Salt Pond Associates v. U.S. Army Corps of Engineers

No. 92-597-LON (D. Del. September 22, 1993)

The court holds that the U.S. Army Corps of Engineers (Corps) had jurisdiction under § 404 of the Federal Water Pollution Control Act (FWPCA) to compel a developer to apply for an after-the-fact permit for the excavation and clearing of wetlands, and the court upholds the Corps' decision to deny the permit. The court finds that evidence supported the Corps' determination that there had been a discharge of fill material requiring a § 404 permit. Fundamental to the exercise of the Corps' jurisdiction is the existence of a discharge, and photographs and site visit reports demonstrated that a significant amount of discharges of fill material had occurred. The court holds that the Corps' exercise of jurisdiction over the disputed activities was proper under § 706 of the Administrative Procedure Act because the Corps considered all of the relevant data and articulated an explanation establishing a rational connection between the facts found and the choice made. The Corps relied on a field officer's observations and report, and photographs detailing numerous activities that had resulted in discharges triggering FWPCA jurisdiction. Also, the developer failed to demonstrate that the Corps' initial jurisdictional determination was arbitrary and capricious. Next, the court holds that any error the Corps may have committed by purportedly relying on a regulatory guidance letter in reaching its jurisdictional decision was not prejudicial and should not disturb the government's exercise of jurisdiction. The court upholds the Corps' denial of the developer's after-the-fact permit application because the Corps' decision was based on a consideration of the relevant factors; there was no clear error of judgment, and the denial was a reasoned decision. Finally, the court declines to determine the propriety of the Corps' remedial plan, which includes complete restoration of excavated ponds. To resolve the issue would constitute impermissible preenforcement of judicial review.

Counsel for Plaintiff
F. Michael Parkowski, Jeremy W. Homer
Parkowski, Noble & Guerke
116 W. Water St., P.O. Box 598, Dover DE 19903
(302) 678-3262

Counsel for Defendants
Richard G. Andrews, Ass't U.S. Attorney
U.S. Attorney's Office
Chemical Bank Bldg.
1201 Market St., Ste. 1100, P.O. Box 2046, Wilmington DE 19801
(302) 573-6277

Robert E. Lefevre
Environmental and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

[24 ELR 21186]

Longobardi, J.:

Memorandum Opinion

I. Factual and Statutory Background¹

This dispute stems from Plaintiff's efforts to develop a piece of land for resale as waterfront lots. In an effort to ensure that any and all federal environmental wetlands requirements were being satisfied under the Clean Water Act ("CWA") and other environmental protection laws,² the Plaintiff ("Salt Pond") apparently engaged in extensive consultation with the U.S. Army Corps of Engineers ("USCOE" or "Government") as well as their own environmental experts.³ Despite efforts by both sides to protect the "developing" interests of Salt Pond and the "environmental" interests that the USCOE is legally required to protect, irreconcilable disputes have arisen between the parties. These disputes center around the breadth of the USCOE regulatory jurisdiction under the circumstances presented by this case as well as the allegedly adverse impact this land development will have on the environment.

On January 25, 1989, the Plaintiff submitted to the Government a wetlands delineation report requesting verification by the Government of its proposed section 404 wetlands delineation. Vol. I at 1-555.⁴ On April 4, 1991, after Plaintiff had spent over two years toward the development of the property, the Government informed the Plaintiff that a 12-acre area of the total land was in fact under the jurisdictional control of the Government. Vol. II at 336-37 (letter from Cianfrini to Plaintiff's expert, Charles Miller). On August 12, 1991, during an on-site inspection by the Government's investigators, the Government determined that 10 ponds (hereinafter "the ponds") had been excavated in wetlands by the Plaintiff and that the Plaintiff had engaged in regulated land clearing in wetlands. Vol. III at 17-19.

On September 5, 1991, Plaintiff's expert wrote the Government contending that its development activities were consistent with the law and the USCOE policy. Id. at 20-25. On October 5, 1991, the Government nevertheless issued a Cease and Desist letter which required the Plaintiff to discontinue any and all development of the land because of numerous environmental violations discovered during its on-site investigation. Id. at 26-29 (letter from H. Ronald Kreh, Chief, Operations Division, to Salt Pond representative, Rupert Smith). As a follow-up to that order, the Government directed the Plaintiff to apply for an "after-the-fact" ("ATF") permit⁵ for work already undertaken and work still to be undertaken in connection with the development of the Salt Pond property. Id. at 93-94.⁶ After significant correspondence regarding the appropriate procedural mechanisms, Salt Pond submitted to this ATF permit process under full reservation of its rights in the hope that any and all environmental violations could be remedied and the development of the land could proceed to completion. Vol. V at 9-88; Vol. VI at 101-628. Plaintiff further implored the Government to sever from the ATF permit application consideration of Plaintiff's request for a water and sewer utility crossing permit ("the Loop Canal permit") pleading that the issuance of this permit under section 10 of the Rivers and Harbors [24 ELR 21187] Act ("RHA")⁷ was completely unrelated to matters pertaining to section 404 wetlands jurisdiction and the excavation of the ponds.⁸ The Government responded by informing the Plaintiff that its request for the Loop Canal permit would only be processed in conjunction with the required after-the-fact permit.⁹

After giving public notice of Salt Pond's permit application on March 25, 1992, Vol. VII at 633-69, and receiving extensive commentary on the project from concerned local, state, and federal agencies, as well as individual environmentalists,¹⁰ the Government ultimately denied Salt Pond's application for the ATF permit on September 24, 1992, finding the project in its entirety "contrary to the general public interest." Vol. VIII at 936.¹¹ In particular, the Government indicated that the construction of a swale, construction of the 10 ponds and the mechanized land clearing, grading and york raking of wetlands adjacent to the swale and ponds, if maintained, "would result in unacceptable adverse environmental impacts." Id.

After finding that some of the Plaintiff's proposed activities were environmentally sound, the Government offered the Plaintiff an opportunity to receive an alternative permit. This permit would include Plaintiff's strongly coveted Loop Canal permit provided Plaintiff satisfied 31 "special conditions." See generally id. at 936-41.¹² The Government indicated that if this alternative permit was not accepted by the Plaintiff, then Plaintiff would have 60 days in which to initiate action for environmental restoration including the complete restoration of the excavated ponds. Id. at 971 (letter from Acting District Engineer John Gessner to Salt Pond representatives). Subsequent efforts by Salt Pond to have the Loop Canal permit determination severed from the denial of the ATF decision (see id. at 1000-03) were once again rejected by the Government. Id. at 1004 (October 2, 1992, letter from Sliwolski, Lieutenant Colonel of the USCOE to attorney for Salt Pond, Michael Parkowski).¹³

II. Nature and Stage of the Proceedings

On October 19, 1992, the Plaintiff filed its complaint in this matter detailing numerous issues relating to the USCOE permit decision. Docket Item ("D.I.") 1. Additionally, the Plaintiff filed a motion for a preliminary injunction seeking to enjoin the Government's demand that the Plaintiff restore the ponds pending a final review of the Record, that any pond restoration conditions be deleted from any permit application, that the Government be enjoined from any enforcement action, and that the Government be directed to issue Salt Pond the necessary Loop Canal permit. D.I. 2. In response, the Government filed a motion to dismiss. D.I. 9.

