Friends of Earth, Inc. v. Mosbacher

• Decision Date: 30 March 2007
• Docket Number: No. C 02-04106 JSW.,C 02-04106 JSW.
• Citation: 488 F.Supp.2d 889
• Parties: FRIENDS OF the EARTH, INC., et al., Plaintiffs, v. Robert MOSBACHER, Jr., et al., Defendants.
• Court: U.S. District Court — Northern District of California

488 F.Supp.2d 889

FRIENDS OF the EARTH, INC., et al., Plaintiffs, v. Robert MOSBACHER, Jr., et al., Defendants.

No. C 02-04106 JSW.

United States District Court, N.D. California.

March 30, 2007.

COPYRIGHT MATERIAL OMITTED

Richard Roos-Collins, Natural Heritage Institute, San Francisco, CA, Ronald A. Shems, Brian Dunkiel, Geoff Hand, Shems Dunkiel Kassel & Saunders PLLC, Burlington, VT, Joseph N. Raismes, Sue Ellen Harrison, Office of the City Attorney, Boulder, CO, for Plaintiffs.

Kevin V. Ryan, United States Attorney, James A. Coda, Office of the United States Attorney, San Francisco, CA, Brian C. Toth, U.S. Department of Justice, Washington, DC, for Defendants.

ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

WHITE, District Judge.

I. INTRODUCTION.

This matter comes before the Court upon consideration of: (1) the motion for summary judgment filed by Plaintiffs¹; (2) the cross-motion for summary judgment filed by Defendant Robert Mosbacher, Jr., in his capacity as President and Chief Executive Officer of the Overseas Private Investment Corporation ("OPIC"); and (3) the cross-motion for summary judgment filed by Defendant Phillip Merrill, in his capacity as President and Chairman of the Export-Import Bank ("Ex-Im").² Having carefully considered the parties' pleadings, relevant legal authority, the record in this case, and having had the benefit of oral argument, the Court HEREBY DENIES Plaintiffs' motion for summary judgment, and GRANTS IN PART AND DENIES IN PART OPIC's cross-motion for summary judgment, and GRANTS IN PART AND DENIES IN PART Ex-Im's cross-motion for summary judgment.

II. BACKGROUND.

This case arises out of Plaintiffs' desire to have the Defendants take a hard look at the impact greenhouse gases, emitted by projects for which the Defendants provide financial support, have on the domestic environment. Global warming and its effects on our planet clearly have gained increased public attention. The Intergovernmental Panel on Climate Change is set to release its fourth assessment report about the human contribution to climate change. See, e.g., www.sfgate.com, Kay, A Warming World: Climate Change Report, San Francisco Chronicle (Feb. 3, 2007). The documentary on global climate change, "An Inconvenient Truth," received an Academy Award® this year. California has instituted a lawsuit against automakers seeking damages based on greenhouse gases emitted by automobiles. See, e.g., www.sfgate.com, Egelko, A.G. Brown pushes ahead with global warming suit against automakers, San Francisco Chronicle (Feb. 1, 2007). The issue of whether the Environmental Protection Agency can be compelled to regulate greenhouse gas emissions is pending before the United States Supreme Court. See Massachusetts v. EPA, 415 F.3d 50 (D.C.Cir.2005), cert. granted, ___ U.S. ___, 126 S.Ct. 2960, 165 L.Ed.2d 949 (2006).

The Court does not doubt that the consequences of global warming will remain a matter of public interest for some time, and it recognizes the importance of the issues raised by this case. As always, in rendering its decision, the Court must interpret the law in light of the facts and record presented by the parties.

A. Procedural History.

Plaintiffs initiated this action against OPIC and Ex-Im pursuant to the National Environmental Policy Act, 42 U.S.C. §§ 4321-4335 ("NEPA") and the Administrative Procedure Act, 5 U.S.C. §§ 701-706 ("APA"). Plaintiffs generally allege that each of these agencies have provided, and continue to provide, financial support to international fossil fuel projects that emit greenhouse gases ("GHGs"). Plaintiffs contend these GHG emissions cause climate changes that significantly affect the domestic environment. (Second Amended Complaint ("SAC") ¶¶ 146-211.) Plaintiffs assert that before they agree to provide financial support for these projects, OPIC and Ex-Im are required to conduct an environmental review under NEPA. In particular, Plaintiffs assert that each Defendant has an energy "program" that is subject to NEPA's requirements. Plaintiffs also identify seven "illustrative" projects financed by either OPIC or Ex-Im or by both agencies and contend that each of these seven projects are subject to NEPA's requirements. (Id. ¶¶ 162-203.)

