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Fifth Circuit Upholds Agency Decision in New Orleans Housing Project Case

Coliseum Square Assn., Inc. v. Jackson, 2006 WL 2664455 (5th Cir. Sept. 18, 2006)

Joshua R. Holmes, 2L, Stetson University College of Law

A group of non-profit organizations representing citizens, residents, and merchants in New Orleans brought an action against the Department of Housing and Urban Development (HUD) seeking a declaratory judgment that HUD had failed to comply with the National Environmental Policy Act of 1969 (NEPA) and the National Historic Preservation Act (NHPA) in funding the St. Thomas Housing Development revitalization project. It further sought an injunction preventing HUD from dispersing further funds until such time as it complied with those statutes. The U.S. Court of Appeals for the Fifth Circuit held that, because it did not appear that HUD acted “arbitrarily, capriciously, or contrary to law”1 in its findings of the project’s environmental impacts, HUD was in full compliance with the requirements of the statutes.

Overview of the Statutes
NEPA sets procedural requirements that agencies must follow to determine what environmental impacts their proposals will have. Under the procedural requirements established by NEPA, a proposal for a major federal action must include an Environmental Impact Statement (EIS).2 NEPA gives the Council of Environmental Quality (CEQ) authority to issue regulations that interpret the statute.3 According to CEQ regulations, an agency may prepare an Environmental Assessment (EA) and issue a “finding of no significant impact” (FONSI) if the action is excluded from the requirement to produce an EIS.4
NHPA imposes requirements that an agency undertaking a federally assisted project must follow prior to the approval of expenditure of funds.5 The federal agency must take into account the effects that the project may have on historical sites.6 The agency must also follow certain procedural requirements in the review process, such as consulting with the State Historic Preservation Officer (SHPO) and allowing the Advisory Council on Historic Preservation (ACHP) an opportunity to comment.7

Factual Background
In 1994, the Housing Authority of New Orleans (HANO) began an effort to renovate the St. Thomas Housing Development, a residential public housing complex in the Lower Garden District. In 1996, HUD granted HANO $25 million for St. Thomas’ revitalization and became responsible for ensuring that the project satisfied the requirements of NEPA and NHPA.
The initial plan for the St. Thomas project only included housing units. HANO enlisted the help of Historic Restorations, Inc. (HRI) to improve the plan. An amended plan submitted to HUD in 2000 included new low-income housing, new market-rate housing, a senior care facility, and a retail shopping center.

In Fall of 2000, HUD completed the review required by NHPA which examined the environmental impact the project would have on the historical sites. HANO, the SHPO, and the ACHP signed a Memorandum of Agreement for the project and demolition began shortly after. In May 2001, the NEPA environmental assessment review was completed and HUD adopted the proposed EA/FONSI.

After HRI obtained a commitment from Wal-Mart to become the retailer, the SHPO asked to reopen the NHPA file to determine the effects Wal-Mart may have on historical properties in the area. As a result of the study, HUD determined the assessment of the project’s potential effects should be expanded. In July 2002 the plaintiffs filed suit, claiming non-compliance with NEPA and NHPA. Consequently, HUD reopened the NEPA process and a new EA/FONSI was approved in February 2003.

Court’s Decision
The plaintiffs first argued that noise levels and the number of housing units affected by the project automatically required HUD to produce an EIS. The court found that HUD’s reliance on a 2002 noise survey, which measured noise within a specific area over a 24-hour period, was consistent with agency procedural requirements and a reasonable method by which to measure potential noise effects. The court then paid deference to HUD’s interpretation of a CEQ regulation mandating preparation of an EIS if 2,500 dwellings are affected by a project. It found HUD’s interpretation that the regulation created two categories of affected dwellings to be reasonable.

The remainder of the plaintiffs’ arguments concerning HUD’s environmental assessment focused on their contention that HUD’s failure to prepare an EIS was contrary to law. In cases attacking an agency’s decision not to prepare an EIS, the plaintiff must prove the allegations by a preponderance of the evidence; the plaintiff must show more than mere deficiencies.8
The court examined various areas of HUD’s study, such as environmental justice, zoning, businesses occupying historic buildings, toxic and hazardous waste, lead contamination, and traffic. It found that in every instance the plaintiffs offered no evidence that HUD acted “arbitrarily, capriciously, or contrary to law.”9 The plaintiffs offered evidence of different methodology that might illustrate deficiencies in HUD’s review; however, their proffered evidence failed to prove their allegations by a preponderance of the evidence. Thus, the court denied the plaintiffs’ request for an injunction.

Conclusion
Having determined that HUD had not acted arbitrarily, capriciously, or contrary to law when it decided that no EIS was required for the St. Thomas project, and that the district court had not committed any reversible error in its consideration of the case, the Fifth Circuit affirmed the agency and the lower court..

Endnotes
1. 5 U.S.C. § 706(2)(A).
2. 42 U.S.C. § 4332(2).
3. 40 C.F.R. § 1500.3.
4. Dept. of Transportation v. Public Citizen, 541 U.S. 752, 757 (2004).
5. 16 U.S.C. § 470f.
6. Id..
7. Vieux Carre Prop. Owners Residents and Associates, Inc. v. Pierce, 719 F.2d 1272, 1281 (5th Cir. 1983).
8. La. Wildlife Fed. Inc. v. York, 761 F.2d 1044, 1055 (5th Cir. 1985)
9. Id.

University of Mississippi