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Coastal Use Permitting: Flood Protection Project vs. Potential Mitigation Bank

S. Beaux Jones -  Posted on by Baldwin, Haspel, Burke & Mayer

Living and working in coastal Louisiana requires a constant balancing act between mitigation, adaptation and structural protection. This balance has been put on center stage by a recent coastal use permitting process and judicial review that has pitted a landowner seeking to create a mitigation bank against a local levee district seeking to permit a flood control structure.

In a recent unreported decision, the Louisiana First Circuit Court of Appeal affirmed a district court decision upholding the Department of Natural Resources’ (DNR) decision to grant a Coastal Use Permit (CUP) to the St. Mary Levee District for the construction of a flood gate. Such permits may only be issued by DNR if the proposed use conforms to the Coastal Use Guidelines (found in LAC Title 43, Part I, Chapter 7, Subpart B, §701-719) and after an appropriate balancing of social, environmental, and economic factors. To document its full consideration of the permit application, DNR is required to issue a statement explaining its basis for deciding whether to approve or deny the permit, including whether the proposed use complies with the relevant coastal use guidelines. Avoca, Inc. v. State of Louisiana, Department of Natural Resources, 2016-CA-1677, (La. 1 Cir. Sept., 12, 2017).

The CUP in question relates to a proposed flood gate across Bayou Chene, just southeast of Morgan City, LA. This particular structure is intended to make permanent a temporary structure that was constructed on an emergency basis during the 2011 Atchafalaya River Flood. According to local officials, the temporary gate held back 2-3 feet of additional flooding from Morgan City and Amelia at the peak of the 2011 flood. In addition to being of local significance, the Bayou Chene floodgate project has also been included in the State of Louisiana’s Coastal Master Plan.

However, being a component of the Master Plan, which was unanimously approved by the Louisiana Legislature this year, does not guarantee unanimous support for the proposed project. The Bayou Chene project found opposition early in the process from an adjacent landowner, Avoca, Inc., who complained that the project would increase flooding on property that they intend to use, at least in part, to establish a mitigation bank.

The CUP application was submitted in May of 2013 and, after a lengthy administrative review process including multiple hydrodynamic studies, DNR granted the CUP (No. P20130808) in September of 2015. Avoca first filed a petition for reconsideration with the Secretary of DNR, which was denied, and then filed a petition for judicial review in the 16th Judicial District Court in St. Mary Parish.[1] The administrative record, which totaled nearly 6,000 pages, was filed with the district court, a hearing was held, and on July 21, 2016, Judge Paul deMahy affirmed DNR’s issuance of the permit to the levee district.

On appeal, Avoca contended that the court should reverse the permit “because (1) DNR failed to evaluate the effect of pass-through culverts [which were added into the design by the U.S. Fish and Wildlife Service after the CUP application] on the Project, and (2) DNR abused its discretion by reaching conclusions that are unsupported by the record-namely, conclusions regarding the Project’s economic value, the impact of maintenance closures of the floodgate, and a borrow pit’s exemption from the Coastal Use Guidelines analysis.”[2]

The appellate court noted in its decision that under the most recent jurisprudence, it would apply “the arbitrary and capricious test to review the agency’s conclusions and exercises of discretion”…and determine whether the agency action was “taken without reason.”[3] The court also noted that when reviewing a permit under La. R.S. 49:964(G), “a reviewing court should afford considerable weight to an agency’s construction and interpretation of its rules and regulations adopted under a statutory scheme the agency is entrusted to administer.”[4]

Then, applying that considerable weight and deference to the agency’s decision, the court quickly dispensed with both of Avoca’s main arguments. First, Avoca highlighted the fact that pass-through culverts, which were added as a mitigation feature to the project by the federal permitting process after the CUP application, were not explicitly addressed by DNR in its Basis of Decision document. The court found little relevance to the exclusion from DNR’s final decision and stated that:

[a]lthough not explicitly stated in its Basis of Decision Document, DNR also had ample evidence to conclude that the addition of pass-through culverts to the floodgate would not change [their conclusion that the project would not impede water and sediment volume]. Rather, the record clearly shows that DNR was aware of the pass-through culverts before issuing the Permit; and,…DNR decided that the pass-through culverts would not change its Coastal Use Guidelines analysis of the Project….

Next, regarding, Avoca’s argument that DNR abused its discretion in its conclusions of the economic value of the project and the impact of the maintenance and borrow pit, the court again gave a significant amount of deference to the agency. Avoca’s main criticism was of DNR’s conclusion that the project would result in “tens of billions of dollars” of economic benefit for the region and, more specifically, that DNR included no clear calculations or reasoning explaining their conclusion. The court instead focused on the clear evidence of overall benefit (rather than searching for financial models) as shown by the project’s success in combating the 2011 flood and its inclusion in the Coastal Master Plan. However, the court also went further, and effectively shifted the burden stating:

[f]urther, we note that Avoca points to no evidence to refute DNR’s ‘tens of billions of dollars’ estimate. Absent any such evidence and given the record as a whole, we do not find DNR acted ‘without reason in reaching this conclusion. See Ford, 166 So.3d at 337.

The court then applied similar reasoning for the remaining two issues and ultimately found “no reason to reverse or modify [DNR’s] decision-particularly, we find DNR’s factual findings are supported by a preponderance of the evidence, and DNR did not abuse its discretion in applying the Coastal Use Guidelines to determine that issuance of the Permit was warranted.”

Although the First Circuit chose not to report this decision, it nevertheless provides a clear picture of how the court navigates its own decisions involving judicial review and the limits of deference they are willing to extend on agency permit decisions. This case, pitting a possible mitigation bank against a levee district, also provides an intriguing insight into the complex legal and policy issues, which sometimes highlight the unlikely competing interests in coastal Louisiana.

[1] Unlike the majority of judicial review actions against a state agency’s decision, actions under the State and Local Coastal Resources Management Act of 1978, La. R.S. §49:214.21, et seq, (“SLCRMA”) provide for venue in the parish that corresponds with the proposed coastal disturbance.

[2] Avoca Inc. v. State of Louisiana, Department of Natural Resources, No. 2016-CA-1677, slip op. at 4 (La. App. 1 Cir. Sept. 15,2017).

[3] Id. at 5, see also Ford v. State, DHH, 14-1262 (La. App. 1 Cir. 3/6/15), 166 So.3d 332, 336-37, writ denied, 15-0774 (La. 6/1/15), 171 So.3d 264.  

[4] Id., see also Ford at 337; Oakville Community Action Group v. La. Dept. of Env. Quality, 05-1365 (La. App. 1 Cir. 5/5/06), 935 So.2d 175, 186; Calcasieu League for Env. Action Now v. Thompson, 93-1978 (La. App. 1 Cir. 7/14/95), 661 So.2d 143,149, writ denied, 95-2495 (La. 12/15/95), 664 So.2d 459.



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