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Food & Water Watch v. United States Department of Agriculture

United States District Court, District of Columbia

September 7, 2018

FOOD & WATER WATCH, Plaintiff,



         The plaintiff, Food & Water Watch (“FWW”), has filed a nine-count complaint against three defendants, the United States Department of Agriculture (“USDA”), the Farm Service Agency (“FSA”), and Deanna Dunning, in her official capacity as an FSA Farm Loan Officer (collectively, “defendants”), under the Administrative Procedure Act (“APA”), 5 U.S.C. § 551, et seq., and the National Environmental Policy Act (“NEPA”), 42 U.S.C. §§ 4321-70, seeking an order and judgment setting aside an environmental assessment completed by the defendants in connection with a nonparty farm's “application for a guaranteed loan to construct and operate a poultry concentrated animal feeding operation, ” “[d]eclaring that Defendants violated NEPA by failing” to complete an adequate environmental impact statement in connection with the loan application, and “[e]njoining implementation of Defendants' loan guarantee.” Compl. ¶¶ 1, 5, ECF No. 1. The defendants have moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c), contending that the plaintiff's claims are moot and that the plaintiff lacks standing, see generally Defs.' Mot. J. Pleadings (“Defs.' Mot.”), ECF No. 17, while the plaintiff has moved to compel the complete Administrative Record (“AR”), see generally Pl.'s Mot. Compel AR (“Pl.'s Mot. Compel”), ECF No. 18.[1] For the reasons described below, the plaintiff's claims are not moot and the plaintiff has standing to pursue this lawsuit. Accordingly, the defendants' motion is denied while the plaintiff's motion is granted.[2]

         I. BACKGROUND

         The statutory framework governing the plaintiff's claims is discussed first, followed by the details of the loan and environmental assessment at issue in this case.

         A. Statutory Framework

         1. NEPA Environmental Assessments

         The NEPA represents “a broad national commitment to protecting and promoting environmental quality, ” Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 348 (1989) (citing 42 U.S.C. § 4331), and was created, in part, for the purpose of “establish[ing] a set of ‘action forcing' procedures requiring an environmental impact statement on any proposed major Federal action which could significantly affect the quality of the environment, ” S. Rep. No. 94-152, at 3 (1975). To this end, the NEPA requires federal agencies, “to the fullest extent possible, ” to prepare and include an Environmental Impact Statement (“EIS”) in “every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, ” 42 U.S.C. § 4332(2)(C); see also Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 15-16 (2008), and to consider a number of factors, including “the environmental impact of the proposed action, ” “any adverse environmental effects which cannot be avoided should the proposal be implemented, ” and “alternatives to the proposed action, ” 42 U.S.C. § 4332(2)(C)(i)-(iii). “The statutory requirement that a federal agency contemplating a major action prepare such an [EIS] serves NEPA's ‘action-forcing' purpose in two important respects, ” Robertson, 490 U.S. at 349, by (1) “ensur[ing] that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts, ” and (2) “guarantee[ing] that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision, ” Blue Ridge Envtl. Def. League v. NRC, 716 F.3d 183, 188 (D.C. Cir. 2013) (quoting Robertson, 490 U.S. at 349).

         “The Council of Environmental Quality (CEQ), established by NEPA with authority to issue regulations interpreting it, has promulgated regulations to guide federal agencies in determining what actions are subject to” the EIS requirement. Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 757 (2004) (citing 40 C.F.R. § 1500.3). Under these regulations, an agency may prepare “a more limited document, an Environmental Assessment (EA), if the agency's proposed action neither is categorically excluded from the requirement to produce an EIS nor would clearly require the production of an EIS.” Id. (citing 40 C.F.R. § 1501.4(a)-(b)). An EA is a “‘concise public document' that ‘[b]riefly provide[s] sufficient evidence and analysis for determining whether to prepare an [EIS].'” Id. (alterations in original) (quoting 40 C.F.R. § 1508.9(a)). If, after conducting an EA, the agency determines that an EIS is not required under the applicable regulations, “it must issue a ‘finding of no significant impact' (FONSI), which briefly presents the reasons why the proposed agency action will not have a significant impact on the human environment.” Id. at 757-58 (citing 40 C.F.R. §§ 1501.4(e), 1508.13). During this process, the agency “must insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken.” 40 C.F.R. § 1500.1(b); see also Robertson, 490 U.S. at 349 (noting that this disclosure requirement “guarantees that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision”).

