"fall within 'the zone-of-interests to be protected or regulated by the statute or constitutional guarantee in question.'" Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 475, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982) (quoting Association of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 153, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970)). This prudential standing requirement was originally developed in the context of actions brought under the judicial review provisions of the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 701-702. See Clarke v. Securities Indus. Assoc., 479 U.S. 388, 400 n.16, 93 L. Ed. 2d 757, 107 S. Ct. 750 (1987); Association of Data Processing Service Organizations, Inc., 397 U.S. 150, 25 L. Ed. 2d 184, 90 S. Ct. 827; see also Erwin Chemerinsky, Federal Jurisdiction § 2.3.6, at 101 (2d ed. 1994). However, the Supreme Court has recognized that a zone of interests standing requirement applies in actions predicated on other statutes. See Bennett v. Spear, U.S. , , 137 L. Ed. 2d 281, 117 S. Ct. 1154, 1161 (1997). See also Cort v. Ash, 422 U.S. 66, 78, 45 L. Ed. 2d 26, 95 S. Ct. 2080 (1975) (requiring would-be private party plaintiffs under 18 U.S.C. § 610 to show that they were among "the class for whose especial benefit the statute was enacted").
The Supreme Court has recently noted that "the breadth of the zone of interests varies according to the provisions of law at issue, so that what comes within the zone of interests of a statute for purposes of obtaining judicial review of administrative action under the 'generous review provisions' of the APA may not do so for other purposes." Bennett, U.S. at , 117 S. Ct. at 1161 (citing Clarke v. Securities Industry Assoc., 479 U.S. 388, 400, n.16, 93 L. Ed. 2d 757, 107 S. Ct. 750). Conversely, the zone of interests analysis is not at all applicable when Congress expresses an intent to eliminate such prudential restrictions by including a broad citizen suit provision in the relevant statute. Id. at , 117 S. Ct. at 1162-63 (holding that the citizen suit provision of the Endangered Species Act, which provides that "any person" may bring suit, must be taken at "face value"). Furthermore, Congress only expressly "negates" the zone of interests test when it includes in a statute a citizen suit provision which broadly permits "any person" to bring suit. Id. at , 117 S. Ct. at 1162 ("Congress legislates against the background of our prudential standing doctrine, which applies unless it is expressly negated."). However, this court need not engage in an analysis of the breadth of the statutory language, as mandated by Bennett, because a private right of action under § 10(b) and Rule 10b-5 is entirely judge-made. Appropriately, in the absence of an express Congressional sanction of citizen suits, the federal courts have interpreted the Exchange Act in keeping with judicially imposed limitations on standing.
The Birnbaum/Blue Chip Stamps "purchaser-seller" rule is itself derived from the same prudential concerns that animate the zone of interests test. See Landy v. FDIC, 486 F.2d 139, 158 (3d Cir. 1973) (noting that purchaser seller requirement is "consistent with generally applicable rules of standing."); Herpich v. Wallace, 430 F.2d 792, 805-06 (5th Cir. 1970) (holding that only purchasers or sellers can incur the injury proscribed by § 10(b) and Rule 10b-5). Clearly, were this court to suspend the purchaser-seller rule for suits seeking only injunctive relief, as plaintiff argues that it should, these prudential concerns would not disappear. Even if plaintiff is correct that the purchaser-seller requirement is inapplicable in an action seeking only injunctive relief, Trump must still satisfy the requirement that its alleged injury fall within the zone of interests sought to be protected by section 10(b) and Rule 10b-5.
In enacting § 10(b), Congress intended "to give the investing public the opportunity to make knowing, intelligent decisions regarding the purchase or sale of securities." Kahan, 424 F.2d at 173. The court in Kahan, allowed a minority shareholder to sue to enjoin allegedly "deceptive practices which if continued would lead to completed purchases or sales that give rise to a cause of action under § 10(b)." Id. The fact that the shareholder plaintiff in Kahan alleged that, absent an injunction, he would be the victim of a securities fraud, is a critical factor in analyzing standing to sue under Rule 10b-5.
In Initio, Inc. v. Hesse, 474 F. Supp. 312 (D. Del. 1979), a shareholder brought a derivative action, partly under Rule 10b-5, seeking to enjoin an impending stock sale. The court distinguished Kahan, noting that Initio did not allege that it was about to "suffer a direct injury as a result of [the alleged] misrepresentations." Id. at 321. Rather, Initio alleged that the company was about to perpetrate a securities fraud, and that it might be injured through a decline in the stock price, if lawsuits were brought against the company. Id. In the same manner, Trump here asserts that the general public will be defrauded unless an injunction issues. The injury alleged in this case, however, involves harm to the environment and to Trump's businesses arising from the proposed construction of the Westside Connector and the development of the H-Tract. Trump's "harm" is even more remote than that of Initio, because unlike a lawsuit based on fraud, it does not even arise "secondarily" from the fraud itself, but instead, arises from the intervening act of construction of the highway and tunnel, construction which it is alleged will be facilitated by the sale of the bonds.
