National Ass'n of Home Builders v. U.S. Army Corps of Engineers

 United States Court of Appeals
        FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued October 14, 2005         Decided February 3, 2006


                      No. 04-5221

       NATIONAL ASSOCIATION OF HOME BUILDERS,
                    APPELLANT

                           v.

          U.S. ARMY CORPS OF ENGINEERS ET AL.,
                      APPELLEES




                      No. 04-5222

              NATIONAL STONE, SAND AND
              GRAVEL ASSOCIATION ET AL.,
                    APPELLANTS

                           v.

          U.S. ARMY CORPS OF ENGINEERS ET AL.,
                      APPELLEES
                                2

                    No. 04-5223 & 04-5224

          NATIONAL WILDLIFE FEDERATION;
  NORTH CAROLINA WILDLIFE FEDERATION; SIERRA CLUB,
                   APPELLANTS

                                v.

           U.S. ARMY CORPS OF ENGINEERS ET AL.,
                       APPELLEES


        Appeals from the United States District Court
                for the District of Columbia
                      (No. 01cv00274)
                      (No. 01cv00320)


    Rafe Petersen argued the cause for the joint appellants,
National Association of Home Builders and National Stone,
Sand and Gravel Association et al. Lawrence R. Liebesman,
Virginia S. Albrecht, Karma B. Brown, Duane J. Desiderio and
Felicia K. Watson were on brief. Ethan Arenson entered an
appearance.
    John A. Bryson, Attorney, United States Department of
Justice, argued the cause for the federal appellees, United States
Army Corps of Engineers et al. Greer S. Goldman, Angeline
Purdy and Ronald M. Spritzer, Attorneys, United States
Department of Justice, were on brief.
   Howard I. Fox argued the cause for the environmental
appellees/cross-appellants, National Wildlife Federation et al.
    M. Reed Hopper was on brief for amicus curiae Pacific
Legal Foundation in support of the appellants. Robin L. Rivett
entered an appearance.
                                  3

  Before: GINSBURG, Chief Judge, and HENDERSON and
RANDOLPH, Circuit Judges.
    Opinion for the court filed by Circuit Judge HENDERSON.
    KAREN LECRAFT HENDERSON, Circuit Judge: The appellant
organizations, the National Association of Home Builders,
National Stone, Sand and Gravel Association, American Road
and Transportation Builders Association and the Nationwide
Public Projects Coalition, (collectively, Industry) brought these
actions in the district court to challenge a regulation jointly
promulgated by the United States Environmental Protection
Agency (EPA) and the United States Army Corps of Engineers
(Corps) to implement the Clean Water Act (CWA). See Further
Revisions to the Clean Water Act Regulatory Definition of
“Discharge of Dredged Material,” 66 Fed. Reg. 4550, 4575 (Jan.
17, 2001) (codified at 33 C.F.R. § 323.3 and 40 C.F.R. § 232.2).1
Section 404(a) of the CWA authorizes the Corps to issue permits
to discharge “dredged or fill material” into navigable waters. 33
U.S.C. § 1344(a). Under the Corps’ regulations, permits are
“required for the discharge of dredged or fill material into waters
of the United States.” 33 C.F.R. § 323.3(a). The challenged
portions of the regulation provide that the Corps will “regard the
use of mechanized earth-moving equipment” in waters as
resulting in such “a discharge” (requiring a permit) unless
“project-specific evidence” shows that the dredging results in
“only incidental fallback” and defines “[i]ncidental fallback” as
“redeposit of small volumes of dredged material incidental to
excavation activity” if the material “falls back to substantially
the same place as the initial removal.” Id. § 323.2(d)(2)(i), (ii);
see also 40 C.F.R. § 232.2(2)(i), (ii). Industry objects to the two


    1
     The Corps has jurisdiction under CWA section 404, 33 U.S.C. §
1344, over discharge of dredged and fill material; EPA has jurisdiction
under CWA section 402, 33 U.S.C. § 1342, over discharge of other
pollutants.
                                4

