Section 404 Permit Challenges Proceed Under the APA: Upholding a Project-Wide Wetlands Alternatives Analysis

1. Introduction

This published decision addresses both the proper route for challenging a federal wetlands permit and the adequacy of the agency’s assessment of less environmentally damaging alternatives. The Fourth Circuit held that the challenge to the Corps’ completed permitting decision belonged under the Administrative Procedure Act (“APA”), rather than the Clean Water Act’s (“CWA”) provision authorizing suits to compel nondiscretionary agency duties. On the merits, it upheld the Corps’ determination that the proposed Cainhoy development was the least environmentally damaging practicable alternative (“LEDPA”).

The plaintiffs—South Carolina Coastal Conservation League, Charleston Waterkeeper, and South Carolina Wildlife Federation—challenged a Section 404 permit authorizing wetlands impacts associated with a large mixed-use development near Charleston. The federal defendants included the Corps, the Environmental Protection Agency (“EPA”), the Fish and Wildlife Service, and federal officials sued in their official capacities. Four property-owning entities intervened to defend the permit: Tract 1 Timber, LLC; Seven Sticks, LLC; Tract 7, LLC; and Cainhoy Land and Timber, LLC.

The central substantive question was whether the Corps reasonably rejected alternatives that would directly affect fewer wetlands but would develop a substantially smaller portion of the property without securing conservation protections for the remainder. The court accepted the Corps’ project-wide analysis, including its consideration of development patterns, site conditions, conservation commitments, and possible future fragmentation.

2. Background and Procedural History

The proposed development

Cainhoy comprises 9,076 acres within a larger private landholding in Berkeley County, South Carolina. Used as a pine timber farm for approximately 90 years, the property was annexed into Charleston in 1996 and zoned for a planned unit development. Its surroundings have increasingly become residential and industrial.

The proposed project would develop 3,906 acres for residences, commercial uses, schools, medical and assisted-living facilities, and other community services. Although the property contains more than 2,500 acres of wetlands, the approved proposal would affect 181.5 wetlands acres. The remaining property would receive permanent protection through conservation easements, restrictive covenants, or both.

The developers began pursuing permits in 2012. An early design contemplated 1,820.1 acres of wetlands impacts. Through avoidance and minimization efforts, that figure fell first to 187.9 acres and ultimately to 181.5 acres—approximately a 90 percent reduction from the initial design.

The agency’s review

After issuing public notice in March 2018, the Corps received extensive comments. Its 2022 Environmental Assessment (“EA”) included 84 pages addressing those comments and examined the proposed project, nine off-site alternatives, four on-site alternatives, the conservation organizations’ Dover plan, and a no-action option.

The Corps defined the overall project purpose as constructing a mixed-use development with suitable transportation access, demographic support, zoning, infrastructure, and access to schools and hospitals to serve the growing Charleston metropolitan area. It issued the Section 404 permit in May 2022.

The litigation

The plaintiffs invoked both the APA and the CWA citizen-suit provision. The district court concluded that jurisdiction rested on the citizen-suit provision and dismissed the APA claim. It subsequently granted summary judgment to the Corps and intervenors, concluding that the agency’s alternatives analysis was not arbitrary or capricious, and dismissed the case with prejudice.

The Fourth Circuit disagreed with the district court’s choice of statutory review mechanism but affirmed the judgment because the error did not affect the merits analysis.

3. Summary of the Court’s Holdings

1. The APA governs this permit challenge. The plaintiffs challenged an affirmative, final permitting decision, not a failure to perform a nondiscretionary duty actionable under 33 U.S.C. § 1365(a)(2).
2. The district court’s error was harmless. The court explained that the same arbitrary-and-capricious standard applied to the challenged agency decision, so the incorrect statutory basis did not require reversal.
3. The Corps reasonably assessed practicable alternatives. Its explanations addressed off-site options, alternative on-site layouts, the Dover plan, and denial of the permit.
4. Lower immediate wetlands acreage did not alone establish a superior practicable alternative. The Corps reasonably considered whether an alternative fulfilled the overall project purpose and what consequences might follow from leaving most of the property available for independent development.
5. The alleged burden shifting was unsupported. The plaintiffs identified no language showing that the district court transferred the developers’ regulatory burden to them.

