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Atchafalaya Basinkeeper v. United States Army Corps of Engineers

United States Court of Appeals, Fifth Circuit

July 6, 2018

ATCHAFALAYA BASINKEEPER; LOUISIANA CRAWFISH PRODUCERS ASSOCIATION-WEST; GULF RESTORATION NETWORK; WATERKEEPER ALLIANCE; SIERRA CLUB, and its Delta Chapter, Plaintiffs - Appellees
v.
UNITED STATES ARMY CORPS OF ENGINEERS, Defendant-Appellant BAYOU BRIDGE PIPELINE, L.L.C.; STUPP BROTHERS, INCORPORATED, doing business as Stupp Corporation, Intervenor Defendants - Appellants

          Appeals from the United States District Court for the Middle District of Louisiana

          Before REAVLEY, JONES, and GRAVES, Circuit Judges.

          EDITH H. JONES, Circuit Judge

         The United States Army Corps of Engineers (the "Corps") and Bayou Bridge Pipeline, LLC ("Bayou Bridge," a convenience that includes co-appellant Stupp Brothers, Inc.), appeal the district court's grant of a preliminary injunction preventing Bayou Bridge from constructing a pipeline in part through the Atchafalaya Basin of southern Louisiana. The injunction was based on the Corps' alleged failure to satisfy the demands of the National Environmental Policy Act in issuing a construction permit. Because the court misperceived the applicable regulations, and the Corps' analysis, properly understood, vindicates its decision that an Environmental Assessment sufficed under these circumstances, we vacate the preliminary injunction and remand to the district court.

         BACKGROUND

         On December 14, 2017, after a year-long review, the Corps issued Bayou Bridge a permit under Section 404 of the Clean Water Act ("CWA"), 33 U.S.C. § 1344, and Sections 10 and 14 of the Rivers and Harbors Act of 1899, 33 U.S.C. §§ 403, 408, allowing it to build a 162-mile crude oil pipeline from Lake Charles, Louisiana to terminals near St. James. Portions of the pipeline will cross the Atchafalaya Basin, affecting wetlands. The discharge of dredge or fill material into these wetlands necessitated the Corps' permitting action under the Clean Water Act, 33 U.S.C. § 1311(a), while the Rivers and Harbors Act requires permitting for structures in or affecting "navigable waters" as defined by regulations.

         In discharging its permit responsibilities, the Corps was required to implement the National Environmental Policy Act ("NEPA"), a procedural statute, which requires certain steps before federal agencies may approve projects that will affect the environment. To comply, the agency first prepares an environmental assessment ("EA"). Sabine River Auth. v. U.S. Dep't of Interior, 951 F.2d 669, 677 (5th Cir. 1992). As this court has held, "[a]n EA should be a 'concise public document . . . that serves to . . . [b]riefly provide sufficient evidence and analysis for determining whether to prepare an [environmental impact statement].'" O'Reilly v. U.S. Army Corps of Eng'rs, 477 F.3d 225, 228 (5th Cir. 2007) (quoting 40 C.F.R. § 1508.9(a)). If the agency finds during this process that the proposed action will result in "significant" effects to the environment, then it must also prepare an environmental impact statement ("EIS"). Id.; 42 U.S.C. § 4332(C). If the agency finds that the project will not have a significant impact, it will conclude with a "Finding of No Significant Impact" ("FONSI") and no EIS will be required. Sabine River Auth., 951 F.2d at 677.

         In this instance, the Corps authored two EAs, one under the Rivers and Harbors Act (the "408 EA"), and the other under Section 404 of the CWA (the "404 EA"). Based on those assessments, which together run over two hundred pages, plus appendices of nearly 200 pages more, the Corps determined that an EIS would not be necessary for this project and issued a FONSI.

         Atchafalaya Basinkeeper and other organizations interested in the Atchafalaya basin brought suit in January 2018 against the Corps and sought a preliminary injunction to redress alleged violations of NEPA and the CWA. Bayou Bridge and Stupp Brothers intervened as defendants. The district court held an expedited hearing even before the complete administrative record could be filed. The court's decision, filed soon afterward, rejected a number of Appellees' contentions but found that Appellees had shown irreparable harm and had demonstrated a likelihood of success on the merits as well as other prerequisites of preliminary relief for two of their claims: (1) the EAs violated NEPA and the CWA by failing to adequately analyze mitigation for the loss of cypress-tupelo swamp along the pipeline right of way through the Basin, and (2) the EAs violated NEPA and the CWA by failing to adequately consider historical noncompliance by other pipelines and the cumulative effects of this project. The resulting preliminary injunction stopped construction only "within the Atchafalaya Basin."

         Appellants sought a stay of the injunction pending appeal, which this court granted in a split decision.

