Navigation Issues: Status of ACF Litigation Steven Burns Alabama Water Resources Conference Orange Beach, Alabama September 8, 2011

Balch & Bingham LLP 2 Presentation Overview ACF Litigation - Legal Issues ACF Litigation - The Courts ACF Navigation Issues Delaware River Litigation

Balch & Bingham LLP 3 ACF Litigation – Legal Issues

Balch & Bingham LLP 4 ACF Litigation - Legal Issues Parties ─UPSTREAM parties “Georgia Parties” (Georgia, Atlanta Regional Commission; DeKalb, Fulton, & Gwinnett Counties; Cobb County-Marietta Water Authority; City of Gainesville; Lake Lanier Association) ─DOWNSTREAM parties Alabama; Florida; Alabama Power Company; Columbus, GA; Apalachicola, FL ─Southeastern Federal Power Customers ─FEDERAL AGENCY parties Corps of Engineers (Corps), Fish & Wildlife Service (FWS)

Balch & Bingham LLP 5 ACF Litigation - Legal Issues Lower court divided proceedings into two “phases” Phase I: Authorized purposes of Lake Lanier ─For what purposes did Congress authorize construction of the Buford Dam? ─The answer to that question determines whether it was lawful for the Corps to operate Lake Lanier in support of local water supply in North Georgia Undisputed project purposes: hydropower, flood control, and downstream navigation (below Columbus)

Balch & Bingham LLP 6 ACF Litigation - Legal Issues Method to answer the question: ─Review legislation authorizing project construction and related documents ─Project-specific statutes Generally, these statutes authorize the Corps to proceed with projects in accordance with reports previously submitted by the Corps to Congress Which means: Congressional intent depends on an interpretation of Corps reports ─General statutes governing water supply, local contributions, etc.

Balch & Bingham LLP 7 ACF Litigation - Legal Issues 1946 Rivers & Harbors Act (RHA): ─Corps may build various projects “in accordance with the plans and subject to the conditions recommended by the Chief of Engineers in the respective reports hereinafter designated” ─“Apalachicola, Chattahoochee and Flint Rivers, Georgia and Florida; in accordance with the report of the Chief of Engineers, dated May 13, 1946” ─Also redesignates the “junction” dam as the Jim Woodruff Dam That’s all the statute says about it.

Balch & Bingham LLP 8 ACF Litigation - Legal Issues The report dated May 13, 1946, is reproduced in House Document 300 (1946).

Balch & Bingham LLP 9 ACF Litigation - Legal Issues House Doc. 300 includes a report by BG James B. Newman of the Corps Extensive discussion of topography, hydrology, demographics, economic development needs, construction costs, etc. ─Specific discussion of hydropower and flood control benefits for Atlanta area ─Describes limits on hydropower production: Not a total shutdown at off-peak times Continuous minimum flows to be provided at Atlanta (no less than 650 cfs)

Balch & Bingham LLP 10 ACF Litigation - Legal Issues The Newman Report describes the benefits to the Atlanta area associated with continuous flows. For example:

Balch & Bingham LLP 11 ACF Litigation - Legal Issues What do these passages and sources mean? Two possibilities: Either… ─Congress intended local water supply as a Congressionally authorized purpose, coequal with hydropower, flood control, and navigation; or… ─The Corps described water supply benefits incidental to reservoir construction and satisfaction of hydropower production and other project purposes.

Balch & Bingham LLP 12 ACF Litigation - Legal Issues The Corps has consistently interpreted the Newman report and other Corps documents as describing local water supply as an incidental benefit. The Corps argued that local water supply withdrawals were authorized… ─Not because the RHA said so ─Rather, the authority was provided under another law (Water Supply Act of 1958) (WSA)

Balch & Bingham LLP 13 ACF Litigation - Legal Issues Phase II: Endangered Species Act issues; Revised Interim Operating Plan ─Endangered mussels and Gulf sturgeon in the Apalachicola River ─Drought-driven operations intended to provide minimum flows below the Woodruff Dam Phase II issues are not central to the most recent court rulings.

Balch & Bingham LLP 14 ACF Litigation - The Courts

Balch & Bingham LLP 15 ACF Litigation - The Courts District Court Judge Magnuson ─From Minnesota ─Designated to hear consolidated cases at the Middle District of Florida ─Chosen because of his subject matter expertise, developed overseeing similar Missouri River litigation

Balch & Bingham LLP 16 ACF Litigation - The Courts Judge Magnuson’s opinion ruled in favor of AL & FL: ─Water supply a benefit of Buford construction, but only incidental to the primary project purposes ─Atlanta Mayor Hartsfield consciously turned down the opportunity to partially fund Buford construction and reserve storage space in the 1950s

Balch & Bingham LLP 17 ACF Litigation - The Courts Three-judge panel of the 11 th Circuit Court of Appeals reversed The RHA “clearly indicates that Congress intended for water supply to be an authorized, rather than incidental, use of the water stored in Lake Lanier” Based on interpreting the report by the Corps’ BG Newman, which, according to the court, Congress incorporated by reference

Balch & Bingham LLP 18 ACF Litigation - The Courts Legal backgrounder on Chevron, a Supreme Court case: When reviewing an agency’s interpretation of a statute, the courts must follow a two-step analysis: 1.If Congress has spoken clearly to the issue, the statute controls over any agency interpretation to the contrary. 2.If the statute is not clear, the court must apply a deferential standard in reviewing the agency’s interpretation. So, in this case, if the court had found any ambiguity, it would have been required to defer to the Corps’ interpretation.

