CADDNAR

[CITE: Ogden Dunes v. Army Corps & DNR, 12 CADDNAR 137 (2009)]

 

[VOLUME 12, PAGE 137]

 

Cause#: 09-104W

Caption: Ogden Dunes v. Army Corps & DNR

Administrative Law Judge: Lucas

Attorneys: Lukmann (Ogden Dunes); Sabo (Army Corps); Wyndham (DNR)

Date: August 26, 2009

 

 

FINAL ORDER OF DISMISSAL

 

The Town of Ogden Dunes has moved to voluntarily dismiss this proceeding.  Being duly advised, the motion is granted.  Pursuant to 312 IAC 3-1-9(a), a final order of dismissal is entered.  As a consequence of the Town’s dismissal, the proposed dismissal for failure to state an actionable claim is vacated. 

 

A person who wishes to seek judicial review must file a petition for review in an appropriate court within 30 days and must otherwise comply with IC 4-21.5-5.  Service of a petition for judicial review is also governed by 312 IAC 3-1-18.

 

 

FINDINGS

 

A. Failure to State a Claim on Which Relief Can be Granted

 

1. On June 10, 2009, the Town of Ogden Dunes (“Town”) by Bradley Wood, President of the Ogden Dunes Town Council, filed a “Petition for Administrative Review-Notice of Appeal / Request for Stay” (the “petition”) with the Natural Resources Commission (the “Commission”) with respect to permit LM-163 and permit FW-25073 issued by the Department of Natural Resources (the “DNR”) in favor of the United States Army Corps of Engineers, Chicago District (the “Army Corps”).  The petition stated in substantive parts as follows:

 

The Town of Ogden Dunes, an Indiana municipal corporation, located on the shore of Lake Michigan in Porter County, Indiana (“Town”) files this appeal of [DNR’s] approvals of LM-163 and FW-25073 and petitions for administrative review and requests a stay of all actions contemplated by said approvals.

 

Town owns an approximately one-mile public municipal beach on the southern shore of Lake Michigan in the area of the applicants proposed maintenance dredging of the Portage-Burns Waterway Boat Harbor, (“Ogden Dunes Beach”).  The Ogden Dunes Beach is a high erosion hazard area that has been severely adversely impacted by sand starvation caused by the Portage-Burns Boat Harbor and Burns Harbor Port of Indiana structures.

 

Town objects as follows:

 

1) To the “…Lake Michigan open water disposal site offshore in 50’ of water…” disposal of suitably clean dredged materials.  [Town requests this provision be deleted.]

 

2) To the “…out to a maximum of 18’ of water depth…” in the litoral zone disposal of suitably clean dredged materials.  [Town proposes this depth be reduced to 6’ maximum depth and within 400’ of the shoreline in all areas and references of the permit.]

 

[VOLUME 12, PAGE 138]

 

3) To special condition (4) restricting all activities within 30 meters of the shipwreck located on the Ogden Dunes Beach just West of East Hill Road.  [Town proposes the protection zone be reduced to 10 meters.]

 

4) To special condition (8) royalty waiver.  [Town proposes the royalty be waived only if suitably clean dredged materials are placed as beach nourishment and for non-suitably dredged materials to be placed in a landfill.]

 

5) The permit does not contain explicit language authorizing placement of the suitably clean dredged materials from Applicant’s project Unit #1 directly upon the Ogden Dunes Beach (within Disposal Area #1) in coordination with Town of Ogden Dunes government officials.  [Town proposed the addition of this condition.]

 

6) The permit generally has no condition requiring the Applicant (or its contractor) coordinate with Town of Ogden Dunes government officials.  [Town proposed the addition of this requirement.]

 

7) Other objections reserved.

 

The Town will sustain irreparable damages and harm should this stay and administrative review not be upheld.

 

Emphasis supplied by Town.

 

2. The petition initiated a proceeding that is governed by IC 4-21.5 (sometimes referred to as the “Administrative Orders and Procedures Act” or “AOPA”) and rules adopted by the Commission at 312 IAC 3-1 to assist with its implementation of AOPA.

