Gulf Restoration Network v. Hancock County Development, LLC et al

Filing 54

ORDER denying 36 Motion to Dismiss; denying 36 Motion to Stay; denying 36 Motion for Protective Order; finding as moot 51 Motion Consider Supplemental Information Signed by District Judge Louis Guirola, Jr on 11/16/09 (Guirola, Louis)

U N I T E D STATES DISTRICT COURT S O U T H E R N DISTRICT OF MISSISSIPPI S O U T H E R N DIVISION

G U L F RESTORATION NETWORK V ERSUS H A N C O C K COUNTY DEVELOPMENT, LLC

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P L A I N T I FF C A U S E NO. 1:08cv186-LG-RHW

DEFENDANT

O R D E R DENYING SECOND MOTION TO DISMISS B E F O R E THE COURT is Defendant Hancock County Land, LLC, f/k/a Hancock County D e v e l o p m e n t , LLC's second [36] Motion to Dismiss pursuant to Federal Rule of Civil Procedure 1 2 (b )(6 ). Gulf Restoration Network initiated this citizen lawsuit under the Clean Water Act for a lle ge d violations related to a construction project on Hancock's property. Hancock argues the C o m p l a in t fails to state a claim, because the United States Army Corps of Engineers was d i lige n t ly investigating this case prior to Gulf Restoration's notice of intent to sue. The Court has c o n s id e re d the parties' submissions 1 and relevant legal authority. The motion is denied. F A C T S AND PROCEDURAL HISTORY A c co rd in g to the Complaint, Gulf Restoration is an environmental group dedicated to the p re s e rv a tio n of the waters of the Gulf Coast region. Gulf Restoration has members who live on a n d own property adjacent to Hancock's property. Hancock is alleged to own property that in c lu d e s wetlands in and near Bay St. Louis, Mississippi. "On or before May 7, 2007, [Hancock] b e ga n clearing, dredging, and filling wetlands, and constructing ditches, berms, dams, canals, and

The Court also considered Gulf Restoration's [51] Motion for Consideration of S u p p l e m e n t a l Information Regarding Defendant's Motion to Dismiss, as well as Hancock's re s p o n s e .

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s e v e ra l miles of road on approximately 700 acres of the Wetlands property." (Compl. at 7 (¶30)). In addition, Hancock allegedly caused storm water and fill material to be deposited into Bayou M a ro n . All of this work is alleged to have been performed without required permits. On November 2, the United States Army Corps of Engineers issued a Notice of Violation to Hancock. The violations cited were for the unauthorized filling and dredging of wetlands a s s o c ia te d with the construction project. The notice ordered Hancock to halt its construction a c tiv i tie s , asked for information to help the Corps decide how to resolve the matter, and stated t h a t the Corps was sending the letter to certain state and federal agencies for their input on how to r e s o l v e the violations. On January 10, 2008, Gulf Restoration issued its notice of intent to sue to H a n c o c k for these same violations plus for alleged unauthorized dumping of storm water into the w e tla n d s . The Corps turned the matter over to the Environmental Protection Agency. On the s a m e day as Gulf Restoration's letter, the EPA wrote to Hancock that the EPA was investigating o n ly the filling and dredging allegations. The EPA requested information and directed Hancock to resources on voluntary compliance. On May 8, Gulf Restoration filed the instant suit alleging th a t Hancock engaged in unauthorized filling and dredging of wetlands and also unauthorized s to rm water runoff into wetlands. DISCUSSION S TA N D A R D FOR MOTION FOR SUMMARY JUDGMENT PURSUANT TO RULE 56: B e ca u s e the Court was presented and has considered matters outside the pleadings, the C o u rt converts the motion to a motion for summary judgment. FED. R. CIV. P. 12(d). A motion fo r summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, a n d admissions on file, together with the affidavits, if any, show that there is no genuine issue as

