Introduction

The passage of the National Environmental Policy Act¹ compelled the adjustment of traditional legal doctrines in order to accommodate the concerns of environmentalists. The courts expanded long-standing notions of justiciability,² standing,³ and irreparable injury⁴ to allow representation of environmental interests to the degree previously accorded the representation of economic interests. But these changes in legal doctrines were not the only changes in the legal system which NEPA litigation has brought about. The tremendous variety among environmental groups and ideologies, the wide range of federal projects arguably subject to NEPA, and the simple fact that it is often non-economic interests which are being asserted, all point towards a modification of traditional forms in such matters as attorney-client relationships and settlements.

This article examines the impact of these new interests on the settlement process. It will attempt to differentiate those environmental interests that create pressure for settlement from those interests which pose obstacles to it. The relationship between the environmentalist client and attorney during settlement negotiations will be examined, both as a factor in determining the likelihood and shape of any settlement and for the insights it provides into the particularities of environmental litigation. The article will also discuss the impact of settlements on the prospects for plaintiffs' recovery of attorney's fees and the award of declaratory judgments.

It is the proposition of this article that environmentalist plaintiffs have often achieved more through the settlement of a NEPA claim than they would have through its successful prosecution. This article will examine the reasons for this peculiar state of affairs, and the factors or set of factors which are most likely to lead to a settlement more favorable to the plaintiff than the NEPA process, particularly the impact statement preparation process, would be.

The settlement of a NEPA lawsuit is a relatively recent phenomenon (none were reported before 1972), and consequently, any generalizations about their patterns or future would be premature. However, this article will attempt, on the basis of five NEPA settlements, the settlement of an environmental case brought under a related (procedural) statute, and interviews with lawyers who have participated in NEPA settlement negotiations, to outline the forms that NEPA settlements have taken so far, and, where possible, to construct hypotheses about the conditions that are most likely to lead to a settlement favorable to environmentalists.

These settlement agreements and interviews lead to the preliminary conclusion that there are in fact several types of NEPA settlements, each differing in its treatment of NEPA (i.e., whether the NEPA procedures are enforced, modified, or abandoned), and in the degree of client participation in the conduct of the settlement. Among the factors that can be isolated as possibly determinative of whether a settlement will be reached, and whether it will be more favorable to the plaintiff than the government's compliance with NEPA would have been, are: the objectives of the particular plaintiff (whether these objectives are specific or general); the complexity of the legal issues involved in the case; the presence or absence of the federal government in settlement negotiations; and finally, the amount of money or work already committed to the project under attack. However, before analyzing the facts of the individual cases in terms of these factors, it would be useful to describe, in general terms, the procedures of NEPA and NEPA's potential for influencing federal agency decision-making. It is the particular strengths and weaknesses of NEPA which create the framework for settlement negotiations, and an understanding of these strengths and weaknesses is essential to an understanding of the cases brought under it.

The most repeatedly litigated duty which NEPA imposes on a federal agency is the duty to issue an environmental "impact statement" before the agency proposes or commences a "major federal action … significantly affecting the quality of the human environment." 42 U.S.C. 4332 (c). The impact statement must identify, in non-conclusionary, empirical terms, the environmental impact of the proposed action, the environmental impact of all reasonable alternatives to the action, and any irreversible [4 ELR 50002] and irretrievable commitments of resources which would be involved in the proposed action should it be implemented. Prcedures which the agency must follow in preparing an impact statement are not set forth in the text of NEPA, but have been established by the President's Council on Environmental Quality pursuant to NEPA. 36 F.R. 7724-7729 (April 23, 1971). These CEQ "guidelines" have been copied by every major federal agency. They provide for a 90-day waiting period between the issuance of a draft impact statement (which other federal agencies and the public are invited to comment upon) and any action by the agency on the project being studied. Furthermore, the guidelines provide for a 30-day period between the issuance of the final impact statement (which must respond to the public's comments) and the proposed action. The guidelines suggest that, "when appropriate," the agency should hold public hearings on the draft impact statement, and should make the draft available to the public 15 days in advance of hearings. As will be discussed later, these time requirements benefit environmentalists above and beyond the opportunities they give to respond adequately to the impact statement.

The impact statement process itself may benefit environmentalists in a number of ways. First, the federal agency proposing the action must collect and analyze all relevant information on the question of how greatly a proposed project will damage the environment, and environmentalists can draw on this information and analysis in presenting their case to the public, the Congress, or to the federal agency itself. In addition to this "researching" function, the agency's duty to receive and respond to public comments on its analysis may result in some publicity for the environmentalists' position. Third, some conservationists believe that the impact statement preparation process might actually change the minds of federal administrators about carrying out environmentally costly projects.

However, NEPA does not guarantee that the course which is shown by the impact statement to be the least environmentally damaging will be followed. The courts have refused to disturb an administrator's decision, after the impact statement has been completed, to follow other than the best alternative from the environmental standpoint if he has considered the statement and if he finds that other considerations (such as cost or national security) outweigh the environmental ones.⁵ The lack of any standard (except the arbitrary, unreasonable, and abuse of discretion one) with which the courts can review the administrator's final action is what leads to NEPA being termed a "procedural" rather than a "substantive" statute. Nevertheless, environmentalists can use the time requirements of the impact statement preparation process (see p. 50001, supra) to get more out of NEPA than just the statement itself. For example, they could delay a federal action by a NEPA suit in order to gain time to organize mass opposition to it. (Plaintiffs in this situation would presumably see their relief coming from the legislature, not the courts). Or plaintiffs could bring a NEPA suit and agree to waive the impact statement time requirements (and the further delay that would be caused by challenging the statement's adequacy), or even the statement itself, in return for specific design changes in the federal project.

Each of these "benefits" of NEPA has a direct bearing on the likelihood and the shape of the settlement. Plaintiffs who are interested in the benefits of the impact statement itself may agree to exclude parts of the project from the scope of the impact statement, but they will be unwilling to waive, or even substantially modify, the impact statement requirement itself. Plaintiffs who are using NEPA to buy time will probably be unwilling to settle at [4 ELR 50003] all. And plaintiffs who wish to exchange their rights to an impact statement (including their rights to ensure that it take a certain amount of time and that it be adequate) for specific changes in the project will find that settlement provides the only mechanism for effecting such an exchange.

I. The Opportunities for Environmentalists from NEPA Settlements

A. The Background of the Settlement Agreements.

i. EDF v. Peterson.⁶ NEPA for NEPA's sake.

On June 30, 1972, the Maritime Subsidy Board, a semiautonomous agency within the Commerce Department, signed contracts with several American shipyards and ship purchasers providing subsidies to cover 43 percent of the cost of constructing 13 oil tankers, including 6 "supertankers" — 225,000+ ton ships capable of carrying twice the amount of oil carried by the tanker whose oil coated the beaches of England in 1967.⁷ The subsidies promised in these contracts totalled $266 million, one quarter of the funds authorized by Congress in 1970 for the ten year bulk carrier program. This $266 million figure was the largest single expenditure of these funds by the Maritime Subsidy Board to date; although the 1970 Act had provided for a 45 percent subsidy in fiscal 1971, with declining percentages in each successive year, the Board had previously let contracts for only a few small tankers.

The Administration widely publicized these contracts, and by August, 1972, a number of lawyers in the environmental movement had decided that the construction subsidy program for tankers presented the scope and type of potential danger to the environment that called for Commerce's issuance of an impact statement concerning the program. First, a reading of articles⁸ on shipbuilding and tanker operations convinced these lawyers that there were design features not prescribed by the Maritime contracts which could possibly provide more protection against oil spills from grounding, collision, or at-sea tanker operations. Preparation of the impact statement would require the Maritime authorities to investigate and evaluate these and other design features and to consider whether the contracts should be changed so as to include them. Second, there are presently no ports on the eastern seaboard of the United States deep enough to service the supertankers, and the environmentalists feared that the American government's investment in supertankers would increase already existing pressure to build "soperports" — dredged existing ports or new offshore terminals — capable of handling these tankers. Third, the fact that Commerce had never issued an impact statement on any of its projects made a suit to compel such a statement attractive. Fourth, to the three environmental groups who were considering a NEPA suit, the Environmental Defense Fund (EDF), the Natural Resources Defense Council (NRDC), and the National Parks and Conservation Association, the benefits of applying NEPA to the tanker program exceeded merely improving the subsidized vessel's designs. These groups felt that any impact statement on the tanker program should consider the whole problem of U.S. fuel transportation and fuel demand.

The Commerce Department's response to these groups' contention that the tanker program required an impact statement was negative. Commerce lawyers said that the program would not have a 'significant impact on the quality of the human environment' (NEPA 102(c)) because the subsidized ships would constitute a miniscule fraction of the world supertanker fleet, and that if subsidies had not allowed these particular tankers to be built in the United States, American companies would have built them abroad anyway. As to the superport issue, the Commerce officials stated that pressure to develop superports would come from the major American oil companies with or without the construction of the subsidized vessels. (None of the subsidized vessels had been ordered by a major oil company — these concerns had so far built abroad.) A superport impact statement, the officials said, could be prepared by the federal agency which first proposed a superport.⁹

Less than a month later the attorney for these groups, Robert Hallman of the Center for Law and Social Policy¹⁰ filed a complaint against the tanker program and a motion to enjoin all subsidy payments under it until an impact [4 ELR 50004] statement had been completed.¹¹ Almost immediately the shipyards and shipowners who had contracted for the subsidized vessels intervened as defendants.¹² Several of the shipyards, especially National Steel and Shipbuilding on the West Coast and Seatrain Shipbuilding in Brooklyn, represented to the court that a preliminary injunction would cause lay-offs of thousands of their workers and could mean the demise of the shipyards themselves.¹³ Some of the shipowners represented that extensive credit arrangements would be jeopardized if work was halted.¹⁴

These possibilities pushed some of the defendants into negotiations with the plaintiffs to avoid an injunction. Plaintiffs were able to reach a separate agreement with National Shipbuilding, and the shipowners who had contracted with it, exempting all ships under contract prior to June 30, 1972, from any NEPA requirements but making NEPA applicable to all ships contracted on or after that date. National agreed to conform these ships to any design changes which might be required by an impact statement. The stipulating defendants remained free, however, to oppose on equitable grounds plaintiffs' motion to enjoin subsidies under the post-June contracts pending the impact statement's completion. Plaintiffs were willing to reach this agreement with National for three reasons: first, the ships being constructed or proposed by these companies already incorporated some of the design features discussed in plaintiffs' complaint;¹⁵ second, work was already in progress at these shipyards, and their elimination from the balance of equities necessary to any injunction would aid plaintiffs' case considerably; and third, several of the National subsidies had been awarded in 1971 and early 1972, and their exemption would both be fair and aid the plaintiffs in rebutting defendants' claim that laches barred their suit.

