National Audubon Society v. Hartz Mountain Development Corp.

No. 83-1534D (D.N.J. October 24, 1983)

The court rules that the Corps of Engineers did not violate the National Environmental Policy Act (NEPA) or the Environmental Protection Agency's (EPA's) Federal Water Pollution Control Act (FWPCA) § 404(b)(1) guidelines in granting an FWPCA § 404 permit to fill wetlands in the Hackensack Meadows, New Jersey as a prelude to commercial development. The court first holds that the Corps did not violate NEPA by failing to consider the combined impact of the commercial development and a proposed associated residential development in deciding whether the project required an environmental impact statement (EIS). The Council on Environmental Quality (CEQ) NEPA regulations, the EPA FWPCA § 404(b)(1) guidelines, and the Corps § 404 regulations all require the Corps to consider cumulative impacts of present and likely future projects. Although the developer apparently split the development into commercial and residential projects to avoid the EIS requirement, the court holds that the developer's intent is not dispositive. After examining the case law, the court concludes that if the agency finds that a project has independent economic viability, the agency may consider the project independently. The CEQ NEPA regulation on cumulative impacts simply echoes the statute and the case law. The Corps was not arbitrary or capricious in considering only the impacts of the commercial project in determining that an EIS was not required.

The court next holds that the Corps' assessment of the project's mitigation plan, which contributed to the Corps' conclusion that no EIS was needed, was not arbitrary or capricious. Although other government agencies strongly disagree with the Corps' assessment, there is ample evidence in the record to support the Corps' findings.

The court also upholds the Corps' finding that the impacts of the project would not be significant enough to require an EIS under NEPA. The Corps comprehensively reviewed the impact of the proposal, as required by CEQ regulations, and its determination of no significant impact is reasonably supported by the record.

Finally, the court rules that the project meets the requirement of the EPA § 404(b)(1) guidelines that there be no practicable, less damaging alternative to the proposed discharge. Since the proposed project is not water-dependent, the regulations raise a presumption that praticable alternatives exist. The alternatives proposed by plaintiffs are either too indefinite to be analyzed or impracticable. The no-action alternative was rejected because it would not achieve the basic purpose of the proposed activity. Hartz and the Corps considered alternative sites for the project throughout northern New Jersey and found none of them practicable. The Corps' conclusion that there are no practicable alternatives is supported by the record.

Counsel for Plaintiffs
Gordon N. Litwin
60 Park Pl., Newark NJ 07102
(201) 642-1801

Counsel for Defendants
Kenneth D. McPherson
Waters, McPherson & McNeill
32 Journal Sq., Jersey City NJ 07306
(201) 798-5000

R. Sarah Compton
Collier, Shannon, Rill & Scott
Suite 308, 1055 Thomas Jefferson St. NW, Washington DC 20007
(202) 342-8400

Mary Catherine Cuff, Ass't U.S. Attorney
Fed. Bldg., Room 502, 970 Broad St., Newark NJ 07102
(201) 645-2155

Debevoise, J. from the bench

[14 ELR 20725]

Debevoise, J.:

THE COURT: I might add anyone who wishes to leave during the course of this may feel free to do so. Again, I reserve the right to correct the transcript and make changes or additions of a nonsubstantive nature.

I. Procedural History

Plaintiffs in this action are National Audubon Society, Environmental Defense Fund, Sierra Club, American Littoral Society and New Jersey Conservation Foundation. The defendants are Hartz Mountain Development Corporation, Colonel Walter M. Smith, District Engineer, New York District, U.S. Army Corps of Engineers, and John O. Marsh, Jr., Secretary of the Army.

The suit challenges issuance of permit number 12746 on January 19, 1983 by the Corps of Engineers allowing Hartz to fill wetlands in the Hackensack Meadowlands of New Jersey for the purpose of building stores, office buildings and warehouses.

The complaint alleges that the permit is invalid because it was issued in violation of Section 404 of the Clean Water Act, 33 U.S.C. Section 1344, the National Environmental Policy Act, 42 U.S.C. Section 4321, et seq. and the regulations implementing those statutes. Plaintiffs sought preliminary injunctive relief and a hearing was held on May 13th, 1983. The evidence consisted of affidavits and documents.

II. Preliminary Statement

The applicable environmental statutes and regulations are, of necessity, written in broad, general language. Their interpretation and application will inevitably be shaped by the underlying views of those to whom their administration and enforcement are entrusted. In the present case a number of governmental agencies, state and federal, have responsibility for the administration and enforcement of NEPA and the Clean Water Act. In this case the views of these agencies are in confrontation.

There were on the one hand the United States Environmental Protection Agency, the Fish and Wildlife Service of the United States Department of the Interior, the National Marine Fishery Service of the United States Department of Commerce. These groups have long opposed the master plan of the Hackensack Meadowlands which has been incorporated into New Jersey's federally approved coastal zone management program. They have opposed the master plan and the coastal zone management program because, in their view, they give excessive emphasis to development and involve excessive destruction of the remaining wetlands in the Hackensack Meadows. The views of these agencies were reflected in the present case in their vehement opposition to Hartz' plans as proposed which, they held, involved excessive and illegal destruction of wetlands and totally inadequate mitigation for lost wetlands.

On the other hand there are New Jersey's Department of Environmental Protection and the Hackensack Meadowlands Commission, both of which also have responsibilities for protection of the environment. The latter agency also has responsibility to plan for the overall development of the Meadowlands. In the judgment of those two agencies, the Hartz project properly balances the interests in the protection of the wetlands and in the commercial and industrial development of the area.

In this case the Corps of Engineers, as the agency having authority to issue the permit, had the ultimate responsibility for resolving these differences within the statutory and regulatory framework. The Corps has its own environmental experts and, of course, is in a position to evolve its own views as to the interpretation of the statutes and its own regulations. Its determination here largely reflected the views of the New Jersey Department of Environmental Protection and the Commission and constituted a rejection of the opinions and recommendations of EPA, Fish and Wildlife Service and National Marine Fisheries Service. The Corps' action engendered a bitter response from those three agencies including charges that the Corps approved a project designed for the convenience of Hartz, the applicant for the permit, rather than the public's interest in fish and wildlife values. None of these agencies pursued the matter to higher authorities within the Corps, as they are entitled to do. However, plaintiffs in this case espoused the position which these agencies took and rely on the same data and statutory and regulatory interpretations to urge that the issuance of the permit was unlawful. Defendant Hartz, of course, urges the lawfulness of the position of the New Jersey Department of Environmental Protection and the Commission as reflected in the Corps' issuance of the permit.

