Case: CROSS-SOUND FERRY SERVICES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Viking Starship, Inc., Intervenor
Abbreviation: Cross-Sound Ferry Services, Inc. v. Interstate Commerce Commission
Decision Date: 1991-05-10
Docket Number: No. 90-1053
Citation: 290 U.S. App. D.C. 39
Volume: 290
Reporter: United States Court of Appeals for the District of Columbia Circuit
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: District of Columbia
Parties: CROSS-SOUND FERRY SERVICES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Viking Starship, Inc., Intervenor.
Judges: Before MIKVA, Chief Judge, WILLIAMS and THOMAS, Circuit Judges.
Pages: 39–58

Head Matter:
934 F.2d 327
CROSS-SOUND FERRY SERVICES, INC., Petitioner, v. INTERSTATE COMMERCE COMMISSION and United States of America, Respondents, and Viking Starship, Inc., Intervenor.
No. 90-1053.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 28, 1990.
Decided May 10, 1991.
Eugene D. Gulland, for petitioner.
Craig M. Keats, Atty., I.C.C., with whom Robert S. Burk, Gen. Counsel, Henri F. Rush, Deputy Gen. Counsel and Evelyn G. Kitay, Atty., I.C.C., and James F. Rill, Asst. Atty. Gen., Catherine G. O’Sullivan and David Seidman, Attys., Dept, of Justice, were on the brief, for respondents.
Edward D. Greenberg and Mark T. Priesing were on the brief, for intervenor.
Before MIKVA, Chief Judge, WILLIAMS and THOMAS, Circuit Judges.

Opinion:
Opinion for the Court filed by Chief Judge MIKVA.
Opinion concurring in part and concurring in the denial of the petition for review filed by Circuit Judge CLARENCE THOMAS.
MIKVA, Chief Judge:
In this case, we revisit the propriety of the Interstate Commerce Commission's ("ICC" or the "Commission") finding that certain water carrier services provided by intervenor Viking Starship, Inc. ("Viking") are ferry services exempt from ICC regulation. In Cross-Sound Ferry Servs., Inc. v. ICC, 873 F.2d 395 (D.C.Cir.1989) [hereinafter Cross-Sound I], we remanded for further clarification of the Commission's views as to the scope of the ferry exemption. After reviewing the Commission's decision on remand, Viking Starship, Inc., Common Carrier Application, 6 I.C.C.2d 228 (1989) [hereinafter Viking II], and the contentions of petitioner Cross-Sound Ferry Services, Inc. ("Cross-Sound"), we conclude that the Commission has not changed its policy with respect to the ferry exemption. Accordingly, we uphold the Commission's finding that Viking is an exempt ferry service, and reject Cross-Sound's pro cedural challenges to the Commission's decisionmaking process. In addition, we find that the Commission's decision did not trigger environmental review responsibilities under the National Environmental Policy Act or the Coastal Zone Management Act.
I.
In 1988, the Commission granted Viking temporary authority to transport passengers over two routes in Long Island Sound: (1) Montauk, New York to Groton/New London, Connecticut, and 2) Montauk to Block Island, Rhode Island. See Cross-Sound I, 873 F.2d at 396 (describing statutory basis for temporary authorizations). Relying on a provision of the Interstate Commerce Act that declares transportation provided "by a ferry" to be exempt from the Commission's jurisdiction, see 49 U.S.C. § 10544(a)(4) (1988), Viking subsequently asked the Commission to dismiss its application for a permanent license on the ground that its operations are exempt ferry services. Cross-Sound, which transports passengers, automobiles, and freight between Orient Point, New York and New London, challenged Viking's claim, but, as detailed in Cross-Sound I, 873 F.2d at 396-400, the Commission agreed with Viking that its operations are exempt. See Viking Starship, Inc. — Common Carrier Application, 4 I.C.C.2d 634 (1988) [hereinafter Viking /].
