Segmentation, Indirect Effects and an Anniversary

One of NEPA’s “permanently hard” questions found its footings in a 1975 9th Circuit case.

Forty years ago today the Ninth Circuit handed down City of Davis v. Coleman, 521 F.2d 661 (9th Cir. 1975).  Little known outside the circle of NEPA admirers who think about the complexities of “scoping” an EIS (in other words, little known), the Davis opinion actually ought to be credited with exerting a huge impact on our “national environmental charter.”I.80.Chevron  At issue in the case was a little spur onto I-80 which, nationally was still being built but had by then long served as a major east/west highway in northern California.  It was to be known as the Kidwell Interchange.   For all its grandeur, this tiny bit of interstate wasn’t going to change traffic patterns nationally.  It wouldn’t entice more people into driving California’s roads.  And it was, until the City of Davis and some others objected, barely noticed.  The connection was sought by locals who objected to having their freeway access eliminated (I-80, as it became I-80 progressively closed off access points in order to become a truly “limited access” highway upon which people could drive at unbelievable speeds).  And some even thought the Kidwell Interchange would make commuting in and out of the City of Davis more convenient.

The state and federal highway officials jointly adopted a “Negative Declaration,” which back then was what they did when they had concluded that their road project would not have a significant impact on the human environment, i.e., avoiding having to generate a “detailed statement” on environmental impacts pursuant to NEPA.

That’s when the city started down a path to making NEPA history.

When Do Roads Cause More Development?

One of NEPA’s permanently hard questions is this: when does infrastructure stop meeting present needs and start inducing future uses that would’ve otherwise never materialized?  In other words, when does the infrastructure itself become “growth-inducing”?  The Ninth Circuit panel that heard Davis was pretty adamant:

The growth-inducing effects of the Kidwell Interchange project are its raison d’être. And with growth will come growth’s problems: increased population, increased traffic, increased pollution, and increased demand for services such as utilities, education, police and fire protection, and recreational facilities.

521 F.2d at 675.

Over the highway departments’ objections, the Ninth Circuit panel made NEPA history in uttering the following:

We reject [their] position that the uncertainty of development in the Kidwell area makes the “secondary” environmental effects of the interchange too speculative for evaluation. . . . What we have here, after all, is a proposal to build a major interchange in an agricultural area near the edge of urban development, and the purpose of the project is to connect a freeway with a road which does not yet exist. If the interchange is built, development will occur.  And regardless of its nature or extent, this development will have significant environmental consequences for the surrounding area, including Davis.

Id. at 676.

What the court did in this passage was unprecedented in NEPA.  It pulled the future actions of others in response to a (relatively) small infrastructure project back into the NEPA § 102(2)(C) calculus of the project’s expected environmental effects.  Thus was born the notion of “indirect” effects as they would later feature in the Council on Environmental Quality’s 1978 rules.  See 40 C.F.R. § 1508.8(b).  “Indirect” effects of this sort are “caused . . . later in time or farther removed in distance but are still reasonably foreseeable” and they include “induced changes in the pattern of land use, population density or growth rate. . . .”  Id.

Now this bit of elastic in the notion of environmental “impact” can be critical in at least two ways.  First, it can force a “significance” finding at the outset and trigger an agency’s duty to prepare a full blown environmental impact statement (EIS).  That was the remand in Davis (along with an injunction prohibiting further work on the Kidwell Interchange pending completion of an EIS).  See City of Davis, 521 F.2d at 682.

Second, the indirect effects elasticity can make the appropriate “scoping” of an ensuing EIS hard to pin down.  This is especially true with public infrastructure projects.  Private parties rarely have any incentive to make or share their investment plans before necessary infrastructure is in place.  But once it is, it can change the whole landscape—changing capital flows in all kinds of ways.  Litigants looking for a good way to attack an EIS as too constrained often look to “indirect effects.”

Indirect Impacts: A Significant Legacy

Many cases after Davis adopted the concept of “indirect” effects with a “reasonable foreseeability” test.  In practice today, it has become frequently litigated and contested in contentious policy decisions involving NEPA.  The regional circuits differ substantially if also subtly in how they apply CEQ’s regulation on indirect effects.  After all, whether economic growth is likely to be “induced” by something like a road, bridge, airport, shipping terminal, pipeline, or other investment—or rather that growth will occur anyway, with or without it—can come down to imponderables that simply escape meaningful quantification.  Where it might be easier to defer to an agency’s determination that a new sewage treatment plant wouldn’t induce growth so much as meet existing demand, see Town of Orangetown v. Gorsuch, 718 F.2d 29, 37-38 (2d Cir. 1983), it is harder to believe that a major new Indian casino won’t “induce” significant economic growth in its vicinity.  See TOMAC v. Norton, 240 F. Supp.2d 45 (D.D.C. 2003).  If the casino wasn’t expected to induce much growth, it begs the question why the federal government would help them build it pursuant to the Indian Gaming Regulatory Act.

Growth inducement is a tricky thing to project, though.  It is useful to litigants challenging federal projects and permissions for exactly this reason.  They can embroil the agency in costly and difficult estimative analyses that can add up to big delays.  Or they can make an agency’s decision-making appear “arbitrary and capricious” after the fact.

Sometimes this check on agency discretion is a good thing, though.  Indeed, the casino at issue in the TOMAC litigation has had enormous economic and other impact on the region in question.  “Four Winds” has become the core economic engine in its vicinity.  Before the Bureau of Indian Affairs went ahead with its permissions, it was court-ordered to engage in a careful study projecting the growth that the casino and its associated hotels and restaurants would spur—a study that better alerted all involved to the likely air quality, sewerage, and other environmental challenges that would arise.  See TOMAC v. Norton, 433 F.3d 852, 858-59 (D.C. Cir. 2006).

In this economy, it’s almost impossible to imagine public infrastructure projects that aren’t calculated to “induce growth” and spur as much private investment as possible.  Of course, aims and actualities are two different things.  Today, the Kidwell Interchange is known locally as the “Interchange to Nowhere.” It swoops off of I-80 and well, essentially, heads into farm country.  Indeed, thanks to a conservation easement U.C. Davis helped create, it may even stay that way!


{Image: LED street lights along 2d Ave. in Davis}

I teach environmental, natural resources, and administrative law at Penn State Law. Before teaching I was an enforcement lawyer at U.S. EPA. Along the way I've done work for environmental nonprofits and written a fair bit about NEPA.
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