National Wildlife Federation v. Burford

Decision Date03 September 1985
Docket NumberNo. CV-82-117-BLG.,CV-82-117-BLG.
Citation677 F. Supp. 1445
PartiesNATIONAL WILDLIFE FEDERATION, Northern Plains Resource Council, Montana Wildlife Federation, and Powder River Basin Resource Council, Plaintiffs, v. Robert BURFORD, Director, Bureau of Land Management, Department of the Interior; Donald P. Hodel, Secretary of the Interior, Department of the Interior; and U.S. Department of the Interior, Defendants, and State of Wyoming; Shell Oil Company; and Meadowlark Farms, Inc., Intervenors-Defendants.
CourtU.S. District Court — District of Montana

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James A. Patten, Patten & Renz, Billings, Mont., Thomas M. France, Natural Resource Clinic, Missoula, Mont., Frances M. Green, National Wildlife Federation, Boulder, Colo., Norman L. Dean, National Wildlife Federation, Washington, D.C., for plaintiffs.

Allen McKenzie, Asst. U.S. Atty., Butte, Mont., William M. Cohen, Michael Reed, Dept. of Justice, Land and Natural Resources Div., Washington, D.C., for defendants.

Eugene Gulland, Covington & Burling, Washington, D.C., R.H. Bellingham, Moulton Law Firm, Billings, Mont., for Shell Oil Co.

Richard M. Hall, Washington, D.C., Bruce Toole, Billings, Mont., Steven P. Quarles, Washington, D.C., for State of Wyo.

Christopher Lane, Harold G. Morris, Jr., Sherman & Howard, Denver, Colo., John Ross, Anderson Law Firm, Billings, Mont., for Meadowlark Farms, Inc.

MEMORANDUM OPINION

BATTIN, Chief Judge.

Plaintiffs, National Wildlife Federation (NWF), Northern Plains Resource Council, Montana Wildlife Federation, and Powder River Basin Resource Council, seek judicial review of final decisions made by the Secretary of the Interior regarding the sale of coal leases in the Powder River coal region located in southeastern Montana and northern Wyoming. In their amended complaint plaintiffs request declaratory and injunctive relief on the basis of the following five counts which allege violations of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. § 1201 et seq., the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. § 1701 et seq., and the Mineral Lands Leasing Act as amended by the Federal Coal Leasing Amendments Act of 1976 (FCLAA), 30 U.S.C. § 181 et seq.:

I. The high bids for the lease tracts do not constitute fair market value;
II. The comprehensive land use plans upon which the sale was based were inadequate because they did not consider a range of resource values in accordance with the principles of multiple use and sustained yield, and they failed to consider important resource values other than coal for private or state owned lands overlying the federal coal.
III. The sale was not compatible with the comprehensive land use plans;
IV. The Secretary failed to review lands for reclamation potential; and
V. The sale of the Cook Mountain and Rocky Butte Tracts was unlawful because the federal defendants changed the bidding procedures applicable to tracts with non-transferable surface owner consents without complying with the rule making provisions of the Administrative Procedure Act.

The federal defendants and the intervening defendants Shell Oil Company and Meadowlark Farms, Inc., move for judgment on all five counts. Plaintiffs move for summary judgment on Counts III, IV, and V only. Also pending before the Court are defendants' motion to dismiss for lack of standing to litigate Counts I and V and various motions relating to discovery. These motions will be addressed in the course of deciding the summary judgment motions.

FACTUAL AND PROCEDURAL BACKGROUND

In the late 1970's, after nearly a decade of virtual moratorium on federal coal leasing, the Department of the Interior created the Federal Coal Management Program and proposed to lease portions of the extensive federal coal holdings. On April 28, 1982, the Department held the first of a series of lease sales of tracts situated within the Powder River coal region. The Department made available for leasing in this first sale the largest amount of coal ever offered by the government in a single lease sale.

The April sale was preceded by several years of planning under the guidance of Federal Coal Management Program regulations. 43 C.F.R. § 3400 et seq. (1981). These regulations implement the various requirements of several statutory schemes, including FLPMA, SMCRA, and FCLAA, and separate the procedure for leasing and development of federal coal into four somewhat discrete steps: land use planning, activity planning, coal lease sales, and mining. The five counts in plaintiffs' amended complaint focus on the land use planning phase and on the procedure in the lease sale phase for postsale evaluation of high bids to determine if they constitute fair market value and should be accepted.

