Coliseum Square Ass'n v. Jackson

United States Court of Appeals

Fifth Circuit

F I L E D

REVISED SEPTEMBER 21, 2006

September 18, 2006

UNITED STATES COURT OF APPEALS

Charles R. Fulbruge III

For the Fifth Circuit Clerk

No. 03-30875

COLISEUM SQUARE ASSOCIATION, INC.,

SMART GROWTH FOR LOUISIANA,

LOUISIANA LANDMARKS SOCIETY, INC.,

HISTORIC MAGAZINE ROW ASSOCIATION

and THE URBAN CONSERVANCY, INC.

Plaintiffs-Appellants,

VERSUS

ALPHONSO JACKSON, ETC; ET AL

Defendants,

ALPHONSO JACKSON, ACTING SECRETARY,

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

and HOUSING AUTHORITY OF NEW ORLEANS

Defendants-Appellees

- - - - - - - - - - - - - - - - - - - -

____________________________

No. 04-30522

____________________________

COLISEUM SQUARE ASSOCIATION, INC.,

SMART GROWTH FOR LOUISIANA,

LOUISIANA LANDMARKS SOCIETY, INC.,

HISTORIC MAGAZINE ROW ASSOCIATION

AND THE URBAN CONSERVANCY, INC.

1

Plaintiffs-Appellants,

VERSUS

HOUSING AUTHORITY OF NEW ORLEANS,

an agency of the State of Louisiana,

ALPHONSO JACKSON, ACTING SECRETARY,

UNITED STATES DEPARTMENT OF HOUSING

AND URBAN DEVELOPMENT,

Defendants-Appellees

VERSUS

HISTORIC RESTORATION, INC.,

Intervenor-Appellee

Appeals from the United States District Court

for the Eastern District of Louisiana

Before JONES, Chief Judge, and KING and DENNIS, Circuit

Judges.

DENNIS, Circuit Judge:

In this case, we are called upon to decide whether

the National Environmental Policy Act of 1969 (NEPA), 42

U.S.C. §§ 4321-4370f), and the National Historic

Preservation Act (NHPA), 16 U.S.C. §§ 470f-470x-6,

2

require the United States Department of Housing and Urban

Development (HUD) to cease federal funding for the St.

Thomas Housing Development revitalization project in the

City of New Orleans until the agency completes further

evaluation of the project’s environmental and historic

preservation impacts. Because it does not appear that HUD

has acted arbitrarily, capriciously or contrary to law in

its study, consideration, and findings regarding the

project’s environmental impacts, we conclude that these

statutes impose no further requirements on HUD at this

time.

I.

A brief overview of the statutes and regulations

creating the administrative framework, terminology and

objectives helps to understand the case. After describing

the bureaucratic order, we then turn to the factual and

procedural background.

A.

3

1.

“NEPA establishes a ‘national policy [to] encourage

productive and enjoyable harmony between man and his

environment,’ and was intended to reduce or eliminate

environmental damage and to promote ‘the understanding of

the ecological systems and natural resources important

to’ the United States.” Dep’t of Transp. v. Pub. Citizen,

541 U.S. 752, 756 (2004) (quoting 42 U.S.C. § 4321).

“‘NEPA itself does not mandate particular results” in

order to accomplish these ends.”’ Pub. Citizen, 541 U.S.

at 756 (quoting Robertson v. Methow Valley Citizens

Council, 490 U.S. 332, 350 (1989)). Instead, NEPA imposes

procedural requirements on federal agencies, requiring

agencies to analyze the environmental impact of their

proposals and actions. Pub. Citizen, 541 U.S. at 756-57.

NEPA’s central requirement is that federal agencies must:

include in every recommendation or report on

proposals for legislation and other major

Federal actions significantly affecting the

quality of the human environment, a detailed

statement by the responsible official on-(i) the

environmental impact of the proposed action,

(ii) any adverse environmental effects which

cannot be avoided should the proposal be

4

implemented, (iii) alternatives to the proposed

action, (iv) the relationship between local

short-term uses of man's environment and the

maintenance and enhancement of longterm

productivity, and (v) any irreversible and

irretrievable commitments of resources which

would be involved in the proposed action should

it be implemented.

42 U.S.C. § 4332(2); see also Pub. Citizen, 541 U.S. at

757.

Federal agencies receive guidance in their

preparation of this detailed “Environmental Impact

Statement”, or “EIS”, from the Council of Environmental

Quality (“CEQ”). Established by NEPA with the authority

to issue regulations interpreting that statute, the CEQ

has promulgated regulations determining what actions are

subject to that statutory requirement. See 40 C.F.R. §

1500.3; see also Pub. Citizen, 541 U.S. at 757. According

to these regulations, the agency may instead prepare a

more limited document, called an Environmental Assessment

(“EA”), if the proposed action is categorically excluded

from the requirement to produce an EIS or does not

clearly require the production of an EIS. Pub. Citizen,

541 U.S. at 757 (citing 40 C.F.R. §§ 1501.4(a),(b)). An

5

EA, as compared to an EIS, should be a “concise public

document...that serves to...[b]riefly provide sufficient

evidence and analysis for determining whether to prepare

an [EIS].” 40 C.F.R. § 1508.9(a). “If, pursuant to the

EA, an agency determines that an EIS is not required

under applicable CEQ regulations, it must issue a

‘finding of no significant impact’ (FONSI), which briefly

presents the reasons why the proposed agency action will

not have a significant impact on the human environment.”

Pub. Citizen, 541 U.S. at 757 (citing 40 C.F.R. §§

1501.4(e), 1508.13).

2.

“The National Historic Preservation Act (“NHPA”), 16

U.S.C. §§ 470-470x-6, ‘requires each federal agency to

take responsibility for the impact that its activities

may have upon historic resources, and establishes the

Advisory Council on Historic Preservation...to administer

the Act.’” Nat'l Mining Ass'n v. Fowler, 324 F.3d 752,

755 (D.C.Cir. 2003) (citations omitted). Section 106 of

6

the NHPA requires that:

[t]he head of any Federal agency having direct

or indirect jurisdiction over a proposed Federal

or federally assisted undertaking...shall, prior

to the approval of the expenditure of any

Federal funds..., take into account the effect

of the undertaking on any district, site,

building, structure, or object that is included

in or eligible for inclusion in the National

Register. The head of any such Federal agency

shall afford the Advisory Council on Historic

Preservation established under Title II of this

Act a reasonable opportunity to comment with

regard to such undertaking.

16 U.S.C. § 470f.

Like NEPA, the NHPA is procedural in nature. See,

e.g., Morris County Trust for Historic Pres. v. Pierce,

714 F.2d 271, 278 (3d Cir. 1983).

It does not itself require a particular outcome,

but rather ensures that the relevant federal

agency will, before approving funds or granting

a license to the undertaking at issue, consider

the potential impact of that undertaking on

surrounding historic places. As such, courts

have sometimes referred to Section 106 as a

“stop, look, and listen” provision.

Business and Residents Alliance of East Harlem v. HUD,

430 F.3d 584, 591 (2d Cir. 2005) (citing Ill. Commerce

Comm'n v. Interstate Commerce Comm'n, 848 F.2d 1246,

1260-61 (D.C.Cir.1988); Pres. Coal., Inc. v. Pierce, 667

7

F.2d 851, 859 (9th Cir. 1982)). Much like the EA/EIS

process under NEPA, section 106 upholds the NHPA's

objectives "neither by forbidding the destruction of

historic sites nor by commanding their preservation, but

instead by ordering the government to take into account

the effect any federal undertaking might have on them."

United States v. 162.20 Acres of Land, 639 F.2d 299, 302

(5th Cir. 1981).

When a project will adversely affect a National

Historic Landmark, however, section 110f of the NHPA

requires an agency to "undertake such planning and

actions as may be necessary to minimize harm to such

landmark" to the maximum extent possible and to allow the

Advisory Council on Historic Preservation (“ACHP”) time

to comment. 16 U.S.C. § 470h-2f. "Federal regulations

also have been promulgated to guide the historic

preservation review process, including consultation with

the [State Historic Preservation Officer, or “SHPO”] and

an opportunity to comment by the [ACHP]." Vieux Carre

Property Owners Residents and Associates, Inc. v. Pierce,

8

719 F.2d 1272, 1281 (5th Cir. 1983) (citing to 36 C.F.R.

§§ 800-100.13).

B.

1.

We now turn to the factual and procedural background

of this case. The plaintiffs, Coliseum Square Ass’n,

Inc., Smart Growth For Louisiana, Louisiana Landmarks

Society, Inc., Historic Magazine Row Association, and The

Urban Conservancy, non-profit organizations representing

citizens, residents and merchants in the City of New

Orleans (“plaintiffs”), brought this action against HUD

for judicial review, seeking declaratory judgment that

HUD failed to comply with NEPA and NHPA in funding the

St. Thomas Housing Development revitalization project and

an injunction compelling HUD to withhold federal funds

from the project until it fully complies with those

statutes. The Housing Authority of New Orleans (“HANO”)

was originally a named defendant. Although the district

court granted plaintiffs' motion to dismiss HANO from the

9

case as a defendant, HANO later re-entered the case as an

intervenor.

The St. Thomas Housing Development revitalization

project calls for substantial demolition of the pre-

existing St. Thomas Housing Development (St. Thomas) in

New Orleans and, in its place, the construction of new

low-income housing, new market rate housing, a senior

care facility, and a shopping center. Prior to the

beginning of the project, St. Thomas was a residential

public housing complex within the Lower Garden District

of New Orleans. Both the Garden District itself and many

of the buildings in St. Thomas are listed on the National

Register for Historic Places. St. Thomas, built between

1937 and 1949, consisted of 121 buildings (a total of

1510 residential units) covering 64 acres. By 1994, St.

Thomas had become excessively run-down and crime-ridden.

The Housing Authority of New Orleans initiated renewal

efforts, which resulted in a plan to renovate the area

covered by St. Thomas.

In 1996, HUD granted the Housing Authority of New

10

Orleans $25 million through the HOPE IV program for

revitalizing St. Thomas; the project then did not

contemplate retail stores but was limited to housing

units. Because of its grant of federal funds, HUD became

responsible for ensuring that its financing of the

revitalization project complies with the requirements of

NEPA and NHPA.

In 1998, HANO enlisted a private developer, Historic

Restorations, Inc. (“Historic Restorations”) to assist in

improving the plan. An amended redevelopment plan,

submitted to HUD in 2000, included construction of new

low-income housing, new market rate housing, a senior

care facility, and a 275,000 square foot shopping center,

the last of which was to be built on nearby, formerly

industrial land. Historic Restorations hired Citywide

Testing (“Citywide”) to prepare environmental studies and

documents for the project. By November 4, 1999, Citywide

had completed studies and proposed findings for HUD in

support of a proposed FONSI.

