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Case Law Updates on the Environment (CLUE)

Case Law Update Details

Case Title

Highway J Citizens Group v. USDOT

Case No.

891 F.3d 697


U.S. Court of Appeals - 7th Circuit






State Highway 164

Project Type


Project Description

The project involved rebuilding, widening, and resurfacing 7.5 miles of State Highway 164 (formerly known as Highway J), a two-lane rural highway in southeast Wisconsin. Highway 164 did not meet current construction standards and had higher crash rates and injury rates compared to similar highways in the state. Problematic conditions included deteriorating pavement, insufficient sight distances at hills and intersections, steep shoulder slopes, steep grades, and intersections that lacked turn lanes or bypass lanes. The Wisconsin Department of Transportation (WisDOT) published a draft “environmental report” in December 2013 and a final environmental report in April 2015. WisDOT then determined, and FHWA agreed, that the project qualified for a categorical exclusion (CE) that covered “[m]odernization of a highway by resurfacing, restoration, rehabilitation, reconstruction, adding shoulders, or adding auxiliary lanes (including parking, weaving, turning, and climbing lanes)” (23 C.F.R. § 771.117(e)).

Case Summary

The plaintiffs sued WisDOT and FHWA to challenge the agencies’ decision to rely on a CE rather than preparing an EA and EIS. The district court ruled in favor of the agencies. The plaintiffs appealed, raising three arguments: (1) FHWA improperly relied on WisDOT’s environmental report without independently considering whether the project qualified for a CE, (2) the state’s environmental report did not analyze cumulative impacts, and (3) FHWA should have prepared an EIS because there was substantial controversy regarding the project. The appellate court ruled in favor of the agencies and upheld the lower court decision.

Key Holdings


Independent Analysis by FHWA.  The plaintiffs claimed that FHWA violated NEPA by relying on WisDOT’s environmental report without conducting its own independent analysis to determine whether the project could rely on a CE. The court ruled that FHWA was not required to prepare a separate analysis. The court explained that the lack of a separate explanation did not mean that FHWA failed to consider the project’s impacts. In fact, the court noted, the administrative record demonstrated that FHWA was actively involved in reviewing drafts of the state’s environmental report, and FHWA only signed off on the environmental report when it was satisfied with its content.

Cumulative Impacts.  The plaintiffs also claimed that FHWA violated NEPA because WisDOT’s environmental report did not analyze cumulative impacts. The court ruled that FHWA was not required to consider cumulative impacts of a project that qualified for a categorical exclusion. The court explained that FHWA had already considered cumulative impacts when it created the CE for certain highway modernization projects, so it did not need to again consider cumulative impacts for each individual project that met the definition of the CE. “[FHWA] must analyze cumulative effects when deciding whether the category (renovating highways) comes within the exclusion. . . . But once a categorical decision has been made . . . the remaining question is whether a particular project flunks the constraints of [23 C.F.R.] § 771.117(e) or otherwise has ‘significant environmental impacts.’”

Substantial Controversy.  The plaintiffs argued that FHWA improperly relied on a CE because there was substantial controversy over the project. The court explained that FHWA’s CE regulations (23 C.F.R. § 771.117(b)) require FHWA to conduct “appropriate environmental studies” to determine if the CE is proper if there may be unusual circumstances. The court determined that FHWA appropriately relied on WisDOT’s environmental report to satisfy its obligation to analyze whether an EA or EIS would be necessary in light of purported controversy. “[23 C.F.R. § 771.117(b)] does not require an environmental impact statement whenever someone opposes a project; it requires only ‘appropriate environmental studies’. The lengthy [environmental] report is such a study.”

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