Abandonment of Marina Project Moots NEPA Claims

Lichterman v. Pickwick Pines Marina, Inc., 2010 U.S. Dist. LEXIS 15102 (N.D. Miss. Feb. 22, 2010).

Mary McKenna, 2011 J.D. Candidate, University of Mississippi School of Law

A Mississippi district court recently found local landowners’ legal challenges to a marina project moot. The proposed project, located in northeast Mississippi, included the construction and operation of a convention center hotel, a marina, cabin sites, and covered boat slips on 31 acres of land. Subsequent to the filing of the lawsuit in 2007, the project developer abandoned the project which resulted in the termination of the developers’ easement, lease and building permits. The district court ruled that these terminations rendered the landowners’ claims moot. Further, the court held that the landowners had no private cause of action under the National Environmental Policy Act (NEPA) and that the clear language of the easement did not make the landowners third-party beneficiaries.

Background
In 2000, the Tennessee Valley Authority (TVA) leased approximately 31 acres of land to Tishomingo County Development Foundation (TCDF) for the proposed project.1 TVA conducted a NEPA review to determine the environmental impact of TCDF’s proposal, and issued a Finding of No Significant Impact (FONSI) and a Final Environmental Assessment (2000 EA) that contained several restrictive conditions, including a requirement that TCDF maintain a 50-foot undisturbed buffer to be managed as a shoreline management zone. The 2000 EA also required undisturbed forested buffers at least 50-feet wide be maintained and enhanced around the site with 100-foot minimum width along a cove at the north end of the site.2
        In 2005, TCDF subsequently leased the area to Pickwick Pines Marina (PPM) for the construction and operation of a marina. PPM applied to TVA for a permit to construct and operate the marina on the property. In 2006, TVA issued a Final Environmental Assessment (2006 EA) that evaluated the environmental effects of PPM’s proposal. Like the 2000 EA, the 2006 EA resulted in a FONSI but imposed the same restrictive conditions regarding buffers.3 TVA also issued PPM a TVA Section 26a shoreline construction permit4 (Section 26a permit) to build and operate the marina.
      When PPM submitted their detailed site development plans for approval, TVA proposed modifying the restrictive condition language to require a “managed” rather than an “undisturbed” buffer area to avoid inconsistencies among the conditions. TVA also concluded that it would be impossible to have an “undisturbed” buffer zone around a commercial marina project. In July 2007, John Lichterman, Vince Marascuilo and Marsha Marascuilo (collectively Lichterman), whose real property is situated across the embayment from PPM’s property, observed the cutting of trees in the buffer area. After they contacted TVA with their concerns, TVA ceased work and tree removal in the buffer zones, and conducted a NEPA review to determine whether modifying the buffer language would have significant environmental impacts. Following the NEPA review, TVA concluded that permitting a managed buffer rather than an undisturbed buffer would not alter TVA’s previous EAs and FONSIs, and would have negligible environmental impact.5
      TVA approved modification of the buffer language, and Lichterman sued petitioning the court to enjoin TVA from violating the restrictive conditions in the 2000 and 2006 EAs. The court denied the preliminary injunction regarding the 50-foot buffer because TVA’s review of the buffer language modification was not arbitrary and capricious as TVA took a “hard look” at the environmental consequences. The court, however, granted the preliminary injunction as to the 100-foot buffer due to TVA’s lack of any investigation, review, or analysis regarding the 100-foot buffer or the removal of trees on the northern bank.6 The U.S. Court of Appeals for the Fifth Circuit affirmed.7
      On March 16, 2009, a Mississippi district court granted TCDF’s and PPM’s separate motions to dismiss with respect to Lichterman’s NEPA claim as neither TCDF nor PPM are federal agencies, but denied TCDF’s and PPM’s motions with respect to Lichterman’s breach of contract claims. During the district and appellate proceedings, the easement from TVA to TCDF, the lease from TCDF to PPM, and PPM’s 26a permit were all terminated. TVA moved for judgment on the pleadings, or in the alternative, summary judgment.8

NEPA
Lichterman alleged that TVA violated NEPA by failing to require TCDF and PPM to adhere to the environmental commitments contained in the 2000 and 2006 EAs, which were incorporated in TCDF’s easement and PPM’s lease and Section 26a permit. While NEPA demands that federal agencies be environmentally conscious of the potential impacts certain projects may have on ecological surroundings, NEPA does not command the agency to favor an environmentally preferable course of action. NEPA only requires that the agency make its decision to proceed with the action after taking a “hard look at environmental consequences.”9 Thus, agency decisions are reviewable under the Administrative Procedures Act (APA) only on procedural grounds, not based on a particular substantive result.10 Because Lichterman’s challenge was not procedural (in fact, they conceded that TVA had adhered to NEPA’s procedural requirements in compiling the “satisfactory” EAs11) but rather substantive, the court held that Lichterman had no legal right to sue for the enforcement of the specific conditions contained in the 2000 and 2006 EAs.

