Petitioners Brief — Department of Transportation v. Public Citizen

FEB 3 204

No. 03-358

In the Supreme Court of the Gnited States

DEPARTMENT OF TRANSPORTATION, ET AL.,

PETITIONERS

PUBLIC CITIZEN, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE PETITIONERS

JEFFREY A. ROSEN

General Counsel

PAUL M. GEIER

Assistant General Counsel

for Litigation

PETER J. PLOCKI

Senior Trial Attorney

BRIGHAM A. MCCOWAN

Chief Counsel

MICHAELJ. FALK

Acting Assistant Chief

Counsel

Federal Motor Carrier Safety

Administration

Department of Transportation

Washington, D.C. 20590

JOHN K. VERONEAU

General Counsel

Office of the United States

Trade Representative

Executive Office of the

President

Washington, D.C. 20508

THEODORE B. OLSON

Solicitor General

Counsel of Record

THOMAS L. SANSONETTI

Assistant Attorney General

EDWIN S. KNEEDLER

THOMAS G. HUNGAR

Deputy Solicitors General

JEFFREY BOSSERT CLARK

Deputy Assistant Attorney

General

AUSTIN C. SCHLICK

Assistant to the Solicitor

General

JOHN L. SMELTZER

DAVID C. SHILTON

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

BEST AVAILABLE COPY

QUESTION PRESENTED

Whether a Presidential foreign affairs and foreign trade

action that is otherwise exempt from environmental-review

requirements under the National Environmental Policy Act

of 1969, 42 U.S.C. 4832(2)(C), and the Clean Air Act, 42

U.S.C. 7506(c)(1), became subject to those requirements as a

result of a rulemaking action concerning motor carrier safety

by the federal agency charged with that responsibility.

(I)

II

PARTIES TO THE PROCEEDING

Petitioners are: United States Department of Trans-

portation; Federal Motor Carrier Safety Administration

(FMCSA); Annette M. Sandberg, as Administrator, FMCSA;

and David Martin, as Western Field Administrator,

FMCSA.

Respondents who were petitioners in the court of appeals

below are: Public Citizen; Brotherhood of Teamsters, Auto

and Truck Drivers, Local 70; California Labor Federation;

California Trucking Association; Environmental Law Foun-

dation; and International Brotherhood of Teamsters.

Respondents who were petitioners-intervenors in the

court of appeals below are: Natural Resources Defense

Council and Planning and Conservation League.

TABLE OF CONTENTS

Opinion below

Jurisdiction

Statutory and regulatory provisions involved

Statement

Summary of argument

Argument

I. The court of appeals misapplied the National

Environmental Policy Act

A. FMCSA was not required to prepare an

EIS addressing the President’s action to

lift the trade moratorium

1. Presidential actions are exempt from

NEPA’s environmental-review require-

ments

2. Respondents have challenged only

FMCSA’s determination not to study the

environmental effects of the President’s

action to lift the moratorium, not

FMCSA’s review of the effects of its own

regulations

B. The President’s lifting of the trade

moratorium is not an “effect” of FMCSA’s

safety rule-makings under NEPA .............00-0+

1. FMCSA’s safety rulemakings did not

“cause” the alleged environmental effects

of the President’s action to allow cross-

border operations -

2. Congress’s enactment of Section 350 did

not require FMCSA to study the effects

of lifting the moratorium

(III)

18

21

IV

Table of Contents—Continued:

3. FMCSA was not required to undertake

a “cumulative impact” analysis addressing

the President’s border-opening decision .....

II. FMCSA’s safety rulemakings are not subject to

the conformity-review requirements of the Clean

Air Act

A. Presidential action is exempt from the

conformity-review requirement

B. Under EPA’s implementing regulations, the

air-quality effects of lifting the trade

moratorium are not emissions associated with

FMCSA’s safety rulemakings

GTI, ccoscscerrerienmmmemareataisiiaseeenaineeieitiaraiitianmaiiiiais

Appendix .

TABLE OF AUTHORITIES

Cases:

Aberdeen & Rockfish R.R. v. SCRAP, 422 US.

289 (1975) 7 -

Aircraft Owners & Pilots Ass’n v. Hinson,

102 F.3d 1421 (7th Cir. 1996)

American Airlines, Inc. v. Department of Transp.,

202 F.3d 788 (5th Cir.), cert. denied, 530 U.S.

1224 and 1284 (2000) sats

Anderson v. Evans, 350 F.3d 815 (9th Cir. 2003) ............

Andrus v. Sierra Club, 442 U.S. 347 (1979)

Baltimore Gas & Elec. Co. v. Natural Res. Def.

Council, Inc., 462 U.S. 87 (1983) ......

California Bankers Ass’n v. Schultz, 416 U.S. 21

CODED ccnscszszcsnnsesnznzsensnsnsenrercesensnscsmnsvsssnscsssnsssensneneesascassnssnstenen

Central Bank of Denver, N.A. v. First Interstate

Bank of Denver, N.A., 511 U.S. 164 (1994) ........cccccceeeeees

Chicago & S. Air Lines, Inc. v. Waterman S.S. Co.,

333 U.S. 103 (1948) = umnemnennies

» & &

a

Cases—Continued:

Page

Citizens Against Rails-to-Trails v. Surface Transp.

Bd., 267 F.3d 1144 (D.C. Cir. 1994) 39

39

, 39-40

City of New York v. Minetta, 262 F.3d 169 (2d Cir.

2001)

Crosby v. National Foreign Trade Council,

503 U.S. 363 (2000) 22, 26

Department of the Navy v. Egan, 484 U.S. 518

(1988) 21

Eberle v. City of Anaheim, 901 F.2d 814 (9th Cir.

1990) 29

Environmental Def. Fund, Inc. v. EPA, 82 F.3d 451,

amended, 92 F.3d 1209 (D.C. Cir. 1996)

5;

_ Flint Ridge Dev. Co. v. Scenic Rivers Ass'n,

426 U.S. 776 (1976)

Franklin v. Massachusetts, 505 U.S. 788 (1992) .. 25, 26,

Goos v. ICC, 911 F.2d 1283 (8th Cir. 1990)

Heckler v. Mathews, 465 U.S. 728 (1984)

Indiana Forest Alliance, Inc. v. United States

Forest Serv., 825 F.3d 851 (7th Cir. 2003)

INS v. Ventura, 537 U.S. 12 (2002) ..........c-ccecesnesseneenenenees

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

Ludecke v. Watkins, 335 U.S. 160 (1948)

Lujan v. National Wildlife Fed’n, 497 U.S. 871

FEBRE RSES

(1990) 26

Marsh v. Oregon Natural Res. Council,

490 U.S. 360 (1989) 23, 25, 26, 37

Metropolitan Edison Co. v. People Against Nuclear

Energy, 460 U.S. 766 (1983) 34, 35

Milo Community Hosp. v. Weinberger, 525 F.2d 144

(1st Cir. 1975) 39

National Wildlife Fed’n v. Appalachian Reg’l

Comm'n, 677 F.2d 883 (D.C. Cir. 1981) 37

Robertson v. Methow Valley Citizens Council,

490 U.S. 332 (1989) 36

VI

Cases—Continued: Page

Sac & Fox Nation v. Norton, 240 F.3d 1250

(10th Cir. 2001), cert. denied, 534 U.S. 1078

(2002) - 39

Sierra Club v. Babbitt, 65 F.3d 1502 (9th Cir.

1995) 39

Town of Cave Creek v. FAA, 325 F.3d 320

(D.C. Cir. 2003) 24

United States v. Curtiss-Wright Export Corp.,

299 U.S. 304 (1936) 21, 22

United States v. Franco-Lopez, 312 F.3d 984

(9th Cir. 2002) 29

United States v. 12 100 Ft. Reels of Super 8 MM. Film,

413 U.S. 123 (1973) 21

Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579

(1952) 22

Vermont Yankee Nuclear Power Corp. v. Natural

Res. Def. Council, Inc., 435 U.S. 519 (1978) 29

Constitution, agreement, statutes and regulations:

U.S. Const.:

Art. I, § 8, Cl. 3 (Foreign Commerce Clause) ..................- 21

Art. II:

§2,Cl.1 21

§2,Cl.2 21

= 21

North American Free Trade Agreement, Dec. 17,

1992, 32 I.L.M. 605 (1993) 2

Annex 1, 32 1.L.M. at 742 . 6

Administrative Procedure Act, 5 U.S.C. 551 et seg.:

5 U.S.C. 551(1) 25

5 U.S.C. 701(b)(1) 25

5 U.S.C. 701-706 15, 26, la

5 U.S.C. 706(2)(A) 24

Statutes and regulations—Continued:

Vil

f

Clean Air Act, 42 U.S.C. 7401 et segq.:

42 U.S.C. 7418(a)

42 U.S.C. 7418(b)

42 U.S.C. 7506(c)

42 U.S.C. 7506(¢)(1)

42 U.S.C. 7506(c)(1)(B)

42 U.S.C. 7506(c)(2)

42 U.S.C. 7506(c)(4)

42 U.S.C. 7604(e)

42 U.S.C. 7521

Consolidated Appropriations Resolution, 2003, Pub.

2, 13, 14, 20, 42, 46,

oS ERP FSG

L. No. 108-7, Div. I, Tit. ITI, § 348, 117 Stat. 419 ............. 10

Consolidated Appropriations Act, 2004, Pub. L. No.

108-99, Div. F, Tit. I, § 130 ‘)

Department of Transportation and Related Agencies

Appropriations Act, 2002, Pub. L. No. 107-87,

115 Stat. 833: 9-10

§ 350, 115 Stat. 864 passim

§ 350(a), 115 Stat. 864 4

§ 350(a)(10)(B), 115 Stat. 866 15-16

Interstate Commerce Commission Termination Act of

1995, Pub. L. No. 104-88, Tit. I, 109 Stat. 804

(49 U.S.C. 13901 et seq.) 7

49 U.S.C. 13301 7

49 U.S.C. 13501 7

49 U.S.C. 13902 (§ 103), 109 Stat. 880 5, 9a

49 U.S.C. 13902(a) 32, 9a

49 U.S.C. 13902(a)(1) 8, 22, 35, 37, 9a

49 U.S.C. 13902(c) 3, 22

49 U.S.C. 13902(c)(1) 5, 10a

49 U.S.C. 13902(c)(3) 5, 22, 36, lla

49 U.S.C. 13902(c)(4) 5, lla

49 U.S.C. 13902(c)(5) 39-40, lla

49 U.S.C. 13902(c)(8) 5

49 U.S.C. 13902 note 4

Vill

Statutes and regulations—Continued: Page

Motor Carrier Safety Improvement Act of 1999,

Pub. L. No. 106-159, 113 Stat. 1748 ..... 7

49 U.S.C. 31136 7

49 U.S.C. 31139 7

49 U.S.C. 31142 7

National Environmental Policy Act of 1969,

42 U.S.C. 4321 et seq.:

42 U.S.C. 4332 34, 38, 2a

42 U.S.C. 4332(2) . — 25, 42

42 U.S.C. 4332(2)(C) 2, 10, 19, 25, 42, 2a

42 U.S.C. 4332(2)(C)ii) . 12, 30-31

North American Free Trade Agreement Imple-

mentation Act, Pub. L. No. 103-182, 107 Stat.

tt ee ee 6

19 U.S.C. 3311(D) ..........c000000 6

Ue GED cece 38

J) 0) 7

49 U.S.C. 113(f . 7

49 U.S.C. 301 et seg. (1976) 4

49 U.S.C. 10922(1)(1) (1982) 4

ee 4

40 C.F.R.:

GD ennui 43

Pt. 98 ... 14, 42

Section 93.150 ............. . 42,7a

Section 93.152 .........s:+0 . 21,44, 45, 46, 8a

ae GRD ccnewnsnenee 43

Section 93.153(b) ..........:0+: 14, 45

Section 93.153(b)(1) .... , senemeusememnananenesnesenas 17,18

Section 9B.153(eM2) ii) .........cccoccocssssessesscsseseesessees 14

Pt. 1500:

ee 38

Section 1500.1(¢) .......00 sreneeneneneDAUEnOUNSUONOSUERIDERSNOR 37, 38

ee 10

et GEGO ene 10

IX

Regulations—Continued: Page

Section 1501.4(e) 10

Section 1500.3 10

Section 1508.7 17, 20, 40, 41, 3a

Section 1508.13 10

Section 1508.8(a) 31

Section 1508.8(b) 17, 32

Section 1508.9(a) 10, 17

Section 1508.12 19, 25, 4a

Section 1506.18 ............c.ccecsscsssssssersessenseecensensneensensevencensanes 10

| Section 1508.25(c)(3) 40

Section 1508.27(b)(7) 40

Miscellaneous:

Application by Certain Mexican Motor Carriers

to Operate Beyond U.S. Municipalities and

Commercial Zones on the U.S.-Mexico Border,

66 Fed. Reg. (2001):

p. 22,371 8

Me Fp} , Se 6

p. 22,372 8

115 Cong. Rec. 39,703 (1969) 38

Determination Under the Bus Regulatory Reform

Act of 1982, 47 Fed. Reg. 54,053 (1982) 4

Determining Conformity of General Federal Actions

to State or Federal Implementation Plans, 58 Fed.

Reg. (1993):

p. 13,838 44

p. 63,214 46

p. 63,220 46

Freight Operations by Mexican Motor Carriers:

Implementation of North American Free Trade

Agreement, 60 Fed. Reg. 63,981 (1995) 8

H.R. Rep. No. 243, 108th Cong., Ist Sess. (2003) ............-++: 33

Revision of Regulations and Application Form for

| Mexican-Domiciled Motor Carriers to Operate

| in U.S. Municipalities and Commercial Zones

on the U.S.-Mexico Border, 66 Fed. Reg. 22,328

(2001) 9

X

Miscellaneous—Continued: Page

S. Rep. No. 224, 107th Cong., 2d Sess. (2002) ..........cscesesees 33

S. Rep. No. 146, 108th Cong., Ist Sess. (2003) «0.0.0... 33

Safety Auditor Certification: Notice of Statutory

Compliance Date, 68 Fed. Reg. 74,287 (2008) ........s:s0+ 16

Safety Monitoring System and Compliance

Initiative for Mexican Motor Carriers Operating

in the United States, 66 Fed. Reg. 22,415 (2001) ............ i)

Memorandum on Implementation on NAFTA,

29 Weekly Comp. Pres. Doc. 2641 (Dec. 27, 1993) ........... 6

Webster’s Third New International Dictionary of

the English Language Unabridged (19938) 0.0... 25

In the Supreme Court of the Gnited States

No. 03-358

DEPARTMENT OF TRANSPORTATION, ET AL.,

PETITIONERS

v.

PUBLIC CITIZEN, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE PETITIONERS

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-52a) is

reported at 316 F.3d 1002. The rulemaking decisions of the ~

Federal Motor Carrier Safety Administration are published

at 67 Fed. Reg. 12,702 (Pet. App. 58a-124a), 67 Fed. Reg.

12,758 (Pet. App. 125a- 202a), and 67 Fed. Reg. 12,776 (Pet.

App., 203a-220a).

JURISDICTION

The judgment of the court of appeals was entered on

January 16, 2003. A petition for rehearing was denied on

April 10, 2003 (Pet. App. 221la-222a). On June 30, 2003,

Justice O’Connor extended the time within which to file a

petition for a writ of certiorari to and including August 8,

2003. On July 28, 2003, Justice O’Connor further extended

the time within which to file a petition for a writ of certiorari

to and including September 8, 2003. The petition for a writ

of certiorari was filed on that date and was granted on

(1)

December 15, 2003. The jurisdiction of this Court rests on 28

U.S.C. 1254(1).