The plaintiffs' attorneys were unable to persuade the other, larger shipbuilders to follow National's example. In private sessions these shipbuilders argued that they could not take the risk that an environmental statement would require retroactive design changes in their ships; it was claimed that the terms of the charters which they had entered into prohibited the addition of such potentially costly features as double bottoms,¹⁶ even for ships on which actual construction would not begin until 1974 or 1975. However, plaintiffs and the remaining intervenors were able to devise a procedure by which the risk of costly alterations on intervenors' ships would be minimized and which would at the same time not involve plaintiffs' wholesale acceptance of intervenors' cost estimates. Plaintiffs agreed that if the Commerce Department would conduct an "economic feasibility analysis" which would apply certain specified design alternatives to the ships under contract, and that if plaintiffs were given the opportunity to comment on the government's analysis, they would not oppose whatever government decision was reached as to the feasibility of changes. Ships which had not been chartered or substantially designed would be covered by the ordinary NEPA environmental impact statement. This was, in effect, a private substitute for the NEPA process, which required a less thorough and protracted environmental analysis than did NEPA.

The economic feasibility analysis still had to be conducted by the Commerce Department, however, and Commerce was not willing to sign any stipulation that included a declaration that NEPA applied to the tanker subsidy program, even though they were willing to follow NEPA procedures in the future. Commerce also feared criticism from Congress and the Executive if they voluntarily agreed not to spend the funds which Congress had already appropriated for fiscal 1973. The impression was created that Commerce would feel safer if their subsidies were halted under court order than by agreement. This reluctance seemed to make the prospects for settlement remote, since it was precisely the future contract and future expenditure of construction funds that plaintiffs felt they had the greatest chance of enjoining.

The settlement agreement eventually signed by all the parties, (4 ELR 20298) reveals considerable compromise by both plaintiffs and the government. Plaintiffs dropped their request for an admission that NEPA applied to the tanker program, and agreed that Commerce could spend its remaining fiscal 1973 budget on a specified number of new subsidy contracts. The government, in turn, agreed to limit the number of ships it would subsidize from the unspent 1973 funds and also agreed to a detailed statement of the alternatives it would examine in both the economic feasibility analysis and the environmental impact statement. (See 4 ELR 20300).

[4 ELR 50005]

The settlement agreement provided substitutes for, modifications of, and additions to the impact statement procedures contained in NEPA. Ten of the 18 ships already contracted for, plus three pending Seatrain applications for subsidies, were to be covered by a public Economic Feasibility Analysis, which was to be completed in a shorter time period than that provided for an impact statement under NEPA.¹⁷ However, in providing that the administrator's decision as to the economic feasibility of environmental changes be subject to public comment, the Economic Feasibility Analysis went beyond the duties set by NEPA. (In this respect the settlement's provision for public hearings on the environmental impact statement also represented an expansion of Commerce's duties beyond those imposed by NEPA. (See 4 ELR 50001 supra.)

Under the terms of the settlement, the Maritime Subsidy Board also promised to give notice in the Federal Register of all future tanker subsidies and all future pollution abatement specifications. Access to Commerce's decision-making procedures had been among the requests made by plaintiffs to Commerce even before suit was filed, and the procedures set up by the agreement guaranteed that any future environmental challenges to specific subsidies would not have to be undertaken after sizeable sums had already been spent on the ships or their designs. Again, these notice and public comment requirements went beyond the previously recognized scope of NEPA, since they provided for public comment on action which could only indirectly be construed as "major federal action significantly affecting the quality of the human environment."

Even though some of the procedures established deviated from those set forth in NEPA, these procedures closely resembled the NEPA procedures and were probably intended to perform the same information gathering and disclosing function. Neither plaintiffs, the private parties, nor the government was sufficiently knowledgeable of the economic and environmental impacts of the suggested design changes to persuasively advocate or oppose any specific design changes.¹⁸ It is likely that plaintiffs hoped the Economic Feasibility Analysis and the broader environmental impact statement covering the whole subsidy program would serve to further both Commerce's and their own education in the field of maritime pollution control.

ii. San Francisco Tomorrow v. Romney: Access to the drafting process.

San Francisco Tomorrow was a broad procedural attack on three large urban redevelopment projects in San Francisco, Berkeley and Oakland, California. Plaintiffs in San Francisco Tomorrow were a coterie of local environmental and housing groups including several residents of the areas affected by the projects and two national conservation groups, the Sierra Club and the Environmental Defense Fund. They claimed that the U.S. Department of Housing and Urban Development (HUD) had violated NEPA by financing parts of the projects without first issuing an environmental impact statement. Even before plaintiffs' motion for a preliminary injunction was heard, plaintiffs entered into an accord with the municipal agency in charge of the redevelopment project in Oakland.

The redevelopment project in Oakland, the Oakland City Center, was the most advanced of the three projects in terms of construction, expenditures, and financial commitments, and, according to plaintiffs' counsel, J. Anthony Kline,¹⁹ the Oakland Redevelopment Agency and the developers with whom it had contracted had much to lose from an injunction. Delay meant losses to the private contractors due to additional interest payments and inflationary increases in costs. While to the Redevelopment Agency, it meant additional expenses and perhaps the collapse of the project. Neither the plaintiffs nor the Redevelopment Agency were able to get HUD to engage in settlement negotiations; instead, the Redevelopment Agency proposed that it prepare en environmental impact statement that would conform to the procedures established by NEPA even though NEPA requires only federal agencies to undertake the impact statement process. The final agreement between the plaintiffs and the Redevelopment Agency not only provided that the Agency would issue an impact statement, but permitted three of the plaintiff groups, the Sierra Club (Bay Area Chapter), the Environmental Defense Fund, and the Modern Transit Society, to appoint representatives to a committee which was to oversee the preparation of the impact statement. Control of this committee would be equally divided between plaintiffs' representatives and Redevelopment officials. In return, plaintiffs agreed to let work proceed on a limited area (6 blocks) within the planned project site, and agreed that the impact statement would only cover the second phase of the project, permitting work to go ahead in certain areas of the project in accordance with the Redevelopment Agency's original plans. The plaintiffs' concessions kept construction workers, many of them blacks, from being unemployed during the impact statement's preparation. (Editorials in the Oakland Tribune had accused plaintiffs of being insensitive to the effect of an injunction on minority workers; [4 ELR 50006] attorney Kline admitted that concern over this and similar charges was a factor leading plaintiffs to settle.)

The plaintiffs in San Francisco Tomorrow obtained through agreement the promise of an impact statement from an agency from which NEPA did not require one and a role in the drafting of that impact statement far exceeding the one provided them by NEPA. In fact, some degree of control over the process, such as was guaranteed by appointing one-half of the statement preparation committee, would seem imperative for plaintiffs who accept impact statements from state or local agencies, since no court could enforce NEPA against a non-federal agency if plaintiffs later claimed the statements were inadequate or improperly prepared. Article 13 of the San Francisco Tomorrow agreement²⁰ states that the settlement "does not constitute a waiver of plaintiffs' right to commence a new action based on alleged insufficiency and inadequacy of a final environment impact statement for the Project pursuant to (NEPA)," but this saving clause could not give a federal court jurisdiction over the action of an agency that is not covered by NEPA. An alternative means of control would be to provide in the agreement that the court retains jurisdiction over the case and that any attack on the sufficiency of the impact statement would then be based on the agreement and not on NEPA. (This would require that the impact statement preparation procedures be detailed in the agreement itself.) However, it does not seem possible to combine these two means of control — preserved jurisdiction and participation in the drafting process — in a single agreement, since it is unlikely that plaintiffs could successfully attack the final impact statement as legally insufficient if they shared control over its preparation on an equal basis with the government.

iii. The Cove Point settlement and Isaak Walton League v. Schlesinger: quid pro quo.

The clearest example of the trade-off of a NEPA claim for a concrete objective is the settlement of Columbia LNG Corporation, et al., DKT Nos. CP 71-68,²¹ where 30 environmental groups intervened in a Federal Power Commission hearing to block the approval of a gas pipeline off Cove Point, Maryland. The two gas companies requesting permission to build the pipeline, Columbia Gas Co. and Consolidated Gas Co., were parties to a 1970 agreement between American gas companies and the state-owned Algerian gas concern to import natural gas into the United States.

On June 28, 1972, the Federal Power Commission issued an opinion upholding an Examiner's decision that importation of Algerian LNG should be permitted and that the gas companies should be allowed to build receptor docks and tanks at Cove Point. The Commission approved the conclusion of the NEPA impact statement prepared by the Examiner, which was that "the construction and operation of the proposed facilities … would have no substantial adverse environmental impact; and in any event, such adverse environmental impact, if any, will be outweighed by the benefit to be derived from additional natural gas."²² The conservation groups appealed the Commission's decision on the grounds that the Examiner had violated certain Commission regulations in reaching his decision.

Under the terms of the agreement between the Algerian LNG concern and the American gas companies, all issues requiring FPC approval had to be resolved before January 1, 1973, or the import deal would terminate.²³ The conservationists' appeal thus threatened not only the Cove Point site but Columbia's and Consolidated's role in the entire importation scheme.

The gas companies' first negotiations with the plaintiffs did not involve settlement at all, but rather a plea to the national president of the Sierra Club to drop the suit for the good of the environment. Columbia Gas argued that natural gas was a much cleaner burning fuel than oil or coal, and that the plaintiffs were jeopardizing the supply of this fuel to American producers. Rebuffed in this attempt, the companies offered to negotiate with the coalition's lawyer, Ron Wilson. Their first meeting must have shocked the gas company negotiators, as Wilson presented them with a six-point program which plaintiffs' members had voted at the time suit was commenced to be the exclusive basis for any settlement. This program not only called on the companies to construct the pipeline underwater (which the companies claimed would cost $20 million more) but also demanded that the companies cede all of their 1,000 shoreline acres, except those being directly used by the receptor tanks, to the state for recreational purposes. (Plaintiffs feared the companies would lease or sell these lands to real estate developers.) The environmentalists also demanded that the companies camouflage the tanks to the best degree possible and that they remove a road that had been built to allow construction equipment to get to what would have been the pipeline pier.

The final accord reached between the companies and the coalition did not differ substantially from the coalition's original program. Rather than granting the 1,000 acres to the State, Columbia retained ownership of the land but agreed to lease 100 acres to the state for recreational purposes and to grant a scenic easement which [4 ELR 50007] would block development on another 600. As to the remaining 300 acres, Columbia was permitted to construct receptor tanks, but if the Algerian deal fell through or for any other reason the land was not to be used for Columbia's gas operations, these 300 acres would escheat to the State.

The Cove Point plaintiffs gained concessions through settlement far beyond what they could have gained had a court agreed with their NEPA claim. The FPC impact statement could have resulted in the pipeline's being constructed underground as a prerequisite of the certificate of convenience, but it is doubtful whether the FPC has the authority to require the gas companies to enter into any of the land use restrictions to which they ultimately agreed. Nor could NEPA have prevented the gas companies from leasing the remainder of their land to developers; since the development of this land would probably not involve federal funds, NEPA would not apply at all. In addition to these advantages over NEPA, the suit evinces a concern towards aesthetic values which exceeds that which the FPC would show — or be required by acourt to show — in an impact statement.²⁴ Even though a federal agency is required to consider aesthetic injury in measuring the impact of a project on the quality of the human environment,²⁵ there would be slim legal basis for attacking an FPC determination that the additional costs to the companies (and ultimately the gas consumers) of building the pipeline underwater outweighed its damage to the appearance and recreational use of Cove Point.