The Fourth Circuit came to a similar conclusion when faced with a request for an injunction based upon an alleged impending violation of Rule 10b-5. Advanced Resources Int'l v. Tri-Star Petroleum, 4 F.3d 327 (4th Cir. 1993). Advanced Resources, a consulting firm, sought to prevent the defendant from "distributing or otherwise misusing a report" which it had written concerning recovery of methane gas from certain geologic formations. Id. at 329. Advanced Resources urged the court to limit the Blue Chip Stamps/Birnbaum rule to cases seeking damages and to "adopt a looser version of the rule for injunctive cases." Id. at 332. The court in Advanced Resources noted the split in the circuits regarding whether Blue Chip Stamps would bar suits for injunctive relief not brought by a purchaser-seller, but elected not to decide whether to endorse such an exception on the facts then before the court. Id.
Without specifically mentioning the zone of interests test, the court in Advanced Resources ruled that the plaintiff did not fall within the class of persons protected by § 10(b) and Rule 10b-5. After reviewing cases which had allowed an exception to the purchaser-seller rule, the Fourth Circuit explained that:
Any exception to the Blue Chip purchaser/seller standing requirements must . . . be limited to three groups of plaintiffs: 1) U.S. Attorneys or the SEC; 2) shareholder plaintiffs who claim that, without injunctive relief to stop the defendants' deceptive and unfair practices, they may in the future suffer monetary loss to their shares; or 3) plaintiffs who can show that, but for the deceptive practices, they would have bought or sold the securities at issue. In the instant case, however, [Advanced Resources] is most certainly not the government. Moreover, [Advanced Resources] can show no financial interest in the securities being offered, and thus cannot show that Tri-Star's misrepresentations to potential . . . investors will threaten the valuation of its own holdings. Finally, [Advanced Resources] is not a potential purchaser or seller of securities, as it does not claim that were it not for Tri-Star's misrepresentations it would buy or sell securities. [Advanced Resources] is merely a company who supplied an engineering report that is being used to raise money for a joint venture.
Id. at 333. The court concluded that the potential injuries alleged by Advanced Resources, "damage to its reputation, and the speculative threat of having to defend itself against future buyers or sellers of [the stock at issue]" were "simply too far removed, causally, from the sale or purchase of securities, to provide [Advanced Resources] with standing even under a relaxed rule applicable to injunctive relief cases." Id. In this case, Trump's allegation of injury is even farther removed from the alleged securities fraud. Trump cannot even allege, as Advanced Resources did, that it may be liable to the defrauded purchasers. Rather, Trump's alleged injury arises entirely out of the proposed construction of the Westside Connector. Thus, it is not alleged that the incipient "securities fraud" will harm Trump in any way.
Whether viewed as a separate prudential standing requirement or, more generally, as a prerequisite to stating a claim under the securities fraud provisions of section 10b, the result is the same. See FMC Corp. v. Boesky, 852 F.2d 981, 996 (7th Cir. 1988) (Ripple, J., concurring) (noting that the prudential standing requirement can also be viewed as an issue of "whether the plaintiff has stated a cause of action.") (citing Eason v. General Motors Acceptance Corp., 490 F.2d 654, 658 (7th Cir. 1973)). "Regardless of which of these formulations is employed, the essential question remains the same: Do the federal or state statutory provisions upon which each cause of action is predicated afford protection for the plaintiff from the sort of harm alleged in the complaint? To determine whether there is injury that gives rise to a cause of action, a court must analyze the particular provisions of the relevant statutes." Id.
In sum, Trump cannot claim that, if purchases or sales of the proposed SJTA bonds are not enjoined, the resulting inconvenience to Trump and loss of prospective business "would give rise to a cause of action under § 10(b)." Such losses would not be cognizable in a securities fraud action under § 10(b) and Rule 10b-5. Accordingly, even if this court affords Trump the benefit of the assumption "that the relaxed standing rule of Kahan retains its validity after Blue Chip Stamps in appropriate cases where only injunctive relief is sought," Trump's is not an appropriate case in which to apply the exception to the Birnbaum/Blue Chip purchaser-seller requirement. Tully, 540 F.2d at 194. A plaintiff who seeks to enjoin incipient sales of securities, primarily on the basis that such sales will only indirectly affect its own economic interests, lacks standing to bring an action for injunctive relief under § 10(b) and Rule 10b-5. For this reason, Trump's claim under § 10b and Rule 10b-5 must be dismissed.
B. The Clean Water Act
The Clean Water Act prohibits the "discharge of any pollutant" into the navigable waters of the United States. 33 U.S.C. § 1311(a). The term "pollutant" includes certain dredged materials and fill which may result from construction activities. See 33 U.S.C. § 1362(6). The "navigable waters of the United States" are broadly defined to include all "waters of the United States including the territorial seas." 33 U.S.C. § 1362(7). These waters, in turn, have been defined by regulation to include "wetlands adjacent to waters." 40 C.F.R. § 230.3 (s)(7). "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." 40 C.F.R. § 230.3 (t). Trump alleges that the "H-Tract consists primarily of wetlands." Complaint P 73.
Defendants move to dismiss plaintiff's claim under the Clean Water Act, because Trump has not complied with the statutory notice requirements of the Act. Section 505 of the CWA states that:
Except as provided in subsection (b) of this section . . ., any citizen may commence a civil action on his own behalf--
(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of (A) an effluent standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation.