Source: https://law.justia.com/cases/federal/appellate-courts/F2/695/957/443488/
Timestamp: 2019-07-17 22:47:11
Document Index: 425250507

Matched Legal Cases: ['§ 4321', '§ 706', '§ 661', '§ 1344', '§ 403', '§ 706', '§ 4332', '§ 4332', '§ 4332', '§ 4332', '§ 4335', '§ 1344', '§ 1413', '§ 403', '§ 4333', '§ 4331', '§ 4332', '§ 403', '§ 4332', '§ 706', '§ 701', '§ 655']

Sierra Club, et al., Plaintiffs-appellants, v. James M. Sigler, Etc., et al., Defendants-appellees,pelican Terminal Company and Galveston Wharves, Intervenors-appellees, 695 F.2d 957 (5th Cir. 1983) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1983 › Sierra Club, et al., Plaintiffs-appellants, v. James M. Sigler, Etc., et al., Defendants-appellees,p...
Sierra Club, et al., Plaintiffs-appellants, v. James M. Sigler, Etc., et al., Defendants-appellees,pelican Terminal Company and Galveston Wharves, Intervenors-appellees, 695 F.2d 957 (5th Cir. 1983)
U.S. Court of Appeals for the Fifth Circuit - 695 F.2d 957 (5th Cir. 1983)
Jan. 20, 1983. Rehearing and Rehearing En Banc Denied April 8, 1983
In 1978, pursuant to permit applications filed on behalf of the superport project, work began on the Environmental Impact Statement ("EIS") required by the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321 et seq. As a result of coordinated efforts by the Corps, several state and federal agencies, and many private entities, a draft EIS ("DEIS") was produced in April of 1979. After comments were received on the draft, including some from the plaintiffs-appellants, and a public hearing was held in Galveston, a final EIS ("FEIS") was issued in September of 1979.3
On May 19, 1981, the Sierra Club and four other plaintiffs4 brought suit against the Corps and other federal defendants5 challenging the adequacy of the FEIS and the issuance of the permits. Under Section 10(e) (2) of the Administrative Procedure Act (APA), 5 U.S.C. § 706(2), they asserted that the Corps' decision making process violated, inter alia, NEPA, the Fish and Wildlife Coordination Act (FWCA), 16 U.S.C. § 661 et seq., section 404 of the Federal Water Pollution Control Act (FWPCA), 33 U.S.C. § 1344, section 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. § 403, and various federal regulations governing Corps activities. The Wharves, on behalf of the City of Galveston, and PELCO intervened as defendants.
The trial court in Galveston expedited the matter and held seven days of hearings beginning October 21, 1981. After post-trial briefs and final arguments, the court denied all challenges to the FEIS and upheld the issuance of the permits on February 3, 1982. 532 F. Supp. 1222 (S.D. Tex. 1982).
The umbrella standard governing judicial review of the adequacy of the FEIS and the Corps' decision to issue the permits is whether those actions were "arbitrary, capricious, an abuse of discretion, or otherwise not according to law," or "without observance of procedure required by law." Administrative Procedures Act, 5 U.S.C. § 706(2) (A) and (D). The Supreme Court has explained that:
Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S. Ct. 814, 823, 28 L. Ed. 2d 136 (1971). An agency decision is entitled to a "presumption of regularity.... But that presumption is not to shield [the agency's] action from a thorough, probing, in-depth review." Id. at 415, 91 S. Ct. at 823. This circuit has followed Overton Park in its review of agency decisions under the APA. See, e.g., Suntex Dairy v. Block, 666 F.2d 158, 162 (5th Cir. 1982), cert. denied, --- U.S. ----, 103 S. Ct. 59, 74 L. Ed. 2d 62 (1982).
FEIS Preparation. Preparation of the FEIS was governed by NEPA and by the regulations enforcing it promulgated by the Council on Environmental Quality (CEQ) because CEQ regulations implementing NEPA are binding on all federal agencies. See Andrus v. Sierra Club, 442 U.S. 347, 356-58, 99 S. Ct. 2335, 2340, 60 L. Ed. 2d 943 (1979).
Section 102(C) of NEPA, 42 U.S.C. § 4332(C) is an "action-forcing"6 provision which requires federal agencies such as the Corps to prepare a "detailed statement" when they propose "major Federal actions significantly affecting the quality of the human environment." This policy is intended to ensure that those agencies consider the environmental effects of their actions during their decisionmaking process. See Kleppe v. Sierra Club, 427 U.S. 390, 410 & n. 21, 96 S. Ct. 2718, 2730 & n. 21, 49 L. Ed. 2d 576 (1976). The Corps' decision to issue permits for the superport project is subject to NEPA. See, e.g., Bankers Life and Casualty Co. v. Village of North Palm Beach, Florida, 469 F.2d 994 (5th Cir. 1972), cert. denied, 411 U.S. 916, 93 S. Ct. 1543, 36 L. Ed. 2d 307 (1973). Therefore, the Corps was required to prepare and use an EIS in its decisionmaking process.
NEPA is a short statute with broad goals and imprecise methods of accomplishing them. As Justice Marshall has stated, "this vaguely worded statute seems designed to serve as no more than a catalyst for development of a 'common law' of NEPA.... [C]ourts have responded in just that manner and have created such a 'common law.' " Kleppe, 427 U.S. at 421, 96 S. Ct. at 2735 (Marshall, J., concurring in part and dissenting in part). This circuit, in the evolution of its NEPA "common law,"
Isle of Hope Historical Association, Inc. v. United States Army Corps of Engineers, 646 F.2d 215, 220 (5th Cir. 1981) (per curiam) (adopting opinion of district court).
