Summary
issuing preliminary injunction against further construction on Third Street Project
Summary of this case from Old Town Neighborhood Association v. KauffmanOpinion
Case No. 1:02-cv-1505-DFH
November 15, 2002
ENTRY ON MOTION FOR PRELIMINARY INJUNCTION
Plaintiffs are groups interested in historic preservation. They seek a preliminary injunction against local, state, and federal officials to block the widening of Third Street in Goshen, Indiana, which runs through a large historic district in the downtown area, until defendants evaluate thoroughly the project's effects on the historic district and alternative solutions to Goshen's traffic problems. The court heard evidence and argument on October 28 and November 4, 2002, and now states its ruling pursuant to Rules 52 and 65 of the Federal Rules of Civil Procedure. All factual findings in this entry are preliminary, of course, based on the limited record established thus far.
The Seventh Circuit has often stated the standard for deciding motions for preliminary injunctions. One definitive statement of the standard reads:
As a threshold matter, a party seeking a preliminary injunction must demonstrate (1) some likelihood of succeeding on the merits, and (2) that it has "no adequate remedy at law" and will suffer "irreparable harm" if preliminary relief is denied. If the moving party cannot establish either of these prerequisites, a court's inquiry is over and the injunction must be denied. If, however, the moving party clears both thresholds, the court must then consider: (3) the irreparable harm the non-moving party will suffer if preliminary relief is granted, balancing that harm against the irreparable harm to the moving party if relief is denied; and (4) the public interest, meaning the consequences of granting or denying the injunction to non-parties.
The court, sitting as would a chancellor in equity, then "weighs" all four factors in deciding whether to grant the injunction, seeking at all times to "minimize the costs of being mistaken." We call this process the "sliding scale" approach: the more likely it is the plaintiff will succeed on the merits, the less the balance of irreparable harms need weigh towards its side; the less likely it is the plaintiff will succeed, the more the balance need weigh towards its side.
Abbott Laboratories v. Mead Johnson Co., 971 F.2d 6, 11-12 (7th Cir. 1992) (citations omitted).
As explained in detail below, the court grants plaintiffs' motion for a preliminary injunction to maintain the status quo and to stop further work on the Third Street project. Plaintiffs have shown a substantial likelihood of prevailing on the merits of their claims that the Third Street project has been improperly "segmented" from a major federal undertaking — improvement of U.S. Highway 33 through downtown Goshen — that is subject to environmental and historic impact review. The evidence indicates that the City of Goshen, the Indiana Department of Transportation, and the Federal Highway Administration have reached an understanding that the City of Goshen should carry out its Third Street project without environmental and historic impact review, and then carry out a "swap" of Third Street and Main Street so that U.S. 33 and State Road 15 will be shifted to use the widened and improved Third Street. The defendants discussed such a scheme, never definitively rejected it, and have acted in a way that is consistent with the scheme. In addition, the scheme makes a great deal of sense, at least from the standpoint of managing traffic through the city. It also offers the apparent advantage of sparing defendants from having to go through formal review of environmental and historic impacts of their desired course of action.
Such segmentation to evade the required environmental and historic review threatens plaintiffs with irreparable harm to their interests in the historic district in downtown Goshen. The balance of harms weighs in favor of plaintiffs, and the public interest weighs in favor of an injunction as well.
The Parties Plaintiff Old Town Neighborhood Association Inc. ("Old Town") is a private not-for-profit corporation whose primary purpose is to enhance the Goshen Historic District, an area of downtown Goshen that is listed on the National Register of Historic Places established under 16 U.S.C. § 470a. Old Town's members include persons who live and own property in the historic district.
Plaintiff Historic Landmarks Foundation of Indiana, Inc. ("Historic Landmarks") is also a private not-for-profit corporation. Historic Landmarks seeks to protect buildings and places of architectural and historical significance throughout Indiana. In addition, Historic Landmarks itself has a legally protected interest in the "Champion House," one of the most important historic buildings in the Goshen Historic District.
Defendant Allan Kauffman is the Mayor of the City of Goshen. Defendant Mary E. Peters is the Administrator of the Federal Highway Administration ("FHWA"), and defendant John Baxter is the Division Administrator of the Indiana Division of the FHWA. Defendant Bryan Nicol is the Commissioner of the Indiana Department of Transportation ("INDOT"). All defendants have been sued in only their official capacities.
The Nature of the Case and the Applicable Law Plaintiffs seek declaratory and injunctive relief based on Sections 106 and 110 of the National Historic Preservation Act ("NHPA"), 16 U.S.C. § 470f and 470h-2, Section 4(f) of the Department of Transportation Act, 49 U.S.C. § 303, and the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq.
Section 106 of the NHPA provides in relevant part that the head of any federal agency overseeing a proposed federally assisted project or having the authority to license such a project shall, prior to approving the use of federal funds, "take into account the effect of the undertaking on any district, site, building, structure, or object that is included in or eligible for inclusion in the National Register." 16 U.S.C. § 470f. Section 110 of the NHPA provides that the federal agency will ensure no federal money is loaned or license issued to an applicant who has "intentionally significantly adversely affected a historic property" unless the agency first determines that, despite that significant adverse impact, "circumstances justify granting such assistance." 16 U.S.C. § 470h-2(k).
Section 4(f) of the Department of Transportation Act provides in relevant part that the FHWA may not approve a transportation project that would require the use "of land of an historic site of national, State, or local significance" unless "(1) there is no prudent and feasible alternative to using that land; and (2) the program or project includes all possible planning to minimize harm to the . . . historic site resulting from the use." 49 U.S.C. § 303.
NEPA requires that a federal agency prepare a detailed statement to be included in every proposal for major federal actions that "significantly affect the quality of the human environment." 42 U.S.C. § 4332(C). The agency conducts an initial review to determine what impact, if any, the proposed project will have on the environment. If the agency issues a finding of no significant impact (often called a "FONSI"), then the project may proceed as planned without further inquiry. See 40 C.F.R. § 1501.4(e). However, if there is a finding of significant impact, NEPA requires that a detailed environmental impact statement be included in the proposal. See 40 C.F.R. § 1502.2. That statement is to include a discussion of "(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 enhancement 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." 42 U.S.C. § 4332(C).
The Parties' Positions Since 1992, INDOT and FHWA have been planning improvements to U.S. 33, which runs through downtown Goshen. Since 1997, INDOT and FHWA have been planning and coordinating their U.S. 33 project together with the City of Goshen's plan to widen Third Street in downtown Goshen. From 1997 through early 2002, the FHWA, INDOT, and the City of Goshen were moving forward on both projects together, with plans for one joint document examining the environmental and historic impacts of the two projects, which were otherwise kept formally separate. In December 2001, federal highway funds were formally obligated for the Third Street project.
There is no doubt that the larger U.S. 33 project is a major federal undertaking that is subject to Section 106 of the NHPA, NEPA, and Section 4(f) of the Transportation Act. In early 2002, however, after encountering delays in the environmental and historic review process, the City of Goshen announced that it would carry out the Third Street project using only local funds. Based on that decision not to use federal funds for the Third Street project, the city has started and plans to complete the project without undertaking the environmental and historic impact review process that applies to major federal undertakings.
Plaintiffs contend in this action that the city's new strategy for separating the controversial Third Street project is an attempt to violate these three federal laws by improperly "segmenting" the Third Street project from the larger U.S. 33 project, which all concede is subject to the laws. In essence, plaintiffs contend that the Third Street project makes sense only as a part of a larger federal project in which U.S. 33 along Madison Street is widened and U.S. 33 and State Road 15 are shifted from Main Street to the newly-widened Third Street. If that is correct, plaintiffs argue, then the defendants should not be able (a) to carve out the Third Street project from the larger federal project, (b) to avoid the environmental and historic impact review, and then (c) to finish the project by having the City of Goshen and INDOT swap Main Street and Third Street after the work has been completed, so that Third Street would become an improved and critical link for both U.S. 33 and State Road 15 without ever being subjected to the federal review of its environmental and historic impacts.
Defendants argue that the Third Street project has not been improperly segmented. They contend that the Third Street project has never been paid for by federal funds or planned by the FHWA, that the Third Street project has "substantial independent utility," that the City of Goshen is committed to the Third Street project regardless of INDOT's and FHWA's eventual decision on the U.S. 33 project, that the Third Street project will have no effect on INDOT's and FHWA's decision on the U.S. 33 project, and that INDOT has conclusively rejected Goshen's earlier proposal to swap Main Street and Third Street and redesignate Third Street as U.S. 33 and State Road 15.
