Gulf Restoration Network, Inc. v. Salazar

• Citation: 683 F.3d 158,75 ERC 1151
• Decision Date: 30 May 2012
• Docket Number: 10–60475,Nos. 10–60411,10–60413 to 10–60416,10–60500 and 10–60490.,10–60417,10–60491,10–60468,10–60483,10–60489,10–60496,10–60499,10–60488,s. 10–60411
• Parties: GULF RESTORATION NETWORK, INC.; Sierra Club, Inc., Petitioners, v. Ken SALAZAR, Secretary of the Department of Interior; Wilma Lewis, Assistant Secretary, Land and Minerals Management, Department of the Interior; Michael R. Bromwich, Director, Minerals Management Service, Department of the Interior, Respondents. Center For Biological Diversity, Petitioner, v. Ken Salazar, Secretary of the Department of Interior; Michael R. Bromwich, Director of the Minerals Management Service; Minerals Management Service, Respondents. Center For Biological Diversity, Sierra Club, Incorporated, Petitioners, v. Ken Salazar, Secretary of the Department of Interior; Michael R. Bromwich, Director of the Minerals Management Service; Minerals Management Service, Respondents.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

683 F.3d 158

75 ERC 1151

GULF RESTORATION NETWORK, INC.; Sierra Club, Inc., Petitioners,

v.Ken SALAZAR, Secretary of the Department of Interior; Wilma Lewis, Assistant Secretary, Land and Minerals Management, Department of the Interior; Michael R. Bromwich, Director, Minerals Management Service, Department of the Interior, Respondents.

Center For Biological Diversity, Petitioner,

v.Ken Salazar, Secretary of the Department of Interior; Michael R. Bromwich, Director of the Minerals Management Service; Minerals Management Service, Respondents.

Center For Biological Diversity, Sierra Club, Incorporated, Petitioners,

v.Ken Salazar, Secretary of the Department of Interior; Michael R. Bromwich, Director of the Minerals Management Service; Minerals Management Service, Respondents.

Nos. 10–60411, 10–60413 to 10–60416, 10–60417, 10–60468, 10–60475, 10–60483, 10–60488, 10–60489, 10–60491, 10–60496, 10–60499, 10–60500 and 10–60490.

United States Court of Appeals,

Fifth Circuit.

May 30, 2012.

David G. Guest, Alisa Ann Coe, Monica K. Reimer (argued), Earthjustice, Tallahassee, FL, Joel R. Waltzer, Waltzer & Associates, Harvey, LA, Robert Baxter Wiygul, Waltzer & Wiygul, Ocean Springs, MS, Adam Babich (argued), Tulane University, Tulane Environmental Law Clinic, New Orleans, LA, Marc David Fink, Center for Biological Diversity, Duluth, MN, Jaclyn Lopez, Cari Miyoko Sakashita, Center for Biological Diversity, San Francisco, CA, for Petitioners.

Sambhav Nott Sankar, David C. Shilton (argued), U.S. Dept. of Justice, Environment & Natural Resources Div., Washington, DC, John Emad Arbab, U.S. Dept. of Justice, Environment & Natural Resources Div., App. Section, Eric H. Holder, Jr., U.S. Dept. of Justice, Washington, DC, for Respondents.

Reginald Ross Smith, Tracey Maria Robertson, King & Spalding, L.L.P., Sharon Marie Mattox, Gwendolyn Johnson Samora, Vinson & Elkins, L.L.P., Houston, TX, Charles J. Engel, III, Ashley Charles Parrish, King & Spalding, L.L.P., Steven Joseph Rosenbaum (argued), Covington & Burling, L.L.P., Michael Butler Wigmore, Sandra P. Franco, Thomas Richard Lotterman, Bingham McCutchen, L.L.P., Washington, DC, Douglas C. Longman, Jr., Carmen Marie Rodriguez, Jones Walker, Lafayette, LA, Gerald F. Slattery, Jr., Slattery, Marino & Roberts, P.L.C., New Orleans, LA, for Intervenors.

Steven Joseph Rosenbaum, Covington & Burling, L.L.P., Washington, DC, for American Petroleum Institute, Intern. Ass'n of Drilling Contractors, Independent Petroleum Ass'n of America, and United States Oil & Gas Ass'n, Amicus Curiae.

Petitions for Review of Orders of the Department of Interior.¹

Before HIGGINBOTHAM, DENNIS and PRADO, Circuit Judges.

DENNIS, Circuit Judge:

On April 20, 2010, BP's Deepwater Horizon, an oil drilling rig on the outer continental shelf, 50 miles from Louisiana, exploded, causing a three-month long spill of 4.9 million barrels of oil into the Gulf of Mexico. Before and during the oil spill, the Department of the Interior (DOI)² continuedto process mineral lessees' applications for approval of plans for exploration and development of new oil wells.

