Fallout from SCRAP II and the 1975 NEPA Amendments: Second Circuit Reverses Itself in Conservation Society

In the first significant judicial reaction¹ to last year's amendment² to the National Environmental Policy Act (NEPA), the Second Circuit Court of Appeals has repudiated its earlier "hard line" view³ that NEPA prohibits delegation of environmental impact statement preparation to state agencies. The court also responded to the Supreme Court's 1975 decision in the SCRAP case⁴ by reversing its prior holding that preparation of a NEPA impact statement on transportation systems within the entire Route 7 corridor in New England must procede federal funding of a reconstruction project for a 20-mile segment of the highway. This second ruling suggests that the federal courts may choose to read SCRAP II as giving federal agencies considerable leeway in narrowing the scope of the NEPA review associated with a particular project. It thus casts a shadow over the developing use of programmatic impact statements, one of the most promising developments in recent NEPA law.

The piecemeal reconstruction of Route 7 into a limited access expressway has spawned a number of lawsuits. In 1973, Second Circuit Judge James Oakes, sitting by designation as the Federal District Court in Vermont, granted a permanent injunction in Conservation Society of Southern Vermont v. Secretary of Transportation⁵ against further work on a 20-mile segment of the highway between Bennington and Manchester, Vermont.

Judge Oakes found that, in view of existing and planned state reconstruction projects elsewhere along Route 7, the Bennington-to-Manchester segment must be considered part of a larger proposal for improving the roadway up to expressway status throughout the entire 280-mile Route 7 corridor from Norwalk, Connecticut to Burlington, Vermont. While there was as yet no clearly articulated federal plan for converting Route 7 into a superhighway, he found that Connecticut, Massachusetts and Vermont were looking toward this end "as possible of accomplishment with legislative and federal approval over a long-range period of time, with federal approval taking place on an ad hoc basis at the district engineer level."

Conversion of separate portions of Route 7 into a superhighway would, the court observed, produce greater traffic, thus creating pressure for further construction to connect the newly expanded sections. The Federal Highway Administration was therefore ordered to prepare, within six months of the issuance of the project EIS, an impact statement concerning development of transportation systems within the entire Route 7 corridor. In so holding, the court relied on the D.C. Circuit's decision in Scientists' Institute for Public Information v. AEC,⁶ which held that NEPA required preparation of an impact statement on the entire research and development program for the Liquid Metal Fast Breeder Reactoneven though no specific action to implement the LMFBR program had yet been taken.

The Second Circuit, in its first Conservation Society opinion,⁷ upheld Judge Oakes' ruling on the required scope of the NEPA review in connection with the Route 7 project. Agreeing with the district court's factual conclusion that "an ultimate Route 7 superhighway is the expectation of state agencies with the knowledge and cooperation of the federal government," the Second Circuit held that the lower court had not abused its discretion in ordering preparation of an EIS which went beyond the scope of the specific project currently before the agency. Judge Adams admitted that the 20-mile segment from Bennington to Manchester, Vermont had "local utility" apart from the whole of Route 7, but concluded that this was not dispositive. The entire Route 7 corridor could be upgraded to a superhighway through such discreed separately-viable projects, he noted, without an overall route corridor EIS ever being prepared; this failure to measure the cumulative environmental impact of fragmented highway development or to consider major transportation alternatives prior to superhighway construction would subvert the purposes of NEPA and violate its requirements.

The Federal Highway Administration appealed, and on remand from the Supreme Court⁸ the Second Circuit changed its tune. Citing SCRAP II for the proposition that a federal agency must prepare its EIS at "the time at which it makes a recommendation or report on a proposal for federal action," the Second Circuit noted, as it had done before, that there was "no overall federal plan" for improving the entire Route 7 corridor into a superhighway. But the court now found that inasmuch as the project at issue had "local utility," it did not represent an "irreversible or irretrievable commitment of federal funds for the entire corridor." Under SCRAP II the Federal Highway Administration therefore had no obligation to prepare a corridor EIS.

This unanimous reversal, in a per curiam opinion,⁹ is somewhat puzzling in view of the court's earlier conclusion, on the same uncontested factual record, that although locally viable, the project did constitute such a [6 ELR 10082] commitment in light of federal knowledge of and cooperation with state plans for upgrading the entire corridor. The decisive influence seems to have been SCRAP II's dictum that preparation of an EIS need only be keyed to a "proposal for federal action." But the Second Circuit referred to this dictum as a holding, a misreading of the opinion¹⁰ perhaps caused by the belief that the Supreme Court's facially neutral remand for "further consideration" in light of SCRAP II contained an implicit directive to reverse the corridor EIS order.

