Docket No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. UPPER SOUTH EAST COMMUNITIES COALITION Plaintiff and Appellant,

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1 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 1 of 64 Docket No UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT UPPER SOUTH EAST COMMUNITIES COALITION Plaintiff and Appellant, v. U.S. ARMY CORPS OF ENGINEERS; LT. GEN. THOMAS P. BOSTICK, in his official capacity, Chief of Engineers and Commanding General, U.S. Army Corps of Engineers; COL. MICHAEL J. FARRELL, in his official capacity, District Commander, Sacramento District, U.S. Army Corps of Engineers; and MICHAEL S. JEWELL Chief, Regulatory Division, Sacramento District, in his official capacity, U.S. Army Corps of Engineers Defendants and Respondents. REGIONAL TRANSPORTATION COMMISSION OF WASHOE COUNTY, Intervenor and Respondent. Appeal From The United States District Court For The Eastern District of California Case No. 2:15-cv JAM-DAD APPELLANT S OPENING BRIEF Winter King Joseph D. Petta Shute, Mihaly & Weinberger LLP 396 Hayes Street San Francisco, California Telephone: (415) Facsimile: (415) Attorneys for Appellant Upper South East Communities Coalition

2 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 2 of 64 Corporate Disclosure Statement Pursuant to Federal Rule of Appellate Procedure Rule 26.1, Plaintiff Upper South East Communities Coalition states that it is a non-profit organization; it does not have any parent corporations; no publicly held company owns 10% or more of its stock. i

3 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 3 of 64 TABLE OF CONTENTS Page Jurisdictional Statement... 1 Issues Presented for Review... 2 Introduction... 3 Statement of the Case... 5 Statement of Facts... 7 I. RTC Applies to the Corps for a Section 404 Permit to Construct a New, Six-Lane Highway Through Floodplains and Wetlands II. RTC Segments the Project and Builds Phase I Before Obtaining a Section 404 Permit III. RTC Submits a New Application, Requesting a Section 404 Permit for Phase II IV. The Corps Issues the Section 404 Permit on the Basis of an Environmental Assessment/Finding of No Significant Impact Summary of the Argument Argument I. Standard of Review II. III. The District Court Abused Its Discretion in Holding that the Corps Was Not Required to Prepare an EIS for the Project, Despite Substantial Questions About Its Impacts A. Overview of NEPA s Requirements for Preparation of EIS B. The Record Contains Evidence Demonstrating Substantial Questions About the Project s Mercury Impacts C. The District Court Ignored the Ninth Circuit s Substantial Questions Test in Upholding the Corps Decision to Prepare an EA The District Court Abused Its Discretion in Finding that the Corps Met Its Duty to Provide the Public with Notice of, and an Opportunity to Comment on, the EA/FONSI ii

4 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 4 of 64 IV. A. Overview of NEPA s Requirements for Public Involvement B. The Corps Issuance of a Single, Four-Page Notice of RTC s Application, Which Did Not Even Mention the Project s Floodplain and Mercury Impacts, Was Insufficient Public Involvement The District Court Abused Its Discretion in Finding that the Project Is the LEDPA A. Overview of Clean Water Act B. The District Court Abused Its Discretion in Finding the Corps Properly Rejected Environmentally Superior Alternatives Without Any Evidence that They Were Impracticable Conclusion Statement of Related Cases iii

5 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 5 of 64 Federal Cases TABLE OF AUTHORITIES Page(s) Alaska Survival v. Surface Transp. Bd., 705 F.3d 1073 (9th Cir. 2013)... 36, 37 Alliance to Save the Mattaponi v. U.S. Army Corps of Eng rs, 606 F. Supp. 2d 121 (D.D.C. 2009) Anderson v. Evans, 314 F.3d 1006 (9th Cir. 2002)... 33, 34 Bering Strait Citizens for Responsible Res. Dev. v. U.S. Army Corps of Eng rs, 524 F.3d 938 (9th Cir. 2008)... passim Cal. Pharmacists Ass n v. Maxwell-Jolly, 563 F.3d 847 (9th Cir. 2009) Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971)... 52, 53 Ctr. for Biological Diversity v. Nat l Highway Traffic Safety Admin., 538 F.3d 1172 (9th Cir. 2008)... passim Earth Island Inst. v. U.S. Forest Serv., 351 F.3d 1291 (9th Cir. 2003) Forelaws on Board v. Johnson, 743 F.2d 677, 683 (9th Cir. 1985) Friends of the Earth v. Hintz, 800 F.2d 822 (9th Cir. 1986) FTC v. Enforma Natural Prods., Inc., 362 F.3d 1204 (9th Cir. 2004) Greenpeace Action v. Franklin, 14 F.3d 1324 (9th Cir. 1992)... 24, 25 iv

