit of Yavapai schist within Dunbar's Claims did not have a
distinct and special value, and hence was a common variety of
building stone excluded from location by Section 3 of the Act of
July 23, 1955, 30 U.S.C. 611
Conclusion
Statement of related cases
Addendum A
OPINION BELOW
District Judge Earl H. Carroll did not write an opinion. The
judgment dismissing plaintiffs' complaint appears at page 157 of the
Excerpt of Record ("E.R 157"). The opinion of the Interior Board of
Land Appeals (E.R. 9) is reported at 56 IBLA 61, and is attached to
this brief as Addendum A.
STATEMENT OF THE CASE
Pursuant to Rule l3(b)(1) of the rules of this Court, the United
States, et al., appellees, state:
A. District court jurisdiction. -- In this civil action challenging
a decision of the Interior Board of Land Appeals, on behalf of the
Secretary of the Interior, the district court's jurisdiction was based
on 28 U.S.C. 1331.
B. Jurisdiction of the court of appeals. -- The jurisdiction of this
Court rests on 28 U.S.C. 1291.
STATUTE INVOLVED
Section 3 of the Act of 1955, 69 Stat. 368, as amended, 30 U.S.C.
611, commonly called the "Common Varieties Act," provides:
No deposit of common varieties of sand, stone, gravel, pumice,
pumicite, or cinders and no deposit of petrified wood shall be
deemed a valuable mineral deposit within the meaning of the
mining laws of the United States so as to give effective validity
to any mining claim hereafter located under such mining laws:
Provided, however, that nothing herein shall affect the validity
of any mining location based upon discovery of some other mineral
occurring in or in association with such a deposit. "Common
varieties" as used in sections 601, 603, and 611 to 615 of this
title, does not include deposits of such materials which are
valuable because the deposit has some property giving it district
and special value and does not include so-called "block pumice"
which occurs in nature in pieces having one dimension of two
inches or more * * *.
QUESTION PRESENTED
Whether the determination of the Interior Board of Land Appeals that
Yavapai schist, a kind of building stone, was a "common variety" not
locatable since the enactment of Section 3 of the Act of July 23, 1955,
was supported by substantial evidence where the stone's claimed special
characteristics were not reflected either in a higher market price or
in economy of production so as to differentiate it from vast amounts of
other stone found throughout the area.
C. Appealability. -- The district court's final judgment is
appealable under 28 U.S.C 1291.
D. Timeliness of appeal. -- Judgment was entered February 27, 1984.
Notice of appeal was filed April 25, 1984, within the 60 days
prescribed by Fed. R. App. P. 4(a)(1) and 28 U.S.C. 2107.
E. Attorneys' fees. -- Appellants have not stated that they seek
attorneys' fees.
F. Statement of facts and proceedings below. -- Dunbar Stone
Company, Ronald Dunbar and Gerald Dunbar ("Dunbar") appeal from a
judgment confirming a decision of the Secretary of the Interior /1/
holding that 13 unpatented placer mining claims located after the
enactment of the Common Varieties Act of July 23, 1955, 30 U.S.C. 611,
were invalid because the material involved, Yavapai schist, is a common
variety of building stone within the meaning of that Act. (On appeal,
Dunbar "does not challenge the decision of the District Court as to the
invalidity of the lode mining claims," Br. 3.)
The Secretary's decision was the culmination of administrative
proceedings which were initiated by the filing of a contest by the
Bureau of Land Management on February 28, 1978, charging that the 13
lode claims within Prescott National Forest in Arizona were void for
lack of a discovery and that the lands embraced within their limits are
nonmineral in character. The complaint also alleged that the deposit
of stone found within the limits of the 13 overlying placer claims is
not a valuable mineral deposit within the meaning of Section 3 of the
Act of July 23, 1955, 30 U.S.C. 611, the so-called "Common Varieties
Act." (Also, since a portion of lands on which three of the placer
claims were located was previously withdrawn from mineral entry by
Public Land Order 2303 (26 F.R. 2284, March 17, 1961) the claims as to
these withdrawn lands were void ab initio.)
On June 24, 1980, the administrative law judge, after a two-day
hearing, issued a decision declaring the claims invalid (E.R. 1-7).
On appeal, the IBLA affirmed the ALJ's decision that, although the
Yavapai schist was marketable at a profit, it failed to meet the test
of "unique property" outlined by this Court in McClarty v. Secretary of
the Interior, 408 F.2d 907 (1969), for the stone to qualify as an
"uncommon variety." In reviewing the evidence, the IBLA found that
other deposits of schist were also suited for building stone, that
schist deposits were common throughout the area, that the price
obtained for Dunbar's schist was roughly the same as for other schist,
and that the cost of producing Dunbar's schist was not substantially
less than the cost of producing other schist.
After Dunbar filed suit in district court seeking to overturn the
IBLA's decision, both sides filed motions for summary judgment. The
court granted the government's motion and entered judgment dismissing
Dunbar's complaint (E.R. 157).
This appeal followed.
ARGUMENT
STANDARD OF REVIEW
Judicial review of an adjudicatory decision by the IBLA under the
Administrative Procedure Act is limited to determining whether the
agency decision is arbitrary, capricious, an abuse of discretion, or
unsupported by substantial evidence in the record. 5 U.S.C. 706(2)(A)
and (E). Melluzzo v. Watt, 674 F.2d 819, 820 (9th Cir. 1982) (per
curiam). In so doing, the court does not reweigh the evidence or
substitute its judgment for that of the administrative agency. Rawls
v. United States, 566 F.2d 1373, 1376 (9th Cir. 1978); Henrikson v.
Udall, 350 F.2d 949, 950 (9th Cir. 1965). Review is confined to the
administrative record; a trial de novo is not permitted. Multiple
Use, Inc. v. Morton, 504 F.2d 448, 452 (9th Cir. 1974). /2/
THE SECRETARY CORRECTLY DETERMINED THAT THE DEPOSIT OF
YAVAPAI SCHIST WITHIN DUNBAR'S CLAIMS DID NOT HAVE A
DISTINCT AND SPECIAL VALUE, AND HENCE WAS A COMMON
VARIETY OF BUILDING STONE EXCLUDED FROM LOCATION BY
SECTION 3 OF THE ACT OF JULY 23, 1955, 30 U.S.C. 611
This controversy centers on one clause of the 1955 Act which
excludes from the term "common varieties" a mineral which is valuable
because the deposit has some property giving it distinct and special
value. Section 3 of the Act of July 23, 1955, 69 Stat. 368, 30 U.S.C.
6ll. In this case, the Secretary held that the particular schist
involved here does not rise to the level of an uncommon variety of
building stone when there are vast amounts of schist throughout the
area which are suitable for wall facing with identical uses and appeal.
In United States v. Coleman, 390 U.S. 599 (1968), the Supreme Court
explained the rationale behind Congress' decision to exclude common
varieties of building stone from mineral location under the mining law
-- which may irrevocably transfer land from the public domain to
private ownership -- and to place the disposition of such materials
under the Materials Act of 1947 for a royalty. The Court wrote (pages
603-605):
We believe that the Secretary of the Interior was also correct in
ruling that "in view of the immense quantities of identical stone
found in the area outside the claims, the stone must be
considered a 'common variety'" and thus falling within the
exclusionary language of the 1955 Act, 69 Stat. 368, 30 U.S.C.
Section 611, which declares that " a deposit of common varieties
of . . . stone . . . shall not be deemed a valuable mineral
deposit within the meaning of the mining laws ...." * * * The
legislative history makes clear that this Act (30 U.S.C. Section
611) was intended to remove common types of sand, gravel and
stone from the coverage of the mining laws, under which they
served as a basis for claims to land patents, and to place the
disposition of such materials under the Materials Act of 1947, 61
Stat. 681, 30 U.S.C. Section 601, which provides for the sale of
such materials without disposing of the land on which they are
found. * * *
The schist exists in vast quantity. Schist was first removed from the
claims in 1967 or 1968 under a special use permit from the Forest
Service which expired in 1976, after which the placer claims were
located (E.R. 11; Tr. 267). Mr. Gerhard Seebold, who located his
claims and operated the stone quarries for 15 years, estimated the
amount of the stone within the claims at 60 million tons (Tr. 160,
241). /3/ Mr. Dunbar, one of the owners of the claims, admitted the
schist deposits extend beyond the limits of the claims (Tr. 286-287,
321). Mr. Alexander, a mining engineer who testified for the
contestant, estimated the existence of 40 billion tons of schist
covering 236,400 acres in Yavapai County and 16 billion tons of schist
in 92,168 acres in Maricopa County.
Here, as the IBLA noted, the record evidence was that the schist had
a pleasant earth-tone coloration and it could be blasted out and broken
in such a manner as to tend to maintain sharp, unfeathered edges (56
IBLA at 65, E.R. 13). Appellants' witnesses testified that these
traits were unusual and set the material apart from other types of
schist in the area. Ibid.
Dunbar failed to show that its schist could command a premium price
in the market, or that it could be produced at reduced cost, as the
McClarty decision and Interior's regulations require. /4/
It is not enough for Dunbar to show that it can make money selling
schist from the claims. Many people can profitably sell common variety
building stone, as Congress knew. Mr. Dunbar conceded his schist did
not sell for a higher price than that sold by Apache Stone, a
competitor (Tr. 314). This is dispositive. The attempted explanation
by Dunbar's predecessor-in-interest, why Dunbar's schist commanded no
price premium over other building stone, was his speculation that
contestees were voluntarily "trying to stay within the guidelines of
the general market and within competition and keep their business going
* * *" (Tr. 243). Equally unpersuasive are statements such as this one
by Mr. Handley, a building contractor who testified for Dunbar, that he
would be willing to pay more for Dunbar schist (Tr. 140). The value of
property is not determined by the amount people think it is wise to pay
for it, but rather, what the market pays. New York v. Sage, 239 U.S.
57, 61 (1915).
On appeal, appellants attempt (Br. 6, 14) to show that their
particular stone sells for a much higher price than the average price
for all stone sold in Arizona during 1981. As we have shown, supra, p.
5 n.2, this attempt to augment the administrative record is improper.
Moreover, appellants' tactic is disingenuous. While appellants
correctly inform the Court that the average unit value of all stone
sold in Arizona in 1981 was $4.25 per ton, appellants fail to reveal
that the Minerals Yearbook (Vol. II, page 69) states that most of the
total stone production in Arizona for 1981 was for crushed stone. The
same yearbook further shows (Vol. I, page 781) that the average unit
price of crushed stone was only $3.58 per ton, whereas the average unit
price of dimension stone (i.e., building stone) was $113.04 per ton.
In 1955, Congress withdrew common varieties of stone from location
under the mining law and determined that thereafter such material would
be disposed of under the Materials Act of 1947, for a royalty, and that
the underlying land would not pass forever from public to private
ownership. The IBLA correctly ruled that Dunbar's claims are invalid.
CONCLUSION
For the foregoing reasons, the judgment of the district court
dismissing the complaint should be affirmed.
Respectfully submitted,
/s/ F. HENRY HABICHT, II
F. HENRY HABICHT, II
Assistant Attorney General
/s/ A. MELVIN McDONALD
A. MELVIN McDONALD
United States Attorney Phoenix, Arizona 85025
/s/ MICHAEL A. JOHNS
MICHAEL A. JOHNS
Assistant United States Attorney Phoenix, Arizona 85025
/s/ ROBERT L. KLARQUIST
ROBERT L. KLARQUIST
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-2762
OF COUNSEL:
/s/ T. ADRIAN PEDRON
T. ADRIAN PEDRON
Office of the General Counsel Department of Agriculture
Albuquerque, New Mexico 87102
/s/ R. TIMOTHY McCRUM
R. TIMOTHY McCRUM
Office of the Solicitor Department of the Interior Washington, D.
C. 20240
AUGUST 1984
STATEMENT OF RELATED CASES
Counsel is not aware of any related cases.
/1/ The Secretary's decision was made by the Interior Board of Land
Appeals ("IBLA") pursuant to authority delegated to it by the
Secretary. 43 C.F.R. 4.1.
/2/ The three "exhibits" attached to appellants' brief constitute an
improper attempt to augment the administrative record, in violation of
this Court's decisions and the Federal Rules of Appellate Procedure. It
is improper to urge matters to reviewing courts that were not presented
to the agency. Getty Oil Co. v. Andrus, 607 F.2d 253, 255-256 (9th
Cir. 1979), citing United States v. L.A. Tucker Truck Lines, 344 U.S.
33 (1952).
/3/ Due to a misprint, the IBLA opinion incorrectly states the
figure at 60,000 tons. 56 IBLA at 65 (E.R. 13). The IBLA has already
found that schist deposits in Arizona are a common variety of building
stone. United States v. Melluzzo, 76 I.D. 181, 184 (1979): "We find,
however, that the evidence submitted by the government establishes that
the rocks in the claims are primarily various forms of schist which are
found throughout the Phoenix Mountains for 50 to 60 miles around
Phoenix." Based on the foregoing, appellants' argument (Br. 15) that
the government failed to make a prima facie case is frivolous. Once
the United States has made a prima facie case, the burden shifts to the
mining claimant to show that his claim is valid. See, e.g., Humboldt
Placer Mining Co. v. Secretary of the Interior, 549 F.2d 622, 624 (9th
Cir.), cert. denied, 434 U.S. 836 (1977).
/4/ McClarty v. Secretary of the Interior, 408 F.2d 907, 908 (9th
Cir. 1969). The Department's regulation, which implements 30 U.S.C.
611, is 43 C.F.R. 3711.1(b), and reads in pertinent part:
(b) "Common varieties" includes deposits which, although they may
have value for use in trade, manufacture, the sciences, or in the
mechanical or ornamental arts, do not possess a distinct, special
economic value for such use over and above the normal uses of the
general run of such deposits * * *.
ADDENDUM
No. 84-3246
STATE OF FLORIDA AND CITY OF TAMPA, FLORIDA, et al., Appellants v.
UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Appellees and THE
SEMINOLE TRIBE OF FLORIDA, Intervenor
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE
DISTRICT OF FLORIDA
BRIEF OF THE FEDERAL APPELLEES
STATEMENT REGARDING ORAL ARGUMENT
The United States believes that oral argument is appropriate in this
case because it involves the significant questions of standing and
sovereign immunity. The United States, therefore, requests 15 minutes
for oral argument.
STATEMENT REGARDING PREFERENCE
Pursuant to Eleventh Circuit Rule 22(f)(3), this case is not
entitled to preference in processing and disposition.
I N D E X
DECISION BELOW
The final judgment of the district court dismissing the action
(Honorable Elizabeth A. Kovachevich) appears at pages 200-201 of the
Record on Appeal and in the appellants' Record Excerpts.
JURISDICTION
The final judgment was entered on March 14, 1984 (R. 201).
Appellants filed a notice of appeal on April 9, 1984 (R. 203-204). This
Court's jurisdiction rests on 28 U.S.C. 1291.
STATUTES AND REGULATIONS
Section 5 of the Indian Reorganization Act of 1934, 25 U.S.C. 465;
the Quiet Title Act, 28 U.S.C. 2409a; 25 C.F.R. 1.2; 25 C.F.R. Part
151 are involved in this appeal and have been reproduced in the
Addendum to this brief at pages 23-26, below.
QUESTIONS PRESENTED
1. Whether the State of Florida and the City of Tampa lack standing
to sue when their alleged economic injuries result from state law and
not from the challenged federal action.
2. Whether the Indian Reorganization Act or the Administrative
Procedure Act waives the sovereign immunity of the United States from
suits to divest it of title to property held in trust for Indians.
STATEMENT OF THE CASE
On January 16, 1981, the Department of the Interior, pursuant to
Section 5 of the Indian Reorganization Act of 1934, 25 U.S.C. 465, took
title in the name of the United States on behalf of the Seminole Tribe
of Florida to approximately eight and one half (8.5) acres of land
located in Hillsborough County, Florida, land which was previously
owned in fee by the Tribe. In so acquiring the land, the Secretary
waived the Department's trust acquisition regulations /1/ pursuant to
25 C.F.R. 1.2 and 25 U.S.C. 465, on the ground that waiver was in the
best interest of the Tribe. In making that determination, the
Secretary relied on, inter alia, the congressional policy enunciated in
the American Indian Religious Freedom Act, 42 U.S.C. 1996, to preserve
tribal religious and cultural heritage (R. 8-9). One of the reasons
for acquiring the land was to preserve remains of Seminole Indians and
artifacts which had been found during excavations of a site in the City
of Tampa (R. 8-9).
Sometime after the trust acquisition of the Hillsborough property,
the Tribe prepared an interment site for the Seminole remains, erected
a cultural museum, developed a center for exhibiting Indian art and
craftwork, and set up a "smoke shop," which is a retail store for
selling cigarettes. It is the operation of the smoke shop which forms
the actual basis of plaintiffs' complaint.
On January 28, 1982, the State of Florida and the City of Tampa
filed suit against the Secretary of the Interior seeking (1) a
declaration that the Secretary's acquisition of the Hillsborough
property was null and void; and (2) an injunction to prohibit the
Secretary from holding the property in trust and to require that the
land be reverted to its original status (R. 1-7). Although the
plaintiffs alleged that the Secretary abused his discretion under 25 U.
S.C. 465 by waiving the Department's trust acquisition regulations, the
real charge is that because operation of a smoke shop was allegedly not
one of the purposes contemplated by the Department in accepting the
land into trust, the acquisition was improper. See Complaint,
paragraphs 11 and 12 (R. 4-5). Significantly, the plaintiffs do not
complain that the Secretary abused his discretion by waiving the
Department's regulations with respect to the other activities at the
site, those of the burial site, cultural museum, and Indian art
display.
The harm alleged in the complaint is that the Tribe's activity of
selling tax-free cigarettes on the trust property to the non-Indian
general public deprives the State of Florida and the City of Tampa of
substantial cigarette taxes and revenue sharing funds which would be
levied against the Tribe but for the tax-exempt status of the property.
Complaint, paragraph 13 (R. 5). Further, plaintiffs allege that they
"believe that the Seminoles have or will seek to prevent ad valorem
taxes from being levied on said land * * *." Ibid.
On March 14, 1984, the district court granted the government's
motion to dismiss for the reasons that (1) the plaintiffs lacked
standing to prosecute this action; and (2) the United States had not
waived its sovereign immunity with respect to the subject matter of
this action. This appeal followed.
STANDARD OF REVIEW
When the facts are undisputed, as here, then appellate review of the
district court's decision to dismiss for lack of subject-matter
jurisdiction is purely a question of law. Williamson v. Tucker, 645 F.
2d 404, 413 (5th Cir.), cert. denied, 454 U.S. 897 (1981).
SUMMARY OF ARGUMENT
The district court properly dismissed this action for lack of
subject-matter jurisdiction. The plaintiffs challenged the United
States' acquisition of trust title to certain of the Seminole Indian
Tribe's property. The plaintiffs claimed that they thereby lost the
ability to collect property and cigarette sales taxes. However, because
the State's own constitution and statutes preclude such taxation
regardless of whether title to the property lies in the United States,
the plaintiffs lack standing. Furthermore, because the plaintiffs seek
to divest the United States of its title to this property, they must
point to a waiver of the sovereign's immunity to such suit. This they
cannot do because the Quiet Title Act, 28 U.S.C. 2409a, expressly
preserves the sovereign's immunity from actions involving title to
Indian lands.
ARGUMENT
I
THE PLAINTIFFS LACK STANDING
It is by now well established that to satisfy the case or
controversy requirement of Article III of the Constitution, a plaintiff
must establish an "injury in fact" which "fairly can be traced to the
challenged action" and which "is likely to be redressed by a favorable
decision." Valley Forge Christian College v. Americans United For
Separation of Church and State, Inc., 454 U.S. 464, 472 (1982); Simon
v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 38, 41 (1976);
Warth v. Seldin, 422 U.S. 490, 498-499 (1975); Flast v. Cohen, 392 U.
S. 83, 101 (1968). In addition, a plaintiff must show that the injury
was to an interest "arguably within the zone of interests to be
protected or regulated" by the statutory framework within which his
claim arises. Data Processing Service v. Camp, 397 U.S. 150, 153
(1970); Simon v. Eastern Kentucky Welfare Rights Org., supra, 426 U.S.
at 39 n.19.
The plaintiff State and City failed to make the requisite showings.
First, their alleged economic injuries flow from state law -- not from
the challenged federal action. Second, their alleged injuries are not
redressable because there has not been any waiver of sovereign immunity
for the relief they seek -- divestiture of United States title to the
property held in trust for the Tribe (see Argument II, below). Third,
neither the State nor the City lies within the zone of interests to be
protected by the Indian Reorganization Act of 1934. Finally, the City
has failed to allege any injury to itself because the property in
dispute lies outside the jurisdictional bounds of the City. For all of
these reasons, the court below properly dismissed the complaint.
A. The plaintiffs' alleged economic injury cannot be fairly traced
to the government's trust acquisition of the Hillsborough property. --
The harm alleged in the complaint is that the Tribe's activity of
selling tax-free cigarettes on the trust property to the non-Indian
general public deprives the State of Florida and the City of Tampa of
substantial cigarette taxes and revenue sharing funds which would be
collected from the Tribe under Chapters 210 and 212 of the Florida
Statutes but for the tax-exempt status of the Hillsborough property.
The State alleges further that it will lose revenues if the Tribe does
not pay ad valorem taxes on the trust land. See Complaint, paragraph
13 (R. 5).
These allegations are seriously misleading in suggesting that it is
the trust status of the Hillsborough property which makes both the
cigarette sales and the land tax-exempt. As to the cigarette sales, it
is now well-settled as a matter of federal law that states can impose
cigarette and sales taxes on on-reservation sales by Indians to
non-members of the Tribe. /2/ Washington v. Confederated Tribes of the
Colville Indian Reservation, 447 U.S. 134, 151, 155-157, 161 (1980);
Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463, 482-483
(1976); Seminole Tribe of Florida v. Butterworth, 658 F.2d 310, 317 n.
9 (5th Cir. 1981), cert. denied, 455 U.S. 1020 (1982). The real reason
that the Tribe's cigarette sales to non-Indians are tax exempt is
because the State of Florida forbids such a tax on Indian cigarette
sales. Section 210.05(5) of the Florida Statutes provides:
Agents or wholesale dealers may sell stamped but untaxed
cigarettes to the Seminole Indian Tribe, or to members thereof,
for retail sale. Agents or wholesale dealers shall treat such
cigarettes and the sale whereof in the same manner, with respect
to reporting and stamping, as other sales under this chapter, but
agents or wholesale dealers shall not collect from the purchaser
the tax imposed by s. 210.02 which section imposes an excise tax
on the sale, receipt, purchase, possession, consumption,
handling, distribution, and use of cigarettes in the State of
Florida emphasis added .
See also, Department of Business Regulation, Cigarette Tax Division
Rule 7A-10.26 (State prohibited from taxing cigarette sales by Seminole
Indians to general public under Section 210.05(5)) (this regulation has
been reproduced in Addendum below at 27, 28).
It is essential to note that Florida's statute does not
differentiate between cigarette sales on trust property and those made
on non-trust property. Thus, the State of Florida would not be able to
collect taxes on the Tribe's cigarette sales even if the United States
had not taken the Hillsborough property into trust on behalf of the
Tribe.
This is a classic case of an alleged injury which cannot be traced
to the challenged action of the defendant. See Simon v. Eastern
Kentucky, supra, 426 U.S. 26, 41-42 (1976). The untaxability of the
Seminole Indians' cigarette sale does not result from the federal
government's trust acquisition of the Hillsborough property, but from
the State of Florida's own laws. Plaintiffs' remedy with regard to
deprivation of cigarette taxes, then, lies not with court review of the
United States' trust acquisition but rather with plaintiffs' own
legislature.
Likewise, the State's claim of loss of property tax revenues from
the Hillsborough property could not be redressed by the court below
because Florida's own constitution prohibits the State from levying ad
valorem taxes on real property within the State. See Constitution of
the State of Florida, Article VII, Section 1 (reproduced below at Add.
27). Instead, the power to tax property is vested in the county where
the real estate is located. Op. cit. Paragraph 9 (reproduced below at
Add. 27). The County of Hillsborough, where the subject property is
located, has declined to participate in this lawsuit. Because the State
has no power to impose real property taxes, it cannot be harmed by the
change in ownership of the Hillsborough property, and therefore has no
standing to bring this action. /3/ Again, the plaintiffs have failed
to establish the required "causal connection between the claimed injury
and the challenged conduct." Duke Power Co. v. Carolina Env. Study
Group, 438 U.S. 59, 72 (1978).
In addition, as will be explained below, the State's interest in
collecting cigarette and property taxes does not fall within the zone
of interests protected or regulated by the Indian Reorganization Act of
1934. On that ground, too, plaintiffs lack standing to bring this
action.
B. Plaintiffs' tax interests lie outside the zone of interests
protected by the Indian Reorganization Act of 1934. -- The statutory
framework within which plaintiffs' claim, if any, arises is the Indian
Reorganization Act of 1934 (I.R.A.), 25 U.S.C. 461 et seq.; /4/
specifically, 25 U.S.C. 465 which authorizes the Secretary to acquire
land in trust for Indians and Indian tribes. By its plain terms, that
provision exempts trust property from state and local taxation.
Clearly, 25 U.S.C. 465 cannot be cited by the State and City as
protecting their interests in property taxation. /5/
The I.R.A. also does not serve to protect the appellants' interest
in cigarette-sales taxation. As its name suggests, the the Indian
Reorganization Act was enacted for the protection and enhancement of
Indians; Indians are its exclusive beneficiaries. See generally
Mescalero Apache Tribe v. Jones, 411 U.S. 145, 152-153 (1973);
Mescalero Apache Tribe v. O'Cheskey, 439 F. Supp. 1063, 1073 (D.N.M.
1977), aff'd, 625 F.2d 967 (1980), cert. denied, 450 U.S. 959 (1981).
Thus, 25 U.S.C. 465 vests broad discretion in the Secretary to acquire
any property interest "for the purpose of providing land for Indians."
The Act contains no judicial review provisions pertaining to the
Secretary's trust acquisitions. Nowhere does the Act or its
regulations confer on states or other third parties a substantive right
against the United States to obtain judicial relief from a trust
acquisition. Indeed, the I.R.A. does not empower the Secretary to
remove land held in the name of the United States from trust (title to
any land acquired pursuant to 25 U.S.C. 465 "shall be taken in the name
of the United States"). Nor does the Act permit the Secretary to
dispose of tribal lands without tribal consent. 25 U.S.C. 476.
Significantly, until 1983, no federal statute of general applicability
authorized a tribe or the Secretary to remove tribal land from trust
status. The only general exception to the direct control of Congress
over the disposition of tribal lands is Section 204 of the Indian Land
Consolidation Act of 1982, 25 U.S.C. 2203. Under that section, a tribe
may dispose of interests in trust land, but only under certain
conditions and with the approval of the Secretary. Even under this
recent legislation, the Secretary has no power unilaterally to remove
tribal land from trust status. In sum, the only interests which the I.
R.A. expressly or implicitly protects are those of the Indian tribes.
However, should any doubt remain regarding Congress' intent in enacting
the trust acquisition provision of the I.R.A., then the Court must
construe the statute in the light most favorable to the Indians. Choate
v. Trapp, 224 U.S. 665 (1912); Santa Clara Pueblo v. Martinez, 436 U.
S. 49 (1978); Felix S. Cohen's Handbook of Federal Indian Law (1982
ed.), pages 221-225. A strict construction in favor of the Seminole
Tribe would find that Congress' silence with regard to review of the
Secretary's trust acquisitions meant that Congress intended to limit
the availability of federal judicial review to the affected tribe.
C. The City of Tampa has no jurisdiction over the Hillsborough
property and, therefore, has no standing to complain of the activities
occurring thereon. -- Because the subject property lies outside the
corporate boundaries of the City of Tampa (see Letter from City to
Secretary of the Interior below at Addendum page 22), the plaintiff
city has no taxing or regulatory powers over the trust property. Hence,
the owner ship status of the Hillsborough property does not in any way
affect the interests of the City.
The City's argument that it is being deprived of general revenue
funds /6/ which would derive from the State's tax on cigarette sales
but for the trust status of the Hills borough property is wholly
without merit. As shown above, it is Florida law and not federal law
which prohibits the imposition of any kind of a tax on the Seminole
Tribe's smoke shop activities. F.S.A. Section 210.05(5). Therefore,
the trust status of the property is irrelevant to the City's complaint
that its share of the cigarette tax revenues is reduced because of the
tax exemption allowed the Seminole Tribe. Any taxing exemptions the
State of Florida chooses to confer upon its citizens can in no way
constitute a basis for standing on the part of the City of Tampa to
challenge the federal government's trust acquisition of the
Hillsborough property.
For all of the reasons outlined above, including those discussed
with regard to the State of Florida, the City of Tampa lacks standing
to maintain this suit.
II
THIS ACTION IS BARRED BY THE DOCTRINE OF SOVEREIGN IMMUNITY
A. In reality, this suit is directed against the United States and
not against the Department of the Interior or its Secretary. --
Although the plaintiffs named only the Department of the Interior and
its Secretary in their complaint, the thrust of this suit is actually
against the proprietary interest of the United States. The test to
determine if the United States is the real party in interest in a suit
nominally directed against a federal agency or officer is whether a
decree for plain tiff would actually affect the United States' fiscal,
proprietary, or programmatic interest in some way. Larson v. Domestic
and Foreign Commerce Corp., 337 U.S. 682, 687-688 (1949); Hawaii v.
Gordon, 373 U.S. 57, 58 (1963); Dugan v. Rank, 372 U.S. 609, 620
(1963); Stafford v. Briggs, 444 U.S. 527, 542 n.10 (1980); Simons v.
Vinson, 394 F.2d 732, 736 (5th Cir.), cert. denied, 393 U.S. 968
(1968). Here, the plaintiffs' objective is to divest the United States
of title to the Hillsborough property by means of a judicial
declaration that its trust acquisition of the property is invalid and a
judicial order that the land revert to its original status. A clearer
case wherein the United States and not the named federal agency is the
actual defendant cannot be imagined. Hawaii v. Gordon, supra, 373 U.S.
at 58.
B. Sovereign immunity bars actions against the United States except
to the extent Congress has waived the immunity. -- Once it is
determined that the United States is the real partydefendant in the
case, the next inquiry is whether sovereign immunity with respect to
the subject matter of the action has been waived, for it is well
settled that the United States cannot be sued without its consent.
United States v. Testan, 424 U.S. 392, 399 (1976); United States v.
Sherwood, 312 U.S. 584, 586 (1941); United States v. Timmons, 672 F.
2d 1373, 1378 (11th Cir. 1982). Moreover, that consent to suit "cannot
be implied but must be unequivocally expressed." Army & Air Force
Exchg. Serv. v. Sheehan, 456 U.S. 728, 734 (1982); United States v.
Mitchell, 445 U.S. 535, 538 (1980). The subject matter of this action
is fee title ownership of the Hillsborough property. Plaintiffs claim
that the Tribe owns the land in fee because the United States
improperly took title in itself. Based on this claim, plaintiffs seek
an order divesting the United States of its title. However, none of the
statutes relied on by the plaintiffs operates to waive the sovereign's
immunity to an action challenging its title to this property. Indeed,
no statute exists which would permit a plaintiff to obtain a federal
court order requiring affirmative action by the United States to divest
itself of title to Indian trust property.
C. The federal question statute, the mandamus statute, and the
Indian Reorganization Act of 1934 do not waive the United States'
sovereign immunity with respect to this suit. -- The federal question
statute, 28 U.S.C. 1331, /7/ and the mandamus statute, 28 U.S.C. 1361,
/8/ are both strictly jurisdictional. They waive the sovereign's
immunity only to the extent provided by the substantive statute giving
rise to the cause of action. Garcia v. United States, 666 F.2d 960,
966 (5th Cir.), cert. denied, 459 U.S. 832 (1982); Doe v. Civiletti,
635 F.2d 88, 94 (2d Cir.1980). /9/ The plaintiffs vaguely assert that
the Indian Reorganization Act supplies the substantive authority for
the relief they seek. That Act, however, nowhere suggests that
Congress intended to waive the United States' sovereignty with respect
to title to trust lands. To the contrary, as discussed above, the
Secretary is powerless under the I.R.A. to revoke the trust status of
land previously taken into trust. (See Letter, R. 10-11.) Moreover,
the I.R.A. specifically requires tribal consent before the Secretary
can dispose of land held on behalf of a tribe. 25 U.S.C. 476. Thus,
plain tiffs can point to no provision of the I.R.A. which provides them
with a substantive right to bring this action or which provides the
necessary consent to suit to enforce such a non-existent right.
D. Section 10 of the Administrative Procedure Act does not waive the
United States' sovereign immunity with regard to land ownership
disputes. -- Section 10 of the Administrative Procedure Act (APA), 5 U.
S.C. 702, does not waive the sovereign immunity of the United States in
cases where title to property will be affected. It is settled law that
sovereign immunity "cannot be implied but must be unequivocally
expressed." United States v. King, 395 U.S. 1, 4 (1969); United States
v. Mitchell, supra, 445 U.S. 535, 538. The APA provides a waiver of
sovereign immunity as to judicial review of federal agency action.
However, as explained above, this suit does not in substance involve a
review of agency action, but rather, involves a resolution of disputed
title to land. Plaintiffs will not be satisfied with a simple
declaration that the agency erred in waiving its regulations; /11/
plaintiffs seek affirmative action by the Secretary divesting the
United States of title to the property. See Reid v. United States, 715
F.2d 1148, 1154 (7th Cir. 1983) (claim that transfer of property by
condemnation was void is effectively an action to quiet title against
the United States).
The Secretary of the Interior, however, has no authority to perform
this divestiture. And, the United States has not consented to suit
here. Hence, even if the Secretary's trust acquisition were reviewed,
no relief would be available to plaintiffs. For this reason, Section
10 of the APA does not "unequivocally" provide the consent to suit
necessary for plain tiffs to maintain this action. Indeed, the APA
expressly states: "nothing herein * * * confers authority to grant
relief if any other statute that grants consent to suit expressly or
impliedly forbids the relief which is sought." 5 U.S.C. 702(2). As
shown below, the Quiet Title Act expressly forbids the relief sought
here. Block v. North Dakota, 103 S. Ct. 1811, 1819 n.22 (1983).
E. The Quiet Title Act grants only a limited consent to suit not
applicable to Indian lands. -- In 1972, Congress waived the United
States' sovereignty in matters affecting its title to land but in doing
so, expressly reasserted the immunity of the United States in actions
involving Indian lands. 28 U.S.C. 2409a; H.R. Rep. 92-1559, 92d
Cong., 2d Sess., reprinted in 1972 U.S. Code Cong. & Ad. News
4547-4557. Last term, the Supreme Court removed any doubt but that the
Quiet Title Act provides the "exclusive procedure" by which title of
the United States to real property may be challenged. Block v. North
Dakota, 103 S. Ct. 1811, 1814, 1819 (1983). There, the State of North
Dakota challenged United States ownership of a river bed. Naming only
certain government officials as defendants, the State purported to base
jurisdiction on the APA and the federal question statute. The Supreme
Court bluntly rejected the State's use of the "officer's suit" " a s a
device for circumventing federal sovereign immunity in land title
disputes * * *." Id. at 1816. Especially pertinent to the case at hand
is the Court's explanation id. at 1818 :
If we were to allow claimants to try the Federal Government's
title to land under an officer'ssuit theory, the Indian lands
exception to the QTA would be rendered nugatory.
For this very reason, plaintiffs' action was properly dismissed. /12/
Their current argument that the "jurisdictional issues are
intertwined with the substantive merits" (Br. 36) must also fail: they
cannot use the APA to circumvent the Quiet Title Act.
Although Florida's complaint purports to be an action for
administrative review, the relief requested is a declara tion and order
that title revert from the United States to the Indians. Hence, this
action is expressly barred by 28 U.S.C. 2409a. See 5 U.S.C. 702(2).
CONCLUSION
For or the foregoing reasons, the United States urges this Court to
affirm the dismissal of this action.
Respectfully submitted,
/s/ F. HENRY HABICHT, II
F. HENRY HABICHT, II
Assistant Attorney General
/s/ ROBERT W. MERKLE
ROBERT W. MERKLE
United States Attorney Tampa, Florida 33602
/s/ MARTIN W. MATZEN
MARTIN W. MATZEN
/s/ WENDY B. JACOBS
WENDY B. JACOBS
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-4168
AUGUST 1984
/1/ 25 C.F.R. Part 120a (1981); presently 25 C.F.R. Part 151.
/2/ Cf. Mescalero Apache Tribe v. Jones, 411 U.S. 145, 151, 155-157
(1973) (activities conducted by Tribe on offreservation trust property
acquired by the United States under 25 U.S.C. 465 are subject to
nondiscriminatory state taxation).
/3/ For this reason, the proposed amendment to the complaint --
alleging that the property did not appear on the County's tax rolls for
year 1982 (R. 127-128) -- does not cure the deficiency of the original
complaint. The State lacks authority under its own constitution to
impose ad valorem taxes.
/4/ Assuming for sake of the standing argument that under Section 10
of the Administrative Procedure Act (APA), 5 U.S.C. 702, the United
States has consented to be sued with respect to this type of action
(see, however, argument II.D. below as to why the APA does not waive
sovereign immunity in this matter), plaintiffs still must establish the
existence of a statute which provides them with a legally-enforceable
right. Section 702 reads in pertinent part: "A person suffering legal
wrong because of agency action, or adversely affected or aggrieved by
agency action within the meaning of a relevant statute, is entitled to
judicial review thereof" (emphasis added). Hence, even if sovereign
immunity is waived under the APA, plaintiffs still have the burden of
proving that a "relevant statute" gives them standing to challenge the
administrative action or gives this Court authority to review such
administrative action. United States v. Mitchell, 445 U.S. 535, 538
(1980); Barlow v. Collins, 397 U.S. 159, 164 (1970).
/5/ Appellants rely on the trust acquisition regulations,
specifically 25 C.F.R. 151.10(e), under which the agency will consider
"the impact on the State and its political subdivisions resulting from
the removal of the land from the tax rolls." Their reliance is
misplaced. First, this is merely one factor to be considered: were
such an impact on the tax rolls deemed to preclude acquisition, then
the regulation would undermine the statute, 25 U.S.C. 465, which
provides for trust acquisitions and also specifically exempts the
acquired property from ad valorem taxes. Second, the State of Florida
may not in any event impose ad valorem taxes (see text above) and the
County of Hillsborough is not a party to this suit.
/6/ The state taxes levied on cigarette activity within the State of
Florida are divided, in part, into two revenue funds which are then
distributed to municipalities depending on their eligibility. F.S.A.
Sections 200.132(1), 210.20(2)(a), 218.215(2), 218.23, and 218.245(2).
Those two funds are the Municipal Financial Assistance Trust Fund and
the Revenue Sharing Trust Fund for Municipalities.
/7/ 28 U.S.C. 1331 provides:
The district courts shall have original jurisdiction of all
civil actions arising under the Constitution, laws, or treaties
of the United States.
/8/ 28 U.S.C. 1361 provides:
The district courts shall have original jurisdiction of any
action in the nature of mandamus to compel an officer or employee
of the United States or any agency thereof to perform a duty owed
to the plaintiff.
/9/ Cf. United States v. Mitchell, 77 L.Ed.2d 580, 591, 103 S. Ct.
2961 (1983) (the Tucker Act only waives the sovereign's immunity to the
extent that "a source of substantive law can fairly be interpreted as
mandating the relief sought .")
/10/ Cf. Higginson v. United States, 384 F.2d 504, 507 (6th Cir.
1967) (per curiam), cert. denied, 390 U.S. 947 (1968) (once government
files a declaration of taking, landowner may challenge the government's
title only on the ground that the taking was not for the prescribed
statutory purpose; landowner may not seek a reconveyance of the
property on the ground that the government subsequently abandoned the
original purpose because title may not be returned without
congressional authorization).
/11/ Thus, the plaintiffs' argument on appeal that the Secretary has
acted "ultra vires" (Br. 32) cannot avail them. For, they do not
assert that the waiver regulation is invalid or that the trust
acquisition statute on its face precludes the waiver or acquisition in
this case. Indeed, the plaintiffs do not even challenge the
acquisition or the waiver of the regulations with regard to the
Indians' use of the property to inter remains and build and operate a
cultural museum.
/12/ We would submit that the Supreme Court's decision in Block v.
North Dakota also overrules the district court's review of the agency's
decision to acquire trust property (under 25 U.S.C. 465) in City of
Sault Ste. Marie, Mich. v. Andrus, 458 F. Supp. 465 (D.D.C. 1978), 532
F. Supp. 157 (D.D.C. 1980). We point out that the United States had no
opportunity to appeal the sovereign immunity question in City of Sault
Ste. Marie because the United States won on the merits.
CERTIFICATE OF SERVICE
I hereby certify that copies of the foregoing Brief of the Federal
Appellees have been served by U.S. mail, postage prepaid, properly
addressed, this 30th day of July 1984, to:
Harold F.X. Purnell, Esquire General Counsel Department of
Business Regulation 725 S. Bronough Street Tallahassee, Florida
32301 Joseph C. Mellichamp, Esquire Assistant Attorney General
The Capitol Tallahassee, Florida 32301 Jack M. Skelding, Jr.,
Esquire Madigan, Parker, Gatlin, Swedmark & Skelding P.O. Box 669
Tallahassee, Florida 32302 Joseph G. Spicola, Jr., Esquire City
Attorney City Hall 305 Jackson Street Tampa, Florida 33602
Charles W. Ross, Esquire Greene, Mann, & Mastry, P.A. P.O. Box
3542 St. Petersburg, Florida 33731 Robert W. Merkle, Jr., Esquire
United States Attorney Robert Timberlake Building Room 410 500
Zack Street Tampa, Florida 33602 /s/ WENDY B. JACOBS WENDY B.
JACOBS Attorney, Department of Justice Washington, D.C. 20530
ADDENDUM
JACK J. BENDER, Plaintiff-Appellee v. WILLIAM P. CLARK, et al.,
Defendants-Appellants
No. 83-1306
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
NEW MEXICO
SUPPLEMENTAL BRIEF FOR THE APPELLANTS
At oral argument, the Court raised the question of its jurisdiction
to review the district court's order in this case and requested
supplemental briefing by the parties. The federal appellants submit
that the district court's order was a "final decision" within the
meaning of 28 U.S.C. 1291 and that the Ninth Circuit's decision in
Eluska v. Andrus, 587 F.2d 996 (1978), cited by the Court at argument,
should not be applied in this case.
1. Appellee brought this action to review a decision of the Interior
Board of Land Appeals (IBLA) affirming the rejection of appellee's
application for a non-competitive oil and gas lease on public lands.
The basis for the rejection was a determination by the United States
Geological Survey that the lands were within a known geologic
structure. In reaching its decision, the IBLA required appellee to
make a "clear and definite showing of error" in the determination of
the Geological Survey. On review, the district court accepted
appellee's contention that he need only show by a preponderance of the
evidence that the Geological Survey had erred. Accordingly, it entered
an order denying both the appellants' motion to affirm the IBLA
decision and the appellee's motion to set aside that decision; further,
the court ordered that "this case should be remanded to the
Administrative Law Judge for the entry of a Decision in accordance with
the Memorandum Opinion filed herein." It is from that order that the
federal defendants have appealed, and the question here is whether this
order is final within the meaning of 28 U.S.C. 1291.
2. As this Court has noted, whether a particular order is final for
the purposes of appeal is often a close question, Paluso v. Matthews,
573 F.2d 4, 7 (1978); in resolving this question, this Court has been
guided by the Supreme Court's direction that a practical rather than a
technical approach should be the rule in the interpretation of the
finality requirement. Paluso v. Matthews, supra, 573 F.2d at 8;
Ringsby Truck Lines v. United States, 490 F.2d 620, 624 (10th Cir.),
cert. denied, 419 U.S. 833 (1974), citing Gillespie v. United States
Steel Corp., 379 U.S. 148, 152 (1964); Cohen v. Beneficial Industrial
Loan Corp., 337 U.S. 541, 546 (1949). Accord: Gueory v. Hampton, 510
F.2d 1222, 1225 (D.C. Cir. 1975); Cohen v. Perales, 412 F.2d 44, 48
(5th Cir. 1969), rev'd on other grounds sub nom. Richardson v. Perales,
402 U.S. 389 (1971).
3. Ordinarily, an order remanding a case to an administrative
agency, such as the one entered here, is not appealable as a final
order. Loffland Bros. Co. v. Rougeau, 655 F.2d 1031, 1032 (10th Cir.
1981); United States v. Alcon Laboratories, 636 F.2d 876, 884 (1st
Cir. 1981); Paluso v. Matthews, supra, 573 F.2d at 8. See Matter of
Glover, Inc., 697 F.2d 907, 909-910 (10th Cir. 1983). An exception
exists, however, where the basis of the remand is a district court
decision adverse to the government that is conclusive on an issue of
important significance to other cases and where the government is
unlikely to obtain review if an immediate appeal is foreclosed. Thus,
the Fifth Circuit, in Cohen v. Perales, supra, held that a district
court order remanding a disability benefits case for hearing pursuant
the district court's limitation on the use of hearsay evidence was
appealable. 412 F.2d at 48. The court concluded that the government's
objection to the evidentiary restrictions imposed by the district court
would be forever lost unless appeal from the remand order was
permitted, since after remand, further review in the courts would be
confined to the issue of whether substantial evidence supported the
administrative determination. Id. The remand order therefore met the
qualifications for an appealable collateral order set out in the
Supreme Court's decision in Cohen v. Beneficial Industrial Loan Corp.,
supra. Id. Similarly, the District of Columbia Circuit reviewed a
district court order remanding a civil service discharge case for a
specific finding as to how the employee's manslaughter conviction would
not promote the efficiency of the civil service. Gueory v. Hampton,
supra, 510 F.2d at 1225. The primary basis for the court's holding was
its conclusion that "if review is not allowed now, the Government would
probably never be able to test the legal correctness" of the district
court's ruling. Id. This Court, in Paluso v. Matthews, supra, has
recently held final an order remanding a claim for black lung
disability benefits; the issue was whether the Department of Health,
Education and Welfare could award benefits for claims prior to the 1973
transfer of black lung claims to the Department of Labor. 573 F.2d at
. The court declared that this ruling was immediately appealable
since it affected the rights of individuals other than the plaintiffs
and required an immediate answer. 573 F.2d at 8. Concluding that on
balance the danger of delaying justice outweighed the inefficiencies of
piecemeal review, the court allowed the appeal. Id. The First Circuit
recently reviewed a remand order in an action brought by the Food and
Drug Administration to seize drugs alleged to be marketed in violation
of the "new drug" provisions of the Food, Drug and Cosmetic Act, 21 U.
S.C. 355. United States v. Alcon Laboratories, supra. The district
court remanded the case to the FDA for an administrative hearing on
whether the drug was a "new drug;" the court of appeals, applying the
collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp.,
supra, held the remand order was appealable. 636 F.2d at 884-885. The
court concluded that the legal correctness of the district court's
requirement for an administrative hearing was a question separate from
the merits of the claim that the laboratory was marketing a "new drug;"
that the ruling was final and not subject to revision; that the
validity of the order would not be subject to review following the
remand; and that the question presented was of broad importance to the
public and the FDA. Id.
4. The remand order entered here is no less appealable than those
reviewed in the foregoing cases. The district court has issued a
ruling determining the quality of the evidentiary showing that an oil
and gas lease applicant must make to overcome a determination of the
Geological Survey that the lands in question are within a known
geological structure; and the court has rejected the different rule
applied by the Interior Department. The question presented is a purely
legal one and the district court's determination is conclusive and not
subject to revision. As in Cohen v. Perales, supra and United States
v. Alcon Laboratories, supra, this procedural question is essentially
separate from the underlying claim that the lands are not within a
known geological structure. Furthermore, the issue is an important one
for the Interior Department and has obvious impact beyond this
particular case. See United States v. Alcon Laboratories, supra;
Paluso v. Matthews, supra. Finally, the government is no more likely
to obtain effective review after the proceedings on remand than it was
in United States v. Alcon Laboraties, supra; Gueory v. Hampton, supra,
and Cohen v. Perales, supra. If the IBLA, applying the standard
mandated by the district court, renders a decision favor able to the
appellee, its complaint in the district court would presumably be
dismissed and the government would not be sufficiently aggrieved to
appeal. The Interior Department has no authority to seek judicial
review of its own decisions. If the IBLA decision is adverse to the
appellee, he might then pursue his right to judicial review in the
district court, but the issue then would be whether the decision of the
IBLA was arbitrary and capricious, 5 U.S.C. 706(2)(A), and not whether
the correct burden of proof had been placed on appellee. /1/ See Cohen
v. Perales, supra. This order then, plainly falls into the class of
remand orders that this Court and others have held to be final within
the meaning of 28 U.S.C. 1291. As this Court found in Paluso v.
Matthews, supra, the danger of delaying justice here (and delay here
most likely means a denial of justice) clearly outweighs any possible
inefficiencies in permitting piecemeal review. 573 F.2d at 8.
5. Nor does the case cited by the Court at argument, Eluska v.
Andrus, supra, stand for the contrary proposition. There, the Ninth
Circuit dismissed an appeal brought by an Alaska Native, who had sought
review in the district court of an IBLA decison rejecting her
applications for allotments under the Alaska Native Land Allotment Act,
43 U.S.C. 2701 to 270-3 (1970). 587 F.2d at 997-998. The district
court denied the applicant's motion for summary judgment and remanded
for an administrative hearing pursuant to newly promulgated regulations
of the IBLA. Id. at 998-999. The court of appeals concluded the
district court had merely required the applicant to exhaust her
administrative remedies prior to renewing her claim on the merits in
the district court. Id. at 999-1000. The court held that this order
was not appealable because it was subject to revision in the district
court, because it required consideration of the merits of the
underlying claim and because dismissing the appeal would not prevent
later review of the applicant's claim for relief. Id. at 1001. The
circumstances presented here are significantly different. As we have
shown, the government is aggrieved by the district court's ruling on a
legal question that is essentially separate from the underlying merits
of appellee's claim. The decision is conclusive and not subject to
revision. In Eluska v. Andrus the remand was for the development of
additional evidence pursuant to newly promulgated procedures of the
Interior Department; here the purpose is merely to apply a different
legal standard to the existing record. Furthermore, effective review
of this importanty quwestion will be denied the government unless this
appeal is permitted now. Consequently, the decision in Eluska v.
Andrus has no application here. /2/ Therefore, we submit the district
court's order is appealable and should be reversed for the reasons
presented in our briefs and at oral argument.
Respectfully submitted
/s/ F. HENRY HABICHT, II
F. HENRY HABICHT, II
Assistant Attorney General
/s/ WILLIAM LUTZ
WILLIAM LUTZ
United States Attorney Albuquerque, New Mexico 87103
/s/ HERBERT A. BECKER
HERBERT A. BECKER
Assistant United States Attorney Albuquerque, New Mexico 87103
/s/ ANNE S. ALMY
ANNE S. ALMY
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-2740
AUGUST 1984
/1/ Conceivably, the IBLA might provoke a clearly appealable order
by refusing to enter a new decision in accordance with the district
court's instructions, but the government should not be forced to risk
contempt in order to obtain effective review of this order. See Covey
Oil Co. v. Continental Oil Co., 340 F.2d 993, 996-997 (10th Cir.),
cert. denied, 380 U.S. 964 (1965) (nonparty witnesses subject to
discovery orders need not disobey orders and risk contempt to obtain
review of the validity of the subpoenas).
/2/ Nor are two of this Court's decisions dismissing appeals from
remand orders any more applicable than Eluska v. Andrus. In Loffland
v. Rogeau, supra, the district court, in reviewing a decision to bar a
company from government contracts, remanded the casse to the Office of
Federal Contract Compliance Programs to determine the agency's current
position on the propriety of the debarment. 644 F.2d at 1032. Plainly,
no separate issue of importance that had been conclusively determined
was under review. The circumstances in Matter of Glover, Inc., supra,
are similarly distinguishable; there the district court remanded to
the bankruptcy judge for explanation of its reasons for denying a claim
for preference. 697 F.2d at 910.
ROSS W. CORTESE, ET AL., Plaintiffs/Counterdefendants/ Appellants
and GREAT AMERICAN FEDERAL SAVINGS AND LOAN ASSOCIATION,
Counterdefendant/Counterclaimant/Appellant v. UNITED STATES OF AMERICA,
Defendant/Counterclaimant/ Appellee
No. 84-5841 & 84-5846
IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
ON APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA
BRIEF FOR THE UNITED STATES OF AMERICA, APPELLEE
OPINION BELOW
The Findings of Fact and Conclusions of Law of the district court
(Honorable Laughlin E. Waters) are not reported. The Findings of Fact
and Conclusions of Law appear as item number 197 of the Clerk's Record
("C.R.") and are reproduced at pages 255-273 of the Excerpt of the
Record ("E.R.") filed by appellants Ross W. Cortese, et al.
STATEMENT
Pursuant to Rule 13(b)(1) of the rules of this Court, the government
states as follows:
(a) District court jurisdiction. -- This is an action seeking to
quiet title to real property in which the United States claims an
interest; consequently, the district court's jurisdiction over the
plaintiffs' action rests on 28 U.S.C. 1346(f) and 2409a. The district
court's jurisdiction over the government's counterclaims rests on 28 U.
S.C. 1345.
(b) Jurisdiction of the court of appeals. -- The jurisdiction of
this Court is invoked under 28 U.S.C. 129l.
ISSUES PRESENTED
1. Whether the Supplemental Declaration of Restrictions, which
restricts the use of a portion of the plaintiffs' property for the
benefit of the Marine Corps Air Station, El Toro, embodies a permanent
property interest not subject to termination by doctrines of "changed
circumstances" or "changed conditions".
2. Whether the trial judge committed misconduct in the course of his
view of the litigation site.
3. Whether the district court abused its discretion in granting the
government's motion to dismiss one of its counterclaims against
Rossmoor.
4. Whether, under the facts of this case, the United States must be
estopped or otherwise barred from seeking to enforce the Supplemental
Declaration of Restrictions against Great American.
(c) Appealability. -- The judgment appealed from disposes of all
claims with respect to all issues. Consequently, the judgment is
appealable under 28 U.S.C. 1291.
(d) Timeliness of the appeal. -- Judgment was entered on January 9,
l984 (E.R. 274). An order denying timely motions for a new trial was
entered on February 24, l984 (E.R. 570). Ross W. Cortese, et al.,
filed their notice of appeal on April 20, l984 (E.R. 576) and Great
American filed its notice of appeal on April 23, 1984 (C.R. 229). The
notices of appeal were thus timely filed under 28 U.S.C. 2107 and Rule
4(a)(1), Fed. R. App. P.
These are appeals from a judgment confirming the government's
continuing right to enforce a Supplemental Declaration of Restrictions
("SDR") by which the Rossmoor Corporation agreed to restrict
development of approximately 170 acres of its property for the benefit
of the Marine Air Corps Station, El Toro. The SDR was executed as part
of a stipulated settlement and judgment in the Court of Claims
resolving an action in which Rossmoor had sued the United States to
recover compensation for the taking of an interest in Rossmoor's
property. In addition to upholding the continuing validity of the SDR,
the district court ordered the removal of a building constructed in
violation of the agreement. The relevant facts of this appeal may be
summarized as follows.
A. MCAS EL Toro and the 1963 Declaration of Restrictions. -- The
United States Marine Corps Air Station, El Toro ("MCAS El Toro") is
located in Orange County, California, near the City of Irvine. MCAS El
Toro was commissioned in March l943, and has been in continuous
operation since that date. In l950, the Air Station became a Master
Jet Air Station. The Third Marine Air Wing has been headquartered at
MCAS El Toro since 1955. The aircraft currently assigned to El Toro
include high performance jet aircraft such as F-4 Phantoms, A-4
Skyhawks and A-6 Intruders. (E.R. 258.) The principal runway for
landings at El Toro is Runway 34R, which is aligned in an approximate
north-south direction.
In l961, the Rossmoor Corporation purchased a 2,200-acre tract in
Laguna Hills for the purpose of developing a planned resi dential
retirement community known as Leisure World. Rossmoor's tract lies to
the south of MCAS El Toro and, consequently, a portion of the tract
lies directly underneath the extended centerline of Runway 34R, the
main approach corridor to the Air Station. (E.R. 258.) The north
boundary of Rossmoor's tract is located approxi mately 2.7 miles south
of the southernmost point of that runway.
Following Rossmoor's acquisition of the tract and the disclosure of
its development plans, responsible Marine Corps officers became
concerned that the anticipated development would lead to conflicts with
the continuing use of El Toro for military jet aviation, primarily in
the form of air and ground safety hazards and noise complaints from
future residents and occupants. Beginning in 1962, Marine Corps
representatives took a series of actions to secure a "greenbelt" or
open corridor through the portion of Rossmoor's property which
underlies the approach corridor for Runway 34R. These actions included
filing objections and protests to Orange County governmental bodies
when the County was considering Rossmoor's rezoning requests and
lodging objections with the Federal Housing Administration pertaining
to the financing of the Leisure World project (Govt. Supp. E.R. 30-32).
Eventually, the United States and Rossmoor came to an agreement by
which the parties ostensibly resolved their differences. In l963,
Rossmoor, acting through its President, Ross W. Cortese, executed a
Declaration of Restrictions by which Rossmoor agreed to subject all of
that portion of its Leisure World tract located with in 2,000 feet on
each side of the extended runway center line to certain development and
use restrictions for the benefit of the United States (Govt. Supp. E.R.
29-41). Specifically, the Declaration of Restrictions provided that a
2,000 foot wide strip, located l,000 feet on each side of the extended
runway center line and designated as the "A Area" would be used for
"greenbelt" purposes only. The remaining l,000 foot strips on either
side of the "A Area" would be subject to lesser degrees of
restrictions. In turn, the United States agreed to drop the objections
which it had made to Orange County and the Federal Housing Authority.
B. The Court of Claims litigation and the SDR. -- In November l967,
Rossmoor filed a petition in the United States Court of Claims seeking
to recover compensation "under that portion of the Fifth Amendment to
the Constitution of the United States which prohibits the taking of
private property for public use without just compensation." Rossmoor
Corporation v. United States ("Rossmoor I"), No. 396-67. /1/
Roosmoor's petition alleged, among other things, that the United
States, acting through the Department of the Navy, had "planned and
launched a vigorous, deliberate, and intensive plan and program to
prevent plaintiff from using its Leisure World property in any manner
inconsistent with the wishes or interests of the Department of the
Navy" (Govt. Supp. E.R. 4), including opposing the Leisure World
project before Orange County officials and the Federal Housing
Authority. The petition alleged that the Navy's goal was "to coerce
plaintiff into executing and recording a Declaration of Restrictions
which would permanently bind plaintiff, its successors and assigns to
restrict construction of any residences or buildings designed for
public gatherings within such 4,000 foot wide area for the benefit of
El Toro, without the necessity of the payment of any compensation
therefore by defendant * * *." (Govt. Supp. E.R. 5.) The petition
further stated that Rossmoor "was forced to capitulate because of the
aforesaid coercion" (Govt. Supp. E.R. 12) and, therefore, it had
subsequently executed the Declaration of Restrictions by which the
United States had acquired property rights without making any monetary
payment. Rossmoor asserted that the government's action in coercing it
into executing the Declaration of Restrictions consti tuted a taking of
private property without just compensation and Rossmoor sought to
recover $2,750,000 as compensation for the taking (Gov't. Supp. E. R.
17). /2/
In November and December l971, the case was tried before Trial
Commissioner William E. Day. On December 29, l972, Commissioner Day
issued his report to the full Court of Claims. In his "Ultimate
Findings," Commissioner Day found that " by imposing the Declaration of
Restrictions upon the plaintiff's Leisure World property, the defendant
effected a taking of an interest in such land in the nature of an
easement or dominant servitude without payment to the plaintiff" and
that "the value of the property interest taken by the defendant is
$2,706,000." (Day Opinion at 134.)
After Commissioner Day issued his opinion and after the United
States had filed its exceptions thereto, the parties entered into
settlement negotiations. /3/ Eventually, the parties agreed that
Rossmoor would execute a new Supplemental Declaration of Restrictions,
and, in return, the United States would agree to the entry of judgment
against the government. The SDR (E.R. 17-28) defines the various
restrictions and states, on a parcel-by-parcel basis, which
restrictions apply to each given parcel. The SDR supersedes the l963
Declaration of Restrictions for those parcels to which the SDR is
applicable (E.R. 22). The SDR further provides that the "covenants and
restrictions * * * may be from time to time altered, amended, or
terminated" by mutual written consent or that they "shall terminate and
thereafter be of no force and effect at such time as the United States
manifests the intent that the Air Station will no longer be used as a
facility for the operation of military aircraft." (E.R. 25-26.)
On July 3, l974, the parties filed a Stipulation of Settle ment
which stated, among other things, that "plaintiff has offered to
execute a new Supplemental Declaration of Restrictions permanently
limiting and restricting for the benefit of the United States the use
of the described portions of its property." It was further stipulated
that judgment should be entered against the United States in the sum of
$2,706,000 plus interest, with an additional $272,041.24 in costs.
(Govt. Supp. E.R. 44-46.) An Amended Stipulation of Settlement
substantially tracking the original stipulation was filed a few days
later. /4/
Shortly thereafter, the Chief of the Court of Claims' Trial Division
filed a Memorandum Report for Judgment (Govt. Supp. E.R. 51 54). The
Memorandum Report repeated certain portions of the amended stipulation,
including Rossmoor's offer to execute a new SDR "permanently limiting
and restricting for the benefit of the United States the use of the
described portions of its property." Acting upon this recommendation,
the Court of Claims, by Acting Chief Judge Oscar H. Davis, entered
judgment accordingly, with directions that the judgment not be paid
until Rossmoor executed the SDR (Govt. Supp. E.R. 55-56).
Immediately thereafter, the SDR was executed and recorded in the
land records of Orange County (E.R. 263).
In August l981, Laguna Federal Savings and Loan exercised an option
to purchase a portion of Parcel 23-1 from the Rossmoor Corporation. In
violation of the terms of the SDR, Laguna Federal constructed a
warehouse and storage facility upon a portion of the restricted
property (E.R. 263-265).
C. This litigation. -- The Rossmoor Corporation initiated this
action on February 25, l982 (C.R. 1). In its First Amended Complaint,
Rossmoor /5/ alleged, in substance, that studies and other events since
l974 indicate that the "Challenged Restrictions have not served and do
not serve the purpose of safety; instead they have materially
impaired, and if continued to be enforced will continue to impair the
value of the Rossmoor Property * * *." Therefore, Rossmoor contended,
the "Challenged Restrictions should not be enforced in a court of
equity, in that the conditions on, around and in the nearby vicinity of
the Rossmoor Property have been significantly changed since the
Supplemental Declaration of Restrictions was agreed to in l974, and
Defendants' studies show the lack of need for continued enforcement of
the challenged Restrictions." (E.R. 8.) Accordingly, Rossmoor sought an
order "declaring that the Challenged Restrictions are extinguished,
unenforceable and of no further effect; and an injunction permanently
enjoining Defendants from enforcing the Challenged Restrictions." (E.R.
14.) /6/ The United States answered and counterclaimed, seeking, among
other things, a decree holding that the SDR restrictions remain valid
and enforceable and an order requiring the removal of all improvements
constructed on Parcel 23-1 constructed in violation of the SDR (E.R.
38). In turn, the Great American Federal Savings & Loan Association,
the successor by merger to Laguna Federal, sought, inter alia, a decree
declaring the challenged restrictions to be extinguished, unenforceable
and of no further effect. Great American also sought indemnification
from Rossmoor in the event that it became required to remove its
improvements from the restricted property (E.R. 66-81).
Before trial, the court divided the case into four phases. Phase 1
was concerned with the nature and extent of the interest held by the
government. In the event that that interest were deter mined to be
subject to termination due to changed circumstances, Phase 2 would deal
with the issue of whether circumstances had in fact so materially
changed as to warrant the removal of the challenged restrictions. Phase
3, if needed, would address the government's counterclaims against
Rossmoor and Great American for removal of the structure on Parcel 23-1
and Phase 4 would consider Great American's counterclaim against
Rossmoor. (Tr. 9/30/84.)
Trial was conducted from October 4, l983, through October 14, l983.
During the trial, the district court viewed the litigation site. This
visit included a view from a Marine Corps jet fighter aircraft. At the
conclusion of Phase l of the trial, the court ruled that the United
States' interest was a permanent one not subject to the doctrine of
changed circumstances; thus, Phase 2 was omitted as unnecessary. At
Phase 3, the court granted the government's motion to dismiss its
counterclaim against Rossmoor for recovery of possession. /7/
Thereafter, the court granted Great American's motion to dismiss its
claims against Rossmoor and the trial concluded.
The court ruled in favor of the government. In its find ings of
fact and conclusions of law, the court found that the Marine Corps'
overriding objective in negotiating the l974 SDR was to secure a
permanent property interest (E.R. 260-261). The court ruled that the
SDR "embodies a valid and enforceable property right in favor of the
United States" and that "that property right is permanent and
enforceable in nature and not subject to any doctrines of changed
conditions, changed circumstances, waiver, or abandonment." (E.R. 268.)
The court further ruled that the structure located on Parcel 23-1
stands in violation of the SDR and that the government was not, under
the facts of this case, estopped from seeking removal of the structure
(E.R. 268-270). Judgment was entered accordingly (E.R. 274-275). The
motions for a new trial were denied (E.R. 570).
These appeals followed.
ARGUMENT
I
THE DISTRICT COURT CORRECTLY RULED THAT THE PROPERTY
RESTRICTIONS EMBODIED IN THE SDR ARE NOT SUBJECT TO ANY
DOCTRINES OF CHANGED CONDITIONS OR CHANGED CIRCUMSTANCES
A. Standard of Review. -- Appellants' arguments on this issue
primarily challenge the district court's rulings on matters of law.
This Court's review on questions of law is de novo. Walker v.
Navajo-Hopi Indian Relocation Com'n, 728 F.2d 1276, 1278 (9th Cir.
l984). Appellants also challenge the district court's finding of fact
that, in negotiating the l974 SDR, the parties intended to create a
permanent interest which would be subject to termination only in the
manner expressly set forth in the SDR itself. The district court's
findings of fact will be set aside only where they are shown to be
clearly erroneous. Fed. R. Civ. P. 52(a); Bohemia, Inc. v. Home Ins.
Co., 725 F.2d 506, 508-509 (9th Cir. 1984).
B. Introductory. -- In l967, Rossmoor sued the United States in the
Court of Claims alleging that the government had carried out a program
calculated "to coerce plaintiff into executing and recording a
Declaration of Restrictions which would permanently bind" Rossmoor and
its successors (Govt. Supp. E.R. 4; emphasis added) and that Rossmoor
had been "forced to capitulate" to the government's coercion (Govt.
Supp. E.R. 12). Rossmoor contended that these actions constituted an
uncompensated taking of its property interests. The trial commissioner
agreed with Rossmoor and ruled that the United States had taken an
interest "in the nature of an easement or dominant servitude" and found
the value of the taken interest to be approximately $2.7 million.
Before the Court of Claims acted on the report, however, the parties
agreed to settle the case by executing the SDR and by allowing judgment
to be entered against the United States. In the stipulations of
settlement, Rossmoor represented to the Court of Claims that it would
execute "a new Supplemental Declaration of Restrictions permanently
limiting and restricting for the benefit of the United States the use
of the described portions of its property." (Govt. Supp. E.R. 44, 49;
emphasis added.) Based upon this stipulation, the Court of Claims
entered judgment against the United States and awarded Rossmoor over
$2.7 million plus interest as compensation, and costs.
In this action, filed just eight years after Rossmoor had recovered
its award in Rossmoor I, Rossmoor seeks a declaration that the
restrictions to which it agreed and for which it received just
compensation are now of no effect due to "changed circumstances."
Rossmoor contends that the SDR did not create any permanent interests
in favor of the United States but only mere "covenants" which may be
subject to termination as a matter of California law in light of
"changed circumstances." Rossmoor further contends that the district
court's finding that the parties intended to create a permanent
interest is clearly erroneous. Rossmoor's attempt to renege upon its
express, stipulated representations in Rossmoor I should be rejected.
C. The judgment of the Court of Claims bars plaintiffs from
contending here that the interest of the United States is not a
permanent one. -- Plaintiffs here contend that the interest created by
the SDR in favor of the United States is not a permanent one but,
rather, a "covenant" subject to termination upon a showing of "changed
circumstances." Plaintiffs seek to distinguish such "covenants" from
other types of property interests on the grounds that covenants "'are
created by promises concerning the land which may be enforceable by or
binding upon successors to the estate of either party, while an
easement is an interest in land, created by grant or prescription.'"
(Rossmoor Br. 18; original emphasis.)
As noted, Rossmoor's earlier action in the Court of Claims was
concluded by a judgment based upon a stipulated settlement. That
stipulation expressly provided that Rossmoor would "execute a new
Supplemental Declaration of Restrictions permanently limiting and
restricting for the benefit of the United States the use of the
described portions of its property." (Govt. Supp. E.R. 44, 49.)
Rossmoor further stipulated that "the sum of $2,706,000 * * *
constitutes just compensation for the taking by the United States of an
interest in plaintiff's property." (Govt. Supp. E.R. 45, 49; emphasis
added.)
Having stipulated in Rossmoor I that the SDR embodied permanent
restrictions and that such restrictions constituted "an interest in
plaintiff's property," Rossmoor and its successors are precluded by res
judicata and related issue preclusion doctrines from asserting here
that the government has not acquired a permanent interest in the
property at issue. As the Supreme Court explained in Montana v. United
States, 440 U.S. 147, 153-154 (l979) (citations omitted):
A fundamental precept of common-law adjudication, embodied in
the related doctrines of collateral estoppel and res judicata, is
that a "right, question or fact distinctly put in issue and
directly determined by a court of competent jurisdiction * * *
cannot be disputed in a subsequent suit between the same parties
or their privies * * *." Under res judicata, a final judgment on
the merits bars further claims by parties or their privies based
on the same cause of action. Under collateral estoppel, once an
issue is actually and necessarily determined by a court of
competent jurisdiction, that determination is conclusive in
subsequent suits based on a different cause of action involving a
party to the prior litigation. Application of both doctrines is
central to the purpose for which civil courts have been
established, the conclusive resolution of disputes within their
jurisdictions.
Res judicata and related issue preclusion doctrines are rigorously
applied in cases involving land ownership disputes. "Our reports are
replete with reaffirmations that questions affecting titles to land,
once decided, should no longer be considered open." Arizona v.
California, U. S. , 103 S.Ct. 1382, 1392 (l983). "The policies
advanced by the doctrine of res judicata perhaps are at their zenith in
cases concerning real property, land and water." Nevada v. United
States, U.S. , 103 S.Ct. 2906, 2918 n.10.
The fact that a judgment was entered pursuant to a stipulation and
agreement between the parties does not detract from the res judicata
effect otherwise accorded to it. Green v. Ancora-Citronelle Corp., 577
F.2d 1380, 1383 (9th Cir. l978); Interdynamics, Inc. v. Firma Wolf,
653 F.2d 93, 96-97 (3d Cir.), cert. denied, 454 U.S. 1092 (l981).
Rossmoor I established that the United States acquired a permanent
property interest in Rossmoor's property. Rossmoor's action here is
barred by res judicata and collateral estoppel.
Even if res judicata and collateral estoppel were not applicable
here, Rossmoor and its successors would nonetheless be barred by
judicial preclusion from now asserting that the SDR confirmed to the
United States mere "covenants" rather than a permanent interest in the
land. The doctrine of judicial preclusion bars a litigant who has
successfully asserted one position against another party from
maintaininng an inconsistent position against the same party in
subsequent litigation. Edwards v. Aetna Life Ins. Co., 690 F.2d 595,
598-599 (6th Cir. l982). As the Court stated in Scarano v. Central R.
Co. of New Jersey, 203 F.2d 510, 513 (3d Cir. l953): /8/
A plaintiff who has obtained relief from an adversary by
asserting and offering proof to support one position may not be
heard later in the same court to contradict himself in an effort
to establish against the same adversary a second claim
inconsistent with his earlier contention. Such use of
inconsistent positions would most flagrantly exemplify that
playing "fast and loose with the courts" which has been
emphasized as an evil the courts should not tolerate.
Having obtained an award in Rossmoor I based upon its stipulated
representation that the award constitued just compensation for the
taking "of an interest in plaintiff's property" and that the
restrictions in the SDR would be permanent, plaintiffs are barred from
asserting the contrary here. /9/
D. The court was not required to label the interest embodied in the
SDR. -- Rossmoor contends (Br. 13-17) that the district court erred by
failing to "define" the interests in dispute. The nature and extent of
the restrictive interest embodied in the SDR, however, is defined and
described in painstaking detail in the SDR itself (E.R. 19-25). The
only issue here is whether those restrictions are subject to
termination by changed circumstances other than those specific
circumstances expressly set out in the termination clause of the SDR.
The district court unequivocally held that they were not (E.R. 268).
While Rossmoor couches its argument in terms of "defining" the
interest, it is actually contending that the court was required to
attach a single word or phrase -- such as "easement" or "covenant" --
to the interest embodied in the SDR. No authority is advanced by
Rossmoor which supports this proposition. To the contrary, the courts
have refrained from attaching labels to property interests held by the
United States and applying rules of law applicable to those labels
which would defeat the purposes for which the interests were acquired.
As the court stated in United States v. Albrecht, 364 F. Supp. 1349,
1351 (D.N.D. 1973), aff'd, 496 F.2d 906 (8th Cir. l974):
It is clear that the parties intended the property interest to
be a permanent interest. It appears to this Court to be
immaterial what term is used to describe the interest acquired.
To attach a label to it and then apply a rule of law applicable
to that label that would wholly defeat the purpose of the program
cannot be permitted.
The district court properly declined Rossmoor's invitation to attach
a label to the interest embodied by the SDR.
E. The record amply supports the court's finding that the parties
intended to permanently restrict Rossmoor's property and to limit the
manner of termination of those restrictions to the methods expressly
spelled out in the agreement. -- Rossmoor argues (Br. 30 38) that the
record does not support the district court's finding that the parties
intended that the SDR restrictions would remain permanent until such
time as they are terminated in the manner expressly stated in the SDR;
that is, by mutual written consent or "at such time as the United
States manifests the intent that there after the Air Station will no
longer be used as a facility for the operation of military aircraft."
(E.R. 26.) The record, however, amply supports the district court's
finding. /10/
First, there is the language of the SDR itself. The SDR states in
part (E.R. 18):
WHEREAS, disputes have arisen between the United States and
Declarant concerning: whether aircraft using the Air Station,
do, in fact, create a hazard to persons using land owned by
Declarant; whether it is necessary or desirable to restrict the
permissible uses of the land owned by Declarant; and the nature
and extent of any restriction on the permitted use of the land
owned by Declarant; it is now the desire of the Declarant and
the United States to resolve such disputes and clarify such
permitted uses * * *.
Under Rossmoor's view, the SDR would not have resolved any of these
disputes. Rather, according to Rossmoor, the restrictions terminate
whenever Rossmoor can show that it should prevail in the very dispute
that the SDR was intended to resolve. Rossmoor disputed the need for
the restrictions when the SDR was executed; it should not now be able
to seek their termination by continuing to dispute the government's
need for them. Furthermore, the SDR itself spells out the "changed
circumstances" under which the restrictions will terminate. Had the
parties intended that the restrictions should terminate under a lesser
or different degree of changed circumstances, there would have been no
need to state in the SDR that the restrictions will terminate "at such
time as the United States manifests the intent that thereafter the Air
Station will no longer be used as a facility for the operation of
military aircraft." (E.R. 26.)
