8 ELR 20265 | Environmental Law Reporter | copyright © 1978 | All rights reserved

Sierra Club v. Interstate Commerce Commission

The court remands an Interstate Commerce Commission (ICC) order authorizing construction of a railroad line for transportation of coal in the Powder River Basin because of National Environmental Policy Act (NEPA) violations, but refuses to invalidate the order and enjoin further construction. The agency is mistaken in contending that petitioner may not now assert that the environmental impact statement (EIS) for the project is inadequate for failure to consider the "off-site" impacts of building the railroad or alternative routes on the ground that it failed to raise these questions in the certification proceeding. This objection was raised by petitioner and others in comments on the draft impact statement and had therefore been brought to the agency's attention. Moreover, the court suggests, the doctrine of exhaustion of administrative remedies may apply less forcefull in NEPA litigation. Moving to the merits of petitioner's challenge, the court rules that the EIS contains a sufficiently extensive discussion of the coal slurry pipeline alternative but fails to discuss adequately prospective off-site impacts. The court holds that the ICC also violated the requirements of NEPA by failing to rank the alternative routes for the railroad line in terms of overall environmental desirability either in the EIS or when making the decision to issue a certificate of convenience and necessity for construction of the line. Stating that ordinarily the agency's failure to consider environmental factors would require that the order authorizing construction be vacated and the case remanded for further consideration, the court determines that under the circumstances of this case the ICC order should not be invalidated at this time. The court notes in this regard that construction of the rail line may now be well-advanced, largely because of petitioner's delay in seeking a stay. The ICC is directed to determine within 60 days whether construction should be halted while alternative routes are assessed. The agency must also begin to repair the deficiencies in the order and the EIS as expeditiously as possible.

In dissent, Judge Leventhal argues that the court should dismiss the petition for review because of petitioner's failure to present its NEPA objection in the proceeding that led to issuance of the certificate.

Counsel for Petitioner
Bruce J. Terris, Nathalie V. Black, Suellen T. Keiner
1526 18th St. NW, Washington DC 20036
(202) 332-1882

Counsel for Respondents
Peter A. Fitzpatrick, Ass't General Counsel; Mark L. Evans, General Counsel
Interstate Commerce Commission, Washington DC 20423
(202) 275-7312

Jacques B. Gelin, Edmund B. Clark
Land & Natural Resources Division
Department of Justice, Washington DC 20530
(202) 737-8200

Counsel for Intervenor Kerr-McGee Coal Corp.
Peter J. Nickles, John Michael Clear, Margaret E. Clark
Covington & Burling
888 16th St. NW, Washington DC 20006
(202) 293-3300

Counsel for Intervenor Atlantic Richfield Co.
John E. Nolan, Jr., Richard H. Porter
Steptoe & Johnson
1250 Connecticut Ave. NW, Washington DC 20036
(202) 862-2000

Before: BAZELON, Chief Judge, LEVENTHAL and ROBINSON, Circuit Judges.

Concurring opinion filed by Circuit Judge ROBINSON.

Dissenting opinion filed by Circuit Judge LEVENTHAL.

[8 ELR 20265]

BAZELON, Chief Judge:

The Sierra Club (petitioner) seeks review of a decision and order of the Interstate Commerce Commission granting authorization to the Burlington Northern Railroad and the Chicago and North Western Transportation Company to construct a joing railroad line in the coal-rich Powder River Basin of Wyoming. 348 I.C.C. 388 (1976), reconsideration denied, April 26, 1976. Petitioner maintains that the Environmental Impact Statement (EIS) associated with the decision¹ is deficient in several respects and that the Commission's decision is not a reasoned one in that it does not adequately consider certain alternatives to the route authorized. For the reasons expressed below, we remand the record to the Commission for further consideration.

I. BACKGROUND

In fall 1972, Burlington Northern (BN) filed an application with the Commission pursuant to 49 U.S.C. § 1(18) (1970) for authority to construct a 126-mile rail line in the Powder River Basin of Wyoming. Several months later, the Chicago and North Western (CNW) sought authority to construct a line nearby. The lines were sought to facilitate the transportation of strip-mined low sulfur coal by linking the mining areas with railroad trunk lines. Shortly thereafter, at the Commission's request, the applicant railroads filed a joint application for authority. This proposal, which was ultimately granted, contemplated construction of a 115.5 mile loop between the CNW's main line and BN's Gillette Branch. 112.5 miles of the line would be new construction.

After consolidating the three applications and determining that they would be considered under a modified procedure,² the Commission concluded that the consolidated proceedings represented a major Federal action significantly affecting the quality of the human environment within the meaning of National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4332 (1970). Because construction of a rail-line through this coal-rich area would trigger additional economic development with resulting environmental consequences, the Commission prepared the EIS in conjunction with the Departments of Agriculture and Interior.³

A 1700-page draft environmental impact statement was completed in May 1974 and referred to the Council on Environmental Quality (CEQ). The draft was made public several days later. Following five days of public hearings, 52 intervenors, including petitioner, filed comments on the draft EIS. The EIS was amended to reflect some of these comments,⁴ and a final EIS was filed with the CEQ in October of 1974. The ICC adopted the final EIS by order of October 8, 1974.

[8 ELR 20266]

In many respects, the final EIS is comprehensive. It discusses numerous secondary effects of constructing a rail line through the Basin. It not only evaluates the environmental consequences of the proposed joint route, but also evaluates three other potential routes and certain measures that could be taken to mitigate adverse environmental consequences. Petitioner does not challenge the adequacy or accuracy of the bulk of the EIS although, as discussed below,⁵ it contends that certain portions are not sufficiently comprehensive.

On January 9, 1976, the Commission granted the joint application for a certificate of public convenience and necessity to construct and operate the joint line.⁶ A number of conditions were imposed in the certificate, including compliance with some, though not all, of the measures proposed in the EIS to mitigate adverse environmental consequences. In reaching its decision, the Commission limited its consideration to the joint proposal. It dismissed the individual applications without considering them on the merits, after observing that construction of more than one line over the same territory would be "wasteful and improvident." 348 I.C.C. at 399. It stated it would not consider the relative merits of the potential routes discussed in the EIS because it had found the joint route to be the "most feasible" and because "the spirit of the act as well the necessity of the most definite and complete evidence . . . require the selection of a single route for consideration. . . ." Id. at 402. The Commission then determined that the public convenience and necessity would be served by granting the application for the joint route.⁷ Upon denial of reconsideration, this appeal ensued. Petitioner waited until the eve of oral argument to seek a stay, which was denied.

II. SUFFICIENCY OF THE ENVIRONMENTAL IMPACT STATEMENT

Petitioner asserts that the EIS is deficient in several respects. Without objecting to what it does contain, petitioner argues that the statement does not contain an adequate discussion of the environmental consequences of building a coal slurry pipeline⁸ instead of a railroad or of the "off-site" impacts⁹ of building a railroad. The Commission defends the adequacy of the EIS and also argues that the doctrine of exhaustion of administrative remedies bars petitioner from challenging the statement on appeal. We turn to this latter contention first.

A. Exhaustion of Administrative Remedies

The Commission states that petitioner never raised the question of off-site impacts in the certification proceeding, and first challenged the sufficiency of the discussion of coal-slurry pipelines in its petition for reconsideration. The Commission maintains that these challenges were not timely and that petitioner is therefore barred from pursuing them now, citing United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33 (1952).

But this is not a case, like Tucker Truck Lines, supra, where judicial review is sought concerning a question that was not raised at any stage of the administrative proceedings. 344 U.S. at 35. Although petitioner did not urge the objections it now pursues in the certification proceeding, these objections were raised by petitioner and others in comments on the draft EIS.¹⁰ Several intervenors submitted comments challenging the adequacy of the discussion of off-site impacts in the draft impact statement, and the final statement contains an amended page addressing some of these comments. II EIS I-460a. Five comments, in addition to petitioner's, questioned the adequacy of the discussion of slurry pipelines.¹¹ What the Commission must be contending, therefore, is that the sufficiency of the EIS can be challenged on appeal only if objections to the adequacy of the EIS were expressly reiterated at each stage of the administrative proceedings. We find this contention untenable.

As we have had occasion to note before, an agency charged with determining the public interest is not in the position of a referee or traffic policeman, passing only on the specific issues advanced by the parties to a proceeding.¹² "Regardless of the formal status of a party, or the technical merits of a particular petition, the [Commission] 'should not close its eyes to the public interest factors' raised by material in its files." Retail Store Employees Union, Local 880, R.C.I.A. v. FCC, 436 F.2d 248, 254 (D.C. Cir. 1970). The comments on the draft EIS [8 ELR 20267] were certainly in the Commission's "files," and were relavant to the Commission's public convenience and necessity determination. Thus, the Commission can hardly maintain now that the questions raised by these comments were not properly before it simply because petitioner did not focus on them in its protest.

