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CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Held: The Court of Appeals erred in concluding that,when the Department of Housing and Urban Development (HUD)considered alternative sites before redesignating a proposed sitefor middle-income housing as one for low-income housing it shouldhave given determinative weight to environmental factors such ascrowding low-income housing into a concentrated area and should nothave considered the delay that would occur in developing analternative site as an overriding factor. Once an agency has made adecision subject to the procedural requirements of the NationalEnvironmental Policy Act of 1969, the only role for a court is toinsure that the agency has considered the environmentalconsequences; it cannot interject itself within the area ofdiscretion of the executive as to the choice of the action to betaken. Here, there is no doubt that HUD considered theenvironmental consequences of its decision to redesignate theproposed site for low-income housing, and the Act requires nomore.

Certiorari granted; 590 F.2d 39, reversed.

PER CURIAM.

The protracted nature of this litigation is perhaps bestillustrated by the identity of the original federal defendant,\"George Romney, Secretary of the Department of Housing and UrbanDevelopment.\" At the center of this dispute is the site of aproposed low-income housing project to be constructed onManhattan's Upper West Side. In 1962, the New York City PlanningCommission (Commission), acting in conjunction with the UnitedStates Department of Housing and Urban Development (HUD), beganformulating a

Page 444 U. S. 224

plan for the renewal of 20 square blocks known as the \"West SideUrban Renewal Area\" (WSURA) through a joint effort on the part ofprivate parties and various government agencies. As originallywritten, the plan called for a mix of 70% middle-income housing and30% low-income housing and designated the site at issue here as thelocation of one of the middle-income projects. In 1969, aftersubstantial progress toward completion of the plan, local agenciesin New York determined that the number of low-income units proposedfor WSURA would be insufficient to satisfy an increased need forsuch units. In response to this shortage, the Commission amendedthe plan to designate the site as the future location of ahigh-rise building containing 160 units of low-income housing. HUDapproved this amendment in December, 1972.

Meanwhile, in October, 1971, the Trinity Episcopal School Corp.(Trinity), which had participated in the plan by building acombination school and middle-income housing development at anearby location, sued in the United States District Court for theSouthern District of New York to enjoin the Commission and HUD fromconstructing low-income housing on the site. The presentrespondents, Roland N. Karlen, Alvin C. Hudgins, and the Committeeof Neighbors To Insure a Normal Urban Environment (CONTINUE),intervened as plaintiffs, while petitioner Strycker's BayNeighborhood Council, Inc., intervened as a defendant.

The District Court entered judgment in favor ofpetitioners.  See Trinity Episcopal School Corp. v.Romney, 387 F.Supp. 1044 (1974). It concluded, interalia, that petitioners had not violated the NationalEnvironmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U.S.C. §4321 et seq.

On respondents' appeal, the Second Circuit affirmed all but theDistrict Court's treatment of the NEPA claim.  SeeTrinity Episcopal School Corp. v. Romney, 523 F.2d 88

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(1975). While the Court of Appeals agreed with the DistrictCourt that HUD was not required to prepare a full-scaleenvironmental impact statement under § 102(2)(C) of NEPA, 42 U.S.C.§ 4332(2)(C), it held hat HUD had not complied with § 102(2)(E),[Footnote 1] which requires an agency to

\"study, develop, and describe appropriate alternatives torecommended courses of action in any proposal which involvesunresolved conflicts concerning alternative uses of availableresources.\"

42 U.S.C. § 4332(2)(E).  See 523 F.2d at 995.According to the Court of Appeals, any consideration by HUD ofalternatives to placing low-income housing on the site \"was eitherhighly limited or nonexistent.\"  Id. at 94.Citing the \"background of urban environmental factors\" behind HUD'sdecision, the Court of Appeals remanded the case, requiring HUD toprepare a \"statement of possible alternatives, the consequencesthereof and the facts and reasons for and against. . ..\"  Ibid. The statement was not to reflect\"HUD's concept or the Housing Authority's views as to how theseagencies would choose to resolve the city's low income grouphousing situation,\" but rather was to explain

\"how, within the framework of the Plan, its objective ofeconomic integration can best be achieved with a minimum of adverseenvironmental impact.\"

Ibid. The Court of Appeals believed that, given such anassessment of alternatives, \"the agencies with the cooperation ofthe interested parties should be able to arrive at an equitablesolution.\"  Id. at 95.

