Opinion
Civil Action No. G-04-185.
December 14, 2004
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
This case arises out of the permit application process for a development on the west end of Galveston Island. Now before the Court are Plaintiff Lafitte's Cove at Pirates' Beach Nature Society's Motion for Summary Judgment and Defendants the U.S. Army Corps of Engineers, Colonel Leonard D. Waterworth, Lieutenant General Robert B. Flowers, and the Honorable Les Brownlee, Acting Secretary of the Army's Motion for Summary Judgment. For the reasons stated below, Plaintiff's Motion is GRANTED and Defendants' Motion is DENIED.
I. Background
In 1990, the Army Corps of Engineers for the Galveston District ("Corps") issued a permit to Mitchell Development Corporation of the Southwest ("Mitchell") for the Pirate's Cove Section 6 development, which is now known as Lafitte's Cove. The conditions of the permit, permit number 17800 ("Permit 17800"), required Mitchell to create the Lafitte's Cove at Pirates' Beach Nature Society ("Nature Society"). Mitchell created the Nature Society through a Declaration of Covenants. The Nature Society was charged with maintaining the canals in the development, and the Nature Society alleges this included dredging them when necessary. Permit 17800 also included a designation of spoil disposal area A as a future maintenance dredge location. This location was not encumbered by the Declaration of Covenants, and Mitchell retained ownership of it.In 1999, Mitchell sold spoil disposal area A to Oly Galveston Partnership, GP ("Oly"). Mitchell also transferred the Pirate's Cove permit to Oly. In 2002, Oly applied to the Corps for a permit ("Permit 22790") for the Harbor and Sanctuary housing development ("the Harbor"). Oly intends to build the Harbor on spoil disposal area A. During the public comment portion of the application process, the Nature Society expressed its concerns about the use of spoil disposal area A. The Corps asked Oly to respond, and Oly indicated that other spoil disposal sites were designated in Permit 17800. The Corps issued a finding of no significant impact ("FONSI") and granted Permit 22790.
The Nature Society filed suit against the Corps for alleged defects in the application process. First, the Nature Society alleges that the Corps failed to conduct a proper cumulative impacts analysis in its Environmental Assessment ("EA") as required by the National Environmental Policy Act, 42 U.S.C. § 4332 ("NEPA"). Second, the Nature Society alleges that the Corps violated the law when it failed to analyze the environmental impacts of the loss of the spoil disposal area.
The Nature Society also alleges that the Corps violated the Clean Water Act, 33 U.S.C. § 1344, by implicitly confiscating spoil disposal area A when it issued the permit without providing an alternative site. The Court does not reach this claim, as it is by far the weakest of the Nature Society's claims and is not necessary to the Court's decision.
The Corps responds that it did not act arbitrarily and capriciously in any of these matters, and the Court should defer to the Corps' expert judgment. It claims that it did conduct a proper cumulative impacts analysis and that it was not required to specifically analyze the loss of the spoil disposal area. The Corps also argues that the dispute over this land is a private contractual matter between Oly and the Nature Society based on the Declaration of Covenants, to which the Corps was not a party.
II. Summary Judgment Standard
Summary judgment is appropriate if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552-53, 91 L.Ed. 2d 265 (1986). The party moving for summary judgment bears the initial burden of "informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. at 2553. The non-moving party must come forward with "specific facts showing there is a genuine issue for trial." Fed.R.Civ.P. 56(e), see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 1356, 89 L.Ed. 2d 538 (1986). The court must view all evidence in the light most favorable to the non-movant. See, e.g., Broussard v. Parish of Orleans, 318 F.3d 644, 650 (5th Cir. 2003), cert. denied, 539 U.S. 915, 123 S. Ct. 2276, 156 L. Ed. 2d 130 (2003). If the evidence would permit a reasonable fact finder to find in favor of the non-moving party, summary judgment should not be granted. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986).
When considering an informal agency adjudication such as the Corps' permit application process, the court must review the agency's actions under the arbitrary and capricious standard established by the Administrative Procedure Act, 5 U.S.C. § 706. See Sabine River Auth. v. U.S. Dep't of Interior, 951 F.2d 669, 678 (5th Cir. 1992); Stewart v. Potts, 996 F. Supp. 668, 674 (S.D. Tex. 1998). The court's decision must be based on the administrative record — the information available to the agency at the time the decision was made. See Stewart, 996 F.Supp. at 674. Summary judgment is appropriate for review of an agency decision based on the administrative record. See Fund for Animals v. Babbitt, 903 F. Supp. 96, 105 (D.D.C. 1995).
