author: HAMLIN, Circuit Judge:

text:
    LIFE OF THE LAND et al., Appellants, v. Claude S. BRINEGAR, Individually and in his capacity as Secretary of the United States Department of Transportation, et al., Appellees, and Kalihi-Palama Community Council et al., Intervenors-Appellees.
    No. 73-1784.
    United States Court of Appeals, Ninth Circuit.
    Sept. 10, 1973.
    Rehearing Denied Oct. 16, 1973.

      Michael R. Sherwood (argued), Brook Hart (argued), William S. Hunt, of Hart, Sherwood, Leavitt, Blanchfield & Hall, Honolulu, Hawaii, for appellants.
    Warren H. Higa, Dep. Atty. Gen. (argued), Honolulu, Hawaii, Peter R. Steenland (argued), Carl Strass (argued), Wallace H. Johnson, Asst. Atty. Gen., Edmund B. Clark, Dept. of Justice, Washington, D. C., George Pai, Atty. Gen., Harold M. Fong, U. S. Atty., William C. McCorriston, Asst. U. S. Atty., Honolulu, Hawaii, for appellees.
    George Playdon (argued), Tobias C. Tolzmann (argued), Honolulu, Hawaii, for intervenor.
    Shearer, Lanctot, Thomas, Knorp, San Francisco, Cal., for National Audubon Society, Inc.; Gifford, Woody, Carter & Hays, New York City, for amicus curiae.
    Before HAMLIN and TRASK, Circuit Judges, and BELLONI, District Judge.

       The Honorable Robert C. Belloni, United States District Judge, Portland, Oregon, sitting by designation.

   OPINION

HAMLIN, Circuit Judge:

INTRODUCTION

This environmental law case is an appeal from the Final Decision and Order of the United States District Court for the District of Hawaii, holding that appellees have complied with the provisions of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §§ 4321 et seq., and the Airport and Airways Development Act of 1970 (AADA), 49 U.S.C. §§ 1701 et seq., and denying appellants’ prayer for a permanent injunction sought against the Secretary of Transportation and other officials in connection with the construction of the reef runway extension (Reef Runway project) at the Honolulu, Hawaii, International Airport (HIA).

We affirm, concluding that appellees have satisfied the provisions of both NEPA and AADA.

THE PARTIES

Appellants, plaintiffs below, are four environmental organizations pur-portedly “concerned with the preservation of our natural environment,” and four named individual residents of areas affected by flight patterns of aircraft arriving and departing from HIA. Appellants all claim to suffer adverse and irreparable injuries as a result of specific and allegedly illegal acts committed by appellees.

Appellees, defendants below, are the Secretary of Transportation, as the federal official ultimately responsible for federal involvement in the Reef Runway project; two named individual administrators of the Federal Aviation Agency said to have been contributors to the Secretary's alleged malfeasance or nonfeasance; and the director of the Hawaii Department of Transportation, as the state official ultimately responsible for prosecution of the project.

Permitted to intervene as defendants below were the Dillingham Corporation, the contractor which has been awarded the construction contract on the proposed project; two named individuals who reside in areas affected by overflights to HIA, and the Kalihi-Palama Community Council, Honolulu, representing other residents of those areas.

THE DISTRICT COURT PROCEEDINGS ■

On November 8, 1972, one day before the scheduled opening of bids for construction of the Reef Runway project, this action for injunctive relief was filed by appellants in the United States District Court for the District of Hawaii. Upon said filing, the district court issued a Temporary Restraining Order.

A hearing on appellants’ motion for a preliminary injunction was held from December 13, 1972, to December 22, 1972. On the latter date, the district court denied the prayer for a preliminary injunction and dissolved the Temporary Restraining Order previously entered.

On March 29, 1973, trial was held on the merits, at which time the evidence of the previous hearing was incorporated as if adduced at that time. Additional testimony was also presented.

On April 13, 1973, the district court filed its Final Order and Decision, denying appellants’ prayer for a permanent injunction. The district court also denied appellants’ motion for an injunction pending appeal.

After filing a timely notice of appeal, appellants on April 27, 1973, sought an injunction pending appeal to this court. On June 11, 1973, after oral argument, we granted that motion. On August 7, 1973, we heard oral argument on the merits, and the case was submitted for decision.

BACKGROUND OF THE PROPOSED PROJECT

There was evidence before the district court supporting the following statement of facts.

Hawaii is approximately 2,400 miles from the continental United States. Over 99 per cent of all passengers travel to and from Hawaii by aircraft, and the Honolulu International Airport has consequently assumed the status of that state’s principal gateway. Further, due to its unique location, HIA is the third largest point of entry for international arrivals in the United States. During labor disputes involving marine transport, HIA takes on special importance, as aircraft become the sole means of shipping and receiving cargo.

HIA serves not only the personal and commercial interests of Hawaii and'the nation, but is also vital to the military. With the closing of adjacent Hickam Air Field, the United States Air Force engages in substantial operations at HIA. Of the over 250,000 operations (a landing or take-off) at the airport in fiscal 1971, military operations accounted for 52,221, with 113,701 commercial operations, and 89,992 for general aviation.

HIA is presently operating at capacity levels during peak hours. Forecasts indicate that the number of aircraft operations will increase to 382,000 by 1975, at which time HIA is expected to reach and surpass both hourly and annual capacity levels, and to 493,000 by 1985.

Accompanying projected increases in aircraft operations at HIA has been an increasingly disturbing problem of aircraft noise pollution. This noise problem, which first appeared in substantial form with the introduction of jet aircraft around 1960, is accentuated because of the airport’s location in close proximity to densely populated residential areas, and to downtown business sections. Further, the prevailing trade winds, which affect aircraft landings and take-offs, complicate the problem.

Increasing operations by jet aircraft have also enhanced the danger of a disaster in the event of a landing or takeoff accident. There is evidence that jet aircraft mishaps most often occur within forty seconds after take-off, or about 1.6 miles from the end of the runway. In the case of HIA’s present configuration, this would place the aircraft in the midst of the Kalihi-Palama residential neighborhood.

In 1961 or 1962, public concern encouraged investigations of potential solutions, including that of simply moving the jet aircraft seaward, away from human habitation.

In 1962, subsequent to the State Legislature’s passage of a resolution reflecting official concern for HIA’s noise problem, the state authorized preparation of a report on means to alleviate the problems concomitant with the introduction of jet aircraft at HIA. This early study resulted in the recommendation of the construction of a “Seaward Jet Runway,” a proposal which was, however, never implemented because its unfavorable alignment with prevailing winds made it too hazardous to use.

In 1967, consultants were authorized by state officials to prepare a plan for future development of HIA. These consultants recommended the construction of a runway to be located 1,300 feet south and parallel to the existing runway. This plan was in turn submitted to a citizens’ Task Force committee, appointed by the Governor of Hawaii. Committee members included responsible local, state and federal officials, and members of the general public. Beginning in February, 1967, and continuing through April, 1970, the Task Force committee met monthly on some 46 or 47 occasions to consider various aspects of the runway construction proposals. These meetings were for the most part open to the public, and publicized in the news media. Included in these discussions were considerations of possible alternatives to, and environmental effects of, the proposed new runway.

The Task Force committee’s work culminated in a June, 1968, recommendation that there be constructed what is essentially the project here at issue — a new 12,000 foot long runway on filled reef land, located 6,700 feet south of the existing runway. Such a runway would largely eliminate the spectre of a disastrous aircraft accident in a populated residential area, and would also reduce noise pollution by moving it more than a mile away.

In September, 1968, airline representatives to the Task Force committee commissioned their own study, which concluded that the proposed runway was unnecessary, and that the noise problem could be effectively alleviated with an extension of the existing runway, and the construction of a shorter runway for inter-island traffic. After review and discussion, the Task Force committee in January, 1970, concluded that the airline proposal provided insufficient benefits to justify a change from the plan of the Reef Runway concept. The final recommendation of the Task Force committee in favor of the Reef Runway was approved by the Governor of Hawaii in February, 1970.

In order to fund the project, the state applied to the Federal Aviation Agency for a matching 50-50 grant pursuant to the Airport and Airways Development Act of 1970, 49 U.S.C. § 1701 et seq. In compliance with that statute, a hearing was held on the proposed Reef Runway in Honolulu on March 22, 1971. Life of the Land and the Hawaii Audubon Society, two of the appellants herein, appeared at the hearing, urging consideration of measures to protect a rare water bird endangered by the proposed project.

