XII. WHETHER THE CONSENT DECREE AGAINST GAC ISSUED BY THE FEDERAL TRADE
COMMISSION AUGUST 1974 COULD BE INVALIDATED BECAUSE OF THE COMMISSION'S
FAILURE TO PREPARE AN ENVIRONMENTAL IMPACT STATEMENT BEFORE ENTERING
In August, 1974, the Federal Trade Commission (FTC) issued a consent
order affecting the practices of the Gulf American Corporation in Golden
Gate Estates. Despite the environmental impacts that necessarily result
from any action by GAC in Golden Gate Estates, the FTC did not prepare
an environmental impact statement (EIS) before issuing the consent order.
As authority for not preparing an EIS, the FTC relies on one of its own
rules, 16 C.F.R. 1.82(d), which provides:
Nothing in this procedure shall be construed as stating or
implying that section 102(2)(C) of NEPA applies to: any
investigation made by the Commission for law enforcement
purposes; any process or order issued by the Commission in
connection with any type of investigation; any agreement
of voluntary compliance or consent decree entered into by
the Commission; or any adjudicatory proceedings commenced
by the Commission.
The National Environmental Policy Act of 1969 (NEPA), 42 U.S.C.A.
4321-4347 (1977), was enacted to force federal agencies to consider environ-
mental impacts in making decisions. Congress chose to accomplish this
result by ordering them to prepare environmental impact statements. Section
102(2)(C) of NEPA requires all agencies of the federal government to,
Include in every recommendation or report on proposals for
legislation and other major Federal actions significantly
affecting the quality of the human environment, a detailed
statement by the responsible official on-
(i) the environmental impact of the proposed action,
(ii) any adverse environmental effects which cannot
be avoided should the proposal be implemented,
(iii) alternatives to the proposed action,
(iv) the relationship between local short-term uses of
man's environment and the maintenance and enhance-
ment of long-term productivity, and
(v) any irreversible and irretrievable commitments of
resources which would be involved In the proposed
action should it be implemented.
According to the statute, then, an EIS must be prepared for any major
federal action significantly affecting the quality of the environment. This
duty is mandatory and must be fulfilled to the 'fullest extent possible."
Calvert Cliffs Coordinating Committee v. A.E.C., 449.F.2d 1109 (D.C. Cir.
1971); City of New York v. U.S., 337 F. Supp. 150 (E.D.N.Y. 1972); Kalur v.
Resor, 335 F. Supp. 1 (D.C.D.C. 1971).
There are only a few explicit statutory exceptions to the duty, none
of which applies here. See Appendix III, Library of Congress NEPA Work-
shop for a compilation of statutory exemptions. The Clean Water Act, for
example, exempts the Environmental Protection Agency (EPA) from preparing an
EIS in certain instances. 33 U.S.C.A. 1371(c)(1). The courts have extended
this exemption into other areas of EPA's activity as well on the basis that
its decision-making process is the functional equivalent of an FIS. See,
e.g., Amoco Oil Co. v. EPA, 501 F.2d 722 (D.C. Cir. 1974); Environmental
Defense Fund v. EPA 489 F.2d 1247 (D.C. Cir. 1973).
The other major exception arises when there is a clear and unavoidable
conflict between NEPA and the requirements of another statute. In that
case NEPA may have to give way. The courts have been very strict in apply-
ing this exception. In holding the FPC must prepare an EIS for a gas
rationing plan, the Fifth Circuit said that unless "compliance would lead
to a violation of statutory obligation" or "would do violence to a pre-
existing statutory duty" the agency must file and EIS. "(M]ere difficulty
not amounting to statutory impossibility will be no excuse." Louisiana v.
FPC, 503 F.2d 844, 875 (5th Cir. 1974).
