Eagle Cnty. v. Surface Transp. Bd.

82 F.4th 1152

EAGLE COUNTY, COLORADO, Petitioner, v. SURFACE TRANSPORTATION BOARD and United States of America, Respondents Seven County Infrastructure Coalition and Uinta Basin Railway, LLC, Intervenors.

No. 22-1019

Consolidated with 22-1020

United States Court of Appeals, District of Columbia Circuit

Argued May 3, 2023

Decided August 18, 2023

On Petitions for Review of Orders of the Surface Transportation Board

Nathaniel H. Hunt argued the cause and filed the briefs for petitioner Eagle County, Colorado. Nicholas Clabbers entered an appearance.

Wendy Park argued the cause for petitioners Center for Biological Diversity, et al. With her on the briefs was Edward B. Zukoski. William J. Snape entered an appearance.

Matthew R. Arnold and William S. Eubanks II were on the brief for amici curiae City of Glenwood Springs, et al. in support of petitioners.

Barbara A. Miller, Attorney, Surface Transportation Board, argued the cause for respondent. With her on the brief were Craig M. Keats, General Counsel, and Theodore L. Hunt, Associate General Counsel.

Justin D. Heminger, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Todd Kim, Assistant Attorney General, and Andrew M. Bernie, Attorney.

Jay C. Johnson argued the cause for intervenor-respondents Seven County Infrastructure Coalition, et al. With him on the brief was Kathryn Kusske Floyd. Margaret K. Fawal entered an appearance.

Melissa A. Holyoak, Solicitor General, Office of the Attorney General for the State of Utah, was on the brief for amicus curiae State of Utah in support of respondents.

Before: Millett, Pillard and Wilkins, Circuit Judges.

Wilkins, Circuit Judge:

These consolidated petitions concern an order of the Surface Transportation Board ("Board" or "STB") authorizing the construction and operation of a new rail line in the Uinta Basin in Utah ("Railway"). The Board exercised its authority to exempt the Railway from the Board's more extensive application requirements in a two-part process. The first addressed the "transportation benefits" of the Railway, and the second concerned the project's environmental impacts. As part of its environmental process, the Board created an environmental impact statement ("EIS") outlining the various environmental impacts associated with the Railway's construction and operation. The EIS was informed by the Board's consultation with the Fish and Wildlife Service ("Service"), which led to the development of a Biological Opinion ("BiOp") concerning the Railway's potential impacts on endangered species and critical habitats.

Petitioners include various environmental organizations and a Colorado county that alleges it will be impacted by the Railway even though it is located "down-line" of the proposed rail line's construction area. Petitioners raised numerous challenges at various stages in the proceedings, ranging from whether the Board properly exempted the Railway to whether its environmental analysis was flawed. In these petitions, they lodge various challenges to the validity of the Board order, the EIS, and the BiOp.

For the following reasons, we grant the petitions in part, deny them in part, vacate the underlying order as well as the EIS and the BiOp in part, and remand to the Board for further proceedings.

I.

A.

Congress gave jurisdiction over rail carriers to the Board after passing the ICC Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 ("ICCT Act"), which abolished the Board's predecessor, the Interstate Commerce Commission ("ICC"). See Nat'l Ass'n of Reversionary Prop. Owners v. STB, 158 F.3d 135, 140 (D.C. Cir. 1998). The Board regulates, among other things, "the sale and transfer of rail lines under 49 U.S.C. § 10901, [including] governing construction and operation of railroad lines." Ass'n of Am. R.R.s v. STB, 161 F.3d 58, 60 (D.C. Cir. 1998).

There are two approaches a party can take to get approval from the Board for the construction or operation of a railroad line. The party may seek a certificate authorizing the project from the Board by "submit[ting] an application that provides information about itself and its proposed use of the line, including operational, financial, environmental, and energy data." Snohomish Cnty. v. STB, 954 F.3d 290, 293 (D.C. Cir. 2020). "Upon receiving the application and providing time for public comment, the Board issues the certificate, potentially with modifications or conditions, 'unless the Board finds that such activities are inconsistent with the public convenience and necessity.'" Id. (quoting 49 U.S.C. §§ 10901(c), 10902(c)). Alternatively, the party may seek an exemption from the full application requirements by petitioning the Board to find that "compliance with those provisions 'is not necessary to carry out the transportation policy' codified in 49 U.S.C. § 10101, and that either the 'transaction or service is of limited scope' or the 'application in whole or in part of the provisions is not needed to protect shippers from the abuse of market power.'" Id. at 293-94 (quoting 49 U.S.C. § 10502(a)(1)-(2)).

