City of Wilmington, Delaware v. United States ( 2022 )

In the United States Court of Federal Claims
No. 16-1691C
(Filed: January 26, 2022)
)
CITY OF WILMINGTON, )
DELAWARE, )
)
Plaintiff, )
)
v. )
)
THE UNITED STATES, )
)
Defendant. )
)
Paul T. Nyffeler, Chem Law PLLC, Glen Allen, VA, for Plaintiff. Of counsel were Robert
M. Goff and Rosamaria Tassone, City of Wilmington Law Department, Wilmington, DE.
Ann C. Motto, Commercial Litigation Branch, Civil Division, United States Department
of Justice, Washington, D.C., for Defendant. With her on the briefs were Brian M.
Boynton, Acting Assistant Attorney General, Civil Division, Martin F. Hockey, Jr., Acting
Director, and Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Washington, D.C.
OPINION AND ORDER
SOLOMSON, Judge.
Shakespeare observed more than once that “the rain, it raineth every day.”1 It
may not rain every day in modern-day Wilmington, Delaware (“Wilmington” or the
“City”), but the City charges its property owners monthly stormwater management
fees. This is a case about whether the United States government must pay, pursuant to
the Clean Water Act, ten years of such fees the City assessed the government for five
properties the United States Army Corps of Engineers (“USACE”) owns in Wilmington.
1 William Shakespeare, Twelfth Night, act 5, sc. 1; William Shakespeare, King Lear, act 3, sc. 2.
1
I. BACKGROUND
A. The Clean Water Act’s Federal-Facilities Section — An Overview
The Clean Water Act requires federal property owners to comply with local
water pollution laws. 33 U.S.C. § 1323 (“Federal facilities pollution control”)
(hereinafter the “Federal-Facilities Section”). Specifically, the Federal-Facilities Section
subjects every “department, agency, or instrumentality of . . . the Federal Government”
with “jurisdiction over . . . property” to “all Federal, State, interstate, and local
requirements . . . respecting the control and abatement of water pollution.” Id.§ 1323(a). Thus, federal property owners must “pay[] . . . reasonable service charges”
imposed by local governments to recover costs of stormwater management. Id. The
Clean Water Act, in turn, defines a reasonable service charge as (1) “any reasonable
nondiscriminatory fee, charge, or assessment” that is (2) “based on some fair approximation
of the proportionate contribution of the property or facility to stormwater pollution (in terms
of quantities of pollutants, or volume or rate of stormwater discharge or runoff from the
property or facility)” and (3) is “used to pay or reimburse the costs associated with any
stormwater management program.” Id. § 1323(c)(1)(B) (emphasis added).
Because the meaning and application of the Federal-Facilities Section is central to
the outcome of this case, the Court briefly traces its development.
B. Clean Water Act History
In 1948, Congress passed the Federal Water Pollution Control Act (“FWPCA”),
the Clean Water Act’s initial ancestral legislation. Pub. L. No. 80-845, 62 Stat. 1155(1948); EPA v. California ex rel. State Water Res. Control Bd., 426 U.S. 200, 202 & n.2 (1976).
The law empowered the Surgeon General to create, in tandem with Federal and state
agencies, “comprehensive programs” to reduce water pollution. § 2(a), 62 Stat. at 1155.
The FWCPA, however, spawned a scattered, state-based system of water pollution
control “designed to determine what lakes and streams had become polluted” and
identify who had polluted them. Am. Frozen Food Inst. v. Train, 539 F.2d 107, 115 (D.C.
Cir. 1976). Attempts to unscramble the polluted eggs after the fact proved
“impractical.” Id.Congress tinkered with the law in the following years. For example, Congress
enacted the Water Quality Act of 1965, Pub. L. No. 89-234, 79 Stat. 903, which required
states to implement water quality standards and empowered the then-Department of
Health, Education, and Welfare to promulgate such standards where particular states
failed to do so. Soon afterward, Congress passed the Water Quality Improvement Act
2
of 1970, Pub. L. No. 91-224, 84 Stat. 91, which required federal agencies to comply with
water quality standards.
The first major revision of the FWPCA came with the Federal Water Pollution
Control Act Amendments of 1972, Pub. L. No. 92-500, 86 Stat. 816 (the “1972
Amendments”). Together with the 1972 Amendments, the law is more commonly
known today as the Clean Water Act. See DeKalb Cnty. v. United States, 108 Fed. Cl. 681,
685 (2013) (discussing the 1972 Amendments). Among other changes, the 1972
Amendments addressed the backwards-looking orientation of the FWCPA by directly
restricting the amount of pollutants that could be released into a state’s navigable
waters in the first place. See EPA, 426 U.S. at 204. As a result, polluters had to obtain
National Pollutant Discharge Elimination System (“NPDES”) permits from the EPA or a
state before releasing pollutants into such waters. Id. at 205. States also were required to
establish “total maximum daily loads” (“TMDLs”) for various pollutants allowed to
enter state waters.2 86 Stat. at 848 (“Each State shall establish for the waters
identified . . . the total maximum daily load, for those pollutants which the
Administrator identifies . . . .”).
The 1972 Amendments also created the initial version of the Clean Water Act’s
Federal-Facilities Section, the current version of which is at issue in this litigation. In
1972, that section provided, in relevant part, that Federal agencies and instrumentalities
“engaged in any activity . . . which may result, in the discharge or runoff of pollutants
shall comply with . . . State . . . and local requirements respecting control and abatement
of pollution . . . including the payment of reasonable service charges.” 86 Stat. at 875.
In 1976, the United States Supreme Court’s decision in EPA v. California, 426 U.S.
200 (1976), prompted Congress to further revise the Federal-Facilities Section. The
Supreme Court held that although federal facilities must comply with state water
pollution requirements like non-federal entities, the 1972 Amendments did “not
expressly provide that federal dischargers must obtain state NPDES permits.” Id. at
212. Rather, the Court held that the “requirements” the Clean Water Act imposed on
federal property owners were only “effluent limitations and standards and schedules of
compliance.” Id. at 215.3
2TMDLs “are the maximum amount of a pollutant that a waterbody can assimilate and still
achieve water quality standards.” Plaintiff’s Exhibit (“PX”) 24 at WILM0011513.
3The Supreme Court issued a similar decision, related to the Clean Air Act, the same day the
Court issued EPA v. California. See Hancock v. Train, 426 U.S. 167, 168–69 (1976) (“The specific
question is whether obtaining a permit to operate is among those ‘requirements respecting
control and abatement of air pollution’ with which existing federal facilities must comply under
3
In response, Congress amended the Clean Water Act’s Federal-Facilities Section
again in 1977 to clarify that federal facilities also had to comply with permitting
requirements. Clean Water Act of 1977, Pub. L. No. 95-217, §§ 60–61, 91 Stat. 1566,
1597–98 (the “1977 Amendments”).4 The 1977 Amendments finalized much of the
language of the Federal-Facilities Section as currently codified at 33 U.S.C. § 1323. As
noted above, Congress expressly required, among other things, that federal facilities
“shall be subject to, and comply with, all Federal, State, interstate, and local
requirements, administrative authority, and process and sanctions respecting the
control and abatement of water pollution in the same manner, and to the same extent as
any nongovernmental entity including the payment of reasonable service charges.” 33
U.S.C. § 1323(a). Federal facilities are thus subject:
(A) to any requirement whether substantive or procedural
(including any recordkeeping or reporting requirement, any
requirement respecting permits and any other requirement,
whatsoever), (B) to the exercise of any Federal, State, or local
administrative authority, and (C) to any process and sanction,
whether enforced in Federal, State, or local courts or in any
other manner.
Id.5 As noted above, and following the Supreme Court’s terminology, we refer to that
provision as “Section 1323” or the “Federal-Facilities Section.” See U.S. Dep’t of
Energy v. Ohio, 503 U.S. 607, 614 (1992).
s[ection] 118 of the Clean Air Act.” (quoting 42 U.S.C. § 1857f (1976)). The Court held that the
Clean Air Act, as written at the time, did not “subject[] federal installations to state permit
requirements.” Id. at 198.
4 According to the Senate Report on the 1977 Amendments:
The act has been amended to indicate unequivocally that all Federal
facilities and activities are subject to all of the provisions of State
and local pollution laws. Though this was the intent of the
Congress in passing the 1972 Federal Water Pollution Control Act
Amendments, the Supreme Court, encouraged by Federal agencies,
has misconstrued the original intent.
S. Rep. No. 95-370, at 67 (1977), reprinted in 1977 U.S.C.C.A.N. 4326, 4392.
5Although the Court recognizes that legislative history cannot displace or otherwise add to a
statute’s plain language, Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992), a
contemporaneous Senate Report listed examples of “requirements” as including “requirements
to obtain operating and construction permits, reporting and monitoring requirements, any
4
Finally, in 2011, Congress amended the Clean Water Act to define “reasonable
service charges.” Federal Responsibility to Pay for Stormwater Programs Act of 2011,
Pub. L. No. 111-378, 124 Stat. 4128 (codified at 33 U.S.C. § 1323(c)) (the “2011
Amendments”). The statute now defines “reasonable service charges” as follows:
(c) Reasonable service charges
(1) In general
For the purposes of this chapter, reasonable service charges
described in subsection (a) include any reasonable
nondiscriminatory fee, charge, or assessment that is —
(A) based on some fair approximation of the proportionate
contribution of the property or facility to stormwater
pollution (in terms of quantities of pollutants, or
volume or rate of stormwater discharge or runoff from
the property or facility); and
(B) used to pay or reimburse the costs associated with
any stormwater management program (whether
associated with a separate storm sewer system or a
sewer system that manages a combination of
stormwater and sanitary waste), including the full
range of programmatic and structural costs
attributable to collecting stormwater, reducing
pollutants in stormwater, and reducing the volume
and rate of stormwater discharge, regardless of
whether that reasonable fee, charge, or assessment is
denominated a tax.
33 U.S.C. § 1323(c)(1) (emphasis added).
C. Wilmington’s Stormwater Ordinance: Wilmington Code § 45-53
Wilmington charges the owners of all properties within its corporate boundaries
fees to recover the costs “related to all aspects of storm water management,” including
capital improvements, flooding mitigation, and watershed planning. Wilmington, DE
Code (“Wilmington Code”) § 45-53(d). The City first implemented the program in
January 2007. Joint Exhibit (“JX”) 14 at WILM0000443; ECF No. 81 (Joint Stipulations of
provisions for injunctive relief and such sanctions imposed by a court to enforce such relief, and
the payment of reasonable service charges.” S. Rep. No. 95-370, at 67.
5
Undisputed Fact (“JSUF”)) ¶ 5. The program’s goal is “to enhance surface water quality
by reducing the quantity and rate of stormwater runoff and the amount of pollutants
discharged into the rivers, which occur as a consequence of separate stormwater
discharges, [combined sewer overflows], and wastewater treatment plant discharges.”
JX 14 at WILM0000443. The fees Wilmington assessed the government — and that are
at issue in this case — are based on this local ordinance.
II. PROCEDURAL BACKGROUND
A. The Complaint
Wilmington filed its complaint against the government on December 22, 2016,
seeking to recover “the payment of reasonable service charges” assessed for “the control
and abatement of water pollution” pursuant to the Federal-Facilities Section. ECF No. 1
(“Compl.”) at 1–3. The City filed an amended complaint on April 16, 2021, primarily to
update the amounts for which Wilmington seeks to hold the government responsible.
ECF No. 101 (“Am. Compl.”).
The USACE owns five properties in Wilmington (the “Properties”), and
Wilmington has assessed the USACE stormwater management fees for the Properties
“from January 4, 2011 to present.” Am. Compl. at 5–13. The City alleges that its
stormwater management charges for the Properties are “reasonable service charges
properly payable by the United States in accordance with Congress’[s] waiver of
sovereign immunity under the Clean Water Act, 33 U.S.C. § 1323(a).” Am. Compl. at 4.
Wilmington claims that the government owes the City $2,577,686.82 in principal
charges and $3,360,441.32 in interest for “stormwater fees properly assessed to [the
government’s] property and facilities.” Am. Compl. at 4, 14.
B. Discovery and Summary Judgment Briefing
Earlier in this case, the parties cross-moved for judgment on the pleadings. See
ECF Nos. 15–17, 24–27; see also City of Wilmington v. United States (Wilmington I), 136 Fed.
Cl. 628 (2018) (Williams, J.) (ECF No. 28). Wilmington argued that the government, by
not pursuing Wilmington’s administrative appeal process under Wilmington Code
§ 45-53(d)(7), waived any challenge to the reasonableness of Wilmington’s charges.
Wilmington I, 136 Fed. Cl. at 629–30. On March 14, 2018, Judge Williams denied both
parties’ motions. Id. at 635. Judge Williams rejected Wilmington’s claim for two
primary reasons: (1) Wilmington’s appeal system is permissive, not mandatory; and
(2) requiring the government to exhaust its local administrative remedies would
severely prejudice the government. Id. at 623–33.
6
The undersigned agreed with — and continues to agree with — Judge Williams’
conclusion that the Wilmington Code does not provide that a party waives its right to
defend against an assessment outside of the appeal process; nor, for that matter, does
the Clean Water Act otherwise operate to preclude the government from defending
against the City’s charges in this Court. Wilmington I, 136 Fed. Cl. at 632. Relatedly,
Judge Williams held that the government is not required to “exhaust” the City’s
administrative appeal process before defending itself in this Court against the City’s
claims on the grounds that its assessed charges are unreasonable and, thus, are not
owed pursuant to what is otherwise a money-mandating provision of law. Id. at 632–33
(explaining that when Congress has not explicitly required the exhaustion of a
particular administrative remedy, “sound judicial discretion” governs the application of
the exhaustion doctrine).
Judge Williams reasoned that if Wilmington charged the government
unreasonable fees, and the government did not appeal, an exhaustion requirement
effectively would force the government to pay unreasonable fees, something the Clean
Water Act’s limited sovereign immunity waiver for “reasonable” charges does not
require and, therefore, does not permit. Wilmington I, 136 Fed. Cl. at 633. Put
differently, the Clean Water Act is only money-mandating with respect to “reasonable”
charges and the government necessarily may defend against Wilmington’s claims on
the ground that the charges at issue are not reasonable and thus not owed pursuant to
law.
Finally, the City’s appeal process only permits adjustments to future billing
cycles. Accordingly, even if the government had pursued the City’s appeal process
successfully — and this is an issue Wilmington continues to gloss over — that process
would not have resulted in any change to the previously assessed fees at issue in this
matter. Wilmington I, 136 Fed. Cl. at 632–33 (holding that the City’s appeal process
would not have provided the government with any remedy and that the government’s
true first opportunity to defend itself is in the instant case).
Following the discovery period, see ECF Nos. 30, 42, 54, 56, the parties filed their
pretrial memoranda. ECF Nos. 60, 64.
On January 30, 2020, the United States filed a motion in limine to exclude the
expert testimony of Mr. Hector J. Cyre. ECF No. 68. On January 31, 2020, Wilmington
filed a motion in limine to (1) preclude the government from asserting certain
arguments, (2) exclude the testimony of the government’s expert witness, and
(3) exclude several of its fact witnesses. ECF No. 69. On February 5, 2020, this case was
reassigned to the undersigned judge. ECF Nos. 72, 73. On March 4, 2021, after both
motions in limine were fully briefed, ECF Nos. 77, 78, the Court denied them. City of
7
Wilmington v. United States (Wilmington II), 152 Fed. Cl. 373 (2021) (ECF No. 91). In
Wilmington II, the Court once again rejected the City’s administrative exhaustion
argument that was rehashed from Wilmington I. Wilmington II, 152 Fed. Cl. at 379–80.
