NOT RECOMMENDED FOR PUBLICATION File Name: 18a0145n.06
No. 17-1154
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED Mar 20, 2018 MARQUETTE COUNTY ROAD COMMISSION, ) DEBORAH S. HUNT, Clerk ) Plaintiff-Appellant, ) ) v. ) ON APPEAL FROM THE ) UNITED STATES DISTRICT UNITED STATES ENVIRONMENTAL ) COURT FOR THE WESTERN PROTECTION AGENCY, et al., ) DISTRICT OF MICHIGAN ) Defendants-Appellees. ) )
BEFORE: BATCHELDER, GRIFFIN, and WHITE, Circuit Judges.
ALICE M. BATCHELDER, Circuit Judge. In 2011, Plaintiff-Appellant Marquette
County Road Commission (“Road Commission”) applied to Michigan’s permitting authority—
Michigan Department of Environmental Quality (“MDEQ”)—for a permit to fill 25 acres of
wetlands to construct County Road 595. See 33 U.S.C. § 1344. MDEQ wanted to issue the
application, but the U.S. Environmental Protection Agency (“EPA”)—which the Clean Water
Act (“CWA”) empowers to oversee state-run permitting programs—objected to various aspects
of the proposal. Despite the Road Commission’s numerous attempts to revise the permit
application over the following months, EPA remained unsatisfied. Eventually, authority to
resolve the permit application transferred to the Army Corps of Engineers (“Corps”). 33 U.S.C.
§ 1344(j); 40 C.F.R. § 233.50(j). Frustrated with the time and expense of the process, the Road
Commission declined to continue the permit review process before the Corps and instead No. 17-1154, Marquette Cty. Road Comm’n v. EPA, et al.
brought claims under the Administrative Procedure Act (“APA”) against EPA and the Corps
based on EPA’s refusal to approve the issuance of the application and the Corps’ requirement
that the Road Commission re-submit its application materials to continue the process. The
district court determined that neither of these agency actions constituted a final agency action.
The district court also rejected the Road Commission’s alternative arguments that EPA’s
objections were reviewable, non-final agency action and that completion of the Corps review
process would have been futile. The district court dismissed the suit. We agree and AFFIRM.
I.
Section 404 of the CWA regulates the release of dredged and fill matter into waterways,
including wetlands. See § 33 U.S.C. § 1344. Generally, the Secretary of the Army oversees
Section 404 permitting through the Corps. See id. However, the CWA also allows states to
administer their own Section 404 permitting programs subject to federal approval and oversight
by EPA. See id. § 1344(g)-(j); 40 C.F.R. §§ 233.16, 233.20, 233.50, 233.52, 233.53. Michigan
is one of two states having federal approval to operate its own permitting program.
State-run permitting programs such as Michigan’s are subject to rigorous EPA oversight.
See 33 U.S.C. § 1344(j); 40 C.F.R. § 233.50. For example, states must submit copies of each
permit application to EPA and notify EPA of any action that they take with respect to these
applications. 33 U.S.C. § 1344(j).1 If EPA intends to comment on a state’s handling of an
application, it must notify the state within thirty days and submit comments to the state within
ninety days. Id. Once EPA notifies a state that it intends to comment on the permit application,
a state may not issue a permit until it receives the comments or ninety days pass, whichever
1 EPA also functions as a liaison between the state and other involved federal agencies. EPA must provide copies of each application it receives to the Corps and the Department of the Interior (through the U.S. Fish and Wildlife Service), and is responsible for integrating comments from these other federal agencies into its comments to the state. Id. at § 1344(j).
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comes first. Id. If EPA objects to the state’s issuing a permit, a state “shall not issue the permit
unless [it] has taken the steps required by [EPA] to eliminate the objection,” regardless of how
much time has passed. 40 C.F.R. § 233.50(f); accord 33 U.S.C. § 1344(j). EPA must provide
reasons for objecting to the issuance of a permit “and the conditions which such permit would
include if it were issued by [EPA].” 33 U.S.C. § 1344(j); accord 40 C.F.R. § 233.50(e).
