Ocean Advocates v. US Army Corps of Engineers

Citations: 167 F. Supp. 2d 1200; 53 ERC (BNA) 1661; 2001 U.S. Dist. LEXIS 17035; 2001 WL 1222543Docket: C00-1971L

Court: District Court, W.D. Washington; October 10, 2001; Federal District Court

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In the case Ocean Advocates v. United States Army Corps of Engineers, the United States District Court for the Western District of Washington addressed three motions for summary judgment related to a lawsuit filed under the Administrative Procedure Act (APA). Plaintiffs, including Ocean Advocates and other environmental groups, challenged the Corps' decision to issue and extend a permit for Atlantic Richfield Company (ARCO) to construct an addition to its refinery dock at Cherry Point, Washington. The plaintiffs sought declaratory and injunctive relief, arguing that the Corps violated the Magnuson Amendment of the Marine Mammal Protection Act, the National Environmental Policy Act (NEPA), and procedural regulations under the Rivers and Harbors Act by not preparing an Environmental Impact Statement (EIS) or allowing public comment.

The Corps countered with a cross-motion for summary judgment, asserting compliance with all relevant laws. ARCO joined the Corps in opposing the plaintiffs and additionally claimed that Ocean Advocates lacked standing and was barred by laches from pursuing its claims regarding the Magnuson Amendment. The court determined that there were no genuine issues of material fact and that the case could be resolved through summary judgment.

After reviewing the administrative record and hearing oral arguments, the court denied Ocean Advocates' motion, granting summary judgment to the Corps and ARCO. It concluded that the Corps' actions did not violate the Magnuson Amendment or NEPA. Furthermore, the court ruled that Ocean Advocates lacked a private right of action under the Rivers and Harbors Act. The order also included a detailed factual background regarding the permit process and addressed standing, laches, and the standard of review.

The Court examines several legal issues regarding the Corps' actions related to the ARCO permit, specifically focusing on potential violations of the Magnuson Amendment, NEPA, and Section 10 of the Rivers and Harbors Act. Cherry Point, designated as a "heavy impact industrial" zone, hosts major industrial facilities including the ARCO refinery. The initial permit for the ARCO refinery was issued in 1969, with the refinery constructed in 1971 to process Alaskan North Slope crude oil. ARCO initially built only the southern half of the dock, postponing the northern half until necessary.

On May 5, 1992, ARCO applied to construct the northern dock extension, which would significantly increase berthing capacity. The Corps announced ARCO's application on June 3, 1992, receiving feedback from the U.S. Fish and Wildlife Service (FWS) and local tribes regarding environmental concerns, particularly about potential oil spills and impacts on benthic vegetation. ARCO addressed these concerns, asserting that the extension would mitigate spill risks and not harm benthic vegetation.

Negotiations led to mitigation agreements with the Lummi Indian Nation and Nooksack Indian Tribe, who later withdrew their objections. During this period, the marbled murrelet was listed as a threatened species, prompting the Corps to request assessments from ARCO on the project’s impact on these birds and other marine life. After confirming no adverse effects, the Corps granted ARCO a permit under the Rivers and Harbors Act on March 1, 1996, allowing for the construction of the dock extension, which was to be completed by March 1, 2001. The Corps also issued a Finding Of No Significant Impact and an Environmental Assessment. Subsequently, Ocean Advocates raised concerns regarding potential violations of the Magnuson Amendment related to the permit issued to ARCO in 1996.

Ocean Advocates requested the Corps to reopen the permit review for a cumulative impact analysis, which the Corps denied, incorrectly asserting that the refinery was at capacity and that the dock extension would not increase crude oil volume. On September 29, 1999, Ocean Advocates’ counsel sought reconsideration, disputing the Corps' capacity claim and urging examination of cumulative vessel traffic impacts and the Magnuson Amendment. The Corps requested additional information from Ocean Advocates regarding ARCO's refinery capacity and a July 1999 Screening Level Ecological Risk Assessment. On November 11, 1999, Ocean Advocates provided the requested information.

In March 2000, ARCO responded to Ocean Advocates’ comments on the Magnuson Amendment and sought a one-year permit extension to complete the dock extension. The Corps consulted with the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service due to several salmonid species being listed as threatened under the Endangered Species Act (ESA). ARCO submitted a Biological Evaluation, updated in April and May 2000, assessing potential impacts on various species, concluding no adverse effects on most while categorizing Chinook and Coho salmon as "may affect, not likely to adversely affect."

