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Richland/Wilkin Joint Powers Authority v. United States Army Corps of Engineers

United States District Court, D. Minnesota

September 7, 2017

RICHLAND/WILKIN JOINT POWERS AUTHORITY, Plaintiff,
v.
UNITED STATES ARMY CORPS OF ENGINEERS, ROBERT SPEER, ASSISTANT SECRETARY OF THE ARMY FOR WORKS, and COL. SAM CALKINS, Defendants, and MINNESOTA DEPARTMENT OF NATURAL RESOURCES Intervenor-Plaintiff, and FARGO-MOORHEAD FLOOD DIVERSION BOARD OF AUTHORITY and CITY OF OXBOW, Intervenor-Defendants.

          Gerald W. Von Korff and Anna K.B. Finstrom, RINKE NOONAN, for plaintiff.

          Colin Patrick O'Donovan and Max H. Kieley, Assistant Attorneys General, for intervenor-plaintiff.

          Devon Lehman McCune, for defendants.

          Robert E. Cattanach, Michael R. Drysdale, and Theresa M. Bevilacqua, DORSEY & WHITNEY LLP for the Fargo-Moorhead Flood Diversion Board of Authority.

          MEMORANDUM OPINION AND ORDER

          JOHN R. TUNHEIM CHIEF JUDGE UNITED STATES DISTRICT COURT

         For as long as people have lived and worked in the Red River Valley that borders the States of North Dakota and Minnesota, the Red River of the North (“Red River”) has caused significant flooding problems for local communities. The parties to this case and the Court all recognize the need for permanent flood protection for the individuals residing in the Red River Valley, especially the growing Fargo-Moorhead community. In addition to the serious flood-related issues, this case presents difficult and complex questions regarding a state's ability to regulate border projects on major waterways when non-Federal actors undertake significant portions of a federally-approved project.

         Here, Plaintiff Richland/Wilkin Joint Powers Authority (“JPA”) and Intervenor-Plaintiff Minnesota Department of Natural Resources (the “DNR”) allege that Defendant U.S. Army Corps of Engineers (the “Corps”)[1] and Defendant-Intervenor Fargo-Moorhead Flood Diversion Board of Authority (the “Diversion Authority”) violated state and federal laws by signing a project partnership agreement and beginning construction on a permanent flood protection project without the Diversion Authority obtaining requisite permits from the State of Minnesota. The DNR and JPA seek a preliminary injunction to prevent the Corps and the Diversion Authority from continuing construction until the Diversion Authority obtains the allegedly requisite permits.

         In response, both the Corps and the Diversion Authority argue that a preliminary injunction is inappropriate. The Corps and the Diversion Authority further move to dismiss certain claims under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. After the hearing on these motions, JPA filed a motion for sanctions under Rule 37(c)(1) of the Federal Rules of Civil Procedure, seeking postponement of the Court's ruling on the pending motions until the record is fully supplemented and supplemental briefing is completed.

         The Court will grant the Diversion Authority's limited motion to dismiss, grant in part and deny in part the Corps' motion to dismiss, grant the DNR's and JPA's motions for a preliminary injunction, and deny JPA's sanctions motion.

         BACKGROUND

         I. THE PARTIES

         JPA is a joint authority created by Richland County, North Dakota, and Wilkin County, Minnesota, pursuant to statutes in each state allowing their respective government units to jointly and cooperatively exercise power with other government units, even those in other states. (Pl. Fourth Am. Compl. (“JPA Compl.”) ¶¶ 2-5, April 3, 2017, Docket No. 419);[2] see also Minn. Stat. § 471.59 (“Joint Exercise Powers”); N.D. Cent. Code § 54-40.3 (“Joint Powers Agreements”). Richland and Wilkin Counties formed JPA to protect their citizens and their citizens' property from flooding. (JPA Compl. ¶ 2.)

         The DNR is a statutory agency of the State of Minnesota responsible for administering and enforcing Minnesota statutes and rules related to the state's natural resources, including its navigable waters. (Compl. by the Minn. DNR (“DNR Compl.”) ¶ 6, Mar. 24, 2017, Docket No. 411.)

