Colony Federal Sav. & Loan Ass'n v. Harris

• Decision Date: 08 January 1980
• Docket Number: Civ. A. No. 79-354.
• Citation: 482 F. Supp. 296
• Parties: COLONY FEDERAL SAVINGS & LOAN ASSOCIATION, Plaintiff, v. Patricia Roberts HARRIS, Secretary, Department of Housing and Urban Development and Department of Housing and Urban Development and County of Beaver, Pennsylvania and Beaver County Planning Commission and Beaver County Redevelopment Authority and Direction Associates Inc., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

482 F. Supp. 296

COLONY FEDERAL SAVINGS & LOAN ASSOCIATION, Plaintiff, v. Patricia Roberts HARRIS, Secretary, Department of Housing and Urban Development and Department of Housing and Urban Development and County of Beaver, Pennsylvania and Beaver County Planning Commission and Beaver County Redevelopment Authority and Direction Associates Inc., Defendants.

Civ. A. No. 79-354.

United States District Court, W. D. Pennsylvania.

January 8, 1980.

COPYRIGHT MATERIAL OMITTED

John Alan Conte, Conte & Courtney, Conway, Pa., for plaintiff.

George A. Verlihay, Whitmire & Verlihay, Beaver Falls, Pa., Robert J. Master, Beaver, Pa., Richard P. Steward, New Brighton, Pa., for County defendants.

Judith Giltenboth, Asst. U. S. Atty., Pittsburgh, Pa., for Federal defendants.

OPINION

COHILL, District Judge.

This Court has before it the motions to dismiss filed by five of the six defendants in this action for declaratory and injunctive relief under the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq., the Administrative Procedure Act ("APA"), 5 U.S.C. § 501 et seq. and the Housing and Community Development Act ("HCDA"), 42 U.S.C. § 5301 et seq. Resolution of these motions turns on an assessment of the defendants' various legal responsibilities to the plaintiff, the public and the environment under these acts.

The plaintiff is Colony Federal Savings and Loan Association ("Colony"), a banking institution with offices in Monaca, Pennsylvania. The defendants are the United States Department of Housing and Urban Development ("HUD"), and its Secretary, the County of Beaver, the Beaver Planning Commission, the Beaver County Redevelopment Authority, and Direction Associates, Inc., a consulting firm. Only Beaver County did not move to dismiss.

The Acts and Regulations

The National Environmental Policy Act, passed in 1969, reflects our country's increased awareness that routine decisions of government agencies may have profound and irreversible effects on the natural environment. Since our physical environment cannot speak for itself and might otherwise be overlooked, NEPA mandates that an environmental analysis precede every major federal project. The analysis must be formalized in an "Environmental Impact Statement" pursuant to section 102(2)(C) of NEPA, 42 U.S.C. § 4332(2)(C), which requires federal agencies:

to include in every recommendation or report on proposals for legislation and other major federal actions significantly affecting the quality of the human environment, a detailed statement . . . by the responsible official.

Case law reaffirms that NEPA was enacted to protect the environmental interests of all citizens by making consideration of environmental factors a primary duty of all federal agencies. City of Davis v. Coleman, 521 F.2d 661, 678 (9th Cir. 1975); Environmental Defense Fund v. Tennessee Valley Authority, 468 F.2d 1164, 1182-83 (6th Cir. 1972). The purpose of § 4332(2)(C) is to assure that agencies will be fully aware of the impact of their decisions before implementing them; it has been called the "environmental full disclosure law." Sierra Club v. Froehlke, 368 F.Supp. 231 (D.Tex.1973).

HCDA was enacted for purposes somewhat different from NEPA. In § 5301(c) Congress provided:

The primary objective of this chapter is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.

Although preservation of a healthy urban environment was an integral part of the statutory scheme, the primary thrust of the new legislation was economic. See § 5301(a)(1) and (2), § 5301(b), § 5301(c)(6). There is another difference between the acts: whereas NEPA is centripetal, directing the responsibility for environmental analysis to the federal agencies involved in projects subject to its terms, HCDA operates by centrifugal force, directing the responsibility for urban redevelopment to the local communities which benefit under its provisions. Sections 5303 and 5304 authorize the Secretary of HUD to approve grant applications by states or local communities pursuant to enumerated procedures. Limited discretion in disapproving applications is given to the Secretary under 42 U.S.C. § 5304(c), which provides:

The Secretary shall approve an application for an amount which does not exceed the amount determined in accordance with section 5306(a) of this title unless —

(1) on the basis of significant facts and data, generally available and pertaining to community and housing needs and objectives, the Secretary determines that the applicant's description of such needs and objectives is plainly inconsistent with such facts or data; or

(2) on the basis of the application, the Secretary determines that the activities to be undertaken are plainly inappropriate to meeting the needs and objectives identified by the applicant pursuant to subsection (a) of this section; or

(3) the Secretary determines that the application does not comply with the requirements of this chapter or other applicable law or proposes activities which are ineligible under this chapter. (Emphasis added.)

