Harlem Valley Transportation Association v. Stafford: One More Decision Tells the ICC to Stop Dragging Its Feet on NEPA Compliance

The National Environmental Policy Act of 1969¹ mandated that federal agencies consider the environmental effects of proposed agency action in addition to their primary agency goals. Section 102(2) (c), NEPA's action forcing mechanism, requires agencies to prepare impact statements on major federal actions that significantly affect the environment. In the more than four years from NEPA's enactment up to May 30, 1974, draft or final statements had been filed concerning 5,235 separate agency actions.² Nevertheless the process of achieving compliance with the dictates of NEPA has been protracted in several federal agencies; many of these agencies have become targets of litigation by environmental groups intending to force agency decision makers to change non-complying policies.

One prime offender has been the Interstate Commerce Commission (ICC) which filed only two impact statements prior to January, 1974. The recent decision by the Second Circuit Court of Appeals in Harlem Valley Transportation Association v. Stafford³ is the latest in a series of cases with the same fundamental theme: the ICC has persistently dragged its feet in implementing NEPA.

Four lawsuits have been brought against the ICC concerning compliance with NEPA since the January 1970 effective date for NEPA. Port of New York Authority v. Interstate Commerce Commission,⁴ the first challenge to Commission activities based on NEPA, held that the Commission's failure to file an impact statement prior to a decision to allow interim increases in rates for lighterage service at New York Harbor did not violate NEPA. The [4 ELR 10142] court rested its decision on a finding that Congress vested primarily jurisdiction in the Commission to suspend proposed rate increases temporarily, and that decisions by the Commission not to suspend such increases pending final approval were not judicially reviewable. The court indicated that the proper time for detailed environmental analysis required in an impact statement would be prior to the Commission's final determination whether or not to allow permanent increases.

Shortly after the Port of New York case the ICC was forced to prespare its first environmental impact statement. The District Court for the Eastern District of New York, in City of New York v. United States,⁵ found the Commission was obliged under NEPA to prepare an impact statement before it could authorize abandonment of a Brooklyn railway line.

The Commission was similarly judicially compelled to file its second impact statement.⁶ In Ex Parte 281 the Commission was considering applications by rail companies for an across-the-board increase in rail freight rates. Plaintiffs, Students Challenging Regulatory Agency Procedures (SCRAP), challenged the increases as discriminating against recyclable materials (such as scrap iron) and maintained that, because granting the requested increases would have a significant effect on the environment, preparation of an impact statement was required. The Commission prepared a draft statement in the matter after a decision had already been reached to allow the increases; the ICC adopted the impact statement in a one-sentence order affirming its prior decision.

The same three-judge panel that had earlier held for the plaintiffs that an impact statement was necessary, found, in a subsequent opinion in SCRAP v. United States,⁷ that the draft impact statement prepared by the Commission was inadequate, that the administrative procedures followed by the Commission in preparing the statement did not comply with NEPA's mandate that the statement and comments should "accompany the proposal through the existing agency review processes," and that the Commission would have to prepare a second, proper impact statement. The court indicated that although the Commission's language and style alone could probably not be sufficient basis for invalidating an impact statement, these factors were at least evidence of a lack of good faith. According to the court, the Commission's statement was "combative" and "continually attack[ed] the views of those opposing the increase, denominating these 'one-dimentional' and impaired by 'syndromes'."

The Commission's latest unsuccessful skirmish over NEPA, Harlem Valley Transportation Association v. Stafford, dealt again with the issue of abandonment of a railway line. Plaintiff business firms, public associations and individuals had moved for a preliminary injunction to prevent the ICC from holding abandonment proceedings until necessary impact statements had been prepared. They argued that they would be inconvenienced and harmed economically by an abandonment of rail service in the Northeast. The district court granted the injunction, holding that it was bound by the Second Circuit's prior decision in Greene County Planning Board v. Federal Power Commission.⁸ In that case the Second Circuit stated that the Federal Power Commission should neither "place the burden of analyzing environmental issues on intervenors" nor "rely on self-serving statements by applicants."

On appeal, the Second Circuit upheld the district court. It pointed out that regardless of some distinguishing characteristics between the procedures of the two agencies, the policies expressed in Greene County I would be relevant to the ICC. The Commission's procedure of requiring applicants, in this case the rail lines requesting abandonment, to submit detailed evaluations of environmental impact (which were then used by the Commission to prepare final impact statements), rather than circulating a staff prepared draft statement prior to hearings, did not meet the affirmative duty imposed by NEPA on the agency to consider environmental issues, the court indicated.

The decision requires the Commission to devise a mechanism for making the initial determination of whether an impact statement is necessary. The court, rejecting the Commission's argument that no staff would be available to assist the administrative law judge's determination that an impact statement is warranted, admonished the Commission that under Hanly v. Kleindienst (Hanly II),⁹ not only must a reviewable record of the decision be developed but also the decision must be reasoned sufficiently to allow a court to conclude it was not arbitrary.

According to members of the ICC staff involved with environmental analyses, the Commission has now changed its procedures to provide a "reviewable record" whenever the ICC determines that its proposed actions will have no significant environmental impact, and has encouraged changes in applicants' plans to minimize impact of even those actions deemed not "significant." At present the Commission has 12 staff members assigned to deal with environmental matters and is budgeted to hire a total of 20 persons for the fiscal year beginning July 1, 1974.

During the seven months from January, 1974 until the time of this writing, the Commission filed ten impact [4 ELR 10143] statements with CEQ, five times as many as it had in the first four years after NEPA was enacted.¹⁰ Whether such a transformation is a result of the Commission's unsuccessful litigation over NEPA or results from a new, sincere desire within the ICC to further the broad congressional policies expressed in the Act, can only be answered by Commission decision makers. Of greater significance is that after a long period of reclcitrance, the Interstate Commerce Commission has begun taking its agency duties under NEPA seriously.

1. 42 U.S.C. § 4321 et seq.

2. CEQ, 102 Monitor, May, 1974, p. 135.

3. 4 ELR 20632 (June 18, 1974).

4. 2 ELR 20105 (2nd Cir. 1971).

5. 2 ELR 20275 (E.D. N.Y. 1972).

6. For a discussion and history of the SCRAP case, see Comment, SCRAP v. United States: The ICC's Impact Statement on Freight Rates is Held Inadequate, 4 ELR 10045.

7. 4 ELR 20267 (D.D.C. Feb. 20, 1974).

8. 2 ELR 20017 (2nd Cir. 1972). See Comment, Delegation of the Drafting of Environmental Impact Statements: Greene County Planning Board v. Federal Power Commission, 2 ELR 10153.

9. 2 ELR 20717 (2nd Cir. 1972).

10. Telephone communication with staff of CEQ and of the Interstate Commerce Commission.