Petition for Writ of Certiorari — Tull v. United States

Supreme Court, U.S.

FILED

85-1259 JAN 24 1988

OSEPH F. SPANOL, JR.

No. J CLERK |

_

‘

IN THE

Suprenwe Court of the United States

OCTOBER TERM, 1985

EDWARD LUNN TULL,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RICHARD R. NAGEOTTE *

NAGEOTTE, BORINSKY & ZELNICK

14908 Jefferson Davis Hwy.

Woodbridge, Virginia 22191-3997

(703) 491-4136

* Counsel of Record

Of Counsel:

E. BARRETT PRETTYMAN, JR.

HOGAN & HARTSON

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

(202) 331-4685

WILSON - Epes PRINTING Co., INC 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. Whether the defendant in a Government-instituted

civil action in a Federal District Court to recover sub-

stantial civil penalties (in this case in excess of $300,000)

under a federal statute is entitled under the Seventh

Amendment of the Constitution to a trial by jury.

2. (a) Whether equitable estoppel runs against the

Government.

(b) Whether equitable estoppel precludes the recovery

of civil penalties by the Government under the Clean

Water Act when a citizen requests a jurisdictional inspec-

tion by the agency charged with enforcement, is led to

believe that the agency does not have jurisdiction and

that a permit is not required, proceeds with his develop-

ment of lots under constant surveillance by the agency,

is never advised that his activities have come under the

agency’s jurisdiction or are otherwise unlawful notwith-

standing regulations requiring the agency to so inform

the citizen, and is then punished five years later after

virtually all of the lots have been sold to others.

(i)

ii

PARTIES

The defendant-appellant below was an individual, Ed-

ward Lunn Tull. The plaintiff-appellee was the United

States.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED i

PARTIES siatiadansbialanbieians idanelalaainndescanadedciaiabl li

TABLE OF CONTENTS . iii

TABLE OF AUTHORITIES iv

OPINIONS BELOW - ident ]

JURISDICTION ........ ie dainisiiinacaiislecitiimmianaes inten 2

STATUTE AND REGULATIONS INVOLVED 2

STATEMENT OF THE CASE 2

REASONS FOR GRANTING THE WRIT 6

1. Petitioner was entitled to a jury trial 6

2. Equitable estoppel runs against the Govern-

ment and should be applied in this case 18

CONCLUSION nee i 22

APPENDICES .. Separately Bound

(iii)

iv

TABLE OF AUTHORITIES

Cases: Page

Atlas Roofing Co. v. Occupational Safety and Health

Review Comm'n, 430 U.S. 442 (1977) 10, 11, 14

Beacon Theatres, Inc. V. Westover, 359 U.S. 500

AE Se enn, Rm a ene Hie oe as

Block v. Hirsh, 256 U.S. 135 (1921) ............... 7,10

Board of Trustees Vv. Thompson Building Mate rials.

Inc., 749 F.2d 1396 (9th Cir. 1984), cert. denied,

105 S. Ct. 2116 (1985) : 11

Curtis v. Loether, 415 U.S. 189 (1974) 9, 13,14

Dairy Queen, Inc. V. Wood, 369 U.S. 469 (1962) 9,15

Dimick v. Schiedt, 293 U.S. 474 (1935) 17

FAA Vv. Landy, 705 F.2d 624 (2d Cir.), cert. denied,

464 U.S. 895 (1983) 12

Galloway v. United States, 319 U. S. 372 (1943) 11

Gartenberg Vv. Merrill Lynch Asset Management,

Inc., 487 F.Supp. 999 (S.D.N.Y. 1980) 11

—~d v. Community Health Services, 104 S. Ct.

2218 (1984) ides 18, 19

Benner v. United States, 213 U.S. 103 (1909) . 7

In Re Corrugated Container Antitrust Litigation,

752 F.2d 137 (5th Cir.), cert. denied, 105 S. Ct.

3536 (1985) leit | 11

INS vy. Hibi, 414 U.S. 5 (1973) 18, 19

INS v. Miranda, 459 U.S. 14 (1982) ............ 18

Jacob v. City of New York, 315 U.S. 752 (1942) 17

Katchen v. Landy, 382 U.S. 323 (1966) 9

Keith Fulton & Sons, Inc. v. New England Team-

sters & Trucking Industry Pension Fund, 762

F.2d 1124 (1st Cir. 1984) 11

Lehman v. Makshian, 453 U.S. 156 (1981) 11

Montana Vv. Kennedy, 366 U.S. 308 (1961) 18, 19

Myron V. Hauser, 673 F.2d 994 (8th Cir. 1982) 11

NLRB vy. Jones & Laughlin Steel Corp., 301 U.S.

1 (1937) . —_ ..1, 9, 11

Parklane Hosiery Co. Vv. Shore, 439 U.S. 322

(1979) a 2 9

Parsons Vv. Bedford, 28 U.S. 433 (1830) . 13

Vv

TABLE OF AUTHORITIES—Continued

Page

Payne v. Block, 751 F.2d 1191 (1lith Cir. 1985),

cert. granted, 54.U.S.L.W. (U.S. Oct. 2, 1985)

(No. 84-1948) _..... POA TET ee PLE A 21

Parnell v. Southall Realty, 416 U.S. 363 (1974) 10

Phillips v. Kaplus, 764 F.2d 807 (11th Cir. 1985)... 11

Porter v. Warner Holding Co., 328 U.S. 395

> eros = 7, 8, 9, 15

Quinn V. Digiulian, 739 F. 2d 637 (D. C. Cc ir. 1984) . 10, 12

Reeves V. Guiffrida, 756 F.2d 1141 (5th Cir. 1985). 18

Rosenthal & Co. Vv. Bagley, 581 F.2d 1258 (7th Cir.