In applying these criteria, we are not to concern ourselves with the merits of the agency's decision; our concern instead is with the integrity of NEPA-EIS process used to make that decision. See Richland Park Homeowners Association, Inc. v. Pierce, 671 F.2d 935, 941 (5th Cir. 1982) (citing Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227, 100 S. Ct. 497, 499, 62 L. Ed. 2d 433 (1980) (per curiam)); see also Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 557-58, 98 S. Ct. 1197, 1218, 55 L. Ed. 2d 460 (1978). Our duty is to determine whether the plaintiff has proven "by a preponderance of the evidence, rather than by a prima facie showing of deficiencies that the EIS ... was inadequate." Sierra Club v. Morton, 510 F.2d 813, 818 (5th Cir. 1975) (footnote omitted). We must assess the agency's compliance with NEPA's procedural requirements under a "rule of reason," id. at 819, and not "fly speck" the EIS, Citizens for Mass Transit, Inc. v. Adams, 630 F.2d 309, 313 (5th Cir. 1980) (citing Lathan v. Brinegar, 506 F.2d 677, 693 (9th Cir. 1974)).
The CEQ regulations governing our review are a bone of contention among the parties. CEQ advisory guidelines were in force when preparation of the DEIS began. However, a new set of mandatory CEQ regulations was promulgated in November, 1978, see 43 Fed.Reg. 55,977-56,007 (1978), several months before the April 1979 filing of the DEIS, but with an effective date of July 30, 1979, see id. at 56,002; 40 C.F.R. Sec. 1506.12. The new regulations exempted from their coverage any EIS whose draft was filed before they became effective, but they encouraged voluntary compliance by such exempt EIS's. See 40 C.F.R. Sec. 1506.12(a). Therefore, at the time of filing, the Corps had the choice of proceeding under the old guidelines or the new regulations, and it expressly chose without reservation or exception the new regulations, see DEIS at iii; FEIS, Vol. I at iii. Despite this voluntary adherence, however, the Corps now claims that judicial review of the adequacy of the FEIS should proceed under the old advisory guidelines. The Sierra Club argues the contrary. Authority on this issue is divided. In the first case on point, NRDC v. Callaway, 524 F.2d 79 (2d Cir. 1974), the NRDC alleged that the Corps had issued a dredge disposal permit in inland waters in violation of Environmental Protection Agency guidelines. Those guidelines were not applicable to the Corps permit since they covered only ocean disposal of dredged material, not disposal in inland waters. See id. at 84. However, the Corps' decision specifically referred to the ocean disposal criteria and, the court held, "relied at least in part upon [them] to support" issuance of the permit. Id. at 84-85. Therefore, the court refused to accept the Corps' arguments that the criteria were "irrelevant" to the case. The court declared that " [b]y its own use of the standards, it has made them applicable to this case." Id. at 85; see also Atchison, Topeka & Santa Fe Ry. v. Alexander, 480 F. Supp. 980, 993 (D.D.C. 1979) (citing the Callaway holding with approval), aff'd in part, rev'd in part on other grounds sub nom. Izaak Walton League of America v. Marsh, 655 F.2d 346 (D.C. Cir. 1981), cert. denied sub nom. Atchison, Topeka, & Santa Fe Ry. v. Marsh, 454 U.S. 1092, 102 S. Ct. 657, 70 L. Ed. 2d 630 (1981).
Despite its citation in Alexander approving Callaway, the District Court of the District of Columbia did not consider Callaway in a subsequent case similar to the one before us today. In North Slope Borough v. Andrus, 486 F. Supp. 332, 346-47, (D.D.C. 1979), aff'd in part and rev'd in part on other grounds, 642 F.2d 589 (D.C. Cir. 1980), the defendant Department of the Interior (DOI) had prepared an EIS for an oil and gas lease sale in the Beaufort Sea. DOI was in the same position as the Corps here: the new CEQ regulations did not apply, yet the agency chose to proceed under them. See id. at 346. The court held that while the EIS was faulty under the CEQ regulations, the agency would not be held to them since they did not apply.7 See id. at 346 & n. 27.
NEPA imposes two duties on federal agencies: the preparation of the EIS, 42 U.S.C. § 4332(C), and adherence to the CEQ regulations, 42 U.S.C. § 4332(B). We already have discussed the standard of review applied in assessing the adequacy of an agency EIS. The second duty which arises out of 42 U.S.C. § 4332(B) and the CEQ regulations requires federal agencies to "identify and develop methods and procedures ... which will insure that presently unquantified environmental amenities and values may be given appropriate consideration in decisionmaking along with economic and technical considerations." Section 4332(B) also requires the agency to use the EIS and other environmentally conscious procedures in its decisionmaking process. See 115 Cong.Rec. 29,055 (1969).
The mandate to develop and use environmentally conscious decisionmaking procedures found in Section 4332(B) is supplementary to existing policy mandates of federal agencies, see 42 U.S.C. § 4335, and each agency must mesh the requirements of NEPA with its own governing statute as far as possible, id. Sec. 4333. See Calvert Cliffs Coordinating Committee v. United States Atomic Energy Commission, 449 F.2d 1109, 1115 & n. 12 (D.C. Cir. 1971).
In this case, section 404 of the Federal Water Pollution Control Act, 33 U.S.C. § 1344, section 103 of the Marine Protection, Research, and Sanctuaries Act of 1972, 33 U.S.C. § 1413, and section 10 of the Rivers and Harbors Appropriations Act of 1899, 33 U.S.C. § 403, are the statutory commands the Corps must integrate with the requirements of NEPA. These laws prohibit construction, dredging, filling, or disposing of material in United States waters without the approval of the Army. The Corps ensures compliance with these laws by issuing permits for these activities when it determines that they are in the "public interest."
