Heartwood, Inc. v. U.S. Forest Service, Inc., 01-1869.

• Decision Date: 14 January 2003
• Docket Number: No. 01-1869.,01-1869.
• Parties: HEARTWOOD, INCORPORATED, a non-profit corporation, Regional Association of Concerned Environmentalists, a non-profit corporation, Jim Bensman, et al., Plaintiffs-Appellants, v. UNITED STATES FOREST SERVICE, Ann M. Veneman, Secretary of the United States Department of Agriculture, and Dale Bosworth, Chief of the United States Forest Service, Defendants-Appellees, Shawnee Trail Conservancy and BlueRibbon Coalition, Incorporated, Intervening Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

316 F.3d 694

HEARTWOOD, INCORPORATED, a non-profit corporation, Regional Association of Concerned Environmentalists, a non-profit corporation, Jim Bensman, et al., Plaintiffs-Appellants, v. UNITED STATES FOREST SERVICE, Ann M. Veneman, Secretary of the United States Department of Agriculture, and Dale Bosworth, Chief of the United States Forest Service, Defendants-Appellees, Shawnee Trail Conservancy and BlueRibbon Coalition, Incorporated, Intervening Defendants-Appellees.

No. 01-1869.

United States Court of Appeals, Seventh Circuit.

Argued November 28, 2001.

Decided January 14, 2003.

COPYRIGHT MATERIAL OMITTED

Matthew G. Kenna (argued), Kenna & Hickcox, Durango, CO, for Plaintiffs-Appellants.

Paul A. Turcke (argued), Moore Smith Buxton & Turcke, Boise, ID, for Defendants-Appellees Shawnee Trail Conservancy, BlueRibbon Coalition, Inc. and Dale Bosworth.

Lisa E. Jones (argued), DOJ, Environment & Natural Resources Div., Washington, DC, for Defendant-Appellee United States Forest Service, Ann M. Veneman and Phil Janik.

Before WOOD, Jr., KANNE, and ROVNER, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

Plaintiffs Heartwood and Regional Association of Concerned Environmentalists (collectively "Heartwood") are environmental organizations dedicated to the protection of public lands. Their lawsuit in this case was prompted by regulations issued by the United States Forest Service limiting the notice and appeal rights for a class of actions. The history summarized by the district court explores the genesis of this case.

Prior to 1992, the Forest Service's administrative appeal regulations linked administrative review opportunities to the documentation prepared pursuant to the National Environmental Policy Act (NEPA), and allowed for the appeal of agency decisions documented in a "decision memo," "decision notice," or a "record of decision." The Forest Service explained the distinction as follows. For actions which significantly affect the environment and for which an environmental impact statement is required under NEPA, the Forest Service documents its decision in a "record of decision." Where an environmental assessment is prepared and, based on that assessment, the Forest Service makes a finding of no significant impact on the environment, the determination is documented in a "decision notice." Finally, actions falling within a class requiring no environmental documentation under NEPA and which are "categorically excluded" under NEPA's implementing regulations are documented in a "decision memo."

In March of 1992, the Forest Service proposed the elimination of appeals for all those decisions except for appeals of forest plans, characterizing the appeals as time-consuming, procedurally onerous, confrontational and costly. In the face of significant public opposition to the proposal, Congress enacted the Appeals Reform Act of 1992 ("ARA") which required the Forest Service to establish a notice and comment process for proposed Forest Service actions "concerning projects and activities implementing land and resource management plans developed under the Forest and Rangeland Renewable Resources Planning Act of 1974" and required the Forest Service to modify the appeals procedure for such projects. The Forest Service proposed regulations to implement the ARA, which provided notice, comment and administrative appeals for all actions except "project or activity decisions documented in a Decision Memo listed in Forest Service Handbook 1909.15, section 31.2, Categories 1 through 3 and 5 through 9." Those categories included construction of trails, utility lines, approval of certain special use permits, tree regenerations, prescribed forest burning and cutting designed to improve timber stands, and certain "short-term" mining investigations which allow the building of up to one mile of roads. Prior to that proposed regulation, all projects documented in a decision memo were subject to appeal. The Forest Service ultimately finalized that regulation, and denied Heartwood's Petition for Rulemaking, which had sought the rescission and re-promulgation of the regulation as an improper implementation of the ARA.

