Foundation on Economic Trends v. Heckler

A federal agency responsible for deciding whether to approve a proposed experiment was obligated to abide by the National Environmental Policy Act (NEPA). Pursuant to NEPA, the agency was required to prepare an environmental assessment of the experiment. Although an environmental assessment was intended to be a concise document, NEPA provided that the agency must examine the possible environmental consequences of the experiment in its assessment. If, after examining these consequences, the agency determined that the experiment would not have a significant impact on the environment, NEPA permitted the agency to approve the experiment. However, if the agency determined that the experiment would have a significant impact on the environment, NEPA required the agency to prepare a detailed report (known as an environmental-impact statement) evaluating the impact. The National Institutes of Health (NIH) (defendant) was a federal agency tasked with deciding whether to approve proposed experiments pertaining to genetic engineering. Hence, the University of California sought approval from NIH for a proposed experiment (the U.C. experiment) that involved the deliberate release of genetically engineered organisms into the open environment. NIH approved the U.C. experiment, finding that it would not have a significant impact on the environment. Yet, NIH’s environmental assessment failed to examine the possible environmental consequences of the U.C. experiment. Subsequently, the Foundation on Economic Trends (FOET) (plaintiff) brought suit, contending that NIH’s approval of the U.C. experiment was improper because its environmental assessment did not comply with NEPA requirements. The district court ruled in favor of FOET. NIH appealed.