United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS January 24, 2007
For the Fifth Circuit
Charles R. Fulbruge III
Clerk
No. 04-31026
LORETTO O’REILLY, JR., ET AL.,
Plaintiffs-Appellees,
VERSUS
UNITED STATES ARMY CORPS OF ENGINEERS
Defendant-Appellant,
ERIC A. BOPP
Intervenor-Appellant
Appeals from the United States District Court
for the Eastern District of Louisiana
Before DAVIS and DENNIS, Circuit Judges.*
DENNIS, Circuit Judge:
Plaintiffs, residents of St. Tammany Parish, Louisiana, who
allege that the environment surrounding their dwellings,
businesses, and recreational areas will be unlawfully harmed by a
residential subdivision developer’s dredging and filling of
wetlands, challenge the United States Army Corps of Engineers’
*
Smith, Circuit Judge, originally on the panel, recused after
oral argument. The case is being decided by a quorum. 28 U.S.C. §
46(d).
1
(“the Corps”) Finding Of No Significant Impact (“FONSI”) on the
environment under the National Environmental Policy Act of 1969
(“NEPA”), 42 U.S.C. §§ 4321-4370f, which resulted in the Corps’s
issuance of a permit to dredge and fill wetlands to the developer
under § 404 of the Clean Water Act, 33 U.S.C. § 1344. Plaintiffs
contend that the Corps acted arbitrarily in issuing the FONSI for
the dredge and fill permit because its Environmental Assessment
(EA), the basis for the FONSI, (1) does not articulate a rational
basis for finding that the mitigation measures imposed by the Corps
upon the dredging and filling operations reduce their harmful
effects below the level of significant environmental impacts; (2)
does not adequately consider the project’s cumulative effects; and
(3) improperly segments the project by considering only the first
of three possible phases of development. Consequently, plaintiffs
argue, NEPA required that the Corps prepare a full-fledged
environmental impact statement (“EIS”) before issuing permits
affecting the wetlands.
The district court agreed with plaintiffs and held that the
Corps had acted arbitrarily in violation of NEPA because it failed
to: (1) articulate or demonstrate how the mitigation measures will
succeed; (2) consider the cumulative effects of the project, the
permits to third parties, and the growing area urbanization; (3)
consider the effects of the current proposal together with the
effects of additional phases of the developer’s long range
2
residential subdivision plans.
We agree with the district court that the Corps acted
arbitrarily in issuing a FONSI based on an EA that fails to
articulate how the mitigation measures will render the adverse
effects insignificant and to consider the cumulative effects of the
project, area urbanization, and permits issued to third parties.
But we disagree with the district court’s conclusion that the Corps
engaged in improper segmentation of the project by failing to
include full analysis of two possible future phases of development
in its EA. Accordingly, we affirm the district court’s holding that
the Corps acted arbitrarily in the foregoing respects, but we amend
the district court’s injunction, reverse the balance of its
decision, and remand the case to the Corps for further proceedings
consistent with this opinion.
I. The NEPA Framework
Before we begin our analysis, we review NEPA’s framework,
terminology and objectives. “NEPA . . . was intended to reduce or
eliminate environmental damage and to promote ‘the understanding of
the ecological systems and natural resources important to’ the
United States." Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 756
(2004) (quoting 42 U.S.C. § 4321). Instead of mandating particular
3
environmental results, NEPA “imposes procedural requirements on
federal agencies, requiring agencies to analyze the environmental
impact of their proposals and actions.” Coliseum Square Ass'n, Inc.
v. Jackson, 465 F.3d 215, 224 (5th Cir. 2006) (quoting Pub.
Citizen, 541 U.S. at 756-57). NEPA’s central requirement is that
federal agencies must, except in certain qualifying situations,
complete a detailed environmental impact statement (“EIS”) for any
major federal action significantly affecting the quality of the
human environment. 42 U.S.C. § 4332(2). To assist these agencies in
determining whether an EIS must be prepared, NEPA authorized the
Council on Environmental Quality (“CEQ”) to promulgate guidelines
in the form of regulations. See 40 C.F.R. § 1500.3; see also
Coliseum Square, 465 F.3d at 224.
NEPA requires an agency to produce a full EIS only where the
agency proposes to undertake a project that qualifies as a “major
Federal action[],” and then only when that action “significantly
affect[s] the quality of the human environment.” 42 U.S.C. §
4332(2)(C); see also Coliseum Square, 465 F.3d at 228. The CEQ
regulations define a “[m]ajor Federal action” as “actions with
effects that may be major and which are potentially subject to
Federal control and responsibility.” 40 C.F.R. § 1508.18; see also
Coliseum Square, 465 F.3d at 228. Effects, for the purposes of the
regulations, “include: (a) [d]irect effects, which are caused by
the action and occur at the same time and place,” and “(b)
4
[i]ndirect effects, which are caused by the action and are later in
time or farther removed in distance, but are still reasonably
foreseeable.” 40 C.F.R. § 1508.8; see also Coliseum Square, 465
F.3d at 228.
“The CEQ regulations allow an agency to prepare a more limited
document, an Environmental Assessment (EA), if the agency's
proposed action neither is categorically excluded from the
requirement to produce an EIS nor would clearly require the
production of an EIS.” Pub. Citizen, 541 U.S. at 757 (citing 40
C.F.R. §§ 1501.4(a),(b)). An EA should be a “concise public
document . . . that serves to . . . [b]riefly provide sufficient
evidence and analysis for determining whether to prepare an [EIS]."
