Water Works & Sewer Board v. United States Department of Army (983 F. Supp. 1052, 1997)

Memorandum Opinion

PROPST, Senior District Judge.

This cause comes on to be heard on a motion for summary judgment filed by defendant City of Bessemer (“Bessemer”) on July 30, 1997; a motion for summary judgment filed by defendants United States Army Corps of Engineers, Togo D. West, Jr., Lt. Gen. A. E. Williams, and Col. William S. Vogel (collectively, “Corps”) on July 30,1997; and a motion to allow limited discovery and a hearing, and cross motion for summary judgment filed by the plaintiff Water Works & Sewer Board of the City of Birmingham (“Water Works”) on August 29, 1997. The issues raised by Bessemer and the Corps in their separate motions are substantially the same. The parties’ dispute concerns the validity of a Department of the Army Permit for work in “waters of the United States” issued by the Corps on March 17,1997. The plaintiff contends that the permit was improperly issued (1) because the Corps faded to have a requested hearing on the validity of the permit in violation of the Corps’ regulations, the statutes governing the Corps’ permitting process and the Due Proeéss Clause of the Fifth Amendment; (2) because the Corps failed to adequately consider the substantial adverse effects of the permitted activity on the public interest; (3) because the Corps erroneously failed to require preparation of an environmental impact statement in violation of the National Environmental Policy Act, 42 U.S.C. § 4321, et seq.; and (4) because the permitted activity of Bessemer will not comply with the Environmental Protection Agency’s Guidelines for Specification of Disposal Sites for Dredged or Fill Material, 40 C.F.R. § 230.1, et seq. The defendants contend that the Corps properly permitted a prospective intake structure and-pipeline intended to provide water for an independent water treatment and distribution system in Bessemer and that its decision is properly supported by the administrative record. The plaintiff asserts that it should be granted an opportunity for discovery outside of the administrative record and that it should be granted a hearing on the basis of the discovery results.

Facts

The Water Works & Sewer Board of the City of Birmingham (‘Water Works”), originally the Birmingham Waterworks Company, is an Alabama public corporation that was initially “chartered for public service by legislative act approved February 13, 1885. Sess. Acts 1884-85, p. 415.” Birmingham Waterworks Co. v. City of Birmingham, 58 So. 204, 204, 176 Ala. 301, 301 (Ala.1912); State ex rel. Weatherly v. Birmingham Waterworks Co., 64 So. 23, 26-27, 185 Ala. 388 (1913). The purpose of the Water Works, as first stated, was to “greatly promote the health and comfort of the citizens of Birmingham, in Jefferson county, Alabama, and its suburbs, to have an ample supply of good and pure water____” Birmingham Waterworks Co. v. City of Birmingham, 58 So. at 204. The Water Works describes itself as being “the largest water utility in the State of Alabama, serving approximately 25 million gallons per day of raw water to industrial customers, and approximately 108 [million gallons per day] of potable water to approximately one million people----” Plaintiffs Brief in Response to Bessemer’s Motion for Summary Judgment at 2-3; also, Administrative Record at 209. The Water Works has four sources of water: the Cahaba River, the Mulberry Fork of the. Black Warrior River, the Sipsqy Fork of the Black Warrior River and Inland Lake.

The City of Bessemer has, for forty-six years, purchased water from the Water Works to sell to its. residents. At present, ten-to thirteen million gallons of water per day are purchased by Bessemer from the Water Works for residential, agricultural and industrial purposes. Bessemer has, however, grown weary of its reliance on the Water Works and seeks to develop its own water supply, treatment and distribution system. To develop the independent water system, Bessemer would build an intake structure on the Black Warrior River at Taylor’s Ferry, downstream from Bankhead Lake; a water treatment plant at which the withdrawn water would be made potable; and an associated thirty-inch diameter pipe that would connect the intake structure to the treatment plant and the treatment plant to the water distribution system of Bessemer. At full operating. capacity, the intake system would be capable of removing twenty-five million gallons of water per day from the Black Warrior River. From the treatment plant, the water would be channeled through pre-existing pipes to end-line customers.

On June 2, 1995, Bessemer submitted an application for a Corps of Engineers’ permit pursuant to section 10 of the Rivers and Harbors Appropriation Act of 1899 (33 U.S.C. § 403) and section 404 of the Clean Water Act (33 U.S.C. § 1344) to construct the water intake structure on the Black Warrior River and associated pipeline crossings. On June 28, 1995, the Army Corps of Engineers (“Corps”) issued public notice of the permit application and provided a thirty day period ending on July 28, 1995, within which comments on the proposed project were to be submitted. The Corps received comments from various state, local and federal agencies, in addition to private individuals. On July 28, 1995, the Corps extended the comment period in response to a request for an extension of time and for a public hearing by the Water Works. On August 11, 1995, the Water Works submitted “extensive” eomments setting forth its objections to the permit and reiterated its request for a hearing.

On October 30, 1995, the Corps formally denied the Water Works’ request for a public hearing, stating that “a public hearing would not provide any additional information which would assist in making a final decision in this request for a permit.” Administrative Record (“A.R.”) at 308. On the next day, the Corps issued a Statement of Findings, which included an environmental assessment and an evaluation of compliance with the EPA’s Clean Water Act Guidelines and which addressed the comments received, including, allegedly, those of the Water Works. On November 13, 1995, the Corps issued a permit to Bessemer authorizing construction of the water intake structure and associated pipeline. Three days later, the Water Works filed suit in this court seeking review of the Corps’ action.

Around March 1,1996, the Corps suspended its permit to consider in more depth the impacts associated with the intake structure and the pipeline route proposed by Bessemer. At the same time, the parties moved jointly to stay the case while such consideration was taking place. On March 4, 1996, the court granted the stay. According to the Corps, while the stay was in effect, it considered issues raised by the Water Works, as contained in the affidavits of Bruce Schwenneker and Gene Hanson that were submitted to the court in February 1996.