Isaak Walton League v. Schlesinger provides another example of a waiver of NEPA in return for a promise by the private defendants to institute design changes in the project. In November, 1971, a coalition made up of environmental groups, the political action committee of the United Auto Workers, and the State of Illinois brought suit under NEPA against both the Atomic Energy Commission and the Army Corps of Engineers The suit alleged that both agencies had taken actions requiring an impact statement without issuing one, the AEC in granting an Illinois nuclear generation station a "partial" operating license (up to 50 percent capacity) and the Corps in granting the power plant's application to build a diffuser pipe which would discharge the water that had cooled the reactors back into the Mississippi.

Plaintiffs feared that even a partial operation of the station would threaten the release of masses of heated water into the river, raising its temperature to a point that might prove hazardous to fish and other forms of life. Plaintiffs preferred a closed cycle cooling system to either of the two systems being considered by the utilities, the diffuser discharge pipe or the alternative condenser cooling water discharge system, because under a closed-cycle operation a significantly less volume of heated water would reach the river.²⁶

A Federal District Court awarded plaintiffs an injunction against operation of the plant or approval of the discharge pipe²⁷ and defendants, including the two utilities, Commonwealth Edison Company and Iowa Illinois Gas and Electric Co., appealed. On March 27, 1972, an agreement was signed between plaintiffs and the utilities dismissing the action.²⁸ Plaintiffs waived NEPA completely in return for a promise from the utilities to install a closed-cycle cooling system within a 40-month period. The agreement set forth conditions under which the station could operate on a partial basis pending completion of the closed-cycle system, and permitted the companies to apply for a permit to employ an interim diffuser discharge pipe system. According to the settlement agreement, these concessions were made "in view of the demonstrated and immediate need for additional electrical generating capacity within the utilities service areas…" 2 ELR at 20389. According to the utilities a closed-cycle system cost $19 million more than a diffuser discharge pipe system, but, again according to the companies, the delay in operation between the injunction and the date of the agreement had cost them $50 million in lost revenues.²⁹

iv. National Wildlife Federation v. Tiemann: Changing the ground rules

The Tiemann case does not resemble the cases which have been discussed so far. Rather than claiming that a federal agency had failed to prepare an impact statement for a particular project, the plaintiffs in Tiemann claimed that the procedures followed by the Federal Highway Administration [4 ELR 50008] (FHWA) in deciding whether an impact statement was required for a particular project themselves violated NEPA. The Tiemann case did not involve the questions of law customarily presented by a NEPA case, such as whether the federal agency in question significantly affected the environment; unlike the previous settlements, which directly affected only one federal program or project, Tiemann posed one question of law, the resolution of which would affect an unknown number of projects across the country.³⁰

The one question of law in dispute in Tiemann was whether FHWA's decision, embodied in its regulations "implementing" NEPA,³¹ to exclude from the full range of NEPA's requirements all projects receiving FHWA "design approval"³² before February 1, 1971, violated NEPA.

FHWA's NEPA-implemented guidelines did not explain the reasons why the February 1 cut-off date had been chosen, even though the effective date of NEPA was January 1, 1970. Nevertheless, these regulations provided that, for highway projects receiving design approval between January 1, 1970 and February 1, 1971, an environmental impact statement need only be prepared if "in the judgment of the FHWA division engineer,³³ implementation of [NEPA] to the fullest extent possible requires preparation and processing of an environmental statement."³⁴

Writing in an ELR article criticizing the chaotic state of FHWA's highway project approval regulations,³⁵ Robert Kennan, Jr., who was later to represent the National Wildlife Federation in the Tiemann suit, stated that FHWA's decision to exempt projects receiving design approval before February 1, 1971 from NEPA's application:

… created a significant incentive for the states to obtain FHWA design approval before that date. Not surprisingly, an extraordinary number of design approvals were given or documented during January, 1971.

In these circumstances, serious questions may be raised about any decision by an FHWA division engineer that an environmental statement was not necessary with respect to a highway section given design approval shortly before February 1, 1971.³⁶

FHWA's arbitrary exclusion of highway projects receiving design approval before February 1, 1971 was rejected by two courts applying NEPA to highway projects. The Fourth Circuit required FHWA to issue an impact statement on a project for which design approval had been obtained on January 21, 1971,³⁷ and a district court in Georgia required an impact statement to be prepared on a project even though design approval had been obtained prior to January 1, 1970.³⁸

The decisions indicated that FHWA's blanket exemptions might not survive a court challenge. On June 29, 1973, the National Wildlife Federation filed suit in the United Stated District Court for the District of Columbia seeking to enjoin FHWA's continuing to exempt proposed federal-aid highway projects from NEPA's requirements merely because the proposed highway received design approval before February 1, 1971. A consent judgment was entered into between plaintiffs and the Administrator of the Federal Highway Administration and the Secretary of Transportation on July 23, 1973, less than one month after suit was brought.³⁹

The settlement agreement established a complicated project appraisal procedure to replace FHWA's earlier standards for deciding which projects require impact statements. The agreement established a new special grace period to replace FHWA's February 1, 1971, deadline, but the same minimum standards were to govern both during this period and after. If a state files a request for an authorization between August 15, 1973 and January 1, 1974, the FHWA division engineer must issue an impact statement if the proposed authorization involves either construction or right-of-way acquisition. However, even proposed authorizations within these two [4 ELR 50009] categories may be granted without an impact statement if the division engineer finds that delaying right-of-way acquisition will cause exceptional hardships to highway-area residents or that demolition is required to protect public safety.⁴⁰ An impact statement must be prepared for authorizations requested after January 1, 1974, that fall in the above two categories (subject to the same exceptions), but FHWA remains free to require that impact statements be prepared for additional categories of authorizations, or, for that matter, every proposed authorization.⁴¹

Once the division engineer has determined that the authorization sought falls within categories covered by the settlement agreement, and that the authorization does not come within one of the agreement's exceptions, he must identify the "highway section" to which the authorization relates.⁴² This identification is necessary because authorization requests by the state government do not usually take the form of one or a series of activities along one stretch of highway, but can be various activities along small sections of numerous highways. Thus, an environmental impact statement would be meaningless if prepared only for the highway segment directly affected by the authorization; under the settlement, enough of the surrounding highway would have to be considered in any impact statement to insure that the cumulative impact of such authorizations on the environment will be measured.

The agreement provides that the division engineer must publish notice of the authorization request and the highway section he has decided it relates to. This notice must also include an invitation to all interested persons to submit comments as to whether a NEPA statement should be prepared. The division engineer must then publish his decision that an impact statement is or is not required.

The Tiemann settlement was far-reaching in its rationalization of FHWA's procedures for determining the environmental impact of the projects it funds. In the place of uncertainty as to which authorizations are "major federal actions" requiring an impact statement, the settlement substituted a relatively precise set of standards for determining which requests for authorizations trigger NEPA. The agreement also explicitly tied the standard to be used in determining the relevant highway section for NEPA purposes to FHWA's NEPA regulations; before the suit, it appeared that the division engineers were using their own "operating" definitions of what the relevant highway section was.

Like the Peterson case, the Tiemann settlement opened up a previously invisible administrative process to public scrutiny and public participation. Under the agreement the division engineer would have to notify the public in the region of the affected highway of the specifics of proposed authorizations, as well as notify the public and the plaintiffs of each determination that no impact statement was required. This new procedure promised to end a situation in which not only the plaintiff but FHWA itself did not know how many authorizations had slipped by without an impact statement.

In return for these changes, FHWA received the assurance that authorizations for highway locations on which grading and drainage had already been either authorized or carried out prior to August 15, 1973, could proceed without the delay of an impact statement. FHWA also received permission to proceed with certain "emergency" activities, such as right-of-way acquisition where failure to acquire would lead to hardships for the residents or increased costs for the state. Had plaintiff prevailed in court, these activities could have been delayed pending preparation of environmental impact statements.

It is more difficult to measure the achievements of the Tiemann settlement against what the plaintiffs would have received had they prevailed on the merits than it has been with the settlement agreements discussed above, since more than one federal project was involved, and no specific design changes were made in any projects. However, it should be noted that even if the plaintiffs had prevailed on the merits, there would have been no provision for a rational, uniform criterion regarding the type of highway project authorization to which NEPA should apply; nor would there have been any provision for public notice and participation in the division engineer's decision as to whether an impact statement should be prepared. In its tidying up of FHWA's authorization procedures [4 ELR 50010] and its opening up of these procedures to the public, the Tiemann agreement clearly exceeded the relief that plaintiffs could have obtained from a favorable judicial interpretation of NEPA.

b. Forces Working Towards Settlement

In each of the settlements discussed above, there were certain factors working towards the form of agreement which ultimately took shape. This section will attempt to evaluate the relative importance of these factors in bringing about the specific agreements.⁴³

i. Objectives of the plaintiff(s).

The six-point program drawn up by the plaintiffs in the Cove Point case and the specific desire of the Schlesinger plaintiffs for a closed-cycle cooling system required concessions by the private companies only; neither an environmental impact statement nor any other governmental action was called for. Thus these plaintiffs eliminated the need to bargain with the federal government, the opponent who proved the most obstinate in the other two cases involving private parties as well as the government.

On the other hand, plaintiffs in the Peterson case were not as sure as were the Cove Point or Schlesinger plaintiffs about which design or program changes they wanted made. What they wanted was an impact statement which would sift through the technical body of knowledge and opinion about shipbuilding and oil pollution and identify the most preferable designs from both an environmental and economic standpoint. In order to get an impact statement, they had to deal with the federal government.

San Francisco Tomorrow falls within neither of the above two categories. A divergence of goals between various of the plaintiffs (some wanted the redevelopment project terminated and others merely wanted design changes) made negotiations with private parties over specific changes difficult. Plaintiffs were fortunate that the local agency was willing to prepare an impact statement; no such intermediate public agency was available to the Peterson plaintiffs.

ii. Presence of absence of federal government in negotiations.

The plaintiffs in four of the cases discussed above found the federal agency the most difficult party to negotiate with, and in San Francisco Tomorrow, the Cove Point case and Schlesinger, settlements were reached in spite of the federal agency. There are two fundamental reasons for this consistent pattern of federal resistance to settlement. First, no one federal negotiator has authority to commit his agency (except for the administrator, who rarely conducts negotiations and who is himself subject to the Office of Management and Budget or White House review). This means that all proposals must be passed up through layers of officials, and each successive layer may not be familiar with either the case or the negotiations that have led to the proposals. Second, the government bureaucracy has a different stake in the outcome of the suit from that of a private contractor or industry. It is true that delay of a project due to an injunction means increased costs to the government, as well as the private interests. But the private company is often holding money at high interest rates or on the condition that the project begin (or be completed) by a certain date, while the funds that the agency receives from Congress are interest-free. It was those private defendants with substantial external financial obligations (Columbia Gas, National Steel and Shipbuilding, Aeron Shipping Lines) that most desired a quick settlement. However, what the agency officials are worried about is not that the agency will forfeit credit or run high interest payments, but that they will draw the wrath of Congress on themselves if they voluntarily halt the project. These officials seem much more comfortable asking congressional committees for more funds if halts in the expenditure of these funds have been imposed by the court than initiated by themselves. This fear of congressional criticism on the part of the government negotiators created a tension between them and the private interests who desired a quick settlement, a tension that the plaintiffs in Peterson were able to exploit.