Reviewing Viking I, we acknowledged the Commission's "great latitude in determining the scope of the ferry exemption," Cross-Sound I, 873 F.2d at 398, but found ourselves unable to discern the Commission's interpretation. Id. at 400. We noted several ICC decisions asserting jurisdiction over apparently similar Long Island Sound routes, and suggested that the discrepancy between those cases and the Viking decision were "prima facie evidence of a change in ICC policy." Id. at 399. In addition, we expressed uncertainty about the significance of various factors the Commission uses to determine whether the ferry exemption applies, such as the length and directness of a carrier's route and the frequency of service. Id. at 399-400. Given these perceived ambiguities, we remanded "for a fuller exegesis of the Commission's views." Id. at 396.
Although it acknowledged on remand that prior decisions may have misconstrued the significance of certain factors flagged by the court in Cross-Sound I, see Viking II, 6 I.C.C.2d at 237 (referring to role of absolute distance), the Commission denied changing its view of the ferry exemption, id. at 233 n. 8. It distinguished the Long Island Sound cases we cited in our panel opinion, id., and explained in greater detail the factors it uses to determine what constitutes a ferry, id. at 235-40. After discussing the general contours of the ferry exemption, the Commission specifically reaffirmed its earlier finding that Viking's services qualify as exempt ferriage under section 10544(a)(4). Id. at 241-46. In addition, the Commission rejected Cross-Sound's claim that a decision exempting Viking from the Commission's jurisdiction nonetheless obligated the ICC to comply with environmental review procedures under the National Environmental Policy Act and the Coastal Zone Management Act. Id. at 246-49.
II.
In order to determine whether the Commission has complied with our mandate in Cross-Sound I, we must evaluate the sufficiency of the Commission's explanations in Viking II as to the scope of the ferry exemption. If we find that the ICC's current view of the ferry exemption "diverge^] from agency precedent," then, in order to uphold the new interpretation, we must also find that the Commission "supplied] a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored." See Hall v. McLaughlin, 864 F.2d 868, 872 (D.C.Cir.1989) (quoting Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2233, 29 L.Ed.2d 701 (1971)); see also Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 57, 103 S.Ct. 2856, 2874, 77 L.Ed.2d 443 (1983). If, on the other hand, we deter mine that the Commission "has not in fact diverged from past decisions, [then] the need for a comprehensive and explicit statement of its current rationale is less pressing." Hall, 864 F.2d at 872. The agency's explanation in such a case "need not be elaborate"; we will uphold its findings, "though of less than ideal clarity, if the agency's path may reasonably be discerned." Id. at 872-73 (quoting Greater Boston Television, 444 F.2d at 851).
Petitioner contends that our opinion in Cross-Sound I conclusively determined that the agency had changed its policy with respect to the ferry exemption. We decline, however, to adopt so narrow a view of our earlier holding. We remanded the Commission's decision in Viking I precisely because we were unsure what its interpretation of the ferry exemption was, see Cross-Sound I, 873 F.2d at 400; it would be inappropriate to let our earlier expressions of puzzlement prevent a subsequent panel from evaluating the Commission's newly tendered explanations de novo. Reviewing the Viking II decision, we conclude that the Commission has not diverged from prior precedent.
First, we believe that the Commission persuasively distinguished those cases where it has exercised jurisdiction over water carriers operating in Long Island Sound. As the Commission explained in Viking II, 6 I.C.C.2d at 233 n. 8, three of the examples that we cited in Cross-Sound I as "prima facie evidence of a change in ICC policy," 873 F.2d at 398-99, involved the transportation not only of passengers but also of freight, a subject area over which the Commission has long exercised jurisdiction. See Mascony Transport and Ferry Servs., Inc., 353 I.C.C. 60, 61 (1976), petition for review denied sub nom Cross-Sound Ferry Servs., Inc. v. U.S., 573 F.2d 725 (2d Cir.1978) (applicant sought to transport "general commodities and passengers" between New London and Green-port, New York); Cross-Sound Ferry Servs., Inc. — Extension, ICC Docket No. W-1290 (Sept. 23, 1983) (applicant sought to transport "passengers, general commodities, automobiles with passengers, and tractors, trailers, and trucks" between New London and Montauk); and B.I. Marine Express, Inc., ICC Docket No. W-1450 (Oct. 14, 1986) (applicant proposed to transport "both passengers and general freight" between Westerly, Rhode Island and Block Island).
