United States v. San Juan Bay Marina

United States Court of Appeals
For the First Circuit

No. 00-1759
No. 00-1760

UNITED STATES OF AMERICA,

Plaintiff, Appellee,

v.

SAN JUAN BAY MARINA,
SHOOTERS WATERFRONT RESTAURANT,
AND EDUARDO FERRER

Defendants, Appellants.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

[Hon. Carmen Consuelo Cerezo, U.S. District Judge]

Before

Boudin, Stahl and Lynch, Circuit Judges.

Eduardo A. Vera Ramírez, with whom Ramirez Lavandero, Landrón &
Vera, L.L.P. was on brief, for appellant.

Camille Vélez-Rivé, Assistant United States Attorney, with whom
Guillermo Gil, United States Attorney, and Miguel A. Fernández,
Assistant United States Attorney, were on brief, for appellee.

February 21, 2001
 LYNCH, Circuit Judge. The San Juan Bay Marina has a number

of commercial establishments located on piers in San Juan Harbor,

including the Shooters Waterfront Café. Lacking the necessary permits

from the Army Corps of Engineers, the Marina nonetheless built new

piers and structures. These new constructions are located in the San

Antonio Channel, part of the navigable waters of the United States, and

so are subject to the Rivers and Harbors Act, 33 U.S.C. § 403 et seq.

The United States brought an action against the Marina, the restaurant,

and Eduardo Ferrer, the President of both companies, to compel

defendants to remove these structures, in order to restore the

waterways, and for a permanent injunction against future illegal

construction. The district court, on cross motions, entered summary

judgment for the United States and issued the injunctive relief.

On appeal, the Marina primarily points to the fact that it

leases the original piers from an entity of the government of Puerto

Rico, the Puerto Rico Industrial Company ("PRIDCO"), and surrounding

areas from the Puerto Rico Port Authority ("PREPA"). As such, it

argues, the case should have been dismissed because the government of

Puerto Rico was an indispensable party to the case. It also says that

under the lease any "improvements" made to the original property return

to PRIDCO and that the United States cannot proceed with this action

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without ascertaining whether Puerto Rico would like to have these

structures kept. In addition, it argues that the United States is

required to consider the public interest in considering whether to

grant a permit and has not done so. Finally, the Marina says there are

genuine issues of material fact, precluding entry of summary judgment

for the United States.

I.

We describe the facts established by the record. After being

denied an earlier permit application, the Marina applied to the Corps,

in April of 1992, to build an 80 by 40 foot platform adjacent to -- and

to become part of -- the original structure. On May 18, 1992, the

Corps issued a contingent permit, No. 199250101, for the construction.

A contingent permit does not allow construction to start until the

permit conditions are met. The permit was contingent on obtaining

coastal zone certification or waiver from the Puerto Rico Planning

Board and Puerto Rico Environmental Quality Board. Neither a

certification nor a waiver was obtained. Despite this, the defendants

went ahead and built a platform. The platform was roughly 97 by 57

feet, larger than that proposed in the application. The Corps issued

a cease and desist order on July 5, 1995, after it had inspected the

site.

In May of 1992, the Marina had filed for Nationwide Permit

Number 3, to reconstruct an existing pier. This type of permit

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authorizes the reconstruction and rehabilitation of existing

serviceable structures but does not permit deviation from the original

footprint. See 33 C.F.R. § 330 et seq. (nationwide permit program).

The Marina then converted the pier from a wooden structure to a

reinforced concrete structure with additional piles. The problem is

that the pier was also constructed to twice its original size, in

violation of the permit conditions.

The Marina filed, on August 4, 1993, another permit

application, No. 199350118, to construct a 40 by 44 foot expansion to

the contingently authorized 80 by 40 foot platform. The Corps again

issued a contingent permit, conditioned on receiving coastal zone

certification from the Planning Board. On December 29, 1993, the

Commonwealth denied approval. Indeed the Planning Board strongly

objected to the proposed project. In February 1994, the permit was

denied by the Corps. Defendants took no appeal from the permit denial.