In a comprehensive opinion dated February 19, 1993, D.I. 25, the Court found preliminarily that the Government's demand that the Plaintiff initiate plans to restore the ponds should be enjoined pending a full review of the Record.¹⁴ In short, this Court found (1) that the Plaintiff had preliminarily demonstrated the likelihood of success on the merits of its underlying claim that the Government was without appropriate CWA jurisdiction to require the Plaintiff to submit to the ATF permit process in the first instance and was therefore without jurisdictional authority to subsequently deny that permit and require Plaintiff to initiate pond restoration; and (2) that there was a strong probability that the Plaintiff would suffer irreparable injury if the pond restoration demand by the Government was not postponed pending a complete review of the record. Accordingly, this Court postponed the Government's demand that the Plaintiff initiate complete pond restoration within 60 days of its denial of the ATF permit application pending a full-blown judicial review of the record.¹⁵

In response to the Court's opinion, the parties agreed to engage in negotiations aimed at settling the underlying dispute. After these efforts proved unsuccessful, the parties agreed to a briefing schedule in connection with the review of the record by this Court. Toward that end, the Plaintiff has filed a motion for summary judgment requesting "judicial review of the Record of a final agency action under the provisions of the Administrative Procedure Act (APA)." D.I. 35 at 2. The Plaintiff seeks the Court's review of the USCOE permit decision under 5 U.S.C. § 706 challenging the USCOE jurisdiction to regulate pond excavation and land clearing in a section 10 RHA permit which are not directly related to section 10 RHA jurisdiction. Id. Additionally, the Plaintiff challenges the USCOE decision disallowing Plaintiff's use of National Permit #26 as arbitrary, capricious, an abuse of discretion and not in accordance with law. Id.¹⁶ As relief, Plaintiff requests:

[24 ELR 21188]

[a declaration that] the USCOE is not entitled to regulate pond excavation and landclearing . . ., [that the Court] rule that the decision todeny Plaintiff the use of NP #26 was unjustified and that Plaintiff has established its entitlement to use of NP #26, and pursuant to 5 U.S.C. § 706(1) [that the Court] compel agency action to issue the § 10 RHA permit approval which is being unlawfully withheld and unreasonably delayed.

Id.¹⁷

Defendant has cross-moved for summary judgment seeking that its decision concerning the ATF permit be upheld in its entirety and that its decision concerning Nationwide Permit ("NP") 26 be upheld as not being arbitrary or capricious.¹⁸ In support of its motion, the USCOE has in effect attached the entire administrative record (eight volumes in excess of 1,000 pages). The record meticulously details the entire course of events in this matter leading up to the crux of the present dispute: The USCOE decision to require Salt Pond to submit to the ATF permit process and the USCOE's ultimate authority to either deny the Plaintiff the ATF permit outright or grant the Plaintiff an alternative "special conditions" permit which would allow certain activities and the issuance of the Loop Canal permit conditioned upon the satisfaction by Salt Pond of 31 special conditions. Vol. VIII at 936-41.

III. Discussion

A. Standard of Review

The Court examines the totality of the USCOE's actions which led to the denial of Salt Pond's after-the-fact permit application under the standards set out by the Administrative Procedures Act. In particular, this Court may only hold unlawful and set aside the USCOE's actions, findings, and conclusions if the Court finds them to be:

(A) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject to section 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or

(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

5 U.S.C. § 706(2)(A-F) (emphasis added).¹⁹

In applying these standards to an agency's action, it is well-settled that the action "is entitled to a presumption of regularity." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 [1 ELR 20110] (1971). Accord, Frisby v. U.S. Dep't of Housing & Urban Development, 755 F.2d 1052, 1055 (3d Cir. 1985). The burden of proving that the agency action was improper is on the party alleging irregularity. Id. at 1055, citing Schweiker v. McCure, 456 U.S. 188, 192 (1982). "To make this finding [of irregularity] the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Citizens, 401 U.S. at 416. "Agency action may not be set aside on the grounds that it is arbitrary and capricious if the action is rational, based on relevant factors, and within the agency's statutory authority." Frisby, 755 F.2d at 1055 (citations omitted). While the standard of review for agency actions is very narrow, Citizens, 401 U.S. at 416, and one of extreme deference toward the administrative agency decision, see United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131 [16 ELR 20086] (1985); and U.S. Environmental Protection Agency v. National Crushed Stone Ass'n, 449 U.S. 64, 83 [10 ELR 20924] (1980),²⁰ the presumption of regularity "does not . . . prevent a reviewing court from taking a probing, 'hard look' at the agency's action." Frisby, 755 F.2d at 1055, citing Citizens, 401 U.S. at 415-16.

"In applying that standard, the focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court." Camp v. Ritts, 411 U.S. 138, 142 (1973), accord Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 [15 ELR 20321] (1985); Horizons Intern, Inc. v. Baldrige, 811 F.2d 154, 162 (3d Cir. 1987). Where there is a strong showing of bad faith or improper behavior, however, reviewing courts may look beyond the administrative record. Citizens, 401 U.S. at 420. See also Horizons, 811 F.2d at 162-63 (discussing when courts may go beyond the administrative record). In this matter, the Court's review is confined to the more than satisfactory full record before it because there has been no showing of bad faith or an otherwise incomplete administrative record.²¹

B. USCOE Assertion of Jurisdiction Over Work Associated With the Ponds Constructed in Wetlands

Before reviewing whether the USCOE's ultimate decision to deny the ATF permit was violative of the standards set forth under 5 U.S.C. § 706(2), this Court must first resolve what it perceives to be the threshold issue of this controversy: Whether the USCOE had the requisite jurisdiction to compel Salt Pond to submit to the ATF permit process in connection with Salt Pond's landclearing and excavation activities. In its prior Opinion granting Salt Pond injunctive relief, this Court considered that significant jurisdictional question within the framework of the APA, concluding preliminary that "the Government was apparently without jurisdiction to require the Plaintiff to submit to the [ATF] permit process for excavation activities and accordingly could not legally compel the Plaintiff to restore the excavated ponds." D.I. 25 at 29. In short, this Court based its preliminary holding on the grounds that (1) under the statutory framework of the Clean Water Act and the accompanying regulations adopted under it, a permit was not required for the excavation or dredging of a pond located in section 404 wetlands; (2) the USCOE impermissibly relied on a Regulatory Guidance Letter ("RGL") as the basis for requiring that Salt Pond apply for an ATF permit for its excavation activities; and (3) the USCOE improperly expanded its jurisdictional authority through a misapplication of a procedural regulation. See generally id. at 26-40.

Notwithstanding these preliminary conclusions, the Court revisits this critical "jurisdictional" issue with the benefit of the complete record now before it. Pursuant to its responsibility to confine judicial review of the USCOE's actions to the record, the Court gives its preliminary determination no presumptive significance. Rather, within the boundaries of the full record, it independently reviews the "jurisdictional" arguments raised by the parties.

1. Statutory and Regulatory Authority as Basis for Jurisdiction: "Regulated Discharge" Under the CWA

The USCOE understandably takes the position that its assertion of CWA jurisdiction over work associated with Plaintiff's pond construction activities in wetlands is supported by the record and well within its statutory and regulatory authority. D.I. 37 at 18-21. Because of the complexity of the CWA, a summary of the statutory and regulatory provisions upon which the USCOE claims to have relied [24 ELR 21189] in compelling Salt Pond to apply for an ATF permit may be appropriate. See United States v. Sinclair Oil Co., 767 F. Supp. 200, 201 [21 ELR 21323] (D. Mont. 1990).

