Landmark decision on the National Environmental Policy Act: Calvert Cliffs Coordinating Committee, Inc. v. Atomic Energy Comm'n

The opinion of the Court of Appeals for the District of Columbia Circuit, Calvert Cliffs Coordinating Committee, Inc. v. Atomic Energy Comm'n, 1 ELR 20346 (D.C. Cir. July 23, 1971), puts the AEC — and implicitly all other federal agencies — on notice that NEPA will in fact require major changes in the spirit and the detail of administrative decision-making so that environmental values are fully protected. In a sweeping rejection of the adequacy of the AEC's compliance with NEPA's requirements, the court held that the AEC had no choice but strict adherence to each procedural step mandated by the Act. Of equal significance to environmental attorneys, the court provided the context for its decision by spelling out the underlying policy of NEPA in the first thorough judicial interpretation of NEPA by a court of appeals since Zabel v. Tabb, 1 ELR 20023. The court found that the Act required agencies (1) to give full consideration to environmental values, using all practicable means and measures to protect them, (2) to employ a "finely tuned and 'systematic' balancing analysis" in resolving conflict between environmental, social, economic, aesthetic and other values, (3) to implement to the fullest possible extent the requirements of § 102(2)(c) that call for the preparation of a detailed, one-sided analysis of the environmental impact of proposed federal legislation or activity, and (4) to set out all possible alternative approaches to a particular project which will alter its environmental impact and its cost-benefit balance. [1 ELR 10126] Finally, in an interesting statutory construction of the Act, the court found that the "Muskie-Jackson Compromise" had not been enacted in § 104.

The court's ruling on the AEC's procedural compliance with NEPA

The Calvert Cliffs decision disposes of two cases which challenged the rules under which the AEC proposed to implement NEPA. 1 ELR Dig. [38] See especially Digest Supplement Five, 1 ELR 67551. The first case, filed November 25, 1970, challenged the AEC's approval of a permit for construction of two nuclear power plants by the Baltimore Gas and Electric Company at the company's Calvert Cliffs plant on the Chesapeake Bay. The permit was granted prior to the passage of NEPA, but construction of the facility had not been completed. Petitioners asked the court to require the AEC to issue a show cause order to Baltimore Gas and Electric to determine why construction of the Calvert Cliffs facilites should not be suspended pending a complete review of the requirements which the new statute imposed. Four days after AEC adopted its rules implementing NEPA on December 3, 1970, 1 ELR 46012, petitioners in the initial action, together with national organizations including the Sierra Club, the National Wildlife Federation and the National Resources Defense Council filed an appeal seeking review of those regulations. The appeal sought review of those sections of the newly adopted rules by virtue of which the AEC (1) declined to conduct an independent evaluation and balancing of the nonradiological environmental impact of nuclear power plant siting and operation which state or other federal agencies had already approved; (2) prohibited consideration of nonradiological environmental issues at any hearing to be held prior to March 4, 1971; (3) refused to consider plan alterations, backfitting or construction halts for nuclear facilities which were granted construction permits prior to the effective date of consideration until the hearings on the operating license; (4) failed to require hearing board review of nonradiological factors unless affirmatively raised by outside parties or the AEC staff. The two cases were consolidated for argument, and in its decision the court treated the issue raised in the suit challenging construction under the Baltimore Gas and Electric construction permit as essentially the same as the third issue above.

The petitioners had argued that the AEC had slighted its affirmative duty under § 102(2)(C) of the act by not requiring hearing board (Atomic Safety and Licensing Board) evaluation of the environmental impact of all construction permit and operating license decisions (when a board is empaneled). Although the regulations did require the agency staff's "detailed statement and comments thereon" to be part of the file before the hearing board, it only required hearing board evaluation of the information where environmental issues were raised by the staff or by any party to the proceeding. 10 C.F.R. § 50, app. D., 1 ELR 46018. The Court of Appeals found the agency's approach a "crabbed interpretation of NEPA" which made a "mockery of the Act." 1 ELR 20350.