The Law of "Segmentation"
"`Segmentation' or `piecemealing' is an attempt by an agency to divide artificially a `major federal action' into smaller components to escape the application of NEPA to some of its segments." Save Barton Creek Ass'n v. Federal Highway Admin., 950 F.2d 1129, 1140 (5th Cir. 1992); Dickman v. City of Santa Fe, 724 F. Supp. 1341, 1345 (D.N.M. 1989) ("The rule against segmentation was developed to insure that interrelated projects, the overall effect of which may be environmentally significant, not be artificially divided into smaller, less significant actions."). Segmentation may be proper or improper. See Village of Los Ranchos de Albuquerque v. Barnhart, 906 F.2d 1477, 1483 (10th Cir. 1990). Generally, improper segmentation is found only where a federal project has been segmented with the purpose of avoiding compliance with NEPA. Save Barton Creek, 950 F.2d at 1139; cf. 40 C.F.R. § 1506.1(c) (while agency is preparing environmental impact statement, no other federal action may be taken unless it can be independently justified, has its own environmental impact statement, and will not limit alternatives in subsequent projects).
Judge Cummings wrote for the Seventh Circuit about segmentation in Swain v. Brinegar, 542 F.2d 364 (7th Cir. 1976) (en banc). He described the balance that must be struck:
Segmentation of highway projects, although necessary to make their design and construction more manageable, can limit the usefulness of environmental impact studies in two significant ways. First, the project can be divided into small segments; although the individual environmental impact might be slight, the cumulative consequences could be devastating. Second, the location of the first segment may determine where the continuation of that roadway is to be built. In such a case, preparation of the EIS for the extension is no more than a formal task because the decision-maker's ability to choose a different route no longer exists. On the other hand, an EIS need not consider the long-term visions of highway designers and urban engineers when they suggest comprehensive plans which may take years to construct, if they are to be built at all. The information contained in an EIS for such a comprehensive plan is likely to be speculative, irrelevant to the specific question before the decision-maker, and outdated by the time the choice must be made. To require the preparation of such an EIS would surely impose an undue burden on the state and federal agencies.
The purpose of NEPA is to require that federal decision-makers consider the environmental consequences of their actions before deciding to proceed. Their source of information, the EIS, must therefore take a pragmatic and realistic view of the scope of the action being contemplated. The view must be one neither confined by the literal limits of the specific proposal nor one unbounded except by the limits of the designer's imagination. The task of the court is not to decide where to draw the line, but to review the matter to ascertain whether the agency has made a reasonable choice.542 F.2d at 368-69.
Courts have generally used four factors to determine whether segmentation has been improper: (1) whether the segmented project has logical termini; (2) whether the supposed "segment" has substantial independent utility; (3) whether construction of the supposed independent "segment" will foreclose other alternatives for other projects; and (4) whether construction of the supposed "segment" will irretrievably commit federal money to closely related projects. See Swain v. Brinegar, 542 F.2d at 369-70; accord, e.g., Utahns for Better Transportation v. United States Dep't of Transportation, 305 F.3d 1152, 1182-84 (10th Cir. 2002); Save Barton Creek, 950 F.2d at 1139-40; Village of Los Ranchos, 906 F.2d at 1483; Stewart Park and Reserve Coalition, Inc. v. Slater, — F. Supp.2d ___, ___, 2002 WL 31163861, *9-10 (N.D.N.Y. Sept. 30, 2002); Brewery District Society v. Federal Highway Admin., 211 F. Supp.2d 902, 912-13 (S.D.Ohio 2002); Burkholder v. Wykle, 2002 U.S. Dist. LEXIS 4850, *31-32 (N.D.Ohio. February 22, 2002); see also 23 C.F.R. § 771.111(f) (the evaluated proposal shall "(1) Connect logical termini . . .; (2) Have independent utility or independent significance, i.e., be usable and be a reasonable expenditure even if no additional transportation improvements in the area are made; and (3) Not restrict consideration of alternatives for other reasonably foreseeable transportation improvements"); 40 C.F.R. § 1502.2(f) ("Agencies shall not commit resources prejudicing selection of alternatives before making a final decision"); 40 C.F.R. § 1506.1(c) (while agency is preparing environmental impact statement, no other federal action may be taken unless it can be independently justified, has its own environmental impact statement, and will not limit alternatives in subsequent projects).
In light of these factors, the court must consider the history of the Third Street project and its intended purpose and design in considerable detail. In light of some evidence presented, however, the court also notes what is not at issue in this case. First, this court does not have the power, the duty, or the expertise to choose the best solution for Goshen's traffic problems. Second, this court also does not have the power, the duty, or the expertise to decide how best to balance historic preservation interests against the various alternatives for addressing Goshen's traffic problems.
The City of Goshen offered substantial evidence to the effect that, notwithstanding opposition to the Third Street project and the widening of Madison Street east of Main, other alternatives pose more serious problems in terms of effects on the historic district and on the economic viability of downtown commerce in Goshen. Mayor Kauffman summarized those views. Tr. 142-44.
The court's task is to decide plaintiffs' motion for a preliminary injunction, which requires the court to decide whether plaintiffs have shown that the defendants have probably violated NEPA, the NHPA and/or the Transportation Act by trying to transform a "segment" of a genuinely federal project into a small local project for the purpose of avoiding compliance with those federal laws.
Chronology and Geography "Segmentation" cases are especially fact-sensitive. Accordingly, the court traces in detail the relevant events. Also, the geography and geometry of downtown Goshen and its principal roads are critical to this case, and the court must describe them in some detail. For clarity, a map of downtown Goshen (taken from Exhibit 51) is attached as Appendix A to this Entry.
The Goshen Historic District was listed on the National Register of Historic Places in 1983. The historic district includes about 45 city blocks and is the largest intact historic district in Indiana. The historic district includes both commercial and residential areas both east and west of Main Street. The historic district includes the entire segment of Third Street and Madison Street that is in dispute in this case, as well as the relevant portions of Main Street. U.S. Highway 33 and Indiana State Road 15 intersect in downtown Goshen.
Mayor Kauffman lives in the Goshen Historic District himself, and he was born and raised there. He has a strong record in support of historic preservation, as plaintiffs themselves have acknowledged. For example, the Carnegie Library has been adapted for use by the mayor, the clerk, and the treasurer as office space, and there is an effort underway to reuse the old Goshen High School.
As shown on Appendix A, the streets in downtown Goshen are laid out in a grid.
Main Street runs north-south with two lanes of traffic in each direction. Third Street is one block west of Main Street. It also runs north-south, but traffic currently runs only one way south in two lanes. Fifth Street is one block east of Main Street and also runs north-south, but traffic currently runs only one way north. Pike Street runs east-west at the northern edge of downtown Goshen and intersects with Third, Main, and Fifth. U.S. 33 enters downtown Goshen from the west on Pike Street.
State Road 15 enters downtown Goshen from the north on a railroad overpass that empties into Third Street just north of Pike. At the intersection of Pike and Third, U.S. 33 and State Road 15 join together and run east for one block on Pike, then turn south on Main Street for five blocks. At the intersection of Main and Madison, which runs east-west, the two highways separate again.
State Road 15 continues south on Main Street. U.S. 33 turns east on Madison for six or seven blocks before turning southeast near Goshen High School. East of Main Street, U.S. 33 has only one lane in each direction on Madison.
The two highways carry a considerable volume of truck traffic through downtown Goshen. Congestion is a problem in downtown Goshen for both local and through-traffic. Also, trucks and other through-traffic along the two highways must make several tight 90-degree turns to travel through the city. Mayor Kauffman is one of many city leaders who believe that Goshen would be better off as a whole if that traffic could be routed off of Main Street.
Among other traffic issues, the segment of U.S. 33 that runs along Madison Street is two lanes, and that segment also gets congested and slow. For years, INDOT and FHWA have looked at improvements and alternatives to U.S. 33. In 1992, INDOT "programmed" improvements for U.S. 33. When a project has been "programmed," it has been listed in the Indiana transportation improvement program. Once listed or "programmed" in the state's transportation improvement program, the project is determined to be proposed for federal funding. Tr. 110.
In August 1996, the City of Goshen adopted a "Thoroughfare Plan," which is a comprehensive long-term plan for Goshen's streets and roads. Goshen's Thoroughfare Plan recognized that INDOT planned to reconstruct U.S. 33 east of Main Street. Ex. 74 at 58 (Table 3, listing "Madison St./Lincolnway Ave. Reconstruction" as a project programmed for completion within next four years).
The Thoroughfare Plan considered a number of alternatives, especially for downtown traffic. The best alternative identified in the plan, and the top priority for new improvements, was the plan in dispute here, to widen and improve Third Street:
Of the alternative scenarios investigated, the re-configuration of Third Street to a two-way roadway between Pike and Madison Street resulted in the main traffic flow adjacent to Main Street but not within the residential areas to the east of Main Street. The Third Street reconfiguration has the advantage of reducing excessive turning movements of traffic in the downtown area. The existing configuration of U.S. 33 and S.R. 15 on Main Street requires through traffic to make two major turning maneuvers at intersections. This characteristic restricts capacity as traffic volumes increase. These turning maneuvers will occur at the intersections of Pike St./Third St., Pike St./Main St., and Main St./Madison St. The reconfiguration of Third Street would reduce the heavy turning movements at two intersections (Pike St./Third St. and Main St./Madison St.) and foster better traffic progression. A horizontal curve can be constructed on Third Street in the vicinity of Madison Street to promote free-flowing operation and eliminate the need of a traffic signal at the Third Street/Madison Street intersection.