The CWA authorizes the USCOE to require a permit "for the discharge of dredged or fill material into the navigable waters at specified disposal sites." 33 U.S.C. § 1344(a) (emphasis added). "Dredged" material has been defined as that which is dredged or excavated from the waters of the United States. 33 C.F.R. § 323.2(c). The "discharge of dredged material" is defined in relevant part as:

any addition of dredged material into the waters of the United States. The term includes without limitation, the addition of dredged material to a specified discharge site located in the waters of the United States. . . . The term does not include de minimis incidental soil movement occurring during normal dredging operations.

33 C.F.R. § 323.2(d) (emphasis added).²²

By contrast, "fill material" means any material used for the primary purpose of replacing an aquatic area with dry and/or of changing the bottom elevation of a waterbody. 33 C.F.R. § 323.2(e). The term "discharge or fill material" refers to:

the addition of fill material into waters of the United States. The term generally includes, without limitation, the following activities: Placement of fill that is necessary for the construction of any structure in a water of the United States; the building of any structure or impoundment requiring rock, sand, dirt, or other material for its construction [including] . . . dams and dikes; . . . property protection and/or reclamation devices . . . [and] levees. . . . The term does not include plowing, cultivating, seeding, and harvesting for the production of food, fiber, and forest products.

33 C.F.R. § 323.2(f).

Whether it be "dredged material" or "fill material," the clear and unambiguous language of the CWA and its regulations makes it plain that fundamental to the exercise of USCOE jurisdiction is the existence of a "discharge." See Save Our Community v. U.S. Environmental Protection Agency, 971 F.2d 1155, 1163 [22 ELR 21532] (5th Cir. 1992) (in determining whether a violation under the CWA has occurred, the "inescapable conclusion" is that a discharge is critical and is in fact the requirement for statutory coverage). In the instant matter, the USCOE has characterized specific work conducted by Salt Pond in association with the construction of the ponds in wetlands as resulting in "discharges" of both dredged and fill material into waters of the United States. Specifically, the USCOE claims that the activities resulting in the regulated discharges involved mechanized landclearing and grading of vegetated wetlands both in association with and adjacent to pond construction²³ and york raking of wetlands.²⁴ The USCOE posits that it was the determination that these activities resulted in a discharge that authorized it to require Salt Pond to apply for the ATF permit under the CWA. Id. at 18, citing Vol. V at 93-95, 98 of the Record.²⁵

To support the conclusion that a regulated discharge had occurred thereby triggering its CWA jurisdiction, the USCOE points to what it has deemed "objective evidence" in the record. D.I. 39 at 7. In short, that evidence reveals that: (1) prior to issuing its cease and desist order in this matter, the on-site investigator for the USCOE reported that during his visit to the Salt Pond development site, "[s]tockpiled dredge[d] or fill material was [] observed in wetland areas." Vol. III at 17 (emphasis added);²⁶ (2) numerous personnel for the USCOE reviewed extensive aerial photography which indicated that significant amounts of "dredged and fill material had been placed into Federally regulated waters of the United States including wetlands. . . ." Id. at 26 (cease and desist letter); and (3) further review of field information based on site visits subsequent to the cease and desist order and information supplied by Salt Pond's consultant revealed the exact location of "where the unauthorized placement of dredged and fill material associated with road construction, golf course construction, grading, and clearing activities have occurred within the areas of Federal jurisdiction." Id. at 93 (emphasis added). Accordingly, in its considered and expert judgment, the USCOE determined that the photographs and site visits compellingly demonstrated that significant amounts of redeposition of wetland materials, discharge of fill material and stockpiling of woody vegetation in wetlands had occurred, see, e.g., Vol. III at 19(A-J), 30-33, 35(A)-(O), 64-76, and 90(C)-91(O), and that as a result, a section 404 permit was required.

Salt Pond attacks the USCOE's "redeposit" jurisdictional theme as "def[ying] rationality." D.I. 38 at 15. Salt Pond charges succinctly that the record evidence as detailed by its own consultant's statements concerning how work was accomplished at the site, indicates that there is no evidence that the excavated fill from the ponds was redeposited and allowed to remain permanently in wetlands and that no fill was brought from upland areas and deposited in wetlands. Id., citing, Miller affidavit, Vol. III at 20-25. First, Salt Pond claims that the USCOE has improperly relied on a "generalized" statement contradicting the consultant's claims which were spawned by an on-site visit from USCOE investigators²⁷ and that "the USCOE concedes that it has no independent information to contradict the information provided by Plaintiff's consultant regarding pond excavation." D.I. 38 at 16.²⁸

Next, in dismissing the USCOE's reliance on the photographic evidence, Salt Pond advances a factually intensive argument which basically reiterates its position that significant redeposition did not occur and that only a minor quantity of fill was temporarily stockpiled. In summary these factual contentions are that:

1. The USCOE "exaggerates" the Record by claiming that Plaintiff's pond-related work included entirely clearing such areas of vegetation with mechanized equipment, grading the areas to recontour the surfaces, and raking some areas in preparation for seed planting.

2. The photographs fail in most instances to show the wetlands boundary, but in any event establish that material was in fact excavated from the pond areas, with the excavated adjacent slide slopes extending to the surrounding ground elevations as evidenced by the bases of trees.

Citing Vol. III at 19(a), 19(c), 19(e-g), 35(c-d), 42, 46, 47, 90(c-f, h-k).

3. The only indication of the stockpiling of dredged and/or fill material was of a "minor" quantity, was never intended to remain in the wetland area, and was subsequently removed.

See Vol. III at 19(d).

4. There is no evidence that there was significant redeposition of wetland materials.

[24 ELR 21190]

5. The excavated material was removed to upland areas by using an excavator and off-road dump trucks to single-handle the material and that no material was brought from uplands and deposited in wetlands.

See Vol. III at 20-21, 36-37 (Salt Pond consultant Miller's description of how the landclearing and pond constructing work was accomplished); Vol. VI at 325 (description of work in ATF permit application).²⁹

6. There is no evidence in the Record that sloughs were completely or partially filled, that levelling of the wetland areas occurred, or that permanent changes in the elevation of wetlands occurred as a result of fill or redeposit of materials.

See Vol. III at 20, 37-38, 41 (various descriptions of how work was accomplished from consultant Miller).

7. As a result of Plaintiff's pond excavation and landclearing work in the limited wetlands area there has been no ascertainable recontouring to the land and the areas adjacent to the ponds which were landcleared during the construction have been protected by seeding and are in fact reverting back to their prior vegetative practice.