By September 2000, HUD completed the initial Section

11

106 review required by the National Historic Preservation

Act ("NHPA"), which examined the project's impact on

historical properties. Subsequently, the Housing

Authority of New Orleans, the State Historical

Preservation Officer, and the Advisory Council on

Historic Preservation (a federal agency) signed a

Memorandum of Agreement (“MOA”) for the project.

Demolition began in October 2000.

HUD also completed its NEPA review in May of 2001,

after reviewing and adopting the proposed EA developed by

Citywide and approved by HANO: after adopting the

proposed EA/FONSI, HANO forwarded it to HUD. On May 21,

2001, the acting HUD officer noted, by hand and in the

space provided, that HUD had reviewed and concurred in

the proposed EA/FONSI.

In July 2001, after both the MOA and environmental

assessment were completed, Historic Restorations

recommended that the retail component of the project be

scaled back from 275,000 square feet to 199,000 square

feet and obtained a commitment from Wal-Mart to become

12

the retailer.

On September 4, 2001, after HRI publicly announced

that Wal-Mart would be filling the retail space, the

State Historic Preservation Officer asked to reopen the

NHPA review. On September 6, 2001, all parties to the MOA

agreed to reopen the NHPA process. HUD then undertook

additional study, including a particular focus on the

potential impact Wal-Mart might have on historic

properties in the area. The additional investigation

included consultation with all of the MOA’s signatories

as well as with the City of New Orleans and its planning

commission, the State of Louisiana, the general public

(including St. Thomas residents), and the project’s

opponents (including neighborhood groups and preservation

agencies). As a result of that study, HUD expanded its

assessment of the project's Area of Potential Effects to

cover parts of Uptown, Mid-City, and Faubourg Marigny as

well as all of the Garden District, the Lower Garden

District, Irish Channel, the Central Business District,

and the Vieux Carre (better known as the French Quarter).

13

In July 2002, two years after demolition had begun

and the project’s residents had been relocated,

plaintiffs filed suit. In response to the concerns raised

in that complaint, HUD reopened its NEPA process to

conduct further study. While the process was open,

progress on the project was restricted to infrastructure

work on the residential sections and work needed to

address environmental conditions. After the supplemental

investigation was complete, the proposed EA and FONSI

went through a public comment period. On February 20,

2003, an amended MOA was signed and a new environmental

assessment and FONSI were issued.

2.

At oral argument we requested additional briefs from

the parties regarding whether the case had been mooted

because the project was either substantially complete or

effectively terminated by the adverse effects of

Hurricane Katrina. After reviewing those briefs, we are

satisfied that this case is not moot and that we have

14

subject matter jurisdiction.

It is true that many significant parts of the project

have been completed. The Wal-Mart shopping center has

been finished and open for business since late 2004. As

of late February 2005, most of the former St. Thomas

housing project had been demolished. Only five buildings

were left standing for future rehabilitation. The first

phase of housing units had been completed; 98% of them

had been rented and occupied. Infrastructure work for the

entire housing portion of the site had been completed,

and work had begun on ten subsidized units of offsite

rental housing.

The next phase, however, consisting of the

construction of 73 mixed-income housing units, was

expected to begin in March 2006. Work had not yet begun

on rehabilitating the remaining five buildings from the

St. Thomas housing project. The following construction

was planned but not yet begun: 200 mixed-income rental

units, 64 affordable rental housing units for the

elderly, a 250-unit market rate rental retirement

15

community, and 200 market rate condominium units;

additional small-scale commercial ventures, which may be

included in some of the new residential construction; and

construction or rehabilitation of affordable rental

housing (90 units) and affordable individually owned

houses (50 units). Hurricane Katrina generally spared the

existing housing units, and they are currently habitable.

HANO indicates that it plans to finish the project, but

it has not determined how Hurricane Katrina's impact

might change the its prior plans.

The plaintiffs in the present case challenge far more

than the building demolition called for by the project.

Despite the completion of the Wal-Mart complex and other

edifices, significant projected construction and

renovation remain unfinished. Plaintiffs’ requested

relief - declaratory judgments invalidating the existing

MOA as well as the environmental assessment and FONSI,

plus injunctions halting construction and requiring

preparation of a proper and legal MOA and environmental

assessment - could, if granted, eliminate or alleviate a

16

multitude of their expressed environmental and historical

preservation concerns. Accordingly, we conclude that the

case is not moot and proceed to consider the merits of

the plaintiffs’ claims. Cf. Benavides v. Housing

Authority of City of San Antonio, Tex., 238 F.3d 667, 670

(5th Cir. 2001) (holding a demolition project to be moot

where demolition was only 55% complete, but had

progressed to the point where units were no longer

habitable); Bayou Liberty Ass’n v. U.S. Army Corps, 217

F.3d 393 (5th Cir. 2000) (holding the case to be moot

where construction of the project had been entirely

completed); Vieux Carre Property Owners, Residents, &

Assoc., Inc. v. Brown, 948 F.2d 1436, 1446 (5th Cir.

1991) (“as long as...[the agency] has the ability to

require changes that could conceivably mitigate any

adverse impact the project might have...[the project]

remains a federal undertaking and NHPA review is

required.”). None of the parties to this suit contend

that Hurricane Katrina’s effects have rendered the

project moot.

17

II.

An agency's decision not to prepare an EIS can be set

aside only upon a showing that it was “arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A); see also

Marsh v. Or. Natural Res. Council, 490 U.S. 360, 375-376

(1989); Kleppe v. Sierra Club, 427 U.S. 390, 412 (1976).

Here, HUD based its FONSI upon the analysis contained

within its EA; respondents argue that the issuance of the

FONSI was arbitrary and capricious because the EA's

analysis was flawed for numerous reasons that we address

individually later in this opinion.1

1

On April 11, 2003, in ruling on cross-motions for

summary judgment, the district court concluded that

HUD’s environmental assessment/FONSI and MOA were not

“arbitrary and/or capricious in any respect.”

Plaintiffs contend that the district court erred in

this ruling: that HUD arbitrarily and capriciously

concluded that the project would result in no

significant environmental impact.

Our review of the district court’s ruling on the

cross-motions for summary judgment is de novo,

“applying the same standard on appeal that is applied

by the district court.” Terrebonne Parish Sch. Bd. v.

Mobil Oil Corp., 310 F.3d 870, 877 (5th Cir. 2002)

(citing Auguster v. Vermilion Parish Sch. Bd., 249 F.3d

18

Under NEPA, an agency is required to provide an EIS

only if it will be undertaking a “major Federal

actio[n],” which “significantly affect[s] the quality of

the human environment.” 42 U.S.C. § 4332(2)(C). Under

applicable CEQ regulations, a “[m]ajor Federal action” is

defined to “includ[e] actions with effects that may be

major and which are potentially subject to Federal

control and responsibility.” 40 C.F.R. § 1508.18.

“Effects” are defined to “include: (a) [d]irect effects,

which are caused by the action and occur at the same time

and place,” and “(b) [i]ndirect effects, which are caused

by the action and are later in time or farther removed in

distance, but are still reasonably foreseeable.” Id. §

1508.8. It is undisputed that HUD’s funding of the

project is a major federal action. Thus, we must

determine whether HUD acted reasonably and in accordance

with law in deciding, based on its EA and FONSI, that its

action had no direct or indirect effects that

400, 401 (5th Cir. 2001)). Here, like the district

court, we apply the “arbitrary and capricious” standard

described above.

19

significantly affected the quality of the human

environment. See Pub. Citizen, 541 U.S. at 763-4.

Plaintiffs first argue that HUD’s action in funding

the project was not in accord with law in two respects:

they assert that federal regulations automatically

required HUD to produce an EIS based on the increased

level of noise and the sheer number of dwellings affected

by the project. In their remaining arguments, plaintiffs

contend that HUD acted arbitrarily and capriciously or

unreasonably because the evidence available to HUD

mandated preparation of an EIS.

A.

Plaintiffs contend that CEQ regulations required HUD

to prepare an EIS under the facts established by its own

EA, and that HUD’s major federal action of funding the

project before preparing an EIS was not in accordance

with law. Contrary to plaintiffs’ argument, however,

HUD’s interpretation and application of the regulations

as permitting it to proceed without an EIS in this case

20

were not arbitrary, capricious, or clearly contrary to

law. When the interpretation and application of

regulations by an agency and its opponents are not

arbitrary and capricious nor clearly contrary to law we

are required by NEPA and the Supreme Court’s decisions to

accept the agency’s decision as being in accordance with

law. See, e.g., N. Ind. Pub. Serv. Co. v. Porter County

Chapter of Izaak Walton League of America, Inc., 423 U.S.

12, 15 (1975)).

HUD regulation 24 C.F.R. §§ 51.104(b)(2) requires the

agency to prepare an EIS prior to approving “projects

with unacceptable noise exposure[,]” that is, where sound

levels reach 75 decibels or greater, based on a 24-hour

weighted average of sound levels. See 24 C.F.R. §§

51.104(b)(2).2 In its FONSI, HUD stated that the project

is in compliance with noise abatement requirements,

noting that the sound measurements fall within

2

HUD regulations define “Acceptable” noise levels

as “not exceeding 65 dB[,]” “Normally Unacceptable”

levels as “[a]bove 65 dB but not exceeding 75 dB[,]”

and “Unacceptable” levels as “[a]bove 75 dB.” 24 C.F.R.

§ 51.103, table.

21

“acceptable” levels. In doing so, HUD relied on a

September 2002 noise survey included in its EA which

indicates that the noise exposure (the average day-night

sound level at the site) reaches 60 decibels, within the

“acceptable” range. Review of that study indicates that

it used measurements taken over a 24-hour period within

a carefully described area, and included an assessment of

the possible effects of future increased traffic and the

construction of retail buildings. Plaintiffs contend that

in conducting the study HUD did not comply with its own

September 1991 Noise Guidebook.