The petitioners, the Sierra Club, the Gulf Restoration Network, and the Center for Biological Diversity (the Center), non-profit environmental protection organizations, filed petitions for judicial review in this court challenging sixteen DOI plan approvals, issued between March 29 and May 20, 2010, under the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§ 1331–1356a. ³ Specifically, the petitioners argue that the DOI's approvals of the plans violated both the OCSLA and the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. §§ 4321 et seq., because: (1) the DOI failed to consider the BP Deepwater Horizon disaster in approving further deepwater drilling; and (2) the DOI conducted an inadequate review of the plans under NEPA, because it incorrectly applied “categorical exclusions” (from the NEPA requirements of preparing environmental assessments or environmental impact statements) to those plans, which should not have been so excluded because they involved drilling in “relatively untested deep water,” “areas of high biological sensitivity,” “areas of high seismic risk or seismicity,” or “areas of hazardous natural bottom conditions.” As to the second argument, the Center emphasizes that the BP Deepwater Horizon disaster further shows the inherent inadequacy of the DOI's environmental analyses underlying the categorical exclusions. The petitioners request that we vacate the DOI's approvals of the sixteen plans and remand the plans to the DOI for further proceedings consistent with OCSLA and NEPA.

We conclude that: (1) the petitioners' OCSLA-based challenges are justiciable, except for four, which have become moot; (2) the DOI's approval of the exploratory and development plans are subject to judicial review by this court under OCSLA, 43 U.S.C. § 1349(c)(2); (3) the petitioners' failure to participate in the administrative proceedings related to the DOI's approval of the plans as required by § 1349(c)(3) does not oust our jurisdiction because that participation requirement is a non-jurisdictional administrative exhaustion rule; but, (4) the petitioners have not shown sufficient justification for excusing them from that exhaustion requirement in this case. Accordingly, except for four of the petitioners' petitions for judicial review that are dismissed as moot, the petitioners' petitions for judicial review are dismissed because of their failure to participate in the administrative proceedings.

I. BACKGROUND

Congress declared it to be the policy of the United States that “the subsoil and seabed of the outer Continental Shelf [ (OCS) ] appertain to the United States and are subject to its jurisdiction, control, and power of disposition as provided in [OCSLA].” 43 U.S.C. § 1332(1). Further, the OCS “is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs.” Id. § 1332(3). The DOI is authorized and required to “administer the provisions of [OCSLA] relating to the leasing of the [OCS]” for mineral exploration and development and to “prescribe such rules and regulations as may be necessary to carry out such provisions.” Id. § 1334(a). The DOI “is authorized to grant to the highest responsible qualified bidder or bidders by competitive bidding, under regulations promulgated in advance, any oil and gas lease on submerged lands of the [OCS].” Id. § 1337(a)(1).

Under OCSLA, as amended in 1978, the development of an offshore oil well must be pursued by a lease purchaser or mineral lessee in four distinct administrative stages. See Sec'y of the Interior v. California, 464 U.S. 312, 336–37, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984). The four stages are: “(1) formulation of a five year leasing plan by the Department of the Interior; (2) lease sales; (3) exploration by the lessees; (4) development and production. Each stage involves separate regulatory review that may, but need not, conclude in the transfer to lease purchasers of rights to conduct additional activities on the OCS. And each stage includes specific requirements for consultation with Congress, between federal agencies, or with the States.” Id. at 337, 104 S.Ct. 656.

The present case involves only the third and fourth stages: exploration and development and production. The first two stages—the five year leasing plan and lease sales—are not at issue here. The Court in Secretary of the Interior described the pertinent exploration and development and production stages as follows:

“ (3) Exploration. The third stage of OCS planning involves review of more extensive exploration plans submitted to Interior by lessees. 43 U.S.C. § 1340 (1976 ed., Supp. III). Exploration may not proceed until an exploration plan has been approved. A lessee's plan must include a certification that the proposed activities comply with any applicable state management program developed under [the Coastal Zone Management Act (CZMA) ]. OCSLA expressly provides for federal disapproval of a plan that is not consistent with an applicable state management plan unless the Secretary of Commerce finds that the plan is consistent with CZMA goals or in the interest of national security. 43 U.S.C. § 1340(c)(2) (1976 ed., Supp. III). The plan must also be disapproved if it would ‘probably cause serious harm or damage ... to the marine, coastal, or human environment ....’ 43 U.S.C. §§ 1334(a)(2)(A)(i), 1340(c)(1) (1976 ed., Supp. III). If a plan is disapproved for the latter reason, the Secretary may ‘cancel such lease and the lessee shall be entitled to compensation ....’ 43 U.S.C. § 1340(c)(1) (1976 ed., Supp. III) ....” 464 U.S. at 339, 104 S.Ct. 656 (alterations in original).

“ (4) Development and production. The fourth and final stage is development and production. 43 U.S.C. § 1351 (1976 ed., Supp. III). The lessee must submit another plan to Interior. The Secretary must forward the plan to the governor of any affected state and, on request, to the local governments of affected states, for comment and review. 43 U.S.C. §§ 1345(a), 1351(a)(3) (1976 ed., Supp. III). Again, the governor's recommendations must be accepted, and the local governments' may be accepted, if they strike a reasonable balance between local and national interests. Reasons for accepting or rejecting a governor's recommendations must be communicated in writing to the governor. 43 U.S.C. § 1345(c) (1976 ed., Supp. III). In addition, the development and production plan must be consistent with the applicable state coastal management program. The State can veto the plan as ‘inconsistent,’ and the veto can be overridden only by the Secretary of Commerce. 43 U.S.C. § 1351(d) (1976 ed., Supp. III). A plan may also be disapproved if it would ...