Sierra Club v. United States Army Corps of Engineers

• Decision Date: 04 April 2006
• Docket Number: No. 04-3910.,04-3910.
• Parties: SIERRA CLUB, Plaintiff-Appellant, v. UNITED STATES ARMY CORPS OF ENGINEERS; Federal Emergency Management Agency; et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

446 F.3d 808

SIERRA CLUB, Plaintiff-Appellant, v. UNITED STATES ARMY CORPS OF ENGINEERS; Federal Emergency Management Agency; et al., Defendants-Appellees.

No. 04-3910.

United States Court of Appeals, Eighth Circuit.

Submitted: October 14, 2005.

Filed: April 4, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Bruce A. Morrison, argued, St. Louis, MO (Kathleen G. Henry, St. Louis, MO, on the brief), for appellant.

Jennifer L. Scheller, argued, U.S. Dept. of Justice, Washington, DC (Devon M. Lehman and Ellen J. Durkee, U.S. Dept. of Justice, Washington, DC, on the brief), for appellees.

Before LOKEN, Chief Judge, LAY and BENTON, Circuit Judges.

LOKEN, Chief Judge.

Responding to a request by Jefferson City, Missouri, the U.S. Army Corps of Engineers ("the Corps") proposes to construct a levee, known as L-142, to reduce the risk of future flooding along the banks of the Missouri River as it flows through Jefferson City. The project will include land previously acquired by Jefferson City under the Stafford Act, 42 U.S.C. §§ 5121 et seq. Sierra Club filed this action alleging that the Corps violated the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4331 et seq., by not preparing an environmental impact statement, and that the Federal Emergency Management Agency ("FEMA") violated the Stafford Act by permitting the levee to include land that is restricted to open space uses.

On the government's motion, the district court dismissed these claims for lack of jurisdiction, concluding that judicial review under the Administrative Procedure Act is barred by the lack of "final agency action," see 5 U.S.C. § 704, and that Sierra Club lacks standing because it has not shown sufficiently certain injury. Sierra Club appeals. We agree that Sierra Club did not establish a final agency action with respect to the Stafford Act claim, but we conclude that the Corps' issuance of an environmental assessment and a finding of no significant impact did constitute final agency action under NEPA, and that Sierra Club has standing. Accordingly, we reverse the district court's dismissal of the NEPA claims.

I.

Following extensive flooding in the Midwest in 1993, Congress amended the Stafford Act to minimize the cost of future floods by authorizing FEMA to assist local governments in acquiring property in flood-prone areas. To obtain assistance under this hazard mitigation grant program ("HMGP"), an applicant must agree that:

(ii) no new structure will be erected on property acquired, accepted or from which a structure was removed under the acquisition or relocation program other than —

(I) a public facility that is open on all sides and functionally related to a designated open space;

(II) a rest room; or

(III) a structure that the [FEMA] Director approves in writing before the commencement of the construction of the structure.

42 U.S.C. § 5170c(b)(2)(B)(ii) (emphasis added). In 1994, Jefferson City applied for and received HMGP funding to acquire residential and commercial properties in the Cedar City area seriously damaged by the 1993 floods. Deeds to those properties contain covenants restricting their future use to uses consistent with the above-quoted statute. See 44 C.F.R. § 206.434(e)(1).

By early 1998, FEMA had adopted a policy that large flood control structures such as levees are not compatible with the non-structural emphasis of the HMGP program and therefore FEMA "will not grant an exception [under 42 U.S.C. § 5170c(b)(2)(B)(ii)(III)] for such activities." On March 29, 2000, FEMA and the Corps signed a Memorandum of Agreement. The agencies agreed "that the construction of flood damage reduction levees on HMGP lands is incompatible with open space uses" but identified fourteen projects, including the proposed L-142 levee in Jefferson City, in which local governments were pursuing the construction of levees on lands previously acquired under the HMGP. The agencies agreed to conduct "an expeditious joint review on a case-by-case basis to determine if any of the identified levees may proceed" based on a determination "that there reasonably is no [other] land ... on which levee construction is technically feasible, economically justified, and environmentally acceptable."

On April 26, 2001, the Corps issued an environmental assessment ("EA") for a proposed L-142 levee that would include 30.22 acres of deed-restricted land acquired with HMGP funds, 1.47 acres under the levee footprint, and 28.75 acres inside the levee. The Corps also issued a finding of no significant impact ("FONSI") in lieu of an environmental impact statement. See 42 U.S.C. § 4332(2)(C); 40 C.F.R. § 1501.4. Construction of the L-142 levee has not begun.