See Vol. V at 22. See generally D.I. 38 at 9-11, P4.³⁰

Salt Pond's basic contention throughout this process has been that no section 404 permit was required for its construction of the ponds in wetlands and that the Government's exercise of "permit" jurisdiction was improper under the standards of review established by the APA.³¹ It posits that its landclearing activities throughout this process constituted normal dredging operations, that its conduct should fall within the de minimis exemption espoused by the CWA's regulations and that the USCOE's "redeposit" theory is a "back-door" attempt to avoid the mandate of 33 C.F.R. § 323.2(d).³² Emphasizing the manner in which the disputed work was accomplished through statements in the record from its consultants, Salt Pond claims entitlement to the permit exemption because its "clear intent was to excavate ponds, and the result clearly reflects such intent and encompassed disturbance to the surface of the ground which is inherent in any excavation activity." D.I. 35 at 18.³³

Based on its review of the full record, the Court finds that Salt Pond has failed to meet its burden of demonstrating that the USCOE's initial jurisdictional determination in this matter was reached in a manner violative of section 706. Put simply, based on the record, there is simply no compelling evidence in the record that the Government acted improperly in its initial exercise of CWA jurisdiction.³⁴

As previously discussed, when reviewing the USCOE's actions here, the Court is obliged to give considerable deference to the Government's interpretation of the statute if it is reasonable and not in conflict with the intent of Congress. Riverside, 474 U.S. at 131.³⁵ Consonantly, the Court must also give great deference to the USCOE's findings of fact in support of that conclusion. See Orleans Audubon Soc'y v. Lee, 742 F.2d 901, 911 [15 ELR 20030] (5th Cir. 1984) (the court must give great deference to the agency's findings of fact). Moreover, "this Court may only determine whether the agency acted properly and it must not 'substitute its judgment for that of the agency.'" Gables By the Sea, Inc. v. Lee, 365 F. Supp. 826, 831 (S.D. Fla. 1973), quoting, Citizens, 401 U.S. at 416 (emphasis added). See also Davis Enterprises v. U.S. Environmental Protection Agency, 877 F.2d 1181, 1186 (3d Cir. 1989). Thus, while deciding whether a discharge occurred is crucial under the CWA, Save Our Community, 971 F.2d at 1165 (discussing cases), that decision is appropriately made by the USCOE and can only be disturbed if improper under the separate standards of review established by section 706 of the APA.

In reaching the decision that Salt Pond had engaged in activities constituting or resulting in a regulated discharge,³⁶ the Chief Engineer for the USCOE relied in part on the field officer's, i.e., on-site investigator's, observations and report describing the presence of discharged dredge and/or fill material. See Vol. III at 17-18, 26. In isolation, such reliance, without any concrete data indicating that the field officer was in error, does not render the USCOE decision arbitrary and capricious. Cf. Orleans, 742 F.2d at 911 (where the on-site investigator's report reflected the fact that he found no evidence that dredged or fill material had been deposited, the court found no basis to hold the Corps' decision that it did not have jurisdiction under section 404 to be arbitrary or capricious and thus the Corps' handling of the matter was not actionable under the APA).³⁷

More significantly, the USCOE decision to exercise its section 404 permit jurisdiction went beyond the simple observations of the field officer because it also relied upon photographs apparently detailing numerous activities which had resulted in discharges triggering its CWA permit jurisdiction. Notwithstanding Salt Pond's self-styled contentions in the record as to how its work was conducted in accordance with the CWA and its regulations so as to not require a [24 ELR 21191] section 404 permit, Salt Pond can point to no evidence in the record that even slightly indicates that the factual determinations reached by the Government were done arbitrarily or capriciously.³⁸ Rather, Salt Pond is asking the Court to simply adopt its version of the facts over that of the Government's through a weighing of the evidence and ultimately is asking this Court to substitute its judgment for that of the USCOE's. Accommodating Salt Pond's request would be improper. Cognizant of its obligation to show deference to the factual findings made by the agency, the Court holds that because the USCOE considered all of the relevant data and has articulated an explanation establishing a rational connection between the facts found and the choice made, the jurisdictional determination must not be disturbed. See Frisby, 755 F.2d at 1055.³⁹

The Court finds its holding in harmony with numerous cases from outside this Circuit cited by the USCOE treating discharges that have occurred during the course of clearing or excavation activities, all of which have held in one form or another that said discharges are subject to USCOE permit jurisdiction notwithstanding their connection with otherwise unregulated removal activities. See, e.g., Rybachek v. U.S. Environmental Protection Agency, 904 F.2d 1276 [20 ELR 20973] (9th Cir. 1990); United States v. M.C.C. of Florida, Inc., 772 F.2d 1501 [15 ELR 21091] (11th Cir. 1985); United States v. Huebner, 752 F.2d 1235 [15 ELR 20083] (7th Cir. 1985); Avoyelles, 715 F.2d 897; Sinclair Oil, 767 F. Supp. 200. The Court is not persuaded by Salt Pond's attempt to distinguish those cases based on narrow factual differences in the nature of the excavation activities. In short, the fact that Salt Pond's conduct may not completely parallel those activities found to be regulated discharges in the aforementioned cases is of little consequence.

Salt Pond's whole tack misses the mark because when broken down it ". . . reduces to the argument that [it] do[es] not agree with the agency's determination. . . ." Davis, 877 F.2d at 1186 (citations omitted). Basically, it is a request that this Court reach a more favorable decision than the USCOE without demonstrating where the decision reached by the USCOE violated administrative regulatory procedures. "While [the Court] may not have made the same decision as the [USCOE] . . .," id., the Court must defer to the USCOE's determination that it had jurisdiction to require a permit because, in light of the evidence it had before it as well as the prevailing trend in the law supporting the USCOE's exercise of jurisdiction for the exercise of the activities at issue here, the USCOE decision cannot be said to be arbitrary or capricious or otherwise improper under APA standards. Based on objective evidence, the USCOE determined that Salt Pond's activities extended well beyond excavation resulting in only de minimis, incidental fall back and was simply not "mere removal" of vegetation as declared by Salt Pond. Accordingly, the Court holds that the USCOE's exercise of jurisdiction over the disputed activities was proper.

2. RGL 90-5 as Basis for Jurisdiction

In support of its claim that the USCOE's jurisdictional permit determination was arbitrary, capricious, and not made in accordance with the procedures required by law, Salt Pond points to the Government's purported reliance upon Regulatory Guidance Letter ("RGL") 90-5 as the sole basis for exercising jurisdiction over pond construction. Salt Pond highlights that portion of the record where the USCOE declares that, "Based upon Regulatory Guidance Letter 90-5, it is the position of this office that all mechanized landclearing activities conducted in jurisdictional waters and wetlands on the subject site are regulated discharges under section 404." Vol. III at 28 (emphasis added). Salt Pond argues that the Government predicated its exercise of jurisdiction on Salt Pond's excavation activities based on an RGL not adopted under the procedures required by the APA.⁴⁰ Salt Pond suggests that it is highly implausible that the Government exercised any sort of "discretion" in its evaluation of whether the activities at issue constituted or resulted in regulated discharges. D.I. 38 at 20-22.

In contrast, the USCOE emphatically rejects the notion that its assertion of regulatory control over the wetland pond areas was predicated upon Salt Pond's excavation of the ponds, claiming that ". . ., the Record unequivocally indicates that the Corps never in the entire process sought to assert regulatory jurisdiction over excavation as such." D. I. 37 at 22.⁴¹ The USCOE argues at length that the text of RGL 90-5 indicates that it is a general statement of policy.⁴² It argues more significantly that it properly used RGL 90-5 as a nonbinding policy statement and did not commit error by using it as a "substantive" rule or regulation having the force of law. See D.I. 37 at 24-29; D.I. 39 at 10-12.