6 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 6 of 64 Klamath Siskiyou Wildlands Ctr. v. Boody, 468 F.3d 549 (9th Cir. 2006) Klein v. City of San Clemente, 584 F.3d 1196 (9th Cir. 2009)... 5 League of Wilderness Defenders-Blue Mountains Biodiversity Project v. Zielinski, 187 F. Supp. 2d 1263 (D. Or. 2002) Nat l Parks and Conservation Assn. v. Babbit, 241 F.3d 722 (9th Cir. 2001) Nat l Wildlife Fed n v. Nat l Marine Fisheries Serv., 422 F.3d 782 (9th Cir. 2005) Ocean Advocates v. U.S. Army Corps of Eng rs, 402 F.3d 846 (9th Cir. 2004) Ohio Valley Envtl. Coal. v. U.S. Army Corps of Eng rs, 674 F. Supp. 2d 783 (S.D. W. Va. 2009) Sierra Club v. Tahoe Regional Planning Agency, 2014 WL (E.D. Cal.) Storman s Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) Federal Statutes 28 U.S.C. 1292(a)(1) U.S.C. 1251(a) U.S.C v

7 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 7 of 64 Federal Regulations and Federal Register 33 C.F.R , C.F.R , 12, , passim , 39, , 24, Fed. Reg. 18,026 (Mar. 17, 1981) California Statutes California Government Code 7260 et seq Other State Statutes Conn. Gen. Stat et seq Nev. Rev. Stat et seq vi

8 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 8 of 64 Jurisdictional Statement The district court had subject matter jurisdiction over this action under 28 U.S.C. section 1331 because the complaint alleges that federal defendants actions violate the National Environmental Policy Act, 42 U.S.C. section 4321 et seq., and the Clean Water Act, 33 U.S.C. section 1251 et seq., as well as both Acts implementing regulations. On June 3, 2015, the district court denied Plaintiff Upper South East Communities Coalition s ( Coalition ) motion for a preliminary injunction. Plaintiff s Excerpts of Record on Appeal ( ER, filed concurrently with this brief) at 74:21-75:1. 1 The Coalition timely filed a notice of appeal on June 16, 2015, in compliance with Federal Rule of Appellate Procedure rule 4(a)(1). Id. at This Court has jurisdiction over the Coalition s appeal of the denial of its motion for preliminary injunction under 28 U.S.C. section 1292(a)(1). 1 All citations to the record in this brief that are not contained in Plaintiff s Excerpts of Record on Appeal Volumes 1 and 2 are cited by reference to the district court s docket number ( ECF No. ). 1

9 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 9 of 64 Issues Presented for Review The district court denied the Coalition s motion for a preliminary injunction on the ground that the Coalition was not likely to succeed on the merits of its claims. In particular, the court held that the U.S. Army Corps of Engineers ( Corps ) had not violated the National Environmental Policy Act ( NEPA ) by preparing an environmental assessment ( EA ), rather than an environmental impact statement ( EIS ). The district court also held that the Corps had complied with NEPA s requirements to involve the public in its environmental review process. Finally, the district court upheld the Corps conclusion that the project at issue in this case, a six-lane, 4.5 mile highway through wetlands, floodplains, and flood detention basins, was the least environmentally damaging, practicable alternative ( LEDPA ) for improving traffic congestion in the region. In so ruling, did the district court: 1. Fail to apply clear Ninth Circuit precedent, which provides that federal agencies must prepare an EIS, not an EA, when the record contains substantial questions about a project s potentially significant environmental impacts? 2

10 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 10 of Abuse its discretion in finding the Corps adequately involved the public, even though the Corps did not circulate a draft EA/Finding of No Significant Impact ( EA/FONSI ) for public review and comment, as required by NEPA implementing regulations when a project is, or is closely similar to, one that normally requires preparation of an EIS? 3. Abuse its discretion in upholding the Corps conclusion that the Project was the LEDPA, even though there is no evidence in the record to support the conclusion that two less damaging alternatives were not practicable? Introduction This case challenges the U.S. Army Corps of Engineers issuance of a permit ( Section 404 Permit ) to the Regional Transportation Commission of Washoe County ( RTC ), authorizing RTC to build a new, six-lane highway through the undeveloped floodplains, wetlands, and flood detention basins of the Truckee Meadows area, located on the southern and eastern boundaries of Sparks and Reno, Nevada. The Coalition, a non-profit organization of area residents concerned about the project s environmental impacts, especially its potential to exacerbate area flooding, had repeatedly objected to the highway project 3

11 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 11 of 64 and submitted extensive comments, including expert comments, on the project s likely effects. Region 9 of the Environmental Protection Agency ( EPA ) was also seriously concerned about the project, which was sited through an area known to contain mercury-contaminated soil. EPA recommended twice that the Corps deny the permit unless these and other EPA concerns were addressed. Even the City of Reno, which has two members on the board of RTC, expressed concerns about the project s impacts and requested that the Corps prepare an EIS to analyze them. Instead of addressing the concerns of the Coalition, EPA, and the City of Reno, the Corps issued the permit on the basis of an EA/FONSI. The Corps did not provide the public with an opportunity to review the EA/FONSI; it did not even provide the public of a copy of the document until three weeks after issuing the permit. By that time, RTC had begun construction of the new highway. The Coalition immediately filed suit, alleging that the Corps actions violated NEPA and the Clean Water Act ( CWA ), and sought an injunction to stop construction until the merits of its claims could be heard. 4

