would actions of DRBC appear to be "Federal." Arguably, to the extent that the United States' member of the Commission votes in favor of an application or otherwise acquiesces in accordance with the Compact, such approval might be deemed "Federal action" which, if of sufficient importance, could constitute "major Federal action."
In Borough of Morrisville v. Delaware River Basin Commission, 399 F. Supp. 469 (E.D. Pa. 1975), aff'd, 532 F.2d 745 (3d Cir. 1976), Judge Newcomer of this Court, without expressly ruling on the applicability of NEPA, determined that DRBC's resolution imposing a charge for use of surface water was adopted after full compliance with NEPA. Judge Newcomer thereby suggested, at least, that DRBC is subject to the provisions of NEPA.
Because DRBC regulations in substance adopt all NEPA requirements, and possibly some additional procedural steps, the issue as to whether NEPA is applicable to DRBC need not be presently decided. In addition, defendants apparently concede that if the "negative declaration" is invalid, a full FEIS would be required.
Scope of Review
The compact provides that any determination made by the Commission in reference to a § 3.8 application "shall be subject to judicial review in any court of competent jurisdiction." Section 15.1 of the Compact contains the express reservations under which the United States by Act of Congress, Pub. L. 87-328, 75 Stat. 688, became a signatory. Reservation(p) of § 15.1 provides that "the United States district courts shall have original jurisdiction of all cases or controversies arising under the Compact, and this Act . . . ." This controversy arises under the Compact, and under the laws of the United States--thus, there is jurisdiction under 28 U.S.C. § 1331. The § 3.8 projects approved by the Commission all involve construction to be performed wholly within this federal judicial district--making venue proper in this district. 28 U.S.C. § 1391.
Far less certain are the procedures and standards by which the substantive issues of this case are to be determined--an issue referred to by counsel as the "scope of review." Scope of review has at least two distinct aspects: (1) the legal standards by which the DRBC action is to be judged, and (2) the record and procedure by which the DRBC action is to be judged.
All defendants contend that this court may review only the Commission's record as it presently exists to determine if the contested action by DRBC is valid. Although plaintiffs concede that a "de novo" hearing to determine if correct decisions were made by DRBC would not be required or proper, they assert that they have the right to present evidence as to certain facts which they contend are material and in dispute.
Several tests have been suggested as to the standard of review. All parties seem to agree that if the action was arbitrary and capricious or otherwise not in accordance with law, such action would be invalid. Defendants primarily contend that the "arbitrary and capricious" standard is the proper standard of review. There is however, authority in case law suggesting that the reviewing court should in addition, determine if there was "substantial evidence" to support the action, and/or whether the action had a "reasonable basis" in fact and in law.
The Administrative Procedure Act (APA), 5 U.S.C. § 551-559, does not apply. Among the express reservations of the United States, § 15.1(m) of the Compact, is a provision that DRBC "shall not be considered a Federal agency" for purposes of certain statutes, among which is the Act of June 11, 1946, Pub. L. No. 404, 60 Stat. 237, as amended, which statute was the predecessor to the APA. Analysis of cases decided under provisions of the APA may, nevertheless, be helpful, but not necessarily controlling as to the scope of judicial review by this Court.
In one of the few decided cases reviewing action of DRBC, Judge Fullam addressed the issue, but ruled only that a de novo review would not be appropriate. Dublin Water Co. v. Delaware River Basin Commission, Civil Action 78-3665 (E.D. Pa. March 5, 1980) (unreported). He stated in rendering the opinion:
Although the Commission's orders are specifically made reviewable by "any court of competent jurisdiction," the standard of review is not specified. Counsel for both sides have expressed uncertainty concerning the correct standard of review. The Administrative Procedure Act probably does not apply, except perhaps by analogy. It seems reasonably clear, however, that de novo review of the administrative findings would not be appropriate. And I am satisfied that, under any other standard of review applicable to administrative determinations, the Commission's orders must be sustained. That is, whether the test is substantial evidentiary support, abuse of discretion, or a determination as to arbitrariness and capriciousness, the findings and decision of the Commission cannot be disturbed.
Judge Fullam's decision was affirmed by a judgment order of the Court of Appeals for the Third Circuit on March 18, 1981.
In Borough of Morrisville v. Delaware River Basin Commission, 399 F. Supp. 469, 478 (E.D. Pa. 1975), aff'd, 532 F.2d 745 (3d Cir. 1976) Judge Newcomer, assuming that NEPA, as well as the Commission's own regulations, applied as to whether an environmental impact statement was required, in determining the validity of a "negative declaration" by the Commission, stated as follows:
Neither the Supreme Court nor this Circuit has passed upon the standard that a District Court should apply in reviewing an agency's decision that no environmental impact statement is required, and those Circuits which have ruled on the matter have split along three lines. Some Circuits have stated that the agency's negative determination would be upheld if it was not "arbitrary or capricious." First National Bank of Chicago v. Richardson, 484 F.2d 1369 (7th Cir. 1973); Rucker v. Willis, 484 F.2d 158 (4th Cir. 1973); Hanly v. Kleindienst, 471 F.2d 823, (2nd Cir. 1972). Other Circuits have adopted a more stringent "reasonableness" test under which an agency's negative determination will be sustained where there is supporting evidence in the record and a reasonable basis in law, Minnesota Public Interest Research Group v. Butz, 498 F.2d 1314 (8th Cir. 1974); Wyoming Outdoor Coordinating Council v. Butz, 484 F.2d 1244 (10th Cir. 1973); Save Our Ten Acres v. Kreger, 472 F.2d 463 (5th Cir. 1973). The District of Columbia Circuit has endorsed neither the "reasonableness" test nor the "arbitrary and capricious" test. Instead it has adopted a test suggested by Judge Friendly in his dissenting opinion, in Hanly, cited supra. Under this test, an agency's assessment must provide convincing reasons that "arguably" potentially significant impacts do not require a detailed environmental impact statement. Maryland-National Capital Park and Planning Commission v. Postal Service, 159 U.S.App.D.C. 158, 487 F.2d 1029 (1973).