ELR Citation: ELR 20883
No(s). 92-1251 (10th Cir. Jan 20, 1994)

The court upholds the U.S. Forest Service's (Forest Service's) decision not to use settlement funds to rebuild a concession facility that was destroyed by fire. The court first holds that the Forest Service's actions under 16 U.S.C. §579c, which governs the availability of settlement funds to the Forest Service, are not entirely committed to agency discretion and thus are reviewable under Administrative Procedure Act (APA) §701(a)(2). The Forest Service cannot spend settlement money on anything it wishes, but must first ensure that necessary improvements to the damaged property have been made. The court next holds that concessionaires—a corporate predecessor and successor—do not have standing, because their injuries are not redressable by a favorable decision. If the Forest Service were to rebuild the facility, there is no guarantee that it would award the concession contract to the successor company, and the court could not order the Forest Service to do so. Moreover, the corporate predecessor would not be eligible to receive the concession contract, because it no longer exists. The court holds that the country where the facility was located has standing under Article III of the U.S. Constitution, because the county has been injured by revenue sharing and sales tax losses, and these injuries are fairly traceable to the Forest Service's decision not to rebuild. Also, both injuries would be redressed if the court ordered the Forest Service to rebuild the facility. The court holds that §579c also confers standing with regard to the county's claim of lost revenues from its revenue sharing program with the Forest Service. The county's injuries fall within the zone of interests of §579c, neither §579c nor its legislative history precludes judicial review, and the county is the type of plaintiff Congress intended to enforce the Forest Service's obligations under the Act.

Turning to the merits, the court holds that §579c does not require the Forest Service to use settlement proceeds to restore the facility. The statute unambiguously directs the Forest Service to spend moneys received in settlement on the necessary improvement, protection, or rehabilitation of damaged property, but does not mandate complete restoration of the burned down building. The court holds that the Forest Service's decision not to rebuild the structure was not arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law under APA §706(2)(A). The record shows that the Supervisor considered each of six alternatives and gave a detailed explanation for rejecting other options. Additionally, the Supervisor's decision was not arbitrary and capricious for failure to address comments raised during appeal of the third decision notice, and the Supervisor provided a reasoned explanation in the fourth decision notice for rejecting the first and second decisions to rebuild. The court holds that although the Supervisor's data concerning visitation before and after the facility's destruction in 1979 are unsubstantiated in the record, the Forest Service relied on other evidence sufficient to support its decision. The court also holds that the Supervisor adequately considered the availability of settlement and insurance moneys in his fourth decision notice.

Counsel for Plaintiffs
Joanne Herlihy
Mountain States Legal Foundation
1660 Lincoln St., Ste. 2300, Denver CO 80624
(303) 861-0244

Counsel for Defendants
Michael E. Hegarty, Ass't U.S. Attorney
U.S. Attorney's Office
1200 Federal Office Bldg., Drawer 3615, Denver CO 80294
(303) 844-3400

Before BALDOCK, BRIGHT,^* and McWILLIAMS, Circuit Judges