In a major victory for developers of Playa Vista, the Ninth Circuit Court of Appeal has reinstated an Army Corps of Engineers permit to fill 16 acres of wetlands. The unanimous three-judge appellate panel overturned a district court ruling that the Corps did not adequately consider environmental impacts of the overall project. The Ninth Circuit held that the Corps did not need to complete an environmental impact statement and that the Corps was correct to review only the wetlands portion of the first phase of the project, not the entire development. Playa Vista is a 1,087-acre proposed development just south of Marina del Rey that has been a source of controversy for nearly two decades. It is one of the last large open spaces in west Los Angeles, but much of its marsh area has been degraded by past development and industrial uses. In 1990, Maguire Thomas Partners (which has since sold the project to Playa Capital Co.) applied to the Army Corps for a permit to fill 16 acres of federally delineated wetlands. In exchange, the developer proposed creating a 26-acre freshwater marsh and 25-acre riparian corridor. The wetlands covered a portion of the area needed for the project's first phase, which was to involve 13,000 homes and 5 million square feet of commercial and office space on 600 acres. (Other, larger wetlands at Playa Vista were not part of this permit.) After a great deal of public outcry and extensive negotiation with various federal agencies, the Corps in 1992 issued the permit under §404 of the Clean Water Act, with special conditions. The Corps also approved an environmental assessment and a Finding of No Significant Impact (FONSI). In 1996, Wetlands Action Network sued the Corps for violating the National Environmental Policy Act and the Clean Water Act. Wetlands Action Network lost the Clean Water Act claim but U.S. District Judge Ronald Lew granted summary judgement for the environmentalists on the NEPA claims. Lew found that the Corps had violated NEPA by limiting the scope of its analysis to impacts of activities covered by the permit, rather than considering the whole project. He further ruled that and EIS was necessary because the efficacy of the freshwater wetlands system was in doubt. The Ninth Circuit said that Lew's findings were correct, but that his legal conclusions were erroneous. Wetlands Action Network argued that the Corps should have studied impacts to the entire 600 acres of Phase I because the wetlands fill was interdependent with the rest of Phase I development. The Ninth Circuit, however, demanded a stronger connection. "The linkage that the district court found between the permitted activity and the specific project planned is the type of ‘interdependence' that is found in any situation where a developer seeks to fill a wetland as part of a larger development project," Judge Melvin Brunetti wrote for the court. "If this type of connection alone were sufficient to require a finding that an entire project falls within the purview of the Corps' jurisdiction, the Corps would have jurisdiction over all such projects, including those which the Corps' regulations cite as examples of situations in which the Corps would not have jurisdiction over the whole project." The interdependence in this case was so weak that Phase I construction could begin, and, in fact has begun, without the §404 permit, the court noted. The Ninth Circuit also rejected Wetlands Action Network's argument that the Corps improperly segmented the project by considering Phase I alone and not reviewing the cumulative impacts of the three-phase development. Instead, the court, citing Morongo Band of Mission Indians v. FAA, 161 F3d 569 (9th Cir. 1998), imposed the "independent utility" test. The court then found that the utility of Phase I "does not depend upon the completion of later phases of the project." Therefore, the Corps need not review all three phases at once. As for the environmental assessment, the Ninth Circuit ruled that Judge Lew's decision "appeals to be largely based on a mischaracterization of the evidence found in the administrative record." Lew pointed to letters from the Environmental Protection Agency and the U.S. Fish & Wildlife Service that raised questions about the proposed freshwater marsh, especially its ability to handle runoff and treated wastewater. Other commentators also questioned the marsh's design. But, the Ninth Circuit held that the Corps considered these issues in the EA, so a more extensive EIS was unnecessary. Brunetti wrote: "The fact that the record also contains evidence supporting a different scientific opinion does not render the agency's decision arbitrary and capricious," as Lew had ruled. The Ninth Circuit also held that it was acceptable for the Corps to issue the §404 permit and the FONSI even though all details of the mitigation plan had not been finalized. Special conditions in the permit were extremely detailed, and filling of wetlands could not commence before the Corps finalized the mitigations, the court ruled. Finally, the court held that controversy in the form of opposition to a development is not adequate to force preparation of the EIS. The Cases: Wetlands Action Network v. U.S. Army Corps of Engineers, Nos. 98-56242, 98-56474, 98-56672, 00 C.D.O.S. 6965, 2000 Daily Journal D.A.R. 9287, filed August 21, 2000. The Lawyers: For Wetlands Action Network: David Williams, Public Interest Lawyers Group, (510) 841-0707 For the Corps: John M. Gleason, U.S. Army Corps of Engineers, (213) 452-3946. For Playa Capital Co.: Charles Treat, Latham & Watkins, (213) 485-1234.