12 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 12 of 64 The district court denied the Coalition s motion on June 3, 2015, holding that the Coalition was not likely to succeed on the merits of its claims. In doing so, the district court failed to apply clear Ninth Circuit precedent and abused its discretion in upholding Corps actions that were completely unsupported by the record. By this appeal, the Coalition respectfully requests that the Court overturn the district court s order and direct the district court to issue an injunction pending a decision on the merits. 2 Statement of the Case The Coalition filed this action on April 29, ECF No. 1 (Complaint for Declaratory and Injunctive Relief). In its complaint, the 2 In denying the Coalition s motion for preliminary injunction, the district court did not address whether the Coalition had demonstrated irreparable harm, balance of the equities, and public policy in favor of an injunction. ER at 74: The parties have briefed these issues extensively before the district court and in the Coalition s motion for injunctive relief pending appeal. ECF No. 5-1 at 26-30; ECF No. 45 (Combined Reply Brief in Support of Plaintiff s Motion for Preliminary Injunction) at 19-23; Appellant s Amended Motion for Injunction Pending Appeal and Request for Expedited Briefing and Hearing on Appeal ( Emergency Motion ), filed June 26, 2015, at 8-10, Therefore, if the Court determines that the district court abused its discretion in denying the Coalition s motion, the Coalition requests that it remand to the district court with direction to issue the preliminary injunction. See Klein v. City of San Clemente, 584 F.3d 1196, 1200, 1207 (9th Cir. 2009) (remanding with order to grant injunction, despite fact that district court denied injunction only on basis of success on merits). 5

13 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 13 of 64 Coalition alleged that the Corps violated NEPA when it approved a Section 404 permit for the Project without preparing an EIS. See ER at ( 64-69). The Coalition also alleged that the Corps violated the Clean Water Act ( CWA ) when it determined, without adequate support, that the Project was the least environmentally damaging practicable alternative. See id. at 140 ( 88-92). 3 One week later, on May 6, the Coalition moved for a preliminary injunction, asking the district court to stop construction of the Project until the Coalition s claims could be heard on the merits. ECF No. 5 (Notice of Motion and Motion for Preliminary Injunction). The district court heard the Coalition s preliminary injunction motion on June 3, ER at At the end of the hearing, the court denied the Coalition s motion. Id. at 74:21-75:1. The court did not reach any conclusions regarding the Coalition s showing of irreparable harm, the 3 At the time the Coalition filed its complaint, the Corps had not yet released the EA/FONSI to the public. As a result, the Coalition s original complaint did not allege that the EA/FONSI was itself inadequate. The Coalition has since amended its complaint to include this additional claim, alleging that the EA failed to take the requisite hard look at the Project s impacts on hydrology and flooding, methylmercury contamination, aesthetic impacts, and biological resources, as well as practicable alternatives to the Project. ER at ( 93-98). 6

14 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 14 of 64 balance of the equities, or whether an injunction would be in the public interest. Id. at 74: Instead, the court denied the motion solely on the ground that the Coalition was not likely to succeed on the merits of its claims. Id. The Coalition appealed the district court s ruling on June 16, Id. at Because Project construction was, by that time, fully under way, the Coalition applied to the district court for an injunction pending appeal. ECF No. 50. The district court denied the application on June 17, ER at The Coalition then filed an emergency motion for an injunction pending appeal with this Court. See Emergency Motion, filed June 26, The Court denied this motion on July 9, 2015, but granted the Coalition s request for expedited briefing. See Order, Ninth Circuit Case No , filed July 9, Statement of Facts I. RTC Applies to the Corps for a Section 404 Permit to Construct a New, Six-Lane Highway Through Floodplains and Wetlands. In 2011, RTC applied to the Corps for a permit to build a new 5.5- mile long, six-lane highway ( Southeast Connector or SEC ) south of the City of Sparks and on the eastern boundary of the City of Reno. ER 7

15 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 15 of 64 at A Corps permit was required for the SEC because, to build the highway, RTC would need to permanently fill acres of jurisdictional wetlands and temporarily fill acres more. Id. at 211, 216, In addition, the northern portion of the SEC would bisect an undeveloped agricultural floodplain, designated by the Corps as the Truckee Meadows Reach. Compare id. at 229 with id. at 234; see also id. at 235. The highway would then pass through a public golf course, which was designed and built as a flood detention basin. Id. This portion of the highway would also pass within 200 feet of neighboring residences. Id. at 150. The proposed highway then continues south through more flood detention basins and wetlands, finally connecting to an existing north-south road called Veterans Parkway. Id. at ; id. at 229. RTC s plan to build this new highway through wetlands, undeveloped open space, designated flood detention basins, prime agricultural lands, and a public golf course has been highly controversial from the start. See, e.g., id. at Scores of residents living near the proposed route objected to RTC s permit application and expressed concerns that this massive infrastructure project would 8

16 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 16 of 64 exacerbate the impacts of flooding in the region, which is known to be severe. Id. at In 1997, a devastating flood swept through the region, causing one death and a reported $450 million in damage in the Truckee Meadows area alone. See id. at 244. To prevent a recurrence of this disastrous flooding, the Corps is working with a regional flood control agency on a flood control project that designates the Truckee Meadows area as a detention basin for flood waters. See id. at 234. The SEC would run straight through this detention basin. Compare id. at 229 with id. at 234; see also id. at 235. Local residents and others were also concerned about the Project s impacts on the wildlife and special status species living in and around the floodplains and wetlands targeted for development by RTC. According to local agencies and the Corps, Steamboat Creek offers one of the last and best opportunities in the greater Truckee Meadows area to create a linear open space, connecting valuable wetland areas in the Reno [planning area] with Steamboat Creek, south Rosewood Lakes and Hidden Valley, Hidden Valley Regional Park, and ultimately the Truckee River to the north. Id. at 233. The area is currently home to red-tailed hawk, red-shouldered hawk, great horned owl, American 9

