source: Caselaw Access Project

author: WEBSTER, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Appellee-Cross Appellant, v. 1,162.65 ACRES OF LAND, MORE OR LESS, Situate IN HENRY AND ST. CLAIR COUNTIES, STATE OF MISSOURI, et al., Appellants-Cross Appellees.
    Nos. 73-1540 and 73-1594.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 11, 1974.
    Decided June 20, 1974.

      David Lee Wells, North Kansas City, Mo., for appellants-cross appellees.
    Robert L. Klarquist, Atty., App. Sect., Dept, of Justice, Land & Natural Resources Division, Washington, D. C., for appellee-cross appellant.
    Before MEHAFFY, Chief Judge, and GIBSON and WEBSTER, Circuit Judges.
   WEBSTER, Circuit Judge.

This is an appeal and cross-appeal from the judgment of the District Court of the Western District of Missouri awarding appellants $95,000 as compensation for lands taken by the United States in a condemnation action. We affirm the judgment of the District Court.

Fifteen tracts of land in Henry and St. Clair Counties, Missouri were condemned by the government for use in connection with the construction and establishment of the Harry S. Truman Dam and Reservoir in the Missouri River Basin; judgment upon declaration of taking was entered August 3, 1970. Included were two tracts, Nos. 5319 and 5508, which were owned by appellants Johnnie E. Stephens and Thelma D. Stephens. A third tract (“Parcel A”), owned by appellants and used with Nos. 5319 and 5508 as an integrated farming operation since 1951, was not taken.

After the initial pleadings were filed, the matter was referred by the court to a commission pursuant to Rule 71A, Federal Rules of Civil Procedure. The commission was instructed to make alternative findings: (1) just compensation for the taking on the assumption that tracts 5319, 5508 and Parcel A were “a single tract” on August 3, 1970; and (2) just compensation for the taking without reference to Parcel A. The litigants presented the commission with a dilemma. Appellants, insisting that the three tracts were a single unit, presented only evidence of the value of the tracts as a unit, with agricultural purposes as the highest and best use. They furnished no evidence on the value of tracts 5319 and 5508 without reference to Parcel A. On the other hand, the government took the position before the commission that Parcel A was not an integral unit with Nos. 5319 and 5508, and even if it was to be so considered, its value should be based on a highest and best use as residential property, and therefore was unaffected by the severance of the agricultural tracts. The commission accepted the government’s evidence as the only evidence of value without reference to Parcel A and found that just compensation on this basis was $65,000. Alternatively, treating all three parcels as a unit, it fixed just compensation at $87,500.

The commission found that the fair market value of the unit before taking was $130,000 and the market value of Parcel A after the taking was $42,500. The latter value was based on the commission’s view that the highest and best use for Parcel A was rural residential. The commission credited and discredited certain aspects of each expert’s testimony and the underlying evidence in reaching the conclusion that the fair market value of the single tract lay in between the estimates of the opposing experts. For example, the commission found that the government witness’ method of classifying the acreage of each field was more accurate than that of the landowners’ experts, but found the landowners’ testimony as to productivity of the tracts more knowledgeable than that of the government.

The trial court found that the taken tracts and Parcel A constituted a single unit within the meaning of United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L.Ed. 336 (1943). The court stated:

We conclude that the applicable working rule requires that if, on the facts of a particular case, it is determined that the particular tracts condemned were, at the time of taking, in fact being used and devoted to a unitary use together with another tract, the tracts taken and the tracts not taken must be considered as a single unit in both the before and after valuations of the formula recognized and reiterated in Miller. Unless both before and after expert opinion is considered on such a unitary basis, the essential element which arises ‘out of the relation of the part taken to the entire tract’ would and could not be given appropriate consideration and would therefore be totally disregarded. We reject all parts of the Commission’s report which proceeded on the basis of any rule to the contrary.

Thus the court rejected that portion of the commission’s findings which approved the government’s theory that Parcel A was a separate tract or part of a unitary tract with a different highest and best use.

The court then held:

The Commission made an express finding that the fair market value of all three tracts had a before value of $130,000. That finding cannot properly be said to be clearly erroneous. That finding was some $40,000 less than any of the opinions expressed by landowner’s witnesses in regard to the before value of all three tracts when considered as a unit. The Commission, however, ruled the disputed issues in regard to land classification generally in favor of the government’s witnesses. It also expressed some reservation about some of the testimony given by the landowner’s expert witnesses who were apparently more familiar with sales in counties other than St. Clair, although the Commission candidly stated that sales of comparable land anywhere were not of too much assistance.
Our review of the record convinces us that the Commission’s before valuations of $130,000 for all three tracts as an entity was based upon a proper evaluation of the substantial evidence presented. We therefore accept that portion of the Commission’s report.

The court rejected, however, the commission’s after value findings as not supported by any substantial evidence in the record and outside the scope of the properly admitted expert testimony. The $42,500 figure was arrived at by the commission, the court concluded, “independent of any relation which Parcel A had to the entire tract.” Based on its review of the evidence in the record, and pursuant to Rule 53(e)(2), Fed.R.Civ.P., the court found the after value .of the remainder to be $35,000 and just compensation for the taken portion to be $95,000.

I

Appellants argue that the trial court erred in failing to reject the commission’s finding of the before taking value of the unit because the $130,000 figure was outside the range of opinion testimony by appellants’ expert witnesses. This argument is premised on the assumption that the “scope of the evidence” rule in condemnation cases means the factfinder must find a value figure between the extreme dollar amounts admitted as the experts' ultimate value opinions for the property. We reject this contention.

While in most cases the verdict of the jury, commission or court falls within that range and is upheld for that reason, cases upholding verdicts outside that range where the verdict is supported by other evidence are numerous: e. g., Chandler v. United States, 372 F.2d 276, 280-281 (10th Cir. 1967); McCandless v. United States, 74 F.2d 596, 603-604 (9th Cir. 1935), rev’d on other grounds, 298 U.S. 342, 56 S.Ct. 764, 80 L.Ed. 1205 (1936); Young v. Arkansas State Highway Commission, 242 Ark. 471, 414 S.W.2d 87, 88-89 (1967); Loschi v. Massachusetts Port Authority, 282 N.E.2d 418, 419 (Mass.1972); Appelstein v. Boston Redevelopment Authority, 359 Mass. 746, 269 N.E.2d 224, 224-25 (1971); In re Simmons, 132 App.Div. 574, 116 N.Y.S. 952, 953-954 (1909); Williams v. City of Seattle, 83 P. 242, 243-244 (Wash.1906). See generally 5 Nichols on Eminent Domain § 17.3, at 17-41-42 (3d ed. 1969). The rationale for this broader view was explained long ago in Williams v. City of Seattle, supra, where the jury had awarded an amount less than any expert opinion and the landowners attacked the verdict as inadequate, claiming the award must be within the range of expert opinion. The court stated:

Answering appellants’ contention that there was no evidence to sustain a verdict for less than $400, we call attention to the fact that the placing of an amount upon this property by each of the witnesses as its value was merely the expressing of the opinion of such witness. . . . Each and all of these witnesses gave a description of this property, and stated numerous facts calculated to show its advantages and disadvantages; considerable evidence being given as to the selling price of other real estate in that part of the city. All of this evidence had to do with facts which the jury had a perfect right, and which it was their duty, to consider in arriving at their verdict. The facts thus established by this evidence evidently led the jury to reach an opinion in their own minds which was different from that of any of the witnesses.

83 P. at 243-244.

Appellants’ argument here similarly fails to take into account the substantial body of evidence presented to and considered by the commission.

A fair reading of the commission’s report discloses that it did not rely on dollar valuations of the parties’ experts, but rather on the underlying evidence upon which those opinions were based. Certain portions of that evidence, as presented by both parties’ experts, were discredited by the commission. The commission found that the landowners’ experts generally overvalued the assortment of buildings on the premises while the government’s expert failed to give them adequate consideration; the government’s method of determining usable acreage of each parcel was deemed to indicate to “a greater degree of accuracy the acreage of each field”; and, significantly, the disputed classification of the various types of farmland within the unit was generally found to be more consistent with the government’s expert’s findings.

The trial court acknowledged that the commission’s before value finding was some $40,000 below the opinions expressed by landowners’ experts, but it concluded that finding was not clearly erroneous because it was supported by substantial evidence in the record. Our task is to review the findings of the trial court, not the commission, and determine whether those findings are clearly erroneous. United States v. Hilliard, 412 F.2d 174 (8th Cir. 1969); United States v. 44.00 Acres of Land, 234 F.2d 410 (2d Cir.), cert. denied sub nom Odenback v. United States, 352 U.S. 916, 77 S.Ct. 215, 1 L.Ed.2d 123 (1956); United States v. Twin City Power Co., 248 F.2d 108 (4th Cir. 1957), cert. denied, 356 U.S. 918, 78 S.Ct. 702, 2 L.Ed.2d 714 (1958). We find no error here.

II

The government, on the other hand, contends in its cross-appeal that Parcel A should have been separately valued (before and after taking) as rural residential property. The trial court properly rejected this contention. It has consistently been held improper to arrive at just compensation by adding together separate values for portions of a single unit of property with different highest and best uses — the property must be valued as a whole. United States v. Lewis, 308 F.2d 453 (9th Cir. 1962); United States v. Buhler, 305 F.2d 319 (5th Cir. 1962); United States v. Carroll, 304 F.2d 300 (4th Cir. 1962); United States v. 158.76 Acres of Land, 298 F.2d 559 (2d Cir. 1962); United States v. Wateree Power Co., 220 F.2d 226 (4th Cir. 1955); Morton Butler Timber Co. v. United States, 91 F.2d 884 (6th Cir. 1937).

Ill

The District Court had power under Fed.R.Civ.P. 71A and 53(e)(2) to modify the report of the commission without the necessity of de novo proceedings. United States v. Hilliard, supra.

In summary, we hold that the conclusion of the trial court that the three tracts were devoted to a unitary use which subjected Parcel A to severance damages was not clearly erroneous, that its findings with respect to before-taking and after-taking values and the resulting amount of just compensation were supported by the evidence and likewise were not clearly erroneous, and that it correctly applied the applicable law.

