Coliseum Square Ass'n v. Jackson

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED SEPTEMBER 21, 2006
September 18, 2006
UNITED STATES COURT OF APPEALS
Charles R. Fulbruge III
For the Fifth Circuit Clerk
No. 03-30875
COLISEUM SQUARE ASSOCIATION, INC.,
SMART GROWTH FOR LOUISIANA,
LOUISIANA LANDMARKS SOCIETY, INC.,
HISTORIC MAGAZINE ROW ASSOCIATION
and THE URBAN CONSERVANCY, INC.
Plaintiffs-Appellants,
VERSUS
ALPHONSO JACKSON, ETC; ET AL
Defendants,
ALPHONSO JACKSON, ACTING SECRETARY,
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
and HOUSING AUTHORITY OF NEW ORLEANS
Defendants-Appellees
- - - - - - - - - - - - - - - - - - - -
____________________________
No. 04-30522
____________________________
COLISEUM SQUARE ASSOCIATION, INC.,
SMART GROWTH FOR LOUISIANA,
LOUISIANA LANDMARKS SOCIETY, INC.,
HISTORIC MAGAZINE ROW ASSOCIATION
AND THE URBAN CONSERVANCY, INC.
1
Plaintiffs-Appellants,
VERSUS
HOUSING AUTHORITY OF NEW ORLEANS,
an agency of the State of Louisiana,
ALPHONSO JACKSON, ACTING SECRETARY,
UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT,
Defendants-Appellees
VERSUS
HISTORIC RESTORATION, INC.,
Intervenor-Appellee
Appeals from the United States District Court
for the Eastern District of Louisiana
Before JONES, Chief Judge, and KING and DENNIS, Circuit
Judges.
DENNIS, Circuit Judge:
In this case, we are called upon to decide whether
the National Environmental Policy Act of 1969 (NEPA), 42
U.S.C. §§ 4321-4370f), and the National Historic
Preservation Act (NHPA), 16 U.S.C. §§ 470f-470x-6,
2
require the United States Department of Housing and Urban
Development (HUD) to cease federal funding for the St.
Thomas Housing Development revitalization project in the
City of New Orleans until the agency completes further
evaluation of the project’s environmental and historic
preservation impacts. Because it does not appear that HUD
has acted arbitrarily, capriciously or contrary to law in
its study, consideration, and findings regarding the
project’s environmental impacts, we conclude that these
statutes impose no further requirements on HUD at this
time.
I.
A brief overview of the statutes and regulations
creating the administrative framework, terminology and
objectives helps to understand the case. After describing
the bureaucratic order, we then turn to the factual and
procedural background.
A.
3
1.
“NEPA establishes a ‘national policy [to] encourage
productive and enjoyable harmony between man and his
environment,’ and was intended to reduce or eliminate
environmental damage and to promote ‘the understanding of
the ecological systems and natural resources important
to’ the United States.” Dep’t of Transp. v. Pub. Citizen,
541 U.S. 752, 756 (2004) (quoting 42 U.S.C. § 4321).
“‘NEPA itself does not mandate particular results” in
order to accomplish these ends.”’ Pub. Citizen, 541 U.S.
at 756 (quoting Robertson v. Methow Valley Citizens
Council, 490 U.S. 332, 350 (1989)). Instead, NEPA imposes
procedural requirements on federal agencies, requiring
agencies to analyze the environmental impact of their
proposals and actions. Pub. Citizen, 541 U.S. at 756-57.
NEPA’s central requirement is that federal agencies must:
include in every recommendation or report on
proposals for legislation and other major
Federal actions significantly affecting the
quality of the human environment, a detailed
statement by the responsible official on-(i) the
environmental impact of the proposed action,
(ii) any adverse environmental effects which
cannot be avoided should the proposal be
4
implemented, (iii) alternatives to the proposed
action, (iv) the relationship between local
short-term uses of man's environment and the
maintenance and enhancement of longterm
productivity, and (v) any irreversible and
irretrievable commitments of resources which
would be involved in the proposed action should
it be implemented.
42 U.S.C. § 4332(2); see also Pub. Citizen, 541 U.S. at
757.
Federal agencies receive guidance in their
preparation of this detailed “Environmental Impact
Statement”, or “EIS”, from the Council of Environmental
Quality (“CEQ”). Established by NEPA with the authority
to issue regulations interpreting that statute, the CEQ
has promulgated regulations determining what actions are
subject to that statutory requirement. See 40 C.F.R. §
1500.3; see also Pub. Citizen, 541 U.S. at 757. According
to these regulations, the agency may instead prepare a
more limited document, called an Environmental Assessment
(“EA”), if the proposed action is categorically excluded
from the requirement to produce an EIS or does not
clearly require the production of an EIS. Pub. Citizen,
541 U.S. at 757 (citing 40 C.F.R. §§ 1501.4(a),(b)). An
5
EA, as compared to an EIS, should be a “concise public
document...that serves to...[b]riefly provide sufficient
evidence and analysis for determining whether to prepare
an [EIS].” 40 C.F.R. § 1508.9(a). “If, pursuant to the
EA, an agency determines that an EIS is not required
under applicable CEQ regulations, it must issue a
‘finding of no significant impact’ (FONSI), which briefly
presents the reasons why the proposed agency action will
not have a significant impact on the human environment.”
Pub. Citizen, 541 U.S. at 757 (citing 40 C.F.R. §§
1501.4(e), 1508.13).
2.
“The National Historic Preservation Act (“NHPA”), 16
U.S.C. §§ 470-470x-6, ‘requires each federal agency to
take responsibility for the impact that its activities
may have upon historic resources, and establishes the
Advisory Council on Historic Preservation...to administer
the Act.’” Nat'l Mining Ass'n v. Fowler, 324 F.3d 752,
755 (D.C.Cir. 2003) (citations omitted). Section 106 of
6
the NHPA requires that:
[t]he head of any Federal agency having direct
or indirect jurisdiction over a proposed Federal
or federally assisted undertaking...shall, prior
to the approval of the expenditure of any
Federal funds..., take into account the effect
of the undertaking on any district, site,
building, structure, or object that is included
in or eligible for inclusion in the National
Register. The head of any such Federal agency
shall afford the Advisory Council on Historic
Preservation established under Title II of this
Act a reasonable opportunity to comment with
regard to such undertaking.
16 U.S.C. § 470f.
Like NEPA, the NHPA is procedural in nature. See,
e.g., Morris County Trust for Historic Pres. v. Pierce,
714 F.2d 271, 278 (3d Cir. 1983).
It does not itself require a particular outcome,
but rather ensures that the relevant federal
agency will, before approving funds or granting
a license to the undertaking at issue, consider
the potential impact of that undertaking on
surrounding historic places. As such, courts
have sometimes referred to Section 106 as a
“stop, look, and listen” provision.
Business and Residents Alliance of East Harlem v. HUD,
430 F.3d 584, 591 (2d Cir. 2005) (citing Ill. Commerce
Comm'n v. Interstate Commerce Comm'n, 848 F.2d 1246,
1260-61 (D.C.Cir.1988); Pres. Coal., Inc. v. Pierce, 667
7
F.2d 851, 859 (9th Cir. 1982)). Much like the EA/EIS
process under NEPA, section 106 upholds the NHPA's
objectives "neither by forbidding the destruction of
historic sites nor by commanding their preservation, but
instead by ordering the government to take into account
the effect any federal undertaking might have on them."
United States v. 162.20 Acres of Land, 639 F.2d 299, 302
(5th Cir. 1981).
When a project will adversely affect a National
Historic Landmark, however, section 110f of the NHPA
requires an agency to "undertake such planning and
actions as may be necessary to minimize harm to such
landmark" to the maximum extent possible and to allow the
Advisory Council on Historic Preservation (“ACHP”) time
to comment. 16 U.S.C. § 470h-2f. "Federal regulations
also have been promulgated to guide the historic
preservation review process, including consultation with
the [State Historic Preservation Officer, or “SHPO”] and
an opportunity to comment by the [ACHP]." Vieux Carre
Property Owners Residents and Associates, Inc. v. Pierce,
8
719 F.2d 1272, 1281 (5th Cir. 1983) (citing to 36 C.F.R.
§§ 800-100.13).
B.
1.
We now turn to the factual and procedural background
of this case. The plaintiffs, Coliseum Square Ass’n,
Inc., Smart Growth For Louisiana, Louisiana Landmarks
Society, Inc., Historic Magazine Row Association, and The
Urban Conservancy, non-profit organizations representing
citizens, residents and merchants in the City of New
Orleans (“plaintiffs”), brought this action against HUD
for judicial review, seeking declaratory judgment that
HUD failed to comply with NEPA and NHPA in funding the
St. Thomas Housing Development revitalization project and
an injunction compelling HUD to withhold federal funds
from the project until it fully complies with those
statutes. The Housing Authority of New Orleans (“HANO”)
was originally a named defendant. Although the district
court granted plaintiffs' motion to dismiss HANO from the
9
case as a defendant, HANO later re-entered the case as an
intervenor.
The St. Thomas Housing Development revitalization
project calls for substantial demolition of the pre-
existing St. Thomas Housing Development (St. Thomas) in
New Orleans and, in its place, the construction of new
low-income housing, new market rate housing, a senior
care facility, and a shopping center. Prior to the
beginning of the project, St. Thomas was a residential
public housing complex within the Lower Garden District
of New Orleans. Both the Garden District itself and many
of the buildings in St. Thomas are listed on the National
Register for Historic Places. St. Thomas, built between
1937 and 1949, consisted of 121 buildings (a total of
1510 residential units) covering 64 acres. By 1994, St.
Thomas had become excessively run-down and crime-ridden.
The Housing Authority of New Orleans initiated renewal
efforts, which resulted in a plan to renovate the area
covered by St. Thomas.
In 1996, HUD granted the Housing Authority of New
10
Orleans $25 million through the HOPE IV program for
revitalizing St. Thomas; the project then did not
contemplate retail stores but was limited to housing
units. Because of its grant of federal funds, HUD became
responsible for ensuring that its financing of the
revitalization project complies with the requirements of
NEPA and NHPA.
In 1998, HANO enlisted a private developer, Historic
Restorations, Inc. (“Historic Restorations”) to assist in
improving the plan. An amended redevelopment plan,
submitted to HUD in 2000, included construction of new
low-income housing, new market rate housing, a senior
care facility, and a 275,000 square foot shopping center,
the last of which was to be built on nearby, formerly
industrial land. Historic Restorations hired Citywide
Testing (“Citywide”) to prepare environmental studies and
documents for the project. By November 4, 1999, Citywide
had completed studies and proposed findings for HUD in
support of a proposed FONSI.
