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NEWPORT GALLERIA GROUP v. DELAND

September 25, 1985

NEWPORT GALLERIA GROUP, An Affiliate of the Pyramid Companies, Plaintiff,
v.
MICHAEL R. DELAND, et al., Defendants, MASSACHUSETTS AUDUBON SOCIETY, et al., Defendants-Intervenors



The opinion of the court was delivered by: GREEN

 Plaintiff Newport Galleria Group of the Pyramid Companies ("Pyramid") seeks to enjoin defendant United States Environmental Protection Agency ("EPA") from conducting public hearings pursuant to section 404(c) of the Clean Water Act, 33 U.S.C. § 1344(c) (1982), on Pyramid's proposed construction of a regional shopping mall on certain wetlands located in Attleboro, Massachusetts. EPA and defendant-intervenors challenge Pyramid's right to a preliminary injunction, and move for dismissal of the suit for lack of jurisdiction. Because the Court finds that EPA's initiation of the section 404(c) proceedings is neither unlawful nor a final agency action, it is constrained to dismiss for lack of subject matter jurisdiction.

 I. Background

 Pyramid seeks to build an enclosed regional shopping mall on 80 acres of land situated in Attleboro, Massachusetts, approximately 50 acres of which are red maple wetlands known locally as Sweeden's Swamp. Pyramid is not the first to propose such a mall for Sweeden's Swamp. The Edward J. DeBartolo Corporation, Pyramid's immediate predecessor in interest in the land, had earlier sought and failed to obtain permission from the Massachusetts Department of Environmental Quality Engineering ("DEQE")to locate a shopping center at the site. In 1982, following the DEQE denial, DeBartolo sought an adjudicatory hearing, which was still pending in late 1983 when Pyramid assumed control of the project. The DEQE subsequently authorized the project in a final order issued in March, 1985.

 Prior to obtaining state approval, Pyramid also applied to the United States Army Corps of Engineers ("Corps") in August, 1984, for a permit to fill in Sweeden's Swamp. Section 404(a) of the Clean Water Act authorizes the Corps to issue permits for the discharge of dredged or fill material into navigable waters at specified disposal sites. 33 U.S.C. § 1344(a) (1982). Section 404(b) provides that, subject to subsection (c), permits are to be based on the application of guidelines developed by the Administrator of the EPA in conjunction with the Secretary of the Army. Id. at § 1344(b) (1982). Those guidelines are set out at 40 C.F.R. § 230 (1984) ("Guidelines"). During the permit process, the EPA, the Corps and the United States Fish and Wildlife Service ("FWS") examined Sweeden's Swamp and found it to be a relatively undisturbed example of a deciduous forested New England wetland, providing a habitat for small mammals, songbirds, reptiles, amphibians, and several species of birds during the migratory period. The three agencies concluded that, even with on-site mitigation, Pyramid's project would result in significant habitat losses. In addition, the EPA notified Pyramid that, under the 404(b) Guidelines, Pyramid bore the burden of demonstrating that no other less environmentally damaging sites were available for its project. *fn1" Concerns over the loss of habitation, and dissatisfaction with Pyramid's conclusion that no other practicable alternatives existed, eventually led both the EPA and the FWS to recommend denial of the permit in their official comments to the Corps. Similar concerns prompted the Corps to notify Pyramid in early 1985 that denial of the 404 permit was "imminent". Declaration of Douglas A. Thompson, Exhibit K.

 On May 2, 1985, Colonel Carl B. Sciple, Division Engineer of the Corps' New England Regional Division, forwarded his recommendation on Pyramid's permit application to Major General John F. Wall, then Director of Civil Works at Corps Headquarters in Washington, D.C. General Wall had earlier directed Colonel Sciple to submit his recommendation for review. Colonel Sciple proposed that Pyramid's permit be denied. General Wall, however, overturned that decision, and on May 31, 1985, directed Colonel Sciple to prepare a notice of intent to issue the permit and to reconcile his findings to conform with the instructions from Washington. On June 28, Colonel Sciple issued the notice of intent and the reconciled documentation. The notice set forth a series of conditions Pyramid must meet before it can begin alteration of Sweeden's Swamp. Chief among these is the creation of an off-site mitigation project, or artificial swamp, to replace the wetlands lost to the shopping center. The notice requires that Pyramid locate a mitigation site, complete hydrological studies and habitation evaluation, and develop plans and specifications for the project. No significant construction of the mall is to commence until the man-made swamp is functioning to the satisfaction of the Corps' Division Engineer. The proposed permit does not specify the size of the new swamp or its location, and it allows removal of substrate from Sweeden's Swamp in order to develop the artificial wetlands.

