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P&V Enterprises v. United States Army Corps of Engineers

December 19, 2006


The opinion of the court was delivered by: Reggie B. Walton United States District Judge


P&V Enterprises ("P&V"), Friendly Valley Equestrian Homes ("FVE"), SCC Acquisitions, Inc. ("SCC"), and SunCal Martinville LLC ("SunCal") (collectively "the plaintiffs") bring this action against the United States Army Corps of Engineers ("USACE" or "the Corps") and Lieutenant General Carl A. Strock, Commander and Chief of Engineers (collectively "the defendants"), challenging the facial validity of USACE regulation 33 C.F.R. § 328.3(a)(3) (2006) and seeking injunctive and declaratory relief under the federal question statute, 28 U.S.C. § 1331 (2000), and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02 (2000). Second Amended Complaint ("Compl.") at 1, 11-13. Specifically, the plaintiffs argue that § 328.3(a)(3) is "facially invalid because [it] exceed[s] the Corps' statutory authority as limited by the Commerce Clause of the [United States] Constitution." Id. at 1. Currently before the Court is the defendants' motion to dismiss the plaintiffs' complaint for lack of subject-matter jurisdiction ("Defs.' Mot.").*fn1 Because the Court concludes that the plaintiffs' facial challenge to § 328.3(a)(3), without an accompanying as-applied challenge, is barred by the six-year statute of limitations imposed upon "every civil action" filed against the United States, 28 U.S.C. § 2401(a) (2000), it grants the defendants' motion and dismisses the plaintiffs' complaint without prejudice.

I. Factual Background

The Clean Water Act ("CWA"), first enacted in 1972, establishes a comprehensive statutory program "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a) (2000). To that end, the CWA prohibits the discharge of pollutants into the navigable waters of the United States unless specifically authorized by a permit issued pursuant to the CWA's statutory scheme. See 33 U.S.C. §§ 1311(a) (prohibiting pollutant discharges), 1344(a) (describing the issuance of permits) ("Section 404(a)"), 1362 (defining statutory terms). Under the CWA, "navigable waters" are defined as "the waters of the United States, including the territorial seas." 33 U.S.C. § 1362(7).

Section 404(a) of the CWA delegates to the Corps, as an agency of the United States, "[the] authority to issue permits for the discharge of dredged or fill material into the navigable waters at specified disposal sites." Solid Waste Agency of N. Cook County v. U.S. Army Corps of Eng'rs, 531 U.S. 159, 163 (2001) ("SWANCC") (quoting 33 U.S.C. § 1344(a)) (internal quotation marks omitted). Through the evaluation of permit applications, the Corps is authorized to regulate a variety of activities pertaining to the nation's waters. 33 C.F.R. § 320 et seq. (2006); see also 33 C.F.R. § 323 et seq. (2006) (implementing Section 404(a)). In 1986, pursuant to that authority, the Corps promulgated a regulation "defin[ing] the term 'waters of the United States' as it applies to the jurisdictional limits of the authority of the Corps of Engineers under the Clean Water Act." 33 C.F.R. § 328.1; see 51 Fed. Reg. 41,206, 41,250 (Nov. 13, 1986). This regulation defines the term "waters of the United States," as used in 33 U.S.C. § 1362(7), to mean, inter alia:

(3) All . . . waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce including any such waters

(i) Which are or could be used by interstate or foreign travelers for recreational or other purposes;

(ii) From which fish or shellfish are or could be taken and sold in interstate or foreign commerce; or

(iii) Which are or could be used for industrial purpose by industries in interstate commerce. 33 C.F.R. § 328.3(a)(3) (emphasis added). Tributaries of such waters are also included within this regulatory definition. 33 C.F.R. § 328.3(a)(5).

To "clarify the scope of the Section 404 permit program," the Corps further noted in its preamble to the promulgation of § 328(a)(3) that the definition of "waters of the United States" also included "waters . . . [w]hich are or would be used as habitat by birds protected by Migratory Bird Treaties; . . . other migratory birds which cross state lines; or . . . endangered species." Fed. Reg. 41,206, 41,216, 41,217 (Nov. 13, 1986). In 2001, however, the Supreme Court's decision in SWANCC v. U.S. Army Corps of Eng'rs invalidated this "Migratory Bird Rule," holding that the Corps' promulgation of the rule improperly "push[ed] the limits of congressional authority" and "raise[d] significant constitutional questions" under the Commerce Clause. SWANCC, 531 U.S. at 173; see id. at 174 (finding that to permit the Corps "to claim federal jurisdiction over ponds and mudflats falling within the 'Migratory Bird Rule' would result in a significant impingement of the States' traditional and primary power over land and water use") (citation omitted); see also Rapanos v. United States, ___ U.S. _____, _____, 126 S.Ct. 2208, 2216-17 (2006) (discussing SWANCC).

