[00:00:02] Speaker 01: 1581, city of Wilmington, Delaware versus the United States. [00:00:08] Speaker 05: Is that Wilmington water or DC water? [00:00:15] Speaker 02: Your Honor, I did not ask. [00:00:20] Speaker 02: May it please the court. [00:00:22] Speaker 02: Paul Niffler, representing an appellant. [00:00:24] Speaker 02: This is a Clean Water Act case. [00:00:26] Speaker 02: The Supreme Court held in Consolo versus Federal Maritime Commission that without specific statutory authorization, de novo review is generally not to be presumed. [00:00:37] Speaker 02: However, the court of claims below applied de novo review. [00:00:41] Speaker 02: There was no statutory basis for that. [00:00:43] Speaker 02: And therefore, that was a clear legal error. [00:00:47] Speaker 01: What effect that has and what you're talking about here? [00:00:54] Speaker 02: Sure. [00:00:54] Speaker 02: So that effect had multiple impacts. [00:00:58] Speaker 02: The first is because under de novo review, nothing matters what the United States said or evidence that occurred before the first day of trial. [00:01:07] Speaker 02: Therefore, the court did not look behind [00:01:10] Speaker 02: the first day of trial to determine, for example, whether the United States could have appealed the stormwater charges that were assessed after the Congress changed the law in 2011. [00:01:22] Speaker 01: There were 73 days between the... So I don't understand what the secret, what de novo review, what do we have to decide about de novo review and what is the impact of that in terms of ascertaining the result in this case? [00:01:35] Speaker 05: Right. [00:01:35] Speaker 05: So one of the things that you say about de novo review is that, as a result, the court below improperly excluded evidence about a 2008 EPA publication. [00:01:53] Speaker 05: That's correct. [00:01:55] Speaker 05: Which said the city's methodology was fair and equitable. [00:01:59] Speaker 05: How can a statement by one federal agency be binding on another? [00:02:03] Speaker 05: What kind of authority do you have for that? [00:02:05] Speaker 02: Your Honor, I would point back to, first, I would point back to George A. Fuller versus the United States, which is a court of claims case from 1947, where prior to the instance where de novo review applied in cases, an admission by the United States is binding. [00:02:25] Speaker 05: How is that an admission by the United States? [00:02:29] Speaker 02: Come on. [00:02:30] Speaker 02: It's a factual admission, not illegal. [00:02:32] Speaker 05: No, it isn't. [00:02:33] Speaker 05: It's a conclusion. [00:02:36] Speaker 02: Well, the issue there is there hasn't been an administrative proceeding that resulted in that conclusion. [00:02:42] Speaker 02: It's simply a statement. [00:02:44] Speaker 01: So you're challenging the exclusion of that. [00:02:47] Speaker 01: And up here, do you know what our standard of review is for the trial court's decision? [00:02:54] Speaker 02: Yes, so the final factor review for clear error. [00:02:58] Speaker 02: Evidentiary decisions are reviewed on abuse of discretion. [00:03:01] Speaker 01: OK, so you're saying he abused his discretion. [00:03:02] Speaker 01: Is that the issue you want to present to us as your lead issue, whether he abused his discretion in not allowing that particular article? [00:03:10] Speaker 02: Yes, Your Honor, because the problem is that by refusing to accept that, this court- Did you hear the judge's question? [00:03:19] Speaker 02: Sorry, Your Honor? [00:03:21] Speaker 05: Judge Frost asked you, is that what you want to present as your lead argument? [00:03:26] Speaker 02: It is, Your Honor, because it frames the entire litigation. [00:03:29] Speaker 04: OK. [00:03:30] Speaker 02: So the issue that we have here is we're ultimately trying to determine whether the charges assessed on these properties were reasonable. [00:03:38] Speaker 02: And the United States agency in charge of managing stormwater utilities was recommending that stormwater utilities all across the country follow Wilmington's lead because the way that they were doing it resulted in charges that were fair and equitable. [00:03:56] Speaker 02: The court instead, below, determined that there should be no weight to it, when in fact this court and the Supreme Court has ruled previously that a prior contemporaneous statement by the United States... Can you just give us the site for the Court of Federal Plains opinion in that regard, just so we can know what you said? [00:04:18] Speaker 02: Sure, it's Curious v. Secretary of the Health of Human Services. [00:04:22] Speaker 02: No, no, no. [00:04:27] Speaker 02: Oh, that particular statement by the court, well, it's not in the actual original opinion. [00:04:40] Speaker 02: It was one of the earlier opinions where the court questioned whether it was appropriate to, whether a contemporaneous evidence is even appropriate under the de novo standard of review. [00:04:54] Speaker 01: Do we have that opinion in our appendix? [00:04:59] Speaker 01: I did. [00:05:08] Speaker 02: May I address that in the rebuttal? [00:05:14] Speaker 03: Sure. [00:05:17] Speaker 05: So when those cities adopted that methodology as fair and equitable, did they also [00:05:23] Speaker 05: say in their adoption that it was reasonably related? [00:05:28] Speaker 05: Reasonably related to the charge incurred? [00:05:32] Speaker 02: Yes, so the basis was that the idea was that all the charges, all the properties being charged based on their contribution to pollution and the entire setup was described in a way to establish that the charges were fair and equitable based on the pollution that they're contributing. [00:05:52] Speaker 02: And so it's not the exact same language that was used by Congress in 1323. [00:05:56] Speaker 02: No, it's not. [00:05:57] Speaker 02: Right? [00:05:58] Speaker 02: But at the same time, it is factual evidence that goes to establishing that this meant the requirements of 1323. [00:06:11] Speaker 04: What did