United States District Court, S.D. West Virginia
RON FOSTER, individually, and FOSTER FARMS, LLC and MARKETING & PLANNING SPECIALISTS LIMITED PARTNERSHIP, Plaintiffs,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and SCOTT PRUITT, in his official capacity as Administrator, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Defendants
MEMORANDUM OPINION AND ORDER AND FINDINGS OF FACT AND
CONCLUSIONS OF LAW
T. COPENHAVER, JR. SENIOR UNITED STATES DISTRICT JUDGE
court conducted a bench trial on the counterclaim of the
defendants (EPA group) against the plaintiffs (Foster group)
on August 14 through 18, 2017.
defendants claim that the plaintiffs filled “waters of
the United States” without a Section 404 Clean Water
Permit to do so when they filled four headwater streams in
2010 on their real estate acquired by them in 2009, known as
the “Neal Run Crossing property, ” near
Parkersburg, West Virginia.
FINDINGS OF FACT
following discussion represents the court's findings of
fact, made by a preponderance of the evidence.
Run Crossing Property
Foster is a citizen of West Virginia who resides in Putnam
County, West Virginia. Jt. Stip. ¶ 1. Foster Farms, LLC.
is a Kentucky limited liability company. Id. at
¶ 2. Marketing & Planning Specialists
(“M&P”) is a Nevada limited partnership
authorized to do business in West Virginia. Id. at
to its purchase by Foster, the Neal Run Crossing property was
owned by Endurance Group, LLP (“Endurance”).
Id. at ¶ 6. While Endurance owned the property,
it filled and altered a stream in an area of the property
known as “Pad 1” without a Clean Water Act
section 404 permit. Id. at ¶ 7. The Pad 1 area
and this CWA violation is unrelated to the one at issue in
this matter. Before the EPA could begin an enforcement action
related to the Pad 1 CWA violations, Endurance was forced
into bankruptcy on March 3, 2009, for reasons unrelated to
the CWA violation. Id. at ¶ 9; Aug. 18, 2017
Trial., Tr. at 80-82.
October 19, 2009, the bankruptcy court issued an order that
permitted the sale of the 90-acre Neal Run Crossing property
to Foster free of all pre-bankruptcy liability, with the
exception that $50, 000 be set aside in a trust to fund
restoration work to address the Endurance Group's CWA
violations. Id. at ¶ 10. The bankruptcy
court's order limited the remediation sought by EPA and
the U.S. Army Corps of Engineers (“Corps”) to an
area within 30 feet of the toe of the fill made by Endurance.
Jt. Stip. ¶ 10. The restoration work was completed in
October 29, 2009, Foster assigned ownership of approximately
40.5 acres of the Neal Run Crossing property to M&P, of
which he is the general partner and manager. Id. at
¶ 11. Foster assigned ownership of the near 50-acre
balance of the Neal Run Crossing property to Foster Farms,
LLC, of which he is the 80% owner. Id. As a
practical matter, Foster is the decision maker for both
entities with respect to all matters at issue herein.
Neal Run Crossing property has been divided into five
“pads” for development purposes. Id. at
¶ 15. The alleged CWA section 404 violations at issue in
this litigation occurred on the portion of the Neal Run
Crossing property known as “Pad 4” or “the
Site.” Id. at ¶ 4. The Pad 4 area is
owned in part by M&P and in part by Foster Farms.
Id. at ¶ 16.
plaintiffs conducted development work on Pad 4, four streams,
identified as “relevant reaches” RR1, RR2, RR3
and RR4, existed on the Site. U.S. Ex. 25; U.S. Ex. 20 at
¶ 0000483-484; U.S. Ex 284. RR1, RR2, and RR3 flowed
into RR4 prior to their fill. U.S. Ex. 20 at ¶ 0000483;
U.S. Ex. 284. RR4 exited the western boundary of the Site,
crossed a neighbor's hayfield, and joined Blackwell Creek
(also known as the First Unnamed Tributary to Neal Run).
Stokely Test., Tr. at 128-129, 132-133, 137-138; 145;
Andreescu Trial Tr. 59-60 (Aug, 15, 2017); U.S. Exs. 279
Creek joins the Second Unnamed Tributary to Neal Run. Jt.
