Appeal from a final judgment of the United States District Court for the Southern District of New York (Owen, J.) which dismissed plaintiff's action seeking declaratory, injunctive and other relief under the National Environmental Policy Act, the Federal Water Pollution Control Act Amendments of 1972 and the State Environmental Quality Review Act.
Oakes, Pierce and Peck,*fn* Circuit Judges.
The Town of Orangetown appeals from a final judgment of the United States District Court for the Southern District of New York, Richard, Owen, Judge, 544 F. Supp. 105, dismissing plaintiff's challenge to the approval by the Environmental Protection Agency (EPA) of construction grants for the design and expansion of the Rockland County Sewer District No. 1 (RCSD) sewage treatment system, and for a portion of the construction costs of said expansion. At the heart of this appeal is the issue of the appropriate scope of judicial review of an administrative agency's decision-making process and the standard against which such decisions are to be measured.*fn1
On appeal, Orangetown's principal contentions are: (1) that the EPA acted unlawfully in failing to prepare an Environmental Impact Statement (EIS) before providing funds for the expansion and design of the RCSD waste treatment system, (2) that the agency acted in violation of its regulations in administering the subject federal construction grant program, (3) that the district court erred in determining that operation of the RCSD plant did not constitute a nuisance and, (4) that the court erred in dismissing plaintiff's New York State Environmental Quality Review Act (SEQRA) claim as barred by the statute of limitations. For the reasons stated hereinbelow, we affirm the district court's dismissal of the complaint.
The proposed project against which this action is directed involves the expansion of the sewage treatment plant of the Rockland County Sewer District No. 1. The project entails the expansion of the plant's sewage collection system and the installation of modern odor-control equipment. The waste treatment plant presently services the Rockland County Sewer District No. 1 which covers approximately 80 square miles and provides sewage treatment for 160,000 residents in the Towns of Clarkstown and Ramapo and the Villages of Spring Valley and New Square. Sewage from the district is piped into and treated at the plant's main facility in the Town of Orangetown, New York. Although the County's treatment plant is situated in Orangetown, that town's sewage is treated in its own plant, which is located less than one mile from the County plant.
In recent years, it has become apparent that the RCSD plant is inadequate to meet the area's present and future needs. The already overtaxed plant has experienced several equipment breakdowns and has been allegedly associated with foul and noxious odors. After commissioning a number of waste treatment studies of the plant system, the sewer district sought to expand the capacity of the RCSD plant's sewage disposal system and related piping, modernize its equipment, and repair the present plant facilities.
The existing RCSD sewage treatment plant presently has a design capacity to treat 3,800 cubic meters (10 million gallons per day, or "10 mgd"), but present wastewater flows substantially exceed this quantity. A large part of the excessive flow at the plant is due to the infiltration of groundwater and the inflow of stormwater into the interceptor and collection system.*fn2 As part of the project presently being proposed, the RCSD treatment plant will be expanded to 8,500 cu m (25 mgd) to handle existing and future sewage flows from the sewer district as well as the infiltration and inflow from groundwater and stormwater. The proposed sewerage system expansion will enable the RCSD to sewer presently unsewered areas of the RCSD, and relieve the burden on the present RCSD plant as well as on numerous smaller municipally and privately owned sewage treatment plants.
In 1976, pursuant to the EPA construction grant program, 40 C.F.R. § 35.900-35.970 (1982), the Town of Ramapo and the RCSD applied to the EPA for funding to initiate a planning process for the modernization and expansion of the RCSD waste treatment plant system.*fn3 The requests for funding were made pursuant to a three-step federal assistance program, the purpose of which is to assist municipalities in constructing waste treatment works. Id. § 35.903. Step I Funds pay the partial cost of generating a "Facilities Plan" which outlines the proposed project; Step II Funds pay the partial cost of designing the project; and Step III Funds help defray the costs of actual construction.
In response to the requests for funding, EPA made a grant of Step I Funding to the Town of Ramapo and the RCSD in 1976. During the next four years, a number of waste treatment studies or Sewer System Evaluation Surveys (SSES) were conducted and a nine-volume Facilities Plan was prepared by the RCSD and the Town of Ramapo. During the development of the various drafts of the Facilities Plan, coordination and exchanges of information were made with consulting engineering firms directly through the RCSD or through various federal and state agencies. Other data used in the planning process were obtained from the Rockland County Planning Board, local municipalities, and surveys of the sewer district and sewer system previously sponsored by state and federal agencies. During the same period, the RCSD held public information meetings and a formal public hearing so that pertinent documentation could be presented for review by the public and various environmental groups.*fn4 Based on data derived at the information meetings and public hearing, adjustments to the planning were made. Still further input to the planning process was provided through frequent negotiations between the RCSD, the New York State Department of Environmental Conservation (State DEC) and the Regional Administrator of the EPA. Due to this interaction of parties, the Facilities Plan was the subject of numerous amendments, and other subsequent modifications were incorporated into the facility's design. The record shows exchanges of correspondence indicating that specific proposals were made to both the State DEC and EPA and were given careful consideration. For example, the initial location of the administration building was changed to another site to overcome environmental concerns about protecting wetlands. Also, a meeting held August 6, 1980, between the agencies and RCSD led to deletion of a rear access road from the Facilities Plan, while a proposal to build prefabricated ventilated buildings over the first stage of rotating biological disks was included in the Facilities Plan to minimize advers environmental effects.
