Citizens Against the Pellissippi Parkway Extension, Inc. v. NORMAN Y. MINETA, Secretary of the United States Department of Transportation,…

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0211P (6th Cir.)
File Name: 04a0211p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
CITIZENS AGAINST THE
PELLISSIPPI PARKWAY
EXTENSION, INC.,
Plaintiff-Appellee,
v.
NORMAN Y. MINETA,
Secretary of the United States
Department of Transportation,
official capacity; MARY
PETERS, Administrator of the
Federal Highway
Administration, official
capacity; CHARLES BOYD,
Division Administrator for the
Nashville Division, FHWA,
official capacity,
Defendants-Appellants,
J. BRUCE SALTSMAN,
Commissioner of the
Tennessee Department of
Transportation, individual and
official capacities; CHARLES
BUSH, Manager of
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No. 02-6536
2 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
No. 02-6536
*The Honorable Robe rt Ho lmes B ell, Chief United States District
Judge for the Western District of Michigan, sitting by designation.
Environmental Planning and
Permits for TDOT, individual
and official capacities,
Defendants.
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Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 02-00549—Todd J. Campbell, District Judge.
Argued: April 28, 2004
Decided and Filed: July 7, 2004
Before: MARTIN and ROGERS, Circuit Judges; BELL,
Chief District Judge.*
_________________
COUNSEL
ARGUED: John L. Smeltzer, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellants. Joe W. McCaleb, Hendersonville, Tennessee, for
Appellee. ON BRIEF: John L. Smeltzer, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellants. Joe W. McCaleb, Hendersonville, Tennessee, for
Appellee.

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No. 02-6536 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
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_________________
OPINION
_________________
ROGERS, Circuit Judge. To comply with the National
Environmental Policy Act (NEPA), the Federal Highway
Administration (the “FHWA”), in conjunction with federal
and state agencies, issued a finding of no significant impact
(“FONSI”) for a proposed 4.5 mile extension of a highway in
Tennessee. Subsequently, a citizens group opposed to the
extension brought suit in federal district court alleging that
the agency’s finding violated NEPA because it did not
address a specific federal regulation. The district court issued
a broad preliminary injunction that prevented state or federal
agencies from “planning, financing, contracting, land
acquisition, [or] construction” for the highway extension. In
response, the FHWA withdrew the FONSI and sought a
voluntary remand so that it could reconsider its decision. The
district court denied the FHWA’s motion for a remand. The
FHWA now appeals, arguing that it acted properly by
withdrawing the FONSI, that the district court erred in
refusing to modify the injunction to allow the agency to
reconsider the FONSI, and that the agency is entitled to a
voluntary remand to consider the regulation that it did not
address in the preparation of the initial FONSI. Because the
district court erred in denying the FHWA an opportunity to
revisit its decision, we reverse the judgment of the district
court and remand the case to the district court with
instructions to vacate or modify the injunction so as to allow
the FHWA to comply with NEPA.
Tennessee state route 162, the Pellissippi Parkway,
presently runs from state route 62 in Knox County and ends
at state route 33 in adjacent Blount County. The Tennessee
Department of Transportation (the “TDOT”) proposed the
Pellissippi Parkway Extension Project, which would extend
the Pellissippi Parkway 4.5 miles to relieve congestion in the
4 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
No. 02-6536
Smoky Mountain gateway towns of Maryville and Alcoa.
The project calls for the construction of a four-lane limited
access highway with a grassy median, and would require the
acquisition of 155 acres of new right-of-way land.
There is no dispute that the project is a “major Federal
action” subject to the National Environmental Policy Act.
See 42 U.S.C. § 4332(C); see generally 42 U.S.C. § 4321 et
seq. NEPA sets forth essentially procedural requirements to
assess environmental impacts of major federal actions. See
42 U.S.C. § 4332(C); Southwest Williamson County Cmty.
Ass’n v. Slater, 243 F.3d 270, 278 (6th Cir. 2001). In general,
NEPA requires agencies to prepare an Environmental Impact
Statement (an “EIS”) for any major federal action that
significantly affects the quality of the human environment.
42 U.S.C. § 4332(C). An EIS provides an extensive
explanation of the environmental impacts of, and possible
alternatives for, a proposed major federal action. Id.
Regulations promulgated by the Council on Environmental
Quality, implementing NEPA, require federal agencies to
prepare an EIS for any proposed major federal action, unless
the action is categorically excluded or unless the project
would not have a significant impact on the environment. See
40 C.F.R. §§ 1500.3, 1501.4. If an agency is unsure as to
whether a project would significantly affect the quality of the
human environment, an agency may postpone the preparation
of an EIS and prepare an Environmental Assessment (an
“EA”), which briefly provides sufficient evidence and
analysis for determining whether there is a significant
environmental impact. Id.; 40 C.F.R. § 1508.9. After
analyzing the EA, the agency decides whether to prepare an
EIS or issue a finding of no significant impact. 40 C.F.R.
§ 1501.4(e); 40 C.F.R. § 1508.13. A FONSI briefly presents
the reasons why an agency action will not create a significant
environmental impact and why an EIS will not be issued.
40 C.F.R. § 1508.13.