A state has limited options when it wishes to issue a permit to which EPA objects. It may
(i) issue a revised permit that eliminates EPA’s objection; (ii) deny the permit; or (iii) request a
public hearing. See 33 U.S.C. § 1344(j); 40 C.F.R. § 233.50(f)-(g). If the state does not take one
of these three actions within ninety days of EPA’s objection, authority to make a final decision
regarding the permit transfers to the Corps. 33 U.S.C. § 1344(j); 40 C.F.R. § 233.50(j). If the
state requests a public hearing, EPA must conduct the hearing and then “reaffirm, modify, or
withdraw the objection or requirement for a permit.” 40 C.F.R. § 233.50(h). If EPA reaffirms or
modifies its objection, the state has essentially the same recourse it had before the hearing: it
must within thirty days either issue a revised permit that eliminates EPA’s objections or deny the
permit. 40 C.F.R. § 233.50(f)-(j). If the state does not take either of these actions, authority to
review and make a decision regarding the permit transfers to the Corps. 33 U.S.C. § 1344(j);
40 C.F.R. § 223.50(j).
II.
The Section 404 permitting process has the potential to be onerous, and proved to be so
for the Road Commission. The Road Commission submitted its permit proposal for County
Road 595 to MDEQ—the state agency that runs Michigan’s program—in October 2011 and a
revised proposal in January 2012.2 On April 23, 2012, after consulting with the Corps and the
2 EPA, the Corps, and the U.S. Fish and Wildlife Service all received copies of the Road Commission’s revised permit application, per statutory directives.
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U.S. Fish and Wildlife Service, EPA objected to the Road Commission’s proposal. EPA’s
objections asserted that the Road Commission failed to comply with the requirements of the
CWA because, among other things, it did not demonstrate that the proposed road was the “least
environmentally damaging practical alternative.”
Over the next several months the Road Commission revised its proposal numerous times
based on conversations between it, MDEQ, and EPA. Despite the Road Commission’s attempts
to resolve EPA’s objections, EPA remained unsatisfied and believed the proposal failed to meet
CWA standards. MDEQ, however, thought the most recently revised proposal met CWA
standards and wished to grant the Road Commission a permit.
MDEQ requested a public hearing, which EPA held on August 28, 2012. Following the
hearing, MDEQ sent a letter to EPA urging EPA to remove its objections so that it could grant
the permit. MDEQ contended that “the Road Commission ha[d] been responsive to the concerns
expressed in [MDEQ’s] and [EPA’s] correspondence . . . including the [EPA’s] April 23, 2012,
objection letter.” Since EPA’s objection, the letter stated, the Road Commission had expanded
its explanation “of the alternatives analysis that demonstrate[s] the proposed route is the least
environmentally damaging practicable alternative to achieve the project purpose,” “effectively
minimized . . . impacts to streams via shorter and wider stream crossings or bridges,” “narrowed
or removed [the road footprint] across the rare and imperiled wetlands,” and “modified [the
proposed road route] in several locations to avoid critical wetlands and further reduce overall
impacts.” MDEQ stated that it believed these improvements adequately addressed EPA’s and
MDEQ’s comments and brought MDEQ “to the point [where] Michigan will soon be in a
position to issue a permit.” In closing, the letter “urge[d] []EPA to remove their objection to the
MDEQ issuing a permit for construction of Marquette County Road 595.”
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Nearly three months passed before EPA responded to MDEQ’s letter. On December 4,
2012, EPA informed MDEQ that it would withdraw its objection that the Road Commission’s
proposal was not the least harmful alternative, but continued to object to the issuance of a permit
because the Road Commission had still not provided “adequate plans to minimize impacts” or a
“comprehensive mitigation plan that would sufficiently compensate for unavoidable impacts.”