SY ced witha 11

Ross Vv. Bernhard, 396 US. 531 (1970) . 9g

Schweiker v. Hansen, 450 U.S. 785 (1981) 18, 19, 20

Sprague Vv. Ticonic National Bank, 307 U.S. 161

0 ee 14

Terson Co. V. Bakery Drivers & Salesmen Local

194, 739 F.2d 118 (3d Cir. 1984) 11

Textile Workers Pension Fund v. Standard Dye &

Finishing Co., 725 F.2d 843 (2d Cir.), cert. de-

nied, 104 §. Ct. 3554 (1984) 11

Thomas Vv. Union Carbide Agricultural Products

Co., 105 S. Ct. 3325 (1985) . 10, 11

United States v. Dudley, 739 F.2d 175 (4th Cir.

| Rees ee ee ae 10

United States v. J. B. Williams Co., 498 F.2d 414

(2d Cir. 1974) __ 12, 13

United States v. M.C.C. of Florida, Ine. 772 F.2d

1501 (11th Cir. 1985) . 16

United States v. New Mexico. 642 F.2d 397 (10th

I A i kn 12

United States v. One 1976 Mercedes Benz 2808S,

618 F.2d 453 (7th Cir. 1980) . 11

United States v. Regan, 232 U.S. 37 (1914) 7,15

United States v. Republic Steel Corp., 362 U.S. 482

RRR reer eet aD 17

Unit-d States v. Stevenson, 215 USS. 190 (1909) . 15

Weinberger v. Romero-Barcelo, 456 U.S. 305

(1982) .......... sasbiuriateliielcedeuaietidialemicentdaddiaaias 17

vi

TABLE OF AUTHORITIES—Continued

Page

Whitehead v. Shattuck, 138 U.S. 146 (1891) ......... 15

Wyandotte Transp. Co. v. United States, 389 U.S.

I ih siccnnsiiied 17

Constitution, statutes and regulations:

33 C.F.R. 209.120(¢) (12) (1975) Scandi .. 8,20

33 C.F.R. 323.2(c) ......... ace TD 4

33 C.F.R. 326.2 (1977) PEI a

Clean Water Act, 33 U.S.C. §§ 1251 et seq. passim

Emergency Price Control Act of 1942, § 205(2) 8

Federal Aviation Act, 49 U.S.C. § 1471(a) (1) -.... 12

Labor Management Reporting and Disclosure Act,

29 U.S.C. §§ 411, 529 ..... a. Sem | 7 12

Rivers and Harbors Act, 33 U. S C. § 406 8,17

Seventh Amendment 4 = ' a 2,4

15 U.S.C. § 45(1) eae “a 12

28 U.S.C. § 1254(1) 2

32 U.S.C. § 1319 (d) . 15

Miscellaneous:

Federal Rule of Civil Procedure 38 _................. 4

Kirst, Administrative Penalties and the Civil Jury: -

the Supreme Court’s Assault on the Seventh

Amendment, 12 U. Pa. L. Rev. 1281 (1978) . 17

J. Moore, J. Lucas & J. Wicker, Moore’s Federal

Practice © 38.07[1] (2d ed. 1985) 4

~ 7 38.31f1] (2d ed. 1985) 13

Note, The Unconstitutionality of the Victim and

Witness Protection Act Under the Seventh

Amendment, 84 Colum. L. Rev. 1591 (1984) 17

C. Wright & A. Miller, Federal Practice and Pro-

cedure, § 2301 (1971 & Supp. 1985) 4

§ 2316 (1971 & Supp. 1985) acmneeden seal 13

IN THE

Sipreme Court of the United States

OCTOBER TERM, 1985

No.

EDWARD LUNN TULL,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Petitioner Edward Lunn Tull respectfully prays that a

Writ of Certiorari issue to review the judgment and

opinion of the United States Court of Appeals for the

Fourth Circuit entered in this case.

OPINIONS BELOW

The opinion of the Court of Appeals is reported at 769

F.2d 182 and appears at Appendix (“App.”) la. The

opinion and judgment order of the District Court are

unreported and appear at App. 30a and 64a, respectively.

2

JURISDICTION

The judgment of the Court of Appeals was entered on

July 30, 1985. A timely-filed petition for rehearing and

suggestion for rehearing en banc was denied by a vote of

six to five on October 30, 1985. App. 26a. On Novem-

ber 4, 1985, a revised Order denying the petition for re-

hearing and suggestion for rehearing en banc was en-

tered, with four judges dissenting. App. 28a.’ The ju-

risdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

STATUTE AND REGULATIONS INVOLVED

The Seventh Amendment and relevant provisions of the

Clean Water Act of 1977, 33 U.S.C. §§ 1251, et seq., and

implementing regulations promulgated by the United

States Army Corps of Engineers are reprinted at App.

75a.

STATEMENT OF THE CASE

Petitioner (“Tull”) is engaged in the business of de-

veloping residential properties on the island of Chinco-

teague, Virginia. In July of 1976, Tull obtained advice

from his engineer and his attorney to insure that the

proposed work would not encroach into the Corps of

Engineers’ jurisdiction. Joint Appendix filed in the Court

of Appeals (“JA”) 941. As an additional precaution, he

requested a determination from the Corps itself—‘‘to

see if they had any objection to any work on any of the

property there—any of the filling of the property.” JA

951-952. Pursuant to his request, a jurisdictional inspec-

tion of these properties was conducted by the Corps’

Norfolk District Engineer and his staff, which included

the Chief of the Construction Operations Division, the

Chief of the Regulatory Functions Branch, the Chief of

the Waterways Inspection Branch, an employee of the

1The two sets of votes on rehearing differed in that Judge

Warriner, sitting on the original panel by designation, was not

counted when the second Order was entered.

3

Permits Branch, an employee of the Enforcement Di-

vision, and two Corps counsel. JA 663-670. The Corps

counsel, whose duties included jurisdictional determina-

tions (JA 663), confirmed that the express purpose of

the inspection was to view the work ongoing at the sites

in order to determine whether the activity was within

the Corps’ jurisdiction (JA 672) and was being carried

on without a necessary permit. JA 709.2 After being

advised by the District Engineer that fill could not be

placed at two locations, Tull proceeded with his plans as

to the remaining properties (JA 5<.u), but did not fill

the areas where he was instructed that a permit would

be required. JA 503-504, 719, 807, 838-839, 960, 962,

1383.

