Sierra Club v. Van Antwerp

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 22, 2011 Decided November 29, 2011

No. 10–5284

SIERRA CLUB, ET AL.,
APPELLEES
v.

ROBERT L. VAN ANTWERP, LIEUTENANT GENERAL, U.S.
ARMY CORP OF ENGINEERS, ET AL.,
APPELLEES

SIERRA PROPERTIES I, LLC, ET AL.,
APPELLANTS

Consolidated with 10–5297, 10–5345

Appeals from the United States District Court
for the District of Columbia
(No. 1:07–cv–01756)

Lane N. McFadden, Attorney, U.S. Department of
Justice, argued the cause for federal appellants. With him on
the briefs was Lisa E. Jones, Attorney. Jessica O'Donnell,
Attorney, and R. Craig Lawrence, Assistant U.S. Attorney,
entered appearances.
 2

Douglas M. Halsey, T. Neal McAliley, and Angela D.
Daker were on the briefs for appellants Sierra Properties I,
LLC, et al.

Eric R. Glitzenstein argued the cause for appellees Sierra
Club, et al. With him on the briefs was Howard M. Crystal.

Before: GARLAND and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

WILLIAMS, Senior Circuit Judge: In 2007 the U.S. Army
Corps of Engineers issued a permit authorizing the discharge
of dredge and fill material into specified wetlands outside
Tampa, Florida; it thereby enabled construction of a large
mall. A number of firms are involved on the permittee’s side
in these appeals, but we will simplify by referring to them all,
as well as the project, as “CCTC,” standing for “Cypress
Creek Town Center.” Three environmental groups
(collectively referred to as the “Sierra Club”) brought suit in
district court to challenge issuance of the permit. (The suit
names the heads of the Department of the Interior and the U.S.
Fish and Wildlife Service as well, but we treat the Corps as a
stand-in for all federal defendants.) Plaintiffs invoked three
statutes: the National Environmental Policy Act (“NEPA”),
the Clean Water Act (“CWA”), and the Endangered Species
Act (“ESA”). After some complications described below, the
district court issued a decision finding that the Corps had not
fully complied with its obligations under NEPA and the
CWA, but rejecting the plaintiffs’ ESA claim. It granted
summary judgment for the Sierra Club on the first two claims
and for the Corps on the third. Sierra Club v. Van Antwerp,
719 F.Supp.2d 58 (D.D.C. 2010).
 3

CCTC and the Corps appealed, and the Sierra Club cross-
appealed. We affirm in part, reverse in part, and remand,
concluding that the Corps did satisfy the demands of the three
relevant statutes, except for failing to respond, in its treatment
of the NEPA and ESA requirements, to a material contention
as to the project’s impact on an endangered species, the
eastern indigo snake.

* * *

Because CCTC proposed to discharge dredge and fill
material into wetlands classified as “waters of the United
States,” it was required to secure a permit from the Corps
under § 404 of the CWA, 33 U.S.C. § 1311(a), 1362(7). The
Corps originally issued the permit in 2007, allowing CCTC to
discharge such material into about 54 acres of wetlands. In
exchange, the Corps required various conservation measures,
including the preservation, creation, or enhancement of
wetlands on about 13 acres of the project site and nearly 120
acres offsite. The Sierra Club filed suit in October 2007, but
soon thereafter the Corps observed two unauthorized
discharges of “sediments and turbid water” from the project
site into nearby Cypress Creek, and accordingly suspended the
permit. The district court granted the Corps’s request to
remand the case to it for a reevaluation of the permit. After
issuing a new public notice, the Corps determined that the
discharges were the product of “human error” rather than a
flaw with the project itself. It reinstated the permit in
September 2009, but required additional “corrective
measures.” The Sierra Club filed a revised complaint
challenging the new permit. The district court granted split
summary judgments as noted above.

As we review grants of summary judgment de novo, we
are on this appeal in reality reviewing the decision of the
 4

Corps, not that of the district court. Natural Resources
Defense Council v. Daley, 209 F.3d 747, 752 (D.C. Cir.
2000). Our review is governed by the usual standards of 5
U.S.C. § 706(2)(A) and Motor Vehicle Mfrs. Ass’n v. State
Farm, 463 U.S. 29 (1983).