EPA’s continued objection triggered the thirty-day deadline for MDEQ to either resolve
EPA’s objection and grant the permit, or deny the permit. See 40 C.F.R. § 233.50(f)-(j). On the
eve of the statutory deadline, MDEQ notified EPA that it was working with the Road
Commission to address EPA’s objections, but “the short time frame allowed by statute and the
complexity of the issues remaining” prevented MDEQ from issuing a permit. MDEQ
acknowledged that because it did not resolve EPA’s objections in time to grant the permit and
declined to deny the permit outright, the CWA directed that “authority to process the permit
application . . . transferred to the [Corps].” See 33 U.S.C. § 1344; 40 C.F.R. §233.50(f)-(j).
Upon assuming authority over review of the permit, the Corps required the Road
Commission to re-submit its application to continue the permitting process.3 The Road
Commission declined to re-submit and the permitting process for County Road 595 came to a
halt.
3 Both in its briefing and at oral argument, the Road Commission characterized the submission requested by the Corps as a “new application.” At oral argument, the Road Commission asserted that the application requested by the Corps would have “a host of factors that were different from what the DEQ looked at,” including “different definitional terms” and the fact that the Road Commission “was going to have to comply with [the National Environmental Policy Act,]” which counsel described as a “significant difference from the application process it had gone through with the DEQ.” EPA and the Corps contest this characterization, asserting in briefing and at oral argument that the Corps required the Road Commission to re-submit its application in order to ensure that the Corps considered the proper and most-recent materials given the various revisions to the Road Commission’s permit application. Counsel for EPA and the Corps further asserted that the substantive criteria to be considered by the Corps are identical to the criteria considered by MDEQ and the EPA because all the inquiries concern the requirements of § 404. We need not resolve this dispute.
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The Road Commission initiated the instant litigation, filing a five-count declaratory
judgment action in the United States District Court for the Western District of Michigan against
the EPA (counts one through four) and the Corps (count five). The complaint alleged that:
EPA’s objections to the Road Commission’s permit application were arbitrary and capricious
(count one); EPA exceeded its delegated authority by issuing objections based on requirements
that are not mandated by the CWA (count two); EPA’s objections failed to list the conditions
necessary for a permit to issue, as required by Section 404(j) of the CWA (count three); EPA did
not follow the procedural requirements of Section 404(j) of the CWA (count four); and the
Corps’ improperly denied the permit application by failing to act on it (count five). For relief
against EPA, the Road Commission requested that the court declare EPA’s objections unlawful
and restore permitting authority to the MDEQ. Against the Corps, the Road Commission
requested that the court declare that the Corps’ failure to take action constituted constructive
denial and direct the Corps to grant a permit.
EPA and the Corps moved to dismiss the complaint under Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6). The district court granted the motion and dismissed the
complaint in full. For the following reasons we affirm.
III.
A.
“[C]hallenge[s] to the availability of judicial review under the APA [are] properly
analyzed under Federal Rule of Civil Procedure 12(b)(6) and whether [a] plaintiff has stated a
valid claim for relief.” Berry v. U.S. Dep’t of Labor, 832 F.3d 627, 632 (6th Cir. 2016) (citing
Jama v. Dep’t of Homeland Sec., 760 F.3d 490, 494 n.4 & 495 (6th Cir. 2014)). We review de
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novo questions of statutory interpretation and a district court’s order dismissing a complaint for
failure to state a claim. Id.
“[A]gency action,” as defined by the APA, “includes the whole or a part of an agency
rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.”
5 U.S.C. § 551(13). Agency action is subject to judicial review when “made reviewable by
statute” or—relevant here—when it is “final agency action for which there is no other adequate
remedy in a court.” 5 U.S.C. § 704; see Berry, 832 F.3d at 632. To be considered “final” under
the APA an agency action must generally meet two conditions. Berry, 832 F.3d at 633 (citing
U.S. Army Corps of Eng’rs v. Hawkes Co., 136 S. Ct. 1807, 1813 (2016)). “First, the action must
mark the consummation of the agency’s decisionmaking process—it must not be of a merely
tentative or interlocutory nature. And second, the action must be one by which rights or
obligations have been determined, or from which legal consequences will flow.” Hawkes Co.,
136 S. Ct. at 1813 (quoting Bennett v. Spear, 520 U.S. 154, 177–78 (1997)); see Berry, 832 F.3d
at 633.