Indeed, the Commission has repeatedly held that "the word ferry does not generally include the transportation of goods and merchandise," McAllister Bros., Inc. — Investigation of Control, 336 I.C.C. 590, 592-93 (1970), and has refused to exempt freight carriers from regulation simply because the passenger aspect of their operation, viewed in isolation, might qualify as a "ferry." Id. at 593-94 (finding that carrier authorized to transport passengers and general commodities between Bridgeport, Connecticut and Port Jefferson, New York was not an exempt ferry, even though carrier had apparently never exercised its freight authority). See also B.I. Marine Express, ICC Docket No. W-1450 ("ferry service . entails the transportation of passengers, their automobiles, and accompanying baggage, but does not involve the transportation of general freight"); Ann Arbor R.R. Co. Common Carrier Application, 250 I.C.C. 490, 491 (1942). The Supreme Court has interpreted the term "ferry" as excluding freight services, see St. Clair County v. Interstate Sand and Car Transfer Co., 192 U.S. 454, 467, 24 S.Ct. 300, 304, 48 L.Ed. 518 (1904) (noting that "the ferry business is confined to the transportation of persons with or without their property"), as have various federal regulations. See, e.g., 46 CFR § 171.010(d)(2) (1990) (Coast Guard safety regulations); 49 CFR § 171.8 (1989) (hazardous materials transportation).
Although its efforts to distinguish the fourth example of Long Island Sound water carrier regulation that we cited in Cross-Sound I are less persuasive, the Commission's view that Shoreline Boating Serv., Inc., ICC Docket No. W-1294 (served May 29, 1984), involved excursion operations (i.e., round-trip service only) instead of point-to-point passenger service can be supported. See Viking II, 6 I.C. C.2d at 233 n. 8 (noting that excursion operations, like freight services, have "historically been regulated"). The administrative law judge reviewing Shoreline's original request for operating authority discussed the excursion character of the proposed services in some detail. See Shoreline Boating Serv., Inc., Common Carrier Application, ICC Docket No. W-1294 (August 19, 1976) (noting that carrier sold "round-trip transportation tickets alone"; describing public support for the excursion operations; and discussing excursion services offered by carriers contesting Shoreline's request for operating authority).
We also note that the Commission's decision in Viking II is consistent with at least one other decision finding water carrier services on Long Island Sound to be exempt ferriage. In North Rip Fish Harvest, Ltd,., ICC Docket No. W-1325 (May 13,1980), the Commission held that passenger service between Montauk and Block Island — one of Viking's proposed routes— was exempt from regulation under section 10544(a)(4). See also Michigan-Wisconsin Transp. Co., ICC Docket No. W-1377 (May 15, 1984) (carrier operating across Lake Michigan is exempt under section 10544(a)(4)).
Finally, we reject Cross-Sound's suggestion that the Commission's treatment of distance in Viking II rises to the level of a change in agency policy. See 6 I.C.C.2d at 237-40 (noting that earlier cases may have "overstated" the role of absolute distance). In Cross-Sound I, we criticized the Commission for failing to explain the significance it attached to the length of a carrier's route. See 873 F.2d at 399. Viking II suggests that the Commission, consistent with its decision in Michigan-Wisconsin Transp. Co., ICC Docket No. W-1377, views distance as a relevant but not dispositive factor in determining whether a particular service qualifies as a "ferry." That is, so long as the carrier possesses the usual attributes of a ferry — such as significant time or distance savings compared to overland routes — the absolute length of the route will not prevent the carrier from qualifying as a ferry. See Viking II, 6 I.C.C.2d at 240.
