Mason County Medical Ass'n v. Knebel

Decision Date20 September 1977
Docket NumberNo. 77-1169,77-1169
Parties, 7 Envtl. L. Rep. 20,707 In the Matter of MASON COUNTY MEDICAL ASSOCIATION, Mrs. Andrew C. Duke, Mrs. Hugh Blades, and Dr. Harry C. Denham, M.D., Plaintiffs-Appellants, v. John A. KNEBEL, Acting Secretary of Agriculture, United States Department of Agriculture, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

Robert E. Manley, Timothy A. Fischer, Cincinnati, Ohio, for plaintiffs-appellants.

William H. Haring, Sierra Club Legal Defense Fund, Inc., Denver, Colo., for amicus curiae Sierra Club.

C. Kilmer Combs, William E. Scent, Tarrant, Combs, Bullitt, Lexington, Ky., Bert T. Combs, Louisville, Ky., for East Ky. Power Cooperative.

Eldon Webb, U. S. Atty., Lexington, Ky., Peter R. Taft, Asst. Atty. Gen., Edmund B. Clark, Kathryn A. Oberly, Dept. of Justice, Washington, D. C., for federal defendants-appellees.

Before WEICK and PECK, Circuit Judges, and FREEMAN, Senior District Judge. *

WEICK, Circuit Judge.

The Mason County Medical Association and three named individuals (hereinafter collectively referred to as plaintiffs) have appealed from an interlocutory order of the District Court denying plaintiffs' motion for a preliminary injunction seeking to restrain "the Defendant federal agencies, their employees and agents, from granting any permits or approving any federally-guaranteed loans or from taking any other action in regard to" the proposed construction and operation of a 500-megawatt (MW) 1 (nominal rating) coal-fired steam electric generating unit, 2 known as Spurlock Station Unit No. 2 (Spurlock No. 2). Spurlock No. 2 is to be located in Mason County, Kentucky, on the Ohio River approximately five miles northwest of Maysville, Kentucky, and the generating unit is to be constructed, owned, and operated by the state defendant, East Kentucky Power Cooperative, Inc. (EKP). No injunctive relief against EKP was sought in the District Court to restrain EKP from going forward with the construction of Spurlock No. 2. We affirm.

The pertinent facts in this case were accurately summarized by the District Court in its Findings of Fact Nos. 1-12 as follows:

FINDINGS OF FACT

1) The plaintiffs are citizens and a public interest group having an interest in their environment in Mason County, Kentucky.

2) The defendant East Kentucky Power Cooperative, Inc. (hereinafter "EKP") is a generating and transmission cooperative supplying electric power and energy to 18 member distribution cooperatives serving approximately 214,000 customers. EKP is a member of the Kentucky-Indiana Pool (hereinafter "KIP") which was formed to jointly solve power supply problems in the service areas. Other participants in the pool are Indianapolis Power and Light Co., Kentucky Utilities Co., and the Public Service Commission of Indiana, Inc. KIP is responsible for coordination and planning of generation and transmission facilities for delivering of bulk power to load centers.

3) EKP proposes to construct 500 MW (nominal rating) coal-fired steam electric generating unit (Spurlock Unit No. 2) at its existing Spurlock station in Mason County, Kentucky, a related substation, and related transmission lines from the station to the new Avon substation and to the Stuart generating station. The proposed Spurlock Unit No. 2 will form an integral part of the KIP system.

4) In 1974 EKP applied to the defendant Rural Electrification Administration (REA) for a loan guarantee in the amount of $380,000,000 to finance the construction of Spurlock Unit No. 2 and associated 345 KV transmission lines. At preliminary meetings between REA and EKP in 1974 and 1975, it was determined that an Environmental Impact Statement (EIS) would be required. The requirement for project justification and for the Environmental Analysis to be submitted by EKP to REA were discussed.

5) A Notice was published on July 7, 1974, in the Federal Register stating REA's intent to prepare an EIS on the proposed project and requesting information from interested parties to aid in preparation of the EIS. Notices to that effect were also published in newspapers circulated in the project areas. No comments were received.

