Petition — Flint Ridge Development Co. v. Scenic Rivers Assn. of Okla.

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Opinions Below

PE Wes... CU Chbee base eas ce na ee

Questions Presented

Statutory Provisions Involved

Statement of the Case

Reasons for Granting the Writ:

The Decision Below Erroneously Converts

the NEPA Standard of Major Federal Action

into Any Federal Action and Thus High-

lights the Immediate Need for Guidance by

the Court on What Federal Activities Do

Not Constitute “Major Federal Action Signi-

ficantly Affecting...The Environment”

Requiring an Environmental Impact State-

ss PETE TELCEE CEEOL TTC Tere

By Frustrating the Statutory Scheme of the

Interstate Land Sales Full Disclosure Act,

the Decision Below Conflicts with the

Principle Announced by the Court in

SCRAP I that NEPA Does Not Sub Silentio

Amend or Repeal by Implication any other

ER tained Eee gy See lene NS aeneee Iu

The Significance of the Issues Before the

Court and the Magnitude of the Error Below

is Underscored by the Wide Impact of the

I Stra es et lee ee ce

Conclusion

Appendix:

A. Opinion and Judgment of the United

States Court of Appeals for the Tenth

SE? Notas Se RAE he ern i Ur ah

® 6.46.6 8 8 ©. 8 2: 8 6 6.6 2 6 6 8 8 2 ee «

hh a & om a SF mF fo tt . - ee ee xe a wt ef oe eh ee se ee Oo i

(ii)

B. Opinion and Judgment of the United

States District Court for the Eastern

rr Cee ect eeeeee ees a ae's lb

C. The Interstate Land Sales Full Disclosure

Act, 15 U.S.C. § § 1706(a), (b), (d) and

1716; The National Environmental

Policy Act of 1969, 42 US.C. § § 4332

oo Serre rere sere e eee er lc

TABLE OF CITATIONS

Cases:

Arrow Transportation Co. v. Southern Ry. Co., 372

a, GEE on cubiewsettesescebroustcan ss 13

City of Boston v. Volpe, 464 F.2d 254 (Ist Cir.

arr Aree tes ey ey ee Pe ee ee 1]

Davis v. Morton, 469 F.2d 593 (10th Cir. 1972) ......... 9

Ely v. Velde, 451 F.2d 1130 (4th Cir. 1971) «2... ee eee 12

Greene County Planning Board v. FPC, 455 F.2d

Cob g: t. rea riew are wie eee 9

Izaak Walton League of America v. Schlesinger, 337

F. Supp. 287 (DC DC. 1971) ...... 2c ce eee eevee. 9

Jones v. Lynn, 477 F.2d 885 (Ist Cir. 1973) «1.1 ee eee 10

Monroe County Conservation Council, Inc. v. Volpe,

472 B.26 693 (26 Cie. 1972) ow cence cccccccees 11

Natural Resources Defense Council v. SEC, 389 F.

Supp. 689 (D.C.D.C. 1974) .. 0... cece eee ences 17

Proetta v. Dent, 484 F.2d 1146 (2d Cir. 1973) .......... 10

Sarr Francisco Tomorrow v. Romney, 472 F.2d

ii. Vo Sc: rere ie ae ee oe 10

Sierra Club v. Lynn, 502 F.2d 43 (Sth Cir. 1974) ..... 11,12

Silva v. Lynn, 482 F.2d 1282 (Ist Cir. 1973) «2.2... ee 12

Silva v. Romney, 473 F.2d 287 (Ist Cir. 1973) ....... 11,12

(iti)

Page

United States v. S.C.R.AP.; 412448:-669 (1973) ..>..43>78--

Upper Pecos Association v. Peterson, 409 U.S. 1021

EY Ch ee RS 1]

Upper Pecos Association v. Stans, 452 F.2d 1233

ha a re 11

Statutes:

Airport and Airway Development Act of 1970, 49

UBL. $§ 17iGle) (1) amb GB) ow. wc ccc ccc celn 11

Atomic Energy Act of 1954, 42 US.C. §2133(a) ........ 10

Crime Control Act of 1973, 42 U.S.C. §3733(a) ......... 12

Federal-Aid Highway Act of 1956, 23 USC.

a ee ee 11

Federal Power Act, 16 US.C.§803 ................. 9

Housing Act of 1949, 42 US.C. §1450 ef seg. .......... 10

Housing and Urban Development Act of 1968, 12

ns a Oo tas oe a ws a dg a a cea vb x 11

Interstate Commerce Act, 49 U.S.C. §15(7) ......... 13,14

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

ER Ee 4 te eT 3,7

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

i SETS So gS 4

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

§ 1706(a) ioe O 6 6 Oe 4.56 6.6 6 0-6:0 0's © OSS 6 6 4 2, 3, 15

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

a AES yee ap 3, 4,15

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

EE IE ae ee a 3,4, 15

Interstate Land Sales Full Disclosure Act, 15 U.S.C.

I tae ee ie ie 3, 4,8

National Environmental Policy Act of 1969, 42

OF 3,14

(iv)

ie de. Page

National Environmental Policy Act of 1969, 42

USL. GG5oe CPG si cccisstvcetusweneee 8, 13, 16

Public Works and Economic Development Act of

1966, 42 USL. GSIGGID ii veces iesceunee venue 10

Public Works and Economic Development Act

Amendments of 1971, 42 U.S.C. §3131(a) .......... 12

Securities Act of 1933, 15 US.C. § 772, et seq ...... 3, 7, 18

Urban Growth and New Community Development

Act of 1970 (Title VII), 42 U.S.C. §4501, et

. PEE re 12

25 USC. §$415{a) (Lease, Sale, or Surrender of

Allotted or Unalloted Lands) ............05050058. 9

28 U.S.C. §1254(1) (Supreme Court Jurisdiction) ......... 2

28 U.S.C. §1331(a) (District Court Jurisdiction) ......-. 5

Miscellaneous:

111 Congressional Record 27310-11 (1965) .........45. 7

113 Congressional Record 315-16 (1967) ........00005- 7

114 Congressional Record 15270 (1968) ...........05. 7

Council on Environmental Quality Guidelines on

Preparation of Environmental Impact State-

ments. GOCFR. GISGRS ...ccccscceseueeeee 18

Council on Environmental Quality Guidelines on

Preparation of Environmental Impact State-

ments, 40 C.F.R. § ISOD.DEE) . wwe cccnccesessesuss 16

1973 HUD Statistical Handbook 2920 ©... 6. ee ee eee 17

Licensing of Production and Utilization Facilities,

10 C.F.R. Part 50, Appendix D, Section D3 ......... 10

S. Rep. No. 1123, 90th Cong., 2d Sess. at 110

(1968)... cc ccc ccecces sees ieee einen 7

40th Annual Report, Securities and Exchange

Comanletion IGF .. wc ccc ccc ncccesessunesenues

IN THE

Supreme Court of the Hnited States

OCTOBER TERM, 1975

No.

FLINT RIDGE DEVELOPMENT COMPANY,

Petitioner*

THE SCENIC RIVERS ASSOCIATION OF

OKLAHOMA AND THE ILLINOIS RIVER

CONSERVATION COUNCIL,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

The petitioner Flint Ridge Development Company

respectfully prays that a wrt of certiorari issue to

review the judgment and opinion of the United States

Court of Appeals for the Tenth Circuit entered in this

case on 30 July 1975.

*Counsel for petitioner has been advised that the Solicitor

General of the United States will file a petition for a writ of

certiorari in this case on behalf of the Secretary of Housing and

Urban Development.

.

OPINIONS BELOW

The opinion of the Court of Appeals has not yet

been reported. It appears as Appendix A. The opinion

of the District Court is reported at 382 F.Supp. 69

(£.D. Okla. 1974). It appears as Appendix B.

JURISDICTION

The judgment of the Court of Appeals was entered

30 July 1975. This petition for certiorari is filed within

90 days of that date. This Court’s jurisdiction is

invoked under 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. Whether there is “major Federal action[] signifi-

cantly affecting the. ..environment” requiring an en-

vironmental impact statement under the National

Environmental Policy Act in connection with the filing

of a registration-antifraud disclosure statement under

the Interstate Land Sales Full Disclosure Act where the

Department of Housing and Urban Development's

authority is limited to checking to determine whether

the statement appears to be complete and accurate on

its face. °

2. Whether the environmental impact statement

requirement of the National Environmental Policy Act

overrides section 1706(a) of the Interstate Land Sales

Full Disclosure Act which affirmatively authorizes

interstate land sales 30 days after filing a registration-

antifraud disclosure statement complete and accurate on

3

its face with the Department of Housing and Urban

Development when 30 days is not long enough to

complete an environmental impact statement.

STATUTORY PROVISIONS INVOLVED

The relevant provisions of the National Environ-

mental Policy Act of 1969 (NEPA), 42 U.S.C.

§ §4332(2C) - 4335, and the Interstate Land Sales

Full Disclosure Act (ILSA), 15 U.S.C. § § 1706(a), (b),

and (d) and 1716, are set forth in Appendix C.

STATEMENT OF THE CASE

This case arises out of a determination of the

Secretary of Housing and Urban Development that the

filing of a registration-antifraud disclosure statement by

a developer pursuant to the Interstate Land Sales Full

Disclosure Act does not require preparation of an

environmental impact statement under the National

Environmental Policy Act of 1969 (NEPA).

The Interstate Land Sales Full Disclosure Act (ILSA),

1S U.S.C. § 1701, et seqg., directly patterned after the

Securities Act of 1933, 15 U.S.C. §77a, et seg., was

passed to eliminate fraud in interstate land sales. Under

§1706(a) of ILSA, the sale of lots in interstate

commerce can begin 30 days after the developer files a

registration-antifraud disclosure statement (statement of

record) with the Department of Housing and Urban

Development (HUD). The statement of record thus

automatically becomes “effective” 30 days after filing.

