In a ruling with potential implications for development projects impacting wetlands, streams and lakes subject to federal jurisdiction, the Ninth U.S. Circuit Court of Appeals has upheld an injunction against a development in suburban Phoenix that environmentalists challenged based on the Clean Water Act.

Although the court did not rule on the merits, the court did indicate that the U.S. Army Corps of Engineers needed to consider more of the 600-acre subdivision than simply the 66 small locations, totaling 7.5 acres, where development would alter seasonal streams.

The project at issue is a proposed 794-lot, single-family, gated subdivision on 608 acres of desert. The site is an alluvial fan with 31.3 acres of braided washes that run all across the land. Because the washes carry water during periods of heavy rain, the Corps of Engineers asserted its jurisdiction. The developer, 56th & Lone Mountain, LLC, applied for a § 404 permit under the Clean Water Act to permit the filling of 7.5 acres of waterways. The developer identified 66 sites that would be filled for road and utility crossings, building pads, flood control and other reasons. Despite the opposition of the Environmental Protection Agency (EPA) and the U.S. Fish and Wildlife Service (FWS), both of which said the site might provide habitat for the endangered ferruginous pygmy owl, the Corps of Engineers issued the permit.

An environmental group called Save Our Sonoran (SOS) sued, alleging violations of the Clean Water Act and the National Environmental Policy Act. At the group’s request, District Court Judge Frederick Martone granted a temporary restraining order, and then a preliminary injunction to halt the project while litigation proceeded. Judge Martone concluded that SOS had raised serious questions. Although the washes amounted to only 5% of the development site, he likened them to capillaries. “It is difficult to deal with tissue without dealing with capillaries, and difficult to deal with capillaries without dealing with tissue,” Martone wrote. When 56th and Lone Mountain continued construction anyway, Martone made clear that development must cease until a hearing on the merits could be conducted.

The developer then appealed the court orders, but a three-judge panel of the Ninth Circuit upheld Judge Martone.

The test for a preliminary injunction includes a sliding scale “in which the required degree of irreparable harm increases as the probability of success decreases,” the court said, citing Baby Tam & Co., Inc. v. City of Las Vegas, 154 F3d 1097, 1100 (9th Circuit 1998). “[T]he district court made the determinations of hardship based on its factual findings and balanced the hardships appropriately,” the Ninth Circuit ruled. An appellate court will overturn a preliminary injunction only if it finds that the lower court abused its discretion. That was not the case here.

“[T]he district court properly observed that once the desert is disturbed, it can never be restored. Thus, the court concluded, the plaintiffs had adequately demonstrated the possibility of irreparable harm,” Judge Sidney Thomas wrote for the Ninth Circuit. “The reasoning and conclusion are consistent with controlling precedent.”

The developer argued that the district court erred by considering the 31.3 acres of washes, rather than only the 66 permit sites. But the Ninth Circuit ruled that a developer’s application does not determine the extent of the Corps of Engineers’ jurisdiction.

“[I]t is the impact on jurisdictional waters that determines the scope of the Corps’ responsibility, not the constructs of the developer,” Thomas wrote. “Lone Mountain’s narrow jurisdictional interpretation would defeat the purpose of the [Clean Water Act’s] mandate to regulate the pollutants that flow into the nation’s waterways.”

“Specifically,” Thomas continued, “the district court concluded that there were serious questions as to whether the Corps had correctly confined its jurisdiction to the 7.5 acres that were the subject of the dredge and fill permit applications. It is significant at the onset to recall that two federal agencies, the EPA and the FWS — not the usual suspects in opposing the action of a federal agency — disagreed with the acreage limitations set forth in the permit applications and thus with the Corps’ interpretation of its jurisdiction.”

Considering that the washes “run through the property like lines run through graph paper,” the Corps’ jurisdiction could be extensive, the court noted. Even the Corps’ own environmental assessment concluded that denial of the § 404 permit would prevent the proposed development.

After upholding the injunction, the Ninth Circuit returned the case to the lower court for further proceedings.

The Case:
Save our Sonoran, Inc. v. 56th & Lone Mountain, LLC, No. 02-16156, 04 C.D.O.S. 7882, 2004 DJDAR 10664. Filed August 26, 2004.
The Lawyers: For SOS: Myron Scott, (480) 968-2179.
For the developer: Jay Shapiro, Fennemore Craig, (602) 916-5000.