Solenex LLC v. Haaland
| Decision Date | 09 September 2022 |
| Docket Number | CIVIL 13-993 (RJL) |
| Parties | SOLENEX, LLC, Plaintiff v. DEB HAALAND, in her Official Capacity as Secretary of the Interior,[1] et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
September 9, 2022 [Dkts. # 156, 162, 164]
Plaintiff Solenex, LLC ("Solenex") holds a federal oil and gas lease in Montana first issued in 1982. Yet even though the responsible federal agencies first approved a proposal to initiate drilling on the land in 1985, a never-ending series of administrative reviews have precluded any activity for nearly forty years. How Kafkaesque! Finally, in 2013, Solenex brought this suit against the Secretary of the Interior, the Secretary of Agriculture, the Director of the Bureau of Land Management, the Chief of the Forest Service, and other subordinate federal officials (collectively, "federal defendants" or "the Government") to compel the Government to validate their already-approved drilling permit. In 2016, after much litigation, I ordered the Government to render a final decision on Solenex's application. Amazingly, the Government responded by cancelling the underlying lease- the validity of which was not in dispute before this litigation arose-and disapproving the permit to drill. And now, six years and a trip to our Circuit Court later, I am finally in a position to address the merits of that decision. Now before this Court are cross-motions for summary judgment by Solenex, the Government, and six non-profit organizations that have intervened as of right in this matter (collectively, "intervenors").[2] Because the Government lacked legal authority to rescind the lease and its withdrawal of the approved permit to drill was arbitrary and capricious, I will GRANT Solenex's motion for summary judgment [Dkt. # 156] DENY the Government and intervenors' motions for summary judgment [Dkts. # 164, 162] VACATE the Secretary's March 17, 2016 decision rescinding the lease and disapproving the Application for Permit to Drill, and REMAND this case to the Secretary of the Interior to reinstate the lease and previously approved Application for Permit to Drill.
The Mineral Leasing Act of 1920 ("MLA") authorizes the Secretary of the Interior (the "Secretary") to issue leases for "[a]ll lands subject to disposition under this Act which are known or believed to contain oil or gas deposits." 30 U.S.C. § 226(a). The Secretary exercises authority over those leases, and the underlying land, pursuant to the MLA, its implementing regulations, and the Secretary's inherent authority as the legal steward of public lands. Silver State Land, LLC v. Schneider, 843 F.3d 982, 986 (D.C. Cir. 2016). But that authority is not unbounded: once a lease has been issued, the MLA authorizes the Secretary to bring a civil action to cancel the lease in only three circumstances: (1) if the lease is in violation of the MLA, unless the current leaseholder is a bona fide purchaser, 30U.S.C. §§ 184(h)(1), (h)(2); (2) if the lessee has violated the statute, regulations, or terms of the lease, id. at § 188(a); or (3) on 30 days' notice, upon violations of the lease's provisions if the lease is not producing, id. at § 188(b). The Secretary has also issued regulations authorizing the administrative cancellation of (1) any lease for the lessee's failure "to comply with any of the provisions of the law, the regulations issued thereunder, or the lease," upon 30 days' notice, 43 C.F.R. § 3108.3(a), or (2) any lease that was "improperly issued," id. at § 3108.3(d). Finally, the Supreme Court has recognized that the Secretary holds "authority to cancel [a] lease administratively for invalidity at its inception." Boesche v. Udall, 373 U.S. 472, 476 (1963).
The National Environmental Policy Act ("NEPA") requires agencies to take a "hard look" at the environmental consequences of certain agency actions before taking an action that could significantly affect the environment. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (quoting Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976)). To ensure that "hard look," NEPA requires agencies to compile a detailed Environmental Impact Statement ("EIS") for those "major federal actions" that "significantly affect[ ] the quality of the human environment." Mayo v. Reynolds, 875 F.3d 11, 15 (D.C. Cir. 2017) (quoting 42 U.S.C. § 4332(2)(C)). NEPA is essentially a procedural statute and neither prohibits, nor requires, particular courses of action an agency may consider in preparing an EIS. See Vt. Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558 (1978). Nor is an EIS required for every federal action. For example, the issuance of a comprehensive EIS is unnecessary if the agency makes a finding of no significant impact on the environment after it "carefully considered the [ ] proposal, was well informed on the problems presented, identified the relevant areas of environmental concern, and weighed the likely [environmental] impacts." Cabinet Mtns. Wilderness/Scotchman's Peak Grizzly Bears v. Peterson, 685 F.2d 678, 682-83 (D.C. Cir. 1982); accord Am. Bird Conservancy v. FCC, 516 F.3d 1027,1034 (D.C. Cir. 2008) (citing Cabinet Mtns., 685 F.2d at 682). In the context of federal leases under the MLA, an EIS is only necessary "if the [agency] chooses not to retain the authority to preclude all surface disturbing activities." Sierra Club v. Peterson, 717 F.2d 1409, 1412 (D.C. Cir. 1983).
