Plaintiffs, Tyler et al., sought to enjoin the City of San Francisco from building
a low-income housing project next to their homes, which were eligible to be
listed in the National Register of Historic Places. The project was to be constructed
with Federal funds. Plaintiffs argued that the U.S. Department of Housing and
Urban Development (HUD) and the other listed defendants failed to meet the terms
of their own Memorandum of Agreement (MOA), which was designed to mitigate the
project's impact on plaintiffs' homes. Plaintiffs sought a preliminary injunction
under the National Historic Preservation Act (NHPA) and National Environmental
Policy Act (NEPA).
The district court denied the preliminary injunction and granted defendants' motion to dismiss. The court ruled that plaintiffs' NHPA claims were moot because NHPA contains an implicit statute of limitations, which barred assertion of NHPA claims once the Federal agency (HUD) released the funds to the city. In holding this, the court relied on 36 C.F.R. Section 800.3(c), which states in part, "Section 106 requires the Agency Official to complete the Section 106 process prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license or permit."
The court went on to rule that even if there was no implicit statute of limitations in NHPA, plaintiffs' claims would fail because HUD no longer exercised "continuing authority" over the funds. The court used a similar analysis under NEPA because HUD had "ceased to exercise continuing authority over the project once it disbursed the funds."
In reversing, the Ninth circuit court of Appeals stated that there was no implicit statute of limitations in NHPA. Rather, a more common sense reading of Section 106 would suggest that the "prior to" language the district court relied on merely refers to the timing of agency compliance. See 36 C.F.R. Section 800.3(c). In other words, this language establishes a time during which the agency is required to conduct an NHPA review, not the time during which a plaintiff is required to bring a lawsuit. Indeed, construing the language as the district court did runs counter to the implied private right of action to file claims under NHPA, effectively leaving no time slot open for a plaintiff to file suit.
Furthermore, the court stated that it has never held that an implicit statute of limitations bars plaintiffs from bringing suit under NHPA once funds are released. Rather, the court has applied the laches doctrine to resolve the timeliness of both NHPA and NEPA claims.
The appellate court also found the continuing authority aspect of the district court's decision to be erroneous since the plain language of NEPA and NHPA regulations states that the Federal agency may have some continuing authority because it is a party to the agreement.
Further, the appellate court overruled the district court's decision that the city's Federal environmental review responsibilities ceased once Federal involvement in the project ceased. The statute authorizing delegation of HUD's NHPA and NEPA review responsibilities provides that the local official "consents to assume the status of a responsible Federal official under [NEPA and other Federal laws] and...consents...to accept the jurisdiction of the Federal courts for the purpose of enforcement of his responsibilities as such an official." 42 U.S.C. 12838(c)(4). This means that the city, as a signatory to the MOA, remains liable under NHPA and NEPA for its failure to carry out the terms of the MOA.
This case was remanded to the district court to first address the standing issue and then, if it is found that plaintiffs have standing, to decide the extent of HUD's and the city's obligations to plaintiffs under the MOA and whether these obligations were breached.
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