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June 30, 1982

SIERRA CLUB, The City Club of New York, Business for Mass Transit, Committee for Better Transit, Inc., NYC Clean Air Campaign, Inc., West 12th Street Block Association, Hudson River Fishermen's Association, Hudson County Citizens for Clean Air, Seymour Durst, Otis Burger, Mary Rowe, and Howard Singer, Plaintiffs,
UNITED STATES ARMY CORPS OF ENGINEERS, John Marsh, as Secretary of the Army of the United States, Joseph K. Bratton, as Chief of Engineers, Walter M. Smith, Jr., as New York District Engineer of the United States Army Corps of Engineers, William C. Hennessy, as Commissioner of the New York State Department of Transportation, United States Department of Transportation, Andrew L. Lewis, Jr., as Secretary of Transportation of the United States, Federal Highway Administration, Raymond A. Barnhart, as Administrator of the Federal Highway Administration, the City of New York, Defendants

The opinion of the court was delivered by: GRIESA

On March 31, 1982 the court handed down an opinion, which dealt with the proposed "Westway" Project for the West Side of Manhattan in New York City and the related landfill in the Hudson River. In that opinion, the court held that the permit for the landfill, which had been granted by the United States Army Corps of Engineers to the State of New York, was invalid as having been issued in violation of the requirements of federal law. The matter was remanded to the Corps for further proceedings in compliance with law.

One of the principal issues in the case was whether the Corps of Engineers had fulfilled its obligation under the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., in relying on an Environmental Impact Statement issued by the Federal Highway Administration ("FHWA") and the New York State Department of Transportation ("New York State DOT") in January 1977 ("January 1977 EIS").

 In the March 31, 1982 opinion the court held that, during the time the Corps of Engineers was considering the landfill permit, information was obtained by the Corps, the FHWA and the New York State DOT which demonstrated the invalidity of the statements made in the January 1977 EIS on the subject of the impact of the proposed landfill on fisheries. The court held that, since the matter of fisheries was central to the consideration of the landfill permit application, the Corps was obligated to issue an environmental impact statement disclosing the new information. The Corps did not do so. The court found that the FHWA and the New York State DOT were instrumental in persuading the Corps to withhold the fisheries information.

 At the time of the trial, the New York State Commissioner of Transportation was a defendant in the case, along with the Corps of Engineers and federal officials connected with the Corps. However, the FHWA was not a defendant.

 Following the March 31, 1982 opinion, plaintiffs proposed either to file a separate action against the FHWA or to amend the complaint in the present action adding a claim against the FHWA. The latter procedure has been followed. The complaint in the present action has been amended. The claim against the FHWA is that it violated NEPA.

 The parties have been given an opportunity to offer additional evidence on the new claim, and the taking of this evidence has now been concluded. This opinion constitutes the court's findings of fact and conclusions of law on this matter.

 The portion of the trial of this action which preceded the March 31, 1982 opinion will be referred to as "the first hearing." The portion of the trial which followed the submission of the claim against the FHWA will be referred to as "the second hearing."

 Prior to the second hearing, plaintiffs moved for a preliminary injunction, seeking to restrain the State of New York from paying approximately $ 97 million to the City of New York for the right-of-way for the proposed landfill, and further seeking to restrain the FHWA from making a 90% reimbursement to the State for the right-of-way payment. In a bench opinion of April 20, 1982, the court granted the motion against the payment of the FHWA to New York State and denied the motion as to the payment by New York State to the City.

 The City of New York intervened as a defendant in the action at the time of the preliminary injunction motion.

 Summary of Ruling

 The claim against the FHWA is that, following the issuance of the January 1977 EIS and prior to the release of major funding for Westway, certain new information became available relating to the environmental impact of Westway, including:

(a) The completion of a fishery study, which revealed that the proposed Westway landfill area is an important habitat for striped bass;
(b) The submission of comments by the National Marine Fishery Service ("NMFS"), the Fish and Wildlife Service ("FWS"), and the Environmental Protection Agency ("EPA"), taking the position that the proposed Westway landfill threatened serious adverse impact on Hudson River fisheries resources;
(c) Proposals for several new alternatives to Westway;
(d) Urban renewal in the West side area, which rendered the urban development aspects of Westway substantially less important and attractive;
(e) Increases in the costs of Westway and uncertainty of adequacy of funding; and
(f) Increases in the estimated levels of traffic and air pollution that would result from the construction and operation of Westway.

