Opinion
Cause No. IP98-0606-C-M/S
May 4, 2000.
Keith Guthrie 9693 E. 850 S Elizabethtown, IN 47232
Michael A Mullett Mullett Associates 309 W. Washington St. Suite 233 Indianapolis, IN 46204
Sue Hendricks Bailey Office of the U.S. Attorney 5th Floor U.S. Courthouse 46 East Ohio Street Indianapolis, IN 46204
Ronald E Elberger Bose McKinney Evans 2700 First Indiana Plaza 135 N. Penn St. Indianapolis, IN 46204
Thomas A Lorenzen Environmental Defense Section U S Dept of Justice P O Box 23986 Washington, DC 20026-3986
Bradley L Williams Ice Miller Donadio Ryan One American Square Box 82001 Indianapolis, IN 46282
ORDER ON MOTION TO RECONSIDER OR INTERVENE AND ENTRY RELATING TO PENDING CROSS-MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on three motions. First is a motion to reconsider or alternatively to intervene filed on April 9, 1999, by one of the defendants, RDI/Caesars Riverboat Casino, L.L.C. ("Caesars"), for whom the Court has already granted a motion to dismiss. The second is a motion for summary judgment filed by the plaintiffs on September 21, 1999, and third is a cross-motion for summary judgment filed by the government defendants on the same day. For the reasons further explained below, the motion to reconsider or alternatively to intervene is DENIED, subject to re-opening should Caesars' circumstances change. The plaintiffs' motion for summary judgment and the government defendants' cross-motion for summary judgment cannot be resolved without reference to the administrative record, which has not been filed with this Court.
A fourth motion for summary judgment was filed on June 18, 1999, by defendant Caesars, conditioned on the Court granting its motion to intervene. Because the Court has denied that motion, it will not address Caesars' motion for summary judgment.
I. MOTION TO RECONSIDER
On March 9, 1999, the Court granted Caesars' motion to dismiss on the basis that the plaintiffs, Hoosier Environmental Council, Inc. ("Hoosier"), Protect Our River Environment ("PORE"), and Protect Our Woods, Inc. ("POW"), did not have standing to sue Caesars. In reaching that conclusion, the Court considered several primary differences between the case against Caesars, and the environmental cases relied on by the plaintiffs in support of their claims of standing.
First, the Court noted that the plaintiffs' members have no statutory or common law right to sue Caesars under the environmental laws invoked by this suit. In the absence of such protectable rights in relation to Caesars' property, the plaintiffs' members could not establish an injury in fact against Caesars.
Second, the development at issue was not located on public lands the plaintiffs' members would have a right to use, but on private property. This fact distinguishes the case against Caesars from those in which the plaintiffs opposed decisions about the use of public lands. Third, and related to the second, is the fact that no agency of the federal government was funding or otherwise involved in the development of Caesars' property. Finally, the alleged harms arose from environmental "costs" not adequately counted by the Army Corps of Engineers ("COE") when it issued a permit to Caesars. Those costs would have been counted, the plaintiffs contend, if the COE had prepared an Environmental Impact Statement ("EIS") pursuant to § 102 of the National Environmental Policy Act ("NEPA"), or performed an adequate public interest review in compliance with § 404 of the Clean Water Act ("CWA").
In its March 1999 order, the Court considered testimony from the named individual members of the plaintiff organizations and found that none of them claimed to own property contiguous to, live downstream from, or use the water affected by, the project. For this reason, the plaintiffs could not invoke any rights under the CWA's citizen suit provision. Nor did they claim to have any right to use the 233 acres of land owned by Caesars on which the project is located. Instead, the individual members of the plaintiff organizations claim to have suffered injury under the Administrative Procedures Act ("APA"), 5 U.S.C. § 702; see Lujan v. Defenders of Wildlife, 504 U.S. 555, 573, n. 8 (1992), by virtue of the fact that the Army Corps of Engineers did not adequately assess the environmental harms caused by Caesars' development of its property.
The Court notes that the plaintiffs are not entitled to challenge the issuance of a permit under § 404 of the CWA directly, because the statute does not contain citizen suit provisions to allow such an action. See California v. Sierra Club, 451 U.S. 287, 297 (1981); Solid Waste Agency of North. Cook Cty. v. United States Army Corps of Eng., 101 F.3d 503, 506 (7th Cir. 1996). Instead, the CWA contains a citizens suit provision that only relates to suit against a permit holder in violation of the conditions of the permit. 33 U.S.C. § 1365(a). Caesars is the permit holder and there are no allegations that it has violated any of the permit conditions.