Stip. ¶ 25. Blackwell Creek is mapped as having
intermittent-seasonal flow by the United States Geological
Survey. U.S. Ex. 5B at ¶ 0000660. Multiple photographs
depict flowing water in Blackwell Creek at various times of
year. Lutte Test., Tr. at 45-46; 47-48 (Aug. 16, 2017); U.S.
Ex 187 at USEPA0001244, U.S. Ex. 246.
Second Unnamed Tributary to Neal Run is a relatively
permanent water, which flows into Neal Run. Jt. Stip. ¶
26. Neal Run is a relatively permanent water, which flows
into the Little Kanawha River. Id. at ¶ 27. The
Little Kanawha River flows into the Ohio River at
Parkersburg. Id. A portion of Neal Run, extending
2.4 miles from its confluence with the Little Kanawha River,
has been identified by the Corps as a “navigable water
of the United States” for purposes of Section 10 of the
Rivers and Harbors Act of 1899. Id.
Little Kanawha River is navigable-in-fact, and has been
identified by the Corps as a “navigable water of the
United States” for purposes of Section 10 of the Rivers
and Harbors Act of 1899. Id. at ¶ 28. The
approximate distance (in terms of river/stream miles) from
the confluence of RR4 and Blackwell Creek to the designated
navigable portion of Neal Run is 3.1 miles. See U.S.
Ex. 275; Jt. Stip. ¶ 27.
EPA's September 9, 2010 Site Visit
September 9, 2010, EPA inspectors Stephanie Andreescu and
Todd Lutte were in West Virginia visiting other sites
unrelated to this case when they decided to visit the Neal
Run Crossing property to inspect the Pad 1 violations, which
were not yet remedied at the time. Andreescu Trial Tr. 35-36.
The visit was due, in part, to complaints the EPA received
from Mr. and Mrs. Blackwell, who owned the neighboring
property, about flooding on their property that they believed
was caused by the rerouted stream. Id. at 34-35.
at the property, the EPA inspectors observed a billboard
advertising the property for sale by Foster Farms and
depicting a development plan superimposed on a topographic
map. Id. at 43; 46-48; U.S. Ex. 7 at USEPA001237.
Because the billboard showed proposed development in the Pad
4 area where streams appeared to be located, the EPA
inspectors went to examine Pad 4. Andreescu Trial Tr. 48. The
EPA inspectors did not call the phone number listed on the
billboard or otherwise attempt to obtain permission from
plaintiffs prior to entering the Pad 4 area. Andreescu Trial
Tr. at 48-49.
reach Pad 4, the EPA inspectors followed Blackwell Creek
upstream and then crossed the adjoining hayfield.
Id. at 49-50; U.S. Ex. 5A. When they reached the Pad
4 area, the inspectors observed that the Site had been
cleared and grubbed of vegetation. Andreescu Trial Tr. 50.
The inspectors photographed a stream channel that was later
identified as RR4 that had been partially filled with dirt,
rocks, and uprooted vegetation. Andreescu Trial. Tr. 50-55;
Lutte Test., Tr. at 10-13, 14-15 (Aug. 15, 2017); U.S. Ex. 7
at USEPA001248, 1249, 1250, 1252. Upstream from the
disturbance, the inspectors observed the stream channel where
Mr. Lutte observed water. Andreescu Trial Tr. 55-56; Lutte
Test., Tr. at 15-16 (Aug. 15, 2017); U.S. Ex. 7 at USEPA
investigating the stream channel above the disturbance, the
EPA inspectors encountered Bryon Scott Moore, a neighbor who
represented that he had permission to be on the property to
collect firewood and berries. Andreescu Trial Tr. 57; Moore
Dep. Tr. at 19. Moore did not actually have permission to be
on the property. Moore Trial Tr. 29. Moore offered to show
the EPA inspectors where the partially filled streams
started, but they were unable to find them due to dense
vegetation. Moore Dep. Tr. at 29, 33-34; Andreescu Trial Tr.
57-58; Lutte Test., Tr. at 16.
inspectors also encountered plaintiffs' contractor, Dave
Walters from Walters Excavating while at the Site. Andreescu
Trial Tr. 58-59; Lutte Test., Tr. at 17-18 (Aug. 15, 2017).
