California v. Bernhardt

• Decision Date: 15 July 2020
• Docket Number: Case No. 4:18-cv-05712-YGR
• Citation: 472 F.Supp.3d 573
• Court: U.S. District Court — Northern District of California
• Parties: State of CALIFORNIA, et al., Plaintiffs, v. David BERNHARDT, et al., Defendants. Sierra Club, et al., Plaintiffs, v. David Bernhardt, et al., Defendants.

472 F.Supp.3d 573

State of CALIFORNIA, et al., Plaintiffs,

v.David BERNHARDT, et al., Defendants.

Sierra Club, et al., Plaintiffs,

v.David Bernhardt, et al., Defendants.

Case No. 4:18-cv-05712-YGR

United States District Court, N.D. California.

Signed July 15, 2020

George Matthew Torgun, Office of the Attorney General, Shannon Emily Clark, California Department of Justice Environment Section, Oakland, CA, for Plaintiffs California Air Resources Board, State of California.

William G. Grantham, Pro Hac Vice, NM Attorney General's Office, Albuquerque, NM, for Plaintiff State of New Mexico.

Stacey P. Geis, Earthjustice, San Francisco, CA, Joel Minor, Pro Hac Vice, Robin L. Cooley, Pro Hac Vice, Rumela Roy, Earthjustice, Denver, CO, for Plaintiffs Sierra Club, The Wilderness Society, Fort Berthold Protectors of Water and Earth Rights, Western Organization of Resource Councils.

Melissa Anne Hornbein, Pro Hac Vice, Laura H. King, Pro Hac Vice, Western Environmental Law Center, Helena, MT, Stacey P. Geis, Earthjustice, San Francisco, CA, Erik Schlenker-Goodrich, Pro Hac Vice, Western Environmental Law Center, Taos, NM, for Plaintiffs Los Padres Forestwatch, Center for Biological Diversity, Earthworks, Citizens for a Healthy Community, Dine Citizens Against Ruining Our Environment, Montana Environmental Information Center, San Juan Citizens Alliance, Wilderness Workshop, WildEarth Guardians, Wyoming Outdoor Council.

Stacey P. Geis, Earthjustice, San Francisco, CA, Peter Michel Zalzal, Pro Hac Vice, Rosalie Giselle Winn, Environmental Defense Fund, Boulder, CO, Toms E. Carbonell, Pro Hac Vice, Environmental Defense Fund, Susannah LandesFoster Weaver, Washington, DC, for Plaintiff Environmental Defense Fund.

Stacey P. Geis, Earthjustice, San Francisco, CA, David Daniel Doniger, Melissa Joy Lynch, NRDC, Washington, DC, for Plaintiff Natural Resources Defense Council.

Melissa Anne Hornbein, Pro Hac Vice, Laura H. King, Pro Hac Vice, Western Environmental Law Center, Helena, MT, Stacey P. Geis, Earthjustice, San Francisco, CA, Ann Brewster Weeks, Pro Hac Vice, Darin T. Schroeder, Clean Air Task Force, Boston, MA, Erik Schlenker-Goodrich, Pro Hac Vice, Western Environmental Law Center, Taos, NM, for Plaintiff National Wildlife Federation.

Stacey P. Geis, Earthjustice, San Francisco, CA, Rachel Leigh Granneman, Pro Hac Vice, Environmental Law and Policy Center, Chicago, IL, Scott Ray Strand, Pro Hac Vice, Attorney at Law, St. Paul, MN, for Plaintiff Environmental Law and Policy Center.

Clare Marie Boronow, U.S. Department of Justice, Denver, CO, Carter Fleeth Thurman, U.S. Department of Justice, Marissa Ann Piropato, Natural Resources Section, Washington, DC, for Defendants.

ORDER: (1) GRANTING PLAINTIFFS’ MOTIONS FOR SUMMARY JUDGMENT ; AND (2) DENYING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

Re: Dkt. Nos. 108, 109, 123, 125, 126, 127

Yvonne Gonzalez Rogers, United States District JudgeThe Court attaches hereto the Order regarding the parties’ motions for summary judgment.

This Order terminates Docket Numbers 108, 109, 123, 125, 126, and 127.

IT IS SO ORDERED .

It is a cornerstone of our modern Constitutional republic that agencies created through the legislative process and administered through the executive branch can, through the rulemaking process, administer statutes and promulgate regulations within their statutory mandate.The Administrative Procedure Act("APA") imposes limits on these agencies’ actions, prohibiting actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."Agencies are required to provide the public with a meaningful opportunity to participate in the rulemaking process.These constraints are subject to oversight by the judicial branch to safeguard the integrity of the same.It is not the judiciary's place to question substantive policy decisions.Yet, the judiciary must ensure that the agency acts rationally, and permits the public to otherwise engage meaningfully.Where an agency fails to adhere to these edicts, a court must fulfill its duties in striking the defectively promulgated rule.

