throbber
United States Court of Appeals
` For the Eighth Circuit
`___________________________
`
`No. 20-2102
`___________________________
`
`Agred Foundation
`
`lllllllllllllllllllllPlaintiff - Appellant
`
`v.
`
`The United States Army Corps of Engineers; The Honorable Mark T. Esper, in his
`official capacity as Secretary of the United States Army
`
`lllllllllllllllllllllDefendants - Appellees
` ____________
`
`Appeal from United States District Court
`for the Western District of Arkansas - Texarkana
` ____________
`
` Submitted: February 18, 2021
`Filed: July 8, 2021
`____________
`
`
`Before SMITH, Chief Judge, WOLLMAN and STRAS, Circuit Judges.
`____________
`
`SMITH, Chief Judge.
`
`The AGRED Foundation (AGRED) seeks a declaratory judgment regarding its
`rights and obligations under a written agreement with the United States. The United
`States Army Corps of Engineers (USACE), acting on behalf of the United States,
`moved to dismiss for lack of subject matter jurisdiction on the grounds that AGRED
`
`

`

`lacks standing. The district court1 dismissed AGRED’s claim after concluding that its
`injury was not caused by the USACE. We affirm.
`
`I. Background
`Lake Erling is a man-made reservoir located in Lafayette County, Arkansas.
`International Paper Company (IP) built Lake Erling in 1956 as a water source for its
`paper mill. The lake, which spans approximately 7,100 acres, covers some land
`owned by the United States. In 1952, before building the lake, IP entered into an Act
`of Exchange with the United States.2 The Act of Exchange granted IP the right to
`flood the government’s land, with several conditions. In relevant part, the Act of
`Exchange (1) prohibited IP from placing restrictions on the public’s use of Lake
`Erling and (2) required IP to allow public access to the lake over IP’s land. The Act
`of Exchange stated:
`
`It is understood and agreed that International Paper Company
`shall place no restrictions upon the public use of the water area of the
`industrial water supply reservoir located on its lands either for flood
`control, recreational, wild life, or fishing and hunting purposes; and that
`
`1The Honorable Susan O. Hickey, Chief Judge, United States District Court for
`the Western District of Arkansas.
`
`2The United States entered into the Act of Exchange pursuant to 33 U.S.C.
`§ 558b, which provides:
`
`In any case in which it may be necessary or advisable in the execution
`of an authorized work of river and harbor improvement to exchange land
`or other property of the Government for private lands or property
`required for such project, the Secretary of the Army may, upon the
`recommendation of the Chief of Engineers, authorize such exchange
`upon terms and conditions deemed appropriate by him, and any
`conveyance of Government land or interests therein necessary to effect
`such exchange may be executed by the Secretary of the Army . . . .
`
`-2-
`
`

`

`it will permit and grant access over its lands adjoining the water area
`over and through routes to be agreed upon and designated by the
`Company and the United States.
`
`Compl., Ex. A, at 7, Agred Found. v. U.S. Army Corps of Eng’rs, No. 4:18-cv-04136-
`SOH (W.D. Ark. 2018), ECF No. 1-1. IP satisfied its obligations under the Act of
`Exchange, allowing public access to the lake and maintaining public access points
`over its land.
`
`This state of affairs continued until 2013, when IP conveyed its interest in the
`land beneath Lake Erling to AGRED. As part of the conveyance, AGRED agreed to
`assume all of IP’s obligations and duties under the Act of Exchange. AGRED and the
`United States entered into a Memorandum of Understanding (“Memorandum”)
`regarding routes of public access to the lake. For example, the parties stipulated that
`the boat launch ramp at one end of the lake would continue to be a route of public
`access to Lake Erling and that designating the ramp as a route of public access
`“fulfills the parties’ designation obligations in the Act of Exchange.” Compl., Ex. D,
`at 2, Agred Found. v. U.S. Army Corps of Eng’rs, No. 4:18-cv-04136-SOH (W.D.
`Ark. 2018), ECF No. 1-4. The Memorandum did not address charging fees for other
`access to the lake.
`
`Once AGRED assumed ownership of Lake Erling, it began charging fees for
`certain access to the water. This included fees for adjoining landowners to have
`private access to the lake, fees for permits to build or maintain structures along the
`water, and fees for boat and trailer decals. In March 2016, Friends of Lake Erling
`Association (FOLEA), a group of individuals who either live near or use the lake,
`sued AGRED for declaratory and injunctive relief in the Lafayette County Circuit
`Court. FOLEA sought to prevent AGRED from charging fees related to accessing
`Lake Erling. In June 2016, the state court granted FOLEA’s motion for summary
`judgment. It agreed with FOLEA that AGRED’s fee-generating program constituted
`
`-3-
`
`