the 2008 FDA publication actually endorse? [00:06:16] Speaker 04: Was it the use of these land use tax record classifications as a proxy for matching up against the classifications in the Chao study? [00:06:28] Speaker 02: It did, Your Honor. [00:06:28] Speaker 02: It described exactly the process by which Wilmington uses to assess charges. [00:06:32] Speaker 02: And that is the process, so that was a fair and equitable way to assess charges. [00:06:35] Speaker 01: You say it would call it a publication. [00:06:37] Speaker 01: Was it an informal handout? [00:06:41] Speaker 01: What kind of publication was it? [00:06:47] Speaker 05: Was it out for review and comment? [00:06:50] Speaker 02: I think the disclaimer at the end said that the document is not a law or regulation. [00:06:55] Speaker 02: Was that hand out? [00:06:57] Speaker 01: What was it? [00:06:59] Speaker 02: This is appendix 1082. [00:07:03] Speaker 02: Press release. [00:07:13] Speaker 01: OK. [00:07:15] Speaker 02: So next, I would like to then turn to the 1323A. [00:07:22] Speaker 02: In 1977, Congress amended that to include a first sentence to declare that the federal government shall be subject to the requirements, administrative authority of law. [00:07:30] Speaker 01: Yeah, nobody's disputing that. [00:07:32] Speaker 01: I mean, there's no dispute as to what the statute says, or that the government has some obligation under the statute. [00:07:40] Speaker 01: The government's saying it doesn't, right? [00:07:42] Speaker 02: With regard to the requirement for interest, there is a dispute. [00:07:47] Speaker 02: And that is why, when it says local governments respecting the control of abatement of water pollution, the second sentence clarifies that these local requirements meant both substantive and procedural. [00:07:58] Speaker 01: So you're talking about the interest issue now. [00:08:02] Speaker 01: doesn't come into play unless you win, right? [00:08:05] Speaker 02: It does not. [00:08:06] Speaker 02: But at the same time, this general waiver, it is our position that what it effectually does is put the United States in the position of every other nongovernmental entity that owns property in the city. [00:08:20] Speaker 02: And so that is why they are subject to all the same requirements, all the same procedures. [00:08:24] Speaker 01: I mean, the language in shop is in the absence of express congressional consent to award [00:08:31] Speaker 01: the word of interest separate from a general waiver of immunity to suit. [00:08:37] Speaker 01: The United States is immune. [00:08:38] Speaker 01: So you're talking about maybe a general waiver of immunity. [00:08:42] Speaker 01: And the Supreme Court specifically spoke to that. [00:08:45] Speaker 01: And they said, that's not enough. [00:08:47] Speaker 02: So the general waiver is found in the first two sentences for in order to allow the suit. [00:08:54] Speaker 02: It is the third sentence that provides the separate waiver for interest. [00:09:02] Speaker 02: And it is that basis where the United States uses very broad language. [00:09:11] Speaker 02: There's no plausible construction for 1323A with broad language, these three sentences, can be read to exclude interest. [00:09:26] Speaker 02: And that's why, because our opinion of the United States should have been held to the local requirement for paying interest on delinquent stormwater charges, given that they are property owners in the city of Wilmington. [00:09:38] Speaker 01: Well, who's got the burden of what? [00:09:40] Speaker 01: You act like the government had to prove that it didn't have to pay interest, as opposed to Shaw saying that you have to have an explicit waiver of sovereign immunity in order to hold the government liable for interest. [00:09:56] Speaker 02: When Congress enacted 1323, the United States simply became another property owner. [00:10:01] Speaker 02: And they were subject to all of these requirements. [00:10:03] Speaker 02: They were subject to the requirements to pay or to step forward and contest the charges in some form or another. [00:10:10] Speaker 02: They did not do that. [00:10:11] Speaker 01: Well, that's another issue, right? [00:10:12] Speaker 01: Whether they were compelled to enforce the requirements that you say, they say, which are permissive, right? [00:10:19] Speaker 02: Well, any appeal is permissive. [00:10:22] Speaker 02: I mean, this appeal is permissive. [00:10:23] Speaker 02: The issue is if we wanted to get them to pay later, we had to appeal. [00:10:27] Speaker 01: So the issue in this case is whether... So they were... Is it your contention that in the end, because they did not exhaust that appeal process, we don't have jurisdiction, the Court of Federal Plains didn't have jurisdiction over this issue? [00:10:42] Speaker 02: No, the United States is trying to raise an affirmative defense. [00:10:48] Speaker 02: They said that they would like to have raised in the court of claims below. [00:10:53] Speaker 02: They didn't, but they wanted to. [00:10:55] Speaker 02: And the issue before the court was whether they would be allowed to establish [00:10:59] Speaker 02: that failure to exhaust should be excused. [00:11:04] Speaker 02: And it is our position that that is where this issue comes into play, is that the United States wishes to put forward evidence. [00:11:13] Speaker 02: And that's what their affirmative defense was about. [00:11:15] Speaker 02: The burden is on them to establish that their failure to exhaust should be excused. [00:11:22] Speaker 01: Will you preface this little discussion here a minute ago by saying that they didn't proceed on that affirmative defense? [00:11:29] Speaker 02: They asked the court to go ahead and rule on that. [00:11:32] Speaker 02: However, the problem is they didn't say what they would appeal. [00:11:35] Speaker 02: We don't know what they would appeal. [00:11:36] Speaker 02: We don't know what evidence that they would have raised in order to assert this appeal. [00:11:40] Speaker 02: