Opinion ID: 780570
Heading Depth: 2
Heading Rank: 6

Heading: environmental analysis under nepa

Text: A. DOT's Decision Not to Prepare an EIS 72 We next determine whether DOT acted in an arbitrary and capricious manner when it failed to prepare an Environmental Impact Statement on the basis of its Environmental Assessment. By its own terms, NEPA intended to reorganize the priorities of the federal government, to integrate environmental amenities and values alongside more traditional economic and technical considerations. 42 U.S.C. § 4332(2)(B). Congress directed that the statute and its implementing regulations be used toward this end in government decisionmaking to the fullest extent possible. Id. § 4332. 73 To achieve its goal of including environmental concerns in government decisionmaking, NEPA requires that an EIS be prepared for all major Federal actions significantly affecting the ... human environment. Id. § 4332(2)(C). In certain circumstances, agencies may first prepare an EA to make a preliminary determination whether the proposed action will have a significant environmental effect. See Nat'l Parks & Conservation Ass'n v. Babbitt, 241 F.3d 722, 730 (9th Cir.2001) (citing 40 C.F.R. § 1501.4), cert. denied, 534 U.S. 1104, 122 S.Ct. 903, 151 L.Ed.2d 872 (2002). If the EA establishes that the agency's action ` may have a significant effect upon the ... environment, an EIS must be prepared.' Id. (quoting Found. for N. Am. Wild Sheep v. United States Dep't of Agric., 681 F.2d 1172, 1178 (9th Cir.1982)) (emphasis and alteration in original). If not, the agency must issue a Finding of No Significant Impact (FONSI), accompanied by `a convincing statement of reasons to explain why a project's impacts are insignificant.' Id. (quoting Blue Mountains, 161 F.3d at 1212) (internal citations and quotation marks omitted). 74 Thus, to decide whether an EIS is required, we must determine: (1) whether the challenged rules constitute major federal actions; and (2) whether they may significantly affect the environment. We find that DOT's rules are major federal actions that may significantly affect the environment, and thus we hold that DOT acted in an arbitrary and capricious manner in failing to prepare an EIS for the challenged regulations. 75 1. Major Federal Action 76 The Council on Environmental Quality (CEQ), a body established by NEPA, 42 U.S.C. §§ 4342-4347, has issued regulations implementing NEPA. We rely on these regulations to guide our review of an agency's compliance with NEPA, Native Ecosystems Council v. Dombeck, 304 F.3d 886, 894 n. 1 (9th Cir.2002), and the Supreme Court has held that they are entitled to substantial deference, Marsh, 490 U.S. at 372, 109 S.Ct. 1851. The relevant CEQ regulations implementing NEPA define major Federal action[s] as actions with effects that may be major and which are potentially subject to Federal control and responsibility, including [a]doption of official policy, such as rules, regulations, and interpretations. 40 C.F.R. § 1508.18. DOT, of course, does not dispute that its actions are federal, but does dispute Petitioners' allegations regarding the regulations' effects. DOT alleges that the effects of the Application and Safety Rules are limited to the increased diesel emissions of Mexican trucks during the road-side inspections and safety monitoring mandated by the regulations. It thus predicts that there will be no increase in Mexican truck traffic resulting from the regulations. DOT's analysis goes on to suggest that even if such an increase might occur, its effects would not require consideration because it would be a result of presidential rescission of the moratorium, not the regulations themselves. This novel parsing of the regulations' effects fails to meet NEPA standards. 77 DOT's argument here echoes its earlier causation argument in the standing context. It is equally unavailing here for a similar reason. The CEQ regulations make clear that the effects of federal actions include [i]ndirect effects, which are caused by the action and are later in time ... but are still reasonably foreseeable, id. § 1508.8(b), as well as [c]umulative impact ... which results from the incremental impact of the action when added to other ... reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions, id. § 1508.7. 