                     United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 05-1289
                                    ___________

Ripplin Shoals Land Company, LLC        *
                                        *
             Appellant,                 *
                                        * Appeal from the United States
      v.                                * District Court for the
                                        * Eastern District of Arkansas.
United States Army Corps of Engineers; *
Wally Z. Walters, Colonel, District     *
Engineer, Little Rock District,         *
Corps of Engineers,                     *
                                        *
             Appellees.                 *
                                   ___________

                              Submitted: October 10, 2005
                                 Filed: March 17, 2006
                                  ___________

Before BYE, BEAM, and SMITH, Circuit Judges.
                            ___________

SMITH, Circuit Judge.

        Ripplin Shoals Land Company, LLC ("RSLC") brought suit against the United
States Army Corps of Engineers ("the Corps"), requesting declaratory and injunctive
relief. The district court dismissed RSLC's complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6), stating that its prior orders in the separate but somewhat related
case of Arkansas Nature Alliance, Inc. v. United States Army Corps of Engineers, No.
02-00037 (E.D. Ark. filed Apr. 9, 2002), had preclusive effect and barred the instant
action. We reverse and remand for further proceedings.1

                                       I. Facts
       We accept as true all facts alleged in the complaint. RSLC, the developer of
Landers Island on the White River, desired improved access to enable development
of the island for recreation and vacation homes. RSLC applied to the Corps for a
permit to add to an already existing low-water bridge. The Corps issued a Letter of
Permission ("LOP") to allow the proposed changes. After receiving the LOP, RSLC
constructed the improved low-water bridge and began developing a 49-lot subdivision
on Landers Island. Thereafter, an environmental group, the Arkansas Nature Alliance,
sued the Corps, challenging the LOP issued to RSLC, claiming a violation of the
National Environmental Policy Act ("NEPA"). Arkansas Nature Alliance, Inc. v.
United States Army Corps of Engineers, No. 02-00037 (E.D. Ark. filed Apr. 9, 2002).
RSLC moved to intervene. The district court allowed RSLC to intervene, as the
developers, for remedial issues and to participate in all further proceedings in which
they had an interest.

       In Arkansas Nature Alliance, the district court found that the Corps' issuance
of the LOP to modify the existing low-water bridge was not reasonable and ordered
the Corps to revoke it. The district court ordered the Corps to "address the original
application under the full permit process regulation and NEPA regulation, which
requires the preparation of the proper environmental documents . . . ." The district
court also directed that the bridge be returned to its original dimensions. As
intervenors, RSLC filed a motion for clarification, asking whether an Environmental
Impact Statement ("EIS") was necessary in the permitting process. The district court
entered an order specifically stating that the permitting process used by the Corps was
to include an EIS.


      1
       RSLC only appeals the dismissal of Count I of its complaint.

                                         -2-
        Rather than continue with its plans, RSLC decided to withdraw its application
to improve the already existing low-water bridge, which was the subject of the
Arkansas Nature Alliance litigation. Instead, RSLC submitted a new application that
described an entirely new span bridge design. RSLC asked the Corps to authorize the
span bridge under the Nationwide Permit Process ("NWP").2 Thereafter, RSLC
removed the improvements to the existing low-water bridge and returned the structure
to its original low-water dimensions.

      RSLC submitted a new permit application to the Corps, requesting approval for
construction of a span bridge pursuant to Nationwide Permit 14 for Linear
Transportation Crossings ("NWP14"). Before processing RSLC's new span bridge
application, the Corps sought relief under Fed. R. Civ. P. 60(b)(5) from the order in
the Arkansas Nature Alliance case, which required an EIS for the prior low-water
bridge modifications. The district court denied the Corps' motion.

       Relying on the district court's order regarding the Corps' Rule 60(b)(5) motion,
the Corps advised RSLC that a Nationwide Permit could not be issued and that the
project would require a full public interest review, including an EIS to be prepared by
a third party contractor selected by the Corps at RSLC's expense. Specifically, the
Corps stated "[a]s directed by the court's order, your request for a span bridge to
Lander's Island cannot be issued through the Corps of Engineer's Nationwide Permit
Program." The Corps instructed RSLC that it had 15 days to respond to these
requirements or its application would be withdrawn.

      RSLC objected to the Corps' approach, arguing that the Corps' regulations
require a review of the span bridge application for eligibility under NWP14 apart from
any prior consideration of the low-water bridge application. Further, RSLC stated that

      2
       The NWP provides a procedure for abbreviated review of projects deemed to
have minimal environmental impacts. If approved under the NWP, RSLC's new
project would avoid the expense of an EIS.