The Corps has established a policy governing its consideration of permit applications under these statutes and NEPA. See 33 C.F.R. Sec. 320 et seq. The permit decision is based on a multitude of factors and criteria, environmental and nonenvironmental, which are balanced to determine whether the permit is in the "public interest." See, e.g., 33 C.F.R. Sec. 320.4(a) (1), (2). NEPA's requirements are subsumed in these factors and criteria, see id. Secs. 209.410, 320.3(d), 425.4, as they must be, see 42 U.S.C. § 4333; 40 C.F.R. Sec. 1500.2. Thus, under the laws and regulations governing the Corps, the EIS and other NEPA requirements are but factors in the decisionmaking process; the EIS is not itself a decision document. The decision document is a written "findings of fact" which contains the "public interest" analysis and is prepared by the District Engineer. See 33 C.F.R. Sec. 325.2(a) (1). It is this document and the evidence supporting its analysis that must be reviewed when the decision to issue a permit is challenged. And it must be reviewed for adherence to Corps regulations, not only to NEPA, for if a court were to review it only under NEPA, the numerous non-NEPA factors which the Corps must consider would be ignored. See Environmental Defense Fund v. Marsh, 651 F.2d 983, 1002-03 (5th Cir. 1981) (citing Nader v. NRC, 513 F.2d 1045 (D.C. Cir. 1975); Zabel v. Tabb, 430 F.2d 199, 214 (5th Cir. 1970), cert. denied, 401 U.S. 910, 91 S. Ct. 873, 27 L. Ed. 2d 808 (1971); Pacific Molasses Co. v. FTC, 356 F.2d 386, 389-90 (5th Cir. 1966).
In reviewing the legal rulings of the district court, the court of appeals is free to examine them and reach its own conclusions. See, e.g., United States v. Grayson County State Bank, 656 F.2d 1070, 1075 (5th Cir. 1981), cert. denied, 455 U.S. 920, 102 S. Ct. 1276, 71 L. Ed. 2d 460 (1982). Factual findings, of course, are governed by the "clearly erroneous" standard of Fed. R. Civ. P. 52(a). See Morton, 510 F.2d at 818; see also Pullman-Standard v. Swint, 456 U.S. 273, 284-88, 102 S. Ct. 1781, 1788-89, 72 L. Ed. 2d 66 (1982). The case before us is based largely, as administrative law cases usually are, on a documentary record. Therefore, we will observe this circuit's longstanding rule that while the "clearly erroneous" standard always applies to a district court's factfinding, if that factfinding is based on documentary evidence alone, " [t]he appellant's burden, under Fed. R. Civ. P. 52(a), of showing that the trial judge's findings are 'clearly erroneous' is not as heavy ... as it would be if the case had turned on the credibility of witnesses appearing before the trial judge." Sicula Oceanica, S.A. v. Wilmar Marine Eng. & Sales Corp., 413 F.2d 1332, 1333 (5th Cir. 1969); see also, e.g., Robinson v. Vollert, 602 F.2d 87, 92 n. 8 (5th Cir. 1979); Nash v. Estelle, 597 F.2d 513, 518 (5th Cir.) (en banc), cert. denied, 444 U.S. 981, 100 S. Ct. 485, 62 L. Ed. 2d 409 (1979); Cooper v. Department of Navy of the United States, 594 F.2d 484, 486 (5th Cir. 1979) (on petition for rehearing).
Summarizing the FEIS probability analysis, the trial court concluded that the use of supertankers will reduce the number of tankers needed to transport a certain quantity of oil. However, all of this reduction will occur in the areas of the Bay traversed by tankers going to Houston and Texas City. There will be an increase in tanker traffic in the channel leading into the Port of Galveston since it presently has no tanker traffic. The probability of an oil spill in some parts of the Bay will drop, but that in the channel leading to the Port of Galveston will rise.8 See 532 F. Supp. at 1230.
FEIS Vol. I Sec. 4.2.10.2, at 4-143 (emphasis added). The trial court noted that this "quite limited" dispersion model did not support this conclusion about "any spill." See 532 F. Supp. at 1231. The trial court, despite the shortcomings of the FEIS in these analyses, nonetheless upheld the FEIS against all challenges. See id. at 1232. The Sierra Club does not repeat these challenges on appeal.
The trial court held that the information available from a worst case analysis was not essential in this case and therefore beyond the "statutory minima" of NEPA. See 532 F. Supp. at 1234 (worst case analysis would not have "meaningfully illuminated the dangers or materially added to the decisionmaker's awareness of the spectrum of consequences involved"). The Sierra Club attacks this holding on appeal. The parties make several arguments over the scope and applicability of this regulation.
NEPA and the Worst Case Regulation. The Corps first argues that the catastrophic "worst case" oil spill analysis urged by the Sierra Club--involving a total cargo loss by a supertanker in the Bay--is beyond the statutory minima of NEPA and therefore need not be performed. To resolve this challenge, we turn first to the language of NEPA itself because " 'the starting point in every case involving construction of a statute is the language itself.' " Watt v. Alaska, 451 U.S. 259, 265, 101 S. Ct. 1673, 1677, 68 L. Ed. 2d 80 (1981) (quoting Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S. Ct. 1917, 1935, 44 L. Ed. 2d 539 (1975) (Powell, J., concurring)). We perceive some language in NEPA which may be said to endorse generally the concept of a worst case analysis. See 42 U.S.C. § 4331(b) (3) (responsibility of federal government to avoid "unintended" consequences of environmental use), 4332(C) (EIS to disclose all environmental impacts). However, because as noted earlier NEPA is a very general statute, see Kleppe, 427 U.S. at 421, 96 S. Ct. at 2735 (Marshall, J., concurring in part and dissenting in part), its literal language does not require a worst case analysis.