Ex. 74 at 50; see also id. at 59 (listing Third Street improvements as city's first proposed future project).
On September 24, 1996, a month after adoption of the Thoroughfare Plan, Goshen's city engineer issued a Request for Proposals for consulting services to develop construction plans and related documents for widening Third Street from Pike to Madison from its present width of 38 feet to establish five traffic lanes and to build a sweeping curve from southbound Third Street to eastbound Madison Street (which would require removal of seven houses). Ex. 63. The Request for Proposal stated that the engineering services would be funded with only local funds, without using federal assistance. However, the Request for Proposal also indicated that the design should be done so that the project would be "eligible for use of Federal-Aid funding for construction as administered by INDOT." Id.
The City of Goshen contracted with the Wightman Petrie consulting firm for the design work on the proposed Third Street project. City officials instructed Wightman Petrie to design the improved roadway so that it would meet any applicable standards for federal and state highways. If the project met those standards, it would be possible, with approval of INDOT and the FHWA, to shift both U.S. 33 and State Road 15 away from Main Street onto the new and improved Third Street. In fact, Wightman Petrie president Ken Jones testified that city officials told him to design Third Street to meet those standards as if it were to be redesignated. Tr. 204.
Also in November 1996, INDOT was seeking consulting services to help analyze five alternatives for improving U.S. 33 through Goshen. See Ex. 93. As early as November 8, 1996, INDOT had already separated the U.S. 33 project into two projects, and it was considering breaking the project down into three projects: "the downtown piece is separate." Ex. 93 (agenda).
In April 1997, Mayor Kauffman took office as mayor. He made the Third Street project a priority. On August 5, 1997, Mayor Kauffman wrote to INDOT about the relationship between Third Street and INDOT's U.S. 33 project. Ex. 1. Mayor Kauffman explained that Goshen's Thoroughfare Plan recommended that Third Street be widened from Pike Street south to Madison Street, and Madison Street east to Main Street, where Madison becomes U.S. 33. He described the city's planned improvement, including the sweeping turn:
The curve has been incorporated into the design to accommodate easier movement for trucks. Truck traffic has a difficult time making turns throughout the city due to the small turning radii at intersections.
From our discussions, we would like to suggest that this Third Street route become the designated U.S. 33 route. By changing this designation, the traffic, especially truck traffic, could move easier through the city.
Ex. 1. Mayor Kauffman also proposed that the Third Street project be extended east along Madison, with the city paying for design engineering if INDOT would fund right-of-way acquisition and construction costs. Id. Exhibit 1 is important as the first document explaining the logic of linking the Third Street project to INDOT's U.S. 33 project. Also, Mayor Kauffman authorized adding the Third Street project to MACOG's transportation improvement plan for federal funding. Tr. 64.
MACOG is the acronym for the Michiana Area Council of Governments, a regional metropolitan planning organization that is in charge of developing and coordinating transportation plans in several counties. It receives funding from the federal government. Tr. 106-07.
The evidence indicates that Mayor Kauffman's proposal had an immediate effect on INDOT's planning. On July 17, 1997, INDOT had issued a "Request for Traffic Projections" for alternatives for the U.S. 33 project. Ex. 94. On September 11, 1997, just a few weeks after Mayor Kauffman's request, INDOT issued an "addendum" to that request to add traffic projections for U.S. 33 and State Road 15 from Madison Street to Pike Street. The addendum sought traffic projections for alternatives that included shifting both U.S. 33 and State Road 15 from Main Street over to Third Street, with Main Street to be relinquished to the City of Goshen. Id.
The consulting firm of Pflum Klausmeier Gehrum ("PKG") won the INDOT contract and developed the traffic projections, which were submitted on October 23, 1997. Ex. 100. The PKG report divided the work into the "South Project," described as "US 33 from Main Street east to County Rd. 40," and the "North Project," described as "US 33/SR 15 (Main St.) and 3rd St. from Madison St. to Pike St.," thus including the current Third Street project within INDOT's "North Project." PKG was paid with federal funds to carry out the traffic projections.
INDOT and Goshen continued discussions regarding Third Street and the U.S. 33 project. FHWA was also a party to the discussions. On January 21, 1998, a meeting was held with representatives from INDOT, the FHWA, Goshen, MACOG, and the Wightman Petrie consulting firm that was working for the city.
Ex. 22 (meeting minutes prepared by INDOT). In that meeting, the city's Third Street project was still considered separate, at least for the time being, though the connections were obvious to all. After describing the city's Third Street project, the minutes noted:
. . . City of Goshen would like INDOT to relinquish Main Street to the city and take over Third Street as part of the State System. U.S. 33 and S.R. 15 will be relocated along Third Street. Goshen made an offer to design the Madison Street project and to purchase any necessary right-of-way for the project, if INDOT would pay for the construction of Third Street. INDOT suggested to Goshen to send a proposal with Mayor signature to Fort Wayne District and Division of Planning with their offer in order to begin the negotiating process. Any agreement shall require the approval of the INDOT Executive Office. At this time, INDOT and Goshen shall continue to develop their projects separately until the agreement has been negotiated.
Ex. 22.
In early February 1998, INDOT and city officials held a public meeting to discuss the projects. After the meeting, Mayor Kauffman wrote to INDOT's deputy commissioner, who also attended the meeting. Ex. 2. The letter indicates that opposition was vocal at that meeting. The mayor's letter downplayed the opposition and argued in favor of the plans. He acknowledged that, if INDOT were persuaded not to widen U.S. 33 along Madison Street, the city's Third Street project "makes less sense." Id.
Mayor Kauffman also discussed in his letter to INDOT's deputy commissioner his proposed swap of Main Street for Third Street:
My administration is committed to implement as much of the Thoroughfare Plan as can be afforded. That is a large part of the reason [INDOT district director] John Passey will be bringing INDOT officials in Indianapolis a request from Goshen that the State assume our Third Street project as a natural extension of your Madison/US 33 project. We understand that the only way that could happen is that the streets that currently carry U.S. 33 and SR 15 would be relinquished in their present condition to local control. If INDOT is agreeable to this, it allows the federal/local resources currently reserved for Third Street to be applied to the peripheral roads. This benefits INDOT by decreasing traffic on through-town routes.
Ex. 2. Mayor Kauffman testified that when he wrote this letter to INDOT, he knew that INDOT's preferred alternative for the U.S. 33 project was to widen U.S. 33 along its present route of Madison Street east of Main. Tr. 74 ("the preferred alternate at the time coordinated with our Third Street project and enhanced our Third Street project").
The next business day, Mayor Kauffman elaborated on these points in a letter to INDOT's Passey urging INDOT to swap Main Street for Third Street, assuming that the city's proposed improvements to Third Street would be made:
INDOT cannot justify a favorable response to this request unless there is benefit to both the Department and its customers. A primary consideration is, of course, how traffic flows through the urbanized corridor in Goshen. The requested re-designation of routes reduces turning movements of traffic, which greatly benefits commercial traffic especially. Thus INDOT's customers are moved quicker, easier, and with reduced negative impact on air quality.
* * *
Taking over the Third/Madison project is that it is [sic] a natural extension of INDOT's Madison/US 33 project. If one looks at how these routes flow after re-designation, they appear much more logical than those now followed.
It is important that the two projects be coordinated. Since the new Third/Madison Street intersection with Main Street is placed to the north of its present lineup with Madison/US 33, it makes no sense to construct one leg of the intersection significantly before the other.
A few days later, INDOT's Passey wrote to INDOT's deputy commissioner Klika that he agreed with Mayor Kauffman. Ex. 18 (stipulated as to authenticity and admissibility, but not mentioned during hearing). Passey agreed that Goshen's Third Street project and INDOT's U.S. 33 project "should be developed and constructed concurrently." He added: "If the Third Street project is constructed as planned, both U.S. 33 and SR 15 should be re-routed over Third Street. This would have the benefit of eliminating the complex turns on Pike Street and aligning SR 15 with Third Street over the railroad bridge."
Later in 1998, the City of Goshen began consultations with the Indiana Department of Natural Resources ("DNR") regarding historic preservation issues under Section 106 of the National Historic Preservation Act, 16 U.S.C. § 470f.
These consultations are reflected in Exhibit 32, a September 8, 1998 letter from Wightman Petrie to DNR Commissioner Larry D. Macklin. (By virtue of his office, Macklin was then the "State Historic Preservation Officer" or "SHPO" under federal law.) In early consultations, which had included a tour of the historic district, DNR had taken the view that Third Street should not be widened.
Wightman Petrie responded with a detailed explanation of the advantages of the Third Street plan as compared to other proposed alternatives for addressing traffic problems in downtown Goshen. Wightman Petrie argued, apparently with substantial reason, that other proposed solutions were likely to cause greater negative effects on the Goshen Historic District.
