EUGENE A. WRIGHT, Circuit Judge:
The petition for rehearing is denied. The suggestion to modify the opinion of January 23, 1981 is granted. The earlier opinion is withdrawn and the following opinion is substituted.
This case involves actions taken by a California highway agency. We affirm the district court's holding that the agency acted within the scope of its authority.
The City of South Pasadena, along with several individual and environmental groups, initiated this litigation in 1973. They sought an order requiring compliance
Among the defendants were the California Transportation Commission (CTC) and the California Department of Transportation (Caltrans).
In 1973 the district court entered an order based on a stipulation between the plaintiffs and state defendants, which provided:
The EIS was prepared by Caltrans. After circulating a draft EIS and holding public hearings on the project, it prepared and issued in 1977a Final EIS for a 1.6-mile alternate project.
The major reason for altering the original six-mile project was the displacement of population and business (with a resulting reduction in the property tax base) it would have caused. Most of the displacement would have occurred in South Pasadena.
Several federal officials, including the Administrator of the Federal Highway Administration (FHWA), were also defendants in the suit filed by South Pasadena. FHWA administers the Federal-Aid Urban Highway program. California has sought federal funds through this program for Route 7 construction.
Upon receipt of the Final EIS from Caltrans, FHWA indicated it would not recommend approval of the alternate project. It found the EIS to be inadequate and the project to lack support of local officials.
Meanwhile, the cities of Los Angeles, Pasadena, and Alhambra had intervened in the lawsuit. Unlike South Pasadena, the intervenors are in favor of the six-mile project. They seek to modify the district court's order by adding the following:
In addition, intervenors seek to impose time limits in which the enumerated actions are to take place.
The district court denied intervenors' motion to modify the order, on the grounds that Caltrans had not exceeded its authority in preparing the Final EIS on the alternate project.
The grant or denial of an injunction is normally within the discretion of the district court. This court may freely overturn the decision, however, if it was based on an erroneous conclusion of law. Kennecott Copper Corp. v. Costle, 572 F.2d 1349,
Intervenors contend Caltrans violated the 1973 Stipulation and Order and exceeded its statutory authority in preparing the Final EIS on the alternate project. The Stipulation and Order, in essence, required compliance with environmental laws. The issues are whether any of those laws were violated and whether Caltrans acted within the scope of his authority. Intervenors do not contend Caltrans acted arbitrarily or capriciously.
Five statutes are involved: the Federal-Aid Highway Act, 23 U.S.C. §§ 101 et seq.; the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et seq.; the California Streets and Highways Code; the California Government Code; and the California Environmental Quality Act (CEQA), Cal.Pub.Res. §§ 21000 et seq.
Intervenors argue that because Route 7 is part of the Federal-Aid Urban Highway System, and because NEPA requires FHWA to approve a Final EIS prior to approving a project, Caltrans has prevented FHWA from determining whether a Federal-Aid highway should be completed.
Neither the Federal-Aid Highway Act nor NEPA support intervenors' position. The Highway Act explicitly states it "shall in no way infringe on the sovereign rights of the States to determine which projects shall be federally financed." 23 U.S.C. § 145. It cannot be read to preclude a state from altering a project in response to environmental impacts.
Intervenors argue project selection for purposes of the Final EIS rests with CTC, and not with Caltrans, under California law. Both CTC and Caltrans reject this argument.
The California courts have not decided this question. Substantial deference is owed to a determination of state law by a district judge residing in the state. United States v. Humboldt, 628 F.2d 549, 551 (9th Cir. 1980).
California has a "complex legislative scheme for construction of freeway and expressway systems." Smith v. State, 50 Cal.App.3d 529, 123 Cal.Rptr. 745, 749 n.3 (1975). CTC appears to be the decisionmaking body. It has authority to "select, adopt, and determine" the location for state highways, Cal.Sts. & Hy. § 75, and to "alter or change" such locations. Id. § 71. It may delegate ministerial functions to Caltrans. Id. § 86.
A line of cases presenting challenges to CTC decisions to locate or relocate highways supports this view. The California courts have held consistently that the state legislature vested CTC with responsibility to select, adopt, and determine the location of state highways. E. g., Merced County Board of Supervisors v. California Highway
None of the cases, however, addresses the scope of Caltrans' authority. It is clear that highway construction is a long process involving many government agencies. Smith v. State, 50 Cal.App.3d 529, 123 Cal.Rptr. 745, 748-49 (1975).
Caltrans has statutory authority to "lay out and construct" state highways on the locations determined by CTC. Cal.Sts. & Hy. §§ 90, 100.1. It is to support CTC in developing balanced transportation planning and policy. Cal.Gov't. § 14030.
Caltrans has the power and duty to "maximiz[e] the amount of federal funds which may be available to the state and increas[e] the efficiency by which such funds are utilized." Id. It is authorized to plan and design "transportation systems which the legislature has made" its responsibility. Id.
Thus, although CTC's authority to locate state highways is clear, it appears Caltrans performed a discretionary function selecting and planning particular projects in 1977 when it prepared and issued the final EIS for the 1.6 mile alternate project.
CEQA directs "each public agency" to mitigate or avoid the significant effects on the environment of projects it approves or carries out whenever it is feasible to do so. Cal.Pub.Res. § 21002.1(b) (emphasis added). Residents Ad Hoc Stadium Committee v. Board of Trustees of the California State Universities and Colleges, 89 Cal.App.3d 274, 152 Cal.Rptr. 585, 596 (1979) (CEQA aimed at any agency intending to carry out a project).
CEQA's provisions supplement Caltrans' responsibilities under the state highway laws. Cf. National Resources Defense Council, Inc. v. Arcata National Corp., 59 Cal.App.3d 959, 131 Cal.Rptr. 172 (1976) (CEQA supplements Forest Practice Act). Caltrans had the task of complying with CEQA's requirements, both procedural and substantive. It was therefore obligated to consider alternatives and mitigate adverse consequences.
The regulations jointly promulgated by CTC and Caltrans to implement CEQA provide some support for this conclusion. Caltrans has acted as the Lead Agency, i. e., the agency "responsible for preparation of environmental documents." 21 Cal.Adm.Code § 1508(a). The Final EIS is supposed to incorporate revisions to the project, or reasons for rejecting such proposals. Id. §§ 1509.5(h) and 1511.6(b). If Caltrans lacked the authority to select an alternate project for the Final EIS, it could not fulfill its Lead Agency obligations.
In light of its authority under the highway laws and CEQA, we conclude that Caltrans acted within the scope of its statutory authority in preparing the Final EIS on the 1.6-mile alternative.
The district court did not abuse its discretion in deciding the state law issues. This litigation began in 1973, and it would be a waste of judicial time and unfair to the litigants to separate the state and federal question for resolution in different courts at this stage. See id.; Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974).
The regulations state:
Id. § 771.18(j)(3).
FHWA's regulations thus interpret the Highway Act and NEPA to leave project selection to the state agency and to allow selection of an alternative as the project for the Final EIS.
Intervenors note that the Stipulation and Order enjoins any construction on the project until FHWA approves a Final EIS. The propriety of that aspect of the order is not before us. The state has not sought to proceed with the project without federal funding.