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Food & Water Watch v. United States Department of Agriculture

United States District Court, District of Columbia

June 10, 2019

FOOD & WATER WATCH, Plaintiff,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants.

          MEMORANDUM OPINION

          BERYL A. HOWELL CHIEF JUDGE

         Since this case began in August 2017, the plaintiff Food & Water Watch has been prodding the defendants-the U.S. Department of Agriculture, the Farm Service Agency (“FSA”), and Deanna Dunning, an FSA Farm Loan Officer-to provide a complete administrative record (“AR”). Finally, in December 2018, that happened. The completed AR included a version of the final environmental assessment (“EA”) that the FSA completed in July 2015 in connection with the agency's guarantee of a loan to One More Haul Farm for the construction and operation of a concentrated animal feeding operation (“CAFO”). With that addition to the AR, the plaintiff now seeks leave to amend its complaint to add two new claims and modify a third. For the reasons discussed below, the plaintiff's motion is granted.

         I. BACKGROUND

         This case relates to the FSA's 2015 guarantee of a loan to One More Haul Farm. The underlying allegations, as well as the relevant statutory and administrative framework, were detailed in the Court's prior opinion denying the defendants' motion to dismiss the complaint and granting the plaintiff's motion to compel the complete AR. See Food & Water Watch v. U.S. Dep't of Agric., 325 F.Supp.3d 39, 42-47 (D.D.C. 2018). Only the background relevant to the pending motion is described here.

         The FSA is a component of the Department of Agriculture responsible for overseeing 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 for the FSA to guarantee a percentage of a loan made by a qualified agricultural lender if the loan is for certain purposes. Id. § 762.121(b)(1)-(5). One More Haul Farm sought such a loan guarantee from the FSA in early 2015 to “purchase land and construct and operate a poultry CAFO.” Proposed 1st Am. Compl. (“Am. Compl.”) ¶ 54, ECF No. 42-1.

         Under the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4321, et seq., the FSA, as any federal agency, is required “to the fullest extent possible, ” to prepare an Environmental Impact Statement (“EIS”) before taking any “actions significantly affecting the quality of the human environment, ” id. § 4332(2)(C). An EIS accounts for various 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, ” id. § 4332(2)(C)(i)-(iii). “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). These regulations permit an agency to 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. (quoting 40 C.F.R. § 1508.9(a)). If, after conducting an EA, the “agency determines that an EIS is not required under applicable CEQ 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 v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989) (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”).

         A federal loan guarantee for One More Haul Farm's CAFO qualified as an action for which an EA was required. See 40 C.F.R. § 1940.312(c)(9)-(10) (2015); Defs.' Mem. Supp. Mot. J. Pleadings at 2, ECF No. 17-1 (“FSA is required to complete an environmental review prior to making a commitment to issue a loan guarantee.”).[1] Accordingly, as the proposed complaint alleges, in April 2015, the FSA published for notice and comment a draft EA for One More Haul Farm's application. Am. Compl. ¶ 55. After receiving several comments on the initial draft, the FSA, in May 2015, published a second document, “labeled as an ‘EA/FONSI.'” Id. ¶ 56. That version also received comments, including one the plaintiff submitted on July 20, 2015. Id. Sometime after the FSA published the May 2015 EA for comment, the agency “contracted with an environmental consulting firm to review the comments and the Agency's analysis.” Defs.' Opp'n Pl.'s Mot. Amend (“Defs.' Opp'n”) at 4, ECF No. 46. On July 22, 2015, two days after the plaintiff submitted its comment, the FSA issued a third version of the EA. Am. Compl. ¶ 58. The July 2015 EA was “significantly different than the May EA/FONSI” and did not include a FONSI. Id. ¶ 59. The FSA then informed the lender that the loan to One More Haul Farm would be guaranteed. Id. ¶ 60. The loan guarantee was executed on August 3, 2015. Id. ¶ 61.

         In August 2017, the plaintiff instituted this action. See Compl., ECF No. 1. Generally, the plaintiff's complaint alleged that the FSA's guarantee of One More Haul Farm's loan violated procedural and substantive requirements of the APA, NEPA, and NEPA's implementing regulations. Id. ¶¶ 3, 60-121. The initial complaint contained nine claims. Id. ¶¶ 60-121.

