Lathan v. Volpe

No. 72-2932 (9th Cir. December 7, 1973)

The Federal Aid Highway Act (23 U.S.C. § 128(a)) requires that new location hearings be held for an ongoing freeway project which has not received construction approval since it is not certain that the costs of altering or abandoning the proposed location would outweigh the environmental benefits which might result from the hearings. The court upholds a lower court's decision that the impact statement for the project did not meet the requirements of NEPA under the "observance of procedure required by law" standard of § 706(2)(D) of the Administrative Procedure Act. The court also affirms the district court's ruling that plaintiffs belatedly raised their claim that EIS preparation was improperly delegated to the state high way department by the Secretary of Transportation.

A concurrence argues that the proper test for determining whether new hearings should be held is whether construction has been approved, but noted that when applied to the facts of this case both tests give the same result. For earlier opinions of the circuit court, see 1 ELR 20602 and 2 ELR 20090. For the district court's opinion, see 2 ELR 20545.

Counsel for Plaintiffs are listed at 2 ELR 20546.

Counsel for Intervenors-Appellants, Citizens Against Freeways
Roger M. Leed
Peter Leachaut
Jackson, Goldmark, Bender, Anderson, Whelan, Brotman & Leed
540 Central Building
Seattle, Washington 98104

Counsel for Federal Defendants
Stan Pitkin U.S. Attorney
Albert E. Stephan Asst. U.S. Attorney
1012 U.S. Courthouse
Seattle, Washington 98104

Robert B. Rutledge Regional Counsel
Federal Highway Administration
222 S.W. Morrison
Portland, Oregon 97204

Morton Hollander
Stephen F. Eilperin
Department of Justice
Room 3643
Washington, D.C. 20530

Counsel for State Defendants
Slade Gorton Attorney General
Thomas R. Garlington Asst. Attorney General
Fifth Floor
Highway Licenses Building
Olympia, Washington 98504

[4 ELR 20083]

DUNIWAY, Circuit Judge:

This is another chapter in the continuing saga of Highway I-90 in the state of Washington,¹ specifically that portion which has been proposed to connect two existing interstate highways (I-5 and I-405) near Seattle. Most of the relevant facts and the applicable statutory scheme are set out in our prior opinion in this case, Lathan v. Volpe, 9 Cir., 1971, 455 F.2d 1111, 1114-16. The following events have taken place since then:

In an attempt to comply with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §§ 4331-35, and our mandate in Lathan v. Volpe, supra, the Washington State Department of Highways (WSDII) prepared an environmental impact statement for the so-called "Seattle segment" of I-90.² The impact statement was approved by the Secretary of Transportation on May 5, 1972. Shortly thereafter WSDH sought and obtained Federal Highway Administration (FHWA) approval of the design of the Seattle segment. On August 4, 1972, in response to a motion by intervenors Citizens Against Freeways (Citizens), the district court ruled that [4 ELR 20084] the impact statement did not satisfy the requirements of NEPA and that the statement required by 23 U.S.C. § 138 regarding the proposed taking of parkland (the 4(f) statement) was inadequate. The court continued in effect its order enjoining the further acquisition of land in the proposed freeway corridor until proper impact and 4(f) statements are prepared and circulated. However, the court refused to order new public hearings for the project and struck Citizens' belatedly raised claim that the Secretary of Transportation, rather than WSDH, must prepare the impact statement. These appeals followed.

1. The Impact and 4(f) Statement Issues.³

We affirm the district court's determination that the impact and 4(f) statements do not comply with the statutory standards for the reasons given in its opinion, 350 F. Supp. at 262, 265-68.

The Administrative Procedure Act, 5 U.S.C. § 706, prescribes the scope of review. So far as pertinent here, it provides:

". . . The reviewing court shall —

* * *

(2) hold unlawful and set aside agency action, findings, and conclusions found to be —

(A) arbitrary, capricious, an abuse of discretion, or other not in accordance with law;

* * *

(D) without observance of procedure required by law."

