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August 5, 2005.

UNITED STATES ARMY CORPS OF ENGINEERS; and COL. RICHARD POLO, JR., in his official capacity as Commander and District Engineer, United States Army Corps of Engineers, New York District, Defendants.

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge



  Plaintiffs are a group of environmental organizations and concerned citizens. They are challenging an ongoing project, to be carried out by the Army Corps of Engineers ("Army Corps"), to deepen shipping channels in the New York-New Jersey Harbor through dredging and blasting of the Harbor floor. The Harbor Deepening Project ("HDP") is intended to open the Harbor to the newer, larger and deeper-bottomed cargo vessels on which the modern shipping industry depends. Part of the HDP will cut through highly contaminated sections of Newark Bay and surrounding waterways. This contamination is the result of centuries of heavy industrial use of the Bay and its tributaries — in particular, the Bay is contaminated with the by-products resulting from the manufacturing of Agent Orange at the Diamond Alkali Chemical Plant, on the Passaic River, during the Vietnam War.

  On February 13, 2004, the United States Environmental Protection Agency ("EPA") entered into an Administrative Order on Consent ("Feb. 2004 AOC"), which added Newark Bay to the Diamond Alkali Superfund Site, as the "Newark Bay Study Area of the Diamond Alkali Superfund Site." The AOC orders a Remedial Investigation/Feasibility Study ("RI/FS") to be carried out by Occidental Chemical Corporation under the supervision of the EPA. The RI will determine the extent and nature of contamination in the Bay, and the FS, based on what is learned from the RI, will evaluate possible cleanup options. Both aspects of the study are to begin in the summer of 2005. An essential component of the study is the sampling of the Bay's water to determine the distribution and concentration of contaminated sediments.

  Plaintiffs believe that the HDP may delay or frustrate this sampling effort, by disturbing and resuspending*fn1 the contaminated sediments that are to be sampled, undermining the study's attempt to map contaminant distribution — thereby delaying or even preventing the design of effective cleanup options. They insist that the Corps is acting arbitrarily and capriciously, in violation of the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., and the Adminstrative Procedure Act, 5 U.S.C. § 706 ("APA"), by proceeding with the HDP without preparing a Supplemental Environmental Impact Statement ("SEIS") to consider the possible detrimental effects of the HDP dredging on the RI/FS. The Corps argues that dredging will not significantly interfere with sampling for the RI/FS, and so there is no reason to prepare an SEIS.

  The narrow issue presented here is whether the Army Corps gave a "hard look" to the possibility that the HDP will interfere with the sampling required by the RI/FS, and to ways of avoiding such interference, before deciding to go ahead with dredging without preparing an SEIS. If the Corps failed to take that hard look, its decision, by definition, was arbitrary and capricious.

  After closely reviewing a voluminous record, I conclude that the Corps failed to take a hard look at this narrow question. Because the sampling will ultimately be important in determining the need for a clean-up of the Bay, and the best way to approach that clean-up, it is important that any action that might adversely affect it be carefully considered. The issue is a narrow one, and it may be that, once the Corps does take a hard look at the possible effects of dredging on the RI/FS, it will find — as it hopes — that they are minor and easily controlled by cooperation between the Corps and the EPA, and that preparing an SEIS would merely result in burden and delay. But the issue is too important to be treated lightly. NEPA ensures that federal agencies must take a hard look at potential environmental problems before proceeding with their plans. The Corps must assess the impact of its dredging on the sampling required for the RI/FS before committing to a particular method of dredging, rather than waiting until dredging interferes with that sampling and causes unrecoverable delays to the potential cleanup process. Similarly, if the Corps relies on the promise of cooperation between the EPA and the Corps to minimize the effects of dredging on the RI/FS, the Corps must give full consideration to how that cooperation will be handled before committing to a particular method of dredging, not after problems arise. For the reasons set forth below, the Corps' decision to begin dredging without taking the required hard look at this problem was arbitrary and capricious. The issue is before the Court on plaintiffs' and defendants'*fn2 cross-motions for summary judgment. Pursuant to the agreement of the parties, the Court has bifurcated review of plaintiffs' claims. This opinion addresses only the question of liability — that is, whether the Corps' decisions to proceed with the HDP without preparing an SEIS were based on adequate review of the environmental consequences of the HDP, as required by NEPA and the APA. I find that they were not, and the Corps is in violation of NEPA and the APA. The question of what remedy (if any) is necessary will be addressed in a subsequent opinion.


