Ensco Offshore Co. v. Salazar

• Decision Date: 17 February 2011
• Docket Number: Civil Action No. 10–1941.
• Citation: 73 ERC 1439,781 F.Supp.2d 332
• Parties: ENSCO OFFSHORE CO., et alv.Kenneth Lee “Ken” SALAZAR, et al.
• Court: U.S. District Court — Eastern District of Louisiana

781 F.Supp.2d 332

73 ERC 1439

ENSCO OFFSHORE CO., et al

v.Kenneth Lee “Ken” SALAZAR, et al.

Civil Action No. 10–1941.

United States District Court, E.D. Louisiana.

Feb. 17, 2011.

Adam Peter Feinberg, Emmett B. Lewis, Homer E. Moyer, Jr., Timothy P. O'Toole, Miller & Chevalier Chartered, Washington, DC, George J. Fowler, III, Lawrence Raymond DeMarcay, III, Fowler Rodriguez, New Orleans, LA for Ensco Offshore Co., et al.Adam Peter Feinberg, Emmett B. Lewis, Homer E. Moyer, Jr., Timothy P. O'Toole, Miller & Chevalier Chartered, Washington, DC, George J. Fowler, III, Lawrence Raymond DeMarcay, III, Fowler Rodriguez, New Orleans, LA, Brit T. Brown, Benjamin A. Escobar, Jr., Joseph S. Cohen, Beirne, Maynard & Parsons, LLP, Houston, TX, for ATP Oil & Gas Corporation.Guillermo A. Montero, Brian M. Collins, Kristofor R. Swanson, U.S. Department of Justice, Washington, DC, Peter M. Mansfield, U.S. Attorney's Office, New Orleans, LA, Henry T. Dart, Attorneys at Law, Covington, LA, for Kenneth Lee “Ken” Salazar, et al.

ORDER & REASONS

MARTIN L.C. FELDMAN, District Judge.

Before the Court is plaintiff's pending motion for preliminary injunction, which, after oral argument, the Court denied without prejudice on January 13, 2011, 2010 WL 4116892, and ordered supplemental briefing. The Court now RESCINDS and VACATES its previous Order ¹ and GRANTS the plaintiff's motion.

Background

After Deepwater Horizon's explosion and the catastrophic oil spill that followed, the Secretary of Interior twice in succession imposed a blanket moratorium on deepwater drilling in the Gulf of Mexico. For the five months that the bans were in place, no permits were issued for deepwater drilling. But, even after the Secretary formally lifted the second moratorium on October 12, 2010, permits for deepwater drilling activities have not been processed; little to no deepwater drilling has resumed.²

In the past ten months, the Department of Interior and the Bureau of Ocean Exploration Management, Regulation, and Enforcement (BOEMRE) have been centrally involved in plugging the culprit well and clearing the Gulf of millions of gallons of renegade oil. The government, as a result of the spill, adopted new regulations covering drilling in the Gulf of Mexico. Operators seeking permits to drill must comply with some of these new regulations before their permit applications may be processed. Beyond these new regulations, permit applications are also subject to the requirements of the National Environmental Policy Act. Plaintiff charges the government's continuous delays are intentional. The government responds that its strained resources and the demands of regulatory compliance necessarily produce the delays at issue.

Seeking action (any action) from the government, Ensco sought a preliminary injunction on five specific permit applications in which the company holds a contractual stake: Cobalt's application for a permit to drill on GC 814 using ENSCO 8503, filed April 30, 2010; Cobalt's revised application for a permit to drill on GB 959 using ENSCO 8503, filed October 21, 2010; Nexen's application to drill filed July 27, 2010; and two other applications filed by Nexen on October 12, 2010. The government contends that four of these permits are not technically pending before it because they were returned to the applicants with instructions to correct certain deficiencies. But Cobalt attests that it has not received any indication from the government about inadequacies in its permit applications and that BOEMRE merely contacted Cobalt to inform it that its application would move to the end of the queue because of Ensco's sublease of a relevant rig to an operator in French Guiana.

It is undisputed that before the Deepwater Horizon disaster, permits were processed, on average, in two weeks' time. In stark contrast, the five permits at issue have been pending from four to some nine months.³ It is also undisputed that these delays have put off indefinitely drilling in the Gulf of Mexico. Ensco has incurred significantly reduced standby rates on its rigs and has been forced to move some of its rigs to other locations around the world. It is unclear when Gulf drilling will resume. The government's assurances have been inconsistent.

At the outset, the Court denied the plaintiff's motion for a preliminary injunction because the Court had questions about whether it has the judicial review authority to impose a time frame for agency decision and, if so, what a reasonable time frame would be to mandate government action, whether it be denial or approval of permit applications. The parties' supplemental briefing has resolved the Court's questions; the Court now RESCINDS and VACATES its Order denying without prejudice a preliminary injunction and GRANTS the plaintiff's motion for a preliminary injunction as to Count IV, subject to the confines of this Order.