4. Governing Legal Framework

Section 404 and the alternatives requirement

Section 404 authorizes the Corps to issue permits for discharges of dredged or fill material into covered waters. That authority is constrained by the governing regulations. Under 40 C.F.R. § 230.10(a), a permit may not issue if a practicable alternative would cause less harm to the aquatic ecosystem without producing other significant adverse environmental consequences.

An alternative is “practicable” when it is available and capable of implementation, considering cost, existing technology, and logistics in light of the overall project purpose. Accordingly, the legal inquiry is not simply which drawing shows the smallest wetlands footprint. It also asks whether that alternative can realistically accomplish the relevant project purpose.

Presumptions for non-water-dependent projects

Cainhoy was a non-water-dependent project: its basic purpose did not require placement in wetlands or another special aquatic site. Two regulatory presumptions therefore applied:

• Practicable alternatives avoiding special aquatic sites are presumed available.
• Alternatives outside special aquatic sites are presumed to have less adverse aquatic impact.

The applicant must clearly demonstrate that those presumptions have been overcome. The decision did not remove that obligation or transfer it to environmental challengers.

Judicial review

Under 5 U.S.C. § 706(2)(A), courts set aside agency action that is arbitrary, capricious, an abuse of discretion, or otherwise unlawful. Review is searching but narrow: the court examines whether the agency considered relevant information and rationally connected its findings to its decision, rather than selecting its own preferred development plan.

5. Precedents Cited and Their Influence

A. The proper statutory route for review

National Wildlife Federation v. Hanson, 859 F.2d 313 (4th Cir. 1988)

This was the principal precedent supporting the district court’s jurisdictional ruling. The Fourth Circuit explained, however, that the earlier case addressed whether the Corps could be joined in a citizen suit involving the EPA’s wetlands responsibilities. The applicability of the citizen-suit provision itself was not disputed there.

Its statement permitting suit when the Corps abdicates its nondiscretionary responsibility and the EPA fails to exercise oversight did not establish a general citizen-suit mechanism for reviewing completed permit decisions. The court distinguished the precedent rather than overruling it.

Bennett v. Spear, 520 U.S. 154 (1997)

The Supreme Court’s interpretation of a nearly identical citizen-suit provision supplied an important limiting principle. Such language does not authorize judicial review of every alleged statutory violation; otherwise, litigants could circumvent the APA’s final-agency-action requirement.

The Fourth Circuit used that reasoning to reject a broad reading of the CWA provision that would encompass the plaintiffs’ substantive disagreement with an issued permit.

Sanitary Bd. of City of Charleston v. Wheeler, 918 F.3d 324 (4th Cir. 2019), and Norton v. S. Utah Wilderness All., 542 U.S. 55 (2004)

These decisions supplied the definition of a nondiscretionary act: an act the agency “is required to take.” They helped distinguish an effort to compel a legally required action from an effort to invalidate action already taken. Because the Corps had completed its permit decision, the plaintiffs’ disagreement concerned the legality of that decision, not an unperformed mandatory duty.

Ohio Valley Env't Coal., Inc. v. United States Army Corps of Eng'rs, 828 F.3d 316 (4th Cir. 2016)

This decision demonstrated the circuit’s established practice of reviewing challenges to Corps-issued Section 404 permits under the APA. It supported the conclusion that the present challenge belonged within that same review framework.

Nat'l Audubon Soc'y v. United States Army Corps of Eng'rs, 991 F.3d 577 (4th Cir. 2021)

This precedent reinforced the same point: substantive challenges to final Section 404 permitting decisions ordinarily proceed through APA review. Together, these permit cases undercut the district court’s reliance on the citizen-suit provision.

B. The substantive standard of review

S.C. Coastal Conservation League v. United States Army Corps of Eng'rs, 127 F.4th 457 (4th Cir. 2025)

This recent circuit precedent supplied the central merits standard. An agency must consider relevant factors and avoid a clear error of judgment, but a reviewing court cannot substitute its judgment for the agency’s. Deference is warranted when the agency examines relevant data and explains a rational connection between its findings and its choice.

That formulation drove the outcome: the court evaluated the quality of the Corps’ explanations, rather than independently choosing among the competing plans.

Ohio Valley Env't Coal. v. Aracoma Coal. Co., 556 F.3d 177 (4th Cir. 2009)

The opinion incorporated this earlier decision through the preceding precedent’s quotation of the arbitrary-and-capricious standard. Its influence was methodological: judicial review must be careful without becoming a substitute permitting process.

