## Facts

- Several suburban water and sanitation providers near Denver entered intergovernmental agreements with the Denver Water Board to share costs for a regional water-supply project focused on the proposed Two Forks Dam and Reservoir, including environmental permitting expenses.
- The parties funded preparation of a system-wide environmental impact statement for the metropolitan water-supply system; the suburban entities paid about 80% of the costs.
- The Two Forks site on the South Platte River was selected for a large dam and reservoir, requiring a Clean Water Act § 404 permit from the U.S. Army Corps of Engineers to discharge dredged or fill material into waters of the United States.
- A permit application was submitted, but the Environmental Protection Agency exercised its Clean Water Act § 404(c) authority to prohibit or restrict the permit based on findings of unacceptable adverse effects and the existence of less environmentally damaging practicable alternatives.
- The suburban entities asserted that the veto improperly used the Clean Water Act to control water-supply planning and water quantity rather than water quality and sought judicial review of the veto and the agency process.
- Denver, which held key rights and interests necessary to build the project, did not join the suit, and the record did not show Denver’s present intent to proceed with construction.

## Issues

1. Whether the suburban water providers had Article III standing—particularly redressability—to challenge EPA’s § 404(c) veto when the indispensable project proponent (Denver) was not a party and had no demonstrated current commitment to build the dam.
2. If standing existed, whether EPA’s § 404(c) veto exceeded statutory authority, violated limits designed to preserve state water allocation authority, was arbitrary and capricious under the APA, or denied due process due to alleged bias or prejudgment.

## Decision

- The court granted defendants’ motion for summary judgment and dismissed the action for lack of Article III standing.
- The court held plaintiffs failed to establish redressability because vacating the veto would not likely result in construction of the dam absent Denver’s participation and demonstrated intent to proceed.
- In alternative merits discussion, the court indicated EPA’s veto was within § 404(c) authority, was not shown to violate state water-allocation protections, was not arbitrary or capricious, and did not deny due process.

## Legal Principles

- Article III standing requires redressability; a plaintiff must show a favorable judgment is likely to remedy the alleged injury, not merely that it could do so.
- Redressability is lacking where the challenged agency action is not the practical determinant of whether a project will occur because an indispensable third party controls essential rights and is not committed to proceed.
- Under Clean Water Act § 404(c), EPA may restrict or prohibit a Corps permit if the discharge will have an unacceptable adverse effect on protected resources; the agency may consider fishery and recreational impacts and practicable alternatives under the § 404(b)(1) Guidelines.
- Denial of a federal fill permit for environmental reasons does not, by itself, constitute federal reallocation of state-law water rights.

## Conclusion

The court dismissed the suburban water providers’ challenge to EPA’s Two Forks veto because the plaintiffs could not show that setting aside the veto would likely lead to construction of the project without Denver’s participation, defeating redressability and Article III standing.


Alameda Water & Sanitation Dist. v. Reilly, 930 F. Supp. 486 (D. Colo. 1996)