Managing Legal and Institutional Constraints on Aquaculture in Dredged Material Containment Areas

Contents

Federal Regulation of DMCA's
State Regulation of DMCA's

Environmental Protection Agency
Food and Drug Administration
Fish and Wildlife Service (FWS)

Chemical Suitability and Soil Testing Issues
Misrepresentation or Fraud
Waste by the Tenant or Easement-Holder
Private Nuisance
Contractual Issues
"Joint Venture" Vicarious Liability
Legal Defenses

Substantive Provisions
Required Documents

Introduction

Most DMCA's are located on private land, and acquisition of easements for disposal is the responsibility of the dredging project sponsors, such as a local port authority or navigation district. Although DMCA's often have a usable life span of up to 50 years, an estimated 7,000 acres of new DMCA's are needed annually (Coleman et al. 1988). Acquisition is increasingly difficult because of high real estate values, the long-term nature of the easements, and the perception by landowners that dredged material is not aesthetic.

To overcome these difficulties, the Corps of Engineers (CE) has worked to develop beneficial-use concepts that identify ways in which the landowner can use the acreage for activities that are financially attractive but do not interfere with periodic disposal of dredged material. One of these beneficial use concepts with a high potential for obtaining new sites is aquaculture (Coleman et al. 1983).

Aquaculture is promising as a compatible activity with disposal, because aquaculture ponds and DMCA's share many design characteristics. Common features include perimeter levees to retain water, construction on relatively impervious soils, and control structures for water discharge and drainage. Both facilities have similar regulatory and permitting requirements for construction and operation; both types of facilities include locations adjacent to waterways in coastal areas, often on large tracts of land and near transportation routes and/or major markets.

For the CE, the primary benefit of aquaculture in a DMCA is to facilitate acquisition of new disposal sites. Significant benefits can also be realized from DMCA aquaculture by the aquaculture industry, port and waterway interests, and land-owners. High land and construction costs and restrictive legal and regulatory requirements have hindered the development of pond-based coastal aquaculture in the United States. Thus, prospective aquaculturists will benefit from increased availability of suitable sites for pond culture and reduction of certain construction costs. The waterway interests and dredging industry will benefit from increased availability of needed real estate for DMCA's. Landowners will benefit from site improvements and from a greater return from their land as operational income or lease fees. Finally, the local economy will be enhanced by the introduction of a new industry, and the national economy will be enhanced by replacement of imported seafood with a local product (Coleman et al. 1988).

To demonstrate the technical and economic feasibility of aquaculture in DMCA, the CE conducted the Containment Area Aquaculture Program (CAAP), in which a commercial-sized aquaculture facility (marine shrimp farm) was built and operated on an active DMCA near Brownsville, Texas (Coleman and Konikoff 1988). The objectives of the CAAP were to demonstrate the technical and economic feasibility of containment area aquaculture. The demonstration was conducted in an active DMCA using commercial-sized ponds and standard shrimp culture practices. Specific objectives were the determination of design specifications and construction methods that would allow multiple use of DMCA for aquaculture and dredged material disposal, development of management strategies to maximize the compatibility of aquaculture with disposal activities, documentation of construction and operations costs, identification of any constraints to the concept, and the compilation of documents, including six technical reports.

The results of the demonstration are documented in a series of six CE technical reports that elaborate the details of the following:

• Site selection and planning (Wilson et al. 1991);
• Legal and institutional constraints (Robertshaw et al. 1991);
• Chemical suitability (Tatem 1990);
• Design and construction (Homziak and Veal 1991);
• Pond operations (Coleman and Konikoff 1991); and
• Marketing and economics (C-K Associates 1991).

The first section includes information on federal agencies and estimates of time required to complete permit actions. The second section presents information on issues that should be identified and addressed in contracts among the parties involved in DMCA aquaculture: the CE, the landowner, the local dredging sponsor, and the aquaculturist.

Part 1: Containment Area Aquaculture--A Regulatory Overview

Federal Regulation of DMCA's

Four main federal regulations must be addressed to construct and operate a DMCA: 1) National Environmental Policy Act (NEPA); 2) Section 404 of the Clean Water Act; 3) Section 401 of the Clean Water Act; and 4) Coastal Zone Management Act (CZMA). In addition, several minor ones bear attention.

National Environmental Policy Act

An EIS is a complex and time-consuming document that thoroughly explores the environmental consequences of the project to the extent scientifically and practically feasible. It requires formal interagency coordination, generates a record of decision on the proposed project, and usually takes more than a year to complete. The EA alternative, however, briefly discusses the need for the proposed action and alternatives to it. It also analyzes the adverse environmental impacts and positive aspects of the proposed action. The EA must be accompanied by a finding of no significant impact (FONSI) detailing reasons an EIS is not required. An EA, for most beneficial-use activities, can be prepared in about 2 weeks. An example of an action that would normally require an EA, but not necessarily an EIS, would be the use of a new disposal area not covered by the overall project EA or EIS, but in a similar habitat to an area that had been covered by an EIS (Mathis 1989).

Some actions, such as minor maintenance dredging along existing disposal sites, are exempt from NEPA requirements. However, these exemptions would not likely affect DMCA aquaculture projects since these are designed to facilitate the acquisition of additional disposal acreage, rather than the conversion of existing sites. Furthermore, even if an activity falls within the category of an exempted activity, "extraordinary circumstances" may exist that mandate the preparation of at least an EA. Building a new commercial-sized aquaculture facility would generally qualify as an extraordinary circumstance.

Section 404

Part of the permitting process allows for public notice, review by federal and state resource-management agencies, and opportunity for public comment and hearing. Although the CE does not issue itself a permit for its own projects, it does undertake an internal compliance process, including notice to and coordination with other federal and state agencies. In addition, in the 404 permit process, the CE must comply with other federal environmental laws, such as the NEPA, CZMA, and the National Pollution Discharge Elimination Act (NPDES).