When plaintiffs allege facts that show they have suffered a "legal wrong because of agency action, or [are] adversely affected or aggrieved by agency action within the meaning of a relevant statute," they have stated a claim for such a procedural injury. 5 U.S.C. § 702. The problem is, an alleged procedural injury caused by agency action does not give a plaintiff standing to sue the beneficiary of that action. In fact, the plaintiffs have admitted they have no claims against Caesars. See Pls.' Oppos. to Req. for Taxation of Costs at 1 ("Plaintiffs filed this suit for the sole purpose of obtaining judicial review pursuant to the Administrative Procedure Act of final agency action by the U.S. Army Corps of Engineers. . . . No claims were made against Caesars."). Because Caesars asked the Court to determine the plaintiffs' standing to sue, and the COE did not, the Court was limited to determining the standing issue only with respect to Caesars.
In its motion, Caesars provided the Court with no citation to cases or statutes that would authorize it, a private defendant, to make arguments or showings on behalf of a governmental defendant already represented in the case. In an action brought under the APA, for judicial review of an administrative agency's decision, plaintiffs would have standing to sue the agency if they show they suffered an injury to a concrete interest falling within the zone of interests of the relevant statutes. See American Fed. of Gov't Employees v. Cohen, 171 F.3d 460, 465 (7th Cir. 1999). As the plaintiffs readily conceded, they have no such claims against Caesars. The complete absence of a claim against Caesars could only mean the plaintiffs had no standing to sue Caesars. Despite its detailed analysis of the "injury in fact" requirement in the plaintiffs' suit against Caesars, the Court essentially found that it had no power to order Caesars to do anything that would remedy the plaintiffs' alleged injuries. Nothing in Caesars' current briefing changes the Court's interpretation of the law of standing as it applies to the unusual circumstances of this action.
Although Caesars is technically correct that the issue of standing focuses on the plaintiff, the issues that must be determined are whether the plaintiff has suffered or will suffer a concrete and personal harm that would support a suit at common law, and whether the harm is to an interest protected by the statute claimed to provide grounds for relief. Solid Waste Agcy. v. United States Army Corps of Eng., 101 F.3d 503, 505 (7th Cir. 1996). The statute that provides grounds for relief here is the APA, and the interest it protects is the plaintiff's interest in having the administrative agency properly apply and enforce the environmental laws and regulations. Harm to such an interest will not support a suit at common law against a private defendant, which means that the identity of the defendant matters when determining a plaintiff's standing in an APA action.
Thus, the motion to reconsider the Court's decision to grant Caesar's motion to dismiss for lack of standing is DENIED.
II. MOTION TO INTERVENE
In the alternative, Caesars has moved to be allowed to intervene in this action as a defendant.
Caesars readily admits that this motion creates an anomaly. As a party that was already named in the action, ostensibly so that it could protect its interests in the outcome of litigation affecting its interests, Caesars won a motion to dismiss and then promptly asked to be allowed back into the action. In its memorandum in support of its motion to reconsider, Caesars clarified that its intent in filing the motion to dismiss had been to obtain a dismissal of the entire action, not just the action as it related to Caesars.
Although the Court did not consider the issue of standing with respect to the COE, it is satisfied that standing exists. Given that the action challenges the COE's administrative decision under the APA, and the plaintiffs have pointed to both an alleged procedural injury and concrete, identifiable harms of the type the statutes being administered were intended to prevent, the plaintiffs' standing to sue the COE is intact.
Although an alleged procedural injury alone does not suffice to give standing to any member of the three plaintiff organizations, they have also alleged harm to a concrete interest that is protected by the NEPA. The plaintiffs are challenging the COE' failure to prepare an environmental impact statement ("EIS"), which is a NEPA requirement designed to protect the "threatened concrete interests" of those who use and recreate in the nature preserves near the site. See Florida Audubon Soc. v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996). The affidavits and deposition testimony submitted by the plaintiffs suffice to meet this standing requirement, because they reflect more than a general interest in the EIS common to all members of the public. See Id. Because NEPA does not have a private cause of action that would authorize plaintiffs to enforce the EIS requirement, they must find a right to sue elsewhere. Id. That right is found in the APA, but only with respect to the agency making the allegedly improper decision, which is why there was no standing for the plaintiffs to sue Caesars.
To show an injury-in-fact with respect to the agency, the plaintiffs must show that the erroneous omission of an EIS "may cause the agency to overlook the creation of demonstrable risk," not previously measured, of serious environmental impacts that affect the plaintiffs' particularized interests. See Florida Audubon Soc. v. Bentsen, 94 F.3d 658, 666 (D.C. Cir. 1996). That threshold has been met in the facts alleged in this case.