And on top of that, they have failed to establish why they could not have appealed before the charges were assessed. [00:11:47] Speaker 02: And under Wilmington's ordinance, no retroactive charge corrections can be applied after the charges have been assessed. [00:11:54] Speaker 02: They had 73 days after the amendment was entered. [00:11:59] Speaker 02: They had three months after that. [00:12:01] Speaker 02: They could have for the second round of charges. [00:12:02] Speaker 02: They didn't. [00:12:03] Speaker 02: There were 10 years in which the United States could have appealed and did not, including after 2018 when- And what is the consequence of their failure to appeal? [00:12:13] Speaker 02: Their failure to appeal then is that their affirmative defense must fail because they have failed to carry their burden of establishing that their failure to exhaust administrative remedies can be excused. [00:12:30] Speaker 04: Can I ask you just about the 2008 FDA publication again? [00:12:35] Speaker 04: My question was, is there something in this publication that endorses Wilmington's usage of land use tax classification records as a proxy for correlating to the coefficients used in the Chao study? [00:12:54] Speaker 04: Is there something in this? [00:12:56] Speaker 04: Because I don't see it. [00:12:58] Speaker 04: And I thought I heard you say, yes, that's what this publication endorsed. [00:13:04] Speaker 02: Yes, Your Honor. [00:13:07] Speaker 02: It's on page appendix 1082. [00:13:10] Speaker 02: Remaining properties in previous areas are estimated by applying predefined stormwater coefficients to the total property area. [00:13:17] Speaker 02: The property area, then, is obtained from the property records. [00:13:23] Speaker 04: OK, so this is a little cryptic on actually endorsing the specific point I was trying to ask about. [00:13:32] Speaker 02: Yes, there's a previous discussion about the reliance on government records. [00:13:40] Speaker 02: The tax records? [00:13:42] Speaker 02: Yes, the property use records. [00:13:47] Speaker 02: Your Honor, just very quickly, one thing I want to get to, one last point. [00:13:50] Speaker 05: Well, you haven't answered that question. [00:13:56] Speaker 05: This is a case study. [00:13:59] Speaker 05: There are other case studies. [00:14:01] Speaker 05: Correct. [00:14:02] Speaker 05: How is this case study different than all other case studies? [00:14:06] Speaker 02: What other case studies in the record are we talking about? [00:14:12] Speaker 05: Tacoma Park, Maryland, Suffolk, Virginia. [00:14:15] Speaker 05: Why is one more important than the others? [00:14:17] Speaker 02: They're not. [00:14:18] Speaker 02: The point is that EPA holds these out as an appropriate way to assess charges. [00:14:25] Speaker 02: All right. [00:14:25] Speaker 02: With that, Your Honor, if there's no more questions, I will reserve my name tag. [00:14:30] Speaker 02: Thank you. [00:14:33] Speaker 05: Where did they use the word appropriate I may have misspoken I apologize your honor You can do that then on your response they please the court [00:14:56] Speaker 03: The trial force decision should be a firm. [00:14:59] Speaker 01: Can I just ask you some preliminary questions? [00:15:01] Speaker 01: Absolutely. [00:15:01] Speaker 01: I'm sorry to throw you off speed, but they're just some general things that aren't in the record. [00:15:05] Speaker 01: And if you don't have a firm answer for me, that's just fine. [00:15:08] Speaker 01: I'm just interested. [00:15:09] Speaker 01: Which is, this provision, do the same standards and the same test in terms of reasonableness, et cetera, apply to every private property owner? [00:15:21] Speaker 01: I mean, the statutory provision says the government has to do what everybody else has to do. [00:15:26] Speaker 03: Excellent question, Your Honor. [00:15:28] Speaker 03: The provision at issue, the federal facility section, applies a standard that is specific to federal facilities. [00:15:36] Speaker 03: Federal facilities under 1323A, they are required to pay reasonable service charges. [00:15:44] Speaker 03: And those are charges based upon a fair approximation of that federal properties [00:15:49] Speaker 03: proportionate contribution to pollution. [00:15:51] Speaker 03: So that is a charge, excuse me, that is a standard that is specific to federal facilities. [00:15:59] Speaker 01: The reason I ask is because somewhere in that middle of that paragraph under A, it says to the same extent as any non-governmental entity. [00:16:08] Speaker 03: Yes. [00:16:10] Speaker 01: But why would a non-governmental entity be under this federal facility section? [00:16:16] Speaker 03: Right. [00:16:16] Speaker 03: I think the idea for the 2011 amendment, which this is a result of, was that prior to 2011, you had federal government in several instances, which I cited in my brief. [00:16:28] Speaker 03: who were not paying stormwater charges on the basis that it was an impermissible tax. [00:16:34] Speaker 03: And therefore, this forensic clause did not allow that. [00:16:37] Speaker 03: And the courts largely agreed. [00:16:39] Speaker 03: So in 2011, Congress amended that and wanted to be clear that the federal government is going to have to pay stormwater charges just as nongovernment entities are responsible for paying these charges. [00:16:48] Speaker 03: But it also drafted and included this specific standard by which [00:16:52] Speaker 03: It's not just a general standard by which you pay, but it's specific to your proportionate contribution to pollution. [00:17:01] Speaker 03: A fair approximation of that. [00:17:03] Speaker 03: And that's where the city of Wilmington, in this case, failed, because their case in chief was not focused at all on proving that the charges at issue, that the runoff coefficient that we talked about, which estimates the impervious error, was anyway linked to the federal properties in question. [00:17:19] Speaker 03: Instead, they were answering an irrelevant