Dine Citizens Against Ruining Our Env't v. Bureau of Indian Affairs

• Decision Date: 29 July 2019
• Docket Number: No. 17-17320,17-17320
• Citation: 932 F.3d 843
• Parties: DINE CITIZENS AGAINST RUINING OUR ENVIRONMENT; San Juan Citizens Alliance; Amigos Bravos; Sierra Club; Center for Biological Diversity, Plaintiffs-Appellants, v. BUREAU OF INDIAN AFFAIRS; United States Department of Interior; United States Office of Surface Mining Reclamation and Enforcement; United States Bureau of Land Management; David Bernhardt, in his official capacity as Secretary of the U.S. Department of Interior; United States Fish and Wildlife Service, Defendants-Appellees, Arizona Public Service Company; Navajo Transitional Energy Company LLC, Intervenor-Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

932 F.3d 843

DINE CITIZENS AGAINST RUINING OUR ENVIRONMENT; San Juan Citizens Alliance; Amigos Bravos; Sierra Club; Center for Biological Diversity, Plaintiffs-Appellants,

v. BUREAU OF INDIAN AFFAIRS; United States Department of Interior; United States Office of Surface Mining Reclamation and Enforcement; United States Bureau of Land Management; David Bernhardt,^* in his official capacity as Secretary of the U.S. Department of Interior; United States Fish and Wildlife Service, Defendants-Appellees,Arizona Public Service Company; Navajo Transitional Energy Company LLC, Intervenor-Defendants-Appellees.

No. 17-17320

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 7, 2019 Phoenix, Arizona

Filed July 29, 2019

Shiloh Silvan Hernandez (argued) and Matt Kenna, Western Environmental Law Center, Helena, Montana; Michael Saul, Center for Biological Diversity, Denver, Colorado; John Barth, Hygiene, Colorado; for Plaintiffs-Appellants.

Aukjen T. Ingraham (argued), Sara Kobak, Brien J. Flanagan, and Sarah Roubidoux Lawson, Schwabe, Williamson & Wyatt P.C., Portland, Oregon, for Intervenor-Defendant-Appellee Navajo Transitional Energy Company, LLC.

Stacey L. VanBelleghem (argued), Claudia M. O'Brien, Roman Martinez, and Devin M. O'Connor, Latham & Watkins LLP, Washington, D.C., for Intervenor-Defendant-Appellee Arizona Public Service Company.

Rachel Heron (argued) and Andrew C. Mergen, Attorneys; Eric Grant, Deputy Assistant Attorney General; Jeffrey H. Wood, Acting Assistant Attorney General; United States Department of Justice, Washington, D.C.; for Amicus Curiae United States.

Ethel B. Branch, Attorney General; Paul Spruhan, Assistant Attorney General; Navajo Nation Department of Justice, Window Rock, Arizona; for Amicus Curiae Navajo Nation.

Before: Sandra S. Ikuta and Michelle T. Friedland, Circuit Judges, and Frederic Block,^** District Judge.

FRIEDLAND, Circuit Judge:

A coalition of tribal, regional, and national conservation organizations ("Plaintiffs") sued the U.S. Department of the Interior, its Secretary, and several bureaus within the agency, challenging a variety of agency actions that reauthorized coal mining activities on land reserved to the Navajo Nation. Plaintiffs alleged that these actions violated the Endangered Species Act ("ESA"), 16 U.S.C. § 1531 et seq. , and the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq. The Navajo Transitional Energy Company ("NTEC"), a corporation wholly owned by the Navajo Nation that owns the mine in question, intervened in the action for the limited purpose of moving to dismiss under Federal Rules of Civil Procedure 19 and 12(b)(7). NTEC argued that it was a required party but that it could not be joined due to tribal sovereign immunity, and that the lawsuit could not proceed without it. The district court agreed with NTEC and dismissed the action.¹ We affirm.

I.

A.

The Navajo Mine ("Mine") is a 33,000-acre strip mine. It produces coal from which the Four Corners Power Plant ("Power Plant") generates electricity. The Mine and Power Plant are both on tribal land of the Navajo Nation within New Mexico. The Mine operates pursuant to a surface mining permit issued by the Department of the Interior's Office of Surface Mining Reclamation and Enforcement ("OSMRE") under the Surface Mining Control and Reclamation Act of 1977, 30 U.S.C. § 1201 et seq . Transmission lines that distribute electricity from the Power Plant run west into Arizona through lands reserved to the Navajo Nation and Hopi Tribe. The Mine, Power Plant, and transmission lines were built in tandem and have operated since the early 1960s.

The Navajo Nation is a federally recognized Indian tribe with its seat of government in Arizona and territory spanning areas of Arizona, Utah, and New Mexico. For many years, the Navajo Nation granted a coal mining lease to BHP Billiton Navajo Coal Company ("BHP Billiton"), a private company that owned and operated the Mine. In 2013, the Navajo Nation Council created the Navajo Transitional Energy Company (again, "NTEC") for the purpose of purchasing the Mine from BHP Billiton.

