North Idaho Community Action Network (NICAN) challenged a proposed highway construction project on U.S. Highway 95 in northern Idaho, alleging the defendant agencies[1] (collectively USDOT) violated the National Environmental Policy Act (NEPA)[2] and the Department of Transportation Act (DTA).[3] The United States District Court for the District of Idaho granted summary judgment in favor of defendants, and NICAN appealed. The Ninth Circuit affirmed as to the NEPA claims, holding that USDOT: 1) fulfilled its obligations under NEPA's alternatives provision, 2) comported with NEPA by taking a hard look at dredging impacts, 3) did not violate NEPA by failing to consider a tunnel alternative, 4) sufficiently considered impacts to historical properties, and 5) did not violate NEPA by failing to issue a supplemental environmental impact statement. The Ninth Circuit reversed as to one of the two DTA claims, holding that USDOT violated the statute by issuing a record of decision prior to evaluating impacts of all project phases on historical properties, and affirmed as to the other, holding that formal evaluation of historical properties was not required for project modifications.

USDOT proposed a four-phase construction project (the Project) to improve U.S. Highway 95 in and around Sandpoint, Idaho. The first, second, and fourth phases involved widening the highway to four lanes; the third phase involved realigning a two-mile stretch of the highway to bypass downtown Sandpoint. USDOT approved a final environmental impact statement (EIS) in September 1999 and issued a record of decision for the Project in May 2000. USDOT released an environmental assessment (EA) in April 2005 that included design changes related to the third phase of the project (Sand Creek Byway). The 2005 EA concluded the changes would not have significant impacts beyond those already considered. Based on this conclusion, USDOT issued a finding of no significant impact (FONSI). USDOT then prepared an environmental reevaluation in August 2006 (Reevalution), setting forth additional changes to project design, including the dredging of Sand Creek, and assessing their possible environmental effects. The 2006 Reevaluation concluded there was no additional significant impact and that neither a supplemental environmental impact statement (SEIS) nor a further EA was required. NICAN challenged USDOT's approval of the Project in district court in July 2005, after the 2005 EA and FONSI but before preparation of the 2006 Reevaluation. Reviewing the district court's grant of summary judgment de novo[4] for arbitrary and capricious action by USDOT,[5] the Ninth Circuit began by addressing NICAN's five NEPA claims.

First, NICAN argued that USDOT violated NEPA because the 2005 EA did not consider alternatives to the project design changes described in the 2005 EA. The Ninth Circuit disagreed, holding that USDOT fulfilled its obligations under NEPA when it considered and discussed two alternatives in the 2005 EA: the Project with the design changes proposed in the 2005 EA and the Project as described in the 1999 EIS. NEPA requires agencies to "study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources."[6] Although an agency's obligation to consider alternatives applies whether an agency is preparing an EIS or an EA, "an agency's obligation to consider alternatives under an EA is a lesser one than under an EIS."[7] An agency is required to "[r]igorously explore and objectively evaluate all reasonable alternatives"[8] for an EIS but is only required to include a brief discussion of reasonable alternatives for an environmental assessment.[9] Here, the Ninth Circuit held that because "the design changes to the Project proposed in the 2005 EA will not result in significant environmental effects that were not previously evaluated in the 1999 EIS," USDOT's brief discussion of only two alternatives was sufficient under NEPA.[10]

Second, NICAN argued that USDOT violated NEPA by failing to disclose and assess the impacts of dredging Sand Creek in the 2005 EA or in a supplemental EA. The Ninth Circuit disagreed, holding that USDOT did not act arbitrarily or capriciously in making the determinations and that it complied with NEPA in its evaluation of the proposed dredging. The factual record indicated there was not enough information about dredging and its possible impacts at the time USDOT prepared the 2005 EA. After more information became available, USDOT performed the 2006 Reevaluation and concluded that dredging would not have significant environmental impacts beyond those already identified. The court was satisfied that USDOT took the requisite "hard look" at the impacts of dredging in the 2006 Revaluation and that USDOT properly concluded that nothing in the Reevaluation necessitated a SEIS or supplemental EA.[11]

Third, NICAN argued that USDOT violated NEPA by failing to consider a tunnel alternative for the Project which was not identified until June 2006. The Ninth Circuit disagreed, holding that NEPA's mandate to consider new information extends only to information or circumstances regarding environmental impacts that may not have been appreciated or considered when the EIS was prepared and does not extend to new alternatives absent "substantial changes in the proposed action relevant to environmental concerns."[12] Here, the tunnel alternative and its environmental impacts were neither new information nor a new circumstance not considered when the 1999 EIS was prepared; nor was there a substantial change to the Project relevant to environmental concerns. Accordingly, the Ninth Circuit concluded USDOT did not violate NEPA by failing to consider the tunnel alternative.