By September 2000, HUD completed the initial Section
11
106 review required by the National Historic Preservation
Act ("NHPA"), which examined the project's impact on
historical properties. Subsequently, the Housing
Authority of New Orleans, the State Historical
Preservation Officer, and the Advisory Council on
Historic Preservation (a federal agency) signed a
Memorandum of Agreement (“MOA”) for the project.
Demolition began in October 2000.
HUD also completed its NEPA review in May of 2001,
after reviewing and adopting the proposed EA developed by
Citywide and approved by HANO: after adopting the
proposed EA/FONSI, HANO forwarded it to HUD. On May 21,
2001, the acting HUD officer noted, by hand and in the
space provided, that HUD had reviewed and concurred in
the proposed EA/FONSI.
In July 2001, after both the MOA and environmental
assessment were completed, Historic Restorations
recommended that the retail component of the project be
scaled back from 275,000 square feet to 199,000 square
feet and obtained a commitment from Wal-Mart to become
12
the retailer.
On September 4, 2001, after HRI publicly announced
that Wal-Mart would be filling the retail space, the
State Historic Preservation Officer asked to reopen the
NHPA review. On September 6, 2001, all parties to the MOA
agreed to reopen the NHPA process. HUD then undertook
additional study, including a particular focus on the
potential impact Wal-Mart might have on historic
properties in the area. The additional investigation
included consultation with all of the MOA’s signatories
as well as with the City of New Orleans and its planning
commission, the State of Louisiana, the general public
(including St. Thomas residents), and the project’s
opponents (including neighborhood groups and preservation
agencies). As a result of that study, HUD expanded its
assessment of the project's Area of Potential Effects to
cover parts of Uptown, Mid-City, and Faubourg Marigny as
well as all of the Garden District, the Lower Garden
District, Irish Channel, the Central Business District,
and the Vieux Carre (better known as the French Quarter).
13
In July 2002, two years after demolition had begun
and the project’s residents had been relocated,
plaintiffs filed suit. In response to the concerns raised
in that complaint, HUD reopened its NEPA process to
conduct further study. While the process was open,
progress on the project was restricted to infrastructure
work on the residential sections and work needed to
address environmental conditions. After the supplemental
investigation was complete, the proposed EA and FONSI
went through a public comment period. On February 20,
2003, an amended MOA was signed and a new environmental
assessment and FONSI were issued.
2.
At oral argument we requested additional briefs from
the parties regarding whether the case had been mooted
because the project was either substantially complete or
effectively terminated by the adverse effects of
Hurricane Katrina. After reviewing those briefs, we are
satisfied that this case is not moot and that we have
14
subject matter jurisdiction.
It is true that many significant parts of the project
have been completed. The Wal-Mart shopping center has
been finished and open for business since late 2004. As
of late February 2005, most of the former St. Thomas
housing project had been demolished. Only five buildings
were left standing for future rehabilitation. The first
phase of housing units had been completed; 98% of them
had been rented and occupied. Infrastructure work for the
entire housing portion of the site had been completed,
and work had begun on ten subsidized units of offsite
rental housing.
The next phase, however, consisting of the
construction of 73 mixed-income housing units, was
expected to begin in March 2006. Work had not yet begun
on rehabilitating the remaining five buildings from the
St. Thomas housing project. The following construction
was planned but not yet begun: 200 mixed-income rental
units, 64 affordable rental housing units for the
elderly, a 250-unit market rate rental retirement
15
community, and 200 market rate condominium units;
additional small-scale commercial ventures, which may be
included in some of the new residential construction; and
construction or rehabilitation of affordable rental
housing (90 units) and affordable individually owned
houses (50 units). Hurricane Katrina generally spared the
existing housing units, and they are currently habitable.
HANO indicates that it plans to finish the project, but
it has not determined how Hurricane Katrina's impact
might change the its prior plans.
The plaintiffs in the present case challenge far more
than the building demolition called for by the project.
Despite the completion of the Wal-Mart complex and other
edifices, significant projected construction and
renovation remain unfinished. Plaintiffs’ requested
relief - declaratory judgments invalidating the existing
MOA as well as the environmental assessment and FONSI,
plus injunctions halting construction and requiring
preparation of a proper and legal MOA and environmental
assessment - could, if granted, eliminate or alleviate a
16
multitude of their expressed environmental and historical
preservation concerns. Accordingly, we conclude that the
case is not moot and proceed to consider the merits of
the plaintiffs’ claims. Cf. Benavides v. Housing
Authority of City of San Antonio, Tex., 238 F.3d 667, 670
(5th Cir. 2001) (holding a demolition project to be moot
where demolition was only 55% complete, but had
progressed to the point where units were no longer
habitable); Bayou Liberty Ass’n v. U.S. Army Corps, 217
F.3d 393 (5th Cir. 2000) (holding the case to be moot
where construction of the project had been entirely
completed); Vieux Carre Property Owners, Residents, &
Assoc., Inc. v. Brown, 948 F.2d 1436, 1446 (5th Cir.
1991) (“as long as...[the agency] has the ability to
require changes that could conceivably mitigate any
adverse impact the project might have...[the project]
remains a federal undertaking and NHPA review is
required.”). None of the parties to this suit contend
that Hurricane Katrina’s effects have rendered the
project moot.
17
II.
An agency's decision not to prepare an EIS can be set
aside only upon a showing that it was “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); see also
Marsh v. Or. Natural Res. Council, 490 U.S. 360, 375-376
(1989); Kleppe v. Sierra Club, 427 U.S. 390, 412 (1976).
Here, HUD based its FONSI upon the analysis contained
within its EA; respondents argue that the issuance of the
FONSI was arbitrary and capricious because the EA's
analysis was flawed for numerous reasons that we address
individually later in this opinion.1
1
On April 11, 2003, in ruling on cross-motions for
summary judgment, the district court concluded that
HUD’s environmental assessment/FONSI and MOA were not
“arbitrary and/or capricious in any respect.”
Plaintiffs contend that the district court erred in
this ruling: that HUD arbitrarily and capriciously
concluded that the project would result in no
significant environmental impact.
Our review of the district court’s ruling on the
cross-motions for summary judgment is de novo,
“applying the same standard on appeal that is applied
by the district court.” Terrebonne Parish Sch. Bd. v.
Mobil Oil Corp., 310 F.3d 870, 877 (5th Cir. 2002)
(citing Auguster v. Vermilion Parish Sch. Bd., 249 F.3d
18Under NEPA, an agency is required to provide an EIS
only if it will be undertaking a “major Federal
actio[n],” which “significantly affect[s] the quality of
the human environment.” 42 U.S.C. § 4332(2)(C). Under
applicable CEQ regulations, a “[m]ajor Federal action” is
defined to “includ[e] actions with effects that may be
major and which are potentially subject to Federal
control and responsibility.” 40 C.F.R. § 1508.18.
“Effects” are defined to “include: (a) [d]irect effects,
which are caused by the action and occur at the same time
and place,” and “(b) [i]ndirect effects, which are caused
by the action and are later in time or farther removed in
distance, but are still reasonably foreseeable.” Id. §
1508.8. It is undisputed that HUD’s funding of the
project is a major federal action. Thus, we must
determine whether HUD acted reasonably and in accordance
with law in deciding, based on its EA and FONSI, that its
action had no direct or indirect effects that
400, 401 (5th Cir. 2001)). Here, like the district
court, we apply the “arbitrary and capricious” standard
described above.
19
significantly affected the quality of the human
environment. See Pub. Citizen, 541 U.S. at 763-4.
Plaintiffs first argue that HUD’s action in funding
the project was not in accord with law in two respects:
they assert that federal regulations automatically
required HUD to produce an EIS based on the increased
level of noise and the sheer number of dwellings affected
by the project. In their remaining arguments, plaintiffs
contend that HUD acted arbitrarily and capriciously or
unreasonably because the evidence available to HUD
mandated preparation of an EIS.
A.
Plaintiffs contend that CEQ regulations required HUD
to prepare an EIS under the facts established by its own
EA, and that HUD’s major federal action of funding the
project before preparing an EIS was not in accordance
with law. Contrary to plaintiffs’ argument, however,
HUD’s interpretation and application of the regulations
as permitting it to proceed without an EIS in this case
20
were not arbitrary, capricious, or clearly contrary to
law. When the interpretation and application of
regulations by an agency and its opponents are not
arbitrary and capricious nor clearly contrary to law we
are required by NEPA and the Supreme Court’s decisions to
accept the agency’s decision as being in accordance with
law. See, e.g., N. Ind. Pub. Serv. Co. v. Porter County
Chapter of Izaak Walton League of America, Inc., 423 U.S.
12, 15 (1975)).
HUD regulation 24 C.F.R. §§ 51.104(b)(2) requires the
agency to prepare an EIS prior to approving “projects
with unacceptable noise exposure[,]” that is, where sound
levels reach 75 decibels or greater, based on a 24-hour
weighted average of sound levels. See 24 C.F.R. §§
51.104(b)(2).2 In its FONSI, HUD stated that the project
is in compliance with noise abatement requirements,
noting that the sound measurements fall within
2
HUD regulations define “Acceptable” noise levels
as “not exceeding 65 dB[,]” “Normally Unacceptable”
levels as “[a]bove 65 dB but not exceeding 75 dB[,]”
and “Unacceptable” levels as “[a]bove 75 dB.” 24 C.F.R.
§ 51.103, table.
21
“acceptable” levels. In doing so, HUD relied on a
September 2002 noise survey included in its EA which
indicates that the noise exposure (the average day-night
sound level at the site) reaches 60 decibels, within the
“acceptable” range. Review of that study indicates that
it used measurements taken over a 24-hour period within
a carefully described area, and included an assessment of
the possible effects of future increased traffic and the
construction of retail buildings. Plaintiffs contend that
in conducting the study HUD did not comply with its own
September 1991 Noise Guidebook.
