New York City v. United States

Civ. No. 71-C-1639 (344 F. Supp. 929, 4 ERC 1646) (E.D.N.Y. June 7, 1972)

In an action to annual an order of the Interstate Commerce Commission which authorized the abandonment of a freight railroad serving Bush Terminal in New York City, the City and State of New York argue insufficient compliance with NEPA, noting that replacement of the railroad by truck service could increase air pollution, and make achievement of the 1974 Ambient Air Quality Standards under the Clean Air Act more difficult. Noting that the ICC had ordered a draft environmental statement prepared and served on several government agencies, and had held five days of public hearings at which the draft statement was discussed, and had made findings that the environmental effects of substitution of truck for rail service were not significant, a three-judge court finds compliance with the letter of NEPA and that the findings of the ICC are supported by substantial evidence and are not an abuse of discretion. Only the portions of the opinion concerning environmental issues are reproduced here. An earlier decision in the case, together with the factual setting, will be found at 2 ELR 20275.

Counsel for Plaintiff City of New York
Louis L. Walters
Brooklyn, N.Y.

Peter C. Demetri
Garden City, N.Y.

Counsel for Intervening Plaintiff State of New York
John C. McTiernan
Assistant Counsel
New York State Dep't of Transportation

Counsel for Defendant Interstate Commerce Commission
Theodore C. Knappen
Interstate Commerce Commission
Washington, D.C.

Counsel for Defendant Bush Terminal Railroad
G. Clark Cummings
New York City

[2 ELR 20688]

Friendly, Chief Circuit Judge.:

* * *

II.

Environmental Impact

Together with its order directing further hearings following remand, the Commission issued a draft environmental impact statement to provide a basis for exploration of the environmental consequences of the Railroad's abandonment at the hearing.¹² Subsequently, the City's position before the Commission was that under the Clean Air Act, 42 U.S.C. § 1857 et seq., the National Primary Ambient Air Quality Standards must be met in the metropolitan area by 1974 or the federal government can mandate a solution, and that in the area of Brooklyn where Bush Terminal is located, air pollution is at its worst, with the particulates standard being exceeded by 120 percent. The City does not consider the industry presently located in the Bush Terminal area to be an important source of air pollution. Nor does it anticipate that the new industry which it hopes to attract to the area as a part of its redevelopment efforts, see note 9 supra, will contribute significantly to the problem. However, it argues that, absent rail service, 35,000 additional trucks annually will be operated in the Bush Terminal area — and this does not take into account the ultimate effect of its development plans. It is this potential for a large influx of new vehicular traffic which alarms the City; operating on the assumption that 60 percent of the additional trucks would be diesel powered and 40 percent gasoline powered, it estimated that the associated emissions would be 19,000 tons of carbon monoxide, 400 tons of particulates, 5,200 tons of nitrogen oxides, and 2,200 tons of hydrocarbons.

The Railroad attempted to demonstrate that the abandonment would have no adverse environmental effect. It contended that essentially all trucks introduced to replace the discontinued rail service would be diesel powered; that the freight previously handled by it could be transported by 14 vehicles operating through each eight hour working day, in contrast to the City's figure which reflects 33 vehicles so operating; and that, all else being equal, the smaller but more numerous truck engines would generate no more pollution than the Railroad's locomotive diesel engines.¹³