 

3. On November 6, 2008, the Army Corps sought permits from the DNR with regard to Army Corps performance of maintenance dredging in Portage-Burns Waterway and the Burns Small Boat Harbor.  The purpose of the dredging was to maintain the Federal navigation channel in the Portage-Burns Waterway and the small boat refuge in the Burns Small Boat Harbor because the entrance channel and harbor are heavily shoaled.  The operation and maintenance of the Portage-Burns Waterway and the Burns Small Boat Harbor were authorized by Section 107 of the 1960 River, Harbor and Flood Control Act.  The DNR identified the State permits as LM-163 and FW-25073.

 

4. In approving with conditions LM-163 and FW-25073, the DNR was conducting licensure.  A “license” refers to a “franchise, permit, certification, approval, registration, charter, or similar form of authorization required by law.”  IC 4-21.5-1-8.

 

5. An “order” refers to “an agency action of particular applicability that determines the legal rights, duties, privileges, immunities, or other legal interests of one (1) or more specific persons” and includes a “license”.  IC 4-21.5-1-9.

 

6. AOPA sets forth the minimum requirements for demonstrating standing to obtain administrative review of an order at IC 4-21.5-3-7(a).  As applied to this proceeding, subsection (a) provides:

 

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(a) …. To qualify for review of any…order described in section 4, 5, or 6 of this chapter, a person must petition for review in a writing that does the following:

(1) States facts demonstrating that:

(A) the petitioner is a person to whom the order is specifically directed;

(B) the petitioner is aggrieved or adversely affected by the order; or

(C) the petitioner is entitled to review under any law.

 

7. LM-163 and FW-25073 are specifically directed to the Army Corps as the applicant for the licenses.  The Town does not qualify for relief under IC 4-21.5-3-7(a)(1)(A).

 

8. The activities anticipated by LM-163 and FW-25073 would be performed within the Indiana waters of Lake Michigan and within Portage-Burns Waterway.  These are navigable waters.  “Roster of Indiana Waterways Declared Navigable or Nonnavigable”, Natural Resources Commission Information Bulletin (Third Amendment), Indiana Legislative Services Agency, 20080611-IR-312080426NRA (June 11, 2008).  See, also, U.S. v. Fabian, 522 F. Supp. 1078 (N.D. Ind. 2007).

 

9. “Congress no doubt possesses the power to protect navigable waters of the country, which it can exercise by its own enactments or by the delegation of authority to… the Corps of Army Engineers.”  United States v. Republic Steel Corporation, 264 F.2d 289, 295 (U.S.C.A., 7^th Cir. 1959), cert. den. 79 S. Ct. 1150 (1959).

 

10. “’All navigable waters are under the control of the United States for the purpose of regulating and improving navigation, and although the title to the shore and submerged soil is in the various states an[d] individual owners under them, it is always subject to the servitude in respect of navigation created in favor of the Federal government by that Constitution.’  Union Bridge Co. v. United States, 204 U.S. 364, 389-90, 27 S. Ct. 367, 51 L. Ed. 523 (1907)….  Further, through the ‘power of Congress to regulate commerce’ that power is vested in the legislative branch.  Id.”  Matheny v. Tennessee Valley Authority, 503 F. Supp. 917, 927 (M.D. Tenn. 2007).

 

11. The “Great Lakes and the lands beneath them remain subject to the federal navigational servitude.  This servitude preserves for the federal government control of all navigable waters ‘for the purpose of regulating and improving navigation….’  Gibson v. United States, 166 U.S. 269, 271-72, 17 S. Ct. 578, 41 L. Ed. 996 (1897).  ‘[A]lthough the title to the shore and submerged soil is in the various States and individual owners under them, it is always subject to the servitude in respect of navigation created in favor of the Federal government by the Constitution.’  Id. at 272, 17 S. Ct. 578.”  Glass v. Goeckel, 709 N.W.2d 58, 64, n. 7 (Mich. 2005).

