United States District Court, D. Alaska
For Cook Inletkeeper, Sierra Club, Alaska Survival, Plaintiffs: Brian Litmans, LEAD ATTORNEY, Katherine G. Strong, Trustees for Alaska, Anchorage, AK; Benjamin Alan Luckett, Joseph Mark Lovett, PRO HAC VICE, Appalachian Mountain Advocates, Lewisburg, WV; James B. Dougherty, PRO HAC VICE, Law Office of J.B. Dougherty, Washington, DC; Jessica Lynn Yarnall Loarie, PRO HAC VICE, Sierra Club, San Francisco, CA.
For United States Army Corps of Engineers, Thomas P. Bostick, Commander and Chief of Engineers, U.S. Army Corps of Engineers, Christopher D. Lestochi, Colonel, District Commander, U.S. Army Corps of Engineers, Alaska District, Defendants: Austin David Saylor, LEAD ATTORNEY, U.S. Department of Justice (DC Box 23986), Washington, DC; Kenneth Carl Amaditz, LEAD ATTORNEY, U.S. Department of Justice, Environmental Defense Section, Washington, DC; Kenneth Dean Rooney, LEAD ATTORNEY, U.S. Department of Justice/ENRD/NRS, Washington, DC.
For Alaska Railroad Corporation, Matanuska Susitna Borough, Intervenor Defendants: Jay C. Johnson, LEAD ATTORNEY, Venable LLP, Washington, DC; Kathryn Kusske Floyd, LEAD ATTORNEY, PRO HAC VICE, Venable LLP, Washington, DC; Michael A. Grisham, LEAD ATTORNEY, Dorsey & Whitney, LLC, Anchorage, AK.
RALPH R. BEISTLINE, UNITED STATES DISTRICT JUDGE.
This matter involves a dispute regarding the impact of the proposed construction and operation of the Port MacKenzie Rail Extension on surrounding wetlands. Plaintiffs argue that the Railroad's functional assessment significantly undervalued the wetlands to be filled and completely failed to account for impacts to adjacent wetlands. They filed a motion seeking summary judgment on all claims remaining in the Complaint. The Federal Defendants opposed and filed a crossmotion for summary judgment. Intervenor-Defendants Alaska Railroad Corporation (" the Railroad" ) and Matanuska-Susitna Borough (" MSB" ) also opposed and filed a cross-motion for summary judgment, and Inletkeeper replied.
Inletkeeper seeks relief under the Clean Water Act (" CWA" ), which prohibits the discharge of any pollutant into the navigable waters of the United States without the authorization of a CWA permit. The Corps issues permits for the discharge of dredged or fill material pursuant to the Corps' and U.S. Environmental Protection Agency's (" EPA" ) Section 404(b)(1) Guidelines (" the Guidelines" ). The Corps cannot authorize a discharge without " sufficient information to make a reasonable judgment as to whether the proposed discharge will comply with [the section 404(b)(1)] Guidelines."  Inletkeeper argues that the Corps acted arbitrarily and capriciously in issuing the Section 404 permit in September of 2012.
In approving the Railroad's proposal with regard to the discharge of dredged and fill material, Inletkeeper complains that rather than undertaking the analyses required by the regulations, the Corps merely adopted the assertions of the Railroad, which Inletkeeper argues are " unsubstantiated," and failed to meaningfully address strong criticisms by other expert agencies and abundant evidence in the record that undermines the Corps' conclusions. Inletkeeper argues that the Corps' decision was arbitrary and not entitled to deference for a variety of reasons. The Court previously considered Plaintiffs
arguments, partially disposed of the summary judgment motions, and requested further briefing on the sole issue of whether the Corps violated the CWA by relying upon a flawed functional assessment of the wetlands in the project area.
Two functional assessments were performed in this case, one in 2008 and the other in 2010. Inletkeeper complains that the 2010 functional assessment, performed by the Railroad and adopted by the Corps, contradicted the overwhelming record evidence indicating the high quality of the project area wetlands. The Final Environmental Impact Statement (" Final EIS" ) for the proposed construction and operation of the Port MacKenzie Rail Extension acknowledged that the wetlands in the area of the rail line are " very highly functional because they are predominantly intact, undisturbed systems."  Inletkeeper argues that the Final EIS and the U.S. Fish and Wildlife Service (" FWS" ), as well as the EPA, all noted the high quality of the wetlands at issue. Contrary to this evidence, the 2010 " functional assessment that the Railroad submitted to the Corps found that just 0.6 acres of the 95.8 acres to be filled are high functioning."  The vast majority -- 71.8 acres -- were deemed " moderate to low functioning."  This is dramatically different from the 2008 assessment, also performed by the Railroad, which identified 87-99% of the wetlands as " high functioning."  Inletkeeper suggests that the extreme difference was a result of the Railroad's improper exclusion of two critical wetland functions from the 2010 assessment -- " water quality" and " wetland plant diversity."  By removing these two functions from the analysis, the second functional assessment yielded dramatically lower results, enabling the Railroad to justify filling what was previously deemed " high functioning" wetlands by re-designating them as " moderate" or " low functioning." The FWS opined that these findings did not even " pass the red-face test." 
Inletkeeper complains that the Corps failed to give a reasoned explanation for its decision in light of agency criticism. Specifically, the EPA commented that " they do not concur with the assessment of the functional value of the wetlands that would be impacted by the proposed discharges," noting that the Railroad's assessment appears to understate the value of the ...