Petition for Writ of Certiorari — Air Liquide America L. P., Fka Air Liquide America Corp. v. United States Army Corps of Engineers
Supreme Court brief2004
Ask Donna
What actually matters in this document.
Text
Supreme Court, U.8.
(’) FILED
No. Q4 14 JUN 3.0 2008
—_— Ae
2 C
IN THE
Supreme Court of the United States
AIR LIQUIDE AMERICA L.P., et ai.,
Petitioners,
v.
U.S. ARMY CORPS OF ENGINEERS and
PORT OF HOUSTON AUTHORITY OF
HARRIS COUNTY, TEXAS,
Respondents.
On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CourRT OF APPEALS
FOR THE FirtuH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
—
WILLIAM J. Boyce
Counsel of Record
Ossorne J. Dykes, III
Davip WILKs CoRBAN
FULBRIGHT & JAWORSKI L.L.P.
1301 McKinney, Suite 5100
Houston, TX 77010 iy
(713) 651-5151
Counsel for Petitioners
187967 ce
COUNSEL PRESS
(800) 274-3321 + (800) 359-6859
| teh than! AER LRM oh 1A toa ts FO
1
QUESTIONS PRESENTED FOR REVIEW
1. Did the Fifth Circuit violate the Water Resources
Development Act of 1986 (“WRDA-86”) by allowing the
U.S. Army Corps of Engineers to impose substantial non-
federal costs for a federal-state navigation project on private
pipeline owners?
2. Did the Fifth Circuit improperly defer to an
application of WRDA-86 adopted by the U.S. Army Corps
of Engineers to thwart congressional intent that allocation
of non-federal costs between the Port of Houston and private
pipeline owners should be determined by state law?
il
LIST OF PARTIES
The petitioners are Air Liquide America L.P., f/k/a
Air Liquide America Corporation; Chevron Phillips Chemical
Company LP, f/k/a Chevron Chemical Company LLC;
Chevron Pipe Line Company d/b/a ChevronTexaco Pipeline
Company; EGP Fuels Company; Shell Pipeline Company LP,
f/k/a Equilon Pipeline Company LLC; Florida Gas
Transmission Company; Houston Pipe Line Company LP,
f/k/a Houston Pipe Line Company; HSC Pipeline Partnership,
L.P.; Seadrift Pipeline Corporation; TEPPCO Crude Oil, L.P.,
f/k/a TEPPCO Crude Oil, LLC; TE Products Pipeline
Company, Limited Partnership; Texas Eastern Transmission,
LP, f/k/a Texas Eastern Transmission Corporation; UCAR
Pipeline Incorporated; Black Marlin Pipeline Company;
Kinder Morgan Tejas Pipeline, L.P., f/k/a Tejas South Pipeline
Partnership; and Kinder Morgan Tejas Pipeline, L.P., f/k/a
Tejas Ship Channel, LLC.
The respondents are the U.S. Army Corps of Engineers
and the Port of Houston Authority of Harris County, Texas.
Dynegy Midstream Services, Limited Partnership,
ExxonMobil Pipeline Company f/k/a Exxon Pipeline
Company, Air Products, L.P. f/k/a Air Products, Incorporated,
and Air Products Manufacturing Corporation were appellees
below; they are not among the petitioners and therefore are
identified as respondents in this petition.
1 Sabiataaed ta Seti
iil
DISCLOSURE STATEMENT FOR
CORPORATE PETITIONERS
Petitioner Chevron Pipe Line Company d/b/a
ChevronTexaco Pipeline Company is wholly owned by
ChevronTexaco Global Energy Inc., an indirect subsidiary
of Texaco Inc. and ChevronTexaco Corporation.
Petitioner EGP Fuels Company is wholly owned by
Enron Corp.
Petitioner Florida Gas Transmission Company is wholly
owned by Citrus Corp.
Petitioner Seadrift Pipeline Corporation is wholly owned
by Union Carbide Corporation.
Petitioner UCAR Pipeline Incorporated is wholly owned
by Union Carbide Corporation.
Petitioner Black Marlin Pipeline Company is wholly
owned by Williams Field Services Group, Inc.
iv
TABLE OF CONTENTS
Questions Presented for Review ................
Fe ger Tee ee Tee re ey ee er er
Disclosure Statement for Corporate Petitioners ...
Se er GI 6 ick Sw ok awe ead eee ewes
ee IE I 55 8 a 000 ee eee
RN BINNIE ona 5554 ke ncndvansaeeueenees
eee ree
Statutory Provision Involved ..................
UUM OF TNE GOS: ov ng ne bc acns xatenneacdes
A. Congress Enacted WRDA-86 To Allocate
Costs For Navigation Projects Between The
Federal Government And Local Sponsors
eee 2 GCE OREO OHA SDD ED BR ORE EDO OTE SE DO 8 OD
B: WRDA-86 Defers To State Law To Determine
Payment Of Relocation Costs ............
C. The Corps Acknowledged That Under
WRDA-86 The Port Had To Pay For Utility
Relocations Required To Deepen And Widen
SE ok 60s cons Cen tense ees
Page
iV
Vil
- pron *
iil ents ie RINE ASO Laie ieee C0
Contents
D. At The Port’s Behest, The Corps Reversed
Its Longstanding Position On Who Must Pay
For Utility Relocations ...-----+++777"""
Contrary To WRDA-86, The Corps Ordered
Utility Pipeline Relocations “At Owner
De 555i
The Fifth Circuit Allowed The Corps To
Impose The Full Expense Of Utility
Relocations On Owners ...-----s srr?
Reasons for Granting the Petition ....----++++°°
I.
The Fifth Circuit Improperly Allowed The
Corps To Decide Cost Issues Between
Non-Federal Parties In Contravention Of
Congressional Intent And WRDA-86 ....---
A. Congress Chose State Law To Allocate
Non-Federal Expenses Among Non-
Federal Entities ...----++sss00tttt
B. The Fifth Circuit’s Analysis Thwarts
Congressional Intent And Contravenes
Principles Of Federalism ...------+°:
1. The Fifth Circuit endorsed use of the
navigational servitude to trump
congressional intent ..------+-*°
Page
11
15
17
v1
Contents
Page
2. The Fifth Circuit opinion renders
WRDA-86’s cost-sharing formulas
POUIIS o. gk ke 20
3. The Fifth Circuit’s ruling also
contravenes federalism principles
nie ok io8 dekek ge eeace ek eOe 22
Il. The Fifth Circuit Erred In Deferring To An
Agency Application Of WRDA-86 That
Subverts Clear Congressional Intent To
Make The Port Responsible For Utility
| PETE ee oe ee eee 23
A. The Corps’ Application Of WRDA-86
Contravenes Congressional Intent .... 23
B. The Corps’ New Interpretation Of
WRDA-86 Should Be Rejected In The
Absence Of A Clear Indication Of
Congress’ Desire To Expand The
Navigational Servitude ............. 25
COMGINIDIR 6.6 so 0.0 s5aknauene ener eee 27
‘tds
EERE EE CO Ae ee EEN
Vil
TABLE OF CITED AUTHORITIES
Page
CASES
Air Liquide America Corp.v. U.S. Army
Corps of Engrs,
S50 F356 S58 OF) nk 6 aa ge vaasecas 1
Bureau of Alcohol, Tobacco & Firearms
v. Federal Labor Relations Auth.,
a Pe ere reer re 22
Chevron U.S.A., Inc. v. Natural Res.
Def. Council, Inc.,
ype ek Se sah) | rewire 13, 14, 24-25
Christensen v. Harris County,
SES ey Te | ee ree 24
Dunn v. Commodity Futures Trading Comm'n,
STO Ui GP LENO ED 6 kee ead Maw vey es ¥eaenen’s 21
FDIC v. Faulkner,
991 F.2d 262 (Sth Cir: 1993) .........00000:- 20
Federal Labor Relations Auth. v.
Aberdeen Proving Ground,
Pe fh rrr Taree ere Ter Tere 21
General Dynamics Land Sys., Inc. v. Cline,
124 S. Ct. 1236 (Feb. 24, 2004) ......°.... 13-14, 25
Gibson v. United States,
SR We Fh 2) errr er ee 18
Vill
Cited Authorities
Page
Goodyear Atomic Corp. v. Miller,
ees BP OUD 6c 50 6 cunt e kak ween ews 20
Lambert Gravel Co. v. J.A. Jones Constr. Co.,
ge Rok Ee a | reer 18, 20
Penn Dairies, Inc. v. Milk Control Comm’n,
ee Ce ee Co oa oak Cae ee eee eeu 22
Solid Waste Agency v. United States Army
Corps of Eng’rs,
ee Se et CE id sek Vee haencans 14, 25, 26
St. Louis, ILM. & S. Ry. v. United States,
re BUS fl ee ere 20 -
Texas v. United States,
ee ets Ce | rere 22
United Texas Transmission Co. v. United States
Army Corps of Eng’rs,
ae Fo Ce Be 19
STATUTES
Be Ais, & STEED hn 9 09 oe hee e eden eines 1
Oe Wee ee ee i ke va ho dene e es 25
Be Urs EE ew ead eee kee eee enea 3
cg RE oe: | See ere reer ene) 2
1x
Cited Authorities
: Page
33 U.S.C. § 2211 (a)(1) 00... eee eee. Pees 4
oe Nite: © EEO nos hak bh cds bane’ 4,10, 15, 16
Pe es RET v5 cade oh ede en ancue en, 9
Pe Tr Oo is ch cs oe ee ee 3
Pe nes oc) ee ee ek 3
SE UBL. § 19G2E-SOR) . occ cece cee ecss 9
Tex. WATER CoDE ANN.
§ 60.102(a) (Vernon 1988) ................. passim
REGULATIONS
Io CP. § SOP. DONA) ow icc cncecvssces 25
MISCELLANEOUS
H.R. Conr. Rep. No. 99-1013 (1986) ........... passim
S. Rep. No. 104-170, et seg. ...... 0.0... cece. 20
Water Resources Development Act of 1996
Pub. L. No. 104-303, 110 Stat. 3658 .......... 8
Or. Tex. Att’y Gen. No. MW-412 (1981) ........ 16
TABLE OFAPPENDICES
Appendix A — Opinion Of The United States Court
Of Appeals For The Fifth Circuit Filed January
OR eee, CRETE Te Leer Te ere
Appendix B — Opinion, Order And Judgment Of
The United States District Court For The Southern
District Of Texas Entered January 25,2002 ....
Appendix C — Order Of The United States Court
Of Appeals For The Fifth Circuit Denying Petition
For Rehearing Filed April 1, 2004 ............
Appendix D — Relevant Statute ...............
Page
la
18a
l
This petition seeks a writ of certiorari to review a
decision of the United States Court of Appeals for the Fifth
Circuit.
OPINIONS BELOW
The trial court’s opinion on summary judgment is
unpublished. The trial court’s opinion and judgment were
entered in Civil Action No. H-98-3982, Air Liquide America
Corp., et al. v. U.S. Army Corps of Engineers, et al., in the
United States District Court for the Southern District of
Texas, Houston Division. See Pet. App. at 18a-27a.!