On April 2, 2021, less than three weeks before trial was scheduled to begin,
Wilmington filed a motion for reconsideration of Wilmington I and Wilmington II. ECF
No. 95. The Court denied Wilmington’s motion for reconsideration on April 6, 2021.
ECF No. 98.
C. The Trial
On April 19, 2021, trial commenced via videoconference due to health and safety
considerations related to the COVID-19 pandemic. ECF No. 89; ECF No. 93 (Pre-Trial
Order) at 1 n.1. Over two days, Wilmington presented evidence from one fact witness
and one expert witness. The City’s lone fact witness, Ms. Kelly Williams, testified in her
official capacity as the Commissioner of Public Works for the City. See ECF Nos. 104,
105, Transcript of Proceedings (“Tr.”) 40:10–11. She testified, inter alia, as to the origins
of the City’s stormwater charge system, the process by which customers can appeal the
City’s charges, and the extent to which the Properties contribute to the City’s
stormwater pollution. Tr. 39:20–248:3.
The City’s expert witness, Mr. Hector Cyre, president of the engineering firm
Water Resource Associates, testified regarding his professional experience within the
stormwater management industry. Tr. 279:10–282:3. His testimony focused on the
general reasonableness of Wilmington’s stormwater methodology. Tr. 274:15–425:23.
D. The Parties’ RCFC 52(c) Briefing and Evidentiary Motions
On April 20, 2021, following the close of Wilmington’s case-in-chief, the Court
suspended trial to permit the government to file a motion for judgment on partial
findings pursuant to Rule 52(c) of the Rules of the United States Court of Federal Claims
(“RCFC”). Tr. 441:5–444:8; see also ECF No. 102. On May 4, 2021, Wilmington filed a
timely motion to admit portions of the RCFC 30(b)(6) deposition testimony taken from
the government’s witness, Craig Homesley, Chief of the USACE’s Project Support
Branch, as well as Plaintiff’s Exhibits (“PX”) 1, 4, 28, and 43. ECF No. 106. On May 18,
2021, the government filed its response to Wilmington’s evidentiary motion. ECF No.
112. The government did not object to admitting the selected portions of
Mr. Homesley’s deposition, but sought to counter-designate and admit yet other
portions of his deposition for context. Id. at 3–4. The government, however, opposed
admitting Wilmington’s four exhibits into the record. Id. at 5–10.
8
On June 8, 2021, the Court granted Wilmington’s motion to admit portions of
Mr. Homesley’s deposition testimony, in addition to the four exhibits: PX 1, PX 4 (but
not pages numbered COE000077 and COE000080–82), PX 28, and PX 43. City of
Wilmington v. United States, 153 Fed. Cl. 405, 410 (2021) (ECF No. 115). The Court also
granted the government’s request to enter its counter-designated portions of
Mr. Homesley’s deposition testimony into the evidentiary record. Id.On June 21, 2021, the government filed a motion for judgment on partial findings
pursuant to RCFC 52(c). ECF No. 117. On June 22, 2021, the government filed a
corrected motion for judgment on partial findings. ECF No. 119 (“Def. Mot.”). On
August 5, 2021, Wilmington filed a response to the government’s corrected motion for
judgment on partial findings. ECF No. 121 (“Pl. Resp.”). On August 11, 2021, the
government moved for leave to file a reply, ECF No. 122, which the Court granted,
Minute Order (Aug. 11, 2021). On August 13, 2021, the government filed its reply to
Wilmington’s response. ECF No. 123 (“Def. Reply”).
III. FACTUAL FINDINGS6
A. The Properties, Runoff, and Wilmington’s Stormwater Management
System
The USACE’s five Wilmington Properties comprise a dredge material disposal
area that the USACE uses in its work dredging the waterways near the City. JSUF ¶¶ 3,
121; JX 2. The Properties measure nearly 11,888,000 square feet, which translates to
more than 270 acres. JSUF ¶¶ 133, 140, 147, 154, 161.
Some portion of precipitation that falls on the Properties runs off them and
ultimately into the Christina or Delaware Rivers. JSUF ¶ 127; JX 17. Wilmington is
subject to federal pollution requirements, including TMDLs, and runoff can increase the
flow of pollutants into nearby water.7 JX 14 at WILM0000443; JX 34 at WILM0010073–
74. The City maintains a system of infrastructure to “enhance surface water quality by
reducing the quantity and rate of stormwater runoff and the amount of pollutants
discharged into the [nearby] rivers.” JX 14 at WILM0000443; JSUF ¶¶ 6, 11 (describing
the stormwater management program). The system consists of a stormwater collection
6This section constitutes the Court’s principal findings of fact in accordance with RCFC 52(a)
and 52(c). Other findings of fact and rulings on questions of mixed fact and law are contained
in the discussion sections of this opinion, see infra Sections V and VI.
7The Christina Basin, “a 565 square mile basin” which “spans three states, Delaware,
Pennsylvania, and Maryland,” and includes the Christina River, is subject to TMDLs imposed
by the EPA. PX 24 at WILM0011513.
9
and conveyance system and a wastewater treatment facility. JSUF ¶¶ 7, 11. The City’s
system is designed to protect surface water bodies, including the Brandywine River, the
Christina River, and the Delaware River. JSUF ¶ 8; JX 14 at WILM0000443; Tr. 178:21–
25.
The stormwater collection and conveyance system is comprised of a combined
sewer system and a municipal separate storm sewer system. JSUF ¶ 11. In times of
heavy rainfall, stormwater runoff can combine with wastewater in amounts too great
for the combined sewer system pipe capacity. Tr. 179:1–5. This can cause a combined
sewer overflow event, during which wastewater and stormwater both flow into the
rivers, polluting them. Tr. 43:18–44:7.
While stormwater from at least one of the Properties “flows directly into [a
nearby] [r]iver,” it does so “with no use of the City’s sewer system.” JX 17. As a result,
no stormwater from the Properties contributes to combined sewer overflows. JSUF
¶ 15; Tr. 179:6–9. Additionally, stormwater from the Properties does not enter
Wilmington’s combined sewer system or its municipal separate storm sewer system.
JSUF ¶ 14; Tr. 176:21–177:5. In fact, the City is unaware of any pipes on the Properties
that even “connect to [Wilmington’s] stormwater collection and conveyance system.”
Tr. 145:8-13. The Properties also do not use, or burden, the City’s wastewater treatment
plant. Tr. 178:4–20. The City does not know the proportional demand or burden, if any,
that the Properties place on the nearby rivers. Tr. 185:13–187:3. The City does not know
to which TMDLs the Properties contribute, if any. Tr. 189:17–21.
B. Wilmington’s Stormwater Charges: Purpose and Origins
The City imposes a monthly stormwater charge on the owner of each parcel of
land in Wilmington.8 Wilmington Code § 45-53(d). The City hired an engineering firm,
Black & Veatch, to help develop its stormwater charge system, and Wilmington based
its stormwater charge methodology on recommendations from that firm. JSUF ¶ 5.
Wilmington created the stormwater charge to, inter alia, recover costs of operating,
managing, and upgrading stormwater infrastructure, including combined sewer
overflows, and to comply with federal water pollution standards. JX 34 at
WILM0010075–76, WILM0010100–01; Tr. 159:24–160:13.
The stormwater charge provides Wilmington a revenue source with which to
fund the stormwater management system for surface water quality management. JSUF
8The City recently changed its billing cycle from quarterly to monthly. See Wilmington Code
§ 45-53(d) (“All parcels . . . shall be assessed a monthly storm water charge . . . .” (emphasis
added)). Some of the parties’ filings refer to the previous quarterly billing system.
10
¶¶ 17–18. The City maintains revenue from stormwater charges in a fund separate
from other City funds and uses the revenue exclusively for stormwater management
purposes. JSUF ¶¶ 115–19.
C. Wilmington’s Stormwater Charge Formula
The City has enacted statutory provisions that govern its method for calculating
stormwater charges; the applicable formula varies depending upon the type of
property. Wilmington Code § 45-53(d)(1)–(3). The City cannot feasibly measure actual
stormwater runoff or pollution for which each property in its jurisdiction is responsible;
thus, the City’s statutory stormwater charge formula attempts to approximate runoff or
pollution attributable to each property. JSUF ¶¶ 20–22. But, as discussed below, the
City’s estimating and charging methodology differs depending on the type of property.
Specifically, to calculate the stormwater charge for nonresidential properties
including the Properties at issue, the City uses a multifactor formula. First, a property’s
total area (its “gross parcel area”) is multiplied by a “runoff coefficient”9 used to
estimate the percentage of a property’s surface area that generates water runoff based
on the property’s physical nature and topography. Wilmington Code § 45-53(a); JSUF
¶¶ 40–41, 44; Tr. 125:23–127:8. This produces the property’s “impervious area,”10 a
number meant to approximate the surface area from which stormwater runs off the
property. Wilmington Code § 45-53(a). That impervious area is then divided by an
9 A “runoff coefficient” is a multiplier used to estimate impervious area. Wilmington Code § 45-
53(a). Runoff coefficients range from .95 — a high multiplier used for relatively impervious
properties like “parking structures,” where most water runs off — to lower multipliers like the
.25 used for properties like parks and cemeteries which presumably absorb more water. Id.
§ 45-53(d)(3) (as delineated in Table 2); JSUF ¶¶ 40–41, 44; Tr. 125:23–127:8. A coefficient of 1,
for example, would mean all of the water runs off the property in question, while a coefficient
of zero would mean that no water runs off but rather is completely absorbed.
10 “Impervious area” is defined as:
the total square feet of hard surface areas including buildings,
driveways, any attached or detached structures, and paved or hard-
scaped areas, or other surface areas that behave like an impervious
area under wet weather conditions, that either prevent or restrict
the volume of storm water that can enter into the soil, and/or
thereby cause water to run off the surface in greater quantities or at
an increased rate of flow than what would have occurred under
natural undisturbed conditions.
Wilmington Code § 45-53(a); see also JSUF ¶ 23 (citing Wilmington Code § 45-53(a) for its
definition of “impervious area”).
11
“equivalency stormwater unit,” or “ESU,” of 789 square feet — which represents the
size of the median single-family home in Wilmington. JSUF ¶¶ 24–26. The ESU serves
as a common denominator of sorts to help property owners conceptualize the runoff for
which their property is responsible, as compared to the size of the City’s median
property. Tr. 79:6–80:8; 221:1–222:2; 326:1–327:19. The impervious area divided by the
ESU produces a property’s ESU factor. Wilmington Code § 45-53(a); JSUF ¶¶ 25–26, 45–
47. Finally, the property’s ESU factor is multiplied by the specified charge rate per ESU,
producing the City’s monthly charge to the property owner. JSUF ¶¶ 48–49; Tr. 326:9–
22.
To illustrate the City’s system, assume a hypothetical property of 100,000 square
feet gross parcel area with a runoff coefficient of .4 — meaning that 40% of the
property’s area is estimated to be an impervious area from which stormwater runs off
and presumably enters the City’s stormwater management system. See JSUF ¶ 40; Tr.
126:15– 127:8. Because 40% of 100,000 is 40,000, the hypothetical property’s estimated
“impervious area” would be 40,000 square feet. That estimated impervious area of
40,000 divided by the ESU of 789 produces an ESU factor of 50.697 — meaning that the
property is about 50.697 times larger than the median single-family residence in
Wilmington. See Tr. 221:22–25. If the rate per ESU for this property’s categorization
was $15, the property owner would owe $760.46 per month in stormwater charges.
The City obtains the first factor in the nonresidential formula — a property’s
“gross parcel area” — from the New Castle County (the “County”) Department of Land
Use. JSUF ¶ 36. The City assigns a “runoff coefficient” to a property based upon the
stormwater class into which the City has categorized a property. JSUF ¶ 37;
Wilmington Code § 45-53(d)(3). The City does not visit, or otherwise independently
assess, properties, but rather categorizes them within a stormwater class based on an
occupancy code the County has assigned to a particular property. JSUF ¶¶ 38–39.
Black & Veatch, the engineering firm the City hired to help develop its
stormwater charge system, recommended the fee methodology the City ultimately
adopted. JSUF ¶ 5. Black & Veatch developed the runoff coefficients the City employs
based on a set of coefficients outlined in a 1962 study called “Hydrologic Determination
of Waterway Areas for the Design of Drainage Structures in Small Drainage Basins,”
authored by Dr. Ven Te Chow (the “1962 Study”). JX 14 at WILM0000451,
WILM0000460.11
11William J. Hall & Marcelo H. García, Ven Te Chow, University of Illinois Urbana-Champaign,
The Grainier College of Engineering, https://cee.illinois.edu/about/history/history-
excellence/ven-te-chow (last visited Jan. 19, 2022).
12
At trial, the City’s expert, Mr. Cyre, admitted that he did not know whether the
occupancy codes reflected in the County’s records — upon which the City based its
stormwater classes and thus assigned impervious area coefficients — assumes the same
stormwater characteristics as the categorizes used in Dr. Chow’s 1962 Study or those
used by the City. Tr. 373:9–22. Instead, Mr. Cyre merely “assume[d]” that Black &
Veatch “had some basis” for correlating the City’s land classes and the County’s
occupancy codes. Tr. 373:18–21. The City, however, is not involved in the County’s
process for setting occupancy codes, and the City does not verify the accuracy of the
County’s occupancy codes as applied to properties to calculate their stormwater charge.
JSUF ¶ 33; Tr. 132:18–20.12
Wilmington also assesses interest on unpaid stormwater charges. The City
charges “1% for the first three months of nonpayment of charges, 1.5% for the second
three months of nonpayment of charges, 2.5% for the third three months of nonpayment
of charges, 3% for the fourth three months of nonpayment of charges, and 3% for each
subsequent month after twelve months of nonpayment of charges.” JSUF ¶ 64 (citing
Wilmington Code § 45-176(c)).
D. Wilmington Applied Its Formula to the Federal Properties
For the five federal Properties at issue, Wilmington used the above-described
formula to calculate and invoice the government $2,577,686.82 in stormwater charges
(and $3,360,441.32 in interest) between January 1, 2011, and April 16, 2021. Am. Compl.
at 5–14; JSUF ¶¶ 138, 145, 152, 159, 166.
The City calculated those charges after assigning the Properties at issue to the
“vacant” category. JSUF ¶ 123. The City defines a “vacant parcel” as “a parcel upon
which there is no structure except for some marginal structure such as fencing, and
which is assigned a ‘Vacant’ occupancy code in the assessor’s records of the New Castle
County Department of Land Use.” Wilmington Code § 45-53(a); JSUF ¶ 50. The
“vacant” class includes properties that “are not similar at all to one another” in terms of
“land cover and size.” Tr. 165:20–166:5.13 Wilmington, moreover, has never visited the
Properties. Tr. 116:21–25. Outside of categorizing the Properties into a stormwater
class — based upon the County occupancy codes — and utilizing the Black &
Veatch-assigned runoff coefficient, the City has not analyzed the Properties to
12Instead, the City’s engineering firm examined the County’s land categories, “made an
engineering judgment” about which City runoff category (e.g., commercial, residential) those
land categories translate to, and applied to each runoff category “the high end of the [runoff
coefficient] range” from Dr. Chow’s 1962 Study. Tr. 324:22–325:6.
