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North Carolina v. Hudson

Citation: 17 ELR 21260
No. No. 84-36-CIV-5, 665 F. Supp. 428/(E.D.N.C., 07/07/1987) Corps' permit remanded for further NEPA review

The court holds that the Army Corps of Engineers' issuance of construction permits for a project to pipe water from Lake Gaston in North Carolina to Virginia Beach, Virginia, violated the National Environmental Policy Act (NEPA), since the Corps inadequately considered the environmental effects on striped bass in Lake Gaston and failed to make a public interest review of Virginia Beach's water needs. Virginia Beach has an inadequate water supply for its population size, and in recent years has rationed water to residents during dry periods. Virginia Beach applied for, and the Corps granted, a permit to draw and pipe water from Lake Gaston under § 10 of the Rivers and Harbors Act, and a contract to store water for Virginia Beach in Kerr Lake near Lake Gaston.

Applying an "arbitrary and capricious" standard to review of the Corps' NEPA finding of no significant impact on the environment, the court first holds that the Corps' use of water flow data to determine the effect on water quality was proper. However, the Corps failed adequately to consider the effects of less water on striped bass spawning each spring: the Corps releases extra water from Corps-managed lakes for this purpose when it has water available, but the Corps seems to have assumed it always has water available. Moreover, the Corps seems to have relied on information from Virginia Beach regarding effects on striped bass, without independently verifying it in the face of a specific challenge from North Carolina. Consequently, the Corps' finding of no significant impact on the environment was arbitrary and capricious as it related to the striped bass. The court also holds that a worst case analysis was not required based on possible combined impacts of other unrelated projects that are currently under consideration, since these are "unforeseeable" rather than "relevant" and "missing." The Corps adequately considered the weight to attach to the public controversy surrounding this project, and the degree it sets a precedent for future action.

The court next holds that the Corps violated its regulations requiring a public interest review before granting a permit. The regulations require analysis of unresolved conflicts as to resource use. NEPA § 102(2)(E) contains a similar requirement, independent of whether an environmental impact statement is required. The court holds that the Corps did not investigate Virginia Beach's purpose of obtaining an autonomous source of water, because it did not investigate other sources available to Virginia Beach within its own water basin. The Corps adequately considered property rights of downstream water users, since a municipal diversion of water for public water supply is not a riparian use, and if the diversion causes injury to downstream users an action should be properly brought in a civil action for damages or injunctive relief. Issuance of the permit does not alter property rights.

Counsel for Plaintiff
Lacy H. Thornburg, Attorney General; Daniel C. Oakley, Special Deputy Attorney General
Department of Justice
Justice Bldg., Box 629, Raleigh NC 27602
(919) 733-3377

Counsel for Defendants
Rudolf A. Renfer Jr., Ass't U.S. Attorney
P.O. Box 26897, Raleigh NC 27611
(919) 755-4530