Save Our Cumberland Mountains, Appalachian Voices, the Sierra Club and Southern Appalachian Biodiversity Project v. Dirk Kempthorne, Secretary of the United States Department of the Interior, in His Official Capacity Jeffrey Jarrett, Director of the United States Office of Surface Mining Reclamation and Enforcement, in His Official Capacity and Tim Dieringer, Director of the Knoxville Field Office of Surface Mining Reclamation and Enforcement, in His Official Capacity, National Coal Corporation, Intervenor-Defendant-Appellee

Citations: 453 F.3d 334; 36 Envtl. L. Rep. (Envtl. Law Inst.) 20118; 62 ERC (BNA) 1833; 2006 U.S. App. LEXIS 16296Docket: 05-5663

Court: Court of Appeals for the Sixth Circuit; June 29, 2006; Federal Appellate Court

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Four environmental organizations filed a lawsuit against the Office of Surface Mining and Reclamation, part of the Department of the Interior, alleging an abuse of discretion in its environmental assessment of the National Coal Corporation's application to mine approximately 1,100 acres in the Cumberland River watershed of northeastern Tennessee. The plaintiffs contended that the agency failed to conduct a thorough examination of the project's environmental impacts, as required by the National Environmental Policy Act (NEPA), and that its finding of no significant environmental impact was arbitrary. The district court ruled in favor of the agency, noting that the extensive record and the modifications made to the mining application in response to agency concerns demonstrated no abuse of discretion. 

However, the court expressed concern regarding the agency's limited scope in considering alternatives to the proposed mining, which it found unduly restrictive. Despite this, the court affirmed the decision because the agency effectively considered other options, primarily modifications that reduced environmental harm, and the plaintiffs did not propose any concrete alternatives that had been overlooked. The case arose from the coal corporation's June 28, 2002, application for a permit for various mining operations, commonly referred to as strip mining.

A coal company applied for a permit to mine and build support structures on 1,148.7 acres of a 2,107-acre area, planning a ten-year mining project that would return most of the affected land to its natural contours, including 412 acres of previously mined land. The application complied with the Surface Mining Control and Reclamation Act of 1977, which required public notification and solicitation of comments from various government agencies and environmental organizations. An informal conference held on October 17, 2002, garnered participation from 13 speakers and 19 letters from interested parties, leading the Office of Surface Mining to issue seven notices of deficiency to the coal company. In response, the company revised its mining plan to enhance protections for threatened species, improve water treatment contingencies, and implement better land reclamation and revegetation practices, among other changes. An environmental assessment was conducted to evaluate the project’s impacts across various environmental factors. On June 30, 2003, the agency published its assessment and a finding of no significant impact, subsequently issuing a mining permit after the coal company posted a $3.8 million reclamation bond. Environmental groups filed a lawsuit on September 4, 2003, seeking a preliminary injunction on the grounds of inadequate environmental assessment. The district court denied the injunction and later granted summary judgment to the agency, finding no arbitrary or capricious actions in its assessment or decision. The National Environmental Policy Act aims to promote harmony between human activity and the environment while preventing environmental damage.

§ 102 of the Act requires federal agencies to include a detailed statement in recommendations or reports concerning legislation or major actions that significantly impact the human environment. This statement must cover: (i) the environmental impact, (ii) unavoidable adverse effects, (iii) alternatives to the proposed action, (iv) the relationship between short-term environmental uses and long-term productivity, and (v) any irreversible resource commitments. This requirement, known as an "environmental impact statement," serves procedural goals rather than substantive environmental results, emphasizing the need for agencies to inform and disseminate information about environmental consequences.

The Act aims to integrate environmental considerations into agency decision-making processes, ensuring that agencies focus on environmental impacts and provide accessible information to other governmental bodies and the public. An environmental impact statement is required when there is a proposal for major federal actions that would significantly affect the human environment. The Office of Surface Mining, responsible for coal mining application approvals, is recognized as involved in a major federal action. The key issue is whether the mining proposal significantly affects the environment.

Guidance for agencies stipulates that they should determine if an environmental impact statement is typically required. If uncertainty exists, as in this case, agencies are directed to prepare a preliminary "environmental assessment."

