Case 116

Waterford Citizens' Association v. Reilly, 970 F.2d 1287 (4th Cir. 1992).

In the early 1970s, the Environmental Protection Agency (EPA) funded the construction of a sewer system in Waterford, Virginia, a National Historic Landmark District. Because the project would have an adverse effect on the landmark district, EPA entered into a Memorandum of Agreement (MOA) with the Advisory Council on Historic Preservation and the Virginia State Historic Preservation Officer (SHPO) in which EPA agreed to mitigate the effects of the project. The MOA specifically required that any revision in the final plan for the sewer system must be submitted to the SHPO. Twelve years after the project had been completed, a developer requested the Loudon County Sanitation Authority to connect new sewer lines for a proposed townhouse development to Waterford's existing sewer system. The Sanitation Authority did not request additional grant money from EPA, nor did it consult with the SHPO before approving the developer's request.

The Council and the SHPO viewed the proposed hookup as a change in the sewer system plan. They requested that EPA comply with the terms of the MOA and direct the Sanitation Authority to submit the proposed changes to the SHPO, thus reopening the Section 106 review process. When EPA refused to honor the request, the Waterford Citizens' Association brought suit, arguing that the MOA remained in effect after the completion of the project.

The court of appeals found that under the organizational standing doctrine, the Citizens' Association had a sufficient stake in the outcome of the case to bring suit. 970 F.2d at 1290. The court also acknowledged that once an agency signs an MOA, it assumes an obligation that is enforceable. Id. at 1292. In interpreting the Waterford MOA, however, the court found that EPA's obligations under the MOA were extinguished once the project was complete. Neither EPA's assumption of obligations in the MOA nor its opportunity to exercise authority as stated in the MOA constituted undertakings, the court explained. According to the court, once construction was complete, there was no longer an undertaking. Id. The court held that the EPA was not obligated to comply with Section 106.

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