III. Analysis
The Corps issued the permits in this case under the Clean Water Act, 33 U.S.C. § 1344, and the Rivers and Harbors Act, 33 U.S.C. § 403, 33 U.S.C. § 1344 grants the Secretary of the Army, acting through the Chief of Engineers, the power to grant permits for "the discharge of dredged or fill material into the navigable waters at specified disposal sites." 33 U.S.C. § 403 prohibits the excavation or fill of any harbor, canal, or channel of navigable water "unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army prior to beginning the same." Both developments in this case involved dredging and filling operations that required approval of the Corps.NEPA requires agencies making recommendations for any "major Federal actions significantly affecting the quality of the human environment" to include "a detailed statement" describing certain environmental impacts of the proposed action. 42 U.S.C. § 4332(C). Issuance of a permit under the Clean Water Act by the Corps is a "major federal action." Sierra Club v. Sigler, 695 F.2d 957, 964-965 (5th Cir. 1983) (quoting 42 U.S.C. § 4332(C)). This statement is called an Environmental Impact Statement ("EIS"). In certain circumstances, including those presented here, the Corps may first make an EA, which is a shorter, less costly analysis to determine whether a full EIS is needed. See Spiller v. White, 352 F.3d 235, 237 (5th Cir. 2003), cert. denied, 125 S. Ct. 34 (2004); Stewart v. Potts, 996 F. Supp. 668, 672 (S.D. Tex. 1998). After concluding the EA, the Corps must issue a Finding of No Significant Impact ("FONSI") or decide to create a full EIS. See Spiller, 352 F.3d at 238.
The Corps has promulgated regulations guiding its evaluation of these permit applications. See 33 C.F.R. § 320 et seq. The decision must be "based on an evaluation of the probable impacts, including cumulative impacts, of the proposed activity and its intended use on the public interest." 33 C.F.R. § 320.4(a); see also 40 C.F.R. § 1508 (listing "cumulatively significant impacts" as one factor to be considered in an EA). The Corps must balance the benefits against the detriments. 33 C.F.R. § 320.4(a). The regulations list numerous factors that should be considered, including wetlands, general environmental concerns, and land use. 33 C.F.R. § 320.4(a). The Corps does not attempt to determine ownership of any property involved in a permit application; rather, it considers the applicant's signature on the application as proof that the applicant has the necessary property rights. 33 C.F.R. § 320.4(g)(6).
These laws and regulations do not mandate a particular outcome, nor do they require the Corps to refuse to issue a permit because of a significant environmental impact. NEPA only requires the Corps to "take a `hard look' at the environmental consequences." Baltimore Gas and Elec. Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87, 97, 103 S. Ct. 2246, 2252, 76 L. Ed. 2d 437 (1983). Therefore, this Court cannot overturn the Corps's decision to issue the permit because the Court disagrees with the outcome; the Court can only monitor the procedure used to reach the outcome and examine the record to see if the outcome was arbitrary and capricious. "The Corps' decision not to prepare an EIS is unreasonable if it failed to supply a convincing statement of reasons why potential effects are insignificant." People ex rel. Van De Kamp v. Marsh, 687 F. Supp. 495, 498 (N.D. Cal. 1988).
A. Sufficiency of Cumulative Impact Assessment
The Corps did give some consideration to cumulative impacts in its EA. The Corps claims that its four-page analysis is consistent with the requirements of Fritiofson v. Alexander, 772 F.2d 1125, 1245 (5th Cir. 1985). However, this consideration was cursory at best. Fritiofson stated:
Fritiofson is a particularly apt precedent because it dealt with the EA requirements for the Pirate's Cove development. To put the length of the cumulative impacts analysis in perspective, this analysis in the EA for Permit 17800 (Pirate's Cove) extended to nine pages. The entire EA for the project considered in Spiller was over 2,400 pages. See Spiller, 352 F.3d at 240.
[A] meaningful cumulative-effects study must identify: (1) the area in which effects of the proposed project will be felt; (2) the impacts that are expected in that area from the proposed project; (3) other actions — past, proposed, and reasonably foreseeable — that have had or are expected to have impacts in the same area; (4) the impacts or expected impacts from these other actions; and (5) the overall impact that can be expected if the individual impacts are allowed to accumulate.Id. The discussion may not be "vague and conclusory." Id. Here, the EA adequately considers factors (1) and (2), although the impacts from the proposed project are discussed more fully in other sections of the EA than in the cumulative impacts analysis. As to factor (3), other actions, the analysis lists current and future developments in the area.