Subsection (2)(A) refers primarily to substantive decisions committed to the Agency in the first instance. It may be applicable (we do not say that it is) where it is claimed that the Agency, in deciding whether to proceed with a project, has diregarded conclusions or considerations stated in an Environmental Impact Statement. The scope of judicial review in such a case is narrow, if available at all (see 5 U.S.C. § 701(a)(2); Citizens to Preserve Overton Park v. Volpe, 1971, 401 U.S. 402, 410; Environmental Defense Fund, Inc. v. Armstrong, 9 Cir., 1973, __ F.2d __, __, fn. 13 (No. 72-2997. Nov. 9, 1973, slip op. at 13, fn. 13)). We could reverse the agency in such a case, if at all, only if we found its action arbitrary, capricious, an abuse of discretion, or contrary to law. We could not substitute our judgment for that of the Agency. See Jicarilla Apache Tribe of Indians v. Morton, 9 Cir., 1973, 471 F.2d 1275, 1279-80, 1281; Citizens to Preserve Overton Park, supra, 401 U.S. at 416.

On the other hand, subsection (2)(D) provides that we may set aside agency action if we find it to be without observance of procedure required by law. We regard the question whether an Environmental Impact Statement complies with the requirements of NEPA as a procedural question, governed by § 706(2)(D). See Jicarilla Apache Tribe, supra, 471 F.2d at 1280-1. In Life of the Land v. Brinegar, 9 Cir., 1973, __ F.2d __, __ (No. 73-1784, Sept. 10, 1973, slip op. at 13) we quoted Jicarilla Apache Tribe, supra, regarding substantive decisions, but then apparently applied § 706(2)(A) to the question whether the EIS satisfied the requirements of NEPA. This appears to be a misreading of Jicarilla Apache Tribe, but our reading of Life of the Land convinces us that the result would be no different if we had thought that § 706(2)(D) applied. We later said as much in Environmental Defense Fund, supra, __ F.2d at __, fn. 7 (Slip op. at 5, fn. 7).

We stand on § 706(2)(D) because NEPA is essentially a procedural statute. Its purpose is to assure that, by following the procedures that it prescribes, agencies will be fully aware of the impact of their decisions when they make them. The procedures required by NEPA, 42 U.S.C. § 4339(C), are designed to secure the accomplishment of the vital purpose of NEPA. That result can be achieved only if the prescribed procedures are faithfully followed; grudging, pro-forma compliance will not do. We think that the courts will better perform their necessarily limited role in enforcing NEPA if they apply § 706(2)(D) in reviewing Environmental Impact Statements for compliance with NEPA than if they confine themselves within the straightjacket of § 706(2)(A). See Wyoming Outdoor Coordinating Council v. Butz, 10 Cir., 1973, __ F.2d __ (No. 73-1477, Sept. 21, 1973).

As Mr. Justice Frankfurter said in a criminal case, in words that are equally applicable to the actions of administrative agencies: "This history of liberty has largely been the history of the observance of procedural, safeguards." McMabb v. United States, 1943, 318 U.S. 332, 347. So it may also be with the history of the environment. See also: Calvert Cliffs Coord. Com. v. United States A.E. Com'n., D.C. Cir., 1971, 449 F.2d 1109, 1114-5; Silva v. Lynn, 1 Cir., 1973 __ F.2d __, (No. 73-1200, July 5, 1973).

This does not mean that the courts are to "fly speck" Environmental Impact Statements.The preparation of such a statement necessarily calls for judgment. But the courts can, and should, require full, fair, bona fide compliance with NEPA. That is what the District Judge did in this case.

It was not an abuse of discretion for the district court to strike Citizens' request that the Secretary of Transportation be ordered to prepare the impact statement. The issue was raised for the first time in an unauthorized brief which was not served on the defendants untilthe day of the hearing, and was inconsistent with Citizens' earlier motion to compel WSDH to prepare an adequate impact statement.

The district court did not err in permitting the inadequate impact statement to be re-circulated as a draft. Circulation of a grossly inadequate draft statement as the draft of a new one could conceivably frustrate the goal of obtaining informed agency and public comment on the environmental consequences of a proposed project, and in some circumstances this could amount to a violation of the responsible agemcy's duty to "develop methods and procedures . . . which will insure that presently unquantified environmental amenities and values may be given appropriate consideration in decision-making . . . ." 42 U.S.C. 4332(B).

However, Citizens has not demonstrated that this is such a case.

