Moloney v. Kreps

No. 77-677 (D.N.J. September 7, 1977)

The court denies plaintiffs' motion for a preliminary injunction against construction of a proposed baler facility for solid waste disposal in the Hackensack Meadowlands after granting plaintiffs' standing to raise environmental claims under the National Environmental Policy Act (NEPA). New Jersey approved operation of the facility, and the Department of Commerce's Economic Development Administration (EDA) approved a construction grant. As residents of the area where the facility will be built, plaintiffs sought to enjoin disbursement of the federal grant funds because the rapid approval of the application was arbitrary and capricious. In addition, plaintiffs sought remand of the case for a full and formal exploration of the environmental issues under NEPA. The court determines plaintiffs lack standing to challenge the EDA grant because they established neither an injury in fact nor that their claim comes within the zone of interests protected by the Local Public Works Act authorizing the grants. Plaintiffs do, however, have standing to raise the claims that an environmental impact statement (EIS) pursuant to NEPA is required and that the agency's consideration of environmental factors of the proposed facility was arbitrary, capricious, and an abuse of discretion. Moving to the merits, the court finds that plaintiffs failed to state a claim under the Resource Conservation and Recovery Act because they filed to show a violation of the Act's standards. On the NEPA issue, the court notes that EDA regulations do not require an EIA for grant applications and determines that EDA reviewed the environmental concerns thoroughly and completely within the time constraints for grant approvals set by those regulations. Relying on the United States Supreme Court's decision in Flint Ridge Development Co. v. Scenic Rivers Ass'n, 6 ELR 20528, the court finds a clear statutory conflict between NEPA and the 60-day time period for grant approvals set by the Local Public Works Act. NEPA's impact statement requirements arethus inapplicable and plaintiffs can show no likelihood of success on the merits of this claim. Furthermore, plaintiffs will not suffer irreparable harm if initial construction is not halted, but defendants will suffer economic injury because of increased costs if the grant is delayed. The motion for a preliminary injunction must therefore be denied.

Counsel for Plaintiffs
Leon Wold
Krieger & Chodash
921 Bergen Ave., Jersey City NJ 07306
(201) 653-2925

Counsel for Defendants
Andrew Higgins, U.S. Attorney
970 Broad St., Newark NJ 07102
(201) 645-6429

William F. Hyland, Attorney General
Dep't of Law & Public Safety
State House Annex, Trenton NJ 08625
(609) 292-4925

[7 ELR 20791]

LACEY, J.:

This matter is before the court on the motion of plaintiffs for a preliminary injunction.

Plaintiffs Timothy E. Moloney, Helen Sudol, and Ann Dale are owners of real estate in the Borough of North Arlington, New Jersey and compose the executive committee of a group of residential and commercial owners of real estate in North Arlington, all of whom object to the construction and operation of a baler facility for solid waste disposal at a site located within 2,000 feet of residential dwellings.

Plaintiffs Sam Vitale, Thomas J. Cassidy, and Richard Cassidy are or were owners of junkyard businesses in North Arlington who rented their premises from the Borough of North Arlington in the Hackensack Meadowlands until their businesses were terminated and relocated or otherwise interfered with by defendants in furtherance of the balefill project.

On October 20, 1976 defendant Hackensack Meadowlands Development Commission (HMDC) submitted an application to defendant State of New Jersey Department of Environmental Protection (DEP) and State of New Jersey Department of Environmental Protection, Solid Waste Administration (SWA) to obtain a certificate of registration and approval for the operation of 1,000-ton-per-day solid waste baler facility to be located in the Borough of North Arlington in Bergen County. The facility, which would have a capacity of 1,000 tons of garbage per day, would help provide solid waste disposal for many northern New Jersey communities. An environmental impact statement was also submitted. The application was approved on February 18, 1977. In the meantime, defendant William D. McDowell, executive director of defendant HMDC, applied to the Economic Development administration (EDA), pursuant to the Local Public Works Capital Development and Investment Act of 1976, 42 U.S.C. § 6701 et seq., for a federal grant of $6.9 million to construct the baler facility, which application was approved.

Plaintiffs filed a petition for leave to intervene, a notice of appeal and for remand for additional evidence as to alternate sites and methods of solid waste disposal with the New Jersey Superior Court, Appellate Division, which petition was denied by the court.

