FARGO – Work on the flood diversion to protect Fargo-Moorhead must stop immediately pending the outcome of a years-long lawsuit, a federal judge ordered on Thursday, Sept. 7.

The $2.2 billion project is opposed by Minnesota, and John R. Tunheim, chief judge in the District of Minneapolis, said there is a likelihood that the U.S. Army Corps of Engineers and Fargo-Moorhead Diversion Authority will have to get a state permit.

The corps has maintained that, as a federal agency, it’s immune from state environmental regulations. Tunheim suggested Congress waived that immunity by requiring the corps to follow state laws.

Tom Landwehr, commissioner of the Minnesota Department of Natural Resources, said in a statement Thursday that the judge has “clearly and unequivocally” agreed with the DNR’s position. “As the DNR has stated consistently in this matter, the public interest is not served by allowing the Corps and Diversion Authority to invest public funds in construction in the absence of the required state permits, which are designed to protect the public and the environment.”

While North Dakota regulators have OK’d the diversion project, the DNR has refused to do so citing state policies on removing undeveloped land from the floodplain.

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“This ruling is excellent news for the safety and protection of Minnesotans, whose lands and livelihoods could be devastated by the diversion project, as proposed,” Minnesota Gov. Mark Dayton, who has paid close attention to the lawsuit, said in a statement. “Importantly, it also upholds Minnesota’s rightful permitting authority.”

Authority Chairman and Fargo Mayor Tim Mahoney said he’s disappointed with the judge’s order but hopes it will encourage the DNR to come back to the negotiating table. When the agency decided to stop informal talks in June, Mahoney had said engineers from both sides were close to an agreement and he still believes that.

“I’m disappointed the Judge ruled against our city, our businesses and our homeowners,” Authority Vice Chairwoman and Moorhead Mayor Del Rae Williams said in a statement. “I hope this ruling will help bring the MDNR back to the table to discuss how to move forward on permanent flood protection for Moorhead and Fargo.”

Both Dayton and Landwehr said they do wish to work with all parties to come up with an acceptable flood protection project. “I strongly agree with Judge Tunheim’s statement, ‘It is time for all parties to work together to find common ground.’ This ruling should prompt the beginning of genuine collaboration by all affected stakeholders to address flooding in the Fargo-Moorhead area," Dayton said.

Mahoney said the authority must consult with the corps, but he said he expects they would file an immediate appeal given the financial harm of the injunction. Every year of delay raises the cost of project construction an estimated $60 million a year, he said.

The corps and the Richland-Wilkin Joint Powers Authority, representing upstream counties, are also parties to the suit. The JPA filed the original suit against the diversion in 2013. The DNR filed suit earlier this year after the corps began work in North Dakota on a dam that would eventually span the Red River and cross into Minnesota.

Though Tunheim’s order is not the final word in the lawsuit, it does reveal some of his thinking on issues brought up.

In dismissing with prejudice JPA allegations that the corps violated federal law and policy, he focused the lawsuit only on the question of whether the corps and authority must obey state laws. And he appears to believe the answer is “yes.”

“Had Congress intended to circumvent Minnesota laws and regulations in order to ensure fast construction of the Project, it could have fashioned the authorization in a way that avoided Minnesota’s regulatory requirements,” he wrote. “Instead, Congress has repeatedly indicated its intent that the Project comply with Minnesota’s laws and regulations and, therefore, as Congress made this express statement, the public interest weighs in favor of granting the motions for a preliminary injunction.”

The judge sidesteps the corps’ argument that, as a federal agency, it’s immune to state environmental regulations. He said the corps itself told Congress that “non-federal sponsors,” meaning the authority, would have to comply “with all applicable Federal and State laws and regulations.”

The corps has said it’s in charge of building the dam, the only project component that reaches into Minnesota and that the DNR has complained about. The authority is in charge of building the diversion channel, which is entirely in North Dakota.

Tunheim, citing the Eighth Circuit Court of Appeals, which heard an appeal of another one of the judge’s injunctions, said legal jurisdiction doesn’t necessarily end at the state line. If the diversion “could only be stopped once it reached the Minnesota border, the practical effect would be that for interstate projects, the state with more lenient laws would always control,” he quoted the upper court.

“This judge is going to rule in our favor,” said Nathan Berseth, a spokesman for the JPA after seeing the order. “All indications are that. Everything that's taken place with this project was leading up to this."

Tunheim said in his order that he will consider requests for construction of diversion project components that do not affect Minnesota waters, presumably referring to the ring dike around the Oxbow-Hickson-Bakke area south of Fargo.

He also required the DNR and JPA to post a $10,000 bond for payment of damages to the corps and authority should the plaintiffs prove to be wrong in asking for the order, as federal rules require.

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