2. The Hearing Issues.

Citizens argues that a new public hearing must be held to consider the location of the freeway segment. We agree.

In March, 1963, a public hearing was held pursuant to 23 U.S.C. § 128(a), at which three proposed locations for the freeway segment were discussed. Shortly thereafter, FHWA gave "location approval" for the project. However, at the time of the hearing, section 128(a) required only that the economic effects of a proposed freeway be considered at such hearings. In 1968 and 1970 it was amended, so that it now reads:

"Any State highway department which submits plans for a Federal-aid highway project involving the bypassing of, or going through, any city, town, or village, either incorporated or unincorporated, shall certify to the Secretary that it has had public hearings, or has afforded the opportunity for such hearings, and has considered the economic and social effect on such a location, its impact on the environment, and its consistency with the goals and objectives of such urban planning as has been promulgated by the community. . . . Such certification shall be accompanied by a report which, indicates the consideration given to economic social, environmental, and other effects of the plan or highway location or design and various alternatives which were raised during the hearing or which were otherwise considered."

It is undisputed that the 1963 hearing did not comply with these [4 ELR 20085] requirements. The question thus presented is whether the section 128(a) amendments apply to this project.

The defendants argue that our mandate in Lathan v. Volpe, supra, is res judicata on this issue, because we there rejected Citizens' due process challenge to the 1963 hearing. This is not correct. The case has not proceeded to final judgment, and the applicable doctrine is therefore law of the case, not res judicata. See 1B J. Moore, Federal Practice P0.404[1] (2 ed. 1965). Although the object of both rules of law is finality in litigation, the former applies only to foreclose the reconsideration of matters actually decided. See Electrical Research Prod. v. Gross, 9 Cir., 1941, 120 F.2d 301, 307. All that we decided was that the plaintiffs' attack on the 1963 hearing, on procedural due process grounds, was barred by laches. Because we did not consider the effects of the section 128(a) amendments on the previous appeal, that issue is properly before us now. Id.

We cannot say that Citizens are precluded from raising the hearing issues by laches. At the earliest, the present claim arose in August, 1968, the effective date of the initial amendments to section 128(a). Moreover, NEPA, which has a substantial influence upon our interpretation of the effect of the amendments, was not operative until January 1, 1970, less than six months before this suit was filed. Thus, unlike their allegations of procedural defects in the 1963 hearing, Citizens has not been guilty of an extreme lack of diligence in raising this issue. In addition, WSDH has not even attempted to demonstrate the extent of its reliance upon whatever delay there may have been. In such circumstances, laches should not be applied to bar the litigation of important public issues. Cf. Arlington Coalition on Transp. v. Volpe, 4 Cir., 1972, 458 F.2d 1323, 1329-30.

Turning to the merits, we observe that, while the matter is one of first impression for us, other Circuits have considered the effect of the section 128(a) amendments on ongoing projects. Where the highway in question has actually been under construction, it has been held that they do not apply. Wildlife Preserves v. Volpe, 3 Cir., 1971, 443 F.2d 1273. However, where the Secretary has not authorized construction, new section 128(a) hearings have been required. Monroe Co. Conservation Council v. Volpe, 2 Cir., 1972, 472 F.2d 693, 701-02; Arlington Coalition on Transp. v. Volpe, supra, 458 F.2d at 1337-38. In the latter case, the differences in result have been explained as follows:

"We think that the requirements added to section 128(a) apply to a highway ongoing at the effective date of the amendment if the costs of altering or abandoning the proposed location would not certainly outweigh whatever benefits might be derived therefrom. Id. at 1337.

We believe that this approach is necessary in order to establish a comprehensive system of environmental planning, a goal which Congress has established as the policy of the Federal government. See 42 U.S.C. § 4331. See generally H. Rep. No. 91-378, 91st Cong., 1st Sess. (1969), quoted in 1969 U.S. Code Cong. & Admin. News 2751. We have repeatedly held that agencies are not relieved of the obligation to evaluate the environmental consequences of their actions merely because a particular project was initiated before the effective date of NEPA. See Jicarilla Apache Tribe of Indians v. Morton, 9 Cir., 1973, 471 F.2d 1275, 1282-83; Lathan v. Volpe, supra, 455 F.2d at 1120-21. With respect to such ongoing projects, NEPA procedures must be complied with "to the maximum extent possible" and as early in the agency review process as possible. Lathan v. Volpe, supra. In appropriate cases this may mean total reassessment of the project in light of its potential environmental impact, that is, the consideration of its wholesale alteration or abandonment. See Council on Environmental Quality Guidelines, 36 Fed. Reg. 7724, 7727 (1971). Cf. Jicarilla Apache Tribe of Indians v. Morton, supra.

