Benham v. Ozark Materials River Rock, LLC

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS March 22, 2018
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
DAVID BENHAM,
Plaintiff-Appellee,
v. No. 17-5069
OZARK MATERIALS RIVER ROCK,
LLC,
Defendant-Appellant.
_________________________________
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 4:11-CV-00339-JED-FHM)
_________________________________
Wilfred Wright, Claremore, Oklahoma, for Defendant-Appellant.
Krystina Phillips (Jason B. Aamodt and Dallas L.D. Strimple of Indian and
Environmental Law Group, PLLC, with her on the brief), Tulsa, Oklahoma, for Plaintiff-
Appellee.
_________________________________
Before BRISCOE, KELLY, and BACHARACH, Circuit Judges.
_________________________________
KELLY, Circuit Judge.
_________________________________
Defendant-Appellant Ozark Materials River Rock, LLC, appeals from the
district court’s order approving Plaintiff-Appellee David Benham’s proposed
restoration plan of unlawfully filled wetlands in Saline Creek, Benham v. Ozark
Materials River Rock, LLC (Benham II), No. 11-CV-339-JED-FHM (N.D. Okla.
June 1, 2017), ECF No. 184. Ozark raises several issues on appeal challenging the
district court’s order and underlying findings of fact and conclusions of law, Benham
v. Ozark Materials River Rock, LLC (Benham I), No. 11-CV-339-JED-FHM, 2015
WL 235759 (N.D. Okla. Jan. 16, 2015), ECF No. 160. Exercising jurisdiction under
28 U.S.C. § 1291, we affirm.
Background
This appeal arises from a private enforcement action under Section 505 of the
Clean Water Act (CWA), 33 U.S.C. § 1365. Ozark is a sand and gravel mining
company that operates on property adjacent to Saline Creek in Oklahoma. Mr.
Benham recreates in Saline Creek and claims that Ozark’s operations have degraded
his ability to do so. In March 2011, Mr. Benham served Ozark with a notice letter
pursuant to Section 505, informing the company that it was violating Section 404 of
the CWA, 33 U.S.C. § 1344. Section 404 requires a permit from the Army Corps of
Engineers to discharge dredge or fill material into navigable waters if the activity
disturbs more than one-half acre of wetland, and Ozark does not have a Section 404
permit.
The Army Corps of Engineers had inspected Ozark’s operations in 2010 (and
would do so again in 2012 and 2013) by driving through the property, but it found no
CWA violations. Nevertheless, after receiving Mr. Benham’s notice, Ozark hired an
environmental consulting firm to perform a Section 404 impact analysis of Ozark’s
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Saline Creek operations. By June 1, 2011, Ozark had not addressed the CWA
violations that Mr. Benham alleged in his notice, so he filed the instant citizen suit,
as authorized by Section 505.
The district court held a bench trial and issued findings of fact and conclusions
of law determining that Ozark violated Section 404 by disturbing more than one-half
acre of wetland through the discharge of dredge and fill material. Benham I, 2015
WL 235759, at *9. Specifically, the court found that Ozark’s construction of a
roadway in Saline Creek and the filling of its surrounding wetlands without a permit
constitute a continuing violation of the CWA. Id. The district court imposed a civil
penalty of $35,000 and ordered briefing on a restoration plan for the unlawfully filled
wetlands. Id. at *10. On June 1, 2017, the district court issued an order adopting
(substantially all of) Mr. Benham’s proposed restoration plan. Benham II, slip op. at
1. One element of the plan created a conservation easement for the restoration site.
Id. at 9–10.
Discussion
Ozark raises six issues on appeal, contending that (1) Mr. Benham lacks Article III
standing, (2) Mr. Benham’s citizen suit notice letter was inadequate, (3) the district court
erroneously found that Ozark violated the CWA, (4) the district court erroneously
admitted evidence prepared by Ozark’s withdrawn expert, (5) the district court’s order is
unconstitutional, and (6) Mr. Benham’s suit falls within the primary jurisdiction of the
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Army Corps of Engineers. For the following reasons, we reject Ozark’s arguments and
affirm.
A. Mr. Benham Has Article III Standing
Whether a plaintiff has Article III standing is a jurisdictional question that we
review de novo. Wilderness Soc’y v. Kane County, 632 F.3d 1162, 1168 (10th Cir.
