The Limits of Federal Environmental Responsibility and Control Under the National Environmental Policy Act

William B. Ellis and Turner T. Smith Jr.

Editors' Summary: Although NEPA has been with us for nearly two decades, the precise extent of the statute's application remains cloudy. The courts continue to struggle with the scope of "Federal action," particularly where proposed federal conduct with little direct environmental effect will make possible nonfederal activities of great environmental consequence. Mr. Ellis and Mr. Smith examine the case law on this issue, identifying two different analytical trends reflected in the various decisions. One of these trends is to analyze the nonfederal conduct as an "indirect effect" of the "Federal action," while the other approach regards the nonfederal conduct as part of the "Federal action" itself. The authors assert that the latter approach is flawed because it fails to strike the proper balance between federal environmental control and unfettered nonfederal decisionmaking, and they carefully examine three recent decisions that can be interpreted as disfavoring that approach.

Mr. Ellis is presently a principal, officer, and director of the Richmond, Virginia, firm of McSweeney, Burtch & Crump. He received his undergraduate degree from Haverford College and his law degree from the University of Pennsylvania. Mr. Smith, a graduate of Princeton University and Harvard Law School, has taught environmental law and is presently a partner with the firm of Hunton & Williams of Richmond. The authors briefed and argued the NEPA issues in Natural Resources Defense Council, Inc. v. United States Environmental Protection Agency, 822 F.2d 104, 17 ELR 21043 (D.C. Cir. 1987) and in the CEQ referral of the Corps of Engineers regulations, discussed in this Article.

[18 ELR 10055]

The National Environmental Policy Act of 1969 (NEPA)¹ was the first of the modern environmental statutes. Following it has come a steady stream of legislation governing the environmental effects of private commercial and industrial activity, and the conduct of federal, state, and local governments.² These subsequent laws have provided for establishment by federal agencies of a wide variety of standards, limitations, guidelines, and other substantive restrictions — often in intricate detail.³ But NEPA remains unique in federal environmental law, standing apart in two important respects. First, NEPA was aimed solely at activities of the federal government. Second, NEPA established procedures for consideration of environmental values rather than enacting particular substantive requirements.

These aspects of NEPA are not recent news. The Act's restriction to "Federal action" has been apparent since Congress adopted the Act. And though NEPA's possible substantive effect was debated by the courts for several years, the Supreme Court decided a decade ago that NEPA's requirements were "essentially procedural."⁴ Despite this, confusion has persisted on both points among federal administrative agencies, environmental organizations, and environmental affairs managers of the regulated community.

[18 ELR 10056]

This Article discusses three recent opinions, one by the United States Court of Appeals for the District of Columbia Circuit, another by the Eighth Circuit, and the last by the Council on Environmental Quality (CEQ), that primarily have addressed the first of these issues. In Natural Resources Defense Council, Inc. v. United States Environmental Protection Agency,⁵ the D.C. Circuit invalidated the Environmental Protection Agency's (EPA's) "construction ban," a rule generally preventing construction of facilities that will require a federal pollutant discharge permit under the Clean Water Act until the NEPA review process has been completed and the permit has been issued. In Ringsred v. Duluth,⁶ the Eighth Circuit rejected a contention that the "factual veto power" held by the Secretary of the Interior over a municipality's construction of a parking ramp was sufficient to make the construction a "Federal action." Finally, on June 8, 1987, the CEQ found that the U.S. Army Corps of Engineers may properly amend its regulations to restrict the scope of its NEPA analyses to avoid review of nonfederal activities.⁷

These decisions will have far-reaching implications for federal regulators, environmentalists, and permit applicants alike. This Article will examine NEPA's distinction between federal and nonfederal action, and prior cases that have given meaning to that distinction. It will then examine each of the three recent decisions and some of their implications concerning federal control over private, state, and local actions under NEPA.

NEPA's Limitation to "Federal Action"

NEPA seeks to improve governmental decisionmaking by requiring federal agencies to consider the environmental consequences of their actions.⁸ It makes changes in the decisionmaking procedures of the agencies to which it applies — but it applies only to federal agencies. NEPA § 402(2)(C) provides:

All agencies of the Federal Government shall —

… (C) Include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on —

(i) The environmental impact of the proposed action….⁹

As this language makes clear, NEPA does not require or authorize direct federal review of the environmental consequences of private decisions or actions, or those of state or local governments.

Congress' overall purpose is clear. It wished to promote environmental values by assuring that federal agencies consider them when exercising the agencies' existing authority under their organic statutes. While Congress did not expressly state its reasons for limiting NEPA's procedures to federal decisionmaking, those reasons can be inferred from two circumstances. First, NEPA was soon followed by a series of environmental laws establishing comprehensive regulatory programs.¹⁰ In contrast to NEPA, these laws were targeted primarily, although not exclusively, at private industrial and commercial activities and did not impose any NEPA-like procedural requirements on the private decisionmaking process. Instead, those laws have attempted to lay out specific substantive requirements with sufficient clarity, certainty, and stability that nonfederal decisionmakers may use them in managing their affairs more or less independently of the federal government. Second, NEPA's procedures require "holistic" consideration of effects and alternatives. While these procedures are workable for the decisions of a central government, they are inapposite to decentralized decisionmaking structures such as a private, market-based economy.¹¹

The fundamental congressional choice in environmental control, as in other areas of economic regulation, is for private ordering subject to specific substantive regulatory constraints, rather than direct governmental review and control of the private decisionmaking process. The D.C. Circuit Court recently stated:

Through the public-private distinction created in NEPA, Congress chose not to impose NEPA oversight of private decisionmaking, instead electing to regulate private actions solely through other statutes (such as the Clean Water Act).¹²

Distinguishing federal from nonfederal action in particular cases is not always easy.¹³ There are many ways the federal government may become involved in an otherwise nonfederal action: (1) federal employees or contractors may participate directly; (2) a federal entity may provide full or partial funding; (3) a statute may provide a federal agency with some degree of discretion and control; or (4) a federal license, permit, or approval may be required for one or more aspects.