This approach is consistent with prior Commission decisions that seemed to establish per se limits on the distances a ferry could travel. As the Commission explained, those decisions also involved services not regularly associated with ferries. See Viking II, 6 I.C.C.2d at 239-40; Pere Marquette Ry. Co., 260 I.C.C. 206 (1944) (carrier transporting not only passengers but also railroad cars and newly manufactured automobiles across Lake Michigan); Ann Arbor R.R. Co. Common Carrier Application, 250 I.C.C. 490 (1942) (carrier transporting freight cars, in addition to passengers, across Lake Michigan); Canadian Pacific Ry. Co. v. U.S., 73 F.2d 831, 834-35 (9th Cir.1934) (discussing excursion character and luxurious nature of service across Puget Sound). Moreover, the distances at issue in this case — between 15 and 30 miles, depending on the particular route, see Cross-Sound I, 873 F.2d at 397 — are well within the 60-145 mile upper boundaries even those earlier cases established for ferry service.
Thus, we conclude that the Commission did not diverge from prior precedent or policy in evaluating Viking's services. Accordingly, there was no need for the Commission to justify a change in policy. Given the Commission's comprehensive discussion of the ferry exemption, which responded specifically to this court's concerns about apparently inconsistent precedents and the relative importance of the various criteria used to evaluate ferries, we have no difficulty discerning the agency's path and conclude that it satisfied the standards' for reasoned decisionmaking.
III.
Having concluded that the Commission did not impermissibly alter its view of the ferry exemption, we may set aside the Commission's decision applying the exemption to Viking only if it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (1988). See Railway Labor Execs. Ass'n v. ICC, 914 F.2d 276, 280 (D.C.Cir.1990).
Under section 10544(a)(4), ferries are exempt from regulation "[e]xcept to the extent the Interstate Commerce Commission finds it necessary to exercise jurisdiction to carry out" the national transportation policy. See 49 U.S.C. § 10101 (1988) (describing national transportation policy). Applying the principles it enunciated earlier in its decision, the Commission reasonably determined that Viking's MontaukBlock Island and Montauk-Groton/New London operations qualify as exempt ferries. See Viking II, 6 I.C.C.2d at 241-42 (noting the "frequent and regular" character of the service; its "modest," "no-frills" quality; the absence of any "freight service whatsoever" or "detours for sightseeing purposes or for intermediate stops"; and the services' ability to "substitute[ ], with a substantial reduction in overall mileage, for a road and bridge connecting nearby points in neighboring states").
We can find no error in the Commission's further determination that the national transportation policy does not require regulation of Viking's services in order to protect Cross-Sound against potential diversion or "cream-skimming" of its customer base. See 49 U.S.C. § 10101(a)(1)(C) (national transportation' policy includes encouraging "sound economic conditions among carriers"); Viking II, 6 I.C.C.2d at 242-46. The Commission found that the services of the two carriers differed; that even with respect to shared services—i.e., passengers without vehicles—the distance between Orient Point, New York and Montauk, New York (75 "congested" highway miles) limited actual competition; and that, in any case, there was "sufficient traffic in the area to accommodate Viking's small-scale operation without driving Cross-Sound out of business." Viking II, 6 I.C. C.2d at 243-44.
Cross-Sound contends that the Commission ignored evidence that Viking actually offers excursion and freight services inconsistent with the ferry exemption. As the Commission concedes, however, Cross-Sound may pursue these alleged violations through a properly framed request for enforcement. See Viking II, 6 I.C.C.2d at 230 n. 3; 49 CFR Part 1111 (1990) (procedures for filing complaints with the Commission).