Failing to find a justification for or delineation of the worst case analysis on the face of NEPA does not end the inquiry however. "This is because the plain meaning rule is 'rather an axiom of experience than a rule of law, and does not preclude consideration of persuasive evidence if it exists.' " Watt, 451 U.S. at 266, 101 S. Ct. at 1677 (quoting Boston Sand Co. v. United States, 278 U.S. 41, 48, 49 S. Ct. 52, 53, 73 L. Ed. 2d 170 (1928) (Holmes, J.)). Persuasive evidence that a worst case analysis as envisioned by the Sierra Club is required by NEPA can be found in the case law interpreting NEPA as well as the history and interpretation of the CEQ worst case regulation.9
Scientists' Institute for Public Information, Inc. v. Atomic Energy Commission, 481 F.2d 1079, 1092 (D.C. Cir. 1973) (footnotes omitted). The EIS also must consider the probabilities of the occurrence of any environmental effects it discusses when it evaluates their environmental impact. E.g., Carolina Environmental Study Group v. United States, 510 F.2d 796, 799 (D.C. Cir. 1975). Cf. Ethyl Corp. v. EPA, 541 F.2d 1, 18 (D.C. Cir.) (en banc), cert. denied, 426 U.S. 941, 96 S. Ct. 2662, 49 L. Ed. 2d 394 (1976) (EPA must consider magnitude of risk of harm in rulemaking); Reserve Mining Co. v. EPA, 514 F.2d 492, 519-20 (8th Cir. 1975) (en banc) (magnitude of risk of harm must be considered when injunction abating a health hazard is sought).
Notably, the unavailability of information, even if it hinders NEPA's "full disclosure" requirement, should not be permitted to halt all government action. See, e.g., County of Suffolk v. Department of Interior, 562 F.2d 1368, 1378-79 (2d Cir. 1977), cert. denied, 434 U.S. 1064, 98 S. Ct. 1238, 55 L. Ed. 2d 764 (1978); Jicarilla Apache Tribe of Indians v. Morton, 471 F.2d 1275, 1280 & n. 11 (9th Cir. 1973). This is particularly true when information may become available at a later time and can still be used to influence the agency's decision. See, e.g., Sierra Club v. Morton, 510 F.2d 813, 827-28 (5th Cir. 1975).
One of the costs that must be weighed by decisionmakers is the cost of uncertainty--i.e., the costs of proceeding without more and better information. Where that cost has been considered, and where the responsible decisionmaker has decided that it is outweighed by the benefits of proceeding with the project without further delay, the courts may not substitute their judgment for that of the decisionmaker and insist that the project be delayed while more information is sought. Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S. Ct. 2718 [2730 n. 21], 49 L. Ed. 2d 576 (1976).
State of Alaska v. Andrus, 580 F.2d 465, 473-74 (D.C. Cir.), vacated in non-pertinent part sub nom. Western Oil & Gas Association v. Alaska, 439 U.S. 922, 99 S. Ct. 303, 58 L. Ed. 2d 315 (1978) (emphasis original, footnote omitted).
It is well-established that the CEQ's regulations and its interpretation of them are binding on this court and on agencies preparing EIS's. " [R]egulations promulgated by administrative bodies ... are usually given the force and effect of statutory law." 3 C.D. Sands, Sutherland Statutory Construction Sec. 65.05, at 174 (1974); see also K. Davis, 2 Administrative Law Treatise Sec. 7.13 (1979). A unanimous Supreme Court in Andrus declared that "CEQ's interpretation of NEPA is entitled to substantial deference." 442 U.S. at 358, 99 S. Ct. at 2341.11 By this the Court has meant that " 'the construction of a statute by those charged with its execution should be followed unless there are compelling indications that it is wrong.' " FCC v. WNCN Listeners Guild, 450 U.S. 582, 598, 101 S. Ct. 1266, 1276, 67 L. Ed. 2d 521 (1981), (quoting Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 381, 89 S. Ct. 1794, 1801, 23 L. Ed. 2d 371 (1969)). Therefore, if the CEQ interprets NEPA as mandating a particular worst case analysis, the CEQ's interpretation is binding on this court and on agencies preparing EIS's unless it is shown that the interpretation conflicts with the language or legislative intent of NEPA or the teachings of the Supreme Court. The Corps has presented no proof that the CEQ's worst case analysis regulation as the CEQ has interpreted it conflicts with any of these authorities. Indeed, there is ample support for the regulation in the statute, its legislative history, and case law.
The innovation the worst case analysis represents is precisely the type the Supreme Court unanimously approved in Andrus. While prior CEQ guidelines did not require a worst case analysis, the Court in Andrus held that a change in interpretation by the CEQ is no reason to decline to defer to its new interpretation. This innovation "occurred during the detailed and comprehensive process, ordered by the President, of transforming advisory guidelines into mandatory regulations applicable to all federal agencies."12 442 U.S. at 358, 99 S. Ct. at 2341. During the CEQ's comprehensive effort to review ten years of NEPA experience, it enacted the worst case analysis requirement. That regulation is sensible and addresses a widely recognized abuse by agencies--who previously had cloaked themselves in ignorance13 --without preventing agency action. Uncertainty as to environmental consequences need not bar action as long as the uncertainty is forthrightly considered in the decisionmaking process and disclosed in the EIS. Our holding does not bar the Corps from issuing these permits, it only requires them to obey the regulation by considering and disclosing all the possible environmental impacts of their issuance.