The court of appeals’ opinion is published as Air Liquide
America Corp. v. U.S. Army Corps of Engineers, 359 F.3d
358 (Sth Cir. 2004). See Pet. App. at la-17a.
STATEMENT OF JURISDICTION
The judgment of the United States Court of Appeals for
the Fifth Circuit sought to be reviewed was entered on
January 30, 2004. A petition for rehearing en banc was timely
filed. The petition was denied on April 1, 2004. See Pet. App.
at 30a-3 1a.
This Court has jurisdiction under 28 U.S.C. § 1254(1).
1. The vecord on appeal consists of multiple bound volumes of
pleadings prepared and sequentially numbered by the district court
clerk. The record is cited in this petition as “__R.__,” citing first by
volume and then by page. The appendix to the petition for writ of
certiorari is cited as “Pet. App.”
2
STATUTORY PROVISION INVOLVED
The relevant portions of 33 U.S.C. § 2211 are reproduced
in the appendix to this petition. See Pet. App. at 32a.
STATEMENT OF THE CASE
The petitioners own or operate dozens of transmission
pipelines that cross under the Houston Ship Channel
(“Channel”). Owners’ pipelines operate in both interstate and
intrastate commerce transporting crude oil, natural gas,
refined products, liquefied petroleum gases, industrial gases,
and chemicals under the Channel. 2R.247. Each pipeline
holds a permit from the Corps. 14R.3640-3811; 22R.5603-
5606; 22R.5638-5641; 22R.5655-5656.
The Houston-Galveston Navigation Channel, Texas
Project (“Project”) necessitated relocation of pipelines so that
the Channel can be deepened and widened. 1R.5781. By the
Corps’ count, the Project required relocation of 123 pipelines
at an aggregate cost of at least $115 million. 8R.1966-1968,
2113. Owners’ pipelines were included in this total. /d.
The Corps sent “Notice to Remove” letters to Owners at the
Port’s urging, ordering Owners to relocate their pipelines at
their own expense. 1R.5781.
This directive to relocate at Owners’ expense runs
directly counter to congressional intent as stated in WRDA-
86. Relying on the Corps’ ability to invoke the navigational
servitude to compel relocation, the Fifth Circuit erroneously
allowed the Corps to seize control of the cost allocation issue,
improperly expanding the navigational servitude and directly
contravening congressional intent. Pet. App. at 9a-14a.
RRR ia cease eS
3
A. Congress Enacted WRDA-86 To Allocate Costs
For Navigation Projects Between The Federal
Government And Local Sponsors
The Channel has been widened or deepened several times
since its creation in the late nineteenth century. A feasibility
study completed in 1987 advocated deepening the Channel
to 50 feet. This proposal roughly coincided with the
enactment of WRDA-86, now codified at 33 U.S.C. §§ 2201
et seq. WRDA-86 broke with a history of ad hoc commitment
of federal dollars to navigation projects and established a
uniform policy of cost-sharing with local sponsors on future
navigation projects.
Under WRDA-86, projects for harbor and navigation
channel construction require sponsorship and financial
commitment not only from the federal government, but also
from a local sponsor or “non-Federal interest.”? The local
sponsor is required to pay:
(A) 10 percent of the cost of construction of
the portion of the project that has a depth not in
excess of 20 feet; plus
(B) 25 percent of the cost of construction of
the portion of the project that has a depth in excess
of 20 feet but not in excess of 45 feet; plus
2. Under 33 U.S.C. §§ 2219 and 2241, a “non-Federal interest”
is a “legally constituted public body with full authority and capability
to perform the terms of its agreement and to pay damages, if necessary,
in the event of failure to perform.” The Port is the non-federal interest,
or local sponsor, of the Project. 2R.232, 237.
4
(C) 50 percent of the cost of construction of
the portion of the project which has a depth in
excess of 45 feet.
33 U.S.C. § 2211(a)(1).
In the case of utilities that must be moved to make way
for a project (such as Owners’ pipelines), the local sponsor
must
perform or assure the performance of all
relocations of utilities necessary to carry out the
project, except that in the case of a project for a
deep-draft harbor . . . one-half of the cost of each
such relocation shall be borne by the owner of
the facility being relocated and one-half of the cost
of each such relocation shall be borne by the non-
federal interests.
33 U.S.C. § 2211(a)(4) (emphasis added). The Port is the
local sponsor of the Project. 2R.232, 237.
B. WRDA-86 Defers To State Law To Determine
Payment Of Relocation Costs
For pipeline relocation costs, WRDA-86 adopts the rule
that state law decides which party — local sponsor or facility
owner — must shoulder utility relocation costs associated with
the joint federal/state navigation project. H.R. Conr. Rep. No.
99-1013, at 205 (1986). Thus, except in the case of a deep-
draft harbor, WRDA-86 leaves to state law the question of
who must bear relocation costs. When a navigation district
such as the Port requires relocation or removal of a
pipeline, Texas law provides that the navigation district must
5
bear the costs at its “sole expense.” TEx. WATER CoDE ANN.
§ 60.102(a) (Vernon 1988).
C. The Corps Acknowledged That Under WRDA-86 The
Port Had To Pay For Utility Relocations Required
To Deepen And Widen The Channel
The Corps and Port acknowledged that the Project’s local
sponsor — the Port — would bear the costs of relocating utilities
such as Owners’ pipelines. In the 1987 feasibility study, the
Corps concluded:
In accordance with Public Law 99-662 [WRDA-
86], non-federal interests [i.e., the Port] would
be responsible for ... [ajll relocations and
alterations of utilities, pipelines, cables, and
sewer outlets necessary for the project, except
that in the case of a deep-draft harbor, one-half of
the cost of utility relocations shall be borne by
the owner of the facility being relocated and one-
half of the cost of each such relocation shall be
borne by the non-federal interests.
7R.1642 (emphasis added). For nine years thereafter, the
Corps consistently acknowledged the local sponsor should
bear these costs. F.g., 12R.3221 (in August 1993, identifying
“Structure and Pipeline Relocations” as non-federal sponsor
costs).
6
D. At The Port’s Behest, The Corps Reversed Its
Longstanding Position On Who Must Pay For Utility
- Relocations
Because of difficulties in justifying the Project
economically and environmentally, the Corps and Port opted
in 1993 to undertake a shallower project with a 45-foot
“design depth” over most of its length. The Port still
complained about various elements of the Project’s cost
estimate, including the “cost of relocations” of Owners’
pipelines “even though to our knowledge the existing
pipelines have not changed.” 12R.3234. The Corps
acknowledged that “cost of [pipeline] relocations has
increased,” but observed that it was because the number of
affected pipelines increased. 12R.3228. Later, the Port
admonished the Corps, “We have a tremendous problem with
pipelines that is unique to the Texas Gulf Coast. Failure of
the Corps to use its authority would in all likelihood kill this
project.” 12R.3052.
Until this point, Corps policy had recognized, in
conformity with WRDA-86, that it was “the basic
responsibility of the local [i.e., non-federal] sponsor to
assure that utilities are relocated at non-Federal expense.”
Policy Guidance Letter No. 8 (“PGL 8”). 12R.3279. Corps
policy correctly held that this assignment of responsibility
did not determine who, as between the local sponsor and the
owner, ultimately “absorb[ed] the costs.” Jd. This approach
was required by the statutory language and by the Conference
Report’s directive that the issue of who should bear relocation
costs would be “resolved between the non-Federal interest
and the owners of the facilities being relocated.” H.R. Conr.
Rep. No. 99-1013, at 205.
7
In response to the Port’s importuning, the Corps reversed
its policy for the purpose of shifting costs from the Port to
Owners notwithstanding WRDA-86. The Corps circulated
its draft to the Port. 12R.3075-3088. The Port and Corps
agreed that further development of the policy would be
treated as “a partnership issue and decision, not to be decided
unilaterally by the Corps.” 12R.3069 (emphasis in original).
The new draft policy sought to shift to Owners the cost
of utility relocations when the Port claimed it lacked the
ability to force a relocation at the owners’ cost. The Port’s
general counsel warned that TExas WATER Cope § 60.102(a)
required the Port, not Owners, to bear relocation costs. She
concluded that the Port lacked the authority to require the
pipelines to relocate at owner cost, and that any attempt to
do so might result in an unacceptable delay in starting work
on the Project. 2R.241. The Port’s outside counsel and the
Corps’ counsel concurred. 2R.239-240; 9R.2350D-2350;
9R.2254-2275.
This effort to shift costs was reflected in the two-volume
Limited Reevaluation Report and Supplemental
Environmental Impact Statement (“LRR”), which the Corps’
Galveston district engineer issued principally to address the
Project’s environmental concerns. Buried in the two volumes
were suggestions that Owners’ pipelines should be “removed”
along with “other obstructions to the channel improvements.”
8R.1981. Reflecting the Corps’ policy reversal, the LRR
asserted that “cost for removal and replacement of pipelines
... are not included in the baseline cost estimate because
these costs are owner costs, not project costs.” 8R.2000A
(emphasis added). According to the LRR, this conclusory
assertion allegedly was based on the Corps’ “current policy,”
or Policy Guidance Letter No. 44 (“PGL 44”), which
8
formalized the Corps’ draft policy and was issued about two
weeks before the date of the LRR. 9R.2215-2224.
In May 1996, the Corps presented Congress with a
Chief’s Report making recommendations regarding the
Project. This Report did not propose any change to
Congressional policy as set forth in WRDA-86. To the
contrary, the Report noted that it was “[b]ased upon existing
cost sharing policy” and further recommended
implementation of the proposed project “generally” in line
with the LRR, “subject to applicable cost-sharing and
financing requirements.” 8R.2112-2113. Because Congress
had not amended the nation’s water project policy in any
material respect since adopting the cost-sharing formulas in
WRDA-86, the Chief’s invocation of “existing cost sharing
policy” necessarily referred to WRDA-86. Closely
paraphrasing WRDA-86, the Chief’s Report also restated the
requirement that “the non-federal sponsors shall. . . provide
all lands ... and perform or ensure the performance of all
relocations determined by the federal Government to be
necessary. ...” 8R.2112.
E. Contrary To WRDA-86, The Corps Ordered Utility
Pipeline Relocations “At Owner Expense”
In the Water Resources Development Act of 1996, Pub.
L. No. 104-303, 110 Stat. 3658 (“WRDA-96”), Congress
authorized approximately 100 new projects, including 31
“Projects With Chief’s Reports.” 17R.4497-4626. With
respect to the latter group, which included the Project,
Congress noted that they were “to be carried out...
substantially in accordance with the plans, and subject to
the conditions, described in the respective reports... .”
WRDA-96 § 101(a) (17R.4623). The Project was authorized
9
as a cost-sharing project in which the Corps represented the
federal interest and the Port constituted the local or non-
federal interests. 2R.237.
Under WRDA-86 and other applicable federal statutes,
the execution of a Project Cooperation Agreement, or “PCA,”
was a necessary pre-condition to the commencement of
construction on all federally-subsidized water projects.
