Court of Appeals
For the First
UNITED STATES OF AMERICA,
SAN JUAN BAY MARINA,
SHOOTERS WATERFRONT RESTAURANT,
AND EDUARDO FERRER
ON APPEAL FROM THE UNITED
STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO
[Hon. Carmen Consuelo Cerezo,
U.S. District Judge]
Boudin, Stahl and Lynch,
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.
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 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
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 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 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.
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 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.
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 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
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,
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
A. Puerto Rico as an Indispensable
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. 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 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
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
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.
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)
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 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. SeeProvident 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
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 (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 alsoCumberland
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 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
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 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.
For these reasons we affirm the
district court's entry of summary judgment for the United States,
and its order of enforcement.(9) In light of the frivolous arguments
raised on appeal, we award double costs against defendants.(10)
1. Rule 19(a)
(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
2. Rule 19(b)
(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.
3. Clause Eight
of the PRIDCO lease provides, in relevant part, that if PRIDCO
authorizes the lessee to build 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.
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 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.
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,
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 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).
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 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
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).