The following constitutes my findings of fact and conclusions of law.

III. Facts

The site in question lies in the eastern edge of the Hackensack Meadowlands District, bounded by Mill Creek on the west and Cromakill Creek and West Side Avenue on the east with the eastern spur of the New Jersey Turnpike running through the center. It contains approximately 406 acres. 278 acres are estuarine wetlands of which 127 are to be filled. The project envisions three uses:

(i) Office buildings and office distribution facilities are to be placed on parcels located within the Cromakill Creek Basin.

(ii) Warehouse distribution centers are to be placed on another parcel located within the Cromakill Creek Basin.

(iii) Commercial facilities such as retail stores and offices will be placed on a parcel on the opposite side of the New Jersey Turnpike extension in the Mill Creek Basin.

The Hackensack Meadowlands has been subject to serious title questions. Much of it has been used for dumping municipal waste. The Hackensack River has long been polluted. Development of the area had been unplanned.

In 1969 the New Jersey Legislature adopted a Hackensack Meadowlands Reclamation and Development Act, the general purpose of which was to provide for unified and comprehensive planning for the 21,000 acres of salt water swamps, meadows and marshes commonly known as the Meadowlands, taking into account recreational, industrial, commercial and ecological factors. N.J.S.A. 13:17-1, et seq.

During the period when the Commission was formulating its Master Plan, including codes and standards covering land use, comprehensive zoning, subdivisions, building construction and solid waste disposal, it adopted an interim zoning plan whereby further development was permitted only on the fringes of the District.

On November 8, 1972, after public hearing and after submitting a proposed land use plan to the Hackensack Meadowlands Municipal Committee for its recommendation and comments, the Commission adopted a final Master Plan including a zoning ordinance and codes and standards governing development throughout the District. After considering various intensities and growth of the District, the Commission selected types and density of the development designed to generate 100,000 new residents and 200,000 new jobs. Accordingly, the official zoning map and regulations delineate areas suitable for business and commercial uses, industrial uses, residential uses and public and educational facilities.

There are 13 areas located at the center of the Meadowlands District that have been designated "specially planned" districts, ("SPA's") because they contain large amounts of vacant land and thus present opportunity for comprehensive development on a large scale. Development within an SPA district may proceed only after a comprehensive plan for the entire district has been approved to insure that the proposed structures will relate well to each other and to the plan as a whole. Each SPA district is designed to permit a different type of development. Thus, for example, the Berry's Creek Center SPA district is intended to be developed for mixed uses including retail, commercial and residential uses built along parks and plazas, while the other SPA districts focus on residential, transportation and special land uses, for example, major educational or cultural facilities. See New Jersey Administrative Code 19:4-5.1 et seq.

The Meadowlands Act provides that this development is not to be undertaken at the expense of environmental protection. [14 ELR 20726] Thus, the Master Plan also provides measures for the preservation of in excess of 6,900 acres of open space including 3,500 acres of wetlands. These wetlands were located within zones designated for marsh preservation which permit only water related activities to develop. New Jersey Administrative Code 19-4.4-12, or within SPA's and set aside for protection by virtue of the Commission's open space matter.

Pursuant to the Federal Coastal Zone Management Act, 16 U.S.C. Section 1451, et seq., New Jersey has developed a coastal program. That program has been reviewed and was approved by the federal government in September, 1980.

This approval was given over the strong objection of the Department of Interior, Fish and Wildlife Service. The objections were based upon the substantial amount of wetlands which would be filled under the Master Plan. New Jersey's approved coastal management program designates the Commission's Master Plan as a coastal policy for the Hackensack Meadowlands District. DEP and the Commission jointly administered the program in accordance with the standards and criteria contained in the Master Plan. The proposed use of the site involved in this case is consistent with the Commission's Master Plan.

In 1977 Hartz contracted to buy a tract of approximately 500 acres in the Hackensack Meadowlands for development of a mixed use complex which was zoned to include residential, commercial, light industrial and research park office complexes. Hartz also sought to acquire adjoining land, some of which was subject to riparian ownership claims of the state of New Jersey.

An application to acquire the state's interests was made to the National Resource Council (now known as the Tidelands Resource Council) within the New Jersey Department of Environmental Protection and reviewed by all concerned state agencies including the Natural Resource Council ("NRC"), various divisions and bureaus of the New Jersey Department of Environmental Protection, ("DEP") and the Hackensack Meadowlands Development Commission.

In 1978 at the request of DEP staff an Environmental Impact Statement was prepared by McCormack and Associates for use by these agencies in their review of the Hartz development plans. The NRC conducted an extensive review and public hearings.

After certain changes, Hartz received the endorsement of the DEP and the Commission. Thereafter, the NRC approved the purchase by Hartz of approximately 45 acres of riparian land for a consideration of $1,453,200 and the creation of a "Greenbelt" of 25 acres along Cromakill Creek from land dedicated by Hartz. In addition to the outright purchases and grants, Hartz agreed to a deed restriction upon portions of the riparian land purchased from the state and, by agreement with the NRC and the Commission, permanently reserved more acres for wetland and open space.

After the State determined to issue a riparian grant to Hartz, DEP and the Commission formally reviewed additional permit applications to ensure that the development plans were consistent with the Commission's Master Plan.

Because the wetlands on the Hartz site are protected by Section 404 of the Clean Water Act, 33 U.S.C. Section 1344, Hartz could not fill the wetlands without a permit from the United States Army Corps of Engineers. On December 22, 1981, Hartz applied for a permit to cover the entire project. On March 18, 1982, Hartz presented a revised application to the Corps. according to notes in the Corps files, officials of the Corps informed Hartz that if it sought one permit for the whole project, an environmental impact statement would probably be required; Hartz withdrew its revised application, and three weeks later, on April 6, 1982, Hartz submitted a new application that omitted the residential development that was intended to occupy one-third of the original project site.