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to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R . CIV. P. 56. To make this determination, the Court must view the evidence in the light most fa v o ra b le to the non-moving party. Abarca v. Metro. Transit. Auth., 404 F.3d 938, 940 (5th Cir. 2 0 0 5 ). A "material fact" is one that might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine dispute about a material fa c t exists when the evidence is such that a reasonable jury could return a verdict for the n o n -m o v in g party. Id. The party that bears the burden of proof at trial also bears the burden of p ro o f at the summary judgment stage. Celotex Corp. v. Catrett, 477 U.S. 317, 322-26 (1986). "[W]hen a motion for summary judgment is made and supported . . . an adverse party may not re s t upon . . . mere allegations or denials . . . but . . . must set forth specific facts showing that th e r e is a genuine issue for trial." FED. R. CIV. P. 56(e). T h e Clean Water Act provides that citizens may sue alleged violators for injunctive and c iv il penalty relief. 33 U.S.C. § 1365(a). There are two bars to these citizen suits, however. Lockett v. Envtl. Prot. Agency, 319 F.3d 678, 683 (5th Cir. 2003). They are found in Sections 1 3 6 5 (b )(1 )(B ) and 1319(g)(6). Id. Hancock argues the Corps was diligently investigating Gulf R e s to r a tio n 's allegations before it sent its pre-suit notice; therefore, the case must be dismissed p u rs u a n t to both 33 U.S.C. §§ 1365(b)(1)(B), 1319(g)(6). Specifically, Hancock points to the C o r p s 's November 2, 2007, Notice of Violation as the commencement of an "enforcement a c t i o n ." Gulf Restoration responds that (1) no federal lawsuit has been filed in court, (2) there h a v e been no administrative orders assessing penalties, (3) there have been no administrative a c t i o n s seeking civil penalties, and in the alternative, (4) Section 1319 would only bar Gulf R e s to ra tio n 's civil penalties claim (5) for only those violations that the Government addressed.

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T h e Court examines each potential bar in turn. SECTION 1365(B)(1)(B) " E x c e p t as provided in subsection (b) of this section and section [1319(g)(6)], any citizen m a y commence a civil action . . . against any person . . . who is alleged to be in violation" of the C l e a n Water Act. 33 U.S.C. § 1365(a)(1). Subsection b provides in pertinent part: No action may be commenced under subsection (a)(1) of this section . . . if the A d m in i s tra to r or State has commenced and is diligently prosecuting a civil or c r i m i n a l action in a court of the United States, or a State to require compliance . . . but in any such action in a court of the United States any citizen may intervene a s a matter of right. 3 3 U.S.C. § 1365(b)(1)(B) (emphasis added). The plain language of this statute only bars citizen la w s u its when the EPA or State government has brought a civil or criminal lawsuit in federal or s ta te court. Indeed, "the plain meaning of `court of the United States or a State' excludes a d m in i s tra tiv e actions." Texans United for a Safe Econ. Educ. Fund v. Crown Cent. Petroleum C o r p ., 207 F.3d 789, 795 (5th Cir. 2000). Thus, the bar presented by Section 1365(b)(1)(B) "is n o t applicable [where] neither the EPA nor the [State] has brought an action in either state or fe d e r a l court." Lockett, 319 F.3d at 683. It is undisputed that neither the Administrator of the EPA nor the State of Mississippi, has c o m m e n c e d a civil or criminal action in court concerning the alleged violations by Hancock. Therefore, Section 1365(b)(1)(B) does not bar this citizen lawsuit. SECTION 1319(G)(6) S e c tio n 1319(g)(1) provides that the EPA Administrator and the Secretary of the Army C o r p s of Engineers may assess administrative civil penalties against polluters. Subsections 2-5 s e t forth those administrative procedures, which include notice to the offender and the public, the

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righ t to be heard, and judicial review of the administrative order. Subsection 6 provides: ( 6 ) Effect of order. (A) Limitation on actions under other sections. Action taken by the A d m in is tra to r or the Secretary, as the case may be, under this subsection [Section 1 3 1 9 ( g) ] shall not affect or limit the Administrator's or Secretary's authority to e n fo rc e any provision of this Act [33 U.S.C. §§ 1251 et seq.]; except that any v iolatio n -(i) with respect to which the Administrator or the Secretary has commenced a n d is diligently prosecuting an action under this subsection, (ii) with respect to which a State has commenced and is diligently p ro se c u tin g an action under a State law comparable to this subsection, or (iii) for which the Administrator, the Secretary, or the State has issued a final o r d e r not subject to further judicial review and the violator has paid a penalty a s s e s s e d under this subsection, or such comparable State law, as the case may be, shall not be the subject of a civil penalty action under subsection (d) of this s e c ti o n or section 311(b) or section 505 of this Act [33 U.S.C. § 1321(b) or 1365]. (B) Applicability of limitation with respect to citizen suits. The limitations c o n ta in e d in subparagraph (A) on civil penalty actions under section 505 of this A c t [33 U.S.C. § 1365] shall not apply with respect to any violation for which-(i) a civil action under section 505(a)(1) of this Act [33 U.S.C. § 1365(a)(1)] h a s been filed prior to commencement of an action under this subsection, or (ii) notice of an alleged violation of section 505(a)(1) of this Act [33 U.S.C. § 1365(a)(1)] has been given in accordance with section 505(b)(1)(A) [33 U.S.C. § 1365(b)(1)(A)] prior to commencement of an action under this subsection and a n action under section 505(a)(1) [33 U.S.C. § 1365(a)(1)] with respect to such a lle ge d violation is filed before the 120th day after the date on which such notice is given.