Foster hired Walters Excavating to clear, fill, and level the
Site and hired Fox Engineering to design the plans for pad
construction on the Site. Foster Test., Tr. at 66-67, 74. The
EPA inspectors asked Walters if a section 404 permit had been
obtained for the Pad 4 work and advised him that one was
likely required. Andreescu Trial Tr. at 59; Lutte Test., Tr.
at 17, 53-54 (Aug. 15, 2017); David Walters Test., Tr. at
113-114 (Aug. 15, 2017). They also gave Walters their contact
information and then exited the Site. Lutte Test., Tr. at
17-18 (Aug. 15, 2017).
EPA inspectors left the Site, they observed the stream
channel as it exited the Site and continued into the
neighboring hayfield. Andreescu Trial Tr. 59-61; Lutte Test.,
Tr. at 18-19 (Aug. 15, 2017). The EPA inspectors observed
that the bed, bank, and ordinary high water mark (sometimes,
“OHWM”) vanished in the center of the hayfield,
but that there still existed a concave pathway in the
landscape through which water would flow. Andreescu Trial Tr.
at 60; Lutte Test., Tr. at 18-22 (Aug. 15, 2017). The pathway
reformed a more distinct channel with bed, bank and ordinary
high water mark at the end of the hayfield and then joined
Blackwell Creek. Andreescu Trial Tr. at 60; Lutte Test., Tr.
at 18-22 (Aug. 15, 2017).
Events Following the 2010 Site Visit
the EPA inspectors left the Site, Mr. Walters called Dan
Metheny, a professional engineer who worked for Fox
Engineering, which was the firm Foster retained to draw up
plans for construction on the Site. David Walters Test., Tr.
at 113-114 (Aug. 15, 2017). Walters advised Metheny that the
EPA had been at the Site and told him that a permit might be
needed for the work that Walters Excavating was conducting on
Pad 4. Id.; Metheny Test., Tr. at 144 (Aug. 18,
2017). That day, Metheny emailed Foster, informing him of the
conversation Walters had with the EPA and providing him with
some information about CWA section 404 permits. U.S. Ex. 157;
Foster Test., Tr. 88-89 (Aug. 16, 2017).
plaintiffs nor Metheny contacted the Corps or the EPA to ask
whether a permit was required. U.S. Ex. 14 at ¶ 0000374;
U.S. Ex. 15 at ¶ 0000384; U.S. Ex. 17 at ¶
0000365-66; Lutte Test., Tr. at 71-72 (Aug. 15, 2017). Foster
did not ask Metheny about his qualifications for determining
whether a CWA section 404 permit was required. Foster Test.,
Tr. at 89 (Aug. 16, 2017); Metheny Test., Tr. at 167 (Aug.
18, 2017). Foster was aware that Metheny and Fox Engineering
had been involved with the CWA violations on Pad 1 of the
Neal Run Crossing property. Foster Test., Tr. at 89 (Aug. 16,
2017); Metheny Test., Tr. at 167 (Aug. 18, 2017). Although
Metheny had worked with CWA section 404 permits through his
work on bridges, he had never performed a stream and wetland
delineation. Metheny Test., Tr. at 167 (Aug. 18, 2017). A few
days later, Metheny advised Foster that a section 404 permit
was not needed for the Pad 4 work. Foster Test., Tr. at 89
(Aug. 15, 2017).
Excavating conducted mechanized land clearing, including
using earth moving equipment to clear, fill, and level
portions of Pad 4 and constructed a sediment pond on Pad 4.
Jt. Stip. ¶ 17. Using heavy machinery, Walters
Excavating cleared brush, dug out tree stumps, constructed a
sediment pond, and placed excavated dirt and rocks on Pad 4.
Id. at ¶ 18. Prior to filling Pad 4, Walters
observed a stream channel that forked off to the left and
right upgradient. David Walters Test., Tr. at 99-101; 121.
