National Helium Corporation v. Morton

• Citation: 486 F.2d 995
• Decision Date: 19 October 1973
• Docket Number: 73-1449.,No. 73-1169,73-1169
• Parties: NATIONAL HELIUM CORPORATION, Plaintiff-Appellee, and Phillips Petroleum Company and Cities Service Helex, Inc., Intervenor-Plaintiff-Appellees, v. Rogers C. B. MORTON, Secretary of the Interior, and Elburt F. Osborn, Director, Bureau of Mines, Department of the Interior, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

486 F.2d 995 (1973)

NATIONAL HELIUM CORPORATION, Plaintiff-Appellee, and Phillips Petroleum Company and Cities Service Helex, Inc., Intervenor-Plaintiff-Appellees, v. Rogers C. B. MORTON, Secretary of the Interior, and Elburt F. Osborn, Director, Bureau of Mines, Department of the Interior, Defendants-Appellants.

Nos. 73-1169, 73-1449.

United States Court of Appeals, Tenth Circuit.

October 19, 1973.

COPYRIGHT MATERIAL OMITTED

Raymond D. Battocchi, Atty., Dept. of Justice, Washington, D. C. (Harlington Wood, Jr., Asst. Atty. Gen., Irving Jaffe, Acting Asst. Atty. Gen., Robert J. Roth, U. S. Atty., D. Kan., Morton Hollander and Irwin Goldbloom, Attys., Dept. of Justice, on the brief), for defendants-appellants.

Robert L. Ackerly, of Sellers, Conner & Cuneo, Washington, D. C. (Emmet A. Blaes of Jochems, Sargent & Blaes, Wichita, Kan., Raymond S. E. Pushkar, of Sellers, Conner & Cuneo, Washington, D. C., Wendell J. Doggett, Gen. Counsel & Secretary, National Helium Corp., Houston, Tex., of counsel, on the brief), for plaintiff-appellee, National Helium Corp.

William H. Allen, of Covington & Burling, Washington, D. C. (Joseph W. Kennedy, of Morris, Laing, Evans, Brock & Kennedy, Wichita, Kan., Eugene D. Gulland, of Covington & Burling, Washington, D. C.; R. Price Howard, Senior Counsel, Phillips Petroleum Co., Bartlesville, Okl., of counsel, on the brief), for intervenor-plaintiff-appellee, Phillips Petroleum Co.

Daniel R. Hopkins, Oklahoma City, Okl. (William J. Sears, Oklahoma City, Okl., Mark H. Adams, Mark H. Adams, II, and William S. Richardson, of Adams, Jones, Robinson & Malone, Wichita, Kan., on the brief), for intervenor-plaintiff-appellee, Cities Service Helex, Inc.

Before BREITENSTEIN, HILL and DOYLE, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

This cause has been appealed on prior occasions. In National Helium Corporation v. Morton, 455 F.2d 650 (10th Cir. 1971), the district court, 326 F.Supp. 151, had ruled that helium purchase contracts entered into pursuant to the Helium Act, 50 U.S.C. § 167 et seq. could not be terminated by the Secretary of the Interior without the filing by the Interior Department of an environmental impact statement in accordance with 42 U.S.C. § 4321 et seq. This court affirmed that decision, holding that the Department was required to comply with this provision of the National Environmental Policy Act (NEPA). Following the filing of an environmental impact statement by the Department, the Secretary again terminated the helium purchase contracts and once again plaintiffs-appellees filed an injunction suit in the United States District Court for the District of Kansas. The district court again enjoined the Secretary. On this occasion it was due to the dissatisfaction of the court with the impact statement. There have been two other appeal proceedings presented to us. One of these involved the scope of the retrial — whether it was to be an agency review or a de novo hearing. The other had to do with efforts of plaintiffs-appellees to discover government documents.

The district court, 361 F.Supp. 78, filed the decision leading to the instant appeal on June 11, 1973. It again enjoined the Secretary of the Interior from terminating three of the helium purchase contracts. Although the Department had filed an impact statement the court ruled that it had failed to comply with the mandate of the National Environmental Policy Act of 1969; that the impact statement, if not deficient in scope, was essentially lacking in depth. At present, then, the primary issue before the court is whether the Department's impact statement or report was in accordance with the statutory standards and in accordance with this court's mandate in the prior case.

