Sierra Club v. United States Army Corps of Engineers, 2005 WL 2090028 (D.N.J. 2005)

By Robert J. Uram and Ella Foley-Gannon

This case involved a challenge to a Corps of Engineers 404 permit to allow the filling of 7.69 acres of wetlands for a redevelopment project within the Meadowlands Sports Complex in New Jersey. The district court denied plaintiff environmental groups’ preliminary injunction claim that the Corps had defined the project purpose in improperly narrow terms thereby precluding any practicable alternatives determination. Specifically, plaintiffs contended that the Corps substituted a project description for a basic project purpose.

The Corps defined the “overall project purpose” as follows:

[R]edevelop the Continental Airlines Arena site (allowing for continued use of the Arena Building), as envisioned and authorized by the NJSEA [New Jersey Sports and Exposition Authority]. . . .

The overall project involves construction of a mixed-use commercial Entertainment/Recreation Center development . . . .

Relying on the 404(b)(1) Guidelines, which define a practicable alternative as an alternative that “is available and capable of being done after taking into consideration cost, existing technology, and logistics in light of overall project purposes,” the court reasoned that the overall project purpose must be identified by the Corps as a predicate to the Corps’ alternatives analysis, and that the Corps is not restricted to the definition of project purpose included in a permit application. Instead, independent review and definition is required by the Corps while taking into account the objectives of the applicant’s project.

The court concluded that the Corps definition’s focus on the Continental Airlines Arena site was consistent with both case law and Corps guidance. The court cited Sylvester v. U.S. Army Corps of Engineers, 882 F.2d 407 (9th Cir. 1989), upholding a project purpose definition that restricted construction of a golf course to the site of a destination resort, limiting consideration of off-site alternatives not contiguous to the rest of the resort complex. The court also cited Northwest Environmental Defense Center v. Wood, 947 F.Supp. 1371, 1377 (D.Or. 1996), which concluded that a project purpose to develop a semiconductor plant in the Eugene [Oregon] area was “neither arbitrary nor capricious in light of ‘substantial evidence’ in the administrative record regarding the applicant’s ‘legitimate economic reasons for choosing to construct its project in Eugene.'” The court also noted that Army Corps guidance explicitly supports the reasonableness of the Corps’ site-specific definitional approach under circumstances where the site is essential to the project’s purpose, which state that “[s]ome projects may be so site-specific … that no off-site alternative could be practicable. In such cases the alternatives analysis may appropriately be limited to on-site options only.” (U.S.A.C.O.E., Regulatory Guidance Letter 93-02: Guidance on Flexibility of the 404(b)(1) Guidelines and Mitigation Banking, § 3(a)(ii) [Aug. 23, 1993]). While plaintiffs contended that the Corps’ limitation of the project purpose to redevelopment of the Continental Airlines Arena site constituted reversible error because it precluded consideration of off-site alternatives, the court noted that courts have upheld location-specific overall project purpose definitions where the specific site was essential to the project purpose. In doing so, the court recognized the inherently site-specific nature of redevelopment projects.

Plaintiffs further argued that the Corps failed to make a determination that the project was not water-dependent and did not therefore apply the presumption that practicable alternatives exist for projects that are not-water dependent unless clearly demonstrated otherwise. The court dismissed this argument, noting that plaintiffs had conceded in their brief that the project was “clearly not water-dependent,” and that the Corps specifically referenced the “presumption of the availability of off-site alternatives” in the Memorandum for Record in response to a public comment challenging whether defendant had sufficiently rebutted the presumption in connection with the off-site alternatives analysis.

The administrative record reviewed by the court reflected broad understanding by the state and federal agencies involved that the essential project purpose was redevelopment of the Continental Airlines Arena site, and that the inherently site-specific nature of redevelopment allowed a more narrowly defined project purpose. The record also revealed that the Corps had acknowledged that the “stated overall project purpose has not precluded an analysis of either off-site or on-site alternatives,” and that the permit applicant had evaluated adjacent properties which could potentially allow for redevelopment of the Arena site, but that each proposed alternative site was either too small to accommodate the overall project elements or resulted in far greater impacts to wetlands.