After the inspection, the Corps continued to monitor

Tull’s ongoing filling and construction activities by aerial

inspections and photographs. JA 1142-46. These photo-

graphs demonstrated the progress of the work, which in-

cluded pushing fill material into the Fowling Gut drainage

ditch (JA 1261, 1262, 1373, 1427, 1439-42), construction

of utilities and roads (JA 1371-72), and, ultimately, the

sale of the properties to third parties and the placement

of trailers on the lots. JA 1265-67, 1446. These improve-

ments were made at substantial expense to Tull. JA

1382.

At no time during the five years between the inspection

and the filing of the Complaint in this case did the Dis-

trict Engineer issue a cease and desist order or any

other notification that Tull’s filling activity was unau-

? The District Court conceded that the purpose of the inspection

of “defendant’s properties” was “to determine the ‘Corps’ jurisdic-

tion’ as to any filling activity to be conducted thereon.” App. 37a.

At the time of this inspection, among the properties being filled

was a drainage ditch later described in the District Court opinion

as Fowling Gut Extended, for which there was no recorded ease-

ment. JA 1171-73, 1450. The Corps personnel had confirmed from

prior aerial photographs that this ditch was being filled by Tull.

JA 484-490, 1132-39.

4

thorized (JA 961-962), even though such notice is re-

quired by the Corps’ regulations. 33 C.F.R. 209.120(g)

(12) (1975) (App. 80a) and 33 C.F.R. 362.2 (1977)

(App. 8la).* The first notice received by Tull was in

the form of findings of violation and Orders for Com-

pliance issued by the Environmental Protection Agency

in December 1980 and January 1981, and these findings

and Orders related to only a small segment of the prop-

erty being filled* JA 1242, 1247. Tull immediately

stopped filling these properties (except for some oyster

shells placed at the front face of the existing fill to ensure

its stability), and he also sought clarification of the find-

ings and Orders. JA 963-965, 1252, 1253-54.

This case began with the filing of a three-count com-

plaint on July 1, 1981. The complaint alleged that Tull

had filled wetlands adjacent to navigable waters, as de-

fined by 33 C.F.R. 323.2(c), and that these wetlands were

waters of the United States under the Clean Water Act,

33 U.S.C. §§ 1251 et seq.’

Tull demanded a jury trial under the Seventh Amend-

ment (JA 15), which was denied. JA 17.° Trial on the

$One letter from the Corps which Tull received in 1976 related

to an operation that was never carried out. JA 710-712, 729-730.

Another received in 1978 was merely a request to come onto cer-

tain property; because of a misunderstanding over which property

the Corps was referring to, the matter was dropped after Tull’s

response. JA 976-982, 1862-64.

‘Of the total penalty or fine of $325,000 ultimately imposed by

the District Court, only $5,000 related to the properties alluded to

in these findings and Orders.

‘ After the Complaint was filed, Tull was enjoined from further

filling a property which was not the subject of the original Com-

plaint. Tull immediately ceased filling this property. JA 985-986.

® The only reason that Federal Rule of Civil Procedure 38, which

also guarantees the right to jury trial, was not pressed on the

courts below is that, as the treatises make clear, the Rule is co-

extensive with the Seventh Amendment, neither adding nor de-

tracting from the rights accorded by the Amendment. See J. Moore,

-

oO

merits began in July 1982, with the court sitting without

a jury. JA 17-18. After the Government rested and Tull

sought a partial directed verdict, the Government moved

to reopen and amend, which Motion the court granted

(JA 579), and the Government’s Second Amended Com-

plaint was filed. JA 28-35. The Second Amended Com-

plaint included an alleged violation of 33 U.S.C. § 403.

App. 67a-74a.

The Judgment Order entered by the District Court

ordered Tull to pay a “penalty or civil fine” under Section

1319(d) of the Clean Water Act in the total amount of

$325,000.00. App. 64a-65a.7 The District Court offered

Tull the option of obtaining a suspension of $250,000 of

the fine by restoring the drainage ditch to its original

condition. App. 65a. The District Court refused to per-

mit Tull to relocate the drainage ditch to an alternative

location upon his Petition that restoration to its original

condition was impossible because he had sold the land to

third parties. JA 126-132. Additionally, the District

Court ordered restoration of a portion of the land by

removal of fill material. App. 65a.

Tull appealed. The Court of Appeals, in a two-to-one

decision, affirmed, finding no merit to Tull’s claim that he

had a right to a jury trial. The court held that the

Seventh Amendment right to a jury trial is limited to

suits in the nature of an action existing at common law

when the Amendment was adopted. App. 8a. The ma-

jority also rejected Tull’s claim of equitable estoppel, hold-

ing that the District Court was not clearly erroneous in

J. Lucas & J. Wicker, Moore’s Federal Practice { 38.07[1] (2d ed.

1985); C. Wright & A. Miller, Federal Practice and Procedure,

§ 2301 (1971 & Supp. 1985).

"The District Court called $75,000 of this amount a “penalty

or civil fine’ and the remaining $250,000 a “fine,” but since both

penalties were imposed pursuant to the same section of the Clean

Water Act, there was no legal distinction between them. See App.

59a.

6

finding that nothing the Government did or failed to do

misled Tull. App. 10a.

Judge Warriner, dissenting, found error in the District

Court’s denial of Tull’s demand for a jury trial. App. 19a-

25a. He further found not only that Tull had relied

upon the Corps of Engineers to his detriment, thereby in-

voking the doctrine of equitable estoppel (App. 13a-19a),

but that the action of the Government representatives in

this case “gives the appearance of lying in wait with a

calculating eye for five years after first lulling him [Tull]

into a reasonable view that his activities were acceptable;

and after he invested time, money, and effort in complet-

ing what he thought to be suitable residential lots, the

Corps with a bulging portfolio of evidence descended on

him.” App. 19a. Judge Warriner concluded that “the

ease at bar fits all the elements of equitable estoppel.”

App. 16a.