As required by the Clean Water Act, Hartz included in its application a mitigation plan to compensate for some of the values of the 127 acres of wetland to be destroyed by the filling operations. After some revision by the Corps, the plan provided that Hartz would create a diversity of wetland habitats by diking 88 acres of wetlands to create fresh water impoundments fed by runoff from the lawns and parking lots on the project, and by perpetuating 63 acres of existing brackish marsh.

An interagency team composed of representatives of EPA, FWS, NMFS, DEP, the Meadowlands Commission, the Corps and the applicant was formed to evaluate the quality of existing wetlands on the site so as to develop goals for the anticipated mitigation plan. The team met during a four-month period in the spring of 1982. The team selected a methodology, based on the work of Reppert, et al. (1979) at the FWS request, and modified the scoring system to include a suggestion made by Hartz' biological consultants with a technique developed by McCormack. All team members agreed to abide by a consensus value and to apply the same on a uniform basis throughout the entire tract so that a value per acre could be determined independently by each participant.

The team members based their determinations on site visits and a helicopter overflight supplemented with numerous drawings, charts, maps, aerial photos and overlays which provided all required information on vegetation, tide level and other factors. In addition, the team used an EIS prepared for Hartz by McCormack, as well as numerous other submissions by Hartz' consultants. The team agreed upon a consensus value of 4.4 points peracre (out of a possible 10) for the existing wetlands, even though some members, for example, Fish and Wildlife Service, thought the value too low, and others, for example, the Commission, thought it too high. The values quite clearly reflect each evaluator's view of the relative importance of environmental factors and developmental factors.

On August 13th, 1982, the Corps issued a Public Notice seeking public comments on the permit application. A hearing was held. Six local officials testified in favor of the project because of the jobs and tax revenues it would provide. Ten citizens and citizen groups opposed the project because of the environmental problems it would cause.

To understand the contentions of the parties it is necessary to describe briefly Hartz' mitigation plan and the reaction to it by the various governmental agencies.

To mitigate for the loss of the 127 acres of wetlands, Hartz is required to enhance the quality of approximately 63 acres of existing brackish marsh and replace 88 acres of brackish marsh with high quality fresh water wetlands. To improve the quality of the brackish marsh Hartz must take measures to remove and prevent further encroachment of common reedgrass and plant various salt marsh vegetation. Creation of fresh water marsh will be accomplished by the construction of three impoundments in the Cromakill Creek Basin covering approximately 60 percent of the total mitigation area. Within the ponds a graded sequence of vegetation will be established to correspond with planned water levels. To the extent possible, storm water runoff from the project site will be utilized to maintain adequate water levels and quality, but if more water is needed, it will be provided by other sources such as wells.

The EPA, FWS and NMFS were highly critical both of the mitigation plan itself and of the Corps' method of determining that the plan would provide 80 percent mitigation.

Although the details of the suggestions of those three agencies differed in certain respects, their principal recommendations were quite similar. They urged that:

1. One large wetland area should be created rather than four separate freshwater wetlands and several smaller brackish water wetlands.

2. The area which should be devoted to mitigation is the Mill Creek wetlands, which are of higher quality than the Cromakill Creek wetlands and which are more isolated and easier to maintain. No development at all should be permitted in that area; all development should be undertaken in the Cromakill Creek.

3. At least 100 percent mitigation should be required rather than 80 percent.

4. The project should not be considered separate and apart from future projects which Hartz contemplates.

The three objecting agencies made numerous other objections and suggestions with respect to the details of the Hartz mitigation plan.

In addition, the three objecting agencies disagreed with the manner in which the Corps arrived at the conclusion that Hartz' proposal provided 80 percent mitigation. There were two principal objections to the Corps' computation.

One objection was that the Corps made an invalid comparison of the value of existing wetlands with the value of the Hartz [14 ELR 20727] mitigation plan to arrive at the 80 percent figure. The Corps used the multi-agency evaluation teams low 4.4 points per acre value when computing the value of the existing wetlands and then used its own high 6.5 points per acre value when computing the value of the mitigation plan. What the Corps should have done, according to the objecting agencies, was to use a team evaluation of the existing acreage and a team evaluation of the mitigation plan, or else a Corps evaluation of the existing acreage and a Corps evaluation of the mitigation plan.

To be specific:

The Corps' computation on which it based its determination was as follows: The total value of the mitigation area was 151 acres times the Corps' valuation of 6.5 points per acre for a total value of 981.5 points. The total value of all existing wetlands covered by the permit was 278 acres times the team valuation of 4.4 points per acre for a total value of 1,223.2 points. 981.5 divided by 1223.2 equals 80 percent.

Plaintiffs contend that if the computations were based upon the Corps' figures for both existing wetlands and for mitigation the result would have been only 67 percent mitigation being computed as follows: The total value of the mitigation area would still be 981.5 points. The total value of all existing wetlands covered by the permit would have been 278 acres times the Corps valuation during the team endeavor of 5.3 points for a total of 1473.4 points. 981.5 points divided by 1473.4 points equals 66.6 percent.

Using the same methodology and the point value of different agencies, plaintiffs' expert, Paul Dritsas and Hartz' expert James A. Schmid engage in a battle of computations which demonstrates that the proposed mitigation ranges anywhere from 27 percent to 126 percent.

The second flaw which the objecting agencies found in the Corps computation was that he gave Hartz credit for existing wetlands rather than giving it credit only for additional values resulting from the mitigation plan. These agencies asserted that using the Corps' 6.5 value for improved wetlands the computation should have been as follows:

(i) 127 acres filled with a value of 4.5 points per acre yields 571.5 points lost.

(ii) 151 acres to be mitigated by Hartz at a value of 4.5 points per acre yields an existing point value of 679.5 points.

(iii) 151 acres to be mitigated by Hartz at a value of 6.5 points per acre yields an improved point value of 981.5 points.