78 We have already concluded that the President's rescission of the moratorium was reasonably foreseeable at the time the EA was prepared and the decision not to prepare an EIS was made. Cf. Native Ecosystems, 304 F.3d at 896 (holding that a memorandum that evidences a decision to consider ... seriously taking certain actions renders those actions reasonably foreseeable). To restrict consideration of the regulations' effects in the way DOT proposes would contravene not only the plain language of the CEQ regulations, but also the statutory command of NEPA, that environmental effects of government action be considered to the fullest extent possible. 42 U.S.C. § 4332. 79 As for the requirement that the federal action be major, the CEQ regulations tell us that [m]ajor reinforces 734 but does not have a meaning independent of significantly, 40 C.F.R. § 1508.18, meaning that a federal action is major whenever it has significant environmental effects. See City of Davis v. Coleman, 521 F.2d 661, 673 n. 15 (9th Cir.1975). 80 2. Significantly Affecting the Human Environment 81 The CEQ regulations also define the crucial term significantly, to clarify the situations in which an agency must prepare an EIS: 82 Significantly as used in NEPA requires considerations of both context and intensity: (a) Context. This means that the significance of an action must be analyzed in several contexts such as society as a whole (human, national), the affected region, the affected interests, and the locality. Significance varies with the setting of the proposed action. For instance, in the case of a site-specific action, significance would usually depend upon the effects in the locale rather than in the world as a whole. Both short- and long-term effects are relevant. 83 (b) Intensity. This refers to the severity of impact.... The following should be considered in evaluating intensity: 84 .... 85 (2) The degree to which the proposed action affects public health or safety. 86 .... 87 (4) The degree to which the effects on the quality of the human environment are likely to be highly controversial. 88 (5) The degree to which the possible effects on the human environment are highly uncertain or involve unique or unknown risks. 89 .... 90 (10) Whether the action threatens a violation of Federal, State, or local law or requirements imposed for the protection of the environment. 91 40 C.F.R. § 1508.27. If DOT's action is environmentally significant according to any of these criteria, then DOT erred in failing to prepare an EIS. See Nat'l Parks, 241 F.3d at 731. An examination of these criteria reveal that the challenged regulations are environmentally significant, and an EIS should have been prepared. 92 (a) Context 93 The CEQ regulations explain that the proposed federal action must be analyzed with regard to several contexts — national, regional, and local — as well as by looking at the short- and long-term effects of the proposed action. Measured against this standard, DOT's EA is woefully inadequate. The EA calculates likely emissions increases if the Application and Safety Rules are implemented. It dismisses those increases as insignificant, however, because they are very small relative to national levels of emissions. It does not conduct any analysis regarding whether these increases may be localized in certain areas near the Mexican border, including such likely destinations as Southern California or Texas. 94 Amicus ATA considers it unreasonable that DOT should have to make a determination of the expected routes of 34,000 hypothetical [Mexican trucks]. Regardless of the law's reasonableness (a question properly addressed by Congress — not us), this is precisely what NEPA and the CEQ regulations require. The law requires DOT to consider the most likely localities to be affected by increased Mexican truck traffic and to perform more localized analyses for these areas. Indeed, comments submitted to FMCSA during the notice-and-comment period analyzed publicly available government data to predict, not surprisingly, that major cities near the Mexican border would likely suffer the greatest environmental impact as a result of the regulations. The fact that commenters performed such an analysis does not indicate that their analysis was correct, but rather that it was possible to conduct such an analysis. DOT's failure to do so indicates that it did not take a sufficiently hard look at the environmental effects of its actions or at the public comments it received. 95 Furthermore, DOT failed to address adequately the long-term effects of its actions. In conducting its EA, DOT limited its analysis to the environmental impact of Mexican trucks in the year 2002. This is anomalous in itself, considering that the regulations were scheduled to become effective only as of May 3, 2002. More significantly, the EA offered no projections of the increase (or decrease) in Mexican truck traffic after 2002, though the regulations were certainly expected to continue in effect beyond the end of last year; indeed they would be in effect now absent this action. 