The Commission's argument for repetition of challenges at all stages of the proceedings is particularly misplaced where, as here, important questions of environmental policy are concerned.¹³ NEPA is an "action-forcing" statute. It places the "primary and non-delegable responsibility" for compliance on the agency, not the public. I-291 Why? Ass'n v. Burns, 517 F.2d 1077, 1081 (2d Cir. 1975). NEPA would lose its action-forcing nature if judicial review were absolutely dependent on public intervention at each step in an administrative proceeding. "It is, moreover, unrealistic to assume that there will always be an intervenor [before the agency] with the information, energy and money required" to investigate an environmental issue. Calvert Cliffs' Coord. Comm., Inc. v. AEC, 449 F.2d 1109, 118-19 (D.C. Cir. 1971). Thus, the Commission's argument is inconsistent with its obligation under NEPA to affirmatively raise and evaluate environmental alternatives to the proposed construction of the joint rail line. See City of New York v. United States, 337 F. Supp. 150, 160 (E.D.N.Y. 1972) (three-judge court).

The Commission nevertheless maintains that application of the "ordinary" exhaustion doctrine is essential in this case to prevent frustration of the administrative process.¹⁴ Of course, the administrative process would suffer if intervenors could deliberately defer challenging an EIS until judicial review in order to delay a project they find undesireable.But "the fear of 'frequent and deliberate flouting' can easily be overblown," McGee v. United States, 402 U.S. 479, 485 (1971), particularly in a NEPA case. An intervenor has a substantial incentive to make a timely challenge to an impact statement, even in the absence of the exhaustion requirement. "[I]ntervenor's comments [are] one factor bearing on the reasonableness of the agency's discussion of alternatives." Aeschliman v. NRC, 547 F.2d 622, 625 n.6 (D.C. Cir. 1976), cert. granted sub nom. Vermont Yankee Nuclear Power Corp. v. NRC, 97 S. Ct. 1098 (1977). Conversely, the absence of comments on a particular point bears on the reasonableness of the agency's decision not to discuss it. Thus, intervenors who do not draw the agency's attention to a potential alternative significantly increase their burden of showing that the agency's failure to identify and discuss this alternative was unreasonable.

Undoubtedly, applying the exhaustion doctrine with full force in this case would have an incremental deterrent effect on those who might be tempted to circumvent the administrative process. But as the Supreme Court has reminded us, the exhaustion doctrine is to be applied flexibly. McGee, supra, 402 U.S. at 483. "[T]he contention that the rigors of the exhaustion doctrine should be relaxed is not to be met by mechanical recitation of the broad interests usually served by the doctrine, but rather should be assessed in light of a discrete analysis of the particular default in question, to see whether there is 'a governmental interest compelling enough' to justify the forfeiting of judicial review." Id. at 485. We find that the marginal protection of the integrity of the administrative process that would be afforded by requiring exhaustion at every stage of the administrative process in this case does not rise to the level of a "compelling governmental interest." Certainly, it is not sufficient to overcome the public interest in assuring that the Commission has undertaken a full consideration of environmental alternatives.

B. Sufficiency of the Impact Statement

NEPA mandates that an impact statement discuss alternatives to the proposed action. 42 U.S.C. § 4332 (2)(C). (1970). Indeed, discussion of alternatives is the "linchpin" of NEPA. Monroe County Conservation Council, Inc. v. Volpe, 472 F.2d 693, 697-98 (2d Cir. 1972). The agency must consider all reasonable alternatives, including those which "do not offer a complete solution to the problem" and those over which it does not have jurisdiction. Natural Resources Defense Council, Inc. v. Morton, 458 F.2d 827, 836 (D.C. Cir. 1972). However, in determining whether an impact statement is adequate, a rule of reason applies. Concerned About Trident v. Rumsfeld, 555 F. 2d. 817, 827 (D.C. Cir. 1977). Although the discussion in the statement "must go beyond mere assertions" and "expos[e] the reasoning and data of the agency," Natural Resources Defense Council, Inc v. Callaway, 524 F.2d 79, 93, 94 (1975), it need not be exhaustive. Natural Resources Defense Council, Inc. v. Morton, supra, 458 F.2d at 836-7. Furthermore, the statement need notdiscuss each alternative in equal depth. A "remote" alternative need not be discussed as exhaustively as a currently viable one. Life of the Land v. Brinegar, 485 F.2d 460 (9th Cir. 1973), cert. denied, 416 U.S. 961 (1974). In sum, "[t]he court's task is to determine whether the EIS was complied with objective good faith [8 ELR 20268] and whether the resulting statement would permit a decisionmaker to fully consider and balance the environmental factors." Sierra Club v. Morton, 510 F.2d 813, 819 (5th Cir. 1975).

(1) Coal Slurry Pipeline Alternative

Petitioners first contend that the discussion of alternatives to construction of a rail line, in particular a coal slurry pipeline, does not meet this test.¹⁵ Construction of a coal slurry pipeline was one of six alternative forms of transportation considered in the EIS. Several pages of the statement are devoted to it.¹⁶ The statement discusses the construction and operation of pipelines. I EIS, I-107-9, II EIS I-697-8. It also discusses the amount of water needed to operate a pipelines. I EIS I-53-4. And it discusses many though not all, of the environmental costs and benefits of building a pipeline. II EIS I-697-8. Some advantages of slurry pipelines are that they are hidden from sight, produce little noise or smell apart from the terminals, and operate continuously. Some disadvantages are that they require significant amounts of water which becomes polluted and that there is a danger of spillage.

The discussion of pipelines in the statement is not as extensive as it could be. Nevertheless, we cannot say that it was insufficient to permit a decisionmaker to make a reasoned choice.¹⁷ In reaching this conclusion, we are not suggesting that pipelines should not or, indeed, must not receive even more serious consideration in the future. As the Commission vigorously argues, slurry pipelines were somewhat of a remote alternative when the EIS was prepared in 1974. Although the technology of pipelines was well understood, various factors, which may no longer be problems, hampered their feasibility. And as noted earlier, intervenor's comments are one factor bearing on the reasonableness of agency discussion of alternatives. Perhaps because pipeline construction did seem remote then, the intervenor's comments gave the Commission little guidance in analyzing pipelines in greater depth. Petitioner's sole comment, for example was, "More thorough consideration should be given to the alternative of slurry pipelines." VI EIS VII-941.

(2) Off-Site Impacts

Petitioner also contends that the EIS does not contain an adequate discussion of off-site impacts. In particular petitioners' concern is that the proposed railroad is to carry 24 to 48 trains per day, each over a mile long. I EIS I-45; III EIS II-121. After travelling on the proposed route many, if not all of these trains will be added to the flow of traffic on existing lines. Petitioner maintains that the EIS does not adequately discuss the impact that this increased traffic will produce along the existing rail lines.

The draft of the EIS asserted that "examination of offsite impacts is beyond the scope of this statement." III Draft EIS II-85. Several intervenors, including the Wyoming State Highway Department, challenged this position in their comments. The Final EIS was amended in response to these comments.¹⁸ After acknowledging that exportation of Powder River Basin coal will generate environmental effects from energy conversion in such distant states as Arkansas and Louisiana, it states,

The exact nature of these impacts is not reasonably foreseeable due to the inability to fully anticipate how and under what conditions the coal and energy will be utilized.

II EIS I-460a. In a similar vein, the Final EIS notes that transportation of coal to distant cities

will impact air quality, transportation networks, and populations. If new facilities are built to handle the rail transported coal or if other modes of coal transportation are contemplated, the environmental impacts of these facilities will be examined as appropriate under federal and state law.

III EIS II-85-86. It also notes that increased traffic along the existing lines may produce a traffic tie-up at one crossing and that BN is planning to upgrade its tracks to handle safely the increased traffic. III EIS II-121-22.

These statements comprise the only explicit discussion of offsite impacts cited to us in the EIS. However, the Commission argues that the comments on the draft EIS — particularly the one filed by the Wyoming Highway Department — "are to be regarded as an integral part of the statement" and hence to be considered in assessing its adequacy.¹⁹ It makes this argument even though it did not directly respond to this comment, let alone incorporate it by reference.

In one sense, the Commission is correct: since the comments are published in the final EIS, and are available to the public, they are part of the EIS. But a comment which is not addressed or even incorporated into the EIS can hardly substitute for the reasoned examination of environmental consequences required by NEPA.²⁰ On a more practical level, if all comments automatically became part of the agency's analysis, many statements would be hopelessly confusing. Comments are often conflicting, off the point, or unintelligible. Automatic incorporation of such comments would make the statement less, rather than more adequate.