The CEQ has adopted regulations clarifying some situations. Under these regulations, it is clear that the following are "Federal actions": (1) an action undertaken directly by a federal agency; (2) a project specifically funded by [18 ELR 10057] the federal government; and (3) an activity that may not legally occur without a license, permit, or other approval of the United States.¹⁴ Where the federal activity deals only with a portion of an otherwise nonfederal undertaking, however, the CEQ's rules cease to be useful. For example, when EPA considers a pollutant discharge permit application from a planned new source that cannot operate without the permit, there is clearly "Federal action" in issuing the permit. But is the "proposal" for NEPA purposes the pollutant discharge only, or construction of the entire plant? The CEQ's rules do not resolve this.¹⁵

Yet the answer has important consequences for application of NEPA, and other statutes as well.¹⁶ Under NEPA, the precise identification of the "Federal action" will govern: (1) the range of environmental effects that will be considered in the preliminary "environmental assessment" (EA) to determine if an environmental impact statement (EIS) is necessary;¹⁷ (2) the range of environmental effects that must be addressed in the EIS itself;¹⁸ (3) what alternatives must be considered in the EIS;¹⁹ (4) what activities may be restrained pending completion of the NEPA process;²⁰ and (5) what conditions may properly be imposed.²¹

Prior Case Law Defining the Extent of "Federal Action"

Soon after NEPA was enacted, the courts were asked to determine what actions were "Federal." They had little difficulty finding that "Federal action" was broader than acts physically performed by agents of the federal government. The cases finding "Federal action" performed by others typically involved situations where federal funding was provided for the specific activity at issue,²² or a federal license or permit was needed.²³ Conversely, the cases finding no "Federal action" by third parties despite some related federal involvement typically dealt with situations where there was no federal funding,²⁴ and no license or approval was required.²⁵

An agency's jurisdiction necessarily limits the extent of "Federal action" for purposes of NEPA, since a federal agency's jurisdiction under its authorizing, "organic" legislation prescribes the limits of its ability to act, fund, license, or approve.²⁶ Thus, when an agency provides funding for a particular purpose, it is the specific activity funded that is the "Federal action" (regardless of who performs it).²⁷ And when a federal agency considers licensing, permitting, or approving an activity of a third party, the "Federal action" is the particular activity for which the license, permit, or approval is a legal precondition.²⁸

[18 ELR 10058]

Despite these general jurisdictional limitations, there is some question whether "Federal action" may in certain circumstances extend beyond what the government specifically funds or permits. The cases that have presented the most difficulty in defining "Federal action" have involved situations where it is known in advance that the proposed federal action will have relatively little direct environmental effect, but will make physically possible other private conduct that is more or less certain to occur and to have major environmental effects.²⁹ NEPA's chief goal — promoting better-informed federal decisionmaking — would seem to favor full disclosure of such significant environmental effects. But whether, how, and for what purposes these effects are conceptually brought within the NEPA process is very important to preserving the fundamental congressional limitation of NEPA to federal action.

Without always clearly acknowledging it, the courts considering such circumstances have been struggling with two competing theories. The first relies on principles of causation as developed in the NEPA case law. Under a causation-based theory, when there is admittedly a specific "Federal action" that can fairly be said to cause related nonfederal conduct, then the reasonably foreseeable environmental effects of that nonfederal conduct may in some circumstances be considered "secondary or indirect effects" of the "Federal action" in NEPA's EA and EIS processes.³⁰ This results in identifying the environmental effects proximately caused by the federal action and potential alternatives to the federal action that might avoid those effects. By preserving the clearcut "organic jurisdiction" test for defining "Federal action," it also properly avoids making the nonfederal conduct itself the subject of a NEPA alternatives analysis,³¹ and precludes government interference with the nonfederal activity pending completion of the EIS.³²

Other courts have used a second rationale to bring the environmental effects of private action within NEPA's reach. After noting that "Federal action" includes conduct by third parties that is specifically funded or licensed by the federal government, a few cases have gone on to state or imply by analogy that such nonfederal conduct that is made physically, factually possible by such federal action may itself be considered part of the "Federal action." Under this theory, when the federal government is taking "Federal action" and through it has the "factual" or "practical" ability to control nonfederal conduct, the nonfederal conduct is "federalized" and deemed part of the "Federal action." Like the causation-based theory, this rationale results in identification of the environmental effects of the nonfederal conduct for inclusion in an EA or EIS — but it goes further. By deeming the nonfederal conduct to be "Federal" by analogy, this theory invites the government to intrude on private decisionmaking by purporting to analyze the private party's alternatives, and to restrain (pending completion of the NEPA process) private conduct over which the government has no legal authority.