17 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 17 of 64 kestrel, red-winged blackbird (id. a 230), and golden and bald eagles (id. at ). The Truckee River, which crosses under the SEC at its northern end, is home to the Federally threatened Lahontan cutthroat trout, the Lahontan redside shiner, speckled dace, Tahoe sucker, and mountain sucker. Id. at 231. Pyramid Lake, into which the Truckee River flows, is habitat for the endangered Cui-ui fish. See id. at 246. Region 9 of the Environmental Protection Agency ( EPA ) echoed many of these concerns, saying that the Project could disrupt[]... ecological connectivity, decrease[] biodiversity, and impair[] floodplain and ecosystem services. Id. at 238. It then recommend[ed] permit denial unless the Corps could resolve its concerns about the Project s impacts to aquatic resources and demonstrate that there were no feasible alternatives to building this new highway through the floodplain. Id. at 236. II. RTC Segments the Project and Builds Phase I Before Obtaining a Section 404 Permit. After receiving these overwhelming objections to its permit application, RTC began to chart a new course of action. In 2012, RTC asked the Corps for permission to segment the SEC into two phases. Id. at Phase I, which was the northernmost mile of the new 10

18 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 18 of 64 highway, included a bridge over the Truckee River and an overpass over Clean Water Way, dead-ending in an agricultural field. See id.; id. at 229, 249. Phase II would be the remaining 4.5 miles of the proposed route. Id. at 212, 229. Because Phase I would not impact any jurisdictional waters, the Corps advised RTC that no Section 404 Permit was required to build it (id. at ), even though it was clear Phase I had no utility apart from Phase II, which would require a permit. Following this pronouncement, RTC immediately withdrew its application for a Section 404 permit for the entire SEC and began constructing Phase I. See id. at 149. The Coalition filed suit, challenging the Corps decision to allow RTC to move ahead with Phase I and RTC s construction of it without a Section 404 permit. Id. at As the Coalition explained, this segmentation was a blatant attempt to put a thumb on the scale in favor of issuing a permit for Phase II. See id. at Under Corps regulations, the agency cannot issue a Section 404 permit unless the project is the least environmentally damaging practicable alternative. See 40 C.F.R (a). Once the $65 million first phase of the SEC was built, without any review by the Corps, alternatives that did not 11

19 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 19 of 64 connect to Phase I would almost certainly be considered economically not practicable. See id. This segmentation therefore violated the Clean Water Act and NEPA. The Coalition sought a preliminary injunction to stop construction of Phase I until its claims could be heard on the merits. Id. at In response, the Corps submitted sworn testimony assuring the Coalition that the Corps would not consider either the completion of Phase I or its cost in the Corps evaluation of alternatives to Phase II. Id. at After obtaining these assurances, the Coalition voluntarily dismissed its lawsuit without prejudice. Id. at Phase I of the Highway Project was completed in Id. at 273. Because its southern end does not connect to any other roadway, it has remained unused ever since. III. RTC Submits a New Application, Requesting a Section 404 Permit for Phase II. In July, 2013, RTC submitted a new Section 404 permit application for Phase II of the SEC ( the Project ). See id. at According to the permit application, the Project s purpose is to provide improved north-south regional linkages between the South Truckee Meadows and the City of Sparks because [t]he existing roadway 12

20 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 20 of 64 network is insufficient for the amount of traffic in the network for the design year [i.e., 2035]. Id. at (project part of 2035 RTP), 218 ( Design year forecast traffic volumes through ). The application described six alternatives, including several alternative north-south corridors and an alternative that would not construct any new roads but would widen and improve existing streets only. Id. at RTC s preferred alternative for Phase II was the so-called Valley-Corridor alternative, which picked up where Phase I left off and continued south through Truckee Meadows, the Rosewood Lakes golf course, and the Butler Ranch flood detention basins to Veterans Memorial Parkway in the south. Id. at 216, The Corps issued a four-page public notice of the permit application in August Id. at This notice briefly described the project, noting its potential impacts to wetlands. Id. The notice did not mention any other potential environmental impacts that could be caused by the Project. In fact, it did not even mention that the Project would run right through a floodplain. Despite the brevity of the notice, the Coalition submitted extensive comments on the significant environmental impacts that 13

21 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 21 of 64 would result from construction and operation of Phase II, including potential flood impacts, impacts to threatened and endangered species, and potential contamination of Steamboat Creek as a result of disturbing the area s mercury-laden soils. Id. at The Coalition also demonstrated that there were a number of practicable alternatives to building a highway through wetlands and a floodplain that would accomplish the Project s goals with fewer environmental impacts. Id. at 279. The Coalition urged the Corps to prepare an EIS and hold a public hearing before taking action on the application. Id.; id. at 291. The Coalition also raised questions about RTC s suspiciously changing estimates for the cost of its preferred alternative and other alternatives. For example, according to RTC s analysis, the cost of one alternative (the Sparks Industrial alternative) jumped 75 percent between September 2013 and February 2014, from $352-$437 million to $655-$740 million. Compare id. at 292, 300 with id. at 305, 307; see also id. at 309, During that same five-month period, RTC s estimate for the cost of its preferred route dropped 50 percent, from $218-$258 million to $120-$140 million. Compare id. at 307 with id. at 295; see also id. at