The Federal Aviation Agency and the State of Hawaii are presently committed to the construction of the Reef Runway. It is to be located in Keehi Lagoon, Manala Bay, south of the existing runway system. The project, whose estimated cost is upwards of $60 million, is scheduled to be completed in two increments by 1975.

There is nothing in the record indicating that the planners of the project believed, or had reason to believe, that the project would have an irreparably deleterious effect upon the environment. On the contrary, the possibility of various environmental side benefits, such as reduction of air and water pollution, enhancement of recreational boating facilities and improvement in area fishing, see infra, were all hopefully anticipated.

THE NATIONAL ENVIRONMENTAL POLICY ACT

The National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq., became effective on January 1, 1970. The Reef Runway project is conceded by appellees to be a “major federal action significantly affecting the quality of the human environment,” and is therefore subject to compliance with that statute.

NEPA, termed by one court “the broadest and perhaps most important” of recent federal environmental legislation, Calvert Cliffs’ Coordinating Committee, Inc. v. United States AEC, 146 U.S.App.D.C. 33, 449 F.2d 1109, 1111 (1971), “essentially states that every federal agency shall consider ecological factors when dealing with activities which may have an impact on man’s environment.” Zabel v. Tabb, 430 F.2d 199, 211 (5 Cir. 1970). See generally, Calvert Cliffs’, supra, 449 F.2d at 1111 et seq.

To insure that environmental ramifications of proposed projects are properly considered by those responsible for their implementation, section 102(2) (C) of NEPA, 42 U.S.C. § 4332(2)(C) requires that an environmental impact statement (EIS) be prepared to “assess adverse environmental effects and discuss alternatives to the proposed action.” Committee for Nuclear Responsibility, Inc. v. Seaborg, 149 U.S.App.D.C. 398, 463 F.2d 783, 786 (1971). As such, the EIS “provides a basis for (a) evaluation of the benefits of the proposed project in light of its environmental risks, and (b) comparison of the net balance for the proposed action with the environmental risks presented by alternative courses of action.” Natural Resources Defense Council, Inc. v. Morton, 148 U.S.App.D.C. 5, 458 F.2d 827, 833 (1972).

Compliance with NEPA’s requirement that an EIS be prepared required the officials involved to essentially duplicate in the form of more formalized studies the accumulated considerations of the preceding several years of investigation and planning, which we have described supra Preparation of the EIS commenced in December, 1970, and continued until the draft environmental statement was sent out for comments on September 23, 1971. Participating in the writing of the draft EIS were federal and state officials, and employees of the Ralph M. Parsons Company, a private consulting firm. After comments were solicited and received from numerous federal, state and local agencies, private organizations (including three of the appellants), and interested individuals, the team returned to work and prepared the final EIS for official approval and submission to the Council on Environmental Quality (CEQ).

The final EIS, dated January, 1972, was approved by the Federal Aviation Agency’s regional director, in connection with his obligation under AADA. On January 21, 1972, the director transmitted the EIS and the comments thereon to the Federal Aviation Agency’s Washington, D. C. headquarters, for the approval of the Department of Transportation’s Assistant Secretary for Environment and Urban Systems. The Assistant Secretary approved the EIS on February 29, 1972, and transmitted it to the CEQ on March 1,1972.

The EIS totals 46 pages, plus appendages. It sets forth four purposes for construction of the Reef Runway project: (1) Reduction of the level of aircraft noise over metropolitan Honolulu, and the Kalihi-Palama area, adjacent to HIA, in particular; (2) improvement in safety by moving operations seaward and away from populated areas in the event of aircraft accidents; (3) increasing airfield capacity to provide for efficient handling of the increasing traffic; and (4) providing an alternative runway during periods when the existing principal runway is under repair.

The major thrust of this appeal is appellants’ contention that the preparation, contents and distribution of the EIS failed to comply with NEPA requirements. We will examine the specifies of the EIS in our discussion and disposition of this contention.

Delegation of the EIS’ Preparation

Appellants first assert that the preparation of the instant EIS was improperly delegated to a private consulting firm which had a major and direct contingent financial interest in the Reef Runway’s construction.

In June, 1968, the state appellees entered into a contract with Ralph M. Parsons Company (Parsons), a private consulting firm, whereby Parsons agreed to render management consultant services for the engineering, design and construction of the Reef Runway project. According to the contract terms, Parsons was to receive a “Guaranteed Maximum Compensation” which consisted of “15.5% of the Estimated Total Project Cost.” The contract defined “project” as “construction, ready for operation by state,” of five components, one of which was the Reef Runway.

It does appear from the record that Parsons had a financial interest in an affirmative decision on the proposed project. We find nothing, however, in either the wording of NEPA or the case law, which indicates that, as a matter of law, a firm with a financial interest in the project may not assist with the drafting of the EIS. As the Eighth Circuit has indicated, compliance with section 102 of NEPA is based upon good faith objectivity rather than subjective impartiality. Environmental Defense Fund v. Corps of Engineers, 470 F.2d 289, 296 (8 Cir. 1972), aff’g, 342 F.Supp. 1211 (D.Ark.1972). See also Sierra Club v. Froehlke, 359 F.Supp. 1289, 1342 (S.D.Tex.1973).

Appellees concede that under NEPA, the applicable federal agency must bear the responsibility for the ultimate work product designed to satisfy the requirement of section 102(2)(C). We find no departure from this requirement here. The record indicates that Federal Aviation Agency officials actively participated in all phases of the EIS preparation process. The chief of the Airport Division of the Federal Aviation Agency’s Pacific Region testified that he assisted with the preparation from its early stages onward. He stated that, as part of the preparation, regular meetings with other federal officials, State of Hawaii officials, as well as the Parsons representatives, were held. Further, an employee of Parsons testified as to the active involvement of the Federal Aviation Agency in the EIS preparation process. The Parsons employee concluded that the EIS “was more or less a joint effort by Parsons, the State and the F.A.A.”

The record further reveals that federal officials in Washington, upon receipt of the EIS, continued active examination thereof.

We agree with the district court’s conclusion that “the evidence shows that F. A.A. officials did in fact work together with state officials and a private contractor and gave it close attention.” The case law dealing with the delegation of EIS preparation has heretofore been limited to federal agency delegation to a state agency, and has permitted such delegation where the federal agency significantly participated in the preparation of the EIS. See Citizens for Mass Transit Against Freeways v. Brinegar, 357 F.Supp. 1269 (D.Ariz.1973); National Forest Preservation Group v. Volpe, 352 F.Supp. 123 (D.Mont.1972). Unlike Greene County Planning Board v. F. P. C., 455 F.2d 412, 420 (2 Cir.) cert. denied, 409 U.S. 849, 93 S.Ct. 56, 34 L.Ed.2d 90 (1972) and Conservation Society of Southern Vermont, Inc. v. Secretary of Transportation, 362 F.Supp. 627, at 630 (D.Vt. July 27, 1973), the federal agency here involved did not “abdicate a significant part of its responsibility” to another organization.

While Parsons may have assisted in the EIS’ preparation, the significant and active participation by the F.A.A. therein precludes us from concluding that there was any improper or illegal delegation in this case.

Publication and Dissemination of the EIS

Section 102(2) (C) of NEPA, 42 U.S.C. § 4332(2) (C), provides in part:

Prior to making any detailed state-' ment, the responsible Federal official shall consult with and obtain the comments of any Federal agency which has jurisdiction by law or special expertise with respect to any environmental impact involved. Copies of such statement and the comments and views of the appropriate Federal, State and local agencies, which are authorized to develop and enforce environmental standards, shall be made available to the President, the Council on Environmental Quality and to the public as provided by section 552 of Title 5, and shall accompany the proposal through the existing agency review processes; (emphasis added)

It is uncontested that the comments to the draft statement were not attached to the final EIS and further, that the F.A.A. failed to include within the EIS the text of all references used in the statement’s preparation. Appellants urge that these omissions render the EIS legally insufficient. We disagree.

The federal agency comments: These comments to the draft statement were compiled as a separate document. The comments did, however, follow the proposal through the agency review process, as required by NEPA. See Monroe County Conservation Society, Inc. v. Volpe, 472 F.2d 693, 698 (2 Cir. 1972). The record indicates that the comments were submitted to the Assistant Secretary of Transportation for Environmental and Urban Systems. The comments were subsequently forwarded to the Council on Environmental Quality and the National Technical Information Service, where they became a part of the public record. In Monroe County, supra, relied upon by appellants, the court noted that “there is no indication that [the comments] accompanied the statement through the review process.” 472 F.2d at 698.