Several sections of the Act emphasize that procedures are "streamlined" to provide assistance quickly and efficiently. See § 5301(b)(3) ("continuing effort at all levels of government to streamline programs"); § 5301(d)(1) ("provides assistance . . . with maximum certainty and minimum delay"); § 5304(b) (cutting red tape).

The relationship between NEPA and HCDA was considered by Congress and explicitly provided for in § 5304(h)(1) of the latter. That section states:

In order to assure that the policies of the National Environmental Policy Act of 1969 are most effectively implemented in connection with the expenditure of funds under this chapter, and to assure to the public undiminished protection of the environment, the Secretary, in lieu of the environmental protection procedures otherwise applicable, may under regulations provide for the release of funds for particular projects to applicants who assume all of the responsibilities for environmental review, decisionmaking, and action pursuant to such Act that would apply to the Secretary were he to undertake such projects as Federal projects. The Secretary shall issue regulations to carry out this subsection only after consultation with the Council on Environmental Quality.

A subsection, § 5304(h)(3)(D), also provides that the grant applicant must:

(i) consent to assume the status of a responsible Federal official under the National Environmental Policy Act of 1969 insofar as the provisions of such Act apply pursuant to paragraph (1) of this subsection, and (ii) be authorized and consent on behalf of the applicant and himself to accept the jurisdiction of the Federal courts for the purpose of enforcement of his responsibilities as such an official.

Thus, it is clear that Congress intended to transfer the normal NEPA responsibilities from federal officials to state or local officials, consistent with other decentralization policies of the HCDA. Regulations implementing this provision require the local entity to prepare and make available to interested parties an Environmental Review Record. 24 CFR § 58.11.

However, the Congressional scheme does not totally relieve federal officials and agencies of accountability for their decisions. Under the APA, 5 U.S.C. § 706, a "reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions" which fail any of six enumerated standards. An agency decision must be overturned if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A), or if it fails to meet statutory, procedural, or constitutional standards, 5 U.S.C. § 706(2)(B), (C), (D). (Other tests for very narrow circumstances are not applicable here. 5 U.S.C. § 706(2)(E), (F).)

The motions before us require us to decide what the responsibilities of the parties are under NEPA, HCDA, and the APA and whether, in this case, those responsibilities have been properly executed as a matter of law.

The Facts of the Case

The Phoenix Glass Company, a local manufacturer and subsidiary of Anchor Hocking, Inc., operated a plant in Monaca, Pennsylvania, for many years. On July 14, 1978, the plant was destroyed by fire. In addition to $20,000,000.00 in losses to the company, over 600 jobs were lost. Phoenix intends to rise again from the ashes, but it may be in some location other than Monaca, where it may expand as well as rebuild. In order to keep the plant in Monaca — and the coincident jobs and tax base — the County of Beaver proposed a project to acquire land for reconstruction and expansion of the Phoenix facility. Under this plan and utilizing federal funds, the Beaver County Redevelopment Authority would acquire the needed parcels contiguous to Phoenix's present site, rezone the land for industrial purposes, and then resell it to Phoenix. The vehicle for federal funding was to be an Urban Development Action grant, authorized by the HCDA. The County believed it would be eligible under this grant since the properties to be acquired were "blighted." Eighty-three parcels were involved, almost one third of them business properties and the others residential.

Beaver County was the grant applicant. It applied for an Urban Development Action grant in October, 1978, requesting a sum in excess of three million dollars. After reviews by various HUD officials in Pittsburgh and in Washington, preliminary approval was granted for a slightly lesser sum. As part of its application, Beaver County submitted a certification pursuant to 42 U.S.C. § 5304(h), agreeing to take the place of federal officials for NEPA purposes, and also submitted a "Notice of Finding of No Significant Effect on the Environment." The latter had been published once in a local paper with an open invitation to the...