The court reasoned that since § 102(2)(C) required the detailed statement to accompany proposals through agency review processes, Congress must have intended that the environmental factors compiled in that statement be considered through the agency review process. Moreover, the statutory mandate of compliance with § 102(2)(C) procedural requirements to the fullest extent possible convinced the court that the agency (not just one component, such as staff) must consider environmental issues "… at every stage where an overall balancing of environmental and nonenvironmental factors is appropriate and where alterations might be made in the proposed action to minimize environmental costs." 1 ELR 20350.

As promulgated on December 4, 1970, the AEC's regulations for the implementation of NEPA provided that nonradiological environmental issues could not be raised in any construction permit or operation license proceeding which had been formally initiated by publication of notice before March 4, 1971, 14 months after NEPA had gone into effect. In responding to petitioner's criticism that this delay in implementation of the statute was unconscionable, the AEC asserted that the time lag was necessary "… to provide an orderly period of transition in the conduct of the Commission's regulatory proceedings and to avoid unreasonable delays in the construction of nuclear power plants urgently needed to meet the national requirements for electric power." Brief for respondents in No. 24,871 at 49, 1 ELR Dig. [38]. Its authority for this delay was NEPA's failure to set forth a specific timetable for its own implementation. The court held that the AEC's reason for delay was unacceptable. The agency is already organized to review the nonradiological environmental impacts ofits licensing decisions because these evaluations are similar to the health and safety assessments which the agency has been making since its inception. Thus, the organizational format already existed. Even assuming normal administrative difficulties associated with a transitional period, however, the court found ample support in the legislative history of NEPA for the position that the AEC should have accelerated its pace in conforming its processes to the mandates of the Act: "… the obvious sense of urgency on the part of Congress should make clear that a transition, however 'orderly', must proceed at a pace faster than a funeral procession." 1 ELR 20352.

Another manifestation of the AEC's desire for the [1 ELR 10127] orderly implementation of NEPA is its treatment of nuclear plants which were under construction at the time NEPA took effect. The agency took the position that once a construction permit had been issued plan modifications designed to protect the environment could not be implemented until the operating license stage of project review. The regulations did not require a reappraisal of existing projects consistent with NEPA requirements but forbade any use of the information thereby accumulated until after the plant had been constructed. Similarly the AEC totally rejected the possibility of temporary construction halts so that intensive evaluation of an existing project's environmental impact could be completed, and improvements in plant design made. The agency's approach would have postponed all incorporation of design changes until that point in AEC review of a proposed nuclear plant when the cost-benefit analysis would have militated against changes for purely environmental reasons. The court concludes that this approach violates NEPA's provision that environmental factors be considered "to the fullest extent possible." The AEC must not only collect data on the environmental impact of facilities which are built with its permission but it must be prepared to order substantive changes on the basis of that information where such action is necessary to protect environmental values.

Novel Statutory Interpretation of Section 104: The Muskie-Jackson Compromise

For many months prior to the decision in Calvert Cliffs, the AEC had taken the position that it should not review environmental standards set by other governmental agencies and applied to facilities that the AEC also had to license or approve. Rather, the AEC would passively accept both the sister or state agency's standard and its certification that the standard had been met. This broad policy rested first on § 1171 of the Federal Water Pollution Control Act (FWPCA), which requires state water pollution control agencies to certify compliance of facilities with state standards, subject to approval by the federal Environmental Protection Agency. The AEC regulation at issue in Calvert Cliffs, embodying the agency's policy regarding certification by other "environmental agencies" states:

With respect to those aspects of environmental quality for which environmental quality standards have been established by authorized Federal, State, and regional agencies, proof that the applicant is equipped to observe and agrees to observe such standards and requirements will be considered a satisfactory showing that there will not be a significant, adverse effect on the environment. Certification by the appropriate agency that there is reasonable assurancethat the applicant for the permit or license will observe such standards and requirements will be considered dispositive for this purpose. 10 C.F.R. § 50, App. D, 1 ELR 46012, 46017-18.

