United States Court of Appeals,
Fifth Circuit.
No. 91-4638.
UNITED TEXAS TRANSMISSION COMPANY, Plaintiff-Appellant,
v.
UNITED STATES ARMY CORPS OF ENGINEERS, Etc., et al., Defendants-Appellees.
Nov. 18, 1993.
Appeal from the United States District Court for the Eastern District of Texas.
Before JONES and WIENER, Circuit Judges, and LITTLE,* District Judge.
WIENER, Circuit Judge:
We write today to resolve a long-standing dispute as to the party responsible for the costs of
relocating sections of two pipelines which, pursuant to permits issued by the United States Army
Corps of Engineers (the Corps), ran under the Hillebrandt Bayou (the bayou) in Southeast Texas.
At all relevant times, the pipelines were owned by the United Texas Transmission Company
(UTTCO). Their relocation was required to conform with a project to widen and deepen the bayou.
This project was a joint endeavor of Jefferson County Drainage District NO. 6 (Drainage District)
and the Corps. UTTCO refused the Corps' order to relocate the lines until UTTCO received
assurances that it would receive reimbursement for costs and expenses of relocation. In turn, the
Corps revoked UTTCO's permits to cross under the bayou, a navigable st ream, and this litigation
ensued.
The district court granted summary judgment in favor of the Corps and the Drainage District,
holding that UTTCO could be compelled to pay for the entire relocation of the pipelines under the
permits. The court also held that, in the face of UTTCO's refusal to comply with the Corps' order
to relocate the pipelines, t he Corps' revocation of UTTCO's permits was not an abuse of its
discretion. Even though we view the case in a different manner than did the district court, we affirm.
I
*
District Judge of the Western District of Louisiana, sitting by designation.
FACTS AND PROCEDURAL HISTORY
Historically, Southeast Texas in general and Jefferson County in particular have been plagued
by destructive floods. Man's attempts to alter drainage patterns in the area have been legion but less
than wholly successful. Specifically, since 1912, numerous efforts have been instituted to curb the
problems resulting from the flooding of the bayou.
The instant widening and deepening project was instituted under the aegis of the Flood
Control Act of 1965, which authorized many such projects throughout the country.1 These projects
are conducted as joint efforts between local sponsors, such as the Drainage District (with local funds
furnished for the particular improvement), and the Corps (with funds appropriated by Congress).
In 1972, the United States and the Drainage District entered into a "Local Cooperation
Agreement." Under that agreement, the Drainage District was to work with the Corps and was to
provide all the necessary lands, easements, and rights of way necessary for the project. In addition,
the Drainage District agreed to make "all necessary alterations and relocations of structures and
utilities" that were necessary for the project.
In 1951 and 1956, UTTCO's predecessor in ownership of the pipelines was granted permits
from the Corps to lay two gas pipelines under the bed of the bayou. When UTTCO acquired the
pipelines it succeeded to these permits (and to easements across lands abutting the bayou—lands
through which portions of the pipelines ran). The permits were issued by the Corps pursuant to § 10
of the Rivers and Harbors Act of 1899 (hereafter, § 10 permits). The language of ¶ (f ) of the instant
§ 10 permits is relevant to our inquiry. That paragraph provides, in pertinent part:
(f ) That if the future operations by the United States require an alteration in the position or
the structure or work herein authorized ... the owner will be required upon due notice from
the Secretary of the Army, to remove or alter the structural work or obstructions caused
thereby without expense to the United States....2
The scope of the Corps' authority under ¶ (f ) to demand relocation of the pipelines at the expense
of the permit holder is at the heart of this lawsuit.
1
P.L. No. 89-298, 79 Stat. 1073 (Oct. 27, 1965).
2
(Emphasis added).
