ELR Citation: ELR 20530
No(s). 92-36611 (9th Cir. Mar 19, 1993)

The court holds that the district court properly upheld the Army Corps of Engineers' (the Corps') decision not to prepare an environmental impact statement (EIS) under the National Environmental Policy Act (NEPA) for a dam construction project, although the district court erred in finding moot the issue of whether the Corps had jurisdiction under the Federal Water Pollution Control Act (FWPCA) over wetlands located in a diversion canal that were destroyed during construction of the dam. The court, however, concludes that the Corps' decision that the wetlands were nonjurisdictional because they were solely maintained by irrigation water related to construction of the dam was not arbitrary and capricious, and no remand is necessary. A hydroelectric company obtained a license from the Federal Energy Regulatory Commission (FERC) for the construction of a hydroelectric facility on the Payette River in Idaho, obtained the necessary state permits allowing it to appropriate water from the river, and obtained an FWPCA §404's permit from the Corps to place dredge and fill material in the river during construction of the project. Both FERC and the Corps found that the project would not significantly impact the environment within the meaning of NEPA, and neither agency prepared an EIS, but issued environmental assessments (EAs) and findings of no significant impact. Environmental groups challenged the Corps' actions seeking a declaration that the Corps had not complied with NEPA and the FWPCA, and an injunction halting the project pending preparation of an EIS. The district court disallowed 13 of the environmental groups' 14 proposed witnesses, ruled that the issue of the Corps' jurisdiction over the destroyed wetlands was moot, and dismissed the suit, holding that the Corps' decision was reasonable.

The court first upholds the district court's ruling that the Corps' decision not to prepare an EIS was not erroneous. The court notes that after the district court's June 1992 order dismissing this action, the Ninth Circuit abandoned the "reasonableness" standard and adopted the "arbitrary and capricious" standard for reviewing an agency's decision not to prepare an EIS. While this standard still requires the court to ensure that an agency has taken a "hard look" at the environmental consequences of its action and that its decision is founded on a reasoned evaluation of the relevant factors, the standard requires deference to agency discretion if the court concludes that the agency's discretion is truly informed.

The court next discusses and rejects each of the environmental groups' 10 bases for contending that the Corps' decision not to prepare an EIS was erroneous. First, the court holds that the Corps' conclusion that the wetlands would not be significantly affected was not arbitrary and capricious, because the Corps' mitigation measures, although they may not compensate completely for adverse impacts, are significant. Next, the court rejects the environmental groups' challenge that the Corps inappropriately relied on a state agency's certification of the project as complying with state water quality standards. The Corps' reliance on the state studies and on a monitoring program that should identify future problems before they become serious was not arbitrary and capricious. The court next rejects challenges to the Corps' EA consideration of the hydroelectric project's impacts on the fishery located near the project and a bald eagle population that winters near the project. The Corps' §404 permit contains mitigation measures for the fishery and protection conditions for the bald eagles. The court next rejects the environmental groups' challenges to the adequacy of the Corps' discussion of recreation, aesthetics, icing, and cumulative impacts. The permit contains mitigation measures for recreation, aesthetic, and icing aspects. Further, the Corps' reliance on FERC's analysis that the project would not contribute to cumulative adverse impacts was appropriate. Finally, the court rejects challenges to the Corps' alternatives analysis, because the Corps' EA discusses three alternatives, including a no-action alternative, which satisfies both the FWPCA's and NEPA's requirements.

The court next holds that although the district court erred in finding moot the issue whether the canal wetlands were within the Corps' jurisdiction for purposes of the §404 permit process, and, consequently, did not require adequate mitigation for their destruction, the Corps' classification of the wetlands as nonjurisdictional was not arbitrary and capricious. Thus, no remand is necessary. The district court erred because the environmental groups sought an injunction to stop the project until the Corps complied with NEPA and the FWPCA, not to stop destruction of the wetlands. Although the jurisdictional challenge became moot for NEPA's purposes after the wetlands were destroyed, the challenge was not similarly mooted for the FWPCA's purposes, since the §404 permit might have contained insufficient mitigation measures to compensate for wetlands loss if the wetlands were within the Corps' FWPCA jurisdiction. However, because the Corps' determination that the canal wetlands were not subject to its jurisdiction was not arbitrary and capricious, because the wetlands were maintained by irrigation water, the district court's mootness ruling does not require remand.

The court next holds that the Corps provided sufficient public notice and comment period, and the Corps did not abuse its discretion by not holding a public hearing. The Corps' decision not to hold a public hearing was based on adequate prior public notice, the conclusion that such a forum would not add new information, and the fact that the Corps was aware of strong support on both sides of the issues. Finally, the court holds that the district court did not abuse its discretion in excluding most of the environmental groups' witnesses from testifying, because much of their testimony addressed concerns that the same witnesses had raised during the public comment period. No additional information was necessary for the district court's review.

Counsel for Plaintiffs-Appellants
Jim Jones
Jim Jones Law Offices
960 Broadway, Ste. 310, Boise ID 83706
(208) 385-9200

Counsel for Defendants-Appellees
D. Marc Haws, Ass't U.S. Attorney
U.S. Attorney's Office
328 U.S. CrtHse., Box 037, 550 W. Fort St., Boise ID 83724
(208) 334-1211