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No. 02-6536 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
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FHWA regulations in turn guide that agency’s
determination whether to prepare an EIS or an EA and a
FONSI. These regulations divide FHWA actions into three
classes. “Class I” actions “significantly affect the
environment and require an EIS.” 23 C.F.R. § 771.115(a).
“Class II” actions do not “have a significant environmental
effect,” and thus do not require an EIS or an EA. 23 C.F.R.
§ 771.115(b). The remaining category of Class III actions
encompasses those actions “in which the significance of the
environmental impact is not clearly established.” 23 C.F.R.
§ 771.115(c). Class III actions necessitate the preparation of
an EA “to determine the appropriate environmental document
required.” Id. The FHWA regulations list “examples” of
Class I projects, and the examples include “(1) A new
controlled access freeway” and “(2) A highway project of
four or more lanes on a new location.” 23 C.F.R.
§ 771.115(a).
The FHWA issued an EA for the extension project on
October 3, 2001. Roughly seven months later, on April 24,
2002, the FHWA issued a FONSI for the project. Neither the
EA nor the FONSI discussed the apparent Class I nature of
the project. However, the FONSI allowed the project to move
forward. 23 C.F.R. § 771.113(a)(1).
On June 7, 2002, a not-for-profit corporation called the
Citizens Against the Pellissippi Parkway Extension, or
CAPPE, filed suit against the FHWA and TDOT officials in
federal district court to enjoin further action on the project.
CAPPE consists of Blount County residents who own
property that would be affected by the project. The complaint
alleged that because the project fit within Class I of the
FHWA regulations, the FONSI needed to explain why an EIS
was not needed, in light of the provisions of 23 C.F.R.
§ 771.115(a).
On June 26, 2002, in response to the lawsuit, Charles S.
Boyd, the Tennessee Division Administrator for the FHWA,
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Parkway v. Mineta, et al.
No. 02-6536
1CAPPE sued three federal officials and two Tennessee officials. For
convenience, in discussing the p rocedural actions of the parties in this
litigation, we refer to the federal defendants as FHW A and the Tennessee
defendants as TDOT.
informed the TDOT that the FHWA was suspending federal
funding for the project until further notice. Thereafter, the
district court held a hearing on the injunction. During the
hearing, a TDOT representative informed the district court
that the TDOT was seriously considering continuing with the
project even in the absence of federal funds. On July 17,
2002, the district court granted CAPPE a preliminary
injunction that stated:
all Defendants and their officers, agents, employees,
servants, attorneys, and all persons in active concert or
participation with them are hereby restrained and
enjoined from continued planning, financing,
contracting, land acquisition, and construction of a four-
lane, controlled access highway called the Pellissippi
Parkway Extension. . . . pending further order of the
Court.
Over a month later, on August 29, 2002, Boyd informed the
TDOT that the FHWA was withdrawing the FONSI for the
project. Boyd’s letter to the TDOT stated that the FHWA was
taking “additional administrative actions” on the project, and
as a consequence all federal funds would be suspended from
the project. The letter also warned the TDOT that if the state
were to proceed with the project, the state would “jeopardize
the project for future federal-aid funding.”
Subsequently, the FHWA1 moved the district court for a
voluntary remand of the case to the FHWA for further review
or to dismiss the case as moot because the FHWA had
withdrawn the FONSI and stopped the federal funding of the
project. On October 1, 2002, the district court denied the