Fourth, NICAN argued that USDOT violated NEPA by 1) taking a phased approach to the Project's impact on historic properties and 2) failing to take a "hard look" at how the construction and operation of the project would affect the Burlington Northern Railroad Depot. The Ninth Circuit disagreed, holding USDOT's broad overview in the 1999 EIS of the Project's impacts on historic properties, coupled with the specific and detailed analysis of the impacts of the Sand Creek Byway, was more than sufficient to meet NEPA's requirements regarding historic properties. The court explained that "NEPA requires federal agencies to consider the environmental impact of major federal actions" but imposes no independent requirement that an agency examine nonenvironmental impact of federal actions on historic properties.[13]

Fifth, NICAN argued that USDOT violated NEPA by failing to prepare an SEIS. The Ninth Circuit disagreed, holding that USDOT's determination that the changes to the Project would not significantly impact the environment in a way not previously considered, and therefore an SEIS was not required, and was not arbitrary or capricious. An agency is required to prepare an SEIS only if changes, new information, or circumstances may result in significant environmental impacts "in a manner not previously evaluated and considered."[14] An agency may prepare an environmental report or an EA to assist it in determining whether an SEIS is required.[15] Here, USDOT considered the changes to the Project and their impacts in both an EA and a Reevaluation, but determined those impacts were not sufficiently significant or adverse to require an SEIS. Specifically, construction of 1.1 acres of additional wetland area mitigated the 0.32 additional acres of wetlands affected by the modified Project. The court also noted the impacts of the Project were considered in the 1999 EIS, the 2005 EA, and the 2006 Reevaluation. Cumulatively, the court said, these documents showed that USDOT sufficiently considered environmental impacts.

The Ninth Circuit next considered the alleged violations of the DTA.[16] NICAN argued that USDOT violated section 4(f) the DTA 1) by failing to survey, identify, and evaluate historical properties for all four phases of the project, and 2) by determining that a DTA analysis was not required because the construction and operation of the project would not result in "use" of the historic property. Section 4(f) allows for a federal project "requiring the use of land of an historic site" to be approved only if "there is no prudent and feasible alternative to using that land and the program or project includes all possible planning to minimize harm to the park, recreation area, wildlife and waterfowl refuge, or historic site resulting from the use."[17] The Ninth Circuit reversed on the first issue raised by NICAN, holding that an agency is required to complete the section 4(f) evaluation for the entire project prior to issuing its record of decision.

In considering the proper remedy for this violation, the Ninth Circuit determined that, while the agencies had technically violated the DTA by issuing a record of decision before completing the section 4(f) evaluation for the entire Project, "the scope of injunctive relief should be limited to precluding the [USDOT] from commencing construction of the remaining three phases of the Project until the section 4(f) evaluation has been fully completed."[18] The Ninth Circuit reasoned that because all parties agreed the section 4(f) evaluation had been fully completed for the Sand Creek Byway phase of the project, it was unnecessary to enjoin that portion of the Project.

The Ninth Circuit affirmed on the second DTA issue, holding USDOT did not act arbitrarily or capriciously in determining that modifications to the Project discussed in the 2005 EA would not "use" the depot property within the meaning of section 4(f). The court explained that the modifications at issue were either improvements which would benefit the Depot and thus not permanently incorporate the Depot property into a transportation facility,[19] or temporary and minor improvements which properly constituted a temporary occupancy, and not a "use" under section 4(f).[20]

In summary, the Ninth Circuit affirmed the decision of the district court as to the NEPA claims, reversed and remanded the DTA claim regarding issuance of a record of decision with instructions to the district court to enter a limited injunction, and affirmed as to USDOT's evaluation of historical properties for modifications under the DTA.