REASONS FOR GRANTING THE WRIT

The judges below were badly split in regard to the two

questions presented in this Petition, with one judge dis-

senting on the panel and four judges in the Circuit voting

to hear reargument en banc. This Court should grant

certiorari to resolve these issues, one of which has caused

a conflict in the Circuits and the other of which has been

left unresolved by this Court’s prior decisions.

1. Petitioner was entitled to a jury trial.

In this case the Government, pursuant to the Clean

Water Act, 33 U.S.C. §§ 1251, et seg., sought civil penal-

ties that could have exceeded $22 million.* Defendant

Tull requested, but was denied, a jury trial. The trial

court, sitting without a jury, imposed penalties of

* When the number of days alleged in the original Complaint to

be possible days of violation is multiplied by the maximum civil

penalty of $10,000 per day, the result is a possible total civil penalty

of $22,890,000.

7

$325,000. App. 64a-65a.° As urged at each appropriate

stage of this proceeding, the refusal to grant a jury

trial violated Tull’s Seventh Amendment rights.

In two cases during the early 1900s, this Court de-

clared that in civil suits brought by the United States to

recover penalties under the Alien Immigration Act, the

defendants were entitled to jury trials. Hepner v. United

States, 213 U.S. 103, 115 (1909) ; United States v. Regan,

232 U.S. 37, 47 (914).

Confusion was introduced in 1937, however, when the

Court discussed an NLRB order for both reinstatement

and the payment of wages for time lost by a discharge.

The Court stated that the Seventh Amendment preserved

“the right which existed under the common law when the

Amendment was adopted” but had “no application to

cases where recovery of money damages is an incident to

equitable relief * * *.” NLRB v. Jones & Laughlin Steel

Corp., 301 U.S. 1, 48 (1937). As discussed infra, this

language—to the extent that it implied that only those

rights to a jury trial which existed at common law were

entitled to Seventh Amendment protection—was later

repudiated, but it nonetheless apparently confused the

panel below. See App. 8a.

® Both the majority and dissent discussed the civil penalty im-

posed as $75,000, apparently because they believed that Tull could

restore the Fowling Gut ditch to its prior condition and thus avoid

$250,000 of the fine. Tull cannot restore the ditch, as it would

require him to dig across property he had already sold to others

prior to any Government action in this case. JA 126-132.

10 The majority below declined to follow these decisions on the

ground that the statements in them constituted merely dicta. App.

9a.

At about the same time that these two cases were decided, the

Court held that the Seventh Amendment was not violated by trans-

ferring from the courts to a rental control commission actions to

recover possession of real property. Block v. Hirsh, 256 U.S. 135,

158 (1921).

8

Almost ten years after Jones & Laughlin Steel Corp.,

the Court decided a case that is relevant here even though

it did not specifically discuss jury trials. Porter Vv.

Warner Holding Co., 3228 U.S. 395 (1946), held that a

court in equity had the power to order restitution of

rents collected by a landlord in excess of the permissible

maximum under Section 205(a) of the Emergency Price

Control Act of 1942. The Court was careful to distinguish

this restitution remedy from one for damages in the

nature of penalties under Section 205(e) of the Act.”

Such penalty actions, said the Court, would have to be

brought in a court of law rather than in a court of

equity. 328 U.S. at 401-402.

The restitution provisions applicable in the instant case,

with their own penalty provisions (criminal), appear in

the Rivers and Harbors Act, 33 U.S.C. § 406. These were

not the penalties sought by the Government in this case.

The $325,000 which Tull was ordered to pay was imposed

not as restitution but as a civil penalty or fine under the

Clean Water Act, 33 U.S.C. §$ 1819(d), similar to the

Emergency Price Control Act dealt with in Warner Hold-

ing Co.

The Court squarely held in Beacon Theatres, Inc. V.

Westover, 359 U.S. 500 (1959), that the defendant was

entitled to a jury trial, even though the original suit

was brought solely for a declaratory judgment. In an-

ticipation of a complaint seeking antitrust treble dam-

11 As the Court explained: “Restitution, which lies within that

equitable jurisdiction, is consistent with and differs greatly from

the damages and penalties which mey be awarded under § 205(e).

* * * When the Administrator seeks restitution under § 205(a), he

does not request the court to award statutory damages to the pur-

chaser or tenant or to pay to such person part of the penalties

which go to the United States Treasury in a suit by the Admin-

istrator under § 205(e). Rather he asks the court to act in the

public interest by restoring the status quo and ordering the return

of that which rightfully belongs to the purchaser or tenant.” 328

U.S. at 402.

9

ages, the prospective defendant brought suit and the

prospective plaintiff counterclaimed, raising the same

issues that would have been raised in the prospective

plaintiff’s original suit. The Court held that the pros-

pective plaintiff could not be deprived of a jury trial

simply because equitable relief had originally been sought

by the prospective defendant. Similarly, in Dairy Queen,

Inc. v. Wood, 369 U.S. 469 (1962), the Court held that

in a breach of contract suit where the plaintiff sued for

both an injunction and an accounting, the claim was one

for a money judgment, was legal in nature, and there-

fore required a jury trial.’*? And in Ross v. Bernhard,

396 U.S. 531, 537-538 (1970), the Court held in a stock-

holders’ derivative action that where equitable and legal

claims are joined in the same action, the right to a jury

trial on the legal claims cannot be infringed by trying

the legal issues as incidental to the equitable ones.

It was in this context that Curtis v. Loether, 415 U.S.

189 (1974), was decided. The Court there held that

either party was entitled by the Seventh Amendment to

a jury trial in a suit for damages under the Civil Rights

Act of 1968. The Court interpreted the language of

Jones & Laughlin Steel Corp., quoted above, to meat

merely that the Seventh Amendment “is generally in-

applicable in administrative proceedings” (id. at 194), but

that “when Congress provides for enforcement of statu-

tory rights in an ordinary civil action in the district

courts,” a jury trial must be available. Jd. at 195. Even

though the Civil Rights Act defined a new legal duty, the

awarding of damages sounded basically in tort. 7d. The

Court went on to distinguish the Warner Holding Co.

situation regarding reinstatement and backpay—although

12 The Court held in Parklane Hosiery Co. v. Shore, 439 U.S. 322,

333-337 (1979), that an equitable determination by a court can

have collateral estoppel effect in a subsequent legal action without

violating the Seventh Amendment. See also Katchen v. Landy, 382

U.S. 323, 339 (1966).