Affirmed.

      . Parcel A, 179 acres, was located approximately six miles from the taken tracts. It was used to pasture cattle from April to late Fall. Crops and hay were grown there. A house was located on the tract.

      . The court refused a government request to decide prior to trial if the three parcels were “a single tract” as a matter of law and reserved that question for later determination.

      . The landowners’ experts valued tracts 5319, 5508 and Parcel A as a single unit with a highest and best use for agricultural purposes, and their valuations of the before taking value of this unit ranged from $185,000 to $170,000. Their valuation of the after taking value of Parcel A ranged from $36,550 to $30,000. The government witness, who opined that the taken tracts had a fair market value of $65,000 and a highest and best use for agricultural purposes, testified that Parcel A had a highest and best nse for suburban residential purposes and as such was worth $54,000 both before and after the taking and whether or not Parcel A was part of a single unit.

      . The court held that the commission had made this finding and the finding was “not clearly erroneous for it is based upon substantial and undisputed evidence.” The commission was without authority to reach this conclusion under the alternative finding order and, in fact, did not reach it. The government, however, does not contest this finding on appeal, and the issue, therefore, is not before us. We view the finding as that of the District Court.

      . The rule is that an award of just compensation will not be disturbed if it is within the scope of the evidence. Generally, this rule can be simply applied by determining whether the award falls within the extremes of the adverse parties’ experts’ opinion testimony. Evans v. United States, 326 F.2d 827 (8th Cir. 1964); D. H. Overmyer Warehouse Co. v. Kuniansky, 419 F.2d 1280 (5th Cir.), cert. denied, 398 U.S. 905, 90 S.Ct. 1697, 26 L.Ed.2d 64 (1970); United States v. Benning, 330 F.2d 527 (9th Cir. 1964). These cases, which apply the rule by focusing on the experts’ dollar valuations, in no way limit application of the rule to those valuations. It is equally clear that where the totality of the evidence supports the award it will be upheld notwithstanding the fact it is outside the range of all the experts’ valuations. M. g., Chandler v. United States, 372 F.2d 276 (10th Cir. 1967).

      . However, the government’s expert’s testimony as to the lesser value of “wet” bottom cropland compared to bottom cropland was found to be contrary to the evidence. The commission also found that given the evidence on the productivity of these parcels the government witness’ opinion of market value was insufficient.


author: IRVING R. KAUFMAN, Chief Judge:

text:
    Richard A. GORDON, Individually and as President of Independent Investors Protective League, an unincorporated association, and in behalf of the membership thereof and in behalf of all persons similarly circumstanced, Plaintiff-Appellant, v. NEW YORK STOCK EXCHANGE, INC., et al., Defendants-Appellees.
    No. 1045, Docket 74-1043.
    United States Court of Appeals, Second Circuit.
    Argued June 5, 1974.
    Decided June 28, 1974.
    I. Walton Bader, New York City (Bader & Bader, New York City, on the brief), for plaintiff-appellant.
    William E. Jackson, New York City (Milbank, Tweed, Hadley & McCloy, Lord, Day & Lord, Brown, Wood, Fuller, Caldwell & Ivey, New York City, on the brief, Isaac Shapiro, Mark L. Davidson, John J. Loflin, James B. May, New York City, of counsel), for defendants-appellees.
    Seymour H. Dussman, Atty., Dept, of Justice, Washington, D. C. (Thomas E. Kauper, Asst. Atty. Gen., on the brief), as amicus curiae urging reversal.
    Lawrence E. Nerheim, Gen. Counsel, Securities Exchange Commission, Washington, D. C. (Walter P. North, Associate Gen. Counsel, Frederic T. Spindel, Sp. Counsel, Theodore L. Freedman, Washington, D. C., Atty., on the brief), as amicus curiae urging affirmance.
    Before KAUFMAN, Chief Judge, and MANSFIELD and MULLIGAN, Circuit Judges.
   IRVING R. KAUFMAN, Chief Judge:

Whether the minimum rate structure presently employed by the nation’s stock exchanges enjoys immunity from attack under the antitrust laws is a question of such importance that we need not belabor its significance. The Supreme Court in Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963), although subjecting the application of an exchange rule to antitrust scrutiny, acknowledged that if there were Securities Exchange Commission [SEC] jurisdiction to review a challenged rule, a different case would arise concerning antitrust exemption. We are here presented with that different case.

The complaint itself provides all the facts necessary for our disposition. Richard A. Gordon brought this private antitrust action on April 2, 1971, on his own behalf and for a purported class of small investors, against the New York Stock Exchange, Inc. [NYSE], the American Stock Exchange, Inc. [Amex], and two representative member firms of the exchanges, alleging that the exchanges’ fixed minimum commission system violated the Sherman Act, 15 U.S.C. §§ 1 and 2 (1970), and the RobinsonPatman Act, 15 U.S.C. § 13(a) (1970). More specifically, we read Gordon’s complaint to have alleged: (1) that the exchange rules providing for a volume discount from the minimum commission rate in the case of large transactions, together with negotiated rates only on portions of orders in excess of $500,000, and the interim surcharge on transactions involving less than 1000 shares, amounted to a system of price discrimination in violation of the Robinson-Pat-man Act, 15 U.S.C. § 13(a) (1970), and the Sherman Act, 15 U.S.C. §§ 1, 2 (1970); and (2) that the fixed commissions charged those unable to avail themselves of negotiated rates constituted a scheme of price-fixing, contrary to the provisions of the Sherman Act, 15 U.S.C. §§ 1, 2 (1970).

Without reaching the merits of Gordon’s principal claims, the district court found the challenged practice of fixing commission rates not within the jurisdiction of an antitrust court since judicial oversight of this particular aspect of exchange self-regulation had been displaced by the review power vested in the SEC under § 19(b) of the Securities Exchange Act of 1934 [1934 Act], 15 U.S.C. § 78s(b) (1970). Acr cordingly, the district court granted the defendants’ motion for summary judgment, and dismissed the complaint. For the reasons set forth below, we agree.

Since Gordon’s other claims are essentially frivolous, we turn directly to his principal allegation that the exchange practice of fixing commission rates violated the Sherman Act. Any analysis of the interrelation of the antitrust laws and the system of supervised exchange self-regulation embodied in the 1934 Act must begin with Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963). The Court was there asked to decide whether the NYSE’s enforcement o'f an exchange rule without notice or hearing, resulting in the removal of a nonmember’s private telegraph wires from member offices— concededly a group boycott — was subject to antitrust scrutiny. Seeking to achieve the requisite accommodation between the antitrust laws and the 1934 Act’s policy of exchange self-regulation, Mr. Justice Goldberg, speaking for a majority of the Court, formulated the following test:

Repeal [of the antitrust laws] is to be regarded as implied only if necessary to make the Securities Exchange Act work, and even then only to the minimum extent necessary.

373 U.S. at 357, 83 S.Ct. at 1257.

In Silver, the Court concluded that exercise of its antitrust jurisdiction was proper for two reasons. Because there was no possibility of SEC review of the challenged act — disconnection of Silver’s wires to member offices — assertion of judicial oversight would have resulted in no conflict, between agency and court, rendering cumbersome and inconsistent the system of administrative regulation. 373 U.S. at 358, 83 S.Ct. 1246. Moreover, denial of antitrust jurisdiction on the facts presented in Silver would have left no governmental body to perform the antitrust function of preventing an injury to competition which could not be justified as furthering legitimate self-regulatory ends. Id. at 358-361, 83 S.Ct. 1246. Though the Court hinted that some breathing space should be left the exchange for unsupervised self-regulation, if found inexcusable the failure to provide the procedural safeguards of notice and hearing. Id. at 361-367, 83 S.Ct. 1246.

The instant case, of course, is toto cáelo different from Silver, for there is here governmental oversight of the fixing of commission rates, vested expressly in the SEC pursuant to § 19(b)(9) of the 1934 Act, 15 U.S.C. § 78s(b)(9) (1970). And, as we have indicated, the Silver Court recognized that a “different case” would be posed if the exchange practice allegedly violative of the antitrust laws were subject to control by the SEC. Although the Silver rationale might well authorize us to ground our holding here on the existence of SEC review power, we do not rely upon that authority alone to support a finding of antitrust immunity. Rather, we are of the view that both the language and the history of the 1934 Act, together with the sound policy behind supervised exchange self-regulation, mandate the conclusion that Congress intended to exempt from the antitrust laws the exchange practice of fixing commission rates.

Section 19(b) of the 1934 Act states, in pertinent part:

The Commission is further authorized, if after making appropriate request in writing to a national securities exchange that such exchange effect on its own behalf specified changes in its rules and practices, and after appropriate notice and opportunity for hearing, the Commission determines that such exchange has not made the changes so requested, and that such changes are necessary or appropriate for the protection of investors or to insure fair dealing in securities traded in upon such exchange or to insure fair administration of such exchange, by rules or regulations or by order to alter or supplement the rules of such exchange (insofar as necessary or appropriate to effect such changes) in respect of such matters as . . . (9) the fixing of reasonable rates of commission, interest, listing, and other charges .

It is clear from this language that the “congressional aim in supervised self-regulation is to insure fair dealing and to protect investors from harmful or unfair trade practices,” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U.S. 117, 130, 94 S.Ct. 383, 391, 38 L.Ed.2d 348 (1973). It is equally plain that Congress considered the “fixing of reasonable rates of commission” to be essential to meeting these goals, for it listed this factor explicitly among the twelve items so denominated. Finally, and most importantly for this jurisdictional dispute between an antitrust court and the SEC, Congress vested in the Commission the power to determine whether changes are “necessary” in the exchanges’ rate-fixing practices to assure fulfillment of the goals of the Act. Accordingly, Congress defined in § 19(b) those matters fundamental to achieving “the aims of the Securities Exchange Act,” Silver v. New York Stock Exchange, 373 U.S. at 361, 83 S.Ct. at 1259, and accorded the SEC the authority to make whatever changes respecting those matters are “neccessary or appropriate” (§ 19(b)) to effectuate those aims — i. e., in the terms of the Silver test, “necessary to make the Securities Exchange Act work.” 373 U.S. at 357, 83 S.Ct. at 1257.