References to the EIS: Appellants also assign error to the fact that the F. A.A. failed to include within the EIS the text of all 22 references used in the statement’s preparation.

The record indicates that these references consisted of approximately 2,000 pages of technical material. They were kept on file and made available at the F.A.A.’s regional office in Honolulu. The appellants had ready access to these documents, and did in fact avail themselves of them. The references were also available for forwarding to Washington upon request.

Appellants’ insistence that the federal agency comments and technical references physically accompany the EIS is an attempt to place form over substance. We have previously rejected such tactics in the NEPA context. See Jicarrilla Apache Tribe of Indians v. Morton, 471 F.2d 1275, 1283-1285 (9 Cir. 1973). As one court has indicated, “[NEPA] must be construed in the light of reason.” N.R.D.C. v. Morton, supra, 458 F.2d at 837.

There was no error in either the publication or dissemination of the EIS in this case.

Substantive Content of the EIS

Appellants further contend that the EIS is substantively inadequate, and have submitted voluminous briefs in support of their argument. Appellants’ substantive attack on the EIS encompasses assertions that the statement fails to discuss the proposed runway’s environmental consequences of increased population and air pollution, fails to discuss “non-construction” alternatives to the project, and inadequately discusses those alternatives which are considered. Further, appellants assert that the EIS discussion of the runway’s environmental effects upon noise pollution, water quality, recreation and wildlife is inadequate.

Standard of Review: Agency action under NEPA is subject to judicial review pursuant to § 10(e) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). See Environmental Defense Fund v. Corps of Engineers, supra, 470 F.2d at 298-299, n.14; Town of Groton v. Laird, 353 F.Supp. 344, 348 (D.Conn. 1972). As such, a reviewing court may set aside agency action which is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.” See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 413, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971). See also Scenic Hudson Preservation Conference v. F. P. C., 453 F.2d 463, 467 (2 Cir. 1971), cert. denied, 407 U.S. 926, 92 S.Ct. 2453, 32 L.Ed.2d 813 (1972). Cf. Save Our Ten Acres v. Kreger, 472 F.2d 463, 465-466 (5 Cir. 1973). As we recently stated in Jicarilla Apache Tribe of Indians v. Morton, 471 F.2d 1275, 1281 (9 Cir. 1973):

“Reversal of a substantive decision is appropriate only to situations where ‘the actual costs and benefits that was struck was arbitrary or clearly gave insufficient weight to environmental valves.’ ” (citation omitted) See also, Environmental Defense Fund v. Froehlke, 473 F.2d 346, 352-353 (8 Cir. 1972); N.R.D.C., Inc. v. Morton, supra, 458 F.2d at 838.

We examine appellants’ substantive challenges, therefore, mindful of the circumscribed nature of our review.

Demographic Effects: Appellants argue that the EIS is inadequate in that it fails to include a study of the effect of the Reef Runway project upon the population of Honolulu and Hawaii. Appellants contend that a major incentive behind construction of the Reef Runway is Hawaii’s need to accommodate and encourage increased tourism to the state. Appellants then posit that the effect of increased tourism will be to increase the permanent population of Honolulu, to the detriment of the local “quality of life.” Hence, they argue that the EIS must contain an analysis of the demographic effects of the project.

We reject this reasoning. That an increase in Honolulu’s tourism will result in an increase in that city’s permanent population is speculative. Certainly, there is no empirical data in the record supportive of the allegation. We agree with the district court’s conclusion that “requiring the kinds of demographic discussion suggested by [appellants] is unreasonable in the context of this project.”

Hanly v. Mitchell, 460 F.2d 640 (2 Cir.), cert. denied, 409 U.S. 990, 93 S.Ct. 313, 34 L.Ed.2d 256 (1972) and Lathan v. Volpe, 350 F.Supp. 262 (W.D.Wash. 1972) where EIS discussions of demographic ramifications of the projects in issue were held to be warranted, are factually distinguishable. Hanly involved the proposed construction of a prison detention facility in New York City, while Lathan involved the proposed construetion of a highway through a populated Seattle area. In both cases, the proposed project could reasonably be projected to have an effect upon local population patterns to a degree not evidenced here.

Air Pollution: It is agreed by all parties that no studies were made of the effect of the Reef Runway project upon air pollution. The failure to conduct such a study, however, was not an inadvertent omission. Rather, a threshold decision was made by federal and state officials that air pollution studies were unnecessary in this specific case because of the very nature and location of the proposed project.

The Reef Runway will relocate aircraft take-offs, the major source of aircraft air pollution, 6,700 feet seaward, and away from the populated areas of Honolulu. The essence of this project, therefore, involves moving the sources of the air pollution away from people. The federal and state officials concluded that detailed air pollution studies were unnecessary, on the premise that at the very least, the project was extremely unlikely to worsen the air quality in any relevant sense.

Further, appellants do not claim that the project will deteriorate the existing air quality; rather, they urge that a detailed study may conceivably reveal that anticipated environmental improvement may be less than expected.

The district court acknowledged that the EIS may well have set forth in more detail the reasoning leading to the conclusion that there were no significant air pollution problems inherent in the project. But, on the record as a whole, we are unable to conclude that the district court erred in rejecting appellants’ air pollution arguments.

Alternatives: Section 102(2) (C) (iii) of NEPA, 42 U.S.C. § 4332(2) (C) (iii), requires that the EIS include a discussion of “alternatives to the proposed action.” See CEQ Guideline, § 62 (iv), 36 Fed.Reg. 7725 (1971). Appellants contend that the EIS here “fails completely to discuss some reasonable and feasible alternatives to the proposed action,” and “treats other alternatives in insufficient detail.”

The EIS contains a brief discussion of four alternatives to the proposed construction of the Reef Runway extension. Three involve various runway concepts and configurations, and the fourth, the alternative of taking no action.

In support of their allegation that the alternatives which were considered were insufficiently treated, appellants introduced at trial testimony calculated to discredit certain data considered in rejecting only one alternative — that of extending the existing runway back into adjoining Hickam Air Field. The planners, in addition to concluding that this alternative would create more noise than it would alleviate, noted that the replacement cost to the military would be $37 million. At trial, appellants introduced evidence indicating that this figure was inflated. No other evidence on the subject of alleged insufficiently treated alternatives was offered. There is, for instance, no allegation that an important consideration in connection with a given alternative was ignored. We find no error in the EIS’ discussion of alternatives.

In addition to challenging the disposition in the EIS of alternatives which were in fact considered, appellants further contend that there exist alternatives not considered which could well accomplish the objectives of the Reef Runway project. These alleged alternatives are identified by appellants as “non-construction alternatives,” which they defined as “those arrangements for managing airports as to questions like noise and capacity and air pollution which do not involve the building of new structures.”

For instance, appellants suggest removal of the Air Force’s KC-135 jet tankers, the loudest of the aircraft operating from HIA, to an adjacent airfield. There is, however, evidence indicating that the Air Force had refused to move its jet tankers to another base, effectively eliminating implementation of this alternative. Further, removal of the jet tankers would obviously do little to alleviate the significant noise pollution and safety problems attributable to commercial aviation.

Another alternative urged by appellants is the imposition of higher landing fees at HIA, in the hope of reducing commercial aircraft traffic. This alternative was considered early in the planning process, but rejected as ineffectual inasmuch as attempts at other airports to reduce traffic by such means have proven unsuccessful.

Appellants further suggest that private aircraft be transferred to another airfield. Again, however, such a transfer would have no effect upon the noise and safety problems presented by larger aircraft. It further appears that a ban on general aviation would violate legal agreements entered into by HIA, guaranteeing the airport’s accessibility to all users.

Appellants also urge that the inter-island aircraft operating out of HIA could be required to commence their take-offs at a different point on the present runway configuration, thereby eliminating the noise problem. The record, however, indicates that only a minor percentage of the aircraft operating at HIA would be affected by this alternative, and it would therefore have only a token effect on the over-all situation.

Finally, there is nothing in the record to indicate that alternatives such as the readoption of airline schedules, imposition of curfew restrictions, or conversion to wide-body aircraft design are either reasonable or feasible alternatives in this case.

