US Environmental Laws Increasingly Lead to Litigation Concerning the Siting and Construction of New Infrastructure Projects

Originally published February 23, 2010

Keywords: US Environmental laws, siting, construction, new infrastructure projects, government grants, NEPA, DOT, FTA

As new infrastructure projects begin to sprout across the United States in response to new government grants, incentives and stimulus plans, those seeking to capitalize on what President Obama calls "the largest new investment into the nations infrastructure since Eisenhower built an interstate highway system in the 1950s" are running into legal roadblocks. More specifically, they are finding that the complex web of US environmental laws not only makes it difficult to progress swiftly on infrastructure projects, but also enables project opponents to halt, delay or force changes in projects by filing lawsuits alleging noncompliance with environmental laws. Many infrastructure projects, in particular greenfields projects, are often sited in areas containing rare flora and fauna, cultural resources or protected wetlands. Failure to address proactively the environmental issues that arise as a result can easily lead to government- or citizen-initiated litigation or agency action that interferes with a project's completion.

For example, on January 19, 2010, a group of community organizations and individuals—including a Minnesota branch of the National Association for the Advancement of Colored People — sued three government agencies over their decision to construct a light rail transit (LRT) system through a historically black community, saying the plan violates National Environmental Policy Act (NEPA).1 More specifically, the complaint alleges that the US Department of Transportation (DOT), the Federal Transit Administration (FTA) and the local Metropolitan Council's plan to build an 11-mile light rail transit line through St. Paul's Rondo Neighborhood violates NEPA in that it "failed to prepare an adequate environmental impact statement that adequately addresses the direct, indirect and cumulative adverse impact of the LRT project or adequately considers mitigation of the adverse impacts of the LRT project." The complaint requests both an order vacating the FTA's decision approving the report as well as an injunction barring any agencies from proceeding with the project until their alleged NEPA violations have been corrected.

Infrastructure investors, lenders and developers are well advised to take special care to ensure early in a project that they understand, and comply with, the many facets of federal, state and local environmental laws, and also make an assessment of the risk and cost of litigation. Federal stimulus funding often comes with deadlines for obligation of funds, and thus delays can endanger the availability of those funds. Moreover, a violation of certain environmental laws can lead to severe civil and criminal penalties/fines, and in some cases, even imprisonment.

This update outlines some of the key areas in which environmental litigation is a significant risk for infrastructure projects.

National Environmental Policy Act

NEPA should be considered any time the federal government takes action. Projects on federal land, involving federal funding or involving federal agency action (e.g., a right of way from the US Bureau of Land Management, a Clean Water Act permit to fill wetlands or approval from the Federal Highway Administration (FHWA) to connect to the Interstate Highway System) generally mandate compliance with NEPA's review provisions. NEPA requires completion of an Environmental Impact Statement (EIS) for "major Federal actions significantly affecting the quality of the human environment."2 Every EIS must provide a "full and fair discussion of significant environmental impacts" of the proposed agency action and often takes months, if not years, to complete.3

The fact that NEPA review is required does not necessarily mean a full-blown EIS will be mandated. The Council on Environmental Quality regulations set forth a process by which agencies determine whether an action requires an EIS. This process usually begins with an agency decision on whether a proposed action should be categorically excluded.4 If an action is not categorically excluded, the agency may then decide to prepare an "environmental assessment."5

An environmental assessment is a "concise public document" that determines whether the federal action is "significant" enough to require an impact statement.6 If it is not sufficiently significant, the agency prepares a "finding of no significant impact" and the NEPA process is generally complete.7 If, on the other hand, the environmental assessment leads to the conclusion that an EIS is necessary, the lead agency must prepare a Notice of Intent to prepare an EIS and proceed with the EIS process. A supplemental environmental impact statement may be required when new information of changed circumstances requires one.

NEPA, if triggered, requires a public process. State and federal agencies, Native American tribes, local residents, environmental groups and other interested parties all have the right to comment on a proposed EIS. Significant delays in a project may result. In addition, NEPA decisions (including a finding of "no significant impact" that eliminates the need to prepare an EIS), the adequacy of the EIS itself and a decision not to prepare a supplemental EIS are all subject to judicial review.8

Judicial review under NEPA is conducted pursuant to the Administrative Procedures Act. As a result, NEPA litigation is focused on whether the agency followed the procedural requirements of NEPA. The substantive decision, such as the selection of a specific alternative, cannot be challenged, even if the court disagrees with the decision or with the agency's conclusions about environmental impacts.9 "NEPA itself does not mandate particular results," but rather "imposes only procedural requirements on federal agencies with a particular focus on requiring agencies to undertake analyses of the environmental impact of their proposals and actions."10

Many states have their own versions of NEPA. NEPA litigation is commonplace and is often used by opponents to thwart private projects. Courts have held that NEPA reviews can be held inadequate if they fail to include an analysis of an action's impact on greenhouse gas emissions as well as climate change.11 Consequently, the infrastructure industry needs to consider potential greenhouse gas emissions and climate change impacts associated with infrastructure projects, issues which are certain to become a bigger focus in the future.

The Department of Transportation (DOT) Act of 1966: Section 4(f)

The DOT Act of 1966 states that the FHWA and...

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