Tinoqui-Chalola Council v. US Dept of Energy, TINOQUI-CHALOLA

• Decision Date: 20 November 2000
• Docket Number: D,No. 1,No. 99-16384,CV-98-05100-OWW,TINOQUI-CHALOLA,1,99-16384
• Citation: 232 F.3d 1300
• Parties: (9th Cir. 2000) COUNCIL OF KITANEMUK AND YOWLUMNE TEJON INDIANS, Plaintiff, and SOUTHWEST CENTERFOR BIOLOGICAL DIVERSITY; SIERRA CLUB, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF ENERGY, FREDERICO PENA, in his Official Capacity as the Secretary D.C. No. of the Department of Energy;PATRICIA GODLEY, in her Official Capacity as Secretary for Fossil OPINION Energy; R. DOBIE LANGENKAMP, in his Official Capacity as Deputy Assistant Secretary for Naval Petroleum and Oil Shale Reserves; ANTHONY J. COMO, in his Official Capacity as Divestiture Administrator for Naval Petroleum Reserveefendants-Appellees, and OCCIDENTAL OF ELK HILLS, INC., Defendant-Intervenor-Appellee
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1300

232 F.3d 1300 (9th Cir. 2000)

TINOQUI-CHALOLA COUNCIL OF KITANEMUK AND YOWLUMNE TEJON INDIANS, Plaintiff, and SOUTHWEST CENTERFOR BIOLOGICAL DIVERSITY; SIERRA CLUB, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF ENERGY, FREDERICO PENA, in his Official Capacity as the Secretary D.C. No. of the Department of Energy; CV-98-05100-OWW PATRICIA GODLEY, in her Official Capacity as Secretary for Fossil OPINION Energy; R. DOBIE LANGENKAMP, in his Official Capacity as Deputy Assistant Secretary for Naval Petroleum and Oil Shale Reserves; ANTHONY J. COMO, in his Official Capacity as Divestiture Administrator for Naval Petroleum Reserve No. 1, Defendants-Appellees, and OCCIDENTAL OF ELK HILLS, INC., Defendant-Intervenor-Appellee.

No. 99-16384

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted October 2, 2000

Filed November 20, 2000

COUNSEL

Daniel J. Rohlf, Portland, Oregon, for the plaintiffs-appellants. Greer S. Goldman and Ethan G. Shenkman, United States Department of Justice, Environment and Natural Resources Division, Washington, D.C., for the defendants-appellees. Robert K. Break, Latham & Watkins, Costa Mesa, California, for the defendant-intervenor-appellee.

Appeal from the United States District Court.for the Eastern District of California Oliver W. Wanger, District Judge, Presiding

Before: Dorothy W. Nelson, David R. Thompson, and Stephen S. Trott, Circuit Judges.

THOMPSON, Circuit Judge:

The Southwest Center for Biological Diversity and the Sierra Club (collectively "Southwest") challenge the legality of the Department of Energy's ("DOE") sale of Elk Hills to Occidental Petroleum ("Occidental"). Southwest contends the.DOE violated section 7 of the Endangered Species Act ("ESA"), 16 U.S.C. § 1531 et seq. , by refusing to engage in consultation with the Fish & Wildlife Service ("FWS") prior to completing the sale of Elk Hills and by failing to ensure that the sale would not jeopardize the continued existence of threatened and endangered species. In granting summary judgment in favor of the DOE and Occidental, the district court determined that the completed sale of Elk Hills mooted the controversy. Alternatively, the district court determined that the DOE did not violate section 7 of the ESA.

We have jurisdiction under 28 U.S.C. § 1291 (1994). We conclude that the completion of the Elk Hills sale did not moot the controversy between the parties. We further con-clude that Congress waived section 7's consultation require-ment as to the DOE's sale of Elk Hills. See National Defense Authorization Act of 1996, Pub. L. No. 104-106, 110 Stat. 631 (1997). Accordingly, we affirm the district court's sum-mary judgment by which it concluded that the DOE did not violate section 7 of the ESA.

FACTS

Elk Hills, which is also referred to as National Petroleum Reserve -1 ("NPR-1") is a tract of approximately 47,000 acres of land located twenty-five miles south of Bakersfield, Cali-fornia. It is known to contain at least four endangered species and one endangered plant, and is the seventh largest oil field in the United States. As far back as 1976, Congress directed the Secretary of Energy to explore and develop Elk Hills at the maximum efficient rate of production.¹ See Naval Petro-leum Reserves Production Act of 1976, 10 U.S.C.§ 7422(c) (1998). Pursuant to that direction and consistent with section 7 of the ESA, the DOE has consulted with the FWS three times since it took over operations at Elk Hills. These consul-tations have enabled the FWS to evaluate the impact on pro-tected species of the DOE's operation at Elk Hills and to suggest ways to minimize "incidental" takings of these spe-cies.

