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

April 14, 1992

Stoeco Development, Ltd.; Stainton-Burrell Development, Ltd.; The Shore Memorial Hospital; and The Pennington School, 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.; Stainton-Burrell Development, Ltd.; The Shore Hospital; and The Pennington School, Defendants.



The opinion of the court was delivered by: BASSLER

 BASSLER, DISTRICT JUDGE:

 Plaintiffs Stoeco Development, Ltd., Stainton-Burrell Development, Ltd., the Shore Memorial Hospital and the Pennington School ("Stoeco") move for a plenary hearing on the issue of whether the lands they are developing are "wetlands" within the meaning of the Clean Water Act, 33 U.S.C. § 1251 et. seq., and 33 C.F.R. § 328.3 (b). Defendant Department of the Army, Corps of Engineers, ("Corps") cross-moves for partial summary judgment on the issue of the Stoeco's liability for violating 33 U.S.C. § 1251 et. seq. For the following reasons, the Corps' motion is denied; Stoeco's motion is granted to the extent that the Corps must prove the existence of wetlands at trial by a preponderance of the evidence.

 Factual History

 The tract at issue is a 17-acre site in Ocean City, New Jersey, which Stoeco was developing for residential use. In 1987, the Corps made two determinations in regard to this tract. First, the Corps found the tract to be "wetlands" within the meaning of the Clean Water Act and the Code of Federal Regulations. Second, the Corps determined that Stoeco had placed fill on these wetlands without a permit, in violation of 33 U.S.C. § 1344. Having made these determinations, the Corps issued a "Cease and Desist" order to Stoeco on June 16, 1987, directing Stoeco to either remove the fill or apply for an after-the-fact permit.

 Admitting that it had placed fill on the site but denying that it was wetlands, Stoeco filed an action to invalidate the "Cease and Desist" order and to obtain a declaratory judgment that the area in question was not wetlands. In response, the United States filed an enforcement action seeking removal of the fill, civil penalties and injunctive relief. These two actions were subsequently consolidated into this lawsuit.

 In the summer of 1988, Stoeco moved for partial summary judgment on the limited issue of whether the Corps had authority to issue the "Cease and Desist" order. In support of this motion, Stoeco argued that because the administrative record compiled by the Corps did not support the issuance of the order, it was "arbitrary and capricious" within the meaning of 5 U.S.C. § 706 (2)(A) (the Administrative Procedure Act).

 The Corps cross-moved for summary judgment on three issues: its authority to issue the order under 5 U.S.C. § 706; its right to an order compelling Stoeco to remove the fill; and Stoeco's liability for monetary damages.

 In response to these motions, United States District Court Judge Mitchell H. Cohen denied on November 2, 1988 Stoeco's motion for partial summary judgment and granted partial summary judgment to the Corps solely on the ground that the agency action at issue - the issuance of the "Cease and Desist" order - was not "arbitrary and capricious". Stoeco Development v. Department of the Army Corps of Engineers, 701 F.Supp. 1075, 1084 (D.N.J. 1988).

 In accordance with Judge Cohen's order enforcing the "Cease and Desist" order, Stoeco applied for an after-the-fact fill permit on May 7, 1990. The permit application was denied by the Corps in January of 1991.

 In November of 1991, Stoeco moved for a plenary hearing on the issue of whether or not the tract was wetlands. In response, the Corps asserted that Judge Cohen had already determined that the tract was wetlands, and renewed its motion for partial summary judgment.

 Discussion

 The motions before this court raise three basic issues:

 (1) Did Judge Cohen rule that, in an enforcement action, the Corps does not have to prove the existence of wetlands by a preponderance of the evidence? Also, if Judge Cohen made such a ruling, is this court bound by it under the "law of the case" doctrine?

 (2) Assuming that no such ruling was made, must the Corps, in an enforcement action, prove the existence of wetlands by a preponderance of the evidence? Alternatively, is the trial court bound by the Corps' determination that an area is wetlands ...


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