NEPA itself does not provide for public hearings, and in the absence of independent statutory authority none are required. Jicarilla Apache Tribe of Indians v. Morton, supra, 471 F.2d at 1284-86. However, Congress has declared that public hearings at which environmental and other issues are considered are an integral part of the decision-making process in the Federal-aid highway program. See H. Rep. No. 91-1554, 91st Cong., 2d Sess. (1970), quoted in 1970 U.S. Code Cong. & Admin. News 5392, 5395-97; S. Rep. No 1340, 90th Cong., 2d Sess. (1968), quoted in 1968 U.S. Code Cong. & Admin. News 3482, 3493-94. It would be inconsistent with the Congressional mandate to interpret Federal laws in accordance with the policies of NEPA, 42 U.S.C. § 4332(C), to afford "retroactive" application to that statute's procedural requirements under the principles described above, but to construe the effect of the section 128(a) amendments strictly.

The Federal defendants argue that Policy and Procedure Memoranda 20-8, § 6(d) (January 1969) and 90-1, § 6(c) (August 24, 1971) preclude a new § 128(a) hearing in this case. These memoranda, however, do not have the effect of regulations. See 23 C.F.R. § 1.32(a) (1972), and compare Arlington Coalition, supra, 458 F.2d at 1337, n. 7, with Citizens Environmental Council v. Volpe, 10 Cir., 1973, __ F.2d __ at __ (No. 73-1158, Sept. 19, 1973, slip op. at 6-7).

It may be that some projects were so advanced when the amendments became effective that further accommodation of environmental values is impossible. However, the extent to which a particular project can be reassessed is a decision for the Secretary of Transportation in the first instance, and section 128(a) provides a procedure for developing data upon which he can make an informed decision. See H. Rep. No. 91-1554, supra. Accordingly, we believe that the standard of judicial review formulated by the Fourth Circuit is appropriate: A new section 128(a) hearing must be held for ongoing projects unless "the costs of altering or abandoning the proposed location would not certainly outweigh whatever benefits might be derived therefrom." Arlington Coalition on Transp. v. Volpe, supra, 458 F.2d 1337.

We prefer the Arlington Coalition test to the test announced in Monroe County Conservation Council, Inc. v. Volpe, 2 Cir., 1973, 472 F.2d 693, because we think it more likely to assure that the Congressional purpose will be achieved. The Monroe County test has an appealing simplicity but may well be self-defeating, particularly in highway cases, where projects are frequently broken into segments (see: Named Individual Members of San Antonio Conservation Society v. Texas Highway Dept., 5 Cir., 1971, 446 F.2d 1013, 1022-1024), and the funding of each segment may proceed in stages. Separate P.S.&E. approval may be given for planning, for land acquisition, and for construction. Peterson & Kenner, The Federal-Aid Highway Program: Administrative Procedures and Judicial Interpretation, 2 ELR 50001, 50019 (1972). Which approval will obviate a location hearing? In this case, however, as Judge Lumbard points out, the result is the same under either test.

It cannot be seriously contended that the proposed segment of I-90 involved in this case has reached the point at which a § 128(a) hearing is not required. Although WSDH represents that it has spent some $12,000,000 on the project to date, only a small amountof land in the freeway corridor has been acquired and Federal funds for construction have neither been applied for nor obligated. Compare Monroe Co. Conservation Council v. Volpe, supra; Arlington Coalition on Transp. v. Volpe, supra. Thus, WSDH must afford the public an opportunity for a new section 128(a) hearing.