         The Corps is a federal agency involved in the development of the permanent flood protection project at issue in this case. (Id. ¶ 8; JPA Compl. ¶ 8.) Robert Speer, Assistant Secretary of the Army for Civil Works, and Colonel Sam Calkins are employees of the Corps. (DNR Compl. ¶¶ 9-11; JPA Compl. ¶¶ 7, 9-10.)

         The Diversion Authority is also a joint authority formed pursuant to Minnesota's and North Dakota's joint powers statutes. (DNR Compl. ¶ 12; JPA Compl. ¶ 11.) The Diversion Authority was formed by the following government units: the City of Fargo, North Dakota; Cass County, North Dakota; Cass County Joint Water Resources District, North Dakota; the City of Moorhead, Minnesota; Clay County, Minnesota; and the Buffalo-Red River Watershed District, Minnesota. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs (Dist. Court Order II), 176 F.Supp.3d 839, 842 (D. Minn. 2016). The Corps designated the Diversion Authority as the non-Federal sponsor of the permanent flood protection project at issue in this case, meaning the Diversion Authority is the local entity tasked with developing and managing the project. Id.

         II. FACTUAL BACKGROUND

         The Red River originates at the confluence of two tributaries, demarking the Minnesota-North Dakota border. Id. The broader, flat valley of the Red River was formed over thousands of years as the lakebed of Glacial Lake Agassiz which receded slowly as the ice melted to the north. Through this flat valley, the Red River flows northward, eventually emptying into Lake Winnipeg in Canada. Id. For as long as humans have lived along the Red River, the river has flooded. Id. In 2008, the Corps, along with the cities of Fargo, North Dakota, and Moorhead, Minnesota, began a feasibility study to examine “alternatives . . . to reduce flood risk in the entire Fargo-Moorhead Metropolitan area.” Id. After a major flood in 2009, the project gained momentum and eventually the Fargo-Moorhead Flood Risk Project (the “Project”) was developed. Id.; (DNR Compl. ¶ 57).

         As required by federal law, the Corps conducted an environmental review of the Project. (DNR Compl. ¶ 71.) In May 2010, the Corps published a Draft Environmental Impact Statement (“EIS”). Dist. Court Order II, 176 F.Supp.3d at 843-44. The Draft EIS discussed how the Corps had studied the benefits and costs of several potential options for flood control in the area. Id. In a later Supplemental Draft EIS, the Corps continued to refine its plans, and to publish and describe the varying drawbacks and advantages of specific plans. Id. at 844. During this process, the DNR submitted multiple comment letters to the Corps regarding its concerns with the Project. (DNR Compl. ¶ 72.) The Corps acknowledged the DNR's concerns during the process and “ensured the DNR that the Project required compliance with obligations imposed by Minnesota's statutes and regulations.” (Id. ¶ 73.)

         In July 2011 the Corps issued its Final Feasibility Report and Environmental Impact Statement (“FFREIS”) regarding the Project. (Id. ¶¶ 19, 71.) In section 3.14.4 for the FFREIS, the Corps acknowledged that

[a]s part of implementing this project, the non-federal sponsors [were] required to obtain a [DNR] protected waters permit . . . . In order to obtain the necessary permits from the State of Minnesota, the non-federal sponsors [were required to] complete the scoping and review process required by the Minnesota Environmental Policy Act. . . . The construction contractors [were] responsible for acquiring all local licenses/permits required to comply with state and municipal laws, codes and regulations.

(DNR Compl. ¶ 74; accord JPA Compl. ¶ 34; Notice of Submission of Exs., Ex. F at 109, Feb. 12, 2015, Docket No. 162.)

         The Corps ultimately selected the “locally preferred plan” (“LPP”) as its proposed action. Dist. Court Order II, 176 F.Supp.3d at 844. In December 2011, the Corps issued its Chief's Report recommending the Project to Congress. (DNR Compl. ¶ 75; JPA Compl. ¶ 35; Notice of Submission of Exs., Ex. I (“Chief's Report”).) The Chief's Report endorsed the FFREIS and noted in several locations that the Project would comply with “Federal and State laws and regulations.” (DNR Compl. ¶ 75; JPA Compl. ¶ 35 n.2; Chief's Report at 4, 6-7.)