Prime examples of this second rationale are Sierra Club v. Hodel,³³ and Port of Astoria v. Hodel.³⁴ Both cases considered whether the Bonneville Power Administration, a federal agency, was obliged by NEPA to examine the environmental effects of proposed metals manufacturing facilities to which it had contracted to construct electrical transmission lines and supply electricity. The more recent Port of Astoria case said:

BPA shares responsibility for the environmental effects because its contractual obligation to supply Alumax with power enables Alumax to build the plant and requires BPA to erect transmission lines.³⁵

The opinion then referred to "construction of the Umatilla plant" as a part of "the major federal action…."³⁶

The court in the earlier Sierra Club case used the same language to express its result:

By entering into a contract to supply the power to the project and to construct the transmission line to the plant, the agency has so federalized the entire project that it has become "major Federal action" requiring a federally responsible environmental impact statement.³⁷

Having found construction of the private plant to be "Federal action," the court in Sierra Club remanded the case to the district court with instructions "to direct a stay of any further construction" of the plant.³⁸ The only independent authority relied on in these decisions was National Forest Preservation Group v. Butz,³⁹ which did not actually claim that the private conduct at issue was made "Federal action" and did not restrain or enjoin it.⁴⁰

[18 ELR 10059]

Until recently, the most extensive discussion of these issues was in NAACP v. Medical Center, Inc.⁴¹ In that case, the Wilmington Medical Center had proposed "Plan Omega," an $88 million program including construction of a hospital that would have a significant effect on the environment. Before undertaking the project, the Medical Center sought federal approval of the capital expenditures involved under § 1122 of the Social Security Act,⁴² so the Medical Center could include the expenditures in its federal Medicare and Medicaid reimbursement "rate base." Since the Medical Center received more than a third of its revenues from Medicare, Medicaid, and other such federal reimbursements, it admitted "it would not pursue Plan Omega until it … received a section 1122 approval,"⁴³ and "the parties … stipulated that without this assistance [it] could not feasibly operate its facilities."⁴⁴ Nevertheless, the Third Circuit did not view Plan Omega as "Federal action" requiring an EIS. The court recognized a difference between agency actions that are merely factually necessary prerequisites to nonfederal conduct and those that amount to legal, jurisdictional control. The opinion discussed cases involving federal enablement of private action:

[T]he agency's action under the statute must be a legal precondition which authorizes the other party to proceed with action which will affect the environment. The Council on Environmental Quality regulations make even clearer that the federal enablement must be required before the private party may act. Such "action" involves "a federal lease, permit, license, certificate or other entitlement for use," but does not extend to Government action which amounts to less than a legal precondition. The cases confirm this understanding of "enablement"….

We believe that analysis of these cases reveals that in order to determine if an agency's role constitutes major action under NEPA, a court must focus its inquiry on whether the action of the federal agency demonstrates a federal "responsibility" for the action…. When the agency "enables" another to impact on the environment, the court must ascertain whether the agency action is a legal requirement for the other party to affect the environment….

The Recent Cases

Natural Resources Defense Council, Inc. v. United States Environmental Protection Agency

Against this background, the D.C. Circuit last summer decided NRDC v. EPA.⁴⁶ At issue was whether EPA is authorized by either the Clean Water Act or NEPA to prohibit the construction of new facilities that require federal pollutant discharge permits until such permits are obtained. The Agency had adopted rules imposing such a "construction ban,"⁴⁷ which was "to preserve the status quo for as long as necessary to complete NEPA review."⁴⁸ The rules were challenged by industry groups contending that: (1) the Clean Water Act did not authorize EPA to ban construction activities prior to permit issuance, and (2) construction therefore was not "Federal action" that could be restrained under NEPA. The Agency and NRDC defended the rules by claiming (1) that plant construction is caused by issuance of pollutant discharge permits, and (2) that plant construction should be deemed part of the "Federal action" of issuing a pollutant discharge permit.⁴⁹

EPA had not consistently interpreted the Clean Water Act or NEPA to authorize the construction ban,⁵⁰ and the D.C. Circuit accordingly afforded the rule "considerably less deference" than would have been given a consistent administrative construction.⁵¹ The court found "EPA's construction ban … directly contrary to Congress' clear intent, as elucidated by the expressly limited statutory definition of 'major Federal action'" in the Clean Water Act:

Congress defined "major Federal action," for purposes of the Clean Water Act, to be the issuance of a discharge permit…. [P]rivate construction is not a Federal action…. Therefore, unless the construction itself is pursuant to federal financial assistance, NEPA review may only be conducted with regard to the issuance of a discharge permit, which constitutes, of course, the major Federal action.⁵² [18 ELR 10060] According to the D.C. Circuit, the Agency's organic jurisdiction under the Clean Water Act defined the limits of "Federal action" for purposes of NEPA:

NEPA, as a procedural device, does not work a broadening of the agency's substantive powers…. Whatever action the agency chooses to take must, of course, be within its province in the first instance…. As we read the Clean Water Act, EPA's jurisdiction is limited to regulating the discharge of pollutants…. NEPA review of new-source permitting, as required by section 511(c), is therefore limited to environmental review of the permit issuance and its alternatives.⁵³

The court went on to consider EPA's argument that "Federal action" may extend beyond the agency's organic jurisdiction in some factual situations. EPA claimed that its total role was sufficient to "federalize" new source construction, relying on three points. First, EPA noted that it licensed pollutant discharges from new industrial facilities. Second, it claimed "a rational decisionmaker would not likely build a facility prior to acquiring" a permit necessary to plant operation.⁵⁴ Third, EPA stressed its responsibilities under § 306 of the Clean Water Act, which authorizes EPA to consider a broader range of pollutant control techniques for new sources than is applicable to existing sources when establishing performance standards for new sources.⁵⁵