The Supreme Court's remand in Conservation Society actually served to place the ambiguous meaning of the SCRAP II decision squarely before the Second Circuit for clarification. The court failed to rise to the occasion, however, opting for an interpretation of that ruling which produces an excessively formalistic and simplistic reading of NEPA's EIS requirements. If this view of SCRAP II gains acceptance among the other circuits, it could severely cramp the developing use of program impact statements by undercutting NEPA's programmatic applicability to incremental federal projects.

Such a narrowing of NEPA's coverage is also a possible result of Supreme Court review of the D.C. Circuit's decision in the Northern Great Plains Coal leasing case, now awaiting oral argument.¹¹ In either event, the damage to NEPA would be quite serious. As was suggested by several contributors to a NEPA Symposium¹² in the March issue of ELR, program and policy impact statements offer the most promising means by which to breathe life into the statute's substantive mandate, presently lying dormant in § 101(b). These statements may also be the only practical way of pushing recalcitrant agency officials — particularly in mission-oriented agencies like the Federal Highway Administration — to build environmental values into real decision making. In short, to abandon preparation of such EIS's now is to cut off prematurely the potentially most fruitful branch of NEPA's development.

The Second Circuit's disposition of the delegation question, though of lesser consequence than the court's reaction to SCRAP II, nonetheless merits examination. In its 1973 decision the district court found that the Federal Highway Administration had allowed the Vermont Highway Department to prepare the draft EIS for the 20-mile reconstruction project, and had then failed to edit or review the statement, except for a few perfunctory comments. This, the court held, violated NEPA. In its first opinion, the Second Circuit agreed that the Federal Highway Administration had thereby violated the strict rule against delegation enunciated in its decision in Greene County Planning Board v. FPC,¹³ and reaffirmed its adherence to the nondelegation principle in spite of the contrary rulings of five other circuits.¹⁴ Judge Adams pointed to the state highway department's legislative mandate to proceed with the project as a clear indication that the state agency was likely to build "self-serving assumptions" into the EIS, and would not be as likely as the responsible federal official to produce the "dispassionate appraisal" of environmental considerations which is NEPA's objective.

The Federal Highway Administration initially reacted to this ruling by halting all federally-assisted highway projects within the Second Circuit, a tactic apparently designed to put pressure on Congress to amend NEPA to permit delegation of EIS preparation to state agencies.¹⁵ This strategy ultimately succeeded. In August 1975, Congress enacted Pub. L. 94-83,¹⁶ which amends NEPA to allow delegation on condition that "the responsible Federal official furnishes guidance and participates in such preparation," and, in addition, "independently evaluates such statement prior to its approval and adoption."

The Supreme Court's remand of the case for reconsideration "in light of Pub. L. 94-83" gave the Second Circuit first crack at interpreting these conditions. Judges Moore and Mulligan, in the per curiam opinion, found in the legislative history a congressional intent to overturn the Second Circuit's earlier Conservation Society decision. In addition, the majority held that the Federal Highway Administration's performance met the procedural requirements of the amendment. Frequent verbal communications about the EIS were exchanged between federal and state officials during preparation of the impact statement. The Federal Highway Administration division engineer took a filed trip to examine the project site, and the draft EIS was reviewed by an interdisciplinary Federal Highway Administration task force, which made three suggestions that were then incorporated into the final EIS. According to Judges Moore and Mulligan, these cooperative efforts satisfied Pub. L. 94-83, even though the Federal Highway Administration's comments may have been "perfunctory."

Judge Adams, now in dissent, disagreed with the majority on both these points. In his view, Pub. L. 94-83 was intended to modify and clarify what Congress viewed as the Second Circuit's rigid non-delegation standard, rather than simply to overturn that ruling or disavow the requirement of substantial federal control over EIS preparation. According to the dissent, the NEPA amendment instead conveyed Congress' intention [6 ELR 10083] to retain a considerable, though not exclusive, federal role in the development of each EIS.

Moreover, asserted Judge Adams, the required amount of federal control was clearly not exercised in this case. There was no evidence that Federal Highway Administration employees conceived, wrote or even edited any section of the EIS; at most they held informal conversations with state officials concerning various portions of the impact statement, and subsequently performed a review which consisted of nothing more than cursory comments. These actions, the dissent argued, did not meet the standard for federal control set forth in Pub. L. 94-83.