Application of the exception has usually resulted from a conflict in
time limitations. In Flint Ridge Development Co. v. Scenic Rivers Assoc.,
426 U.S. 776 (1976), the U.S. Supreme Court held the Department of Housing
and Urban Development (HUD) was not required to file an EIS prior to
approving the descriptions of developments which must be filed under the
Interstate Land Sales Full Disclosure Act. Under the Disclosure Act, HUD
must either approve or disapprove the description within 30 days or it is
automatically approved. The court ruled that such a time constraint made
it impossible to prepare an EIS and therefore preparation was not legally
required. See also, Dry Color Manufacturers' Assoc. v. Brennan, 486 F.2d
98 (3d Cir. 1973)(no EIS required for an Emergency Temporary Standard
although required for the permanent standard that would replace it in
six months); Gulf Oil Corp. v. Simon, 502 F.2d 1154 (Temp. Emerg. Ct.
App. 1974); American Smelting and Refining Co. v. FPC, 494 F.2d 925
(D.D.C. 1974); Cohen v. Price Commission, 337 F. Supp. 1236 (S.D.N.Y.
1972). The FTC is not primarily concerned with protection of the environ-
ment and has not prepared the functional equivalent of an EIS. Therefore
an exemption similar to that given the EPA would not be available.
Similarly, there Is no statutory conflict and no time constraints that
would prevent the FTC from preparing an EIS and so the second exception
is also unavailable.
If the FTC's action, then, in entering the consent decree is a
"major federal action significantly affecting the quality of the human
environment," its environmental consequences must be evaluated in an
EIS. The phrase itself is somewhat ambiguous and difficult to define
more precisely. See, McGarity, T., The Courts, The Agencies and NEPA
Threshold Issues, 55 Tex.L.Rev. 801-886 (1977); Comment, The Developing
Common Law of "Major Federal Action" Under the National Environmental
Policy Act, 31 Ark.L.Rev. 254-276 (1977). Guidelines promulgated by the
Council on Environmental Quality (CEQ) are hardly more definitive. 40
C.F.R. 1500.6 (1977). Some of the actions held to require preparation
of an EIS have been:
(a) Action by the ICC authorizing abandonment of a railroad line,
City of New York v. U.S., 337 F. Supp. 150 (E.D.N.Y. 1972);
(b) The decision to terminate a contract for the purchase of helium,
National Helium Corp. v. Morton, 445 F.2d 650 (10th Cir. 1971);
(c) The decision to sell timber in a National Forest,
Wyoming Outdoor Coordinating Council v. Butz, 484 F.2d 1244
(10th Cir. 1973);
(d) The decision to emphasize the research and development of nuclear
fast breeder reactors, Scientists' Institute for Public Information
v. AEC, 481 F.2d 1089 (D.C. Cir. 1973);
(e) The decision by the ICC to allow rate hikes for railroads, Aberdeen
and Rockfish Railroad v. Students Challenging Regulatory Agency
Procedures, 422 U.S. 289 (1975); and
(f) Issuance of permit by the FPC to construct three power lines,
Greene County Planning Board v. F.P.C., 455 F.2d 412 (2d Cir.).
cert. den. 409 U.S. 849 (1972).
An extensive list could be compiled. When compared with many of these actions,
the FTC's decision to require G.A.C. to undertake certain land development
practices in extensive areas of the Big Cypress Swamp, clearly appears to be
a "major federal action significantly affecting the quality of the human
Several recent decisions have dealt with the applicability of NEPA
to actions of the FTC. In Gifford-Hill & Co. v. FTC, 389 F. Supp. 167
b-___ ---__________- "'a
(D.C.D.C. 1974), the FTC had initiated adjudicatory proceedings before an
administrative law judge to enforce the antitrust laws against Gifford-
Hill (GFH). GFH then sought to enjoin the FTC from prosecuting the
action until it had filed an EIS. The District Court held the FTC was
not required to prepare an EIS because there was no reasonable relation-
ship between the decision to take enforcement action and the quality of
the environment. Gifford-Hill was unable to show any environmental impacts
resulting from the decision of the FTC. Therefore, it was not a major
federal action significantly affecting the environment and Section 102(2)(C)
of NEPA did not apply. The Circuit Court of Appeals affirmed the decision,
523 F.2d 730 (1975), giving two other reasons. First, Gifford-Hill had
shown no substantial interest protected by NEPA and therefore had no
standing. Second, the action was premature. The proper time and place
for review of the FTC's decision was by appeal to a Circuit Court of
Appeals after the FTC had issued an antitrust order. Neither court ruled
on the validity of 16 CFR gl.82(d), set out above at page 93.