This view of the government as the most difficult party to budge towards settlement directly conflicts with the views of attorneys who see a NEPA lawsuit as part of a political program to change governmental policy. In these attorneys' eyes, the government would be more vulnerable to settlement pressure by environmental plaintiffs than would private interests. there is some evidence from the settlement of an environmental suit on the state level that this proposition is valid.⁴⁴ But this was a state [4 ELR 50011] suit, and although it may be correct to say that the state agency was more sensitive to the political pressures against its policies and thus more willing to settle than private interests, it may nevertheless be correct to say that both this governmental vulnerability and willingness may be weaker on the federal level. A federal agency may be more immune to environmentalist pressure than a state or local agency, particularly if the state or locality is in an area with a high concentration of organized environmentalists.

Moreover, it is not only the public agency or the large corporation that is vulnerable to political pressure — the environmentalists are vulnerable, too. The government, private concerns, and press can bring public pressure to bear on the conservationists to push them towards settlement. One of the arguments used by the plaintiffs' attorneys in Peterson in convincing their clients of the desirability of a settlement was that a compromise would make environmentalists appear to be reasonable, thus making the government and private interests more willing to consult and deal with them in the future.This desire not to appear fanatical is particularly strong when, as in Peterson or San Francisco Tomorrow, the grant of the injunction plaintiffs were asking for might cause largescale disruption and unemployment, particularly among minority groups.⁴⁵

This discussion of the role of the government in negotiations has not resulted in any clear-cut prediction of how a public agency will act or which pressures it will respond to. However, the experience of the plaintiffs in Peterson and San Francisco Tomorrow should warn environmentalist litigants either to seek a settlement in which no federal government action is necessary (i.e., no impact statement) or to devise methods of exploiting any differences that might arise between the agency and interested private parties. For example, should negotiations reach an impasse with the private defendants agreeing to a settlement formula to which the agency refuses to accede, plaintiffs and the private defendants might submit their agreement to the court as a proposed order. The court might then tailor any injunction to fit the terms agreed to by plaintiffs and the private defendants. (The government would then be the only party arguing the equities against the injunction.) Or perhaps, if the judge felt that the agency's position was unreasonable, or the result of reluctance voluntarily to restrain itself, he might hold a conference in chambers in which he could exert his influence towards a settlement.

iii. Complexity or uncertainty of legal issues.

The parties would presumably be most anxious to settle the case in which the legal issues were complex or where the courts had divided over or ill-defined these issues. This assumption does seem to fit in the Peterson case, where the issues of laches⁴⁶ and the dispute over the significance of the tanker subsidy program's impact on the environment made any reliable prediction of what the court would do impossible. But in the Cove Point case (as well as the position of National Steel and Aeron Shipbuilding in the Peterson case), a private company felt compelled immediately to free its undertaking from any pending litigation whether or not they thought they could prevail on the merits. And in San Francisco Tomorrow, HUD was unwilling to negotiate even though it was extremely unclear whether its defenses would prevail in court.⁴⁷

The Tiemann agreement contradicts this proposition. Previous court decisions on the sole question of law involved in that case unanimously favored plaintiffs. Yet they preferred to settle rather than pursue their case to what would have probably been a favorable judgment. This state of affairs raises serious questions about the plaintiffs' perceived efficacy of a NEPA victory.

iv. The stage of construction.

Generally, the price of settlement for the environmentalists was an agreement to suspend NEPA's application to work which had already begun or for which substantial financial commitments had been undertaken. In both Peterson and San Francisco Tomorrow the extent to which NEPA should apply to existing work on a federal project was the central topic of negotiation. In the Peterson case, plaintiffs and the private defendants spent many hours discussing which ships could be considered "under construction" and which were only in the design stage, with the defendants arguing that even a ship in the design stage could not practically be altered. The settlement's Economic Feasibility Analysis turned this question over to the government to referee, subject to certain procedural requirements. (Some ships were even exempted from the Feasibility Analysis (See 4 ELR 20299).) In San Francisco Tomorrow, the Redevelopment Agency was loath to delay the part of the project which was nearly complete; in the end, plaintiffs agreed that the impact statement would only cover the remainder of the project.⁴⁸

[4 ELR 50012]

The Cove Point case and Schlesinger are in line with the pattern of the other two cases. The plaintiffs in Cove Point did not have to make as many concessions as did the plaintiffs in the other two cases, but this seems partly due to the fact that the gas companies had not sunk large amounts of capital into the above-water pipeline, and partly due to the threat that the project's delay would jeopardize substantial economic expectancies. Similarly, the cost of further delay to the utilities in Schlesinger outweighed the costs of the changes plaintiffs were asking for.

As a further illustration of this pattern, the Tiemann agreement excluded from its reach those projects on which grading or drainage had already begun.

By far the most influential factor tending towards settlement was the absence of the federal agency as the critical party to any settlement. The other factors discussed in this section draw their importance primarily from how strongly they affected the role of the federal agency in negotiations. What the plaintiffs' objectives are, whether plaintiffs want an impact statement or specific design changes, matters in that it restricts or permits a settlement with the private (or non-federal public) parties alone. Other issues, such as how much existing work should be exempted from an impact statement or design change, seem capable of compromise once the federal agency has been removed as the critical negotiating partner.

II. Attorney-Client Relations During Settlement Negotiations

There were distinct differences in the degree of client participation in the negotiations to settle the cases discussed above; in fact, there were even differences between cases with the same client. The two cases with the highest degree of client involvement in the negotiating process were the Cove Point case and San Francisco Tomorrow. In the Cove Point case, the clients set forth the settlement terms that would be acceptable to them before commencement of the suit. In addition, representatives of both the national Sierra Club and the local organizations attended the negotiating sessions. In San Francisco Tomorrow, law representatives of the plaintiffs not only attended the negotiating sessions, but, according to the attorney, J. Anthony Kline, actually assisted in conducting them. Kline felt that his clients' active role was effective in achieving settlement both because the clients' leadership in negotiations gave the defendants an impression of their political strength and cohesion and because the clients' participation in negotiations made them less likely to reject the eventual agreement.

The Peterson case could be considered the counterpoint of the participation model of Cove Point and San Francisco Tomorrow. Although representatives of the plaintiffs did attend both settlement negotiations and the sessions where negotiating strategy was planned, these representatives were attorneys, and not, as in the other two cases, leaders of conservation societies. They participated in the negotiating sessions as attorneys, suggesting drafting alternatives and insuring that the Peterson settlement did not jeopardize future litigation. Unlike Cove Point or San Francisco Tomorrow, these representatives did not by their presence evidence a mass awareness or organization which defendants would be likely to fear — in the defendants' eyes, the plaintiffs and their attorneys were probably interchangeable. Unlike the attorneys in the Cove Point case and San Francisco Tomorrow, who both declared themselves unwilling to advise their clients on policy matters, the basic similarity between clients and attorneys in Peterson made the attorneys' involvement in the clients' policy decisions easier and more legitimate. Given the similar interests of both client and attorney in Peterson, discussions about the pros and cons of a particular settlement easily became discussions about how the settlement might affect future environmental litigation, the relations between the environmentalists and the government, or the public's image of the environmentalist movement.

The degree of client involvement in the negotiation of the settlements of these three cases seems to depend on the structure of the client's organization. Smaller membership, litigious organizations such as the Environmental Defense Fund or the Natural Resources Defense Council place fewer restrictions on their attorneys, while the larger conservation organizations, such as the Sierra Club, whose activities range beyond the lawsuit, impose substantial limits on their attorneys' flexibility. An attorney for the former type of organization will be dealing with clients who are by and large lawyers and who are primarily concerned with the settlement's effect on future lawsuits. This attorney is thus as competent as the client both to act for the client and to discuss the relevant "policy" considerations. An attorney for the latter type of organization, however, deals with a client which seeks its objectives through political organization and lobbying, as well as litigation, and his professional capacity may not give him the competence in the eyes of the client to deal with these kinds of policy considerations.

However, the client-attorney relationship in the Point Arena case⁴⁹ (not a NEPA case) undercuts this analysis. In that case, the attorney for the Sierra Club, David Pesonen, had been the Chairman of the Club's Task Force on nuclear power plants and had conducted previous Club litigation dealing with nuclear plant siting questions. Although Pesonen declared that environmentalist lawyers should defer to the client on "political matters" (in his words anything which might affect the client's political position), he admits that he was given virtually unlimited discretion in the conduct of the Point Arena suit due to the expertise and recognition he had gained from his previous suits and positions within the [4 ELR 50013] Club.

The Point Arena case shows that the pattern of attorney-client relationship can vary widely between cases with similar organizations as plaintiffs, and even between cases with the same organization as plaintiff (the Sierra Club was a plaintiff in the Cove Point case and San Francisco Tomorrow as well as the Point Arena case). It suggests that the result in the cases discussed above may be due more to the expertise of the attorney in the subject-area of the suit (both Hallman and Pesonen are experts in the energy field) than to the client's size or internal structure.⁵⁰ Alternatively, the influential factor may be the number of clients whose interests must be reconciled — a single client, as in Point Arena, or a small number of them, as in Peterson, may be willing to leave negotiating up to their attorney, whle a larger coalition, such as in the Cove Point case or San Francisco Tomorrow, may wish to nail down policy matters among themselves before the attorney begins to negotiate, lest the attorney end up advancing the position of one group rather than another. In any case, if would be risky to make any general statements about attorney-client relationships on the basis of the small number of environmental cases that have been settled so far.⁵¹

III. The Prospects for Attorneys' Fees and Declaratory Judgments from Settlements

A. Attorneys Fees.

None of the settlement agreements provides for the payment of attorneys' fees to the plaintiff. The question of whether "public interest" lawyers should seek attorneys' fees from a settlement sparked considerable disagreement amont the attorneys who handled the cases which ended in settlement. The lawyer who conducted the Cove Point negotiations, Ron Wilson, declared that he made a conscious choice not to ask the gas companies for attorneys' fees because he feared people both inside and outside the environmental movement might think that he had settled to get exaggerated fees or that he had betrayed his clients' best interests to get them. In Wilson's words, the "sight of a lawyer walking away from a settlement with fat attorneys fees might seriously hurt the image of the public interest bar." On the other hand, J. Anthony Kline, and David Pesonen, who represented the Sierra Club at the Point Arena suit, both felt that a lawyer representing environmental groups should ask the defendants for attorneys fee as part of a settlement.

Even apart from questions of ethics and of public image, there may be considerable legal obstacles to the achievement of attorneys' fees through a settlement agreement. Of course, where the plaintiff withdraws or dismisses his action in return for concessions by the defendant, there does not appear to be any way for the courts to impose limits on the recovery of attorneys' fees or on their amount. Since the court does not have to approve the settlement, the parties are free to negotiate fees among themselves. However, where the parties submit the settlement agreement as a proposed order (as in Peterson) or where they wish the court to retain jurisdiction to enforce the agreement, any fees payment by either party would be subject to review by the court. Whether a court can approve attorneys' fees under these circumstances is an open question.