Plaintiffs in their complaint charge defendants HMDC and McDowell with misrepresenting facts in their grant application to the federal defendants and federal defendants with acting in an arbitrary and capricious manner in the rapid processing and approval of the application, and with improperly waiving the requirement of a formal environmental impact statement. They further charge the United States Environmental Protection Agency with failing to prevent the operation of the baler facility and the baler/balefill method of solid waste disposal in a meadowland wetland which method, plaintiffs allege, will result in a condition of substantial endangerment to health and environment contrary to 42 U.S.C. § 6901 et seq., and water pollution contrary to 33 U.S.C. §§ 1151, 1401.

Plaintiffs request preliminary and permanent injunctive relief enjoining defendants from receiving and disbursing the grant funds for the construction of the baler project, that the case be remanded to the appropriate federal and state administrative agencies for public hearing and the preparation of a formal environmental impact statement with consideration of alternate sites and methods for solid waste disposal, and revocation of the federal grant offered to and accepted by defendant HMDC.

This court has jurisdiction of these claims pursuant to 28 U.S.C. § 1331 to review action taken by the Secretary of Commerce under the Local Public Works Act. See Clark v. Richardson, 431 F. Supp. 105, 111-12 (D.N.J. 1977).

In order to obtain judicial review of agency action, plaintiffs must satisfy two requirements: (1) they must demonstrate the existence of a case or controversy within Article III of the Constitution, that is, that they have suffered injury in fact, economic or otherwise, as a result of agency action and (2) they must be persons "adversely affected or aggrieved by agency action within the meaning of a relevant statute," 5 U.S.C. § 702 (1970), that is, the interests they seek to protect must be arguably within the "zone of interests" to be protected by the Act. Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153 (1970); Barlow v. Collins, 397 U.S. 159, 164 (1970); Shiffler v. Schlesinger, 548 F.2d 96, 102 [7 ELR 20127] (3d Cir. 1977).

There are several statutes which must be examined in order to determine whether plaintiffs have sustained injury in fact as a result of agency action.

The Local Public Works Act provides for the authorization by the Secretary of Commerce of grants to state and local governments for local public works. See discussion of the Act and its purposes, 1976 U.S. CODE CONG. & ADMIN. NEWS 1746-47; Clark v. Richardson, supra, 431 F. Supp. 110-11. It is sufficient [7 ELR 20792] to state that as designed by Congress the Act has a two-fold purpose of alleviating the problem of national unemployment and stimulating the national economy by assisting state and local governments in building public facilities.

It is clear that none of the plaintiffs is a government which has applied for a grant under the Act, nor are they unemployed individuals who might benefit from a particular grant. They will suffer no direct injury by the approval or disapproval of any grant.Unlike the plaintiffs in Clark v. Richardson, supra, who were unsuccessful applicants for grant funds who, if their particular grants had been approved, would have received millions of dollars for construction of public works, plaintiffs here cannot apply for a grant. Therefore, plaintiffs can establish no "injury in fact, economic or otherwise," which would give them standing to challenge any non-environmental aspect of EDA's action.

Plaintiffs also must establish that they are within the "zone of interests" to be protected by the Act. As a review of the purposes of the Act makes clear, plaintiffs, as property owners near and tenants on the proposed construction site, cannot be construed to come within the "zone of interests" to be protected by the Act. They are neither state nor local governments entitled to apply for the grants, nor are they unemployed persons who might benefit by a particular proposed grant. I find, therefore, that plaintiffs lack standing to raise the non-environmental issues charged in their complaint. They are the following:

(a) The proposed baler facility is not an existing project capable of being started within 90 days of the grant. Complaint P14, P16 note 1 and P17.

(b) That the application failed to note that New Jersey Board of Public Utility Commissioners' approval was necessary. Complaint P16 note 2.

(c) That the application failed to note and federal defendants failed to consider that private enterprises would be displaced by the baler facility. Complaint P16 notes 2 and 3.

(d) That the application failed to disclose hiring of outside engineering firms. Complaint P16 note 4.

(e) That the application misrepresents unresolved title issues. Complaint P16 note 5.

(f) That the application misstated project location and unemployment figures. Complaint P16 note 6.

(g) That the application misstated whether an environmental impact statement had been prepared. Complaint P16 note 7.

(h) That the project is illegal under section 106 of the Act because it involves diversion of a watercourse. Complaint P16 note 8.