Although the D.C. Circuit acknowledged the "practical reality" and "practical force" of EPA's argument, that did not "carry the day in law for the agency."⁵⁶ The court returned to statutory limitations on EPA's jurisdiction to resolve this issue. Because a pollutant discharge permit "is most certainly not a legal condition precedent" to plant construction and because CWA § 306 does not "authorize a sweeping prohibition on building activity," the court concluded that "the NPDES process does not constitute sufficient federal involvement to 'federalize' the private act of construction."⁵⁷ The court therefore invalidated the construction ban regulations, noting that "Congress chose not to impose NEPA oversight of private decisionmaking…."⁵⁸

Ringsred v. Duluth

On September 14, 1987, the Eighth Circuit decided the most recent case to address these issues. In Ringsred,⁵⁹ an Indian tribe and the City of Duluth agreed to form a joint commission to operate a bingo parlor in a former Sears building. The tribe purchased the building and transferred it to the United States to hold in trust as an addition to its reservation. The City of Duluth purchased adjacent land on which it intended to construct a municipal parking ramp to serve the bingo parlor as well as other users. The Secretary of the Interior was then asked to and did approve the leasing of the building to the bingo commission.⁶⁰ Before accepting the building in trust, the Secretary performed an EA that addressed development of the bingo parlor, but not the environmental effects of or alternatives to the parking ramp. Ringsred sued, contending the environmental effects of the parking ramp should have been considered in the EA because either (1) the ramp itself was part of the "Federal action," or (2) it was a "secondary effect" of the "Federal action."

The Eighth Circuit rejected both rationales. The court first determined that construction of the ramp was not itself "Federal action" largely because "[n]o federal action is a legal condition precedent to the construction of the parking ramp."⁶¹ Nevertheless, the court suggested "Federal action" might be expanded in some cases beyond a "legal control" test depending upon "'(1) the degree of discretion exercised by the agency over the federal portion of the project; (2) whether the federal government has given any direct financial aid to the project; and (3) whether "the overall federal involvement with the project [is] sufficient to turn essentially private action into federal action."'"⁶² As to the second argument, the court held the effects of the parking ramp were not "secondary or indirect" effects of the Secretary's action requiring consideration in the EA.⁶³

The CEQ Referral

While EPA was defending its construction ban regulations in NRDC v. EPA, the U.S. Army Corps of Engineers was attempting to remove from its NEPA rules related guidance that asserts broad authority over nonfederal activity.⁶⁴ The guidance asserts authority not only to consider the environmental effects of entire projects whenever a Corps permit⁶⁵ is required for some portion, but also would result in consideration of alternatives to the larger private project by the Corps:

For example, where a utility company is applying for a permit to construct an outfall pipe from a proposed power plant, the EA must assess the direct and indirect environmental effects and alternatives of the entire plant.⁶⁶

Taken literally, the Corps' guidance would have required [18 ELR 10061] the federal government to consider alternatives to entire nonfederal industrial and commercial projects simply because a Corps permit is required for some part of such a project.⁶⁷ At about the time this guidance was issued however, the Winnebago Tribe and Save the Bay cases held the Corps could properly restrict the scope of its NEPA environmental assessments to the effects of the specifically permitted activities.⁶⁸

On January 11, 1984, the Corps proposed to amend its guidance to reflect the decisions of these circuit courts:

For example, if a non-Federal oil refinery, electric generating plant, or industrial facility is proposed to be built on an upland site and the only Corps permit requirement relates to an outfall pipe or a connecting pipeline, that pipe or pipeline permit, in and of itself, normally would not constitute sufficient overall Federal involvement with the project to justify expanding the scope of a Corps EA to cover the entire upland facility, even if the facility could not operate without the Corps permit.⁶⁹

EPA objected and referred the matter to the CEQ under Clean Air Act § 309.⁷⁰ After negotiations, the Corps modified its proposal to require NEPA assessment of other "portions of the entire project over which the district commander has sufficient control and responsibility to warrant Federal review," as well as the particular activity being licensed.⁷¹ The factors to be considered in determining if "sufficient control and responsibility" exists were:

i) whether or not the regulated activity is "merely a link" in a corridor type project (e.g., a transportation or utility transmission project);

ii) whether there are alternatives available to the applicant that would not require a Corp permit;

iii) whether there are aspects of the upland facility in the immediate vicinity of the regulated activity which affect the location and configuration of the regulated activity; and

iv) the extent to which the entire project will be within Corps jurisdiction.⁷²

On June 8, 1987, the CEQ sided with the Corps, not EPA. The CEQ found that "Army's proposal to amend this regulation is generally within reasonable, implementing agency discretion," and that "policy and management considerations" favored the proposed amendments. The CEQ did recommend certain changes to the Corps' factors for determining the scope of a NEPA EA or EIS, the most important of which was the addition of a fifth factor:

The district commander is further considered to have control and responsibility for portions of the project beyond the limits of Army Corps jurisdiction where the cumulative federal involvement of the Army Corps and other federal agencies is sufficient to grant legal control over such additional portions of the project. These are cases where the environmental consequences of the additional portions of the projects are essentially products of federal financing, assistance, direction, regulation, or approval….⁷³

The CEQ has thus accepted "legal control" as the appropriate basic test for defining the extent of the "Federal action." However, both the CEQ and the Corps have employed language that is ambiguous as to whether the concept of "Federal action" may be expanded beyond this "bright line" jurisdictional test when the Corps has "sufficient control and responsibility" or the "cumulative federal involvement … is sufficient to grant legal control …" over the private action. It remains to be seen what future courts will do with this ambiguity in light of the cases discussed above.