Until the Supreme Court's decision in Mills v. Auto-Lite Co.,⁵² it was not considered appropriate to award attorneys' fees unless the cause of action sued upon was based on a congressional statute explicitly authorizing them. In Mills, the Supreme Court excepted from this rule those suits which were not based on statutes specifically authorizing attorneys' fees but which had succeeded in vindicating a strong congressional policy. Based on the Mills decision, one district court has required state agencies to pay attorneys fees to successful plaintiffs in a NEPA case,⁵³ and at least one other court has remarked on the favorable implications of the Mills decision for the recovery of attorneys' fees in NEPA litigation.⁵⁴

[4 ELR 50014]

However, a trial court's authority to award attorneys' fees to a successful plaintiff in a NEPA suit is clouded by statute as well as some court interpretations of NEPA For example, 28 U.S.C.A. § 2412⁵⁵ bars both federal and state courts from awarding attorneys' fees against the United States government except where Congress has explicitly provided for such an award. This statute has been applied in a NEPA case to bar recovery of costs from the U.S. Department of Transportation (DOT) by plaintiffs who had successfully sought an injunction against the construction of a highway until DOT prepared an impact statement.⁵⁶ Thus, a successful NEPA plaintiff seems barred from recovering attorneys' fees from the very agencies upon which NEPA imposes its obligations.Although it is possible that a court's approval of attorneys' fees which the government agreed to pay would not violate § 2412, the possibility that the statute still applies is likely to reinforce a federal agency's reluctance to agree to pay plaintiffs any attorneys' fees.

At the same time that § 2412 blocks recovery of attorneys' fees from federal agencies, the fact that NEPA only binds such agencies has been invoked by a court to justify denying recovery of attorneys fees from state defendants in a NEPA suit where the state defendants had "simply relied upon a federal regulation which attempted to postpone the effective date of (NEPA)."⁵⁷ In denying recovery from the state defendants, the court stated:

(NEPA) is a mandate for federal agencies. It is their action that must meet certain statutory standards. While the action of a federal agency is often taken in cooperation with a state agency, the entity primarily responsible for the 'major federal actions' for which the Act requires impact statements is the federal agency.

This reasoning seems to apply to private defendants who participate in a federal project after the federal agency has, by regulation, declared either that NEPA does not apply to the project or that it has been complied with. To receive attorneys' fees a plaintiff would have to show actual lack of reliance by the private defendants on the government (i.e., that these parties believed that NEPA did apply but were willing to take the risk that no suit would be brought) or to secure some finding of bad faith in the government's resistance to his claim which could be imputed to the private defendants. Plaintiff's chances of success on either of these claims would not seem to be strong.

The two approaches to attorneys' fees from non-federal parties in NEPA suits represented on the one hand by La Raza Unida, where state defendants were required to pay fees, and on the other by Committee to Stop Route 7, where the court found an award of attorney fees against state defendants to be inappropriate under NEPA, seem to be mutually exclusive. This may not be true, however, if the Committee to Stop Route 7 decision is interpreted as only requiring an actual lack of reliance or negligent reliance by the non-federal parties on the federal defendant's NEPA position rather than a showing that the non-federal parties' opposition to plaintiffs' claims was based on bad faith. If such an interpretation is placed on that case, it can be squared with La Raza Unida, because even though the latter case specifically found that there had been no bad faith on the part of the state defendants, the court nevertheless found that these defendants had independently opposed the federal agency's compliance with both NEPA and the federal housing statutes.

However, if these two approaches are viewed as contradictory, there are persuasive arguments to be made in support of both positions. It does seem unfair to award counsel fees against state or private defendants when these defendants cannot themselves fulfill the requirements of NEPA and when they exercise little or no control over whether the federal agency complies with these requirements. Nevertheless, the reasoning of Committee to Stop Route 7, by first restricting plaintiffs to seeking attorneys' fees only from the federal agency and then finding that § 2412 immunizes the federal agency from paying them, eliminates attorneys' fees altogether in an area of litigation deeply dependent on private enforcement.

Another complication which arises when a public interest law firm seeks attorneys' fees in a successful NEPA lawsuit are the Internal Revenue Service's rulings concerning such fees. The IRS has stated that a public interest law firm whose receipt of attorneys' fees is not in compliance with IRS guidelines covering attorneys' fees risks losing its tax-exempt status.⁵⁸ However, the IRS has not yet issued any such guidelines, a situation which has forced private interest law firms to seek private rulings from the IRS concerning attorneys' fees. Although it has been reported that the IRS will soon issue general guidelines in this matter, it is not clear whether these guidelines will cover attorneys' fees awarded or received on the basis of a settlement agreement. Should the IRS not provide for the receipt of attorneys' fees as part of a settlement, it [4 ELR 50015] would constitute an incentive for a public interest law firm to pursue a case through the courts rather than to settle it.

It is not clear to what extent the obstacles to the recovery of attorneys' fees by successful NEPA plaintiffs also block their recovery as part of a settlement of a NEPA case. An agreement by a federal agency to pay attorneys' fees would probably avoid the prohibition of § 2412 even if a court sanctioned the agreement, and an agreement to pay attorneys' fees by state or private defendants would probably avoid the reasoing of the Commttee to Stop Route 7 decision, again even if a court sanctioned the payment of fees. However, as far as public interest law firms conducting environmental litigation are concerned, the I.R.S.'s position on the recovery of attorneys' fees by judgment seems to apply even more forcibly to fees obtained by negotiation.

A. Declaratory judgments (admissions).

None of the stipulations of settlement including an admission by a federal agency that it had violated NEPA; defendants merely pledged to follow NEPA (or some substitute for it) in the future. The reasons for seeking an admission are not directly related to the suit being settled — the court's jurisdiction over any action to enforce the agreement would probably be based on the agreement and not on NEPA, and the government's admission of past NEPA violations would be irrelevant to the question of whether it had breached the agreement's terms. What a declaration of NEPA's applicability would do, especially in a case that involves novel or complex questions of law, would be to enable future environmental litigants to use the settlement as a precedent. (The settlement would have to be entered as the court's order to be binding on all federal agencies, but even if not entered as an order it would appear to bind the agency that signed it in future cases where the agency was a defendant.) The very remoteness of the benefits of a declaratory judgment mitigates against its being a sina qua non of settlement. However, an attorney who had not settled a NEPA case, David Pesonen of the Sierra Club, said that he would be extremely reluctant to sign any agreement that did not include an admission by the governmental defendant.

IV. The Results of Settlement.

The consequences of settlement varied among the cases discussed above, but the overall results appear to favor the environmentalists.

Under the terms of the Peterson settlement agreement, the Maritime Administration (the subdivision of Commerce charged with formulating and implementing regulations concerning any ship construction which the Maritime Subsidy Board subsidizes) was to prepare an Economic Feasibility Analysis. This analysis was to consider the impact of certain design changes on the global competitiveness of some of the ships already contracted for under the subsidy program. The Economic Feasibility Analysis ultimately found that the addition of any anti-pollution design changes, save for inert gas systems, would unduly burden the competitiveness of the subject vessels, and therefore recommended to the Maritime Subsidy Board that such changes not be mandated.

The Maritime Administration (MarAd) was also required by the agreement to prepare a full environmental impact statement on the remaining ships under subsidy, as well as on all future subsidies under the shipbuilding program. The final version of this statement, which also did not require any anti-pollution design changes in subsidized vessels except for gas inerting systems, was upheld as adequate by an order of the Maritime Subsidy Board on August 30, 1973,⁵⁹ Plaintiffs did not appeal the adequacy of the statement.

The statement did order the following changes in the subsidy program: MarAd's pollution abatements specificiations, which previously had been advisory only, became mandatory for all subsidized vessels; the public (and other federal agencies) were permitted to petition the Maritime Subsidy Board for revisions in these pollution abatement regulations;⁶⁰ MarAd committed itself to the enforcement of all international and domestic pollution abatement requirements on subsidized vessels and to the supplementation of these requirements when necessary; and MarAd also promised to consider granting financial assistance for reconstruction of subsidized tankers to incorporate anti-pollution features.

In the eyes of plaintiffs' attorneys, the final impact statement had the following negative features:⁶¹ it dismissed the alternative of terminating the subsidy program altogether; it rejected the alternative of postponing the program to await new developments in pollution abatement technology, it rejected the alternative of subsidizing only LNG⁶² (Liquified Natural Gas) vessels; it rejected [4 ELR 50016] the development of major anti-pollution design changes prior to the implementation by the Coast Guard of the Ports and Waterways Safety Act;⁶³ and, finally, it found that the subsidization of large oil tankers was necessary to achieve the objectives of the subsidy program.⁶⁴

The attorneys in the remaining settlements reported that, in general, the defendants in their cases had complied with the terms of their agreements. Plaintiffs' attorneys in Cove Point⁶⁵ and Isaac Walton League v. Schlesinger⁶⁶ stated that the private parties to the agreement (there were no government signatories) had followed the schedules set forth in their respective agreements. Counsel for plaintiffs in the San Francisco Tomorrow case reported⁶⁷ that the environmental impact study undertaken by the Oakland Redevelopment Agency had resulted in several changes in the project as originally proposed, including an agreement by the authority to build 300 additional low income housing units and to reduce the amount of parking space to be cleared. Kline also reported that a lawsuit filed against HUD for funding two similar projects in Berkeley and San Francisco without first issuing an impact statement resulted in the denial of a preliminary injunction in the District Court.⁶⁸ The District Court's decision was upheld on appeal⁶⁹ as to the Berkeley project, but reversed as to the San Francisco project, and plaintiffs were able to reach an understanding with HUD whereby HUD agreed to prepare an impact statement regarding the San Francisco project. Plaintiffs have petitioned the Supreme Court to review the Ninth Circuit's affirmance of the District Court's opinion concerning the Berkeley project.

The Tiemann settlement, involving as it did not one project but a congressional program involving thousands of projects, depended upon the vigilance and action of local environmental groups across the nation to ensure that the (federal) defendant complied with the settlement's terms. Consequently, plaintiff's counsel took great pains to publicize the terms o the settlement and what local groups could do to enforce it, and also arranged for workshops to be held periodically among National Wildlife Federation members to discuss what had been done and what could be done, to enforce the agreement. The headquarters of the NWF in Washington, D.C. reported to the author that since the settlement in July, 1973, they have received at least two dozen phone calls from various Federation members across the country inquiring as to what action could be taken by private citizens under the agreement.⁷⁰ The NWF headquarters also declared that such inquiries had resulted in the filing of two suits against the Federal Highway Administration.

Conclusion

The parties involved in the NEPA settlements discussed in this article (the only settlements of NEPA suits which the author was able to discover) were remarkably consistent in their tailoring of NEPA to fit their particular needs. These parties were also remarkably consistent in their ability to reach settlement in the face of a federal agency's unwillingness or extreme reluctance to compromise. This article has asserted that environmentalist plaintiffs can often achieve more through settlement than they can through victory in court, and has tried to explain the peculiarities of NEPA which lead to this result. Of course, there are still too few settlements to elevate the ones that have occurred to the level of a predictable pattern. But the potential of these particular settlements is such that environmentalists should watch the record of the defendants' compliance — or the plaintiffs' fortunes in forcing them to comply — with the same degree of attention that they pay to judicial decisions on the scope of NEPA.