40 C.F.R. § 1508.9(a). In some cases, an agency may find that it
must complete a full EIS. Where an EA results in a determination
that an EIS is not required, however, the agency must issue a
Finding of No Significant Impact (“FONSI”). Coliseum Square, 465
F.3d at 224 (quoting Pub. Citizen, 541 U.S. at 757). The FONSI must
briefly state “the reasons why the proposed agency action will not
have a significant impact on the human environment.” Coliseum
Square, 465 F.3d at 224 (citing 40 C.F.R. §§ 1501.4(e), 1508.13).
II. Factual and Procedural Background
A. Agency Proceedings
The Planche family plans to develop its plot of land in St.
5
Tammany Parish, near Covington, Louisiana, as a residential
subdivision. The plot includes wooded wetlands bordering Timber
Creek, which flows through the property to Timber Branch, a
tributary of the Tchefunte River. The subdivision development will
require dredging and filling of wetlands and the discharge of
materials into navigable waters. The Clean Water Act requires that
the developer obtain a § 404 permit from the Corps before such
discharge and that the Corps comply with NEPA in issuing the
permit.1
In 1999, a representative of the Planche family filed an
initial permit for a three-phase project that covered 147.13 total
acres including 91.94 acres of wetlands. In September of that same
year, the Corps and the Louisiana Department of Environmental
Quality jointly posted public notice of the proposed project and
1
Section 404 of the Clean Water Act governs discharge of
dredged or fill materials into navigable waters. Permit applicants
must design their project to avoid adverse wetlands impacts where
“practicable” and to minimize those impacts to an extent
“appropriate and practicable.” “Memorandum of Agreement between the
Department of the Army and the Environmental Protection Agency
Concerning Determination of Mitigation under the Clean Water Act
section 404(b)(1)”, 20 ENVTL. L. REP. 35,223 (Feb. 6, 1990). In
evaluating a permit request, the Corps must comply not only with
the requirements of the Clean Water Act, but also with NEPA’s
procedural requirements. See Sierra Club v. Sigler, 695 F.2d 957,
967 (5th Cir. 1983) (holding that the decision as to whether or not
to issue a § 404 permit must be reviewed under NEPA). It is NEPA
that concerns us here: the parties do not argue that the permit
violated the Clean Water Act; rather the debate is over whether the
Corps failed to meet the procedural requirements imposed upon it
under NEPA.
6
its permit application.2 As a result of that notice, the Corps
received public comments, including objections from the United
States Environmental Protection Agency. Eventually, the applicant
withdrew the initial permit application.
In September 2000, a different representative of the Planche
family, August J. Hand, submitted a revised permit application. The
new application sought a § 404 permit only for Phase I of the
project, covering 81.58 total acres, including 39.54 acres of
wetlands. The Corps again posted public notice and accepted
comments. The Corps also began NEPA review of the project and
determined that, in light of the mitigation measures mandated by
the permit conditions required by the Clean Water Act, as well as
other state and local laws,3 the requested permit would have no
significant impact on the environment.
Accordingly, on November 18, 2003, the Corps issued a
“mitigated FONSI” - a Finding of No Significant Impact concluding
that the project’s adverse impacts would be reduced to a less-than-
significant level via mitigation conditions attached to the permit.
See Spiller v. White, 352 F.3d 235, 239 (5th Cir. 2003) (approving
the use of “mitigated FONSIs”). On December 18, 2003, the Corps
2
The Corps placed the notice jointly with the state agency
because Clean Water Act provisions required the applicant to obtain
a state Water Quality Certification. See 33 U.S.C. § 1341.
3
We discuss the specific conditions placed on the permit in
greater detail below.
7
issued a § 404 permit allowing dredging and filling in 39.54 acres
of the project’s wetlands, conditioned on performance of specified
mitigation measures.
B. District Court Proceedings
Plaintiffs, residents who “live, work, and recreate” near the
proposed development, sued to enjoin the permit. They alleged that
the Corps had not complied with NEPA’s requirements because it 1)
did not prepare an EIS; 2) prepared an inadequate EA; and 3)
failed to consider the project’s direct, indirect, and cumulative
effects. Both parties submitted cross-motions for summary judgment,
at which point the district court granted Eric Bopp, a part owner
of the property and member of the Planche family, permission to
intervene on the side of the Corps.
The district court granted the plaintiffs’ motion for summary
judgment, concluding that the Corps had acted arbitrarily by
issuing the §404 permit without preparing a full EIS in order to
comply with NEPA. In finding the Corps’s actions arbitrary, the
district court held that the Corps’s EA and FONSI were not
justified under NEPA because the administrative record contained no
support for the Corps’s conclusion that the mitigation measures
would render insignificant the identified adverse impacts of the
project. Further, the court held that the arbitrariness of this
action by the agency was exacerbated by its failure to consider
8
fully the cumulative adverse effects of the project with those of
(1) 72 other permits already issued within a 3 mile radius; (2) the
continued rapid growth and urbanization of that part of St. Tammany
Parish; and (3) phases II and III of the developer’s long range
residential subdivision plans on the Planche family’s other plots
of land in the same area of St. Tammany Parish. The district court
also held that the Corps improperly segmented the entire long range
subdivision plans by considering only Phase I in developing its EA.
O’Reilly v. U.S. Army Corps of Engineers, 2004 WL 179453 404 1
(E.D.La., August 10, 2004) at *6. Accordingly, the district court
(1) granted the plaintiffs’ motion for summary judgment;(2) denied
the defendants’ motion for summary judgment; and (3) enjoined the
§ 404 permit issued by the Corps to the developer.
The Corps and the intervenor appealed. On appeal, however,
only the intervenor contends that the Corps’s EA, FONSI, and permit
should be affirmed. The Corps does not object to the EA or the
FONSI being vacated and the case being remanded to the agency for
further proceedings that may, if additional findings and reasons so
warrant, lead to the preparation of a second EA and another
mitigated FONSI. Both appellants, however, take issue with the
district court’s injunction, which apparently leaves the Corps no
recourse but to prepare a full EIS before granting the developer a
permit to dredge and fill wetlands.