 

12. The navigational servitude is a dominant servitude, sometimes described as a “superior navigation easement,” which allows the Federal government to exercise its regulatory power over navigable waters in the interests of commerce without compensation for interference with private water rights.  United States v. Virginia Elec. & Power Co., 365 U.S. 624, 627-28, 80 S. Ct. 784, 787-88, 5 L. Ed. 2d 838 (1961).  The servitude “is a concept of power, not of property.”  United States v. Certain Parcels of Land Situated in Valdez, 666 F. 2d 1236, 1238 (9^th Cir. 1982).  It is a “dominant right over navigable waters for purposes of improving and regulating navigation.”  United States v. 119.27 Acres of Land, More or Less, Situated in Plaquemines Parish, La., 663 F. 2d 1328, 1330, n. 5 (5^th Cir. 1981).

 

13. In its petition and in subsequent briefing, the Town does not account for the navigational servitude and the special rights and responsibilities of the Federal government and the Army Corps to manage our navigable waterways.  Huffman is an application of standing to complain under Indiana law as between Indiana citizens.  While the principles of Huffman are applicable, standing must here be framed not in terms of Indiana law but in terms of the navigational servitude enjoyed by the Federal government. 

 

[VOLUME 12, PAGE 140]

 

14. Because the Federal government enjoys this dominant easement, the requisite standing can only be conferred by the United States Congress.  In the absence of Federal legislation, a State cannot issue an order to regulate the Army Corps in its management of navigable waterways.  State law can provide no basis upon which the Town would be aggrieved or adversely affected, under IC 4-21.5-3-7(a)(1)(B), by an Army Corps dredging project to maintain a navigation channel.  The Town can only achieve standing for administrative review under AOPA through IC 4-21.5-3-7(a)(1)(C), and only then if standing is conferred by Federal law.

 

15. The Army Corps recognizes the applicability of the licensure requirements set forth in LM-163 and FW-25073 based upon the Congressional mandates of 33 U.S.C. § 1323.  Subsection 1323(a) provides in part:

(a) Each department, agency, or instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants, and each officer, agent, or employee thereof in the performance of his official duties, shall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of water pollution in the same manner, and to the same extent as any nongovernmental entity including the payment of reasonable service charges. The preceding sentence shall apply (A) to any requirement whether substantive or procedural (including any recordkeeping or reporting requirement, any requirement respecting permits and any other requirement, whatsoever), (B) to the exercise of any Federal, State, or local administrative authority, and (C) to any process and sanction, whether enforced in Federal, State, or local courts or in any other manner. This subsection shall apply notwithstanding any immunity of such agencies, officers, agents, or employees under any law or rule of law….

16. 33 U.S.C. § 1323 must be interpreted to give effect to the intent of Congress that the Army Corps not be hampered in projects to maintain navigation.  State of Minn, by Spannaus v. Hoffman, 543 F. 2d 1198, 1207 (8^th Cir. 1976).

 

17. The forum for review of an Army Corps determination under 33 U.S.C. § 1323 is the Federal Administrative Procedure Act.  The reviewing Federal Court may set aside an Army Corps determination if it was arbitrary, capricious, abuse of discretion, or otherwise not in accordance with law.  National Wildlife Fed. v. U.S. Army Corps, 384 F. 3d 1163 (9^th Cir. 2004).

 

18. The Town did not offer a legal or factual foundation under which 33 U.S.C. § 1323 would establish standing for administrative review under AOPA.

19. Additionally, Congress enacted the Coastal Zone Management Act (“CZMA”) to encourage coastal States, Commonwealths, and Territories to develop programs to help balance competing uses of and impacts to coastal resources.  The CZMA emphasizes the primacy of State decision-making, regarding activities in a coastal zone, with administration at the Federal level by the U.S. Department of Commerce.  Section 307 of the CZMA (16 USC § 1456) is directed to “federal consistency”.  