While this division between majority and dissent is deep, the determination of whether the new statutory requirements for federal guidance, participation and evaluation have been met in any particular case will ultimately depend on a factual analysis of the record of federal agency behavior. It is thus not wise to make too much of this first judicial decision on what is essentially a case-by-case factual determination. In any event, the court's ruling on the delegation issue is primarily of interest in the Second and Seventh¹⁷ Circuits, the only courts which were not already allowing substantial state participation in EIS preparation.

By no stretch of the imagination can the latest Conservation Society decision be called a victory for those who advocate an expansive interpretation of NEPA. One ruling certainly does not constitute a trend, but the Second Circuit's SCRAP II-related reversal of its earlier order for an EIS covering the entire Route 7 corridor, along with its relatively lax reading of the conditions governing delegation of EIS preparation under Pub. L. 94-83, forecast dark days ahead for NEPA.

1. Conservation Society of Southern Vermont, Inc. v. Secretary of Transportation, 6 ELR 20207 (2d Cir. Feb. 18, 1976).

2. Pub. L. 94-83, 42 U.S.C. § 4332(2)(D), ELR 41009. See Comment, Two Amendments Leave NEPA Intact: Congress Confers Limited Authority on State Officials to Prepare NEPA Statements, 5 ELR 10173 (Oct. 175).

3. See Greene County Planning Board v. FPC, 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972).

4. Aberdeen & Rockfish R.R. v. SCRAP, 422 U.S. 289, 5 ELR 20418 (U.S. June 24, 1975).

5. 362 F. Supp. 627, 3 ELR 20709 (D. Vt. 1973).

6. 481 F.2d 1079, 3 ELR 20525 (D.C. Cir. 1973).

7. Conservation Society of Southern Vermont v. Secretary of Transportation, 508 F.2d 927, 5 ELR 20068 (2d Cir. Dec. 11, 1974). See Comment, Second Circuit Reaffirms Greene County and Upholds Programmatic Impact Statement for Route 7 Corridor, 5 ELR 10030 (Feb. 1975).

8. Coleman v. Conservation Society of Southern Vermont, 6 ELR 20068 (U.S. Oct. 6, 1975).

9. Conservation Society of Southern Vermont, Inc. v. Secretary of Transportation, 6 ELR 20207 (2d Cir. Feb. 18, 1976).

10. The SCRAP II decision is admittedly complex, and its meaning is anything but clear. See Comment, SCRAP II: No Excuse for NEPA Foot-Dragging, 5 ELR 10126 (Aug. 1975), and CEQ's Memorandum to the Heads of Agencies Concerning Aberdeen & Rockfish Railroad Co. v. SCRAP (Nov. 26, 1975), which argues that the decision does not justify any general change in agency NEPA procedures.

11. Sierra Club v. Morton, 514 F.2d 856, 5 ELR 20463 (D.C. Cir. June 16, 1975), cert. granted and injunction stayed sub nom. Kleppe v. Sierra Club, 44 USLW 3397 (U.S. Jan. 12, 1976).

12. Implementing NEPA's Substantive Goals: A Symposium, 6 ELR 50001 (Mar. 1976).

13. 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972).

14. See Movement Against Destruction v. Volpe, 500 F.2d 29, 4 ELR 20278 (4th Cir. 1974); Finish Allatoona's Interstate Right v. Brinegar, 484 F.2d 638, 3 ELR 20769 (5th Cir. 1973); Iowa Citizens for Environmental Quality v. Volpe, 487 F.2d 849, 4 ELR 20056 (8th Cir. 1973); Life of the Land v. Brinegar, 485 F.2d 460, 4 ELR 20295 (9th Cir. 1973); and Citizens Environmental Council v. Volpe, 484 F.2d 870, 4 ELR 20009 (10th Cir. 1973).

15. See Comment, Congress Under Pressure to Amend NEPA to Allow State Participation in Impact Statement Preparation, 5 LER 10081 (June 1975).

16. The text of Pub. L. 94-83 is printed at ELR 41014. It amended, § 102(2) of NEPA, becoming 42 U.S.C. § 4332(2)(D), ELR 41009. See Comment, Two Amendments Leave NEPA Intact; Congress Confers Limited Authority on State Officials to Prepare NEPA Statements, 5 ELR 10173 (Oct. 1975).

17. See Swain v. Brinegar, 517 F.2d 766, 5 ELR 20354 (7th Cir. Apr. 29, 1975).