Opinion ID: 47918
Heading Depth: 2
Heading Rank: 3

Heading: Improper Segmentation

Text: 40 Finally, the intervenor challenges the district court's determination that this project, the first phase of a possible three-phase development plan, constitutes improper segmentation, or piecemealing: an attempt by an agency to divide artificially a `major Federal action' into smaller components to escape the application of NEPA to some of its segments. Save Barton Creek Ass'n v. Fed. Highway Admin., 950 F.2d 1129, 1139 (5th Cir.1992). In so holding, the district court identified nothing that rendered the other two phases impracticable, financially unattractive, or generally not feasible. O'Reilly, 2004 WL 1794531 at . It held that [t]he record blaringly suggests that the sole reason that Phases II and III were eliminated... was to facilitate the issuance of the permit so that the project could get underway. Id. Ultimately, the district court found that the current project represents a piecemealing approach for implementing the totality of the [entire three-phase] project. Id. 41 `As a general rule under NEPA, segmentation of highway projects is improper for purposes of preparing environmental impact statements.' Save Barton Creek, 950 F.2d at 1140 (quoting Piedmont Heights Civic Club, Inc. v. Moreland, 637 F.2d 430, 439 (5th Cir. Unit B 1981)). Although the question of piecemealing may arise when dealing with a multi-phase project, it presents a different problem than that reviewed in the preceding section on cumulative impacts. As we have discussed, an assessment of cumulative effects asks whether a project with individually mitigated-to-insignificant effects may yet result in significant environmental impacts when those effects are aggregated with the foreseeable effects of other environmentally impacting human activities and natural occurrences. An analysis of improper segmentation, however, requires that where proceeding with one project will, because of functional or economic dependence, foreclose options or irretrievably commit resources to future projects, the environmental consequences of the projects should be evaluated together. Fritiofson, 772 F.2d at 1241, n.10. 10 42 To determine whether a single project is improperly segmented into multiple parts, this Circuit applies a four-part test that asks whether the proposed segment (1) has logical termini; (2) has substantial independent utility; (3) does not foreclose the opportunity to consider alternatives; and (4) does not irretrievably commit federal funds for closely related projects. Save Barton Creek, 950 F.2d at 1140 (citing Piedmont Heights, 637 F.2d at 439). It is important to note that projects, for the purposes of NEPA, are described as proposed actions, or proposals in which action is imminent. 40 C.F.R. § 1508.23. `[T]he mere contemplation of certain action is not sufficient to require an impact statement.' Fritiofson, 772 F.2d at 1240 (citing Kleppe, 427 U.S. at 404, 96 S.Ct. 2718). While a cumulative impact analysis requires the Corps to include reasonably foreseeable future actions in its review, improper segmentation is usually concerned with projects that have reached the proposal stage. See Envtl. Def. Fund v. Marsh, 651 F.2d 983, 999 (5th Cir.1981). We have stated that in rare cases a court [may] prohibit segmentation or require a comprehensive EIS for two projects, even when one is not yet proposed, if an agency has egregiously or arbitrarily violated the underlying purpose of NEPA. Envtl. Def. Fund, 651 F.3d at n.19. 43 In this case, the current § 404 permit allows only the filling and dredging required to construct Phase I of the planned development. Although the project as originally submitted was a three-phase undertaking, the application as eventually approved included only the first stage. The Corps cites this decrease in scale as one of the project requirements that reduce the project's effects below the level of significance. 44 The district court did not apply the independent utility test laid out above, but simply stated that considering Phase I by itself constituted improper piecemealing because nothing in the record suggested that Phases II and III were impracticable, financially unattractive, or generally not feasible and that the two phases were almost certainly going to be financially viable in light of the expanding urbanization in St. Tammany Parish. O'Reilly, 2004 WL 1794531 at . Plaintiffs, too, argue that the current project is wrongly piecemealed because Phases II and III are reasonably foreseeable. While this argument is relevant to whether the Corps rationally addressed and mitigated the cumulative impacts, it does not appropriately address the improper segmentation question. 45 In this respect, we agree with Mr. Bopp that Vieux Carre Prop. Owners, Residents, & Assocs., Inc. v. Pierce, 719 F.2d 1272, 1277 (5th Cir.1983), provides the relevant analogy. In that case, a multi-phase project was submitted, withdrawn, and resubmitted in a form that included one phase of the original project. Id. at 1276-78. The court held that the project had not been improperly segmented because the future phases remained in the speculative, planning stages. Id. at 1278 (citing Envtl. Def. Fund, 651 F.2d at 999 (we are here dealing with two projects that are historically distinct, one of which is proposed and the other still in the process of study and design. In that situation, NEPA does not yet require the [agency] to evaluate the environmental impact of the [second project].)). 46 In the case before us, the record indicates that the three phases have independent utility — Phase I can stand alone without requiring construction of the other two phases either in terms of the facilities required or of profitability. Neither plaintiffs nor the district court identify any evidence that construction of Phase I irretrievably commits federal funds to construction of Phases II and/or III or that the future phases have progressed to the proposal stage. 11 Nor do they identify any evidence suggesting that construction of Phase I will foreclose the Corps's ability to consider various alternatives to construction of either future phase. Indeed, Phases II and III would encompass a far larger quantity of wetlands (80% of their total acreage) than Phase I (which was 40-50% wetlands). The Corps's analysis of practicable alternatives to construction of future phases may, as a result, prove far different than its analysis for Phase I. 47 On this point, therefore, we reverse the district court's judgment. The record before us does not reflect that the Corps must have considered the possible future second and third phases as part of the present project in conducting its EA and preparing its FONSI, nor that in failing to do so the Corps has arbitrarily violated the underlying purpose of NEPA. Phases II and III are relevant to the EA insofar as they relate to the Corps's analysis of cumulative impacts. Conducting an EA for Phase I alone, however, does not offend the prohibition against piecemealing projects in order to avoid NEPA requirements. We cannot say that the Corps has acted arbitrarily in this respect. 48