13 This singular fact proves fatal to Wilmington’s case, as explained in detail below.
13
determine the volume or content of their stormwater runoff. JSUF ¶¶ 179–180. The
City has never analyzed the Properties’ actual impervious area. Tr. 121:7–12. Nor has
the City ever analyzed whether the runoff coefficient assigned to the Properties reflects
their physical characteristics. Tr. 163:21–25.
In sum, the City’s stormwater charges at issue in this litigation are “not based on
any separate analysis by Wilmington, or any other entity, of the Properties’ stormwater
runoff.” JSUF ¶ 178.
E. General Limitations on the Accuracy of Wilmington’s Formula
Wilmington believes that visiting the federal Properties to assess actual runoff
would be “discriminatory” to other properties in the City unless USACE files a
fee-adjustment application, Tr. 109:8–17, but the result is disparate treatment
nevertheless: Wilmington calculates impervious area more accurately for residential
than nonresidential properties. For residential properties, impervious area calculations
are “based on actual data on impervious area.” JSUF ¶ 34; see also JSUF ¶ 35
(“Impervious areas for condominium properties are based on ‘actual impervious
areas.’”). In contrast, to calculate impervious area for residential properties, the City
obtains from the County records the actual square footage of structures on the property,
but does not count “paved surfaces, such as driveways or patios or sidewalks.” Tr.
122:10–19; 123:13–19. The County tax assessment system does not maintain that data
for nonresidential parcels. JSUF ¶ 31. For example, with respect to the 60
condominium properties that existed when the City’s engineering firm developed its
stormwater user fee methodology, Wilmington used “a combination of [Geographic
Information System] and aerial imagery to individually determine impervious areas.”
Tr. 125:1-9. The City did not use that or any similar method to calculate the impervious
area of the Properties at issue. Tr. 125:10-13.
Accordingly, while Wilmington “does not differentiate between Federal and
private properties” when levying stormwater charges, JSUF ¶ 172; Tr. 107:10–13, the
City admits that “it is likely in some situations, the resulting measure of imperviousness
may differ from the actual imperviousness that exists in a specific property.” JX 14 at
WILM0000452; see also Tr. 169:17–22 (Commissioner Williams agreeing that it is “likely
in some situations that Wilmington will assess a charge that is based on the wrong
impervious area measurements”); Tr. 169:23–170:13 (Commissioner Williams testifying
that she does not believe the Properties were assigned a “significantly higher” measure
of imperviousness than their actual imperviousness).
14
Wilmington has not changed or amended its stormwater methodology since the
2011 Clean Water Act amendments updated the statute to define the term “reasonable
service charges.” Tr. 106:18–107:9; see also supra Section I.B.
F. Wilmington’s Appeal System
As explained above, the City provides a limited appeal process for stormwater
charges; nonresidential property owners can file fee adjustment requests with the City if
they believe there was an error in the charge calculations. JSUF ¶¶ 103–04. Property
owners can appeal: “(1) the calculation of the storm water charge; (2) the assigned storm
water class; (3) the assigned tier, if applicable, and (4) the eligibility for a credit.”
Wilmington Code § 45-53(d)(7). The appeal process is limited, however, because it
applies solely to future charges. JSUF ¶ 112 (“Wilmington’s appeal process only applies
prospectively (or only on a ‘go-forward’ basis).”); Wilmington Code § 45-53(d)(7)(b)
(“The filing of a notice of appeal shall not stay the imposition, calculation or duty to pay
the storm water charge; the appellant shall pay the storm water charge, as stated in the
billing.”). The City confirmed this at trial. Tr. 71:1–6, 102:23–103:4. The appeal process
simply does not provide for adjustments of prior billing cycles. JX 40 at WILM0012020
(“There will be no retroactive adjustments for prior billing periods.”).
Moreover, a property owner must pay all fees before the City will even consider
an appeal. JX 40 at WILM0012021 (“All stormwater charges that are outstanding at the
time of the application must be paid in full prior to the City commencing the technical
review. Any storm water charge bill that is received during the adjustment appeal
application review process need[s] to be paid in full.”); Tr. 103:5–15 (Commissioner
Williams testifying that the City “will not consider an application unless . . . your
outstanding fees are up to date”).14
G. The United States Refuses to Pay
The United States did not pay the stormwater charges or associated interest
Wilmington assessed on the five Properties. JSUF ¶¶ 139, 146, 153, 160, 167. The
United States did not appeal the charges assigned via the City’s appeal process. JSUF
¶ 168; Wilmington I, 136 Fed. Cl. at 630 (“Defendant did not bring an administrative
14Thus, if Wilmington were correct that the government is required to follow the City’s appeal
process, the government would have to pay its assessed fees — whether reasonable or not —
and then sue for their return irrespective of whether the appeal process was successful (because
the appeal process does not impact charges already assessed). In the Court’s view, the City’s
position makes little sense and would incorrectly reverse the burden of proof with respect to
what is otherwise the City’s money-mandating claim against the government pursuant to the
Clean Water Act’s Federal-Facilities Section.
15
appeal . . . .”); Wilmington II, 152 Fed. Cl. at 380 (“the government did not utilize
Wilmington’s administrative appeal process”).
Wilmington thus claims it is owed the amounts it has invoiced the government
for its Properties. Am. Compl. ¶¶ 2, 29, 34, 39, 44, 49.
IV. JURISDICTION AND STANDARD OF REVIEW
The Tucker Act is this Court’s primary jurisdictional statute; it provides, in
relevant part, as follows:
The United States Court of Federal Claims shall have
jurisdiction to render judgment upon any claim against the
United States founded either upon the Constitution, or any Act of
Congress or any regulation of an executive department, or upon
any express or implied contract with the United States, or for
liquidated or unliquidated damages in cases not sounding in
tort.
28 U.S.C. § 1491(a)(1) (emphasis added). Where a plaintiff seeks compensation from the
government based upon a provision of the Constitution, a statute, or regulation, this
Court only has jurisdiction where the plaintiff demonstrates that its claim is based on a
substantive law that “can fairly be interpreted as mandating compensation by the
Federal Government for the damages sustained.” United States v. Mitchell, 463 U.S. 206,
219 (1983). Such a claim is called a money-mandating claim. See, e.g., Maine Cmty.
Health Options v. United States, 590 U.S. --, 140 S. Ct. 1308, 1328 (2020) (holding that a
statute falls within the Tucker Act’s sovereign immunity waiver when it “creates ‘a
right capable of grounding a claim within the waiver of sovereign immunity if, but only
if, it can be fairly interpreted as mandating compensation by the Federal Government
for the damage sustained’” (quoting United States v. White Mountain Apache Tribe, 537
U.S. 465, 472 (2003))); Eastport S.S. Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl.
1967) (noting that, for money-mandating claims, “the allegation must be made that the
particular provision of law relied upon grants the claimant, expressly or by implication,
a right to be paid a certain sum”).
This Court already has concluded, and the parties do not dispute, that the Clean
Water Act’s Federal-Facilities Section, 33 U.S.C. § 1323, is a money-mandating statute.
See Wilmington I, 136 Fed. Cl. at 631 (“Section 1323(a) of the Clean Water Act ‘may fairly
be interpreted to mandate the payment of money by the government’ because it
mandates that the United States ‘shall’ pay ‘reasonable service charges.’” (quoting
DeKalb Cnty., 108 Fed. Cl. at 696)). This Court thus has jurisdiction to decide
16
Wilmington’s claims that the government owes the City money pursuant to that statute.
See Am. Compl. ¶ 3.
Pending before the Court is the government’s motion for judgment on partial
findings pursuant to RCFC 52(c), in which the government argues that Wilmington
failed to meet its burden of proof at trial. See RCFC 52(c) (“If a party has been fully
heard on an issue during trial and the court finds against the party on that issue, the
court may enter judgment against a party on a claim or defense that, under the
controlling law, can be maintained or defeated only with a favorable finding on that
issue.”). In particular, the government argues that Wilmington did not demonstrate
that the stormwater charges it assessed the government for its Properties were
“reasonable service charges” pursuant to the Federal-Facilities Section, 33 U.S.C. §
1323(c). Def. Mot. at 2.
In resolving the government’s motion, “the judge, as the sole trier of fact, may
weigh the evidence and is not required to resolve all issues of evidence and credibility
in the plaintiff’s favor.” Persyn v. United States, 34 Fed. Cl. 187, 195 (1995), aff’d, 106 F.3d
424 (Fed. Cir. 1996). Rather, after hearing the plaintiff’s evidence, the Court
“determine[s] whether or not the plaintiff has convincingly shown a right to relief.”
Fifth Third Bank of W. Ohio v. United States, 56 Fed. Cl. 668, 683 (2003) (quoting Howard
Indus., Inc. v. United States, 115 F. Supp. 481, 485 (Ct. Cl. 1953). “The trial may end at the
close of a plaintiff’s case if a plaintiff has failed to maintain its claim, RCFC 52(c),
because ‘[a] plaintiff has no automatic right to cross-examine a defendant’s witnesses
for the purpose of proving what the plaintiff failed to establish during the presentation
of its case.’” Columbia First Bank, FSB v. United States, 60 Fed. Cl. 97, 101 (2004) (quoting
Cooper v. United States, 37 Fed. Cl. 28, 35 (1996)); see also Penna v. United States, 153 Fed.
Cl. 6, 18 (2021) (discussing the procedure and standard of review for RCFC 52(c)
motions). In other words, “[t]he time for plaintiff to prove its case is during its case-in-
chief.” IMS Eng’rs-Architects, P.C. v. United States, 92 Fed. Cl. 52, 75 (2010) (citing Cooper,
37 Fed. Cl. at 35).
V. THE COURT GRANTS THE GOVERNMENT’S RCFC 52(C) MOTION
As explained above, the Clean Water Act only waives the federal government’s
sovereign immunity to Wilmington to sue for “reasonable service charges.” 33 U.S.C.
§ 1323(a), (c); DeKalb Cnty., 108 Fed. Cl. at 695. The “reasonable service charges” for
which the United States is liable include only “reasonable nondiscriminatory fee[s],
charge[s], or assessment[s] that [are] . . . based on some fair approximation of the
proportionate contribution of the property or facility to stormwater pollution . . .
and . . . used to pay or reimburse the costs associated with any stormwater
management program[.]” 33 U.S.C. § 1323(c)(1). Wilmington failed to carry its burden
17
to prove that its charges were “reasonable service charges” within the meaning of the
statute. Id. Therefore, the government is not liable pursuant to the Clean Water Act to
pay Wilmington’s service charges as assessed and claimed in this suit, and the
government is entitled to judgment.15
Simply put, the facts demonstrate, if anything, that the City’s charges to the
government do not represent “some fair approximation” of the Properties’ relative (i.e.,
“proportionate”) contribution to stormwater pollution.
A. Wilmington Failed to Prove that Its Stormwater Charges Are
“Reasonable Service Charges” Pursuant to the Clean Water Act
Although the charges Wilmington assessed the government for the Properties are
the product of a statutory scheme that may be facially reasonable in some general,
layman’s sense, the Court concludes that the City’s charges fail the statutory definition
of “reasonable services charges.” The relevant question, in that regard, is not whether
the City’s methodology has some logical basis, whether it appears fair in some general
sense, or whether an expert believes it is “good enough for government work,” Brown v.
Plata, 563 U.S. 493, 562 (2011) (Scalia, J., dissenting), as the pejorative saying goes;
rather, the issue is whether the City’s methodology as applied to the Properties at issue
produced charges to the government that meet the money-mandating requirements of
the Federal-Facilities Section. In deciding that issue, this Court is mindful of the United
States Supreme Court’s “established practice of construing waivers of sovereign
immunity narrowly” and thus we “decline [the] invitation to read the statutory
language [as] broadly” and as permissively as Wilmington has urged throughout this
litigation. Lane v. Pena, 518 U.S. 187, 195 (1996).
To be clear, the Court takes no issue with Wilmington’s general approach — i.e.,
the use of property categories and runoff coefficients. The problem, however, is that for
Wilmington’s charges to be found “reasonable,” the City’s evidence must show, at a
minimum, that the County’s tax records properly categorize the Properties for
15Section 1323(c)(1)(b) further requires that charges be “used to pay or reimburse the costs
associated with any stormwater management program[.]” 33 U.S.C. § 1323(c)(1)(b).
Wilmington has met this requirement. See JSUF ¶¶ 115–19; Tr. 342:14–21 (Mr. Cyre testifying
that the City’s stormwater charges are used to pay the cost of the stormwater program). The
government also does not contest that the City’s charges meet Section 1323(c)’s
“nondiscriminatory” requirement. See Wilmington Code § 45-53(d) (“All parcels that are within
the city’s corporate boundaries, shall be assessed a quarterly storm water charge[.] . . . .”); ECF
No. 106-1 at A13–A14, 37:21–38:5; JX 61 at 3–4 (government interrogatory response agreeing that
“[t]he United States does not presently so contend” that Wilmington’s stormwater charge is
discriminatory).
18
stormwater purposes, including relative to other properties or classes of properties
within the City’s jurisdiction. Relatedly, Wilmington also must show that Dr. Chow’s
1962 Study — from which the City’s consultants derived the runoff coefficients
Wilmington utilizes in its formula — assumes the same land category definitions as the
County’s records. As discussed in more detail below, the City failed to meet its burden
of proof on those factual questions and, thus, has not properly tailored its stormwater
charge program to the Federal-Facilities Section’s requirements.
First, the City failed to offer any testimony or evidence to prove that the County’s
tax records properly categorize the Properties — either individually or in comparison to
other properties. The tax records are critical because they drive the selection of the
runoff coefficient and the resulting charges. Thus, if a particular property is classified
incorrectly (i.e., there is no demonstrable connection between a County classification
and a property’s actual runoff characteristics) — or even if other properties are
classified incorrectly relative to the Properties — the resulting charges cannot represent
a fair approximation of contribution to stormwater pollution. The fatal problem for the
City’s claim is that the County land-record tax classifications have nothing to do with
stormwater runoff; instead, the County assigns land-use codes based on occupancy
permits, see supra Section III.C, and Wilmington fails to demonstrate any ties between
the labels assigned by occupancy permits and a property’s actual topography, its runoff
characteristics, or its contribution to stormwater pollution. See Wilmington Code § 45-
53(a) (defining “Vacant parcel” as “a parcel upon which there is no structure except for
some marginal structure such as fencing, and which is assigned a ‘Vacant’ occupancy
code in the assessor’s records of the New Castle County Department of Land Use.”).
Put differently, the City makes no individualized effort to determine whether a
different land category from Dr. Chow’s 1962 Study might more accurately describe the
characteristics of the Properties. Wilmington’s system merely assumes that the
County’s tax records reflect land categories whose definitions mirror those described in
Dr. Chow’s 1962 Study, from which Black & Veatch derived the runoff coefficients the
City uses. Simply put, a “vacant” parcel may be defined one way in Dr. Chow’s 1962
Study but a different way in the County’s tax records. If that were the case, the City
may well be assigning an entirely erroneous runoff coefficient to the Properties at issue.
In fact, Mr. Cyre explicitly conceded that possibility:
[THE COURT]: How do we even know that, when [Dr.
Chow’s 1962 Study] uses the range of .10 to .30, that that’s
what the [County’s] tax records are talking about in terms of
the character of the land?
