1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JEFFREY H. WOOD Acting Assistant Attorney General ANDREW J. DOYLE (FL Bar No. 84948) JOHN THOMAS H. DO (CA Bar No. 285075) SAMARA M. SPENCE (TN Bar No. 031484) United States Department of Justice Environment and Natural Resources Division P.O. Box 7611 Washington, D.C. 20044 / (202) 514-4427, 514-2593 or 514-2285 PHILLIP A. TALBERT United States Attorney GREGORY T. BRODERICK (CA Bar No. 220871) Assistant United States Attorney 501 I Street, Suite 10-100 Sacramento, CA 95814 (916) 554-2700 (p) [email protected]Attorneys for Counterclaim-Plaintiff United States of America UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA DUARTE NURSERY, INC.; and JOHN DUARTE, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS; and UNITED STATES OF AMERICA, Defendants. No. 2:13−CV−02095−KJM−DB UNITED STATES’ TRIAL BRIEF __________________________________ UNITED STATES OF AMERICA, Trial: August 15, 2017 Counterclaim- Plaintiff, v. DUARTE NURSERY, INC.; and JOHN DUARTE, Counterclaim- Defendants. Time: 9:00 a.m. Place: Courtroom 3 Judge: Hon. Kimberly J. Mueller Case 2:13-cv-02095-KJM-DB Document 307 Filed 07/31/17 Page 1 of 26
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JEFFREY H. WOOD Acting Assistant Attorney General ANDREW J. DOYLE (FL Bar No. 84948) JOHN THOMAS H. DO (CA Bar No. 285075) SAMARA M. SPENCE (TN Bar No. 031484) United States Department of Justice Environment and Natural Resources Division P.O. Box 7611 Washington, D.C. 20044 / (202) 514-4427, 514-2593 or 514-2285 PHILLIP A. TALBERT United States Attorney GREGORY T. BRODERICK (CA Bar No. 220871) Assistant United States Attorney 501 I Street, Suite 10-100 Sacramento, CA 95814 (916) 554-2700 (p) [email protected] Attorneys for Counterclaim-Plaintiff United States of America
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
DUARTE NURSERY, INC.; and JOHN DUARTE, Plaintiffs, v. UNITED STATES ARMY CORPS OF ENGINEERS; and UNITED STATES OF AMERICA, Defendants.
No. 2:13−CV−02095−KJM−DB UNITED STATES’ TRIAL BRIEF
__________________________________ UNITED STATES OF AMERICA,
Trial: August 15, 2017
Counterclaim- Plaintiff, v. DUARTE NURSERY, INC.; and JOHN DUARTE, Counterclaim- Defendants.
The streams, vernal pools, and vernal swales at the Duarte site functioned as one system
and as part of Coyote Creek. To help illustrate this system, one can imagine their structure as
resembling the shape of a large tree. The main stem of Coyote Creek, which traverses the northern
boundary of the Duarte site, is the trunk of the tree while the many streams and wetlands within
the body of the Duarte site are the tree’s branches and leaves. Downstream (east) of the Duarte
site, Coyote Creek regularly contributes flow to Oat Creek and to the Sacramento River at least
seasonally and far more than just in response to rainfall. Coyote Creek, Oat Creek, and the
Sacramento River also share close ecological connections. They all contain critical habitat for the
threatened Central Valley Spring Run Chinook Salmon, and Oat Creek and the Sacramento River
are listed as critical habitat for the threatened Central Valley Steelhead. 50 C.F.R.
§ 226.211(k)(1)(ii), (l)(1)(ii). Fish depend on these waters to complete reproduction and growth.
They can be anadromous, meaning that they are hatched in freshwater, spend the majority of
their life in saltwater, and return to freshwater to spawn.
The Duarte site has very old and well-developed soils and subsoils. Ponding and soil
saturation is common during the wet season, because the slowly permeable layers at or near the
ground surface impede rapid vertical movement of water. Incoming water flows downward in
the soil until it encounters a slowly permeable layer. Water then flows in a horizontal fashion
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and above the slowly permeable soil layers. These conditions favor cattle grazing, as the surface
water (in streams or ponded wetlands) provide a natural water source for the cattle. But these
conditions are not favorable for growing almond, walnut, olive, and other kinds of orchard trees
with deep roots because these trees are not adapted to grow and thrive in shallow ponded or
saturated soils. To convert and develop sites like Duarte’s for orchards, powerful equipment
must be used to penetrate, break up, and destroy hardened restrictive or slowly permeable soil
layers so that water movement within the soil is significantly changed from being ponded or
saturated at or near the soil surface to being strongly vertical, with water moving vertically to the
rooting zone of the orchard trees.
