Fox Bay Partners v. United States Corps of Engineers

Fox Bay Partners (Fox Bay) (plaintiff) sought to construct a 512-slip private recreational for-profit marina on the Fox River near the city of McHenry, Illinois (the marina). The proposed marina included a yacht club, health club, restaurant, and parking facility. The marina was proposed to provide recreational activities, create over 400 jobs, generate over $2 million in real estate and sales-tax revenue, create 1.43 acres of new wetlands, and expand and improve groundwater and river water by improving the city’s municipal sewer and water system. The marina would require 1.13 acres of wetlands to be filled and involve the construction of piers, docks, and boat ramps in navigable waters, which meant Fox Bay was required to obtain a permit from the United States Army Corps of Engineers pursuant to the Clean Water Act (CWA) and the Rivers and Harbors Appropriation Act of 1899 (RHA). Fox Bay submitted its applications to the Chicago District of the United States Army Corps of Engineers (the corps). The corps was required to undertake a public-interest review of the RHA permit application and determine whether the project complied with regulations promulgated by the Environmental Protection Agency (EPA) for the issuance of a discharge permit under the CWA. There was substantial public opposition to the proposal. The corps conducted a cumulative-impacts assessment and determined that there would be physical, chemical, and biological changes based on the increase of sediments resulting from discharges from the number of large powerboats that the marina would introduce and the cumulative adverse impacts that the marina would have in combination with other marinas, boat launches, and private boat docks that had already been permitted. The corps found that although the marina would provide some public benefit, the project was contrary to the public interest because of its potential long-term significant degradation of the aquatic ecosystem and its contribution to severe overcrowding of recreation boats on the Fox River. Fox Bay challenged the corps’ decision and filed a complaint for declaratory and injunctive relief. Fox Bay argued that the corps acted arbitrarily and capriciously by improperly evaluating the marina application by conducting a broad public-interest review of the project and failing to conduct appropriate scientific evaluations.