Nonetheless, defendants went ahead and constructed an addition of

approximately 40 feet by 57 feet. The net result of the construction

was the emergence of a continuous structure of roughly 137 by 57 feet,

which houses a terrace bar, a swimming pool, a deck, and ticket offices

for a tour boat.

Without any permit application at all defendants also added

another structure, rhomboid in shape, of about 2800 square feet, for a

"sushi bar." Indeed, the construction started after the Corps had

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issued its July 1995 cease and desist order to stop the other

unauthorized work. The defendants also went ahead and built yet

another pier, about 300 feet long by 5 feet wide, without a permit.

The Corps issued an amended cease and desist order in September 1995 to

take account of these later two violations.

On November 30, 1995, defendants filed another permit

application, after the fact, to justify all of the unauthorized

structures. Not surprisingly, the Corps denied the application, saying

it could not accept an after-the-fact permit from someone who had been

denied a permit and who would be subject to legal action. This suit

was then brought.

II.

Our review of the entry of summary judgment is de novo.

Thomas v. Eastman Kodak Co., 183 F.3d 38, 47 (1st Cir. 1999),

cert. denied, 528 U.S. 1161 (2000). We review an award of

injunctive relief ordering removal and restoration for abuse of

discretion. United States v. Cumberland Farms of Conn., Inc., 826 F.2d

1151, 1164 (1st Cir. 1987), cert. denied, 484 U.S. 1061 (1988). A

district court's determination that a party is not an indispensable

party can rest on a determination under either Rule 19(a) or Rule 19(b)

of the Federal Rules of Civil Procedure. We have previously found it

unnecessary to determine whether the appropriate standard of review for

Rule 19(a) decisions as to necessary joinder is de novo or for abuse of

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discretion. See Tell v. Trustees of Dartmouth Coll., 145 F.3d 417,

418-19 (1st Cir. 1998) (noting circuit split). Since the outcome again

would be the same under either standard, we refrain from resolving this

question. See id. at 418 (not resolving issue because not relevant to

outcome). Rule 19(b) determinations as to indispensable parties are

reviewed for abuse of discretion in this circuit. See Travelers Indem.

Co. v. Dingwell, 884 F.2d 629, 635 (1st Cir. 1989).

This case is set in the legal framework of the Rivers and

Harbors Act of 1899, 33 U.S.C. § 401. For more than a century, it has

been the law that no one may place obstructions into the navigable

waters of this country without authorization from the Army Corps of

Engineers. See United States v. Kennebec Log Driving Co., 491 F.2d

562, 565 (1st Cir. 1973); see also United States v. Estate of Luis

Boothby, 16 F.3d 19, 21 (1st Cir. 1994). The term "obstruction" as

used in this Act has a broad sweep. See Sanitary Dist. Co. of Chicago

v. United States, 266 U.S. 405, 429 (1925) (terming the section "a

broad expression of policy in unmistakable terms"), citing United

States v. Rio Grande Dam & Irrigation Co., 174 U.S. 690, 708 (1899)

(giving the concept of obstruction in the predecessor act a broad

sweep; not limiting it to "a prohibition of any obstruction to [ ]

navigation," but instead construing the section to reach "any

obstruction to the navigable capacity, and anything, wherever done or

however done, . . . which tends to destroy the navigable capacity of

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one of the navigable waters of the United States"); see also United

States v. Republic Steel Corp., 362 U.S. 482, 487-88 (1960) (noting

"broad sweep" given to the term). The term has been construed to

include even the deposit of certain refuse and waste materials, which

violators may be ordered to remove. See id. at 485, 491-92 (district

court had authority under the River and Harbor Act to issue injunctive

restorative orders).

The key provision of the Act, for our purposes, is § 403:

The creation of any obstruction not affirmatively authorized
by Congress, to the navigable capacity of any of the waters
of the United States is prohibited; and it shall not be
lawful to build or commence the building of any wharf, pier,
dolphin, boom, weir, breakwater, bulkhead, jetty, or other
structures in any port, roadstead, haven, harbor, canal,
navigable river, or other water of the United Sates, outside
established harbor lines, or where no harbor lines have been
established, except on plans recommended by the Chief of
Engineers and authorized by the Secretary of the Army; and
it shall not be lawful to excavate or fill, or in any manner
to alter or modify the course, location, condition, or
capacity of, any port, roadstead, haven, harbor, canal,
lake, harbor of refuge, or inclosure within the limits of
any breakwater, or of the channel of any navigable water of
the United States, unless the work has been recommended by
the Chief of Engineers and authorized by the Secretary of
the Army prior to beginning the same.