         The Assistant Secretary of the Army signed a Record of Decision (“ROD”) and forwarded the Corps' relevant reports and studies to Congress in April 2012. Dist. Court Order II, 176 F.Supp.3d at 844. In 2014 Congress passed and the President signed the Water Resources Reform and Development Act of 2014 (“WRRDA-2014”), authorizing the Project. Id. at 845 (citing Pub. L. No. 113-121, § 7002(2)(4), 128 Stat. 1193 (2014)).

         In February 2016 the Diversion Authority submitted its application for a Dam Safety and Public Waters Work Permit (“Permit”) to the DNR. (DNR Compl. ¶ 82.) In July 2016 the Corps and the Diversion Authority signed a project partnership agreement (“PPA”), “which set forth the rights and obligations of the Corps and the Diversion Authority pertaining to Project construction and operation.” (Id. ¶¶ 26, 91; JPA Compl. ¶ 46; Decl. of Michael Drysdale in Supp. of Mot. for Summ. J., Ex. G (“PPA”), Dec. 1, 2016, Docket No. 354.) The PPA divided construction responsibilities into two categories - “Federal Work” and “Non-Federal Work” - and primarily limited the “Non-Federal Work” to construction occurring on the North Dakota side of the Red River. (DNR Compl. ¶ 93; PPA at 2.) The Corps took responsibility for most of the work to occur in Minnesota, excluding certain “flood risk reduction projects undertaken in the F-M Metro Area.” (DNR Compl. ¶ 93.) The PPA further provided that the Diversion Authority “will operate, maintain, repair, rehabilitate, and replace the Project” after the parties complete construction. (Id. ¶ 94; PPA at 7.) At the time the Corps and the Diversion Authority signed the PPA, both the DNR Commissioner and Minnesota's Governor expressed concerns that the PPA was premature in light of the Diversion Authority's outstanding Permit application. (DNR Compl. ¶¶ 89, 92.)

         The DNR denied the Permit in October 2016 finding the Project did “not adequately protect the public, health, safety and welfare of [Minnesota's] citizens, [did] not represent the minimal impact solution, and [was] neither reasonable nor practical.” (Id. ¶ 83-84 & Ex. 1 (“DNR Permit Denial”) ¶¶ 123-137, 198; see also JPA Compl. ¶ 48.) The DNR further found the Project non-compliant with environmental requirements, floodplain requirements, and local and other land resources management plans. (DNR Compl. ¶¶ 85-87; DNR Permit Denial ¶¶ 138-97.) The Diversion Authority requested a contested case hearing regarding the Permit denial. (DNR Compl. ¶ 88.)

         In spite of the Permit denial, the Corps and the Diversion Authority publicly “announced their intent to move forward with Project construction.” (Id. ¶¶ 96-97; JPA Compl. ¶ 49.) The DNR responded to this announcement by sending a letter “unequivocally” stating “that Minnesota permits are needed in order for either the Corps or the Diversion Authority to construct this project lawfully.” (DNR Compl. ¶ 99 & Ex. 2 at 1.) Both the DNR and JPA allege the Corps and the Diversion Authority have begun construction on the project without the required Permit. (Id. ¶ 100; JPA Compl. ¶ 50.)

         III. PROCEDURAL HISTORY

         JPA filed its initial complaint on August 19, 2013, naming only the Corps and certain individuals employed by the Corps as defendants. (Compl., Aug. 19, 2013, Docket No. 1.) At first, JPA alleged that in developing and choosing the LPP, the Corp violated Minnesota law, Executive Order 11988 (“E.O. 11988”), and the National Environmental Protection Act (“NEPA”). (First Am. Compl. ¶¶ 62-100, Oct. 22, 2013, Docket No. 14.) In November 2013 the Court granted the Diversion Authority leave to intervene. Then in May 2014 JPA amended its complaint, naming both the Corps and the Diversion Authority as defendants and limiting their allegations to violations of NEPA. (Second Am. Compl. 1 & ¶¶ 62-91, May 2, 2014, Docket No. 47.)