A subsequent decision, however, has addressed the apparent conflict
between 16 CFR 1.82(d) and NEPA. In Mobil Oil Corp. v. FTC, 430 F.
Supp. 855 (S.D.N.Y. 1977), the FTC had begun an administrative action
against a group of oil companies alleging antitrust violations and seek-
ing substantial divestiture of their pipeline and refinery capacity. The
oil companies then sought to require the FTC to prepare an EIS regarding
the environmental impacts of the proposed relief. The District Court held
the rule was invalid and that an EIS must be prepared prior to commenc-
ing the proceeding. On appeal the Second Circuit Court of Appeals re-
versed this decision, holding that preparation of an EIS was not required
at such an early stage in the proceedings. 562 F.2d 170 (2d Cir. 1977).
The Court expressly chose to leave open the questions of whether an EIS
might eventually be required and whether 16 CFR 1.62(d) is invalid. "We
leave to another day the determination as to whether an EIS must precede
the final order herein, the likelihood and contents of which are now but
matters of speculation." Id. at 174.
Unlike the facts of the Mobil case, the FTC has issued a final order
binding GAC. Its contents are not speculative, but concrete, and its
effects on the environment are of potentially great magnitude. Because
the order appears to be a major federal action significantly affecting
the human environment, which is not exempted by statute from the require-
ments of NEPA and because there is no inherent conflict between complying
with NEPA and fulfilling the statutory mandate of the Federal Trade
Commission, the FTC seems to have a clear and mandatory duty to prepare
an EIS regarding the consent order.
The FTC might raise the equitable defense of laches against an
action brought to compel preparation of an EIS. Laches may bar equitable
relief when a plaintiff has inexcusably delayed bringing the action and
the defendant is thereby unduly prejudiced. Whether laches is a bar
depends on the particular circumstances of the case. Clark v. Volpe,
342 F. Supp. 1324, 1328 (E.D. La. 1972). (For a fuller discussion of the
doctrine see Concerned About Trident v. Schlesinger, 400 F. Supp. 454,
478-479 (D.C.D.C. 1975)).
A mere lapse of time is not sufficient to constitute laches. Penn.
Enviro. Def. Council v. Bartlett, 315 F. Supp. 238, 246 (M.D.Pa. 1970),
aff'd 454 F.2d 613 (3d Cir. 1971). Each of three independent criteria
for determining laches must be met. Ecology Center of La. v. Coleman, 515
F.2d 860 (5th Cir. 1975); Inman Park Restoration v. Urban Mass Transp. Admin.,
414 F. Supp. 99, Ill (N.D.Ga. 1976). First, there must have been delay
by the plaintiff in filing the action. Save Our Wetlands, Inc. v. Rush,
424 F. Supp. 354, 356 (D.C.La. 1976); Save Our Wetlands, Inc. v. Rush,
549 F.2d 1021, 1026-1027, reh. den. 553 F.2d 100 (5th Cir. 1977); Dalsis
v. Hills, 425 F. Supp. 784, 788-789 (D.C. N.J. 1976); Harrisburg
Coalition Against Ruining The Environment v. Volpe, 330 F. Supp. 918,
925 (M.D.Pa. 1971). Second, the delay must be inexcusable. Clark v.
Volpe, 342 F. Supp. 1324, 1328-1329 (E.D.La. 1972), aff'd 461 F.2d 1266
(5th Cir. 1972); Environmental Defense Fund v. T.V.A., 468 F.2d 1164,
1182 (6th Cir. 1972); Pennsylvania Environmental Defense Council v.
Bartlett, 315 F. Supp. 238, 246 (M.D.Pa. 1970), aff'd 454 F.2d 613 (3d
Cir. 1971); Save Our Wetlands, Inc. v. Rush, 549 F.2d 1021, 1027-1028
(5th Cir. 1977); Concerned About Trident v. Schlesinger, 400 F. Supp.