On the basis of the supplemented record, the Commission concluded that two primary factors associated with abandonment might increase air pollution in the Bush Terminal area: "(1) the substitution of the present rail service by trucks using gasoline engines; (2) the possible increase in fuel consumption, and thus emissions, by diesel trucks substituted for diesel trains." With respect to the potential impact of the first factor, it recognized that "the gasoline engine produces a much greater level of certain pollutants [in particular, carbon monoxide and nitrogen oxides] than its diesel counterpart," but found that "heavy-duty, diesel-powered trucks would be the primary mode of transportation in the [Bush Terminal] area, not gasoline-powered trucks." As to increased consumption of diesel fuel, the Commission observed that the Railroad's effort to equate the amount of pollution generated by its diesel locomotives with that from the trucks which would replace those locomotives ignored the fact that the locomotives operated over a distance of only [2 ELR 20689] 1.8 miles to move cargo from the Bush Terminal area to the carfloats operating to the New Jersey Terminal, whereas to move cargo between the same two points by truck would involve a trip of either 12 or 25 miles.¹⁴ Hence, the Commission considered it "reasonable to assume that a number of trucks greater than the number of trains presently being used, traveling a greater distance than the trains presently operate, would consume more fuel than the trains now consume." However, it further noted that "in the area of prime concern, the Bush Terminal region in Brooklyn, the trucks would be traveling approximately the same distance as the trains." In addition, the Commission observed that any possible adverse effect upon air pollution as a result of the abandonment may be ameliorated — if not avoided completely — by the continued provision of rail service in the Bush Terminal area by New York Dock; by the departure of users from the area if rail service ceases; and by the reduction in truck traffic as a result of the elimination of the secondary truck traffic of rail users who do depart. Considering all these factors, the Commission believed its "conclusionmust be that the proposed abandonment will not have a significant environmental impact."¹⁵ In addition, it applied the balancing test suggested by Calvert Cliffs' Coordinating Committee v. United States Atomic Energy Commission, 449 F.2d 1109, 1113 (D.C.Cir.1971), and concluded that the serious economic plight of the Railroad outweighed whatever minimal harm to the environment might result from the abandonment. The Commission modified its draft environmental impact statement to reflect its conclusions, and by reference incorporated in the final statement the portion of its supplemental report analyzing the environmental consequences of abandonment.

The crux of our remand of this case to the Commission was that in permitting abandonment of the Railroad's operations, it had failed to follow the detailed steps prescribed in § 102(2) of NEPA, 42 U.S.C. § 4332(2), which were designed to compel full agency exploration and evaluation of the environmental consequences of contemplated action and thus to ensure that the initial decision-maker acted in full awareness of those consequences. See 337 F. Supp. at 160. See also Greene County Planning Bd. v. FPC, 455 F.2d 412, 419-420 (2 Cir. 1972); Calvert Cliffs', supra, 449 F.2d at 1112-1114, 1118-1119. As suggested by our action, an important aspect of judicial review of agency action under NEPA is of a procedural nature, i.e., to ascertain that the agency has "fully and in good faith" considered all of the factors and appropriately followed all of the steps mandated by NEPA, see Calvert Cliffs', supra, 449 F.2d at 1115. Clearly, the Commission has now fulfilled its obligation in this respect

Although not compelled to do so by the terms of our remand, see 337 F. Supp. at 164, the Commission held five days of hearings, a substantial portion of which were focused on the environmental questions. All parties were given full opportunity to present expert evidence on the environmental aspects of the case. As is evident from our brief summary of the Commission's evaluation of the supplementary record and the parties' contentions, it has now taken the "hard look" at the potential environmental consequences of the abandonment which NEPA contemplates. See Natural Resources Defense Council, Inc. v. Morton, 458 F.2d 827 (D.C.Cir. 1972). Beyond this, from its evaluation, the Commission has prepared a final statement detailing the abandonment's environmental impact. See NEPA § 102(2) (C). Each area of environmental concern specified in § 102(2) (C) has received its attention. While the final impact statement is terse and of a conclusory nature, compare Hanly v. Mitchell, 460 F.2d 640 (2 Cir. 1972), it is merely the end result of the Commission's extensive analysis — which was incorporated by reference — of the large amount of environmental evidence introduced before the hearing examiner. As noted earlier, the Commission also prepared a draft impact statement in advance of the hearing. This procedure was consonant with that mandated in Greene County Planning Bd. v. FPC, supra, 455 F.2d at 422, where the Second Circuit held that the FPC violated "NEPA by conducting hearings prior to preparation by its staff of its own impact statement." The net effect of the Commission's studied adherence to § 102 (2) (C) of NEPA on remand has been — as Congress appears to have intended — "to aid in the [agency's] own decision-making process and to advise other interested agencies and the public [, see note 12 supra,] of the environmental consequences of planned federal action." Calvert Cliffs', supra, 449 F.2d at 1114.