Plaintiffs, in addition to the above allegations, raise environmental issues concerning the baler facility and a consideration of it by the government as well as defects in the application for it. Plaintiffs essentially charge that the baler facility will have an adverse impact — create noise, odor, air and water pollution, and traffic congestion — on the wetlands, thus affecting residents of North Arlington, and that the impact statement and grant application prepared by HMDC contained factual misrepresentations and failed to consider alternative methods of solid waste disposal, which circumvented the legislative intent of the National Environmental Policy Act of 1969, 42 U.S.C. § 4332(C) (NEPA). The complaint implies, and plaintiffs argue, that the Secretary of Commerce erred as a matter of law in not requiring an environmental impact statement (EIS) under NEPA and that if the formal requirements of NEPA do not apply, the Secretary's consideration of environmental concerns was arbitrary, capricious, and an abuse of discretion under EDA's own regulations for implementing the Local Public Works Act.

The leading cases on standing under NEPA establish that where plaintiffs themselves, or members of the organization they represent, personally use the allegedly affected area, they have satisfied the "injury in fact" test for standing to raise failure to comply with NEPA. United States v. SCRAP, 412 U.S. 669 [3 ELR 20536] (1973)(SCRAP I); Sierra Club v. Morton, 405 U.S. 727 [2 ELR 20192] (1972). This rather expansive interpretation of standing was recently applied by the third circuit in Shiffler v. Schlesinger, supra. There the court stated:

The gravamen of Shiffler's complaint is that the realignment will result in large scale unemployment and population loss in the area surrounding Fort Monmouth which will produce "severe environmental and socioeconomic effects on plaintiffs' community and quality of life." Plaintiff Shiffler, as a resident of the area, satisfies the injury in fact requirement because personally felt esthetic or conservational harm is sufficient to confer article III standing [citing SCRAP I, supra, 412 U.S.. at 687, and Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972)].

548 F.2d at 102.

Although not clearly stated, plaintiffs' allegations on behalf of themselves and the residents they purport to represent that the facility will cause environmental damage are sufficient to establish "injury in fact" under Shiffler because they claim to be residents of the area alleged to be affected. Plaintiffs, in alleging environmental concerns of pollution and conservation, appear to be in the "zone of interests" sought to be protected by NEPA.

Finally, plaintiffs state a claim under the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. (RCRA). Indeed, their complaint was amended to include claims against the Environmental Protection Agency, its administrator, Douglas M. Costle and Gerald M. Hansler, regional administrator of region II, whose authority includes the Hackensack Meadowlands.

42 U.S.C. § 6972(a) provides in part:

[A]ny person may commence a civil action on his own behalf — (1) against any person (including (a) the United States, and (b) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of any permit, standard, regulation, condition, requirement, or order which has become effective pursuant to this chapter; or (2) against the Administrator where there is alleged a failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator.

Section 6972(a)(2) provides for mandamus relief against the Administrator where there is an alleged failure to perform any nondiscretionary act or duty. The only failure of the Administrator under the RCRA, alleged by plaintiffs in their complaint, is his failure to intervene in this pending action under the "imminent hazard" provision of the act, 42 U.S.C. § 6973. That section provides in part that:

upon receipt of evidence that the handling, storage, treatment, transportation or disposal of any solid waste or hazardous waste is presenting an imminent and substantial endangerment to health or the environment, the Administrator may bring suit on behalf of the United States in the appropriate district court to immediately restrain any person for contributing to the alleged disposal to stop such handling, storage, treatment, transportation, or disposal or to take such other action as may be necessary.

(Emphasis added.) While plaintiffs do not, in their complaint, charge the existence of an "imminent and substantial endangerment to health or the environment," assuming that they did so argue and could establish evidence of such, still, the Administrator has no nondiscretionary duty to bring suit. Clearly the language of the section shows that the Administrator must exercise his discretion and consequently, plaintiffs cannot compel the Administrator to bring suit.

As to § 6972(a)(1), plaintiffs have shown no "permit, standard, regulation, condition, requirement, or order," effective pursuant to the Act of which there is a violation. Plaintiffs have submitted nothing in regard to this allegation.For the foregoing reasons, I find that plaintiffs have failed to state a claim under RCRA.

As discussed by this court in Clark v. Richardson, supra, the [7 ELR 20793] actions of the Secretary are subject to limited judicial review. The standard of review is governed by § 706 of the Administrative Procedure Act (APA), 5 U.S.C. § 706, which provides, in pertinent part:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. 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 otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(D) without observance of procedure required by law.

