Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-05059/USCOURTS-caDC-06-05059-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 8, 2006 Decided January 30, 2007

No. 06-5059

KARST ENVIRONMENTAL EDUCATION AND PROTECTION, INC.,

ET AL.,

APPELLANTS

v.

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 05cv01190)

W. Henry Graddy, IV., pro hac vice, argued the cause for

appellants. On the briefs was David G. Bookbinder.

Jennifer L. Scheller, Attorney, U.S. Department of Justice,

argued the cause for Federal Appellees. With her on the brief

was Todd S. Aagaard, Attorney. R. Craig Lawrence, Assistant

U.S. Attorney, entered an appearance.

Maria V. Gillen argued the cause for appellee Tennessee

Valley Authority. With her on the brief were Harriet A. Cooper

and Frank H. Lancaster.

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Robert M. Andersen argued the cause for appellees

Inter-Modal Transportation Authority, Inc., et al. With him on

the brief was D. Randall Benn.

Before: ROGERS and TATEL, Circuit Judges, and WILLIAMS,

Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: Seeking to halt several local

governmental entities in Kentucky from developing a transit

park, appellant environmental organizations sued the

Environmental Protection Agency, the Department of Housing

and Urban Development, and the Tennessee Valley Authority,

alleging that these agencies failed to conduct the environmental

and historical assessments required, respectively, by the

National Environmental Policy Act (NEPA) and the National

Historic Preservation Act (NHPA). Because neither EPA nor

HUD engaged in “final agency action” within the meaning of

section 704 of the Administrative Procedure Act—a prerequisite

for both NEPA and NHPA actions against federal agencies—we

affirm the district court’s dismissal of the complaint against

those two agencies. Although TVA did take final agency action

by making a grant to a transit park tenant, because appellants

have produced no evidence of continuing TVA authority over

the project, we affirm the district court’s dismissal of the

complaint against TVA for mootness.

I.

“Because we review here a decision granting [a] motion to

dismiss, we must accept as true all of the factual allegations

contained in the complaint.” Swierkiewicz v. Sorema, 534 U.S.

506, 508 n.1 (2002). Viewed that way, the complaint tells the

following story: 

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In 1998, Warren County and the city of Bowling Green,

Kentucky, decided to build the “Kentucky Trimodal Transpark”

(“Transpark”), an $80 million 4,000-6,000 acre industrial park

and transportation complex that would include, among other

facilities, a new airport, a new rail hub, and extended highways.

Located six miles south of Mammoth Cave National Park, the

Transpark site rests on a vast karst plain—a topography

characterized by sinkholes, caves, and underground streams,

rivers, and groundwater. Adjacent to the site are several areas

of historic significance, including the Oakland Freeport Historic

District, a site listed in the National Register of Historic Places,

and other Reconstruction-era African-American communities

that have applied for historic status. 

To develop the Transpark, the county and the city created

the Inter-Modal Transportation Authority (ITA), a nonprofit

corporation authorized, among other things, to apply for and

receive grants from federal agencies. In 2004, ITA began

construction of the first phase of the Transpark, which included

an interior road, water and sewer infrastructure, technical

training facilities, and a building for Bowling Green

Metalforming (“Metalforming”), an automobile parts

manufacturer. During the next few years, the Federal Highway

Administration (FHWA) allocated $8.75 million to ITA for

highway construction and expansion. FHWA then began the

environmental and historical reviews required, respectively, by

the National Environmental Policy Act, 42 U.S.C. § 4321 et

seq., and the National Historic Preservation Act, 16 U.S.C.

§ 470 et seq. NEPA requires federal agencies to prepare an

environmental impact statement (EIS), which assesses a

project’s environmental impact and identifies alternatives, for all

proposed “major Federal actions significantly affecting the

quality of the human environment.” 42 U.S.C. § 4332(C).

NHPA requires that before funding or licensing a “[f]ederal or

federally assisted undertaking,” federal agencies must (1) “take

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into account the effect of the undertaking on any district, site,

building, structure, or object that is included in or eligible for

inclusion in the National Register,” and (2) “afford the Advisory

Council on Historic Preservation . . . a reasonable opportunity to

comment with regard to such undertaking.” 16 U.S.C. § 470f.

Other federal agencies also became involved. The Federal

Aviation Administration, which must approve the closing of the

existing airport (because it provided substantial funding for its

construction), studied the feasibility of replacing the old airport

with a new one. Congress appropriated $3.75 million for EPA

to spend on water and sewer infrastructure, and another $1.75

million for HUD to spend on a training center. And TVA,

pursuant to the “Valley Advantage” contract, awarded $500,000

to Metalforming for the installation of electrical equipment. 