22 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 22 of 64 The Coalition was not alone in having concerns about the Project s impacts and the Corps analysis. In October 2013, EPA reiterated its objections to the Project, noting that there was still insufficient evidence to support the conclusion that the Project was the least environmentally damaging practicable alternative, as required under the Clean Water Act s implementing regulations. Id. at 318. EPA also noted that there was not enough information about the Project s impacts and proposed mitigation measures. Id. EPA was especially concerned about the Project s potential to exacerbate mercury and methylmercury contamination in the area, and repeatedly questioned the adequacy of the Corps (and RTC s) analysis of these impacts. Id. at The soils along the proposed SEC route contain high levels of mercury and methylmercury. Id. at 329. These toxic contaminants originated in Washoe Lake, where, in the late 1800s, mills used elemental mercury to extract silver and gold from the Comstock deposit. Id. at 330, 334. Since then, this mercury has been carried downstream by normal stream flows and flood events. Id. at 334. When elemental mercury is exposed to certain conditions and substances in the environment (a process known as methylation ), the 15

23 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 23 of 64 result is methylmercury. Id. at 330. Methylmercury is extremely toxic; even low doses can affect neurological and cardiovascular systems in humans and fish. Id. Even the Reno City Council which has two members on the fivemember board of the RTC had serious concerns about the Project s impacts. On April 15, 2015, the City Council adopted a resolution requesting that the Corps prepare an EIS for the Project or, at the very least, provide the City with notice and time to comment on any EA. Id. at IV. The Corps Issues the Section 404 Permit on the Basis of an Environmental Assessment/Finding of No Significant Impact. Despite these pleas from the affected public, serious questions raised by the EPA, and the City of Reno s request for more analysis, the Corps did not prepare an EIS. Instead, on April 16, 2015, the Corps issued the Section 404 Permit for Phase II (id. at ) on the basis of an EA and Finding of No Significant Impact ( FONSI ) (together, EA/FONSI ). The Corps did not provide the public with an opportunity to review and comment on the EA/FONSI before approving the Project. Id. at 358, In fact, the Corps did not even provide the Coalition 16

24 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 24 of 64 (or any other member of the public) with a copy of the EA/FONSI until May 4, more than two weeks after it issued the permit and only after a Coalition member submitted a formal FOIA request for the document. Id. 4 The EA/FONSI, which recites in large part language from RTC s application materials, contains a description of the approved action, its purported purpose, and the proposed acres of compensatory mitigation and 2.42 acres of open waters mitigation (id. at ); a description of the public involvement in the permitting process, including brief summaries of comments submitted and the Corps responses (id. at ); a discussion of the alternatives identified by RTC and the approved Project s impacts as compared to impacts of some of these alternatives (id. at ); and several special conditions on the Section 404 permit (id. at ). 4 Throughout the nearly two-year permit review process, the only documents the Corps ever provided to the public without a prior FOIA request were the notice of the original, 2011 Section 404 Permit application (id. at 361), and the notice of the 2013 permit application. Except for s saying the permit was still under review, the Corps rarely provided the Coalition with any other information about the Project unless the Coalition submitted a FOIA request to obtain this information. Id. The Corps did not even provide the Coalition with notice of changes to RTC s permit application. 17

25 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 25 of 64 Given the extent and scope of the wetlands affected by Phase II of the SEC, the EA concludes that the Project is federalized, meaning that the Corps was required to consider the environmental effects of the entire highway, not just those portions directly impacting waters of the United States. Id. at 153. The EA also states that the [m]ajor issues identified by the Corps with regard to the project are [m]ethylation of mercury and flood plain impacts. Id. at 159. Notably, these major issues were not mentioned in the Corps August 2013 public notice for the project. Id. at The EA considers a total of twelve project alternatives (or variants of alternatives discussed in RTC s permit application), yet carries forward only five of these for further review while rejecting seven as not practicable or reasonable. Id. at Of those five, three are merely slight variations on RTC s preferred route. Id. at Save for one alternative (the Sparks Industrial alternative), the EA does not indicate that the Corps rejected any alternative due to its cost. Id. at ; ECF No. 23 at (Corps statement, in briefing below, that the cost of alternatives was not relied on to determine the [LEDPA] ). The Widen and Improve Existing Streets Only alternative, which the 18

26 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 26 of 64 Corps alleged would require taking residences and 100 acres of commercial property, was rejected for the reason that, [o]ften, it is very difficult to successfully relocate a business to a nearby location, particularly in areas where available properties are scarce. ER at 163. The McCarran Widening alternative was rejected because [t]here would be disruption to the community with the expansion of McCarran Boulevard, Longley Lane, and Double R Boulevard due to construction as well as with the movement of commercial and residential properties. Id. On April 20, RTC began construction. Id. at 340, ( 4-6). Summary of the Argument The district court failed to follow numerous Ninth Circuit cases holding that agencies must prepare an EIS not just an EA when there is a substantial question about whether a project could significantly affect the environment. Instead, the court erroneously relied on a case in which an agency already prepared an EIS and the Court deferred to the agency s scientific expertise in finding the EIS was adequate. Here, however, the Corps refused to prepare an EIS. Moreover, the record clearly shows that EPA raised substantial 19