However, the analysis is severely deficient in its consideration of factors (4) and (5). It does not determine the cumulative impacts of all the projects listed except to say, "All of these developments would likely impact coastal prairie habitat, and may in some cases, impact fresh to brackish wetland swales and depressions, as well as high and low saltmarsh. Exact impacts are not known at this time." (Permit 22790 AR. 4294.) The analysis lists the expected acreage of wetland loss for a couple of projects, but it does not consider many other important environmental factors, nor does it estimate wetland loss for each project listed.
As to factor (5), the analysis then states that the Harbor development, by itself, will have minimal environmental impacts, and that all the projects together do not present "significantly adverse" environmental impacts. (Permit 22790 AR. 4294.) Nowhere does the analysis put the environmental impacts of the Harbor development into the context of all the developments in the area, which is the purpose of the cumulative impacts analysis. Of course the Corps cannot be expected to determine the exact, quantifiable impacts of all present and future projects, but the cumulative impacts analysis in Permit 22790 is not an analysis but merely a listing of facts. Also, the cumulative impacts analysis does not adequately consider how all of these developments together will affect Galveston Island's ability to withstand a strong hurricane. While the Nature Society has not pressed this issue, this Court knows from its long tenure in Galveston that the potential for the Island to be split in two by a hurricane is always something that must be considered.
This analysis also includes a page-long description of the Galveston Comprehensive Plan ("Plan"). This Plan does give a relevant history of population growth on Galveston Island, but the Plan is only a set of goals for the City of Galveston, not a description of the actual plans and projects for the west end of the Island. The EA does not explain the relevance of the Plan to the cumulative impact analysis, such as how it works to prevent a significant impact on the environment from the cumulative effects of the various developments. Also, the EA does not state whether the entire area under consideration is within the city limits and therefore subject to this Plan. Therefore, it contributes little to an understanding of what impacts future development in this area would have on the environment.
Since the land at issue in this case is part of the area considered in Permit 17800, that Permit's EA provides a helpful guideline both to the amount of information available to the Corps and also to the type of information that should be included in the cumulative impacts analysis. Of course, this development is not the same as Pirate's Cove, so every element of the prior EA may not be relevant to this one. In the Permit 17800 EA, the Corps gave detailed figures regarding future growth on the west end of Galveston Island. (Permit 17800 AR. 318.) In the Permit 22790 EA, the Corps only gives a general and qualitative description of future growth. (Permit 22790 AR. 4292.) The Permit 17800 EA also considers consumption of resources such as energy, water, and public services; stormwater and wastewater management; traffic; effects on freshwater and saltwater wetlands; effects on prairie uplands; effects on the bay bottom; and effects of increased boat navigation. (Permit 17800 AR. 320-327.) These are each considered in detail; unlike the Permit 22790 EA, the Permit 17800 EA does not merely list some potential effects and say that they might occur. The Permit 17800 EA also includes several appendices providing a factual basis for the cumulative impacts analysis, but the Permit 22790 EA does not.
A Finding of No Significant Impact is arbitrary and capricious if it does not actually analyze the available facts but merely repeats them from source materials. Also, the Corps cannot rely on reports from other parties alone; it must "independently verify the information it relied upon." People ex rel. Van De Kamp v. Marsh, 687 F. Supp. 495, 500 (N.D. Cal. 1988). In this case, the Corps relied on statements made by Oly that other spoil sites were designated in Permit 17800 and available for use by the Nature Society. The Corps cannot issue a permit on the basis that it does not know what the environmental impact will be. Since the EA for Permit 22790 did not adequately analyze the cumulative impacts of the proposed action and other past, present, and reasonably foreseeable actions in the area, the decision not to prepare an EIS and to issue the permit was arbitrary and capricious.
After the administrative record for Permit 22790 was closed, Oly sent a letter to the Nature Society indicating that they would provide a site for spoil disposal. While this is not part of the record, it serves to highlight the fact that without spoil disposal area A, the Nature Society did not apparently have another site for spoil disposal.
B. Sufficiency of Consideration of Loss of Spoil Disposal Area A
The Permit 17800 EA specifically takes into account Mitchell's plan for disposing of spoil from dredging. In the cumulative impacts analysis, the EA states: "Spoil disposed from canal construction/maintenance will be contained on upland areas in a manner that will preclude impairment of estuarine water quality, although its physical presence will add to the net loss of prairie." (Permit 17800 AR. 319.) Maps attached to the Permit clearly label spoil disposal area A. Exhibit D-1 to the final permit of August 9, 1990 clearly marks spoil disposal area A as the "future maintenance spoil site." (Permit 17800 AR. 2865.) The maps showing the other spoil disposal areas are not so labeled. Defendants do not contend that the Nature Society did not previously have the ability to dispose of spoil from maintenance dredging at this site. If the Nature Society must now dispose of maintenance spoil somewhere else, at a minimum that would also result in a net loss of prairie. This is an environmental impact that should have been considered in the Permit 22790 EA.