Balch & Bingham LLP 19 ACF Litigation - The Courts The court instructed the Corps to articulate and determine the extent of its authority to provide water supply to the Atlanta area under the RHA and WSA Deadline: One year

Balch & Bingham LLP 20 ACF Litigation - The Courts Downstream interests have petitioned the entire 11 th Circuit for rehearing “en banc” Next step: Wait and see if the 11 th Circuit requests additional briefing.

Balch & Bingham LLP 21 Relevance to the Alabama-Coosa-Tallapoosa (“ACT”) case: ─Pending before Judge Bowdre in the Northern District of Alabama (Birmingham) ─August 19, 2011: Order requesting any additional challenge to the court’s jurisdiction based on 11 th Circuit opinion Due September 13, 2011 Responses due by October 5, 2011 ACF Litigation - The Courts

Balch & Bingham LLP 22 ACF Navigation Issues

Balch & Bingham LLP 23 ACF Navigation Issues Dredging in the Apalachicola is required to support commercial navigation. ─300+/- navigable river miles in the ACF ─107+/- river miles along the Apalachicola ─3 “trouble spots,” all in the Apalachicola, require dredging (12+/- miles) Corps has not dredged the Apalachicola since 2001 Result: Not commercially navigable ─Except on a single-shipment basis, supported by massive temporary releases to float a vessel over shallow spots

Balch & Bingham LLP 24 ACF Navigation Issues Disposal of dredged material is the primary basis for opposition to dredging. Past disposal methods objectionable to Florida interests on environmental grounds ─Filling of sloughs ─“Sand Mountain” Today, all parties are in agreement that those methods were inappropriate.

Balch & Bingham LLP 25 ACF Navigation Issues State permitting issues ─2003: Negotiations between Corps and Florida Department of Environmental Protection (FDEP) for state “water quality certification” under Clean Water Act (CWA) Section 401(a) ─2004: Corps files permit application ─2005: FDEP denies the Corps’ application ─2005 & 2006: Mid-Chatt group appeals unsuccessfully at FDEP and state court Corps did not appeal

Balch & Bingham LLP 26 ACF Navigation Issues Tri Rivers “404(t)” Petition (2006) ─Based on CWA Section 404(t): “This section shall not be construed as affecting or impairing the authority of the Secretary [i.e., the Corps] to maintain navigation.” ─Asserted the Corps’ obligation to maintain the federal navigation channel, despite state objection Corps responses (2006 & 2008): The Corps will not dredge due to… ─FDEP permit denial ─One-year Congressional ban ─Low tonnage results in funding shortfalls

Balch & Bingham LLP 27 ACF Navigation Issues Corps funding ─In recent years, the Office of Management and Budget has required funding of the Corps’ Civil Works program based on annual tonnage. ─ACF is low tonnage even with utilization compared to bigger systems. ─Lack of dredging means commercial tonnage is nonexistent. ─That means a “death spiral” of low tonnage and low funding

Balch & Bingham LLP 28 ACF Navigation Issues Other challenges for Corps funding ─General budget shortfalls ─Self-imposed Congressional limitation on “earmarks” in appropriations bills Effectively relinquishes all project-specific funding decisions to the Office of Management & Budget (President’s annual budget submission to Congress)

Balch & Bingham LLP 29 Delaware River Litigation

Balch & Bingham LLP 30 Delaware River Litigation Issue: ─Can a state stop the Corps from maintaining a federally authorized navigation channel? Federal statutes provide limited state authority to object to federal actions on environmental grounds ─CWA Section 404(t) ─Coastal Zone Management Act (CZMA)

Balch & Bingham LLP 31 Delaware River Litigation Essence of the dispute: ─Upstream interests support dredging to facilitate commercial navigation ─Downstream interests receive little economic benefit and object to dredging on environmental grounds In the Delaware River case, DE & NJ object to dredging for the benefit of the Port of Philadelphia Note the similarity to the ACF, where FL objects to dredging for the benefit of Alabama and Georgia shippers on the Chattahoochee and Flint Rivers

Balch & Bingham LLP 32 Delaware River Litigation In the Delaware River litigation, the Corps argued: ─CWA § 404(t) provides a “navigation exception” to waiver of federal sovereign immunity ─The states’ actions “would frustrate Congress’ authorization” ─Federal agencies may proceed over state objections pursuant to the CZMA Essentially the same positions advanced by Tri Rivers for ACF dredging

Balch & Bingham LLP 33 Delaware River Litigation The federal district courts for Delaware and New Jersey agreed and ruled in favor of the Corps. ─Excerpt from Delaware federal district court opinion: “Ultimately, however, the federal supremacy principles apparent in each of these regimes require that state law yield in certain statutorily defined circumstances.” ─Similar outcome in the New Jersey federal district court

Balch & Bingham LLP 34 Delaware River Litigation Status: ─Both decisions are now on appeal to the U.S. Court of Appeals for the Third Circuit. ─Opening and response briefs have been filed ─Reply briefs due Tuesday, September 13

Balch & Bingham LLP 35 Thank you! Steven Burns (205)