`

`an impermissible restriction on the public’s access to the lake pursuant to the Act of
`Exchange and permanently enjoined AGRED from charging fees to access the lake.
`AGRED appealed, but the Arkansas Court of Appeals dismissed the appeal in
`October 2017 for lack of a final order and remanded the case for further
`consideration. See AGRED Found. v. Friends of Lake Erling Ass’n, 2017 Ark. App.
`510 (2017). The state court litigation is ongoing.3
`
`Shortly after FOLEA sued AGRED, but prior to the state court’s injunction,
`AGRED contacted the United States, requesting that it publicly recognize that
`AGRED is entitled to charge fees under the terms of the Act of Exchange. The United
`States, acting through the USACE, responded in August 2016 that it takes no position
`on the issue. It explained that “the Act of Exchange neither authorizes nor prohibits
`fee-setting and fee-collecting”; that “the [Memorandum], like the Act of Exchange,
`is silent on fee-setting and fee-collecting”; and that “[b]oth instruments speak for
`themselves[] as to what they include and what they omit.” Compl., Ex. E, at 1, 2,
`Agred Found. v. U.S. Army Corps of Eng’rs, No. 4:18-cv-04136-SOH (W.D. Ark.
`2018), ECF No. 1-5. It also noted that “fee-setting and fee-collecting by [AGRED]
`are not matters within the [USACE’s] purview.” Id. at 2.
`
`Disappointed by the USACE’s response, AGRED filed this action against the
`USACE, seeking a declaratory judgment that its fee-generating program is consistent
`with its rights under the Act of Exchange. The USACE moved to dismiss for lack of
`subject matter jurisdiction on the grounds that (1) AGRED lacks standing to sue,
`(2) the USACE is entitled to sovereign immunity, and (3) the Declaratory Judgment
`Act is not applicable to this case. The USACE maintained that it takes no position
`regarding whether AGRED is permitted to charge fees under the Act of Exchange.
`
`3The Lafayette County Circuit Court again granted summary judgment to
`FOLEA in May 2020. AGRED filed a second appeal, which is pending.
`-4-
`
`

`

`The district court granted the USACE’s motion to dismiss, concluding that it
`lacked subject matter jurisdiction over AGRED’s claim because AGRED does not
`have standing.4 The district court held that AGRED had suffered an injury but that the
`injury alleged—being sued in state court by FOLEA—was not caused by the USACE.
`Rather, it found that “[t]he Lafayette County litigation was precipitated by
`[AGRED’s] decision to charge fees—not [the USACE’s] decision to remain silent on
`the issue.” Agred Found. v. U.S. Army Corps of Eng’rs, No. 4:18-cv-04136, 2020 WL
`2114928, at *5 (W.D. Ark. May 4, 2020). AGRED timely appealed.
`
`II. Discussion
`Article III of the Constitution extends the judicial power of the United States
`to “Cases” and “Controversies” only. U.S. Const. art. III, § 2. “Constitutional
`standing (as opposed to statutory standing) is a threshold question that determines
`whether a federal court has jurisdiction over a plaintiff’s claims.” Kuhns v. Scottrade,
`Inc., 868 F.3d 711, 716 (8th Cir. 2017).
`
`The irreducible constitutional minimum of standing contains three
`requirements. First and foremost, there must be alleged (and ultimately
`proved) an injury in fact—a harm suffered by the plaintiff that is
`concrete and actual or imminent, not conjectural or hypothetical.
`Second, there must be causation—a fairly traceable connection between
`the plaintiff’s injury and the complained-of conduct of the defendant.
`And third, there must be redressability—a likelihood that the requested
`relief will redress the alleged injury. This triad of injury in fact,
`causation, and redressability constitutes the core of Article III’s
`case-or-controversy requirement . . . .
`
`Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102–104 (1998) (cleaned up).
`
`4Because the standing issue was dispositive, the district court did not address
`sovereign immunity and the applicability of the Declaratory Judgment Act.
`-5-
`
`