19
[MR. CYRE]: I don’t know that. I would assume that Black &
Veatch, in allocating those . . . land use classes, those
occupancy codes, had some basis for doing so. But I do not
personally know that, sir.
Tr. 373:13–22. Wilmington cannot sustain its claim against the government on
Dr. Cyre’s admitted assumption about Black & Veatch’s work, which he made no
independent attempt to substantiate. Wilmington provided no evidence to fill that gap
in the record and, for all the Court knows, the coefficients assigned to the Properties
bear little to no relationship to the land category definitions in Dr. Chow’s 1962 Study,
let alone to the reality of the Properties’ physical characteristics (in terms of runoff or
pollution generation). Accordingly, the Court concludes that the coefficients may
accurately reflect the percentage of a particular property generating runoff or they may
not. That problem alone is sufficient to defeat Wilmington’s claim here.16
Second, Wilmington failed to prove that the variation of the actual characteristics
of properties within a particular tax-record category is relatively small. Again, Mr. Cyre
conceded this at trial:
[DEFENDANT’S COUNSEL]: And it’s accurate to say that —
as I believe you’ve testified, that you have not performed any
analysis of the properties that comprise these three occupancy
codes; correct[?]
[MR. CYRE]: That is correct.
[DEFENDANT’S COUNSEL]: And isn’t it fair to say that,
without doing any analysis of the properties that are in these
three occupancy codes, that you cannot conclude that the
16 A related problem is that the “gross parcel area” used in the City’s calculations also comes
from New Castle County tax assessor’s office, but the City does not verify the accuracy of that
data either. JSUF ¶ 33 (“New Castle County provides the property land use occupancy codes,
Wilmington does not check the property land use occupancy code unless an appeal is filed, and
Wilmington is not involved in New Castle County’s process for setting property land use
occupancy codes.”). The City does not know what land covers or property characteristics
actually exist on the Properties, Tr. 129:9–12, and it does not know if the County’s data is
accurate, Tr. 132:18–20; see also Tr. 309:17–21 (Mr. Cyre testifying that “in the specific applied
sense, it would be productive to validate the accuracy of any data source that you are using, in
this case the . . . New Castle County database”). None of this means that Wilmington’s formula
is generally unlawful or otherwise improper as applied to other properties with the City’s
jurisdiction. Rather, the Court holds only that the City’s charges to the United States at issue
here do not meet the requirements of the Federal-Facilities Section.
20
properties in that vacant class have similar land use
characteristics? That’s fair; correct?
[MR. CYRE]: I think that’s fair.
Tr. 360:23–361:8.
Given that admission, Wilmington fails to demonstrate that all the properties
within a particular class should be assigned the same coefficient, although that is
exactly what the City’s charging methodology does for the Properties. Again, assigning
all properties with a certain occupancy code the same coefficient assumes that the
properties have the same (or nearly the same) runoff characteristics. But, if there is
wide variation in the actual characteristics of properties within a particular occupancy
code, that could well mean that the government is being overcharged vis-à-vis other
properties assigned the same code. Absent testimony or other evidence either
substantiating the degree of similarity within an occupancy code or tying the
coefficients to the reality of the Properties’ physical characteristics, Wilmington cannot
prove that its charges are “based on some fair approximation of the proportionate
contribution of the property . . . to stormwater pollution[.]” 33 U.S.C. § 1323(c)(1)(A).
Other aspects of Mr. Cyre’s testimony further undermine Wilmington’s case:
• Mr. Cyre did not ever examine, or even visit, the Properties. Tr. 380:18–23;
383:21–384:7. Nor did the City. Tr. 116:21–24 (“[DEFENDANT’S
COUNSEL]: Wilmington has never been to the dredge disposal sites to
determine what is actually on the properties; right? [COMMISSIONER
WILLIAMS]: That is correct.”). Accordingly, Mr. Cyre was unable to offer
testimony about the Properties in particular. Tr. 283:6–13; see also
Tr. 347:25–348:3 (confirming that Mr. Cyre’s “focus was not on the
individual properties at issue”).
• Mr. Cyre was unable to explain to what extent the City’s impervious area
estimate correlated with the Properties’ actual impervious area. Tr. 349:14–
21; see also Tr. 381:10–17 (“[DEFENDANT’S COUNSEL]: To be clear, you do
not offer an opinion that the .30 runoff coefficient is a fair approximation of
the stormwater pollution that the Corps’ properties at issue contribute to
Wilmington’s stormwater system; correct? MR. CYRE: Other than by that
assumed extension from the class level to the individual members of the
class, that is correct.”).
21
• Mr. Cyre admitted that it is impossible to know if the assigned runoff
coefficient for a given property is accurate unless and until the City
examines that property. Tr. 297:5–12.
Although the Court acknowledges that Wilmington’s charges must represent
only a “fair approximation of the proportionate contribution of the property or facility to
stormwater pollution,” the City’s expert conceded too much ground for the City to
prevail. 33 U.S.C. § 1323(c)(1)(A) (emphasis added). In that regard, the Court takes no
issue with the City’s contention that the Clean Water Act permits the City to assess
stormwater fees against the United States based on estimates, Pl. Resp. at 29.17 The
Court concludes, however, that such estimates must be based on facts anchored in
reality.
Legal questions about approximations and estimates are not unique to this case.
For example, in Precision Pine & Timber, Inc. v. United States, the United States Court of
Appeals for the Federal Circuit, our immediate appellate court, considered, “with
respect to damages[,] . . . whether the evidence adduced at trial was sufficient to enable
the fact finder . . . to make a ‘fair and reasonable approximation.’” 596 F.3d 817, 833
(Fed. Cir. 2010) (quoting Nat’l Australia Bank v. United States, 452 F.3d 1321, 1327 (Fed.
Cir. 2006)). The party charged with proving a fair approximation of damages “has the
burden of proving them with ‘reasonable certainty.’” 596 F.3d at 833. “As the phrase
itself suggests, reasonable certainty requires more than a guess, but less than absolute
exactness or mathematical precision.” Id. (emphasis added) (citing Bluebonnet Sav.
Bank v. United States, 266 F.3d 1348, 1355 (Fed. Cir. 2001)). Based on the facts as found
above, the Court concludes that, in this case — on the spectrum of proof between guess
and “reasonable certainty” — Wilmington’s evidence is closer to the former than the
latter and, thus, the calculated fees at issue do not constitute a “fair approximation of
the proportionate contribution of the property or facility to stormwater pollution.” 33
U.S.C. § 1323(c)(1)(A).18
17Specifically, Wilmington contends that “Congress’s choice of the phrase ‘based on some fair
approximation of the proportionate contribution of the property or facility to stormwater
pollution’ necessarily implies that more than one approximation may be fair.” Pl. Resp. at 29
(quoting 33 U.S.C. § 1323(c)(1)(A)). The Court takes no issue with that specific assertion, either.
18Cf. Boeing Co. v. United States, 86 Fed. Cl. 303, 314 n.8 (2009) (“While consideration of a
hypothetical negotiation ‘necessarily involves an element of approximation and
uncertainty,’ . . . an expert should be able to hazard something more than a guess, or at least
show how, despite all reasonable efforts, his estimate is the best that could be derived.”
(quoting Unisplay, S.A. v. Am. Elec. Sign Co., 69 F.3d 512, 517 (Fed. Cir. 1995))).
22
Accordingly, the City did not prove that the Properties’ estimated runoff, and
thus the stormwater charges, were remotely accurate in any sense of that word. This
Court simply cannot, on this record, conclude that the City’s charges were “based on
some fair approximation of the proportionate contribution of the propert[ies] . . . to
stormwater pollution.” 33 U.S.C. § 1323(c)(1)(A) (emphasis added).
Wilmington’s proof at trial also failed to focus on the object of the requisite “fair
approximation” — i.e., “the proportionate contribution of the property or facility to
stormwater pollution.” 33 U.S.C. § 1323(c)(1)(A). Neither the Supreme Court nor the
Federal Circuit appear to have defined “proportionate” or “proportional” for the
purposes of the Clean Water Act. Merriam-Webster defines “proportionate,” not
surprisingly, with reference to “proportional”; it defines “proportional” as
“corresponding in size, degree, or intensity.” Proportionate, Merriam-Webster
Dictionary, https://www.merriam-webster.com/dictionary/proportional (last visited
Jan. 24, 2022).19 A straightforward reading of 33 U.S.C. § 1323(c) therefore indicates that
stormwater charges assessed against a federal property must be tied to the property’s
relative (or “corresponding”) contribution to stormwater pollution. Even without
resorting to a dictionary definition, however, the Court finds it obvious that the statute
requires some actual relationship between charges assessed against federal properties
and their relative contribution to total stormwater pollution.20
It is true, as Wilmington notes, that Congress appears to have adopted the 2011
Amendments “out of frustration with increasing Federal agency resistance to paying
local stormwater charges.” Pl. Resp. at 21 (citing 156 Cong. Rec. H979 (Dec. 22, 2010)).
But neither the plain language of the Federal-Facilities Section nor its legislative history
suggests that Congress made the government liable for anything more than stormwater
pollution costs for which federal properties are proportionately responsible. In other
words, the Federal-Facilities Section only mandates that the federal government pay for
its relative contribution to pollution — a connection that Wilmington did not prove at
19Merriam-Webster’s definition comports with that of other dictionaries. See, e.g., Proportionate,
Oxford Learner’s Dictionary,
https://www.oxfordlearnersdictionaries.com/us/definition/english/proportionate (last
visited Jan. 25, 2022) (“increasing or decreasing in size, amount or degree according to changes
in something else”); Proportionate, Oxford English Dictionary (3d ed. 2007),
https://www.oed.com/view/Entry/152776 (last visited Jan. 25, 2021) (“[p]roportioned,
adjusted in proportion; that is in (due) proportion, proportional (to); appropriate in respect of
quantity, extent, degree, etc.”).
20Cf. Hospice of New Mexico, LLC v. Sebelius, 691 F. Supp. 2d 1275, 1291 (D.N.M. 2010)
(concluding that “[t]he word ‘proportion,’ within the context of 42 U.S.C. § 1395f(i)(2)(C), refers
to the mathematical relation of a part to the whole; in other words, it specifies a ratio or a
fraction”), aff’d, 435 F. App’x 749 (10th Cir. 2011).
23
trial. The fact that Congress was concerned with the United States paying for its fair
share of stormwater runoff does not mean that Congress commanded payment for just
any reasonable guesstimate of costs that a locality seeks to impose on property owners
within a jurisdiction. Rather, the government is on the hook for fees correlating with
the approximate stormwater pollution to which the government actually contributes
(with the caveat that, as the Court already has acknowledged, such contributions may
be reasonably estimated).21
In sum, the statutory phrase “proportionate contribution of the property or
facility to stormwater pollution” requires some link between the charges Wilmington
seeks to impose and a property’s (estimated) stormwater pollution relative to total
pollution. Charges without such a link cannot be reasonable under the statute. For
example, the total cost of the City’s stormwater management system cannot simply be
allocated over a base of property area because the quantity of attributable pollution
cannot be derived from the size of a property alone. In that regard, the City
acknowledges, at least implicitly, that the specific physical characteristics of a property
must be taken into account. As explained above, the City relies upon County tax
records and runoff coefficients to accomplish that, but despite the statute’s plain
language, Wilmington did not present any evidence linking the Properties to any
particular amount of stormwater pollution, proportional or otherwise, and there is no
evidence that the proxies for relative pollution contribution — tax record categories and
runoff coefficients — yield a fair approximation for the purpose of computing a charge.
In its response brief, Wilmington elaborates on its interpretation of the Federal-
Facilities Section, arguing that the City’s charge regime keeps proportionality “within a
given Nonresidential class using parcel area,” “between Nonresidential classes using
impervious area,” and across different classes. Pl. Resp. at 30. This interpretation of
proportionality is not what the statute demands; rather, the statute demands a
demonstrated relationship between the charges and the Properties’ relative stormwater
21This Court generally is less than enthusiastic about relying on legislative history, and that is
particularly true where the statutory language is relatively clear and the history in question is
comprised of statements from individual legislators. United States v. Gonzales, 520 U.S. 1, 6
(1997) (“[G]iven the straightforward statutory command, there is no reason to resort to
legislative history.”); N.L.R.B. v. SW Gen., Inc., 580 U.S. --, 137 S. Ct. 929, 943 (2017) (“floor
statements by individual legislators rank among the least illuminating forms of legislative
history”). Nevertheless, because both parties cite to the legislative history in their briefs — see
Def. Mot. at 18–19, 22, 25–26, 28, 31, 34, 41–42; Pl. Resp. at 18–21, 29, 35 — the Court has
reviewed it and concludes that the legislative history, if anything, corroborates the
straightforward textual reading the Court applies in this decision.
24
pollution (even if that quantity is estimated).22 This can be seen from the language of
the statute itself, which implicitly requires that a property’s “contribution . . . to
stormwater pollution” be assessed “in terms of quantities of pollutants, or volume or
rate of stormwater discharge or runoff from the property or facility.” 33 U.S.C.
§ 1323(c)(1)(A). As a result of the City’s erroneous statutory interpretation,23 however,
the City did not provide evidence that it calculated charges for the Properties based on
the Properties’ relative contribution to the City’s stormwater pollution.
Nor for that matter, as explained supra, does the Court accept Wilmington’s
contention that its charging scheme results in proportionate charges across different
classes for the simple reason that Wilmington estimates impervious area for all
nonresidential properties using a runoff coefficient approach but does not use runoff
coefficients to determine impervious area for residential parcels. Tr. 122:2–9.
B. Wilmington Attempted to Prove the General Reasonableness of Its
Service Charge Methodology, Which Is Insufficient for Recovery
Wilmington focused its entire case-in-chief on proving that the methodology the
City uses to calculate stormwater charges for all properties in the City — residential,
commercial, and Federal — is generally reasonable. This strategic choice at trial meant
Wilmington did not provide evidence of the Properties’ proportionate contribution to
pollution, either estimated or actual. Given that choice, Wilmington’s case may have
been doomed from the outset, given how the Court reads the statute (as explained
above). Nonetheless, some discussion of the City’s case-in-chief is warranted to
22The City confirmed at trial that it would not label as unreasonable any gap, no matter how
large, between a property’s actual impervious area and its estimated impervious area unless the
government followed the City’s appeal process to dispute the City’s estimate. Tr. 193:13–19.
The implications of this position are striking; unless the government files an appeal, a
monumental difference between actual and correct charges — say, one leading to a million-
dollar overcharge — would not be considered unreasonable under Wilmington’s approach.
23Wilmington also presented differing interpretations of the proportionality requirement
during its case-in-chief. Compare Tr. 236:9–24 (“[DEFENDANT’S COUNSEL]: So[,] it’s your
testimony that a class with totally different, you know, properties in it, with totally different
characteristics, the resulting charge would still be proportional? [COMMISSIONER
WILLIAMS]: Yeah. I believe — I believe that the system is a fair approximation of it. Yes.”),
with Wilmington Code § 45-53(a) (“Storm water class means classes of uses defined such that
customers within a class have similar land use characteristics”); see also Def. Mot. at 25 n.7
(citing Commissioner Williams’ testimony at Tr. 236:19–25 as proof that “Wilmington
fundamentally misunderstands the proportionality requirement”).
