       RECOMMENDED FOR FULL-TEXT PUBLICATION
            Pursuant to Sixth Circuit Rule 206            2        Citizens Against the Pellissippi               No. 02-6536
    ELECTRONIC CITATION: 2004 FED App. 0211P (6th Cir.)            Parkway v. Mineta, et al.
                File Name: 04a0211p.06

                                                           Environmental Planning and            -
UNITED STATES COURT OF APPEALS                             Permits for TDOT, individual          -
                                                           and official capacities,              -
              FOR THE SIXTH CIRCUIT                                                              -
                _________________                                             Defendants.        -
                                                                                                N
CITIZENS AGAINST THE             X                                   Appeal from the United States District Court
PELLISSIPPI PARKWAY               -                                for the Middle District of Tennessee at Nashville.
EXTENSION , INC.,                 -                                No. 02-00549—Todd J. Campbell, District Judge.
                                  -    No. 02-6536
             Plaintiff-Appellee, -                                             Argued: April 28, 2004
                                   >
                                  ,
            v.                    -                                        Decided and Filed: July 7, 2004
                                  -
NORMAN Y. MINETA ,                -                           Before: MARTIN and ROGERS, Circuit Judges; BELL,
Secretary of the United States -                                            Chief District Judge.*
Department of Transportation, -                                                  _________________
                                  -
official capacity; MARY
                                  -
PETERS , Administrator of the     -                                                   COUNSEL
Federal Highway                   -                       ARGUED:         John L. Smeltzer, UNITED STATES
Administration, official          -                       DEPARTMENT OF JUSTICE, Washington, D.C., for
capacity; CHARLES BOYD ,          -                       Appellants. Joe W. McCaleb, Hendersonville, Tennessee, for
Division Administrator for the -                          Appellee. ON BRIEF: John L. Smeltzer, UNITED STATES
                                  -                       DEPARTMENT OF JUSTICE, Washington, D.C., for
Nashville Division, FHWA,         -
official capacity,                                        Appellants. Joe W. McCaleb, Hendersonville, Tennessee, for
                                  -                       Appellee.
        Defendants-Appellants, -
                                  -
J. BRUCE SALTSMAN,                -
Commissioner of the               -
                                  -
Tennessee Department of           -
Transportation, individual and -
official capacities; CHARLES      -
                                                               *
BUSH , Manager of                 -                            The Ho norable R obe rt Ho lmes B ell, Chief United States District
                                                          Judge for the Western District of Michigan, sitting by designation.

                            1
No. 02-6536            Citizens Against the Pellissippi       3    4    Citizens Against the Pellissippi            No. 02-6536
                              Parkway v. Mineta, et al.                 Parkway v. Mineta, et al.

