Tengasco, Inc. v. Jewell
| Decision Date | 14 July 2015 |
| Docket Number | CIVIL ACTION NO. 14-2184 SECTION "B"(2) |
| Parties | TENGASCO, INC. v. SARAH JEWELL, Secretary of the United States Department of the Interior, ET AL. |
| Court | United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana) |
Before the Court are cross-motions for summary judgment filed by Plaintiff, Tengasco, Inc. and Defendants, the United States Department of the Interior, and Bureau of Safety and Environmental Enforcement.1 The parties have filed responses and replies.2 The cross-motions, set for submission on August 5, 2015, are before the Court on the pleadings, without oral argument. After careful consideration of the cross-motions, responses, replies, competent summary judgment evidence, record, and applicable law, IT IS ORDERED that Defendants' Motion for Summary Judgment is GRANTED, Plaintiff's Motion for Summary Judgment is DENIED, and Plaintiff's suit is DISMISSED.
Plaintiff, Tengasco, Inc. ("Tengasco") challenges a civil penalty assessment levied by the Bureau of Safety andEnvironmental Enforcement ("BSEE"), and affirmed by the Interior Board of Land Appeals of the U.S. Department of the Interior ("IBLA" or "Department").3 Tengasco's claims challenge a federal agency action and are based upon the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1331, et seq., the Administrative Procedure Act (APA), 5 U.S.C. § 551, et seq., and the U.S. Constitution.4
Tengasco is the lessee and facility operator of a lease on the outer continental shelf in the Gulf of Mexico, namely, the High Island Block 176 Platform B.5 On February 23, 2011, BSEE conducted an onsite inspection of the platform facility and determined that certain prior testing records were not available at the time for review on the platform.6 These included: (1) testing records from June 9, 2010 to February 23, 2011 for the surface controlled subsurface safety valves associated with five wells on the platform; and, (2) testing records from September 1, 2010 to January 25, 2011 for other production safety devices on the platform.7
During the time period at issue, Tengasco had contracted with Rhino Offshore, Ltd., to conduct and document the requiredtesting.8 Tengasco contends that undisputed evidence in the administrative record shows that the required testing was in fact conducted.9 However, by letter dated October 26, 2011, BSEE informed Tengasco of its intention to impose 22 separate civil penalties totaling $476,000 resulting from the onsite inspection.10 BSEE divided the 22 proposed civil penalties into 8 different categories, each of which was associated with an Incident of Non-Compliance ("INC") that the BSEE field inspector had issued.
Tengasco responded by letter dated November 22, 2011, requesting a meeting to discuss the proposed civil penalties and asking for additional time to respond due to difficulties in obtaining records from Rhino Offshore.11 Tengasco filed a response and made a presentation to BSEE staff.12 Tengasco also submitted an affidavit of Randy Walker, a former Rhino employee who worked as an operator-foreman on the platform from June 1, 2010 through December 21, 2010.13 In his affidavit, Mr. Walker stated that the required safety tests were in fact conducted, that he was personally present on the platform during the tests, and that he completed and submitted the necessary forms todocument the completion of the tests.14 Attached to the affidavit were recompleted testing records for the periods at issue.15 Tengasco also submitted flight logs from two helicopter companies purportedly showing that Rhino inspectors, including Mr. Walker, made regular trips to the platform during the period June 2010 to December 2010. On February 1, 2012, BSEE issued a subpoena to Rhino for all testing records associated with the safety devices in question from June 2010 through February 2011.16 In response, Rhino submitted several documents, including a Safety Compliance Inspection Report for the Platform dated September 13, 2010.17
On July 20, 2012, the BSEE Reviewing Officer issued its decision, reducing the number of penalties, for a civil penalty assessment total of $386,000.18 Tengasco appealed BSEE's decision to the IBLA, which issued a final decision on June 23, 2014, affirming BSEE's order in full.19 Following the IBLA's affirmance of the BSEE decision, Tengasco filed this action for judicial review against defendants, Sarah Jewell, in her officialcapacity as Secretary of the U.S. Department of Interior, and Brian Salerno, in his official capacity as Director of the BSEE.20
The parties agreed that this case should be resolved by dispositive motions, and jointly proposed a "Joint Case Management Statement," providing a briefing schedule whereby the administrative record would be filed, followed by cross-motions for summary judgment, and reply briefs.21 The Joint Case Management Statement was adopted by the Court.22 Briefing is now complete and the cross-motions for summary judgment are ripe for decision.23
The Outer Continental Shelf Lands Act (OCSLA) governs federal offshore oil and gas leasing and declares as national policy that "the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public,which should be made available for expeditious and orderly development, subject to environmental safe-guards, in a manner which is consistent with the maintenance of competition and other national needs." 43 U.S.C. § 1332(3). The OCSLA further provides that, "operations in the outer Continental Shelf should be conducted in a safe manner by well-trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages...." 43 U.S.C. § 1332(6).
The OCSLA, 43 U.S.C. § 1350 provides:
Pursuant to the OCSLA, the Department of the Interior adopted safety regulations, including rules requiring installation, inspection, and testing of safety decisions on OCSLA rigs to minimize the potential for catastrophic events on the rig. 30 C.F.R. § 250.804 (). The regulations provide that safety system devices shall be successfully inspected and tested by the lessee at specified intervals. 30 C.F.R. § 250.804 (a)(1)-(12). Additionally, the . 30 C.F.R. § 250.804(b).
The Administrative Procedure Act authorizes judicial review of final agency action. 5 U.S.C. § 704; see id. § 702 ().24 Per the APA, 5 U.S.C. § 706(2)(a), federal courts are empowered to "hold unlawful and set aside agency action, findings, and conclusions" if they failto conform with any of six specified standards. 5 U.S.C. § 706(2); Marsh v. Oregon, 490 U.S. 360, 375, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). Under the APA, the administrative record is reviewed to determine whether the challenged agency action was arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law, contrary to constitutional right, in excess of statutory jurisdiction, authority or limitation, or without procedure required by law, or unsupported by substantial evidence. 5 U.S.C. § 706(2)(A-E).
Ordinarily, review of administrative decisions is to be confined to consideration of the decision of the agency...and of the evidence on which it was based. Marsh, 490 U.S. at 331; Federal Power Commission v. Transcontinental Gas Pipe Line Corp., 423 U.S. 326, 96 S.Ct. 579, 46 L.Ed.2d 533 (1976). The focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court. Marsh, 490 U.S. at 331. If the decision of the agency 'is not sustainable on the administrative record made, then the...decision must be vacated, and the matter remanded...for further consideration.' Federal Power Commission, 423 U.S. at 331.
Where the Court is reviewing the decision of an administrative agency, a motion for summary judgment stands in a somewhat unusual light, in that the administrative record provides the complete factual predicate for the Court's review. As a result, the movant's burden in prevailing on summary judgment is similar to his ultimate burden on the merits: preponderance of the evidence. See Butts v. Sec'y of Health and Human Services, 706 F.2d 107, 108 (2nd Cir. 1983). Summary judgment is an appropriate procedure for resolving a challenge to a federal agency's...
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