As with statutes, see, e.g., Watt, 451 U.S. at 265, 101 S. Ct. at 1677, interpretation of an administrative regulation must begin with its text. This regulation is quite straightforward. There are two ways in which it triggers the preparation of a worst case analysis: (1) " [i]f the information relevant to [significant] adverse impacts is essential to a reasoned choice among alternatives and is not known and the overall costs of obtaining it are exorbitant" or (2) if "the information relevant to [significant] adverse impacts is important to the decision and the means to obtain it are not known (e.g. the means for obtaining it are beyond the state of the art)." 40 C.F.R. Sec. 1502.22(b) (1), (2).
The trial court apparently regarded this case as falling under section 1502.22(b) (1), "essential" unknown information, and held the missing information not essential. See 532 F. Supp. at 1233-34. Whether that holding is clearly erroneous we need not evaluate since it is apparent to us that this case qualifies under section 1502.22(b) (2), "important" unknown information "beyond the state of the art." A total cargo loss by a supertanker is undoubtedly a significant adverse impact. No party can seriously question the importance of the analysis of such an oil spill to this permit decision. Indeed, the probabilities and consequences of oil spills are at the heart of this controversy. And all parties acknowledge that an analysis of a supertanker oil spill involving a total cargo loss beyond 24 hours after it occurs is beyond the state of the art. Thus it is clear that subsection (b) (2) is invoked in this case.
In the environmental law field, as in any field of administrative law, precedent must be carefully weighed because statutes and regulations may overrule judicial precedent. The worst case regulation is very recent in origin and is owed substantial deference by the courts. See Andrus, 442 U.S. at 356-58, 99 S. Ct. at 2340-41. Therefore the starting point for the legal analysis of this regulation is not precedent which predates it, but the language of the regulation itself. Of course, the regulation may not exceed the scope of its authorizing statute, but beyond this limitation a court must carefully inquire as to whether a precedential case has been overruled or limited by the regulation.
The trial court and the Corps also misunderstand the role of "speculation" in preparing a worst case analysis. The trial court acknowledged that a worst case analysis is "somewhat speculative" by nature. See 532 F. Supp. at 1233; see also 40 C.F.R. Sec. 1502.22(b) (analysis to be done when relevant information is not known). Yet, despite the fact that NEPA permits, even demands, "reasonable speculation," see Scientists' Institute, 481 F.2d at 1092, the trial court proceeded to require that the plaintiffs demonstrate a method for performing an "accurate" analysis that can support a "detailed discussion" of alternatives. See id. at 1234. Based on this demand, the court labeled the worst case analysis mere "guesswork" based on "uninformed speculation and conjecture." See id. at 1233-34. This interpretation of the regulation and the plaintiff's burden under it reads the regulation out of existence. The Sierra Club presented evidence demonstrating that it is possible to create an informative and useful worst case scenario that reasonably limits speculation. See, e.g., Trial Transcript Vol. VII at 455-59, 483-84. Thus, for instance, although the 24-hour dispersion model represents the state of the art in scientific methods, a worst case analysis could go beyond that state of the art based on known information about tides and currents in the Bay. See id. The preparation of a worst case analysis is not intended to and therefore cannot be held to the exacting standards imposed by the trial court because it goes beyond existing knowledge and methods of acquiring knowledge. There must, of course, be a base of information upon which to project past these limits, but the projections themselves cannot be subjected to the same rigorous scrutiny other information in the EIS must endure. The record reveals that the Sierra Club in this case adequately established the base of information upon which a worst case analysis could be premised.
The Sierra Club repeats its allegation made to the trial court that the FEIS failed to consider the environmental impacts of the bulk commodities activities associated with the deepening of the channels while attributing substantial benefits to those activities. See 532 F. Supp. at 1235-36. It argues that this approach skewed the FEIS' and the Corps' analysis of the proposed Galveston project, "presenting a biased and misleading picture of [its] value" in violation of NEPA and the Corps' permit decisionmaking regulations. The trial court recognized this imbalance, see id. at 1235, yet held that the Corps was not legally required to evaluate these environmental impacts in the FEIS, see id. at 1236. Alternatively, the trial court held that the Sierra Club failed to show how this skewed cost-benefit analysis in the FEIS sufficiently disturbed the overall balance of costs and benefits as determined by the Corps to require reconsideration of the permits by the Corps. See id. at 1239-40.
The Sierra Club advances three arguments in support of its claim that the failure of the FEIS to analyze the environmental impacts of the bulk commodities activities renders it deficient. Relying on Chelsea Neighborhood Association v. U.S. Postal Service, 516 F.2d 378 (2d Cir. 1975), the Sierra Club first argues that since the FEIS relied on the benefits of the bulk cargo activities, the FEIS must also evaluate the adverse effects of those activities. Second, the FEIS should have assessed those adverse effects as cumulative effects of related proposals. Third, the adverse effects should have been examined as secondary or indirect effects of the multipurpose deepwater port. The Sierra Club also disagrees with the trial court's alternative holding that this skewed cost-benefit analysis is insufficient to require a remand to the Corps for reconsideration of the permit decision.
We agree with the conclusion of the district court that "it is assumed throughout the FEIS that these [commodities] projects will reach fruition, resulting in substantial economic benefits attributed directly to the instant project.... Curiously, however, the FEIS declines to consider the potential [adverse] environmental effects of this expansion...." 532 F. Supp. at 1235.