454, 479-480 (D.C.D.C. 1975), Third, there must be undue prejudice
to the interests of the defendant caused by the delay. Arlington Coalition
on Transportation v. Volpe, 458 F.2d 1323, 1329 (4th Cir. 1972); Ecology
Center of Louisiana, Inc. v. Coleman, 515 F.2d 860, 867-869 (5th Cir. 1975);
Save Our Wetlands, Inc. v. Rush, 549 F.2d 1021, 1028-1029 (5th Cir. 1975);
Save Our Wetlands, Inc. v. Rush, 424 F. Supp. 354, 356-357 (D.C.La. 1976).
Clark v. Volpe, 342 F. Supp. 1324 (E.D.La. 1972), aff'd 461 F.2d 1266
(5th Cir. 1972), illustrates the application of these criteria in an action
to enforce NEPA. Plaintiffs had sought to enjoin construction of 1-610
through the New Orleans City Park until an EIS was prepared. The court
ruled "somewhat reluctantly" the action was barred by application of the
doctrine of laches. Several factors compelled the court's decision. The
plaintiffs were charged with the knowledge that for many years a highway
was planned through the park. On May 25, 1971, final approval was given
for the project, yet suit was not filed until February 24, 1972. During
the intervening time, while "plaintiffs stood idly by ... bulldozers
and chainsaws stripped and leveled the land and ... vast sums of public
money were expended on highway construction." Id. at 1329. At the time
of the court's decision, 25% to 30% of the total work had been completed.
Id. at 1327. In those circumstances, the delay was held to be unreasonable
and substantially prejudicial to the defendants. Id. at 1329. One im-
portant factor in the decision was that the purposes of requiring an EIS
had already been defeated. No benefit could be gained by requiring studies
as to the consequences of altering the environment after it had already
been devastated. Id. at 1330.
A contrary result was reached in Inman Park Restoration v. Urban Mass
Transp. Admin., 414 F. Supp. 99 (N.D.Ga. 1976). Plaintiffs challenged
the adequacy of the EIS for Atlanta's MARTA mass transit system. Although
there appears to have been unreasonable delay in filing the action, the
court was unable to find that undue prejudice would result from litigation
of the action (Id. at !ll)because, in contrast to Clark, no actual physical
construction had commenced on the segment in dispute. The expenditures
and commitments made by an agency and the extent to which a contested pro-
ject has been built have been determinative of several other cases. See
also, Save Our Wetlands, Inc. v. Rush, 549 F.2d 1021, 1029 (5th Cir. 1977)
(prejudice found where construction "substantially completed"); City of
Rochester v. United States Postal Service, 431 F.2d 967, 977 (2d Cir. 1976)
(construction 10% completed); Iowa Student Public Interest Research Group
v. Callaway, 379 F. Supp. 714 (S.D. Iowa 1974); (2/3 of dam completed
before suit filed). But see, Natural Resources Defense Council v. Grant,
341 F. Supp. 356, 368 (E.D.N.C. 1972) (no prejudice where construction not
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An agency's other interests must also be considered, however. The
case of Ecology Center of Louisiana, Inc. v. Coleman, 515 F.2d 860 (5th
Cir. 1975), analyzes the factors which must be weighed in assessing pre-
judice to the defendant in a NEPA enforcement case. In Coleman the
plaintiffs were challenging the sufficiency of the EIS for construction
of a road. Suit was not filed until two years after the final EIS had
been approved. Over a million dollars had been spent on right-of-way
acquisitions. Nevertheless, the court ruled there was insufficient pre-
judice to invoke laches because the potential benefits of complying with
NEPA outweighed the costs of possibly altering or abandoning the proposed
route. For laches to bar suit, the defendants must "have established
prejudice beyond a genuine question to the accomplishment of their
statutorily charged duties." Id. at 869. Those duties include not only
the duty to build roads but also the duty to consider and ameliorate
environmental impacts as charged by NEPA. Therefore, the environmental
benefits of an action that would force such consideration in compliance
with NEPA should be offset against other detriments in determining
whether the defendant would be prejudiced by litigation.
