Petition for Writ of Certiorari — City of Austin v. Brownlee

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08 Hitege® BPR TEE

Supreme Court of the Anited States

CITY OF AUSTIN, MARIAN COLLINS, BARTON

SPRINGS-EDWARDS AQUIFER CONSERVATION

DISTRICT, and DAVID ROBERTSON,

Petitioners,

NORMAN MINETA, Secretary of Transportation,

MIKE LEAVITT, Administrator of Environmental

Protection Agency, LES BROWNLEE, Acting

Secretary of the Army, THE UNITED STATES,

and LONGHORN PARTNERS PIPELINE, L.P.,

Respondents.

On Petition For Writ Of Certiorari To The United

States Court Of Appeals For The Fifth Circuit

€

PETITION FOR WRIT OF CERTIORARI

CONNIE ODE RENEA HICKs*

P. O. Box 1574 LAW OFFICE OF MAX RENEA HICKS

El Prado, New Mexico 800 Norwood Tower

87529 114 West 7th Street

(505) 758-2203 Austin, Texas 78701

DAVID ALLAN SMITH (512) 480-8231

City Attorney, R. JAMES GEORGE, JR.

City of Austin BEN J. CUNNINGHAM,

114 West 7th Street, Of Counsel

Suite 500 GEORGE & BROTHERS, L.L.P.

Austin, Texas 78701 1100 Norwood Tower

(512) 974-2166 114 West 7th Street

ioe Austin, Texas 78701

Attorneys for Petitioner (512) 495-1400

City of Austin

Attorneys for Petitioners

Marian Collins, Barton

Springs-Edwards Aquifer

Conservation District,

and David Robertson

*Counsel of Record for Petitioners

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

Under governing regulations for the National Envi-

ronmental Policy Act, 42 U.S.C. §§ 4321 et seg. (NEPA),

promulgated by the Council on Environmental Quality

(CEQ), the framework of the NEPA process is that a major

federal action’s potential environmental impact is evalu-

ated initially by an environmental assessment (EA), which

results in either a finding of no significant impact (FONSI)

— at which point the NEPA process stops — or a determina-

tion that the action may significantly affect the environ-

ment, in which case a full environmental study called an

environmental impact statement (EIS) is conducted.

May federal agencies evade the CEQ regulations, and

still comply with NEPA’s statutory requirement that,

“to the fullest extent possible,” they conduct an EJS

whenever a major federal action may “significantly af-

fect[] the quality of the human environment,” 42

U.S.C. § 4332(C), by the purely bureaucratic device of

adding privately-negotiated mitigation measures to a

project whose impact ctherwise rises to the level of

“significance” that would trigger an EIS and, instead,

issuing a “mitigated FONSI” based on policy-dictated

estimations of acceptable societal risk rather than

fact-based determinations about “significance”?

In the absence of direction from statute or regulation,

what are the legal standards governing Remey ap-

proval of mitigated FONSIs?

LIST OF PARTIES

Appellants below:

CITY OF AUSTIN

and

MARIAN COLLINS; BARTON SPRINGS-EDWARDS AQUI-

FER CONSERVATION DISTRICT; DAVID ROBERTSON.

Appellees below:

THOMAS E. WHITE, in his official capacity as Acting Secre-

tary of the Department of Army; NORMAN Y. MINETA,

Secretary, Department of Transportation; CHRISTINE T.

WHITMAN, Administrator, United States Environmental

Protection Agency; UNITED STATES OF AMERICA,

and

LONGHORN PARTNERS PIPELINE, L.P.

ill

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW................. i

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CONSTITUTIONAL PROVISIONS AND STATUTES

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RARE EREEEIN © OF THIEL CABD........:00cercssccocsccsccssccconenses

II.

The extra-legal bureaucratic pressures for

mitigated FONSIs have not so overwhelmed

NEPA’s statutory and regulatory procedures

that the policymaking weighing of risks and

benefits that is reserved for the end of the EIS

process may be substituted for fact-based de-

terminations of “significance” at the EA phase.

The court should act to resolve the conflict

between the Second and Fifth Circuits on the

standard to be used for evaluating significance

determinations at the EA phase in the era of

IE SPI cc onntnccnkesakcacessdenssgveccsscsacnactens

SEE a OO

TABLE OF AUTHORITIES

Page

CASES

Andrus v. Sierra Club, 442 U.S. 347 (1979).........ccc eee eee 10

Davis v. Mineta, 302 F.3d 1104 (10th Cir. 2002)............... 10

Deukmejian v. NRC, 751 F.2d 1287 (D.C. Cir. 1984)........ 10

Marsh v. Oregon Natural Resources Council, 490

Res Se IEEE insivcininionuipncnananciascendoumauiaibinmidatenians 9,14

National Audubon Soc’y v. Hoffman, 132 F.3d 7 (2d

SUED: HEIPTED isidinsnansadatsskateissindiaddasiadavesabituecdakomaidcanaetains 18

Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726

SUUIUIE ssadatictucaniahiiesnacomsncadtncsdliasisaiadiiaabibinaansaiderticiadiia: 12

Robertson v. Methow Valley Citizens Council, 490

i EE TEE siervidilbucsh ac bnscsoaniéainitaeunbaccaskaauctecean 9, 12,13

Spiller v. White, 352 F.3d 235 (5th Cir. 2003).........0...0..... 1

STATUTES AND REGULATIONS

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TABLE OF AUTHORITIES — Continued

Page

OTHER AUTHORITIES

46 Fed.Reg. 18,026 (March 23, 1981), “Forty Most

Asked Questions Concerning CEQ’s National

Environmental Policy Act Regulations”.................. 10,

51 Fed.Reg. 15,621 (April 25, 1986) ...............cccccccssssssseees

Blumm, M., A Primer on Environmental Law and

Some Directions for the Future, 11 VA. ENVTL.

Bids Se AIMED chk ieiokscanovacesedssiicaeitinn caemanee

Karkkainen, B., Toward a Smarter NEPA: Monitor-

ing and Managing Government’s Environmental

Performance, 102 COLUM. L. REV. 903 (2002) .................

Mandelker, D.R., NEPA LAW AND LITIGATION

(2d ed. 1995)

FGI OE settieriisstsisneriniiacilamadae ee

©} RAINE tixcnsiietisinincioiiualaamea enone

Rogers, W., The Most Creative Moments in the

History of Environmental Law: “The Whats,”

eee WU. Tike Es TV. Bt issstsiseisdeseatcctietcs

Modernizing NEPA Implementation, The NEPA

Task Force Report to the Council on Environ-

CREE IE iii aa ee

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he nt

PETITION FOR WRIT OF CERTIORARI

The City of Austin (City), Marian Collins, the Barton

Springs-Edwards Aquifer Conservation District, and David

Robertson (collectively, the Collins petitioners) petition the

Court to issue a writ of certiorari to review a judgment of

the United States Court of Appeals for the Fifth Circuit.

OPINIONS BELOW

The opinion of the court of appeals is published as

Spiller v. White, 352 F.3d 235 (5th Cir. 2003), and re-

printed at App. la-19a. The unpublished court of appeals

order denying the petition for rehearing is at App. 97a-

98a. The final order of the United States District Court for

the Western District of Texas :s not reported in the official

reporters; it is reprinted at App. 20a-66a. The final deci-

sion of the joint lead federal agencies — the United States

Environmental Protection Agency (EPA) and the United

States Department of Transportation (DOT) —- is not

officially reported; it is reprinted at App. 67a-96a.

JURISDICTION

The court of appeals opinion and judgment issued on

December 12, 2003. App. la-2la. The court of appeals

denied the City and Collins petitioners’ joint motion for

rehearing on January 12, 2004. App. 97a-98a. This Court’s

jurisdiction is timely invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED IN THE CASE

In pertinent part, 5 U.S.C. § 706(2) provides:

The reviewing court shall ... 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;

or limitations, or short of statutory right;

(D) without observance of procedure required

by law;

In making the foregoing determinations, the

court shall review the whole record or those parts

of it cited by a party, and due account shall be

taken of the rule of prejudicial error.

In pertinent part, 42 U.S.C. § 4332(C)(2) provides:

The Congress authorizes and directs that, to the

fullest extent possible . . . all agencies of the Fed-

eral Government shall

include in every recommendation or report on

proposals for legislation and other major Federal

actions significantly affecting the quality of the

human environment, a detailed statement by the

responsible official on —

(i) the environmental impact of the proposed

action,

(ii) any adverse environmental effects which

cannot be avoided should the proposal be imple-

mented,

(iii) alternatives to the proposed action,

(iv) the relationship between local short-term

uses of man’s environment and the maintenance

and enhancement of long-term productivity, and

(v) any irreversible and irretrievable commit-

ments of resources which would be involved in

the proposed action should it be implemented.

STATEMENT OF THE CASE

In 1997, Longhorn Partners Pipeline, L.P., a private,

limited liability company, purchased an already half-

century old, 450-mile mothballed pipeline that had experi-

enced frequent spills and leaks — 173 according to the

district court. App. 22a, 69a, 76a. Longhorn linked the old

line with a new 250-mile segment and planned to convert

it from shipping crude oil east to shipping gasoline, jet

fuel, and other petroleum products from Texas Gulf Coast

refineries west to El] Paso, at the western edge of Texas.’

The resulting pipeline — the Longhorn Pipeline — runs

more than 700 miles across Texas, slicing through densely

populated Austin neighborhoods and across vast, pristine

ground and surface water sources that provide drinking

' More than half of the old segment of the Longhorn line is pre-

1970 electronic resistance welded pipe, an inferior type of pipe that is

the subject of government advisories warning of its higher susceptibil-

ity to certain failure mechanisms.

water for hundreds of thousands of Texans. Longhorn

intends to ship 10 million gallons of pressurized gasoline

and jet fuel a day through the old pipe, crossing city parks,

residential backyards, rivers and streams, wetlands,

recharge zones for sensitive aquifers, and working

ranches.

Local governments in Central Texas — the City of

Austin, the Barton Springs-Edwards Aquifer Conservation

District, and the Lower Colorado River Authority’ — joined

with affected private landowners, including rancher

Marian Collins and Law Professor David Robertson, who

sued to stop the pipeline’s start-up until it had been

evaluated under NEPA. The federal district court enjoined

Longhorn’s operation until either DOT or EPA had com-

pleted an environmental impact statement (EIS) under

NEPA. App. 139a-140a.°

Longhorn promptly sought, but was denied, an emer-

gency stay from the Fifth Circuit. App. 155a. Lengthy

negotiations ensued, resulting in a first-phase settlement

agreement whereby the government and Longhorn dis-

missed their appeals, and EPA and DOT were to jointly

conduct an EA. App. 156a-184a. The EA, in turn, was to

result in either a FONSI or a decision to conduct a more

comprehensive EIS. App. 161a.‘ While the parties agreed

that a mitigated FONSI was a possibility, any such result

? The Lower Colorado River Authority has resolved its dispute with

Longhorn and is no longer in the case.

* The district court permitted Longhorn to proceed with construc-

tion, but at its own risk.

* The settlement agreement also permitted the government to

move to the EIS phase at any point during the EA phase. App. 161a.

ap 05 tS Set bas ALD BO OOS Oe

had to comply with NEPA and CEQ regulations. App.

157a, 161a.

The district court approved the settlement in early

March of 1999 in an agreed order that prevented Long-

horn’s operation until completion of the government

environmental studies under the agreement. App. 185a-

188a.

EPA and DOT issued a draft EA in the fall of 1999,

preliminarily concluding that the pipeline’s operation was

not likely to pose a significant threat to the environment

and recommending a FONSI. Public meetings on the draft

EA then were conducted in Houston, Austin, and El Paso,

as well as two smaller Texas cities.” More than 6,000

written comments were submitted, overwhelmingly

opposing the pipeline’s operation across its chosen route.

App. 73a.

Outside the public forums, the government engaged in

private negotiations with Longhorn. As the ink dried on

the first-phase settlement agreement, the chief NEPA

policy arm for the White House, the Council on Environ-

mental Quality (CEQ), began pressing the lead agencies

and Longhorn to reach an accommodation. CEQ’s chief

day-to-day official on the Longhorn matter worked to have

them stop short of recommending a full EIS for the Long-

horn line and, instead, issue a mitigated FONSI. Ray

Clark Depo., p. 30; p. 150.

EPA and DOT conducted extensive private negotia-

tions with Longhorn to find a balance that let Longhorn

® Over 1,000 people attended the Austin meeting. App. 71a.

have its project along its chosen route while giving the

government something — in the form of a list of mitigation

measures — to tout as environmental improvement.’ By the

time the NEPA process ended, these negotiations had

yielded twenty-one distinct versions of mitigation plans

proposed by Longhorn, the most significant of which were

negotiated after the close of the public comment period.

App. 75a n.4.

Key to the private negotiations between Longhorn and

the government was EPA's decision to enter into a consulta-

tion agreement with the United States Fish and Wildlife

Service under Section 7 of the Endangered Species Act, 16

U.S.C. § 1536(a), over the pipeline’s threat to endangered

species in the Austin area, at Barton Springs. With EPA’s

designation of Longhorn as its federal representative in the

process, the endangered species consultation effectively

excluded the public, the City of Austin, and the Collins

petitioners, leaving only Longhorn and the federal agencies

to hammer out the details of acceptable mitigation.

Nonetheless, by the summer of 2000, DOT and EPA’

reached an impasse on whether to conduct an EIS or,

instead, stop at an EA and issue a FONSI. In mid-July,

they wrote CEQ, declared the impasse — with EPA favor-

ing an EIS, and DOT opposed — and requested CEQ’s

* The agencies repeatedly acceded to Longhorn rejections of

agency-proposed mitigation measures based on the government's

negotiating position that it could impose only the items that Longhorn

agreed to. App. 75a.

7 BPA was the lead agency charged with “overseeing environmental

impact analyses.” App. 157a. DOT was charged with “overseeing

pipeline safety and technology.” Id.

assistance in resolving the “novel and difficult issues

raised” by the Longhorn Pipeline dispute and the “policy

choice” it had placed in the agencies’ laps. App. 189a-191a.

CEQ’s response to the EPA/DOT impasse letter was to

“recommend” issuance of a FONSI by mid-October, 2000.

App. 192a-196a. The lead agencies complied, issuing the

final EA and FONSI on November 3rd.

The FONSI concluded that, without improvements,

the impacts of the pipeline — which could be expected to

experience a higher failure rate than an average pipeline,

App. 7la — would be significant and an EIS required:

“[Mlitigation measures are necessary reduce the poten-

tial impacts of the proposed project to a level of insignifi-

cance.” Final EA, ES-22 & 9-1 (emphasis added). The

federal agencies concluded, however, that the long-running

private negotiations between them and Longhorn, and the

twenty-one mitigation plans that had passed back and

forth, had yielded a pipeline mitigation plan they could

live with: “The mitigation measures Longhorn will imple-

ment if a FNSI is issued will minimize the potential risks

of its project to an insignificant level.” App. 95a.

The agencies’ decision to stop at a FONSI rested on

highly uncertain estimated probabilities for particular

environmental impacts during the pipeline’s anticipated

50-year operational life (at the end of which most of it

would be more than a century old). App. 84a-92a (details of

calculations of “residual risk”). Their estimate was that,

during this time span, there is at least a 15.3% probability

of stream, wetland, or public drinking water supply

contamination, or death or injury to one or more persons.

Id.* Due to the inadequacy of data necessary to make a

reliable statistical prediction of this sort, the agencies

hedged their bets by also adding “qualitative” judgment to

the mitigated FONSI rationale.”

The parties returned to district court as contemplated

by the settlement agreement. Acting on cross-motions for

summary judgment, the court upheld the FONSI. Detecting

a “certain stench to the FONSI” from “White House influ-

ence,” the court expressed “no doubt the White House’s

policy goals affected the ultimate decision” to stop at a

FONSI. App. 39a. It concluded on this point that “political

policy goals” had been inserted into the final FONSI deci-

sion, removing the usual cloak of deference. App. 40a.

The district court was “extremely concerned” about the

pipeline. App. 63a. Still, it upheld the mitigated FONSI

decision, finding that a sufficiently “hard look” had been

given and that the deferential “arbitrary and capricious”

standard tied its hands.

* The breakdown of the probabilities is: an 8% chance that a

recreational stream will be contaminated at least once; a 5% chance that

a wetland will be contaminated at least once; a .3% chance that a surface

or subsurface public drinking water supply will be contaminated at least

once; a .5% chance that one or more deaths will occur from a flash fire;

and a 2.3% chance that injury will occur from a flash fire. The FONSI

omitted the final EA’s calculation of the estimated threat of prime

agricultural land contamination. Including that threat raises the

statistical probability of a harmful environmental impact to 18.3%.

* Final EA, Appendix 9B-1 (“[dJue to the uncertainties involved in

such calculations, they are not the primary basis of the EA findings.”)

The Fifth Circuit used the same “arbitrary and capri-

cious” standard to review issuance of a mitigated FONSI

that this Court has used to review mitigated EISs in

Robertson v. Methow Valley Citizens Council, 490 U.S. 332

(1989), and Marsh v. Oregon Natural Resources Council,

490 U.S. 360 (1989). App. 8a-9a. Based on this standard,

the Fifth Circuit affirmed the district court.

REASONS FOR GRANTING THE WRIT

The questions presented here raise issues important

to the administration of the nation’s environmental laws,

including a conflict between at least the Second Circuit

and Fifth Circuit on the question of the standard for

approving a mitigated FONSI.

This Court has never addressed the standards for

mitigated FONSIs in the NEPA process. The last time the

Court addressed the substantive rules of NEPA at all was

fifteen years ago. Then, the Court did address mitigation

measures, but in the EIS, not the EA, context. See Methow

Valley, 490 U.S. at 351 (“important ingredient of an EIS is

the discussion of steps that can be taken to mitigate

adverse environmental consequences”); and Marsh, 490

U.S. at 363 (one issue is whether an EIS “must contain a

complete mitigation plan”).

