Sierra Club v. Marsh

• Decision Date: 09 August 1985
• Docket Number: No. 85-1098,85-1098
• Parties: , 3 Fed.R.Serv.3d 153, 15 Envtl. L. Rep. 20,911 SIERRA CLUB, Plaintiff, Appellant, v. John O. MARSH, Jr., et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 868

769 F.2d 868

23 ERC 1113, 3 Fed.R.Serv.3d 153, 15

Envtl. L. Rep. 20,911

SIERRA CLUB, Plaintiff, Appellant, v. John O. MARSH, Jr., et al., Defendants, Appellees.

No. 85-1098.

United States Court of Appeals First Circuit.

Argued April 5, 1985.

Decided Aug. 9, 1985.

Edward F. Lawson, Boston, Mass., with whom Peter L. Koff and Koff & Lawson, Boston, Mass., were on brief for plaintiff, appellant.

Kevin A. Gaynor, Asst. U.S. Atty., with whom Cabanne Howard, Asst. Atty. Gen., Augusta, Me., and Richard S. Cohen, U.S.

Atty., Portland, Me., were on brief for defendants, appellees.

Before CAMPBELL, Chief Judge, BOWNES and BREYER, Circuit Judges.

BREYER, Circuit Judge.

This case embodies an argument about whether a cargo port and a causeway that Maine plans to build at Sears Island will "significantly affect[ ] the environment." 42 U.S.C. Sec. 4332(2)(C). Maine's Department of Transportation, the Federal Highway Administration, and the Army Corps of Engineers concluded that it would not; thus, they decided to fund, to grant permits for, and to proceed with, the project without preparing an Environmental Impact Statement ("EIS"). The Sierra Club sued the federal agencies, seeking to stop the project in the absence of an EIS. Sierra Club now appeals the federal district court's determination that the agencies' decision not to prepare an EIS was lawful. Having reviewed the administrative record, we disagree with the district court. In our view, the record reveals that the project will significantly affect the environment; and the agencies' contrary conclusion lies outside the legally permissible bounds laid down by relevant statutes. 42 U.S.C. Sec. 4332(2)(C); 5 U.S.C. Sec. 706(2)(A). Hence, the agencies must prepare an EIS.

I

The legal framework in which this case arises is fairly simple. The National Environmental Policy Act of 1969 ("NEPA") says that federal agencies must prepare "a detailed statement ... on the environmental impact" of any proposed major federal action "significantly affecting the environment." 42 U.S.C. Sec. 4332(2)(C)(i). The federal Council on Environmental Quality ("CEQ") has issued detailed regulations and explanations of NEPA's statutory terms which tell federal agencies how to decide when an EIS is needed and how to go about preparing one. See 40 C.F.R. Sec. 1500 et seq. (1984); Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 Fed.Reg. 18026 (1981). The CEQ regulations permit federal agencies to make a preliminary "Environmental Assessment" ("EA") aimed at determining whether the environmental effects of a proposed action are "significant." 40 C.F.R. Secs. 1501.3, 1501.4, 1508.9, 1508.27 (1984). According to these regulations, the EA is a "concise" document that "briefly" discusses the relevant issues and either reaches a conclusion that preparation of an EIS is necessary or concludes with a "Finding of No Significant Impact" (called, in environmental jargon, a "FONSI"). Id. Secs. 1508.9, 1508.13.

In this case, the Corps of Engineers and the Federal Highway Administration prepared or adopted EA's and concluded with "FONSI's." They therefore granted necessary permits and funding for the Sears Island project without an EIS. The Sierra Club claims that these findings of "no significant impact" were "arbitrary, capricious, an abuse of discretion," and therefore unlawful under the Administrative Procedure Act. 5 U.S.C. Sec. 706(2)(A). The district court, after reviewing the fairly lengthy and complex administrative record, decided that the agencies' conclusions were sufficiently reasonable to be lawful. Our legal duty, strictly speaking, is to review this district court conclusion.

