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8 ELR 20311 | Environmental Law Reporter | copyright © 1978 | All rights reserved Cross-Sound Ferry Services, Inc. v. United StatesNo. 77-4162 (2d Cir. March 13, 1978)The court denies a petition for review of an Interstate Commerce Commission (ICC) order granting a conditional certificate of public convenience and necessity and affirms the ICC's conclusion that its decision is not a "major Federal action" under the National Environmental Policy Act (NEPA), thereby denying petitioner a right to a hearing on the environmental issues. Petitioner argued that the grant of operating rights to intervenor Mascony Transport and Ferry Service, Inc. (Mascony) was invalid because (1) the ICC arbitrarily and capriciously permitted Mascony to introduce additional evidence after the close of the record while forbidding the admission of additional evidence from petitioner; (2) the ICC did not act in conformity with NEPA; and (3) the ICC erred in finding that Mascony was "fit, willing, and able to perform" the requested ferry service across Long Island Sound. The appropriate test is one of rationality; the order may not be overturned if it was based on substantial relevant evidence, was fairly ascertained, and if the ICC made no clear error of judgment. The court rejects the first argument because petitioner was able to respond to additional evidence tendered and because administrative agencies have broad discretion regarding the updating of evidence. No unfairness was present in this respect. On the NEPA claim, although an environmental impact statement was prepared, the court upholds the ICC's determination, after consideration of all relevant material, that the decision was not a major federal action, and petitioner had no right to a hearing on environmental issues. Finally, the ICC has broad discretion to decide on a case-by-case basis whether the applicant is "fit, willing, and able to perform" and the fact that certain safety and docking problems still exist are not sufficient to require a withdrawal of the certificate. The ICC considered all relevant factors, and the court cannot say that its decision was arbitrary, capricious, or an abuse of discretion, or that it was unsupported by substantial evidence. The full text of this opinion is available from ELR (16 pp. $2.00, ELR Order No. C-1150). An excerpt of the court's opinion dealing with the NEPA issue follows: Petitioners argue further that the grant of operating rights to Mascony was invalid because the ICC failed to satisfy the procedural requirements of the National Environmental Policy Act of 1969 ("NEPA") 42 U.S.C. § 4321 et seq. They argue that regulations adopted by the ICC pursuant to the statute require that final environmental impact statements be submitted to the public at least 15 days prior to required oral hearings on those statements, 49 C.F.R. § 1108.16(b), and that at such hearings, any party must be permitted to offer evidence and cross-examine witnesses with regard to environmental issues, 49 C.F.R. § 1108.17(b). In the instant case, it is averred, no public hearing was held either before or after the issuance of the final EIS. Thus petitioners allege that they were denied an opportunity to subject the EIS to the "scrutiny of cross-examination and confrontation," in contravention of federal law. We cannot agree with the petitioners' conclusions. NEPA requires that in the case of "major Federal actions significantly affecting the quality of the human environment" federal agencies must prepare "a detailed statement by the responsible official on — (i) the environmental impact of the proposed action. . . ." 42 U.S.C. § 4332(2)(C). An EIS is required only in the case of major federal actions significantly affecting the quality of the human environment. The identification of such actions is the responsibility of the relevant federal agency "to be carried out against the background of its own particular operations. . . . The words 'major' and 'significantly' are intended to imply thresholds of importance and impact that must be met before a statement is required." 