695 F.2d 957 (5th Cir. 1983), 82-2101, Sierra Club v. Sigler

Docket Nº:82-2101.
Citation:695 F.2d 957
Party Name:SIERRA CLUB, et al., Plaintiffs-Appellants, v. James M. SIGLER, etc., et al., Defendants-Appellees, Pelican Terminal Company and Galveston Wharves, Intervenors-Appellees.
Case Date:January 20, 1983
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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695 F.2d 957 (5th Cir. 1983)

SIERRA CLUB, et al., Plaintiffs-Appellants,


James M. SIGLER, etc., et al., Defendants-Appellees,

Pelican Terminal Company and Galveston Wharves, Intervenors-Appellees.

No. 82-2101.

United States Court of Appeals, Fifth Circuit

January 20, 1983

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Rehearing and Rehearing En Banc Denied April 8, 1983.

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Frederick S. Middleton, III, Washington, D.C., for Sierra.

James T.B. Tripp, New York City, for Environmental Defense Fund.

Charles T. Newton, Jr., Houston, Tex., Benjamin R. Powel, Galveston, Tex., David C. Shilton, Dirk D. Snel, Attys., Dept. of Justice, Land & Nat. Resources Division, Washington, D.C., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before CLARK, Chief Judge, GEE and GARZA, Circuit Judges.

GEE, Circuit Judge:

We review a trial court opinion upholding a Final Environmental Impact Statement, and the Army Corps of Engineers decision to issue permits based on it, authorizing the private construction of a multipurpose deepwater port and crude oil distribution system at Galveston, Texas. The trial court's judgment is affirmed in part, reversed in part, and the case remanded.


We sketch a factual overview of the case, reserving more detail for our analysis of the legal issues presented.

Galveston Bay, separated from the Gulf of Mexico by Galveston Island and the Bolivar Peninsula, is part of a system of estuarine bays along the Texas coast. The Bay is Texas' largest estuary and serves as a nursery and habitat for vast numbers of wildlife, including fish and migratory birds. For example, 98% of Texas' commercial fishing industry is based on fish that spend part of their life cycle in the Bay.

However, the Bay also has served for many years as a commercial waterway for the ports of Galveston, Houston, and Texas City. Oil tankers averaging 50,000 deadweight tons (dwt) make over 2,000 vessel trips annually through its congested channels, sharing those channels with many other types of vessels. The nation's largest concentration of refineries and petrochemical plants is found on the western shores of the Texas Gulf Coast stretching from Freeport in the south to Beaumont in the north. Between these two points lies the City of Galveston, which is located on the Galveston Island flanking the main channel into Galveston Bay.

In 1974, Galveston Wharves ("Wharves"), a utility of the City of Galveston, sought to extend and deepen the channel into the Bay to facilitate the traffic in large ships. That proposal was revived in February 1978, when permit applications were filed with the Army Corps of Engineers. In September of the same year, the project was revised by the Wharves and the Pelican Terminal Company ("PELCO"), who plan to build the project without federal participation. 1

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1] The Wharves and PELCO proposal contemplated building an oil terminal to offload very large crude carriers (VLCC's or "supertankers") 2 of up to 320,000 dwt and to deepen and lengthen the channels into the Bay and the Port of Galveston to accommodate them. The proposed location of this "superport" oil terminal is Pelican Island, which is inside the Bay and adjacent to Galveston City. The 1978 proposal included a crude oil tank farm and pipeline distribution system to carry the oil to other areas of the Gulf Coast. Deepening the channels also would permit other large vessels to use the Bay, including bulk commodities carriers. In fact, the proposal would extend the deepened Port of Galveston channel one and one-half miles beyond the oil terminal specifically to accommodate such carriers.

Oil tankers and their inherent dangers are not new; in fact, they have operated in Galveston Bay for years. However, this project will be the first in the United States to permit oil tankers to operate in a wildlife estuary. The primary focus of the controversy, therefore, has been on the effects of a major oil spill in a waterway which serves as a breeding ground for much of Texas' wildlife population.

In 1978, pursuant to permit applications filed on behalf of the superport project, work began on the Environmental Impact Statement ("EIS") required by the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. Sec. 4321 et seq. As a result of coordinated efforts by the Corps, several state and federal agencies, and many private entities, a draft EIS ("DEIS") was produced in April of 1979. After comments were received on the draft, including some from the plaintiffs-appellants, and a public hearing was held in Galveston, a final EIS ("FEIS") was issued in September of 1979. 3

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Based upon the FEIS and his authority under federal law, on July 8, 1980, the Galveston District Engineer, Colonel James M. Sigler of the U.S. Army Corps of Engineers, issued five permits authorizing the deepening of the channel and construction of the oil terminal, tank farm, and pipeline system. These permits were based on findings of fact made by Colonel Sigler in conformance with Corps regulations.