The Administrative Record for Permit 17800 also indicates that Reserve F, in which the permittee committed to prohibit development, overlapped Spoil Disposal Area A. (Permit 17800 AR. 2819, 2733, 2744.) It is not clear from the Administrative Record for Permit 22790 that the new project does not infringe on this protected area. Without an amendment to the earlier permit, Oly cannot develop an area that it committed to leave as a nature preserve in that earlier permit. Defendants argue that no law prevents changes in maintenance spoil site designations. While it is true that no regulation specifically prohibits this change, permittees may not generally change their plans after receiving a permit without obtaining an amendment to the permit. The Corps in fact evaluated and granted several amendments to Permit 17800, which shows that changes in the original plan require approval.
The maps of the proposed development in Permit 22790 and the maps of spoil disposal area A in Permit 17800 indicate that some of spoil disposal area A was a wetland area. The total amount of preserved wetland area was a factor in the Corps' decision to grant Permit 17800. Once again, Oly cannot unilaterally alter the terms on which it was granted that permit. The EA for Permit 22790 did not re-analyze the environmental impact of the Permit 17800 development with one less spoil disposal area and a smaller amount of preserved wetlands.
If developers are allowed to leave an area undeveloped or designated for a certain purpose in one application and then just submit a new, unrelated application when they want to change that use, then the requirements of NEPA are eviscerated. The cumulative impacts analysis in particular should address just this kind of piecemeal development. In this case, however, the Corps did not adequately consider the loss of spoil disposal area A in the context of the other developments. Oly provided the Corps its responses to comments that dealt with the spoil disposal area. (Permit 22790 AR. 4100, 4092.) These very brief responses just stated that other disposal areas had been designated in the original permit. That response does not fully address the question. Those other spoil sites may no longer be suitable for the disposal of maintenance dredging spoil, for example. This response does not address the question of what happens if Oly decides to develop the other spoil disposal sites, either.
Well after commencement of this litigation and after the Administrative Record was closed, Oly sent a letter to the Corps stating its willingness to provide a different site for maintenance dredging spoil disposal. (Def. Mem. in Supp. of Mot. for Summ. J. Ex. 2.) Because this Court can only consider information contained in the administrative record, this letter cannot factor into the Court's decision. However, even if the Court could factor this into its decision, the letter does not help Defendants. First, this letter does not compare the capacity of the proposed site and spoil disposal area A such that the Corps could make a decision about the equivalence of the sites. Second, while the letter designates this as a "permanent spoils placement" area, there is no plan for making this truly permanent.
In their Reply to Plaintiff's Response to Defendants' Motion for Summary Judgment, Defendants contend that neither the Declaration of Covenants nor Permit 17800 required the Nature Society to conduct maintenance dredging. Defendants also contend that the Nature Society would have to obtain a separate permit to conduct such dredging. Neither argument affects the fact that the Corps did not consider the environmental impact of changing the use of spoil disposal area A in the context of the previous permit. Without consideration of this obvious change in the previously permitted activity, the Corps' decision to grant Permit 22790 was arbitrary and capricious.
IV. Conclusion
The Corps failed to conduct a sufficient cumulative impacts analysis in its EA for Permit 22790. The cumulative impacts section does not provide enough information upon which the Corps could base a reasoned decision on whether to grant the permit, nor does it actually analyze what information it does provide on cumulative impacts. Also, the Corps did not adequately consider the loss of spoil disposal area A in the context of the Pirate's Cove development and other developments. The Corps is charged with the protection of the public interest in its decisions to grant permits for various activities. Without a thorough evaluation of the environmental impacts of a proposed project, the Corps cannot make a decision that protects that interest.
For the reasons stated above, Plaintiff's Motion for Summary Judgment is GRANTED and Defendant's Motion for Summary Judgment is DENIED. This matter is REMANDED to the Corps for an Environmental Assessment consistent with this Order. The Court declines to issue a permanent injunction that Permit 22790 is void; however, Permit 22790 and all further work on the Harbor and Sanctuary development are ENJOINED pending proper analysis of the permit application by the Corps. A Final Judgment regarding this and all other claims will be entered in due course.