* * *

CWA. The governing regulations bar the Corps from
granting a CWA fill permit when “[t]here is a practicable
alternative to the proposed discharge that would have less
adverse effect on the aquatic ecosystem.” 40 C.F.R.
§ 230.12(a)(3)(i). They specify that “[a]n alternative is
practicable if it is available and capable of being done after
taking into consideration cost, existing technology, and
logistics in light of overall project purposes.” 40 C.F.R.
§ 230.10(a)(2). If (as here) a project’s purpose does not
require proximity to water, “practicable alternatives that do
not involve special aquatic sites [such as wetlands, see id.
§ 230.41] are presumed to be available.” Id. § 230.10(a)(3).
The Sierra Club contended (and contends here) that in fact
there were practicable alternatives—other sites, or alternative
ways of using the CCTC site—having less adverse effect.
The Corps rejected these claims. Resolution of the
practicability issue turns on four subissues: (1) use of the
site’s fair market value as its cost, rather than CCTC’s (lower)
out-of-pocket cost; (2) failure on the Corps’s part to update
the fair market value in its second look at the permit (which
took place after the onset of the global financial meltdown in
2008); (3) the Corps’s use of 8% as the minimum rate of
return necessary for an alternative to be considered
practicable; and (4) CCTC’s intention to provide more
parking per 1000 square feet of retail space than is provided
on average, locally and indeed nationally.
 5

For any given minimum rate of return, assumption of a
lower cost for the site (see J.A. 613-36, 1660) will tend to
render “practicable” less intensive uses, i.e., uses inflicting
less ecological damage. This fact drives the Sierra Club’s
argument for acquisition cost, which in this case happened to
be lower than fair market value. But the Sierra Club’s
contention that the regulation required the Corps to use the
developer’s acquisition cost is ill-founded.

First, as a matter of simple language, opportunity cost
(the value the owner could realize by a current sale) is a well-
recognized form of cost. This is obviously true in economics,
and the practicability test, though certainly neither a cost-
benefit test nor an efficiency test, nonetheless encompasses
economic factors. And courts have recognized opportunity
cost as a variant of “cost.” Thus, the Supreme Court, in
upholding the Federal Communications Commission’s
decision to set certain rates “on a forward-looking basis
untied to [the providers’] investment,” cited opportunity cost
by way of analogy. Verizon v. FCC, 535 U.S. 467, 475, 499
n.17 (2002); see also Natural Gas Clearinghouse v. FERC,
108 F.3d 397, 400 (D.C. Cir. 1997). Second, the regulations’
evaluation of alternatives requires consideration of cost on
both sides of the comparison, and the cost of an alternative
project site would presumably be that site’s market value.
The comparison would be meaningful only if the Corps used
the same metric for all options. Third, 40 C.F.R.
§ 230.10(a)(2), in directing consideration of “cost,” can
sensibly (perhaps most sensibly, but we need not so decide)
mean the cost of proceeding with the project as planned; for
this, clearly, the relevant measure of the developer’s land cost
is what it foregoes by proceeding (rather than selling the land
and realizing its market value). See Corps’s Combined Reply
and Response Br. 6-7. Fourth, whereas use of opportunity
cost minimizes subjective, applicant-specific factors, reliance
on the developer’s acquisition cost would create the odd
 6

possibility that an alternative practicable for one applicant
would be impracticable for another. Finally (and this is really
a variation of the fourth point), to use out-of-pocket cost
would create an anomaly: An applicant with a low acquisition
cost could resell the site at market value and thereby enable a
successor developer to refute practicability claims that had
been fatal for the seller. Accordingly, we have no difficulty
whatever deferring to the Corps’s reasonable choice to use the
land’s market value, rather than the developer’s acquisition
cost.

Peripheral to the acquisition-cost claim is the Sierra
Club’s attack on the Corps’s failure to update the land’s
market value when it reinstated the permit in 2009, after land
values had fallen sharply, especially in the so-called “sand”
states, including Florida. The Sierra Club notes that the Corps
did update some plans and data, mostly related to the
mitigation plan and stormwater management, and it thus
claims an arbitrary inconsistency on the Corps’s part. But the
Corps’s decision to update ecological but not economic data
appears reasonable in light of the Corps’s reasons for
reexamining the original permit. As its December 2008
public notice explained, it suspended that permit because of
unauthorized discharges of turbid water, and then undertook
to decide whether to reinstate, modify, or revoke the permit,
saying that its decision would “be based on an evaluation of
the reassurances given to the Corps about the likelihood of
future discharges of turbid water from the CCTC project site
into Cypress Creek and wetlands on the site.” J.A. 1546-47.
Though the Corps also stated that it would “evaluate any other
facts and issues as necessary,” J.A. 1546, we see no basis in
this for requiring it to restart its entire permitting analysis
from zero. Given the scope of the 2009 permit re-analysis, it
was reasonable for the Corps to update only the plans and data
related to ecological matters.
 7

The Sierra Club also attacks the Corps’s acceptance of
the applicant’s contentions that an 8% rate of return was
necessary to secure financing and that the planned project
configuration was the only way to achieve that return. The
Sierra Club claims that the record does not support use of an
8% rate; assumption of a lower required rate of return, of
course, would tend to increase the range of practicable
alternatives.