This conclusion disposes of Citizens' contention that a new hearing must be held to consider the proposed design of the Seattle segment. At this stage of the project, any hearing which satisfies the requirements of section 128(a) will also comply with the regulations regarding design hearings. See Monroe Co. Conservation Council v. Volpe, supra, 472 F.2d at 702. Likewise, we need not consider whether section 128(a) or NEPA require that the draft environmental impact statement be made available to the public before the hearing is held. Current FHWA procedures, which will apply to the new hearing, assure that this will be done. See Federal Highway Administration Policy and Procedure Mem. 90-1 at P6c (1971) quoted in 3 E.L.R. 46106, 46108 (1973).

Appellants' motion for attorneys' fees and costs will be dealt with in a separate order.

On remand, the district court will modify its order to require [4 ELR 20086] that the WSDH provide an opportunity for a public hearing to satisfy the requirements of 23 U.S.C. § 128(a).⁴ In all other respects the order is affirmed.

1. See generally Brooks v. Volpe, 9 Cir., 1972, 460 F.2d 1193; Lathan v. Volpe, 9 Cir., 1971, 455 F.2d 1111; Daly v. Volpe, W.D. Wash., 1972, 350 F. Supp. 253; Lathan v. Volpe, W.D. Wash., 1972, 350 F. Supp. 262; Brooks v. Volpe, W.D. Wash., 1972, 350 F. Supp. 269.

2. This illustrates the practice of state highway departments of dividing proposed freeway projects into small segments for purposes of applying for funding. While this practice is certainly rational in view of the way in which Federal-aid highway funds are allocated, it makes coherent environmental planning extremely difficult. See Peterson & Kennan, The Federal-Aid Highway Program: Administrative Procedures and Judicial Interpretation, 2 Env. L. Rep. 50001 (1972). For the sake of clarity, this opinion will refer to the entire 5-mile segment of I-90 involved in this case as the "freeway segment;" the portion for which an environmental impact statement has been prepared will be referred to as the "Seattle segment."

3. Citizens also argues that the district court erred in permitting WSDH to attach summaries of comments to the environmental impact statement, rather than the comments in their entirety. Although the federal defendants argue that the district court's order is essentially correct, WSDH has stated that it intends to attach all comments received.This concession disposes of the issue in light of our conclusion that Citizens cannot challenge the district court's order permitting WSDH to prepare the impact statement.

4. Our decision makes it unnecessary to pass upon Citizens' motion to augment the record.

[4 ELR 20086]

LUMBARD, Circuit Judge (concurring):

I concur in the judgment of the court and in most of Judge Duniway's opinion. However, I disagree with the standard the majority employs in determining whether a new hearing is required by the amendments in 1968 and 1970 to 23 U.S.C. § 128(a). Judge Duniway adopts the test announced in Arlington Coalition on Transportation v. Volpe, 458 F.2d 1323, 1337-38 (4th Cir.), cert. denied, 409 U.S. 1000 (1972). The Arlington Coalition test requires a balancing of the benefits to be derived from an expanded public hearing on the location of the proposed highway versus the costs of altering the location. I would follow the test applied in Monroe County Conservation Council, Inc. v. Volpe, 472 F.2d 693, 699, 701 (2d Cir. 1972). The Monroe County test requires that expanded hearings pursuant to the amendments to § 128(a) be held whenever the Secretary of Transportation has not yet agreed to fund the proposed highway by approving the state highway department's plans, specifications, and estimates for construction, 23 U.S.C. § 106(a).

I believe that the Monroe County test is preferable because it gives the courts and, more importantly, the administrators a more definite standard. Agency compliance with the various environmental acts is by no means easy, as this case shows. See generally Cramton & Berg, On Leading a Horse to Water: NEPA and the Federal Bureaucracy, 71 Mich. L. Rev. 511 (1973). The Monroe County test solves the problem of the retroactivity of the 1968 and 1970 amendments with a standard that can be easily applied. Hearings on environmental and social effects will be required in those projects in which construction has not yet been approved. In such situations hearings on environmental and social concerns can be the most effective. It is theoretically possible that the Arlington Coalition test could require new hearings in a few cases in which approval has been given but hearings on social and environmental concerns might be of some benefit because no construction has started. These instances are likely to be a small minority of possible cases and losing the advantages of hearings in these instances is, I believe, a small price to pay for the greater certainty and avoidance of litigation and delay that the Monroe County test provides. However, in this case since there has been no approval by the Secretary of Transportation of the plans, specifications, and estimates of the project, the result is the same under either test.