2011). Article III standing requires showing (1) an “injury in fact” that is (2) “fairly
traceable to the challenged action of the defendant” and is (3) likely to “be redressed
by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc., 528 U.S. 167, 180–81 (2000). The injury must be “concrete and particularized”
and “actual or imminent, not conjectural or hypothetical.” Id. at 180. “The party
invoking federal jurisdiction bears the burden of establishing these elements . . . with
the manner and degree of evidence required at the successive stages of the litigation.”
Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). At the final stage of litigation,
the evidence produced at trial must adequately support the facts establishing
standing. Id.
“[E]nvironmental plaintiffs adequately allege injury in fact when they aver that
they use the affected area and are persons ‘for whom the aesthetic and recreational
values of the area will be lessened’ by the challenged activity.” Laidlaw, 528 U.S. at
183 (quoting Sierra Club v. Morton, 405 U.S. 727, 735 (1972)). Here, Mr. Benham
has shown injury in fact by maintaining that he regularly swims and fishes in Saline
Creek and that his ability to do so has been diminished by Ozark’s discharge of
material into the creek and its surrounding wetlands. Such recreational impairments
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constitute injury in fact for a plaintiff filing a citizen suit under the CWA. See id. at
181–83.
To satisfy the traceability requirement, the defendant’s conduct must have
caused the injury. Lujan, 504 U.S. at 560. Mr. Benham testified that the quality of
Saline Creek did not begin to decline until after Ozark began its mining operations,
and Mr. Benham’s expert testified that Ozark’s mining operations caused the
degradation in quality. This, coupled with the district court’s finding that Ozark
unlawfully discharged materials into Saline Creek’s wetlands, Benham I, 2015 WL
235759, at *7–9, sufficiently demonstrates that Mr. Benham’s injury is fairly
traceable to Ozark’s unlawful actions.
Finally, the redressability element is handily met: the injunctive relief and civil
penalties sought by Mr. Benham and ordered by the district court will restore the
unlawfully filled wetlands and deter future violations. See Laidlaw, 528 U.S. at 185–
86. Altogether, Mr. Benham has Article III standing to bring his citizen suit.
B. Mr. Benham’s Citizen Suit Notice Letter Was Adequate
Under Section 505 of the CWA, a plaintiff must provide notice of a violation
before commencing a citizen suit. 33 U.S.C. § 1365(b) (2012). We review the
adequacy of a citizen suit notice letter de novo. Karr v. Hefner, 475 F.3d 1192, 1196
(10th Cir. 2007). An adequate notice provides “sufficient information to permit the
recipient to identify the specific standard, limitation, or order alleged to have been
violated, the activity alleged to constitute a violation, the person or persons
responsible for the alleged violation, the location of the alleged violation, [and] the
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date or dates of such violation.” Id. at 1200 (alteration in original) (quoting 40
C.F.R. § 135.3(a) (2006)). The purpose of this notice is to give an alleged violator of
the CWA “an opportunity to bring itself into complete compliance with the Act and
thus likewise render unnecessary a citizen suit.” Gwaltney of Smithfield, Ltd. v.
Chesapeake Bay Found., Inc., 484 U.S. 49, 60 (1987). A notice, then, must not
merely “generally orient[] the agency or violator as to the type of violation.” Karr,
475 F.3d at 1200 (quoting Cal. Sportfishing Prot. All. v. City of West Sacramento,
905 F. Supp. 792, 799 (E.D. Cal. 1995)). Rather, “the notice’s identification of the
alleged violations must be clear.” Id.
In relevant part, Mr. Benham’s notice provided:
Discharges of dredged or fill material into waters of the United
States may only occur if permitted by the Army Corps of Engineers
(herein the “ACOE”). 33 U.S.C. § 1311(a); 33 U.S.C. § 1344(a).
Waters of the United States, as defined in section 404, includes
wetlands, which are areas “inundated or saturated by surface or ground
water at a frequency and duration sufficient to support, and that under
normal circumstances do support, a prevalence of vegetation typically
adapted for life in saturated soil conditions.” 33 C.F.R. § 328.3(b); see
also U.S. v. Riverside Bayview Homes, 474 U.S. 121, 131–32 & n.8
(1985). Saline Creek is surrounded by wetlands. A significant portion
of your mining operations have both dredged and filled these designated
wetlands. See Attachment 2. The ACOE has no record of you being
issued a section 404 permit for these dredge and fill activities.
Any action which results in the filling of waters of the United
States, including wetlands such as the ones you have filled, must be
permitted through the ACOE. 33 U.S.C. [§] 1311(a); 33 U.S.C.