A year after the stay went into effect, on March 17, 1997, the Corps issued a revised Statement of Findings on the permit application, accompanied by an environmental assessment and an evaluation of compliance with the EPA’s Clean Water Act Guidelines. On the same day, it reissued Bessemer’s permit. The issues raised in the various motions are now before the court.

Contentions & Analysis

The court assumes, without deciding, that the Water Works has standing to raise its various complaints. It may have standing as to some and not as to others.

I. The Benefit of a Hearing.

The plaintiffs first contention is that it was denied a hearing in violation of (1) the regulations issued by the Corps governing the circumstances under which a hearing is to be granted; (2) the Administrative Procedure Act and the relevant sections of the statutes under which the Corps’ authority to regulate is described; and (3) Fifth Amendment due process, even if the Corps in fact complied with the regulations and statutes. The defendants dispute all of these arguments.

A, Compliance with the Regulations.

The Corps’ regulations elucidating the criteria for the grant of a public hearing, 33 C.F.R. § 327.4, state:

(a) A public hearing will be held in connection with the consideration of a DA [Department of the Army] permit application or a Federal project whenever a public hearing is needed for making a decision on such permit application or Federal project. In addition, a public hearing may be held when it is proposed to modify or revoke a permit. (See 33 CFR 325.7).

(b) Unless the public notice specifies that a public hearing will be held, any person may request, in writing, within the comment period specified in the public notice on a DA permit application or on a Federal project, that a public hearing be held to consider the material matters at issue in the permit application or with respect to Federal project. Upon receipt of any such request, stating with particularity the reasons for holding a public hearing; the district engineer may expeditiously 'attempt to resolve the issues informally. Otherwise, he shall promptly set a time and place for the public hearing, and give due notice thereof, as prescribed in § S27.ll of this Part. Requests for a public hearing under this paragraph shall be granted, unless the district engineer determines that the issues raised are insubstantial or there is otherwise no valid interest to be served by a hearing. The district engineer will make such a determination in writing, and communicate his reasons therefor to all requesting parties. Comments received as form letters or petitions may be acknowledged as a group to the person or organization responsible for the form letter or petition.

(e) In case of doubt, a public hearing shall beheld____

(d) In fixing the timé and place for a hearing, the convenience and necessity of the interested public will be duly considered.

The Eleventh Circuit has interpreted the Corps’ regulations to mean that the grant of a public hearing by the Corps is discretionary.

The applicable regulations provide’ the Corps discretion to hold hearings on permit applications on an “as' needed” basis. 33 C.F.R. § 327.4. If the Corps determines that it has the information necessary to reach a decision and that there is “no valid interest to be served by a hearing,” the Corps has the discretion not to hold one. Id. § 327.4(b).

Fund for Animals v. Rice, 85 F.3d 535, 545 (11th Cir.1996). In reviewing whether an agency’s decision to decline public hearing request comports with the agency’s regulations, an arbitrary and capricious standard is to be employed by the court. Id.

In considering [whether an agency’s action, is arbitrary and capricious] the Court may not substitute its judgment for that of the agency and can set aside an agency’s decision only if the agency relied on improper factors, failed to consider important relevant factors, or committed a clear error of judgment that lacks a “rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983) (internal quotations and citations omitted); Preserve Endangered Areas of Cobb’s History, Inc. v. United States Army Corps of Engineers, 87 F.3d 1242, 1246 (11th Cir.1996); Florida Manufactured Hous. Ass’n, Inc. v. Cisneros, 53 F.3d 1565, 1572 (11th Cir.1995).

While we must conduct a “searching and careful” inquiry to assess whether the decision bears the requisite connection to the relevant facts, our ultimate standard of review is narrow and deferential to the agency’s conclusions. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823-24, 28 L.Ed.2d 136 (1971). Agency action must be presumed valid and rejected only for ‘“substantial procedural or substantive reasons ... not simply because the court is unhappy with the result reached.’ ” Manasota-88, Inc. v. Thomas, 799 F.2d 687, 691 (11th Cir.1986) (quoting Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 558, 98 S.Ct. 1197, 1219, 55 L.Ed.2d 460 (1978)).

Arango v. United States Department of the Treasury, 115 F.3d 922, 928 (11th Cir.1997).

The Water Works argues that it properly requested in writing a public hearing within the time period prescribed by the regulation and that it clearly elucidated its reasons for requesting the hearing. In its letter to the Corps, the Water Works detailed concerns related to public needs and welfare, the economic impact of the project, water supply and conservation, property rights and practicable alternatives to the project. In addition, the Water Works requested a public hearing:

to more specifically consider the following matters including, but not limited to: conservation, economics, aesthetics, general environmental concerns, wetlands, historic properties, fish and wildlife values, land use, ’ navigation, shore erosion and accretion, recreation, water supply and conservation, water quality, energy needs, safety, food and fiber production, mineral needs, property ownership considerations and general welfare needs of the public. In addition, this hearing is requested so that the public and in particular the citizens and customers of Bessemer and the customers of the [Water Works] Board, will have the opportunity to respond to the issues set out above that have a direct effect on economy and lifestyle.

A.R. at 218. In short, the Water Works raised, in addition to particularized reasons for a public hearing, the laundry list itemized in 33 C.F.R. § 320.4(a)(1). Characterizing its listing of concerns as satisfaction of a “threshold burden,” the plaintiff argues that “the burden” shifted to the Corps to either informally resolve its concerns, deny the hearing in a writing stating why a hearing would be unhelpful, or grant a hearing. Maintaining that the Corps failed to properly pursue the first two options, the Water Works reasons that the Corps was required to grant a hearing.

The Water Works first asserts that the Corps did not attempt to resolve the matter informally. It next avers that the Corps’ written denial of a hearing was given on an insufficient basis because the Corps’ decision “simply set forth the Corps’ rationale for justifying the ultimate issuance of the permit to Bessemer ...” The defendants answer that the Corps concluded that the Water Works sufficiently articulated its concerns to the Corps in its comments and informal discussions and that, therefore, no additional information was required.