The CCTC submitted several reports, including one
prepared by Ernst & Young, that examined the rates of return
expected from comparable projects in the Tampa area. These
reports produced estimates ranging from 7.6% to 10.06%.
The Ernst & Young report concluded that a 7.6% return would
be a “reasonable rate to expect” for the project when
completed, but the project was subject to “a number of
development risk factors” since it had not yet been completed.
Joint Appendix (“J.A.”) 1465. The report stressed the need
for a “spread” between the rate of return on a project still
under development and the rate of return on a “stabilized
operating property.” J.A. 1465. In addition, the record
contained data indicating that Tampa regional malls had a
“going-in capitalization rate” of 7.7%, with that term defined
as “the first year NOI [net operating income] (before capital
items of tenant improvements and leasing commissions and
debt service but after real estate taxes) divided by present
value (or purchase price).” J.A. 835. That of course suggests
that it would be necessary to apply some non-trivial increment
to the 7.6% or 7.7% estimates to make them suitable for
calculating the minimum acceptable return on an as-yet
unbuilt mall. We think the record plainly supports the Corps’s
use of an interest rate at the low end of the range that was in
evidence, and with its modest excess over the very lowest
figures plainly justifiable.
 8

The last of the practicability issues relates to the project’s
planned number of parking spaces—a serious matter because
parking accounts for such a large share of the mall’s surface.
The Sierra Club argues that “CCTC would have more parking
than any existing comparable mall in the Tampa area.” Sierra
Club Opening Br. 53. The record does not make it clear
exactly how many parking spaces CCTC is expected to have,
but gives a range of 5.13 to 6.59 parking spaces per 1,000
square feet of retail space, and the Sierra Club estimates the
overall ratio as being 5.4. J.A. 572; Sierra Club Opening Br.
55. CCTC submitted various items of evidence on the point:
On one hand it provided developer guidelines from Target,
Costco, and Kohls that required 5, 5.5, and 6 spaces,
respectively, per 1,000 square feet of retail space, and on the
other, it also submitted letters from other Florida developers
stating that retail tenants “typically” have “4.5 to 5” parking
spaces per 1,000 square feet of retail space. J.A. 601, 604.

In fact both sides agree that CCTC’s parking ratio
exceeds that of nearby malls. But CCTC defends its above-
average ratio by pointing to the above-average proportion of
restaurants in its project. While the Sierra Club does not
contest the restaurant-parking link, it argues that there is no
reason for so many restaurants. CCTC, in turn, seeks to
justify the high proportion by saying that it aims to create
more than a traditional mall. Whereas traditional malls use
4.8% of their square footage for restaurants, “lifestyle centers”
use 11.3%; CCTC, a self-described “town center,” is between
these two figures at 8.08%. Agency Record (“A.R.”) 4605-
06, 4663.

Given the nature of Sierra Club's arguments to the agency
on this point, the Corps's acceptance of CCTC's parking ratio
was not arbitrary or capricious in light of the practicability
regulations. Those require the Corps to evaluate the
practicability of alternatives “in light of overall project
 9

purposes.” 40 C.F.R. § 230.10(a)(2). The regulations provide
that “it will generally be assumed that appropriate economic
evaluations have been completed, the proposal is
economically viable, and is needed in the market place,” 33
C.F.R. § 320.4(q), but they reserve to the agency an override
power, saying that “the district engineer in appropriate cases,
may make an independent review of the need for the project
from the perspective of the overall public interest.” Id. There
appears to be little judicial interpretation of the process, but it
has yielded one constraint that seems logically necessary:
“[A]n applicant cannot define a project in order to preclude
the existence of any alternative sites.” Sylvester v. U.S. Army
Corps of Engineers, 882 F.2d 407, 409 (9th Cir. 1989). There
is nothing suggesting that CCTC's project definition falls
below that benchmark, and the Sierra Club has not articulated
any other, more binding constraint.