Mitigated FONSIs — creatures of bureaucratic inven-

tion — are not even mentioned in either the statute or

CEQ’s NEPA regulations.” They are mentioned, however,

* CEQ promulgated regulations to guide federal agencies in the

administration of NEPA. See 40 C.F.R. Part 1500. These regulations are

(Continued on following page)

in other extant CEQ guidance on NEPA, “Forty Most

Asked Questions Concerning CEQ’s National Environ-

mental Policy Act Regulations.” In its answer to Question

No. 40, CEQ rejects the basic concept of mitigated FONSIs

— at least insofar as they are used to avoid EISs by adding

mitigation measures to bring a project’s impacts below the

significance threshold:

If a proposal appears to have adverse effects

which would be significant, and certain mitiga-

tion measures are then developed during the scop-

ing or EA stages, the existence of such possible

mitigation does not obviate the need for an EIS.

Forty Most Asked Questions, 46 Fed.Reg. 18,038.” As

Professor Mandelker points out in his NEPA treatise:

“Council on Environmental Quality (CEQ) regulations

contemplate mitigation measures in impact statements.

They do not cover the role of mitigation when federal

entitled to substantial deference by the courts. Andrus v. Sierra Club,

442 U.S. 347, 358 (1979).

" 46 Fed.Reg. 18,026 (March 23, 1981). The lower courts have

divided over the weight to give this guidance. Compare Davis v. Mineta,

302 F.3d 1104, 1125 n.17 (10th Cir. 2002) (Forty Questions are “persua-

sive authority”), with Deukmejian v. NRC, 751 F.2d 1287, 1302 n.77

(D.C. Cir. 1984) (Forty Questions not persuasive authority, though

significant for light cast on CEQ’s interpretation of its own regulations).

“ This situation of using a mitigated FONSI to avoid an EIS must

be distinguished from adding mitigation measures to a FONSI that

otherwise concluded that the significance threshold would not be

crossed by a project. See Forty Most Asked Questions, Answer 39, 46

Fed.Reg. 18,037. Such a situation does not describe the Longhorn

Pipeline project. Even as agencies continue to use mitigated FONSIs to

avoid EISs, CEQ does not know how to handle the matter under NEPA.

See, e.g., The NEPA Task Force Report to the Council on Environmental

Quality, Modernizing NEPA Implementation (Sept. 2003).

agencies decide not to prepare irapact statements.” Daniel

R. Mandelker, NEPA LAW AND LITIGATION, § 8.08(10]

(2d ed. 1995)

Yet, federal agency administration of NEPA has evolved

dramatically over the years, to the point where this “widely

employed backdoor mechanism” threatens to overwhelm

the commonly held view that NEPA’s procedures result in

comprehensive EISs when a project involving major federal

action — as the Longhorn Pipeline project concededly does”

~ threatens to significantly affect the quality of the human

environment. See B. Karkkainen, Toward a Smarter NEPA:

Monitoring and Managing Government’s Environmental

Performance, 102 COLUM. L. REV. 903, 908, 919 & nn.73, 74

(2002) (noting that “the number of EISs produced annually

has declined steadily over the years despite growth in both

the scale and scope of federal activity, while the number of

EAs and FONSIs has soared”).

This quiet transformation of NEPA has major implica-

tions for enforcement of the nation’s environmental laws.

NEPA is widely regarded as the nation’s prime environ-

mental statute, variously described as “the most admired”

environmental statute’ and the “centerpiece of U.S.

environmental! law.” But the only rights this bellwether

% The agencies conceded what was at least implicit in the March

1999 settlement agreement: that the Longhorn Pipeline project

triggered “major federal action” within the meaning of NEPA. “DOT is

required to approve facilities response plans for such pipelines pursu-

ant to the Oil Pollution Act, a mandatory approval that we agree

constitutes an action under NEPA.” App. 190a.

“ M. Blumm, A Primer on Environmental Law and Some Direc-

tions for the Future, 1). VA. ENVTL. L.J. 381, 382 (1992).

“ W. Rogers, The Most Creative Moments in the History of Envi-

ronmental Law: “The Whats,” 2000 U. ILL. L. REv. 1, 31 (2000).

environmental law gives those in the shoes of Austin and

the Collins petitioners are procedural ones: “NEPA itself

does not mandate particular results, but simply prescribes

the necessary process.” Methow Valley, 490 U.S. at 350; see

also Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726, 737

(1998) (NEPA “simply guarantees a particular procedure,

not a particular result”).

Since private rights under perhaps the nation’s pre-

miere environmental statute are only procedural, a deter-

mination of the standards that are to govern a key

bureaucratic mechanism in the NEPA machinery is vitally

important to administration of the nation’s environmental

laws. This case provides the Court an appropriate vehicle to

provide such crucial guidance. Here, there is a project that

concededly implicates major federal action. And the federal

agencies agree it would have triggered an EIS but for one

factor: the use of a mitigated FONSI dependent on pri-

vately-negotiated agreements between the federal govern-

ment and the very entity whose project is under scrutiny.

I. The extra-legal bureaucratic pressures for

mitigated FONSIs have not so overwhelmed

NEPA’s statutory and regulatory procedures

that the poiicymaking weighing of risks and

benefits that is reserved for the end of the EIS

process may be substituted for fact-based de-

terminations of “significance” at the EA phase.

The lead agencies were able to lower their estimations

of the Longhorn project’s impacts to below the “signifi-

cance” threshold through one key and overriding conclu-

sion: that the pipeline’s projected future risks to the public

and the environment were not so great as to be deemed

NEPA-significant. However, this approach confuses the

policy decision that is to be made after a full EIS with the

factual and technical decision that is to be made during

the EA phase.

NEPA is an accountability statute for environmental

policy. The EIS phase of the NEPA process, which culmi-

nates in an agency Record of Decision (ROD), arises

directly from NEPA’s text: federal agencies “to the fullest

extent possible ... shall” prepare an EIS for “major

Federal actions significantly affecting the quality of the

human environment.” 42 U.S.C. § 4332(C) (emphasis

added). Adhering to this statutory command, though, does

not dictate an agency's choice about what will happen once

the environmental study is completed. So long as the EIS

fully and fairly evaluates the environmental impacts of a

project, an agency “is not constrained by NEPA from

deciding that other values outweigh the environmental

costs.” Methow Valley, 490 U.S. at 350. That is, NEPA

establishes a process that requires attention to environ-

mental issues but leaves an agency free at the end to make

a policy choice that reveals how it balances environmental

issues with other concerns and values. That policy choice

is made in the ROD, at the end of the statute-based EIS

process. |

The EA, on the other hand, is an invention embodied

in the binding CEQ regulations that allows federal agen-

cies the necessary breathing space to evaluate whether a

given factual situation involving federal action actually

triggers NEPA’s statutory requirement of full environ-

mental study. In the NEPA order of things, first comes the

EA, then comes either the FONSI or the EIS (which, in

turn, is followed by a ROD).

The EA phase of the NEPA process is focused on the

question of “significance.” A finding of “significance”

triggers an EIS; a finding of no significance ends the

NEPA inquiry. With narrow exceptions, the “significance”

inquiry “involves primarily issues of fact.” Marsh, 490 U.S.

at 377. It is this fact-based nature of significance that

provides the rationale for the judicially deferential stan-

dard that only “arbitrary and capricious” agency determi-

nations are subject to invalidation. Id.

In their below-the-judicial-radar-screen creation of the

NEPA hybrid known as the “mitigated FONSI,” and use of

it to avoid full EISs for projects that otherwise would

require them, federal agencies have forced elements of the

policy-based ROD into the fact-based “significance” deter-

mination. Were this amalgamation accomplished under

law, through statutory amendment or regulatory revision,

the tensions created in the NEPA process might be ad-

dressed and resolved. But, the “mitigated FONSI” move-

ment has been extra-legal. That means that individual

cases are the only way to relieve the unnecessary stresses

caused by trying to force policy decisions into technical,

fact-based pigeonholes.

In the case of the Longhorn Pipeline project, the

agencies only exacerbated those already unnecessary

stresses, and, in doing so, violated NEPA. The NEPA

decision on the pipeline project was treated all along by

the government’s chief NEPA policy arm as a policy deci-

sion. CEQ wanted a negotiated, mitigated FONSI. EPA

and DOT fell into open disagreement in the latter stages of

the EA process about whether to stop at a FONSI or move

to an EIS. Knowing and acknowledging that they con-

fronted an obvious policy decision, the lead agencies

turned to CEQ to tell them the executive branch's envi-

ronmental policy as it affected the pipeline.

In the end, the final Longhorn EA equates the “overall

risk” from the pipeline to “societal risk.” Final EA, 9-34.

Then, the FONSI, resting on the EA, confronts the “quali-

tative decision” the agencies must make about the level of

“risk” associated with the mitigated pipeline. App. 84a.

Ultimately, the FONSI for the Longhorn Pipeline project

rests on the agencies’ conclusion that the future risks to

the public and the environment — greater than a 15%

chance of something bad happening during the project's

projected life — are outweighed by the projected benefits of

Longhorn’s bringing gasoline to isolated markets.

This conclusion flies in the face of CEQ guidance, not

necessarily because it is factually wrong,” but because it

occurs at the wrong time in the wrong place. CEQ already

has assigned the weighing of risks and benefits to the EIS

phase, not the EA phase:

The [CEQ] believes that the weighing of risks

and benefits for the particular federal proposal at

hand is properly done after completion of the

entire NEPA process, and is reflected in the Re-

cord of Decision.

51 Fed.Reg. 15,621 (April 25, 1986) (emphasis added).”

“ It is, though, and the projected environmental impacts of the

pipeline are significant by any reasonable measure. See below at 19

(arguing that government’s own predicted level of residual risk rises to

legal “significance”).

This is not merely a wayward observation by CEQ. It came with

the promulgation of a revision to CEQ Regulation § 1502.22(b),

reconsidering the much-debated role of the “worst case scenario” in

(Continued on following page)

The Fifth Circuit misunderstood this argument and

relegated the discussion of it to a footnote. App. 17a n.5.

Contrary to the suggestion there, Austin and the Collins

petitioners do not argue that only cold, hard facts, un-

touched by agency judgment calls of any sort, can inform

the EA-phase significance decision. That is not what

happened in the mitigated FONSI for the Longhorn

pipeline. ‘e

Instead, the agencies arrived at an uncertain estima-

tion of risk — a greater than 15% threat of meaningful

environmental and human harm - and concluded that

such a level of risk was not sufficient to stop the Longhorn

project from going forward as the owner desired. Austin

and the Collins petitioners very well might be required to

accept the accuracy of the estimated 15.3% risk under the

arbitrary and capricious standard of judicial review, but

that does not transform it into something other than an

uncertain prediction about human and environmental

impacts.” It does not follow, as the Fifth Circuit reasoned,

that the conclusion the lead agencies drew from that

estimation is nothing but a judgment call about signifi-

cance.

There is no special agency expertise involved in the

decision about whether a 15% or greater risk of harmful

impacts is enough to require more environmental study. It

NEPA analysis and replacing it with a procedural mechanism designed

to force uncertainty issues to the forefront of EISs.

* Those challenging the pipeline vigorously contested the data and

methodology leading to this estimate during the administrative

proceedings. Issues from those disputes, however, are not being brought

before the Court.

sets a dangerous precedent to allow uncertain statistical

estimates based on inadequate data at the EA phase to be

used to evade the full study procedurally mandated in an

EIS. It is even more dangerous when, as here, the shaky

estimates are undergirded by transparently flimsy data.

Inadequate data at the EIS phase is sometimes unavoid-

able. But, at the EA phase, inadequate data can only mean

that an EIS is called for. Otherwise, NEPA’s EIS require-

ment is threatened with obsolescence and the entire NEPA

structure is called into question.

Here, the decision is purely a policy call, separate

from the NEPA concept of significance. Everything about

the Longhorn NEPA process says this is so: the lead

agencies’ cry for policy direction;-the front- and back-end

policy direction given by CEQ; and the private negotia-

tions between the agencies and Longhorn over how much

the final mitigation plan would need to contain in order to

let the project move into operation.

In effect, the government treated the hybrid EA/

mitigated FONSI for Longhorn as the functional equiva-

lent of an EIS/ROD. They even argued that is what hap-

pened, convincing the Fifth Circuit on this point. App. 18a

n.6. Generalizing from that point, though, reveals its legal

flaw. If extra-legal hybrid mitigated FONSIs are accepted

as the functional equivalents of statute- and regulation-

based EISs and RODs, the only rights afforded NEPA

plaintiffs - which are purely procedural — are effectively

obliterated. NEPA procedure would become whatever the

. bureaucratic “flavor of the month” says it is, not what the

statute and regulations establish. The Court should act in

this case to correct this bureaucratic drift away from the

law of NEPA.

II. The Court should act to resolve the conflict

between the Second and Fifth Circuits on the

standard to be used for evaluating significance

determinations at the EA phase in the era of

mitigated FONSIs.

The NEPA statute and the CEQ regulations do not

recognize the concept of mitigated FONSIs that drove the

Longhorn process, and which increasingly drives all the

government’s NEPA machinery. In fact, the only extant

guidance, found in CEQ’s 1986 Forty Questions, rejects the

concept. At the same time, “[t]he courts usually decide

these cases on an ad hoc basis with no attempt to provide

criteria under which the environmental significance of a

federal action can be measured.”' D. Mandelker, NEPA

LAW AND LITIGATION § 8.08[3] (2d ed. 1995). In other

words, the government is using a legally rudderless

approach to enforcement of what many consider its pre-

miere environmental law.

The lower courts have divided on the standard agen-

cies are to follow in deciding whether to stop at a FONSI

or move to the EIS phase. In this case, the Fifth Circuit

determined to evaluate mitigated FONSIs under the

arbitrary and capricious standard. App. 17a. It expressly

rejected the Second Circuit’s “close call” standard de-

scribed in another mitigated FONSI case, National Audu-

bon Soc’y v. Hoffman, 132 F.3d 7, 13 (2d Cir. 1997)

(“[w]hen the determination that a significant impact will

or will not result from the proposed action is a close call,

an EIS should be prepared”). See App. 17a n.4. The Fifth

Circuit described the Second Circuit’s rule as in “seeming

conflict” with the arbitrary and capricious standard

holding sway in the Fifth Circuit. Id.

eS eee eee

This actual conflict between the Fifth and Second

Circuits is of critical importance in interpreting NEPA law,

and guidance from the Court on this important issue is

sorely needed, not simply to aid the lower courts in their

review of NEPA decisions coming up from the agencies. It

also is needed to aid the agencies themselves. The Long-

horn dispute highlights that need.

The two lead agencies themselves could not agree on

how to evaluate the facts and resorted to policy guidance

from CEQ. CEQ could only direct the outcome; it could not

provide legal advice on the standard to be applied by the

agencies. The reason, of course, is that the only existing

legal guidance says that mitigated FONSIs are not accept-

able substitutes for EJSs and RODs when a project’s

impacts otherwise cross the significance threshold — as the

Longhorn project is conceded by EPA and DOT to have

done.

By any common sense measure, the admission of a

15% to 20% estimate of “residual” risk from the Longhorn

line’s operation crosses the significance barrier. The reality

in this case is that the agencies had to have actually

viewed the level of mitigation attached to the Longhorn

line as insufficient to lower the threat to insignificance.

Several times, they proposed additional mitigation meas-

ures to Longhorn but were rebuffed. That can only mean

that: (i) given the predetermined result that there would

be no EIS, the lead agencies took what they could get; and

(ii) the agencies really viewed the additional proposed

measures that Longhorn rejected as necessary to the

achievement of “insignificance.”

The legally uncertain state of the role to be played by

mitigated FONSIs in the NEPA process needs the Court’s -

attention. This case provides the appropriate vehicle.

CONCLUSION

The petition for writ of certiorari should be granted.

Respectfully submitted,

CONNIE ODE RENEA HIckKs*

P. O. Box 1574 LAW OFFICE OF

El] Prado, New Mexico 87529 MAX RENEA HICKS

(505) 758-2203 800 Norwood Tower

114 West 7th Street

Austin, Texas 78701

(512) 480-8231

DAVID ALLAN SMITH

City Attorney, City of Austin

114 West 7th Street,

Suite 500 R. JAMES GEORGE, JR.

Austin, Texas 78701 BEN J. CUNNINGHAM,

(512) 974-2166 Of Counsel

GEORGE & BROTHERS, L.L.P.

Attorneys for Petitioner

City of Auctin 1100 Norwood Tower

114 West 7th Street

Austin, Texas 78701

(512) 495-1400

Attorneys for Petitioners

Marian Collins, Barton

Springs-Edwards Aquifer

Conservation District, and

David Robertson

*Counsel of Record for Petitioners

sie.

btm ime STN wt

PsN aad co s é Pe eat ee Pere

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-50956

ETHEL SPILLER; ET AL.,

Plaintiffs,

MARIAN COLLINS; BARTON

SPRINGS/EDWARDS AQUIFER

CONSERVATION DISTRICT;

DAVID ROBERTSON,

Plaintiffs-Appellants,

CITY OF AUSTIN,

Intervenor Plaintiff-Appellant,

versus

THOMAS E. WHITE, Etc.;

ET AL.,

Defendants,

THOMAS E. WHITE, in his official capacity

as Acting Secretary of the Department of

the Army; NORMAN Y. MINETA, SECRETARY,

DEPARTMENT OF TRANSPORTATION;

CHRISTINE T. WHITMAN, ADMINISTRATOR,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY; UNITED

STATES OF AMERICA,

Defendants-Appellees,

LONGHORN PARTNERS PIPELINE LP,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Texas

(Filed December 12, 2003)

—

Before JOLLY, SMITH and EMILIO M. GARZA, Circuit

Judges.