An environmental assessment (EA) is a succinct public document prepared by a Federal agency to evaluate whether an environmental impact statement (EIS) is necessary, facilitate compliance with environmental regulations, and assist in EIS preparation if needed. The EA must briefly address the need for the proposed action, explore alternatives as mandated by law, assess the environmental impacts of both the proposed action and alternatives, and list consulted agencies and individuals. If the agency concludes that the project will not significantly affect the environment, it may issue a finding of no significant impact (FONSI), which explains why an EIS is unnecessary. Judicial review of an agency's EA and the decision to forgo an EIS is conducted under the "arbitrary and capricious" standard, ensuring that the agency has adequately analyzed the environmental implications without judicial substitution of judgment. The EA in question meets regulatory requirements, consisting of 40 pages that include discussions on the necessity of the proposal and thorough evaluations of its environmental effects across various factors such as topography, soil, vegetation, and socioeconomics. The agency also referenced studies of comparable mining operations in the Appalachian region to inform its assessment.

Numerous studies and reports were referenced to evaluate the environmental impacts of mining operations in West Virginia, including a 2001 soil redevelopment report, a 2002 environmental assessment by the Tennessee Valley Authority regarding wildlife reintroduction, and a 1981 report on reclaimed mines which concluded post-mining reclamation would minimize wildlife impacts. A 2001 study indicated mining caused more significant disturbances to salamander populations compared to clearcutting. Other referenced studies included an assessment of emissions from similar operations, an environmental impact statement from the Office of Surface Mining regarding dust effects, and cumulative hydrological impact assessments evaluating water supply effects.

The agency acknowledged short-term disruptions to land use, wildlife habitats, aquatic species, air quality, soils, vegetative cover, and aesthetics due to mining. However, it asserted that reclamation and mitigation efforts would mitigate these impacts over time. Although initial disturbances would affect certain animal species, the proximity of similar habitats would likely render these effects temporary. Soil recovery and restoration of native vegetation were also anticipated following mining activities.

The agency conducted a thorough assessment of the mining application, demonstrating it took a detailed look at potential environmental consequences and did not act arbitrarily in concluding there would be no significant impact. The company proposed measures to address initial concerns, mitigate near-term environmental damage, and restore the area post-mining, fulfilling legal requirements and supporting the agency's discretion in its decision-making process.

The agency's determination that the temporary impacts of a proposed mining operation are not significant is supported by precedents such as Sierra Club v. Slater, Akiak Native Community v. USPS, and River Road Alliance v. Corps of Engineers, which affirm that short-term impacts can be deemed insignificant. The agency identified four long-term impacts: alterations in topography, geological strata, increased infiltration rates, and permanent roads and sediment basins. However, it concluded that proper implementation of the mining and reclamation plan would mitigate these effects. Specifically, the agency argued that the backfilling process would restore the area closer to its original contour, addressing past mining scars. The assessment also noted that while there would be increased water flow and retention of roads, the overall aesthetic quality would improve post-reclamation. The agency issued a finding of no significant impact, stating that the consequences of mining would be minor to moderate in the short term and minimal in the long term, thus not necessitating an environmental impact statement under the National Environmental Policy Act. The agency's thorough environmental assessment and the modifications made to the proposal during review reinforced the conclusion that the decision was neither arbitrary nor capricious.

Plaintiffs challenge the agency's environmental assessment on three grounds: (1) it inadequately considered alternatives, (2) it arbitrarily issued a finding of no significant impact without requiring an environmental impact statement, and (3) it failed to allow public comment 30 days prior to its decision. The assessment reviewed only three alternatives: granting the license, denying it, or taking no action, which plaintiffs argue violates the regulatory requirement for a discussion of alternatives and their environmental impacts under 40 C.F.R. 1508.9. Courts allow agencies discretion in determining the range of alternatives under the National Environmental Policy Act, but this discretion should consider the project's purpose and its environmental impacts.

Agencies have less obligation to explore alternatives when preparing an environmental assessment rather than an environmental impact statement, particularly if the project is deemed to have minimal environmental consequences. This "sliding-scale" approach suggests that fewer environmental concerns warrant fewer alternatives. Although some alternatives must be considered, it is unreasonable to criticize the agency for not exploring more environmentally friendly options if it has determined that the project will not significantly impact the environment.

In this case, the agency identified three options under the Surface Mining Control and Reclamation Act: take no action, grant the license, or deny the license. It rejected the no-action alternative due to a lack of legislative authority to decline action on the application, and deemed the denial option to be inferior based on its understanding of the federal program in Tennessee.

