Northern Plains Resource Council v. Lujan, 87-4453

• Decision Date: 09 May 1989
• Docket Number: No. 87-4453,87-4453
• Parties: 19 Envtl. L. Rep. 20,861 NORTHERN PLAINS RESOURCE COUNCIL, McCone Agricultural Protection Organization, and Montana Wildlife Federation, Plaintiffs-Appellants, v. Manuel LUJAN, Jr., * Secretary of the Interior, United States Department of the Interior, Meridian Minerals Co., Burlington Northern Inc. and Burlington Northern Railroad Co., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 661

874 F.2d 661

19 Envtl. L. Rep. 20,861

NORTHERN PLAINS RESOURCE COUNCIL, McCone Agricultural Protection Organization, and Montana Wildlife Federation, Plaintiffs-Appellants, v. Manuel LUJAN, Jr., ^* Secretary of the Interior United States Department of the Interior, Meridian Minerals Co., Burlington Northern Inc. and Burlington Northern Railroad Co., Defendants-Appellees No. 87-4453.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 9, 1989.

Decided May 9, 1989.

James A. Patten, Billings, Mont., and David C. Masselli, Arlington, Va., for plaintiffs-appellants.

Myles E. Flint, Fred R. Disheroon, Jacques B. Gelin, and Dirk D. Snel, Dept. of Justice, Washington, D.C., for defendant-appellee Secretary of the Interior.

Guy R. Martin, William A. Gould, Donald C. Baur, Perkins, Coie, Washington D.C. for defendants-appellees Burlington Northern Inc. and Burlington Northern R. Co.

Steven P. Quarles, Thomas R. Lundquist, Crowell & Moring, Washington, D.C., and Stephen H. Foster, Holland & Hart, Billings, Mont., for defendant-appellee Meridian Minerals Co.

Appeal from the United States District Court, District of Montana at Billings.

Before WRIGHT and ALARCON, Circuit Judges, and TEVRIZIAN, ^** District Judge.

TEVRIZIAN, District Judge:

I. STATEMENT OF FACTS

Appellants Northern Plains Resource Council, McCone Agricultural Protection Organization, and Montana Wildlife Federation (collectively "NPRC") appeal from the decision of the district court granting summary judgment in favor of appellees Meridian Minerals Company, Burlington Northern Inc., and Burlington Northern Railroad Company, et al. ("Companies") and Donald Hodel, Secretary of the Interior ("Interior"), and dismissing the complaint in the underlying action. The underlying action is a challenge to an exchange of fee coal interests ("exchange") between Meridian Minerals Company ("Meridian") and the United States Department of the Interior consolidating ownership in the Circle West coal deposit in McCone County, Montana. The exchange was completed in September 1983. The district court's opinion is reported at 675 F.Supp. 1231 (D.Mont.1987).

An action against the exchange was also filed by the National Coal Association and the Mining and Reclamation Council of America ("NCA/MRC"). The district court partially consolidated the two actions on the common issues regarding the legality of the exchange under Section 206 of the Federal Land Policy and Management Act of 1976 ("FLPMA") and the reasonableness of the public interest determination made by the Department of the Interior as required by the FLPMA. 675 F.Supp. at 1236. These are claims 1 through 4 of the NPRC suit (85-150-BLG-JFB) and claims 1 through 4 and 11 of the NCA/MARC suit (85-115-BLG-JFB). The unconsolidated claims 5 through 11 concern compliance with equal value, land use planning and National Environmental Policy Act of 1969 ("NEPA") requirements. This appeal is brought only as to the unconsolidated claims.

Meridian proposed the Circle West exchange in November 1981. The Bureau of Land Management ("BLM") conducted a study of the proposal and released its environmental assessment in December 1982. After requesting and considering written comments from the public, the BLM approved the exchange in May 1983. On September 8, 1983, Interior approved the BLM decision finding the fee interests appropriate for exchange under Section 206 of the FLPMA, 43 U.S.C. section 1716. This approval constituted final agency action by the Interior. 675 F.Supp. at 1234-35.

Prior to the exchange, Meridian and Interior held land and mineral interests in alternating sections in a checkerboard pattern created by the terms of 19th century land grants. Each section is too small to support an independent and economically feasible coal mining operation. The exchange consolidates one tract for Interior and one for Meridian by conveying to Interior all of Meridian's fee coal rights to the southern half of the Circle West deposit, and conveying to Meridian all of Interior's fee coal rights to the northern half of the Circle West deposit. Interior now has the consolidated southern tract for federal coal leasing, and Meridian now has the consolidated northern tract for development or leasing. 675 F.Supp. at 1235. As a result of the exchange, Interior received 11,553 acres of fee coal containing approximately 198.2 million tons of recoverable coal, and a one percent royalty on the coal produced from Meridian's post-exchange tract. Meridian received 7,887 acres of fee coal containing approximately 159.9 million tons of recoverable coal. Interior's appraisal of the exchange value showed that Interior was receiving $7.785 million in excess value (without the royalty) or $13.278 million in excess value over what it deeded to Meridian (with the royalty). 675 F.Supp. at 1235, 1245.