After allowing some time during which the regulations were in operation in order to assess the impact, Heartwood filed suit in November 1999 before the statute of limitations expired. Heartwood contended that the Forest Service violated the ARA and the Administrative Procedure Act (APA) by promulgating regulations that improperly exempt many proposed Forest Service actions from notice, comment and administrative appeal. The complaint sought a declaration that the Forest Service violated the ARA and the APA and a remand of the regulations to the Forest Service for re-promulgation in accordance with the law, as well as the enjoining of all agency actions that should have provided the public with notice, comment and administrative appeal under the ARA.

In response to the suit, the Forest Service engaged in extensive settlement negotiations with Heartwood. On January 10, 2000, and thereafter on nine additional occasions at one-month intervals, the Forest Service moved to extend the time to file its answer to the complaint in order to complete those negotiations. The negotiations ultimately proved fruitful, and on September 6, 2000, the parties entered into a Consent Judgment, which the court entered on September 15, 2000. In that Consent Judgment, the Forest Service agreed to apply the notice, comment and appeal procedures to a list of projects and activities including some involving recreational uses. Some of the numerous projects and activities encompassed within the consent order and subject to notice, comment and appeal included the use of prescribed burning, the creation of wildlife openings, and the designation of certain travel routes for off-highway vehicles and the construction of new routes. At this point in time, the Shawnee Trail Conservancy and the BlueRibbon Coalition ("the Recreational Groups") filed a motion to intervene. The district court granted intervention and also granted the Recreational Groups' motion to vacate the consent judgment pursuant to Rule 59(e). In granting the Rule 59(e) motion, the district court held that the Recreational Groups were necessary parties to the action under Federal Rule of Civil Procedure 19.

Heartwood filed a notice of appeal from that decision and argues before this court that the district court erred in granting the motion to intervene as well as in vacating the consent judgment. In opposition, the Recreational Groups and the Forest Service question our appellate jurisdiction to hear this matter and defend the district court's decisions, although no party argues that the district court properly determined that the Recreational Groups were necessary parties.

We turn first to the jurisdictional issue. Heartwood acknowledges that the order vacating the consent judgment was not a final judgment and does not premise jurisdiction on that basis. Instead, Heartwood asserts that the decision was appealable pursuant to 28 U.S.C. § 1292(a)(1), which allows for the appeal of "[i]nterlocutory orders of the district court ... granting, continuing, modifying, refusing or dissolving injunctions...." The Supreme Court in Carson v. American Brands, Inc., 450 U.S. 79, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981), applied that provision to a district court order refusing to approve a consent decree. In that case, the district court refused to approve a consent decree between a tobacco producer and a class of present and former African-American seasonal employees and applicants for employment, in a lawsuit alleging that the tobacco producers had discriminated against the class members in hiring, promotion, transfer, and training opportunities. The consent decree would have required the tobacco producer to give hiring and seniority preferences to African-American employees and to fill one-third of all of the supervisory positions in the Richmond Leaf Department with qualified African-American employees. Id. at 81. The district court refused to approve that consent decree, concluding that it unlawfully granted preferential treatment on the basis of race in violation of Title VII absent a showing of present or past discrimination and that the relief must be limited to actual victims of that discrimination.

The Fourth Circuit refused to review that order on appeal, holding that it lacked subject matter jurisdiction because the order was not a final judgment and was neither a collateral order under 28 U.S.C. § 1291 nor an interlocutory order refusing an injunction under 28 U.S.C. § 1292(a)(1). The Supreme Court, however, reversed that decision, holding that the appellate court had subject matter jurisdiction over the decision refusing to approve the consent decree because that order had the practical effect of refusing an injunction. Because § 1292(a)(1) was intended to be a limited exception to the final-judgment rule, the Court in Carson held that an interlocutory order that has the practical effect of refusing an injunction is appealable under that provision if the order might have "`serious, perhaps irreparable, consequences' and ... can be `effectually challenged' only by immediate appeal." Id. at 84, quoting Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 99 L.Ed. 233 (1955). In Donovan v. Robbins, 752 F.2d 1170, 1174 (7th Cir.1985), we summarized the holding of Carson:

Carson, we conclude, requires that irreparable harm be shown whenever a party wants to appeal immediately either an interlocutory order deferring the entry of a permanent injunction, whether free-standing or contained in a proposed consent decree, or an interlocutory order that while not explicitly the grant or denial of a preliminary injunction may have consequences (summed up in the words "irreparable harm") similar to those of such an order See also 16 Wright & Miller, FEDERAL...