One of the most sensitive issues associated with Section 404 is wetlands protection. According to Section 404(b)(1) guidelines for CE projects, uplands are to be preferred over wetlands for disposal of dredged material, and wetland disposal can take place only when certain restrictive requirements are met, including: 1) no practicable alternative; 2) no significant adverse impacts on aquatic resources; 3) all reasonable mitigation is employed; and 4) no statutory violations.

Although the guidelines seem straightforward, the delineation of wetlands is a complex subject. Over the years, the various federal agencies, with an interest in wetlands, developed different methods of determining whether a given site is a wetland (with various emphases on hydrophytic vegetation, hydrology, and hydric soils), and there were often uncertainties. In an attempt to resolve the resulting inconsistencies, a unified Federal Manual for Identifying and Delineating Jurisdictional Wetlands (Tiner 1989) was adopted by several agencies and is in current use. It is, however, being challenged in both the courts and in Congress and could be altered. In the meantime, the CE uses the unified manual to determine whether a site is a wetland and if so, applies Section 404(b)(1) guidelines.

Two other Section 404 stipulations that could affect DMCA aquaculture are 404(c), which gives the Environmental Protection Agency (EPA) veto power as to the use of a particular site, and 404(e) under which general, regional, or national permits are allowed. Under Section 404(c), the EPA administrator may decide, after notice, hearing, and consulting with the CE, that discharge at a site will have unacceptable adverse effects on municipal water supplies, shellfish beds and fishery areas, wildlife, or recreation areas. The EPA then may prohibit or restrict the use of the proposed site. However, if a site is acceptable under Section 401 (which deals with water quality and is discussed below), it is not likely to trigger Section 404(c).

General permits for certain frequently occurring activities are allowed under Section 404(e). These permits are often used for disposal in upland sites as long as the runoff from the site is acceptable under Section 401 (water quality discussed below). If a DMCA aquaculture project is proposed for an upland site, the use of one of the existing 404(e) permits would be desirable.

Section 401

Coastal Zone Management Act

Other Federal Regulations and Executive Orders

National Historic Preservation Act (NHPA) requires that a federal agency consult the state historical preservation authority to determine whether significant historical structures or archaeological sites will be affected by that project. The Endangered Species Act provides generally that federal agencies may not take actions that jeopardize the continued existence of endangered species, designated threatened species, or their critical habitat. It is administered by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. The Fish and Wildlife Coordination Act requires that the CE coordinate its activities with federal and state fish and game agencies and fully consider their recommendations and ways to prevent loss and damage of fish and wildlife resources due to the proposed operations (Mathis 1989). The Wild and Scenic Rivers Act provides protection of designated rivers. The Estuaries Protection Act is designed to protect and improve water quality of designated estuaries threatened by overdevelopment and pollution. It is administered by the EPA.

Several EO's may apply to DMCA's to be used in aquaculture. EO 12372 provides state and local officials with a chance to consult with federal agencies (as the CE) when federal activities are proposed. EO 11990 prohibits construction in wetlands unless no practical alternative exists. EO 11988 requires the evaluation of the potential effect of CE actions on floodplain areas. EO 11593 requires the CE to take into account laws designed for the protection of cultural resources when making development plans. If it is determined that an EO applies to a proposed project, it can usually be addressed in the NEPA document.

State Regulation of DMCA's

Under the CAAP, state regulations that would affect containment area aquaculture were studied in six model states: Alabama, Florida, Louisiana, Maryland, South Carolina, and Texas. These states were chosen because 1) they represent a variety of regulatory environments; 2) they have confined dredge material disposal on-going, requiring future additional DMCA acreage; and 3) they are states in which aquaculture is a potentially significant industry.

In several of the states, such as Alabama and Louisiana, the permitting process functions with the CE as the lead agency, responsible for notification and interagency coordination. In other states, such as South Carolina and Maryland, the permitting process is comprehensive, and interagency coordination is accomplished through a special state agency. A summary of the regulatory process in each model state examined by Robertshaw et al. (1991) includes the following concerns:

1. Land protection and management (including coastal lands, wetlands, public lands, and land-use planning;
2. Water resource protection (including water quality, water management, and levee construction); and
3. Biological resource protection.

Part 2. Aquaculture Permitting within the Federal Statutory Framework

It is important to note that some aquaculture activities will not require permitting; however, the aquaculturist should become familiar with the overall regulatory framework of aquaculture within a particular state and vigorously attempt to comply with all related laws.

The information contained herein is intended as a mere guide to permitting agencies, and it is not intended to supplant the need for legal counsel, where required.

Environmental Protection Agency

Food and Drug Administration

Note also that drugs do not include pesticides, which are regulated by the EPA.

Drugs used to treat diseases and parasite infections must be approved, and then they must be approved for aquaculture operations, including dosage.

The aquaculturist must follow instructions for each drug (to be in compliance with the law). For example, one drug, tricaine methanesulfonate, can be used to immobilize during transport, certain fish intended for food. However, the drug should not be used within 21 days of harvesting the fish for food.

Fish and Wildlife Service (FWS)

The FWS is also a commenting agency under the Fish and Wildlife Coordination Act, reviewing, commenting, and making recommendations on such things as proposed alterations to any water body by the federal government and the effect on fish and wildlife under protection by the FWS.

According to the FWS, it is the intent of the FWS to build a strong and mutually beneficial relationship with the private aquaculture industry, and to the extent possible, make its scientific and technical resources available to further the development of private aquaculture.

Part 3. Potential Legal Issues Affecting Aquaculture in a DMCA

The primary reason for identifying potential legal issues is for planning purposes. To the extent possible, participants in aquaculture within a DMCA should anticipate problem areas and try to address these areas of concern in the legal documents and agreements they draft to set up the project.