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

Relevant statutory provisions and regulations are set out

in an appendix to this brief. App., infra, 1a-20a.

STATEMENT

In November 2002, the President lifted a trade morato-

rium on certain operations by Mexican motor carriers in the

United States. The President took that action pursuant to

express congressional authorization, in furtherance of

foreign policy and foreign trade objectives of the United

States, and to comply with the ruling of an international

arbitration panel under the North American Free Trade

Agreement (NAFTA), Dec. 17, 1992, 32 I.L.M. 605 (1993). In

anticipation of the President’s action, the Federal Motor

Carrier Safety Administration (FMCSA), which is the

agency within the United States Department of Transporta-

tion (DOT) that has responsibility for motor carrier safety,

issued regulations addressing the application of United

States safety requirements to those Mexican motor carriers

that would be permitted to operate in the United States once

the moratorium was lifted.

In this case, the Ninth Circuit held that FMCSA, before

promulgating its safety regulations, was required to review

the environmental effects of the President’s foreign trade

determination under the National Environmental Policy Act

of 1969 (NEPA), 42 U.S.C. 4332(2)(C), and the Clean Air Act

(CAA), 42 U.S.C. 7506(c)(1). The court of appeals relied on

respondents’ contentions that the new cross-border opera-

tions by Mexican trucks that are permitted under the

President’s trade decision will have adverse air quality

effects in the United States, and that those effects are

attributable to FMCSA’s safety rulemakings. The court con-

cluded that FMCSA had to study that air quality issue

before it could fulfill its separate statutory responsibility of

establishing safety-related regulations governing the opera-

tions of Mexican motor carriers.

The court of appeals’ decision is incorrect. The deter-

mination to allow cross-border operations by Mexican

carriers was the result of the joint exercise by Congress and

the President of their constitutional responsibilities for for-

eign trade and foreign relations, and was made in accordance

with NAFTA obligations and pursuant to statutory provi-

sions vesting trade authority directly in the President.

NEPA and the CAA, by contrast, establish procedural re-

quirements that guide subsidiary decision-making by federal

agencies. Congress did not extend those requirements to

the President, whose constitutional] and statutory responsi-

bilities demand greater flexibility, particularly in the areas

of foreign relations and foreign trade that are at issue here.

In its safety rulemakings, moreover, FMCSA lacks the

authority and expertise to pass upon the many factors—

including relations with other Nations, compliance with

international agreements such as NAFTA, and environ-

mental and other issues involved in entering into and imple-

menting trade agreements—that Congress and the Presi-

dent may assess in making foreign trade and foreign rela-

tions decisions. Requiring FMCSA to study the environ-

mental effects of the President’s action to lift a trade mora-

torium is inconsistent with Congress’s exclusion of Presi-

dential action from the requirements of NEPA and the CAA,

and would not be compatible with FMCSA’s implementation

of its discrete duties within its own sphere of responsibility

and expertise.

1. a. The President is vested with express statutory

authority to determine whether Canadian and Mexican truck

and bus operators may operate in the United States. See 49

U.S.C. 13902(c). Before 1982, motor carriers domiciled in

Canada and Mexico were able to obtain certification from the

Interstate Commerce Commission (ICC) to operate within

the United States. See 49 U.S.C. 301 et seg. (1976). In 1982,

however, Congress enacted a two-year moratorium on new

grants of United States operating authority to motor carri-

ers from those countries. 49 U.S.C. 10922(/)(1) (1982). Con-

gress enacted the moratorium in response to concerns that

United States motor carriers were being denied the same

access to Canadian and Mexican markets that carriers from

those countries had to the United States. See Pet. App. 56a.

Congress authorized the President to extend the morato-

rium beyond the initial two years if Canada or Mexico “sub-

stantially prohibit{ed]” operations by United States carriers,

49 U.S.C. 10922(1)(1) (1982), and to lift or modify the mora-

torium if he determined that doing so was in the “national

interest,” 49 U.S.C. 10922(/)(2) (1982).

Shortly after the moratorium was imposed, the United

States entered into a bilateral understanding with Canada,

and President Reagan lifted the moratorium on new grants

of operating authority to Canadian carriers. See Determi-

nation Under the Bus Regulatory Reform Act of 1982, 47

Fed. Reg. 54,053 (1982); see Pet. App. 56a. In a series of ac-

tions under the 1982 statute, however, Presidents Reagan,

Bush, and Clinton subsequently extended the moratorium on

new grants of authority to Mexican motor carriers. See Pet.

App. 9a & n.2 (citing presidential orders); 49 U.S.C. 13902

note. Although the moratorium did not apply to Mexican

carriers that already had authority to operate in the United

States or that were not required to obtain operating author-

ity subject to the moratorium (such as carriers that operated

solely in commercial zones along the United States-Mexico

border), the Presidential actions prevented additional Mexi-

can carriers from obtaining grants of operating authority to

provide trucking services and scheduled bus services into or

within the United States beyond the border zones. See Pet.

App. 9a, 56a-57a.

In 1995, Congress recodified the statute that authorized

the moratorium and amended it to provide that the existing

Presidential restrictions on new operations by Mexican mo-

tor carriers would remain in effect “unless and until” the

President made an express determination to continue, re-

move, or modify those restrictions. Interstate Commerce

Commission Termination Act of 1995, Pub. L. No. 104-88,

Tit. I, § 103, 109 Stat. 880 (49 U.S.C. 13902(c)(4)).’ Under the

1995 law, the President is empowered to impose new restric-

tions on Canadian and Mexican motor carriers upon a deter-

mination that policies or practices of Canada or Mexico im-

pose “unreasonable or discriminatory” burdens on United

States motor carriers seeking to operate in those countries.

49 U.S.C. 13902(c)(1). The President may remove or modify

existing restrictions if he determines that doing so would be

“consistent with the obligations of the United States under a

trade agreement or with United States transportation pol-

icy.” 49 U.S.C. 13902(c)(3). If the President allows foreign

carriers to obtain authority to provide service in the United

States, those carriers are subject to “all applicable laws and

regulations pertaining to fitness, safety of operations, finan-

cial responsibility, and [federal] taxes.” 49 U.S.C.

13902(c)(8).

b. Congress enacted the 1995 amendments to the mora-

torium law—which expressly authorize the President to

1 There are approximately 4.5 million northbound truck crossings of

the United States-Mexico border each year. See J.A. 85, Fig. 3-2. Be-

cause of the moratorium, Mexican cargo that enters the United States by

truck generally is transported by Mexican carriers only to terminals

within the border commercial zones, where it is transferred to United

States carriers for transport to its final destination. Passengers using

scheduled bus services must follow similar procedures for their trips from

Mexico to the United States. See J.A. 123-124; Pet. 25-26.

modify the moratorium in light of a trade agree-

ment—against the background of NAFTA. In 1990, the

United States, Mexico, and Canada initiated negotiations

with the goal of eliminating or reducing trade barriers and

creating a free-trade area that encompasses the three coun-

tries. In December 1992, the leaders of the three nations

signed NAFTA. Congress approved and took steps to im-

plement NAFTA through the North American Free Trade

Agreement Implementation Act (NAFTA Implementation

Act), Pub. L. No. 103-182, 107 Stat. 2057 (19 U.S.C. 3301-

3473). See generally Pet. App. 7a-8a. In NAFTA Annex I,

32 1.L.M. at 742 (Schedule of the United States), the United

States agreed to phase out the moratorium and, by January

2000, permit Mexican carriers to obtain operating authority

for cross-border service from Mexico to points in the United

States beyond the border area. NAFTA took effect on

January 1, 1994. See Memorandum on Implementation of

NAFTA, 29 Weekly Comp. Pres. Doc. 2641 (Dec. 27, 1993);

19 U.S.C. 3311(b).

On NAFTA’s effective date, President Clinton began the

incremental modification of the trade moratorium by allow-

ing the licensing of Mexican carriers to provide certain bus

services in the United States. See Pet. App. 57a. Due to

concerns about the adequacy of Mexico’s regulation of motor

carrier safety, however, President Clinton did not continue

to ease the moratorium on the timetable specified in

NAFTA. See id. at 57a-58a; J.A. 53; see also C.A. Supp. E.R.

17-20; Application by Certain Mexican Motor Carriers to

Operate Beyond U.S. Municipalities and Commercial Zones

on the U.S.-Mexico Border, 66 Fed. Reg. 22,371-22,372

(2001).

The government of Mexico challenged the United States’

implementation of NAFTA’s motor carrier provisions by

filing complaints under NAFTA’s dispute-resolution process.

See Pet. App. 59a. In February 2001, an international arbi-

tration panel convened under that process determined that

the “blanket refusal” by the United States “to review and

consider for approval any Mexican-owned carrier applica-

tions for authority to provide cross-border trucking services

was and remains a breach of the U.S. obligations under

(NAFTA].” J.A. 279. The arbitration panel “recommend([ed]

that the United States take appropriate steps to bring its

practices with respect to cross-border trucking services

* * * into compliance with its obligations under the ap- -

plicable provisions of NAFTA.” J.A. 280.

Almost immediately after the arbitrators’ decision, Presi-

dent Bush made clear his intention to lift the moratorium on

cross-border operations following the preparation of new

regulations governing grants of operating authority to Mexi-

can motor carriers, in order to comply with NAFTA and

promote trade between the United States and Mexico. Pet.

App. 10a; J.A. 53; Pet. 5 & n.2.

ce. The Federal Motor Carrier Safety Administration is

the agency within DOT that is responsible for motor carrier

safety and registration. See 49 U.S.C. 113(f).2 FMCSA’s

statutory mandates include “ensur[ing]” safety, see 49

U.S.C. 31136; establishing minimum levels of financial re-

sponsibility for motor carriers, see 49 U.S.C. 31139; and pre-

scribing federal standards for safety inspections of commer-

cial motor vehicles, see 49 U.S.C. 31142. FMCSA must grant

registration to all domestic or foreign motor carriers that are

“willing and able to comply with” the applicable safety, fit-

2 In 1999, Congress transferred responsibility for motor carrier

safety within DOT from the Federal Highway Administration to the

newly created FMCSA. See Motor Carrier Safety Improvement Act of

1999, Pub. L. No. 106-159, 113 Stat. 1748; 49 U.S.C. 113. Previously, when

Congress had abolished the ICC, it assigned most of the ICC’s responsib-

ilities for motor carrier operations to the Secretary of Transportation. See

ICC Termination Act of 1995, Pub. L. No. 104-88, § 101, 109 Stat. 804

(abolishing ICC); 49 U.S.C. 13301, 13501. See also J.A. 51.

ness, and financial-responsibility requirements. 49 U.S.C.

13902(a)(1). FMCSA has no authority to impose or enforce

emissions controls or éstablish other environmental re-

quirements unrelated to motor carrier safety, or to deny mo-

tor carriers operating authority based on such criteria. See

J.A. 51-52. The Environmental Protection Agency (EPA),

not FMCSA, administers the program under the Clean Air

Act that establishes emissions standards for new motor

vehicles and engines. See 42 U.S.C. 7521; J.A. 202.

In May 2001, following the President’s statements of his

intent to comply with the decision of the NAFTA arbitration

panel and “in anticipation of the modification of the morato-

rium,” J.A. 54, FMCSA published for comment proposed

rules concerning safety regulation of Mexican motor carri-

ers. One of the proposed rules (the Application Rule) ad-

dressed the establishment of a new application form specifi-

cally for Mexican carriers that seek cross-border operating

authority. The proposed form required those carriers to

submit more detailed safety-related information than is

obtained from domestic or Canadian carriers, or would have

been obtained from Mexican carriers under FMCSA’s

existing rules. See Application by Certain Mexican Motor

Carriers to Operate Beyond U.S. Municipalities and Com-

mercial Zones on the U.S.-Mexico Border, 66 Fed. Reg. at

22,371, 22,372. Another proposed rule (the Safety Monitor-

3 In 1995, as part of its efforts to prepare for NAFTA’s

implementation, the ICC had promulgated application requirements and

an application form for Mexican carriers seeking authority to conduct

cross-border operations. Pet. App. 57a; J.A. 32; see Freight Operations by

Mexican Motor Carriers: Implementation of North American Free Trade

Agreement, 60 Fed. Reg. 63,981 (1995). Approximately 190 applications

were filed under the ICC’s regulations. Pet. App. 58a; J.A. 53-54. Because

the President did not modify the moratorium on cross-border operations

on the schedule established by NAFTA, neither the ICC, nor its successor

agencies within DOT (see note 2, supra), granted operating authority to

ing Rule) addressed the establishment of a safety-inspection

regime for al] Mexican motor carriers, including (but not

limited to) the new carriers that would receive operating

authority under the Application Rule. See Safety Monitor-

ing System and Compliance Initiative for Mexican Motor

Carriers Operating in the United States, 66 Fed. Reg. 22,415

(2001).*

d. In December 2001, Congress enacted Section 350 of

the Department of Transportation and Related Agencies

Appropriations Act, 2002, Pub. L. No. 107-87, 115 Stat. 864.

Section 350 provided that no funds appropriated under the

2002 Appropriations Act could be “obligated or expended for

the review or processing of an application by a Mexican

motor carrier for authority to operate beyond United States

municipalities and commercial zones on the United States-

Mexico border” until, among other things, FMCSA imple-

mented specific application and safety-monitoring require-

ments for Mexican carriers that, in some particulars, were

not already contained in either the Application and Safety

Monitoring Rules that FMCSA had proposed or the applica-

tion rules established by the former ICC, see note 3, supra.

Pub. L. No. 107-87, § 350(a), 115 Stat. 864; see Pet. App. 53a-

54a, 6la-62a. Congress later extended the conditions of Sec-

tion 350 to appropriations for Fiscal Years 2003 and 2004.

any Mexican carriers under the regulations that the ICC promulgated in

1995.

4 A third proposed rule that FMCSA issued on the same day

concerned applications for operating authority by Mexican carriers

operating solely within border commercial zones, which were not covered

by the moratorium on cross-border operations. See Revision of

Regulations and Application Form for Mezxican-Domiciled Motor

Carriers to Operate in U.S. Municipalities and Commercial Zones on the

U.S.-Mexico Border, 66 Fed. Reg. 22,328 (2001). That rule does not

pertain to the President’s modification of the trade moratorium to allow

cross-border operations and is not at issue in this case.

10

See Consolidated Appropriations Resolution, 2003, Pub. L.

No. 108-7, Div. I, Tit. III], § 348, 117 Stat. 419; Consolidated

Appropriations Act, 2004, Pub. L. No. 108-199, Div. F, Tit. 1,

§ 130.

e. In January 2002, FMCSA issued a Programmatic En-

vironmental Assessment for the proposed Application and

Safety Monitoring Rules (and other proposed rules not at

issue in this case). See J.A. 36-231. Under NEPA, federal

agencies must prepare an environmental impact statement

(EIS) before taking any “major federal action[] significantly

affecting the quality of the human environment.” 42 U.S.C.