25
demonstrate the gap between what the City showed and what it needed to show to
recover.24
The thrust of the City’s evidence was that: (1) Wilmington’s system is, overall,
“reasonable . . . [and] nondiscriminatory in technical terms”; (2) its charges, generally,
are “based on an approximation of the proportional contribution of . . . all the
properties . . . to stormwater pollution”; and (3) by extension, the charges at issue must
be characterized as reasonable. Tr. 342:22–343:5 (emphasis added). To this end, the
City’s sole expert witness, Mr. Cyre, testified as to various apparently sensible aspects
of the City’s charge regime. For example, he testified that the impervious area — the
proxy the City uses to help estimate how much water runs off a property — provides
“one fair approximation of the contribution to stormwater pollution.” Tr. 302:25–303:3.
He testified that more than three quarters of methodologies in use today by localities
incorporate impervious surface area in some manner, and that impervious area “is
widely accepted as the parameter that best represents contribution to pollution.” Tr.
303:10–20; see also JX 14 at WILM0000446 (discussing the widespread use of impervious
area in stormwater rate setting).
Mr. Cyre defended various aspects of the City’s methodology. He testified, for
example, that the County’s tax databases — upon which the City relies to determine a
property’s gross area — “are generally among the best in terms of reflecting what is
real.” Tr. 309:12–25. Regarding the City’s use of coefficients to determine impervious
area, Mr. Cyre testified that Dr. Chow’s “hydrology coefficients of runoff,” upon which
the City bases its own runoff coefficients, are “accepted by the engineering and
hydrology fraternity totally.” Tr. 337:13–15. Mr. Cyre further testified that he “think[s]
Wilmington’s system is achieving the appropriate objectives,” citing the use of classes
for properties and based upon the assumption that the County’s tax database is “good.”
Tr. 336:20–337:12. He testified that the system “treats similar classes of properties
similarly and dissimilar classes of properties proportionately.” Tr. 337:3–5. He testified
that from a technical standard, the “stormwater charges to the classes of properties in
Wilmington bear a substantial relationship to the cost of the stormwater management
program,” Tr. 337:16–22 (emphasis added), and that the system as a whole is
“approximately and reasonably proportional to the cost of the program,” Tr. 338:1–10.
24“Reasonable” has been defined as “fair, proper, or moderate under the circumstances[.]”
Ayesta v. Davis, 584 U.S. --, 138 S. Ct. 1080, 1093 (2018) (citing Reasonable, Black’s Law Dictionary
(5th ed. 1979)). The 2019 edition of Black’s Law Dictionary defines the term identically.
26
All this testimony is beside the point. Wilmington’s evidence may show that its
stormwater charge methodology is reasonable in some general sense.25 But the Clean
Water Act does not require the government to pay service charges merely because a
locality employs a methodology that may be generally characterized as reasonable or
because a locality’s methodology is similar to others adopted in different jurisdictions.
Rather, the statute provides that the federal government must pay charges only if they
are “based on some fair approximation of the proportionate contribution of the
property or facility to stormwater pollution.” 33 U.S.C. § 1323(c)(1)(A). Mr. Cyre did
not opine, other than in a conclusory fashion, on how Wilmington’s methodology meets
the statutory requirements. Indeed, Mr. Cyre admitted that both of the following can be
simultaneously true — the City’s stormwater methodology could be “within a
reasonable spectrum of approaches” and yet the charges that system produces for the
Properties at issue might “not accurately reflect the demand [the] Corps’ Properties
place on the system.” Tr. 378:22–379:4. Relatedly, he also indicated that the City’s use
of runoff coefficients to estimate impervious area can be consistent with general
industry practice, while the City’s application of a particular runoff coefficient to the
Properties might “not accurately reflect the[ir] impervious area.” Tr. 378:14–21. Those
admissions fundamentally undermine Wilmington’s case.
The Court further finds it impossible to determine that the Properties’ charges
are “based on a proportionate contribution . . . to stormwater pollution” absent a
preponderance of evidence that the Properties impose any burdens on, or contribute
any pollution to, Wilmington’s stormwater management system. 33 U.S.C.
§ 1323(c)(1)(A). In particular, Wilmington failed to identify any measurable cost the
Properties impose on the City’s stormwater management system. See, e.g., JSUF ¶ 14
(“Wilmington does not contend that stormwater from one or more Properties entered
(or is entering) Wilmington’s [combined sewer system] and [municipal separate storm
sewer system].”); JSUF ¶ 15 (“The Properties do not contribute to Combined Sewer
Overflows[.]”). Wilmington’s trial witnesses made this clear. Mr. Cyre did not render
an opinion on whether the Properties “imposed any additional costs on Wilmington’s
system or program.” Tr. 291:12–292:7 (emphasis added). Specifically, Mr. Cyre
admitted that he was unaware of: (1) any City analysis regarding the demand the
Properties impose on Wilmington’s system, Tr. 393:6–10; (2) any drainage infrastructure
the City provides to service the Properties, Tr. 393:15–18; or (3) any infrastructure to
25On the other hand, even that may be a rosy assessment of Wilmington’s evidence: Mr. Cyre
went on to testify that he would put Wilmington’s methodology “at the 45[th] percentile,”
adding “it’s pretty darn good. . . . I think it could be a lot better. . . . I think it’s good enough.”
Tr. 307:21–308:3. Accordingly, the Court does not conclude that Wilmington’s methodology is
generally reasonable; rather, the Court merely assumes it is for the purposes of this decision.
27
improve water quality that the City maintains as a result of the Properties. Tr. 393:19–
22.
Similarly, Commissioner Williams testified that the Properties do not contribute
water to any of Wilmington’s pipes, its combined sewer system, the municipal separate
storm sewer system, combined sewer overflows, or the wastewater treatment plant.
Tr. 177:14-18 (pipes); Tr. 176:21-25, (combined sewer system); Tr. 177:1–5 (municipal
separate storm sewer system); 179:6–9 (combined sewer overflows); Tr. 178:4–20
(wastewater treatment plant). She also testified that the City is unaware of any pipes on
the Properties “that connect to [Wilmington’s] stormwater collection and conveyance
system.” Tr. 145:8-13. Finally, Commissioner Williams testified that the City does not
know the proportional demand or burden, if any, that the Properties place on the rivers
or to which TMDLs the dredge disposal sites contribute. Tr. 185:13–23, 186:23–187:3
(rivers); Tr. 189:17–21 (TMDLs).
In sum, Wilmington’s reliance on Mr. Cyre’s and Commissioner Williams’
testimony to prove that the Properties contribute to stormwater pollution (and
associated costs) — and were charged accordingly — is unavailing, particularly given
the City’s burden of proof in this case.
****
In the end, Wilmington concentrated its fire away from the correct statutory
target (as delineated in the Federal-Facilities Section), failed to produce evidence
demonstrating proportionality, and, thus, failed to meet its burden to prove facts
necessary to show that it is entitled to the claimed fees.
C. The Court Rejects Wilmington’s Remaining Arguments
Wilmington advances several alternative arguments in an attempt to show that
its charges qualify as reasonable under the Federal-Facilities Section. None of them
succeeds.
1. The 2008 EPA Brochure Is Irrelevant
Wilmington insists that the EPA’s inclusion of Wilmington’s stormwater utility
in a 2008 brochure, in which the EPA labeled the program “fair and equitable,” imbues
Wilmington’s charges with per se reasonableness under the Clean Water Act. ECF
No. 112-3 at 5; Pl. Resp. at 22–23 (“The EPA’s conclusion has not been withdrawn or
rebutted.”). The brochure certainly favors Wilmington’s position, but cannot save the
City’s claims. The EPA’s label of “fair and equitable” is irrelevant as a matter of both
fact and law.
28
First, even if an agency’s description of a charging methodology in a public
publication was somehow meant as a binding factual admission — something that
Wilmington does not argue here — EPA could not have used the phrase to refer to
Section 1323(c)(1) because the 2008 brochure was published well before the 2011 Clean
Water Act Amendments. See Pl. Resp. at 23 (“[T]he EPA’s description of Wilmington’s
stormwater charges as being ‘fair and reasonable’ predates Congress’ 2011 amendment
to 33 U.S.C. § 1323 . . . .”). Thus, the EPA’s brochure cannot show, as a factual matter,
that the government intended (in 2008) for Wilmington’s charges to be deemed
reasonable under the definition of “reasonable service charges” enacted years later.
Second, while a charitable interpretation of the City’s argument may be that
EPA’s praise for Wilmington’s program somehow should preclude the government
from refusing to pay Wilmington’s charges based on an estoppel theory, binding
precedent forecloses such an argument here. In general, a plaintiff cannot rely upon
erroneous advice from government personnel to obtain payment where it is otherwise
unauthorized. See, e.g., Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414, 426 (1990)
(“[J]udicial use of the equitable doctrine of estoppel cannot grant respondent a money
remedy that Congress has not authorized.”).26 Thus, even if Wilmington invokes the
EPA brochure as the basis for some sort of an estoppel argument, the Court rejects it.
2. Industry Practice Is Inapposite to the Statutory Requirements
Wilmington further argues that its charges are reasonable because its engineering
firm developed the City’s approach to be consistent with industry practice. Pl. Resp. at
23 (“The fact that Wilmington’s Ordinance assesses stormwater charges consistent with
prevailing standards and practices is itself evidence of the charges’ reasonableness.”).
The Court is not unsympathetic to the City’s point in a general sense, but it is inapposite
to the statutory requirements. Nothing in the statute makes Wilmington’s charges
26This is particularly true in the absence of any allegation of affirmative misconduct —
something Wilmington does not allege here. See Lua v. United States, 843 F.3d 950, 956 (Fed. Cir.
2016) (“Appellants must show ‘affirmative misconduct [as] a prerequisite for invoking equitable
estoppel against the [G]overnment’” (quoting Zacharin v. United States, 213 F.3d 1366, 1371 (Fed.
Cir. 2000))). Wilmington alleges only that the EPA “reviewed Wilmington’s stormwater
utility . . . and concluded . . . that Wilmington had ‘establish[ed] a stormwater utility to recover
costs related to stormwater management on a fair and equitable basis.’” Pl. Resp. at 22–23
(quoting PX 28 at 4). It does not allege affirmative misconduct and nowhere claims that
Wilmington developed its stormwater utility in reliance on EPA’s brochure. In any event, the
Court doubts that such allegations would make sense, as the EPA’s brochure was published
after Wilmington’s stormwater utility provisions were enacted. PX 28 at 4 (“Wilmington has a
combined sewer system and used a three-step approach to establish a stormwater utility . . . .”).
29
reasonable for payment purposes just because the City’s approach is similar to that of
other localities.
Moreover, even if the Court were to assume that the City’s process followed the
industry standard at the time the ordinance was passed,27 a practice that fails to satisfy a
current legal requirement for payment cannot be saved by conformance with a
years-old industry standard.28 Rather, to recover its charges in this case, Wilmington
must, but does not, demonstrate that its charges properly qualify under the money-
mandating statute at issue, 33 U.S.C. § 1323.
3. The Charges Do Not Have a “Presumption of
Reasonableness”
Wilmington further argues that its stormwater charges must be presumed
reasonable as a matter of law. Pl. Resp. 24–27. Specifically, the City argues that because
its stormwater charges were “assessed in strict accordance with the elements of City
Code § 45-53” they are “presumed reasonable as a matter of law” and are subject only
to “rational basis” review. Id. at 24. Wilmington thus seems to argue that virtually any
charges it develops under its own Code would be legally reasonable under the Clean
Water Act, without regard to the statutory definition of “reasonable service charges”
contained in the Federal-Facilities Section. This is patently incorrect. Because 33 U.S.C.
§ 1323(c) clearly defines when state and local charges are “reasonable,” this Court may
not presume that Wilmington’s charges are “reasonable as a matter of law.”
Wilmington, as the plaintiff in this action, bears the burden of proof and cannot shift
that burden to the government. See, e.g., Banks v. United States, 78 Fed. Cl. 603, 616
(2007) (noting that “[p]laintiffs bear the burden of proof in civil proceedings” and they
“meet that burden only if they establish by a preponderance of the evidence the cause
of action for which they have sued” (internal quotations and citations omitted)), vacated
in part on other grounds, 721 F. App’x 928 (Fed. Cir. 2017).
27The government disputes this claim, labeling the testimony of Wilmington’s expert on the
matter conclusory: “There is no evidence in the record that ‘the practices [of] Black and Veatch’
in formulating Wilmington’s utility are consistent with industry standards. . . . There is no
evidence before the Court that Wilmington’s ordinance is consistent with prevailing standards.”
Def. Reply at 6 (quoting Pl. Resp. at 23).
28 Congress amended the Federal-Facilities Section to define “reasonable service charges” in
2011, after Wilmington already instituted the formula it used to generate the charges for which
it seeks compensation here; it is perhaps unsurprising that Wilmington ultimately fails to
demonstrate that its charges to the government qualify under the relevant statute because
Wilmington never updated its charging methodology accordingly. Tr. 106:18–107:9.
30
Relatedly, the City contends that the Clean Water Act “did not exempt the
United States from the burdens of overcoming . . . long-established presumptions
accompanying local ordinances” like Wilmington’s “complete powers of legislation and
administration” and its “power to enact ordinances . . . necessary and proper for
carrying into execution of any of its express or implied powers.” Pl. Resp. at 26–27
(quoting Wilmington Code § 1-101 (“Powers of the city — Generally”)). This argument
also fails. The government does not challenge the City’s general power to enact
ordinances, nor does the government contest the validity of Wilmington’s statutory
scheme for stormwater charges. Rather, the only issue here is whether the City has
proven that the government must pay assessed charges pursuant to the Federal-
Facilities Section of the Clean Water Act. The City’s power to enact ordinances is
simply irrelevant to that question, which the Court answers in the negative.
4. The Supreme Court’s “Massachusetts Test” is Inapplicable
Next, Wilmington argues that the Supreme Court’s decision in Massachusetts v.
United States, 435 U.S. 444 (1978), and its progeny, should control the outcome of this
case. According to Wilmington, those cases teach that the City only has to demonstrate
that its charging methodology is “generally reasonable” because: (1) “the words
‘accurate’ or ‘actual’ are not found in 33 U.S.C. § 1323”; and (2) “the law has never held
[local] governments to any semblance of accuracy under the ‘fair approximation’ test or
otherwise.” Pl. Resp. at 32–33 (discussing Massachusetts and citing other cases). The
Court is unconvinced that Massachusetts rescues the City’s claims.
In Massachusetts, the Supreme Court considered an annual registration tax
Congress imposed on all civil aircraft that fly in the navigable airspace of the United
States; the tax was enacted “[a]s part of a comprehensive program to recoup the costs of
federal aviation programs from those who use the national airsystem.” 435 U.S. at 446.
The case involved the “constitutional question” of “whether this tax, as applied to an
aircraft owned by a State and used by it exclusively for police functions, violates the
implied immunity of a state government from federal taxation.” Id. (emphasis added).
The Supreme Court concluded “that it does not.” Id. In so holding, the Supreme Court
explained:
The principles that have animated the development of the
doctrine of state tax immunity and the decisions of this Court
in analogous contexts persuade us that a State enjoys no
constitutional immunity from a nondiscriminatory revenue
measure, . . . which operates only to ensure that each member
of a class of special beneficiaries of a federal program pay a
31
reasonable approximation of its fair share of the cost of the
program to the National Government.
Id. at 454–55 (noting that “the immunity of the Federal Government from state taxation
is bottomed on the Supremacy Clause, but the States’ immunity from federal taxes was
judicially implied from the States’ role in the constitutional scheme”).