See 33 U.S.C. § 2211(e); 42 U.S.C. § 1962d-5b(a). The Corps
signed a PCA with the Port on June 10, 1998. 2R.237;
7R.1263-1307. Five days later, the Corps began sending
notices requiring Owners to remove their pipelines to
accommodate the Project, directing that “[a]ll removals and
any subsequently permitted relocations ... shall be
accomplished at owner expense.” Owners subsequently
relocated their pipelines.
F. The Fifth Circuit Allowed The Corps To Impose The
Full Expense Of Utility Relocations On Owners
On November 25, 1998, Owners sued the Corps in the
United States District Court for the Southern District of
Texas, Houston Division, seeking a declaration that the
Notice to Remove letters, which ordered Owners to pay all
relocation costs, were void as an unauthorized exercise of
federal power. 2R.20-22.> A Consolidated Complaint was
3. Owners also sued the Port in Texas state court seeking a
declaration that the Port had required the relocation of their pipelines
within the meaning of Texas WaTER Cope § 60.102(a), so that the
Port was responsible for 100% of the relocation costs. Owners also
alleged that the Port was taking their property without just
compensation in violation of the United States and Texas
Constitutions. 18R.30-33. In the alternative, Owners sought a
declaration in the state-court suit that the Project is a deep-draft harbor
project under WRDA-86, so that the Port must pay 50% of the
(Cont’d)
10
filed on February 5, 1999. 2R.139-182. Additional Owners
intervened. 19R.4834-4835; 22R.5550. The Port and Corps
answered, and the Port counterclaimed for a declaration that
Owners must bear all pipeline relocation costs. 2R.204-212;
2R.223-235.
On March 26, 1999, the parties filed stipulated facts.
2R.230-248. On April 30, 1999, Owners moved for summary
judgment on all claims except the takings claim. 19R.4865-
4871. The Port and Corps responded and filed cross-motions
for summary judgment. 19R.4902-4906; 20R.4907-5265;
21R.5267-5311; 21R.5373-5577.
On January 25, 2002, the district court issued an order
and final judgment with an accompanying opinion. 1R.5775-
5781; Pet. App. at 18a-27a. The district court granted Owners’
motion, in part; denied the Port’s and the Corps’ motions;
and dismissed all other claims without prejudice. 1R.5775-
5781. The district court held that WRDA-86 controlled the
cost-allocation determination for the Project, and that under
Texas law the Port was to bear the relocation costs. Pet. App.
at 7a, 23a-24a. The district court denied Owners’ request for
summary judgment on the alternative claim that the Project
is a deep-draft harbor. 1R.5775-5781.
The Fifth Circuit affirmed in part and reversed in part.*
(Cont’d)
relocation costs. 18R.31-32. The Port removed the second case to
federal court, where proceedings were consolidated. 18R.52; 2R.84.
The Port expressly waived any Eleventh Amendment immunity.
2R.237.
4. Insofar as the Fifth Circuit affirmed the district court’s
judgment, it held that the Project is not a deep-draft harbor for
purposes of 33 U.S.C. § 2211(a)(4). Pet. App. at 17a. Petitioners do
not challenge this portion of the Fifth Circuit’s judgment.
11
On the issue of whether Owners or the Port must bear full
relocation costs, the Fifth Circuit held that “the Corps
properly exercised its navigational servitude over the
pipelines and waterway covered by the [Owners’] . . . permits,
requiring Owners to remove those pipelines at their expense.”
Pet. App. at 16a. Reasoning that the Corps rather than the
Port had required the pipeline relocations at issue, the
Fifth Circuit held that section 60.102(a) of the Texas WATER
CobE requiring payment by the Port did not apply. Pet. App.
at 9a (“This provision is not applicable because the Port did
not require relocation — the Corps did”) (original emphasis).
Based on this conclusion, the Fifth Circuit held that “it is ~
not necessary to resolve whether WRDA-86 or WRDA-96”
controls” because “in any event, Tex. Water Code § 60.102
does not apply.” Jd. (original emphasis).
REASONS FOR GRANTING THE PETITION
This Court should grant Owners’ petition for a writ of
certiorari because the Fifth Circuit’s judgment in this case
erroneously expands the constitutional navigational servitude
doctrine, allowing the Corps to seize control of non-federal
cost issues and to substitute its policy for congressional
mandates.
The navigational servitude arises from the Commerce
Clause and accordingly is a power belonging to Congress.
This power has been delegated to the Corps, although
Congress retains the prerogative not to use it. By invoking
the navigational servitude, the Corps can require removal of
obstructions from navigable waters at no cost to the federal
government.
12
As interpreted and expanded by the Fifth Circuit, the
navigational servitude not only authorizes the Corps to
Temove obstructions without cost to the federal gavernment.,
but also authorizes the Corps to (1) impose these costs on
property owners; and (2) shield local governments and other
non-federal parties from state law reimbursement rules. This
ruling
* improperly expands the navigational servitude
beyond its constitutional purpose and limits;
¢ interferes with congressionally mandated rules
that place responsibility for removal costs on
the local public sponsor, rather than on private
property owners;
* contravenes principles of federalism by
improperly overriding state law, including
state-imposed constraints on one of its
political subdivisions;
¢ effectively prevents private property owners
from factoring in the risk of or otherwise
managing possible removal costs, thereby
deterring private capital investment in and
near the nation’s ports; and
¢ defers unjustifiably to a Corps policy in
derogation of an unambiguous statute.
Whether the federal government can invoke the servitude to
ensure that it will not bear removal costs is not at issue.
The issue is whether the servitude empowers the Corps to be
13
the judge of how non-federal costs are allocated among
non-federal entities, in contravention of both federal and
state statutes.
Given the nature of water projects, these non-federal
costs are substantial; in this case alone, the Project required
relocations of 123 pipelines at an aggregate cost exceeding
$115 million. 8R.1966-1969, 2113. The magnitude of
this expense confirms that this Court’s intervention is
warranted without regard to whether a circuit split exists.
The conclusion is underscored by the sheer number of port
and harbor projects nationwide where pipeline and utility
relocation issues are likely to arise.
The plain language of WRDA-86 unequivocally
establishes Congress’ determination that the local sponsor
for a navigation project — not the Corps — is responsible for
the relocation of any utilities, including pipelines. If the local
sponsor has the ability to shift those costs to the owner under
local law it may do so, but Congress refrained from deciding
that question and did not authorize the Corps to decide it.
When Congress unambiguously states its intent, as it has
in WRDA-86, an executive agency such as the Corps has no
right to second-guess Congress’ choice. See Chevron U.S.A.,
Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842
(1984) (when Congress’ intent “is clear, that is the end of
the matter; for the court, as well as the agency, must give
effect to the unambiguously expressed intent of Congress”).
By like token, no deference is warranted towards an
agency determination that contravenes unambiguous statutory
language. General Dynamics Land Sys., Inc. v. Cline, 124
14
S. Ct. 1236, 1248 (Feb. 24, 2004). “Even for an agency able
to claim all the authority possible under Chevron, deference
to its statutory interpretation is called for only when the
devices of judicial construction have been tried and found to
yield no clear sense of congressional intent.” /d. When the
agency’s position is “clearly wrong” because it contravenes
express statutory language, that position must be rejected.
See id.
The Fifth Circuit further erred by deferring to an
untenable interpretation adopted in anticipation of this
litigation under circumstances when deference is not
warranted. In this regard, the panel opinion is inconsistent
with Solid Waste Agency v. United States Army Corps of
Engineers, 531 U.S. 159 (2001).
Without regard to the existence or absence of a circuit
split, this Court in Solid Waste Agency recognized that
intervention was warranted to address an overreaching Corps
interpretation of a statute — especially when that interpretation
is inconsistent with an earlier Corps interpretation of the same
statute. See id. at 166-68.
The same circumstances exist here and point toward
granting certiorari.
15
I. The Fifth Circuit Improperly Allowed The Corps
To Decide Cost Issues Between Non-Federal Parties
In Contravention Of Congressional Intent And
WRDA-86
A. Congress Chose State Law To Allocate
Non-Federal Expenses Among Non-Federal
Entities
WRDA-86 allocates responsibilities between the federal
government and the local public sponsor — in this case, the
Port. When utilities such as Owners’ pipelines must be moved
to make way for a project (other than a deep-draft harbor),
the local public sponsor must “perform or assure the
performance of all relocations of utilities necessary to carry
out the project... .” 33 U.S.C. § 2211(a)(4) (emphasis
added).
For pipeline relocation costs, Congress chose state law
to decide which party — the local public sponsor or facility
owner — must shoulder relocation costs associated with a joint
federal/state navigation project. As stated in the Conference
Report that accompanied the final version of WRDA-86:
For projects involving depths of forty-five feet or
less, the legislation does not restrict in any way
the manner in which the non-Federal interest [i.e.,
local public sponsor] finances the relocation.
If the non-Federal interest has the authority to
compel the owner of the facility to pay relocation
costs, it may do so. By the same token, the
non-Federal sponsor may pay as much of the
relocation costs as may be required or appropriate.
16
This question is to be resolved between the non-
Federal interest and the owners of the facilities
being relocated.
H.R. Conr. Rep. No. 99-1013, at 205 (1986) (emphasis
added). Whether the local public sponsor, an organ or
instrumentality of the state, must pay (or has authority to
compel owners to pay) relocation costs is governed by
state law. Thus, except in the case of a deep-draft harbor,
WRDA-86 defers to state law.°
Responsibility for pipeline relocations is spelled out in
34 U.S.C. § 2211(a)(4), entitled “Utility Relocations.”
See Pet. App. at 33a. It provides that the “non-federal interests
_ .|, shall perform or assure the performance of all relocations
oflutilities necessary to carry out the project. . . .” The Port
is the non-federal interest, or local sponsor, for the Project.
Hehce, as between the Port and the Corps, it is the Port that
ess has directed to “perform or assure the performance”
of all utility relocations occasioned by the Project.°
Under WRDA-86, therefore, and with respect to
navigation projects other than deep-draft harbors, the local
5. Under Texas law, when a navigation district such as the Port
requires relocation or removal of a pipeline, the navigation district
must bear the costs at its “sole expense.” TEx. WATER CODE ANN.
§ 60.102(a) (Vernon 1988). Relocation is “required” for these
purposes if necessitated by a district-approved project. Op. Tex. ATT’
Gen. No. MW-412 (1981).
6. The Corps acknowledged this determination in its first policy
statements issued after the enactment of WRDA-86. See Corps Policy
Guidance Letter No. 8 (May 19, 1988) § 3 (12R.3278-3279); Corps
Policy Guidance Letter No. 9 (June 13, 1988) § 3. 12R.3274-3276.
4
z
.
F
e
:
17
sponsor — not the United States — is responsible for utility
relocations. The Senate and House conferees stated this
language “does not restrict in any way the manner in which
the non-federal interest finances the relocation” of any
“pipelines, cables, and related facilities... .” H.R. Conr.
Rep. No. 99-1013, at 205 (15R.3841) (emphasis added).
Thus, Congress placed the burden of relocation on the local
sponsor but refrained from deciding who, as between the local
sponsor and the owner, would bear the relocation costs.
It said, “This question is to be resolved between the non-
federal interest and the owners of the facilities being
relocated.” Jd.