NEPA’s “alternatives” discussion is subject to a construction of reasonableness. N.R.D.C., Inc. v. Morton, supra, 458 F.2d at 834. Certainly, the statute should not be employed as a crutch for chronic faultfinding. Accordingly, there is no need for an EIS to consider an alternative whose effect cannot be reasonably ascertained, and whose implementation is deemed remote and speculative. Id. at 834. Rather, the EIS need only set forth those alternatives “sufficient to permit a reasoned choice.” Id. at 836. This has been done. See also Committee for Nuclear Responsibility, Inc. v. Seaborg, supra, 463 F.2d at 787; Pennsylvania Environmental Council v. Bartlett, 315 F.Supp. 238, 250 (M.D.Pa.1970).

Appellants also challenge the adequacy of the EIS’ discussion of the Reef Runway’s impact upon the human and natural environment. They challenge statements as unsupportable, contradictory and factually erroneous. We examine these contentions, again mindful of the limited scope of our review, supra.

Noise Pollution: Appellants do not assert that the project will have an adverse effect upon the environment by increasing noise pollution. Indeed, a prime reason for the Reef Runway project is to reduce the level of jet noise in the areas adjacent to HIA.

The EIS does discuss and graph the noise situation in some detail. There is substantial evidence in the record, including testimony by responsible federal officials, supporting the EIS’ conclusion that the project will result in significant reduction of noise pollution.

Appellants’ prime objection to the EIS’ treatment of noise pollution is the omission therein of “on-site” noise measurement techniques. In lieu thereof, the F.A.A, utilized another well-recognized scientific technique, which rendered “on-site” measurements unnecessary. The record indicates that “on-site” measurements of independent organizations were in fact considered by the planners.

Undoubtedly, there exists a plethora of scientific studies which could have been, but were not, used to measure the noise pollution levels in the area involved. We cannot, however, conclude that the district court made a “clear error in judgment,” Citizens to Preserve Overton Park, supra, 401 U.S. at 416, 91 S.Ct. at 823, in concluding that “(t)he kinds of studies suggested by [appellants] may be useful but are hardly necessary.”

Water Quality: The EIS, utilizing four scientific studies undertaken for the project, concluded that the project would result in an improvement of the water quality in the marine area adjacent to the Reef Runway.

At trial, appellants presented scientific studies and various letters from university professors purportedly contradicting the EIS’ water quality conclusions.

One scientist testified that one of the studies referred to in the EIS, a report of a hydraulic study prepared under the auspices of the University of Hawaii, might be read as indicating a different conclusion from that given in the EIS. The record indicates, however, that this study was based upon a proposed configuration of the project which was subsequently changed. An analysis of the project based upon this new configuration was supportive of the hydraulic study.

Appellant also introduced letters at trial after testimony was terminated, which questioned certain data and conclusions relied upon in the preparation of the EIS’ water quality analysis. Apart from the obvious observation that the letter writers were, for the most part, not available for cross-examination, we note that disagreement among experts will not serve to invalidate an EIS. Indeed, “(f)urther studies, evaluation and analyses by experts are almost certain to reveal inadequacies or deficiencies.” Environmental Defense Fund v. Corps of Engineers, 342 F.Supp. 1211, 1217 (E.D.Ark.1971), aff’d, 470 F.2d 289 (8 Cir. 1972). The purpose of the EIS is to inform the decision makers of the environmental ramifications of the proposed action. See Committee for Nuclear Responsibility v. Seaborg, supra, 463 F.2d at 787. The statement need not achieve scientific unanimity on the desirability of proceeding with the proposed action.

Recreation: The EIS anticipates an enhancement of recreational boating facilities and an improvement in fishing conditions as a result of improvement in the water quality of Keehi Lagoon, supra, and the construction of channels to the open sea.

Appellants contend, however, that construction of the Reef Runway will result in “loss of surfing sites” and “loss of the effective use of the proposed Sand Island Park due to high aircraft noise.”

In support of the first allegation, appellants introduced at trial the testimony of the founder of a local surfing club, who was described as an “out-reach” worker with disadvantaged youths. The witness testified that the youths feared the project might result in adverse surfing conditions. This was the sole evidence produced at trial supportive of the “loss of surfing site” arguments. The district court was understandably unpersuaded by this hearsay testimony.

The contention that use of a proposed nearby park will be adversely affected as a result of noise from aircraft utilizing the Reef Runway was adequately considered in the EIS.

On the record as a whole, we are unable to upset the district court’s conclusion that the EIS adequately deals with the recreational aspects of the Reef Runway project.

Wildlife: The EIS acknowledges that the proposed project will have an adverse environmental effect upon certain wildlife. This is the only clearly documented adverse environmental effect of the project which could be said to be significant. The statement notes that the Reef Runway project will displace some 186 acres of silted coral mudflats used for feeding and roosting by birds, including the rare Hawaiian Stilt. Up to 100 of these endangered birds may be affected. Appellants’ concern for the Hawaiian Stilt is the basis of their attack upon this aspect of the EIS.

The record indicates that the plight of the Stilts has continuously been a matter of concern to the planners of the project. As recommended by appellants, the replacement habitats at nearby Pearl Harbor Naval Station are being developed in conjunction with the project. Also included in the project itself is the construction of certain ponds and islets suitable for the birds at a cost in excess of $350,000. Cf. Sierra Club v. Froehlke, supra, 359 F.Supp. 1289.

The main contention of appellants here is that the size of the replacement habitats may prove to be inadequate. But the district court noted, and we concur, that if the size of the habitats do indeed prove to be inadequate, there is no reason why adjustments could not be made even if the construction as planned proceeds to completion.

The record indicates that the project’s planners were concerned with, and took adequate steps to minimize, the harm presented to the birds. The discussion in the EIS of the project’s environmental ramifications upon wildlife was adequate.

It is our conclusion that the EIS here in issue adequately complies with NEPA requirements

AIRPORT AND AIRWAYS DEVELOPMENT ACT OF 1970

In addition to their NEPA contentions, appellants assert that appellees have failed to comply with the requirements of section 16(c) (4) of the Airport and Airways Development Act of 1970, 49 U.S.C. § 1716(c)(4). We find this contention equally without merit.

Section 16(c)(4) of AADA requires, in pertinent part, that the Secretary of Transportation

shall authorize no [airport extension] project found to have adverse environmental effect unless (he) shall render a finding, in writing, following a full and complete review, which shall be a matter of public record, that no feasible and prudent alternative exists and that all possible steps have been taken to minimize such adverse effect.

The record indicates that the required finding was made as a product of lengthy review by federal officials. The finding is supported by the EIS which, one court has held, may itself be considered as a section 16(c)(4) finding. Citizens Airport Commission of Chesterfield County v. Volpe, 351 F.Supp. 52, 59 (E.D.Va.1972).

There are virtually no cases indicating the standard of review a court must employ when analyzing compliance with section 16(c)(4). In Citizens to Preserve Overton Park v. Volpe, supra, however, the Supreme Court construed section 4(f) of the Department of Transportation Act of 1966, 49 U.S.C. § 1653(f), which contains virtually the identical relevant language of AADA. The Supreme Court there stated that “the reviewing court must be able to find that the Secretary could have reasonably believed that in this case there are no feasible alternatives or that alternatives do involve unique problems.” 401 U.S. at 416, 91 S.Ct. at 823 (emphasis added). The Court further noted that pursuant to section 706(2)(A) of the Administrative Procedure Act, the Secretary’s action must not have been arbitrary or capricious. Id.

Incorporating the discussion of the adequacy of the EIS in our analysis of appellees’ compliance with NEPA, we conclude that under the applicable standards of review, appellees have complied with AADA.

CONCLUSION

For the reasons stated herein, the injunction pending appeal is hereby dissolved, effective immediately, and the judgment of the district court is

Affirmed.

      . The environmental groups, all non-profit organizations, are Life of the Land, Hawaii Audubon Society, Friends of the Earth, and Sierra Club. The National Audubon Society lias submitted an amicus brief.

      . Appellees below did not question, nor did the district court consider, the propriety of appellants’ standing to maintain this action. We are satisfied, however, that appellants are properly before this court. See United States v. SCRAP, 412 U.S. 669, at 683-690, 93 S.Ct. 2405, at 2414-2417, 37 L.Ed.2d 254 (1973). Cf. Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); San Francisco Tomorrow v. Romney, 472 F.2d 1021, 1023-1024 (9 Cir. 1973).

