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Sierra Club v. Sigler

ELR Citation: 13 ELR 20210
Nos. No. 82-2101, 695 F.2d 957/18 ERC 1649/(5th Cir., 01/20/1983) Rev'd in part

The Fifth Circuit, reversing in part the district court's decision, 12 ELR 20381, rules that the Corps of Engineers' environmental impact statement (EIS) for a deepwater port in Galveston, Texas, is inadequate and reverses the Corps' decision to grant construction permits. The court applies the Administrative Procedure Act's arbitrary and capricious standard of review to the issuance of the permits and actions under the National Environmental Policy Act (NEPA) and applies the rule of reason to the EIS. It also determines that because the Corps chose to proceed under the Council on Environmental Quality's (CEQ's) NEPA regulations rather than CEQ's advisory guidelines actually in effect at the time the draft EIS was completed, the court would review the Corps' actions for compliance with the regulations.

The court rejects the district court's conclusion that the EIS need not contain a "worst-case" analysis of the environmental impacts of total cargo loss by a supertanker. Although NEPA itself does not explicitly require a worst-case analysis, it is required by a CEQ regulation, which the court finds to be consistent with the language and legislative history of NEPA and NEPA case law. In addition, the "catastrophic" worst-case analysis proposed by appellants in this case is precisely what was intended by the CEQ regulations, which are binding on the court. A worst-case analysis is mandated in this case by the provision in the CEQ regulations covering important unknown information beyond the state of the art, a provision the district court erroneously failed to apply. Such an analysis is required even though the occurrence of the worst-case scenario is a remote possibility, because there is a real chance that it could occur and the Corps has information on which to base the scenario that is not unreasonably speculative.

The court next rules that the EIS is deficient under NEPA because it fails to discuss adequately the environmental effects of increased bulk commodity activity associated with deepening the channel. By including benefits from the bulk commodity activity resulting from the deepwater port, but not the costs, the Corps skewed the cost-benefit analysis contained in the EIS. Relevant precedent dictates that although the bulk commodity activities are not part of the Corps proposal, it may not ignore their environmental costs once it chooses to use their benefits as part of the justification of the project.

The court reverses the Corps' decision to issue the permits and remands for reconsideration once the EIS has been reworked to include the environmental impacts of the bulk commodity activities. It rules that the district court applied the wrong legal standard in addressing that question. The issue here is not whether an economic justification tangential to environmental concerns grossly distorted the environmental analysis, but whether by ignoring certain environmental impacts, the Corps violated its own permit regulations. However, the court chooses not to remand the question to the district court for application of the correct standard, finding that the relevant facts will bear only one interpretation and that a remand will draw out the process unnecessarily. The court then rules that the Corps violated its regulations. The regulations require it to carefully weigh all relevant aspects of a wide range of matters and to issue a permit if this broad balancing indicates that issuance is in the public interest. The skewed EIS precluded the required consideration of all relevant factors by eliminating environmental impacts relevant to several of the major issues evaluated by the Corps. The court concludes by ruling that the Corps adequately considered a range of off-shore alternatives to the proposed deepwater port.

[The pleadings in this case are summarized at ELR PEND. LIT. 65694 and 65735 — Ed.]

Counsel for Appellants
Frederick S. Middleton III
Sierra Club Legal Defense Fund, Inc.
1424 K St. NW, Suite 600, Washington DC 20005
(202) 347-1770

James T.B. Tripp
Environmental Defense Fund, Inc.
444 Park Ave. S., New York NY 10016
(212) 686-4191

Counsel for Respondents
David C. Shilton
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-4519

Charles T. Newton Jr.
Vinson & Elkins
3000 First City Twr., Houston TX 77002
(713) 651-2222

Before CLARK, Chief Judge, GEE and GARZA, Circuit Judges.