Conclusion

The three recent decisions, though not always using consistent terminology or reasoning, have helped to clarify that "Federal action" is based upon the jurisdictional reach of the relevant federal agency. The D.C. Circuit refused to deem plant construction "Federal action" because no federal license, approval, or funding was involved. The Eighth Circuit made the same determination with respect to the parking ramp at issue there. The CEQ approved the Corps' effort to remove private aspects of a project from the "Federal action" in most cases when a Corps permit is needed for only a portion of the project. The CEQ actually suggested revising the Corps' guidance further to make "legal control" over an action the guiding principle.

Unfortunately, the three decisions to varying degrees continue to leave open a possibility that the scope of "Federal action" may sometimes exceed an agency's jurisdiction. On balance, however, all three decisions essentially reaffirm NEPA's goal of preserving areas of traditionally private, or state and local government, decisionmaking. For example, the D.C. Circuit acknowledged that "the public-private distinction" in NEPA was intended by Congress to prevent "oversight of private decisionmaking."⁷⁴ There is still good reason to believe, as Congress did, that environmental protection can be accomplished without jeopardizing this worthwhile goal.

1. 42 U.S.C. §§ 4321-4347, ELR STAT. NEPA 001-006.

2. Among these are the Clean Air Amendments of 1970 (Pub. L. No. 91-604, 84 Stat. 1676, 42 U.S.C. §§ 1857-1858a), the Federal Water Pollution Control Act Amendments of 1972 (Pub. L. No. 92-500, 86 Stat. 8161, 33 U.S.C. §§ 1251-1376), the Resource Conservation and Recovery Act of 1976 (Pub. L. No. 94-580, 90 Stat. 2795, 42 U.S.C. §§ 6901-6986, ELR STAT. RCRA 001-046), the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (Pub. L. No. 96-510, 94 Stat. 2767, 42 U.S.C. §§ 9601-9657, ELR STAT. 44001-44071) (Superfund), and numerous amendments to these laws.

3. The Federal Water Pollution Control Act alone, 33 U.S.C. §§ 1251-1376, as amended by the Clean Water Act of 1977, Pub. L. No. 95-217, 91 Stat. 1566, and the Water Quality Act of 1987, Pub. L. No. 100-4, 101 Stat. 7, provides for no fewer than eight kinds of restrictions on direct discharges, with different criteria for the establishment of each. These include effluent limitations based upon "best practicable technology" under § 301(b)(1)(A), "best conventional technology" under § 301(b)(2)(E), "best available technology" under § 301(b)(2)(A), "secondary treatment" under § 301(b)(1)(B), water quality under §§ 301(b)(1)(C) and 302, new source performance standards under § 306, and "best professional judgment" under § 402(a)(1). The other environmental laws cited in note 2 have similarly complex requirements.

4. Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 554-555, 8 ELR 20288 (1978). Later, in Strycker's Bay Neighborhood Council v. Karlen, 444 U.S. 223, 227, 10 ELR 20079 (1980), the Supreme Court held that NEPA does not require elevating environmental concerns over other relevant factors, and that a court reviewing agency compliance with NEPA need only ensure "that the agency has considered the environmental consequences" of its actions.

5. 822 F.2d 104, 17 ELR 21043 (D.C. Cir. 1987) (NRDC v. EPA).

6. 828 F.2d 1305, 18 ELR 20115 (8th Cir. 1987).

7. CEQ, FINDINGS AND RECOMMENDATIONS ON REFERRAL FROM U.S. ENVIRONMENTAL PROTECTION AGENCY CONCERNING PROPOSED AMENDMENTS TO U.S. ARMY CORPS OF ENGINEERS PROCEDURES FOR IMPLEMENTING THE NATIONAL ENVIRONMENTAL POLICY ACT (June 8, 1987).

8. NEPA § 102(2)(C), 42 U.S.C. § 4332(2)(C), ELR STAT. NEPA 003; Atlanta Coalition on the Transportation Crisis, Inc. v. Atlanta Regional Commission, 599 F.2d 1333, 1344, 9 ELR 20590, 20594 (5th Cir. 1979).

9. 42 U.S.C. § 4322(2)(C)(i), ELR STAT. NEPA 003.

10. See note 2, supra.

11. In a free economy, millions of individual purchasing decisions by independent consumers control what manufacturers produce. It would obviously change our economy greatly if Congress were to prohibit General Motors from constructing a new automobile assembly plant until it had (1) demonstrated the need for additional automobiles, (2) analyzed the "no action" scenario, and (3) considered alternatives such as public transportation, all subject to judicial review. Congress has not taken so drastic a step, apparently believing that environmental protection can be achieved without such direct interference with the decentralized decisionmaking essential to operation of a market economy. For similar reasons, Congress has not to date been persuaded to enact national land-use or generic industrial plant siting legislation.

12. NRDC v. EPA, 822 F.2d at 131, 17 ELR at 21057.

13. The Ninth Circuit in Friends of the Earth v. Coleman, 518 F.2d 323, 328-29, 5 ELR 20428, 20430 (9th Cir. 1975), has stated:

Determination of whether federal and state projects are sufficiently interrelated to constitute a single "federal action" for NEPA purposes will generally require a careful analysis of all facts and circumstances surrounding the relationship. At some point, the nexus will become so close, and the projects so intertwined, that they will require joint NEPA evaluation.