In 1987, UTTCO was informed by the Corps that the pipelines would have to be relocated
to accommodate the flood control project. UTTCO instituted the preparation of a preliminary
estimate of the cost of the necessary relocations. When the results were received, the Corps and the
Drainage District were advised by UTTCO that it was prepared to go forward with the relocation as
soon as it received assurance from the Drainage District that UTTCO would be reimbursed for the
entire cost of relocation—approximately $1,060,000. Initially, the Corps agreed with UTTCO's
assertion that the Drainage District was responsible for at least some of the cost of the pipeline
relocations. Later, however, the Corps took the position (with the Drainage District) that, under the
language of the permits, the Corps could require UTTCO to relocate the pipelines and absorb the
entire cost.3
When UTTCO made clear that it was not prepared to relocate the pipelines without
assurances of reimbursement, a stalemate developed. The parties corresponded and met frequently,
each attempting to convince the other that it had to pay for the relocations. These efforts failed,
however, with a result that the flood control project was delayed by UTTCO's unflagging refusal to
relocate its pipelines until it received assurances of reimbursement.
In February 1989, the Corps notified UTTCO that its § 10 permits had been suspended and
advised UTTCO of its right to require a public hearing. According to that notification, appropriate
action on the permits—which could include reinstatement, modification, or revocation—would be
taken only after such a hearing (if one were requested). The public hearing was held in June 1989.
The principal matter discussed was whether the Corps' use of its asserted authority to force UTTCO
to move its pipelines at its own expense would be in the "public interest." UTTCO continued to
refuse to bear the relocation cost, arguing that the Corps had no authority to order such a relocation.
UTTCO also continued to maintain that under the Cooperation Agreement the Drainage District was
3
UTTCO has maintained throughout the course of this litigation that, when the Drainage
District began to run low on funds, it developed the plan to have the Corps to use its perceived
authority under the § 10 permits to force pipeline owners to absorb the costs of relocations,
thereby relieving the District of its obligation to do so under the Cooperation Agreement
provision for the District to provide easements and relocations. We are concerned here with the
Corps' authority under § 10 permits and not why it may have chosen to exert that authority.
obligated to pay for any required relocations.
After the public hearing but before the Corps took formal action on the permits, UTTCO filed
the instant lawsuit, naming the Corps and the Drainage District as defendants. The lawsuit was filed
in July 1989, and in it UTTCO sought monetary, injunctive, and declaratory relief. Essentially,
UTTCO sought a determination that it could not be forced by the Corps to pay for the relocation of
the pipelines.
In August 1990, over a year after this suit was filed, the Corps formally considered the status
of UTTCO's § 10 permits. The Corps noted that UTTCO had been notified repeatedly of the need
to relocate the pipelines, but that UTTCO had consistently refused to comply. The Corps also
asserted that it had authority to revoke the permits of a recalcitrant permit holder such as UTTCO,
citing a string of precedents which held that a permit holder does not have a vested interest in the
permit. As for UTTCO's argument that the Corps had no authority to order relocation of facilities
situated outside the boundaries of the stream as they existed when the § 10 permits were issued, the
Corps found:
The permits do not provide that future operations be within the stream bed of the Hillebrandt
Bayou, or that the owner must be given assurance of compensation for such pipeline
relocation on the fastlands [i.e., the lands outside of the original stream banks]. On the
contrary, permit conditions state that the owner will be required to remove or alter the
structural work for future operations without expense to the United States.
The Corps then revoked the permits, issuing its opinion on August 13, 1990.
The district court granted summary judgment in the instant case in August 1991. In its
opinion, the court stated that "no dispute whatsoever exists as to the facts involved in the claims upon
which summary judgment is granted."4 That court found—at least implicitly—that some parts of the
pipelines which had to be relocated lay inside the original boundaries of the streams and other parts
of the pipelines which had to be relocated lay outside of those boundaries.5 The court then held that
UTTCO could be forced to pay the costs of accomplishing the required relocations of parts of the
4
UTTCO v. Corps, 772 F.Supp. 952, 954 (E.D.Tex.1991).
5
That court stated that "UTTCO has agreed that it is possible it does not have a claim against
the federal government for the costs of relocating those parts of the pipelines located within the
navigable waterway."
pipelines, including parts located outside the original banks of the bayou. Specifically, the court held
that the work outside the original banks was incidental to the work inside the original banks, and that
UTTCO could thus be forced to pay for the entire relocation.6 The court also held that, inasmuch
as UTTCO had improperly refused to obey the Corps' order to relocate the pipelines, the Corps was
authorized, under the language in ¶ (f ) of the § 10 permits, to revoke the permits and order the
pipelines removed.