Concerned about the Transpark’s impact on Mammoth

Cave’s ecosystem, the karst plain’s underground water sources,

and the nearby historic sites, Appellants Karst Environmental

Education and Protection and Warren County Citizens for

Managed Growth, along with some of their board members

(throughout this opinion, we refer to appellants collectively as

“Karst”) filed a complaint alleging that EPA, HUD, and TVA all

violated both NEPA and NHPA by failing to conduct the

required environmental and historical reviews. ITA, Warren

County, and Bowling Green moved to intervene as defendants

(“local intervenors”), in response to which Karst filed an

amended complaint adding allegations against all three and

asking the court to “halt[] all demolition and construction of the

Transpark until NEPA and NHPA have been fully complied

with.” Am. Compl. 27.

The district court granted EPA and HUD’s joint motion to

dismiss for lack of subject matter jurisdiction under Federal

Rule of Civil Procedure 12(b)(1). “[F]or a court to have

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jurisdiction over claims seeking judicial review,” the district

court explained, “it must determine that the action is final.”

Karst Envtl. Educ. & Prot., Inc. v. EPA, 403 F. Supp. 2d 74, 80

(D.D.C. 2005). The court found that HUD took no final agency

action because it had yet to act on local intervenors’ grant

application. Id. at 81. Because the district court concluded that

local intervenors’ request for EPA advice on the Transpark did

not amount to a major federal action that would trigger NEPA,

it never determined whether EPA engaged in final agency

action. Id. at 80-81 (“‘[T]he power to give nonbinding advice

to a nonfederal actor’ does not constitute a major federal

action.” (quoting Vill. of Los Ranchos de Albuquerque v.

Barnhart, 906 F.2d 1477, 1482 (10th Cir. 1990))). The court

dismissed Karst’s claims against TVA as moot because “the

action complained of”—TVA’s $500,000 grant to

Metalforming—“has been completed and no effective relief is

available.” Id. at 82. Without separate analysis, the district

court also granted local intervenors’ motion to dismiss. Id. at 76

n.1, 82-83. Karst appeals.

II.

Before considering the merits, we must determine whether

Karst has Article III standing. See Steel Co. v. Citizens for a

Better Envt., 523 U.S. 83, 94-102 (1998) (holding that federal

courts must ensure that they have jurisdiction before considering

the merits of a case). The “irreducible constitutional minimum

of standing” consists of three elements: (1) an “injury in fact”

that is (2) “fairly . . . trace[able] to the challenged action of the

defendant,” and (3) “likely . . . redress[able] by a favorable

decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992) (first alteration in original, internal quotations marks and

citations omitted). EPA and HUD argue that Karst fails to

satisfy the latter two requirements because nothing in the

complaint alleges that the two agencies injured Karst by either

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funding or approving the Transpark. It follows, the two

agencies argue, that Karst’s injuries from the Transpark

development are not redressable.

 

Contrary to this argument, however, Karst does allege

funding by both EPA and HUD—specifically that the Transpark

“has already benefited from, and is based on, pervasive federal

action in the form of financial assistance from EPA, HUD, and

TVA,” Am. Compl. 12, and that “a portion of the funding for . . .

construction [of the first phase of the Transpark] was federal

funding from one or more of the [d]efendants,” id. at 15.

Assuming the truth of these claims and that Karst will succeed

on the merits, as we must for purposes of standing, see City of

Waukesha v. EPA, 320 F.3d 228, 235 (D.C. Cir. 2003) (“[I]n

reviewing the standing question, the court must be careful not to

decide the questions on the merits for or against the plaintiff,

and must therefore assume that on the merits the plaintiffs would

be successful in their claims.”), these allegations suffice to

establish both causation and redressability. Accordingly, we

turn to the merits.

As indicated above, the district court dismissed the case

against HUD because it took no “final agency action” and

against EPA because it took no “major federal action.” Karst,

403 F. Supp. 2d at 80-81. The district court’s decision is

unassailable. Relying on the Supreme Court’s holding in Lujan

v. National Wildlife Federation, 492 U.S. 871 (1990), that

“person[s] claiming a right to sue [under NEPA] must identify

some ‘agency action’ that [adversely] affects [them],” id. at 882,

we suggested in Public Citizen v. Office of U.S. Trade

Representatives, 970 F.2d 916, 918 (D.C. Cir. 1992) (“Public

Citizen I”), and later held in Public Citizen v. U.S. Trade

Representative, 5 F.3d 549, 551 (D.C. Cir. 1993) (“Public

Citizen II”), that because NEPA creates no private right of

action, challenges to agency compliance with the statute must be

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brought pursuant to the Administrative Procedure Act, 5 U.S.C.