      . At the time of this suit’s initiation in the district court, John A. Volpe was the Secretary of Transportation. He has subsequently been replaced by Claude S. Brinegar.

      . In its Final Order and Decision, the district court incorporated by reference the reasoning set forth in its December 22, 1972, Decision and Order. The latter is reported at 363 F.Supp. 1171 (D.Haw.1972).

      . HIA is 32nd in small craft operations.

      . Section 102(2) (O) of NEPA provides in part:
      “Sec. 102. The Congress authorizes and directs that, to the fullest extent possible:
      (1) the policies, regulations, and public laws of the United States shall be interpreted and administered in accordance with the policies set forth in this chapter, and (2) all agencies of the Federal Government shall—
      * * :¡; * *
      (C) 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,
      (ii) any adverse environmental effects which cannot be avoided should the proposal be implemented,
      (iii) alternatives to the proposed action,
      (iv) the relationship between local short-term uses of man’s environment and the maintenance and enhancement of long-term productivity, and
      (v) any irreversible and irretrievable commitments of resources which would be involved in the proposed action should it be implemented.
      íi¡ * * # 5}!>»

      . NEPA does not apply retroactively, but it is applicable to continuing or on-going federal projects commenced prior to January 1,1970. Lathan v. Volpe, 455 F.2d 1111, 1116, 1121 (9 Cir. 1971). The cases are collected in Citizens Organized to Defend the Environment, Inc. v. Volpe, 353 F.Supp. 520, 538 (S.D.Ohio 1972) and Sierra Club v. Froehlke, 359 F.Supp. 1289, 1322 (S.D.Tex. 1973).
      NEPA does not contemplate that the decision to proceed with the project be first made by the officials involved, subsequent to which the EIS is prepared as a mere technicality in fulfillment of the statute. Here, however, the federal and state officials involved had contemplated and acquiesced in proceeding with the Reef Runway project before NEPA’s passage. The fact the EIS was here prepared after a decision to proceed with the runway project had been made is attributable to the timing of NEPA’s effectiveness. We reject the implication made by appellants’ counsel at oral argument that the appellees have undermined the thrust of the statute. To the contrary, there is ample evidence in the record indicating that appellees have acted in a good faith attempt to comply with both the spirit and letter of NEPA. See City of New York v. United States, 344 F.Supp. 929, 938 (E.D.N.Y. 1972).

      . As reasonably interpreted, NEPA does not require the Secretary of Transportation to personally review and approve every EIS submitted to Washington. Cf. United States v. King, 478 F.2d 494 (9 Cir. 1973) (delegation of authority to authorize interception of oral and wire communications pursuant to 18 U.S.C. §2516).

      . Latlian v. Volpe, supra, 455 F.2d at 1122, 1126, relied upon by appellants, is not apposite. There, no EIS had been prepared.

      . In Hanly v. Mitchell, supra, the court noted, 460 F.2d at 642 :
      “Plaintiffs are all members of the Chat-ham Square Civic Community for a Planned Community, a non-profit group concerned with the development and protection of that portion of lower Manhattan called the Civic Center. Although the area contains many government buildings, including several courthouses, surprisingly at least 50,000 people live there and in adjacent Chinatown. Included in that group are over 3,000 persons living in approximately 660 cooperative apartment buildings called Chatham Towers and Chatham Green. These directly face the proposed new jail, some 100-150 feet away.”
      In Lathan v. Volpe, supra, the proposed highway was described as follows, 350 F.Supp. at 263:
      “The proposed segment involved herein would create a ten-lane highway along the alignment of an existing four-lane highway. It would cross Lake Washington from the east on a floating bridge, enter Seattle by a tunnel through the Mount Baker district, emerge and continue through a heavily populated area, and join 1-5, a north-south interstate highway.” See also Lathan v. Volpe, supra, 455 F.2d at 1114, where we noted that this highway ran “through a densely populated, low income, city area; * * *.”
      Similarly distinguishable is Sierra Club v. Froehlke, supra, 359 F.Supp. 1289, where the court observed that “there is reason to believe that there will be development, growth and industrial expansion as a result” of the project there in issue. As we note in the text, appellants’ contention that the Reef Runway project will result in expansion of the permanent population of Honolulu is mere speculation, unsupported by the record.

      . The other construction alternatives considered were construction of the “Seaward Jet Runway,” and construction of a close-in parallel runway. Both were rejected because of inability to alleviate the noise and safety problems.
      The alternative of taking no action was rejected because, without the proposed project, high noise levels would continue unhampered, and the problems of safety would remain unsolved. Further, the failure to provide for the expected growth in airport traffic would result in increasing delays.

      . At any rate, the state is apparently without constitutional authority to impose aircraft curfew restrictions. City of Burbank v. Lockheed Air Terminal, 411 U.S. 624, 93 S.Ct. 1854, 36 L.Ed.2d 547 (1973).

      . We reject appellants’ implication that various techniques utilized at airports in the continental United States are necessarily, adaptable to the unique situation existing at HIA.

      . Appellants, noting that the EIS must stand or fall on its own merits, also contend that the district court impermissibly permitted the Federal Aviation Agency to “bolster” the document with “extrinsic evidence.”
      The record indicates otherwise. The “extrinsic evidence” was testimony showing why certain matters were not. contained in the EIS, and was presented after appellants had challenged such deficiencies. The testimony was by “the administrative officials who participated in the decision * * * explaining their action.” Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 420, 91 S.Ct. at 825. There was no error.

      . Section 4(f) of the Department of Transportation Act of 1966, 49 U.S.C. § 1653(f), mandates that the Secretary of Transportation disapprove any project which requires the use of parklands unless “(1) there is no feasible and prudent alternative to the use of such land, and (2) such program includes all possible planning to minimize harm to such park, recreational area [etc.] * S}i tf

      The relevant language in section 16(c)(4) of AADA reads “no feasible and prudent alternative exists,” and “all possible steps have been taken to minimize” harm to the environment.


source: Caselaw Access Project

author: MANSFIELD, Circuit Judge:

license: Public Domain

text:
    Raymond SPECTOR, Plaintiff-AppelleeAppellant, v. Milton E. MERMELSTEIN, Defendant-Appellant-Appellee.
    Nos. 988-990, Dockets 72-1939, 73-1198, 73-1209.
    United States Court of Appeals, Second Circuit.
    Argued June 20, 1973.
    Decided Sept. 11, 1973.

      Simon H. Rifkind, New York City (Allan Blumstein, Jack Auspitz, Paul, Weiss, Rifkind, Whax’ton & Garrison, New York City, of counsel), for defendant-appellant-appellee.
    Stuart A. Jackson, New York City (James J. Maloney, Melvin L. Schweitzer, John B. Koegel, Roy all, Koegel & Wells, New York City, of counsel), for plaintiff-appellee-appellant.
    Before FRIENDLY, FEINBERG and MANSFIELD, Circuit Judges.
   MANSFIELD, Circuit Judge:

In this nine-year old, factually complex diversity suit by Raymond Spector against his attorney Milton E. Mermelstein, charging the latter with negligence and breach of fiduciary duty in his representation of Spector in certain business tx'ansactions, Judge J. Edward Lumbard, sitting by designation without a jury in the Southern District of New York, awarded $250,000 damages to Spec-tor as compensation for loss suffered by him on two loans to the OCM Cox-poration (“OCM” herein). Upon this appeal Mermelstein contends that the loss was not caused by him but by Spector’s own conduct. By way of cross-appeal Spec-tor argues that under New York law it was error for the district court to have denied him prejudgment interest. We affirm the award of damages, reverse the denial of pre judgment interest, and remand for assessment of such interest'.

Since the complicated factual picture is recounted in detail in Judge Lumbard’s thorough opinion reported at 361 F.Supp. 30 (S.D.N.Y.1972), we see no need for repetition here other than to sketch those highlights that are essential to this opinion.

The suit below arose out of Mermelstein’s representation of Spector in the making of two loans totalling $250,000 to OCM, which was the owner of a hotel and gambling casino in Reno, Nevada, operated by the Riverside Casino Corporation (“RCC” herein). Prior to his representation of Spector in the negotiation of these loans Mermelstein had on March 4, 1962, as the representative of a different client which was considering a merger with OCM, learned that OCM and RCC were in financial difficulty. At a meeting on that date with William Miller, the principal stockholder and manager of OCM and RCC, and William Ehrens, an accountant, Mermelstein had been advised that OCM’s income was derived entirely from a monthly rental of $37,500 paid to it by RCC under a lease of the hotel and gambling casino to RCC, which operated them. Each monthly rental received by OCM was used entirely by it to make a monthly payment due on three mortgages on the property aggregating $3.8 million. OCM also owed $154,000 to a Mr. Crummer, payment of which was due that week. A default in payment would result in loss of the property, since Crummer held as security for the loan a deed to the property and a cancellation of the lease of it from OCM to RCC. Mermelstein rejected the merger but suggested that Miller and Ehrens contact Spector concerning a loan to cover the payment to Crummer.