In other words, the issues "flagged" in this section should be addressed in the documents that are drafted to set up, operate, and regulate an aquaculture venture on a DMCA, to the extent that is possible. The following section is an issue-by-issue discussion of some of the most important legal questions that will be raised.

Chemical Suitability and Soil Testing Issues

Although most dredged material does not contain elevated concentrations of chemical contaminants, contaminants may be found in some aquatic sediments, especially fine-grained, organic materials (Tatem 1990).

Obviously, where the results of tests show any indications the site will not be suitable for production of a high quality crop that can be sold for a profit, there is no need to continue testing, and the site should be ruled out at that stage in the process. For example, any sediments found to be toxic to laboratory test animals will not be suitable for aquaculture production of a crop for human consumption (Tatem 1990). Testing requirements apply to the sediments in the containment area and the dredged material to be added later.

Participants in a CAAP should be able to determine early in the site-selection process whether a site will be suitable for containment area aquaculture. However, answers to factual questions do not necessarily furnish answers to the legal questions raised by the prospect of conducting aquaculture--that is, production of food for human consumption, on a site used for the disposal of dredged material.

The difficulty is that compliance with Tatem's (1990) recommendations may not prevent the emergence later in the project of troublesome legal questions. For example, if some kind of toxic "hot spot" should emerge onsite, and harmful contaminants then damage the aquaculturist's crop, will the party responsible for sediment testing be liable under a theory of legal fault for having failed to prevent this from happening?

It is unlikely a contaminated product would ever reach a consumer; even so, if a consumer suffers an adverse reaction from eating the contaminated product, would the consumer have a cause of action? What difference would it make if the aquaculturist had been involved in deciding which tests should be conducted and had paid for part of them?

Standard of care: First, there are no national criteria for labeling a sediment as chemically contaminated (Tatem 1990). Additionally, the soil samples taken from the large land areas involved in DMCA's may be "spotty" in nature.

Given these limitations and the other concerns raised by Tatem, what amount of testing and what sequence of testing will be legally sufficient to avoid liability for legal fault? Compliance with the state of the art in soil testing should put the testing party in the best possible legal position.

The soil testing question is further complicated by the fact that these two functions (disposal of dredged material and operation of an aquaculture facility) do not normally take place on the same piece of property. To help determine what test might be required when the two functions coincide, the potential aquaculturist should ask the following questions: What types of soil tests are usually done for each of these functions when they take place on different parcels of land? What additional testing might be required when the two functions take place on a single parcel of land?

When an aquaculturist intends to site an aquaculture operation on a given parcel of land, what types of soil testings or other investigations does he engage in to assure himself that the site is, in fact, chemically suitable for aquaculture? One primary concern is whether soil has been contaminated by pesticide use on or near it. The land-use history of the parcel of real estate would be examined to determine "whether row crops were ever grown on or adjacent to the site being considered" (Wellborn 1988). If that investigation gives the aquaculturist a reason to believe pesticides were used on that property, then testing to be sure that pesticide residues in the soil do not exceed acceptable limits. Thus, the aquaculturist in the non-DMCA situation will be accustomed to conducting a background investigation into the land-use history of the property and adjacent property, and to conducting a soil test in the event the soil may have been contaminated with pesticide residues.

Likewise, what soil testing does the Corps engage in when it is citing a new dredged material containment area? The Corps usually does little in the way of sediment testing when disposing of dredged material in upland sites when no aquaculture is involved. Although practices may vary district by district, in the absence of a research or experimental use, little or no testing customarily takes place since no other surface uses of the DMCA are contemplated.

Because the dredged material disposal function may be a source of contamination to the aquaculture function, care with soil testing becomes more crucial and the standard of care higher, because food for human consumption is involved.

For example, one ground for elimination of a potential CAAP site is activities such as crop dusting, oil and gas extraction, or industrial use on a site adjacent to a potential site.

According to Tatem (1990), the approximate cost of conducting the tests that are "highly recommended" is $11,400. That amount of money would pay for the following chemical parameters or tests: particle size, miscellaneous parameters, and mysid shrimp bioassay. Moreover, some tests labeled "optional" may turn out to be necessary, and that could add as much as $21,750 to the bill for sediment testing (Tatem 1990).

Involved parties will be held to a higher standard of care when dredged material is going to be involved in the production of food for human consumption than when no aquaculture is involved.

Misrepresentation or Fraud

According to the eminent negligence scholar Prosser (see Keeton 1984), to establish a claim under this theory, one would have to prove the following elements:

1. There was a false representation, usually of material fact;
2. The maker of the representation knew or believed the representation was false or lacked a sufficient basis of information to make that representation;
3. The maker of the representation intended to induce the aquaculturist to act or refrain from acting in reliance upon the representation;
4. The aquaculturist justifiably relied upon the representation in acting or refraining from acting; and
5. The aquaculturist was damaged as a result of such reliance (Keeton 1984).

Waste by the Tenant or Easement-Holder

Standard of care: The tenant is under a duty not to destroy, misuse, alter, or neglect that property. The person to whom this duty is owed is the property owner, who gets the property back after the lease expires. The doctrine of "waste" may furnish the owner of the site with a cause of action under which he sues the tenant to (1) stop the activity he believes constitutes waste (by way of an injunction), or (2) get damages to compensate him after the fact for the reduced value of the property or the cost of repairs.

Here, as with other legal theories of liability, the specific legal definition of waste varies from state to state. However, the general idea is the same: A person rightfully in possession of the property but who does not have full title to the property is under a duty to the property's owner not to use the property unreasonably or improperly or abuse it. In some states, waste is defined by statute; in other states, the courts, rather than the legislature, have fashioned a definition of waste.

