Friends of Back Bay v. U.S. Army Corps, No. 11-1184

Decided: June 18, 2012

A developer proposed building a mooring facility and concrete boat ramp (the “Project”) about 3,000 feet back from the Back Bay National Wildlife Refuge (the “Refuge”) in Virginia Beach.  The approved permit authorized channel dredging and excavation and relocation of silt and other material.  Because the project would require clearing wetlands, the permit required the creation of equivalent wetlands nearby and relocation of plants displaced by new construction.  There were also operational conditions to the project, such as horsepower limitations on boat motors, restrictions on who may use the facility, and the installation of signs informing the public that there is a no-wake zone within the Refuge.  Prior to issuing the permit, the Army Corps of Engineers (the “Corps”) solicited public comment and most of the responses opposed the project.

The Fish and Wildlife Service (“FWS”) suggested that the Corps prepare an Environmental Impact Statement (“EIS”) to address the potential impact the project would have on federal resources.  An EIS is prepared in connection with “every recommendation or report on proposals for … major Federal actions significantly affecting the quality of the human environment.” Agencies draft an Environmental Assessment (“EA”) to determine whether environmental quality is “significantly affect[ed].”  In this case, the Corps determined that no EIS was required as the no-wake zone would be a significant measure of protection to the Refuge and its resources.  The Corps stated that the no-wake zone could be enforced by any federal, state, local, or county agency or private security firm so long as the entity has the authority to enforce the no-wake zone under the appropriate law.  Enforcement was problematic due to lack of funding.  The building permit did not mandate enforcement nor did it guarantee funding for enforcement.

Friends of Back Bay and Back Bay Restoration Foundation filed a complaint seeking review of the Corps’s decision to allow dredging and relocation of silt and fill material and challenging the determination that issuance of the permit did not qualify under NEPA as a federal action requiring an EIS.  The district court ultimately entered summary judgment in favor of the defendants, rejecting the plaintiffs’ contention that harm to the Refuge from boating could be considered a legitimate secondary effect of the dredging.  Regarding the NEPA challenge, the district court concluded that the Corps’s decision to grant the permit without preparing an EIS was within the agency’s broad discretion and not contrary to law.  The plaintiffs appealed.

The APA provides that a reviewing court is bound to “hold unlawful and set aside agency action” for certain specified reasons, including whenever the challenged act is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”  This gives rise to a highly deferential standard of review with a strong presumption in favor of finding agency action valid.  The court must carefully inquire into the record and consider whether the agency considered all relevant factors and whether there was clear error.  The reasonableness of the Corps’s decisionmaking will be reviewed de novo.

The parties debated how to characterize the EA, with the plaintiffs arguing that the Corps found that granting the permit would affect the environment to the degree necessary to trigger the need for an EIS, but establishing the no-wake zone would ameliorate adverse effects.  The defendants maintained that the no-wake zone was in effect for nearly two years before the EA, thus it constituted a baseline condition.  A material misapprehension of the existing baseline conditions can be a foundation for an arbitrary and capricious decision.  In North Carolina Wildlife Federation v. North Carolina Department of Transportation, No. 11-2210, 2012 WL 1548685 (4th Cir. May 3, 2012), federal and state agencies were charged with evaluating the construction of a proposed toll highway and erroneously adopted the assumption that the road would be built in estimating the resulting consequences.  This was an “obvious and fundamental blunder,” and required reconsideration.  Additionally, this case stood for the proposition that, when an agency miscalculates the underlying baseline, courts frequently find NEPA violations.

In this case, the creation and continued existence of the no-wake zone is a foundational proposition upon which the Corps’s decision was premised.  However, the no-wake zone is entirely unenforced.  Citing Nat’l Audubon Soc’y v. Hoffman, 132 F.3d 7, 17 (2d Cir. 1997), the Fourth Circuit stated that measures designed to minimize an action’s effect on the environment are more likely to be effective when they are policed, either through the imposition of a mandatory permit condition or literal police presence, neither of which was present in Back Bay.  Because the decision to not issue an EIS was based upon a misapprehension of the baseline conditions, the judgment below must be vacated and the matter remanded.

On remand, the Corps should consider ten factors promulgated by the Council on Environmental Quality.  Two of these factors especially support the plaintiffs’ contention that an EIS should be prepared: the unique characteristics of the geographic area and the degree to which the effects on the quality of the human environment are likely to be highly controversial.  The Refuge and its vicinity are unique and “ecologically critical.” Furthermore, the debate of the potential effects on the environment has proved to be highly controversial.  The FWS specifically recommended preparation of an EIS, a conclusion with which the Fourth Circuit agreed.

The plaintiffs also reasserted that the permit should not have been issued pursuant to § 404 of the CWA, but the Fourth Circuit declined to address the issue at this time.  Accordingly, the judgment was vacated and remanded.

Full Opinion

Michelle Theret

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