  A. The Newark Bay Site

  On September 21, 1984, the EPA added the Diamond Alkali Superfund Site to the National Priorities List, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").*fn3 The site consisted of the former Diamond Alkali chemical manufacturing plant and the adjacent property. The EPA's RI/FS revealed that the site was highly contaminated with toxic substances, including dioxin, a by-product of the Agent Orange manufacturing carried out at the plant during the Vietnam War.*fn4

  The EPA's investigations also revealed hazardous substances in the sediments of the Passaic River.*fn5 These findings resulted in the EPA entering into an AOC, dated April 20, 1994, with Occidental Chemical Corporation ("Occidental"), the company responsible for the plant site. The 1994 AOC required Occidental to conduct an RI of a six mile stretch of the Passaic River, up and downstream from the plant site.*fn6 In 2003, the EPA determined that an expanded RI for a 17-mile stretch of the River (the "Lower Passaic River Study Area") was necessary. The EPA, the Army Corps, and the New Jersey Department of Transportation have entered into a partnership, the Lower Passaic River Restoration Project, to "identify and address water quality improvement, remediation and restoration opportunities" in the Passaic River.*fn7 On June 22, 2004, the EPA entered into an AOC with thirty-one potentially responsible parties to fund the EPA's investigation of the Lower Passaic River Study Area.*fn8 The Lower Passaic River Study Area ends at the mouth of the River.*fn9 To date, no remedy has been determined for the Lower Passaic River Study Area.*fn10

  On November 19, 2003, plaintiffs NRDC and Raritan Baykeeper, Inc. ("Baykeeper"), served a notice of intent to sue Occidental under the Resource Conservation and Recovery Act, to compel a study of dioxin contamination in Newark Bay, which they allege had spread downstream from the Passaic River portion of the Diamond Alkali Superfund Site.*fn11 On February 13, 2004, the EPA entered into another AOC with Occidental under CERCLA.*fn12 The February 2004 AOC designated Newark Bay and portions of the Hackensack River and the Arthur Kill and Kill van Kull channels as the Newark Bay Study Area of the Diamond Alkali Superfund Site (the "Newark Bay Study Area").*fn13 Pursuant to the AOC, the EPA "has determined that conditions in the Newark Bay Study Area may present an imminent and substantial endangerment to public health, welfare or the environment."*fn14

  Under the terms of the AOC, Occidental has undertaken to perform an RI/FS in the Newark Bay Study Area, under the supervision of the EPA, "to determine the nature and extent of contamination . . . and to develop and evaluate remedial alternatives."*fn15 Among other things, the RI will "determine the ? distribution and concentration of [contaminants] for the Newark Bay Study Area sediments," in order to "identify `hot spots' for potential short term action[;] identify potential exposure concentrations through the food chain for human and ecological receptors [and] evaluate prospective remedial alternatives."*fn16 In addition, the RI will "determine the primary human and ecological receptors of [contaminated sediments] in the Newark Bay Study Area" and "determine the direct and indirect continuing sources of [contaminants] to the sediments in the Newark Bay Study Area."*fn17 The FS will evaluate a range of possible remedial actions, from "[t]reatment alternatives for source control of contaminated [sediments] that would eliminate the need for long term management," through "[a]n alternative that involves containment of waste with little or no treatment," to "[a] no action alternative."*fn18 A company known as Tierra Solutions, Inc., ("Tierra") is performing the work under the AOC on behalf of Occidental.*fn19