B. The Fifth Circuit’s Analysis Thwarts
Congressional Intent And Contravenes Principles
Of Federalism
1. The Fifth Circuit endorsed use of the
navigational servitude to trump congress-
ional intent
The Fifth Circuit’s opinion allows congressional intent
to be thwarted by (1) allowing the Corps to invoke the
navigational servitude at the Port’s request, thereby reversing
the assignment of responsibilities for relocation costs made
by Congress in WRDA-86; and (2) concluding that this action
prevents Owners from recovering that expense under state
law. The panel erroneously concluded that this maneuver
relieved the Port of its state law responsibility because the
Corps, rather than the Port, “required” the pipeline
relocations. See Pet. App. at 9a.
The navigational servitude is a power held by Congress
under the Commerce Clause. It allows Congress to require
18
removal of navigational obstructions at no cost to the United
States. Gibson v. United States, 166 U.S. 269, 271-72 (1897).
Congress delegated this power to the Corps under the River
& Harbors Act of 1899, although Congress retains the
prerogative “not to assert the navigational servitude... .”
Lambert Gravel Co. v. J.A. Jones Constr. Co., 835 F.2d 1105,
1110 (Sth Cir. 1988). When the servitude is exercised, the
owner frequently must bear the cost. But the servitude does
not prohibit a party other than the owner — such as an insurer,
indemnitor, or state governmental subdivision — from paying
the cost.
A central premise of the panel opinion is this: The Port
did not “require” relocation of the pipelines at issue because
the Corps did so. See Pet. App. at 9a. And because the Corps
rather than the Port “required” the relocation, state law
mandating that the Port must pay for Port-required relocations
does not come into play. See id. There is a fundamental flaw
in this reasoning. While the navigational servitude insulates
the federal government from expense, it does not give the
Corps authority to rule on cost issues among non-federal
entities or to change a congressionally mandated allocation
of non-federal expenses.’
7. The Fifth Circuit’s opinion includes a discussion of the
court’s view on whether the Port had authority under state law to
require relocation. Pet. App. at 9a-10a, 13a-14. Because the
Fifth Circuit concluded that “Texas law does not apply to the
relocation,” Pet. App. at 14a, the discussion of the Port’s authority
under state law is dicta. The Fifth Circuit predicated its judgment on
a holding that the Corps required relocation rather than the Port.
Id. at 9a. For the reasons discussed in this petition, the Fifth Circuit’s
judgment in that regard is erroneous and should be reversed and
remanded; upon remand, the Fifth Circuit can address the merits of
the state-law issues.
A m
LMS OG
ie SRA EAN SNANTTORE
i]
<
=z
=
*
>
&
*
&
=
bs
sk
ee
2
a
Z
19 :
It is no answer to assert that the Owners’ rights are subject
to § 10 permits requiring Owners to remove obstructions at
no cost to the federal government. Jd. at 14a. The permits
are no broader than the navigational servitude itself. See id.
Because the costs and responsibilities at issue here are
entirely non-federal, neither the servitude nor permits
tracking the servitude are implicated. Nor is it an answer to
assert that WRDA-86 contains no express waiver of the
navigational servitude. See id. at 16a. Even assuming the
absence of an express waiver — which Owners do not concede
in light of WRDA-86’s unambiguous terms — the analysis
does not change because the costs at issue are non-federal
and outside any proper application of the navigational
servitude. Thus, no waiver is required.®
In WRDA-86, Congress assigned responsibility for utility
relocations to the local sponsor, not the federal sponsor.
8. The Fifth Circuit attempts to bolster its approval of the Corps’
end-run by relying on and extending United Texas Transmission Co.
v. United States Army Corps of Engineers, 7 F.3d 436 (Sth Cir. 1993)
(“UTTCO”). See Pet. App. at 14a-15a. UTTCO does not support the
use of the navigational servitude in this case because UTTCO did
not deal with the WRDA-86 requirement that the local public sponsor
must “perform or assure performance of” relocations. No issue was
presented in UTTCO concerning whether the owner necessarily must
pay when the servitude is exercised. The pipelines had been relocated,
and it was “not disputed ... that permit-holders must pay for the
movement of any portion of the pipeline that is located within the
original permit area.” /d. at 441 (emphasis added). The primary focus
of UTTCO’s discussion of the navigational servitude was on the
Corps’ right to revoke the permit of an owner who refused repeated
requests to relocate. Jd. at 439, 445-47. The court concluded that
UTTCO should have done precisely what Owners did in this case —
relocate, and then seek legal remedies for any appropriate
reimbursement. /d. at 446-47. In light of these important differences,
the Fifth Circuit’s reliance on UTTCO is unwarranted.
20
By making this determination, Congress necessarily decided
that the navigational servitude, a federal power, would not
be asserted to effectuate utility relocations on cost-sharing
navigation projects. “Congress may decide, in a particular
case, not to assert the navigational servitude.” Lambert
Gravel, 835 F.2d at 1110.
Such is the case with WRDA-86. The plain language of
WRDA-86 is susceptible to no other reading, because
Congress must be presumed to have been aware of its rights
under the navigational servitude. See, e.g., Goodyear Atomic
Corp. v. Miller, 486 U.S. 174, 184-85 (1988) (the Supreme
Court will “presume that Congress is knowledgeable about
existing law pertinent to the legislation it enacts’’); St. Louis,
ILM. & S. Ry. v. United States, 251 U.S. 198, 207 (1920);
FDIC v. Faulkner, 991 F.2d 262, 265 (Sth Cir. 1993). Had it
been Congress’ intent for the federal sponsor to effect the
removal of pipelines and other utilities, it would not have
assigned the job to the local sponsor.
2. The Fifth Circuit opinion renders WRDA-
86’s cost-sharing formulas meaningless
In WRDA-86, Congress specified the means by which it
would bring financial accountability to federal water projects
by placing on the local sponsor a portion of the costs and
responsibilities that such projects entailed. See, e.g., S. Rep.
No. 104-170, at 1 et seg. (15R.3984). Congress let WRDA-
86 stand unamended in all material respects when it enacted
WRDA-96.?
_ 9. The Port and the Corps argued on appeal that WRDA-96
controls cost allocation for the Project and places responsibility for
costs on Owners. Pet. App. at 9a. Owners contend that WRDA-86
(Cont’d)
‘a Rein GE eels NAR EM ACE Se ARE PN we REN IR
21
Under the Fifth Circuit’s decision in this case, the Corps
and the Port nonetheless are free to ignore Congress’ express
instructions and to evade the cost-sharing requirements of
WRDA-86 through ad hoc applications of federal authority.
There is little reason for local sponsors to shoulder their
WRDA-86 responsibilities hereafter. They can simply claim
(as the Port claimed here) that they lack authority to cause
relocations of pipelines at no cost to themselves, and then
ask the Corps to impose relocation costs on owners.
As aresult, the cost-sharing formulas of WRDA-86 now
are largely meaningless. It should not be so easy to trample
congressional policy. See, e.g., Dunn v. Commodity Futures
Trading Comm’n, 519 U.S. 465, 472 (1997) (rejecting
agency's proffered interpretation of statutory term on
grounds, among others, that acceptance of agency
interpretation would leave statute “without any significant
effect at all”); Federal Labor Relations Auth. v. Aberdeen
Proving Ground, 485 U.S. 409, 414 (1988) (reviewing courts
“must not ‘rubber-stamp ... administrative decisions that
they deem inconsistent with a statutory mandate or that
(Cont'd)
controls. The Fifth Circuit did not reach this issue in light
of its holding that the Corps’ invocation of the navigational
servitude negated the state-law cost-allocation mechanism selected
in WRDA-86. /d.; see also id. at 12a (“Because neither WRDA-86
nor WRDA-96 includes a clear Congressional waiver of the
navigational servitude, we need not reach which Act controls for
cost-sharing”). Because the Fifth Circuit’s judgment is erroneous
insofar as it allows the navigational servitude to trump the state law
mechanism selected by WRDA-86, the Fifth Circuit’s judgment
should be reversed and this matter should be remanded to the
Fifth Circuit for further consideration of the interaction between
WRDA-96 and WRDA-86.
22
frustrate the Congressional policy underlying a statute’’’)
(citing Bureau of Alcohol, Tobacco & Firearms v. Federal
Labor Relations Auth., 464 U.S. 89, 97 (1983)).
3. The Fifth Circuit’s ruling also contravenes
federalism principles
By enacting section 60.102 of the TExAs WaTER Cope,
the State of Texas has limited the authority of its component
navigation districts; the districts may not undertake projects
that require relocations of pipelines unless they pay relocation
costs. This is a reasonable choice, but more to the point, it is
the State’s choice to make.
An interpretation of the federal statutes at issue or of
the servitude that conflicts with this policy choice by the
State of Texas should be avoided under the Tenth Amendment
and principles of federalism. E.g., Penn Dairies, Inc. v. Milk
Control Comm'n, 318 U.S. 261 (1943) (rejecting contention
that the Secretary of War could displace state law governing _
price of milk sold for Army consumption absent clear
congressional intent to displace state law). As the Court
emphasized in Penn Dairies, “We have recognized that the
Constitution presupposes the continued existence of the states
functioning in coordination with the national government,
with authority in the states to . . . regulate their internal affairs
and policy. ...” Jd. at 270-71. “An unexpressed purpose of
Congress to set aside statutes of the states regulating their
internal affairs is not lightly to be inferred... .” Jd. at 275;
see also Texas v. United States, 730 F.2d 339, 355 (5th Cir.
1984) (“The source of judicially enforceable rights of state
sovereignty is not so much the text of the Tenth Amendment
as it is the structural assumption of the Constitution as a
a ty BA
She WYRE nema
23
whole that the states will remain separate and meaningful
decision-making, functioning governmental entities”).
To avoid conflict, WRDA-86 and Corps authority should
not be construed to override a State-imposed constraint on
the powers of its political subdivisions.
If. The Fifth Circuit Erred In Deferring To An Agency
Application Of WRDA-86 That Subverts Clear
Congressional Intent To Make The Port Responsible
For Utility Relocations
The panel opinion compounds the errors described above
by deferring to the Corps’ assertion of authority under
circumstances when no deference is warranted. See Pet. App.
at 15a-16a.
A. The Corps’ Application Of WRDA-86 Contra-
venes Congressional Intent
No deference is warranted here because the Corps
invoked the navigational servitude to impose relocation costs
on Owners despite Congress’ clear and unambiguous
directive in WRDA-86 that the non-federal sponsor
must perform or assure performance of utility relocations.
The panel thus errs by deferring to a new Corps policy — first
adopted in 1995 in anticipation of this dispute — that subverts
WRDA-86’s clear language and its cost-sharing philosophy.
Since at least April 1986, Corps policy provided that the
non-federal sponsor was responsible for utility relocations,
notwithstanding the navigational servitude. 21R.5319-20.