33 U.S.C. § 403. Where navigable coastal waters, such as the San

Antonio channel, are involved, the Corps requires that Coastal Zone

Management Act certification be acquired. See 33 C.F.R. § 320.4(h).

The Coastal Zone Management Act is a federal law administered by the

National Oceanographic and Atmospheric Administration, which, in turn,

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has delegated some authority for administration to the States. See 16

U.S.C. § 1451 et seq. Puerto Rico is considered a state for these

purposes, and administers the Act through the Puerto Rico Planning

Board.

The record is clear that defendants built structures without

necessary permits. Defendants attempt to avoid the removal,

restoration, and cease and desist orders on other grounds. In

opposition to the motion of the United States for summary judgment,

defendants made four arguments: (1) the Government of Puerto Rico was

an indispensable party because it had a vested interest in the property

and owned the premises defendants occupied as tenants; (2) the Corps

should have approved the after-the-fact permit application because it

was in the public interest that the structures be built; (3) that same

public interest meant the plaintiff United States lacked standing to

sue; and (4) the cease and desist order was invalid because it was not

signed by the correct person. Defendants also argued that even if

summary judgment was not entered for the defendants on their cross-

motion for these reasons, then at least summary judgment should be

denied to the United States, because there were material facts in

dispute. Essentially, the same arguments are raised on appeal.

A. Puerto Rico as an Indispensable Party

The question of whether Puerto Rico is an indispensable party

is governed by Rule 19, Fed. R. Civ. P. This is a two part inquiry.

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First, the party must be a necessary party under Rule 19(a),1 Delgado

v. Plaza Las Americas, Inc., 139 F.3d 1, 3 n.2 (1st Cir. 1998), and

then it must be an indispensable party under Rule 19(b).2 For a number

of reasons, we agree with the district court that Puerto Rico, through

1 Rule 19(a) provides:
(a) Persons to be Joined if Feasible. A person who is subject
to service of process and whose joinder will not deprive the court
of jurisdiction over the subject matter of the action shall be
joined as a party in the action if (1) in the person’s absence
complete relief cannot be accorded among those already parties,
or (2) the person claims an interest relating to the subject of
the action and is so situated that the disposition of the action
in the person’s absence may (i) as a practical matter impair or
impede the person’s ability to protect that interest or (ii) leave
any of the persons already parties subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest. If the person has
not been so joined, the court shall order that the person be made
a party. If the person should join as a plaintiff but refuses to
do so, the person may be made a defendant, or, in a proper case,
an involuntary plaintiff. If the joined party objects to venue
and joinder of that party would render the venue of the action
improper, that party shall be dismissed from the action.
2 Rule 19(b) provides:
(b) Determination by Court Whenever Joinder not Feasible. If a
person as described in subdivision (a)(1)-(2) hereof cannot be
made a party, the court shall determine whether in equity and good
conscience the action should proceed among the parties before it,
or should be dismissed, the absent person being thus regarded as
indispensable. The factors to be considered by the court include:
first, to what extent a judgment rendered in the person’s absence
might be prejudicial to the person or those already parties;
second, the extent to which, by protective provisions in the
judgment, by the shaping of relief, or other measures, the
prejudice can be lessened or avoided; third, whether a judgment
rendered in the person’s absence will be adequate; fourth, whether
the plaintiff will have an adequate remedy if the action is
dismissed for nonjoinder.

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PRIDCO, is not a necessary party under Rule 19(a), and so not an

indispensable party under Rule 19(b).

Defendants argue under Rule 19(a) that the Commonwealth of

Puerto Rico has interests such that its absence from the action "may .

. . as a practical matter impair or impede the person’s ability to

express that interest." Fed. R. Civ. P. 19(a). It also argues under

Rule 19(b) that the United States cannot have a complete remedy unless

the Commonwealth is a party. Defendants make the usual Rule 19(b)

argument that the absence of an indispensable party means the action

should be dismissed.

