A federal judge has invalidated a Forest Service decision to approve a land exchange based on his finding that the agency failed to properly evaluate the impact of the future development of the parcel to be exchanged. The court held that, because the intended development could be subject to federal control by imposing easements on the parcel, the development by a private party fell under the term “major federal action” and its impacts should be assessed and mitigated if possible. As the court noted, a “major federal action” includes an action which is “potentially subject to federal control or responsibility.” The Forest Service, however, had taken the position that the development was not a federal action because the agency had no authority to approve or deny any development once the parcel was turned over to the private party.
The court focused on regulations which required the Forest Service to “reserve such rights or retain such interests as are needed to protect the public interest” when it was exchanging land with a private party. In the case, the Forest Service did not consider imposing any limitations or restrictions on the property as a condition to it being conveyed. The court held that the agency had “abdicated its duty” to protect the public interest by not considering any restrictions on the development of the private parcel. The Forest Service has appealed the decision.