The district court summarized its view of the case and the arguments that UTTCO was
making, stating:
[T]his court opines that apparently the plaintiff pipeline owner here wishes to reap the
benefits of conducting business over navigable waterways, without bearing any of the
burdens. The court assumes the pipelines were constructed over the Hillebrandt Bayou
because that was the most direct and profitable route for the transmission of natural gas. For
over thirty years, pipeline owners have been profiting from the federal government's generous
permission to cross a navigable waterway. Now flood control for a substanti al portion of
southeast Texas is at stake, and the plaintiff wants the taxpayers to subsidize its relocation of
its pipelines so the plaintiff can profitably transmit natural gas. Not only is such a position not
good law, it is not good sense.7
The court denied UTTCO's summary judgment motion, granted those of the Drainage District and
Corps, and ordered removal of UTTCO's pipelines. UTTCO timely appealed. We are advised that
during the pendency of this appeal, both of UTTCO's pipelines were removed from the bayou and
were not re-installed.8
II
ANALYSIS
As all must know by now, we review the record o n appeal from a district court's grant of
summary judgment "under the same standards which guided the district court."9 The standards we
6
Id. (quoting and discussing United States v. 597.75 Acres of Land, 241 F.Supp. 796, 799
(W.D.La.1965)).
7
772 F.Supp. at 955.
8
A letter filed jointly by the parties on June 10, 1993, at our request, confirms our
understanding that the removal of UTTCO's pipelines was completed by July 1992, before
argument was heard on this appeal, but after the parties' briefs were filed with this court.
9
Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.1988).
apply are set out in the Supreme Court trilogy of Anderson v. Liberty Lobby, Inc.,10 Celotex Corp.
v. Catrett,11 and Matsushita Electric Industrial Co. v. Zenith Radio Corp.12 In our review of this
case, we consider two issues of law: whether UTTCO could have been forced to absorb the entire
cost of relocating its pipelines if it had done so; and whether the Corps abused its discretion in
revoking UTTCO's § 10 permits after UTTCO refused to relocate sections of its pipelines as ordered
by the Corps.
A. Responsibility for Relocation Costs
1. Types of Relocation Orders and Responsibility for Costs
There are essentially four factual situations that could be encountered when the Corps orders
relocation of pipelines running under a navigable stream pursuant to a § 10 permit. The orders could
require relocation of pipelines (1) wholly within the original banks of the stream; (2) wholly outside
the original stream banks (e.g., when a stream is widened but not deepened, or at least not enough
to require relocation of the portion of the pipeline lying beneath the original stream bed); (3) almost
entirely inside the original stream banks but with some incidental involvement of relatively
insignificant portions of the pipeline or related facilities located outside the original boundaries; or
(4) both inside and outside the original stream banks, with substantial work in each area.13
Under our interpretation of the permit language, the correlative rights and obligations of the
permit holder and the Corps differ significantly, depending on which type of relocation situation is
implicated in the particular order. As the question whether the Corps properly revoked UTTCO's
permits is dependent on the specific rights and duties that appertain under the type of relocation that
is encountered in the instant § 10 orders, we shall first elaborate seriatim on the particular rights and
10
477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
11
477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
12
475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
13
For reasons explained below, a fifth possible way that the Corps could order relocation of a
pipeline—a relocation outside of the original banks of the stream that would have an incidental
effect inside the original banks—will be grouped with the fourth possibility for purposes of this
analysis.
duties that flow from each of the four possible types of relocation.
a) Wholly within the Original Banks of the Bayou
As noted above, one of the aspects of this litigation which is not disputed is that
permit-holders must pay for the movement of any portion of a pipeline that is located within the
original permit area. The cases relied on by UTTCO in its brief to this court and its representations
at oral argument confirm acknowledgement of this proposition. Solely for the sake of clarity and
perspective, then, we reiterate the truism that the pipeline owner must bear the cost of relocation
work within the original permit area, i.e., the boundaries of the bayou existing when the § 10 permits
were granted.