If the discussion in Silver of a core of exchange self-regulation necessary to make the 1934 Act work, and thus immune from application of the antitrust laws, is to be given any meaningful application, we are of the view that it must have reference to the practices enumerated in § 19(b), and in this instance to the fixing of reasonable rates of commission. The Supreme Court also recognized in Silver that the exercise of antitrust jurisdiction, where it conflicted with a power of review expressly delegated to the SEC, could render ineffective the supervised self-regulatory scheme designed to accomplish the aims of the 1934 Act. 373 U.S. at 358-361, 83 S.Ct. 1246. Frustration of those aims would be the inevitable consequence of duplicative or inconsistent standards announced contemporaneously by courts and Commission.

That Congress intended Commission-supervised exchange self-regulation to be of central importance in the scheme of the 1934 Act is emphasized by the legislative history of the Act. Both House and Senate reports stress the broad responsibility left with the exchanges to administer their own affairs. H.R.Rep.No.1383, 73d Cong., 2d Sess. 15 (1934); S.Rep.No.792, 73d Cong., 2d Sess. 13 (1934). The grant of this unique self-regulatory power, however, was conditioned upon the creation of the SEC, invested with brOad discretionary powers equal to the complex and changing nature of the problems arising in the securities industry. Cf. H.R.Rep. No.1383 at 6-7. Rather than charge the Commission with oversight of specific instances of abuse, Congress authorized it to condition an exchange’s right to register upon its enactment of rules “just and adequate to insure fair dealing and to protect investors.” 15 U.S.C. § 78f(d) (1970). And as to several specific matters inextricably linked with “fair dealing” and “protection of investors” from harmful or unfair trade practices, the Commission was empowered by § 19(b), to order exchanges to make such amendments in their rules as the Commission found necessary to carry out the purposes of the Act.

Yet the legislative history of the Act does not simply indicate the central significance of supervised self-regulation in effectuating the purposes of the Act. Concerning the practices here challenged, we find most persuasive Congress’s manifest recognition of the Commission’s competence to serve the necessary antitrust objective of preserving competition, by delegating to it control over practices which, but for § 19(b) of the 1934 Act, would be per se violations of the antitrust laws. Those familiar with the development of antitrust law know that seven years before the Securities Exchange Act was passed, the Supreme Court decided that price-fixing was a per se violation of the Sherman Act. United States v. Trenton Potteries Co., 273 U.S. 392, 47 S.Ct. 377, 71 L.Ed. 700 (1927). Despite this clear holding, the 1934 Act explicitly provides for “the fixing of reasonable rates of commission, interest, listing, and other charges” [emphasis added]. 15 U.S.C. § 78s(b)(9) (1970). Reference to the Senate hearings dispels any doubt on this score, for they make plain the congressional awareness that this provision “would permit the Commission to fix rates.” Hearings on S.Res. 84 (72d Cong.) and S.Res. 56 and S.Res. 97 (73d Cong.) Before the Senate Comm, on Banking and Currency, 73d Cong., 1st and 2d Sess., pt. 16, at 7705 (1934) (statement of Samuel Untermyer). Moreover, the practice in the securities field of industry-wide agreement on minimum fees — dating back to 1792, see SEC, Report of Special Study of Securities Markets, H.R.Doc.No.95, 88th Cong., 1st Sess., pt. 2, at 295 (1963) — was repeatedly acknowledged both in committee hearings, see Hearings on S.Res. 84 (72d Cong.) and S.Res. 56 and S.Res. 97 (73d Cong.) Before Senate Comm, on Banking and Currency, 73d Cong., 2d Sess., pt. 13, at 6075, 6080-81 (1934); Hearings on H.R. 7852 and H.R. 8720 Before the House Comm, on Interstate and Foreign Commerce, 73d Cong., 2d Sess., at 423-34 (1934), and in the debates on the Act, see, e. g., 78 Cong.Rec. 8087, 8091-92, 8490, 8493-94 (1934).

We draw two conclusions from this delegation of power over exchange commission rates. By permitting so potentially harmful a practice as rate-fixing, Congress recognized that the exchange commission system bore crucially upon achievement of the goals of the 1934 Act. Further, by placing in the hands of the SEC the regulation of rate-fixing —a practice the effects of which the Supreme Court acknowledged its inability to assess, see United States v. Trenton Potteries, supra, 273 U.S. at 398, 47 S.Ct. 377 — Congress made clear its judgment of the Commission’s competence to assume the central role in assuring investor protection and exchange fair dealing.

Exemption from the antitrust laws with regard to the fixing of minimum rates of commission is not only mandated by both the language and the legislative history of the 1934 Act, and in particular § 19(b)(9), but is grounded as well in sound policy considerations governing regulation of the securities industry. Of principal concern is the danger, clearly contemplated by Silver, 373 U.S. at 358, 83 S.Ct. 1246, that courts and the SEC would subject exchanges to repetitive or conflicting standards. There is little question but that the commission rate structure is the keystone of the economic viability of the brokerage industry, and a matter of vital importance to individual investors as well. Steering effectively between the often competing interests of “seller” and “buyer” — reducing the barriers to investor trading, while at the same time assuring a return sufficient to preserve brokerage capacity — becomes far too hazardous with two hands on the tiller.

Nor are the hazards of repetition and conflict in this case a matter of mere speculation, as a review of the wide-reaching and systematic character of recent SEC action regarding rate regulation makes evident. In 1963, following the congressional mandate embodied in 15 U.S.C. § 78s(d), the SEC published its extensive Report of Special Study of Securities Markets, H.R.Doc.No.95, 88th Cong., 1st Sess. (1963), dealing among other other matters with the practice of fixing stock exhange commission rates. Recent Commission action with regard to the particular practices challenged by Gordon began in 1959, with a request to the NYSE to study the possible introduction of a volume discount. See SEC Securities Exchange Act Release No. 5889 (Feb. 20, 1959). Comment was requested on both NYSE and SEC proposals on January 26, 1968. SEC Securities Exchange Act Release No. 8239 (Jan. 26, 1968). On May 28, 1968, the NYSE was asked either to implement a suggested commission schedule incorporating volume discounts for round lot portions over 400 shares, or to eliminate minimum commissions on portions of orders in excess of $50,000, before September 15 of the same year. Public hearings, also were commenced on May 28, 1968, to determine “changes in the present commission rate structure . required to benefit the investing public.” SEC Securities Exchange Act Release No. 8324 (May 28, 1968). The same release requested that other exchanges make “appropriate” changes similar to those demanded of the NYSE. The Commission thereafter notified the NYSE that the requirements of Release No. 8324 would be satisfied by provision for a volume discount on orders in excess of 1000 shares, Letter of Manuel F. Cohen to Robert W. Haack (August 30, 1968), and on September 4, 1968, it extended the mandated effective date to December 5, 1968. SEC Securities Exchange Act Release No. 8399 (Sept. 4, 1968).

Commission approval was given on August 2, 1970, for the interim surcharge challenged by Gordon, in order “to provide emergency financial relief while more fundamental alterations of the existing rate structure can be considered.” Approval was subject to the understanding that the surcharge would expire after 90 days, and that the NYSE would restore full brokerage services for small investors and remove transaction size and other limitations on such accounts. Letter of Hamer H. Budge to Robert W. Haack, April 2, 1970. Approval was given on similar conditions to the Amex proposed rule 396, requesting a like interim surcharge. Letter of Irving M. Pollack to Ralph S. Saul, April 10, 1970. The terms of the surcharges were thereafter extended, SEC Securities Exchange Act Release No. 8923 (July 2, 1970), and expired in March (NYSE) and April (Amex) of 1972.

The recent SEC program which aims at gradual introduction of negotiated rates strongly enforces our view that it would be unwise for a court to interfere under the antitrust laws. Although SEC Securities Exchange Act Release No. 8324 (May 28, 1968) contemplated the introduction of negotiated rates as an alternative to volume discounts, the Commission determined by October 22, 1970, that fixed charges on portions of orders in excess of $100,000 were — even when joined with volume discounts — neither necessary nor appropriate to achieving the purposes of the 1934 Act. Letter of Plamer H. Budge to Robert W. Haack, October 22, 1970; SEC Securities Exchange Act Release No. 9007 (Oct. 22, 1970). The Commission subsequently indicated that a $500,000 “breakpoint” would be acceptable, Letter of Richard B. Smith to Robert W. Haack, February 10, 1971; SEC Securities Exchange Act Release No. 9105 (March 11, 1971), and sent to the other exchanges copies of its correspondence with the NYSE regarding negotiated rates for their “appropriate consideration.” Letter of Irving M. Pollack to the presidents of the American, Boston, Cincinnati, Detroit, Midwest, National, Pacific Coast, Philadelphia-Baltimore-Washington, Salt Lake, and Spokane Stock Exchanges, March 17, 1971. In its Statement on the Future Structure of the Securities Markets (Feb. 2, 1972), issued subsequent to the initiation of Gordon’s lawsuit, the Commission announced its conclusion, grounded on the results of monitoring undertaken concurrently by the SEC and the exchanges, that a reduction in the break-point to $300,000 was appropriate, and commanded its implementation by April of 1972. Not long thereafter, SEC Securities Exchange Act Release No. 10383 (Sept. 11, 1973) decreed the end of all fixed commission rates by April 30, 1975. As a further step in the process of gradual abandonment, SEC Securities Exchange Act Release No. 10560 (Dec. 14, 1973) requested the immediate introduction of limited price competition in transactions falling below the current breakpoint.

The Commission’s program of measured introduction of negotiated rates has been carefully gauged to avoid undesirable side-effects on both the industry and the investing public. The Statement on the Future Structure of the Securities Markets, 15, cautions:

We must bear in mind . . . that we are dealing with an industry which has operated under fixed commission rates for a very long time. It is necessary to measure the effect of competitively determined commissions very carefully on a step by step basis.