                    _________________                              Smoky Mountain gateway towns of Maryville and Alcoa.
                                                                   The project calls for the construction of a four-lane limited
                        OPINION                                    access highway with a grassy median, and would require the
                    _________________                              acquisition of 155 acres of new right-of-way land.
  ROGERS, Circuit Judge. To comply with the National                  There is no dispute that the project is a “major Federal
Environmental Policy Act (NEPA), the Federal Highway               action” subject to the National Environmental Policy Act.
Administration (the “FHWA”), in conjunction with federal           See 42 U.S.C. § 4332(C); see generally 42 U.S.C. § 4321 et
and state agencies, issued a finding of no significant impact      seq. NEPA sets forth essentially procedural requirements to
(“FONSI”) for a proposed 4.5 mile extension of a highway in        assess environmental impacts of major federal actions. See
Tennessee. Subsequently, a citizens group opposed to the           42 U.S.C. § 4332(C); Southwest Williamson County Cmty.
extension brought suit in federal district court alleging that     Ass’n v. Slater, 243 F.3d 270, 278 (6th Cir. 2001). In general,
the agency’s finding violated NEPA because it did not              NEPA requires agencies to prepare an Environmental Impact
address a specific federal regulation. The district court issued   Statement (an “EIS”) for any major federal action that
a broad preliminary injunction that prevented state or federal     significantly affects the quality of the human environment.
agencies from “planning, financing, contracting, land              42 U.S.C. § 4332(C). An EIS provides an extensive
acquisition, [or] construction” for the highway extension. In      explanation of the environmental impacts of, and possible
response, the FHWA withdrew the FONSI and sought a                 alternatives for, a proposed major federal action. Id.
voluntary remand so that it could reconsider its decision. The
district court denied the FHWA’s motion for a remand. The            Regulations promulgated by the Council on Environmental
FHWA now appeals, arguing that it acted properly by                Quality, implementing NEPA, require federal agencies to
withdrawing the FONSI, that the district court erred in            prepare an EIS for any proposed major federal action, unless
refusing to modify the injunction to allow the agency to           the action is categorically excluded or unless the project
reconsider the FONSI, and that the agency is entitled to a         would not have a significant impact on the environment. See
voluntary remand to consider the regulation that it did not        40 C.F.R. §§ 1500.3, 1501.4. If an agency is unsure as to
address in the preparation of the initial FONSI. Because the       whether a project would significantly affect the quality of the
district court erred in denying the FHWA an opportunity to         human environment, an agency may postpone the preparation
revisit its decision, we reverse the judgment of the district      of an EIS and prepare an Environmental Assessment (an
court and remand the case to the district court with               “EA”), which briefly provides sufficient evidence and
instructions to vacate or modify the injunction so as to allow     analysis for determining whether there is a significant
the FHWA to comply with NEPA.                                      environmental impact. Id.; 40 C.F.R. § 1508.9. After
                                                                   analyzing the EA, the agency decides whether to prepare an
   Tennessee state route 162, the Pellissippi Parkway,             EIS or issue a finding of no significant impact. 40 C.F.R.
presently runs from state route 62 in Knox County and ends         § 1501.4(e); 40 C.F.R. § 1508.13. A FONSI briefly presents
at state route 33 in adjacent Blount County. The Tennessee         the reasons why an agency action will not create a significant
Department of Transportation (the “TDOT”) proposed the             environmental impact and why an EIS will not be issued.
Pellissippi Parkway Extension Project, which would extend          40 C.F.R. § 1508.13.
the Pellissippi Parkway 4.5 miles to relieve congestion in the
No. 02-6536            Citizens Against the Pellissippi      5    6        Citizens Against the Pellissippi                 No. 02-6536
                              Parkway v. Mineta, et al.                    Parkway v. Mineta, et al.

  FHWA regulations in turn guide that agency’s                    informed the TDOT that the FHWA was suspending federal
determination whether to prepare an EIS or an EA and a            funding for the project until further notice. Thereafter, the
FONSI. These regulations divide FHWA actions into three           district court held a hearing on the injunction. During the
classes.    “Class I” actions “significantly affect the           hearing, a TDOT representative informed the district court
environment and require an EIS.” 23 C.F.R. § 771.115(a).          that the TDOT was seriously considering continuing with the
“Class II” actions do not “have a significant environmental       project even in the absence of federal funds. On July 17,
effect,” and thus do not require an EIS or an EA. 23 C.F.R.       2002, the district court granted CAPPE a preliminary
§ 771.115(b). The remaining category of Class III actions         injunction that stated:
encompasses those actions “in which the significance of the
environmental impact is not clearly established.” 23 C.F.R.           all Defendants and their officers, agents, employees,
§ 771.115(c). Class III actions necessitate the preparation of        servants, attorneys, and all persons in active concert or
an EA “to determine the appropriate environmental document            participation with them are hereby restrained and
required.” Id. The FHWA regulations list “examples” of                enjoined from continued planning, financing,
Class I projects, and the examples include “(1) A new                 contracting, land acquisition, and construction of a four-
controlled access freeway” and “(2) A highway project of              lane, controlled access highway called the Pellissippi
four or more lanes on a new location.” 23 C.F.R.                      Parkway Extension. . . . pending further order of the
§ 771.115(a).                                                         Court.

  The FHWA issued an EA for the extension project on                Over a month later, on August 29, 2002, Boyd informed the
October 3, 2001. Roughly seven months later, on April 24,         TDOT that the FHWA was withdrawing the FONSI for the
2002, the FHWA issued a FONSI for the project. Neither the        project. Boyd’s letter to the TDOT stated that the FHWA was
EA nor the FONSI discussed the apparent Class I nature of         taking “additional administrative actions” on the project, and
the project. However, the FONSI allowed the project to move       as a consequence all federal funds would be suspended from
forward. 23 C.F.R. § 771.113(a)(1).                               the project. The letter also warned the TDOT that if the state
                                                                  were to proceed with the project, the state would “jeopardize
   On June 7, 2002, a not-for-profit corporation called the       the project for future federal-aid funding.”
Citizens Against the Pellissippi Parkway Extension, or
CAPPE, filed suit against the FHWA and TDOT officials in            Subsequently, the FHWA1 moved the district court for a
federal district court to enjoin further action on the project.   voluntary remand of the case to the FHWA for further review
CAPPE consists of Blount County residents who own                 or to dismiss the case as moot because the FHWA had
property that would be affected by the project. The complaint     withdrawn the FONSI and stopped the federal funding of the
alleged that because the project fit within Class I of the        project. On October 1, 2002, the district court denied 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).                                                          1
                                                                         CAPPE sued three federal officials and two Tennessee officials. For
 On June 26, 2002, in response to the lawsuit, Charles S.         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
Boyd, the Tennessee Division Administrator for the FHWA,          defendants as TDOT.
No. 02-6536                 Citizens Against the Pellissippi               7    8    Citizens Against the Pellissippi             No. 02-6536
                                   Parkway v. Mineta, et al.                         Parkway v. Mineta, et al.