In Tenneco, Inc. v. Greater LaFourche Port Commission,14 on which UTTCO principally
relies, we stated:
Tenneco agrees that it is financially responsible for pipeline alterations necessary to
accommodate changes in the channel that are made within the right of way purchased from
the State—that is, changes within the bayou's original boundaries. Tenneco objects to paying
for those changes occasioned by the channel's encroachment onto [the abutti ng owner's]
property and onto Tenneco's easement there.15
UTTCO attempts to align itself with Tenneco. In discussing Tenneco and United States v. 597.75
Acres of Land16 in its brief to this court, UTTCO states that "when a pipeline owner is compelled to
relocate a portion of its pipeline within the permitted area (i.e., the portion lying between the banks
of the waterway at the time of permit issuance) pursuant to a permit condition, then any relocation
of portions of the pipelines lying outside the permitted area cannot be the subject of a claim for
compensation when the latter is merely incidental to the required relocation within the Bayou." If
nothing else, then, UTTCO agrees with the principle that the pipeline owners must pay for alterations
to portions of the pipelines within the bayou's channel as it existed when the § 10 permits were
granted; UTTCO simply insists that all alterations necessitated by the instant relocation orders were
to portions of the pipelines located outside the original boundaries of the bayou, and therefore must
14
427 F.2d 1061 (5th Cir.1970).
15
Id. at 1064.
16
241 F.Supp. 796 (W.D.La.1965).
be paid for by the Drainage District—or at least not by UTTCO.17
The pipeline owner's responsibility for all costs of relocation inside the permit area derives
from the language of ¶ (f ) of the permits. That paragraph states that "if future operations of the
United States require alteration in the position of the structure or work herein authorized, ... the
owner will be required to remove or alter the structural work or obstructions caused thereby without
expense to the United States."18 This permit language clearly gives the Corps19 the authority to order
the relocation of the pipelines inside the boundaries of the original permit area at the expense of the
pipeline owners. As stated before, this is not in dispute; only relocations in the areas outside of the
original banks of the bayou—the abutting lands through which the pipeline owner had acquired
private easements—is disputed in the instant case. As noted, UTTCO insists that no relocation was
required between the banks of the bayou as they existed at the times the permits were issued.20
b) Wholly outside the Original Banks of the Bayou
The Corps and the Drainage District argue that, pursuant to the Corps' authority under the
§ 10 permits, it may order the relocation of pipelines in areas outside the original boundaries of the
bayou as well as the area within those boundaries, i.e., between the original banks; and that these
17
This point was made by UTTCO even more explicitly in its response to the Corps and the
Drainage District's motions for summary judgment. UTTCO argued:
Further, UTTCO never refused to relocate the pipelines without expense to
the United States. Though [sic] not required to do so by the permit itself, UTTCO
in fact expressly agreed to relocate portions of its pipelines within the Bayou that
needed to be relocated (if any) at its own expense. UTTCO also agreed to relocate
even the portions of the pipelines lying outside the Corps' jurisdiction in privately
owned fastlands at no cost to the federal government, provided that the Drainage
District provide assurance that it would [pay for the relocations].
(Footnote omitted).
18
(Emphasis added).
19
At oral argument, counsel for UTTCO argued that this flood control project is local and thus
is not a "future operation[ ] of the United States." We disagree. This project was primarily for
the benefit of the citizens of the area, but certainly there is flood control benefit beyond the
immediate region of the Hillebrandt Bayou. That this project is a "future operation of the United
States" is evidenced by its authorization by act of Congress, substantial funding coming from the
federal government, and the work of the Corps on the project.
20
But see section II.A.2., infra.
relocations too must be made without cost to the government. We do not agree. The clear language
of the permits that the Corps issued to UTTCO's predecessor limits the permit's coverage to the
"work herein authorized"—i.e., the work authorized by the permits within the original bounds of the
bayou. Thus, the language of the permits literally limits the Corps' authority to impose the costs of
relocation on the holder of the permits to those costs properly allocated to relocation work in the area
between the banks of the bayou as they existed at the time the permits were granted.
In the alternative the Corps and the Drainage District argue that the costs of relocation work
outside the original banks can properly be assessed to permit holders under the "navigational
servitude" possessed by the government. In their briefs to this court both the Corps and the Drainage
District cite several cases that discuss the expansive powers of the federal government under the
navigational servitude.21 In addition, the parties argue at length about whether "navigation" per se
is a requisite to invoking that servitude, and whether the work involved in this project is properly
viewed as implicating "navigation."