Appendix A

SETTLEMENT AGREEMENT

AGREEMENT made this 10th day of February, 1972, by the between SAN FRANCISCO TOMORROW, THE SIERRA CLUB, THE ENVIRONMENTAL DEFENSE FUND, THE MODERN TRANSIT SOCIETY, THE OCEAN VIEW COMMITTEE, BERKELEY ECOLOGY ACTION, DARRYL AND TERESA MARRONE HENRIQUES, husband and wife, WILLIAM WALKER, JR., JANE VEEDER, CHARLES KIMBALL, CHARLES BAZZELL, JOHN B. LAMBERT (hereinafter "Plaintiffs") and REDEVELOPMENT AGENCY OF THE CITY OF [4 ELR 50017] OAKLAND (hereinafter "ORA"). This Agreement is for the purpose of recording a settlement between Plaintiffs and ORA with respect to that certain federal action entitled San Francisco Tomorrow, et al. vs. George Romney, et al., Civil Action No. C-72-65 RHS (U.S. Dist. Ct., N.D. Calif.) and is made in consideration of the mutual promises and covenants herein set forth.

The parties hereto agree as follows:

FIRST:

Without respect to the legal issues raised in the above action, ORA hereby agrees in principle that an environmental impact statement of the type described in Section 102(2)(C) of the National Environmental Policy Act of 1969 (hereinafter the "NEPA") should and will be prepared with respect to the City Center Urban Renewal Project Area (hereinafter variously referred to as the "Project" and the "Project Area") except for a limited portion of said Project area described in paragraph TENTH hereof. The Project Area is located in the City of Oakland, County of Alameda, State of California and is bounded on the north by 14th Street, on the south by 11th Street, on the east by Broadway and on the west by Clay Street. ORA agrees that the Project will have a significant (but not necessarily adverse) impact on the quality of the human environment. It has always been and continues to be the intent of ORA that its activities be designed to improve the quality of the urban environment.

SECOND:

ORA agrees to immediately undertake preparation of a draft environmental impact statement pursuant to Section 102(2)(C) of the NEPA and implementing Guidelines issued by the Council on Environmental Quality (hereinafter "CEQ") and set forth in 36 Fed. Reg. 7274 (1971).

THIRD:

ORA agrees that one (1) representative each of the San Francisco Bay Area Chapter of the Sierra Club, the Environmental Defense Fund and the Modern Transit Society will be permitted to participate in preparation of the draft environmental impact statement described in paragraph SECOND hereof.

FOURTH:

Upon completion by the ORA of the draft environmental impact statement described in paragraph SECOND hereof, the ORA will submit said draft to, and solicit written comments thereon from, the CEQ, the Regional Water Quality Control Board (San Francisco Bay Region), the Bay Area Air Pollution Control District, the Oakland Planning Commission, and any other appropriate local, regional, state or federal agencies which have jurisdiction by law or special expertise with respect to any environmental impact involved. ORA will allow said agencies no less than sixty (60) days to evaluate the aforesaid draft and prepare their written comments. During said sixty (60) day period, the public, including environmental organizations and interested community groups whose members reside in the San Francisco Bay Area will, upon request, be provided copies of the aforesaid draft free of charge by ORA. ORA will give due consideration to written comments on said draft submitted to it by members of the public, including environmental organizations and other community groups as above described. ORA further agrees that said draft statement shall include descriptions and evaluations of feasible alternatives to or modifications of the proposed Redevelopment Plan for the Project; the draft statement shall also include assessment of the environmental impact of construction activities permitted to commence pursuant to paragraph TENTH hereof.

FIFTH:

Not later than three (3) months after expiration of the sixty (60) day period described in paragraph FOURTH hereof, ORA shall begin preparation of a final environmental impact statement that meets the requirements of Section 102(2)(C) of the NEPA and implementing Guidelines issued by the CEQ set forth in 36 Fed. Reg. 7724 (1971), and responds to responsible written comments submitted to ORA by the agencies, organizations and groups hereinabove described. Said final environmental impact statement shall include descriptions and evaluations of feasible alternatives to or modifications of any redevelopment plan proposed for the Project; the final statement shall also include assessment of the environmental impact of construction activities permitted to commence pursuant to paragraph TENTH hereof.

SIXTH:

Not later than six (6) months after expiration of the sixty (60) day period described in paragraph FOURTH hereof, ORA shall submit a completed final environmental impact statement to the United States Department of Housing and Development (hereinafter "HUD"), the CEQ, and all appropriate local and regional agencies which have jurisdiction by law or special expertise with respect to any environmental impact involved.

SEVENTH:

Except as provided in paragraph TENTH hereof, ORA or its assignees shall not permit commencement of any new construction in the Project Area whatsoever until thirty (30) days after submission of the final environmental impact statement to the CEQ.

[4 ELR 50018]

EIGHTH:

ORA represents and warrants that the number of persons permanently residing in the Project Area does not exceed 45; that decent, safe and sanitary relocation housing that meets the requirements of 42 U.S.C. § 1451(c)(1) is available that meets the needs of all persons currently residing in the Project area; and that no persons will be displaced from the Project Area who have not been first provided such decent, safe and sanitary housing.

NINTH:

ORA agrees that it will fully comply with all applicable requirements of the NEPA with respect to any future modification or enlargement of the present boundaries of the Project area.

TENTH:

Plaintiffs agree that ORA may immediately proceed to convey to the Grubb & Ellis Development Company or its assignees, or to the City of Oakland or its assignees, the two (2) block portion of the Project area roughly bounded by Broadway, 14th Street, Clay Street and 13th Street for the purpose of developments on said property of commercial structures and parking facilities. Grubb & Ellis Development Company or its assignees, and the City of Oakland or its assignees, may immediately proceed to construct on said property commercial structures collectively containing not more than 350,000 square feet of office or other commercial space and parking facilities for not more than 950 automobiles. Until compliance by ORA with all provisions of this Agreement, ORA shall permit no construction in the said two (2) block portion of the Project Area except as provided in this paragraph TENTH:

ELEVENTH:

Plaintiffs agree that ORA may continue to acquire properties located in the Project area and to demolish structures thereon after prior compliance with all representations and warranties set forth in paragraph EIGHTH hereof.

TWELFTH:

Plaintiffs agree that if, after the date of this Agreement, but prior to compliance by ORA with their duties under this Agreement, HUD is required by a court of law or independently agrees to comply with the requirements of Section 102(2)(C) of the NEPA, with respect to the Project HUD's responsibilities under the NEPA will supersede those of ORA under this Agreement, except that ORA shall not commence any new construction in the Project area, except as provided in paragraph TENTH hereof, until and unless HUD fully complies with the requirements of Section 102(2)(C) of the NEPA.

THIRTEENTH:

Plaintiffs agree that no later than one (1) week after the date hereof they will file all court papers necessary to dismiss the above referenced federal action entitled San Francisco Tomorrow, et al. vs. George Rommey, et al., with prejudice, insofar as said action applies to ORA and the Project. Said dismissal does not constitute a waiver of Plaintiffs' right to commence a new action based on alleged legal insufficiency and inadequacy of a final environmental impact statement for the Project pursuant to Section 102(2)(C).

FOURTEENTH:

Plaintiffs agree not to file any future action seeking to enjoin or to in any way challenge the limited construction activities described in paragraph TENTH hereof.

This Agreement was made and entered into the day and year first above written.

Appendix B

FIRST STATUS REPORT ON IMPLEMENTING THE SETTLEMENT AGREEMENT IN NATIONAL WILDLIFE FEDERATION v. TIEMANN

By Robert M. Kennan, Jr., Counsel, National Wildlife Federation

This is the first in a series of status reports for interested citizens and citizens' organizations on implementing the settlement agreement in National Wildlife Federation v. Tiemann. It is intended to supplement my memorandum of July 30, 1973.

A. The FHWA Workshops.

The FHWA'S Washington office recently arranged two "workshop" meeting of regional and division (state) office personnel to discuss the settlement agreement. One was held in Atlanta, Georgia on July 31; the other was held in Denver, Colorado on August 2. I attended both meetings as an observer. Before turning to some observations based on those meetings, it is necessary to describe an additional feature of the FHWA'S procedures for implementing § 102(2)(c) of NEPA: the "negative declaration."

B.The "Negative Declaration."

The requirements for preparing environmental statements in § 102(2)(c) of NEPA are applicable to "major Federal actions significantly affecting the quality of the human environment." Most proposals for federal-aid highway construction are in this category, but some may not be. PPM 90-1 therefore sets forth rules for identifying [4 ELR 50019] proposed federal-aid highway construction which is, and is not, a major federal action significantly affecting the quality of the human environment.

These rules are found in Appendix F to PPM 90-1. My memorandum of July 30 quoted paragraphs 2 and 3 of Appendix F, which identify types of proposed highway construction deemed major federal actions significantly affecting the quality of the human environment. Paragraph 4 of Appendix F lists the following types of "highway improvements … not likely to have significant impacts upon the environment:"

a. Signing, marking, signalization and railroad protective devices.

b. Acquisition of scenic easements,

c. Modernization of an existing highway by resurfacing; less than lane width widening; adding shoulders; auxillary lanes for localized purposes (weaving, climbing, speed-changing, etc.)

d. Correcting substandard curves.

e. Reconstruction of existing stream crossings where stream channels are not affected,

f. Reconstruction of existing highway/highway or highway/railroad separations,

g. Reconstruction of existing intersections including channelization,

h. Reconstruction of existing roadbed (existing curb to curb for urban cross sections), including minor widening, shoulders and additional right-of-way,

i. Rural two-lane highways on new or existing location which are found to be generally environmentally acceptable to the public and local, State, and Federal officials.

PPM 90-1 also sets forth a procedure for documenting a determination that particular proposed federal-aid highway construction will not significantly affect the quality of the human environment. This procedure requires the FHWA division engineer to "concur" in a "negative declaration" prepared by the state highway agency.

Paragraph 3.d of PPM 90-1 defines "negative declaration" as "a written document in support of a determination that, should the proposed highway section improvement be constructed, the anticipated effects upon the human environment will not be significant." Paragraphs 6.m and 6.n of PPM 90-1 prescribe the procedure for preparing a "negative declaration:"

m. Negative declarations shall be prepared by the HA [state highway agency] when the anticipated impact of construction and operation of a highway section is determined to be not significant (not of major importance). Appendix F outlines several types of highway section improvements which may warrant a negative declaration [paragraph 4 of Appendix F, quoted above]; however, each highway section should be evaluated to determine whether its impact is significant. Their purpose is to include in the written record evidence that the highway section was evaluated and a determination made that it would have no significant effect upon the quality of human environment. They should be based on the information developed during the highway study and coordination with local, State, and Federal agencies.

n. A negative declaration need not be circulated for comment, but its availability should be included in the notice of the public hearingor opportunity for public hearing. The FHWA division engineer shall concur in the negative declaration before he approves the location or design, whichever is appropriate.

