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John A. Bersani, Newport Galleria Group, Robert J. Congel and the Pyramid Companies, Joseph Robichaud and Citizens in Support of Attleboro Mall, Intervenor- Home Building Association of Massachusetts, Intervenor-Plaintiff v. United States Environmental Protection Agency, United States Army Corps of Engineers, Lee Thomas, in His Official Capacity as Administrator of the United States Environmental Protection Agency, Richard K. Dawson, in His Official Capacity as Assistant Secretary for Civil Works, United States Army, and Jennifer Joy Wilson, in Her Official Capacity as Assistant Administrator for External Affairs, United States Environmental Protection Agency, Sierra Club, Environmental Defense Fund, National Wildlife Federation, National Audubon Society, Conservation Law Foundation of New England, Inc., Massachusetts Audubon Society, Citizens for Responsible Environmental Management, Massachusetts Society for Conservation Professionals, Audubon Society of Rhode Island, Rhode Island Association of Conservatio

Citation: 850 F.2d 36Docket: 902

Court: Court of Appeals for the Second Circuit; June 8, 1988; Federal Appellate Court

Narrative Opinion Summary

This case involves a dispute between a developer and the United States Environmental Protection Agency (EPA) over a proposed shopping mall construction on wetlands in Massachusetts. The developer, Pyramid, sought to construct the mall on Sweedens Swamp, a high-quality wetland, requiring a permit for the discharge of dredged or fill materials under Section 404 of the Clean Water Act. The EPA vetoed the permit initially approved by the Army Corps of Engineers, citing the existence of a practicable alternative site in North Attleboro that was available to Pyramid before entering the market. Pyramid challenged the EPA's application of the 'market entry' theory, arguing that alternative site availability should be assessed at the time of permit application, not market entry. The court upheld the EPA's decision, affirming that the market entry theory aligned with regulatory language and the Act's objectives of protecting wetlands. The court found the EPA's interpretation reasonable and not arbitrary or capricious, despite the lack of traditional deference. Pyramid's mitigation proposal was deemed insufficient to mitigate environmental impacts, and the court ruled in favor of the EPA, maintaining the veto. The court's decision emphasizes the EPA's role in enforcing environmental regulations and the importance of assessing alternative sites to prevent unnecessary wetland destruction.

Legal Issues Addressed

Interpretation of 'Market Entry' Theory

Application: The court upheld the EPA's 'market entry' theory, determining that alternative site availability should be assessed when a developer enters the market, not when a permit application is submitted.

Reasoning: Pyramid appeals challenging the EPA's 'market entry' theory, which interprets regulations to assess the availability of alternative sites when a market entry occurs, rather than when a permit application is submitted.

Judicial Review of Agency Interpretation

Application: The court conducted a plenary review and affirmed that the EPA's interpretation of its regulations was reasonable and supported by the administrative record, despite not being entitled to deference.

Reasoning: The district court's standard of review regarding the EPA's findings is that they may only be set aside if deemed 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,' as per the Administrative Procedure Act.

Practicable Alternatives under 40 C.F.R. Sec. 230.10

Application: The court found that the EPA reasonably applied the practicable alternatives requirement, emphasizing that Pyramid failed to prove the North Attleboro site was unavailable.

Reasoning: If a practicable alternative exists that would have a lesser adverse impact on the aquatic ecosystem, the discharge permit must be denied. Practicable alternatives are presumed to be available and to have less adverse impact unless proven otherwise by the applicant, such as Pyramid.

Role of Corps and EPA in Section 404 Permitting Process

Application: The EPA's veto decision overruled the Corps' initial permit approval, highlighting the EPA's authority in environmental impact assessments despite differing agency interpretations.

Reasoning: The Corps and the EPA jointly oversee the permitting process for wetland discharges, with the Corps issuing permits under the 404(b)(1) guidelines and the EPA having the authority to veto those permits under Sec. 404(c).

Significance of Environmental Impact and Mitigation Proposals

Application: The court upheld the EPA's assessment that Pyramid's mitigation proposal did not sufficiently address environmental impacts, supporting the veto of the permit.

Reasoning: The EPA found that Pyramid's failure to investigate alternative sites was uncontested and that Pyramid had not provided sufficient evidence regarding the North Attleboro site. Additionally, the mitigation proposal did not render the project preferable due to scientific uncertainties.

Veto Power of EPA under Clean Water Act Section 404(c)

Application: The EPA exercised its veto authority to prohibit Pyramid's proposed mall construction on wetlands, citing the availability of a practicable alternative site.

Reasoning: The EPA exercised its authority under the Clean Water Act to veto the Corps' permit approval, citing the existence of an alternative site that was available to Pyramid prior to their market search.