4332(2\(C). The Council on Environmental Quality (CEQ)

has promulgated regulations to guide federal agencies in

determining what actions are subject to that statutory

requirement. See 40 C.F.R. 1500.3; Andrus v. Sierra Club,

442 U.S. 347, 357 (1979). The CEQ regulations allow an

agency to prepare a more limited document, known as an

environmental assessment (EA), if the agency has neither

established a categorical exclusion that excuses the proposed

action from the requirement of environmental analysis, nor

already determined to prepare a full EIS. See 40 C.F.R.

1501.3, 1501.4. An EA is a “concise public document” that

“briefly provide[s] sufficient evidence and analysis for

determining whether to prepare an [EIS].” 40 C.F.R.

1508.9(a). If the agency determines on the basis of the EA

that an EIS is not required, then it must issue a “finding of

no significant impact” (FONSI), which is a document “briefly

presenting” the reasons why the agency action will not have

a significant impact on the human environment. 40 C.F.R.

1501.4(e), 1508.13.

In the EA for its proposed Mexican-truck regulations,

FMCSA noted several relevant circumstances and assump-

tions. FMCSA recognized that the proposed rules would

have “no practical impact” until the occurrence of the

“intervening event” of the President’s modification of the

|

|

. |

ll

trade moratorium. J.A. 56, 57. FMCSA accordingly as-

sumed in studying the effects of its proposed regulations

that the President would lift the moratorium on granting

new authority for cross-border operations. Jbid. FMCSA

further noted that as a result of Section 350, the President’s

anticipated lifting of that moratorium would have no effect

until FMCSA promulgated the required regulations. J.A.

57-58.

FMCSA noted “that the Presidential order to modify the

moratorium could result in changes in trade volume and

operations between the United States and Mexico,” possibly

including an increase in the number of trips by Mexican

commercial motor vehicles in the United States (which

might be offset by a reduction in trips by United States

trucks and buses). J.A. 60. But FMCSA determined that

“this and any other associated effects in trade characteristics

would be the result of the modification of the moratorium”

by the President, not FMCSA’s implementation of the pro-

posed safety regulations governing those carriers that take

advantage of the opportunity afforded by the President’s

action. [bid.

Against that background, FMCSA’s EA addressed the

environmental impacts associated with three different sce-

narios: (1) a Baseline Scenario, in which the President hypo-

thetically would not act to modify the moratorium and

FMCSA would not alter its existing regulations governing

cross-border operations by Mexican motor carriers; (2) a No

Action Alternative, in which (contrary to what was possible

as long as the appropriations restrictions that Congress

adopted during FMCSA’s preparation of the EA remained in

place) the President’s modification of the trade moratorium

hypothetically would be implemented without any change in

FMCSA’s existing regulations; and (3) the Proposed Action

Alternative, in which the President would modify the mora-

torium and FMCSA would adopt its proposed regulations.

12

J.A. 56. The EA considered environmental impacts in the

categories of traffic and congestion, J.A. 123-135, public

safety and health, J.A. 135-136, air quality, J.A. 146-167,

noise, J.A. 167-180, and socioeconomic factors and environ-

mental justice, J.A. 180-192.

Based on that analysis, FMCSA concluded that the envi-

ronmental impacts of the proposed Application and Safety

Monitoring rules “are expected to be minor.” J.A. 193.

FMCSA noted that “the Proposed Action by FMCSA is

mostly administrative,” with “[t]he only area of potential

[environmental] concern” being a “marginal[] increase” in

the number of roadside inspections of Mexican trucks and

buses due to the proposed regulations. J/bid. The minor

environmental effects of those increased inspections (such as

emissions and noise from trucks being inspected, and danger

to passing motorists), FMCSA explained, could be addressed

and avoided in the inspections process, see 42 U.S.C.

4332(2)(C\(ii). J.A. 193-196.° In addition, the increased

inspection-related emissions would be partially or wholly

offset by an incidental air-quality benefit of the new safety

regulations—that FMCSA’s adoption of stricter safety

requirements might incrementally reduce the number of

Mexican trucks operating in the United States, see J.A. 126,

137, 157, 167. FMCSA accordingly concluded in the EA that

“[t]he Proposed Action by FMCSA has no significant

5 FMCSA estimated that, in 2002, Mexican operators would operate

approximately 72,000 commercial motor vehicles subject to the new

regulations (of which about half would engage in operations outside the

border commercial zones), and there would be approximately 230,000

inspections of those vehicles. J.A. 67, 132, 165. By contrast, there were

approximately 4.5 million commercial motor vehicles operating in the

United States. J.A. 149. Furthermore, new cross-border operations by

Mexican-domiciled trucks often would substitute for, rather than be

cumulative of, operations by United States trucks. See J.A. 135.

rrr el ete

13

impacts and thus requires no mitigation” before adoption of

the proposed regulations. J.A. 196.

On the same day that it released the EA, FMCSA issued a

FONSI stating that the EA “provides sufficient evidence

and analysis for determining that an environmental impact

statement is not required” because the proposed regulations

“would have no significant effect on the human environ-

ment.” J.A. 34-35.

f. On March 19, 2002, FMCSA issued its Application

Rule (Pet. App. 58a-124a) and Safety Monitoring Rule (id. at

125a-202a). FMCSA issued both rules as “interim” final

rules and delayed their effective date until May 3, 2002, to

allow public comment on provisions that FMCSA added to

the proposed regulations to satisfy the requirements of

Section 350, which had been enacted after the proposed

regulations were published. See id. at 53a-54a, 6la-62a,

125a, 147a-149a. In preambles to the new regulations,

FMCSA explained that they were designed to implement

the requirements of Section 350 and “ensure the safe

operation of Mexico-domiciled motor carriers in the United

States.” Jd. at 54a, 126a; see id. at 127a-128a.

In the regulatory preambles, FMCSA relied on the

January 2002 EA and FONSI to demonstrate its satisfaction

of NEPA’s requirements in promulgating the Application

and Safety Monitoring Rules. Pet. App. 64a-65a, 106a-107a,

154a-155a, 182a. Next addressing Clean Air Act issues,

FMCSA determined that it was not required to perform a

e9-called “conformity review” of the proposed regulations

under 42 U.S.C. 7506(c)(1). Pet. App. 65a-66a, 155a. Section

7506(c)(1) provides that “[n]o department, agency, or in-

strumentality of the Federal Government shall engage in,

support in any way or provide financial assistance for, li-

cense or permit, or approve, any activity which does not con-

form to” the requirements of a state air-quality implementa-

tion plan that has been established under the CAA. 42

14

U.S.C. 7506(c)(1). EPA has promulgated regulations imple-

menting the conformity-review requirement. See 40 C.F.R.

Pt. 93. Under those regulations, a federal agency need not

conduct a full-blown conformity review if its intended action

falls within one of several regulatory exemptions, including

an exemption for actions that will not result in direct or indi-

rect emissions above specified threshold levels. 40 C.F.R.

93.153(b).

Consistent with the air-quality analysis of the EA, see

J.A. 146-167, FMCSA determined in pertinent part that

emissions attributable to the Application and Safety Moni-

toring Rules (i.e., emissions from increased roadside inspec-

tions of Mexican trucks that would be granted authority to

operate in the United States after the moratorium was

lifted) would be below EPA’s threshold emission levels and a

full conformity review therefore was not required under the

CAA. Pet. App. 65a-66a, 155a. Also consistent with the EA,

FMCSA supported its determination that no conformity

review was required under the CAA by again explaining

that its rulemakings were “actions to improve FMCSA’s

regulatory oversight” of motor carrier safety, “not * * * to

modify the moratorium and allow Mexican trucks to operate

beyond the border,” which is an action outside FMCSA’s

authority and was for the President to decide. /d. at 66a,

79a.

2. In November 2002, after FMCSA promulgated the

Application and Safety Monitoring Rules, the President

lifted the moratorium insofar as it prohibited qualified motor

6 FMCSA also relied on EPA’s regulation creating an exemption

from the CAA’s conformity-review requirement for agency rulemakings.

See Pet. App. 65a-66a; 40 C.F.R. 93.153(c)(2)(iii). The court of appeals

found that exemption inapplicable to FMCSA's Application and Safety

Monitoring Rules. See Pet. App. 48a-5la. The court of appeals’ rejection

of that alternative ground for FMCSA’s conformity-review decision is not

at issue in this case. See Pet. 10 n.4.

SS — ee

—_——— ial ae ete

15

carriers domiciled in Mexico from obtaining operating

authority to provide cross-border truck and scheduled bus

services. Pet. App. 232a-234a. The President determined

that permitting cross-border operations is “consistent with

obligations of the United States under NAFTA and with our

national transportation policy,” and that “expeditious action

is required to implement th[e] modification to the morato-

rium” on United States operations by Mexican motor carri-

ers. Id. at 233a. The President further noted that, when

Mexican motor carriers obtain authorization to provide

cross-border service, they “will be subject to the same Fed-

eral and State laws, regulations, and procedures that apply

to carriers domiciled in the United States,” including safety

and environmental laws. /d. at 233a-234a. The President

left the moratorium in place with respect to any authori-

zation of Mexican-domiciled motor carriers to provide truck

or bus services between points in the United States. /bid.

3. Before the President acted, respondents had filed peti-

tions for judicial review of the Application and Safety Moni-

toring Rules, asserting that the rules were promulgated in

violation of NEPA, the conformity requirement of the CAA,

and the Administrative Procedure Act (APA), 5 U.S.C. 701-

706. See Pet. App. 13a. In January 2003, the Ninth Circuit

granted the petitions and set aside the rules, thus prevent-

ing implementation of the President’s border-opening deci-

sion. Id. at 1a-52a."

7 On the same day that FMCSA published the Application and Safety

Monitoring Rules, it also promulgated a rule to establish training and

certification requirements for all persons who conduct safety inspections

and audits of domestic or foreign motor carriers under FMCSA’s regula-

tions. See Pet. App. 203a-220a (Auditor Certification Rule). Although the

Auditor Certification Rule is not limited to inspections of Mexican motor

carriers, Section 350 made promulgation of that rule one of the

prerequisites to expending funds on processing Mexican carriers’ applica-

tions for cross-border operating authority. See Pub. L. No. 107-87,

16

a. The court of appeals first determined (Pet. App. l4a-

26a) that respondent Public Citizen—which alleges that

some of its members who live near the Mexican border

would suffer adverse health consequences from increased

emissions attributable to cross-border operations by Mexi-

can commercial vehicles, see id. at 16a-17a; J.A. 491, 496-

497—has standing to challenge FMCSA’s safety regulations.

The court reasoned that Public Citizen sufficiently alleged

both causation and redressability because (1) Mexican trucks

would be able to conduct cross-border operations (possibly

leading to adverse health effects) if FMCSA’s safety regula-

tions were upheld, and (2) if the petition for review were

granted, then trucks of new Mexican carriers would be tem-

porarily excluded from the United States by virtue of

Section 350, pending FMCSA’s completion of a new envi-

ronmental review. See Pet. App. 22a-23a.°

b. Addressing the merits of respondents’ challenge to the

adequacy of FMCSA’s NEPA review, the court of appeals

concluded that the EA was deficient because FMCSA failed

to give adequate consideration to the overall environmental

impact of lifting the moratorium on new cross-border opera-

tions by Mexican trucks, and instead largely confined its

analysis to the limited effects of FMCSA’s safety regulations

themselves. Pet. App. 28a-43a. Quoting CEQ’s regulations,

§ 350(a)(10)(B), 115 Stat. 866. The court of appeals invalidated the Auditor

Certification Rule as well as the Application and Safety Monitoring Rules.

See Pet. App. 43a-45a. After the Ninth Circuit’s decision, however,

FMCSA rei sued the Auditor Certification Rule on the basis of an EA

that addressed both NEPA and CAA issues with respect to that rule

alone. See Safety Auditor Certification: Notice of Statutory Compliance

Date, 68 Fed. Reg. 74,287 (2003). This Court’s disposition of the instant

case will have no direct effect on the reissued Auditor Certification Rule.

S lthough the government argued in the court of appeals that

respondents lack standing, the petition for a writ of certiorari did not ask

this Court to review the standing issue.

17

the court determined that FMCSA was required to consider

the effects of lifting the moratorium on cross-border opera-

tions because “the President’s rescission of the moratorium

was ‘reasonably foreseeable’ at the time the EA was pre-

pared and the decision not to prepare an EIS was made.” Jd.

at 3la (quoting 40 C.F.R. 1508.7, 1508.8(b)). The court of ap-

peals likewise stated that it was “illogical” for FMCSA to

distinguish between the environmental effects of the Presi-

dent’s trade action and the environmental effects of the

agency’s Application and Safety Monitoring Rules them-

selves. Jd. at 37a.

The court further concluded that, in studying the long-

term effects of the border opening, FMCSA should have de-

termined the most likely routes of Mexican truck traffic and

then conducted localized environmental analysis of that traf-

fic for particular geographic areas. See Pet. App. 33a-39a.

The court also faulted FMCSA for failing to consider addi-

tional alternatives to its proposed safety rules, “such as, for

example, proposing more stringent controls on incoming

Mexican trucks.” Jd. at 42a. The court of appeals thus re-

manded the case for the preparation of a “full Environmental

Impact Statement.” Jd. at 52a.

ce. For similar reasons, the court of appeals directed

FMCSA to prepare a full Clean Air Act conformity

determination for the challenged regulations. Pet. App. 52a.

The court concluded that FMCSA’s determination that

emissions attributable to the safety rules would be below the

threshold levels established in 40 C.F.R. 93.153(b)(1) was not

“reliable” because, like FMCSA’s NEPA analysis, the

agency’s CAA determination reflected what the court

characterized as an “illusory distinction between the effects

of the regulations themselves and the effects of the

presidential rescission of the moratorium on Mexican truck

entry.” Pet. App. 47a. The court thus concluded that

FMCSA is required under the CAA and EPA’s regulations

18

to conduct a region-by-region review of opening the border

to determine whether the threshold emission levels specified

in 40 C.F.R. 93.153(b)(1) will be exceeded for particular areas

and, if so, whether the border opening would conform to the

applicable state air-quality implementation plan. Pet. App.

47a-48a.

d. The court of appeals recognized that, due to the re-

quirements of Section 350, its invalidation of FMCSA’s

rulemakings had the effect of blocking implementation of the

President’s action to allow grants of cross-border operating

authority to Mexican carriers. Pet. App. 23a. The court of

appeals nevertheless expressed the view that its decision did

not “touch on” the President’s “clear, unreviewable discre-

tionary authority to modify the moratorium pursuant to 49

U.S.C. § 13902(c).” Id. at 26a.

SUMMARY OF ARGUMENT

Respondents seek to use safety rulemakings of the Fed-

eral Motor Carrier Safety Administration to press environ-

mental concerns about the President’s determination to lift

the moratorium on cross-border operations by Mexican mo-

tor carriers. That trade action, however, was within the

President’s constitutional and statutory authority. FMCSA

has no assigned role in determining whether the moratorium

should be lifted or modified, and cannot deny operating

authority to a motor carrier based on environmental consid-

erations. This case thus presents the question whether envi-

ronmental-review requirements that apply to FMCSA’s

promulgation of safety rules for Mexican motor carriers obli-

gate FMCSA to scrutinize the effects of a foreign policy and

foreign trade decision of the President, which is entirely out-

side the scope of FMCSA’s assigned responsibilities.