When it enacted WRDA-86, Congress “continue[d] the
24
current policy” that the non-federal sponsor was responsible
for pipeline and other utility relocations. 15R.3841. For nine
years thereafter, the Corps consistently interpreted WRDA-
86 to place the responsibility for relocation on the non-federal
sponsor. See, e.g., 12R.3279, 3274-75. The project’s
feasibility study expressly incorporated this policy. 7R.1542
at J 35. Only in the last days of study for the Project did the
Corps reverse its position in response to the Port’s urging
that adhering to the original policy would “kill this project”
and that “our partnership has made too much progress to
allow this to happen.” 12R.3052.
The issue, therefore, never has been whether the Port
had the authority to compel relocation — it does. The only
issue has been whether the Port had the authority to compel
relocation at owners’ expense. Continuing to act as partners
in a joint enterprise (e.g., 9R.2277), the Corps and the Port
agreed to try to shift the costs of the pipeline relocations
from the Port to Owners. The rationale for their decision
appears in the Corps’ Policy Guidance Letter No. 44
(9R.2215-24) (“PGL-44”), cited and discussed in the panel
opinion. See Pet. App. at 15a.
Because PGL-44 effectively eliminates any possibility
that a local public sponsor would pay for a utility
relocation, the Corps’ action frustrates Congress’ clear intent
in WRDA-86 that cost allocation was “to be resolved between
the non-federal interest and the owners of the facilities being
relocated.” H.R. Conr. Rep. No. 99-1013, at 205 (1986).
As a “policy statement,” PGL-44 lacks “the force of law”
and “does not warrant Chevron-style deference.” Christensen
v. Harris County, 529 U.S. 576, 587 (2000). Where the “intent
of Congress is clear,” as it is in WRDA-86, no deference of
any kind is due an agency’s divergent interpretation. Chevron
Sa aia fo et ewioe
5 Rana Meares
SURES Pree tie ste SA TEM
Lyre Sh ch. te
Sead Fiala} engine taas eosin cela eeae ae
SOA GaA Me asses bales talcaac baa emt SS acai’
25
U.S.A., Inc., 467 U.S. at 842-43; General Dynamics Land
Sys., Inc., 124 §.Ct. at 1248.
B. The Corps’ New Interpretation Of WRDA-86
Should Be Rejected In The Absence Of A Clear
Indication Of Congress’ Desire To Expand The
Navigational Servitude
The panel’s deference to the Corps is misplaced for the
further reason that without “overwhelming evidence of
acquiescence” by Congress, courts should be “loath to replace
the plain text and original understanding of a statute”
with an amended and inconsistent agency interpretation.
Solid Waste Agency, 531 U.S. at 168-70 & n.5.
The circumstances in Solid Waste Agency parallel those
present here. This Court rejected a Corps rule extending the
definition of “navigable waters” under the Clean Water Act,
33 U.S.C. § 1344(a), to include intrastate waters used as a
habitat by migratory birds which cross state lines — including
the abandoned sand and gravel pit at issue in the case —
because this extension exceeded the Corps’ authority under
the statute. Jd. at 167.
In reaching this conclusion, the Court noted that the Corps’
later expanded rule and interpretation were inconsistent
with the Corps’ original 1974 interpretation of the Clean Water
Act. Under that earlier interpretation, “‘the water body’s
capability of use by the public for purposes of transportation or
commerce’” was “‘the determinative factor’” in deciding
whether a body of water constituted “navigable waters.”
Id. at 168 (quoting 33 C.F.R. § 209.260(e)(1)).
26
The Court also underscored its concern regarding
unwarranted deference to an agency’s statutory interpretation
that “invokes the outer limits of Congress’ power,” cautioning
that “we expect a clear indication that Congress intended
that result.” /d. at 172. “This requirement stems from our
prudential desire not to needlessly reach constitutional issues
and our assumption that Congress does not casually authorize
administrative agencies to interpret a statute to push the limit
of congressional authority.” Jd. at 172-73.
Similar concerns arise from the Corps’ conduct in the
present case. Previous Corps policy had recognized that it
was “the basic responsibility of the local [i.e., non-federal]
sponsor to assure that utilities are relocated at non-Federal
expense.” 2R.3279. The Corps then reversed its policy for
the purpose of shifting costs from the Port to Owners
notwithstanding WRDA-86. 8R.2000A; 9R.2215-2224.
This policy shift expands the navigational servitude far
beyond authorizing the Corps to remove obstructions without
cost to the federal government. The Corps now has claimed
authority to reallocate the division of non-federal costs among
non-federal entities. As in Solid Waste Agency, this Court
should reject any “administrative deference” predicated on
an interpretation that raises significant questions regarding
federalism and the permissible scope of statutory authority.
See 531 US. at 684.
27
CONCLUSION
; For the reasons stated above, the petition for writ of
certiorari should be granted. The judgment of the court of
appeals should be reversed, and this matter should be
remanded to the court of appeals for further consideration.
Respectfully submitted,
WILLIAM J. Boyce
Counsel of Record
OsBorne J. Dykes, III
Davip WiLks CorBAN
FULBRIGHT & JAworsKI L.L.P.
1301 McKinney, Suite 5100
Houston, TX 77010
(713) 651-5151
: Counsel for Petitioners
"
APPENDIX
la
APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT
FILED JANUARY 306, 2004
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
No. 02-20442
AIR LIQUIDE AMERICA CORPORATION; EGP FUELS
COMPANY; EQUILON PIPELINE COMPANY, LLC;
EXXON PIPELINE COMPANY; FLORIDA GAS TRANS-
MISSION COMPANY; HOUSTON PIPE LINE CO.; HSC
PIPELINE PARTNERSHIP LP; MOBIL CHEMICAL
COMPANY, an unincorporated division of Mobil Oil Cor-
poration; MOBIL PIPELINE COMPANY; SEADRIFT
PIPELINE CORPORATION; TE PRODUCTS PIPELINE
COMPANY LIMITED PARTNERSHIP; TEXAS EASTERN
TRANSMISSION CORP.; UCAR PIPELINE INCORPO-
RATED; CHEVRON CHEMICAL CO.; CHEVRON PIPE-
LINE CO.; DYNEGY MIDSTREAM SERVICES; TEPPCO
CRUDE OIL LLC,
Plaintiffs-Counter Defendants-
Appellees-Cross-Appellants,
DUKE ENERGY TRANSPORT AND
TRADING COMPANY,
Plaintiff-Counter Defendant-Appellee,
2a
Appendix A
AIR PRODUCTS INCORPORATED; AIR PRODUCTS
MANUFACTURING CORPORATION; BLACK MARLIN
PIPELINE COMPANY; TEJAS SHIP CHANNEL LLC;
TEJAS SOUTH PIPELINE PARTNERSHIP,
Intervenor Plaintiffs-Appellees-Cross-Appellants,
versus |
U.S. ARMY CORPS OF ENGINEERS,
Defendant-Counter Claimant-
Appellant-Cross-Appellee,
PORT OF HOUSTON AUTHORITY
OF HARRIS COUNTY, TEXAS,
Movant-Appellant-Cross-Appellee.
AIR LIQUIDE AMERICA CORPORATION; EGP FUELS
COMPANY; EQUILON PIPELINE COMPANY LLC;
EXXON PIPELINE CO.; FLORIDA GAS TRANSMISSION
COMPANY; HOUSTON PIPE LINE CO.; HSC PIPELINE
PARTNERSHIP LP; MOBIL CHEMICAL COMPANY, an
unincorporated division of Mobil Oil Corporation; MOBIL
PIPELINE COMPANY; SEADRIFT PIPELINE
CORPORATION; TE PRODUCTS PIPELINE COMPANY
LIMITED PARTNERSHIP; TEXAS EASTERN
TRANSMISSION CORP.; UCAR PIPELINE INC.,
Plaintiffs-Appellees-Cross-Appellants,
Ritsssresnasesne SS Gia vies Nata
3a .
Appendix A
DUKE ENERGY TRANSPORT AND
TRADING COMPANY,
Plaintiff-Appellee,
versus
PORT OF HOUSTON AUTHORITY OF
HARRIS COUNTY, TEXAS,
Defendant-Appellant-Cross- Appellee.
Appeal from the United States District Court
for the Southern District of Texas
Before BARKSDALE, DeMOSS and BENAVIDES,
Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
At issue is cost-allocation for privately owned pipelines
under the Houston Ship Channel (channel) being relocated
as part of the project by the United States Army Corps of
Engineers and the Port of Houston Authority to widen and
deepen the channel. The Corps and the Port appeal the partial
summary judgment awarded the pipeline owners: inter alia,
the Port was held responsible for the relocation cost. Owners’
conditional cross-appeal is from the district court’s denial
of their alternative summary judgment claim: that the project
was for a deep-draft harbor; and that, accordingly, the Port
would have to bear half of the relocation cost.
4a
Appendix A
The principal sub-issues are: whether, as held by the
district court, the Port must bear the cost, pursuant to
TEX. WATER CopDE § 60.102 (relocation cost to be borne by
district if it “required” the relocation); and, if not, whether,
in requiring Owners to relocate the pipelines at their expense,
the Corps was properly enforcing both the federal
navigational servitude and the Corps’ associated federal
permit authority.
Texas law does not control. Consistent with, inter alia,
the Corps’ well- settled authority to enforce its permits,
Owners were required to relocate their pipelines at their
expense. Concerning Owners’ conditional cross-appeal, the
project was not for a deep-draft harbor; therefore, the Port
was not required to bear half of the relocation cost.
VACATED in PART; AFFIRMED in PART; and
RENDERED.
5
The Rivers and Harbors Act of 1899, 33 U.S.C. § 401
et seq., prohibits construction in navigable waters of the
United States unless the work has been approved by the
Secretary of the Army. Pursuant to this Act, and for more
than 100 years, the Corps has regulated such construction,
in part by issuing permits under § 10 of that Act. 33 U.S.C.
§ 403. These § 10 permits provide, inter alia, that pipelines
and other structures beneath navigable waters are to be
relocated at no expense to the United States if required by
federal navigation interests or projects. In the 1940s and 50s,
the Corps issued § 10 permits to Owners to install pipelines
ee
Sa
Appendix A
beneath the channel. Each permit mandates pipeline-
relocation as required by navigation needs and at no cost to
the government.
Similarly, when the Texas legislature granted ownership
of the land under the channel to the Port in 1927, the Port
was given authority to franchise or lease the land for limited
periods and purposes. See Act of March 11, 1927, 40th Leg.,
R.S., ch. 292, 1927 Tex. Gen. Laws 437. Accordingly, in
addition to a federal § 10 permit, each Owner holds a license
from the Port. One license condition is that Owners must
relocate their pipelines at their cost if necessary for the
channel.
In 1967, the House Committee on Public Works
authorized a study for improving deep-draft channels,
including the channel. The reconnaissance report for this
study was completed in 1980.
The next step was the Water Resources Development
Act of 1986 (WRDA-86), Pub.L. No. 99-662, 100 Stat. 4082
(1986); 33 U.S.C. § 2201 et seg. It contained the following
cost-allocation provision:
The non-Federal interests [here, the Port] for a
[harbor navigation project] shall perform or
assure the performance of all relocations of
utilities necessary to carry out the project, except
that in the case of a project for a deep draft harbor
[deeper than 45 feet] one-half of the cost of each
such relocation shall be borne by the owner of
6a
Appendix A
the facility being relocated and one-half of the cost
.. . Shall be borne by the non-Federal interests.