10

it refused to decide whether a jury trial would there be

required. Id. at 196-197. It pointed out that there are

substantial differences between restitution, involving a

court’s equitable jurisdiction, and damages. /d.*°

In Pernell v. Southall Realty, 416 U.S. 363 (1974),

the Court held that the Seventh Amendment entitled

either party to a trial by jury in a suit to recover the

possession of real property, particularly since a similar

right was protected at common law. But whether or not

the statutory right established by Congress was a close

equivalent of the common law right, the Seventh Amend-

ment was applicable because “the action involves rights

and remedies of the sort traditionally enforced in an

action at law, rather than in an action in equity or

admiralty.” Id. at 375. The Court interpreted Block v.

Hirsh, supra n.10, merely to mean that the Amendment

“is generally inapplicable in administrative proceedings.”

Id. at 383.

Finally, in Atlas Roofing Co. v. Occupational Safety

and Health Review Comm’n, 430 U.S. 442 (1977), the

Court dealt with a statutory scheme whereby Congress

gave to an administrative agency the right to impose

civil penalties on an employer maintaining any unsafe

working condition. The Court held that where the Gov-

ernment sues in its sovereign capacity to enforce “public

rights” created by federal statutes, the Seventh Amend-

ment does not “prohibit Congress from assigning the fact-

finding fumetion and initial adjudication to an adminis-

trative forum with which the jury would be incompati-

13 Following / oether, the lower courts have recognized that “the

Seventh Amendment clearly requires trial by jury even in actions

unheard of at common law where they involve rights and remedies

of the nature of those traditionally involved in an action at law

(rather than in an action at equity or in admiralty).” United

States v. Dudley, 739 F.2d 175, 178 (4th Cir. 1984). See also Quinn

v. Digiulian, 739 F.2d 637, 645-647 (D.C. Cir. 1984), and cases there

cited.

11

ble.” ** The Court stressed the importance of the forum

where the factfinding takes place (id. at 458-61), and it

again interpreted Jones & Laughlin Steel Corp. to mean

that the Seventh Amendment is generally inapplicable to

administrative proceedings. Jd. at 454-455."

Following Atlas Roofing Co., the Courts of Appeals

have denied jury trials in actions involving claims his-

torically considered equitable in nature,’® where Congress

has assigned decision-making to private arbitration pro-

ceedings,'’ where the sole question relates to the enforce-

ment of a decree in a class action,’* and where an ad-

144Jd. at 450 (footnote deleted; emphasis added). The Court

declined to decide, and apparently reserved, the question necessarily

presented in the instant case of whether the Seventh Amendment

has no application to all Government litigation involving fines. /d.

at 449 n.6. The Court further refined the “ ‘public’ right” concept,

but without relation to jury trials, in Thomas v. Union Carbide

Agricultural Products Co., 105 S. Ct. 3325, 3337 (1985). See also

id. at 3341-42 (Brennan, J., concurring).

15 Because of the doctrine of sovereign immunity, the Court

has also held that a jury trial is not required in suits against the

United States. Lehman v. Nakshian, 453 U.S. 156 (1981); Galloway

v. United States, 319 U.S. 372, 388-389 (1943).

16 Phillips Vv. Kaplus, 764 F.2d 807, 813-814 (11th Cir. 1985)

(accounting of a partnership) ; see also Gartenberg v. Merrill Lynch

Asset Management, Inc., 487 F. Supp. 999, 1001-08 (S.D.N.Y.

1980).

17 E.g., Keith Fulton & Sons, Inc. v. New England Teamsters &

Trucking Industry Pension Fund, 762 F.2d 1124, 1131-32 (1st Cir.

1984) (Multiemployer Pension Plan Amendments Act); Board of

Trustees V. Thompson Building Materials, Inc., 749 F.2d 1396,

1404-06 (9th Cir. 1984), cert. denied, 105 S.Ct. 2116 (1985)

(same); Terson Co. v. Bakery Drivers & Salesmen Local 194, 739

F.2d 118, 121 (3d Cir. 1984) (same); Textile Workers Pension

Fund v. Standard Dye & Finishing Co., 725 F.2d 843, 854-855 (2d

Cir.), cert. denied, 104 S.Ct. § 3554 (1984) (same).

18 In re Corrugated Container Antitrust Litigation, 752 F.2d 137,

143-145 (5th Cir.), cert. denied, 105 S.Ct. 3536 (1985).

12

ministrative agency itself determines reparations claims.”

None of these cases, of course, even remotely governs

this one.

More to the point, the defendant in a penalty suit

brought by the Federal Aviation Administration under

the Federal Aviation Act, 49 U.S.C. § 4171(a) (1), which

subjects any one who violates the Act to a civil fine not

to exceed $1000 for each violation, has been accorded a

jury trial even though the Act does not provide for one.

See FAA v. Landy, 705 F.2d 624, 627, 635 (2d Cir.),

cert. denied, 464 U.S. 895 (1983). The Tenth Circuit has

refused to deny a jury trial in a suit by the United

States for declaratory and injunctive relief and for the

recovery of taxes. United States v. New Mevxico, 642

F.2d 397, 402 (10th Cir. 1981). And alleged violations

of the Bill of Rights of the Labor Management Report-

ing and Disclosure Act, 29 U.S.C. §§ 411, 529, have been

held to be triable before a jury even though the claims

were primarily equitable in nature. Quinn v. DiGuilian,

739 F.2d at 645-646.

However, the case that most closely resembles the in-

stant one is United States v. J. B. Williams Co., 498

F.2d 414 (2d Cir. 1974), and the decision below is

squarely in conflict with Judge Friendly’s careful and

thorough analysis and decision for the Second Circuit

in that case. There, the Federal Trade Commission asked

the Attorney General to seek penalties against a company,

pursuant to 15 U.S.C. § 45(1), for violation of a cease

and desist order. In a lengthy opinion that dealt with

all relevant cases, Judge Friendly concluded that the

company was entitled to a jury trial.