Generally, courts distinguish between two categories of waste. The first, known as voluntary or commissive waste, entails some deliberate or voluntary destructive act on the part of the tenant, such as pulling down a building or removing fixtures from the property. The second category of waste, known as permissive waste, focuses on the tenant's failure to act, rather than his voluntary action. Permissive waste is the tenant's failure to exercise ordinary care to preserve and protect the estate, such as allowing structures to rot. In other words, permissive waste entails some omission or neglect on the part of the tenant. Some states go further than just distinguishing between the two kinds of waste--they treat voluntary waste as a more serious offense and accordingly require by statute that the persons guilty of voluntary waste pay double or triple damages.

An aquaculturist, as the lessee of the site, may be subject to this type of liability in situations like those noted above, particularly with respect to the maintenance of the levees and the drain/harvest structures that had been tailored by the Corps to meet the special needs of the aquaculturist. Thus, were the tenant in possession to abandon the premises and leave the property unprotected or uninsured (in violation of an obligation to do so), the landowner may have a cause of action against that tenant for waste. Furthermore, in states with waste statutes containing double or treble damage provisions, the tenant may find himself liable for double or treble damages.

In terms of remedies, the plaintiff may seek an injunction to prevent commission of waste in certain cases. This may occur where damages are an imperfect remedy or where the nature of the injury is such that a preventive remedy is indispensable and should be permanent. However, in general, if money damages will adequately and fully compensate the plaintiff, then damages may be the remedy, the precise measure of which will be determined under state law.

Private Nuisance

For example, the neighboring landowner may complain about the following:

• Flooding;
• Destruction of crops (for example, the aquaculturist lets chemicals wash onto adjoining property);
• Pollution of a stream from which both properties take water; or
• Pollution of an underground water supply.

The actual legal test for nuisance liability varies from state to state. However, in general, in order to recover damages under the "private nuisance" theory of liability, the landowner who sues must prove the following four elements:

1. The defendant acted with the intent of interfering with the use and enjoyment of the land by those entitled to that use;
2. There was some interference with the use and enjoyment of the land of the kind intended, although the amount and extent of that interference may not have been anticipated or intended;
3. The interference that resulted and the physical harm, if any, from that interference proved to be substantial....[This] requirement is to satisfy the need for a showing that the land is reduced in value because of the defendant's conduct;
4. The interference that came about under such circumstances was of such a nature, duration, or amount as to constitute unreasonable interference with the use and enjoyment of the land. "This...means that the interference [rather than the conduct] must be unreasonable..." (Prosser, cited in Keeton 1984).

Also, the release of contaminants into a common water supply may result in civil liability for the person or entity who lets those materials escape.

A landowner who succeeds in a nuisance action may secure two different kinds of relief. First, he may be entitled to equitable relief (that is, an injunction preventing the aquaculturist from engaging further in the offensive activity) where the damage is ongoing. Second, the landowner may be entitled to damages to compensate him for losses directly attributable to the offensive conduct. The precise relief available depends on the law of the state where the CAAP is located.

Contractual Issues

In the preceding sections, several types of tort liability have been discussed. If the person suing and the target of that suit are both parties to a contract, there may be contractual liability as well as tort liability. Contractual liability may arise when the parties undertake obligations or make promises to do specific things in the future, then unjustifiably fail to do so, and that failure causes a compensable loss. Thus, in some situations, an injured party may file both a tort claim and a contract claim arising out of the same transaction or occurrence.

The general principles of contract law vary from state to state. Contract law is often more complex than the tort issues discussed previously, but the elements of proof are roughly parallel to those in a tort claim. An injured party must prove the existence of a valid contract between the parties; the other party's failure to fulfill one of the important duties undertaken in that contract; a significant causal link that connects the failure with the damage the injured party complains about; and the existence of damages that the law views as compensable.

In general, at least three interests are involved in contractual claims, and they all center around the contract itself. The first interest courts protect is the "expectation" interest. "The legal system protects the expectations that have been induced by the making of a promise by attempting to place the injured promisee in the position he would have been in had the promise been performed." The second interest courts attempt to protect is the "reliance" interest. Parties to whom promises are made should have the right to rely on those promises when they change their positions in reliance on that promise to their own detriment. The third interest protected is the restitution interest. Parties who breach contracts will not be permitted to reap benefits from doing so--the law requires them "to surrender the unjust enrichment (gain) and to restore the injured promisee to his position prior to the making of the promise."

It is difficult to generalize further about how a contractual claim might turn out; any contractual claims that arise will depend on the language of the particular contract on which the person sues. In addition to the variations in a given commercial contract and the variations in contractual interpretation that exist from state to state, the remedies for contractual claims vary as well according to the contract itself and applicable state law. For example, in some circumstances, a party may seek to rescind or set aside the contract. In other circumstances, a party may seek damages to compensate that person for the breach by the other party.

"Joint Venture" Vicarious Liability

The joint venture theory of liability is a category of vicarious responsibility (i.e., holding someone else liable for an act committed by another). The idea is that a joint venture is a kind of temporary partnership where it makes sense to treat the participants as you would treat partners. On the one hand, a partnership constitutes "a more or less permanent business arrangement, creating a mutual agency between the partners for the purpose of carrying on some general business, so that the acts of one are to be charged against another." On the other hand, a joint venture lasts for a shorter period of time and has a more limited purpose than a partnership. It is generally considered "an undertaking to carry out a small number of acts or objectives" in which each member of the joint venture has "an equal voice in directing the conduct of the enterprise" (Prosser, cited in Keeton 1984).

Although the precise legal test to determine whether a joint venture exists varies from state to state, courts look at some combination of the following factors to decide:

• Did both parties contribute money, property, effort, knowledge, skill, or other assets to a common undertaking?
• Did both parties have a joint property interest in the venture's subject matter?
• Did both parties have a right of mutual control or management of the enterprise?
• Did both parties expect to make profits and have a right to share in the profits?
• Did both parties agree to share in any losses?