The fact that HUD’s submitted study did not
completely comply with the requirements of its Noise
Guidebook is not, of itself, sufficient to show that its
reliance on the study was not in accordance with law or
arbitrary and capricious. In Lyng v. Payne, 476 U.S. 926,
937 (1986), the Supreme Court held that “not all agency
publications are of binding force” - in other words, the
guidelines in question must be “the kind of agency law
the violation of which is remediable at all.” Generally,
22
to be legally binding on an agency, its own publications
must have been “promulgated pursuant to a specific
statutory grant of authority and in conformance with the
procedural requirements imposed by Congress.” See, e.g.,
Schweiker v. Hansen, 450 U.S. 785, 789-90, (holding
Social Security Administration Claims Manual is not
binding agency rule); Fano v. O'Neill, 806 F.2d 1262,
1264 (5th Cir. 1987) (holding INS Operations Instructions
not binding because “they are not an exercise of
delegated legislative power and do not purport to be
anything other than internal house-keeping measures.”);
W. Radio Servs. Co. v. Espy, 79 F.3d 896, 900-01 (9th
Cir. 1996) (holding that the court reviews noncompliance
with an agency “pronouncement” only if it “actually has
the force and effect of law.”); Gatter v. Nimmo, 672 F.2d
343, 347 (3d Cir. 1982) (holding Veteran's Administration
publications not binding because they were not
promulgated under the APA’s rulemaking requirements);
Fed. Land Bank in Receivership v. Fed. Intermediate
Credit Bank, 727 F.Supp. 1055, 1058 (D.Miss. 1989)
23
(holding that directive not promulgated according to APA
procedure lacks force and effect of law); see also Davis
Mountains, 116 Fed. Appx. 3, 9-10 (5th Cir. 2004)
(summarizing above case law and holding as result that
the Air Force's Handbook is not binding as it was not
promulgated according to the APA's procedural
requirements). Where agency publications have not been so
promulgated, the agency’s decision to analyze impacts by
other methods is not an automatic violation of the law.
As such, it is subject to review under the normal
“arbitrary and capricious standard” used to review agency
action under the APA. Davis Mountains, 116 Fed. Appx. at
9-10 (“Thus the Air Force retained discretion to analyze
impacts on livestock by methods other than those
contained in the Handbook, and we must address the
adequacy of the Air Force's chosen method according to
the arbitrary and capricious standard”); see also
Communities Against Runway Expansion, Inc. (CARE) v.
F.A.A., 355 F.3d 678, 688 (D.C. Cir. 2004) (holding that
even though an executive order mandating agency
24
consideration of environmental justice concerns created
no private right of action for an agency’s failure to
comply with that mandate, the court would review the
agency’s action as an exercise of discretion under the
APA and NEPA). Here, plaintiffs neither argue nor offer
evidence that HUD’s guidelines were promulgated under the
Administrative Procedure Act’s procedural requirements.
Plaintiffs’s first argument therefore fails: HUD has not
acted contrary to law by using methodology different from
that contained in the Guidebook.
Plaintiffs also argue that HUD “obviously skewed [the
study] to measure disproportionally during the quietest
times of the day and bring the overall average decibel
level down.” Similarly, they appear to assert that HUD
was arbitrary and capricious in not relying on the
results of an extra-record noise survey completed in
April 2001 by Citywide. They claim that HUD’s chosen
methodology improperly and purposely skews the survey
results by including a measurement at noon, but no
measurements between 7:30 AM and 12:06 PM nor between
25
11:46 AM and 2 PM. They offer conclusory allegations that
HUD’s sampling survey produces distorted results and was
conducted in that manner for the express purpose of
avoiding the conclusion suggested by the extra-record
Citywide survey.
At best, this argument reflects only a disagreement
over whether it was arbitrary and capricious for HUD to
base its decision on the study documented in the record
rather than extra-record evidence. There is simply no
evidence of bad or improper motive by HUD in this
instance. Nor do plaintiffs provide further evidence
showing either that reliance on such a methodology is
otherwise arbitrary and capricious or that HUD’s
methodology was actually flawed, rather than simply
different from plaintiff’s preferred method. In fact, the
Citywide study on which plaintiffs would urge reliance
does not comply with HUD regulations, which the agency
must obey, let alone the Noise Guidebook's non-binding
requirements.3 The Citywide survey hardly amounts to
3
As an example, the proffered extra-record survey
took its measurements over a 12-hour period; 24 C.F.R.
26
persuasive evidence of noise levels that require an EIS
under the HUD regulations. We may not, therefore, say
that HUD arbitrarily and capriciously relied on the
study’s results in determining that the noise levels did
not trigger the automatic environmental impact statement
requirement.
Plaintiffs next argue that HUD’s funding of the
project without preparing an EISs was contrary to a CEQ
regulation mandating an EIS when a project will “remove,
demolish, convert, or substantially rehabilitate 2,500 or
more existing housing units...or...result in the
construction or installation of 2,500 or more housing
units.” 24 C.F.R. § 50.42(b)(2). Plaintiffs argue that
this regulatory provision must be read expansively and
cumulatively: that is, that each demolition of an old
housing unit and each construction of a new housing unit
should be counted cumulatively toward the 2,500 limit or
trigger. Thus plaintiffs contend that, if a project
proposes to destroy 1,250 old units and construct new
§ 51.103(a), by contrast, requires measurements over a
24-hour period.
27
1,250 units in their place, an EIS is required because
this would involve the destruction or construction of
2,500 units. HUD reads the regulation as disjunctively
establishing two categories: demolition, conversion or
rehabilitation of the old vis-à-vis construction or
installation of the new; as applied to this case, HUD
reasons that, since only 1,510 units are to be demolished
or rehabilitated and only 1,282 are to be newly
constructed or installed, the project does not reach the
2,500 unit trigger in respect to either category.
Plaintiffs effectively concede this point. They do
not argue or attempt to show that HUD’s interpretation is
arbitrary and capricious. Instead, they contend, without
explanation, that we should not defer to the agency’s
reasonable interpretation as precedent would require, but
that we ought to use our own judgment to declare that
their interpretation of the regulation will be followed
because it is simply the best. Even if we were to agree,
however, we do not have the plenary authority to
interpret the regulation in this kind of case as we
28
personally deem best. “In situations in which ‘the
meaning of [regulatory] language is not free from doubt,’
the reviewing court should give effect to the agency's
interpretation so long as it is ‘reasonable,’ that is, so
long as the interpretation ‘sensibly conforms to the
purpose and wording of the regulations.’” Martin v.
Occupational Safety & Health Review Comm’n, 499 U.S. 144,
150-1 (1991) (quoting Ehlert v. United States, 402 U.S.
99, 105 (1971) and N. Ind. Pub. Serv. Co. v. Porter
County Chapter of Izaak Walton League of America, Inc.,
423 U.S. 12, 15 (1975)). Because the plaintiffs
effectively concede that HUD’s interpretation of the
regulation is not unreasonable, we conclude that the
regulation does not require an EIS in this case and that
HUD did not fail to act in accordance with law in this
respect.
B.
The theme of plaintiffs’ remaining NEPA arguments is
that HUD acted arbitrarily, capriciously, or in abuse of
29
its discretion by failing to prepare an EIS although it
knew or should have known that the reasonably foreseeable
effects of the project would significantly affect the
quality of the human environment in many different ways.
We address each argument under a separate heading. Before
we begin, we pause to reiterate that in attacking a
decision not to prepare an EIS, “more than an allegation
of deficiencies is necessary; the plaintiffs must prove
the essential allegations of their complaint by a
preponderance of the evidence.” La. Wildlife Fed’n, Inc.
v. York, 761 F.2d 1044, 1055 (5th Cir. 1985) (Rubin, J.,
dissenting). “It is the burden of the plaintiffs to
adduce evidence, not merely to make allegations or to
rest on assumptions, establishing that the Corps was
[arbitrary and capricious] in reaching the conclusion it
did[.]” Id.
1. Environmental Justice
Executive Order 12898 instructs agencies to consider
the environmental justice impacts of their actions. Exec.
30
Order No. 12898, 59 Fed. Reg. 7629 § 6-609 (1994). The
Order does not, however, create a private right of
action. Thus, we review the agency’s consideration of
environmental justice issues under the APA’s deferential
“arbitrary and capricious” standard. See, e.g.,
Communities Against Runway Expansion, Inc. (CARE) v.
F.A.A., 355 F.3d 678, 688 (D.C. Cir. 2004). Leaving aside
legalisms, we see in this record no administrative
insensitivity to racial or economic inequality. Instead,
we see a project that HUD perceived reasonably as a
community effort, endorsed initially by some who now
oppose it, to renovate a deteriorating public housing
project for the ultimate and enduring benefit of the
community.
HUD’s environmental justice study, completed in
September 2002, looked at the area in which the project
is being built and determined that those who return to
live in the “new” St. Thomas will benefit from safer,
more sanitary living conditions and an improved economic
environment. It considers the problems of displacement,
31
including the fact that residents still living in the
project would be eligible for relocation under the
Uniform Relocation Act. Furthermore, HUD’s study
reflected that St. Thomas residents had numerous
complaints about the housing project and were at risk
from pest infestations, asbestos, drug paraphernalia,
lead exposure, and raw sewage. It notes, based on the
comments received from then-residents, that many had
complaints about the St. Thomas development and while
some would stay there if conditions and amenities were
improved, others would prefer to become home owners
outside of the project. Over 200 lawsuits had been filed
over lead exposure in the housing units, and that 99% of
residents belonged to a minority group.
The record also indicates that HUD received and
responded to comments made at a public meeting by Mr.
Brod Bagert, whose master’s thesis had been highly
critical of the HOPE IV program, and of the broader
“market revitalization” approach to improving urban
areas. His comments and his study use the St. Thomas
32
project as an example to attack that particular theory of
urban planning. HUD responded to Mr. Bagert’s comments,
indicating that while it understood the basis of his
criticism of the HOPE IV approach to urban
revitalization, the HOPE IV approach is clearly supported
by Congressional mandate.
Plaintiffs offer Mr. Bagert’s comments, and evidence
of problems with residential relocations under the
Uniform Relocation Act, for the proposition that HUD’s
evaluation of the project’s impacts is entirely
contradicted by the evidence.4 The record in front of us
is hardly so clear cut, and certainly reveals that HUD
gave attention to the issues plaintiffs raise, for all
they disagree with the conclusions. Beyond their
allegations and Mr. Bagert’s comments, which HUD clearly
4
Mr. Bagert’s written report is outside the
record. The district court denied plaintiffs’s request
to add it as a supplement to the administrative record.
Plaintiffs challenge that ruling by the district
court’s decision only in response to its ruling on
their Rule 59 motion, discussed infra. For the purposes
of the immediate analysis, we are confined to the
administrative record, which includes only Mr. Bagert’s
oral comments at a public meeting.
33
took under consideration, plaintiffs offer no evidence
suggesting that the environmental justice study was
arbitrary or capricious in its choice of methodology. We
cannot, therefore, say that they have met their burden of
showing that HUD’s consideration of environmental justice
concerns was arbitrary and capricious.
