John McClung v. Colonel Courtney Paul

United States Court of Appeals
For the Eighth Circuit
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No. 14-3463
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John McClung; Kim McClung
lllllllllllllllllllllPetitioners - Appellants
v.
Colonel Courtney W. Paul, in his official capacity as District Engineer, Little Rock
District, U.S. Army Corps of Engineers; United States Department of the Army
lllllllllllllllllllllRespondents - Appellees
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Appeal from United States District Court
for the Eastern District of Arkansas - Batesville
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Submitted: April 13, 2015
Filed: June 8, 2015
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Before MURPHY, COLLOTON, and KELLY, Circuit Judges.
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MURPHY, Circuit Judge.
John and Kim McClung bought a vacation home next to Greers Ferry Lake and
received a permit to maintain a boat dock and stone steps on the public land between
their property and the lake. The lake and shoreline area is federal government
property managed by the Army Corps of Engineers. The Corps twice sanctioned the
McClungs for violating permit conditions and regulations, first for causing herbicide
to be sprayed on public property and then for removing brush from the previously
sprayed land. In its final sanctions order the Corps revoked the McClungs' permit for
the dock and steps. The McClungs challenged this administrative decision in federal
court. The district court1 determined that the sanctions were not arbitrary and
capricious and did not violate due process. The McClungs appeal, and we affirm.
I.
A.
The Army Corps of Engineers manages federal water resource development
projects such as Greers Ferry Lake under 16 U.S.C. § 460d, part of the 1944 Flood
Control Act. Regulations governing public use of such federal water resources are
found in 36 C.F.R. pt. 327. No private structure may be located on public lands or
waters without a permit, and removal or alteration of public property (including
vegetation) is prohibited without written permission. 36 C.F.R. §§ 327.14, 327.20,
327.30(f)(1). The Corps issues permits for private shoreline use in accordance with
the Shoreline Management Plan (SMP) for each project. 36 C.F.R. §§ 327.19(e),
327.30(d)(2)-(3). The Corps district commander may revoke permits "when it is
determined that the public interest requires such revocation or when the permittee
fails to comply with terms and conditions of the permit [or] the Shoreline
Management Plan." 36 C.F.R. § 327.30, app. A(3).
In 2010, the McClungs purchased a vacation property in Heber Springs,
Arkansas which is adjacent to the government owned shoreline of Greers Ferry Lake.
The prior owner of this property had received a permit from the Corps allowing a boat
dock and a set of stone steps on the lakeshore. Such permits are nontransferable and
1
The Honorable Kristine G. Baker, United States District Judge for the Eastern
District of Arkansas.
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are voided upon the sale of the property. 36 C.F.R. § 327.30(g). Before obtaining
their own permit, the McClungs met with Ranger Gary Ivy in September 2011 and
were informed of permit procedures and regulations. The McClungs applied for a
shoreline use permit for the dock and steps, and the Corps issued such a permit on
January 4, 2012.
The permit issued to the McClungs stated that one of its conditions was
compliance "with all applicable provisions of 36 C.F.R., ch.3, part 327 and the Greers
Ferry Shoreline Management Plan." Violation of permit conditions may be punished
by revocation of the permit. 36 C.F.R. § 327.30, app. A(3). Specific shoreline use
permit conditions from 36 C.F.R. § 327.30, app. C were printed on the back,
including condition 18: "No vegetation other than that prescribed in the permit will
be damaged, destroyed or removed. No vegetation of any kind will be planted, other
than that specifically prescribed in the permit." Sections 8-01 and 8-02 of the Greers
Ferry SMP authorize permits for certain types of vegetation modification including
removal of underbrush within 50-100 feet of a residence, but the use of chemicals for
vegetation modification is prohibited. The McClungs received a "mowing permit"
with a map specifying the area within 100 feet of their home where vegetation
modification was permitted.
On June 4, 2012, Ranger Ivy investigated a vegetation kill on the shoreline
between the McClungs' property and the lake. He determined that 8,400 square feet
of federal land had been sprayed with herbicide and that the width of the affected area
was approximately the same as the width of the McClungs' lot. The area sprayed with
herbicide was not part of the McClungs' mowing permit area. When Ivy contacted
John McClung, McClung explained that he had hired someone to spray his property
and that person must have mistakenly sprayed the public property. The
administrative record contains a memo from Ivy describing this investigation and
pictures he took of the affected land.