Plaintiffs argue that NEPA required the Secretary to prepare an EIS in connection with the grant to HMDC. However, the published regulations specifically stated EDA's position that NEPA does not require an EIS. 13 C.F.R. § 316.14(a). In fact, EDA did not prepare an EIS for any grant application submitted under the Act. Therefore, the Secretary's decision is reviewable to determine whether the Secretary's action was "not in accordance with applicable law." Section 706(2)(A) of APA, 5 U.S.C. § 706(2)(A); Citizens to Protect Overton Park, Inc. v. Volpe, 401 U.S. 402, 413-14 (1971).

Plaintiffs further argue that the Secretary failed to give any consideration to environmental concerns or that the Secretary's consideration was so inadequate as to make his decision arbitrary, capricious or an abuse of discretion. The published regulations governing implementation of the Act do call for consideration of environmental concerns. 13 C.F.R. § 316.14. Therefore, there is law to apply and this court may review the Secretary's action to determine if the environmental review was arbitrary, capricious, or an abuse of discretion. Section 706(2)(A) of the APA, 5 U.S.C. § 706 (2)(a); Overton Park, supra.

In considering plaintiffs' allegations that the Secretary's action was arbitrary, capricious, or an abuse of discretion, the court "must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Overton Park, 401 U.S. at 416 [citations omitted]. Moreover,

Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.

Id.

The action of the Secretary is entitled to a presumption of regularity. Overton Park, 401 U.S. at 415. However, "that presumption is not to shield hisaction from a thorough, probing, in-depth review." Id. Moreover, deference is to be accorded the construction of a statute by the agency responsible for implementing it. E.g., Griggs v. Duke Power Company, 406 U.S. 424, 434 (1971); Phillips v. Martin Marietta, 400 U.S. 542, 545 (1971).

Plaintiffs seek preliminary and permanent injunctive relief halting the funding and construction of the baler facility. As a prerequisite to the issuance of such relief, plaintiffs must show: irreparable injury to plaintiffs absent entry of a stay; absence of substantial harm to other interested parties; absence of harm to the public interest; and a likelihood of success upon the merits. E.g., Ammond v. McGahn, 532 F.2d 325, 329 (3d Cir. 1976); A.O. Smith Corp. v. FTC, 530 F.2d 515, 525 (3d Cir. 1976); Oburn v. Shapp, 521 F.2d 142, 147 (3d Cir. 1975); Delaware River Port Authority v. Transamerican Trailer Transport, Inc., 501 F.2d 917, 919-20 (3d Cir. 1974); Clark v. Richardson, supra, 431 F. Supp. at 117.

As mentioned above, I have found that plaintiffs lack standing with respect to the non-environmental allegations in their complaint. Turning to the environmental claims, plaintiffs must at this time show a likelihood of success on the merits.

Plaintiffs argue that NEPA required the Secretary to prepare an EIS for the grant applications submitted under the Local Public Works Act. A determination of that issue is controlled by the recent Supreme Court decision in Flint Ridge Development Company v. Scenic Rivers Association of Oklahoma, 426 U.S. 776 [6 ELR 20528] (1976).

In Flint Ridge, the Interstate Land Sales Full Disclosure Act required a developer to register a subdivision by filing with the Department of Housing and Urban Development (HUD) a record containing various items of information. Such statements became effective automatically thirty days after filing, unless the Secretary of HUD determined that it was incomplete or inaccurate. Environmental organizations filed suit to compel the Secretary of HUD to prepare an EIS consistent with the requirements of NEPA. The question as stated by the Supreme Court was:

[W]hether, assuming an environmental impact statement would otherwise be required in this case, requiring the Secretary to prepare such a statement would create an irreconcilable and fundamental conflict with her duties under the Disclosure Act.

426 U.S. at 788.

In holding that an EIS was not required, given the 30-day time period in the relevant statute, the Court noted: "It is inconceivable that an environmental impact statement could, in 30 days, be drafted, circulated, commented upon, and then reviewed and revised in light of the comments." Id. at 789 (footnote omitted). Of critical importance is 426 U.S. at 789 n.10:

Draft environmental impact statements on simple projects prepared by experienced personnel take some three to five months to complete, at least in the Department of the Interior. Complex projects prepared by inexperienced personnel may take up to 18 months to prepare. Sixth Annual Report, Council on Environmental Quality (CEQ) 639 (1975).

Once a draft statement is prepared, CEQ guidelines provide that "[t]o the maximum extent practicable" no action should be taken sooner than 90 days after a draft environmental impact statement (and 30 days after the final statement) has been made available for comment. 40 C.F.R. § 1500.11(b) (1975). Agencies commenting on a draft statement are to have at least 45 days to make their comments. 40 C.F.R. § 1500.9(f) (1975).