Sierra Club filed this suit in December 2003 alleging that the Corps violated NEPA and the APA by failing to adequately evaluate the environmental impacts of the project and by issuing a FONSI rather than an environmental impact statement. Sierra Club filed an amended complaint in February 2004 adding FEMA as a defendant and alleging that its Memorandum of Agreement with the Corps and approval of a levee including 30.22 acres of deed-restricted land were arbitrary and capricious agency actions within the meaning of the APA. See 5 U.S.C. § 706(2)(A).

The government moved to dismiss all claims for lack of jurisdiction, raising three inter-related issues. First, the government argued there is no final agency action by the Corps because it has not entered into a Project Cooperation Agreement with Jefferson City nor received necessary funding from Congress, and no final agency action by FEMA because it has not entered into an Agreement of Clarification with Jefferson City needed to modify the deed restrictions on HMGP-acquired properties. Second, the government argued that the claims are not ripe because the project's future is uncertain and no construction work may begin until the Corps and FEMA take these additional actions. Third, the government argued that Sierra Club lacks standing because its alleged injury in fact is neither actual nor imminent.

The district court dismissed the amended complaint for lack of jurisdiction, concluding there has been no "final agency action" within the meaning of 5 U.S.C. § 704 and Sierra Club lacks standing because it has suffered no actual injury. The court did not address ripeness. On appeal, Sierra Club argues FEMA's approval of the L-142 levee was a final agency action, the EA and FONSI issued by the Corps was a final agency action, Sierra Club has standing to sue on behalf of its members, and the dispute is ripe for judicial review. We review de novo the district court's dismissal of a complaint for lack of subject matter jurisdiction. See In re Sac & Fox Tribe of the Miss. in Iowa/Meskwaki Casino Lit., 340 F.3d 749, 755 (8th Cir.2003).

II. Final Agency Action

Neither the Stafford Act, NEPA, nor the statutes governing the Corps expressly provide for judicial review of the agency actions at issue. Therefore, jurisdiction is limited to judicial review under the APA, which provides for review of "final agency action for which there is no other adequate remedy in a court." 5 U.S.C. § 704. Two conditions must be satisfied for an agency action to be final. "First, the action must mark the consummation of the agency's decisionmaking process — it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow." Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (quotations and citations omitted). A broad agency program is not a final agency action within the meaning of 5 U.S.C. § 704. Lujan v. Nat'l Wildlife Fed., 497 U.S. 871, 890-94, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Nor is an agency report that "serves more like a tentative recommendation than a final and binding determination." Franklin v. Massachusetts, 505 U.S. 788, 798, 112 S.Ct. 2767, 120 L.Ed.2d 636 (1992). But if the agency has issued "a definitive statement of its position, determining the rights and obligations of the parties," that action is final for purposes of judicial review despite the "possibility of further proceedings in the agency" to resolve subsidiary issues. Bell v. New Jersey, 461 U.S. 773, 779-80, 103 S.Ct. 2187, 76 L.Ed.2d 312 (1983).

A. The Stafford Act Claim. For its claim against FEMA, Sierra Club first alleged that the agency's March 2000 Memorandum of Agreement with the Corps permitting flood levees to be built on certain HMGP-acquired lands was an arbitrary and capricious application of 42 U.S.C. § 5170c(b)(2)(B)(ii)(III).¹ We agree with the government and the district court that the Memorandum of Agreement was not a final agency action. It merely identified sites that might justify building levees on HMGP-acquired properties and prescribed an interagency protocol for determining whether a specific site such as the L-142 levee in Jefferson City warranted this exception to FEMA's normal policy. The Memorandum did not obligate either agency to permit levee construction. It is an example of a tentative or interlocutory agency action which determines no substantive rights or obligations within the meaning of Bennett v. Spear. Therefore, it is not subject to immediate judicial review under the "final agency action" provision of 5 U.S.C. § 704.

Sierra Club also alleged that FEMA's "determination to allow construction of the [L-142] levee on 30.22 acres of deed-restricted land" was an arbitrary and capricious agency action. Surprisingly, although the Memorandum of Agreement provided for an "expeditious joint review" to make such determinations "on a case-by-case basis," the record on appeal does not reveal how or when this specific determination was made. However, the record does include an April 12, 2000, letter from FEMA's Regional Director to his State of Missouri counterpart stating: (i) FEMA agrees with...