9
III. Discussion of the District Court’s Decision on the Merits
We review the district court’s grant of summary judgment de
novo. Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870,
877 (5th Cir. 2002). Therefore we, like the district court, may
only set aside the Corps’s decision not to prepare an EIS where a
plaintiff establishes that the decision was “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A); see also Marsh v. Or. Natural Res. Council,
490 U.S. 360, 375-376 (1989); Kleppe v. Sierra Club, 427 U.S. 390,
412 (1976).
Courts may not, of course, use review of an agency's
environmental analysis as a guise for second-guessing substantive
decisions committed to the discretion of the agency. However, this
restriction does not turn judicial review into a rubber stamp. “In
conducting our NEPA inquiry, we must ‘make a searching and careful
inquiry into the facts and review whether the decision . . . was
based on consideration of the relevant factors and whether there
has been a clear error of judgment.’” Marsh, 490 U.S. at 378.
The district court in this case based its decision on three
grounds: (1) the Corps’s failure to demonstrate the feasibility of
the mitigation measures imposed; (2) the Corps’s failure to
consider the cumulative effects of the project, other permits, and
area urbanization; and (3) the Corps’s improper segmentation of
Phase I of the project. We discuss each in turn.
10
A. The Feasibility of the Mitigation Measures
The district court held that “the administrative record
contains no support for the Corps’s conclusion that the mitigation
measures would remove or reduce [to insignificance] the identified
adverse impacts of the project. [T]he EA discusses the project’s
adverse impacts and describes the associated mitigation measures
but nothing in the Document connects the two together.” O’Reilly,
2004 WL 1794531 at *5.
We have consistently accepted the proposition that reliance on
mitigation measures may reduce a project’s impacts below the level
of significance. In Spiller, 352 F.3d at 241, we explicitly
approved that principle, while noting that “we have implicitly
endorsed [such] use[.]” Id. (citing Sierra Club v. Espy, 38 F.3d
792, 803 (5th Cir. 1994) (holding that EAs satisfied NEPA where
they considered appropriate alternatives, including mitigation
measures) and Louisiana v. Lee, 758 F.2d 1081, 1083 (5th Cir. 1985)
(holding that it was proper to consider restrictions placed on
dredging permits in reviewing the agency's decision not to file an
EIS)). Other circuits agree. See, e.g., Cabinet Mountains
Wilderness v. Peterson, 685 F.2d 678, 682 (D.C. Cir. 1982);
C.A.R.E. Now, Inc. v. Fed. Aviation Admin., 844 F.2d 1569 (11th
Cir. 1988); Greenpeace Action v. Franklin, 14 F.3d 1324 (9th Cir.
1992); Roanoke River Basin Ass'n v. Hudson, 940 F.2d 58 (4th Cir.
11
1991); Audubon Soc'y of Cent. Ark. v. Dailey, 977 F.2d 428 (8th
Cir. 1992).
Furthermore, the Supreme Court has held that proposed
mitigation measures need not be laid out to the finest detail, even
within the more labor-intensive context of an environmental impact
statement. Robertson v. Methow Valley Citizens Council, 490 U.S.
332, 352 (1989) (“There is a fundamental distinction . . . between
a requirement that mitigation be discussed in sufficient detail to
ensure that environmental consequences have been fairly evaluated
. . . and a substantive requirement that a complete mitigation plan
be actually formulated and adopted.”); Miss. River Basin Alliance
v. Westphal, 230 F.3d 170, 176-77 (5th Cir. 2000) (quoting
Robertson, 490 U.S. at 352). Mindful of that distinction, we have
still required that an EIS involving mitigation must include “a
serious and thorough evaluation of environmental mitigation options
for [a] Project to allow its analysis to fulfill NEPA's
process-oriented requirements[.]” Miss. River Basin Alliance, 230
F.3d at 178. We have, moreover, noted that “mere perfunctory or
conclusory language will not be deemed to constitute an adequate
record and cannot serve to support the agency's decision not to
prepare an EIS." Citizen Advocates For Responsible Expansion, Inc.
(I-Care) v. Dole, 770 F.2d 423, 434 (5th Cir. 1985) (citing
Maryland-National Capital Park & Planning Comm’n v. U.S. Postal
Serv., 487 F.2d 1029, 1039 & 1040 (D.C. Cir. 1973)); see also DANIEL
12
R. MANDELKER, NEPA LAW & LITIG. § 8:57 (2006) (“an environmental
assessment does not require the full and ‘reasonably complete’
discussion of mitigation measures that is required in an impact
statement. Agencies must develop the record to a reasonable degree,
however, in a manner that thoroughly and fairly evaluates
environmental consequences.”). With these principles in mind, we
examine the Corps’s EA and the reasons set forth there for its
conclusion that each significant environmental impact it had
identified would be reduced to insignificance by its prescribed
mitigation measure.4
i. Adverse Effects on Soils and Flood Capacity
The Corps’s EA predicts that the project will have
substantial, long-term, adverse effects on project site soils,
including: 1) creation of anoxic and anaerobic conditions5 due to
4
Before beginning our review, we pause to note that a number
of the mitigation measures discussed below are included as specific
conditions on the § 404 permit. Specifically, the permittee must 1)
obtain Corps approval for any additional work not shown in the
drawings; 2) prevent any eroded material from entering adjacent
wetlands and/or waterways during construction; 3) comply with local
floodplain ordinances, regulations, or permits; 4) obtain a permit
from the Louisiana Department of Wildlife and Fisheries; 5) create
and record a state conservation servitude in perpetuity on a
100-foot wide buffer zone along the Timber Branch; and 6)
contribute funds to the Louisiana Nature Conservancy sufficient to
acquire, enhance, manage, and administer 47.5 acres of pine
flatwood/savannah wetlands. A failure to comply will result in
revocation of the permit.