cited provisions of section 323.2 on the grounds that (1) the first
creates an impermissible rebuttable presumption that all
dredging results in unlawful discharge and (2) the second
defines “incidental fallback” in terms of volume and thereby
exceeds the scope of the Corps’ authority under CWA section
404. The district court dismissed the actions for lack of
ripeness. Nat’l Ass’n of Home Builders v. U.S. Army Corps of
Eng’rs, 311 F. Supp. 2d 91 (D.D.C. 2004). Reviewing the
district court’s dismissal de novo, Battle v. FAA, 393 F.3d 1330,
1332 (D.C. Cir. 2005); Pub. Citizen v. Dep’t of State, 276 F.3d
634, 640 (D.C. Cir. 2002), we conclude Industry’s challenge to
the regulation is ripe for review and, accordingly, reverse and
remand to the district court.
                                I.
    Section 301 of the CWA generally prohibits “the discharge
of any pollutant,” 33 U.S.C. § 1311(a), which is defined in
relevant respect as “any addition of any pollutant to navigable
waters from any point source,” id. § 1362(12). The Congress
created an exception to the general prohibition for a discharge
that is “in compliance with [section 1311] and sections 1312,
1316, 1317, 1328, 1342, and 1344 of [Title 33].” Id. § 1311(a).
Section 404 of the CWA (referenced in the statutory exception
as section 1344 of Title 33) provides that the Corps “may issue
permits, after notice and opportunity for public hearings[,] for
the discharge of dredged or fill material into the navigable
waters at specified disposal sites.” Id. § 1344 (alteration added).
In 1986 the Corps issued a regulation which defined “discharge
of dredged material” as “any addition of dredged material into
the waters of the United States” but stipulated that “[t]he term
does not include de minimis, incidental soil movement occurring
during normal dredging operations.” Final Rule for Regulatory
Programs of the Corps of Engineers, 51 Fed. Reg. 41,206,
41,232 (Nov. 13, 1986) (to be codified at 33 C.F.R. § 323.2(d)).
Thus, a permit was required only for dredging activity that
                                   5

resulted in a “discharge” under this definition. In 1993, as part
of a settlement agreement in North Carolina Wildlife Fed’n v.
Tulloch, No. C90-713-CIV-5-BO (E.D.N.C.) (stipulated
dismissal Mar. 4, 1992), the Corps and EPA amended the
regulation to define “discharge of dredged material” as “any
addition of dredged material into, including any redeposit of
dredged material within, the waters of the United States,”
without the de minimis exception. Clean Water Act Regulatory
Programs, 58 Fed. Reg. 45,008, 45,035 (Aug. 25, 1993)
(codified at 33 C.F.R. § 323.2(d)(1) and 40 C.F.R. § 232.2(1);
emphasis added).2 This expanded definition of “discharge” in
the regulation, commonly called the “Tulloch Rule” or “Tulloch
I,” broadened the scope of activity for which a dredging permit
was required.
    Industry trade associations immediately filed an action
challenging the amended definition and the district court issued
a decision invalidating the regulation. Am. Mining Cong. v. U.S.
Army Corps of Eng’rs, 951 F. Supp. 267 (D.D.C. 1997). On
appeal, this court affirmed the district court, concluding that “the
straightforward statutory term ‘addition’ cannot reasonably be
said to encompass the situation in which material is removed
from the waters of the United States and a small portion of it
happens to fall back.” Nat’l Mining Ass’n v. U.S. Army Corps
of Eng’rs, 145 F.3d 1399, 1404 (D.C. Cir. 1998). We explained
that, “[b]ecause incidental fallback represents a net withdrawal,
not an addition, of material, it cannot be a discharge” and
questioned “how there can be an addition of dredged material



    2
     The amended regulation did provide an exemption for “any
incidental addition, including redeposit, of dredged material associated
with any activity that does not have or would not have the effect of
destroying or degrading an area of waters of the United States.” 58
Fed. Reg. at 45,036 (codified at 33 C.F.R. § 323.2(d)(4)(i) and 40
C.F.R. § 232.2(3)(i)).
                               6

when there is no addition of material.” Id. at 1404 (emphasis
original).
   In 2000 the Corps and EPA proposed a new rule which
added the following language to the definition:
   A discharge of dredged material shall be presumed to
   result from mechanized landclearing, ditching,
   channelization, in-stream mining, or other mechanized
   excavation activity in waters of the United States. This
   presumption is rebutted if the party proposing such an
   activity demonstrates that only incidental fallback will
   result from its activity.
Further Revisions to the Clean Water Act Regulatory Definition
of “Discharge of Dredged Material,” 65 Fed. Reg. 50,108,
50,117 (Aug. 16, 2000) (to be codified at 33 C.F.R. §
323.2(d)(2) and 40 C.F.R. § 232.2(i)). In 2001 the Corps and
EPA issued a final rule, known as “Tulloch II,” which replaced
the rebuttable presumption framework with the following
provision:
   The Corps and EPA regard the use of mechanized
   earth-moving equipment to conduct landclearing,
   ditching, channelization, in-stream mining or other
   earth-moving activity in waters of the United States as
   resulting in a discharge of dredged material unless
   project-specific evidence shows that the activity results
   in only incidental fallback. This paragraph (i) does not
   and is not intended to shift any burden in any
   administrative or judicial proceeding under the CWA.
66 Fed. Reg. at 4575 (codified at 33 C.F.R. § 323.2(d)(2)(i) and
40 C.F.R. § 232.2(2)(i) (emphasis added)). The final rule
further added a definition of “incidental fallback” (with
examples):
                                   7