B. DUARTE PURCHASED A SITE IT KNEW HAD PROTECTED WATERS
In 2011, what is now known as the Duarte site was part of a larger site comprising 1,950
acres, with approximately 450 acres located south of Coyote Creek’s main stem and 1,500 acres
north of that. Roger J. LaPant, Jr. purchased all 1,950 acres that year, planning to convert it to
orchards. Mr. LaPant’s interest reflected the steadily increasing market value of orchard trees,
particularly walnuts, from 2009 to 2013. By 2013, the number of acres used for growing walnut
and almond trees in Tehama County had increased by 50 percent compared to 2004.
Mr. LaPant used ripping equipment on the northern parcel. Then, in early 2012, he hired
an environmental consultant, NorthStar Environmental (“NorthStar”), to delineate waters of the
United States throughout the site. In February 2012, NorthStar produced a delineation and map
identifying a significant acreage of streams and wetlands in the southern parcel, where Mr.
LaPant had not operated. In April 2012, Duarte Nursery purchased the entire site from Mr.
LaPant for $5.6 million. See S.J. Order at 6. Duarte, like Mr. LaPant, was pursuing an orchard
development. See USA Ex. 90A (John Duarte Dep.) at 121:22 to 122:1. Before completing the
purchase, Duarte obtained a copy of NorthStar’s delineation and map. Duarte regarded
NorthStar’s work to be “thorough and accurate.” Id. at 72:25 to 73:1.
In early May 2012, Duarte entered into a scope of work agreement with NorthStar. See
USA Ex. 13. NorthStar was to split its delineation into “two separate reports,” one for the northern
parcel and the other for the southern parcel. The agreement further stated that NorthStar’s
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delineation would be “possibly verified” by the Corps. The agreement repeatedly cautioned: “All
Delineations are DRAFT until verified by the USACE,” and “NorthStar is not responsible for
penalties that may occur from project proponents proceeding without a verified delineation.”
In late May 2012, James Stevens, a NorthStar principal, wrote a letter to Duarte. USA
Ex. 12. He began: “Our staff has been informed by Mr. Brad Munson that you will be proceeding
with farming activities on the . . . property.” (Mr. Munson acted as Duarte’s agent. See S.J. Order
at 9-10.) He continued: “the regulatory agencies are currently taking special interest in farming
activities specifically in Tehama and Glenn Counties as well as in critical habitat for listed species
(which the property is in).” Further, Mr. Stevens stressed: “we strongly recommend that you have
the draft Delineation of Waters of the U.S. . . . prepared by NorthStar . . . verified by the U.S.
Army Corps of Engineers.” Mr. Stevens underscored that “significant penalties” may ensue if
Duarte proceeded without at least a Corps-verified delineation.
In July 2012, NorthStar produced a delineation and map for the 450-acre southern site.
See S.J. Order at 6. Consistent with the earlier report, the July 2012 report stated: (1) “Areas of
intact vernal and seasonal swales occur within the Property” as well as “drainages”; (2) “Little
evidence of past agricultural activities was observed”; and (3) “A total of 16.17 acres of pre-
jurisdictional waters of the U.S. were delineated within the Property.” USA Ex. 20 at 5, 13. A
map identifying all delineated waters accompanied the report. Id. at 275. Again, NorthStar
advised Duarte to consult with the Corps before proceeding. Id. at 5.
In November 2012, Duarte completed the sale of the 1,500-acre northern portion to
Goose Pond Ag, Inc. for $ 8.7 million. S.J. Order at 9:18-19; see also id. at 6. Duarte profited
from the sale. See USA Ex. 90A (John Duarte Dep.) at 46:15-18.
C. DUARTE RIPPED MORE THAN 22 ACRES OF PROTECTED WATERS
In November 2012, Duarte Nursery’s contractor, Caleb Unruh, began ripping, i.e.,
operating a 360-horsepower International Harvester Case Quadtrac 9370 with attached Wilcox
ripper, NSC 36-24-7, on the 450-acre parcel that Duarte still owned. See S.J. Order at 10; USA
Ex. 90E (Unruh Dep.) at 61:22 to 63:20, 124:15-23; USA Ex. 33 at 3 (photograph). At no time
prior to or during operations did Duarte or any person on Duarte’s behalf: (1) consult with the
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Corps; (2) instruct Mr. Unruh to avoid waters of the United States; (3) allow NorthStar to install
flags or similar markers in the field demarcating the boundaries of waters of the United States; or
(4) even provide Mr. Unruh with NorthStar’s map of waters of the United States. For nearly
three weeks, the rippers operated in all varieties of waters, including, for example, below the
ordinary high water mark of Coyote Creek’s main stem and through the middle of streams, vernal
pools, and vernal swales. In all, the rippers discharged pollutants into over 22 acres of waters of
the United States, approximately half of which are streams and the other half wetlands.