5
Anoxic and anaerobic contain little-to-no oxygen; they are,
among other things, less hospitable to plant life and soil-dwelling
13
clearing, grading, excavation, and filling; 2) possible impairment
of subsurface drainage due to substrate compaction;6 and 3)
decreased aquifer recharge capability due to an increase in
impervious surfaces.7 All of the above work could contribute to a
possible reduction in the site's flood control functions, including
increased surface runoff volume and rate; reduced subsurface
lateral flow, storage, and recharge; and reduced filtration.
In discussing the role of mitigation in reducing these
problems, the EA states that the drainage plan incorporated into
the development relies on a 100-foot vegetated buffer zone for
flood water storage as well as creating detention areas.
Additionally, the plan would raise the elevation of the major road.
The EA also notes that the drainage plan meets St. Tammany Parish
requirements. The EA asserts, without data or analysis, that the
project as mitigated should have “minimal [e]ffect” on flooding
within the scope of a 25-year storm, although storms in categories
animals.
6
Subsurface drainage refers to the movement of water through
soil or rock beneath the surface of the land. Compacting, or
compressing, the soil and rock in an area reduces the space
available for water to flow. Such poor drainage can result in
increased susceptibility to flooding and contribute to anoxic and
anaerobic soil conditions.
7
Underground aquifers “recharge” or take in more water
largely as that water drains down through porous soil. Increasing
the amount of impervious surfaces in an area (say, by paving),
reduces the amount of water reaching the aquifer.
14
above a 25-year event could flood the development.8
ii. Increased Non-Point Source Pollution
In its assessment of water quality impacts, the Corps’s EA
notes that the project could cause long-term, adverse impacts from
increased non-point source pollution,9 primarily in the roadside
drainage swales incorporated in the project design. The EA asserts
that the planned 100-foot vegetated buffer will minimize the amount
of sediment entering the river and that the project will comply
with St. Tammany Parish ordinances enacted to control sediment-
laden run-off. The EA also states that “Best Management Practices
will be incorporated into project construction and inclusion of
vegetated drainage swales and greenspaces will filter run-off” and
that “[c]ompliance with the recommendations/ requirements of local
ordinances and/or ‘Best Management Practices’ should limit the
volume of sediments entering local waterways.” It neither describes
what these practices may include nor how they will work. Similarly,
the EA states that compliance with required state environmental
8
A twenty-five year storm is a storm of such duration and
intensity that it has a likelihood of occurring once in twenty-five
years. See Kennecott v. U.S. Envtl Protection Agency, 780 F.2d 445,
455 (4th Cir. 1985).
9
Non-point source pollution does not come from a clearly
identified source or location, but rather from pollutants
originally deposited on the ground and carried away in surface run-
off water. David Zaring, “Agriculture, Nonpoint Source Pollution,
and Regulatory Control: The Clean Water Act’s Bleak Present and
Future”, 20 HARV. ENVTL L. REV. 515, 515 (1996).
15
permits “should eliminate the potential for contamination of ground
water resources,” but does not describe what these permits require.
iii. Loss of Wildlife Habitat
The EA predicts “moderate to major” adverse impacts on
wildlife habitat, which, in turn, would create “long-term” adverse
impacts to wildlife in a localized area. The document also notes
that the project will result in a long-term increase in noise to
levels “loud and frequent enough to disturb wildlife” in adjacent
areas. In discussing mitigation of habitat loss and other adverse
impacts on wildlife, however, the EA states, without explanation,
that the buffer zone “will mitigate some of the impact to aquatic
organisms.” When discussing habitat for non-aquatic wildlife the EA
simply states that the buffer zone will be preserved and may
provide habitat for some species, although others may be eliminated
entirely.
iv. Loss of Wetland Functions
The EA notes that the project will result in a total and
complete loss of wetland functions for the developed portion of the
site, which will, in turn, affect the remaining area directly
affected by the development, as well as nearby wetlands and non-
wetlands. Some of the mitigation discussion is built into the
requirements pertinent to flood control, non-point source
16
pollution, and wildlife habitat, discussed above. Beyond that, the
EA says only that “compensatory mitigation for wetland
functionality losses will be required.” The permittee must purchase
credits for 47.5 acres of pine flatwood/savannah wetlands, which
will be acquired from “an approved site within the same USGS
hydrologic watershed.”
v. Adverse Effects on Traffic and Safety
The EA states that the project will result in “adverse and
long-term” impacts on traffic and transportation patterns, and as
a result, could lead to increased safety concerns. The discussion
of mitigation, however, is limited to statements that
“[a]ppropriate adjustments to the local highway system, such as
warning signs, and traffic control signs or signals may be required
to accommodate increases in traffic volume” and that areas of
congestion points may need to be altered. The EA also mentions that
the applicant indicated in 2000 that it would conduct a traffic
study, and that the developer would fund “some identified
improvements” in order to mitigate adverse impacts.
After reviewing the EA’s findings of significant adverse
environmental impacts that will result from the project together
with its reasoning as to the feasibility of the described
mitigation measures imposed, we conclude that the district court
17
correctly held that the EA fails to sufficiently demonstrate that
the mitigation measures adequately address and remediate the
adverse impacts so that they will not significantly affect the
environment. The EA before us lists the potentially significant
adverse impacts, and describes, in broad terms, the types of
mitigation measures that will be employed. As is evident from our
above review of the Corps’s treatment of each individual potential
impact, however, the EA provides only cursory detail as to what
those measures are and how they serve to reduce those impacts to a
less-than-significant level. Because the feasibility of the
mitigation measures is not self-evident, we agree with the district
court that the EA does not provide a rational basis for determining
that the Corps has adequately complied with NEPA.