In this appeal, the Road Commission asserts that EPA’s objections constituted final,
reviewable agency action. As to the first prong of the analysis—the consummation of the
agency’s decisionmaking process—the Road Commission asserts that EPA’s objections served
as a “veto” that completed EPA’s involvement and denied a permit that MDEQ otherwise would
have granted. This, however, is belied by the record and the statute.
Though the Road Commission characterizes EPA’s objections as a “veto,” the facts show
that EPA’s objections did not end the Road Commission’s pursuit of a Section 404 permit. To
the contrary, when EPA lodged objections, the permit review process continued precisely as
directed by statute. The Road Commission repeatedly revised its permit application in its
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attempt to eliminate EPA’s objections. Eventually, MDEQ, disagreeing with EPA’s assessment
that the Road Commission’s permit application failed to meet CWA standards, requested a
public hearing. EPA held the hearing, after which it withdrew some objections and renewed
others. MDEQ, finding itself unable to issue a permit that resolved EPA’s remaining objections
and unwilling to deny the permit outright, ceded review authority to the Corps. Only when the
Road Commission, tired of the rigmarole the CWA imposes, declined to submit its most recent
materials to the Corps did the Road Commission itself discontinue the permitting process.4 As
EPA conceded in briefing, “[h]ad MDEQ denied the permit or issued a permit with conditions
resolving EPA’s objection, the permitting process would have been at an end, and the Road
Commission could then have sought review if it was dissatisfied with the result.” In the absence
of any decision from either agency to ultimately deny or grant the permit, however, we have
nothing to review. See Friends of Crystal River v. EPA, 35 F.3d 1073, 1079 n.11 (6th Cir. 1994)
(EPA objections to Section 404 permits are unreviewable because they are not final); cf. Sackett
v. EPA, 566 U.S. 120, 127 (2012) (compliance order’s findings and conclusions were final,
because they were not subject to further review).5
Nor does the Road Commission’s artificial attempt to divide the Section 404 permit
process into two separate “permits”—a “state permit” and a “Corps permit”—show the
consummation of a decisionmaking process. The CWA establishes one continuous application
process to obtain a Section 404 permit, of which state-run permitting programs are one part. See
33 U.S.C. § 1344. The shift of review authority from MDEQ to the Corps is a midpoint, not a
4 We sympathize with the Road Commission’s frustration with the long, expensive, burdensome process it has endured. Unfortunately, it is the process the CWA requires, and one which must be fully completed before APA review can be triggered. 5 As counsel for EPA and the Corps noted at oral argument, the Road Commission could to this day continue to pursue a Section 404 permit for County Road 595 by submitting its most recent revised application to the Corps.
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new, separate, and distinct application process. See id. Here, the Section 404 permit process
could have been consummated with a grant or denial by MDEQ, subject to EPA approval, or a
grant or denial by the Corps. These two potential decision points do not equal two separately
reviewable permit processes. And though the Road Commission has unquestionably endured a
long, expensive, and frustrating permit application process, it voluntarily discontinued the
process and did not receive any final determination.6
Finally, the Road Commission argues that because the Corps is a separate agency from
EPA, the close of the MDEQ review and transfer of the application to the Corps fulfills the first
prong of finality review because it marks the consummation of EPA’s agency action. But EPA
and the Corps are, by statute, charged to work together to assess permits throughout the review
process. The Road Commission’s parsing of “agency action” to mean each individual agency’s
actions is inconsistent with prior court precedent. See Jama, 760 F.3d at 496 (“Congress has
delegated to specific government agencies the task of enforcing immigration laws and
determining aliens’ immigration statuses. The agencies’ decisionmaking process consummates
when they issue a final decision regarding the alien’s immigration status.” (emphasis added)).
