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VILLAGE OF PALATINE v. USPS

January 25, 1991

VILLAGE OF PALATINE, Plaintiff,
v.
UNITED STATES POSTAL SERVICE, Defendant



The opinion of the court was delivered by: MORAN

 JAMES P. MORAN, CHIEF UNITED STATES DISTRICT JUDGE

 In this ongoing lawsuit the Village of Palatine ("Palatine") seeks to halt construction by the United States Postal Service ("Postal Service") of a mail processing facility within its borders. In response to this court's Memorandum and Order of June 7, 1990, denying its motion to dismiss or for summary judgment, the Postal Service filed a Revised Environmental Assessment, explaining in further detail the basis for its finding that construction of the facility will have no significant impact on the environment. In the wake of this document Palatine has filed a renewed motion for preliminary injunction as well as a first amended complaint requesting preliminary and permanent relief enjoining further construction until the Postal Service satisfies the obligations imposed upon it by federal law, executive order, and its own regulations. For the reasons stated herein, we consolidate Palatine's renewed motion for a preliminary injunction with its request for a permanent injunction and, ruling on the merits of its claims, deny Palatine's request for injunctive relief.

 BACKGROUND

 In light of our extensive earlier opinion in this case, Palatine v. United States Postal Service, 742 F. Supp. 1377 (N.D. Ill. 1990) (Palatine I), we review the legal and factual background only to the extent necessary to resolve the issues raised by Palatine's amended complaint.

 I. Legal Background

 As a federal agency the Postal Service's actions in this case have been guided by a combination of federal statutes, executive orders, and administrative regulations. Pursuant to the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U.S.C. § 4321 et seq., agencies contemplating "major" actions "significantly affecting the quality of the human environment" must prepare an Environmental Impact Statement (EIS). 42 U.S.C. § 4332(2)(C). Although there is no statutorily required length or amount of detail an EIS is costly, both in money and in time, and the resulting document is a "formidable" one. As the Seventh Circuit has acknowledged, "if such a statement were required for every proposed federal action that might affect the environment, federal governmental activity and the private activity dependent on it would pretty much grind to a halt." River Road Alliance, Inc. v. Corps of Engineers of United States Army, 764 F.2d 445 (7th Cir. 1985), cert. denied, 475 U.S. 1055, 89 L. Ed. 2d 590, 106 S. Ct. 1283 (1986).

 Guided in large part by regulations promulgated by the Council on Environmental Quality, 40 C.F.R. §§ 1501-08 (1989), agencies conduct a more limited Environmental Assessment (EA) to determine whether a proposed action will cause a significant impact requiring completion of an EIS. *fn1" 40 C.F.R. §§ 1501.3-.4 (1989). If an EA finds that a project will not impose a significant environmental impact, the agency involved issues a Finding of No Significant Impact (FONSI), which allows it to avoid an EIS. If the project will have some, but not a significant, impact on the environment, NEPA still requires the agency to consider alternatives that may have less of an environmental impact. 42 U.S.C. § 4332(2)(E).

 Pursuant to Executive Order 11988, Floodplain Management, all agencies must "provide leadership" in preventing flood loss by avoiding "direct or indirect support of floodplain development wherever there is a practicable alternative." 3 C.F.R. § 117 (1977). In considering a proposed action an agency must first determine whether it will occur in a floodplain; if so, the agency must consider alternatives to avoid adverse effects and incompatible floodplain development.

 Recognizing that sound development of urban communities "depends to a large degree on the social and economic health and the sound development of smaller communities and rural areas," 31 U.S.C. § 6506, Congress, in the Intergovernmental Cooperation Act of 1968 (ICA), has directed the President to prescribe regulations to govern planning of federal projects with a significant impact on community development. When federal and local objectives, such as "appropriate land uses for housing, commercial, industrial, governmental, institutional, and other purposes," 31 U.S.C. § 6506(b)(1), conflict, federal agencies are to make "reasoned choices." Executive Order 12372 directs federal agencies to promulgate regulations to implement the ICA. 3 C.F.R. § 197 (1982).

 All of the above statutes, orders and regulations direct federal agencies to draft regulations to implement them and the Postal Service has acted accordingly. See 39 C.F.R. §§ 775-78 (1989). The Postal Service also has issued more detailed regulations in Handbook RE-6, Environmental and Intergovernmental Review Procedures, that are enforceable in the courts under the Administrative Procedure Act (APA). 5 U.S.C. § 701, et seq.

 II. Factual Background

 Inasmuch as this dispute will be resolved on the administrative record before the court, *fn2" and in light of the detailed background set out in our prior opinion, *fn3" we present a somewhat truncated factual background at this point in our opinion. Where relevant to resolution of specific issues, we shall set forth more detailed facts in the discussion and analysis below.