With respect to Caesars' desire to intervene, the Court does not disagree that Caesars has a an interest relating to the subject matter of this suit. The federal rules allow intervention as of right when an entity "claims an interest relating to the subject matter of the suit . . . provided that the disposition of the suit might impair or impede [its] ability to protect that interest and the interest is not adequately represented by a party to the suit." Solid Waste Agcy. v. United States Army Corps of Eng., 101 F.3d 503, 505 (7th Cir. 1996) (quotations omitted); see Fed.R.Civ.P. 24(a). Caesars holds the permit the plaintiffs claim was issued without performance of an EIS or an adequate public interest review. If the plaintiffs succeed in showing that the COE's issuance of that permit to Caesars was arbitrary, capricious, an abuse of discretion, or otherwise against the law, then the Court must vacate the permit and remand the case to the COE for further study and action. See Florida Power Light Co. v. Lorion, 470 U.S. 729, 744 (1985). As a result, Caesars would lose not only its permit, but its right to operate a riverboat gambling business on the site. See Ind. Code § 4-33-4-20 (voiding license from Indiana Gaming Commission if COE rescinds a permit approval). Given Caesars' investment of time and money in developing the site, which has been in operation since November of 1998, and the obligations it has assumed with respect to employees, vendors, and governmental units, the Court is satisfied that Caesars has a significant interest in the subject matter of this suit and that its interests will be affected by the outcome.
According to the Supreme Court, if the administrative record "does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record . . ., the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation." Florida Power Light Co., 470 U.S. at 744.
Nevertheless, the inquiry must also consider whether Caesars has proven the "inadequacy of representation" of its interests by existing parties. See Solid Waste Agcy., 101 F.3d at 508. The position held by Caesars in this litigation, before the case against it was dismissed, was as a party defendant. Its interest was to uphold the permit, which squarely aligns it with the interests of the COE. "Where the interests of the original party and of the intervenor are identical — where in other words there is no conflict of interest — adequacy of representation is presumed." Id. Like the would-be intervenor and the COE in Solid Waste Agcy., Caesars' and the COE's goal for this litigation is the same: "to defeat [the plaintiffs'] effort to invalidate the [granting] of the permit." Id. Although Caesars "does not question the skill and experience of the Justice Department attorneys, nor the fact that the [COE] will presumably defend its position," it does claim a difference between the position of the COE and Caesars's position. Caesars' Brf. in Supp. of Mot. to Recon. at 9. According to Caesars, it is a "regulated industry" and the COE is the regulator. Id. The COE also has other interests to consider when it "adopts a regulatory position, including the interests of environmental groups." Id.
Caesars' arguments might bear some consideration if this were a case in which the COE were actually "adopting a regulatory position," but it is not. The COE has already regulated Caesars' activities, and granted a permit to allow Caesars to develop the gaming operation that now exists at the site in dispute. There is no challenge to agency rule-making or discretionary regulating at the core of this action, aside from the challenge of the administrative decision. Rather, the issues revolve around whether the process used by the COE in granting the permit to Caesars was faulty. Caesars has supplied the Court with no reason to doubt the COE's commitment to defending its own administrative decision-making process. In fact, Caesars stated that it "is confident that the [COE] will vigorously and ably defend the position that they issued the permits to Caesars in full compliance with NEPA and any other applicable laws." Id. at 9-10. That having been said, Caesars suggests that it may rely on a recent case that "invalidates" certain portions of the CWA § 404 permit laws, and thereby challenge the necessity of a § 404 permit for Caesars' project at all. Id. at 10 (citing National Mining Assoc. v. United States Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998).
Upon review of that case, the Court notes that it did not invalidate any aspects of § 404; rather, the circuit court found that the COE exceeded its authority under § 404 when it promulgated a rule in 1993 (the "Tulloch Rule") that allowed the COE to regulate activities that merely involved "incidental fallback" of dredged materials into the navigable waters from which the material was taken. National Mining Assoc., 145 F.3d at 1408. The Tulloch Rule required application for a § 404 permit by any person engaged in the discharge of dredged or fill material into the navigable waters of the United States. Id. It did so by redefining the term "discharge of dredged material" to include "any redeposit of dredged material within" the navigable waters. Id. It was this redefinition that the circuit court, in affirming the district court ruling, found to have exceeded the statutory authority of the COE. Id. The district court had entered a nationwide permanent injunction against the COE and the Environmental Protection Agency ("EPA"), prohibiting them from enforcing the Tulloch Rule anywhere in the United States. The circuit court affirmed that decision in National Mining Assoc. Id. at 1401.