Second, there is the matter of Rossmoor's stipulations of settlement
in Rossmoor I. As repeatedly mentioned, Rossmoor obtained its judgment
in the Court of Claims upon its stipulation that the SDR would
permanently restrict the use of its property in favor of the United
States and that the award "constitutes just compensation for the taking
by the United States of an interest in plaintiff's property." Rossmoor
now asserts that, at the time of the SDR negotiations, the parties
knowingly intended to create mere covenants rather than a property
interest in Rossmoor's land. Surely, however, had Rossmoor so
intended, it would not have at the same time stipulated to the
contrary. And if it had done so, it would have engaged in a
misrepresentation to the court which should not be countenanced.
Third, as described supra at 7, the trial commissioner ruled that
the United States had taken "an interest in such land in the nature of
an easement or dominant servitude" which he valued at $2.7 million. The
United States filed exceptions to the report; Rossmoor did not. The
parties then agreed upon the SDR and stipulated that judgment should be
entered against the United States for $2.7 million. It is most
unlikely that the government would have entered into the SDR in order
to obtain "covenants" when, for the exact same price, it could have
been assured of getting an "easement or dominant servitude" merely by
accepting the trial commissioner's report.
Finally, the oral testimony adduced at trial also amply supports the
district court's finding. The Marine Corps was represented in the SDR
negotiations by Colonel Charles E. Spence and Rossmoor was represented
by Alan H. Halkett, Esquire. /11/ Spence and Halkett both testified at
trial below. Spence unequivocally stated that the government's purpose
in entering into the SDR was to secure permanent and clearly defined
restrictions (Tr. 10/5/83 at 221-223, 238-240). Spence further
testified that the parties had never discussed possible termination by
operation of law, although they had had extensive discussions
concerning the manner by which the restrictions could be terminated.
Rather, Spence stated: "We couldn't agree upon anything except by
mutual consent in the future or by the specific language that we used
to indicate no future use on any other type of termination." (Tr. 10/5/
83 at 240-244.)
Thus, the district court's finding that the parties in tended that
the SDR restrictions would be permanent until terminated in a manner as
specified by the SDR's termination clause is supported by the record.
F. The United States owns a permanent interest which may be
terminated only in a manner as specified in the SDR. -- California law
provides, generally, that a "covenant" may be found by a court of
equity to be no longer enforceable where changed conditions have
rendered its continued enforcement unreasonable or oppressive. Wolff
v. Fallon, 44 Cal. 2d 695, 696-697 (l955); Fairchild v. Raines, 24
Cal. 2d 818, 826 (l944); Hurd v. Albert, 213 Cal. 15, 23 (1927). The
district court ruled that this doctrine of "changed circumstances" was
not applicable here. That ruling should be sustained.
In dealing with disputes concerning title to federal real property,
the courts frequently adopt as federal law the law of the state in
which the asserted federal property is located. Wilson v. Omaha Indian
Tribe, 442 U.S. 653, 671-672 (l979). This general rule, however, has a
well-established exception. The courts will refuse to apply state laws
to defeat what otherwise would be a permanent federal property
interest. Thus, the courts have long held that state laws regarding
adverse possession, abandonment and waiver have no application against
the United States. United States v. California, 332 U.S. 19, 39-40
(l947); Utah Power & Light Co. v. United States, 243 U.S. 389, 408-409
(l917); United States v. Gossett, 416 F.2d 565, 569 (9th Cir. l969).
And this remains true where the government's title derives from
purchase rather than original ownership. Jackson v. United States, 56
F.2d 340 (9th Cir. l932).
Here, the similarities between the doctrine of "changed
circumstances" and state rules concerning adverse possession and the
like are both close and apparent. Such doctrines, if applicable, act
to deprive the government of its permanent title interest where the
government itself makes no affirmative act to part with its ownership.
State law, however, cannot be used to prematurely dispossess the United
States of its property interest where it is clear from the face of the
documents that the parties specified the event and manner in which the
restrictions would terminate. In United States v. Little Lake Misere
Land Company, 412 U.S. 580 (1973), the Supreme Court refused to permit
state abrogation of the explicit terms of a federal land acquisition,
noting that " c ertainty and finality are indispensable in any land
transaction, but they are specially critical when, as here, the federal
officials carrying out the mandate of Congress irrevocable commit
federal funds." Id., 412 U.S. at 597. The Court also emphasized that
"* * * in the past it has been careful to state that, even assuming in
general terms the appropriateness of 'borrowing' state law, specific
aberrant or hostile state rules do not provide appropriate standards
for federal law." Id., 412 U.S. at 595-596. The Eighth Circuit reached
a similar result in United States v. Albrecht, supra, 496 F.2d at 911,
holding that state law could not defeat the government's purchase of a
restrictive easement and stating: "The property right conveyed to the
United States in this case, whether or not deemed a valid easement or
other property right under state law, was a valid conveyance under
federal law and vested in the United States the rights stated therein."
The property transaction at issue here, of course, was no ordinary
one. Rather, the United States, in exercising its constitutional
functions, secured its property ownership in accordance with federal
statutes authorizing it to settle an eminent domain proceeding. /14/
Hence, "the validity and construction of the contract" -- in this case,
the SDR and the stipulations of settlement -- "its consequences on the
rights and obligations of the parties, the title or liens which it
create s or permit s , all present questions of federal law not
controlled by the law of any State". United States v. Allegheny, 322
U.S. 174, 183 (l944). /15/
The government's property interests here have been confirmed as a
result of a valid compromise and stipulation of settlement of
litigation in the Court of Claims. State law is incapable of thwarting
the clear terms of the stipulation and the judgment entered thereon.
The parties intended to, and did, agree upon restrictions permanently
binding upon Rossmoor and its successors. Plaintiffs cannot be
permitted to settle a matter on the basis that the property interest is
a permanent interest in land and then, having accepted the award,
challenge that agreement by asserting that it creates a mere "covenant"
terminable on a showing of alleged "changed conditions."
Even assuming that California law could apply here, the California
doctrine of changed circumstances would not defeat the government's
interests. As Rossmoor acknowledges (Br. 27), that doctrine is
applicable only to "covenants." Rossmoor also points out (Br. 27) that
the distinction between a "covenant" and other interests relating to
real property is that a covenant is a promise concerning the land
rather than an interest in the land itself. The SDR, however, clearly
confirms an interest in the land itself. Thus, the SDR states (E.R.
18): "This Supplemental Declaration of Restrictions imposes
restrictions on lands of the Declarant * * *." And, of course, the
Court of Claims stipulations expressly stated that the award was to be
paid as just compensation for the taking "of an interest in plaintiff's
property." (Govt. Supp. E.R. 45, 49.)
Rossmoor contends (Br. 20-22) that the SDR creates covenants because
that document uses the term "covenants and restrictions" rather that
"easement." Under California law, however, the absence of the word
"easement" from a conveyance will not defeat the clear implication of
the grant and easements may be created by use of covenant language.
Maywood Mutual Water Co. v. Maywood, 23 Cal. App. 3d 266, 272 (l972);
Pacific Gas and Electric v. Minette, 115 Cal. App. 698, 707-708, 252
P.2d 642, 647 (1953). Indeed, Rossmoor admits (Br. 20-21) that, in the
appropriate context, words of covenant will be construed as a grant of
an easement. As already repeatedly shown, precisely such a context was
present here.
Finally, the plaintiffs have failed to cite any authority showing
that the doctrine of changed circumstances may be applied against a
governmental entity. That the California courts would so hold is very
unlikely as those courts have repeatedly held that public ownership of
real property may not be defeated by similar doctrines, such as adverse
possession and the like. United States v. Gossett, supra, 416 F.2d at
569 (collecting cases).
In summary, the SDR, which was executed as an integral component of
the settlement of Rossmoor's Court of Claims action, established
restrictions which remain binding until they are terminated in a manner
expressly provided for in the SDR itself.
II
THE DISTRICT COURT'S VIEW OF THE LITIGATION SITE WAS NOT
"MISCONDUCT"
Standard of Review. -- Rossmoor contends that, in view of the
alleged "misconduct" at trial, the district court should have granted
the motions for a new trial. This Court's review of this issue is
governed by the "abuse of discretion" standard. McKinley v. City of
Eloy, 705 F.2d 1110, 1177 (9th Cir. l983); United States v. Larson,
507 F.2d 385, 389 (9th Cir. l974).
During the trial, the judge visited the litigation site to view the
premises. Over Rossmoor's objection, the view included a flight over
the site in a Marine Corps A-6 jet fighter, a two-seat aircraft typical
of aircraft stationed at El Toro. The flight was preceeded by a
physical examination of the trial judge and a safety briefing. A
post-flight briefing followed immediately after the flight. Thereafter,
the judge viewed the site, including Great American's facility, from
the ground. Notice of the visit was given to all counsel and counsel
were present with the judge throughout, except where impractical, such
as during the physical examination and the flight in the two-seat
aircraft. A court reporter was likewise present with counsel and the
briefings were transcribed. No Marine Corps personnel called as
witnesses had any contact with the judge during the visit. (E.R.
543-548, 625-630.) Rossmoor asserts (Br. 48) that "attorney misconduct"
regarding the manner in which the view of the El Toro approach corridor
was conducted deprived them of the right to a fair tribunal. The
government attorneys carefully apprised the judge, in open court and in
the presence of counsel, of the manner in which the view was to be
conducted (E.R. 625-630). The judge agreed to the view under these
conditions and the view was conducted in the manner so indicated (Tr.
9/30/83 at 38). Hence, although Rossmoor speaks in terms of "attorney
misconduct, it is in reality contending that the "misconduct" was
committed by the trial judge himself when he decided to take the
flight. Rossmoor's "misconduct" allegations are groundless. The
judicial view involved a flight in an A-6 jet down the El Toro approach
corridor. Because this aircraft is a type normally flown over the
subject land, it is entirely reasonable that the view would aid the
judge in better understanding the evidence to be submitted at Phase 2
of the trial, which would concern whether SDR restrictions were still
"needed" in connection with the Marine Corps' aviation operations at El
Toro. Judicial views for such purposes and under similar circumstances
have been upheld by the courts. Equal Employment Opportunity
Commission (EEOC) v. Mercy Hospital and Medical Center, 709 F.2d 1195,
1199-1200 (7th Cir. 1983); United States v. PATCO, 527 F. Supp. 1344,
l355-1361 (N.D. Ill. l981); Northwestern National Casualty Co. v.
Global Moving & Storage, Inc., 533 F.2d 320, 323 (6th Cir. 1976);
United States v. State of Washington, 459 F. Supp. 1020, 1093-1097 (W.
D. Wash. 1978), appeal dismissed, 573 F.2d 1121 (9th Cir. 1978).
Rossmoor's contention that the manner in which the view was
conducted tainted the judge's impartiality is without merit. A judge
is presumed to be impartial and a party faces a substantial burden in
order to rebut that presumption. PATCO, supra, 527 F. Supp. at 1356;
United States v. Jeffers, 532 F.2d 1101, 1112 (7th Cir. 1976). As in
cases where a party seeks to disqualify a judge for bias or prejudice,
Rossmoor here is required to demonstrate reasonable grounds for
questioning the judge's impartiality. /16/ Instead of doing so,
however, Rossmoor relies upon mere "conjecture, suspicion, rumor or
inferences drawn from other than established facts." State of
Washington, supra, 459 F. Supp. at l096. Indeed, Rossmoor cannot
demonstrate any prejudice here. Any impressions which the court may
have garnered from its visit to the site would have become directly
material only at the projected Phase 2 of the trial dealing with
changed circumstances. That phase, however, was never reached due to
the ruling on the Phase 1 issues.
The physical examination and preflight briefing were not "extensive
fanfare" but were health and safety measures (E.R. 632 633, 636-637).
As Rossmoor concedes (Br. 46), they related only to the use of the
military aircraft. Nor does the fact that the judge was made an
"honorary member" of the squadron and presented with a squadron pin
after his flight raise any reasonable question of impartiality. See,
State of Washington, supra, 459 F. Supp. at 1096. Indeed, the
government attorney inquired of counsel before the presentation whether
counsel had any objection to it and counsel did not (E.R. 546, 548).
protections during the view to eliminate any possible prejudice to
plaintiffs. /17/ There were no ex parte contacts with counsel or any
witnesses. The only reason that counsel could not be present during
the flight was because there was room in the two-seat aircraft only for
the pilot and the judge. Rossmoor has offered no evidence of any ex
parte communication, during the flight or at any other time, that would
raise any reasonable inference that the court was improperly
influenced. Under these circumstances, the district court's denial of
the motions for a new trial should be affirmed. /18/
III
THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION BY GRANTING
THE GOVERNMENT'S MOTION TO DISMISS ITS COUNTERCLAIM
AGAINST ROSSMOOR FOR RECOVERY OF POSSESSION
Standard of Review. -- This Court's review of the grant of a party's
motion to dismiss its own claim is governed by the "abuse of
discretion" standard. United States v. Gunc, 435 F.2d 465, 467 (8th
Cir. l970); 5 Moore's Federal Practice, Section 4l.05 3 .
Rossmoor contends that the district court abused its discretion by
granting the government's motion to dismiss its own claim against
Rossmoor for recovery of possession. This assertion is devoid of
merit.
The government had planned to present its case against Rossmoor on
this issue by calling as witnesses certain persons listed on Rossmoor's
witness list. At that time, the government's attorneys believed that
any person listed on the witness list of any party could be called by
any other party in its case-in-chief. At the close of Phase 1 of the
trial, however, counsel for Rossmoor stated that, under the local rules
of the court, a party could call only those persons which it had placed
upon its own witness list. The district court sustained Rossmoor on
this matter (Tr. 10/13/83 at 848-853).
This ruling left the government with no case to present against
Rossmoor at Phase 3. Thus, at the outset of Phase 3, the government
moved to dismiss its recovery of possession claim against Rossmoor (Tr.
10/14/83 at 856-860). The court took the motion under submission at
that time (Tr. 10/14/83 at 865). The United States proceeded to put on
its case against Great American and rested, renewing its motion for
dismissal against Rossmoor, which the court granted, with prejudice
(Tr. 10/14/83 at 924; E.R. 275).
The government, however, was not the only party hampered by
Rossmoor's insistence upon enforcement of the local rule regarding
witness lists. As Rossmoor now points out (Br. 52), Great American,
like the government, had also intended to present its case at Phase 3
almost entirely by calling persons named only upon Rossmoor's witness
list. Due to the court's earlier ruling made at Rossmoor's request,
however, Great American, like the United States, could not call as
witnesses any persons not named upon its own witness list. This, in
turn, caused Rossmoor itself some discomfiture, as it was Rossmoor
which sold Great American the restricted parcel.
Clearly, under these circumstances, the court did not abuse its
discretion by granting, with prejudice, the government's motion to
dismiss as against Rossmoor. Due to the court's ruling made upon
Rossmoor's request, the government simply no longer had any case which
it could make against Rossmoor at Phase 3. Indeed, Rossmoor does not
suggest that the United States made out any claim against it at that
phase. It appears that Rossmoor's real complaint is that Great
American could not call witnesses listed solely upon Rossmoor's witness
list. Rossmoor, however, should not be heard to complain that, in
obtaining the ruling regarding the witness list, it shot itself -- and
Great American -- in the foot.
IV
THE UNITED STATES IS NOT, UNDER THE FACTS OF THIS CASE,
BARRED FROM SEEKING REMOVAL OF THE STRUCTURE ON THE
RESTRICTED PROPERTY
Standard of Review. -- This Court's review of this legal issue is de
novo, Walker v. Navajo-Hopi Indian Relocation Com'n., supra, 728 F.2d
at 1278.
The SDR was recorded on the land records of Orange County
immediately after it was executed (E.R. 256). The SDR states (E.R. 22)
that the restricted parcels "shall be transferred, sold and/or conveyed
by Declarant subject to the covenants and restrictions hereinafter set
forth as to each parcel * * *." Nonetheless, Rossmoor conveyed its
interest in a restricted parcel to Great American's predecessor, Laguna
Federal, which constructed a warehouse and storage facility concededly
(Gt. Am. Br. 5) in violation of the terms of the SDR. Great American,
however, asserts that the United States should be estopped from seeking
removal of the structure. That argument fails.
The four elements of equitable estoppel in ordinary cases are:
1) The party to be estopped must know the facts. 2) He must
intend that his conduct shall be acted upon or must to act that
the party asserting the estoppel has a right to believe it is so
intended. 3) The latter must be justifiably ignorant of the true
facts. 4) The latter must rely on the former's conduct to his
injury.
United States v. Ruby Co., 588 F. 2d 697, 703 (9th Cir.), cert. denied,
442 U.S. 917 (l979). See also, Heckler v. Community Health Services of
Crawford, U.S. , 104 S. Ct. 2218, 2223-2224 (1984). In addition
to these usual elements, a party seeking to establish an estoppel
against the government must also show that the government made an
affirmative misrepresentation of a material fact. Schweiker v. Hansen,
450 U.S. 785, 788-789 (1981); Ruby Co., supra, 588 F.2d at 703-704.
Great American falls far short of meeting these standards.
The only witness called by any party at Phase 3 of the trial was
Lietenant Colonel Wemheuer, who, in l981, was assigned to the Community
Plan and Liason Section at El Toro (Tr. 10/14/83 at 878). Colonel
Wemheuer stated that he had received from Orange County a notice that
Laguna Federal had applied for a permit to construct a warehouse
building in an industrial use area of the Rossmoor Planned Community
(Sign Restrictions) District. He reviewed the application, attempted
to locate it on a map, and sent a letter to the County advising it of
the Marine Corps' concerns that the structure be properly noise
attenuated and that its height should be restricted. Colonel Wemheuer,
however, failed to note that the building was to be constructed on a
parcel restricted by the SDR; rather, he mistakenly believed the
building site to be some 300 feet further to the southwest (Tr. 10/14/
83 at 918). Accordingly, Colonel Wemheuer's letter to the County made
no mention of the SDR restrictions.
Clearly, there is no sufficient estoppel case here. First, Colonel
Wemheuer made no affirmative misrepresentations concerning the SDR; in
fact, he made no representations about it whatsoever. Second, he did
not know at the time that he wrote the letter to the County that the
site was in fact on a parcel restricted by the SDR. Third, he did not
intend that any statements that he made should have any relation to the
SDR. Fourth, as the SDR was properly recorded, Great American cannot
reasonably plead justifiable ignorance of the true facts. Nor does the
record show that Great American was, in fact, unaware of the SDR.
Finally, there is no showing that Great American acted in reliance upon
Colonel Wemheuer's letter to the County; indeed, there is no showing
that Great American was ever aware of its existence before completing
construction of the building.
In summary, Great American has not only failed to show that it meets
all of the requisite elements of estoppel but it has failed to show
that it meets any one of them. /19/ The district court properly
ordered removal of the offending structure. of the air station as a
military airfield. We were unable to agree
CONCLUSION
For the foregoing reasons, the judgment of the district court should
be affirmed.
Respectfully submitted,
/s/ F. HENRY HABICHT II
F. HENRY HABICHT II
Assistant Attorney General
/s/ ROBERT C. BONNER
ROBERT C. BONNER
United States Attorney Los Angeles, California 90012
/s/ JAMES R. ARNOLD
JAMES R. ARNOLD
/s/ JOSEPH F. BUTLER
JOSEPH F. BUTLER
Assistant United States Attorneys Los Angeles, California 90012
/s/ ANNE S. ALMY
ANNE S. ALMY
/s/ ROBERT L. KLARQUIST
ROBERT L. KLARQUIST
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-2731
OF COUNSEL:
/s/ RICHARD CORNELIUS
RICHARD CORNELIUS
Office of General Counsel Department of the Navy Arlington,
Virginia 20131
AUGUST 1984
/1/ The record of the Court of Claims in Rossmoor I was introduced
below as Exhibit 1005. Rossmoor's petition is reproduced at pages 1-41
of the Government's Supplemental Excerpt of Record ("Govt. Supp. E.R.
").
/2/ Rossmoor also sought to recover $10,000 on a breach of contract
theory. (Govt. Supp. E.R. 23.)
/3/ The settlement discussions will be discussed in more detail
below.
/4/ The only difference between the original and amended
stipulations was that the first sentence of Paragraph 6 was revised to
state that the interest on the award was being paid as part of the just
compensation. Compare Govt. Supp. E.R. 45 with Govt. Supp. E.R. 49.
/5/ Ross W. Cortese, A. R. Ceresa, and William V. March, as trustees
for the Rossmoor Liquidating Trust, were substituted in as plaintiffs
in place of the Rossmoor Corporation (E.R. 2). For convenience, this
brief will continue to refer to the plaintiffs as "Rossmoor." In
addition to the United States, the caption of the First Amended
Complaint named the Department of the Navy and John F. Lehman,
Secretary of the Navy, as defendants. The court subsequently granted
the government's motion to dismiss the Secretary and the Department of
the Navy as defendants (C.R. 116).
/6/ Rossmoor also sought a writ of mandamus directing the United
States to dispose of the restrictions (E.R. 13-14). The court
dismissed this count, as well as a similar count asserted by Great
American (C.R. 68). No review of this ruling has been sought.
/7/ The government's motion to dismiss concerned only its
counterclaim against Rossmoor. The motion did not affect the
government's claims against Great American, against which it prevailed
on the Phase 3 issues.
/8/ Like here, Scarano involved a situation where the initial
litigation between the parties had been resolved by a judgment entered
upon a stipulation.
/9/ This Court may affirm the judgment of the district court on any
ground which has a basis in the record, even if the court below did not
base its ruling on that particular ground. Angle v. United States, 709
F.2d 570, 572-573 (9th Cir. 1983). The res judicata argument was
asserted below by the government in its motion for summary judgment (C.
R. 29) and the judicial preclusion argument was made in the
government's motion in limine (E.R. 172-196).
/10/ As this Court recently stated in In re U.S. Financial
Securities Litigation, 729 F.2d 628, 632 (1984) (citations omitted):
When the inquiry extends beyond the words of the contract and
focuses on related facts, * * * the trial court's consideration
is entitled to great deference and its interpretation of the
contract will not be reversed unless it is clearly erroneous.
Because a trial court's review of extrinsic evidence is
essentially an inquiry into the intent of the contracting
parties, its conclusions based on such evidence must be accorded
great weight.
/11/ Rossmoor's statement (Br. 9) that the SDR was drafted by Spence
is misleading. Spence testified that he and Halkett mutually worked
out the text of the SDR and that the document was typed by Spence's
office (Tr. 10/5/83 at 231).
/12/ Halkett testified to the contrary but the district court found
(E.R.261) that Halkett's testimony on this matter "was unsatisfactory
and not credible when measured against the credibility of the testimony
of Col. Spence."
/13/ Rossmoor argues (Br. 38-41) that the court erred by precluding
Mr. F. Trowbridge Vom Baur from testifying concerning the intent of the
parties. Rossmoor called Vom Baur to testify concerning the parties'
intent in drafting the l963 Declaration of Restrictions. The
government objected to this testimony on the grounds that it violated
the parole evidence rule (Tr. 10/5/83 at 175) and that it was
irrelevant (Tr. 10/5/83 at 179).
The court had previously ruled that it would not accept additional
evidence in connection with the l963 restrictions (Tr. 9/30/83 at 16).
The sole issue before the court was the interpretation and construction
of the l974 SDR. Vom Baur's proposed testimony related solely to the
l963 restrictions. The court further found that Vom Baur had not even
participated in the actual l963 negotiations (Tr. 10/5/83 at 180). At
trial, Rossmoor's attorney made the strained argument that Vom Baur's
testimony would be relevant "because it would show the information
available to the negotiators on behalf of the Marine Corps and
Department of the Navy as to what was the history of the matter and in
adopting the language which had previously been negotiated and worked
out in l963." (Tr. 10/5/83 at 180.)
The negotiators of the 1974 SDR were called as witnesses at trial
and fully examined. There was no indication that any of them had ever
discussed the l963 Declaration with Vom Baur. Information available to
the l974 negotiators but not considered by them is clearly irrelevant.
The testimony of Vom Baur was properly excluded.
/14/ 28 U.S.C. 515, 516 and 517, authorize the Attorney General to
conduct litigation on behalf of the United States.
/15/ Rossmoor makes the specious contention (Br. 36) that the
stipulation and the judgment of the Court of Claims should be
disregarded here because "the SDR did not come into existence until the
Court of Claims action was concluded by settlement." The text of the
SDR was worked out and submitted to the Court of Claims along with the
stipulations of settlement and payment of the judgment was contingent
upon its execution. Indeed, the SDR was executed the same day that the
judgment was entered. Rossmoor's First Amended Complaint correctly
states (E.R. 5): "The Supplemental Declaration of Restrictions was one
part of the conclusion of a lawsuit which the Rossmoor Corporation had
filed against the United States in the Court of Claims in l972 * * *."
(Emphasis added.)
/16/ Rossmoor did not make any motion under 28 U.S.C. 144 or 455 to
disqualify the trial judge. Rossmoor, however, could not have alleged
sufficient bias or prejudice to meet the objective test of "reasonable
grounds of impartiality" used by courts under the recusal statutes.
See, State of Washington, supra, 459 F. Supp. at 1196-1197; PATCO,
supra, 527 F. Supp. at 1359-1361. Rossmoor instead attacks the
district court on due process grounds. While the constitutional right
of due process exists apart from statutory disqualification procedures,
failure to show sufficient bias or prejudice under the recusal statutes
will defeat due process claims as well. United States v. Conforte, 457
F. Supp. 641, 659 n.13 (D. Nev. l978), aff'd, 624 F.2d 869 (9th Cir.
l980). Accordingly, Rossmoor's due process claims are without merit.