  Occidental submitted a draft work plan to conduct the RI for the Newark Bay Study Area in June 2004.*fn20 The draft RI/FS contains a draft Inventory Report (the "June 2004 Inventory Report") compiling data on contaminated sediment, flora and fauna, and water in and around Newark Bay.*fn21 The plan is subject to the approval of the EPA. Based on public comments, the EPA anticipates that the draft work plan will need modification.*fn22 The EPA is revising the study, with the intention of beginning field sampling of contaminated sediments in the Newark Bay Study Area in the summer of 2005.*fn23

  B. The Harbor Bay Deepening Project

  The Port of New York and New Jersey ("the Port") is the third largest in the nation.*fn24 In 2004, $114 billion in cargo passed through the Port.*fn25 A 2001 study conducted by the Center for Urban Policy Research at Rutgers University found that
cargo movement in 2000 provided nearly 101,700 direct full-time equivalent jobs and supported an additional 125,585 in-direct full-time equivalent jobs in the 26-county metropolitan region. Furthermore, the goods movement thru the port region supported an additional 185,715 jobs elsewhere in the nation (not including the jobs of people producing goods shipped).*fn26
  In recent years, under the pressure of globalization, the ocean carrier industry has seen a movement toward the concentration of capacity in fewer ships and ports.*fn27 At the same time, there has been a trend toward the development of larger cargo vessels, capable of carrying cargo more efficiently and achieving economies of scale.*fn28 The navigation channels in the Harbor are not presently deep enough to serve fully loaded ships of the latest design.*fn29

  Beginning in 1986, Congress has authorized the Army Corps to undertake a number of projects to deepen the navigational channels in the New York and New Jersey Harbor.*fn30 These projects included the Kill Van Kull 45' Deepening Project, the Arthur Kill 41/40 Deepening Project, The Port Jersey 41' Deepening Project, and the New York and New Jersey Harbor Deepening Project.*fn31 In 2002, Congress ordered the Army Corps to consolidate each of these projects into one overall deepening project, known as the HDP.*fn32 The HDP will deepen all of the navigational channels in the New York and New Jersey Harbor to 50 feet.*fn33

  C. NEPA Review of the Harbor Deepening Project

  The various phases of the HDP have been subjected to extensive environmental review under NEPA and under section 401 of the Clean Water Act, 33 U.S.C. § 1341. In total, the Army Corps has produced over a dozen separate NEPA documents analyzing the project, beginning with a 1980 Final Environmental Statement.*fn34 The most important of these is a Final Environmental Impact Statement ("FEIS"), issued by the Army Corps in December 1999, to "identify, screen, evaluate and recommend a plan for channel improvements throughout the Port of New York and New Jersey."*fn35 Among other factors, the 1999 FEIS analyzed the environmental effects of resuspension of contaminated sediments as a result of dredging, and the potential effects of such resuspension on "exposure of biological receptors to contaminants."*fn36 The FEIS concluded that:
two opposing effects on biological exposure to contaminants are anticipated from deepening the navigation channels in the New York and New Jersey Harbor. Dredging of the channels, and the resulting suspension of contaminated sediments into the water column, is expected to increase exposure of biological organisms. This is expected to occur, however, only in areas close to the dredging operations and should be relatively short-lived because suspended sediments are expected to settle out of the water column within a relatively short period. Furthermore, sediment suspension from ship traffic in narrow channels has been shown to be greater than from dredging activities. It is therefore possible that any increase in exposure due to dredging will be minimal compared to other more frequent disturbances in the Harbor. On the other hand, dredging the channels is also expected to remove a large amount of contaminated sediments from the bottom of the channels, thus exposing a new layer of relatively clean sediment. This effect, however, is also expected to be short-lived . . . [T]he system should stabilize and return to current conditions within a few months to a few years, depending on the area of the Harbor. Furthermore, Best Management Practices (BMPs) will be used during dredging operations to minimize the suspension of sediments . . . In addition, sediment contaminant analysis, where necessary, will be performed for the next phase of the project, and will be coordinated with the appropriate regulatory authorities.*fn37
  In 2001, the Army Corps signed a Pre-construction Engineering and Design Agreement with the Port Authority of New York and New Jersey.*fn38 Pursuant to Army Corps regulations, the Army Corps updated its environmental analysis of resuspension of sediments resulting from dredging operations.*fn39 The Army Corps updated its environmental analysis again following the 2002 consolidation of the various projects into the HDP. Because the consolidation resulted in some changes to the design of the project, and additional deepening in some areas, the Army Corps conducted an Environmental Assessment ("EA").*fn40 The public comment period for this EA opened in November, 2003.*fn41 In January 2004, the Army Corps issued its Limited Reevaluation Report and EA, with a Finding of No Significant Impact ("FONSI").*fn42 The EA/LRR found that "[d]ata comparison and evaluation identified no new potential adverse environmental impacts attributable to consolidation. Potential short term impacts due to consolidated implementation would be the same as the effects on aquatic resources identified in the [prior EIS], except the overall duration under a consolidated schedule would be shorter."*fn43 D. Clean Water Act Review of the Harbor Deepening Projects