40 C.F.R. § 1500.6 (advisory regulations of the Council on Environmental Quality). In Hanly v. Kleindienst, 471 F.2d 823 (2d Cir. 1972), cert. denied, 412 U.S. 908 (1973), this court indicated that an agency's threshold determination that an EIS is or is not required should ordinarily be based on consideration of two factors: "(1) the extent to which the action will cause adverse environmental effects in excess of those created by existing uses in the area affected by it, and (2) the absolute quantitative adverse environmental effects of the action itself, including the cumulative harm that results from its contribution to existing adverse conditions or uses in the affected area." 471 F.2d at 830-31. Furthermore, before such a threshold determination is made, an agency must give public notice of the proposed federal action, and an opportunity to submit relevant data "which might bear upon the agency's threshold decision." A hearing is not ordinarily required in this instance, although it may often be advisable. Having fulfilled these procedural requirements, an agency's determination that an impact statement is not required will be overturned by a reviewing court only if it is arbitrary, capricious, or an abuse of discretion. In the instant case, petitioners were, at all relevant times, on notice with regard to the proposed certification of Mascony. The Commission, after issuing its draft EIS, solicited comments from all interested parties. It appended all comments received to the final EIS, and addressed each of the contentions put forward by commenting parties. In its decision of November 3, 1976, 353 ICC Reports 60, the Commission carefully considered the environmental impact of the proposed action, both in relation to present conditions and in light of "absolute quantitative adverse environmental effects." The Commission concluded that "this decision is not a major Federal action significantly affecting the quality of the human environment." It is conceded that the Commission's conclusion can reasonably be disputed. Indeed, it is questioned in a dissenting opinion by Commissioner Murphy. The proposed action comes within the "gray area," in which the statutory term "significant" (and subsequent glosses on the term) are insufficiently concrete to provide a clear and absolute standard of decision. Still, it cannot be said that the Commission failed to consider relevant data, or that its decision was arbitrary, capricious, or represented an abuse of discretion. Accordingly, this court must abide by the Commission's determination, which was reached after consideration of all relevant material and in accordance with procedural requirements. Since the proposed action is outside the terms of the Environmental Protection Act, no EIS is required, and a fortiori, petitioners have no legal right to a hearing on the environmental issues.4 4. It might be noted parenthetically that even if the proposed action in this case had been construed as a "major Federal action," it is still highly likely that the ICC would have acted in conformity with the requirements of NEPA. There is no procedural requirement under the Act or its implementing regulations that public hearings be held in every case. See 42 U.S.C. § 4321 et seq.; 40 C.F.R. §§ 1500.7(d), 1500.9(d), 1500.10; 49 C.F.R. §§ 1108.15, 1108.16(b), 1108.17(a). NEPA requires only that an EIS "accompany [a] proposal through the existing agency review process." [Emphasis added.] 42 U.S.C. § 4332(2)(C). Unless hearings are required by statute or as a matter of due process, they are discretionary with the federal agency. See 5 U.S.C. § 554. In the case of grants of certificates of public convenience by the ICC, neither statute nor Commission regulations requires an oral hearing. 49 U.S.C. § 909(c); 49 C.F.R. §§ 1100.247(e)(1), (3). It follows that NEPA does not itself require hearings in this context. Greene County Planning Board v. Federal Power Comm'n, 455 F.2d 412 (2d Cir.), cert. denied, 409 U.S. 849 (1972), even if still valid after Aberdeen and Rockfish RR v. Students Challenging Regulatory Agency Procedures, 422 U.S. 289 (1975), is not on point. There, unlike in the instant case, the Federal Power Commission was required by its own regulations to hold hearings before granting licenses to construct highvoltage power lines. See 18 C.F.R. §§ 4.32(a) and 3.114(b). Harlem Valley Transportation Ass'n v. Stafford, 500 F.2d 328 (2d Cir. 1974), is similarly distinguishable. There a public hearing was required by the Interstate Commerce Act, 49 U.S.C. § 1(19). (Since repealed by Pub. L. No. 94-210, Title VIII § 801(b), 90 Stat. 127 (Feb. 5, 1976). On this reading, even if the grant of a certificate to Mascony had been construed as a major federal action significantly affecting the environment, the Commission still would not have been required to hold public hearings on the matter, so long as its notice and comment requirements were adhered to. 49 C.F.R. §§ 1108.14-1108.17. Counsel for Petitioner Counsel for Respondents Counsel for Intervenor Mascony Transport & Ferry Service, Inc. [OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE] 8 ELR 20311 | Environmental Law Reporter | copyright © 1978 | All rights reserved |