                                         -3-
because the Corps had not made a final decision on the span bridge and, thus, had no
administrative record, the Arkansas Nature Alliance court had no jurisdiction to make
decisions regarding the span bridge application. The Corps then notified RSLC of its
final agency action on the pending span bridge application, stating "your application
has been officially withdrawn and the permitting evaluation process has been closed."
RSLC filed the instant action to compel the Corps to proceed on its application for a
span bridge under the NWP. The Corps filed a motion to dismiss pursuant to Rule
12(b)(6). The district court granted the Corps' motion, stating that its prior orders in
the Arkansas Nature Alliance case barred the instant action under the doctrines of res
judicata and collateral estoppel.

                                     II. Discussion
       RSLC contends that the district court erred in dismissing its complaint pursuant
to Rule 12(b)(6), arguing that the district court's prior decisions in Arkansas Nature
Alliance have no preclusive effect on RSLC's right to have its new permit application
for a different project reviewed for verification under the NWP. RSLC maintains that
the Arkansas Nature Alliance court had no jurisdiction to rule on future permit
decisions by the Corps based upon new applications.

       Moving to the merits of the case, RSLC argues that, as a matter of law, the
Corps must review each incoming application for NWP verification, and in refusing
to do so in this case, the Corps violated its own regulations. RSLC avers that the
Corps' argument that it has discretion to deny any Nationwide Permit application is
disingenuous. The district court relied on the Corps' discretionary argument, claiming
that even if it were to reach the merits of RSLC's claims, the conclusion would be the
same. However, the Corps admitted that it was coerced by the district court to adopt
its advisory opinion rather than rely on the information in the administrative record.
In fact, in the Corps' letter to RSLC regarding its decision on the span bridge, the
Corps stated that "[a]s directed by the court's order, your request for a span bridge
cannot be issued through the Corps of Engineer's Nationwide Permit Program." This

                                          -4-
statement illustrates that the Corps never deferred to the discretion of the District
Engineer. For these reasons, RSLC urges this court to reverse the judgment of the
district court and remand this case for further proceedings.

        The Corps responds by stating that res judicata and collateral estoppel preclude
RSLC from re-litigating the requirements necessary for approval of a Corps permit
regarding a bridge to Landers Island. Moreover, the Corps claims that the issuance of
a Nationwide Permit is at the discretion of the District Engineer, and he is authorized
to set the same requirements as imposed by the district court. In the alternative, the
Corps maintains that even if res judicata and collateral estoppel did not apply, this
lawsuit is unfounded.

        The Corps states that permit applicants are not entitled to a Nationwide Permit
as a matter of right. As long as there is reason to believe that there is public dissent to
the proposed project, the District Engineer has the discretion to require the applicant
to go through the individual permit application process.3 Further, the Corps argues that
it can rely on the prior order of the district court in exercising its discretion on whether


       3
        33 C.F.R. § 330.1(d)--Nationwide Permit Program—states in relevant part:

       Discretionary Authority. District and division engineers have been
       delegated a discretionary authority to suspend, modify, or revoke
       authorizations under an NWP. This discretionary authority may be used
       by district and division engineers only to further condition or restrict the
       applicability of an NWP for cases where they have concerns for the
       aquatic environment under the Clean Water Act section 404(b)(1)
       Guidelines or for any factor of the public interest. . . . If the DE [District
       Engineer] finds that the proposed activity would have more than minimal
       individual or cumulative net adverse effects on the environment or
       otherwise may be contrary to the public interest, he shall modify the
       NWP authorization to reduce or eliminate those adverse effects, or he
       shall instruct the prospective permittee to apply for a regional general
       permit or an individual permit.

                                            -5-
a Nationwide Permit is appropriate. The Corps claims that in this case, as was shown
from the earlier lawsuit, there was public dissent against the project, not only because
of the form of the low-water bridge, but also because of the cumulative impacts of
constructing a subdivision on a low-lying island in the middle of the White River.
These concerns did not change between the end of the original lawsuit and the time
RSLC filed its application for a span bridge. The Corps posits that regardless of what
the district court said in its Rule 60(b) ruling, the District Engineer would have been
negligent to ignore the possible cumulative impacts and public opinion against the
bridge. In sum, the Corps urges this court to affirm the district court's dismissal of
RSLC's action based on res judicata and collateral estoppel.

      We review de novo the district court's dismissal for failure to state a claim
pursuant to Rule 12(b)(6), taking all facts as alleged in the complaint as true.
Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934, 937 (8th Cir. 2005); Ferris, Baker
Watts, Inc. v. Ernst & Young, LLP, 395 F.3d 851, 853 (8th Cir. 2005). Both res
judicata and collateral estoppel have the impact of foreclosing future litigation based
upon factors found to exist in past but related litigation. Upon review, we find that
neither the doctrines of res judicata nor collateral estoppel preclude RSLC from
pursuing its complaint against the Corps.