The Sierra Club observed in a letter to the Corps that
even if “town center” malls feature more restaurants than
traditional malls, that fact “does not clearly demonstrate that
reduced parking is impracticable.” We do not think this
observation was enough to impose on the Corps the task of
evaluating the practicability of non-“town center” alternatives.
As it was, the Corps studied eleven alternative locations for
the project and considered four alternative on-site
configurations. J.A. 466-69, 1080-82. While the case does
not require us to say the minimum burden a challenger must
meet to trigger an additional study (and the concomitant
examination of the project's “purpose”), the Sierra Club's
remark was not enough. It did not even argue that this purely
commercial project could achieve the 8% return required to
obtain financing by shifting from a town center to a traditional
mall. Accordingly, the Corps was not arbitrary (or in
violation of the CWA) in accepting CCTC's conception of the
mall's design, including its relatively high proportion of
restaurant space, and hence in finding that fewer parking
 10

spaces did not represent a practicable, less environmentally
damaging, means to satisfy that purpose.

NEPA. NEPA requires that federal agencies prepare
Environmental Impact Statements (“EISs”) for “major Federal
actions significantly affecting the quality of the human
environment.” 42 U.S.C. § 4332(C). “If any significant
environmental impacts might result from the proposed agency
action then an EIS must be prepared before the [agency]
action is taken.” Sierra Club v. Peterson, 717 F.2d 1409,
1415 (D.C. Cir. 1983) (emphasis omitted). An agency can
avoid preparing an EIS if it issues a proper Finding of No
Significant Impact (“FONSI”). In reviewing a FONSI our
task is to determine whether the agency

(1) has accurately identified the relevant environmental
concern, (2) has taken a hard look at the problem in
preparing its [FONSI or Environmental Assessment], (3)
is able to make a convincing case for its finding of no
significant impact, and (4) has shown that even if there is
an impact of true significance, an EIS is unnecessary
because changes or safeguards in the project sufficiently
reduce the impact to a minimum.

TOMAC v. Norton, 433 F.3d 852, 861 (D.C. Cir. 2006); see
also 40 C.F.R. § 1501.4. Although our decisions have
frequently (but not invariably—see, e.g., Public Citizen v.
Nat’l Highway Traffic Safety Admin., 848 F.2d 256, 267 (D.C.
Cir. 1988)) repeated the phrase “convincing case” since its
original appearance in Maryland-National Capital Park and
Planning Commission v. U.S. Postal Service, 487 F.2d 1029,
1040 (D.C. Cir. 1973), our scope of review is in fact the usual
one. TOMAC itself made this clear, introducing the four
numbered criteria with the standard language of judicial
review of administrative action: “arbitrary, capricious, or an
abuse of discretion.” 433 F.3d at 861.
 11

A regulation of the Council on Environmental Quality
further explains: “Significantly as used in NEPA requires
considerations of both context and intensity.” 40 C.F.R.
§ 1508.27. It then proceeds to list ten factors that “should be
considered in evaluating intensity.” Although the district
court focused on four of these factors and found they
established that the project’s environmental impact would be
“significant,” Sierra Club, 719 F. Supp. 2d at 66-67, the Sierra
Club on appeal makes arguments only with respect to three.
We first address the factors mentioned in subsections (b)(3)
and (b)(10), finding the Corps’s consideration adequate. As to
subsection (b)(9), which relates to effects on endangered or
threatened species, the Sierra Club’s arguments here overlap
with those it makes in the ESA context, and we defer
discussion to our treatment of those claims.

Subsection (b)(3) refers to “[u]nique characteristics of the
geographic area such as proximity to . . . wetlands.” 40
C.F.R. § 1508.27(b)(3). Of course it was the project’s impact
on wetlands that required a permit from the Corps in the first
place. But the Corps found that “[t]he wetlands are of
moderate quality as they were logged and some of them were
ditched” and that “[t]he wetlands are predominantly forested
(cypress) and not unique or rare in the landscape.” J.A. 1106.
The district court observed that the Corps itself had found that
wetlands provide “‘valuable storage areas for storm and flood
waters,’” Sierra Club, 719 F.Supp.2d at 66 (quoting J.A.
1107), but that does not in itself compel a finding that these
particular wetlands are “unique” within the meaning of
subsection (b)(3).