If it appears to HUD that the statement of record is

4

incomplete or-imaccurate on its face, its effective date

can be suspended, which has the effect of preventing

sales from commencing, until 30 days after the

developer corrects its statement of record. ILSA

§$1706(b). If it appears to HUD that an effective

statement of record is fraudulent, it may be suspended,

which has the effect of halting sales, until the developer

corrects its statement of record. ILSA § 1706(d).

The developer is required to furnish to purchasers

prior to sale a portion of the statement of record filed

with ILSA, called a property report, which contains

necessary information, such as condition of the title,

existence of roads and utilities, range of selling prices,

upon which a purchaser can make his or her own

determination of the economic value of the lot. ILSA

§ 1703(a)(1).

ILSA provides that the fact that a statement of

record has been filed or is in effect “...shall not

be... held to mean that the Secretary has in any way

passed upon the merits of, or given approval to, such

subdivision.” ILSA § 1716.

Petitioner Flint Ridge Development Company (Flint

Ridge) is a private joint venture organized to develop

and sell lots in a subdivision located in_ eastern

Oklahoma.

In May 1973, after site selection, financing, and

planning, the construction of utilities, roads and other

common improvements in the development began

[R533].

In February 1974, Flint Ridge filed its statement of

record wit’ HUD [R691]. Within 30 days HUD

notified Flint Ridge that its statement of record was

incon.plete and inaccurate on its face [R694]. On 2

May 1974, 30 days after filing its corrections, Flint

5

Ridge’s statement of record became effective by

operation of law [R690].

Respondents, environmental groups, in the interim,

filed a demand on HUD that prior to “approval” of

Flint Ridge’s statement of record, HUD must prepare

an environmental impact statement on the development

[R693]. HUD determined that an environmental impact

Statement was not required because its checking of a

statement of record and requiring correction thereof

was not a major Federal action significantly affecting

the environment [R696].

Respondents filed a complaint in the District Court

on 21 April 1974 seeking judicial review of HUD’s

determination. The District Court concluded that it had

jurisdiction, apparently under 28 U.S.C. § 1331(a).

The District Court suspended the effectiveness of

Flint Ridge’s statement of record, prohibited public sale

of lots thereunder, and enjoined HUD from

“approving” the statement of record until HUD

prepared an environmental impact statement.' The

District Court did not find, however, that Flint Ridge’s

statement of record which became effective 2 May

1974 was incomplete, inaccurate or fraudulent.

The Court of Appeals affirmed in pertinent part on

the ground that “major federal action significantly

'The District Court conducted a trial on the environmental

impact of the Flint Ridge Development. Among other things, it

found and the Court of Appeals recited that seepage from septic

tanks in the development would pollute the Illinois River —

notwithstanding Oklahoma State Law regulating septic tanks and

prohibiting pollution therefrom. This finding was not appealed only

because Flint Ridge maintains that it is irrelevant to the issues.

6

affecting... the environment was present” because of

“the consequences of the government’s approval of the

statement [of record] in terms of ease of obtaining

funds and in terms of the ultimate direct consequences

on the environment of the building of the houses... .”

(App. A, infra, p. 9a). The Court of Appeals also found that

there was no conflict between the ILSA provision

which automatically authorizes sales 30 days after filing

or correction of a statement of record and the

environmental impact statement requirement of NEPA

which concededly could not be satisfied in 30 days

because “‘[t]here is nothing in the statute, however,

which prohibits the agency from suspending a statement

of record pending the preparation and filing of an

impact statement.”’ (App. A, infra, p. 9a).

REASONS FOR GRANTING THE WRIT

1. THE DECISION BELOW ERRONEOUSLY

CONVERTS THE NEPA STANDARD OF

MAJOR FEDERAL ACTION INTO ANY

FEDERAL ACTION AND THUS HIGH-

LIGHTS THE IMMEDIATE NEED FOR

GUIDANCE BY THE COURT ON WHAT

FEDERAL ACTIVITIES DO NOT CONSTI-

TUTE “MAJOR FEDERAL ACTION SIGNI-

FICANTLY AFFECTING. .. THE ENVIRON-

MENT” REQUIRING AN_ ENVIRON-

MENTAL IMPACT STATEMENT.

The decision below is one of first impression in

finding major Federal action significantly affecting the

environment solely because of “... the consequences of

the government’s approval of the statement [of record]

-

in terms of ease of obtaining funds and in terms of the

ultimate direct consequences on the environment of the

building of the houses... ” (Emphasis supplied) (App.

A, infra, p. 9a). The organic statute involved, however.

specifically disclaims “approval” by the government and

only allows the government to review a private party's

antifraud disclosure document. The Court of Appeals

erroneously attempts to treat its decision as a modest

extension of existing case law when in fact it is a wide

departure. In attempting to rationalize the true

implications of its decision, the Court of Appeals relies

solely on cases which are inapposite, and if anything

Suggest that major Federal action is not involved in this

case. All of the cases relied upon by the decision below

involved organic statutes granting Federal control over,

direct involvement in, or approval and funding of

private activities that affect the environment.

In the Congressional debates, Senator Williams, the

chief sponsor, described the Interstate Land Sales Full

Disclosure Bill as follows:

“It is not a regulatory statute which will permit

the Federal Government to pass upon such

questions as land vale, its selling price, land use,

or zoning. The only purpose of this legislation is

to give the purchaser the necessary information

upon which he can make his own investment

decision.”

114 Cong. Rec. 15270 (1968); See also, S. Rep.

No. 1123, 90th Cong., 2d Sess. at 110 (1968).

The Interstate Land Sales Full Disclosure Act (ILSA),

15 U.S.C. § 1701, et seq., directly patterned after the

Securities Act of 1933, 15 U.S.C. §77a, et seq.,? was

7111 Cong. Rec. 27310-11 (1965) (remarks of Sen. Williams

introducing §.2672, the Interstate Land Sales Full Disclosure

Bill); 113 Cong. Rec. 315-16 (1967) (remarks of Sen. Williams

reporting S.275, the Interstate Land Sales Full Disclosure BiH,

—o-

8

passed to eliminate fraud in interstate land sales. Under

ILSA, the land developer files a registration-antifraud

disclosure statement (statement of record) with the

Department of Housing and Urban Development

(HUD). HUD reviews the statement of record for

completeness and accuracy on its face. Under ILSA,

HUD has no authority whatsoever over the land

developer, or purchasers of its land, other than the

accuracy and completeness of the statement of record

and fraud.

ILSA, which governs the contents of a statement of

record provides:

“The fact that a statement of record with

respect to a subdivision...is in effect shall

not...be held to mean...{HUD] has in any

way passed upon the merits of, or given approval

to, such subdivision.”

15 U.S.C. § 1716 (Emphasis supplied).

If the disclosure requirements of ILSA are met by

the developer, HUD has no discretion whatsoever,

except that it may shorten the period in which a

statement of record becomes effective.

The National Environmental Policy Act of 1969

(NEPA) commands “all agencies of the Federal

Government” to prepare an environmental impact

statement whenever they propose to undertake “major

Federal actions significantly affecting the... environ-

ment.”’ 42 U.S.C. § 4332(2\(C).

The court below based its finding of major Federal

action on three lines of cases which involved matters

out of Committee). The bills introduced in 1965 and 1967

contained provisions that would have entrusted administration of

land sales disclosure to the Securities and Exchange Commission.

Id.

9

“similar to that here presented,” a condition “not far

different from ours” and an “analogy”’ (App. A, infra,

pp. 7a, 8a) (Emphasis supplied), thus treating its

decision as no more than a modest extension of existing

law rather than what it is — a radical departure. Each

of the organic statutes involved in the cases relied upon

by the court below provides Federal control over,

involvement in, or approval and funding of the project.

They stand in stark contrast to ILSA, which gives HUD

no such authority.

The principal case relied upon by the court below as

“similar” is Davis v. Morton, 469 F.2d 593 (10th Cir.

1972). This case involved a lease of “restricted” Indian

lands. The relevant portion of the organic statute,

however, provides:

“Any restricted Indian lands... may be leased

by the Indian owners, with the approval of the

Secretary of Interior... and all leases and renewals

shall be made under such terms and regulations as

may be prescribed by the Secretary of the

Interior.”

25 U.S.C. § 415(a) (Emphasis supplied).*

>The organic statute in Greene County Planning Board v.

FPC, 455 F.2d 412 (2d Cir. 1972), in pertinent part provides:

“fa]ll licenses issued ...shall be on the following con-

ditions: (a) That the project adopted . . . shall be such as in

the judgment of the Commission will be best adapted to a

comprehensive plan .. . and if necessary . . . the Commission

shall have authority to require the modification of any

project ... before approval.” 16 U.S.C. §803 (Emphasis

supplied).

The organic statute in Izaak Walton League of America v.

Schlesinger, 337 F.Supp. 287 (D.C. D.C. 1971), in pertinent part

provides

10

The eight cases involving conditions “not far

different from ours” include San Francisco Tomorrow

vy. Romney, 472 F.2d 1021 (9th Cir. 1973). However,

that court described the organic statute as follows:

“The provisions of the Housing Act of 1949, 42

U.S.C. §1450 et seq.,...enable basically a

contractual relationship between a locality and

HUD....A loan or a grant, or both, may be

made from the federal government to the locality.

The Secretary may establish reasonable require-

ments for the program which must be complied

with prior to the entering into [sic] a contract

with the locality. These requirements operate as

conditions precedent to the formation of the

contract. § 1453. ... This statutory scheme thus

provides for local adoption of a plan, adjustment

of the plan to meet HUD requirements and finally

entry into an enforceable contractual relationship

with HUD.”

472 F.2d at 1023, n.1 (Emphasis supplied).*

“Is]uch licenses [construction of nuclear reactors] shall be

issued ... subject to such conditions as. the Commission

may by rule or regulation establish...” 42 U.S.C.