[T]he prejudice to the defendant lies not merely in its
actual expenditures or even in its claimed detriment,
but rather in what Congress defines as the prejudice.
The defendant agency in this case serves as a proxy for
'"the public interest, in that it is Congressionally
charged with affirmatively considering both the trans-
portational needs and the environmental needs of the
people in an area. The prejudice is determined by extra-
polating from the Congressional directive a set of criteria
which the agency should use to determine what its Interests
are. Any agency action must be evaluated not only in terms
of the cost of slowing transportation system development
and funds committed in that pursuit, but also, in the cost
of unnecessary environmental harm. In the absence of
specific legislative policy, the agency can claim what
harm it believes it has suffered, but when Congress charges
an agency to make specific calculations in assessing what
action is in the agency's interest, the Courts may not
give that agency an unintended discretion by measuring
actions by a different, agency-chosen, calculus. Id. at 868.
It appears also that for reasons of public policy the courts will
require a very strong showing of prejudice to invoke the defense of laches
in a NEPA enforcement case. In Environmental Defense Fund v. Tennessee
Val. Auth., 468 F.2d 1164 (6th Cir. 1972), the court said,
Consideration of the public interest also requires
us to reject the defense of laches. The strong policy
embodied in the NEPA concerning the importance of
agency consideration of environmental values militates
against barring this suit on the ground of unreasonable
delay, although the delay undoubtedly will affect the
ultimate decision whether to proceed with the project
as planned. There is also the public interest in re-
quiring public officials to obey statutory mandates:
"The tardiness of the parties in raising the issue
cannot excuse compliance with NEPA; primary responsibil-
ity under the Act rests with the agency." These consid-
erations may in part explain why courts have not been
receptive to foreclosing litigation on the issues
raised in this appeal on the ground of plaintiffs' delay
in bringing suit. [citations omitted]. Id. at 1182-1183.
In Arlington Coalition on Transportation v. Volpe, 458 F.2d 1323
(4th Cir. 1972), plaintiffs were challenging the decision to build an
interstate highway because no EIS had been filed. The court specifically
found there had been unreasonable delay in filing suit and the defendants
would be thereby prejudiced. The court then held,
Nevertheless, we decline to invoke laches against
appellants because of the public interest status
accorded ecology preservation by the Congress.
We believe that Arlington 1-66 has not progressed
to the point where the costs of altering or aban-
doning the proposed route would certainly out-
weigh the benefits that might accrue therefrom to
the general public. In their reconsideration of
the proposed route, the Secretary of Transportation
and the Commissioner of the Virginia Department of
Highways may decide, of course, that the costs do
outweigh the benefits. If the opposite conclusion
is a reasonable possibility, however, as it is here, the
Congressional declaration of policy in the relevant statutes
of the Importance of the benefits that might accrue demands
that the merits of the question be considered by the
appropriate agencies. [footnotes omitted]. Id. at 1329-1330.
A substantial period of time has elapsed since the FTC issued the
consent decree regarding Golden Gate Estates and no action has been filed
to enforce compliance with NEPA. There are no apparent reasons to excuse
the delay. These facts would tend to support application of the doctrine
of laches. However, there also does not appear to have been any sub-
stantial prejudice to the FTC or GAC from the delay. On the contrary a
substantial environmental benefit could be realized by reconsideration of
the FTC decision in the light of NEPA's mandate. It seems unlikely,
therefore, that a defense of laches would prevail.
In conclusion, it appears that an action to invalidate the consent
decree and require the FTC to prepare an environmental impact statement
before issuing another one would be likely to succeed. The order seems
to be a major federal action significantly affecting the environment.
FTC actions are not exempted by statute from NEPA and there is no
statutory conflict that would create an exemption. Although a lengthy
period of time has elapsed since issuance of the order, it does not
appear that a defense of laches would be sustained to relieve the FTC
of its statutory responsibilities under NEPA.