FHWA’s motion because of Tennessee’s expressed desire to                        a declaratory judgment and the dissolution of an injunction as
continue with the project absent federal funding. The FHWA                      a motion to modify the injunction).
filed a motion for reconsideration, but the district court denied
that motion as well. The FHWA now appeals.2                                        The district court in this case articulated no tenable reason
                                                                                for continuing injunctive relief against the FHWA. In the
  The district court improperly failed to vacate or modify the                  absence of any such reason, it is an abuse of discretion to
injunction, because in doing so it precluded the agency from                    prevent an agency from acting to cure the very legal defects
acting to comply with the very statute that formed the basis                    asserted by plaintiffs challenging federal action. This court
for the lawsuit. The injunction essentially prevents the                        has recognized the inherent authority of an agency to
FHWA from all “planning” associated with the project,                           reconsider a prior decision. Belville Mining Co. v. United
including the planning necessary to complete an EIS or                          States, 999 F.2d 989, 997 (6th Cir. 1993) (“Even where there
another FONSI. Although the FHWA’s motion to the district                       is no express reconsideration authority for an agency,
court was styled as a motion for voluntary remand, the motion                   however, the general rule is that an agency has inherent
may appropriately be considered as a motion to modify the                       authority to reconsider its decision, provided that
injunction so that it could continue to prepare a proper FONSI                  reconsideration occurs within a reasonable time after the first
or EIS. The district court itself considered the motion to                      decision.”); see also Cissell Mfg. Co. v. United States Dep’t
remand as an attempt by the FHWA to dissolve the injunction                     of Labor, 101 F.3d 1132, 1136 (6th Cir. 1996) (holding in a
and refused to do so, citing the potential for irreparable harm                 review of an adjudicative proceeding that “[i]t is well settled
to CAPPE.                                                                       that when an agency makes an error of law in its
                                                                                administrative proceedings, a reviewing court should remand
  It is only if we consider the motion as one to deny                           the case to the agency so that the agency may take further
modification of the injunction that we even have jurisdiction                   action consistent with the correct legal standards”).
over an appeal from the district court’s denial of the motion.                  Accordingly, when an agency seeks a remand to take further
While we generally lack jurisdiction over interlocutory                         action consistent with correct legal standards, courts should
appeals, 28 U.S.C. § 1292(a)(1) gives this court jurisdiction                   permit such a remand in the absence of apparent or clearly
over interlocutory orders “granting, continuing, modifying,                     articulated countervailing reasons. Otherwise judicial review
refusing or dissolving injunctions, or refusing to dissolve or                  is turned into a game in which an agency is “punished” for
modify injunctions.” 28 U.S.C. § 1292(a)(1); see also                           procedural omissions by being forced to defend them well
Linville v. Teamsters Misc. & Indus. Workers Union, Local                       after the agency has decided to reconsider.
284, 206 F.3d 648, 650 (6th Cir. 2000) (treating a motion for
                                                                                  By analogy, courts typically grant an agency’s motion to
                                                                                remand a case if there has been an intervening change in the
    2                                                                           law or new evidence. SKF USA Inc. v. United States, 254
      CAPPE moved this court to dismiss the instant appeal for lack of
jurisdiction. On February 6, 2003, a motions panel of this court denied         F.3d 1022, 1028 (Fed. Cir. 2001) (“A remand is generally
that motion on the ground that the district court’s order of October 1,         required if the intervening event may affect the validity of the
2002, was appealable “under 28 U.S.C. § 1292(a)(1) as an order refusing         agency action.”); see also Cissell Mfg. Co., 101 F.3d at 1136;
to vacate the prelimina ry injunctio n entered by the district court o f July
17, 2002.” Accordingly we do n ot have before us the district co urt’s
                                                                                Ethyl Corp. v. Browner, 989 F.2d 522, 524 (D.C. Cir. 1993)
denial of the FHW A’s motion to dismiss the suit altogether.                    (After new evidence was presented to the agency, the court
No. 02-6536            Citizens Against the Pellissippi       9   10       Citizens Against the Pellissippi                  No. 02-6536
                              Parkway v. Mineta, et al.                    Parkway v. Mineta, et al.