In sum, the Supreme Court held:
So long as the [federal] charges do not discriminate against
state functions, are based on a fair approximation of use of the
system, and are structured to produce revenues that will not
exceed the total cost to the Federal Government of the benefits
to be supplied, there can be no substantial basis for a claim
that the National Government will be using its taxing powers
to control, unduly interfere with, or destroy a State’s ability to
perform essential services.
Massachusetts, 435 U.S. at 466–67 (emphasis added).
This Court understands the facial appeal of the Massachusetts decision to
Wilmington’s position. The Supreme Court in that case indeed acknowledged that a
“fair approximation” of a user’s proportional share of the cost of a system does not
require a precise calculation. 435 U.S. at 465–66 (discussing the general insignificance of
“[t]he possibility of a slight overcharge”). The government does not dispute that
premise. Def. Resp. at 9 (conceding that the Clean Water Act’s Federal-Facilities Section
“does not require exact precision”). And neither does this Court. But that premise does
not lead to the ineluctable conclusion that the reasoning in Massachusetts applies here to
save Wilmington’s money-mandating claim. In that regard, we must be clear about the
context of that case and the precise issue before the Supreme Court — Massachusetts did
not define the term “fair approximation” for all purposes, but rather addressed whether
fees the federal government imposed on a state passed constitutional muster:
If the National Government were required more precisely to
calibrate the amount of the fee to the extent of the actual use
of the airways, administrative costs would increase and so
would the amount of revenue needed to operate the system.
The resulting increment in a State’s actual fair share might
well be greater than any overcharge resulting from the
present fee system. But the complete answer to the
Commonwealth’s concern is that even if the flat fee does cost
it somewhat more than it would have to pay under a perfect
32
user fee system, there is still no interference with the values
protected by the implied constitutional tax immunity of the
States. The possibility of a slight overcharge is no more
offensive to the constitutional structure than is the increase in
the cost of essential operations that results either from the fact
that those who deal with the State may be required to pay
nondiscriminatory taxes on the money they receive or from
the fact a jury may award an eminent domain claimant an
amount in excess of what would be “just compensation” in an
ideal system of justice.
Massachusetts, 435 U.S. at 466.
The Supreme Court thus held that a tax representing a “fair approximation” of
“use” — or perhaps, more accurately, an allocation of cost of use — satisfied
constitutional requirements. 435 U.S. at 461 (“A nondiscriminatory taxing measure that
operates to defray the cost of a federal program by recovering a fair approximation of
each beneficiary’s share of the cost is surely no more offensive to the constitutional
scheme than is either a tax on the income earned by state employees or a tax on a State’s
sale of bottled water.”). Applying that “fair approximation” standard to the tax at
issue, the Court in Massachusetts concluded that it was constitutional: “the tax satisfies
the requirement that it be a fair approximation of the cost of the benefits civil aircraft
receive from the federal activities.” Id. at 467. Although the Court noted “[a] probable
deficiency in the formula” — insofar as “not all aircraft make equal use of the federal
navigational facilities or of the airports that have been planned or constructed with
federal assistance” — the Court nevertheless determined the taxation “scheme . . . is a
fair approximation of the cost of the benefits each aircraft receives.” Id. at 468–69 (“The
four taxes, taken together, fairly reflect the benefits received, since three are geared
directly to use, whereas the fourth, the aircraft registration tax, is designed to give
weight to factors affecting the level of use of the navigational facilities.”). The Supreme
Court further determined that “the tax is not excessive in relation to the cost of the
Government benefits supplied.” Id. at 469.
Although this Court agrees with Wilmington that Massachusetts plausibly may be
read to operationally define the phrase “fair approximation,” we cannot graft that
concept from a case involving the constitutionality of a tax onto the later-enacted,
money-mandating statute at issue in this litigation. To the extent the Supreme Court
defined “fair approximation,” the definition is hardly plug-and-play. In that regard, the
United States Court of Appeals for the Eighth Circuit explained the difficulty with
exporting the Massachusetts analysis to a different context:
As far back as the landmark case of McCulloch v. Maryland, 4
Wheat. 316, 4 L.Ed. 579 (1819), it was recognized that the
federal government is immune from taxation by the states
33
absent Congressional authorization. Federal immunity from
state taxation is based on the Supremacy Clause of the United
States Constitution, U.S. Const. art. VI, cl. 2. Unlike the states’
immunity from federal taxation, which is somewhat limited,
the United States’ immunity from state taxation is a “blanket
immunity.” . . . The immunity question in Massachusetts arose
in the context of a state’s immunity from federal taxation. The
states’ immunity from federal taxation is more limited than
the federal government’s immunity from state taxation, and
is based on a different constitutional source. Generally, the
states are immune from federal taxation that would unduly
burden essential state functions. Federal immunity from state
taxation, however, is a blanket immunity and is not subject to
the same limits.
United States v. City of Columbia, 914 F.2d 151, 153–54 (8th Cir. 1990) (internal citations
omitted) (quoting South Carolina v. Baker, 485 U.S. 505, 518 n.11 (1988), and discussing
Massachusetts, 435 U.S. at 459–60). Thus, there is a distinction this Court must draw —
at least as a matter of constitutional law — between the degree of precision that the
federal government must use when imposing a tax or fee on states, on the one hand,
and the severe constraints upon states seeking to charge the federal government, on the
other.
Wilmington fails to explain how the constitutional principles controlling what
the federal government may charge users for its services translate to how this Court
must interpret 33 U.S.C. § 1323(c).29 Again, the Supreme Court in Massachusetts was
concerned with whether a federal tax or user fee constituted a “fair approximation” of
the cost of benefits received by a user of a government program or system — a
judicially-created test formulated specifically to analyze the constitutionality of a
federal tax (or fee). Indeed, the Supreme Court itself has read Massachusetts as standing
only for the proposition that “the amount of a user fee [need not] be precisely calibrated
to the use that a party makes of Government services.” United States v. Sperry Corp., 493
U.S. 52, 60 (1989) (“Nor does the Government need to record invoices and billable hours
to justify the cost of its services.”). Rather, “[a]ll that [is] required is that the user fee be
29Cf. United States v. Sperry Corp., 493 U.S. 52, 61 n.7 (1989) (distinguishing American Trucking
Assns, Inc. v. Scheiner, 483 U.S. 266 (1987), on the grounds that “[t]he Court there was faced with
particular constitutional restrictions on fees and taxes not present in this case” and explaining
that American Trucking’s reasoning “cannot be extended outside the context of the Commerce
Clause” which imposes a more “exacting requirement” than the Just Compensation Clause).
34
a ‘fair approximation of the cost of benefits supplied.’” Id. (quoting Massachusetts, 435
U.S. at 463 n.19).30
In contrast to the constitutional questions addressed in Massachusetts, this Court
is faced with a clear statutory directive — and we cannot simply ignore the object of the
“fair approximation” in the Clean Water Act’s Federal-Facilities Section, in which
Congress expressly commanded payment of local service charges only where they are
based on “the proportionate contribution of the property . . . to stormwater pollution.”
33 U.S.C. § 1323(c)(1)(A). As discussed above, Wilmington’s charging methodology is
entirely untethered to the Properties’ proportionate contribution to stormwater
pollution. Again, the City is free to estimate the Properties’ proportionate contribution
to stormwater pollution (i.e., to employ a “fair approximation”), but there is little, if any,
evidence — and certainly no preponderant evidence — that Wilmington’s scheme does
that with any degree of accuracy.
Indeed, the Court agrees with the government that Wilmington would lose even
if the Court were to apply the Massachusetts test. See Def. Reply at 10. As the
government notes, “Massachusetts requires charges be based on some fair
approximation of use” or cost of use. Id. (citing Massachusetts, 435 U.S. at 464).
Wilmington, however, “did not present any evidence at all showing that the Properties
use Wilmington’s system or impose any measurable burden on Wilmington’s system,”
and the Properties “indisputably do not use Wilmington’s local drainage
infrastructure.” Def. Reply at 10 (citing JSUF ¶ 14 and explaining that “[t]o the
contrary, the evidence strongly shows the opposite, that the Properties are not being
charged an approximate amount proportionate to their contributions to stormwater
pollution”).31
Wilmington cites other cases applying Massachusetts, but they are inapposite or
support the government. See Pl. Resp. at 33 (citing, e.g., Jorling v. Dep’t of Energy, 218
30The Supreme Court thus “recognized that when the Federal Government applies user charges
to a large number of parties, it probably will charge a user more or less than it would under a
perfect user-fee system, but we declined to impose a requirement that the Government ‘give
weight to every factor affecting appropriate compensation for airport and airway use[.]’”
Sperry, 493 U.S. at 61 (emphasis added) (citing Massachusetts, 435 U.S. at 468).
31The Court further agrees with the government that Wilmington also appears to “equate[]
‘proportionate’ with ‘nondiscriminatory,’ arguing that proportionate simply means fair and
equitable apportionment between different governments.” Def. Rep. at 10 (citing Pl. Resp. at
34). The government correctly explains, however, that “[S]ection 1323(c) separately requires
stormwater charges be nondiscriminatory” and that “[i]f Wilmington were right, there would
be no need to separately require proportionality if ‘nondiscriminatory’ and ‘proportionate’
denoted the same meaning.” Id. Thus, the Court agrees that “Wilmington’s interpretation
renders the word ‘proportionate’ superfluous” and “must be rejected.” Id.35
F.3d 96 (2d Cir. 2000), and Brock v. Wash. Metro Area Transit Auth., 796 F.2d 481, 485
(D.C. Cir. 1986)).32
In Jorling, the United States Court of Appeals for the Second Circuit held that
hazardous waste charges New York State imposed on federal installations under the
Resource Conservation and Recovery Act (“RCRA”) constituted “reasonable service
charges” pursuant to 42 U.S.C. § 6961(a) because they met the Massachusetts “fair
approximation” test. 218 F.3d at 103–06. In particular, the Second Circuit concluded
that such charges were “reasonably designed to fairly approximate [the] use of [the
New York State Department of Environmental Conservation]’s services and thereby to
roughly approximate the cost of supplying these services to transporters of waste[.]” Id.
at 105. As explained above, this Court does not agree that Massachusetts’ constitutional
concerns — and its “fair approximation” standard — may be transported and applied
directly to the Clean Water Act’s Federal-Facilities Section. More significantly,
however, Jorling is distinguishable because RCRA does not contain the same (or even an
analogous) definition of “reasonable service charges.” Compare 42 U.S.C. § 6961(a), with
33 U.S.C. § 1323(c)(1).
As amended, RCRA provides that each department, agency, and instrumentality
of the federal government
engaged in any activity resulting, or which may result, in the
disposal or management of solid waste or hazardous waste
shall be subject to, and comply with, all Federal, State,
interstate, and local requirements, both substantive and
procedural . . . , respecting control and abatement of solid
waste or hazardous waste disposal and management in the
same manner, and to the same extent, as any person is subject
to such requirements, including the payment of reasonable
service charges.
42 U.S.C. § 6961(a) (emphasis added). “In 1992, Congress clarified the scope of the
waiver of sovereign immunity in this provision,” Jorling, 218 F.3d at 100, by adding the
following language:
The United States hereby expressly waives any immunity
otherwise applicable to the United States with respect to any
such substantive or procedural requirement (including, but
not limited to, any . . . reasonable service charge). The
reasonable service charges referred to in this subsection
32Plaintiff also cites N.Y. Dep’t of Env’t Conservation v. U.S. Dep’t of Energy, 850 F. Supp. 132, 142–
43 (N.D.N.Y. 1994), but that decision was affirmed in Jorling and so this Court does not
separately address the district court decision.
36
include, but are not limited to, fees or charges assessed in
connection with the processing and issuance of permits,
renewal of permits, amendments to permits, review of plans,
studies, and other documents, and inspection and monitoring
of facilities, as well as any other nondiscriminatory charges
that are assessed in connection with a Federal, State,
interstate, or local solid waste or hazardous waste regulatory
program.
Federal Facility Compliance Act of 1992, Pub. L. No. 102–386, § 102(a)(3), 106 Stat. 1505,
1505 (codified at 42 U.S.C. § 6961(a)).
RCRA thus manifestly does not define “reasonable services charges” per se; it
merely provides examples of what the federal government may be charged in the
limited context of waste disposal. While RCRA references the permissibility of “other
nondiscriminatory charges,” RCRA contains nothing similar to the limiting language of
proportionality of contribution to pollution that Congress included in the Clean Water
Act’s Federal-Facilities Section. The absence of such specific language at least enables
this Court to understand why, for the purposes of RCRA, the parties and the Second
Circuit resorted to the Massachusetts analysis regarding what constitutes a fair
approximation of use. See Jorling, 218 F.3d at 102 (“The Supreme Court’s application of
the fair approximation test in Massachusetts to uphold the challenged aircraft
registration tax appears to tilt the analysis toward consideration of use.”).33 Congress
has instructed, however, that the “fair approximation” that is relevant for the Clean
Water Act is not some generic “use” given over to judicial definition, but rather must be
an approximation of “the proportionate contribution of the property . . . to stormwater
pollution.” 33 U.S.C. § 1323(c)(1)(A). Because Wilmington’s claims are governed by
more clearly defined, and more restrictive, statutory language than that of RCRA, the
Second Circuit’s reliance on the Massachusetts analysis of “fair approximation” does not
persuade this Court to apply Massachusetts in this case.
In Brock v. Washington Metro Area Transit Authority, the United States Court of
Appeals for the District of Columbia Circuit considered the District of Columbia’s
workers’ compensation regime, pursuant to which “all employers (or their
compensation carriers) contribute to a Special Fund from which the Secretary of
Labor . . . makes a variety of payments to injured workers.” 796 F.2d at 481–82 (citing
33 U.S.C. § 944). The Washington Metropolitan Area Transit Authority (“WMATA”)
stopped contributing to that Special Fund, asserting, among other things, “that the
33See also Jorling, 218 F.3d at 103 (“Ultimately, of course, the Massachusetts test is concerned with
whether the challenged method for imposing charges fairly apportions the cost of providing a
service, but by framing the second component of the test in terms of ‘use,’ the Court made clear
that a method for imposing charges based on each payer’s approximate use will pass muster as
an adequate apportionment of costs.”).
37
constitutional doctrine of intergovernmental tax immunity (here, state immunity from
federal taxation) shelters it from liability for Special Fund contributions.” Id. at 482.
Applying Massachusetts, the D.C. Circuit explained as follows:
. . . Massachusetts held only that the method used to calculate
the fee must rationally be designed to approximate
prospectively the benefit to the user. The levy held
constitutional in Massachusetts illustrates this meaning of “fair
approximation.” The fee was a flat registration tax for all civil
aircraft, introduced to help finance federal aviation programs;
the amount of the fee was based on the size and type of
aircraft, but not the aircraft’s actual use of the airways or the
facilities and services supplied by the United States. . . .
The Massachusetts opinion acknowledged that a fee based on
actual use would measure the benefit to the user more
accurately. The Court emphasized, however, that an actual
use measurement method would be more costly to
administer. Furthermore, the Court observed, the
measurement method employed does bear a fair relationship
to the benefit: bigger planes are more expensive for the federal
safety system to accommodate. Finally, the Court noted that
all users receive certain ambient or indirect benefits from the
federal aviation system: the federal services are available to,
and make the airspace safer for, all users.
Brock, 796 F.2d at 485–86 (discussing Massachusetts, 435 U.S. at 468–69, 451 n.9).