§ 2133(a) (Emphasis supplied).

The regulation at issue in Schlesinger, 10 C.F.R. Part 50,

Appendix D, Section D.3, in pertinent part provided

* the Commission may issue a license for limited

operation after consideration and balancing of the factors

...and upon making the appropriate findings on

the matters specified .. . .” (Emphasis supplied).

“The organic statute in Proetta v. Dent, 484 F.2d 1146 (2d

Cir. 1973), in pertinent part provides:

“(f]inancial assistance under this section shall be on such

terms and conditions as the Secretary determines...” 42

U.S.C. § 3142(b) (Emphasis supplied).

The organic statute in Jones v. Lynn, 477 F.2d 885 (Ist Cir.

The principal case relied upon by the court below as

providing an “‘analogy” is Sierra Club v. Lynn, 502

1973), is the Housing Act of 1949 discussed under San Francisco

v. Romney, /d.

The organic statute in Silva v. Romney, 473 F.2d 287 (ist

Cir. 1973), in pertinent part provides:

“(t]he property or project shall — (A) comply with such

standards and conditions as the Secretary may prescribe to

establish the acceptability of the property for mortgage

insurance...."” 12 U.S.C. §1715z-1(jX5) (Emphasis

supplied).

The organic statute in Monroe County Conservation Council,

Inc. v. Volpe, 472 F.2d 693 (2d Cir. 1972), in pertinent part

provides for the

“... approval [by the Secretary of Commerce of] surveys,

plans, specifications and estimates [of proposed highway

projects] .” 23 U.S.C. § 106(a) (Emphasis supplied).

The organic statute in City of Boston v. Volpe, 464 F.2d 254

(Ist Cir. 1972), in pertinent part provides: .

“[a]ll airport development projects shall be subject to the

approval of the Secretary, which approval may be given only

if he is satisfied that... [and] [n]o airport development

project may be approved by the Secretary unless he is

satisfied that fair consideration has been given

to the interest of communities in or near which the project

may be located.” 49 US.C. §§1716(cK1) and (3)

(Emphasis supplied).

The organic statute in Upper Pecos Association v. Stans, 452

F.2d 1233 (10th Cir. 1971), vacated and remanded to determine

mootness, 409 U.S. 1021 (1972), in pertinent part provides that

the Secretary of Commerce is authorized to make grants

“...if he finds that — (A) the project for which financial

assistance is sought will directly or indirectly . . . primarily

benefit the long-term unemployed and members of

low-income families or otherwise substantially further the

12

F.2d 43 (Sth Cir. 1974). That court, however, described

the operation of the organic statute (Urban Growth and

New Community Development Act of 1970 (Title VII),

42 U.S.C. § 4501, et seq.) as follows:

“After a developer has successfully traversed the

application process and accepted an offer of

commitment, the terms and conditions under

which he must operate are negotiated with HUD

and executed in a project agreement. A trust

indenture and a development plan must set out

...(iv) the pace, scope and detail of the

developer’s undertakings in terms of 1-year, 3-year

and long-term periods. These documents are

incorporated into the project agreement and,

hence, ars [sic] enforceable at law. In addition,

the developer is required each year to submit a

new l-year and 3-year plan and, if changed

conditions warrant substantial alterations, a revised

long-term plan. Substantial changes in any part of

the development plan require approval by the

Secretary.”

§02 F.2d at 53.°

objectives of the Economic Opportunity Act of 1964...”

42 U.S.C. § 3131(a) (Emphasis supplied).

The organic statute in Ely v. Velde, 451 F.2d 1130 (4th Cir.

1971), in pertinent part provides that

“It}he Administration shall make grants... [for an]

approved comprehensive State plan . . . No state plan shall be

approved as comprehensive unless the Administration finds

that the plan provides for the allocation of adequate

assistance to deal with law enforcement... .” 42 U.S.C.

§ 3733(a) (Emphasis supplied).

The court found that the agency could impose conditions as to

the making of a grant. 451 F.2d at 1135 and 1137.

SThe organic statute in Silva v. Lynn, 482 F.2d 1282 (Ist Cir.

1973), was the same as that in Silva v. Romney, op. cit.

13

Thus, the decision below poses the fundamental

policy question of whether a Federal agency which has

no substantive responsibility for, or authority over,

those activities of a private party which affect the

environment is required by the National Environmental

Policy Act to bar sales until the agency completes an

environmental impact statement on _ those private

activities.

2.BY FRUSTRATING THE STATUTORY

SCHEME OF THE INTERSTATE LAND

SALES FULL DISCLOSURE ACT, THE

DECISION BELOW CONFLICTS WITH THE

PRINCIPLE ANNOUNCED BY THE COURT

IN SCRAP I THAT NEPA DOES NOT SUB

SILENTIO AMEND OR REPEAL BY IMPLI-

CATION ANY OTHER STATUTE.

In United States v. S.C.R.A.P., 412 U.S. 669 (1973)

(SCRAP I), the Court faced the question of whether

the National Environmental Policy Act (NEPA) sub

silentio amended or repealed by implication section

15(7) of the Interstate Commerce Act. The District

Court enjoined the Interstate Commerce Commission

(ICC) from permitting and the railroads from collecting

an interim surcharge on transportation of recyclable

goods on the ground that the ICC orders refusing to

suspend the surcharge were unlawful under section

102(2)(C) of NEPA because they constituted major

Federal action significantly affecting the environment

for which the ICC had not prepared an environmental

impact statement. The District Court found that NEPA

empowered it to issue the injunction notwithstanding

the holding in Arrow Transportation Co. v. Southern Ry.

14

Co., 372 U.S. 658 (1963), that section 15(7) vested in

the ICC the sole and exclusive power to temporarily

enjoin collection of rates and withdrew such power

from the judiciary. The Court concluded that NEPA

did not repeal by implication section 15(7) of the

Interstate Commerce Act:

“The statutory language, in fact, indicates that

NEPA was not intended to repeal by implication

any other statute. Thus, 42 U.S.C. § 4335 specifies

that ‘[t]he policies and goals set forth in [NEPA]

are supplementary to those set forth in existing

authorizations of Federal agencies,” and 42 U.S.C.

§ 4334 instructs that the Act ‘shall [not] in any

way affect the specific statutory obligations of any

Federal agency... .’ Rather than providing for any

wholesale overruling of prior law, NEPA requires

all federal agencies to review their ‘present

statutory authority, adininistrative regulations, and

current policies and procedures for the purpose of

determining whether there are any deficiencies or

inconsistencies therein which prohibit full com-

pliance with the purposes and provisions of

{NEPA] and shall propose to the President

_..Such measures as may be necessary to bring

their authority and policies into conformity with

the intent, purposes, and procedures set forth in

{NEPA].’ 42 U.S.C. § 4333. It would be anomal-

ous if Congress had provided at one and the same

time that federal agencies, which have the primary

responsibility for the implementation of NEPA,

must comply with present law and ask for any

necessary new legislation, but that the courts may

simply ignore what we described in Arrow as ‘a

clear congressional purpose to oust judicial

power....

412 U.S. at 694-95 (Emphasis supplied and

footnotes omitted).

15

ILSA is a carefully devised statutory scheme to

prevent fraud without imposing stifling regulatory

burdens on the economically important business of

interstate land sales. The statutory scheme is a simple

one. The developer must file a registration-antifraud

disclosure statement called a statement of record with

HUD. Section 1706(a) of ILSA provides for a statement

of record to automatically become “effective” 30 days

after filing and the developer may then begin sales. Under

section 1706(b), the effective date of a developer's

statement of record can be suspended only if a statement

of record appears to HUD to be “...on its face

incomplete or inaccurate in any material respect... .”

In that event, the effective date is suspended only until

30 days after the developer files the necessary

corrections in its statement of record. Under section

1706(d), an effective statement of record can he

suspended only if it contains an untrue statement of

material fact or omits a material fact. In that event, the

statement of record remains suspended only until the

developer files the necessary corrections. The effect of

suspension is to stop sales from beginning or halt sales

in progress. The power of HUD to suspend, therefore,

comes into play only if the developer fails to make the

required disclosure — and not because of anything HUD

either does or fails to do. HUD has no discretion to

suspend a statement of record for any other reason.

ILSA neither requires nor allows HUD to make any

judgment about the merits of the underlying develop-

ment. Congress thus devised a statutory scheme that

gives HUD suspension power to prevent fraud but erects

a barrier against Government caused delay beyond the

initial 30 day period

16

It is undisputed that an environmental impact

statement under NEPA cannot be completed in 30

days. Thus, ILSA gives HUD 30 days to act, absent

incomplete disclosure, but HUD cannot complete an

environmental impact statement in 30 days.’ The

decision below concludes that the effective date of a

statement of record must be suspended beyond the 30

days solely because HUD must first complete an environ-

mental impact statement. This results in an open-ended

delay in bringing land to market. The statutory scheme of

ILSA that authorizes a developer to begin sales 30 days

after filing or correcting a statement of record and

prohibits Government caused delay thereafter is repealed

by the decision below.

6The Council on Environmental Quality Guidelines for

Preparation of Environmental Impact Statements, 40 C.F.R.

§ 1500.9(f), which are advisory, state that other Federal agencies,

which must be consulted under § 102(2(C) of NEPA, should be

given not less than 45 days to comment on the draft

environmental impact statement.

7The decision below suggests that this operational conflict

between ILSA and NEPA could be accommodated in the

following way:

“Thus, a developer could give advance notice to HUD of its

intent to sell land in interstate commerce, whereby HUD

could commence the preparation of its impact statement.”

(App. A, infra, p. 9a).

In order to begin preparing an environmental impact statement,

however, HUD must at the very least know what a deveioper

plans to do with the land, including the size, location and

number of lots, utilities, sewers, roads and other improvements.