On March 6, 1962, Miller, Ehrens and Spector met. At some point Mermelstein joined the meeting. Spector was told that as a result of partial payment of the $5 million dollars in mortgages on the property, which reduced the out-' standing indebtedness to approximately $3.8 million dollars, OCM’s equity in the property amounted to $1.2 million dollars, and that if they could pay off the $154,000 loan and continue operating the hotel and casino, the financial prospects were bright. Mermelstein failed to apprise Spector of his earlier meeting on March 4, or of the fact that OCM’s monthly income from RCC was being used entirely to defray its monthly mortgage obligations. Spector agreed to loan not only the $154,000, but an additional $46,000 which was needed to renovate the hotel restaurant. The security for the loan was to be the equity in the underlying property, evidenced by the deed and bill of sale and the cancellation of the lease to RCC. In addition both Spector and Mermelstein were to receive shares of OCM stock.

During the next few days steps were taken to consummate the deal. Spector, with Mermelstein’s assistance, arranged for the Bankers Trust Company to make the loan of $200,000 to OCM on March 12, 1962, against OCM’s note which Spector endorsed and collateralized with his personal bankbooks. In the meantime, on March 8, 1962, Mermelstein received a telegram from Crummer’s escrow agent and attorney, William Bradley, informing him that Crummer had on March 1 extended the time for payment until March 15 and that only $90,000 (rather than the sum of $154,000 earlier represented by Miller) was then due. Mermelstein failed to inquire of Miller about this apparent discrepancy. Nor did he inform Spector of the substantial difference in the amount due.

On March 11, 1962, Mermelstein attended a further meeting which underscored OCM’s dire financial straits but again he failed to keep Spector informed. On that date a meeting was held by Ehrens and various third persons, to which Mermelstein was invited for reasons that are not entirely clear, to discuss the possibility of a merger between OCM and Terry Industries, a company whose bleak financial outlook rivaled OCM’s, at which OCM’s need for $1.75 million dollars in interim financing was a prime topic of discussion. Notwithstanding this further evidence that OCM’s precarious financial condition jeopardized Spector’s $200,000 loan, Mermelstein failed either to delay the disbursement of the money or to inform Spector.

On March 14 Mermelstein received two letters from Bradley, the first confirming the consummation of the loan and the second noting that the deed, the bill of sale and the lease cancellation which comprised Spector’s security “are not to be recorded and we have to rely on Miller’s good faith in not conveying any of the properties. . . .” While the record is unclear as to whether Mermelstein had previously understood the fragile reed upon which Spector’s security rested — Miller’s good faith — the record is clear that as Speetor’s attorney he had helped to structure the transaction. Nevertheless, he failed to show Spector the second letter of March 14 or communicate the contents to him.

In late April Miller telephoned Spec-tor to ask for an additional loan of $50,000, to be secured by the same collateral, as exigent circumstances had prevented the use of the $46,000 for the restaurant renovation. Spector testified that he agreed to the loan after receiving assurances from Mermelstein that the loan would be adequately secured. On May 1 Mermelstein prepared a telegram outlining the terms of the loan including the delivery of two OCM shares to Spector and three shares to himself. In early May the loan was consummated.

Because of the rapidly deteriorating financial condition of the casino, which went into bankruptcy in December, 1962, the $250,000 loaned by Spector to OCM was never repaid. In this action Spec-tor seeks recovery of the $250,000 from Mermelstein on the grounds, among others, that Mermelstein failed to exercise reasonable care and diligence in his representation of Spector and that he was guilty of both negligence and breach of fiduciary duty in failing to reveal certain material facts to Spector. At trial Mermelstein, while giving a somewhat different version of some of the crucial meetings forming the basis of Spector’s claim than that testified to by Spector, did not seriously dispute his own failure to disclose certain of the foregoing facts to Spector. Mermelstein’s defense was based principally on his contention that Spector’s loss was not caused by Mermelstein’s conduct but by Spector’s own decision, beginning in May, 1962, to become a gambling casino operator, which led to his extending additional personal credit to OCM, his taking over of the operation of the casino, his refinancing of the existing mortgages on the premises, the bankruptcy of the casino and the eventual sale of the underlying properties to a third party, resulting in a loss to Spector far exceeding the initial $250,000 loans. Mermelstein argued that if Spector had merely waited until October 1962, when his $250,000 loans were to become due, he could' upon OCM’s default, have recouped the loans. Judge Lumbard found to the contrary, concluding that no matter what course Spector took the $250,000 would have been lost. Mermelstein here contends that this finding was erroneous.

The record supports Mermelstein to the extent of revealing that after making the initial loans of $250,000 Spector became more deeply involved in the OCM-RCC gambling casino venture. However, there was also evidence that this pyramiding of his risk was undertaken in an effort to salvage the investment already made and that it was done with the knowledge and approval of Mermelstein. On May 10, 1962, at Miller’s request Spector made an additional loan of $200,000 to OCM, secured by the same collateral as the earlier loans. Miller represented that $150,000 of this latest loan was needed to pay off creditors of the casino. Shortly thereafter Frederick Wageman, an accountant whom Spector had sent to Reno to work for Miller, advised Spector that the new loans were not being used to pay these creditors. OCM’s precarious financial condition was now confirmed to Spector, who was advised by Miller that Miller was not in a position to make instalment payments in repayment of the loans.

Faced with the risk that he might lose his entire investment if the venture failed Spector, after consultation with Mermelstein, agreed to a plan proposed by Ehrens and Ben Dranow for the refinancing of OCM’s outstanding mortgages in the sum of $3.8 million dollars and for continued operation of the casino with a view to selling it to a buyer at a price that would enable Spector to emerge whole. Specifically the plan called for purchase of the $3.8 million dollars in mortgages at a discount for $2.75 million dollars to be obtained by way of a loan from the Teamsters Pension Fund. OCM’s monthly mortgage payments would thus be reduced from $37,500 to about $20,000, making it possible to market the underlying property at a price that might enable Spector to recoup his investment. However, the Teamsters would not grant a mortgage to Miller as he was considered a poor credit risk. Accordingly on June 11 Spector replaced Miller as the operator of both OCM and RCC. Thereafter he persuaded the Teamsters Pension Fund to make the mortgage loan, which was finally consummated on October 15. When the Nevada Gambling Commission indicated that it would not approve his license to operate the casino unless he personally assumed its debts, Spector agreed to do so.

Despite Speetor’s participation and extension of his personal credit to keep the enterprises going, OCM and RCC continued to fare poorly. In October, when the Teamsters’ $2.75 million-dollar loan was finalized, Spector was able to pay off the existing mortgages for approximately $2.3 million dollars. Although the residue, a sum in excess of $400,000, was applied to Spector’s personal bank account, it was hardly sufficient to offset the large sums which he had by this time poured into these enterprises.

Following receipt of the Teamsters’ loan, Spector actively sought a purchaser. In December, after the Casino had gone bankrupt, the Hughes-Porter Corporation entered into an option agreement for the purchase of the property. The sale was completed in May of 1963. Hughes-Porter agreed to assume the then existing $2.75 million dollars obligation owed to the Teamsters and to pay an aggregate of $600,000 over and above the assumption of the Teamsters’ mortgage. However, the $600,000 was not to be paid to Spector in cash. Indeed Spector initially received for himself only $50,000, which was paid on December 31, 1962. Of the balance $150,000 was deposited in escrow to defray the expenses of the sale and to clear up liens on the property and $400,000 was in the form of an instalment which was later reduced to $262,500 and then applied toward reduction of .liens except for $16,000 paid to Spector, bringing the total realized by him to $66,000.