`

`A plaintiff who brings suit in federal court has the burden of establishing
`standing. Id. If he cannot, his complaint must be dismissed for lack of subject matter
`jurisdiction. Iowa Right To Life Comm., Inc. v. Tooker, 717 F.3d 576, 584 (8th Cir.
`2013). “We review a district court’s dismissal for lack of subject matter jurisdiction
`de novo.” Kuhns, 868 F.3d at 715.
`
`AGRED argues that the district court erred in concluding that it does not have
`standing. Because the parties do not dispute the district court’s finding that AGRED
`suffered an injury-in-fact, we go straight to the second requirement of causation. For
`causation to exist, “the injury has to be fairly traceable to the challenged action of the
`defendant, and not the result of the independent action of some third party not before
`the court.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (cleaned up).
`“[T]raceability . . . requires the plaintiff to show a sufficiently direct causal
`connection between the challenged action and the identified harm. That connection
`cannot be overly attenuated.” Dantzler, Inc. v. Empresas Berríos Inventory &
`Operations, Inc., 958 F.3d 38, 47 (1st Cir. 2020) (quotations and citation omitted).
`
`We agree with the district court that AGRED has not established a causal
`connection between its injury and the USACE’s conduct.5 The injury to AGRED, as
`alleged by AGRED and articulated by the district court, is that “[AGRED] is subject
`to a state-court injunction preventing it from charging fees relating to the use of its
`property without being subject to contempt and sanctions.” Agred Found., 2020 WL
`
`5We note that AGRED argues at length that the district court erred in
`concluding that it lacks standing because it caused its own injury. This misconstrues
`the district court’s holding and confuses the issues. While the district court did find
`that AGRED caused its own injury when it “opened the door for third parties to file
`suit,” the relevant finding was that AGRED’s “injury was not caused by [the
`USACE’s] failure to recognize their right to charge fees.” Agred Found., 2020 WL
`2114928, at *5 (emphasis added). The relevant question before us is whether the
`USACE caused AGRED’s injury.
`
`-6-
`
`

`

`2114928, at *4. AGRED contends that the USACE caused this injury by failing to
`acknowledge its rights to charge fees under the Act of Exchange. We are not
`convinced.
`
`There are several kinks in AGRED’s causal chain. First, AGRED’s alleged
`injury, the state-court injunction, results directly from FOLEA’s thus far successful
`lawsuit, not from the USACE’s refusal to take a position on the issue of fee-charging.
`FOLEA—not the USACE—sued AGRED. In fact, AGRED did not ask the USACE
`to take a position as to fee-charging until after FOLEA sued. Therefore, the injury
`began independently of any action or inaction by the USACE. Second, the USACE
`did not announce its position until five months after the state court litigation
`began—and over one month after the state court’s ruling. The fact that AGRED’s
`injury had been ongoing for five months before the USACE’s alleged wrongdoing
`renders it logically implausible as a cause of AGRED’s asserted injury. Third, when
`the USACE did take the position that it believed the Act of Exchange to be silent on
`the issue of fee-setting, this had no effect on the state court litigation. At base,
`AGRED’s theory of causation is that the USACE caused its injury by failing, after the
`fact, to agree with AGRED’s interpretation of the Act of Exchange. “For purposes of
`Article III, too many factors stand in the way of a direct causal relationship.” Miller
`v. Redwood Toxicology Lab’y, Inc., 688 F.3d 928, 936 (8th Cir. 2012).
`
`AGRED attempts to reframe the issue by painting itself as the “object” of the
`USACE’s action or inaction. See Alexis Bailly Vineyard, Inc. v. Harrington, 931 F.3d
`774, 777–78 (8th Cir. 2019) (“When a plaintiff is the object of government action,
`‘there is ordinarily little question that the action or inaction has caused him
`injury . . . .’” (quoting Lujan, 504 U.S. at 561–62)). For example, it argues that it is
`under threat of future enforcement because the USACE could later decide that
`fee-setting is not allowed and then enforce the relevant portion of the Act of
`Exchange against AGRED. It is true that “[i]n pre-enforcement cases,” an injury can
`arise from the “credible threat of” enforcement or prosecution. See, e.g., id. at 778
`
`-7-
`
`