The fact that HUD’s submitted study did not

completely comply with the requirements of its Noise

Guidebook is not, of itself, sufficient to show that its

reliance on the study was not in accordance with law or

arbitrary and capricious. In Lyng v. Payne, 476 U.S. 926,

937 (1986), the Supreme Court held that “not all agency

publications are of binding force” - in other words, the

guidelines in question must be “the kind of agency law

the violation of which is remediable at all.” Generally,

22

to be legally binding on an agency, its own publications

must have been “promulgated pursuant to a specific

statutory grant of authority and in conformance with the

procedural requirements imposed by Congress.” See, e.g.,

Schweiker v. Hansen, 450 U.S. 785, 789-90, (holding

Social Security Administration Claims Manual is not

binding agency rule); Fano v. O'Neill, 806 F.2d 1262,

1264 (5th Cir. 1987) (holding INS Operations Instructions

not binding because “they are not an exercise of

delegated legislative power and do not purport to be

anything other than internal house-keeping measures.”);

W. Radio Servs. Co. v. Espy, 79 F.3d 896, 900-01 (9th

Cir. 1996) (holding that the court reviews noncompliance

with an agency “pronouncement” only if it “actually has

the force and effect of law.”); Gatter v. Nimmo, 672 F.2d

343, 347 (3d Cir. 1982) (holding Veteran's Administration

publications not binding because they were not

promulgated under the APA’s rulemaking requirements);

Fed. Land Bank in Receivership v. Fed. Intermediate

Credit Bank, 727 F.Supp. 1055, 1058 (D.Miss. 1989)

23

(holding that directive not promulgated according to APA

procedure lacks force and effect of law); see also Davis

Mountains, 116 Fed. Appx. 3, 9-10 (5th Cir. 2004)

(summarizing above case law and holding as result that

the Air Force's Handbook is not binding as it was not

promulgated according to the APA's procedural

requirements). Where agency publications have not been so

promulgated, the agency’s decision to analyze impacts by

other methods is not an automatic violation of the law.

As such, it is subject to review under the normal

“arbitrary and capricious standard” used to review agency

action under the APA. Davis Mountains, 116 Fed. Appx. at

9-10 (“Thus the Air Force retained discretion to analyze

impacts on livestock by methods other than those

contained in the Handbook, and we must address the

adequacy of the Air Force's chosen method according to

the arbitrary and capricious standard”); see also

Communities Against Runway Expansion, Inc. (CARE) v.

F.A.A., 355 F.3d 678, 688 (D.C. Cir. 2004) (holding that

even though an executive order mandating agency

24

consideration of environmental justice concerns created

no private right of action for an agency’s failure to

comply with that mandate, the court would review the

agency’s action as an exercise of discretion under the

APA and NEPA). Here, plaintiffs neither argue nor offer

evidence that HUD’s guidelines were promulgated under the

Administrative Procedure Act’s procedural requirements.

Plaintiffs’s first argument therefore fails: HUD has not

acted contrary to law by using methodology different from

that contained in the Guidebook.

Plaintiffs also argue that HUD “obviously skewed [the

study] to measure disproportionally during the quietest

times of the day and bring the overall average decibel

level down.” Similarly, they appear to assert that HUD

was arbitrary and capricious in not relying on the

results of an extra-record noise survey completed in

April 2001 by Citywide. They claim that HUD’s chosen

methodology improperly and purposely skews the survey

results by including a measurement at noon, but no

measurements between 7:30 AM and 12:06 PM nor between

25

11:46 AM and 2 PM. They offer conclusory allegations that

HUD’s sampling survey produces distorted results and was

conducted in that manner for the express purpose of

avoiding the conclusion suggested by the extra-record

Citywide survey.

At best, this argument reflects only a disagreement

over whether it was arbitrary and capricious for HUD to

base its decision on the study documented in the record

rather than extra-record evidence. There is simply no

evidence of bad or improper motive by HUD in this

instance. Nor do plaintiffs provide further evidence

showing either that reliance on such a methodology is

otherwise arbitrary and capricious or that HUD’s

methodology was actually flawed, rather than simply

different from plaintiff’s preferred method. In fact, the

Citywide study on which plaintiffs would urge reliance

does not comply with HUD regulations, which the agency

must obey, let alone the Noise Guidebook's non-binding

requirements.3 The Citywide survey hardly amounts to

3

As an example, the proffered extra-record survey

took its measurements over a 12-hour period; 24 C.F.R.

26

persuasive evidence of noise levels that require an EIS

under the HUD regulations. We may not, therefore, say

that HUD arbitrarily and capriciously relied on the

study’s results in determining that the noise levels did

not trigger the automatic environmental impact statement

requirement.

Plaintiffs next argue that HUD’s funding of the

project without preparing an EISs was contrary to a CEQ

regulation mandating an EIS when a project will “remove,

demolish, convert, or substantially rehabilitate 2,500 or

more existing housing units...or...result in the

construction or installation of 2,500 or more housing

units.” 24 C.F.R. § 50.42(b)(2). Plaintiffs argue that

this regulatory provision must be read expansively and

cumulatively: that is, that each demolition of an old

housing unit and each construction of a new housing unit

should be counted cumulatively toward the 2,500 limit or

trigger. Thus plaintiffs contend that, if a project

proposes to destroy 1,250 old units and construct new

§ 51.103(a), by contrast, requires measurements over a

24-hour period.

27

1,250 units in their place, an EIS is required because

this would involve the destruction or construction of

2,500 units. HUD reads the regulation as disjunctively

establishing two categories: demolition, conversion or

rehabilitation of the old vis-à-vis construction or

installation of the new; as applied to this case, HUD

reasons that, since only 1,510 units are to be demolished

or rehabilitated and only 1,282 are to be newly

constructed or installed, the project does not reach the

2,500 unit trigger in respect to either category.

Plaintiffs effectively concede this point. They do

not argue or attempt to show that HUD’s interpretation is

arbitrary and capricious. Instead, they contend, without

explanation, that we should not defer to the agency’s

reasonable interpretation as precedent would require, but

that we ought to use our own judgment to declare that

their interpretation of the regulation will be followed

because it is simply the best. Even if we were to agree,

however, we do not have the plenary authority to

interpret the regulation in this kind of case as we

28

personally deem best. “In situations in which ‘the

meaning of [regulatory] language is not free from doubt,’

the reviewing court should give effect to the agency's

interpretation so long as it is ‘reasonable,’ that is, so

long as the interpretation ‘sensibly conforms to the

purpose and wording of the regulations.’” Martin v.

Occupational Safety & Health Review Comm’n, 499 U.S. 144,

150-1 (1991) (quoting Ehlert v. United States, 402 U.S.

99, 105 (1971) and N. Ind. Pub. Serv. Co. v. Porter

County Chapter of Izaak Walton League of America, Inc.,

423 U.S. 12, 15 (1975)). Because the plaintiffs

effectively concede that HUD’s interpretation of the

regulation is not unreasonable, we conclude that the

regulation does not require an EIS in this case and that

HUD did not fail to act in accordance with law in this

respect.

B.

The theme of plaintiffs’ remaining NEPA arguments is

that HUD acted arbitrarily, capriciously, or in abuse of

29

its discretion by failing to prepare an EIS although it

knew or should have known that the reasonably foreseeable

effects of the project would significantly affect the

quality of the human environment in many different ways.

We address each argument under a separate heading. Before

we begin, we pause to reiterate that in attacking a

decision not to prepare an EIS, “more than an allegation

of deficiencies is necessary; the plaintiffs must prove

the essential allegations of their complaint by a

preponderance of the evidence.” La. Wildlife Fed’n, Inc.

v. York, 761 F.2d 1044, 1055 (5th Cir. 1985) (Rubin, J.,

dissenting). “It is the burden of the plaintiffs to

adduce evidence, not merely to make allegations or to

rest on assumptions, establishing that the Corps was

[arbitrary and capricious] in reaching the conclusion it

did[.]” Id.

1. Environmental Justice

Executive Order 12898 instructs agencies to consider

the environmental justice impacts of their actions. Exec.

30

Order No. 12898, 59 Fed. Reg. 7629 § 6-609 (1994). The

Order does not, however, create a private right of

action. Thus, we review the agency’s consideration of

environmental justice issues under the APA’s deferential

“arbitrary and capricious” standard. See, e.g.,

Communities Against Runway Expansion, Inc. (CARE) v.

F.A.A., 355 F.3d 678, 688 (D.C. Cir. 2004). Leaving aside

legalisms, we see in this record no administrative

insensitivity to racial or economic inequality. Instead,

we see a project that HUD perceived reasonably as a

community effort, endorsed initially by some who now

oppose it, to renovate a deteriorating public housing

project for the ultimate and enduring benefit of the

community.

HUD’s environmental justice study, completed in

September 2002, looked at the area in which the project

is being built and determined that those who return to

live in the “new” St. Thomas will benefit from safer,

more sanitary living conditions and an improved economic

environment. It considers the problems of displacement,

31

including the fact that residents still living in the

project would be eligible for relocation under the

Uniform Relocation Act. Furthermore, HUD’s study

reflected that St. Thomas residents had numerous

complaints about the housing project and were at risk

from pest infestations, asbestos, drug paraphernalia,

lead exposure, and raw sewage. It notes, based on the

comments received from then-residents, that many had

complaints about the St. Thomas development and while

some would stay there if conditions and amenities were

improved, others would prefer to become home owners

outside of the project. Over 200 lawsuits had been filed

over lead exposure in the housing units, and that 99% of

residents belonged to a minority group.

The record also indicates that HUD received and

responded to comments made at a public meeting by Mr.

Brod Bagert, whose master’s thesis had been highly

critical of the HOPE IV program, and of the broader

“market revitalization” approach to improving urban

areas. His comments and his study use the St. Thomas

32

project as an example to attack that particular theory of

urban planning. HUD responded to Mr. Bagert’s comments,

indicating that while it understood the basis of his

criticism of the HOPE IV approach to urban

revitalization, the HOPE IV approach is clearly supported

by Congressional mandate.

Plaintiffs offer Mr. Bagert’s comments, and evidence

of problems with residential relocations under the

Uniform Relocation Act, for the proposition that HUD’s

evaluation of the project’s impacts is entirely

contradicted by the evidence.4 The record in front of us

is hardly so clear cut, and certainly reveals that HUD

gave attention to the issues plaintiffs raise, for all

they disagree with the conclusions. Beyond their

allegations and Mr. Bagert’s comments, which HUD clearly

4

Mr. Bagert’s written report is outside the

record. The district court denied plaintiffs’s request

to add it as a supplement to the administrative record.

Plaintiffs challenge that ruling by the district

court’s decision only in response to its ruling on

their Rule 59 motion, discussed infra. For the purposes

of the immediate analysis, we are confined to the

administrative record, which includes only Mr. Bagert’s

oral comments at a public meeting.

33

took under consideration, plaintiffs offer no evidence

suggesting that the environmental justice study was

arbitrary or capricious in its choice of methodology. We

cannot, therefore, say that they have met their burden of

showing that HUD’s consideration of environmental justice

concerns was arbitrary and capricious.