I. It was not arbitrary or capricious for FMCSA to limit

its review under the National Environmental Policy Act to

the effects of its particular safety requirements, without ad-

19

dressing the environmental impacts of the President’s deci-

sion to allow new cross-border operations by Mexican motor

carriers. NEPA’s environmental-review requirements apply

only to federal “agencies,” 42 U.S.C. 4332(2)(C), and the

Council on Environmental Quality has promulgated regula-

tions expressly providing that actions of the President are

not subject to NEPA’s requirements. See 40 C.F.R. 1508.12.

Respondents have never suggested that, apart from the

President’s action to lift the moratorium on new cross-bor-

der operating authority, FMCSA’s Application and Safety

Monitoring Rules will have any significant environmental

effects. Instead, they have challenged FMCSA’s decision

not to study emissions assertedly associated with the Presi-

dent’s border-opening decision. Accordingly, NEPA’s ex-

ception for Presidential action applies in this case.

The court of appeals’ contrary conclusion rests on its de-

termination that it was foreseeable that the President would

take his border-opening action after FMCSA promulgated

its new safety regulations. Yet FMCSA’s safety rulemak-

ings were a response to the President’s previously an-

nounced intention to lift the trade moratorium on new

authorizations for cross-border services in accordance with

the Nation’s international commitments, not vice-versa.

Furthermore, FMCSA’s promulgation of new safety rules

did not obligate the President to carry through with termi-

nating the moratorium.

Respondents have argued in this case that Section 350 of

the 2002 Appropriations Act established a “but for” causal

relationship between FMCSA’s promulgation of new safety

regulations and its implementation of the President’s lifting

of the moratorium on new grants of cross-border operating

authority. Under NEPA and this Court’s decisions, how-

ever, a “but for” relationship is not enough to require

FMCSA to study the environmental effects of the Presi-

dent’s decision. The clear division of responsibility between

20

the President and FMCSA under the Constitution and the

relevant statutory provisions establishes the dividing line

between those effects for which FMCSA is responsible

under NEPA and those effects, including the opening of the

border, for which it is not responsible. Further, there would

be no decision-making benefit from preparing the EIS that

the court of appeals required in this case, because FMCSA

has no authority over the border-opening decision and the

President specifically was not required to weigh environ-

mental concerns under NEPA in taking his trade action.

Any motor vehicle emissions that result from the Presi-

dent’s decision to end the trade moratorium likewise are not

a “cumulative impact” of FMCSA’s safety rulemakings that

had to be studied under the CEQ regulations. CEQ’s regula-

tions require agencies to study the incremental environ-

mental effects of their own actions in the context of foresee-

able future actions by other individuals and entities. See 40

C.F.R. 1508.7. The correct focus of a NEPA investigation is

thus the agency’s own proposed action, which, in this case,

does not include the President’s lifting of the trade morato-

rium.

II. Just as the President is not a federal “agency” subject

to NEPA, he is not a “department, agency, or instrumental-

ity of the Federal Government” under the Clean Air Act, 42

U.S.C. 7506(c)(1). Accordingly, the President’s action to

open the border is exempt from the CAA’s conformity-re-

view requirement. Furthermore, under the administrative

regulations that implement the conformity-review require-

ment, a bare “but for” relationship between an agency action

and air emissions is not alone enough to make the emissions

attributable to the agency action. Under the regulations,

any increased emissions associated with allowing additional

Mexican trucks and buses to operate in the United States

are neither “direct emissions” of FMCSA’s safety rulemak-

ings (because they will not occur at the time and place that

~ —-. _—_

21

FMCSA’s safety program is implemented) nor “indirect

emissions” of those safety rulemakings (because, among

other things, FMCSA has no ongoing programmatic respon-

sibility for the emissions). See 40 C.F.R. 93.152. Accord-

ingly, FMCSA did not abuse its discretion in defining the

scope of its CAA conformity analysis.

ARGUMENT

The trade policy that respondents seek to block arises

from the valid exercise of powers that the Constitution vests

specifically in the President and the Congress. The Presi-

dent’s authority over foreign affairs is manifested by his

powers as Commander in Chief of the armed forces (U.S.

Const. Art. II, § 2, Cl. 1), to negotiate treaties (id. Art. II § 2,

Cl. 2), to “receive Ambassadors and other public Ministers”

(id. Art. II, § 3), and to “take Care that the Laws be

faithfully executed” (ibid.). The President is the Nation’s

“guiding organ in the conduct of our foreign affairs,” in

whom the Constitution vests “vast powers in relation to the

outside world.” Ludecke v. Watkins, 335 U.S. 160, 173

(1948); see Department of the Navy v. Egan, 484 U.S. 518,

529 (1988) (noting “the generally accepted view that foreign

policy was the province and responsibility of the Executive”)

(citation omitted). Among his other foreign-affairs duties,

the President is responsible for negotiating and ensuring

compliance with international trade agreements. See

generally United States v. Curtiss-Wright Export Corp., 299

U.S. 304, 318-321 (1936).

For its part, Congress has “broad, comprehensive” power

under the Foreign Commerce Clause of the Constitution,

Art. I, § 8, Cl. 3, to “regulate Commerce with foreign Na-

tions.” United States v. 12 200-Ft. Reels of Super 8MM.

Film, 413 U.S. 123, 125-126 (1973); accord California Bank-

ers Ass'n v. Schultz, 416 U.S. 21, 46 (1974) (“The plenary

authority of Congress over * * * foreign commerce is not

22

open to dispute.”). In the exercise of that power, Congress

frequently vests authority and discretion in the President to

impose, modify, or rescind measures affecting foreign trade

and commerce. See, e.g., Curtiss-Wright Export Corp., su-

pra.

The North American Free Trade Agreement and ensuing

trade reforms arise from a joint exercise of the President’s

foreign affairs power and Congress’s foreign commerce

power. Here, Congress has given the President express

authority to determine whether, and to what extent,

Mexican motor carriers should be granted access to United

States markets. See 49 U.S.C. 13902(c). That authority

includes the power to determine whether access should be

granted pursuant to the obligations of the United States

under NAFTA. See 49 U.S.C. 13902(c)(3). When the

President lifted the moratorium and authorized FMCSA to

begin processing applications for cross-border operations by

Mexican carriers, see Pet. App. 232a-234a, he “act[ed]

pursuant to an express * * * authorization of Congress”

and his authority was “at its maximum, for it include[d] all

that he possesses in his own right plus all that Congress can

delegate.” Crosby v. National Foreign Trade Council, 530

U.S. 363, 375 (2000) (quoting Youngstown Sheet & Tube Co.

v. Sawyer, 343 U.S. 579, 635 (1952)).

FMCSA, by contrast, lacks any authority over foreign af-

fairs or trade policy and has no assigned role in determining

whether, or to what extent, Mexican carriers as a class

should be allowed access to United States markets. Instead,

FMCSA’s relevant authority involves granting or refusing

operating authority to particular Mexican motor carriers,

based solely on whether they are “willing and able to comply

with” United States safety and financial-responsibility stan-

dards. 49 U.S.C. 13902(a)(1). As the EA states, FMCSA

“has no authority to deviate from, or add to, th{ose] criteria,”

and it “is statutorily precluded from considering environ-

mental issues” in the course of deciding whether to grant

operating authority to particular carriers. J.A. 52. Ifa

carrier satisfies the applicable statutory and regulatory

requirements, FMCSA “must grant the application.” bid.

Thus, as FMCSA explained in the EA, “but for the morato-

rium” it would be required to grant operating authority to

any Mexican carrier that submits an application demon-

strating its willingness and ability to meet those criteria.

Ibid. Cf. Chicago & S. Air Lines, Inc. v. Waterman S.S. Co.,

333 U.S. 103, 108-112 (1948) (discussing respective roles of

the President and the CAB in approving foreign routes for

air carriers).

I. THE COURT OF APPEALS MISAPPLIED THE

NATIONAL ENVIRONMENTAL POLICY ACT

The question presented to the court of appeals under

NEPA was whether it was arbitrary and capricious for

FMCSA to exclude from its environmental study the im-

pacts of the foreign affairs and foreign trade action of the

President, an action that FMCSA lacked any power to con-

trol. See Pet. App. 26a-28a; see also, e.g., Marsh v. Oregon

Natural Resources Council, 490 U.S. 360, 375-376 (1989)

(applying “arbitrary and capricious” standard); Kleppe v.

Sierra Club, 427 U.S. 390, 412 (1976) (scope of EIS is matter

within agency’s discretion and “[aJbsent a showing of

arbitrary action, we must assume that the agencies have

exercised this discretion appropriately”); Anderson v.

Evans, 350 F.3d 815, 829 (9th Cir. 2003) (“If an agency

® In its Application Rule, FMCSA determined to advise applicants

for cross-border operating authority of their obligation to comply with “all

pertinent Federal, State, local and tribal statutory and regulatory

requirements, including labor and environmental laws.” Pet. App. 9la.

That statement on the application form is purely “informational in nature”

and does not (and could not) impose any new environmental obligation.

Ibid.

24

decides not to prepare an EIS, the decision not to do so may

be overturned only if it is ‘arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.’”) (quot-

ing 5 U.S.C. 706(2)(A)); Town of Cave Creek v. FAA, 325

F.3d 320, 327 (D.C. Cir. 2003) (same); Indiana Forest Alli-

ance, Inc. v. United States Forest Serv., 325 F.3d 851, 858-

859 (7th Cir. 2003) (same). FMCSA did not act arbitrarily or

capriciously or abuse its discretion in applying NEPA here,

and the court of appeals erred in reaching a contrary

conclusion.

First, the Constitution and federal statutes vest in the

President the authority to allow cross-border operations by

Mexican trucks and buses, and his actions are exempt from

review under NEPA. See Point 1.A.1, infra. Second, re-

spondents have never disputed the correctness of FMCSA’s

conclusion that there are no significant environmental effects

associated with the Application and Safety Monitoring Rules

themselves, when the President’s lifting of the moratorium

on new grants of cross-border operating authority is taken

as a given. See Point 1.A.2, infra. Third, any environmental

consequences of allowing cross-border operations by Mexi-

can trucks are not “effects” of FMCSA’s truck-safety rule-

makings that had to be studied by FMCSA under the regula-

tions promulgated by the Council on Environmental Quality

to implement NEPA. Opening the border was the responsi-

bility of the President. See Point I.B, infra. Fourth, for

similar reasons, FMCSA was not required to undertake a

“cumulative impact” analysis addressing the President's de-

cision to open the border. See Point I.C, infra.

A. FMCSA Was Not Required To Prepare An EIS Address-

ing The President's Action To Lift The Trade Morato-

rium

The President’s decision to lift the moratorium on cross-

border operations by Mexican carriers is not subject to

-

A ere 7

25

NEPA’s requirement of preparing an EIS addressing “major

Federal actions significantly affecting the quality of the hu-

man environment,” 42 U.S.C. 4332(2)(C).

1. Presidential Actions Are Exempt From NEPA’s En-

vironmental-Review Requirements

The EIS requirement applies only to “agencies of the

Federal Government.” 42 U.S.C. 4332(2) (emphasis added).

The CEQ regulations implementing NEPA, which “are enti-

tled to substantial deference,” Marsh, 490 U.S. at 372,

provide that the federal agencies subject to NEPA do not

include “the Congress, the Judiciary, or the President,

including the performance of staff functions for the

President in his Executive Office.” 40 C.F.R. 1508.12.

The exclusion of Presidential action from the EIS re-

quirement arises from NEPA’s text and, at a minimum, rests

on a reasonable administrative interpretation of the statute.

In ordinary usage, an “agency” is “a department or other

administrative unit of a government.” Webster’s Third New

International Dictionary of the English Language Un-

abridged 40 (1993). The President of the United States is not

an “administrative unit.” We are not aware of any court de-

cision holding that the President is an “agency” subject

NEPA, and the President historically has not purported to

comply with NEPA in his decision-making.

Analogously, this Court determined in Franklin v. Mas-

sachusetts, 505 U.S. 788 (1992), that the President is not an

“agency” subject to the Administrative Procedure Act, even

though the APA’s definitions of “agency” generally include

“each authority of the Government of the United States” and

specifically exclude Congress, the courts, and certain other

entities without mentioning the President, see 5 U.S.C.

551(1), 701(b)(1). In Franklin, the Court reasoned that in

light of the “separation of powers and the unique constitu-

tional position of the President,” “textual silence” in the

26

APA’s definition of “agency” was “not enough to subject the

President” to the procedural requirements and judicial-re-

view provisions of the APA. 505 U.S. at 800-801. Rather,

“an express statement by Congress” would be necessary to

impose such restrictions on Presidential decision-making.

Id. at 801.

The same principle applies here. Through NEPA, Con-

gress imposed “action-forcing” procedures upon federal

agencies in order to infuse environmental considerations into

agency decision-making. See Marsh, 490 U.S. at 371 & n.14.

Congress did not demonstrate any intention to affect the

President’s disposition of matters personally entrusted to

him, particularly in sensitive and highly discretionary areas

such as foreign affairs. As the facts surrounding this case

well illustrate, subjecting the President’s conduct of interna-

tional diplomacy to the procedural requirements of NEPA

would impair the President’s ability to “speak for the Nation

with one voice” and to make commitments concerning his

own discretionary actions without fear that those commit-

ments will be overridden by the courts. Crosby, 530 U.S. at

381, 382; see Heckler v. Mathews, 465 U.S. 728, 748 (1984)

(“Great nations, like great men, should keep their word.”)

(brackets and citation omitted).

In any event, NEPA provides no private right of action.

Its mandates are subject to judicial enforcement only

through the APA, 5 U.S.C. 701-706. Actions of the President

are unquestionably exempt from the APA under Franklin,

505 U.S. at 801. See Lujan v. National Wildlife Fed’n, 497

U.S. 871, 882 (1990). For that additional reason, the court of

appeals erred in requiring FMCSA to prepare an EIS

directed at the President’s determination to allow cross-

border operations by Mexican carriers. See Chicago & S.

Air Lines, 333 U.S. at 111 (“Such decisions are wholly con-

fided by our Constitution to the political departments of the

government, Executive and Legislative. They are delicate,

27

complex, and involve large amounts of prophecy.

* * * They are decisions of a kind for which the Judiciary

has neither aptitude, facilities nor responsibility.”).

2. Respondents Have Challenged Only FMCSA’s

Determination Not To Study The Environmental

Effects Of The President’s Action To Lift The

Moratorium, Not FMCSA’s Review Of The Effects Of

Its Own Regulations

Throughout this case, respondents have made clear that

they seek an EIS addressing new cross-border operations by

Mexican motor carriers, rather than FMCSA’s regulation of

truck and bus safety. In their brief in opposition (at 7), for

instance, respondents contended that an EIS is required be-

cause “[oJnce * * * FMCSA begins processing applications

to cross the border from a large number of Mexico-domiciled

trucks, substantia] environmental harm will result because

those trucks will emit significantly larger quantities of harm-

ful air pollutants than U.S. trucks.””” Respondents have

reasoned that, if Mexican trucks are allowed to provide

cross-border services, “there will be more Mexico-domiciled

trucks in the United States.” C.A. Br. of Public Citizen, et

al. 32. Respondents have further argued that trucks domi-

ciled in Mexico generally are older than trucks domiciled in

the United States and are not subject to the same emissions

requirements under the Clean Air Act and judicial consent

decrees as United States-domiciled trucks, and, accordingly,

truck emissions in the United States will increase. Jd. at 32-

10 Accord, e.g., C.A. Br. of Public Citizen, et al. 32 (“The challenged

rules will have the practical effect—that is, the trucks crossing the

border—that will create adverse environmental effects.”); C.A. Br. of

NRDC and Planning and Conservation League 17 (“The EA fails to take

into account the public health effects that will result from an increase in

the number of more polluting Mexican-domiciled trucks traveling in the

U.S. once the Final Rules are implemented.”).