We recognize that an EA is meant to be a “‘rough-cut,
low-budget’, preliminary look at the environmental impact of a
proposed project.” Spiller, 352 F.3d at 240. The record before us,
however, is simply not sufficient to determine whether the
mitigated FONSI relies on “‘. . . mitigation measures which . . .
compensate for any adverse environmental impacts stemming from the
original proposal’” that, unmitigated, would be significant. Id. at
241 (quoting Cabinet Mountains Wilderness, 685 F.2d at 682). In
other words, the EA fails to tell us “why the proposed agency
action will not have a significant impact on the human
environment.” Coliseum Square, 465 F.3d at 224 (citing 40 C.F.R. §§
18
1501.4(e), 1508.13). We therefore agree with the district court’s
determination that, the Corps acted arbitrarily in relying only on
the information in the current EA to support the issuance of its
mitigated FONSI. In so holding, we pause to note that “[w]e have
never said that deficiencies in an EA can only be cured by
preparing an EIS, and that is not the law.” Fritiofson v.
Alexander, 772 F.2d 1225, 1248 (5th Cir. 1985) (overruled on
unrelated grounds by Sabine River Auth. v. U.S. Dep't of Interior,
951 F.2d 669, 677 (5th Cir. 1992)). Our review of the record today
indicates only that we lack the information that would allow us to
defer to the Corps’s determination that mitigation will reduce the
project’s effects below the level of significance.
B. Cumulative Impacts
The intervenor argues that the district court incorrectly
determined that “the EA is supported by no real analysis or data
with respect to cumulative effects of this project.” O’Reilly, 2004
WL 1794531 at *5. We begin by reviewing NEPA’s specific
requirements regarding cumulative impact analysis.
The CEQ’s regulations define a project’s cumulative impacts as
“the impact on the environment which results from the incremental
impact of the action when added to other past, present, and
reasonably foreseeable future actions regardless of what agency
(Federal or non-Federal) or person undertakes such other actions.”
19
40 C.F.R. § 1508.7; see also 40 C.F.R. § 1508.25 (requiring that
agencies take cumulative impacts into consideration during NEPA
review). The regulation states that “[c]umulative impacts can
result from individually minor but collectively significant actions
taking place over a period of time.” 40 C.F.R. § 1508.7. In that
vein, we have held that a consideration of cumulative impacts must
also consider “[c]losely related and proposed or reasonably
foreseeable actions that are related by timing or geography.” Vieux
Carre Prop. Owners, Residents, & Assocs., Inc. v. Pierce, 719 F.2d
1272, 1277 (5th Cir. 1983).
In this case, the intervenor challenges the district court’s
holding with regard to the Corps’s treatment of cumulative impacts.
That court found that the EA “merely recites the potential
cumulative effects of the project in light of other wetlands
destruction in the area but . . . is supported by no real analysis
or data with respect to cumulative effects of this project.”
O’Reilly, 2004 WL 1794531 at *5.
The Corps has already issued 72 other § 404 permits within a
three mile radius of the proposed development, covering a total of
18,086.4 acres, of which 400.9 are wetlands. The EA identifies
those permits, and notes that they cumulatively required “[a] total
of approximately 529.5 acres of compensatory mitigation.” The Corps
acknowledges that although “[c]umulative impacts associated with
this particular project would be considered minor[,]” when
20
considered in conjunction with, inter alia, “historical development
and land use practices,” the cumulative effects “may become major.”
The Corps carefully - and succinctly - describes how such
individual projects can collectively cause fragmenting of state
wetlands and result in increasing environmental pressures due to
development. It notes that “without local governments and the
general public becoming pro-active in long-term land use planning
and local watershed management and guiding development from the
perspective of environmental stewardship, the potential for
environmental impacts to approach a cumulatively significant level
exists.” Furthermore, it acknowledges that this permit covers only
the first phase of a project that may have as many as three phases
of development. Such language would seem to warrant a finding of
significance, but instead the Corps states, without any exposition,
that “mitigation for impacts caused by the proposed project,
possible future project phases, and all Corps permitted projects
will remove or reduce e[x]pected impacts.”
As above, we agree with the district court that this bare
assertion is simply insufficient to explain why the mitigation
requirements render the cumulative effects of this project less-
than-significant, when considered with past, present, and
foreseeable future development in the project area, including the
project’s other two potential phases. The intervenor argues that
“one may presume that through the mitigation requirement contained
21
in NEPA all permits issued prior to the one under consideration had
their respective impacts mitigated to levels of insignificance.” We
cannot accept that presumption as legally and empirically valid,
however, because the Corps’s EA provides no rational basis for
concluding that when the individually “mitigated-to-insignificant”
effects of this permit are added to the actual post-dredge and fill
effects of 72 other permits issued to third parties by the Corps in
the area, that the result will not be cumulatively significant. In
so holding, we do not, as Mr. Bopp asserts, ask the agency to treat
the EA as a “local land-use planning guide.” We simply agree with
the district court’s determination that the EA provides too little
information as to the workability of the mitigation measures to
conclude that the Corps took a “hard look” at the project,
realistically assessed its individual and cumulative environmental
effects, and reasonably found that the mitigation measures imposed
will reduce those effects to a less-than-significant level.