Thus the price at which the property was eventually sold, $3.3 million dollars, was $500,000 less than the total amount of the mortgages amounting to $3.8 million dollars that had been on the property at the time when Spector loaned the $250,000 which is the subject of this action. Although Spector had succeeded in purchasing these mortgages in the sum of $3.8 million dollars for $2.3 million dollars, this feat was made possible only as the result of his securing a $2.75 million-dollar loan from the Teamsters Pension Fund, which was advanced only upon the basis that a viable hotel and gambling casino would continue to be operated on the premises, hopefully at the profit projected by Spector and Ehrens. There is no evidence that if Spec-tor, after making the initial loans of $250,000, had stood by and, upon default, sought to recoup his advances through sale of the property the Teamsters or anyone else would have advanced the $2.75 million-dollar mortgage money that enabled Spector to reduce the outstanding mortgages.

In his decision dated June 30, 1972, Judge Lumbard, discrediting much of Mermelstein’s testimony, found that Mermelstein had acted negligently and had breached his fiduciary duty by failing to adequately advise Spector of such material facts as the meetings of March 4 and 11, OCM’s need for interim financing, the exhaustion of RCC income to meet mortgage payments, and the insecure nature of Spector’s security. Mermelstein’s failure to investigate such discrepancies as the amount owing and the due date of OCM’s payment to Crummer was also found wrongful. Judge Lumbard noted: “[I]f an attorney negligently or willfully withholds from his client information material to the client’s decision to pursue a given course of action, or to abstain therefrom, then the attorney is liable for the client’s losses suffered as a result of action taken without benefit of the undisclosed material facts.” This recognized basic principle is not disputed.

• With respect to Mermelstein’s contention that Spector would not have lost the $250,000 had he merely waited for the loans to default, Judge Lumbard concluded that: “Mermelstein’s breach of duty to Spector, however, embroiled Spector initially with RCC and OCM. . Indeed, from all that appears, Spector would have lost his money whichever course he chose. When he finally sold the Casino to Hughes-Porter the purchase price was $3,300,000 — after Spector had reduced the mortgages from about $3,800,000 to less than $2,750,000 and the monthly payments from $37,500 to approximately $20,000. Thus the sale price was $500,000 less than the mortgages on the property when Spector loaned the $250,000. There is no evidence to indicate that, had Spector merely waited for the casino to go bankrupt and then taken over on OCM’s default, he could have sold the property, heavily burdened with operating deficits in addition to the mortgages, at a price sufficient to recover his $250,000 or any part of it.”

Mermelstein’s Appeal

Turning to the merits of the main appeal, Mermelstein does not challenge here Judge Lumbard’s findings of negligence or breach of fiduciary duty, nor does he contend that an inappropriate legal standard was applied. Mermelstein’s argument is essentially that Spector has failed to show that his loss was in fact caused by Mermelstein’s conduct. Spec-tor caused his own loss, the argument goes, by not waiting until October of 1962, when the loans were due and then upon their default relying on the real estate as the underlying security. It is alleged that in actuality the causes of Speetor’s loss were his desire to become actively involved in the management of the hotel and casino, which led him personally to assume certain of their debts. Spector’s alleged mismanagement of the operations is said to have further contributed to his losses.

Upon this review of the trial judge’s findings as to causation in fact we are governed by the “unless clearly erroneous” standard of Rule 52(a), F.R.Civ. P. See United States v. Ebinger, 386 F.2d 557 (2d Cir. 1967); McAllister v. United States, 348 U.S. 19, 20, 75 S.Ct. 6, 99 L.Ed. 20 (1954); Mamiye Bros. v. Barber Steamship Lines, Inc., 360 F.2d 774, 777 (2d Cir.), cert. denied, 385 U.S. 835, 87 S.Ct. 80, 17 L.Ed.2d 70 (1966). “A finding is clearly erroneous when ‘although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed,’ United States v. Oregon Medical Society, 343 U.S. 326, 339, 72 S.Ct. 690, 96 L.Ed. 978; United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746.” McAllister v. United States, 348 U.S. at 20, 75 S.Ct. at 8. The essential issue is whether the conduct of the defendant was a material element or a substantial factor in bringing about the loss. See Dunham v. Village of Canisteo, 303 N.Y. 498, 506, 104 N.E.2d 872 (1952); Restatement (Second) of Torts, §§ 431 and 433 (1965); W. Prosser, Law of Torts § 41 (4th ed. 1971).

“It is not enough that the defendant, in an effort to break the chain of causation, should prove that plaintiff’s injury might have resulted from other possible causes, nor is it required of the plaintiff that- he eliminate by his proof all other possible causes.” Cornbrooks v. Terminal Barber Shops, Inc., 282 N.Y. 217, 223, 26 N.E.2d 25, 27 (1940).

Applying these principles here, Judge Lumbard’s findings as to causation in fact, far from being clearly erroneous, appear to be supported by substantial evidence.

The nub of Mermelstein’s argument is that since Hughes-Porter purchased the property for $3.3 million dollars, a sum substantially in excess of the $2.3 million-dollar discount price paid to discharge the original mortgages amounting to $3.8 million dollars, Spector could have obtained such a purchaser if he had waited for OCM to default on the original loans. However, this argument assumes that someone would, without any further commitment on Spector’s part, have secured the minimum amount of $2.3 million dollars in cash required to discharge the mortgages. Absent persuasive evidence the trial judge was not entitled to make such an assumption. Nor is there any evidence that any purchaser would have been willing to buy at any price the property burdened by the original mortgages, with rental income barely meeting mortgage payments. A cash loan to refinance the mortgages was a prerequisite for a profitable sale. The record amply supports a finding that the $2.3 million dollars would have been unavailable unless Spector agreed to manage the casino and convinced the borrower that a cash loan was a sound investment.

Thus Spector, having been led into making the $250,000 in loans without being advised of material facts and without adequate groundwork by his counsel, was placed in the position of seeing his money go down the drain unless he could salvage his investment by becoming more involved. Mermelstein, by placing his client in this precarious position, was a substantial factor in bringing about Spector’s loss and Judge Lumbard’s finding that “Spector would have lost his money whichever course he chose” is not clearly erroneous.

Mermelstein argues further that even if the finding of causation in fact was not clearly erroneous, his negligence was not the proximate cause of Spector’s loss. Mermelstein insists that in spite of any initial causal relationship between his negligence and Spector’s agreeing to make the loan, Spector’s subsequent actions constituted an independent intervening cause that should free Mermelstein of any liability. Spec-tor counters that his efforts at salvage were expectable and that he should have sued for his full loss. Be that as it may, Spector’s efforts were clearly not the kind of superseding cause that would result in a lack of “proximateness.” See ALI, Restatement of Torts 2d, §§ 440-442 (1965).

Accordingly we find no error in Judge Lumbard’s decision with respect to Mermelstein’s appeal and to the extent that his appeal seeks review of the trial judge’s denial of his motion pursuant to Rule 60(b)(2), (3), F.R.Civ.P., to vacate and set aside the judgment upon the first cause of action on grounds of alleged' newly discovered evidence and fraud, we affirm for the reasons stated by Judge Lumbard in his opinion dated December 18, 1972.

Spector’s Cross-Appeal from the Denial of Prejudgment Interest

Plaintiff’s cross-appeal from the denial of prejudgment interest gives us considerably more trouble. Judge Lumbard, apparently viewing the matter as one within his discretion, denied the award of interest because in his judgment much of the delay in bringing the case to trial was attributable to Spec-tor and because Mermelstein had not realized any profit from his wrongful conduct.

Spector argues that an award of prejudgment interest is mandatory under N.Y.C.P.L.R. § 5001 (McKinney’s Consol.Laws, c. 8, 1963) which, both parties agree, governs the right to such interest in this diversity case. See Julien J. Studley, Inc. v. Gulf Oil Corp., 425 F.2d 947 (2d Cir. 1969); Sahley v. McKee, 371 F.2d 720 (2d Cir. 1967); cf. St. Clair v. Eastern Air Lines, Inc., 302 F.2d 477, 480 (2d Cir. 1962); Spanos v. Skouras Theatres Corp., 235 F.Supp. 1 (S.D.N.Y.1964), affd., 364 F.2d 161 (2d Cir.) cert. denied, 385 U.S. 987, 87 S.Ct. 597, 17 L.Ed.2d 448 (1966). Section 5001 provides that prejudgment interest is to be awarded in the following actions:

“(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court’s discretion.” (Emphasis supplied)
“This section, a revision of § 480 of the Civil Practice Act, is New York’s latest effort to enforce the policy enunciated by Chief Judge Cardozo in Prager v. New Jersey Fid. & Plate Glass Ins. Co., 245 N.Y. 1, 5-6, 156 N.E. 76, 77, 52 A.L.R. 193 (1927), that ‘Interest must be added if we are to make the plaintiff whole.’ ” Julien J. Studley, Inc., supra, 425 F.2d at 949. Among other changes, the provision modifies prior law by making the award of preverdict interest a matter of right not only on claims for property damage intentionally inflicted but for property damage caused by negligence. The latter had often been viewed as discretionary. See 5 Weinstein-Korn-Miller, New York Civil Practice H 5001.05 (1971); Act, Recommendation and Study Relating to the Allowance of Interest in Actions in Which Compensatory Damages are Awarded for the Violation of Property Rights, Report of the Law Revision Commission for 1950, 95, 99-102. Cf. DeLong Corp. v. Morrison-Knudsen Co., 14 N.Y.2d 346, 251 N.Y.S.2d 657, 200 N.E.2d 557 (1964), where Judge Fuld noted that § 5001 was designed to eliminate distinctions which turned on the nature of the encroachment or of the property interest involved.

