by Brian R. Dugdale, Associate

As society focuses more and more on environmental issues implicated by large-scale construction and development, the construction industry must conduct its work with increasing caution.  The Environmental Protection Agency, The United States Green Building Council, a myriad of other federal, state and local agencies, thousands of interest groups, private companies and individuals alike have collectively  accepted the charge of safeguarding the environment.  As land, water, wildlife, fossil fuels and historical landmarks become more precious, and the protectorate more aggressive, those in the construction industry must be intensely aware of the impacts of their work and the ongoing push for accountability. 

While those monitoring and enforcing environmental  policy  are  becoming increasingly vigilant, the construction industry as a whole may not necessarily follow at all times in lockstep.  With violation consequences ranging from substantial fines to devastating suspensions of work and criminal charges, however, the industry must increase its efforts to comply with pertinent environmental regulations.  Proper attention to these regulations in advance of enforcement can save considerable time and expense. 

Recently, the United States Court of Appeals for the Ninth Circuit issued a decision discussing certain impacts of a federally funded highway project and highlighting the type of awareness owners and builders must exercise.  In North Idaho Community Action Network v. United States Dept. of Transportation, 545 F.3d 1147 (9th Cir. 2008), a small grassroots organization sought to halt a joint federal and state highway project (the “Project”) for its alleged violation of National Environmental Policy Act (“NEPA”),42 U.S.C § 4321 et seq., as well as Section 4(f) of the Department of Transportation Act (“DTA”), 49 U.S.C. § 303(c).

The United States Department of Transportation,  the  Federal  Highway Administration, and the Idaho Department of Transportation (the “Agencies”), issued their required Environmental Impact Statement (“EIS”) in 1999 and a Record of Decision(“ROD”) approving the Project in 2000  The design consisted of three separate phases to widen an existing stretch of US-95 running through Sandpoint, Idaho, and one additional phase to create a byway diverting through-traffic away from Sandpoint (the “Sand Creek Byway”).  The critical Sand Creek Byway phase originally consisted of building two miles of two-lane highway, a partial interchange and bridge structure over the Sand Creek waterway, and a full diamond interchange joining US-95 and a smaller state highway.  By 2006, after years of discussion, the Agencies had reevaluated, modified and re-approved the Project.  The modified Sand Creek Byway plans included a third highway lane, additional bridges and structures, pedestrian and bicycle pathways, additional off-ramps, artificial habitats, aesthetic improvements, and a new dredging plan calling for the removal of 17,035 cubic yards of material from Sand Creek. 

After the Agencies approved all changes, they reevaluated the Project’s environmental impact and determined that no new impacts were presented and that neither an additional Environmental Assessment (“EA”) nor a Supplemental  Environmental  Impact Statement (“SEIS”) was required.  During the reevaluation phase, and before the Agencies commenced construction, the North Idaho Community Action Network (“NICAN”) filed a several strictly procedural requirements of the lawsuit based on the predicted environmental impacts of the Project, alleging that under NEPA, the Agencies:  1) failed to consider appropriate construction alternatives; 2) failed to disclose and analyze the effects of dredging activities; 3) failed to consider alternative construction of a tunnel; 4) failed to consider the impacts of the Project on historic properties; and 5) failed to submit a SEIS after approving the changes.  In a separate cause of action under DTA, NICAN again alleged that the Agencies failed sufficiently to evaluate the Project’s impact on historic properties.  NICAN sought to enjoin construction and overturn approval of the Project.  Under the Administrative Procedure Act, a court may set aside Project approval where agency actions are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”  5 U.S.C. § 706(2)(A). 

The United States District Court for the District of Idaho ruled for the Agencies on summary judgment and dismissed each of NICAN’s claims, prompting NICAN’s appeal.  The Ninth Circuit granted temporary injunctive relief and reviewed the Agencies’ pre-construction activities in detail.  The Court found the Agencies in compliance with NEPA, “our basic national charter for protection of the environment,” which imposes the above strictly procedural requirements to make certain that agencies will have available and carefully consider detailed information concerning significant environmental impacts, and further, that the relevant information will be made publicly accessible. 