This interpretation of the interrelationship between NEPA and the growing body of law which seeks to regulate environmental degradation through the setting of detailed standards would soon reduce the case-by-case decision-making process envisioned by NEPA to the mere collection of certificates of approval from "environmental" agencies. The value of the case-by-case approach under NEPA is well summarized by the court of appeals in Calvert Cliffs:

In each individual case, the particular economic and technical benefits of planned action must be assessed and then weighed against the environmental costs: alternatives must be considered which would affect the balance of values. … The magnitude of possible benefits and possible costs may lie anywhere on a broad spectrum. Much will depend on the particular magnitudes involved in particular cases. … The point of the individualized balancing analysis is to ensure that, with possible alterations, the optimally beneficial action is finally taken. 1 ELR 20353.

The petitioners argued that the policy of administrative deference adopted by the AEC was not required by NEPA and was inconsistent with the procedural duties imposed by § 102(2)(C) of the act. The agency's response was that its overall position was specifically mandated by NEPA and its position on water quality by the Federal Water Pollution Control Act. Section 104 3f NEPA says:

Nothing in Section 102 or 103 shall in any way affect the specific statutory obligations of any Federal agency (1) to comply with criteria or standards of environmental quality, (2) to coordinate or consult with any other Federal or State agency, or (3) to act, or refrain from acting contingent upon the recommendations or certification of any other Federal or State agency. 42 U.S.C. § 4334.

The AEC argued that § 104 required it to defer to the water quality standards established under the FWPCA as well as to the standards set by other agencies. The heart of the AEC's position was that NEPA as finally enacted was premised on a marked distinction between "environmental impact" and "environmental control" agencies and that the actions of the former were to be controlled by the latter through the systematic interagency communications called for in § 102 of NEPA. Extensive quotations from the legislative history of NEPA and the Water Quality Improvement Act of 1970 (WQIA)¹ were cited to support this analysis. The agency was thus arguing for a theory of environmental policy formulation which it claimed had been adopted by NEPA and verified shortly after the passage of NEPA by the enactment of WQIA.

[1 ELR 10128]

The National Environmental Policy Act of 1969 west into effect on January 1, 1970. On April 3, 1970 the Water Quality Improvement Act of 1970 became operative law.² The two measures had been under consideration by the Congress at the same time during the previous fall and had been debated together on the floor of the Senate on October 8, 1969. This floor debate saw the culmination of a "compromise" which previously had been worked out by Senator Edmund Muskie, sponsor of the water quality bill (which had originated in the Air and Water Pollution Subcommittee of the Senate Public Works Committee) and Senator Henry Jackson, sponsor of NEPA (which had originated in the Senate Interior and Insular Affairs Committee).The controversy that led to the "compromise" centered around the apparent conflict between the regulatory agency-quality standards approach to environmental protection, typified by FWPCA, and NEPA which emphasized the role of the agency which might make potentially harmful decisions and imposed upon that agency — the "environmental impact" agency — the responsibility for environmental protection within its particular sphere. The portion of the debate which most directly supports the AEC's position is a statement by Senator Jackson on a proposed amendment to the NEPA bill (enacted as section 104 of NEPA) which had been developed in the course of the compromise discussions with Senator Muskie. Senator Jackson said:

Mr. President, I fully agree with the purposes of section 16(c) of S.7 [now Section 21(b) of FWPCA]. It is my understanding that there was never any conflict between this section and the provisions of S.1075 [NEPA]. If both bills were enacted in their present form, there would be a requirement for State certification, as well as a requirement that the licensing agency make environmental findings.

The compromise worked out between the bills provides that the licensing agency will not have to make a detailed statement on water quality if the State or other appropriate agency has made a certification pursuant to section 16(c) [now 21(b)].

* * *

A new proposed section 103 in S.1075 [now Section 104] in NEPA would be added to make explicitly clear that section 102 does not in any way affect the specific statutory obligations of Federal agencies to comply with environmental standards, to coordinate their activities, or to condition their actions upon any State or Federal certifications now required by law or which may be required by law. The language of this section is designed to insure that the provisions of section 16, and particularly section 16(c) of S.7 are consistent with the requirements of section 102 of S.1075. Section 16(c) of S.7 would have the effect of exempting the Corps of Engineers, the Atomic Energy Commission, and some other agencies from the requirement in S.1075 for a detailed statement on the environmental impact of proposed actions involving any discharge into the navigable waters of the United States. Under the terms of section 16(c) of S.7 as now drafted, the State or other appropriate organization would be charged with certifying that any discharge is in substantial compliance with appropriate water quality standards. This certification would be a condition precedent to obtaining any Federal license or permit required by law before making any discharges into the navigable waters of the United States. (115 Cong. Rec., daily ed., S.12111 and S.12114, October 8, 1969).