(iv) Subtracting the existing value of the 151 acres (679.5 points) from the improved value of the 151 acres yields 302 points gained by improving the 150 acres of wetlands.

(v) 571.5 points were lost by filling the 127 acres; 302 points were gained by improving the 151 acres of wetlands.

(vi) the 302 points obtained by improving the 151 acres amounts to only a 53 percent of the 571.5 points lost to the destruction of the 127 acres of wetlands.

The objecting agencies made their views known to the Corps during conferences and in writing during September and October of 1982. Hartz submitted responses in answer to the contentions of these agencies. On November 8, 1982 there was a conference between representatives of EPA, FWS and NMFS on the one hand and representatives of the Corps on the other hand. Differences between wetlands value analyses were discussed. The minutes of the meeting reflect that "Mr. DelVicario [of the Corps] indicated that the Corps would re-examine the proposed wetlands value in light of the information presented at this meeting. However, his impression was that there would not be a significant change in the values."

N.J. DEP and the Hackensack Meadowlands Development Commission approved the mitigation plans and advised the Corps of their approval.

On December 15, 1982, Colonel Smith, District Engineer, met with representatives of the Corps' Environmental Analysis Branch. The purpose of the meeting was to allow Colonel Smith, as permit decision maker, the opportunity to review all aspects of the application with his staff members. The minutes of the meeting reflect that the following took place:

Dr. Suszkowski opened the meeting by describing the subject proposal. The major issues in the subject application were discussed. These issues included fish and wildlife values, public and private need, mitigation, alternatives and the need for an EIS.

Dr. Hook stated that the project as proposed would result in a finding of significant impact which could necessitate the preparation of an EIS. Alternatives were discussed which would not have a significant impact on the project area. Of these alternatives, two were recommended by the staff. One alternative to the proposed project involves reducing the areas to be filled by eliminating the construction of office buildings in the Mill Creek wetlands. The second alternative involves increasing the amount of mitigation by providing an additional 25 acres of high quality brackish marsh and replacing the proposed freshwater impoundment in the Mill Creek Basin with high quality brackish marsh. Both alternatives would compensate for approximately 80-85 percent of the loss of wetlands value.

Dr. Hook indicated that in the professional judgment of his staff 80-90 percent is considered to be enough compensation to justify a nonsignificant impact on wetlands.

Colonel Smith stated that he would present the two alternatives to the applicant and he would make his decision pending a response from the applicant.

The need for the additional 25 acres of high quality brackish marsh arose from the reduction of the Corps' evaluation of the enhanced wetlands value from 7 points to 6.5 points. On December 17, 1982, the Corps issued its findings. The findings noted the specific objections of FWS, NMFS and EPA. It noted the project's conformity with the New Jersey coastal zone management program and zoning by the Hackensack Meadowlands Development Commission; and it noted New Jersey Department of Environmental Protection certification of water quality. The findings included "that the proposed work is in the general public interest" but recommended that to insure minimum impact the permit be granted subject to conditions assuring the mitigation plan compensate for 80 percent of the value of the wetlands being filled.

Accompanying the Corps' findings was a Section 404(b)(1) evaluation which, among other things, evaluated the alternatives to constructing the project in the proposed manner. The Corps concluded that "the applicant had not adequately demonstrated their contention that a reduction in the size of one part of the proposed project would affect the viability of the entire project." It proceeded therefore to examine the feasibility of minimizing the activities of each of the three project components, namely — the Research Park, the light industrial portion and the highway commercial portion. After conducting this analysis, the Corps concluded that "practical alternatives to the proposed actions having less adverse effects on the aquatic ecosystem are not available to the application." This general conclusion was based upon the findings that:

The "no action" alternative is not a practicable alternative, because it will not achieve the basic purpose of the proposed activity.

Minimizing the activity of the proposed site to partially exclude wetland areas is reasonable but not a practicable alternative. Significant reduction is not a practicable alternative as the project would no longer be viable from a marketing and economic standpoint.

There are no practicable alternative sites for the proposed activities in the areas within the reasonable radii of three, ten and 30 miles of the project site to look for practicable alternative sites.

In sum, the Corps concluded that the proposed discharge of fill would be in compliance with Section 404(b)(1) guidelines.

In addition the Corps' December 17, 1982 findings were accompanied by a finding, signed by the Chief of its Environmental Analysis Branch, "that the subject work will not have a significant impact on the project area; thus an environmental impact statement is not required."

This finding of no significant impact had been preceded by a study by the Corps' Environmental Analysis Branch. The Branch [14 ELR 20728] in its report of its analysis ranked environmentally preferred alternatives as follows, starting with the most preferred:

1. No action.

2. Develop on only upland areas.

3. The project as proposed (with 80-90 percent mitigation) and,

a. Elimination of all or much as possible of the warehouse fill and,

b. Elimination of the "office building" portion of the mill basin fill, while turning the "mall" fill parallel to Route 3.

4. The project as proposed (with 80-90 percent mitigation) and (b), as above.

5. The project as proposed (with 80-90 percent mitigation)

6. The project as proposed (with 72 percent mitigation).

The Environmental Analysis Branch was of the opinion that alternatives one through five would result in a finding of no significant impact by it, but implementation of alternative six (72 percent mitigation) would result in a finding by the Branch of significant impact.The Branch, when describing these various alternatives, computed mitigation using the Corps' methods and not the methods advocated by EPA, FWS and NMFS.

On December 17, 1982, Colonel Smith advised the other federal agencies of his decision that the proposed project would not have a significant effect upon the environment so as to require the preparation of an environmental impact statement. The basis for this conclusion, he noted, was the provision for 80 percent mitigation for lost wetlands. He advised the agency that, since the time of their earlier objections Hartz, upon the Corps' instructions, had agreed to enhance an additional 25 acres of brackish marsh in the northern end of Mill Creek Basin and instead of constructing a freshwater impoundment in the Mill Creek Basin the applicant would make the area into a high quality brackish marsh. Colonel Smith stated: "The enhancement of 63 acres of brackish marsh and the creation of 84 acres of freshwater wetlands should satisfy your agency's concerns."