    Incidental fallback is the redeposit of small volumes of
    dredged material that is incidental to excavation activity
    in waters of the United States when such material falls
    back to substantially the same place as the initial
    removal. Examples of incidental fallback include soil
    that is disturbed when dirt is shoveled and the back-spill
    that comes off a bucket when such small volume of soil
    or dirt falls into substantially the same place from which
    it was initially removed.
Id. (codified at 33 C.F.R. § 323.2(d)(2)(ii) and 40 C.F.R. §
232.2(2)(ii) (emphasis added)).
    On February 6, 2001 Industry filed this action under the
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq., (APA)
challenging “Tulloch II” as exceeding the Corps’ and EPA’s
statutory authority.3 In a decision dated March 31, 2004, the
district court (treating the agencies’ summary judgment motion
as a motion to dismiss) granted the motion, concluding that
Industry’s challenge was not ripe because (1) the issues would
not be fit for review until the Corps actually applied them in
concrete factual situations and (2) delaying review would



    3
      The intervenor-appellees, three environmental organizations,
contend the district court lacked jurisdiction under the APA because
section 323.2(d)(2) implements section 301(a) rather than section 404
of the CWA and therefore exclusive jurisdiction to decide a challenge
lies with the courts of appeals under CWA section 509(b)(1)(E), 33
U.S.C. § 1369(b)(1)(E) (vesting jurisdiction in courts of appeals for
“[r]eview of the Administrator’s action . . . in approving or
promulgating any effluent limitation or other limitation under section
1311 [of Title 33]”). “Tulloch II,” like “Tulloch I,” plainly
implements section 404 in prescribing when a permit is required and
is therefore properly challenged in the district court under the APA, as
occurred in National Mining Ass’n. See 145 F.3d at 1404 (discussing
district court’s ability to enjoin application of “Tulloch I”).
                                8

impose no hardship on Industry members. Industry filed timely
notices of appeal of the order of dismissal.
                                II.
    “Ripeness is a justiciability doctrine designed ‘to prevent the
courts, through avoidance of premature adjudication, from
entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from
judicial interference until an administrative decision has been
formalized and its effects felt in a concrete way by the
challenging parties.’ ” Nat’l Park Hospitality Ass’n v. Dep’t of
Interior, 538 U.S. 803, 807-08 (2003) (quoting Abbott Labs. v.
Gardner, 387 U.S. 136, 148-49 (1967)); accord Ohio Forestry
Ass’n v. Sierra Club, 523 U.S. 726, 732-33 (1998).
“Determining whether administrative action is ripe for judicial
review requires us to evaluate (1) the fitness of the issues for
judicial decision and (2) the hardship to the parties of
withholding court consideration.” Nat’l Park Hospitality Ass’n,
538 U.S. at 808 (citing Abbott Labs., 387 U.S. at 149). As we
recently restated:
    Under the [ripeness] doctrine’s first prong, “we look to
    see whether the issue is purely legal, whether
    consideration of the issue would benefit from a more
    concrete setting, and whether the agency’s action is
    sufficiently final.” Clean Air Implementation Project v.
    EPA, 150 F.3d 1200, 1204 (D.C. Cir. 1998) (internal
    quotation marks omitted), cert. denied sub nom.
    Appalachian Power Co. v. EPA, 527 U.S. 1021 (1999).
    And under the second, we consider “not whether [the
    parties] have suffered any ‘direct hardship,’ but rather
    whether postponing judicial review would impose an
    undue burden on them or would benefit the court.”
    Harris [v. FAA, 353 F.3d 1006, 1012 (D.C. Cir. 2004)];
    see also Ohio Forestry Ass’n v. Sierra Club, 523 U.S.
                                9