/17/ These procedural protections -- the presence of counsel and a
court reporter -- distinguish this case from the only case relied upon
by Rossmoor. In Price Brothers Co. v. Philadelphia Gear Corp., 649 F.
2d 416 (6th Cir.), cert. denied, 454 U.S. 1099 (l982), a trial judge
directed his law clerk to observe the operation of a machine on
plaintiff's premises without the defendant's knowledge. The court of
appeals, nonetheless, upheld the trial judge as it appeared that the
information was used by the judge only to better understand the proof
submitted at trial. Id., 649 F.2d at 420. Hence, Price Brothers
supports the government's position here.
/18/ Rossmoor also alleges (Br. 49-51) "attorney misconduct" in that
government counsel at trial refused to accede to a supposed
out-of-court stipulation concerning the authenticity of documents.
District court Local Rule 3.11, however, provides:
STIPULATIONS - Stipulations will be recognized as binding only
when made in open Court, on the record at a deposition, or when
filed in the proceeding. Written stipulations affecting the
progress of the case shall be filed with the Court, be in the
form provided by Local Rule 14.8, and will not be effective until
approved by the judge.
As the district court noted in declining to recognize the supposed
out-of-court stipulation (Tr. 10/14/83 at 895-896), at trial Rossmoor
itself had been zealous in seeking enforcement of the Local Rules and
the court had consistently enforced them.
Rossmoor also states that the supposed out-of-court stipulation had
been confirmed at the beginning of the trial. That discussion (Tr. 10/
3/83 at 2-16), however, was focussed entirely upon the authenticity of
"Navy documents," rather than other types of documents. As a practical
matter, virtually all documents on both sides were letters and records
taken from Department of the Navy files. The parties finally agreed to
authenticity, but only as to the Navy documents then under discussion.
/19/ For substantially the same reasons, Great American's laches and
waiver arguments also fail. See, United States v. California, 332 U.S.
19, 40 (1947).
RIVER ROAD ALLIANCE, INC., ET AL., Plaintiffs-Appellees v. CORPS OF
ENGINEERS OF THE UNITED STATES ARMY, ET AL., Defendants-Appellants and
NATIONAL MARINE SERVICE, INC., Defendant-Intervenor-Appellant and
PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee v. UNITED STATES
ARMY CORPS OF ENGINEERS, ET AL., DefendantsAppellants
Nos. 84-1689, 84-2045
IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF ILLINOIS
BRIEF FOR THE FEDERAL APPELLANTS
INDEX
OPINION BELOW
The opinion of the district court (Honorable William L. Beatty)
appears in the clerk's record at D.E.I.38 and D.E.II.l0. /1/ It has
been reproduced at pages 1-11 in the appendix ("App.") previously filed
by appellant, National Marine Service, Inc.
JURISDICTION
The final judgment of the district court (D.E.I. 39; D.E.II. 11)
was entered on April 20, 1984. National Marine Service, Inc. filed its
notice of appeal on April 26, 1984 (D.E.I. 42). The United States'
notice of appeal was filed on June 18, 1984 (D.E.I. 54; D.E.II. 13).
This Court's jurisidiction rests on 28 U.S.C. 1291.
RELEVANT STATUTES AND REGULATIONS
The statutes and regulations relevant to this appeal are set forth
in the appendix filed by National Marine Service at 47 219. A brief
summary of the regulatory scheme is set forth infra at 10.
QUESTIONS PRESENTED
1. Whether the Corps' determination not to prepare an Environmental
Impact Statement pursuant to Section 102(2)(C) of NEPA was arbitrary
and capricious, or was based on inadequate consideration of
environmental factors.
2. Whether the Corps' consideration of alternatives to the issued
permit was adequate under Section 102(2)(E) of NEPA.
STATEMENT OF THE CASE; COURSE OF THE PROCEEDING AND
DISPOSITION BELOW
In these two consolidated cases appellees, plaintiffs below,
challenged the issuance of a permit by the United States Army Corps of
Engineers ("Corps") to National Marine Service, Inc. for a temporary
barge fleeting facility on the Mississippi River (D.E.I.l, ll; D.E.II.
2). Appellees alleged violations of Section 102 of the National
Environmental Policy Act ("NEPA"), 42 U.S.C. 4332, and implementing
regulations (D.E.I.1, 11; D.E.II. 1). /2/ Specifically, appellees
alleged, inter alia, that the Corps violated the statute by failing to
prepare an Environmental Impact Statement pursuant to 42 U.S.C. 4332(
2)(C) and that the Corps failed to study, develop, and describe
reasonable alternatives in violation of 42 U.S.C. 4332(2)(E).
The district court entered summary jugdment in favor of
appellees (D.E.I. 34; D.E.II. 11). The district court held that the
Corps' issuance of the permit violated NEPA and Corps regulations
because the Corps failed to take the necessary "hard look" at the
environmental consequences of the project and failed to adequately
consider reasonable alternatives and other factors. The district court
declared the permit invalid and enjoined National Marine Service from
conducting barge fleeting activities at the site (App. 7-9).
Both National Marine Service and the United States appealed from the
district court judgment. The two appeals were consolidated by order of
this Court.
CITATIONS TO THE RECORD
Appellant, National Marine Service has previously submitted an
appendix to this Court which contains the district court opinion and
major documents from the administrative record. To avoid needless
duplication, references in this brief to those documents will be cited
to that appendix ("App."). The administrative record consists of three
volumes and subsequently-filed documents. References to materials not
contained in the appendix will be cited by the volume ("Vol.") number
and page or exhibit, as appropriate; the subsequently-filed documents
will be identified by the docket entry number in the clerk's record
(see note 1, supra).
STATEMENT OF THE FACTS
1. The project.-- The project in question is a barge fleeting
facility, operated by National Marine Service, at mile 217.3 along the
Illinois bank of the Mississippi River. The fleeting facility is
essentially a barge mooring area which would accommodate a maximum of
30 barges. This facility involved in stallation of three anchors,
anchor chains, and mooring buoys to hold the barges in place. A Corps
permit for this facility is required pursuant to Section 10 of the
Rivers and Harbors Act. 33 U.S.C. 403. Because of Illinois law
relating to riparian rights, see Hardin v. Jordan, 140 U.S. 317 (1891),
riparian ownership or, as in this case, a lease from the riparian
owner, is also required to establish the fleeting facility.
The fleeting site is in Navigation Pool 26 or "Alton Lake," a pool
in the Mississippi River created by Lock and Dam 26. At its maximum
capacity, the fleeting facility would occupy 1,500 feet of the
approximately 256 miles of Alton Lake shoreline (App. 31, 42). The
site is just downriver from National Marine Service's shipyard and
barge repair facility located at mile 218 in Grafton, Illinois. The
fleeting site is adjacent to the Great River Road, a national scenic
highway which parallels the Mississippi River from Minnesota to the
Gulf to New Mexico (App. 4). The location is at the extreme upper end
of scenic bluffs which parallel the River Road from Grafton to Alton, a
distance of approximately 15 miles (App. 35).
Riverway Towing Co. submitted an application for the permit in
question to the Corps in August 1980. /4/ While the application was
pending, Riverway Towing Co. was purchased by National Marine Service.
That purchase did not effect any change in the permit proposal or
purpose for the facility (App. 31; Vol. I, Ex. 40, 4l). Riverway/
National Marine Service intended to use the fleeting facility as an
overflow area to accommodate repair-related and general fleeting
requirements. Because the fleeting area was intended to be an overflow
area, Riverway/National Marine Service did not anticipate using the
facility more than eight months of the year (Vol. II, p. 21, 118).
The primary purpose for the facility was to serve Riverway/National
Marine Service's repair yard (Vol. II, p. 18). The fleeting facility
would provide an area to moor barges awaiting repair or waiting pick-up
after repair. Riverway/National Marine Service also performs emergency
repairs on towboats. In that in stance, the fleeting facility would
store the barges in tow (Vol. II, p. 18).
In addition, Riverway/National Marine Service intended to use the
facility for "general fleeting" (App. 31, 46). The limited capacity of
existing Lock and Dam 26 and construction of a new Lock and Dam 26,
have caused chronic backlogs of barge tows 6/ awaiting passage through
the lock. A mooring area for barges relieves the need for towboats to
hold barges with their engines running. Furthermore, by splitting tows
into smaller units, lockage time (and thus, the backlog for all boats)
is reduced (App. 34). In order to accomplish the splitting procedure,
tows are tied off in fleeting areas such as the one at issue (App. 34).
General fleeting capability may also enhance Riverway/ National Marine
Service's ability to attract repair business (D.E.I. 47).
2. Corps processing of the permit application. -- Upon receipt of
the application in August 1980, the Corps solicited comments from
citizens, government officials, and government agencies. A public
hearing was held on December 18, 1980, to per mit all interested
parties an opportunity to express their views (App. 20; Vol. II).
Prehearing and post-hearing written comments were received. The Corps
compiled summaries of the oral and written comments (Vol. I, Ex. 20,
22, 24). /7/
The Illinois Department of Conservation Historic Preservation Office
concluded that the fleet operation would have no effect on historic,
architectural, or archaelogical sites in the area (Vol. I., Ex. 7). /8/
With regard to water quality, the Illinois Environmental Protection
Agency and United States Environmental Protection Agency interposed no
objections (Vol. I., Ex. 8, 27, 28). The Coast Guard had no objection
to the permit from the perspective of navigational safety (Vol. II, p.
23-2 ).
Citizen opposition to the permit was primarily directed at the
fleeting facility's aesthetic impact. Opponents regarded the proposed
fleeting facility as unwanted visual pollution of the scenic River
Road. See Vol. I, Ex. 20, 22, 24.
The Illinois Department of Conservation ("IDOC") and United States
Fish and Wildlife Service ("FWS") initially expressed opposition to the
proposal because of possible adverse impact on a mussel bed downstream
from the fleeting site (Vol. I, Ex. 15, 16, 17). Due to questions
raised by those agencies, Riverway/National Marine Service (at the
Corps' suggestion) hired a consultant to study the bed and potential
impacts (Vol. I, Ex. 32). The consultant's study identified no
federally-listed endangered species (ibid.). The study concluded that
the bed did not extend upriver from mile 217.l (the fleeting site is at
mile 217.3) and that the fleeting activity would not increase existing
adverse impacts to the mussel bed caused by pollution and boat traffic
(ibid.). The consultant's study was reviewed by the IDOC, FWS, and
Corps environmental staff (Vol. I, Ex. 33, 34, 35).
Discussions among these three agencies about the mussel bed
continued (Vol. I, Ex. 45, 46, 49). Eventually the FWS and IDOC
indicated that they would withdraw their opposition to the permit
provided that a mussel monitoring requirement was imposed in the permit
(Vol. I, Ex. 55). The monitoring plan advocated by the wildlife
agencies would have cost the permit applicant $200,000 (ibid.). The
Corps concluded that it was unreasonable to require the applicant to
fund a monitoring plan of that magnitude and proposed to condition the
permit with a less costly mussel monitoring plan (ibid.). The IDOC and
FWS then renewed their recommendations that the permit not be issued
(Vol. I, Ex. 60, 61).
In conjunction with its public interest review of the permit
application, see 33 C.F.R. 320, 325, the Corps complied with procedures
mandated by NEPA. Pursuant to NEPA, when an agency undertakes a "major
federal action" and determines that its proposed action may
significantly affect the environment, the agency must prepare a
thorough evaluation of that impact. 42 U.S.C. 4332(2)(C). This
evaluation is known as an Environmental Impact Statement ("EIS").
Otherwise the agency will issue a Finding of No Signifi cant Impact
("FONSI"). The Corps' decision to issue an EIS or FONSI is based upon
an Environmental Assessment ("EA") of its proposed action. 33 C.F.R.
230.9; 40 C.F.R. 1508.9. For a permit application which does not
require an EIS, the district engineer also prepares Findings of Fact
("FOF"). 33 C.F.R. 230, App. B., para. 9; 33 C.F.R. 325.2(a)(b).
Pursuant to Corps regulations, regulatory permits like the one at issue
here normally requires preparation of an EA, but not an EIS. 33 C.F.R.
230.6, 230.7(e). Here, on October 31, 1981, an EA was issued. The EA
considered the facility's impact on conservation, aesthetics, water
supply, water quality, recreation, historic values, endangered species,
and mussels (App.27-30). The EA concluded with a FONSI -- meaning,
that an EIS was not needed because the Corps had determined that the
temporary fleeting facility would not have a significant impact on the
human environment (App.29-30).
In addition, on June 15, 1982, the Corps issued the FOF (App.
31-47). The document summarized 17 issues which were raised during the
public review process (ibid.). The District Engineer commented on each
issue (ibid.). The FOF affirmed the FONSI and concluded that the
overall public interest would best be served by issuance of a temporary
permit.
Following notification that the Corps intended to issue the permit,
the FWS requested elevated review of the decision pursuant to a
Memorandum of Agreement (App. 214-217) between the Secretary of the
Interior and the Secretary of the Army (Vol. I, Ex. 60). /9/ By letter
dated September 15, 1982, Assistant Secretary of the Army William
Gianelli responded to five issues raised by the FWS in its request for
elevated review, /10/ and concluded that further review of the District
Engineer's decision was not warranted (Vol. I, Ex. 63).
On October 5, 1982, the Corps issued the permit (App. l2). The
permit provided that National Marine Service must discontinue use of
the site after notification of completion of the new Lock and Dam 26
(App. 17). The terms of the permit required National Marine Service to
conduct a mussel survey during the summer of 1984 for submission to the
Corps (App. 16). The Corps could suspend, modify, or revoke the permit
if there was evidence of significant damage to the mussel bed (ibid.).
The permit also contained other provisions designed to minimize
environmental impacts. For instance, mooring of barges with dangerous
cargoes and making major repairs or transferring cargo at the site was
prohibited (App. 17). Other provisions minimized the use of search
lights and noise from bullhorns and machinery (ibid.). Pursuant to
this permit, National Marine Service operated the fleeting facility at
the site during the one and one-half years of this litigation. /11/
3. District court opinion. -- In its opinion, the district court
stated that "the Corps has failed to take the 'hard look' required to
support its conclusions, and has failed to document that 'hard look' in
the Environmental Assessment, Findings of Fact and Finding of No
Significant Impact, in violation of NEPA , 42 U.S.C. Sec. 4332(2)(C)
and the applicable regulations" (App. 7). Specifically, the lower
court held that the Corps' FONSI was arbitrary and capricious because:
(1) the Corps inadequately considered the fleeting facility's impact on
aesthetic values and (2) recreational activities; (3) the Corps
excluded from consideration the cumulative impact of existing and
foreseeable barge fleeting operations on Alton Lake; (4) the Corps did
not take a "hard look" at the facility's potential impact on the mussel
bed and over-wintering catfish, and did not give adequate weight to the
views of the U.S. Fish and Wildlife Service and Illinois Department of
Conservation; and (5) the Corps in adequately evaluated the degree to
which the fleeting operation's effects on the quality of the human
environment are likely to be highly controversial, as required by 40 C.
F.R. 1508.27(b)(7) (App. 7-8). Failure to adequately consider and
document its consideration of these factors was also held to violate
Corps regulations (ibid.). In addition, the court held that the Corps
violated Section 102(2)(E) of NEPA and implementing regulations by
failure to "study, develop and describe appropriate alternatives" (App.
9). The district court invalidated the permit and enjoined National
Marine Service from further use of the site (App. 10). The district
court stopped short of deciding that the administrative record showed a
"significant" effect which would have required the Corps to prepare an
Environmental Impact Statement (App.9-10); rather, the lower court
merely concluded that the FONSI, EA, and FOF were flawed.
ARGUMENT
I
THE CORPS COMPLIED FULLY WITH NEPA AND ITS REGULATIONS
BEFORE ISSUING THE FLEETING PERMIT TO NATIONAL MARINE
SERVICE
A. The court's role in reviewing the Corps' compliance with NEPA is
limited. -- Although NEPA sets forth substantive environmental goals
and is designed to affect the substance of agency decisionmaking, "its
mandate to the agencies is essen tially procedural." Vermont Yankee
Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558 (1978). NEPA is a tool
for ensuring that an agency has considered the environmental impacts of
its proposed action; it does not dictate a particular result
necessarily favorable to aesthetics or any other environmental values.
Strycker's Bay Neighborhood Council v. Karlen, 444 U.S. 223, 227 228
(1980). In other words, NEPA does not require the agency to elevate
environmental concerns over other considerations. Id; Baltimore Gas &
Electric Co. v. NRDC, 103 S. Ct. 2246, 2253 (1983).
The reviewing court's only role is to ensure that the agency has
considered the environmental consequences. Strycker's Bay Neighborhood
Council v. Karlen, supra, 444 U.S. at 227-228. The court is not to
substitute its judgment for that of the agency as to the wisdom or
desirability of a particular project. Id.; Vermont Yankee Nuclear
Power Corp. v. NRDC, supra, 435 U.S. at 555. An agency's decision that
the legal requirements of NEPA have been complied with -- including,
inter alia, its determination that no Environmental Impact Statement is
required -- must be up held unless found to be "arbitrary or
capricious." See, e.g., Simons v. Gorsuch, 715 F.2d 1248, 1251 (7th
Cir. 1983); West Chicago, Illinois v. NRC, 701 F.2d 532, 651 (7th Cir.
1983).
A finding of a NEPA violation in the context of this case is
dependent upon a determination that the Corps failed to consider
relevant factors in evaluating whether an EIS was required, or that the
Corps' conclusion that the permit would not significantly effect the
environment was arbitrary and capricious. Id. The arbitrary and
capricious standard is a highly deferential one which presumes the
validity of an agency's action. Citizens to Preserve Overton Park,
Inc. v. Volpe, 401 U.S. 402, 419 (1917). Moreover, the burden is on
the parties challenging the Corps' NEPA compliance to prove otherwise.
See Lower Alloways Creek Township v. Public Service Electric and Gas
Co., 687 F.2d 732, 743 (3d Cir. 1982). The administrative record
demonstrates that the district court in the present case departed from
these normal standards of judicial review.
B. The Corps issuance of a FONSI was not arbitrary and capricious.
-- The Corps based the FONSI on careful consideration of all comments
received and responded to those comments in the EA and FOF.
Nevertheless, the district court concluded that the Corps' issuance of
a FONSI was based on inadequate consideration of five factors (App.
7-8), listed supra at 13. Contrary to the lower court's conclusion,
the administrative record demonstrates that the Corps adequately
considered all of these issues. Moreover, the Corps' consideration and
assessment of those issues also demon strates that the Corps'
determination that the temporary fleeting facility would not have a
significant impact on the human environment was not arbitrary and
capricious.
1. Aesthetics. -- The Corps compiled abstracts of the numerous
comments concerning the fleeting facility's aesthetic impact (Vol. I,
Ex. 20, 22, 24). Both the EA and FOF responded to those comments and
document that the Corps considered the aesthetic impact. The EA
observed (App. 27) that evaluation of aesthetics is necessarily
subjective -- some persons found the presence of the facility damaging
to the adjacent scenic highway while others did not. Because of their
subjective nature, aesthetic issues do not lend themselves to detailed
or quantifiable written analysis. See Maryland-National Capital
Parkway v. U.S. Postal Service, 487 F.2d 1029, 1038 (D.C. Cir. 1973);
City of New Haven v. Chandler, 446 F. Supp. 925, 930 (D. Conn. 1978).
The Corps concluded that aesthetic impairment would not be
significant because the facility would occupy less than 5% of more than
seven miles of unobstructed shoreline and because the site was located
at the extreme end of the scenic bluffs (App. 27, 35). No significant
impact due to noise, searchlights and fumes was expected because the
closest residence was .6 of a mile from the site and no complaints in
this regard had been registered about a similar fleeting facility along
the River Road (App. 28, 37). Moreover, the Corps conditioned the
permit with provisions designed to minimize noise and use of search
lights at the site, as well as provisions forbidding permanent mooring
of barges (App. 17).
With regard to the historic villages of Elsah and Chautauqua, the EA
noted that they were four miles and one and one-half miles downstream,
respectively. In light of those distances the Corps' determination
that the facility would not significantly affect those villages was
reasonable. Furthermore, the Illinois Department of Conservation
Historic Preservation Office advised the Corps that the fleet proposal
would have no affect on the historic sites in the area (Vol. I, Ex. 7).
The district court's assertion (App. 7) that the Corps did not
examine whether the introduction of an industrial use was consistent
with previous government actions to preserve the area's natural beauty
is refuted by the FOF. There, the Corps acknowledged that impairment
of the aesthetic value of areas along the highway would diminish the
benefits of federal and state funds expended to construct the scenic
highway. The FOF also reflected that the Corps examined the scenic
easements acquired by the State of Illinois and found that the proposal
would not violate those easements because they were applicable only to
the landward side of the highway (App. 39). Finally, the Corps
evaluated the visual impact of the facility with the knowledge that the
site would be fully restored when the new Lock and Dam 26 is completed
in 1987 (see letter of Assistant Secretary of the Army, Vol. I, Ex.
63).
2. Recreational activities. -- Here, too, the EA and FOF documented
the Corps' consideration of the facility's impact on waterrelated
recreation (App. 28, 36). /13/ The Corps found that the site has no
unique recreational value in that regard (App. 36). No beaches,
marinas, or launching ramps are in the vicinity (App. 28). Small boats
generally do not operate near the site because of possible damage by a
rock revetment (App. 28). More over, because the river channel in the
vicinity of the site is more than 2,000 feet wide the fleet would not
obstruct other boats (App. 34). /14/ The Corps, therefore, concluded
that the principal recreational effect would be impairment of bank
fishing for approximately 1,500 feet. Again, because the bank area was
a very small percentage of the Alton Lake shoreline and the surface
fishing area was de minimis, the Corps concluded that the impact on
recreational activities was minimal (App. 28; Vol. I., Ex. 63).
3. Cumulative impacts. -- While the EA and FOF did not address under
a specific heading the topic of "cumulative impacts of fleeting
facilities on Alton Lake," /15/ the administrative record evidences
that the Corps did not "exclude from consideration" (App. 8) impacts
from this facility in relation to other facilities in the area. Corps
regulations provide that a FONSI will be based, in part, on the "Corps'
expertise." 33 C.F.R. 230, App. B, para. 8(c). Corps documents (App.
26; Vol I, Ex. 47) expressly stated that the FONSI in this instance
was based on expertise gained from existing fleeting facilities and an
umbrella environmental assessment report for seven proposed fleeting
facilities in St. Louis Harbor (D.E.I. 31). That umbrella assessment
considered the impacts of multiple fleeting facilities on a different
stretch of the River and concluded with a FONSI (ibid.).
Also included in the administrative record was a fact sheet titled,
"Barge Fleeting in Navigation Pool No. 26" (D.E. II. 8). The fact
sheet summarized the fleeting permit applications for Alton Lake and
considered whether further "master," or comprehensive, planning with
respect to these fleeting applications was necessary. The fact sheet
discussed a Corps 1977 Master Plan for Alton Lake which identified
potential fleeting sites (ibid.). It was noted that the listed
fleeting permit applications were attributable to the inadequate
capacity of Lock and Dam 26 and that a replacement lock with increased
capacity was expected by 1988 (D.E. II. 8). The document concluded
that individual permit processing, rather than master planning, was
preferable to resolve such short-term controveries. The fact sheet
also indicated that the Corps intends to reevaluate the 1977 master
plan for Alton Lake following completion of the "Great III study." That
reference was to a study being conducted pursuant to Pub. L. 95-502, 92
Stat. 1693 (Upper Mississippi River System Comprehensive Master Plan
Management Plan). /16/
The Corps' consideration of other fleeting operations which were
reasonably related to the Riverway/National Marine service proposal is
also illustrated by the fact that the Corps initially considered
Riverway/National Marine Service's application together with SCNO's
application (subsequently withdrawn) for a nearby site. See supra, at
7, n. 7. Implicit in the joint consideration of the permits was a
recognition that the impacts of these two, nearby fleeting facilities
were related; also implicit was a recognition that no significant
cumulative impacts could be expected because of other proposed fleeting
facilities located at greater distances.
In sum, the Corps did assess Riverway/National Marine
ervice'sSproposal with regard for other proposed fleeting facilities.
The FONSI was thus based on a consideration of cumulative impacts.
4. Mussels and overwintering catfish. -- The extensive consideration
which the Corps gave to the mussel bed issue refutes the court's
conclusion that the Corps did not take a "hard look" at that issue. In
response to concerns of the FWS and IDOC the permit applicant hired a
marine biologist to conduct a mussel survey (Vol.I, Ex.32). The survey
indicated that the mussel bed extended only to mile 217.1, which
concurred with the reports from commercial mussel fisherman (Vol. I,
Ex. 30, 32, 49). Therefore, the fleet facility (at mile 217.3) would
not be directly above the mussel bed. No endangered species were found
(Vol. I, Ex. 32). After analyzing the issue of impacts, the consultant
concluded that the facility could be beneficial to some species and
that he did not expect additional adverse impacts from the fleet
facility. The Corps conducted an independent review of that report.
