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February 5, 1980

SIERRA CLUB, Plaintiff,
CLIFFORD ALEXANDER, individually and as Secretary of the Army of the United States; Lt. General JOHN W. MORRIS, individually and as Chief of Engineers, Army Corp of Engineers; Col. CLARK H. BENN, individually and as District Engineer, New York District, Army Corp of Engineers; and PYRAMID COMPANY OF UTICA, Defendants

Neal P. McCurn, United States District Judge.

The opinion of the court was delivered by: MCCURN


This matter was originally before the Court on motion for a temporary restraining order and a preliminary injunction brought by plaintiff to halt construction by defendant Pyramid of a shopping center mall in the Town of New Hartford, New York. Pursuant to Rule 65(a)(2) of the Fed.R.Civ.Pro. the Court ordered the trial of the action on the merits advanced and consolidated with the evidentiary hearing on the preliminary injunction application with the consent of the parties herein, during the course of the evidentiary hearing which commenced on December 3, 1979, and continued through December 14, 1979.

 Plaintiff, Sierra Club, is a national not-for-profit corporation with a longstanding concern for the protection and enhancement of the environment. Founded in 1892, the Club has approximately 180,000 members nationwide, 10,000 members in New York State and some 100 members in the Utica-New Hartford area.

 Defendant, Clifford Alexander, is the Secretary of the Army and is responsible for the administration of the Army Corps of Engineers. Defendant, Lt. General John W. Morris, is Chief of the Army Corps of Engineers of the United States Army and is responsible for ensuring compliance by the Corps with applicable statutes, regulations and executive orders. Defendant, Col. Clark H. Benn, is District Engineer for the New York District Corps of Engineers and is responsible for the issuance of permits in the New York District.

 Defendant, Pyramid Company of Utica ("Pyramid"), is a partnership formed for the purpose of developing a regional shopping mall in the Utica-New Hartford area.

 The complaint in this action was filed November 27, 1979. In it plaintiff seeks declaratory and injunctive relief halting construction of the shopping center mall until such time as the Court is satisfied that the Army Corps of Engineers has complied with all of the requirements set forth in the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et seq. ; The Fish and Wildlife Coordination Act, 16 U.S.C. §§ 661 et seq.; The Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1344; The Rivers and Harbors Act of 1899, as amended, 33 U.S.C. §§ 401 & 403 *fn1" ; certain regulations promulgated pursuant to the above Acts and Executive Orders Nos. 11988 and 11990. *fn2"

 By virtue of an amendment to its complaint, allowed by the Court during trial, plaintiff also requests issuance of an order directing defendants to remove any fill material which has been placed on the project site and requiring restoration of the site to its preconstruction condition.

 In addition to plaintiff's request for a preliminary injunction, all parties have moved for summary judgment. Jurisdiction is predicated upon 28 U.S.C. § 1331(a) and 28 U.S.C. §§ 2201 and 2202.


 1979 Project Proposal

 The regional shopping mall proposed by defendant Pyramid in 1979, is currently under construction on a 115 acre site near the southeast corner of the intersection of Routes 5 and 5A in the Town of New Hartford, approximately two miles west of the City of Utica, New York. The fully enclosed one story mall will upon completion occupy nearly sixty acres of the total site and will contain three major department stores (Sears, J.C. Penney, and Hess). The gross building area will be 850,000 square feet with 770,000 square feet of leasable space. Parking is planned for 3,960 cars.

 Prior to the commencement of work on the project, the site consisted of uplands and approximately fifty-five acres of wetlands, including streamside and cattail wetlands and swamp areas. A predominant feature of the site is Mud Creek and its low lying flood plain. Mud Creek, a moderately sized tributary to Saquoit Creek, meanders through the site in a northeasterly direction. The Creek bank, prior to construction, was stabilized with vegetation, trees and shrubs. Its flood plain, described as a one-hundred year flood contour, slowed the effect of downstream flooding.