                                     A. Res Judicata
       RSLC contends that res judicata does not bar its claim because its claim did not
exist when the first suit was litigated. RSLC submits that the Corps could not have
denied an application that did not exist; thus, res judicata, or claim preclusion, cannot
apply. Further, there were no claims presented in the previous litigation between
RSLC and the Corps, and no claims between RSLC and the Corps were resolved in
Arkansas Nature Alliance. Lastly, because RSLC's span bridge application was neither
submitted to nor denied by the Corps at the time of the first case, RSLC had no
opportunity to litigate the issue. In response, the Corps states that res judicata applies
to those in privity with the parties in the litigation. In the district court's February 14,

                                            -6-
2003, Arkansas Nature Alliance decision, it allowed RSLC's predecessors in interest
to intervene in the litigation and become subject to that decision and any future orders.
When considering whether to proceed under the NWP for the span bridge, the Corps
sought clarification from the district court in its Rule 60(b) motion, and the district
court held, in effect, that an EIS was required. The Corps argues that it was
representing the interests of RSLC in filing its Rule 60(b) motion. Moreover, RSLC
filed a brief in support of the Corps' argument. Thus, the Corps posits that RSLC had
a full and fair opportunity to litigate the issue in the previous case.

       Res judicata applies to prevent repetitive suits involving the same cause of
action. Lundquist v. Rice Mem'l Hosp., 238 F.3d 975, 977 (8th Cir. 2001). "Final
judgment on the merits of an action precludes the same parties from relitigating issues
that were or could have been raised in that action." Id. There are three elements this
court must consider to determine whether res judicata will bar a party from asserting
a claim: (1) whether the prior judgment was entered by a court of competent
jurisdiction; (2) whether the prior decision was a final judgment on the merits; and (3)
whether the same cause of action and the same parties or their privies were involved
in both cases. Id. "If the three elements are met, the parties are thereafter bound 'not
only as to every matter which was offered and received to sustain or defeat the claim
or demand, but as to any other admissible matter which might have been offered for
that purpose.'" Id. (quoting C.I.R. v. Sunnen, 333 U.S. 591, 597 (1948)). However, res
judicata does not apply to claims that did not exist when the first suit was filed. Id.

       We agree with RSLC that res judicata does not act to bar its claims against the
Corps in the instant lawsuit. First, while the prior judgment in Arkansas Nature
Alliance was entered by a court of competent jurisdiction, the district court did not
have the authority to issue what was, in essence, an advisory opinion on any separate
future applications filed by RSLC, i.e., RSLC's span bridge application. "One kind of
advisory opinion is an opinion advising what the law would be upon a hypothetical
state of facts." Pub. Water Supply Dist. No. 8 v. City of Kearney, 401 F.3d 930, 932

                                          -7-
(8th Cir. 2005) (internal quotations and citations omitted). Article III limits the federal
courts to deciding "Cases" and "Controversies" and, thus, prohibits the district court
from issuing advisory opinions. Id. Moreover, the controversy must be live when the
court decides the issues. South Dakota v. Hazen, 914 F.2d 147, 150 (8th Cir. 1990).
Here, when the Corps sought what was essentially an advisory opinion when it filed
its Rule 60(b) motion, it sought clarification on an issue that was never before the
district court in the Arkansas Nature Alliance case, i.e., an entirely new span bridge.
Therefore, any opinion given by the district court was no more than advisory.

        Second, the prior decision in Arkansas Nature Alliance was not a final decision
on the merits of RSLC's span bridge application. In fact, RSLC's span bridge
application did not exist at the time of the district court's final decision on the merits.
"'It is well settled that claim preclusion [res judicata] does not apply to claims that did
not arise until after the first suit was filed.'" Lundquist, 238 F.3d at 977 (quoting Baker
Group, L.C. v. Burlington Northern & Santa Fe Ry Co., 228 F.3d 883, 886 (8th Cir.
2000)) (emphasis in original). Lastly, the same cause of action is not involved in both
cases. The Arkansas Nature Alliance case involved a cause of action by an
environmental group against the Corps for issuing the LOP to RSLC for
improvements to an existing low-water bridge. The district court held that those
improvements were not reasonable and ordered RSLC to return the existing low-water
bridge back to its original dimensions. The district court specifically stated, "I order
the Corps and the individual Defendant to address the original application under the
full permit process regulations and NEPA regulations, which require the preparation
of the proper environmental documents, public notice, and hearing." (emphasis
added). RSLC complied with that order. The instant case was brought by RSLC to
compel the Corps to consider its new span bridge application under NWP14. This span
bridge application was submitted after, and as an alternative to, the low-water bridge
modifications addressed in the Arkansas Nature Alliance case. Consequently, the
causes of action are different. Because the same cause of action is not at issue in these



                                           -8-
two cases, we find that res judicata does not bar RSLC from pursuing the instant cause
of action against the Corps.

