Opinion ID: 763589
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: 23 Michigan Peat engages in business activities which include the extraction of peat. It owns and controls two noncontiguous parcels of land in Minden, Sanilac County, Michigan, referred to as Minden North and Minden South and situated within a wetland area known as the Minden Bog. The Minden North parcel is approximately 2,000 acres and the Minden South parcel comprises approximately 819 acres. Since 1958, Michigan Peat has extracted peat from a portion of the Minden North site. 24 In 1991, Michigan Peat filed a wetland permit application under the Section 404 program which would authorize it to discharge dredged or fill materials and to conduct related activities at the Minden tracts. Midway through the application process, the State of Michigan requested that Michigan Peat place its then incomplete application on hold and develop an environmental site assessment (ESA). Michigan Peat complied; it developed an ESA from 1992-1994. In September 1994, Michigan Peat renewed its permit application to expand its operations to Minden South and to the unopened portions of Minden North. Specifically, Michigan Peat requested (1) a definition concerning the extent of the peat mining areas which were opened prior to October 1, 1980, (2) an after-the-fact authorization for areas where peat mining was initiated after October 1, 1980, and (3) authorization to expand the peat removal operations into an additional 1,792 acres of previously unmined wetlands. 25 Thereafter, the EPA reviewed Michigan Peat's application and on October 6, 1994 notified the MIDEQ Section 404 Director that it intended to comment. The EPA forwarded its written comments, as well as those of the Corps and the USFW, to the MIDEQ on December 23, 1994. The EPA objected to the permit application which sought permission to expand mining from 951 to all 2,819 acres of the facility. Michigan Peat responded to the EPA's objections. The MIDEQ and the EPA discussed the latter's objections and created a revised draft permit. With its concerns addressed by the new draft permit, on March 21, 1995 the EPA withdrew its objections. 2 Thereafter, the MIDEQ tendered a proposed permit to Michigan Peat along with a letter which outlined the proposed permit. The letter read in part: 26 Approximately 749 acres of the bog [Minden North] ... were impacted prior to October 1, 1980 and therefore do not fall under [our] jurisdiction. 27 ... 28 Approximately 202 acres of the bog [Minden North] have been impacted from October 1, 1980 to the present.... [A]n after the fact permit can be issued for the 202-acre area if the applicant agrees to accept all conditions shown on the attached permit. Please be advised that failure to accept the permit leaves the company with no authorization to extract peat within the areas opened since October 1, 1980. 29 Attached you will find a modified permit for continuation of peat mining in areas defined in the paragraph above. This permit is not valid until it is signed by the permittee. The applicant is requested to fully review the limitations (conditions) and terms of the permit. Upon agreeing to accept and comply with all limitations (conditions) and terms of the permit, the applicant must sign, date, and return it to this office. The signed permit must be received by this office no later than 15 days from the date of this letter. 30 ... 31 [T]he portion of your application proposing expansion of the peat removal operation into the unmined area of the Minden Bog [to wit--the remainder of Minden North, approximately 1049 acres, and the entire Minden South parcel, approximately 819 acres] is hereby denied. 32 The permit also set forth which lands Michigan Peat could impact and outlined the limitations (conditions) imposed on Michigan Peat upon acceptance of the proposed permit. Just above the signature line, the permit read: This permit shall become valid on the date of signature by the permittee. Upon signing by the permittee, a copy of the signed permit must be returned to the [MIDEQ]. Michigan Peat did not sign and return the tendered permit. 