Moreover, apart from the wetlands’ lack of uniqueness,
the ultimate CCTC plan called for creation and preservation of
substantial substitute wetlands, the sort of mitigation measures
that we have found “sufficiently reduce the impact to a
minimum.” Michigan Gambling Opposition v. Kempthorne,
 12

525 F.3d 23, 29 (D.C. Cir. 2008) (quoting TOMAC, 433 F.3d
at 861), and that the Corps so found here. J.A. 1687. The
Sierra Club argues that the Corps cannot rely on such
mitigation, citing studies purporting to show that wetlands
mitigation often fails, in large part because of the Corps’s lax
enforcement. But even assuming that general attacks on the
Corps’s monitoring of wetlands mitigation could ever justify
its or our disregard of specific mitigation measures, here in
fact the Corps verified that the measures were proceeding.
J.A. 1494-1501, 1543, 1576, 1581-84. Moreover, its 2009
permit added special conditions in response to early setbacks.
J.A. 1695.

Subsection (b)(10) directs attention to whether “the action
threatens a violation of Federal, State, or local law or
requirements imposed for the protection of the environment,”
and the Sierra Club argues that the unauthorized 2008
discharge of turbid water into Cypress Creek not merely
threatened violations of those requirements but constituted
such violations. The Corps found that this discharge was the
result of “human error” and not a problem of design. J.A.
1672. The district court ruled that “NEPA regulations make
no exception for human error” and that an EIS should have
been prepared because the “2008 discharge did, in fact
violat[e] Federal, State and local environmental law.” Sierra
Club, 719 F.Supp.2d at 67. But the subsection’s reference to
“threats” indicates that it is forward-looking. Given that the
Corps required additional assurances from CCTC before
reinstating the permit, J.A. 1682, 1696, it could reasonably
find that a past violation did not “threaten” future violations.

ESA (and leftover NEPA issues). The Sierra Club also
argues that the district court erred by upholding the Corps’s
determination that formal consultation under the ESA was not
required. The ESA requires that federal agencies “insure that
any action authorized, funded, or carried out by such agency .
 13

. . is not likely to jeopardize the continued existence of any
endangered species or threatened species or result in the
destruction or adverse modification of habitat.” 16 U.S.C.
§ 1536(a)(2). Regulations promulgated under the ESA
provide that “[e]ach Federal agency shall review its actions at
the earliest possible time to determine whether any action may
affect listed species or critical habitat. If such a determination
is made, formal consultation [with the Fish and Wildlife
Service] is required.” 50 C.F.R. § 402.14(a). After issuing its
first public notice in October 2005, the Corps engaged in
informal consultation with the Fish and Wildlife Service
(“FWS”). A.R. 3093; J.A. 536, 889. The FWS “concur[red]
with the [Corps’s] determination that the proposed project
[was] not likely to adversely affect the wood stork nor any
other species listed under the ESA.” J.A. 893. Accordingly,
the Corps did not undertake formal consultation; as a technical
matter, it is the Corps’s dispensing with formal consultation to
which the Sierra Club objects.

The Sierra Club argues that the Corps’s determination
was erroneous because the project may have adverse effects
on habitat used by both the indigo snake and wood stork. In
parallel with its ESA contention, the Sierra Club raises a
NEPA argument, pointing to 40 C.F.R. § 1508.27(b)(9), under
which an adverse effect on “an endangered or threatened
species or its habitat” is an indication of “intensity” and thus
tends to militate in favor of finding “significance” and of
requiring an EIS. In both ESA and NEPA contexts, we reject
the Sierra Club’s wood stork claim but find that the Corps
failed to adequately address indications of an adverse effect
on the indigo snake.

Of the two statutes, the ESA and NEPA, the ESA is
(unsurprisingly) the more demanding on this point. It requires
the agency to engage in a formal consultation if it determines
that the action in question “may affect listed species or critical
 14

habitat.” 50 C.F.R. § 402.14(a) (emphasis added). NEPA
triggers the EIS requirement only for “major Federal actions
significantly affecting the quality of the human environment.”
42 U.S.C. § 4332(C) (emphasis added). The four-part test for
review of a FONSI that we quoted at the outset of the NEPA
discussion explains that a project with a potentially significant
impact will not require an EIS if “changes or safeguards . . .
sufficiently reduce the impact.” TOMAC v. Norton, 433 F.3d
at 861. We see no reason why the general principle of taking
mitigation into account should not apply to the decision
whether the ESA requires formal consultation. Cf. City of
Sausalito v. O’Neill, 386 F.3d 1186, 1216-17, 1218-20 (9th
Cir. 2004) (approving a biological assessment that relied on
mitigation for its no-adverse effect finding).