                                  B. Collateral Estoppel
       RSLC asserts that collateral estoppel should not bar the instant action because
the issues here are not identical to those in Arkansas Nature Alliance. In fact, the
district court did not specify the issue(s) it believed were being relitigated for purposes
of applying collateral estoppel. Further, the issues raised by the Corps' Rule 60(b)
motion in Arkansas Nature Alliance are not identical to those issues in this case. At
the time of the Rule 60(b) motion, the Corps had not determined the RSLC span
bridge permit issue, and no administrative record had been compiled. RSLC argues
that the Corps was asking the Arkansas Nature Alliance court to give an advisory
opinion about a hypothetical future action. RSLC states that the Corps cannot abdicate
its substantive decision-making duty by asking a court for advice. In that same vein,
RSLC posits that district courts cannot advise federal agencies, they can only review
final agency actions. RSLC also claims that it was not allowed a full and fair
opportunity to be heard on the issues presented by this case; no such review was
possible at the time because there was no final agency action.

       The Corps responds by claiming that collateral estoppel prevents re-litigation
of issues actually litigated in a prior lawsuit. The Corps states that even though RSLC
was not a named party in the Arkansas Nature Alliance litigation, its interests were
represented by the Corps, and RSLC was granted intervenor status. The arguments
being made now by RSLC are the same that were made in the Corps' Rule 60(b)
motion, i.e., that the plans have substantially changed and an individual permit,
including an EIS, should not be required. The requirement of an EIS before the Corps
can authorize RSLC to provide access to the island has been litigated and decided.

      We apply the doctrine of collateral estoppel when: (1) the issue sought to be
precluded is identical to the issue previously decided; (2) the prior action resulted in

                                           -9-
a final adjudication on the merits; (3) the party sought to be estopped was either a
party or in privity with a party to the prior action; and (4) the party sought to be
estopped was given a full and fair opportunity to be heard on the issue in the prior
action. Wellons, Inc. v. T.E. Ibberson Co., 869 F.2d 1166, 1168 (8th Cir. 1989) (citing
Arkla Exploration Co. v. Texas Oil & Gas Corp., 734 F.2d 347, 356 (8th Cir. 1984),
cert. denied, 469 U.S. 1158 (1985)). In assessing this issue de novo, we address the
four-element analysis seriatim.

       First, the issue sought to be precluded is not identical to the issue previously
decided. The previous issue concerned RSLC's LOP to improve the existing low-water
bridge. The current issue of RSLC's new span bridge application submitted to the
Corps was not before the district court in the Arkansas Nature Alliance case. Second,
as stated above, the prior action did not result in a final adjudication on the merits of
the instant action. The prior action resulted in a final adjudication on the merits of
RSLC's LOP to improve the already existing low-water bridge but not as to the
construction of a new span bridge. Concerning the third factor, there is no dispute that
RSLC was a party in the Arkansas Nature Alliance case because of its intervention.

        Lastly, RSLC was not given a full and fair opportunity to be heard on the issue
of its span bridge application in the prior action. The Corps had neither approved nor
rejected RSLC's span bridge application when it filed the Rule 60(b) motion before
the district court. And after the district court's ruling on the Rule 60(b) motion, the
Corps cited the district court as its reason for refusing to allow the span bridge
application to proceed under the NWP. We decline to rely on the fact that the District
Engineer could have exercised his discretion and denied RSLC's permit, as argued by
the Corps and the district court, because the District Engineer did not exercise his
discretion in this case; the permit was denied as a direct result of the district court's
advisory opinion. Thus, RSLC was not given a full and fair opportunity to litigate this
issue before the district court. This case is unique and our holding does not establish
any general right to litigate the Corps' decision to deny NWP authorization. The Corps

                                          -10-
may yet deny RSLC's span bridge application for treatment under NWP14, but, on this
record, RSLC is nonetheless entitled to having the Corps decide the application on its
own merits.

       Based on the foregoing de novo analysis, we conclude that the district court
erred in granting the Corps' motion to dismiss pursuant to Rule 12(b)(6). Accordingly,
we reverse and remand for further proceedings consistent with this opinion.

BYE, Circuit Judge, dissenting.

       While I agree with the majority as to the Corps’ interpretation of its regulations
requiring it to evaluate all incoming applications for NWP eligibility, I respectfully
dissent as this case is not ripe for judicial review at this juncture. I also dissent
because the Corps was within its authority to deny the NWP authorization and require
an environmental impact statement (EIS), irrespective of the district court’s earlier
decision in Arkansas Nature Alliance, Inc. v. United States Army Corps of Engineers,
266 F. Supp. 2d 876 (E.D. Ark.), modified, 266 F. Supp. 2d 895 (E.D. Ark. 2003).