2. Zoning

The New Orleans City Council approved zoning changes

for the project in November 2001 (for the retail portion)

and in April 2002 (for the residential portion). In

addition, implementing the St. Thomas revitalization

project required the creation of a Tax Increment

Financing District, which helps fund the project, and

which was highly controversial with regard to its

possible negative economic effect on local businesses

near the project. In preparing the environmental

assessment, HUD indicated only that the project was in

compliance with local zoning ordinances by the time of

the assessment, without indicating that such compliance

34

actually required changing the local zoning laws. In

addition, when describing the two twelve-story

residential buildings and the 200,000 square-foot Super

Wal-Mart retail center, HUD indicated on the

environmental assessment form that the project was

compatible with its surroundings in terms of land use,

building type, height, bulk and mass, and density.

Plaintiffs challenge HUD’s conclusion that local

zoning changes implemented for the project do not create

a significant environmental impact. First, plaintiffs

assert that “[l]ocal zoning changes significantly impact

the human environment[;]” but offer little support for

their arguments. They offer Sierra Club v. Marsh, 769

F.2d 868, 872 (1st Cir. 1985), for the proposition that

an EIS is automatically required where the project

radically alters existing land use, but we find that case

inapposite. There, the court held that the Federal

Highway Administration and Army Corps of Engineers could

not support its FONSI by relying on land use regulations

to safeguard the land because the project would radically

35

alter land use. Id. Here, although HUD does cite to its

compliance with local zoning ordinances as support for

its FONSI, we have no change so radical as to be akin to

replacing an undeveloped wooded island with a marine

terminal and industrial complex, as was proposed in

Marsh. Thus Marsh offers us no such legal rule, nor do

plaintiffs offer us support for drawing an analogy on the

facts. The project in the case at bar, particularly the

high-rise structures and the Wal-Mart center, is located

on the Tchoupitoulas industrial corridor, and the

remaining residential portion borders the nearby

residential areas. Without further evidence supporting

their allegations, we may not hold that HUD was arbitrary

and capricious in determining that the zoning change of

itself implied that the project would have a significant

impact on the environment.

Second, plaintiffs assert that the implementation of

the Tax Increment Financing District was a highly

controversial change, such that it requires an

environmental impact statement under the regulations set

36

out by the Council on Environmental Quality. See 40

C.F.R. § 1508.27(b) (identifying a project’s “highly

controversial” nature as a factor to consider in

evaluating the intensity of impacts). We have held that

these factors listed in the regulation “do not appear to

be categorical rules that determine by themselves whether

an impact is significant.” Spiller, 352 F.3d at 243. "As

such, all that would have to be shown is that all the

factors were in some way addressed and evaluated; whether

this was done in factor-by-factor fashion is irrelevant."

Id. Furthermore, “controversial” is usually taken to mean

more than some public opposition to a particular use -

rather it requires “a substantial dispute...as to the

size, nature, or effect of the major federal action.” See

Center for Biological Diversity v. U.S. Fish & Wildlife

Service, 202 F. Supp 2d 594, 657-8 (W.D.Tex. 2002)

(summarizing existing case law with regard to what

constitutes a “substantial dispute” such that an

environmental impact statement is required). Reviewing

the record, the portions to which plaintiffs cite clearly

37

reflect public opposition from local businesses to using

the retail space to house a Wal-Mart, but do not attack

the broader nature or effect of the project as a whole.

The record clearly reflects that HUD addressed and

evaluated this factor and plaintiffs do not adduce

evidence suggesting that its evaluation was insufficient,

but simply assert disagreement with the conclusion.

Accordingly, they have not met their burden to show that

HUD acted arbitrarily or capriciously.

3. Businesses Occupying Historic Buildings

CEQ regulations require agencies to discuss economic

factors where interrelated with NEPA environmental

considerations; such factors include the impact on

"uniqueness of historic resources" and "adverse impacts

on National Register properties"). See 40 C.F.R. §§

1508.14 (requiring examination of interrelated effects),

40 C.F.R. § 1508.27 (list of NEPA intensity factors

contributing to the determination of "significant impact"

on "uniqueness of historic resources" and "adverse

38

impacts on National Register properties"). As a result,

HUD built into its EA an assessment of the project’s

impact on businesses occupying historic buildings.5

In reaching its FONSI on the issue, HUD relied on a

broad range of information, including opinion polls,

newspaper articles, and other studies - notably, the

Lambert Advisory Report. This last indicates that Wal-

Mart will reduce some sales from local businesses, but

also suggests that Wal-Mart may actually help the area

retain some revenue which had previously left the city in

favor of suburban retail. Other documents in the record

are equally clear in identifying both the increase in

competition posed by Wal-Mart as well as its potential

economic benefits to existing retailers. HUD’s

administrative record also includes an inventory of area

businesses (the “Blick inventory”), which is an

5

HUD attempts to argue that even though it did

consider this issue, NEPA does not require such a

examination of “purely economic” impacts. The merit of

this argument is dubious, since, as plaintiffs note,

the loss of businesses in the district relates to the

amount of money available to maintain historic

buildings.

39

admittedly “quick review” and contains errors,

particularly in its characterization of what goods or

services varying businesses provide.

Plaintiffs argue that HUD’s reliance on the Blick

inventory as “sole support” for its statement will not

suffice in order to support a FONSI. Although their

argument might have carried weight if the Blick inventory

was HUD’s sole source of information, HUD in fact

considered information from a wide range of sources,

which led it to conclude that although the Wal-Mart will

bring increased competition to the area, adding the

business to the area was also likely to result in an

increase in economic opportunities for local retailers.

Furthermore, plaintiffs simply misstate the record when

they assert that HUD entirely ignored the Lambert report.

Finally, plaintiffs proffer an alternative, extra-record

inventory of local businesses. Beyond simply restating

that study’s conclusions, which are more favorable to

their desired outcome, plaintiffs offer no evidence that

would allow us to conclude that its methodology is any

40

more reliable or its results any more robust than the

studies HUD included in the administrative record. As a

result, we cannot say that plaintiffs have met their

burden in showing that HUD acted arbitrarily or

capriciously.

4. Toxic and Hazardous Waste

HUD regulations do not permit that agency to approve

projects that are not located an acceptable distance from

“hazards” unless appropriate mitigation measures are

taken. 24 C.F.R § 15.202(a). “Hazards” are defined to

include any “any stationary container which stores,

handles or processes hazardous substances of an explosive

or fire prone nature.” 24 C.F.R. § 15.201. Accordingly,

HUD’s EA included an investigation into whether any such

hazards threatened the St. Thomas project as a part of

the process. It conducted two Phase I assessments, which

identified certain toxic and hazardous waste issues,

including both an underground storage tank containing

petroleum products and a fuel pump, both located on the

41

Wal-Mart site. A later Phase II assessment recommended

methods for remediation, and in mitigation HUD required

Historic Renovation, the developer, to set up an escrow

account to ensure remediation. The environmental

assessment openly discusses the presence of these hazards

in the comments to the section on “toxic chemicals and

radioactive materials.” Those remarks clearly reflect the

need for a Phase II assessment, the presence of an

underground storage tank, and the remediation

requirements. HUD’s actions comply with their

regulations, and are not arbitrary or capricious in this

respect.

Plaintiffs accuse HUD of violating its duty to

disclose the existence of an underground storage tank by

failing to disclose it in the section of the

environmental assessment meant to identify “hazardous

industrial operations”. Their brief charges that HUD

purposely committed deception by not listing the hazards

in that section, and did so with the sole purpose of

avoiding the preparation of an EIS. They offer no

42

evidence that HUD’s required remediation is insufficient

to warrant a FONSI, nor any evidence to support their

claims of bad faith. Nor do they offer any legal argument

that the hazards must be listed in that specific section

of the form, rather than in the location HUD placed it.

In fact, the record reflects that the EA clearly reveals

that the hazards are present and indicates the

remediation planned to reduce the effects of those

hazards. As a result, plaintiffs have not made any

showing that HUD engaged in purposeful concealment or

arbitrarily relied on the remediation measures in

reaching its FONSI.

5. Lead Contamination

24 C.F.R. § 50.3(i)(1) requires that HUD must ensure

its projects are free of “hazardous materials,

contamination, toxic chemicals and gasses, and

radioactive substances” that would "affect the health and

safety of occupants or conflict with with the intended

utilization of the property.” In doing so, HUD must pay

43

"particular attention" to industrial sites and other

areas containing hazardous waste, using "current

techniques by current professionals." 24 C.F.R. §§

50.3(I)(2), (3). As a part of its EA process, therefore,

HUD considered whether the project area had significant

lead contamination. We hold that the agency was not

arbitrary or capricious in determining that the

environmental impact from lead in the soil was not

significant.

The agency hired a contractor, PSI, to carry out the

Phase II environmental assessment already mentioned

above; as a part of that work, PSI took various soil

samples. The contractor was particularly concerned with

lead in the soil coming from underground storage tanks

and old dry-cleaning facilities. When it tested the

samples, PSI found that the levels of lead in the soil

were below the health-based limit set by the Louisiana

Department of Environmental Quality. Based on those

results, HUD determined that the environmental impact

from lead in the soil was not significant.

44

HUD later received public comments on its separate

environmental justice study from a soil expert, in

response to a statement in that study that surface lead

contamination in the project was not a problem. The

expert stated that his soil surveys for lead

contamination in New Orleans found that the St. Thomas

community was one of “the most contaminated areas in the

city” and “recommended concerted effort” to address the

problem. On receipt of those comments, and in light of

the PSI results, HUD asked C-K Associates, the contractor

that had prepared the environmental justice study, about

the effect of those remarks on the EA. C-K Associates

responded by saying that although the expert was well-

respected in his field, his methodology did not follow

the standards HUD required for evaluating lead levels.

Given that the PSI tests had shown lead levels below the

permissible maximum and that the outside expert’s methods

did not meet agency requirements, HUD maintained its

conclusion that lead contamination at the site was not

significant for the purposes of the EA.

45

Plaintiffs disagree mightily with PSI’s technique and

clearly prefer the outside expert’s methodology, urging

that HUD arbitrarily and capriciously relied on PSI’s

unsound techniques. The mere fact of HUD’s reliance on

the PSI study is not arbitrary and capricious. We have

held that “[an] agency is not required to ‘do it alone’”

in reviewing the environmental impact of projects, and

may employ outside consultants in preparing an

environmental assessment. Save Our Wetlands, Inc. v.