96 ATA contends that increases in Mexican truck traffic in years subsequent to 2002 would be attributable to the success of NAFTA, rather than to the regulations themselves. This argument is beside the point, as it is impossible to separate increases in truck traffic due to the opening of the border from increases in truck traffic due to successful international trade; it is precisely this desired increase in international trade that prompted DOT to issue regulations facilitating cross-border truck traffic in the first place. 97 Once again, DOT received this very criticism in public comments during its rulemaking process. The commenters used available government data to estimate future increases in Mexican truck traffic after 2002. This alone should have prompted DOT to conduct a long-term analysis, as required by the CEQ regulations, or at the very least, to convincing[ly] ... explain its absence. Nat'l Parks, 241 F.3d at 730. 98 (b) Intensity 99 (i) Effect on Public Health and Safety 100 Petitioners contend that DOT must prepare an EIS, in part due to the potential effect of the challenged regulations on public health and safety. Although we have never discussed this requirement in the context of air pollution, other courts have considered even [the] marginal degradation of drinking water to be environmentally significant for purposes of this regulation. See United States v. 27.09 Acres of Land, 760 F.Supp. 345, 353 (S.D.N.Y.1991). The same could easily be said of a marginal degradation of the quality of the air we breathe. 101 The pollutants at issue are oxides of nitrogen (NOx) and airborne particulate matter (PM-10). These compounds are emitted into the air as part of the exhaust fumes of diesel trucks, such as those that are the subject of the challenged regulations. Petitioners-Intervenors have pointed to a wealth of government and private studies showing that diesel exhaust and its components constitute a major threat to the health of children, contribute to respiratory illnesses such as asthma and bronchitis, and are likely carcinogenic. While these studies were not placed in the administrative record, that does not excuse DOT's failure even to consider whether any negative health effects could be associated with increased diesel exhaust emissions. 102 (ii) Uncertainty 103 If the environmental effects of a proposed agency action are uncertain, the agency must usually prepare an EIS: 104 Preparation of an EIS is mandated where uncertainty may be resolved by further collection of data, or where the collection of such data may prevent speculation on potential ... effects. The purpose of an EIS is to obviate the need for speculation by insuring that available data are gathered and analyzed prior to the implementation of the proposed action. 105 Nat'l Parks, 241 F.3d at 732 (quoting Sierra Club v. United States Forest Serv., 843 F.2d 1190, 1195 (9th Cir.1988)) (internal citation omitted) (omission in original). 106 There are a number of areas of uncertainty regarding DOT's EA that merit additional investigation. The most significant of these is whether, and to what extent, cross-border Mexican truck traffic will increase if DOT implements the regulations. A related question is whether, and to what extent, such increased Mexican truck traffic will consist of trucks producing more dangerous emissions than their United States counterparts. 107 DOT acknowledges that there are reasons to believe that [increased traffic and pollution] might occur, but it contends that these increases will be smaller than Petitioners suggest. Strangely, despite DOT's reasons to believe that such increases will occur, its EA does not address them. In fact, the EA specifically assumed for the purposes of its study that the implementation of [the regulations] would not affect the trade volume between the United States [and] Mexico. It contends instead that any increases would be the result of the modification of the moratorium and not the implementation of the [regulations]. Indeed, the EA asserts that the number of Mexican trucks in the United States will likely decrease as a result of the new regulations alone, because not all existing Mexican trucks currently operating in the border zone could or will comply with them. This illogical parsing of the cause of increased pollution, i.e., that decreases in truck traffic are credited to DOT's action, but the potentially much larger expected increases in the same traffic are attributed to the President's modification of the moratorium, dictates the EA's overall conclusions. 