         After certain proceedings occurred in North Dakota state court regarding the OHB Ring Levee, [3] JPA filed a Third-Amended Complaint against the Corps and the Diversion Authority alleging five counts, including violation of: NEPA (Counts I and II), Minnesota Environmental Rights Act (“MERA”) (Count III), the Minnesota Environmental Policy Act (“MEPA”) (Count IV), and state and local permitting laws (Count V). (Third Am. Compl. ¶¶ 88-139, Nov. 4, 2014, Docket No. 112.) Then JPA filed a motion for a preliminary injunction regarding the OHB Ring Levee. (Pl.'s Mot. for Prelim. Inj., Feb. 11, 2015, Docket No. 122.) In turn, the Corps and the Diversion Authority filed motions to dismiss the state and local claims in Counts III, IV, and V. (Corps' Partial Mot. to Dismiss Third Am. Compl., Feb. 11, 2015, Docket No. 141; Diversion Auth.'s Mot. to Dismiss, Feb. 11, 2015, Docket No. 145.)

         The Court ruled on the motions together. The Court dismissed Counts III, IV, and V against the Corps because the Corps is not bound by the relevant state laws. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs (Dist. Court Order I), No. 13-2262, 2015 WL 2251481, at *7-8 (D. Minn. May 13, 2015). The Court also dismissed Count V against the Diversion Authority because JPA had not shown that the relevant state and local permitting laws were broad enough to support the requested relief. Id. at *13 n.7. But the Court declined to dismiss Counts III and IV - the MERA and MEPA claims - against the Diversion Authority. The Diversion Authority argued that those claims must be dismissed because any injunction based on Minnesota law prohibiting construction activities inside the borders of North Dakota would impermissibly extend the reach of Minnesota's law outside the state's borders. The Court disagreed, however, and found that such an injunction would not impinge on extraterritoriality or Dormant Commerce Clause principles because of the cross-border nature of the Project, as well as the fact that JPA and the Diversion Authority are partially composed of Minnesota governmental units subject to Minnesota law. Id. at *10-15. Finally, the Court granted JPA's request for a preliminary injunction with respect to Counts III and IV against the Diversion Authority, ordering that all construction on the OHB Ring Levee cease. Id. at *24-25. The Eighth Circuit affirmed the Court's order on June 20, 2016. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs (Appellate Court Order), 826 F.3d 1030, 1033-34 (8th Cir. 2016).

         The parties filed cross-motions for summary judgment regarding the Third Amended Complaint. The Court granted the Corps' and the Diversion Authority's motions for summary judgment on Counts I and II (NEPA) with prejudice. Dist. Court Order II, 176 F.Supp.3d at 852-53. The Court found the Corps had complied with NEPA and the Administrative Procedure Act (APA) in considering the environmental impacts of the Project. Id. at 847-852. The Court further found the NEPA claims against the Diversion Authority failed because the Diversion Authority “is not a federal entity, even if it is the sponsoring entity for the purposes of the diversion project.” Id. at 852. The Court dismissed the Corps from the case; leaving only state-law claims against the Diversion Authority. Id. at 841, 852-53.

         Following the DNR Permit Denial in October 2016, the DNR moved to intervene and the Court granted the motion. (Mem. Op. & Order at 6, Jan. 13, 2017, Docket No. 398.) JPA also moved to reinstate the Corps as an active defendant and to supplement the pleadings. Richland/Wilkin Joint Powers Auth. v. U.S. Army Corps of Eng'rs (Dist. Court Order III), No. 13-2262, 2017 WL 740994, at *1 (D. Minn. Feb. 24, 2017). The Court granted JPA's motion and directed both the DNR and JPA to file supplemental pleadings. Id. at *2-3. The DNR filed its Complaint and JPA filed its Fourth Amended Complaint on March 24, 2017. The DNR alleges four counts: pursuant to the APA, violation of 33 U.S.C. § 2232 against the Corps (Count I); pursuant to the APA, violation of WRRDA-2014 § 7002 against the Corps (Count II); violation of MERA against the Diversion Authority (Count III); and violation of Minn. Stat. chs. 103G and 103F against the Diversion Authority (Count IV). JPA also alleges four counts: violation of NEPA against the Corps (Count I); violation of MERA against the Diversion Authority (Count II); violation of Minnesota permitting requirements against the Diversion Authority (Count III); and violation of section 2232 and section 7002 against the Corps and the Diversion Authority (Count IV).