First, with respect to NICAN’s allegation under NEPA that the Agencies failed to study, develop and describe appropriate alternatives to the course of action established by the modified Project designs, the Court found that the Agencies sufficiently considered appropriate alternatives, albeit only two.  Second, with respect to the dredging of Sand Creek, the Court found that the Agencies had taken an additional “hard look” at the impacts of dredging in 2006, and concluded reasonably that no new impact issues had arisen since the original EIS issued in 1999.  Regarding the proposed tunnel alternative to the Sand Creek  Byway, the Court held that under NEPA, the Agencies were not required to reevaluate an alternative considered under a prior EIS, where subsequent modifications to the Project did not present significant changes in the proposed action relevant to environmental concerns.  In other words, where the Agencies considered the tunnel alternative in 1999, the mere passage of time and subsequent design modifications did not necessarily require that they consider that suggestion again. 

In response to NICAN’s fourth NEPA argument, that the Agencies failed to consider the Project’s impact on historic properties, specifically, a landmark railroad depot (the “Depot”), the Court held that while NEPA requires broad consideration of environmental impacts, it does not require that historic properties be individually identified and considered.  Further, to the extent that the Depot was a part of the “environment” to be considered under NEPA, the Agencies took appropriate steps to protect the Depot from major impacts.  Lastly, the Court found that the Agencies were not required to issue a supplemental EIS simply because there were changes to the Project design.  That the Agencies issued less burdensome reports such as an intermediate EA in 2005 and other reevaluation documents was satisfactory, in light of the fact that the design changes after the year 2000 only minimally affected a small portion of additional wetlands, and did not substantially impact the environment in ways not considered in the 1999 EIS. 

The Court then turned its attention to NICAN’s allegations under DTA § 4(f), which allows federal projects on historic sites only if there is no prudent, feasible alternative and the project includes all possible planning to minimize harm to the historic site.  An analysis under DTA § 4(f) is required for the entirety of a federally funded project prior issuance of the initial EIS and ROD.  The Agencies, however, elected to use a “phase by phase” approach, analyzing DTA § 4(f) impacts on individual phases of the Project across time.  As of 2006, six years after the ROD was issued, the Agencies had only analyzed § 4(f) impacts across one phase.  The Court concluded that the Agencies violated § 4 (f) by failing to consider the impacts on historical sites across the entire  Project prior to issuance of the ROD, and awarded partial injunctive relief as to the three widening phases for which a § 4 (f) analysis was not complete.  The Court did allow construction of the Sand Creek Byway to commence as the Agencies had already achieved DTA and NEPA compliance with respect to that particular phase. 

As a result of the litigation, the Project was delayed for over two years.  Further, while the most critical phase, the Sand Creek Byway, was the one phase in total compliance with both NEPA and DTA and was allowed to proceed, the other three phases of the Project remained delinquent under DTA § 4(f) over eight years after the ROD issued, and may further increase expenses and delay the Project until the Agencies achieve compliance with DTA.

NICAN is instructive for participants in all types of projects, as it highlights generally the type of critical pre-construction steps and environmental concerns that can be overlooked.  Cost, design, labor, time, materials, safety and organization issues, among others, are always natural concerns. It may be easy though, in the midst of extensive planning and design, to overlook or misinterpret behind-the-scenes requirements such as the NEPA and DTA policies discussed above.  More vigilance and increased effort toward compliance with environmental regulation can help to avoid project delays and the burden of litigation


The information or opinion provided in this article is the author's own and not necessarily that of Watt, Tieder, Hoffar & Fitzgerald, LLP. The author is solely responsible for the information and opinion that he or she has provided. The information contained herein does not replace seeking specific legal counsel to directly address individual client needs.

Watt, Tieder, Hoffar & Fitzgerald is one of the largest construction law firms in the world, with a practice that encompasses all aspects of construction contracting, claims and disputes resolution, and transactional legal services. WTHF principally represents large general contractors, design firms, and sureties throughout the country and internationally.