 The mall site is generally agreed to have been a productive area for diverse fish and wildlife species, including such fish species as shiners and suckers and wildlife species as skunks, rabbits, song birds, black ducks, woodcock, pheasants and marsh hawks. Wildlife presence is due in part to the high ratio of "edges" on the site. *fn3"

 Construction of the mall will involve filling in approximately thirty-eight acres of wetlands on the site with a resulting loss of the area as a wildlife habitat. This is due in part to the destruction of the vegetative cover. The flood control function of the site's open space drainage area will also be lost. In addition, construction involves the rechannelization of around 2,000 linear feet of Mud Creek.

 In order to lessen the environmental impact of the project, certain mitigation measures have been proposed by defendant Pyramid. On-site measures include the construction of three detention basins, designated A, B and C, which will provide 150% of the preconstruction storm capacity of the site. An additional four acres of cattail wetlands will be created in the detention basin area. The new bed constructed for Mud Creek will contain meanders and riffles along with shore line plantings. *fn4" The old Creek bed will be filled in with on-site materials.

 Off-site mitigation measures have also been included in the proposal. Defendant Pyramid has agreed to purchase nearly 159 acres of land approximately one and a half miles upstream from the project site in an area known as the "Limberlost" property. This property was described by one witness as a mono-type wet meadow.

 The off-site mitigation plan calls for the creation of new wetlands in the uplands area of Limberlost, and the construction of four small ponds on that site. Wetland plantings are to be made on the property by Pyramid. This property is then to be deeded over to the Town of New Hartford for public use. Work by Pyramid with regard to both on-site and off-site mitigation measures is to be closely monitored by the New York State Department of Environmental Conservation (DEC).

 1977 Project Proposal

 The project previously described was not the first proposal by a Pyramid related company for the construction of a regional shopping center mall in the Utica-New Hartford area.

 In 1977, Pyramid Systems, Inc., proposed the construction of a shopping center mall in the same general areas as the one now under attack. However, the permits necessary under New York State Law were denied on March 12, 1978, after a public hearing, in a decision by then Commissioner of the State DEC, Peter A. Berle. The permits were denied based upon the failure of the applicant to demonstrate need for the project and the unavailability of alternatives, in a clear enough manner, to allow balancing of the socio-economic benefits of wetlands with that of the socio-economic development of the State of New York through construction of the mall. A request for reconsideration was denied on July 18, 1978, on the same general basis.

 Plaintiff contends that the 1977 proposal and the 1979 proposal are virtually identical. However, the hearing officer at the State DEC public hearings on the 1979 proposal made a finding that the project was an entirely new proposal and not a resubmission of the 1977 plan. *fn5" In fact, according to defendant Pyramid, new applications for permits were submitted at the suggestion of State DEC officials.

 State DEC Involvement With the 1979 Proposal

 Under New York State law, defendant Pyramid was required to obtain a freshwater wetlands permit, an indirect source permit and an impoundment permit from the New York State DEC. Approval of the project was also required under the State Environmental Quality Review Act (SEQRA). New York State ECL §§ 8-0101 et seq. *fn6"

 Although it is the issuance of a permit pursuant to Section 404 of the Federal Water Pollution Control Act, 33 U.S.C. § 1344, *fn7" which is the focus of this action, a review of the actions of the New York State DEC with regard to State requirements is both helpful and necessary in deciding this lawsuit.

 Defendant Pyramid, in accordance with the requirements set forth in the N.Y. ECL at § 8-0109(2), *fn8" caused to be prepared and submitted to the State DEC a draft environmental impact statement ("DEIS") and a document entitled "Storm Water Management Report." *fn9"

 The DEIS contained analyses of the socio-economic impact of the project (retail-analysis), air and water quality, traffic, energy use and conservation, impact on soil and geological resources, and impact on the vegetation and wildlife on the site. It also included discussion of the unavoidable impacts, the proposed mitigation measures and alternatives, including both the no build alternative and alternative sites.