See also Friends of Yosemite v. Frizzell, 420 F. Supp. 390, 7 ELR 20087 (N.D. Cal. 1976).

14. 40 C.F.R. § 1508.18 (defining "major Federal action").

15. The D.C. Circuit recently found CEQ's rules ambiguous on this point. See NRDC v. EPA, 822 F.2d at 129 n.25, 17 ELR at 21056-21057.

16. Other laws are similar to NEPA or refer to its processes, and may also be affected. For example, a permit is required under § 404 of the Clean Water Act for the discharge of fill material to navigable waters. EPA guidelines restrict permit issuance to the least environmentally harmful, practicable alternative. 40 C.F.R. § 230.10(a). The guidelines also provide that "the analysis of alternatives required for NEPA … will in most cases provide the information for the evaluation of alternatives under these Guidelines." 40 C.F.R. § 230.10(a)(4).

17. Under the CEQ's rules, an agency first performs an EA to determine if the effects of a proposed federal activity are likely to be "major" or "significant," and thus require preparation of a full EIS. 40 C.F.R. § 1501.4.

Compare Save The Bay, Inc. v. United States Corps of Engineers, 610 F.2d 322, 10 ELR 20185 (5th Cir. 1980), cert. denied, 449 U.S. 900, ("Federal action" defined as a discharge of fill material to navigable waters under § 404 of the Clean Water Act) with Colorado River Indian Tribes v. Marsh, 605 F. Supp. 1425 (C.D. Cal. 1985) ("Federal action" was, in effect, assumed to be an entire riverside development for which a § 404 permit was required).

18. In making an EIS, agencies must consider all of the reasonably foreseeable effects of "the [Federal] action." 40 C.F.R. § 1508.8. But what is encompassed by this standard can vary substantially depending on how the "Federal action" is defined.

19. C.f., City of Angoon v. Hodel, 803 F.2d 1016, 17 ELR 20180 (9th Cir. 1986) (in considering application for permit to construct log transfer facility in navigable waters, Corps may restrict its analysis of alternatives to other means of transporting harvested timber — the "purpose" of the "proposal" — and need not consider an alternative unrelated to that purpose, whether the private applicant might instead harvest timber at a different location).

20. See Gage v. Commonwealth Edison Co., 356 F. Supp. 80 (N.D. Ill. 1972), aff'd sub nom., Gage v. Atomic Energy Commission, 479 F.2d 1214 (D.C. Cir. 1973) (private utility could not be enjoined, until an EIS was prepared, from purchasing land on which it planned later to construct a nuclear power plant requiring a federal construction permit); Philadelphia Council of Neighborhood Organizations v. Coleman, 437 F. Supp. 1341, 1370 (E.D. Pa. 1977), aff'd, 578 F.2d 1375 (3d Cir. 1978) (construction of rail commuter tunnel in absence of pollutant discharge permit could not be enjoined under NEPA because the Clean Water Act does not require a permit for construction); Biderman v. Morton, 497 F.2d 1141, 1147-48, 4 ELR 20487, 20490-91 (2d Cir. 1974) (court may not enjoin private actions in which federal government is involved but lacks "go ahead" authority); City of Romulus v. County of Wayne, 392 F. Supp. 578, 596, 5 ELR 20302, 20308 (E.D. Mich. 1975), vacated on other grounds, 634 F.2d 347, 10 ELR 20881 (6th Cir. 1980) (enjoining federal involvement in a project while allowing nonfederal involvement to continue).

21. At this writing, this issue is still pending in an unresolved portion of NRDC v. EPA. See 822 F.2d 109 n.3, 17 ELR 21045 n.3.

22. See Silva v. Romney, 473 F.2d 287, 3 ELR 20082 (1st Cir. 1973). This case involved construction of a low- and moderate-income housing project by a private developer with financial assistance from the Department of Housing and Urban Development (HUD). HUD conceded the financial assistance rendered the project "major Federal action" and had begun preparation of "a full environmental impact statement." At issue was whether the private developer could be enjoined from site preparation pending its completion. The court held the developer could be enjoined because the federal financial assistance had already been committed, thus making the federal government "a partner" in the project.

23. See, e.g., Greene County Planning Board v. Federal Power Commission, 455 F.2d 412, 415, and n.1, 2 ELR 20017, 20019, and n.1 (2d Cir. 1972), cert. denied, 409 U.S. 849 (1972) (action at issue was construction of a high-voltage electrical transmission line that required a federal construction permit under Section 4(c) of the Federal Power Act). The CEQ regulations largely mirror the findings of these early cases.

24. See City of Boston v. Volpe, 464 F.2d 254, 2 ELR 20501 (1st Cir. 1972) (federal funds not yet finally committed); Homeowners Emergency Life Protection Committee v. Lynn, 388 F. Supp. 971, 975, 5 ELR 20195 (C.D. Cal. 1974), rev'd on other grounds and remanded, 541 F.2d 814, 6 ELR 20659 (9th Cir. 1976).

25. See Friends of Yosemite v. Frizzell, 420 F. Supp. 390, 5 ELR 20195, 20196 (N.D. Cal. 1976).

26. See Gage v. U.S. Atomic Energy Commission, 479 F.2d 1214, 1220 n.19, 3 ELR 20479, 20482 n.19 (D.C. Cir. 1973); Kitchen v. FCC, 464 F.2d 801, 802-03 (D.C. Cir. 1972); Movement Against Destruction v. Volpe, 361 F. Supp. 1360, 1383, 3 ELR 20667 (D. Md. 1973), aff'd, 500 F.2d 29, 4 ELR 20278 (4th Cir. 1974).