33 U.S.C. § 2211(a)(4) (emphasis added).
The feasibility study for the project was completed in
1987. In May 1995, the Corps published a draft report for
public review that recommended proceeding with the
channel’s expansion. The draft report stated that Owners
would bear the cost for relocation of approximately 130
pipelines. No Owner responded to the Corps about this notice.
The final version of the notice—the Limited
Reevaluation Report (LRR)—was published in November
1995. The LRR estimated the pipeline relocation cost would
exceed $100 million; and, as did the draft report, the LRR
stated that Owners would bear that cost. Again, the Corps
received no response from Owners. At the end of the
comment period, the LRR was incorporated in the Chief of
Engineers’ Report (Chief’s Report), which was transmitted
to Congress by the Secretary of the Army.
The project was authorized by the Water Resources
Development Act of 1996 (WRDA-96), Pub.L. No. 104-303,
110 Stat. 3658 (1996); 33 U.S.C. § 2330 et seg. That Act
provided: “(t]he removal of pipelines and other obstructions
that are necessary for the project shall be accomplished at
non-Federal expense,” id. § 101(a)(30), 110 Stat. at 3666;
and the project would be “substantially in accordance with
the plans, and subject to the conditions, described in” the
Chief’s Report, id. § 101(a), 110 Stat. at 3662. Again, one
condition in that report was for the relocation cost to be borne
by Owners.
7a
Appendix A
As required for commencing the project, the Port entered
into a Project Cooperation Agreement (PCA) with the Corps
in June 1998. 42 U.S.C. § 1962d- 5b(a); see Pub.L. No.
99-662, 100 Stat. 4082, 4083 (1986). Shortly thereafter, as
requested by the Port, the Corps, by removal-notices to
Owners, enforced the § 10 permit conditions and instructed
Owners to relocate their pipelines at their expense because
of the project’s requirements. Owners complied.
In November 1998, however, Owners filed this action,
seeking a declaration that the Corps’ removal-notices were
void. Simultaneously, Owners filed an action in state court,
claiming: pursuant to Tex. WaTER Cope § 60.102, the Port
had “required” the relocation and was therefore responsible
for the cost; and the Port’s not paying it was an
unconstitutional taking. In the alternative, Owners’ state
action claimed the project was for a deep-draft harbor
pursuant to WRDA-86, subject to its mandated cost-sharing
among the Port and Owners.
The state action was removed by the Port and
consolidated with this action. The Port counterclaimed,
seeking a declaration that either WRDA-96 or the § 10
permits required Owners to pay the relocation cost.
In early 2002, on cross-motions for summary j udgment,
the district court granted partial judgment to Owners, holding:
WRDA-96 did not amend the cost-sharing provisions of
WRDA-86; pursuant to WRDA-86, state law was to answer
the cost-allocation question; under Texas law, that cost was
to be borne by the Port; and the licenses issued by the Port
(placing cost with Owners) were preempted by Texas law.
8a
Appendix A
The district court amended the Corps’ removal-notices to
Owners to reflect this ruling. On the other hand, the district
court rejected Owners’ alternative claim that the project was
for a deep-draft harbor.
Il.
A summary judgment is reviewed de novo. E.g., Texas
Soil Recycling, Inc. v. Intercargo Ins. Co., 273 F.3d 644,
648-49 (Sth Cir.2002). The Corps and Port contest the Port’s
being liable for the relocation cost and the amendment of
the Corps’ removal-notices. If those rulings are vacated,
Owners contest the not-deep-draft-harbor-project ruling.
A.
l.
As the district court concluded, the language in neither
WRDA-86 nor WRDA-96 explicitly allocates the relocation
cost. The district court ruled that Texas law required the Port
to bear it.
Taking a similar approach, Owners contend that WRDA-
86, not WRDA-96, establishes the Port’s cost liability.
Support is found in the WRDA-86 conference report:
“This [cost allocation] question is to be resolved between
the non-Federal interest [Port] and the Owners of the facilities
being relocated.” H.R. Conr. Rep. No. 99-1013, at 205 (1986).
Along this line, Owners claim the Port must bear the cost
pursuant to TEx. WaTER Cope § 60.102, which provides:
“If a district in the exercise of powers conferred by this
9a
Appendix A
subchapter [port improvement] ... requires the relocating
... of any ... pipeline, the relocating ... shall be done at
the sole expense of the district.”
The Corps and Port maintain: WRDA-96, not WRDA-
86, controls cost-allocation; and WRDA-96 places it on
Owners. As discussed in part, infra, it is not necessary to
resolve whether WRDA-86 or WRDA-96 controls. In any
event, Tex. WaTER Cope § 60.102 does not apply. First, to
trigger that section’s application, the Port had to “require”
the relocation. It did not (and cannot) do so. Second, as
discussed infra, the federal navigational servitude (applied
through the § 10 permits) cannot be “trumped” in the absence
of a clear Congressional waiver.
As quoted in part earlier, Tex. Water Cope § 60.102
provides: “Ifa district in the exercise of the powers conferred
by this subchapter or in the exercise of the power of eminent
domain or the police power requires the relocating ... of
any ... pipeline, the relocating . . . shall be done at the sole
expense of the district.” (Emphasis added.) This provision
is not applicable because the Port did not require the
relocation—the Corps did.
In this regard, the district court held, and Owners
contend:
The Corps issued the removal notices at the Port’s
request, acting as the Port’s agent in requiring the
owners to relocate the pipelines. The Port cannot
escape its obligation to pay by shunting its order
through an agent.
10a
Appendix A
Air Liquide America Corp. et al. v. United States Army
Corps of Eng’rs, et al., No. H-98-3982 at 5 (S.D. Tex. filed
25 Jan. 2002).
Under Texas law, for an agency relationship, the agent
must be under the control of the principal; “even though one
acts for and in behalf of another, if he is not under that
other person’s control, the relation of agency does not exist.”
Daily Int’! Sales Corp. v. Eastman Whipstock, Inc., 662
S.W.2d 60, 64 (Tex. App. 2001). In this instance, agency
would require the Port’s being “in control” of the Corps; for
quite obvious reasons, the Port is not. By requiring removal
of an obstacle to a navigable waterway, the Corps was acting
pursuant to power delegated to it by Congress. It was pursuant
to this power, not the Port’s request, that the Corps required
the relocation.
Owners contend the Port required removal through the
Corps by: undertaking, initiating, and financing the project;
signing a PCA with the Corps; and requesting the removal-
notices from the Corps. First, the Corps, not the Port, sought
Congressional approval for the project. Second, Congress
authorized the project and provided the funds for construction
of the navigation features, subject to partial reimbursement
by the Port. Third, the Port’s entering into the required PCA
with the Corps in no way establishes that the Port required
the relocation. To the contrary, the Port determined that it
could not require pipeline relocation at Owners’ expense.
Therefore, the Port requested the Corps to exercise its § 10
permit authority under the federal navigational servitude.
lla
Appendix A
Owners contend that, but for the Port’s partial
reimbursement, role in the PCA, and request that the Corps
enforce the § 10 permits, there would have been no project.
This misunderstands the meaning of “require” in § 60.102.
These were necessary components of the project but certainly
not sufficient on their own to cause the project to be
undertaken. Restated, in order for the Corps and the Port to
proceed, an agreement was required — the PCA. The PCA
provided that the Corps would accomplish relocation, which
it agreed to do through its § 10 permits. The PCA did not
require the Corps to exercise its permit authority; and it
certainly did not empower the Port to mandate the Corps to
require pipeline relocation.
In support of their construction of state law, Owners point
to TEx. WaTER Cope § 50.052 (now repealed). It provided: if
the district required relocation or alteration in its construction
of any properties, it “shall be done at the sole expense of the
district or authority”. The Harris County Flood Control
District (an entity analogous to the Port) sought an opinion
on whether, under § 50.052, it would be required to bear the
cost for lengthening a bridge. Texas’ Attorney General
opined: “[I]f the district widens the channel so as to render
the bridge unusable, the district may reasonably be said to
have acted to require the ‘relocation .. . rerouting ... or
alteration in construction of. . . properties.’” Op. Tex. ATT’y
Gen. No. MW-412 (1981) (citing Tex. Water Cope § 50.052).
Owners contend that § 60.102 applies to the Port in the
same way. This contention neglects a crucial distinction: the
Corps, not the Port, required Owners to relocate their
pipelines. Similarly, the Port’s request for removal-notices
12a
Appendix A
by the Corps did not obligate it to issue them. See, e.g.,
California v. Sierra Club, 451 U.S. 287 (1981).
2.
The Corps has the authority, under the federal
navigational servitude, to require Owners to pay the
relocation costs according to the original permits, as
necessitated by the project. See United Texas Transmission
Co. (UTTCO) v. United States Army Corps of Eng’eers,
7 F.3d 436 (Sth Cir.1993), cert. denied, 512 U.S. 1235
(1994). Because neither WRDA-86 nor WRDA-96 includes
a clear Congressional waiver of the navigational servitude,
we need not reach which Act controls for cost-sharing.
Congress derives the power to control navigation from
its power to regulate commerce. Gibbons v. Ogden, 22 U.S.
(9 Wheat.) 1, 230-31 (1824). This power has been recognized
to impose a “navigational servitude”, described as follows:
All navigable waters are under the control of the
United States for the purpose of regulating and
improving navigation, and although the title to the
shore and submerged soil is in the various states
and individual owners under them, it is a/ways
subject to the servitude in respect of navigation
created in favor of the Federal government by the
Constitution.
Gibson v. United States, 166 U.S. 269, 271-72 (1897)
(emphasis added). This servitude operates to the exclusion
of any competing or conflicting right. See United States y.
Virginia Elec. & Power Co., 365 U.S. 624, 627-28 (1961).
l3a
Appendix A
The navigational servitude includes the right to authorize
improvements to harbors and bays, as well as the power to
determine what will be deemed an obstruction to navigation.
See Pennsylvania v. Wheeling and Belmont Bridge Co.,
59 U.S. (18 How.) 421, 431, 15 L.Ed. 435 (1855). Pursuant
to § 10 of the Rivers and Harbors Act of 1899, Congress
delegated this power to regulate such obstructions to the
Secretary of War (now Secretary of the Army). It bears
repeating that each Owner (or predecessor in interest)
obtained a § 10 permit prior to construction of its pipeline.
a.
Addressing Owners’ “contractual agreement[s]”,
the district court held: “The licenses [issued by the Port,
requiring Owners’ to bear relocation cost,] are preempted by
the Texas Water Code.” Air Liquide, No. H-98-3982 at 5.