33 C.F.R. Sec. 209.120(d) (1) (1968). A subsequent congressional report praised the Corps for this policy and strongly encouraged its expansion and broader application. See House Committee on Government Operations, Our Waters and Wetlands: How the Corps of Engineers Can Help Prevent Their Destruction and Pollution, H.R.Rep. No. 917, 91st Cong., 2d Sess. (1970).19
NEPA. NEPA does not require an agency to take the action that is the most compatible with environment, nor does it permit a court to substitute its judgment for that of the agency on the wisdom of the action taken by the agency. See Strycker's Bay, 444 U.S. at 227, 100 S. Ct. at 499 (citing, e.g., Kleppe); Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 98 S. Ct. 1197, 55 L. Ed. 2d 460 (1978). "The primary purpose of the impact statement is to compel federal agencies to give serious weight to environmental factors in making discretionary choices." Monroe County Conservation Council, Inc. v. Volpe, 472 F.2d 693, 697 (2d Cir. 1972); accord Kleppe, 427 U.S. at 490-10 & nn. 19, 21, 96 S. Ct. at 2730 & nn. 19, 21. NEPA therefore mandates at least a broad, informal cost-benefit analysis by federal agencies of the economic, technical, and environmental costs and benefits of a particular action; a formal monetary analysis is not required.20 See South Louisiana Environmental Council, Inc. v. Sand, 629 F.2d 1005, 1011-12 (5th Cir. 1980) (hereinafter cited as "SLEC "); 42 U.S.C. § 4332(B); 40 C.F.R. Sec. 1502.23. The District of Columbia Circuit has explained:
Calvert Cliffs' Coordinating Committee v. United States Atomic Energy Commission, 449 F.2d 1109, 1113 & n. 9 (D.C. Cir. 1971).
Cost-Benefit Analysis in this Case. The Second Circuit in Chelsea confronted an issue very similar to the one we face here. In Chelsea, the Post Office had acquired land in New York City for use in building a new facility. Airspace rights above the facility were granted to the City for use in building public housing. 516 F.2d at 381. The FEIS prepared by the Post Office was challenged, inter alia, on the grounds that the Post Office used the benefits of the housing project as a "selling point" and a principal reason to go forward with the facility while ignoring many of the disadvantages that would flow from it. Id. at 387. The court held the FEIS deficient on this basis. Id. at 388. The skewed cost-benefit analysis in Chelsea is remarkably similar to the skewed analysis found here by the trial judge, 532 F. Supp. at 1235, and substantiated by the record.
The trial court in the instant case found the FEIS deficient due to its skewed cost-benefit analysis, and agreed with the holding of Chelsea as a "general proposition," 532 F. Supp. at 1236, but held the legal rule of Chelsea had been limited to "actual proposals" due to the Supreme Court's ruling in Kleppe. Id. Therefore, the court held that Chelsea did not compel disclosure of the costs associated with these bulk commodities activities because these activities were speculative possibilities, not actual proposals. It is this legal holding of the district court that the Sierra Club challenges on appeal. It being a legal holding, we make our own determination of its validity. See supra Part II.A.2.
427 U.S. at 410 n. 20, 96 S. Ct. at 2730 n. 20; see Environmental Defense Fund v. Marsh, 651 F.2d 983, 999 (5th Cir. 1981).
We therefore hold that the district court reached an erroneous legal conclusion in failing to apply the principle of Chelsea to this skewed cost-benefit analysis. We follow Chelsea, apply it to the trial court's well-substantiated factual conclusion that the FEIS is skewed, and hold the FEIS deficient under NEPA.21 4. Reconsideration of the Permit Decision by the Corps
Although we hold that the FEIS is deficient under NEPA and Chelsea, that holding does not necessarily require a reversal of the Corps' decision to issue the permits and a remand for reconsideration. The adequacy of the FEIS and the procedural integrity of the Corps' permit decision are two different, although related, issues. The trial court held that even if the FEIS was deficient, it did not sufficiently taint the Corps' permit decision as to require a decision to reverse and remand. See 532 F. Supp. at 1239-40. We now turn to this holding of the trial court.
The trial court relied on SLEC, 629 F.2d 1005, for its legal standard when it held that the Sierra Club had not shown that the economic benefits of the commodity activities touted by the FEIS sufficiently disturbed the Corps' overall decision to issue the permits. See 532 F. Supp. at 1239 (citing 629 F.2d at 1013-14). SLEC, however, is not the correct legal standard against which to assess the effect of the deficient FEIS on the Corps' permit decision.
SLEC involved an EIS prepared by the Corps for one of its navigation projects that had already been authorized and funded by Congress. The plaintiffs attacked the FEIS on several grounds, one of which was the use of certain data to calculate economic benefits outlined in the EIS. See id. at 1013-15. This court affirmed the holding of the trial court that the selection of such data to calculate economic non-environmental benefits is left to agency discretion subject to "extremely limited" judicial review since it is "extremely tangential to the concerns expressed in NEPA." Id. at 1014. This discretion was not abused in SLEC because the plaintiffs had not shown that the data affected the environmental analysis in the EIS. See id. at 1013-14. An important additional justification for this limited judicial role was the fact that Congress had already authorized and funded the project. See id. at 1015. Omnipresent separation of powers considerations therefore prohibited the court from reviewing the project's economic justification unless that justification was "so flawed" as to "grossly distort [ ] the environmental considerations." Id.; see also id. at 1011 ("assessment of purely economic costs and benefits is .. traditionally ... the province of Congress"); 1013 ("only if Congress was mislead by the inclusion [in the EIS] of ... erroneous benefits in its consideration of environmental consequence may [the court order reworking of the EIS]").