On remand, HUD prepared a lengthy report entitled SpecialEnvironmental Clearance (1977). After marshaling the data, thereport asserted that,

\"while the choice of Site 30 for development as a 100 percentlow-income project has raised

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valid questions about the potential social environmental impactsinvolved, the problems associated with the impact on social fabricand community structures are not considered so serious as torequire that this component be rated as unacceptable.\"

Special Environmental Clearance Report 42. The last portion ofthe report incorporated a study wherein the Commission evaluatednine alternative locations for the project, and found none of themacceptable. While HUD's report conceded that this study may nothave considered all possible alternatives, it credited theCommission's conclusion that any relocation of the units wouldentail an unacceptable delay of two years or more. According toHUD,

\"[m]easured against the environmental costs associated with theminimum two-year delay, the benefits seem insufficient to justify amandated substitution of sites.\"

Id. at 54.

After soliciting the parties' comments on HUD's report, theDistrict Court again entered judgment in favor ofpetitioners.  See Trinity Episcopal School Corp. v.Harris, 445 F.Supp. 204 (1978). The court was \"impressed withHUD's analysis as being thorough and exhaustive,\" id. at209-210, and found that \"HUD's consideration of the alternativeswas neither arbitrary nor capricious\"; on the contrary, \"[i]t wasdone in good faith and in full accordance with thelaw.\"  Id. at 220.

On appal, the Second Circuit vacated and remandedagain.  Karlen v. Harris, 590 F.2d 39 (1978).The appellate court focused upon that part of HUD's report wherethe agency considered and rejected alternative sites, and inparticular upon HUD's reliance on the delay such a relocation wouldentail. The Court of Appeals purported to recognize that its rolein reviewing HUD's decision was defined by the AdministrativeProcedure Act (APA), 5 U.S.C. § 706(2)(A), which provides thatagency actions should be set aside if found to be \"arbitrary,capricious, an abuse of discretion, or otherwise not in accordancewith law. . . .\" Additionally,

Page 444 U. S. 227

however, the Court of Appeals looked to \"[t]he provisions ofNEPA\" for \"the substantive standards necessary to review the meritsof agency decisions. . . .\" 590 F.2d at 43. The Court of Appealsconceded that HUD had \"given consideration' to alternatives\" toredesignating the site.  Id. at 44. Nevertheless,the court believed that \"`consideration' is not an end initself.\"  Ibid. Concentrating on HUD's findingthat development of an alternative location would entail anunacceptable delay, the appellate court held that such delay couldnot be \"an overriding factor\" in HUD's decision to proceed with thedevelopment.  Ibid. According to the court, whenHUD considers such projects, \"environmental factors, such ascrowding low-income housing into a concentrated area, should begiven determinative weight.\"  Ibid. The Court ofAppeals therefore remanded the case to the District Court,instructing HUD to attack the shortage of low-income housing in amanner that would avoid the \"concentration\" of such housing on Site30.  Id. at 45. In Vermont Yankee NuclearPower Corp. v. NRDC, 435 U. S. 519,  435 U. S. 558(1978), we stated that NEPA, while establishing \"significantsubstantive goals for the Nation,\" imposes upon agencies dutiesthat are \"essentially procedural.\" As we stressed in that case,NEPA was designed \"to insure a fully informed and well considereddecision,\" but not necessarily \"a decision the judges of the Courtof Appeals or of this Court would have reached had they beenmembers of the decisionmaking unit of the agency.\"Ibid.  Vermont Yankee cuts sharplyagainst the Court of Appeals' conclusion that an agency, inselecting a course of action, must elevate environmental concernsover other appropriate considerations. On the contrary, once anagency has made a decision subject to NEPA's proceduralrequirements, the only role for a court is to insure that theagency has considered the environmental consequences; it cannot \"'interject itself within the area of discretion of the executive asto the choice of the action to