The State nevertheless seems to argue that because the Commission's analysis was couched in terms of alternatives and evidenced some uncertainty as to the precise environmental consequences of abandonment, it falls short of the level of refined and systematic consideration required by NEPA, cf. Calvert Cliffs', supra, 449 F.2d at 1113. We disagree. Because of the very nature of this case, the Commission had to grapple with a large number of factors which are not readily reduced to certainty, e.g., the ratio of diesel to gasoline trucks; the probability of continued rail service in the Bush Terminal area by New York Dock; the number of users who will depart from the area if abandonment occurs; and the effect of the departure of users on secondary truck traffic. But the Commission's report evidences no uncertainty as to its ultimate conclusion that, in light of all relevant factors, the abandonment "will not have a significant environmental impact."

The State also suggests that the Commission erred in limiting its consideration of the environmental impact of the abandonment to the Bush Terminal area. "[C]rabbed" administrative interpretation of NEPA has been thoroughly castigated. See Calvert Cliffs', supra, 449 F.2d at 1117-1119. But this is not such a case. The Commission gave consideration to the full spectrum of possible environmental consequences of abandonment, see supra & note 15. While the Commission naturally focused on the Bush Terminal area since this is where the Railroad operates, its report recognized evidence of environmental consequences elsewhere in the New York area due to increased truck traffic, see note 14 supra, and we thus think it reasonable to conclude that consideration of this evidence is implicit in the balance finally struck by the Commission between the economic and environmental factors at play in this case.

Having determined that the Commission has now complied with the letter of NEPA, our remaining function with respect to the agency's substantive conclusions is extremely limited. Under NEPA, responsibility for evaluation and consideration of the environmental consequences of abandonment resides in the first instance with the Commission. Compare, e.g., Greene County Planning Bd. v. FPC, supra, 455 F.2d at 420; Calvert Cliffs', supra, 449 F.2d at 1119. As observed in another case involving substantial environmental issues, albeit before the passage of NEPA, "[t]his court cannot and should not attempt to substitute its judgment for that of the Commission." Scenic Hudson Preservation [2 ELR 20690] Conference v. FPC, 354 F.2d 608, 620 (2 Cir. 1965), cert. denied, 384 U.S. 941, 86 S. Ct. 1462, 16 L. Ed. 2d 540 (1966). Normally, of course, judicial review of the merits of an ICC abandonment order is governed by the standards expressed in § 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706, see, e.g., Northwestern Pacific R.R. Co. v. United States, 228 F. Supp. 690 (N.D. Cal.) (three-judge court), aff'd per curiam, 379 U.S. 132, 85 S. Ct. 274, 13 L. Ed. 2d 333 (1964); Cobb v. United States, 297 F. Supp. 169 (M.D.Pa.1969) (three-judge court), and thus is generally limited to determining, in essence, whether the Commission's findings and conclusions are supported by substantial evidence and are not an abuse of discretion. We seriously doubt, however, that the merits of the Commission's determinations under NEPA are subject to even that degree of review. NEPA itself contains no requirement that an agency hold hearings to investigate the environmental consequences of proposed action, and does not specify that findings are necessarily to be made.¹⁶ Moreover, NEPA is often applicable to agency decision making where adjudicatory proceedings are not required. See, e.g., Hanly v. Mitchell, supra, 460 F.2d at 640; Goose Hollow Foothills League v. Romney, 334 F. Supp. 877 (D.Ore.1971); Scherr v. Volpe, 336 F. Supp. 886 (W.D.Wis.1971). No formal record is contemplated in such situations and the function of the courts is thus necessarily limited. Compare Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 414-415, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971). To ensure implementation of the national environmental policy, see NEPA § 101, 42 U.S.C. § 4331, procedures were prescribed in § 102(2) to compel administrative exploration and consideration of environmental consequences. Once it is determined in any particular instance that there has been good faith compliance with those procedures, we seriously question whether much remains for a reviewing court. In this vein, it has been suggested that "reviewing courts probably cannot reverse a substantive decision on its merits, under [NEPA], unless it be shown that the actual balance of costs and benefits that was struck was arbitrary or clearly gave insufficient weight to environmental factors." Calvert Cliffs', supra, 449 F.2d 1115.¹⁷ However, we find it unnecessary to do more than suggest this question now, since the Commission has in fact compiled a substantial record and arrived at findings concerning the environmental consequences of the abandonment which would pass under the standard of review normally applied to abandonment orders.

