SNEED, Circuit Judge:
This is an appeal from an order granting the plaintiffs' motions for a preliminary injunction restraining the defendants including the California Highway Commission, from proceeding with State Project 238, a proposed highway of 14 miles that will pass through three California cities, Hayward, Union City, and Fremont. The purpose of the injunction is to secure compliance by the California Highway Commission with 42
The Commission's position on this appeal is that these provisions are applicable only in the sense that compliance is necessary in order to obtain federal funding. Under this interpretation the Commission would have an option to obtain federal funding by complying with these provisions. Failure to comply merely would deprive the State of federal funds. The determination whether the condition precedent to federal funding had occurred would be appropriate only at the final state of the approval process outlined in 23 U.S.C. § 106(a), the so-called "construction approval."
We do not agree with the Commission's interpretation of these provisions. The general purpose of these statutes and regulations is to assure that projects for which federal funding might become available are carried out in a way that will afford the protection both to those displaced that 42 U.S.C. §§ 4622-4655 provides and to the environment, including public parks, that is commanded by 49 U.S.C. § 1653(f) and 23 U.S.C. § 138. The effectuation of this purpose makes necessary both the carrot and the stick. Without the stick there will be fewer instances in which compliance with these provisions will be achieved. This is true because the Commission under its interpretation would be able to secure the program approval contemplated by 23 U.S.C. § 105 for a greater number of projects than could be funded by the sums apportioned and made available pursuant to 23 U.S.C. § 104 and § 106(a) and to qualify for actual funding only those projects with respect to which compliance proved to be relatively easy and inexpensive.
We believe that Judge Peckham correctly interpreted the applicable statutes and regulations to require compliance by the Commission with those provisions providing relocation assistance and protecting the environment "before location approval, [and] prior to federal funding of a project." La Raza Unida v. Volpe, 337 F.Supp. 221, 231 (N.D.Calif.1971). Moreover, it is our view that it is much too late for the State to avoid compliance by withdrawing State Project 238 from the Federal-aid system described in 23 U.S.C. § 103.
Under the facts of the case before us, we see no reason to disturb the preliminary injunction ordered by the District Court. It is consistent with the position taken by this Circuit in Lathan v. Volpe, 455 F.2d 1111 (9th Cir.1971).
La Raza Unida v. Volpe, 337 F.Supp. 221, 234 (N.D.Cal., 1971).
Two of the approvals upon which funding depend are statutorily mandated. These are known as "program approval", 23 U.S.C. § 105(a), and "approval of plans, specifications and estimates" or "P S & E approval", 23 U.S.C. § 106(a). Program approval, which is to occur "as soon as practicable after the apportionments for the Federal-aid systems have been made for any fiscal year", 23 U.S.C. § 105(a), and which is necessary to enable the State to receive any reimbursement for a project, does not impose on the federal government a contractual obligation to pay its share of the project's costs. It is not until there has been "P S & E" approval, which is normally deferred until the state is actually ready to receive reimbursement funds, that any binding obligation arises. 23 U.S.C. § 106(a).
In conjunction with the required statutory approvals, there are three additional approvals which are mandated by the applicable administrative regulations. Under 23 U.S.C. § 128(a), the state highway department must certify that it has given formal consideration to "the social, economic, environmental, and other effects" of a proposed route and its alternative possibilities. In order to meet this requirement, where the proposed highway is to pass through a city FHWA regulations require the State to hold a public hearing — called the "corridor hearing" — on the location of the route. Assuming that the State has held such a hearing, and fully complied with all other "applicable laws and regulations", Policy and Procedure Memorandum (PPM) 20-8 (January 14, 1969), then "location approval" is accorded the project. The State must then hold a second hearing — called the "design hearing" — concerning the proposed engineering design for the project. Again, the State must demonstrate compliance with all federal laws and regulations before "design approval" is given. Both location approval and design approval follow program approval of the project but must occur before P S & E approval is given under Section 106.
At some point, prior to P S & E approval, the State is required, inter alia, to give "satisfactory assurances" that it can provide prospective displacees with adequate relocation housing and payments. 23 U.S.C. § 502. See also Information Memorandum 80-1-68. In addition, it must also prepare and submit an environmental impact statement as required by the National Environmental Policy Act of 1969. 42 U.S.C. § 4321 et seq. See Lathan v. Volpe, 455 F.2d 1111 (9th Cir.1971). If these requirements are met, together with all other applicable laws and regulations, then P S & E approval is given under 23 U.S.C. § 106 and the federal government becomes bound to contribute to the project.
Generally P S & E approval leads to right-of-way acquisition and preparation for construction. Assuming that no problems arise, the final FHWA approval, known as "authorization to proceed with work approval", PPM 21-1 (April 15, 1950), is then received and actual construction of the project begins.