## Facts

- Indiana authorized riverboat gambling in Harrison County after local approval and state legislation, and the Indiana Gaming Commission (IGC) regulated licensing.
- The IGC issued Caesars a Certificate of Suitability/Stability after finding the proposal complied with state law and would have a positive economic impact.
- Caesars applied to the U.S. Army Corps of Engineers for a Clean Water Act § 404 permit to place fill in the Ohio River to build a permanent mooring facility for a riverboat casino.
- The Corps’ district engineer conducted a public-interest review under Corps regulations, treated economics as a relevant factor, and found no adverse impact on those factors while identifying benefits such as jobs and tax revenues.
- The Corps issued the § 404 permit in 1998.
- Environmental and citizen plaintiffs challenged the permit, arguing the Corps failed to adequately consider gambling-related socio-economic harms (e.g., problem gambling, crime, alcohol abuse, strain on social services) and failed to meaningfully evaluate negative economic effects (e.g., displacement of existing businesses and net losses when social costs are included).

## Issues

1. Whether the Corps acted arbitrarily and capriciously under the APA by failing to consider or adequately weigh gambling-related socio-economic harms and negative economic impacts in its § 404 public-interest review.
2. Whether the administrative record showed a rational basis for the Corps’ decision to issue the permit under the deferential APA standard.

## Decision

- The court denied plaintiffs’ motion for summary judgment and granted the Corps’ motion for summary judgment.
- The court held the Corps’ permit decision was not arbitrary, capricious, an abuse of discretion, or otherwise contrary to law under the APA.
- The court concluded the Corps’ public-interest review satisfied regulatory requirements even without a detailed quantification of alleged gambling-related social costs.
- The § 404 permit remained in effect.

## Legal Principles

- Under APA arbitrary-and-capricious review, a court does not substitute its judgment for the agency’s; it asks whether the agency considered relevant factors and articulated a rational connection between facts found and the choice made.
- Corps § 404 public-interest review regulations require consideration of a broad range of factors (including economic and social considerations) but do not mandate a particular methodology or a formal cost-benefit analysis of asserted social harms.
- An agency’s qualitative recognition of a category of concerns (including public comments) can satisfy the duty to consider relevant factors; disagreement with the agency’s weighing of those factors is generally insufficient to show arbitrariness.
- State and local determinations may provide relevant context supporting the rationality of a federal permitting decision, though they are not dispositive of the federal agency’s duties.

## Conclusion

The court upheld the Corps’ issuance of a Clean Water Act § 404 permit for a riverboat-casino mooring facility, holding that the Corps adequately considered economic and socio-economic factors in its public-interest review and that plaintiffs’ challenges largely disputed the weight assigned to those factors rather than showing an APA violation.


Hoosier Env't Council, Inc. v. U.S. Army Corps of Eng'rs, 105 F. Supp. 2d 953 (S.D. Ind. 2000)