 On July 23, 1985, EPA's Regional Administrator ("RA") Michael R. Deland informed the Corps and Pryamid that he was initiating proceedings under section 404(c), and thereby suspending issuance of the permit. It is this action that Pyramid challenges as illegal and seeks to enjoin.

 II. Discussion

 Section 404(c) provides, in pertinent part, that the EPA Administrator

 
is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site . . . whenever he determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . ., wildlife, or recreational areas.

 33 U.S.C. § 1344(c) (1982). Regulations issued under section 404(c) set forth the rather broad standards the Administrator is to apply in determining when to exercise this statutory veto power. They state that where "the Regional Administrator has reason to believe after evaluating the information available to him . . . that an 'unacceptable adverse effect ' could result . . . he may initiate [§ 404(c) proceedings]." 40 C.F.R. § 231.3(a) (1984) (emphasis supplied). In essence, Pyramid contends that, as a matter of law, the RA cannot have any reason to believe that any adverse effect could possibly result from its project; that as a result, the RA's initiation of the section 404(c) proceedings is unlawful; and that therefore, the initiation of these proceedings is final agency action that this Court may review and enjoin.

 Before turning to the specifics of Pyramid's arguments, it is worth noting the structure and plain language of section 404. As Pyramid correctly argues, under section 404(b), primary responsibility for the issuance of permits rests, in the first instance, with the Corps. Section 404(b), however, is expressly made subject to the EPA Administrator's veto power set out in section 404(c). Pyramid characterizes this power as "extraordinary, and therefore highly restricted," and claims that as such it may be exercised " only if the Regional Administrator has reason to believe" that unacceptable adverse effects could result from the proposed project. Plaintiff's Motion for Preliminary Injunction ("Plaintiff's Motion") at 21 (emphasis supplied). Pyramid's narrow view of the RA's authority under section 404(c), however, finds no support in the statute. That section authorizes the RA to withdraw a permit " whenever he determines, after notice and opportunity for public hearings, that [the project] will have an unacceptable adverse effect" on any of the five designated resource areas. 33 U.S.C. § 1344(c) (1982). Nothing in section 404(c) suggests that this power is extraordinary or highly restricted. Quite the contrary, the statute sets out no threshold requirements for the initiation of section 404(c) proceedings whatsoever: the sole specific limitation -- the finding of an "unacceptable adverse effect" -- applies only to actions the RA may take after the notice and hearing process, not before. The conditions placed on the RA's initiation of section 404(c) proceedings, such as they are, appear only in the regulations quoted above. As noted previously, they are broad, requiring only that the RA "[have] reason to believe . . . that an 'unacceptable adverse effect ' could result" from a given project. 40 C.F.R. § 231.3(a) (1984) (emphasis supplied).

 Unable to point to any statutory language or legislative history in support of its claim that the RA's section 404(c) powers are highly restricted, Pyramid relies on the fact that the EPA has commenced proceedings under this section "on only seven or eight occasions" since passage of the Act. Plaintiff's Motion at 21. This fact hardly compels the conclusion, as Pyramid seems to suggest, that the EPA understands its powers to be severely restricted; the infrequent use of section 404(c) may simply be the result of a regulatory like-mindedness between the EPA and the Corps. The Court need not speculate, however, as it is enough to conclude that the relatively infrequent use of section 404(c) powers, without more, does not convert a broadly defined authority into an extraordinary and highly limited one.

 In short then, Congress gave the EPA wide discretion to determine when to initiate proceedings under section 404(c). It is against this backdrop that Pyramid's claim of an illegal ...


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