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STOECO DEV. v. DEPARTMENT OF THE ARMY CORPS OF ENG

November 2, 1988

STOECO DEVELOPMENT, LTD., a New Jersey Limited Partnership; STAINTON-BURRELL DEVELOPMENT, LTD., a New Jersey Limited Partnership; THE SHORE MEMORIAL HOSPITAL, a Non-Profit Corporation of the State of New Jersey; and THE PENNINGTON SCHOOL, a Non-Profit Corporation of the State of New Jersey, Plaintiffs,
v.
THE DEPARTMENT OF THE ARMY CORPS OF ENGINEERS OF THE UNITED STATES OF AMERICA, Defendant; and UNITED STATES OF AMERICA, Plaintiff, v. STOECO HOMES, INC.; STOECO DEVELOPMENT, LTD., a New Jersey Limited Partnership; STAINTON-BURRELL DEVELOPMENT, LTD., a New Jersey Limited Partnership; THE SHORE MEMORIAL HOSPITAL, a non-profit Corporation of the State of New Jersey; and THE PENNINGTON SCHOOL, a non-profit Corporation of the State of New Jersey, Defendants



The opinion of the court was delivered by: COHEN

 Presently before us are cross-motions for summary judgment in this consolidated action arising out of the defendant Department of the Army Corps of Engineers' (the "Corps") assertion of jurisdiction over approximately 17 acres of land in Ocean City, New Jersey, which the Government argues contains federally regulated wetlands. Plaintiffs are the owners and developers of the land in question. They move for summary judgment seeking, inter alia, a declaration that the Corps' assertion of jurisdiction is invalid. *fn1" Defendant's cross-motion seeks a ruling from the Court: a) upholding its assertion of jurisdiction; b) compelling removal of fill materials placed in wetland areas; and, c) imposing substantial monetary penalties for the alleged violations. The parties agree that the deferential "arbitrary and capricious" standard of the Administrative Procedure Act (5 U.S.C. § 551 et seq.) is applicable in reviewing the Corps' assertion of jurisdiction.

 Stoeco initiated this action by filing a complaint on January 5, 1988 seeking injunctive and declaratory relief. *fn2" On January 7, 1988, the Government filed a separate action against Stoeco for injunctive relief and civil monetary penalties under the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (hereinafter "Clean Water Act" or "CWA"). *fn3" Thereafter, on April 15, 1988, United States Magistrate Joel B. Rosen ordered that the matters be consolidated.

 To determine whether or not the agency action was "arbitrary and capricious" it is necessary for this Court to decide: 1) whether the administrative record was complete; and 2) whether that record provided a rational basis upon which to predicate jurisdiction.

 I. HISTORY AND DESCRIPTION OF THE LAND

 Ocean City is a barrier island separating the Atlantic Ocean from the tidal estuary which lies between it and the mainland of Cape May County. Stoeco Homes, Inc. purchased part of the lands in question from the City of Ocean City at a Public Sale on February 14, 1951. *fn4" The remainder of the tract over which the Corps now asserts jurisdiction was purchased from the City of Ocean City at a Public Sale on December 15, 1964. *fn5" Administrative Record at pp. 44, 46 and 63 (hereinafter "AR "). *fn6" Generally, both parcels combined are bordered on the east by Haven Avenue, and on the west by Ocean City Municipal Airport. Bay Avenue bisects the parcels on a north-south axis. Ten parallel streets cross east-west through the site, and are enumerated "Twentieth Street" through "Thirty-First Street." See Defendant's Brief in Opposition, Exhibit A.

 II. THE CLEAN WATER ACT

 Sections 301 and 502 of the Clean Water Act, 33 U.S.C. §§ 1311, 1362, prohibit the discharge of dredged or fill materials into "navigable waters" - defined as "waters of the United States" - unless authorized by a permit issued by the Corps pursuant to § 404, 33 U.S.C. § 1344. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 88 L. Ed. 2d 419, 106 S. Ct. 455 (1985). The policies, practices, and procedures to be followed by the Corps in connection with reviewing permits to authorize the discharge of dredged or fill material into "waters of the United States" pursuant to § 404, 33 U.S.C. § 1344 are set forth at 33 C.F.R. § 323 (1987). The term "waters of the United States" and all other terms relating to the geographic scope of jurisdiction are defined at 33 C.F.R. § 328 (1987) as provided for in 33 C.F.R. § 323. Under the implementing regulations, the term "waters of the United States" includes wetlands adjacent to traditional navigable waters and their tributaries. 33 C.F.R. § 328.3(a)(3) (1987). The term "wetlands" means:

 
those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.

 33 C.F.R. § 328.3(b) (1987).

 The term "adjacent" means:

 
bordering, contiguous, or neighboring. Wetlands separated from other waters of the United States by man-made dikes or barriers, natural river berms, beach ...

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