The Wightman Petrie explanation shows that the Third Street plan makes most sense on the assumption that U.S. 33 and State Road 15 would be shifted from Main Street to Third Street. For example, Wightman Petrie emphasized the awkward and slow turns that through-traffic, and especially large trucks, must make to follow the existing routes of U.S. 33 and State Road 15 through downtown Goshen. Ex. 32 at 2-3. Wightman Petrie also emphasized the importance of the location of the railroad overpass on State Road 15 just north of downtown: "This overpass is directly aligned with the 3rd Street corridor, and thus 3rd Street becomes the route which is needed for the relief of Main Street and the avoiding of all the turning by non-local traffic at the Main Street and Pike Street intersection. In order for INDOT to be able to redesignate both S.R. 15 and U.S. 33 onto 3rd Street, the routes must eventually connect to U.S. 33 to the east of the City, while also minimizing the impact to the grid pattern." Id. at 3. The Wightman Petrie letter also stated: "The City of Goshen and INDOT officials are preparing to share the traffic of S.R. 15 and U.S. 33 on Main Street and Third Streets." Id. at 1.
DNR's Macklin responded to Wightman Petrie in a letter dated October 29, 1998. Ex. 17. Based on the consultations undertaken to comply with Section 106 of the National Historic Preservation Act, Macklin, acting in his capacity as State Historic Preservation Officer, concluded that Third Street should not be widened. He proposed instead that two additional travel lanes could be established within the existing curb lines by eliminating on-street parking.
Actually, the letter was signed for Macklin by John Costello, another DNR official, but there is no indication that Costello acted without proper authority.
Macklin did not object to demolishing seven buildings to accommodate the sweeping turn from Third Street to Madison Street, so long as those buildings were documented and photographed for appropriate repositories of historic information. DNR and Macklin did not receive any response to this letter until March 15, 2000, nearly eighteen months later. The response is Exhibit 35, discussed below.
Further consultations continued between the City of Goshen and INDOT on the U.S. 33 project and the Third Street project. On June 14, 1999, Mayor Kauffman wrote to INDOT's Christine Baynes. Ex. 8. Mayor Kauffman formally requested that INDOT "participate with the City of Goshen in the costs of reconstructing Third Street." The mayor explained: "We believe that the Third Street project is a natural extension of the US33 project through downtown Goshen. In fact, history will show that when the SR15 overpass was built, the intent was to move state road designation to Third Street. We request that INDOT incorporate this project into plans to improve US33." Id. He repeated his earlier proposal to share costs and to swap state and local jurisdiction over Main Street and Third Street.
INDOT's Daniel Buck wrote an internal e-mail on June 28, 1999 regarding the mayor's swap idea. He concluded:
It makes sense for INDOT to swap Main Street for 3rd Street after it is built as a local road. At all the local public meetings, the Mayor and INDOT have made it clear this is a local project, not an INDOT project. If we were to take it over now and fund it as an INDOT project, we would be open to severe criticism that we had mislead [sic] the public in the previous meetings.
If we swap the roads, we should not do it until after the project is constructed with local funds. Once built with local financing, we could take it into our system as a straight swap.
Ex. 105 (emphasis added). Buck was not a decision-maker on this issue, and his next communication was more formal and less candid about the possibility of a future swap. On July 15, 1999, Buck wrote to INDOT's deputy commissioner for planning and recommended against making the swap, but with one important qualifier: "If INDOT were to fund and build the project now, it would open us up to claims of misleading the public." Ex. 111 (emphasis added).
Buck's July 15, 1999 memorandum did not explicitly address the possibility he had suggested earlier — waiting until after Goshen built the Third Street project before making the swap.
The record before the court does not indicate that INDOT has ever formally or finally declined the mayor's proposal for a swap. INDOT's Christine Baynes testified that INDOT made a "final decision" in July or August of 1999 to deny the city's request to redesignate the highways. Tr. 349. The court does not find that testimony credible, especially in light of later discussions described below, which included Baynes.
On March 15, 2000, Wightman Petrie finally responded to the October 28, 1998 letter from DNR's Macklin proposing that the Third Street project be revised to protect the historic district by not widening the street. Wightman Petrie argued that the narrower road proposed by Macklin would "conflict with the applicable State and Federal road design standards and requirements for the proposed route." Ex. 35 at 2.
The Wightman Petrie response shows plainly that the value and usefulness of the Third Street project depend on having Third Street become both U.S. 33 and State Road 15:
Your 10/29/98 letter aptly states the project's purposes on page 1 as "essentially to increase the capacity of Third St. to accommodate more traffic and relieve congestion on Main St.," and "other interests include maintaining a healthy business center and safety issues.
With these purposes in mind, and considering that the relieving of congestion at Main St. can only be achieved by the changing of the U.S. 33 and S.R. 15 designation away from the Main St. route, the road design for this multiple lane, urban arterial route must follow the guidelines of the "Indiana Department of Transportation Road Design Manual," (as approved and required by the Federal Highway Administration).
Ex. 35 at 2 (emphasis added). Wightman Petrie then explained the details of those requirements, which require wider traffic lanes than the present curb width would allow.
Wightman Petrie then emphasized the link between the Third Street project and the state highways: "Again, it is essential to keep in mind that the critical goal of improved traffic capacity for Goshen cannot be achieved without the designating of the realigned Third Street corridor as U.S. 33 and S.R. 15." Ex. 35 at 3 (emphasis added). Wightman Petrie concluded by rejecting Macklin's proposed conditions and proposing instead that DNR agree to the city's preferred plan with minor cosmetic changes. See id. at 8-9.
DNR responded on May 10, 2000 in a letter to Wightman Petrie (with copies to the FHWA, INDOT, the mayor, numerous agencies, and many other interested parties) proposing a "consultation meeting." Ex. 36. DNR treated the Third Street project and the U.S. 33 project as two segments of the same project:
A copy of this letter is also being sent to the INDOT to assist with the Madison segment of the project. Since our letter of November 10, 1999, additional parties above have expressed interest in both segments of the project. As a result, INDOT can also refer to the above list of interested parties in order to supplement its original list of consulting parties for the Madison Street segment of the project.
Ex. 36 at 2. DNR recognized the close linkages:
Due to the complexity of this segment of the project, the issues raised in your recent letter, and the number of agencies, organizations, and individuals having interest and jurisdiction in the project, we recommend that a consultation meeting be organized. In order for this to happen, the City of Goshen needs to obtain a finding of effect from FHWA, who may officially make a finding of effect. Afterwards, the City of Goshen with FHWA could arrange a consultation meeting for all interested parties. At that time, FHWA may also notify the Advisory Council on Historic Preservation of the effects. We urge FHWA and City of Goshen to arrange one meeting in which both the Third Street segment noted above and the U.S. 33 modification would be handled, even if they were to be discussed separately. Both segments involve similar issues, the same agencies, and the same interested parties. As a result, we can avoid a duplication of efforts and come to a quick resolution on both segments of the project.
Ex. 36 at 2.
After this correspondence, a meeting was arranged for June 28, 2000 including officials from FHWA, INDOT, the City of Goshen, MACOG, and Wightman Petrie. (DNR and historic preservation groups were not included, though, of course, they were not required to be.)
On June 6, 2000, before the meeting, Mayor Kauffman and Wightman Petrie provided information to the FHWA through Sandra Seanor of MACOG. Ex. 45.
They identified as advantages of the Third Street project: "Includes redesignation of U.S. 33 and S.R. 15 away from downtown Main Street historical area while providing traffic capacity for motorists and trucks on those routes." Also, the project "[m]akes a smooth and logical connection with the existing S.R. 15 overpass just north of Pike Street and thus relocates existing congested turning movements . . .," and is "a logical and efficient extension of the widened U.S. 33 roadway, which is the preferred option of INDOT for needed traffic capacity increase on U.S. 33 south of Goshen." The project also "[r]elocates the intersection of U.S. 33/S.R. 15 and S.R. 4 (currently at Main Street/Lincoln Avenue), away from Main Street, thus greatly reducing traffic turning movements (including significant truck traffic) onto Main Street."
Another listed advantage was that the Third Street project "[a]llows for needed proactive improvements as soon as possible with an established project on the INDOT program for Federal Aid funding eligibility as well as in compliance with traffic study needs. . . ." Ex. 45. Attached was a list of "local federal aid projects" in Elkhart County, including the Third Street project indicating a federal share of $2.5 million and a local amount of $625,000.
Also before the June 28th meeting, FHWA's Larry Heil sent an e-mail to two other FHWA officials to notify them of the meeting and to prepare them for it. Heil wrote:
As you know, the local 3rd Street Project and the State U.S. 33 Project are currently being developed as separate EAs [Environmental Assessments under NEPA]. The intent is that upon completion, the existing U.S. 33 route designation may be shifted over to 3rd Street. Given the extensive controversy, and the associated [NHPA §] 106 issues, [MACOG's Sandy Seanor] wanted to bring FHWA, INDOT, and the City of Goshen and their Consultant together to discuss how best to proceed. The SHPO has requested that the Section 106 Consultation be accomplished for both projects at the same time. FHWA needs to look at the merits, and determine if the two projects should be advanced as one EA. Given the controversial history of this project, I have asked that Robert also participate in the meeting.