We are told, for example, that among the consequences certain to result from the introduction of negotiated rates across the boards is the failure of a number of inefficient brokerage firms. Baxter, NYSE Fixed Commission Rates: A Private Cartel Goes Public, 22 Stan. L.Rev. 675, 699 (1970). The SEC study revealed that the exchanges have operated for a long time under cartelized commission rates, which exceed those which would have been charged by firms of efficient scale. Thus, firms too small and inefficient to survive in a competitive market have so far been sheltered. Introduction of negotiated rates across the entire range of trades would, it is thought, cause many of these firms to go under. Baxter, supra, 22 Stan.L.Rev. at 699. Much of the damage resulting from such attrition would be borne by the investing public, to whom failing member firms would be indebted in the form of credit balances. Measured withdrawal could avoid the loss of those investor funds by allowing failing brokers to “exit by orderly merger or liquidation rather than by bankruptcy.” Note, Fixed Brokerage Commissions: An Antitrust Analysis After the Introduction of Competitive Rates on Trades Exceeding $500,000, 85 Harv.L.Rev. 794, 811 (1972).

We have recounted at such length the Commission’s actions on brokerage rate changes not solely to demonstrate the extraordinarily active surveillance by the Commission, in accordance with Congress’s expressed declaration, nor even to establish that the invocation of antitrust jurisdiction would result in repetition of and conflict with SEC action. Of greater importance, it seems to us, is the reminder it offers that when something as crucial to the survival of the securities industry as its very ancient rate structure is at stake, diagnoses and changes must come from an agency with the Commission’s expertise. The wisdom of the SEC’s actions is, of course, not before us. We stress only that it is clear that, with respect to the fixing of commission rates, the process of administrative review in the first instance is far superior to judicial review.

That Congress recognized agency superiority in this regard should not, moreover, come as a great surprise, for the courts themselves, by the time of the 1934 Act’s passage had admitted as much in abandoning the rule of reason approach to price-fixing. Indeed, the adoption of a standard of per se illegality in Trenton Potteries was thought necessary by the Supreme Court to relieve the judiciary of the need to determine the reasonableness of prices set by horizontal agreement. The Court there stated:

In the absence of express legislation requiring it, we should hesitate to adopt a construction [of the Sherman Act] making the difference between legal and illegal conduct in the field of business relations depend upon so uncertain a test as whether prices are reasonable — a determination which can be satisfactorily made only after a complete survey of our economic organization and a choice between rival philosophies.

United States v. Trenton Potteries, 273 U.S. 392, 398, 47 S.Ct. 377, 379, 71 L.Ed. 700 (1927). Such questions as the effect of fixed commission rates on trading volume and broker solvency, or the effect of competition on and the necessity for exchange membership, are not of the sort which courts can answer as well as the SEC. The statutory scheme exhibits congressional confidence that the Commission will be more capable of resolving problems of this nature.

We are not unmindful of the Seventh Circuit’s decision in Thill Securities Corp. v. New York Stock Exchange, 433 F.2d 264 (7th Cir. 1970), heavily relied upon by Gordon and the Department of Justice as amicus curiae for appellant. The claim there presented against the NYSE’s anti-rebate rule is of a different character from Gordon’s challenge to rate-fixing practices. For, as the Thill court stated, there was “no evidence as to the extent to which the challenged rule is subject to actual review by the SEC . . . ” 433 F.2d at 270. Moreover, the anti-rebate practice, not specified in any of the twelve subsections of § 19(b), may not be within that core of antitrust immunity to which we have referred. But it is a fact that at the time Thill was decided, the SEC was conducting hearings into, among other matters, the “economic access to exchange markets by nonmembers broker-dealers . . . ” SEC Securities Exchange Act Release No. 8324 (May 28, 1968). And it would be difficult to maintain that the effect of the anti-rebate rule on investor protection, fair dealing in securities, or fair administration of an exchange is in any significant respect different from the practice of commission rate-fixing. See Note, Antitrust Laws and the Securities Exchanges, 66 Nw.U.L.Rev. 100, 106 n. 40 (1971). Thus, to the extent our decision today is inconsistent with Thill, we find ourselves constrained to disagree with the holding there announced.

We emphasize that the conclusion we reach today by no means implies that Gordon at no time may have access to the courts. After Commission action, judicial review of its decision is proper pursuant to the provisions of the Administrative Procedure Act, 5 U.S.C. §§ 702, 704 (1970), see Independent Broker-Dealers’ Trade Association v. SEC, 442 F.2d 132 (D.C.Cir.), cert. denied, 304 U.S. 828, 92 S.Ct. 63, 30 L.Ed.2d 57 (1970), and, in the case of Commission orders, under the provisions of the 1934 Act, 15 U.S.C. § 78y (1970). On such review, a court is competent to consider, in accordance with standards appropriate for review of agency action, see Administrative Procedure Act § 10(e), 5 U.S.C. § 706 (1970), the weight given by the Commission to competitive factors in achieving the goals of the 1934 Act.

For the reasons stated, we affirm the district court’s grant of summary judgment and dismissal of Gordon’s claim.

Affirmed.

      . Merrill Lynch, Pierce, Fenner & Smith, and Bache & Co., Inc.

      . NYSE Const. Art. XV, § 2 (1971) ; subsequently amended ; Amex.Const., Art. VI, § 2 (1971), subsequently amended.

      . NYSE Rule 383 (1971), repealed April 1, 1974; Amex Rule 396 (1971), amended April 1, 1972.

      . Gordon also claimed that the volume discounts were “unreasonably low prices for the purpose of destroying competition or eliminating a competitor,” in violation of 15 U.S.C. § 13a (1970). Although the district court made no finding in this regard, plaintiff does not press the point on appeal.

      . The complaint also challenged rules which limited exchange membership, and which denied discounted commission rates to nonmember brokers who used exchange facilities. The district court concluded that these claims were frivolous. We agree, since § 3(a)(3) of the Securities Exchange Act of 1934, 15 U.S.C. § 78c (a) (3) (1970), clearly contemplates limitations on both exchange membership and nonmember access to exchange facilities.

      . Because the district court considered affidavits and exhibits annexed as well as the pleadings, it properly concluded that the motion to dismiss should be treated as one for summary judgment. Rule 12(b), F.R.Civ.P.

      . We agree with the district court that there is no precedent for the assertion that brokerage services are “commodities” within the meaning of the Robinson-Patman Act, 15 U. S.C. § 13(a) (1970).
      Gordon raises on appeal for the first time the claim that the combination of surcharges, volume discounts, and negotiated rates violates 15 U.S.C. § 13(c) (1970), as an allowance or commission not granted for services rendered. Although we decline to entertain the claim because it was not raised in the district court, we note that § 13(c) proscribes such practices only “in connection with the sale or purchase of goods, wares, or merchandise . . . . ”

      . By tliis we do not intend to imply that withdrawal of antitrust jurisdiction is based on the SEC’s “primary” jurisdiction over the practices challenged by Gordon. Cf. Thill Securities Corp. v. New York Stock Exchange, 433 F.2d 264, 276-277 (7th Cir. 1970) (Swygert, J., concurring). As our earlier discussion of the language and history of the 1934 Act indicates, we are of the view that Congress intended to exempt commission rate-fixing from the operation of the antitrust laws, and consequently deprived the courts of even “secondary” jurisdiction to entertain Sherman Act claims like that which Goi'don asserts. Judicial review of SEO action would, however, be proper, either under the Administrative Procedure Act, 5 U.S.C. §§ 702, 704 (1970), or pursuant to the provisions of the 1934 Act, 15 U. S.C. § 78y (1970).

      . The SEO has also filed a brief as amicus curiae for the appellees.

      . As such, it would appropriately fall within the rule which we today announce, under the language of § 19(b) (13), 15 U.S.C. § 78s (b) (13) (1970) (“similar matters”).

      . Judge Campbell in Thill relied heavily upon United States v. Philadelphia National Bank, 374 U.S. 321, 83 S.Ct. 1715, 10 L.Ed. 2d 915 (1963) for the proposition that implied exemption from the antitrust laws was a fortiori improper on the facts before the court. 433 F.2d at 272. In Philadelphia National Bank the Court held that, despite the congressionally required approval of the Comptroller of the Currency, pursuant to the Bank Merger Act of 1960, 12 U.S.C. § 1828 (1970), a merger between the Philadelphia National Bank and Girard banks remained subject to antitrust action by the Department of Justice.
      Although we are not unmindful of the disfavor with which antitrust exemption is generally regarded, see, e. g., California v. Federal Power Commission, 369 U.S. 482, 82 S.Ct. 901, 8 L.Ed.2d 54 (1962), we perceive significant differences between Philadelphia National Bank and the case which we today decide. AVe note that the history of the Bank Merger Act evidenced a congressional intent not to immunize bank mergers from at least Sherman Act attack, see 374 U.S. at 352, 83 S.Ct. 1715, whereas the 1934 Act entrusts the SEC with supervision of rate-fixing, a practice which outside the confines of the 1934 Act is a per se violation of the Sherman Act. Cf. Silver v. New York Stock Exchange, 373 U.S. at 347-349, 86 S.Ct. 1246 (recognizing that a group boycott carried out within the framework of the 1934 Act is not a per se antitrust violation).


author: LEWIS, Chief Judge.

text:
    Max MANNING, Trustee for and on behalf of Painters and Associated Trades Trust Fund, Plaintiff-Appellant, v. Bon WISCOMBE, dba Ron Wiscombe Painting and Sandblasting, Defendant-Appellee.
    No. 73-1688.
    United States Court of Appeals, Tenth Circuit.
    Argued March 21, 1974.
    Decided July 3, 1974.

      Richard W. Perkins, Turner & Perkins, Salt Lake City, Utah, for plaintiff-appellant.
    George M. Mecham, Salt Lake City, Utah, for defendant-appellee.
    Before LEWIS, Chief Judge, and PICKETT and BARRETT, Circuit Judges.
   LEWIS, Chief Judge.

Through the execution of a series of counterpart agreements in 1967, appellee Ron Wiscombe, doing business as Ron Wiscombe Painting and Sandblasting, became a nonmember signatory to a collective bargaining agreement between the Salt Lake Chapter of Painting and Decorating Contractors of America (association) and the Brotherhood of Painters, Decorators and Paperhangers of America, Local No. 77 (union). Included in this agreement were provisions for the establishment and maintenance of a Painters and Associated Trades Trust Fund for health and welfare, apprenticeship and training, and vacations. According to the terms of the agreement, Wiscombe was to make contributions to the trustee of this fund for and on behalf of his employees performing work covered by the agreement based upon the number of hours worked by such employees.