Like Jorling, the Brock decision similarly relied upon Massachusetts to focus on
whether a fee had some approximate or fair relationship to the benefit received by the
entity charged. But, again, in Brock — just as in Massachusetts itself — there was no
statutory command defining the object of “fair approximation,” in contrast to the Clean
Water Act’s Federal-Facilities Section at issue here. Rather, the D.C. Circuit adapted
and applied the Massachusetts analysis to hold “that the payments in question entail a
fair approximation of projected benefits, and, moreover, relate to a ‘proprietary’
function,” such “that WMATA cannot tenably claim constitutional immunity from the
Special Fund assessment.” Brock, 796 F.2d at 487.
Brock is thus inapposite to Wilmington’s claim, insofar as (1) constitutional
immunity is not at issue in this case, and (2) the federal government’s general “use” of
the City’s stormwater management program is not the relevant consideration (for
38
which there is no evidence in any event). Rather, the issue here is whether the City’s
fees are “based on some fair approximation of the proportionate contribution of the
property or facility to stormwater pollution (in terms of quantities of pollutants, or
volume or rate of stormwater discharge or runoff from the property or facility).” 33
U.S.C. § 1323(c)(1)(A). As explained above, Wilmington’s assessed fees — for which it
seeks a judgment here — are not based on some fair approximation of the government’s
proportionate contribution to stormwater pollution.
If anything, Brock’s explanation of Massachusetts demonstrates the problems with
Wilmington’s methodology, at least vis-à-vis its money-mandating claim in this case.
As noted above, the D.C. Circuit in Brock highlighted that “the measurement method
employed” in Massachusetts “does bear a fair relationship to the benefit: bigger planes
are more expensive for the federal safety system to accommodate.” 796 F.2d at 485–86
(noting that, in Massachusetts, “the amount of the fee was based on the size and type of
aircraft, but not the aircraft’s actual use of the airways or the facilities and services
supplied by the United States”). In contrast, Wilmington presented no evidence
explaining the relationship between the size and nature of the Properties and their
proportionate contribution to stormwater pollution — and that is precisely the type of
evidence the Federal-Facilities Section requires in order for the government to be on the
hook for the service charges at issue. Viewed through the prism of Massachusetts,
Wilmington’s service charges would be akin to the government charging fees based not
on the verified size and type of aircraft, but rather on a mere listing of aircraft, imported
from a third party without verification, that may or may not accurately reflect the
aspects of the aircraft generating the charges. This Court cannot find such charges
payable pursuant to 33 U.S.C. § 1323.
D. The City’s Fee Adjustment Process Does Not Qualify as a “Local
Requirement” for Purposes of 33 U.S.C. § 1323(a)
Since the outset of this case, Wilmington repeatedly has argued that the
government cannot contest the City’s stormwater charges because the government did
not challenge the charges through the City’s appeal process. The Court consistently has
rejected that argument. See Wilmington I, 136 Fed. Cl. at 631–33 (rejecting Wilmington’s
arguments that (1) Section 1323(a) compels the government to file an appeal, and (2) the
exhaustion doctrine prevents the government from raising in litigation any arguments it
could have raised in that administrative appeal); Wilmington II, 152 Fed. Cl. at 379–80
(rejecting Wilmington’s argument that the government should be precluded from
arguing at trial that the Properties contain wetlands because the government never
sought lower stormwater charges through the City’s appeal process). At trial,
Wilmington nevertheless continued to assert that its charges must be presumed
reasonable because the government did not file a fee adjustment application. Tr. 193:8–
39
12. In its response brief, Wilmington once again advances the same position, with
equally unpersuasive arguments. Pl. Resp. at 38–42.
As this Court already has explained, Wilmington’s permissive administrative
appeal process, which allows property owners to appeal only future charges — and
only after all assessed fees, no matter how unreasonable, have been paid to the City —
does not cloak its stormwater charges in per se, statutory reasonableness for the
purposes of the Federal-Facilities Section. Nor for that matter is the appeal process a
“requirement[]” to which the government must adhere pursuant to 33 U.S.C. § 1323(a).
The statute’s plain language, case law interpreting the statute, and even the
statute’s legislative history all mandate rejection of Wilmington’s argument. The Court
evaluates each of these before turning to Wilmington’s arguments.
We begin with the statute’s text. Section 1323(a) instructs agencies to comply
with “local requirements . . . respecting the control and abatement of water pollution.”
33 U.S.C. § 1323(a). As an initial matter, a straightforward reading indicates that
Wilmington’s appeal process does not govern, does not involve, and thus is not
“respecting the control or abatement of water pollution.”34 The Wilmington Code
describes the appeal process as one property owners can undertake to dispute the
amount of their charges. Wilmington Code § 45-53(d)(7). Appealing a charge,
self-evidently, has nothing to do with “the control and abatement of water pollution.”
See id. (describing the following grounds for appeal: “(1) the calculation of the storm
water charge; (2) the assigned storm water class; (3) the assigned tier, if applicable; and
(4) the eligibility for a credit”).
Although the case law interpreting the term “requirements” in Section 1323 is
sparse, it supports defining “requirements” in a way that does not include
Wilmington’s appeal process. The Supreme Court, for example, in EPA v. California,
34Wilmington cites Lamar, Archer & Cofrin, LLP v. Appling, 584 U.S. --, 138 S. Ct. 1752, 1759
(2018), for the following dictionary definition of “respecting”: “in view of: considering; with
regard or relation to: regarding, concerning.” Pl. Resp. at 38. That definition does not help
Wilmington, as the City does not explain — and the Court does not see — how Wilmington’s
appeal process is “regarding” or “concerning” the control or abatement of water pollution.
Indeed, the City then references “the illustrative fee adjustments appeal example in
Wilmington’s [Storm Water Credits and Fee Adjustments Appeals] Manual,” in which a
hypothetical commercial property owner “obtained a revised runoff coefficient.” Id. The City
argues that this illustration shows that a property owner could “[r]eplace more of asphalt or
gravel with grass, and the City would reward the efforts to further limit stormwater pollution
with still lower stormwater charges.” Id. This example, however, merely clarifies that
Wilmington’s appeal process is both optional (rather than a “requirement”) and a process
respecting the revision of prospective charges, not respecting stormwater pollution.
40
adopted the view of the United States Court of Appeals for the Ninth Circuit that
“requirements” refers “‘simply and solely to substantive’ standards, to effluent
limitations and standards and schedules of compliance.” 426 U.S. at 215 (quoting
California ex rel. State Water Res. Control Board v. EPA, 511 F.2d 963, 969 (9th Cir. 1975)).35
Under this definition, Wilmington’s appeal process is not a “requirement.”
The few district courts that have addressed the issue also read the term
“requirements” like this Court reads it. See In re ACF Basin Water Litigation, 467 F. Supp.
3d 1323, 1337 (N.D. Ga. 2020) (“The Supreme Court has stated that the requirements
that can be enforced against federal agencies under [the Federal-Facilities Section] are
limited to objective state standards of control, such as effluent limitations in permits,
compliance schedules and other controls on pollution applicable to dischargers.” (citing
EPA, 426 U.S. at 215)); New York v. United States, 620 F. Supp. 374, 384 (E.D.N.Y. 1985)
(defining Clean Water Act “requirements” as “objective, administratively
predetermined effluent standard[s] or limitation[s] or administrative order[s] upon
which to measure the prohibitive levels of water pollution”); Kelley ex rel. Michigan v.
United States, 618 F. Supp. 1103, 1108 (W.D. Mich. 1985) (defining Clean Water Act
“requirements” as state statutes that “provide objective, quantifiable standards subject
to uniform application,” and holding that statutes making it unlawful to discharge into
state waters any substance that may become harmful to public welfare and providing
causes of action for that behavior were not Clean Water Act “requirements”).36
35As discussed in Section I.B, supra, Congress amended the Clean Water Act in 1977 in response
to EPA v. California. Nevertheless, Congress did not alter the Court’s definition of
“requirements” — the amended statute did not, and does not, expressly define “requirements.”
See New York v. United States, 620 F. Supp. 374, 382 (E.D.N.Y. 1985) (explaining that Congress did
not expand the definition of substantive requirements in the 1977 Amendments and that “to the
degree the Supreme Court’s ruling in EPA v. California . . . construed the substantive
‘requirements’ of § 313 to mean effluent limitations, such ruling was unaffected by the 1977
amendments enacted by Congress”). Wilmington’s appeal process also would not qualify as a
procedural requirement even under the examples in the statute’s legislative history; as cited
supra note 5, a 1977 Senate report listed several examples of “procedural provisions” covered by
“requirements,” none of which resembles the appeal process: “requirements to obtain
operating and construction permits, reporting and monitoring requirements, any provisions for
injunctive relief and such sanctions imposed by a court to enforce such relief, and the payment
of reasonable service charges.” S. Rep. No. 95-370, at 67.
36Wilmington did not cite any definition of “requirements,” under the Clean Water Act or any
other statute, or any case law, suggesting that Wilmington’s appeal process applies to the
federal government. The government, in contrast, bolsters its argument that the City’s appeal
process is not a “requirement” under the statute by citing cases that interpret the word
“requirements” as used in similar statutes; this Court agrees that none of the definitions of
41
Additionally, legislative history, though not dispositive, supports the idea that
Wilmington’s appeal process does not concern the control or abatement of water
pollution. As explained above, Congress amended the Clean Water Act in 1977 to
address the Supreme Court’s decision in EPA v. California, 426 U.S. 200 (1976), that the
statute as then-written did not require federal agencies to pay for permits. See supra
Section I.B. Wilmington thus correctly notes that the purpose of the 1977 Amendments,
in part, “was to ‘unequivocally’ subject ‘all Federal facilities and activities . . . to all of
the provisions of State and local pollution laws.’” Pl. Resp. at 18 (quoting S. Rep. No.
95-370, at 67 (1977), reprinted in 1977 U.S.C.C.A.N. 4326, 4392). But Wilmington’s
reliance upon legislative history is misplaced. First, such history cannot supplant the
plain meaning of the statute. Second, the Senate Report itself indicates that the 1977
Amendments were intended to subject federal facilities to procedural requirements
related to controlling pollution, such as “requirements to obtain operating and
construction permits, [and] reporting and monitoring requirements.” S. Rep. No. 95-
370, at 67. The government thus argues, and this Court agrees, that “a fee adjustment
process is not at all similar to those example procedural requirements” cited in the
Senate Report. Def. Mot. at 42.
Undaunted, Wilmington continues to push its twice-rejected thesis that the
government had to comply with the City’s appeal process. First, Wilmington again
argues that the appeal process qualifies as a statutory “requirement” that the
government is obligated to follow. Pl. Resp. at 39. Second, Wilmington asserts that
Delaware state law mandates exhaustion. Id. at 40. And third, Wilmington contends
that the government can pay the bills under protest and then sue for their return. Id. at
9. The Court addresses each argument seriatim.
First, Wilmington argues that the United States is subject to Wilmington’s appeal
process because that process is “easily understood as a procedural requirement” and
the Clean Water Act subjects the federal government to local “administrative
authority.” Pl. Resp. at 39 (quoting 33 U.S.C. § 1323(a)).37 As discussed above, the
“requirements” in those cases, even if applied to the Clean Water Act, would include
Wilmington’s appeal process. See Def. Mot. at 41–43 (citing Hancock v. Train, 426 U.S. 167, 187
(1976) (Clean Air Act); Fla. Dep’t of Env’t Regul. v. Silvex Corp., 606 F. Supp. 159, 162–63 (M.D.
Fla. 1985) (RCRA); Romero-Barcelo v. Brown, 643 F.2d 835, 855 (1st Cir. 1981), rev’d on other
grounds sub nom. Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) (Noise Control Act)). In each
of the cited cases, the court did not interpret the word “requirements” to include anything
analogous to Wilmington’s appeal process.
37“Each department, agency, or instrumentality . . . shall be subject to, and comply with, all
Federal, State, interstate, and local requirements, administrative authority, and process and
42
statute’s language, as well as case law interpreting its language, foreclose this
argument.
Second, Wilmington attempts to support its exhaustion argument on state law
grounds. Pl. Resp. at 40 (“[T]he United States does not deny that Delaware requires
exhaustion from its property owners.”). It is irrelevant, though, whether Delaware law
requires property owners to exhaust administrative remedies. As noted in Wilmington I,
“[w]here ‘Congress has not clearly mandated the exhaustion of particular administrative
remedies, the exhaustion doctrine is not jurisdictional, but is a matter for the exercise of
sound judicial discretion.’” 136 Fed. Cl. 628, 632–33 (emphasis added) (quoting Maggitt
v. West, 202 F.3d 1370, 1377 (Fed. Cir. 2000)). In this case, neither Congress nor the
Wilmington Code has mandated exhaustion. See 33 U.S.C. § 1323; Wilmington Code
§ 45-53(d)(7).
Mandating exhaustion thus falls to judicial discretion — and sound judicial
discretion prevents mandating exhaustion in this case. For the reasons discussed above
as well as in Wilmington I, Wilmington’s appeal process is not reasonable. Section 45-
53(d)(7) of the Wilmington Code applies only prospectively and does not allow
adjustments of prior billing cycles. JSUF ¶ 112; Tr. 71:1–5, 102:23–103:4; JX 40 at
WILM0012020. And before Wilmington even considers adjusting a property’s
stormwater charges, the property owner must pay all outstanding charges. Tr. 103:5–
15. Thus, as Judge Williams noted in Wilmington I, pursuing Wilmington’s appeal
process could require the United States to pay unreasonable charges — something the
language of Section 1323(c) expressly precludes. 136 Fed. Cl. at 633; 33 U.S.C. § 1323(c).
Third, Wilmington posits that property owners should pay charges “under
protest” and then “bring[] an action against the city to recover [them] back.” Pl. Resp.
at 9 (first quoting Murphy v. City of Wilmington, 11 Del. 108, 138 (1880); and then citing
Mr. Kleen, LLC v. New Castle Cnty. Dep’t of Special Servs., 2014 WL 4243562 (Del. Sup. Ct.
Aug. 19, 2014)). Even if Delaware law provides for such an option — something the
Court accepts only for the sake of argument here — this does not help Wilmington’s
case because it means that property owners who have been charged unreasonable sums
have recourse, if at all, only as a plaintiff claiming a refund and not through
Wilmington’s appeal process. Indeed, even according to the City, the government’s
only remedy here with respect to past fee assessments is to pay the charges and then
sue for a refund. Such an approach ignores the terms of the Clean Water Act which
require the federal government only to pay charges where the statute commands it.
Wilmington cannot use its appellate process to force the government to pay and sue for
sanctions respecting the control and abatement of water pollution[.]” 33 U.S.C. § 1323(a) (emphasis
added).
43
a refund as if the federal government itself were a plaintiff-claimant in this Court (or
any other). Again, Section 1323(c) does not allow the government to pay unreasonable
charges that do not comply with the statute, and nothing in the Federal-Facilities
Section requires the government to pay first and seek a refund later. See Nat’l Fed’n of
Ind. Bus. v. Dep’t of Lab., Occupational Safety & Health Admin., 595 U.S. --, 2022 WL 120952,
at *7 (Jan. 13, 2022) (Gorsuch, J., concurring) (“Congress does not usually ‘hide
elephants in mouseholes’” (quoting Whitman v. Am. Trucking Ass’ns., Inc., 531 U.S. 457,
468 (2001))).
Finally, even if this Court were to interpret the fee-adjustment process as
generally mandatory, the government would not be required to exhaust it here.