However, it is unlikely most courts would find the Corps and the aquaculturist joint venturers for several reasons. First, a court would be hard-pressed to find a "right of mutual control," where sole responsibility for the premises shifts from the aquaculturist to the Corps and back again without the two ever sharing custody or control of the site. This is true even in emergency circumstances where provisions are made for emergency use of the disposal area in the event of natural disasters, such as a hurricane. Second, it is difficult to see how, as a practical matter, the Corps and the aquaculturist could be said to be involved in a "common undertaking," where their respective goals and uses of the subject property are different.

Third, if the documents are carefully drafted, the Corps' fortunes will not be tied to the fortunes of the aquaculturist. There should be no sharing of profits of the aquaculturist and no expectation that the Corps will share in his losses either.

Furthermore, although both parties have a property interest in the site, it is not a "joint" property interest in the common sense of the word--they both exist simultaneously; but the Corps' easement and the aquaculturist's lease are separate and distinct interests. Having said this, it is still possible a court may rule that the Corps was vicariously liable for the acts of the aquaculturists, since the question would be one of first impression, never before decided by courts.

Legal Defenses

Governmental Immunity

There are two separate categories of governmental immunity and, therefore, two distinct legal theories on which the Corps may base its argument that it is immune from suit. First, the Corps will argue that the Federal Tort Claims Act (FrCA) provides immunity for any federal agency exercising a discretionary function. Second, depending on the factual context, the Corps may argue that it was engaged in a flood-control project, and the government enjoys statutory immunity for damages caused by floods or floodwaters.

In addition to these immunity arguments, the Corps may raise a third argument. The Corps will try to enforce any "hold harmless" agreements that are included in its contracts or agreements with the aquaculturist or its easement from the landowner. In other words, in situations where parties contracting with the Corps agree in writing to "hold" the Corps "harmless" from liability for certain activities and categories of functions, the Corps will try to enforce those "hold harmless" agreements.

"Discretionary Function" Immunity under the Federal Tort Claims Act

Statutory Immunity for Flood Control Projects

Enforceability of "Hold Harmless" Agreements in Easements and Operating Agreements

The GRANTOR [that is, the landowner] does hereby expressly and fully release the United States of America [acting through the Corps of Engineers], its officers, agents, servants and contractors, from liability for any and all damages done or caused to be done and from any claim or demand whatsoever or injuries suffered by or done to the said premises by reason of the deposit of such spoil or other material, excepting damages or injuries due to the fault or negligence of the Government or its contractors.

When the Corps' own negligence is in issue, most states require that the Corps clearly and unequivocally express its intent to indemnify for its own negligence.

Other Defenses Available to the CE in Tort Actions

Both defenses focus on the conduct of the party suing. With comparative or contributory negligence, if the person suing were also negligent, and if that negligence contributed to the injuries that person is claiming, then his measure of damages may be affected, and, in some states, his very right to recover. Contributory negligence can bar recovery completely; the comparative negligence doctrine is not as harsh. Most states have by now adopted a rule of comparative fault or comparative negligence, either by statute or by judicial decision. Comparative negligence entails looking at the conduct of the plaintiff, seeing whether plaintiff's own negligence contributed to his accident or injuries, assessing the plaintiff's proportionate share of fault, and reducing the plaintiff's damages verdict by that proportion.

There are two main forms that comparative fault doctrines take. First, as in Louisiana, Florida, and the majority of states, a so-called "pure" comparative negligence doctrine exists in which "a plaintiff's contributory negligence does not operate to bar his recovery but does serve to reduce his damages in proportion to his fault." Louisiana's comparative negligence law is a creature of statute, while Florida's comparative negligence law was fashioned by its courts. The second type of comparative negligence doctrine is called the "modified or '50%'" system, under which a plaintiff's contributory negligence does not bar recovery so long as it remains below a specified proportion of the total fault.

Assumption of risk again focuses on the conduct of the party filing suit. That person cannot have knowingly and intentionally exposed himself to known dangers or hazards--in other words, plaintiff may not recover where he has "assumed the risk" of the precise type of harm he suffered.

Part 4. User Documents and Drafting Checklists

• Where the underlying real estate is privately owned (Figure 1);
• Where the underlying real estate is owned by the state (Figure 2);
• Where the underlying real estate is owned by the federal government and the Corps of Engineers is the entity administering it (Figure 3); and
• Where the underlying real estate is owned by the federal government and administered by some federal agency other than the Corps of Engineers (Figure 4).

How responsibilities and obligations will ultimately be allocated is a site-specific proposition--the exigencies, practicalities, and legal constraints of a given site will dictate the ultimate outcome of the negotiations. Since no two sites will be alike, no two sets of documents will be alike. Thus, it is not realistic to present sample documents as "definitive" user documents. However, it is possible to identify and highlight, by means of sample documents and document checklists, the important matters that should be covered in the documents, the types of documents needed to set up the legal relationships among the parties, and allocation of risks in an equitable fashion.

Substantive Provisions

The parties negotiating a containment area aquaculture operation should consider including in the documents setting up the venture provisions allocating the following obligations:

• Responsibility for the security of the site;
• Site suitability investigative responsibilities, such as sediment testing and study of land-use history, with specific guidelines on what testing should be done when, as well as who will be financially responsible for each test;
• Securing and maintaining insurance on the site and equipment;
• Construction and maintenance of levees, water intake structures, drain structures, roads on levees, and access roads to site;
• Construction and maintenance of an on-site office;
• Indemnity or "hold harmless" provisions;
• Division of responsibility for securing permits and coordination of the acquisition of the necessary state, federal, and local permits for both the aquaculture operation and the dredged material disposal operation;
• Provisions describing access for each party in the event of emergency, such as a hurricane, including the Corps' agreement to use its best efforts to avoid disposing of dredged material during the growing cycle of the aquaculturist, except in extreme emergencies;
• Responsibility for returning the site to an agreed-upon condition at the termination of the Corps' easement and/or the aquaculturist's lease; and
• Arbitration provision to govern disputes that may arise during the operation of the project.

