## Facts

- The Federal Highway Administration (FHWA) administers a federal highway grant-in-aid program to states and issues regulations governing procedures for federally assisted highway projects.
- An environmental organization challenged two FHWA regulations: one addressing the number and timing of public hearings for federally aided highways, and another allowing advance acquisition of right-of-way parcels before location hearings and before completion of environmental review.
- FHWA issued the regulations without APA notice-and-comment rulemaking, relying on the APA exemption for matters “relating to” grants.
- The organization alleged the regulations significantly reduced meaningful public participation and allowed project commitments before required hearings and environmental analysis.
- The district court held the regulations were exempt from notice-and-comment under the APA “grants” exemption and dismissed the substantive challenge to the advance-acquisition regulation as unripe.

## Issues

1. Whether FHWA had to use APA notice-and-comment rulemaking for the public-hearing and advance-acquisition regulations, or whether the APA’s “grants” exemption applied.
2. Whether the challenge to the advance right-of-way acquisition regulation was ripe for review.
3. Whether the advance-acquisition regulation, as written, conflicted with the Federal-Aid Highway Act’s hearing requirements, NEPA’s timing requirements for environmental review, and Clean Air Act constraints applicable to transportation projects.

## Decision

- The court affirmed that the regulations fell within the APA § 553(a)(2) exemption for matters relating to “grants,” so notice-and-comment was not required.
- The court reversed the district court’s ripeness dismissal of the advance-acquisition challenge.
- The court held the advance-acquisition regulation was ripe because it was final agency action with immediate legal effect and could undermine statutory hearing and environmental-review rights before project decisions became practically irreversible.
- The court remanded for entry of appropriate relief because the advance-acquisition regulation, as drafted, could not be reconciled with the governing statutory requirements.

## Legal Principles

- APA § 553(a)(2) exempts from notice-and-comment rulemaking agency rules “relating to” grants; in a grant-in-aid program, regulations prescribing conditions and procedures for grant administration can fall within the exemption.
- Courts will not narrow the scope of a clear statutory rulemaking exemption based solely on policy concerns about reduced procedural protections.
- A pre-enforcement challenge to an agency regulation is ripe when the regulation constitutes final agency action, produces present legal consequences, and creates a material risk that statutory procedural rights will be lost through irreversible practical commitments.
- Statutory hearing and environmental-review schemes require decisionmaking to occur at a meaningful stage; agency rules that allow actions effectively committing a project’s location before required hearings and environmental analysis may be unlawful.

## Conclusion

The D.C. Circuit upheld FHWA’s reliance on the APA’s grants exemption to issue highway grant regulations without notice-and-comment, but held that a rule permitting advance right-of-way acquisition was immediately reviewable and incompatible, as written, with statutory requirements for meaningful hearings and timely environmental and air-quality review.


Nat'l Wildlife Fed'n v. Snow, 561 F.2d 227 (D.C. Cir. 1976)