City and County of San Francisco v. U.S.

• Citation: 615 F.2d 498
• Decision Date: 14 March 1980
• Docket Number: No. 78-1701,78-1701
• Parties: , 10 Envtl. L. Rep. 20,346, 27 Cont.Cas.Fed. (CCH) 80,272 CITY AND COUNTY OF SAN FRANCISCO, a Municipal Corporation, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 498

615 F.2d 498

14 ERC 1347, 10 Envtl. L. Rep. 20,346,

27 Cont.Cas.Fed. (CCH) 80,272

CITY AND COUNTY OF SAN FRANCISCO, a Municipal Corporation, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees.

No. 78-1701.

United States Court of Appeals, Ninth Circuit.

March 14, 1980.

George P. Agnost, San Francisco, Cal., on brief; Philip S. Ward, Deputy City Atty., San Francisco, Cal., for plaintiff-appellant.

David P. Bancroft, Asst. U. S. Atty., for defendants-appellees; Pettit, Evers & Martin, San Francisco, Cal., on brief.

Appeal from the United States District Court for the Northern District of California.

Before BROWNING and KENNEDY, Circuit Judges, and DUMBAULD, ^* District Judge.

BROWNING, Circuit Judge:

In May 1976 the Department of the Navy awarded a five-year renewable lease of Hunters Point Naval Shipyard to Triple A Machine Shop, Inc., a private ship repair company. The City and County of San Francisco, a disappointed bidder, filed suit in district court seeking a declaration that the lease was void, an injunction ordering the Navy to readminister the leasing process, and damages. The City alleged violations of the National Environmental Policy Act ("NEPA"), the Coastal Zone Management Act, and the Navy's own leasing procedures. It sought damages on theories of conspiracy, conflict of interest, misrepresentation and negligence.

The district court granted summary judgment for the federal defendants on the NEPA and Coastal Zone Management Act claims, and dismissed all but one of the remaining claims under Rule 12(b), Fed.R.Civ.P. 443 F.Supp. 1116. It denied defendants' motion to dismiss and for summary judgment on a claim predicated on the Freedom of Information Act, but the City later withdrew this claim.

We affirm the district court's rulings on all except the withdrawn claim, which is not before us. We discuss four issues, the first because it was the most strongly pressed by the City on appeal, and the remaining three because the particular arguments were not explicitly dealt with in the district court's opinion. Except for the matters discussed in this opinion, we agree with the reasons stated by the district court in support of the rulings we affirm.

I

NEPA requires federal agencies to prepare an Environmental Impact Statement (EIS) for all "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). An EIS must be prepared if "substantial questions are raised as to whether a project . . . 'may cause significant degradation of some human environmental factor.' " City of Davis v. Coleman, 521 F.2d 661, 673 (9th Cir. 1975), quoting Save Our Ten Acres v. Kreger, 472 F.2d 463, 467 (5th Cir. 1973). If an agency determines not to file an EIS, the reviewing court must consider "whether the responsible agency has 'reasonably concluded' that the project will have no significant adverse environmental consequences". Ibid. The City contends that the Navy's failure to prepare an EIS with respect to the leasing of the Hunters Point property was unreasonable.

Navy regulations establish a series of steps to be followed in determining whether an EIS should be filed. A brief Environmental Impact Assessment must be prepared for any action that may have environmental effects. If it appears from this assessment that the action may have significant environmental impact a Candidate Environmental Impact Statement must be prepared, following the same format and covering the same issues as a formal EIS. The Candidate EIS is reviewed by a Review Panel in the Office of Chief of Naval Operations, which decides whether an EIS is required. ¹

These procedures were followed in the present case. The Review Panel considered a draft of an extensive, 68-page Candidate EIS, ² concluded that "the environmental effects associated with the leasing would not be 'significant' within the meaning of NEPA", and unanimously voted not to require the filing of an EIS.

The City contends this conclusion was unreasonable (1) because the Candidate EIS established that resumption of shipbuilding and repair as contemplated by the lease after a two year period of inactivity would result in significant deterioration of the environment through air, noise and water pollution and traffic congestion; and (2) because the Candidate EIS did not discuss the alternative use of the property as a deep water port rather than as a shipbuilding and repair facility.