Required Documents

The following is a more detailed discussion of the documents that will be needed to establish a DMCA project and to define and allocate the rights and obligations of the parties. Frequent reference to Figures 1 through 4 will be made to facilitate explanation of the parties' rights and obligations.

(1) Where the real estate is privately owned:

First, the Corps should negotiate an easement from the landowner granting the right to dispose of dredged material on the underlying premises on particular terms. Second, the aquaculturist should negotiate with the landowner a lease that is made expressly subject to the Corps' disposal easement (in other words, the Corps' right is prior to and superior to the aquaculturist's rights). Third, to ensure the enforceability of the Corps' rights as to the aquaculturist, there should be some sort of operating agreement or other written document outlining the various relationships. A third document is recommended so the Corps and the aquaculturist will have their rights reduced to a writing that is enforceable between each other, should disputes arise between them.

Slight variations in state property law may necessitate somewhat different agreements, and the formalities of execution, recordation, and priority will vary from state to state. Thus, when the parties reach the drafting stage, it is essential that a qualified lawyer be employed to draft and review the agreements. In addition, the parties may want some sort of preliminary agreement fairly early in the site selection process. This agreement should outline which entity has what preliminary responsibilities. Since site selection is so central to the success of a DMCA project, the responsibility for the steps recommended both in the "Site Selection" Technical Report (Wilson et al. 1991) and the "Chemical Suitability" Technical Report (Tatem 1990) should be specifically allocated among the parties. Furthermore, since success in the project is tied as well to the ability to secure the necessary permits for all functions to take place on the site, preliminary consultations with permitting agencies should be required by the preliminary documents, and closing may be subject to assurances that the important regulatory permits can, in fact, be secured in a timely fashion.

(2) How the situations described in (1) would differ if the underlying real estate was owned by the state or by a local sponsor, instead of a private landowner:

There are at least three other issues to consider in drafting the documents setting up a DMCA aquaculture operation when the underlying real estate is owned by a state or local governmental entity, like a county, city, port district, or navigation district. First, the aquaculturist should be sure that the owner of the real estate has the legal authority to enter into a lease. In general, cities and counties do not have that authority unless the state grants them this power by statute or the municipal charter gives them this authority. Thus, during the site selection process, the aquaculturist must be satisfied from the enabling legislation or statute or provisions in the charter that the entity has the express or implied authority to lease the property to him.

A second consideration arises when the site is owned by a port authority or a navigation district and is related to the first. The enabling legislation creating the port authority or navigation district and allowing it to lease property must also give the entity sufficiently broad powers to include the leasing of its property to private concerns for the aquaculture surface use, either expressly or by implication.

Often this will not present a practical problem, because the port authority frequently will also be the local sponsor of the dredging project and thus charged with responsibility for securing disposal space for Corps dredging projects. Thus, their interests will be identical, and the port authority or navigation district will be involved from the beginning in the search for suitable dredged material disposal space, and the port master plan will be consulted early on.

A third and final way that the picture is complicated by state or local ownership of the property is that the lease may have to comply with additional state or local aquacultural lease laws. Such laws may impose certain restrictions on the terms that such a lease may contain.

If these requirements are not checked and satisfied, the lease may not be enforceable.

(3) How the situation in (1) would be different if the underlying real estate were owned by the federal government:

However, from the outset, it should be observed that the likelihood of this issue coming up in the context of Corps ownership is exceedingly slim. If the Corps already owns the property, it can presumably use the land in whatever ways it sees fit--including the disposal of dredged material--subject, of course, to any limitations contained in the deed or any restrictions it has already agreed to. In other words, if the Corps wants to dispose of dredged material there, it certainly can, subject to applicable permit requirements.

However, in the second situation--where the property is under the jurisdiction of some other federal agency (see Figure 4)--the Corps may still want to try to secure disposal space using containment area aquaculture. This issue may very well come up in coastal areas where competition for land use is the fiercest. For example, the Corps may find that it wants to put a containment area on land that is part of a military base or a Coast Guard station.

If this is the case, then the documents needed to secure the right to use the federal land for the disposal of dredged material and the coordinated aquaculture function will be different. As Figure 4 illustrates, instead of an easement from a private individual, the Corps will secure an interagency agreement or interdepartmental agreement.

With respect to the substantive provisions that the above documents should contain, where the Corps is the landowner, language in the lease should reserve rights to dispose of dredged material and maintain the legal superiority of those rights vis-a-vis the rights of the aquaculturist. However, in the other situation, where the Corps has to deal with another federal agency, the situation is closer to the original situation, where the Corps secures from the federal agency/landowner the rights it wants for the disposal of dredged material, and in those negotiations secures the superiority of those rights over the rights of the aquaculturist.

References

Coleman, R.E., and M. Konikoff. 1991. Containment area aquaculture pond operations. Technical Report EL __. U.S. Army Engineer Waterways Experiment Station, Vicksburg, MS (in press).

Engler, R.M., T.R. Patin, and R.F. Theriot. 1988. The Corps' environmental effects of dredging program (EEDP). Miscellaneous Paper D 2. U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg, MS.

Homziak, J., and J.D. Lunz. 1983. Aquaculture in dredged material containment areas. Proceedings. Miscellaneous Paper D 2. U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg, MS.