[8 ELR 20269]

Turning to the statement itself, we find that its discussion of off-site impacts is not adequate. The Commission does not maintain that the discussion of off-site impacts was thorough. Indeed, the EIS gives the decisionmaker virtually no information on the subject. Rather, the Commission argues that it was under a lesser obligation to discuss such impacts because they are either de minimis, social or remote.²¹ We discuss each contention in turn.

First, the EIS itself does not claim that off-site impacts along existing rail routes will be de minimis. In fact, nothing in the statement sheds light on the accuracy of this assertion. For all we know it may be a post hoc rationalization of counsel and hence unreliable. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 419 (1971). Nor is there support for the contention that these impacts will be social in nature. Many of the likely impacts can be regarded as social but many, such as the noise and pollution spawned by the trains, cannot.

The strongest contention, and the one that is implicit in the passages quoted above from the EIS, is that the impacts are remote and speculative. Surely this contention is correct insofar as it pertains to impact in such distant states as Louisiana. On the other hand, the impacts in areas closer to the proposed route, such as along the main lines to which it is to connect, are much less speculative. Of course, the Commission must have a good deal of latitude in determining the geographical scope of its consideration of impacts; but this determination must not be arbitrary. We can see no justification for, in effect, limiting its consideration to the area along the proposed route and not considering impacts regarding the areas adjacent to the main lines which will be heavily burdened by increased traffic.

If the adequacy of the EIS was the only issue in this case, there are several reasons why we would be reluctant to enjoin continued construction. First, we have found only one error, the adequacy of the discussion of off-site impacts, in a long and often comprehensive impact statement. Furthermore, there is no evidence that the statement was compiled in bad faith. More importantly, by waiting until the eve of oral argument to seek an injunction against construction, petitioner permitted resources to be committed to construction, thereby reducing the extent to which an injunction would vindicate a remedial purpose under NEPA. See Realty Income Trust v. Eckerd, 564 F.2d 447 (D.C. Cir. 1977). Although these factors cut against issuance of an injunction, we need not decide whether the deficient discussion of off-site impacts standing alone, warrants such relief. Since we conclude in section III, infra, that the record must be remanded for further proceedings on other grounds, it wouldnot appear to be a significant additional burden on the Commission to repair the defects in the EIS on remand. However, if the Commission reaches its substantive decision before the EIS revisions have been concluded, the Commission may consider whether it is reasonable, in light of the equities of this case, to grant a conditional certificate authorizing construction but reserving the right to impose mitigating measures that may be dictated by the results of the environmental study.

III. CONSIDERATION OF ALTERNATIVE ROUTES IN THE FINAL DECISION

The EIS analyzed four separate rail routes, the joint route and three potential routes for which applications had not been filed. Each route is discussed and ranked according to its comparative impact on particular environmental elements, such as air or water quality. III EIS II-165-78b. The EIS does not, however, compare the routes in terms of their overall environmental desirability. In its comments, the Environmental Protection Agency (EPA) maintained that a route other than the joint one was environmentally superior. VI EIS VII-882.²² But the EIS offered no assessment of the accuracy of this conclusion.

The Commission recognized that four alternative routes were considered in the EIS, and summarized BN's views concerning the relative environmental impact of these routes. 348 I.C.C. at 392, 394. But the Commission did not itself consider the merits of any route other than the proposed joint route:

While several routes for the proposed line were considered in the development of the EIS, for comparison of the impacts involved, we have determined that the route proposed by applicants is the most feasible. Additionally, the Commission found in Construction by A. & W.N.C.R., 111 I.C.C. 557, 564, that the spirit of the act as well as the necessity of the most definite and complete evidence that can be secured require the selection of a single route for consideration rather than a number of alternative routes. Thus, we will consider only the route proposed by the applicants and all our discussions will be limited to that route.

348 I.C.C. at 402-03.²³ Petitioner contends that the Commission's failure to consider alternative routes precludes us from affirming its order. For the reasons expressed below, we agree.

As a preliminary matter, we note that the Commission's exhaustion argument carries even less force here than it does in the context of petitioner's challenges to the adequacy of the EIS.²⁴ The Commission itself raised and rejected the propriety of considering alternative routes, as the above-quoted portion of its order indicates. It is true that petitioner, in its petition for reconsideration, did not precisely focus on the Commission's refusal to assess the merits of alternative routes.²⁵ But a petition for reconsideration is not a prerequisite of judicial review of a final order of the Interstate Commerce Commission,²⁶ [8 ELR 20270] and we see no persuasive reason why a request for reconsideration of a specific issue should be required for review of that issue, particularly in NEPA-related areas. Since our review of the Commission's order is not barred by the exhaustion doctrine, we turn to the merits of petitioner's claim.

A cornerstone of administrative law is the requirement that an agency explain the basis of its decision. Without an explanation, it is impossible to know whether the decision "was based on a consideration of relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971); SEC v. Chenery Corp., 318 U.S. 80, 94-95 (1943). This is no less true in cases involving NEPA.²⁷ In such cases, a reviewing court must assure itself that the agency has taken "a 'hard look' at environmental consequences," in reaching its decision. Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21 (1976). Our court has stated that a reviewing court must determine whether "the decision was reached procedurally without individualized consideration and balancing of environmental factors — conducted fully and in good faith. . . ." Calvert Cliffs' Coord. Comm. v. AEC, 449 F.2d 1109, 1115 (1971). Obviously, even this limited review function canot be performed if the agency has not clearly stated the basis for its substantive decision, including its environmental predicate.

In its order and on appeal, the Commission argues that the spirit of the I.C.C. act and the necessity for obtaining the best evidence compel it to consider only one route.²⁸ In effect, the Commission maintains that it must wear blinders in passing on route authorizations. The sole support for this contention is a decision reached by the Commission in 1926, forty-three years before NEPA was enacted.²⁹ Even assuming the correctness of this principle in cases not involving NEPA, it does not follow that it applies in cases which do involve NEPA. To be sure, NEPA was not intended to overrule statutes. See note 13, supra. But NEPA does mandate that "to the fullest extent possible . . . public laws of the United States . . . be interpreted and administered in accordance" with its policies. 42 U.S.C. § 4332(1) (1970). The Commission is to issue licenses as "the public convenience and necessity" dictates. 49 U.S.C. § 1(18) (1970). Thus NEPA mandates that environmental concerns are to be considered in determining "the public convenience and necessity."³⁰ Since consideration of alternatives is the "linch-pin" of NEPA, the "public convenience" standard necessarily includes consideration of alternatives.³¹

Such consideration is particularly crucial in this case. Apparently, all parties, including petitioner, recognize the need for developing some method of transporting Powder River Basin coal. The difficult question is what method (or route) should be developed. The EPA, for example, considered that one of the potential routes was environmentally superior to the joint route. Of course, even if this were true, the Commission would not be compelled to select that route. Although an agency must consider all the relevant factors, NEPA does not mandate a particular result. National Resources Defense Council v. NRC, 547 F.2d 633, 654 (D.C. Cir. 1976), cert. granted sub nom. Vermont Yankee Nuclear Power Corp. v. NRC, 97 S. Ct. 1098 (1977). But we do not see how the Commission could conclude that the public interest would be served by authorizing the joint route without comparing the environmental desirability of that route with others. Until it has done so, there can be no determination of where the public interest lies.

The Commission argues that even if it must consider the merits of alternative routes, its order indicates that it has done so adequately. However the order only states that the Commission found the joint route to be "the most feasible." The reasoning which led to this conclusion is never disclosed. Although the EIS ranks alternative routes in various ways, neither the EIS nor the Commission's decision ranks the routes in terms of their over-all environmental desirability. Indeed, without an explanation of why the joint route is "most feasible," there can be no assurance that the Commission considered environmental consequences at all.³²

In sum, we find that the Commission did not give adequate consideration to environmental factors in considering whether the construction and operation of the joint route would serve the public interest.³³ Ordinarily, the [8 ELR 20271] Commission's failure to consider a relevant factor would require that we vacate the certificate of public convenience and remand the case to the Commission for further consideration. See, e.g., P.C. White Truck Line v. ICC, 551 F.2d 1326 (D.C. Cir. 1977). However, a court exercises "general equity powers" in reviewing administrative action, Flemming v. FCC, 225 F.2d 523, 526 (D.C. Cir. 1955), and "may adjust its relief to the exigencies of the case in accordance with the equitable principles governing judicial action." Ford Motor Co. v. NLRB, 305 U.S. 364, 373 (1939).³⁴ Under the circumstances of this case, we have determined not to vacate the Commission's order at this time. We will consider whether, or to what extent, the order should be vacated only after further proceedings by the Commission.