In the wake of SWANCC, the Corps and the Environmental Protection Agency issued "an advanced notice of proposed rulemaking (ANPRM) in order to obtain early comment on issues associated with the scope of waters that are subject to the [CWA]." 68 Fed. Reg. 1991, 1991 (Jan. 15, 2003); see generally 68 Fed. Reg. 1991, 1991-98 (Jan. 15, 2003). The ANPRM sought public and professional input on "the definition of 'waters of the United States' . . . [and] the implications of the SWANCC decision for jurisdictional decisions under the CWA" so that the agencies might "develop proposed regulations that will further the public interest by clarifying what waters are subject to CWA jurisdiction." 68 Fed. Reg. 1991, 1991 (Jan. 15, 2003). The agencies further stated that "[t]he input received by the public in response to [the] ANPRM will be used . . . to determine the issues to be addressed and the substantive approach for a future proposed rulemaking addressing the scope of CWA jurisdiction." Id. (emphasis added). Finally, the intra-agency guidance document attached as an appendix to the ANPRM observed that "in light of SWANCC, it is uncertain whether there remains any basis for jurisdiction under the other rationales of § 328.3(a)(3)(i)-(iii) over isolated, non-navigable, intrastate waters." Id. at 1996. Notwithstanding this jurisdictional uncertainty and the Corps' professed intention to issue proposed rules regarding the post-SWANCC scope of § 328.3(a)(3), id. at 1991, the Corps "ultimately did not amend its published regulations," Rapanos, ___ U.S. at ____, 126 S.Ct. at 2217. Instead, in December 2003, the Corps issued a press release "announc[ing] that it would not issue a new rule on federal jurisdiction over isolated waters and 'reiterated' its commitment to the scope of the present regulations." Pls.' Opp. at 11 (quoting Pls.' Opp., Exhibit B (Dec. 16, 2003 document entitled, "EPA, Corps of Engineers Issue Wetlands Decision") ("Press Release") at 1); see also Press Release at 1 (stating that "[a]fter soliciting public comment to determine if further regulatory clarification was needed, the EPA and the Corps have decided to preserve the federal government's authority to protect our wetlands").*fn2 The Corps therefore continues to assert CWA jurisdiction over all intrastate waters which, through their "use, degradation or destruction[,] . . . could affect interstate or foreign commerce."*fn3 33 C.F.R. § 328.3(a)(3).

The plaintiffs brought this action on August 5, 2005, as a facial challenge to § 328.3(a)(3). Compl. ¶¶ 40-43. The plaintiffs are title-holders to approximately 8,000 acres of undeveloped land in the desert area of western San Bernadino County, California, near the City of Barstow (hereinafter "the Barstow Property"). Id. ¶¶ 3-4. Plaintiff SCC, through its control of plaintiff SunCal, plans to develop approximately 7,500 acres of this property as "a master-planned mixed-use community" (hereinafter "the Barstow Project"). Id. ¶ 4. The Mojave River, described by the plaintiffs as "a nonnavigable, isolated, intrastate river . . . located entirely within a single inland . . . county," id. ¶ 16, is located near the Barstow Property, which "encompasses several [of the river's] nonnavigable ephemeral tributaries," id. ¶ 15. According to the plaintiffs, the Corps has asserted jurisdiction over the Mojave River and its tributaries pursuant to § 328.3(a)(3). Id. ¶ 25-26. Consequently, because the planned development of the Barstow Property "will have a direct impact on tributaries to the Mojave," the plaintiffs state that they "would be required to obtain a permit from the Corps before proceeding with the Barstow Project." Id. ¶ 15. The plaintiffs claim that this permit requirement "has a direct adverse [effect] on the value of the Barstow Property and adds significant engineering and administrative costs to the project." Id. ¶ 34. Thus, rather than applying for a permit and becoming "wrongly . . . saddled with significant costs, delays, and demands of an otherwise inapplicable regulatory regime," id., the plaintiffs ask this Court to find that § 328.3(a)(3) is facially invalid because it "exceed[s] the Corps' statutory congressional authority as limited by the Commerce Clause," id.

¶ 43.

On October 18, 2005, the defendants moved to dismiss this action for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Defs.' Mot. at 1. Specifically, the defendants argue that (1) the plaintiffs' claims are barred by sovereign immunity, Defs.' Mem. at 5-6; and (2) the plaintiffs' claims are untimely under the six-year statute of limitations of 28 U.S.C. § 2401(a) (2000), id. at 6-8. In response, the plaintiffs contend that (1) their claims are subject to a general waiver of sovereign immunity under the Administrative Procedure Act ("APA"), 5 U.S.C. § 702 (2000), Pls.' Opp. at 3-4; (2) the six-year limitations period of 28 U.S.C. § 2401(a) is not applicable "to substantive challenges to the facial validity of a regulation," id. at 4; see id. at 4-7; (3) their claims cannot be dismissed under Rule 12(b)(1) because 28 U.S.C. § 2401(a) is not jurisdictional in nature, id. at 8-9; and ...

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