He rejected the notion that the action was comparable

to one seeking an order for civil contempt, which con-

19 Myron Vv. Hauser, 673 F.2d 994, 1001-05 (8th Cir. 1982);

Rosenthal & Co. v. Bagley, 581 F.2d 1258, 1261 (7th Cir. 1978).

However, the courts have refused to by-pass jury trials where the

action was for a statutory forfeiture. E.g., United States v. One

1978 Mercedes Benz 280S, 618 F.2d 453, 458-469 (7th Cir. 1980).

13

cededly did not entitle the defendant to a jury trial. 498

F.2d at 424-425. He pointed out that while Congress

could have granted the Commission itself the power to

impose penalties, subject to limited judicial review, it had

not done so. Jd. at 430. Pointing to numerous lower court

decisions, he stated that “actions for statutory penalties

have been held to entail a right to jury trial, even though

the statute is silent, both where the amount of the

penalty was fixed and where it was subject to the dis-

cretion of the court * * *.” Id. at 423 (footnote deleted).

He concluded: “if in authorizing a civil suit by the chief

law officer of the Government, a procedure which had

always been thought to entail a right of jury trial, Con-

gress had wished to withhold it (assuming arguendo that

it could), Congress would have said so in unmistakable

terms and not left this as a secret to be discovered many

years later.” Jd. at 424-425. Like the statute at issue

in J.B. Williams Co.,. the Clean Water Act contains not

a word of legislative history indicating that Congress

intended for proceedings under the Act to be governed

solely by equitable, as opposed to common law, principles,

or for a jury trial to be denied. Cf. Curtis v. Loether,

415 U.S. at 192. And where the statute is silent, the

result is clear.

Professor Moore agrees with the reasoning of Judge

Friendly. He flatly states that “there is a right of jury

trial when the United States sues to collect taxes or to

collect a penalty, even though the statute is silent on the

right of jury trial.” J. Moore, J. Lucas & J. Wicker,

Moore’s Federal Practice { 38.31[1] at 38-235-38-236

(2d ed. 1985). See also C. Wright & A. Miller, Federal

Practice and Procedure, § 2316 at 79 (1971 & Supp.

1985).

We recognize, of course, that this Court has retreated

from the early formulation that the Seventh Amendment

was meant to embrace “all suits which are.not of equity

and admiralty jurisdiction, whatever may be the peculiar

14

form which they may assume to settle legal rights.” Par-

sons V. Bedford, 28 U.S. 433, 447 (1830). The Court has

ruled that where Congress both creates the right to sue

and establishes an administrative forum for the determi-

nation of that right, the Seventh Amendment does not

apply because “the right to a jury trial turns not solely

on the nature of the issue to be resolved but also on the

forum in which it is to be resolved.” Atlas Roofing Co.,

430 U.S. at 460-461. However, the Court has never held

that where Congress creates the legal right but allows the

remedy to be determined in an ordinary court of law, a

jury trial can be denied. Curtis v. Loether, in fact, held

to the contrary.

The Second Amended Complaint in this case, which

appears at App. 67a-74a, leaves no doubt as to the nature

of the action brought by the Government and the forum

in which it was to be adjudicated. The Complaint was

lodged in Federal District Court and alleged that “[t]his

is a civil action” instituted to obtain injunctive relief and

“the imposition of civil penalties.” App. 67a. It charged

that Section 309(d) of the Clean Water Act provides for

“a civil penalty not to exceed $10,000 per day” for any

one who violates the Act (App. 68a); it thereafter cited

this Section three times as the source of the relief sought

(paras. 12, 18, 24, App. 69a-7la); and it in fact asked

the District Court to “assess[] civil penalties in the

amount of $10,000 per day for each violation * * *.”

App. 72a. The Complaint also sought an injunction and

an order directing Tull “to restore” the wetland areas

(App. 72a), even though at the time of the Complaint he

no longer owned almost all of the property. The Com-

plaint was issued by the United States Attorney, an

Assistant United States Attorney, and an attorney for

the Land and Natural Resources Division of the Depart-

ment of Justice. App. 72a-73a.

To say that this Complaint initiated an action in Dis-

trict Court that was equitable in nature would be a gross

15

perversion of the facts. The penalties were not an

adjunct of, or incidental to, equitable relief; *' the so-called

equitable relief was a catch-all remedy, almost wholly

moot at the time of the action, which was incidental to

the imposition of fines and penalties. If this action was

sufficiently “equitable” to defeat a request for a jury, a

jury trial can be thwarted in any action in any court for

damages, fines, or penalties simply by the addition of a

conclusory request for an injunction.

‘Moreover, regardless of whether the injunction was in-

cidental to damages or vice versa, this is the wrong test.

It is precisely the one rejected by this Court in Dairy

Queen, where the District Court regarded the claim for

a money judgment as “incidental” to the injunctive relief

sought, and this Court held that under Beacon Theatres,

entitlement to a jury trial “applies whether the trial

judge chooses to characterize the legal issues presented

as ‘incidental’ to equitable issues or not.” 369 U.S. at 473.

A suit for civil penalties is a legal action, in the nature

of an action in debt, and not an equitable one.*? And it

is precisely this kind of legal action that entitles the de-

fendant to a jury trial. Here, the District Court acknow]l-

edged that it was sitting in law as well as in equity.

App. 59a.

Even the Court of Appeals did not try to characterize

this as an equitable action with a penalty adjunct. In-

2° Historically, courts of equity had no power to impose civil pen-

alties. Such penalties were not part of the “remedies, procedures

and practices” evolving from the English Court of Chancery. See

Sprague Vv. Ticonic National Bank, 307 U.S. 161, 164-166 (1939).

21 In fact, the injunctive relief provisions of the Clean Water Act,

33 U.S.C. § 1319(b), are in an entirely different subsection of the

Act from the civil penalty provisions, 32 U.S.C. §13819(d). Cf.

Warner Holding Co., 328 U.S. at 402.

