National Helium Corporation v. Morton

Decision Date11 June 1973
Docket NumberCiv. A. No. W-4568.
Citation361 F. Supp. 78
PartiesNATIONAL HELIUM CORPORATION, Plaintiff, Phillips Petroleum Company and Cities Service Helex, Inc., Intervenors, v. Rogers C. B. MORTON, Secretary of the Interior, and Elburt F. Osborn, Director, Bureau of Mines, Department of the Interior, Defendants.
CourtU.S. District Court — District of Kansas

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Emmet A. Blaes, of Jochems, Sargent & Blaes, Wichita, Kan., Raymond S. E. Pushkar, Herbert L. Fenster, Herbert L. Fenster, Robert L. Ackerly, of Sellers Conner & Cuneo, Washington, D. C., for plaintiff.

Harlington Wood, Jr., Asst. Atty. Gen., Harland F. Leathers, Stuart E. Schiffer, Raymond D. Battacchi, Attys., Dept. of Justice, Washington, D. C., Robert J. Roth, U. S. Atty., E. Edward Johnson, Asst. U. S. Atty., John J. Immel, Wichita, Kan., for defendants.

DECISION AND OPINION OF THE COURT

THEIS, District Judge.

On March 27, 1971, this Court temporarily enjoined the Secretary of the Interior from terminating the National Helium Conservation Program as implemented by three helium procurement contracts entered into with the plaintiffs prior to a hearing on the merits or, alternatively, a reconsideration by the Department of Interior of its action in the light of the applicable substantive and procedural requirements of the National Environmental Policy Act of 1969, 83 Stat. 852, 42 U.S.C. § 4321 et seq.; the Helium Act, as amended by the Helium Act Amendments of 1960, 74 Stat. 918, 50 U.S.C. § 167 et seq.; and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. National Helium Corporation v. Morton, 326 F.Supp. 151 (D.Kan.1971), aff'd. 455 F.2d 650 (10th Cir. 1971). Of particular concern to the Court was the failure of the Department of Interior to prepare a final environmental impact statement prior to taking the contemplated action. On February 2, 1973, the Secretary of Interior again determined that the helium procurement contracts should be terminated, since the purposes of the Helium Act of 1960 had been satisfied and, accordingly, notices were sent to the plaintiffs that termination would occur on April 4, 1973, at 8:00 a. m., C.S.T. Having prepared a final environmental impact statement in accordance with § 4332(2)(C) of the National Environmental Policy Act, 42 U.S.C., the Secretary immediately moved for dissolution of the preliminary injunction.

In response to the defendants' notices of termination and motion for dissolution, the plaintiffs filed verified amended complaints seeking, inter alia, the continuation of the preliminary injunction pending a full hearing on the merits of the case. They alleged that: (1) the defendants had not complied with the procedural and substantive requirements of the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. (hereinafter referred to as "NEPA"), the Helium Act Amendments of 1960, 50 U.S.C. § 167 et seq. (hereinafter referred to as the "Helium Act"); and the Administrative Procedure Act, 5 U. S.C. § 551 et seq., prior to the termination of the contracts; (2) the necessary conditions precedent for termination of the implementing contracts and the National Helium Conservation Program had not in fact occurred; and (3) the proposed agency action was otherwise arbitrary, capricious, an abuse of discretion, and not in accordance with law. In support of their allegations, the plaintiffs submitted documents, briefs, and a number of affidavits.

On March 14, 1973, the Court heard oral argument on the defendants' motion to dissolve the preliminary injunction. The defendants contended that since a comprehensive final environmental impact statement had been prepared, upon which the Secretary of Interior had determined to terminate the helium contracts, the Secretary's decision was entitled to a presumption of regularity, and the preliminary injunction should accordingly be dissolved. After a careful examination of the defendants' draft and final environmental statements and the pertinent comments attached thereto, the plaintiffs' amended complaint and supporting affidavits and documents, and the applicable law, the Court overruled the defendants' motion.

The Court had already ruled that it had jurisdiction of the suit by virtue of 28 U.S.C. §§ 1331, 1361, 2201 and 2202, and 5 U.S.C. §§ 701-706; that the plaintiffs had standing to raise the issues herein involved; that the termination of these contracts was a major federal action significantly affecting the quality of human environment and posing serious environmental consequences within the meaning of § 4332(2)(C) of NEPA, 42 U.S.C.; that the requirements of NEPA were applicable to the Department of Interior "to the fullest extent possible" in the administration of the Helium Act by virtue of 42 U.S.C. § 4332; that there had been a sufficient showing of a likelihood of irreparable injury to the plaintiffs and the public if the Secretary's action was not enjoined; and that the Secretary's decision was subject to limited judicial review pursuant to § 706(2)(A) of the Administrative Procedure Act, 5 U.S.C., National Helium Corporation v. Morton, supra. Although the Secretary's decision was entitled to a presumption of regularity, "that presumption was not to shield his action from a thorough, probing, indepth review." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971).