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No. 02-6536 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
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2CAPPE moved this court to dismiss the instant appeal for lack of
jurisdiction. On February 6, 2003, a motions panel of this court denied
that motion on the ground that the district court’s order of October 1,
2002, was appealable “under 28 U.S.C. § 1292(a)(1) as an order refusing
to vacate the preliminary injunction entered by the district court o f July
17, 2002.” Accordingly we do n ot have before us the district co urt’s
denial of the FHW A’s motion to dismiss the suit altogether.
FHWA’s motion because of Tennessee’s expressed desire to
continue with the project absent federal funding. The FHWA
filed a motion for reconsideration, but the district court denied
that motion as well. The FHWA now appeals.2
The district court improperly failed to vacate or modify the
injunction, because in doing so it precluded the agency from
acting to comply with the very statute that formed the basis
for the lawsuit. The injunction essentially prevents the
FHWA from all “planning” associated with the project,
including the planning necessary to complete an EIS or
another FONSI. Although the FHWA’s motion to the district
court was styled as a motion for voluntary remand, the motion
may appropriately be considered as a motion to modify the
injunction so that it could continue to prepare a proper FONSI
or EIS. The district court itself considered the motion to
remand as an attempt by the FHWA to dissolve the injunction
and refused to do so, citing the potential for irreparable harm
to CAPPE.
It is only if we consider the motion as one to deny
modification of the injunction that we even have jurisdiction
over an appeal from the district court’s denial of the motion.
While we generally lack jurisdiction over interlocutory
appeals, 28 U.S.C. § 1292(a)(1) gives this court jurisdiction
over interlocutory orders “granting, continuing, modifying,
refusing or dissolving injunctions, or refusing to dissolve or
modify injunctions.” 28 U.S.C. § 1292(a)(1); see also
Linville v. Teamsters Misc. & Indus. Workers Union, Local
284, 206 F.3d 648, 650 (6th Cir. 2000) (treating a motion for
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Parkway v. Mineta, et al.
No. 02-6536
a declaratory judgment and the dissolution of an injunction as
a motion to modify the injunction).
The district court in this case articulated no tenable reason
for continuing injunctive relief against the FHWA. In the
absence of any such reason, it is an abuse of discretion to
prevent an agency from acting to cure the very legal defects
asserted by plaintiffs challenging federal action. This court
has recognized the inherent authority of an agency to
reconsider a prior decision. Belville Mining Co. v. United
States, 999 F.2d 989, 997 (6th Cir. 1993) (“Even where there
is no express reconsideration authority for an agency,
however, the general rule is that an agency has inherent
authority to reconsider its decision, provided that
reconsideration occurs within a reasonable time after the first
decision.”); see also Cissell Mfg. Co. v. United States Dep’t
of Labor, 101 F.3d 1132, 1136 (6th Cir. 1996) (holding in a
review of an adjudicative proceeding that “[i]t is well settled
that when an agency makes an error of law in its
administrative proceedings, a reviewing court should remand
the case to the agency so that the agency may take further
action consistent with the correct legal standards”).
Accordingly, when an agency seeks a remand to take further
action consistent with correct legal standards, courts should
permit such a remand in the absence of apparent or clearly
articulated countervailing reasons. Otherwise judicial review
is turned into a game in which an agency is “punished” for
procedural omissions by being forced to defend them well
after the agency has decided to reconsider.
By analogy, courts typically grant an agency’s motion to
remand a case if there has been an intervening change in the
law or new evidence. SKF USA Inc. v. United States, 254
F.3d 1022, 1028 (Fed. Cir. 2001) (“A remand is generally
required if the intervening event may affect the validity of the
agency action.”); see also Cissell Mfg. Co., 101 F.3d at 1136;
Ethyl Corp. v. Browner, 989 F.2d 522, 524 (D.C. Cir. 1993)
(After new evidence was presented to the agency, the court