In its response to Caesars' motion to reconsider or intervene, the COE agreed that it cannot represent Caesars' interests with respect to this issue, but pointed out that if Caesars raises this issue it will be more appropriately aligned as a plaintiff. See United States' Mem. in Resp. to Mot. of Caesars to Recon. Order of Mar. 9, 1999, or in the Alternative for Intervention at 18, n. 13. According to the COE, the issue of whether it should have required Caesars to obtain a § 404 permit in the first place "is entirely independent from the issue of whether the Corps followed the proper procedures" when issuing the permit. Id. Consequently, Caesars could raise the issue in a separate action as a plaintiff. Id. The Court agrees. The only way the COE's authority to require a § 404 permit would be relevant to this litigation is in a challenge to the validity of the permit itself, which is a position Caesars has not taken. As a result, the fact that Caesars' and the COE's interests diverge over this issue does not determine whether Caesars should be allowed to intervene in this action.
Instead, the Court finds that Caesars' interests in defending the issuance of the permit for its riverboat gambling operation are the same as the COE's, and the COE and its counsel may be presumed to be adequate representatives of those interests. Caesars has presented no evidence to suggest that its interests will not be adequately represented by the COE or its counsel, the Department of Justice ("DOJ"), in this matter. The fact that the DOJ has "nationwide responsibilities beyond this particular case" does not prove that it will not adequately represent Caesars' interests in the continuing validity of the permit. See Solid Waste Agcy., 101 F.3d at 508 (noting that DOJ's status as lawyer for the entire federal government is not enough to establish inadequacy of representation of a private party's interests). "More is needed than a presumption of inadequacy based on the diversity of the [DOJ's] interests," to prove that the government will not adequately represent the interests of a private party subject to its regulation. That evidence may include a showing that the DOJ is "dragging its heels" in defending the case, or that it "is prepared to sell out the Corps for the sake of some competing interest." Id. The Seventh Circuit has acknowledged that an "aspiring intervenor" may be concerned about some future divergence between its interests and the government's, at which point the representation by the DOJ may prove inadequate. Id.
"The proper way to handle such an eventuality is for the would-be intervenor, when . . . no present inadequacy of representation can be shown, to file . . . a standby or conditional application for leave to intervene. . . ." Solid Waste Agcy., 101 F.3d at 509. In that way, the district court could postpone a decision about intervention until such time as the applicant is prepared to demonstrate inadequacy. Id.
Although it affirmed the district court's denial of the appellant's application to intervene in Solid Waste Agcy., the Seventh Circuit noted that the "conditional application course" would remain open to the appellant. Id. The circumstances in this matter summon the same advice. Caesars is unable to demonstrate the inadequacy of representation provided by the DOJ in this case, but is concerned that its interests might be "sold out" to some greater governmental interest in the future. For that reason, the Court will deny the present alternative motion to intervene, subject to reopening the decision should the circumstances change in a way that threatens Caesars' interests in the preservation of its permit and operation of its business.
Having found that Caesars is not entitled to intervene as of right, the Court turns briefly to consider whether to allow permissive intervention. Such intervention is within the court's discretion if the would-be intervenor has a claim or defense in common with a claim or defense in the suit. See Fed.R.Civ.P. 24(b); Solid Waste Agcy., 101 F.3d at 509. As the holder of the disputed permit, the owner of the land on which the riverboat gambling operation is located, and a substantial investor in the development of the project in reliance on that permit, Caesars certainly has claims or defenses in common with the COE. Both Caesars and the COE share a common interest in defending against the plaintiffs' APA challenge of the process used for granting Caesars' permit. Virtually all of their defenses would be identical, which would entitle Caesars to this Court's consideration of whether to exercise its discretion in favor of allowing intervention.
When exercising its discretion, a court must consider "whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties." Security Ins. Co. v. Schipporeit, Inc., 69 F.3d 1377, 1381 (7th Cir. 1995). Among the factors to be considered would be "the impact of the intervention on [those] rights." Id. Here, the plaintiffs do not object to the Court allowing Caesars to intervene as long as the Court correspondingly denies Caesars' pending Request for Taxation of Costs. Pls.' Resp. at 12. Nor does the COE have an objection, even though it points out the possibility that one of Caesars' arguments is adverse to the COE's issuance of the permit. United States' Mem. in Resp. at 19-20. However, given the fact that Caesars was already a party in this litigation, and it could have remained so had it not filed a motion to dismiss the plaintiffs' claims for lack of standing, the Court is not inclined to allow it to rejoin the litigation by permissive intervention.