On June 13, 2000, FWS concurred with the Biological Evaluation, and the National Marine Fisheries Service agreed with its findings regarding salmonids. Ocean Advocates requested a public notice for the permit extension on May 2, 2000, which the Corps denied. Subsequently, the Corps sought further information from ARCO on the Magnuson Amendment and received responses regarding compliance and cumulative impacts.

On June 29, 2000, the Corps approved ARCO’s permit extension, issued an amended Environmental Assessment (EA) and Finding of No Significant Impact (FONSI), acknowledging its prior error about refinery capacity but deeming it non-critical. Ocean Advocates learned of the extension on the same day and filed a lawsuit on November 21, 2000.

ARCO contended that Ocean Advocates lacked standing regarding the Magnuson Amendment claims, highlighting the constitutional and prudential requirements for standing, which include demonstrating an injury in fact that is traceable to the defendant's actions and likely to be redressed by a favorable court decision.

Plaintiffs in environmental cases can demonstrate injury in fact by showing a personal connection to the affected area and asserting that alterations will diminish their enjoyment of it, as established in Ecological Rights Foundation v. Pacific Lumber Co. They may also prove injury by indicating an increased risk of harm associated with a statutory violation. Under the Administrative Procedure Act (APA), plaintiffs must show they are adversely affected by agency actions relevant to a statute, falling within the "zone of interests" it protects. This standard is not difficult to meet. Individual members of the plaintiff organizations claim harm to their aesthetic enjoyment and use of the area due to the proposed extension of the ARCO dock, which they believe will lead to increased tanker traffic. Commercial fisherman Dan Crawford argues that this traffic will disrupt his fishing activities, while Brad and Marie Johnson express concerns over erosion and loss of enjoyment of their beachfront property. ARCO contends that these issues are not unique to oil tankers but apply to all vessels. However, the court recognizes that ARCO's tankers contribute to the plaintiffs' alleged losses. The plaintiffs have established injury in fact linked to the dock extension, and their concerns are redressable by the court. Furthermore, regarding the Magnuson Amendment, which aims to restrict tanker traffic to protect the environment, the plaintiffs demonstrate sufficient interest in the waters to satisfy the zone of interests requirement. Consequently, they meet both constitutional and prudential standing requirements, allowing their claims to be heard.

ARCO's defense of laches, seeking dismissal of Ocean Advocates' claims, requires demonstrating the plaintiffs' lack of diligence and resulting prejudice to ARCO. Laches is a disfavored defense in environmental cases meant to protect public interest. Courts assess diligence by considering whether the plaintiffs communicated their position before suing, the agency's responses, and any developments prompting action. The Ninth Circuit adopts a liberal approach to diligence, as illustrated in Coalition for Canyon Preservation, where a ten-year wait was deemed acceptable due to significant delays in project approvals. Conversely, in Apache Survival Coalition, laches was applied against a tribe that failed to engage despite being informed of agency plans.

In this case, ARCO's dock extension application was public in 1992, with a permit issued in 1996 and a subsequent extension in 2000. Plaintiff Fred Felleman, aware of the project since 1996, raised concerns with the Corps until 1999 and claims ignorance of construction until June 2000, leading to a lawsuit filed in November 2000. The plaintiffs informed the Corps of their concerns prior to the lawsuit, indicating proactive engagement rather than disinterest, distinguishing their actions from those in Apache Survival. As a result, the court finds no lack of diligence on the plaintiffs' part, thereby rendering the laches defense inapplicable.

The court also notes that under the Administrative Procedure Act (APA), it must overturn the Corps' actions if they are found to be arbitrary, capricious, or unlawful, with judicial review limited to the existing administrative record.

An agency is permitted to depend on the reasonable opinions of its experts, even if a court may find opposing views more compelling. When a court reviews an agency's interpretation of a statute, like the Magnuson Amendment, it follows the two-step Chevron framework. First, the court assesses whether Congress has clearly addressed the issue at hand. If so, that intent must be followed. If Congress has not clearly spoken on the matter, the court evaluates if the agency's interpretation is a permissible construction of the statute. In this context, the Army Corps of Engineers (Corps) administers the Magnuson Amendment, not the Department of Transportation as claimed by Ocean Advocates. Thus, the Corps' interpretation is afforded deference under Chevron's standard of review.

The Magnuson Amendment, codified at 33 U.S.C. 476, outlines restrictions on tanker traffic in Puget Sound, emphasizing the area's environmental significance and the risks posed by increased tanker activity. Specifically, it prohibits federal officials from issuing permits that would lead to an increase in crude oil handling at facilities in the relevant waters, unless the oil is for in-state consumption. The crux of the legal issue is whether the Corps violated this Amendment by issuing a 1996 permit and a 2001 permit extension for ARCO's dock, which could potentially increase crude oil handling. The Corps concluded that the dock extension would not increase tanker traffic or the volume of crude oil offloaded at the existing pier, thus aligning with the Magnuson Amendment's restrictions.