Utah is a right-to-work state and Wiscombe employed both union and nonunion personnel in the prosecution of his business. From 1967 to 1971 Wiscombe made contributions to the trust fund on behalf of his union employees, although such contributions were incomplete. No contributions were made on behalf of nonunion employees. Appellant Max Manning, trustee for the fund, brought an action in district court under 29 U.S. C. § 185 to recover sums which he claimed were still owing for some of the work performed by union members and for all of the work performed by nonunion employees.

The incomplete contributions due on behalf of the union members were ordered to be paid by the district court below and do not present an issue here. But the court held that the funds on behalf of the nonunion employees were never owing under the terms of the collective bargaining agreement and dismissed the trustee’s claim in this respect. The trustee now appeals that dismissal contending that under the plain language of the agreement nonunion employees were intended to be covered.

The sole issue before us is whether, under the collective bargaining agreement, Wiscombe was obligated to make contributions to the trustee’s fund on behalf of his nonunion employees. Section I of the subject agreement provides :

The Association recognizes the Union as the bargaining representative of all of the employees employed by its contractor members where-ever such employees are performing work covered by this agreement.

It is undisputed that Wiscombe’s nonunion employees were performing work covered by the agreement as defined in a subsequent section. And it is worth noting in this respect that Wiseombe’s counsel, at hearing, agreed that as a general proposition “an employer who signs an agreement such as this, which provides for the payment to trust funds, is bound to make contributions on behalf of union and nonunion employees.” But he argues that this agreement provides an exception in that the contract has from its inception been applied on a “members-only” basis, that nonunion employees were never represented in the bargaining negotiations, and that nonunion employees were therefore excluded from the bargaining unit and coverage under the agreement. He points to the fact that a petition to the National Labor Relations Board! for clarification of the bargaining unit under the agreement was dismissed because the Board found that the agreement was being applied on a “members-only” basis. To clarify a bargaining unit under these circumstances, the Board concluded, “would not effectuate the policies of the Act. .” Ron Wiscombe, dba Ron Wiscombe Painting and Sandblasting Co. and Painters and Allied Trades Local Union No. 77, 194 N.L.R.B. No. 153.

We disagree with the conclusion of the court below that the agreement, by its terms, provides no clause which would obligate Wiscombe to make contributions on behalf of his nonunion employees. The recognition clause cited above clearly establishes the union as the bargaining representative for all employees performing work covered by the agreement and it is conceded that Wiscombe’s nonunion people were so engaged. Subsequent references throughout the agreement to “union members” and “employees” makes it clear that the terms are not synonymous and that “employees” was intended to apply to both union and nonunion members. The wording of the trust agreement obliging the employer to contribute for “each hour worked by his employee covered hereunder” is not, in our view, subject to an interpretation other than that contributions on behalf of nonunion employees are required. The contract is not ambiguous and the intention of the parties must be gleaned from its four corners. Filtrol Corp. v. Loose, 10 Cir., 209 F.2d 10.

We must now consider whether the fact that the contract has been applied on a “members-only” basis serves to relieve Wiscombe of the liability imposed under the plain wording of the agreement. The trustee here stands as a third-party beneficiary of the collective bargaining agreement and his rights vested upon the signing of the contract and the creation of the trust fund. The primary parties cannot modify by subsequent conduct the express terms of an agreement without the consent of a third-party beneficiary whose rights have vested. The fact that the union has failed to adequately represent these nonunion employees may give rise to an unfair labor practice charge before the NLRB but, in the absence of a clearly expressed contractual intent to the contrary, it cannot be an adequate defense by an employer against a third-party beneficiary trustee. Lewis v. Benedict Coal Corp., 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442. Wiscombe signed an agreement which is clear on its face and the posture of this case presents no basis on which he can relieve himself of the obligation which the trustee seeks to enforce.

Because of the disposition of the case below, no monetary assessment of liability was made. The matter is therefore reversed and remanded for further proceedings consistent with this opinion.

      . It is stipulated that the contract has been applied on a “members-only” basis.

      . The Regional Director had entertained the petition to clarify and determined that nonunion employees were included in the bargaining unit. We are disturbed by the rationale of the Board’s refusal to consider the issue as one not effectuating the policies of the Act but the courts have many times been cautioned that such expertise is with very narrow exceptions exclusively the Board’s and the issue is not before us directly.


author: GIBSON, Circuit Judge. ROSS, Circuit Judge,

text:
    MINNESOTA PUBLIC INTEREST RESEARCH GROUP, Appellee, v. Earl V. BUTZ, Individually, and as Secretary of Agriculture, et al., Appellants.
    Nos. 73-1242, 73-1280, 73-1281, 73-1282 and 73-1753.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 13, 1974.
    Decided June 10, 1974.

      Curtis L. Roy, and Joe A. Walters, Minneapolis, Minn., for appellants. .
    Gerald L. Seek, Minneapolis, Minn., for appellee.
    Before MEHAFFY, Chief Judge, and GIBSON, LAY, HEANEY, BRIGHT, ROSS, STEPHENSON, and WEBSTER, Circuit Judges, en banc.

   GIBSON, Circuit Judge.

The plaintiff, Minnesota Public Interest Research Group (MPIRG), filed a complaint asking for declaratory and injunctive relief against further logging in the Boundary Waters Canoe Area (BWCA). It also requested application of the Wilderness Preservation System Act of 1964, to the management policies of, and to the existing contracts for timber cutting executed by, the United States Forest Service in the BWCA.

The District Court, after a hearing on the merits, enjoined the defendants from logging “in those areas of the active timber sales on the BWCA which are contiguous with the main virgin forest areas of the BWCA pending the Forest Service’s completion of its new BWCA Management Plan and accompanying impact statement.”

Crucial to our determination of the issue raised is whether or not the modification of existing contracts for cutting of virgin timber, the extension of some of these contracts, and the supervision of the day-to-day activities in the operation of the timber cutting contracts in the BWCA area constitute major federal action significantly affecting the quality of the human environment within the purview of the National Environmental Policy Act of 1969.

A further issue held in abeyance by the court is whether the Wilderness Act precludes the Forest Service from allowing any logging operations at all in the BWCA. The District Court, after a plenary hearing, felt that the Forest Service possibly would, in reviewing its entire management policy, forego or prohibit the cutting of timber in the BWCA area, thus mooting this issue; and if not, the court reserved jurisdiction to pass upon the legal issue of whether the Wilderness Act precludes timber cutting and logging activities in the wilderness area of the BWCA.

The BWAC, located in northern Minnesota, is a unique natural resource with some 1,060,000 acres of lakes, streams, and timber, which along with the adjoining Canadian Quetico-Superior forest forms the only canoe wilderness area in the world. The area contains more than 1,000 lakes larger than 10 acres, either connected by streams or convenient portages that allow for easy canoe travel through the wilderness area.

The BWCA is administered by the United States Forest Service as a Wilderness Area and as a part of the Superior National Forest. The Draft Management Plan of the Forest Service for the BWCA refers to the area as “unique, pristine, endangered, rugged, primitive, beautiful and fragile.” Highly prized by many, including plaintiff MPIRG, the Wilderness Area affords recreational, scientific, and educational opportunities. It is also highly regarded by others, like the defendant paper and logging companies, who value the thousands of acres of marketable timber it contains.

This lawsuit was commenced November 24, 1972, by MPIRG, an association of students at various Minnesota colleges and universities. MPIRG requested a temporary and permanent injunction against any further logging in the BWCA until the Forest Service completes an Environmental Impact Statement (EIS) complying with the requirements of NEPA. There was a separate claim that logging activities should be banned in the BWCA as incompatible with the wilderness values protected by the Wilderness Act.

The defendants assert that there has been no major federal action since the effective date of NEPA (January 1, 1970), and further, that MPIRG lacks standing and is guilty of laches. They also argue that logging is specifically provided for in the BWCA by the Wilderness Act. The District Court found that there was major federal action and that MPIRG has standing and was not guilty of laches.

These appeals present a question of the applicability of NEPA to private logging operations carried out pursuant to pre-NEPA Forest Service timber sales within the BWCA. Specifically in question is § 102(2)(C) of NEPA that requires the preparation of an EIS for “major Federal actions significantly affecting the quality of the human environment * * Should this court affirm the District Court’s determination that the Forest Service’s actions regarding these timber sales after January 1, 1970, constitute major federal action significantly affecting the quality of the human environment, a further question as to the propriety of the District Court’s temporary injunction pending the preparation and filing of the final EIS is presented.

The Superior National Forest contains approximately 3 million acres, some 1,060,000 of which are included in the BWCA. Pursuant to a regulation of the Secretary of Agriculture, the BWCA has been divided into two zones, an Interior Zone of some 640,000 acres in which timber cutting is not allowed, and a Portal Zone of about 425,000 acres in which timber cutting has been allowed. At the time of suit 11 timber sales were active within the BWCA, consisting of 29,261 acres, on which 5,275 acres remained uncut. These sales had all been made during the period 1959 through 1969, prior to the January 1, 1970, effective date of NEPA.

Timber harvesting has been a source of public controversy surrounding the BWCA. In November, 1971, soon after its formation, MPIRG requested the Forest Service to prepare an EIS considering the effects of logging in the BWCA and to halt all logging in the BWCA until the statement was completed. MPIRG was informed that a new BWCA management plan was under consideration and that the EIS being prepared in conjunction with the new plan would be ready in April, 1972. This date was later changed to April, 1973, but to satisfy MPIRG’s objections a preliminary environmental analysis covering logging was to be made available in August, 1972, for public review. Dissatisfied with this preliminary analysis, MPIRG attempted again to have the Forest Service suspend logging in the BWCA until the EIS was filed and also requested the Forest Service to compensate the private defendants with timber outside the BWCA. This suggestion was rejected by the Forest Service on November 15, 1972, and MPIRG filed this suit on November 24,1972.

The activities of the Forest Service concerning these 11 pre-NEPA timber sales fall roughly into three categories —contract extensions, contract modifications, and the administrative, actions required by the contracts.