3 3 U.S.C. § 1319(g)(6) (emphasis added). In other words, an administrative action by the EPA or C o r p s for civil penalties, as to a specific violation, may preclude a citizen's susbequent lawsuit fo r civil penalties on that same violation. A citizen would still be free to seek injunctive relief. Thus, the bar found in Section 1319(g)(6) is narrower than the former, because it does not bar the e n tire citizen suit. Id.; Paper, Allied-Indus., Chem. & Energy Workers Int'l Union v. Cont'l C a r b o n Co., 428 F.3d 1285, 1297 (10th Cir. 2005); Atl. States Legal Found., Inc. v. Hamelin, 1 8 2 F. Supp. 2d 235, 248 (N.D.N.Y. 2001); Sierra Club v. Hyundai Am., Inc., 23 F. Supp. 2d

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1 1 7 7 , 1180 (D.Or. 1997); United States v. Smithfield Foods, 965 F. Supp. 769, 791 (E.D.Va. 1 9 9 7 ) ; Cal. Sportsfishing Prot. Alliance v. City of W. Sacremento, 905 F. Supp. 792, 807 (E.D. C a l . 1995); Coal. for a Liveable W. Side v. N.Y. City Dep't of Envtl. Prot., 830 F. Supp. 194, 196 ( S . D .N .Y . 1993); Natural Res. Def. Council, Inc. v. Fina Oil & Chem. Co., 806 F. Supp. 145, 146 (E .D . Tex. 1992) ("precluded as to penalties"). It only bars a citizen from seeking civil penalties. 33 U.S.C. § 1319(g)(6). See, e.g., Paper, 428 F.3d at 1297. Section 1319(g)(6) repeatedly refers t o a limitation on "civil penalty actions" in a subsection that discusses administrative civil p e n a ltie s . This contrasts with Section 1365(b)(1)(B)'s language referring only to "actions." Additionally, the 1319(g)(6) bar is narrower, because it only applies when the EPA or C o r p s has acted pursuant to Section 1319(g), i.e., "under this subsection." Even then, the citizen m a y avoid the bar if he either filed the lawsuit or issued the pre-suit notice before the EPA or C o rp s 's administrative actions. Gulf Restoration first argues that neither the Corps nor the EPA acted pursuant to Section 1 3 1 9 (g). As previously discussed, this preclusion only applies when the Corps or EPA have a c te d "under this subsection," i.e., subsection g of Section 1319. Natural Resources, 806 F. S u p p . at 146. See also, Wash. Pub. Interest Research Group v. Pendleton Woolen Mills, 11 F.3d 8 8 3 , 885 (9th Cir. 1993); Friends of Santa Fe County v. Lac Minerals, Inc., 892 F. Supp. 1333, 1 3 4 7 (D.N.M. 1995); Sierra Club v. Colo. Ref. Co., 852 F. Supp. 1476, 1485 (D. Colo. 1994); O r a n g e Env't, Inc. v. County of Orange, 811 F. Supp. 926, 932 (S.D.N.Y. 1993); Ark. Wildlife F e d 'n v. Bekaert Corp., 791 F. Supp. 769, 775 (W.D. Ark. 1992). This subsection provides the a d m in is tra tiv e procedures through which either the Corps or EPA may assess civil penalties. Thus, preclusion "applies only when the E.P.A. [or Corps] has brought an action `under this

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s u b s e c t io n ,' that is, an action that assesses administrative penalties under subsection 1319(g), w ith public notice and all the other requirements contained therein." Natural Resources, 806 F. S u p p . at 146. Moreover, the EPA's administrative civil penalty action "commences upon either th e filing of an administrative complaint or the issuance of a finalized consent agreement." Or. S ta te Pub. Interest Research Group, Inc. v. Pac. Coast Seafoods Co., 341 F. Supp. 2d 1170, 1175 ( D .O r . 2004) (citing 40 C.F.R. § 22.13). A reservation of rights to bring an administrative civil p e n a lty action does not suffice as commencement or diligent prosecution. Save Our Bays & B e a c h e s v. City of Honolulu, 904 F. Supp. 1098, 1128 (D. Haw. 1994). For example, in Natural Resources, 806 F. Supp. at 146, the court held that an EPA c o m p l ia n c e order issued under Section 1319(a) could not preclude an action for civil penalties, b e c a u s e the order was not an order assessing administrative penalties under subsection g. Given s u b s e c tio n g's "explicit requirements . . . as to what constitutes an action under it," a compliance o rd e r did not qualify. Id. In the instant case Hancock relies on the Corps's Notice of Violation, dated November 2, 2 0 0 7 , as the commencement of an administrative civil penalty action by the Corps. It states, in p art: T h is is a Notice of Violation involving the unauthorized discharge of dredged a n d /o r fill material into waters of the United States including wetlands. The u n a u t h o riz e d work consists of the construction of roadways, berms, ditches, c a n a l s , and mechanized land clearing. . . . We are currently conducting an in v e s tiga tio n to determine the appropriate course of action to be taken to resolve th i s violation. [Certain information was requested]. Until such time as this matter is resolved, no further work is to be performed. . . . You are advised that s u b s ta n tia l penalties are available for conducting work in waters of the U.S., in c lu d in g wetlands, without the necessary DA authorization. . . . Section 309 [33 U .S .C . 1319] of the Clean Water Act provides penalties, including fines of up to $ 5 0 ,0 0 0 per day or imprisonment for up to three years, or both for any person who