`

`(holding that plaintiffs had standing to seek a declaratory judgment that a provision
`of Minnesota law was unconstitutional because they faced a credible threat of
`enforcement of the law, which the defendants had the authority to enforce). But this
`is not a pre-enforcement case because AGRED’s injury is not the threat of future
`enforcement from the USACE. That is neither the injury the district court found nor
`the injury that AGRED has argued thus far. Regardless, this injury is speculative and
`not imminent, given that the USACE has repeatedly refused to take a position on the
`fees and views them as being outside its “purview.” See Steel Co., 523 U.S. at 103
`(explaining that the injury must be “actual or imminent, not conjectural or
`hypothetical” (internal quotation marks omitted)).
`
`AGRED also tries to reframe this as a contract dispute between itself and the
`USACE. AGRED relies on Maytag Corp. v. International Union, United Automobile,
`Aerospace & Agricultural Implement Workers of America, where we explained that
`“[i]n the context of disputes between parties to a contract, the declaratory judgment
`remedy ‘is intended to provide a means of settling an actual controversy before it
`ripens into a violation of the civil or criminal law, or a breach of a contractual duty.’”
`687 F.3d 1076, 1081 (8th Cir. 2012) (quoting Rowan Cos. v. Griffin, 876 F.2d 26, 28
`(5th Cir. 1989)). But this requires, among other things, that the “contractual dispute
`[be] real, in the sense that it is not factually hypothetical.” Id. at 1082.
`
`Here, there is no real contractual dispute between AGRED and the USACE.
`The USACE expressly stated that it not only takes no position regarding AGRED’s
`contractual obligations, but also that fee-setting and fee-collecting “are not matters
`within [its] purview.” Compl., Ex. E, at 2. AGRED claims that “[b]ecause it is the
`[USACE] that would have authority to enforce any provision of the Act of Exchange
`that might limit AGRED’s rights in its own property, AGRED’s injury is ‘fairly
`traceable’ to the Act of Exchange and the [USACE].” Appellant’s Reply Br. at 9. This
`argument is logically flawed; even if the USACE is the only party with the authority
`to enforce a contract under the Act of Exchange, this does not mean that it will choose
`
`-8-
`
`

`

`to do so. We find the same logical flaw in AGRED’s claim that it has standing
`because “AGRED and the [USACE] are the only parties to the Act of Exchange and
`therefore the only parties with any standing or authority to assert any right under the
`Act of Exchange.” Id. at 8 (citation omitted). AGRED’s lack of standing against
`someone else does not create standing against the USACE.
`
`AGRED fails to meet the causation requirement for standing because it cannot
`show that its injury is fairly traceable to the USACE. Accordingly, the district court
`properly dismissed its claim for lack of subject matter jurisdiction.
`
`III. Conclusion
`For the foregoing reasons, we affirm the district court’s judgment.
`______________________________
`
`-9-
`
`

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