When a developer knows that information he is prepared to file

his statement of record. Thus, if the developer refrains from

filing in order to give HUD “advance notice,” the Government

caused delay is merely shifted forward.

17

There is no reason, however, to frustrate the

statutory scheme of ILSA in order to provide for

environmental disclosure. For example, HUD could

initiate a rulemaking proceeding to require environ-

mental disclosure in statements of record — consistent

with the statutory scheme of ILSA. See, Natural

Resources Defense Council v. SEC, 389 F.Supp. 689

(D.C. D.C. 1974). Respondents requested no such relief

from HUD or from the District Court.

The decision below defeats the statutory scheme of

ILSA and thus conflicts with the principle announced

by the Court in SCRAP I that NEPA does not repeal

by implication any other statute.

3. THE SIGNIFICANCE OF THE ISSUES BE-

FORE THE COURT AND THE MAGNI-

TUDE OF THE ERROR BELOW IS UNDER-

SCORED BY THE WIDE IMPACT OF THE

DECISION BELOW.

In the year ended 31 December 1973, 3,568

statements of record were filed with HUD under

ILSA.*® The decision below would not only immediately

bring to a halt for an indefinite period of time the

enormous land sales industry presently subject to ILSA

but would also build in substantial delay into all such

future projects.

HUD’s duties and powers under ILSA are precisely

the same with respect to each development that is

®1973 HUD Statistical Handbook 292.

18

subject to the registration-antifraud disclosure require-

ments met by filing a statement of record. The decision

below prohibits the Flint Ridge Development Company

from selling lots until HUD prepares an environmental

impact statement under NEPA. Thus, except in the rare

case where it can be shown that a development will have

an insignificant effect on the environment or some

statutory registration exemption is available, sales of any

lots in the United States cannot begin until HUD

completes an environmental impact statement on those

developments.

One need only examine the Council on Environ-

mental Quality’s Guidelines on Preparation of Environ-

mental Impact Statements, 40 C.F.R. § 1500.8, to

conclude that independent analysis of the mass of

information and data required in an environmental

impact statement is a substantial job. When this is

combined with the requirements for interagency review,

the experience of Federal agencies demonstrates that an

adequate environmental impact statement cannot be

expected to be completed in less than a year.

ILSA was patterned directly after the Securities Act

of 1933. The Securities Act of 1933 also requires the

filings of a registration-antifraud disclosure statement as

a prerequisite to use of the means of interstate

commerce for the sale of securities subject to the Act.

In the fiscal year ended 30 June 1974, 2,890

registration statements were filed with the Securities

and Exchange Commission under the Act.? ° The

decision below is direct precedent for not only

immediately interrupting for an indefinite period of

°40th Annual Report, Securities and Exchange Commission

167.

19

time access to the public securities market for funds for

industrial and housing construction that significantly

affects the environment but also for building in

substantial delay in all such future financing and

construction while the Securities and Exchange Com-

missicn prepares environmental impact statements.

The one or more years’ delay imposed on land

development projects will result in substantial additional

interest costs during the time required for HUD to

complete environmental impact statements. It is diffi-

cult to determine the ultimate number of developers

who will be thrown into bankruptcy by this un-

anticipated burden of delay, particularly in present

market conditions. At the very least, the decision below

will substantially delay present and future land

development. In some cases it will result in outright

abandonment.

Particularly in this time of drastic unemployment and

critical need for additional capital for plant and housing

construction, our economy cannot risk the burden

imposed by the decision below.

20

APPEND

CONCLUSION soles

For these reasons, a writ of certiorari oe fee UNITED STATES COURT OF APPEALS

review the judgment and opinion of the Tent ircuit. TENTH CIRCUIT

Respectfully submitted,

Nos. 74-1520 and 74-1750

HARRY A. RISSETTO ,

THOMAS C. WATSON Filed: July 30, 1975

EDWIN KRONFELD

1800 M Street, N.W. THE SCENIC RIVERS ASSOCIATION OF _ )

Washington, D.C. 20036 OKLAHOMA and THE ILLINOIS RIVER )

F. PAUL THIEMAN, JR. CONSERVATION COUNCIL, corporations,

5800 East Skelly Drive Plaintiffs- Appellees,

Tulsa, Oklahoma 74135

eas Vv

Counsel for Petitioner

JAMES T. LYNN, Secretary of Housing Appeal from the

OF COUNSEL: and Urban Development, and GEORGE United States

MORGAN, LEWIS & BOCKIUS K. BERNSTEIN, Administrator of District Court for

1800 M Street, N.W. Interstate Land Sales, Department of the Eastern District

Washington, D.C. 20036 Housing and Urban Development, of Oklahoma

Defendants-Appellants, (D.C. No. 74-131-C)

CROWE & THIEMAN

5800 East Skelly Drive

Tulsa, Oklahoma 74135 and

FLINT RIDGE DEVELOPMENT COMPANY,

Intervening Defendant-Appellant.

Nm meee ee ee ee

2 October 1975

Andrew T. Dalton, Jr. and James Khourie (James Ikard,

on the brief), for Plaintiffs-Appellees.

Charles E. Biblowit, Attorney, Department of Justice

(Wallace H. Johnson, Assistant Attorney General, and

2a

Carl Strass and Dennis A. Dutterer, Attorneys,

Department of Justice, on the brief), for

Defendants-Appellants.

Thomas C. Watson of Morgan, Lewis & Bockius and F.

Paul Thieman, Jr. of Crowe and Thieman (Edwin

Kronfeld of Morgan, Lewis & Bockius and Gordon B.

Cecil of Crowe & Thieman, on the brief), for

Intervening Defendant-Appellant.

Before LEWIS, Chief Judge, and McWILLIAMS and

DOYLE, Circuit Judges.

DOYLE, Circuit Judge.

This is an appeal from an order, judgment and

decree of the United States District Court for the

Eastern District of Oklahoma in which the defendants-

appellants were enjoined pending the preparation of an

environmental impact study “of the effects of the Flint

Ridge Development on the quality of the human

environment” by the Secretary of Housing and Urban

Development and Office of the Interstate Land Sales

Registration, a division of the Department of Housing

and Urban Development. The essential holding of the

trial court was that the responsibilities of the

Department of Housing and Urban Development were

of such a nature as to require the preparation of an

impact statement pursuant to the requirements of the

National Environmental Policy Act, 42 U.S.C. § 4331 et

seq.

3a

The action herein was filed on April 24, 1974 by the

Scenic Rivers Association and the Illinois River

Conservation Council. Named as defendants were Lynn,

Secretary of the Department of Housing and Urban

Development (HUD) and Bernstein, Administrator of

the Office of Interstate Land Sales Registration

(OILSR). In this suit a declaratory judgment was sought

that HUD must conduct an environmental study and

file an impact statement prior to its approval of a filing

with the OILSR. Also sought was an injunction pending

a determination in the case, together with the issuance

of a mandatory order compelling the Secretary to

comply with NEPA. In addition, plainti.fs sought a

preliminary injunction requiring HUD to withdraw

approval of the statement of record and property report

which had been filed by Flint Ridge Development

Company on February 5, 1974.

Flint Ridge was engaged in developing an area along

the Illinois River in Oklahoma. In order to do so it was

required to file certain documents under the Interstate

Land Sales Act, 15 U.S.C. §1701 et seq. This is a

prerequisite to the sale of lots in commerce. The

original filing of Flint Ridge was determined to be

inadequate and an amended statement of record was

filed by Flint Ridge. This was effective as of May 2,

1974, that is, after the filing of the present lawsuit.

The order that is now being reviewed was issued

following a hearing on preliminary injunction on July

31, 1974. Flint Ridge had been allowed to intervene

and the hearing on injunction was merged with the

hearing on the merits. Evidence was presented, and on

August 2, 1974, the ruling from the bench which was

later formalized in findings and opinion held that HUD

was required to prepare an impact statement. The court

4a

further ordered that the Flint Ridge ©.atement be

suspended. Later, on September 4, 1974, the trial court

filed its findings of fact and conclusions of law and an

order. This enjoined HUD and OILSR from approving

the Flint Ridge filing until an environmental impact

study had been prepared and a hearing held thereon.

The court ordered immediate withdrawal of the

approval which had been given May 2 and ordered

defendants-appellants to comply with the NEPA

procedures.

The effect of the court’s orders suspending the

Statement of record was that it forbade interstate sales

until further order of the court. Unquestionably the

development would have had a substantial impact on

the environment inasmuch as the Illinois River is a

State-designated scenic river. Three thousand lots were

to have been sold. On each would have been a home

with a septic tank for disposal of human refuse, which

refuse would have contaminated the river. The trial

court considered this fact in determining that the filing

with HUD and OILSR was major federal action which

would significantly affect the quality of the human

environment.

The government agencies and Flint Ridge are the

appellants in the present proceedings. They contend

that the court erred:

1) In holding that the filing under the Interstate

Land Sales Act constituted major federal action:

2) In ruling that an impact statement had to be

prepared prior to the approval of a filing. The

contention was here that to so read the National

Environmental Policy Act is to create an irreconcilable

conflict between NEPA and the Interstate Land Sales

Act:

Sa

3) In requiring a public hearing;

4) In ruling that there was jurisdiction to consider

the question as to whether NEPA limited the Interstate

Land Sales Act and to enjoin the actions of HUD and

OILSR in deference to the provisions of INEPA.

The first question is whether NEPA applies to the

actions of the OILSR. The relevant provision of NEPA

requires that “to the fullest extent possible” all agencies

of the Federal Government shall prepure a detailed

environmental impact statement for all “major Federal

Actions significantly affecting the quality of the human

environment.”' The defendants-appellants take the

'The relevant NEPA provision as read in context furnishes a

better picture of its requirements:

The Congress authorizes and directs that, to the fullest extent

possible .. . all agencies of the Federal Government shall . . . in-

clude 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 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 long-term

productivity, and

(v) any irreversible and irretrievable commitments of resources

which would be involved in the proposed action should it be

implemented.