In its written statement denying a hearing, the Corps District Engineer addressed the Water Works’ reasons for the grant of a public hearing:

The U.S. Army Corps of Engineers jurisdiction in this permit application relates to the construction of the water intake structure in navigable waters of tbe U.S. The primary focus of our evaluation will be on the direct impacts of the structure (e.g. navigation, water quality, threatened/endangered species, and cultural resources). Our regulations at 33 CFR 320.4(m) and guidance contained in Regulatory Guidance Letter 85-6 states that the primary responsibility for water allocation rests with the states.

In response to the public notice[,] letters of no objection or authorization were received from the U.S. Fish and Wildlife Service, National Marine Fisheries Service, Alabama Department of Conservation and Natural Resources, Alabama Department of Environmental Management, Alabama State Docks, and the Alabama. Historical Commission. Coordination with these agencies indicates that the proposed project will not adversely impact fish and wildlife, threatened and endangered species, properties on or eligible for the National Register of Historic Places, navigation, and water quality.

The decision of the City of Bessemer to seek its own water supply and the consequences of the decision (higher prices, and reliability) are the responsibility of the locally elected officials, not the Corps. Policy at 33 CFR 320.4(q) states that “... it will generally be assumed that appropriate economic evaluations have been completed, the proposal is economically viable, and is needed in the market place”.

Although the granting of Bessemer’s requested permit will provide a new-water withdrawal point on the Black Warrior River, it should not increase the demand for water in the short term. The water to be withdrawn by Bessemer is currently being withdrawn by the [the Water Works] at other locations and sold to Bessemer. If [the Water Works] developed new customers to replace Bessemer, additional demands on water resources would result. It is estimated that up to 70 per cent of the water withdrawn by Bessemer would be returned to Black Warrior River as treated waste water thus reducing the net withdrawal to 7.5 [million gallons per day].

The proposed Bessemer intake is downstream of all the [Water Works] intakes and will probably not impact the [Water Work’s] withdrawal except during droughts when the Bankhead Lake level is low. Future increases in water withdrawals will likely impact navigation depths during droughts, however, the allocation of water for multi-purpose use is primarily a State issue. If navigational servitude is impaired, Federal authority to protect navigation preempts the State’s right to allocate water use.

A.R. at 307-08. Based upon his analysis of the concerns raised by the Water Works, the district engineer concluded that sufficient data existed with respect to the issues raised by the Water Works such that no hearing would be necessary. Given the reasons stated and the factors considered, the district engineer reasonably concluded that no additional information would be useful in evaluating the appropriateness of granting a permit to Bessemer.

The Water Works insists that the affidavit later filed by Dr. Bruce W. Schwenneker (which was addressed by the Corps in its final permitting decision) demonstrates that a public hearing was needed to flush out the concerns stated by the Water Works. The Corps needed only to consider whether the issues raised by the party requesting a public hearing were sufficiently undefined as to require that hearing. On the basis of the concerns stated by the Water Works in its letter, the Corps, within its appropriate range of discretion, determined that the problems were adequately presented and did not require public hearing for additional statement and clarification in accordance with its regulations. The decision to deny a public hearing was neither arbitrary nor capricious.

B. Statutory Hearing Requirements.

The Water Works avers that, even supposing the refusal to hold a public hearing were not a violation of the Corps’ regulations on the grant of public hearings, the Corps’ refusal nonetheless violated the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment. On the issue of whether a hearing determination that conforms to the regulations complies with section 5 of the Administrative Procedure Act, section 10 of the Rivers and Harbors Act of 1899 and section 404 of the Clean Water Act, no case directly addressing the issue has emerged. However, cases that have broached the issue lead this court to the conclusion that the denial of a hearing was not violative of the above-listed statutes. The Fifth Circuit Court of Appeals commented in Buttrey v. United States, 690 F.2d 1170, 1176 (5th Cir.1982), that a public hearing “ ‘usually means a speechmaking hearing rather than a (trial-type) hearing with a determination on the record.’ 2 K. Davis, Administrative Law Treatise § 12:7, at 434 (2d ed.1979).” See also Taylor v. District Engineer, 567 F.2d 1332, 1338 (5th Cir.1978). The Fifth Circuit also noted that, in general, the purpose of the speechmaking hearing for federal agencies was to gain input to assist the agency in making decisions, id., implying that if an agency found that sufficient input was had from comments submitted a public hearing was unnecessary. “A Federal agency is not required to conduct public hearings before making a threshold determination as to the need for an EIS so long as members of the public are given the opportunity to submit facts which might bear upon the agency decision.” Sierra Club v. Alexander, 484 F.Supp. 455, 471 (N.D.N.Y.1980) (citing WATCH (Waterbury Action, etc.) v. Harris, 603 F.2d 310, 326 n. 36. (2d Cir.1979)) aff'd 633 F.2d 206 (2d Cir.1980). See also AJA Assoc. v. Army Corps of Engineers, 817 F.2d 1070, 1073-74 (3d Cir.1987). In Fund for Animals, Inc. v. Rice, 85 F.3d 535, 545 (11th Cir.1996), the Eleventh Circuit Court of Appeals implied that the opportunity for public hearing crafted by the Corps in its regulations adequately complied with the Clean Water Act.

The CWA mandates an “opportunity for public hearings.” See 33 U.S.C. § 1344(a). However, the statute does not state that the Corps itself must hold its own public hearings regardless of how many other hearings have been held on a project. The applicable regulations provide the Corps discretion to hold hearings on permit applications on an “as needed” basis. 33 C.F.R. § 327.4. If the Corps determines that it has the information necessary to reach a decision and that there is “no valid interest to be served by a hearing,” the Corps has the discretion not to hold one. Id. 327.4(b).