2 EF .g., United States v. Regan, 232 U.S. at 46-47; United States

v. Stevenson, 215 U.S. 190, 197-199 (1909); Whitehead v. Shattuck,

138 U.S. 146, 151 (1891).

16

stead, apparently recognizing that the penalties were what

this case was all about, the court tried to explain its de-

cision by saying that the Government was not suing here

to “collect a penalty analogous to a remedy at law” but

instead was “asking the district court to exercise statu-

torily conferred equitable power in determining the

amount of the fine.” App. 9a. This is simply inexplicable.

The determination of the amount of a penalty or fine

is precisely what an action at law seeks. The action does

not become equitable because the amount oi the penalty

must be determined by the factfinder. Here, the Govern-

ment sought penalties of up to $10,000 a day, and the

court imposed penalties totaling $325,000. To treat that

determination of damages as “equitable” would turn

virtually every lawsuit into one without a jury.

The implications of the decision below are thus enor-

mous. We have found, and have listed in Appendix G

(App. 82a-100a), some 225 federal statutory sections

that grant the Government the right to seek civil penal-

ties or fines in varying amounts but that do not repose

in an administrative agency in the first instance the right

to' determine, impose and collect those penalties or fines.

Of these statutory sections, approximately 195 have been

enacted since October 18, 1972, when the Clean Water

Act became law. This represents more than a seven-fold

increase in federal statutes imposing civil penalties within

the last 13 years. This dramatic increase demonstrates

that the jury trial issue will be a constantly recurring

one and that the decision below will affect proceedings

and trials far beyond the confines of the Clean Water

Act.

That the issue is Jikely to recur is illustrated by a case

which was decided subsequent to the decision below and

which also dealt with the Clean Water Act. In United

States v. M.C.C. of Florida, Inc., 772 F.2d 1501 (11th

Cir. 1985), the District Court ordered the payment of

$200,000 in damages to be used in restoration areas of

17

south Florida and a $20,000 fine after finding that the

propellers of a construction company’s tug boat stirred

up bottom sediment which was then deposited on ad-

jacent sea grass beds. This was held to constitute a

“discharge of a pollutant” within the meaning of the

Clean Water Act. The Eleventh Circuit, citing three of

this Court’s cases that were wholly off the mark,” as well

as the decision in the instant case, concluded that both

the Clean Water Act and the Rivers and Harbors Act

were “equitable in nature,” and therefore the defendant

was not entitled to a jury trial. Jd. at 1507. We have

been advised by counsel for M.C.C. of Florida, Inc., that

certiorari is being sought in that case.

We know that we need not argue to this Court the

importance of the right to a jury, because the Court

itself has emphasized that importance on a number of

occasions.** We need only add here that to deny a jury in

a case where a trial judge imposes $325,000 in fines and

penalties on the ground that the action is “equitable” in

nature is such a perversion of justice that this Court

should not allow it to stand. Congress could have given

23 United States v. Republic Steel Corp., 362 U.S. 482 (1960),

held that it was proper under the Rivers and Harbors Act of 1899

to enjoin the respondent companies from depositing industrial

solids in a river and that they could be ordered to restore the depth

of the channel by removing portions of the existing deposits.

Wyandotte Transp. Co. v. United States, 389 U.S. 191 (1967),

involved two admiralty cases which permitted the Government to

recover the cost of removing sunken vessels. Weinberger v. Romero-

Barcelo, 456 U.S. 305 (1982), held that the Navy could be enjoined

from discharging ordinance into waters without a permit or Presi-

dential exemption. None of these cases involved the imposition

of civil penalties or the right to trial by jury. They went no further

than to impose specific equitable relief provided for by the statutes

involved.

2% F.g., Beacon Theatres, Inc. Vv. Westover, 359 U.S. at 501;

Jacob v. City of New York, 315 U.S. 752, 753 (1942): Dimick v.

Schiedt, 293 U.S. 474, 486 (1935). See also Kirst, Administrative

Penalties and the Civil Jury: the Supreme Court's Assault on the

Seventh Amendment, 126 U. Pa. L. Rev. 1281, 1338-43 (1978).

an administrative agency the power to impose penal-

ties under the Clean Water Act.* It chose not to do so.

The traditional right to jury trial, therefore, should

?

2. Equitable estoppel runs against the Government and

should be applied in this case.

This Court has held that the particular facts in eacn us

f rise to the level necessary to

ppel against the Government.** However, the

Court has left open the question of whether estoppel can

cases did not

a sSecriics VY

Work an eSto

run against the Government in a proper case.*’ Justice

Rehnquist most recently in Heckler v. Community Health

Services, 104 S.Ct. at 2228, made it clear that the ma-

jority’s decision did not foreclose equitable estoppel against

the Government in an appropriate case.

The Court in Heckler noted a number of instances in

which it was held that the Government, after acting in

“misleading ways,” could not then enforce the law in a

25 See, Note, The Unconstitutionality of the Victim and Witness

Protection Act Under the Seventh Amendment, 84 Colum. L. Rev.

1591, 1599 (1984).

26 Montana Vv. Kennedy, 366 U.S. 308, 314-315 (1961); JNS Vv.

Hibi. 414 U.S. 5, 8 (1973); Schweiker v. Hansen, 450 U.S. 785,

788 (1981); INS v. Miranda, 459 U.S. 14, 19 (1982); Heckler vy.

Community Health Services, 104 S. Ct. 2218 (1984).

27 “Petitioner urges us to expand this principle into a flat rule

that estoppel may not in any circumstances run against the Gov-

ernment. We have left the issue open in the past, and do so again

today. Though the arguments the Government advances for the

rule are substantial, we are hesitant, when it is unnecessary to

decide this case, to say that there are no cases in which the public

interest in ensuring that the Government can enforce the law free

from estoppel might be outweighed by the countervailing interest

of citizens in some minimum standard of decency, honor and relia-

bility in their dealings with their Government.” Heckler, 104 S. Ct.

at 2224 (footnotes deleted; emphasis in the original).

