Appeal From the United States District Court For the District of New Jersey -- Camden (D.C. Civil No. 85-0906)
Before: Sloviter and Stapleton, Circuit Judges, and Mencer,*fn* District Judge
STAPLETON, Circuit Judge:
This is an appeal from a summary judgment entered by a district court upholding the denial by appellee of a federal assistance grant to appellant. Atlantic City Mun. Utilities v. Regional Administrator, EPA, 616 F. Supp. 722, 725 (D.N.J. 1985). Because we find that the district court lacked jurisdiction, we will reverse with a direction that the case be dismissed.
Appellant, the Atlantic City Municipal Utilities Authority ("ACMUA"), was organized in 1978 to provide water and sewer service service to Atlantic City. In 1980, ACMUA applied to the United States Environmental Protection Agency ("EPA") for a $3,573.750 federal grant to purchase a sewage collection system. The Clean Water Act segment, 33 U.S.C. §§ 1281-1299 (1982), of the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. § 1251, et seq. (1982), authorizes the Administrator of the EPA to make such grants. 33 U.S.C. § 128(g)(1982). ACMUA's intention was to use this grant to purchase a privately-owned sewage collection system that emptied into a publicly-owned sewage treatment facility. The sewage collection system was over a century old and, due to excessive infiltration, had caused an overflow problem at the treatment facility. The result of this problem had been the pollution of near-shore areas in the vicinity of Atlantic City. ACMUA intended to remedy this problem through rehabilitating and improving the system after its purchase.
As part of its application for the EPA grants, ACMUA applied to the New Jersey Department of Environmental Protection ("NJDEP") for certification. Such state certification is a required precondition for the award of federal assistance. 33 U.S.C. § 1284(a)(3) (1982). This state certification can only be granted as the result of a statutorily mandated "planning process" by which the state develops and submits to the EPA annually an inventory and priority ranking of proposed waste treatment projects. 33 U.S.C. § 1313(e)(3)(H) (1982); 40 C.F.R. § 35.2015(e) (1984).*fn1 ACMUA's proposed project was certified by the NJDEP in 1980 and ranked 154th of 231 eligible project on its 1981 "priority list".
In May of 1981, ACMUA was informed of the EPA Regional Administrator's decision not to fund the project. This decision was based on 40 C.F.R. 35.940-3(d)(1980), which established a preference for the funding of construction of new pollution control facilities, as opposed to the acquisition of existing systems. The Regional Administrator explained this preference in the context of ACMUA's application as follows:
When considered apart from any upgrade or expansion, an acquisition of all or part of an existing wastewater treatment system usually provides no water pollution control service additional to those already being provided prior to acquisition. Under this principle, a regional sewer authority's acquisition of a municipally or privately owned system generally is not eligible. (Region's Brief before the Appeals Board, p.4.)
As stated in the Authority's Facility Plan Analysis (Exhibit 10, page 1.1) the primary objective of the Authority's proposed acquisition is to provide the necessary construction to rehabilitate the deteriorated facilities which are a serious public health hazard. The rehabilitation would include the complete replacement of the pumping station and an increase in the presently insufficient capacity of the system. (Region's Brief before the Appeals Board, pp. 1 and 2).
As laudable and as necessary as these objectives may be, their achievement is no justification for the federal funding of the purchase price of the deteriorated collection system itself. Clearly the acquisition of that system will prove no new pollution control benefits within the meaning of EPA's policies and rules set forth in Exhibits 1G and 2G. (Region's Brief before the Appeals Board, p.5).
The Regional Administrator thus distinguished between funding the purchase price of the deteriorating system and funding the improvement of that system, noting that the purchase itself would have no beneficial effect on pollution.
ACMUA appealed from this denial to the EPA's Board of Assistance Appeals. See 44 Fed. Reg. 46,770 (1979). In October of 1982, the Board reversed the decision of the Regional Administrator. It concluded as follows:
We conclude that the State of New Jersey did not have a sufficient number of new construction projects during FY 80 to use all of the available federal grant funds. It was, therefore, possible to fund the Authority's acquisition of the privately owned system without jeopardizing a new project or conflicting with EPA policy.
The Board further concluded that the Regional Administrator should have viewed the purchase and rehabilitation as a single project and that, from this perspective, the grant would enhance water quality. In August of 1983, the Board refused the Regional Administrator's request for reconsideration.
In October of 1984, the Regional Administrator informed NJDEP and ACMUA that the project could only be funded if NJDEP certified the project for the then current 1985 fiscal year. NJDEP did not do so. ACMUA's attorney informed EPA's regional Administrator that ACMUA would file suit after 60 days. See 33 U.S.C. § 1365(b)(1)(A)(1982). In February of 1985, ACMUA brought this action in district court under the "citizen suit" provisions of the Clean Water Act. 33 U.S.C. § 1365(a)(2) (1982). This grant of jurisdiction enables the district court to ear complaints seeking to compel the performance by the EPA Regional Administration had failed to fulfill his nondiscretionary duty to fund the project after the Board found ACMUA "entitled" to funding.*fn2 By way of relief, ACMUA requested the 1981 federal grant assistance in current dollars.
EPA moved to dismiss for want of subject matter jurisdiction and alternatively moved for summary judgment or dismissal for failure to state a claim on which relief could be granted. ACMUA filed a cross-motion for summary judgment. The district court held that, contrary to EPA's contention, it did have subject matter jurisdiction under the "citizen suit" provision of the Clean Water Act. 616 F. Supp. at 733. The district court further held that the EPA Regional Administrator had "properly interpreted" the Clean Water Act when he required recertification by the NJDEP. Id. at 734. This appeal followed the district court's grant of summary judgment to EPA.
The sole basis of jurisdiction relied upon in ACMUA's complaint was 33 U.S.C. § 1365(a)(2), the citizen suit provision of the Clean Water Act. We recently had the opportunity to interpret and apply that provisions in Fairview Township v. E.P.A. 773 F.2d 517 (3d Cir. 1985) which, like this action, arose out of a sewer authority's efforts to secure an EPA grant for sewer improvements. We will follow the "citizen suit" analysis of that case in analyzing ACMUA's claim.
In Fairview, the Northern York Joint Sewer Authority ("Northern York") had applied to the APA for a $14,000,000 grant. It contended in its citizen suit claim that the Administrator had had a nondiscretionary duty to approve or disapprove its grant application within forty-five days of receipt and that the Administrator's failure to do so meant that the application must be "deemed approved." In response, the EPA contended, first, that approval of the grant application would be tantamount to a judgment for money damages, relief not available under the citizen suit ...