[§] 1342. You have violated this section by placing large amounts of
dirt, sand, and gravel into the center of Saline Creek without a permit in
order to form a more convenient access road for [your] trucks. This
road stretches underneath the S 4437 road and connects land owned by
the Grand River Dam Authority with land owned by you. The attached
photograph shows you filling this wetland on September 14, 2006. See
Attachment 3. The location of your illegal discharges of fill material is
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identified on the attached air photo at approximately the point labeled
“l.” See Attachment 2.
1 Aplee. Supp. App. 19. The notice describes the specific pollutants (dirt, sand, and
gravel), specific locations (a road identified by description and aerial photograph),
the specific sections of the CWA that were violated (33 U.S.C. §§ 1311(a), 1342,
1344(a)), and a specific date of a violation (September 14, 2006). These details
provided Ozark with sufficient information to clearly identify the violation and thus
constitute adequate notice. See Karr, 475 F.3d at 1201 (comparing cases and
approving of a notice that listed “specific pollutants, specific locations, and specific
permits the defendant was alleged to have violated”).
Ozark also contends that the district court erred by allowing Mr. Benham to
prosecute claims that were not identified in his notice. But Mr. Benham’s notice
specifically mentions the road created within Saline Creek. Accordingly, the district
court’s determination that Mr. Benham’s “allegations regarding the roadway within
Saline Creek and the filling of its surrounding wetlands are within the scope of the
Notice Letter,” Benham I, 2015 WL 235759, at *9, is fully supported.
C. The District Court Did Not Clearly Err by Finding That Ozark Violated the CWA
We review the district court’s legal conclusions de novo and its factual
findings for clear error, giving great deference to credibility determinations.
Raytheon Aircraft Co. v. United States, 590 F.3d 1112, 1118, 1120 (10th Cir. 2009).
We may reverse only if the district court’s finding “is without factual support in the
record or if, after reviewing all the evidence, we are left with a definite and firm
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conviction that a mistake has been made.” Aquila, Inc. v. C.W. Mining, 545 F.3d
1258, 1263 (10th Cir. 2008) (quoting Keys Youth Servs., Inc. v. City of Olathe, 248
F.3d 1267, 1274 (10th Cir. 2001)).
After a bench trial, the district court found that the testimony of Mr. Benham’s
expert witness and the records regarding the existence of filled wetlands “establish
that the half-acre threshold for filled wetlands requiring an individual permit has
been surpassed” and that “Ozark has discharged dredge and fill materials into Saline
Creek in excess of one-half of an acre without an individual permit as required under
the CWA.” Benham I, 2015 WL 235759, at *6–7. This finding came after the
district court heard conflicting testimony at trial regarding the construction of the
roadway in Saline Creek. Ozark’s CEO testified that a neighboring landowner had
built the road prior to Ozark’s purchase of the land in 1991. Id. at *6. But one of the
landowner’s employees attested that the landowner did no such thing and that “he has
observed Ozark employees maintaining, rebuilding, and driving on the road.” Id.
Further, Mr. Benham testified that Ozark began building the road in 2005 and
extended it over time as it mined gravel, and the road can be seen in an aerial
photograph taken in 2006 but does not appear in a photograph taken in 1991. Id.
Based on this evidence, the district court found that “Ozark constructed the road by
placing dredge and fill material into Saline Creek.” Id. at *7. It found Mr. Benham’s
testimony credible because it was detailed and corroborated by photographs; by
contrast, it found that the CEO’s testimony “was often evasive and suffered from a
lack of recollection as to key issues” and was contradicted by the testimony of the
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neighboring landowner’s employee. Id. The district court’s findings are not clearly
erroneous.
The district court then concluded that “Ozark’s deposition of dredge and fill
material in excess of . . . one-half acre . . . constitutes a continuing violation of
Section 404 of the CWA that renders Ozark subject to liability.” Id. at *9. It
determined that Ozark’s violation was “continuing” based on the premise that “[u]ntil
a pollutant, such as fill material, that has been placed in a wetland is removed, its
presence constitutes a continuing violation.”1 Id. at *8 (citing Sasser v. Adm’r, U.S.
EPA, 990 F.2d 127, 129 (4th Cir. 1993)). Ozark does not contest this definition of a
“continuing” violation; instead, it challenges the adequacy of factual support for such
a finding. Having reviewed the underlying support, we affirm the district court’s
conclusion that the roadway and filling of wetlands in Saline Creek constitute a
continuing violation of the CWA.
