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Huntress v. United States Department of Justice

United States District Court, Second Circuit

May 24, 2013

UNITED STATES DEPARTMENT OF JUSTICE, ERIC H. HOLDER, JR., in his official capacity as Attorney General of the United States, WILLIAM J. HOCHUL, JR., in his official capacity as United States Attorney for the Western District of New York, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, LISA P. JACKSON, in her official capacity as Administrator of the Environmental Protection Agency, UNITED STATES DEPARTMENT OF DEFENSE ARMY CORPS OF ENGINEERS, and LIEUTENANT GENERAL THOMAS P. BOSTICK, in his official capacity as Commanding General and Chief of Engineers, Army Corps of Engineers, Defendants.


WILLIAM M. SKRETNY, Chief District Judge.


This is the fourth case before this Court that concerns property owned by Plaintiffs located at 10880 Transit Road in Amherst, New York (the "property" or "Transit property") and the Clean Water Act ("CWA"), 33 U.S.C. §1251 et sec.

In this case, Plaintiffs William Huntress and the two companies of which he is the sole owner and member, Acquest Development LLC and Acquest Transit, LLC (collectively Acquest"), seek (1) a declaratory judgment stating that the Transit property is not subject to the CWA and, as a corollary, (2) an injunction, ordering the United States Government to cease criminal prosecution and civil litigation against them for alleged CWA violations.

The Government has moved to dismiss this case, or, in the alternative, consolidate it with its separate civil enforcement action, described below.[1]

For the following reasons, Defendants' motion to dismiss or consolidate is granted in part and denied in part; Plaintiffs' motion for a preliminary injunction is denied; and their motion for a declaratory judgment is consolidated with Case No. 09-CV-055, converted into a motion for summary judgment, and denied.


A. The Clean Water Act

The Clean Water Act is at the center of both this case and the larger dispute between Plaintiffs and Defendants. Congress passed the CWA in 1972 to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." Decker v. Nw. Envtl. Def. Ctr. , 133 S.Ct. 1326, 1331 (2013) (citing 33 U.S.C. § 1251(a)).

The CWA generally prohibits "the discharge of any pollutant" into "waters of the United States." 33 U.S.C. §§ 1311(a), 1362(7). But, as relevant here, the term "waters" is not limited to its traditional understanding. Rapanos v. United States , 547 U.S. 715, 731, 126 S.Ct. 2208, 2220, 165 L.Ed.2d 159 (2006). For the purposes of the CWA, "waters of the United States" also encompasses, among other things, "interstate wetlands, " 33 C.F.R. § 328.3(a)(2), (3), and "[w]etlands adjacent to waters... (other than waters that are themselves wetlands), " 33 C.F.R. § 328.3(a)(7).

The CWA also establishes a permit system permitting certain discharges. Specifically, Section 402 of the CWA establishes the National Pollutant Discharge Elimination System, and grants the EPA the authority to "issue a permit for the discharge of any pollutant." 33 U.S.C. § 1342(a). The National Pollutant Discharge Elimination System "requires dischargers to obtain permits that place limits on the type and quantity of pollutants that can be released into the Nation's waters." S. Florida Water Mgmt. Dist. v. Miccosukee Tribe of Indians , 541 U.S. 95, 102, 124 S.Ct. 1537, 1541, 158 L.Ed.2d 264 (2004). "In addition to federally-issued permits, Congress provided authority for States to issue N[ational] P[ollutant] D[ischarge] E[limination] S[ystem] permits for discharge into waters within its jurisdiction, provided that the State develops a permitting program and obtains approval for that program from the []EPA." AcPeconic Baykeeper, Inc. v. Suffolk Cnty. , 585 F.Supp.2d 377, 412 (E.D.N.Y. 2008) (citing 33 U.S.C. § 1251(b)). In accordance with this provision, New York created the "State Pollutant Discharge Elimination System." See N.Y. Envir. Conserv. Law § 17-0801 (McKinney 2006). This program is administered by the New York State Department of Environmental Conservation. Plaintiffs have received two such permits from New York State, each are described in more detail below.

A different section of the CWA, Section 404, authorizes the Secretary of the Army, acting through the U.S. Army Corps of Engineers ("Corps"), to issue permits "for the discharge of dredged or fill material into the navigable waters at specified disposal sites." § 1344(a), (d); see also 33 C.F.R. § 323.1. Plaintiffs have not received any permits under Section 404.