§ 551 et seq., which requires “final agency action for which

there is no other adequate remedy in a court.” Id. § 704. In San

Carlos Apache Tribe v. United States, 417 F.3d 1091 (9th Cir.

2005), the Ninth Circuit reached the same conclusion with

respect to NHPA, explaining that because the statute creates no

private right of action, plaintiffs must file NHPA claims

pursuant to the APA. Id. at 1099. Because in Public Citizen I

and II we relied on Lujan v. National Wildlife Federation to hold

that NEPA actions must be brought under the APA, and because

NHPA, like NEPA, contains no private right of action, we agree

with the Ninth Circuit that NHPA actions must also be brought

pursuant to the APA. 

In the NEPA context, the “final agency action” required by

the APA must also be a “major federal action” under NEPA.

See Found. on Econ. Trends v. Lyng, 943 F.2d 79, 85 (D.C. Cir.

1991). Because of the “operational similarity” between NEPA

and NHPA, both of which impose procedural obligations on

federal agencies after a certain threshold of federal involvement,

courts treat “major federal actions” under NEPA similarly to

“federal undertakings” under NHPA. See Sac and Fox Nation

of Mo. v. Norton, 240 F.3d 1250, 1263 (10th Cir. 2001); San

Carlos Apache Tribe, 417 F.3d at 1097. Thus, just as the “final

agency action” in a NEPA claim must be a “major federal

action,” the “final agency action” in an NHPA claim must be a

“federal undertaking.”

On appeal, Karst does not argue that either EPA or HUD

engaged in final agency action. Instead, it maintains that it had

no need to establish final agency action because “the cumulative

substantial involvement of federal agencies in the Transpark

federalized the project from its inception.” Appellants’ Br. 25.

Even though the federal government is not the Transpark’s

primary developer, Karst alleges, the project enjoys sufficient

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federal involvement to subject EPA, HUD, and TVA to NEPA

and NHPA requirements. Based on this federal involvement,

Karst argues that:

The funding, permitting and construction of the

Transpark project is a “major federal action . . .”

within the meaning of . . . NEPA . . . . But for the

federal funding available from and/or provided

by EPA, FAA, FHWA, HUD, TVA, and other

sources, no part of the Transpark activities which

are the subject of this complaint would have

been undertaken. The actions taking place at the

Transpark that are the subject of this Complaint

are thus final agency action for purposes of the

APA.

Am. Compl. 25. Because of this, Karst claims, “[d]efendants

have violated NEPA by failing to prepare an Environmental

Impact Statement for the entire Transpark.” Id. at 26. Similarly,

Karst alleges that the three agencies, by failing to conduct a

historical review of the Transpark, violated NHPA because

“EPA, HUD and TVA jurisdiction over the project requires

compliance with Section 106 of NHPA prior to agency funding

or approval of any aspect of the project.” Id. at 21. 

Karst bases its “federalization” claim on two cases,

Maryland Conservation Council v. Gilchrist, 808 F.2d 1039 (4th

Cir. 1986), and Macht v. Skinner, 916 F.2d 13 (D.C. Cir. 1990).

In Gilchrist, an environmental organization challenged a local

government’s plan to construct a highway, part of which would

cross a state park and would thus likely require approval from

several federal agencies, including the Interior Department,

which had substantially funded the park. 808 F.2d at 1042.

Under these circumstances, the court concluded, the highway

amounted to a major federal action that triggered NEPA’s EIS

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requirement because “a non-federal project is considered a

federal action if it cannot begin or continue without prior

approval of a federal agency.” Id. (internal quotation marks

omitted). The court explained its reasoning as follows:

The decision of the Secretary of the Interior to

approve the project, and the decision of any

other Secretary whose authority may extend to

the project, would inevitably be influenced if the

County were allowed to construct major

segments of the highway before issuance of a

final EIS. The completed segments would stand

like gun barrels pointing into the heartland of the

park. . . . It is precisely this sort of influence on

federal decision-making that NEPA is designed

to prevent. Non-federal actors may not be

permitted to evade NEPA by completing a

project without an EIS and then presenting the

responsible federal agency with a fait accompli.