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The Corps determined that the herbicide spray violated the conditions of the
McClungs' shoreline use permit. An internal Corps memorandum included in the
administrative record shows that the Corps considered a fine of $75 or $250 as
possible sanctions. However, the operations project manager recommended that
Colonel Masset2 instead revoke the McClungs' permit in its entirety for this herbicide
violation. The memorandum expresses concern that a small fine would "establish[]
precedence that it is 'ok' to violate the terms and conditions of permits" and could
"lead to additional violations by neighbors" who might decide that it is worth paying
a fine to get a better view of the lake. This internal memorandum acknowledged that
revoking the permit for this first time violation "may be seen as punitive . . . [but this]
is the way of the future. Somebody has to be first. It is not out of our authority to
take this action, . . . just out of the norm."
Partially adopting the recommendation from this memorandum, Colonel Masset
decided to restrict any use of the McClungs' boat dock for two years and to terminate
the permit for the stone steps. A letter informed the McClungs of this sanction. It
stated that they had violated 36 C.F.R. § 327.14(a), which prohibits "[d]estruction,
injury, defacement, removal or any alteration of public property including . . .
vegetative growth," permit conditions found in 36 C.F.R. § 327.30, and the
prohibition on the use of chemicals for vegetation modification found in Greers Ferry
SMP, § 8-02(c). The McClungs would be required to remove the steps or to pay for
their removal. The letter also instructed that the McClungs "must immediately cease
mowing on public property."
2
At the time, Colonel Glen A. Masset was the Corps District Engineer for the
area including Greers Ferry Lake.
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B.
The McClungs sought and Colonel Masset granted a stay of the requirement
that they remove the stone steps so they could pursue an internal appeal. They
subsequently submitted an appeal to the Corps and requested a hearing. Included
with the appeal was a letter from engineer Don Potter which stated that he had
examined the steps and had concluded that their removal could have negative
environmental effects such as erosion.
Before the hearing on this internal appeal, Ranger Ivy discovered on January
16, 2013 that the McClungs had cleared the remaining live and dead vegetation from
the previously sprayed shoreline area. Colonel Masset was notified about Ivy's
discovery, and photos showing some vegetation regrowth on October 4, 2012 and the
bare shoreline on January 16, 2013 were included in the administrative record.
Colonel Masset sent a second violation letter to the McClungs stating that their
consolidated dock and steps permit was permanently revoked due to "repeated
violations" of 36 C.F.R. § 327.14 and permit conditions found in 36 C.F.R. § 327.30,
app. C, including the prohibition on vegetation modification found in condition 18.
At a hearing on March 28, 2013 before Colonel Masset, the McClungs
admitted that they had cleared shoreline vegetation but said that they did so because
they wanted to rectify the herbicide damage by replanting the area. No transcript was
made of the hearing. The McClungs allege that Colonel Masset commented that he
"was seen as too lenient on other violators" and that prior violators "got away with
improving the value of their land for insignificant monetary punishment." They also
claim that they explained to Colonel Masset that they had removed the brush by hand,
not with machines, and argued that therefore no "mowing" had occurred. Included
in the administrative record is a receipt the McClungs provided from a nursery and
landscaping company as proof of their intent to replant the area and their proposed
settlement which would have involved a fine and required them to pay for
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remediation of the shoreline. The McClungs had never obtained permission from the
Corps to plant anything on public lands.
The Corps issued a final administrative order on April 11, 2013 revoking the
McClungs' permit for the boat dock and stone steps. The order included factual
findings that the McClungs were responsible for the initial herbicide spray and that
they had later returned to the same area "and mowed the remaining and recovering
vegetation that had not been killed earlier by the herbicide." It stated that these
actions violated 36 C.F.R. § 327.14(a) and Greers Ferry SMP § 8-02. The order listed
several reasons for imposing permit revocation as the penalty. The McClungs had
been made aware of applicable regulations and the August 7 violation letter had
instructed them to "cease mowing on public property." Rather than heeding this
warning, "McClung blatantly disregarded the letter by proceeding to mow [federal
government] property . . . despite its owner's direct prohibition against such action."
The Corps concluded that no lesser penalty would be appropriate because "[s]uch
behavior is not demonstrative of either remorse or understanding, but rather an
inability to acknowledge the fundamental integrity of government property."
C.
On May 10, 2013, the McClungs petitioned for review of this final
administrative order in the Eastern District of Arkansas under the Administrative
Procedures Act, 5 U.S.C. §§ 701-06. The McClungs claimed that the decision to
revoke their permits was arbitrary and capricious and that their constitutional right
to due process had been denied. They moved to supplement the administrative
record, arguing that it was inadequate because it lacked a transcript of the proceeding
before Colonel Masset and that additional information about prior sanctions decisions
was necessary. The Corps opposed this motion and also moved to strike exhibits to
the McClungs' district court briefs which were not part of the administrative record.