A.

The district court had before it the Candidate EIS together with affidavits and documents regarding the preparation of the Candidate EIS and its consideration by the Review Panel. This record was sufficient to establish the reasonableness of the Navy's conclusion that the proposed lease of the Hunters Point property for shipbuilding and repair would not result in significant adverse environmental effects from pollution or traffic congestion.

As a starting point, the Candidate EIS analyzed the environmental effects of the proposed lease in relation to the Navy's previous use of the facility. However, while shipyard use of the property was accepted as given, any departure from acceptable environmental norms for such a facility as reflected in existing pollution control standards, and any adverse environmental effects resulting from the shift of control from the Navy to private commercial interests, was treated as a potentially negative environmental effect of the proposed reactivation. We think this approach was a reasonable one, consistent with NEPA.

The Navy and the district court recognized that the use to which the property would be put under the lease was the same as that to which the property had been devoted by the Navy for over 30 years and to which the Navy might devote the property again in the future. The Hunters Point Naval Shipyard was a modern, fully equipped industrial facility for the repair and conversion of naval vessels. A central purpose of the lease was to maintain the shipyard in such a state of readiness that in the event of a national emergency the government could resume control and devote the yard to the Navy's needs without undue delay. Provisions to accomplish this objective were included in the lease. The Navy retained the right to resume control whenever necessary. Plant and equipment were to be maintained in accordance with Navy standards. No modifications were to be allowed that might interfere with the Navy's recapture and reuse of the facility. It was not unreasonable to regard the leasing of the yard as a phase in an essentially continuous activity. In these circumstances the Navy was not required to evaluate the environmental consequences of the lease as if the Navy were proposing to establish this multi-million dollar industrial complex for the first time. See Westside Property Owners v. Schlesinger, 597 F.2d 1214, 1217-18 (9th Cir. 1979).

The City argues that even so, an EIS was required because the Candidate EIS revealed on its face that the reactivation of the facility would result in an increase in air, water and noise pollution and in traffic congestion. While these adverse effects of reactivating the shipyard were recognized in the Candidate EIS, the document also provided a reasonable basis for concluding they would be maintained below significant levels. With respect to noise, water and air pollution, adequate methods of abatement and control were stated to be either currently in use or planned for the immediate future. Moreover, the Candidate EIS noted that the lessee would be required to conform to all applicable pollution control laws and regulations as a condition of tenancy. Although recognizing that an adverse impact "of significant magnitude" resulting from traffic congestion on major access streets and "infiltration into paralleling residential streets" could not be avoided, the Candidate EIS stated that this impact could be mitigated adequately through close cooperation between City planning officials and the Navy to ensure the necessary expansion of major arteries into the shipyard. Acknowledging this need for mutual effort to mitigate the traffic problem, the Review Panel stated its decision not to require an EIS was based on assurances that plans for the reopening of the Hunters Point facility had in fact been "well-coordinated with the City of San Francisco." The City did not dispute this assertion in the district court and has not done so in this court, although it would be uniquely situated to know if the problem had in fact gone uncorrected.

On this record the Agency reasonably concluded that the lease of the Hunters Point Shipyard would not result in a significant deterioration in noise, air and water quality or in traffic congestion.

B.

By implication the City conceded that reactivation of the shipyard would not have significant adverse effects upon noise, air, and water quality and traffic flow, for the City offered to drop its NEPA claim entirely if a portion of the Hunters Point property were subleased to the City for use as a deep water port. See 443 F.Supp. at 1125 n. 10. Execution of such a sublease, the City stated, "would remove the most substantial environmental deficit in the outlease procedure: the refusal by the United States to come to grips with the deep water channel."

To bring its argument for development of a deep water port into the framework of NEPA, the City argues that reactivation of the Hunters Point property as a shipyard would result in the sub-optimal utilization of a unique natural resource the self-scouring deep water channel leading into the shipyard and that the Review Panel acted unreasonably in deciding not to file an EIS to consider this adverse environmental factor.

The City's suggestion comes too late to render the Review Panel's action unreasonable. The Court's review of the reasonableness of an agency's consideration of environmental factors is "limited . . . by the time at which the decision was made."...