27. City of Boston v. Volpe, 464 F.2d 284, 2 ELR 20501 (1st Cir. 1972) (construction of Inner Taxiway at airport with federal funds was "Federal action," but did not render construction of Outer Taxiway "Federal action" even though an application for federal assistance for it was pending and a tentative allocation of federal funds had been made). Of course, state or local governments that receive federal funds not earmarked for particular purposes do not engage in "Federal action" when they decide how the funds are spent. Citizens For A Better St. Clair County v. James, 648 F.2d 246, 250, 11 ELR 20665, 20667 (5th Cir. 1981). See also 40 C.F.R. § 1508.18(a).

28. Winnebago Tribe of Nebraska v. Ray, 621 F.2d 269, 10 ELR 20243 (8th Cir. 1980), cert. denied, 449 U.S. 836 (1980) (requirement of a federal permit for a powerline to cross a river did not mean entire 67-mile transmission line was "Federal action"); Save the Bay, Inc. v. United States Corps of Engineers, 610 F.2d 322, 10 ELR 20185 (5th Cir. 1980), cert. denied, 449 U.S. 900 (1980) (issuance of federal permit to construct pipeline outfall did not make construction of plant to which it was attached "Federal action"); Concord Township v. United States, 625 F.2d 1068, 11 ELR 20833 (3d Cir. 1980) (since Certificate of Public Convenience and Necessity to operate rail service did not authorize construction of necessary physical improvements to right-of-way, the environmental impacts of such improvements need not be considered in deciding if issuance of Certificate required an EIS).

29. An example is Sierra Club v. Marsh, 769 F.2d 868, 15 ELR 20911 (1st Cir. 1985), in which a federal permit was issued and federal funds were used to construct a causeway to Sears Island, Maine. It was known at the time that construction of the causeway to the previously inaccessible island would cause others to construct an industrial park there.

30. See notes 17 and 18, supra. This was the rationale of Sierra Club v. Marsh, discussed in note 29, supra. The environmental effects of the industrial park were considered secondary effects of building the causeway.

31. Of course, the federal government must consider alternatives to the "Federal action," regardless of whether the particular agency involved has jurisdiction to implement those alternatives. Natural Resources Defense Council, Inc. v. Morton, 458 F.2d 827, 2 ELR 20029 (D.C. Cir. 1972). But it need not consider alternatives related to private conduct. City of Angoon, 803 F.2d 1016, 17 ELR 20180. As pointed out in note 11, supra, Congress did not intend the dramatic changes to our economy that would result from mandatory federal analysis of private alternatives.

32. See note 20, supra and accompanying text. In any case, if the private conduct truly is caused by the "Federal action," then restraining the "Federal action" itself until completion of the NEPA process will prevent that private conduct.

33. 544 F.2d 1036, 7 ELR 20008 (9th Cir. 1976).

34. 595 F.2d 467, 9 ELR 20252 (9th Cir. 1979).

35. 595 F.2d at 477, 9 ELR at 20256.

36. Id.

37. 544 F.2d at 1044, 7 ELR at 20012.

38. Id.

39. National Forest Preservation Group v. Butz was cited in both opinions. See 544 F.2d at 1044, 7 ELR at 20012; 595 F.2d at 477, 9 ELR at 20256.

40. In National Forest Preservation Group v. Butz, 485 F.2d 408, 3 ELR 20783 (9th Cir. 1973), the Secretary of Agriculture agreed to trade federal lands for other parcels owned by Burlington Northern, Incorporated. Burlington intended to use the new land for a recreational development adjacent to Yellowstone National Park. At issue was whether an EIS prepared for the land exchange was inadequate in failing to address the recreational development. The court found the development should have been addressed:

While the federal defendants are not themselves planning to take action "significantly affecting the quality of the human environment," 42 U.S.C. § 4332(C), the private defendants plan such action, and the exchange is an act without which such action could not be taken. The land exchange is thus analogous to the licensing of or granting of federal funds to a nonfederal entity to enable it to act. Such federal "enablement" has consistently been held to be subject to NEPA.

485 F.2d at 411-12, 3 ELR 20784. The court's analogy was both unnecessary and unfortunate since it could have found the EIS inadequate because the land exchange caused the construction of a recreational development adjacent to Yellowstone Park, which was therefore a "secondary effect" of the land exchange.

41. 584 F.2d 619, 8 ELR 20699 (3d Cir. 1978).

42. 42 U.S.C. § 1320(a)-1 (Supp. V 1975).

43. 584 F.2d at 624 n.6, 8 ELR at 20700 n.6.

44. 584 F.2d at 630, 8 ELR at 20704.

46. 822 F.2d 104, 17 ELR 21043 (D.C. Cir. 1987).

47. 44 Fed. Reg. 32854 (June 7, 1979), 40 C.F.R. § 122.29(c)(4). The rules, with minor exceptions, prohibit construction of new sources until an NPDES permit is issued.

48. 822 F.2d at 127, 17 ELR at 21055.

49. While the court dealt extensively with the "Federal action" question, as will be discussed in text, it found no factual basis for causation there:

[T]he environmental effects of the construction siting decision cannot be deemed to be either direct or indirect effects of EPA's issuance of a discharge permit. The environmental effects of siting are not "effects," in any practical sense, of the permit issuance.