As discussed supra, when title to submerged lands was
granted to the Port in 1927, the Texas Legislature gave the
Port “the right, power and authority to abate and remove any
and all encroachments or structures of any kind now or
hereafter existing on said property, save such as may have
been constructed under permit from the United States War
Department [later the Corps]... .” Act of March 11, 1927,
40th Leg., R.S., ch. 292, 1927 Tex. Gen. Laws 437, 439
(emphasis added). The licenses issued by the Port provide
that, should pipeline relocation be necessary to accommodate
deepening and widening the channel, the Owner will, “at its
cost and expense and without cost or expense to the Port. . .
remove, relocate, lengthen, deepen or otherwise conform”
its pipeline to the project.
l4a
Appendix A
The district court ruled that Texas law preempted
the licenses, in part because “[t]he Port, as a creature of
the state, is bound by the regulations the state places on it.”
Air Liquide, No. H-98-3982 at 5. But, as discussed supra,
Texas law does not apply to the relocation. Again, the Corps,
not the Port, “required” it. The reason the relocation was
necessary— the project—was contemplated by the licenses.
Through them, Owners agreed that, in the event “any
installation [of pipelines] made under authority of this license
shall interfere with the widening, deepening or other revision
or improvement of the Houston Ship Channel,” Owners
would bear the relocation cost.
b.
Even if the Port-issued licenses do not control on cost-
allocation, Owners would nevertheless be bound by their
agreement with the Corps in the § 10 permits. As discussed,
because the channel is a navigable waterway of the United
States, each Owner had been required, consistent with the
federal navigational servitude, to obtain a § 10 permit prior
to laying a pipeline. In each permit, Owners: acknowledged
they were not receiving an interest in property; and agreed
that, should the Corps require, Owners would remove any
obstruction (e.g., its pipeline) at no cost to the government.
Our court’s decision in 1993 in UTTCO held that § 10
permit-holders must pay for the relocation of any portion of
a pipeline located within the original permit area. UTTCO,
7 F.3d at 441. The permits in UTTCO, as in this action,
required removal of obstructions “without expense to the
United States,” but did not explicitly require owners to bear
15a
Appendix A
the cost. Id. at 439. Nevertheless, our court held that the
federal navigational servitude provided authority to enforce
the terms of those permits at owner expense.
[N]o one seriously contests the rule that the cost
of relocating the portion of a pipeline lying
between the original banks of the bayou (i.e., the
work that was either “herein authorized” under
{ (/) of the permits or covered by the navigational
servitude) must be borne by the pipeline owner.
Id. at 444.
It was only after UTTCO that the Corps, in October 1995,
issued written guidance—Policy Guidance Letter 44—for
when it will assert its power to require removal of an
obstruction to navigation at the expense of the owner of the
obstruction. When Texas and the Port determined that they
did not have the authority to require relocation of more than
100 pipelines under the navigable waterway, they requested
the Corps to secure their relocation under the authority of its
federal navigational servitude and the corresponding § 10
permits.
The Chief’s Report was then sent by the Corps to
Congress concerning this authority and with a specific cost-
allocation provision, noting that all relocation costs would
be borne by Owners. Congress relied on this report in
deciding to approve the project and formally incorporated
the Chief’s Report in the authorizing legislation — WRDA-
96. Pub. L. No. 104-303, § 101(a)(30), 110 Stat. 3658, 3662-
66 (1996).
l6a
Appendix A
Despite this, the district court ruled: “The adoption of
the chief’s report went only as far as its engineering and
design recommendations, not its admonishments on cost
allocation.” Air Liquide, No. H-98-3982 at 5. The cost data
in the LRR, incorporated in the Chief’s Report, reflects,
however, that relocation costs are to be borne by Owners.
For example, the LRR includes tables listing individual
Owners, their specific § 10 permits, and the number and size
of their pipelines.
Indeed, portions of the LRR discuss requiring Owners
to bear pipeline relocation costs according to the § 10 permit
power. (E.g., “The cost for removal and replacement of
pipelines and docking facilities located within the area of
navigation servitude are not included in the cost estimate
because these costs are owner costs, not project costs.”’)
Owners contend, erroneously, that WRDA-86 precludes
the Corps’ exercising § 10 permit authority to enforce the
navigational servitude. For obvious reasons, Congressional
waiver of this servitude must be express. See, e.g., United
States v. Cherokee Nation of Okla., 480 U.S. 700, 707 (1987)
(holding waiver of navigational servitude “will not be
implied, but instead must be ‘surrendered in unmistakable
terms’’’) (quoting Bowen v. Public Agencies Opposed to
Social Security Entrapment, 477 U.S. 41, 52 (1986)). There
is no waiver in WRDA-86; the federal navigational servitude
remains.
In sum, the Corps properly exercised its navigational
servitude over the pipelines and waterway covered by the
§ 10 permits, requiring Owners to remove those pipelines at
their expense.
17a
Appendix A
B.
In their conditional cross-appeal, Owners claim the
project is for a deep-draft harbor within the meaning of
WRDA-86: one “authorized to be constructed to a depth of
more than 45 feet.” 33 U.S.C. § 2241(1) (emphasis added).
‘As discussed, WRDA-86 provides that obstruction relocation
costs for a deep draft harbor project are to be divided equally
between Owners and the non- Federal interest (here, the Port).
33 U.S.C. § 2211(a)(4).
In support, Owners contend that the design depth of
47 feet for the entrance channel of the project makes it one
for a deep-draft harbor. They contend also that over-depth
dredging and advance maintenance have resulted in a channel
depth greater than 45 feet.
&
The reasoning by the district court provides the correct
answer to these contentions: “The depth of the entrance is
not the depth of the channel.... When it adopted the
chief’s report, Congress authorized the construction of a
45-foot-deep harbor, not a deep-draft harbor.” Air Liquide,
No. H-98-4982 at 4 (emphasis added).
Ii.
For the foregoing reasons, those parts of the judgment
allocating the pipeline relocation cost to the Port and
amending the Corps’ removal-notices to Owners are
VACATED; that part of the judgment concerning the project
not being for a deep-draft harbor is AFFIRMED; and
judgment is RENDERED for the Corps and Port.
VACATED in PART; AFFIRMED in PART; and
RENDERED.
18a
APPENDIX B — OPINION, ORDER AND JUDGMENT
OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF TEXAS
ENTERED JANUARY 25, 2002
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
Civit ACTION H-98-3982
AIR LIQUIDE AMERICA Corp., et al.,
Plaintiffs,
versus
U.S. Army Corps OF ENGINEERS, et al.,
Defendants.
Opinion on Summary Judgment
1. Introduction.
The Houston Ship Channel is to be widened and
deepened, requiring the relocation of pipelines that pass under
it. The owners of the pipelines have been told to move their
pipelines at their own expense. The Port of Houston Authority
is required by federal and Texas law to pay for the relocation.
2. Background.
The Water Resources Development Act of 1996
authorized expansion of the Houston-Galveston Navigational
19a
Appendix B
Channel. The project is to be completed substantially in
accordance with the report of the chief engineer of the United
States Army Corps of Engineers. The report placed the
expense of pipeline removal solely on the pipeline owners;
the act says that the removal is to be accomplished at non-
federal expense.
The plaintiffs have licenses to run pipelines under the
channel. More than 65 pipelines cross beneath the channel,
and they must be lowered to complete the project.
The average cost of relocation is about one million dollars
per pipeline. The pipeline owners agreed in paragraph five
of each license to remove or relocate the pipeline at its own
cost if the pipeline interferes with the deepening or widening
of the channel. At the Port’s request, the Corps told
the owners to remove the pipelines at their own expense.
The owners want the Port to pay for the removals under the
general cost allocation plan of the Water Resources
Development Act of 1986.
Both sides have moved for summary judgment.
The plaintiffs assert that (a) the Corps’s notices to remove
are void, (b) the Port required the removal under the Texas
Water Code, and (c) the Port has taken property without
compensation. The Corps challenges the court’s jurisdiction
to hear the case. The Port claims that the 1996 act assigns
the costs to the pipeline owners and that the owners have
agreed to remove the pipelines at their own expense.
20a
Appendix B
3. The 1996 Act.
The Water Resources Development Act of 1996
authorized the expansion of the ship channel. The act permits
a project to be carried out “in accordance with the plans, and
subject to the conditions” of the report of the chief
of engineers. Public Law No. 104-303, 110 Stat. 3662.
The chief’s report was not attached to the public law and
was not introduced in or debated in Congress, much less
adopted by both houses and presented to the president.
The act itself—the law—trequires that pipeline removal in
the Houston-Galveston channel be completed at “non-Federal
expense.” 110 Stat. 3666. The pipeline owners and the Port
are the only two bodies involved in the expansion besides
the national government. The statute does not specify a
division of costs among the non-federal interests; the chief’s
report assigns the relocation costs to the owners.
4. The 1986 Act and the Texas Water Code.
The Water Resources Development Act of 1986 requires
the non-federal interest to relocate or assure the relocation
of pipelines as necessary to carry out a project. If the project
is a deep-draft harbor, half the cost is paid by the non-federal
interest and half by the pipeline owners; no division of costs
is specified for projects other than deep-draft ones. 33 U.S.C.
§ 2211(a)(4). By law, the non-federal interest in this case is
the Port of Houston. 33 U.S.C. § 2241(7), 42 U.S.C. § 1962d-
Sb(b).
If the Port requires the relocations, it does not matter
whether it removes the pipelines itself or merely assures that
2la
Appendix B
it is done; the Texas Water Code obliges the Port to pay for
the relocations at its sole expense. TEX. WaTER CopDE
§ 60.102.
5. Jurisdiction.
A. Federal Court Jurisdiction.
The Corps asserts that this court lacks jurisdiction; the
case should be heard in the Court of Federal Claims because,
though their artful pleading hides the claim, the owners
implicitly request compensation in excess of $10,000
for pipeline removal. The complaint reveals no artifice.
The Corps is not being sued for money damages; the only
claims against it are for declaratory relief. This court has
jurisdiction.
B. Standing.
The Corps claims that the owners do not have standing
to sue because their interests are not protected by the 1986
act. The statute, it argues, is meant to set guidelines for the
submission of Corps reports, not assign payment obligations.
This is incorrect. The 1986 act may be entirely procedural;
all laws, from the Constitution down, regulate government
processes to some extent. These procedures, however, are in
place to protect the interests of citizens and set standards for
assigning obligations. The plaintiffs’ pipelines cross under
the channel. They have been told to move them, which takes
planning and money. The Corps cannot issue notices requiring
the owners to pay for relocation and then claim that the statute
specifying who pays for relocation does not protect the
22a
Appendix B
owners’ interests. The owners have a personal stake in the
process dictated by the act and have standing to sue.
C. Final Agency Action.
The Corps argues that the notices are not final agency
action because they do not specify a consequence for
noncompliance. Agency action is final if it imposes an-
obligation. See United States Dept of Justice v. Federal
Labor Relations Auth., 727 F.2d 481, 493 (Sth Cir. 1984).
The notices to remove require the owners to relocate the
pipelines. The implied consequence is seizure of the pipelines
through revocation of the licenses to cross the channel. The
obligation is immediate and direct because the relocation
must be completed by a date certain and the owners must
uove the pipelines. The removal letters are final agency
action.
D. Ripeness.
The plaintiffs argue that the notices are invalid because
of their depth requirement. The Corps argues that the notices
have only a general depth and that the claim will not be ripe
for review until it issues permits with a specific depth.