question, which is, [00:17:23] Speaker 03: Is the use of these runoff coefficients generally reasonable? [00:17:28] Speaker 03: That's neither here nor there. [00:17:29] Speaker 01: So what more did they have to do? [00:17:30] Speaker 01: I mean, they have the tax records, and then they have the 62 study. [00:17:36] Speaker 01: So did they have to do on a lot by lot basis? [00:17:41] Speaker 01: Did they have to make an independent determination? [00:17:43] Speaker 03: No, well, in this particular case, they had to show that they had to establish a relationship between the coefficient that they used and the property. [00:17:54] Speaker 03: So in this particular instance, the city's methodology was based upon stormwater classes. [00:17:58] Speaker 03: So they were linking the stormwater class to a particular specific runoff coefficient. [00:18:04] Speaker 03: And so I imagine in most instances, that would be relatively non-controversial, right? [00:18:08] Speaker 03: If you have a government stormwater class, a lot of government buildings like this, [00:18:14] Speaker 03: concrete, you know, and have the roofs and the runoff coefficient that's associated with that, .95, that's relatively easy to assume that most of the buildings in that stormwater class are tied to that particular runoff coefficient. [00:18:26] Speaker 03: The problem here is that the City of Wilmington placed these federal properties, which are 270 acres of dredged disposal facilities, [00:18:35] Speaker 03: in a vacant stormwater class. [00:18:37] Speaker 03: And that vacant stormwater class, as the city commissioner testified at trial at appendix page 143, contained a whole variety of different types of land cover and sizes. [00:18:47] Speaker 01: It could contain... How granular does it have to be to be a fair approximation? [00:18:52] Speaker 01: I mean, we could be talking about [00:18:54] Speaker 01: studies and analysis that far exceed what these fees ever bring in, right? [00:18:58] Speaker 03: It doesn't have to be a mathematical precision. [00:19:00] Speaker 03: We're not saying that they have to prove that. [00:19:03] Speaker 05: Isn't the government's position that the city, in the case of federal properties, at least has to take a look at [00:19:12] Speaker 05: in order to determine whether what they're saying about that parcel is in fact correct. [00:19:20] Speaker 05: So that if, for instance, because it's dredge runoff facilities, if it was all marshland, it would be different than if it was all a big pile of dirt. [00:19:31] Speaker 03: Yes, or concrete, like this federal building. [00:19:34] Speaker 03: And so in this instance, because they placed these... But they have to look. [00:19:39] Speaker 03: In this, I would say yes, Your Honor. [00:19:40] Speaker 03: I would say in this instance, they would have to look. [00:19:42] Speaker 03: Maybe in all instances, if you have instances where the stormwater class, the properties within that class were fairly similar in terms of the type of area. [00:19:51] Speaker 01: Fairly. [00:19:52] Speaker 03: Fairly similar, right. [00:19:53] Speaker 03: So that you could reasonably assume that. [00:19:55] Speaker 01: So is it enough to look at, they've got five properties, and it's like 270 acres. [00:19:58] Speaker 01: Correct. [00:19:59] Speaker 01: There's a lot of stuff here. [00:20:00] Speaker 01: Correct. [00:20:00] Speaker 01: So going to each of the five properties and then making an assessment of the property in general, [00:20:08] Speaker 01: Are you saying that it has to be more granular, every acre? [00:20:12] Speaker 03: It doesn't have to be every acre. [00:20:13] Speaker 03: It doesn't have to be every property. [00:20:14] Speaker 03: The point is, they provide evidence that this is the type of land that is at issue. [00:20:22] Speaker 03: And marry that up through an expert saying, well, this type of land would generally have this type of runoff. [00:20:27] Speaker 03: They don't have to provide, as you said, the extra granular acre by acre. [00:20:31] Speaker 03: Not at all. [00:20:32] Speaker 03: It's a higher level generally. [00:20:34] Speaker 03: They couldn't even prove. [00:20:35] Speaker 03: that the properties bore any relation whatsoever to the coefficient that they used. [00:20:39] Speaker 03: And that was because that stormwater class, the vacant class, could contain concrete, could contain marshland. [00:20:45] Speaker 05: Why do we have to get into that? [00:20:47] Speaker 05: Because isn't the question in this case whether the city government has to at least take a look? [00:20:55] Speaker 05: Because if they haven't done that, then we don't get into the question. [00:21:02] Speaker 05: We don't have to get into the question of how much more they have to do, because they didn't take a lot, as I understand from the record. [00:21:08] Speaker 03: That's correct. [00:21:09] Speaker 03: The record is clear that they did not visit the properties. [00:21:11] Speaker 03: Their expert did not visit the properties. [00:21:13] Speaker 03: In fact, their expert. [00:21:14] Speaker 04: But if that's the standard, then are you not then [00:21:19] Speaker 04: logically contending that the city of Wilmington has to go to every property and take a looky look and then make and do some kind of modest description of the state of that property and then start trying to match it up with what's the right coefficient. [00:21:35] Speaker 03: Well, let me be clear. [00:21:37] Speaker 03: When I said they had to take a look, I was not saying that in every case under every circumstance that the city municipality needs to look at the particular federal case. [00:21:47] Speaker 03: Well, right, because we're talking about a standard that applies to federal facilities. [00:21:51] Speaker 03: It's a federal facility section. [00:21:53] Speaker 05: And that standard is statutory, not constitutional. [00:21:56] Speaker 03: Well, it's statutory. [00:21:57] Speaker 03: Exactly. [00:21:57] Speaker 03: Congress is the one that drafted