See 40 C.F.R. 1506.5; 33 C.F.R. 230, App. B. para. 8(b); Save Our
Wetlands, Inc. v. Sands, 711 F.2d 634, 643 (5th Cir. 1983) (approving
Corps' reliance on consultant's report submitted by applicant). Based
on its review of the consultant's study the Corps environmental staff
concluded that no additional, significant impacts to the mussels would
result (App. 10; Vol. I, Ex. 35). Nevertheless, in the EA, the Corps
proposed to impose permit conditions designed to protect the mussel
bed; the conditions would be based upon the recommendations of the FWS
and IDOC (App. 29).
The Corps repeatedly solicited and considered comments from the Fish
and Wildlife Service and Illinois Department of Conservation (Vol.I,
Ex. 16, 17, 29, 30, 31, 33, 34, 45, 46, 49, 50, 51, 52, 53, 55, 56, 57,
59, 63). Because potential impacts resulting from barge fleeting such
as siltation and pollution, would be transmitted downstream, the
wildlife agencies believed that fleeting activities upstream from the
mussel bed might ad versely affect the bed. However, as the IDOC
acknowledged, few definite conclusions about impacts were possible due
to a general lack of research on mussels (Vol. I, Ex. 45). Therefore,
IDOC's opposition was based on lack of substantial evidence that the
fleet would not harm the bed, rather than evidence that it would cause
harm (ibid.). Ultimately, the FWS and IDOC recommended conditioning
the permit on a monitoring study which was estimated to cost the
applicant $200,000 (Vol. I, Ex. 55). Notably, the agencies were
willing to withdraw their opposition to issuance of the permit,
provided that the permit was conditioned on this ambitious monitoring
plan (ibid.).
The Corps concluded that the $200,000 monitoring plan was an
unreasonable condition to impose on the applicant (ibid.). As stated
in a Corps memorandum, "the applicant should not be required to fund
ambitious studies to close a long term information gap expecially since
the impacts of fleeting operations on mussel beds, as far as we know,
might be beneficial rather than adverse" (Vol. I, Ex. 55). Instead,
the Corps required a much more modest mussel survey as a follow-up to
the survey previously conducted by the applicant's consultant (ibid.).
The permit provided that the permit could be suspended, modified, or
revoked if there was evidence of significant damage to the mussel bed
(App. 16).
The two wildlife agencies recommended denial of the permit in the
absence of the costly monitoring plan. After the FWS was informed that
the Corps District Engineer intended to issue the permit, it sought
higher review of the District Engineer's decision (Vol. I, Ex. 59). The
Assistant Secretary of the Army responded to the Fish and Wildlife
Service's concerns and concurred with the District Engineer's decision
to issue the permit (Vol. I, Ex. 63). The Assistant Secretary
emphasized the opportunity for corrective measures, should the mussel
survey indicate adverse effects (ibid.).
During the one and one-half years of consultations with the Corps
district office about the Riverway/National Marine Service application,
neither the FWS nor the IDOC mentioned over-wintering catfish. The FWS
raised the issue for the first time in its request for elevated review
of the District Engineer's decision (Vol. I, Ex. 60). Therefore, it
was the Assistant Secretary of the Army who responded to the catfish
issue. The Secretary presumed from the FWS's belated interest that it
was not a major concern (Vol. I, Ex. 63). The Secretary also implied
that impacts to catfish would not be significant by stating that the
fleeting area was only a very small portion of Alton Lake and would
only be a temporary fixture (ibid.). In addition, the FWS appeared to
be primarily concerned about the adverse impact on fishing in the area
resulting from damage to the catfish. The Corps acknowledged in its EA
that fishing opportunities at the site would be adversely impacted, but
concluded that it was not a significant impact in light of the small
portion of Alton Lake affected by the site (App. 28). In sum, there is
record support that the Corps devoted considerable attention to the
mussel issue and made substantial efforts to consider and accommodate
the views of the FWS. In light of this evidence, the district court's
d not give sufficient weight to the views of the Fish and Wildlife
Service and Illinois Department of Conservation amounts to imper
missible judicial intrusion into the substantive decision. The FWS's
and IDOC's opposition to the permit does not necessitate the
preparation of an EIS. NEPA does not require the Corps to accord
determinative weight to the views of the FWS. Texas Committee on
Natural Resources v. Marsh, No. 83-2145, slip op. 4754 (5th Cir. July
16, 1984). In Sierra Club v. Alexander, 484 F. Supp. 455, 466-469 (N.
D.N.Y. 1980), aff'd without op., 633 F.2d 206 (2d Cir. 1980), the court
upheld the Corps' decision not to file an EIS before issuing a permit
authorizing fill of wetlands, despite the FWS's request that an EIS be
prepared and its opposition to the permit. The court also held that
the Corps did not violate its regulation, 33 C.F.R. 320.4(b)(1), which
requires the Corps to give "great weight" to the views of the FWS. The
court explained, 484 F. Supp. at 470:
Plaintiff fails to recognize that the final decision rested with
the Corps, which had to base its determination not only on the
impact of the project on fish and wildlife but on a "careful
weighing of all those factors which become relevant in each
particular case * * *. The benefit which reasonably may be
expected to accrue from the proposal must be balanced against its
reasonably foreseeable detriment." 33 C.F.R. 320.4 (a)(1).
The Fish and Wildlife Coordination Act and Corps regulation do
not require that the Corps' decision always correspond to the
views of the Fish and Wildlife Service. Rather the Act requires
that the views be given serious consideration, and there is
nothing in the Corps record which shows the Corps failed to do
so.
Accord, Texas Committee on Natural Resources v. Marsh, supra, slip op.
4753-4754. See also, Lake Erie Alliance v. United States Army Corps of
Engineers, 526 F. Supp. 1063, 1081 (W.D. Pa. 1981), aff'd without
published op., 707 F.2d 1392 (3d Cir. 1983), cert. denied U.S.
(1983).
Here, the Corps gave the FWS's views serious consideration and
correctly weighed many more factors than the FWS's ultimate opposition
to the permit. In light of all factors -- which included, inter alia,
the wildlife agencies' indications that they would withdraw their
opposition if a mussel monitoring plan was required; the large expense
of those agencies' suggested monitoring plan; the purpose for and
economic benefits resulting from the fleeting facility; the imposition
of permit conditions for the protection of mussels in response to the
wildlife agencies' reservations; and the temporary nature of the
facility -- the Corps accorded ample consideration and weight to the
views of the Fish and Wildlife Service and Illinois Department of
Conservation.
5. Controversy. -- The district court held (App. 8) that the "Corps
did not adequately evaluate the degree to which the project's effects
on the quality of the human environment are likely to be highly
controversial, notwithstanding 40 C.F.R. 1508.27(b)(7)." This point
refers to a regulation of the Council on Environmental Quality which
provides guidance for an agency's evaluation of the "intensity," and
thus, the "significance", of a project's environmental consequences.
The courts have not interpreted this regulation to require an EIS
whenever there is substantial public opposition to a federal action or
disagreement among experts. See, e.g., Nucleus of Chicago Homeowners
v. Lynn, 524 F.2d 225, 231-232 (7th Cir. 1975); Town of Orangetown v.
Gorsuch, 718 F.2d 29, 39 (2d Cir. 1983); Rucker v. Willis, 484 F.2d
158, 162 (4th Cir. 1973). To hold otherwise would turn over the
decision of whether an EIS should be prepared to the opponents of a
project, regardless of the seriousness of the impact. Stated
differently, simple disagreement with the fleeting proposal does not
raise any cognizable NEPA challenge. See Metropolitan Edison Co. v.
PANE, 103 S. Ct. 1556, 1563 (1983).
The regulation in question, 40 C.F.R. 1508.27(b)(7), speaks to the
"degree to which the effects" of a project are likely to be
controversial. Thus, the regulation has no meaning without reference
to a particular impact. For example, it requires consideration of the
controversial nature of the project's impacts on mussels. All such
impacts and public comments on particular impacts were adequately
considered. The regulation requires no more. Accordingly, no EIS was
required, notwithstanding public opposition to the project. The Corps
was undoubtedly cognizant of and gave consideration to the
controversial nature of the fleeting permit.
In sum, the Corps performed its obligation to take a "hard look" at
the environmental impacts involved and made a reasoned determination
that the impact of the temporary fleeting facility was not significant.
presenting the reasons for this determination. See 33 C.F.R. 230.9(c),
230.10. Because the administrative record demonstrates ample
compliance with the procedural requirements of NEPA, the district court
erred by concluding that the FONSI was arbitrary and capricious.
B. Under the circumstances, the Corps' consideration of alternatives
was adequate. -- The district court held (App. 8-9) that the Corps
violated Section 102(2)(E) of NEPA, 42 U.S.C. 4332(2)(E), and
regulations implementing that provision /18/ by failing to study,
develop and describe alternatives. Like the determination not to file
an EIS, the Corps' compliance with Section 102(2)(E) is judicially
reviewed under the arbitrary and capricious standard. See supra at 15.
Section l02(2)(E) requires federal agencies to "study, develop and
describe alternatives to recommended courses of action in any proposal
which involves unresolved conflicts concerning alternative uses of
available resources." The duty to consider alternatives imposed by this
section is not limited to agency actions which require an EIS. E.g.,
Nucleus of Chicago Homeowners Ass'n v. Lynn, supra, 524 F.2d at 232;
Aertsen v. Landrieu, 637 F.2d 12, 20 (lst Cir. 1980). However, if an
agency's finding of no significant impact is valid, an agency may
consider a narrower range of alternatives than it would be obliged to
assess if an EI Swere required. City of New York v. United States
Department of Transportation, 715 F.2d 732, 744 (2d Cir. 1983), cert.
denied, U.S. (1984). Moreover, an agency may describe in
less detail alternatives pursuant to Section 102(2)(E) than is required
in an EIS pursuant to Section 102(2)(C)(iii). Otherwise, Section 102(
2)(E) would effectively force an agency to file an EIS, regardless of
whether the project significantly affects the human environment. An
EA, unlike an EIS need not provide a detailed or lengthy discussion of
alternatives pursuant to Section 102(2)(E). To the contrary, both
Corps and Council on Environmental Quality regulations direct the Corps
to present only a "brief" discussion of "reasonable" alternatives in an
EA. 40 C.F.R. 1508.9(a)(1),(6); 33 C.F.R. 230.9(c), 230.10.
It is left to the agency's discretion to choose the alternatives
considered and the degree of detail to which they are discussed. City
of New York v. United States Department of Transportation, supra, 715
F.2d at 742; North Slope Borough v. Andrus, 642 F.2d 589, 601 (D.C.
Cir. 1980). The extent to which an alternative need be considered at
all varies with existing circumstances. Piedmont Heights Civic Club,
Inc. v. Moreland, 637 F.2d 430, 436 (5th Cir. 1981). Agencies need not
discuss alternatives which are fanciful or hypothetical. Vermont
Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 551 (1978). The
range of alternatives that an agency need consider is bounded by a
notion of feasibility. Id. In other words, the duty to explore
alternatives imposed by Section 102(2)(E), like the duty under Section
102(2) (C)(iii), is subject to a "rule of reason." City of New York v.
United States Department of Transportation, supra, 715 F.2d at 742;
Robinson v. Knebel, 550 F.2d 422, 425 (8th Cir. 1977). Here, the Corps
implicitly considered the alternatives of granting or denying the
permit as proposed, as well as the chosen alternative of issuing the
permit with modifications designed to minimize environmental impacts.
Cf., Richland Home- owner's Ass'n v. Pierce, 671 F.2d 935, 944 (5th
Cir. 1982) (failure to address specifically as alternatives the options
of building or not building a low-cost housing project was merely a
technical omission to state specifically an alternative implicitly
rejected); Save Our Wetlands, Inc. v. Sands, 711 F.2d 634, 645 (5th
Cir. 1983) (Corps' determination on certain issues implicit in decision
to issue permit). Below, appellees' Section 102(2)(E) challenge was
not concerned with these alternatives. Rather, appellees argued below
that the Corps violated Section 102(2)(E) because of inadequate
exploration and consideration of alternative sites.
In order to establish a fleeting facility, Riverway/National Marine
Service must acquire ownership of riparian property rights. Riverway/
National Marine Service submitted to the Corps a consultant's study (D.
E. I. 47) and other comments (D.E. I. 47; Vol. II, p. 19) which
indicated that Riverway/National Marine Service had reviewed and
rejected all alternative sites in close proximity to its repair yard.
Other sites did not meet the physical requirements or were not
available for lease for fleeting purposes (ibid.).
The District Engineer, in the FOF (App. 41), opined that prospective
alternative sites existed, but in light of Riverway/ National Marine
Service's stringent location needs -- i.e., proximity to its repair
yard -- he concluded that no other site would be an improvement. /19/
Riverway/National Marine Service's stringent location needs was a
factor that the Corps properly took into account and a circumstance
which reflects on the reasonableness of the Corps' consideration of
alternative sites. In Coalition for Lower Beaufort County v.
Alexander, 434 F. Supp. 293, 296 (D.D.C. 1977), aff'd without op., 584
F.2d 558 (D.C. Cir. 1978), the Corps' EIS did not consider as an
alternative other property owned by an applicant seeking a permit to
build a large pier to accommodate a new metal plant. The court agreed
that the alternative site did not warrant consideration as an
appropriate alternative because the property was held by the applicant
for unrelated purposes and was not suitable to its needs in seeking the
permit. Stated differently, the extent to which alternatives must be
considered under NEPA is always a function of the objective of the
project. See City of New York v. United States Department of
Transportation, supra, 715 F.2d at 743; Trout Unlimited v. Morton, 509
F.2d 1276, 1286 (9th Cir. 1974); Farmland Preservation Assoc. v.
Goldschmidt, 611 F.2d 233, 239 (8th Cir. 1979).
The Corps in this circumstance is basically faced with two
alternatives -- to issue a permit or not to issue a permit. To force
the Corps to consider nearby alternative sites which had been reviewed
and rejected by National Marine Service would be futile. It would also
be unreasonable for the Corps to search out and select other, more
distant sites as "appropriate alternatives" for National Marine
Services's fleet. The Corps cannot force riparian owners to
accommodate National Marine Service's fleet; nor does the Corps have
the authority to make locational decisions for National Marine Service.
tatedSdifferently, an agency is not required to consider alternatives
whose implementation is remote and speculative. See Life of Land v.
Brinegar, 485 F.2d 460, 472 (9th Cir. 1983). Cf., Webb v. Gorsuch, 699
F.2d 157, 161 (4th Cir. 1983) (in evaluating permit, EPA properly
rejected an option as infeasible because the permittee did not own
sufficient land to accomplish that alternative).
Courts have, in some instances, required agencies to consider
alternatives which are outside the agency's jurisdiction and control.
E.g., NRDC v. Morton, 458 F.2d 827, 834-835 (D.C. Cir. 1972). However,
that rule is typically applied to broaden the scope of alternatives
which an agency must consider in the context of federal projects
designed to address broad governmental or public concerns. /20/ In
that circumstance, the rule has a reason able public policy purpose.
The rule has been employed where the responsible federal agency
preparing an EIS has lacked legislative authority to implement an
alternative that would fulfill the project's purpose; or, where an
alternative could only be carried out by a different federal agency.
See cases cited, supra, note 20. Limitations on legislative authority
should not necessarily render an alternative unreasonable because "NEPA
was intended to provide a basis for consideration and choice by
decision makers in the legislative as well as the executive branch."
NRDC v. Morton, supra, 458 F.2d at 837. /21/ Similarly, it would be
imprudent for the federal government to limit its response to public
needs according to the delegation of responsibility among federal
agencies. Therefore, the responsible agency under NEPA must not
confine itself to alternatives within its own field of operation, but
must consider those which may be carried out by other branches of the
federal government. E.g., Montgomery v. Ellis, 364 F. Supp 517, 525 n.
6 (N.D. Ala. 1973) (a reasonable alternative to a flood control project
for an area in habited by low-income persons would be relocation of the
inhabitants under other federal government programs).
However, the reasons for requiring an agency to develop and consider
alternatives outside its control in the context of government projects
are not applicable to private projects on private land which require a
government permit. Common sense and the rule of reason dictates that
NEPA does not require the Corps to consider and determine whether it
would issue a permit for an alternative location where the permittee
has neither expressed an interest in obtaining a permit at the
location, nor has the requisite property interest to establish the
fleeting facility there. Neither NEPA nor the Corps public interest
review of permits, see C.F.R. 320, 325, are intended to restrict a
private applicant's activities to the optimal location for his
proposal. Rather, a permit may be issued so long as the Corps
considers the environmental consequences and concludes that it would be
in the public interest to issue the permit.
The Corps' obligation to explore alternative sites in this context
is also limited by the terms of Section 102(2)(E) of the NEPA. The
provision applies only to proposals which involve "unresolved conflicts
concerning alternative uses of available resources" (ibid.) (emphasis
added). In an analagous circumstance, the "resource" over which there
are "unresolved controversies" has been defined so as to exclude any
necessity for consideration of alternative sites. Wicker Park Historic
District Preservation Fund v. Pierce, 565 F. Supp. 1066 (N.D. Ill.
1982), involved a NEPA challenge to a housing project funded by the
Department of Housing and Urban Development ("HUD"). Although HUD did
not consider alternative locations for the housing project, the court
held that HUD fulfilled its duty under Section 102(2)(E) by considering
alternative uses of the housing site itself. The court reasoned that
the "available resource" was the vacant land on which the proposal
project would be built and that to require consideration of alternative
sites pursuant to Section 102(2)(E) would, in effect, impose an EIS
requirement. See also Richland Park Homeowner's Ass'n v. Pierce,
supra, 671 F.2d at 944; Aertsen v. Landrieu, supra, 637 F.2d at 21.
Here, the "resource" is the proposed fleeting site at mile 217.3.
The "controversy" is whether the site should remain undeveloped or be
used for a temporary fleeting facility. Because the Corps considered
those options, it has complied with Section 102(2)(E).
Finally, in suits challenging agency compliance with NEPA, the
plaintiff bears the burden of demonstrating that reasonable
alternatives were not considered. Texas Committee on Natural Resources
v. Marsh, supra, slip op. 4757; Life of Land v. Brinegar, supra, 485
F.2d at 471. The district court's holding presumes that plaintiffs
below carried that burden. Yet, the district court fails to specify
any feasible, reasonable alternative that was not considered by the
Corps, presumably because plaintiffs did not, and cannot, carry their
burden of demonstrating that the Corps neglected to consider any viable
alternative sites.
In sum, under the proper standards relating to review of an agency's
consideration of alternatives, the court below erred by holding that
the Corps failed to comply with Section 102(2)(E). Under the factual
circumstances of this case, the Corps' consideration of alternatives
was not arbitrary and capricious. Moreover, the reasons for the Corps'
decision to issue the permit are ade quately explained in the FOF --
including its determination that the site in question offers advantages
over other locations, in light of National Marine's ervice'sSobjective
of serving its adjacent repair yard. The Corps thus fully complied
with NEPA.
CONCLUSION
For the foregoing reasons, the judgment of the district court should
be reversed.
Respectfully submitted,
/s/ F. HENRY HABICHT, II
F. HENRY HABICHT, II
Assistant Attorney General
/s/ FREDERICK J. HESS
FREDERICK J. HESS
United States Attorney East St. Louis, Illinois 62202
/s/ BRUCE REPPERT
BRUCE REPPERT
Assistant United States Attorney East St. Louis, Illinois 62202
/s/ DAVID C. SHILTON
DAVID C. SHILTON
/s/ ELLEN J. DURKEE
ELLEN J. DURKEE
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-3888
AUGUST 1984
/1/ D.E.I. refers to the docket entry number in the clerk's record
in the River Road Alliance case. D.E.II. refers to the docket entry
number in the case brought by the State of Illinois.
/2/ The River Road plaintiffs also alleged violations of other
statutes and regulations (D.E.I. 1, 11). The district court dismissed
those allegations without prejudice (App. 10).
/3/ After its motion for a stay pending appeal was denied by the
district court, National Marine Service immediately filed a notice of
appeal (D.E. I. 42) and applied to this Court for a stay of the
injunction pending appeal. On May 10, 1984, this Court denied the
application. National Marine Service filed its opening brief in No.
84-1689 on June 6, 1984. The United States subsequently filed its
notice of appeal.
/4/ Riverway Towing Co. simultaneously applied for a permit from the
Illinois Department of Transportation. Before the state agency made
its permit determination, the Illinois legislature withdrew the
Department's authority to issue or deny barge fleeting permits (App.
46). However, the Illinois Department of Transportation leased
property contiguous to the site involved here to National Marine
Service for barge fleeting operations. After the district court
judgment was entered, the State of Illinois informed National Marine
Service that this lease would not be renewed following its expiration
on May 31, 1984 (Exhibit A attached to National Marine Service's
opening brief).
/5/ The bulk of Riverway/National Marine Service's business is
repair work (Vol. 2, p. 17; D.E.I. 47). It is the only major repair
facility above Lock and Dam 26 (Vol. II, p. 18). With 145 employees,
National Marine Service is one of the largest employers in Jersey
County, Illinois (Vol. II, p. 17).
/6/ In addition to delays caused by the limited capacity of existing
Lock and Dam 26, the construction of the new Lock and Dam 26 will
exacerbate the problem by restricting the channel to one-half of its
former size (App. 34; D.E.I. 47). Delays of 72 hours at Lock and Dam
26 are not uncommon (ibid.). Tows of barges, held in place by churning
towboats, frequently queue up along the River Road above Lock and Dam
26 (ibid.; Vol. II, p. 118). The general fleeting demand will be
eliminated when the new Lock and Dam 26 is completed in 1987 (App. 45;
Vol. II, p. 119). Therefore, the permit issued by the Corps authorized
only a temporary facility to be discontinued upon completion of the new
Lock and Dam 26 (App. 46).
/7/ Riverway/National Marine Service's application was preceded by
an application from SCNO Terminal, Inc. to construct a fleeting
facility immediately downstream from the National Marine Service site
(App. 41). The Corps processed the permits jointly and simultaneously
solicted comments on both proposals (App. 20). Therefore, many of the
comments in the administrative record in this case pertain to both
applications. The SCNO proposal was larger by five times and
encountered more opposition than the instant permit. SCNO subsequently
withdrew its application and applied for a permit at a different
location (App. 41). Because SCNO intended to use its facility for
general fleeting only, its locational needs were not as stringent as
Riverway/National Marine Service's needs (App. 41).
/8/ The villages of Chautauqua and Elsah are located within one and
one-half miles and four miles, respectively, of the fleeting site (App.
44). Both are listed on the National Register of Historic Places (App.
5).
/9/ The Corps' final permit decision will ordinarily be made by the
District Engineer. The FWS may request review of a District Engineer's
decision by a higher Corps authority when there is insufficient
interagency coordination at the district level, significant new
information, or when the case involves issues of national importance
which need policy level review (App. 214). The Assistant Secretary of
the Army decides whether a case will be reviewed at a higher level and,
if so, at which level the final decision will be made (App. 216).
/10/ Four of the five objections made by the FWS (regarding catfish,
recreation, consideration of alternative sites, and area-wide planning)
had not been raised by the FWS during the nearly two years of
discussions with the Corps district office. The FWS's focus had
freviously been solely on the mussel bed.
/11/ The River Road plaintiffs filed their suit on September 22,
1982, prior to issuance of the permit (D.E. I. 1). On that date, the
district court issued a temporary restraining order enjoining the Corps
from issuing the permit (D.E. I. 2). The TRO expired on September 27,
1982, and the permit was issued on October 5, 1982. The State of
Illinois did not file its suit until March 11, 1983 (D.E. II. 1).
/12/ In the latter category, some commentators did not anticipate
the fleet creating an adverse visual impact because barge traffic is an
everyday occurrence along the River Road and an integral part of the
Mississippi River (e.g., Vol. II, p. 109, 112, 115, 118, 180; Vol.
III, p. 80-83).
/13/ Impacts to biking or motoring recreationists are addressed
under "aesthetics," supra, at 15-16.
/14/ Based on its study of the site and the proposal, the Coast
Guard had no objections to the permit from the perspective of
navigational safety (Vol. II, p. 23).
/15/ The regulations cited (App. 8) by the district court on this
issue (40 C.F.R. 1508.7, 1508.27(b)(7)) do not impose any requirement
that the topic be specifically addressed in an EA. The former
regulation defines "cumulative impact" and the latter regulation
includes cumulative impacts as a factor which the responsible federal
official should consider in evaluating the "intensity" of environmental
impacts.
/16/ In the FOF (App. 42) the District Engineer responded to
comments recommending that no fleeting permits be issued until a new
master plan for Alton Lake was developed. The District Engineer
explained that the Corps has no authority to determine use of the 80%
of private lands abutting Alton Lake aside from the individual permit
regulatory program. In addition, it was explained that the Corps could
not apply the master plan prepared by the Upper Mississippi River Basin
Commission because Pub. L. 95-502 provides that the Plan shall not be
implemented without express approval of the Plan by Congress.
/17/ In addition to NEPA, the district court held (App. 9) that
inadequate consideration of relevant factors violated Corps regulations
relating to its public interest review of permit applications (see 33
C.F.R. 320, 325). The regulatory public interest review and NEPA
compliance are a concurrent process. The regulations cited by the
district court (App. 9) basically provide for Corps consideration of
the same factors in its public interest review as NEPA requires.
Because the Corps fully complied with NEPA, it necessarily complied
with the cited regulations.
/18/ One of the regulations cited by district court, 33 C.F.R.