                                      I. Ripeness

       Before reaching a decision as to the merits of RSLC’s challenges to the district
court’s opinion on res judicata and collateral estoppel grounds, we should determine
whether we have jurisdiction. Indeed, we have an obligation to raise jurisdictional
issues sua sponte “when there is an indication that jurisdiction is lacking.” Thomas
v. Basham, 931 F.2d 521, 522-24 (8th Cir. 1991); see also James Neff Kramper
Family Farm Partnership v. IBP, Inc., 393 F.3d 828, 830 (8th Cir. 2005). RSLC is
essentially challenging the Corps’ determination it must produce an EIS. Ripeness
concerns inhere in challenges raised prior to a final determination of an applicant’s
individual permit application. Upon review, I conclude this case is not ripe for
judicial review and we lack jurisdiction. See Pub. Water Supply Dist. No. 8 v. City

                                          -11-
of Kearney, 401 F.3d 930, 932 (8th Cir. 2005) (concluding ripeness is a jurisdictional
challenge).

       Where there is no final agency action, a claim in federal court challenging the
agency’s action is not ripe for review. See Lane v. United States Dep’t of Ag., 187
F.3d 793, 795 (8th Cir. 1999). The Corps, in its Motion to Dismiss, claims “[t]here
is a reviewable agency action as evidenced by Exhibits Q, R, and S to the Amended
Complaint.” The documents to which the Corps refers are letters informing RSLC its
application for NWP authorization is denied and how to proceed for an individual
permit application. The documents also establish RSLC failed to produce timely the
information requested by the Corps and, as a result, the Corps considered RSLC’s
individual permit application withdrawn. The documents inform RSLC if it wishes
to submit the requested information, it can do so at a later date. These documents
therefore constitute a denial without prejudice of RSLC’s span bridge individual
permit application.4

       A denial of an authorization under the NWP program is not the end of a permit
application. Rather, once a proposed project is denied under the NWP program, it is
reviewed for authorization under the individual permit program. See 33 C.F.R.
§ 330.1(c), (f); 33 C.F.R. §§ 320.1(c), 325.5. Accordingly, a denial of an
authorization under the NWP program does not conclusively determine the disputed
issue and therefore cannot constitute a “final agency action” ripe for judicial review.
See Lotz Realty Co. v. United States, 757 F. Supp. 692, 696 (E.D. Va. 1990); Inn of


      4
        Exhaustion of administrative appeals is a prerequisite to filing a lawsuit in
federal court. 33 C.F.R. §§ 331.12, 331.10. Where no administrative appeal process
exists for a final agency action, the action is reviewable in federal court if it
constitutes a “final agency” decision. 5 U.S.C. § 704. Here, there is no right to
administratively appeal the denial of an application for NWP authorization. See 33
C.F.R. §§ 320.1(a)(2), 320.4(j), 331.2, 325.5(b). Accordingly, our jurisdiction to
review the action depends upon whether the action was final.

                                         -12-
Daphne v. United States, No. Civ.A. 97-0796-BH-S, 1998 WL 34024732, at *4-6
(S.D. Ala. Aug. 26, 1998) (unpublished); see also Indus. Hwy. Corp. v. Danielson,
796 F. Supp. 121, 126-30 (D.N.J. 1992); Avella v. United States Army Corps of
Eng’rs, No. 89-10064-CIV-KING, 1990 WL 84499 (S.D. Fla. Jan. 22, 1990), aff’d,
916 F.2d 721 (11th Cir. 1990) (both unpublished); cf. Donnell v. United States, 834
F. Supp. 19, 25 (D. Me. 1993) (noting that no administrative appeal is authorized for
use of discretionary authority to modify, suspend, or revoke an NWP).

        The letter informing RSLC its application for an individual permit had been
withdrawn does not constitute a final agency action. “District engineers will decide
on all applications not later than 60 days after receipt of a complete application, unless
. . . (iv) [a] timely submittal of information or comments is not received from the
applicant.” 33 C.F.R. § 325.2(d)(3)(iv). If timely submittal of requested information
is not received,


      [t]he applicant will be given a reasonable time, not to exceed 30 days, to
      respond to requests of the district engineer. The district engineer may
      make such requests by certified letter and clearly inform the applicant
      that if he does not respond with the requested information or a
      justification why additional time is necessary, then his application will
      be considered withdrawn or a final decision will be made, whichever is
      appropriate.