The Court need not engage in a lengthy discourse on the divergent views of the parties regarding the use or misuse of RGL 90-5. Assuming that the USCOE's reference to RGL 90-5 was inappropriate, Salt Pond still has not met its burden of showing that the USCOE violated section 706.⁴³ As detailed above (supra at Section III-C-1), the Court's full review of the record demonstrates that contrary to the position advanced by the Plaintiff, the USCOE did not arbitrarily or capriciously require Salt Pond to apply for the permit based solely on the USCOE's misapplication of RGL 90-5.

Thus, consistent with the mandate of the APA to consider the rule of prejudicial error,⁴⁴ the Court concludes that landclearing activity would be a regulated discharge if that activity involved the filling or leveling of wetlands. See Vol. VIII at 883-85.⁴⁵ Because the record [24 ELR 21192] supports the USCOE's assertion of authority over the disputed landclearing activities on the ground that significant redeposition and levelling indeed occurred, the Court agrees with the position advanced by the USCOE that any error involving the application of RGL 90-5 was not prejudicial and should not result in the disturbance of the Government's exercise of jurisdiction. D.I. 37 at 29 n.22 (citing cases); D.I. 39 at 12-13.⁴⁶ Accord, Russo Development Corp. v. Thomas, 735 F. Supp. 631, 639 [20 ELR 20290] (D.N.J. 1989) ("[i]f a proper basis for the [EPA's] decisions existed, then their reliance on certain inappropriate [materials] would be [irrelevant]").

C. Decision to Deny the After-the-Fact Permit

Having concluded that the exercise of jurisdiction by the USCOE requiring Salt Pond to apply for the ATF permit to be proper, the Court need not be detained long in reviewing whether the subsequent denial of that permit application was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The Court notes for the record that as far as it can discern, Salt Pond has not challenged the USCOE's substantive denial of the after-the-fact permit. Rather, Salt Pond's arguments have been confined to whether the USCOE had the requisite jurisdiction to compel Salt Pond to submit to the permitting process at all. However, to the extent that Salt Pond wishes to challenge the "merits" of the permit decision as being arbitrary and capricious, such a challenge must fail.

The record contains numerous adverse comments on the project. See, e.g., Vol. VIII at 821, 824-25, 826-31, 832-36, 837. Based on his evaluation of the total record which had been developed, the USCOE District Engineer detailed the probability of extensive adverse environmental effects as a result of the existing and proposed work. Id. at 925-36. Moreover, the USCOE avers in its findings that it gave thoughtful consideration to the material in the record provided by Plaintiff's experts commenting and rebutting many of the otherwise adverse comments in the record, id. at 923, and in fact analyzed those comments in detail prior to rendering its environmental findings. Id. at 897-904. After considering all the facts, the USCOE in its judgment determined that the public interest would best be served by denying the permit.⁴⁷ In short, the Court finds that the USCOE decision was based on a consideration of the relevant factors, there was no clear error of judgment, and the denial of the permit was a reasoned decision. The Court does not consider the conclusion arbitrary, capricious, an abuse of discretion, not in accordance with law, or in excess of statutory right. Accord, Buttrey v. United States, 690 F.2d 1170 [13 ELR 20085] (5th Cir. 1982); Gables, 365 F. Supp. 826.⁴⁸

D. Remedy: Pond Restoration

Salt Pond has argued that even if the Court finds that the USCOE was within its jurisdictional and regulatory authority to require and subsequently deny Salt Pond an ATF permit, the remedy for the alleged section 404 violations regarding improper redeposition of dredged and/or fill material cannot be the complete restoration of the excavated ponds. See D. I. 35 at 29-30. Close scrutiny of the Government's papers reveals no response to this position.

While the Court recognizes that ultimately there may be some merit to Salt Pond's position in so much as the USCOE would likely have to demonstrate a rational connection between the violations alleged and the requirement to completely fill all of the ponds, the issue itself is premature for the Court's resolution. At this point, all that is before the Court for review is the ATF permit decision rendered by the USCOE and the decision by the USCOE not to allow Salt Pond use of NP 26. Having properly denied Salt Pond the ATF permit, the USCOE has given Salt Pond the alternative of a "conditional permit" which, if not accepted by Salt Pond, would require Salt Pond to remedy certain existing conditions. If the parties are unable to negotiate an acceptable resolution, the USCOE may be compelled to bring an enforcement action under the appropriate statutory authority. Only at that point would it be appropriate for the Court to resolve the propriety of the USCOE's remedial plan. Any attempt to resolve the "restoration" issue at this point would constitute impermissible preenforcement judicial review. See, e.g., Southern Pines Associates v. United States, 912 F.2d 713, 715 [21 ELR 20033] (4th Cir. 1990); Hoffman Group, Inc. v. U.S. Environmental Protection Agency, 902 F.2d 567, 569 [20 ELR 20884] (7th Cir. 1990); Route 26 Land Development Ass'n v. United States, 753 F. Supp. 532, 536 [21 ELR 21199] (D. Del. 1990). Accordingly, the Court declines to determine this issue.

IV. Conclusion

For the reasons contained herein, the USCOE's decision with respect to Salt Pond's ATF permit application is upheld. Additionally, the decision to deny Salt Pond the use of NP 26 is also upheld. The Court finds no genuinely disputed issue of fact preventing it from concluding that the USCOE properly applied its section 404 jurisdiction, that it properly denied Salt Pond use of NP 26, and that it reasonably found that the project was contrary to the public interest. Salt Pond's motion for summary judgment, therefore, is denied and the Government's motion for summary judgment is granted.

Order

NOW, THEREFORE, for the reasons set forth in the Court's Memorandum Opinion issued this date,

IT IS ORDERED that:

1. Plaintiff's motion for summary judgment, Docket Item 33, is denied.

Defendants' motion for summary judgment, Docket Item 36, is granted.

1. The Court notes that much of the factual and statutory background described herein can also be located at the Court's prior opinion in this case. See C.A. No. 92-597-LON (D. Del. Feb. 19, 1993), Docket Item 25. Where relevant, citations have been altered herein to reflect their location in the eight-volume, certified administrative record (hereinafter "the record") which is the focus of the Court's review at this point in the proceedings. See "Scope of Review," infra at Section III-A. The record is cited herein by volume and page number.

2. "The Clean Water Act establishes a comprehensive program to restore and maintain the chemical, physical, and biological integrity of the waters of the United States." Route 26 Land Development Ass'n v. United States, 753 F. Supp. 532, 536 [21 ELR 21199] (D. Del. 1990), aff'd, 961 F.2d 1568 (3d Cir. 1992). See 33 U.S.C. § 1251. Under the terms of the Act "the discharge of any pollutant by any person" except in compliance with various provisions of the CWA is prohibited. 33 U.S.C. § 1311(a). The "discharge of a pollutant" is defined as any addition of any pollutant to navigable waters from any point source. 33 U.S.C. § 1362(12). The term "pollutant" is defined broadly to include "dredged soil," "biological materials," "heat," "rock," and "sand." 33 U.S.C. § 1362(6). Navigable waters is defined broadly to mean the waters of the United States including the territorial seas. 33 U.S.C. § 1362(7).