(Emphasis added.)

The Court, recognizing that its decision would necessarily involve all statements filed in other cases, noted that "[e]nvironmental impact statements, and consequently lengthy suspensions, would be necessary in virtually all cases." Id. at 791 (footnote omitted). Based on these considerations, the Supreme Court concluded:

In sum, even if the Secretary's action in this case constituted major federal action significantly affecting the quality of the human environment so that an environmental impact statement would ordinarily be required, there would be a clear and fundamental conflict of statutory duty. The Secretary cannot comply with her duty to allow statements of record to go into effect within 30 days of filing, absent inaccurate or incomplete disclosure, and simultaneously prepare impact statements on proposed developments. In these circumstances, we find that NEPA's impact statement requirement is inapplicable.

Id.

The facts in the instant action are very similar. Under § 107 of the Local Public Works Act, the Secretary has 60 days to reject an application or it is automatically approved. The reason for the time restriction is clear; the Act "is carefully and expressly designed to avoid the long lag time sometimes associated with public works" (emphasis added). House Report No. 94-1077, [7 ELR 20794] 1976 U.S. CODE CONG. & ADMIN. NEWS 1746. As noted by the Supreme Court in Flint Ridge, draft impact statements for simple projects prepared by experienced personnel take three to five months, already longer than the 60-day period allowed the Secretary, and after the draft impact statement is prepared, Council on Environmental Quality regulations provide that at least 90 days should be allowed for comment on the draft statement.

Moreover, clearly if the NEPA required the Secretary to prepare an EIS for the HMDC grant, it would be necessary for every other project in the country. EDA received over 25,000 applications for grants, of which 22,000 were accepted for processing. See Corrigan Affidavit P3.

As in Flint Ridge, supra, "It is inconceivable that an environmental impact statement could, [within the 60-day time restraint of the Local Public Works Act], be drafted, circulated, commented upon, and then reviewed and revised in light of the comments." 426 U.S. at 788. There is a "clear and fundamental conflict of statutory duty." Id. at 791. I, therefore, find that NEPA's impact statement requirement is inapplicable and, therefore, plaintiffs can show no likelihood of success on the merits.

Plaintiffs argue that the environmental review made by the Secretary was arbitrary, capricious, and an abuse of discretion.

The Local Public Works Act makes no reference to environmental concerns. EDA, recognizing legitimate environmental concerns and the requirements of NEPA, provided, as part of its regulations, for consideration of those concerns.13 C.F.R. § 316.14 provides that due to the time limitations imposed upon the Secretary, it would be impossible to prepare EISs. The regulation continues, in part:

However, to the fullest extent possible within this time period, EDA will analyze a project's potential environmental impacts and give appropriate consideration to environmental impacts in making its final decision.

These regulations were submitted to the Council on Environmental Quality, which was established in NEPA. 42 U.S.C. §§ 4341 et seq. The Council has as part of its duties:

(3) to review and apprise various programs and activities of the Federal Government in light of the policy set forth in subchapter I of this chapter for the purpose of determining the extent to which such programs and activities are contributing to the achievement of such policy. . . .

42 U.S.C. § 4344.

The Council approved the regulations. See Defendants' Brief, [Exhibit K]. Although this approval is not controlling as a matter of law, the Council's interpretation of the regulations in light of NEPA is entitled to deference. See Sierra Club v. Morton, 514 F.2d 856, 973 n.24 [5 ELR 20463] (D.C. Cir. 1975), rev'd and remanded sub nom. on other grounds, Kleppe v. Sierra Club, 427 U.S. 390 [6 ELR 20532] (1976); and see Carolina Action v. Simon, 389 F. Supp. 1244, 1246-47 [5 ELR 20338] (M.D.N.C. 1975), aff'd, 522 F.2d 295 [5 ELR 20450] (4th Cir. 1975).

Clearly, the decision to approve a particular grant, which decision includes environmental issues, is subject to "the vast discretion given to the Secretary of Commerce by the Act." Clark v. Richardson, supra, 431 F. Supp. at 125. This court may not substitute its judgment for that of the Secretary, but must confine itself to the question whether the Secretary considered the relevant factors and whether there was a clear error of judgment. Overton Park, supra, 401 U.S. at 416.