E. GRADY JOLLY, Circuit Judge:

Before this court is the joint decision of two govern-

ment agencies not to conduct a full-scale environmental

impact study of the environmental effects of a proposal to

use a pre-existing pipeline to transport gasoline and other

petroleum products across the state of Texas. The govern-

ment agencies did perform an initial environmental

assessment but declined to engage in any furtaer studies

after concluding that the environmental impact of the

proposed use of the pipeline would not be signi“icant. The

petitioners consist of a variety of Texas cities and govern-

mental entities strongly opposed to the proposed use of

this particular pipeline. They urged the district court —

and they now urge this court — to order the government

agencies to proceed with a full-fledged environmental

impact study, contending that the agencies’ finding of no

significant environmental impact was arbitrary and

capricious and contrary to law. The district court upheld

the conclusion of the government agencies. We affirm.

I. Background

A. Statutory Background

This case arises under the network of the National

Environmental Policy Act of 1969 (“NEPA”), 42 U.S.C.

§§ 4321-4370d, “a statute drafted to ensure that federal

agencies ‘carefully consider detailed information concern-

ing significant environmental impacts,’ and at the same

time ‘guarantee that the relevant information will be

made available to the larger audience that may also play a

role in both the decisionmaking process and the

implementation of that decision.’” Sabine River Authority

v. U.S. Dept. of Interior, 951 F.2d 669, 676 (5th Cir. 1993)

(quoting Robertson v. Methow Valley Citizens Council, 490

U.S. 332 (1989)). In essence, the NEPA framework re-

quires federal agencies to prepare a detailed Environ-

mental Impact Statement (“EIS”) for all “major federal

actions significantly [affecting] the quality of the human

environment.” 42 U.S.C. § 4332(C).

The threshold determination of whether the effect of

the proposed action is sufficiently “significant” to necessi-

tate the production of an EIS is made by the preparation

of an Environmental Assessment (“EA”). Sabine River, 951

F.2d at 677. The EA is a “concise” document that “briefly”

discusses the relevant issues and either reaches a conclu-

sion that preparation of an EIS is necessary or concludes

with a “Finding of No Significant Impact” (“FONSI”). Id.

An EA is conducted to “provide sufficient evidence and

analysis for determining whether to prepare an [EIS].” 40

C.F.R. § 1508.9(a)(1). “The EA is a rough-cut, low-budget

environmental impact statement designed to show

whether a full-fledged environmental impact statement —

which is very costly and time-consuming to prepare and

has been the kiss of death to many a federal project — is

necessary.” Sabine River, 951 F.2d at 677 (internal quota-

tions and citations removed). Thus, the ultimate purpose

of the EA is to lead to one of two findings: “either that the

project requires the preparation of an EIS to detail its

environmental impact, or that the project will have no

significant impact .. . necessitating no further study of the

environmental consequences which would ordinarily be

explored through an EIS.” Jd. If the former is found, then

the agency must proceed with a full blown EIS; if the

latter is found, the agency issues a FONSI and has no

further obligations under NEPA. Jd.

Notably, the NEPA statutory framework provides no

substantive guarantees; it prescribes adherence to a

particular process, not the production of a particular

result. Robertson, 490 U.S. at 350. NEPA “is a procedural

statute that demands that the decision to go forward with

a federal project which significantly affects the environ-

ment be an environmentally conscious one.” Sabine River,

951 F.2d at 676. The statute “does not command the

agency to favor an environmentally preferable course of

action, only that it make its decision to proceed with the

action after taking a ‘hard look at environmental conse-

quences.’” Jd. (quoting Robertson, 490 U.S. at 350). In-

deed, “NEPA does not prohibit the undertaking of federal

projects patently destructive of the environment; it simply

mandates that the agency gather, study, and disseminate

information concerning the projects’ environmental conse-

quences.” Jd. Thus, while “[o]ther statutes may impose

substantive environmental obligations on federal agencies,

. NEPA merely prohibits uninformed — rather than

unwise — agency action.” Jd.

ees ee Se es

Pa ee Te es

B. Factual and Procedural History

This case concerns a pipeline that runs across the

state of Texas between Houston and El Paso. Along its

way, the pipeline passes through the City of Austin and

across several rivers, streams and wetlands. In addition, it

lies atop several aquifers and aquifer recharge zones.

Exxon Pipeline Company originally constructed the

pipeline between 1949 and 1950 and used it to transport

crude oil until 1995. In 1997, Exxon sold the pipeline to

Longhorn Partners Pipeline, L.P. (“Longhorn”), a Delaware

limited liability partnership headquartered in Dallas,

Texas. Longhorn purchased the pipeline intending to use it

to transport gasoline and other petroleum products from

Gulf Coast refineries to E] Paso and then, perhaps, on to

other states. The pipeline will eventually move approxi-

mately 225,000 barrels of gasoline per day across its lines.

On April 22, 1998, Mariane [sic] Collins, the Barton

Springs-Edwards Aquifer Conservation District, and

David Robertson filed a challenge to the proposed pipeline

under NEPA.’ In their original complaint, the plaintiffs

sought injunctive relief, claiming that NEPA obligated the

federal government to perform a full-fledged review of the

environmental impact of the proposed use of the Longhorn

' The Collins plaintiffs all claim to be potentially affected by the

proposed use of the pipeline. Marian Collins is a rancher in Kimble

County, Texas and claims she is totally dependent on water drawn from

the Edwards-Trinity Plateau Aquifer which is allegedly threatened by

this pipeline. David Robertson lives in Hayes County and claims to rely

on well-water drawn from this same aquifer. The Barton Springs-

Edwards Aquifer Conservation District is a political subdivision

charged with the protection of the Barton Springs segment of the

Edwards Aquifer.

Pipeline. The suit was brought against Longhorn, the

United States, the United States Department of Transpor-

tation (“DOT”), the Department of the Army, and the

Environmental Protection Agency (“EPA”). Shortly there-

after, the City of Austin was allowed to intervene as the

pipeline itself runs through the city.

After some initial negotiations, Longhorn and the

government defendants entered into a settlement stipula-

tion with the Collins plaintiffs and the City of Austin

(collectively referred to hereafter as “the Collins plain-

tiffs”). Under this settlement, the EPA and the DOT

(hereafter referred to as the “Lead Agencies”) agreed to

prepare an EA of the pipeline. The parties agreed that this

EA would culminate in a FONSI or a notice of intent to

prepare an EIS. Upon acceptance of the settlement stipu-

lation, the district court issued an Agreed Order enjoining

Longhorn from placing petroleum products in the pipeline

until thirty days after the EA had been completed. The

Agreed Order also specified that if the Lead Agencies

issued a FONSI, the Collins plaintiffs could apply to the

court to extend the injunction on the basis that the FONSI

was arbitrary and capricious or otherwise in violation of

the law under the Administrative Procedures Act (“APA”),

5 U.S.C. § 706.

In accordance with the settlement stipulation, the

Lead Agencies prepared an EA. On October 28, 1999, the

Lead Agencies issued the draft EA and a preliminary

FONSI for public review and comment (in accordance with

40 C.F.R. § 1506.6). The preliminary FONSI was a so-called

“mitigated FONSI” which means that its issuance was

predicated on Longhorn’s engaging or agreeing to engage in

certain mitigation measures. These measures were de-

signed to address the potentially significant environmental

a | —— a

impacts of the pipeline and reduce the risks of them

occurring to a level where they were deemed insignificant

by the Lead Agencies. The Lead Agencies then held public

hearings on the draft EA and the preliminary FONSI in

Austin, Houston, Fredricksburg, Bastrop and El Paso and

distributed hundreds of copies of the EA and FONSI in

counties along the pipeline. Following these hearings, the

submission of several thousand written comments on

them, and after further deliberation, on November 3, 2000,

the EPA and DOT issued a FONSI along with the final EA.

On February 5, 2001, the District Court granted the

Collins plaintiffs leave to amend their initial complaints.

In their amended complaint, the Collins plaintiffs con-

tended that (1) the Lead Agencies’ decision to issue a

FONSI instead of preparing an EIS was contrary to NEPA

and was arbitrary and capricious in violation of the APA,

and (2) the Lead Agencies and Longhorn breached the

settlement agreement. In response, Longhorn and the

Lead Agencies claimed that the decision to issue a FONSI

was not arbitrary and capricious and that they had com-

plied with the settlement agreement. All parties filed

summary judgment motions on June 10, 2002.

On July 19, 2002, the district court granted summary

judgment in favor of Longhorn and the Lead Agencies. It

found that the Lead Agencies’ decision to issue a FONSI

and not prepare an EIS was not arbitrary and capricious

nor was it in any other way unlawful or in violation of

NEPA. Specifically, it found that the Lead Agencies had

taken the requisite “hard look” at the environmental

impact of the Longhorn Pipeline and had reasonably

determined that the impact would not be significant. In

addition, it found that Longhorn had not breached the

settlement agreement.

On August 20, 2002, the Collins plaintiffs filed a

timely notice of appeal to this Court. In this appeal, the

Collins plaintiffs take issue with the district court’s

finding that the Lead Agencies’ decision to issue a FONSI

and not to prepare an EIS was not arbitrary and capri-

cious or otherwise in violation of the law. They urge this

Court to reverse this finding, remanding with instructions

that the district court remand the proceeding to the Lead

Agencies for preparation of an EIS, or alternatively, for

reconsideration of the FONSI in response to a judicial

determination that it was issued in violation of NEPA.”

II. Standard of Review

Because NEPA dictates no particular substantive

result, an agency decision not to conduct_an EIS based on

a FONSI is reviewable only on procedural grounds. A

party objecting to such a decision brings such a challenge

under the APA, 5 U.S.C. § 706(2)(A). Such parties face a

high bar to success, however, as NEPA-related decisions

are accorded a considerable degree of deference. The

Supreme Court has held that in reviewing agency deci-

sions involving alleged NEPA violations, courts are to

uphold the agency’s decision unless the decision is “arbi-

trary, capricious, an abuse of discretion, or otherwise not

in accordance with law.” Marsh v. Oregon Natural Res.

Council, 490 U.S. 360, 375 n.21 (1989) (quoting 5 U.S.C.

§ 706(2)(A)). Under this “highly deferential” standard, a

* The Collins plaintiffs do not appeal the district court’s grant of

summary judgment on their claim that Longhorn breached its settle-

ment agreement. Thus, the sole issue before us on appe. ‘* the validity

of the Lead Agencies’ decision not to conduct an EIS.

reviewing court has the “least latitude in finding grounds

for reversal” of an agency decision and “may not substitute

its judgment for that of the agency.” Sabine River, 951 F.2d

at 676 (internal quotations and citations omitted). Thus,

with respect to this case, our deferential role as a review-

ing court is limited to ensuring that the Lead Agencies

took a “hard look” at the environmental consequences; we

cannot interject ourselves within the area of discretion of

the agencies as to the ultimate choice of the action to be

taken. Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21

(1976). In doing so, we evaluate the record de novo. We

undertake the same task as the district court, reviewing

the materials submitted there and determining whether

the agency’s conclusions were arbitrary and capricious or

contrary to law. Sabine River, 951 F.2d at 679.

III. Discussion

Before examining the Collins plaintiffs’ arguments in

detail, we should first note how exceedingly thorough and

comprehensive the instant environmental assessment

prepared by the Lead Agencies appears to be. The law only

requires that an EA be a “rough-cut,” “low-budget,” pre-

liminary look at the environmental impact of a proposed

project. Sabine River, 951 F.2d at 677. This EA, however, is

anything but rough-cut or low-budget. One and a half

years in the making, it consists of four lengthy volumes

numbering over 2,400 pages. It incorporates not only the

analysis of agency personnel but also studies from inde-

pendent experts in pipeline operations and safety, endan-

gered species, hydrology, geology, lake and stream

modeling, chemistry, risk analysis, and emergency re-

sponse planning and implementation. It also incorporates

the Lead Agencies’ review of over 6,000 written comments

10a

and numerous oral comments from six separate public

meetings held throughout potentially affected areas in the

state of Texas. Its issuance was predicated on Longhorn’s

agreeing to employ and maintain a variety of mitigation

measures designed to lower the degree of identified risk of

impact to acceptable levels. Indeed, in many ways, this EA

is more akin to a full-blown EIS; it is unclear exactly what

more the Lead Agencies could have done to evaluate the

significance of this pipeline’s impact.

We should also note that we find nothing objectionable

about the fact that the issuance of the FONSI was predi-

cated on Longhorn agreeing to certain mitigation meas-

ures. This Court has never explicitly upheld the issuance

of a so-called “mitigated FONSI.” This situation occurs

when an agency or an involved third party agrees to

employ certain mitigation measures that will lower the

otherwise significant impacts of an activity on the envi-

ronment to a level of insignificance. In this way, a FONSI

could be issued for an activity that otherwise would

require the preparation of a full-blown EIS. Other circuits

have endorsed such a practice. For example, in Cabinet

Mountains Wilderness v. Peterson, 685 F.2d 678 (D.C. Cir.

1982), the District of Columbia Circuit Court of Appeals

held that “if, however, a proposal is modified prior to

implementation by adding specific mitigation measures

which completely compensate for any possible adverse

environmental impacts stemming from the original pro-

posal, the statutory threshold of significant environmental

effects is not crossed and an EIS is not required.” Other

circuits have concurred with this result. See, e.g., CA.R.E.

Now, Inc. v. FAA, 844 F.2d 1569 (11th Cir. 1988); Green-

peace Action v. Franklin, 14 F.3d 1324 (9th Cir. 1992);

Roanoke River Basin Ass’n v. Hudson, 940 F.2d 58 (4th Cir.

lla

1991); Audubon Soc’y of Cent. Arkansas v. Dailey, 977 F.2d

428 (8th Cir. 1992). While we have never explicitly upheld

the use of a mitigated FONSI, we have implicitly endorsed

their use in Sierra Club v. Espy, 38 F.3d 792, 803 (5th Cir.

1994) (holding that EAs satisfied NEPA where they

considered appropriate alternatives, including mitigation

measures), and Louisiana v. Lee, 758 F.2d 1081, 1083 (5th

Cir. 1985) (holding that it was proper to consider restric-

tions placed on dredging permits in reviewing the agency’s

decision not to file an EIS and citing Cabinet Mountains,

685 F.2d at 682). Accordingly, we find no basis for objecting

to the mitigated nature of FONSI issued here. This is

particularly true given the fact that the original settle-

ment agreement between the parties specifically endorsed

the use of a mitigated FONSI.

Despite its comprehensive nature, the Collins plain-

tiffs take issue with the conducted EA and issued FONSI

on three basic grounds. First, they contend that the Lead

Agencies’ assessment of the environmental impact of the

pipeline was conducted in bad faith — that a political

decision to issue a FONSI had been made beforehand and

the entire process was specifically tailored to produce this

result. Second, they assert that the Lead Agencies did not

follow the guidelines set out by relevant NEPA regula-

tions; specifically, they argue that the Lead Agencies failed

to consider and evaluate all the requisite factors stipulated

by these regulations. Finally, the Collins plaintiffs assert

that even assuming a sufficiently comprehensive “hard

look” was taken, the Lead Agencies’ findings were arbi-

trary and capricious since a clear and rational examina-

tion of the record indicates that the Longhorn Pipeline

would have a significant effect on the environment. The

12a

Collins plaintiffs made all three of these arguments to the

district court, which rejected them. We do so as well.

As to their first contention, the Collins plaintiffs

essentially assert that the EA prepared here was a sham —

contrived reports specifically tailored to rationalize a

result that had already been predetermined. They assert

that the decision to not prepare an EIS was a political

decision made in advance by the Council on Environ-

mental Quality (“CEQ”) — an executive branch political

organization — and forced on the Lead Agencies. Conse-

quently, they argue that there was never any good faith

attempt to take the required “hard look” at any potentially

significant environmental effects the proposed action

would have. Instead, the EA that ultimately issued was a

foregone conclusion, whatever may have been the actual

level of the significance of the pipeline’s impacts.

We find no merit to -his argument. Although it is true

that agencies are expected to engage in good faith fact-

finding, when their findings are challenged as arbitrary

and capricious, the agencies’ actions are judged in accor-

dance with their stated reasons. See, e.g., In re: Comptrol-

ler of the Currency, 156 F.3d 1279 (D.C. Cir. 1998). Thus,

the “actual subjective motivation of agency decisionmakers

is immaterial as a matter of law — unless there is a show-

ing of bad faith or improper behavior.” Id. at 1279-80.

There is no evidence here that the Lead Agencies acted

improperly or in bad faith. The assessment they prepared

was noteworthy for its exhaustive and extensive nature.

Even more detrimental to the Collins plaintiffs’ argument

is that there is no evidence of a causal link between the

Lead Agencies’ decision to issue a FONSI and the alleged

political machinations; the record suggests that the CEQ’s

involvement did not come until after the Lead Agencies

13a

had made the initial decision not to prepare an EIS.

Accordingly, there is no reason to overturn the Lead

Agencies’ decision on these grounds.

As to the second contention, the Collins plaintiffs

accurately note that in taking a “hard look” at whether a

proposed activity’s impact will be significant, the relevant

regulations instruct the Lead Agencies to consider both the

“context” and the “intensity” of the impacts. 40 C.F.R.

§ 1508.27. According to these regulations, consideratica of

context means that “the significance of an action must be

analyzed in several contexts such as society as a whole

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

ests, and the locality.” 40 C.F.R. § 1508.27(a). Intensity is

defined as “the severity of impact.” 40 C.F.R. § 1508(b).

The regulation then goes on to provide ten areas agencies

should consider in evaluating “intensity.” See id.’ The

* The ten listed factors are:

(1) Impacts that may be both beneficial and adverse. A

significant effect may exist even if the Federal agency be-

lieves that on balance the effect will be beneficial.