         Both the DNR and JPA then filed motions for preliminary injunctions, seeking to enjoin the Corps, the Diversion Authority, or anyone in active concert with either party from continuing construction on the Project until the DNR issues a Permit. The Corps and the Diversion Authority, in turn, filed motions to dismiss the DNR Complaint and Fourth Amended Complaint. The Corps moves to dismiss all claims against it and the Diversion Authority moves to dismiss Count IV in JPA's Fourth Amended Complaint.[4]

         The Court held a hearing regarding the four motions on July 18, 2017. (Min. Entry, July 18, 2017, Docket No. 497.) Two days after oral argument, the Corps and the Diversion Authority allegedly disclosed certain documents relevant to the pending motions. (Mot. for Rule 37(c)(1) Sanctions & for Order Granting Leave to Suppl. Prelim. Inj. & Dispositive Mot. R. at 2, Aug. 4, 2017, Docket No. 505.) JPA filed a motion for sanctions under Rule 37(c)(1), requesting that the Court postpone decision on the pending motions, allow supplementation of the record, and order supplemental briefing on the new information.

         DISCUSSION

         I. MOTIONS TO DISMISS

         A. Standard of Review

         The Corps and the Diversion Authority move to dismiss under Rules 12(b)(1) and 12(b)(6). “A motion to dismiss pursuant to Rule 12(b)(1) challenges the Court's subject matter jurisdiction and requires the Court to examine whether it has authority to decide the claims.” Damon v. Groteboer, 937 F.Supp.2d 1048, 1063 (D. Minn. 2013). In deciding a motion under Rule 12(b)(1), the Court must first “distinguish between a ‘facial attack' and a ‘factual attack.'” Osborn v. United States, 918 F.2d 724, 729 n.6 (8thCir.1990) (quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)). “In a facial challenge to jurisdiction, all of the factual allegations concerning jurisdiction are presumed to be true and the motion is successful if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In other words, in a facial challenge, the Court “determine[s] whether the asserted jurisdictional basis is patently meritless by looking to the face of the complaint[] and drawing all reasonable inferences in favor of the plaintiff.” Biscanin v. Merrill Lynch & Co., 407 F.3d 905, 907 (8th Cir. 2005) (citations omitted). In a factual attack, the court “inquires into and resolves factual disputes, ” Faibisch v. Univ. of Minn., 304 F.3d 797, 801 (8th Cir. 2002), and is free to “consider[] matters outside the pleadings, ” Osborn, 918 F.2d at 729 n.6. The nonmoving party in a factual challenge “does not have the benefit of 12(b)(6) safeguards.” Id.

         The Court construes the jurisdictional arguments to present a facial challenge. The Court finds no need to resolve any factual disputes to decide the jurisdictional questions and relies only on facts that are not in dispute and that are appropriate for consideration under a Rule 12(b)(6) motion. Degnan v. Sebelius, 959 F.Supp.2d 1190, 1193 (D. Minn. 2013) (limiting its analysis of a facial jurisdictional challenge to “the pleadings, matters of public record and materials necessarily embraced by the pleadings”), aff'd sub nom. Degnan v. Burwell, 765 F.3d 805 (8th Cir. 2014).

         In reviewing a Rule 12(b)(6) motion to dismiss, the Court considers all facts alleged in the complaint as true to determine if the complaint states a “claim to relief that is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To survive a motion to dismiss, a complaint must provide more than “‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Although the Court accepts the complaint's factual allegations as true, it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility, '” and therefore must be dismissed. Id. (quoting Twombly, 550 U.S. at 557)).

         B. The Corps' Motion to Dismiss - Sovereign Immunity

         The Corps first challenges all claims filed against the Corps on the grounds of sovereign immunity. A district court lacks jurisdiction to hear a case against the United States or its agents unless sovereign immunity has been expressly waived. FDIC v. Meyer, 510 U.S. 471, 475 (1994) (“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.”); United States v. Kearns, 177 F.3d 706, 709 (8th Cir. 1999) (“The United States is immune from suit except where Congress has waived that immunity.”).