The excerpt addresses the implications of mining operations on employment and local economies while affirming the agency's decision to grant a mining license as the preferred alternative. Although the agency outlined three alternatives in its environmental assessment, it argues that limiting the discussion to these options creates a misleading dichotomy. The Surface Mining Control and Reclamation Act does not exempt the agency from its obligations under the National Environmental Policy Act (NEPA). Specifically, Congress clarified that the Mining Act does not modify NEPA, and the agency is required to evaluate and discuss alternatives to proposed mining plans as mandated by federal law.

The agency contends that its authority under the Mining Act restricts it to only granting or denying licenses. However, this position is challenged by citing provisions of the Mining Act that articulate the Secretary's duties, which include the ability to impose conditions and evaluate compliance. The excerpt emphasizes that there is no clear basis for why these provisions would prevent the agency from considering alternatives in its environmental assessment, particularly as the Mining Act's stated purposes involve environmental protection and balancing various interests.

The Act does not limit an agency's ability to explore alternatives to a mining application, and the requirement for an environmental assessment to identify environmentally sound alternatives aligns with the Act’s environmental protection goals. The agency's reference to 30 C.F.R. 773.7(a) indicates that it must review applications and can require modifications, thereby allowing for alternatives that are more environmentally considerate than the original proposal. The agency's claim that it can only consider three alternatives—approval, disapproval, or no action—is unsupported, as modifications to the proposal should also be evaluated, particularly given that the agency previously noted deficiencies in the application. 

Additionally, there is no prohibition in the Mining Act against granting an application with conditions. Courts have criticized agencies that limit their analysis of alternatives to a binary choice, affirming that the National Environmental Policy Act mandates a thorough exploration of reasonable alternatives, not just a yes or no decision. The agency acted arbitrarily by failing to adequately discuss project alternatives in its environmental assessment, consistent with judicial interpretations that emphasize the necessity of evaluating all reasonable options in environmental impact statements.

An agency may circumvent the National Environmental Policy Act (NEPA) by narrowly defining the project's purpose to exclude reasonable alternatives from consideration, which undermines the environmental impact statement's effectiveness. Federal courts disallow this frustration of congressional intent. The case Department of Transportation v. Public Citizen does not support the agency's claim that it can limit the discussion of alternatives to merely granting or denying a permit, as it did not address the adequacy of alternative considerations in the environmental assessment in question. The court clarified that its focus was not on the alternatives discussion. The agency's stance, which restricts the analysis to a binary choice, is inconsistent with both NEPA and its regulatory framework. While agencies have discretion in determining the number of alternatives to discuss, they cannot limit themselves to only two options that effectively create a single alternative. The assessment of minimal environmental impact may reduce the number of alternatives considered, but it does not restrict the agency to only approve or deny the application. The agency is allowed to apply a "rule of reason" in identifying reasonable alternatives, but it is not required to include alternatives like energy conservation if they are deemed unreasonable in the context of the application.

The Surface Mining Act promotes mining while balancing economic benefits against environmental risks. Agencies are not obligated to consider all policy alternatives in decision-making, particularly those contrary to statutory goals or project purposes. Alternatives must be feasible and relevant to existing standards, such as modified operations or additional mitigation measures. Although the agency's duty to discuss alternatives was misinterpreted, this error does not warrant invalidating the environmental assessment as arbitrary. Procedural flaws are significant, yet plaintiffs failed to demonstrate that the error could have influenced the agency's outcomes. They did not identify any overlooked alternatives, nor did comments submitted suggest additional rulemaking options. The agency, however, actively considered alternatives during the review process, issuing multiple notices of deficiency that led the coal company to enhance its mitigation measures.

The environmental assessment includes a detailed section on the impact of the proposed plan on threatened and endangered species, highlighting various mitigation measures that improved upon the original licensing proposal. Specifically, it addresses measures taken during the review process to reduce adverse effects on the Indiana bat and blackside dace. It also refers to a comprehensive programmatic environmental impact statement completed in 1985, which examined the state's mining program under the Surface Mining Control and Reclamation Act, considering different alternatives and mining methods.

The agency's environmental assessment drew upon this prior statement, discussing various mining techniques and their implications. Despite having initially limited its authority to explore alternatives under the National Environmental Policy Act (NEPA), the decision concluded that invalidating the compliant environmental assessment would unnecessarily prolong litigation for a project already in progress for two years. Two primary purposes of NEPA are highlighted: ensuring agencies consider significant environmental impacts and making relevant information accessible to broader audiences involved in decision-making.