 Faced with anticipated continued growth of its North Suburban service area, encompassing the growing north and northwest portions of Metropolitan Chicago, the Postal Service has decided that its existing regional mail processing facility for that area is ill-equipped to fulfill future needs and that an additional facility is needed. This dispute arises out of the Postal Service's decision to build that facility on a 43-acre parcel in Palatine known as the McDade site. The Postal Service's plans include a 628,750 square foot, two-story facility with parking for approximately 1089 vehicles. Operating 24 hours a day, the facility initially will employ 1500 workers; although the Postal Service initially estimated that the facility ultimately would employ 2500 workers, it now asserts that increased efficiencies from automation will drive that number downward. *fn4"

 From Palatine's perspective, the Postal Service could not have picked a worse location. The McDade site sits at the intersection of Northwest Highway and Route 53, is zoned for commercial use and possesses, according to Palatine, prime development and tax revenue potential. Besides allegedly impairing commercial development of adjoining parcels, the Postal Service's decision removes the site from the local tax base at an estimated loss of $ 25 million in tax revenue over the next 25 years. Shortly after first being notified by the Postal Service of its interest in the McDade site in August 1987, Palatine enlisted the support of other units of local and state government, several members of Congress and both Illinois senators to lobby the Postal Service to accommodate its concerns.

 In January 1988, the Postal Service issued a draft EA indicating that 15.8 acres of the McDade property were located in a floodplain, thus leading the Postal Service to change its construction plans. On March 23, 1988, the Postal Service issued a revised draft EA based on these changes, to which Palatine responded that the Postal Service had failed to consider adequately the adverse effects of the facility on the environment. Two days later the Postal Service purchased the McDade site. In May 1988, the Postal Service issued another revised EA concluding that the facility would have no significant impact on the environment, thus relieving the Postal Service of the obligation of preparing an EIS.

 Palatine, however, did not give up, suggesting in early 1989 that the Postal Service consider switching the McDade site for 34 acres immediately to the north known as the Brandt site. Zoned for manufacturing, the Brandt site would allow the Postal Service to build its facility without disturbing Palatine's zoning plan. Palatine also obtained a commitment from Donald Mitroff, a local developer, to develop the McDade site if the Postal Service agreed to the switch. In May 1989, the Postal Service agreed to consider the Brandt site as a possible alternative.

 In a July 1989 letter to Palatine's village president, the Postal Service indicated that it had completed its alternative site evaluation study and that, while the Brandt site could be viable, Palatine first had to address certain issues. Palatine apparently had yet to address these issues by December 20, 1989. On January 29, 1990, the Postal Service informed Palatine that it would build the facility on the McDade site as originally planned.

 On March 23, 1990, contending that the Postal Service had failed to comply with applicable federal law, Palatine filed a five-count complaint asking that this court enjoin construction of the facility. We denied Palatine's motion for a temporary restraining order and, in Palatine I, denied the Postal Service's motion for dismissal or summary judgment. Following that memorandum and order, which highlighted deficiencies in the May 1988 EA, the Postal Service submitted its July 1990 Revised EA. Palatine then filed its renewed motion for a preliminary injunction and its amended complaint requesting preliminary and permanent injunctive relief.

 DISCUSSION AND ANALYSIS

 I. Preliminary Procedural Issues

 A. Discovery

 Up to this point this court has continued a motion to stay discovery, filed by the Postal Service the day before Palatine was scheduled to depose Thomas Aggen, the postal official responsible for purchasing the McDade site. The Postal Service contends that we should restrict our review to the administrative record. Palatine has filed a corresponding motion to compel. For the following reasons, we grant the Postal Service's motion.

 Palatine hopes to support its theory that Aggen knowingly paid well in excess of fair market value for the McDade site and then sought to cover this up by circumventing, until early 1988, the postal officials who should have overseen preparation of the early draft EA's. This theory, however, is of only limited relevance to the issues before us. Palatine does not allege bad faith in the initial selection of the McDade site, nor does it allege any connection between the price paid and the adequacy of the FONSI in the July 1990 EA. If discovery were to continue, at best Palatine could contend that the Postal Service's true concern in belatedly considering the Brandt site was to avoid financial loss after purchasing the McDade site at an excessive price.

 Only recently the Seventh Circuit reiterated the wisdom of confining review of agency decisionmaking to the administrative record. See Cronin v. United States Department of Agriculture, 919 F.2d 439 (7th Cir. 1990). Although, as a general rule, courts are to avoid delving into the mental processes of administrative decisionmakers, Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971) (citing United States v. Morgan, 313 U.S. 409, 422, 85 L. Ed. 1429, 61 S. Ct. 999 (1941)), where there are no formal findings examination of the decisionmakers may be the only way to ensure effective judicial review. Id. Even so, district courts need not make such inquiries beyond the record so long as the agency can provide "an adequate explanation for [its] action." Id. This court is of the opinion that the administrative record provided by the July 1990 EA, and its accompanying appendices, provides an adequate basis for determining the validity of the actions ...


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