27 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 27 of 64 questions about the Project s potential to exacerbate methylmercury contamination in Steamboat Creek and the Truckee River, which is home to special status species. As a result, an EIS was required, and the district court abused its discretion in finding the Coalition was unlikely to succeed on this claim. The district court also abused its discretion in finding that the Corps had complied with regulations requiring the Corps to involve the public in its preparation of the EA. One of these regulations specifically requires the Corps to circulate a draft EA/FONSI for public review and comment when the project being analyzed is, or is closely similar to, a project requiring preparation of an EIS. Here, the record demonstrates that the Project a six-lane highway through wetlands, floodplains, mercury-laden soils, a public golf course, and flood detention basins is, at the very least, closely similar to one in which an EIS would normally be required. As a result, the district court abused its discretion in finding the Coalition unlikely to succed on its claim that the Corps violated NEPA by failing to circulate a draft EA/FONSI. Finally, the district court abused its discretion in upholding the Corps conclusion that the Project is the least environmentally 20

28 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 28 of 64 damaging practicable alternative ( LEDPA ). Under NEPA s implementing regulations, there is a presumption that non-water dependent projects, like the Project at issue here, are not the LEDPA, and the Corps must deny permits for such projects unless it is clearly demonstrated that there are no less environmentally damaging alternatives. Here, the Corps rejected two far less damaging alternatives both of which involved widening existing roads instead of building a new highway through the floodplain and wetlands for the sole reason that they would require RTC to relocate residents and businesses. However, the record contains no evidence that this requirement rendered the alternatives not practicable. Instead, the Corps relied on the following general statement: Often, it is very difficult to successfully relocate a business to a nearby location, particularly in areas where available properties are scarce. Id. at 163. The district court abused its discretion in finding that this general statement was sufficient to rebut the regulatory presumption against siting roads through wetlands. 21

29 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 29 of 64 Argument I. Standard of Review The district court s denial of the Coalition s request for preliminary injunction is reviewed for abuse of discretion and should be reversed if the district court based its decision on an erroneous legal standard or on clearly erroneous findings of fact. Storman s Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir. 2009) (quoting FTC v. Enforma Natural Prods., Inc., 362 F.3d 1204, (9th Cir. 2004)). A finding of fact is clearly erroneous if it is implausible in light of the record, viewed in its entirety, or if the record contains no evidence to support it. Id. (quoting Nat l Wildlife Fed n v. Nat l Marine Fisheries Serv., 422 F.3d 782, 794 (9th Cir. 2005)). The district court s interpretation of the underlying legal principles is subject to de novo review. Storman s Inc., 586 F.3d at 1119 (citing Cal. Pharmacists Ass n v. Maxwell-Jolly, 563 F.3d 847, 849 (9th Cir. 2009)); see also Earth Island Inst. v. U.S. Forest Serv., 351 F.3d 1291, 1298 (9th Cir. 2003). 22

30 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 30 of 64 II. The District Court Abused Its Discretion in Holding that the Corps Was Not Required to Prepare an EIS for the Project, Despite Substantial Questions About Its Impacts. A. Overview of NEPA s Requirements for Preparation of EIS. NEPA s fundamental purpose is to ensure that federal agencies and the public are informed about the environmental impacts of proposed agency actions before the federal government decides to take them. See 42 U.S.C. 4321; 40 C.F.R To accomplish this purpose, federal agencies must prepare an environmental impact statement ( EIS ) before approving any major Federal action that could significantly affect the quality of the human environment. 42 U.S.C. 4332(2)(C); 40 C.F.R (a)(1). An EIS is a detailed written statement that provide[s] [a] full and fair discussion of significant environmental impacts of the proposed action. 40 C.F.R (b), , In determining whether a project will significantly affect the environment, agencies must consider both its context and intensity. Ctr. for Biological Diversity v. Nat l Highway Traffic Safety Admin., 538 F.3d 1172, 1220 (9th Cir. 2008) (quoting Nat l Parks and Conservation Assn. v. Babbit, 241 F.3d 722, 731 (9th Cir. 2001); 40 C.F.R ). 23

31 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 31 of 64 Intensity is determined by weighing number of factors, including [t]he degree to which the effects on the quality of the human environment are likely to be highly controversial, [t]he degree to which the possible effects on the human environment are highly uncertain, and the [u]nique characteristics of the geographic area such as proximity to... park lands [or] wetlands. Id (b). When an agency is uncertain whether the impacts of a major federal action will be significant, the agency must prepare an EA. See 40 C.F.R , , An EA is a concise public document that briefly provides sufficient evidence and analysis for determining whether to prepare an EIS. See 40 C.F.R If, after preparing an EA, the agency concludes that its action will not have a significant effect on the human environment, then it issues a Finding of No Significant Impact or FONSI, explaining why an environmental impact statement need not be prepared. 40 C.F.R If, however, in the course of preparing an EA, substantial questions are raised as to whether a project... may cause significant degradation of some human environmental factor, the agency must prepare an EIS. Greenpeace Action v. Franklin, 14 F.3d 1324, 1332 (9th 24