The Facilities Plan and related documents were submitted to the State DEC for its review and approval by late summer of 1980, and the State DEC, having worked in concert with the EPA and the applicants to conform the project to federal and state agency standards, certified the Facilities Plan to the Grants Administration Branch of the EPA on August 29, 1980.
Upon receipt of the Step II grant applications from the RCSD and Ramapo, the EPA performed an environmental review of the project. On the same date, the EPA issued a public statement which concluded that the agency had determined that "no significant impact will result from the proposed action."*fn5 Consequently, the agency determined not to prepare an Environmental Impact Statement (EIS) before granting construction funds for the project. Instead, the EPA attached to the public notice of "no significant impact," a thirty-four page Environmental Assessment (EA), which described the facilities planning area of the project, set forth the purpose of and need for the project, identified the selected plan and its costs, evaluated the environmental consequences of the various alternatives to expanding the present plant system and listed, inter alia, the projected effects on wetlands, floodplains, vegetation, and sedimentation. The EA also outlined the steps taken to minimize adverse environmental consequences and listed the Special Grant Conditions which would be attached to any federal construction grants in order to protect environmentally sensitive areas from development.
On September 30, 1980, the EPA offered a Step II design grant to the RCSD in the amount of $2,858,627 and to Ramapo in the amount of $505,950. The grants were accepted by both applicants in November, 1980. However, before the RCSD could apply for Step III construction funding, the Town of Orangetown commenced the instant action challenging the EPA's environmental processing of the applications. Plaintiff's amended complaint asserted five causes of action primarily seeking declaratory and injunctive relief. The first claim alleged that the environmental processing of the RCSD project violates the National Environmental Policy Act (NEPA); the second claim alleged that the award of Step II grants violates the Clean Water Act (CWA); the third claim alleged that the state and local defendants violated the State Environmental Quality Review Act (SEQRA) by unlawfully treating the project as excluded from the requirements of that Act; and the fourth and fifth claims sought injunctive and monetary relief for the improper operation of the County plant, which plaintiff alleged to be a nuisance.*fn6 In their answers, RCSD and Ramapo asserted counterclaims seeking injunctive and monetary relief and alleged that Orangetown's own sewerage treatment plant constituted the nuisance in the area.
At pretrial proceedings, the district court granted the State DEC's motion to dismiss the third (SEQRA) claim as barred under the applicable state statute of limitations.*fn7 Trial on the nuisance issues and EPA's finding of no significant impact began on October 12 and continued until October 27, 1982. Upon completion of the plaintiff's case, the district court dismissed the fifth claim as against the County Defendants and EPA, and the fourth claim as against the State DEC and EPA for failure to state a claim upon which relief could be granted.*fn8
On January 24 and 25, 1983, the district court issued findings of fact and conclusions of law on the NEPA, CWA and nuisance claims before dismissing the counterclaims and plaintiff's complaint in its entirety. Specifically, the court denied the relief sought after finding that, based upon the administrative record, the EPA had considered the relevant environmental factors in determining that the project would not have a significant impact on the environment. The court also concluded that EPA's action in approving the Step II and Step III, Phase I grants fully complied with NEPA and CWA provisions, as well as the EPA's construction grant regulations. In addressing the nuisance claims, the court found that the evidence presented did not support a finding that either plant constituted a public nuisance.
On January 1, 1970, the National Environmental Policy Act (NEPA) was enacted to promote a national policy which would "encourage productive and enjoyable harmony between man and his environment." 42 U.S.C. § 4321 (1976). To achieve this national policy, NEPA requires that federal agencies proposing "major Federal actions significantly affecting the quality of the human environment" include in their proposals or recommendations an EIS which provides an assessment of the beneficial and adverse environmental impacts of the proposed action. Id. § 4332(2)(C). An EIS is evidence that an agency has considered the reasonably foreseeable environmental effects of a proposed major action before making a decision to take the action. However, no EIS is required where the major federal action is not "significant" within the meaning of NEPA. Hanly v. Kleindienst, 471 F.2d 823, 830 (2d Cir. 1972), cert. denied, 412 U.S. 908, 36 L. Ed. 2d 974, 93 S. Ct. 2290 (1973) ("Hanly II"); Hanly v. Mitchell, 460 F.2d 640, 644 (2d Cir.), cert. denied, 409 U.S. 990, 93 S. Ct. 313, 34 L. Ed. 2d 256 (1972) ("Hanly I"). Essential to the outcome herein is the determination whether the EPA erred in deciding that providing partial funding for the modernization and expansion of the RCSD sewage treatment system will not "significantly" affect the quality of the human environment in Rockland County Sewer District No. 1 and, in particular, in the Town of Orangetown.
The issue of whether a particular agency's action will have a "significant" effect on the environment is a substantive issue which has traditionally been left to the informed discretion of the agency proposing the action or project. Sierra Club v. United States Army Corps of Engineers, 701 F.2d 1011, 1029 (2d Cir. 1983). See also Scenic Hudson Preservation Conference v. Federal Power Commission, 453 F.2d 463, 480 (2d Cir. 1971) ("The resolution of highly complex technological issues such as these was entrusted by Congress to the [agency] and not to the courts."), cert. denied, 407 U.S. 926, 32 L. Ed. 2d 813, 92 S. Ct. 2453 (1972). NEPA does, however, provide a procedural framework within which substantive judgments must be made. The courts must ensure that agencies comply with the ...