Plaintiffs' allegations that the Secretary's handling of environmental issues was arbitrary, capricious or an abuse of discretion is negated by the exhibits attached to the Verified Complaint. Exhibit B is a 45-page impact statement prepared by HMDC which includes maps, charts, detailed discussions of solid waste management in the Meadowlands, the proposed project, alternative facilities in the area, a description of the environment prior to the project, a description of the anticipated environmental impact of the project including air, water, and noise pollution, and social and economic impact. This impact statement was submitted to EDA. See also the Affidavit of Cascino and Mattson, who prepared the impact statement and submitted it to EDA and Exhibit H attached to defendants' brief.

The Affidavits of John E. Corrigan and Francis S. Barnes establish the review which was conducted by EDA. That review was extensive. It included review of all the material submitted by HMDC and contact with the relevant agencies. All of those agencies, state and federal, approved of the project.

Considering the testimony given by Dr. Guenther Stotzky, plaintiffs' expert witness, that the baler facility was not appropriate in the Meadowlands essentially for the reason that "the concept of a baler and then a balefill in this day and age is a hundred years behind the times," Transcript at 86, 94, 95, 110, I do not find this dispositive on any of the environmental or other issues raised by plaintiffs.¹ Effectiveness vel non is not an issue.

The review by EDA I find to be thorough and complete. The Secretary's action was not arbitrary, capricious, or an abuse of discretion.

With respect to plaintiffs' allegation of irreparable injury, they argue that the baler facility will cause noise, air and water pollution, insect and rodent infestation and traffic congestion. All of these factors will take effect only after the baler becomes operational. As stated in the Affidavit of George D. Cascino and Chester P. Mattson, submitted by the state defendants, the facility is not expected to be operational until July 1978, over 14 months from now. Therefore, plaintiffs cannot prove they will suffer irreparable harm pendente lite if initial construction is not halted.

However, the state and federal defendants argue that they will suffer immediate harm if a preliminary injunction is entered. HMDC is ready to begin construction. Between January 21, 1977, when HMDC was offered a grant, and April 7, 1977, when the complaint was filed, HMDC has incurred liabilities of approximately $129,437 in reliance upon the grant. Cascino and Mattson Affidavit at P23. On March 22, 1977 HMDC purchased land for the baler at a cost of $286,627.50 in reliance upon the grant. Id. For every month of delay in construction, the cost of the project can be expected to increase approximately $70,000. Id. The federal defendants have committed $6.9 million to the project, money which will help to relieve unemployment and stimulate the economy of the area.

If the project is halted now, they argue, inevitably cost overruns will be incurred. Critically, there is no provision in the Act to increase grants if cost overruns occur. If an injunction is entered, at best, HMDC would have to fund overruns, and at worst, the project might collapse. As this court stated in Clark v. Richardson, supra, in balancing the interests of the parties:

Plaintiffs, however, fail to take into consideration the plans already made by the state defendants with respect to this project. They face the possibility of losing their grants completely or, at least, paying higher costs for the same jobs. Federal defendants would be forced to stop payment preliminarily, and indefinitely, thereby going against the express purpose of the Act.

The potential harm to plaintiffs is clearly outweighed by the harm certain to befall defendants if construction is halted and the $6.9 million grant frozen. Therefore, balancing the interests of the parties, the equities clearly fall on the side of defendants.

Having failed to show a likelihood of success on the merits of their claims and immediate irreparable injury, I hold that plaintiffs' motion for a preliminary injunction must be denied.²

The foregoing constitutes my Findings of Fact and Conclusions of Law on this application.

1. Over the objection of the defendants, I declined to restrict my review to the administrative record. Instead, I permitted plaintiffs to adduce testimony and, of course, I considered as well the several affidavits submitted. Cf. County of Suffolk v. Secretary of the Interior, __ F.2d __ [7 ELR 20637] (2d Cir. Aug. 25, 1977), docket nos. 77-6049, 77-6050 slip op. at 5550.

2. Plaintiffs' exhibit 1, which is a transcript of a hearing held by the New Jersey Department of Environmental Protection on January 25, 1977 to discuss HMDC's application for a permit is inadmissible and will not be considered by the court on this motion. This transcript is irrelevant to prove plaintiffs' argument that the HMDC failed to state in its application to EDA that there was public protest in that HMDC's application was sent to EDA on November 4, 1976 and selected for approval on December 23, 1976.

The following exhibits are likewise inadmissible on relevancy grounds: P-5, P-6, P-8, P-9, P-12, P-16.

The following exhibits are inadmissible on the basis of lack of authenticity: P-3, P-18. Even if considered, however, they would not cause me to revise the foregoing findings and conclusions.