         The Corps argues the Court lacks jurisdiction because both the DNR and JPA failed to identify a final agency action subject to review under the APA. The APA provides for judicial review of a “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. § 704. The APA “evinces Congress' intention and understanding that judicial review should be widely available to challenge the actions of federal administrative officials.” Califano v. Sanders, 430 U.S. 99, 104 (1977). “When an agency action is final and, if final, appropriate for judicial review[, ] are issues that have arisen in a variety of federal agency contexts in the past one hundred years.” Hawkes Co. v. U.S. Army Corps of Eng'rs, 782 F.3d 994, 999 (8th Cir. 2015), aff'd, 136 S.Ct. 1807 (2016). In Bennett v. Spear, the Supreme Court set forth a two-part test for determining whether an agency action is “final”: (1) “the action must mark the ‘consummation' of the agency's decisionmaking process - it must not be of a merely tentative or interlocutory nature”; and (2) “the action must be one by which ‘rights or obligations have been determined, ' or from which ‘legal consequences will flow.'” 520 U.S. 154, 177-78 (1997) (citations omitted).

         The DNR and JPA both argue the PPA is a final agency action subject to review under the APA. They argue the PPA satisfies the Bennett test because the PPA is a binding agreement that determines the rights and obligations of the Corps and the Diversion Authority for completion of the Project. In response, the Corps argues the PPA is not a final agency action because it does not mark the consummation of the agency's decision-making process. Instead, says the Corps, the PPA is a step in the process of implementing final agency actions already taken - the ROD and the Chief's Report.

         It is certainly true that the performance and/or implementation of a project is generally not considered “an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act” as required by the APA. See, e.g., Vill. of Bald Head Island v. U.S. Army Corps of Eng'rs, 714 F.3d 186, 193 (4th Cir. 2013) (quoting APA, 5 U.S.C. § 551(13)); Wild Fish Conservancy v. Jewell, 730 F.3d 791, 800 (9th Cir. 2013). But entering into the PPA is not necessarily implementation.

         In Louisiana State v. U.S. Army Corps of Engineers, [5] the Fifth Circuit addressed the issue of whether a Deauthorization Report sent to Congress or an agreement later signed by Louisiana and the Corps were final agency actions. 834 F.3d 574, 581-85 (5th Cir. 2016). The Fifth Circuit held that the Deauthorization Report was not a final agency action, in part because the recommendation to Congress noted that it was “subject to the non-Federal sponsor executing an agreement with the Department of the Army prior to the Federal Government initiating construction of the closure structure.” Id. at 582. Thus, said the Fifth Circuit, the Deauthorization Report “anticipate[d] the necessity of further agency action before the . . . project [could] be implemented.” Id. In contrast, the Fifth Circuit found an agreement entered between Louisiana and the Corps was the “final agency action” because it was a “binding agreement . . . that clearly set[] out the cost allocation for the . . . project.” Id. at 583. And, as a binding agreement with legal consequences, the agreement “consummat[ed] the agency's decision-making process.” Id.

         Here, while complaining about actions after Minnesota denied the Permit, both the DNR and JPA set forth allegations that the PPA is a final agency action and that the Corps acted arbitrarily and capriciously when it entered into the PPA prior to the Diversion Authority securing the Permit. (See DNR Compl. ¶ 26 (“Federal funding . . .was contingent on the execution of a [PPA] and a finding by the Corps that all outstanding regulatory issues facing the project would likely be resolved . . . .”); id. ¶ 92 (“[S]igning the PPA was premature and inconsistent with the guidance from the OMB when allocating Project funding.”); id. ¶¶ 107, 118 (signing the PPA “constitute[d] final agency action”); id. ¶¶ 109, 120 (signing the PPA “[was] arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with law”); JPA Compl. ¶ 46 (“The [Corps'] actions [signing the PPA] represent[] the consummation of the agency's decision-making process and it constitutes an action from which rights or obligations have been determined, or from which legal consequences will flow. These actions were outside the scope of the authority granted by [WRRDA-2014] and were arbitrary and capricious”).)