C. Due Process.

In resolving whether the Corps decision to deny a hearing violated due process, this court is to apply a de novo standard of review. Summary judgment is appropriate only if this court concludes that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249,106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The party seeking summary judgment bears the initial responsibility of informing this court of the grounds for its motion, and identifying those portions of the record, pleadings, depositions, answers to interrogatories, admissions' on file, and any affidavits that it believes prove the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. at 2552-53. Once the moving party has met this burden, the nonmoving party “must produce evidence that shows there exists a genuine issue of material fact.” Cottle v. Storer Communication, Inc., 849 F.2d 570, 575 (11th Cir.1988). Rule 56(e) requires the nonmoving party to go beyond the pleadings and by affidavits, or by the depositions, answers to interrogatories, admissions on file and, in this case, the administrative record designate specific facts showing the presence of a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The court may consider the offered “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any ...” in deciding whether to grant or deny a summary judgment motion. Fed.R. C.v. P. 56(c). In resolving whether a given factual dispute requires submission to a jury, the court must view the presented evidence through the prism of the substantive evidentiary burden. Anderson, 477 U.S. at 254-55, 106 S.Ct. at 2513-14. . The court, however, must avoid weighing conflicting evidence for probity or making credibility determinations. Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir.1992).

With respect to whether the denial of a public hearing is consistent with modem understandings of Fifth Amendment Due Process, the Fifth Circuit Court of Appeals has held, in a ease involving an earlier version of the Corps regulations regarding public hearings, that “the procedures set forth in the regulations of the Corps easily satisfy the requirements of due process.” Taylor v. District Engineer, 567 F.2d 1332, 1338 (5th Cir.1978). Any decision comporting with those regulations would, therefore, satisfy due process, even if the resulting decision was substantively incorrect.

In the absence of a fundamental interest, to be entitled to due process protection, a plaintiff must have a protected life, liberty or property interest, the deprivation of which is to be afforded due process. Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 1153-54, 71 L.Ed.2d 265 (1982); Zipperer v. City of Fort Myers, 41 F.3d 619, 623 (11th Cir.1995). Two potential sources exist for the Water. Works’ claimed entitlement to due process: (1) the regulations stating that interested parties are entitled, in certain circumstances, to a hearing and (2) the Water Works’ riparian rights and economic interests in the outcome of the permitting decision. The first basis for an interest, that the statute or regulations entitie it to a hearing in certain circumstances, fails, as there is no protected interest in a procedural right. In Olim v. Wakinekona, 461 U.S. 238, 250-51, 103 S.Ct. 1741,1748-49, 75 L.Ed.2d 813 (1983), the Supreme Court stated:

[a]s the United States Court of Appeals for the Seventh Circuit recently stated in Shango v. Jurich, 681 F.2d 1091, 1100-1101 (1982), “[a] liberty interest is of course a substantive interest of an individual; it cannot be the right to demand needless formality.” Process is not an end in itself. Its constitutional purpose is to protect a substantive interest to which the individual has a legitimate claim of entitlement____ The State may choose to require procedures for reasons other than protection against deprivation of substantive rights, of course, but in making that choice the State does not create an independent substantive right____

See also Merritt v. Broglin, 891 F.2d 169,172 (7th Cir.1989)(“State created procedural rights are insufficient to create a substantive liberty interest.”). The interest of the Water Works in the regulation and statute is a mere right to procedure, i.e., a hearing, created with the purpose of protecting the substantive interests of the permit applicant and the public. However, the interests of the public, and in this case the Water Works, being protected by the Corps’ procedures are far broader than the interests that the Corps is constitutionally required to protect through its procedures.

The deprivations of substantive interests — economic loss and infringement of riparian rights — which the Water Works maintains will occur if a hearing is denied are indirect consequences of a decision by the Corps to permit Bessemer to build the intake structure, pipeline and water treatment plant. Indirect deprivations of interests are, however, outside of the purview of the due process clause. O’Bannon v. Town Court Nursing Center, 447 U.S. 773, 787, 100 S.Ct. 2467, 2476, 65 L.Ed.2d 506 (1980); Dumas v. Kipp, 90 F.3d 386, 391 (9th Cir.1996); and Rivers v. Schweiker, 684 F.2d 1144, 1158 (5th Cir.1982).

II. The Public Interest Review.

The second grounds for remand raised by the plaintiff is that the Corps inadequately considered the impact of Bessemer’s proposed water project on the public interest. The Water Works contents that the Corps failed to conduct an adequate public interest review because (1) the Corps’ analysis was too narrow in scope; (2) the Corps did not conduct an adequate consideration of the need of the. project; (3) the Corps did not appropriately consider alternatives to the construction of the project; (4) the Corps did not consider water supply in making its decision; (5) the Corps failed to address the economic impacts of the project, (6) the Corps insufficiently addressed the issue of water quality; and (7) the Corps did not fully consider the impacts of the project on threatened and endangered species. Before addressing the substance of this extended argument, however, the court will examine the plaintiffs argument that in evaluating the Corps’ decision to permit the Bessemer project the court should consider not only the administrative record, but should allow the plaintiff to conduct discovery and introduce materials extraneous to the record in a hearing before the court.

A. Hearings and Discovery.

“The focal point for judicial review of an administrative agency’s action should be the administrative record.” Preserve Endangered Areas of Cobb’s History Inc. v. United States Army Corps of Engineers, 87 F.3d 1242, 1246 (11th Cir.1996). The Water Works contends that, although the administrative record is the focus in reviewing administrative action, where insufficient information exists in the record for the court to determine whether the agency’s action is arbitrary and capricious, it should look beyond the record, allowing discovery and an in-court hearing. In Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973), the Supreme Court addressed the twin issues of when and to what extent a district court may conduct a hearing on a matter decided by an administrative agency. On the issue of when a district court may hold a hearing on review of a case from an agency, the Court stated that a hearing may be appropriate if an agency fails to adequately explain its decision. Id. at 142, 93 S.Ct. at 1243-44. However,

[i]f the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation. The reviewing court is not generally empowered to conduct a de novo inquiry into the matter being reviewed and to reach its own conclusions based on such an inquiry. .