108 The EA goes on to evaluate the environmental effects of the regulations — attempting to segregate them from those attributable to the rescission of the moratorium — and concludes that the regulations will actually slightly reduce emissions by Mexican trucks within the border zone, and have no significant effect on air quality beyond the border zone, when evaluated on a national scale. This emissions analysis, in turn, is based on the EA's further assumptions regarding the quality and age of the Mexican truck fleet. 109 The EA assumes, without stating any basis therefor, that it considered approximately one-third of Mexican trucks to be identical to United States trucks manufactured after 1994, while considering the remaining trucks identical to United States trucks manufactured in 1986. (More precisely, the EA considered 130,000 of 400,000 Mexican trucks to be manufactured after 1994, and the rest in 1986, and then lamented the significant confounding variable in its study, that the analysis programs it used were based on United States vehicles.) These years are significant because 1994 is the year after which Mexican emissions standards became equivalent to United States standards. The year 1986 was selected, according to DOT, because it was the last year when neither Mexico nor the United States had any relevant emissions regulations in place. 110 There are two problems with this analysis. First, the EA provides no basis whatsoever for its selection of one-third as the proportion of Mexican trucks manufactured after 1994. Other studies, though not part of the administrative record, have concluded that this percentage is closer to 20% (study by the General Accounting Office) or even 10% (private study commissioned by the California Attorney General). While we do not consider such studies to be conclusive, they are at least founded on some analysis of raw data, and based on some ascertainable methodology. The EA, on the other hand, seems to have randomly selected one-third as its preferred proportion, citing no authority or study for that number. 111 The second analytical defect echoes our concern regarding the EA's failure to consider long-term effects. The United States has already adopted much stricter emissions regulations that will become effective in 2004 and 2007. See 40 C.F.R. § 86.004-11 (2004); id. § 86.007-11 (2007). In addition, six major United States diesel truck engine manufacturers have entered into consent decrees in the District Court for the District of Columbia in settlement of CAA violations, in which they have agreed to abide by certain of the 2004 emissions regulations as of October 1, 2002. See, e.g., Consent Decree, United States v. Caterpillar, Inc., No. 98-02544(HHK) (D.D.C.1999). Neither the EA nor DOT cite to any known plans of the Mexican government to tighten its emissions standards beyond those currently in place. Indeed, the EA never even considered this issue because, as discussed above, it limited its analysis to the year 2002. The existence of regulations and consent decrees that will significantly alter the relative environmental impact of Mexican truck traffic in the near future would further strengthen the need for the EA to have considered future implications of its actions. 112 Thus, the EA — assuming no increase in Mexican truck traffic, making an arbitrary assumption about the percentage of newer, cleaner Mexican trucks on the roads, and failing to take account of future increasing discrepancies in emissions rules — conducted an environmental analysis that found no increase in emissions due to the regulations' implementation. Our law mandates that an agency complete an EIS where uncertainty may be resolved by further collection of data, or where the collection of such data may prevent `speculation on potential ... effects.' Nat'l Parks, 241 F.3d at 732 (quoting Sierra Club, 843 F.2d at 1195) (internal citation omitted) (omission in original). Petitioners raise many uncertainties about the EA, as does amicus the Attorney General of the State of California, see infra, and there is no suggestion that these uncertainties do not lend themselves to quantification. (Indeed, Petitioners have submitted a number of studies attempting precisely what DOT should have done.) 113 Once again, we do not wish to dictate the outcome of the analysis that DOT must perform. Perhaps DOT will determine that the new regulations will have only a minor impact — one which will be negligible in light of other factors. In the absence of such analysis, however, we cannot defer to the agency's assessment. 