33 Rather, Michigan Peat decided to accept Part I of the decision, but to contest Parts II and III in two different forums. Pursuant to Michigan's Administrative Procedures Act, MICH. COMP. LAWS § 24.201 et seq. (APA), 3 Michigan Peat initiated a state administrative appeal of Part II of the permit, the after-the-fact permit subject to conditions. Part II of the permit contained several conditions unacceptable to Michigan Peat, to wit--(1) a requirement that Michigan Peat place land in a conservation easement in order to utilize the permit, (2) a complete waiver requirement, and (3) an indemnification requirement for the benefit of the State of Michigan. Concurrently, Michigan Peat filed an action against the MIDEQ in the Michigan Court of Claims asserting federal and state takings claims based on Part III of the permit decision, the complete prohibition against peat harvesting on approximately 2,000 acres of Michigan Peat's property. Shortly after the state suit was filed, the parties entered a joint stipulation, which allowed Michigan Peat to continue operating on the 951 acres of the Minden facility that the MIDEQ had authorized in Part I of its proposed permit. 34 On June 6, 1997, the MIDEQ Director issued Michigan Peat a state-only permit which granted Michigan Peat authorization under all applicable state wetland laws to extract peat on 2,819 acres of the company's Minden parcels, subject to certain restrictions. The permit stated that it modified the March 21, 1995 permit decision by allowing the expansion of peat extraction into all previously unmined portions of Minden North and Minden South. The permit concluded with the following caveat: 35 ISSUANCE OF THIS PERMIT DOES NOT AUTHORIZE ANY WORK UNDER THE AUTHORITY OF THE FEDERAL CLEAN WATER ACT. Any work initiated on this project without required § 404 approval may be considered a violation of Federal Law. For further information, contact the United States Environmental Protection Agency, Region 5. 36 The cover letter which accompanied the state permit suggested that Michigan Peat contact the Corps for federal authorization. 37 On June 18, 1997, the EPA wrote the MIDEQ (with a copy to Michigan Peat) in response to the issuance of the state permit. The EPA observed that the state permit differed greatly from the proposed Section 404 permit, which it contended had been rejected by Michigan Peat by its refusal to sign and return it and by its dual challenges to it and thus had never become effective. Additionally, the EPA articulated that it had objected to earlier proposals to authorize certain activities encompassed in the new state permit and reiterated its previously-stated objections. Finally, the EPA concluded that because the MIDEQ had failed to issue a final permit which satisfied the EPA's objections, authority to process Michigan Peat's permit application rested with the Corps by operation of law. 38 On June 23, 1997, the Corps advised Michigan Peat that it would handle the Section 404 permitting procedure with regard to the Minden parcels and would begin its process upon receipt of a complete application. Course of Proceedings 39 Prior to the issuance of the state-only permit, on May 16, 1997, Michigan Peat filed for declaratory relief in federal court specifically seeking a determination that: (1) Michigan Peat's conduct fully complies with the Section 404 program for the State of Michigan; (2) Michigan Peat's permit process, including the appellate and takings remedies pursued by Michigan Peat fully comply with and are a part of the Section 404 program; (3) the federal government is bound by the March 1995 permit decision; (4) a state court order be entitled to full faith and credit; (5) the EPA is barred by estoppel from modifying Michigan's approved permit program and circumventing the permit process; (6) the EPA's express threats to circumvent the CWA and its promulgated regulations including its demand that Michigan Peat stay or dismiss its constitutional and statutory takings claims, constitute denial of Michigan Peat's procedural and substantive due process rights under the U.S. Constitution; (7) the EPA's effort to modify the program and circumvent the permit process constitutes an impairment of contract in violation of Article I, section 10, clause 1 of the U.S. Constitution; (8) Michigan Peat's harvesting activities are exempt from regulation under Michigan's Section 404 program; (9) the disparate treatment of Michigan Peat under the delegated program constitutes a violation of the equal protection clause of the U.S. Constitution; and (10) the state-only permit does not modify the 1995 permit decision and does not strip Michigan Peat of its appellate rights and remedies under the Section 404 program. Subsequently, the district court dismissed the claims asserted against the state defendants based on their Eleventh Amendment immunity, and dismissed the claims asserted against the federal defendants for lack of subject-matter jurisdiction over suits for pre-enforcement relief.