# Petition for Writ of Certiorari — Bersani v. United States Environmental Protection Agency > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0511%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1989 - **Citation:** 489 U.S. 1089 ## Text IN THE ; —— Supreme Court of the Anited States OCTOBER TERM, 1988 JOHN A. BERSANI, NEWPORT GALLERIA GROUP, ROBERT J. CONGEL and the PYRAMID COMPANIES, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Gary H. Baise Counsel of Record Albert J. Beveridge, III Virginia S. Albrecht David M. Friedland BEVERIDGE & DIAMOND, P.C. 1333 New Hampshire Ave., N.W. Washington, D.C. 20036 (202) 828-0200 Attorneys for Petitioners. PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203 QUESTION PRESENTED Section 404 of the Clean Water Act and its regu- lations allow the Army Corps of Engineers to issue permits for dredge and fill activities in wetlands where no practicable alternative site “is available.’’ In this case, the Corps issued a permit, finding that no al- ternative site was available at the time of permit re- view. EPA vetoed the permit on the ground that an alternative was available to the applicant when it “entered the market.” The question for this Court is whether the Second Circuit erred in upholding EPA’s “market entry”’ the- ory of practicable alternatives where the theory pro- vides no standard to guide the regulated community, is inconsistent with the purpose of the Act and the language of the regulations, overrides determinations of state and local officials, and contradicts the settled practice of the Corps of Engineers? LIST OF PARTIES AND RULE 28.1 LIST The parties to the proceedings below were the Petitioners, John A. Bersani, Newport Galleria Group, Robert J. Congel and the Pyramid Companies, and the Respondents, United States Environmental! Pro- tection Agency, United States Army Corps of Engi- neers, Lee Thomas, in his official capacity as Administrator of the United States Environmental Protection Agency, Richard K. Dawson, in his official capacity as Assistant Secretary for Civil Works, United States Army, and Jennifer Joy Wilson, in her official capacity as Assistant Administrator for Ex- ternal Affairs, United States Environmental] Protec- tion Agency. Joseph Robichaud and Citizens in Support of At- tleboro Mall intervened on behalf of Petitioners in the court below. Sierra Club, Environmental Defense Fund, National Wildlife Federation, National Audubon Society, Conservation Law Foundation of New Eng- land, Inc., Massachusetts Audubon Society, Citizens for Responsible Environmental Management, Massa- chusetts Society for Conservation Professionals, Au- dubon Society of Rhode Island, Rhode Island Association of Conservation Commissioners and Nat- ural Resources Defense Council intervened on behalf of Respondents in the courts below. The caption of the Second Circuit’s opinion is in- correct because it lists Intervenors Robichard and Cit- izens in Support of Attleboro Mall and the Homebuilding Association of Massachusetts as parties adverse to Petitioners, when, in fact, these parties intervened on behalf of Petitioners. The Homebuilding Association of Massachusetts did not appeal the dis- trict court’s decision. Petitioners have correctly cap- tioned the case, John A. Bersani, Newport Galleria Group, Robert J. Congel and the Pyramid Companies v. United States Environmental Protection Agency, et al., for this Petition for Certiorari. Pursuant to Rule 28.1 of the Supreme Court Rules, Petitioners Newport Galleria Group and the Pyramid Companies submit the following information: Petitioner Newport Galleria Group is a gen- eral partnership, none of whose partners is a corporation. Pyramid Companies is an as- sociation of related partnerships, none of whose partners is a corporation. iv TABLE OF CONTENTS Page QUESTION PRESENTED. .0...2..:0:.ccccccccscsscsscccsscssssssceeees i LIST OF PARTIES AND RULE 28.1 LIST ................. ii I OE IIIS sins innienennensiinntiscinsaeiansnaiine iv ET [i SURED - cccosccénnvutansiacnsasenssadnsednotesdens vi IIIT MIIIUIET sichnecpicnsanindisenhptenenasodennnanciintionnadsion 1 III llc snatintnsen adscasatinnsabeninapnedinnlibliatneniiininsocie 2 STATUTES AND REGULATIONS INVOLVED ........... 2 BE ATEEIICE OF TEER CAGE ccccscrccccessscccscccscccosssesccces 2 i SEIN ecseasdncinnindsctsdiiniunaadmineninnameiene 2 B. The Statutory And Regulatory Frame- CE eeieenistiaatnnectintinnsecnitnditeaheitiniennesnns 4 C. Pyramid’s Project And The Site ............ 6 oe 7 1. State and Local Permit Proceedings and Approval of Massachusetts Supreme Judicial Court ..................... 7 2. Corps Regulatory Proceedings .......... 7 3. EPA Regulatory Proceedings ............ 8 4. District Court Opinion ...................00 9 5. Second Circuit Opinion ................c0 9 REASONS FOR GRANTING THE WRIT ..................... 10 I. THE PETITION FOR CERTIORARI SHOULD BE GRANTED BECAUSE THE MARKET ENTRY THEORY PROVIDES NO STANDARDS AGAINST WHICH THE REGULATED COMMUNITY CAN MEAS- CORR Oee GHUPUPEPTADT © sinicenicciscnsenapinticiasnctnone 13 A. The Point Of Market Entry Remains i ee 13 B. The Market Entry Theory Is Unworkable eee, § | Be 15 Il. THE PETITION FOR CERTIORARI SHOULD BE GRANTED BECAUSE THE MARKET ENTRY THEORY IS CON- TRARY TO THE STATUTORY AND REG- CL sAUIESE GPUMEEEEEEED ‘cthsertinecscadossennscannsnccants 18 A. The Market Entry Theory Is Inconsistent With The Purpose of Section 404 ......... 18 B. The Market Entry Theory Is Contrary To The Language Of The Section 404(b\1) GID | Kiciciintacstadiatdnaddtanmndsapenntiaisdnsiss 25 C. The Second Circuit Decision Distorts The Regulatory Scheme By Allowing EPA To Ignore Its Burden Of Proof Under Sec- GRUUE SINE cntstetninseosossocsnnussaasbennbtasastiacents 27 CORT ATI ancscspscnssenennnnssencensencesscveninntintninennidinanitionate 28 TABLE OF AUTHORITIES CASES: Page Atchison, Topeka & Santa Fe Railway v. Wichita Board of Trade, 412 U.S. 800 (1973) .............. 15 Bersani v. EPA, 674 F. Supp. 405 (N.D.N.Y. QOD cccrsccestscvconestasnstecnniocnnssnieseinainiuennnensteneciecs 2.9 Bersani v. Robichaud, 850 F.2d 36 (2d Cir. ROD cccoceccnncnstazecnectonecinesnsenismiecacinenians passim Bethlehem Steel Corporation v. EPA, 723 F.2d 1303 QO Se nae 24 Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837 RR eee 10 Citizens for Responsible Environmental Manage- ment v. Attleboro Mall, Inc., 400 Mass. 658, B12 NIE.Be GER CAGED ccccecccssesccesscsssccessnssessese: 7 Commonwealth of Pennsylvania v. Union Gas Co., 832 F.2d 1 (3d Cir. 1987), cert. granted, __.U.S. —_, 108 S.Ct. 1219 (1988) ............... 10 Environmental Defense Fund, Inc. v. Ruckelshaus, 439 F.2d 584 (D.C. Cir. 1971) ..............cccc0ese 15 Friends of the Earth v. Hintz, 800 F.2d 822 (9th Che. BIRD ccencesccnsstenvensphcnnibassonmenuieuinsianteionsonees 27 General Electric Co. v. Gilbert, 429 U.S. 125 CRIED cecerscnseststesnesseerserecuenennmamaennes 29 Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, __U.S. ~~, 108 S. Ct. 376 CRB TD cccoccsccsscavsssssniosssssscsusnescnensanssuecscssemnstensens 26 Hough v. Marsh, 557 F. Supp. 74 (D. Mass. ROBY cccrncscnecsnsevsssesencenensssesnssetsunmuessnssnnmmenssadvenss 27 Industrial Union Department v. American Petro- leum Institute, 448 U.S. 607 (1980) ................ 28 Mall Properties, Inc. v. Marsh, 672 F. Supp. 561 (D. Mass. 1987), appeal denied, 841 F.2d 440 (1st Cir. 1988), cert. denied sub nom. New Ha- ven v. Marsh, __U.S. _—, 109 S.Ct. 128 (2BGED .ccersscssincisintsnaniadiabiienindgaaaaaien 21 vil Table of Authorities Continued Page Monongahela Power Co. v. Marsh, 809 F.2d 41 (D.C. Cir. 1987), cert. denied, __U.S. __, 108 S.Ct. ee eerie aietehteenainnitithdipeadieeceateintceecnteetliiees 22,23 Morton v. Ruiz, 415 U.S. 199 (1974) .0.........00000..... 18 Natvonal Association of if Greeting Card Publishers v. U.S. Postal Service, 462 U.S. 810 (1983) ....... 29 National Audubon Society v. Hartz Mountain De- velopment Corp., 14 Envtl. L. Rep. 20724 (Envtl. L. Inst.) (D.N.J. Oct. 24, 1983) .......... 26 South Terminal Corp. v. EPA, 504 F.2d 646 (1st Ne I lie rece t e 18 Steadman v. SEC, 450 U.S. 91 (1981) ........000000..... 28 Tull v. United States, __U.S. —, 107 S.Ct. 1831 TUTE? aidiciddendiestaltiidbaaitnepacdidacnaithenniteadaiiiaanitaiaaietnitinstnactiais 10 United Scenic Artists Local 829 v. NLRB, 762 F.2d I I a i 28 United States v. Riverside Bayview Homes, Inc., 474 tials 10,23 FEDERAL STATUTES: Administrative Procedure Act eR a ee 18 RE Se re 2 Federal Water Pollution Control Act Section 301, 38 U.S.C. § 13111 ............................ 4 Section 408, 38 U.S.C. § 1348 ........................... 19,20 Section 404, 33 U.S.C. § 1344 ......................00. passim FEDERAL REGULATIONS ee eT seiceesienaeiiiiaimiiinian 5 A 4 OU ira i 5 ee eae 18 eee ef 0 RE, viii Table of Authorities Continued Page 40 C.FR. § ZOOM) rcccccccccccccccccccccccccccscccssscosessooes 16 44 Fed. Reg. 58,076 (October 9, 1979) ...........00+ 6 45 Fed. Reg. 85,336 (December 24, 1980) ....... 6,19,27,28 LEGISLATIVE HISTORY S. 2770, and debate on same, 92d Cong. Ist Sess. CRT ED ccnecaninicssnnssntnincsnstesiotesnntenssnnmstateneasensnonnsss 24 S. Conf. Rep. No. 1236, 92d Cong., 2d Sess. COTE ‘snccendsatabbinndnctotnssniostintinninbéonesiscusianesnineaiouse 23 Senate Consideration of the Conference Report ERIRTIID sccenecncenspovecinsnennnscehinpanvsssonsanensentonntatutssiness 24 H.R. 11896, 92d Cong., 2d Sess. (1971) ................ 24 MISCELLANEOUS: EPA Final Determination of the Assistant Administrator for External Affairs (May 13, BOBS) nccaccccccccccnccccssccesccossssscccsnsassssescsscoesssocssooees passim The Conservation Foundation, Protecting America’s Wetlands: An Action Agenda, the Final Report of the National Wetlands Policy Forum CRIIEED . cccsiunnsuntnssnnennnianssinipinsanignanenniiniscmensagemsens 16 United States General Accounting Office, WET- LANDS, The Corps Of Engineers’ Administra- tion Of The Section 404 Program, Report to the Chairman, Subcomm. on Investigations and Oversight, Comm. on Public Works and Transportation, House of Representatives (Washington, D.C.: GAO/RCED-88-110, July, RITE ccasndnincicstudedasnesaibisenisusisataninisintanhanniiamnenbess 4 IN THE Supreme Court of the United States OCTOBER TERM, 1988 No. JOHN A. BERSANI, NEWPORT GALLERIA GROUP, ROBERT J. CONGEL and the PYRAMID COMPANIES, Petitioners, Ve UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Petitioners John A. Bersani, Newport Galleria Group, Robert J. Congel and the Pyramid Companies respectfully pray that a writ of certiorari issue to review the judgment and opinion of the United States Court of Appeals for the Second Circuit, entered in this proceeding on June 8, 1988, rehearing and suggestion for rehearing en banc denied, September 2, 1988. OPINIONS BELOW The opinion of the United States Court of Appeals for the Second Circuit, with the dissenting opinion of Judge Pratt, (App. A), is reported at 850 F.2d 36 (2d Cir. 1988). The Order of the United States Court of Appeals for the Second Circuit, denying Petitioners’ Petition for a Re- hearing and Suggestion for Rehearing En Banc, (App. D), dated September 2, 1988, is not reported. The opinion of the United States District Court for the Northern District of New York, (App. B), is reported at 674 F. Supp. 405 (N.D.N.Y. 1987). The Final Determination of the Assistant Administrator for External Affairs, United States Envi- ronmental Protection Agency, Concerning the Sweedens Swamp Site in Attleboro, Massachusetts Pursuant to Sec- tion 404(c) of the Clean Water Act (‘Final Determina- tion”), (App. C), dated May 13, 1986, is not reported. JURISDICTION The Petitioners brought suit in the United States Dis- trict Court for the Northern District of New York, invok- ing federal jurisdiction pursuant to 28 U.S.C. § 1331 and the Administrative Procedure Act, 5 U.S.C. § 702. The Second Circuit denied Petitioners’ petition for rehearing on September 2, 1988. Jurisdiction is conferred on this Court by 28 U.S.C. § 1254(1). STATUTES AND REGULATIONS INVOLVED The relevant statutory provision, Section 404 of the Clean Water Act (“the Act’’), 33 U.S.C. § 1344, is repro- duced in the Appendix (App. E), as is the key regulatory provision, 40 C.F.R. § 230.10(a), (App. F). STATEMENT OF THE CASE A. Introduction This case presents an issue that is critical to the admin- istration of a permit program jointly administered by the United States Army Corps of Engineers (the “‘Corps’’) and the United States Environmental Protection Agency (“EPA” or the ““Agency”), under Section 404 of the Clean Water Act (“CWA” or “the Act’’). Section 404(a) of the Act authorizes the Corps to issue permits for the discharge of dredged or fill material into the Nation’s waters if the proposed project satisfies regulations promulgated by EPA and the Corps pursuant to Section 404(b). Under the Sec- tion 404(b) regulations, no permit will be issued if a prac- ticable alternative site “‘is available’ to the applicant. Section 404(c) authorizes EPA to veto a Corps-issued per- mit to protect certain environmental interests. In this case, the Corps found that no alternatives were available to the Petitioner at the time of permit review and decided to issue a permit. EPA determined, however, in a departure from settled administrative practice, that availability of alternatives should be judged as of the time the applicant “entered the market” and, applying that the- ory, vetoed the applicant’s project. As Judge Pratt observed in dissent below, the market entry theory “‘approaches a sensitive environmental prob- lem through a time warp, it ignores the statute’s basic purpose, and it creates unfair and anomalous results.”’ 850 F.2d at 48; App. A 25a. In addition, the theory establishes a standardless inquiry that virtually invites arbitrary and unequal application. It makes no sense in the real world of land use planning, financing and development, and it severely erodes the abil- ity of public facilities planners, state and local land use planners and private investors to make reasoned judg- ments in carrying out their responsibilities. Moreover, the theory contradicts the practice and un- derstanding of the Corps, which, as the permitting au- thority under the Act, is the agency most intimately involved in administering the relevant regulations. It is also contrary to the language of the regulations and to EPA’s own previous interpretation of those regulations. If left uncorrected, the Second Circuit’s adoption of EPA’s ‘market entry’ theory as the only correct understanding of the regulations will throw what had previously been settled administrative practice of permit review into a state of irremediable confusion. B. The Statutory And Regulatory Framework The Clean Water Act prohibits the discharge of any pollutant, including dredged or fill materials, into the Na- tion’s waters, including wetlands, except in compliance with the Act. CWA § 301(a), 33 U.S.C. § 1311(a). Section 404 is an exception to the Act’s general prohibitions. It es- tablishes a permit program under which the Corps may authorize discharges of dredged and fill materials in cer- tain circumstances. CWA § 404, 33 U.S.C. § 1844. The program regulates a vast array of activities, ranging from the construction of a tennis court in a homeowner’s back- yard to construction of new residential subdivisions, office parks, and shopping malls to large public construction proj- ects involving, for example, highways, port improvements, public marinas, parks, public housing, schools and colleges. The Corps administers the program and reviews approx- imately 14,000 individual permit applications every year.’ Thousands of other projects are regulated by general per- mits issued in accordance with Section 404(e). 33 U.S.C. § 1344(e); 33 C.F.R. Part 330. Although EPA has authority to issue permits under other sections of the Act, Congress made the Corps the permitting authority under Section 404, in recognition of the Corps’ special expertise in this area. 33 U.S.C. § 1344(a); App. E 1lla. Section 404(b) provides that the Corps must base its permit decision on guidelines (the ‘ United States General Accounting Office, WETLANDS, The Corps Of Engineers’ Administration Of The Section 404 Program, Report to the Chairman, Subcomm. on Investigations and Oversight, Comm. on Public Works and Transportation, House of Representatives 11 (Wash- ington, D.C.: GAO/RCED-88-110, July, 1988) (In 1986, the Corps issued approximately 10,500 permits and denied an estimated 500 applications; 3,000 applications for permits were cancelled or withdrawn). “‘404(bX1) guidelines’) developed by EPA in conjunction with the Corps. 33 U.S.C. § 1344(b); App. E 1lla. These guidelines require the Corps to consider a comprehensive range of environmental, scientific, and economic factors in making its permitting decisions. 40 C.F.R. Part 230. In addition, the Corps applies a wide-ranging “‘public interest review” under regulations that were already in effect at the time the Clean Water Act was passed.’ Of particular importance here, the Corps may not issue a permit if there is a “practicable alternative” available to the applicant that ‘would have less adverse impact on the aquatic ecosystem.” 40 C.F.R. § 230.10(a); App. F 113a-114a. An alternative is “practicable” if it is available to, or can reasonably be obtained by, the applicant and will fulfill the applicant’s project purpose. 40 C.F.R. § 230.10(aX2); App. F 113a. With respect to ‘‘non-water- dependent activities’ proposed for wetlands (i.e., activities that could be accomplished on non-wetland sites, such as construction of a shopping mall), practicable alternatives are “presumed to be available” unless the applicant clearly demonstrates otherwise. 40 C.F.R. § 230.10(aX3); App. F 113a-114a. Finally, Section 404(c) of the Act authorizes EPA to overrule a Corps decision to grant a permit and so to prohibit the use of a specific area as a discharge site for dredged or fill material whenever EPA “determines ... that the [proposed] discharge . . . will have an unacceptable adverse effect” on one of five specifically enumerated en- vironmental interests. 33 U.S.C. § 1344(c); App. E 1lla- ?In this review, the Corps balances the “national concern for both protection and utilization of important resources,”’ considering a wide range of factors such as “conservation, economics, aesthetics, general environmental concerns, wetlands ... and, in general, the needs and welfare of the people.”’ 33 C.F.R. § 320.4. sceeiceietiiiiaatamaamiaaiiaineaiaitaailiaiiititiliiiiiaaiaaie 112a. In exercising this authority, EPA has the burden of proving that an “unacceptable adverse effect’’ will occur.® In this case, Pyramid sought to fill a wetland and in an approximately 18-month period obtained all the nec- essary permits from the local government and the State of Massachusetts, including approval under the Massachu- setts Wetlands Protection Act, and from the Corps pur- suant to Section 404(a) and (b). In approving the project, the Corps specifically found that no practicable alternatives were available to Pyramid. EPA, however, overrode the Corps’ decision, vetoing the permit on the ground that a site optioned by a competing shopping center developer three months before Pyramid began searching for sites in the Attleboro, Massachusetts area “‘is available’ to Pyr- amid within the meaning of the guidelines. C. Pyramid’s Project And The Site Pyramid is a large shopping center developer in the Northeast. It began searching actively for suitable sites in the Attleboro, Massachusetts area in September 1983. JA 225, JA 291.4 Pyramid purchased an 82-acre site (‘South Attleboro”) from the Edward J. DeBartolo Corporation (‘‘DeBartolo’’), another shopping center developer, in De- cember 1983, and proposed to build a two-level shopping mall. App. C 95a. The site contains 49.6 acres of red maple swamp. Pyramid has a competitor in the vicinity, New England Development Company (““NED”’’). On July 1, 1983, before Pyramid began looking for sites in the area, NED had *45 Fed. Reg. 85,336, 85,338 (December 24, 1980); 44 Fed. Reg. 58,076, 58,080 (October 9, 1979). ‘ References to the Joint Appendix filed in the court below are as follows: “JA ..”” References to documents in the Administrative Record which are not included in the Joint Appendix are as follows: “AR, _._..” References to the Appendix filed with this Petition are as follows: “App. A —,” and so forth. acquired a two-year option on another shopping center site (“North Attleboro’’). Id. D. Proceedings To Date 1. State and Local Permit Proceedings and Approval of Massachusetts Supreme Judicial Court After acquiring its site in December 1983, Pyramid ap- plied for and obtained all necessary state and local ap- provals.© Among other things, Pyramid obtained a state wetlands permit for the project pursuant to the Massa- chusetts Wetlands Protection Act, and the Massachusetts Supreme Judicial Court upheld the permit. Citizens for Responsible Environmental Management v. Attleboro Mall, Inc., 400 Mass. 658, 511 N.E.2d 562 (1987). 2. Corps Regulatory Proceedings Pyramid applied to the New England regional office of the Corps (‘“‘“NE Corps’’) for an individual permit in July 1984. The application stated that North Attleboro was “unavailable.”” AR, B-2 11. Because the NE Corps was unable to resolve certain policy issues not relevant to this Petition, the Corps’ Director of Civil Works ordered the case to be elevated to Corps headquarters. The Director of Civil Works determined that the project satisfied the 404(bX1) guidelines and the Corps’ public in- terest review regulations, and directed the local office to issue a permit. On the key issue of availability of alter- natives, the Director agreed with the NE Corps and found * The land was rezoned for development as a shopping center, and the Massachusetts Department of Public Works approved all necessary roadway modifications. State water quality certification was issued in March 1985, pursuant to Section 401 of the Clean Water Act, 33 U.S.C. § 1341. In accordance with the Massachusetts Environmental Policy Act, an Environmental Impact Report was prepared and approved by the Commonwealth’s Office of Environmental Affairs. AR, B-4. The Mayor, City Council, City Planner, and the City’s economic development agency all support the project. JA 89. ata erin that North Attleboro was not available “because it has been optioned by another mall developer.” JA 83. On June 28, 1985, the NE Corps formally notified the regional of- fices of EPA and the United States Fish and Wildlife Service that it intended to issue a permit to Pyramid. AR, B-16. 3. EPA Regulatory Proceedings In July 1985, EPA’s Regional Administrator notified the Corps and Pyramid that he intended to initiate veto pro- ceedings under Section 404(c). AR, B-I8. On March 4, 1986, the Regional Administrator recommended to EPA head- quarters that Pyramid’s project be prohibited, urging a legal rationale that headquarters would later reject. JA 119-196. EPA’s Assistant Administrator for External Af- fairs (‘Assistant Administrator’’) issued a Final Determi- nation on May 13, 1986, prohibiting the project because it would have avoidable, and, therefore, “‘unacceptable,”’ ad- verse effects on wildlife. App. C 108a. In reaching this conclusion, the Assistant Administrator first found that of the environmental interests protected by Section 404(c), only wildlife would be adversely affected. Id. at 82a. She then examined whether the adverse effect was unacceptable “‘by reviewing whether there are prac- ticable, less environmentally damaging alternatives” to the South Attleboro site. Jd. at 83a. Turning to “‘practicable alternatives,”’ the Assistant Ad- ministrator rejected the longstanding Corps understanding that the availability of alternatives is considered at the time of permit review. Instead, she changed the rules of the game and determined that availability should be tested as of the time the applicant ‘‘entered the market.” Jd. at 95a. She did not, however, define what constitutes ‘‘mar- ket entry.” This theory had never been advanced or sug- gested, either by the Corps or EPA, before this proceeding. Pyramid had begun its investigation of the trade area in September 1983, approximately eight weeks after its competitor NED had optioned the North Attleboro site. The Assistant Administrator, however, applying the ret- roactive market entry theory, relied on alleged “trade cus- tom’”’ to find that Pyramid must have “entered the market” before the date on which NED had optioned North Attle- boro. Jd. at 95a n.15. Then, ignoring the fact that EPA’s own regulations place the burden in a 404(c) proceeding on the Agency, the Assistant Administrator concluded that “{ojn this record, I cannot find that Pyramid has met its burden of showing that the North Attleborough [sic] site was unavailable.” Jd. at 95a-96a. Since, according to this novel analysis, the North Attleboro site was “available’’ to Pyramid when it entered the market, the Assistant Administrator concluded that any adverse effects resulting from Pyramid’s project were ‘avoidable’ and therefore “unacceptable.” Jd. at 108a. She therefore vetoed the per- mit. 4. District Court Opinion The district court upheld EPA’s Final Determination. Although the court rejected the Agency’s “trade custom” inference, it deferred to EPA’s interpretation of the reg- ulation, holding that its “carefully circumscribed” function was to “uphold a reasonable [EPA] interpretation, even if the court would not have reached the same conclusion in 2 first instance.” 674 F. Supp. at 412; App. B 45a. 5. Second Circuit Opinion The Second Circuit affirmed, with one judge dissenting. 850 F.2d at 43; App. A 5a. While it was uncertain whether EPA’s interpretation merited deference, the court ruled that the “‘market entry’’ theory was the only reasonable interpretation of the regulations. 850 F.2d at 44; App. A 17a. Rejecting Pyramid’s argument that “market entry” was little more than a standardless evasion, the court ob- served that there was no need to “‘pin down the standard,”’ for to do so would only “‘confuse things further.’’ 850 F.2d at 45; App. A 22a. | 10 Judge Pratt dissented on the ground that the market entry theory improperly focuses on the decision-making techniques and tactics of a developer at the time it entered the market, rather than the actual alternatives to devel- opment in wetlands, which is Section 404’s central pur- pose. 850 F.2d at 48; App. A 25a. The proper time to analyze the availability of alternatives, Judge Pratt found, is as of the time EPA makes its 404(c) decision, a position that is “reinforced by the present-tense language of the regulation, which commands EPA to determine whether an alternate site ‘is available.’ ”” 850 F.2d at 49; App. A 29a. REASONS FOR GRANTING THE WRIT This case raises important issues of statutory and reg- ulatory construction in the administration of the Clean Water Act.* The Corps evaluates approximately 14,000 in- dividual applications for Section 404 permits per year. The cornerstone of the Corps’ Section 404 analysis is its thresh- old determination whether there is a practicable alternative site for the proposed project. Until the decision in this case, the Corps and EPA had always evaluated the avail- ability of alternatives as of the time of permit review. *This Court has granted certiorari in other cases to review similar issues. See, e.g., Commonwealth of Pennsylvania v. Union Gas Company, 832 F.2d 1343 (3d Cir. 1987), cert. granted, __._ U.S. —_., 108 S. Ct. 1219 (1988) (Certiorari granted to determine whether private parties may sue states in federal court to recover cleanup costs under the Superfund law); Tull v. United States, __U.S. ——, 107 S.Ct. 1831, 1835 (1987) (Certiorari granted to determine whether a jury trial is required to determine liability and assess penalties for violation of Sec- tion 404 of the Clean Water Act); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 126 (1985) (Certiorari granted to review validity of Corps’ regulations defining ‘‘adjacent wetlands” as “waters of the United States” under the Clean Water Act); Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (Certiorari granted to review validity of EPA’s “bubble” concept under the Clean Air Act). 1] In this case, the Second Circuit ignored this settled ad- ministrative practice and endorsed EPA’s novel ‘market entry’’ theory of practicable alternatives, which the Agency had announced for the first time in this proceeding. But EPA’s “market entry” theory provides no standard against which the regulated community can measure its conduct, no guidance for future regulatory decisions, and no stand- ard against which a reviewing court can assess adminis- trative decisions. Indeed, EPA appears to take the position that it can review the availability of alternatives as of any time it sees fit in each particular case. The Second Circuit has compounded the harm caused by EPA’s erroneous rul- ing by holding that the “market entry” theory is the only correct interpretation of the regulation. What may have been only an unfair, ad hoc ruling against Pyramid by EPA has thus been converted into precedent binding on EPA and, apparently, the Corps in the Second Circuit. But the Corps disagrees with the “market entry” theory. Unless the decision is reversed, the result will be to throw the administration of the Section 404 program into a state of unparalleled confusion and uncertainty. Moreover, the market entry standard imposes an op- pressive and unworkable burden on private and public per- mit applicants. Since the applicant has the burden of demonstrating the absence of alternatives during the per- mitting stage (as opposed to the 404(c) veto stage) and since the court below declined to define what acts con- stitute market entry, no applicant will ever be able to satisfy the market entry “‘standard.”’ Indeed, private investors are constantly searching for attractive investment opportunities; they are never not in the market. The impact on public capital facilities planning can also be devastating. Consider, for example, a state highway authority that assembles parcels of land over a period of years to build a new road. Does the state high- way authority enter the market when it first identifies the a 12 need for a new road, or when it first selects a route, or when it purchases the first parcel? Finally, the market entry theory is contrary to the plain language of the regulations and inconsistent with the in- tent of the Clean Water Act to protect the Nation’s water resources, including wetlands. To accomplish this purpose, Congress mandated an inquiry into the wetland resource. Until the decision in this case, the Corps and EPA had always properly interpreted the statute as requiring a prac- ticable alternatives analysis which focused on the wetland resource: before the Corps could issue a permit, it had to determine that there was no other available site whose development would cause less environmental damage. The “market entry” theory shifts the focus away from the land, making the protection afforded the wetland depend- ent on the owner’s business practices and the date the owner is deemed to have entered the market. This inquiry loses sight of the real purpose of the Clean Water Act. In addition, the market entry theory subtly undercuts Congress’ purpose in creating the Section 404 permitting program within the Clean Water Act. That permitting pro- gram reflects Congress’ recognition that environmental protection must accommodate reasonable economic devel- opment. In order to balance these conflicting goals, Con- gress built the practicable alternatives analysis into the Section 404 permitting decision. The Second Circuit de- cision will destroy that balance by giving EPA discretion to shift the timing of the alternatives analysis with each new case, and will encourage ad hoc decision making. EPA will always have grounds to veto a permit if it so chooses. Unless reversed by this Court, the Second Circuit's opin- ion will allow federal officials absolute discretion to deny permits based on case-by-case determinations of the point of “market entry,” regardless of other priorities contem- plated by Congress or by local and state planning and environmental authorities. Congress did not contemplate a 13 giving EPA this kind of authority when it enacted Section 404. I. THE PETITION FOR CERTIORARI SHOULD BE GRANTED BECAUSE THE MARKET ENTRY THEORY PROVIDES NO STANDARDS AGAINST WHICH THE REGULATED COMMUNITY CAN MEASURE ITS CON- DUCT A. The Point Of Market Entry Remains Wholly Undefined The “market entry”’ theory endorsed by the Second Cir- cuit is virtually meaningless, providing no guidance to the regulated community of the standard to which it will be held. The Second Circuit acknowledges that the Section 404(bX1) regulations are written in the present tense, on their face mandating an inquiry into whether an alterna- tive “is available’ to the applicant at the time the permit is reviewed. 850 F.2d at 43; App. A l6a. Yet the court ignores the regulatory language and Congressional intent and asserts that EPA’s retrospective inquiry into possible alternatives at the time of “market entry” is the only possible interpretation of the regulatory term “‘is avail- able.” 850 F.2d at 44; App. A 17a. Moreover, the court compounds its error by ruling that it “is unnecessary to pin down the [market entry] standard . . . and that it would confuse things further to attempt to do so.” 850 F.2d at 46; App. A 22a. But confusion is precisely what this opin- ion has sown. EPA has consistently refused to define “market entry.” In the Final Determination, EPA’s Assistant Administra- tor referred to “‘market entry” alternatively as the “period when the developer is selecting a site for its project,” App. C 93a, “‘follow[ing] the market area,” id. at 95a n.15, “exploring the ... trade area,” id. at 95a, or “searchfing] for alternative sites.’ Jd. at 94a.’ In its district court briefs, ‘The Agency seemed to recognize that it was on difficult ground, ! 14 the government “defined” market entry as ‘‘the time of project planning,”’ Defendants’ District Court Brief at 24, “the time Pyramid began investigating the market,’’ id. at 59, “searchfed] for a site,”’ id., “‘select[ed] the site,” id. at 60, or “‘made its business decisions,” id. at 66. On appeal, EPA once again refused to specify the point in time at which the availability inquiry begins. Instead, it claimed the need to “reserve judgment” on this decisive question, Brief of Appellees at 32 n.20, stating opaquely that the market entry theory “‘... tak[es] account of the temporal continuum in which a wetland site-selection plan evolves.”” Jd. at 28. As to which of numerous possible events would “trigger the application of the ‘is available’ test,"” EPA commented blithely: The plain answer is that while no one of these points may be definitive, each may be germaine [sic], individually and collectively. Id. at 34 n.21 (emphasis in original). EPA's equivocation is intolerable in light of the central role the alternatives analysis plays in the regulatory frame- work. An applicant simply cannot rebut the presumption that an alternative is available if EPA is allowed to shift the target date with each case. The Second Circuit’s opinion suffers from the same flaw. Though the court held that the “market entry” theory is the only correct interpretation of the regulations, it too declined to define the term either in the abstract or as for, after announcing the new theory, the Assistant Administrator stated, “I need not, and do not, decide here what the relevant time period would be in other circumstances... .’’ App. C 93a n.14. Were this true, the issue might not warrant this Court’s review. However, given the Second Circuit’s declaration that “market entry” is the only possible standard, and the Corps’ contrary practice, review is critical to clarify this murky area of regulatory practice. 15 applied to this litigant in this case.* The point of market entry is left wholly undefined, with the result that the Second Circuit’s opinior fails to provide guidance for fu- ture conduct by permit applicants and future decisions by the Corps and EPA. The potential for chaos in the administration of the Sec- tion 404 program is compounded because the Corps does not agree with EPA’s “market entry” concept. Thus, ap- plicants for permits will not know what presumption it is they will be required to rebut. And if it is the ‘“‘market entry” presumption, they will not know how to rebut it because the term is undefined and undefinable. B. The Market Entry Theory Is Unworkable As A Practical Matter Moreover, as a practical matter, governmental public facilities agencies planning to build schools, hospitals, and airports; land use planners attempting to establish a com- patible mix of land uses within their jurisdictions; and private sector parties such as land developers, home build- ers and industrial companies are constantly evaluating the market for land use and development opportunities. They are always in the market, and therefore, in the context of their operations, ‘“‘market entry” is a meaningless con- cept. As Judge Pratt, in dissent, observed: ‘‘Without an- * The uncertainty resulting from the Second Circuit’s ruling stems in part from its refusal to undertake the kind of judicial review required in challenges to administrative action. As the District of Columbia Cir- cuit has observed: Judicial review must operate to ensure that the administrative process itself will confine and contro] the exercise of discretion. Courts should require administrative officers to articulate the standards and principles that govern their discretionary decisions in as much detail as possible. Environmental Defense Fund v. Ruckelshaus, 439 F.2d 584, 598 (D.C. Cir. 1971); see also Atchison, Topeka & Santa Fe Railway v. Board of Trade, 412 U.S. 800, 806-07 (1973). nT 16 swers to these questions [about the meaning of market entry] a developer can never know whether to proceed through the expense of contracts, zoning proceedings, and EPA applications.” 850 F.2d at 49; App. A 27a. The uncertainty is compounded by the difficulty in iden- tifying wetlands and the possibility that a landowner may be unaware that his property is a wetland. EPA’s own regulations note that one needs a “‘specialist’’ to determine wetland boundaries, 40 C.F.R. 230.41(aX2). The recent re- port of the National Wetlands Policy Forum (convened by the Conservation Foundation at the request of EPA) con- firms the problem: Determining whether a particular piece of property is a wetland can sometimes be difficult. To an untrained person, for instance, some for- ested wetlands may appear very similar to nearby upland forests. An expert in vegetation, soil, and water conditions may be needed to tell the dif- ference. For this reason, a landowner may not even realize that a piece of land qualifies as a wetland and is therefore subject to regulation.° Notwithstanding these difficulties, the “market entry” the- ory requires an applicant to survey the market long before it may be aware that its site is even a wetland covered by the Act. If it proceeds with construction unaware that the site is a wetland, it will be impossible for an applicant, for example, a commercial home builder, to show that it had considered alternatives when it entered the market years earlier. See Amici Petition for Certiorari of National As- sociation of Home Builders et al. Other practical difficulties with the ‘“‘market entry’’ the- ory depend on the nature of the permit applicant, its pro)- *The Conservation Foundation, Protecting America’s Wetlands: An Action Agenda, The Final Report of the National Wetlands Policy Forum 36 (1988). 17 ect and its site. Many such problems are elaborated by amici urging this Court to review the Second Circuit de- cision. For present purposes, a few examples will suffice. Local, state and regional planning efforts will be under- mined. Under the market entry theory, EPA could, for example, claim the authority to deny a municipality’s ap- plication for a permit to construct a resource recovery fa- cility on the ground that the town council did not consider all alternative sites at its first public hearing concerning the facility years earlier. See Amicus Petition for Certiorari of American Planning Association. The theory will be equally damaging to the nation’s port authorities, many of which have owned substantial parcels of wetlands adjacent to waterways for decades. If, for example, a port authority applies for a permit to expand commercial activity in a wetland, then, presumably, under the Second Circuit holding, the Corps would be required to consider alternatives available when the port “entered the market.” It remains an open question whether market entry occurred when the state passed legislation creating the port authority forty years earlier, or when the port purchased the property in question some twenty years ear- lier, or when the port’s consultants first identified the need for additional commercial development five years ago. The uncertainty surrounding the timing of the alternatives analysis will undoubtedly delay or impair the port’s ability to upgrade deteriorating facilities as financial markets may either refuse to finance such projects or exact high pre- miums to compensate for the increased risks. Other public facilities agencies will face similar problems, and the re- quirement that they actually make inquiries about availa- bility, thus virtually advertising their intentions to buy property for roads, schools and the like, will undoubtedly add to the cost of acquiring needed land." ’ Had EPA submitted its ‘“‘market entry”’ theory to formal rulemak- 18 Only this Court can rectify the chaotic situation created by the Second Circuit opinion by requiring the agencies to articulate a standard with sufficient clarity to apprise the regulated community of the standard to which it will be held.” Il. THE PETITION FOR CERTIORARI SHOULD BE GRANTED BECAUSE THE MARKET ENTRY THEORY IS CONTRARY TO THE STATUTORY AND REGULA- TORY SCHEME A. The Market Entry Theory Is Inconsistent With The Pur- pose of Section 404 The Second Circuit has held that the market entry the- ory is the only correct interpretation of the regulations. The court’s only justification for the decision is its asser- tion that the market entry theory is consistent with the objectives of the Clean Water Act, and that the Corps’ and EPA’s prior understanding of the regulation would “thwart” these objectives.'? 850 F.2d 43-44; App. A 16a- ing procedures, as its regulations require, it would have become aware of these practical difficulties. The ‘‘market entry” theory is a modifi- cation to the “basic application’ of the Section 404(b\1) guidelines. Under the guidelines themselves, such modifications may only be ac- complished by notice and comment rulemaking and in conjunction with the Corps. 40 C.F.R. § 230.2(c). In addition, the Administrative Pro- cedure Act, 5 U.S.C. § 552, requires that agency “policies affecting individual rights and obligations be promulgated pursuant to certain stated procedures so as to avoid the inherently arbitrary nature of unpublished ad hoc determinations.”’ Morton v. Ruiz, 415 U.S. 199, 232 (1974). The “‘market entry” theory is such a policy. 1! See South Terminal Corp. v. EPA, 504 F.2d 646, 670 (1st Cir. 1974) (EPA regulation requiring denial of permit for construction of parking spaces unless they ‘‘will not interfere’’ with attaining air quality standards was held impermissibly vague: ‘“‘The prospective applicant for a permit is utterly without guidance as to what he must prove, and how. And the standard is so vague that it invites arbitrary and unequal application’’). 2 The only evidence the court offers in support of its claim that EPA's retrospective analysis is consistent with Congressional intent is 19 17a. The court is wrong. Congress passed the Clean Water Act in 1972 to protect the Nation’s water resources, including wetlands. 