D. The District Court Did Not Abuse Its Discretion by Admitting Evidence Prepared
by Ozark’s Withdrawn Expert
We review a district court’s admission of evidence for abuse of discretion.
Prager v. Campbell Cty. Mem’l Hosp., 731 F.3d 1046, 1054 (10th Cir. 2013). The
district court’s finding that Ozark violated the CWA was based, in part, on evidence
created by Enercon, an environmental consulting firm that Ozark hired after
1
Language from Justice Scalia’s concurrence in Gwaltney of Smithfield, Ltd.
v. Chesapeake Bay Foundation, Inc., 484 U.S. 49 (1987), supports such a ruling:
“When a company has violated an effluent standard or limitation, it remains . . . ‘in
violation’ of that standard or limitation so long as it has not put in place remedial
measures that clearly eliminate the cause of the violation.” 484 U.S. at 69 (Scalia, J.,
concurring).
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receiving Mr. Benham’s citizen suit notice letter. See Benham I, 2015 WL 235759,
at *7 (“[T]he records regarding the existence of filled wetlands created by Enercon
establish that the half-acre threshold for filled wetlands requiring an individual
permit has been surpassed.”). Ozark initially intended to call Enercon as an expert
witness at trial but later changed its mind. On February 12, 2014, Ozark notified the
court that it was withdrawing its expert. It also objected to several of Mr. Benham’s
trial exhibits that contained material previously obtained from Enercon on the basis
that Federal Rule of Civil Procedure 26(b)(4)(C)–(D) protected the documents from
disclosure. Ozark renewed its Rule 26 objections at trial and added that the exhibits
were inadmissible hearsay; the district court overruled its objections.
Ozark’s reliance on Rule 26 as a means of excluding expert material is
misplaced. Rule 26(b)(4)(C) and (D) protect against the disclosure of attorney
communications with testifying experts and facts known and opinions held by
nontestifying experts, respectively. But while they protect against the discovery of
this expert material, they have nothing to do with the admissibility of already-
disclosed material. Mr. Benham states that he acquired the Enercon documents
through an unopposed subpoena on August 19, 2012. If the documents contained
attorney-expert communications, a Rule 26(b)(4)(C) objection would have been
appropriate at that time. And had Ozark withdrawn its expert before the subpoena, a
Rule 26(b)(4)(D) objection would also have been well founded. Nearly two years
after disclosure, though, Rule 26(b)(4) provides no protection against admitting the
documents as evidence at trial — even if Ozark no longer planned to call its expert as
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a witness. Cf. SEC v. Koenig, 557 F.3d 736, 744 (7th Cir. 2009) (“Disclosure of the
report ends the opportunity to invoke confidentiality.”).
Additionally, Ozark has waived its hearsay argument by inadequately briefing
the issue. Federal Rule of Appellate Procedure 28(a)(8)(A) requires an argument to
contain “appellant’s contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant relies.” Ozark’s brief
mentions that the district court admitted the documents over Ozark’s hearsay
objection but offers no explanation for why this was erroneous. As a result, Ozark
has waived its argument that the documents were inadmissible hearsay, see SCO
Grp., Inc. v. Novell, Inc., 578 F.3d 1201, 1226 (10th Cir. 2009) (“An issue or
argument insufficiently raised in a party’s opening brief is deemed waived.”), and we
are unable to say that the district court abused its discretion by admitting them into
evidence.
E. Ozark Forfeited Its Constitutional Arguments
For the first time on appeal, Ozark argues that the district court’s order of a
conservation easement violates the Due Process and Takings Clauses of the Fifth
Amendment. As Ozark did not raise this theory before the district court,2 the theory
was forfeited and our review of the district court’s order is for plain error. See
2
Ozark had the opportunity to raise this argument in its objection to Mr.
Benham’s proposed mitigation plan, Benham v. Ozark Materials River Rock, LLC,
No. 11-CV-339-JED-FHM (N.D. Okla. Dec. 29, 2016), ECF No. 180, and its
objection to Mr. Benham’s supplement to his proposed mitigation plan, Benham v.
Ozark Materials River Rock, LLC, No. 11-CV-339-JED-FHM (N.D. Okla. Jan. 26,
2017), ECF No. 183 — but did not.