114 (iii) Threat of Illegality 115 The California Attorney General asserts that DOT failed to take account of California's emissions regulations, which are more stringent than the federal standards. In its determination of whether its proposed action is significant, an agency must consider [w]hether the action threatens a violation of Federal, State, or local law or requirements imposed for the protection of the environment. 40 C.F.R. § 1508.27(b)(10); accord Sierra Club, 843 F.2d at 1195. In Sierra Club, we faulted the Forest Service's EA for its failure to consider, or even mention, California's water quality standards, which might have been threatened by proposed timber sales. See Sierra Club, 843 F.2d at 1195. The same fault is present here. California has mandated the adoption of airborne pollutant standards for the state, Cal. Health & Safety Code § 39606 (West 2002), and has adopted rules setting specific limits for airborne pollutants, including NOx and PM-10, Cal.Code Regs., tit. 17, §§ 70100-200 (2002). Regardless of whether the influx of Mexican trucks will cause the levels of these pollutants to rise beyond California's air quality limits — an issue on which the record before us is insufficient — DOT had an obligation to consider whether its regulations might violate these rules. 116 The California Attorney General also points out that DOT's actions could violate the CAA, thus further triggering the illegality prong of the significance analysis. Because we find that DOT violated the CAA, see infra, this further strengthens our conclusion that DOT's actions are environmentally significant for NEPA purposes. 117 (iv) Controversy 118 Controversy sufficient to require preparation of an EIS occurs when substantial questions are raised as to whether a project ... may cause significant degradation of some human environmental factor, or there is a substantial dispute [about] the size, nature, or effect of the major Federal action. Nat'l Parks, 241 F.3d at 736 (internal citations omitted and alterations in original). The evidence establishing such a controversy must be brought to the agency's attention while the agency is conducting its deliberations, not post hoc. See id. Thus, the controversy requirement is two-fold: Petitioners must show that there was a substantial dispute about DOT's actions and that this dispute raised substantial questions about their validity. The burden then shifts to DOT to provide a convincing explanation why no controversy exists. See id. 119 Petitioners' claim satisfies the first requirement. We have held that an `outpouring of public protest' — where, for example, 85% of public comments opposed the proposed agency action — constitutes a substantial dispute. Id. (quoting Greenpeace Action v. Franklin, 14 F.3d 1324, 1334 (9th Cir.1992)). Here, [o]ver 90 percent of the comments opposed DOT's regulations. Application Rule, 67 Fed.Reg. at 12,704. DOT timely received these comments, and duly noted their existence in the comments accompanying the final regulations. See id. 120 Petitioners' claim also satisfies the second requirement. A substantial portion of the negative comments offered real criticism of DOT's action and its failure to adequately assess its 743 environmental impact. These comments, several of which were made by the future litigants here, as well as by other national environmental organizations, describe many of the defects discussed above. Because many of these criticisms have merit, and DOT failed to adequately account for its failure to act on them, its action is controversial under the CEQ regulations and requires preparation of an EIS. 121 (c) Convincing Statement of Reasons 122 In sum, Petitioners have successfully demonstrated that DOT's proposed regulations may have a significant environmental impact, mandating the preparation of an EIS. DOT has failed to demonstrate that its EA contains anything close to the statutorily required convincing statement of reasons sufficient to support a decision not to prepare an EIS. We are similarly unpersuaded by DOT's last-ditch argument that, as an agency with no jurisdiction over environmental matters, it need not consider the environmental consequences of its actions. This argument flies in the face of the text of NEPA, which requires that  all agencies of the Federal Government shall .... include in every... major Federal action[] significantly affecting the quality of the human environment, a detailed statement by the responsible official on ... the environmental impact of the proposed action. 42 U.S.C. § 4332(2) (emphasis added). 