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be taken.'\"  Kleppe v. Sierra Club, 427 U. S.390,  427 U. S. 410, n. 21 (1976).  Seealso FPC v. Transcontinental Gas Pipe Line Corp., 423 U. S.326 (1976). [Footnote 2]

In the present litigation, there is no doubt that HUD consideredthe environmental consequences of its decision to redesignate theproposed site for low-income housing. NEPA requires no more. Thepetitions for certiorari are granted, and the judgment of the Courtof Appeals is therefore

Reversed.

* Together with No. 79-181, City of New York v. Karlen etal.; and No. 79-184, Secretary of Housing and UrbanDevelopment v. Karlen et al., also on petitions for certiorarito the same court.

[Footnote 1]

At the time of the Court of Appeals' decision, this section wasnumbered 102(2)(D) and was codified at 42 U.S.C. § 4332(2)(D) (1970ed.). Congress redesignated it two weekslater.  See Act of Aug. 9, 1975, Pub.L. 94-83,89 Stat. 424.

[Footnote 2]

If we could agree with the dissent that the Court of Appealsheld that HUD had acted \"arbitrarily\" in redesignating the site forlow-income housing, we might also agree that plenary review iswarranted. But the District Court expressly concluded that HUD hadnot acted arbitrarily or capriciously, and our reading of theopinion of the Court of Appeals satisfies us that it did notoverturn that finding. Instead, the appellate court required HUD toelevate environmental concerns over other, admittedly legitimate,considerations. Neither NEPA nor the APA provides any support forsuch a reordering of priorities by a reviewing court.

MR. JUSTICE MARSHALL, dissenting.

The issue raised by these cases is far more difficult than theper curiam opinion suggests. The Court of Appeals held that theSecretary of Housing and Urban Development (HUD) had actedarbitrarily in concluding that prevention of a delay in theconstruction process justified the selection of a housing sitewhich could produce adverse social environmental effects, includingracial and economic concentration. Today the majority respondsthat,

\"once an agency has made a decision subject to NEPA's proceduralrequirements, the only role for a court is to insure that theagency has considered the environmental consequences,\"

and that, in this litigation,

\"there is no doubt that HUD considered the environmentalconsequences of its decision to redesignate the proposed site forlow-income housing. NEPA requires no more.\"

The majority finds support for this conclusion in the closingparagraph

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of our decision in Vermont Yankee Nuclear Power Corp. v.NRDC, 435 U. S. 519,  435 U. S. 558 (1978).

Vermont Yankee does not stand for the broad propositionthat the majority advances today. The relevant passage in thatopinion was meant to be only a \"further observation of somerelevance to this case,\" id. at  435 U. S. 557.That \"observation\" was a response to this Court's perception thatthe Court of Appeals in that case was attempting, \"under the guiseof judicial review of agency action,\" to assert its own policyjudgment as to the desirability of developing nuclear energy as anenergy source for this Nation, a judgment which is properly left toCongress.  Id. at  435 U. S. 558. TheCourt of Appeals had remanded the case to the agency because of \"asingle alleged oversight on a peripheral issue, urged by partieswho never fully cooperated or indeed raised the issue below,\"ibid. It was in this context that the Court remarked that\"NEPA does set forth significant substantive goals for the Nation,but its mandate to the agencies is essentiallyprocedural.\"  Ibid. (emphasis supplied).Accordingly,

\"[a]dministrative decisions should be set aside in this context,as in every other, only for substantial procedural orsubstantive reasons as mandated by statute,\"

ibid. (emphasis supplied). Thus, VermontYankee does not stand for the proposition that a courtreviewing agency action under NEPA is limited solely to the factualissue of whether the agency \"considered\" environmentalconsequences. The agency's decision must still be set aside if itis \"arbitrary, capricious, an abuse of discretion, or otherwise notin accordance with law,\" 5 U.S.C. § 706(2)(A), and the reviewingcourt must still insure that the agency \"has taken a hard look'at environmental consequences,\" Kleppe v. Sierra Club, 427 U.S. 390,  427 U. S. 410, n. 21 (1976).