C. Improper Segmentation
Finally, the intervenor challenges the district court’s
determination that this project, the first phase of a possible
three-phase development plan, constitutes “improper segmentation”,
or “piecemealing”: “an attempt by an agency to divide artificially
a ‘major Federal action’ into smaller components to escape the
application of NEPA to some of its segments.” Save Barton Creek
22
Ass'n v. Fed. Highway Admin., 950 F.2d 1129, 1139 (5th Cir. 1992).
In so holding, the district court identified nothing that rendered
the other two phases "impracticable, financially unattractive, or
generally not feasible.” O’Reilly, 2004 WL 1794531 at *6. It held
that “[t]he record blaringly suggests that the sole reason that
Phases II and III were eliminated . . . was to facilitate the
issuance of the permit so that the project could get underway." Id.
Ultimately, the district court found that "the current project
represents a piecemealing approach for implementing the totality of
the [entire three-phase] project." Id.
“‘As a general rule under NEPA, segmentation of highway
projects is improper for purposes of preparing environmental impact
statements.’” Save Barton Creek, 950 F.2d at 1140 (quoting Piedmont
Heights Civic Club, Inc. v. Moreland, 637 F.2d 430, 439 (5th Cir.
Unit B 1981)). Although the question of piecemealing may arise when
dealing with a multi-phase project, it presents a different problem
than that reviewed in the preceding section on cumulative impacts.
As we have discussed, an assessment of cumulative effects asks
whether a project with individually “mitigated-to-insignificant”
effects may yet result in significant environmental impacts when
those effects are aggregated with the foreseeable effects of other
environmentally impacting human activities and natural occurrences.
An analysis of improper segmentation, however, requires that where
“proceeding with one project will, because of functional or
23
economic dependence, foreclose options or irretrievably commit
resources to future projects, the environmental consequences of the
projects should be evaluated together.” Fritiofson, 772 F.2d at
n.10.10
To determine whether a single project is improperly segmented
into multiple parts, this Circuit applies a four-part test that
asks whether “the proposed segment (1) has logical termini; (2) has
substantial independent utility; (3) does not foreclose the
opportunity to consider alternatives; and (4) does not
irretrievably commit federal funds for closely related projects.”
Save Barton Creek, 950 F.2d at 1140 (citing Piedmont Heights, 637
F.2d at 439). It is important to note that “projects”, for the
10
Scholars have noted that the “cumulative effects” and
“improper segmentation” issues raise separate-but-similar
questions:
Federal agencies may plan a number of related actions but
may decide to prepare impact statements on each action
individually rather than prepare an impact statement on
the entire group. This decision creates a "segmentation"
or "piecemealing" problem....
Another related issue is whether an environmental
assessment or impact statement on a project or action
must discuss the cumulative impacts of that project or
action that occur outside the scope of the project or
action. The issue here is what environmental impacts must
be considered in an impact statement on a particular
project or action, not whether a number of projects or
actions must be gathered together in a single
environmental assessment or impact statement.
Daniel R. Mandelker, NEPA LAW & LITIGATION § 9:11 (2006).
24
purposes of NEPA, are described as “proposed actions”, or proposals
in which action is imminent. 40 C.F.R. § 1508.23. “‘[T]he mere
‘contemplation of’ certain action is not sufficient to require an
impact statement.’” Fritiofson, 772 F.2d at 1240 (citing Kleppe,
427 U.S. at 404). While a cumulative impact analysis requires the
Corps to include “reasonably foreseeable” future actions in its
review, improper segmentation is usually concerned with projects
that have reached the proposal stage. See Envtl. Def. Fund v.
Marsh, 651 F.2d 983, 999 (5th Cir. 1981). We have stated that in
rare cases “a court [may] prohibit segmentation or require a
comprehensive EIS for two projects, even when one is not yet
proposed, if an agency has egregiously or arbitrarily violated the
underlying purpose of NEPA.” Envtl. Def. Fund, 651 F.3d at n.19.
In this case, the current § 404 permit allows only the filling
and dredging required to construct Phase I of the planned
development. Although the project as originally submitted was a
three-phase undertaking, the application as eventually approved
included only the first stage. The Corps cites this decrease in
scale as one of the project requirements that reduce the project’s
effects below the level of significance.
The district court did not apply the independent utility test
laid out above, but simply stated that considering Phase I by
itself constituted improper piecemealing because nothing in the
record suggested that Phases II and III were “impracticable,
25
financially unattractive, or generally not feasible” and that the
two phases were almost certainly “going to be financially viable in
light of the expanding urbanization in St. Tammany Parish."
O’Reilly, 2004 WL 1794531 at *6. Plaintiffs, too, argue that the
current project is wrongly piecemealed because Phases II and III
are reasonably foreseeable. While this argument is relevant to
whether the Corps rationally addressed and mitigated the cumulative
impacts, it does not appropriately address the improper
segmentation question.
In this respect, we agree with Mr. Bopp that Vieux Carre Prop.
Owners, Residents, & Assocs, Inc. v. Pierce, 719 F.2d 1272, 1277
(5th Cir. 1983), provides the relevant analogy. In that case, a
multi-phase project was submitted, withdrawn, and resubmitted in a
form that included one phase of the original project. Id. at 1276-
78. The court held that the project had not been improperly
segmented because the future phases remained in the speculative,
planning stages. Id. at 1278 (citing Envtl. Def. Fund, 651 F.2d at
999 (“we are here dealing with two projects that are historically
distinct, one of which is proposed and the other still in the
process of study and design. In that situation, NEPA does not yet
require the [agency] to evaluate the environmental impact of the
[second project].”)).
