The return of reasonableness to NEPA review?

• Author: Byrne, Jennifer L.
• Position: National Environmental Policy Act - Case Note

1. Introduction

   The National Environmental Policy Act (NEPA) of 1969[1] is a remarkable piece of legislation. It may not seem so remarkable today, where impact statements of all kinds are routinely done for federal actions of every description. But in the late 1960s, the unprecedented level of concern about the increasing threats to human health and the environment led to the revolutionary idea of making all agencies, not just those with resource protection responsibilities, stop and think about environmental consequences before they acted. NEPA proclaimed the national policy of "encourag[ing] productive and enjoyable harmony between man and his environment"[2] and ushered in a new era of informed government decision making.

   Today, some skeptics see NEPA as nothing more than a procedural hoop for agencies to jump through,[3] a meaningless exercise to make work for paper-pushing bureaucrats and the opportunistic environmental consulting industry. There are justifications for this pessimistic view of NEPA. First, the U.S. Supreme Court has held that NEPA is essentially procedural and courts may not use NEPA to require agencies to select the least environmentally damaging alternative.[4] Second, agencies have had twenty years to learn how to comply with NEPA, and they rarely make the same kinds of blatant errors that led to NEPA violations in the past.[5] The extent to which NEPA has been institutionalized, however, may be a positive sign that agencies have become more sensitive to the effects their actions have on the environment and that they are actually making better decisions than they did a quarter-century ago.

   Even if agencies are now doing a better job of considering environmental impacts than they did in the past, however, they are far from perfect. Citizen enforcement remains central to NEPA's ability to achieve its goals.[6] NEPA suits help police the agencies by keeping them "honest" and by providing an external check on internal government workings. In addition, although NEPA cannot ultimately prevent environmentally damaging projects, NEPA suits can delay unwise projects until the original proponents give up.[7]

   The standard of review employed by courts reviewing agency compliance with NEPA's requirements is critical to the effectiveness of these lawsuits. The purely procedural requirements of NEPA, combined with traditional deference to agency action,[8] mean that NEPA plaintiffs face an uphill battle when they seek to enjoin agency action on the basis of alleged NEPA violations. The standard of review determines the pitch of that incline. As the Fifth Circuit observed in Save Our Ten Acres v. Kreger,[9] "The spirit of [NEPA] would die aborning if a facile, ex parte decision ... were too well shielded from impartial review."[10] In order to ensure that NEPA's goals are met by agencies, NEPA plaintiffs want the most searching review they can get, on the theory that the closer the court looks at an agency's actions, the more likely it will be to find a NEPA violation and issue an injunction. Agencies, on the other hand, tend to prefer a more deferential standard that does not second-guess their attempts to comply with NEPA.

   The two standards used most often in NEPA challenges are the highly deferential "arbitrary and capricious" standard, derived from judicial review provisions of the Administrative Procedure Act,[11] and the somewhat less deferential "reasonableness" standard.[12] Although a coherent statement of the difference between these standards has not been articulated, many litigants, courts, and commentators believe that the reasonableness standard provides for more in-depth review of agency action than does the arbitrary and capricious standard.[13]

   In 1989, in Marsh v. Oregon Natural Resources Council,[14] the Supreme Court announced that the standard of review for challenges to agency decisions not to write supplementary environmental impact statements is the arbitrary and capricious standard.[15] In so doing, the Court seemed to shut the door on the use of the reasonableness standard, which several circuits had employed, in review of similar agency decisions. Despite the Supreme Court's often-repeated assertion that the difference between these standards is not of great pragmatic consequence,"[16] NEPA plaintiffs have continued to argue for the use of the reasonableness standard. In a recent Ninth Circuit case, Alaska Wilderness Recreation and Tourism Ass'n v. Morrison,[17] the court distinguished Marsh and employed the reasonableness standard in reviewing a decision by the U.S. Forest Service not to supplement three environmental impact statements (EISs) after the cancellation of a long-term timber sales contract.[18] The cancellation of the contract greatly expanded the range of available alternatives that could be considered in the EIS. The court found that the Forest Service's attempts to minimize its discretion presented a "predominantly legal" issue, which justified more rigorous review.[19]