The final mitigation plan did not satisfy EPA's, FWS's and NMFS's concerns and each expressed strong disagreement with the Corps' position for the reasons previously stated and for the reason that Hartz had not clearly demonstrated that there were no practical alternatives to the proposed filling. These agencies urged the Corps to deny a permit and, in any event, to require an environmental impact statement.

On January 19, 1983, the Corps issued a permit to Hartz. Thereafter, work pursuant to the permit began and this actionensued.

Plaintiff advances four principal substantive reasons why the granting of the permit was unlawful: First, it is contended that the Corps unlawfully distorted its review of the project by permitting Hartz to proceed on the basis of consideration of the project without including the residential area. Second, it is contended that the determination that Hartz had complied with NEPA and the Clean Water Act was arbitrary and capricious because it was based upon a distorted evaluation of the mitigation plan. Third, it is contended the Corps' conclusion that the effects of the project is not significant so as to require an environmental impact statement, is arbitrary and capricious, given the magnitude of the destruction of wetlands. Fourth, it is contended that neither Hartz nor the Corps demonstrated that there were no practicable alternatives that would do less damage to the wetlands.

IV. Conclusions of Law

The Court has jurisdiction over this case by virtue of 28 U.S.C. Section 1331 and 33 U.S.C. Section 1365. Preliminary injunctive relief may be granted only upon a showing that (i) plaintiff has a likelihood of success on the merits, (ii) plaintiff will be irreparably injured pendente lite if the relief is not granted, (iii) the granting of a preliminary injunction will not cause undue harm to other interested parties, (iv) the public interest will not be adversely affected by the granting of the injunction.

The May 13th hearing was directed to the question of plaintiffs' likelihood of success on the merits. If such a likelihood exists, it will be necessary to address the other criteria for granting preliminary injunctive relief. If such a likelihood does not exist, plaintiffs' application for a preliminary injunction will, of course, be denied.

I turn therefore to the four grounds upon which plaintiff relies to establish invalidity of the permit.

A. Failure to Include the Residential Project

The National Environmental Policy Act which I referred to previously as NEPA, 42 U.S.C. Section 4321 et seq., requires federal agencies to prepare a detailed environmental impact statement on every "major Federal action significantly affecting the quality of the human environment . . ." 42 U.S.C. Section 4332(c). The requirements of this provision are set forth in the regulations of the Council on Environmental Quality, 40 CFR Part 1500.These regulations are binding on the Corps. Andrus v. Sierra Club, 442 U.S. 347, 357 [9 ELR 20390] (1979); 33 CFR 230.1. They are supplemented by regulations promulgated by the Corps itself. 33 CFR Part 230.

Section 404 of the Clean Water Act establishes the permit requirements for discharge of dredge or fill material into the waters of the United States, 33 U.S.C. Section 1344. Under Section 404(b)(1) of the Clean Water Act, 33 U.S.C. Section 1344(b)(1), EPA has promulgated guidelines for the Section 404 permit process. 40 CFR Part 230 (1982). These guidelines are binding on the Corps of Engineers. 33 U.S.C. Section 1344(b)(1). 40 CFR 230.2.

The Fish and Wildlife Coordination Act established the role of the Fish and Wildlife Service (and, by Executive Order, the National Marine Fisheries Service (NMFS), 35 Federal Regulation 15627 (1970)), in all federal actions affecting the nations' waters.

Before any federal agency may issue a permit authorizing modification of any body of water, it must first "consult with the United States Fish andWildlife Service . . . with a view to the conservation of wildlife resources by preventing loss of and damage to such resources as well as providing for the development and improvement thereof . . ." 16 U.S.C. Section 662(a). Recognizing this mandate, the Corps' regulations for the Section 404 permit program provide that the views of the Fish and Wildlife Service are entitled to "great weight" in its permit deliberations. 33 CFR Section 320.4(c) (as revised in 47 Federal Regulation 31784, 31804 (1982)).

The standard of review of the Corps' decision not to prepare an environmental impact statement is whether its determinations were reasonable under the circumstances. Township of Springfield v. Lewis, 702 F.2d 426 [13 ELR 20591] (3d Cir. 1983), applying Township of Lower Alloways Creek v. Public Service Electric & Gas Company, 687 F.2d 732 [12 ELR 21029] (3d Cir. 1982).

Initially plaintiffs assert that the deletion of the residential development for the project violates a number of regulatory provisions, namely:

40 CFR 1508.27(b)(7) which requires that an agency, when determining whether an action has a significant impact on the environment under NEPA, must consider "whether the action is related to other actions with individually insignificant but cumulatively significant impacts. Significance exists if it is reasonable to anticipate a cumulatively significant impact on the environment. Significance cannot be avoided by terming an action temporary or by breaking it down into small component parts."

40 CFR Section 230.(1)(c) which in defining the purpose of Section 404(b)(1) Clean Water Act guidelines states: "Fundamental to these Guidelines is the precept that dredged or fill material should not be discharged into the aquatic ecosystem, unless it can be demonstrated that such a discharge will not have an unacceptable adverse impact either individually or in combination with known and/or probable impacts of other activities affecting the ecosystems of concern."

40 CFR Section 230.11(g)(2) which defines the cumulative effects on the aquatic ecosystem as follows: "Cumulative impacts are the changes in an aquatic ecosystem that are attributable to the collective effect of a number of individual discharges of dredged or fill material. Although the impact of a particular discharge may constitute a minor change in itself, the cumulative effect of numerous such piecemeal changes can result in a major impairment of the water resources and interfere with productivity and water quality of existing aquatic ecosystems."

33 CFR Section 320.4(b)(3), which is among the provisions defining policies of the Corps of Engineers when evaluating permit [14 ELR 20729] applications provides: "Although a particular alteration of wetlands may constitute a minor change, the cumulative effect of numerous such piecemeal changes often results in a major impairment of the wetland resources. Thus, the particular wetlands site for which an application is made will be evaluated with the recognition that it is part of a complete and interrelated wetland area. In addition, the District Engineer may undertake reviews of particular wetland areas in consultation with the appropriate Regional Director of the Fish and Wildlife Service, the Regional Director of the National Marine Fisheries Service, of the National Oceanic and Atmospheric Administration, the Regional Administrator of the Environmental Protection Agency, the local representative of the Soil Conservation Service of the Department of Agriculture, and the head of the appropriate state agency to assess the cumulative effect of activities in such areas."

