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Acquest Wehrle LLC v. United States

June 19, 2008


The opinion of the court was delivered by: John T. Curtin United States District Judge

In this action brought pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-06, plaintiff Acquest Wehrle LLC seeks a determination that its real property located at 2190 and 2220 Wehrle Drive in the Town of Amherst, New York, is exempt from the wetlands regulation provisions of the Clean Water Act ("CWA"), 42 U.S.C. § 1344, et seq. Defendants United States of America, United States Environmental Protection Agency ("EPA"), and United States Army Corps of Engineers (the "Corps") (collectively, the "Federal Defendants") have moved to dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted, and plaintiff has moved pursuant to Fed. R. Civ. P. 15 for leave to amend the complaint.

For the reasons that follow, the Federal Defendants' motion to dismiss is granted, and the complaint is dismissed as against them. Plaintiff's motion to amend the complaint is denied.


The factual background of the dispute forming the basis for this action is set forth in the parties' memoranda and affidavits submitted in connection with the pending motion to dismiss, with reliance on matters referenced in numerous exhibits attached to the pleadings. As these submissions reveal, the facts are largely a matter of historical public record, and as such are not substantially disputed.*fn1

In 1983, the EPA approved a $5.8 million grant to the Town of Amherst to assist in the construction of a sewer project known as the Southeast Amherst Interceptor and Collector Sewer Project ("the Sewer Project Grant"). One of the conditions of the Sewer Project Grant was a "Moratorium Agreement" which provided that, for a period of fifty years, the Town would not allow any development on property "located wholly or partially within state or federal designated wetlands" to hook up to the sewer project funded by the grant, without the EPA's written approval (Item 1, Ex. 1). In connection with the grant, the EPA prepared an environmental assessment, in which it specifically identified three wetland areas within the area covered by the project, including approximately nine acres of wetlands on the property located at 2190 and 2220 Wehrle Drive (id. at ¶ 18 & Ex. 2).

In 1995, the former owner of the 2220 Wehrle Drive property, GBC, Inc., petitioned the Town of Amherst Town Board to rezone that parcel from R-3 (residential) to OB (office building) in order to develop an office park with approximately 175,000 square feet of office building space. The GBC petition was granted by Resolution adopted on December 4, 1995 (id. at ¶ 25 & Ex. 4). Subsequently, Acquest purchased both the 2190 and 2220 Wehrle Drive parcels for the purpose of assisting in the development of the office park. The purchase was completed in 2005 (id. at ¶ 26).

In connection with the proposed development of the office park, Acquest applied to the Corps for a permit to place fill in the wetlands area of the Wehrle Drive property. By letter dated June 29, 2001, the Corps made the determination that the wetlands identified on the property were "isolated, non-navigable, intrastate waters" not subject to regulation under the permit requirements of section 404 of the CWA (id. at ¶ 27 & Ex. 5). Following this determination, Acquest petitioned the Town Board to rezone the 2190 Wehrle Drive portion of the Wehrle Drive property from R-3 to OB for the purpose of developing an office park consisting of approximately 10 buildings and 1,000 parking spaces. The Town Board granted the petition and approved Acquest's site plan for the office park, subject to certain conditions including obtaining a waiver from the EPA for a sewer tap-in, and a section 404 permit from the Corps. The Town Board also adopted a "SEQR Negative Declaration Notice of Determination and Non-Significance" declaring that the proposed rezoning and development "will not have a significant adverse effect on the environment" (id. at ¶ 30 & Ex. 6).

Meanwhile, in November 2001, individual defendants Thomas and Ann Suchyna, Thomas and Shirley Galanes, George and Dorothy Martin, and Robert and Abigail Wesolowski brought an action in this court against the Corps pursuant to the citizen suit provisions of the CWA seeking to overturn the determination that the wetlands on the Wehrle Drive property were not subject to federal regulation (see Suchyna, et al. v. United States Army Corps of Engineers, et al., No. 01-CV-763-WMS).*fn2 On June 24, 2002, United States District Court Judge William M. Skretny granted the government's consent motion to vacate the Corps' jurisdictional determination and remand the issue for reconsideration, and the action was dismissed (see id., Items 23 & 24). As a result, on November 21, 2002, the EPA issued a "Jurisdictional Determination and Special Case Designation for Wetlands and Aquatic Areas at 2220 Wehrle Drive, Amherst, New York," which contained the following statement:

Field investigation done by the Corps and EPA in July 2002 showed that a large wetland of approximately 9.5 acres exists on the project site. EPA concludes that this wetland delineation is accurate. EPA has determined that this wetland is subject to jurisdiction under the Clean Water Act (CWA) because it has a surface hydrological connection through a watercourse originating in the wetland, through ditches and a culvert into Ellicott Creek, to the Niagara River, a traditional navigable water. Further the wetland can be considered to be adjacent to Town Ditch 18 and subject to CWA jurisdiction on this basis as well. Based on these conclusions, EPA has determined that there are approximately 9.5 acres of CWA jurisdictional wetlands on the parcel at 2220 Wehrle Drive. (Item 1, Ex. 11, p. 2).