Finally, we reject Cross-Sound's claims that the Commission erred in failing to hold further hearings regarding Viking's services, or in denying the company's discovery requests. Although we suggested in Cross-Sound I that the Commission might "find it useful on remand to use a hearing as a vehicle to re-examine and articulate its new view of the ferry exemption," 873 F.2d at 401, that advice was premised on our assumption that the Commission would be altering its traditional ferry policy. Given the agency's "broad discretion in deciding whether to grant a hearing," see, e.g., Cities of Carlisle and Neola, Iowa v. FERC, 741 F.2d 429, 431 (D.C.Cir.1984), and its view (which we uphold here) that the Viking decisions do not constitute a change in policy, the Commission reasonably concluded that hearings would not be "productive" and that "additional 'evidence' would not be particularly helpful in addressing the legal issues that predominate in this case." Viking II, 6 I.C.C.2d at 233.
As to Cross-Sound's discovery claims, we note this circuit's position that "the conduct and extent of discovery in agency proceedings is a matter ordinarily entrusted to the expert agency in the first instance and will not, barring the most extraordinary circumstances, warrant the Draconian sanction of overturning a reasoned agency decision." See Trailways Lines, Inc. v. ICC, 766 F.2d 1537, 1546 (D.C.Cir.1985). No such extraordinary circumstances exist to warrant overturning the Commission's denial of Cross-Sound's discovery requests.
IV.
Having approved on both substantive and procedural grounds the Commission's finding that Viking's services are exempt from regulation under section 10544(a)(4), we next address Cross-Sound's contention that the Commission violated the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq. (1988), and the Coastal Zone Management Act ("CZMA"), 16 U.S.C. § 1451-1464 (1988), by failing to conduct any environmental review of Viking's services.
As an initial matter, the Commission contends that Cross-Sound lacks standing to challenge its actions under either NEPA or CZMA. Standing constitutes a threshold jurisdictional inquiry. But this court has held that "when the merits of a case are clearly against the party seeking to invoke the court's jurisdiction, the jurisdictional question is especially difficult and far-reaching, and the inadequacies in the record or briefing make the case a poor vehicle for deciding the jurisdictional question, we may rule on the merits without reaching" the jurisdictional contention. Adams v. Vance, 570 F.2d 950, 954 n. 7 (D.C.Cir.1978); accord Chinese Am. Civic Council v. Attorney General, 566 F.2d 321, 325 (D.C.Cir.1977). See Secretary of the Navy v. Avrech, 418 U.S. 676, 678, 94 S.Ct. 3039, 3040, 41 L.Ed.2d 1033 (1974) (per curiam) (assuming that district court had jurisdiction and resolving case on the merits, noting that "even the most diligent and zealous advocate could find his ardor somewhat dampened in arguing a jurisdictional issue where the decision on the merits is thus foreordained"); Norton v. Mathews, 427 U.S. 524, 530-532, 96 S.Ct. 2771, 2774-2776, 49 L.Ed.2d 672 (1976) (finding it "unnecessary" to resolve "difficult and perhaps close jurisdictional arguments" where a prior Supreme Court decision dictated resolution of the merits against the party asserting jurisdiction). See also United States v. Augenblick, 393 U.S. 348, 351-52, 89 S.Ct. 528, 531-32, 21 L.Ed.2d 537 (1969); Southeastern Community College v. Davis, 442 U.S. 397, 404 n. 5, 99 S.Ct. 2361, 2366 n. 5, 60 L.Ed.2d 980 (1979). We believe that this is a rare case in which we should exercise our discretion to proceed directly to the merits.