         Like in Louisiana, the ROD and Chief's Report are not the final agency action for the DNR's and JPA's claims because the ROD and Chief's Report specifically informed Congress that in order to implement the Project “the non-Federal sponsors [had to] agree” to certain requirements “prior to project implementation, ” including compliance “with all applicable Federal and State laws and regulations.” (Chief's Report at 4, 7 (emphasis added).) Thus, the ROD and Chief's Report “anticipate[d] the necessity of further agency action before” the Project could be implemented. Louisiana, 834 F.3d at 582.

         Instead, applying Bennett, the PPA is the final agency action. First, the PPA consummates the Corps' decision-making process in that “it is a binding agreement between the Corps and [the Diversion Authority] that clearly sets out” the rights and responsibilities for both the Corps and the Diversion Authority pertaining to Project construction and operation. Id. at 853; (see also DNR Compl. ¶ 91; JPA Compl. ¶ 46; PPA at 3-15). Further, entering into the PPA “was an act that, by its very nature, determined rights and obligations and had legal consequences, which is precisely what contracts do.” Alabama v. U.S. Army Corps of Eng'rs, 382 F.Supp.2d 1301, 1324 (N.D. Ala. 2005).

         For these reasons, under the APA, the Court has jurisdiction to hear the DNR's and JPA's claims against the Corps and the Court will deny the Corps' Motion to Dismiss Counts I and II in the DNR's Complaint and Count IV in JPA's Complaint.[6]

         C. The Corps' Motion to Dismiss - Prudential Standing

         The Corps also argues all of the WRRDA-2014 claims fail because the DNR and JPA lack prudential standing. “The Supreme Court has recognized prudential requirements for standing, including ‘that a plaintiff's grievance must arguably fall within the zone of interests protected or regulated by the statutory provision . . . invoked in the suit.” Nat'l Wildlife Fed'n v. Westphal, 116 F.Supp.2d 49, 53 (D.D.C. 2000) (quoting Bennett, 520 U.S. at 162) (interpreting a previous version of WRRDA).

         Generally, the zone of interests test is “generous and relatively undemanding.” Id. “[T]here need be no indication of congressional purpose to benefit the would-be plaintiff.” Nat'l Credit Union Admin. v. First Nat'l Bank & Tr. Co., 522 U.S. 479, 491 (1998) (quoting Clarke v. Sec. Indus. Ass'n, 479 U.S. 388, 399-400 (1987)). Instead, the test only requires that “the interest sought to be protected by the complainant is arguably within the zone of interests to be protected by the statute.” Id. at 492 (quoting Ass'n of Data Processing Serv. Orgs., 397 U.S. 150, 153 (1970)). But where a plaintiff “is not itself the subject of the contested regulatory action, the test denies a right of review if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.” Clarke, 479 U.S. at 399; see also Rosebud Sioux Tribe v. McDivitt, 286 F.3d 1031, 1036 (8th Cir. 2002). “Whether a plaintiff's interest is ‘arguably . . . protected . . . by the statute' within the meaning of the zone-of-interests test is to be determined not by reference to the overall purpose of the Act in question . . . but by reference to the particular provision of law upon which the plaintiff relies.” Bennett, 520 U.S. at 175-76.

         Here, the DNR and JPA are within the zone of interests that WRRDA-2014 protects. Numerous provisions of WRRDA-2014 require compliance with state law. See WRRDA-2014 § 7002 (authorizing the Project to be carried out “subject to the conditions[] described in the respective reports”); Chief's Report at 7 (requiring compliance “with all applicable . . . State laws and regulations”); 33 U.S.C. § 2232(b)(2) (“Before carrying out a water resources development project, or separable element thereof, under this section, a non-Federal interest shall . . . obtain any permit or approval required in connection with the project or separable element under Federal or State law . . . .”). Requiring state permits is evidence that when enacting WRRDA-2014, Congress had more in mind that just making project funding easier for non-Federal entities. In fact, by requiring state permits, Congress reiterated its consistent view that flood control projects relating to navigable waters must be completed in “cooperation with States, their political subdivisions, and localities thereof.” See 33 U.S.C. § 701a (emphasis added). Thus, the Court finds the DNR and JPA are within the zone of interests meant to be protected by provisions of WRRDA-2014 requiring compliance with state law, and the Court will deny the Corps' motion to dismiss for lack of prudential standing.