Coleman, R.E., J. Homziak, and D.M. Dugger. 1988. Development and operations of the containment area aquaculture program (CAAP) demonstration shrimp farm. Pages 230-246 in R.L. Lazor and R. Medina, editors. Proceedings of the Gulf Coast Regional Workshop on the Beneficial Uses of Dredged Material, 26-28 April, 1988, Galveston, TX. Technical Report D 3. U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg, MS.

Homziak, J., and C.D. Veal. 1991. Design and construction of dredged material containment areas for aquaculture. Technical Report EL __. U.S. Army Engineer Waterways Experiment Station, Vicksburg, MS (in press).

Keeton, W.P. 1984. Prosser and Keeton on the law of torts, 5th edition and Supplement (1989). West Publishing Co., St. Paul, MN.

Leibesman, L.R. 1990. Clean Water Act's Section 404 dredged and fill material discharge permit program - overview. Pages 1-8 In Conference Notes, Section D, Fifth Conference on Wetlands Law & Regulation. 21-22 June 1990. Containment areas for aquaculture. Pages 292-302 in D.D. Hook (editor). The ecology and management of wetlands. Volume 2: Management Use and Value of Wetlands. Timber Press, Portland, OR.

Mathis, D. 1989. Legal and institutional considerations for federal (CE) dredging projects. In Dredged Material Management: Engineering and Environmental Advances. Course Manual. U.S. Army Engineer Waterways Experiment Station, Vicksburg MS.

Robertshaw, S., D. Love, and R.J. McLaughlin. 1991. Legal and institutional constraints on aquaculture in dredged material containment areas. Technical Report EL __. U.S. Army Engineer Waterways Experiment Station, Vicksburg, MS (in press).

Tatem, H.E. 1990. Determination of the chemical suitability of a dredged material containment area for aquaculture. Technical Report EL 12. U.S. Army Engineer Waterways Experiment Station, Vicksburg, MS.

Tiner, R. (editor). 1989. Federal Manual for Identifying and Delineating Jurisdictional Wetlands. Federal Interagency Committee for Wetland Delineation. U.S. Fish and Wildlife Service Cooperative Technical Publication 024-010-00683-8. Washington, DC.

Wellborn, T.L. 1988. Site selection for levee-type fish production ponds. Publication No. 100. Southern Regional Aquaculture Center, Stoneville, MS.

Wilson, J., J. Homziak, and R.E. Coleman. 1991. Site selection, acquisition, and planning for aquaculture in dredged material containment areas. Technical Report EL __. U.S. Army Engineer Waterways Experiment Station, Vicksburg, MS (in press).

1. Easement for disposal of dredged material
2. Lease to aquaculturist (subject to Corps Disposal Easement)
3. Operating agreement (or other coordination document)
Note: Preliminary agreements may precede adoption of these final documents, reducing the parties' agreement to writing.

1. Easement for disposal of dredged material
2. Lease to aquaculturist (subject to Corps Disposal Easement)
3. Operating agreement (or other coordination document)

Where the state is the owner of the land, state law should be reviewed to see whether any laws exist governing the leasing of state-owned lands for aquaculture purposes. Where the local sponsor is the owner of the property, any leases or easements must fall within the entity's scope of authority in the deed, enabling legislation, or charter.

Note: Preliminary agreements may precede adoption of these final documents reducing the parties' agreement to writing.

1. Lease (from Corps to aquaculturist) that may also contain provisions as to operations.

1. Easement or some combination of interagency agreement or permit allowing the Corps to use the property for the disposal of dredged material
2. Lease to aquaculturist (subject to Corps' disposal rights)
3. Operating agreement (or other coordination document)
Note: Preliminary agreements may precede adoption of these final documents, reducing the parties' agreement to writing.

Appendix A.

This easement deed made this __________ day of __________ __________ 19 __________, between _____________________, Grantor, and _____________________ County, a political subdivision of the _____________________, Grantee.

Witnesseth:

WHEREAS, construction ________________________________ of the ________________________________;
WHEREAS, such authorization is subject to the condition that local interests furnish free of cost to the United States necessary rights-of-way and suitable spoil disposal easements for the ________________________________, and hold and save the United States free from damages due to construction ________________________________, except damages due to the fault or negligence of the Government or its contractors: and

WHEREAS, by agreement dated _____________________, _____________________ County agreed to furnish, free of cost to the United States, necessary rights-of-way and suitable spoil disposal areas ________________________________;

WHEREAS, the Grantor is the owner in fee simple of a tract of land situated in the ________________________________ Election District, _____________________ County, _____________________, BEING all that tract or parcel of land which by a Deed dated _____________________ and recorded among the land records of _____________________ County, _____________________, at Deed Book Vol. __________, Page __________, was conveyed by --- to the said Grantor.

AND WHEREAS, the Grantee desires to acquire an interest in the said tract of land so the United States might use a portion of it for the purpose of depositing spoil from dredging operations and other uses incidental thereto which said portion of said above described parcel of land is delineated on Schedule "A" attached hereto and made a part hereof.

NOW THEREFORE, in consideration of the sum of One Dollar ($1.00), the receipt of which is hereby acknowledged, paid by _____________________ County, a political subdivision of the _____________________, and the benefit to the Grantor from the ________________________________, the sufficiency of which is hereby expressly acknowledged, the Grantor does hereby give, grant, and convey unto said Grantee, its successors and assigns, a right and privilege, of a period beginning with the date of this instrument and terminating in __________ years, to enter upon, occupy and use part of the land described above as delineated in Schedule "A" or any portion thereof for the purpose of depositing spoil and other dredged material excavated as a result of the ________________________________.

RESERVING HOWEVER, to the Grantor all such rights and privileges as may be used without interfering with or abridging the rights and easement hereby conveyed to the Grantee; subject, however, to existing easements for public roads and highways, public utilities, railroads and pipelines.