         All federal agencies are required to comply with the NEPA and the CEQ regulations, but the regulations “allow each agency flexibility in adapting its implementing procedures.” 40 C.F.R. § 1507.1; see also Id. § 1507.3(a) (requiring agencies to “adopt procedures to supplement these regulations”). At the time of the actions at issue in this lawsuit, the FSA had promulgated such regulations. See 7 C.F.R. §§ 1940.301-350 (2015).[3] Those FSA regulations require the preparation of an EA for “Class I” and “Class II” agency actions. Id. §§ 1940.311-312 (2015). “Class I” actions are “smaller scale approval actions, ” id. § 1940.311 (2015), including certain expansions of FHA housing projects, certain community and business grant programs, and certain farm programs, id. § 1940.311(a)-(c) (2015), and require a less rigorous EA, id. § 1940.311 (2015) (“The scope and level of detail of an assessment for a small-scale action, though, need only be sufficient to determine whether the potential impacts are substantial and further analysis is necessary.”). “Class II” actions, by contrast, “are basically those which exceed the thresholds established for Class I actions and, consequently, have the potential for resulting in more varied and substantial environmental impacts.” Id. § 1940.312 (2015). “A more detailed environmental assessment is, therefore, required for Class II actions in order to determine if the action requires an EIS.” Id.

         Class II actions include certain actions that “involve a livestock-holding facility or feedlot.” Id. § 1940.312(b)(1) (2015). As relevant to the instant lawsuit, such actions include “[f]inancial assistance, ” such as loan guarantees, for “a livestock-holding facility or feedlot located in a sparsely populated farming area having a capacity as large or larger than, ” inter alia, “100, 000 laying hens or broilers when [the] facility has unlimited continuous flow watering systems, ” id. § 1940.312(c)(9) (2015), as well as “[f]inancial assistance for a livestock-holding facility or feedlot which either could potentially violate a State water quality standard or is located near a town or collection of rural homes which could be impacted by the facility, ” id. § 1940.312(c)(10) (2015). If the EA for a loan guarantee includes environmental recommendations or mitigation measures to be taken in connection with the loan guarantee, such measures “must be documented in the assessment . . . and placed in the offer of financial assistance as special conditions.” Id. § 1940.318(g) (2015). In addition, the FSA is responsible for “post-approval inspection and monitoring of approved projects” to “ensure that those measures which were identified in the preapproval stage and required to be undertaken in order to reduce adverse environmental impacts are effectively implemented.” Id. § 1940.330(a) (2015).

         2. The FSA's Guaranteed Farm Loan Program

         The FSA, formerly known as the “Farmers Home Administration, ” oversees agricultural support programs including, as relevant here, the Guaranteed Farm Loan Program. See 7 C.F.R. § 762.101, et seq. Under this program, a borrower can apply to have the FSA guarantee a percentage of a loan made by a qualified agricultural lender for purposes including “[a]cquir[ing] or enlarg[ing] a farm”; “[m]ak[ing] capital improvements, ” such as “the construction, purchase, and improvement of a farm dwelling, service buildings and facilities that can be made fixtures to the real estate”; “[p]romot[ing] soil and water conservation and protection”; “[p]ay[ing] closing costs”; and “[r]efinancing indebtedness incurred for authorized [farm ownership loan] and [operating loan] purposes.” Id. § 762.121(b)(1)-(5). The FSA's guarantee “will not exceed 90 percent based on the credit risk to the lender and the Agency both before and after the transaction, ” id. § 762.129(a), but the precise percentage of the guarantee is left to the FSA, id. As part of their application for an FSA loan guarantee, borrowers must certify that they are “unable to obtain sufficient credit elsewhere without a guarantee to finance actual needs at reasonable rates and terms.” Id. § 762.120(h)(1).

         Once the FSA has guaranteed a loan, “[l]enders are responsible for servicing the entire loan in a reasonable and prudent manner, protecting and accounting for the collateral, and remaining the mortgagee or secured party of record.” Id. § 762.140(a)(1). Lenders must also “[e]nsur[e] the borrower is in compliance with all laws and regulations applicable to the loan, the collateral, and the operations of the farm.” Id. § 762.140(b)(3). The FSA stays involved, however, and is responsible for “post-approval inspection and monitoring of approved projects” to “ensure that those measures which were identified in the preapproval stage and required to be undertaken in order to reduce adverse environmental impacts are effectively implemented.” Id. § 1940.330(a) (2015).

         B. The FSA's Loan Guarantee for the One More Haul Farm Concentrated Animal Feeding Operation

         This lawsuit arose from nonparty One More Haul farm's (“OMH's”) application for an FSA-guaranteed loan “to construct and operate a poultry concentrated animal feeding operation, ” or “CAFO, ” in Caroline County, Maryland, on a 114.9-acre parcel of land. Compl. ¶¶ 1, 46. According to the Complaint, OMH applied for a loan guarantee through the Guaranteed Farm Loan Program in 2015 “in order to purchase land and construct and operate a poultry CAFO on it, consisting of four broiler chicken houses, a manure structure, and a mortality composting structure.” Id. ¶ 42. The OMH CAFO, which is now built and operating, “houses 192, 000 birds at one time, and will have an average of 5.6 flocks per year, producing more than 1, 000, 000 birds and their waste each year.” Id. ¶ 46. Accordingly, a federal loan guarantee for OMH's CAFO qualifies as a Class II action for which a complete EA is required. See 40 C.F.R. § 1940.312(c)(9)- (10) (2015); Defs.' Mem. Supp. Mot. J. Pleadings (“Defs.' Mem.”) at 2, ECF No. 17-1 (“FSA is required to complete an environmental review prior to making a commitment to issue a loan guarantee.”).

