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Harlem Valley Transportation Association and Natural Resources Defense Council Inc. v. Stafford

decided: June 18, 1974.


Appeals by the Interstate Commerce Commission and its Chairman from an order of the Southern District, Marvin E. Frankel, J., which granted a preliminary injunction requiring the Commission to determine at the outset of all abandonment proceedings whether an environmental impact statement is required under the National Environmental Policy Act and, where required, to have its staff prepare a draft impact statement prior to any hearing.

Lumbard, Feinberg and Mulligan, Circuit Judges.

Author: Lumbard

LUMBARD, Circuit Judge.

The Interstate Commerce Commission (ICC) and its chairman, George M. Stafford, appeal from an order entered on July 6, 1973, in the Southern District of New York, which granted plaintiffs' motion for a preliminary injunction. The plaintiffs, a group of public-interest associations, business firms and individuals who claim that they or their members will be injured economically and inconvenienced if rail service in the Northeast is terminated, instituted this action against Stafford, the ICC, and the Administrator of the Environmental Protection Agency on March 30, 1973. They claim that the ICC's procedures under authority given it by the Interstate Commerce Act, see 49 U.S.C. § 1(18), for determining whether railroads should be permitted to abandon services on any lines, violated the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321-47. On May 16 plaintiffs moved for a preliminary injunction which would bar the ICC from going forward with any rail abandonment proceedings unless its staff had prior to any hearings prepared a draft environmental impact statement when the abandonments would be "major Federal actions significantly affecting" the environment as required by NEPA § 102(2) (C), 42 U.S.C. § 4332(2) (C). In an opinion issued on June 21, 1973, and reported at 360 F. Supp. 1057, Judge Frankel held that a single judge had jurisdiction to issue such an injunction and that under our decision in Greene County Planning Board v. FPC, 455 F.2d 412 (2d Cir.), cert. denied, 409 U.S. 849, 34 L. Ed. 2d 90, 93 S. Ct. 56 (1972) (Greene County I), plaintiffs were entitled to an injunction.

We affirm.


As was noted in City of New York v. United States, 337 F. Supp. 150, 158 (E.D.N.Y. 1972) (City of New York I), the ICC has been slow in reacting to the directives of NEPA. On January 14, 1972, some two years after NEPA's effective date, the Commission promulgated a regulation to implement the requirements of NEPA as it saw them. Implementation of Public Law 91-190, National Environmental Policy Act of 1969 and Related Requirements, 340 I.C.C. 431 (1972) (codified at 49 C.F.R. § 1100.250). The regulation required that all initial papers filed with the ICC by a party should indicate whether the requested action would have an effect on the quality of the human environment. If any effect is alleged to be present, all parties must submit statements concerning the five factors that NEPA requires be evaluated in impact statements. 49 C.F.R. § 1100.250(d). When the proposed action is determined to have a significant environmental impact, a detailed impact statement will be made as part of the initial determination by an administrative law judge, which will become final (with or without modification) when the Commission enters its final order.

The Commission's report accompanying the regulation makes it clear that no draft impact statement prepared by the Commission's staff will be circulated prior to the hearings before an administrative law judge:

The guidelines finally adopted by the Council on Environmental Quality . . . require each agency responsible for a major Federal action significantly affecting the quality of the human environment to prepare and circulate to the Council and other appropriate government agencies a draft environmental impact statement. A final impact statement is to be similarly prepared and circulated after comments have been received on the draft statements. The essential question to be resolved at this point, which has been specifically raised by [the Department of Transportation], concerns the methods which this Commission should utilize in issuing draft and final environmental impact statements. All Commission hearings (whether oral or on the written record) in proceedings involving environmental issues will be public ones subject to the Administrative Procedure Act. We believe, and the Council has informally advised, that draft impact statements are not necessary in any of these proceedings. As a consequence, and in compliance with the Council's requirements, an environmental impact statement will be issued together with and as part of each initial determination made as a result of any hearing (oral or written), in those cases determined to involve environmental issues. The impact statement and initial determination will be circulated to the appropriate government agencies and made available to the public in the manner prescribed by the Council.

340 I.C.C. at 441-42 (emphasis original).

While the Commission promulgated its regulation on January 14, 1972, the report and regulation were not printed and served until February 3. In the interim, on January 17, this court decided Greene County I. There the Federal Power Commission (FPC) in contested cases had not required its staff to prepare draft impact statements prior to hearings but instead required an applicant to submit its own detailed statement on the five factors which NEPA requires be evaluated. Relying on the language in NEPA § 102(2) (C) that provides that an impact statement "shall accompany the proposal through the existing agency review processes," we held that the FPC's procedure did not comply with NEPA. We noted that there was a danger of reliance on self-serving assumptions made by the applicant in the FPC's procedures. We also said that the FPC's procedure might place the burden of providing effective analysis of environmental factors on intervenors whose resources generally are limited instead of upon the Commission as Congress intended. 455 F.2d at 420-21. The then-existing Council on Environmental Quality (CEQ) Guidelines, 36 Fed. Reg. 7724 (1971), supported the FPC's argument that its statement need not be circulated prior to any formal hearing, but we said that the guidelines flew in the face of the NEPA requirement that the statement accompany the proposal through the agency review processes, of which the hearings were certainly part. 455 F.2d at 421-22. Consequently, we held that the FPC staff must prepare a draft impact statement prior to hearings.

The ICC was not unaware of Greene County I. On February 18, 1972, it made a motion, which was denied, to submit a memorandum in support of the FPC's petition for a rehearing. The ICC memorandum stated that Greene County I would require it to change its procedures drastically. The Solicitor General in his petition for certiorari, which, as noted above, the Supreme Court denied, also stated that Greene County I would affect the ICC and other agencies as well as the FPC. Despite these concessions, the ICC made no effort to modify its procedures after certiorari was denied in Greene County I. Instead the ICC argued in the district court that Greene County I was distinguishable. Judge Frankel held that it was not. 360 F. Supp. at 1065. The Department of Justice in the district court agreed with plaintiffs that Greene County I was not distinguishable, but now argues before us that it is.

Subsequent to the district court's decision here, the CEQ on August 1, 1973, over the ICC's protest, promulgated new guidelines for implementing NEPA, which incorporated the requirements of Greene County I. 38 Fed. Reg. 20550. On December 27, 1973, the ICC petitioned the CEQ for an amendment of its guidelines. The ICC argued that following the guidelines would require a 20 percent increase in its staff and appropriations and would hamper the Commission's primary function of regulating transportation. The Commission also repeated its argument that it was not bound by Greene County I. In a letter dated February 25, 1974, Russell W. Peterson, Chairman of the CEQ, denied the requested amendment. He pointed out that while implementing NEPA would naturally take more staff effort no other agency had estimated that a 20 percent increase was required to meet the congressional mandate that environmental matters be considered. Peterson also asserted that NEPA does not require that an agency subordinate its primary mission to environmental consideration. On the matter of the timing of the impact statement, Peterson made a proposal which had been discussed with the ICC staff. Under this proposal, the administrative law judge would determine in the first phase of the hearing whether an impact statement ...

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