As to the wood stork, the Corps’s conclusions rested on
the project’s mitigation measures, which will bring about a net
gain of wood stork foraging habitat. During informal
consultation, the FWS determined that 16.22 acres of
“potential wood stork habitat” existed on the site pre-
construction and that with mitigation 21.35 acres would exist
post-construction, resulting in a net gain. J.A. 1118. But the
Sierra Club argues that the government did not “address near
term adverse impacts on breeding colonies while off-site
mitigation is being implemented.” Sierra Club Opening Br.
81-82 (emphasis in original). The Corps’s answer here was to
rely on the mitigation plan’s “more than a one-to-one
replacement ratio to compensate for the temporal lag between
the loss of a wetland’s foraging value and when the new
resource achieves that value.” J.A. 905. We certainly cannot
say that as a general matter a roughly 33% net quantitative
gain in habitat offsets a non-trivial “temporal lag”; in an
extreme case no members of the species would make it
through to enjoy the replacement area. But here the FWS
found that the lost habitat, although “within the core foraging
areas [i.e., within 13 miles] of five wood stork breeding
 15

colonies,” was not within the “primary or secondary zone” of
any colonies. J.A. 890. Given the relatively marginal role of
the lost habitat, it does not seem arbitrary or in contravention
of its statutory mandate for the Corps to find that the
mitigation’s more than “one-to-one replacement ratio” made
up for the temporary deprivation.

For the indigo snake, the Corps’s 2007 mitigation plan
concluded that “[i]nadequate habitat for maintenance of
eastern indigo snakes exists on the impact site in its
predevelopment state.” J.A. 997 (emphasis added). But
conservation guidelines submitted in CCTC’s own application
noted that the snake is “especially vulnerable” to habitat
“fragmentation” because of the snake’s large range. J.A. 164.
Nevertheless, the Corps and FWS did not address the
fragmentation risk. After the permit was suspended in 2008,
the Corps’s new public notice said that it would “reinitiate
informal consultation with the [FWS] regarding the issues
addressed in this public notice.” J.A. 1547.

In this renewed proceeding, the Sierra Club submitted
two declarations related to the eastern indigo snake. The first
declarant, a local Sierra Club member, wrote that he had seen
an eastern indigo snake on the project site in May 2007. J.A.
1295. The second declaration was from Dr. Kenneth Dodd, a
herpetologist who as Staff Herpetologist for the Office of
Endangered Species in the FWS had been “primarily
responsible for the listing of the” eastern indigo snake as
threatened under the ESA. Dr. Dodd asserted that the project
site was an important “wildlife corridor” linking protected
areas to the north and south. J.A. 1317. He noted that
“movements over large areas of fragmented habitats expose
Eastern Indigo Snakes to increased road mortality,” and that
“the more edge there is in relation to protected habitat [i.e.,
ratio of perimeter to surface area], the less likely large snakes
can be maintained.” J.A. 1306. He claimed more broadly that
 16

the Corps had failed to consider how the project would
adversely affect the snake through “fragmentation” of its
“habitat in lands near the site as a result of impacts to the site
and the wildlife corridor connecting these lands.” J.A. 1317.

In its second FONSI, issued in August 2009, the Corps
again did not address the impacts of habitat fragmentation.
J.A. 1696-97. Given Dr. Dodd’s expertise and experience,
and the seeming logic of his analysis, as well as CCTC’s own
acknowledgment of the snake’s vulnerability to fragmentation
risk, we think his comment qualifies as the sort of “relevant
and significant” public comment to which an agency must
respond, lest its action be arbitrary and capricious. See Cape
Cod Hospital v. Sebelius, 630 F.3d 203, 211 (D.C. Cir. 2011).
Accordingly, we must remand for further explanation by the
Corps of its determination that the project was “not likely to
adversely affect” the indigo snake. We do not reach the issue
of whether formal consultation is required, but the Corps must
make some determination on the issue of habitat
fragmentation, both for ESA and NEPA purposes.

* * *

Our decision here of course substantially alters the
substantive merits outcome that underlay the district court’s
injunction. Accordingly it will be suitable on remand for the
court to entertain contentions relating to modification of that
injunction.

In short, we reverse the district court entirely as to the
CWA; reverse it as to NEPA except insofar as the court
required further explanation by the Corps as to potential
fragmentation of the indigo snake’s habitat; and affirm its
decision as to the ESA except in so far as it found the Corps’s
analysis of the indigo snake issue adequate.
 17

The judgment of the district court is therefore

Affirmed in part, reversed in part, and remanded.