On six of these sales, the Forest Service after January 1, 1970, entered into contract extensions which gave the owners additional time to complete cutting on the sales. There was no obligation on the part of the Forest Service to grant these extensions; the testimony indicated that this was a “routine” practice of the Service, prompted perhaps in part by its knowledge that the original contract periods were not.normally expected to afford sufficient time to complete the cutting.

Modifications, changes in the land area in which logging could occur, were negotiated by the Forest Service in 7 of the sales contracts after January 1, 1970. Many of these modifications were made for “environmental” reasons. This is some indication that the Forest Service recognized that these timber sales could have a significant impact on the BWCA. Further, the administration of the timber sales contracts required the continual involvement of Forest Service personnel in approving locations for logging roads, logging camps, the marking of sale boundaries on the ground, approving the use of mechanized equipment, and the making of various other approvals and agreements.

No environmental impact statements have been prepared for any of the sales, whether unchanged, modified, or extended after January 1, 1970. The position of the Forest Service, adopted by the private defendants in this action, is that there has been no major federal action since the effective date of NEPA. The District Court held otherwise and enjoined timber cutting on all or portions of seven of the timber sales in question.

I. MAJOR FEDERAL ACTION

Does the Forest Service’s involvement in these timber sales constitute major federal action significantly affecting the quality of the human environment? Section 102(2) (C) requires preparation of an EIS for “every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment.” (emphasis added). What constitutes other major federal action is not defined in the Act, nor is the legislative history very illuminating. S.Rep.No. 91-296 in discussing Section 102(2)(C) states:

(c) Each agency which proposes any major actions, such as project proposals, proposals for new legislation, regulations, policy statements, or expansion or revision of ongoing programs, shall make a determination as to whether the proposal would have a significant effect on the quality of the human environment. If the proposal is considered to have such an effect, then the recommendation or report supporting the proposal must include * ->:• * [those findings required by § 102(2) (C)].

The threshold question as to whether there is a major federal action requiring NEPA compliance is not presented in the majority of cases; there is little question that when the federal government commits millions of dollars to build dams, nuclear power plants, or highways that there is a major federal action. The question presented by the instant case is not so clear-cut; these actions of the Forest Service cannot be quantified in terms of dollars to be spent or tons of earth to be moved.

A. Review of NEPA Applicability

First, we are faced with the Forest Service’s determination that there has been no major federal action. It is generally accepted that the involved federal agency has the responsibility of making the threshold determination as to the applicability of NEPA. What standard of review should be applied in determining whether this initial determination comports with the requirements of the Act? The District Court determined that the Forest Service’s refusal to prepare an EIS was “arbitrary, capricious and unlawful.”

This is the standard this circuit has adopted in reviewing a substantive decision to proceed with a project after the agency ha's prepared an adequate EIS considering the environmental effects. Environmental Defense Fund v. Corps of Engineers, 470 F.2d 289, 300 (8th Cir. 1972), cert. denied, 412 U.S. 931, 93 S.Ct. 2749, 37 L.Ed.2d 160 (1973). See also, Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Jicarilla Apache Tribe of Indians v. Morton, 471 F.2d 1275, 1281 (9th Cir. 1973); Calvert Cliffs’ Coordinating Committee v. Atomic Energy Commission, 146 U.S.App.D.C. 33, 449 F.2d 1109, 1115 (1971). The defendants argue that this standard should be applied to the threshold determination of the applicability of NEPA.

The Second Circuit, in Hanly v. Kleindienst, 471 F.2d 823, 829-830 (2d Cir. 1972), cert. denied, 412 U.S. 908, 93 S.Ct. 2290, 36 L.Ed.2d 974 (1973) (Hanly II), has adopted this standard of review of the agency’s threshold determination. However, two other circuits, the Fifth and Tenth, have determinated that the initial determination is to be tested under a rule of reasonableness like that set forth in Overton Park. Wyoming Outdoor Coordinating Council v. Butz, 484 F.2d 1244, 1249 (10th Cir. 1973); Save Our Ten Acres v. Kreger, 472 F.2d 463, 465-466 (5th Cir. 1973).

NEPA is not only an environmental full-disclosure law, but was also intended to effectuate substantive changes in decision making. Environmental Defense Fund v. Corps of Engineers, supra at 297. We are primarily concerned here with the action-forcing provisions of Sec. 102(2) (C), for without the full disclosure required by NEPA for major federal actions, there exists no sound basis to evaluate the environmental aspects of a project. And without this basis for evaluation, the is no way to determine whether a substantive decision to proceed is arbitrary and capricious.

Section 102(1) of the Act contains a Congressional direction that environmental factors be considered “to the fullest extent possible.” An initial decision not to prepare an EIS precludes the full consideration directed by Congress. In view of the concern for environmental disclosure present in NEPA, the agency’s discretion as to whether an impact statement is required is properly exercised only within narrow bounds. Action which could have a significant effect on the environment should be covered by an impact statement. We think that the threshold decision as to whether or not to prepare an EIS should be reviewed not on the arbitrary and capricious standard used to test a substantive decision which entails a balancing and weighing of alternatives already studied, but on the grounds of its reasonableness.

An agency decision concerning NEPA requirements is not one committed to the agency’s discretion by law within the meaning of the APA, 5 U.S.C. § 701 et seq. The Congressional command that agencies cooperate in attaining the goals of NEPA “to the fullest extent possible” requires the courts to look at the good faith efforts of the agency to comply. To upset an agency determination not to prepare an impact statement, it still must be shown that the agency’s determination was not reasonable under the circumstances. This will require a showing that the project could significantly affect the quality of the human environment. Save Our Ten Acres v. Kreger, supra at 466. We therefore hold that review of an agency’s determination not to prepare an impact statement should be measured by its reasonableness in the circumstances, not as to whether it was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

B. Was The Forest Service Determination Reasonable?

The CEQ Guidelines state:

5. Actions included.
-X- * -X- -X- -X- *
(b) The statutory clause “major Federal actions significantly affecting the quality of the human environment” is to be construed by agencies with a view to the overall, cumulative impact of the action proposed (and of further actions contemplated). Such actions may be localized in their impact, but if there is potential that the environment may be significantly affected, the statement is to be prepared. * * * In considering what constitutes major action significantly affecting the environment, agencies should bear in mind that the effect of many Federal decisions about a project or complex of projects can be individually limited but cumulatively considerable.

The Guidelines further provide:

11. Application of section 102(2) (C) procedure to existing projects and programs. To the maximum extent practicable the section 102(2) (C) procedure should be applied to further major Federal actions having a significant effect on the environment even though they arise from projects or programs initiated prior to enactment of the Act on January 1, 1970.

The defendants argue that the actions of the Forest Service must be isolated from the subsequent impact on the environment from logging operations. They assert that the statutory phrase “major Federal action significantly affecting the quality of the human environment” creates two tests. First, it must be determined whether there is a major federal action; next, if there is a major action, the impact of that action on the environment must be determined. This interpretation was adopted in Hanly I, supra at 644.

Defendants claim that the term “major Federal action” refers to the cost of the project, the amount of planning that preceded it, and the time required to complete it, but does not refer to the impact of the project on the environment. We agree with defendants that the two concepts are different * * *.

Accord, Julis v. City of Cedar Rapids, Iowa, 349 F.Supp. 88 (N.D.Iowa 1972). But cf. Wyoming Outdoor Coordinating Council v. Butz, supra, rev’g 359 F.Supp. 1178 (D.Wyo.1973) (which adopted the Hanly I rationale); Environmental Defense Fund v. Tennessee Valley Authority, 468 F.2d 1164 (6th Cir. 1972).

To separate the consideration of the magnitude of federal action from its impact on the environment does little to foster the purposes of the Act, i. e., to “attain the widest range of beneficial uses of the environment without degradation, risk to health and safety, or other undesirable and unintended consequences.” By bifurcating the statutory language, it would be possible to speak of a “minor federal action significantly affecting the quality of the human environment,” and to hold NEPA inapplicable to such an action. Yet if the action has a significant effect, it is the intent of NEPA that it should be the subject of the detailed consideration mandated by NEPA; the activities of federal agencies cannot be isolated from their impact upon the environment. This approach is more consonant with the purpose of NEPA and is supported in S.Rep.No.91-296, supra, and the CEQ Guidelines.

Looking now to the timber sales in question, it was established in the District Court that there is a significant effect on the BWCA from these logging operations. These effects are fully detailed in the opinion of the District Court. However, defendants contend that any adverse effect on the BWCA does not “significantly affect the quality of the human environment” as there is no evidence showing that human users of the BWCA have even seen a timber sale. This appears to be a too restrictive view of what significantly affects the human environment. We think NEPA is concerned with indirect effects as well as direct effects. There has been increasing recognition that man and all other life on this earth may be significantly affected by actions which on the surface appear insignificant. This has received recognition by the CEQ; “the effect of many Federal decisions about a proj’ect * * * can be individually limited but cumulatively considerable.” Apart from what may be referred to as “existence value,” the evidence indicated that there are direct effects on the human environment from logging. Logging creates excess nutrient run-off which causes algal growth in the lakes and streams, affecting water purity. Logging roads may cause erosion and water pollution and remain visible for as long as 100 years; this affects the rustic, natural beauty of the BWCA, recognized as unique by the Forest Service itself. Logging destroys virgin forest, not only for recreational use, but for scientific and educational purposes as well. All these are significant impacts on the human environment.

The Forest Service has been significantly involved with these timber sales since January 1, 1970, the effective date of NEPA. Its contracts require it to, inter alia, approve locations of timber roads, logging camps and buildings; mark the trees to be cut; and negotiate payment for the timber cut. In addition, it extended six of the sales after the effective date of NEPA and made contract modifications with the consent of the purchasers on seven of the sales.