Wilmington concedes that the fee-adjustment process cannot provide the government’s
requested relief — retroactive adjustment of past charges. JX 40 at WILM0012020
(“There will be no retroactive adjustments for prior billing periods.”); Tr. 191:15–25.
And exhaustion is not mandatory when an agency cannot grant the requested relief. Cf.
McCarthy v. Madigan, 503 U.S. 140, 146–48 (1992) (describing a situation in which a
federal agency “lack[s] authority to grant the type of relief requested” as a “set[] of
circumstances in which the interests of the individual weigh heavily against requiring
administrative exhaustion”), cited in Fredericks v. United States, 125 Fed. Cl. 404, 411–12
(2016).
Further, the government would be forced to pay all outstanding charges before
beginning the fee-adjustment process — even unreasonable charges that by law may
not be imposed in the first place on the federal government. JX 40 at WILM0012021
(“All storm water charges that are outstanding at the time of the application must be
paid in full prior to the city commencing the technical review.”); Tr. 103:5–15, 194:5–
195:5. The government therefore has no remedy under Wilmington’s appeal process to
dispute past unreasonable charges without paying them first, something forbidden by
Section 1323, as the Court explained above.
Wilmington contends that United States v. Testan, 424 U.S. 392 (1976), “derail[s]”
this point. Pl. Resp. at 40–41.38 The legislative scheme at issue in Testan and that at
38 The entirety of Wilmington’s argument, which is difficult to track, is as follows:
The United States’ first argument [that the appeal process is
inadequate because it would not grant retroactive adjustment of
past charges] is derailed by United States v. Testan. There, the
Supreme Court explained that because the respondents “have an
administrative avenue for prospective relief available to them
under the elaborate and structured provisions of the Classification
44
issue here, however, are as different as proverbial apples and oranges, and Testan’s
holding does not support Wilmington’s arguments. At issue in Testan was a federal
scheme governing federal employee pay and via which Congress circumscribed the
remedies available to federal employees for incorrect payments. 424 U.S. at 403–04
(“The situation, as we see it, is not that Congress has left the respondents remediless, as
they assert, for their allegedly wrongful civil service classification, but that Congress
has not made available to a party wrongfully classified the remedy of money damages
through retroactive classification.”). In this case, in contrast, Wilmington is seeking
damages which must qualify under the Clean Water Act’s limited waiver of sovereign
immunity. Am. Compl. ¶ 3 (“The United States . . . continues to deny[] its obligation
under the Clean Water Act, 33 U.S.C. § 1323(a), to pay Wilmington reasonable service
charges for stormwater management assessed against its properties located in
Wilmington”).
Here, accordingly, the question is whether the Clean Water Act mandates the
government to pay Wilmington’s invoices. Wilmington’s contention that the
government could have challenged the charges in the City’s appeal process is spurious,
as the government notes, Def. Mot. at 44, because such a challenge would not affect
charges already assessed which may have violated the Clean Water Act. If Congress
had circumscribed the government’s remedies in Federal-Facilities Section cases — by,
say, declaring all invoices assessed under that section presumptively proper and subject
only to challenge via municipal appeal processes — this would be a different case. In
the absence of such limiting language, however, the government is permitted to defend
against the City’s charges on the grounds that the charges do not comply with the Clean
Water Act.
VI. THE UNITED STATES DOES NOT OWE INTEREST TO WILMINGTON
Wilmington claims the government owes the City interest accrued over the past
decade due to the government’s refusal to pay Wilmington’s outstanding stormwater
charges. Compl. at 10 (requesting $1,185,929.24 in interest). By the time of trial,
Wilmington had assessed the government over $3.3 million in interest. Am. Compl. at
14 (requesting $3,360,441,32 in interest). In Wilmington I, the government moved for
Act . . . ,” they “are not entirely without remedy. They are without
the remedies in the Court of Claims of retroactive classification . . .
to which they assert they are entitled. Additional remedies of this
kind are for the Congress to provide and not for the courts to
construct.” United States v. Testan, 424 U.S. 392, 403–04 (1976).
Pl. Resp. at 40–41.
45
partial judgment on the pleadings as to the interest issue, arguing that Wilmington
could not recover interest as a matter of law because Section 1323 does not explicitly
waive sovereign immunity to recover interest. 136 Fed. Cl. at 630. The Court declined
to resolve the interest question at that time because it “raise[d] a thorny issue of first
impression in this Court.” Id. at 634.
The Court today holds that Wilmington cannot claim interest from the
government for the unpaid Clean Water Act charges even if the government were liable
to Wilmington for the principal charges it assessed.
This Court can only award interest “under a contract or an Act of Congress
expressly providing for payment thereof.” 28 U.S.C. § 2516(a). The Supreme Court also
has articulated a general “no-interest rule”: “In the absence of express congressional
consent to the award of interest separate from a general waiver of immunity to suit, the
United States is immune from an interest award.” Library of Congress v. Shaw, 478 U.S.
310, 314 (1986). In Shaw, the Court held that a litigant who was entitled under statute39
to a reasonable attorney’s fee and costs after winning an employment suit against the
federal government was not entitled to interest on the attorney’s fee because the statute
did not separately waive sovereign immunity for interest. Id. at 311, 323. The Court
noted that this no-interest rule had been recognized “[f]or well over a century.” Id. at
316. The Court further rejected plaintiff’s contention that the statute waived sovereign
immunity from interest “by equating the United States’ liability to that of a private
party.” Id. at 319. Importantly, the Court noted that neither the statute nor legislative
history references interest; such “congressional silence d[id] not permit [the Court] to
read the provision as the requisite waiver of the Government’s immunity with respect
to interest.” Id.The Federal Circuit has repeatedly expanded upon the no-interest rule, noting,
for example, that “the waiver for sovereign immunity for interest must be distinct from
a general waiver of immunity for the cause of action resulting in the damages award
against the United States.” Marathon Oil Co. v. United States, 374 F.3d 1123, 1126–27
(Fed. Cir. 2004). Such waivers, the Federal Circuit held, “‘must be unequivocally
expressed,’ or a court must infer that Congress did not intend to create a waiver.” Id. at
1127 (quoting United States v. Mitchell, 445 U.S. 535, 538 (1980)). In Marathon Oil, the
Federal Circuit held that oil companies who successfully sued the United States for a
breach of contract were not entitled to post-judgment interest because the statute under
which they sued did not contain a separate, unambiguous sovereign immunity waiver
39The statute at interest in Shaw made the government “liable ‘the same as a private person’ for
‘costs,’ including ‘a reasonable attorney’s fee.’” 478 U.S. at 317–18 (quoting 42 U.S.C. § 2000e–
5(k)).
46
for interest. 374 F.3d at 1125. The statute at issue “require[d] the government to pay
post-judgment interest on ‘all final judgments against the United States in the United
States Court of Appeals for the Federal Circuit,” id. at 1126 (quoting 28 U.S.C.
§ 1961(c)(2)), but “trigger[ed] a chain of cross[-]references that link[ed] four distinct
statutory provisions,” id. at 1128. Because the interaction between the cross-referenced
statutes was “subject to plausible readings under which Congress has not waived
sovereign immunity for post-judgment interest,” the Federal Circuit concluded that
“Congress has not unequivocally excluded the narrower reading of the relevant
statutes” and held that plaintiffs could not recover interest. Id. at 1132. The Federal
Circuit continues to invoke and apply the no-interest rule.40
Shaw, Marathon Oil, and 28 U.S.C. § 2516(a) all mandate that the government is
only liable for interest when the law at issue contains an express waiver of sovereign
immunity for interest. Nowhere in the Federal-Facilities Section is there such a waiver.
Thus, the government would not be liable for interest even if Wilmington’s charges
qualified as “reasonable service charges” under the statute.
In response, Wilmington argues that the following sentence in Section 1323(a)
waives sovereign immunity for interest regardless of the no-interest rule: “This
subsection shall apply notwithstanding any immunity of such agencies, officers, agents, or
employees under any law or rule of law.” Pl. Resp. at 43 (quoting 33 U.S.C. § 1323(a)).
Wilmington claims that this sentence waives the no-interest rule because “there is no
plausible way to interpret ‘notwithstanding any immunity . . . under any law or rule of
law’ to exclude interest.” Pl. Resp. at 44 (quoting 33 U.S.C. § 1323(a)).
The Court disagrees. The sentence to which Wilmington points certainly
indicates that federal instrumentalities cannot use “any immunity” to escape the
provisions of Section 1323. But no provision provides for interest. Section 1323 does
40See, e.g., Shell Oil Co. v. United States, 7 F.4th 1165, 1174 n.3 (Fed. Cir. 2021) (reiterating that
interest cannot be recovered in a suit against the United States without an express waiver);
Clay v. McDonough, 2021 WL 4538675, at *2 (Fed. Cir. Oct. 5, 2021) (per curiam) (rejecting
plaintiff’s claim that he is entitled to interest because “‘interest cannot be recovered in a suit
against the Government in the absence of an express waiver of sovereign immunity from an
award of interest’ . . . and [plaintiff] has not identified any such waiver” (quoting Shaw, 478 U.S.
at 311)); Athey v. United States, 908 F.3d 696, 708–09 (Fed. Cir. 2018) (affirming Court of Federal
Claims’ denial of interest on Lump Sum Pay Act and Back Pay Act pursuant to the no-interest
rule); Bitzer v. Shinseki, 429 F. App’x 984, 986 (Fed. Cir. 2011) (“Moreover, Smith [v. Principi, 281
F.3d 1384 (Fed. Cir. 2002)] . . . unequivocally rejected the argument that no matter how
compelling the equities or public policy argument in favor of awarding interest, the Department
[of Veterans Affairs] is without authority to do so in the absence of express statutory
language”).
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not mention interest, so the general waiver of immunity language is of no help to
Wilmington. See Lane v. Pena, 518 U.S. 187, 192 (1996) (“A waiver of the Federal
Government’s sovereign immunity must be unequivocally expressed in statutory text,
and will not be implied.” (citations omitted)). In short, the “subsection” may “apply”
notwithstanding any assertion of immunity, but nothing in that subsection provides for
the payment of interest.
The Federal Circuit has held that statutory language far more helpful to a
plaintiff than that of the Clean Water Act does not permit the recovery of interest. In
Smith v. Principi, 281 F.3d 1384 (Fed. Cir. 2002), upon which the government relies, see
Def. Reply at 16, the Federal Circuit addressed a statute that provided that the
government could “provide such relief on account of such error as the Secretary
determines equitable, including the payment of moneys to any person whom the
Secretary determines is equitably entitled to such moneys.” Smith, 281 F.3d at 1387(quoting 38 U.S.C. § 503). The Federal Circuit concluded that such language did not
waive sovereign immunity for the purposes of collecting interest. Id. at 1387. Section
1323 contains no language regarding interest that would make it more helpful to
Wilmington than the language at issue in Smith was helpful to the plaintiff in that case.
Indeed, if anything, Section 1323 makes clear, in defining the charges for which
sovereign immunity is waived, that interest is not available. Accordingly, Smith all but
precludes interpreting Section 1323 as waiving sovereign immunity for interest.
Wilmington’s other arguments similarly fail to overcome the no-interest rule.
The government correctly observes that “[t]he plain language of ‘service charges’
encompasses charges for service — not charges for ‘the time value of money and loss of
use of amounts not paid when they are due.’” Def. Mot. at 47 (quoting Am. Airlines,
Inc. v. United States, 77 Fed. Cl. 672, 684 (2007)). In response, Wilmington argues that
“Congress statutorily defin[ed] . . . ‘reasonable service charge’ in Section 1323(c)(1) to
include a qualifying ‘fee, charge, or assessment’ even if ‘denominated a tax,’ which
supplants any alternative ‘typical’ meanings.” Pl. Resp. at 43 (citing Van Buren v. United
States, 593 U.S. --, 141 S. Ct. 1648, 1657 (2021)). This argument fails. Even if “service
charge” were defined broadly, as Wilmington urges, the statute nowhere mentions
interest — and the “fee, charge, or assessment” language Wilmington points to is
plainly not a waiver of immunity for a plaintiff to collect interest on any amounts owed.
See, e.g., Shaw, 478 U.S. at 314.
Wilmington also takes a stab at a negative implication argument, noting that
Section 1323(a) does not explicitly bar recovery of interest like the Federal Tort Claims
Act does. Pl. Resp. at 44–45; see also 28 U.S.C. § 2674 (“The United States shall be liable
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. . . in the same manner and to the same extent as a private individual . . . but shall not
be liable for interest prior to judgment . . . .”).
Wilmington apparently fails to grasp that the no-interest rule means exactly that.
A statute must explicitly authorize interest for a plaintiff to collect it; statutes do not
need to explicitly preclude interest because that is the default setting. As the
government correctly responds, “[t]he question is not whether Congress prohibited
interest under the [Clean Water Act], but whether Congress expressly and affirmatively
allowed it.” Def. Rep. at 17 (emphasis added) (first citing Marathon Oil, 374 F.3d at 1126;
then citing Shaw, 478 U.S. at 314).41
Finally, Wilmington argues that a Supreme Court case from 1921, Missouri Pacific
Railroad Company v. Ault, is “more instructive” than the no-interest rule reinforced by
Shaw. Pl. Resp. at 46 (citing Missouri Pac. R.R. Co. v. Ault, 256 U.S. 554 (1921)). This
argument fails to overcome the no-interest rule. First, Missouri Pacific Railroad Company
was decided over a century ago; to the extent the case conflicts with either Shaw or 28
U.S.C. § 2516(a), the latter case and statute are controlling.42
This Court reaffirms that absent an express statutory waiver of sovereign
immunity for a plaintiff to charge or claim interest, a party cannot succeed on a claim of
interest against the federal government. Blueport Co., LLP v. United States, 71 Fed. Cl.
768, 780 (2006) (explaining that plaintiff’s “‘waiver-through-statutory construction’
arguments” demonstrated that the statutory language at issue was “at best ambiguous
[and thus] not enough to constitute a waiver of sovereign immunity” (citing Lane, 518
U.S. at 195)). Because the Clean Water Act lacks such a waiver of sovereign immunity,
Wilmington cannot recover interest from the United States in this case even if it were
entitled to the principal charges.
VII. CONCLUSION
The bottom line is that the statute at issue, Wilmington’s litigation strategy, and
the evidence presented at trial collectively tie the Court’s hands. Section 1323 requires
that stormwater charges assessed against federal properties be based upon their
proportional contribution to stormwater pollution. At trial, however, Wilmington
41Contrary to Wilmington’s contention, this Court did not previously “acknowledge[]” that the
Clean Water Act lacks a “prohibit[ion] of interest.” Pl. Resp. at 45 (citing Wilmington I, 136 Fed.
Cl. at 635).
42Additionally, Shaw does not cite or address Missouri Pacific, which indicates that the Court did
not recognize Missouri Pacific to be a case about interest claims against the government.
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failed to provide any evidence linking its charges at issue to the Properties’ contribution
to Wilmington’s stormwater pollution.
For the above reasons, Wilmington has failed to prove that the charges it
assessed the government qualified as “reasonable service charges” pursuant to the
Federal-Facilities Section and, accordingly, the government’s RCFC 52(c) motion for
judgment on partial findings is GRANTED. The Clerk is directed to enter judgment for
defendant, the United States.
IT IS SO ORDERED.
s/ Matthew H. Solomson
Matthew H. Solomson
Judge
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