Florida Power & Light Company v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 1607, 84 L.Ed.2d 643 (1985); Preserve Endangered Areas of Cobb’s History, Inc. [PEACH] v. United States Army Corps of Engineers, 87 F.3d at 1246 (quoting Florida Power & Light). In PEACH, the Eleventh Circuit Court of Appeals in passing noted four circumstances (elaborated by the Ninth Circuit Court of Appeals in Animal Defense Council v. Hodel, 840 F.2d 1432, 1436-37 (9th Cir.1988)), that could potentially support a decision by a district court to hold a hearing:

The Ninth Circuit has specified that a court may go beyond the administrative record only where: 1) an agency’s failure to explain its action effectively frustrates judicial review; 2) it appears that the agency relied on materials not included in the record; 3) technical terms or complex subjects need to be explained; or 4) there is a strong showing of agency bad faith or improper behavior. (Citation omitted) We need not consider these exceptions as none of them apply in the instant case.

Preserve Endangered Areas of Cobb’s History, Inc. [PEACH] v. United States Army Corps of Engineers, 87 F.3d at 1246 n. 1. Even were the court to accept the four listed exceptions as an accurate statement of the law of this circuit, the plaintiff has not shown that the Corps’ decision is flawed for any of the listed reasons. The only basis argued by the Water Works as justifying a hearing is that, in giving “abstract and conclusory” grounds for granting Bessemer’s permit, the Corps failed to adequately explain its decision and thereby frustrated judicial review. Far from being abstract and conclusory, however, the district engineer’s permitting decision is thorough and thoughtful. The explanations given by the district engineer are sufficiently clear and developed to allow this court to review the record and determine whether the decision was arbitrary and capricious.

The Water Works asserts, as an additional reason for the grant of a hearing, that because the Corps was required to undertake an environmental assessment in accordance with the National Environmental Policy Act (“NEPA”), this court is not obligated to confine its review to the administrative record. Instead, the plaintiff argues, the court is authorized to look beyond the administrative record to consider factors that the district engineer may have ignored. The impact of this argument is, however, confined to the Corps’ environmental assessment and will be taken up in more detail when the court reviews the Corps’ environmental assessment of the Bessemer project. At this point, the court simply notes that any NEPA provision permitting the submission of new evidence for examining the adequacy of the Corps’ environmental assessment does not extend to the Corps’ public interest review and the Corps’ review under the Environmental Protection Agency’s Guidelines governing permits for discharges of dredged or fill material promulgated through section 404(b)(1) of the Clean Water Act.

B. Scope of Review.

In considering any permit application, the Corps is required to follow, at a minimum, the regulations set out in 33 C.F.R. Parts 320-329. The regulations contained in this section obligate the Corps to consider certain general factors in every permitting decision and, depending upon the activity being permitted, other more specific factors and policies. See 33 C.F.R. § 320.1(b) & § 320.4. The review conducted under these regulations is deemed the “public interest review” and is elaborated in detail in 33 C.F.R. § 320.4(a)(1):

(a) Public Interest Review.

(1) The decision whether to issue a permit will be based on an evaluation of the probable impacts, including cumulative impacts, of the proposed activity and its intended use on the public interest. Evaluation of the probable impact which the proposed activity may have on the public interest requires a careful weighing of all those factors which become relevant in each particular ease. The benefits which reasonably may be expected to accrue from the proposal must be balanced against its reasonably foreseeable detriments. The decision whether to authorize a proposal, and if so, the conditions under which it will be allowed to occur, are therefore determined by the outcome of this general balancing process. That decision should reflect the national concern for both protection and utilization of important resources. All factors which may be relevant to the proposal must be considered including the cumulative effects thereof: among those are conservation, economics, aesthetics, general environmental concerns, wetlands, historic properties, fish and wildlife values, flood hazards, floodplain values, land use, navigation, shore erosion and accretion, recreation, water supply and conservation, water quality, energy needs, safety, food and fiber production, mineral needs, considerations of property ownership and, in general, the needs and welfare of the people. For activities involving 404 discharges, a permit will be denied if the discharge that would be authorized by such permit would not comply with the Environmental Protection Agency’s 404(b)(1) guidelines. Subject to the preceding sentence and any other applicable guidelines and criteria (see §§ 320.2 and 320.3), a permit will be granted unless the district engineer determines that it would be contrary to the public interest.

See also Van Abbema v. Fornell, 807 F.2d 633, 636 (7th Cir.1986). Certain criteria are to be evaluated in every application for a permit:,

(i) The relative extent of the public and private need for the proposed structure or work;

(ii) Where there are unresolved conflicts as to resource use, the practicability of using reasonable alternative locations and methods to accomplish the objective of the proposed structure or work; and

(in) The extent and permanence of the beneficial and/or detrimental effects which the proposed structure or work is likely to have on the public and private uses to which the area is suited.

33 C.F.R. § 320.4(a)(2). In addition, certain factors, such as conservation, economics, aesthetics, general environmental concerns, wetlands, historic properties, fish and wildlife values, etc., are to be considered and evaluated based upon their relative importance to the project at hand. 33 C.F.R. § 320.4(a)(3).

In conducting the public interest review, the Corps is limited in the aspects of the entire project on which it may focus. The Water Works first questions the limitations the Corps placed on the scope of its public interest review. According to the Water Works, the Corps, in conducting its public interest review, impermissibly confined itself to examining the impacts of the construction and maintenance of the intake facility and the construction and maintenance of the pipeline across various streams and other waters and wetlands. Allegedly, it did not review the consequences of the entire project, including construction and maintenance of the proposed water treatment plant. The Water Works contends that examination of these aspects of Bessemer’s proposed project was required under the public interest review. Although the Water Works cites no law to support its contention, it argues that because the public interest review is a “broad review,” not only should the structures affecting the navigable waters of the United States be evaluated, but also those structures that help fulfill the purposes of the project.