 Beginning on March 6, 1979, and concluding April 6, 1979, the State DEC conducted nineteen days of public hearings on the applications. Plaintiff, along with several other environmental organizations, was a party to the hearings. The Club was represented by one of its members who resided in New Hartford. *fn10"

 The June 22, 1979, decision of Robert F. Flacke, Commissioner of the State DEC, based upon the findings in the fifty-five page hearing report (also designated as the final environmental impact statement) submitted by the hearing officer, Robert S. Drew, directed issuance of the requested permits. In issuing the permits, the State DEC determined that the project was consistent with local land use plans, that it would fulfill a need in the area for a full-line department store, and that the loss of the wetlands would be adequately compensated by the proposed mitigation measures.

 Pursuant to recommendations in the hearing report, issuance of the permits was conditioned upon submission to the DEC of construction plans, a schedule for completion of the detention basins, the new channel for Mud Creek, erosion control measures, proposed on-site plantings, and the work to be done on the Limberlost property. Pyramid was also required to post a $ 100,000 bond to insure successful completion of the work on both sites.

 Section 404 Permit

 On January 23, 1979, defendant Pyramid submitted an application for a Section 404 permit to the New York District Office of the Army Corps of Engineers. The application contained a description of the activity for which the permit was sought, stating that it:

" . . . consists of realigning 2,000 l. f. of Mud Creek, construction of two entrance roads with culverted stream crossings, construction of 1,400 feet of dikes and construction of storm water detention areas to accommodate a regional Mall Shopping Facility. After completion of the new channel and crossings, the existing creek bed and adjacent lands will be filled with on-site material."

 Included with the application were site drawings, a site photo, and three copies of the "Storm Water Management Report."

 After making a preliminary determination that an Environmental Impact Statement (EIS) was not required, Corps officials prepared and sent out a public notice regarding the application. The Environmental Protection Agency (EPA), upon receipt of the notice, expressed concern over issuance of the permit and requested that a meeting be held with interested Federal officials and a Pyramid representative. The meeting was held on May 30, 1979, at the Corps offices in New York City and was followed by a site visit on June 14, 1979. *fn11"

 Although subsequent to the meeting and site visit, the EPA dropped its objection to the issuance of the permit, United States Fish and Wildlife Services (FWS) continued in its objection to the issuance of the permit. Modifications to the project proposed by FWS were, however, rejected by both defendant Pyramid and future tenant J.C. Penney.

 On August 22, 1979, an Environmental Assessment of the impact of the project was issued by Corps officials. A Supplemental Assessment dealing with the comments received in response to the public notice and Pyramid's response to those comments was issued on September 13, 1979.

 A Section 404 permit was issued to defendant Pyramid on September 24, 1979, over the still unresolved objection of the Fish and Wildlife Service. A special condition contained in the permit required Pyramid to submit to the Corps office all of the construction plans and schedules which are to be submitted to the State DEC, after DEC approval has been obtained.


 Plaintiff claims that the Army Corps of Engineers erred in determining that issuance of a Section 404 permit to Pyramid did not require the preparation of an EIS pursuant to Section 102(2)(C) of NEPA, 42 U.S.C. § 4332(2)(C). Furthermore plaintiff contends that the Corps failed to comply with the requirements of NEPA, NEPA Regulations and the Corps' own Regulations in processing Pyramid's application, and that it in general, failed to adequately review and analyze the potential environmental impact of the mall proposal before issuing the permit. More specifically, plaintiff alleges failure by the Corps to comply with public notice requirements, to consider alternatives to the proposal and to prepared an adequate administrative record of its processing of the application. Finally, plaintiff asserts that the Corps violated the Fish and Wildlife Coordination Act, supra., by failing to give sufficient weight to Fish and Wildlife Service views of the proposal.

 Defendants, however, argue that plaintiff should be barred from litigating its claims before this Court through application of the doctrines of res judicata and collateral estoppel. *fn12"

 Res Judicata and Collateral Estoppel

 Defendants argue that the plaintiff had a full and fair opportunity to litigate the issues now raised as a party to the State DEC public hearings, and should therefore be precluded from relitigating those same claims. *fn13" In support of the estoppel argument, defendant Pyramid points out that as applicant, it satisfied the burden of showing by a preponderance of the ...

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