On appeal, appellants raise the following issues:

1. Whether Section 102(2)(C) of the NEPA requires preparation of a separate environmental impact statement on the exchange, or whether a prior draft and final environmental impact statement on federal regional coal leasing and an environmental assessment pertaining to the exchange satisfies the statutory requirement;

2. Whether the exchange complied with the "equal value" requirement of Section 206(b) of the FLPMA; and

3. Whether Interior reasonably interpreted its exchange regulations in finding that the exchange conformed with the operative federal land use plan without requiring BLM to amend the plan prior to the exchange.

II. DISCUSSION

The district court had jurisdiction pursuant to 28 U.S.C. section 1331. This court's jurisdiction rests on 28 U.S.C. section 1291. As will be explained below, neither the district court nor this court has proper jurisdiction over plaintiffs-appellants' equal value claims. Plaintiffs' appeal is timely, having been filed on December 22, 1987, within 60 days of judgment as required by Federal Rule of Appellate Procedure 4(a)(1).

A. Interior's reliance on the environmental assessment and regional coal leasing environmental impact statements

Appellants' claims on this issue involve Interior's interpretation of regulations governing the preparation of environmental impact analyses. Appellants contend that the applicable regulations require Interior to produce a separate environmental impact statement ("EIS") or to make a finding of no significant impact with regard to the exchange. Appellants argue that Interior's reliance on an environmental assessment relating to the exchange which incorporates prior environmental impact statements on the impact of federal regional coal leasing is statutorily inadequate. The district court held that Interior complied with the environmental impact regulations, Section 102(2)(C) of the NEPA, 42 U.S.C. section 4332(2)(C), and that the exchange was proper. 675 F.Supp. at 1247-49. We affirm.

As an initial matter we consider the applicable standard of review. Contrary to appellants' contention that NEPA issues are reviewed de novo, this court will only reverse a district court's finding that an environmental impact statement is adequate if the district court's decision is based upon an erroneous legal standard or upon clearly erroneous findings of fact. Stop H-3 Association v. Dole, 740 F.2d 1442, 1460-62 (9th Cir.1984), cert. denied, 471 U.S. 1108, 105 S.Ct. 2344, 85 L.Ed.2d 859 (1985). In turn, the district court reviews the adequacy of the EIS under a rule of reason: if the EIS contains a "reasonably thorough discussion of the significant aspects of the probable environmental consequences", a reviewing court may not "fly speck" an EIS and hold it insufficient on the basis of inconsequential, technical deficiencies. Oregon Environmental Council v. Kunzman, 817 F.2d 484, 492 (9th Cir.1987). Thus, the EIS review standard is limited and decidedly deferential to the agency's expertise. NRDC v. Hodel, 819 F.2d 927, 929 (9th Cir.1987). And where the review involves the interpretation of a regulation, the agency's interpretation of its own regulation is to be given controlling weight unless it is plainly erroneous or inconsistent with the regulation. Marathon Oil Co. v. United States, 807 F.2d 759, 765 (9th Cir.1986), cert. denied, 480 U.S. 940, 107 S.Ct. 1593, 94 L.Ed.2d 782 (1987).

The land and mineral interests covered by the exchange are part of the Fort Union Coal Region. This Region is one of twelve coal supply regions, and is one of the six such regions containing significant amounts of federally owned coal. In September 1981, BLM's Montana State Director issued the Fort Union Coal Region Tract Summaries, which summarized the consequences of leasing and developing federally owned coal in 24 tracts selected for further evaluation. Three of these 24 tracts are the Circle West I, II, and III tracts, which cover some but not all of the area involved in the instant Circle West exchange.

After Meridian proposed the exchange in December 1981, BLM's State Director issued a decision document in March 1982 announcing that the exchange warranted further consideration. In June 1982, BLM published its intent to pursue the exchange and to complete an environmental assessment. Fed.Reg. 24451, June 1982. In July 1982, BLM issued a comprehensive draft environmental impact statement on six alternative levels of coal leasing and development for the Fort Union Coal Region ("Fort Union DEIS"), including a specific discussion of the Circle West exchange. In September 1982, BLM issued an Air Quality Supplement, and in December 1982 BLM issued an environmental assessment ("EA"), to which appellants submitted 41 pages of comments. In February 1983 BLM issued the Fort Union Final EIS, which incorporated by reference the DEIS and the Air Quality Supplement.

In April 1983, BLM issued its "Decision Document/Lands Report" concerning the exchange. The document summarized the previous meetings, discussions and studies, and...