33 U.S.C. § 1251. Recognizing the need to accommodate reasonable economic development and other values in the public in- terest, Congress did not ban the “discharge’”’ of all “‘pol- lutants” but set up permitting programs to regulate such discharges. Section 404 established the permitting program that regulates the discharge of dredged and fill materials. 33 U.S.C. § 1344(a); App. E llla. To effectuate the bal- ancing between environmental and other goals, Congress required the regulations governing Section 404 permitting decisions to include consideration of whether the permit applicant could accomplish its purpose at an alternative site that would have less adverse environmental impacts." one line from the preamble to EPA's regulations. According to the court: [T]he preamble to the 404(bX1) guidelines states that the purpose of the ‘practicable alternatives’ analysis is ‘to recognize the special value of wetlands and to avoid their unnecessary destruction, par- ticularly where practicable alternatives were available in non-aquatic areas to achieve the basic purpose of the proposal.’ 45 Fed. Reg. 85,338 (1980) (emphasis added by the court). 850 F.2d at 43-44; App. A 16a. The Agency's preamble is, of course, not evidence of Congressional intent. In addition the phrase the court quotes is out of context. Notwithstanding the court’s emphasis on the past tense “were available,’’ the sentence was written in the past tense because EPA was explaining the meaning of a regulatory test it had once proposed to adopt but since had decided to reject. Quoted in its entirety, the sentence reads: “The original purpose, which many com- menters commended, was to recognize the special values of wetlands and to avoid their unnecessary destruction, particularly when practic- able alternatives were available in non-aquatic areas to achieve the basic purposes of the proposal.’’ 45 Fed. Reg. 85,338-339. 's 33 U.S.C. § 1344(b) (requiring that the governing regulations be based on the ocean discharge criteria contained in Section 403(c), 33 | 20 Thus, Congress commanded an objective inquiry into the impacts on the physical environment that would result from the choice of one site over another. As Judge Pratt pointed out in dissent, the “market en- try” theory strays from the statute’s central purpose. It disregards the environmental impacts on the land in ques- tion and on alternative sites and instead makes the pro- tection afforded the wetland dependent on when the owner “entered the market.’’ Such an inquiry, however, does not protect the wetland: The market entry theory in effect taints a par- ticular developer with respect to a particular site, while ignoring the crucial question of whether the site itself should be preserved. Under the market entry theory, developer A would be denied a per- mit on a specific site because when he entered the market alternatives were available, but la- tecomer developer B, who entered the market after those alternatives had become unavailable, would be entitled to a permit for developing the same site. In such a case, the theory no longer protects the land, but instead becomes a distorted punitive device: it punishes developer A by de- nying him a permit, but grants developer B a permit for the same property—and the only dif- ference between them is when they ‘entered the market.’ 850 F.2d at 48; App. A 26a-27a (Judge Pratt dissenting). Not only does the market entry theory fail to protect the wetland but it leads inevitably to consideration of fac- tors far different from those contemplated by Congress when it mandated consideration of the relative environ- mental impacts resulting from the use of alternative sites. U.S.C. § 1343(c)); 33 U.S.C. § 1343(cX1\F) (requiring consideration of “land based alternatives’’). 21 In this case, for example, EPA demanded copies of private business memoranda, correspondence and other records concerning Pyramid’s relationship with the previous owner of the South Attleboro site, Pyramid’s business plans in other trade areas outside of the Attleboro trade area, cost estimates for various features of Pyramid’s proposed proj- ect, and details of Pyramid’s dealings with real estate agents and potential tenants for its shopping mall.“ JA 267-271. This is not the inquiry into the impacts on the physical environment that Congress contemplated when it established the alternatives analysis. The court suggests that the ‘‘market entry’ theory vin- dicates the Act’s goals because it creates an incentive for ‘The result of this and other similar tangents pursued by EPA is that EPA simply lost sight of the purpose of the alternatives analysis, which is to determine whether. in fact, an alternative “‘is available.”’ Instead, it recast the inquiry to determine whether the applicant had been “truly fastidious” in investigating alternatives. Brief of Appellee at 32 n.20. The bankruptcy of EPA’s position is summed up by a hypothetical it posed: A hypothetical case in which the applicant convincingly demon- strates that when it undertook its market survey an alternative was not obtainable, and only much later became so, might at least in some circumstances possibly call for a different Section 404(c) outcome. Id. As this hypothetical so candidly suggests, EPA’s “‘market entry” theory simply does not protect the wetland resource. It merely punishes or rewards developers based on EPA’s perception of their bona fides. ‘8 See Mall Properties, Inc. v. Marsh, 672 F. Supp. 561, 566-68 (D. Mass. 1987), appeal denied, 841 F.2d 440 (Ist Cir. 1988), cert. denied sub nom. New Haven v. Marsh, __U.S. —_, 109 S.Ct. 128 (1988). (Where Corps’ denial of permit is based on economic factors, such factors must be “proximately related to changes in the physical envi- ronment ... Corps may not... consider effects unrelated to the impact which a proposed project will have on the environment.’’) Because the date of market entry is totally unrelated to the impacts a given project will have on the environment, it is an improper basis for a permit decision under Section 404. 22 developers to search for alternative sites at the time they first consider development.* Such an incentive, however, exists regardless of the timing of the alternatives analysis. No developer would choose a wetland site and risk its costly investment on a hunch that by the time of permit review all uplands sites would no longer be available. In- deed, the applicant’s knowledge that it will be required during permitting to establish the absence of uplands al- ternatives is by itself a substantial incentive to avoid a wetlands site. Not only does the market entry theory lead the Agency far afield of the inquiry Congress contemplated but it sub- tly undermines the integrity of the balance Congress sought to establish through the alternatives analysis. As Judge Pratt pointed out in dissent: Congress designed [Section 404} to preserve the environment consistent with reasonable accom- modation to the economic and social needs of the public; it was not concerned with the identities or past activities of particular developers. 850 F.2d at 48; App. A 26a. Accordingly, Congress established a permit program un- der Section 404(a) which is intended to authorize dis- charges as long as there is compliance with certain requirements.'? Congress contemplated that in making a permitting decision the Corps would balance environmental ‘6 Conversely, the court argues that if alternatives were not available when the developer purchased its site, but became available by the time of permit application, the application would be denied. 850 F.2d at 44; App. A 17a. Pyramid has always agreed with this statement. If a feasible alternative is available at the time of permit review, the ap- plication should be denied. ‘7 Monongahela Power Co. v. Marsh, 809 F.2d 41, 46 (D.C. Cir. 1987), cert. denied, U.S. , 108 S.Ct. 68 (1988) (Section 404(a) estab- lishes an exemption from ‘‘Section 301(a)'s broad ban on discharge of pollutants into navigable waters’’). i 23 protection and economic concerns, and that the Corps could determine under Section 404(b) that economic concerns or other competing values outweighed environmental protec- tion in a particular case.* EPA, on the other hand, was empowered under Section 404(c) to veto the Corps’ deci- sion to grant a permit in the event EPA determined that the proposed project “will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fish- ery areas (including spawning and breeding areas), wildlife, or recreational areas.’’’* Thus, Congress gave discrete roles to the Corps and EPA. It authorized the Corps to make the permitting de- cision based on numerous environmental and economic fac- tors in its public interest review and on the balancing process inherent in the 404(bX1) guidelines’ practicable al- ternatives analysis. Congress gave EPA the power to veto a project based on environmental considerations. In this case, EPA did not rely on its environmental expertise. Rather, it rejected the Corps’ analysis of available alter- natives and economic impacts, and offered its market entry theory instead.” In doing so, the Agency upset the political * “(Where it appears that a wetland covered by the Corps’ definition is in fact lacking in importance to the aquatic environment—or where its importance is outweighed by other values—the Corps may always allow development of the wetland for other uses simply by issuing a permit.” United States v. Riverside Bayview Homes, 474 U.S. 121, 135 n.9 (1985); Monongahela Power Co. v. Marsh, 809 F.2d at 46 (In en- acting Section 404, “Congress insisted upon stringent federal discipline in an effort to curb ecological pollution and degradation without in- terfering unjustifiably with farming, forestry, and other legitimate ac- tivities reserved for regulation primarily by local governments’’). * 33 U.S.C. § 1344(c), App. E 1lla-112a; S. Conf. Rep. 1236, 92d Cong., 2d Sess., at 141 reprinted in 1972 U.S. Code Cong. & Admin. News 3776, 3818-19. * In addition, as discussed more fully in the Petition for Certiorari filed by the Citizens In Support of Attleboro Mall, EPA’s consideration of cumulative impacts in the context of a Section 404(c) action was rs | 24 compromise struck by Congress.”! The Second Circuit opin- ion, by endorsing the market entry theory and giving EPA unlimited authority to shift the time of market entry on an ad hoc basis, effectively vitiates the Congressional com- promise.” Moreover, as Judge Pratt pointed out, the market entry theory may also be easily circumvented: wholly improper. Section 404(c) authorizes the Administrator to prohibit or restrict the use of a “defined area’ when the Administrator “‘de- termines ... that the discharge of ... materials into such area will have an unacceptable adverse effect.’’ 33 U.S.C. § 1344(c); App. E llla-112a. Clearly, the statute contemplates a site-specific inquiry. Thus, the issue in a 404(c) case should be whether the environmental impacts on the “defined area” are so great as to cause an unacceptable adverse effect. EPA, however, ignored the Congressional intent and improperly based its decision on the “cumulative loss” in Massachusetts. App. C 107a. 2: After considering several different administrative arrangements for handling the discharge of dredged and fill materials, each of which proposed a different allocation of permitting authority between the . Corps and EPA, Congress ultimately decided to give the permitting authority to the Corps. In so doing, it expressly carved the Section 404 program out of EPA’s permitting authority under other sections of the Act. It made this choice in recognition of the Corps’ special expertise on dredge and fill matters and long experience in managing related permitting programs under Sections 9 and 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. §§ 401 and 402, and to avoid “‘creat{ing] a burdensome bureaucracy.” S. 2770, 92d Cong., 1st Sess. (1971), re- printed in Senate Committee on Public Works, A Legislative History of the Water Pollution Control Act Amendments of 1972 (“1972 Leg. Hist.”) at 1685-92; Senate Debate on S. 2770, 92d Cong., 1st Sess. (1971), reprinted in 1972 Leg. Hist. at 1386, 1392; H.R. 11896, 92d Cong., 2d Sess. (1971), reprinted in 1972 Leg. Hist. at 1063-64; Senate Consideration of the Conference Report (Oct. 4, 1972), reprinted in 1972 Leg. Hist. at 177. * See Bethlehem Steel Corp. v. EPA, 723 F.2d 1303, 1309 (7th Cir. 1983) (““{W]here a statute strikes a political balance but administration of the statute is entrusted to an agency that may not embody that balance, it is dangerous to defer automatically to the agency’s view. . . The court must enforce the compromise, not the maximum position of one of the interest groups among which the compromise was struck’’). In this case, for example, if a Donald Trump had “entered the market’’ after NED took the option on the North Attleboro site and made it un- available, under EPA’s approach he apparently would have been entitled to a permit to develop Sweedens Swamp. But after obtaining the permit and the land, could Trump then sell the package to Pyramid to develop? Or could he build the mall and then sell the developed site to Pyramid? If, on the one hand, the answer to these questions is “‘yes’’, then the market entry theory is no more than a troublesome mirage that could easily be circumvented by Pyramid’s using a second party to buy the land and obtain the permit. If, on the other hand, the answer is ‘“‘no”, then Pyramid is forever tainted, forever prohibited—somewhat like a bill of attainder—from owning this particular site, and only because at some time in the past it had “entered the market” while an alternative was still available. 850 F.2d at 48-49; App. A 27a. In sum, the market entry theory is inconsistent with the purpose of Section 404 itself. The result is a standard that is unworkable in the real world and that will not protect wetlands. B. The Market Entry Theory Is Contrary To The Language Of The Section 404(b)(1) Guidelines The market entry theory is also inconsistent with the language of the Section 404(b\1) guidelines. As noted ear- lier, the guidelines require the Corps to determine whether “there is a practicable alternative to the proposed dis- charge.” 40 C.F.R. § 230.10(a) (emphasis added); App. F 113a. The term “practicable alternative’’ is also defined in the present tense: 26 An alternative is practicable if it is available. . . . If it is otherwise a practicable alternative, an area not presently owned by the applicant which could reasonably be obtained, utilized, expanded or managed in order to fulfill the basic purpose of the proposed activity may be considered. 