Ex. 53 (emphasis added). Heil's statement in June 2000 that such a redesignation might occur after completion of the Third Street project is an important part of the evidence undermining the testimony by INDOT's Baynes that INDOT made a "final decision" in the summer of 1999 to reject the city's request for redesignation. (FHWA's Heil had been in frequent contact with INDOT's Baynes regarding the Goshen projects.)
Heil sent copies of the e-mail to INDOT's Jim Juricic and MACOG's Sandy Seanor, as well as Chris Andrews, who appears to have been INDOT's person responsible for consultation under § 106 of the NHPA. See Ex. 9.
The minutes of the June 28th meeting provide a detailed and credible summary of the discussion. The meeting is critical to the segmentation issue here, for the participants were anticipating and planning for judicial review of their decisions regarding the Third Street project. Ex. 9.
The minutes were prepared by Ken Jones, the president of Wightman Petrie. Defendants made some half-hearted attempts at the hearing to undermine the accuracy and credibility of the minutes, but the attempts were not persuasive. The participants are experienced government officials who understood the importance of accurate minutes, especially when the meeting participants were already anticipating the possibility of litigation over their decisions.
FHWA's Val Straumins explained that the several road projects, including the Third Street project and the U.S. 33 project were "closely interdependent," and that "the buck stops on his desk" regarding environmental and historic impacts.
FHWA's Heil noted that the Third Street project and U.S. 33 projects had been considered independent, but Straumins "re-stated that all of the documents need to be tied together by a single report." Heil stated that the Third Street project "does have some independent utility," but also stated: "His concern is that, now, if one of the projects proceed independently that a case could be made that the authorities are making a segmented decision." Ex. 9 at 2. Heil then asked the key question: "should the environmental document be done as one project?" Mayor Kauffman responded that the city "has never hidden their desire to move the State Highway designation."
In an apparent effort to argue for independence, the city's Bob McCoige asserted that the Third Street project had begun in 1996 before INDOT had announced the U.S. 33 plan. (However, as noted above, the Thoroughfare Plan took into account the U.S. 33 plan and linked it to the Third Street project.)
Regarding the linkage between the two projects, FHWA's Straumins "stated that the truck traffic is what ties the projects together," and he asked whether re-routing State Road 15 and U.S. 33 was a priority.
After further discussion of the projects' needs and purposes, FHWA's Heil "stated that he believed that the interdependence of the projects will likely require that they be combined into a single environmental document." Ex. 9 at 3.
Straumins, INDOT's Baynes, and the city's McCoige then discussed the possibility of routing U.S. 33 away from the historic district, using the so-called "north connector" that would run along the northeast side of the downtown area close to the railroad tracks. See App. A. The north connector was an alternative to widening Madison Street to establish four lanes for U.S. 33.
In a critical comment on segmentation involving the Third Street project, FHWA's Heil stated: "we could not make a case for independent utility and that the request for 106 consultation had been made and now must be responded to.
Heil further stated [presciently, as it turned out] continuing to proceed under two environmental documents will bring much more nationwide attention to bear (i.e. the National trust and similar groups)." Heil then stated INDOT would need to make a decision on the question and ask FHWA for concurrence, which might require INDOT "to make a formal statement as to how they view the jurisdiction transfer of Main Street," meaning the redesignation of Third Street as U.S. 33 and State Road 15. Ex. 9 at 4.
The court interprets the reference as being to the National Trust for Historic Preservation.
From that point in the meeting, the minutes state:
Rick Pharis [Elkhart County Highway] reminded the group that the district director [of INDOT] supports that move.
Val Straumins [FHWA] stated that this decision must be made prior to discussion with FHWA.
Sandra Seanor [MACOG] re-stated that INDOT must make a decision regarding the State Highway transfer.
Chris Baynes [INDOT] stated that if INDOT decides to combine the routes a single E.A. makes sense.
Bob McCoige [Goshen] mentioned that the purpose of the Third Street project is to move traffic thru [sic] town, so you could make a case for independent utility for both Third Street and Madison Street. But agreed that a combined E.A. would be a cleaner method to reach the same result.
Chris Baynes reminded that the national parks and the national trust could delay the projects but they really cannot stop them.
Larry Heil agreed with this statement.
Ex. 9 at 4-5.
At that point, the conversation turned toward an option critical to the segmentation issue: "Bob McCoige asked if we should proceed then change state routes later." In other words, the city's McCoige was suggesting that the government agencies go forward as if the projects were separate, with the explicit or implicit understanding that the state routes would be changed later so that Third Street would become U.S. 33 and State Road 15.
INDOT's Baynes responded to this suggestion by asking "if it would help if INDOT stated they are considering this but this will remain unanswered until completion of the E.A." Ex. 9 at 5. The meeting ended with INDOT's Baynes' commitment to discuss the redesignation issue with "the director" and to report back to FHWA and Goshen.
This meeting, in which INDOT was represented by Baynes, occurred nearly a year after what Baynes testified was a "final decision" by INDOT to reject the city's request to redesignate U.S. 33 and State Road 15 to follow Third Street. See Tr. 349. As discussed below, the court believes on the present record that INDOT and the other agencies have tacitly agreed to take exactly this approach — allow Goshen to build the Third Street project with only local funds, then complete the swap of Main Street and Third Street and the redesignation of U.S. 33 and State Road 15 after the project has been completed.
The evidence convinces the court that INDOT still has not taken an explicit and definitive position on redesignation. A definite yes would demonstrate both the linkage between the Third Street project and the U.S. 33 project and the need to comply with federal environmental and historic preservation law. A definite no would not make sense and is likely to be contradicted after the Third Street project is completed and a final decision is made on the U.S. 33 route.
Baynes' testimony to the contrary, see Tr. 350, 368-69, 371-72, is not credible and is undermined by all of this planning done in 2000. And even Baynes had to admit that things could change in the future. Any witness would have to admit as much, but the point is relevant here because the pressures in that direction are likely to be very strong if the Third Street project is completed.
On this issue, the mayor was asked whether INDOT had ever said yes. He was not asked whether INDOT had definitively rejected the idea of redesignation. Tr. 148-49. The mayor also testified that it would of course be possible for INDOT to redesignate the highway routes in the future, such as after the Third Street project is completed, without having to go through the environmental and historic impact review. See Tr. 88. Such a future designation would also be helpful to the city, which, as part of its overall plan for downtown traffic, would like to implement traffic "calming" measures on Main Street. Tr. 166. Those measures would slow traffic down, but the city may not implement them as long as Main Street is also State Road 15 and/or U.S. 33.
Two weeks after the June 28, 2000 meeting, FHWA's Val Straumins wrote to James Malcolm, a resident of Third Street and prominent and outspoken opponent of the Third Street project. Straumins told Malcolm that the FHWA had authorized the City of Goshen and INDOT and their consultants to initiate the Section 106 consultation process. Straumins wrote: "At this time there has been no indication by the City or INDOT that these projects could be combined to address the Section 106 requirements nor has the INDOT indicated that they are considering routing SR 15 and U.S. 33 on the reconstructed portion of Third Street." Ex. 88 (letter of July 10, 2000). Of course, precisely these options had been discussed in the meeting of June 28, 2000. Straumins indicated that Malcolm would be considered a consulting party for both the U.S. 33 project and the Third Street project.
Through the rest of 2000, INDOT, FHWA, and city officials began working on the combined environmental/historic impact document for U.S. 33 and Third Street. The next major event was a public meeting on February 15, 2001 at a middle school in Goshen where officials from INDOT, the FHWA, and the City of Goshen appeared to provide information to interested residents. The invitation to the meeting identified four purposes: (1) to explain NEPA as it related to the Third Street and U.S. 33 projects; (2) to explain how a person could become a "consulting party" under NEPA; (3) to explain why the two projects were being combined in one environmental document but would "still remain independent"; and (4) to invite the public to express concerns about the projects. Ex. 51.
For the remainder of 2001, there is little evidence in the record as to what occurred, except that a number of interested Goshen residents were either advised of the review process or advised that they had been recognized as "consulting parties" for the NEPA and NHPA review of both the U.S. 33 project and the Third Street project. See Exs. 48, 50, 87.
At some point, probably in late 2001 or early 2002, MACOG's Sandy Seanor met with Mayor Kauffman and the city's Bob McCoige to talk about road construction priorities for available federal funds. Seanor was concerned that the Third Street project was not moving forward and about the possibility of losing available federal funds, which could be shifted to some other project that was ready for actual construction. Seanor's concern was based on the 2003 expiration of the six-year legislation authorizing federal expenditures. However, this explanation does not provide a convincing rationale for the city's rush to complete Third Street separately from construction of the U.S. 33 project. It is highly unlikely that federal funds would not be available for construction after the end of federal fiscal year 2003.
In January 2002, the City of Goshen advised INDOT that it was considering whether to go forward with the Third Street project using only city funds. Tr. 350.
On February 22, 2002, FHWA's Matt Fuller wrote to Phyllis Stutzman of the newly-formed Old Town Neighborhood Association. The FHWA asserted that the city was not then required to seek federal funds for the Third Street project or to comply with Section106 if it chose to complete the Third Street project without federal funds. The FHWA also asserted: "INDOT is on record as declining to accept ownership of 3rd Street and re-sign it as U.S. 33 . . . ." Compl. Ex. B at 4.