3. Before undertaking the land development project and, since then, the Plaintiff has relied heavily on the input of environmental consultant/expert, Charles C. Miller, a principal in the firm of Environmental Consulting Services Inc.

4. See 33 C.F.R. § 328.3(b) (a wetlands delineation report indicates a proposed wetlands jurisdictional boundary premised on the technical considerations encompassed by the definition of wetlands). "Wetlands" which are encompassed under the Government's jurisdictional authority as a navigable water of the United States (see 40 C.F.R. § 230.3(s)(7) are "areas that are inundated or saturated by surface groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas." 33 C.F.R. § 328.3(b).

There is a continued debate throughout the pleadings as to whether Salt Pond requested both a "geographic" and "activities" jurisdictional delineation (Salt Pond's position) or simply solicited a geographical delineation (USCOE's position). The record on this issue is best described as hazy. Because the Court finds that the resolution of the underlying dispute does not in any way turn on this sub-issue, the Court declines to make a conclusive finding on it.

5. When anyone violates the Clean Water Act before applying for a permit, the Government is authorized to issue the permit based on an "after-the-fact" permit application if initial corrective measures are completed. 33 C.F.R. § 326.3(e).

6. As stated by the Government in its ultimate findings/environmental assessment of the after-the-fact permit application, the Government had identified the unauthorized work already undertaken by Salt Pond as: The culverting and backfilling of a ditch; construction of a swale and adjacent grading; mechanized landclearing and grading of wetlands associated with and adjacent to the ponds; york raking of wetlands; and construction of five roads. Vol. VII at 918. The Government identified the environmentally adverse work still to be undertaken as the proposed installation by Salt Pond of four utility pipelines in three locations beneath the Bethany Loop Canal to provide water and sewer service to the development. Id. at 918-19.

7. Section 10 of the Rivers and Harbors Act, 33 U.S.C. § 403, provides in pertinent part:

. . . it shall not be lawful to excavate or fill, or in any manner to alter or modify the course, location, condition, or capacity of, any port, roadstead, haven, harbor, canal, lake, harbor of refuge, or inclosure within the limits of any breakwater, or of the channel of any navigable water of the United States, unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army prior to beginning the same.

Id. Activities subject to the requirements of section 10 may also be subject to other statutory requirements. 33 C.F.R. § 321.1.

8. On May 16, 1991, prior to the complete after-the-fact permit application being filed with the USCOE, the Plaintiff made a separate and distinct permit application to the Government for issuance of the Loop Canal permit. Vol. IV at 1-3.

9. In particular, the USCOE responded by a letter dated June 25, 1991, indicating that the USCOE did not respond to piecemeal permit applications in "[f]ederally regulated wetlands associated with a single and complete project." Vol. IV at 31. Rather, the Government required that the Loop Canal request be made part of a single application for all work requiring a permit that was being undertaken at the site. Id.

10. For example, in response to the public notice, the USCOE received public comments from biologist K. Mason Smawley of Gerald A. Donovan Associates, Inc., Vol. VII at 721 (April 8, 1992, letter from Smawley to the USCOE), and environmentalist Eileen C. Short. Id. at 722-23 (April 14, 1992, letter from Short to the USCOE). The USCOE also received comments from federal agencies such as the U.S. Department of the Interior, Fish and Wildlife Service, id. at 705.1-6, the Environmental Protection Agency, id. at 708-11, and the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, id. at 719. The USCOE also considered the comments and recommendations made on behalf of the Plaintiff in evaluating the permit application. Id. at 923.

11. Pursuant to section 320.4(a) "the Corps must undertake a public interest review of all permit applications. In deciding whether to issue a permit, the Corps must carefully balance the benefits which reasonably may be expected to accrue from issuance of permits against its reasonably foreseeable detriments." Route 26, 753 F. Supp. at 536 n.10 (citing 33 C.F.R. § 320.4(a)(1)). Factors included in the Government's evaluation of permit applications include conservation, economics, aesthetics, general environmental concerns, wetlands, flood hazards, floodplain values, land use, shore erosion and accretion, recreation, water supply and conservation, water quality, considerations of property ownership, and, in general, the needs and welfare of the people. See generally 33 C.F.R. § 320.

12. In its environmental findings denying the Plaintiff's after-the-fact permit application, the Government indicated that many of the activities described in that application, including the installation of the utility pipelines across the Loop Canal, "either individually or cumulatively, will not have a major adverse impact on the environment provided a mitigation plan is created . . ." and compliance is achieved with all of the special conditions including those relating to the full restoration of the ponds already excavated by the Plaintiff. Vol. VIII at 935 (emphasis added).

13. Specifically, in rejecting the request for severance, the Government indicated to the Plaintiff that:

separately approving the utility line crossings would lead to further project development which would, in turn, increase pollutant runoff into ponds and contribute to the deterioration of water quality. These adverse environmental impacts would be mitigated by restoration of the pond areas to their previous wetland condition. Therefore it would not be prudent to allow installation of the pipelines without first obtaining a commitment concerning restoration of the pond areas.

Vol. VIII at 1004 (letter from Lieutenant Colonel R. F. Sliwolski to Salt Pond attorney, Michael Parkowski).

14. In resolving the preliminary injunction motion, the Court was confronted with the question of whether under 5 U.S.C. § 705 of the Administrative Procedures Act ("APA" — section entitled "Relief Pending Review") extraordinary relief should be granted to the Plaintiff effectively postponing the Government's requirements for complete pond restoration prior to a full review of the record. That motion having been conclusively resolved, the Court now turns its attention to the exclusive final review of the Government's final agency action in this matter, limiting its scope of review solely to the material evidence found in the record. See "Scope of Review" discussed herein, infra, at Section III-A.

15. Additionally, as a matter of law, the Court dismissed Plaintiff's requestthat this Court enjoin the Government from future enforcement action and that the Court direct the Government to issue Plaintiff the Loop Canal permit on the grounds that it was beyond the scope of relief available to the Plaintiff at that stage of the proceedings. D.I. 25 at 47.

16. Nationwide Permits are general permits that have been created to significantly reduce the permitting hardships for activities involving little adverse environmental impact. See 33 U.S.C. § 1344(e). Nationwide Permits are published at 33 C.F.R. § 330.

In particular, Nationwide Permit #26 ("NP 26") (see 33 C.F.R. § 330.5(a)(26)(i), (ii)) could under certain circumstances allow up to 10 acres of filling in wetlands without Corps review. In pertinent part, NP 26 says that:

(a) Authorized activities. The following activities are hereby permitted provided they meet the conditions listed in paragraph (b) of this section [not at issue here] and, where required, comply with the notification procedures, of § 330.7. * * *

(26) Discharges of dredged or fill material into the waters listed in paragraphs (a)(26)(i) and (ii) of this section except those which cause the loss or substantial adverse modification of 10 acres or more of such waters of the United States, including wetlands. For discharges which causes the loss or substantial adverse modification of 1 to 10 acres of such waters, including wetlands, notification to the district engineer is required in accordance with § 330.7 of this Part.

(Emphasis added.)

The listed waters that apply for this permitting exemption in subsections (i) and (ii) are:

(i) Nontidal rivers, streams and their lakes, and impoundments, including adjacent wetlands, that are located above the headwaters.

(ii) Other nontidal waters of the United States, including adjacent wetlands, that are not part of a surface tributary system to interstate waters or navigable waters of the United States, i.e., isolated waters.

