Fed. District Court Dismisses Claims That USDA Violated Law in Granting Loan Guarantee to MD Poultry
Updated: Apr 3, 2021
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In 2017, Food and Water Watch (FWW) challenged the approval of a loan guarantee by USDA’s Farm Service Agency (FSA). FWW argued that FSA had violated the National Environmental Policy Act (NEPA) in reviewing the environmental impacts of a proposed poultry farm seeking USDA loan guarantees. Recently, the Federal District Court for the District of Columbia dismissed all the NEPA claims brought by FWW. This decision could effectively end FWW’s NEPA claims against FSA in this case, though FWW may still appeal.
I previously wrote about the initial claims FWW made here and about the court finding FWW had standing here. NEPA requires federal agencies to assess the environmental impacts of proposed actions that fall under NEPA. Agencies must prepare a detailed Environmental Impact Statement (EIS) when the effects would have a potential impact on the environment. An agency completes an environmental assessment (EA) to determine if the project requires an EIS. If an agency determines an EIS is not needed, the agency issues a Finding of No Significant Impact (FONSI).
Federal regulations, in this case, required FSA to complete an EA on loan guarantees. An EA must show the need for the proposed action (in this case, guaranteeing the building of a poultry farm), alternatives to the project, environmental impacts of the proposed action and the other options, and a list of all agencies and persons consulted. In this case, FWW is arguing the EA is incomplete for not taking into account how the poultry house will impact its neighbors’ quality of life or the additional water problems caused. FWW is also arguing that FSA failed to list an adequate range of alternatives.
Overview of Court’s Decision
FWW made five arguments around FSA’s final EA and FONSI being deficient, saying FSA:
Failed to take a hard look at the environmental impacts of the proposed concentrated animal feeding operation (CAFO);
Did not make a convincing case for the finding of no significant impact;
Relied on inadequate mitigation measures;
Did not consider an adequate range of alternatives; and
Failed to comply with relevant NEPA procedures.
The court disagreed with FWW on each of these arguments and dismissed the NEPA claims. The court found that FSA properly relied on mitigation measures even if the plans, such as the Stormwater Management Plan, Nutrient Management Plan, and Conservation Plan, were in draft form at the time. Past court decisions had found that NEPA did not require an agency to rely on final plans. Draft plans were necessary to comply with state regulatory requirements. The court found that here, it was reasonable to rely on draft plans for the state permits since Maryland Departments of Agriculture and the Environment could not issue final plans until after completing both the loan guarantee and sale of the land to the farm to develop the CAFO.
FSA also discussed the mitigation measures in sufficient detail to ensure adequate evaluation of environmental consequences. Although the state regulatory plans were not yet final when the final EA was issued, there was substantial enough progress that FSA could address environmental impacts and how the features of the plans would address those impacts. Previous court decisions allowed for this. FSA could also rely on the state regulatory scheme for CAFOs in Maryland which would require mitigation measures to be implemented as a part of the permitting process.
The court also disagreed that FSA failed to take a hard look at the possible environmental impacts of the proposed poultry farm; FSA properly relied on federal and state standards to determine the effect of the proposed farm on surface waters and groundwaters. The proposed farm is designed to prevent discharges and FSA did not violate NEPA by declining to evaluate the environmental impacts. The court also found FSA also did not violate NEPA by not considering the impacts of off-site manure disposal because buyers of the poultry manure were unknown at the time of the loan guarantee application.
At the same time, FSA did address the air quality issues raised by FWW. FSA took into account the air emissions from poultry litter and mortality management with odor and dust control practices developed in the nutrient management and conservation plans. At the same time, FSA was not required to consider the potential impacts of increased motor traffic during operation because FSA found this would only happen for a short time. Mitigation measures in the farm’s design and required plans addressed the potential ammonia impacts. Other air quality issues that FWW raised were discussed in the permitting plans and would be mitigated.
The court deferred to FSA’s review of only the impacts on migratory birds and not to more broadly include other biological resources. The court highlighted that an agency’s NEPA review is often a series of judgment calls and line-drawing decisions. NEPA allows the agency to determine which wildlife resources to consider, and the court defers to FSA’s judgment to consider only the migratory birds.
The court also agreed that FSA had considered the cumulative impact of the proposed farm. FSA, according to the court, was reasonable in only considering the impacts on Caroline County, the location of the farm, and not on the entire Chesapeake Bay watershed as FWW wanted. FSA also correctly determined that the cumulative impacts would be minor based on the proper implementation and adherence to the proposed farm’s conservation plan. Based on all this information, FSA completed a hard look at the proposed farm’s environmental impacts and fulfilled FSA’s NEPA requirements.
Based on the FSA analysis, it was reasonable for the court to determine that the proposed farm would have no significant effect on the environment and that FSA is not required to complete an EIS. FWW had presented evidence from researchers at John Hopkins University during FSA’s review of the proposed farm showing its potential impacts on the environment from the concentration of pathogens and manure in order to show that an EIS was required. The court points out that FSA addressed these concerns through the mitigation measures in the proposed farm’s required plans which would adequately control these issues.
FSA also adequately reviewed the reasonable alternatives to building a proposed poultry farm. The other options reviewed met the requirements of USDA’s loan guarantee program. Finally, the court dismissed claims that FSA had not adequately complied with applicable procedures in reaching this decision. The court dismissed FWW’s NEPA claims and ruled in favor of FSA.
This case represents one of the first challenges to the approval of an FSA loan guarantee for a CAFO in Maryland by arguing the NEPA process was inadequate. We have seen similar challenges work in other states. The case demonstrates that the regulatory process in Maryland is potentially adequate to show that a Maryland CAFO would have a limited environmental impact based on the requirements of the state’s permitting process. The current decision is just one case, so we will have to see how future cases play out, if there are future challenges to the NEPA process associated with approving a loan guarantee. FWW can still appeal this decision, so this may not be the last word.
One important thing to note in all this is a recently released proposed regulatory NEPA update by the Council on Environmental Quality to exempt FSA loan guarantees from the NEPA process (85 Fed. Reg.1,864). If this overhaul goes forward, FSA would no longer have to complete an EA for loan guarantees, ending challenges such as this one. The proposed revisions will be an exciting development to keep an eye on going forward.
Food & Water Watch v. USDA, No. 17-1714 (BAH), 2020 WL 1479462 (D.D.C. Mar. 26, 2020).
Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act, 85 Fed. Reg. 1,864 (1/10/2020).