The "navigational servitude" is an aspect of the sovereignty of the United States, "grounded
in the power of the Federal Government to regulate commerce,"22 entitling the government to exert
a dominant servitude in all lands below the ordinary high water mark of navigable streams.23 As noted
in Coastal Petroleum Co. v. United States, "[t]his navigat ion servitude is an extremely old
concept—owners of property or property rights within navigable waters take those rights fully
cognizant of their limited nature."24 One facet of the situation at issue in this case—that concerning
portions of pipelines situated outside the original river banks—is by definition not within navigable
21
See United States v. Alaska, --- U.S. ----, 112 S.Ct. 1606, 118 L.Ed.2d 222 (1992); United
States v. Cherokee Nation of Okla., 480 U.S. 700, 707, 107 S.Ct. 1487, 1491, 94 L.Ed.2d 704
(1987); United States v. Twin City Power Co., 350 U.S. 222, 224, 76 S.Ct. 259, 260, 100 L.Ed.
240 (1955); Lambert Gravel Co. v. J.A. Jones Constr. Co., 835 F.2d 1105, 1110 (5th Cir.1988).
22
Lambert Gravel, 835 F.2d at 1110 (quoting Coastal Petroleum Co. v. United States, 524
F.2d 1206, 1210, 207 Ct.Cl. 701 (1975)).
23
See Cherokee Nation of Okla., 480 U.S. at 704, 107 S.Ct. at 1489.
24
524 F.2d 1206, 1209, 207 Ct.Cl. 701 (5th Cir.1975) (emphasis added) (citing United States
v. Kansas City Life Ins. Co., 339 U.S. 799, 808, 70 S.Ct. 885, 890, 94 L.Ed. 1277 (1950), and
Gibson v. United States, 166 U.S. 269, 17 S.Ct. 578, 41 L.Ed. 996 (1897)).
waters and thus cannot be subject to the servitude. We find the question whether the project involved
navigation to be irrelevant to our consideration. Even if we were to find the navigational servitude
applicable, the Corps would still not here be authorized to assert the servitude outside the original
banks of the bayou and therefore cannot order UTTCO to bear the expense of relocating those
portions of the pipelines not located between the original banks of the bayou.
UTTCO held easements on the private lands (the "fastlands," i.e., those lands that are
contiguous to but outside the original banks of the bayou) under the surface of which the pipelines
passed. The instant project involved both (1) deepening the original permit channel, thereby affecting
that section of pipelines lying in that portion of the bed of the bayou situated between the original
banks, and (2) widening the bayou, thereby affecting substantial portions of the pipelines lying outside
and on either side of the original banks. The proposition that the navigat ional servitude extends
beyond the original banks of the stream (outside the navigable waters of the United States) is
insupportable—as is the "bootstrap" proposition that the very act of widening the bayou brings
"within navigable waters" the land previously lying outside the original banks but affected by the
widening, thereby making it subject to the servitude retroactively.
The land outside the banks was not taken by exercise of the navigational servitude so that the
bayou could be widened (for it could not have been), but was purchased from the landowners. In
fact, title to that land was acquired subject to UTTCO's own pipeline easements! There is no merit
to the Corps' argument that it can simply take private property rights (here, UTTCO's easements
across private riparian property) that are not subject to a navigational servitude without compensating
the owner for the property right thus taken. Yet that would be the precise result if we were to allow
the Corps to obliterate UTTCO's easements on the fastlands by (1) acquiring those lands from private
owners, (2) widening the bayou to encompass those lands, and (3) applying the navigational servitude
thereto retroactively for purposes of forcing owners of pre-existing easements, such as UTTCO, to
relocate their pipelines and other facilities at those owners' cost.