It is not clear at this point where INDOT was "on record" to that effect.
On February 25, 2002, Baynes sent an e-mail to FHWA's Larry Heil stating that Goshen's McCoige had said the city would know by March 5, 2002 whether it would proceed with only local funds. Ex. 47.
On March 5, 2002, the Goshen City Council voted to go forward with the Third Street project using only local funds. Two days later, Mayor Kauffman wrote to Commissioner Bryan Nicol of INDOT informing him of the city's decision:
INDOT has been contemplating a US33 improvement project in Goshen since at least 1997. Goshen has planned for a Madison/Third Street improvement project since 1996. The two projects meet at a downtown intersection.
Since both projects contemplated using federal funds, and since the projects were contiguous both physically and in time of development, Federal Highways preferred to have one environmental document developed covering both projects. The City of Goshen and INDOT agreed to proceed according to Federal Highways' preference, with INDOT being the party responsible to develop the document.
Early coordination letters have not yet been mailed to Consulting Partners. No federal money has been spent to date on our local project. Though it is in our Metropolitan Planning Organization's (MACOG) Transportation Improvement Plan, we agreed to let MACOG divert the federal funds that had been committed to our local project to an Elkhart County project that was ready for construction. Because of the environmental document, our project was delayed long enough that the federal funds would have been forfeited had they not been reassigned.
Tuesday, March 5, our City Council voted to approve the City of Goshen using Economic Development Income Taxes for our project in lieu of federal funds. On Wednesday, March 6, our City Engineer and I met with Clem Ligocki, Brad Steckler, and Larry [Heil] to discuss our intention to proceed with our project, separating it from the INDOT environmental review process. This letter serves as the official notification of that intent.
We look forward to continuing a positive partnership with INDOT on the US33 project.
Thus, the Mayor's letter attributed the decision to the delays caused by the federal environmental review process. The separation of the projects was intended to separate the Third Street project "from the INDOT environmental review process," which was also the federal process for reviewing historic impacts.
In the wake of this decision, the new Indiana State Historic Preservation Officer (DNR Director John R. Goss had replaced Macklin) informed the Old Town Neighborhood Association that DNR would not provide any further assistance regarding the Third Street project because no federal or state funds had been used on the project. Ex. 67 (letter of April 15, 2002).
After the March 2002 decision, the City of Goshen instructed Wightman Petrie to prepare a final engineering design and drawings for construction of the Third Street project, and to do so on an unusually fast schedule. Tr. 216. There is no evidence that the city considered asking Wightman Petrie to use the narrower design proposed by DNR, which would have rendered the project ineligible for redesignation as U.S. 33 and State Road 15. In July 2002 the City of Goshen solicited bids for construction of the Third Street project. The winning bidder was Selge Construction Company, which planned to begin construction in September 2002, continuing over the winter as weather permitted, with the project complete by June 30, 2003. Ex. 43.
On August 19, 2002, counsel for plaintiffs wrote to Mayor Kauffman, INDOT Commissioner Nicol, and FHWA's Baxter and threatened legal action if the city proceeded with the Third Street project without complying with Section 106 of the NHPA. Compl. Ex. B. Counsel's letter reviewed the history of the project and asserted that a local government cannot avoid the requirements of federal law by taking over and constructing part of a federal project. Id. at 2, citing Brewery District Society v. Federal Highway Admin., 211 F. Supp.2d 902 (S.D.Ohio 2002), and the minutes of the June 28, 2000 meeting. The letter advised the defendants of the possibility of a lawsuit if construction proceeded without first complying with Section 106.
The City of Goshen did not respond to plaintiffs' letter but began construction about three weeks later. Construction started initially with the removal of existing pavement on the northern two blocks of Third Street, from Pike Street south to Lincoln Street. Plaintiffs filed this action on October 1, 2002 and sought injunctive relief.
On the issue of substantial independent utility of the Third Street project, INDOT's Christine Baynes testified that the project had such independent utility because its purpose "was to carry local traffic." Tr. 353. That testimony is not credible; it was flatly contradicted by Goshen's Bob McCoige, who testified quite clearly, and consistently with the extensive documentary evidence, that the purpose was to divert traffic from Main Street, which is now U.S. 33 and State Road 15, including the heavy truck traffic, and that the sweeping curve was for that truck traffic. Tr. 309, 322, 294. (McCoige was also rather evasive on this topic at pages 325 and 326 of the transcript, but the documents belie his and Baynes' efforts to explain away the fact that the Third Street project was designed to become U.S. 33 and State Road 15.)
The city's Third Street project causes some problems for INDOT's U.S. 33 project. The wide curve straightens out at Madison Street just west of the intersection of Main and Madison. In acquiring additional right of way for the sweeping turn, the city chose not to acquire a bank building on the south side of Madison because of the cost of acquisition. As a result, the city plans to have the widened Madison enter the Main and Madison intersection at an offset, so that if no change is made to Madison east of Main (in the U.S. 33 project) traffic going either direction on Madison will have to jog to the right. This offset, shown in Exhibit 70, is addressed in more detail below.
In early 2002, at about the same time Goshen was deciding to build the Third Street project with its own local money, Goshen added a combined sewer overflow project to the Third Street project. Tr. 214 (Jones). That larger project is in its early stages of construction.
Discussion I. Likelihood of Success on the Merits
The court finds that plaintiffs have established a substantial likelihood of prevailing on their claim that the Third Street project has been improperly segmented from a larger federal project, with both the effect and purpose of the segmentation being to evade application of Section 106 of the NHPA, Section 4(f) of the Transportation Act, and NEPA.
The evidence shows that the U.S. 33 project has been a major federal undertaking since 1992, when it was "programmed" by INDOT. The City of Goshen decided to widen Third Street in 1996, when the city expected the U.S. 33 project to be built in the near future and expected the Third Street project to link with the U.S. 33 project at Madison and Main Streets, given that the widening of Madison Street was then INDOT's preferred alternative for improving U.S. 33.
From the outset, the city designed the Third Street project so that it would become the most natural and obvious route for U.S. 33 and State Road 15 through downtown, hoping and expecting that INDOT would see the obvious benefits of shifting the two highways away from Main Street and over to the improved Third Street. In the summer of 1997, shortly after Mayor Kauffman took office, he proposed exactly that shift of the highways, and at that time INDOT began studying and considering Third Street project as part of its alternatives for the U.S. 33 project. See Exs. 96-103. INDOT used federal funds to conduct those studies, though the amounts were not large by highway standards approximately $30,000 for the traffic studies of which the Third Street projections were a part. See Exs. 104-A to 104-G; Tr. 427-30 (Klausmeier testimony addressing a portion of the charges for the studies).
Further, FHWA, INDOT, and the city saw the two projects as so closely related that they tried the unprecedented effort of preparing one environmental and historic impact document for the two projects while still attempting to keep the projects formally separate. As the projects progressed, federal funds to construct the Third Street project were authorized and obligated in December 2001, though such funds have not been used and are not currently planned to be used for construction.
The Third Street project and the U.S. 33 project are physically linked, of course, and it was perfectly natural for the local, state, and federal governments to coordinate their planning for these efforts. The mere facts of the physical connection and the coordinated planning fall well short of what is needed to show improper segmentation. As the Tenth Circuit has observed in this context, "all local projects must start and end somewhere." Village of Los Ranchos de Albuquerque v. Barnhart, 906 F.2d 1477, 1483-84 (10th Cir. 1990) (rejecting segmentation claim). Similarly, the fact that a modest amount of federal funds was used in early studies related to the U.S. 33 project did not transform the Third Street project into a major federal undertaking. Compare Village of Los Ranchos, 906 F.2d at 1481 (preliminary involvement and funding of preliminary EIS work by FHWA did not transform project irrevocably into major federal undertaking), with Ross v. Federal Highway Admin., 162 F.3d 1046, 1052-53 (10th Cir. 1998) (project was too advanced to allow state to transform last segment into a purely local project by withdrawing federal funding), and Scottsdale Mall v. Indiana, 549 F.2d 484, 489-90 (7th Cir. 1977) (much more extensive funding through later stages of project rendered the project federal).
Nevertheless, those early traffic studies and their consideration of Third Street as one of the alternatives for the U.S. 33 project emphasize the close connections between the projects and the reasons to treat redesignation as a likely outcome here.
In this case, however, plaintiffs have shown much more that tends to show improper segmentation. First, and most important, the Third Street project has little independent utility — independent, that is, from the expected improvement of U.S. 33 by widening Madison Street east of Main Street. From the beginning, the Third Street project was built for the primary purpose of carrying most through-traffic through downtown Goshen without having that traffic use Main Street. The planning documents show that the city insisted that Third Street be designed so that it would qualify for designation as a state and federal highway.
The sweeping curve was specifically designed to make it easier for a large volume of trucks to go through Goshen. The planning documents also show that the city expected that such a shift of traffic would occur only if the two highway designations were shifted from Main Street to Third Street, and that the city's expectations on that point were both reasonable and obvious to INDOT and FHWA.
