Ensco Offshore Co. v. Salazar
| Decision Date | 06 April 2011 |
| Docket Number | Civil Action No. 10–1941. |
| Citation | 73 ERC 1855,786 F.Supp.2d 1151 |
| Parties | ENSCO OFFSHORE CO., et al.v.Kenneth Lee “Ken” SALAZAR, et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
OPINION TEXT STARTS HERE
George J. Fowler, III, Lawrence Raymond Demarcay, III, Fowler Rodriguez, New Orleans, LA, Emmett B. Lewis, Homer E. Moyer, Jr., Timothy P. O'Toole, Adam Peter Feinberg, Miller & Chevalier Chartered, Washington, DC, for Ensco Offshore Co., et al.Guillermo A. Montero, Brian M. Collins, Justin A. Savage, Kristofor R. Swanson, U.S. Department of Justice, Washington, DC, Peter M. Mansfield, U.S. Attorney's Office, New Orleans, LA, for Kenneth Lee “Ken” Salazar, et al.
ORDER & REASONS
MARTIN L.C. FELDMAN, District Judge.
This is the next chapter in the saga of the status of deepwater drilling in the Gulf of Mexico after the infamous April 2010 BP oil spill, known otherwise in some quarters as the government's de facto drilling moratorium. What we read in the last chapter was a story of the disquieting spectre of the government's questionable conduct regarding its portrayal of important facts, and an earnest challenge to resolute governmental abuse.
This chapter tells a different story. It visits the arcane depths of administrative law and the extent to which the United States Supreme Court's Chevron test, coupled with the Administrative Procedure Act, confines this Court's statutory duty of judicial review of charges of federal regulatory agency abuse.
Before the Court are narrowly focused cross-motions for summary judgment on Counts V and VI of the plaintiffs' second amended complaint. The plaintiffs' motion is DENIED. The government's motion is GRANTED in part and DENIED in part.
In their second amended complaint, the plaintiffs challenge the government's application of two regulations each of which have been in place for more than a decade. Together, these challenges allege that the government exceeded its authority under the Outer Continental Shelf Lands Act (OCSLA) and the Administrative Procedure Act (APA) by requiring both (1) Development Operations Coordination Documents (DOCDs) and (2) applications for permits to drill in connection with production and development activities in areas of the Gulf of Mexico not adjacent to the State of Florida. The plaintiffs seek an order holding unlawful, setting aside, and permanently enjoining enforcement of these regulations.
Count V of the plaintiffs' complaint attacks the requirement that operators prepare DOCDs in connection with development and production activities in the western Gulf of Mexico. The plaintiffs contend that the DOCD requirement essentially amounts to a requirement that the plaintiffs prepare what is known as a development and production plan (DPP), which, they allege, may be imposed only in the Florida Gulf under OCSLA. In imposing a DPP-like requirement outside of the Florida Gulf, the plaintiffs contend that the government has exceeded its statutory authority.
The government concedes that requiring the submission of a DPP or a DOCD serves the same purpose and that each document provides BOEMRE with similar information. To illustrate, under Interior's regulations, both the DPP and DOCD must describe the anticipated rate of production, technology and practices that would be used to ensure optimal recovery of oil and gas, environmental safeguards that would be implemented under the plan, and the measures taken to meet all applicable safety standards. See 30 C.F.R. § 250.241–.250, .252–.267, .269–.286. Indeed, the regulations governing the two often are identical and begin with some variation on the command, “Your DPP or DOCD must include the following....” See 30 C.F.R. § 250.241.
But, the government touts, the documents are not identical: DOCDs in the western Gulf of Mexico are less demanding than the Florida Gulf's DPPs, both substantively and procedurally. The regulations require that DPPs, but not DOCDs, “provide a timetable for acquiring lands ... and constructing or expanding any of the onshore support facilities.” 30 C.F.R. § 250.258(a)(2). “At least once in each OCS planning area,” moreover, “the Director will declare that the approval of a proposed DPP,” but not the approval of a proposed DOCD, “is a major Federal action, and [BOEMRE] will prepare an [environmental impact statement].” 30 C.F.R. § 250.269(a). And, Interior has exercised its authority under 30 C.F.R. § 250.201(c), to exempt DOCDs, but not DPPs, from requirements that would otherwise apply under the regulations.1See NTL No. 2006–G14 at 6–7, 12, 19, 23.2
The regulations underlying this challenge were amended in 1984 to allow what is now BOEMRE to require preparation of DOCDs by lessees in the western Gulf of Mexico. See Final Rule: Oil & Gas & Sulphur Operations in the Outer Continental Shelf, 48 Fed. Reg. 55565 (Dec. 14, 1983); see also Final Rule: Oil & Gas & Sulphur Operations in the Outer Continental Shelf; Outer Continental Shelf Minerals & Rights–of–Way Management, General; & Outer Continental Shelf Orders for All Regions of the Outer Continental Shelf, 53 Fed. Reg. 10596, 10608 (Apr. 1, 1998) (). The plaintiffs concede that this requirement has been previously applied to their activities in the western Gulf, but assert that the pending challenge targets the government's recent application of the DOCD requirement in the western Gulf of Mexico after the Deepwater Horizon catastrophe. Plaintiffs charge intentional delay and an arbitrary and capricious crafting of post-BP spill regulatory rules:
• The government rescinded previously-approved DOCDs and is requiring ATP to go through the approval process again—something the government has not done before.
• The government imposed new requirements which must be met before a DOCD is approved; specifically, plaintiffs complain, NTL–06 requires BOEMRE to no longer use categorical exclusions with respect to National Environmental Policy Act review for DOCDs.
• The government is taking substantially longer to review and approve DOCDs.
Count VI separately challenges as unlawful the government's requirement that each lessee obtain drilling permits for development and production drilling. The plaintiffs contend that OCSLA authorizes a permit requirement only in connection with exploration drilling pursuant to an approved exploration plan. The regulations, in contrast, require the approval of an application to drill under not only an exploration plan, but also under a DPP and a DOCD. 30 C.F.R. § 250.281.
The regulations complained of in Count VI were amended in 1998 to require submission of an application for a permit to drill prior to the initial drilling of a well under an approved DPP or DOCD. See 53 Fed. Reg. at 10710, 10722. Again, the plaintiffs concede that this regulation has been previously applied to their activities in the western Gulf, but they assert that it has been applied to them in a novel way in the last several months. As with the DOCDs challenged in Count V, the plaintiffs claim that the government has rescinded previously-approved permits, has imposed new permitting requirements, and is taking much longer to review and approve permit applications than in the past. (This Court has previously held that Interior must act on permit applications within a reasonable time, which the Court defined as within thirty days.)
Now, the plaintiffs and the government move for summary judgment on Counts V and VI. Resolution of these motions turns first on a question of statutory interpretation.
Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine issue as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine issue of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The Court emphasizes that mere argued existence of a factual dispute does not defeat an otherwise properly supported motion: “If the evidence is merely colorable, or is not significantly probative,” summary judgment is appropriate. Id. at 249–50, 106 S.Ct. 2505 (citations omitted). Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir.1992). It must instead come forward with competent evidence, such as affidavits or depositions, to buttress its claims. Id. Hearsay evidence and unsworn documents do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.1987). In evaluating the summary judgment motion, the Court must read the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
Because here the Court evaluates an administrative agency's construction of a statute that it administers, its analysis is governed by the two-step test announced in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Chevron speaks to the parameters of this Court's statutory duty of judicial review.
The Supreme Court instructs that “[r]egardless of how serious the problem an administrative agency seeks to address, ... it may not exercise its authority ‘in a manner that is inconsistent with the...
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