that standard. [00:21:59] Speaker 04: Well, what is it about the federal section that makes the federal land special over all non-federal lands? [00:22:06] Speaker 04: allows you to argue that for federal lands, they have to go take a look, whereas I think you're suggesting that maybe for non-federal lands, they don't have to do that. [00:22:17] Speaker 03: Well, I'll answer both of those questions. [00:22:18] Speaker 03: First, the Congress expressly, this is a money-mandating statute, right? [00:22:24] Speaker 03: And Congress waived sovereign immunity specific to [00:22:29] Speaker 03: what a reasonable service charge is and how they define it. [00:22:32] Speaker 03: They could have defined it in a variety of ways. [00:22:33] Speaker 03: It could have been a very general. [00:22:35] Speaker 03: They could have defined it as, if you have a reasonable methodology, then that is sufficient. [00:22:39] Speaker 03: But instead, they were more specific. [00:22:40] Speaker 03: Congress waived sovereign immunity specific to showing that the charge is based upon a fair approximation of that property's proportion. [00:22:47] Speaker 04: That's not true for all the other assessments they do for non-federal lands? [00:22:52] Speaker 03: That standard is not one that... That standard is not one... They can be unreasonable for non-federal lands? [00:22:58] Speaker 04: I'm sorry, what was your... They can be unreasonable assessments for non-federal lands? [00:23:03] Speaker 03: No, I wouldn't say we have to be unreasonable, but I think the question... Right, that's the point. [00:23:07] Speaker 04: I mean, I don't know why the word reasonable introduced in the federal section somehow [00:23:14] Speaker 04: allows and requires a mandate some extra level of scrutiny that the City of Wilmington has to undertake compared to all the requirements in the Team Water Act from non-federal lands. [00:23:26] Speaker 03: Well we're not arguing that [00:23:29] Speaker 03: that in general that there's an extra level of scrutiny. [00:23:32] Speaker 03: What we are maintaining is that because Congress waives sovereign immunity with respect to federal facilities, the only liability that the federal government has is specific to what Congress has stated, which is that the charges must be based upon this fair approximation of their relative contribution to pollution. [00:23:49] Speaker 03: And so that is the standard that municipalities must [00:23:53] Speaker 03: Must meet and in large variety of cases. [00:23:56] Speaker 03: That's not problem problematic. [00:23:58] Speaker 01: I imagine because let me ask you about the standards I mean when Judge Chen started up and asked you and I don't know that I've heard an answer really on did they have to go look at it, I think the I'm hoping the answer is no they didn't have to go look at it, but there's some indication you could have more discreet categorization [00:24:19] Speaker 01: and just compare and set standards that are more granular than what they did. [00:24:25] Speaker 01: Is that what you're saying? [00:24:26] Speaker 03: Yes. [00:24:26] Speaker 03: At least we could have almost said we'd go look at it. [00:24:28] Speaker 03: I mean, what I mean is there must be something site-specific. [00:24:31] Speaker 03: If you mean look, I don't mean physically going to the land, but if you have some evidence as to what is on the land. [00:24:36] Speaker 01: Well, are there documents, well, I don't know if it's tax records or what, that indicate the nature of the property that would give you information with respect to the runoff that we need to assess the charges on? [00:24:50] Speaker 03: Well, I mean, in our case in chief, we would have certainly presented evidence as to the character of the land. [00:24:57] Speaker 03: But we didn't need to, because the burden is on the plaintiff, in the first instance, to prove that the charges are reasonable and to prove that there is some relationship between the charges that they're based upon and the actual physical characteristics of the land. [00:25:13] Speaker 05: If there are records, if there are documents in the record, [00:25:17] Speaker 05: upon which the city could have relied to provide a fair approximation. [00:25:26] Speaker 05: But the city didn't use them. [00:25:28] Speaker 05: It seems to me irrelevant. [00:25:32] Speaker 05: The question is, one, is it reasonable? [00:25:36] Speaker 05: Because statute requires that. [00:25:38] Speaker 05: And then, fair approximation. [00:25:41] Speaker 05: In the case of private landowners, the Constitution requires [00:25:44] Speaker 05: that taxation be reasonable. [00:25:47] Speaker 05: But it doesn't say anything about, well, interpretations require it be reasonable. [00:25:52] Speaker 05: But there's nothing about fair approximation. [00:25:54] Speaker 05: That seems to me the core difference in this case. [00:25:56] Speaker 03: That's the core difference in this case, but it's a difference that Congress created. [00:26:01] Speaker 03: Right. [00:26:01] Speaker 03: And so Congress mandated when federal facilities can be subject to stormwater charges by municipalities. [00:26:09] Speaker 03: And the point here is that [00:26:10] Speaker 03: the city of Wilmington just failed utterly to make any connection between the federal properties in question in terms of their physical characteristics and the charges that they imposed. [00:26:20] Speaker 03: And that's why the trial court correctly found that those charges were not reasonable service charges under the Clean Water Act. [00:26:29] Speaker 05: Let me put it another way. [00:26:31] Speaker 05: If I, as a landowner, receive a tax bill from Fairfax County which says, here's your unreasonable tax bill. [00:26:40] Speaker 05: we've decided to impose an unreasonable tax. [00:26:43] Speaker 05: I have a constitutional claim. [00:26:45] Speaker 05: But if they say, here's your reasonable tax bill, but we're not saying it's a fair approximation, I, as a taxpayer, don't have a constitutional