Excavating continued working in Pad 4 after the EPA's
visit. Each Walters Excavating invoices listed a description
of the work they performed each day. Seth Walters Test., Tr.
at 56-57 (Aug. 18, 2017). During the three days following the
EPA's Site visit, September 10 through September 12,
2010, Walters Excavating “[c]leared brush and cleaned
off for new haul road leading to outlet 3.” U.S. Ex. 16
at ¶ 0000410. Outlet 3 references the location where the
sediment pond is now located and the haul road would permit
access for the machinery to build the sediment pond and to
eventually bring fill down to the Site. Seth Walters Test.,
Tr. at 58 (Aug. 18, 2017). The sediment pond was then
constructed. U.S. Ex. 16 at ¶ 0000410; Metheny Test.,
Tr. at 168 (Aug. 18, 2017); David Walters Test., Tr. at
111-112. Walters Excavating's work filling the Pad 4 area
was completed in November 2010. U.S. Ex. 16 at ¶
0000402-408. M&P paid Walters Excavating $352, 053.73 for
the work they performed. Id.
the Site visit, Andreescu confirmed that plaintiffs had not
obtained a section 404 permit for the work on Pad 4.
Andreescu Trial Tr. at 86. She then completed an inspection
report and a photograph log from the Site visit. U.S. Ex. 9;
Andreescu Trial Tr. at 68-70, 86. Andreescu reviewed
geographic information system (“GIS”) data for
the Site, which included historic aerial images, topographic
contour lines, digital elevation data, and United States
Geological Survey mapping. Andreescu Trial Tr. at 70-71; U.S.
Exs. 5A, 5B. She also reviewed scientific literature on the
ecological importance of headwater streams to downstream
waters. Andreescu Trial Tr. at 82-86; U.S. Exs. 10-12. From
this evidence Andreescu concluded that the stream channel on
the Site was a headwater stream that flowed from Pad 4,
through the hayfield and connected to Blackwell Creek.
Id. at 86; U.S. Ex. 9.
December 2010, the EPA sent CWA section 308 information
requests to Foster Farms and Fox Engineering. Andreescu Trial
Tr. at 87; U.S. Exs. 13-14. Fox Engineering, Foster Farms,
and Walters Excavating responded to the information requests
in December 2010. U.S. Ex. 24-26.
February 2010, Ron Foster hired Jacob White of Randolph
Engineering to conduct a wetland and stream delineation for
Pads 4 and 5. Jt. Stip. ¶ 20; U.S. Ex. 20. Randolph
Engineering identified eleven “stream assessment
reaches” or “SARs” on Pads 4 and 5. Jt.
Stip. ¶ 22. On Pad 4, Randolph Engineering delineated
SAR 3 (“RR4”), SAR3(a)(1) and (a)(2)
(collectively “RR3”), SAR3(b)(1) and (b)(2)
(collectively “RR2”), and SAR3(c)
(“RR1”). Jt. Stip. ¶¶ 23, 24. RR1 and RR4
were completely filled on the Site and portions of RR2 and
RR3 were filled on the Site. U.S. Ex. 20. Randolph
Engineering classified RR4 as an intermittent stream and RR
1, 2, and 3 as ephemeral streams. Id. at ¶
0000475. White has reaffirmed his delineation of RR1, RR2,
RR3, and RR4. White Test., Tr. at 104 (Aug. 18, 2017).
Randolph Engineering concluded that all of the stream
assessment reaches were likely jurisdictional under the CWA.
U.S. Ex. 20 at ¶ 0000475-76. At trial, White indicated
that his conclusion about whether the streams were
jurisdictional changed after reading the GAI Report obtained
by Foster, which indicated that there was no hydrological
connection across the hayfield. White Test., Tr. at 101-102.
White was not made aware that Dana Pehrman, an expert engaged
by Foster, visited the Site in July, 2015, when water was
flowing across the hayfield and into Blackwell Creek.
Id. at 118.
Engineering submitted a wetland and stream delineation report
(“Randolph Report”) dated March 10, 2011 to the
Corps for verification and a jurisdictional determination.
Jt. Stip. ¶ 22; U.S. Ex. 20; Hemann Test., Tr. at 155
(Aug. 15, 2017).
addition to delineating and identifying the streams on the
Pad 4 site (now RR 1, 2, 3 and 4), Mr. White filled out and
included in the Randolph Report forms providing information
used in connection with the Corps of Engineers Functional
Calculator for High Gradient Headwater Streams in Eastern
Kentucky and Western West Virginia HGM Guidebook. These forms
provided the Corps with information regarding certain
features of the streams being assessed that correlate with
functions being performed by those streams. U.S. Ex. 20 at
¶ 0000515-0563; White Test., Tr. at 114:15-115:3,
Hemann, of the Corps, sent the Randolph Report to Andreescu
for the EPA to review in April 2011. Andreescu Trial Tr. at
99-103; U.S. Ex. 19. Andreescu reviewed the Randolph Report,
which made her aware that plaintiffs had placed a substantial
amount of fill in the Pad 4 streams since her September 9,
2010 Site visit. Andreescu Trial Tr. at 107-108.
2011, Andreescu and Pam Lazos, counsel for the EPA, visited
the Site with Foster. Id. at 110-111. Andreescu
observed that plaintiffs had placed a large quantity of fill
on the Site, and had constructed a sediment pond.