Similarly on March 24, 1970, in his Senate floor discussion of the Conference Report on the bill ultimately enacted as the WQIA. Senator Muskie stated:

Mr. President, a question has been raised regarding the relationship between section 21(b) of the conference agreement and the provisions of sections 102 and 103 of the National Environmental Policy Act, Public Law 91-190, particularly with regard to the duties of Federal licensing and permitting agencies under the respective authorizations.

It should be clear that nothing in subsection 21(b) should be interpreted as discharging Federal licensing or permitting agencies from complying with the provisions of Public Law 91-190 as far as they relate to any environmental impact not associated with water quality standards. (116 Cong. Rec., daily ed., S.4401, March 24, 1970).

The court of appeals in Calvert Cliffs accepted the argument of the challengers and rebutted the AEC's argument in two steps: (1) the court concluded that to the extent that Section 104 of NEPA requires deference to the standards set by the "environmental control agencies", this is only true where that deference is demanded by "specific statutory obligations." The only specific statutory obligation proffered by the AEC was that contained in the WQIA. Therefore the AEC could not rely on section 104 of NEPA to support its "wholesale abdication to the standards and certifications of any and all federal, state and local agencies dealing with matters other than water quality." 1 ELR 20354. (2) Regarding water quality standards set pursuant to FWPCA and made applicable to AEC licensing by the specific language of that law (as amended by WQIA), the court held that "[o]bedience to water quality certifications under WQIA is not mutually exclusive with the NEPA [1 ELR 10129] procedures. It does not preclude performance of the NEPA duties. Water Quality certifications essentially establish a minimum condition for the granting of a license. But they need not end the matter." 1 ELR 20354. (emphasis is the court's.)

The court's conclusion regarding the interrelationship between NEPA and WQIA was premised on its reading of the plain meaning of the two statutes. Specifically, the court read section 104 of NEPA, not as demanding that other specific statutory obligations replace NEPA, but rather as ensuring that "three sorts of 'obligations' will not be undermined by NEPA: (1) the obligation to 'comply' with certain standards, (2) the obligation to 'coordinate' or 'consult' with certain agencies, and (3) the obligation to 'act' or refrain from acting contingent upon a certification from certain agencies. WQIA imposes the third sort of obligation." 1 ELR 20354. Since section 104 made granting of a license contingent upon water quality certification, but did not forbid the imposition of stricter water quality controls by the AEC upon its licensees, the court found that the substantive and procedural duties imposed by NEPA sections 102 and 103 must still be borne in each case by the AEC. The court could find no indication in the language of section 21 of WQIA, 33 U.S.C. 1171 (a), (b), that suggested that water quality standards established under FWPCA were exclusive.

Essentially, the court's interpretation of the interrelationship between NEPA and the WQIA was dependent upon its application of two hoary rules of statutory interpretation and, implicitly, upon its adoption of an important policy position with broad implications for the future formulation of environmental policy.

The object of all judicial interpretation and construction of statutes is to determine and enforce the intention of the legislature. Of course the most important aid in this process is the words employed in the statute itself. When the meaning of these words is plain, the statute needs no interpretation. The court in Calvert Cliffs, slighting some portions of the statute's legislative history, relies upon this simple rule of interpretation. The court uses a second rule of statutory interpretation to shore up the conclusion reached through its application of the first. In searching out the intention of the legislature, a court may, of course, rely upon the bill's legislative history. This history properly includes the reports of legislative committees which sheparded the measure through the legislative process, messages of the executive relevant to the subject treated in the legislation, and proposed modifications of the legislation and the response of the legislature thereto. Statements made by individual legislators during debate on the statute are sometimes accepted by courts where the individual has been involved in the legislation's development or is closely tied to the policy matters with which the legislation is concerned.