Pullman-Standard, 456 U.S. 273, 292, 102 S. Ct. 1781, 1792, 72 L. Ed. 2d 66 (1982) (citing Kelley v. Southern Pacific Co., 419 U.S. 318, 331-32, 95 S. Ct. 472, 479, 42 L. Ed. 2d 498 (1974)). We choose the alternative path because, as our discussion infra demonstrates, our close review of the record reveals that there is "only one possible resolution of the factual issue" of whether the deficient FEIS tainted the Corps' permit decision. The choice of the alternative path is bolstered by three additional reasons--one peculiar to environmental litigation generally and two peculiar to this case.
First, the most important, this and other courts have noted that protracted litigation in environmental cases can kill projects by delay. See, e.g., SLEC, 629 F.2d at 1014 n. 9; see also Strycker's Bay, 444 U.S. at 223, 100 S. Ct. at 221 (noting protracted nature of environmental litigation); Vermont Yankee, 435 U.S. at 557-58, 98 S. Ct. at 1218 (noting same). If we were to remand to the trial court for application of the correct legal standard, an appeal to us, and perhaps beyond, would undoubtedly follow, entailing at least several more months of litigation. As the appellees have repeatedly told us, construction has been delayed pending the resolution of this litigation and further delay could kill the project. These considerations weigh strongly in favor of resolution of this issue by this court at this time.
33 C.F.R. Sec. 320.4(a) (1) (emphasis added).
Seeking to discover whether the deficient FEIS prevented the Corps from adhering to these standards, we begin our "searching and careful" inquiry into the facts, as required by Overton Park, see 401 U.S. at 416, 91 S. Ct. at 823, with the most important piece of documentary evidence demonstrating the effect or lack of effect of the skewed FEIS cost-benefit analysis on the permit decision, Colonel Sigler's "findings of fact."
Vermont Yankee Nuclear Power Corp. v. N.R.D.C., 435 U.S. 519, 554-5, 98 S. Ct. 1197, 1217, 55 L. Ed. 2d 460 (1978), quoting ICC v. Jersey City, 322 U.S. 503, 514, 64 S. Ct. 1129, 1134, 88 L. Ed. 1420 (1944).
Nevertheless, under federal law, the Department of the Army is charged with regulating construction, dredging, filling, or disposing of material in United States waters. See, e.g., 33 U.S.C. §§ 403, 1344, 1413. Therefore, permits from the Corps of Engineers were required before any dredging or construction could begin
Under NEPA, the federal official responsible for a major federal action, such as issuing these permits, must prepare the EIS. See 42 U.S.C. § 4332(C). Corps regulations require the District Engineer (DE) processing the permit applications to obtain from the applicant information the DE considers necessary to prepare the EIS. See 33 C.F.R. Sec. 325.4(b) (3).
In addition, the Corps in this case voluntarily adhered to the new mandatory Council on Environmental Quality ("CEQ") regulations on EIS preparation. We hold infra that this voluntary adherence requires that the Corps' preparation of the EIS be scrutinized under those regulations which insist that an "agency shall independently evaluate the information submitted and shall be responsible for its accuracy." 33 C.F.R. Sec. 1506.5(a). The intent of this regulation is that "acceptable work not be redone, but that it be certified by the agency." Id.
The role of the private firm in the preparation of the DEIS and the FEIS is particularly troubling in this case because the consulting firm also had a stake in the project which it was evaluating. Although the conflict of interest itself may not have been illegal under the old CEQ advisory guidelines on EIS preparation, Corps rubberstamping of a consultant-prepared FEIS is. See Sierra Club v. Lynn, 502 F.2d 43, 58-59 (5th Cir. 1974), cert. denied, 421 U.S. 994, 95 S. Ct. 2001, 44 L. Ed. 2d 484; 422 U.S. 1049, 95 S. Ct. 2668, 45 L. Ed. 2d 701 (1975) (permitting a "financially interested private contractor" to participate in EIS preparation, but barring agency abdication of its duties by "reflexively rubberstamping a statement prepared by others"). In addition, the new mandatory CEQ regulations, are especially disapproving of the use of contractor-prepared statements when the contractor may have a conflict of interest. In fact, the regulations require contractors involved in the preparation of a statement to execute a "disclosure statement ... specifying that they have no financial interest in the outcome of the project." 33 C.F.R. Sec. 1506.5(c). This regulation, as set forth by the CEQ, "is designed ... to minimize the conflict of interest inherent in the situation of those outside the government coming to the government for money, leases or permits while attempting impartially to analyze the environmental consequences of their getting it." 43 Fed.Reg. 55, 987 (1978).
We realize that the preparation of an FEIS is a mammoth task and that CEQ and Corps regulations permit the participation of private consultants. These regulations recognize the reality that private consultants play an important, if sometimes troubling, role in modern government. See, e.g., D. Guttman & B. Willner, The Shadow Government (1976). And, of course, administrative agencies have discretion in the performance of their duties. See, e.g., South Louisiana Environmental Council, Inc. v. Sand, 629 F.2d 1005, 1014 (5th Cir. 1980). Nonetheless, an agency may not delegate its public duties to private entities, see Lynn, 502 F.2d at 59, particularly private entities whose objectivity may be questioned on grounds of conflict of interest.