32 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 32 of 64 Cir. 1992) (emphases added; internal quotation marks omitted). To trigger this requirement, a plaintiff need not show that significant effects will in fact occur, but need only raise substantial questions whether a project may have a significant effect. Id. (internal quotation marks omitted). Moreover, an EIS is required where uncertainty about a project s impacts may be resolved by collecting more data, or where the collection of more data may prevent speculation on potential... effects. Ocean Advocates v. U.S. Army Corps of Eng rs, 402 F.3d 846, (9th Cir. 2004) (internal quotation marks omitted). This test for when an EIS is required has been consistently applied in the Ninth Circuit and sets a low bar for when a federal agency must prepare an EIS rather than an EA. See, e.g., Klamath Siskiyou Wildlands Ctr. v. Boody, 468 F.3d 549, (9th Cir. 2006) (explaining that Ninth Circuit s substantial questions test for preparation of EIS is a low standard ). This low bar results in more analysis before decisions are made, thus making the scenario envisioned by NEPA s drafters [ ] more likely to occur: given more information, agencies will make better decisions, producing better environmental outcomes. Michael C. Blumm & Keith Mosman, The 25

33 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 33 of 64 Overlooked Role of the National Environmental Policy Act in Protecting the Western Environment: Nepa in the Ninth Circuit, 2 Wash. J. Envtl. L. & Pol y 193, 225 (2012). Regardless of whether an agency prepares an EA or and EIS, its environmental review must take a hard look at the impacts of its action. Center for Biological Diversity, 538 F.3d at 1194 (internal quotations omitted). B. The Record Contains Evidence Demonstrating Substantial Questions About the Project s Mercury Impacts. In support of its motion for a preliminary injunction, the Coalition argued that it was likely to succeed on the merits of its NEPA claim because the Corps refused to prepare an EIS for the Project even though EPA had raised substantial questions about its potential mercury impacts. ECF No. 5-1 (Memorandum of Points and Authorities in Support of Plaintiff s Motion for Preliminary Injunction) at 14-17; ECF No. 45 at 12-17; Center for Biological Diversity, 538 F.3d at 1219; ER at , In particular, EPA noted that the Project, which would require substantial grading in mercury-laden soils adjacent to Steamboat Creek, the creation of new wetlands in mercury- 26

34 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 34 of 64 contaminated floodplains, and work in Steamboat Creek to reconnect it to the floodplain, could exacerbate methylization of mercury. Id. at 323 (EPA mercury expert stating I don t think we could know [] with confidence that the proposed wetlands are not efficient methylators ); id. at 327 (same expert stating that RTC s assumption that methylation will be minimal when temperatures are low is not warranted ), 328 ( It s unclear how reducing the energy of the system will limit methylation. ). Any increase in mercury or methylmercury levels in Steamboat Creek, the Truckee River, or Pyramid Lake would have significant, adverse effects on aquatic resources there. Id. at 323 (citing 2001 study concluding it is essential that restoration methods for Steamboat Creek do not enhance methylmercury production, which may impact fish in the Truckee River and Pyramid Lake ). 5 5 Neither the Corps nor RTC has disputed that increasing mercury and methylmercury contamination in Steamboat Creek would be a significant environmental impact. See id. at 170, 174; ECF No. 22 (Intervenor RTC s Memorandum in Opposition to Plaintiff s Motion for Preliminary Injunction) at 17-18; ECF No. 23 (Federal Defendants Memorandum in Opposition to Plaintiff s Motion for Preliminary Injunction) at 18; see also 40 C.F.R (defining significantly ). Steamboat Creek flows into the Truckee River, which is home to threatened Lahontan cutthroat trout; the Truckee River, in turn, flows into Pyramid Lake, which provides the only habitat for the endangered Cui-ui fish. ER at 245. Thus increasing mercury and methylmercury 27

35 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 35 of 64 In the materials it submitted to the Corps, RTC claimed that the Project would, overall, reduce the potential for mercury, citing three Project design features. First, RTC proposed to isolate 10,000 kilograms of mercury contaminated soil under the roadbed. Id. at 334, 336. Second, RTC planned to modify Steamboat Creek, to reduc[e] the energy of the system. Id. at And third, to mitigate the Project s destruction of acres of wetlands, RTC would create new wetlands adjacent to Steamboat Creek. Id. at EPA repeatedly questioned RTC s claims. Id. at For example, EPA noted that there was substantial uncertainty about how the Project would affect the methylation of mercury in the floodplain and described a number of additional studies that could be conducted to eliminate at least some of this uncertainty. Id. at EPA also stated that remediation of mercury was a challenging and emerging science. Id. at 320. Because of the uncertainty and magnitude involved with the Project, EPA highly recommended a pilot study to loads in Steamboat Creek would have dire consequences for these species, not to mention nearby residents. Id. at

36 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 36 of 64 assess whether the Project would truly limit[] mercury methylation. Id. at (emphases added). The Corps did not conduct this or any other study. Instead, RTC s consultant prepared a technical memorandum on the subject. Id. at This memorandum, however, did not satisfy EPA s concerns. In fact, EPA s mercury expert found numerous flaws in it. Id. at 327. For example, EPA noted that a fundamental conclusion in the memo that the only 43 kilograms of mercury would be deposited on the floodplain over 100 years was a huge over extrapolation of an extremely limited measurement. Id. (emphasis added). The memo then relied on this unsupported conclusion to conclude the Project would have an overall beneficial effect because RTC would isolate 10,000 kilograms of mercury under the road bed. Id. at 336. EPA s expert calls this conclusion a bit misleading because [p]resumably only a very small fraction of the 10,000 kg is currently in a position where it is available for methylation. Id. at 327. In other words, most of the mercury laden soil proposed to be isolated would never have posed a contamination threat but for the Project, which requires heavy grading through the contaminated areas. 29