         As required by the NEPA and the corresponding regulations, the FSA completed a draft EA describing the environmental impacts of the proposed CAFO, which was made available for public comment on May 22, 2015. Id. ¶ 43. On July 20, 2015, the plaintiff and one of its members submitted comments on the draft EA. Id. Two days later, on July 22, 2015, the FSA finalized the EA “with no substantive changes, ” and the loan guarantee was signed and approved the next day. Id.; see also Defs.' Answer ¶ 43, ECF No. 12. The total loan amounted to approximately $1, 217, 000, of which the FSA guaranteed the maximum 90 percent, or approximately $1, 095, 300. Compl. ¶ 42; see also 7 C.F.R. § 762.129(a).[4]

         The plaintiff alleges that, during the EA process, “FSA initially failed to make many key documents available to Plaintiff and the public during the comment period” and that the plaintiff “was forced to file a Freedom of Information Act (FOIA) request to obtain them.” Compl. ¶ 44. In addition, the plaintiff argues that the EA prepared for the OMH CAFO was inadequate, given its failure to address several environmental impacts. Specifically, the plaintiff contends that the EA failed to consider “the potential water quality impacts on the Corsica River due to the land application of waste from OMH, ” id. ¶ 52; “the unusual density of chicken production at the site, and the fact that it dramatically exceeds the average density of the region's numerous other broiler chicken CAFOs, ” id. ¶ 54; “the effects of OMH's water withdrawals, ” id. ¶ 55; the effect on the “27 migratory birds of concern [that] might be affected by the proposed project” or the “potential effects on biological resources, ” id. ¶ 56; the “air impacts” of the CAFO, id. ¶ 57; or the “cumulative impacts of th[e] proliferation and concentration” of CAFOs in the surrounding area, id. ¶ 59. The plaintiff also contends that the defendants failed to analyze OMH's Nutrient Management Plan, Stormwater Management Plan, and Conservation Plan, under which the CAFO was to operate. Id. ¶ 53.

         C. Litigation History

         Plaintiff FWW, a District of Columbia “non-profit corporation that champions healthy food and clean water for all by standing up to corporations that put profits before people and advocating for a democracy that improves people's lives and protects the environment, ” id. ¶ 8, filed its complaint on August 23, 2017, alleging violations of the NEPA and the APA based on the defendants' failure to conduct an adequate EA and EIS for the OMH CAFO, id. ⁋⁋ 60-121. FWW “has thousands of members who reside in Maryland, including a member who resides next door to the OMH CAFO” and “lives in such close proximity to the CAFO that it is decreasing the enjoyment and privacy of her home and causing her concern over potential adverse health impacts.” Id. ¶ 8. This member “owns property and lives in the area that is directly impacted by the CAFO's dust, dander, noise, smell, ventilation fans, truck traffic, manure storage facilities, and mortality composting area, ” and this proximity to the CAFO has subjected her to “loud noises at all hours of the day, bright lights that remain on all night, foul odors, and large numbers of flies in and around her residence.” Id. In addition, she “is concerned that she and her visitors will experience adverse health effects from the CAFO's pollution, ” and she is “fearful to allow family members with asthma to visit because they may be more susceptible to air pollution.” Id. Another FWW member “regularly fishes for bass in Watts Creek-which is in the vicinity of the CAFO-and the downstream Choptank River”; “has invested significant time and resources into creek stocking and restoration projects”; and “is concerned about the CAFO's likely water pollution impacts and the general impacts of industrial development on the character and aesthetic beauty of the areas where he fishes.” Id.

         In accord with the Scheduling Order proposed by the parties and entered by the Court, see Minute Order (dated Nov. 13, 2017), on December 6, 2017, the defendants produced an Administrative Record and filed an index of the Administrative Record with the Court, see Notice of Lodging of AR Index (“AR Notice”) at 1, ECF No. 14. Shortly thereafter, however, the parties advised that “they ha[d] reached an impasse as to the documents that should be included in the Administrative Record.” Jt. Status Report (dated Feb. 16, 2018) at 2, ECF No. 16. The plaintiff contended that the Administrative Record was incomplete because it did not include “records related to the Farm Service Agency's federal loan guarantee, ” id. at 3, including “the loan guarantee application-which triggered FSA's NEPA analysis-and the loan guarantee itself, which is the federal action Plaintiff challenges, ” id. at 4. The defendants, in turn, argued that “the Complaint suffers from incurable jurisdictional defects” that “will obviate the need for further litigation.” Id. at 2. The Court accordingly set a briefing schedule for both the defendants' motion for judgment on the pleadings and the plaintiff's motion to supplement the Administrative Record, which motions are now ripe for review.

         II. ...

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