Evidently, the railroads have already begun construction of the joint route. This circumstance is due, in large part, to petitioner's delay in seeking a stay, a factor we have taken into account in determining not to vacate the Commission's order forthwith. More importantly, we cannot say, on the basis of the present record, what the consequences of halting further construction would be. It could be that stopping construction now would impose a considerable burden on the railroads and their employees. While "[d]elay and concomitant cost increases" would not alone justify our refusing to vacate the order, these factors should be considered in formulating appropriate relief. Conservation Society of Southern Vermont, Inc. v. Secretary of Transportation, 508 F.2d 927, 937 (2d Cir. 1974). Moreover, in the context of environmental decisionmaking, there are several additional reasons for ascertaining the present status of construction before determining whether, or to what extent, to vacate the Commission's order.

First, the joint route may be in an advanced stage of construction, or even nearing completion. While this would not necessarily preclude our vacating the construction certificate, it would be a factor weighing against such relief. This is indicated by the standards for injunctive relief.This is indicated by the standards for injunctive relief to enforce compliance with NEPA. While there is a "presumption" in favor of injunctive relief where violations of NEPA are found, Realty Income Trust v. Eckerd, 564 F.2d at 456, such relief does not necessarily follow from every finding of NEPA noncompliance. Rather, if an injunction would not serve to protect the environment from irreversible damage, or to preserve the agency's freedom to choose among alternatives after coming into compliance with NEPA, it may not be ordered. See id. at 456-57; Jones v. District of Columbia Redevelopment Land Agency, 499 F.2d 502 (D.C. Cir. 1974). Similarly, if construction of the joint route has proceeded so far that it is an environmental fait accompli, this would weigh strongly, but not conclusively, against vacating the construction certificate pending reconsideration of the Commission's decision.

Second, the record does not reveal what additional resources would be irrevocably committed to the joint route if construction were permitted to continue during the Commission's consideration of alternatives. It may be that these resources would be small relative to the resources already expended. If this were so, then permitting construction to continue would probably not "affect the balance of costs and benefits that must be struck by the [Commission] in determining whether or not to continue this project. . . ." Environmental Defense Fund, Inc. v. Froehlke, 477 F.2d 1033, 1037 (8th Cir. 1973). The amount of resources that would be committed to the joint route while the Commission considers alternatives would depend, to a large extent, on how long the Commission takes to reach a reasoned decision. But only the Commission can predict how long this will be, and what resources would be irrevocably expended in the interim.

Finally, it may be that the Commission's freedom to choose among alternative routes can be fully preserved by suspending only part of the railroads' construction authority. For example, there may be construction areas common to all four routes, or general construction activity not specific to any single route. It would serve no purpose to suspend such activities pending completion of the Commission's consideration of alternatives. The possibility of a partial suspension of construction authority should, however, be addressed in the first instance by the Commission, not this court.

The Commission will be afforded sixty days tocomplete whatever further proceedings it requires to determine whether, or to what extent, construction should be halted pending its assessment of alternative routes. Within twenty days of the filing of the supplemental record in this court, the parties may serve and file further briefs. In the meantime, the Commission should begin to repair the deficiencies in the order and the EIS as expeditiously as possible.

If it is true, as the Commission represents, that thorough consideration was accorded to off-site impacts and alternative routes, then the remand will not be onerous. See Davis v. Clark, 404 F.2d 1356, 1358 (D.C. Cir. 1968). If this is not true, then the important policies underlying NEPA must be vindicated.

The record is remanded for further consideration in accordance with this opinion.

1. The EIS was not prepared solely for the proposed rail lines. It also evaluated other coal-related development proposals for the Basin.

2. Under the "modified procedure," which petitioner does not challenge, the applications were considered on the basis of verified statements rather than oral hearing.

3. The avowed purpose of the combined EIS was to "consider not only the impacts of the several proposals, but also the collective, cumulative impacts, primary and secondary, of the development of the coal resource" in the Powder River Basin. I EIS, preface.

4. According to the EIS, the "preparing agencies" also wrote responses to some of the comments. VI EIS T-20. In its brief, the Commission indicates that it authored some of these responses. Comm. Br. at 25.

5. See section II-B infra.

6. The application was supported by Kerr-McGee Corp. and the Atlantic Richfield Company, both of whom are engaged in developing coal mines along the proposed lines, and by seven public utility companies. The Sierra Club opposed the application. It primarily submitted that the EIS was unlawful in that it did not consider the impact of coal development related activities on the entire Northern Great Plains region. The Supreme Court ruled against petitioner on this point in Kleppe v. Sierra Club, 427 U.S. 390 (1976). In doing so, the Court did not pass on any of the arguments being advanced here.

7. Petitioner does not directly challenge the conclusion that the grant of authority would serve the public interet. However, by asserting that the Commission should have considered the merits of alternative routes, petitioner is indirectly challenging this conclusion. Petitioner must be arguing that consideration of alternative routes might have led to the conclusion that another route was superior, so that relatively speaking the public interest would not be served by authorizing construction of the joint route.

8. Slurry pipelines can be used to transport coal. Essentially, the coal is pulverized and then mixed with water to form a slurry that is then pumped through underground pipes to its destination. At the terminal point, the coal powder and the water are separated by centrifuge.

9. This term refers to the "ripple-like" environmental effects that construction of a major project may have elsewhere. Petitioner uses it particularly in reference to the effects that will be produced by increased train traffic on existing routes that connect to the proposed route.

10. At argument, the Commission conceded that the purposes of the exhaustion doctrine are satisfied if some party, not necessarily the one pursuing the appeal, raised the objection before the agency. Office of Communication of United Church of Christ v. FCC, 465 F.2d 519, 523-24 (D.C. Cir. 1972). Indeed, permitting a party in a case like this one to raise on appeal only the points it stressed before the agency would merely encourage the filing of duplicative comments or protests.

11. Petitioner filed a comment criticizing the discussion of pipelines. This comment was late filed and simply stated:

More thorough consideration should be given to the alternative of slurry pipelines.

VI EIS VII-941.

12. Retail Store Employees Union, Local 880, F.C.I.A. v. FCC, 436 F.2d 248, 254 (D.C. Cir. 1970) and cases cited therein; see also National Broadcasting Co., Inc. v. United States, 319 U.S. 190, 215-16 (1943).

13. It is an open question in this circuit whether the exhaustion doctrine applies to NEPA. Maryland-Nat'l Capital Park and Planning Comm. v. United States Postal Service, 487 F.2d 1029, 1040 n.9 (D.C. Cir. 1973). Aeschliman v. NRC, 547 F.2d 622, 625 n.6 (D.C.Cir. 1976), cert. granted sub nom. Vermont Yankee Nuclear Power Corp. v. NRC, 97 S. Ct. 1098 (1977). The ninth circuit has applied the exhaustion doctrine in NEPA cases in a limited way. Washington Utilities & Transp. Com'n v. FCC, 513 F.2d 1142 (9th Cir.), cert. denied, 423 U.S. 836 (1975). That case arose under § 405(a) of the Communications Act, 47 U.S.C. § 405(a) (1970), a statutory exhaustion requirement. The court noted that its inquiry was governed by that section for "NEPA was not intended to repeal by implication any other statute." Id. at 1167, quoting United States v. SCRAP, 412 U.S. 669, 694 (1973).But it also noted that a court enjoys the same discretion in applying a statutory exhaustion requirement as it does in applying the nonstatutory doctrine. Id. at 1168 n.36. The court then held that deciding whether to apply the exhaustion doctrine in particular cases, full weight should be given to the "lofty purposes" of NEPA. Id. at 1168.

14. Comm. Br. at 32-33. One of the purposes of theexhaustion doctrine is to prevent "frequent and deliberate flouting of administrative processes. . . ." McKart v. United States, 395 U.S. 185, 195 (1969). For the reasons stated below we find this concern largely inapplicable in NEPA cases. Examination of the other factors cited by the Supreme Court as bearing on the applicability of the exhaustion doctrine confirms our conclusion that exhaustion should not be required in this case. The other factors are the agency's interest in having the opportunity to make a factual record and exercise its discretion on the basis of that record and the agency's interest in correcting its own mistakes prior to judicial review. McGee v. United States, 402 U.S. 479, 484 (1971). To a great extent, these factors presuppose a proceeding in which an agency's sole obligation is to evaluate the arguments raised by the parties instead of a proceeding in which an agency has affirmative obligations to raise and evaluate certain issues.

15. Petitioner also argues, though with less vigor, that the EIS gave inadequate consideration to the use of pipelines as a partial alternative to construction of the rail line. We reject this contention as well.

16. Petitioner compares the number of pages devoted to slurry pipelines to the rest of the EIS in its attempt to prove that discussion was inadequate while the Commission points to the length of the entire statement and the number of man years it took to prepare as evidence of its adequacy. These number games shed little light on the problem before us. The issue is not how many words the statement contains, but how much substance.

