First Circuit Finds Coast Guard Violated NEPA in Attempt to Preempt Massachusetts Oil Spill Prevention Act

While not ones to unnecessarily toot our own horns, the First Circuit’s decision in United States et al. v. Coalition for Buzzards Bay et al. is worth a read. We (specifically, Buzzards Bay Guardian Jonathan Ettinger, Amy Boyd, and I) have been representing the recently-renamed Buzzards Bay Coalition in this case for a number of years and yesterday’s decision represents both a victory for the Coalition and an important First Circuit precedent with respect to the National Environmental Policy Act (NEPA).

In yesterday’s decision the First Circuit held that the Coast Guard failed to comply with NEPA when it promulgated a rule (the “2007 Rule”) which purported to expressly preempt certain provisions of the Massachusetts Oil Spill Prevention Act (MOSPA).

By way of background, the MOSPA was enacted in response to a spill of approximately 98,000 gallons of oil into Buzzards Bay in April 2003. The federal government filed suit against the Commonwealth, asserting that the MOSPA was preempted by federal law. (The Coalition intervened as a defendant to support the Commonwealth in defending the MOSPA). Following a district court decision and an appeal to, and remand by, the First Circuit, and while the case was pending once again before the district court, the Coast Guard promulgated the 2007 Rule.

The Coalition and others believe that the 2007 Rule provides less protection against oil spills than does the MOSPA – for example, the 2007 Rule requires tug escorts only for certain single-hulled vessels transporting oil through the Bay while the MOSPA requires such escorts for single- and double-hulled vessels. But in the course of the rulemaking the Coast Guard relied on a Categorical Exclusion (CE) to obviate the need for the preparation of an EA or EIS, and did not consider the impact of this lessened environmental protection.  The Commonwealth and The Coalition argued that in relying on a CE and failing to perform a NEPA analysis, the Coast Guard violated NEPA. The District Court found that the Coast Guard’s reliance on a CE was erroneous, but held that such error was harmless.

The First Circuit agreed that the Coast Guard’s reliance on a CE was erroneous because the promulgation of the 2007 Rule was “likely to be highly controversial . . . in terms of public opinion”, and thus triggered an “extraordinary circumstances” exception to the use of a CE. The First Circuit then disagreed with the lower court’s finding that such error was harmless.

The Court distinguished the case from prior cases finding harmless error, stating that

 the sockdolager is that the Coast Guard did not perform and environmental analysis at all. Indeed, it made no site-specific appraisal of the potential environmental effects of its proposed action. For ought that appears, it took no “hard look” at the situation. It gave the matter the barest of glances and . . . made no ‘reasoned finding.’ . . . the absence of any [substantial] analysis is antithetic to a finding of harmlessness.

Thus, the Court made clear that the harmless error rule is only applicable where there is evidence that some substantial environmental analysis has been undertaken by an agency. In this case the administrative record did not show that “the Coast Guard ever analyzed, or even adequately studied, the environmental impact of its proposed action.”

The Court also rejected the Coast Guard’s argument that failure of the Coalition and Commonwealth to object to its reliance on a CE during the notice-and-comment period resulted in a waiver of such objections, stating that

. . . nothing in Public Citizen shifts the burden of ensuring NEPA compliance from the agency that is proposing an action to those who wish to challenge that action. Indeed, the Public Citizen Court stressed that ‘the agency bears the primary responsibility to ensure that it complies with NEPA.’

In reaching its decision, the Court did not address the issue of preemption.  As a result of the decision, the First Circuit vacated a previously issued injunction of the MOSPA, and the 2007 Rule will now be remanded to the Coast Guard for proceedings consistent with the Court’s opinion.


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