(2) The degree to which the proposed action affects public

health or safety.

(3) Unique characteristics of the geographic area such as

proximity to historic or cultural resources, park lands,

prime farmlands, wetlands, wild and scenic rivers, or ecol-

ogically critical areas.

(4) The degree to which the effects on the quality of the

human environment are likely to be highly controversial.

(5) The degree to which the possible effects on the human

environment are highly uncertain or involve unique or un-

known risks.

(6) The degree to which the action may establish a preee-

dent for future actions with significant effects or represents

a decision in principle about a future consideration.

(Continued on following page)

l4a

Collins plaintiffs contend that while the Lead Agencies’ EA

report accurately lists all ten factors as being components

of their assessment, their failure to specifically address

each of them separately and directly in this report requires

reversal. We do not think, however, that the Lead Agencies’

decision should be overturned on such formalistic grounds.

Notably, the factors listed in the regulation do not appear to

be categorical rules that determine by themselves whether

an impact is significant. Instead, they are simply a list of

relevant factors that should be considered in gauging

whether an impact is “intense” and, therefore, significant.

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

factors were in some way addressed and evaluated; whether

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

think that the record clearly indicates that each of these

factors received adequate attention and evaluation in the

(7) Whether the action is related to other actions with in-

dividually insignificant but cumulatively significant im-

pacts. Significance exists if it is reasonable to anticipate a

cumulatively significant impac: on the environment. Sig-

nificance cannot be avoided by terming an action temporary

or by breaking it down into small component parts.

(8) The degree to which the action may adversely affect

districts, sites, highways, structures, or objects listed in or

eligible for listing in the National Register of Historic Places

or may cause loss or destruction of significant scientific, cul-

tural, or historical resources.

(9) The degree to which the action may adversely affect an

endangered or threatened species or its habitat that has

been determined to be critical under the Endangered Spe-

cies Act of 1973.

(10) Whether the action threatens a violation of Federal,

State, or local law or requirements imposed for the protec-

tion of the environment.

154

Lead Agencies’ decision-making process. Accordingly, we

find no merit to this argument.

The Collins plaintiffs finally assert that, even assum-

ing a comprehensive “hard look” was taken, the conclusion

that the impact of the Longhorn Pipeline was not signifi-

cant was still arbitrary and capricious since the Lead

Agencies’ conclusion was both grossly unsupported by the

facts found and premised on bad science and/or inaccurate

information. They argue that any reasonable consideration

of the ten requisite factors would have led a rational

decision-maker to conclude that the environmental impact

of the Longhorn Pipeline would be significant. According to

them, the EA report, the FONSI, and its underlying

studies and findings are “unduly optimistic,” “confusing,”

“unreasonable” and “defy common sense.” To substantiate

these allegetions, they offer the detailed testimony of five

expert witnesses retained by them.

We find no merit to this contention. The fact that the

Collins plaintiffs or their experts take great issue with the

factual findings and ultimate conclusions of the Lead

Agencies does not render those findings and conclusions

“arbitrary and capricious.” As we noted earlier, govern-

ment agencies — and not the federal courts — are the

entities NEPA entrusts with weighing evidence and

reaching factual conclusions:

Where conflicting evidence is before the agency, the

agency and not the reviewing court has the discre-

tion to accept or reject from the several sources of

evidence. The agency may even rely on the opin-

ions of its own experts, so long as the experts are

qualified and express a reasonable opinion.

Sabine River, 951 F.2d at 678.

16a

Indeed, even if we were convinced that the Collins

plaintiffs’ experts were more persuasive than those relied

upon by the Lead Agencies, we would still be compelled to

uphold the Lead Agencies’ finding so long as their experts

were qualified and their opinions reasonable. Id.; Marsh,

490 U.S. at 378 (“[w]hen specialists express conflicting

views, an agency must have the discretion to rely on the

reasonable opinions of its own qualified experts, even ‘f, as

an original matter, a court might find contrary views more

persuasive.”).

There is no evidence here that the Lead Agencies’

experts are unqualified, nor do their opinions seem

unreasonable to us. The Collins plaintiffs’ experts point to

a number of specific flaws they claim exist in the Lead

Agencies’ fact-finding or conclusions. These include

allegations that the Lead Agencies should have conducted

more comprehensive studies than they chose to do, that

they utilized inaccurate and misleading statistical meth-

odology in analyzing the risks of pipeline leakage, that

they ignored or finessed the implications of key findings by

the Lead .igencies’ own experts in many instances, and

that they inappropriately deferred to Longhorn for data

and then relied uncritically upon it. Unsurprisingly, the

Lead Agencies and Longhorn take issue with each of these

assertions, answering each point-by-point in their briefs.

After analyzing this back-and-.>rth between the parties, it _

seems clear that whatever the -erits of the Collins plain-

tiffs’ arguments that the Lead Agencies’ decision-making

process was less than perfect, it was not unreasonable.

Instead, the dispute between the Ccllins plaintiffs and the

defendants here is best classified as a classic battle of the

experts, with each party asserting that their analysis is

more reasonable than the other’s. Under the highly

17a

deferential standard efforded to agencies pursuant to

NEPA, however, it is not the job of the federal courts to

intervene in this fight.‘ The agencies have made their

decision. It was not arbitrary and capricious. We are thus

obliged to defer to their expert judgment.”

‘ The Collins plaintiffs advance the argument that even if the

environmental impact of the Longhorn Pipeline is not clearly signifi-

cant, it is at least a close call and, as they claim, close calis are sup-

posed to lead to an EIS. For this proposition of law, they rely on

National Audubon Soc’y v. Hoffman, 132 F.3d 7, 13 (2d Cir. 1997)

(“[wJhen the determination that a significant impact will or will not

result from the proposed action is a close call, an EIS should be

prepared.”). This Court, however, has never announced such a rule.

Indeed, it would be difficult to do so, given the seeming conflict between

such a rule and the highly deferential “arbitrary and capricious”

standard set out in Sabine River.

* We should note that our deference to the Lead Agencies fact-

finding and conclusions includes deference to their judgment as to

whether any particular environmental impact of the proposed pipeline

rises to the level of significance. The Collins plaintiffs argue that under

the NEPA framework, the determination of whether an impact is

significant must be objective, factual and quantitative in nature and

should not involve any subjective, qualitative “judgment calls.” They

argue that the final EA issued here is inappropriately “larded” with

such judgement calls, particularly on the subject of how much risk

constitutes significant risk; it should therefore be overturned. The

problem with this contention is that, as a practical matter, a determina-

tion of significance cannot be a completely objective inquiry because the

meaning of the term “significance” fer purposes of the NEPA statute is

not clear on its face. Vieux Carre Property Owners Residents and

Assoc’s, Inc. v. Pierce, 719 F.2d 1272, 1279 (5th Cir. 1983) (“There is no

hard and fast definition of ‘significant’ effect.”). As such, determining

whether significance exists inherently involves some sort of a subjective

judgment call. Save Our Ten Acres v. Kreger, 472 F.2d 463, 467 n.7 (5th

Cir. 1973) (significance is “in large part a judgment based on the

circumstances of the proposed action.”). This must include judgment

calls about how much risk equals significant risk, i.e., judgment calls

about “acceptable risk.” This observation has been made by the Second

(Continued on following page)

18a

IV. Conclusion

As we noted earlier, NEPA does not guarantee any

substantive results; all it ensures is that a particular

process will be followed. Herein lies the problem for the

Collins plaintiffs. They really don’t want more process.

Indeed, considering the extensive and comprehensive

nature of the EA conducted here, it is unclear exactly what

more process would invelve.° What they really desire is a

Circuit in City of New York v. U.S. Dep't of Transp., 715 F.2d 732 (2d

Cir. 1983). There, the court explicitly held that agencies have “latitude

in determining whether the risk is sufficient to require the preparation

of an EIS.” Jd. at 746 n.14. This holding is sound because the “concept

of overall risk incorporates the significance of possible adverse conse-

quences discounted by the improbability of their occurrence.” Id. at 738.

That is not to say that any such judgment calls must be rubber-

stamped by a reviewing court; they are still subject to the arbitrary and

capricious standard of review. However, we do say that the simple fact

that a judgment call was made is not enough to render the determina-

tion of significance (or non-significance) invalid under NEPA.

* The Lead Agencies and Longhorn have argued that requiring the

preparation of an EIS here would be a waste of time and resources,

given the fact that the EA prepared here contains all the functional

elements of an EIS. We find this argument persuasive. In Vieux Carre

Property Owners Residents and Assoc’s, Inc. v. Pierce, 719 F.2d 1272,

1282 (5th Cir. 1983), this court upheld the decision of an agency not to

conduct an EIS where the “objectives reflected in the [f]inal [EA] and

the procedures followed in its preparation were extremely thorough and

resulted in a document much akin to a detailed environmental impact

statement.” But see State of Louisiana v. Lee, 758 F.2d 1081 (5th Cir.

1985) (holding that an EA prepared by an agency in that case was not

the functional equivalent of an EIS). Like the EA in Vieux Carre, the EA

here has all the hallmarks of an EIS: there were public hearings and

costly, extensive, and comprehensive environmental studies which

produced reams of material data and resulted in 2,400 pages of

analysis. Accordingly, it is unclear whether the time and expense

required to prepare an EIS after an EA will result in any incremental

benefits. Forcing the Lead Agencies to prepare an EIS would likely be

unnecessarily duplicative and a waste of resources.

19a

substantive result: convinced that it poses a great threat

to the health and safety of its citizens and the environ-

ment in general, the Collins plaintiffs want this pipeline

project killed. Unfortunately for their case, and whatever

of the merits of that position, this outcome cannot be

secured in this federal court proceeding. The Lead Agen-

cies here have complied with the NEPA statute and its

accompanying regulations in every way. They have con-

ducted an exhaustive assessment of the environmental

effects of this proposed pipeline and, after consideration,

concluded that those effects were not significant. Whether

we agree or disagree with that conclusion, we cannot call

it arbitrary and capricious. Accordingly, we have no ability

to disturb it. Therefore, the district court’s grant of sum-

mary judgment in favor of the defendants is AFFIRMED

in all respects.

AFFIRMED.

20a

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

ETHEL SPILLER,' MARIAN

COLLINS, BARTON SPRINGS-

EDWARDS AQUIFER

CONSERVATION DISTRICT,

DAVID ROBERTSON,

Plaintiffs,

CITY OF AUSTIN,

Plaintiff-Intervenor

-VSs- Case No.

ROBERT M. WALKER, in his A-98-CA-255-SS

official capacity as Acting

Secretary of the Department

of the Army; et al., RODNEY

SLATER, in his official capacity

as Secretary of Transportation,

CAROL A. BROWNER, in her

official capacity as

Administrator of the

Environmental Protection

Agency, UNITED STATES OF

AMERICA, and LONGHORN

PARTNERS PIPELINE, L.P.,

Defendants

* Although Ethel Spiller has withdrawn as the plaintiff in this

case, her name is listed in the caption to avoid confusion.

2la

ORDER

(Filed Jul. 19, 2002)

BE IT REMEMBERED on the 12th day of July 2002

the Court called the above-styled cause for hearing on all

pending matters, and the parties appeared by attorney of

record. Before the Court are the Plaintiffs’ Motion for

Summary Judgment [#295] and supplements thereto [#

307; 339], City of Austin’s Motion for Summary Judgment

(# 299], Defendant Longhorn Partners Pipeline, L.P.’s

Motion for Summary Judgment [#300], and Federal

Defendants’ Motion for Summary Judgment [# 297];

Plaintiffs’ response [# 325], City of Austin’s response [#

317], Longhorn Partners Pipeline, L.P.’s response [# 319],

and Federal Defendants’ response [# 314]. Also before the

Court are the Plaintiffs’ Request for Preliminary Injunc-

tion [# 323], City of Austin’s Request for Preliminary

Injunctive Relief [# 308), Longhorn Partners Pipeline,

L.P’s memoranda in opposition thereto [# 321, 335],

Federal Defendants’ opposition thereto [# 340], and Plain- ,

tiffs’ reply [# 337]. Finally, the Court considers the Defen-

dants’ motions to strike declarations filed by the Plaintiffs

and the City of Austin in their summary judgment motions

(# 311, 312, 315] and the Plaintiffs’ and City of Austin’s

response thereto [# 331, 333]; as well as Longhorn Part-

ners Pipeline, L.P.’s motion to strike documents filed by

the City of Austin [# 320] and exhibits filed by the Plain-

tiffs in their response to the summary judgment motions

[(# 334]. Having considered the voluminous motions and

responses, the case file as a whole, the four-volume

Environmental Assessment, and the applicable law, the

Court enters the following opinion and orders.

22a

Factual and Procedural Background

This case concerns a pipeline that runs across the

state of Texas, cutting a jagged path through the 731 miles of

cities, towns, farms and ranches between Houston and El

Paso, crossing rivers, streams and wetlands in ten major

river basins, and lying atop several aquifers and aquifer

recharge zones. Exxon Pipeline Company (“Exxon”) con-

structed the 18-to 20-inch diameter pipeline in 1949 and

1950 and transported crude oil through it from Crane to

Houston until around 1995. During that time, the pipeline

experienced approximately 173 spills and leaks. In 1997,

Exxon sold the pipeline to Longhorn Partners Pipeline,

L.P. (“Longhorn”), a Delaware limited liability partnership

headquartered in Dallas. Longhorn purchased the pipeline

in order to transport gasoline and other petroleum prod-

ucts from Gulf Coast refineries to El Paso and on to

Arizona, New Mexico and California. The pipeline will

eventually move 225,000 barrels per day of gasoline from

Houston to El] Paso and Odessa.

On April 22, 1998, the Plaintiffs filed a challenge to the

proposed Longhorn Pipeline Project (“the Pipeline”) in this

Court under the National Environmental Policy Act of 1969

(“NEPA”), 42 U.S.C. §§ 4321-4370d. Plaintiffs Marian

Collins and David Robertson own land along the Pipeline in

Kimble County and Hays County. Plaintiff Barton Springs

~ Edwards Aquifer Conservation District is a political

subdivision of the state of Texas that conserves and protects

groundwater within Travis, Hays, Caldwell and Bastrop

counties. In their original complaint, the Plaintiffs sought

injunctive relief requiring the federal government to perform

a full-fledged review under NEPA of the environmental

consequences of the Pipeline. The plaintiffs sued Longhorn,

the United States, the United States Department of

23a

Transportation (“DOT”), the Department of the Army

(‘Army”), and the Environmental Protection Agency

(“EPA”)? The Court allowed the City of Austin (“City”) and

Lower Colorado River Authority (“LCRA”) to intervene as

plaintiffs because the Pipeline runs through the City and

the LCRA manages a large portion of the water supply over

which the Pipeline travels.’

NEPA requires federal agencies to analyze, “to the

fullest extent possible,” the potential environmental

impact of “major federal actions significantly affecting the

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

§ 4332(2)(C). When this case was young, Longhorn and the

Federal Defendants argued the Pipeline is not a “major

federal action” under NEPA because the Pipeline is pri-

vately owned and operated. Five federal agencies — FERC,

DOT, EPA, the Army, and the Army Corps of Engineers —

therefore ‘refused to assume responsibility for conducting

an environmental review under NEPA of the Pipeline. The

parties clung to this position despite Longhorn’s plans to

use the Pipeline to transport petroleum products to other

states and perhaps Mexico; despite Longhorn’s need to

obtain an easement over Army-owned Fort Bliss in El Paso

County to complete the Pipeline; despite the Army Corps

of Engineers’ authority over pipeline construction and

modification affecting navigable waterways; and despite

* The plaintiffs also originally named the Federal Energy Regula-

tory Commission (“FERC”) as a defendant, but the Court dismissed

FERC because it was only involved in ratemaking.

* The Court dismissed the LCRA with prejudice pursuant to Rule

41 of the Federal Rules of Civil Procedure on March 5, 2002 after the

LCRA entered into a settlement with the EPA, DOT, United States, and

the Army (collectively, the “Federal Defendants”) in May 2001. -

24a

the location of the Office of Pipeline Safety (“OPS”), which

is charged with administering DOT regulations to ensure

pipeline safety, within the DOT. Needless to say, this Court

found the federal agencies’ conclusion that the Pipeline did

not constitute a “major federal action” under NEPA not

only arbitrary and capricious, but ridiculous, and on

August 25, 1998, ordered the DOT and/or the EPA to

conduct an environmental impact stetement concerning

the Pipeline in accordance with NEPA. See Order of Aug.

25, 1998, at 33-34. The Court also enjoined Longhorn from

placing petroleum products into the Pipeline until this

Court, the Fifth Circuit, or the United States Supreme

Court orders otherwise. See id., at 32.

On March 1, 1999, the parties entered into a Settle-

ment Stipulation, under which the EPA and DOT agreed

to prepare an environmental assessment (“EA”) of the

Pipeline. The EA would culminate in a Finding of No

Significant Impact (““FONSI”)-or a notice of intent to

prepare an Environmental Impact Statement (“EIS”). On

March 5, 1999, the Court signed an Agreed Order vacating

its previous injunction and enjoining Longhorn from

placing petroleum products in the Pipeline until thirty (30)

days after the agencies issued an EA decision, but not

pri-r to Longhorn’s implementation of mitigation meas-

ures upon which a FONSI might be conditioned and that

are required to be implemented prior to or upon startup

and the lead federal agency’s approval of those measures.

See Agreed Order of Mar. 5, 1999. The Agreed Order stated

if the agencies issued a FONSI, the Plaintiffs could apply

to the Court within 30 days to extend the injunction on the

basis that the FONSI is arbitrary and capricious, an abuse

of discretion, or otherwise not in accordance with law

25a

under the Administrative Procedure Act (“APA”), 5 U.S.C.

§ 706. See id.