17. Another deficiency, according to petitioners, is that the EIS discusses neither the controversy surrounding construction of slurry pipelines nor the economic impact their construction would have on railroads. However, the primary purpose of an EIS is to discuss environmental, not economic factors. Natural Resources Defense Council v. Morton, supra, 458 F.2d at 834.

18. Petitioner contends that the Commission should have responded directly to the comment of the State Highway Department. However, as the amendments to the EIS indicate, the Commission responded to similar comments. The important question is whether this response was adequate.

19. Comm. Br. at 26, quoting National Helium Corp. v. Morton, 486 F.2d 995, 1003 (10th Cir. 1973), cert. denied, 416 U.S. 993 (1974).

20. We do not mean to suggest that an agency cannot adopt a comment as its own. Obviously, it can only adopt a comment after examining it closely enough to know that it agrees with it.

21. See Concerned About Trident, supra, 555 F.2d at 828.

22. The EPA concluded that the so-called Western route was the most desirable environmentally because it would use a right-of-way already occupied by a highway.

23. The Commission did not consider either the routes applied for by the individual railroads or the potential routes analyzed in the EIS. Petitioner is concerned only with the latter omission. The railroads do not complain of the failure to consider the merits of their individual applications because their joint application was granted.

24. See section IIA supra.

25. The petition for reconsideration does state that "[t]here is no analysis of whether the routes proposed represent the optimum transportation development for the Northern Great Plains region or even for the whole of the Powder River area of Wyoming." J.A. 110-11.

26. 5 U.S.C. § 704 (1970); see United States v. Abilene & S Ry. Co., 265 U.S. 274, 281-82 (1924).

27. The Commission relies on City of New York v. United States, 344 F. Supp. 929 (E.D.N.Y. 1972), for the opposite conclusion. There the court in dicta stated that it doubted whether "the merits of [agency] determinations under NEPA" are subject even to arbitrary and capricious review appropriate under the Administrative Procedure Act. Id. at 939-40. Without commenting on the proper scope of review of agency decisions involving scientific components, we note that the City of New York court did not suggest that a lowered standard of review exempts an agency from stating the basis of its decision.

28. The Commission also suggests that limiting its consideration to the joint route was proper because applications had not been filed for the potential routes. This suggestion is somewhat ironic inasmuch as the Commission suggested the filing of the joint application. Furthermore, it misses the point. The Commission obviously could not have granted authorization to construct a route for which no application had been filed. However, its evaluation of other routes might have led it to conclude that, because of the superiority of some other route, the public interest would not be served by authorizing the joint route, even though when analyzed by itself it was satisfactory.

29. Appalachian & Western N.C.R.R., 11 I.C.C. 557, 564 (1926).

30. NEPA is to give way only in the case of a clearly conflicting statute. See Flint Ridge Development Co. v. Scenic Rivers Assn., 426 U.S. 776, 788 (1976). The "public convenience and necessity" standard of the Interstate Commerce Act is not such a provision. To the contrary, its wording naturally invites reference to important federal policies.

31. Of course the Commission need not discuss all alternatives to granting the application. A "rule of reason" necessarily must apply. However in this case, we do not think it is unreasonable for the Commission to explain why it rejected alternatives that were the subject of extensive findings in the EIS, such as the potential routes and construction of a coal slurry pipeline, see note 28 infra.

32. The Commission maintains that petitioner is merely seeking duplication in the order of findings made in the EIS. This is incorrect. Petitioner challenges neither the adequacy nor the location of the findings actually made. It seeks to have the Commission explain how the environmental findings affected its final decision. Since that explanation is not contained in the EIS, its inclusion in the order would not be duplicative. Of course, to the extent the necessary analysis had been included in the EIS, it would not be necessary to repeat it in the order.

33. Petitioner also contends that the Commission should have explained why it did not favor construction of coal slurry pipeline or why it chose not to impose "mitigating measures" as conditions on the construction authorization. We agree that these alternatives should have been discussed. The Commission, however, contends that petitioner cannot challenge now the failure to discuss "mitigating measures" on existing routes because it did not raise this point before the Commission. Although this contention has merit, we decided earlier that the Commission must consider these measures in order to remedy its deficient impact statement. See section II-B, supra.

34. See also City of New York v. United States, 337 F. Supp. 150, 163 (E.D.N.Y. 1972) (three-judge court).

[8 ELR 20271]

ROBINSON, Circuit Judge, concurring:

I share fully the views articulated in Judge Bazelon's resourceful opinion, in which I join wholeheartedly. No more can profitably be said on the merits of the litigation. This relatively brief statement is penned only to address a few additional comments to our dissenting colleague's demurral to any consideration of the merits at all.

The thesis of the dissent is that Sierra Club, having failed to argue in the certification proceeding that the Commission's consideration of alternative routes and off-site impacts did not measure up to the National Environmental Policy Act of 1969,¹ is now foreclosed from registering those complaints here. Like Judge Bazelon, I think a sufficient answer is that the same challenges were squarely before the Commission when earlier it pondered the environmental impact statement in draft form. The Wyoming Highway Department,² the Bureau of Reclamation³ [8 ELR 20272] and Sierra Club itself⁴ all called for more intensive study and discussion of off-site impacts; and the final impact statement, which garnered the Commission's blessing,⁵ attempted to respond.⁶ Beyond that, the Environmental Protection Agency protested as deficient the draft statement's treatment of alternative routes and, with the Wildlife Society's Wyoming Chapter, urged closer evaluation of a rail route assertedly environmentally superior to that upon which the Commission ultimately settled.⁷ No less than any other litigant in comparable circumstances,⁸ Sierra Club can rely in court upon these specific objections, though interposed by other participants in the administrative proceedings.⁹

Plainly, after the final impact statement was accepted by the Commission, Sierra Club could have sued to enjoin further Commission action until the alleged infirmities in that statement were cured.¹⁰ No one, I daresay, would maintain that such a suit would have been embarrassed by the exhaustion doctrine.¹¹ The question, then, is whether there is a decisionally-significant difference simply because Sierra Club waited until the Commission took the major federal action that the statement envisioned. I am unable to perceive any sound reason for holding that another round of exhaustion activities must ensue when invocation of judicial review is postponed in such degree that already-rejected positions could be reasserted before the agency.¹² Perhaps, if the delay is protracted, the suit deservedly encounters a cry of laches;¹³ perhaps judicial redress, if any is properly forthcoming, should be tempered in light of the court's obligation to "consider all the circumstances in fashioning appropriate relief."¹⁴ But surely the exhaustion requirement does not regain its expended vigor during this period of rest.

Administrative remedies once exhausted in my view remain exhausted, and that I submit as the only conclusion tolerable here. Unmistakably, the difficulties with the Commission's environmental assessment were identified in ample time and with sufficient specificity to afford it a fair "opportunity to consider the matter, make its ruling, and state the reasons for its action."¹⁵ Indeed, the Commission passed, albeit faultily, on the very claims tendered here.¹⁶ True it is that judges should insist that challenges to administrative action normally not be raised in court in the first instance.¹⁷ But judges are hardly [8 ELR 20273] justified in demanding more than that litigants indulge an administrative tribunal one clear chance to recognize and rectify its potential blunders.¹⁸

That is not to say, however, that Sierra Club's failure to resume its attack during the certification proceeding is wholly irrelevant to the question of the relief now to be afforded. Although the Commission was presented with the environmental issues at one point, Sierra Club did not utilize, to borrow the dissenter's apt expression, an "available and propitious occasion"¹⁹ to urge all its environmental objections as grounds for a Commission stay deferring certificate-execution pending judicial resolution of those issues. Moreover, instead of seeking a judicial restraint on construction promptly after the final impact statement was approved by the Commission, it waited until after the certificate had been awarded; and, as Judge Bazelon highlights,²⁰ it did not ask this court for a stay of the ongoing work until the eve of oral argument.

When we come, then, to the judicial response appropriate to Sierra Club's request for relief, its omission to resort to reasonable procedures available to an endeavor to halt construction earlier poses an obstacle. Admittedly, "[c]onsiderations of administrative difficulty, delay or economic costs will not suffice to strip [the impact-statement requirement] of its fundamental importance."²¹ But just as it is urgent that the agency prepare the statement early since "project momentum can narrow alternatives drastically,"²² so should statement-challengers exploit the means at hand to press the agency for cessation or temporary postponement of a project before it has progressed too far.

I realize that public interest groups not infrequently are confronted with difficult choices as to where their limited resources can most beneficially be applied. Just how hard and how often Sierra Club could afford to remonstrate against this relatively minor aspect of the explosive energy-related development of Wyoming is a concrete example. When a challenge to the administrative decisionmaker's appraisal of environmental damage is clearly and forcefully made — and Congress has not commanded its repetition — little room is left for an accusation of tampering with the "sound alignment of responsibilities of court and agency."²² The decision to challenge but once may affect the relief justly due in court, but it should not bar the doors of the courthouse completely.²⁴ Otherwise, courts will have set up obstacle courses that may exhaust litigants long before they can exhaust administrative remedies, and will thereby have destroyed the most promising means of achieving the environmental goals of the Act.