37 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 37 of 64 EPA also questioned the memo s conclusion that the Project design would minimize methylation of mercury because any flooding would occur early in the season when temperatures are low. Id. EPA called this assumption not warranted, noting that there are many studies of high [methylmercury] production occurring at a few degrees [Celsius]. Id. EPA then noted the lack of evidence to support the memo s conclusion that [r]educ[ing] the energy of the system through reconnection of the channel to the floodplain would also reduce methylation. Id. at 328. In general, EPA s expert opined, I would think that reducing the energy of the water would increase the potential for... methylation. Id. (emphasis added). The EA did not resolve EPA s questions. Rather, it simply reiterated RTC s claims that certain design features placing 10,000 kilograms of mercury under the new highway and reducing the energy of the system by connecting Steamboat Creek to the floodplain would help mitigate potential production of methyl mercury. Id. at

38 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 38 of 64 But these are the very design features EPA had questioned at length. Id. at In fact, the EA did not even inform the public that EPA had raised these questions. See id. at 154 (noting only that EPA submitted comments related to mercury mobilization, mercury methylation and a suggestion of development of an adaptive management plan ). This omission alone is sufficient to establish substantial questions about the Project s impacts and the inadequacy of the EA. League of Wilderness Defenders-Blue Mountains Biodiversity Project v. Zielinski, 187 F. Supp. 2d 1263, 1270 (D. Or. 2002) (finding serious questions 6 In its briefing below, the Corps and RTC made two arguments in support of their claim that the Corps had resolved EPA s concerns. First, RTC cited a two-page memo prepared by the Corps prior to issuing the EA. ECF No. 22 at 17-18; ER at ; see also id. at 157 (citing September 2014 memo). But that memo once again simply reiterated RTC s conclusions; it did not respond to EPA s questions. See ER at Indeed, the memo actually highlighted some of the scientific uncertainty surrounding methylization. Id. at 144 (noting that [m]any parameters influence the production of methyl mercury in riparian systems and some wetlands act as mercury sinks while others with similar geochemical and morphological characteristics act as methylation beds ). Second, the Corps noted that the EPA had not used its veto power to override the Section 404 Permit issued for the Project. ECF No. 23 at 20 fn. 7. As the Coalition pointed out, however, the EPA has only very rarely used this veto power. ECF No. 45 at 15 fn. 5. Thus, the fact that EPA did not use it here does not demonstrate that all of the agency s concerns had been addressed. 31

39 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 39 of 64 about logging project s impacts where EA fail[ed] to disclose respected scientific evidence running contrary to the BLM s final decision... [and] fails to address differences between the BLM s view of likely impacts, and the view of others in the scientific community ). 7 Nonetheless, the district court held that the Coalition was not likely to succeed on the merits of this claim. In reaching this conclusion, the district court found that the Corps specifically evaluated the issue of possible mercury contamination and concluded that the Project would actually reduce the risk of contamination. ER at 64:9-19. Giving substantial deference to the Corps conclusion, the district court held 7 The only changes made to the Project as a result of EPA s mercury comments were to move the proposed compensatory wetlands from Butler Ranch to the Yori Drain and to require monitoring for mercury mobilization and methylation. See ER at (all mitigating wetlands for Project to be established at Yori Drain); id. at 341, 346 (discussing mitigation change); id. at 156 (noting special condition for mercury monitoring). The Coalition raised additional questions about the mercury impacts of the compensatory wetlands at their new location. Id. at 346. Moreover, although the EA asserts that the Corps also required creation of an adaptive management plan (id. at 156), presumably to protect Steamboat Creek if monitoring indicated the Project was adding mercury or methylmercury to the system, the Coalition has not been able to locate any such condition in the Section 404 Permit itself, much less an actual plan. 32

40 Case: , 07/14/2015, ID: , DktEntry: 21-1, Page 40 of 64 the EA was sufficient and no EIS was required. Id. at 64:22, 64:24-65:15. C. The District Court Ignored the Ninth Circuit s Substantial Questions Test in Upholding the Corps Decision to Prepare an EA. The district court s ruling plainly ignored the Ninth Circuit s substantial questions test, and for that reason alone should be overturned. See id. at 62:23-63:9 (summarizing EIS requirements but failing to include requirement that EIS be prepared where substantial questions presented). Under this test, the question is not whether the agency considered a certain impact, but whether the record demonstrates that there remain substantial questions about whether the Project will have a significant impact. See, e.g., Center for Biological Diversity, 538 F.3d at ; Anderson v. Evans, 314 F.3d 1006, 1021 (9th Cir. 2002). If such questions remain, the agency must prepare an EIS to analyze those impacts even if the agency believes they will not be significant. That is exactly what the Ninth Circuit held in Anderson. In that case, the National Marine Fisheries Service and National Oceanic and Atmospheric Administration prepared an EA to analyze the impacts of 33