On the prior occasion and now the Secretary terminated the contracts pursuant to their express termination provisions. He did so on the basis that the helium program had been substantially carried out. The mentioned provisions authorize him to terminate when there has been a substantial diminution in helium requirements, discovery of large new helium resources or other changes of a similar nature.¹

At the time that these contracts were entered into, the U.S. helium requirements amounted to 530 million cubic feet of helium per year. This requirement increased in subsequent years, but commenced to decline in 1967 and has declined every year since so that in the year 1970 the demand had decreased to 400 million cubic feet. An average of 3.126 billion cubic feet of helium had been purchased each year. In the years 1971-72 the demand diminished in substantial amounts and all of the purchases have decreased, although they continue to be in excess of two billion cubic feet annually. During this entire purchase period the government through the Bureau of Mines had purchased enough helium to meet all of its needs and has not needed to use the purchased helium. Furthermore, the government believes that it has much more of a supply than can possibly be used between now and 2000. It is estimated that it is six times as much as will be needed.

Following this court's decision the Interior Department proceeded at once to conduct a study leading to the preparation and filing of an environmental impact statement. The initial draft was submitted to interested parties, including the plaintiffs, and comments were received. These are included as part of the report of the Department. The final environmental statement was issued November 13, 1972. The hearing in the district court consisted of a judicial review of the administrative record. It was not a trial de novo. (This was in accordance with the adjudication of this court after the mentioned interlocutory appeal.) The proceedings in the district court were extensive as to the composition of the administrative record. Plaintiffs had full opportunity to express their views, and the court's opinion was thorough and exhaustive.

In its final decision the court ruled that it was limited to determining whether the agency's action was arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law. It concluded that the Department's effort in preparing the impact statement was an insufficient one which failed to come up to the mentioned standard in numerous respects. It characterized the statement as "feeble," "obviously incomplete," "appallingly deficient," "startling in its brevity and lack of depth," and, finally, said that the statement totally failed to consider the environmental impact of termination. The court disapproved the statement in its entirety and remanded the cause for further proceedings.

Reversal is demanded on the following grounds:

First, it is contended that there was a lack of jurisdiction for the district court to even entertain the case in view of the Supreme Court's recent decision (rendered since our last decision) in United States v. Students Chal. Reg. Agcy. Pro. (SCRAP), 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973).

Second, the environmental statement was valid and sufficient; the district court erred in condemning it.

Third, the Secretary complied with the procedural requirements of NEPA as well as with this court's mandate. Hence, there was no justification for issuing the injunction.

Fourth, the district court erred in considering grounds other than sufficiency of F.E.S. since it lacked authority to enjoin for any ground except noncompliance with NEPA.

I. JURISDICTION

A. WHETHER THE AUTHORITY OF THE SECRETARY IS SUPERSEDED BY NEPA.

First we consider the renewed challenge to jurisdiction. As above noted, this question was determined adversely to the government in the early appeal. See 455 F.2d at 653-654. The government now urges that the Supreme Court's recent decision in United States v. Students Challenging Regulatory Agency Procedures, supra, has changed the applicable law and that this issue must be reexamined. In this recent case the Supreme Court reviewed the decision of the District of Columbia three-judge court which enjoined a proposed railroad rate increase of the Interstate Commerce Act. Under that Act a railroad is required to give at least 30 days notice for carrying out a proposed rate increase. During this period the Interstate Commerce Commission may, pursuant to § 15(7) of the Act, suspend the operation of the proposed rate for a maximum of seven months pending an investigation and decision of the lawfulness of the new rates. The Interstate Commerce Commission refused to suspend the rate increase and the environmental issue arose from the fact that the increase involved a 2.5 percent surcharge on nearly all freight rates. Plaintiffs alleged that the modified rate structure would discourage the transportation of recyclable materials and promote the use of raw materials which compete with scrap material and would thereby affect the environment. The Court based its decision on Arrow Transportation Co. v. Southern Railway Co., 372 U.S. 658, 83 S.Ct. 984, 10 L.Ed. 2d 52 (1963), which had held that Congress had in the ICC Act vested exclusive power in the ICC to suspend rates pending final decision and had deliberately extinguished judicial power to grant this relief; the district court lacked jurisdiction to grant an injunction.

It seems apparent that the case at bar differs from the so-called SCRAP decision in that the Helium Act does not vest the Secretary with the same kind of regulatory authority as was present in the SCRAP case. The holding that NEPA did not subvert the power of the Interstate Commerce Commission was not surprising since the Commission is a tribunal in its own right with peculiarly exclusive authority within its sphere.

The SCRAP decision does create at least a shadow of doubt as to whether the Secretary's power was undermined by NEPA. The fact, however, that it gives pause is not enough because the differences between the two conditions are marked.

The district court held that additional bases...