Unlike its non-property right in the permits to cross the bayou, UTTCO's easements in private
property contiguous to the bayou but outside the banks do constitute property rights. Here, UTTCO
does not contest the Corps' ability to order the relocation of portions of the pipelines that are situated
in the fastlands and must be moved to accommodate the widening of the bayou; UTTCO (like any
farmer whose property is burdened by UTTCO's easement and lies in the way of the widening project)
simply asks for compensation for the costs it will incur in relocating its pipelines within the affected
areas.
c) Relocation Outside the Banks that is Incidental to Relocation Inside the Banks
As we have observed, no one seriously contests the rule that the cost of relocating the portion
of a pipelines lying between the original banks of the bayou (i.e., the work that was either "herein
authorized" under ¶ (f ) of the permits or covered by the navigational servitude) must be borne by the
pipeline owner. On the other hand, when the project requires the relocation of portions of the
pipelines lying not between the original banks but in easements in the fastlands, the relocation costs
generally must be borne by the appropriating governmental unit. We say generally, however, because
there is one recognized exception: When the permit holder is required to relocate its facilities
between the original banks of the waterway at no cost to the government, the permit holder will also
be responsible for those costs incurred for work outside the original banks when such work is only
incidental to the alterations required to be made between the original banks.
In 597.75 Acres,25 the district court stated that "a reasonable interpretation [of the permits]
would also require that such incidental work on adjoining lands as is necessary to accomplish [the
relocation within the waterway's banks] be effected at [the permit holders'] expense."26 In Tenneco,
we elaborated on this point, stating that incidental alterations include "changes the pipeline company
must make "necessary to accomplish [the] purpose' of relocation within the riverbed."27 We continue
to recognize this exception, first discussed in 597.75 Acres and reiterated in Tenneco. In other
words, when a project requires relocation work to be done principally within the original boundaries
of the stream (the work "herein authorized" by the permits or within the bounds of the pre-existing
25
241 F.Supp. 796.
26
Id. at 799.
27
427 F.2d at 1066 (quoting 597.75 Acres, 241 F.Supp. at 799).
navigational servitude) but some incidental work must be done in adjacent areas outside the banks
as well (as a consequence of the work required inside the banks), the permit holders will be
responsible for the entire cost of relocation of the pipelines.
d) Substantial Relocation Both Inside and Outside the Permitted Area
The final situation that might be involved when the Corps orders relocation is that in which
the permit holder might be required to make substantial relocations of portions of the pipelines both
within and without the original banks of the stream. We today hold that when the scope of the
government project requires substantial work (as distinguished from incidental work), not only within
the original banks but outside as well, the sponsoring governmental agency or subdivision shall be
responsible for all reasonable costs incurred by the permit holder in relocating those portions of its
facilities situated outside the original permit boundaries, i.e., outside the original stream banks. Of
course, the permit holder will remain responsible for the costs attributable to the relocation work
within the permit area.
This result flows naturally from the reasoning set forth in the foregoing analysis of the first
three types of relocation orders. In fact, it is the corollary implicit in the "incident of work" rule of
Tenneco and 597.75. On one end of the spectrum, the language of ¶ (f ) of the § 10 permits clearly
allows the Corps to force the pipeline owner to bear the cost of relocations inside the original
riverbanks. On the other end, the government is clearly obliged to pay the expense of subst antial
relocations wholly outside the original banks. Obviously, each such case will require a factual
determination concerning what portion of the relocation costs pertains to the work within the original
permit area and what portion pertains to the work outside that area, for the expenses shall be borne
accordingly. Only when essentially all relocation work is between the banks of the stream will the
permit holder be responsible for costs attributable to outside work, and then only for that which is
truly incidental to the bulk of the project, i.e., that within the banks. We caution, however, that no
such "incidental" exception exists for the obverse situation in which the relocation order requires
work on facilities situated almost wholly outside the stream banks. In such situations the permit
holder remains responsible for costs attributable to any work between the stream banks, no matter
how incidental, given the permit's language.