 The claim is that the new information rendered the January 1977 EIS incorrect and incomplete, and that a supplemental environmental impact statement was required pursuant to applicable regulations. No such supplemental statement was issued.

 With regard to the issue of impact on fisheries, plaintiffs claim that even before the new fishery study was carried out, and indeed at the time the January 1977 EIS was issued, the authors of this EIS knew, or should have known, that the material in the EIS on fisheries was incorrect.

 The court finds that plaintiffs have not made out a case against the FHWA regarding the need for supplementation as to items (c)-(f) above. The court finds, however, that the information in the January 1977 EIS regarding fisheries was untrue. The authors of the EIS knew, or should have known, that they had no basis for the presentation made on this subject. Subsequently, when the data from the fishery study became available, this data demonstrated positively the falsity of the EIS on the subject of fisheries. The FHWA was under a duty to file a supplemental environmental impact statement setting forth the facts. The FHWA wilfully refused to take the necessary corrective action.

 The evidence at the second hearing not only demonstrated the failure of the FHWA to fulfill its own obligations under NEPA, but also reinforced the evidence presented at the first hearing to the effect that the FHWA and the New York State DOT colluded in a successful effort to persuade the Corps of Engineers to refrain from issuing an environmental impact statement in connection with the landfill application.

 Since the FHWA has failed to comply with NEPA, the FHWA must be enjoined against making any further payments for, or taking any further steps toward, the construction of Westway, except as specifically approved by the court. The matter must be remanded to the FHWA for further proceedings in compliance with the law.

 Findings of Fact

 Agencies Involved

 The principal responsibility within the FHWA for the Westway project rests with that agency's New York Division. The Division Administrator is Victor Taylor. The FHA official directly responsible for the Westway project is Graham Bailey, who carries the title of Area Engineer. Both Taylor and Bailey testified at the second hearing. Another witness from the FHWA at the second hearing was Fred Bank, an ecologist based in Washington.

 The FHWA has worked closely on Westway with the New York State DOT, headed by William Hennessy, the Commissioner. Commencing in 1972 an administrative entity known as the "West Side Highway Project" was formed under the jurisdiction of the New York State DOT. This entity will be referred to hereafter as "the Project" or "the Westway Project." The Project was made up almost entirely of outside consulting firms. The chief of these firms was Systems Design Concept, Inc. ("Sydec"). Lowell K. Bridwell, the principal of Sydec, was the Executive Director of the Project from 1972 until 1981, when he resigned to take an official post with the State of Maryland. In 1981, the FHWA requested that the administration of the Westway project be placed in the hands of state employees. Consequently, a state employee, Michael Cuddy, became Project Director in March of that year, succeeding Bridwell. Sydec and other outside consulting firms continue to be employed for various purposes. Bridwell and Cuddy testified at the second hearing.

 Under the provisions of NEPA, where the federal action involves a grant of funds to a state, the necessary environmental impact statement may be prepared by a state agency, so long as the responsible federal official ensures that the scope, objectivity and content of the statement are proper. 42 U.S.C. § 4332(2)(D).

 The January 1977 EIS was signed by both the FHWA and the New York State DOT. The actual drafting was done by Sydec, which had, among its various responsibilities, the duty to handle compliance with the environmental laws.

 Sydec also had the principal responsibility for dealing with the application to the Corps of Engineers for the landfill permit. An employee of Sydec by the name of Joan Walter was heavily involved in the matter of the landfill application to the Corps from the time it was filed in April 1977, and was also involved thereafter in all aspects of the aquatic impact question relating to Westway. Walter testified at the second hearing.

 The January 1977 EIS

 The March 31, 1982 opinion summarizes (pp. 43-44) the portions of the January 1977 EIS relating to the subject of fisheries. There is also a summary (pp. 44-46) of the document known as the Technical Report on Water Quality ("TRWQ"), which contains material on fisheries and which was deemed to be a part of the January 1977 EIS. The January 1977 EIS and the TRWQ developed in some detail the thesis that the area of the Hudson River proposed for the landfill (called the "interpier area") is so polluted and is subject to such rapid fluctuations of temperature and salinity that it cannot be used or inhabited by fish except to the most minimal extent. The January 1977 EIS contrasted the productive areas of the Hudson Estuary with the biologically barren interpier area. The EIS described the essential role of normal, productive estuary waters in fulfilling the needs of migratory fish, including providing nursery areas for certain species and offering winter protection for other species, such as striped bass. The interpier area was said to play no such estuarine role. The interpier area was described as a "biological wasteland" in the TRWQ. The TRWQ and the EIS described the interpier area as "almost devoid of micro-organisms" (which would include fish) and as "biologically impoverished." The EIS concluded that, in view of these circumstances, the landfill would cause a "minimal loss of estuarine productivity for species other than micro-organisms" (those which can only be observed through a microscope), and would "have little impact on the overall productivity of the Hudson Estuary."