Id. at 114-118; U.S. Ex. 22. Andreescu concluded
that the additional filled streams were jurisdictional based
upon her observations during the two Site visits, review of
Geographic Information System (“GIS”) data,
scientific literature, and the Randolph Report. Andrescu
Trial Tr. at 149-50.
verified the Randolph Report by reviewing aerial photographs,
topographic maps, wetland inventory maps, and by conducting
two site visits; and in June 2011, he inspected the Pad 4
area and in July 2011, he inspected the Pad 5 area. Hemann
Test., Tr. at 157-58; 158-162 (Aug. 15, 2017). Hemann
concluded that the filled streams, RR1, 2, 3, and 4, were
jurisdictional under the CWA. U.S. Ex. 25. Hemann determined
that RR4 was an intermittent-seasonal stream based on the
watershed's 30-acre size, and the characteristics of RR5
and RR10, which were streams in Pad 5 that had not been
filled. Hemann Test., Tr. 167-68 (Aug. 15, 2017); U.S. Ex.
173 at MPS001242; U.S. Ex. 25. Hemann also concluded that
RR1, 2, 3, and 4 have a significant nexus to downstream
traditional navigable waters. U.S. Ex. 25.
September 2011, Andreescu and Lutte visited the Neal Run
Crossing property with Foster to review the Pad 1 restoration
work and again inspected the Pad 4 area. Andreescu Trial Tr.
October 2011, Foster submitted an after-the-fact permit
application to the Corps. U.S. Ex. 152; Hemann Test., Tr. at
171-72 (Aug. 15, 2017). The application stated that 1, 970
linear feet of stream had been filled with 100, 000 cubic
yards of fill material. Id.
October 2011 to December 2011, the EPA and the Corps
conducted internal discussions to determine which agency
would take the lead in addressing the Site violations. Hemann
Test., Tr. at 173-74. In December 2011, the EPA and the Corps
had a telephone conference and it was decided that EPA would
be the lead agency in addressing the Pad 4 violations.
Andreescu Trial Tr. at 135-36; U.S. Ex. 26.
January 3, 2012, Lazos emailed Foster and notified him that
the EPA had assumed the lead and would be seeking penalties
for the violations. U.S. Ex. 103. On January 24, 2012, the
EPA issued an Administrative Compliance Order
(“ACO”) to Foster Farms for the Pad 4 violations.
U.S. Ex. 28.
February 2012, Foster notified Andureescu by telephone and
letter that the ACO should have been issued to M&P
instead of Foster Farms. Andreescu Trial Tr. at 143-45; U.S.
Ex. 29. That same month, Foster contacted the Corps and
requested that they complete the verification of the Randolph
Report and provide him with a jurisdictional determination.
U.S. Ex. 153. On February 22, 2012, the Corps sent Foster a
letter notifying him that it had determined that the Pad 4
streams were covered by the CWA. U.S. Ex. 30.
March 30, 2012, Foster sent the EPA a letter attaching a
proposed mitigation plan for the Site and requesting
information supporting the EPA's jurisdictional
determination. U.S. Ex. 31. On April 5, 2012, Andreescu
responded to Foster's letter again stating that the EPA
was the lead agency and summarized the EPA's previous
findings that the filled streams were jurisdictional. U.S.
Ex. 32; Andreescu Trial Tr. 153-157.
April 2012, Foster attempted to appeal the Corps'
jurisdictional determination. Foster Trial, Tr. at 7-8 (Aug.
18, 2017). However, because the EPA had assumed the lead on
the case, the Corps could not accept an appeal. See
33 C.F.R. § 331.11. At Foster's request, the EPA
provided additional information about the basis for the
jurisdictional determination in a May 30, 2012 letter. U.S.