123 One final point regarding the shortcomings of DOT's EA is that its analysis is limited to comparing the status quo (the Baseline Scenario) to the situation in which the regulations had been implemented (the Proposed-Action Scenario). By not considering additional alternatives (such as, for example, proposing more stringent controls on incoming Mexican trucks), DOT further failed to abide by NEPA's statutory command to prepare a detailed statement ... on ... alternatives to the proposed action. 42 U.S.C. § 4332(2)(C); see also 40 C.F.R. § 1508.25(b)(2) (defining [a]lternatives to include [o]ther reasonable courses of actions [sic]). Indeed, the CEQ regulations state that consideration of alternatives is the heart of the environmental impact statement. 40 C.F.R. § 1502.14. The rule of reason guides `both the choice of alternatives as well as the extent to which the Environmental Impact Statement must discuss each alternative.' Am. Rivers, 201 F.3d at 1200 (quoting City of Carmel-by-the Sea v. United States Dep't of Transp., 123 F.3d 1142, 1155 (9th Cir.1997)). `[F]or alternatives which were eliminated from detailed study, [an agency must] briefly discuss the reasons for their having been eliminated.' Id. (quoting 40 C.F.R. § 1502.14(a)) (emphasis omitted). Thus, in preparing its EIS, DOT should explore a wider range of alternatives. 124 B. Categorical Exclusion of the Certification Rule 125 We next must determine whether DOT acted arbitrarily and capriciously in failing to conduct any NEPA environmental analysis at all for the Certification Rule. DOT contends that this rule falls within an exception to the generally applicable requirements of NEPA. The CEQ regulations allow categorical exclusion of actions which do not individually or cumulatively have a significant effect on the human environment and which have been found to have no such effect in procedures adopted by a Federal agency in implementation of these regulations. 40 C.F.R. § 1508.4 (citing 40 C.F.R. § 1507.3) (emphasis added). For such actions, neither an environmental assessment nor an environmental impact statement is required. Id. 126 Agencies are required to develop guidelines as to which of their actions do or do not require the preparation of an EA or an EIS. See id. § 1507.3. FMCSA, as a constituent agency, is subject to DOT's guidelines. See Dep't of Transp., Order 5610.1C, at ¶ 20(a)(2) (Sept. 18, 1979), as amended (July 13, 1982 and July 30, 1985), available at http:/ /isddc.dot.gov [hereinafter DOT Order 5610.1C]. Individual agencies within DOT are permitted to issue their own guidelines, id. ¶ 20(a)(1), but FMCSA has not done so. 127 Therefore, we must examine DOT's Order to determine whether the Certification Rule falls within those categories of actions that it has found to have no[environmental] effect. 40 C.F.R. § 1508.4. Paragraph 4(c) of the order specifies the categorical exclusions DOT employs. See DOT Order 5610.1C, at ¶ 4(c). The list includes such actions as [a]dministrative procurements, [p]ersonnel actions, and [p]roject amendments (e.g. increases in costs) which do not significantly alter the environmental impact of the action. Id. There is no categorical exclusion that seems even plausibly capable of encompassing the Certification Rule. 6 In effect, DOT is arguing that, even though the Certification Rule is not subject to any of DOT's categorical exclusions, it should be categorically excluded from the EA/EIS requirement because it has no significant environmental impact. This cannot be the case. 128 We review an agency's determination that a particular action falls within one of its categorical exclusions under the arbitrary and capricious standard. Alaska Ctr. for Env't v. United States Forest Serv., 189 F.3d 851, 857 (9th Cir.1999); see also California v. Norton, 311 F.3d 1162, 1176 (9th Cir.2002). [A]n agency's interpretation of the meaning of its own categorical exclusion should be given controlling weight unless plainly erroneous or inconsistent with the terms used in the regulation. Alaska Ctr., 189 F.3d at 857. DOT has failed to identify any particular categorical exclusion applicable to the Certification Rule and may not do so post hoc. Norton, 311 F.3d at 1175. Even if it could, any claim that one of these exclusions applied would be contrary to the plain text of the DOT Order, and thus inconsistent with the terms used in the regulation, and not entitled to our deference. Thus, DOT acted in an arbitrary and capricious manner by failing to prepare an EIS, or at least in failing to prepare an EA for the Certification Rule and then determining on that basis whether to prepare an EIS.