  In addition to its obligations under NEPA, the Army Corps applied, pursuant to the Clean Water Act, for "umbrella" Water Quality Certificates ("WQCs") from the States of New York and New Jersey, as part of the approval process for the HDP.*fn44 Following formal public hearings on February 12, 2004 in Staten Island, New York and March 10, 2004 in Bayonne, New Jersey, the Army Corps received WQCs from both states.*fn45 The WQCs impose extensive "Special Conditions" on the dredging practices used in the deepening projects.*fn46 For example, the WQC issued by New York specifies the type of "environmental bucket" to be used for dredging.*fn47 The WQCs also require ongoing monitoring of certain environmental impacts and the submission of additional "Permit Documents." Among other things, the New York WQC requires that "a sediment sampling plan for purposes of conducting bulk chemistry analysis for each contract reach be submitted for [New York State Department of Environmental Conservation] approval in coordination with the State of New Jersey at least 60 days prior to the anticipated start date for a given reach."*fn48

  E. Environmental Review Following the February 2004 AOC

  On February 13, 2004, the EPA informed the Army Corps by email that the AOC designating the Newark Bay Study Area had been signed.*fn49 An Army Corps employee named Thomas Shea, at the time the manager of the Lower Passaic River project, and now manager of the HDP, responded to that email on February 17, 2004, asking "[w]hat impact does this have on our navigation jobs, where we are dredging portions of Newark Bay?"*fn50 On March 11, 2004, Shea circulated the AOC to twenty-one Army Corps employees.*fn51 Shea noted that "As a result of this order, I have some basic questions on what this may mean to our various programs (predominantly our . . . deepening projects . . .). . . . Could you please review the order and develop your own set of questions and send them to me. I will consolidate them and EPA will review and meet with us to discuss them."*fn52 Shea received several responses, although none substantively addressing the effect of dredging on the RI/FS.*fn53

  In May, and again in October, Elizabeth Butler of the EPA attempted, by email, to arrange a meeting with Shea to discuss coordination between the Army Corps' and the EPA's activities in the Bay.*fn54 In the meantime, in May and September 2004, plaintiffs raised their concerns with the EPA and the Army Corps, by letter, email and orally.*fn55 Notably, in a May 3, 2004 email to Shea, Baykeeper requested a meeting "to discuss [Army Corps] coordination with EPA, especially with respect to dredging in Newark Bay and other areas under study under the guise of CERCLA."*fn56 In a September 28, 2004 letter to the EPA (and copied to the Army Corps), NRDC and Baykeeper presented a detailed list of objections to Tierra's draft work plan for the RI/FS; among other things, plaintiffs complained that Tierra's work plan failed to consider the "obvious overlap" between their sampling activities and the Army Corps' dredging.*fn57

  On October 18, 2004, representatives of the EPA and the Army Corps finally met to discuss the deepening projects.*fn58 At that meeting, the Army Corps provided EPA with a preliminary schedule and map of planned deepening projects to assist with the coordination of the projects.*fn59 During the following months, the EPA and the Army Corps continued to communicate, while plaintiffs continued to press their concern. On November 24, 2004, plaintiffs wrote to Colonel Richard J. Polo, Commander and District Engineer of the Army Corps, New York District, to request a meeting to discuss their fear that dredging would "undermine the ...

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