On May 19, 1981, the Sierra Club and four other plaintiffs 4 brought suit against the Corps and other federal defendants 5 challenging the adequacy of the FEIS and

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the issuance of the permits. Under Section 10(e)(2) of the Administrative Procedure Act (APA), 5 U.S.C. Sec. 706(2), they asserted that the Corps' decision making process violated, inter alia, NEPA, the Fish and Wildlife Coordination Act (FWCA), 16 U.S.C. Sec. 661 et seq., section 404 of the Federal Water Pollution Control Act (FWPCA), 33 U.S.C. Sec. 1344, section 10 of the Rivers and Harbors Appropriation Act of 1899, 33 U.S.C. Sec. 403, and various federal regulations governing Corps activities. The Wharves, on behalf of the City of Galveston, and PELCO intervened as defendants.

The trial court in Galveston expedited the matter and held seven days of hearings beginning October 21, 1981. After post-trial briefs and final arguments, the court denied all challenges to the FEIS and upheld the issuance of the permits on February 3, 1982. 532 F.Supp. 1222 (S.D.Tex.1982).

The plaintiffs appeal, advancing only three of the contentions they made below: (1) the FEIS failed to perform a "worst case" oil spill analysis, (2) the FEIS failed to analyze the environmental costs of bulk cargo activities, and (3) the Corps failed to consider an alternative offshore port. Appellees sought and were granted an expedited appeal. We are aware of no construction on the project during the pendency of this suit.



    As a preliminary matter, we set out the proper standards of review of the adequacy of the FEIS, of the permit-issuing decision of the Corps, and of the opinion of the trial court.

    1. Preparation of the FEIS and Decision to Issue the Permit

      The umbrella standard governing judicial review of the adequacy of the FEIS and the Corps' decision to issue the permits is whether those actions were "arbitrary, capricious, an abuse of discretion, or otherwise not according to law," or "without observance of procedure required by law." Administrative Procedures Act, 5 U.S.C. Sec. 706(2)(A) and (D). The Supreme Court has explained that:

      To make this finding the court must consider whether the decision was based on a consideration of relevant factors and whether there has been a clear error of judgment.... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.

      Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). An agency decision is entitled to a "presumption of regularity.... But that presumption is not to shield [the agency's] action from a thorough, probing, in-depth review." Id. at 415, 91 S.Ct. at 823. This circuit has followed Overton Park in its review of agency decisions under the APA. See, e.g., Suntex Dairy v. Block, 666 F.2d 158, 162 (5th Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 59, 74 L.Ed.2d 62 (1982).

      FEIS Preparation. Preparation of the FEIS was governed by NEPA and by the regulations enforcing it promulgated by the Council on Environmental Quality (CEQ) because CEQ regulations implementing NEPA are binding on all federal agencies. See Andrus v. Sierra Club, 442 U.S. 347, 356-58, 99 S.Ct. 2335, 2340, 60 L.Ed.2d 943 (1979).

      Section 102(C) of NEPA, 42 U.S.C. Sec. 4332(C) is an "action-forcing" 6 provision which requires federal agencies such as the Corps to prepare a "detailed statement" when they propose "major Federal actions significantly affecting the quality of the

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      human environment." This policy is intended to ensure that those agencies consider the environmental effects of their actions during their decisionmaking process. See Kleppe v. Sierra Club, 427 U.S. 390, 410 & n. 21, 96 S.Ct. 2718, 2730 & n. 21, 49 L.Ed.2d 576 (1976). The Corps' decision to issue permits for the superport project is subject to NEPA. See, e.g., Bankers Life and Casualty Co. v. Village of North Palm Beach, Florida, 469 F.2d 994 (5th Cir.1972), cert. denied, 411 U.S. 916, 93 S.Ct. 1543, 36 L.Ed.2d 307 (1973). Therefore, the Corps was required to prepare and use an EIS in its decisionmaking process.

      NEPA is a short statute with broad goals and imprecise methods of accomplishing them. As Justice Marshall has stated, "this vaguely worded statute seems designed to serve as no more than a catalyst for development of a 'common law' of NEPA.... [C]ourts have...

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