Two points need to be made about the "negative declaration." First, PPM 90-1's procedure of having the division engineer "concur" in a negative declaration prepared by a state highway agency is open to serious question. NEPA does not authorize any federal agency to give away its responsibility to determine which proposals coming before it for approval are "major federal actions significantly affecting the quality of the human environment." For this reason, in our opinion, the FHWA has no authority to delegate this responsibility to a state highway agency. Unless the FHWA division engineer has the professional expertise necessary to review a state highway agency's negative declaration independently and in fact make the state's determination his own, he should properly be very cautious about concurring in the state's determination that particular proposed highway construction would have no significant effect upon the quality of the human environment.¹

Second, the FHWA division engineer proceeds at his peril when he determines that any proposed federal-aid highway construction is not a "major federal action significantly affecting the quality of the human environment." The United States Court of Appeals for the Second Circuit has held that such a determination must be based on a review of the proposed action in light of at least the following two relevant factors: "(1) the extent to which the action will cause adverse environmental effects in excess of those created by existing uses in the area affected by it, and (2) the absolute quantitative adverse environmental effects of the action itself, including the cumulative harm that results from its contribution to existing adverse conditions or uses in the affected area."² The law clearly requires more than a comparison of the state highway agency's proposal against a checklist of the kind found in paragraph 4 of PPM 90-1. Indeed, the "quantification" of adverse environmental effects under the Second Circuit's ruling seems to require as much informed analysis as processing an environmental statement.

C. Observations on the FHWA workshops.

We now turn to two matters of particular interest that came up at the FHWA's recent workshops on implementing the settlement agreement.

[4 ELR 50020]

1. Opting out of the settlement agreement.

I was informed on August 2 that the division engineers in FHWA Region 6 (Arkansas, Oklahoma, Louisiana, Texas, New Mexico), and Region 8 (Colorado, South Dakota, Montana, Utah, North Dakota, Wyoming), and some other states will require either environmental statements or negative declarations to be prepared pursuant to PPM 90-1 for all proposed federal-aid highway construction covered by the settlement agreement. The settlement agreement's reassessment procedure will not be followed in those states, because there will be no projects coming before the division engineer for approval in those states which relate to a "major federal action significantly affecting the quality of the human environment" for which no environmental statement is being or has been prepared. Other FHWA regions and states may follow suit in opting out of the settlement agreement.

This development is consistent with both the letter and the spirit of the settlement agreement, so long as the negative declaration concept is not stretched beyond its obvious legal limits in order to avoid the settlement agreement's reassessment procedure. For the reasons indicated above, properly processing a negative declaration could be much more burdensome to FHWA division engineers than following the reassessment procedure.

On August 3, 1973, I requested the FHWA's Associate Administrator for Right-of-Way and Environment to keep NWF Resources Defense informed of each state which opts out of the settlement agreement. I also requested him to direct the FHWA division offices in those states to make available, free of charge on request, a copy of any negative declaration prepared after July 25, 1973 for proposed federal-aid highway construction which received design approval before February 1, 1971. I have every reason to believe that he will do so.

If you find that a negative declaration has been prepared for a proposed highway which you are concerned about and which you believe should be subject to an FHWA reassessment under the settlement agreement, you should request a copy of the negative declaration from the FHWA division engineer. If you disagree with his determination that the proposed highway construction would have no significant effect upon the quality of the human environment, you should write to him at once, explaining the reasons why you disagree. You or your attorney may wish to contact NWF Resources Defense for further assistance.

2. Benefits from preparing and processing an environmental statement.

The "FHWA criteria for NEPA Reassessment" (Exhibit A to the settlement agreement) require the FHWA division engineer to determine whether the costs of delaying the proposed highway clearly outweigh the benefits that might be derived from preparing and processing the environmental statement. The FHWA official conducting the workshops in Atlanta and Denver stated that he had no difficulty identifying the costs of delaying a proposed highway. But when he asked the environmental experts in his office what benefits might be derived from preparing an environmental statement, he encountered "stony silence." Notwithstanding his experts' lack of help, he bravely suggested some ways to consider the matter, such as looking at changes in the area since design approval was granted, and thinking about whether any changes in the highway's location and design were practically possible.

This FHWA official's remarks reflected what appears to be a prevailing view in the FHWA division offices: "If we admit that we might learn something more about a highway proposal by preparing and processing an environmental statement, we also admit that we don't already know more about it than anyone else and therefore haven't been doing our job."

NEPA prescribed a dose of self-effacing honesty for federal officials, including those in the FHWA. Congress recognized that admitting lack of knowledge about the environmental effects of constructing a federal-aid highway is a sign of maturity rather than incompetence. The benefits of preparing and processing an environmental statement come from exposing the proposal to a full range of views outside the FHWA and the state highway agencies — views which reflect values, priorities, and public responsibilities significantly different from those which have been institutionalized in the federal-aid highway program. The FHWA division engineer's job is to reconcile those views in the public interest. His professional responsibility is not threatened or diminished, but enhanced, by NEPA's requirements.

When you prepare comments on a proposed highway you are concerned about and wish to stress the benefits to be derived from preparing an environmental statement, you should emphasize the extent to which the division engineer can learn something new and important about the highway's impacts. You should point to specific subjects which you believe deserve more attention. Our experience suggests that the proposed highway's impacts on land use changes, for example, may need further consideration. In commenting, you should describe precisely what land use changes the highway is likely to encourage, and precisely why you consider these changes harmful. Be as helpful as you can. Only you may know what benefits can come from preparing and processing an environmental statement.

1. 42 U.S.C. § 4321 et seq. (Jan. 1, 1970).

2. Calvert Cliffs' Coordinating Committee, Inc., v. AEC, 1 ELR 20346, 449 F.2d 1109 (D.C. Cir. 1971).

3. Sierra Club v. Morton, 2 ELR 20192 (U.S. 1972).

4. Scherr v. Volpe, 2 ELR 20453, 336 F. Supp. 882 (W.D. Wisc. 1971).

5. The courts are in disagreement as to the scope of review of an agency's decision to proceed with a project afterd the final environmental impact statement has beenprepared. Some circuits take the position that no judicial review is permitted while others maintain that the agency's decision can be reversed if it is arbitrary, capricious, or made without considering the full range of environmental factors. The former position is taken by the Tenth Circuit, see National Helium Corporation v. Morton, 1 ELR 20478, 455 F.2d 650 (1971), and possibly by the Fourth Circuit, see North Carolina Conservation Council v. Froehlke, 2 ELR 20259, 473 F.2d 664 (4th Cir. 1972). The latter position - that the agency's post-impact statement is subject to the arbitrary and capricious standard - is accepted by the Second Circuit, see Scenic Hudson Preservation Conference v. Federal Power Commission, 1 ELR 20496, 453 F.2d 463 (2nd Cir. 1971), cert. denied 407 U.S. 296 (1972) (Douglas, J. dissenting); the Eighth Circuit, see Environmental Defense Fund v. Corps of Engineers, 2 ELR 20740, 470 F.2d 289 (8th Cir. 1972), cert. denied 409 U.S. 1072 (1973); and the District of Columbia Circuit, see Calvert Cliffs' Coordinating Committee v. U.S. Atomic Energy Commission, 1 ELR 20346, 449 F.2d 1109 (D.C. Cir. 1971).

Before a NEPA impact statement can be upheld in those circuits which apply the "arbitrary, and capricious" review standard, a court must first:

… determine if the agency reached its decision after a full, good faith determination and balancing of environmental factors. The court must then determine … whether the "actual balance of costs and benefits that was struck and arbitrary or clearly gave insufficient weight to environmental values" (citations omitted). 2 ELR at 20745, 470 F.2d at 300.

However, this limited scope of review only enables a court to overrule an agency's decision if the agency has ignored or unreasonably dealt with environmental factors and not if these factors have been fully considered but are, in the agency's opinion, outweighed by other factors. As stated by the Supreme Court in applying a law similar to NEPA:

Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, (1971); Environmental Defense Fund v. Corps of Engineers, 2 ELR at 20745, 470 F.2d at 300.

6. 4 ELR 20298.

7. In 1967 the tanker Torrey Canyon ran aground on a reef off Great Britain. Oil from its broken tanks blackened the adjoining beaches, and it finally had to be set afire by the Royal Air Force. For a summary of the effects of this oil spill, see Comment, Oil Pollution of the Seas, 10 Harv. Int. L. Journ. (1969) at 316-19.

8. Many of plaintiffs' later suggestions for anti-pollution design improvements came from a reading of Porricelli, Keith & Storch, Tankers and the Ecology, paper presented at Annual Meeting of the Society of Naval Architects and Marine Engineers (November, 1971), and Dillon, Ship Design Aspects of Pollution Abatement, paper presented at Chesapeake Section of Society ofNaval Architects and Marine Engineers, March 13, 1971.

9. Commerce's comments were made at a meeting at which the author was present.

10. The Center for Law and Social Policy is a Washingtonbased public interest law firm, founded in 1969, whose members represent individuals or organizations whose interests have traditionally been under represented in the (primarily federal) administrative process. The attorneys who represented the Environmental Defense Fund, the Natural Resources Defense Council and the National Parks and Conservation Association in the Peterson case were Robert M. Hallman, Esq. and Eldon V. C. Greenberg, Esq. The author worked as a research assistant for these two attorneys during the course of the litigation.

11. Environmental Defense Fund v. Peterson, Civil Action No. 2164-72 (D.D.C.)

12. The intervenors were: National Steel and Shipbuilding Co., Bethlehem Steel Co., Seatrain Shipping Corp., Aries Marine Shipping Co., Margate Shipping Co., Todd Shipyards Corporation, Aeron Marine Shipping Co. and the Shipbuilders Council of America. The unions representing shipyard workers also intervened as parties defendant.

13. See affidavits submitted by Seatrain Corporation and National Steel and Shipbuilding Corp. in support of their motion in opposition to plaintiff's motion for a preliminary injunction in EDF v. Peterson, Civil Action No. 2164-72 (D.D.C.).

14. See Note 13, supra.

15. Representatives from the shipping companies who had ordered these ships told plaintiffs' attorneys that their ships already had compartmentalized tanks and gas inerting systems, and that the ships were too small to make double-bottoms or lateral thrusters practical or worthwhile. Two of these ships were "OBO's" (Ore-Bulk-Oil) carriers, in which less oil would probably be carried than in a tanker of similar tonnage.

16. A double-bottom (or double-hull) structure, which entails an empty or water-filled area between the hulls, would both prevent oil leaking from the first hull and contaminating the water and make it more difficult for an external object to pierce through to the tanks, causing oil leakage.

17. The Economic Feasibility Analysis was to be completed within a maximum of forty-five to sixty days, while NEPA states that an environmental impact statement shall take at least ninety days to prepare.

18. With the exception of those firms discussed in Fn. 15, supra.

19. The Sierra Club was represented by its own counsel, James Moorman.

20. See Appendix A for the text of the settlement agreement.

21. Utilities Law Reporter, Federal (C.C.H.) para. 11,319 (1969) et seq. "LNG" is an abbreviation of "liquefied natural gas."

22. Utilities Reporter, Federal, para. 11,319 at 13, 406 (1969) et seq.

23. For this and other information on this controversy, the author is indebted to Ron Wilson, the plaintiffs' attorney.

24. In its review of the Examiner's impact statement, the Commission declared: "We are not required by NEPA to avoid all impairment of scenic beauty; we are required to reach our decision only after all factors are fully explored." Utilities Law Reporter, Federal, para. 11,319 at 13, 406 (1969) et seq.)

