CHAPTER 13 2005 NEPA LITIGATION UPDATE
| Jurisdiction | United States |
(Feb 2006)
2005 NEPA LITIGATION UPDATE
Holland & Hart LLP
Denver, Colorado
Jenifer E. Scoggin
Holland & Hart LLP
Cheyenne, Wyoming
JOHN F. SHEPHERD
John F. Shepherd is a Partner in the Denver office of Holland & Hart LLP. He specializes in natural resources and environmental litigation. Mr. Shepherd has served as lead counsel in cases in Colorado, Wyoming, Oklahoma, and the District of Columbia, and before the U.S. Department of the Interior, U.S. Forest Service, and U.S. E.P.A. He has also testified before Congress. He served as Chair of Holland & Hart's Natural Resources Department from 1994-97. His 25 years of experience include successfully handling a broad array of cases including class action royalty lawsuits, federal qui tam claims, claims relating to the sale of oil and gas properties, claims for nondevelopment of oil and gas leases, defending attempts to enjoin oil and gas and mining projects, claims brought under gas purchase contracts, claims brought under joint operating agreements, including claims for gas balancing. Mr. Shepherd also regularly advises companies on federal, state and private royalty compliance, and on NEPA and related environmental permitting compliance for operations on public lands.
Professional affiliations: Natural Resources Distinguished Practitioner-in-Residence, Univ. of Denver College of Law (1998); listed in The Best Lawyers in America (Natural Resources Law); Trustee, Rocky Mountain Mineral Law Foundation 1993-95; Member, Council of the ABA's Section of Natural Resources, Energy, and Environmental Law 1993-96; Chair of Public Lands Committee 1991-93.
Publications and speaking engagements: Special Royalty Litigation Issues: Fraud, Fiduciary Relationships and Punitive Damages, Rocky Mtn. Min. L. Fdn. Special Institute on Private Oil and Gas Royalties (2003); Recent Developments in Oil and Gas Class Action Litigation, The Center for American and International Law, 53rd Annual Institute on Oil and Gas Law (2002); The NEPA Litigation Guide, ABA Section of Natural Resources, Energy, and Environmental Law (1999) (author of Chapter 2).
Education: University of Denver College of Law (J.D. 1979), Order of St. Ives; Dartmouth College (A.B. 1976, magna cum laude).
I. Litigation Overview for 2005.
A. Court Cases.
1. 10th Circuit.
a. The Silverton Snowmobile Club v. United States Forest Service, 2006 WL 62849 (10th Cir. Jan. 12, 2006).
Snowmobile groups challenged a decision by the Forest Service and BLM that reduced motorized access in the winter to an area north of Durango, Colorado called Molas Pass. Increased winter use of the area by both motorized and nonmotorized groups had led to conflicts between the two groups. This prompted the agencies to evaluate whether changes were necessary in the rules for winter recreational use of the area. After much public involvement, the Forest Service and BLM issued an EA and FONSI. In their decision, the agencies adopted a blend of alternatives that allowed motorized activity on most of the acreage previously open for that use, limited trail grooming activities, and prohibited nighttime motorized operations. Id. at 3.
The motorized recreation groups challenged the EA and FONSI claiming a violation of NEPA. The groups contended that the outcome was predetermined, that the agencies failed to take the requisite "hard look" at potential environmental impacts, and that the agencies should have prepared an EIS. Id. at 5. The Tenth Circuit upheld the EA and FONSI.
The court observed that the agencies were faced with a difficult task of trying to accommodate different groups of users who were reluctant to give up what they had become accustomed to using, and that the record showed the agencies reached a compromise, not a pre-determined decision. Id. at 5. The court found that the agencies took the required hard look at environmental impacts. (The record showed that a transplanted lynx was known to occupy an area ten miles from the Molas Pass area, thus the court could not say that the agencies' determination to treat at least part of the area as lynx habitat did not have a rational basis. Id. at 7.) And the court held that plaintiffs had waived their argument that an EIS was required because they failed to raise it in the administrative proceedings. Id. at 10.
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b. Utah Env't Congress v. Bosworth, 421 F.3d 1105 (10th Cir. 2005).
The Tenth Circuit held that the Forest Service examined a reasonable range of alternatives and did not act arbitrarily under NEPA when it only considered a "no-action" alternative and a modified proposed action for a timber harvesting project. The project was designed to "improve or maintain habitat conditions to promote long-term ecosystem health for the benefit of people, wildlife, and fish." Id. at 1117. The primary objective was to reduce densities of aspen and spruce stands, while maintaining a forested appearance. A secondary objective was to supply local resource-dependent enterprises with raw materials in an economically feasible manner. Id. at 1118.