Like NEPA, the National Historic Preservation Act ("NHPA") is essentially a procedural statute. Nat'l Mining Ass'n v. Fowler, 324 F.3d 752, 755 (D.C. Cir. 2003). While it does not dictate outcomes, NEPA requires an agency to "stop, look, and listen" before undertaking a course of action. Ill. Com. Comm'n v. ICC, 848 F.2d 1246, 1261 (D.C. Cir. 1988). And just as NEPA only applies to a subset of government actions, NHPA has only ever applied to government "undertaking[s]." See 16 U.S.C. § 470f (1981); 54 U.S.C. § 306108 (2022). In 1982, NHPA defined "undertaking" as "any action as described in Section 106." 43 U.S.C. § 1601(7) (1981). Section 106, in turn, imposed requirements on the responsible federal officials "prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license." National Historic Preservation Act, Pub. L. No. 89-665, § 106, 80 Stat. 915, 917 (1966). Absent an expenditure of federal funds or the grant of a federal license, § 106 did not, and does not, apply to a project. Nat'l Mining Ass 'n, 324 F.3d at 759 (quoting Sheridan Kalorama Hist. Ass'n v. Christopher, 49 F.3d 750, 755-56 (D.C. Cir. 1995).
In cases in which it applies, NHPA requires the relevant agency to "take into account the effect of [an] undertaking on any historic property." 54 U.S.C. § 306108. To conduct a review under NHPA, the agency first identifies the relevant "Area of Potential Effects" ("APE"), defined as "the geographic area or areas within which an undertaking may directly or indirectly cause alterations in the character or use of historic properties." 36 C.F.R. § 800.16(d). The agency then determines whether the APE contains any "historic properties" that are either listed in, or eligible for, the National Register of Historic Places. Id. at § 800.4. If any such properties exist, the agency evaluates whether the proposed undertaking will cause any "adverse effects," as defined in the regulations, on that property or properties. Id. at § 800.5. If so, the agency considers whether those effects can be resolved, minimized, or otherwise mitigated. Id. at § 800.6.
As originally enacted in 1966, NHPA neither required, nor contemplated, consultation with Native American tribes. See generally National Historic Preservation Act, Pub. L. No. 89-665, 80 Stat. 915 (1966). However, Congress amended NHPA in 1980 to express a general policy that the federal government ought to coordinate with Native American tribes to accomplish the purposes of the legislation but did not require such consultation at that time. An Act to Amend the National Historic Preservation Act of 1966, Pub. L. No. 96-515, 94 Stat 2987 (1980), codified at 16 U.S.C. § 470-1 (1980). In 1992, NHPA was amended again to require consultation with tribes if an undertaking may affect property of "religious and cultural significance" to a federally recognized tribe. Reclamation Projects Authorization and Adjustment Act of 1992, Pub. L. No. 102-575, 106 Stat 4600.
Certain elements of this case's factual background have been set forth in this Court's previous opinion, see Solenex LLC v. Jewell (Solenex I), 334 F.Supp.3d 174 (D.D.C. 2018), and that of our Circuit Court, see Solenex LLC. v. Barnhardt (Solenex II), 962 F.3d 520 (D.C. Cir. 2020). Accordingly, I will limit my recitation of the facts to the issues directly relevant at hand.
In February 1981, in anticipation of the issuance of nearly 200 pending leases in the Badger Two Medicine area of the Lewis and Clark National Forest in Montana, the United States Forest Service ("Forest Service"), part of the Department of Agriculture, jointly issued a 165-page Environmental Assessment ("EA"). Env'tl Assessment, App. Vol. IV [Dkt. # 45-10] at 8 et seq. The Bureau of Land Management ("BLM"), a component of the Department of the Interior and the agency responsible for issuing the contemplated leases, cooperated in the production of the report. Id. at 11. The EA considered six alternatives, "rang[ing] from denial of all lease applications to leasing all applied for lands with appropriate stipulations to protect surface...
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