WHETHER AN EIS MUST BE PREPARED FOR A REVISION OF THE CONSENT ORDER
The defense of laches might also be avoided by arguing the current
revision of the consent order constitutes, in and of itself, a major
federal action significantly affecting the quality of the human environ-
ment. The only disadvantage to this approach is that the FTC might
argue that the scope of the EIS should therefore only encompass the
effect on the environment of the changes outlined in the consent order.
Given the mandated elements of an EIS, however, it seems unlikely the
FTC could prepare an adequate one without reassessing its part in the
Another potential problem is that the FTC might argue that only the
changes in the consent order should be analyzed to determine if there is
a major federal action significantly affecting the environment requiring
the preparation of an EIS. The rebuttal to this argument is that the
FTC is not merely adopting changes, but is reexamining the entire order
and re-adopting those parts which are not being changed.
NEPA clearly requires the preparation of an EIS prior to undertaking
any major federal action with significant environmental impacts. If the
revision and reissuance of the consent order meets the statutory definition,
then an EIS must be prepared at that time. It should be irrelevant that
the agency should have been required to prepare an EIS for the issuance
of the original consent order. The agency merely loses the advantage
of having previously assessed many of the same environmental factors that
are involved in the decision regarding the revision.
We have found no authority addressing these points directly, but
there is a line of cases from which some analogies may be drawn. They
involve the question of whether an EIS is required when federal actions
are taken in conjunction with a project for which no EIS was originally
required because the prior federal actions occurred before NEPA took
effect. The cases all agree that any subsequent major federal action on
such projects requires an EIS to be prepared regarding it.
The first of these cases is Environmental Defense Fund v. Tennessee
Valley Authority, 468 F.2d 1164 (6th Cir. 1972). It involved the
question of whether an EIS must be prepared for the controversial Tellico
Dam project. The project was planned and substantially undertaken prior
to the passage of NEPA. Nevertheless, the court required preparation of
We believe it more consonant with congressional intent
to hold that an agency must file an impact statement
whenever the agency intends to take steps that will
result in a significant environmental impact, whether
or not the proposed steps represent simply the last
phase of an integrated operation most of which was
substantially completed before that date. Id. at 1177.
The case of Jicarilla Apache Tribe of Indians v. Morton, 471 F.2d
1275 (9th Cir. 1973) concerned the need to prepare environmental impact
statements for several large coal fired electrical generating plants
that had been begun prior to the effective date of NEPA. The district
court had ruled that preparation of environmental impact statements was
not necessary because "the basic courses of action ... were not re-
assessable" as of NEPA's effective date. The circuit court reversed and
held that NEPA required the preparation of environmental impact state-
ments for all major federal actions taken with respect to the projects
subsequent to the law's effective date. "The fact that it is not
practicable to reassess the basic course of action does not mean that
an environmental impact statement need not be filed prior to a further
major action taken pursuant to that basic course of action." Id. at
1282. (emphasis added). The court found that such actions as the approvals
of rights of way, of pollution control devices required by a lease agreement
and of stack heights necessitated the assessment of environmental impacts.
It would seem by analogy that any further major federal action taken by
the FTC with regard to Golden Gate Estates would similarly necessitate
the preparation of an environmental impact statement.
San Francisco Tomorrow v. Romney, 472 F.2d 1021 (9th Cir. 1973),
was concerned with the necessity of preparing environmental impact state-
ments for two urban renewal projects that had been begun prior to NEPA.
No EIS was required for one of the projects in which the only subsequent
federal action was to increase the level of funding in order to pay
increased costs. A subsequent change in the nature of the other project,
from an industrial park project to a neighborhood development program,
however, did constitute a major federal action and thus necessitated
compliance with NEPA. Id. at 1025-1026.
Another case in which an EIS was required for an on-going project
is Jones v. Lynn, 477 F.2d 885 (1st Cir. 1973). Jones concerned an urban
renewal project in Boston. The project area included sites where no
demolition had yet occurred, as well.as sites with finished buildings.