         Appellants raise a number of issues for review: that the district court applied an incorrect standard for determining injunctive relief; abused its discretion in finding Appellees likely to succeed on the merits and affirming the other bases for injunctive relief; and issued an improper and overbroad injunction. We need only rule on the court's errors in assessing the likelihood that Appellees will succeed on the merits.[1]

         STANDARD OF REVIEW

         A grant of a preliminary injunction is reviewed for abuse of discretion. La Union Del Pueblo Entero v. FEMA, 608 F.3d 217, 220 (5th Cir. 2010). Factual determinations within the preliminary injunction analysis are reviewed for clear error, and legal conclusions within the analysis are reviewed de novo. Id. A preliminary injunction is an extraordinary remedy. In addition to proving a likelihood of prevailing on the merits, the movant must demonstrate a substantial threat of irreparable injury if the injunction is not granted; the threatened injury outweighs any harm that will result to the non-movant if the injunction is granted; and the injunction will not disserve the public interest." Id. at 219. The district court abuses its discretion if it relies on clearly erroneous factual findings in deciding whether to grant a preliminary injunction or relies on "erroneous conclusions of law." O'Reilly, 477 F.3d at 238 (internal citations and quotations omitted).

         The Corps' actions under the NEPA and CWA are subject to review under the Administrative Procedure Act ("APA"). As relevant here, a court will uphold an agency action unless it finds it to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Coastal Conservation Assoc. v. U.S. Dep't of Commerce, 846 F.3d 99, 110-11 (5th Cir. 2017). This is a demanding standard. The Supreme Court carefully explained factors that inform judicial review under this provision. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866-67 (1983), and its words are worth repeating here:

The scope of review under the "arbitrary and capricious" standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a "rational connection between the facts found and the choice made." In reviewing that explanation, we must "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

(citations omitted).

         DISCUSSION

         A. The district court decision.

         The district court analyzed at length each of the Appellees' specific challenges to the procedural and substantive sufficiency of the EAs. The court rejected the complaint that the Corps' analysis of the environmental impact on the Basin of possible oil spills was insufficient and therefore arbitrary and capricious. The court also rejected the assertion that the Corps provided defective public notice of the "type and location of the proposed mitigation" measures; as the court noted, the public comments, many of which were made by the Appellees here, were addressed and responded to by the Corps in 26 pages of the Section 404 EA.

         The court then focused on specific impacts of this project in the Basin, i.e., that 455.5 acres of "jurisdictional wetlands" will be temporarily affected and approximately 142 acres of those wetlands "[will] be permanently converted from forested to herbaceous wetlands within the permanent right-of-way." The Section 404 EA states that "[t]he proposed project will change and/or reduce wetland functional quality along the proposed ROW by conversion of forested habitat types." The EA identifies "[a] key issue(s) of concern in this watershed is the loss of wetland function and value."

         The court found three failures in the Corps' ultimate FONSI determination. First, the court acknowledged that "reliance on mitigation measures may reduce a project's impacts below the level of significance," quoting O'Reilly, 477 F.3d at 231, and the agency's reasoning "need not be laid out to the finest detail . . . ." However, "an EIS involving mitigation" may not be predicated on "mere perfunctory or conclusory language . . .," quoting O'Reilly, 477 F.3d at 231-32. The court believed the Corps was perfunctory.

         Second, the court accepted the Appellees' reading of the relevant CWA regulation, 33 C.F.R. §332.3, and concluded it does not "impos[e] a mechanical and rigid hierarchy" according to which out-of-kind mitigation credits within the watershed must be substituted for alternative in-kind mitigation alternatives. The court accordingly criticized the Corps' EAs for failing to discuss "how the mitigation choices serve[] the stated goal of 'replac[ing] lost functions and services;'" and failing to analyze in the Section 404 EA whether a 'preference' for mitigation bank credits was appropriate or whether the particular mitigation bank credits to be acquired are "located where it is most likely to successfully replace lost functions and services." (quoting 33 C.F.R. § 332.3(b)(1)). The court found the 404 EA "devoid" of data analyzing the consequence of the "irretrievabl[e] los[s]" of 142 acres of cypress/tupelo swamp wetlands. Consequently, "there is not one iota of discussion, analysis, or explanation" how out-of-kind credits mitigate the loss of function of the cypress/tupelo swamp. The court also found "precious little analysis" of what "best practices" the Corps required for Bayou Bridge's construction will be and how they offset temporary impacts of construction within the Basin. For these basic reasons, the court determined that the FONSI for this project was arbitrary and capricious.

         Third, the court also discussed Appellees' contention that because earlier pipeline projects through the Basin had created spoil banks and other detrimental conditions, the EAs did not properly address "cumulative impacts" of this project in terms of those defaults. The court agreed with Appellees' contention, referring to O'Reilly, 477 F.3d at 234-35, and 40 C.F.R. §§ 1508.7 and 1508.25. It concluded that Appellees had demonstrated a likelihood of success on the merits in showing the deficiency of the EAs.

         Bearing in mind that the Corps' NEPA obligation was limited to discussing relevant factors and explaining its decision, not to reaching conclusions that this court or the district court approves, Robertson v. Methow Valley Citizens Council, 490 U.S. 332, ...


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