We have taken a hard look at the preparation of the EIS, and the problems we have noted lead us to question its objectivity and whether it represents the independent judgment of the Corps. We express no legal opinion on whether the Corps improperly rubberstamped an FEIS prepared by someone else or whether a violation of 33 C.F.R. Sec. 1506.5 occurred since those issues were not specifically presented for our review. See 5 U.S.C. § 706. However we do take note of these problems and counsel caution in the future in the broader context of our mandate to review the record to ensure that the Corps "in good faith objectively [took] a hard look at the environmental consequences of the project." Isle of Hope Historical Association, Inc. v. United States Army Corps of Engineers, 646 F.2d 215, 220 (5th Cir. 1981) (per curiam) (adopting opinion of district court).
The Corps also urges upon us the holding in National Center for Preservation Law v. Landrieu, 496 F. Supp. 716 (D.S.C.), aff'd per curiam, 635 F.2d 324 (4th Cir. 1980), in support of its argument. However, Landrieu is distinguishable and inapposite. In Landrieu, the agency, as with the Corps here and the agency in North Slope, had filed its DEIS before the effective date of the new regulations and was therefore exempt from them. Id. at 737. There the similarity between our case and North Slope on one hand, and Landrieu on the other, ends because the agency in Landrieu apparently did not voluntarily adhere to the new CEQ regulations. See id. Therefore the court evaluated the agency's duty to adhere to them under the "fullest extent practicable" standard found in 33 C.F.R. Sec. 1506.12(a) and held that the determination of whether it was practicable to adhere was a question of administrative discretion, apparently not reviewable by a court. See id. The court reinforced its decision by erroneously stating that the CEQ regulations were merely advisory and not mandatory. See id. The Supreme Court and the regulations themselves declare otherwise. See Andrus, 442 U.S. at 356-58, 99 S. Ct. at 2340; 40 C.F.R. Sec. 1500.3; see also Exec. Order No. 11,991, 42 Fed.Reg. 26,96 7 (1977)
Thus overruling our previous declaration that the "CEQ does not have the authority to prescribe regulations governing compliance with NEPA." Hiram Clarke Civic Club, Inc. v. Lynn, 476 F.2d 421, 424 (5th Cir. 1973)
"Cost-benefit analysis" can take many forms. It varies from a formal analysis in which all costs and benefits are quantified in an identical unit of measurement, usually dollars, and compared, to an informal analysis where costs and benefits are identified, quantified if possible, and balanced. See Kasper, Cost-Benefit Analysis in Environmental Decisionmaking, Geo. Wash. L. Rev. 1013, 1013-15 (1970). Under the Council on Environmental Quality's regulations governing the implementation of NEPA, an EIS need not include a formal cost-benefit analysis and in fact a more informal analysis is preferred "when there are important qualitative considerations." 40 C.F.R. Sec. 1502.23. At a minimum, the EIS "should at least indicate those considerations, including factors not related to environmental quality, which are likely to be relevant and important to a decision." Id
Apparently, the first appearance of cost-benefit analysis in a federal statute was in the Flood Control Act of 1936, ch. 688, Sec. 1, 49 Stat. 1570 (1936) (codified at 33 U.S.C. § 701a (1976)). Since 1976, it has become a common tool in legislative and administrative decisionmaking and, not unexpectedly, a source of legal controversy. See, e.g., American Textile Mfgrs. Inst., Inc. v. Donovan, 452 U.S. 490, 101 S. Ct. 2478, 69 L. Ed. 2d 185 (1981) (Secretary of Labor not required to perform cost-benefit analysis for health and safety standards issued under Sec. 6(b) (5) of the Occupational Health and Safety Act, 29 U.S.C. § 655(b) (5), Congress balanced costs and benefits); Exec. Order No. 12,291, 46 Fed.Reg. 13,193 (1981) (cost-benefit analysis required for all regulatory action). Its growth in popularity has paralleled the rise of the jurisprudential school endorsing economic analysis of law. See, e.g., R. Posner, Economic Analysis of Law (2d Ed.1977)
See, e.g., U.S. Comptroller General, General Accounting Office, An Overview of Benefit-Cost Analysis for Water Resources Projects--Improvements Still Needed (1978) (CED 78-127); Note, Environmental Impact Assessment for Water Resource Projects: The Army Corps of Engineers, 45 Geo. Wash. L. Rev. 1095 (1977)
A leading, early case described NEPA as " [a]t the very least, '... an environmental full disclosure law.' " Monroe County, 472 F.2d at 697, (quoting Environmental Defense Fund, Inc. v. Corps of Engineers, 325 F. Supp. 749, 759 (E.D. Ark. 1971), injunction vacated and case dism'd, 342 F. Supp. 1211 (E.D. Ark.), aff'd, 470 F.2d 289 (8th Cir.), injunction denied, 412 U.S. 931, 93 S. Ct. 2749, 37 L. Ed. 2d 160 (1972)). Subsequent judicial opinions have declared that full disclosure is but one of many NEPA requirements. See, e.g., Public Serv. Co. v. NRS, 582 F.2d 77, 85 n. 12 (1st Cir.), cert. denied, 439 U.S. 1046, 99 S. Ct. 721, 58 L. Ed. 2d 705 (1978)
Because we hold that the Corps must include the cost of bulk cargo activities in the FEIS under Chelsea, we need not reach and express no opinion on the other two arguments for inclusion of these costs in the FEIS advanced by the Sierra Club: (1) as cumulative effects of related proposals and (2) as a secondary or indirect effect of the port. We therefore proceed to analyze the trial court's alternative holding that even if the FEIS was deficient under NEPA, that deficiency did not sufficiently disturb the Corps' "public interest" analysis as to require a remand to the Corps for correction of the FEIS and reconsideration of the permit decision. See 532 F. Supp. at 1239-40