At issue here is whether the USCOE determination to disallow Salt Pond's use of NP 26 was violative of section 706 of the APA.

17. See D.I. 34 for a full exposition of the precise nature of the Plaintiff's demands for relief.

18. At this point, the Government has not brought an enforcement action pursuant to its statutory authority. Accordingly, the only issues for the Court's resolution revolve around the ATF permit decision and the decision concerning NP 26.

19. The Court notes that for purposes of its review here, only provisions (A), (C) and/or (D) of 5 U.S.C. § 706(2) are potentially applicable.

To the extent that the Plaintiff is suggesting that the "arbitrary and capricious" standard should not apply to the USCOE's initial determination that it possessed the necessary CWA jurisdiction to require Salt Pond to submit to the permitting process, D.I. 38 at 2, the Court rejects that position in so much as the initial decision to exercise jurisdiction was fundamental to its ultimate permit decision. Accordingly, as the administrative agency in this matter, the USCOE's actions must be reviewed under the standards enunciated under the APA. See, e.g., Avoyelles Sportsmen's League v. Marsh, 715 F.2d 897, 906 [13 ELR 20942] (5th Cir. 1983) (recognizing that the dispute was not whether the government had any jurisdiction over the tract of land, court held that agency's findings with respect to the extent of its jurisdiction must be reviewed under the same standard as any other administrative findings). See also Town of Norfolk v. U.S. Army Corps of Engineers, 968 F.2d 1438, 1445-46 [22 ELR 21337] (1st Cir. 1992); Friends of the Earth v. Hintz, 800 F.2d 822, 830-31 [17 ELR 20030] (9th Cir. 1986).

20. See also United States v. Sinclair Oil Co., 767 F. Supp. 200, 203 [21 ELR 21323] (D. Mont. 1990), quoting Riverside, 474 U.S. at 131 (citing cases).

21. Salt Pond makes a passing reference to the alleged incomplete nature of the record, D.I. 38 at n.47, but does not suggest that the Court go beyond the record to resolve the underlying issues.

22. Obviously, the USCOE contends that the challenged activities allegedly triggering its CWA jurisdiction fall under the "any addition" provision of the CWA's regulations (see infra at Section III B 1) while Salt Pond contends that the disputed activities fall under the "de minimis" exemption and that the USCOE's "redeposit" theme for the exercise of jurisdiction is without credence (see infra at Section III-B-2).

23. See Vol. V at 102; Vol. VII at 644-49, 653, 665 (action 3); and Vol. V at 102; Vol. VII at 65-52, 654-55, 663, 665 (action 4).

24. See Vol. V at 102; Vol. VII at 650, 656 (action 5).

25. The USCOE concluded that the total loss or disturbance of federally regulated waters and wetlands due to the numerous actions for which Salt Pond was required to apply for the ATF permit was approximately 18 acres with over 17 of those acres due to landclearing and grading in wetlands. D.I. 37 at 13, citing Vol. VII at 631.1.

26. Prior to issuing its cease and desist letter, the USCOE reviewed a letter from Salt Pond's consultant arguing that the work in wetlands did not require a permit. Vol. III at 20-25.

27. In full, the "generalized" statement from the on-site investigator for the USCOE, Kevin Faust, to which Salt Pond refers states that:

During the inspection it was noted that several wetland areas as identified on the above site plan have been cleared, dredged and graded to create several freshwater ponds. Stockpiled dredged or fill material was also observed in wetland areas (see photographs dated 8/12/91). Mr. Miller (Salt Pond's consultant) was informed all unauthorized fill material shall be removed immediately from areas of Federal jurisdiction. It was further noted that no erosion and sediment control was installed at the upland/wetland boundaries of construction.

Vol. III at 17. See also id. at 26, 93.

28. Salt Pond contends that the USCOE makes this "concession" in its opening/answering brief, D.I. 37 at 23 n.17. The Court does not see any such concession. To the contrary, the record evidence concerning regulated "discharges" is at the heart of the USCOE's position in support of its exercise of CWA jurisdiction and has in no form been conceded. To be sure, the USCOE claims that the record undeniably shows that the work in wetlands had resulted in discharges of dredged and/or fill material and footnoted as follows:

The fact that some of this area was also subject to excavation which created the ponds, and thus is now underneath the open-water surface of the ponds, makes it more difficult to determine the exact nature and scope of the work, but does not negate the observable amount or nature of soil movement and discharge that resulted from the clearing, grading and raking activities.

D.I. 37 at 23 n.17 (emphasis added).

29. Although never fully explained by the parties, the Court's understanding is that for excavated material to be outside the permitting authority of the USCOE, it must be "single-handled," i.e., that it must be removed immediately to an upland site with no redeposition in wetland.

30. Quite predictably, the USCOE takes issue with Salt Pond's "factual" characterization of the activities and their result. As an example, the USCOE contends that Salt Pond's persistence that it engaged in unregulated "single-handling" of excavated material is beyond credence in that it admits that the stockpiled fill "was never intended to remain in the wetland area and was subsequently removed." D.I. 39 at 3 (emphasis added). Further, the USCOE claims that the record clearly demonstrates that materials were stockpiled and otherwise redeposited. Id.

The USCOE points to the photographic evidence as demonstrating that a large stockpile of soil was deposited in wetlands adjacent to Pond O, Vol. III at 19(d), and that because the photographs were taken close to the time pond construction was completed, the USCOE was "reasonable" in its conclusion that the completed ponds were constructed similarly. D.I. 39 at 3 n.4. Additionally, the USCOE contends that the photographs show significant redeposition. Id. at 3 n.5 (citing various photographs in the record as showing redeposition from excavation and grading as well as massive leveling of wetlands adjacent to some of the constructed ponds).

Most relevant to the Court's review is the USCOE's position that in deciding that it had the requisite jurisdiction to require Salt Pond to submit to the permitting process, it rejected what it characterized as Salt Pond's self-serving representations in the record as to how the work in the pond area was performed. Instead, it chose to favor what it deemed the objective evidence. Id. at 7.

31. Salt Pond contends that when the landclearing and grading activities resulting in the vast majority of the disturbance to federally regulated waters and wetlands are factored out of the ATF permit process (because in its view no permit is required), all that remains is less than 1/4 acre of fill. D.I. 35 at 8. See supra, note 25, discussing the 18-acre total of disturbed wetlands. Salt Pond contends that at that point the significance of the USCOE's decision to deny Salt Pond the automatic one-acre fill exemption under NP 26 is magnified (see supra, note 17) because, if allowed, all that would remain for the USCOE's consideration in this process would be Salt Pond's section 10 RHA permit application for the Loop Canal utility crossings. Id. at 8-9.

32. 33 C.F.R. § 323.2(d) provides that the term discharge of dredged and/or fill material does not include de minimis incidental soil movement occurring during normal dredging operations.