40 C.F.R. § 230.10(aX2) (emphasis added); App. F 113a. An alternative “is available,’’ then, only if it is available to, or could reasonably be obtained by, the applicant at the time the Corps makes its decision on the permit ap- plication. By finding that it should consider availability retroactively to the time the applicant “entered the mar- ket,”” EPA distorted the language of the regulation. Stated simply, EPA says “is” means “was.” This Court recently rejected a similar effort to convert present-tense language to the past tense, enjoining courts and presumably agencies to give statutes their “most nat- ural reading.’’ Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, __U.S. —— , 108 S.Ct. 376, 381 (1987).* Furthermore, although no cases have directly addressed the timing of the practicable alternatives test, in every reported case the Corps has analyzed availability of alter- native sites at the time of permit review, and the courts have affirmed decisions based on that analysis. Indeed, = The Second Circuit’s reading of the guidelines is both unnatural and strained: “{Tyhe ‘present’ of the regulations might be the time the application is submitted; the time it is reviewed; or any number of other times."” 850 F.2d at 43; App. A 16a. The two specific times mentioned by the Court are consistent with Petitioner's position. As to what “any number of other times” might be, that is precisely what we have been asking for over two years. * See National Audubon Society v. Hartz Mountain Development Corp., 14 Envtl. L. Rep. 20724, 20731 (Envtl. L. Inst.) (D.N.J. Oct. 24, 1983) (Corps, with court approval, examined over a dozen alternatives avail- able to applicant at time of permit review. Neither the Corps nor the court speculated as to what alternatives might have been available to 8 TT EH 27 not only has the Corps applied a present-tense analysis, but EPA itself has consistently done so in prior 404(c) proceedings.” C. The Second Circuit Decision Distorts The Regulatory Scheme By Allowing EPA To Ignore Its Burden Of Proof Under Section 404(c) The Second Circuit opinion, by allowing EPA to ignore its burden of proof under Section 404(c), distorts the reg- ulatory scheme. When EPA invokes its 404(c) authority, overriding a contrary Corps decision, the regulations place on the Agency the burden of proving that an applicant’s project will have an “‘unacceptable adverse effect” on the proposed site.” EPA simply ignored its burden, claiming that a veto was warranted because it was not satisfied that Pyramid had demonstrated, at the permitting stage under Section able to applicant at time of permit review. Neither the Corps nor the court speculated as to what alternatives might have been available to the applicant at some indeterminate point when the company “entered the market”); Friends of the Earth v. Hintz, 800 F.2d 822 (9th Cir. 1986) (Court affirmed Corps’ evaluation of alternatives available at time of permit review despite the fact that filling had already occurred and applicant was applying for an after-the-fact permit); cf Hough v. Marsh, 557 F. Supp. 74, 83-84 (D. Mass. 1982) (Court invalidates 404 permit where it was doubtful that information used in alternatives analysis accurately depicted market conditions at time of permit decision). * Excluding the decision under review here, EPA had issued only four 404(c) Final Determinations prior to its veto in this case. In two of these cases, the question of practicable alternatives was not an issue. In the two others, EPA examined only alternatives that were available to the applicant at the time of the 404(c) proceeding. “Final Deter- mination of the Assistant Administrator for External Affairs Concern- ing the Jack Maybank Site on Jehossee Island, South Carolina Pursuant to Section 404(c) of the Clean Water Act,” April 5, 1985 (“Maybank Determination”), “Final Determination of the Administrator Concern- ing M.A. Norden Site Pursuant to Section 404(c) of the Clean Water Act,” June 15, 1984 (“Norden Determination’’). * See 45 Fed. Reg. 85,336, 85,338 (December 24, 1980). 28 404(a), the absence of available alternatives. But EPA can- not meet its burden during the veto proceeding by claiming that an applicant did not meet its burden during the per- mitting phase.”’ This is especially true where, as here, the permitting authority found that the applicant had met its permitting burden. JA 82. As EPA explained in the pream- ble to its 404(c) regulations: [T]he Administrator’s authority . . . under Section 404(c) operates independently of [the Corps’] per- mitting authority in 404(a).... If the Adminis- trator uses his 404(c) ‘veto,’ then he does have the burden to justify his action, but that burden does not come into play until he begins a 404(c) proceeding. 45 Fed. Reg. at 85,338. The Agency’s administrative sleight-of-hand does not meet its burden of proof, and the Second Circuit, by failing to hold the Agency to its burden, undermines the regulatory scheme.” CONCLUSION Because the Second Circuit’s endorsement of the market entry theory is inconsistent with the language of the Sec- tion 404(bX1) guidelines and the purpose of Section 404 of the Act, because that theory provides no guidance to the regulated community, and because the lower court opinion creates enormous confusion for any private or pub- lic entity subject to Section 404 jurisdiction, the Petition for Certiorari should be granted. * Where an agency has the burden of proof, it must satisfy that burden by a preponderance of the evidence. Steadman v. SEC, 450 U.S. 91, 102 (1981); see Industrial Union Department v. American Petroleum Institute, 448 U.S. 607, 652-53 (1980) (agency cannot avoid its statutory burden by relying on policy that imposed burden on in- dustry); United Scenic Artists Local 829 v NLRB, 762 F.2d 1027, 1034 (D.C. Cir. 1985) (agency cannot create a presumption on grounds of policy to avoid necessity for making findings required by statute). * The Second Circuit properly declined to defer to EPA’s interpre- ae te WR we 29 Respectfully submitted, Gary H. Baise Counsel of Record Albert J. Beveridge, III Virginia S. Albrecht David M. Friedland BEVERIDGE & DIAMOND, P.C. 1333 New Hampshire Ave., N.W. Washington, D.C. 20036 (202) 828-0200 Attorneys for Petitioners Date: December 1, 1988. tation in this case. 850 F.2d at 45; App. A 20a. The Corps and EPA disagree on the interpretation of the Section 404(bX1) guidelines; there- fore, the Court must use its own judgment in construing the regula- tions. General Electric Co. v. Gilbert, 429 U.S. 125, 144-145 (1976). Moreover, because the Corps is the permitting authority, and addresses the zoning, economic and financial issues implicated in the practicable alternatives analysis in 14,000 permit applications each year, deference to the Corps, not EPA, is warranted. See National Association of Greet- ing Card Publishers v. U.S. Postal Service, 462 U.S. 810, 821 (1983) (where statute divided ratemaking responsibility between two agencies, Court deferred to agency in which ratemaking authority was ‘vested primarily’). INDEX TO APPENDICES APPENDIX A: Bersani v. Robichaud, 850 F.2d 36 (2d Cir. a seassncenscscocores la APPENDIX B: Bersani v. EPA, 674 F. Supp. 405 (N.D.N.Y. as scessnnssocscouscnss 3la APPENDIX C: EPA Final Determination of the Assistant Ad- ministrator for External Affairs (May 13, SITTIN caltinsemssdsonccscoscnsceccoccccocscccccscess 64a APPENDIX D: Bersani v. Robichaud, No. 87-6275, No. 87-6295, (2d Cir. Sept. 2, 1988) (rehearing and sugges- tion for rehearing en banc denied) ................. 109a APPENDIX E: a ss scscasscesconnecccccccooccccsess llla APPENDIX F: 40 CPR. § 290.106) .....2.0.0.0000.00c0ccccececceseceseseee 113a la APPENDIX A UNITED STATES COURT OF APPEALS, SECOND CIRCUIT. Nos. 852, 902, Dockets 87-6275, 87-6295. John A. BERSANI, Newport Galleria Group, Robert J. Congel and the Pyramid Companies, Appellants. v. Joseph ROBICHAUD and Citizens in Support of Attleboro Mall, Intervenor-Plaintiffs-A ppellants, Home Building Association of Massachusetts, Intervenor-Plaintvff. United States Environmental Protection Agency, United States Army Corps of Engineers, Lee Thomas, in his of- ficial capacity as Administrator of the United States En- vironmental Protection Agency, Richard K. Dawson, in his official capacity as Assistant Secretary for Civil Works, United States Army, and Jennifer Joy Wilson, in her of- ficial capacity as Assistant Administrator for External Af- fairs, United States Environmental Protection Agency, Appellees, Sierra Club, Environmental Defense Fund, National Wild- life Federation, National Audubon Society, Conservation Law Foundation of New England, Inc., Massachusetts Au- dubon Society, Citizens for Responsible Environmental Management, Massachusetts Society for Conservation Professionals, Audubon Society of Rhode Island, Rhode Island Association of Conservation Commissioners and Natural Resources Defense Council, Intervenor-Defendants. Argued March 16, 1988. Decided June 8, 1988. 2a On appeal from a judgment entered October 23, 1987 in the Northern District of New York, Thomas J. McAvoy, District Judge, 674 F.Supp. 405, granting appellee’s mo- tion for summary judgment and denying appellants’ motion for summary judgment, in an action brought by developers to challenge the final determination of the Environmental Protection Agency denying them permission to construct a shopping mall on a swamp, the Court of Appeals, Tim- bers, Circuit Judge, held: (1) that EPA’s “market entry” theory, considering availability of alternative sites at time developer entered the market for site instead of at time it applied for permit, was consistent with both regulatory language and past practice; and (2) that EPA’s interpre- tation, while not necessarily entitled to deference, was reasonable and thus was properly upheld by district court. Affirmed. George C. Pratt, Circuit Judge, filed a dissenting opin- . ion. | Albert J. Beveridge, III, Washington, D.C. (Gary H. Baise, Virginia S. Albrecht, Marc A. Zeppetello, David M. Fried- land, and Beveridge & Diamond, Washington, D.C., on the brief), for appellants. Paul D. Kamenar, Washington, D.C. (Daniel J. Popeo, Washington, D.C., and Henry M. Holzer, Brooklyn, N.Y., on the brief), for intervenor-appellants. Donald A. Carr, Dept. of Justice, Washington, D.C. (Roger J. Marzulla, Acting Asst. Atty. Gen., Peter R. Steenland, Jr., Margaret N. Strand, Dept. of Justice, Gail B. Cooper, E.P.A., Washington, D.C., and Ann H. Wil- liams-Dawe, E.P.A., Boston, Mass., on the brief), for appellees. e——— : 3a James T.B. Tripp, Environmental Defense Fund, New York City (Michael E. Herz, Environmental Defense Fund, New York City, Michael J. Bean, Environmental Defense Fund, Washington, D.C., Hope Babcock, National Audubon Society, Washington, D.C., Robert Dreher, Sierra Club Le- gal Defense Fund, Washington, D.C., Jerry Jackson, Na- tional Wildlife Federation, Washington, D.C., and Peter Shelley, Conservation Law Foundation of New England, Boston, Mass., on the brief), for intervenor-appellees. R. Sarah Compton, Carl W. Schwarz, Kurt J. Olson, and McDermott, Will & Emery, U.S. Chamber of Com- merce, Washington, D.C., and Robin S. Conrad, National Chamber Litigation Center, Washington, D.C., filed a brief as amicus curiae. Before TIMBERS, PRATT and MINER, Circuit Judges. TIMBERS, Circuit Judge: Appellants John A. Bersani, the Pyramid Companies, Newport Galleria Group and Robert J. Congel (‘‘Pyramid”’, collectively) appeal from a judgment entered October 23, 1987 in the Northern District of New York, Thomas J. McAvoy, District Judge, granting summary judgment in favor of appellees, the United States Environmental Pro- tection Agency (“EPA”’), the United States Army Corps of Engineers (the “‘Corps’’), Lee Thomas, the Administra- tor of the EPA, Richard K. Dawson, Assistant Secretary for Civil Works, United States Army, and Jennifer Joy Wilson, Assistant Administrator for External Affairs of the EPA (the “Federal Appellees’’ collectively), and de- nying Pyramid’s motion for summary judgment. Bersani v. EPA, 674 F.Supp. 405 (N.D.N.Y. 1987). This case arises out of Pyramid’s attempt to build a shopping mall on certain wetlands in Massachusetts known as Sweedens Swamp. Acting under the Clean Water Act, 33 U.S.C. § 1251 et seg. (1982), EPA vetoed the approval 4a by the Corps of a permit to build the mall because EPA found that an alternative site had been available to Pyr- amid at the time it entered the market to search for a site for the mall. The alternative site was purchased later by another developer and arguably became unavailable by the time Pyramid applied for a permit to build the mall. On appeal, the thrust of Pyramid’s argument is a chal- lenge to what it calls EPA’s “market entry” theory, i.e., the interpretation by EPA of the relevant regulation, which led EPA to consider the availability of alternative sites at the time Pyramid entered the market for a site, instead of at the time it applied for a permit. Pyramid argues principally (1) that the market entry approach is contrary to the regulatory language and past practice; and (2) that since the Corps, another agency which was jointly re- sponsible with EPA for administering the program in ques- tion, interpreted the pertinent regulation in a different way than EPA had, and since the market entry issue does not involve environmental expertise, this Court should not defer to EPA’s interpretation of the regulation. Other sub- ordinate claims are raised by appellants as well as by two intervenors and the amicus curiae.’ ‘The amicus curiae, the United States Chamber of Commerce (“Chamber of Commerce’’) filed a brief in support of Pyramid’s position. This brief raises two points also raised in Pyramid’s brief, and one new point: that EPA exceeded its authority under § 404(c) by engaging in a de novo review of Pyramid’s compliance with the regulation in ques- tion. The Citizens in Support of Attleboro Mall and Joseph Robichaud (“Citizens”’, collectively) nave intervened as plaintiffs/appellants and have submitted a brief raising two issues not covered by Pyramid in its brief: (1) whether EPA exceeded its authority under the relevant statute by considering the historical and cumulative effects of discharges on other wetlands, and (2) whether EPA arbitrarily rejected Pyramid’s mitigation efforts. The Conservation Law Foundation (““CLF’’) has intervened as a defendant/appellee and has submitted a brief raising six points, four of . 