Id. (internal quotation marks and citation omitted). 

In Macht, which involved a challenge to Maryland’s

construction of a light rail line that would have required a

wetlands permit from the Army Corps of Engineers, we cited

Gilchrist with approval, observing that “[t]he reasoning of the

Fourth Circuit in Gilchrist is sound: the state may not begin

construction of any part of a project if the effect of such

construction would be to limit significantly the options of the

federal officials who have discretion over substantial portions of

the project.” Id. at 19. That said, we limited the federalization

theory to situations of “substantial” federal involvement. Id.

Applying that standard to the light rail project, we found

insufficient evidence of federal involvement because federal

agencies had discretion over “only a negligible portion of the

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entire project,” as compared to Gilchrist, “where several

agencies had discretion over a substantial part of the highway

project.” Id. (emphasis added, internal quotation marks

omitted).

Relying on Gilchrist and Macht, Karst argues it has no need

to demonstrate “final agency action” pursuant to the APA.

According to Karst, “it is the construction activity by the nonfederal ‘partner’ with the federal government in their ‘joint

venture’ or such action by the non-federal entity that will face

the ‘inevitable exercise of federal approval power’ that triggers

APA jurisdiction over federal agencies.” Appellants’ Reply Br.

3-4. 

Karst’s argument suffers from two defects which, in

combination, are fatal to its case. First, given that Macht found

insufficient federal involvement to trigger NEPA, its statement

that “[t]he reasoning of the Fourth Circuit in Gilchrist is sound”

is dictum. Thus, unlike the Fourth Circuit, we have no binding

precedent adopting the federalization theory. Second, and even

more important, at the time Gilchrist and Macht were decided,

in 1986 and 1990, respectively, we had not yet held in Public

Citizen I and II that NEPA claims must be brought pursuant to

the APA and must therefore allege “final agency action.” See

Public Citizen II, 5 F.3d at 551; Public Citizen I, 970 F.2d at

918. Indeed, then-existing case law suggested that NEPA itself

created a private right of action. For example, in Aberdeen &

Rockfish Railroad Co. v. Students Challenging Regulatory

Agency Procedures, 422 U.S. 289 (1975) (“SCRAP II”), the

Supreme Court suggested, in its first effort to interpret NEPA,

that claims under the statute might be brought independently of

the APA: “NEPA does create a discrete procedural obligation

on Government agencies . . . and a right of action in adversely

affected parties to enforce that obligation.” Id. at 319. Prior to

Macht, we too decided several NEPA cases without mentioning

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either final agency action or the APA. See, e.g., Nat’l Wildlife

Fed’n v. Appalachian Reg’l Comm’n, 677 F.2d 883 (D.C. Cir.

1981); Calvert Cliffs’ Coordinating Comm. v. U.S. Atomic

Energy Comm’n, 449 F.2d 1109 (D.C. Cir. 1971). To be sure,

the Supreme Court issued Lujan v. National Wildlife Federation

four months prior to our decision in Macht, but because the

parties in Lujan failed to argue the issue, the Supreme Court left

open the question of whether NEPA contains a private right of

action. Lujan, 497 U.S. at 882. 

Thus, although the federalization theory may have had merit

when we decided Macht, it lacks vitality today given our

decisions in Public Citizen I and II, as well as our subsequent

decisions reiterating the requirement that NEPA claims must be

brought under the APA and allege final agency action. See, e.g.,

Fund for Animals v. U.S. Bureau of Land Mgmt., 460 F.3d 13,

18 (D.C. Cir. 2006); Tulare County v. Bush, 306 F.3d 1138,

1143 (D.C. Cir. 2002); Fla. Audubon Soc’y v. Bentsen, 94 F.3d

658, 665 (D.C. Cir. 1996) (en banc). Because Karst has failed

to allege that either EPA or HUD engaged in final agency

action, we shall affirm the district court’s dismissal of the

complaint against those two agencies. Although the district

court dismissed the case for lack of subject matter jurisdiction

under Federal Rule of Civil Procedure 12(b)(1) rather than, as it

should have, for failure to state a claim under Rule 12(b)(6), “we

[can] nonetheless affirm the dismissal if dismissal [is] otherwise

proper based on failure to state a claim under [Rule] 12(b)(6).”

EEOC v. St. Francis Parochial Sch., 117 F.3d 621, 624 (D.C.