   726, 733 (1998); AT&T v. FCC, 349 F.3d 692, 700, 702
   (D.C. Cir. 2003).
Village of Bensenville v. FAA, 376 F.3d 1114, 1120 (D.C. Cir.
2004) (emphasis original; alterations added; parallel citations
omitted).
    The district court acknowledged that the issues raised are
“purely legal” and “[f]inality is not a problem” but concluded
Industry’s challenge was not fit for review because “both the
court and the agencies would benefit from letting the questions
presented here ‘arise in some more concrete and final form.’ ”
311 F. Supp. 2d at 97-98 (quoting State Farm Mut. Auto. Ins.
Co. v. Dole, 802 F.2d 474, 479 (D.C. Cir. 1986)). In so
concluding, the district court adopted the defendants’ position
that “determining what is a regulable discharge will require
project-specific, case-by-case analysis,” 311 F. Supp. 2d at 98,
as alluded to in the “Tulloch II” preamble:
   [T]he determination of whether an activity results in a
   regulable discharge of dredged material or produces only
   incidental fallback involves consideration of the location
   and the amount of the redeposit. Because of the
   fact-specific nature of the assessment of these factors,
   and their interrelated nature, we do not believe it to be
   feasible or appropriate to establish hard and fast cut-off
   points for each of these factors. Rather, the totality of
   the factors will be considered in each case.
66 Fed. Reg. at 4553. We conclude that the district court’s
reasoning does not support postponing review for lack of
ripeness.
    While the final determination of whether to require a permit
in a given case will, as is usual in an agency adjudication, rest
on case-specific findings, this fact does not diminish the fitness
of “Tulloch II” for review. Industry objects to two features of
the regulation: (1) the decision to “regard” any earth-moving
                                10

activity in United States waters “as resulting in a discharge of
dredged material unless project-specific evidence shows”
otherwise, which Industry claims simply restates (rather than
deleting) the allegedly impermissible rebuttable presumption
framework included in the proposed rule, and (2) the focus on
volume to determine whether or not activity resulting in fallback
is “incidental,” cf. Nat’l Mining Ass’n, 145 F.3d at 1404
(“Because incidental fallback represents a net withdrawal, not an
addition, of material, it cannot be a discharge.”). All agree that
the issues raised are “purely legal.” “[A] purely legal claim in
the context of a facial challenge, such as [Industry’s] claim, is
‘presumptively reviewable.’ ” Nat’l Ass’n of Home Builders v.
U.S. Army Corps of Eng’rs, 417 F.3d 1272, 1282 (D.C. Cir.
2005) (quoting Nat’l Mining Ass’n v. Fowler, 324 F.3d 752, 757
(D.C. Cir. 2003)). The legality vel non of the two challenged
features will not change from case to case or become clearer in
a concrete setting. As in National Mining Ass’n, Industry’s
objection is to the “faithful application” of the regulation, 145
F.3d at 1408 (emphasis original), which Industry claims facially
exceeds the agencies’ statutory authority, and is not “intertwined
with how the Commission might exercise its discretion in the
future,” Sprint Corp. v. FCC, 331 F.3d 952, 954 (D.C. Cir.
2003). As in National Mining Ass’n, the ripeness doctrine is
inapplicable because Industry’s claim rests not “on the
assumption that the agency will exercise its discretion
unlawfully” in applying the regulation but on whether “its
faithful application would carry the agency beyond its statutory
mandate,” 145 F.3d at 1408 (internal citation omitted; emphasis
original).
    Turning to the hardship prong of the ripeness test, we find
that it poses no obstacle to Industry. It is true that if the court
“ ‘ha[s] doubts about the fitness of the issue for judicial
resolution,’ ” it will “ ‘balance the institutional interests in
postponing review against the hardship to the parties that will
result from delay.’ ” Nat'l Mining Ass'n v. Fowler, 324 F.3d 752,
                                11

756 (D.C. Cir. 2003) (quoting Consol. Rail Corp. v. United
States, 896 F.2d 574, 577 (D.C. Cir. 1990)). Nonetheless,
where, as is the case here, “ ‘there are no significant agency or
judicial interests militating in favor of delay, [lack of] hardship
cannot tip the balance against judicial review.’ ” Id. at 756-57
(quoting Consol. Rail Corp., 896 F.2d at 577). Moreover, it is
obvious that Industry will face hardship if review of its
challenge is denied for, if left intact, section 323.2(d)(2) will
subject to the permitting process every party that engages in
dredging which results in more than “incidental” fallback, as
determined using the regulation’s allegedly unlawful framework
and volume determinant. Each such dredger therefore faces the
choice of applying for a permit for activities Industry claims are
outside the scope of the Corps’ and EPA’s authority under
section 404 or face civil or criminal enforcement penalties for
failing to do so, see 33 U.S.C. § 1319(b), (c), (d). Thus, the
regulation is reviewable as “ ‘a substantive rule which as a
practical matter requires the [appellants] to adjust [their]
conduct immediately.’ ” Nat’l Park Hospitality Ass’n, 538 U.S.
at 808 (quoting Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 891
(1990)).
    For the foregoing reasons, we conclude that Industry’s
challenge is ripe for review. Accordingly, we reverse the district
court’s order of dismissal and remand for review of the merits
of Industry’s challenge.
                                                      So ordered.