In the case before us, the record indicates that the three
phases have independent utility - Phase I can stand alone without
26
requiring construction of the other two phases either in terms of
the facilities required or of profitability. Neither plaintiffs nor
the district court identify any evidence that construction of Phase
I irretrievably commits federal funds to construction of Phases II
and/or III or that the future phases have progressed to the
“proposal” stage.11 Nor do they identify any evidence suggesting
that construction of Phase I will foreclose the Corps’s ability to
consider various alternatives to construction of either future
phase. Indeed, Phases II and III would encompass a far larger
quantity of wetlands (80% of their total acreage) than Phase I
(which was 40-50% wetlands). The Corps’s analysis of practicable
alternatives to construction of future phases may, as a result,
prove far different than its analysis for Phase I.
On this point, therefore, we reverse the district court’s
judgment. The record before us does not reflect that the Corps must
have considered the possible future second and third phases as part
of the present project in conducting its EA and preparing its
FONSI, nor that in failing to do so the Corps has arbitrarily
11
Improper segmentation can occur absent the expenditure of
federal funds: irrevocable commitment of federal funding is only
one of the factors a court should consider in determining whether
a project has been improperly segmented. Save Barton Creek, 950
F.2d at 1140. The project may yet be susceptible of improper
segmentation: other factors look to the degree of independent
function and utility of the project standing alone. Id. The point
of the inquiry is to determine whether the agency artificially
divided a “major Federal action” into smaller components to escape
the application of NEPA to some of its segments. Id.
27
violated the underlying purpose of NEPA. Phases II and III are
relevant to the EA insofar as they relate to the Corps’s analysis
of cumulative impacts. Conducting an EA for Phase I alone, however,
does not offend the prohibition against piecemealing projects in
order to avoid NEPA requirements. We cannot say that the Corps has
acted arbitrarily in this respect.
IV. Discussion of the District Court’s Remedy
As we read the district court’s judgment, it enjoins the
issuance of a dredge and fill permit until an EIS is completed.
The judgment states only that the district court “has ENJOINED the
§ 404 permit . . . .” But in the conclusion of its Memorandum
Opinion, the Court stated,
The Corps acted arbitrarily, capriciously, or abused its
discretion by issuing the § 404 permit without preparing
a full EIS as required by NEPA. In light of the long-term
and irreversible environmental impacts associated with
this project, the Corp’s [sic] action is wholly at odds
with NEPA. Because the permit was issued without an EIS
in violation of NEPA, Plaintiffs are entitled to an
injunction.... Accordingly; . . . the § 404 permit . . .
issued by the Department of the Army is hereby ENJOINED.
O’Reilly, 2004 WL 1794531 at *6.
Both the Corps and Mr. Bopp contend that the district court’s
injunction effectively and erroneously mandated that the Corps
complete an EIS for the proposed project. They argue that the
court, instead, should have remanded the case to the Corps with
instructions to the agency to reconsider whether an EA or an EIS is
28
appropriate.
We review a district court’s decision to issue a permanent
injunction for abuse of discretion. VRC, LLC v. City of Dallas, 460
F.3d 607, 611 (5th Cir. 2006) (citing N. Alamo Water Supply Corp.
v. City of San Juan, Tex., 90 F.3d 910, 916 (5th Cir.1996); Thomas
v. Tex. Dept. of Criminal Justice, 220 F.3d 389, 396 (5th
Cir.2000)). “‘The district court abuses its discretion if it (1)
relies on clearly erroneous factual findings when deciding to grant
or deny the permanent injunction, (2) relies on erroneous
conclusions of law when deciding to grant or deny the permanent
injunction, or (3) misapplies the factual or legal conclusions when
fashioning its injunctive relief.’” Liberto v. D.F. Stauffer
Biscuit Co., Inc., 441 F.3d 318, 323 (5th Cir. 2006) (quoting
Peaches Entm’t Corp. v. Entm’t Repertoire Assocs., 62 F.3d 690, 693
(5th Cir. 1995)).
Where, as here, a court determines that an agency has acted
arbitrarily or capriciously, the APA permits the court to “hold
unlawful and set aside” that action. 5 U.S.C. § 706(2). As a
general rule, when “an agency decision is not sustainable on the
basis of the administrative record, then ‘the matter should be
remanded to [the agency] for further consideration.’” Avoyelles
Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897, 905 (5th Cir.
1983) (quoting Camp v. Pitts, 411 U.S. 138, 143 (1973)); see also
Vt. Yankee Nuclear Power Corp. v. Nat’l Res. Def. Council, Inc.,
29
435 U.S. 519, 549 (1978). Only in “rare circumstances” is remand
for agency reconsideration not the appropriate solution. See Fla.
Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985) (“. . . the
proper course, except in rare circumstances, is to remand to the
agency for additional investigation or explanation.”). We have
previously addressed this precise question within the NEPA context:
It is also clear that a decision to forego preparation of
an EIS may be unreasonable for at least two distinct
reasons: (1) the evidence before the court demonstrates
that, contrary to the FONSI, the project may have a
significant impact on the human environment, see, e.g.,
Lee, 758 F.2d at 1085, or (2) the agency's review was
flawed in such a manner that it cannot yet be said
whether the project may have a significant impact, see,
e.g., La. Wildlife Fed’n v. York, 761 F.2d 1044, 1053
(5th Cir. 1985); Found. on Economic Trends v. Heckler,
756 F.2d 143, 154 (D.C. Cir. 1985). The appropriate
relief, moreover, depends upon which of these findings
the district court makes. If the court finds that the
project may have a significant impact, the court should
order the agency to prepare an EIS. Lee, 758 F.2d at
1085; Save Our Ten Acres v. Kreger, 472 F.2d 463, 467
(5th Cir. 1973). If the court finds, on the other hand,
that the EA is inadequate in a manner that precludes
making the determination whether the project may have a
significant impact, the court should remand the case to
the agency to correct the deficiencies in its analysis.