2. Zoning
The New Orleans City Council approved zoning changes
for the project in November 2001 (for the retail portion)
and in April 2002 (for the residential portion). In
addition, implementing the St. Thomas revitalization
project required the creation of a Tax Increment
Financing District, which helps fund the project, and
which was highly controversial with regard to its
possible negative economic effect on local businesses
near the project. In preparing the environmental
assessment, HUD indicated only that the project was in
compliance with local zoning ordinances by the time of
the assessment, without indicating that such compliance
34
actually required changing the local zoning laws. In
addition, when describing the two twelve-story
residential buildings and the 200,000 square-foot Super
Wal-Mart retail center, HUD indicated on the
environmental assessment form that the project was
compatible with its surroundings in terms of land use,
building type, height, bulk and mass, and density.
Plaintiffs challenge HUD’s conclusion that local
zoning changes implemented for the project do not create
a significant environmental impact. First, plaintiffs
assert that “[l]ocal zoning changes significantly impact
the human environment[;]” but offer little support for
their arguments. They offer Sierra Club v. Marsh, 769
F.2d 868, 872 (1st Cir. 1985), for the proposition that
an EIS is automatically required where the project
radically alters existing land use, but we find that case
inapposite. There, the court held that the Federal
Highway Administration and Army Corps of Engineers could
not support its FONSI by relying on land use regulations
to safeguard the land because the project would radically
35
alter land use. Id. Here, although HUD does cite to its
compliance with local zoning ordinances as support for
its FONSI, we have no change so radical as to be akin to
replacing an undeveloped wooded island with a marine
terminal and industrial complex, as was proposed in
Marsh. Thus Marsh offers us no such legal rule, nor do
plaintiffs offer us support for drawing an analogy on the
facts. The project in the case at bar, particularly the
high-rise structures and the Wal-Mart center, is located
on the Tchoupitoulas industrial corridor, and the
remaining residential portion borders the nearby
residential areas. Without further evidence supporting
their allegations, we may not hold that HUD was arbitrary
and capricious in determining that the zoning change of
itself implied that the project would have a significant
impact on the environment.
Second, plaintiffs assert that the implementation of
the Tax Increment Financing District was a highly
controversial change, such that it requires an
environmental impact statement under the regulations set
36
out by the Council on Environmental Quality. See 40
C.F.R. § 1508.27(b) (identifying a project’s “highly
controversial” nature as a factor to consider in
evaluating the intensity of impacts). We have held that
these factors listed in the regulation “do not appear to
be categorical rules that determine by themselves whether
an impact is significant.” Spiller, 352 F.3d at 243. "As
such, all that would have to be shown is that all the
factors were in some way addressed and evaluated; whether
this was done in factor-by-factor fashion is irrelevant."
Id. Furthermore, “controversial” is usually taken to mean
more than some public opposition to a particular use -
rather it requires “a substantial dispute...as to the
size, nature, or effect of the major federal action.” See
Center for Biological Diversity v. U.S. Fish & Wildlife
Service, 202 F. Supp 2d 594, 657-8 (W.D.Tex. 2002)
(summarizing existing case law with regard to what
constitutes a “substantial dispute” such that an
environmental impact statement is required). Reviewing
the record, the portions to which plaintiffs cite clearly
37
reflect public opposition from local businesses to using
the retail space to house a Wal-Mart, but do not attack
the broader nature or effect of the project as a whole.
The record clearly reflects that HUD addressed and
evaluated this factor and plaintiffs do not adduce
evidence suggesting that its evaluation was insufficient,
but simply assert disagreement with the conclusion.
Accordingly, they have not met their burden to show that
HUD acted arbitrarily or capriciously.
3. Businesses Occupying Historic Buildings
CEQ regulations require agencies to discuss economic
factors where interrelated with NEPA environmental
considerations; such factors include the impact on
"uniqueness of historic resources" and "adverse impacts
on National Register properties"). See 40 C.F.R. §§
1508.14 (requiring examination of interrelated effects),
40 C.F.R. § 1508.27 (list of NEPA intensity factors
contributing to the determination of "significant impact"
on "uniqueness of historic resources" and "adverse
38
impacts on National Register properties"). As a result,
HUD built into its EA an assessment of the project’s
impact on businesses occupying historic buildings.5
In reaching its FONSI on the issue, HUD relied on a
broad range of information, including opinion polls,
newspaper articles, and other studies - notably, the
Lambert Advisory Report. This last indicates that Wal-
Mart will reduce some sales from local businesses, but
also suggests that Wal-Mart may actually help the area
retain some revenue which had previously left the city in
favor of suburban retail. Other documents in the record
are equally clear in identifying both the increase in
competition posed by Wal-Mart as well as its potential
economic benefits to existing retailers. HUD’s
administrative record also includes an inventory of area
businesses (the “Blick inventory”), which is an
5
HUD attempts to argue that even though it did
consider this issue, NEPA does not require such a
examination of “purely economic” impacts. The merit of
this argument is dubious, since, as plaintiffs note,
the loss of businesses in the district relates to the
amount of money available to maintain historic
buildings.
39
admittedly “quick review” and contains errors,
particularly in its characterization of what goods or
services varying businesses provide.
Plaintiffs argue that HUD’s reliance on the Blick
inventory as “sole support” for its statement will not
suffice in order to support a FONSI. Although their
argument might have carried weight if the Blick inventory
was HUD’s sole source of information, HUD in fact
considered information from a wide range of sources,
which led it to conclude that although the Wal-Mart will
bring increased competition to the area, adding the
business to the area was also likely to result in an
increase in economic opportunities for local retailers.
Furthermore, plaintiffs simply misstate the record when
they assert that HUD entirely ignored the Lambert report.
Finally, plaintiffs proffer an alternative, extra-record
inventory of local businesses. Beyond simply restating
that study’s conclusions, which are more favorable to
their desired outcome, plaintiffs offer no evidence that
would allow us to conclude that its methodology is any
40
more reliable or its results any more robust than the
studies HUD included in the administrative record. As a
result, we cannot say that plaintiffs have met their
burden in showing that HUD acted arbitrarily or
capriciously.
4. Toxic and Hazardous Waste
HUD regulations do not permit that agency to approve
projects that are not located an acceptable distance from
“hazards” unless appropriate mitigation measures are
taken. 24 C.F.R § 15.202(a). “Hazards” are defined to
include any “any stationary container which stores,
handles or processes hazardous substances of an explosive
or fire prone nature.” 24 C.F.R. § 15.201. Accordingly,
HUD’s EA included an investigation into whether any such
hazards threatened the St. Thomas project as a part of
the process. It conducted two Phase I assessments, which
identified certain toxic and hazardous waste issues,
including both an underground storage tank containing
petroleum products and a fuel pump, both located on the
41
Wal-Mart site. A later Phase II assessment recommended
methods for remediation, and in mitigation HUD required
Historic Renovation, the developer, to set up an escrow
account to ensure remediation. The environmental
assessment openly discusses the presence of these hazards
in the comments to the section on “toxic chemicals and
radioactive materials.” Those remarks clearly reflect the
need for a Phase II assessment, the presence of an
underground storage tank, and the remediation
requirements. HUD’s actions comply with their
regulations, and are not arbitrary or capricious in this
respect.
Plaintiffs accuse HUD of violating its duty to
disclose the existence of an underground storage tank by
failing to disclose it in the section of the
environmental assessment meant to identify “hazardous
industrial operations”. Their brief charges that HUD
purposely committed deception by not listing the hazards
in that section, and did so with the sole purpose of
avoiding the preparation of an EIS. They offer no
42
evidence that HUD’s required remediation is insufficient
to warrant a FONSI, nor any evidence to support their
claims of bad faith. Nor do they offer any legal argument
that the hazards must be listed in that specific section
of the form, rather than in the location HUD placed it.
In fact, the record reflects that the EA clearly reveals
that the hazards are present and indicates the
remediation planned to reduce the effects of those
hazards. As a result, plaintiffs have not made any
showing that HUD engaged in purposeful concealment or
arbitrarily relied on the remediation measures in
reaching its FONSI.
5. Lead Contamination
24 C.F.R. § 50.3(i)(1) requires that HUD must ensure
its projects are free of “hazardous materials,
contamination, toxic chemicals and gasses, and
radioactive substances” that would "affect the health and
safety of occupants or conflict with with the intended
utilization of the property.” In doing so, HUD must pay
43
"particular attention" to industrial sites and other
areas containing hazardous waste, using "current
techniques by current professionals." 24 C.F.R. §§
50.3(I)(2), (3). As a part of its EA process, therefore,
HUD considered whether the project area had significant
lead contamination. We hold that the agency was not
arbitrary or capricious in determining that the
environmental impact from lead in the soil was not
significant.
The agency hired a contractor, PSI, to carry out the
Phase II environmental assessment already mentioned
above; as a part of that work, PSI took various soil
samples. The contractor was particularly concerned with
lead in the soil coming from underground storage tanks
and old dry-cleaning facilities. When it tested the
samples, PSI found that the levels of lead in the soil
were below the health-based limit set by the Louisiana
Department of Environmental Quality. Based on those
results, HUD determined that the environmental impact
from lead in the soil was not significant.
44
HUD later received public comments on its separate
environmental justice study from a soil expert, in
response to a statement in that study that surface lead
contamination in the project was not a problem. The
expert stated that his soil surveys for lead
contamination in New Orleans found that the St. Thomas
community was one of “the most contaminated areas in the
city” and “recommended concerted effort” to address the
problem. On receipt of those comments, and in light of
the PSI results, HUD asked C-K Associates, the contractor
that had prepared the environmental justice study, about
the effect of those remarks on the EA. C-K Associates
responded by saying that although the expert was well-
respected in his field, his methodology did not follow
the standards HUD required for evaluating lead levels.
Given that the PSI tests had shown lead levels below the
permissible maximum and that the outside expert’s methods
did not meet agency requirements, HUD maintained its
conclusion that lead contamination at the site was not
significant for the purposes of the EA.
45
Plaintiffs disagree mightily with PSI’s technique and
clearly prefer the outside expert’s methodology, urging
that HUD arbitrarily and capriciously relied on PSI’s
unsound techniques. The mere fact of HUD’s reliance on
the PSI study is not arbitrary and capricious. We have
held that “[an] agency is not required to ‘do it alone’”
in reviewing the environmental impact of projects, and
may employ outside consultants in preparing an
environmental assessment. Save Our Wetlands, Inc. v.
Sands, 711 F.2d 634, 642 (5th Cir. 1983). “The intent of
the controlling regulations is that “acceptable work
[completed by parties outside the agency] not be
redone[.]” Id. (citing 40 C.F.R. § 1506.5(a)).