2. The Type of Relocation Situation Involved Here
At oral argument to this court, counsel for UTTCO represented several times that all of the
alterations to the pipelines involved in the instant case were to occur outside of the original permit
area; that no portions of the pipelines lying within the banks of the bayou would be affected.28 After
a thorough review of the record, however, we find that assertion contradicted by (1) the evidence
presented to the district court at the summary judgment hearing, (2) the findings made by the district
court, and most importantly, (3) the findings of and evidence considered by the Corps in its
proceedings for administrative revocation of the permits. Apparent from all of that—and contrary
to UTTCO's assertions—are the conclusions that some portions of the required relocation work
would necessarily involve segments of the pipelines situated under the bed of the bayou as it existed
at the times the permits were granted, i.e., inside the original permit area, and that such work would
be substantial, not merely incidental. The same is true of relocation work outside the original permit
area. Thus, the type of relocation ordered is that described in subsection d) above: substantial
relocation both inside and outside the permitted area. It follows inescapably, then, that UTTCO
would have been responsible for all costs and expenses allocable to work inside the original banks of
the bayou, but would have been entitled to reimbursement from the Corps or the Drainage
District—or both—for the costs and expenses allocable to relocation work outside the permit area.
From the underdeveloped summary judgment record, however, it appears that UTTCO never
attempted to show precisely how much of the pipelines involved in the instant case lay within the
original permit boundaries and how much lay outside those boundaries. Even less determinable at
this juncture is just what fraction of the total relocation cost that UTTCO would have incurred if it
had obeyed the relocation order of the Corps would have been allocable to the inside work and what
fraction would have been allocable to the outside work.
28
This has been UTTCO's contention throughout this litigation. For example, the footnote we
omitted from UTTCO's response to the Corps' and the Drainage District's motion for summary
judgment, see supra note 17, asserts: "In point of fact, no such relocation [inside the original
banks] was ever required."
B. The Revocation of UTTCO's Permits
In reviewing the Corps' revocation of UTTCO's permits, we must ask whether the Corps
"acted in an arbitrary and capricious fashion, abused its discretion or otherwise acted not in
accordance with law."29 This inquiry in turn requires a review of the findings of the Corps and the
record made by that agency. "If the agency decision cannot be sustained on the administrative record,
then the case should be remanded to the agency for further consideration."30
The Corps revoked the permits because UTTCO refused to relocate the pipelines without
assurances of compensation from the Corps or the District or both. In its Statement of Findings that
accompanied the revocation orders, the Corps stated:
The permits do not provide that future operations be within the streambed of Hillebrandt
Bayou, or that the owner must be given assurance of compensation on the fastlands. On the
contrary, permit conditions state that the owner will be required to remove or alter the
structural work for future operations without expense to the United States.
Clear from the first part of this finding is the premise that if the facts revealed that some portions of
the pipelines were within the permit area and those portions required relocation, the Corps would
have the right to order such relocation at UTTCO's expense. It follows that if UTTCO then refused
to comply with the Corps' relocation order, the Corps could not be found to have abused its
discretion by revoking the permits.
Our inquiry thus must begin with the fact question whether the Corps had substantial evidence
to determine that some of the required relocation work would necessarily occur within the original
boundaries of the bayou. At oral argument, counsel for UTTCO asserted that the Corps had never
made a finding that any of the alterations would have to be made inside t he original banks of the
bayou. In its findings, however, the Corps stated:
The project specifications set out in the enclosure 25 are in accordance with the Corps'
regulation ... which requires pipelines to be at least five (5) feet below the bed of the
waterway. Both of UTTCO's pipelines fall within this safety zone. Encl. 25. Thus, the
Secretary of the Army has the authority to seek removal or alterat ion of the pipelines in
29
See Bowles v. United States Army Corps of Eng'rs, 841 F.2d 112, 116 (5th Cir.1988) (citing
5 U.S.C. § 706(2)(A)).
30
Id. (citing Camp v. Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106
(1973)).
accordance with condition (f ).31
Enclosure 25 of the findings includes two plats of the pipelines. Those diagrams clearly demonstrate
that a significant part of the pipeline relocation would occur within the original permit area.
In addition to the statement quoted above, we have located several other places in the findings
of the Corps at which the fact is recognized, at least implicitly, that some of the required relocation
work would be within the bayou's original boundaries.32 Interestingly, the Corps' findings often quote
correspondence from UTTCO in which it asserted a willingness to pay for alterations that it
recognized needed to be made inside the original permit area.