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Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1128 (10th Cir. 2011). But Ozark did
not argue for plain error review in its brief, and “the failure to argue for plain error
and its application on appeal . . . marks the end of the road for an argument for
reversal not first presented to the district court.” Id. at 1131. Consequently, we
decline to consider Ozark’s constitutional arguments.3
F. The District Court Did Not Abuse Its Discretion by Not Invoking the Primary
Jurisdiction Doctrine
We review a district court’s decision to invoke the primary jurisdiction
doctrine for abuse of discretion. TON Servs., Inc. v. Qwest Corp., 493 F.3d 1225,
1239 (10th Cir. 2007). The primary jurisdiction doctrine allows courts to stay
proceedings or dismiss an action without prejudice when “a decision by a court
would threaten the uniformity of a regulatory scheme or require the court to confront
issues of fact outside of its conventional experience” so that the parties can “seek a
decision before the appropriate administrative agency.” S. Utah Wilderness All. v.
Bureau of Land Mgmt., 425 F.3d 735, 751 (10th Cir. 2005). Here, there are no
threats to the uniformity of a regulatory scheme or issues outside the conventional
experience of the courts. In fact, Section 505 of the CWA explicitly contemplates
that district courts have jurisdiction to hear citizen suits. See 33 U.S.C. § 1365.
Accordingly, the district court did not abuse its discretion by refusing to stay
proceedings or dismiss the action without prejudice under the primary jurisdiction
3
At oral argument, the parties were uncertain of the conservation easement’s
duration. Our disposition does not prevent the parties from seeking clarification from
the district court on this issue.
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doctrine. See Raritan Baykeeper v. NL Indus., Inc., 660 F.3d 686, 695 (3d Cir. 2011)
(noting that the primary jurisdiction doctrine would apply to CWA citizen suits only
in exceptional cases, such as where a suit would disrupt a formal administrative
proceeding).
Though framed as a primary jurisdiction issue, the essence of Ozark’s
argument is that Mr. Benham should be prohibited from bringing his citizen suit
because the Army Corps of Engineers is primarily responsible for the enforcement of
the CWA. While it is true that Section 505 would prohibit Mr. Benham’s suit if the
Corps were “diligently prosecuting” an enforcement action, see 33 U.S.C.
§ 1365(b)(1)(B), the facts presented at trial show that the Corps was not diligently
pursuing an enforcement action against Ozark. The district court found that the
Corps had conducted several inspections of Ozark’s operations by driving through
the property and had concluded each time that there were no CWA violations.
Benham I, 2015 WL 235759, at *4. Consequently, the Corps was not diligently
prosecuting an enforcement action, and Mr. Benham was entitled to bring his citizen
suit.
For the first time on appeal, Ozark argues that the CWA violation in the instant
case covers the same set of facts as a 2005 violation. As an action for a “wholly
past” violation would deprive the court of subject matter jurisdiction, see Gwaltney,
484 U.S. at 64, this argument can be made at any stage of the litigation, see Champlin
Petroleum Co. v. Ingram, 560 F.2d 994, 996 (10th Cir. 1977). However, even
assuming that Mr. Benham’s suit overlaps with the 2005 violation (which Mr.
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Benham contests), this is not an action for a “wholly past” violation. Rather, the
district court found that Ozark’s deposits of dredge and fill material constitute a
“continuing” violation of the CWA, Benham I, 2015 WL 235759, at *9, over which a
federal court has subject matter jurisdiction, see Gwaltney, 484 U.S. at 59.
Consequently, the district court properly exercised jurisdiction over Mr. Benham’s
citizen suit.
Ozark also attempts to frame its primary jurisdiction argument as a ripeness
issue, contending that the Army Corps of Engineers has not made a final agency
determination regarding the delineation of wetlands in Saline Creek. But Mr.
Benham is not an “affected party” subject to the Corps’s exhaustion of administrative
remedies provision. See 33 C.F.R. §§ 331.2, 331.12 (2017). Moreover, Section 505
contains the “diligently prosecuting” requirement, not an administrative exhaustion
requirement. And the evidence shows that the Corps was not diligently prosecuting
an enforcement action against Ozark. The Corps’s CWA enforcement
responsibilities therefore have no bearing on whether Mr. Benham was able to bring
suit in this case.
In sum, the district court had jurisdiction over Mr. Benham’s citizen suit, and
invoking the primary jurisdiction doctrine would not have been appropriate.
AFFIRMED.
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