See USA Ex. 61. On or about December 12, 2012, Mr. Unruh submitted an invoice for
“Ripping” “450 acres,” USA Ex. 26, which Duarte paid.
On or about December 19, 2012, an airplane dropped wheat seeds onto the site at Duarte’s
behest. The seeds were not incorporated into the ground, wheat grew only in a thin or sparse
manner, and Duarte never analyzed whether it would be worth harvesting. USA Ex. 90A (John
Duarte Dep.) at 67:5-68:19; USA Ex. 90B (James Duarte Dep.) at 171:15-172:1; USA Ex. 90E
(Caleb Unruh Dep.) at 149:16-25, 162:10-22, 164:9-165:2.
Meanwhile, the Corps discovered Duarte’s violations on November 28, 2012, when its
chief regulatory staffer from Redding, Matthew Kelley, drove by the site. Mr. Kelley returned to
Paskenta Road on December 6 and 17, 2012. At no time did Mr. Kelley observe any flags or
other indications that waters of the United States were being avoided. Instead, he observed the
tractor forcefully dragging ripper shanks through streams, vernal pools, and vernal swales. He
saw earthen material being (1) wrenched up and redeposited from below the ground surface to
above the ground surface and into waters of the United States; (2) redistributed from one location
to another within waters of the United States; and (3) relocated from uplands and dragged into
waters of the United States. The photographs Mr. Kelley took show heaps of freshly-deposited
dredged or fill material within streams, blocking the flow. See, e.g., USA Ex. 32 at 8, 10; USA
Ex. 33 at 1.
On December 11, 2012, Mr. Kelley telephoned John Duarte. Mr. Kelley advised that
“there were wetlands and drainages on the site and the ripping activities needed a permit.” USA
Ex. 28. Mr. Duarte responded that “they knew where the wetland[s] were and were staying away
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from them.” Id. Mr. Kelley stated that “wetlands and drainages were not being avoided and
[Duarte] should cease and desist additional impacts to waters of the U.S. without a permit.” Id.
The Corps followed up with a letter in February 2013, which Duarte challenged when
commencing this action in October 2013. For two years into the litigation, Duarte continued to
assert that there had been complete avoidance.1 But in fact, John Duarte did not investigate the
question of avoidance until the summer of 2014. In September 2015, Mr. Duarte finally conceded
that rippers “did not avoid all of the wetlands delineated by NorthStar.” S.J. Order at 11:16-17.
D. DUARTE HARMED PROTECTED WATERS
The United States’ inspection of the Duarte site was led by Lyndon C. Lee, Ph.D.,
Professional Wetland Scientist, and supported by Wade L. Nutter, Ph.D., Professional
Hydrologist; Scott R. Stewart, Ph.D., Certified Professional Soil Scientist; Mark C. Rains, Ph.D.,
Professional Wetland Scientist; and Richard A. Lis, Ph.D. These scientists were already familiar
with the Coyote Creek watershed, having examined and taken measurements in streams, vernal
pools, and vernal swales in various locations, including just west of the Duarte site and
downstream from the Duarte site along Coyote Creek all the way to Oat Creek’s junction with
the Sacramento River. The scientists were also familiar with the data collected on the site and
mapping products developed by NorthStar in 2012 (USA Ex. 20) and North State Resources in
1994 (USA Ex. 8).
Over the course of about two weeks, the scientists examined representative aquatic
locations on the site and conducted various analyses. The team found, inter alia:
• Ripping created upland (or dryland) areas within waters of the United States.
• These upland areas are not conducive to growth and development of plant species
that are typically adapted to life in saturated soil conditions (i.e., hydrophytic plant
species), and they significantly impede subsurface water flow patterns.
• The ripper changed soil conditions and patterns of water flow and circulation in a
manner that retarded growth of native hydrophytic plant species.
1 USA Ex. 1 (Duarte’s original compl.) ¶ 47; USA Ex. 4 (Duarte’s first am. compl.) ¶ 47; see also USA Ex. 5 (Duarte’s second am. compl.) ¶ 48 (substantially similar allegation).
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• The equipment dragged soil into waters of the United States and resulted in an
increase of the bottom elevation of waters of the United States, the conversion of
their boundary areas to upland, and increased erosion and sediment deposition
within on-site and in downstream waters.