And even if this were not the case, EPA’s involvement in the Section 404 permitting process
does not end when review transfers to the Corps. See 33 U.S.C. § 1344(c); see, e.g., Mingo
Logan Coal Co. v. EPA, 829 F.3d 710, 714-15, 717-18 (D.C. Cir. 2016); cf. Michigan Peat v.
EPA, 175 F.3d 422, 428 (6th Cir. 1999) (finding final agency action where “[s]tatutorily, there
was nothing left for the EPA to do once it signed off on the proposed permit”).
6 Though the Corps did request that the Road Commission submit a “new” application to continue the review process, counsel for EPA and the Corps asserted that this request was merely to ensure continued review of the most up-to-date permit application. The Road Commission’s decision not to submit its most up-to-date materials to the Corps for continued review ended a long, but ultimately incomplete, Section 404 permit review process.
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Because the Road Commission has failed to demonstrate that EPA’s objections or the
transfer of authority over the permit to the Corps consummated the decisionmaking process in
the Section 404 permit proceeding, we need not analyze whether legal consequences flowed.
The Road Commission has failed to show that the challenged actions constitute final agency
action permitting this court’s review under the APA.
B.
The Road Commission contends in the alternative that, even if EPA’s objections are not
final agency action under the APA, it is nonetheless entitled to judicial review of the merits of
those objections under an exception established in Leedom v. Kyne, 358 U.S. 184 (1958).
Leedom is a “narrow anomaly reserved for extreme situations,” where agency conduct
constitutes a patent violation of its delegated authority. Shawnee Coal Co. v. Andrus, 661 F.2d
1083, 1093 (6th Cir. 1981); see also Friends of Crystal River, 35 F.3d at 1079 n.13 (6th Cir.
1994). EPA’s objections simply cannot be characterized as a patent violation of its authority,
where the CWA explicitly allows EPA to object to a permit application “as being outside the
requirements of this section [of the CWA], including, but not limited to, the [Section 404]
guidelines developed under subsection (b)(1).” 33 U.S.C. § 1344(j). The Road Commission’s
attempt to paint the “outside the requirements” language of Section 404 as creating a narrow
power to object only to certain matters, while leaving the rest to the state’s discretion, is not
supported by statutory or regulatory language. See, e.g., 40 C.F.R. § 233.50(e) (permitting EPA
objections based on “the Regional Administrator’s determination that the proposed permit is . . .
outside [the] requirements of the Act, these regulations, or the 404(b)(1) Guidelines.”).
For Leedom to apply there must also be a showing that the aggrieved party would be
“wholly deprived” of its statutory rights. Detroit Newspaper Agency v. NLRB, 286 F.3d 391, 397
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(6th Cir. 2002). The Road Commission cannot make this showing, because it could simply
continue the permit process before the Corps and eventually receive a final decision that is
judicially reviewable.
C.
The Road Commission also argues in the alternative that it would have been futile for it
to have continued the permit process before the Corps because the Corps had made up its mind
and would reject any application from the Road Commission. To support this argument, the
Road Commission relies on comments that the Corps made to the first revised application in
March 2012, where the Corps questioned the stated purpose of the project and identified other
deficiencies in the Road Commission’s proposal. The Road Commission also refers to an email
from an EPA employee to the Corps, in which the EPA employee stated sarcastically that it
“looked like ‘they’ want to go to the [Corps] permit for [County Road] 595, EPA is such a job
killer . . . hope the [Corps] is more reasonable.”
There is nothing to suggest that the Corps’ prior comments on an earlier draft of the Road
Commission’s application meant that the Corps would never grant the permit or that the Road
Commission could not resolve the issues prompting those comments. And even if the Road
Commission’s interpretation of a snide email from an EPA employee to a Corps employee is
accurate, the email is not sufficient to show that the Corps had predetermined that it would never
grant the Road Commission a permit.
IV.
For the foregoing reasons, we AFFIRM the judgment of the district court.
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