28

35, 36-38; see J.A. 301-302 (rulemaking comments); but see

J.A. 482-488 (government court of appeals brief, discussing

respondents’ theories).

None of the respondents argued in FMCSA’s rulemaking

proceedings that FMCSA should consider particular safety

alternatives in light of environmental concerns. Respon-

dents did not identify any different application or safety

monitoring requirements that FMCSA arguably should have

studied. Instead, respondents objected that the EA did not

address “the effect of allowing thousands of heavily polluting

Mexico-domiciled trucks to travel through * * * the United

States”—i.e., what they alleged to be the consequences of

the President’s decision to lift the moratorium on new grants

of cross-border operating authority. J.A. 303; see J.A.

294 (comments of respondents NRDC, et al., arguing that

FMCSA’s proposed rules “would allow Mexican-owned

trucks to drive throughout the United States, resulting in

increased air pollution and other environmental hazards”).

In the court of appeals, respondents similarly did not dis-

pute the EA’s conclusion that there are no significant envi-

ronmental effects associated with the Application and Safety

Monitoring Rules themselves, when the President’s lifting of

the moratorium is taken as a given in FMCSA’s decision-

making. Respondents instead faulted FMCSA for failing to

study the environmental effects of “trucks crossing the bor-

der.” C.A. Br. of Public Citizen, et al. 32.

As respondents have conceded in this Court (Br. in Opp.

25 & n.5), they waited until their reply brief in the court of

appeals to advance a secondary argument that FMCSA

should have “cho[sen] amongst various [safety] options

* * * to alleviate environmental effects” of new cross-

border operations by Mexican trucks. See C.A. Reply Br. of

Public Citizen, et al. 13-15, 21. Although that argument ad-

dressed the substance of FMCSA’s rulemakings, it was

raised much too late to be considered in this case. See

29

Vermont Yankee Nuclear Power Corp. v. Natural Resources

Defense Council, Inc., 435 U.S. 519, 553 (1978) (parties chal-

lenging agency’s environmental review under NEPA must

“alert{] the agency to [their] position and contentions” in

administrative proceedings); Eberle v. City of Anaheim, 901

F.2d 814, 818 (9th Cir. 1990) (appellant may not raise new

issues in reply brief).”’

Revealingly, respondents have consistently relied on a re-

port prepared by a firm called Sierra Research, Inc., which

asserts that FMCSA’s Proposed Action Alternative (under

which the President would lift the moratorium on cross-bor-

der operations after FMCSA put its new Application and

Safety Monitoring Rules in place) would have materially the

same, supposedly harmful environmental effects as the No

Action Alternative (under which—contrary to what actually

was possible under the appropriations restriction of Section

350—the President would lift the moratorium and FMCSA,

without issuing the new Application and Safety Monitoring

Rules, would process applications from Mexican carriers un-

der the then-existing rules that did not satisfy Section 350).

See J.A. 301-303, 312. If the No Action Alternative and the

Proposed Action Alternative are equally objectionable to

respondents, then respondents must be challenging the lift-

ing of the moratorium, not FMCSA’s proposed rules. The

11 At the petition stage, respondents invoked (Br. in Opp. 25 n.5) the

Ninth Circuit’s practice of considering an appellant’s arguments

concerning issues the appellee injected into the case. See United States v.

Franco-Lopez, 312 F.3d 984, 993 n.6 (9th Cir. 2002). But respondents did

not identify anything in the government’s appellate brief that supposedly

raised, on their behalf, this alternative claim of agency error. Moreover,

even if the Ninth Circuit’s practice concerning arguments made in a reply

brief is appropriate where (unlike here) the predicate for its invocation is

present, that would not excuse respondents’ previous procedural default,

as a matter of administrative law under Vermont Yankee, in failing to

present this issue to FMCSA.

: 30

President, however, has sole authority to decide whether to

allow Mexican trucks to serve cross-border routes, and his

decision is not subject to the EIS provisions of NEPA.”

B. The President's Lifting Of The Trade Moratorium Is

Not An “Effect” Of FMCSA’s Safety Rulemakings Un-

der NEPA

The court of appeals determined (Pet. App. 28a-43a) and

respondents argue (Br. in Opp. 18-21) that, even if the bor-

der-opening decision itself is exempt from NEPA, NEPA

required FMCSA to attribute the effects of the border

opening to its own safety regulations. The court of appeals

reasoned principally that the implementing regulations

promulgated by CEQ require FMCSA to study the envi-

ronmental! consequences of the President’s action because his

lifting of the moratorium on cross-border operations was

“reasonably foreseeable” following FMCSA’s rulemaking.

Pet. App. 3la. For their part, respondents focus particularly

on the appropriations restrictions of Section 350, asserting

that the environmental consequences of opening the border

are attributable to FMCSA because, as long as Section 350

remains in place, issuance of the new Application and Safety

Monitoring Rules is a “prerequisite” to actually implement-

ing the President’s decision. Br. in Opp. 18. Neither ration-

ale supports the court of appeals’ holding.

1. FMCSA’s Safety Rulemakings Did Not “Cause”

The Alleged Environmental Effects Of The Presi-

dent’s Action To Allow Cross-Border Operations

Under the CEQ regulations, the environmental “effects”

that can trigger the EIS requirement, see 42 U.S.C.

2 Another analysis on which respondents principally rely likewise

addressed “emissions increases with Mexican heavy-duty diesel trucks

operating in California and elsewhere in the U.S.,” not the effects of the

particular provisions of FMCSA's safety regulations. J.A. 387.

31

4332(2)(C)(ii), include “[d]Jirect effects, which are caused by

the action and occur at the same time and place,” 40 C.F.R.

1508.8(a), and “{iJndirect effects, which are caused by the

action and are later in time or farther removed in distance,

but are still reasonably foreseeable,” 40 C.F.R. 1508.8(b).

Under either the “direct effects” definition or the “indirect

effects” definition, the effects associated with an agency ac-

tion trigger NEPA obligations only if they are “caused by

the action.”

FMCSA was well within the bounds of its discretion in

treating the President’s action to open the border as “an in-

tervening event” pertinent to its environmental assessment

of the proposed regulations, J.A. 56, rather than an “effect”

of the regulations themselves. The Application and Safety

Monitoring Rules will not “cause” pollution from Mexican

trucks and buses within the meaning of the CEQ regulations.

FMCSA promulgated its safety regulations after the

announcement of the President’s intention to terminate the

moratorium on new grants of cross-border operating

authority, see Pet. App. 10a, 20a, 22a, and “in anticipation” of

that action, id. at 54a. Thus, far from “causing” the effects of

the President’s decision to lift the moratorium, FMCSA’s

promulgation of new regulations was caused by the

announcement of the President’s intention to lift the

moratorium.

Moreover, even after FMCSA promulgated its regula-

tions, it remained possible that “political, diplomatic, mili-

tary, or economic” developments “could have changed the

President’s mind” about lifting the moratorium. Pet. App.

22a. If the President had changed his mind, there would

have been no significant increase in cross-border operations

by Mexican carriers following FMCSA’s promulgation of its

safety rules. To hold that FMCSA’s rulemaking “caused”

the effects of the President’s decision would be to require

agencies that implement determinations of the President to

32

treat their own subordinate actions as the cause of

Presidential decisions over which they have no control.”

2. Congress’s Enactment Of Section 350 Did Not Re-

quire FMCSA To Study The Effects Of Lifting The

Moratorium

a. Section 350 of the 2002 Appropriations Act does not

render FMCSA responsible for the President’s decision to

allow cross-border operations by new Mexican carriers.

That legislation made the adoption by FMCSA of certain

safety-related requirements—concerning such matters as

the contents of mandatory safety inspections, safety compli-

ance reviews of Mexican motor carriers, and driver qualifica-

tions—a precondition to FMCSA’s own review and process-

ing of applications by Mexican carriers for cross-border op-

erating authority. See App., infra, 12a-20a. Nothing in

Section 350 gave FMCSA authority over the threshold

determination whether Mexican motor carriers as a class

should be allowed to conduct cross-border operations in the

United States, or authorized FMCSA to tailor its safety

regulations for Mexican carriers to accomplish trade or

environmental objectives. To the contrary, Section 350 left

intact the mandate of 49 U.S.C. 13902(a), which obligates

FMCSA to grant operating authority to all motor carriers—

including Mexican motor carriers—that are “willing and able

to comply with” applicable safety and financial-responsibility

requirements. FMCSA therefore was powerless even after

the enactment of Sectién 350 to advance environmental

objectives at the expense of its statutory mandates, or to

13 The practical dependence of FMCSA’s new safety requirements on

the President’s trade action distinguishes this case from one involving

indirect effects that are related to a change in the physical environment

that genuinely is brought about by the agency’s action, such as changes in

land use that are induced by the construction of a federal highway. See 40

C.F.R. 1508.8(b).

33

delay the promulgation of safety rules for the purpose of

limiting its grants of operating authority to motor carriers

that otherwise would be eligible to receive such authority.

Contrary to respondents’ argument at the petition stage

(Br. in Opp. 11-14, 20-21), moreover, Congress’s re-enact-

ment of Section 350, following the court of appeals’ decision

striking down the Application and Safety Monitoring Rules,

says nothing about the proper application of NEPA in these

circumstances. Section 350 did not amend the environmental

or motor carrier safety laws, or address the Ninth Circuit’s

decision. The reasons identified in the legislative history for

extending Section 350 beyond Fiscal Year 2002 involved only

safety issues, not environmental concerns about cross-border

operations by Mexican carriers. See S. Rep. No. 224, 107th

Cong., 2d Sess. 84-85 (2002) (discussing Fiscal Year 2003 ex-

tension); see also S. Rep. No. 146, 108th Cong., 1st Sess. 69-

70 (2003) (discussing satisfaction of Section 350’s require-

ments in connection with Fiscal Year 2004 extension); H.R.

Rep. No. 243, 108th Cong., Ist Sess. 81 (2003) (same). With

respect to the legal issues in this case, Congress has been

entirely silent. As respondents concede, such legislative in-

action “has generally been rejected as an interpretive aid.”

Br. in Opp. 13 (citing Central Bank of Denver, N.A. v. First

Interstate Bank of Denver, N.A., 511 U.S. 164, 186 (1994)).

b. Despite those considerations, the court of appeals sug-

gested (Pet. App. 18a-23a, 31a) and respondents contend (see

Br. in Opp. 18-20) that by requiring FMCSA to issue new

safety rules before it could process applications by Mexican

carriers for authority to conduct cross-border operations,

Section 350 created a “but for” relationship between

FMCSA’s safety rulemaking and the possible environmental

effects of allowing cross-border operations by Mexican motor

carriers, and thereby triggered a NEPA obligation to

conduct a full environmental evaluation of those effects. A

bare “but for” relationship, however, is not sufficient even in

34

the ordinary case to establish the requisite causal

relationship under NEPA between an agency action and

possible environmental effects, and it certainly does not

suffice here, given the narrow focus of Section 350 on

FMCSA’s safety rules and the supervening cause of the

President’s foreign affairs action.

The Court explained in Metropolitan Edison Co. v. People

Against Nuclear Energy, 460 U.S. 766 (1983), that “[s]ome

effects that are ‘caused by’ a change in the physical environ-

ment in the sense of ‘but for’ causation, will nonetheless not

fall within [42 U.S.C. 4332].” Id. at 774. The causation

problem in Metropolitan Edison involved a long “causal

chain” between the agency’s action affecting the physical

environment (possible re-starting of the Three Mile Island

nuclear power plant) and the claimed psychological harm

from that action. See id. at 774-775. The Court stated more

generally, however, that NEPA requires “a reasonably close

causal relationship,” and that “courts must look to the

underlying policies or legislative intent in order to draw a

manageable line between those causal changes that may

make [the agency] responsible for an effect and those that do

not.” Id. at 774 & n.7.

Here, the clear division of responsibility between the

President and FMCSA under the Constitution and the rele-

vant statutory provisions “draw[s] a manageable line” be-

tween the effects for which FMCSA is responsible under

NEPA and those for which it is not responsible. Metro-

politan Edison, 460 U.S. at 774 n.7. FMCSA’s actions

within its sphere of safety regulation will not work any

“change in the physical environment” (id. at 774) that is rele-

vant to respondents’ legal challenge. At a minimum, it was

not arbitrary or capricious for FMCSA to focus its EA in

accordance with those principles.

Nothing in Section 350 affects that conclusion. Section

350, which is entitled “Safety of Cross-Border Trucking

35

Between United States and Mexico,” 115 Stat. 864, is

directed solely to the safety-related responsibilities of

FMCSA, requiring FMCSA to adopt additional safety crite-

ria before it processes applications from Mexican carriers.

Section 350 is predicated on the assumption that the trade

moratorium would be modified by the President in accor-

dance with NAFTA, and thus addresses only the manner in

which the President’s decision will be implemented.

FMCSA reasonably construed Section 350 not to require it

to step back from the immediate safety-related task at hand

and evaluate under NEPA the environmental effects of al-

lowing cross-border operations by Mexican carriers as a

class.

Indeed, given the President’s action in November 2002 to

lift the moratorium on new grants of cross-border operating

authority (which both FMCSA and the drafters of Section

350 reasonably anticipated, and which was an historical fact

by the time of the court of appeals’ decision, see Pet. App.

20a, 22a), FMCSA lacks discretion to refrain from meeting

the safety-related requirements of Section 350. In light of

the President’s foreign trade action, 49 U.S.C. 13902(a)(1)

effectively requires FMCSA to promulgate regulations that

satisfy Section 350, so that the agency can fulfill its statutory

mandate of processing applications by Mexican carriers that

are “willing and able” to comply with federal safety, fitness,

and financial-responsibility requirements.

ce. The error in the court of appeals’ and respondents’

“but for” analysis is underscored by the fact that neither of

the legislative purposes underlying NEPA’s EIS require-

ment would be served by requiring FMCSA to study further

the environmental impacts of lifting the moratorium on

cross-border operations by Mexican carriers. See Metropolt-

tan Edison, 460 U.S. at 774 n.7. The first purpose underly-

ing the EIS requirement—ensuring that “in reaching its de-

cision,” an agency “will carefully consider{] detailed informa-

36

tion concerning significant environmental impacts,” Robert-

son v. Methow Valley Citizens Council, 490 U.S. 332, 349

(1989), would not be served because FMCSA lacks any

authority or rulemaking discretion relevant to retaining or

lifting the trade moratorium.

Preparation of an EIS in this case also is not indicated by

the second purpose of the statutory EIS requirement, which

is providing relevant information “to the larger audience

that may also play a role in both the decisionmaking process

and the implementation of thle agency’s] decision.”

Robertson, 490 U.S. at 349. The relevant decision was the

President’s determination to allow new grants of cross-

border operating authority in light of “the obligations of the

United States under a trade agreement or * * * United

States transportation policy.” 49 U.S.C. 13902(¢)(3); see Pet.

App. 232a-234a. In making NEPA applicable only to federal

agencies, Congress exempted the President’s decision-

making from the requirements of NEPA. Congress’s

objectives in enacting NEPA do not support a requirement

that FMCSA prepare an EIS to inform any action of the

President—much less an action that already had been taken

by the time the court of appeals ruled—because Congress

categorically determined that the burdens of preparing EISs

in connection with actions of the President are not justified.