6a

position that review of the statements of record which

are required to be filed under the Interstate Land Sales

Act does not constitute major federal action. As we

have above shown, the district court disagreed with this

and enjoined OILSR from approving the statement of

record until it had filed an impact statement. Therefore,

the question boils down to whether the action on the

part of OILSR constitutes a major federal action

significantly affecting quality of the human environ-

ment. The argument is that the action is largely a

private one involving as it does the filing of the

statement, but it is more than that because OILSR does

have the authority to suspend a statement, the effect of

which is to cut off raising funds in interstate which

would be otherwise available. Thus, this allows the

Federal Government to suspend a private action which

would unquestionably affect the environment.

Our decision in Davis v. Morton, 469 F.2d 593 (10th

Cir. 1972) dealt with a matter which was very similar

to that here presented. A 99-year lease of Indian lands

was executed by the Pueblo of Tesuque. The lease was

to the Sangre de Cristo Development Company, Inc. as

lessee. The district court there held that the Secretary

of the Interior was not required to file an impact

statement prior to approval or disapproval of a lease

between the Tribe and the developer. The trial court

was impressed by the fact that the United States had

not initiated the lease, was not a party, had no interes:

and the government action was limited to approval or

disapproval. Our court reversed. holding that the

Secretary's authority to ratify or reject leases on Indian

lands would come within the terms of NEPA. The

opinion quoted the broad purposes of NEPA as set

forth in 42 U.S.C. §4331(b) as showing the intention

7a

of Congress to preserve the environment.? Cited with

approval was Greene County Planning Board v. Federal

Power Comm'n, 455 F.2d 412 (2d Cir. 1972), holding

that the granting of a license to construct a high voltage

line constituted major federal action. Also relied on was

Izaak Walton League of America v. Schlesinger, 337 F.

Supp. 287 (D.D.C. 1971), requiring the Atomic Energy

Commission to prepare an environmental impact

Statement before issuing an interim operating license for

a nuclear power plant.

The similarity between our case and Davis is that

both involve filing and approval of private action. The

result of approval! here is that the developer is free to

seek funds in commerce for the development. In each

instance the filing is a preliminary step which is

followed by substantial consequences to the environ-

ment; thus, there is action which leads to the

development which in turn affects the human environ-

ment.

2 The court said:

{I]t is the continuing responsibility of the Federal

Government to use all practicable means, consistent with

other essential considerations of national policy, to... (2)

assure for all Americans safe, healthful, productive, and

esthetically and culturally pleasing surroundings; (3) attain

the widest range of beneficial uses of the environment

without degradation, risk to health or safety, or other

undesirable and unintended consequences; (4) preserve

important historic, cultural, and natural aspects of our

national heritage, and maintain, wherever possible, an

environment which supports diversity and variety of

individual choice;....

469 F.2d at 596.

8a

There are many cases which hold that the impact

resulting from governmental funds is capable of

significantly affecting the quality of the environment, a

condition which is not far different from ours.*

It is true that funding could be obtained within the

State of Oklahoma even without approval, but

obviously the obtaining of funds interstate is important.

If it were not important, Flint Ridge would not be

litigating the present issue.

An analogy is shown in the case of the giving of a

guarantee by HUD. This has a significant affect. See

Sierra Club v. Lynn, 502 F.2d 43 (Sth Cir. 1974); Silva

v. Lynn, 482 F.2d 1282 (Ist Cir. 1973). See, also,

National Resources Defense Council, Inc. v. S.E.C., 389

F. Supp. 689 (D.D.C. 1974) in which it was held that

NEPA applies to S.E.C. offerings. The filing with the

>See Proetta v. Dent, 484 F.2d 1146 (2d Cir. 1973)

(Economic Development Administration loan commitment to

finance a portion of construction costs for expanding a private

plant); Jones v. Lynn, 477 F.2d 885 (Ist Cir. 1973) (HUD loan

and grant); Silva v. Romney, 473 F.2d 287 (Ist Cir. 1973) (HUD

mortgage guarantee and interest grant for private housing

project); San Francisco Tomorrow v. Romney, 472 F.2d 1021

(9th Cir. 1973) (HUD loan and grant); Monroe County

Conservation Council, Inc. v. Volpe, 472 F.2d 693 (2d Cir.

1972) (Department of Transportation determination to fund

highway); City of Boston v. Volpe, 464 F.2d 254 (Ist Cir. 1972)

(Federal Aviation Agency funding for airport extension); Upper

Pecos Ass'n v. Stans, 452 F.2d 1233 (10th Cir. 1971), vacated

and remanded on other grounds, 406 U.S. 944 (1972) (Economic

Development Administration grant for construction of highway );

Ely v. Velde, 451 F.2d 1130 (4th Cir. 1971) (Law Enforcement

Assistance Administration approval of funds for construction of

rehabilitation center).

9a

S.E.C. is not dissimilar to a filing under the Interstate

Land Sales Act.

In sum, then, the consequences of the government's

approval of the statement in terms of ease of obtaining

funds and in terms of the ultimate direct consequences

on the environment of the building of the houses lead

to the conclusion that the district court was correct in

holding that major federal action significantly affecting

the quality of the human environment was present.

Appellants further maintain that the Interstate Land

Sales Act is by its terms inconsistent with NEPA in that

it requires that the statement of record filed by the

land developer become effective 30 days after it is filed

unless the agency acts to suspend it, whereas the NEPA

procedure has a minimum requirement of 75 days. The

argument goes that it is impossible for the Office of

Interstate Land Sales to comply. We regard this as

superficial. Clearly, Congress put the automatic 30 day

provision in the Act out of concern about possible

delay of agency action and in turn the interstate land

sales. There is nothing in the statute, however, which

prohibits the agency from suspending a statement of

record pending the preparstion and filing of an impact

statement. The First Circuit has suggested that HUD

promulgate regulations designed to preserve the status

quo during the period of preparation of the impact

statement. See Silva v. Romney, 473 F.2d 287 (Ist Cir.

1973). Thus, a developer could give advance notice to

HUD of its intent to sell land in interstate commerce,

whereby HUD could commence the preparation of its

10a

impact statement. There is evidence that Congress never

intended for the 30 day provision to be absolute so as

to exclude the applicability of NEPA; evidence the fact

that it allowed the statement of record to be

suspended.

The other argument advanced is that Congress

showed its intention that the NEPA requirement was

not applicable. This again loses sight of the fact that

the NEPA impact statement requirement applies to

virtually all federal agencies and is not limited to those

that are concerned with the environment. One of its

purposes is to require the giving of attention to

environmental problems regardless of whether the

agency has authority to do anything about it.‘

The Supreme Court has held in one case that the ICC

was not required to prepare an impact statement. See

United States v. S.C.R.A.P., 412 U.S. 669 (1973). The

ICC had refused on a temporary basis to suspend a

proposed rate increase. While it was determining

whether the rate increase ought to be suspended

permanently, the district court enjoined it from

approving the rate increase as to recycled goods until it

had filed a NEPA impact statement. By the terms of

the statute, however, the rate suspension question was

placed in the exclusive jurisdiction of the ICC during

-_—_— -——_ ——-

“See Jones v. Lynn, 477 F.2d 885, 891 (ist Cir. 1973);

Monroe County Conservation Council, Inc. v. Volpe, 472 F.2d

693, 697 (2d Cir. 1972); Committee for Nuclear Responsibility,

Inc. v. Seaborg, 463 F.2d 783, 787 (D.C. Cir. 1971); Natural

Resources Defense Council, Inc. v. Morton, 458 F.2d 827, 833

(D.C. Cir. 1972); National Helium Corp. v. Morton, 455 F.2d

650 (10th Cir. 1971).

lla

the seven month consideration period as to whether the

rate should be suspended. The Supreme Court had so

construed the statute in Arrow Transportation Co. v.

Southern Ry. Co., 372 U.S. 658 (1963). The fact that

the Supreme Court decided to review this case and thus

regarded the question whether the ICC might have to

file a NEPA statement shows the broad sweep and

range of the NEPA requirement and demonstrates that

it is not to be lightly disregarded. Certainly the

presence of the 30-day requirement does not create

inconsistency or an impediment to requiring the agency

to prepare an impact statement.

Finally, it is readily apparent that these statutes,

NEPA and Interstate Land Sales, are not incompatible.

Both are designed to give information to the public, but

in each instance it is a different kind of information.

Rather than being inconsistent or incompatible they

complement one another in furnishing the public with a

full range of information.

Did the district court lack jurisdiction to hear and

determine this matter as a federal question case? We

have heretofore recognized that the district court is

authorized to entertain a case such as this one arising

under federal law. See National Helium Corp. v.

Morton, 455 F.2d 650 (10th Cir. 1971). We there held

that the National Helium Corp. could challenge the

termination of government contracts, which termina-

tions were taking place without first observing the

requirements of NEPA. In that instance also it was by

way of the injunction. National Helium recognized that

12a

the underlying substantive federal question was the

NEPA requirement. Also, our decision in Davis v.

Morton, 469 F.2d 593 (10th Cir. 1972) impliedly held

that several kinds of federal violations gave rise to

district court jurisdiction to compel the government

agency to comply with the mandates of NEPA.

Flint Ridge maintains, however, that the Interstate

Land Sales Act has a provision for review by the court

of appeals and that this precludes district court action.

This statute declares.

Any person, aggrieved by an order or determina-

tion of the Secretary issued after a hearing, may

obtain a review of such order or determination in

the court of appeals of the United States ... by

filing in such court, within sixty days after the

entry of such order or determination, a written

petition praying that the order or determination of

the Secretary be modified or be set aside in whole

or in part ... Upon the filing of such petition, the

jurisdiction of the court shall be exclusive ....

1S U.S.C. § 1710(b).