Furthermore, "an agency must have discretion to rely on
the reasonable opinions of its own qualified experts,
even if, as an original matter, a court might find
contrary views more persuasive." Marsh v. Oregon Natural
Res. Council, 490 U.S. 360, 378 (1989); see also,
Mississippi River Basin Alliance v. Westphal, 230 F.3d
170, 175 (5th Cir. 2000); Sabine River, 951 F.2d 669, 678
46
(5th Cir. 1992). An agency may not, however, "reflexively
rubber stamp" information prepared by others. Save Our
Wetlands, Inc. v. Sands, 711 F.2d 634, 643 (5th Cir.
1983) (citing Sierra Club v. Lynn, 502 F.2d 43, 58-59
(5th Cir.1974)); Sierra Club v. Sigler, 695 F.2d 957 (5th
Cir. 1983)).
On this record, we find that plaintiffs have not
shown that either HUD’s reliance on PSI’s study or PSI’s
methodology were arbitrary and capricious. HUD’s
administrative record, however, clearly reflects that
when public comment called possible flaws in PSI’s
methods or results, HUD inquired into the problem and, on
consideration of the evidence, chose to continue to rely
on PSI for sound reasons. In support, plaintiffs can only
point to the results of the outside study and the soil
expert's comments. As C-K Associates noted, however, HUD
could not rely on plaintiffs' preferred method without
violating its own standards. Furthermore, the soil
expert’s comments state only that the project has the
highest lead contamination in New Orleans, and do not
47
contradict PSI’s findings that the lead-levels are within
of health-based standards. Beyond their allegations and
the above comparisons, plaintiffs offer no concrete
evidence to support their arguments. Accordingly, we
conclude that HUD was neither arbitrary nor capricious in
relying on PSI’s conclusions in reaching its FONSI.
6. Traffic
When studying the project’s potential effects, HUD
looked at the possible impacts of increased traffic. A
September 2001 traffic study examined streets and major
intersections in the project - locations where it thought
any increase would likely cause problems. A second study,
carried out in December 2002, looked at the effect
traffic increases would have in areas outside of that
already covered by the original study. HUD also carried
out noise and vibration studies, and included traffic as
a factor in its environmental site assessments,
environmental justice study, and mitigation requirements.
The New Orleans Department of Public Works and the
48
Regional Planning Commission also studied traffic impacts
and concluded that the effects would not be significant.
On the record before us, which includes all of the above,
we hold that the agency did not arbitrarily or
capriciously reach its FONSI with regard to traffic.
Plaintiffs attempt to whittle away at HUD’s support
for its findings. They assert that HUD relies solely on
the December 2002 study to reach its conclusions. The
2002 study, they allege, covers only outlying areas and
therefore cannot, alone, support HUD’s determination.
Their characterization of the record is simply
inaccurate: as recounted above, HUD relied on far more
than just that study, and in fact made certain to
incorporate traffic effects into its study of other
potential impacts as well. Second, plaintiffs urge that
the bare fact that HUD predicts a 67% increase in traffic
should suffice for any impacts of that traffic to be
automatically “significant” for NEPA purposes. will have
per se significant effect. They offer us no legal
authority for the proposition that a predicted increase
49
should be considered de facto significant. Moreover,
while plaintiffs allege a long list negative effects on
health, safety, noise, pollution, vibration, and historic
properties, they offer us no evidence as to what those
effects would be, why they would be significant, or how
HUD has failed to investigate them. In addition, the
record described above belies the assertion that these
effects have gone unstudied in HUD’s EA. As a result, we
may not say that HUD’s decision was arbitrary and
capricious in this regard.
7. Cumulative Impacts
Plaintiffs argue, in effect, that HUD should be
charged with constructive knowledge of significant
foreseeable cumulative effects upon human environment
that were discoverable upon reasonable investigation.
They beg the question, however, by assuming without
demonstrating with concrete supporting evidence that the
significant effects they allege were reasonably
foreseeable at the time of HUD’s EA/FONSI.
50
The plaintiffs assume that it was reasonably
foreseeable to HUD that the project would cause two types
of significant environmental effects: 1) future
unspecified impacts caused by the influx of additional
national retailers attracted by Walmart’s presence and 2)
future impacts of increased traffic from the above
combined with future impacts by three other planned
expansions in the area.6 Although the plaintiffs have not
established either the foreseeability or the significance
of these effects, we discuss them briefly:
First, NEPA requires HUD to study a project’s
reasonably foreseeable effects. Plaintiffs’ sole
allegation is that HUD failed to study the detrimental
effects of the eventual arrival of other, unknown
national retailers into the area, following Wal-Mart's
wake. They offer nothing concrete to suggest that such
changes will likely occur or are planned for in this
particular project area, but rely on broad statistical
6
Namely, the future expansion of the Morial
Convention Center, the expanded terminal activities at
the Port of New Orleans, and the development of the
Saulet Apartment complex.
51
data discussing general national trends. However,
reasonable foreseeability under NEPA “does not include
[such] ‘highly speculative harms[.]’” City of Shoreacres
v. Waterworth, 420 F.3d 440, 453 (citing Methow Valley
Citizens Council, 490 U.S. at 356). As a result,
plaintiffs’ arguments fail.
Second, after studying the anticipated effects of
increased traffic, HUD decided that the project would not
cause traffic levels that would significantly affect
human environment. In reaching its decision, HUD relied
on two traffic studies performed by a contractor in
December 2000 and September 2001. The latter was
performed specifically to incorporate the effects of
known plans for other development projects in the area.
HUD relied on the traffic studies’ projection of traffic
conditions subsequent to completion of the St. Thomas
revitalization project and the three other planned
expansions. The studies indicated that traffic levels
would remain well below capacity. HUD’s reliance on those
results was not arbitrary, capricious or unlawful, and
52
plaintiffs’ argument to the contrary lacks merit.
In support of their position, plaintiffs cite to
inconsistencies in background traffic measurements;
noting that the September 2001 measurement for Jackson
Avenue is lower by 3,600 cars than the December
measurement, and arguing that the September 2001
measurement is purposely skewed in order to support the
FONSI. First, plaintiffs provide nothing but conclusory
allegations to support their claims of bad faith. Second,
we note that HUD’s findings relied on a separate set of
measurements, different from the challenged background
traffic measurements, that specifically reflect the
potential road conditions after the completion of the St.
Thomas project and the four other planned activities.
Furthermore, we note that even if the higher, December
2001 measurement for Jackson Avenue is taken as correct,
the street is still predicted to operate at some 30,000
cars below capacity. As a result, we cannot say, on this
record, that plaintiffs have adequately supported their
allegations of significant foreseeable cumulative effects
53
on human environment due to increased traffic caused by
the project.
8. Mitigation
In reaching its FONSI, HUD relied in part on the
mitigation requirements contained in the MOA developed as
a part of required NHPA planning. On examination, we find
that HUD did not rely on them arbitrarily or
capriciously. The MOA’s requirements were meant to
alleviate adverse impacts on historic properties; many of
its mitigation requirements focused on reducing the
adverse effects on increased traffic on those properties.
The measures are extensive, including “design review of
new construction, rehabilitation of historic buildings,
use of Belgian blocks to slow traffic at multiple
intersections, and restriction of the entrance of truck
traffic to Wal-Mart to Tchoupitoulas and Josephine
Streets[.]” The MOA also requires the signatories to the
MOA to ask the City to convene a traffic task force, seek
funding for improvements to Jackson Avenue, and identify
54
grants for local retailers. Furthermore, the MOA binds
the Housing Authority of New Orleans and HRI to its
terms. Any attempt to change it requires consultation
with and approval by all signatories, including federal
and state agencies set up to protect historic areas. To
reiterate, HUD is bound to adhere to the MOA’s
requirements, and may not relax or abandon them without
the express authorization of all parties.
Plaintiffs argue that the above requirements will not
provide the predicted mitigation, and that HUD’s reliance
on them is arbitrary and capricious. Plaintiffs
characterize the mitigation as requiring merely letter-
writing, mild research, and limited consultation.
Furthermore, plaintiffs argue that the MOA has no teeth,
as it can be changed at any time. Again, plaintiffs
assume without demonstrating that such measures of
mitigation are inherently unreliable and that an agency
cannot reasonably base its decision to forgo an EIS, in
part, upon them. The record before us, however, does not
support their allegations. They have not, therefore,
55
shown that HUD relied on those mitigation requirements
arbitrarily or capriciously.
9. Evaluation of Project Costs and Benefits
CEQ regulations state that “[a] significant effect
may exist even if the Federal agency believes that on
balance the effect will be beneficial.” 40 C.F.R. §
1508.7(b)(1). Plaintiffs argue that HUD is required to
produce an EIS even though the project has no significant
negative environmental effects, so long as it has
significant positive environmental effects. This court
has rhetorically considered the question, but has not
arrived at an answer. Hiram Clarke Civic Club, Inc. v.
Lynn, 476 F.2d 421, 426-7 (5th Cir. 1973) (disavowed on
other grounds). We need not do so here, as HUD has not
asserted nor have plaintiffs offered evidence of a
significant positive environmental impact; HUD only
indicates that when the overall benefits of the project
are weighed against the temporary inconveniences of
construction and any “partial long term market
56
disruption[,]” the St. Thomas project “provides a very
positive net benefit to the community.” Moreover, the
other case in this circuit touching on the question can
be distinguished on the grounds that it determines only
whether an EIS need discuss positive benefits.
Environmental Defense Fund v. Marsh, 651 F.2d 983, 993
(5th Cir. 1981). Without more, we may not find HUD
arbitrary and capricious in this regard. Plaintiffs also
urge that HUD improperly subtracted the project's
positive environmental impacts from its negative
environmental impacts, so that once significant negative
effects became insignificant. The record before us is
clear, however, that HUD has not engaged in any such
weighing. Rather, it evaluated the potential negative
effects and determined that they are not significant,
either individually or cumulatively. Again, without
further support, we may not say that HUD's assessment was
arbitrary and capricious.
10. Consideration of Context and Intensity
57
Council on Environmental Quality regulations require
an agency to consider both “context” and “intensity” when
considering whether an effect is “significant”. 40 C.F.R.
§ 1508.27 (defining “significantly” as used in NEPA’s
statutory language). In considering context, an agency
must look at “the significance of an action must be
analyzed in several contexts such as society as a whole
(human, national), the affected region, the affected
interests, and the locality.” 40 C.F.R. § 1508.27(a).