4 The fact that the President had formally lifted the moratorium on

cross-border operations by the time of the court of appeals’ decision

highlights the further point that, even if the court of appeals was correct

that FMCSA should have prepared an EIS before the President acted

(which it was not), it does not follow that FMCSA must prepare an EIS

under current conditions. More generally, even under the court of

appeals’ incorrect understanding of NEPA and the CAA, it was error for

the court of appeals to require FMCSA to prepare an EIS and a CAA

conformity review, rather than identifying the particular errors in

FMCSA's analysis that the court of appeals believed to exist and then

remanding to FMCSA for a determination whether an E%6 and conformity

37

d. As applied in this case, the “but for” approach of the

court of appeals also contravenes the “rule of reason” that is

inherent in NEPA and CEQ’s implementing regulations.

See Marsh, 490 U.S. at 373-374; cf. National Wildlife Fed’n

v. Appalachian Reg’l Comm'n, 677 F.2d 883, 889 (D.C. Cir.

1981) (“Agency decisions setting limits to the scope of their

environmental review are * * * rightfully guided by the so-

called ‘rule of reason.’”). In this context, reasonableness

must be informed by the structure of our Government under

the Constitution and the allocation of responsibilities under

the applicable statutory scheme. No rule of reason inherent

in NEPA could require FMCSA, a subordinate agency of the

Executive Branch, to prepare an EIS pertaining to either (1)

a decision committed to the President, who is not covered by

NEPA, or (2) hypothetical action by FMCSA, in contra-

vention of both 49 U.S.C. 13902(a)(1) and the President’s

determination to open the border, effectively to refuse to

process and grant applications filed by eligible Mexican

carriers that seek to provide cross-border services.

The EIS process ordered by the court of appeals would

further delay the eventual removal of a trade moratorium

that is harming consumers and causing conflict with the gov-

ernment of Mexico. See Pet. 24-26. There also is a

substantial expense associated with preparing an EIS that |

addresses the border opening.” Those substantial costs are

not justified by any commensurate benefit in “help[ing]

public officials make decisions.” 40 C.F.R. 1500.1(c) (de-

review are required. See JNS v. Ventura, 537 U.S. 12, 16 (2002) (dis-

cussing “the basic legal principles that govern remand” following court of

appeals’ determination of agency error).

15 FMCSA has entered into a contract with a vendor for the pre-

paration of the EIS and CAA analysis mandated by the court of appeals.

DOT advises that it now expects its total payments under the contract to

be at least $2.25 million, if that analysis is required.

38

scribing purposes of NEPA). FMCSA has no responsibility

for the trade action to which the EIS would relate.”

Numerous other lines of authority point to the same con-

clusion. In Aberdeen & Rockfish Railroad v. SCRAP, 422

U.S. 289 (1975), for example, this Court made clear that an

agency is not required to prepare an EIS if the EIS would be

superfluous and serve “no purpose” in light of the NEPA

scheme as a whole. /d. at 325. CEQ’s implementing regula-

tions are to the same effect, stating that “NEPA documents

must concentrate on the issues that are truly significant to

the action in question” and should not “amass[] needless de-

tail” concerning matters that are insignificant to the par-

ticular agency action. 40 C.F.R. 1500.l(b); see 40 C.F.R.

1500.1(c) (“NEPA’s purpose is not to generate paper-

work—even excellent paperwork—but to foster excellent

action.”). Requiring FMCSA to spend millions of dollars to

study the potential effects of a decision that has already been

made and over which FMCSA has no control would serve

“no purpose” and constitute nothing more than “amassing

needless detail.” NEPA does not require such a pointless

exercise.

16 As the court of appeals observed (Pet. App. 31a), NEPA requires

federal agencies to comply with the EIS requirement “to the fullest extent

possible.” 42 U.S.C. 4332. That does not support respondents’ position in

this case, however. Congress included that language in NEPA to “make it

clear that each agency of the Federal Government shall comply with the

directives set out in [42 U.S.C. 4332(2)(C)] unless the existing law applica-

ble to such agency’s operations expressly prohibits or makes ful]

compliance * * * impossible.” Flint Ridge Dev. Co. v. Scenic Rivers

Ass'n, 426 U.S. 776, 787-788 (1976) (quoting 115 Cong. Rec. 39,703 (1969)).

There is no dispute here that FMCSA must apply NEPA. Similarly, the

court of appeals’ decision is not bolstered by Congress’s statutory

clarification that NAFTA implementation is subject to the Nation’s

environmental laws. 19 U.S.C. 3312(a); see Pet. App. 7a-8a. The issue is

what NEPA requires, not whether NEPA applies to NAFTA imple-

mentation.

39

Moreover, in a uniform line of cases involving ministerial

or otherwise nondiscretionary agency actions, the courts of

appeals have recognized that agency actions that do not

entail a significant exercise of discretion do not give rise to

NEPA obligations, because “the information that NEPA

provides can have no effect on the agency’s actions.”

Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267

F.3d 1144, 1151 (D.C. Cir. 2001); see, e.g., City of New York

v. Minet[]a, 262 F.3d 169, 177-178 (2d Cir. 2001); Sac & Fox

Nation v. Norton, 240 F.3d 1250 (10th Cir. 2001), cert.

denied, 534 U.S. 1078 (2002); American Airlines, Inc. v.

Department of Transp., 202 F.3d 788, 803 (5th Cir.), cert.

denied, 530 U.S. 1274 and 1284 (2000); Aircraft Owners &

Pilots Ass’n v. Hinson, 102 F.3d 1421, 1425-1426 (7th Cir.

1996); Sierra Club v. Babbitt, 65 F.3d 1502, 1512 (9th Cir.

1995); Goos v. ICC, 911 F.2d 1283, 1296 (8th Cir. 1990); Milo

Community Hosp. v. Weinberger, 525 F.2d 144, 148 (1st Cir.

1975). In this case, the ambit of FMCSA’s discretion was

confined to fashioning safety standards for Mexican carriers

that would satisfy Section 350 and FMCSA’s other statutory

mandates, on the assumption that the President would lift

the moratorium. FMCSA conducted its environmental-

effects analysis of the Application and Safety Monitoring

rules in that context and within the confines of its statutory

authority. FMSCA did not have discretion to countermand

any determination by the President that Mexican carriers

would no longer be barred, and it accordingly had no

obligation under NEPA to conduct an environmental

analysis as if that were an available option.

Finally, and in addition to its inconsistency with general

principles underlying NEPA, the court of appeals’ applica-

tion of NEPA in this case frustrates the operation of the

statutory provision that expressly grants the President

discretion to remove or modify the moratorium on cross-

border operations by Mexican motor carriers. Cf. Crosby,

40

530 U.S. at 374-377. Section 13902(c)(5) of Title 49 generally

requires the President to publish his determinations to alter

the moratorium in order to allow public comment. But if the

President “determines that expeditious action is required,”

the notice and comment requirement does not apply. 49

U.S.C. 13902(c)(5). In this case, the President determined

under Section 13902(c)(5) that the moratorium needed to be

modified expeditiously to comply with NAFTA and, accord-

ingly, the public comment requirement did not apply. Pet.

App. 233a. The court of appeals’ remand order effectively

overrides the President’s determination under Section -

13902(c)(5) that a public proceeding on the decision to open

the border, pursuant to NAFTA, is not warranted.

3. FMCSA Was Not Required To Undertake A “Cumu-

lative Impact” Analysis Addressing The Presi-

dent’s Border-Opening Decision

The court of appeals also erred in relying (Pet. App. 30a-

3la) on CEQ regulations addressing so-called “cumulative

impacts.” The regulations provide that agencies must con-

sider cumulative impacts, in addition to the direct and indi-

rect effects of a proposed action, in evaluating the effects of

the agency action. 40 C.F.R. 1508.25(c)(3), 1508.27(b)(7); see

Baltimore Gas & Elec. Co. v. Natural Resources Defense

Council, Inc., 462 U.S. 87, 106-107 (1983) (“NEPA requires

an EIS to disclose the significant * * * cumulative conse-

quences of the environmental impact of a proposed action”).

The regulations define “[cJumulative impact” as “the impact

on the environment which results from the incremental im-

pact of the action when added to other past, present, and

reasonably foreseeable future actions regardless of what

agency (Federal or non-Federal) or person undertakes such

other actions.” 40 C.F.R. 1508.7.

CEQ’s “cumulative impact” rules obligate agencies to con-

sider the environmental effects of their actions in con-

es

41

text—.e., in light of “other past, present, or reasonably fore-

seeable future actions” of the agency itself or other actors.

40 C.F.R. 1508.7. FMCSA therefore was required to con-

sider the effects of its Application and Safety Monitoring

Rules in light of the President’s foreseeable modification of

the trade moratorium. It does not follow, however, that

FMCSA had to treat the President’s trade action as its own

for purposes of NEPA analysis. Just the opposite is true.

The “cumulative impact” that FMCSA had to consider in-

volved the “incremental impact” of the safety rules them-

selves, in the context of the President’s border-opening deci-

sion and other relevant circumstances. 40 C.F.R. 1508.7.

Fulfilling that responsibility, FMCSA reasonably deter-

mined in the EA that its safety regulations would not result

in a cumulatively significant impact on air quality in the

only scenario in which they would have any consequential

effect—namely, upon removal] of the moratorium on cross-

border operations—because (1) the only increased emissions

resulting from the regulations would be the “negligible”

inspection-related emissions, and (2) the new safety regula-

tions might actually reduce emissions insofar as they could

lower the number of Mexican trucks conducting cross-border

operations in the United States. J.A. 166-167.

The court of appeals’ misapplication of CEQ’s “cumulative

impact” rules is clearly revealed in its conclusion that it was

“illogical” (Pet. App. 37a) for FMCSA to consider the possi-

bility that the new safety rules might reduce the number of

Mexican trucks operating in the United States and have an

incidental air-quality benefit, see p. 12, supra, while also

determining that any increase in air pollution associated

with the President’s border opening decision did not have to

be studied in an EIS. Under CEQ’s regulations, FMCSA

had to study “the incremental impact of the action” it pro-

posed to undertake. 40 C.F.R. 1508.7. The effects of the pro-

posed safety regulations therefore had to be (and were)

42

considered in light of the anticipated termination of the

prohibition on new grants of cross-border operating

authority, but the effects of that trade action did not them-

selves have to be the subject of an EIS prepared by FMCSA

because the lifting of the moratorium was not an action of

FMCSA. FMCSA could properly take that supervening ac-

tion by the President, and its environmental effects, as a

given in determining what safety standards should be im-

posed when the President lifted the moratorium.

* * x * *

The core question in considering whether to prepare an

EIS is whether the agency’s proposed action would “signifi-

cantly affect{] the quality of the human environment.” 42

U.S.C. 4332(2)(C). Here, FMCSA reasonably determined,

after the exhaustive analysis described in the EA, that the

Application and Safety Monitoring Rules will not have any

significant environmental effect. It was not arbitrary or

capricious for FMCSA to decline to undertake the massive

environmental review suggested by respondents and

ordered by the court of appeals.

Il. FMCSA’S SAFETY RULEMAKINGS ARE NOT

SUBJECT TO THE CONFORMITY-REVIEW RE-

QUIREMENTS OF THE CLEAN AIR ACT

Under the Clean Air Act and implementing regulations

promulgated by the Environmental Protection Agency pur-

suant to 42 U.S.C. 7506(c)(4), a federal “department, agency

or instrumentality” generally may not “engage in, support in

any way or provide financial assistance for, license or permit,

or approve any activity” that violates an applicable State air-

quality implementation plan. 42 U.S.C. 7506(c)(1); 40 C.F.R.

93.150.’ In its rulemaking decisions, FMCSA determined

17 The FMCSA safety rulemakings in this case are subject to the

conformity-review provisions of 40 C.F.R. Part 93, Subpart B, not the

43

that emissions attributable to the Application and Safety

Monitoring Rules (i.e., emissions from increased roadside

inspections of Mexican trucks) would be below threshold

emissions levels set by EPA and a full conformity review

under the Clean Air Act therefore was not required. Pet.

App. 65a-66a, 155a. The court of appeals concluded that

FMCSA must prepare a conformity determination that

addresses the border opening in order to satisfy the CAA

and EPA’s implementing regulations. Jd. at 46a-52a. The

court’s CAA analysis rested on essentially the same reason-

ing as its NEPA analysis, and it is similarly incorrect.

A. Presidential Action Is Exempt From The Confor-

mity-Review Requirement

Just as the President is not a “federal agency” under

NEPA and the APA, see Point I.A.1., swpra, he is not a “de-

partment, agency, or instrumentality of the Federal Gov-

ernment” under the CAA and, therefore, the Presidential

action to open the border is exempt from the conformity-re-

view requirement. Actions of the President have never been

held subject to the conformity-review requirement. Fur-

thermore, the terms “department,” “agency,” and “instru-

mentality” are used elsewhere in the CAA in contexts that

make clear that they do not encompass individual federal

officers, much less the President himself. See 42 U.S.C.

7418(a) (imposing on “[eJach department, agency, and in-

strumentality of the executive, legislative, and judicial

branches of the Federal Government * * * and each officer,

agent, or employee thereof” a duty to comply with federal

and state air pollution laws), 7418(b) (allowing President to

“exempt any emission source of any department, agency, or

instrumentality in the executive branch”), 7604(e) (preserv-

special provisions governing conformity reviews for certain transportation

projects, 40 C.F.R. Pt. 51, Subpt. T. See 42 U.S.C. 7506(c)(2); 40 C.F.R.

93.153(a).

43

ing citizen enforcement rights “against the United States,

any department, agency, or instrumentality thereof, or any

officer, agent, or employee thereof”).

If the language of the CAA did not on its face establish

the President’s exempt status, the same conclusion would be

compelled in any event by Franklin, which provides that

“{ojut of respect for the separation of powers and the unique

constitutional position of the President, * * * textual

silence is not enough” to subject discretionary Presidential

decision-making to procedural requirements that are

enforceable by the courts. Franklin, 505 U.S. at 800-801.

Furthermore, although EPA’s implementing regulations do

not specifically address the President’s status under Section

7506(c), those regulations use the term “federal agency” —

which does not naturally include the President—to encom-

pass the universe of all covered departments, agencies, and

instrumentalities of the federal government. 40 C.F.R.

93.152 (definition of “[fJederal [a]gency”). Similarly, in

promulgating its implementing rules, EPA explained that

the term “instrumentality,” as used in Section 7506(c),

serves merely to “includ[e] those Federal entities which are

not specifically linked to a ‘department’ or ‘agency,’ in-

cluding, for example, an independent Federal Commission.”

Determining Conformity of General Federal Actions to

State or Federal Implementation Plans, 58 Fed. Reg. 13,838

(1993).

For these reasons, the conformity-review requirement

does not apply to actions of the President. That rule is rein-

forced by the exemption of Presidential decision-making

from the judicial review provisions of the APA, which are

the basis for the instant litigation. See Franklin, 505 U.S. at

801.

45

B. Under EPA’s Implementing Rules, The Air-Quality

Effects Of Lifting The Trade Moratorium Are Not

Emissions Associated With FMCSA’s Safety Rule-

makings

EPA’s rules implementing the conformity-review re-

quirement. provide that “a conformity determination is re-

quired for each pollutant where the total of direct and indi-

rect emissions in a nonattainment or maintenance area

caused by a Federal action would equal or exceed” the

threshold levels established by EPA. 40 C.F.R. 93.153(b).