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The district court denied the McClungs' motion to supplement the record, granted the
Corps' motion to strike, and denied the petition for review. The McClungs appeal.
II.
A.
The McClungs challenge the district court denial of their motion to supplement
the record. Judicial review under the Administrative Procedures Act is ordinarily
"limited to the administrative record that was before the agency when it made its
decision," precluding a court from "conducting a de novo trial and substituting its
opinion for that of the agency." Voyageurs Nat'l Park Ass'n v. Norton, 381 F.3d 759,
766 (8th Cir. 2004). If the contemporaneous administrative record leaves "no need
for additional explanation of the agency decision," a party petitioning for review must
make a "strong showing of bad faith or improper behavior" before a court will allow
supplementation of the record. Id. (quotation omitted). The McClungs argue that
they have made a showing of bad faith or improper behavior because statements made
by Colonel Masset show that he was biased against them and because the record fails
to explain the administrative decision. They contend that the record is deficient
because the administrative proceedings were "irregular," specifically citing the fact
that no transcript was made of the hearing before Colonel Masset and suggesting that
the final agency decision was arbitrary rulemaking.
The district court denial of the motion to supplement the record is "entitled to
deference absent a gross abuse of discretion," Voyageurs National Park, 381 F.3d at
766 (quotation omitted), and there was no abuse of discretion here. The record
adequately explains the basis for the decision to revoke the permits: the Corps had
concluded that the McClungs twice violated 36 C.F.R. § 327.14(a) and other permit
conditions by causing herbicide to be sprayed on public property and by later
removing vegetation from the same area. Documents in the record showing the basis
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for this decision include Colonel Masset's decision letters, internal memoranda,
Ranger Ivy's documentation of the violations, and records of a comparable sanction
decision. Statements Colonel Masset allegedly made at the hearing do not show bad
faith or bias. The McClungs have not presented any authority showing that an
informal hearing was improper under the circumstances. Regulations describing
procedures for permit revocation require a hearing upon the permittee's request, but
they do not include substantive requirements for the hearing such as the creation of
a transcript. See 36 C.F.R. § 327.30, app. C ¶ 21. While the McClungs suggest that
the agency action was rulemaking, they do not identify any new rule created, and the
final order simply applied already existing regulations and permit conditions. The
district court did not err in determining that supplementation of the record was
unwarranted in this case.
The McClungs also argue that the district court should have granted their
request to supplement the record because the administrative decision did not include
a statement addressing the environmental consequences of removing the stone steps
as required by the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.
(NEPA). NEPA environmental impact statement requirements apply to "proposals
for legislation and other major Federal actions significantly affecting the quality of
the human environment." 42 U.S.C. § 4332(2)(C). They do not apply to this case
because nothing in the record nor any of the additional exhibits submitted by the
McClungs show that the revocation of their shoreline use permit was a major federal
action.
B.
The McClungs argue that the district court should have set aside the Corps'
decision as arbitrary and capricious. See 5 U.S.C. § 706(2)(a). Our review of the
district court decision that the Corps' order did not violate the Administrative
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Procedures Act is de novo. Friends of the Norbeck v. U.S. Forest Serv., 661 F.3d
969, 975 (8th Cir. 2011). A decision is arbitrary and capricious if
the agency has relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be ascribed to a
difference in view or the product of agency expertise.
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
The McClungs first claim that there was "no evidence" of a second violation
since the Corps did not show they had "mowed" the brush rather than removing it by
hand. The final administrative order stated that they violated 36 C.F.R. § 327.14(a)
and the Greers Ferry SMP when they "mowed the remaining and recovering
vegetation that had not been killed earlier by the herbicide." In its briefing to this
court, the Corps explained that it uses the word "'mow' as a general term to address
various types of vegetation control and removal." This definition finds support in the
administrative record. The McClungs received and applied for a "mowing" permit
that allowed them to "mow" an area up to 100 feet from the northwest corner of their
home. This permit complies with the terms of § 8-02(a) of the Greers Ferry SMP,
which describes permits for "underbrushing" vegetation modification within up to
100 feet of a habitable structure. It thus appears that as used by the agency, the term
"mowing" is not necessarily confined to lawn mowing or the use of other machines
and may include removal of brush by hand. The use of the term "mowing" alone does
not show that the final order was unsupported by the record.
Moreover, it is clear that the McClungs violated regulations and permit
conditions whether or not they used machinery to remove brush. They admit that they
cleared vegetation by hand and they do not claim to have had a permit for that.