The city's adherence to this plan to shift the highway designations is apparent from its responses to DNR's concerns about historic impacts. DNR proposed that the Third Street project be modified to avoid widening the roadway.
The city responded, through its consultant, by saying that such a narrow roadway would not serve the purpose of the project because it would not qualify for designation as a state or federal highway. Ex. 35 at 2. At that time in March 2000, of course, the city was still coordinating its planning and was still seeking federal funding for the project. But after the city made its decision to use only local funds for this supposedly local project, at a time when INDOT purportedly had made a "final decision," according to Baynes, never to shift the highway designations, the city stuck to its original design for a route wide enough to qualify as a state and federal highway. There is no evidence that the city reconsidered the need for that wider design in 2002 after the project supposedly became a purely local project.
Moreover, the evidence shows that the city, state, and federal officials discussed precisely this scenario, in which the city might use local funds to build Third Street, and where INDOT and the city would then agree to swap Main Street and Third Street and to shift the highway designations to Third Street. Ex. 9 (minutes of June 28, 2000 meeting); Ex. 105 (INDOT internal e-mail proposing that Third Street be improved as local project, to be followed by swap).
The evidence also shows that such a shift of the highway designations makes a great deal of practical sense, at least in terms of addressing traffic problems in downtown Goshen. (The only caveat for that statement is that it would not make sense if INDOT later decides to shift U.S. 33 away from Madison altogether.) The existing routes for U.S. 33 and State Road 15 require one and two extra 90-degree turns, respectively, for through-traffic. Shifting the designations to Third Street and its new sweeping curve would require through-traffic on each highway to make only one 90-degree turn at a city intersection.
The court cannot say, of course, that the Third Street project would have zero independent utility. That is not the test, however. See Swain v. Brinegar, 542 F.2d 364, 369-70 (7th Cir. 1976) (en banc) (shorter local segments of new highway presumably would have had slight utility for local traffic, but not "substantial utility independent of future expansion"). The issue is whether the Third Street project has substantial independent utility, and the answer on this record is that it does not.
Further showing that the Third Street project is improper segmentation, its construction will tend to limit INDOT's and FHWA's options for the U.S. 33 project. First, the Third Street project was designed to link with the widened Madison Street, which was at the time INDOT's "preferred alternative" for improving U.S. 33. With the wider version of Third Street and its sweeping turn from south to east on Madison, the invitation to use the Madison Street alternative becomes significantly more attractive. Second, the Third Street project will impose significant restrictions on the details of the U.S. 33 project on the (reasonable) assumption that widening Madison Street will again turn out to be the preferred alternative. The city designed the curve from Third to Madison to avoid having to acquire an expensive bank building. The result is that the completed roadway will enter the Main and Madison intersection further north than might otherwise be preferable. To coordinate the intersection, the city's design of the Third Street project will put significant pressure on INDOT and FHWA to see that Madison is widened on the north side of the street so as to avoid forcing the Madison Street traffic to jog to the right as it passes Main Street.
As further evidence of improper segmentation, the record shows clearly that the city chose to try to pursue the Third Street project on its own precisely because the city did not want to subject its decision to the environmental and historic impact review that would otherwise be required. Mayor Kauffman's letter of March 7, 2002 to INDOT Commissioner Nicol made that purpose very plain. See Ex. 10.
In terms of the law of segmentation, suppose for purposes of argument that city, state, and federal officials had all recognized that U.S. 33 would be widened along Madison Street and that the improved Third Street should be redesignated as U.S. 33 and State Road 15 through downtown Goshen for all the reasons argued persuasively by Mayor Kauffman and Wightman Petrie. Suppose then that they all agreed that the environmental and historic impact review process would cause problems for the Third Street project. And then suppose that they agreed that the city should pay for and complete the Third Street improvements, following which the city and INDOT would agree to swap Third Street and Main Streets so that U.S. 33 and State Road 15 would then follow Third Street, which would link up with INDOT's and FHWA's eventual improvements to U.S. 33 along Madison Street. And finally, suppose that all agreed that no federal dollars would be used for the Third Street project.
Under this scenario, surely there can be no doubt that the agreement would violate NEPA, NHPA, and the Transportation Act as an improper "segmentation" of the Third Street portion of a larger federal undertaking, even though no federal dollars were spent directly on the Third Street segment. Such deliberate evasion of these federal laws by carefully carving up one project into smaller segments cannot and should not be tolerated. See, e.g., Dickman v. City of Santa Fe, 724 F. Supp. 1341, 1345-48 (D.N.M. 1989) (granting preliminary injunction where fourth phase of a four-phase project was improperly segmented even though no federal money would be spent on that fourth phase); accord, Ross v. Federal Highway Admin., 162 F.3d 1046, 1052-53 (10th Cir. 1998) (affirming finding of improper segmentation despite withdrawal of federal funding from disputed segment of highway project).
The real world is more complex than this simple hypothetical, of course, and in this case, the officials who testified all deny that there was any explicit agreement to the effect hypothesized above. But the evidence shows the following.
First, the local, state, and federal officials discussed the very possibility of such an agreement in 1999 and 2000. Second, at least from the perspective of officials responsible for solving traffic problems in Goshen and on state and federal highways, the hypothesized course of action makes a great deal of practical sense.
Third, the local, state, and federal officials have all acted in ways that are consistent with such an agreement to evade applicable federal laws.
In the face of this evidence, the defendants' denials of such an intention and understanding do not win or deserve great credibility. On the present record, the court finds it is more likely than not that the defendants have a tacit understanding that, after the city's expected completion of the Third Street project, the U.S. 33 project is likely to go forward with the widening of Madison Street east of Main, with INDOT shifting U.S. 33 and State Road 15 to the newly widened Third Street. This tacit understanding is not legally binding on any agency, of course, but the evidence offered thus far strongly indicates that the agreement exists.
Plaintiffs can prove their segmentation case without a direct admission from a witness to the effect that the agencies reached this agreement. Cf. JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F.3d 775, 779 (7th Cir. 1999) (reversing summary judgment for defendants in antitrust conspiracy case: "an inference of conspiracy — of, in this case, an informal agreement among the applicators and the producers to deny supply to firms that tried to break into the applicators' cosily divided market — can be drawn from circumstantial evidence as well as from admissions or other direct testimony of the conspirators' communications with each other").
II. Irreparable Harm
In addition to showing a likelihood of success on the merits, plaintiffs must show that they are likely to suffer irreparable harm without a preliminary injunction. Plaintiffs have made that showing in this case. Plaintiffs have lawfully protected interests in having a thorough and careful consideration of the environmental and historic impacts of the Third Street project, as part of the larger U.S. 33 project. If the Third Street project moves further forward without such consideration, the opportunity for such consideration will be gone. That is why injunctive relief to enforce NEPA, Section 106 of NHPA, and Section 4(f) of the Transportation Act is often granted when a violation has been shown. E.g., Wisconsin v. Weinberger, 745 F.2d 412, 426 (7th Cir. 1984) (noting that nothing in NEPA restricts the courts' traditional jurisdiction in equity); accord, Davis v. Mineta, 302 F.3d 1104, 1114-16 (10th Cir. 2002) (reversing district court's finding that plaintiffs would not suffer irreparable harm from violations of NEPA and Section 4(f) and directing entry of preliminary injunction); Dickman v. City of Santa Fe, 724 F. Supp. at 1344-45, 1348 (granting motion for preliminary injunction on grounds that defendants had improperly segmented one portion of a highway project to avoid compliance with NEPA).The fact that construction began about three weeks before plaintiffs filed this action affects the scope of injunctive relief, but it does not undermine plaintiffs' entitlement to some injunctive relief. The evidence indicates that only the two northern-most blocks of Third Street, from Lincoln to Pike, have had the pavement removed. The court can block further destruction and widening of the existing portions of Third Street while still allowing the city to take reasonable actions to stabilize the two northern-most blocks until a final decision is made about whether to proceed with the Third Street project.
For example, in the face of the litigation threat, the city chose to tear up the portion of Third Street directly in front of the Goshen Fire Department headquarters. Since construction began, the fire department has been using its back entrance. The court sees no reason why the city should not be permitted to repave temporarily the portion of Third Street in front of the fire department.
III. The Balance of Harms, the Public Interest, and the City's Laches Argument
The court must also consider the harm that an erroneous grant of a preliminary injunction would inflict on the defendants and others, including the general public and others who are not parties to this case. E.g., Abbott Laboratories v. Mead Johnson Co., 971 F.2d 6, 11-12 (7th Cir. 1992).An injunction stopping further progress on the Third Street project is likely to inflict substantial expense on the City of Goshen and/or its contractor.