Defendants say that they are mere lessors, and the

Commonwealth is the ultimate owner of the offending structures and so

it must be made a party. This position is contrary to the admission in

the defendants’ answer that the Marina is the "sole owner" of all of

the property in question, and with its position that the Commonwealth

has only a "vested" interest in the so-called improvements. We bypass

this inconsistency in defendants’ position.

The PRIDCO lease with the Marina, in the same clause which

permits PRIDCO to take improvements at the end of the lease, makes the

lessee responsible for obtaining and complying with all applicable

state and federal permits.3 The requirement to get necessary permits

3 Clause Eight of the PRIDCO lease provides, in relevant
part, that if PRIDCO authorizes the lessee to build

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from the Corps is repeated in another clause.4 PRIDCO is authorized to

cancel the lease for non-compliance with these provisions.5 PRIDCO has,

by lease, assigned responsibility for the permitting process and its

consequences to defendants.

Defendants raise a pure issue of law: whether an owner is a

necessary party when a tenant makes "improvements" in property that are

in violation of the Rivers and Harbor Act. At the outset, we are

dubious that the Commonwealth is the present owner of the structures

challenged by the Corps, given the lease conditions. The lease

describes the premises leased and does not purport to give rights to

build on the submerged lands next to the leased piers and premises.

While the leases may grant a reversionary interest to the lessors in

improvements on the leased property, the structures at issue here were

not built on the leased property, but on submerged lands outside the

leased property.

improvements, the "Lessee hereby commits itself to submit
evidence of all those necessary permits," be they state or
federal, required for the construction of the improvements.
4 Clause Sixteen of the lease provides that "Lessee shall
comply with the laws and/or rules, norms, regulations of all
federal and/or state agencies applicable or governing, related
to its operations and in particular . . . [the] U.S. Corps of
Engineers . . .."
5 Clause Fourteen of the lease allows PRIDCO to cancel
the lease for "non-compliance" with any of the provisions or
conditions of the lease.

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 Still, even if we assume that the Commonwealth will have some

ownership interest in the illegally constructed structures at the end

of the lease, that interest is insufficient to render it a "necessary

party" under Rule 19(a). The order here does not as a practical matter

impair or impede the Commonwealth’s ability to protect its interest in

the property it does indisputably own: the original piers and original

structures. The only remaining issue raised by defendants is whether

the court's order would "impede or impair" the Commonwealth's ability

to protect its purported reversionary interest in the illegal

structures upon the termination of the lease. However, a party is

necessary under Rule 19(a) only if they claim a "legally protected

interest" relating to the subject matter of the action. See, e.g.,

Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1043 (9th

Cir. 1983). At present, this reversionary interest is wholly

contingent -- if defendants opted to raze the structures on their own

volition, the Commonwealth would have no legal recourse. That

defendants do so under court order makes no difference. Since the

relief ordered by the district court is complete, and concludes the

controversy without harm to any legally cognizable interest of the

Commonwealth, the Commonwealth is not a necessary party under Rule

19(a).6

6 The defendant does not argue an alternative reason that
the Commonwealth might be considered a necessary party, but we
pause to consider it in light of the court's duty to protect the

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 We add that the Commonwealth, well aware of this situation,

never moved to intervene, and so it is apparently of the view that its

interests either were not at stake or were aligned with those of the

United States. Cf. Fed. R. Civ. P. 19(a)(2) (compulsory joinder

appropriate where the person " claims an interest" relating to the

subject of the action that is threatened by litigation in his absence)