This litigation stems from the Bureau of Land Management's ("BLM") rulemaking process with respect to a 2018 rule(the "Rescission") that rescinds an earlier 2016 rule(the "Waste Prevention Rule" or the "2016 Rule").Six cross motions for summary judgment are pending.Plaintiffs, the states of California and New Mexico filed one, and certain "Citizen Groups"¹ filed another.Defendants and intervenor-defendants filed the remaining four, those of the "Federal Defendants" which includes the Department of the Interior("DOI") and BLM² ; the state of Wyoming; and two industry groups.³

BLM's efforts to enact, then to modify, suspend, and ultimately repeal the 2016 Rule have been the subject of numerous lawsuits.This suit only focuses on the adequacy of the Rescission, and not the 2016 Rule.In this regard, and in summary, the Court finds that the rulemaking process resulting in the Rescission was wholly inadequate.In its haste, BLM ignored its statutory mandate under the Mineral Leasing Act, repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations.

The Court details herein the myriad inadequacies upon which the Rescission is based.First, the Court provides the factual and procedural background and the legal framework for its decision.(Sections I and II.)In Section III, the Court analyzes the statutory mandate of the Mineral Leasing Act and BLM's attempt to narrow the same by employing a new economic definition of "waste" which the Court finds to have been arbitrary.Section IV then explains how BLM's actions in the rulemaking process failed to comply with the Administrative Procedures Act.Section V focuses on BLM's failure to comply with the National Environmental Policy Act ("NEPA").Finally, in Section VI, the Court explains how, given the circumstances, no reason exists to depart from the standard remedy of vacatur.

I.BACKGROUND

A.STATUTORY FRAMEWORK

The Mineral Leasing Act of 1920 (the "MLA"), 30 U.S.C. § 181 et seq. , instructs BLM to require oil and gas lessees to observe "such rules ... for the prevention of undue waste as may be prescribed by [the] Secretary," to protect "the interests of the United States," and to safeguard "the public welfare."Id.§ 187(emphasis supplied).The MLA specifically requires that "[a]ll leases of lands containing oil or gas ... shall be subject to the condition that the lessee will ... use all reasonable precautions to prevent waste of oil or gas developed in the land[.]"Id.§ 225.

Pursuant to the Indian Mineral Leasing Act of 1938, 25 U.S.C. §§ 396a – 396g, and the Indian Mineral Development Act of 1982, 25 U.S.C. §§ 2101 – 08, BLM has authority to regulate oil and gas development on 56 million acres of Indian mineral estate held in trust by the federal government.See, e.g. , 25 U.S.C. § 396d(oil and gas operations on Indian lands subject "to the rules and regulations promulgated by the Secretary").

Further, BLM has authority to regulate royalty payments pursuant to the Federal Oil and Gas Royalty Management Act of 1982 ("FOGRMA"), 30 U.S.C. § 1701 et seq.In FOGRMA, Congress reiterated its concern about the waste of public resources by providing that: "Any lessee is liable for royalty payments on oil or gas lost or wasted from a lease site when such loss or waste is due to negligence on the part of the operator of the lease, or due to the failure to comply with any rule or regulation, order or citation issued under this chapter or any mineral leasing law."Id.§ 1756.

B.FACTUAL AND PROCEDURAL BACKGROUND

BLM oversees more than 245 million acres of land and 700 million subsurface acres of federal mineral estate primarily located in twelve Western States, including Alaska, on which reside nearly 100,000 producing onshore oil and gas wells.Waste Prevention, Production Subject to Royalties, and Resource Conservation;Rescission or Revision of Certain Requirement, 83 Fed. Reg. 49,184(Sept. 28, 2018)(AR 1).Notably, 44% of federal oil production and 24% of federal gas production emanate from plaintiff New Mexico whereas leases responsible for 22% of federal oil production and 44% of federal gas production are based in intervenor-defendant Wyoming.(AR 19 ( 83 Fed. Reg. 49,202 ), 341-42.)Ten to fifteen percent of the production is on Indian lands.(AR 101.)By way of context, this onshore production nationally only accounts for 9 percent of natural gas production, 5 percent natural gas liquids production and 5 percent of oil production.83 Fed. Reg. 49,184 -85(AR 1-2).

Between 2009 and 2015, nearly 100,000 oil and gas wells on federal land released approximately 462 billion cubic feet ("Bcf") of natural gas through venting and flaring, enough gas to serve about 6.2 million households for a year.Waste Prevention, Production, Subject to Royalties and Resource Conservation, 81 Fed. Reg. 83,009(Nov. 18, 2016)(AR 910).In 2014 alone, operators vented about 30 Bcf and flared at least 81 Bcf of natural gas, approximately 4.1 percent of the total production from BLM-administered leases or enough natural gas to supply 1.5 million households for a year.Id. at 83,010(AR 911).Venting, flaring, and leaks of natural gas can release volatile organic compounds ("VOCs"), including benzene and other hazardous air pollutants, as well as nitrogen oxides and particulate matter, which can cause and worsen respiratory and heart problems.Id. at 83,014(AR 915).In addition, the primary component of natural gas—methane—is an especially potent greenhouse gas, which contributes to climate change at a rate much higher than carbon dioxide.Id. at 83,009(AR 910).

During oil and gas production, "it is not uncommon for gas to reach the surface that cannot be feasibly captured, used, or sold."83 Fed. Reg....