C. Appellate and summary-judgment standards

• Flame S.A. v. Freight Bulk Pte. Ltd., 762 F.3d 352 (4th Cir. 2014), established de novo review of the district court’s conclusions about its subject-matter jurisdiction.
• Deque Sys. Inc. v. Browserstack, Inc., 177 F.4th 585 (4th Cir. 2026), established de novo review of the summary-judgment ruling.
• Sigley v. ND Fairmont LLC, 129 F.4th 256 (4th Cir. 2025), supplied the Rule 56 standard: no genuine dispute of material fact and entitlement to judgment as a matter of law.
• Canaan Christian Church v. Montgomery Cnty., 29 F.4th 182 (4th Cir. 2022), quoting CoreTel Va., LLC v. Verizon Va., LLC, 752 F.3d 364 (4th Cir. 2014), explained that conclusory allegations, speculation, or merely a scintilla of evidence do not establish a genuine factual dispute.

These procedural authorities did not dilute the developers’ substantive regulatory obligations. They governed appellate review and the parties’ litigation positions. De novo review of the district court also did not convert the court’s review of the Corps into a fresh environmental assessment.

6. Analysis of the Court’s Reasoning

A. Completed agency action differs from an unperformed mandatory duty

The jurisdictional analysis turned on the character of the alleged wrong. The plaintiffs asserted that the Corps had inadequately evaluated alternatives before issuing its permit. That is a challenge to the substance of final agency action, even if framed as a failure to comply with statutory obligations.

The APA permits review of final agency action where no other adequate judicial remedy exists. Because the relevant CWA citizen-suit provision did not cover this challenge, it did not displace APA review. The opinion thus prevents litigants from converting an ordinary permit challenge into a mandatory-duty suit simply by describing an allegedly deficient decision as an agency “failure.”

The holding concerns the nondiscretionary-duty provision in § 1365(a)(2). It does not eliminate CWA citizen suits generally.

B. The Corps adequately investigated off-site alternatives

The plaintiffs argued that the agency selected alternatives destined to fail. The court instead emphasized that the Corps broadened the developers’ proposed search by increasing the permissible commute from 25.9 minutes to 45 minutes.

The search considered nine sites against criteria addressing distance from Charleston, commuting time, acreage, developable uplands, highway access, utility infrastructure, zoning, and availability. The sites failed for identified reasons, including existing development commitments, government ownership, conservation restrictions, or inadequate location and infrastructure characteristics.

The plaintiffs’ concession that no plausible off-site alternative existed further weakened their argument. The court nevertheless relied on the agency’s documented search and explanations, not merely the concession.

C. The on-site analysis required more than comparing acreage totals

The four conventional on-site alternatives would have affected between approximately 381 and 1,820 wetlands acres, exceeding the approved plan’s 181.5 acres. The more significant objection was that the Corps should have developed additional on-site options below that figure.

The Corps explained that the irregular arrangement of wetlands and adjacent uplands made some wetlands impacts necessary for an effectively designed community. The court accepted that site-specific explanation alongside the documented avoidance and minimization process.

The approximately 90 percent reduction from the original proposal reinforced the conclusion that the agency meaningfully pursued avoidance. It was supporting evidence, however, not an independent legal rule: improving an initial proposal does not by itself establish that no less damaging practicable alternative remains.

D. The Dover plan raised questions of both project purpose and future land use

The Dover plan presented the strongest apparent acreage comparison. Its four versions would directly affect between zero and 13.2 wetlands acres. Nevertheless, the Corps identified material differences from the proposed project:

• It concentrated development on approximately 1,000 acres rather than addressing the property comprehensively.
• It emphasized multifamily housing, unlike the proposed plan’s single-family housing emphasis.
• It optimized housing and commercial uses while incorporating little greenspace.
• It left approximately 8,000 acres without corresponding conservation commitments.

The Corps regarded those differences as making the Dover plan a “distinctly different project.” It also reasoned that the unprotected remainder could undergo independent development, potentially increasing overall wetlands impacts.

The court therefore treated the plans as more than alternative layouts for an identical undertaking. Their scale, development pattern, and treatment of remaining land differed. This reasoning supports project-wide analysis, but it does not establish that every smaller or denser proposal may automatically be rejected. The agency must still explain why the differences matter to the legitimate overall purpose and environmental comparison.