The court flatly rejected the government's claim that NEPA was in-
applicable because decisions and commitments had already been made
regarding the project. So long as the federal government "remains mean-
ingfully involved in a project," there is a responsibility to comply
with NEPA. Id. at 889. "[T]he question must be what agency decisions
are yet to be made, and what decisions, although already made, remain
open to revision." Id. at 890. All major federal actions subsequent to
NEPA, even regarding an existing project, must be preceded by the pre-
paration of an EIS. Id.
Sierra Club v. Morton, 400 F. Supp. 610 (1975), involved large
pumping plants that had been constructed prior to the passage of NEPA as
part of the California Water Project. Here, although the plants were not
yet operating at full capacity, the court did not require an EIS to be
filed before they were so operated.
Although NEPA is applicable to further incremental
major federal actions occurring subsequent to its
effective date even though a project was initiated
prior to that date, once a project is complete,
there can be no further major action because at the
time of completion, the project was capable of oper-
ating at maximum capacity and the agencies intended
to operate it at full capacity. Id. at 645.
However, the court did require an EIS to be prepared regarding any future
expansion of the plants if the expansion would have a significant effect
on the environment. Id. at 647. The court reasoned that such an expansion
constituted either "future incremental major action of an ongoing project
or new major federal action." Id.
In summary, while none of the cases discussed above involved the
issuance or revision of a consent order, they provide a strong argument
that the FTC's adoption of a revised consent order in conjunction with the
Golden Gate Estates development requires the preparation of an environ-
mental impact statement if it constitutes a major federal action signifi-
cantly affecting the quality of the human environment. This proposition
logically follows from the cases discussed above, which required the
preparation of statements for actions regarding ongoing projects which
did not fall under the requirement at their inception.
Further, it does not appear that the defense of laches would be
available to the FTC if an action is diligently pursued to compel the
preparation of an EIS for the revised consent order even if it might
have been successful as a defense regarding the original order. Even
there, as discussed earlier, the defense is of doubtful validity.
There are two potential problems that Collier County may face if
it seeks to compel the FTC to prepare an EIS for the revised consent
order. First, it may be necessary to show that the changes made to the
original order constitute, by themselves, the type of action for which
NEPA requires the preparation of an EIS.
Second, there is at least a possibility that the EIS, if required,
would have to address only the impacts caused by the changes in the
original order. It would seem, however, that those changes and the
alternatives to them could only reasonably be examined in the context
of the entire project. Thus, the second problem may not be significant
in the final analysis.
Participating In or Seeking Review of FTC Consent Orders
SThe procedure for issuance of consent orders is governed by rules
of the Federal Trade Commission, codified at 16 CFR 2.31-.35 (1977).
It is a relatively informal procedure, as distinguished from the rules
of practice for adjudicative proceedings, 16 CFR 3.1-.72. The procedure
for adopting a consent order begins with an investigation by the FTC
staff and the drafting of a proposed complaint. After negotiations with
the staff, the party against whom the complaint would be issued may
submit an executed consent order agreement to the Commission. If the
Commission accepts the agreement, it is then published in the Federal
Register. Interested persons may submit their comments and views on the
agreement during a period of sixty days. If the public comments reveal
the consent order is inappropriate, improper or inadequate, the Commission
may rescind the acceptance of it. Except for the opportunity to submit
comments, there is no provision in the FTC rules for participation by
any parties other than the FTC and the party against whom the proposed
complaint would be issued.
In the case of Action on Safety and Health v. FTC, 498 F.2d 757
(D.C. Cir. 1974), the court upheld the power of the FTC to deny other
parties a right to intervene in the proceedings leading to issuance of
a consent order. The FTC had announced it's intention to issue a
complaint against Volvo for false and deceptive advertising. The FTC
staff and Volvo then began negotiations regarding a consent order. At
this time the consumer protection organization, Action on Safety and
Health (ASH), filed a motion with the Commission requesting leave to
intervene in the negotiations. The motion was denied. A consent order
was subsequently adopted and ASH sought review of the denial of its
_ __~_ __
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motion. The District Court dismissed the complaint, holding:
a grant of denial of intervention in Commission non-
adjudicative consent negotiations is entirely dis-
cretionary with the Commission and Is not judicially
The Court of Appeals upheld the lower court. Therefore, it appears that
although a motion could be filed with the FTC requesting permission to
intervene in the pre-consent order negotiations, there would be no
judicial recourse if it is denied.