Thus § 5001(a) extended the mandatory award of prejudgment interest to negligent invasions of property rights. Here we have an action for money damage in which the harm was to a property interest. See Collier v. Granger, 258 F.Supp. 717 (S.D.N.Y. 1966); Hillsley v. State Bank of Albany, 24 A.D.2d 28, 263 N.Y.S.2d 578 (1965), affd. mem., 18 N.Y.2d 952, 277 N.Y.S.2d 148, 223 N.E.2d 571 (1966). The policy of the section is to faeilitate the award of interest and, although there is also a claim of breach of fiduciary duty, “the equity clause should not become a source of sterile controversy over the classification of' causes of action.” Weinstein-Korn-Miller, supra; if 5001.06 at 50-24.

In Julien J. Studley, Inc., supra, we recognized the mandatory nature of § 5001(a) in a breach of contract action. There the district court judge had denied the plaintiff real estate broker preverdict interest on the ground “that some indeterminable portion of the jury verdict may well be based upon future commissions as yet unearned,” and because “as a matter of fundamental fairness” interest should be denied because the defendant did not have use of the money. After finding inadequate support for the first contention, we said that “[i]n any event, the New York statute provides interest as a matter of right in cases of this kind.” 425 F.2d at 950. We see no reason for departing from that rule in this case of tortious interference with property rights.

Mermelstein contends that Speetor should be estopped from recovering preverdict interest since much of the delay was attributable to him and Mermelstein did not have the use of the money. These factors persuaded Judge Lumbard to deny such interest and if the matter had been within his discretion, we would accept his decision. But § 5001 is mandatory and we have been referred to no case interpreting it to permit exercise of discretion. Mermelstein’s reliance on post-judgment cases under C.P.L.R. §§ 5002 and 5003 is misplaced. See, e. g., Ariola v. Petro Trucking Corp., 50 Misc.2d 216, 270 N.Y.S.2d 309 (Sup.Ct. 1966); Feldman v. Brodsky, 12 A.D.2d 347, 211 N.Y.S.2d 56 (1961), affd. mem., 11 N.Y.2d 692, 225 N.Y.S.2d 762, 180 N.E.2d 915 (Ct.App.1962); Trimboli v. Scarpaci Funeral Home, 37 A.D.2d 386, 326 N.Y.S.2d 227 (1971), affd. mem., 30 N.Y.2d 687, 332 N.Y.S.2d 637, 283 N.E.2d 614 (Ct. of Appl.1972). In post-judgment situations the blame for delay can usually be clearly fixed, e. g., where a judgment creditor refuses tendered sums or the judgment debtor deposits such sums into court. However in prejudgment situations it would place an extremely difficult burden on the parties and on the court to allocate delay as between the plaintiff, the defendant and the court. Finally, we see no special circumstance in this case. To be sure, Mermelstein has not had use of the money but § 5001(a) is not limited to cases of this sort.

The judgment on the main appeal awarding Spector $250,000 in damages is affirmed. On the cross-appeal we reverse and remand for the assessment of prejudgment interest.

      . Judge Lumbard found that: “As security for this loan Miller had deposited with William Bradley, Crummer’s nephew and attorney, the deed and a bill of sale for the property and the casino hotel, and a cancellation of the lease between OCM and RCC. Under Nevada law, a default on the loan would have enabled Crummer forthwith to record the deed and bill of sale without foreclosure proceedings or other ado.”

      . Attending the meeting in addition to Mermelstein and Ehrens were Richard Terker, the president of Terry Industries, Joseph Patrick, Fred Schoeffer and Benjamin Dranow, who was later to become instrumental in arranging a large loan from the Teamsters to refinance OCM’s mortgages. See infra.

      . In his first cause of action, the one before us on appeal, Spector alleged that Mermelstein
      “failed to exercise reasonable care and diligence in investigating and ascertaining the reputation, the status and true financial condition of OCM and RCC, and the principals interested in said corporations, and he failed to secure effective written guarantees from the principals in interest . . . and further failed to recommend or require any means of assuring the protection for the full payment of the entire loan . . . and to request and procure the warranties and guarantees normally required by a lender in such a secured transaction; and further failed to exact from the borrower adequate customary and usual agreements to enable the plaintiff to resort immediately to the collateral security in the event of the discovery of any wrongful act or omission . . . or of any insufficiency of such security . . . and otherwise failed to exercise the skill, diligence and care required of an attorney handling a loan transaction of a lender.”
      Spector’s complaint also contained four other causes of action, which were either dismissed or abandoned. The second count alleged fraud in the OCM and RCC transactions. The third, which was later abandoned, claimed that Mermelstein’s negligence and fraudulent conduct caused a diminution of Spector’s reputation by associating him with Benjamin Dranow, an allegedly unsavory character. The fourth charged negligence and breach of fiduciary duty in connection with a different loan transaction, one involving the Rex Sierra Gold Corporation, and the fifth alleged fraud in the same transaction. Since the two fraud counts (II and V) were not pressed at trial, they were dismissed. As to the fourth cause of action, Judge Lumbard found Spector had “not established these allegations by a fair preponderance of the evidence” and therefore directed judgment for Mermelstein on the main Rex-Sierra claim.

      . Thus, except for the $66,000 realized by Spector, the great bulk of the money went to payment of lien creditors in order to remove all clouds from the title to the property.

      . Throughout this appeal we have approximated the face amount of the mortgages at $3.8 million dollars or in “excess of $3.8 million,” the figures primarily used by the parties and by Judge Lumbard. However, there is evidence in the record which indicates that as of October 15, 1962, the face amount of the original mortgages was $3,906,645. For the purposes of this appeal, this discrepancy is not significant.

      . There is language in Judge Lumbard’s opinion which arguably might be construed as placing the burden on Mermelstein to prove that he did not cause the loss of the $250,000. Upon review of the record we believe that Judge Lumbard was merely noting that the evidence sufficiently established the necessary nexus between Mermelstein’s conduct and Spector’s loss and there was not sufficient evidence, on balance, to outweigh the proof which linked Mermelstein’s wrongdoing to the loss.

      . Although the facts which gave rise to the instant suit occurred prior to September 1, 1963, the effective date of the C.P.L.R., the action was not commenced until October 1964 and thus falls within C.P.L.R. § 10003 which makes the C.P.L.R. applicable to “all actions hereafter commenced.” See Collier v. Granger, 258 F.Supp. 717 (S.D.N.Y.1966); cf. Morris v. New York Central Railroad, 20 A.D.2d 753, 247 N.Y.S.2d 293 (1964).

      . It is doubtful that even that branch of Spector’s claim which relied on a breach of a fiduciary duty would be classified for the purposes of § 5001(a) as an “action of an equitable nature.” Although fiduciary relationships have equitable underpinnings, here the nature of the relief sought was damages, and no traditional form of equitable relief was sought. Cf. Dobbs, Handbook of the Law of Remedies, § 10.4 at 684 (1973); Frey Realty Co. v. Ten West 46th Street Corp., 1 Misc.2d 371, 145 N.Y.S.24 670 (Sup.Ct.1955). But cf. Weinstein-KornMiller, supra, ¶ 5001.06 at 50-22. Tkis view is buttressed by the failure of the defendant to assert that the action should be deemed equitable and by Judge Wyatt’s denial in May 1966 of a motion for a jury trial solely on the grounds of the untimeliness of the motion.