The assessment's shortcomings were characterized as formal rather than substantive, as the agency did consider alternatives and provided substantial information typically categorized as "alternatives." While procedural violations are generally not excused, this case is seen as an exception due to the lack of prejudice caused by the agency's oversight, aligning with a precedent that recognizes a harmless-error rule in NEPA cases. Additionally, the plaintiffs contend that the agency's finding of no significant impact was arbitrary and capricious for several reasons.

An environmental impact statement is mandated for mountaintop removal operations according to the Department of Interior Manual, specifically part 516, chapter 13. The plaintiffs assert that the coal company’s "cross-ridge mountaintop" mining qualifies as mountaintop removal under 30 C.F.R. 785.14(b), which defines such mining as the removal of almost all overburden to create a level plateau or gently rolling contour without highwalls. However, the agency clarified that the coal company's operation does not constitute mountaintop removal because it intends to surface mine three previously mined peaks and restore them to their approximate original contours, addressing prior failures to do so. The company plans to eliminate existing highwalls and return the ridge to its former state, which differs from traditional mountaintop removal that significantly alters the landscape.

The Department of the Interior's manual suggests an environmental impact statement is necessary due to the significant topographical changes typically associated with mountaintop removal. However, since the company's operations aim to restore the landscape, the associated concerns are mitigated. The Surface Mining Control and Reclamation Act mandates returning land to its original contour, and no exception has been sought by the coal company, reaffirming that the operation will not involve actual mountaintop removal or create a level plateau.

The Office of Surface Mining generally does not require an environmental impact statement when a company proposes to restore pre-mining contours, and its finding of no significant impact in this case aligns with established procedures. The plaintiffs further argue that the finding document is insufficient as it does not elaborate on the lack of significant environmental effects. However, the relevant regulation states that such a finding must briefly present reasons for the determination and may incorporate the environmental assessment by reference, rather than repeating its content.

The finding from the Office of Surface Mining incorporates the environmental assessment, indicating that while there will be short-term impacts from the proposed surface coal mining, they are deemed minimal in the long term. Mitigation measures included in the operation and reclamation plan support the conclusion of no major impacts. The finding succinctly states its reasoning and directs readers to the environmental assessment for further details. 

Plaintiffs assert that the environmental assessment inadequately addresses noise and road safety concerns. However, the agency has responded to these issues, referencing external studies and conducting its own road safety analysis. While acknowledging some impact, the assessment concludes that these effects will be modest and insignificant. For instance, noise impacts are characterized as periodic and less intrusive than in wildlife and recreation areas. Road safety studies indicate that coal trucks can navigate Lick Fork Road, with only minor exceptions.

Although the agency could have provided more detailed discussions on certain matters, the statute allows for a brief examination of impacts, and the assessment does not exceed the agency's discretion. Additionally, concerns regarding sediment-control structures were integrated into the cumulative hydrologic impact assessments as part of the Surface Mining Control and Reclamation Act process, which were referenced in the environmental assessment. A supplemental environmental assessment has been filed to address other concerns raised by the plaintiffs, who have also challenged this in district court, making further commentary on those issues premature. The environmental assessment, in conjunction with the cumulative hydrologic assessments, is deemed not arbitrary or capricious.

Relevant evidence exists to support the conclusion reached, despite potential concerns upon deeper scrutiny. Plaintiffs contend that the National Environmental Policy Act (NEPA) mandates that an agency must provide a finding of no significant impact for public review for 30 days prior to making a final decision. This requirement, outlined in 40 C.F.R. 1501.4(e)(2), applies when a proposed action is similar to those typically necessitating an environmental impact statement (EIS). The Office of Surface Mining specifies that certain mining proposals, such as those involving mountaintop removal or significant acreage and production levels, must adhere to this 30-day review process. 

However, the coal company’s application does not qualify as mountaintop removal per the Office of Surface Mining's definition, nor does it meet the three criteria necessary for the second category of operations that require public review. Following modifications, the company plans to impact only 1,148.7 acres—less than the 1,280-acre threshold—and will mine only 970 acres. As a result, the court affirms the findings, with the opinion delivered by Senior United States District Judge Louis F. Oberdorfer.