When evaluating intensity, agencies should consider ten
areas, listed in 40 C.F.R. § 1508(b). This court has held
that “the factors listed in the regulation do not appear
to be categorical rules that determine by themselves
whether an impact is significant.” Spiller, 352 F.3d at
243. Rather, the regulation provides a list of “relevant
factors...[for] gauging whether an impact is
‘intense’[.]” Id. An agency must only show that each
factor was “in some way addressed and evaluated.” Id.
First, with regard to intensity, our discussions in
various sections above have repeatedly concluded that HUD
58
built in context consideration to its examination of a
wide range of impacts, particularly with regard to
environmental justice, zoning, businesses occupying
historic properties, and traffic. In addition, those same
discussions touch on HUD’s consideration eight of the ten
factors that Council on Environmental Quality regulations
require agencies to consider regarding the intensity of
a project.7 Plaintiffs allege that their mere presence is
7
Namely, the following sections of 40 C.F.R. §
1508.27(b):
(1) Impacts that may be both beneficial and
adverse....
(2) The degree to which the proposed action
affects public health or safety.
(3) Unique characteristics of the geographic
area such as proximity to historic or cultural
resources, park lands, prime farmlands,
wetlands, wild and scenic rivers, or
ecologically critical areas.
(4) The degree to which the effects on the
quality of the human environment are likely to
be highly controversial.
(5) The degree to which the possible effects on
the human environment are highly uncertain or
involve unique or unknown risks.
(6) The degree to which the action may
establish a precedent for future actions with
significant effects or represents a decision in
principle about a future consideration
(7) Whether the action is related to other
actions with individually insignificant but
cumulatively significant impacts.
59
reason enough to require an environmental impact
statement. As support, plaintiffs offer arguments that
reiterate those discussed in the sections above. As
noted, the listed factors do not constitute categorical
rules such that their presence or absence means an impact
is per se significant. See Spiller, 352 F.3d at 243 (5th
Cir. 2003). HUD must therefore show only that it
addressed and evaluated these factors, even if it did not
do so in a “factor-by-factor fashion” Id. We have
concluded, in the preceding subsections, that HUD has not
acted arbitrarily and capriciously in its evaluation of
the project’s context nor in its assessment of various
individual intensity factors. Similarly, we now conclude
that its overall evaluation of the project’s context and
intensity as a whole neither arbitrary or capricious.
Plaintiffs arguments on these points largely rehash
(8) The degree to which the action may
adversely affect districts, sites, highways,
structures, or objects listed in or eligible
for listing in the National Register of
Historic Places or may cause loss or
destruction of significant scientific,
cultural, or historical resources.
60
the arguments they raised individually above, and we will
not repeat our analysis of them here. Their only new
arguments relate to traffic and to potential adverse
effects on historic resources. They first argue is that
the impacts of traffic were sufficiently controversial
and uncertain that HUD was required to prepare an EIS.
See 40 C.F.R. § 1508.27(b)(4). They adduce no evidence on
this point, however, beyond their own opposition to the
project and the same assertions we disposed on in our
analysis supra, in discussing traffic impacts and
cumulative impacts. As they have not met their burden of
proof as to the broader controversy of traffic impacts,
and since we above held that HUD’s consideration of
traffic issues was neither arbitrary nor capricious, we
now do not find HUD’s behavior arbitrary and capricious
in this regard.
Second, plaintiffs argue that HUD did not properly
consider the project’s potential adverse effects on
historic properties, as required by 40 C.F.R. §
1508.27(b). These arguments are similar to those they
61
raise challenging HUD’s findings under the NHPA review
process, discussed infra, and we reject them for the same
reasons: HUD has prepared a valid Memorandum of Agreement
that the consulting parties have agreed adequately
resolves the project’s potential adverse effects on
historic properties, and was not arbitrary and capricious
in determining that no National Historic Landmarks were
adversely affected. See 16 U.S.C. § 470h-2(i) (stating
that the NHPA shall not "be construed to require the
preparation of an environmental impact statement where
such a statement would not otherwise be required" under
NEPA.”).
11. Conclusion
Plaintiffs have raised numerous objections to HUD’s
EA and FONSI, but plaintiffs have failed to demonstrate
in any instance that HUD acted arbitrarily, capriciously,
or contrary to the law in deciding that the project did
not cause significant effects to human environment.
62
III.
Four National Historic Landmarks are located in the
St. Thomas project’s Area of Potential Effects: the
Garden District, the Vieux Carre, St. Alphonsus Church,
and St. Mary’s Assumption Church. Other historic
properties are also located near and in the project site.
Under NHPA § 106, HUD is required to consider the effects
of its actions on these historic properties by the
National Historic Preservation Act. As under NEPA, an
agency’s actions under the NHPA are procedural, and our
review of its decisions is conducted under the
Administrative Procedure Act’s “arbitrary and capricious”
standard. Vieux Carre Property Owners, Residents, &
Assocs. v. Brown, 875 F.2d 453, 456 (5th Cir. 1989).8
A federal agency, the Advisory Council of Historic
8
These challenges arise out of the same
cross-motions for summary judgment as the NEPA claims
discussed supra. Plaintiffs contend that the district
court erred in ruling that HUD arbitrarily and
capriciously concluded that the project would result in
no adverse effects to historic properties. Again, we
review the district court de novo on this point. See
Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 310 F.3d
870, 877 (5th Cir. 2002) (citing Auguster v. Vermilion
Parish Sch. Bd., 249 F.3d 400, 401 (5th Cir. 2001)).
63
Preservation (“ACHP”) has promulgated regulations that
require federal agencies to examine whether a proposed
project “has the potential to cause effects on historic
properties.” 36 C.F.R. § 800.3(a). Where an agency
proposes a finding of no adverse effect, it indicates
that the project has no effect on any historic property
that "diminish[es] the integrity of the property's
location, design, setting, materials, workmanship,
feeling, or association." 36 C.F.R. § 800.5(b) (read in
conjunction with (a)(1)). Such a finding triggers a
“consulting party review”, described in 36 C.F.R. §
800.5(c).
If the agency finds that historic properties will
suffer adverse effects, the agency must consult with the
ACHP and the State Historic Preservation Officer (“SHPO”)
and other parties “to develop and evaluate alternatives
or modifications to the undertaking that could avoid,
minimize or mitigate adverse effects on historic
properties.” See 36 C.F.R. § 800.5(a) (requiring agencies
to assess adverse effects); 36 C.F.R. § 800.6(a)
64
(requiring consultation). If adverse effects are found,
and the agency, the SHPO, and the ACHP (plus any other
required parties) may agree on a method of resolving
those effects, to be recorded in a Memorandum of
Agreement that specifies the manner of resolution. 36
C.F.R. § 800.6(b)(1)(4).
As in respect to environmental effects under NEPA,
however, an agency has no duty to abandon or modify a
project if the project is found to have an adverse effect
that is not avoided or mitigated, but only to follow the
mandated NHPA procedures.9 36 C.F.R. § 800.6. There is an
exception to that rule applicable to National Historic
Landmarks, as specially designated historic properties.
They are subject to more stringent requirements. When an
agency action will cause a direct adverse effect to a
National Historic Landmark, the agency has an affirmative
duty under NHPA § 110f to minimize the harm done. See
also 36 C.F.R. § 800.10(a)
9
Note that in many cases, as here, NHPA review is
often built into the NEPA review process. See 36 C.F.R.
§ 800.8(c) (permitting such combination).
65
Plaintiffs raise two challenges to HUD’s compliance
with the NHPA: 1) that HUD's compliance with the NHPA §
106 process was defective and 2) that HUD had, and
neglected to fulfill, a duty to minimize direct harm to
National Historic Landmarks under NHPA § 110f. We deal
with each in turn.
A.
Based on its finding that the St. Thomas project
would result in some adverse effects, HUD went through
the required consulting process with the SCHP, ACHP, and
other required parties. HUD originally produced an MOA
for the project in September 2000; no one challenges the
fact that HUD was not a signatory to that document, and
that as a result it may not have met the NHPA’s
requirements. See 36 C.F.R. § 800.6(c)(1)(I). In
September 2002, however, HUD reopened its NHPA review,
which resulted in a second, final MOA. The second MOA
covers more of the project than the first MOA, which
covered the residential portions of the project and
66
rehabilitation of the five remaining St. Thomas
buildings. The second document covers all of the above,
plus the Wal-Mart site and a nearby historic property,
the Amelia Cotton Press. The document is signed by all
necessary parties and contains various provisions meant
to mitigate the project’s effects on historic properties.
Plaintiffs argue that HUD’s failure to sign the first
MOA taints the validity of the second MOA. They assert
that the second document can only be taken to cover the
Wal-Mart and the Amelia Cotton Press and that, as a
result, HUD has not adequately considered adverse effects
on historical properties arising from the residential and
rehabilitation portions of the project. We are not
persuaded.
Plaintiffs offer no legal authority to suggest that
the second MOA may not incorporate and bind the parties
to, among other things, the same terms that had been
included in the first, incomplete or deficient document.
Second, a plain reading of the final MOA shows that it
covers the effects of and mitigation for the entire
67
project. Plaintiffs offer no evidence that the document
is meant to be interpreted in the limited fashion they
urge. Accordingly, we adhere to the general rule that,
absent other evidence, “[a] memorandum of agreement
executed and implemented pursuant to this section
evidences the agency official's compliance with section
106.” 36 C.F.R. § 800.6(c). Plaintiffs cannot, therefore,
show that HUD was arbitrary or capricious in relying on
the second, final MOA as proof of its compliance with the
requirements of NHPA § 106.
Plaintiffs’ second argument asserts that HUD was
required to undertake the “consulting party review”
process laid out in 36 C.F.R. § 800.5(c). This assertion,
however, misreads the governing regulations. 36 C.F.R. §
800.5(c) only requires consulting party review where HUD
proposes a finding of no adverse effect on any historic
property within the project’s area of potential effects.
Here, HUD made no such proposal; in fact, the agency
found that there were adverse effects on certain historic
properties such that it needed to consult with the ACHP
68
and SHPO to produce an MOA. The situation simply did not
meet the requirements triggering 36 C.F.R. § 800.5(c).
Plaintiffs’s assert that a finding under NHPA § 110f of
no adverse effects on National Historic Landmarks also
triggers § 800.5(c)’s provisions, but offer no legal
support for that reading, which conflicts with the plain
language of the regulation. As a result, we conclude that
HUD was not in violation of the NHPA’s procedural
requirements in not conducting consulting party review
under § 800.5(c).
B.