Grantee shall have the right to clear and keep clear all trees, or undergrowth and other obstruction from the herein granted easement, and the Grantor agrees not to do any filling, upgrading, or other activity during stated period on the herein granted easement that will interfere with the normal operation and maintenance of said dredged material disposal area. It is agreed that the within named consideration is in full payment for any timber cut or to be cut in the deposit of dredged material and earth, or in the operation and/or maintenance of said dredged material disposal area.

TO HAVE AND TO HOLD FOR A PERIOD OF __________ YEARS, unto said Grantee, its successors and assigns, the rights herein granted.

THE GRANTOR does hereby expressly and fully release the United States of America, its officers, agents, servants and contractors, from liability for any and all damages done or caused to be done and from any claim or demand whatsoever or injuries suffered by or done to the said premises by reason of the deposit of such spoil or other material, excepting damages or injuries due to the fault or negligence of the Government or its contractors.

AND THE SAID Grantor will warrant and defend, for the period of the easement the right and title to the portion of the above described property which is delineated or further described in Schedule "A" unto the said Grantee against the claims of all persons whatsoever.

This easement is being acquired for use by the United States Army Corps of Engineers, Baltimore District, Baltimore, Maryland.

IN WITNESS WHEREOF, the Grantor has hereunto set hand and seal, the __________ day of __________ __________, 19 __________.

________________________________ (SEAL)

________________________________ (SEAL)

COUNTY OF _____________________)

_____________________)ss:

STATE OF MARYLAND)

I hereby certify, that on this __________ day of __________ in the year __________ before the subscribed _____________________ personally appeared _____________________ and acknowledged the foregoing deed to be his act.

________________________________
NOTARY PUBLIC

(NOTARY)
(SEAL)

A perpetual and assignable right and easement to construct, operate and maintain a dredged material disposal area on (the land described in Schedule "A") (Tracts Nos. __________ , __________ and __________ ) including the right to construct and maintain dikes and buffer zone; to deposit dredged material and accomplish any alterations of contours on the land as necessary in connection with such work; to clear, borrow, excavate and remove soil, dirt, and other materials including dredged material from the land; title to and the continuing right to grow, plant, replant, cut, fell, harvest and remove all timber trees and other vegetation thereon; to remove and dispose of any and all buildings, and/or other obstructions therefrom; and for such other purposes as may be required in connection with said works within the limits of subject tract; provided that no structures for human habitation shall be constructed or maintained on the land, that no other structures shall be constructed or maintained on the land except as may be approved in writing by the representative of the United States in charge of the project, subject, however, to existing easements for public roads and highways, public utilities, railroads and pipelines; subject to all interest in and to oil, gas and other minerals in, on and under the herein described property outstanding in third parties, including leases, assignments and mortgages thereof; reserving, however, to the landowner, his heirs and assigns, all such rights and privileges as may be used and enjoyed without interfering with the use of the project for the purpose authorized by Congress or abridging the rights and easement hereby acquired.

FROM: _____________________	STATE OF LOUISIANA
TO: _____________________	PARISH OF _____________________

The undersigned hereby grant(s) to the _____________________ Parish Council, and its assigns, a temporary easement and right-of-way in, on, over and across the hereinafter described land, for a period not to exceed __________, beginning with the date possession of the land is granted to the Lafourche _____________________, for use by the _____________________, and its assigns, as a dredged material disposal area, including the right to enter upon the land and deposit dredged material thereon, and the right to lay or place disposal pipelines, with full rights of ingress and egress on the land, and the right to perform any other work necessary and incident to the _____________________ Waterway, together with the right to trim, cut, fell, and remove therefrom all trees, underbrush, obstructions, and any other vegetation, structures, or obstacles with the limits of the right-of-way; reserving, however, to the landowners, their heirs and assigns, all such rights and privileges as may be used without interfering with or abridging the rights and easement hereby acquired; subject, however, to existing easements for public roads and highways, public utilities, railroads and pipelines.

The consideration for this easement is the increased value to adjacent lands of the undersigned, the added convenience in use of the improved waterway, and other good and valuable considerations.

The land in, on and to which this easement applies is described as follows:

The undersigned hereby waive(s) and release(s) the ________________________________ and its assigns from any and all claims for damages arising from the activity of the Council, its officers, contractors, agents, employees, representatives or assigns on said land in the reasonable exercise of this easement.

This easement includes the right of egress on adjacent lands of the owner(s) not described above, provided such ingress and ingress and egress is necessary and not otherwise conveniently available to the grantee and its assigns.

All tools, equipment, improvements or other properties placed upon the land by the council or its assigns during the exercise of this easement shall remain the property of the council or its assigns and may be removed by the council or its assigns at any time within a reasonable period after completion of the work or after the expiration of this easement.

WITNESS MY HAND AND SEAL this __________ day of __________ 19 __________.

WITNESSES:

_______________________		_______________________
_______________________		_______________________
	_______________________
	NOTARY PUBLIC

This work was sponsored in part by the NOAA/National Sea Grant College Program, U.S. Department of Commerce, under Grant Number NA90AA-D-SG802, through the Mississippi-Alabama Sea Grant Consortium. Supporting funds for this grant were provided by the U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg, MS. The U.S. Government and the Mississippi-Alabama Sea Grant Consortium are authorized to produce and distribute reprints for governmental purposes notwithstanding any copyright notation that may appear within. This is Mississippi-Alabama Sea Grant Program Publication No. MASGP 011.

Mississippi State University does not discriminate on the basis of race, color, religion, national origin, sex, age, disability, or veteran status.

Publication 1838
Extension Service of Mississippi State University, cooperating with U.S. Department of Agriculture. Published in furtherance of Acts of Congress, May 8 and June 30, 1914. Ronald A. Brown, Director