ATURA COALITION v. NYC DEPT. OF ENV. PROT., No. 87 Civ. 4242(MEL).

• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)
• Writing for the Court: LASKER
• Citation: 697 F. Supp. 666
• Parties: ATLANTIC TERMINAL URBAN RENEWAL AREA COALITION, John Theodore Glick, Anne McClellan, Loraine Oliver, and Mildred Davis, Plaintiffs, v. NEW YORK CITY DEPARTMENT OF ENVIRONMENTAL PROTECTION; New York City Public Development Corporation; New York City Board of Estimate; Edward I. Koch; Harvey W. Schultz; New York City Planning Commission; Sylvia Deutsch; United States Environmental Protection Agency; Lee M. Thomas; United States Department of Housing and Urban Development; and Samuel R. Pierce, Jr., Defendants.
• Docket Number: No. 87 Civ. 4242(MEL).
• Decision Date: 29 September 1988

697 F. Supp. 666

ATLANTIC TERMINAL URBAN RENEWAL AREA COALITION, John Theodore Glick, Anne McClellan, Loraine Oliver, and Mildred Davis, Plaintiffs,
v.
NEW YORK CITY DEPARTMENT OF ENVIRONMENTAL PROTECTION; New York City Public Development Corporation; New York City Board of Estimate; Edward I. Koch; Harvey W. Schultz; New York City Planning Commission; Sylvia Deutsch; United States Environmental Protection Agency; Lee M. Thomas; United States Department of Housing and Urban Development; and Samuel R. Pierce, Jr., Defendants.

No. 87 Civ. 4242(MEL).

United States District Court, S.D. New York.

September 29, 1988.

697 F. Supp. 667

Edward Copeland, Elizabeth St. Clair, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., New York City, for plaintiffs.

697 F. Supp. 668

Peter L. Zimroth, Corp. Counsel of the City of N.Y., New York City, for Municipal Defendants; Terri Feinstein Sasanow, Jeffrey Schanback, John De Angeli, Asst. Corp. Counsels, of counsel.

Rudolph W. Giuliani, U.S. Atty. for the S.D.N.Y., New York City, Richard W. Mark, Mary Ellen Kris, Asst. U.S. Attys., S.D.N.Y., for federal defendants.

Gershon M. Ratner, Associate Gen. Counsel for Litigation, Jonathan Strong, Sr. Trial Atty., John A. Martin, Trial Atty., U.S. Dept. of Housing & Urban Development, of counsel.

LASKER, District Judge.

These two motions to dismiss arise in a suit addressing the effect on the quality of air in Brooklyn of the proposed Atlantic Terminal and Brooklyn Center Projects ("the Project"), which would consist of dwelling, commercial, and recreational facilities. The plaintiffs include the Atlantic Terminal Urban Renewal Area Coalition, whose purpose is to protect and enhance the environmental quality in downtown Brooklyn, and several individuals who live in or travel through the Project site vicinity (collectively "ATURA"). Plaintiffs contend that the development of the Project will cause new, as well as exacerbate existing, violations of air quality standards for carbon monoxide. The defendants include numerous New York City and federal officials and agencies responsible for enforcement and administration of the Clean Air Act and for review and approval of the Project.

The United States Department of Housing and Urban Development and its Secretary Samuel Pierce (collectively "HUD") move to dismiss claim four of the complaint,¹ which alleges that:

Defendants HUD and Secretary Pierce acted arbitrarily, capriciously, in abuse of discretion and not in accordance with § 7506(c) of the Clean Air Act by approving a UDAG Grant Urban Development Acting Grant for the Project in spite of the City's nonconformance with New York State's carbon monoxide plan, in violation of 5 U.S.C. § 706.²

HUD contends that, because it has delegated its responsibility for review of the environmental impact of the Project to the applicants themselves pursuant to 42 U.S.C. § 5304(f) (1982), allegations against it fail to state a cause of action upon which relief can be granted.

The New York City Department of Environmental Protection and its Commissioner Harvey W. Schultz, the New York City Public Development Corporation, the New York City Board of Estimate, Mayor of New York City Edward I. Koch, the New York City Planning Commission and its Chair Sylvia Deutsch, and the New York City Board of Estimate (collectively the "municipal defendants") move to dismiss the fifth claim of plaintiffs' amended complaint. The fifth claim states:

The grant to the City of UDAG funding, and the City defendants' seeking receipt of UDAG funding for a Project which does not conform to an approved SIP constitutes an exercise of delegated authority from HUD in violation of § 176(c) of the Clean Air Act, 42 U.S.C. § 7506(c).... and constitutes an exercise of delegated authority from HUD which is arbitrary, capricious, an abuse of discretion and not in accordance with law, in violation of 5 U.S.C. § 706.³

According to the municipal defendants, because HUD has not yet taken final action on the project, the fifth claim does not present a controversy ripe for decision.