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k n o w in gly violates Section 301 of the Clean Water Act. . . . We are furnishing c o p ie s of this letter to [the Mississippi Department of Marine Resources, M is s is s ip p i Department of Environmental Quality, City of Bay St. Louis, Hancock C o u n t y, and EPA] in order to solicit their views concerning resolution of this v io la tio n . (D e f.'s 2d Mot. Dismiss Ex. A) (emphasis added). This indicates that the Corps was not c o m m e n c in g a 1319(g) administrative civil penalty action. Instead, it was requesting information " to determine" how it wanted to "resolve" the case, as well as input from the EPA and other a g e n c i e s on a resolution. Further, the letter specifically referenced the criminal penalties found in s u b s e c t io n c. 33 U.S.C. § 1319(c)(2). These, of course, are not recoverable in a mere a d m in is tra tiv e action pursuant to subsection g. Id. In fact, the Corps's own regulations support this view. They state that, when the Corps d e te c ts a violation, the Corps should issue a cease and desist order "pending resolution" of the m a tte r, and the Corps should request information "to determine what course of action [to] pursue i n resolving the violation." 33 C.F.R. § 326.3(c)(3). The district engineer of the Corps should th e n "solicit the views" of other agencies "to facilitate his decision on what initial corrective m e a s u r e s are required." 33 C.F.R. § 326.3(d). If initial corrective measures substantially e lim i n a te current and future impacts from the unauthorized pollution, "further enforcement action s h o u l d normally be unnecessary." Id. He may then "accept an after-the-fact permit application." 33 C.F.R. § 326.3(e). It is the Corps's policy to "normally coordinate with EPA to determine the m o s t effective and efficient manner by which resolution of a section 404 violation can be a c h ie v e d ." 33 C.F.R. § 326.2. In other words, administrative civil penalty actions under Section 1 3 1 9 (g) are not the only enforcement actions used by the Corps. The Corps first issues a cease a n d desist order and then, along with at least the EPA, it decides whether only initial corrective

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m e as u re s are required, whether an after-the-fact permit may be issued, and whether the EPA or its e lf will handle further action including "appropriate legal enforcement actions." 33 C.F.R. § 3 2 6 .3 (g). This is not confined to administrative civil penalty actions. 33 U.S.C. §§ 1319, 1365. As the letter and regulations indicate, the Corps had not yet decided whether or not to instigate an a d m in is tra tiv e civil penalty action. There is no evidence of any further action by the Corps. If it had decided to institute a d m in i s tra tiv e civil penalty proceedings, it would have had to implement those procedures set fo rth in Section 1319(g)(2-5), which includes notice of the proposed civil penalties to Hancock. 33 U.S.C. § 1319(g)(2); Natural Resources, 806 F. Supp. at 146. It is undisputed that the Corps d i d not do so. Further, it is undisputed that the Corps turned all enforcement decisions over to th e EPA. It may only commence a civil administrative civil penalty action by filing an a d m i n i s t r a t i v e complaint. There is no evidence that the EPA has ever done so. Instead, it only re q u e s te d information to "aid . . . in reaching an appropriate enforcement resolution." (Def.'s 2d M o t . Dismiss Ex. C at 1). Because no administrative action for civil penalties was ever c o m m e n c e d by the Corps or EPA, the Section 1319(g)(6) bar is inapplicable. IT IS THEREFORE ORDERED AND ADJUDGED that for the reasons stated above D e fe n d a n t Hancock County Land, LLC, f/k/a Hancock County Development, LLC's second [36] M o tio n to Dismiss should be and is hereby DENIED. S O ORDERED AND ADJUDGED this the 16 th day of November, 2009.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR. U N IT E D STATES DISTRICT JUDGE

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