The Power Plant is owned by several utility companies, including Public Service Company of New Mexico, Tucson Electric Company, Salt River Project, and Intervenor-Defendant Arizona Public Service Company ("APS"). APS operates the Power Plant on behalf of all co-owners subject to a lease agreement, originally executed in 1960, with the Navajo Nation. Under the agreement, the Mine sells coal exclusively to the Power Plant, and the Power Plant buys its coal exclusively from the Mine. The Navajo Nation also authorizes easements for rights-of-way over Navajo lands for the Power Plant, and both the Navajo Nation and Hopi Tribe authorize easements for rights-of-way for power transmission lines that cross tribal lands.

The Mine and the Power Plant are key sources of revenue for the Navajo Nation. Under the federally approved leases and permits that are at issue in this case, operations at the Mine and the Power Plant are expected to generate between 40 and 60 million dollars per year in revenue for the Navajo Nation.

B.

This lawsuit stems from changes and renewals to the lease agreements, rights-of-way, and government-issued permits under which the Mine and Power Plant operate.

In 2011, APS and the Navajo Nation amended the lease governing Power Plant operations, including by extending the term of the lease through 2041. BHP Billiton (which at the time still owned the Mine) then sought a renewal of the existing surface mining permit for the Mine and a new surface mining permit that would allow operations to move to an additional area within the Mine lease area.²

The lease amendment and accompanying rights-of-way could not go into effect, and the surface mining permits could not be granted, without approvals from several bureaus within the Department of the Interior. First, OSMRE needed to approve the surface mining permits. Second, approval by the Bureau of Indian Affairs ("BIA") was required to effectuate the lease amendment. Third, BIA had ultimate responsibility to grant the associated rights-of-way for the Power Plant facilities and transmission lines that the tribes had approved. Finally, approval of the Bureau of Land Management ("BLM") was required to ensure adequate resource recovery and protection on the tribal lands.

OSMRE took the lead on considering the approval requests for the Mine. It cooperated with BIA and BLM, as well as with two additional bureaus within the Department of the Interior: the National Park Service and the Fish and Wildlife Service ("Fish and Wildlife"). OSMRE also coordinated with the U.S. Army Corps of Engineers, the U.S. Environmental Protection Agency, the Navajo Nation, and the Hopi Tribe on the review process.

OSMRE engaged in formal consultation with Fish and Wildlife, as required by the ESA when a project "may affect listed species or critical habitat." 50 C.F.R. § 402.14(a). In April 2015, Fish and Wildlife completed formal consultation and issued a Biological Opinion concluding that the proposed action would not jeopardize the continued existence of any of the threatened and endangered species evaluated. Relying on Fish and Wildlife's assessments in the Biological Opinion, OSMRE produced an Environmental Impact Statement ("EIS") in May 2015.

OSMRE and BIA issued a Record of Decision in July 2015, which included the approvals by OSMRE, BIA, and BLM necessary for the continued operation and expansion of the Mine. The Deputy Secretary of the Interior approved the decisions of each of these bureaus within the Department of the Interior.

Since obtaining the required permits and approvals, APS and NTEC have made significant financial investments in the Power Plant and Mine, including by implementing conservation measures required by the Record of Decision. NTEC also moved mining operations into the areas designated in the new surface mining permit.³ Additionally, NTEC secured a new $ 115 million line of credit in July 2016 that paid off the original note with which NTEC had purchased the Mine, and that provided additional capital. This line of credit is secured by, among other things, the Mine itself as an asset of NTEC.

C.

In April 2016, the plaintiff conservation organizations sued BIA, OSMRE, BLM, Fish and Wildlife, and the Department of the Interior, along with its Secretary (collectively, "Federal Defendants"). Plaintiffs challenged the opinions and approvals that authorized continued operations at the Mine and the Power Plant. Specifically, Plaintiffs alleged that Fish and Wildlife's Biological Opinion violated the requirements of the ESA, and that BIA, OSMRE, and BLM violated the ESA by relying on the faulty Biological Opinion in deciding to approve the activities at issue. Plaintiffs also alleged that Federal Defendants violated NEPA by crafting an unlawfully narrow statement of purpose and need for the project in the EIS, failing to consider reasonable alternatives, and failing to take the requisite "hard look" at various impacts of the mining complex. See Marsh v. Or. Nat. Res. Council , 490 U.S. 360, 374, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989) ("NEPA ... require[s] that agencies take a ‘hard look’ at the environmental effects of their planned action.").

Plaintiffs sought: (1) declarations that Federal Defendants violated NEPA and the ESA; (2) orders setting aside Fish and Wildlife's Biological Opinion and Federal Defendants' Record of Decision and EIS and remanding the matter to the agencies for further analysis; (3) prospective injunctive relief prohibiting Fish and Wildlife from authorizing any adverse modification to critical habitat for, or take of, two types of fish; and (4) prospective injunctive relief prohibiting Federal Defendants from authorizing any element of the mining operations pending compliance with NEPA.

After Federal Defendants answered, APS filed a motion to intervene, which the district court granted. NTEC also sought...