In accordence with the Settlement Stipulation, the

EPA and DOT prepared an EA along with their third-party

contractor URS Corporation (formerly Radian Interna-

tional) (“Radian”). On Oc.ober 29, 1999, the agencies

released the draft EA and preliminary FONSI for public

review and comment. See 64 Fed. Reg. 58404. The agen-

cies held public hearings on the draft EA and FONSI in

Austin, Houston, Fredericksburg, Bastrop and El Paso,

and distributed hundreds of copies of the EA and FONSI

in counties along the pipeline. Id. In addition to oral

comments at the hearing, the agencies received over 6,000

written comments, which they responded to as described

in Volume 4 of the final EA. On July 17, 2000, the agencies

wrote a letter to George T. Frampton, Jr., the Acting Chair

of the White House Council on Environmental Quality

(“CEQ”)’ informing Frampton they “have reached an

impasse on how to conclude the NEPA process” due to a

“difference of view” and asking for the CEQ’s recommenda-

tion on whether to complete an EIS or issue a FONSI.

Plaintiffs’ Motion for Summary Judgment, Ex. 10 (“Joint

Letter”), at 1, 2. In the letter, the agencies disclosed the

“Department of Justice has advised us that, on the present

state of the record, it could defend either a FONSI or an

EIS, and that the choice is a policy choice for our two

agencies.” Id. at 2. The record strongly supports the

* The CEQ promulgates regulations under NEPA that “tell federal

agencies what they must do to comply with the procedures and achieve

the goals of [NEPA].” 40 C.F.R. § 1500.1. The regulations are binding on

federal agencies.

°6a

‘nference that the EPA supported preparation of an EIS,

while the DOT preferred to issue a FONSI.

On September 7, 2000, the CEQ handed down a

response to the agencies’ request, recommending the

agencies “now promptly finalize the EA and prepare a

Finding of No Significant Impact.” Plaintiffs’ Motion for

Summary Judgment, Ex. 14 (“Frampton Letter”), at 1. The

CEQ concluded “virtually nothing could be gained in terms

of useful environmental inforiation or analysis by ‘redo-

ing’ this extensive document as an EIS, other than sheer

delay.” Id at 3. On November 3, 2000, the EPA and DOT

:ssued a FONSI along with the final EA. See Federal

Defendants’ Notice of Filing Finding of No Significant

Impact and Final Environmental Assessment [# 159], Att.

A (“FONE”).

On February 5, 2001, the Court entered an Order

allowing Plaintiffs to amend their complaints and setting

deadlines for Plaintiffs to file objections to Defendants’

privilege logs and to file motions to include additional

documents in the administrative record. See Order of Feb.

5, 2001. In their secor.d amended complaint, Plaintiffs

contend (1) the Federai Defendants’s decision to issue a

FONSI instead of preparing an EIS was contrary to NEPA

and its corresponding regulations and was arbitrary and

capricious in violation of the APA; and (2) the Defendants

breached the Settlement Agreement. See Second Amended

Complaint [# 201], at {J 51-53. The City and LCRA also

filed amended complaints.

On March 25, 2002, after conducting an in camera

review of nine volumes of documents the Federal Defen-

dants withheld as privileged, the Court ordered the

Federal Defendants to produce certain non-privileged

27a

documents to the Plaintiffs and ordered the parties to file

summary judgment motions. All parties filed summary

judgment motions on June 10, 2002. The Plaintiffs and

City argue the agencies’ decision to issue a FONSI instead

of prepare an EIS was arbitrary and capricious and urge

the Court to vacate the FONSI, require the EPA and DOT

to prepare an EIS and issue a Record of Decision concern-

ing the Pipeline, and enjoin Longhorn from placing refined

petroleum products into the Pipeline until thirty days

after the issuance of the Record of Decision or until further

order of this Court, the Fifth Circuit, or the United States

Supreme Court. Additionally, the Plaintiffs and City seek

summary judgment on their claim that the Defendants

breached the Settlement Agreement. The Federal Defen-

dants and Longhorn contend the decision to issue a FONSI

was not arbitrary and capricious, the agencies followed the

NEPA process, and the Defendants complied with the

Settlement Agreement. Over four years after the Plaintiffs

originally filed their NEPA challenge to the Pipeline, the

process has finally come to a conclusion.

Analysis

3. Standard of Review under NEPA

The Plaintiffs and City contend the agencies should

have prepared an EIS discussing the significant environ-

mental impacts of the Pipeline. Under NEPA, agencies

must prepare a detailed EIS for “major Federal actions

significantly affecting the quality of the human environ-

ment.” 42 U.S.C. § 4332(C). Preparation of an EIS “en-

sures that the agency, in reaching its decision, will have

available, and will carefully consider, detailed information

concerning significant environmental impacts, it also

guarantees that the relevant information will be made

28a

available to the larger audience that may also play a role

in both the decisionmaking process and the implementa-

tion of that decision.” Robertson v. Methow Valley Citizens

Council, 490 U.S. 332, 349, 109 S.Ct. 1835, 1845 (1989).

Agencies are not required to prepare an EIS “for a non-

major action or a major action which does not have a

significant impact on the environment.” Sierra Club v.

Hassell, 636 F.2d 1095, 1097 (5th Cir. Unit B 1981). Agen-

cies may first prepare an EA to determine whether a _

project’s potential impacts on the environment are signifi-

cant. 40 C.FR. § 1508.9 (EA serves to “provide sufficient

evidence and analysis for determining whether to prepare

an environmental impact statement or a finding of no

significant impact.”). After preparing an EA, an agency

may issue a FONSI “if the agency determines on the basis

of the environmental assessment not to prepare [an EIS].”

40 C.FR. § 1501.4(e).

All parties agree NEPA provides a process only; it does

not guarantee a result. Robertson, 490 U.S. at 350, 109

S.Ct. at 1846 (1989) (NEPA “does not mandate particular

results, but simply prescribes the necessary process.”).

Because NEPA offers only procedural requirements, not

substantive environmental requirements, it “only prohib-

its uninformed — rather than unwise — agency action.”

Robertson, 490 U.S. at 351, 109 S.Ct. at 1846. Given the

absence of substantive rights within the statute, the “only

role for a court is to insure that the agency has taken a

‘hard look’ at environmental consequences, it cannot

‘<nterject itself within the area of discretion of the execu-

tive as to the choice of the action to be taken.’” Kleppe v.

Sierra Club, 427 U.S. 390, 410 n.21, 96 S.Ct. 2718, 2730

(1976) (citations omitted).

29a

Because NEPA provides no independent right of

action, plaintiffs must challenge agencies’ NEPA decisions

under the APA. Under the APA, courts must uphold

agency decisions unless the decision is “arbitrary, capri-

cious, an abuse of discretion, or otherwise rot in accor-

dance with law.” 5 U.S.C. § 706(2)(A). Therefore, the

prohibitively narrow question before this Court is whether

the agencies’ finding that the Pipeline would have no

significant environmental impacts was arbitrary and

capricicus. The Court’s role is not to decide whether the

undersigned believes the Pipeline will have a significant

impact or even whether the agency's finding of no signifi-

cance is unreasonable. Marsh v. Oregon Natural Res.

Council, 490 U.S. 360, 109 S.Ct. 1851 (1989) (agency’s

decision not to prepare an EIS is reviewable under arbi-

trary and capricious standard), Sabine River Auth. v. U.S.

Dep't of Interior, 951 F.2d 669, 677 (5th Cir.), cert. denied,

506 U.S. 823 (1992) (abandoning “reasonableness” standard

in response to Supreme Court's holding in Marsh). The

Fifth Circuit has warned “[ulnder this highly deferential

standard of review, a reviewing court has the east latitude

in finding grounds for reversal’” of an agency decision and

“may not substitute its judgment for that of the agency.”

Sabine River, 951 F.2d at 678 (citation omitted).

In determining whether the agencies decision to issue

a FONSI rather than prepare an EIS was arbitrary or

capricious, the Court “must studiously review the record to

ensure that the agency has arrived at a reasoned judgment

based on a consideration and application of the relevant

factors.” Sabine River, 951 F.2d at 678. The relevant factors

are found in the CEQ regulation defining “significantly” for

NEPA purposes. To determine the sigmiicance of environ-

mental impacts, agencies must consider the “context” of the

30a

project and the “intensity” of the impacts. 40 C.FR.

§ 1508.7. The regulation identifies ten areas agencies

should consider in evaluating “intensity’>

(1) Impacts that may be both beneficial and adverse.

(2) The degree to which the proposed action affects

public health or safety.

(3) Unique characteristics of the geographic area

such as proximity. to historic or cultural resources, park

lands, prime farmlands, wetlands, wild and scenic rivers,

or ecologically critical areas.

(4) The degree to which the effects on the quality of

the human environment are likely to be highly controver-

sial.

(5) The degree to which the possible effects on the

human environment are highly uncertain or involve

unique or unknown risks.

(6) The degree to which the action may establish a

precedent for future actions with significant effects or

a decision in principle about a future considera-

represents

tion.

(7) Whether the action is related to other actions

with individually insignificant but cumulatively signifi-

cant impacts. Significance exists if it is reasonable to

anticipate a cumulatively significant impact on the envi-

ronment.

(8) The degree to which the action may adversely

affect districts, sites, highways, structures or objects listed

in or eligible for listing in the National Register of Historic

3la

Places or may cause loss or destruction of significant

scientific, cultural, or historical resources.

(9) The degree to which the action may adversely

affect an endangered or threatened species or its habitat

that has been determined to be critical under the Endan-

_ gered Species Act of 1973.

(10) Whether the action threatens a violation of

Federal, State, or local law or requirements imposed for

the protection of the environment.

40 C.FR. § 1508.27. The agencies must consider the above

factors when determining whether a project may have a

significant impact on the environment. A court may set a

FONSI aside if the agency fails to consider the above

factors or if the record shows the project may have a

significant impact on the environment or the agency’s

review process was so flawed the court cannot determine

whether the project may have a significant impact. Fritiof-

son v. Alexander, 772 F.2d 1125, 1238 (5th Cir. 1985),

overruled on other grounds by Sabine River, 951 F.2d at

677. The agencies need not demonstrate the project will

have absolutely no adverse effects on the environment.

E.g., Friends of Endangered Species, Inc. v. Jantzen, 760

F.2d 976, 987 (9th Cir. 1985) (“[S]o long as significant

measures are undertaken to ‘mitigate the project's effects,’

they need not completely compensate for adverse environ-

mental impacts.” (citation omitied)).

Il. Summary Judgment Standard

All parties move for summary judgment in this case. A

court may grant summary judgment if the moving party

shows there is no genuine issue of material fact, and it is

32a

entitled to judgment as a matter of law. See FED. R. Civ. P.

56(c). In deciding whether to grant summary judgment,

the Court construes all facts and inferences in the light

most favorable to the nonmoving party. Hart v. O’Brien,

127 F.3d 424, 435 (5th Cir. 1997), cert. denied, 119 S.Ct.

868 (1999). The standard for determining whether to grant

summary judgment “ig not merely whether there is & |

sufficient factual dispute to permit the case to go forward, ,

but whether a rational trier of fact could find for the

nonmoving party based upon the record evidence before

the court.” James v. Sadler, 909 F.2d 834, 837 (5th Cir.

1990).

Both parties bear burdens of producing evidence in

the summary judgment process. See Celotex Corp. v.

Catrett, 106 S.Ct. 2548 (1986). The moving party must

first show “if the evidentiary material of record were

reduced to admissible evidence in court, it would be

insufficient to permit the nonmoving party to carry its

burden of proof.” Hart, 127 F.3d at 435. The nonmoving

party must then provide “specific facts showing that there

is a genuine issue for trial,” and “(njeither ‘conclusory

allegations’ nor “onsubstantiated assertions’ will satisfy

the non-movant’s burden.” Matsushita Elec. Indus. Co. v.

Zenith Radio Corp.; 475 U.S. 574, 588 (1986); Wallace v.

Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996).

In a case like this one, where the Court is reviewing

an agency decision under the APA, summary judgment is

the appropriate means for resolving claims because the

Court is reviewing the legality of the agency action, not

acting as the initial factfinder. In an APA case, the Court

addresses the legal question of whether the agency action

was arbitrary and capricious, SO “the district court’s review

pursuant to a summary judgment motion cannot turn on

——— <<

33a

credibility determinations or conflicting factual infer-

ences.” Sabine River, 951 F.2d at 679. Therefore, the Court

finds summary judgment appropriate in this case.

Ill. The Record before the Court

Defendants move to strike documents and declara-

tions submitted by the Plaintiffs and City, arguing the

Court’s review of the agencies’ decision must be confined to

the administrative record. When reviewing an agency's

NFPA action under the arbitrary and capricious standard,

“the focal point for judicial review should be the adminis-

trative record already in existence, not some new record

made initially in the reviewing court.” Camp uv. Pitts, 411

U.S. 138, 142, 93 S.Ct. 1241, 1244 (1973). The administra-

tive record, which is designated by the agencies, consist of

“he full administrative record that was before the [ad-

ministrative officer] . . . at the time he made his decision.’”

Milena Ship Mgmt. Co. v. Newcomb, 995 F.2d 620, 624

(5th Cir. 1993), cert. denied, 510 U.S. 1071 (1994) (quoting

Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402,

415-16, 91 S.Ct. 814, 823-24 (1971). The Court cannot

conduct its own analysis of the potential environmental

impacts of the Pipeline based on unlimited evidence pro-

duced by both sides. Florida Power & Light Co. v. Lorion,

470 U.S. 729, 744, 105 S.Ct. 1598, 1607 (1985) (“The re-

viewing court is not generally empowered to conduct a de

novo inquiry into the matter being reviewed and to reach its

own conclusions-based on such an inquiry.”).

The Court can look outside the administrative record

under some limited circumstances, however. Sabine River,

951 F.2d at 678 (“A reviewing court is to review the admin-

istrative record as well as other evidence to determine

34a

whether the agencies adequately considered the values set

forth in NEPA and the potential environmental effects of

the project before reaching & decision on whether an

environmental impact statement was necessary.” (empha-

sis added) (quoting Hassell, 636 F.2d at 1097)). The Court

may complete the administrative record with documents

the agencies “directly or indirectly considered” when

making their decision but did not include in the adminis-

trative record. Bar MK Ranches v. Yuetter, 994 F.2d 735,

739 (10th Cir. 1993). If a draft document is not protected

by the deliberative process privilege, it should be included

in the administrative record. E.g.; Public Citizen v. Heck-

ler, 653 F.Supp. 1229, 1237 (D.D.C. 1987).

The Plaintiffs move to complete the administrative

record with its exhibits 13, 15, 16, 18, 21, 25, 27, 29, 35,

37, 38 and 41. The Defendants have not opposed this

motion. Having reviewed the exhibits, the Court finds they

contain non-privileged drafts and/or communications the

agencies directly or indirectly considered in arriving at the

FONSI decision. Accordingly, the Court considers these

exhibits as part of the administrative record. In an appar-

ent oversight, Longhorn did move to strike Exhibits 3, 4, 7

and 8 to Plaintiffs’ Response to the summary judgment

motions. However, the Court confirms these exhibits are

part of the administrative record the agencies designated,

and that motion is denied.

The City also submitted extra-record documents as

exhibits to its summary judgment motion. Longhorn moves

to strike four of these documents. The first, stamped USF &

W/6 & 7 01101, is a handwritten document titled “F & W

Position” and signed by Longhorn’s president, Carter

Montgomery. Longhorn contends there is no evidence the

agencies relied on this document. However, the document

35a

represents negotiations between Longhorn and the Fish &

Wildlife Service, which were crucial to the agencies’

issuance of the FONSI. See Frampton Letter, at 1. There-

fore, the agencies likely considered Longhorn’s concessions

to the Fish & Wildlife Service, and the motion to strike is

denied. The second and fourth documents, a letter dated

August 1, 2001 and a fax cover sheet dated November 29,

2001, came into being after the FONSI decision and are

therefore stricken. The City provides no evidence the third

document, entitled “Peak Streamflow for Texas,” was

considered by the agencies. Accordingly, Longhorn’s Motion

to Strike [# 320] is granted in part and denied in part.

Under more limited circumstances, the Court can

supplement the record with evidence not considered by the

agencies in making their decision. Because one question

before the Court is whether the agencies considered all

relevant factors, the Court can consider extra-record

evidence relating to the Plaintiffs’ allegations ,that the

agencies failed to consider all the relevant factors. E.g.,

Friends of the Payette v. Horseshoe Bend Hydroelectric Co.,

988 F2d 989, 997 (9th Cir. 1993) (“The extra-record

inquiry is limited to determining whether the agency has

considered all relevant factors and has explained its

decision.”). Otherwise, the Court would have no way of

discerning what relevant factors were missing from the

| analysis. Nat’l Audubon Soc’y v. Hoffman, 132 F.3d 7, 14

(2d Cir. 1997). Additionally, the Court can supplement the

t record when “necessary to explain technical terms or

complex subject matter.” Horseshoe Bend, 988 F.2d at 997.

However, plaintiffs cannot attempt to supplement the

record for the sole purpose of competing in a battle of

experts with an agency, because the Court must defer to

the agency’s selection of experts. Marsh, 490 U.S. at 378,

36a

109 S.Ct. at 1861 (“When specialists express conflicting

views, an agency must have discretion to rely on the rea-

sonable opinions of its own qualified experts even if, as an

original matter, a court might find contrary views persua-

sive.”); Sierra Club v. Froehlke, 816 F.2d 205, 214 (5th Cir.

1987) (scientific disagreements among experts “are not the

type that the federal courts are in business to resolve.”).

