## Facts

- Virginia Beach sought federal permits to construct and operate an 84.5-mile, 60-inch pipeline to withdraw up to 60 million gallons per day from Lake Gaston to meet municipal water-supply needs.
- Lake Gaston is in the Roanoke River Basin, serving users in Virginia and North Carolina.
- North Carolina, a basin association, and local counties challenged the permits, alleging harms to basin users and environmental impacts, including effects on striped bass.
- In an earlier decision, the district court remanded to the U.S. Army Corps of Engineers for two limited tasks: (1) an independent assessment of striped-bass impacts as part of NEPA review to determine whether an EIS or mitigation was required; and (2) a determination of the extent of Virginia Beach’s water needs as part of the Corps’ public-interest review.
- On remand, the Corps gathered additional fisheries data, analyzed water demand and alternatives, concluded the project’s impact on striped bass would be minimal, and imposed seasonal withdrawal limits to mitigate spawning-season risks.
- The Corps reaffirmed that Virginia Beach’s long-term demand supported withdrawals up to 60 mgd; plaintiffs renewed their challenge under the APA.

## Issues

1. Whether the Corps’ post-remand NEPA analysis of striped-bass impacts, and its decision not to prepare an EIS, was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under the APA.
2. Whether the Corps’ post-remand public-interest determination that Virginia Beach needed up to 60 mgd, including its consideration of alternatives and competing basin interests, was arbitrary or capricious.
3. Whether the court’s review was confined to the two remand topics rather than broader, previously rejected objections to the permits.

## Decision

- The court upheld the Corps’ post-remand determinations and allowed the permits to stand.
- Applying the APA’s deferential standard, the court found the Corps reasonably evaluated striped-bass impacts, consulted relevant information, and responded through permit mitigation rather than preparing an EIS.
- The court found the Corps’ water-needs assessment and public-interest review were supported by the administrative record and reflected reasoned decisionmaking.
- The court limited review to the remand issues and declined to reopen other challenges previously resolved.

## Legal Principles

- Under APA review, a court asks whether the agency action was arbitrary or capricious and may not substitute its judgment for the agency’s where the agency examined relevant data and reasonably explained its choice.
- NEPA does not require an EIS when the agency reasonably concludes, after environmental review, that impacts are not significant; mitigation measures may be considered in evaluating significance.
- A court-ordered remand confined to specified issues limits subsequent judicial review to whether the agency complied with the remand instructions and reached a rational result on those issues.
- In the Corps’ permitting process, the public-interest review permits consideration of project benefits, environmental effects, alternatives, and competing water-user interests; technical disagreements do not justify reversal absent irrationality or failure to consider important factors.

## Conclusion

The district court sustained the federal permits for Virginia Beach’s Lake Gaston pipeline because the Corps’ post-remand NEPA analysis of striped-bass effects and its public-interest determination of Virginia Beach’s water needs reflected reasoned decisionmaking supported by the record and therefore survived deferential APA review.


State of N.C. v. Hudson, 731 F. Supp. 1261 (E.D.N.C. 1990)