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Mobil Oil Corp. v. Federal Trade Comm'n

ELR Citation: 7 ELR 20306
Nos. No. 75 Civ. 2748, 430 F. Supp. 855/9 ERC 1849/(S.D.N.Y., 03/01/1977)

The Federal Trade Commission (FTC) must prepare a National Environmental Policy Act (NEPA) impact statement in connection with an enforcement proceeding seeking divestiture of certain pipelines and refining capacity by nine oil companies. The companies have standing to maintain this action under NEPA because they allege divestiture would cause them environmental injury in fact by resulting in unnecessary depletion of the nation's natural resources and increased pollution from refining operations. This environmental injury distinguishes this case from Gifford-Hill & Co. v. FTC, 6 ELR 20019 (D.C. Cir. 1975), in which plaintiff was found to lack standing under NEPA because the alleged harm was only to its pecuniary interest. The FTC's refusal to file an impact statement is judicially reviewable because plaintiffs have exhausted all avenues of administrative review, and the initiation of enforcement proceedings, which may have environmentally significant results if the relief sought is ultimately granted, represents final agency action for the purposes of judicial review under NEPA. Moving to the merits, the court invalidates as being inconsistent with NEPA's requirements the FTC Rules of Practice §1.82(d) which exempts adjudicatory proceedings brought by the Commission from the Act's impact statement provisions. This case does not fall within either of the two categories in which the courts have found exceptions from §102(2)(C) of NEPA. This is neither an emergency action or other circumstance in which time is of the essence nor is it an action taken by the Environmental Protection Agency where the decisionmaking process is "the functional equivalent of a NEPA impact statement." The court notes that its conclusion in this regard runs counter to the opinion expressed in an Advisory Memorandum issued by the Council on Environmental Quality (CEQ), but, after a detailed examination, the court rejects CEQ's rationale as unpersuasive. The court holds that the divestiture action in this case is a "major federal action significantly affecting the quality of the human environment" and that the FTC must therefore immediately begin preparing a draft environmental impact statement.

Counsel for Plaintiffs
Andres J. Kilcarr, Thomas R. Trowbridge III
Donovan, Leisure, Newton & Irvine
30 Rockefeller Plaza, New York NY 10020
(212) 489-4100

J. Wallace Adair, Keith E. Pugh Jr.
Howrey, Simon, Baker & Murchison
Suite 900, 1730 Pennsylvania Ave., NW,
Washington DC 20006
(202) 872-8800

Turner H. McBaine, Wallace L. Kaapcke, Richard W. Odgers
Pillsbury, Madison & Sutro
225 Bush St., San Francisco CA 94104
(415) 983-1000

Counsel for Defendants
Robert B. Fiske Jr., U.S. Attorney; Nathaniel L. Gerber, Ass't U.S. Attorney
One St. Andrews Plaza, New York NY 10007
(212) 791-1963