United States of America v. Acquest Transit LLC
Filing
202
DECISION AND ORDER. Defendants' request for a bifurcated Scheduling Order in this case is DENIED. The parties shall proceed in accordance with the courts Scheduling Order pursuant to Fed.R.Civ.P. 16(b) filed contemporaneously herewith. Signed by Hon. Leslie G. Foschio on 10/15/2015. (SDW)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
UNITED STATES OF AMERICA,
Plaintiff,
DECISION
and
ORDER
v.
ACQUEST TRANSIT LLC,
ACQUEST DEVELOPMENT, LLC,
MR. WILLIAM L. HUNTRESS,
09-CV-55S(F)
Defendants.
________________________________________
APPEARANCES:
LORETTA E. LYNCH
UNITED STATES ATTORNEY GENERAL
Attorney for Plaintiff and Consolidated Defendants
BRADLEY L. LEVINE, SCOTT BAUER and
SIMI BHAT, Trial Attorneys
Environmental and Natural Resources Division
U.S. Department of Justice
601 D Street, NW
Washington, DC 20530-0001
SNELL & WILMER, LLP
Attorneys for Defendants
BRADLEY R. CAHOON, of Counsel
15 W. South Temple, Suite 1200
Salt Lake City, Utah 84101
RUPP BAASE PFALZGRAF CUNNINGHAM LLC
Attorneys for Defendants
MATTHEW D. MILLER, of Counsel
424 Main Street, Suite 1600
Buffalo, New York 14202
In this civil enforcement action, Plaintiff alleges violations of Sections 402 and
404 of the Clean Water Act (“CWA”) which Plaintiff claims occurred on land owned by
Defendants located in the Town of Amherst, New York based on dumping of fill and
releasing polluted storm water on the subject land asserted by Plaintiff to be a wetland
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subject to the CWA. Prior to initiating this action, the United States Environmental
Protection Agency (“EPA”) determined Defendants’ property included wetlands and that
Defendants’ filling, grading, and excavation activities on the property without a permit
from the EPA warranted the agency issuing a cease and desist order.
Because of the pendency of a related criminal indictment charging Defendant
Huntress with obstruction of justice and related offenses, see 13-CR-199S, the instant
case has been repeatedly stayed until Judge Skretny’s recent order, Doc. No. 196,
vacating the stay, and remitting the matter to the undersigned to supervise pretrial
discovery that may feasibly be conducted prior to the commencement of the criminal
case, presently scheduled to begin January 16, 2016, in accordance with Judge
Skretny’s referral order filed June 10, 2010 (Doc. No. 44).
In accordance with Judge Skretny’s direction, the undersigned scheduled a
pretrial conference for September 9, 2015 (Doc. No. 197). At the conference the parties
informed the court that (1) limits on papers discovery and depositions had been
considered by the parties but not agreed to, and (2) while the parties were in general
agreement with respect to the scheduling of further discovery in the matter, the parties
were in disagreement as to whether such discovery should be bifurcated. Specifically,
Plaintiff urged the court to direct that discovery proceed on all issues rather than on a
bifurcated basis with the issue of whether the Defendants’ property at issue is a wetland
subject to Plaintiff’s jurisdiction for enforcement under the CWA to be litigated first as
Defendants request.
At the hearing, Defendants also asserted that in accordance with a recently
decided case, Hawkes Co. Inc. v. U.S. Army Corps of Engineers, 782 F.3d 994 (8th Cir.
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2015), pet. for cert. filed Sept. 8, 2012 No. 15-290 (“Hawkes”), Defendants were entitled
to such bifurcation. Because of Defendants’ contention in reliance on Hawkes, the court
reserved decision on whether and how to schedule further proceedings in the matter,
and directed the parties to submit memoranda of law the issue raised by Defendants
(Doc. No. 199). In accordance with the court’s request, Defendants filed, on September
14, 2015, their Memorandum in Support of Defendants’ Proposed Discovery Sequence
(Doc. No. 200) (“Defendants’ Memorandum”); Plaintiff filed, on September 21, 2015, the
United States’ Response To Defendants’ Memorandum In Support Of Defendants’
Proposed Discovery Sequence (Doc. No. 201) (“Plaintiffs’ Memorandum”). Oral
argument on Defendants’ bifurcation request was deemed unnecessary.