The defendants respond that the plaintiff’s contention that a “broad review” is required is mistaken, stating that the scope of the overall project review that the Corps is to undertake is governed by the National Environmental Policy Act (“NEPA”) implementation procedures for the regulatory program that are contained at 33 C.F.R. Pt. 325 App. B § 7.b. The plaintiff counters that 33 C.F.R. Pt. 325 App. B § 7 does not apply to the public interest review because its only stated purpose is to guide the NEPA review of the action. The defendants disputé this contention and point to 33 C.F.R. Pt. 325, App. B § 7.a, which states that “[t]he EA [NEPA environmental assessment] should normally be combined with other required documents (EA/404(b)(l)/SOF/FONSI): ‘EA’ as used throughout this Appendix normally refers to this combined document.” According to the defendants, because the environmental assessment as described in appendix B includes the other documents involved in other evaluations, the regulations governing the jurisdictional scope of the NEPA review by definition govern the jurisdictional scope of the public interest review.

In Sylvester v. Army Corps of Engineers (Sylvester II), 882 F.2d 407, 410 n. 4 (9th Cir., 1989), the Ninth Circuit Court of Appeals noted a distinction between the scope of the public interest review and the NEPA review:

[U]nder the C.W.A. [Clean Water Act], the Corps is not limited by a regulation similar to 33 C.F.R. pt. 325 app. B § 7____ As a consequence, the Corps could properly consider a wider range of facts in conducting its public interest analysis.

The language in Sylvester II notwithstanding, the court is convinced that the extent of the entire project reviewable by the Corps under its public interest review is essentially the same as the extent of review permitted under the NEPA analysis. First, the language of the regulation defining the focus of the public interest review limits that focus to the effects of the “proposed activity”:

The decision whether to issue a permit will be based on an evaluation of the probable impacts, including cumulative impacts, of the proposed activity and its intended use on the public interest____ The decision whether to authorize a proposal, and if so, the conditions under which it will be allowed to occur, are therefore determined by the outcome of this general balancing process.

33 C.F.R. § 320.4. The above makes it clear that what is meant by “proposal” is that which the Corps has the capacity to authorize. However, only the portion of an overall project that occurs in the navigable waters of the United States can be authorized by the Corps. The Corps has no authority to permit or even regulate any other activity, although it may consider the direct, indirect and cumulative impacts of the proposed activity. The Corps’ public interest review is not to cover the totality of all activities, however.

Further, the results of the public interest review are to be recorded in a statement of findings, in conjunction with the other review documents. 33 C.F.R. § 325.2. That the regulations, in the same section in whieh the scope of analysis for the environmental assessment (“EA”) is described, state that the “EA” refers to the combined document containing the statement of findings indicates to the court that the scope of analysis considered in 33 C.F.R. Pt. 325 App. B. § 7 is the same as the activity to be considered under 33 C.F.R. §. 320.4(a)(1).

The Corps drafted its first set of regulations governing the scope of review in cases involving both federal and non-federal actions in 1980. See Sylvester v. U.S. Army Corps of Engineers, 884 F.2d 394, 398 (9th Cir.1989). The same year, the Fifth Circuit Court of Appeals, in Save the Bay, Inc. v. United States Corps of Engineers, 610 F.2d 322, 327 (5th Cir.1980), held that the Corps’ regulations limited its public interest review in certain cases to the federal aspects of a project and that the Corps was not required to consider the entire proposed project in conducting its review. In Save the Bay v. United States Corps of Engineers, proposed to build a titanium dioxide plant in Delisle, Mississippi, a town located near Bay St. Louis (an inlet from the Mississippi Gulf Coast). Associated with the building of the plant was construction of a 24-inch pipeline that would extend 2,000 feet and discharge industrial wastewater into the Bay of St. Louis. Id. at 323-24. The Corps permitted the construction of the pipeline and, in deciding to do so, considered solely the consequences of the pipeline construction and discharge, not of the construction and maintenance of the titanium dioxide plant as a whole.

The plaintiffs objected to the Corps permitting decision in the district court, arguing, among other things, that the Corps had an obligation to consider the effects of the entire project. In support of its contention, the plaintiffs argued that if any portion of the proposed activity was enabled by the pipeline, the consequences of the enabled activity should be considered in addition to the impacts of the construction and maintenance of the pipeline itself. Because, the plaintiffs alleged, the pipeline enabled the plant to discharge its waste water, the plant was enabled by the pipeline and the impacts of its construction and maintenance should have been considered. The Fifth Circuit Court of Appeals stated that if the “enablement theory” was correct, the plant should have been considered in Corps’ review of the permit. However, the Fifth Circuit Court of Appeals rejected the “enablement theory” of the plaintiffs. Id. at 327. Instead, the Fifth Circuit merely found that the Corps was only required to consider the impacts of the pipeline in making its permitting decision. The court did not elaborate on its basis for finding that the Corps could confine its review to the pipeline, but instead limited itself to explication of why the cases cited by the plaintiffs did not support the enablement theory. Id. at 327.

In Winnebago Tribe of Nebraska v. Ray, 621 F.2d 269 (8th. Cir.1980), the Eighth Circuit Court of Appeals considered whether the Corps was required to evaluate an entire project involving thé construction of a power line that crossed the Missouri River and would run through the Winnebago Indian Reservation. The river crossing would extend 1.25 miles out of the total sixty-seven miles that the power line was to extend. ' The Corps refused to extend its analysis beyond that portion of the line crossing the river. Id. at 270.

The Winnebago Tribe and others brought an action in the district court to require the Corps to. consider the impact upon the other sixty-five and some-odd miles, and the case eventually found its way to the Eighth Cireuit Court of Appeals. First, the Eighth Circuit distinguished the case before it from an earlier case in which an “enablement theory” was proposed. Id. at 272. Finding that “[i]n ‘enablement’ cases federal action is a legal condition precedent to accomplishment of an entire nonfederal project,” the Corps’ ability to deny permitting of only a section of the power line constituted “but-for” veto power over the project. (That is, but for the denial of the permit of the section of the line, the entire line could have been built.) The court then developed and applied three factors by which to determine if the Corps would have jurisdiction over an entire project based upon its ability to issue a permit as to a portion of the project.