209.410(d)(1)(ii), was deleted in August 1980, and therefore, was
inapplicable to the processing of this permit. 45 Fed. Reg. 56760
(August 25, 1980). The other regulations refer to, and implement
Section 102(2)(E) of NEPA (40 C.F.R. 1501.2(c), 33 C.F.R. 230, App. B,
para. 8) or state a general policy of using the NEPA process to
identify and study "reasonable alternatives" (40 C.F.R. 1500.2, 33 C.F.
R. 230.5(e)).
/l9/ In context, it appears that the District Engineer meant that
the prospective alternative sites would not have met Riverway/ National
Marine Service's location needs. Consistent with that meaning, the
District Engineer explained (App. 41) that SCNO's location needs were
not as stringent and that SCNO had found an alternative site at Portage
Des Sioux. That latter site is a considerable distance from Riverway/
National Marine Service's repair yard.
/20/ E.g., E.D.F. v. Corps of Engineers, 492 F.2d 1123, 1135 (5th
Cir. 1974) (federal project to construction canal); E.D.F. v.
Froehlke, 473 F.2d 346 (8th Cir. 1972) (federal river rechanneling
project); NRDC v. Morton, supra (federal offshore oil and gas lease
sale); Save the Niobara River Ass'n, Inc. v. Andrus, 483 F. Supp. 844
(D. Neb. 1977) (federal dam and reservoir project); Libby Rod and Gun
Club v. Poteat, 457 F. Supp. 1177 (D. Montana 1978), aff'd in part and
rev'd in part on other grounds, 594 F.2d 742 (9th Cir. 1979) (federal
dam and reservoir project); Montgomery v. Ellis, 364 F. Supp. 517 (N.
D. Ala. 1973) (federal river channelization project).
/21/ Nevertheless, because an agency need not consider alternatives
of speculative feasibility, alternatives which could only be
implemented after significant changes in governmental policy or
legislation, or which require similar alterations of existing
restrictions, are not regarded as reasonable alternatives. See City of
New York v. United States Department of Transportation, supra, 715 F.2d
at 743.
J. V. PETERS & CO., et al., Plaintiffs-Appellants v. WILLIAM
RUCKELSHAUS, et al., Defendants-Appellees
No. 84-3229
IN THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF OHIO
BRIEF FOR WILLIAM RUCKELSHAUS, ET AL., APPELLEES
OPINION BELOW
The judgment and memorandum opinion and order of the district court
(Honorable Thomas P. Lambros) are set forth at Appendix ("App.")
196-206 and the opinion is reported at 584 F. Supp. 1005 (N.D. Ohio
1984).
JURISDICTION
Appellants, J.V. Peters & Co., et al., /1/ invoked district court
jurisdiction under 28 U.S.C. 1331(b), 28 U.S.C. /2/ 1343(4), and 28 U.
S.C. 2201. Judgment for EPA was entered February 17, 1984 (App. 196).
J.V. Peters filed its notice of appeal on March 14, 1984 (see App. 2),
within the 60-day period specified in Fed. R. App. P. 4(a)(1). This
Court's jurisdiction rests on 28 U.S.C. 1291.
STATEMENT
Statutory scheme. -- This case involves the interpretation of the
provisions of CERCLA, 42 U.S.C. 9601 et seq. Passed in 1980, CERCLA
was Congress' response to problems caused by the improper disposal of
hazardous chemicals. CERCLA enables EPA to clean up environmental
pollution problems resulting from "hazardous substances." Such
substances include a variety of toxic chemicals regulated under other
environmental statutes including hazardous wastes covered by the
Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6921-6934, and
hazardous substances under the Clean Water Act, 33 U.S.C. 1321(b) (2)(
A). See CERCLA, Section 101(14), 42 U.S.C. 9606(14).
Section 104 of CERCLA, 42 U.S.C. 9604, authorizes EPA to respond to
any release or threatened release of a "hazardous substance," enabling
EPA to clean up a hazardous waste site. Section 104 cleanups may
involve "removal" of immediate threats or "remedial" measures designed
to effect a permanent remedy. 42 U.S.C. 9604(a)(1) and (c). Such
cleanups are initially financed through a fund created by Section 221(
a), 42 U.S.C. 9631 (the "Superfund"). EPA, however, may recover funds
expended under Section 104 by filing a cost-recovery action against the
"responsible parties" designated in Section 107, 42 U.S.C. 9607. Such
parties include owners and operators of hazardous waste sites and
generators and transporters of hazardous substances.
As an alternative to an EPA cleanup under Section 104, Section 106,
42 U.S.C. 9606, authorizes EPA to issue administrative orders or to
seek court orders requiring one or more responsible parties to conduct
cleanup activities.
ISSUES PRESENTED
1. Whether the district court lacked subject matter jurisdiction
over J.V. Peters' complaint because:
a. the company lacked standing to challenge EPA's actions due to
an absence of sufficient injury-in-fact; b. the issues raised by
J.V. Peters lacked ripeness; c. there was no final agency
action.
2. Whether the district court properly determined that EPA's
response actions, taken pursuant to Section 104 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. 9604, are not reviewable prior to the initiation
of a cost-recovery action under Section 107 of CERCLA, 42 U.S.C. 9607.
a. Whether the jurisdictional statutes cited by J.V. Peters --
28 U.S.C. 1343(4), 28 U.S.C. 2201, and 28 U.S.C. 1331 --
authorize judicial review of EPA's response activities at this
time.
b. Whether CERCLA itself authorizes judicial review of
response actions at this juncture.
3. Whether the absence of judicial review prior to initiation of a
cost-recovery action comports with due process requirements.
STATEMENT OF THE CASE
B. Facts of this case. -- This case arises from EPA's cleanup of a
toxic chemical storage site owned and operated by J.V. Peters & Co.,
Inc. The company purchased waste products from hazardous waste
generators and stored the toxic chemicals in drums and tanks for later
resale. The J.V. Peters' facility is located in Middlefield Township,
in Geauga County, Ohio, northeast of Cleveland (see map and site sketch
in Supp. App. Vol. I at 1-2). The site is near the Northeast
Middlefield School and children walk by the site on their way to school
(App. 176; Supp. App. Vol. I at 1). Cattle graze near drums on the
east side of the site (Supp. App. Vol. I at 54) and corn is grown
immediately to the west of the property line (ibid.). A predecessor
company, J.V. Peters & Co. (a partnership), began the business in June
l980 without first obtaining state permits necessary for operation
(Supp. App. Vol. I at 5, 7). /3/ J.V. Peters does not dispute that the
site contained toxic chemicals which are considered hazardous
substances under CERCLA (App. 103).
EPA became aware of problems on the site when the Ohio Environmental
Protection Agency contacted EPA in July 1983. The state agency had
inspected the site in December 1980 and had found 14 deficiencies in
the company's compliance with hazardous waste management regulations
(Supp. App. Vol. I at 3-4). These deficiencies included lack of a
barrier around the facility, lack of 24-hour surveillance, insufficient
fire control equipment, lack of emergency plans, lack of operating and
personnel training records, and location of ignitable wastes within 50
feet of the property line (ibid.). Moreover, this company also lacked
the permits necessary to operate a hazardous waste facility (Supp. App.
Vol. I at 5). Ohio sued J.V. Peters, and in December 1982 the state
court: (1) enjoined operation of the site until the necessary state
permits were obtained; (2) ordered state-supervised removal and
disposal of the stored wastes; and (3) imposed civil penalties of
$15,000 (Supp. App. Vol. I at 8-9). /4/ In February 1983, the state
court amended its order to include a detailed waste-removal schedule
(Supp. App. Vol. I at 32-39). In April 1983, the state court permitted
some generators to remove some of the wastes (Supp. App. Vol. I at
40-41).
Dissatisfied with the company's lack of progress in cleaning up the
site, the Ohio agency, in July 1983, requested EPA to consider a
removal action under CERCLA (Supp. App. Vol. I at 49). EPA's Joseph
Fredle, onscene coordinator for the site, reviewed the State's records
and visited the facility to conduct an inspection. When Fredle
inspected the site, he noted that the facility was unsecured (Supp.
App. Vol. I at 50). Some 800 drums (App. 135) were stacked outside the
building and many of them showed signs of leakage (Supp. App. Vol. I at
50; see site photos Supp. App. Vol. II). Other drums were in various
stages of deterioration due to corrosion and weathering (ibid.).
Fredle performed several tests on the vapors eminating from the
storage tanks (Supp. App. Vol. I at 50). The presence of acetone,
ketones, toluene, benzene and hydrocarbons was confirmed (ibid.).
Benzene and toluene are hazardous substances under both Section 311 of
the Clean Water Act, 33 U.S.C. 1321 (b)(2)(A), see 40 C.F.R. 116.4,
Table A, and CERCLA, 42 U.S.C. 9601(14). Acetone and ketones are
highly flammable and are hazardous wastes under the Resource
Conservation and Recovery Act (RCRA), 42 U.S.C. 6921-6934, see 40 C.F.
R. 261.33f, and hazardous substances under CERCLA. Because the toxic
chemicals stored on the site were flammable or carcinogenic, or both,
Fredle determined that the site posed an immediate and significant risk
to people living in the area through contamination of air, soil and
water and through the risk of explosion. Moreover, the coming winter
promised more weathering of the exposed and already-weakened drums.
Later that month, Fredle wrote to J.V. Peters and to waste
generators whose products were stored on the site and informed them
that EPA intended to spend public funds to clean up the site unless
other parties did so (Supp. App. Vol. I at 42-43). Several generators
agreed to remove drums of their wastes (Supp. App. Vol. I at 52). J.V.
Peters responded in a September 24, 1983, letter, accusing EPA of "raw
harrassment" (Supp. App. Vol. I at 44-45). On October 3, 1983, Fredle
met with representatives of J.V. Peters and waste generators (Supp.
App. Vol. I at 5l). On October 7, 1983, David Shillman, President of
J.V. Peters, called Fredle to discuss the company's proposed plan to
remove some of the drums and to store solid residue from other drums on
the site (Supp. App. Vol. I at 51-52). The proposal did not address
the contents of the storage tanks or treatment of contaminated soil
(id. at 52).
Fredle responded by a letter dated October 13, 1983 (Supp. App. Vol.
I at 46-48). In this letter, Fredle told Shillman that his proposal
was insufficient to abate the problems with the site. Fredle set forth
a specific plan calling for unstacking double tiers of drums by October
20, taking samples from the two storage tanks by October 26 and having
them analyzed by November 2, collecting and consolidating compatible
liquid and solid wastes and disposing of all material by November 13,
1983 (Supp. App. Vol. I at 46-48). The letter advised the company
that the schedule should be adhered to in order to avoid the delays and
cost increases caused by winter weather (Supp. App. Vol. I at 47).
Fredle also cautioned that unless the company begin the cleanup
promptly, EPA itself would undertake response actions (ibid.).
In an October 17 conversation, Shillman complained that the
timetable was too short (Supp. App. Vol. I at 52). On October 19,
while Fredle observed the removal of some wastes by generators,
Shillman told Fredle that he did not have the financial ability to
perform the chemical sampling and analysis (ibid.). Based on this
remark and on Shillman's failure to produce a timely and effective
cleanup plan, Fredle sought authorization to use public funds under
Section 104 of CERCLA to clean up the toxic waste site (id. at 52-53).
The Regional Administrator approved funding on October 31, 1983 (Supp.
App. Vol. I at 52-53). J.V. Peters took no action to clean up the
site.
In late October 1983, EPA hired a contractor to clean up the site.
The company filed this suit on October 31, 1983 (App. 250), seeking an
order enjoining the expenditure of funds by EPA and a declaratory
judgment that EPA had violated J.V. Peters' due process rights. On
November 10, 1983, EPA filed a motion to dismiss, alleging lack of
subject-matter jurisdiction under Fed. R. Civ. P. 12(b)(1), and failure
to state a claim upon which relief can be granted under Fed. R. Civ. P.
12(b)(6) or in the alternative, for summary judgment (App. 129)
(selected attachments to the motion appear in Supp. App.).
The court held a hearing on November 18, 1983 (App. 3) and explored
settlement possibilities. After determining that no settlement would
be reached (App. 98, 122-124), the court ruled from the bench, granting
EPA's motion to dismiss (App. 98). Following the district court's
decision, EPA undertook response actions to clean up the site and to
abate the danger to the public. In February, the court issued a
written opinion (App. 197), ruling that J.V. Peters' complaint failed
to state a claim upon which relief can be granted (App. 202-204). The
court also rejected the company's assertion that EPA's actions
contravened due process requirements. This appeal followed.
SUMMARY OF ARGUMENT
The district court lacked subject-matter jurisdiction over the
company's complaint because J.V. Peters lacked standing to challenge
EPA's actions, because the issues raised in this case were not ripe and
because there had been no final agency action. Thus, the district
court should have dismissed the complaint under Fed. R. Civ. P. 12(b)
(1).
Moreover, even if the district court had subject-matter
jurisdiction, the action was properly dismissed for failure to state a
claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6).
Neither the statutes cited by the company nor CERCLA itself authorizes
review of EPA's actions prior to initiation of a cost-recovery suit.
CERCLA was designed specifically to allow EPA to use federal funds to
clean up hazardous waste sites without the need for prior,
time-consuming litigation to fix ultimate liability. Allowing suits
such as this would produce precisely the result Congress wanted to
avoid -- leaving the public at immediate risk while liability issues
are fought out in court.
Finally, the district court correctly determined that the absence of
judicial review prior to a cost-recovery action comports fully with due
process requirements.
ARGUMENT
I
THE DISTRICT COURT LACKED JURISDICTION
In our motion to dismiss, we asserted that the district court lacked
subject-matter jurisdiction. Three factors independently contributed
to this lack of subject-matter jurisdiction. /6/ First, J. V. Peters
lacked standing to challenge EPA's actions. /7/ Second, the issues
raised by Peters were not ripe. Finally, there had been no final
agency action.
A. J.V. Peters lacked standing to challenge EPA's actions due to an
absence of sufficient injury-in-fact. -- Federal court jurisdiction is
limited by Article III to "cases" and "controversies." Allen v.
Wright, U.S. , 52 U.S.L.W. 5110 (1948); Flast v. Cohen, 392 U.
S. 83, 94-95 (1968). This "bed-rock requirement," Valley Forge
Christian College v. Americans United for Separation of Church and
State, 454 U.S. 464, 471 (1982), is not met unless a party has standing
to bring suit against a federal agency. Jet Courier Service v. Federal
Reserve Board, 713 F.2d 1221, 1224 and n.2 (6th Cir. 1983).
To have standing, a party must allege sufficient injury-in-fact.
Warth v. Seldin, 422 U.S. 490, 501 (1975). "The injury alleged must
be, for example, 'distinct and palpable,' * * * and not 'abstract' or
'conjectural' or 'hypothetical.'" Allen v. Wright, supra, 52 U.S.L.W.
at 5114. Accord Gladstone, Realtors v. Village Village of Bellwood,
441 U.S. 91, 100 (1979); Warth v. Seldin, supra, 422 U.S. at 501;
O'Shea v. Littleton, 414 U.S. 488, 497 (1974). As the Supreme Court
explained in California Bankers Association v. Schultz, 416 U.S. 21, 69
(1974):
Abstract injury is not enough. It must be alleged that the
plaintiff "has sustained or is immediately in danger of
sustaining some direct injury" as the result of the challenged
statute or official conduct." Massachusets v. Mellon, 262 U.S.
447, 488 (1923). The injury or threat of injury must be both
"real and immediate," not "conjectural" or "hypothetical."
(Citations omitted.) Thus, the case law has distilled two elements --
immediacy and concreteness -- which must exist before a party has
alleged sufficient injury-in-fact to have standing. Both elements are
missing here.
The district court incorrectly found sufficient injuryin-fact based
on J.V. Peters' potential liability for cleanup costs if and when EPA,
in the future, initiates a cost-recovery action under Section 107 of
CERCLA. This potential liability lacks both immediacy and
concreteness. Contrary to the company's assertions (Br. 19), liability
does not flow unalterably from EPA's decision to spend money to clean
up a site. Expenditure of fund monies does not make J.V. Peters a
responsible party, nor does it create liability. There is no
immediacy, since any determination of liability must await the
initiation and conclusion of a separate cost-recovery action filed
under Section 107. J.V. Peters will have ample opportunity to raise
the issues it presses here in a Section 107 suit. Moreover, J. V.
Peters is not being forced to take any immediate action whatsoever.
Unlike an order issued under Section 106, EPA's response actions under
Section 104 do not require J.V. Peters to conduct the cleanup or to
take any other action.
The company's assertion of injury also lacks concreteness. There is
no direct, tangible injury here. J.V. Peters is not being forced to
take any action whatsoever. Any potential liablity has not jelled
sufficiently to create a perceptible impact. No actual injury has
occurred. The instant case differs drastically from the situation
presented in McCoy-Elkhorn Coal Corp. v. EPA, 622 F.2d 260 (6th Cir.
1980). There, the Court found injury-in-fact because threatened
application of EPA's regulations caused a breakdown in on-going
negotiations between a coal company and a prospective coal purchaser.
Nothing comparable has happened here.
Because there was no immediacy or concreteness to J.V. Peters'
alleged injury-in-fact, the company lacked standing to challenge EPA's
response activities. Therefore, the district court lacked
subject-matter jurisdiction and should have granted EPA's motion to
dismiss.
B. The issues raised by J.V. Peters were not ripe for review. --
Like standing, ripeness is a jurisdictional prerequisite, a facet of
justiciability which is part of the Article III "case" or "controversy"
requirement. Abbott Laboratories v. Gardner, 387 U.S. 136, 148 (1967);
Dresser Industries, Inc. v. United States, 596 F.2d 1231 (5th Cir.
1979), cert. denied, 444 U.S. 1044 (1980). In determining ripeness,
courts evaluate two factors: the fitness of the issues for review and
the hardship to the parties of withholding consideration.
Under these principles, the issues raised by J.V. Peters were not
ripe for review. The issues were not fit for review by the district
court because they involved factual, rather than strictly legal
determinations. A.O. Smith Corp. v. FTC, 530 F.2d 515, 521 (3d Cir.
1976). Compare McCoy- Elkhorn Coal Corp. v. EPA, supra, 622 F.2d at
264 (case ripe where company raised facial attack on constitutionality
of statute and presented purely legal question; court would "never be
in a better position to decide the issues"). In the instant case, J.V.
Peters has raised (Br. 9-16) a host of factual arguments as to why
EPA's response actions were unwarranted. Resolution of these factual
disputes by the district court would have been premature, since EPA
itself had not concluded its review of the situation and had not
determined whether to initiate a cost-recovery action against the
company or any other responsible parties. There will be ample
opportunity for factual determinations if and when a Section 107
cost-recovery action is pursued. Moreover, another facet of fitness
for review -- finality of action -- is also missing here, as discussed
further, infra, at 15-18. Dresser Industries, Inc. v. United States,
supra, 596 F.2d at 1235.
The second aspect of ripeness -- hardship to the parties -- also
cautions against review here. The test for this aspect of ripeness is
whether in the absence of judicial intervention the party will suffer
direct and immediate harm. Abbott Laboratories v. Gardner, supra, 327
U.S. at 152. There has been no such harm here. J.V. Peters has not
been required to take any action or to spend any money. The company is
not subject to any sanctions at this time. See Wearly v. FTC, 616 F.2d
662 (3d Cir. 1980) (case not ripe where plaintiff was free to await
subsequent agency action and at that time could raise its objections);
Bethlehem Steel Corp. v. EPA, 536 F.2d 156 (7th Cir. 1976) (issue not
ripe where EPA action carried no immediate compliance sanctions). There
is no hardship to J.V. Peters if the statutory scheme is followed and
liability is determined in the context of a Section 107 cost-recovery
action. If, as the company asserts, EPA's actions were in whole or in
part inconsistent with the National Contingency Plan ("NCP"), recovery
of costs against J.V. Peters will be jeopardized. There is no reason
why Peters should be permitted to invoke the judicial process now to
resolve its apprehensions of potential liability and thereby delay a
necessary cleanup.
On the other hand, EPA and the public will suffer a great hardship
if CERCLA's scheme is circumvented. Congress' mandate for speedy
removal of toxic chemical and hazardous wastes from dangerous sites
will be thwarted if companies can clog up the process by obtaining
injunctions while seeking premature judicial determination of their
liability under Section 107. If potentially liable parties are
permitted to enjoin response actions under Section 104, seeking
declaration of their liability, EPA's cleanup activities would grind to
a halt and the danger to the public posed by the waste site would
continue unabated. As discussed infra in Section II of this brief,
CERCLA was enacted so that EPA could use the Superfund to clean up
hazardous waste sites which imperil the public before determining the
liability. In evaluating hardship to the parties, the frustration of
Congress' statutory scheme outweighs the inconvenience to impatient
parties. The issues raised by J.V. Peters were not ripe for review
and, therefore, the district court should have granted our motion to
dismiss for lack of subject-matter jurisdiction.
C. There has been no final EPA action. -- Decisions of federal
administrative agencies must be final before judicial review is
authorized under the Administrative Procedure Act (APA). 5 U.S.C. 704
provides:
Agency action made reviewable by statute and final agency action
for which there is no other adequate remedy in a court are
subject to judicial review. * * *
As discussed infra at Section II, EPA's response actions are not made
reviewable by statute. Thus, the APA's requirement of finality applies
here. The Supreme Court has set forth three criteria to determine
whether an agency action is final. FTC v. Standard Oil Co., 449 U.S.
232 (1980). In that case, the Court held that the FTC's issuance of an
administrative complaint charging unfair trade practices was not final
agency action and, hence, was not reviewable, because the validity of
the charges was subject to further agency proceedings and to subsequent
judicial review. The three criteria considered by the Court were:
(1) is the agency's action definitive, or are there still further
agency proceedings that may narrow the areas of dispute or even
moot the entire controversy? (2) does the agency action have
either legal force or great practical impact on the party seeking
judicial review? (3) would immediate judicial review serve
either efficiency or enforcement of the regulatory scheme?
Under these criteria, there has been no final EPA action which warrants
judicial review at this juncture. As to the first factor, EPA had not
made any definitive decision on liability, and had not filed a
cost-recovery action under Section 107. In addition, when the company
filed suit seeking judicial review of EPA's actions, the agency lacked
the information necessary to determine whether further work would be
needed and expected to conduct further analysis. Clearly there existed
further agency proceedings which may have narrowed or mooted the
controversy. EPA's response activities are similar to the FDA's
seizure of misbranded drugs pursuant to 21 U.S.C. 334(a), an issue
found nonreviewable in Ewing v. Mytinger & Casselberry, 339 U.S. 594,
600-602 (1950). The Court in Ewing ruled that the FDA's finding of
misbranding was merely a statutory prerequisite to the filing of a
lawsuit and that the disputed issues could be aired later. The Court
concluded that by permitting review of the agency's seizure of the drug
"(w)e would impair or destroy the effectiveness of the multiple seizure
device if we sanctioned the interference which a grant of jurisdiction
to the district court would entail." 339 U.S. at 601-602. This Court
applied Ewing in Parke, Davis & Co. v. Califano, 564 F.2d 1200 (6th
Cir. 1977), cert. denied, 435 U.S. 942 (1978), where it held that the
district court lacked authorization to review the FDA's non-final
decision to initiate an enforcement action. This Court noted that
further proceedings would take place where the issues raised could be
fully aired. /8/
On the second criterion, EPA's response action had no legal or great
practical impact on the company sufficient to render its action final.
Legally, the cleanup did not impact J.V. Peters since it required them
to take no action at all. The legal implications of the agency's
cleanup will occur only if and when a cost-recovery suit is filed. When
that happens, J.V. Peters will have its day in court. Indeed, judicial
involvement at that time is necessary in order for EPA to recover under
Section 107. effect on J.V. Peters. Because the company lacked the
necessary permits, it could not operate the site, regardless of EPA's
actions. In fact, the state court, by order dated December 9, 1982,
enjoined operation of the site until the permits were obtained. /9/ To
date the company still has not obtained them. Moreover, if, as J.V.
Peters claims (Br. 6), it was willing to clean up the site, EPA's
cleanup had no practical effect. /10/ Any effect will be felt only
when a cost-recovery action is filed.
As to the third factor, it is clear that judicial review at this
juncture will serve neither efficiency nor enforcement of the
regulatory scheme. There will be no efficiency savings if the court
determined the validity of EPA's actions on the present record. Such a
determination may be made just as effectively in a cost-recovery
action. On the other other hand, premature judicial interference will
"impair or destroy the effectiveness" of CERCLA by forcing EPA to
litigate liability before undertaking a cleanup. Ewing, supra, 339 U.
S. at 601-602.
Because there was no final agency action, the district court lacked
subject-matter jurisdiction and J.V. Peters' complaint should have been
dismissed on that basis.
II
THE DISTRICT COURT PROPERLY DETERMINED THAT EPA'S RESPONSE
ACTIONS WERE NOT REVIEWABLE PRIOR TO INITIATION OF A
COST-RECOVERY SUIT
Assuming, arguendo, that the district court did have subject-matter
jurisdiction to hear J.V. Peters' challenge to EPA's actions, the court
properly determined that the cleanup actions were not properly
reviewable at this juncture and correctly dismissed the company's
complaint under Fed. R. Civ. P. 12(b)(6) for failure to state a claim
upon which relief can be granted.