Plaintiffs ask for: (1) "a declaration that defendants violated and are in violation of NEPA and the APA for failing to comply with NEPA:" (2) a declaration that "defendants' programs of financing projects that directly or indirectly emit [carbon dioxide (`CO₂')] and each financing decision for particular projects that directly or indirectly emit CO₂ are subject to NEPA;" (3) an injunction "requiring the defendants to fully comply with NEPA;" (4) an injunction requiring "defendants to prepare programmatic environmental assessments of [their] support of energy projects;" and (5) an injunction "requiring defendants to prepare environmental assessments for each of [their] fossil fuel related projects including, but not limited to fossil fuel extraction projects and pipelines." (See id. at p. 47.)

On August 23, 2005, the Court denied a motion for summary judgment filed by Defendants and found that: (1) Plaintiffs had standing to pursue their claims against OPIC and Ex-Im; (2) Plaintiffs challenged final agency actions; and (3) OPIC had not demonstrated that its organic statute, the Foreign Assistance Act, precluded judicial review of Plaintiffs' claims under the APA. The Court also concluded, based on the record then before the Court, that OPIC had not demonstrated that Congress did not intend NEPA to apply to OPIC. (See Docket 117 at 10-13 (hereinafter "August 23 Order").)

The motions for summary judgment now pending address the merits of Plaintiffs' claims.

B. Factual Background.³

1. Overseas Private Investment Corporation.

OPIC is an agency of the United States created "[t]o mobilize and facilitate the participation of the United States private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from nonmarket to market economies." 22 U.S.C. § 2191. As part of its statutory mission. OPIC insures investments overseas against a broad range of political risks, finances business overseas through loans and loan guarantees, finances private investment funds that provide equity to businesses overseas, and advocates the interests of the American business community overseas. (See Answer ¶ 18; OPIC Ex. 6 (Declaration of Harvey Himburg dated November 3, 2004 (hereinafter "Himburg Decl.") ¶¶ 13-7).) Although OPIC may make direct loans, it may do so "only for projects that are sponsored by or significantly involve United States small business or cooperatives." OPIC cannot provide direct loans "to finance any operation for the extraction of oil or gas." 21 U.S.C. § 2194(c). OPIC also is "required by statute to operate its programs in a manner consistent with" section 117 of the Foreign Assistance Act (22 U.S.C. § 2151p), which sets forth the environmental requirements applicable to the United States Agency for International Development ("US AID"). (See, e.g., OPIC Administrative Record ("OPIC A.R.") Tab 2 at 000013.)

In 1999, having considered comments from OPIC's users, members of the public, members of Congress, and "general policy initiatives announced by President Clinton at the United Nations Special Session on the Environment in June of 1997," OPIC published an environmental handbook ("OPIC Handbook"). (OPIC A.R. Tab 2 at 000008; see also OPIC Exs. 10-1S.) The OPIC Handbook was "intended to provide information to OPIC's users, as well as the interested public, with respect to the general environmental guidelines, assessment and monitoring procedures that OPIC applies, in its discretion, to prospective and ongoing investment projects." (Id. Tab 2 at 000008; see also Himburg Decl. ¶ 11.) As further set forth in the OPIC Handbook, "[t]he standards and procedures described [herein] generally reflect existing practice at OPIC as it has evolved since the enactment in 1985 of statutory environmental provisions applicable to OPIC." (OPIC A.R. Tab 2 at 000008.)

In its handbook, OPIC also states that it is required "to provide some degree of [environmental assessment] to every project considered for insurance or finance in determining whether to provide support for the project." (Id. at 000014.) "OPIC cannot provide a final commitment to a project ... until its environmental assessment is complete and a determination is made by OPIC that the environmental health and safety impacts of the project are acceptable." (Id.) It is undisputed that OPIC does not conduct these environmental assessments under the auspices of NEPA.

As set forth in the OPIC Handbook, the first step in OPIC's environmental screening procedures is to review an application to determine whether financial support "would violate any categorical prohibition required by OPIC's organic statute or policy." (Id. at 000009, 000011-12.) When a project is not categorically ineligible for OPIC's support, OPIC continues the screening process to "determine the level of environmental sensitivity associated with the industry sector or site involved." OPIC's Environmental Unit assigns a given project to one of six categories, denominated Categories A-F. (Id.)

If a project is identified as a "Category A" project, OPIC requires an "Environmental Impact Assessment" or an "Initial Environmental Audit" or both. (Id. at 000009.) "Category A" projects are "likely to have significant adverse environmental impacts that are sensitive (e.g. irreversible, affect sensitive ecosystems, involve involuntary resettlement, etc.), diverse, or unprecedented." (Id. at 000011.) Crude oil refineries, large thermal power projects (200 megawatts or more), major oil and gas developments, and oil and gas pipelines, are among the general types of projects that OPIC...