In Calvert Cliffs the court found the legislative report which accompanied NEPA inapposite. The statements made during the floor debate by Senators Jackson and Muskie, the chairmen of the relevant committee and subcommittee respectively, are quite clear on the issue of whether compliance with the water quality standards of FWPCA by a federal agency licensee excuse that agency from further NEPA obligation. They say it does. The court finds this legislative history "meager". Then in a somewhat tautological fashion the court concludes that the statements of Muskie and Jackson "cannot radically transform the purport of the plain words of section 104," i.e., we need not look to legislative history but if we do, it demonstrates that we need not have bothered.

At first reading the court's argument appears rather strained in light of the language of section 104. That section provides that sections 102 and 103 will in no way affect the specific statutory obligations of any federal agency "(3) to act, or refrain from acting contingent upon the recommendations or certification of any other federal agency," i.e., that specific statutory obligations to license only those plants which are certified will not be affected by NEPA procedural duties. If certification, as a trigger for action, will not be affected by sections 102 and 103 of NEPA, then it is a plausible interpretation that such certification is the only prerequisite Congress authorized the AEC to demand from its licensees in order to protect water quality from nonradiological pollution.

The court of appeal's position, that NEPA duties were supplemental to and not inconsistent with FWPCA certification, discussed above, is a reasonable interpretation of the words of section 104. But, the interpretation urged by the AEC is also a reasonable evaluation of the meaning of the language of that section. Therefore, the section, standing alone, is ambiguous and its "plain meaning" does not suffice as the source for determining the intent of Congress.

However it does not automatically follow that the court was forced to use such extrinsic aids to statutory construction as legislative history in order to resolve the ambiguity in section 104. It is a fundamental principle in the construction of statutes that the whole and every part of the statute must be considered in the determination of the meaning of any of its parts. The reason for construing a statute as a whole is to clear up obscurities and ambiguities in the law and to make the law harmonious and effective. It follows that the prime tool available to the court in Calvert Cliffs was as thorough an analysis as possible of the entire framework of NEPA. The goal of the statute, the substantive duties imposed on federal agencies to achieve that goal, and the rigid procedures set forth to insure the performance of these substantive duties, when collectively viewed, should provide the guidance necessary to explain the exact meaning of section 104.

[1 ELR 10130]

A closer reading of the Calvert Cliffs opinion reveals that this is essentially what the court has done. Having made this in-depth appraisal, the court concludes that to read section 104 of NEPA as the AEC argued it should be read was, in light of the growing body of statutes similar to FWPCA, to ignore the essence of the statute. The Court was convinced that the unique addition of NEPA to environmental protection legislation is that it requires detailed case-by-case evaluation of the environmental costs of federal agency action and that this technique could not survive the cardboard interpretation of section 104 proffered by the AEC. The court says as much: "In cases such as this one, the most we should to to interpret clear statutory wording is to see that the overriding purpose behind the wording supports its plain meaning. We have done that here. And we conclude that Section 104 of NEPA does not permit the sort of total abdication of responsibility practiced by the Atomic Energy Commission." 1 ELR 20355. (The emphasis is the court's.)

1. The Water Quality Improvement Act of 1970 was an amendment to the existing federal water pollution statute. The resulting statute, the Federal Water Pollution Control Act, is codified at 33 U.S.C. § 1151 et seq. and is reprinted at 1 ELR 41101. The relevant portion of the Water Quality Improvement Act of 1970 is 33 U.S.C. § 1171.

2. Section 21(b) of that statute, codified as 33 U.S.C. 1171(b), prohibits federal licensing agencies, including the AEC, from issuing licenses for facilities discharging effluents into the navigable waters of the United States without having received a certificate from the appropriate State or interstate water pollution control agency or from the Secretary of the Interior (whose function is now exercised by the administrator of the Environmental Protection Agency) that there is reasonable assurance the activity will be conducted in a manner which will not violate applicable water quality standards. Under the FWPCA (which WQIA amended) the states have the option of preparing water quality standards for their interstate streams, rivers and lakes or having the federal government do it for them. All states have elected to draft their own standards, which under FWPCA require federal approval. Section 21(b) certifications would be based on such federally approved standards for interstate navigable waters. In some cases the standards would be federal in origin as well. Certifications under section 21(b) for intrastate navigable waters would be based on state adopted standards which are not federally approved.