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March 18, 1994


The opinion of the court was delivered by: LOUIS F. OBERDORFER

 Plaintiffs, Monroe County, N.Y., the City of Rochester, N.Y., and the city's water district (collectively "Rochester"), brought this action to compel defendant, the Environmental Protection Agency ("EPA"), to fund certain expenses that arose out of litigation relating to Rochester's construction work on a sewage treatment plant in the early 1970s. Currently pending are EPA's motion to dismiss or for summary judgment and Rochester's motion for partial summary judgment. For the reasons stated in this Memorandum, the accompanying Order dismisses all of Rochester's claims.


 EPA originally funded a portion of Rochester's costs for the expansion and upgrade of the VanLare sewage treatment plant in 1968. In 1972 Congress enacted Clean Water Act § 206(a), 33 U.S.C. § 1286(a) (the "206(a) program"), which allowed grantees that had instituted approved projects between 1966 and 1973 to apply for "upward adjustments" so that the grants would cover up to 55% of eligible costs. Congress subsequently set January 31, 1974 as the deadline to apply for 206(a) funds. The statute provided that "any application [timely] filed . . . may be revised from time to time, as may be necessary." Id. Congress authorized $ 2.6 billion for the 206(a) program and appropriated $ 2.4 billion, all by 1977.

 Rochester filed a timely 206(a) application and ultimately received a total of $ 43,472,000 in grants, covering 55% of its costs. In the mid-1980s, Rochester applied for an additional $ 3,986,884 to cover costs of settling lawsuits with the project's prime contractor and subcontractor. The New York State Department of Environmental Conservation (the "state agency"), EPA's delegated agent for the 206(a) program, denied the request in December 1984, holding that an applicant could not receive more than the amount claimed prior to the statutory deadline of December 31, 1974. Rochester pursued administrative remedies with the state agency and EPA. Rochester also filed a deviation request with EPA in September 1989 to seek a departure from EPA's regulations, pursuant to 40 C.F.R. Pt. 30. Meanwhile, in the Appropriation Act of November 9, 1989, Congress rescinded the remaining amount of the 206(a) appropriation, $ 47.7 million, that had not been disbursed. Rochester attempted to compel EPA to set aside $ 4 million to fund Rochester's outstanding disputed claims, but the Court of Appeals for this Circuit rebuffed that attempt. Rochester Pure Waters District v. EPA, 295 U.S. App. D.C. 121, 960 F.2d 180 (D.C. Cir. 1992), rev'g 724 F. Supp. 1038 (1989) ("Rochester I").

 This action involves Rochester's claims for reimbursement for several components of settlements in lawsuits with two contractors, Monsanto Enviro-Chem Systems, Inc. and Vanderlinde Electrical Company. The Complaint requests a writ of mandamus, a writ of prohibition, declaratory judgment, de novo or APA judicial review, and reversal of various EPA determinations against Rochester. In part, it requests judicial intervention to compel EPA to compel the state agency to pay a 30% "state matching share" of Rochester's grant, which Rochester alleges the state agreed to pay in exchange for an increase in the federal percentage of funding for water pollution abatement facilities. Rochester claims it seeks only equitable relief, not a money judgment. EPA has moved to dismiss or for summary judgment, and Rochester has moved for partial summary judgment as to its claim for funding of prejudgment interest from the Monsanto settlement.

 Rochester raises six substantive claims in this action, all for components of settlements it paid to Monsanto and Vanderlinde or expenses arising from its litigation with those two contractors. First, it seeks funding for extra work damages that it paid as part of the settlement in the Monsanto litigation. Second, it seeks grant funding for delay damages it paid in the Monsanto settlement. Third, it seeks its legal defense expenses from the Monsanto litigation. Fourth, it seeks statutory prejudgment interest that it paid as part of the Monsanto settlement. Fifth, it seeks to compel EPA to make the state of New York process its claims relating to delay damages from the settlement in the Vanderlinde case more quickly. Sixth, it seeks its legal defense expenses from the Vanderlinde litigation.

 1. The claim for the extra work component of the Monsanto settlement. EPA has granted a deviation for this claim, and the parties agree that EPA has paid Rochester the federal portion of the grant. EPA claims the issue is moot because it has paid Rochester, but Rochester contends that the state portion of the grant remains properly at issue in this lawsuit. Rochester claims the state agency has not paid Rochester the state matching share of the grant because the state does not consider itself bound by EPA's deviation decisions, and Rochester asserts that federal preemption would bind the state if the Court determined that Rochester was entitled to the funds as a matter of law. Therefore, Rochester seeks a declaratory judgment against EPA that Rochester is entitled to the funds as a matter of law, rather than merely at EPA's sufferance, in order to make New York pay the state matching share. Rochester also seeks a writ of mandamus that would compel EPA to take action to make the state pay the matching share.

 EPA has stated that it does not intend to take action against the state agency as requested by plaintiffs. A letter dated March 9, 1994 from William J. Muszynski, EPA Acting Regional Administrator, to plaintiffs' counsel stated:

EPA has determined, in the exercise of its discretion, that it will not further investigate the State of New York's possible obligation to pay to Rochester the state matching share of federal eligible project costs. EPA has decided, in further exercise of its discretion, that it will not prosecute the State of New York to compel the State to pay matching funds.

 Id. at 2. The letter also stated EPA's understanding of the state agency's view that the state has no duty to pay the federal matching share, and it contended that plaintiffs had not produced evidence to EPA that established either the state's duty to pay or EPA's duty to take action against the state agency. The letter renders Rochester's claims regarding the state matching share ripe for decision.

 New York is a separate sovereign, not party to this action, with legal interests distinct from those of EPA. Rochester has not produced evidence to establish that the declaratory judgment it seeks in order to compel action by the state can properly issue against EPA or that such a judgment would produce the result Rochester seeks. As for its request for a writ of mandamus, Rochester has presented no persuasive basis for interfering with EPA's discretion to deploy its resources as it sees fit, least of all in a situation such as this one, where Rochester has the option to sue New York directly. This is essentially a situation in which plaintiffs are not entitled to the relief they seek because their ability to sue the state affords them an adequate remedy at law. See, e.g., O'Shea v. Littleton, 414 U.S. 488, 499, 38 L. Ed. 2d 674, 94 S. Ct. 669 (1974). Because this claim is concededly moot as to the federal share of the grant and fails to state a claim as to the state share, it will be dismissed.

 2. The claim for delay damages paid in the Monsanto settlement. This amount represents costs to the contractor of extra, unplanned work days that the Monsanto jury found to be Rochester's fault. EPA has denied grant funding and has refused a deviation. The question this claim presents is whether the agency acted arbitrarily and capriciously in treating the jury's finding of Rochester's fault as res judicata in denying funding. ...

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