20. Federal consistency is the CZMA requirement by which Federal agency activities, which have reasonably foreseeable effects on any land or water use or natural resource of the coastal zone, must be consistent to the maximum extent practicable with the “enforceable policies” of a State’s federally approved coastal management program.  ‘‘Federal agency activity’’ refers to a function performed by or on behalf of a Federal agency in the exercise of its statutory responsibilities.  15 CFR § 930.31(a).  The term ‘‘enforceable policy’’ refers to legally binding State constitutions, laws, regulations, land use plans, ordinances, or judicial or administrative decisions, by which a State exerts control over private and public land and water uses and natural resources in the coastal zone. 16 USC 1453(6a).  These are incorporated in an approved State management program.  15 CFR § 930.11.

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21. The Department of Commerce has approved the Indiana coastal program for admission to the CZMA.  The approval includes a grant of federal consistency to the DNR’s Lake Michigan Coastal Program (the “LMCP”).  As of August 12, 2002, “direct federal activities occurring within or outside the Indiana coastal zone that are reasonably likely to affect any land or water use or natural resources of the Indiana coastal zone must be consistent to the maximum extent practicable with the enforceable policies of the LMCP.”  67 Fed. Reg. 52,454 and 52,455 (2002).

22. The activities authorized by LM-163 and FW-25073 are presumed for the purposes of this entry to be located in the Indiana coastal zone.

23. But 16 USC § 1456 also does not confer the requisite standing upon the Town.  The standing which Congress conferred through CZMA rests exclusively in the State and particularly in the State agency authorized to implement federal consistency.

24. “It is clear that CZMA, which authorizes the Secretary of [the Department of] Commerce to coordinate [F]ederal and State coastal area management plans, is neither a jurisdictional grant, nor a basis for stating a claim upon which relief can be granted.”  Town of North Hemstead v. Village of North Hills, 482 F. Supp 900, 905 (US. Dist. Ct., E.D. New York 1979).

25. “The zone of interests regulated by the CZMA includes a [S]tate’s protection of their coastal zones and not an individual’s attempt to seek further protection once the CZMA requirements have been complied with….  The only party that could potentially bring its concerns, interest, and potential injuries within the zone of interests of the CZMA for a direct Federal action is the [S]tate agency which implements the CZMA in a particular [S]tate….  [N]o provision is made in the CZMA…for private or local entities and individuals to substitute their own interests and judgments for that of the reviewing [S]tate agency.”  Serrano-Lopez v. Cooper, 193 F. Supp. 2nd 424, 434 (D. Puerto Rico 2002).[1]

 

26. The Town did not offer a legal or factual foundation under which 16 USC § 1456 would confer standing.

 

27. The Commission has subject-matter jurisdiction to provide administrative review of a licensure action for both LM-163 and FW-25073, but the Town’s petition was insufficient to support an actionable claim because the Town did not establish the requisite standing. 

 

28. Where subject-matter jurisdiction exists, but a petition for administrative review is found insufficient to demonstrate an actionable claim, an opportunity must be provided to a claimant to file an amended pleading and correct the deficiency.  312 IAC 3-1-10, Trial Rule 12(B)(6), and Indiana Office of Environmental Adjudication v. Kunz, 714 N.E.2d 1190 (Ind. App. 1999) as cited in McCulloch v. Day & Schramm, 12 Caddnar 40, 41 (2009).

 

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29. In a “Notice of Proposed Dismissal for Failure to State an Actionable Claim” entered on August 13, the Town was provided until August 27, 2009 to amend its claim, consistent with Trial Rule 12(B)(6) and Trial Rule 15(A), and to seek to correct the deficiency.

 

B. Town’s Withdrawal of Petition for Administrative Review

 

30. On August 14, 2009, the “Town of Ogden Dunes’ Withdrawal of its Petition for Administrative Review” was filed.  The petition reported the Town participated in a conference with the Army Corps, the Indiana Dunes National Lakeshore (the “National Lakeshore”), and the Indiana Department of Environmental Management (“IDEM”): 

 

The Army Corps of Engineers has represented that the attached disposal area as delineated in Exhibit ‘A’[2] to this motion to withdraw is the only area to be used for the placement of the dredged sand in question.  The Army Corps of Engineers has represented it will now dispose of sand no farther than 300-600 ft. offshore and on the easternmost end of the aforementioned disposal site without impacting navigation.