The court in NAACP v. Medical Center, 584 F.2d 619 (1978), identified three factors helpful in determining whether “but for” or factual control requires project-wide analysis: (1) the degree of discretion exercised by the agency over the federal portion of the project; (2) whether the federal government has given any direct financial aid to the project; and (3) whether “the overall federal involvement with the project (is) sufficient to turn essentially private action into federal action.” Id. at 629 (citation omitted)____

In the present suit, while the Corps has broad discretion to consider environmental impacts (see Zabel v. Tabb, 430 F.2d 199 (5th Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct. 873, 27 L.Ed.2d 808 (1971)), that discretion must be exercised within the scope of the agency’s authority. As noted above, the Corps’ jurisdiction under section 10 extends only to areas in and affecting navigable waters. See United States v. Sexton Cove Estates,. Inc., 526 F.2d 1293, 1299 (5th Cir.1976); Weiszmann v. District Engineer, United States Army Corps of Engineers, 526 F.2d 1302, 1304 (5th Cir.1976); United States v. Joseph G. Moretty Inc., 526 F.2d 1306 (5th Cir.1976). As the Third Circuit observed in United States v. Stoeco Homes, Inc., 498 F.2d 597, 607 (3d Cir.1974):

The federal environmental protection statutes did not * * * by their terms enlarge the jurisdiction of the Army Corps of Engineers under the Rivers and Harbors Appropriation Act of 1899. If there is no such jurisdiction environmental protection is still a matter primarily of state concern.

Thus, the Corps’ discretion under section 10 does not dictate project-wide review.

The factors remaining for consideration under Medical Center are the presence of direct federal funding and the degree of federal involvement. There has been no direct or even indirect federal funding for this project. Cf. Ely v. Velde, 451 F.2d 1130 (4th Cir.1971)(Law Enforcement Assistance Administration involvement in and funding for a state prison amounts to major federal action). As for federal involvement, the fact that part of the line will cross the Winnebago Reservation does not suffice to turn this essentially private action into federal action. Federal law al-' lows the state to condemn this land for any public purpose in the same manner as land owned in fee. 25 U.S.C. § 357 (1976). Thus, we conclude that the Corps did not have sufficient control and responsibility to require it to study the entire project.

Id. at 272-73 (footnotes omitted).

In 1988, the Corps drafted an amendment to the regulations that effectively codified Save the Bay and Winnebago. Sylvester v. U.S. Army Corps of Engineers, 884 F.2d at 398. These regulations now state:

b. Scope of Analysis. (1) In some situations, a permit applicant may propose to conduct a specific activity requiring a Department of the Army (DA) permit (e.g., construction of a pier in a navigable water of the United States) which is merely one component of a larger project (e.g., construetion of an oil refinery on an upland area). The district engineer should establish the scope of the NEPA document (e.g., the EA or-EIS) to .address the impacts of the specific activity requiring a DA permit and those portions of the entire project over which the district engineer has sufficient control and responsibility to warrant Federal review.

(2) The district engineer is considered to have control and responsibility for portions of the project beyond the limits of Corps jurisdiction where the Federal involvement is sufficient to turn an essentially private action into a Federal action. These are cases where the 'environmental consequences of the larger project are essentially products, of'the Corps permit action. Typical factors to be considered in determining whether sufficient “control and responsibility” exists include:

(i) Whether or not the regulated activity comprises “merely a link” in a corridor type project (e.g., a transportation or utility transmission project).

(ii) Whether there are aspects of the upland facility in the immediate vicinity of the regulated activity which affect the location and configuration of the regulated'activity.

(iii) The extent to which the entire project will be within Corps jurisdiction.

(iv) The extent of cumulative Federal control and responsibility.

A.Federal control and responsibility will include the portions of the project beyond the limits of Corps jurisdiction where the cumulative Federal involvement of the Corps and other Federal agencies is sufficient to grant legal control over such additional portions of the project. These are eases where the environmental consequences of the additional portions of the projects are essentially products of Federal financing, assistance, direction, regulation, or approval (not including funding assistance solely in the form of general revenue sharing fluids, with no Federal agency control over the subsequent use of such funds, and not including judicial or administrative civil or criminal enforcement actions).

B. In determining whether sufficient cumulative Federal involvement exists to expand the scope of Federal action the district engineer should consider whether other Federal agencies are required to take Federal action under the Fish and Wildlife Coordination Act (16 U.S.C. 661 et seq.), the National Historic Preservation Act of 1966 (16 U.S.C. 470 et seq.), the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.), Executive Order 11990, Protection of Wetlands, (42 U.S.C. 4321 91977), and other environmental review laws and executive orders.

C. The district engineer should also refer to paragraphs 8(b) and 8(c) of this appendix for guidance on determining whether it should be the lead or a cooperating agency in these situations.

33 C.F.R. Pt. 325, App. B § 7.b. The Corps’ regulations give examples as a guide to how specific permitting decisions should be handled.

For those regulated activities that comprise merely a link in a transportation or utility transmission project, the scope of , analysis should address the Federal action, i.e., the specific activity requiring a DA permit and any other portion of the project that is within the control or responsibility of the Corps of Engineers (or other Federal agencies).

For example, a 50-mile electrical transmission cable crossing a 1 1/4 mile wide river that is a navigable water of the United States requires a DA permit. Neither the origin and destination of the cable nor its route to and from the navigable water, except as the route applies to the location and configuration of the crossing, are within the control or responsibility of the Corps of Engineers. Those matters would not be included in the scope of analysis which, in this case, would address the impacts of the specific cable crossing. Conversely, for those activities that require a DA permit for a major portion of a transportation or utility transmission project, so that the Corps permit bears upon the origin and destination as well as the route of the project outside the Corps regulatory boundaries, the scope of analysis should include those portions of the project outside the boundaries of the Corps section 10/404 regulatoiy jurisdiction. To use the same example, if 80 miles of the 50-mile transmission line crossed wetlands or other “waters of the United States,” the scope of analysis should reflect impacts of the whole 50-mile transmission line----

In all cases, the scope of analysis used for analyzing both impacts and alternatives should be the same scope of analysis used for analyzing the benefits of a proposal.