Both the Plaintiffs and the City submitted expert

declarations along with their summary judgment motions,

and the Defendants have moved to strike them because

they are not part of the administrative ,ecord. The Defen-

dants also argue the declarations are inadmissible under

Rule 702 of the Federal Rules of Evidence because the

experts have no expertise dealing particularly with pipe-

lines. However, the experts have other relevant areas of

expertise, including hydrology, environmental engineering,

statistics and environmental science. Additionally, the

Defendants contend some experts rely on information

obtained after the FONSI was issued. Citizen Advocates

for Responsible Expansion, Inc. (I-Care) v. Dole, 770 F.2d

423, 233 (5th Cir. 1985) (the reviewing court “must assess”

the reasonableness of the agency's determination on the

basis of information before the agency at the time the

decision not to prepare an KIS was made.”). Finally, the

Defendants contend the experts offer inadmissible legal

opinions. C.P. Interests, Inc. v. California Pools, Inc., 238

F 2d 690, 697 (5th Cir. 2001).

Because this Court’s task is to determine whether the

agencies took a “hard look” at the relevant factors in evalu-

ating the Pipeline’s significance, the declarations the

Plaintiffs and City submitted are admissible to the extent

they highlight relevant factors the agencies did not con-

sider. However, any legal conclusions and post-FONSI

37a

evidence within the declarations and argumentation offered

simply to contest the agencies’ experts are not admissible.

The Defendants’ motions to strike are granted in part and

denied in part accordingly.

Finally, the Plaintiffs move to strike the declaration of

J.P. Sullivan, Jr., which Longhorn relies upon in its oppo-

sition to Plaintiffs’ motion for preliminary injunction.

Longhorn incorporated the declaration by reference, and it

was filed in conjunction with civil action A-02-CA-001-SS,

which has been consolidated with this case. The Plaintiffs

contend they have not had an opportunity to depose

Sullivan. Because Longhorn has not asserted the reliabil-

ity of Sullivan, the declaration is stricken.

IV. Plaintiffs’ and City’s NEPA Claims

The agencies’ decision to issue the FONSI was de-

pendent upon Longhorn’s agreement to implement many

mitigation measures to reduce the environmental impacts

of the Pipeline below the threshold of significance. In

preparing the draft EA, the agencies employed a risk

assessment model developed by W. Kent Muhlbauer to

assess the physical integrity and risk of failure for ap-

proximately 8,000 segments of the Pipeline (“the Muhl-

bauer Model”). See FONSI, at 3. Taking into account

approximately 75 variables, the Muhlbauer Model pro-

duced numerical index sum scores, which are intended to

correlate with probability of failure. Jd.; EA Vol. 1, at ES-

12. Not surprisingly, the Pipeline scored poorly in this

initial evaluation, which indicated the Pipeline had a

higher probability of failure than the average pipeline.

FONSI, at 3. Longhorn would have to mitigate the risk to

avoid a significance finding. The agencies evaluated factors

38a

such as population density, proximity to surface and

ground water; and protected species habitat along the

Pipeline and designated segments of the Pipeline “normal”

(Tier 1), “sensitive” (Tier 2), and “hypersensitive” (Tier 3)

based on the potential dangers to the environment. Id., EA

Vol. 1, at 16. The agencies set target index sum scores for

each tier and directed Longhorn to develop a mitigation

plan that would reduce the risk in each tier to the target

score. FONSI, at 3-4. After Longhorn submitted its final

mitigation plan with 40 specific mitigation measures, the

agencies found the index sum scores had been reduced

such that the residual risk of environmental harm is not

significant. FONSI, at 10. In fact, the agencies found the

mitigation measures “should render Longhorn’s pipeline

among the safest in the nation and dramatically safer

than the minimum regulatory threshold established by

OPS regulations.” FONSI, at 10. The issue before this

Court is whether this finding of insignificance, and subse-

quent issuance of the “mitigated FONSI,” was arbitrary

and capricious. FONSI, at 15.

A. Political Influences

As an overarching concern, the Plaintiffs and City

contend the agencies predetermined the mitigated FONSI

from the beginning as a policy decision, and the agencies

simply tailored the EA to support that decision instead of

taking a true “hard look” at the environmental conse-

quences of the Pipeline. By inserting policy goals into the

NEPA process, the Plaintiffs argue, the agencies denied

their procedural NEPA rights. The Plaintiffs rely on the

joint letter from EPA and DOT seeking the CEQ’s recom-

mendation on how to conclude the EA process, which

states “the choice is a policy choice for our two agencies.”

39a

Joint Letter, at 2. Additionally, the Plaintiffs point to a

deposition of Edward Ray Clark, a CEQ employee at the

time of the FONSI, who testified about the “Clinton policy”

of integrating and coordinating environmental and eco-

nomic interests. See Plaintiffs’ Motion for Summary

Judgment, Ex. 1, at 148; 150. Clark also discussed the

abundance of lobbyists representing both sides of the case.

Id. at 62-63, 103-04. Clark specifically testified, however,

the White House did not use its influence to affect the

outcome of the EA. Id. at 74.

The Court has no doubt the White House’s policy goals

affected the ultimate decision to issue a FONSI, and

Longhorn’s expensive lobbyists may have been worth their

hourly rate. However, the agencies did not request the

CEQ’s assistance until July 2000, long after they released

the draft EA and preliminary FONSI in late October 1999.

In other words, the agencies gathered the information,

prepared the draft EA and received public commentary —

in short, took a “hard look” — before turning to the CEQ for

guidance. This Court’s task is to ensure the agencies took

a hard look at the relevant factors and to decide if their

decision was arbitrary and capricious. Reasonable dis-

agreement between two agencies based on a “difference of

view” does not render the FONSI decision arbitrary and

capricious, and an ultimate blessing by a political entity

does not erase the careful study and designation of mitiga-

tion measures reflected in the EA. Joint Letter, at 2.

While the existence of White House influence does not

spoil the EA process, it does add a certain stench to the

FONSI. The major relevant impact of that stench is on the

level of deference with which the Court views the decision.

Courts must generally defer to agencies’ factual determi-

nations that are based on agency expertise. Marsh, 490

40a

U.S. at 377, 109 S.Ct. at 1361 (“Because analysis of the

relevant documents ‘re~uires a high level of agency exper-

tise, we must defer to ‘the informed discretion of the

responsible federal agencies.” (quoting Kleppe, 427 U.S. at

412, 96 S.Ct. at 2731)). Although certain analysis within the

EA involves factual determinations, the CEQ’s participation

in the decision-making process inserts political policy goals

into the final FONSI decision. Thus, the Court need not

defer to the agencies’ expertise in the FONSI decision itself,

but may peer behind it into the EA. However, the Court’s

review of the FONSI decision is still limited to the highly

deferential arbitrary and capricious standard.

B. Enforcement of the Longhorn Mitigation Plan

Another major concern of the Plaintiffs and City is the

agencies’ reliance on the Longhorn Mitigation Plan

(“LMP”) in issuing the FONSI without a guarantee the

plan will be strictly enforced. The agencies acknowledge

the Pipeline, without mitigation, would have significant

impacts on the environment. See EA Vol. 1, at 9-1 (“The

Lead Agencies have determined that mitigation measures

are necessary to reduce the potential impacts of the

proposed project to a level of insignificance.”). With mitiga-

tion, the agencies predict the Pipeline will result in three

or fewer leaks in the next fifty years, twenty times less

than it would before mitigation. Jd. at 9-32-35.

The CEQ supports the issuance of FONSI decisions

that are dependent upon mitigation (“mitigated FONSIs”)

because a mitigated FONSI avoids the expense and delay

of an EIS, giving the project applicant an incentive to

volunteer mitigation measures beyond what agencies

could force it to adopt. See FONSI, at 15. In this case, the

3 ;

4la

agencies believe Longhorn’s voluntary mitigation meas-

ures as part of the FONSI are more comprehensive than

they would be following an EIS. Jd. at 16 (“[T]he Longhorn

EA has resulted in greater mitigation than would likely

result from the EIS process.”).

The Fifth Circuit has acknowledged courts should

consider mitigation measures when evaluating an agency's

decision not to prepare an EIS. Louisiana v. Lee, 758 F.2d

1081, 1083 (5th Cir. 1985) (“[T]he only realistic course of

action is to consider the conditions in reviewing the

[agency’s] decision not to file the impact statement.”).

Other circuits have upheld mitigated FONSIs under the

arbitrary and capricious standard. E.g., Greenpeace Action

v. Franklin, 14 F.3d 1324, 1335 (9th Cir. 1993); Audubon

Soc’y of Central Arkansas v. Dailey, 977 F.2d 428, 435-36

(8th Cir. 1992); Roanoke River Basin Ass’n v. Houston, 940

F.2d 58, 62 (4th Cir. 1991); C_A.R.E. Now, Inc. v. FAA, 844

F.2d 1569, 1574 (11th Cir. 1988); Cabinet Mountains

Wilderness v. Peterson, 685 F.2d 678, 682 (D.C. Cir. 1982).

The Plaintiffs and City do not contend the mitigated

FONSI is improper; instead, they express concern about

whether the LMP will be enforced. Enforceability of

mitigation measures is an important factor for the Court

to consider. Lee, 758 F.2d at 1083 (“This is not an instance

where the proposed mitigating conditions consist of vague

statements of good intentions by third parties not within

the control of the agency. ... Rather, here the conditions

are legally enforceable by the [agency].”). The City takes

issue with Longhorn’s freedom to choose the mitigation

measures in negotiation with Radian, implying Longhorn

weaseled out of some mitigation requirements by taking

control of the process. See City’s Motion for Summary

Judgment, Ex. J at URS 022550, 000035. However, it is

42a

important to recall Longhorn is the project applicant and

as such is responsible for mitigating the Pipeline’s risk

below a level of significance, so is logically more involved

in designing mitigation measures than the agencies.

Additionally, many of Longhorn’s mitigation promises go

beyond what the agencies could require under law. EA Vol.

1, at 9-1 (“These mitigation measures, in many cases, go

substantially beyond the legal requirements that apply to

U.S. hazardous liquid pipelines.”).

While the agencies could not have required such

mitigation measures, the LMP enables the agencies to

monitor and enforce them. First, Longhorn committed to

the mitigation measures unless authorized to modify them

by the DOT. EA Vol. 1, at 9-55; Vol. 2, App 9C, at 51. As

the EA notes, “This restriction on their operating control is

not placed on any other pipeline in the country.” EA Vol. 1,

at 9-55. Additionally, under DOT regulations, pipeline

companies must adhere to the procedures in their own

operation and maintenance manual. 49 C.FR.

§ 195.401(a). Longhorn has incorporated the LMP into its

operation and maintenance manual. EA Vol. 4, at 9-29.

The DOT will monitor Longhorn through progress reports

on the mitigation plan Longhorn must submit quarterly

the first two years and annually thereafter. EA Vol. 1, at

ES-23; 9-13. Longhorn will make these progress reports

available to the public via its web site. Id.; EA Vol. 2, App.

9C, at 50.

The City contends even if the DOT has the authority

to enforce the LMP, it will likely not do so because of the

OPS’s pathetic enforcement record. See City’s Motion for

Summary Judgment, Ex. A at DOT 005850; DOT 005150;

OR/DOT 005490. However, if courts were to make deci-

sions based on federal agencies’ potential to be ineffectual,

43a

the words “arbitrary and capricious” would lose their

meaning. Additionally, unlike most other pipeline compa-

nies, Longhorn has committed to enact the measures and

file progress reports without waiting for the OPS to come

sniffing around the Pipeline.

Having reviewed the LMP and the record as a whole,

the Court finds the agencies’ decision to rely on the LMP

in issuing the FONSI was not arbitrary and capricious.

Among other things, the LMP requires Longhorn to

replace the segment of pipe that runs through the Ed-

wards Aquifer recharge and contributing zones with thick-

walled pipe covered in concrete; perform an in-line inspec-

tion of the pipeline at least every three years; patrol the

sensitive and hypersensitive areas every two and a half

days, and the remaining areas weekly; enhance public

education programs to increase awareness; and refrain

from transporting products containing methyl tertiary

butyl ether (““MTBE”) or similar additives through the

Pipeline. EA Vol. 2, App. 9C, at 5; 14; 18-19; 29; 39; 42 &

49. Longhorn must hire a third-party contractor, approved

by the DOT, to conduct an operational reliability assess-

ment (“ORA”) of the Pipeline at least annually, and will

implement recommendations from the ORA as approved

by the DOT. EA Vol. 1, at 9-12-13. The LMP even requires

Longhorn to build a refugium for the Barton Springs

salamander, the City’s favorite bottom-dwelling reptilian.

EA Vol. 2, App. 9C, at 46-48. While these measures do not

and cannot confirm with absolute certainty the Pipeline

will be safe, the agencies’ risk assessment model indicates

the measures reduce the risk below a level of significance.

44a

C. Uncertainty of Mchlbauer Model

The agencies’ quantitative assessment of pre-and post-

mitigation risk relies upon the Mulhbauer Model. The

Plaintiffs and City contend this model is untested and the

results from it are necessarily uncertain. Uncertainty is a

factor for courts to consider under the CEQ’s definition of

“significance.” 40 C.FR. § 1508.27. The EA acknowledges

the index sum values, which the Mulhbauer Model uses to

measure probability of failure, “generally correlate” but do

not definitively correlate with failure probability. EA Vol.

1, at 9-8. Additionally, the “leak frequency estimates have

a high degree of uncertainty, primarily due to the limited

amount of data available.” Id. at 9-35.

While the Muhlbauer risk assessment may not be

absolutely certain, the record indicates the Muhlbauer

Model is the most widely accepted pipeline risk assess-

ment model available. EA Vol. 4, at 6-27 (the Muhlbauer

Model “appears to be the most widely adopted pipeline

risk model currently available.”). And as the Defendants

point out, the Plaintiffs do not suggest an alternative

model. Moreover, the agencies’ selection of the Mulhbauer

Model involves precisely the type of scientific expertise to

which courts must defer. The agencies selected the Muhl-

bauer model over contrary public commentary (as well as

internal debate), finding “i]t is well suited to the EA

application in terms of comprehensiveness and its ability

to indicate improvement opportunities (mitigations).” Id.;

Plaintiffs’ Motion for Summary Judgment, Ex. 19 at EPA

017009-11. The agencies acknowledged the uncertainty of

the predictions and ultimately decided the model was the

best available. EA Vol. 1, at 6-58 (“As with other estimates,

this approach has considerable uncertainty but is felt to be

the most realistic appraisal of post-mitigation leak rates.”).

45a

Most importantly, the Plaintiffs’ quibble with agencies’ use

of the Muhlbauer Model does not detract from the more

relevant fact that the agencies engaged in the NEPA

process and underwent an in-depth risk analysis of the

Pipeline.

The Plaintiffs and City also argue the agencies altered

the Muhlbauer Model by removing the consequences

portion of the analysis to support their FONSI decision.

The EA explains the agencies chose to omit the conse-

quences factor in favor of the ti2ring approach for analyz-

ing impacts. EA Vol.1, at 6-16; FONSI, at 3 n.3. This

‘alteration does not mean the agencies did not analyze the

impacts at all; it merely means the agencies made a choice

about which method would best suit this particular project

~— a choice that merits deference.

Finally, the Plaintiffs contend the agencies illogically

relied on spill data from the DOT/OPS database instead of

the historic spill data from the Exxon pipeline itself,

despite the inaccuracies within the DOT/OPS database.

See Plaintiffs’ Motion for Summary Judgment, Ex. 21-23.

The EA discusses the Exxon historical spill data and its

limitations. EA Vol. 1, at 5-78; 6-58-59. Additionally,

contrary to the Plaintiffs’ assertion, the agencies contend

the spill frequency estimates do utilize the historic spill

data. Id. at 5-78-79. The EA clearly does not ignore the

historic spill data from the Exxon pipeline, but discusses it

at length. Id. at 5-69-76. Therefore, this contention does

not demonstrate the agencies’ reliance on the Muhlbauer

Model was arbitrary and capricious.

D. Old Pipe

The Plaintiffs and City contend the agencies did not

adequately consider the dangers associated with the

approximately 450 miles of the Pipeline constructed in

1950. EA Vol- 1, at 3-2. They point specifically to electric

resistance welding (‘ERW”) pipe, which makes up over

fifty percent of the Pipeline and has a “higher susceptibil-

ity to certain failure mechanisms” than newer pipe. Id. at

5-7. ERW pipe has a longitudinal weld seam that renders

the pipe more vulnerable to corrosion and fatigue. Id. The

EA estimates ERW pipe was responsible for one major

spill and possibly six smaller spills during the Exxon

pipeline’s operation. Id. at 5-82. While ERW pipe is not

illegal, government agencies have issued advisories about

its use. Id. at 5-8.

Understandably, the age of the Pipeline concerned the

agencies, and the EA acknowledges and confronts those

concerns. To counter the effects of age, the agencies re-

quired mitigation measures. Based on hydrostatic (water-

pressure) testing and in-line (“smart pig”) testing of the

Pipeline in 1995, Longhorn has repaired and replaced

some pipe. Jd. at 5-11-15. In the LMP, Longhorn commit-

ted to further hydrostatic and in-line testing during the

operation of the Pipeline. EA Vol. 2, App. 9C, at 28-29."

5 The Plaintiffs and City contend the in-line inspection data from

1995 is no longer reliable, since the results are only valid for a finite

period. EA Vol. 1, at 5-13. However, the EA also notes “the opportunity

for operational-related anomaly growth was limited or non-existent

because the pipeline was not in operation since the 1995 inspection.” Id.

at 5-15. Additionally, Longhorn has committed to perferm further in-

line testing within three months of startup. FONSI, at

47a

The EA demonstrates the agencies acknowledged the

ERW pipe’s risks as a relevant factor in its significance

determination. The EA does not conceal the hazards of the

old pipe, but highlights them and addresses ways to

mitigate the danger. Ultimately, the agencies decided

Longhorn’s mitigation measures would adequately resolve

those dangers and reduce the project’s impact below the

level of significance. Congress has only authorized federal

courts to ensure the agencies considered all the relevant

factors and has not permitted this Court to decide whether

the Court would let Longhorn shoot gasoline through 52-

year-old pipe for 731 miles where failure would be disas-

trous for thousands of people and for years to come.