A. None of the jurisdictional statutes cited by J.V. Peters -- 28 U.
S.C. 1343(4), 28 U.S.C. 2201 and 28 U.S.C. 1331(b) -- authorized
judicial review of EPA's response activities. -- One of the statutes
cited by the company plainly lacks application to this case. 28 U.S.C.
1343(4) confers upon district courts jurisdiction to hear cases:
To recover damages or to secure equitable or other relief under
any Act of Congress providing for the protection of civil rights,
including the right to vote.
J.V. Peters has alleged no violation of its civil rights so as to fall
under this statute. Jewell v. City of Covington, 425 F.2d 459, 460
(5th Cir.), cert. denied, 400 U.S. 929 (1970) (statute confers
jurisdiction only where plaintiff alleges violation of a constitutional
provision or act of Congress providing for equal rights of citizens).
Moreover, 28 U.S.C. 1343 is merely jurisdictional and does not of
itself supply a cause of action. Jewell v. City of Covington, supra,
425 F.2d at 460. Accord American Science & Engineering, Inc. v.
Califano, 571 F.2d 58, 63 n.8 (1st Cir. 1978) ("as with Section 1331,
that jurisdictional provision 28 U.S.C. 1343 only comes into play where
a cause of action exists").
The other two statutes also fail to give J.V. Peters a cause of
action. Several courts, including this Court, have held that the
Declaratory Judgment Act, 28 U.S.C. 2201, /11/ does not supply a
plaintiff with a cause of action. E.g., City of Saginaw v. Service
Employees International Union, Local 446-M, 720 F.2d 459, 460 (6th Cir.
1983). Rather, a party must rely on an independent law which
authorizes commencement of the action. Ream v. Handley, 359 F.2d 728,
731-732 (7th Cir. 1966). See also Skelly Oil Co. v. Phillips Co., 339
U.S. 667, 671 (1950); First Federal Savings & Loan Association v.
Brown, 707 F.2d 1217, 1220 (11th Cir. 1983). The Declaratory Judgment
Act merely creates a new remedy. Prior to its passage, a party had to
seek damages or an injunction in order to press a claim in federal
court. Skelly Oil, supra, 339 U.S. at 671-674. But the Act addressed
procedure only and did not alter jurisdiction, i.e., the kinds of
issues which give the right of entrance to federal court. Ibid.
The company's last cited statute -- 28 U.S.C. 1331 -- also does not
authorize review of EPA's response actions. That statute merely
provides that: "The district courts shall have original jurisdiction
of all civil actions arising under the Constitution, laws, or treaties
of the United States." Although the statute provides jurisdiction, the
court must look to the Constitution or other laws relied upon to
determine whether the complaint states a claim upon which relief can be
granted. In Bell v. Hood, 327 U.S. 678 (1946), the Court held that
lack of jurisdiction is a question separate from failure to state a
claim or a cause of action. Even if a court has jurisdiction, a case
must be dismissed if no cause of action exists. Id. at 682. See Bulk
Distribution Center, Inc. v. Monsanto, No. 83-6805 (S.D. Fla. June 19,
1984), slip op. at n.1 (Supp. App. 86) ("Bulk also alleges that the
Federal Question Statute, 28 U.S.C. 1331 (West Supp. 1983) confers
jurisdiction on this Court to consider the case. The federal question
posed by Bulk's complaint is dependent upon its ability to avail itself
of rights under either CERCLA or the Clean Water Act. Because Bulk can
do neither, its reliance on Section 1331 is of no consequence"). To
determine whether the company stated a cause of action, the provisions
of CERCLA must be examined.
B. CERCLA does not authorize review of EPA's response actions prior
to initiation of a cost-recovery action. -- The district court
determined that the company failed to state a claim upon which relief
could be granted and dismissed the complaint pursuant to Fed. R. Civ.
P. 12(b)(6) (App. 202-204). Although the court focused on the
complaint's lack of factual specificity, J.V. Peters' complaint was
legally insufficient to state a cognizable claim because CERCLA simply
does not authorize judicial review at this juncture under any set of
facts. Therefore, the judgment below, dismissing the complaint for
failure to state a claim should be affirmed.
A review of the provisions of CERCLA will demonstrate that Congress
never intended to authorize judicial review of EPA's response actions
prior to initiation of a cost-recovery action. /12/ Congress enacted
CERCLA in 1980 in response to growing concern about the severe
environmental and public health effects caused by improper handling and
disposal of hazardous wastes and toxic chemicals. An earlier statute,
the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.
69216934, had given EPA regulatory authority over hazardous waste
disposal sites. It soon became apparent, however, that RCRA and other
environmental statutes did not provide adequate means for the quick
response necessary to protect the public. While EPA had authority to
sue to force parties to clean up hazardous sites, it lacked both clear
legal authority and the funds to itself clean up sites in immediate
response to serious hazards caused by toxic sites. CERCLA was designed
to address these problems. In passing CERCLA, Congress gave EPA both
the authority, 42 U.S.C. 9604, and the funding, 42 U.S.C. 9631,
necessary to take immediate cleanup actions, without the need to await
judicial determinations of liability or to compel private parties to
act.
Four major elements comprise the CERCLA program. First, Section 104
authorizes EPA itself to clean up a site when there exists an actual or
threatened release of a hazardous substance 42 U.S.C. 9604. /13/
Section 104 permits EPA to act quickly to clean up the site because, as
the Senate Committee recognized:
(D)elay will often exacerbate an already serious situation * * *.
This standard is intended to be a flexible one and holds that it
is preferable to err on the side of protecting public health,
welfare and the environment in administering the response
authority of the fund.
S. Rep. 96-848 at 56; reprinted in a Legislative History of the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, Vol. I at 363 (hereinafter "Leg. Hist."). /14/ EPA takes
response actions under Section 104 unless it determines that a
responsible party will properly perform the needed cleanup.
The second aspect of the CERCLA program, Section 221(a), 42 U.S.C.
9631, established the Hazardous Substance Response Trust Fund
(Superfund) to finance response actions authorized under Section 104.
The availability of this fund permits EPA to finance cleanups and begin
response actions expeditiously, without waiting for an adjudication of
financial liability. Closely related to the establishment of the fund
is the third part of the CERCLA program, the provision in Section 107
which allows EPA to file suit to recover response costs from
responsible parties after cleanup costs are incurred. 42 U.S.C. 9607.
Among potentially responsible parties are present and prior owners and
operators of the site, as well as generators and transporters of
hazardous substances.
Contrary to J.V. Peters' assertion (Br. 14, 19), the cost-recovery
proceeding is separate from the cleanup. Under Section 107, EPA must
file suit to recover response costs incurred pursuant to a Section 104
cleanup. EPA may recover such costs unless they are inconsistent with
the National Contingency Plan (NCP) set forth in 40 C.F.R. Part 300.
The NCP provides the regulatory framework for implementing Section 104.
It sets forth the criteria for investigating sites and conducting
cleanups. Thus, when EPA files an action to recover cleanup costs, the
defendant may contest whether EPA acted inconsistently with the NCP. J.
V. Peters will be able to assert such a claim, as well as contest
liability, if EPA sues the company under Section 107. The possiblity
of failing to recoup expenditures in a cost-recovery action operates as
an effective constraint upon EPA's decision to itself undertake a
cleanup under Section 104, especially in light of the limited resources
in the fund.
The final component of CERCLA, not at issue in this case, is EPA's
authority under Section 106, 42 U.S.C. 9606. That section permits EPA,
independent of fund-financed response actions, to issue administrative
orders or to institute court actions to force responsible parties to
clean up hazardous substances which may pose an "imminent and
substantial endangerment" to the public. The crucial difference
between Sections 104 and 106 is that under Section 104 EPA may itself
undertake a cleanup, whereas under Section 106, EPA, through
administrative or court orders, seeks to force the responsible party to
clean up.
Looking at the statutory scheme of CERCLA, one can discern that
Congress did not intend to provide for judicial review of EPA's
response actions prior to initiation of a cost-recovery action. /15/
See Block v. Community Nutrition Institute, U.S. , 104 S.Ct.
2450, 2454 (1948) (In determining whether Congress created a cause of
action, courts should look to the language of the statute, the
structure of the statutory scheme, its objectives, its legislative
history, and the nature of the administrative action involved). What
Peters sought in its complaint was no less than a determination of its
liability prior to EPA's cleanup of the site. The company wanted an
evidentiary hearing and sought to place on EPA the burden of proving to
the court that there was an actual or threatened release of a hazardous
substance and that the company's plan for removal was insufficient (Br.
13), all in an effort to limit its potential liability under Section
107. /16/ As seen previously, however, CERCLA does not force EPA to
litigate liability before it can remove the danger to the public.
Before CERCLA, EPA generally had to sue parties to force them to take
action. After CERCLA, EPA itself can remedy the hazard first and later,
in a separate action under Section 107, can seek to recover costs from
responsible parties. /17/
In this case, J.V. Peters can raise any legitimate objections in a
subsequent Section 107 suit by EPA, if one is filed. If EPA in fact
acted inconsistently with the NCP, its ability to recover from J.V.
Peters and from any other responsible parties will be diminished. Such
a possibility itself works as a deterrent to rash and arbitrary actions
by the agency. J.V. Peters has put forth no reason why the court
should have ignored the provisions of the CERCLA and determined
liability before EPA could begin its cleanup. Because J.V. Peters, in
essence, sought a premature determination of its liability before the
cleanup commenced, its complaint failed to state a claim upon which
relief could be granted. Therefore, the district court's judgment
dismissing the company's complaint should be affirmed.
III
THE ABSENCE OF JUDICIAL REVIEW PRIOR TO A COST-RECOVERY
ACTION COMPORTS FULLY WITH DUE PROCESS REQUIREMENTS
The district court correctly determined that due process does not
require judicial intervention at this stage of the proceedings (App.
204-206). J.V. Peters challenges that finding on appeal (Br. 16-22).
As the company notes in its brief:
The fundamental requirement of due process is the opportunity to
be heard "at a meaningful time and in a meaningful manner."
Mathews v. Eldridge, 424 U.S. 319, 333 (1976), quoting Armstrong v.
Manzo, 380 U.S. 545, 552 (1965). Under CERCLA, the meaningful time for
a hearing on the issue of liability is after EPA files a cost-recovery
action, not before or during the agency's cleanup of the site. The
Supreme Court in Mathews v. Eldridge, supra, set forth a three-prong
due process analysis:
(T)he specific dictates of due process generally require
consideration of three distinct factors: first, the private
interest that will be affected by the official action; second,
the risk of an erroneous deprivation of such interest through the
procedures used, and the probable value, if any, of additional or
substitute procedural safeguards; and finally, the Government's
interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute
procedural requirements would entail.
424 U.S. at 335. An analysis of these three factors supports the
district court's decision.
The court correctly determined that the private interest here is
insignificant. The private interest here is only J.V. Peters' interest
in ascertaining now its liability for cleanup costs. Since this will
be fully litigated in any subsequent cost-recovery action, the private
interest at stake is of minimal importance.
The second factor -- risk of erroneous deprivation and probable
value of additional or substitute procedural safeguards -- is also
slight. As the district court pointed out (App. 205), J.V Peters has
not yet been deprived of anything. No deprivation will occur until a
court in a separate proceeding determines liability under Section 107.
Furthermore, two factors present in this case minimize the risk of
erroneous deprivation. First, EPA has great incentive to determine
carefully which sites it will clean up by using the fund. If EPA does
not comply with the NCP in choosing the sites and in performing the
cleanup, the agency's ability to recover the cleanup costs under
Section 107 is jeopardized. This factor, along with the limited
resources of the fund, reduces the risk of an error on the agency's
part.
J.V. Peters argues (Br. 20-21) that the provisions of the NCP are
insufficient to reduce the risk of erroneous deprivation, because the
NCP "presumes that there is a problem and specifies how the Government
should go about solving it. It does not address whether there is a
problem" (Br. 21). This reading of the NCP is incorrect. The Plan
does specify when a problem dump calls for immediate removal action. 40
C.F.R. 300.65 provides that immediate removal is appropriate where such
action will "prevent or mitigate immediate and significant risk of harm
to human life or health or to the environment * * *." /18/ Thus, the
NCP not only addresses how the government should solve a problem, but
also whether a given situation constitutes an actionable "problem."
Furthermore, the protracted history of negotiation between J.V.
Peters and the State of Ohio and, later, EPA, minimized the risk of
erroneous deprivation. /19/ In September and October 1983, Shillman of
J.V. Peters and Fredle of EPA discussed cleanup of the site. Fredle
had inspected the unsecured site and had seen leaking and deteriorating
drums stored in the open (Supp. App. Vol. I at 50; see photos in Supp.
App. Vol. II). Tests detected the presence of hazardous substances
(toluene and benzene) as well as highly flammable acetone and ketones
(Supp. App. Vol. at 50).
Fredle wrote a letter to J.V. Peters and others in September,
telling them of EPA's intention to clean up the site with Superfund
money (Supp. App. Vol. I at 42-43). J.V. Peters' response did not
contain an offer to clean up, but merely accused EPA of "raw
harrassment" (Supp. App. Vol. I at 44-45). /20/ In an October 7, 1983
phone call to Fredle, Shillman proposed to remove some drums and to
consolidate and continue to store others "with future disposal
uncertain" (Supp. App. Vol. I at 46). /21/ This plan did not address
the contents of the storage tanks or the treatment of contaminated
soil. Fredle responded by letter dated October 13, 1983, setting forth
specific actions to be taken by specific dates (Supp. App. Vol. I at
4648). The letter noted that the rapidly approaching onset of winter
mandated speedy action. /22/ In view of Shillman's failure to offer a
timely, concrete, and technically adequate proposal to EPA and in light
of Shillman's statement that he could not afford to perform the
cleanup, Fredle sought and received authorization to use Superfund
money (Supp. App. Vol. I at 52-53). to discuss the matter with the
agency, to present its point of view and to propose a voluntary cleanup
plan. This process reduced any risk of erronous deprivation. /24/
Moreover, there are no alternative procedures which would provide
safeguards without hampering implementation of CERCLA. The alternative
proposed by J.V. Peters -- a full-blown evidentiary hearing prior to
the cleanup -- would eviscerate the CERCLA provisions authorizing
immediate response actions "(w)henever (A) any hazardous substance is
released or there is a substantial threat of such release into the
environment * * *." 42 U.S.C. 9604(a)(1). EPA would be forced to spend
its time litigating liability rather than mitigating the hazard posed
to human health and welfare by toxic chemical dumps. As discussed in
Section II of this brief, CERCLA does not tolerate such delay. Nothing
in the Due Process Clause requires it.
The district court also correctly determined that the third Mathews
v. Eldridge factor -- the governmental interest -- also supports its
decision that no judicial review was required at this juncture. As the
court pointed out (App. 205), the government's interest here is quite
substantial. Clearly, the EPA's interest in prompt response to
environmental hazards -- the very purpose for which CERCLA was enacted
-- would be seriously impaired if dump owners could create further
delay in cleanup through premature resort to the courts. When EPA's
paramount interest in protecting the public is weighed against the
rather paltry private interest in adjudicating liability now, as
opposed to later in a subsequent cost-recovery action, the government's
interest should prevail.
Moreover, the Supreme Court often has recognized that summary
administrative action is justified in situations involving immediate
threats. As the Court wrote in Hodel v. Virginia Surface Mining &
Reclamation Association, 452 U.S. 264 (1980):
Protection of the health and safety of the public is a paramount
governmental interest which justifies summary administrative
action.
Id. at 300. In Hodel, the Supreme Court upheld against preenforcement
challenge the right of the Secretary of the Interior, pursuant to the
Surface Mining Control and Reclamation Act (SMCRA), 30 U.S.C. 1201 et
seq., summarily to order cessation of a surface mining operation
whenever he determines that the operation:
creates an immediate danger to the health or safety of the
public, or is causing, or can reasonably be expected to cause
significant, imminent environmental harm * * *.
30 U.S.C. 1271(a)(1). SMCRA provides procedures under which a mine
operator can contest the Secretary's determination after an order is
effectuated and mining has ceased. 30 U.S.C. 1275(c). The Court
commented that:
(I)t is not a requirement of due process that there be judicial
inquiry before discretion can be exercised. It is sufficient * *
* that there is at some stage an opportunity for a hearing and a
judicial determination.
452 U.S. at 303, quoting Ewing v. Mytinger & Casselberry, Inc., supra,
339 U.S. at 599. The Hodel Court concluded that: "The administrative
action provided through immediate cessation orders responds to
situations in which swift action is necessary to protect the public
health and safety. This is precisely the type of emergency situation
in which this Court has found summary administrative action justified."
452 U.S. at 301. /25/
Similarly, in North American Storage Co. v. Chicago, 211 U.S. 306
(1908), cited with approval in Hodel, 452 U.S. at 300, the Court upheld
a provision granting municipal health inspectors the power to seize and
destroy food upon their determination that such food was unsafe for
human consumption. Rejecting the company's request for an injunction,
the Court found the procedure entirely in keeping with due process
protections, since the person from whom the food was taken could
contest the inspector's determination subsequent to the seizure. 211
U.S. at 315-316. The Court concluded:
(P)rovision for a hearing before seizure and condemnation and
destruction of food which is unwholesome and unfit for use is not
necessary. The right to so seize is based upon the right and
duty of the State to protect and guard, as far as possible, the
lives and health of its inhabitants * * *. (I)t is proper to
provide that food which is unfit for human consumption should be
summarily seized and destroyed to prevent the danger which would
arise from eating it.
Ibid.
The Court also affirmed the exercise of summary administrative
procedures in Central Union Trust Co. v. Garvan, 254 U.S. 554 (1921).
In Central Union, the Court upheld the power of the President and his
delegates under the Trading With the Enemy Act of 1917 to seize
securities upon determining they were enemy property. Due process was
satisfied by the availability of contest proceedings after the seizure.
See also Parke, Davis & Co. v. Califano, supra, 564 F.2d 1200 (district
court had no authority to review FDA's decision to initiate enforcement
action where a later hearing would occur); Pharmdyne Laboratories,
Inc. v. Kennedy, 596 F.2d 568 (3d Cir. 1979) (district court properly
denied motion for preliminary injunction to prevent FDA from
instituting drug seizure actions against company); United States v. An
Article or Device "Theramatic", 715 F.2d 1339 (9th Cir. 1983), cert.
denied, sub nom. Cloward v. United States, U.S. Cosmetic Act
allowing summary seizure of any article determined to be misbranded).
Underlying each of these decisions is the judicial recognition that
government agencies charged with protecting public health should not be
hamstrung by premature judicial intervention. As long as there is the
opportunity for a hearing at some time, summary administrative actions
are permissible where an agency acts to protect the public health and
welfare. The situation presented in this case is no less compelling
than in the cases discussed above. The J.V. Peters site had been
operating from its inception without the required state permits (Supp.
App. 5, 7), and, as discussed in the statement of facts, supra, at 4-8,
the unsecured site contained hazardous chemicals which were leaking
into the environment, posing a danger to school children, livestock and
growing crops. The State of Ohio had been trying for almost a year to
get the company to clean up the site (Supp. App. Vol. I at 3-6). The
state court had ordered a cleanup in December 1982 (Supp. App. Vol. I
at 8-13, 32-41), but the company had done nothing by October 1983, when
EPA became involved. /26/
Surely this situation is one in which summary administrative
procedure was warranted. If companies can circumvent the provisions of
CERCLA by tying EPA's hands and delaying the cleanup of hazardous waste
dumps, the public interest in a safe and healthy environment will
suffer. The company will have its day in court when EPA files a
cost-recovery action. The Due Process Clause simply does not require a
liability determination earlier than that.
CONCLUSION
For the foregoing reasons, the judgement of the district court
should be affirmed.
Respectfully submitted,
/s/ F. HENRY HABICHT, II
F. HENRY HABICHT, II
Assistant Attorney General
/s/ J. WILLIAM PETRO
J. WILLIAM PETRO
United States Attorney Cleveland, Ohio 44114
/s/ KATHLEEN ANN SUTULA
KATHLEEN ANN SUTULA
Assistant United States Attorney Cleveland, Ohio 44114
/s/ ROBERT L. KLARQUIST
ROBERT L. KLARQUIST
/s/ KATHLEEN P. DEWEY
KATHLEEN P. DEWEY
Attorneys, Department of Justice Washington, D.C. 20530 (202)
633-4519
OF COUNSEL:
/s/ GAIL COOPER
GAIL COOPER
Office of General Counsel United States Environmental Protection
Agency Washington, D.C. 20460
AUGUST 1984
/1/ Appellants will be referred to as "J.V. Peters" or "the
company."
/2/ Appellees will be referred to as "EPA."
/3/ Because important documents and photographs from the record were
omitted from appellants' appendix, EPA has filed a supplemental
appendix, consisting of two volumes. Volume I contains omitted
documents and Volume II contains photographs of the site taken by EPA
and submitted to the district court as attachments to EPA's motion to
dismiss or in the alternative for summary judgment.
/4/ In October 1983, J.V. Peters filed a motion for a stay with the
state appellate court. That motion was granted. Between December 1982
and October 1983, however, the company made no effort to comply with
the lower court's order.
/5/ This sampling had been required by the state court's order of
February 1983. As of October 13, however, no samples had been taken,
and, as mentioned in note 4, supra, at 5 the state appellate court, in
October 1983, stayed the lower court's order.
/6/ Lack of subjectmatter jurisdiction "may never be waived and may
always be reached by the court sua sponte." Rauch v. Day & Night Mfg.
Corp., 576 F.2d 697, 699 (6th Cir. 1978). Accord Riggs v. Island Creek
Coal Co., 542 F.2d 339, 343 (6th Cir. 1976). See Fed. R. Civ. P. 12(
h)(3).
/7/ Standing is an element of the constitutional requirement of a
"case or controversy," and the lack of standing deprives the court of
subject matter jurisdiction. Therefore, objections to standing may be
raised at any time. Matter of Kutner, 656 F.2d 1107 (5th Cir. 1981),
cert. denied, 455 U.S. 945 (1982).
/8/ In Parke, Davis, the Court held that the district court had no
authority to hear the challenge to FDA's decision to undertake an
enforcement action. 564 F.2d at 1206. This was contrasted with a
challenge to regulations and proceedings which would be reviewable
under Abbott Laboratories v. Gardner, supra, 387 U.S. 136 (1967).
/9/ See note 4, supra at 5.
Statement regarding oral argument
Statement regarding preference
Decision below
Questions presented
Statutes and regulations
Jurisdiction
Statement of the case
Standard of review
Summary of argument
Argument:
I. The plaintiffs lack standing
A. The plaintiffs' alleged economic injury cannot be fairly
traced to the government's trust acquisition of the Hillsborough
property
B. Plaintiffs' tax interests lie outside the zone of interests
protected by the Indian Reorganization Act of 1934
C. The City of Tampa has no jurisdiction over the Hillsborough
property and, therefore, has no standing to complain of the
activities occurring thereon
II. The action is barred by the doctrine of sovereign immunity
A. In reality, this suit is directed against the United States
and not against the Department of the Interior or its Secretary
B. Sovereign immunity bars actions against the United States
except to the extent Congress has waived the immunity
C. The federal question statute, the mandamus statute, and the
Indian Reorganization Act of 1934 do not waive the United States'
sovereign immunity with respect to this suit
D. Section 10 of the Administrative Procedure Act does not waive
the United States' sovereign immunity with regard to land
ownership disputes
E. The Quiet Title Act grants only a limited consent to suit not
applicable to Indian lands
Conclusion
Certificate of Service
I N D E X
Opinion Below
Issues Presented
Statement:
(a) District court jurisdiction.
(b) Jurisdiction of the court of appeals.
(c) Appealability.
(d) Timeliness of the appeal.
A. MCAS El Toro and the 1963 Declaration of Restrictions.
B. The Court of Claims litigation and the SDR.
C. This litigation.
Argument:
I. The District Court Correctly Ruled That The Property
Restrictions Embodied In The SDR Are Not Subject To Any Doctrines
Of Changed Conditions Or Changed Circumstances
A. Standard of Review.
B. Introductory.
C. The judgment of the Court of Claims bars plaintiffs from
contending here that the interest of the United States is not a
permanent one.
D. The court was not required to label the interest embodied in
the SDR.
E. The record amply supports the court's finding that the parties
intended to permanently restrict Rossmoor's property and to limit
the manner of termination of those restrictions to the methods
expressly spelled out in the agreement.
F. The United States owns a permanent interest which may be
terminated only in a manner as specified in the SDR.
II. The District Court's View Of The Litigation Site Was Not
"Misconduct"
III. The District Court Did Not Abuse Its Discretion By Granting
The Government's Motion To Dismiss Its Counterclaim Against
Rossmoor For Recovery Of Possession
IV. The United States Is Not, Under The Facts Of This Case,
Barred From Seeking Removal Of The Structure On The Restricted
Property
Conclusion
Statement Of Related Cases
Opinion below
Questions presented
Relevant statutes and regulations
Jurisdiction
Statement of the Case; course of the proceeding and disposition
below
Citations to the record
Statement of the Facts
1. The project
2. Corps processing of the permit application
3. District court opinion
Argument
I. The Corps complied fully with NEPA and its regulations before
issuing the fleeting permit to National Marine Service
A. The court's role in reviewing the Corps' compliance with NEPA
is limited
B. The Corps issuance of a FONSI was not arbitrary and capricious
1. Aesthetics
2. Recreational activities
3. Cumulative impacts
4. Mussels and overwintering catfish
5. Controversy
C. Under the circumstances, the Corps' consideration of
alternatives was adequate
Conclusion