19

harmful! manner. /d. at 2225 nn. 12 and 13.*%* We sub-

mit that the instant case is one where, in the Govern-

ment’s dealings with Tull, there was not even the “mini-

mum standard of decency, honor and reliability,” referred

to in Heckler. See supra n. 24. Judge Warriner’s dissent

sets out in detail why, under the facts of this case, equi-

table estoppel should be invoked. App. 13a-19a. We would

simply add that what happened to Tull in this case is not

fair, and in the final analysis the doctrine of equitable

estoppel is a doctrine of fairness—one which must be

used to ensure that justice is done.

Unfortunately, those cases in which this Court has

previously dealt with the issue of equitable estoppel

against the Government have been factually flawed. In

Montana v. Kennedy, there was a failure to issue a pass-

port in 1906 at a time when a passport was not required

for the citizen to return to the United States. In JNS v.

Hibi, the failure was to publicize rights or to station an

authorized naturalization representative in the Philip-

pines. Schweiker v. Hansen involved reliance upon a

claims manual which was not a regulation and therefore

had no legal force to bind the Government; in fact, appli-

cation of the doctrine of equitable estoppel would itself

have brought about an unfair result. And in Heckler,

equitable estoppel would have resulted in Community

Health Services keeping money paid to it by mistake.

The facts of the instant case are far more compelling

than in any of these other situations.

The majority and the dissent in the court below saw

this case in diametrically opposite ways; unfortunately,

only the dissent saw the unfairness and injustice that

resulted. The jurisdictional inspection requested by Tull

in July of 1976 was made by the District Engineer and

eight members of his staff, including two attorneys. The

* Since Heckler, one Circuit has refused to allow dismissal of a

case on the ground that the Government could not be estopped.

Reeves Vv. Guiffrida, 756 F.2d 1141, 1144-45 (5th Cir. 1985).

20

majority below disregarded the fact that the precise pur-

pose of this inspection was to make jurisdictional de-

terminations and to determine whether permits were

needed. App. 13a; JA 672, 709. The majority cited to

Tull’s failure to have available a development plan (App.

lla) but made no mention of the fact that at the time of

the inspection Tull was in the process of filling the drain-

age ditch for which the District Court imposed $250,000

of the $325,000 in civil fines, so that irrespective of the

existence of a development plan, the work was being done

before the District Engineer’s eyes. JA 568. Also ignored

were compliance with the instructions received and the con-

tinued surveillance of his property tu. five years after

the inspection. The finding that nothing the Government

did or failed to do misled Tull wholly ignored the site

visit, the continuing surveillance, and the correspondence

between the parties. Finally, the majority did not even

address the Corps’ failure to issue the required Cease and

Desist Order mandated by its own regulations, 33 C.F.R.

§ 209.120(g) (12) (1975) and 33 C.F.R. § 326.2 (1977)—

a fact significant enough to be discussed by this Court in

Schweiker, 450 U.S. at 789. The Court there pointed out

that the Claims Manual relied on in that case was “not

a regulation. It has no legal force, and it does not bind

the SSA.” Jd. Here, however, we do have regulations.

The failure of the District Engineer to issue a Cease and

Desist Order mandated by his own regulations does have

legal force and should bind the Corps.”

2° The majority also disregarded the undisputed fact that at the

time of the jurisdictional inspection by the District Engineer and

his staff, Tull was filling the area immediately adjacent to Fowling

Gut and the drainage ditch which emptied into Fowling Gut. Since

he was not advised that this activity required a permit, it was

certainly not unreasonable for him to believe that no permit was

necessary when he was filling isolated low areas in the pine trees

a great distance from Fowling Gut. The majority of the punish-

ment imposed in this case, $250,000, was for filling the drainage

ditch which the District Engineer observed being filled. The Dis-

trict Engineer did not advise Tull that a permit was required to fill

that ditch, while at the same time advising him that a permit was

required in another area.

21

We submit that the record clearly supports the dis-

sent’s view of this case, and even the majority’s version

raises the very issue it said it was not deciding. That is,

it is clear from both versions that Tull, in good faith,

thought he could proceed with the development of his

property. JA 566. He certainly did not act in silence or

in secret. It was precisely because of Tull’s prior litiga-

tion with the Corps that he not only relied upon his

attorney and his engineer, but he arranged the inspec-

tion.to determine that his project was not within the

Corps’ jurisdiction and did not require a permit. JA 951-

952. Regardless of how one views the Corps’ inspection

and what was or was not said, one thing is indisputably

clear: Tull was filling the property, the filling was visible

for all to see, and unless he was told otherwise, he planned

to proceed. Nor is there any dispute about the Corps’

general knowledge of the ongoing filling of the land,

regardless of whether the Corps thereafter entered the

property rather than observing it from the air. The Gov-

ernment experts at trial had no difficulty reviewing the

same aerial photographs taken by the Corps over this

period and testifying that wetlands had been filled in

violation of the law. In spite of this overwhelming evi-

dence, the majority chose to attribute no culpability to

the Government. The dissent did, and the dissent was

correct.*°

We submit that this case is an appropriate one to de-

cide the question previously left open of whether equitable

estoppel runs against the Government. The Court should

hold that because of the reprehensible conduct of the Gov-

ernment and the extent to which Tull, as Judge-Warriner

put it, was “lulled” into the activity for which he was

then fined, the Government should have been equitably

estopped from suing him.

9 In this regard, the instant case is a far more egregious exam-

ple of detrimental reliance and equitable estoppel against the Gov-

ernment than Payne v. Block, 751 F.2d 1191 (11th Cir. 1985),

where certiorari has been granted. 54 U.S.L.W. 3223 (Oct. 2, 1985,

No. 84-1948).

22

CONCLUSION

For the reasons outlined above, certiorari should be

granted and the judgment below reversed.

Respectfully submitted,

RICHARD R, NAGEOTTE *

NAGEOTTE, BORINSKY & ZELNICK

14908 Jefferson Davis Hwy.

Woodbridge, Virginia 22191-3997

(703) 491-4136

* Counsel of Record

Of Counsel:

E. BARRETT PRETTYMAN, JR.

HOGAN & HARTSON

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

(202) 331-4685