Law & Analysis

I.

The Court is sensitive to the unequaled remedy of the preliminary injunction. The “preliminary injunction is an extraordinary remedy that should not be granted unless the party seeking it has ‘clearly carried the burden of persuasion.’ ” Bluefield Water Ass'n v. City of Starkville, Miss., 577 F.3d 250, 253 (5th Cir.2009) (quoting Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 196 (5th Cir.2003)); see also PCI Transport., Inc. v. Ft. Worth & W. R.R. Co., 418 F.3d 535, 545 (5th Cir.2005). “Mandatory preliminary relief ... is particularly disfavored, and should not,” we are instructed, “be issued unless the facts and law clearly favor the moving party.” Martinez v. Mathews, 544 F.2d 1233, 1243 (5th Cir.1976).

The Court can issue a preliminary injunction only if Ensco shows:

(1) a substantial likelihood of prevailing on the merits; (2) a substantial threat of irreparable injury if the injunction is not granted; (3) the threatened injury outweighs any harm that will result to the non-movant if the injunction is granted; and (4) the injunction will not disserve the public interest.

Ridgely v. FEMA, 512 F.3d 727, 734 (5th Cir.2008). “In each case, courts ‘must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief.’ ” Winter v. Natural Res. Def. Council, 555 U.S. 7, 129 S.Ct. 365, 376, 172 L.Ed.2d 249 (2008) (quoting Amoco Prod. Co. v. Vill. of Gambell, Alaska, 480 U.S. 531, 542, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987)). “ ‘In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction.’ ” Id. at 376–77 (quoting Weinberger v. Romero–Barcelo, 456 U.S. 305, 312, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982)). Even if all persuasion elements are satisfied, an injunction remains “a matter of equitable discretion; it does not follow from [a substantial] success on the merits as a matter of course.” Id. at 381; see Romero–Barcelo, 456 U.S. at 313, 102 S.Ct. 1798 (“[A] federal judge sitting as chancellor is not mechanically obligated to grant an injunction for every violation of law.”).

The first question the Court must answer is whether the plaintiff has shown a substantial likelihood of success on the merits of Count IV.

II.

A.

1.

Section 706(1) of the Administrative Procedure Act proclaims a national policy and requires a reviewing court to “compel agency action unlawfully withheld or unreasonably delayed.” Id. § 706(1); see Telecommc'ns Research & Action Ctr. v. FCC, 750 F.2d 70, 79 (D.C.Cir.1984) ( “Claims of unreasonable agency delay clearly fall into that narrow class of interlocutory appeals from agency action over which we appropriately should exercise our jurisdiction.”).

The failure to act, as contemplated by Section 706, is “properly understood as a failure to take ... agency actions (including their equivalents) ... defined in § 551(13).” Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 62, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004); see Sierra Club v. Peterson, 228 F.3d 559, 565 (5th Cir.2000) (“Absent a specific and final agency action, [courts] lack jurisdiction to consider a challenge to agency conduct.”). Section 551(13) defines final agency action as “the whole or a part of an agency rule, order, license, sanction, [or] relief.” 5 U.S.C. § 551(13). The term “license” includes “the whole or a part of an agency permit.” Id. at § 551(8). And so, agency delay in issuing or denying a permit, or the failure to act at all, is a final agency action made reviewable by the APA.

But although “[f]ailures to act are sometimes remediable under the APA,” they are “not always” so. SUWA, 542 U.S. at 61, 124 S.Ct. 2373. Section 706(1) “empowers a court only to compel an agency ‘to perform a ministerial or non-discretionary act,’ or to ‘take action upon a matter, without directing how it shall act.’ ” Id. at 64, 124 S.Ct. 2373 (quoting approvingly the Attorney General's Manual on the Administrative Procedure Act 108 (1947)) (emphasis removed). A Section 706(1) claim therefore “can proceed only where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take.” Id. (emphasis in original); Section 706 vests federal courts with the discretion to decide whether agency delay is unreasonable “when an agency is required to act—either by organic statute or by the APA—within an expeditious, prompt, or reasonable time.” Forest Guardians v. Babbitt, 174 F.3d 1178, 1190 (10th Cir.1999). Anything less would paralyze the established judicial review authority fashioned by the APA. Anything more would be an unacceptable disrespect for the institution of the separation of powers.

2.

The Court finds that the Outer Continental Shelf Lands Act (OCSLA) establishes a non-discretionary duty on the Department of the Interior to act, favorably or unfavorably, on drilling permit applications. Although OCSLA grants the Secretary discretion to decide whether to review permit applications, see 43...