Id. § 325.2(d)(5). In the instant case, the Corps decided to consider RSLC’s
application withdrawn as opposed to making a final decision on the application.
Accordingly, no final decision was made on RSLC’s application. This is made clear
by the Corps’ letter which states, “[t]he 15-day period to respond to our request for
additional information has expired, therefore, your application has been officially
withdrawn and the permitting evaluation process has been closed. Should you decide
to submit the additional information required for a full public interest review please
contact our office.”

                                          -13-
        Indeed, the denial of a permit application resulting from an applicant’s
procedural default at the agency level is not properly reviewed by a federal court. See
Lotz Realty Co., 757 F. Supp. at 696. In a substantially similar case, a project
authorized under the NWP program was cancelled due to a procedural defect for
failure to provide the Corps with requested information–a cancellation deemed by the
reviewing court to be a non-final agency action. See Inn of Daphne, 1998 WL
34024732, at *6 (“The cancellation was not a denial, but a non-merits termination
because of plaintiff’s non-action. . . . [I]t is clearly not a final agency decision in the
first instance.”).

       The public policy purposes underlying the ripeness doctrine should require us
to conclude a denial of an authorization under the NWP program is not ripe for
judicial review until the Corps has made a final determination regarding the
applicants’ individual permit. Any other approach would allow applicants to
adjudicate the merits of an application twice, once under the NWP program, and again
under the individual permit program. The ripeness doctrine as it relates to agency
actions was designed to avoid such a situation. See Nat’l Ass’n of Home Builders v.
United States Army Corps of Eng’rs, 417 F.3d 1272, 1281 (D.C. Cir. 2005) (“[T]he
notion that ‘would-be dischargers’ like the appellants nevertheless ‘remain free to
pursue an individual or general permit’ suggests a ripeness . . . problem.”). I cannot
say RSLC’s span bridge application would not be authorized under the individual
permit program. Indeed, the Corps, although having significant discretion to require
an EIS even where no EIS is otherwise required, has no discretion to deny an
individual permit application unless the District Engineer finds the project would be
contrary to the public interest. 33 C.F.R. §§ 320.4(a)(1), 323.6(b). Neither the Corps’
withdrawal of the application due to RSLC's failure to follow administrative
procedures nor the denial of an NWP application constitute a final agency action. I
must therefore conclude this case is not yet ripe for judicial review.




                                           -14-
                                  II. Corps Authority

       In addition to the ripeness issue, I dissent from the majority as I believe the
Corps was within its authority to deny approval under the NWP program and to
require an EIS. I believe before we are called upon to address the res judicata and
collateral estoppel issues, we should determine whether there exists a justiciable
controversy. As the Corps was within its authority to deny NWP authorization and
require an EIS, there is no justiciable controversy in existence.

                       A. Requirement to Evaluate Under NWP

       The regulation at issue does not mandate a conclusion the Corps is required to
evaluate RLSC’s span bridge application for NWP authorization. See 33 C.F.R.
§ 330.1(f) (“[District engineers] should review all incoming applications for
individual permits for possible eligibility under regional permits or NWPs.”)
(emphasis added). The term “should,” when used to direct agencies, is generally not
considered a mandate, but permits an agency to retain some discretion over the matter.
See United States v. Maria, 186 F.3d 65, 70 (2d Cir. 1999) (“[T]he common meaning
of ‘should’ suggests or recommends a course of action, while the ordinary
understanding of ‘shall’ describes a course of action that is mandatory.”); see also In
re Copper, 426 F.3d 810, 816 (6th Cir. 2005) (“If Congress had intended to leave . .
. absolutely no discretion in the matter, it would have used the more mandatory phrase
of ‘shall be able’ . . . [rather than ‘may’].”); cf. Gutierrez de Martinez v. Lamagno, 515
U.S. 417, 432 n.9 (1995) (“Though ‘shall’ generally means ‘must,’ legal writers
sometimes use, or misuse, ‘shall’ to mean ‘should,’ ‘will,’ or even ‘may.’”). In
evaluating the regulations governing NWP authorization in their entirety, there is no
indication any meaning other than the common meaning was intended when the term
“should” was used.




                                          -15-
       Nevertheless, the Corps has concluded it is required to evaluate all incoming
applications for NWP eligibility pursuant to Crutchfield v. County of Hanover, Va.,
325 F.3d 211, 219 (4th Cir. 2003) (“The governing regulations specifically require the
Corps to ‘review all incoming applications for individual permits for possible
eligibility under . . . NWPs.’” (citing 33 C.F.R. § 330.1(f)). Given Crutchfield, this
is a reasonable interpretation of the regulation and must be upheld.

                              B. Incoming Application

       Having determined the Corps’ construction of the regulation requiring it to
review all incoming applications for NWP authorization is reasonable, the question
remains whether the span bridge application is an “incoming application.” RSLC
argues the span bridge application, though raised under the same permit number as the
original application, involving a bridge traversing the same river for the same purpose
(to provide ingress and egress to the same island) and according to the district court,
resulting in similar drinking water impacts as the original application, was an
“incoming application” requiring review by the Corps.

