ELR Citation: ELR 21464
No(s). H91-172 (N.D. Ind. Jun 30, 1992)

The court holds that the Army Corps of Engineers (the Corps) properly considered and denied a landowner's after-the-fact permit application under the Federal Water Pollution Control Act (FWPCA) §404 individual permit program, as opposed to the FWPCA nationwide permit program, because the applicant's fill activities on .41 acre of wetlands will affect more than one acre of wetlands. After the landowner filled .41 acre of wetlands on his property in the process of developing recreational facilities, the Corps denied his request to receive an after-the-fact permit pursuant to the Corps' nationwide permit program and requested that he apply for an individual §404 permit. Based on the Corps' finding that the landowner's previous fill activities would adversely affect six acres of wetlands and an adjacent lake, the Corps denied the permit as contrary to the public interest and issued a restoration order. The court first notes that in reviewing the Corps' decision, as long as the Corps' interpretations and applications of §404 and its accompanying regulations are reasonable, the court will adopt them. The court next notes that although the act of discharging dredge or fill material into nontidal water that causes the loss or substantial adverse modification of less than 10 acres of waters of the United States is an activity eligible for a general permit, the Corps can require an applicant for a nationwide permit to apply for an individual permit at the agency's discretion, or if the application concerns waters that are already identified by or of importance to other federal and state agencies. The court also observes that the regulations do not require notification of the Corps for activities that involve the discharge of dredge or fill material into less than one acre of waters. However, the court concludes that the Corps' determination that the landowner's filling of the .41 acre of wetlands will in time affect adversely up to six acres of wetlands, plus the water quality of an adjacent lake, is within the Corps' discretionary authority.

The court next upholds the Corps' interpretation of activities that "cause the loss or substantial modification of" less than 10 acres of waters in the regulatory language under the nationwide permit program, as meaning past, present, and future effects on the waters of the United States, including wetlands. The regulations accompanying §404 speak repeatedly of the cumulative impact that dredge and fill activity might have on surrounding aquatic resources, and the Corps is specifically charged with weighing the benefits expected to accrue from fill activity against any foreseeable detriments associated with such activity. Because the landowner's activities have the potential of affecting adversely more than one acre of wetlands and the water of a lake, his activities fall within the one- to 10-acre category under the nationwide permit regulations, and the Corps properly had authority to require an individual application.

The court next upholds the Corps' decision to deny the landowner an individual permit for the fill of the .41 acre of wetlands and impose a restoration order. Although the landowner submitted revised plans for his project at the request of the Corps, the Corps found that the plans reduced, but did not eliminate the adverse impacts associated with the project. The Corps also determined that the landowner failed to address existing, practicable alternatives. Thus, the Corps did not act arbitrarily or capriciously in denying the landowner's individual permit.

The court also holds that the Corps did not deny the landowner due process by not providing him with notice and a hearing regarding the agency's denial of a nationwide permit, because the landowner never had a nationwide permit. Rather, the Corps simply decided to treat the landowner's after-the-fact permit application as one for an individual permit. Moreover, the landowner was owed no formal, adjudicatory hearing under §404 on the status of his permit application, because the regulations leave to the Corps discretion as to whether a public hearing will be necessary on any particular permit application. Despite the absence of a formal hearing, the record shows that the Corps honored the landowner's constitutional right to due process throughout all stages of the administrative proceedings in this case.

Finally, the court holds that the Corps' denial of a §404 permit does not constitute a taking within the meaning of the Fifth Amendment to the U.S. Constitution, and even if it did, the court lacks jurisdiction to hear the landowner's taking claim. First, the landowner, by requesting an injunction enjoining the Corps from enforcing its restoration order, seeks equitable relief instead of compensation. Although the court previously ruled that the landowner's taking claim was properly before the court, the court reverses that ruling, because the Tucker Act dictates that the landowner's Fifth Amendment claim rests within the exclusive jurisdiction of the Court of Claims, absent the federal statute involved providing an exclusion of jurisdiction from the Court of Claims. Here, the FWPCA does not exclude Court of Claims' jurisdiction over takings claims brought under the Act. However, even if the court had jurisdiction over the landowner's taking claim, the court holds that the action complained of did not constitute a taking. In this case, the record shows that the Corps' denial of a §404 permit did not deprive the landowner of all economically viable uses of his property, just "an" economically viable use.

Counsel for Plaintiff
James Harrington
Ross & Hardies
150 N. Michigan Ave., Ste. 2500, Chicago IL 60601
(312) 558-1000

Counsel for Defendants
Orest Szewciw
U.S. Attorney's Office
1001 Main St., Ste. A, Dyer IN 46311
(219) 322-8576

Alan Greenberg
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2640