Most Corps of Engineers wetlands projects require the state or other non-federal sponsor to pay for part of the cost. This is both a cost-sharing measure and a measure to make sure that the state really needs the project – without a match, state politicians would demand unlimited projects from the Corps as economic development. Louisiana generally tries to avoid paying the match on projects, but unless Congress passes a law waiving the match on specific projects, the state has to pay for what has been done and nothing new will be done until the state pay’s the necessary match. This dispute arises from the push to close the Mississippi River Gulf Outlet canal after Hurricane Katrina. Plaintiffs in the Hurricane Katrina litigation argued that the MRGO was responsible for much of the flooding in New Orleans. Despite there not being any scientific support for this view, the politicians prevailed and Congress appropriated money to close the MRGO and to try to restore the surrounding wetlands. Louisiana then sued to try to avoid paying the required match, arguing that language in the appropriation bill required the Corps to pay 100%. The district court agreed with the state, holding that the Corps had to pay 100%. The appeals court found that, at best there was some ambiguity in the appropriations bill, but that the agency’s interpretation of the bill to require Louisiana to pay a share of the costs was entitled to deference. There is a nice discussion in the appeals case of when the Corps’s recommendations because a final agency action that could be appealed, and they a good discussion of Chevron.
Louisiana v. U.S. Army Corps of Engineers, 126 F. Supp. 3d 697 (E.D. La. 2015), rev’d in part, appeal dismissed in part sub nom. Louisiana State v. United States Army Corps of Engineers, No. 15-30962, 2016 WL 4446067 (5th Cir. Aug. 23, 2016)