       Neither party addressed why the application should be considered an incoming
application as opposed to a revision of a prior application. The Corps in its filings in
Arkansas Nature Alliance effectively indicated its belief the revised application
constituted an “incoming application.” Although the Corps claimed in Arkansas
Nature Alliance it considered the application to be an “incoming application,” the
Corps appears to have treated the span bridge application as a revision to the previous
application in the instant case. The Corps did not assign a new number to the span
bridge application.5 The district court concluded the “project is not new.”

      5
        Even if, as the majority asserts, the Corps failed to evaluate the span bridge
application for NWP eligibility, this “failure” would support the conclusion the Corps
considered the application to be merely a revision and not an “incoming application.”


                                         -16-
        Although the Corps’ position has been seemingly inconsistent throughout the
history of RSLC’s bridge applications, the Corps’ position in Arkansas Nature
Alliance would effectively preclude it from arguing a contrary position in this
litigation. Therefore, while I have doubts the application is properly considered an
“incoming” application, as I believe the Corps must be allowed to prevent game-
playing by applicants, I believe the Corps’ position in Arkansas Nature Alliance puts
us in the awkward position of concluding, for purposes of the instant case only, the
permit application is “incoming,” and, based upon the Corps’ interpretation of its
regulations, must therefore be reviewed for NWP eligibility.

                          C. District Engineer Discretion

       The majority opines the Corps failed to review the span bridge application for
eligibility under the NWP program because it believes the District Engineer did not
exercise its discretion in denying the NWP authorization. Although the majority
acknowledges the Corps did deny authorization under an NWP, it suggests the denial
was invalid because it was not made by the District Engineer. This claim is based
upon the Corps’ letter denying the NWP authorization, which states, “[a]s directed by
the court’s order, your request for a span bridge cannot be issued through the Corps
of Engineer’s Nationwide Permit Program.” The majority speculates because the
reasoning of the letter is based upon the court’s opinion, the District Engineer never
exercised his or her discretion to deny the NWP authorization. I respectfully must
disagree.

      The majority mistakenly relies upon regulations granting the District Engineer
“discretionary authority” for its conclusion the District Engineer must deny the
application for NWP authorization. However, the regulations related to the District
Engineer’s “discretionary authority” all relate to its ability to modify, suspend, or




                                        -17-
revoke an existing NWP or NWP authorization.6 See 33 C.F.R. §§ 330.1(d), .2(g),
.4(e). There is no existing NWP authorization in the instant case and the NWP has not
been modified, suspended, or revoked. Accordingly, the authority upon which the
majority relies is misplaced.

       The District Engineer does “have authority to determine if an activity complies
with the terms and conditions of an NWP.” 33 C.F.R. § 330.4(b)(1). The only
significant direction given to the Corps in denying activities under NWPs is: “[i]f the
[District Engineer] decides that an activity does not comply with the terms or
conditions of an NWP, he will notify the person desiring to do the work and instruct
him on the procedures to seek authorization under a regional general permit or
individual permit.” 33 C.F.R. § 330.6(a)(2); see also 33 C.F.R. § 330.2(c). The Corps
has implicitly interpreted this regulation as allowing the instant denial of RSLC’s
application for NWP authorization to be made by persons other than the District
Engineer.

       The regulations do not establish the District Engineer (1) must act in a
particular manner to exercise properly his or her authority, (2) cannot delegate this
authority, or (3) is vested with exclusive authority to deny an NWP authorization.
Accordingly, although the regulations clearly contemplate denials of NWP
authorizations can occur at the hands of the District Engineer, see 33 C.F.R.
§ 330.6(a)(1) (A District Engineer “should respond as promptly as practicable to
[requests for confirmation that an activity complies with the terms and conditions of



      6
         District Engineers modifying, suspending, or revoking NWP authorizations
affect applicants’ investments to a significant extent. Requiring District Engineers to
follow particular procedures and safeguards in such a situation is necessary to protect
properly applicants’ investments. The same concerns, however, are not present when
the project has not been constructed and the applicant is merely seeking confirmation
that a proposed activity will comply with the requirements of an NWP.

                                         -18-
an NWP].”), I cannot say the Corps’ interpretation of the regulation is unreasonable.7
Further, I cannot say the Corps acted arbitrarily or capriciously in denying RSLC
authorization under the NWP program by letter from a lawyer as opposed to the
District Engineer.8

                             D. Authority to Require EIS

       I further disagree with the majority as I believe the Corps was within its
authority to require an EIS. RSLC’s initial bridge application was authorized under
NWP 14 by Letter of Permission on January 22, 2001. A Letter of Permission is used
in lieu of more complex approval documents, such as records of decision, used to
approve applicants providing an EIS, and statements of findings, used to approve
applicants providing an EA. Letters of Permission are used to confirm authorization
of applications under NWPs. Letters of Permission may only be used when “the
proposed work would be minor, would not have significant individual or cumulative
impacts on environmental values, and should encounter no appreciable opposition.”
33 C.F.R. § 325.2(e)(1)(i).