However, the court does not intend to bar the city from repaving Third Street on at least a temporary basis, so traffic can be restored to its prior flow. The city asserts that it would suffer additional expenses of $27,000 per day if construction is delayed. That estimate was based on hearsay evidence from the construction company and is not persuasive. The city did not offer its construction contract into evidence, despite plaintiffs' questions about force majeure provisions. Also, expenses are difficult to estimate because of the project's dependence on winter weather. The parties to the contract presumably factored in substantial risks that weather would delay progress through much of the winter. Nevertheless, it is reasonable to expect significant expenses may result from an injunction, whether those expenses are imposed on the City of Goshen or on its construction contractor.
The city has argued that plaintiffs are guilty of laches for having waited until October 1, 2002, about three weeks after construction started, before filing this action and seeking a preliminary injunction. The court disagrees. Even before construction began at all, plaintiffs gave the city and the other defendants ample warning of the legal problems posed by the city's planned construction. The plaintiffs sent their warning letter in August 2002. The city then chose to go forward, taking a calculated risk that its construction project could be enjoined.
In terms of the laches doctrine, after the city received the letter from plaintiffs, the city could not have been reasonably relying on the absence of any legal challenge from the plaintiffs. The city itself also chose to begin its construction at the north end of the planned project, where the road would be torn up first right in front of the fire department. The city has not established that plaintiffs are guilty of laches.
Under these circumstances, the court finds that the balance of harms weighs in favor of granting an injunction. Plaintiffs have made a strong showing of likelihood of success on the merits, and of irreparable harm to them and to the public interest if defendants are allowed to violate federal law and complete the Third Street project without appropriate review of environmental and historic impacts. The harm to defendants results from a decision to go forward with a high risk strategy with ample notice of the legal problems they were likely to encounter. Nevertheless, the court can shape its injunction in ways that will mitigate harm to the public interest by, for example, ensuring that the fire department can have access to a paved Third Street as soon as the needed work can physically be performed.
IV. The Bond Requirement
The court must establish a bond under Rule 65 of the Federal Rules of Civil Procedure. As the Tenth Circuit recently explained: "Ordinarily, where a party is seeking to vindicate the public interest served by NEPA, a minimal bond amount should be considered." Davis v. Mineta, 302 F.3d 1104, 1126 (10th Cir. 2002) (reversing denial of preliminary injunction), citing Friends of the Earth, Inc. v. Brinegar, 518 F.2d 322, 322-23 (9th Cir. 1975) (reversing district court decision to require $4.5 million bond in NEPA case and finding that bond of $1,000 was reasonable). The court finds in this case that a bond of $10,000 is reasonable under the circumstances, which include these private not-for-profit organizations' efforts to vindicate the public interest served by NEPA, NHPA, and Section 4(f).
V. Subject Matter Jurisdiction
The federal and state defendants have moved to dismiss this action for lack of subject matter jurisdiction. Recognizing that subject matter jurisdiction is a threshold action, the court has chosen to discuss the issue at the end of this entry because the unusual problems posed by segmentation cases under NEPA and the Administrative Procedures Act ("APA") can be best understood once plaintiffs' claims are understood in detail. Subject matter jurisdiction under the NHPA also appears to be proper on simpler grounds.
A. NHPA
Defendants argue that the NHPA creates no private cause of action, and that since plaintiffs have not tried to invoke the APA, this court lacks subject matter jurisdiction. Section 305 of the NHPA provides:
In any civil action brought in any United States district court by any interested person to enforce the provisions of this subchapter, if such person substantially prevails in such action, the court may award attorneys' fees, expert witness fees, and other costs of participating in such action, as the court deems reasonable.16 U.S.C. § 470w-4. Based on that provision, many courts have determined that a private cause of action under the NHPA exists. See Brewery District Society v. Federal Highway Admin., 996 F. Supp. 750, 756 (S.D.Ohio 1998) (finding a private cause of action outside of the APA), citing Tyler v. Cisneros, 136 F.3d 603, 608, (9th Cir. 1998); Boarhead Corp. v. Erickson, 923 F.2d 1011, 1017 (3d Cir. 1991); Bywater Neighborhood Ass'n. v. Tricarico, 879 F.2d 165, 167 (5th Cir. 1989); Vieux Carre Property Owners, Residents Assocs., Inc. v. Brown, 875 F.2d 453, 458 (5th Cir. 1989). But see National Trust for Historic Preservation v. Blanck, 938 F. Supp. 908, 914 (D.D.C. 1996) (finding that attorney fee provision in NHPA applies to actions that are actually brought under the APA, so that APA's standards of judicial review apply to agency action). Regardless of whether the claim is deemed to arise under NHPA or the APA, the court has subject matter jurisdiction over this claim.
B. NEPA and Section 4(f) of the Transportation Act
Defendants also seek dismissal of plaintiffs' NEPA and Section 4(f) claims on the ground that the court lacks subject matter jurisdiction. It is well established that NEPA and Section 4(f) alone do not create a private cause of action to challenge agency determinations. See Davis v. Mineta, 302 F.3d 1104, 1110 (10th Cir. 2002) ("Judicial review of agency NEPA and § 4(f) decisions is made available through the Administrative Procedures Act."); Sierra Club v. Slater, 120 F.3d 623, 630 (6th Cir. 1997) (NEPA does not provide a private cause of action for review of agency decisions). Rather, judicial review of agency determinations is available under and governed by the APA. 5 U.S.C. § 551 et seq.; id. § 702 (a "person suffering legal wrong because of agency action . . . is entitled to judicial review"). Thus, to challenge an agency determination under NEPA and Section 4(f), plaintiffs must file suit under the APA. Defendants argue that plaintiffs have disavowed reliance on the APA, that there is no other jurisdictional basis for plaintiffs' suit, and that, as a result, the claims must be dismissed for lack of subject matter jurisdiction. This argument is not persuasive.
As defendants correctly point out, the sovereign cannot be sued without its consent, United States v. Sherwood, 312 U.S. 584, 586 (1941), and the terms of that consent define the court's jurisdiction to entertain such suit, United States v. Testan, 424 U.S. 392, 399 (1976). One such example of consent is the APA.
Plaintiffs have been reluctant to rely on the APA, apparently because a segmentation violation may never produce anything that looks like a final agency decision of the sort most often challenged in APA cases. See Tr. 9 (argument on jurisdictional issue).
In the type of segmentation violation plaintiffs have asserted in this case, however, there is a threat of irreparable harm resulting from an agency's participation in a scheme to act contrary to federal law. Also, there are no apparent administrative procedures available for these plaintiffs to use. The Supreme Court and lower federal courts have recognized that these circumstances can support exceptions to requirements for final agency action and exhaustion of administrative remedies. See, e.g., Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 13 (2000) ("Doctrines of `ripeness' and `exhaustion' contain exceptions, however, which exceptions permit early review when, for example, the legal question is `fit' for resolution and delay means hardship, or when exhaustion would prove `futile' . . . .") (citations omitted); Rhodes v. United States, 574 F.2d 1179, 1181 (5th Cir. 1978) ("Exhaustion is not required when there is no adequate administrative remedy. A clear showing of irreparable injury may also support an exception. In short only those remedies which provide a real opportunity for adequate relief need be exhausted."), citing Greene v. United States, 376 U.S. 149, 163 (1964); McNeese v. Board of Education, 373 U.S. 668, 674-75 (1963), Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974), and Hodges v. Callaway, 499 F.2d 417, 420 (5th Cir. 1974); see also Wisconsin v. Weinberger, 745 F.2d 412, 426 (7th Cir. 1984) (noting in NEPA case brought under the APA that courts could apply familiar principles of equity to shape remedy for violation). These exceptions under the APA must be narrowly confined to make sure they do not undermine orderly resolution of disputes, but the exceptions appear to apply to this case.
Counsel for the FHWA agreed that, at least in theory, the APA would permit an action for injunctive relief on the theory that there has been improper segmentation. Tr. 12-13; 5-6.
With respect to the state defendants, while it is true that NEPA applies only to federal agencies, state and local defendants agree that the U.S. 33 project is a major federal undertaking. The U.S. 33 project must comply with federal law and may not be improperly segmented into separate parcels to avoid the environmental review process. See Scottsdale Mall v. Indiana, 549 F.2d 484 (7th Cir. 1977). The showing of segmentation in this case is sufficient to bring the state and local defendants into the sweep of NEPA. Id.
VI. The Scope of the Preliminary Injunction
The purpose of the court's preliminary injunction is to preserve the status quo while the case is pending, or until the defendants go through the environmental and historic review process for the Third Street project as that review is also conducted for the U.S. 33 project. The fact that work on the Third Street project has already begun requires some practical accommodations. First, it appears that the city and its contractor have not torn up pavement and curbs on Third Street south of Lincoln Street. The court will enjoin such work south of Lincoln Street. North of Lincoln Street, however, Third Street has already been torn up, and this work has interfered with traffic, including the fire department's access to Third Street. The court will enjoin further work designed to widen Third Street north of Lincoln Street, but the court does not intend to prohibit efforts to stabilize the construction site during the winter and/or further litigation. Nor does the court intend to prohibit efforts to make temporary arrangements for traffic on those two blocks of Third Street. To the extent that the parties need further clarification of specific details, the court will address requests for such clarification or modification on an expedited basis.
A preliminary injunction to this effect is being issued today.
So ordered.