Park County Resource Council, Inc. v. U.S. Dept. of Agriculture

• Decision Date: 17 April 1987
• Docket Number: No. 85-2000,85-2000
• Citation: 817 F.2d 609
• Parties: , 17 Envtl. L. Rep. 20,851 PARK COUNTY RESOURCE COUNCIL, INC., et al., Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants-Appellees, and Marathon Oil Company, et al., Defendants-Intervenors/Appellees, Mountain States Legal Foundation, Amicus Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 609

817 F.2d 609

25 ERC 1932, 17 Envtl. L. Rep. 20,851

PARK COUNTY RESOURCE COUNCIL, INC., et al., Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants-Appellees and Marathon Oil Company, et al., Defendants-Intervenors/Appellees Mountain States Legal Foundation, Amicus Curiae.

No. 85-2000.

United States Court of Appeals Tenth Circuit.

April 17, 1987.

Patrick J. Marley and Marc L. Goldstein of Cole & Marley, Los Angeles, Cal. (the law firm of Spence, Moriarity & Schuster, Jackson, Wyo., and Don W. Riske, Cheyenne, Wyo., with them on the brief), for plaintiffs-appellants.

Ellen J. Durkee, Dept. of Justice, Washington, D.C. (F. Henry Habicht II, Asst. Atty. Gen.; Richard A. Stacy, U.S. Atty., for the Dist. of Wyo.; and Jacques G. Gelin, Dept. of Justice; and Marla Mansfield and William R. Murray, Jr., Office of the Solicitor, Dept. of the Interior, Washington, D.C.; and Michael J. Gippert and Pamela Piech, Office of General Counsel, Dept. of Agriculture, Washington, D.C., of counsel), for defendants-appellees.

Stanley K. Hathaway of Hathaway, Speight and Kunz, Cheyenne, Wyo. (Brent R. Kunz of Hathaway, Speight and Kunz, Cheyenne, Wyo., and Clyde O. Martz and Charles L. Kaiser of Davis, Graham & Stubbs, Denver, Colo., with him on the brief), for defendants-intervenors/appellees.

Constance E. Brooks and Matthew Y. Biscan of Mountain States Legal Foundation, Denver, Colo., for amicus curiae.

Before McKAY, SEYMOUR and TACHA, Circuit Judges.

McKAY, Circuit Judge.

Section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C. Secs. 4321-4370 (1982 & Supp. III 1985) (NEPA), requires that all federal agencies prepare a detailed environmental impact statement (EIS) "in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. Sec. 4332(2)(C). The plaintiffs in this suit contend that the Bureau of Land Management (BLM) unlawfully issued an oil and gas lease, and thereafter unlawfully approved an Application for Permit to Drill (APD) filed by the Marathon Oil Company, in contravention of both NEPA and the Endangered Species Act of 1973, 16 U.S.C. Secs. 1531-1543 (1982 & Supp. III 1985) (ESA). They appeal the district court's denial of a preliminary injunction enjoining the issuance of the permit to drill as well as its dismissal of their suit with prejudice.

I. Facts

In 1979, the Forest Service prepared an extensive environmental assessment (EA) exceeding 100 pages and addressing issuance of federal oil and gas leases in the Shoshone and other forests in the Rocky Mountain Region. Record, vol. 8, exhibit C. The EA explores various leasing alternatives, including issuance of leases without stipulations, issuance of leases with stipulations, and issuance of no leases. It examines the potential effects of each of these alternatives on energy use and conservation, on national forest administration, and, as its name indicates, on the environment. It concludes that "[o]il and gas lease issuance, as such, creates no environmental impacts. The imposition of appropriate stipulatory controls for operations subsequent to lease issuance can, in most cases, prevent or satisfactorily mitigate unacceptable environmental impacts." Id. at 14. Consequently, the Forest Service's announced preferred alternative is to recommend lease issuance with appropriate stipulations. Id. The EA specifically notes that prior to any drilling activity, the need for a site-specific, much more comprehensive EIS must be examined. Id. at app. sec. III.

On November 9, 1979, the Regional Forester issued a Finding of No Significant Impact (FONSI) with respect to lease issuance. The FONSI indicated that issuance of oil and gas leases would have no significant impact on the human environment, meaning that the preparation of an EIS pursuant to NEPA would not be necessary at this stage.

On November 5, 1980, May Petroleum, Inc., filed with BLM an oil and gas lease offer which encompassed 10,174 acres of non-wilderness, multiple-use land ¹ in the Shoshone National Forest. As is routine with such offers, BLM requested the Forest Service to advise whether the lease should issue, and, if so, to recommend appropriate stipulations to protect the environment. The Regional Forester recommended lease issuance, and BLM issued the lease on July 9, 1982, with an effective date of August 1, 1982.