Pictures included in the administrative record show both dead and living vegetation
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on the shoreline in October 2012 and almost all vegetation gone by January 2013.
The record thus provides ample support for the determination by the Corps that the
McClungs had violated permit conditions by "remov[ing] or . . . alter[ing] . . . public
property including . . . vegetative growth," prohibited by 36 C.F.R. § 327.14(a), and
by removing underbrush outside of a permitted area in violation of the SMP. Either
violation is punishable by revocation under the terms of the permit.
Next the McClungs contend that the agency considered an irrelevant factor,
deterrence, and failed to consider an important factor, the intent of the SMP to
preserve shoreline ecology. Although Colonel Masset's decisions did not cite
"deterrence," the administrative record shows that an internal Corps memorandum
regarding the first violation weighed the possibility that a lighter sanction would
"establish[] precedence that it is 'ok' to violate the terms and conditions of permits"
and might "lead to additional violations by neighbors." These are not inappropriate
considerations. Congress has charged the Corps with the responsibility to maintain
and regulate water resource development projects in accordance with "the public
interest." 16 U.S.C. § 460d. Consistent with this Congressional policy, the Corps
could consider whether a particular sanction would be enough to discourage future
violations of regulations promulgated under the authority of 16 U.S.C. § 460d or even
encourage violations were it perceived as an insignificant penalty.
Assuming that the intent of the SMP is an important aspect of the overall
situation which the Corps must consider, the record indicates that it was taken into
account in the Corps' sanction decision. The prohibitions against vegetation
modification which the McClungs violated are closely related to the preservation of
shoreline ecology. The McClungs argue that the Corps did not adequately consider
shoreline preservation because engineer Don Potter opined that removing the stone
steps could have negative environmental effects such as erosion. While the letter
from Potter was presented to Colonel Masset, the record suggests that the Corps
preferred to allow the land to be restored to its natural state. The Corps could take
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a different view of what would be best for shoreline ecology without rendering its
decision arbitrary and capricious.
Finally, the McClungs argue that the sanctions imposed are so irrationally
disparate in comparison to similar violations that the Corps' action was arbitrary and
capricious. An agency's choice of sanction is entitled to substantial deference, and
the imposition of a sanction within an agency's authority is not necessarily "rendered
invalid in a particular case because it is more severe than sanctions imposed in other
cases." Butz v. Glover Livestock Comm'n Co., Inc., 411 U.S. 182, 187 (1973). The
only comparison case in the record does not demonstrate that the McClungs were
treated more harshly than others. In that case, a homeowner who sprayed herbicide
on 1,750 square feet of public property was prohibited from using his boat dock for
two years. That sanction is similar to the one imposed for the McClungs' first
violation. There is no case offered for comparison in which a permit holder
committed two violations within one year like the McClungs did. On this record, the
severity of the sanctions imposed on the McClungs does not show that the agency
decision was arbitrary or capricious.
C.
The McClungs also challenge the procedures followed by the Corps, arguing
that they lacked proper notice and an opportunity to respond in violation of 5 U.S.C.
§ 558(c) and their constitutional right to due process. They failed to raise the
§ 558(c) argument in the district court. Since we generally do not consider issues first
raised on appeal and the McClungs have not shown that injustice would result from
failing to consider this issue, their argument based on § 558(c) is waived. Syverson
v. U.S. Dep't of Agric., 601 F.3d 793, 803 (8th Cir. 2010).
There was no constitutional due process violation in this case because the
McClungs did not have a property interest in their shoreline permits. In order to have
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a cognizable property interest, a person must "have a legitimate claim of entitlement
to it" derived from a source outside of the Constitution. Bd. of Regents of State
Colls. v. Roth, 408 U.S. 564, 577 (1972). No statute or regulation requires the Corps
to authorize private use of publicly owned shorelines. Shoreline use permits "do[] not
convey any real estate or personal property rights or exclusive use rights to the permit
holder," 36 C.F.R. § 327.30(d)(5), and the Corps has broad discretion to manage and
regulate water resources and to revoke permits as the public interest requires, 16
U.S.C. § 460d; 36 C.F.R. § 327.30, app. A(3). The statutes and regulations applicable
to shoreline use permits thus do not create a property interest in these permits and the
McClungs have not shown that some other source creates such an entitlement.
Without a constitutionally protected interest at stake, there was no violation of the
McClungs' due process rights. See Rochling v. Dep't of Veterans Affairs, 725 F.3d
927, 931 (8th Cir. 2013).
III.
For the foregoing reasons, we affirm the judgment of the district court.
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