There was substantial evidence to support the Commission's findings, inter alia, that the trucks replacing rail service would be primarily diesel operated; that diesel fuel consumption would not significantly increase in the Bush Terminal area itself; and that the departure of substantial numbers of users from the Bush Terminal area would limit the increase in truck traffic and would also reduce existing secondary truck traffic.

The root of the disagreement of the City and State with the Commission's substantive conclusions under NEPA appears to be that it improperly balanced the environmental consequences of abandonment against the economic consequences of continued operation by the Railroad. Although, as developed in detail in Part I, the Railroad's economic prospects with a $25 surcharge might be marginally better than suggested by the Commission's report, no significant hope for turning the Railroad around financially has been established; the annual loss which it could anticipate remains in the range of $200,000 — the value relied upon by the Commission — apart from any consideration of its need for large sums for new capital investment and reduction of its substantial liabilities. Hence, we would find it impossible to reverse the Commission on this issue even if the ordinary standard of review applied.¹⁸

12. The Commission served the draft impact statement on the Director of Impact Statements Office, Environmental Protection Agency; the Chairman, Council for Environmental Quality; the Assistant Secretary for Systems Development and Technology, Department of Transportation; the Assistant Secretary for Environment and Urban Systems, Department of Transportation; and the Assistant Secretary for Health and Science Affairs, Department of Health, Education, and Welfare. See NEPA § 102(2) (C), 42 U.S.C. § 4332(2) (C). No comments were received from these officials, although the Regional Chief of the Environmental Protection Agency's Air Programs Branch testified at the February-March hearing.

13. ATA's basic concern, which motivated its intervention before the Commission, was the possible "approval of what it considers an erroneous assumption that diversion of traffic from railroads to trucks would automatically increase air pollution, either under the particular facts of this [case] or generally."

14. The shorter route would involve travel through very congested portions of Manhattan; the longer route, over the Verrazzano Bridge, would mean less travel in congested areas, although significant congestion would be encountered on this route in the vicinity of Bush Terminal.

15. Although the focal point of the environmental issue in this case has been air pollution, the Commission also found that there was little evidence that any substantial amount of soil, water, or noise pollution, or land pollution due to growth would result from the abandonment. It estimated that similar quantities of diesel fuel would be consumed whether rail or truck carrier were used. Finally insofar as § 102(2) (C) (iv) of NEPA requires long-term productivity to be evaluated, the Commission concluded "that the closing of businesses and reduction of employment for the unskilled will not enhance that long-term goal."

16. In this respect, it is of interest that, as a part of the legislative compromise which resulted in the final version of NEPA, the requirement of "a detailed statement by the responsible official" set forth in § 102(2) (C) was substituted for a requirement of "a finding by the responsible official." See 115 Cong.Rec. 29058 (Oct. 8, 1969) (emphasis added). The relevant Senate and House reports were prepared before this substitution was made; the Conference report in discussing § 102 does not comment on the change in language.See Conf.Rep. No. 91-765, 91st Cong., 1st Sess. (1969). NEPA's sponsor, Senator Jackson, in discussing this and other changes on the floor of the Senate, remarked:

The agreed-upon changes . . . would change the language of some of [102's] requirements, but their substance would remain relatively unchanged.

115 Cong.Rec. 29055 (Oct. 8, 1969).

17. More recently, the same court expressed the same thought in slightly different terms:

So long as the officials and agencies have taken the "hard look" at environmental consequences mandated by Congress, the court does not seek to impose unreasonable extremes or to interject itself within the area of discretion of the executive as to the choice of the action to be taken.

Natural Resources Defense Council, Inc. v. Morton, supra, 458 F.2d at 838. (footnotes omitted).

18. We thus have no occasion to consider the constitutional question suggested in 337 F. Supp. at 160.