 

31. In the August 14, 2009 Entry, the administrative law judge reflected that the initiative to achieve an accord was welcomed, but he sought clarification as to intent.  He observed and queried:

The Army Corps is a party to this proceeding.  Neither the National Lakeshore nor IDEM are parties.  More importantly, the Town’s petition does not reference the [DNR], which is a party.  The [DNR] is the state agency with licensing authority for the subject of this administrative review.  Is the mutual intention of the Town and the Army Corps that the disposal site and conditions referenced in the Town’s petition become a condition of LM-163, FW-25073, or both?  If so, does the Department of Natural Resources approve of the condition?  In the alternative, is the intention of the Town of Ogden Dunes and the Army Corps that the disposal site and conditions referenced in the Town’s petition become an independent agreement between them and not a condition of either LM-163 or FW 25-073?  If the latter is the intent, does the DNR object to the condition as conflicting with either LM-163 or FW 25-073?

 

The parties were provided an opportunity to clarify their positions.

 

32. On August 25, 2009, the “Clarification of Town of Ogden Dunes’ Withdrawal of its Petition for Administrative Appeal” was filed.  The clarification stated in substantive parts as follows:

 

The Town of Ogden Dunes’ Motion to Withdrawal its Petition for Administrative Appeal is being done without any condition.  We do not anticipate a permit change as that would be up to the DNR and the Army Corps….  The Town takes the Army Corps…at its word as the contract they are bidding for the disposal of dredged sand does not allow it to be placed in 50 ft. of water.  Additionally, they are evaluating a proposed amendment to the contract to limit disposal between 301 and 600 ft.  Again, the word of the Army Corps… is sufficient for the Town…and it requests that its Petition for Administrative Appeal be withdrawn at this time.

 

33. Also, on August 25, 2009, the “Respondent Department of Natural Resources’ Clarification of its Position Regarding Claimant’s Withdrawal of its Petition for Administrative Appeal” was filed.  This clarification stated in substantive parts as follows:

 

1. Permits #LM-163 and FW-25073 issued to the Army Corps…, do not have to be amended or altered to incorporate the apparent agreement reached between the…Town and the Army Corps….

 

2. The [DNR’s] only concerns are whether or not the Army Corps…were able to amend or modify its bid documents to its contractor(s) in order to place any displaced sand material as close as possible to the 300 foot line and as much as possible on the eastern end of the disposal area; and whether the Army Corps…can or will agree to this apparent agreement for disposal in future years as the permits issued by the [DNR’s] Division of Water are valid for a period of five (5) years.  The [DNR] will not object to the apparent agreement between the Army Corps…and the Town…as long as the agreement does not violate any terms of either Permit #LM-163 or FW-25073.

 

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34. Parties to the review of a DNR license may enter a private agreement outside the parameters of the license.  The private agreement cannot modify the terms of the license, and they cannot form a basis for administrative review if a signatory to the private agreement later avers the agreement was breached.  A proper forum may exist for the enforcement of a private agreement, but the forum is not the Commission.  Roebel, et al. v. Vorndran, et al., 11 Caddnar 250 (2008), affirmed on judicial review in Vorndran v. Roebel, Cause No. 76DO1-0802-MI-76, Steuben Superior Court (2009).

 

35. The terms of the agreement between the Town and the Army Corps are outside the jurisdiction of the Commission.  Similarly, any relationship between the Army Corps and a contractor for the Army Corps is outside the Commission’s jurisdiction.  As acknowledged by the Town, the agreement between it and the Army Corps cannot modify the terms of LM-163 and FW-25073.  Neither can the agreement be subsequently enforced through the Commission.

 

36. With the August 25, 2009 clarifications by the Town and the DNR, the Town’s voluntary petition to withdraw its petition for administrative review should be granted.  Upon granting the petition to withdraw, the proposed dismissal for failure to state an actionable claim should be vacated.