1. 42 U.S.C. §§ 4321-4335 (Supp. V 1975).

2. Final Environmental Impact Statement — Eastern Powder River Coal Basin of Wyoming VII-637 (1974).

3. Id. at VII-330.

4. Id. at VII-700.

5. Burlington N., Inc., Finance Doc. No. 27579 (ICC Oct. 8, 1974).

6. Final Environmental Impact Statement, supra note 2, at VII-213.

7. Id. at VII-256, 657, 882. See also id. at VII-287a, 941 (comments of Sierra Club filed after comment period had elapsed but discussed in final statement).

8. Office of Communication of United Church of Christ v. FCC, 150 U.S. App. D.C. 339, 343-344, 465 F.2d 519, 523-524 (1972) (reasoning that the policies behind the exhaustion doctrine are fulfilled when the agency is given an opportunity to pass on the matter contested, regardless of whether "this opportunity [is] afforded in any particular manner, or by any particular party").

9. Judge Bazelon's opinion indicates that the Commission has violated its duty to consider alternatives in its substantive decisionmaking, not just in preparing an impact statement. I agree that it has such a duty. Section 102(2)(C)'s demand that the statement "shall accompany the proposal through the existing agency review process," 42 U.S.C. § 4332(2)(C) (Supp. V 1975), is intended to ensure that environmental effects be considered at every stage. See Kleppe v. Sierra Club, 427 U.S. 390, 409, 96 S. Ct. 2718, 2730, 49 L. Ed. 2d 576, 590 (1976); National Environmental Policy Act of 1969, § 102(1), 42 U.S.C. § 4332(1) (Supp. V 1975) ("to the fullest extent possible . . . the policies, regulations, and public laws of the United States shall be interpreted and administered in accordance with the policies set forth in this chapter"). Under § 102(2)(E) of the Act, 42 U.S.C. § 4332(2)(E) (Supp. V 1975), the Commission must "study, develop, and describe appropriate alternatives" in reaching a decision involving "unresolved conflicts concerning alternative uses of available resources" even when an impact statement is not required. Trinity Episcopal School Corp. v. Romney, 523 F.2d 88 (2d Cir. 1975). A challenger who exhausts administrative remedies on an objection to an impact statement's failure under § 102(2)(C) adequately to discuss alternatives simultaneously exhausts on § 102(2)(E) contentions since "the agency attempting to comply with [the Act] will perform essentially the same task in both situations." Recent Development, 64 Geo. L.J. 1153, 1169 (1976). Thus, if challenged deficiencies in the statement are not remedied in the decisionmaking process, the decision itself is subject to attack in court without further exhaustion because the same issues are involved and the duty to consider is singular and indivisible.

10. See, e.g., Maine Cent. R.R. Co. v. ICC, 410 F. Supp. 657, 658 (D.D.C. 1976); Harlem Valley Transp. Ass'n v. Stafford, 360 F. Supp. 1057, 1059-1060, 1063-1064 (S.D.N.Y. 1973), aff'd, 500 F.2d 328, 334-335 (2d Cir. 1974).

11. Like Judge Bazelon, I reserve judgment on the question whether exhaustion is required at all in cases arising under the Act and, if so, in what circumstances. Majority Opinion (Maj. Op.) at note 13. It cannot be denied that the Act affirmatively requires agencies to consider environmental factors in their substantive decisionmaking; Congress intended the Act to be "action-forcing." Calvert Cliffs' Coordinating Comm. v. AEC, 146 U.S. App. D.C. 33, 36-37, 449 F.2d 1109, 1112-1113 (1971). Perhaps exhaustion should be required only when the agency seriously has attempted to comply yet is accused of failing to discern a procedural or decisional flaw that is only apparent after sophisticated analysis. Thus, as in review of criminal convictions in district courts, "exhaustion" would be excused when the error is a plain one. Silver v. United States, 370 U.S. 717, 718, 82 S. Ct. 1287, 1288, 8 L. Ed. 2d 798, 799 (1962); Fed. R. Crim. P. 52(b); see United States v. Lewis, 140 U.S. App. D.C. 40, 46, 433 F.2d 1146, 1152 (1970) (manifest error necessary); United States v. Shanks, 521 F.2d 83, 86 (7th Cir. 1975) (obvious failure to meet statute).

12. Judge Leventhal, in dissent, apparently discerns a distinction in the fact that certification occurred in a proceeding separate from the one leading earlier to adoption of the impact statement. Dissenting Opinion (Dis. Op.) at 6 and especially 7. This, I believe, overlooks the demand of the Act that reference to environmental factors remain constantly an integral part of agency decisionmaking. See note 9 supra.

13. See W. Rodgers, Environmental Law § 7.10, at 808-809 (1977).

14. Id. § 7.10, at 800.

15. Unemployment Compensation Comm'n v. Aragon, 329 U.S. 143, 155, 67 S. Ct. 245, 251, 91 L.Ed. 136, 146 (1946); accord, Alianza Federal de Mercedes v. FCC, 176 U.S. App. D.C. 253, 260, 539 F.2d 732, 739 (1976) (agency "must be given a fair opportunity to pass on a novel legal or factual argument" (emphasis supplied)).

16. Compare Arkansas Power & Light Co. v. FPC, 170 U.S. App.D.C. 393, 406-407, 517 F.2d 1223, 1236-1237 (1974) ("the agency has for all practical purposes had an opportunity to pass on the issue sought to be raised," having expressed its views in two contemporaneous decisions).

17. McKart v. United States, 395 U.S. 185, 193, 89 S. Ct. 1657, 1662, 23 L. Ed. 2d 194, 203 (1969); accord, Wallace v. Lynn, 165 U.S. App. D.C. 363, 366-367, 507 F.2d 1186, 1189-1190 (1974) ("[i]t is well settled that resort to the judicial process must ordinarily be postponed until administrative remedies capable of rectifying claimed error have been pursued to finality"; purpose of requirement is to conserve judicial resources and prevent forum shopping).

18. See K. Davis, Administrative Law Treatise § 20.08, at 104 n.21 (1958). The Administrative Procedure Act does not require a challenger to seek reconsideration save by superior agency authority. 5 U.S.C. § 704 (1970).

19. Dis. Op. text at note 9.

20. Maj. Op. at 22-25.

21. Calvert Cliffs' Coordinating Comm. v. AEC, supra note 11, 146 U.S. App. D.C. at 39, 449 F.2d at 1115.

22. W. Rodgers, supra note 13, § 7.7, at 767.

23. Dis. Op. at 6.

24. Much the same answers Judge Leventhal's concern over "skinny" objections, which assumably are used as a means of securing reversal without evoking any previous agency reflection that might have resulted in compliance with the Act without delaying approval of the project. See Dis. Op. at note 9. The additional comments addressed to this concurrence, Dis. Op. at 7-8, suggest that at the heart of the dissent is a feeling that the Commission was ambushed somewhere out in the plains of Wyoming. I agree that environmental groups have a responsibility to assist agencies in considering environmental concerns, and are not be permitted to lie in wait and pounce upon a blunder that might not have been made had the group pushed harder. And while I am troubled by Sierra Club's performance in this case, my only real disagreement is in the appropriate response by this court.

The dissent seemingly is not grounded in traditional exhaustion doctrine, for surely the alternative-routes issue was presented to and in fact was decided by the Commission. Had the initial protest been too superficial to have provided a fair opportunity for agency reflection, there would, of course, have been no exhaustion. And if we should ever face a situation in which the agency has enjoyed such an opportunity and yet the challenger's tactics "look more like a delaying tactic," Environmental Defense Fund v. EPA, 160 U.S. App. D.C. 123, 132 n.57, 489 F.2d 1247, 1256 n.57 (1973), we can adjust the relief granted accordingly.

Thus, the dissent appears concerned not with exhaustion as we commonly think of it, but with equity and a dislike of Sierra Club's conduct in this litigation. But the Commission's refusal to consider alternative routes is no less troubling than Sierra Club's failure to try a second time to convince it to do so, and with the parties' equities in collision I would look to the public interest. Certainly we want to discourage the conduct abhorrent to the dissent, but the threat of equitable adjustments in the remedy will suffice fully for this purpose, and I see no need to bend the exhaustion doctrine to reach a solution to problems outside its scope. Furthermore, while we might frown on Sierra Club's tactics, those tactics can be discouraged without sacrificing the congressional mandate of full administrative study of environmental issues.

