NINTH CIRCUIT UPHOLDS NEWHALL RANCH 404(B)(1) ANALYSIS; REJECTS ARGUMENTS THAT CORPS FAILED TO PROPERLY ANALYZE COSTS OF ALTERNATIVES

Friends of the Santa Clara River v. U.S. Army Corps of Engineers

2018 U.S. App. LEXIS 8883

April 2018

The Ninth Circuit has rejected a legal challenge to the Army Corps of Engineer’s Section 404 permit for the 12,000-acre Newhall Ranch mixed-use project in northern Los Angeles County.  Standing out, among the many issues raised under the federal Clean Water Act, ESA and NEPA, is the court’s treatment of the Section 404(b)(1) “least environmentally damaging practicable alternative” (LEDPA) analysis.

As background, the Section 404(b)(1) guidelines prohibit the Corps from issuing a Section 404 permit authorizing the discharge of dredged or fill material if there is a “practicable alternative” to the discharge with a less adverse impact on the aquatic ecosystem.  Practicability, in this context, may consider the cost of alternatives.  (40 C.F.R., § 230.10(a)(2).) 

The project’s challengers argued, in this regard, that the Corps improperly rejected certain alternatives because the Corps regarded those alternatives as too costly to the project proponent.  They also argued that the Corps was required to consider the project’s anticipated revenues when analyzing the cost of different alternatives, ostensibly to demonstrate that the costs of rejected alternatives were sufficiently balanced by revenues and profits.  The Ninth Circuit rejected both arguments. 

First, the court observed that the alternative selected by the Corps was 56 percent more expensive than comparable projects in Southern California, and 5.7 percent more costly than the proponent’s preferred alternative.  Thus, in the court’s view, the Corps justifiably found that the selected alternative was already at the “outer limit of cost practicability” and that further restrictions would be impracticably expensive.  Second, the Section 404(b)(1) guidelines do not expressly require the Corps to assess revenues when determining practicability, nor do the guidelines require the use of any specific metric when analyzing costs.  As such, the court found that the Corps’ decision not to analyze projected revenues was reasonable.

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Sean Hungerford’s practice includes the regulatory and environmental aspects of natural resources law, with an emphasis on resources development, water quality issues, and development rights. His practice extends to all aspects of land developm… Read More