APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA (D.C. Civil No. 74-1164).
Van Dusen, Adams and Weis, Circuit Judges.
VAN DUSEN, Circuit Judge.
This appeal challenges a December 31, 1974, order vacating approvals previously given for a project for the construction of a flood control dam (Pa-466), since the project violates the National Environmental Policy Act of 1969, 42 U.S.C. § 4321ff., and permanently enjoining defendants from taking any further action with respect to such construction until final approval by the appropriate Government officials after the filing and consideration of an environmental impact statement. As explained more fully below, an opinion filed on January 24, 1975, makes clear that the court concluded that there had been a substantive violation of § 5 of the Watershed Protection and Flood Prevention Act, 16 U.S.C. § 1005. The defendants appeal only from this conclusion that there has been a violation of 16 U.S.C. § 1005. We vacate the December 31, 1974, order only to the extent that it holds there has been a violation in the failure to apply to Dam Pa-466 only the benefits-costs determination required by 16 U.S.C. § 1005 and remand for further proceedings consistent with this opinion, including the filing and consideration of an environmental impact statement.
The area near Canadensis, Pa., is located at the confluence of several of the rivers and creeks that wind through the Pocono Mountain region of northeastern Pennsylvania, and, during recent decades, has been the scene of recurrent floods that have exacted a heavy toll in both human life and property. To mitigate the threat posed by the flooding, local governmental authorities and the Soil Conservation Service (SCS) of the Department of Agriculture (USDA), acting under authority of the Watershed Protection and Flood Prevention Act of 1954, 16 U.S.C. § 1001 et seq. (P.L. 566), developed a Work Plan for the construction of four floodwater detention dams north and west of Canadensis.*fn1 This appeal from a final injunction restraining responsible SCS and USDA officials from awarding a contract for the construction of one of those dams (Dam Pa-466), presents as the principal issue whether § 5 of P.L. 566, 16 U.S.C. § 1001 et seq., as interpreted and applied, requires as a prerequisite to federal assistance that the benefits of Dam Pa-466 exceed its costs.
The floodwater detention dam at issue is a $2 million, 90-foot high, earthen structure proposed for construction along the Buck Hill Creek, a tributary of the Brodhead Creek. It is part of the four dam project originally envisioned for the Brodhead Creek area above Canadensis. A Work Plan prepared in March of 1961 described the project and provided, inter alia, that SCS would pay for the major portion of construction costs while the Monroe County Commissioners would acquire all necessary easements and rights of way (474a). The Work Plan also contained a cost/benefit analysis which ascribed to the project, evaluated as a whole, a benefit to cost ratio of 1.2 to 1. Pursuant to the Act, the 1961 Work Plan was transmitted to Congress where it was approved by resolutions of the Agriculture Committees of both Houses of Congress. See 16 U.S.C. §§ 1002, 1005(3).
Due primarily to Monroe County's failure to acquire certain rights of way from the Buck Hill Falls Co., little progress towards actual construction of the project was made during the years subsequent to 1961. In February of 1970, however, Buck Hill Falls Co. conveyed the necessary rights of way for a nominal consideration, subject to the condition that one of the four dams be deleted and Dam Pa-463 be modified as it was described in the 1961 Work Plan. These changes were incorporated into a Supplemental Watershed Work Plan issued in October of 1971. The Supplemental Work Plan contained an updated average annual cost/benefit analysis which fixed the benefit to cost ratio at 1.8 to 1. The project was again evaluated as a whole. SCS computed average annual cost by using a 3.25% discount rate.
All but one of the dams now remaining in the Brodhead Creek Watershed Project have either been completed or are now under construction. The third dam, however, Pa-466, has drawn the opposition of plaintiffs, who commenced this class action*fn2 on December 10, 1974, seeking an injunction against the awarding of a contract for the construction of the dam. In addition to asserting a claim under the National Environmental Policy Act of 1969, 42 U.S.C. § 4231 et seq., plaintiffs alleged that SCS's decision to award the contract violated § 5 of P.L. 566, 16 U.S.C. § 1005(1), which authorizes federal participation in the construction of "works of improvement" only
"at such time as the Secretary [of Agriculture] and the interested local organizations have agreed on a plan for works of improvement and the Secretary has determined that the benefits exceed the costs."
In support of their claim, plaintiffs contended that under § 5, as interpreted and applied by SCS, Dam Pa-466, viewed in isolation, must exhibit benefits exceeding its costs, regardless of the cost/benefit ratio of the Watershed Project evaluated as a whole. Plaintiffs contended that separately evaluated, the costs of Dam Pa-466 exceeded its benefits.
After conducting a five-day trial on the consolidated motions for preliminary and final injunctive relief, the district court, on December 31, 1974, entered an injunction carrying out its conclusions that filing of an environmental impact statement (EIS) was required and that the decision to construct Dam Pa-466 violated § 5 of P.L. 566.*fn3 The district court expressly agreed with plaintiffs' contention that separate cost justification is required for each dam in a multi-dam project. The court also concluded, inter alia,*fn4 that SCS had utilized an improperly low discount rate (3.25%) in violation of § 80 of the Water Resources Development Act, 42 U.S.C. § 1962d-17.*fn5 This timely appeal followed.*fn6
SCS does not challenge the district court's determination that an EIS is required under the circumstances of this case. With respect to P.L. 566, however, SCS contends that neither its cost/benefit determinations nor its decision to use a 3.25% discount is subject to judicial review. On the merits, SCS argues that neither § 5 of P.L. 566 nor its own project evaluation procedures require separate cost/benefit justifications for individual structures in a multi-dam watershed project. In SCS's view, all that was required under the circumstances of this case was that the benefits of the project, evaluated as a whole, exceed its costs.
I. THE AVAILABILITY OF JUDICIAL REVIEW
Our analysis of the availability of judicial review begins with the question of whether plaintiffs have standing to sue and with § 10 of the Administrative Procedure Act (APA), 5 U.S.C. § 702.*fn7 As interpreted by the Supreme Court, a person is "adversely affected or aggrieved within the meaning of a relevant statute" and hence has standing to sue under § 10 if he alleges (1) that he has or will sustain some actual or threatened injury in fact resulting from the challenged agency action, and (2) that the alleged injury is to an interest "arguably within the zone of interests to be protected or regulated by the statute in question." Data Processing Service ...