First, as discussed more fully below, the merits of Cross-Sound's environmental contentions can be resolved easily, particularly in light of our earlier finding that the Commission has not altered its policy with respect to the ferry exemption. Second, the question of Cross-Sound's standing is quite complex, involving inquiries into difficult issues such as the prudential standing of competitors, see, e.g., Hazardous Waste Treatment Council v. EPA, 861 F.2d 277, 282-85 (D.C.Cir.1988), cert. denied, 490 U.S. 1106, 109 S.Ct. 3157, 104 L.Ed.2d 1020 (1989); landowner injury, see, e.g., Goos v. ICC, 911 F.2d 1283, 1289-91 (8th Cir.1990); and the Commission's statutory authority to consider environmental factors under the national transportation policy of 49 U.S.C. § 10101 in détermining whether to override the ferry exemption. As to the last question, which goes to the redressability of Cross-Sound's asserted injuries, we have serious doubts concerning the narrow construction of section 10101 urged by our concurring colleague. See Concurring Opinion at 49-50. Although this court must defer to an agency's reasonable interpretation of a statute that Congress has entrusted it to administer, see Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984), the Commis,sion has not definitively construed section 10101 as precluding consideration of environmental factors, notwithstanding the cursory footnote on which our colleague relies. See Viking II, 6 I.C.C.2d at 249 n. 33; Concurring Opinion at 49. Whether Congress intended the agency's inquiry under section 10101 to encompass environmental considerations is an intricate question we need not answer on the undeveloped record before us. We note only that the term "efficient," which is used in section 10101(a)(l)(B)'s directive that the Commission promote "efficient transportation," has classically been thought to incorporate the full range of possible externalities, including environmental costs and benefits.
Finally, the administrative record and the briefs in this case provide insufficient factual documentation to verify or disprove Cross-Sound's environmental standing claims. See Avrech, 418 U.S. at 677-78, 94 S.Ct. at 3039-40 (expressing unwillingness to decide jurisdictional question without further argument, even after ordering supplemental briefing). Our concurring colleague's view that Cross-Sound's asserted injuries could not be redressed by the Com mission, as to which we have serious qualms, allows him to avoid confronting knotty factual questions concerning Cross-Sound's injuries, see Concurring Opinion at 48, questions that would ultimately require a remand to the Commission for further findings. Under these circumstances, we deem it appropriate to review the merits of Cross-Sound's environmental claims directly, to which we now turn.
A. NEPA
Section 102(2)(C) of NEPA requires federal agencies to prepare an environmental impact statement ("EIS") for every "major Federal action[] significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). In Viking II, the Commission found that a "decision simply holding that an operation is a ferry and declining to take the affirmative step necessary to assert jurisdiction is not the type of action that triggers" NEPA review. 6 I.C.C.2d at 248. Cross-Sound disputes this interpretation, arguing that the Commission's change in policy with respect to section 10544(a)(4) constitutes a major federal action under NEPA.
Our conclusion that the Commission did not change its policy with respect to the ferry exemption might well dispose of Cross-Sound's claim. Indeed, petitioner's counsel effectively conceded at oral argument that success on the policy change question was a prerequisite to success on the NEPA claim. In any case, the only "action" the Commission even conceivably took was in finding that Viking's services are statutorily exempt. We believe that Defenders of Wildlife v. Andrus, 627 F.2d 1238 (D.C.Cir.1980), in which this court held that the Secretary of the Interior's failure to prevent the state of Alaska from carrying out a wolf kill program on federal lands did not constitute a major federal action, is controlling. There, we held that an agency must undertake some "overt act" to trigger NEPA's requirements; the agency's mere refusal to exercise its statutory authority to act would not suffice. Id. at 1245-46.
Unlike an ordinary licensing decision, in which the Commission affirmatively determines that a water carrier's proposed services are required by the "public convenience and necessity" under 49 U.S.C. § 10922, the Commission here simply applied the statutory ferry exemption of section 10544(a)(4) and declined to assert jurisdiction to advance the national transportation policy of section 10101, thereby placing the case squarely within the "inaction" rubric of Defenders of Wildlife. See Viking II, 6 I.C.C.2d at 247 (noting that section 10544(a)(4) "itself exempts ferry services from our jurisdiction, and all that the agency did was to take a look at whether Viking was conducting exempt services"). Common sense supports our conclusion that the Commission's decision does not constitute a major federal action; as we said in Defenders of Wildlife, "[n]o agency could meet its NEPA obligations if it had to prepare an environmental impact statement every time the agency had power to act but did not do so." 627 F.2d at 1246.