      7
         Indeed, the District Engineer’s delegation of legal questions regarding res
judicata and collateral estoppel to a lawyer seems eminently reasonable. Even if the
district court erred in its res judicata and collateral estoppel analysis, and even if the
Corps’ lawyer erred in viewing the district court’s order as having preclusive effect,
the issue is close, and I cannot say the decision to require an EIS under the
circumstances was arbitrary or capricious.
      8
        The denial letter included instructions regarding the procedures RSLC must
follow to apply for an individual permit. The only remaining issue raised by the
majority is whether the District Engineer can base his decision to deny NWP
authorization on a court order as opposed to a review of the administrative record. It
would result in poor public policy to require a District Engineer to repeatedly review
the administrative record even when a court had conclusively ruled on the issue.
Accordingly, I find no reversible error.

                                          -19-
       The prior challenge to RSLC’s bridge application and the guarantee by
Arkansas Nature Alliance it would challenge a Finding of No Significant Impact
establishes appreciable opposition to the span bridge application. See Ark. Nature
Alliance, 266 F. Supp. 2d at 897. Accordingly, a Letter of Permission may not issue.
Because the span bridge application is not eligible for consideration under 33 C.F.R.
§ 325.2(b), the standard permitting procedures must be followed. See 33 C.F.R.
§ 325.2(a).

       The standard permit procedures require the preparation of an environmental
assessment (EA) or EIS unless a categorical exclusion applies. 33 C.F.R.
§ 325.2(a)(4). A categorical exclusion is “a category of actions which do not
individually or cumulatively have a significant effect on the human environment,” 40
C.F.R. § 1508.4, and are either specifically listed under 33 C.F.R. pt. 325, app. B.,
para. 6, or can be authorized by Letter of Permission. 33 C.F.R. pt. 325, app. B., para.
6(5). NWPs are considered “categorical exclusions” because they qualify as Letters
of Permission. See Md. Native Plant Soc’y v. United States Army Corps of Eng’rs,
332 F. Supp. 2d 845, 850 (D. Md. 2004). However, in the instant case, RSLC’s
proposed span bridge is not specifically listed under either 33 C.F.R. pt. 325, app. B.,
para. 6 or under 33 C.F.R. § 230.9, and does not qualify for a Letter of Permission.
Accordingly, the standard permitting procedures require the span bridge application
include an EA or EIS. See 33 C.F.R. § 325.2(a)(4) (“A decision on a permit
application will require either an environmental assessment or an environmental
impact statement unless it is included within a categorical exclusion.”). “In those
cases where it is obvious an EIS is required, an EA is not required. However, the
district engineer should document his reasons for requiring an EIS.” 33 C.F.R. pt.
325, app. B, para. 7.

      Generally, an EA is first undertaken to determine whether adverse
environmental impacts are sufficiently likely to warrant further study and
documentation in the form of an EIS. See 40 C.F.R. §§ 1508.4, .9. However, this

                                         -20-
procedure is not set in stone and the Corps can require an EIS instead of an EA. In
doing so, however, “the district engineer should document his reasons for requiring
an EIS” as opposed to an EA. 33 C.F.R. pt. 325, app. B, para. 7. In the Corps’ letter
dated February 27, 2003, revoking RSLC’s Letter of Permission, the Corps relied
upon the Arkansas Nature Alliance case to deny the NWP authorization and require
an EIS. Given the similarity of the flooding and other impacts on Landers Island
caused by increasing public access to the island identified by the district court, the
Corps’ decision to require an EIS is not arbitrary or capricious. See Ark. Nature
Alliance, 266 F. Supp. 2d at 897 (requiring EIS), modifying 266 F. Supp. 2d at 890-92
(concluding the scope of the Corps’ review of the bridge should include impacts on
Landers Island).

       Although the Corps is not entitled to deference in its interpretation of the
district court’s opinion, the Corps was required to follow its standard permitting
procedures and request either an EA or an EIS. The Corps need only provide a reason
why it requests an EIS as opposed to an EA. It did so in its letter dated February 27,
2003, when it relied upon the district court’s opinion. The Corps followed its mandate
and therefore, I cannot conclude the Corps’ decision to require an EIS was arbitrary
or capricious.

                                   III. Conclusion

      For the foregoing reasons, I respectfully dissent.
                      ______________________________




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