Because plaintiffs' fourth and fifth claims are virtually identical, differing only as to the party to whom responsibility is attributed, the two motions are considered together. Assuming on the motion to dismiss for lack of subject matter jurisdiction or failure to state a claim that the plaintiffs' allegation that the Project will cause or heighten existing carbon monoxide violation

697 F. Supp. 669

is true, Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974), the questions posed by these motions are who, if anyone, is legally responsible for approving the Project in violation of the Clean Air Act and at what point does that liability attach. In this instance, HUD claims that it is no longer responsible and the municipal defendants maintain that they are not yet responsible for the Project and its potential impact on the environment. Given the ambiguity in the law as to the point at which one party relinquishes and the other assumes responsibility and the limited time before which the City expects final action on the grant application, both motions are denied without prejudice to renew, as appropriate, should the grant be awarded

BACKGROUND

The proposed Project, conceived as part of the revitalization of downtown Brooklyn, is a development spanning twenty-four acres, which is to include offices, a cinema, a recreational facility, a parking garage, a supermarket, and several hundred subsidized moderate income residential condominium units. HUD is expected to be a major source of funding for the Project, with an award of over ten million dollars in the form of an Urban Development Action Grant ("UDAG") from HUD anticipated.

Prior to approval of the grant and release of funds, the applicant must comply with the procedures specified in Environmental Review Procedures for the Community Development Block Grant, Rental Rehabilitation and Housing Development Grant Programs, 24 C.F.R. Part 58 (1988). Specifically, the regulations require that if an environmental impact statement ("EIS") is required, the applicant must prepare and publish a draft EIS ("DEIS"). After conducting a hearing and receiving comments about the draft, a final EIS ("FEIS") is to be prepared and released. After completing the FEIS, the grant applicant is to prepare a Record of Decision ("ROD") containing the information prescribed in 40 C.F.R. § 1505.2 (1987) and summarizing the monitoring and enforcement measures called for in the FEIS. After the ROD is certified, as required by 24 C.F.R. § 58.65 (1988), the applicant is to prepare a Notice of Intent ("NOI") and a Request for Release of Funds ("RROF"), indicating its intention to seek grant funding, which are to include a certification that all National Environmental Policy Act ("NEPA") processes have been completed. 24 C.F.R. § 58.70-.71 (1988). The notice and request must be published prior to its submission to HUD. Before approving a release of funds, HUD must consider any objections submitted prior to approving a release of funds by "any person or agency." 24 C.F. R. § 58.73 (1988).

In November 1985, the City of New York initiated the UDAG process by submitting an application for funds to aid in the Project's construction.⁴ In the application, the City consented to assume the status of HUD "for environmental review, decision making and action" pursuant to NEPA and other environmental statutes, including § 176(c) of the Clean Air Act, listed in 24 C.F.R. § 58.5 (1988). The City also consented to accept the jurisdiction of the federal courts for enforcement of the environmental statutes, in effect, standing in the shoes of HUD.

The DEIS was completed in April 1986 and the FEIS in August 1986. According to the FEIS, 13 locations — also known as "hot spots" — in the area surrounding the Project will violate carbon monoxide standards both in 1988 and 1991.⁵ Moreover,

697 F. Supp. 670

the FEIS, according to plaintiffs, states that even with the proposed mitigation measures the Project will violate the carbon monoxide standard at eleven of these spots.⁶ Therefore, according to the plaintiffs, any authorization of the Project violates the provision of New York's State Implementation Plan ("SIP") that requires the City to assure that mitigating measures will be adopted to achieve compliance with and maintain the Clean Air Act's carbon monoxide standard

In a letter of October 16, 1986, Barbara Pastalove, Chief of the Environmental Impacts Branch of the EPA, informed Michael P.M. Spies, Assistant Vice President of the New York City Public Development Corp., that:

EPA does not find the final EIS to be fully responsive to our concerns regarding air quality.... The traffic mitigation plans proposed for both projects do not provide for attainment of the carbon monoxide (CO) standards by December 31, 1987. Therefore, the mitigation plans do not meet Clean Air Act requirements and could not receive EPA approval if submitted as control measures for the CO hotspots identified by the EISs.

A copy of the letter was sent to, among others, Joan Dabelko of HUD.⁷ On October 23, 1986 HUD confirmed by letter that the Project had received preliminary approval for a UDAG for $10,730,000.⁸

Although the Project received preliminary approval, the City has yet to complete the application process. However, in response to an inquiry of the court, the City represented that it planned to submit the ROD in late September or early October, with the NOI and RROF to follow within the periods prescribed in 24 C.F.R. Part 58; it hopes for release of Project funds by early next year.

DISCUSSION

A. Statutory Scheme

Claims four and five contend, respectively, that HUD's approval of and the City's request for UDAG funding for the Project violate 5 U.S.C. § 706(2)(A) (1982), which provides that the court shall "hold unlawful and set aside agency action, findings, and conclusions...