(emphasis added). Since its decision to forgo intervention indicates

that the Commonwealth does not deem its own interests substantially

threatened by the litigation, the court should not second-guess this

interests of absent parties. See, e.g., Provident Tradesmens
Bank & Trust Co. v. Patterson, 390 U.S. 102, 111 (1968) (urging
courts of appeal to raise nonjoinder issues on their own
initiative "to protect the absent party, who of course had no
opportunity to plead and prove his interest below"). The
Commonwealth might have an interest relating to the subject
matter of this action because at some future point, the Corps
could possibly seek to compel the Commonwealth to remove the
offending structures, should the order stand but the defendants
fail to comply with its dictates. We conclude that this
hypothetical possibility is insufficient to render the
Commonwealth a necessary party to this action. The absence of
the Commonwealth in this action would not impair or impede its
ability to protect its interests. See Fed. R. Civ. P.
19(a)(2)(i). Nor would it threaten to leave the present
defendants at risk of incurring multiple or inconsistent
obligations. Cf. Rule 19(a)(2)(ii). In any subsequent action
against the Commonwealth, it would be free to assert all of its
possible defenses, without being impaired by the outcome of the
present case. In these circumstances, and in light of the
Commonwealth's decision not to intervene, we do not find the
Commonwealth to be a necessary party.

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determination, at least absent special circumstances. See, e.g.,

Northrop Corp., 705 F.2d at 1044; United States v. Sabine Shell, Inc.,

674 F.2d 480, 483 (5th Cir. 1982). Thus the requirements of Rule 19(a)

have not been met.

Even if the Rule 19(b) analysis were reached, the

Commonwealth, through PRIDCO, would not be an indispensable party. See

Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118-

25 (1968) (finding that the mere fact that absent parties' interests

may be affected does not automatically render that party indispensable

within the meaning of Rule 19(b)). At present, there is no reason to

think that any judgment against defendants would prove to be

inadequate. Further, even were the Commonwealth a necessary party and

an indispensable party, as it is not, the Commonwealth could just be

joined in the action,7 and so there would be no reason to dismiss for

lack of an indispensable party.8

7 The district court misspoke when it gave as a reason for
finding Puerto Rico was not a necessary party that the Commonwealth
could not be sued in federal court by the United States. That is not
so. See, e.g., United States v. Alaska, 503 U.S. 569 (1992) (holding
state responsible under Rivers and Harbors Act); United States v.
Mississippi, 380 U.S. 128, 140-41 (1965).
8 On appeal, defendants have moved to supplement the record and
to remand to the district court, flourishing a letter purportedly from
a Deputy Executive Director of the Puerto Rico Industrial Development
Company. That letter asserts that this agency has an interest in
keeping two of the offending structures. We order the letter be
stricken and deny the motion. Even assuming dubitante that this letter
is an authorized expression of interest on the part of the Commonwealth
in the retention of structures erected in violation of both federal and

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B. The Public Interest Standard

Defendants make a two-pronged argument regarding public

interest, as best we understand it. The first is that it is in the

public interest that the permits be issued, and the second is that,

because this is so, the United States does not have standing to pursue

this enforcement action.

The most benign thing that can be said for these arguments

is that they are inventive. First, at the time, defendants did not

seek review of the denial of the permits under the Adminstrative

Procedure Act, 5 U.S.C. § 701 et seq., the proper avenue for such a

"public interest" challenge to an agency action. They are foreclosed

from collaterally attacking the denial of the permits in this

enforcement proceeding. Moreover, under the APA, such agency

judgements would be entitled to considerable deference, and the court

shall not substitute its judgment for that of the agency. See Citizens

to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971)

(abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 105

Puerto Rico law, that expression of interest is too little, too late.
Throughout the district court proceedings, the Commonwealth of Puerto
Rico, which clearly knew of the dispute, never sought to intervene.
Courts do not initially decide permit applications and this belated
effort to introduce evidence is improper. See In re Colonial Mortgage
Bankers Corp., 186 F.3d 46, 50 (1st Cir. 1999) (new evidence proffered
that was not properly before the trier of fact cannot be considered on
appeal), cert. denied, 528 U.S. 1139 (2000).

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(1977)); Trafalgar Capital Assocs., Inc. v. Cuomo, 159 F.3d 21, 26 (1st

Cir. 1998), cert. denied, 527 U.S. 1035 (1999).