The plaintiffs argued that the Forest Service violated NEPA by defining the project's objectives so narrowly that the only possible alternatives were the proposed project or the "no action" alternative. The Forest Service argued that a non-commercial alternative would achieve neither project objective. Id. The court held that, given the project's dual objectives and the agency's discretion to decide those objectives, the Forest Service examined a reasonable range of alternatives. Id.
c. Fuel Safe Washington v. FERC, 389 F.3d 1313 (10th Cir. 2004).
This case involved a challenge to the adequacy of FERC's EIS for a natural gas pipeline project. The proposed pipeline would carry gas to be used for power generation from the Canadian border near Sumas, Washington, overland, then underwater across the Strait of Georgia to a subsea interconnection mid-channel in the Boundary Pass at the international border between the U.S. and Canada. Petitioners claimed the EIS was deficient because it failed to address reasonable alternatives, transboundary impacts, cumulative acoustic impacts, and the impacts of reasonably foreseeable earthquakes.
The petitioners complained that FERC narrowly defined the project's scope so as to compel FERC to ignore other ways to meet Vancouver Island's electrical power needs. Id. at 1324. The court disagreed. FERC had before it a particular proposal by a private natural gas company and was therefore not obligated to reject that project in favor of a non-natural gas alternative that was purely hypothetical and speculative. Id. Where the action subject to NEPA review is triggered by a proposal or application from a private party, it is appropriate for the agency to give substantial weight to the goals and objective of the private party. Id.
The court further held that, although FERC disagreed with the EPA's and the Washington State Department of Ecology's comments regarding reasonable routes and system alternatives, FERC considered and responded to their comments. Id. at 1326-27. Thus, FERC took the requisite "hard look" at the potential environmental impacts and adequately considered the alternatives. Id. at 1327. The court also found that FERC
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considered the cumulative acoustic effects and the impacts of reasonably foreseeable earthquakes.
2. Ninth Circuit.
a. Ashley Creek Phosphate Co. v. Norton, 420 F.3d 934 (9th Cir. 2005).
Ashley Creek, a company holding phosphate reserves 250 miles from a proposed phosphate mining project, brought suit under NEPA alleging that the BLM failed to consider alternative sources of phosphate for a fertilizer plant in preparing an EIS for the mining project. (Ashley Creek wanted its phosphate reserves to be used to supply the plant; the EIS did not include the mining of Ashley's reserves as an alternative.) The Ninth Circuit held that Ashley Creek failed to satisfy the "injury in fact" component of Article III standing, and that it failed to meet the "zone of interests" test, a prudential standing requirement. Id. at 939.
In light of the purpose of Section 102(2)(C) of NEPA -- the protection of the environment -- the court held that a purely economic injury that is not intertwined with an environmental interest does not fall within NEPA's zone of interest. Id. at 945. Thus, Ashley Creek lacked prudential standing to bring suit under NEPA, as its purely financial interests were not within the "zone of interests" protected by NEPA. In its opinion, the court disagreed with the Eighth Circuit's analysis of whether economic interests can satisfy the zone of interests test under NEPA. See Friends of the Boundary Waters Wilderness v. Dombeck, 164 F.3d 1115 (8th Cir. 1999).
b. Ranchers Cattlemen Action Legal Fund v. United States Dept of Agriculture, 415 F.3d 1078 (9th Cir. 2005).
An association of American cattle producers sued the USDA seeking a preliminary injunction barring implementation of a final rule allowing resumption of importation of Canadian beef and cattle following a ban caused by concern over the spread of "mad cow disease." In its complaint, R-CALF described itself as a non-profit cattle association representing U.S. "cattle producers, cattle backgrounders, and independent feedlot owners" on issues concerning international trade and marketing. Id. at 1090 n.12. R-CALF alleged that the USDA's rulemaking violated NEPA because the USDA failed to make its EA available for public review and comment before the final rule was published, and by failing to prepare an EIS.
The Ninth Circuit held that the injuries alleged in R-CALF's complaint did not fall within NEPA's "zone of interests." Id. at 1103. NEPA's purpose is to protect the environment and R-CALF's claimed interest had no connection to the physical environment. Id. Additionally, the court found that...
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