The nonprofit petitioners argued first that the rulemaking proceeding itself constituted a major Federal action requiring compliance with the National Environmental Policy Act (NEPA). They alleged further that the exemption requirements failed to ensure compliance with the National Historic Preservation Act (NHPA) and NEPA. Finally, they argued that ICC did not adequately consider the effect of the regulations on public use of the abandoned lines under both the National Trails System Act and the Interstate Commerce Act.
The appellate court reviewed the analysis of ICC and determined that the regulations were neither arbitrary nor capricious. 848 F.2d at 1250. The court found that on remand ICC fulfilled the requirements of APA by providing a logical and persuasive explanation of how the regulations achieved rail transportation policy goals and statutory requirements in the Staggers Rail Act of 1980. Id. at 1250-56.
Upon determining that ICC abided by APA's requirements, the court then addressed the environmental issues raised by the Rails to Trails Conservancy and other nonprofit petitioners. In response to the allegation that ICC failed to consider the environmental consequences of the rulemaking, ICC argued that the proceeding did not have an environmental impact, noting that it would reduce regulatory burdens on abandonments, not change their number. Id. at 1257. The court rejected that reasoning, concluding that "the procedural nature of a regulation does not, therefore, exempt an agency from complying with NEPA and preparing an environmental assessment (EA) or an environmental impact statement (EIS) where appropriate." Id.
Nonetheless, although ICC did not prepare an EA or EIS, the court found that the environmental impacts of the rulemaking were considered. Specifically, ICC noted in the proceeding that its exemption authority did not extend to exempting actions from environmental laws. Indeed, its regulations required applicants for exemptions to submit information on environmental issues. Id. ICC additionally developed procedures to comply with NEPA and other environmental statutes when individual abandonment exemptions were issued. Based on the above consideration of environmental impacts, the court declined to remand the case to ICC even though ICC failed to develop an EA, as required by its own regulations and those of the Council on Environmental Quality (CEQ).
Nonprofit petitioners also challenged the procedures established by ICC regulations to comply with NEPA and NHPA. They stated that ICC's regulation was improper because it placed the duty to raise environmental concerns on the applicants, allowed ICC to authorize abandonment without considering environmental impacts, failed to provide adequate standards for valid objections to abandonments, and did not provide a reasonable opportunity for public participation. Id. at 1258. The court found, however, that ICC had addressed these concerns in subsequent orders. The court observed that the ICC "may not delegate to parties and intervenors its own responsibilities to independently investigate and assess the environmental impact of the proposal before it." Id. (citing Harlem Valley Transportation Association. v. Stafford, 500 F.2d 328, 336 (2d Cir. 1974)). Because ICC regulations not only required applicants to raise environmental concerns, but also provided that the ICC would conduct an independent EA, the court found it had met NEPA requirements.
The court also rejected petitioners' allegation that preparation of the EA after the notice of abandonment had been published in the Federal Register was improper. The court explained that publication in the Federal Register was not the final step in the process. Under the regulations, ICC would review the abandonment and assess environmental issues after publication of the notice and, thus, could still consider environmental concerns prior to making "'irretrievable commitments.'" Id. at 1259 (citing Scientists' Institute for Public Information, Inc. v. Atomic Energy Commission, 481 F.2d 1079, 1094 (D.C. Cir. 1973)). The court also looked favorably upon ICC's representation that it would automatically grant a stay of the abandonment when environmental issues were raised. Petitioners' argument that the standard for a stay imposed too high a burden was thus rejected.
Finally, the court found that ICC procedures provided a reasonable opportunity for public comment in accordance with NEPA. The EA would be available 5 days after the notice of abandonment was published and parties had 15 days to seek a stay. Because ICC indicated it would grant a stay based on a "minimal showing" of environmental concerns and, further, that its procedures allowed for extensions of time, the court found that the public had a reasonable opportunity to comment.
The court also found ICC procedures to accord with NHPA. Describing Section 106 of NHPA as a "stop, look, and listen" provision similar to Section 102 of NEPA, the court determined that NHPA's purpose was achieved as long as consultation occurred prior to the effective date of the exemption; it did not have to occur prior to publication of the notice of abandonment. 848 F.2d at 1261.
Finally, the court found that ICC complied with the National Trails System Act by providing that persons interested in recreational use of the rail lines could submit evidence regarding public use within 10 days of the notice of abandonment.
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