         The defendants subsequently provided the AR to the plaintiff in December 2017. See Notice of Lodging of AR Index (Dec. 6, 2017), ECF No. 14. A version of the July 2015 EA, which the FSA described as the “Final Environmental Assessment package” was included. AR Index at 4 (Dec. 6, 2017), ECF No. 14-2. Shortly after, the plaintiff wrote the defendants with concerns about whether the AR was complete, Defs.' Opp'n, Ex. 3, Pl.'s Dec. 22, 2017 Ltr., ECF No. 46-3, and then sent a follow-up letter the next month, Defs.' Opp'n, Ex. 3, Pl.'s Jan. 24, 2018 Ltr., ECF No. 46-3. Neither letter expressed any concern about the July 2015 EA included in the AR, but the plaintiff's letters were explicit that the “Plaintiff's review of the AR continues and additional issues may arise.” Pl.'s Dec. 22, 2017 Ltr. at 1; accord Pl.'s Jan. 24, 2018 Ltr. at 1.

         Next, in March 2018, the defendants moved, under Federal Rule of Civil Procedure 12(c), for judgment on the pleadings as to each claim, arguing that the plaintiff's claims were moot and that the plaintiff lacked standing. See generally Defs.' Mot. J. Pleadings, ECF No. 17. Two weeks later, the plaintiff moved to compel the complete AR. See generally Pl.'s Mot. Compel AR, ECF No. 18.

         Briefing on the two motions followed, and then, in May 2018, the defendants supplemented the AR. Notice of Lodging of AR Index (May 22, 2018), ECF No. 25. Additionally, the defendants agreed to “create a separate volume of documents for the [AR] for the financial documents related to the lending decision.” Id. at 1.

         In September 2018, the defendants' motion for judgment on the pleadings was denied, and the plaintiff's motion to compel the complete AR was granted. Food & Water Watch, 325 F.Supp.3d at 59. As to the AR, the defendants were ordered to “supplement the [AR] with the final loan guarantee and any other loan and loan-guarantee-related documents” and to “produce a privilege log identifying and justifying any claims of privilege for materials that continue to be withheld and for any redactions to materials that are included in the [AR].” Order (Sept. 7, 2018) at 1-2, ECF No. 26.

         The plaintiff received Volume II of the AR-the financial documents-in October 2018, see Joint Status Report (Oct. 31, 2018) at 2, ECF No. 32, but flagged concerns with its adequacy almost immediately, see Defs.' Opp'n, Ex. 3, Pl.'s Nov. 2, 2018 Ltr., ECF No. 46-3; Defs.' Opp'n, Ex. 3, Pl.'s Nov. 5, 2018 Ltr., ECF No. 46-3. The defendants produced an updated Volume I-the EA documents-at the beginning of November 2018. See Joint Status Report (Nov. 7, 2018) at 2, ECF No. 33.

         Disagreements about the AR persisted. On November 14, 2018, the plaintiff wrote the defendants with lingering concerns about the completeness of the AR. Defs.' Opp'n, Ex. 3, Pl.'s Nov. 14, 2018 Ltr., ECF No. 46-3. That letter, which asserted that the “Plaintiff's review of the AR continues and additional issues may arise, ” did not, however, express concern about the July 2015 EA. Id. Independent of the November 14, 2018 letter, the defendants updated the AR once more on November 16, 2018. Joint Status Report (Dec. 3, 2018) at 1, ECF No. 36. In response to the newest modification to the AR, the plaintiff, on November 27, 2018, sent the defendants a letter articulating additional concerns. Defs.' Opp'n, Ex. 3, Pl.'s Nov. 27, 2018 Ltr., ECF No. 46-3. In that letter, the plaintiff raised for the first time that “Plaintiff has now seen two different versions of the July 22, 2015 EA-one was produced through FOIA in September 2016 . . . and the other was produced in the AR.” Id. at 5. The FOIA version, unlike the AR version, “contained checkmarks at the end of the EA indicating environmental determinations Defendants had made, ” Pl.'s Mot. Amend at 1-2, although “the box indicating whether agency personnel made a FONSI recommendation based on the July EA remained unchecked, ” id. at 4.

         The defendants committed to considering the plaintiff's concerns and making any further update to the AR by December 21, 2018. Joint Status Report (Dec. 3, 2019) at 2. A month after receiving the plaintiff's letter, the defendants responded that the FOIA version of the July 2015 EA was in fact the FSA's final EA and should have been included in the AR and that the version included in the AR did not display the checkmarks due to a scanning error. Pl.'s Mot. Amend, Ex. 3, Decl. of Tarah Heinzen, Ex. A., ...


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