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Natural Resources Defense Council v. Securites & Exchange Comm'n

Citation: 7 ELR 20434
No. No. 409-73, 432 F. Supp. 1190/10 ERC 1026/(D.D.C., 02/15/1977) Commission decision remanded

The court holds arbitrary and capricious the Securities and Exchange Commission's (SEC's) decision not to impose upon registrant corporations any additional environmental disclosure requirements and remands the case to the SEC for reconsideration. While the National Environmental Policy Act does not mandate the SEC to promulgate broad environmental disclosure regulations, the Act does require that the agency consider to the fullest extent possible alternatives which would reduce environmental damage and that it neither strike an arbitrary balance of costs and benefits nor give clearly insufficient weight to environmental values. The SEC's decision to reject various environmental disclosure alternatives violated these requirements in several ways. The agency's balancing of costs and benefits is not sustainable because there was no support for the agency's conclusions regarding costs and feasibility in the administrative record. Moreover, the SEC failed to make an effort to the fullest extent possible to develop guidelines for environmental disclosure and mistakenly relied on the belief that other agencies such as the Council on Environmental Quality and the Environmental Protection Agency have greater environmental expertise and should therefore take the initiative in requiring disclosure, if any is appropriate. The court thus grants plaintiffs' motion for summary judgment insofar as it seeks a declaratory judgment that the SEC's decision not to require additional environmental disclosure was arbitrary and capricious. The agency is ordered to complete within six months further rulemaking on the appropriateness of additional disclosure requirements.

Counsel for Plaintiffs
Roger S. Foster, Lois J. Schiffer
Center for Law and Social Policy
1751 N St., NW, Washington DC 20036
(202) 872-0670

Edward L. Strohbehn, J. G. Speth
Natural Resources Defense Council
917 15th St., NW, Washington DC 20005
(202) 737-5000

Collot Guerard
Media Access Project
1910 N St., NW, Washington DC 20036
(202) 785-2613

Counsel for Defendants
Harvey L. Pitt, Irving H. Picard, Daniel L. Goelzer
Securities and Exchange Commission
500 N. Capitol St., Washington DC 20549
(202) 523-5506

Counsel for Amicus Curiae American Civil Liberties Union
James van R. Springer
Dickstein, Shapiro & Morin
2101 L St., NW, Washington DC 20037
(202) 785-9700