Universal Welding & Fab. v. Usace.

FILED NOT FOR PUBLICATION AUG 30 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNIVERSAL WELDING & No. 15-35906 FABRICATION, INC., an Alaska Corporation, D.C. No. 4:14-cv-00021-TMB

Plaintiff-Appellant, MEMORANDUM* v.

UNITED STATES ARMY CORPS OF ENGINEERS and CHRISTOPHER D. LESTOCHI, Colonel, in his official capacity as Commander of the Alaska District of the Corps,

Defendants-Appellees.

Appeal from the United States District Court for the District of Alaska Timothy M. Burgess, Chief Judge, Presiding

Argued and Submitted August 16, 2017 Anchorage, Alaska

Before: GRABER, CLIFTON, and M. SMITH, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.  Plaintiff Universal Welding appeals the district court’s grant of summary

judgment to the United States Army Corps of Engineers as to Plaintiff’s claim that

the Corps’ permit decision was invalid under the Administrative Procedure Act.

Reviewing de novo, “thus reviewing directly the agency’s action under the

[APA’s] arbitrary and capricious standard,” we affirm. Alaska Wilderness League

v. Jewell, 788 F.3d 1212, 1217 (9th Cir. 2015) (internal quotation marks omitted).

Plaintiff argues that the Corps’ permit decision was invalid because the

Corps lacks jurisdiction over the wetland on Plaintiff’s property. Specifically,

Plaintiff contends that the Corps plainly erred in interpreting 33 C.F.R.

§ 328.3(a)(7) to provide, rather than preclude, the Corps’ jurisdiction over the

subject wetland. That provision appears within a list of waters over which the

Corps may exercise regulatory jurisdiction:

(1) Waters that were, are, or may be used in interstate or foreign commerce; (2) “All interstate waters including interstate wetlands”; (3) “All other waters . . . , the use, degradation or destruction of which could affect interstate or foreign commerce”; (4) All impoundments of identified waters; (5) “Tributaries of waters identified in paragraphs (a)(1) through (4) of this section”; (6) “The territorial seas”; and, (7) “Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (a)(1) through (6) of this section.”

2 33 C.F.R. § 328.3(a) (2014).

The regulation clarifies that “[t]he term adjacent means bordering,

contiguous, or neighboring” and that “[w]etlands separated from other waters of

the United States by man-made dikes or barriers, natural river berms, beach dunes

and the like” are nonetheless “adjacent wetlands.” 33 C.F.R. § 328.3(c).

Plaintiff argues that, under § 328.3(a)(7), the wetland on its property falls

within an exception to the Corps’ regulatory authority. The Corps concluded that

it had jurisdiction over the subject wetland under § 328.3(a)(7) because that

wetland is adjacent to Channel C, which serves as a tributary to a non-wetland

jurisdictional water, Chena Slough. See § 328.3(a)(1), (5), (7). Despite the subject

wetland’s adjacency to another wetland, the Corps determined that its regulatory

authority was not precluded by the parenthetical language within § 328.3(a)(7),

which it interpreted as prohibiting the exercise of jurisdiction over a wetland only

if based upon that wetland’s adjacency to another wetland.

An agency’s interpretation of its own regulation is “controlling unless

plainly erroneous or inconsistent with the regulation.” Auer v. Robbins, 519 U.S.

452, 461 (1997) (internal quotation marks omitted). The Corps’ interpretation of

§ 328.3(a)(7) is not plainly erroneous. To the contrary, it is the most reasonable

reading of the regulation’s text. The Corps’ interpretation of the regulation is

3 supported by the placement of the parenthetical, “other than waters that are

themselves wetlands,” which modifies the “waters” to which the wetlands must be

adjacent for the Corps to exercise jurisdiction on that provision’s basis.

§ 328.3(a)(7).

To the extent that Plaintiff argues that all wetlands adjacent to other

wetlands fall outside the Corps’ regulatory authority, regardless of their adjacency

to a non-wetland water that would otherwise render them jurisdictional, we

conclude that this reading is unsupported by the regulation’s plain language. We

also reject Plaintiff’s argument that the subject wetland’s adjacency to Channel C

is defeated by a wetland situated between the subject wetland and Channel C.

Although the wetland on Plaintiff’s property does not immediately abut Channel C,

the Corps’ definition of “adjacent” permits “neighboring” waters to meet the

adjacency requirement, even if separated from another jurisdictional water by a

barrier, berm, or the like. See § 328.3(c).

Plaintiff’s additional challenges are also unavailing. Plaintiff argues that it

offers a “better” interpretation of the regulation, which would augment the limiting

effect of § 328.3(a)(7)’s parenthetical language. Yet, a “better” interpretation

would not make the Corps’ interpretation plainly erroneous, the standard under

which we must evaluate the Corps’ interpretation. Under the proper standard, “an

4 agency’s interpretation need not be the only possible reading of a regulation—or

even the best one—to prevail.” Decker v. Nw. Envt’l Def. Ctr., 568 U.S. 597, 613

(2013). Moreover, for the reasons already discussed, we are not persuaded that

Plaintiff’s interpretation is in fact “better.”

Finally, we conclude that the Corps’ jurisdictional determination was not

arbitrary or capricious. Applying its interpretation of § 328.3(a)(7), the Corps

determined that the subject wetland is jurisdictional because it is adjacent to

Channel C and sustains a significant nexus to Chena Slough. The record supports

this conclusion. The record shows that the wetland on Plaintiff’s property

contributes “shallow subsurface flow” to Channel C. The record also demonstrates

that the subject wetland—along with other wetlands in the area and Channel

C—“perform[] a variety of hydrologic, physical, geochemical and biological

functions critical to the integrity of Chena Slough,” such as filtering pollutants,

supplying nutrients, and supporting organisms. These unchallenged factual

findings are sufficient to support the Corps’ jurisdictional determination.

AFFIRMED.

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