Village of Bald Head Island v. U.S. Army Corps of Engineers, No. 11-2368

Decided: April 15, 2013

The Fourth Circuit affirmed the district court’s dismissal of plaintiffs’ complaint under the Administrative Procedures Act (APA) for lack of subject matter jurisdiction because the U.S. Army Corps of Engineers (“Corps”) failed to take “final agency action” that is subject to judicial review under the APA. The Fourth Circuit also affirmed the dismissal of plaintiff’s breach of contract action, finding that the letters at issue did not create a contract that would justify the exercise of admiralty jurisdiction.

In the 1980s and 1990s, the Corps advanced proposals to widen and deepen the 37-mile channel in Cape Fear that allows access to the deep-water port in Wilmington, North Carolina. Before beginning construction in 2000, the Corps discovered rock at the bottom of the channel, requiring the Corps to revise its original harbor project. Plaintiff contended that the revisions would cause ecological damage to its beaches. After exchanging letters, the Corps adopted a plan agreeable to the plaintiff. The plan included semi-yearly maintenance programs designed to replenish sand on the plaintiff’s beaches. The Corps completed the harbor project in 2002. In the winter of 2011, the Corps informed the plaintiff that it had to curtail the maintenance program for budgetary reasons. Plaintiff filed a complaint against the Corps alleging breach of the maintenance plan, seeking specific performance. The district court dismissed the complaint for lack of subject-matter jurisdiction, holding that the claims under the APA were not “final agency action” that was subject judicial review, and that the court lacked admiralty jurisdiction over the remaining claims. Plaintiff appealed on both counts.

On appeal, plaintiff first argued that its APA claims constitute “final agency action” subject to judicial review either as “physical activities in the field,” or, in the alternative, as a reviewable “failure to act.” The Fourth Circuit disagreed, holding that performance of the maintenance plan failed to meet the definition of “agency action,” much less “final agency action” under the APA. The court determined that “agency action” under the APA concerns project approval rather than the project performance, which the plaintiff challenged in this case. Additionally, the Corps’ performance in maintaining the plaintiff’s beaches could not be “agency action” because it was ongoing and not “circumscribed and discrete” as required by the APA. The court said that injecting itself into the Corps’ maintenance plan would place itself into “the role of monitoring whether the Corps had complied with vague, undefined corrective measures,” which was far from a discrete agency action. Furthermore, even assuming that the Corps’ maintenance plan constituted agency action, the court held that it still failed to rise to the level of “final agency action,” finding that the final action occurred when the Corps approved the plan in 2000, and not when the Corps implemented the maintenance plan. Similarly, the court held that the failure to comply with the maintenance plan was not a reviewable “failure to act” because failing to perform the maintenance plan did not equate to a failure to take a discrete “agency action.” The court found that the plan was only a projection of its performance, and thus, not a binding commitment to the plaintiff.

Plaintiff also argued on appeal that the district court erred in holding that it did not have admiralty jurisdiction over the contract that the plaintiff alleges was created in the the letters between itself and the Corp. The Fourth Circuit disagreed, finding that the alleged contract concerned the maintenance of beaches, rather than the required “maritime commerce” that gives rise to admiralty jurisdiction. While the harbor project as a whole constituted “maritime commerce,” the letters expressed concerns about the preservation of the plaintiff’s recreational and aesthetic interests. Moreover, the court reiterated its earlier holding that the letters did not create binding commitments on the Corps that gave rise to an enforceable contract.

Full Opinion

– Wesley B. Lambert

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