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No. 02-6536 Citizens Against the Pellissippi
Parkway v. Mineta, et al.
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granted the motion to remand and stated “[w]e commonly
grant such motions, preferring to allow agencies to cure their
own mistakes rather than wasting the courts’ and the parties’
resources reviewing a record that both sides acknowledge to
be incorrect or incomplete.”).
Although there is no allegation of new evidence or a change
in the law in the present case, the same considerations of
judicial efficiency apply. As the Federal Circuit in SKF USA
explained in careful dictum, voluntary remand is appropriate
even without a change in the law or new evidence:
[E]ven if there are no intervening events, the agency may
request a remand (without confessing error) in order to
reconsider its previous position. It might argue, for
example, that it wished to consider further the governing
statute, or the procedures that were followed. It might
simply state that it had doubts about the correctness of
its decision or that decision’s relationship to the
agency’s other policies. Here, the reviewing court has
discretion over whether to remand. See Southwestern
Bell Tel. Co. v. Fed. Communications Comm’n, 10 F.3d
892, 896 (D.C. Cir. 1993) (noting that the court had
previously allowed a remand to the FCC where the FCC
sought voluntary remand “to give further consideration
to the matters addressed in the [FCC’s] orders”) . . . ;
Wilkett v. Interstate Commerce Comm’n, 710 F.2d 861,
863 (D.C. Cir. 1983) (noting that the court had granted
the Commission’s motion for remand for purposes of
reconsideration); see also Anchor Line Ltd. v. Fed.
Maritime Comm’n, 299 F.2d 124, 125 (D.C. Cir. [1962])
(noting that “when an agency seeks to reconsider its
action, it should move the court to remand or to hold the
case in abeyance pending reconsideration by the
agency”) . . . . [I]f the agency’s concern is substantial
and legitimate, a remand is usually appropriate.
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Parkway v. Mineta, et al.
No. 02-6536
3None of the cases cited in this passage analyze the decision to grant
or deny an agency’s motion to rem and the case .
SKF USA, Inc., 254 F.3d at 1029 (emphasis added).3
To be sure, an agency’s reconsideration of its own decision
may in some contexts be unwarranted, or even abusive. As
the Fifth Circuit indicated in Macktal v. Chao, 286 F.3d 822,
826 (5th Cir. 2002), an “agency may not reconsider its own
decision if to do so would be arbitrary, capricious, or an abuse
of discretion.” And the Federal Circuit recognized in SKF
USA that
[a] remand may be refused if the agency’s request is
frivolous or in bad faith. For example, in Lutheran
Church-Missouri Synod v. Fed. Communications
Comm’n, 141 F.3d 344, 349 (D.C. Cir. 1998), the Court
of Appeals for the District of Columbia Circuit refused
the FCC’s “novel, last second motion to remand,” noting
that the remand request was not based on a confession of
error and was instead based on a prospective policy
statement which would not bind the FCC. See id. The
court added that “the Commission has on occasion
employed some rather unusual legal tactics when it
wished to avoid judicial review, but this ploy may well
take the prize.” Id.
SKF USA, Inc., 254 F.3d at 1029. Similarly, this court
qualified its recognition of an agency’s inherent authority to
reconsider by referring to reconsiderations that occur “within
a reasonable time.” Belville, 999 F.2d at 997. These
limitations recognize that there are “two opposing policies
[that] immediately demand recognition: the desirability of
finality, on the one hand, and the public interest in reaching
what, ultimately, appears to be the right result on the other.”
Civil Aeronautics Bd. v. Delta Air Lines, Inc., 367 U.S. 316,
321 (1961) (footnote omitted).

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No. 02-6536 Citizens Against the Pellissippi
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CAPPE has not demonstrated any examples of detrimental
reliance on the previous FONSI that would militate against
allowing the agency to withdraw the FONSI. The FHWA
cannot be accused of causing needless delay, because this is
not a case in which delay works at all against the interest of
the plaintiff. Indeed, the only apparent advantage to CAPPE
in preventing the remand is the delay involved in forcing the
agency to litigate on a concededly insufficient record.
Instead, undelayed agency reconsideration of the potential
environmental impacts of a project furthers the purpose of
NEPA, which seeks to ensure that federal agencies take a
“hard look” at the environmental consequences of significant
federal actions. Thus, the public interest as well as the
purpose of NEPA would permit an agency to reconsider a
FONSI.
The district court based its denial of the motion to
voluntary remand primarily on its perception of the possible
irreparable injury that would come with a voluntary
remand—namely, the potential that the TDOT would
continue the project on its own without federal funding, thus
making the FHWA and compliance with NEPA irrelevant.
This consideration in no way supports the injunction against
FHWA, however, since state continuation of the project
without federal funding would not implicate NEPA in the first
place. And even if a purely state-funded project were
somehow subject to the federal NEPA, the district court could
simply modify the injunction to allow the FHWA to
reconsider and reissue the relevant NEPA documents while
continuing the injunction in other respects. The district court
could thereby prevent harm to the plaintiffs while conserving
the resources of the parties and the judiciary by not mandating
the complete judicial review of a FONSI that is no longer
issued and that has been acknowledged by the FHWA as
deficient.
For the foregoing reasons, we REVERSE the judgment of
the district court and REMAND the case to the district court
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Parkway v. Mineta, et al.
No. 02-6536
with instructions to vacate or modify the preliminary
injunction in accordance with this opinion.

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