Ex. 194. Foster thereafter submitted written information from
Randolph Engineering and Fox Engineering to support his
assertion that the streams were not covered by the CWA. U.S.
Ex. 227. Andreescu considered the materials provided by
Foster but determined that they did not alter the conclusion
that the Pad 4 streams were within CWA jurisdiction.
Andreescu Trial Tr. at 157-159, 167-169.
September 2012, the EPA provided comments on plaintiffs'
proposed mitigation plan and requested a revised plan based
on those comments. Id. at 173-75; U.S. Ex. 35.
Streams' Physical Contributions
Pad 4 Streams
Pehrman, Foster's expert, identified “a number of
different tributaries” existed that flowed into where
the sediment pond now exists prior to its construction.
Pehrman, Test. Tr. 157-58 (Aug. 17, 2017). Based upon his
review of aerial photographs, he concluded that RR4 flowed
intermittently on the Site prior to its fill. Id. at
Stokely, the EPA's expert in aerial photographic
interpretation, viewed pre-disturbance aerial photographs of
the Pad 4 area and identified RR2 and RR3, which were shown
flowing into RR4 prior to the construction of the sediment
pond. Stokely Test., Tr. at 128-136 (Aug. 16, 2017); see
e.g., U.S. Exs. 317-320 (aerial photographs of the
Site). Stokely also viewed low-altitude oblique images from
which the stream channels of RR2 and RR3 were visible and
water can be seen flowing from the undisturbed sections of
RR2 and RR3 onto the filled sections of those same streams.
Stokely Test., Tr. at 140-42 (Aug. 16, 2017); U.S. Exs. 220,
222, 224. From this evidence, Stokely opined that RR2 and RR3
were tributaries to RR4. Stokely Test., Tr. at 144-45 (Aug.
the September 9, 2010 Site visit, EPA inspectors Andreescu
and Lutte observed and photographed the partially disturbed
RR4. Andreescu Trial Tr. at 53-54; U.S. Ex. 7 at
USEPA001248-1249; Lutte Test., Tr. at 10-13, 14-24 (Aug. 15,
2017). The undisturbed portion of RR4's channel was
visible on the Site, identifiable by a lack of vegetation and
substrate on the bottom of the channel, which is
“debris, rocks, cobble, stone, [and] sediment, ”
and an ordinary high water mark. Lutte Test., Tr. at 11-12,
80 (Aug. 15, 2017); U.S. Ex. 7 at USEPA001248. Upstream of
the disturbance, Lutte observed RR4's channel, an
ordinary high water mark, and also observed water in the
channel. Id. at 15-16, 80; U.S. Ex. 7 at
visited the Site on May 12, 2015 and was able to observe the
unfilled portions of RR2 and RR3. Stokely Test., Tr. at 138
(Aug. 16, 2017). Although he did not see RR1 when he was
mapping the Pad 4 streams by viewing aerial photography, he
observed RR1 when he visited the Pad 4 area. Id. at
United States' experts on stream ecology and hydrology,
Drs. Arscott and Dow visited the Neal Run Crossing property
on May 12, 2015. They observed and photographed the portions
of RR2 and RR3 that had not been filled on the Site and
observed bed, banks, and water in those streams. Arscott
Test., Tr. at 196-199 (Aug. 16, 2017); U.S. Exs. 261-263.
They also observed water coming from the fill where RR1 and
RR4 were located on the Site as it flowed into the sediment
pond and they took in-situ water chemistry of the water
emerging into the fill. Arscott Test., Tr. at 209-11; U.S.
Exs. 254, 261.
also used software called “Terrain Analysis Using
Digital Elevation Model” (“TauDEM”) to map
the Pad 4 streams prior to his visit to the Site. Dow Test.,
Tr. at 77-79, 82-83 (Aug. 17, 2017); U.S. Ex. 303C. When he
arrived on the Site, the unburied portions of RR2 and RR3
were located in the places TauDEM predicted they would be.
Dow Test., Tr. at 119-20 (Aug. 17, 2017). TauDEM also mapped
RR1 and RR4 as flowing prior to their fill. Id. at
99-100. Dr. Dow was able to confirm the locations that TauDEM
mapped RR1 and ...