Unfortunately, on this record, the Court cannot say the

agencies did not consider the Pipeline’s age as a relevant

factor in its significance determination.

E. Pump Stations

The Plaintiffs and City protest that the agencies ignored

the environmental impacts of the nineteen pump stations

along the Pipeline, even though the pump stations are

clearly relevant to the probability of failure due to their

historic failure rate on the Exxon pipeline. Longhorn plans to

construct new pump stations and refurbish existing stations,

and at the time of the EA the agencies did not know where

all the future pump stations would be. EA Vol. 1, at 3-6-3-7;

3-1 n. 1; EA Vol. 2, App. 3D. The Exxon spill data shows four

times more major spills occurred af pump stations than

along the pipeline: 147 leaks in 29 years. Id. at 5-117; 6-18.

The agencies did exclude the pump stations from the

risk assessment analysis and probability of failure esti-

mates. EA Vol. 2, App. 9B at 9B-A-1 (“Pump stations are

48a

excluded from this [probability of failure] analysis, but

could be dealt with separately in a similar manner.”). As

. the EA explains, the agencies decided not to include the

pump stations in the risk assessment analysis because

pump stations have different risk considerations than the

rest of the Pipeline. EA Vol. 1, at 6-18. Additionally, the

predictive power of the historic leak data for the Exxon

pump stations is limited because Longhorn has completely

refurbished the old stations and has constructed (or will

construct) at least a handful of brand-new stations. Id.

Instead of applying the risk assessment analysis to the

pump stations, Longhorn analyzed and will analyze each

pump station using Hazard and Operability Studies

(“HAZOPS”), a risk assessment technique that “relies on a

structured and comprehensive question-answer approach

and expert participants to identify and remedy potential

safety and operability issues.” EA Vol. 1, at 9-25; Vol. 4 at

6-3; 6-33. The EA addresses a January 1999 HAZOPS

analysis of the existing pump stations, concluding

“(rlesults of these studies revealed some safety and oper-

ability issues that did not appear to be critical.” EA Vol. 1,

at 6-19. The agencies determined the HAZOPS analysis is

the appropriate risk assessment method for the Pipeline’s

pump stations.

Additionally, Longhorn has committed to important

mitigation measures concerning its pump stations. Because

new pump stations may be located over karst aquifers,

Longhorn must prepare site-specific environmental studies

for each new pump station at ieast 180 days before con-

struction begins. EA Vol. 1, at 7-92; Vol. 2, App. 9C at 49.

Additionally, the above-ground storage tanks within the

pump stations will be surrounded by secondary contain-

ment systems. EA Vol. 2, App. 9C at 42. While only five

49a

percent of the volume of pump stations spills from the

Exxon pipeline occurred after 1982, most of those spills

were attributed to tank problems. EA Vol. 1, Figs. 5-17, 5-

18; Plaintiffs’ Motion for Summary Judgment, Ex. 34. Pump

stations are fenced and locked, although unmanned, and

will be under video surveillance. EA Vol. 1, at 6-18; Vol. 2,

App. 9C at 40. Each pump station will be remotely con-

trolled and operated by the centralized Supervisory Control

and Data Acquisition (“SCADA”) system in Tulsa, Okla-

homa. EA Vol. 1, at 5-22. Additionally, the stations can be

locally controlled by emergency shutdown devices and

alarms located at each station, and low suction pressure

will cause the pump to shut down automatically. Id. at 5-23.

Longhorn has also committed to pump station inspections

every two and a half days in sensitive and hypersensitive

areas. EA Vol. 2, App. 9C at 39.

The EA demonstrates the agencies did consider the

risks associated with pump stations, even though they did

not include pump stations in the risk assessment analysis.

Based on the causes of Exxon pump station spills and

Longhorn’s mitigation commitments addressing those

causes, the agencies found the minor leaks that could

occur at pump stations would be “generally small, confined

to the facility site, quickly discovered, and soon remedied.”

FONSI, at 11 n.9. In other words, the agencies considered

the pump stations as a relevant factor and determined

their risk to be insignificant.

F. Impacts on Water Supply

Chapter 7 of the EA devotes a section to impacts on

ground water and a section to impacts on surface water.

Nevertheless, Plaintiffs contend the EA fails to analyze

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the Pipeline’s impacts on private wells and the Edwards-

Trinity Aquifer. The City attacks the EA’s water modeling

studies concerning surface water. The Court will not

critique the agencies’ chosen water modeling methodology,

because the choice of methodology deserves deference. The

Court will, however, address the Plaintiffs’ claims that the

agencies did not consider the relevant factors concerning

the Edwards-Trinity Aquifer or private wells.

The EA defines the location of the Edwards-Trinity

Aquifer, which is one of the largest aquifers in Texas, and

describes it as “highly vulnerable to contamination.” EA

Vol. 1, at 4-20-21. The EA discusses the potential for karst

features and the associated increase in vulnerability of

ground water resources. Id. at 4-24-25; 7-27.-Although the

FA acknowledges not much study has been done on the

Edwards-Trinity Aquifer and the agencies did not perform

a ground water modeling study on it,’ the EA describes the

characteristics of the aquifer and estimates “any spill of

500 bbl or greater has a 50 percent probability of occurring

at a place where it is more likely to impact ground water

supplies.” Id. at 7-25; 7-28. The EA classifies this estimate

as “conservative.” Id. at 7-28. Thus, contrary to Plaintiffs’

‘ The Plaintiffs seem to argue the agencies should have commis-

sioned an in-depth study of the Edwards-Trinity Aquifer before

reaching the FONSI decision. However, such in-depth study is not

required by NEPA, and the agencies would not have been obligated to

perform such a study even as part of an EIS. E.g., Utah Shared Access

Alliance v. United States Forest Serv., 288 F.3d 1205, 1211 (10th Cir.

2002) (“The Forest Service concedes it did not undertake a comprehen-

sive watershed study on the magnitude of the one described in the

[Guide to Predicting Sediment Yields], but correctly points out that

NEPA did not mandate such a massive study as a prerequisite to

action.”) (citing Sierra Club v. Lynn, 502 F.2d 43, 61 (5th Cir. 1974)).

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assertions, the agencies discussed the relevant features of

the Edwards-Trinity Aquifer and reached-.a conclusion

about its vulnerability to leaks and spills. Additionally, one

of the appendices to the EA is a technical memorandum

prepared for Radian regarding groundwater modeling for

certain aquifers; this document discusses the Edwards-

Trinity Aquifer for ten pages. After studying the aquifer,

the agencies’ decision not to classify the Pipeline located

atop the Edwards-Trinity Aquifer as sensitive or hyper-

sensitive is entitled to deference.

The Plaintiffs and City contend the agencies did not

take private wells into account in determining the Pipe-

line’s potential impacts on the water supply. It is true the

agencies did not consider private wells in their determina-

tion of sensitive and hypersensitive areas. EA Vol. 2, App.

7A, at 2; Vol. 1, at 7-32. However, the agencies did consider

the impact on private wells as “a criterion for requiring

additional mitigation measures for the entire pipeline, and

for requiring mitigation directed at addressing the needs

of well owners.” EA Vol. 1, at 7-32. While the draft EA

apparently assumed the private well owners could seek

remedies through litigation, the comments convinced the

agencies a solution that did not depend on at least a year’s

delay and legal fees would be preferable. EA Vol. 4, at 9-

37-38. Thrs, Longhorn provided a separate mitigation

plan for domestic water wells, whereby it will identify

private wells along the Pipeline, provide early warning to

owners in the event of a spill, monitor private wells for

contamination should a spill occur and provide mitigation

measures in the case of contamination. EA Vol. 2, App. 9F;

App. 9C at 45. The Plaintiffs argue the mitigation plan

only applies to wells within 2.5 miles on each side of the

Pipeline. While this may be a valid complaint, it is a far

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cry from contending the EA does not consider the relevant

factor of the Pipeline’s impacts on private wells. On the

contrary, the Court finds the agencies adequately consid-

ered this factor and concluded it was insignificant given

Longhorn’s mitigation plan addressing the potential

impacts. As a whole, the agencies gave in-depth considera-

tion to the Pipeline’s potential impacts on surface and

ground water sources and the potential for drinking water

contamination.

G. Five-Minute Shutdown

The Plaintiffs and City contend the EA relies on a

five-minute shutdown estimate that is unrealistic and

thereby underestimates the impact of a spill. They contend

the Pipeline can only shut down in five minutes in the

best-case scenario. The Plaintiffs point to reservations

agency and Radian personnel expressed about the feasibil-

ity of the Pipeline being able to shut down within five

minutes of detection of a spill. Plaintiffs’ Motion for Sum-

mary Judgment, Ex. 37; 40.

The Pipeline’s leak detection systems are part of

Longhorn’s mitigation plan. The five-minute shutdown

estimate is based on a worst-case scenario, a full breach of

the Pipeline and the accompanying large volume spill. The

SCADA system discussed above will detect a large-volume

spill and set off alarms in the remote monitoring center in

Tulsa, prompting personnel to shut down the remote-

controlled pumps and valves along the Pipeline. EA Vol. 4,

at 6-19; Vol. 2, App. 9C, at 31. The pumps can also shut

down automatically in response to low suction pressure,

which would result from a large leak. EA Vol. 4, at 6-19;

Plaintiffs’ Motion for Summary Judgment, Ex. 37. While

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the five-minute shutdown is only realistic for large leaks,

smaller leaks that take longer to detect will result in

approximately the same amount of volume discharged. EA

Vol. 2, App. 6B, Table 1. Longhorn has also committed to

install, prior to startup, a hydrocarbon sensing leak

detection cable system in the Edwards Aquifer Recharge

Zone and the Slaughter Creek watershed of the Edwards

Aquifer Contributing Zone, which will detect a leak of

.0030467 barrels per hour in twelve to 120 minutes. EA

Vol. 2, App 9C, at 32.

The record demonstrates the agencies considered the

same concerns the Plaintiffs and City raise and required

Longhorn to clarify and justify the five-minute response

time. Plaintiffs’ Motion for Summary Judgment, Ex. 40.

The agencies did not blindly rely on the estimate or fail to

explain or discuss it in the EA. While the Plaintiffs and

City may be skeptical the leak detection system will

actually work, this skepticism is not grounds for finding

the agencies’ decision arbitrary and capricious.

H. Cumulative Impact of Other Pipelines

_ The Plaintiffs and City allege the agencies failed to

consider the potential cumulative impacts of the Pipeline

from its shared corridor with other pipelines. The CEQ’s

regulatory definition of “significance” requires agencies to

consider “[w]hether the action is related to other actions

with individually insignificant but cumulatively signifi-

cant impacts. Significance exists if it is reasonable to anti-

cipate a cumulatively significant impact on the environ-

ment.” 40 C.F.R. § 1508.27. The United States Court of

Appeals for the District of Columbia Circuit recently held the

Federal Aviation Administration should have considered

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the cumulative impact of construction of a new airport on

noise pollution in a nearby national park. Grand Canyon

Trust v. Fed. Aviation Admin., 290 F.3d 339, 347 (D.C. Cir.

2002). In analyzing cumulative impacts, agencies should

consider: “(1) the area in which effects of the proposed

project will be felt; (2) the impacts that are expected in

that area from the proposed project; (3) other actions —

past, proposed, and reasonably foreseeable — that have

had or are expected to have impacts in the same area; (4) -

the impacts or expected impacts from these other actions;

and (5) the overall impact that can be expected if the

individual impacts are allowed to accumulate.” Fritiofson,

772 F.2d at 1245.

Chapter 7 of the EA discusses cumulative impacts of

the Pipeline and concludes there are no cumulative im-

pacts from construction or normal operation of the Pipe-

line. EA Vol. 1, at 7-86-87. The EA also addresses the

potential cumulative impacts from the other pipelines

located along the same corridor as the Pipeline. EA Vol. 1,

at 7-87; Vol. 4, at 6-44. Longhorn shares a corridor with

several other pipelines and runs parallel to two of them for

approximately 265 miles, one of which transports crude oil

and the other natural gas. EA Vol. 1, at 7-88. The EA

details the proximity of the parallel pipelines and the

potential safety risks such as exposed pipe. Jd. at 7-89-90. .

Because “(t]he potential influence of one pipeline on

another would depend on the separation distances be-

tween pipelines,” the agencies examined the distance

between the pipelines, especially in Harris and Travis

Counties. Jd. at 7-89. The pipelines do not come within 19

feet of each other. Id. at Table 7-11. The agencies noted

“{mlultiple pipelines result in a higher absolute risk to a

receptor than a single pipeline(s) in the same vicinity.

° Soa Banta

PE nF POEL OY o Sane Pee

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Assuming pipelines pose the same risk, the combined risk

would be three times the risk of one pipeline.” Jd. at 7-90.

Despite the greater combined risk, the agencies “concluded

that the likelihood of such an accident is low,” because the

DOT knew of only one accident in ten years where a

‘pipeline explosion has caused damage to an adjoining

pipeline. Jd. Based on this conclusion, the agencies did not

include the potential for a chain reaction in the formal risk

assessment analysis. Id. at 6-26. The agencies also noted

the potential benefits of multiple pipelines such as in-

creased surveillance and public awareness. Jd. at 7-91.

While the Plaintiffs critique the EA’s analysis of cumula-

tive impacts, they cannot show the agencies failed to

consider them. On the contrary, the EA analyzes the

general cumulative impacts of the Pipeline and the specific

issue of proximity of other pipelines.

I. Third-Party Damage and Sabotage

The Plaintiffs and City contend the agencies did not

adequately consider the impacts of third-party damage,

particularly sabotage, when third-party damage was the

primary cause of spills on the Exxon pipeline. EA Vol. 1, at.

5-82 (“The primary cause of pipeline spills of 50 bbl or

greater in size has been outside force.”). The potential for

third-party damage is exacerbated by exposed and shal-

lowly buried pipe. Jd. at 5-81 (discussing shallowly buried

pipe). The EA addresses the vulnerability of exposed pipe

and shallowly buried pipe. Jd. at 5-19 (“Exposed pipe,

while reducing the chance of accidental damage from

excavation strikes, might be a concern because of the

increased vulnerability to outside force damage other than

excavation (e.g. vandalism) and because of the potential

for coating deterioration and atmospheric corrosion. It is

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not clear whether an exposed pipe has more risk of third-

party damage than buried pipe. It is often assumed that

shallow burial, less than six inches, for example, is worse

than a full exposure since the cover is inadequate to

provide much protection, but does conceal the presence ot

the pipeline.”). Longhorn surveyed the exposed pipe and

the EA identifies the exposed areas. Id.; see also Figure 5-

10; Table 7-8. The EA also considers the vulnerability of

exposed pipe at stream and ditch crossings. Id. at 5-21

(“[S]maller stream and ditch crossings in the Houston

erea, where there is potential vulnerability to vandalism,

show evidence of use as foot bridges, graffiti painting, and

tampering with the protective coatings. ).

In addition to describing the potential vulnerability of

the Pipeline to third-party damage, the EA includes third-

party damage as one of the four factors contributing to

probability of failure in the risk assessment analysis. Id.

at 6-24-25. The Plaintiffs attack the agencies’ decision not

to include the risk of sabotage in the formal risk assess-

ment. The EA explains the agencies’ decision as follows:

“The risk of sabotage is difficult to fully assess since such

risks are so situation-specific and subject to rapid change

over time. The assessment would be subject to a great deal

of uncertainty, and recommendations would be problem-

atic. This type of assessment is not thought to add signifi-

cant value to the EA.” Id. at 6-25. While the Plaintiffs may

not support this choice, the agencies considered the risk of

sabotage and made a reasoned decision not to include it in)

the risk assessment. However, Longhorn committed to

mitigation measures to address the risk of sabotage and

other third-party damage, including clear and bountiful

pipeline markers, frequent aerial and ground surveillance,

excavator education and public education. EA Vol. 2, App.

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9C at 89-92; App. 9B, at 9B-B-1.’ Accordingly, the Court

finds the agencies considered third-party damage and

sabotage as relevant factors in the EA analysis.

V. Breach of Settlement Stipulation -

While many of the above NEPA arguments relate to

the Plaintiffs’ and City’s claim of breach of the Settlement

Stipulation, some contentions relate more directly to their

contract claims. Under the Settlement Stipulation of

March 1, 1999, the agencies agreed to prepare an EA on

the Pipeline that (a) identifies surface and ground water

resources, land resources and uses, and flora and fauna in

the vicinity of the Pipeline; (b) discusses the environ-

mental consequences of the Pipeline, including a discus-

sion of pipeline integrity and a risk assessment analysis;

and (c) identifies and analyzes alternatives. EA Vol. 2, App.

1A. The Court finds the Defendants did not breach the

Settlement Stipulation in any of the areas discussed above.

The Court discusses the remaining breach arguments

’ The Plaintiffs take issue with Longhorn’s decision not to include

warnings to deer hunters in its educational materials. However, the EA

- addresses why Longhorn does not include such warnings. EA Vol. 4, at

5-16 (“Depending on the terms of specific easement agreements along

the [right of way], Longhorn would usually not have any control over

activities such as hunting. The control of hunting activities would

therefore be the responsibility of the respective landowners along the

ROW. At the current time, Longhorn does not plan to include comments

regarding hunting in its educational material.”). The Federal Defen-

dants’ assumption that hunting along the right of way is a “remote or

speculative” possibility, however, reminds the Court that the Depart-

ment of Justice is in fact located in Washington, D.C. Federal Defen-

dants’ Reply, at 38 n.13.

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below and concludes the Defendants complied with the

Settlement Stipulation.