The purely legal issue that we face at the outset is what standard to apply when reviewing the district court. In part the issue involves the question of what standard courts normally should apply to the agency's decision. We have previously said that one challenging a decision not to prepare an EIS must show a "substantial possibility that agency action 'could significantly affect the quality of the human environment.' " Quinonez-Lopez v. Coco Lagoon Development Corp., 733 F.2d 1, 2 (1st Cir.1984) (quoting Winnebago Tribe v. Ray, 621 F.2d 269, 271 (8th Cir.), cert. denied, 449 U.S. 836, 101 S.Ct. 110, 66 L.Ed.2d 43 (1980) ). If the record reveals such a "substantial possibility" with sufficient clarity, the agency's decision (not to produce an EIS) violates NEPA. Depending upon the agency's reasons, a reviewing court might This case poses the additional (and somewhat difficult) problem of determining what standard we, an appellate court, should apply to the district court's decision upholding the agency. The reason this matter is a little difficult is that administrative review as typically practiced by the federal courts differs from the expectation of those who framed the Administrative Procedure Act in an important respect. Initially, the Act's authors apparently believed that district courts would review the reasonableness of agency decisionmaking on the basis of a record created in the district court. See generally Nathanson, Probing the Mind of the Administrator: Hearing Variations and Standards of Judicial Review Under the Administrative Procedure Act and Other Federal Statutes, 75 Colum.L.Rev. 721 (1975). Under this arrangement, the courts of appeals would play a limited role, reviewing, for example, a district court's factual findings for "clear error." Because of the way in which the findings and characterization of facts affect one's judgment about the 'reasonableness' or 'arbitrariness' of agency behavior, appellate review of a finding about 'arbitrariness' might also have been limited. Evolving practice, however, under special review statutes has led to courts of appeals normally reviewing the legality of agency decisionmaking on the basis of a record created in the agency. See, e.g., 47 U.S.C. Sec. 402 (providing for court of appeals review of FCC decisions); 29 U.S.C. Sec. 160(l ) (same, NLRB); 15 U.S.C. Sec. 77i (same, SEC). Courts of appeals thus apply, say, the APA's 'arbitrary and capricious' standard to the agency record directly, without the intervening set of findings of a district court, which in turn has reviewed the agency's findings.

                say that such an agency made a mistake interpreting NEPA or the CEQ regulations, or the court might say that the agency's "no significant impact" finding was simply "arbitrary, capricious, an abuse of discretion," 5 U.S.C. Sec. 706(2)(A).  Often these questions cannot be easily separated one from the other.  But whatever verbal formulation it applies, the court in a case like this must essentially look to see if the agency decision, in the context of the record, is too 'unreasonable' (given its statutory and factual context) for the law to permit it to stand.   Quinonez-Lopez, 733 F.2d at 2-3 (citing National Wildlife Federation v. Appalachian Regional Commission, 677 F.2d 883, 889 (D.C.Cir.1981);  Committee for Auto Responsibility v. Solomon, 603 F.2d 992, 1002 (D.C.Cir.1979), cert. denied, 445 U.S. 915, 100 S.Ct. 1274, 63 L.Ed.2d 599 (1980) );  see generally Gee v. Boyd, --- U.S. ----, 105 S.Ct. 2123, 85 L.Ed.2d 487 (1985) (White, J., dissenting from denial of certiorari);  Shea, The Judicial Standard for Review of Environmental Impact Statement Threshhold Decisions, 9 B.C.Envtl.Aff.L.Rev. 63 (1980)
                

Under these circumstances, a court of appeals review of a district court review of an administrative agency's record is an awkward legal animal. Are we to set aside such a district court decision only if it is "clearly erroneous"? Fed.R.Civ.P. 52(a). Or, are we to ignore the district court and simply conduct our own review of the administrative record? Other cases, containing what we have described as a "luxuriant jungle of differing review descriptions," Quinonez-Lopez v. Coco Lagoon Development Corp., 733 F.2d at 3, do not settle the matter. Compare Lange v. Brinegar, 625 F.2d 812, 815 (9th Cir.1980) ("In determining whether the evidence was sufficient to establish [the need for an EIS] ..., we are bound by the findings of the trial court unless they are clearly erroneous."), with Save Our Wetlands, Inc. v. Sands, 711 F.2d 634, 644-45 (5th Cir.1983) (relying on district court trial testimony and administrative record in determining that agency acted reasonably in failing to require EIS), and Concerned Citizens on I-190 v. Secretary of Transportation, 641 F.2d 1, 3 (1st Cir.1981) (court of appeals should review both agency's conclusions and those of the district court).

We believe our answer to this type of question should be practical. We should be more willing, or be less willing, to differ with a district court about the 'reasonableness' We have before us a case in which we and the district court are to apply the same legal standard to the same agency record. The court made no independent findings of fact and heard no witnesses. The district court had somewhat greater opportunity than did we to explore the administrative record with the help of counsel; and it is more familiar than are we with the geographical area and circumstances out of which this suit arises. But these latter, offsetting factors are not very weighty where, as here, the written administrative record is so complete. On balance, we believe we should exercise a considerable degree of independence in reviewing the administrative record and deciding whether the issuance of FONSI's was legally proper.

or 'arbitrariness' of an agency decision, depending upon the particular features of the particular case that seem to make a more independent, or a less independent, appellate court scrutiny of the administrative record appropriate. Where, for example, the district court's judgment turns on matters of fact that it has determined, or upon evidence presented by witnesses in court, or even upon lengthy district court proceedings in...