Thus, this act provides for hearings on the request of a

developer when the Secretary suspends the statement

prior to its effective date for the purpose of obtaining

additional information and, too, for review of an order

of the Secretary when he wishes to suspend a statement

of record already in effect. 15 U.S.C. § 1706(b) and

(d). Such hearings are public ones in which a record is

made.

It is plain from a reading of the statute that this

procedure does not apply here because the agency

action for which review is provided has not here taken

place and could not take place because it is entirely out

of context with the present problem.

+ a et ree:

l3a

Nor does Anaconda v. Ruckelshaus, 482 F.2d 1301

(10th Cir. 1973) apply. In Anaconda the effort was to

bypass review by the appropriate court of appeals.

We have examined the other decision relied on,

namely, Environmental Defense Fund v. Environmental

Protection Agency, 485 F.2d 780 (D.C. Cir. 1973).

That one is also plainly inapplicable.

The Supreme Court’s decision in S.C_R.A.P., supra, is

entirely consistent with the position we take because

there the effort was to interfere with the decision of an

administrative tribunal which Congress and the Supreme

Court had recognized was within the exclusive jurisdic-

tion of the tribunal.

The case of Adolphus v. Zebelman, 486 F.2d 1323

(eth Cir. 1973) has recognized that a district court has

jurisdiction to enjoin a developer from making

interstate land sales when its statement of record

violates the Act.

Because, then, of the broad scale application of

NEPA and the manifest intention of Congress that all

federal agencies with responsibilities which effect the

environment must observe its requirements, the jurisdic-

tion of the district court is present.*

IV.

Was the district court correct in its ruling that there

should be a public hearing in connection with the

5We deem it unnecessary to discuss the issue of standing

because it is not seriously contended that the plaintiffs here

lacked standing to bring the suit.

14a

environmental impact statement? We agree with HUD

that the question whether a public hearing is to be held

is within the agency’s discretion. The statute does not

prescribe that the hearing be either public or adversary.

The courts have consistently held to this proposition.®

HUD’s proposed regulations do not require public

hearings in all cases, and the Proposed Rules § 50.20

hold that the question whether a public hearing shall be

held on a draft environmental impact statement is an

administrative decision. This regulation outlines the

factors to be considered: magnitude of the proposal,

degree of interest, complexity of the issue and the

extent to which public involvement has been achieved.

The appellees contend that the Flint Ridge development

meets all the criteria. As noted, however, this is an

agency question. The present action is to compel

compliance with the mandatory requirements of NEPA.

Obviously the holding of a public hearing is not

mandatory.

The judgment of the district court is affirmed in all

respects except the requirement of a public hearing.

That holding is reversed.

* Jicarilla Apache Tribe v. Morton, 471 F.2d 1275 (9th Cir.

1973); National Helium Corp. v. Morton, 455 F.2d 650 (10th

Cir. 1971); Natural Resources Defense Council, Inc. v. TVA, 367

F. Supp. 128 (E.D. Tenn. 1973), aff'd, 502 F.2d 852 (6th Cir.

1974); Ford v. Train, 364 F. Supp. 227 (W.D.Wis. 1973),

Citizens for Clear Air, Inc. v. Corps of Engineers, U.S. Army,

356 F. Supp. 14 (S.D.N.Y. 1973): City of New York v. United

States, 344 F. Supp. 929 (E.D.N.Y. 1972); San Francisco

Tomorrow v. Romney, 342 F. Supp. 77 (N.D. Cal. 1972), rev'd

in part on other grounds, 472 F.2d 1021 (9th Cir. 1973).

ne a ot ee een AEE a

Pee tt

15a

Before The Honorable David T. Lewis, Chief Judge, The

Honorable Robert H. McWilliams and The Honorable

William E. Doyle, Circuit Judges

THE SCENIC RIVERS

ASSOCIATION OF OKLAHOMA

and THE ILLINOIS RIVER

CONSERVATION COUNCIL,

corporations,

Plaintiffs-Appellees,

No. 74-1520

No. 74-1750

vs.

JAMES T. LYNN, Secretary

of Housing and Urban

Development, and GEORGE

K. BERNSTEIN, Administrator

of Interstate Land Sales,

Department of Housing

and Urban Development,

(D.C. No. 74-131-C)

Defendants-Appellants,

and

FLINT RIDGE DEVELOPMENT

COMPANY,

Intervening Defendant-

Appellant.

ee ee ee ee ee ee

This cause came on to be heard on the record on

appeal from the United States District Court for the

Eastern District of Oklahoma, and was argued by

counsel.

Upon consideration whereof, it is ordered that the

judgment of that court is affirmed in all respects except

16a Ib

APPENDIX B

the requirement of a public hearing. The district court’s

ruling that there should be a public hearing is reversed.

The cause is remanded to the United States District

Court for the Eastern District of Oklahoma for further

proceedings consistent with the opinion of this Court.

oot ern

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF OKLAHOMA

Oe 2 ONE eR ens oad

THE SCENIC RIVERS ASSOCIATION

/s/ Howard K. Phillips OF OKLAHOMA.

HOWARD K. PHILLIPS, Clerk and THE ILLINOIS RIVER CONSERVATION

| COUNCIL, corporations,

Plaintiffs,

VS

JAMES T. LYNN, Secretary of Housing

and Urban Development and No. 74-131

GEORGE K. BERNSTEIN, Administrator

of Interstate Land Sales, Department

of Housing and Urban Development, Filed:

Defendants, September 4,

and 1974

FLINT RIDGE DEVELOPMENT CO.., a joint

venture,

Intervening Defendant,

and

THE UNITED STATES OF AMERICA, ex rel

The Environmental Protection Agency,

Additional Defendant.

ee eee eee eee ee ee”

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Statement of Case

The Scenic Rivers Association of Oklahoma, an

Oklahoma non-profit corporation, and The Illinois River

Conservation Council, Inc., a non-profit Oklahoma

~ -

2b

corporation, filed this action in this court for the

following reasons:

1. Plaintiffs seek a declaratory judgment decreeing

that the Department of Housing and Urban Develop-

ment, the agency in charge of administering the

Interstate Land Sales Act, 15 U.S.C. §1701 et seq.,

must, pnor to approval and registration of a Statement

of Record and Property Report under the Interstate

Land Sales Act, conduct an environmental impact study

in compliance with the National Environmental Policy

Act, 42 U.S.C. §4331 et seq., and the guidelines of the

Council on Environmental Quality and the Depart-

ment’s own guidelines promulgated under the National

Environmental Policy Act requirements.

-. Plaintiffs further seek injunctive relief requiring

H.U.D. to withdraw approval of Interstate Land Sales

filings pending the Environmental Review Process as

same pertains to the Property Report and Statement of

Record filed by Flint Ridge Development Co. effective

May 2, 1974.

Flint Ridge Development Co. joined these pro-

ceedings as an intervening defendant on the morning

this case was brought to trial, first requesting to appear

as Amicus Curiae, which request was denied. Then Flint

Ridge Development Co. was permitted to intervene as a

party defendant with the understanding that it could

withdraw at the end of the trial if it chose to do so.

The Court finds now that Flint Ridge Development

Company may withdraw if it chooses to do so, but to

the knowledge of the Court it has not filed any written

request to withdraw from these proceedings so the

Court finds that Flint Ridge may or may not remain in

the case as it sees fit.

3b

This action is primarily and in all things an action

against the defendants James T. Lynn, Secretary of

Housing and Urban Development, and George K.

Bernstein, Administrator of Interstate Land Sales,

Department of Housing and Urban Development, and

the United States of America, ex rel the Environmental

Protection Agency, for the sole purpose of requiring

these governmental agencies to comply with the Acts of

Congress relating to environmental protection. This

action has two principal issues for the Court to

determine:

1. Whether H.U.D.’s action in approving the Property

Report and Statement of Record for Flint Ridge

Development Co., under the Interstate Land Sales Act,

constituted major federal action; and

2. Whether the development itself, together with any

peripheral developments associated therewith, would

significantly affect the quality of the human environ-

ment, of which the Illinois River, its basin and

tributaries, is a part.

The Court heard many learned expert witnesses who

testified generally and specifically as to the actual

potential result of the Flint Ridge Development Co.'s

project in the counties of Delaware and Adair,

Oklahoma. The Court heard testimony of the Flint

Ridge Development Co., the federal defendant, H.U.D.

and the Oklahoma State Departments of Health and

Water Resources.

The Court, having carefully examined the files, the

briefs, pleadings, testimony, exhibits and the issues

involved in this case, makes the following Findings of

Fact and Conclusions of Law:

4b

Findings of Fact

1. The Illinois River and its basin which is situated

in eastern Oklahoma beginning at the western boundary

of Arkansas and continuing westerly to Lake Tenkiller

near Muskogee, Oklahoma, is within the boundaries of

the Eastern District of Oklahoma.

2. The plaintiffs are both residents of the State of

Oklahoma and are actively engaged in the preservation

of the Illinois River basin and other similar areas in

Oklahoma

3. “Flint Ridge” is a joint venture organized and

promoted by Flint Ridge Development Company. The

Court finds that Flint Ridge Development Co. has

located its joint venture project on the Illinois River

basin because of the beauty the river affords for such a

development. The attractiveness of the Illinois River

basin was and is the motivating factor in Flint Ridge

Development Co. seeking out this specific location for

promotional purposes.

4. Flint Ridge Development Co. has filed its

Statement of Record and Property Report and has

divided the property for the purpose of selling to

prospective home builders throughout the United States

and has done so by use of the United States mails.

5S. Flint Ridge Development Co. proposes to sell

3,000 lots ranging in price from $6,500 to $25,000 per

vacant lot. If each lot sold for $6,500, the gross

revenue to the development would be $19,500,000:

that if all 3,000 lots were sold at $25,000 each, the

gross sales would be $75,000,000; that if the gross

amounts were added together and divided by two, Flint

Ridge Development Co. would have a gross income of

$47,250,000. These figures reflect the magnitude of the

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development and show that H.U.D.’s action in ap-

proving the Property Report and Statement of Record

under the Interstate Land Sales Act constituted major

federal action.