E. Denial of the permit did not necessarily mean permanent preservation

The Corps assessed the no-action alternative against a realistic development baseline. Denying this permit would not itself prohibit future development of the privately owned property. The agency anticipated smaller, separate projects, additional wetlands permit requests, and the loss of coordinated conservation protections.

The court accepted that explanation as reasonable. Its conclusion was conditional: fragmented future development could produce greater impacts. The decision did not find that those future impacts were certain, nor did it establish that permit denial always causes more environmental harm.

F. Conservation commitments mattered, but did not replace alternatives review

Conservation easements, restrictive covenants, and protection of ecologically valuable wetlands formed an important part of the Corps’ comparison. Their relevance lay particularly in the difference between coordinated development and alternatives leaving substantial acreage available for later projects.

The court did not announce that compensatory mitigation alone permits approval despite an available, less damaging practicable alternative. Its conclusion rested on the complete alternatives analysis, including practicability, project purpose, site conditions, and conservation consequences.

G. The burden-shifting objection failed on the record

The developers retained the regulatory obligation to overcome the presumptions applicable to non-water-dependent projects. The court rejected the plaintiffs’ contrary argument because they identified no burden-shifting language in the district court’s order. Explaining why the Dover plan was impracticable did not itself transfer the burden.

Likewise, although the plaintiffs demanded detailed, clear, and convincing information, the opinion did not create a new evidentiary standard bearing that label. It applied the regulation’s clear-demonstration requirement through ordinary APA review.

7. Potential Impact and Limits

Clearer pleading and review pathways

The decision directs future challengers of completed Section 404 permit decisions toward the APA. It also confines reliance on mandatory-duty citizen suits to claims that actually concern an unperformed nondiscretionary obligation.

Greater importance of the administrative record

The opinion rewards a documented, iterative permitting process. Broadened search criteria, responses to comments, site-specific explanations, and express treatment of competing proposals collectively supported affirmance. Future applicants and agencies have a strong incentive to explain rejected alternatives individually rather than rely on generalized assertions of impracticability.

Project-wide conservation may influence the comparison

The decision supports considering how an alternative treats the entire property, not merely its immediate construction footprint. Challengers proposing a smaller development may therefore strengthen their position by addressing the legal protection and likely future use of land left undeveloped.

Project purpose remains consequential—and potentially contested

Because practicability depends on overall project purpose, choices about scale, housing type, and development pattern can determine which alternatives survive review. This opinion accepts the Corps’ reasoning on this record; it does not authorize applicants to define their purposes so narrowly that meaningful alternatives disappear.

The holding remains fact-specific

The court approved neither a general 181.5-acre impact threshold nor a categorical preference for large developments. It also did not resolve separate wetlands-jurisdiction, endangered-species, or environmental-review claims merely because other agencies participated or the Corps prepared an EA. Its substantive holding concerns the challenged LEDPA determination.

8. Complex Concepts Simplified

Section 404 permit

Federal authorization to discharge dredged or fill material into waters covered by the CWA, including qualifying wetlands.

LEDPA

The least environmentally damaging option among alternatives that are actually available and feasible for the project’s overall purpose.

Non-water-dependent project

A project whose basic function does not require a wetlands location. A residential and commercial community ordinarily falls into this category.

Rebuttable presumption

A legally required starting assumption that can be overcome by sufficient evidence. Here, the applicant had to overcome assumptions favoring alternatives outside special aquatic sites.

Arbitrary-and-capricious review

A judicial check on whether an agency considered the right information and explained its choice rationally—not a court-run redesign of the project.

Conservation easement or restrictive covenant

A legal restriction limiting future use of land. Such protection differs from land simply being left undeveloped for the moment.

Harmless error

An error that does not justify reversal because it did not affect the outcome. Here, the incorrect review pathway did not change the applicable merits standard.

9. Conclusion

The decision clarifies that this challenge to a completed Section 404 permit proceeds under the APA, not the CWA’s nondiscretionary-duty citizen-suit provision. It also confirms that a defensible LEDPA analysis may consider project purpose, site constraints, conservation commitments, and the likely consequences of fragmented development—not merely immediate wetlands acreage.

Its broader lesson is one of reasoned explanation. The Corps prevailed because it documented the alternatives, identified their shortcomings, and connected the record to its decision. The ruling preserves deferential judicial review without dispensing with the applicant’s obligation to justify wetlands impacts.