The lease contained a number of provisions and stipulations providing for environmental resource and safety protections. It required the lessee to take all reasonable steps to prevent unnecessary soil erosion or timber damage, unnecessary air and water pollution, and unnecessary damage of surface improvements, fossils or artifacts and to restore the land surface to its former condition after use is terminated. Lease, section 2(q), record, vol. 6, exhibit 21, at 91; Lease, Stipulation for Lands Under Jurisdiction of Department of Agriculture, id. at 93. It also required prior approval, as well as the preparation of further EAs, before any surface-disturbing actions, such as drilling. Lease, Surface Disturbance Stipulations, id. at 93-94. Also prior to undertaking any ground disturbance activities, the lands had to be surveyed for any endangered or threatened plant or animal species, and a report thereon filed, possibly resulting in use restrictions or even complete use prohibition. Id. at 94. Finally, the lease restricted use of certain areas during specified time periods of the year for the protection of big game habitat, as well as for the preservation of the land's recreational use. Lease, Limited Surface Use Stipulation, id. at 94.

On June 21, 1983, Marathon Oil, the lessee's operator, submitted an APD in order to drill an exploratory well (North Fork Well) in the leased area. BLM announced in August of 1983 that it, in conjunction with the Forest Service, would prepare an EIS with respect to the drilling application.

The study area consisted of approximately 39,000 acres, extending well beyond the 2.5 acre well area and even the 10,000 acre lease area. The exhaustive process spanned more than a year, employed numerous environmental specialists, ² and involved both a preliminary and a final draft, the latter 160-page document incorporating considerations and suggestions received during the public comment period and from other government agencies. Pursuant to ESA, BLM also conducted a Biological Assessment which evaluated the proposed action on threatened and endangered animal species, including the grizzly bear, peregrine falcon, bald eagle, and gray wolf. In this regard, the United States Fish and Wildlife Service was consulted.

Although evaluating several alternatives, the final EIS recommended allowing the drilling of the North Fork Well, and permitting water transport to the site through a temporary pipeline, but restricting access to the drill site to helicopter access only, as opposed to temporary roads. It concluded that this proposal best permitted a valid test for oil and gas potential while minimizing adverse environmental impacts. On May 9, 1985, the BLM district manager issued a record of decision approving the APD on the condition that several additional mitigation measures to protect the environment be imposed. Record of Decision for APD, record, vol. 6, exhibit 24.

The record and briefs on appeal extensively explore the procedural adequacy of the EIS and the Biological Assessment. However, in light of our disposition of that issue, see infra section III, we need not recount such evidence here.

II. Procedural History

On May 31, 1985, plaintiffs appealed the APD approval to the Interior Board of Land Appeals (IBLA). On June 3, 1985, before IBLA rendered its decision, plaintiffs filed this action requesting an injunction prohibiting oil exploration and drilling at the North Fork Well and all future sites until the Government complied with NEPA by preparing an adequate EIS. They also challenged for the first time the underlying 1982 lease issuance and requested a declaratory judgment stating "that the issuance of a lease which may be used to drill for oil and establish a wildcat well on National Forest Service Lands constitutes a major federal action which significantly affects the quality of the human environment, and thereby requires the preparation of an EIS." Complaint, record, vol. 1, at 10. They also prayed for an order "requiring defendants to withdraw their approval on any leases or permits previously given pending their compliance with the provisions and requirements of NEPA." Id. at 11.

Thereafter, plaintiffs filed an application for a temporary restraining order and for a preliminary injunction. The district court denied the TRO after an evidentiary hearing. With the consent of all parties, the court consolidated the preliminary injunction hearing with the trial on the merits, at which eleven witnesses testified. At the conclusion of the proceedings, the court orally denied the preliminary injunction and dismissed plaintiffs' complaint with prejudice. A written opinion was issued shortly thereafter. See Park County Resource Council, Inc. v. United States Dep't of Agric., 613 F.Supp. 1182 (D.Wyo.1985).

The district court barred as untimely the claim that an EIS, rather than an EA, was required prior to the lease issuance itself, citing the ninety-day statute of limitations contained in the Mineral Lands Leasing Act, 30 U.S.C. Sec. 226-2 (1982). Alternatively, the court found the claim to be barred by the equitable defense of laches, as well as by failure to exhaust administrative remedies. In an abundance of caution, however, the court further held that even if the challenge of the FONSI with respect to the lease issuance was not barred, the claim failed on the merits.

As to the second NEPA claim regarding the APD approval, the court found that plaintiffs failed to demonstrate...