Since the plaintiffs' amended complaints and supporting documents presented a substantial controversy involving complex factual and legal issues justifying the maintenance of the status quo pending further hearings, and the Court was convinced that the plaintiffs had established a probability of ultimate success, thereby justifying the issuance of a preliminary injunction in the first instance in accordance with the standards enunciated in Crowther v. Seaborg, 415 F.2d 437 (10th Cir. 1969), the Court determined that the dissolution of the previous injunction would be a futile gesture. See Environmental Defense Fund v. Corps of Engineers of the United States Army, 325 F.Supp. 749 (E.D. Ark.1971). The Court did, however, require the plaintiffs to post a bond in the sum of $2,000,000 for the payment of such costs and damages as might be incurred by defendants if they were found to have been wrongfully restrained, and determined that this bond, along with the twenty-eight million dollars owed by the Government to the contractors, gave it a thirty million dollar security cushion.

The defendants immediately perfected an appeal of this Court's order denying their motion for dissolution of the preliminary injunction to the Tenth Circuit Court of Appeals. In response to the defendants' request, this Court also certified its subsequent orders denying the defendants' motions for summary judgment on the pleadings pursuant to Rule 56, F.R.Civ.P. and, in the alternative, dismissal of the amended complaints, in part, for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), F.R.C. P. The Tenth Circuit did not rule on any of the orders, but it did direct that the trial on the merits should be held within thirty days on the administrative record, rather than by trial de novo, in conformity with the recent United States Supreme Court decision in Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). Having resolved the preliminary matters, reviewed the administrative record as supplemented by the plaintiffs, and heard oral argument, this case is ripe for final disposition.

FACTUAL BACKGROUND

This is a case of considerable complexity and moment. A basic review of the characteristics of helium and the history and development of this country's helium conservation program, including the role played by the implementing helium procurement contracts herein involved, consequently serves as an instructive prelude to its resolution. The summary which follows was gleaned from the administrative record submitted by the Department of Interior, including numerous departmental studies, compilations, and reports, and is supported by the findings of facts in related litigation in Northern Natural Gas Company v. Grounds, 292 F.Supp. 619, 624-680 (D. Kan.1968), aff'd. 441 F.2d 704 (10th Cir.1971); Air Reduction v. Hickel, 137 U.S.App.D.C. 24, 420 F.2d 592 (1969); and Northern Helex Co. v. United States, 455 F.2d 546 (Ct.Cl.1972).

Helium is a colorless, odorless, and tasteless gas which, in the present state of scientific knowledge, will not react chemically or physically with any other element, except under laboratory conditions. Helium is non-combustible. It is the second lightest element found on earth next to hydrogen, which is highly combustible. Helium does not liquefy at standard atmospheric pressure until it reaches—452.1 degrees Fahrenheit, almost absolute zero and lower than any other gas. It is the only known gas which can develop superconductivity in metals. It is the best known transmitter of sound and the best conductor of heat at near absolute zero of any gas. It becomes a super fluid near absolute zero. Helium is non-toxic to man and it does not become radioactive.

Since its discovery on the sun by Sir Norman Lockyear in 1868, helium has grown from a laboratory curiosity with no practical applications to one of the most valuable, yet rapidly wasting, elements on earth. As measured by its demand, helium has established itself as a tool in shielded arc welding and other metallurgical applications, lighter-than-air applications, chromatography as a carrier gas, leak detection, heat transfer medium in nuclear power reactors, pressurizing and purging liquid propellants for space boosters, under sea work as a breathing gas when mixed with oxygen, medical research and therapeutic treatment, cryogenics, and in low temperature research. Helium is also presently being used as a coolant in high-temperature gas-cooled reactors.

Future uses of helium for which research is presently being...

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    ...In June 1973 the District Court found the impact statement inadequate and continued the injunction. National Helium Corp. v. Morton, 361 F.Supp. 78, 97-108 (D.Kan.1973). The Tenth Circuit, in October 1973, reversed, finding the impact statement to be sufficient, and remanded with directions......
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