Cir. 1997); see Trudeau v. FTC, 456 F.3d 178, 184 (D.C. Cir.

2006) (explaining that “the APA’s final agency action

requirement is not jurisdictional”). And because nothing in the

APA authorizes claims against nonfederal entities, see 5 U.S.C.

§ 702 (authorizing judicial review of “agency action”); 5 U.S.C.

§ 701(b)(1) (defining an “agency” as “each authority of the

Government of the United States”); see, e.g., Sw. Williamson

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County Cmty. Ass’n v. Slater, 173 F.3d 1033, 1035 (6th Cir.

1999) (“By its own terms, the APA does not apply to state

agencies.”), we shall affirm the district court’s dismissal of the

complaint against local intervenors.

The remaining defendant, TVA, did undertake final agency

action by making the $500,000 grant to Metalforming. But the

district court, noting that TVA had awarded the grant in 2004,

months before Karst filed its complaint, concluded that “[a]

claim that the defendants violated . . . NEPA is moot when the

action complained of has been completed and no effective relief

is available.” Karst, 403 F. Supp. 2d at 82. Responding to

Karst’s argument that the injury was capable of repetition yet

evading review because TVA might award future grants to

Transpark tenants, the district court explained that Karst’s claim

was moot when filed and that “the mootness exception for

disputes capable of repetition yet evading review . . . will not

revive a dispute which became moot before the action

commenced.” Id. (quoting Renne v. Geary, 501 U.S. 312, 320

(1991)).

Karst insists that effective relief remains available because

TVA can impose measures on Metalforming to mitigate any

environmental harm caused by the electrical equipment paid for

by the agency’s grant. See Vieux Carre Prop. Owners,

Residents, & Assocs., Inc. v. Brown, 948 F.2d 1436, 1446 (5th

Cir. 1991) (holding that a suit challenging a federally funded

project that has been completed is moot “only if [the agency]

presents evidence that compliance with the historical review

process . . . could not minimize any of the adverse effects on

[plaintiffs]”). Although TVA explains that it “simply has no

authority under the grant or under any statute to perform the

ongoing mitigation measures that Appellants suggest would

make this a live controversy,” Appellee TVA’s Br. 18, Karst

implies that the TVA Valley Advantage contract may give the

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agency authority to impose such mitigation measures. We say

“implies” because, according to Karst, since the contract is not

part of the record and TVA failed to supply it in response to a

FOIA request, “[it] do[es] not know whether there are terms and

conditions of the agreement itself that provide an independent

contractual re-opener.” Appellants’ Reply Br. 22.

If TVA actually has authority—whether by statute,

regulation, contract, or otherwise—to impose mitigation

measures upon Metalforming, Karst’s claim might well remain

justiciable. See Vieux Carre, 948 F.2d at 1446. But Karst’s

complaint does not allege that TVA has such authority; indeed,

the complaint never even mentions the Valley Advantage

contract. Although Karst suggested in a memorandum

supporting its opposition to the motion to dismiss that TVA

could impose mitigation measures on Metalforming, it failed to

identify any basis for such remediation, stating only that the

district court “should redress the TVA . . . violations . . . by

investigating the terms of the grant to . . . Metalforming to

determine if TVA has imposed or can impose any environmental

mitigation measures on the recipient of TVA funds.” Mem. in

Support of Resp. to Mot. to Dismiss 39. We need not decide

whether this was sufficient to raise the issue, for Karst has

forfeited the argument on appeal. Although Karst referred to the

Valley Advantage contract in its opening brief, not until its reply

brief did it mention its inability to obtain a copy of the contract

or argue that the contract provides a basis for remediation. This

was too late, see PDK Labs, Inc. v. U.S. Drug Enforcement

Admin., 438 F.3d 1184, 1196 (D.C. Cir. 2006) (explaining that

reference in opening brief to factual basis for an argument not

raised until reply brief does not properly raise the argument), as

was its vague assertion, also in its reply brief, that “TVA’s

NEPA procedures and the applicable rules suggest that TVA

may be able to exercise its authority over some ongoing and

completed projects.” Appellants’ Reply Br. 21. See Rollins

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Envtl. Servs. v. EPA, 937 F.2d 649, 652 n.2 (D.C. Cir. 1991)

(“Issues may not be raised for the first time in a reply brief.”).

III.

For the reasons given above, we affirm the district court’s

dismissal of the complaint as to all defendants.

So ordered.

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