Upon review, the court finds Hawkes distinguishable in material respects from
the instant matter and thus not controlling on Defendants’ bifurcation request. As
Defendants note, Defendants’ Memorandum at 3-4, in Hawkes the issue was whether a
“jurisdictional determination” made by the U.S. Army Corps of Engineers (“Corps”) that
plaintiff’s proposed peat mining would not be approved because the land to be mined by
plaintiff were wetlands and, because of its proximity to the Red River of the North in that
area of Minnesota, were U.S. waters subject to the Corps’ regulatory authority under the
CWA, and, accordingly, the Corps refused to issue plaintiff a permit to engage in peat
mining on the property. Defendants’ Memorandum at 14. In response to the Corps’
refusal, Plaintiff sued for judicial review of the jurisdictional determination under the
Administrative Procedure Act (“APA”). The District Court dismissed on the ground that
the Corps’ decision was not a final agency decision and, as such, was not ripe for
review under the APA. Id. The Eighth Circuit reversed finding the Corps’ jurisdictional
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determination was final for APA purposes because otherwise the plaintiff as an
aggrieved party would have no effective recourse thereby seriously infringing upon
plaintiff’s property interest, plaintiff’s option to purchase the land upon which plaintiff
intended to carry on plaintiff’s peat mining business. Defendants’ Memorandum at 1516 quoting Hawkes, 782 F.3d at 1001-1002. The Eighth Circuit therefore emphasized
that unless judicial review of the Corps’ assertion of authority over the putative mining
property as a wetland protected by the CWA were subject to prompt judicial review,
plaintiff could be deprived of any such review whatsoever. Id.
Of course, as Plaintiff points out, Plaintiff’s Memorandum at 4, no such supposed
fundamental unfairness to Defendants will occur here as Plaintiff’s instant enforcement
action includes the very issue of whether the CWA reaches Defendants’ property as
Plaintiff has alleged and Defendants vigorously dispute. Moreover, Defendants have
commenced an APA action seeking judicial review of the EPA’s determinations of CWA
jurisdiction over Defendants’ property prerequisite to the EPA’s cease and desist orders
directed to Defendants, Defendants’ Memorandum Exhs. C & D, which, because of
Defendants failure to comply, led directly to the instant action. See Huntress, et al. v.
Mugdan, et al., 12-CV-559S. Defendants’ APA action remains pending before Judge
Skretny. Thus, while the court is sensitive to Defendants’ desire for an early
determination of the so-called jurisdictional issue in this case, Defendants’ reliance on
Hawkes for Defendants’ proposed bifurcated discovery plan is misplaced. Further, as
Plaintiff points out, the court previously rejected such bifurcation in a similar case
involving another parcel owned by a related entity, United States v. Acquest Wehrle,
LLC, 09-CV-637C(F), see Decision and Order dated September 23, 2010, Doc. No. 54,
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in order to avoid practical inefficiencies likely to arise from inevitable discovery disputes
based on potentially complicated relevancy issues. Defendants’ Memorandum at 4.
Finally, although the proposed discovery plans by the parties are identical, the parties
indicate the court’s order should exclude any deposition of Defendant Huntress,
Defendants’ Memorandum at 19, and “party witnesses.” See Doc. No. 201-1,
Declaration of Simi Bhat, Trial Attorney, Environmental Defense Section, U.S.
Department of Justice ¶ 5. However, as Defendant Huntress has, in support of
Defendants’ motion to lift the stay in this case, waived his Fifth Amendment privilege,
see Declaration of Matthew D. Miller, Esq. In Support of Defendants’ Second Motion to
Vacate the Stay (Doc. No. 189-1) ¶ 25, no such limitation is necessary as to Huntress.
Assertions of Fifth Amendment privilege in connection with any depositions of other
witnesses, if any, will be addressed by the court when and if raised by a witness upon
motion.
CONCLUSION
Based on the foregoing, Defendants’ request for a bifurcated Scheduling Order is
this case is DENIED. The parties shall proceed in accordance with the court’s
Scheduling Order pursuant to Fed.R.Civ.P. 16(b) filed contemporaneously herewith.
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: October 15, 2015
Buffalo, New York
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