6) In May 1975 a preliminary Environmental Analysis was submitted to REA for review. After review and discussion, additional material was added to the Environmental Analysis. The Environmental Analysis included a description of the proposed project, the impact of the proposed project on the environment, favorable environmental effect of the proposed action, adverse environmental effects which cannot be avoided if the proposed facilities are constructed, alternatives to the proposed action, the relationship between short-term uses of man's environment and enhancement of long-term productivity, any irreversible or irretrievable commitments of natural, cultural and other resources which would be involved in implementation of the proposed project.

7) REA independently examined the proposed site early in 1976 to obtain firsthand information regarding environmental aspects of the area involved. The defendant Environmental Protection Agency (EPA) Region IV agreed with REA to issue a joint EIS to serve both parties in order to avoid duplication of effort and it was agreed between them that REA would be the lead agency for the project.

8) After receipt of an acceptable Environmental Analysis, REA prepared a draft EIS which incorporated EKP's Environmental Analysis in preparing the draft EIS. REA evaluated material submitted by EKP and EKP's consulting engineer and examined the anticipated environmental effect of the project in light of the need for power and anticipated beneficial effects. Alternatives such as no additional power, purchased power, alternate sites, alternate generation and fuels, alternate ash and sludge disposal, alternative transmission line construction and voltage, and alternative transmission line tower construction were considered.

9) EPA independently reviewed the Environmental Analysis submitted by EKP and had significant input into REA's draft EIS. EPA independently performed an air quality modeling analysis and independently investigated compliance with EPA regulations for Prevention of Significant Deterioration of Air Quality. The air quality modeling analysis together with the draft National Pollution Discharge Elimination (NPDES) Permit were made a part of the draft EIS. The draft EIS was issued in April 1976 and the public was requested to comment. Written comments were received on the EIS. The Federal Power Commission (FPC) was also requested to comment on the draft EIS and the need for power stated therein. On June 10, 1976, the Bureau of Power of the FPC by letter stated that the additional capacity represented by Spurlock Unit No. 2 was needed to maintain the adequacy and reliability of KIP's bulk power system. It also concluded that the proposed electric power transmission facilities were necessary to transmit electric energy from the Spurlock station to the load center. A public hearing on the project was held in August of 1976 that was chaired jointly by REA, EPA and the State of Kentucky.

10) The Public Service Commission of Kentucky issued a "Certificate of Public Convenience and Necessity" to EKP for construction of the project. Prior to issuance of that certificate the Public Service Commission granted to EKP a "Certificate of Environmental Compatibility." The latter certificate was issued only after EKP submitted to the Kentucky Department for Natural Resources and Environmental Protection a "Statement of Environmental Compatibility of the Proposed Site" and the Department for Natural Resources and Environmental Protection after review and the public hearing found that the proposed addition could be built and operated in compliance with all Kentucky statutes and regulations relating to the authority of that department. In addition, the PSC issued to EKP a certificate of right to borrow funds from the Federal Finance Bank, the loan to be guaranteed by the REA.

11) Agency and public comments received on the draft EIS were answered and included in the final EIS.

12) The final EIS was submitted to the Council on Environmental Quality on December 3, 1976. In the final EIS there is stated over the signature of the Administrator of the REA the following:

". . . It is my judgment that the proposed action by the Rural Electrification Administration in providing financing for the proposed construction will be consistent with the policy set forth in the National Environmental Policy Act."

On December 20, 1976, the plaintiffs filed a 31-page complaint in the District Court against the United States Department of Agriculture, the REA (a department of the U.S. Department of Agriculture), the EPA, certain federal administrators, and the state defendant, EKP. The complaint primarily 3 alleged that the final EIS, which was prepared and issued jointly by REA and EPA, was insufficient as a matter of law in that it did not comply with the requirements of the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et seq., and certain guidelines promulgated by the Council on Environmental Quality (CEQ), 40 C.F.R. §§ 1500 et seq. Plaintiffs prayed that the District Court, inter alia, issue a permanent injunction enjoining the federal defendants from "issuing any permits or from approving any federally guaranteed loans incident to the construction or operation" of Spurlock No. 2 until the defendants' EIS complied with the requirements of NEPA and with the CEQ guidelines. Shortly after the filing of the complaint, plaintiffs filed a motion for a preliminary injunction seeking to enjoin the federal defendants from taking any action with respect to Spurlock No. 2 "which would alter the status quo" pending a final determination of the underlying cause of action.

Upon consideration of the parties' memoranda and supporting...

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