As noted above, NHPA § 110f imposes an affirmative
duty on federal agencies to minimize harm to National
Historic Landmarks where it finds that a project will
adversely affect such landmarks. In conducting its
assessment of whether the St. Thomas project would cause
such adverse effects, HUD relies on the opinion letter it
received from the National Park Service. That opinion
letter was drafted by Cecil McKithan, a Park Service
69
employee, after he visited the project site for that
express purpose. In it, Mr. McKithan stated that the St.
Thomas project would not adversely affect the National
Historic Landmarks. HUD relied on that letter in reaching
its determination that the project would have no adverse
effect on National Historic Landmarks in the area.
By October 2002, the State Historical Preservation
Officer, the Advisory Council on Historic Preservation,
and other consulting parties had expressed their
objection to that determination. At that point, National
Park Service contacted HUD at that point to let the
agency know that it was reexamining its conclusion in
response to those concerns. Mr.McKithan had by then
retired, and the Park Service was reviewing his findings
out of concern that it lacked sufficient information to
support his determination. On December 16, 2002, however,
the National Park Service withdrew its request for more
time to assess the project’s impact, on the grounds that
it had reexamined the materials before it. In doing so,
the National Park Service stated that “HUD, in accordance
70
with 36 C.F.R. § 800.10(c), appropriately sought National
Park Service’s comments and relied on those comments in
good faith[.]” It did not withdraw its statement that the
project would have no adverse effect. By February 2003,
both the SHPO and the ACHP, the very parties who had
initially questioned HUD’s determination of no adverse
effect with regard to NHLs, had again signed onto the
MOA, indicating their agreement with that determination.
See 36 C.F.R. §§ 110f(a) (noting that the results of the
§ 110f review process are to be incorporated into the
NHPA § 106 process), 800.6(c) (a signed MOA evidences the
agency’s official compliance with NHPA § 106).
Plaintiffs challenge HUD’s conclusion that the
project will have no significant impact on National
Historic Landmarks, arguing that HUD was arbitrary and
capricious in relying on the NPS’s recommendation since
it knew that the Park Service’s recommendation was
unsupported and incorrect. Essentially, they argue that
the National Park Service’s request for additional time
to reconsider its determination renders HUD arbitrary and
71
capricious for relying on the National Park Service’s
finding of no adverse impact. HUD may rely on the
reasonable opinions of its own experts, however, and
despite the reexamination, the National Park Service did
not, as plaintiffs allege, withdraw its determination of
no adverse effects. See Marsh, 490 U.S. at 378 (1989).
Indeed, despite the significant consideration given to
outside concerns, the National Park Service refused to
rescind its decision. Without some further evidence
pointing to flaws in the National Park Service’s
decision-making process and conclusion, HUD was not
arbitrary and capricious in relying on the National Park
Service’s determination as support for its conclusion
that the project would have no significant impact in this
regard.
IV.
In addition to contesting HUD’s decisions based on it
EA/FONSI and MOA, plaintiffs also challenge the district
court’s disposition of various motions. They first appeal
72
from the district court’s findings of ripeness and
mootness with regard their challenges of the earlier
versions of the environmental assessment/FONSI and MOA.
A.
Plaintiffs filed suit in July 2002, seeking
declaratory judgment that HUD and The Housing Authority
of New Orleans failed to comply with NHPA and NEPA and an
injunction forcing HUD to withhold grant funds until The
Housing Authority of New Orleans became compliant. In
October 2002, plaintiffs filed a motion for partial
summary judgment and permanent injunction. On February
21, 2003, the district court granted HUD's motion for
summary judgment, concluding in part that plaintiff’s
claims were not yet ripe for review because the court was
"under the impression that the NEPA review was still
pending." HUD had, in fact, closed the re-opened review
on February 20, 2003, having again undertaken an
environmental assessment and reached a FONSI; HUD, The
Housing Authority of New Orleans, the SHPO, and ACHP
73
entered an amended MOA on February 1, 2003.
Plaintiffs challenge the district court’s disposition
on summary judgment of their challenges to the first
environmental assessment/FONSI and MOA completed for the
St. Thomas redevelopment project, before those processes
were reopened by HUD. A grant of summary judgment is
reviewed de novo, “applying the same standard on appeal
that is applied by the district court.” Terrebonne Parish
Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 877 (5th
Cir.2002) (citing Auguster v. Vermilion Parish School
Board, 249 F.3d 400, 401 (5th Cir.2001).
In deciding whether a matter is ripe for review, the
court must consider “both the fitness of the issue for
the judicial determination and the hardship to the
parties of withholding consideration.” Abbott
Laboratories v. Gardner, 387 U.S. 136, 148 (1967). In
making its determination, the court should evaluate three
factors: “(1) whether delayed review would cause hardship
to the plaintiffs; (2) whether judicial intervention
would inappropriately interfere with further
74
administrative action; and (3) whether the courts would
benefit from further factual development of the issues
presented.” Ohio Forestry Ass’n, Inc. v. Sierra Club, 523
U.S. 726, 733 (1998).
The district court here determined that while the
complaint clearly met the case or controversy requirement
of Article III, “judicial review at [that] time [was]
inappropriate in light of the reopened reviews[,]”
particularly since “[t]he ordinary remedy for
unsustainable agency findings under NEPA is to remand the
matter to the agency ‘for further consideration.’”
Accordingly, it held that at that time the claim would
have inappropriately interfered with agency action, viz.,
the reopened NEPA and NHPA review processes. In
considering the other two Ohio Forestry factors, it found
that plaintiffs had “failed to demonstrate any hardship”
would be suffered as a result of withholding review.
Plaintiffs’ motion to the district court alleged that
“infrastructure work is being [per]formed, which is
eliminating the possibility of real consideration of
75
alternatives to the present project,” and that “[d]elay
of review will harm plaintiffs[’] ability to receive a
true review of the Project’s impact on the human
environment and historic properties.” A review of the
record, however, indicates that the district court was
given no further explanation or support for the
statements beyond the allegations. Finally, the district
court rightly noted that review at that time would entail
judicial review of “an admittedly incomplete
administrative record,” as the processes in question had
been reopened.
Given all of the above, the district court did not
err in determining that the issue was not yet ripe for
review: plaintiffs clearly had not made the showing
necessary under the Ohio Forestry test, and their
arguments fail before our court now for the same reasons.
B.
On March 31, 2003, plaintiffs amended their complaint
to include the original environmental assessment/FONSI
76
and MOA as well as the environmental assessment/FONSI and
the MOA resulting from the reopened process. Plaintiffs
then filed a second motion for summary judgment and for
a permanent injunction on April 4, 2003, again alleging
noncompliance with NEPA and the NHPA, and seeking to stop
all work on the project until an environmental impact
statement and Section 106 review had been properly
completed. That same day, HUD, The Housing Authority of
New Orleans, and HRI all filed motions for summary
judgment on the grounds that the reopened review complied
with NEPA and NHPA. On April 11, 2003, the court entered
an order in the case denying the plaintiffs' motion and
granting HUD's motion in part. In that order, the court
dismissed all of plaintiffs’ claims arising under the
NHPA. The court left open issues related to the first
environmental assessment and FONSI insofar as they were
necessary to determine awards of attorneys’ fees, but
stated that “the relief for remedying a deficiency in the
original environmental assessment/FONSI deficient [sic]
is now moot.”
77
In March 2004, the court dismissed all of plaintiffs’
remaining claims. In doing so, it held that the claims
against the original MOA were moot, as they had been
previously dismissed and were subject to the “law of the
case” doctrine. In addition, the court held that
challenges to the original environmental assessment/FONSI
were moot and did not fall within the “capable of
repetition, yet evading review” exception.
Plaintiffs first argue that the claims against the
original MOA are not made moot by the law of the case
doctrine because the later MOA does not encompass the
entire project. The law of the case doctrine “expresses
the practice of courts generally to refuse to reopen what
has been decided, not a limit to their power.” Messinger
v. Anderson, 225 U.S. 436, 443 (1912). The doctrine
applies not only to issues decided explicitly, but also
to everything decided “by necessary implication.”
Browning v. Navarro, 887 F.2d 553, 556 (5th Cir. 1989).
We reject this argument for the reasons discussed supra;
the second, final MOA is a comprehensive document and
78
supercedes the original.
Corrective action by an agency can moot an issue.
See, e.g., Commissioner v. Shapiro, 424 U.S. 614, 622-23
n.7 (1976) (holding that proper service of new notice of
deficiency and new notices of levy moots question as to
whether prior actions were procedurally defective). Other
circuits have found that subsequent agency action under
NEPA moots a challenge to original compliance where there
is no relief that would “undo” the harm. See Aluminum Co.
of Am. v. Adm’r, Township of Huron, 175 F.3d 1156, 1163
(9th Cir. 1999) (“The... complaints are stale because a
final environmental impact statement was prepared and we
can grant no relief that would "undo" the operation of
the [noncompliant agency action] during the period
between issuance of the 1995 ROD and the final
environmental impact statement.”); see also WRIGHT & MILLER,
FEDERAL PRACTICE AND PROCEDURE, § 3533.7 (“At any rate,
self-correction again provides a secure foundation for
mootness so long as it seems genuine.); id. § 3533.2
(“Action by the defendant that simply accords all the
79
relief demanded by the plaintiff may have the same effect
as settlement. So long as nothing further would be
ordered by the court, there is no point in proceeding to
decide the merits.... [M]ootness arises from the fact
that in one way or another, the parties have acted
voluntarily to dispose of the plaintiff's original claim
for relief.”)
In reopening the NHPA process, HUD took the voluntary
action required to address plaintiffs’ original claims.
At the closure of that process, a second, final MOA was
produced. As the St. Thomas project is no longer
proceeding under the original version of the MOA, any
remaining challenges to its validity have been mooted.
The district court rightly disposed of claims against the
final MOA in its April 13, 2003 ruling and, in its March
2004 ruling, explicitly recognizes the implicit results
of that decision.
Plaintiffs next argue that the district court erred
in refusing to apply the “capable of repetition, yet
evading review” exception to their challenges against the
80
original environmental assessment/FONSI. This exception
to the mootness doctrine applies where (1) the challenged
action is too short to be fully litigated before it
ceases and (2) there is a reasonable expectation that the
same complaining party will be subject to the same action
again. Benavides, 238 F.3d at 671 (quoting Spencer v.