Sands, 711 F.2d 634, 642 (5th Cir. 1983). “The intent of

the controlling regulations is that “acceptable work

[completed by parties outside the agency] not be

redone[.]” Id. (citing 40 C.F.R. § 1506.5(a)).

Furthermore, "an agency must have discretion to rely on

the reasonable opinions of its own qualified experts,

even if, as an original matter, a court might find

contrary views more persuasive." Marsh v. Oregon Natural

Res. Council, 490 U.S. 360, 378 (1989); see also,

Mississippi River Basin Alliance v. Westphal, 230 F.3d

170, 175 (5th Cir. 2000); Sabine River, 951 F.2d 669, 678

46

(5th Cir. 1992). An agency may not, however, "reflexively

rubber stamp" information prepared by others. Save Our

Wetlands, Inc. v. Sands, 711 F.2d 634, 643 (5th Cir.

1983) (citing Sierra Club v. Lynn, 502 F.2d 43, 58-59

(5th Cir.1974)); Sierra Club v. Sigler, 695 F.2d 957 (5th

Cir. 1983)).

On this record, we find that plaintiffs have not

shown that either HUD’s reliance on PSI’s study or PSI’s

methodology were arbitrary and capricious. HUD’s

administrative record, however, clearly reflects that

when public comment called possible flaws in PSI’s

methods or results, HUD inquired into the problem and, on

consideration of the evidence, chose to continue to rely

on PSI for sound reasons. In support, plaintiffs can only

point to the results of the outside study and the soil

expert's comments. As C-K Associates noted, however, HUD

could not rely on plaintiffs' preferred method without

violating its own standards. Furthermore, the soil

expert’s comments state only that the project has the

highest lead contamination in New Orleans, and do not

47

contradict PSI’s findings that the lead-levels are within

of health-based standards. Beyond their allegations and

the above comparisons, plaintiffs offer no concrete

evidence to support their arguments. Accordingly, we

conclude that HUD was neither arbitrary nor capricious in

relying on PSI’s conclusions in reaching its FONSI.

6. Traffic

When studying the project’s potential effects, HUD

looked at the possible impacts of increased traffic. A

September 2001 traffic study examined streets and major

intersections in the project - locations where it thought

any increase would likely cause problems. A second study,

carried out in December 2002, looked at the effect

traffic increases would have in areas outside of that

already covered by the original study. HUD also carried

out noise and vibration studies, and included traffic as

a factor in its environmental site assessments,

environmental justice study, and mitigation requirements.

The New Orleans Department of Public Works and the

48

Regional Planning Commission also studied traffic impacts

and concluded that the effects would not be significant.

On the record before us, which includes all of the above,

we hold that the agency did not arbitrarily or

capriciously reach its FONSI with regard to traffic.

Plaintiffs attempt to whittle away at HUD’s support

for its findings. They assert that HUD relies solely on

the December 2002 study to reach its conclusions. The

2002 study, they allege, covers only outlying areas and

therefore cannot, alone, support HUD’s determination.

Their characterization of the record is simply

inaccurate: as recounted above, HUD relied on far more

than just that study, and in fact made certain to

incorporate traffic effects into its study of other

potential impacts as well. Second, plaintiffs urge that

the bare fact that HUD predicts a 67% increase in traffic

should suffice for any impacts of that traffic to be

automatically “significant” for NEPA purposes. will have

per se significant effect. They offer us no legal

authority for the proposition that a predicted increase

49

should be considered de facto significant. Moreover,

while plaintiffs allege a long list negative effects on

health, safety, noise, pollution, vibration, and historic

properties, they offer us no evidence as to what those

effects would be, why they would be significant, or how

HUD has failed to investigate them. In addition, the

record described above belies the assertion that these

effects have gone unstudied in HUD’s EA. As a result, we

may not say that HUD’s decision was arbitrary and

capricious in this regard.

7. Cumulative Impacts

Plaintiffs argue, in effect, that HUD should be

charged with constructive knowledge of significant

foreseeable cumulative effects upon human environment

that were discoverable upon reasonable investigation.

They beg the question, however, by assuming without

demonstrating with concrete supporting evidence that the

significant effects they allege were reasonably

foreseeable at the time of HUD’s EA/FONSI.

50

The plaintiffs assume that it was reasonably

foreseeable to HUD that the project would cause two types

of significant environmental effects: 1) future

unspecified impacts caused by the influx of additional

national retailers attracted by Walmart’s presence and 2)

future impacts of increased traffic from the above

combined with future impacts by three other planned

expansions in the area.6 Although the plaintiffs have not

established either the foreseeability or the significance

of these effects, we discuss them briefly:

First, NEPA requires HUD to study a project’s

reasonably foreseeable effects. Plaintiffs’ sole

allegation is that HUD failed to study the detrimental

effects of the eventual arrival of other, unknown

national retailers into the area, following Wal-Mart's

wake. They offer nothing concrete to suggest that such

changes will likely occur or are planned for in this

particular project area, but rely on broad statistical

6

Namely, the future expansion of the Morial

Convention Center, the expanded terminal activities at

the Port of New Orleans, and the development of the

Saulet Apartment complex.

51

data discussing general national trends. However,

reasonable foreseeability under NEPA “does not include

[such] ‘highly speculative harms[.]’” City of Shoreacres

v. Waterworth, 420 F.3d 440, 453 (citing Methow Valley

Citizens Council, 490 U.S. at 356). As a result,

plaintiffs’ arguments fail.

Second, after studying the anticipated effects of

increased traffic, HUD decided that the project would not

cause traffic levels that would significantly affect

human environment. In reaching its decision, HUD relied

on two traffic studies performed by a contractor in

December 2000 and September 2001. The latter was

performed specifically to incorporate the effects of

known plans for other development projects in the area.

HUD relied on the traffic studies’ projection of traffic

conditions subsequent to completion of the St. Thomas

revitalization project and the three other planned

expansions. The studies indicated that traffic levels

would remain well below capacity. HUD’s reliance on those

results was not arbitrary, capricious or unlawful, and

52

plaintiffs’ argument to the contrary lacks merit.

In support of their position, plaintiffs cite to

inconsistencies in background traffic measurements;

noting that the September 2001 measurement for Jackson

Avenue is lower by 3,600 cars than the December

measurement, and arguing that the September 2001

measurement is purposely skewed in order to support the

FONSI. First, plaintiffs provide nothing but conclusory

allegations to support their claims of bad faith. Second,

we note that HUD’s findings relied on a separate set of

measurements, different from the challenged background

traffic measurements, that specifically reflect the

potential road conditions after the completion of the St.

Thomas project and the four other planned activities.

Furthermore, we note that even if the higher, December

2001 measurement for Jackson Avenue is taken as correct,

the street is still predicted to operate at some 30,000

cars below capacity. As a result, we cannot say, on this

record, that plaintiffs have adequately supported their

allegations of significant foreseeable cumulative effects

53

on human environment due to increased traffic caused by

the project.

8. Mitigation

In reaching its FONSI, HUD relied in part on the

mitigation requirements contained in the MOA developed as

a part of required NHPA planning. On examination, we find

that HUD did not rely on them arbitrarily or

capriciously. The MOA’s requirements were meant to

alleviate adverse impacts on historic properties; many of

its mitigation requirements focused on reducing the

adverse effects on increased traffic on those properties.

The measures are extensive, including “design review of

new construction, rehabilitation of historic buildings,

use of Belgian blocks to slow traffic at multiple

intersections, and restriction of the entrance of truck

traffic to Wal-Mart to Tchoupitoulas and Josephine

Streets[.]” The MOA also requires the signatories to the

MOA to ask the City to convene a traffic task force, seek

funding for improvements to Jackson Avenue, and identify

54

grants for local retailers. Furthermore, the MOA binds

the Housing Authority of New Orleans and HRI to its

terms. Any attempt to change it requires consultation

with and approval by all signatories, including federal

and state agencies set up to protect historic areas. To

reiterate, HUD is bound to adhere to the MOA’s

requirements, and may not relax or abandon them without

the express authorization of all parties.

Plaintiffs argue that the above requirements will not

provide the predicted mitigation, and that HUD’s reliance

on them is arbitrary and capricious. Plaintiffs

characterize the mitigation as requiring merely letter-

writing, mild research, and limited consultation.

Furthermore, plaintiffs argue that the MOA has no teeth,

as it can be changed at any time. Again, plaintiffs

assume without demonstrating that such measures of

mitigation are inherently unreliable and that an agency

cannot reasonably base its decision to forgo an EIS, in

part, upon them. The record before us, however, does not

support their allegations. They have not, therefore,

55

shown that HUD relied on those mitigation requirements

arbitrarily or capriciously.

9. Evaluation of Project Costs and Benefits

CEQ regulations state that “[a] significant effect

may exist even if the Federal agency believes that on

balance the effect will be beneficial.” 40 C.F.R. §

1508.7(b)(1). Plaintiffs argue that HUD is required to

produce an EIS even though the project has no significant

negative environmental effects, so long as it has

significant positive environmental effects. This court

has rhetorically considered the question, but has not

arrived at an answer. Hiram Clarke Civic Club, Inc. v.

Lynn, 476 F.2d 421, 426-7 (5th Cir. 1973) (disavowed on

other grounds). We need not do so here, as HUD has not

asserted nor have plaintiffs offered evidence of a

significant positive environmental impact; HUD only

indicates that when the overall benefits of the project

are weighed against the temporary inconveniences of

construction and any “partial long term market

56

disruption[,]” the St. Thomas project “provides a very

positive net benefit to the community.” Moreover, the

other case in this circuit touching on the question can

be distinguished on the grounds that it determines only

whether an EIS need discuss positive benefits.

Environmental Defense Fund v. Marsh, 651 F.2d 983, 993

(5th Cir. 1981). Without more, we may not find HUD

arbitrary and capricious in this regard. Plaintiffs also

urge that HUD improperly subtracted the project's

positive environmental impacts from its negative

environmental impacts, so that once significant negative

effects became insignificant. The record before us is

clear, however, that HUD has not engaged in any such

weighing. Rather, it evaluated the potential negative

effects and determined that they are not significant,

either individually or cumulatively. Again, without

further support, we may not say that HUD's assessment was

arbitrary and capricious.

10. Consideration of Context and Intensity

57

Council on Environmental Quality regulations require

an agency to consider both “context” and “intensity” when

considering whether an effect is “significant”. 40 C.F.R.

§ 1508.27 (defining “significantly” as used in NEPA’s

statutory language). In considering context, an agency

must look at “the significance of an action must be

analyzed in several contexts such as society as a whole

(human, national), the affected region, the affected

interests, and the locality.” 40 C.F.R. § 1508.27(a).