Further, there is a monetary involvement. The District Court found that the revenue the Forest Service receives from its timber sales in the BWCA is clearly inadequate to finance the reforestation program required after the mature timber is cut. This financial involvement is properly considered when determining the significance of Forest Service participation. Defendants’ argument that because the Forest Service was contractually committed to these actions they cannot be major federal actions is unpersuasive. These actions were as significant in the context of these timber sales as was the approval of a right-of-way and coal stack heights found to be major federal action in Jicarilla Apache Tribe of Indians v. Morton, supra, and the clear-cutting of some 670 acres of timber pursuant to Forest Service sales found to be major federal action in Wyoming Outdoor Coordinating Council v. Butz, supra. We agree with the District Court that there is “major Federal action significantly affecting the quality of the human environment” and an impact statement is required.

II. PROPRIETY OF THE INJUNCTION

Upon determining that NEPA was violated, the District Court enjoined timber cutting on all or part of seven active timber sales Until the required EIS was prepared and filed. The private defendants argue that an injunction should not have been granted. In addition, in No. 73-1753, Consolidated Papers appeals the District Court’s refusal to dissolve the injunction upon its later motion.

Defendants do not challenge the power of the District Court to enjoin activities pending the filing of an EIS; it is clear that the District Court does have that power. Bradford Township v. Illinois State Toll Highway Authority, 463 F.2d 537, 539 (7th Cir.), cert. denied, 409 U.S. 1047, 93 S.Ct. 518, 34 L.Ed.2d 499 (1972). Cf. Silva v. Romney, 473 F.2d 287 (1st Cir. 1973). The question then is whether the District Court abused its discretion in granting the temporary injunction. Yakus v. United States, 321 U.S. 414, 440, 64 S.Ct. 660, 88 L.Ed. 834 (1944); E. W. Bliss Co. v. Struthers-Dunn, Inc., 408 F.2d 1108, 1113 (8th Cir. 1969); 7 Moore’s Federal Practice fj 65.04 [2] (2d ed. 1974).

We find no abuse of discretion here. Plaintiff established a violation of NEPA. If the cutting were allowed to continue pending preparation of the EIS regarding the effects of logging, the District Court would have been engaging in an exercise in futility, because any damage that might have been avoided after study would have irreversibly occurred. The District Court weighed the possible damage to each defendant from granting the injunction and concluded that whatever harm suffered would be slight. On balance, it appears to us that the District Court properly exercised its discretion to maintain the status quo pending the preparation and filing of the necessary EIS.

After the Forest Service announced the filing of a draft EIS covering the draft BWCA Management Plan, which would continue to allow timber cutting, Consolidated Papers moved the court to lift its injunction on the Old Road Sale, asserting that the equities had been substantially altered. This motion was denied by an order of October 9, 1973. Consolidated argues that since the probability that the Forest Service would prohibit further logging in the BWCA was a factor in the District Court’s initial grant of injunctive relief, the fact that logging is not to be prohibited requires the dissolution of the injunction.

We cannot agree. The District Court’s injunction is conditioned upon the Forest Service’s compliance with NEPA. Compliance has not been made until the Forest Service prepares and files a final EIS assessing the impact of logging upon the environment.

[A] draft statement is not the basis of an agency decision. Its function is to elicit comment that will contribute to a final statement, and it is the final statement that is supposed to serve as the basis for agency assessment of the environmental implications of the project.

Sierra Club v. Mason, 365 F.Supp. 47 (D.Conn.1973).

Until the final statement has been filed it would only serve to give a judicial recognition to the “futility” of the NEPA process if the District Court dissolved its injunction on the basis of the draft statement. That would constitute an admission that the final decision has already been made without consideration of the public reaction and comments to the draft statement. Although such may be the reality, it should not be the appearance of the NEPA review process. There was no abuse of discretion in refusing to dissolve the injunction.

III. LACHES

Defendants also argue that MPIRG is guilty of laches. This doctrine, while recognized as available, has received a lukewarm reception in suits presenting environmental questions, for not only will others than the plaintiff suffer the possible adverse environmental effects, but the agency will escape compliance with NEPA, a result not to be encouraged. See, Environmental Defense Fund v. T.V.A., supra at 1182-1183; Arlington Coalition on Transportation v. Volpe, 458 F.2d 1323, 1329 (4th Cir.), cert. denied, 409 U.S. 1000, 93 S.Ct. 312, 34 L.Ed.2d 261 (1972); City of New York v. United States, 337 F.Supp. 150, 160 (E.D.N.Y.1972). Moreover, here the District Court found no unreasonable delay, and its conclusion is warranted by the record.

IV. STANDING

Defendants assert that MPIRG lacks standing, in that it has alleged no “injury in fact” sufficient to meet the constitutional standing requirement. The environmental interests asserted by MPIRG are well within the zone of interests protected by NEPA. United States v. SCRAP, 412 U.S. 669, 686 n. 13, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973).

We think that MPIRG has shown facts establishing that it has more than a mere interest in the outcome of the litigation.

“Injury in fact” * * * serves to distinguish a person with a direct stake in the outcome of a litigation— even though small — from a person with a mere interest in the problem.

United States v. SCRAP, supra at 689 n. 14.

MPIRG has shown that some of its members use the BWCA for wilderness recreational opportunities it affords. It has demonstrated an effect upon the wilderness qualities of the BWCA from the logging operations. This suffices to show that its members have suffered or will suffer the requisite injury in fact to support standing. MPIRG may represent its injured members in a proceeding for judicial review. Sierra Club v. Morton, 405 U.S. 727, 739, 92 S.Ct. 1361, 31 L.Ed.2d 620 (1972). We therefore agree with the District Court that MPIRG has standing to litigate the questions presented.

V. THE WILDERNESS ACT

The defendants have attempted to demonstrate in their briefs that the Wilderness Act specifically provides for timber cutting within the BWCA. This claim is premature, and we decline to address ourselves to its merits in this proceeding. The District Court held the claims as they relate to the Wilderness Act in abeyance until the Forest Service completes action on its new BWCA Management Plan and accompanying impact statement. This issue remains for the District Court’s consideration and determination in its further proceedings in the ease.

The judgment of the District Court granting the temporary injunction pending the completion and filing of the EIS required by § 102(2) (C) of NEPA is affirmed. The judgment of the District Court refusing to vacate the injunction in No. 73-1753 is affirmed.

ROSS, Circuit Judge,

with whom STEPHENSON and WEBSTER, Circuit Judges, join, dissenting.

In this case the Forest Service made a decision that the routine supervision or extension of the time for completion of the logging contracts in question was not “major” federal action having a “significant” effect on the quality of the human environment. We think that common sense dictates that this decision was correct and that the decision of the trial court should be reversed.

These logging contracts had been entered into by the Forest Service prior to the enactment of NEPA pursuant to the authorization of Congress in the Wilderness Act. No federal expenditures were involved in either the original contracts or in the extensions thereof. Some of the contracts had been partially completed when extensions of time were granted routinely just as they had been granted in the past. Some of the contracts, such as the Sunnydale and Beartrap Sales, had not expired, no extensions had been granted, and the only “major” federal action involved continued supervision of the contracts or a reduction in the area to be logged. The total area in question was less than one percent of the BWCA and the location of the areas to be logged was not adjacent to any portion of the BWCA used for recreational purposes. Indeed, no member of the Minnesota Public Interest Research Group had ever been in or seen any of these areas of the BWCA.

The statute in question, 42 U.S.C. § 4332(2) (C), requires all agencies of the federal government to “include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on —(i) the environmental impact of the proposed action . . . .” The first obvious test to be made is suggested by the words of the statute. Does the contemplated action rise to the comparable status of “proposals for legislation,” with which Congress has equated “other major Federal actions”? In our opinion, the routine extension of several timber sales and the continued supervision of others cannot logically be considered to be on the same level with “proposals for legislation.”

We recognize there is a division of authority as to what constitutes major federal action and what is significant in terms of effect on the human environment. A review of the cases cited below and of the cases cited in the majority opinion, indicates that it is primarily a matter of judgment as to what is major federal action, and what constitutes a significant effect on the human environment.

The actual crux of this lawsuit is not the advisability of logging the balance of these particular contracts, but rather is an effort by the plaintiffs to stop all logging in the BWCA. Their theory is that the forest should be permitted to thin itself periodically by natural means, (i. e. forest fires) rather than by commercial logging. It would appear from the opinion of the trial judge that he shares that view with the plaintiffs. In our judgment, this is a decision best left to the expertise of the Forest Service subject only to the right of Congress to change its policy as heretofore expressed in the Wilderness Act.

Neither do we agree that the trial court should have continued the injunction after the filing of the preliminary draft of the impact statement. At that point it became obvious that the Forest Service was not going to discontinue all logging in the BWCA, a decision it was certainly entitled to make under the provisions of the Wilderness Act; and the trial court should have at least accepted that determination at that time and dissolved the injunction. However, inasmuch as the majority has held that the injunction must be dissolved when the final impact statement is filed, which we understand will be in June of 1974, and inasmuch as the majority has made it clear that any test of that final impact statement must be in a separate lawsuit, no useful purpose would be served by further discussion of that part of the majority opinion.

We agree with the observations of Chief Justice Burger, sitting as a Circuit Justice, in Aberdeen & Rockfish R. Co. v. SCRAP, 409 U.S. 1207, 1217-1218, 93 S.Ct. 1, 7, 34 L.Ed.2d 21 (Burger, Circuit Justice, 1972):

Our society and its governmental instrumentalities, having been less than alert to the needs of our environment for generations, have now taken protective steps. These developments, however praiseworthy, should not lead courts to exercise equitable powers loosely or casually whenever a claim of “environmental damage” is asserted. The world must go on and new environmental legislation must be carefully meshed with more traditional patterns of federal regulation. The decisional process for judges is one of balancing and it is often a most difficult task.

We would reverse with directions to dissolve the injunction.

      . The BWCA has been designated a Wilderness Area pursuant to the National Wilderness Preservation System Act (The Wilderness Act), 16 U.S.C. § 1131 et seq.

      . Minnesota Public Interest Research Group v. Butz, 358 F.Supp. 584, 630 (D.Minn. 1973). The Honorable Miles Lord, United States District Judge, District of Minnesota.

      . 42 U.S.C. § 4321 et seq., effective January 1, 1970 (NEPA).