The evidence strongly suggests that Hartz revised its plans and excluded the residential development upon advice from the Corps that an EIS would likely be necessary if the residential development on Mill Creek were included and would not be necessary if a residential development were excluded. In this sense it can be said that the plans were revised in order to avoid the necessity of preparing an environmental impact statement.

I do not believe that this factor alone renders the Corps' decision not to require an environmental impact statement arbitrary and capricious. The test of the lawfulness of the Corps' determination in this regard has been established in the cases and regulations. This test is applicable whatever Hartz' motive may have been in revising the plan, although Hartz' motives may be evidential in determining if for EIS purposes the Corps may properly view the project as finally submitted separate and apart from the residential construction.

It has been stated that "characterizing any piecemeal development of a project as insignificant merits close scrutiny to prevent the policies of the National Environmental Protection Act from being nibbled away by multiple increments, no one of which may in and of itself be important enough to compel preparation of the full environmental impact statement." Alpine Lakes Protective Society v. Schlapfer, 518 F.2d 1089, 1090 [5 ELR 20322] (9th Cir. 1975).

Two cases in particular provide guidance in determining whether a development was being undertaken in a piecemeal fashion so as to constitute an evasion of NEPA. In Indian Lookout Alliance v. Volpe, 484 F.2d 11 [3 ELR 20739] (8th Cir. 1973), the Court was required to determine how much of a proposed highway system had to be environmentally considered under NEPA in the preparation of an EIS. The district court required the environmental impact statement to include a 14 mile project for which the state had sought federal funding. Plaintiffs sought an environmental impact statement covering the entire 1,877 mile system which was designed to be constructed with federal funding. The Court found that a balancing process was necessary and held that for highway purposes in considering environmental effects, "the minimum length of state highway projects that are supported in part by federal funds must be extended to embrace projects of a nature and length that are supportable by logical terminii at each end." At Page 19. Further, it found that the 14 mile stretch which the district court found appropriate "does not have an independent vitality of its own." At page 19. It did not require, however, that an environmental impact statement be prepared for the whole system.

In Kleppe v. Sierra Club, 427 U.S. 390 [6 ELR 20532] (1976), the Court considered NEPA as it applied to federal coal leasing. The district court had granted summary judgment against plaintiffs who had sued to prevent further coal leasing until an environmental impact statement was prepared covering the entire region in which the government might ultimately enter into leases. The Court of Appeals reversed, ruling that if the government agency intended to control development of a region, an impact statement would be required.

The Supreme Court reversed the Court of Appeals. In response to plaintiffs' argument that the interrelated environmental and programmatic factors required that there be a comprehensive impact statement, the Court stated:

Thus, when several proposals for coal-related actions that will have cumulative or synergistic environmental impact upon a region are pending concurrently before an agency, their environmental consequences must be considered together. Only through comprehensive consideration of pending proposals can the agency evaluate different courses of action.

Agreement to this extent was with respondents' premise, however, does not require acceptance of their conclusion that all proposed coal-related actions in the Northern Great Plains regions are "so related" as to require their analysis in a single comprehensive impact statement.

The determination of the region, if any, with respect to which a comprehensive statement is necessary requires the weighing of a number of relevant factors, including the extent of the interrelationship among proposed actions and practical considerations of feasibility. Resolving these issues requires a high level of technical expertise and is properly left to the informed discretion of the responsible federal agencies.

We cannot say that petitioners' choices are arbitrary. Even if environmental interrelationships could be shown conclusively to extend across basins and drainage areas, practical considerations of feasibility might well necessitate restricting the scope of comprehensive statements.

I conclude from these cases that EIS consideration may be given to a project which has independent economic viability even though future projects are contemplated. I further conclude that the agency involved has considerable discretion in the exercise of its judgment in determining whether a project or possible future porject must be considered either as a part of a required environmental impact statement or in determining whether an environmental impact statement is required at all.

Here Hartz' March, 1982 application which included the residential complex stated in the section dealing with alternative sites: "To divide the project into its constituent parts and distribute it throughout the District would undercut the viability of each part and the project concept as a whole."

The Corps was aware of this issue. An internal Corps memorandum dated April 26, 1982 stated in part:

(a) An application would be submitted for light industrial and commercial development (this is about three quarters of the entire tract).

(b) A second application would likely be submitted in the future for "island residential." All in attendance agreed this was the more controversial area.

Applying the cases cited above, I conclude that the Corps was not acting arbitrarily or capriciously and its determination was reasonable when it limited its consideration of the necessity of an environmental impact statement to the project as ultimately proposed by Hartz. It based its determination on an extensive record which took into account not only the Hartz property, but the entire Meadowlands area and Master Plan of which this project is a part. The fact that Hartz asserts in its March, 1982 application that dividing a project into its constituent parts would undercut the viability of eachpart is not necessarily inconsistent with the finding that the project without residential segment is independently viable.

Plaintiffs urge the cases upon which I rely have been superseded by the subsequent enactment of the regulation set forth in 40 CFR Section 1508.27(b)(7), which requires that the agency must determine "whether the action is related to other actions with individually insignificant but cumulatively significant impacts." The regulation advises that "significance exists if it is reasonable to anticipate a cumulatively significant impact on the environment. Significance cannot be avoided by terming an action temporary or by breaking it down to small component parts."

I do not believe this regulation in any way changes the rulings in the cases I have cited. In Kleppe the Court defined what constituted "action" within NEPA, stating that "a court (and presumably a regulatory agency) has no authority to part from the statutory language and, by a balancing of court devised factors, determine a point during the germination process of the potential proposal [14 ELR 20730] at which an impact statement should be prepared." At 406.

The regulation tracks the language of the statute and of Kleppe, speaking in terms of relationships to other actions. There was no other action pending in the present case and the Corps could reasonably have found, as it did, that the project was not such a small component as to violate Kleppe and Indian Lookout Alliance.