When evaluating intensity, agencies should consider ten

areas, listed in 40 C.F.R. § 1508(b). This court has held

that “the factors listed in the regulation do not appear

to be categorical rules that determine by themselves

whether an impact is significant.” Spiller, 352 F.3d at

243. Rather, the regulation provides a list of “relevant

factors...[for] gauging whether an impact is

‘intense’[.]” Id. An agency must only show that each

factor was “in some way addressed and evaluated.” Id.

First, with regard to intensity, our discussions in

various sections above have repeatedly concluded that HUD

58

built in context consideration to its examination of a

wide range of impacts, particularly with regard to

environmental justice, zoning, businesses occupying

historic properties, and traffic. In addition, those same

discussions touch on HUD’s consideration eight of the ten

factors that Council on Environmental Quality regulations

require agencies to consider regarding the intensity of

a project.7 Plaintiffs allege that their mere presence is

7

Namely, the following sections of 40 C.F.R. §

1508.27(b):

(1) Impacts that may be both beneficial and

adverse....

(2) The degree to which the proposed action

affects public health or safety.

(3) Unique characteristics of the geographic

area such as proximity to historic or cultural

resources, park lands, prime farmlands,

wetlands, wild and scenic rivers, or

ecologically critical areas.

(4) The degree to which the effects on the

quality of the human environment are likely to

be highly controversial.

(5) The degree to which the possible effects on

the human environment are highly uncertain or

involve unique or unknown risks.

(6) The degree to which the action may

establish a precedent for future actions with

significant effects or represents a decision in

principle about a future consideration

(7) Whether the action is related to other

actions with individually insignificant but

cumulatively significant impacts.

59

reason enough to require an environmental impact

statement. As support, plaintiffs offer arguments that

reiterate those discussed in the sections above. As

noted, the listed factors do not constitute categorical

rules such that their presence or absence means an impact

is per se significant. See Spiller, 352 F.3d at 243 (5th

Cir. 2003). HUD must therefore show only that it

addressed and evaluated these factors, even if it did not

do so in a “factor-by-factor fashion” Id. We have

concluded, in the preceding subsections, that HUD has not

acted arbitrarily and capriciously in its evaluation of

the project’s context nor in its assessment of various

individual intensity factors. Similarly, we now conclude

that its overall evaluation of the project’s context and

intensity as a whole neither arbitrary or capricious.

Plaintiffs arguments on these points largely rehash

(8) The degree to which the action may

adversely affect districts, sites, highways,

structures, or objects listed in or eligible

for listing in the National Register of

Historic Places or may cause loss or

destruction of significant scientific,

cultural, or historical resources.

60

the arguments they raised individually above, and we will

not repeat our analysis of them here. Their only new

arguments relate to traffic and to potential adverse

effects on historic resources. They first argue is that

the impacts of traffic were sufficiently controversial

and uncertain that HUD was required to prepare an EIS.

See 40 C.F.R. § 1508.27(b)(4). They adduce no evidence on

this point, however, beyond their own opposition to the

project and the same assertions we disposed on in our

analysis supra, in discussing traffic impacts and

cumulative impacts. As they have not met their burden of

proof as to the broader controversy of traffic impacts,

and since we above held that HUD’s consideration of

traffic issues was neither arbitrary nor capricious, we

now do not find HUD’s behavior arbitrary and capricious

in this regard.

Second, plaintiffs argue that HUD did not properly

consider the project’s potential adverse effects on

historic properties, as required by 40 C.F.R. §

1508.27(b). These arguments are similar to those they

61

raise challenging HUD’s findings under the NHPA review

process, discussed infra, and we reject them for the same

reasons: HUD has prepared a valid Memorandum of Agreement

that the consulting parties have agreed adequately

resolves the project’s potential adverse effects on

historic properties, and was not arbitrary and capricious

in determining that no National Historic Landmarks were

adversely affected. See 16 U.S.C. § 470h-2(i) (stating

that the NHPA shall not "be construed to require the

preparation of an environmental impact statement where

such a statement would not otherwise be required" under

NEPA.”).

11. Conclusion

Plaintiffs have raised numerous objections to HUD’s

EA and FONSI, but plaintiffs have failed to demonstrate

in any instance that HUD acted arbitrarily, capriciously,

or contrary to the law in deciding that the project did

not cause significant effects to human environment.

62

III.

Four National Historic Landmarks are located in the

St. Thomas project’s Area of Potential Effects: the

Garden District, the Vieux Carre, St. Alphonsus Church,

and St. Mary’s Assumption Church. Other historic

properties are also located near and in the project site.

Under NHPA § 106, HUD is required to consider the effects

of its actions on these historic properties by the

National Historic Preservation Act. As under NEPA, an

agency’s actions under the NHPA are procedural, and our

review of its decisions is conducted under the

Administrative Procedure Act’s “arbitrary and capricious”

standard. Vieux Carre Property Owners, Residents, &

Assocs. v. Brown, 875 F.2d 453, 456 (5th Cir. 1989).8

A federal agency, the Advisory Council of Historic

8

These challenges arise out of the same

cross-motions for summary judgment as the NEPA claims

discussed supra. Plaintiffs contend that the district

court erred in ruling that HUD arbitrarily and

capriciously concluded that the project would result in

no adverse effects to historic properties. Again, we

review the district court de novo on this point. See

Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 310 F.3d

870, 877 (5th Cir. 2002) (citing Auguster v. Vermilion

Parish Sch. Bd., 249 F.3d 400, 401 (5th Cir. 2001)).

63

Preservation (“ACHP”) has promulgated regulations that

require federal agencies to examine whether a proposed

project “has the potential to cause effects on historic

properties.” 36 C.F.R. § 800.3(a). Where an agency

proposes a finding of no adverse effect, it indicates

that the project has no effect on any historic property

that "diminish[es] the integrity of the property's

location, design, setting, materials, workmanship,

feeling, or association." 36 C.F.R. § 800.5(b) (read in

conjunction with (a)(1)). Such a finding triggers a

“consulting party review”, described in 36 C.F.R. §

800.5(c).

If the agency finds that historic properties will

suffer adverse effects, the agency must consult with the

ACHP and the State Historic Preservation Officer (“SHPO”)

and other parties “to develop and evaluate alternatives

or modifications to the undertaking that could avoid,

minimize or mitigate adverse effects on historic

properties.” See 36 C.F.R. § 800.5(a) (requiring agencies

to assess adverse effects); 36 C.F.R. § 800.6(a)

64

(requiring consultation). If adverse effects are found,

and the agency, the SHPO, and the ACHP (plus any other

required parties) may agree on a method of resolving

those effects, to be recorded in a Memorandum of

Agreement that specifies the manner of resolution. 36

C.F.R. § 800.6(b)(1)(4).

As in respect to environmental effects under NEPA,

however, an agency has no duty to abandon or modify a

project if the project is found to have an adverse effect

that is not avoided or mitigated, but only to follow the

mandated NHPA procedures.9 36 C.F.R. § 800.6. There is an

exception to that rule applicable to National Historic

Landmarks, as specially designated historic properties.

They are subject to more stringent requirements. When an

agency action will cause a direct adverse effect to a

National Historic Landmark, the agency has an affirmative

duty under NHPA § 110f to minimize the harm done. See

also 36 C.F.R. § 800.10(a)

9

Note that in many cases, as here, NHPA review is

often built into the NEPA review process. See 36 C.F.R.

§ 800.8(c) (permitting such combination).

65

Plaintiffs raise two challenges to HUD’s compliance

with the NHPA: 1) that HUD's compliance with the NHPA §

106 process was defective and 2) that HUD had, and

neglected to fulfill, a duty to minimize direct harm to

National Historic Landmarks under NHPA § 110f. We deal

with each in turn.

A.

Based on its finding that the St. Thomas project

would result in some adverse effects, HUD went through

the required consulting process with the SCHP, ACHP, and

other required parties. HUD originally produced an MOA

for the project in September 2000; no one challenges the

fact that HUD was not a signatory to that document, and

that as a result it may not have met the NHPA’s

requirements. See 36 C.F.R. § 800.6(c)(1)(I). In

September 2002, however, HUD reopened its NHPA review,

which resulted in a second, final MOA. The second MOA

covers more of the project than the first MOA, which

covered the residential portions of the project and

66

rehabilitation of the five remaining St. Thomas

buildings. The second document covers all of the above,

plus the Wal-Mart site and a nearby historic property,

the Amelia Cotton Press. The document is signed by all

necessary parties and contains various provisions meant

to mitigate the project’s effects on historic properties.

Plaintiffs argue that HUD’s failure to sign the first

MOA taints the validity of the second MOA. They assert

that the second document can only be taken to cover the

Wal-Mart and the Amelia Cotton Press and that, as a

result, HUD has not adequately considered adverse effects

on historical properties arising from the residential and

rehabilitation portions of the project. We are not

persuaded.

Plaintiffs offer no legal authority to suggest that

the second MOA may not incorporate and bind the parties

to, among other things, the same terms that had been

included in the first, incomplete or deficient document.

Second, a plain reading of the final MOA shows that it

covers the effects of and mitigation for the entire

67

project. Plaintiffs offer no evidence that the document

is meant to be interpreted in the limited fashion they

urge. Accordingly, we adhere to the general rule that,

absent other evidence, “[a] memorandum of agreement

executed and implemented pursuant to this section

evidences the agency official's compliance with section

106.” 36 C.F.R. § 800.6(c). Plaintiffs cannot, therefore,

show that HUD was arbitrary or capricious in relying on

the second, final MOA as proof of its compliance with the

requirements of NHPA § 106.

Plaintiffs’ second argument asserts that HUD was

required to undertake the “consulting party review”

process laid out in 36 C.F.R. § 800.5(c). This assertion,

however, misreads the governing regulations. 36 C.F.R. §

800.5(c) only requires consulting party review where HUD

proposes a finding of no adverse effect on any historic

property within the project’s area of potential effects.

Here, HUD made no such proposal; in fact, the agency

found that there were adverse effects on certain historic

properties such that it needed to consult with the ACHP

68

and SHPO to produce an MOA. The situation simply did not

meet the requirements triggering 36 C.F.R. § 800.5(c).

Plaintiffs’s assert that a finding under NHPA § 110f of

no adverse effects on National Historic Landmarks also

triggers § 800.5(c)’s provisions, but offer no legal

support for that reading, which conflicts with the plain

language of the regulation. As a result, we conclude that

HUD was not in violation of the NHPA’s procedural

requirements in not conducting consulting party review

under § 800.5(c).

B.