      . The Government defendants are Earl Butz, Secretary of Agriculture; John McGuire, Chief, United States Eorest Service; Jay Cravens, Regional Forester, and Harold Anderson, Supervisor, Superior National Forest. Private defendants are Consolidated Papers, Inc.; The Northwest Paper Company ; Northern Forest Products, Ltd.; Kainz Logging Company; Emil Abramson; and Boise Cascade Corporation. The private defendants are the owners of the 11 timber sales active at the time suit was filed.

      . 42 U.S.C. § 4332(2) (C).

      . 36 C.F.R. § 251.85 (1971).

      . Included in this total is 100,000 acres to be added in 1975. Portions of this 1975 addition were included within the 11 timber sales active at time of suit.

      . Those 11 sales, the rights to remove timber during the period of the contract, are as follows:
      1. Shell Lake Sale, purchased September 24, 1968, original termination date June 30, 1972 extended to June 30, 1973.
      2. Sunnydale Sale, purchased March 28, 1968, termination date June 30, 1978.
      3. 'Jerry Creek Sale, purchased April 7, 1964, original termination date March 20, 1969, extended once to March 31, 1971, and again to March 31,1974.
      4. Beartrap Sale, purchased December 30, 1968, termination date December 31, 1973.
      5. Old Road Sale, purchased July 26, 1966, original termination date June 30, 1971, extended to June 30, 1973.
      6. Trail Block Sale, purchased March 3, 1969, termination date March 31, 1973.
      7. Compartment 38 Block Sale, purchased January 16, 1968, termination date March 31, 1973.
      8. East Road Block Sale, purchased January 3, 1967, original termination date December 30, 1971, extended to June 30, 1974.
      9. West Tofte Sale, purchased July 13, 1959, original termination date August 15, 1969, extended to June 30,1974.

        10. East Tofte Sale, purchased November 30, 1961, original termination date March 20, 1972, extended to June 30, 1974.
      11. Black Spruce Sale, purchased December 22, 1969, original termination date December 31, 1972, extended to June 30, 1973.

      . Shell Lake, Jerry Creek, Old Road, East Road Block, East Tofte, and Black Spruce Sales.

      . Shell Lake, Sunnydale, Beartrap, Old Road, East Road Block, East Tofte, and Black Spruce Sales.

      . “Environmental analyses” were prepared in conjunction with the extensions of the Shell Lake, East Road Block, and East Toite Sales. These analyses briefly lay out environmental factors considered in granting an extension and were not intended to be the detailed EIS required by NEPA.

      . “It is the Court’s conclusion that the cumulative effect of the administrative actions of the Forest Service taken since January 1, 1970 in regard to timber sales in tlie BWCA constitute major federal actions that have had and continue to have a significant effect on the human environment. Therefore, an impact statement should have been prepared by the Forest Service on the management policy dictating such administrative actions.” 358 F.Supp. at 622.

      . Cutting was enjoined on the Shell Lake, Sunnydale, Jerry Creek, Beartrap, Old Boad, West Tofte, and East Tofte Sales. The District Court allowed cutting to continue on the remaining sales as they were surrounded by areas that had been previously logged and represented no further intrusion into virgin forest.

      . See H.R.Rep.No. 91-378, 91st Cong., 1st Sess., 2 U.S.Code Cong. & Admin.News, 2751, 2769 (1969) ; S.Rep.No. 91-296, 91st Cong., 1st Sess. (1969).

      , See, e.g., Wyoming Outdoor Coordinating Council v. Butz, 484 F.2d 1244, 1249 (10th Cir. 1973); Save Our Ten Acres v. Kreger, 472 F.2d 463, 464 (5th Cir. 1973); Hanly v. Mitchell, 460 F.2d 640, 644 (2d Cir.), cert. denied, 409 U.S. 990, 93 S.Ct. 313, 34 L.Ed.2d 256 (1972) (Hanly I).

      . 358 F.Supp. at 624.

      . The Court stated :
      Also involved in this initial inquiry is a determination of whether on the facts the Secretary’s decision can reasonably be said to be within that range * * * [of dis-
      cretion vested by the Act], (emphasis supplied).
      Citizens to Preserve Overton Park v. Volpe, supra at 416. The Act involved in Overton Park was Sec. 4(f) of the Department of Transportation Act, 49 U.S.G. § 1653(f).

      . This is basically the position taken by the Council on Environmental Quality (CEQ). See, CEQ Guidelines, 36 Fed.Reg. 7724 (April 23, 1971), which provides in Sec. 5(b) :
      The lead agency should prepare an impact statement if it is reasonable to anticipate a cumulatively significant impact on the environment from federal action.

      . See Wyoming Outdoor Coordinating Council v. Butz, supra at 1249; cf. Hanly II, supra at 829.

      . In this regard it should also be noted that the Second Circuit, even though adopting the arbitrary and capricious standard of review, requires that the agency develop a reviewable environmental record when making its threshold determination of the applicability of NEPA. Hanly I, supra at 647. See also, Arizona Public Service Co. v. Federal Power Commission, 483 F.2d 1275, 1282 (D.C.Cir. 1973). Hanly II goes further and requires the agency to give public notice of the action and provide an opportunity to submit facts bearing upon the determination. Hmly II, supra at 836.

      . Revised Guidelines were issued by the CEQ, August 1, 1973. 38 Fed.Reg. 20549. See. 5, although renumbered to § 1500.6 remains substantially the same.

      . See. 11 was altered by the Revised Guidelines to make clear the applicability of NEPA to projects initiated before its effective date. Added in § 1500.13 was the following :
      Agencies have an obligation to reassess ongoing projects and programs in order to avoid or minimize adverse environmental effects. * * * While the status of the work and degree of completion may be considered in determining whether to proceed with the project, it is essential that the environmental impacts of proceeding are reassessed pursuant to the Act’s policies and procedtires * * *. (emphasis supplied).

      . See also, Virginians for Dulles v. Volpe, 344 F.Supp. 573 (E.D.Va.1972); Conservation Society of Southern Vermont, Inc. v. Volpe, 343 F.Supp. 761 (D.Vt.1972); Citizens for Reid State Park v. Laird, 336 F.Supp. 783 (D.Me.1972).

      . Sec. 101(b)(3), 42 U.S.C. § 4331(b)(3).

      . 358 F.Supp. at 609-617.

      . CEQ Guidelines, Sec. 5.

      . Existence value refers to that feeling some people have just knowing that somewhere there remains a true wilderness untouched by human hands, such as the feeling of loss people might feel upon the extinction of the whooping crane even though they had never seen one. See, Conservation Society of Southern Vermont, Inc. v. Volpe, supra at 767-768:
      To those of us who are so fortunate to live in Vermont and to have a little wildness surrounding us, it is probably not so difficult as it may be for others to conceive in terms of the preservation of all mankind of the importance of a little limestone hill rising abruptly from a valley floor, covered with basil and marjoram and creeping thyme, with columbine and yellow ragwort in dramatic abundance. The more so any of us find it difficult to conceive of the lasting, indeed the underlying importance of wetlands or bogs — perhaps because understandably we do not recognize, or we wish to forget, our own insignificant beginnings in what Judge Learned Hand called the “primordial ooze.” (footnote omitted).

      . While perhaps accurate, as the defendants argue, that none of the plaintiff members of MPIRG have ever seen a timber sale, defendants also assert that the greatest number of recreational users use areas which have been previously logged. This would indicate that the effects of logging are visible to many BWCA users.

      . Tlie Forest Service contemplates that the impact statement to be filed will cover all facets of their new BWCA Management Plan, including the Forest Service policy on timber cutting. We are of the view that upon consideration of the overall timber management policy of the Forest Service in an EIS complying with NEPA, each administrative action taken pursuant to that policy will not require a separate impact statement. In other words, if the environmental effects of timber cutting are considered in the overall EIS, an individual EIS for each timber sale would not be required, absent a material
      change in circumstances or a departure from the policy covered in the overall EIS. The requirements of NEPA are not meant to leave an agency without any discretion in fulfilling its responsibilities. “NEPA is not a paper tiger, but neither is it a strait jacket.” Scientists’ Institute for Public Information, Inc. v. Atomic Energy Commission, 481 F.2d 1079, 1091-1092 (D.C.Cir. 1973).
      By the above statement, we intimate no opinion as to whether or not the Forest Service in discharging its statutory responsibilities will permit timber cutting as part of its new BWCA Management Plan.

      . 358 F.Supp. at 589.

      . We note that the dissent assumes that the Wilderness Act authorizes timber cutting within the BWCA. This is the crucial question for determination in the further proceedings in this case and, as this question is not presented in this proceeding, we express no opinion as to whether the Wilderness Act allows or prohibits timber cutting.

      . We are of the view that the injunction will terminate upon the filing of the final EIS. Any challenge to the adequacy of the final EIS will require institution of a separate proceeding.

      . See 36 C.F.R. § 293.16 (1973) which provides as follows:
      Timber harvesting is permitted in the Portal Zone under conditions designed to protect and maintain primitive recreational values. Timber within 400 feet of the shorelines of lakes and streams suitable for boat or canoe travel . . . will be specifically excluded from harvesting, and timber harvesting operations will be designed to avoid unnecessary crossings of portages.

      . Kisner v. Butz, 350 F.Supp. 310, 323 (N.D.W.Va.1972), [Construction of 4.3 miles of Forest Service road in national forest held not to call for environmental impact statement (EIS).J ; Maryland-National Capital Park & Planning Comm’n v. U.S. Postal Serv., 349 F.Supp. 1212, 1214 (D.D.C. 1972), [No EIS necessary for construction of bulk mail center in industrial park.]; Julis v. City of Cedar Rapids, 349 F.Supp. 88, 89-90 (N.D.Iowa 1972), [Widening street from two to four lanes for fourteen blocks in city did not require EIS.] ; Morris v. Tennessee Valley Auth., 345 F.Supp. 321, 324 (N.D.Ala.1972), [Routine raising and lowering of water level at TVA dam not covered by NEPA.]; Virginians for Dulles v. Volpe, 344 F.Supp. 573, 577-578 (E.D.Va.1972), [Allowing stretcli-jets to operate at national airport not major federal action significantly affecting the human environment. I; Citizens for Reid State Park v. Laird, 336 F.Supp. 783, 788 (D.Maine 1972), [No EIS required for use of state park formarme assault exercises.].