[8 ELR 20273]

LEVENTHAL, Circuit Judge, dissenting:

This case is before us on a petition to review an order of the Interstate Commerce Commission granting a certificate of public convenience and necessity that authorized two railroad companies jointly to construct a 113-mile railroad line in Wyoming.¹ The majority opinion remands for further proceedings. I respectfully dissent.

A. Environmental Impact Statement

The claim is one of failure to give adequate consideration to environmental impact. The railroad issue is part of the larger picture of the rapidly expanding development of a coal industry in Wyoming. Assorted applications for leasing and mining authorizations were pending before other federal agencies when representatives of the ICC met in January 1974 with officials of the Agriculture and Interior Departments to develop an inter-agency environmental impact statement (EIS) concerning the development of the coal resource in the area. Experts from these agencies, working in six teams, prepared a five-volume, 1700-page draft statement for the Eastern Powder River Coal Basin. That draft statement examined the basin-wide area, ranging over some 7500 square miles, and site-specific impacts in northeastern Wyoming and southeastern Montana.The document was submitted to the Council on Environmental Quality on May 31, 1974, and comments were solicited. Some 52 parties filed comments, both during the 60-day period which ended August 2, 1974, and thereafter. These included eight Federal agencies, eight Wyoming state agencies, eight Wyoming [8 ELR 20274] counties, and a number of public interest groups, industrial concerns, and private citizens. After extensive notice, five days of public hearings were conducted in Wyoming.

The final environmental impact statement was adopted by the ICC on October 8, 1974 (348 ICC at 389). This EIS gave consideration to various alternatives: to the alternative of no development at all, and to various methods of distribution and transportation, including coal slurry pipelines, transmission lines from electric generating plants constructed at mine mouth, pipelines for gasification plants, trucks, and conveyer belts.² As to railroad routes, the EIS considered three alternate routes, and also "mitigating" measures to reduce the impact of traffic over the proposed joint line, including various construction requirements and restrictions on the method of applying herbicides to protect water resources.³ The EIS included a 1000-page volume (Vol. IV) summarizing comments on the draft, the testimony at the hearings, and the agencies' responses.

Plaintiff Sierra Club did not, at the time of adoption of the EIS, file an action attacking the impact statement as contrary to the National Environmental Policy Act (NEPA). Rather, at that time Sierra Club was contending that the agencies were required to prepare a comprehensive EIS with respect to coal development of the entire Northern Great Plains Region — a 90,000-square-mile region. Although that contention was ultimately rejected,⁴ it should be viewed as preserving for the Sierra Club the right subsequently to present appropriate challenges to individual impact statements or to federal actions adopted or approved in their wake.

B. The Certificate Proceeding

In due course, after it adopted the final EIS, the ICC came to conduct the certificate proceeding, to determine whether it was in the public interest to grant any of the pending applications for certificates of convenience and necessity under the Interstate Commerce Act to permit construction and operation of new railroad facilities. Pursuant to a Commission order issued November 18, 1974, parties to the proceeding filed, in December of 1974 and the early months of 1975, verified statements supporting or opposing the pending certificate applications.

As I have already stated, the fact that there was no recourse to the courts in the wake of the inter-agency environmental impact statement, did not bar any party to the certificate proceeding from presenting to the ICC a position adverse to any particular application or applications on the ground of insufficient or mistaken consideration of the environmental component of the public interest.

What is striking about the present appeal from the ICC order granting a certificate is that in the certificate proceeding (as far as can be ascertained from the joint appendix) there was no objection by any party — neither the Sierra Club nor any other party — to any aspect of the EIS other than a renewal of the contention (ultimately rejected by the Supreme Court), that the EIS failed to consider the impact of coal development related activities on the entire Northern Great Plains Region, and was therefore unlawfully limited in scope.

On January 9, 1976, the entire ICC granted the certificate to build the joint line, and dismissed the two separate applications of the Burlington Northern and the Chicago North Western (348 ICC at 399, 405). The decision responded to the nation's pressing need for low-sulphur coal and the specific need for that coal presented by utilities supporting the application.⁵

The Sierra Club petitioned for reconsideration, but focused primarily on contentions that a regional environmental analysis was required,⁶ and that the EIS done on the pending railroad proposal was inadequate, particularly in its minimal treatment of the coal slurry pipeline "alternative." While there are repeated claims of "no analysis" in the petition for reconsideration, they are directed at the EIS as a predicate to the "necessary consideration of the broad implications of the Commission's final decision." (Petit. at 7, J.A. 112). No demand is made in Sierra's petition for clarification of the Commission's reasons for choosing the proposed rail route over the alternative rail routes discussed in the EIS.⁷

The Sierra Club now seeks review of the Commission's decision, for the first time raising the issue of whether the Commission adequately considered alternatives to the route authorized.

C. Need for Exhaustion of Administrative Remedies in the Certificate Proceeding

My brethren have concluded that this is a case that requires remand to clarify the basis of the Commission's determination. They agree that this remand is not concerned with the issues identified by the Sierra Club in its petition to the ICC for reconsideration. Rather, the remand is for clarification of the basis for choosing the particular location for the railroad rather than the alternative routes examined in the EIS.

I agree that as to the location of the railroad, the ICC opinion is far from clear.⁸ The determination by the ICC certainly was not elegant. It is not unjust to say that [8 ELR 20275] the ICC report consists essentially of a recitation of the contentions brought out by Burlington Northern — including the assertion that the three alternatives were roughly the same in terms of environmental impact per mile and the jointly proposed line had fewer miles.

I doubt whether this would be enough if the plaintiffs had pressed before the ICC the point of lack of clarity in its report.However, they not only failed to file a motion for clarification, or equivalent document, they did not make any reference to this issue in their petition for rehearing. I do not think that the courts can sustain a relatively refined objection to agency action at the instance of a group that did not fairly focus the attention of the agency on the problem at an earlier available and propitious occasion.⁹ General doctrine of administrative finality says that a party need not re-present his objection in a petition for reconsideration as a prerequisite to judicial review. But where a party appealing an agency order presents a contention that he has failed to raise or preserve in the proceeding resulting in the order, and has failed to raise in a petition for reconsideration that states other objections, the contention is not properly before us.

The doctrine of exhaustion may seem harsh, but it is vital to a sound alignment of responsibilities of court and agency. In effect, it applies not only to parties but also to the agency, for the agency is required by Chenery and its progeny to confine itself to defense of its order on grounds stated in its disposition, and is subject to rebuff by the courts in any effort to support its disposition on "new" grounds.¹⁰ Public interest groups may face difficult choices on which points to press, and how hard. But such choices are the very stuff of the law and they daily confront those who look to the processes of law.

* * *

Receipt of Judge Robinson's concurring opinion prompts me to add some observations.

Undoubtedly the issues of off-site impactsand alternative routes were raised by various agencies, and by the Sierra Club itself, in comments on the draft inter-agency EIS.See p. 1 of Judge Robinson's opinion supra. In this sense these questions were "before the Commission" and before the other agencies participating in the EIS. At that stage, comments were invited from the public at large, and many persons responded.

By contrast, the present case involves a formal proceeding before the ICC to determine whether to grant pending applications for a certificate of convenience and necessity. As a party, Sierra Club assumes a relationship to the proceeding that is, I believe, of a nature distinctly different from that of an interested member of the public at large. A party plays a direct and immediate role. Only a party is permitted to appeal the grant of a certificate. This role carries with it certain responsibilities — to other parties, to the court if an appeal is in contemplation, and ultimately to the public. Strategic choices must be made regarding the emphasis of a litigation, and issues must be framed so as to utilize efficiently the resources of our system, the administrative process and the judicial review process.

Sierra Club now dredges up from the mass of comments on the draft inter-agency EIS made by various interests and agencies, issues concerning which it has heretofore expressed little or no interest,¹¹ and which, as far as can be ascertained from the Joint Appendix, did not prompt any of the commentators in question to become parties to the proceeding. This court took what environmentalists considered a big step forward when it made clear that NEPA issues may be raised in a formal proceeding. Calvert Cliffs Coordinating Committee v. United States Atomic Energy Comm'n, 146 U.S. App. D.C. 33, 449 F.2d 1109 (1971). It confounds good administration to say that environmentalists have power but not responsibility, and that they do not have to alert the agency in the formal proceeding of the seriousness of their contentions, and to provide a timely opportunity in the proceeding to give relief (or partial relief).