As noted above, NHPA § 110f imposes an affirmative

duty on federal agencies to minimize harm to National

Historic Landmarks where it finds that a project will

adversely affect such landmarks. In conducting its

assessment of whether the St. Thomas project would cause

such adverse effects, HUD relies on the opinion letter it

received from the National Park Service. That opinion

letter was drafted by Cecil McKithan, a Park Service

69

employee, after he visited the project site for that

express purpose. In it, Mr. McKithan stated that the St.

Thomas project would not adversely affect the National

Historic Landmarks. HUD relied on that letter in reaching

its determination that the project would have no adverse

effect on National Historic Landmarks in the area.

By October 2002, the State Historical Preservation

Officer, the Advisory Council on Historic Preservation,

and other consulting parties had expressed their

objection to that determination. At that point, National

Park Service contacted HUD at that point to let the

agency know that it was reexamining its conclusion in

response to those concerns. Mr.McKithan had by then

retired, and the Park Service was reviewing his findings

out of concern that it lacked sufficient information to

support his determination. On December 16, 2002, however,

the National Park Service withdrew its request for more

time to assess the project’s impact, on the grounds that

it had reexamined the materials before it. In doing so,

the National Park Service stated that “HUD, in accordance

70

with 36 C.F.R. § 800.10(c), appropriately sought National

Park Service’s comments and relied on those comments in

good faith[.]” It did not withdraw its statement that the

project would have no adverse effect. By February 2003,

both the SHPO and the ACHP, the very parties who had

initially questioned HUD’s determination of no adverse

effect with regard to NHLs, had again signed onto the

MOA, indicating their agreement with that determination.

See 36 C.F.R. §§ 110f(a) (noting that the results of the

§ 110f review process are to be incorporated into the

NHPA § 106 process), 800.6(c) (a signed MOA evidences the

agency’s official compliance with NHPA § 106).

Plaintiffs challenge HUD’s conclusion that the

project will have no significant impact on National

Historic Landmarks, arguing that HUD was arbitrary and

capricious in relying on the NPS’s recommendation since

it knew that the Park Service’s recommendation was

unsupported and incorrect. Essentially, they argue that

the National Park Service’s request for additional time

to reconsider its determination renders HUD arbitrary and

71

capricious for relying on the National Park Service’s

finding of no adverse impact. HUD may rely on the

reasonable opinions of its own experts, however, and

despite the reexamination, the National Park Service did

not, as plaintiffs allege, withdraw its determination of

no adverse effects. See Marsh, 490 U.S. at 378 (1989).

Indeed, despite the significant consideration given to

outside concerns, the National Park Service refused to

rescind its decision. Without some further evidence

pointing to flaws in the National Park Service’s

decision-making process and conclusion, HUD was not

arbitrary and capricious in relying on the National Park

Service’s determination as support for its conclusion

that the project would have no significant impact in this

regard.

IV.

In addition to contesting HUD’s decisions based on it

EA/FONSI and MOA, plaintiffs also challenge the district

court’s disposition of various motions. They first appeal

72

from the district court’s findings of ripeness and

mootness with regard their challenges of the earlier

versions of the environmental assessment/FONSI and MOA.

A.

Plaintiffs filed suit in July 2002, seeking

declaratory judgment that HUD and The Housing Authority

of New Orleans failed to comply with NHPA and NEPA and an

injunction forcing HUD to withhold grant funds until The

Housing Authority of New Orleans became compliant. In

October 2002, plaintiffs filed a motion for partial

summary judgment and permanent injunction. On February

21, 2003, the district court granted HUD's motion for

summary judgment, concluding in part that plaintiff’s

claims were not yet ripe for review because the court was

"under the impression that the NEPA review was still

pending." HUD had, in fact, closed the re-opened review

on February 20, 2003, having again undertaken an

environmental assessment and reached a FONSI; HUD, The

Housing Authority of New Orleans, the SHPO, and ACHP

73

entered an amended MOA on February 1, 2003.

Plaintiffs challenge the district court’s disposition

on summary judgment of their challenges to the first

environmental assessment/FONSI and MOA completed for the

St. Thomas redevelopment project, before those processes

were reopened by HUD. A grant of summary judgment is

reviewed de novo, “applying the same standard on appeal

that is applied by the district court.” Terrebonne Parish

Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 877 (5th

Cir.2002) (citing Auguster v. Vermilion Parish School

Board, 249 F.3d 400, 401 (5th Cir.2001).

In deciding whether a matter is ripe for review, the

court must consider “both the fitness of the issue for

the judicial determination and the hardship to the

parties of withholding consideration.” Abbott

Laboratories v. Gardner, 387 U.S. 136, 148 (1967). In

making its determination, the court should evaluate three

factors: “(1) whether delayed review would cause hardship

to the plaintiffs; (2) whether judicial intervention

would inappropriately interfere with further

74

administrative action; and (3) whether the courts would

benefit from further factual development of the issues

presented.” Ohio Forestry Ass’n, Inc. v. Sierra Club, 523

U.S. 726, 733 (1998).

The district court here determined that while the

complaint clearly met the case or controversy requirement

of Article III, “judicial review at [that] time [was]

inappropriate in light of the reopened reviews[,]”

particularly since “[t]he ordinary remedy for

unsustainable agency findings under NEPA is to remand the

matter to the agency ‘for further consideration.’”

Accordingly, it held that at that time the claim would

have inappropriately interfered with agency action, viz.,

the reopened NEPA and NHPA review processes. In

considering the other two Ohio Forestry factors, it found

that plaintiffs had “failed to demonstrate any hardship”

would be suffered as a result of withholding review.

Plaintiffs’ motion to the district court alleged that

“infrastructure work is being [per]formed, which is

eliminating the possibility of real consideration of

75

alternatives to the present project,” and that “[d]elay

of review will harm plaintiffs[’] ability to receive a

true review of the Project’s impact on the human

environment and historic properties.” A review of the

record, however, indicates that the district court was

given no further explanation or support for the

statements beyond the allegations. Finally, the district

court rightly noted that review at that time would entail

judicial review of “an admittedly incomplete

administrative record,” as the processes in question had

been reopened.

Given all of the above, the district court did not

err in determining that the issue was not yet ripe for

review: plaintiffs clearly had not made the showing

necessary under the Ohio Forestry test, and their

arguments fail before our court now for the same reasons.

B.

On March 31, 2003, plaintiffs amended their complaint

to include the original environmental assessment/FONSI

76

and MOA as well as the environmental assessment/FONSI and

the MOA resulting from the reopened process. Plaintiffs

then filed a second motion for summary judgment and for

a permanent injunction on April 4, 2003, again alleging

noncompliance with NEPA and the NHPA, and seeking to stop

all work on the project until an environmental impact

statement and Section 106 review had been properly

completed. That same day, HUD, The Housing Authority of

New Orleans, and HRI all filed motions for summary

judgment on the grounds that the reopened review complied

with NEPA and NHPA. On April 11, 2003, the court entered

an order in the case denying the plaintiffs' motion and

granting HUD's motion in part. In that order, the court

dismissed all of plaintiffs’ claims arising under the

NHPA. The court left open issues related to the first

environmental assessment and FONSI insofar as they were

necessary to determine awards of attorneys’ fees, but

stated that “the relief for remedying a deficiency in the

original environmental assessment/FONSI deficient [sic]

is now moot.”

77

In March 2004, the court dismissed all of plaintiffs’

remaining claims. In doing so, it held that the claims

against the original MOA were moot, as they had been

previously dismissed and were subject to the “law of the

case” doctrine. In addition, the court held that

challenges to the original environmental assessment/FONSI

were moot and did not fall within the “capable of

repetition, yet evading review” exception.

Plaintiffs first argue that the claims against the

original MOA are not made moot by the law of the case

doctrine because the later MOA does not encompass the

entire project. The law of the case doctrine “expresses

the practice of courts generally to refuse to reopen what

has been decided, not a limit to their power.” Messinger

v. Anderson, 225 U.S. 436, 443 (1912). The doctrine

applies not only to issues decided explicitly, but also

to everything decided “by necessary implication.”

Browning v. Navarro, 887 F.2d 553, 556 (5th Cir. 1989).

We reject this argument for the reasons discussed supra;

the second, final MOA is a comprehensive document and

78

supercedes the original.

Corrective action by an agency can moot an issue.

See, e.g., Commissioner v. Shapiro, 424 U.S. 614, 622-23

n.7 (1976) (holding that proper service of new notice of

deficiency and new notices of levy moots question as to

whether prior actions were procedurally defective). Other

circuits have found that subsequent agency action under

NEPA moots a challenge to original compliance where there

is no relief that would “undo” the harm. See Aluminum Co.

of Am. v. Adm’r, Township of Huron, 175 F.3d 1156, 1163

(9th Cir. 1999) (“The... complaints are stale because a

final environmental impact statement was prepared and we

can grant no relief that would "undo" the operation of

the [noncompliant agency action] during the period

between issuance of the 1995 ROD and the final

environmental impact statement.”); see also WRIGHT & MILLER,

FEDERAL PRACTICE AND PROCEDURE, § 3533.7 (“At any rate,

self-correction again provides a secure foundation for

mootness so long as it seems genuine.); id. § 3533.2

(“Action by the defendant that simply accords all the

79

relief demanded by the plaintiff may have the same effect

as settlement. So long as nothing further would be

ordered by the court, there is no point in proceeding to

decide the merits.... [M]ootness arises from the fact

that in one way or another, the parties have acted

voluntarily to dispose of the plaintiff's original claim

for relief.”)

In reopening the NHPA process, HUD took the voluntary

action required to address plaintiffs’ original claims.

At the closure of that process, a second, final MOA was

produced. As the St. Thomas project is no longer

proceeding under the original version of the MOA, any

remaining challenges to its validity have been mooted.

The district court rightly disposed of claims against the

final MOA in its April 13, 2003 ruling and, in its March

2004 ruling, explicitly recognizes the implicit results

of that decision.

Plaintiffs next argue that the district court erred

in refusing to apply the “capable of repetition, yet

evading review” exception to their challenges against the

80

original environmental assessment/FONSI. This exception

to the mootness doctrine applies where (1) the challenged

action is too short to be fully litigated before it

ceases and (2) there is a reasonable expectation that the

same complaining party will be subject to the same action

again. Benavides, 238 F.3d at 671 (quoting Spencer v.