The Corps interprets the permit for a "petroleum product loading/unloading facility" as excluding crude oil, as crude oil is defined as oil intended for refining and is not considered a "product." Therefore, the permit does not affect crude oil volume. The Magnuson Amendment addresses increasing the "volume of crude oil capable of being handled" but does not prohibit increases in the actual volume of crude oil handled, nor does it restrict capacity increases if the facility is not operating at maximum capacity. The dock can unload up to 1,200,000 barrels of crude oil per day, while the current refinery rate is 230,000 barrels per day. Ocean Advocates argues that the dock extension would increase the volume of crude oil handled by allowing more tankers to dock, which purportedly contradicts Congressional intent to limit tanker traffic in Puget Sound. However, the Corps maintains that there is no evidence to support that the dock extension would enhance crude oil handling capabilities, as the extension is not designed for that purpose. ARCO has even agreed to an injunction preventing the dock extension from being used for crude oil unloading. Ocean Advocates' request for additional permit provisions to regulate dock operations is denied, as it exceeds the Corps' authority under the Magnuson Amendment. The court finds that the Corps' actions align with Congressional intent, as the Magnuson Amendment aims to limit crude oil volume, not refined oil. Additionally, since the dock is not at maximum capacity, potential modifications to increase tanker traffic do not violate the Magnuson Amendment. The court also dismisses Ocean Advocates' claims that the Corps’ permit decisions were arbitrary or contrary to law, affirming the Corps' interpretation of the Magnuson Amendment. Lastly, regarding NEPA, the agency must assess environmental impacts and may initially conduct an Environmental Assessment (EA) to determine the need for a more comprehensive Environmental Impact Statement (EIS) if significant impacts are identified.

An agency issues a Finding of No Significant Impact (FONSI) when it determines that a project's environmental impact is insignificant. In making this determination, the agency must balance several factors, including unique geographic characteristics, cumulative impacts of related actions, controversy surrounding effects on the human environment, uncertainty or unique risks, adverse effects on endangered species, and compliance with environmental laws. The Court's role is to ensure the agency appropriately considered these factors.

Ocean Advocates contends that the Corps did not adequately assess the environmental impact of the ARCO dock extension before issuing the 1996 permit and FONSI, nor the permit extension and amended FONSI. They argue the Corps overlooked the unique characteristics of Cherry Point, specifically its significance as a spawning ground for Pacific herring and habitat for threatened Chinook salmon. However, the Corps found that pile driving would occur in deep water and would not adversely affect these species or benthic vegetation. The Lummi Indian Nation and Nooksack Tribe withdrew their objections regarding fishing rights. The Corps determined the project's impact on unique characteristics would be negligible, supported by extensive studies of the area.

Regarding cumulative impact, Ocean Advocates argue that the Corps should have prepared an Environmental Impact Statement (EIS) due to the potential cumulative effects of the ARCO dock extension and the Gateway project. They claim the dock extension may lead to increased vessel traffic, which could significantly impact the environment. However, this assertion lacks evidence and is deemed hypothetical; the Corps is not obligated to consider speculative impacts or infeasible alternatives.

The Corps agreed with ARCO that the dock extension's primary purpose was to manage existing tanker traffic rather than accommodate an increase in traffic. This aligns with the precedent set in Seattle Community Council Federation v. FAA and Morongo Band of Mission Indians v. FAA, where courts determined that plans aimed at dealing with current traffic did not necessitate further studies on potential growth-induced impacts. The Corps concluded that, while the dock's increased efficiency might lead to higher traffic, its intent was specifically to address existing conditions, negating the need for additional studies on increased vessel traffic.

Ocean Advocates contended that an Environmental Impact Statement (EIS) was required to evaluate the cumulative impacts of the ARCO dock extension in conjunction with the Gateway project. Although the Corps initially defended its decision against preparing an EIS by arguing the Gateway project was not foreseeable, it later conceded this reasoning was weak. Nevertheless, the Corps maintained there would be no cumulative impact from the ARCO extension since any changes in vessel traffic would be exclusively due to the Gateway project.