The majority apparently conclude that the proper reconciliation of the exhaustion doctrine and the action-forcing NEPA requires the former doctrine to yield. I disagree. But that does not end the matter for me. I must realistically consider whether there is a conception that the exhaustion doctrine has enough resilience to warrant contraction on the ground that it leads to results contrary to the public interest in a particular case. The exhaustion cases exhibit some divergency and perhaps this is the kind of concept that reconciles the cases. In this circuit, we have been relatively faithful to the doctrine — even in the face of claims that would likely have had merit if appropriately raised before the agency.¹² But even if I concluded that such a concept may have validity, this is not the kind of case that would lead me to skimp the doctrine on the ground of such overriding public interest. Sierra Club's tardy and ill-foreshadowed maneuver is unlikely to result in any significant modification in the development of rail service to the Powder River Basin, unlikely to yield more than frustration, and a sterile and ritualistic compliance on the part of the Commission.¹³

[8 ELR 20276]

NEPA is an "action-forcing" statute that requires an agency to exercise initiative in assessing environmental impact.But those who would challenge an agency order entered after a proceeding must abide by the rules that govern challenging parties. The agency has a responsibility, but challenging parties have a counterbalancing responsibility to focus the issues and gauge the pace of litigation so as to promote efficient and meaningful resolution of disputes.

It is no answer to say that since NEPA is an "action-forcing" statute, the courts should be vigilant to enforce appropriate environmental action by the agencies concerned, and that this is the overriding consideration of the public interest. Suppose an agency issued an environmental impact statement that was wholly deficient but no one filed a lawsuit. Could a court do something about it? Of course not. If someone does file a lawsuit, is the court debarred from taking into account such considerations as laches? I think not. If an environmental group files a lawsuit in the form of an appeal from an order granting a certificate, can its appeal be entertained even though it was not a party to the certificate proceeding and hence does not comply with the provision in the jurisdictional statute governing appeal of such orders? Clearly not. Similarly, I think, if it does become a party it must comply with sound administrative doctrines governing parties, and must identify its objections in the proceeding in a meaningful way. The fact that someone else presented an objection previously, in some comment, is not enough. For all the agency knows, the different group that earlier presented that objection threw it out in the first instance for what it was worth, and then threw it out as not worth much.¹⁴

The interaction of environmental law and administrative law must combine insistence on meaningful environmental impact statements with insistence on meaningful party objections in the administrative process toward the objective of optimum agency performance. This is not a case for categorical absolutes. I do not suggest that exhaustion doctrine would apply if the agency thumbed its nose at NEPA. Courts have always found a way to bend doctrines limiting judicial scope when an agency blatantly disregards the law, out of recklessness or impudence. But cavalier disregard of NEPA is likely a thing of the past. Certainly, it is not a feature of this record, as I have made clear.

This is a case of a relatively sophisticated environmental contention. The applicability of exhaustion doctrine may be demonstrated by supposing that Sierra Club had come into court after the impact statement had been filed and before a certificate proceeding had begun, and argued that the agency had not sufficiently explored the environmental consequences of one rail route against another.¹⁵

Beyond doubt the court would have said something like this: Certain questions, like the large regional plan question, can be considered in the light of the environmnetal impact statement as issued, but a refined environmental question like this one is a matter that will have to be explored in the certificate proceeding, and the court cannot consider the issue at this time. But if environmental law depends on an agency's giving refined consideration to a specific problem in a particular proceeding, and it be sound to say that persons or groups interested in protecting the environment have no responsibility in that proceeding, at least to articulate the issue?

Judgment is required in this blend of environmental and administative law, for as I have noted this is not a case for categorical absolutes. In my view, the majority have come to the wrong judgment.

To insist on responsible participation by a party is not a matter of punishment, but of allocating responsibilities to obtain optimum performance of overall Congressional objectives. Review of administrative agencies by the courts is a means of ensuring collaboration between them in aid of Congressional objections.¹⁶ The kind of judgment entered today is more likely to promote sterile frustration and resentment than a vigorous and mutually reinforcing interaction. It puts a strain on the developing judicial system of environmental safeguards beyond the point of utility and sound discretion.

1. 348 I.C.C. 388 (1976).

2. Vol. II, I-695-701. See also Vol. II, I-663; I-549-552 and Vol. I, I-48-50.

3. Vol. II, I-612-646.

4. The argument was accepted by a panel of this court, but rejected by the Supreme Court. Kleppe v. Sierra Club, 427 U.S. 390 (1976), rev'g Sierra Club v. Morton, 169 U.S. App. D.C. 20, 514 F.2d 856 (1975).

5. The application was supported by seven public utility companies: Iowa Power and Light, Kansas City Power and Light Co., Oklahoma Gas and Electric Company, Public Service Company, Tulsa, Oklahoma, Omaha Public Power District, Southwestern Electric Power Company, Shereveport, La., and Kansas Power and Light Company.

6. A matter decided adversely to the Sierra Club in Kleppe v. Sierra Club. See note 4 supra.

7. Some of the general language in the "no analysis" remarks of the petition for reconsideration might conceivably be broad enough to include the present claims, as a matter of syntax. However, the petition for reconsideration was simply not effective, in any meaningful sense, to call the attention of the Commission to the issue now developed in the majority opinion of this court.

8. I think, however, that the path of the ICC, though shadowy, may be discerned, within the meaning of the "discern the path" doctrine of Colorado Interate Gas Co. v. FPC, 324 U.S. 581 (1945). See Greater Boston Television Corp. v. FCC, 143 U.S. App. D.C. 383, 393, 444 F.2d 841, 851 (1970), cert. denied, 403 U.S. 923 (1971).

9. See Alianza Federal de Mercedes v. FCC, 176 U.S. App. D.C. 253, 539 F.2d 732, 739 (1976).

As a separate matter, I would say that the exhaustion doctrine might well operate against a party even in a case where an objection had been raised before the agency, if it were presented in only a formal and "skinny" way, and it were then omitted from a petition for reconsideration.

10. See SEC v. Chenery, 318 U.S. 80, 95 (1943); Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69 (1962).

11. The issues now raised by Sierra Club were initially raised by commentators on the draft EIS. See concurring opinion of Judge Robinson at 1 supra. I find it significant that none of these commentators (aside from Sierra Club) were parties in the certification proceeding, and that none of the parties to the proceeding raised these issues — either in the proceeding itself or by way of petition for reconsideration.

12. See Alianza Federal de Mercedes v. FCC, 176 U.S. App. D.C. 253, 260, 539 F.2d 732, 739 (1976); Spanish International Broadcasting Co. v. FCC, 128 U.S. App. D.C. 93, 385 F.2d 615 (1967).

13. Judge Robinson relies, supra at 2 n.8, upon Office of Communication of United Church of Christ v. FCC, 150 U.S. App. D.C. 339, 343-44, 465 F.2d 519, 523-24 (1972). In that case the appellant Church provided legal advice and other services to civic associations in filing a petition to deny the license of a local TV station. The petition to deny was ultimately withdrawn after a settlement was negotiated with the licensee. The FCC refused to permit the voluntary reimbursement of expenses to the Church, which brought an appeal on the ground, inter alia, that reimbursement encourages citizen participation in the renewal process — a policy mandated by the Communications Act. This court held, as a preliminary matter, that the appeal was not barred by the Church's earlier failure to make the policy argument before the Commission — either at the time of the Church's request for Commission approval of reimbursement or by petition for rehearing.

There is no realistic similarity between United Church of Christ and the case at bar. The church pursued a goal of limpid significance — financial reimbursement for its efforts. This was not a week alternative to the initial litigating position, belatedly pounced upon to snatch a minor victory from the jaws of a major defeat. Rather, the financial reimbursement complemented and fortified the (partial) success on the merits, achieved through settlement. There was no suggestion of a midstream change in the thrust of the litigation, and no probability that the outcome of our action would lack practical import. The church's delay in presenting its policy argument constituted a lapse at most, hardly a perversion of the judicial process.

14. This is not a mere play on words. Even in a proceeding a party may offer a multitude of comments and objections, for what they are worth — i.e., for such consideration as the agency may deem appropriate. And if the party comes to realize that a point is not worth much, perhaps is a mere detail without substantial impact, it will fail to pursue the matter, will fail to seek reconsideration and fail to appeal.

15. The action would have had to be filed in district court. This raises another question. Perhaps that is where plaintiff should be, if it chooses to bypass the rules that govern parties in certificate proceedings. I put that technical question of which court has jurisdiction aside, for my own view of the sound development of law, which I hope Congress will adopt, is a provision for easy transfer from one federal court to another in case of a jurisdictional mistake. See Investment Company Institute v. Board of Governors of Federal Reserve System, 179 U.S. App. D.C. 311, 324, 551 F.2d 1270, 1283 (1977).

16. See United States v. Morgan, 307 U.S. 183, 191 (1939); United States v. Morgan, 313 U.S. 409, 422 (1941); Greater Boston Television Corp. v. FCC, 143 U.S. App. D.C. 383, 393-94, 444 F.2d 841, 851-52 (1970).

8 ELR 20265 | Environmental Law Reporter | copyright © 1978 | All rights reserved