As already noted, Caesars' interests in preserving the permit are the same as the COE's. Yet, by moving individually for dismissal of the action on the basis of the plaintiffs' lack of standing, without recognizing how standing to sue a permit holder and standing to sue the administrative agency under the APA differ, Caesars has complicated, delayed and prolonged this litigation. Had the motion been filed jointly with the COE, the Court would not have been required to consider the plaintiffs' standing to sue Caesars in isolation from any standing they have to sue the COE under the APA. Caesars' subsequent attempt to gain reconsideration of the Court's decision, or to intervene, further demonstrates its tendency to prolong and complicate this APA action. In light of Caesars' conduct to this point, the Court finds scarce indication that allowing Caesars to participate from this point forward would facilitate the efficient resolution of the issues remaining, and sufficient evidence that it would not. Thus, the Court declines to exercise its discretion in favor of allowing Caesars' permissive intervention.
Caesars' alternative motion to intervene is DENIED, but this decision is subject to re-opening should the circumstances change in a way that threatens Caesars' interests because of inadequate representation by the COE. As a result of this decision, the Court will not consider the issues, arguments and evidence presented in Caesars' motion for summary judgment filed June 18, 1999, its response to the plaintiffs' motion for summary judgment, or the plaintiffs' motion to strike exhibits included with Caesars' motion for summary judgment. Nor will the Court rule on Caesars' request for taxation of costs until all of the issues in this matter have been resolved.
Instead, the Court will consider and resolve the pending cross-motions for summary judgment filed by the plaintiffs and the COE on September 21, 1999. To do so requires the Court to fully consider the administrative record of the agency's proceedings. See Florida Power Light, 470 U.S. at 743 (citing Camp v. Pitts, 411 U.S. 138, 142 (1973): the "focal point for judicial review should be the administrative record already in existence. . . ."). The court must then apply the "appropriate APA standard of review" to the decision made based on that record. Id. In this action the standard requires the court to "hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Although the COE's findings were attached to the pleadings, for the Court to properly assess the reasonableness of those findings it must have access to the administrative record. The APA specifically directs courts reviewing an administrative agency's decision-making process and decision to "review the whole record or those parts of it cited by a party." Id.
Given that the administrative record involved in the COE's decision-making process consists of thirty-seven volumes of materials, the Court directs the parties to provide it with copies of only the tabbed sections to which they refer in their summary judgment briefing and statements of facts. If any other portions of the record should be reviewed to provide context for the cited materials, the parties will be expected to include those portions in their indexed appendix of exhibits from the administrative record. Until this information has been provided, the Court cannot adequately evaluate the merits of the pending cross-motions for summary judgment.
III. CONCLUSION
The Court has fully considered the motion to reconsider filed by defendant Caesars and its alternative motion to intervene, and has found no reason to reconsider its earlier decision to dismiss the action against Caesars. Caesars' motion to reconsider is therefore DENIED. Further, because Caesars cannot demonstrate that its interests will not be adequately represented by the COE, the Court has DENIED Caesars' alternative motion to intervene. That decision is subject to being reopened should the circumstances change in a way that threatens Caesars' interests in the preservation of its permit and operation of its business. Because of Caesars' continuing interest in the outcome of this action, it should remain on the distribution list for purposes of receiving copies of all of the Court's subsequent rulings.
The pending cross-motions for summary judgment cannot be resolved at this time because the parties have failed to file the relevant portions of the administrative record for this Court's review. As a result, the Court now directs the parties to file appropriately indexed copies of the tabbed sections to which they refer in their summary judgment briefing and statements of facts. They are also instructed to provide the Court with any other portions of the record that should be reviewed to provide context for the cited materials. The parties must file the relevant portions of the administrative record no later than fifteen (15) days from the date of this order.
IT IS SO ORDERED this day of 2000.
LARRY J. McKINNEY, JUDGE United States District Court Southern District of Indiana
Distribution to:
Keith Guthrie 9693 E. 850 S Elizabethtown, IN 47232
Michael A. Mullett MULLETT ASSOCIATES 309 W. Washington St., Ste. 233 Indianapolis, IN 46204
Sue Hendricks Bailey, AUSA OFFICE OF THE U.S. ATTORNEY 5th Floor U.S. Courthouse 46 E. Ohio Street Indianapolis, IN 46204
Ronald E. Elberger BOSE MCKINNEY EVANS 2700 First Indiana Plaza 135 N. Penn St. Indianapolis, IN 46204
Thomas A. Lorenzen John W. Watts Environmental Defense Section U.S. DEPARTMENT OF JUSTICE P.O. Box 23986 Washington, DC 20026-3986
Bradley L. Williams ICE MILLER DONADIO RYAN One American Square Box 82001 Indianapolis, IN 46282