claim. [00:26:54] Speaker 05: Am I correct? [00:26:54] Speaker 03: That's my understanding. [00:26:56] Speaker 03: That's correct. [00:26:57] Speaker 04: So what if Wilmington had just done a drive-by of the federal lands and then said, OK, we know what's going on here. [00:27:10] Speaker 04: lands that is more like a dump site for all the dredging material that the Army Corps of Engineers is dredging up and they need a place to stick it and they're sticking it here on these lands and there's nothing else going on in these lands. [00:27:26] Speaker 04: Now let's go look at the 1962 Chao study. [00:27:29] Speaker 04: There's a lot of different categories here. [00:27:33] Speaker 04: What we've got here is not a park. [00:27:36] Speaker 04: It's not a cemetery. [00:27:37] Speaker 04: It's not a building in an urban area. [00:27:40] Speaker 04: It's not an asphalt street. [00:27:42] Speaker 04: It's just this basic land that hasn't been improved in any way. [00:27:47] Speaker 04: And it's just loaded up with dredging material. [00:27:51] Speaker 04: Look, there's a category here that says unimproved lands. [00:27:54] Speaker 04: We're going to go with this coefficient right here for the chow study unimproved land classification. [00:28:02] Speaker 04: Would that be wrong? [00:28:03] Speaker 04: Would that be good enough? [00:28:05] Speaker 03: If, maybe, if, say, Remington in that case, in your hypothetical, did what they did not do at trial, because this is what the trial court actually asked them, is it asked the expert, and I did as well, is there, can you [00:28:20] Speaker 03: Providing the evidence or do you have any knowledge that would connect that unimproved area because you're at dr. Shall not 1962 did establish and it studies it that you know said that point one to point three is appropriate for unimproved errors, but the question is is [00:28:35] Speaker 03: Did the city of Wilmington able to link that up and that study up with the vacant category? [00:28:40] Speaker 03: Which is really has no relations whatsoever to physical characteristics of the properties Is there any linkage that you can provide and show that we're talking about the same thing is the vacant category? [00:28:50] Speaker 03: Assuming the same land character as the child study they had an expert that said yes, and here's the studying Here's why that's the case Maybe that maybe that's the linkage that we're talking about that would that would make their case a lot stronger But their experts said no, I don't know [00:29:04] Speaker 03: And their case, and they provided no evidence linking those two up. [00:29:08] Speaker 03: You have to assume it, but that's not their burden. [00:29:10] Speaker 03: Their burden is not to just have the court assume. [00:29:12] Speaker 03: They have to actually prove that that category from the child study, the unimproved area, assumes the same land characteristics as the vacant. [00:29:20] Speaker 03: And as we heard from Commissioner Williams, their commissioner of public works, the vacant category, which is based upon these tax records, could contain all kinds [00:29:29] Speaker 03: kinds of different land covers, from asphalt, concrete, to wetlands and marsh. [00:29:33] Speaker 03: So it's kind of an amorphous category, which in and of itself shows that why are you linking this amorphous category with all different kinds of land covers to a single coefficient? [00:29:43] Speaker 03: That's why the burden then is, if you're relying upon a stormwater classification in which your own manual says, we're assuming they're similar, and your commissioner says, well, they're varied, they're different, they're divergent, then the burden is, well, we're going to have to do something more specific. [00:29:57] Speaker 03: We can't just rely upon the stormwater class. [00:29:59] Speaker 03: We're going to need to, as I said, drive by, or have some photos, or have some sort of evidence linking the properties to the coefficient that we're using. [00:30:06] Speaker 03: And they didn't provide that evidence at trial. [00:30:08] Speaker 01: Sorry, but just quickly, could you cover just briefly two issues? [00:30:12] Speaker 01: One, because your friend emphasized it so much, just to know what were you issue, which I'm having a hard time understanding the impact of. [00:30:21] Speaker 01: Anyway, a little on that, and then something on the interest, [00:30:24] Speaker 01: I mean maybe the court of federal claims judge felt he should reach it in case we reversed him on the merits but am I missing something or is there if we were to affirm on the merits is there any [00:30:37] Speaker 01: reason we should do an advisory opinion on this? [00:30:40] Speaker 03: OK, let me take the second issue first, because quick. [00:30:42] Speaker 03: You don't have to reach the interest issue, because our attention, and we believe it's correct, is the trial court correctly found that the government is not liable. [00:30:49] Speaker 03: If the government's not liable, there's no interest. [00:30:51] Speaker 01: Is there almost a certainty that if the city loses this case, they're going to do a reassessment, and you're going to get stuck with some bill? [00:31:00] Speaker 01: And so is it judicially efficient for us to reach the interest question here? [00:31:04] Speaker 03: I don't believe the court should reach the interest issue because ultimately the court finds that there's no liability, then the interest issue is moot. [00:31:11] Speaker 03: And if there's another case in which you find that the government is liable under these [00:31:15] Speaker 03: under the same statute perhaps it would make sense to figure out whether that interest is in fact applicable. [00:31:21] Speaker 03: We argue it's not, but it's an academic for this case. [00:31:24] Speaker 04: So the first... So Wilmington's not foreclosed from actually doing the drive-by of your government lands and then seeing perhaps what I just described and then saying, whoa, that looks [00:31:35] Speaker 03: Super