822 F.2d at 131, n.27, 17 ELR at 21057 n.27.

50. During Congressional consideration of the Federal Water Pollution Control Act Amendments of 1972, EPA's General Counsel opined that a "discharge permit program" such as was contained in the pending bill could not be used to exercise "Federal control of production and plant siting decisions in terms of their overall environmental effects." Opinion of the General Counsel, "Application of NEPA to Activities of EPA" (Feb. 25, 1972) at 87. It was not until four years later that EPA expressed a contrary view. At that time the EPA General Counsel opined that EPA may restrain construction of new sources until a NEPA review encompassing plant siting and overall environmental effects of the facility is completed. Opinion of the General Counsel No. 76-18 (Sept. 23, 1976). Almost three more years passed before EPA implemented a construction ban. 44 Fed. Reg. 32854 (June 7, 1979). When industry petitioners challenged the regulation, EPA proposed to withdraw it, stating that the Clean Water Act "does not regulate construction of facilities [but] only discharges from them." 47 Fed. Reg. 52077 (Nov. 18, 1982). But the Agency switched course one more time, adopting a final construction ban and asserting it was "authorized by both the CWA and NEPA." 49 Fed. Reg. 38017 (Sept. 26, 1984).

51. 822 F.2d at 127 n.23, 17 ELR at 21055 n.23.

52. 822 F.2d at 128, 17 ELR at 21056 (emphasis by D.C. Circuit). Section 511(c) of the Clean Water Act indicates that only EPA's actions in: (1) providing federal financial assistance for the construction of certain publicly owned treatment works, and (2) issuing national pollutant discharge elimination system permits for new sources, are "major Federal actions" under NEPA.

53. 822 F.2d at 129, 17 ELR at 21056.

54. In effect, EPA argued that a private decision not to build in the absence of certain conditions that are controlled by the federal government transfers to it factual control over construction of new facilities.

55. 33 U.S.C. § 1316(a)(1).

56. 822 F.2d at 130, 131, 17 ELR at 21057.

57. 822 F.2d at 130, 17 ELR at 21057. The court's discussion of this issue adds nothing to its prior jurisdictional analysis, yet perpetuates an impression that "Federal action" may in some circumstances be deemed to extend beyond the agency's statutory authority.

58. 822 F.2d at 131, 17 ELR at 21057.

59. 828 F.2d 1305, 18 ELR 20115 (8th Cir. 1987).

60. The Secretary's approval is required under 25 U.S.C. § 415 (1982 & Supp. III 1985).

61. 828 F.2d at 1309, 18 ELR at 20117.

62. 828 F.2d at 1308, 18 ELR at 20117. The Eighth Circuit was quoting its prior decision in Winnebago Tribe, which in turn was quoting from the Third Circuit's opinion in NAACP v. Medical Center, which in turn was quoting the District Court judge in NAACP v. Wilmington Medical Center, Inc., 426 F. Supp. 919 (D. Del. 1977).

63. 828 F.2d at 1309, 18 ELR at 20117.

64. 45 Fed. Reg. 56761 (Aug. 25, 1980), 33 C.F.R. Part 230.

65. The Corps is responsible for issuing permits for the discharge of dredged or fill material to waters of the United States under § 404 of the Clean Water Act, 33 U.S.C. § 1344. It also issues permits under §§ 9 and 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. §§ 401, 403, for the construction of improvements in navigable waters.

66. 33 C.F.R. Part 230, Appendix B, paragraph 8(a).

67. Arguably, the Corps would have to consider public transit as an alternative to a new automobile assembly plant — simply because a permit to discharge fill material is required for part of its parking lot. See note 10, supra.

68. See note 28, supra, and accompanying text.

69. 49 Fed. Reg. 1387, 1397-98 (Jan. 11, 1984).

70. 42 U.S.C. § 7609. The statute states,

(a) The Administrator shall review and comment in writing on the environmental impact of any matter relating to duties and responsibilities granted pursuant to this chapter or other provisions of the authority of the Administrator, contained in any (1) legislation proposed by any Federal department or agency, (2) newly authorized Federal projects for construction and any major Federal agency action (other than a project for construction) to which section 4332(2)(C) of this title applies, and (3) proposed regulations published by any department or agency of the Federal Government. Such written comment shall be made public at the conclusion of any such review.

(b) In the event the Administrator determines that any such legislation, action, or regulation is unsatisfactory from the standpoint of public health or welfare or environmental quality, he shall publish his determination and the matter shall be referred to the Council on Environmental Quality.

See also 40 C.F.R. Part 1504.

71. Draft final rules accompanying a letter of April 18, 1986, from Robert K. Dawson, Assistant Secretary of the Army, to A. Alan Hill, Chairman, Council on Environmental Quality.

72. Id.

73. CEQ, FINDINGS AND RECOMMENDATIONS ON REFERRAL FROM U.S. ENVIRONMENTAL PROTECTION AGENCY CONCERNING PROPOSED AMENDMENTS TO U.S. ARMY CORPS OF ENGINEERS PROCEDURES FOR IMPLEMENTING THE NATIONAL ENVIRONMENTAL POLICY ACT (June 8, 1987) at 9-10. The CEQ also recommended reconsideration of the Corps' second factor, apparently seeing no relationship between an applicant's ability to complete a project without federal participation, and federal responsibility for its environmental effects. However, several courts have thought this a useful factor. See, e.g., City of Boston v. Volpe, 464 F.2d at 259-260, 2 ELR at 20503-04; Friends of the Earth v. Coleman, 518 F.2d at 329, 5 ELR at 20430.

74. 822 F.2d at 131, 17 ELR at 21057.