See York, 761 F.2d at 1053 (“[we do] not order [an] . .
. EIS because the question of whether the Project may
have significant adverse impacts is still an open one”);
Found. on Economic Trends, 756 F.2d at 154 (“until [the
agency] completes such an evaluation the question whether
the experiment requires an EIS remains an open one”).
Fritiofson, 772 F.2d at 1238-39.12
12
Other circuits follow an approach similar to that used by
this circuit in Fritiofson. See, e.g., Jones v. Gordon, 792 F.2d
821, 829 (9th Cir. 1986); Found. on Economic Trends, 756 F.2d at
154 (D.C. Cir. 1985); Middle Rio Grande Conservancy Dist. v.
Norton, 294 F.3d 1220, 1226 (10th Cir. 2002). In fact, some
30
The district court in this case set out to answer the question
of whether the Corps was arbitrary or capricious “in concluding
that the mitigation measures, upon which the permit was
conditioned, reduced the otherwise significant impacts of the
project to a level of insignificance.” O’Reilly, 2004 WL 1794531 at
*4. In order to reach its affirmative answer to that question, the
court found as follows:
1) that “the Corp’s [sic] failure to employ any analysis
or gather any data with respect to its mitigated FONSI
rendered its decision arbitrary or capricious[]” (Id. at
*5);
2) that “the Corps acted arbitrarily and capriciously in
concluding that the cumulative effects of the project
were sufficiently mitigated” where “the EA [was]
supported by no real analysis or data with respect to
[that issue]” (Id.); and
3) that “the Corps acted arbitrarily or capriciously in
issuing the permit without considering the effect of the
other two [reasonably foreseeable] phases [of the
development]” (Id. at *6).
We read the district court’s language as describing flaws in the
Corps’s methodology that render its ultimate conclusion unreliable
and that therefore warrants remand to the agency, per the holding
quoted in Fritiofson, above. In other words, the district court
found that the administrative record did not contain sufficient
information to support the agency's conclusion that mitigation
circuits do not permit the court to ever make the determination
that a project’s effects are significant; instead, those courts
require that the court always remand to the agency. See, e.g.,
Nat’l Audubon Soc’y v. Hoffman, 132 F.3d 7, 18 (2d Cir. 1997).
31
rendered the project’s impacts insignificant.
Appellees argue that the district court did, in fact, find
that the project’s impacts were significant, based on its statement
that “[u]ndoubtedly, the environmental impacts associated with [the
project] are significant even when the future phases and cumulative
impacts are not taken into consideration.” Id. at *4. That
statement, however, is taken out of context. As the district court
noted, the Corps does not appear to “[disagree] with Plaintiff’s
contention that there are significant environmental impacts
associated with the proposed . . . project.” O’Reilly, 2004 WL
1794531 at *3. “Rather, the crux of the dispute is whether the
Corps’s FONSI, which was predicated upon the permittee agreeing to
certain mitigation measures, was arbitrary, capricious, or an abuse
of discretion.” Id. The district court focused on the Corps’s
reliance on mitigation, holding that the Corps’s analysis was
insufficient to support its conclusions. At no point did the
district court conclude that there was no possibility that the
project’s effects could become insignificant after mitigation.
Since that possibility has not been entirely foreclosed, the proper
remedy under this court’s precedents is to “remand the case to the
agency to correct the deficiencies in its analysis.” Fritiofson,
772 F.2d at 1239.
Plaintiffs also argue that the district court’s injunction
should not be read as requiring an EIS, but rather as simply
32
enjoining the permit until the Corps has complied with NEPA. In
doing so, plaintiffs rely on the fact that the bare language of the
separate document final judgment enjoins the § 404 permit, and says
nothing about requiring an EIS. Plaintiffs assert that the language
of the Order serves only to “explain[] why the permit is
illegal[.]” We disagree. The most plausible reading of the
opinion’s concluding paragraph, which explicitly describes the
Corps’s offense as “issuing the § 404 permit without preparing a
full EIS as required by NEPA,” is that the Corps can only become
compliant by completing an EIS. As we have discussed, that reading
runs afoul of our precedent on the issue. For all of the foregoing
reasons, we conclude that the district erred in enjoining the
Corps’ issuance of a § 404 permit until an EIS is prepared.
Therefore, in affirming the district court’s judgment in part, and
reversing it in part, we amend the district court’s injunction
order to enjoin the issuance of the permit pending our remand of
the case to the Corps for further proceedings consistent with this
opinion and the instructions set forth below.
V. Conclusion
Accordingly, we (1) AFFIRM the district court’s determination
that the Corps acted arbitrarily in issuing a FONSI on the basis of
the EA presented for the reasons assigned herein; (2) AMEND the
injunction ordered by the district court to enjoin the Corps from
33
issuing a § 404 permit herein until further orders of the district
court consistent with this opinion; (3) REVERSE the balance of the
district court’s judgment; and (4) REMAND the case to the Corps for
further proceedings including the preparation of a new EA, a new
FONSI, or an EIS, or other appropriate disposition, consistent with
this opinion.
DISTRICT COURT JUDGMENT AFFIRMED IN PART, AMENDED IN PART, REVERSED
IN PART. CASE REMANDED TO THE UNITED STATES ARMY CORPS OF ENGINEERS
FOR FURTHER PROCEEDINGS AS DIRECTED CONSISTENT WITH THIS OPINION.
34
O'Reilly v. United States Army Corps of Engineers
Court: Court of Appeals for the Fifth Circuit
Date filed: 2007-01-25
Citations: 477 F.3d 225
Copy Citations