B. Facts Leading to this Suit

Plaintiffs purchased the 96.6 acre property located at 10880 Transit Road in 2006. (Complaint, ¶ 24; Docket No. 1.) Since roughly 2007, Defendants here - various United States agencies and their directors - have consistently claimed and formally alleged that at least part of Plaintiffs' property is a "wetland" within the meaning of the CWA; that Plaintiffs have unlawfully discharged dredged or fill material into those wetlands; and that Plaintiffs have unlawfully discharged storm water pollutants in waters of the United States. For their part, Plaintiffs have consistently disputed that their land is subject to the CWA. In essence, they claim that the CWA is inapplicable to them because the property contains no "waters of the United States" ( i.e., it is not a wetland); because the property is subject to an exemption meant to exclude certain farm lands from CWA enforcement; and because they have received the necessary permits insulating them from any CWA violation. As noted, there are three other cases where some form of this dispute has been playing out. A brief description of them follows.

1. United States v. Acquest Transit, LLC, No. 09-CV-055

▸ The United States' Civil Case

In this suit, commenced in January of 2009, the United States alleges that Acquest wrongfully discharged fill and pollutant material into waters of the United States without a permit.

On March 4, 2009, the United States moved for a preliminary injunction to enjoin Acquest from placing additional fill or performing additional earth moving work at the property. This Court granted that motion on July 15, 2009, enjoining "Defendant Acquest Transit LLC, its officers, agents, successors, employees, and others acting in concert with it... from placing additional fill or performing any additional earthmoving work at the Property designated as tax parcel 16.00-5-23 in the Town of Amherst, New York." (Decision and Order at 20; Docket No. 26.)

In May 2010, upon learning that Acquest was conducting activities on the property in violation of that Order, the United States filed a motion to enforce the preliminary injunction. After reviewing the evidence and testimony offered in support of the motion, Magistrate Judge Leslie G. Foschio recommended that this Court grant the United States' motion and award the United States reasonable attorneys fees and costs incurred pursuing the motion. (Docket No. 76.) This Court subsequently adopted the Report and Recommendation. (Docket No. 105.)

The case has not progressed much further from there, however, because the United States later brought a criminal case against Acquest, and as result, the action is currently stayed. (See Minute Entry; Docket No. 158.)

2. United States v. Acquest Development, LLC, No. 11-CR-347

▸ The Criminal Case

On November 9, 2011, a grand jury returned a seven-count indictment charging

Huntress and Acquest with conspiracy, obstruction of justice, concealing a material fact, making a false statement, criminal contempt, and violations of the CWA.

Finding, however, that the grand jury heard improper evidence, Magistrate Judge Jeremiah J. McCarthy recommended dismissal of the indictment without prejudice. (Docket No. 35.) On March 25, 2013, this Court adopted that Report and Recommendation and dismissed the indictment without prejudice. (Docket No. 59.) As such, this case is now closed.

3. Huntress v. Mugdan, No. 12-CV-559

▸ Acquest's Civil Suit

On June 15, 2012, Acquest (and an additional Acquest entity, Acquest Wehrle, LLC) initiated a civil suit against the United States Environmental Protection Agency ("EPA"), as well as six employees of EPA in their individual capacities. Acquest alleges that the EPA violated an injunction issued by the federal district court for the Southern District of Florida. Acquest asserts that the EPA acted arbitrarily and capriciously by, among other things, asserting jurisdiction over the Transit Property; instituting a civil enforcement action; instituting the criminal proceedings; and withholding certain evidence from a grand jury before the criminal indictment issued.

This case is ongoing, and currently there is a pending motion to stay by the United States. (Docket No. 22).

* * * *

As noted, Plaintiffs have maintained all along that the Transit property is not subject to the CWA. But, according to them, none of these three other cases have yet presented an opportunity for them to litigate what they call the "threshold question" - whether the CWA applies to the Transit property. Accordingly, they brought this action with the hope of receiving (1) a favorable declaratory judgment answering this question and (2) a preliminary injunction that would effectively end the pending cases and preclude future CWA enforcement actions. Starting with the latter, this Court will address both requested forms of relief.


A. Preliminary Injunction

Plaintiffs seek to enjoin Defendants from proceeding with the current CWA enforcement action against them and ...

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