granted the motion to remand and stated “[w]e commonly            SKF USA, Inc., 254 F.3d at 1029 (emphasis added).3
grant such motions, preferring to allow agencies to cure their
own mistakes rather than wasting the courts’ and the parties’       To be sure, an agency’s reconsideration of its own decision
resources reviewing a record that both sides acknowledge to       may in some contexts be unwarranted, or even abusive. As
be incorrect or incomplete.”).                                    the Fifth Circuit indicated in Macktal v. Chao, 286 F.3d 822,
                                                                  826 (5th Cir. 2002), an “agency may not reconsider its own
  Although there is no allegation of new evidence or a change     decision if to do so would be arbitrary, capricious, or an abuse
in the law in the present case, the same considerations of        of discretion.” And the Federal Circuit recognized in SKF
judicial efficiency apply. As the Federal Circuit in SKF USA      USA that
explained in careful dictum, voluntary remand is appropriate
even without a change in the law or new evidence:                   [a] remand may be refused if the agency’s request is
                                                                    frivolous or in bad faith. For example, in Lutheran
  [E]ven if there are no intervening events, the agency may         Church-Missouri Synod v. Fed. Communications
  request a remand (without confessing error) in order to           Comm’n, 141 F.3d 344, 349 (D.C. Cir. 1998), the Court
  reconsider its previous position. It might argue, for             of Appeals for the District of Columbia Circuit refused
  example, that it wished to consider further the governing         the FCC’s “novel, last second motion to remand,” noting
  statute, or the procedures that were followed. It might           that the remand request was not based on a confession of
  simply state that it had doubts about the correctness of          error and was instead based on a prospective policy
  its decision or that decision’s relationship to the               statement which would not bind the FCC. See id. The
  agency’s other policies. Here, the reviewing court has            court added that “the Commission has on occasion
  discretion over whether to remand. See Southwestern               employed some rather unusual legal tactics when it
  Bell Tel. Co. v. Fed. Communications Comm’n, 10 F.3d              wished to avoid judicial review, but this ploy may well
  892, 896 (D.C. Cir. 1993) (noting that the court had              take the prize.” Id.
  previously allowed a remand to the FCC where the FCC
  sought voluntary remand “to give further consideration          SKF USA, Inc., 254 F.3d at 1029. Similarly, this court
  to the matters addressed in the [FCC’s] orders”) . . . ;        qualified its recognition of an agency’s inherent authority to
  Wilkett v. Interstate Commerce Comm’n, 710 F.2d 861,            reconsider by referring to reconsiderations that occur “within
  863 (D.C. Cir. 1983) (noting that the court had granted         a reasonable time.” Belville, 999 F.2d at 997. These
  the Commission’s motion for remand for purposes of              limitations recognize that there are “two opposing policies
  reconsideration); see also Anchor Line Ltd. v. Fed.             [that] immediately demand recognition: the desirability of
  Maritime Comm’n, 299 F.2d 124, 125 (D.C. Cir. [1962])           finality, on the one hand, and the public interest in reaching
  (noting that “when an agency seeks to reconsider its            what, ultimately, appears to be the right result on the other.”
  action, it should move the court to remand or to hold the       Civil Aeronautics Bd. v. Delta Air Lines, Inc., 367 U.S. 316,
  case in abeyance pending reconsideration by the                 321 (1961) (footnote omitted).
  agency”) . . . . [I]f the agency’s concern is substantial
  and legitimate, a remand is usually appropriate.
                                                                       3
                                                                        None of the cases cited in this passage analyze the decision to grant
                                                                  or deny an a gency’s motio n to rem and the case .
No. 02-6536            Citizens Against the Pellissippi     11    12   Citizens Against the Pellissippi    No. 02-6536
                              Parkway v. Mineta, et al.                Parkway v. Mineta, et al.

   CAPPE has not demonstrated any examples of detrimental         with instructions to vacate or modify the preliminary
reliance on the previous FONSI that would militate against        injunction in accordance with this opinion.
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