 The January 1977 EIS argued that the river conditions along the new landfill shoreline would have basically the same characteristics as now occur in the main channel. Moreover, with improved sewage treatment, this area of the river would be a more attractive fish habitat in the future. The "riprap" edge of the landfill would provide dwelling areas attractive to fish and forms of life furnishing food for fish. Thus the argument was that the landfill would merely eliminate an "impoverished" area, leaving a main channel environment which would be beneficial to fish.

 Plaintiffs contend that the information existing at the time the January 1977 EIS was issued provided no basis for the categorical assertions about the absence of fish in the interpier area. The main focus of the litigation has been on the issue of whether results of the later fish study, completed in 1980, were such as to require supplementation of the January 1977 EIS. However, the question of whether the 1977 EIS was adequate as of the time of its issuance must be dealt with. The court finds that the FHWA and the New York State DOT lacked a sufficient basis for making the assertions on the subject of fishery impact which are contained in the 1977 EIS. Bridwell and Walter from the Project, and Bank from the FHWA, have all testified that, prior to the receipt of the results of the new fisheries study, they realized that the sampling which had been carried out in preparation for the January 1977 EIS was inadequate. They have admitted knowing that the reason the earlier study revealed virtually no fish in the interpier area was that the study was made at a time of year which was not representative and the sampling techniques were faulty. The court concludes that those responsible for preparing the fishery material in the January 1977 EIS knew, or should have known, of the lack of factual basis for what was stated.

 This does not mean that, as of 1977, there was any substantial body of information positively indicating that the interpier area was a fish habitat. The point is that the January 1977 EIS categorically asserted the opposite. There was no basis for such a presentation.

 Activities Regarding New Study

 On January 4, 1977 the FHWA and the United States Department of Transportation approved federal funding for Westway. Location and design approvals were granted by the FHWA on March 16, 1977 and July 25, 1977 respectively.

 The New York State DOT filed the landfill application with the Corps of Engineers in April 1977.

 In late 1978, EPA prevailed upon the New York State DOT to have a new fisheries study performed. The decision in favor of this new study was actually made by Hennessy, over the objection of Bridwell. The firm of Lawler Matusky & Skelly ("LMS") was commissioned to carry out the study. Their work commenced in April 1979.

 LMS carried out their sampling work each month commencing in April 1979 and continuing through April 1980. LMS reported the results of the sampling to Walter and Bridwell on a regular basis. Walter relayed general information about the results to representatives of the FHWA and the Corps of Engineers. A so-called "Progress Report" was issued by LMS in May 1980, which contained the sampling results through November 1979. The final LMS report dealing with the entire 13-month sampling was issued in two phases-Volume I appearing in September 1980, and Volume II in November 1980. Vol. I dealt with the numbers of fish caught at the various locations. Vol. II contained additional technical information of no great significance to the issues in this case.

 Witnesses from the Project and the FHWA testified at length in the second hearing about the LMS study. According to the Project and FHWA testimony, the information from the LMS report was received as an entirely routine matter and was the subject of no concern, since it indicated no significant environmental impact. According to Bailey of the FHWA, the difference between the LMS data and the earlier information was a mere "data discrepancy," which did not relate to an environmental impact because "the fish had elsewhere to go" (Tr. 176-77). The latter conclusion was said to be demonstrated by the LMS report. On the question of whether to correct or supplement the January 1977 EIS, the testimony was that the LMS report led to the same conclusion as had been stated in the EIS-that the landfill would have little impact on the overall productivity of the Hudson estuary. Therefore the Project and the FHWA maintain that they acted reasonably and in good faith in deciding that they need not issue a corrected or supplemental EIS, and that they were justified in advising the Corps of Engineers that the Corps should not issue any environmental impact statement in connection with the landfill permit application.

 The court has considered this testimony carefully in light of all the evidence, and is compelled to find that its essential features cannot be credited. In connection with the three principal defense witnesses-Bailey, Bridwell and Walter-it is apparent that they have not disclosed the facts in a full and candid fashion. The testimony of these witnesses was characterized not only by a striking lack of plausibility on critical points, but also by a ...

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