The plaintiffs’ basic contention, however, is that the notice
letters themselves are not valid; it has nothing to do with
new permits. The pipelines must be moved to some lower
depth. The particular depth ultimately chosen does not matter.
The notices require removal of the pipelines; the validity of
those notices is clearly ripe for review.
23a
Appendix B
6. Deep-Draft Harbor.
The amount paid by the owners and the Port depends on
whether the project is a deep-draft harbor. A deep-draft harbor
is constructed to a depth of more than 45 feet. 33 U.S.C.
§ 2241(1). The entrance to the expanded Houston Ship
Channel will be 47 feet deep and 800 feet wide. The channel
itself is described as 45 feet deep by 530 feet wide. It needs
to be dredged to a depth of more than 45 feet for maintenance.
The depth of the entrance is not the depth of the channel.
There must necessarily be a transition from the sea floor to
the channel bottom; this length is a trivial portion of the entire
project. No pipelines cross the entrance. The critical depth
is the channel’s design depth. When it adopted the chief’s
report, Congress authorized the construction of a 45-foot-
deep harbor, not a deep-draft harbor. Silt accumulates and is
dredged; the actual depth of the harbor will vary with the
maintenance cycle. No matter how deep the channel must
occasionally be dredged to maintain a specific depth,
Congress approved a harbor with an official depth of 45 feet;
it did not endorse a deep-draft harbor and then require that
harbor to be listed as 45 feet deep.
7. Payment.
Neither the 1996 nor 1986 acts of Congress explicitly
allocate the costs of relocating the pipelines, but Texas law—
the same authority that created the Port—says the Port must
pay if it requires the removal. TEx. WaTER Cope § 60.102.
The Port has required the removal by (a) initiating and
financing the project, (b) signing a project cooperation
24a
Appendix B
agreement with the Corps, and (c) requesting removal notices
from the Corps. The argument that the Port has not “required”
the relocation of the pipelines is unsound. The Corps issued
the removal notices at the Port’s request, acting as the Port’s
agent in requiring the owners to relocate the pipelines. The
Port cannot escape its obligation to pay by shunting its order
through an agent.
The defendants argue that the chief’s report states that
the pipelines will pay for removal, and Congress adopted
this recommendation when it mandated in the 1996 act that
the project take place in substantial accordance with the
chief’s report and that pipeline relocation would occur at
non-federal expense. This is not correct. Congress authorized
the project and design described in the report, not every
sentence between the report’s covers. The adoption of the
chief’s report went only as far as its engineering and design
recommendations, not its admonishments on cost,allocation.
The prohibition on federal payment for relocation expenses
is not an implicit embrace of the report’s payment
recommendations; it is a warrant that, though the Port must
perform the removal or assure it is performed, the federal
government is not going to pay for it.
Congress intended the cost-sharing scheme of the 1986
act to remain in effect; that scheme, after looking to the Texas
Water Code, requires the Port to pay for the relocation.
8. Contractual Agreement.
The Port argues that the owners agreed in paragraph five
of the licenses to pay for the removal of the pipelines at the
25a
Appendix B
Port’s request. The licenses are preempted by the Texas Water
Code. The statute was passed to limit the power of bodies
like the Port to extract payment or performance from groups
that contract with them. The Port, as a creature of the state,
is bound by the regulations the state places on it. This includes
the requirement that the Port pay for any relocation that it
requires of a pipeline owner.
9. Conclusion.
This court has jurisdiction to hear the suit against the
Corps. The Houston Ship Channel project authorized by the
Water Resources Development Act of 1996 will not create a
deep-draft harbor. The Port has required the removal of the
pipelines. The cost-sharing plan created by the Water
Resources Development Act of 1986, combined with Texas
Water Code, requires the Port to pay for the pipeline
relocation. The 1996 act does not require the pipeline owners
to pay for the relocation of their pipelines, and the licenses’
payment provisions are preempted by the Texas Water Code.
The plaintiffs’ motion for summary judgment will be
granted in part; the defendants’ motions for summary
judgment will be denied. The notice letters from the Corps
will be amended to require the Port to pay for the pipeline
removals. The remaining claims will be dismissed as moot.
Signed January 25, 2002, at Houston, Texas.
s/ Lynn N. Hughes
Lynn N. Hughes
United States District Judge
th
26a
Appendix B
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
Civit AcTION H-98-3982
Air LiquipeE AMERICA CorpP., et al.,
Plaintiffs,
versus
U.S. Army Corps OF ENGINEERS, ef ai.,
Defendants.
Order and Final Judgment
The plaintiffs’ motion for partial summary judgment is
granted in part.
The Corps’s motion for summary judgment is denied.
The Port’s motion for summary judgment is denied.
The notice letters issued by the U.S. Army Corps of
Engineers to the plaintiffs are amended to require the
Port of Houston Authority to pay for the relocation of
the pipelines.
All other claims are dismissed without prejudice.
Signed January 25, 2002, at Houston, Texas.
™ - -
27a
Appendix B
s/ Lynn N. Hughes
Lynn N. Hughes
United States District Judge
28a
APPENDIX C — ORDER OF THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT
DENYING PETITION FOR REHEARING
FILED APRIL 1, 2004
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-20442
AIR LIQUIDE AMERICA CORPORATION; EGP FUELS
COMPANY; EQUILON PIPELINE COMPANY, LLC;
EXXON PIPELINE COMPANY; FLORIDA GAS
TRANSMISSION COMPANY; HOUSTON PIPE LINE CO;
HSC PIPELINE PARTNERSHIP LP; MOBIL CHEMICAL
COMPANY, an unincorporated division of Mobil Oil
Corporation; MOBIL PIPELINE COMPANY; SEADRIFT
PIPELINE CORPORATION; TE PRODUCTS PIPELINE
COMPANY LIMITED PARTNERSHIP; TEXAS
EASTERN TRANSMISSION CORP; UCAR PIPELINE
INCORPORATED; CHEVRON CHEMICAL CQO;
CHEVRON PIPELINE CO; DYNEGY MIDSTREAM
SERVICES; TEPPCO CRUDE OIL LLC;
Plaintiffs - Counter Defendants -
Appellees-Cross-Appellants
DUKE ENERGY TRANSPORT AND
TRADING COMPANY
Plaintiff - Counter Defendant - Appellee
29a
Appendix C
AIR PRODUCTS INCORPORATED; AIR PRODUCTS
MANUFACTURING CORPORATION; BLACK MARLIN
PIPELINE COMPANY; TEJAS SHIP CHANNEL LLC;
TEJAS SOUTH PIPELINE PARTNERSHIP
Intervenor Plaintiffs - Appellees-Cross-Appellants
V.
US ARMY CORPS OF ENGINEERS
Defendant - Counter Claimant -
Appellant-Cross-Appellee
PORT OF HOUSTON AUTHORITY OF HARRIS COUNTY,
TEXAS
Movant - Appellant-Cross-Appellee
AIR LIQUIDE AMERICA CORPORATION; EGP FUELS
COMPANY; EQUILON PIPELINE COMPANY LLC;
EXXON PIPELINE CO; FLORIDA GAS TRANSMISSION
COMPANY; HOUSTON PIPE LINE CO; HSC PIPELINE
PARTNERSHIP LP; MOBIL CHEMICAL COMPANY, an
unincorporated division of Mobil Oil Corporation; MOBIL
PIPELINE COMPANY; SEADRIFT PIPELINE
CORPORATION; TE PRODUCTS PIPELINE COMPANY
LIMITED PARTNERSHIP; TEXAS EASTERN
TRANSMISSION CORP; UCAR PIPELINE INC
Plaintiffs - Appellees-Cross-Appellants
30a
Appendix C
DUKE ENERGY TRANSPORT AND
TRADING COMPANY
Plaintiff - Appellee
V.
PORT OF HOUSTON AUTHORITY OF HARRIS COUNTY,
TEXAS
Defendant - Appellant-Cross-Appellee
Appeals from the United States District Court for the
Southern District of Texas, Houston
ON PETITION FOR REHEARING EN BANC
(Opinion 1/30/04, 5 Cir., : F.3d )
Before BARKSDALE, DeMOSS, and BENAVIDES,
Circuit Judges.
PER CURIAM:
( Y ) Treating the Petition for Rehearing En Banc as a Petition
for Panel Rehearing, the Petition for Panel Rehearing is
DENIED. No member of the panel nor judge in regular active
service of the court having requested that the court be polled
on Rehearing En Banc (Fed. R. App. P. and Sth Cir. R. 35),
the Petition for Rehearing En Banc is DENIED.
* * *
* Judges King, Higginbotham, Jones, Wiener, Dennis, and
Clement did not participate in the consideration of the petition for
rehearing en banc.
3la
Appendix C
ENTERED FOR THE COURT:
s/ Rhesa H. Barksdale
United States Circuit Judge
32a
APPENDIX D — RELEVANT STATUTE
33 U.S.C. § 2201
§ 2211. Harbors
(a) Construction
(1) Payments during construction
The non-Federal interests for a navigation project for a
harbor or inland harbor, or any separable element thereof on
which a contract for physical construction has not been
awarded before November 17, 1986, shall pay, during the
period of construction of the project, the following costs
associated with general navigation features:
(A) 10 percent of the cost of construction of the-
portion of the project which has a depth not in excess
of 20 feet; plus
(B) 25 percent of the costs of construction of the
portion of the project which has a depth in excess of
20 feet but not in excess of 45 feet; plus
(C) 50 percent of the cost of construction of the
portion of the project which has a depth in excess of
45 feet.
(2) Additional 10 percent payment over 30 years
The non-Federal interests for a project to which
paragraph (1) applies shall pay an additional 10 percent of
the cost of the general navigation features of the project in
33a
Appendix D
cash over a period not to exceed 30 years, at an interest rate
determined pursuant to section 2216 of this title. The value
of lands, easements, rights-of-way, and relocations provided
under paragraph (3) and the costs of relocations borne by
the non-Federal interests under paragraph (4) shall be credited
toward the payment required under this paragraph.
(3) Lands, easements, and rights-of-way
Except as provided under section 2283(c) of this title,
the non-Federal interests for a project to which paragraph
(1) applies shall provide the lands, easements, rights-of-way,
and relocations (other than utility relocations under paragraph
(4)) necessary for the project, including any lands, easements,
rights-of-way, and relocations (other than utility relocations
accomplished under paragraph (4)) that are necessary for
dredged material disposal facilities.
(4) Utility relocations
The non-Federal interests for a project to which
paragraph (1) applies shall perform or assure the performance
of all relocations of utilities necessary to carry out the project,
except that in the case of a project for a deep-draft harbor
and in the case of a project constructed by non-Federal
interests under section 2232 of this title, one-half of the cost
of each such relocation shall be borne by the owner of the
facility being relocated and one-half of the cost of each such
relocation shall be borne by the non-Federal interests.
34a
Appendix D
(5) Dredged material disposal facilities for project
construction
In this subsection, the term “general navigation features”
includes constructed land-based and aquatic dredged material
disposal facilities that are necessary for the disposal of
dredged material required for project construction and for
which a contract for construction has not been awarded on
or before October 12, 1996.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.