Kenna, 523 U.S. 1, 17 (1998)). Plaintiffs do not argue

the second requirement at all. As to the first, they

argue that HUD is likely to avoid review on other

proposals, plans, or actions by using the tactic of

reopening NEPA or NHPA review. It is not, however,

inappropriate to permit agency reconsideration to moot an

initially unripe claim where the behavior involved no

longer plays a causal role in the harm alleged. See Ohio

Forestry Ass’n, Inc., 523 U.S. at 734. Here, HUD took

corrective action when it reopened its NEPA review

processes, which, despite its reconsideration, still

yielded a FONSI; plaintiffs have not demonstrated that

the original FONSI still plays a causal role in the

various harms they assert under NEPA. Accordingly, the

81

later challenges to the original environmental

assessment/FONSI and MOA were correctly denied as moot.

V.

Plaintiffs next challenge the district court’s April

11, 2003 rulings on their Rule 59 motion regarding (1)

the completeness of the administrative record, (2) the

prejudicial effect of the expedited briefing schedule,

and (3) the application of an incorrect standard of

review.

Rulings on Rule 59(e) motions are reviewed for abuse

of discretion. Simon v. United States, 891 F.2d 1154,

1159 (5th Cir. 1990). Unless the district court clearly

abused its discretion in determining that plaintiffs’

motion neither established a manifest error of law or

fact nor presented newly discovered evidence, the

district court’s ruling should not be disturbed. Id.

A.

Plaintiffs attempt to introduce several pieces of

82

extra-record evidence in arguing that HUD was arbitrary

and capricious in issuing a FONSI. In their Rule 59(e)

motion, they argued that the administrative record was

created impermissibly in response to litigation and does

not contain certain documents that should be part of the

record. Among these documents are Mr. Bagert’s highly

critical study of the HOPE IV program and the St. Thomas

project in particular, a lead contamination study

referred to by Dr. Mielke in his comments to the

environmental assessment regarding lead contamination,

and a Citywide Testing noise survey from April 20, 2000,

which found high levels of noise.

The district court refused to grant reconsideration

on the issue on the grounds that plaintiffs had failed to

show that any of the documents in the record were created

post hoc or not relied on by HUD in its decision-making.

It further noted that plaintiffs’ argument regarding the

completeness of the record was “essentially a new vehicle

for asserting the same arguments they made in opposition

to summary judgment - i.e., that HUD failed to adequately

83

consider certain potential environmental impacts and

ignored contrary information regarding these impacts.”

Extra-record evidence may be admitted if necessary to

determine whether an agency has adequately considered

adverse environmental impacts. Sierra Club v. Peterson,

185 F.3d 349, 369-70 (5th Cir.1999); Sabine River, 951

F.2d at 678. A district court's decision regarding the

admissibility of extra-record evidence is reviewed for

abuse of discretion. Davis Mountains Trans-Pecos Heritage

Ass'n. v. Federal Aviation Admin., 116 Fed. Appx. 3, 16

(5th Cir. 2004) (citing Northcoast Envtl. Ctr. v.

Glickman, 136 F.3d 660, 665 (9th Cir. 1998) and

referencing Davidson Country Oil Supply Co. Inc. v.

Klockner, Inc., 908 F.2d 1238, 1245 (5th Cir. 1990)

("stating that ‘[t]he trial court's discretion to admit

or exclude evidence is generally broad'").

As our analysis supra records, HUD fulfilled its duty

under NEPA: it identified the issue, assessed it, and

reached a supported conclusion, and we find no error in

the district court’s grant of the motion for summary

84

judgment. While plaintiffs may disagree with the outcome,

HUD’s environmental assessment did consider the issues

raised, and included at least some of the information

evidence plaintiffs urge was completely ignored, as has

been discussed supra. We agree with the district court’s

assessment that the administrative record adequately

supported HUD’s FONSI, and similarly hold that the

district court did not abuse its discretion in denying

plaintiffs’ Rule 59 motion in this respect. See Camp v.

Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 36 L.Ed.2d

106 (1973).

B.

Plaintiffs second challenge to the district court’s

denial of their Rule 59(e) motion alleges that they were

prejudiced by the expedited briefing schedule, which was

created as a result of HUD’s misstatements regarding

important deadlines.

On March 20, 2003, the district judge held a status

conference, at which it set an expedited schedule for

85

reviewing the newly issued environmental assessment/FONSI

and MOA based on the fact that the closing on the Wal-

Mart site was scheduled for April 15. The district judge

notes that plaintiffs “consented to an expedited schedule

and even took part in negotiating the details of that

schedule.” HUD filed the Administrative Record on March

27, 2003; cross motions for summary judgment were filed

April 4, 2003. Oppositions were filed on April 8, and

oral argument held on April 10.

In an April 3 phone conference, plaintiffs requested

an additional court day (from Friday to Monday) in which

to review the record; the district court denied the

request. The scheduled closing was delayed, finally

occurring in October 2003, due to the pendency of a

state-court bond validation lawsuit in which plaintiffs

were also participants.

The district court did not abuse its discretion in

denying the motion on this ground: all parties were

subject to the same time constraints, plaintiffs helped

develop and agreed to the expedited schedule, and

86

further, the closing was delayed due to a lawsuit in

which plaintiffs were also participating.

C.

Plaintiffs urge that the district court should have

applied a more stringent standard of review to the NEPA

process based on the fact that HUD’s administrative

record amounts to post hoc rationalization of its

decision to issue a FONSI. As a basis, plaintiffs cite to

the fact that certain studies were completed after the

environmental assessment process was reopened. Nothing in

the record, however, suggests that the information HUD

provided was completed to provide post hoc justification

for the agency’s final environmental assessment/FONSI.

Rather, the documents appear to be those relied on by HUD

in reaching its determination after reopening the

process. Furthermore, the reopened process led to changes

in the project - notably, the imposition of additional

traffic control measures. Since plaintiffs have not

sufficiently demonstrated post hoc rationalization or

87

prejudgment, the district court applied the proper

standard of review; viz., “arbitrary and capricious.”

VI.

On December 18, 2002, the district court granted

plaintiffs' Rule 41(a)(2) motion to dismiss The Housing

Authority of New Orleans from the case, conditioned on

payment of The Housing Authority of New Orleans's

attorneys' fees and costs. In early January 2003, The

Housing Authority of New Orleans re-entered the case as

an intervenor, to protect interests threatened by

plaintiffs' request for an injunction. In March 2003, the

district court awarded The Housing Authority of New

Orleans $1,800.50 in attorneys' fees, covering those

tasks related to the original suit and not useful to The

Housing Authority of New Orleans in its role as

intervenor. Plaintiffs’ final issue on appeal challenges

that award.

Rule 41(a)(2) motions for voluntary dismissal are not

usually appealable, since it is presumed that plaintiffs

88

obtained that which they sought.10 Yoffe v. Keller Indus.,

Inc., 580 F.2d 126, 129 (5th Cir. 1978); see also,

Briseno v. Ashcroft, 291 F.3d 377, 379 (5th Cir. 2002);

Mortgage Guar. Ins. Corp. v. Richard Carlyon Co., 904

F.2d 298, 300 (5th Cir. 1990). Under that rule, district

courts have authority to attach conditions to such a

dismissal in order to alleviate prejudice to the

defendants, but such conditions should be tailored so

that they only “alleviate the harm caused to the

defendant.” LeCompte v. Mr. Chip, Inc., 528 F.2d 601,

604-5 (5th Cir. 1976). “[The Fifth Circuit has] left open

the possibility that a rule 41(a)(2) dismissal with

conditions imposed by the district court may constitute

legal prejudice and thus render the dismissal

appealable.” Briseno, 291 F.3d at 379 (citing Yoffe, 580

F.2d at 129-30). We review conditions placed on a Rule

10

Defendants assert that plaintiffs may not appeal

the question of attorneys’ fees because they were not

brought before this court with a timely notice of

appeal. Because plaintiffs are not entitled to

attorneys’ fees even assuming, arguendo, that they have

timely appealed the issue, we decline to decide the

question here.

89

41(a)(2) motion for voluntary dismissal for abuse of

discretion. LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604

(5th Cir. 1976).

Appeal may be granted where 1) plaintiff is “legally

prejudiced” by the attendant conditions and 2) has not

“agreed to or legally acquiesced in those conditions.”

Mortgage Guar., 904 F.2d at 300 (citing Yoffe, 580 F.2d

at 130). Legal prejudice arises only where the district

court’s conditions are “‘clearly unreasonable’ or ‘so

outrageous as to demand a full appellate review.’” Yoffe,

580 F.2d at 131; see also, Mortgage Guar., 904 F.2d at

301. Awards of attorneys’ fees do not generally reach

that level. See, e.g., Yoffe, 580 F.2d at 130-1; Mortgage

Guar., 904 F.2d at 300-1 (Yoffe precedent makes arguments

that such awards cause legal prejudice “difficult to

sustain”).

Plaintiffs challenge the rationale given for the

district court’s conditions, arguing that they named The

Housing Authority of New Orleans as a defendant because

their arguments, in part, challenged an MOA to which the

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federal defendant, HUD, was not a signatory. The district

court, however, correctly noted that plaintiffs’ counsel

should have been familiar with the fact that the APA

“does not provide private plaintiffs a route for

reviewing the actions of nonfederal defendants such as

[The Housing Authority of New Orleans].” The court notes

that plantiffs’ attorneys were also counsel in two other

NEPA/NHPA suits where that principle was clearly stated:

Vieux Carre Property Owners, Residents & Assoc., Inc. v.

Brown, 875 F.2d 453, 458 (5th Cir. 1989) and Hayne Blvd.

Camps Preservation Ass’n, Inc. v. Julich, 143 F. Supp.

628, 631-2 (E.D. La. 2001). Fees were awarded to The

Housing Authority of New Orleans in the amount of

$1,800.50, calculated to cover only those activities The

Housing Authority of New Orleans undertook as a

defendant, not those occurring after it became an

intervenor.

On those facts, the district court’s condition did

not create legal prejudice for the plaintiffs: plaintiffs

brought suit against both HUD and the Housing Authority

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of New Orleans, the APA contains no provision that at any

time would have given plaintiffs a private cause of

action against the Housing Authority of New Orleans, and

from past experience, plaintiffs’ attorneys should have

known that to be the case. Furthermore, the fees awarded

were closely tied to the time and effort the Housing

Authority of New Orleans had expended in defending itself

against those claims. Accordingly, the District Court’s

award of attorney’s fees is not an abuse of discretion.

VII.

For these reasons, we conclude that HUD’s decision

that an EIS was not required was not arbitrary,

capricious, or contrary to law; that no further action is

required of the agency at this time under NEPA or the

NHLA; and that the district court committed no reversible

error in its decisions or its handling of the case.

Accordingly, HUD’s decision and the judgment of the

district court are AFFIRMED.

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