894 F.3d 692
5th Cir.2018Background
- The Army Corps issued Section 404 (CWA) and Rivers & Harbors Act permits allowing a 162-mile crude oil pipeline to cross wetlands in the Atchafalaya Basin; Corps prepared two Environmental Assessments (EAs) and a FONSI, concluding no EIS required.
- Plaintiffs (Atchafalaya Basinkeeper et al.) sued alleging NEPA and CWA violations and obtained a preliminary injunction halting construction in the Basin based on likelihood of success on two claims: inadequate analysis of mitigation for loss of cypress-tupelo swamp and inadequate cumulative-effects analysis including historical noncompliance by other pipelines.
- The district court found the Corps’ EAs perfunctory regarding mitigation, criticized reliance on out-of-kind mitigation credits, and found insufficient cumulative-impact analysis.
- The Corps and Bayou Bridge appealed; the Fifth Circuit panel majority vacated the preliminary injunction, holding the Corps’ EAs (and use of the Louisiana Rapid Assessment Method, LRAM) provided a rational basis for FONSI and for approving in-basin out-of-kind mitigation credits, and that the EAs adequately addressed cumulative impacts.
- The majority concluded the district court misapplied O’Reilly by treating this as a “mitigated FONSI” and overlooked the Corps’ LRAM-based functional assessment and permit conditions (construction BMPs, monitoring, enforceable mitigation bank purchases).
- A dissent argued the administrative record fails to show why out-of-kind mitigation "will serve the aquatic resource needs of the watershed," that the LRAM does not justify one-to-one substitution across resource types, and that ambiguous/masked reliance on mitigation requires O’Reilly scrutiny.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Corps’ FONSI was arbitrary and capricious because mitigation made impacts insignificant (mitigated FONSI issue) | Corps effectively issued a mitigated FONSI and failed to explain how mitigation would render impacts insignificant (O’Reilly) | Corps argued this was a single FONSI supported by detailed EAs and not a mitigated-FONSI problem; guidance allows use of mitigation and mitigated-FONSI framework | Majority: Corps did not issue a flawed mitigated FONSI; EAs and record supply a rational connection between facts and decision, so not arbitrary and capricious |
| Whether Corps lawfully authorized out-of-kind mitigation credits (cypress-tupelo mitigated by bottomland hardwood credits) under 33 C.F.R. §332.3(e)(2) | Out-of-kind swap not justified: Corps did not document that out-of-kind mitigation "will serve the aquatic resource needs"; LRAM does not translate resource-type differences | Corps relied on LRAM functional assessment, mitigation hierarchy in §332.3, and lack of available in-kind credits; documented requirement and use of LRAM in EA | Majority: Use of LRAM and administrative record reasonably support Corps’ decision to permit in-basin out-of-kind credits; not arbitrary and capricious. Dissent: disagreed, saying LRAM is silent on cross-type substitution and record inadequate |
| Whether Corps adequately analyzed cumulative impacts, including prior spoil banks and noncompliance history | Corps failed to meaningfully analyze cumulative effects and past noncompliance undermines mitigation effectiveness | Corps considered past/present/future actions, concluded no incremental impact given mitigation and permit conditions; monitoring and enforceable mitigation reduce uncertainty | Majority: EAs addressed cumulative impacts and concluded no incremental effect; Corps’ approach was not myopic and complied with NEPA. Dissent viewed record as ambiguous |
| Whether preliminary injunction was proper given likelihood of success and irreparable harm standard | Plaintiffs showed likelihood of success and irreparable harm warranting injunction | Corps argued district court misapplied legal standards and relied on erroneous factual/legal findings | Majority: District court abused discretion by misapplying law and overlooking LRAM; vacated injunction. Dissent: would affirm injunction given record gaps regarding mitigation justification |
Key Cases Cited
- O'Reilly v. U.S. Army Corps of Eng'rs, 477 F.3d 225 (5th Cir. 2007) (requires agencies to explain how mitigation will render impacts insignificant when mitigation is integral to a FONSI)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (Sup. Ct. 1983) (arbitrary and capricious standard: agency must show rational connection between facts and decision)
- Nat'l Ass'n of Home Builders v. Defs. of Wildlife, 551 U.S. 644 (Sup. Ct. 2007) (agency path reasonably discernible from the record suffices under APA review)
- Marsh v. Oregon Nat. Res. Council, 490 U.S. 360 (Sup. Ct. 1989) (deference to agency scientific methodology)
- Kentuckians for the Commonwealth v. U.S. Army Corps of Eng'rs, 746 F.3d 698 (6th Cir. 2014) (deference to Corps’ functional proxies in mitigation credit calculations)
- Nw. Envtl. Advocates v. Nat'l Marine Fisheries Serv., 460 F.3d 1125 (9th Cir. 2006) (finding no need for extensive cumulative-effect discussion where agency finds no incremental impact)
- Louisiana Crawfish Producers Ass'n-West v. Rowan, 463 F.3d 352 (5th Cir. 2006) (past environmental losses are part of cumulative impacts but not dispositive of future project impacts)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (Sup. Ct. 2008) (standard for injunctive relief requires serious questions and balance of hardships; Court noted debate over sliding-scale tests)
- Sabine River Auth. v. U.S. Dep't of Interior, 951 F.2d 669 (5th Cir. 1992) (EA as initial NEPA step)
- La Union Del Pueblo Entero v. FEMA, 608 F.3d 217 (5th Cir. 2010) (preliminary injunction standard review and factors)