NEPA Existence of “Federal Action”. In the previous decision, the court had held that the project was not a federal action because it was being implemented solely with non-federal funds and did not involve any federal permits or approvals. (See case summary for Dec. 29, 2014 decision.) In the briefing on the preliminary injunction motion, the court addressed several additional arguments and again concluded that the North Eufaula Avenue project had not been “federalized” and therefore did not require NEPA review:
Segmentation. The plaintiffs argued that, in deciding whether the project has been federalized, the court must consider FHWA’s segmentation criteria – in 23 CFR 771.111(f) – in deciding whether the North Eufaula Avenue project had been “federalized” by its connection to other federal projects on Highway 431. The court rejected this argument, holding that “the segmentation test is required only if the court already has found a major federal action.” Further, the court held that even if the segmentation test had been applied, the court would have concluded that the North Eufaula Avenue project would have met that test: it had logical termini and independent utility and would not restrict consideration of alternatives for future projects. In reaching this conclusion, the court noted in particular that (1) the project “alleviates safety problems for motorists and emergency-response vehicles” and (2) “[c]ommitting one million dollars to the widening of North Eufaula does not foreclose the construction of a 65-mile-per-hour bypass in the future.”

Pretext. In its previous decision, the court held that a project could be federalized if a State used State funding solely as a “pretext” for avoiding the federal environmental review process. In that decision, the court held that a pretext could be found if a state “submits an impact study to the federal government, later withdraws the study out of concern it will fail federal standards, and then claims it will use only state money for a purely state project.” In the January 29 decision, the court clarified that “the submission and withdrawal of an application for a federal impact study” is just one way – not necessarily the only way – to demonstrate that a pretext exists.

Functional Equivalent. Citing a federal court decision involving a case in Pennsylvania, the plaintiffs argued that a project could be federalized if it was the “functional equivalent” of another project that the State previously had proposed to build with federal funds. The court agreed that FHWA “would be hard pressed to maintain that a new project occurring in the same time frame, having the same quality and dimensions, and having the same purpose as an original federal project becomes de-federalized if moved ‘two feet to the east.’” But the court found that the North Eufaula Avenue was not the functional equivalent of the previous Highway 431 bypass project, because the two facilities differed greatly in their design criteria, location, function, and cost.

Federal influence. The plaintiffs argued that the North Eufaula Avenue project was federalized because of the extent of the federal “influence” on the project, even if federal funds were not being used. They cited (1) use of federal funds for projects on adjoining sections of Highway 431, (2) inclusion of North Eufaula Avenue on the federally designated Strategic Highway Network, which required following federal design standards, and (3) previous use of federal grants for landscaping on this section of North Eufaula Avenue. The court held that none of these factors caused the state-funded project on North Eufaula Avenue to be a “federal action” for purposes of NEPA.