“Direct emissions” are defined as those covered emissions

“that are caused or initiated by the Federal action and occur

at the same time and place as the action.” 40 C.F.R. 93.152.

The term “indirect emissions” means covered emissions that:

(1) Are caused by the Federal action, but may occur

later in time and/or may be further removed in distance

from the action itself but are still reasonably forseeable;

and

(2) The Federal agency can practicably control and

will maintain control over due to a continuing program

responsibility of the Federal agency.

40 C.F.R. 93.152.

In discussing those definitions, the court of appeals relied

(Pet. App. 49a) on EPA’s further clarification that “/cJawsed

by, as used in the terms ‘direct emissions’ and ‘indirect emis-

sions,’ means emissions that would not otherwise occur in

the absence of the Federal action,” 40 C.F.R. 93.152. Echo-

ing its earlier NEPA analysis, the court erroneously con-

cluded that a “but for” relationship between an agency action

and particular air emissions makes those emissions attri-

butable to the agency action for purposes of the CAA’s

conformity-review requirement. Pet. App. 47a, 49a. The

court overlooked that any motor carrier emissions associated

with lifting the moratorium on cross-border operations were

46

not cognizable in FMCSA’s conformity review in any event,

because they were ex: uded by other elements of EPA’s

definitions of “direct emissions” and “indirect emissions.”

Vehicle emissions that result from allowing Mexican

motor carriers to apply for operating authority to provide

cross-border services are not “direct emissions” of FMCSA’s

regulations because they do not “occur at the same time and

place” as FMCSA’s safety program. 40 C.F.R. 93.152. Nor

do the truck emissions qualify as “indirect emissions” under

EPA’s definition; they are not emissions that FMCSA “can

practicably control and will maintain control over due to a

continuing program responsibility of the Federal agency.”

40 C.F.R. 93.152. FMCSA has no control over the Pre-

sident’s decision to lift the moratorium on cross-border

operations by Mexican motor carriers, no significant ability

to control the emissions of Mexican motor carriers engaged

in cross-border operations, and no “continuing program re-

sponsibility” for those emissions.

When it issued its regulations implementing the confor-

mity-review requirement, EPA determined that it was not

“reasonable to conclude,” under 42 U.S.C. 7506(c)(1), that a

Federal agency “supports” activities or emissions over which

the agency has no practicable control “based on the mere

fact that, if one inspects the ‘causal’ chain of events, the ac-

tivity or emissions can be described as being a ‘reasonably

foreseeable’ result of the agency’s actions.” Determining

Conformity of General Federal Actions to State or Federal

Implementation Plans, 58 Fed. Reg. 63,214, 63,220 (1993).

That interpretation, which is entitled to judicial deference

and the D.C. Circuit has upheld, see Environmental Def.

Fund, Inc. v. EPA, 82 F.3d 451, 464 (per curiam), amended,

47

92 F.3d 1209 (D.C. Cir. 1996), compels reversal of the court

of appeals’ ruling on the CAA issue.”

* * >” * *

The practical harm of the court of appeals’ incorrect CAA

ruling may be even greater than the harm of its NEPA rul-

ing. The conformity analysis contemplated by the court of

appeals would require FMCSA to examine the potential im-

pact of lifting the moratorium in scores of air quality control

regions throughout the United States. If FMCSA were re-

quired to complete such an analysis, and if it concluded that

the President’s decision to open United States markets to

Mexican carriers will cause an increase in air emissions

above regulatory thresholds in any of the studied regions,

then FMCSA would not be able to promulgate its safety

rules—and the President’s effort to bring the United States

into compliance with its obligations under NAFTA and the

arbitration decision of February 2001 would be further

delayed—unless “conformity” to state air-quality plans

somehow could be achieved. 42 U.S.C. 7506(c)(1)(B). Yet

FMCSA has no authority to undo or alter the President’s

trade decision, or to regulate corresponding emissions. The

obvious gap between the broad, foreign policy-related

remedy respondents seek and FMCSA’s very limited ability

18 In addition to its incorrect determination that the EA’s “distinction

between the effects of the [safety] regulations themselves and the effects

of the presidential rescission of the moratorium on Mexican truck entry” is

“illusory,” the court of appeals expressed the view that “methodological

flaws” in the EA, such as FMCSA’s failure to analyze the truck emissions

“on a local or regional basis,” compromised the conformity analysis. Pet.

App. 47a. Because FMCSA was not required to consider the truck

emissions resulting from cross-border operations in its CAA conformity

review at all, methodological issues concerning how the truck emissions

should be analyzed cannot be a basis for overturning the agency’s

conformity determination.

. 48

to address CAA issues through its safety rulemakings

reinforces the conclusion that FMCSA’s determination of the

proper scope of its CAA review was not arbitrary or

capricious.

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted.

THEODORE B. OLSON

JEFFREY A. ROSEN Solicitor General

General Counsel THOMAS L. SANSONETTI

PAUL M. GEIER Assistant Attorney General

Assistant General Counsel

EDWIN S. KNEEDLER

for Litigation THOMAS G. HUNGAR

PETER J. PLOCKI Deputy Solicitors General

Senior Trial Attorney

BRIGHAM A. MCCOWAN —— — ye

Chief Counsel y ta a 5 eau

MICHAELJ. FALK

Acting Assistant Chief aay eet es Py

Counsel General

Federal Motor Carrier Safety

Administration JOHN L. SMELTZER

Department of Transportation DAVID C. SHILTON

Attorneys

JOHN K. VERONEAU

General Counsel

Office of the United States

Trade Representative

Executive Office of the

President

FEBRUARY 2004

APPENDIX

STATUTES AND REGULATIONS INVOLVED

1. Administrative Procedure Act

Section 706 of Title 5 of the United States Code provides:

To the extent necessary to decision and when presented,

the reviewing court shall decide all relevant questions of law,

interpret constitutional and statutory provisions, and deter-

mine the meaning or applicability of the terms of an agency

action. The reviewing court shall—

(1) compel agency action unlawfully withheld or unrea-

sonably delayed; and

(2) hold unlawful and set aside agency action, findings,

and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege,

or immunity;

(C) in excess of statutory jurisdiction, authority, or

limitations, or short of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case

subject to sections 556 and 557 of this title or otherwise

reviewed on the record of an agency hearing provided

by statute; or

(F) unwarranted by the facts to the extent that the

facts are subject to trial de novo by the reviewing

court.

In making the foregoing determinations, the court shall re-

view the whole record or those parts of it cited by a party,

(la)

2a

and due account shall be taken of the rule of prejudicial er-

ror.

2. National Environmental Policy Act

a. Section 4332 of Title 42 of the United States Code pro-

vides in pertinent part:

The Congress authorizes and directs that, to the fullest

extent possible: (1) the policies, regulations, and public laws

of the United States shall be interpreted and administered in

accordance with the policies set forth in this chapter, and (2)

all agencies of the Federal Government shal]—

(A) utilize a systematic, interdisciplinary approach

which will insure the integrated use of the natural and so-

cial sciences and the environmental design arts in plan-

ning and in decisionmaking which may have an impact on

man’s environment;

(B) identify and develop methods and procedures, in

consultation with the Council on Environmental Quality

established by subchapter II of this chapter, which will

insure that presently unquantified environmental ameni-

ties and values may be given appropriate consideration in

decisionmaking along with economic and technical consid-

erations;

(C) include in every recommendation or report on

proposals for legislation and other major Federal actions

significantly affecting the quality of the human environ-

ment, 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,

3a

(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 commit-

ments of resources which would be involved in the

proposed action should it be implemented.

Prior to making any detailed statement, the responsible

Federal official shal] consult with and obtain the comments

of any Federal agency which has jurisdiction by law or spe-

cial expertise with respect to any environmental impact in-

volved. Copies of such statement and the comments and

views of the appropriate Federal, State, and local agencies,

which are authorized to develop and enforce environmental

standards, shall be made available to the President, the

Council on Environmental Quality and to the public as pro-

vided by section 552 of title 5, and shall accompany the pro-

posal through the existing agency review processes{[.]

b. Section 1508.7 of Title 40 of the Code of Federal

Regulations provides:

Cumulative impact is the impact on the environment

which results from the incremental impact of the action

when added to other past, present, and reasonably foresee-

able future actions regardless of what agency (Federal or

non-Federal) or person undertakes such other actions. Cu-

mulative impacts can result from individually minor but col-

lectively significant actions taking place over a period of

time.

4a

ce. Section 1508.8 of Title 40 of the Code of Federal

Regulations provides:

Effects include:

(a) Direct effects, which are caused by the action and oc-

cur at the same time and place.

(b) Indirect effects, which are caused by the action and

are later in time or farther removed in distance, but are still

reasonably foreseeable. Indirect effects may include growth

inducing effects and other effects related to induced changes

in the pattern of land use, population density or growth rate,

and related effects on air and water and other natural sys-

tems, including ecosystems.

Effects and impacts as used in these regulations are syn-

onymous. Effects includes ecological (such as the effects on

natural resources and on the components, structures, and

functioning of affected ecosystems), aesthetic, historic, cul-

tural, economic, social, or health, whether direct, indirect, or

cumulative. Effects may also include those resulting from

actions which may have both beneficial and detrimental ef-

fects, even if on balance the agency believes that the effect

will be beneficial.

d. Section 1508.12 of Title 40 of the Code of Federal

Regulations provides:

Federal agency means all agencies of the Federal Gov-

ernment. It does not mean the Congress, the Judiciary, or

the President, including the performance of staff functions

for the President in his Executive Office. It also includes for

purposes of these regulations States and units of general lo-

cal government and Indian tribes assuming NEPA responsi-

bilities under section 104(h) of the Housing and Community

Development Act of 1974.

da

e. Section 1508.25 of Title 40 of the Code of Federal

Regulations provides:

Scope consists of the range of actions, alternatives, and

impacts to be considered in an environmental impact state-

ment. The scope of an individual statement may depend on

its relationships to other statements (Secs. 1502.20 and

1508.28). To determine the scope of environmental impact

statements, agencies shall consider 3 types of actions, 3

types of alternatives, and 3 types of impacts. They include:

(a) Actions (other than unconnected single actions) which

may be:

(1) Connected actions, which means that they are closely

related and therefore should be discussed in the same impact

statement. Actions are connected if they:

(i) Automatically trigger other actions which may re-

quire environmental impact statements.

(ii) Cannot or will not proceed unless other actions are

taken previously or simultaneously.

(iii) Are interdependent parts of a larger action and de-

pend en the larger action for their justification.

(2) Cumulative actions, which when viewed with other

proposed actions have cumulatively significant impacts and

should therefore be discussed in the same impact statement.

(3) Similar actions, which when viewed with other rea-

sonably foreseeable or proposed agency actions, have simi-

larities that provide a basis for evaluating their environ-

mental consequences together, such as common timing or

geography. An agency may wish to analyze these actions in

the same impact statement. It should do so when the best

way to assess adequately the combined impacts of similar

actions or reasonable alternatives to such actions is to treat

them in a single impact statement.

6a

(b) Alternatives, which include:

(1) No action alternative.

(2) Other reasonable courses of actions.

(3) Mitigation measures (not in the proposed action).

(c) Impacts, which may be: (1) Direct; (2) indirect; (3)

cumulative.

3. Clean Air Act

a. Section 7506(c)(1) of Title 42 of the United States Code

provides:

No department, agency, or instrumentality of the Federal

Government shall engage in, support in any way or provide

financial assistance for, license or permit, or approve, any

activity which does not conform to an implementation plan

after it has been approved or promulgated under section

7410 of this title. No metropolitan planning organization

designated under section 134 of title 23, shall give its ap-

proval to any project, program, or plan which does not con-

form to an implementation plan approved or promulgated

under section 7410 of this title. The assurance of conformity

to such an implementation plan shall be an affirmative re-

sponsibility of the head of such department, agency, or in-

strumentality. Conformity to an implementation plan

means—

(A) conformity to an implementation plan’s purpose

of eliminating or reducing the severity and number of

violations of the national ambient air quality standards and

achieving expeditious attainment of such standards; and

(B) that such activities will not—

(i) cause or contribute to any new violation of

any standard in any area;

7a

(ii) inerease the frequency or severity of any

existing violation of any standard in any area; or

(iii) delay timely attainment of any standard or

any required interim emission reductions or other

milestones in any area.

The determination of conformity shall be based on the most

recent estimates of emissions, and such estimates shall be

determined from the most recent population, employment,

travel and congestion estimates as determined by the met-

ropolitan planning organization or other agency authorized

to make such estimates.

b. Section 93.150 of Title 40 of the Code of Federal

Regulations provides:

(a) No department, agency or instrumentality of the Fed-

eral Government shall engage in, support in any way or pro-

vide financial assistance for, license or permit, or approve

any activity which does not conform to an applicable imple-

mentation plan.

(b) A Federal agency must make a determination that a

Federal action conforms to the applicable implementation

plan in accordance with the requirements of this subpart be-

fore the action is taken.

(c) Paragraph (b) of this section does not include Federal

actions where:

(1) A National Environmental Policy Act (NEPA) analy-

sis was completed as evidenced by a final environmental as-

sessment (EA), environmental impact statement (EIS), or

finding of no significant impact (FONSI) that was prepared

prior to January 31, 1994; or

(2)i) Prior to January 31, 1994, an environmental analy-

sis was commenced or a contract was awarded to develop the

specific environmental analysis;

8a

(i) Sufficient environmental analysis is completed by

March 15, 1994 so that the Federal agency may determine

that the Federal action is in conformity with the specific re-

quirements and the purposes of the applicable SIP pursuant

to the agency’s affirmative obligation under section 176(c) of

the Clean Air Act (Act); and

(iii) A written determination of conformity under section

176(c) of the Act has been made by the Federal agency re-

sponsible for the Federal action by March 15, 1994.

(d) Notwithstanding any provision of this subpart, a de-

termination that an action is in conformance with the appli-

cable implementation plan does not exempt the action from

any other requirements of the applicable implementation

plan, the National Environmental Policy Act (NEPA), or the

Clean Air Act (Act).

ce. Section 93.152 of Title 40 of the Code of Federal

Regulations provides in pertinent part:

Direct emissions means those emissions of a criteria pol-

lutant or its precursors that are caused or initiated by the

Federal action and occur at the same time and place as the

action.

* * * * *

Indirect emissions means those emissions of a criteria

‘pollutant or its precursors that:

(1) Are caused by the Federal action, but may occur later

in time and/or may be further removed in distance from the

action itself but are still reasonably foreseeable; and

(2) The Federal agency can practicably control and wil!

maintain control over due to a continuing program responsi-

bility of the Federal agency.

9a

4. ICC Termination Act of 1995, Pub. L. No. 104-88,

as Amended

Section 13902 of Title 49 of the United States Code pro-

vides in pertinent part:

(a) MOTOR CARRIER GENERALLY.—

(1) IN GENERAL.—Except as provided in this section,

the Secretary shall register a person to provide

transportation subject to jurisdiction under subchapter I

of chapter 135 of this title as a motor carrier if the

Secretary finds that the person is willing and able to

comply with—

(A) this part and the applicable regulations of the

Secretary and the Board;

(B) any safety regulations imposed by the Secretary

and the safety fitness requirements established by the

Secretary under section 31144; and

(C) the minimum financial responsibility require-

ments established by the Secretary pursuant to

sections 13906 and 31138.