City of Shoreacres v. Waterworth, 420 F.3d 440 (5th Cir. 2005)

In this case., the Court of Appeals affirmed a district court grant of summary judgment for the Corps by relying on an analysis of three different prongs of the “practicable alternatives” test required to be applied by the Corps in the 404 permitting process: “availability,” “feasibility” and “overall project purposes.”

The Port of Houston filed a 404 permit application with the Corps for a proposed cargo and cruise ship terminal to be built on undeveloped land adjacent to Galveston Bay. The Port intended to finance the project with proceeds from a project-specific bond issue approved by the voters of Harris County, Texas in which both the Port and the project site are located. The Corps approved a plan for the construction of the terminal and the mandatory preservation of undeveloped areas elsewhere to compensate for the environmental loss caused by the project.

Appellants asked the district court to vacate the permit and enjoin the Port from proceeding with the project because the Corps had issued the permit in violation of the CWA and NEPA. Relying on the requirement that the Corps may not issue a 404 permit “if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem, so long as the alternative does not have other significant adverse environmental consequences,” appellants contended that two sites, Shoal Point and Pelican Island, both adjacent to Galveston Bay, were practicable alternatives to the project site but, in an abuse of discretion, were not considered by the Corps.

In concluding that the Corps’ decision to grant a 404 permit was not an abuse of discretion, the court reasoned that, while Shoal Point and Pelican Island were arguably plausible alternatives given their reasonable proximity and potential to be environmentally acceptable, they must nevertheless be “practicable” under the Section 404(b)(1) Guidelines. Under the Guidelines, an alternative is practicable only if:

[I]t is available and capable of being done after taking into consideration cost, existing technology, and logistics in light of overall project purposes. If it is otherwise a practicable alternative, an area not presently owned by the applicant which could reasonably be obtained, utilized, expanded, or managed in order to fulfill the basic purpose of the proposed activity may be considered.

(40 C.F.R. §230.10(a)(2) [emphasis added].)

The court upheld the Corps contentions that neither site was a “practicable alternative” under this definition for several reasons:

“Availability”:
• Shoal Point was not “available” because the Corps had previously issued a permit to another entity to build a ship terminal there.
• Shoal Point was not “available” because the Port undisputedly had no authority to condemn land outside of Harris County, and the absence of eminent domain power would hinder the assemblage of the many parcels at the site that the project would require.

  “Feasibility”:

• Neither Shoal Point nor Pelican Island was a logistically feasible alternative, because the Port intended to fund its project with the proceeds of a Harris County bond issue which could not legally be spent outside of Harris County, thereby excluding both Shoal Point and Pelican Island as practicable alternatives because they are located in Galveston County.

  “Overall Project Purpose”:

• Either alternative would frustrate the Port’s overall project purpose, which was to further expand Harris County as one of the nation’s major ports.

The court also concluded an unowned alternative site is a “practicable alternative” only if the site “could reasonably be obtained.” Appellants argued that absent the bond issuance, the Port could have financed the project at Shoal Point or Pelican Island with surplus operating revenues. However, the court noted that there was no evidence that the Port had any surplus operating revenues, or what surplus would be sufficient for that purpose. The court further observed that the passage of the bond initiative itself suggested absence of any such surplus. The court also concluded that “a mere, theoretical possibility of acquiring the alternative site,” which is all that appellants offered, did not constitute a showing that the alternative site is reasonably obtainable, or that the Corps’ decision was arbitrary and capricious.

For more information please contact Robert Uram and Ella Foley-Gannon. Robert J. Uram is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office. Ella Foley-Gannon is a Partner in Land Use and Natural Resource Practice Group in the firm’s San Francisco Office.