unimproved. [00:31:37] Speaker 03: Federal facilities are still there. [00:31:40] Speaker 01: It wouldn't be improperly retroactive, right? [00:31:45] Speaker 01: If their assessments now cover, we're fighting about 10 years worth of assessments. [00:31:50] Speaker 03: We're talking about from 2011 to 2021. [00:31:52] Speaker 03: Those are the assessments that issue. [00:31:55] Speaker 01: Can they go back and redo that retroactively? [00:32:00] Speaker 01: I don't know why not, but I don't know. [00:32:02] Speaker 01: I mean, do you have a view on that? [00:32:04] Speaker 03: whether or not they could submit. [00:32:06] Speaker 01: I mean, if it's found that they didn't do enough to establish the reasonableness of their coefficient, can they go back and say, OK, whoops, let's get another number in here, much lower perhaps, and do it again? [00:32:22] Speaker 03: I haven't looked at that issue specifically. [00:32:25] Speaker 03: But I'm not aware of. [00:32:29] Speaker 03: whether there's any bar to them making your reassessment, but you talk about going back that far, I'm not sure if there are statute of limitations issues regarding that. [00:32:38] Speaker 03: I just have not looked specifically going forward, so I can't answer that. [00:32:41] Speaker 03: In terms of the de novo review, my understanding of their argument is that, as they say in their brief, the trial court confused the burden of proof with the standard of view. [00:32:53] Speaker 03: the court did not confuse the two throughout the opinion. [00:32:56] Speaker 03: The trial court was consistent in saying that the city of Wilmington failed to show by preponderance of evidence that the charges were reasonable service charges. [00:33:04] Speaker 03: In terms of de novo, the court did say that this is a money-mandating case. [00:33:09] Speaker 03: And so at trial, these issues, in terms of the EPA publication, I'm going to review de novo, meaning I am not going [00:33:17] Speaker 03: to give deference to the agency. [00:33:21] Speaker 03: If the agency said something regarding the stormwater system at issue in 2008, I'm not going to defer to whatever statement that is. [00:33:28] Speaker 03: I'm going to review it on a clean slate. [00:33:30] Speaker 03: That's correct. [00:33:32] Speaker 03: Also, the court found that it was irrelevant because it was 2008. [00:33:35] Speaker 01: Were they seeking sort of Chevron deference on these documents? [00:33:40] Speaker 03: No. [00:33:41] Speaker 03: Chevron doesn't apply. [00:33:42] Speaker 03: This is a de novo for view by a trial court of evidence they want to present going to what the agency's views were. [00:33:51] Speaker 04: This entire discussion of de novo does violence to my mind because we talk about de novo in the context of [00:34:01] Speaker 04: one tribunal reviewing the work of another tribunal we don't have that here correct it's it's I understand this how does this agency proceeding that that was the confusion there was no district court proceeding that the claims court was reviewing [00:34:17] Speaker 03: I agree, Your Honor. [00:34:19] Speaker 03: I think at the end of the day, they wanted the judge to view the EPA publication with a certain deference to find that it was binding. [00:34:29] Speaker 03: The trial court said it's not binding for the reasons that were stated. [00:34:32] Speaker 03: into that statement's opinion, which is one. [00:34:34] Speaker 03: It's the EPA discussing Wilmington's system three years before the relevant standard was enacted in 2011. [00:34:42] Speaker 03: So it was not speaking to whether or not the charges at issue, for instance, were reasonable under the Federal Facility Section, because that section had not been enacted in 2008. [00:34:50] Speaker 03: It was making a broader statement that your system was trying to. [00:34:54] Speaker 01: No, we understand that. [00:34:54] Speaker 03: You understand that more than me. [00:34:55] Speaker 01: Yes, Your Honor. [00:34:56] Speaker 01: OK. [00:34:56] Speaker 01: All right. [00:34:56] Speaker 01: Thank you. [00:34:57] Speaker 03: Thank you, Your Honor. [00:34:58] Speaker 01: You were almost done with your rebuttal, but to even things up, the other side went ahead and took that question five minutes. [00:35:05] Speaker 01: So we'll add five minutes to rebuttal if you need it. [00:35:08] Speaker 02: Thank you very much, Your Honor. [00:35:09] Speaker 02: So to answer a couple questions that were outstanding, the EPA brochure talks about fair and equitable. [00:35:15] Speaker 02: I should not say reasonable. [00:35:16] Speaker 02: In terms of what de novo review and applicability to contemporaneous evidence, that's Appendix 16, where the judge explained that he did not understand how contemporaneous evidence could be admissible in a de novo review. [00:35:30] Speaker 02: And speaking of de novo review, this clean slate, the issue is that the United States government, an agent of the United States government, made a factual admission [00:35:40] Speaker 02: And it's admissible, again, as an admission by a party opponent. [00:35:44] Speaker 02: If an employee said, I shot the clerk, then that evidence stands until it's shown that it does not. [00:35:50] Speaker 02: This is just simply an admission. [00:35:53] Speaker 02: And so the court is not able to simply say, I disagree. [00:35:56] Speaker 02: I'm starting this clean slate. [00:35:58] Speaker 02: I'm not going to listen to what the evidence says. [00:36:01] Speaker 02: The issue is the evidence before the court said EPA said it was fair and equitable. [00:36:05] Speaker 02: And there is no evidence to the contrary. [00:36:09] Speaker 02: It's binding until they prove that it is not. [00:36:13] Speaker 02: So next, when the... Where did they say it was reasonably related? [00:36:20] Speaker 02: Did I say that again? [00:36:21] Speaker 05: No, I'm asking you. [00:36:24] Speaker 05: They didn't. [00:36:25] Speaker 02: What was the question? [00:36:26] Speaker 02: I'm sorry. [00:36:27] Speaker 05: Where in this EPA advisory did they say it was reasonably related? [00:36:33] Speaker 02: They said that the approach that was used was fair and equitable. [00:36:38] Speaker 02: I don't know that they used the word reasonable. [00:36:41] Speaker 01: Did they use the word fair and equitable? [00:36:43] Speaker 01: I thought they said it's a strong example of an effective cost recovery. [00:36:50] Speaker 02: So this is Appendix Page 1081. [00:36:59] Speaker 02: Yeah, first part. [00:37:00] Speaker 02: Wilmington is a combined sewer system, a three step approach to establish storm utility recovery costs related to stormwater management on a fair and equitable basis. [00:37:11] Speaker 02: To address a different question, appendix page 238, Wilmington uses over 200 different property classes to classify properties and then charge them according to that. [00:37:24] Speaker 02: And to answer the question about whether we could do a drive-by, the answer in Wilmington's position is that it cannot. [00:37:31] Speaker 02: This is not about five properties. [00:37:33] Speaker 02: This is about the ordinance that is used to assess the charges on all properties. [00:37:38] Speaker 02: And so if we drove by and determined that the charges were inappropriate for five properties, then we are now discriminating against all the other properties by not engaging in an examination of the rest of the properties. [00:37:51] Speaker 02: Moreover, if we did drive by and determined that it is a vacant property, but we should charge it more [00:37:58] Speaker 02: then we are in a situation under the Supreme Court's case of Washington versus United States where we are now discriminating against the United States and charging them more and treating them discriminatorily and charging them more. [00:38:11] Speaker 02: We can't do that. [00:38:13] Speaker 01: So this is my first point about the statutory requirement. [00:38:17] Speaker 01: Are all the standards we're applying to these federal facilities equally applicable to all the private entities that are involved in this? [00:38:27] Speaker 02: That's correct, Your Honor. [00:38:28] Speaker 02: And that is why these charges are proportionate, because we apply to everyone. [00:38:33] Speaker 02: We have the data on all properties. [00:38:35] Speaker 02: And so we understand we have an approximation based on the runoff from these five properties and other five properties. [00:38:43] Speaker 02: We have it all. [00:38:44] Speaker 02: And so that is why that is the basis on which we use this. [00:38:48] Speaker 02: And I'll also say, too, that in addition to the EPA statement, we also had the testimony of a woman who's expert. [00:38:56] Speaker 02: And the court was clear. [00:38:58] Speaker 02: You know, when the court said. [00:39:01] Speaker 04: I thought the court said that basically this vacant land classification in the tax records is a bit of a black box. [00:39:09] Speaker 04: We really don't know what all the different things that can qualify for Delaware tax purposes, what constitutes a vacant land. [00:39:20] Speaker 04: And so so many, a whole purée of different properties [00:39:26] Speaker 04: be dumped into this category, that it really starts to break down the whole notion that we can just use it as a proxy for something called unimproved lands in the child study. [00:39:38] Speaker 02: So first of all, Your Honor, there's a presumption that the government records are prepared correctly. [00:39:44] Speaker 02: There's no evidence in the record. [00:39:46] Speaker 04: That's true, but we don't know, we still don't know what we don't know about the vacant land classification and what that entails. [00:39:53] Speaker 02: We don't know because the burden is on the challenger to come forward with evidence to show that they're incorrect. [00:39:57] Speaker 04: That's assumed the burden's on you to establish that using these available property tax records is a good proxy for figuring out a coefficient. [00:40:11] Speaker 04: Let's say that seems going far afield. [00:40:13] Speaker 04: That's little apples and oranges to say that these property land use records can be used for stormwater runoff coefficients. [00:40:22] Speaker 04: That feels a little far afield. [00:40:25] Speaker 04: So now it's on you to explain why can we use this [00:40:28] Speaker 04: generic vacant land label as a proxy. [00:40:33] Speaker 04: So why is it? [00:40:35] Speaker 02: The reason is just because the evidence of record from our expert established that these records are quite descriptive. [00:40:41] Speaker 04: There was some damaging testimony from the expert, though, that said, essentially, I have no idea how to combine these two things. [00:40:49] Speaker 04: And we have no idea whether something in vacant land will actually be [00:40:55] Speaker 04: an unimproved area in the Chavistown area. [00:40:57] Speaker 04: We are assuming it. [00:40:58] Speaker 02: Well, I would say it's not an assumption. [00:41:00] Speaker 02: It's an inference. [00:41:01] Speaker 02: And this is circumstantial evidence. [00:41:03] Speaker 02: And the court was required to take that into account. [00:41:06] Speaker 02: And our expert, the testimony we were talking about before, Commissioner Williams, she said, the quote was that there are differences in terms of land cover and sizes. [00:41:16] Speaker 02: And she answered affirmatively, not because of the land cover, but because of the size. [00:41:21] Speaker 02: And so there is no evidence that the land cover in these properties is different. [00:41:25] Speaker 02: There's no evidence. [00:41:27] Speaker 05: Why, that's not how I read her testimony. [00:41:30] Speaker 05: The question was, is it true that- There were a number of questions related to this. [00:41:34] Speaker 02: Right, I understand. [00:41:38] Speaker 01: Time is up, so do you have one closing remarks? [00:41:42] Speaker 02: Just finally, Your Honor, that a lot of the court's conclusions are based on speculation, which is not evidence.