The goal of land use planning is to identify, out of millions of acres of federal lands, those areas entitled to further consideration for coal leasing. The working document in the land use planning phase for Bureau of Land Management (BLM) lands is the management framework plan (MFP). MFP's were prepared for BLM lands prior to the passage of FLPMA in 1976. The MFP's prepared under pre-FLPMA guidelines will eventually be replaced by more comprehensive "resource management plans" pursuant to § 202 of FLPMA, 43 U.S.C. § 1712. The MFP's make general land use allocations and provide the BLM with a data base from which specific land use decisions may be made. They are the result of cumulated data and analyses prepared by various environmental specialists. The specialists prepare a set of recommendations for a particular resource and then conflicts between multiple resources are balanced and resolved and the matter is incorporated into the MFP.

Four separate MFP's—three in Montana and one in Wyoming — are pertinent to the tracts offered for lease sale in 1982. The Montana tracts are within areas covered by the 1974 Decker-Birney MFP, the 1975 South Rosebud MFP, and the 1975 Coalwood MFP. The Eastern Powder River Basin MFP, completed in 1977, forms the land use planning basis for the Wyoming tracts.

The adoption, on July 19, 1979, of the regulations implementing the Federal Coal Management Program necessitated changes in the MFP's. As described in greater detail in succeeding sections, the MFP's were supplemented to reflect consultation with affected surface owners and application of criteria to identify lands unsuitable for surface mining as mandated by SMCRA. See 30 U.S.C. §§ 1272, 1304(d). Department efforts to amend the Montana MFP's resulted in publication of the July 1979 Powder River Resource Area Management Framework Plan Update Report and a supplement to that report in June 1980. In Wyoming, the state BLM office reviewed two areas within the Eastern Powder River Planning Unit and supplemented the MFP accordingly. A supplement was issued for the Highlight Review Area in March 1980, and the MFP was amended for the Gillette Review Area in June 1980. The MFP's and the various updates and supplements comprised the comprehensive land use plan which provided the basis for activity planning.

Activity planning in the Powder River Basin commenced in April 1980. A regional production goal and leasing target were set, lease tracts were delineated, and an Environmental Impact Statement (EIS) was prepared to address the environmental impacts of developing those tracts. In 1982, the Powder River Regional Coal Team recommended that 13 coal tracts in both Montana and Wyoming be offered in the first sale. As the notice of sale reflects, the Secretary decided to offer 15 tracts containing nearly 2.24 billion tons of coal by single tract competitive bidding and four additional Montana tracts by intertract bidding procedures.1 Subsequently, six tracts were withdrawn from the sale, five for lack of evidence of surface owner consent and one because of discrepancies in estimated tonnage. Three of the four tracts to be sold by intertract bidding procedures were withdrawn so the Department decided to offer the remaining tract, Cook Mountain, by single competitive bid.

Bids were received on 11 tracts in Montana and Wyoming containing approximately 1.53 billion tons of recoverable coal reserves. After post sale evaluation to determine whether the bids received constituted fair market value, see 43 C.F.R. § 3422.3-4, and whether issuance of a lease to a specific bidder would meet antitrust constraints, nine leases were issued. A tenth lease was issued for the Coal Creek Small Business Set-Aside Tract after review of the lessees' qualifications by the Small Business Administration. The high bid was refused on the 11th tract, Rocky Butte, for failure to meet fair market value. The Rocky Butte tract was offered again along with the Fortin Draw Tract, one of the tracts withdrawn from the April sale, on October 15, 1982. Postsale evaluation of the high bids received for these two tracts utilized new interim procedures published by the Minerals Management Service on September 13, 1982. See 47 Fed.Reg. 40243 (1982). The bids were accepted, and these two leases were issued.2

The 1982 Powder River coal lease sale has been the subject of a previous opinion by this Court. In Northern Cheyenne Tribe v. Hodel, CV-82-116-BLG (D.Mont., May 28, 1985), the Court addressed and agreed with allegations made by the Northern Cheyenne Tribe that the sale of lease tracts in Montana violated federal law which required the Department to identify, consider and, if possible, mitigate the social, economic, and cultural impacts upon the Tribe resulting from the development of these federal coal leases. The Court issued an order addressed only at the Montana tracts which required the Secretary to void the sale, refrain from issuing leases, and rescind any leases that have been issued.

The present lawsuit was filed by plaintiffs one day prior to the sale, on April 27, 1982, in the United States District...

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