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NORTHWEST SEA FARMS, INC. v. UNITED STATES ARMY CO

May 8, 1996

NORTHWEST SEA FARMS, INC., Plaintiff,
v.
UNITED STATES ARMY CORPS OF ENGINEERS, COLONEL DONALD T. WYNN, District Engineer, Corps of Engineers, Defendants.



The opinion of the court was delivered by: COUGHENOUR

 This matter comes before the Court on Northwest Sea Farms, Inc.'s ("Northwest") Motion for Summary Judgment and the Corps of Engineers and Colonel Donald Wynn's (hereinafter collectively referred to as "the Corps") Cross Motion for Summary Judgment. The Lummi Nation and the Nooksack Tribe have been granted leave to appear amicus curiae. Pursuant to the request of the parties, oral argument was heard on May 8, 1996.

 I. GENERAL BACKGROUND

 As the facts are extensively detailed in the memoranda of the parties and the Lummi Nation, the Court shall only briefly outline the factual and procedural history of this dispute.

 Since the 1980's, Northwest has been involved in a project to operate a fish farm for the production of salmon in the waters of Puget Sound. The project would be comprised of a number of net pens to be placed in the Rosario Strait, west of the Lummi Islands and near the Lummi Rocks. The area required for anchorage would cover some 11.36 acres, while the total surface area coverage would not exceed 1.41 acres. *fn1" Department of the Army Permit Evaluation and Decision Document, at AR 299.

 In 1992, the Corps denied Northwest's application for a required permit under § 10 of the Rivers and Harbors Act, 33 U.S.C. § 403 (1986). The denial was based upon a finding that the project would be against the public interest because it would conflict with the Lummi Nation's fishing rights at one of its usual and accustomed fishing places under the Treaty of Point Elliot. Department of the Army Permit Evaluation and Decision Document, at AR 311. The Corps' conclusion was based upon two predicate findings from the record. First, the Corps found that the record established that members of the Lummi Nation presently fish the proposed site of the project on a "more than extraordinary basis." Id. at AR 308. Second, the Corps found that the record illustrated that the project would deny members of the Lummi Nation access to the site. Id. Accordingly, the Corps determined that, under the relevant legal precedent, the permit should be denied as infringing upon the Lummi Nation's treaty rights.

 In addition to the § 10 permit, Northwest was also required to obtain a Substantial Development Permit and Conditional Use Permits under the State Shoreline Management Act, RCW 90.58.020, et seq. Initially, Northwest applied to Whatcom County for these permits. The matter was assigned to a hearing examiner who, after hearings in which the Lummi Nation participated, denied the permits. Whatcom County Hearing Examiner, Findings of Fact, Conclusions of Law, Decision and Permit, at AR 271. Among other considerations, the hearing examiner based this denial upon a finding that the project would interfere with the Lummi Nation's fishing rights. Id. at AR 268. Following this decision, Northwest moved for reconsideration. In denying the motion, the examiner again relied upon the potential impact of the project on Lummi Nation fishing. Whatcom County Hearing Examiner, Decision on Reconsideration, at AR 336. As with the initial hearings, the Lummi Nation participated in the review on reconsideration. *fn2"

 Northwest filed this action for review of the Corps' decision under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701, et seq. Northwest asserts that the Corps wrongfully denied the § 10 permit because: (1) the Corps may not deny a § 10 permit based solely upon a determination that a project will be located in Puget Sound waters where a tribe has treaty fishing rights; (2) principles of res judicata bind the Corps and the Lummi Nation to previous determinations of "no significant impact on fishing;" (3) the Corps is bound by its own regulations to final state permitting and environmental determinations when it utilizes a coordinated review process; and (4) the Corps denied Northwest a fair hearing on the § 10 permit. Northwest requests that this Court declare that the proposed project complies fully with all applicable law and regulations and enjoin the Corps from refusing to issue the § 10 permit. The Corps moves for summary judgment that its decision must be upheld as consistent with the record and relevant legal precedent.

 II. STANDARD OF REVIEW

 Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). Under the Rule, summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 Judicial review of the Corps' decision is governed by the APA § 706(2) and limited to a review of the administrative record before the agency. Friends of the Earth v. Hintz, 800 F.2d 822, 828-29 (9th Cir. 1986). In reviewing the record, the Court must determine whether the Corps' decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A) (1977). Factually, this deferential standard of review is a narrow one. The Court may not set aside the decision of the Corps unless there is no rational basis for the action in the record. Hintz, 800 F.2d at 831. Purely legal questions are reviewed de novo. Howard v. FAA, 17 F.3d 1213, 1215 (9th Cir. 1994).

 III. ANALYSIS

 A. TREATY FISHING RIGHTS OF THE LUMMI NATION

 In asserting that the Corps improperly denied the § 10 permit based upon its finding that the project would impinge upon treaty fishing rights, Northwest initially challenges the Corps' authority to consider such rights in making its permitting decisions. The Corps opposes this argument by asserting that the "trust ...


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