B. CZMA
The Coastal Zone Management Act seeks to protect the land and water resources of the nation's coastal zone through a cooperative governmental effort in which states are given primary responsibility for developing coastal resource management programs. See, e.g., 16 U.S.C. § 1451(i) (congressional findings); 16 U.S.C. § 1452(2) (congressional declaration of policy). Section 307(c)(1) of CZMA requires federal agencies "conducting or supporting activities directly affecting the coastal zone" to comply with the affected states' management programs "to the maximum extent practicable." 16 U.S.C. § 1456(c)(1). An implementing regulation requires federal agencies to provide the affected states with so called "consistency determinations" for proposed activities at least ninety days prior to final federal approval. See 15 CFR § 930.34(a), (b) (1990). Cross-Sound contends that the Commission violated these provisions by failing to notify the relevant states prior to deeming Viking exempt from its jurisdiction under section 10544(a)(4). We reject this claim.
CZMA and the implementing regulations on which Cross-Sound relies expressly exclude federal licensing or permitting activities from the definition of a "federal activity," see 15 CFR § 930.31(c); instead, a separate procedural scheme places primary compliance responsibilities for such matters on the applicant and the affected states, not the federal agency. See 16 U.S.C. § 1456(c)(3)(A) ("any applicant for a required Federal license or permit to conduct an activity affecting land or water uses in the coastal zone" of a state must certify to the federal agency that its activity will comply with state programs, and must furnish a copy of the certification to the affected states, which may file objections with the federal agency); 15 CFR Part 930, Subpart D, especially 15 CFR § 930.54; Viking II, 6 I.C.C.2d at 248 n. 30. Here, the Commission's dismissal of Viking's application for common carrier authority on jurisdictional grounds meant that no licensing proceeding existed sufficient to trigger these regulations. See Viking I, 4 I.C.C.2d at 640 n. 9; Exemption of Water Carrier Operations, 4 I.C.C.2d 656 (available on WESTLAW, FTRAN-ICC database), 1988 ICC Lexis 189 (June 14, 1988) [hereinafter Water Carriers] (noting that "licensing" requires an "applicant" for a license); 15 CFR § 930.52 (defining "applicant" as "any individual [or corporation who] files an application for a Federal license or permit to conduct an activity affecting the coastal zone"). Thus, neither the Commission nor Viking breached any notice obligation under CZMA.
We find unpersuasive Cross-Sound's analogies to an earlier decision in which the Commission concluded that its exemption of entire classes of water carriers constituted a "federal activity" requiring a CZMA consistency determination. See Water Carriers (available on WESTLAW at screen 9), 1988 ICC Lexis 189, at 11. Unlike Viking II, in which one carrier's services were held exempt, Water Carriers involved a broad, traditional rulemaking proceeding in which four classes of carriers were exempted. See id. (available on WESTLAW at screens 2-8), Lexis cite at 2-10 (describing exempted classes, and recognizing that Commission's action had "potential for directly affecting coastal zones by allowing some additional water carrier operations"). Indeed, the rulemaking fit squarely within the definition of "federal activity," and could not qualify under the less stringent licensing or permitting scheme discussed above. See id. (available on WESTLAW at screens 9-10), Lexis cite at 11-12 (discussing why decision constitutes a federal activity); 15 CFR § 930.31(a) (defining federal activity); 15 CFR § 930.52 (requiring "applicant" for federal license). Thus, we find Cross-Sound's reliance on Water Carriers inapposite.
V.
We conclude that the Commission has not changed its policy with respect to the ferry exemption, and find that its comprehensive discussion of the exemption in Viking II satisfies this court's mandate in Cross-Sound I, as well as the more general standards for reasoned decisionmaking. We further conclude that the Commission appropriately found Viking's operations to be exempt under section 10544(a)(4), and we reject Cross-Sound's allegations of procedural error. Finally, we conclude that the Commission's finding that it lacked jurisdiction over Viking's services did not trigger environmental review responsibilities under either NEPA or CZMA. For the foregoing reasons, Cross-Sound's petition for review is denied.
It is so ordered.