33. Salt Pond raises its "intent" argument under the auspices of the following policy statement surrounding 33 C.F.R. § 323.2(d):

Section 404 clearly directs the Corps to regulate the discharge of dredged material, not the dredging itself. Dredging operations cannot be performed without some fallback. However, if we were to define this fallback as a "discharge of dredged material," we would, in effect, be adding the regulation of dredging to § 404 which we do not believe was the intent of Congress. We have consistently provided guidance to our field offices since 1977 that incidental fallback is not an activity regulated under § 404. The purpose of dredging is to remove material from the water, not to discharge material, into the water. Therefore, the fallback in a "normal dredging operation" is incidental to the dredging operation and de minimis when compared to the overall quantities removed. If there are tests involved, we believe that they should relate to the dredging operator's intent and the result of his dredging operations. If the intent is to remove material from the water and the results support this intent, then the activity must be considered as a "normal dredging operation" that is not subject to § 404.

D.I. 38 at 16-17 (emphasis added), quoting 52 Fed. Reg. 41210 (Preamble) (Nov. 13, 1986).

34. Salt Pond affirmatively contends that the compelling evidence in the record that the USCOE's exercise of section 404 permit jurisdiction was arbitrary, capricious, not done in accordance with law, and in total an abuse of discretion was its improper reliance upon Regulatory Guidance Letter 90-5. For a discussion of 90-5, see infra at Section III-B-2.

35. See supra, Section III-A.

36. As stated supra, those activities included the mechanized landclearing and grading of vegetated wetlands both in association with and adjacent to pond construction and the york raking of wetlands. The dredging of ponds is not a regulated activity.

37. While the court in Orleans did not expressly comment on the position taken by the USCOE Colonel "that the Corps would have exercised jurisdiction under the CWA if the on-site inspector had found evidence of the depositing of dredged or fill material," 742 F.2d at 910-11, the opinion strongly suggests that a factual finding of deposition of dredge and/or fill by an on-site investigator would be entitled to the same significant deference as a factual finding that no redeposition had occurred. Id. That court went so far as to say that even if the field officer's report was erroneous, relying upon it as a basis for the exercise of jurisdiction would not be actionable under the APA. Id.

Accordingly, this Court holds that in the absence of any compelling evidence to the contrary from Salt Pond, the fact that the USCOE investigator in the case at bar did find evidence of significant "redeposition," Vol. III at 17, that finding is entitled to significant deference and is properly regarded as support for the conclusion that the USCOE did not act arbitrarily or capriciously.

38. Salt Pond has raised the spector of bad faith on the part of the USCOE as to the entire permitting process. D.I. 13 at 48 (documentation by Plaintiff's consultant "rightfully portrays the USCOE in less than a favorable light in its protracted and deliberately harmful dealings with Plaintiff") (emphasis added). The Court finds Salt Pond's claim to be unfounded. While the record reveals some contentiousness between the parties arising out of their differing views as to the project's environmental impact, the reach of the USCOE's section 404 permit jurisdiction and the time lag involved in the administrative process, the Court's review of the record reveals no hint of bad faith on the part of the USCOE. Accord, Towns of Norfolk & Walpole v. U.S. Army Corps of Engineers, 772 F. Supp. 680, 691 n.9 [22 ELR 20282] (D. Mass. 1991), aff'd, 968 F.2d 1438 [22 ELR 21337] (1st Cir. 1992).

39. For these reasons, Salt Pond's position regarding its "intent" to excavate must also fail. That is, in so much as the USCOE relied upon relevant evidence in the record apparently contrary to the representations made by Salt Pond's consultants concerning its intent (as well as the end results of that intent), the USCOE cannot be said to have acted arbitrarily or capriciously or be found to have abused its discretion. Cf. Sinclair, 767 F. Supp. at 205 (defendant's intent in redepositing fill material is irrelevant to the Court's determination of liability under the Clean Water Act) (emphasis added) (cases omitted).

40. It is not disputed by the USCOE that RGL 90-5 has not been adopted as a substantive regulation under the standards set forth by the APA. See 5 U.S.C. § 553.

41. According to the USCOE, regulatory jurisdiction was predicated upon its determination that regulated "discharges" had occurred and that unrelated to its use of RGL 90-5 in this process, the exercise of jurisdiction was warranted. See supra, Section III-C-1, discussing the Government's contention that CWA jurisdiction was appropriate based on its determinations that a "discharge" had occurred.

42. RGL 90-5 states as a "general rule" that "mechanized landclearing activities in jurisdictional wetlands result in a redeposition of soil that is subject to regulation under section 404." Vol. VIII at 886-87. It further states that "some limited exceptions may occur," id., and that the "guidance" it provides should apply to property which has not been cleared, absent a demonstration from the owner that significant resources have already been committed toward landclearing based on prior guidance such that it would be inequitable to apply RGL 90-5. Id. at 887.

43. After reviewing the full administrative record, the Court affirmatively holds that the USCOE's reference to RGL 90-5 was indeed erroneous. Because the Court's full review of the record does not alter the Court's prior preliminary discussion concerning this issue, the Court need not duplicate its extensive prior discussion of the matter here. See D.I. 25 at 29-35.

Whether done so deliberately or inadvertently, the USCOE did in fact adopt a substantive "presumption" whereby landclearing activities were considered per se regulated discharges requiring a section 404 permit. See Vol. III at 28. In issuing the "Cease and Desist Letter," the USCOE responded to the concerns raised by Salt Pond's expert in connection with mechanized landclearing activities by matter-of-factly declaring that "[b]ased upon Regulatory Guidance Letter 90-5, it is the position of this office that all mechanized landclearing activities conducted in jurisdictional waters and wetlands on the subject site are regulated discharges under section 404." Id. (emphasis added).

Had this one statement in the over 1,000-page administrative record been the only evidence supporting the USCOE's exercise of jurisdiction, Salt Pond's argument would be compelling. However, the record evidence now before the Court shows that the USCOE did in fact make an individualized, discretionary review of the activities at issue in concluding that a regulated discharge had occurred and that the reference in the record to RGL 90-5 was not dispositive.

44. In applying the standards for judicial review of agency action, "the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error." 5 U.S.C. § 706.

45. Under RGL 85-4, relied on by Salt Pond throughout this entire process:

[e]ven if a landowner asserts that any filling, levelling, or burying would be merely incidental to his proposed landclearing, the district commander may still determine that those activities will be regulated under Section 404. Therefore, for the purpose of whether material moved, deposited, or redeposited during landclearing is "fill material" . . ., the primary purpose of any such activity will be determined by the district commander through his independent evaluation of the proposal. . . .

Vol. III at 883-84.

46. At no place in its responsive briefs did Salt Pond offer a rebuttal on the issue of prejudicial error.

47. Alternatively, as noted previously, Salt Pond could be granted a "conditional permit."

48. Similarly, the Court holds that Salt Pond's claim that the USCOE decision concerning NP 26 (and its automatic "fill exemption") was arbitrary and capricious is without merit as the USCOE considered the relevant definitions and regulatory standards in finding that NP 26 was inapplicable. In essence, after examining the wetlands, the soils, topography, and aerial photography, it was observed that the wetlands at the site were adjacent to Salt Pond, a tidally influenced water body. By regulatory definition, wetlands adjacent to the body are considered part of that body. As tidal waters, the wetlands at the development site were rationally deemed not eligible for the permit. See supra, note 16, describing what waters qualify for NP 26. As such, the Court need not undertake the detailed de novo review seemingly requested by Salt Pond with respect to this decision. Rather, because the USCOE has offered a rational reason for its decision having considered all the relevant factors, the USCOE decision to deny Salt Pond the use of this permit is upheld.