5a We hold (1) that the market entry theory is consistent with both the regulatory language and past practice; (2) that EPA’s interpretation, while not necessarily entitled to deference, is reasonable; and (3) that EPA’s application of the regulation is supported by the administrative record. We agree with the district court’s conclusion that EPA’s findings were not arbitrary and capricious. We also hold that Pyramid’s other arguments, and the arguments of one intervenor and the amicus, lack merit. We affirm. I. We shall summarize only those facts and prior proceed- ings believed necessary to an understanding of the issues raised on appeal. A. Statutory and Regulatory Framework One of the sections of the Clean Water Act (the ‘“‘Act’’) relevant to the instant case is § 301(a), 33 U.S.C. § 1311(a) (1982), which prohibits the discharge of any pollutant, in- cluding dredged or fill materials, into the nation’s navig- which are covered by the Federal Appellees in their brief. In the other two points, CLF: (1) answers the arguments of the Citizens and the Chamber of Commerce, asserting that EPA’s decision was wholly within its authority, and (2) asserts that in any event the appropriate remedy for any defects in EPA’s decision would be a remand. Upon reviewing each of these new points, we hold (1) that EPA’s decision was wholly within its authority, and (2) that EPA did not arbitrarily reject Pyramid’s efforts at mitigation but rather had ample basis to reject these efforts on the ground that they were not likely to succeed. In light of our holding with regard to the district court’s decision, discussed in the body of our opinion, we need not reach the issue of whether remand would be the appropriate remedy for defects in EPA’s actions. The other arguments of the two intervenors and the amicus will be dealt with in our discussion of the arguments of Pyramid and the Federal Appellees. 6a able waters, except in compliance with the Act’s provisions, including § 404. It is undisputed that Sweedens Swamp is a “navigable water’, as defined in 33 U.S.C. § 1362 (1982), and that Pyramid’s shopping center proposal will involve the discharge of dredged or fill materials. Section 404 of the Act, 33 U.S.C. § 1344 (1982 & Supp. III 1985), focusing on dredged or fill materials, provides that the United States Army and EPA will share respon- sibility for implementation of its provisions. EPA and the Corps also share responsibility for enforcing the Act. 33 U.S.C. §§ 1311 (1982), 1319 (1982), 1344(n) and (s) (1982). Section 404(a) authorizes the Secretary of the Army, acting through the Corps, to issue permits for the discharge of dredged or fill materials at particular sites. 33 U.S.C. § 1344(a) (1982). Section 404(b) provides that, subject to § 404(c), the Corps must base its decisions regarding permits on guidelines (the ‘‘404(b\1) guidelines”) developed by EPA in conjunction with the Secretary of the Army. 33 U.S.C. § 1344(b) (Supp. III 1985). The 404(bX1) guidelines, published at 40 C.F.R. Part 230 (1987), are regulations containing the requirements for is- suing a permit for discharge of dredged or fill materials. 40 C.F.R. § 230.10(a? covers “‘nonwater dependent activ- * Section 230.10(aX2) and (3) provide: “(a) Except as provided under section 404(b\2) [pertaining to nav- igation] no discharge of dredged or fill material shall be permitted if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem, so long as the alternative does not have other significant adverse environmental con- sequences. (2) An alternative is practicable if it is available and capable of being done after taking into consideration cost, existing technology, and lo- gistics in light of overall project purposes. If it is otherwise a practicable alternative, an area not presently owned by the applicant which could reasonably be obtained, utilized expanded or managed in order to fulfill 7a ities” (i.e., activities that could be performed on non-wet- land sites, such as building a mall) and provides essentially that the Corps must determine whether an alternative site is available that would cause less harm to the wetlands. Specifically, it provides that “‘no discharge of dredged or fill material shall be permitted if there is a practicable alternative” to the proposal that would have a “‘less ad- verse impact”’ on the “‘aquatic ecosystem’’. It also provides that a practicable alternative may include “an area not presently owned by the applicant which could reasonably be obtained, utilized, expanded or managed in order to fulfill the basic purpose of the proposed activity.” 40 C.F.R. 230.10(aX2). It further provides that, “‘unless clearly dem- onstrated otherwise’’, practicable alternatives are (1) “‘pre- sumed to be available” and (2) “presumed to have less adverse impact on the aquatic ecosystem”. 40 C.F.R. 230.10(aX3). Thus, an applicant such as Pyramid must re- but both of these presumptions in order to obtain a permit. Sections 230.10(c) and (d) require that the Corps not per- mit any discharge that would contribute to significant deg- radation of the nation’s wetlands and that any adverse impacts must be mitigated through practicable measures. In addition to following the 404(bX1) guidelines, the Corps may conduct a “public interest review’. 33 C.F.R. § 320.4 (1987). This public interest review is not mandatory the basic purpose of the proposed activity may be considered. (3) Where the activity associated with a discharge which is proposed for a special aquatic site [defined in Subpart E to include wetlands] does not require access or proximity to or siting within the special aquatic site in question to fulfill its basic purpose (i.e., is not “water dependent’), practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated oth- erwise. In addition, where a discharge is proposed for a special aquatic site, all practicable alternatives to the proposed discharge which do not involve a discharge into a special aquatic site are presumed to have less adverse impact on the aquatic ecosystem, unless clearly demon- strated otherwise.” 8a under § 404, unlike consideration of the 404(b) guidelines. In a public interest review, the Corps’ decision must reflect the ‘national concern” for protection and use of resources but must also consider the “‘needs and welfare of the peo- ple.” Jd. Under § 404(c) of the Act, 33 U.S.C. § 1344(c), EPA has veto power over any decision of the Corps to issue a permit. It is this provision that is at the heart of the instant case. Specifically, § 404(c) provides that the Administrator of EPA may prohibit the specification of a disposal site ‘“‘whenever he determines, after notice and opportunity for public hearings, that the discharge of materials into such area will have an unacceptable adverse effect” on, among other things, wildlife. An ‘“‘unacceptable adverse effect” is defined in 40 C.F.R. § 231.2(e) as an effect that is likely to result in, among other things, “significant loss of or damage to ... wildlife habitat”. The procedure under § 404(c) begins with the Regional Administrator (““RA’’) who, under § 231.3(a), must notify the Corps and the applicant when it is possible he will find an ‘unacceptable adverse effect’’. If within 15 days the applicant fails to satisfy the RA that no such effect will occur, the RA must publish his proposed determination to veto the grant of a permit. * Section 404(c), 33 U.S.C. § 1344(c), authorizes the Administrator: “to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and he is authorized to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site, whenever he determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas. Before making such determination, the Administrator shall consult with the Secretary. The Administrator shall set forth in writing and make public his findings and his reasons for making any determination under this subsection.” ee TG 9a A period for public comment and an optional public hearing follows, after which the RA either withdraws the deter- mination or submits a recommended determination to the national Administrator, whose decision to affirm, modify or rescind the RA’s recommendation is the final deter- mination of EPA for purposes of judicial review. The bur- den of proving that the discharge will have an “unacceptable adverse effect” is on EPA. 45 Fed.Reg. 85,336, 85,338 (1980); 44 Fed. Reg. 58,076, 58,080 (1979). In short, both EPA and the Corps are responsible for administering the program for granting permits for dis- charges of pollutants into wetlands under § 404. The Corps has the authority to issue permits following the 404(b\1) guidelines developed by it and EPA; EPA has the au- thority under § 404(c) to veto any permit granted by the Corps. The Corps processes about 11,000 permit applica- tions each year. EPA has vetoed five decisions by the Corps to grant permits. B. Factual Background of the Sweedens Swamp Project Sweedens Swamp is a 49.5 acre wetland which is part of an 80 acre site near Interstate 95 in South Attleboro, Massachusetts. Although some illegal dumping and motor- bike intrusions have occurred, these activities have been found to have had little impact on the site which remains a “high-quality red maple swamp” providing wildlife hab- itat and protecting the area from flooding and pollution. The effort to build a mall on Sweedens Swamp was initiated by Pyramid’s predecessor, the Edward J. De- Bartolo Corporation (‘DeBartolo’). DeBartolo purchased the Swamp some time before April 1982. At the time of this purchase an alternative site was available in North Attleboro (the ‘“‘North Attleboro site”). Since Massachu- setts requires state approval (in addition to federal ap- proval) for projects that would fill wetlands, DeBartolo applied to the Massachusetts Department of Environmen- tal Quality Engineering (““DEQE”’) for permission to build 10a on Sweedens Swamp. DEQE denied the application in April 1982. Pyramid took over the project in 1983 while the appeal of the DEQE denial was pending. In April 1983, Massa- chusetts adopted more rigorous standards for approval of permits. The new standards added wildlife habitat as a value of wetlands to be protected and required the absence of a “practicable alternative”. In March 1985, DEQE granted approval under the old, less stringent, regulations. The Massachusetts District Court reversed on the ground that DEQE should have applied the new regulations, but the Massachusetts Supreme Judicial Court ultimately up- held DEQE’s approval. Citizens for Responsible Environ- mental Management v. Attleboro Mall, Inc., 400 Mass. 658, 511 N.E.2d 562 (1987). One of the key issues in dispute in the instant case is just when did Pyramid begin searching for a suitable site for its mall. EPA asserts that Pyramid began to search in the Spring of 1983. Pyramid asserts that it began to search several months later, in September 1983. The dif- ference is crucial because on July 1, 1983—a date between the starting dates claimed by EPA and Pyramid—a com- petitor of Pyramid, the New England Development Co. (‘““NED’’), purchased options to buy the North Attleboro site. This site was located upland and could have served as a “practicable alternative’ to Sweedens Swamp, if it had been “available’’ at the relevant time. Thus, if the relevant time to determine whether an alternative is “available” is the time the applicant is searching for a site (an issue that is hotly disputed), and if Pyramid began to search at a time before NED acquired options on the North Attleboro site, there definitely would have been a “practicable alternative’ to Sweedens Swamp, and Pyra- mid’s application should have been denied. On the other hand, if Pyramid did not begin its search until after NED acquired options on the North Attleboro site, then the site arguably was not “available” and the permit should have lla been granted. Of course it also is possible that the North Attleboro site remained “available” after NED’s acquisi- tion of the options, since Pyramid arguably could have purchased the options from NED. Moreover, since the North Attleboro site indisputably was “‘available’’ when Pyramid’s predecessor, DeBartolo, purchased Sweedens Swamp, one might argue, as EPA does, that Pyramid should be held to stand in its predecessor’s shoes. The district court apparently agreed with Pyramid on the issue - of when Pyramid entered the market, stating that ‘“Pyr- amid initially became interested in developing a shopping mall in the Attleboro area in September 1983”. Bersani v. EPA, supra, 674 F.Supp. at 409. In December 1983, Pyramid purchased Sweedens Swamp from DeBartolo. In August 1984, Pyramid applied under § 404(a) to the New England regional division of the Corps (the “NE Corps’’) for a permit. It sought to fill or alter 32 of the 49.6 acres of the Swamp; to excavate nine acres of uplands to create artificial wetlands; and to alter 13.3 acres of existing wetlands to improve its environmental quality. Later Pyramid proposed to mitigate the adverse impact on the wetlands by creating 36 acres of replace- ment wetlands in an off-site gravel pit. During the review of Pyramid’s application by EPA, by the Fish and Wildlife Service (““FWS’’) and by the Corps, Pyramid submitted information on ‘“‘practicable alterna- tives’, especially the North Attleboro site. In rejecting that site as an alternative, Pyramid asserted that building a mall there was not feasible, not that the site was un- available. In the words of the district court, Pyramid claimed that “the site lacked sufficient traffic volume and sufficient access from local roads, potential department store tenants had expressed strong doubts about the fea- sibility of the site and previous attempts to develop 12a the site had met with strong resistance from the sur- rounding community.” Bersant, supra, 674 F.Supp. at 410 (emphasis added). In November 1984, EPA and FWS submitted official comments to the NE Corps recommending denial of the application because Pyramid’s proposal was inconsistent with the 404(bX1) guidelines. Pyramid had failed (1) to overcome the presumption of the availability of alterna- tives and (2) to mitigate adequately the adverse impact on wildlife. EPA threatened a § 404(c) review. Pyramid then proposed to create additional artificial wetlands at a nearby upland site, a proposal it eventually abandoned. In January 1985, the NE Corps hired a consultant to investigate the feasibility of Sweedens Swamp and the North Attleboro site. The consultant reported that either site was feasible but that from a commercial standpoint only one mall could survive in the area. On February 19, 1985, the NE Corps advised Pyramid that denial of its permit was imminent. On May 2, 1985, the NE Corps sent its recommendation to deny the permit to the national headquarters of the Corps. Although the NE Corps ordi- narily makes the final decision on whether to grant a permit, see 33 C.F.R. § 325.8 (1982), in the instant case, because of widespread publicity, General John F. Wall, the Director of Civil Works at the national headquarters of the Corps decided to review the NE Corps’ decision. Wall reached a different conclusion. He decided to grant the permit after finding that Pyramid’s offsite mitigation pro- posal would reduce the adverse impacts sufficiently to al- low the “practicable alternative’ test to be deemed satisfied. He stated: “In a proper case, mitigation measures can. be said to reduce adverse impacts of a proposed activity to the point where there is no ‘easily identifiable differ- ence in impact’ between the proposed activity (in- 13a cluding mitigation) versus the alternatives to that activity.” Although he did not explicitly address the issue, Wall apparently assumed that the relevant time to determine whether there was a practicable alternative was the time of the application, not the time the applicant entered the market. In other words, Wall appears to have assumed that the market entry theory was not the correct approach. For example, while addressing the traditional “‘practicable alternatives” analysis as an alternative ground for his de- cision, Wall found that the North Attleboro site was un- available “‘because it has been optioned by another developer”. Since the site was not optioned at the time EPA argues Pyramid entered the market, this language suggests (to Pyramid at least) that Wall could not have been employing the market entry approach. On May 31, 1985, Wall ordered the NE Corps to send Pyramid, EPA and FWS a notice of its intent to grant the permit. The NE Corps complied on June 28, 1985. On July 23, 1985, EPA’s RA initiated a § 404(c) review of the Corps’ decision. Following the procedure set forth in 40 C.F.R. Part 231 (discussed above), EPA published notice of its intent te prohibit the project in the Federal Register; held a public hearing on September 26, 1985; and permitted a period for public comment which closed on October 4, 1985. A second hearing was held on November 18, 1985. On March 4, 1986, the RA recommended that EPA veto the permit because of adverse impacts on wildlife and available “‘practicable alternatives’. In particular, the RA found that Pyramid had not overcome the presumption that an alternative existed, in part because Pyramid had failed to provide information on the availability of the North Attleboro site. After first refusing to provide the information, Pyramid later had claimed “there is no fur- ther or more detailed information. It simply does not i l4a exist.’’ The RA alternatively reasoned that the North At- tleboro site had been available to DeBartolo, and that EPA should attribute this availability to Pyramid because Pyr- amid had benefitted from DeBartolo’s application for state approval. On May 13, 1986, EPA issued its final determination, which prohibited Pyramid from using Sweedens Swamp. It found (1) that the filling of the Swamp would adversely affect wildlife; (2) that the North Attleboro site could have been available to Pyramid at the time Pyramid investigated the area to search for a site; (3) that considering Pyramid’s failure or unwillingness to provide further materials about its investigation of alternative sites, it was uncontested that, at best, Pyramid never checked the availability of the North Attleboro site as an alternative; (4) that the North Attleboro site was feasible and would have a less adverse impact on the wetland environment; and (5) that the mitigation proposal did not make the project preferable to other alternatives because of scientific uncertainty of success. In the second of these findings, EPA used what Pyramid calls the ‘‘market entry’ approach. On July 1, 1986, Pyramid commenced the instant action in the district court to vacate EPA’s final determination as arbitrary and capricious. After the parties filed cross- motions for summary judgment, the newspapers reported that Pyramid intended to enter a joint venture with NED to build a mall at the North Attleboro site. Affidavits submitted concerning this development did not indicate whether Pyramid planned to continue the Sweedens Swamp project. Since the joint venture agreement was still in draft form, EPA did not take the position that the case was moot. On October 6, 1987, the court granted EPA’s motion for summary judgment. The court stated that, with regard 15a to the market entry theory, EPA’s interpretation of its regulations was entitled to deference. This appeal followed. For the reasons which follow, we affirm. Il. One of Pyramid’s principal contentions is that the mar- ket entry approach is inconsistent with both the language of the 404(bX1) guidelines and the past practice of the Corps and EPA. A. With regard to the language of the regulations, Pyramid reasons that the 404(b\1) guidelines are framed in the present tense, while the market entry approach focuses on the past by considering whether a practicable alternative was available at the time the applicant entered the market to search for a site. To support its argument that the 404(bX1) guidelines are framed in the present tense, Pyr- amid quotes the following language: ‘“‘An alternative is practicable if it is available... . If it is otherwise a practicable alternative, an area not presently owned by the applicant which could reason- ably be obtained, utilized, expanded or managed in order to fulfill the basic purpose of the proposed ac- tivity may be considered.”’ 40 C.F.R. § 230.10(aX2) (emphasis added). It then argues that EPA says “‘is’’ means “‘was’’. It cites Gwaltney of Smithfield v. Chesapeake Bay Foundation, 108 S.Ct. 376, 381 (1987), to indicate that the Supreme Court believes that the “‘most natural’’ reading of present tense langauge in § 505(a) of the Act refers only to the present and future. While this argument has a certain surface appeal, we are persuaded that it is contrary to a common sense read- ing of the regulations; that it entails an overly literal and a l6a narrow interpretation of the language; and that it creates requirements not intended by Congress. First, while it is true that the language is in the present tense, it does not follow that the “most natural” reading of the regulations would create a time-of-application rule. As EPA points out, ‘‘the regulations do not indicate when it is to be determined whether an alternative ‘is’ avail- able,” (emphasis in original), i.e., the “‘present’’ of the regulations might be the time the application is submitted; the time it is reviewed; or any number of other times. Based upon a reading of the language in the context of the controlling statute and the regulations as a whole, moreover, we conclude that when the agencies drafted the language in question they simply were not thinking of the specific issues raised by the instant case, in which an ap- plicant had available alternatives at the time it was se- lecting its site but these alternatives had evaporated by the time it applied for a permit. We therefore agree with the district court that the regulations are essentially silent on the issue of timing and that it would be appropriate to consider the objectives of the Act and the intent un- derlying the promulgation of the regulations. Bersani, su- pra, 674 F.Supp. at 412. Second, as EPA has pointed out, the preamble to the 404(b\1) guidelines states that the purpose of the “‘prac- ticable alternatives” analysis is “to recognize the special value of wetlands and to avoid their unnecessary destruc- tion, particularly where practicable alternatives were avail- able in non-aquatic areas to achieve the basic purpose of the proposal.”’ 45 Fed. Reg. 85,338 (1980) (emphasis added). In other words, the purpose is to create an incentive for developers to avoid choosing wetlands when they could choose an alternative upland site. Pyramid’s reading of the regulations would thwart this purpose because it would remove the incentive for a developer to search for an alternative site at the time such an incentive is needed, i.e., at the time it is making the decision to select a par- l7a ticular site. If the practicable alternatives analysis were applied to the time of the application for a permit, the developer would have little incentive to search for alter- natives, especially if it were confident that alternatives soon would disappear. Conversely, in a case in which al- ternatives were not available at the time the developer made its selection, but became available by the time of application, the developer’s application would be denied even though it could not have explored the alternative site at the time of its decision. Pyramid attacks this reasoning by arguing that few de- velopers would take the risk that an available alternative site would become unavailable and that EPA’s reading improperly considers the motives and subjective state of mind of the applicant. These arguments are wide of the mark. Whether most real-life developers would take such a risk is irrelevant. The point is that Pyramid’s time-of- application theory is completely at odds with the expressed intent of the regulations to provide an incentive to avoid choosing wetlands. Similarly, EPA’s interpretation does not require courts to investigate the subjective state of mind of a developer. EPA discusses state-of-mind issues only because it is discussing the purpose behind the reg- ulations, which is concerned with incentives, and thus in fact is indirectly concerned with the developer’s state of mind. In short, we conclude that a common-sense reading of the statute can lead only to the use of the market entry approach used by EPA. B. With regard to the past practice of the Corps and EPA, Pyramid asserts that neither has ever applied a market entry approach. It first cites two previous final determi- nations of EPA, known as the “Final Determination of the Assistant Administrator for External Affairs Concern- 18a ing the Jack Maybank Site on Jehossee Island, South Car- olina Pursuant to Section 404(c) of the Clean Water Act,” April 5, 1985 (‘“‘“Maybank Determination”’), and the ‘Final Determination of the Administrator Concerning M.A. Nor- den Site Pursuant to Section 404(c) of the Clean Water Act,” June 15, 1984 (““Norden Determination”). On the basis of these determinations, Pyramid argues that, had EPA been using a market entry approach in these cases, it would have examined whether alternatives were avail- able at earlier times and that EPA had failed to make such an examination. Pyramid also cites National Audubon Society v. Hartz Mountain Dev. Corp., 14 Envtl.L. Rep. 20724 (Envtl.L.Inst.) (D.N.J. Oct. 24, 1983), Friends of the Earth v. Hintz, 800 F.2d 822 (9 Cir.1986), and Hough v. Marsh, 557 F.Supp. 74 (D.Mass.1982), as examples of cases in which courts have upheld Corps decisions which had examined only those practicable alternatives that were available at the time of the permit review. Our examination of these prior decisions has satisfied us, however, that the issue raised in the instant case sim- ply has not been addressed before. In National Audubon Society, the actual issue was whether the alternative site had to be available to the applicant or any developer. In Hintz, the court, while addressing other issues, simply ap- proved a Corps decision in which only those alternatives available at the time of the review were considered. In Hough, the court invalidated a permit not because the Corps had considered past alternatives but rather because it assumed that such alternatives continued to exist during the entire selection process. Similarly, the Maybank De- termination in fact addressed another issue. In the Norden Determination, where about 40 possible alternative sites were identified, of which seven were available at the time of application, EPA did not address the timing issue ex- plicitly, because it was not required to—the presence of the seven currently available alternatives made it unnec- essary to reach the issue. 3 ) 19a. We believe that the issue essentially is one of first impression. We view EPA’s action in the instant case as an application of the regulatory language to the specific needs of this case which arose here for the first time. We therefore hold that EPA has not acted contrary to prior practice under the regulations. Ill. We turn next to the issue of whether EPA’s interpre- tation of the 404(bX1) guidelines is entitled to the defer- ence usually accorded an agency with regard to its interpretation of regulations it is charged with adminis- tering, see EPA v. National Crushed Stone Ass’n, 449 U.S. 64, 83 (1980), and participated in formulating. See also United States v. Hescorp. Heavy Equip. Sales Corp., 801 F.2d 70, 76 (2 Cir.), cert. denied, 107 S.Ct. 672 (1986). The district court implied in its decision that it was ac- cording EPA such deference in examining its market entry approach. Pyramid contends that such deference was unwarranted because two agencies—EPA and the Corps—developed and administered the regulations, and the Corps reached a dif- ferent conclusion from that of EPA on the market entry issue. It asserts that, contrary to EPA’s market entry approach, the ‘Corps’ position is that the availability should be determined as of the time an application is under re- view.”” Pyramid points out that under § 404(b) the regu- lations are to be developed by EPA “‘in conjunction with’”’ the Secretary of the Army (who acts through the Corps). It cites General Elec. Co. v. Gilbert, 429 U.S. 125, 144-45 (1976), for the proposition that a court must use its own judgment in construing a regulation when two agencies with responsibility for administering it reach divergent conclusions. It also contends that the Corps has greater experience with and expertise in assessing the ‘‘availabil- ity” of alternatives than EPA, because it is the Corps that makes the initial decision on thousands of applications while 20a EPA reviews under § 404(c) only rarely. Furthermore, Pyramid claims that the availability analysis implicates zon- ing, economic and financial issues, not environmental ones. In response, EPA asserts that the Corps did not take a developed opposing policy position on the issue of what time is relevant in the “practicable alternatives’’ analysis. The reason for this is that the Corps, acting through Gen- eral Wall, based its decision primarily on its finding that Pyramid’s mitigation proposal was workable. EPA also as- serts, on the issue of its expertise, that its “selective and most infrequent invocation” of its veto power underscores EPA’s “seriousness” about using the veto. Finally EPA asserts that the Act’s legislative history indicates that Con- gress intended EPA to have the “final word’ on any dis- putes with the Corps. While none of EPA’s assertions is entirely persuasive, there also are difficulties with Pyramid’s position. It is undeniable, for example, that Wall in fact did find that the North Attleboro site was “unavailable’’ and thus it appears that the Corps tacitly was applying a time-of- application test. On the other hand, it is possible that Wall believed that Pyramid did not enter the market until after NED had purchased the North Attleboro site. Accordingly, Wall may have found the alternative site “unavailable” under the market entry approach. Pyramid’s and EPA’s other arguments similarly cut both ways or are inconclu- sive. Even if we are not thoroughly persuaded that EPA’s interpretation was entitled to deference, however, we nevertheless conclude that the district court’s decision in its favor must be upheld. As Pyramid itself points out (to the detriment of its argument), the issue of deference is separate from the issue of the standards of review of the district court and of our Court. On appeal, we must subject the district court’s judgment to plenary review, Potenze v. New York Shipping Ass'n, 2la 804 F.2d 235, 239 (2 Cir.1986), cert. denied, 107 S.Ct. 1955 (1987), and apply the same summary judgment test as applied by the district court. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 630 (9 Cir.1987). An agency’s interpretation of its own regula- tions raises a question of law, White Indus. v. FAA, 692 F.2d 532, 534 (8 Cir.1982), and thus is freely reviewable by our Court. Pennzoil Co. v. FERC, 789 F.2d 1128, 1135 (5 Cir.1986). The standard of review for the district court in this case is that the court shall set aside EPA’s findings, conclusions or actions only if they are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Administrative Procedure Act § 10(e), 5 U.S.C. § 706(2\A) (1982). As stated by the Supreme Court in Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983), “{A] reviewing court may not set aside agency rule that is rational, based on consideration of the relevant factors, and within the scope of the authority dele- gated to the agency by the statute.... The scope of review under the ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational con- nection between the facts found and the choice made.’ ”’ Id. at 42-43 (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). Applying these standards, we are convinced that EPA’s market entry interpretation was reasonable, and therefore was neither “arbitrary and capricious” nor “not in ac- cordance with law.” We therefore hold that the district court correctly found that EPA’s interpretation of the reg- ulations was reasonable. 22a IV Finally, we turn to Pyramid’s subordinate claims, three of which warrant brief mention. Pyramid claims (1) that the market entry theory violates administrative law prin- ciples because it is not specific enough to put the public on notice of when it must consider alternative sites; (2) that EPA’s application of the market entry theory was unfair in this case; and (3) that the district court exceeded its authority in supplying a rationale for EPA’s decision which was not offered by EPA. As for the claim that the market entry approach is not specific enough, Pyramid reasons that any number of points in time could constitute “entry” into the market. It spec- ulates whether market entry occurs “from the time the first internal memorandum is written,”’ or the time ‘‘the first consultant [is] hired,”’ or the time the ‘‘first negoti- ation for a site [is] conducted.”” We are persuaded, how- ever, that EPA is correct in asserting that it is unnecessary to pin down the standard to such a degree and that it would confuse things further to attempt to do so. Since the point of “‘entry’’ necessarily will vary from case to case, we believe the concept of “‘market entry”’ is the best method and is specific enough to put a developer on notice of when it should be considering alternative sites. With regard to the claim that EPA applied the market entry approach unfairly in the instant case, Pyramid as- serts that the way EPA announced a “‘new”’ standard (the market entry rule) and then applied it “retroactively” in this case was fundamentally unfair. It also asserts that EPA’s failure to address evidence that the North Attleboro site was unavailable at the time of Pyramid’s market entry was unfair. According to Pyramid, such fundamental un- fairness violates the principles underlying the Administra- tive Procedure Act. See Morton v. Ruiz, 415 U.S. 199, 232 (1974). 23a As we held above, however, we view EPA’s interpre- tation of the rules as a reasonable application of the reg- ulatory language to the unique facts of this case—a case in which it became necessary for the first time to reach the issue of when availability should be determined. EPA did not create and announce a “new” standard and apply it retroactively to Pyramid. Rather, EPA interpreted the law to apply it to the facts of this case. ne Ae Re re Moreover, we believe the extensive administrative re- cord supports a finding that the North Attleboro site was available to Pyramid when it entered the market. Even if Pyramid were found not to have entered the market until September 1983, after NED had acquired options to pur- chase the North Attleboro site, it does not necessarily follow that the site was unavailable. Aside from the fact that NED did not acquire all the options for the North Attleboro site until June 1984, it also was possible for Pyramid to attempt to purchase the options from NED. The record shows no such attempts to purchase the site, or even to investigate its availability. Alternatively, even though the district court apparently was not persuaded by it, there also is evidence in the record to show that Pyr- amid actually entered the market in the Spring of 1983, before NED had purchased its options. Finally, the evi- dence shows that the North Attleboro site had been avail- able to DeBartolo, Pyramid’s predecessor. EPA could reasonably have determined that Pyramid should be held to “stand in the shoes” of DeBartolo, especially since it was able to obtain state approval of the project under the less-stringent state standards that had originally applied to DeBartolo. Finally, Pyramid contends that the district court im- properly supplied a rationale for EPA’s final determination that EPA itself did not articulate. It is true that the dis- trict court rejected one of EPA’s grounds for finding that Pyramid had failed to rebut the presumption that a prac- ticable alternative was available. This ground was that the = | | 24a “trade custom” of developers was to investigate a poten- tial development site for many months before purchasing it. EPA reasoned that, if Pyramid had purchased Swee- dens Swamp in December 1983, it was unlikely, in view of the trade custom, that it had entered the market only eight weeks earlier—in September 1983—as Pyramid claimed. The court accepted what it characterized as EPA’s finding that the North Attleboro site in any event was still available in September 1983, when even Pyramid ad- mitted it had entered the market. Pyramid asserts that EPA did not make this finding and that the court improperly supplied a rationale for EPA’s determination that EPA did not articulate itself. This assertion fails, however, because EPA did make the finding. In its final determination it stated several reasons why it believed the North Attleboro site should be deemed to have been “‘available’’. It stated, among other things, (1) that NED could “have been talked into relinquishing its interest’’ in the site even in September or December 1983; (2) that Pyramid never investigated the availability of the North Attleboro site because it believed it was too far from the highway; and (3) that Pyramid had refused to provide EPA with information on the time of its entry into the market, stating that such information ‘simply does not exist’’. Thus, the trade custom ground to support the finding of availability was accompanied by several other grounds in the final determination. The district court therefore did not “supply” a rationale for EPA. Rather, EPA supplied several for itself. We affirm the district court’s decision in all respects. V. To summarize: We hold (1) that the market entry theory is consistent with both the regulatory language and past practice; (2) that EPA’s interpretation, while not necessarily entitled 25a to deference, is reasonable and its application of its rule is supported by the record; and (3) that Pyramid’s other arguments lack merit. Affirmed. GEORGE C. PRATT, Circuit Judge, dissenting: Finding that a ‘“‘common-sense reading’ of 33 U.S.C. § 1344(c) “‘can lead only to the use of the market entry approach’’, the majority today holds that in determining whether an “alternative is available’, EPA is to look, not at the present circumstances and most current data, but rather at circumstances and data which existed, perhaps years earlier, when the developer ‘“‘entered the market’. This market entry theory approaches a sensitive environ- mental problem through a time warp, it ignores the stat- ute’s basic purpose, and it creates unfair and anomalous results. I therefore dissent. I. The Legislative History and Purpose of Section 1344. Section 1344 was enacted by congress in 1972 as part of a broad-based improvement to a national water policy that had been, as congress termed it, “inadequate in every vital aspect.”” S.Rep. No. 414, 92 Cong., 2d Sess. 7 (1972). Specifically, the section was intended to address the del- icate balance between those activities which endanger “‘ma- rine environment [and] ecological systems” on the one hand, and those activities “essential for the maintenance of interstate and foreign commerce” on the other. Conf.Rep. No. 1236, 92nd Cong., 2d Sess. 43-44 (1972). Section 1344 is unusual: its primary purpose is neither to punish those who illegally infringe on national wetlands, nor, as the majority opines, “to provide an incentive [to developers] to avoid choosing wetlands’’. To the contrary, the statute is directed at the land itself without any regard to whether the party seeking to develop it has clean hands. Thus, if the “biological integrity’’ of a specific wetland 26a area outweighs the “interstate and foreign commerce’’ ad- vantages that the site could provide, the site should remain undeveloped regardless of which developer is seeking the permit. See S.Rep. No. 414, 92nd Cong., 2d Sess. 7 (1972); Conf.Rep. No. 1236, 92nd Cong., 2d Sess. 43-44 (1972). Conversely, if the balance weighs in favor of commerce or other economic advantages, then the land should be developed, again regardless of the specific developer in- volved. Jd. In short, congress designed the section to pre- serve the environment consistent with reasonable accommodation to the economic and social needs of the public; it was not concerned with the identities or past activities of particular developers. Il. The Purpose of Section 1344 and the Market Entry Theory. In this case I have no problem with EPA’s basic ap- proach. It conscientiously attempted to weigh. the economic advantages against the ecological disadvantages of devel- oping Sweedens Swamp and, in approaching this deter- mination, it properly looked to alternate available sites. However, EPA went wrong—seriously wrong—when it adopted the market entry theory to decide whether an alternate site was available. By focusing on the decision- making techniques and tactics of a particular developer, instead of the actual alternatives to disturbing the wetland, EPA ignored the statute’s central purpose. The market entry theory in effect taints a particular developer with respect to a particular site, while ignoring the crucial question of whether the site itself should be preserved. Under the market entry theory, developer A would be denied a permit on a specific site because when he entered the market alternatives were available, but latecomer developer B, who entered the market after those alternatives had become unavailable, would be entitled to a permit for developing the same site. In such a case, the theory no longer protects the land, but instead becomes 27a a distorted punitive device: it punishes developer A by denying him a permit, but grants developer B a permit for the same property—and the only difference between them is when they “entered the market’”’. The market entry theory has further problems. In this case, for example, if a Donald Trump had “entered the market’’ after NED took the option on the North Attleboro site and made it unavailable, under EPA’s approach he apparently would have been entitled to a permit to develop Sweedens Swamp. But after obtaining the permit and the land, could Trump then sell the package to Pyramid to develop? Or could he build the mall and then sell the developed site to Pyramid? If, on the one hand, the answer to these questions is “‘yes’”’, then the market entry theory is no more than a troublesome mirage that could easily be circumvented by Pyramid’s using a second party to buy the land and obtain the permit. If, on the other hand, the answer is “‘no’’, then Pyramid is forever tainted, forever prohibited—somewhat like a bill of attainder—from owning this particular site, and only because at some time in the past it had “entered the market” while an alternative was still available. Furthermore, in a business that needs as much pre- dictability as possible, the market entry theory will re- grettably inject exquisite vagueness. When does a developer enter the market? When he first contemplates a devel- opment in the area? If so, in what area—the neighborhood, the village, the town, the state or the region? Does he enter the market when he first takes some affirmative action? If so, is that when he instructs his staff to research possible sites, when he commits money for more intensive study of those sites, when he contacts a real estate broker, when he first visits a site, or when he makes his first offer to purchase? Without answers to these questions a developer can never know whether to proceed through the expense of contracts, zoning proceedings, and EPA appli- cations. Such a vague standard as “market entry” falls 28a far short of the requirement that an agency articulate its standards with sufficient clarity so that the affected com- munity may know what those standards are. See Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Insur- ance Co., 463 U.S. 29, 48 (1983); Port Terminal Railroad Ass'n v. United States, 551 F.2d 1336, 1344-45 (5th Cir. 1977). Even more important, the result reached by EPA and the majority is contrary to what congress sought to achieve when it passed § 1344. Pyramid has been “‘punished’’ for beginning its quest when the North Attleboro site was still available; but Sweedens Swamp nevertheless could be de- stroyed through an identical application by some other developer who happened to enter the market after that alternate site became unavailable. And this would be so even if another, better-suited site should become available after the second developer enters the ma [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0511%3A01. Public record. Not legal advice.