• The rippers adversely impacted the critical habitat of protected vernal pool fairy
shrimp and the suitable habitat of protected vernal pool tadpole shrimp.
Moreover, the equipment pierced or fractured slowly permeable layers at and up to
approximately 14 inches below the surface. Fracturing these layers significantly and discernibly
alters the rate of vertical and lateral water movement into, within, and out of waters of the United
States. This alteration has numerous secondary impacts.
IV. ARGUMENT
The Court has already found Duarte Nursery, Inc. and John Duarte liable for violating 33
U.S.C. § 1311(a) when they discharged dredged or fill material into waters of the United
States—“at least in areas of the wetlands as delineated by NorthStar,” S.J. Order at 29:18—
without authorization under 33 U.S.C. § 1344. During the remedy phase, the Court should award
injunctive relief aimed at removing the pollutants from all of the impacted waters of the United
States, bringing Duarte into compliance, and compensating for the loss of functioning to the
large and sensitive complex of streams, vernal pools, and vernal swales that Duarte harmed. In
addition, the Court should assess a civil penalty sufficient to punish Duarte and effect deterrence.
A. THE COURT SHOULD AWARD INJUNCTIVE RELIEF
Under the CWA, this Court has broad discretion “to order that relief it considers
necessary to secure prompt compliance with the Act.” United States v. Akers, 785 F.2d 814, 823
(9th Cir. 1986) (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982)). The Court
may order any “appropriate relief, including a permanent or temporary injunction.” 33 U.S.C.
§ 1319(b). “Every order granting an injunction . . . must: (A) state the reasons why it issued; (B)
state its terms specifically; and (C) describe in reasonable detail—and not by referring to the
complaint or other document—the act or acts restrained or required.” Fed. R. Civ. P. 65(d). As
elaborated below, the United States requests three components of injunctive relief.
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1. Duarte should perform on-site restoration work
First, Duarte should be ordered to remove the dredged or fill material that it unlawfully
placed into 22.2 acres of waters of the United States on the Duarte property, in the locations shown
in USA Ex. 61. See P.J. ¶ 3. “In evaluating remediation or restoration proposals, courts . . .
consider[] three factors: (1) whether the proposal ‘would confer maximum environmental
benefits,’ (2) whether it is ‘achievable as a practical matter,’ and (3) whether it bears ‘an equitable
relationship to the degree and kind of wrong it is intended to remedy.’” United States v. Deaton,
332 F.3d 698, 714 (4th Cir. 2003) (quoting United States v. Cumberland Farms of Conn., Inc., 826
F.2d 1151, 1164 (1st Cir. 1987)). The United States’ restoration proposal meets these criteria.
Expert testimony will show that, in the absence of any restoration on the Duarte property, it
will take unacceptably long, indeed many decades, for the ripped soils to re-organize and build
new slowly permeable layers at or near the surface. The streams, vernal pools, and vernal swales
on the Duarte site depend upon the lateral movement of water on the soil surface and in shallow
Because a key purpose of a civil penalty is to deter the violator from committing future
violations, Tull v. United States, 481 U.S. 412, 422-23 (1987), courts consider “the economic
impact of the penalty on the violator.” 33 U.S.C. § 1319(d); see also Smithfield Foods, 972 F.
Supp. at 352-53. The penalty amount must be “high enough so that the discharger cannot ‘write
it off’ as an acceptable environmental trade-off for doing business.” Gulf Park, 14 F. Supp. 2d at
869 (citation and internal quotations omitted). “[T]he burden of showing that the impact of a
penalty would be ruinous or otherwise disabling” is on the violator. Id. at 868 (citation omitted).
Here, the penalty requested is “large enough to hurt,” United States v. Mac’s Muffler
Shop, Inc., No. 85-cv-138, 1986 WL 15443, at *8 (N.D. Ga. Nov. 4, 1986) (citation and internal
quotations omitted), but would not have the adverse impacts that Duarte’s hyperbolic arguments
suggest. Dr. Meyer has examined Duarte’s finances in detail, notwithstanding Duarte’s refusal
to produce all relevant information. As she will explain, Duarte Nursery and John Duarte
combined have the ability to pay a penalty of at least $ 8.4 million. Indeed, the same year as the
violations, the company made more than $3 million from a related real estate transaction in
Tehama County, i.e., flipping the northern parcel after owning it for less than a year. When, as
here, CWA violators “cannot show that a penalty will have a ruinous effect, the economic impact
factor . . . will not reduce the penalty.” Gulf Park, 14 F. Supp. 2d at 868 (citations omitted).