6. Flint Ridge Development Co. is a joint venture

composed of Frates Development Company, Tulsa, and

Flint Ridge Development Co., Inc. of Tulsa, Oklahoma.

Frates Development Company is a subsidiary of Frates

Properties, Inc., of Tulsa, Oklahoma, and Flint Ridge

Development Co., is a wholly owned subsidiary of

Context Industries, Irc., of Miami, Florida. This joint

venture owns the development known as “Flint Ridge”

and does business in the Eastern District of Oklahoma.

7. The Department of Housing and Urban Develop-

ment is a federal instrumentality which, through its

sub-agency, the Office of Interstate Land Sales, has

statutory and administrative responsibilities for enforce-

ment and administration of the Interstate Land Sales

Act.

8. The plaintiff organizations are comprised of

individuals and affiliated conservation outdoor organi-

zations. Plaintiffs have filed with the Clerk of this

Court a list of several thousands of signatures of

individuals living in and around the eastern part of

Oklahoma stating and claiming frequent and consistent

use of the Illinois River for purposes of hiking, camping

scouting, canoeing, fishing, swimming and_ general

outdoor recreational purposes.

9. The United States Constitution provides that

Congress shall regulate Interstate Commerce and

Congress saw fit to create the statutory authority for

H.U.D. to administer the Interstate Land Sales Act and

also to establish the Environmental Protection Agency

for the sole purpose of protecting environmental areas

for the use of the citizens of this country.

6b

10. The Illinois River is a state-designated “scenic

river’ and the river as a matter of fact possesses

substantial esthetic qualities, which qualities in fact

caused Flint Ridge Development Co. to undertake its

development in this area.

11. The evidence is clear that the present and

proposed development by Flint Ridge Development Co.

comprises approximately 7,000 acres, with an ultimate

proposal of acquiring an additional 14,000 acres.

12. The Court finds that each lot sold and home

built will contain a septic tank for all human refuse.

Upon completion of the project 3,000 septic tanks will

dispose refuse into the Illinois River. The soil in this

particular area is made up primarily of limestone gravel,

chert rock or gravel and clay, and that the soil is very

porous and the seepage from the 3,000 septic tanks will

soon find its way into the clear waters of the Illinois

River and cause pollution damage thereof and destroy

forever the environmental quality of the Illinois River

Basin.

13. It is important to remember that plaintiffs made

demand upon H.U.D. to prepare an environmental

impact statement prior to approval of the Statement of

Record and Property Report. This H.U.D. refused to

do. The Court finds that H.U.D.’s refusal to prepare the

environmental impact statement and to perform its

duty under the guidelines of the National Environ-

mental Policy Act, the Council of Environmental

Quality or its regulations was serious dereliction of its

duty imposed upon it by Congress.

14. Flint Ridge Development, together with its

peripheral developments has actual or potential sub-

stantial effect upon the depth and course of the Illinois

River, its tributaries and drainage area, to the plant life,

Tb

the wildlife habitats, the fish and wildlife, soils, air,

esthetics of the area and upon the socio-economic

conditions in the area including such matters as health

and hospital care and facilities, roads and highways,

schools, police and fire protection.

15. Flint Ridge Development Co. is an organization

which directly or indirectly sells or leases, or offers to

sell or lease, or advertise for sale or lease, lots in a

subdivision, containing more than 50 lots, pursuant to a

common sales scheme and in Interstate Commerce.

16. Under the Interstate Land Sales Act the Office

of Interstate Land Sales, a sub-agency of the Depart-

ment of Housing and Urban Development, has the

authority and duty to issue rules and regulations

providing for an exemption from the provisions of the

Act, the authority to review filings under the Act, and

to note deficiencies therein (thereby suspending the

effectiveness of the filing until such time additional

information as the Secretary shall require is provided

and the deficiencies corrected), the authority to

conduct hearings and make findings and conclusions

with respect thereto in connection with filings under

the Act, the authority to suspend the effectiveness of

the Statement of Record and Property Report under

amendments filed subsequent to the effective date of

the Act of the filings, the authority to suspend the

Statement of Record upon a finding of any untrue

statement of a material fact or omission to state any

material fact required to be stated or necessary to make

the statements not misleading, and the authority to

conduct investigations and initiate criminal prosecutions

for violation of the provisions of the Interstate Land

Sales Act.

8b

That upon the initial filing of the Statement of

Record and Property Report by Flint Ridge Develop-

ment Co., the Office of Interstate Land Sales did in

fact find deficiencies and Cid in fact suspend the

effectiveness of the Statement of Record in excess of

30 days from the filing date and according to the

testimony of an official representative of the Office of

Interstate Land Sales that Flint Ridge Development Co.

was prohibited from selling lots during the period of

this suspension.

17. That whenever a Federal agency makes a

decision which permits action by other parties, public

or private, which will affect the quality of the human

environment, such decision constitutes major federal

action, which is what occurred in this case. Scientists’

Institute for Public Information, Inc. v. A.E.C., 481

F.2d 1079 (C.A. D.C. Cir., 1973).

18. That there is an overriding public interest in

preservation of the character of the area described

generally as the Illinois River Basin and that the public

interest in preserving the character of that ecosystem is

one that the plaintiffs may seek to protect by obtaining

equitable relief. Wyoming Outdoor Coordinating

Council v. Butz, 484 F.2d 1244 (C.A. 10, 1973).

19. That the Department of Housing and Urban

Development by its sub-agency, the Office of Interstate

Land Sales, has not brought its policies and procedures

into compliance with requirements of the National

Environmental Policy Act, Title 42 U.S.C. Sec. 4333, in

that they have no mules, regulations or guidelines

promulgated so as to enable them to comply with the

National Environmental Policy Act’s purposes and

intendments.

9b

20. That the defendant, H.U.D., and the Office of

Interstate Land Sales, in administering and enforcing

the Interstate Land Sales Act and making decisions

associated with such administration and enforcement,

have not, in whole or in part, complied with any of the

mandatory requirements contained in 42 U.S.C. Sec.

4332.

Conclusions of Law

1. The Court has jurisdiction and venue (28 U.S.C.

§1391(e)) over the instant case and the plaintiffs have

standing to bring this action.

2. The National Environmental Policy Act applies to

all Federal agencies and their subdivisions and requires

that all Federal agencies “to the fullest extent possible”

must strictly comply with the requirements of the

National Environmental Policy Act. The Court further

finds as a matter of law that every Federal agency, at

the lowest possible level, is required to consider the

effects of each decision made by that agency upon the

environment and to use all practicable means to avoid

environmental degradation. Calvert Cliffs’ Coordinating

Committee v. A.E.C., 449 F.2d 1109 (C.A.D.C., 1971)

cert. denied, 494 U.S. 942 (1972); Davis v. Morton,

469 F.2d 593 (C.A. 10, 1972): Ely v. Velde, 451 F.2d

1130 (C.A. 4, 1971); See, National Helium Corporation

v. Morton, 455 F.2d 650 (C.A. 10, 1971).

3. There is nothing contained within the Interstate

Land Sales Act which specifically excludes N.E.P.A.

application. See, Davis v. Morton, supra.

4. H.U.D. contends there is no major federal action

involved. The concept of major federal action has

10b

evolved from the concept of Federal planning, participa-

tion in, funding or benefit from a project, See Natural

Resources, Inc. v. Grant, 341 F. Supp. 356 (E.D.N.C.,

1972), to include those federal actions taken as a result

of an agency decision which permits an action by other

parties which will affect the quality of the human

environment. Scientists’ Institute for Public In-

formation, Inc. v. A.E.C., 481 F.2d 1079 (C.A.D.C. Cir.

1973). Nowhere is the evolution of the concept of

major federal action more complete than in the Tenth

Circuit. Wyoming Outdoor Coordinating Council v.

Butz, 484 F.2d 1244 (C.A. 10, 1973); Davis v. Morton,

supra; National Helium Corporation v. Morton, supra.

These cases hold and reflect that N.E.P.A. is intended

to interrupt business-as-usual and to affect the decision-

making process at the lowest agency level. N.E.P.A.,

with its unequivocal command to implement its policy,

“to the fullest extent possible” does not render the

procedural requirements discretionary. Calvert Cliffs’

Coordinating Committee v. A.E.C., supra; Ely v. Velde,

451 F.2d 1130 (C.A. 4, 1971).

The decision of the Interstate Land Sales Office to

either approve or suspend or to ascertain that

deficiencies exist, or have been corrected, in the

Statement of Record or Property Report, is major

federal action. The case of Davis v. Morton, supra,

together with the cases cited therein, hold that major

federal action exists when the only action was approval

by the Government of a project, licensing, permitting a

project or enterprise or abandoning a railroad line. In

the Davis case the sole federal action involved was an

approval, under a delegation of powers, or a lease of

Indian lands by a local Department of Interior official.

lib

5. Where a federal license or permit is involved, or

where Congress possesses and has utilized its plenary

power of regulation under the Interstate Commerce

Clause, or other Constitutional authority, federal

approval constitutes major federal action. The approval

of a filing under the Interstate Land Sales Act is in the

nature of a federal license or permit, for without the

approval it is unlawful to engage in sales and Congress

has exercised its plenary power under the Interstate

Commerce Clause by enacting the Interstate Land Sales

Act.

6. The National Environmental Policy Act compels

Federal agencies to review and reappraise existing

policies and procedures in light of developing law and

in light of developing agency awareness of environ-

mental factors, 42 U.S.C. §4332. “The Sweep of

N.E.P.A. is extraordinarily broad, compelling considera-

tion of any and all types of environmental impact on

federal action,” Calvert Cliffs’ Coordinating Committee

v. A.E.C., supra.