B. The Corps' Evaluation of the Hartz Mitigation Plan

Plaintiffs urge that the Corps, when concluding that an environmental impact statement was not required for the Hartz project, relied heavily on its assessments of Hartz' mitigation plan, that their assessment was arbitrary, resulting from the manipulation of the figures and that, therefore, the conclusion that an environmental impact statement was unnecessary, was tainted and unlawful.

I have described in the statement of facts the various methods which the federal agencies employed in an attempt to weigh in mathematical terms the quality of the wetlands on the project site before and after the filling had been effected. All the participants in the evaluation process had to make highly subjective judgments concerning numerous factors in arriving at the point values assigned to the wetlands. The assigned values inevitably reflected the end result which the evaluators sought. EPA, FWS and NMFS had long opposed the development of the Hackensack Meadowlands contemplated by the New Jersey Coastal Zone Management Program and HMDC's zoning plan. Opposition to this project was consistent with their opposition to the overall program for the Meadowlands. It would be hard to believe that the evaluations made by these agencies and their methodologies did not reflect their policy positions. On the other hand the Hackensack Meadowlands Development Commission, New Jersey Department of Environmental Protection and Hartz eagerly sought to have the project implemented and this objective must have been reflected in their evalutions.

This juggling of mathematical values derived from highly subjective opinions may be helpful in arriving at a conclusion, but it cannot be determinative of the question of mitigation. Nor do I believe it is critical that the Corps used the consensus valuation of the virgin site in its own evalution of the enhanced acreage or that the Corps and the other federal agencies disagreed about what constituted mitigation. The Corps at conferences and in written communications was fully apprised of the opinions and views in this regard of the other federal agencies and its own environmental experts had arrived at their own judgments.

The Corps found on the basis of a substantial record that the mitigation plan would substantially compensate for the loss of acreage through the fill operations. At present the entire wetlands portion of the tract is highly polluted. It supports little in the way of plant, fish or wildlife. Dense and unproductive reedgrass grows throughout. Although 127 acres of this low quality wetlands will be filled, the mitigation plan calls for major efforts to preserve 151 acres of wetlands and convert them into freshwater and brackish marsh providing a varied and productive plant, fish and bird habitat. This effort is described in the Corps' December 17th, 1982 assessment of environmental effect and accompanying reports and spelled out in detail in Hartz' mitigation plan. On the basis of this record it cannot be said that the Corps' conclusion that the mitigation plan substantially compensates for expected lost wetland value is unreasonable, notwithstanding the fact that certain, but not all, other government agencies strongly disagree with this conclusion.

C. Significance of the Impact

NEPA requires that an agency prepare an environmental impact statement whenever a proposed major federal action will significantly affect the quality of the human environment. 42 USC Section 423(2)(c). As stated in Lower Alloways Creek Township supra:

The key word in this statutory phrase, of course, is "significant." For guidance in its interpretation we look to NEPA-implementing guidelines promulgated by the Council on environmental quality, (CEQ) and adopted by the NRC. These regulations — which are entitled to "substantial deference," see Andrus v. Sierra Club supra, 442 U.S. at 356-58, 99 S. Ct. at 2340-2341 — direct that in determining whether a particular activity will give rise to "significant" effects on the environment, an agency take into account considerations of "context" and "intensity." That is, both the short- and long-term consequences for society as a whole, the relevant region, the locality, and any affected interest must be assessed; and those consequences are to be evaluated with respect to a host of factors, including, among other things, the degree to which the proposed action affects public health or safety, the unique geographical characteristics of the surrounding area, the potential for controversy, the possibility of unique or unknown risks, and the action's effect on endangered species. See 40 CFR Section 1508.27 (1981). The regulations make clear, then, that an agency must undertake a comprehensive assessment of the expected effects of a proposed action before it can determine whether that action is "significant" for NEPA purposes. In practice, this pre-EIS analysis takes the form of an Environmental Impact Appraisal. If, after reviewing such an appraisal, an agency determines that its proposed action will have no significant effects upon the environment, the agency issues a "negative declaration" and no further studies are necessary. If, however, it is clear that the human environment will be "significantly" affected, then a full scale EIS is mandatory.

At 739, 740.

I have examined the record of the proceedings involving this application, and I have examined the 1978 EIS for Hartz multipurpose development submitted to the New Jersey Department of Environmental Protection which was utilized by the Corps. The Corps' Environmental Analysis Branch conducted an intensive study of the project after which it prepared an environmental assessment of the Hartz Mountain project. The assessment concluded that impacts are anticipated to occur to water-quality, acquatic and wildlife resources and habitat. However, the assessment noted the applicant had agreed to provide adequate mitigation in order for the Corps of Engineers to make a determination that no significant impact would occur. The environmental assessment finds that the project site is in an environmentally degrading, economically depressed area. The Cromakill Creek Basin is bordered by a light industrial zone; the eastern extension of the New Jersey Turnpike, Route 3 and West Side Avenue. The wetlands on the project site are dominated by dense stands of common reed; representing 94 percent of the vegetation on the site. Other types of wetland vegetation is present in very limited quantities. Water quality is poor, sources of water pollution are numerous. Aquatic resources in the project site are limited.

The evaluation of the mitigation plan by the Corps of Engineers emphasized a comparison of the value of the wetlands in their present condition with the value of the remaining wetlands after enhancement. The mitigation plan includes the development of higher value wetlands, that is to say, wetlands capable of supporting more diverse and more productive vegetation and wildlife.

Expressing concern about the cumulative effect of future projects, EPA's New York regional administrator conceded that "the project in and of itself may not prove detrimental to the functional integrity of the Hackensack Meadowlands."

The Corps in this case was required to make the final judgment. Even if the court or other agencies disagree with its determination, the determination will nevertheless be sustained if on the record before the Court it was reasonable. I cannot find the basis of this record that the Corps' finding that no environmental impact statement is necessary was unreasonable.