         D. The Corps' Motion to Dismiss - 33 U.S.C. § 2232

         The Corps next argues the Court should dismiss Count I in the DNR's Complaint and part of Count IV in JPA's Complaint for failing to state a claim upon which relief may be granted. The Corps asserts that section 2232 does not apply to the Project.

         To address the Corps' argument, the Court must interpret the statute. The Court begins with the statute's plain language. Leocal v. Ashcroft, 543 U.S. 1, 8 (2004). “Courts resort to legislative history and other sources to guide their interpretation only if the meaning of the statute is ambiguous.” United States v. Plummer Excavating, Inc., 65 F.Supp.2d 1013, 1015 (D. Minn. 1999).

         The Corps argues section 2232 does not apply because the section only applies when non-Federal sponsors carry out a “water resource development project” independently. But nowhere in the language of the statute did Congress express this limitation. Congress entitled section 2232 “Construction of water resources development projects by non-Federal interests” and defined “water resources development project” broadly, to include “a project recommendation that results from . . . a final feasibility study for water resources development and conservation and other purposes that is specifically authorized by Congress to be carried out by the Secretary.” The parties do not dispute that this definition describes the Project.

         Congress then expressly laid out the authority for a non-Federal interest to “carry out a water resources development project, or a separable element thereof” on the condition that “[b]efore carrying out” a project the non-Federal interest “obtain any permit or approval required in connection with the project or separable element under Federal or State law.” 33 U.S.C. § 2232(b) (emphasis added). Nowhere in section 2232 did Congress provide that the authority to carry out a water resource development project under section 2232 applies only when the non-Federal interest carries out the project independently. Consequently, what the Corps asks is not a construction of the statute, but, in effect, a limitation on the statute's applicability that Congress allegedly omitted by inadvertence. King v. IRS, 688 F.2d 488, 491 (7th Cir. 1982) (“[C]ourts have no right, in the guise of construction of an act, to either add words to or eliminate words from the language used by congress.” (quoting DeSoto Sec. Co. v. Comm'r, 235 F.2d 409, 411 (7thCir. 1956))). Supplying an omission, as the Corps requests, “transcends the judicial function, ” Nichols v. United States, 136 S.Ct. 1113, 1118 (2016) (quoting Iselin v. United States, 270 U.S. 245, 251 (1926)), and the Court will not add such a limitation here.

         Further, while located in the “Credit and Reimbursement” subsection, Congress expressly requires the Corps to “monitor and audit any water resources development project, or separable element . . . constructed by a non-Federal interest under this section to ensure that . . . the construction is carried out in compliance with the requirements of this section.” 33 U.S.C. § 2232(d)(4) (emphasis added).

         As set forth above, the statute broadly defines the phrase “water resources development project” to include the Project at issue here. Id. § 2232(a)(3). And numerous places in the statute use the phrase “under this section” or similar language to refer to all of section 2232. See, e.g., id. § 2232(a) (“In this section”); id. § 2232(b)(2) (“under this section”); id. § 2232(d)(1), (4), (5) (“under this section”); id. § 2232(e) (“under this section”). Further, section 2232 particularly identifies subsections when Congress deemed it necessary, see, e.g., id. § 2232(c) (“undertaken under subsection (b)”); id. § 2232(d)(1)(B) (“identified under subsection(b)(1)(B)”); id. § 2232(d)(5) (“under this subsection”), eliciting Congress' cognizance of the difference between the word “section” and “subsection.” Thus, based on the plain language of the statute, the monitoring requirement in section 2232(d)(4) includes a duty to monitor projects carried out under the authority delineated in section 2232(b).

         The Corps' own assertions during the process of approving the Project - which were first disclosed in documents provided in discovery after the hearing on this matter - appear to support the Court's interpretation of section 2232.[7] In a ...


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