Future developments, particularly a proposed marine terminal by Gateway Pacific, could significantly increase vessel traffic in the region. However, studies indicated that the ARCO extension would not have significant direct, indirect, or cumulative effects on vessel traffic or the industrial landscape in Cherry Point. The anticipated impacts from the Gateway project would likely lead to cumulative effects, but the Corps determined that the ARCO dock extension would not contribute to these impacts. Additionally, the establishment of the Cherry Point Aquatic Reserve by the Department of Natural Resources, which restricts further development in the area, supported the Corps' conclusion that there would be no cumulative impact from the dock extension. The Corps' decision was found to be reasonable and was therefore upheld.

Ocean Advocates argued that the Corps was obligated to prepare an Environmental Impact Statement (EIS) due to the high controversy surrounding the ARCO project, citing concerns from the U.S. Fish and Wildlife Service (FWS) and the Lummi and Nooksack tribes. However, the court emphasized that controversy is determined by the potential impact on the human environment rather than the number of opposing voices. The Lummi and Nooksack tribes initially expressed concerns about fishing rights but later withdrew objections after reaching agreements with ARCO. The Corps consulted FWS and acknowledged its concerns, but these did not elevate the project to "highly controversial" status. Opposition from Ocean Advocates and concerns from the Department of Natural Resources (DNR) also did not classify the project as highly controversial. The Corps’ decision to not prepare an EIS was upheld, affirming that it had considered the relevant information adequately.

Regarding uncertainty, plaintiffs highlighted fears of increased vessel traffic and oil spill risks, arguing that maintaining the status quo would prevent potential disasters. The Corps determined that approving ARCO's permit would actually minimize tanker wait times and reduce spill risks. ARCO projected that vessel traffic would increase regardless of the dock extension, driven by market forces, evidenced by a 30% rise in traffic over eight years without the dock. The Corps concluded that the dock extension would not significantly alter traffic patterns and would likely reduce spill risks by decreasing tanker wait times. The Corps' findings on the predictability of vessel traffic and the reduction of spill risk were deemed reasonable and not arbitrary. Additionally, the Corps conducted a thorough analysis of threatened and endangered species in the Cherry Point area, as referenced in a prior section of the order.

The U.S. Fish and Wildlife Service (FWS) and the National Marine Fisheries Service indicated that the ARCO project would likely not adversely affect endangered or threatened species as defined by the Endangered Species Act (ESA). The Pacific herring is not listed as threatened or endangered, and the project's negligible to low impact does not necessitate an Environmental Impact Statement (EIS). Ocean Advocates claimed a violation of the Magnuson Amendment warranted a full National Environmental Policy Act (NEPA) review; however, the court confirmed that the ARCO dock extension complied with the Magnuson Amendment and NEPA. The court found that the Corps adequately assessed the environmental impacts, determining an EIS was unnecessary due to the absence of significant effects. The Corps' conclusions were deemed not arbitrary or capricious and took expert opinions into account regarding impacts on threatened species and environmental laws.

Under the Rivers and Harbors Act, the Corps can grant permit extensions unless contrary to public interest, with no private right of action recognized in Section 10 as established by the Supreme Court. Thus, Ocean Advocates lacked standing to raise claims under this section. Ultimately, the court denied Ocean Advocates' motion for summary judgment and all relief requests, while granting the Corps' motion, confirming that the permit issuance and extension did not violate the Magnuson Amendment or NEPA. The court also denied ARCO's request to dismiss based on standing or laches.

ARCO's motion for summary judgment has been granted, affirming that the Corps acted in compliance with the Magnuson Amendment and NEPA in granting the permit and its extension. As a result, the plaintiffs’ complaint has been dismissed. The plaintiff group includes four non-profit organizations and two individuals. The Court identified a direct injury to the plaintiffs' professional, aesthetic, and recreational interests, negating the need to consider their claim regarding the risk of an oil spill. 

The Court noted that while the action is not barred by laches, imposing restrictions at this stage would cause significant harm to ARCO, which has already spent $30 million on the dock extension. ARCO has offered to enter a stipulated injunction preventing the dock's use for off-loading crude oil, which the Court has accepted. ARCO is required to submit this injunction for approval within ten days.

The Court distinguished this case from National Parks. Conservation Ass'n v. Babbitt, stating that the Corps had sufficient knowledge to determine that an Environmental Impact Statement (EIS) was unnecessary. Ocean Advocates’ concerns regarding Pacific herring and the marine environment were previously addressed and found unpersuasive. Furthermore, even if Ocean Advocates could establish a private right of action under the Rivers and Harbors Act, they would not prevail since the district engineer deemed the changes since the permit's issuance as minor and not significant enough to require public comment. The Court deferred to the Corps' expertise, concluding that their decision to forgo public notice was reasonable and not arbitrary.