Coupled with the clear fact that portions of the subject pipelines lay within the original banks
of the stream bed (so that UTTCO's refusal to relocate those sections of the pipelines in compliance
with the Corps order would justify revocation of the permits), is the undeniable (and undenied)
proposition that the Corps has the absolute authority to order relocations in the fastlands too. This
flood control project was authorized by Congress, and the Corps had the unquestionable authority
to determine the specifications—including the new placement of UTTCO's pipelines—for
implementation of the project. As noted above,33 UTTCO has never questioned the Corps' authority
to order relocation in the fastlands; instead, UTTCO has merely denied any obligation to pay for the
relocations in those areas which, it asserted at different points in the litigation, comprised the entire
relocations.
The inescapable picture that emerges is that UTTCO thus engaged in the strong-arm tactic
of refusing to relocate its pipelines in the face of the clear authority of the Corps to order the
relocation. UTTCO opted to play an unwarranted game of hardball when, without any legal right to
31
(Emphasis added).
32
For example, discussing a letter UTTCO sent to the Corps in August 1988, the Corps noted
in its findings that "UTTCO further stated that almost all of such costs arise from the proposed
widening of the Hillebrandt Bayou, and that only a small portion of the area from which UTTCO
was advised to relocate is within the boundaries of the Bayou, and then only as an incident to the
widening of the Bayou." At another point in the Corps' findings, it discussed UTTCO's assertion
that a partial relocation of the pipelines, of the portions of pipeline within the original boundaries,
would be senseless.
33
See supra note 17.
do so, it demanded that the Drainage District assure reimbursement for the entire relocation
costs—an allocation of costs that could never be correct in view of the fact that portions of the
pipelines unquestionably were within the original stream bed. On the other hand, the Corps and the
Drainage District were playing some hardball of their own: they were demanding that UTTCO bear
the entire cost of relocating the pipelines even though substantial portions of the pipelines that had
to be relocated lay in the fastlands, where UTTCO was not responsible for the cost of relocations.
If UTTCO had only complied with the Corps' order (even under formal protest), relocated
the pipelines, and sued for compensation for the portions of its private easements that were taken and
for the costs associated with the relocation in the fastlands, then under the reasoning set out above,
UTTCO clearly would have been entitled to recover. UTTCO did not, however, follow this course.
Instead, UTTCO delayed the project by demanding assurances of full compensation—to which it was
not entitled—before it would begin work on the relocation. As it turns out, UTTCO's recalcitrance
constitutes a valid cause for the Corps to revoke the § 10 permits. As UTTCO never challenged the
Corps' authority to order the relocation, but nevertheless refused absolutely to relocate the pipelines,
we cannot say that the Corps abused its discretion by revoking UTTCO's permits.
There is no provision of federal law to which UTTCO can point that would sanction the type
of self help in which it engaged in this case. We have no choice, therefore, but to recognize that the
Corps held the stronger hand (which it played with aplomb) and to affirm the district court's decision.
III
CONCLUSION
UTTCO does not—because it cannot—challenge the authority of the Corps to order
relocation of UTTCO's pipelines to accommodate the subject drainage project. For the reasons set
forth above, we have concluded that UTTCO was without legal justification in refusing to relocate
its pipelines in response to those orders of the Corps. Thus the Corps did not abuse its discretion in
revoking UTTCO's § 10 permits.
As a consequence of those permit revocations, UTTCO lost the option to relocate its
pipelines, leaving itself no alternative but to remove those portions, both within and without the
original permit areas, that needed to be moved so that construction of the project could proceed.
And, whether in recognition of the valid revocation of the § 10 permits by the Corps, or in
compliance with the district court's judgment that is here being appealed, or for some other reason
or reasons that are not apparent to us, UTTCO did in fact remove its pipelines from the bed of the
bayou and from the fastlands.
Had UTTCO timely relocated its pipelines pursuant to the orders of the Corps, thereby
preventing revocation of the § 10 permits that had allowed the pipelines to cross the bayou in the first
place, UTTCO might have been successful in recovering, through the instant litigation, the costs
incurred in relocating those portions of the pipelines that were situated outside the original stream
bed—costs that clearly would not have been merely incidental to relocating the portions of the
pipelines situated inside the original stream bed. But unfortunately for UTTCO, that was not the
course of action it pursued; so we must affirm the judgment of the district court. In so doing, we
do not speculate on any other remedies that UTTCO may even now retain against the Corps or the
Drainage District.
AFFIRMED.