In addition, the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq., requires all federal agencies "to examine the environmental effects of proposed federal actions and to inform the public of the environmental concerns that were considered in the agency's decisionmaking." Citizens Against Rails-to-Trails v. STB, 267 F.3d 1144, 1150 (D.C. Cir. 2001). This environmental review process requires federal agencies to "include a detailed environmental impact statement ... 'in every recommendation or report on ... major Federal actions significantly affecting the quality of the human environment.'" Mayo v. Reynolds, 875 F.3d 11, 15 (D.C. Cir. 2017) (quoting 42 U.S.C. § 4332(2)(C)). Since "NEPA's mandate is addressed to all federal agencies," it applies also to the Board's determinations regarding the construction or operation of rail lines that may affect the environment. Citizens Against Rails-to-Trails, 267 F.3d at 1150.

Federal agencies have additional environmental review obligations under the Endangered Species Act ("ESA"), 16 U.S.C. § 1531 et seq., which Congress enacted "to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved," id. § 1531(b). "The ESA requires every federal agency to 'insure that any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat' that the ... Service[] ha[s] determined to be critical to those species." Ctr. for Biological Diversity v. EPA ("Center II"), 56 F.4th 55, 62 (D.C. Cir. 2022) (quoting 16 U.S.C. § 1536(a)(2)). To fulfill this statutory obligation, "action agencies," "whose planned action may have such effect," must consult with the Service, which is tasked with, among other things, identifying "anticipated adverse effects on species" and critical habitats. Id. at 62-63 (citing 16 U.S.C. § 1536(a)-(d)).

Prior to approving "a project, activity, or program," 54 U.S.C. § 300320, federal agencies must also "take into account the effect of the undertaking on any historic property" under the National Historic Preservation Act ("NHPA"), id. at § 306108. The statute defines "historic property" broadly and includes "any prehistoric or historic district, site, building, structure, or object included on, or eligible for inclusion on, the National Register." Id. § 300308. The NHPA mandates the creation of regulations to ensure that federal agencies consult with local governments "with respect to undertakings ... that affect the local governments." Id. § 304108(b). "In light of the substantial overlap between the NHPA and NEPA inquiries, an EIS 'should include consideration of the ... likely effects on historic properties.'" Oglala Sioux Tribe v. U.S. Nuclear Regul. Comm'n ("Oglala"), 45 F.4th 291, 296 (D.C. Cir. 2022) (quoting 36 C.F.R. § 800.8(a)(1)).

B.

Respondent-Intervenor Seven County Infrastructure Coalition ("Coalition") "is an independent political subdivision of the State of Utah" composed of seven different member counties. J.A. 252. On May 29, 2020, the Coalition petitioned the Board to allow for the construction and operation of the Railway, see id. at 248, a more than 80-mile rail line in Utah that would connect "two termini in the Uinta Basin ... to the national rail network at Kyune, Utah," id. at 251. The Uinta Basin is an "approximately 12,000 square mile[]" geographic area spanning northeastern Utah and northwestern Colorado. Id. at 279. It "contains extensive deposits of valuable minerals, including" phosphate, "crude oil, natural gas, oil shale, oil sands, gilsonite, natural asphalt, aggregate materials, and low-sulfur coal." Id. at 280.

In its petition, the Coalition explained that "[c]urrently, trucking is the only mode of freight transportation in and out of the Basin" "primarily due to the geography of the Basin, which is bounded by high mountains or plateaus." Id. Railway lines exist around the Basin but there are not even "freeways in and out of the Basin." Id. Accordingly, "all goods produced or consumed in the Basin must be transported by trucks on two-lane highways that cross high mountain passes." Id. The Railway would "connect the Uinta Basin to the national rail network," "giv[ing] shippers an additional option for freight transportation in and out of the Uinta Basin." Id. at 285. The project would involve "construction of the rail line and associated earthwork" as well as "construction of access roads, tunnels, communications towers, road crossings, culverts, and stream crossings." Id. at 255. Though the Railway could carry any goods produced or consumed in the Basin, the Coalition's petition recognizes (and no one disputes) that the Railway's predominant and expected primary purpose would be the...