Kenna, 523 U.S. 1, 17 (1998)). Plaintiffs do not argue
the second requirement at all. As to the first, they
argue that HUD is likely to avoid review on other
proposals, plans, or actions by using the tactic of
reopening NEPA or NHPA review. It is not, however,
inappropriate to permit agency reconsideration to moot an
initially unripe claim where the behavior involved no
longer plays a causal role in the harm alleged. See Ohio
Forestry Ass’n, Inc., 523 U.S. at 734. Here, HUD took
corrective action when it reopened its NEPA review
processes, which, despite its reconsideration, still
yielded a FONSI; plaintiffs have not demonstrated that
the original FONSI still plays a causal role in the
various harms they assert under NEPA. Accordingly, the
81
later challenges to the original environmental
assessment/FONSI and MOA were correctly denied as moot.
V.
Plaintiffs next challenge the district court’s April
11, 2003 rulings on their Rule 59 motion regarding (1)
the completeness of the administrative record, (2) the
prejudicial effect of the expedited briefing schedule,
and (3) the application of an incorrect standard of
review.
Rulings on Rule 59(e) motions are reviewed for abuse
of discretion. Simon v. United States, 891 F.2d 1154,
1159 (5th Cir. 1990). Unless the district court clearly
abused its discretion in determining that plaintiffs’
motion neither established a manifest error of law or
fact nor presented newly discovered evidence, the
district court’s ruling should not be disturbed. Id.A.
Plaintiffs attempt to introduce several pieces of
82
extra-record evidence in arguing that HUD was arbitrary
and capricious in issuing a FONSI. In their Rule 59(e)
motion, they argued that the administrative record was
created impermissibly in response to litigation and does
not contain certain documents that should be part of the
record. Among these documents are Mr. Bagert’s highly
critical study of the HOPE IV program and the St. Thomas
project in particular, a lead contamination study
referred to by Dr. Mielke in his comments to the
environmental assessment regarding lead contamination,
and a Citywide Testing noise survey from April 20, 2000,
which found high levels of noise.
The district court refused to grant reconsideration
on the issue on the grounds that plaintiffs had failed to
show that any of the documents in the record were created
post hoc or not relied on by HUD in its decision-making.
It further noted that plaintiffs’ argument regarding the
completeness of the record was “essentially a new vehicle
for asserting the same arguments they made in opposition
to summary judgment - i.e., that HUD failed to adequately
83
consider certain potential environmental impacts and
ignored contrary information regarding these impacts.”
Extra-record evidence may be admitted if necessary to
determine whether an agency has adequately considered
adverse environmental impacts. Sierra Club v. Peterson,
185 F.3d 349, 369-70 (5th Cir.1999); Sabine River, 951
F.2d at 678. A district court's decision regarding the
admissibility of extra-record evidence is reviewed for
abuse of discretion. Davis Mountains Trans-Pecos Heritage
Ass'n. v. Federal Aviation Admin., 116 Fed. Appx. 3, 16
(5th Cir. 2004) (citing Northcoast Envtl. Ctr. v.
Glickman, 136 F.3d 660, 665 (9th Cir. 1998) and
referencing Davidson Country Oil Supply Co. Inc. v.
Klockner, Inc., 908 F.2d 1238, 1245 (5th Cir. 1990)
("stating that ‘[t]he trial court's discretion to admit
or exclude evidence is generally broad'").
As our analysis supra records, HUD fulfilled its duty
under NEPA: it identified the issue, assessed it, and
reached a supported conclusion, and we find no error in
the district court’s grant of the motion for summary
84
judgment. While plaintiffs may disagree with the outcome,
HUD’s environmental assessment did consider the issues
raised, and included at least some of the information
evidence plaintiffs urge was completely ignored, as has
been discussed supra. We agree with the district court’s
assessment that the administrative record adequately
supported HUD’s FONSI, and similarly hold that the
district court did not abuse its discretion in denying
plaintiffs’ Rule 59 motion in this respect. See Camp v.
Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 36 L.Ed.2d
106 (1973).
B.
Plaintiffs second challenge to the district court’s
denial of their Rule 59(e) motion alleges that they were
prejudiced by the expedited briefing schedule, which was
created as a result of HUD’s misstatements regarding
important deadlines.
On March 20, 2003, the district judge held a status
conference, at which it set an expedited schedule for
85
reviewing the newly issued environmental assessment/FONSI
and MOA based on the fact that the closing on the Wal-
Mart site was scheduled for April 15. The district judge
notes that plaintiffs “consented to an expedited schedule
and even took part in negotiating the details of that
schedule.” HUD filed the Administrative Record on March
27, 2003; cross motions for summary judgment were filed
April 4, 2003. Oppositions were filed on April 8, and
oral argument held on April 10.
In an April 3 phone conference, plaintiffs requested
an additional court day (from Friday to Monday) in which
to review the record; the district court denied the
request. The scheduled closing was delayed, finally
occurring in October 2003, due to the pendency of a
state-court bond validation lawsuit in which plaintiffs
were also participants.
The district court did not abuse its discretion in
denying the motion on this ground: all parties were
subject to the same time constraints, plaintiffs helped
develop and agreed to the expedited schedule, and
86
further, the closing was delayed due to a lawsuit in
which plaintiffs were also participating.
C.
Plaintiffs urge that the district court should have
applied a more stringent standard of review to the NEPA
process based on the fact that HUD’s administrative
record amounts to post hoc rationalization of its
decision to issue a FONSI. As a basis, plaintiffs cite to
the fact that certain studies were completed after the
environmental assessment process was reopened. Nothing in
the record, however, suggests that the information HUD
provided was completed to provide post hoc justification
for the agency’s final environmental assessment/FONSI.
Rather, the documents appear to be those relied on by HUD
in reaching its determination after reopening the
process. Furthermore, the reopened process led to changes
in the project - notably, the imposition of additional
traffic control measures. Since plaintiffs have not
sufficiently demonstrated post hoc rationalization or
87
prejudgment, the district court applied the proper
standard of review; viz., “arbitrary and capricious.”
VI.
On December 18, 2002, the district court granted
plaintiffs' Rule 41(a)(2) motion to dismiss The Housing
Authority of New Orleans from the case, conditioned on
payment of The Housing Authority of New Orleans's
attorneys' fees and costs. In early January 2003, The
Housing Authority of New Orleans re-entered the case as
an intervenor, to protect interests threatened by
plaintiffs' request for an injunction. In March 2003, the
district court awarded The Housing Authority of New
Orleans $1,800.50 in attorneys' fees, covering those
tasks related to the original suit and not useful to The
Housing Authority of New Orleans in its role as
intervenor. Plaintiffs’ final issue on appeal challenges
that award.
Rule 41(a)(2) motions for voluntary dismissal are not
usually appealable, since it is presumed that plaintiffs
88
obtained that which they sought.10 Yoffe v. Keller Indus.,
Inc., 580 F.2d 126, 129 (5th Cir. 1978); see also,
Briseno v. Ashcroft, 291 F.3d 377, 379 (5th Cir. 2002);
Mortgage Guar. Ins. Corp. v. Richard Carlyon Co., 904
F.2d 298, 300 (5th Cir. 1990). Under that rule, district
courts have authority to attach conditions to such a
dismissal in order to alleviate prejudice to the
defendants, but such conditions should be tailored so
that they only “alleviate the harm caused to the
defendant.” LeCompte v. Mr. Chip, Inc., 528 F.2d 601,
604-5 (5th Cir. 1976). “[The Fifth Circuit has] left open
the possibility that a rule 41(a)(2) dismissal with
conditions imposed by the district court may constitute
legal prejudice and thus render the dismissal
appealable.” Briseno, 291 F.3d at 379 (citing Yoffe, 580
F.2d at 129-30). We review conditions placed on a Rule
10
Defendants assert that plaintiffs may not appeal
the question of attorneys’ fees because they were not
brought before this court with a timely notice of
appeal. Because plaintiffs are not entitled to
attorneys’ fees even assuming, arguendo, that they have
timely appealed the issue, we decline to decide the
question here.
89
41(a)(2) motion for voluntary dismissal for abuse of
discretion. LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604
(5th Cir. 1976).
Appeal may be granted where 1) plaintiff is “legally
prejudiced” by the attendant conditions and 2) has not
“agreed to or legally acquiesced in those conditions.”
Mortgage Guar., 904 F.2d at 300 (citing Yoffe, 580 F.2d
at 130). Legal prejudice arises only where the district
court’s conditions are “‘clearly unreasonable’ or ‘so
outrageous as to demand a full appellate review.’” Yoffe,
580 F.2d at 131; see also, Mortgage Guar., 904 F.2d at
301. Awards of attorneys’ fees do not generally reach
that level. See, e.g., Yoffe, 580 F.2d at 130-1; Mortgage
Guar., 904 F.2d at 300-1 (Yoffe precedent makes arguments
that such awards cause legal prejudice “difficult to
sustain”).
Plaintiffs challenge the rationale given for the
district court’s conditions, arguing that they named The
Housing Authority of New Orleans as a defendant because
their arguments, in part, challenged an MOA to which the
90
federal defendant, HUD, was not a signatory. The district
court, however, correctly noted that plaintiffs’ counsel
should have been familiar with the fact that the APA
“does not provide private plaintiffs a route for
reviewing the actions of nonfederal defendants such as
[The Housing Authority of New Orleans].” The court notes
that plantiffs’ attorneys were also counsel in two other
NEPA/NHPA suits where that principle was clearly stated:
Vieux Carre Property Owners, Residents & Assoc., Inc. v.
Brown, 875 F.2d 453, 458 (5th Cir. 1989) and Hayne Blvd.
Camps Preservation Ass’n, Inc. v. Julich, 143 F. Supp.
628, 631-2 (E.D. La. 2001). Fees were awarded to The
Housing Authority of New Orleans in the amount of
$1,800.50, calculated to cover only those activities The
Housing Authority of New Orleans undertook as a
defendant, not those occurring after it became an
intervenor.
On those facts, the district court’s condition did
not create legal prejudice for the plaintiffs: plaintiffs
brought suit against both HUD and the Housing Authority
91
of New Orleans, the APA contains no provision that at any
time would have given plaintiffs a private cause of
action against the Housing Authority of New Orleans, and
from past experience, plaintiffs’ attorneys should have
known that to be the case. Furthermore, the fees awarded
were closely tied to the time and effort the Housing
Authority of New Orleans had expended in defending itself
against those claims. Accordingly, the District Court’s
award of attorney’s fees is not an abuse of discretion.
VII.
For these reasons, we conclude that HUD’s decision
that an EIS was not required was not arbitrary,
capricious, or contrary to law; that no further action is
required of the agency at this time under NEPA or the
NHLA; and that the district court committed no reversible
error in its decisions or its handling of the case.
Accordingly, HUD’s decision and the judgment of the
district court are AFFIRMED.
92