The next alternative would be to seek judicial review of the final
consent order. It seems likely, however, that a reviewing court would
find the contents of the final consent order are also a matter of un-
reviewable agency discretion.
The Federal Trade Commission Act itself provides only for the
review of cease and desist orders and then only at the request of the
person whose conduct is thereby restrained. 15 U.S.C. 545(c). Judicial
review of a consent order therefore must be sought under the Administra-
tive Procedures Act (APA). 5 U.S.C. 55551-576, 701-706 (1977). The APA
grants a broad right to seek judicial review of agency action, 5 U.S.C.
702 (1977), except to the extent that "agency action is committed to
agency discretion by law." 5 U.S.C. $701(a) (1977). The precise issue
for determination, then, is whether the decision regarding the terms and
contents of consent orders by the FTC has been committed to the discretion
of the Commission. If so, then it is unreviewable.
The consent order is essentially an enforcement devise. It is
statutorily authorized by 5 U.S.C. 554(c) (1977) Action on Safety and
Health, supra at 761-762. It appears analogous to plea bargaining and
other devices for the exercise of prosecutorial discretion that seek to
I I _~~~L _
avoid adjudication by the informal settlement of disputes. Judicial review
of the substantive aspects of such decisions is generally not available.
See generally, Davis, Administrative Law Text, 114.01-.12, 28.06 (3d ed.
1972). The basic rationale of the court in Action on Safety and Health
was that the consent negotiation procedure is part of an enforcement
process and therefore the decisions made pursuant to it are not reviewable.
Congress granted great discretion to the Commission to
determine whether a potential respondent has violated the
Act and whether a proceeding by the Commission against
the violator would be in the public interest .... [T]he
power to prescribe consent negotiation procedure is part
of the general enforcement power of the Commission, and
such enforcement decisions are generally not subject to
judicial review. In this area, concerned as it is with
questions of administrative policy and allocation of
scarce Commission resources, "the Commission alone is
empowered to develop that enforcement policy best cal-
culated to achieve the ends contemplated by Congress and
to allocate its available funds and personnel in such a
way as to execute its policy efficiently and economically."
We believe that the whole consent negotiation procedure
was promulgated by the Commission pursuant to its broad
enforcement discretion. Action on Safety and Health, supra
at 762. [citations omittedJ.
The same logic would apply to prevent judicial review of the consent order
which resulted from the process. (Note however, the concurring opinion
of Judge Skelly Wright, who is unwilling to preclude the possibility of
judicial review in all cases of consent orders).
Although it appears likely that a court would not review the terms
and conditions of a consent order, it is unlikely that similar deference
would be given the Commission regarding its duties to follow the pro-
cedure mandated by Congress in NEPA. There is no discretion whether to
prepare and consider an environmental impact statement regarding a major
federal action affecting the quality of the human environment. The case
is analogous to the situation in National Helium Corporation v. Morton,
455 F.2d 650 (10th Cir. 1971). In National Helium Corporation the
Secretary of the Interior had been authorized by Congress to enter
contracts for the "acquisition, processing, transportation, or conser-
vation of helium," which is a very rare and irreplaceable gas. The
matter of whether to purchase helium is a matter entirely within the
discretion of the Secretary. Id. at 653. In 1971 the Secretary decided
to terminate existing contracts. Suit was brought to enjoin the termina-
tion until NEPA had been complied with. An injunction was issued and
upheld by the Circuit Court. Although the Secretary had complete dis-
cretion regarding the substantive act of terminating the contracts, he
could not exercise that discretion without complying with the procedural
mandate of NEPA to prepare and consider an environmental impact statement.