D. Availability of Practicable Alternatives

Under the regulations implementing Section 404(b)(1) of the Clean Water Act, 33 U.S.C. Section 1344(b)(1), the Hartz project may not be authorized "if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem." 40 CFR Section 230.10(a)(3). Where, as in the present case, the activity is not water dependent, "practicable alternatives . . . are presumed to be available, unless clearly demonstrated otherwise." 40 CFR 230.10(a)(3). The regulations further provide that "an alternative is practicable if it is available and capable of being done after taking into consideration costs, existing technology, and logistics in light of overall project purposes." 40 CFR Section 230.10(a)(2).

[14 ELR 20731]

Plaintiffs contend that neither Hartz nor the Corps has clearly demonstrated that there are no practical alternatives to filling the 127 acres of wetlands. In particular plaintiffs charge that the Corps failed to consider or rejected without any basis other viable alternatives: First, using alternative design or configurations such as cluster developments that could reduce the acreage of wetlands fill; second, moving the entire development to Cromakill Creek and leaving Mill Creek untouched; and third, relocating the warehouses.

The first of these alternatives which plaintiff proposes is so indefinite and undefined that it forms no basis for analysis. It suffers from the defect referred to in Lower Alloways Creek Township at page 743 in that it failed to advise either the agency or the court of the details of the alternative which plaintiffs urge.

Hartz counters plaintiffs' contention that all developments should be confined to the Cromakill Creek area with the following arguments:

First, the area east of Cromakill Creek is zoned for light industrial purposes and thus is not reasonably available for office or highway commercial use. This area is already proposed for warehouse development. In addition, both North Bergen and the federal government are actively seeking a UDAG grant. "The parties to that grant have agreed that the minimum amount of light industrial development required for the area is at least two million square feet. The applicant is obligated [under the grant] to build that space and the minimum area required to do so is that now set out in the application for light industrial uses." The west side of Cromakill Creek is not suitable for development "because substantial portions of that basin have been reserved from development at the request of the New Jersey Department of Environmental Protection and the HMDC. These lands have been restricted by deed so as to preserve them forever from development." The applicant has donated 25 acres along Cromakill Creek to the Hackensack Meadowlands Development Commission for permanent designation as a greenbelt. "Thus, both the lands subject to deed restrictions and the lands given to the Hackensack Meadowlands Development Commission for wetlands and wildlife management are not available to the applicant to facilitate a 'redesign' of the mitigation plan."

Hartz's second argument is that the site is not appropriate for office building development. The North Bergen Sewage Treatment facility is located on the west on West Side Avenue across from the only office building site. Moreover, on its eastern side, this site faces the Conrail North Bergen freight yards and other industrial uses. The location of this site precludes any use except light industrial. Further, the argument continues, the primary advantage of locating the highway commercial projects on the Mill Creek side lies in the sites proximity and access to Route 3, a major road serving the Town of Secaucus. Plaintiffs' proposed relocation would eliminate this advantage, while simultaneously significantly increasing traffic congestion on West Side Avenue. As a result, facilities would be far less attractive to prospective tenants.

Hartz counters plaintiffs' contention that the warehouse units should be scattered on other sites with the following arguments:

It is neither logical, cost effective nor in furtherance of the overall project purposes to build these warehouses on small tracks scattered throughout Northern New Jersey. Prospective tenants want to locate in "an industrial business center where they can be among similar business enterprises, close to Manhattan, close to transportation facilities, as well as hotels, restaurants and other amenities. A successful project requires a large scale development, offering all of these things . . . which is of sufficient size to be self-sustaining as a magnet to attract business." If Hartz reduced the project, it argues, to the degree suggested, the costs (bridge, roadway improvements, open space and wetlands enhancement) would be borne by fewer potential patrons and threaten the viability of the project. Hartz maintains that it engaged in an exhaustive analysis of all tracts of sufficient size to accommodate its entire warehouse development proposal and thus met its responsibility to demonstrate clearly that there are no practicable alternatives.

A significant portion off the record contains material dealing with alternative sites surveyed by Hartz' consultants, critiques and questions by Corps representatives, response by Hartz, comments by other federal agencies. The Corps conducted a review of practicable alternatives for location of the project.It determined that the basic purpose of the proposed activity was the development of raw land for the purpose of profitably building a commercial-industrial complex.

The Corps identified three practicable alternatives: (i) no action, that is, abandonment of the plan, (ii) minimization of activity to exclude all or part of the fill activity, and (iii) acquisition and development of another site. The no action alternative was rejected because it did not achieve the basic purpose of the proposed activity.

The applicant argued that the shopping center-office park-warehouse distribution center was an inextricably related project which required development on a single interconnected site. This critical mass theory would require any alternative to have the capability of handling the entire multi-faceted project. The Corps of Engineers rejected this theory. The Corps of Engineers considered the project as three separate activities, that is to say, shopping center, office park, and warehouse distribution center. The Corps of Engineers concluded that minimization of the three activities would not allow the basic purpose of the activity to be achieved. It also noted that in some instances the zoning by the Hackensack Meadowlands Development Commission did not allow the concentration of the proposed activity in a limited space.

In its analysis of alternative sites, the Corps of Engineers conducted a survey of northern New Jersey and considered sites for light industrial, office or retail development, either separately or in combination. It considered sites within and without the Hackensack Meadowlands District. For office research park space, two sites in the Hackensack Meadowlands District were identified; however neither could be acquired. Two other sites created by sanitary landfills were located; however, a lack of access and the topography of the sites rendered the sites impractical. Outside the Meadowlands, six sites were identified. Three of these sites were being developed. One property was not a practical economic alternative; two other parcels lacked sufficient highway access and parking.

A survey of light industrial space concluded that possible sites within the Meadowlands District lacked access to transportation arteries. Several sites outside of the Meadowlands District were also wetlands, were being developed or were not properly zoned. A survey of retail space within the Meadowlands District concluded that the available sites lacked access, were being developed, cannot be acquired, were improperly zoned, or were wetland areas. No available sites outside the Meadowlands District were identified.

There is support in the record for the Corps' conclusion that Hartz has clearly demonstrated there are no practicable alternatives to each portion of the project.

Conclusion

Based on the foregoing discussion I conclude that plaintiffs have not established that they have a likelihood of success of the merits. It follows that their application for a preliminary injunction should be denied.