Following this determination, Acquest submitted to the EPA a revised site plan for the office park in which it proposed to mitigate the potential effect on the identified wetlands. By letter dated June 28, 2005, the EPA informed the Town Board that it would accept a waiver request from the Town for a sewer tap-in based upon Acquest's revisions to the site plan, subject to additional mitigation through the creation of off-site wetlands, as determined through the CWA permitting process (id. at ¶¶ 41-43 & Ex. 12).

By letter dated March 14, 2006, the Corps transmitted to Acquest a "Provisional Department of the Army Permit" to place fill in approximately 2.9 acres of wetlands on the Wehrle Drive property (id. at ¶ 44 & Ex. 13). As explained in the transmittal letter:

The provisional permit is NOT VALID and does not authorize you to do your work. The provisional permit describes the work that will be authorized, and the General and Specific Conditions that will be placed on your final Department of the Army (DA) permit if the State of New York requirements are satisfied as described below. No work is to be performed in the waterway or any wetlands until you have received a validated copy of the DA permit. (Id. at ¶ 13). The letter went on to explain that the final permit would not be issued until the New York State Department of Environmental Conservation issued a "Section 401 Water Quality Certification (WQC)," and that if the State did not act on water quality certification by July 27, 2006, the requirement would be waived (id.).

By letter dated July 19, 2006, the Corps notified Acquest that it had conducted an inspection of the Wehrle Drive property on July 13, 2006, which revealed that Acquest had performed "mechanized landclearing resulting in an unauthorized discharge of fill material and impacts to an area previously determined by the [EPA] to be Federal wetlands regulated under Section 404 of the Clean Water Act" (Hostetler Decl., Ex. 3) (Item 15, Attachment 5). As a result, the Corps rescinded the provisional permit, withdrew Acquest's DA permit application, and referred the matter to the EPA for potential enforcement action (id.; Item 1, ¶ 49).

By letter dated May 25, 2007, the EPA notified Acquest that it had inspected the property on January 18, 2007 and observed that no less than 7 acres of the site had been completely cleared of all woody and herbaceous vegetation, "including in excess of 3.5 acres of clearing within jurisdictional wetlands" (Hostetler Decl., Ex. 4) (Item 15, Att. 6). As a result, the EPA issued an administrative compliance order to Acquest pursuant to its authority under section 309(a) of the CWA (33 U.S.C. § 1319(a)), requiring Acquest (among other things) to cease discharges of dredged or fill material into the wetlands on the Wehrle Drive property, and to restore portions of the wetlands affected by fill activity (id).

Meanwhile, Acquest filed this action on September 29, 2006, against the Federal Defendants, the Town of Amherst, and the "Wetlands Plaintiffs" (i.e., the Suchynas, Galaneses, Wesolowskis, and Martins),*fn3 claiming that both the EPA's November 2002 "Jurisdictional Determination" (First Cause of Action) and the Corps' July 2006 rescission of the provisional permit (Fourth Cause of Action) were arbitrary, capricious, an abuse of discretion, and not in accordance with law, in violation of the APA. Acquest also claims that the 1983 Moratorium Agreement between the EPA and the Town of Amherst was entered in violation of unspecified provisions of the CWA and section 261 of the Town Law of the State of New York, resulting in a "taking" of the Wehrle Drive property without just compensation in violation of the federal and state Constitutions (Second and Third Causes of Action).*fn4

Upon being advised by counsel that initial settlement negotiations had been productive, the court granted a joint motion on behalf of plaintiff and the Federal Defendants to stay further proceedings in order to allow counsel to further pursue amicable resolution of the issues raised in the complaint (see Items 11 & 12). When no settlement was forthcoming, the Federal Defendants moved to dismiss the complaint on the following grounds:

1. The court lacks subject matter jurisdiction over Acquest's First Cause of Action because the EPA's November 2002 "Jurisdictional Determination" is not a "final agency action" subject to APA review, and because judicial review of pre-enforcement administrative actions is precluded under the CWA.

2. The court lacks subject matter jurisdiction over Acquest's Fourth Cause of Action because the Corps' July 2006 action rescinding the provisional permit does not constitute a "final agency action" subject to APA review.

3. The court lacks subject matter jurisdiction over Acquest's "takings" claims set forth in the Second and Third Causes of Action because Acquest is seeking compensation in excess of the Court's $10,000 jurisdictional limitation under the "Little Tucker Act," 28 U.S.C. § 1346(a)(2).

4. The Second Cause of Action seeking declaratory relief with respect to the 1983 Moratorium Agreement is barred by the applicable statute of limitations at 28 U.S.C. ยง 2401, and as such fails ...

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