Mootness
Further, TVA argued that Lichterman’s NEPA claims regarding the environmental commitments were moot because the site preparation work for the marina was completed in early 2008, the marina development proposed by TCDF and PPM was no longer being constructed, and TCDF’s easement and PPM’s Section 26a permit and lease were no longer in force. All actions that might violate the 2000 and 2006 EAs had been simultaneously abandoned with the termination of the easement and lease and the cessation of the project. “A claim under NEPA does not present a live controversy when the complained of action has been completed so that no effective relief is available.”12 Because a case or controversy must exist at all stages of the litigation, the court held that even if further NEPA process were taken, given the circumstances, declaring TVA’s actions arbitrary and capricious or writing a new EA assessing a terminated project did not constitute true relief that would maintain Lichterman’s claim as a live controversy.13
      Lichterman further asserted their claims were not moot because the project was merely interrupted rather than completed.14 The court disagreed. Regardless of whether TVA was waiting for a replacement developer, any future development of the site would be considered a new “major federal action” under NEPA, and TVA would have to conduct a new environmental assessment.                   
       Although a case may technically be moot, an exception to the mootness doctrine is applicable if the challenged problem is likely to recur or is otherwise capable of repetition, yet evading review.15 The court, however, found that Lichterman failed to prove valid application of the exception; because the easement, the lease and the Section 26a permit had all been terminated, any future development in the area would be a new major federal action requiring new environmental reviews under NEPA.16 Nor would future injuries evade review because Lichterman would have the opportunity to apply for a preliminary and permanent injunction, which would halt construction.

Third Party Beneficiaries
Lichterman alleged they were third-party beneficiaries of the easement because the easement language provided for a 100-foot buffer at the end of the site, which is across the embayment from Lichterman’s real property, while specifying a mere 50-foot buffer around the perimeter of the rest of the site. To sue as a third-party beneficiary of a contract, the third party must show that the contract reflects the parties’ express or implied intention to benefit the third party.17 “When a contract is with a government agency, parties that benefit are generally assumed to be incidental beneficiaries, and may not enforce the contract absent a clear intent to the contrary.”18 Although Lichterman argued that the 100-foot buffer condition was particularly intended to protect and preserve the value of their land, the court determined that even if the 100-foot buffer was included in the easement with Lichterman in mind, the easement language was not specific enough to demonstrate that TVA and TCDF intended to benefit Lichterman; the mere inclusion of the 100-foot buffer on the north end without clear intent did not make Lichterman third-party beneficiaries with enforceable rights.19

Conclusion
Even though Lichterman’s claims in the present case were mooted, in the event of future development of these 31 acres, Lichterman will have the opportunity, if they deem necessary, to seek injunctive relief to ensure compliance with NEPA procedural mandates.20 In addition, because any future development in the area will constitute a new major federal action, pursuant to NEPA, TVA will be required to assess anew the environmental impact of any future proposal. Nevertheless, the decision reinforces the notion that a violation of NEPA does not create an implied private right of action on behalf of injured citizens.

Endnotes
1.  Lichterman v. PPM Pines Marina, Inc., 2010 U.S. Dist. LEXIS 15102 at *2 (N.D. Miss. Feb. 22, 2010).
2.   Id. at *2-3.
3.   Id. at *3-4.
4.   Section 26a of the TVA Act requires TVA approval before any construction may commence that affects navigation, flood control, or public lands along the shoreline of the TVA reservoirs, in the Tennessee River or in its tributaries. See Tennessee Valley Authority, http://www.tva.gov/river/26apermits/ index.htm (last visited Apr. 30, 2010).
5.  Id. at *5-6.
6.  Id. at *5-7.
7.  Id.
8.  Id. at *8.
9.  Id. at *10 (citing Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989)).
10. Lichterman, 2010 U.S. District LEXIS 15102, at *10.
11. Id. at *11.
12. Id. at *13. See Bayou Liberty Ass’n, Inc. v. U.S. Army Corps of Eng’rs, 217 F.3d 393, 398 (5th Cir. 2000) (holding that a substantial completion of construction project mooted NEPA claim).
13. Lichterman, 2010 U.S. District LEXIS 15102 at *11.
14. Id. at *14.
15. Id. at *15 (citing Vieux Carre Prop. Owners, Residents & Assoc., Inc. v. Brown, 948 F.2d 1436, 1447 (5th Cir. 1991)).
16. Id. at *17.
17. Id. at *18.
18. Id. (quoting Kremen v. Cohen, 337 F.3d 1024, 1029 (9th Cir. 2003)).
19. Id. at *19.
20. Id. at *17.

Recommended citation: Mary McKenna, Abandonment of Marina Project Moots NEPA Claims 30:1 WATER LOG 8 (2010).