5. Additional considerations compel a substantial penalty
“[J]ustice [] require[s]” that the Court consider one additional factor: the need to reaffirm
that similarly situated persons must comply with the CWA. See 33 U.S.C. § 1319(d). This
action is one of three recent cases along the Coyote Creek tributary system, all of which involve
illegal discharges to convert streams, vernal pools, and vernal swales to orchards. United States
v. LaPant, No. 2:16-cv-01498-KJM-DB (E.D. Cal.); United States v. Anchordoguy, No. 2:13-cv-
848-MCE-CMK (E.D. Cal.). The penalty here will be taken by many as a measure of the
importance of complying with the CWA in Tehama County: “if the regulated community
perceives that violations of the law are treated lightly, the government’s regulatory program is
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subverted.” Gulf Park, 14 F. Supp. 2d at 869 (citation omitted). A substantial civil penalty will
show that Duarte cannot violate the CWA and fare better than law-abiding developers.
C. DUARTE’S REMEDIAL ARGUMENTS ARE MERITLESS
Duarte argues, without support, that no injunctive relief or civil penalty is appropriate.
See Amended Joint Pretrial Statement (ECF No. 278) at 24:1 to 26:7, 34:3-5. As explained
above, Duarte is wrong that: (1) its CWA violations were harmless; (2) Duarte took meaningful
precautions to avoid waters of the United States; (3) the Corps knew ahead of time that Duarte
would violate the CWA; and (4) the civil penalty sought exceeds Duarte’s ability to pay.
Duarte also argues—both here (in a motion for stay, ECF Nos. 269, 273) and to the Ninth
Circuit (in a petition for a writ of mandamus, No. 17-71983)—that the Court’s remedial
decisions should be different if the streams, vernal pools, and vernal swales that Duarte filled
were subject to the waters-of-the-United-States standard set forth in the Rapanos plurality
opinion, 547 U.S. at 732 n.5, 733, 739 & 742. Duarte is wrong. That standard is met. The
Coyote Creek tributary system contributes flow to the Sacramento River nearly continuously
during wet seasons (typically October through April), and that system includes the main stem of
Coyote Creek and its many branch streams that flow through the Duarte site. In addition, the
vast majority of the vernal pools and vernal swales on the site are part of that system; they either
occur within or abut streams. Only a negligible (i.e., one to two) percent of the sites’ adjacent
wetlands are physically separated from streams by uplands. See, e.g., USA Ex. 43 (Expert
Report) at 79, 167; USA Exs. 59-61 (maps of streams, vernal pools, and vernal swales); USA Ex.
20 (NorthStar’s July 2012 delineation) at 15. The conservative (i.e., in Duarte’s favor) nature of
the United States’ remedial requests more than offset any minor difference.
Finally, the civil penalty requested is easily justified even if this Court only considers
streams and wetlands meeting the Rapanos plurality criteria. In addition, it would be within the
scope of this Court’s discretion to order injunctive relief based on the full 22.2 acres of waters
impacted because such a remedy would be “reasonably related to a discharge” into the wetlands
in or abutting jurisdictional waters on the property. United States v. Mango, 199 F.3d 85, 94 (2d
Cir. 1999) (“[I]f a condition requiring the defendants to take measures on dry land reasonably
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relates to a discharge into the navigable waters, it is valid.”) (emphasis added).3
V. CONCLUSION
The United States’ requests for injunctive relief and a civil penalty should be granted.
Respectfully submitted,
JEFFREY H. WOOD Acting Assistant Attorney General
Dated: July 31, 2017 /s Andrew J. Doyle ANDREW J. DOYLE (FL Bar No.84948) JOHN THOMAS H. DO (CA Bar No. 285075) SAMARA M. SPENCE (TN Bar No. 031484) United States Department of Justice Environment and Natural Resources Division PHILLIP A. TALBERT United States Attorney GREGORY T. BRODERICK (CA Bar No. 220871) Assistant United States Attorney 501 I Street, Suite 10-100 Sacramento, CA 95814 (916) 554-2700 (p) (916) 554-2900 (f) [email protected] Attorneys for the United States
3 Contrary to Duarte’s suggestion in a recent motion in limine (ECF No. 277-1), the Court would not need to hear any additional expert testimony or receive any new exhibits to conclude that the Rapanos plurality standard is met. The foregoing facts are already relevant to show that Duarte’s CWA violations are harmful. As explained above, Duarte’s ripping fundamentally altered the hydrology of streams, vernal pools, and vernal swales; given the system’s hydrological interconnectedness, that alteration affects the integrity of the Sacramento River.
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