33 C.F.R. Pt. 325, App. B § 7.b(3).

In a description of the project, the district engineer discussed the intake structure and pipeline as relevant to his analysis with respect to permitting:

a. Project Description: Construct a water intake structure, a 30-inch diameter transmission line and a 25-million-gallons per day (MGD) water treatment plant. Construction of the intake structure includes a temporary 240-foot-long Z-pile cofferdam, controlled blasting and dredging of up to 500 cubic yards of silt, sand, gravel, rock, and debris in the intake structure channel. The transmission line will generally follow existing roadways and a natural gas pipeline, and have a total length of approximately 21 miles. Construction of the transmission line includes the redeposit of soil material (fallback) incidental to pipeline excavation (550 cubic yards), and the discharge of bedding material (crushed stone) and riprap at 17 creek/drainway crossings. The total length of the 17 crossings is 272 feet (0.051 mile or 0.0024% of the pipeline length)____

A.R. at 901-02. The Water Works raises the argument that the district engineer was ambivalent about whether he was required to consider only the construction of the pipeline and intake structure or the entire Bessemer project. Because, the Water Works contends, the district engineer was ambiguous about the scope of the review, the court should either interpret the review’s scope to include the entire project and remand the case because the Corps failed to consider the entire project at points in the review, or the court should remand the case to the Corps for it to determine the appropriate scope of review. The Water Works bases its argument regarding the district engineer’s apparent ambivalence on a statement of jurisdiction madé in response to issues raised by the plaintiff concerning practicable alternatives and water allocation:

The Corps jurisdiction in this permit application relates to the construction of the water intake structure and pipeline in jurisdictional waters of the United States. The Corps does not have jurisdiction over the withdrawal or allocation of water from the Black Warrior River. The primary focus of our evaluation is on the direct impacts of the intake structure, pipeline and treatment plant (e.g. navigation, water quality, threatened and endangered species, and cultural resources). Corps regulations at 33 CFR 320.4(m) and guidance contained in Regulatory Guidance Letter 85-6 states that the primary responsibility for water allocation rests with the states.

A.R. at 916 (emphasis added). The Water Works contends that the district engineer’s statement -that its focus was upon the “direct impacts of the intake structure, pipeline and treatment plant” constitutes a determination to review the entire Bessemer project. The defendants, by contrast, consider the significant portion of the district engineer’s description of his jurisdiction to be the limitation of jurisdiction to the intake structure and pipeline.

The district engineer’s elaboration of the directly relevant impacts of the construction in the navigable waters in his description of the proposal (at A.R. at 901-02, above) indicates that his review was likely focused upon the consequences of that construction. This is further evidenced by full consideration of the district engineer’s statement of the Corps’ jurisdiction. The district engineer states quite clearly that the Corps’ jurisdiction is limited to consideration of impacts of construction of the intake structure and pipeline. That the district engineer goes on to state that the “primary focus of our evaluation is on the direct, impacts of the intake structure, pipeline and treatment plant” is not meant as an extension of jurisdiction to the treatment plant, but is instead a description of the district engineer’s analysis as concerning the consequences on navigation, water quality, threatened and endangered species and cultural resources that the intake structure and pipeline would create based upon the construction and maintenance of the entire project. In sum, the district engineer is concerned with the water treatment plant only insofar as it affects the effects of the intake structure and pipeline on navigation, etc.

The Water Works next challenges the reasonableness of the district engineer’s interpretation of the regulations on the basis that the intake structure and pipeline are interdependent with the water treatment plant and that, consequently, the entire project should be considered. This argument by the Water Works is significantly similar to the enablement theory raised by the plaintiffs in Save the Bay. Save the Bay, Inc. v. United States Corps of Engineers, 610 F.2d at 327. According to the Water Works, the project is interdependent in that one portion of the project will not work without the other parts, such as the pipeline and intake structure. So much is true. But the same was the case with the titanium dioxide plant and industrial wastewater pipeline in Save the Bay. Id. Even though the reasoning of the Water Works is correct, legal support is absent. As our predecessor circuit found in Save the Bay, there is no support for an enablement theory. Id. As.the Ninth Circuit Court of Appeals noted in Sylvester v. U.S. Army Corps of Engineers, 884 F.2d at 398, this reasoning was incorporated into the regulations presently employed by the Corps in determining the scope of its jurisdiction.

The district engineer determined that the treatment plant did not fall under the regulatory control of other federal statutes and that the construction of the intake structure and the pipeline crossings comprised a link in the chain used to provide water to Bessemer. See 33 C.F.R. Pt. 325, App. B § 7.b(2). Again, the plaintiff argues that the intake structure and pipeline crossings enable the water treatment .plant to operate and are therefore more than mere links in the chain.

The water treatment plant and the aspects of the project not related to the intake structure and the pipeline crossings are not within the scope of the Corps’ jurisdiction in undertaking the public interest review. The intake structure and pipeline crossings comprise but a small portion of the entire project. The water treatment plant is far upland from the intake structure. Perhaps the intake structure and pipeline are more than mere links, but the Corps’ permitting regulation over these structures constitutes no more than a “but-for” veto over the entire project. See Winnebago Tribe of Nebraska v. Ray, 621 F.2d at 272. Even if the intake structure and pipeline are essential for the viability of the project, the district engineer was not acting improperly in determining, as with the example of the power line crossing the unavoidable river, that the structures’ necessity did not permit the Corps to consider the entire project.

C. Needs Analysis.

The Water Works next argues that in failing to adequately determine if Bessemer needed an additional supply of water, the Corps improperly conducted its needs analysis under its general public interest review. The defendants respond that the Water Works’ argument that the Corps was required to perform a needs analysis is misguided.

33 C.F.R. § 320.4(a)(2)® states:

The following general criteria will be considered in the evaluation of every application:

(i) The relative extent of the public and private need for the proposed structure or work ...

The Corps contends that in the decision to permit the Bessemer project, a needs analysis was not necessary. In support of its position, the Corps cites 33 C.F.R. § 320.4(a)(3):

The specific weight of each factor is determined by its importance and relevance to the particular proposal. Accordingly, how important a specific factor is and how much c