In the present case, the Court of Appeals did not \"substituteits judgment for that of the agency as to the environmentalconsequences of its actions,\" ibid., for HUD, in its

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Special Environmental Clearance Report, acknowledged the adverseenvironmental consequences of its proposed action:

\"the choice of Site 30 for development as a 100 percentlow-income project has raised valid questions about the potentialsocial environmental impacts involved.\"

These valid questions arise from the fact that 68% of all publichousing units would be sited on only one cross-town axis in thisarea of New York City. As the Court of Appeals observed, theresulting high concentration of low-income housing would hardlyfurther racial and economic integration. The environmental \"impact. . . on social fabric and community structures\" was given a Brating in the report, indicating that, from this perspective, theproject is \"questionable\" and ameliorative measures are \"mandated.\"The report lists 10 ameliorative measures necessary to make theproject acceptable. The report also discusses two alternatives,Sites 9 and 41, both of which are the appropriate size for theproject and require \"only minimal\" amounts of relocation andclearance. Concerning Site 9, the report explicitly concludes that\"[f]rom the standpoint of social environmental impact, thislocation would be superior to Site 30 for the development oflow-rent public housing.\" The sole reason for rejecting theenvironmentally superior site was the fact that, if the locationwere shifted to Site 9, there would be a projected delay of twoyears in the construction of the housing.

The issue before the Court of Appeals, therefore, was whetherHUD was free under NEPA to reject an alternative acknowledged to beenvironmentally preferable solely on the ground that any change insites would cause delay. This was hardly a \"peripheral issue\" inthe case. Whether NEPA, which sets forth \"significant substantivegoals,\" Vermont Yankee Nuclear Power Corp. v. NRDC, supraat  435 U. S. 558, permits a projected 2-year timedifference to be controlling over environmental superiority is byno means clear. Resolution of the issue, however, is certainlywithin the normal scope of review of agency action to determine ifit is arbitrary,

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capricious, or an abuse of discretion.* The question whether HUDcan make delay the paramount concern over environmental superiorityis essentially a restatement of the question whether HUD inconsidering the environmental consequences of its proposed actiongave those consequences a \"hard look,\" which is exactly the properquestion for the reviewing court to ask.  Kleppe v.Sierra Club, supra at  427 U. S. 410, n. 21.

The issue of whether the Secretary's decision was arbitrary orcapricious is sufficiently difficult and important to merit plenaryconsideration in this Court. Further, I do not subscribe to theCourt's apparent suggestion that Vermont Yankee limits thereviewing court to the essentially mindless task of determiningwhether an agency \"considered\" environmental factors even if thatagency may have effectively decided to ignore those factors inreaching its conclusion. Indeed, I cannot believe that the Courtwould adhere to that position in a different factual setting. Ourcases establish that the \"arbitrary or capricious\" standardprescribes a \"searching and careful\" judicial inquiry designed toensure that the agency has not exercised its discretion in anunreasonable manner.  Citizens To Preserve OvertonPark, Inc. v. Volpe, 401 U. S. 402,  401 U. S. 416(1971). Believing that today's summary reversal represents adeparture from that principle, I respectfully dissent.

It is apparent to me that this is not the type of case for asummary disposition. We should at least have a plenary hearing.

* The Secretary concedes that, if an agency gave little or noweight to environmental values, its decision might be arbitrary orcapricious. Pet. for Cert. in No. 7184, p. 15, n. 16.

1) Under NEPA, do you believe that the court was right in itsdecision in the above case?

2) Do you see any possible relationship this case presents withLULUs?)