A. Consideration of Alternatives

The Plaintiffs and City contend the EA does not

contain a sufficient analysis of alternatives to the proposed

project. This argument fails under NEPA, because the law

only requires the EA to contain “brief discussions” of the

alternatives to the proposed action. Fritiofson, 772 F.2d at

1236. The Settlement Stipulation requires the agencies to

identify a range of alternatives, including re-routing

alternatives that would avoid Austin and various aquifers,

consider the alternatives, and explain why the alterna-

tives are selected or eliminated from detailed study. EA

Vol. 2, App. 1A, at 27-29. Additionally, the agencies agreed

to “evaluate in detail those alternatives that are deter-

mined to be reasonable means of mitigating significant

environmental impacts.” Jd. at 29.

The Plaintiffs and City argue the agencies did not

truly consider the Austin re-route alternative but allowed

Longhorn to designate an alternative route that doomed it

to fail. The Settlement Stipulation does not prohibit

Longhorn from identifying the alternative routes. Long-

horn identified a 21-mile alternative route to replace a 12-

mile segment of the Pipeline located in highly populated

- south Austin. EA Vol. 1, at 4-13; Fig. 3-1. The alternative

would avoid approximately. 2,893 south Austin dwellings,

and “potential impacts to human health and safety resid-

ing near the Austin Re-Route are much lower than for the

proposed pipeline, based on this difference in population

density.” Id. at 7-16.

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Despite the current lower population density of the

alternative route, the EA notes “much of the areas of south

Tavis County and northern Hays County near and west of

the I-35 corridor are currently subject to heavy develop-

ment pressures.” Id. at 7-16, 7-83. Additionally, the alter-

native would pass over 8.2 miles of hypersensitive karst

aquifer, compared to the 3.0 miles of the existing Pipeline.

Id. at 7-35. The agencies recognized the difficulty of re-

routing the Pipeline further south due to the sensitivity of

the Edwards Aquifer and the potential impacts on the San

Marcos water supply and the endangered Barton Springs

salamander. Id. at 7-35, 7-42; see also 7-50, 7-69. There

would be additional environmental impacts from the 22

days it would take to construct the Pipeline. Jd. at 7-76.

These impacts render the Austin re-route alternative less

environmentally sound than the current route. Jd. at 9-50-

51. The EA demonstrates the agencies complied with the

Settlement Stipulation by identifying an alternative,

considering the positive and negative impacts of the

alternative, and abandoning the idea because of greater

environmental harm.

The agencies also afforded sufficient analysis to the

aquifer avoidance alternative. This alternative would veer

to the north, just south of Waco, and require construction

of 370 miles of new pipe. EA Vol. 1, at 7-8. The alternative

pipeline would have less affected population residing along

the route than the current Pipeline. Jd. at 7-17. Only

approximately 80 miles of the alternative route would pass

over karst aquifers, as opposed to 175 miles of the existing

Pipeline. Id. at 7-35. The EA describes the protected

species and water supplies along the alternative route. Id.

at 7-43-44, 7-50-52, 7-69. Construction of the new segment

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would last approximately 12 to 18 months, and up to 13

new pump stations would also need to be built. Id, at 7-77.

After considering and analyzing the aquifer avoidance

alternative, the agencies rejected the alternative. Although

the alternative would avoid Austin and the sensitive

aquifers in this region, the construction would cause short-

term impacts on the environment and, unlike the current

Pipeline route that is shared with other pipelines, would

expose a new population to pipeline risks. Id. at 9-48-49.

Additionally, the agencies determined “it is unlikely the

[alternative] wovid serve the proposed project’s purpose,

i.e. allowing Longhorn a means to transport refined

petroleum products to the markets in which it hopes to

compete. The additional costs of constructing 379 miles of

new pipeline, estimated at $300 million, would likely

eliminate Longhorn’s potential ability to compete in those

markets.” Id. at 3-17. Therefore, the agencies concluded

the aquifer avoidance alternative was not “a feasible

means of accomplishing fundamental project purposes.”

Id. This conclusion and the analysis leading up to it

complied with the Settlement Stipulation.

B. Environmental Justice Concerns

The Settlement Stipulation requires the agencies to

consider any environmental justice issues associated with

the operation of the Pipeline, including the location of pipe

in certain residential areas. EA Vol. 2, App. 1A, at 27. An

environmental justice analysis determines whether there

are any disproportionately high adverse human health or

environmental effects on minority or low-income popula-

tions. EA Vol. 1, at 8-1. The Plaintiffs and City contend the

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agencies did not adequately consider environmental

justice concerns.

The EA devotes an entire chapter to environmental

justice concerns. The agencies reviewed the potential

impacts of the project, the potential impacts on minority

and low-income populations, the potential disproportion-

ately adverse impacts, and the impacts of mitigation

measures. Id. at 8-3. The agencies concluded “the proposed

project would not have any disproportionately high and

adverse effects on minority and low-income populations

during normal pipeline operation scenarios. Furthermore,

there is no evidence of disproportionately high and adverse

effects along a majority of the pipeline in the event of a

pipeline failure.” Jd. at 8-1. The City contends the agencies

did not consider the effects of Longhorn’s replacement of

nineteen miles of pipe in southwest Austin, an apparent

concession to the Fish and Wildlife Service in exchange for

a Letter of Concurrence regarding the Pipeline’s effects on

the Barton Springs salamander, with no attendant provi-

sion of new pipe in southeast Austin. However, the agen-

cies did consider the environmental justice impacts of this

new pipe and concluded “mitigation measures proposed in

the LMP for Travis County provide an acceptable level of

protection to minority and low-income populations.” Jd. at

8-27-30. The Court finds the EA’s lengthy discussion and

analysis of environmental justice concerns satisfies the

Settlement Stipulation.

C. Involvement of Austin Fire Department

The Settlement Stipulation requires the agencies to

invite the Austin Fire Department to be a cooperating

agency, and the City contends the agencies failed to do so.

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There vre, the City argues, any emergency response plan

of Longhorn’s must be inadequate. However, the record

indicates the agencies did invite the Austin Fire Depart-

ment to participate in the EA process as a cooperating

agency on March 26, 1999. Longhorn’s Response to Sum-

mary Judgment Motions, Ex. 1. Additionally, in May 2002

the Fire Marshal rejected an invitation by Longhorn to

participate in emergency response drills. Id., Ex. 2. The

Court finds the agencies’ invitation to the Austin Fire

Department complied with the Settlement Stipulation.

Conclusion

Having reviewed the record, the Court finds the

FONSI complies with NEPA because “the agency decision

is founded on a reasoned evaluation of the relevant fac-

tors.” Utah Shared Access, 288 F.3d at 1213 (citing Marsh,

490 U.S. at 373-74, 109 S.Ct. 1851, 104 L.Ed.2d 377).

While the agency could have discussed some factors more

carefully, the Plaintiffs and City cannot say the EA iully

fails to discuss any relevant factor. Utah Shared Access,

288 F3d at 1213 (“It is true here, as it is in every case,

that the agency could have discussed the relevant envi-

ronmental impacts in greater detail.”). The EA in this case

was quite lengthy and detailed, and goes far beyond

NEPA’s requirements for an EA. Sabine River, 951 F.2d at

677 (“[T]he EA is a ‘concise’ document that ‘briefly’ dis-

cusses the relevant issues”) (quoting CEQ regulations

concerning NEPA). An EIS might result in more “excellent

paperwork,” but the Court agrees with the agencies that

an EIS would provide essentially nothing more to ease the

fears of the Plaintiffs and Austin residents. 40 CFR.

§ 1500.1 (‘NEPA’s purpose is not to generate paperwork —

even excellent paperwork — but to foste excellent action.”).

63a

The leftover uncertainties result from the unavailability of

data and the simple fact that predictions based on mitiga-

tion measures that have not yet been done are necessarily

uncertain. What the Plaintiffs and City really want — no

gasoline flowing through the Pipeline, certainly not

through 52-year-old pipe, through our backyards and over

our aquifers — would not be accomplished through an EIS.

While this case is about the Pipeline, it is more

essentially about following a process that Congress guar-

anteed to Americans. As described above, the Court finds

the agencies made good on Congress’s promise and fol-

lowed the process. This Court is part of the process too, for

the balance of power that is the basic and fundamental

process keeping the federal government afloat requires

federal courts to defer to Congress’s statutory restriction of

courts’ role in the NEPA process and delegation of author-

ity to administrative agencies. The undersigned personally

is extremely concerned Longhorn will begin pushing high-

grade gasoline through the Pipeline in less than a month,

which it has assured the Court it intends to do. The Court

finds no consolation whatsoever in the fact that Longhorn

is a limited partnership with limited liability and has only

$15 million of liability insurance. Had the Court been

granted more discretion, at a very minimum the under-

signed would find it reasonable to order Longhorn to

replace the 52-year-old pipe in all populated areas and in

areas that affect people’s drinking water supply. However,

the Court has no such discretion and recognizes the

importance of staying within the sharp boundaries of

judicial review. And while the Plaintiffs and the City are

undoubtedly far from excited about the Pipeline’s immi-

nent startup, the Court hopes they find some reassurance

in Longhorn’s “unprecedented” mitigation measures for

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the Pipeline, which likely would not have come about but

for their fervent and articulate NEPA challenge. The

mitigation measures are & product of the effective process.

Time will only tell if the mitigation measures will be

sufficient to contain the dangers inherent in this decrepit

Pipeline, and the people and critters in its threatening

shadow can only hope and pray that they will.

And finally, the Court turns to the costs of suit. The

Plaintiffs filed this lawsuit seeking the only legal relief

available, and that was an investigation of this Pipeline

with regard to environmental impacts under NEPA. The

Federal Defendants disclaimed any responsibility, and all

Defendants contended this Court could not have jurisdic-

tion and there were no lawful procedures available to the

Plaintiffs to obtain a NEPA investigation. The Plaintiffs

won relief in several ways. First, the government finally

admitted its responsibility and selected the DOT’s Office of

Pipeline Safety as the responsible agency. Plaintiffs then

obtained an in-depth investigation of the Pipeline and

resulting EA, which took over a year and a half. Plaintiffs

also in the process received significant mitigation conces-

sions from Longhorn along with a commitment that the

OPS will ensure the completion of those mitigation fea-

tures and closely monitor this Pipeline that puts in jeop-

ardy thousands of people who live above it and many more

thousands of people who depend upon the water it runs

through.® Of course, the Plaintiffs did not get what they

* The undersigned hears frequently of his many weak personality

traits, but memory is not among them. Regardless of the OPS’s claim to

fame of having only nine employees to monitor all pipelines in the

southwest United States, the undersigned will not forget OPS’s

(Continued on following page)

65a

really wanted, which was to stop the Pipeline, but that

simply wasn’t in the cards dealt by the United States

Congress. Therefore, all costs will be taxed to the Defen-

dants, as this Court determines the Plaintiffs and City

were the prevailing parties, notwithstanding a take

nothing judgment.

In accordance with the foregoing:

IT IS ORDERED that the Plaintiffs’ Motion for Sum-

mary Judgment [# 295] is DENIED;

‘IT IS FURTHER ORDERED that the City of Austin’s

Motion for Summary Judgment [# 299] is DENIED;

IT IS FURTHER ORDERED that Defendant Long-

horn Pipeline Partners, L.P.’s Motion for Summary Judg-

ment [# 300] is GRANTED;

IT IS FURTHER ORDERED that the Federal Defen-

dants’ Motion for Summary Judgment [# 297] is

GRANTED;

IT IS FURTHER ORDERED that the Plaintiffs’

Motion to Extend the Injunction [# 201] and Request for

Preliminary Injunction [# 323] are DENIED;

IT IS FURTHER ORDERED that the City of Austin’s

Motion to Extend the Injunction [# 203] and Request for

Preliminary Injunctive Relief [# 308] are DENIED;

IT IS FURTHER ORDERED that Longhorn’s Motion

to Strike declarations filed by the City of Austin [# 311] is

commitment to enforce Longhorn’s mitigation measures and monitor

this Pipeline.

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GRANTED in part and DENIED in part, as discussed in

Part III above;

IT IS FURTHER ORDERED that Longhorn’s Motion

to Strike dec; ;ations filed by Plaintiffs [# 312] is

GRANTED in part and DENIED in part, as discussed in

Part III above;

IT IS FURTHER ORDERED that the Federal Defen-

dants’ Motion to Strike Plaintiffs’ declarations [# 315] is

GRANTED in part and DENIED in part, as discussed in

Part III above;

IT IS FURTHER ORDERED that Longhorn’s Motion

to Strike documents filed by City of Austin [# 320] is

GRANTED in part and DENIED in part, as discussed in

Part III above;

IT IS FURTHER ORDERED that Longhorn’s Motion

to Strike exhibits filed by Plaintiffs in support of their

summary judgment response [# 334] is DENIED;

IT IS FINALLY ORDERED that Plaintiffs’ Motion to

Strike Declarations of J.P. Sullivan, Jr. [# 337] is

GRANTED. :

SIGNED this the 19th day of July 2002.

/s/ Sam Sparks

SAM SPARKS

UNITED STATES

DISTRICT JUDGE

_ a Se ae eS TN

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[LOGO] [LOGO]

Research and

Special Programs

Administration

FINDING OF NO SIGNIFICANT IMPACT

NOV 03 2000

To Interested Agencies, Officials, Public Interest Groups,

and Individuals:

The Office of Pipeline Safety of the Research and Special

Programs Administration of the U.S. Department of

Transportation (OPS) and Region 6 of the U.S. Environ-

mental Protection Agency (EPA) have performed an

environmental assessment (EA) of a project proposed by

Longhorn Partners Pipeline, L.P. (Longhorn). Issuance of

this joint finding of no significant impact (FNSI) completes

review of the proposal under the National Environmental

Policy Act of 1969 (NEPA) and regulations implementing

that Act.

OPS possesses statutory responsibility for ensuring the

safe transportation of hazardous liquids by pipeline under

the Pipeline Safety Law, 49 U.S.C. §60101 et seg. To that

end, it has promulgated safety standards regulating the

design, construction, operation and maintenance of haz-

ardous liquid pipelines, currently codified at 49 C.F.R.

Parts 194, 195, and 199. OPS regulations are intended to

prevent spills and minimize adverse impacts when they

occur. OPS periodically evaluates the operating practices

and the physical condition of the pipelines it regulates and

may take appropriate enforcement action against opera-

tors which fail to comply with applicable regulatory

standards. There are important statutory constraints on

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OPS regulatory authority, however, including 49 U.S.C.

§60104(e), which specifically prohibits it from prescribing

pipeline routes. Requiring that an operator reroute its

pipeline to avoid potential problems is thus not a regula-

tory option available to OPS.

OPS has been delegated responsibility for reviewing and

approving facility response plans pipeline operators develop

under Section 311(j)(5) of the Clean Water Act, 33 U.S.C.

§1321(j)(5), as amended by the Oil Pollution Act of 1990. In

this case, OPS participated in the NEPA analysis provided

for in the settlement agreement sad will rely on the miti-

gated FNSI in deciding whether to approve Longhorn’s

response plan. The EA underlying this FNSI may also be

used by the Department of Defense in determining whether

to grant Longhorn a right-of-way across Fort Bliss.

Although it possesses enforcement and cleanup authority

over pipeline spills to surface waters, EPA has no direct

authority to regulate the construction or operation of

pipelines’ and does not contemplate using the EA on which

this FNSI is based in any future regulatory decision it may

make. It is participating as a Joint Lead Agency here

solely to bring its expertise in environmental issues and

the NEPA process to the proposal’s review.

" EPA Region 6 has issued a national pollutant discharge elimina-

tion system general permit authorizing discharges of storm water from

construction projects in Texas, an action exempt from NEPA require-

ments pursuant to Section 511(c)(1) of the Clean Water Act, 33 U.S.C.

§1371(c)(1). Longhorn submitted notices of intent to obtain coverage

under that general permit for storm water discharges associated with

pipeline construction.

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69a

BACKGROUND

In 1949 and 1950, Exxon Pipeline Company (EPC) con-

structed a pipeline to transport crude oil from Crane to

Houston, Texas, a distance of approximately 450 miles.

Few records are available reflecting earlier years, but

during the last 29 years in which EPC operated the

pipeline, it experienced 26 accidental releases. Shortly

after idling the pipeline in 1995, EPC sold it to Longhorn,

a limited liability partnership formed to transport refined

petroleum products (primarily gasoline) from Gulf Coast

refineries to El] Paso, Texas.’ To accomplish its purpose,

Longhorn commenced construction of an extension of the

old EPC pipeline from Crane to El Paso. The mainline

portion of the system (Houston to El Paso) consists of 18

and 20-inch diameter pipe and is about 695 miles long.

Longhorn also constructed a 28 mile lateral pipeline from

Crane to Odessa and proposes to construct three smaller

laterals in the El Paso area. The entire system, including

pipe in the laterals, is about 731 miles long.

Before Longhorn completed construction of the system,

private citizens and the Barton Springs — Edwards

Aquifer Conservation District filed an action (Spiller v.

Walker, Civil No. A-90-CA-255-SS (W.D. Tex.)) against

Longhorn and various federal agencies, including the

Federal Energy Regulatory Commission, Department of

* El Paso is a staging area for pipeline shipments of gasoline

further north, west and south and most gasoline currently used in and

shipped from E] Paso is now refined locally or in New Mexico. Lower

Gulf Coast refining costs and use of the existing EPC infrastructure are

factors Longhorn hopes will allow successful competition in the El] Paso

“gateway market” despite greater transport distances.

70a

Defense, OPS, and EPA, alleging Longhorn should not be

allowed to use the pipeline until the federal government

prepared an environmental impact statement (EIS) under

NEPA §102(2)(C), 42 U.S.C. §4332(2)(C). The City of

Austin and the Lower Colorado River Authority (LCRA)

intervened in that action as plaintiffs.

On August 25, 1998, the Federal District Court for the

Western District of Texas issued an order preliminarily

enjoining ope

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