25. Hanly v. Mitchell, 2 ELR 20216, 460 F.2d 640 (2d Cir.), cert. den. 409 U.S. 990 (1972), appeal after remand sub. nom. Hanly v. Kleindienst, 2 ELR 20717, 471 F.2d 823 (2d Cir. 1972).

26. Both the diffuser discharge system and the alternative condenser system make use of public water (i.e., rivers) to cool the nuclear reactors, whereas the closed cycle system does not return the heated water to public waters to anywhere near the extent of the other two systems.In a closed cycle system, the heated water is dissipated either through cooling towers or a series of spray foundains.Ninety-five percent less heated water reaches public waters under a closed cycle cooling system than under either the diffuser discharge or alternative condenser system. See, e.g., Thermal Pollution: Status of the Art, Vanderbilt University (1969), National Technical Information Service Number 16130ENT.

27. Isaak Walton League of America v. Schlesinger, 2 ELR 20039, 337 F. Supp. 287, (D.D.C. 1971).

28. The agreement is reported at 2 ELR 20388.

29. These company estimates were reported to the author by plaintiffs' counsel, Joseph Karaganis.

30. The FHWA estimated that impact statements were not prepared for 700 to 1,000 highway projects which otherwise qualified for them because of the FHWA regulation exempting all projects for which design approval had been given prior to February 1, 1971. Kennan, Robert M. Jr., The Settlement Agreement in National Wildlife Federation v. Tiemann, 3 ELR 50085.

31. These regulations are contained in FHWA, Policy and Procedure Memorandum 90-1, 2 ELR 46106, 37 C.F.R. 21809 (Oct. 14, 1972).

32. "Design approval" was a concept introduced into FHWA's administrative procedure shortly before NEPA was enacted by Congress. FHWA, Policy and Procedure Memorandum 20-8 (Jan. 14, 1969), 23 C.F.R. ch. 1, pt. 1 (1972). The regulations implementing the design approval concept did not clearly spell out which federal authorizations had to be preceded by design approval, nor did it clearly define which highway projects the design approval requirement covered. For example, some question remained as to whether a division engineer could allow a state to proceed with right-of-way acquisition before he gave design approval to the project. See Peterson and Kennan, The Federal-Aid Highway Program: Administrative Procedures and Judicial Interpretation, 2 ELR 50001-50023.

33. There is one FHWA division engineer in charge of FHWA activities in each state. This officer approves federal spending on state-built highways in his state.

34. FHWA, Policy and Procedure Memorandum 90-1, 2 ELR 46106, para. 5b, 37 C.F.R. 21809 (Oct. 14, 1972).

35. Peterson and Kennan, The Federal-Aid Highway Program: Administrative Procedures and Judicial Interpretation, 2 ELR 50001-50023.

36. Id. at 50016-17.

37. Arlington Coalition on Transportation v. Volpe, 2 ELR 20584, 458 F.2d 1323. (4th Cir. 1972).

38. Morningside-Lenox Park Ass'n v. Volpe, 1 ELR 20629, 334 F. Supp. 132 (N.D. Ga., 1971).

39. The contents of the consent judgment are published in 3 ELR 20688; see also fn. 27, supra.

40. In addition, the division engineer may authorize construction on a highway project if grading or drainage have previously been authorized on it.

41. FHWA originally offered plaintiffs a settlement under which FHWA would have prepared an impact statement for every authorization request received after January 1, 1974. Plaintiff's counsel rejected this offer, both because he feared it would precipitate a flood of pre-1974 requests and because it would, by requiring impact statements on small or insignificant phases of highway projects, not substantially aid the conservationists (Personal communication with William Darrah, assistant to Robert M. Kennan, Jr., during Tiemann litigation, February 5, 1974.)

42. "Highway section" is a term used by FHWA to define the extent of highway that should be included in an environmental impact statement. FHWA, Policy and Procedure Memorandum 90-1, 2 ELR 40106, 37 C.F.R. 21809 (Oct. 14, 1972). PPM 90-1 defines "highway section" as:

… a substantial length of highway between logical termini (major crossroads, population centers, major traffic generators, or similar major highway control elements) as normally includedin a single location study. PPM 90-1, para. 3a.

The regulations continue:

The highway section included in an environmental statement should be as long as practicable to permit consideration of environmental matters on a broad scope. PPM 90-1, para. 6.

43. Since the Tiemann settlement did not involve either private defendants or design goals for specific projects, discussion of this settlement will be omitted from the first two sections.

44. Sierra Club v. Resource Agency of California and Pacific Gas and Electric Company, (#6420053 Superior Court, San Francisco County, 1972.) This case involved two claims: the first was that the Resource Agency had adopted its regulations concerning environmental safeguards for nuclear power plants in violation of California's Administrative Procedure Act; the second was that the Resource Agency had exceeded its authority in entering into an agreement with P.G. & E. which provided that, if P.G. & E. complied with these regulations, no Resource Agency personnel would testify against P.G. & E.'s nuclear plant applications before the Public Utilities Commission (which made the final decision on where the plant could be located). The suit attacked both the validity of the regulations themselves and their application to P.G. & E.'s plans for a nuclear generating plant in Point Arena, California. The first cause of action was mooted by the passage of a Proposition on the 1972 California ballot (Proposition 20) which voided the Resource Agency's regulations and turned nuclear site approval authority over to a Coastal Commission. The second claim was dropped when the Resource Agency agreed to terminate their agreement with P.G. & E. According to David Pesonen, Sierra Club's attorney in the suit, the Resource Agency most likely terminated the agreement to avoid adverse publicity, which, given the pro-environmental political climate which had led to the passage of Proposition 20,they could reasonably expect to flow from a trial over the agreement.

45. This discussion of a suit's possible adverse impact on minority groups as a factor of political importance should not detract from some environmentalists' strong concern with the interests of these groups.

46. See text accompanying Note 15, supra.

47. The District Court ultimately ruled that HUD had not violated NEPA with respect to either the Berkeley or the San Francisco redevelopment projects. This ruling was upheld by the Court of Appeals as to the Berkeley project, but reversed as to the San Francisco project. See text accompanying fn. 68, infra.

48. Plaintiffs and defendants did agree that the Oakland Redevelopment Agency would consider changing its plans for the part of the project on which work had already begun.

49. See Note 44, supra.

50. The Tiemann case, in which counsel Kennan possessed considerable discretion, would also seem to fall within this category. On the other hand, in the Peterson suit, which involved technical questions of tanker design and operations, plaintiffs' counsel lacked expertise in the field, but their clients were equally inexpert.

51. To the best of the author's knowledge, the cases discussed in this article are the sum total of NEPA cases to be settled to date.

52. 396 U.S. 375 (1970).

53. La Raza Unida v. Volpe, 2 ELR 20691, 337 F. Supp. 221 (N.D. Cal. 1971), cert. den. sub nom. California Highway Commission v. La Raza Unida, 409 U.S. 890 (1972). After discussing the three grounds on which courts had relied in awarding attorneys' fees absent a statutory provision, Judge Peckham based his decision to award attorneys' fees against the state defendants on the "private attorney general," or vindication of a strong public policy, situation. The Court felt that plaintiffs qualified under this category because NEPA and the federal housing statutes were granted special weight and priority by Congress, because numerous persons had benefited from the litigation, and because the need for private enforcement was particularly evident in NEPA and housing suits where the agencies charged with protecting the public interest were named as defendants and the relief sought was an injunction rather than money damages. 57 F.R.D. at 98-102.

54. Committee to Stop Route 7 v. Volpe, 2 ELR 20611 (D. Conn. 1972). Although the court did not award attorneys' fees, it declared:

The implications of Mills would seem to have pertinence to litigation brought to enforce the requirements of the National Environmental Policy Act. 2 ELR at 20611. See also, Note, "Awarding Attorney and Expert Witness Fees in Environmental Litigation," 58 Cornell L. Rev. 1222-1254, (July 1973).

55. The relevant portion of § 2412 states:

Except as otherwise specifically provided by statute, a judgment for costs, as enumerated in section 1920 of this title, but not including the fees and expenses, may be awarded to the prevailing party in any civil action brought by or against the United States or any agency or official of the United States acting in his official capacity, in any court having jurisdiction of such action….

56. Committee to Stop Route 7 v. Volpe, 2 ELR 20611 (D. Conn. 1972). The court remarked:

Whether the United States itself should be liable for attorneys' fees when it loses litigation is a matter for Congress to determine, at least so long as the prohibition of § 2412 stands. 2 ELR at 20611.

57. Committee to Stop Route 7 v. Volpe, 2 ELR 20611 (D. Conn. 1972).

58. Revenue Procedure 71-39, Section 3.02 (1971).

59. The Maritime Subsidy Board, composed of the Assistant Secretary of Commerce for Maritime Affairs, the General Counsel of the Maritime Affairs, and the Deputy Assistant Secretary for Maritime Affairs is granted by Congress the authority to dispense the shipbuilding subsidies authorized by the 1970 amendments to the Merchant Marine Act of 1936. 46 U.S.C. 1101. 1151-1161.

60. Such public participation in MarAd's rule-making represented a sharp break in MarAd's traditional procedures and was one of plaintiffs' earliest demands.

61. The views of plaintiffs' attorneys, Robert M. Hallman and Eldon V. C. Greenberg, are contained in a letter from Hallman and Greenberg to counsel for Environmental Defense Fund, Natural Resources Defense Council and National Association for Parks and Conservation, dated September 4, 1973, a copy of which was made available to the author by the courtesy of Mr. Hallman.

62. Nevertheless, liquified natural gas carrying vessel represented 24 percent of the projected expenditures for vessel subsidies over the life of the shipbuilding subsidy program. Final Opinion and Order f the Maritime Subsidy Board, Docket A-75, p. 18 (August 30, 1973).

63. 46 U.S.C. § 390 et seq., as amended (1972). The Act provides that any regulations promulgated under its sections should not become effective before January 1, 1974, nor later than January 1, 1976. 46 U.S.C. 390 (7) (A) & (c).

64. The Maritime Administration also agreed to develop anti-pollution training manuals and course materials for tank vessel operators.

65. Personal communication with Ron Wilson, January 29, 1974.

66. Personal communication with Joseph Karaganis, February 6, 1974.

67. Personal communication with J. Anthony Kline, March 4, 1974.

68. San Francisco Tomorrow v. Romney, 2 ELR 20273, 342 F. Supp. 77 (N.D. Cal. 1972).

69. San Francisco Tomorrow v. Romney, 3 ELR 20124, 472 F.2d 1021 (9th Cir. 1973).

70. Personal communication with John Hoak, General Counsel of National Wildlife Federation, February 26, 1974.

1. See Conservation Society of S. Vt., Inc. v. Secretary of Transportation, Civil Action No. 6598, slip op. pp. 3-10 (D. Vt., July 26, 1973).

2. Hanly v. Kleindienst, 471 F.2d 823, 830-31 (2d Cir. 1972), cert. denied, 41 U.S.L.W. 3616 (June 22, 1973).

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