There would be no significant reason to question the agency's

judgment here in any case. The Corps is charged with the protection of

the "navigable capacity" of U.S. waters, such as the San Antonio

Channel of the San Juan Bay, and must consider a wide array of

interests in the protection of these environmental resources. The

denial of the initial permits applied for was based on the

Commonwealth’s refusal to grant coastal zone management certification;

accordingly, the position of the United States can hardly be said to be

against the public interest. In addition, the law requires the denial

of the after-the-fact attempts to get permission for structures as to

which permits were denied or as to which legal action has been

determined to be appropriate. 33 C.F.R. § 326.3(e); see also

Cumberland Farms, 826 F.2d at 1163 (Corps acted well within its

authority under 33 C.F.R. § 326.4(c)(4) in denying after-the-fact

application). As to the structures built without even an application

for a permit, whatever the merits of a hypothetical application that

was never made, it is contrary to the public interest to permit the

building of structures in navigable waters without any permit

application having been submitted.

Finally, the lack of standing argument is incomprehensible.

Congress charged the Corps with considering permit applications from

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those wanting to put structures into navigable waters. Defendants here

either were denied permits or did not bother to apply for them. The

United States plainly has standing under the statute to enforce cease

and desist orders and to seek the removal of structures built in

violation of law. See 33 U.S.C. § 406; Cumberland Farms, 826 F.2d at

1163.

C. Summary Judgment: Material Facts

The Marina argues that there are material facts in dispute

that preclude entry of summary judgment. In particular it says that

there are disputes of fact as to the measurements of the structures at

issue. It also argues that "there are genuine controversies regarding

the permit application process . . . that some or all of the structures

did not require the issuance of individual permits and/or were

authorized by plaintiff." We disagree. The record is quite clear that

defendants willfully violated the law. Further, these sort of

overbroad arguments, unsupported by specifics, amount to a waiver of

the issue. Finally, defendants say they would like to do some

discovery which might lead to admissible evidence. But no Rule 56(f)

affidavit was filed, perhaps because it could not have been filed in

good faith, and so defendants are foreclosed.

D. Improper Signature

The final argument is that the cease and desist order may not

be enforced because the wrong person signed the orders. The initial

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cease and desist order was signed by a Mr. Muñiz for the District

Engineer. This order was later amended by a second order, which was

signed by the Deputy District Engineer of the Corps. The defendants

contest Mr. Muñiz's authority to sign the order, relying on the

language of 33 C.F.R. § 326.3(c), which provides:

Once the district engineer has determined that a violation
exists, he should take appropriate steps to notify the
responsible parties . . . . [T]he district engineer’s
notification should be in the form of a cease and desist
order prohibiting any further work pending resolution of the
violation . . ..

The argument is utterly meritless. As the district court noted, the

District Engineer is authorized to delegate his authority. See 33 CFR

§ 325.8(b) ("permit need not be signed by the district engineer in

person but may be signed for and in behalf of him by whomever he

designates"). Upon its review of the record, the district court found

that Mr. Muñiz, as Chief of the Regulatory Field Office, was properly

authorized by established Corps policies to sign cease and desist

orders. If so, the authority was properly delegated. We see no reason

to disturb this finding.

III.

For these reasons we affirm the district court’s entry of

summary judgment for the United States, and its order of enforcement.9

9 The judgment ordered "the defendants to expeditiously and
without further delay remove all referenced structures mentioned in all
six claims." Specifically, the judgment orders require removal of:
1. a contingently authorized 40 by 80 foot platform which was

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In light of the frivolous arguments raised on appeal, we award double

costs against defendants.10

actually built to dimensions of 97 by 57 feet in violation of
Permit No. 199250101;
2. that portion of the pier reconstruction of Nationwide Permit
#3 which exceeds the original dimensions;
3. the platform, with a minimum size of 2,800 square feet built
without the Corps permit after issuance of the Cease and Desist
Order;
4. the 300 by 5 foot pier constructed without a permit and
restore the navigable waters of the United States to their pre-
construction condition; removing all material, wood, concrete,
plastic or construction-related debris in a sound and
environmentally correct manner, said materials to be deposited in
an upland site previously approved by the Corps.
It also permanently enjoined the defendants "from further construction
in navigable waters of the United States without first having obtained
permits from the Corps and after complying with all conditions imposed
by said permits."
10 For assessment of double costs in cases raising
frivolous arguments, see Hawkins v. Rhode Island Lottery Comm'n,
Nos. 00-1398; 00-1660, ___ F.3d ___, slip op. at 3 (1st Cir.
Jan. 31, 2001).

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