7. Plaintiffs must establish an overriding public

interest in the preservation of the character of the area

under concern and that there is a threat of environ-

mental injury without compliance of N.E.P.A.’s pro-

cedures. Wyoming Outdoor Coordinating Council v.

Butz, supra; Calvert Cliffs’ Coordinating Committee v.

A.E.C., supra. The Court concludes as a matter of law

that the plaintiffs have met this burden.

8. One of the burdens of plaintiffs is to demonstrate

either actual or potential or threatened resulis that will

significantly affect the quality of the human environ-

ment. Wyoming Outdoor Coordinating Council v. Butz,

supra. The Court further concludes that it is one of the

purposes of the National Environmental Policy Act to

12b

13b

determine with more exactitude what the actual or

potential environmental impacts would be and to take an ine re pte tempat A

steps to minimize or prevent both long-range and

short-range impacts. The Court finds as a matter of law THE SCENIC RIVERS ASSOCIATION )

that the plaintiffs have met this burden.

’ ' OF OKLAHOMA, )

9. As a general rule these impacts include, but are d THE ILLINOIS RIVER )

not limited to, effects upon the depth or course of poalchrandhe ATION COUNCIL ti )

stream, plant life, wildlife habitats, fish and wildlife, Plaintiff aa aria )

soil, the air, the quality of water, social and economic ™ — )

im pacts, and effects upon esthetics and recreational JAMES T. LYNN, Secretary of Housing )

opportunities. Natural Resources, Inc. v. Grant, supra. d Urban Devel t and )

The Court notes from its findings of fact and por theca ttt nim van aa

: a ps GEORGE K. BERNSTEIN, Administrator )

conclusions of law that the plaintiffs have demonstrated of tatuetate tend Gites Gusset

actual and potential environmental effects in all of of Wendien ont Qian tates meee ) No. 74-131-C

these areas, and therefore, that the decision to approve me esis ) ;

the Statement of Record and Property Report by jn ) Filed:

H.U.D. of Flint Ridge Development Co. is a major FLINT RIDGE DEVELOPMENT CO.. a joint ) Sept. 4,

federal action which “significantly affects the quality of | eenenee ome ) 1974

the human environment.” ‘Waterveniia Defendant )

10. The Court further concludes, as a matter of law, _ . )

that any attorney fees and costs to be assessed against THE UNITED STATES OF AMERICA. ex rel )

the defendant, United States of America, or the Flint ,

‘ The Environmental Protection Agency, )

Ridge Development Co. shall be heard and considered Additional Defendant )

upon proper application after the action of this Court ;

has become final or after a final Order of any appellate

court.

An appropriate Order and Judgment will be entered ORDER, USGHEN! ANS SELEES

accordingly herein. — :

- Based upon the Findings of Fact and Conclusions of

974.

Dated Gils SE: Cay of September, 1778 Law this day filed, IT IS THE ORDER, JUDGMENT

AND DECREE OF THIS COURT that:

1. The Department of Housing and Urban Develop-

iene JUDGE ment and the Office of Interstate Land Sales be, and

they are hereby enjoined and restrained from approving

the Interstate Land Sales filing of Flint Ridge

14b

Development Co. until such time as the environmental

impact study has been prepared and a public hearing

held thereon, and further the Department of Housing

and Urban Development and the Office of Interstate

Land Sales of that Department are hereby ordered to

immediately withdraw the approval of the Flint Ridge

Development Co. filing which was effective May 2,

1974, and not to reinstate said approval until the

further Order of this Court.

2. Plaintiff will post bond in the amount of $100.00.

3. The Department of Housing and Urban Develop-

ment of the United States Government shall conduct a

full, thorough and complete environmental impact

study of the effects of the Flint Ridge development on

the quality of the human environment and that they

specifically and in detail address themselves to the

following:

(a) The environmental impact of the proposed

actions;

(b) Any adverse environmental effects which cannot

be avoided should the proposal be implemented:

(c) Alternatives to the proposed action, including no

action:

(d) The relationship between the local short-term

uses of man’s environment and the maintenance

and the enhancement of long-term productivity;

(e) Any irreversible and irretrievable commitments

of resources which would be involved in the

proposed action should it be implemented.

The Department of Housing and Urban Development

is further ordered to consult with, and obtain the

comments of, any and all other federal agencies which

have junsdiction by law or special expertise with

respect to any environmental impact involved.

ee

15b

4. Upon completion of the impact study, a copy

thereof shall be filed with this Court.

5. The environmental impact statement shall be

made available to the President of the United States,

the Council on Environmental Quality and to the public

as provided by Title 5 U.S.C. §552 and Title 42 U.S.C.

§4332(C).

6. The injunction and restraining order set out in

paragraph | hereof shall be administered by James T.

Lynn, Secretary of Housing and Urban Development

and his successor and by George K. Bernstein,

Administrator of Interstate Land Sales, Department of

Housing and Urban Development and his successor.

That a certified copy of this Order shall be served by

registered mail upon James T. Lynn and George K.

Bernstein at HUD Building, 451 Seventh Street S.W.,

Washington, D.C. 20410.

7. It is specifically Ordered that the property report

and statement of record filed by Flint Ridge Develop-

ment Company, a joint venture, be, and the same are

hereby suspended, vacated and held for naught, and no

further public sales shall be conducted thereunder

unless and until further Order of the Court.

A certified copy of this Order shall be delivered by

registered mail to Flint Ridge Development Company

c/o F. Paul Thieman, Jr., Attorney, 5800 East Skelly

Drive, Tulsa, Oklahoma 74135.

Dated this 4th day of September, 1974.

/s/ Luther Bohanon

UNITED STATES DISTRICT JUDGE

Ic

APPENDIX C

STATUTES INVOLVED

Interstate Land Sales Full Disclosure Act,

United States Code, Title 15

§ 1706.

(a) Except as hereinafter provided, the effective date

of a statement of record, or any amendment thereto,

shall be the thirtieth day after the filing thereof or such

earher date as the Secretary may determine, having due

regard to the public interest and the protection of

purchasers. If any amendment to any such statement is

filed prior to the effective date of the statement, the

statement shall be deemed to have been filed when such

amendment was filed, except that such an amendment

filed with the consent of the Secretary, or filed

pursuant to an order of the Secretary, shall be treated

aS being filed as of the date of the filing of the

Statement of record) When a_ developer records

additional lands to be offered for disposition, he may

consolidate the subsequent statement of record with

any earher recording offering subdivided land for

disposition under the same promotional plan. At the

time of consolidation the developer shall include in the

consolidated statement of record any material changes

in the information contained in the earlier statement.

(hb) If it appears to the Secretary that a statement of

record, or any amendment thereto, is on its face

incomplete or imaccurate in any material respect, the

Secretary shall so advise the developer within a

reasonable time after the filing of the statement or the

2c

amendment, but prior to the date the statement or

amendment would otherwise be effective. Such notifica-

tion shall serve to suspend the effective date of the

statement or the amendment until thirty days after the

developer files such additional information as the

Secretary shall require. Any developer, upon receipt of

such notice, may request a hearing, and such hearing

shall be held within twenty days of receipt of such

request by the Secretary.

* * *

(d) If it appears to the Secretary at any time that a

statement of record, which is in effect, includes any

untrue statement of a material fact or omits to state

any material fact required to be stated therein or

necessary to make the statements therein not mis-

leading, the Secretary may, after notice, and after

opportunity for hearing (at a time fixed by the

Secretary) within fifteen days after such notice, issue an

order suspending the statement of record. When such

statement has been amended in accordance with such

order, the Secretary shall so declare and thereupon the

order shall cease to be effective.

81716.

The fact that a statement of record with respect to a

subdivision has been filed or is in effect shall not be

deemed a finding by the Secretary that the statement

of record is true and accurate on its face, or be held to

mean the secretary has in any way passed upon the

merits of, or given approval to, such subdivision. It shall

be unlawful to make, or cause to be made, to any

prospective purchaser any representation contrary to

the foregoing.

3c

National Environmental Policy Act of 1969,

United States Code, Title 42

§ 4332.

The Congress authorizes and directs that, to the

fullest extent possible: * * *(2) all agencies of the

Federal Government shall—

(C) 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 imple-

mented,

(iii) alternatives to the proposed action,

(iv) the relationship between local short-term uses

of man’s environment and the maintenance and

enhancement of long-term productivity, and

(v) any irreversible and irretrievable commitments

of resources which would be involved in_ the

proposed action should it be implemented.

Prior to making any detailed statement, the responsible

Federal official shall consult with and obtain the

comments of any Federal agency which has jurisdiction

by law or special expertise with respect to any

environmental impact involved. Copies of such state-

ment and the comments and views of the appropriate

Federal, State, and local agencies, which are authorized

4c

to develop and enforce environmental standards, shall

be made available to the President, the Council on

Environmental Quality and to the public as provided by

section 552 of Title 5, and shall accompany the

proposal through the existing agency review processes;

§ 4333.

All agencies of the Federal Government shall review

their present statutory authority, administrative regula-

tions, and current policies and procedures for the

purpose of determining whether there are any deficien-

cies or inconsistencies therein which prohibit full

compliance with the purposes and provisions of this

chapter and shall propose to the President not later

than July 1, 1971, such measures as may be necessary

to bring their authority and policies into conformity

with the intent, purposes, and procedures set forth in

this chapter.

§ 4334.

Nothing in section 4332 or 4333 of this title shall in

any way affect the specific statutory obligations of any

Federal agency (1) to comply with criteria or standards

of environmental quality, (2) to coordinate or consult

with any other Federal or State agency, or (3) to act,

or refrain from acting contingent upon the recom-

mendations or certification of any other Federal or

State agency.

§ 4335.

The policies and goals set forth in this chapter are

supplementary to those set forth in existing authoriza-

tions of Federal agencies.