   This Note discusses how courts have treated the standard of review under NEPA since the Marsh decision. Part E offers a brief overview of NEPA and the two standards most often employed in reviewing NEPA actions. Part III reviews the landscape of this issue prior to the Marsh decision and describes the Court's holding in Marsh. Parts IV and V discuss the post-Marsh cases that respectively follow and distinguish Marsh. Part VI analyzes Alaska Wilderness and suggests that the choice of standard hinges on whether the court views the issue as one of law or of fact. Part VII concludes by proposing that NEPA plaintiffs should attempt to characterize their issues as legal ones in order to argue for less deferential judicial review under the reasonableness standard. Closer scrutiny of agency compliance with NEPA makes it more likely that NEPA violations will be found, that environmentally unsound projects win not proceed, and that NEPA's section 101 goals will be advanced.

2. NEPA Procedures and the Standard of Review

   1. NEPA

      The heart of the National Environmental Policy Act (NEPA) is found in section 102, which requires agencies to prepare a "detailed statement" of adverse environmental impacts from and alternatives to "proposals for legislation and other major Federal actions significantly affecting the quality of the human environment."(20) Guidelines for implementing NEPA are found in regulations promulgated by the Council on Environmental Quality.(21) Federal actions include any regulations, plans, projects, or programs undertaken or funded by a federal agency, as well as government regulatory actions such as issuance of a permit.(22) Thus, many regulated private actions also require NEPA analysis.

      The action agency may prepare an environmental assessment (EA) to "assist agency planning and decisionmaking."(23) An EA is particularly helpful to determine whether the proposed action will significantly affect the environment. The EA addresses the need for the project, the potential environmental impacts of the project, and possible alternatives to the proposed action.(24) If on the basis of the EA the agency does not consider the impacts significant, it issues a Finding of No Significant Impact,(25) which brings the NEPA analysis to an end. If the environmental impacts of the proposal will be significant, the agency must prepare an environmental impact statement (EIS).(26)

      Preparation of an EIS requires agencies to solicit comments from other agencies and from the public on a draft EIS(27) and to respond to those comments in the final EIS.(28) The EIS must include an explanation of the purpose and need for the action,(29) a description of alternatives to the proposed action,(30) and a description and analysis of the environmental impacts of both the proposal and the alternatives.(31) The alternatives analysis is the heart of the EIS process(32) and must include a "no action" alternative.(33) The agency issues a record of decision (ROD) with the final EIS.(34) The ROD describes which alternative the agency has selected. This generally ends an agency's NEPA obligations. The agency is free to proceed with the selected alternative even if that alternative is not the least environmentally damaging.(35) In some circumstances, however, if the project is not complete and significant new relevant information comes to light that was not considered in the EIS, the agency must address that information in a supplemental EIS.(36)

      The statute does not mention judicial review of agency efforts to comply with NEPA. In a historic decision 37 however, the D.C. Circuit emphatically asserted judicial authority to enforce NEPA:

      We conclude, then, that Section 102 of NEPA mandates a particular sort of careful and informed decisionmaking process and creates judicially enforceable duties.... [I]f the decision was reached procedurally without individualized consideration and balancing of environmental factors -- conducted fully and in good faith -- it is the responsibility of the courts to reverse.(38)

      Consequently, plaintiffs who believe that agencies have not followed NEPA-mandated procedures can take their arguments to court. Environmentalists typically challenge agency decisions not to prepare an EIS,(39) or the adequacy of alternatives analyses and impact assessments in EAs and EISs.(40)

      Review of the substance of the agency's decision is, however, not available. The D.C. Circuit suggested as much in Calvert Cliffs' Coordinating Committee, Inc. v. United States Atomic Energy Commission,(41) stating that the substantive policy of NEPA is flexible and does not demand certain substantive results.(42) Yet, NEPA's procedural provisions are very important and will be more rigidly enforced to ensure that agencies properly exercise their discretion on substantive issues.(43) The Supreme Court confirmed in Strycker's Bay Neighborhood Council v. Karlen(44) that the only role for a court is to ensure NEPA's...