(2) CONSIDERATION OF EVIDENCE; FINDINGS.—The

Secretary shall consider and, to the extent applicable, make

findings on, any evidence demonstrating that the registrant

is unable to comply with the requirements of subparagraph

(A), (B), or (C) of paragraph (1).

(3) WITHHOLDING.—If the Secretary determines that

any registrant under this section does not meet the

requirements of paragraph (1), the Secretary shall withhold

registration.

(4) LIMITATION ON COMPLAINTS.—The Secretary may

hear a complaint from any person concerning a registration

under this subsection only on the ground that the registrant

10a

fails or wiil fail to comply with this part, the applicable

regulations of the Secretary and the Board, the safety regu-

lations of the Secretary, or the safety fitness or minimum

financial responsibility requirements of paragraph (1) of this

subsection.

x * *x * *

(ec) RESTRICTIONS ON MOTOR CARRIERS DOMICILED

IN OR OWNED OR CONTROLLED BY NATIONALS OF A

CONTIGUOUS FOREIGN COUNTRY.—

(1) PREVENTION OF DISCRIMINATORY PRACTICES.

—If the President, or the delegate thereof, determines

that an act, policy, or practice of a foreign country

contiguous to the United States, or any political

subdivision or any instrumentality of any such country

is unreasonable or discriminatory and burdens or

restricts United States transportation companies pro-

viding, or seeking to proide, motor carrier transporta-

tion to, from, or within such foreign country, the

President or such delegate may-

(A) seek elimination of such practices through

consultations; or

(B) notwithstanding any other provision of

law, suspend, modify, amend, condition, or restrict

operations, including geographical restriction of

operations, in the United States by motor carriers of

property or passengers domiciled in such foreign

country or owned or controlled by persons of such

foreign country.

(2) EQUALIZATION OF TREATMENT.—Any action

taken under paragraph (1)(A) to eliminate an act, policy,

or practice shall be so devised so as to equal te the

extent possible the burdens or restrictions imposed by

lla

such foreign country on United States transportation

companies.

(3) REMOVAL OR MODIFICATION.—The President,

or the delegate thereof, may remove or modify in whole

or in part any action taken under paragraph (1)(A) if the.

President or such delegate determines that such re-

moval or modification is consistent with the obligations

of the United States under a trade agreement or with

United States transportation policy.

(4) PROTECTION OF EXISTING OPERATIONS.—

Unless and until the President, or the delegate thereof,

makes a determination under paragraph (1) or (3),

nothing in this subsection shall affect-

(A) operations of motor carriers of property or

passengers domiciled in any contiguous foreign

country or owned or controlled by persons of any

contiguous foreign country permitted in the com-

mercial zones along the United States-Mexico bor-

der as such zones were defined on December 31,

1995; or

(B) any existing restrictions on operations of

motor carriers of property or passengers domiciled

in any contiguous foreign country or owned or con-

trolled by persons of any contiguous foreign coun-

try or any modifications thereof pursuant to section

6 of the Bus Regulatory Reform Act of 1982.

(5) PUBLICATION; COMMENT.—Unless the Pre-

sident, or the delegate thereof, determines that expedi-

tious action is required, the President shall publish in

the Federal Register any determination under para-

graph (1) or (3), together with a description of the facts

on which such a determination is based and any

proposed action to be taken pursuant to paragraph

12a

(1)(B) or (3), and provide an opportunity for public

comment.

(6) DELEGATION TO SECRETARY.—The President

may delegate any or all authority under this subsection

to the Secretary, who shall consult with other agencies

as appropriate. In accordance with the directions of the

President, the Secretary may issue regulations to en-

13a

United States-Mexico border until the Federal Motor Car-

rier Safety Administration—

(1A) requires a safety examination of such motor

carrier to be performed before the carrier is granted con-

ditional operating authority to operate beyond United

States municipalities and commercial zones on the United

States-Mexico border;

force this subsection.

(7) CIVIL ACTIONS.—Either the Secretary or the

Attorney General may bring a civil action in an

appropriate district court of the United States to

enforce this subsection or a regulation prescribed or

order issued under this subsection. The court may

award appropriate relief, including injunctive relief.

(8) LIMITATION ON STATUTORY CONSTRUCTION.

—This subsection shall not be construed as affecting the

requirement for all foreign motor carriers and foreign

motor private carriers operating in the United States to

comply with all applicable laws and regulations per-

taining to fitness, safety of operations, financial respon-

sibility, and taxes imposed by section 4481 of the Inter-

nal Revenue Code of 1986.

5. Department of Transportation and Related Agen-

cies Act, 2002

Section 350 of the Department of Transportation and Re-

lated Agencies Appropriations Act, 2002, Pub. L. No. 107-87,

115 Stat. 864, provides in pertinent part:

SAFETY OF CROSS-BORDER TRUCKING BE-

TWEEN UNITED STATES AND MEXICO. (a) No funds

limited or appropriated in this Act may be obligated or ex-

pended for the review or processing of an application by a

Mexican motor carrier for authority to operate beyond

United States municipalities and commercial zones on the

(B) requires the safety examination to include—

(i) verification of available performance data

and safety management programs;

(ii) verification of a drug and alcohol testing

program consistent with part 40 of title 49, Code of

Federal Regulations;

(iii) verification of that motor carrier’s system of

compliance with hours- of-service rules, including

hours-of-service records;

(iv) verification of proof of insurance;

(v) a review of available data concerning that

motor carrier’s safety history, and other information

necessary to determine the carrier’s preparedness to

comply with Federal Motor Carrier Safety rules and

regulations and Hazardous Materials rules and regula-

tions;

(vi) an inspection of that Mexican motor carrier’s

commercial vehicles to be used under such operating

authority, if any such commercial vehicles have not

received a decal from the inspection required in

subsection (a)(5);

(vii) an evaluation of that motor carrier’s safety

inspection, maintenance, and repair facilities or man-

l4a

agement systems, including verification of records of

periodic vehicle inspections;

(viii) verification of drivers’ qualifications, in-

cluding a confirmation of the validity of the Licencia de

Federal de Conductor of each driver of that motor car-

rier who will be operating under such authority; and

(ix) an interview with officials of that motor car-

rier to review safety management controls and evalu-

ate any written safety oversight policies and practices.

(C) requires that—

(i) Mexican motor carriers with three or fewer

commercial vehicles need not undergo on-site safety

examination; however 50 percent of all safety examina-

tions of all Mexican motor carriers shall be conducted

onsite; and

(ii) such on-site inspections shall cover at least 50

percent of estimated truck traffic in any year.

(2) requires a full safety compliance review of the

carrier consistent with the safety fitness evaluation pro-

cedures set forth in part 385 of title 49, Code of Federal

Regulations, and gives the motor carrier a satisfactory

rating, before the carrier is granted permanent operating

authority to operate beyond United States municipalities

and commercial zones on the United States-Mexico bor-

der, and requires that any such safety compliance review

take place within 18 months of that motor carrier being

granted conditional operating authority, provided that—

(A) Mexican motor carriers with three or fewer

commercial vehicles need not undergo onsite compli-

ance review; however 50 percent of all compliance re-

views of all Mexican motor carriers shall be conducted

on-site; and

lda

(B) any Mexican motor carrier with 4 or more

commercial vehicles that did not undergo an on-site

safety exam under (a)(1)(C), shall undergo an on-site

safety compliance review under this section.

(3) requires Federal and State inspectors to verify

electronically the status and validity of the license of each

driver of a Mexican motor carrier commercial vehicle

crossing the border;

(A) for every such vehicle carrying a plac-

ardable quantity of hazardous materials;

(B) whenever the inspection required in subsec-

tion (a)(5) is performed; and

(C) randomly for other Mexican motor carrier

commercial vehicles, but in no case less than 50 percent

of all other such commercial vehicles.

(4) gives a distinctive Department of Transportation

number to each Mexican motor carrier operating beyond

the commercial zone to assist inspectors in enforcing mo-

tor carrier safety regulations including hours-of-service

rules under part 395 of title 49, Code of Federal Regula-

tions;

(5) requires, with the exception of Mexican motor

carriers that have been granted permanent operating

authority for three consecutive years—

(A) inspections of all commercial vehicles of

Mexican motor carriers authorized, or seeking author-

ity to operate beyond United States municipalities and

commercial zones on the United States-Mexico border

that do not display a valid Commercial Vehicle Safety

Alliance inspection decal, by certified inspectors in ac-

cordance with the requirements for a Level I Inspec-

tion under the criteria of the North American Standard

16a

Inspection (as defined in section 350.105 of title 49,

Code of Federal Regulations), including examination of

the driver, vehicle exterior and vehicle under-carriage;

(B) aCommercial Vehicle Safety Alliance decal

to be affixed to each such commercial vehicle upon

completion of the inspection required by clause (A) or a

re-inspection if the vehicle has met the criteria for the

Level I inspection; and

(C) that any such decal, when affixed, expire at

the end of a period of not more than 90 days, but noth-

ing in this paragraph shall be construed to preclude the

Administration from requiring reinspection of a vehicle

bearing a valid inspection decal or from requiring that

such a decal be removed when a certified Federal or

State inspector determines that such a vehicle has a

safety violation subsequent to the inspection for which

the decal was granted.

(6) requires State inspectors who detect violations of

Federal motor carrier safety laws or regulations to en-

force them or notify Federal authorities of such violations;

(7(A) equips all United States-Mexico commercial

border crossings with scales suitable for enforcement ac-

tion; equips 5 of the 10 such crossings that have the high-

est volume of commercial vehicle traffic with weigh-in-

motion (WIM) systems; ensures that the remaining 5 such

border crossings are equipped within 12 months; requires

inspectors to verify the weight of each Mexican motor

carrier commercial vehicle entering the United States at

said WIM equipped high volume border crossings; and

(B) initiates a study to determine which other

crossings should also be equipped with weigh-in-motion

systems;

17a

(8) the Federal Motor Carrier Safety Administration

has implemented a policy to ensure that no Mexican mo-

tor carrier wil] be granted authority to operate beyond

United States municipalities and commercial zones on the

United States- Mexico border unless that carrier provides

proof of valid insurance with an insurance company li-

censed in the United States;

(9) requires commercial vehicles operated by a

Mexican motor carrier to enter the United States only at

commercial border crossings where and when a certified

motor carrier safety inspector is on duty and where

adequate capacity exists to conduct a sufficient number of

meaningful vehicle safety inspections and to accommodate

vehicles placed out-of-service as a result of said

inspections.

(10) publishes—

(A) interim final regulations under section 210(b)

of the Motor Carrier Safety Improvement Act of 1999

(49 U.S.C. 31144 note) that establish minimum re-

quirements for motor carriers, including foreign motor

carriers, to ensure they are knowledgeable about Fed-

eral safety standards, that may include the administra-

tion of a proficiency examination;

(B) interim final regulations under section 31148

of title 49, United States Code, that implement

measures to improve training and provide for the certi-

fication of motor carrier safety auditors;

(C) a policy under sections 218(a) and (b) of that

Act (49 U.S.C. 31133 note) establishing standards for

the determination of the appropriate number of Fed-

eral and State motor carrier inspectors for the United

States-Mexico border;

18a

(D) a policy under section 219(d) of that Act (49

U.S.C. 14901 note) that prohibits foreign motor carri-

ers from leasing vehicles to another carrier to trans-

port products to the United States while the lessor is

subject to a suspension, restriction, or limitation on its

right to operate in the United States; and

(E) a policy under section 219(a) of that Act (49

U.S.C. 14901 note) that prohibits foreign motor carri-

ers from operating in the United States that is found to

have operated illegally in the United States.

(b) No vehicles owned or leased by a Mexican motor car-

rier and carrying hazardous materials in a placardable quan-

tity may be permitted to operate beyond a United States

municipality or commercial zone until the United States has

completed an agreement with the Government of Mexico

which ensures that drivers of such vehicles carrying such

placardable quantities of hazardous materials meet substan-

tially the same requirements as United States drivers car-

rying such materials.

(c) No vehicles owned or leased by a Mexican motor car-

rier may be permitted to operate beyond United States mu-

nicipalities and commercial zones under conditional or per-

manent operating authority granted by the Federal Motor

Carrier Safety Administration until—

(1) the Department of Transportation Inspector Gen-

eral conducts a comprehensive review of border operations

within 180 days of enactment to verify that—

(A) all new inspector positions funded under this

Act have been filled and the inspectors have been fully

trained;

(B) each inspector conducting on-site safety com-

pliance reviews in Mexico consistent with the safety

fitness evaluation procedures set forth in part 385 of ti-

19a

tle 49, Code of Federal Regulations, is fully trained as a

safety specialist;

(C) the requirement of subparagraph (a)(2) has

not been met by transferring experienced inspectors

from other parts of the United States to the United

States-Mexico border, undermining the level of inspec-

tion coverage and safety elsewhere in the United

States;

(D) the Federal Motor Carrier Safety Admini-

stration has implemented a policy to ensure compliance

with hours-of-service rules under part 395 of title 49,

Code of Federal Regulations, by Mexican motor carri-

ers seeking authority to operate beyond United States

municipalities and commercial zones on the United

States-Mexico border;

(E) the information infrastructure of the Mexican

government is sufficiently accurate, accessible, and in-

tegrated with that of United States enforcement

authorities to allow United States authorities to verify

the status and validity of licenses, vehicle registrations,

operating authority and insurance of Mexican motor

carriers while operating in the United States, and that. __

adequate telecommunications links exist at all United

States-Mexico border crossings used by Mexican motor

carrier commercial vehicles, and in all mobile enforce-

ment units operating adjacent to the border, to ensure

that licenses, vehicle registrations, operating authority

and insurance information can be easily and quickly

verified at border crossings or by mobile enforcement

units;

(F) there is adequate capacity at each United

States-Mexico border crossing used by Mexican motor

carrier commercial vehicles to conduct a sufficient

20a

>

number of meaningful vehicle safety inspections and to

accommodate vehicles placed out-of-service as a result

of said inspections;

(G) there is an accessible database containing suf-

ficiently comprehensive data to allow safety monitoring

of all Mexican motor carriers that apply for authority

to operate commercial vehicles beyond United States

municipalities and commercial zones on the United

States-Mexico border and the drivers of those vehicles;

and

(H) measures are in place to enable United States

law enforcement authorities to ensure the effective en-

forcement and monitoring of license revocation and li-

censing procedures of Mexican motor carriers.

(2) The Secretary of Transportation certifies in

writing in a manner addressing the Inspector General’s

findings in paragraphs (c)(1)(A) through (c)(1)(H) of this

section that the opening of the border does not pose an un-

acceptable safety risk to the American public.

(d) The Department of Transportation Inspector General

shall conduct another review using the criteria in (c)(1)(A)

through (c)(1)(H) consistent with paragraph (c) of this sec-

tion, 180 days after the first review is completed, and at least

annually thereafter.

(e) For purposes of th’: section, the term “Mexican motor

carrier” shall be defined as a Mexico-domiciled motor carrier

operating beyond United States municipalities and commer-

cial zones on the United States-Mexico border.

(f) In addition to amounts otherwise made available in

this Act, to be derived from the Highway Trust Fund, there

is hereby appropriated to the Federal Motor Carrier Safety

Administration, $25,866,000 for the salary, expense, and

capital costs associated with the requirements of this section.