After the most recent consultation, the FWS issued a Bio-logical Opinion letter dated November 8, 1995. The FWS concluded that continuing oil and gas development of Elk Hills at the maximum efficient rate would not likely jeopar-.dize the continued existence of listed species if the DOE agreed to various mitigation measures. The DOE agreed to these measures, and they became part of the incidental take statement issued by the FWS.² That statement authorized the DOE to incidentally kill or harm a specified number of listed species and adversely affect a specified amount of habitat. To ensure compliance with the "Terms and Conditions " of the incidental take statement, Section 3(a) provides:

Prior to the sale of NPR-1, the Department shall initiate and complete a subsequent section 7 consultation as to this Federal action; and the reasonable and prudent measures and terms and conditions shall be adhered to by the subsequent owner until a sec-tion 10(a)(1)(B) permit and CDFG 2081 permit are issued for their actions. In addition, as part of the subsequent section 7 consultation, the Department shall enter into a Conservation Agreement with the Service if the conservation area has not been estab-lished.

On February 10, 1996, Congress passed the National Defense Authorization Act of 1996 ("DAA"), which directed the DOE to sell Elk Hills within two years of the statute's effective date. See National Defense Authorization Act of 1996, Pub. L. No. 104-106, § 3412(a), 110 Stat. 631, 631-32 (1997). Section 3413(d) of the DAA granted special permis-sion for the DOE to transfer the incidental take statement in place on the statute's effective date if the DOE determined such a transfer was necessary to expedite the sale in a manner.that maximized the sale's value to the United States. The transferred statement would "cover the identical activities, and . . . be subject to the same terms and conditions, as apply to the permit at the time of the transfer." Id. at § 3413(d), 110 Stat. 631, 635.³

A few months later, the FWS informed the DOE that both section 7 of the ESA and the incidental take statement required the DOE to reinitiate consultation regarding the pro-posed sale of Elk Hills. The DOE declined to reinitiate con-sultation, relying in part on the Department of Interior Regional Solicitor's opinion that the DAA obviated the DOE's consultation obligations relating to the Elk Hills sale.

In October 1997, the DOE accepted a purchase offer from Occidental, which agreed to accept a transfer of the 1995 bio-logical opinion and incidental take statement. Occidental also acknowledged that the incidental take statement's authoriza-tion applied only to the extent Occidental acted as contem-plated in the biological opinion. The sale of Elk Hills to Occidental closed February 5, 1998.

Prior to the closing of the sale, Southwest and other plain-tiffs filed suit against the DOE and sought a preliminary injunction to stop the sale. Occidental intervened. The district court denied the injunction, and this court denied the plain-tiffs' request for an emergency stay during the pendency of the appeal. That appeal was later dismissed as moot.

The district court subsequently granted Occidental's motion for summary judgment. The district court held that the com-pletion of the Elk Hills sale mooted the plaintiffs' claims. Alternatively, the district court determined that the DOE had not violated its substantive or procedural duties under section 7 of the ESA. This appeal of the district court's summary judgment followed.

ANALYSIS

I.

Occidental contends the completion of the Elk Hills sale rendered the plaintiffs' complaint moot. Mootness, a question of law, is reviewed de novo. See Alaska Ctr. for the Env't v. United States Forest Serv., 189 F.3d 851, 854 (9th Cir. 1999). "Generally, an action is mooted when the issues presented are no longer live and therefore the parties lack a legally cogniza-ble interest for which the courts can grant a remedy." Id. The party asserting mootness has the heavy burden of establishing that there is no effective relief remaining for a court to pro-vide. See GATX/Airlog Co. v. United States Dist. Ct for the N. Dist. of Cal., 192 F.3d 1304, 1306 (9th Cir. 1999). Occi-dental has failed to carry this heavy burden.

Generally, the mere conveyance of property to another does not moot a dispute regarding the legality of the convey-ance. See Muckleshoot Indian Tribe v. United States Forest Serv., 177 F.3d 800, 815 (9th Cir. 1999). In Muckleshoot, the Forest Service entered into a land exchange agreement with Weyerhaeuser, a private corporation. Before the agreement was finalized, an Indian tribe filed suit against the Forest Ser-vice, asserting claims under various environmental statutes. The district court denied the plaintiff's claims, and the plain-tiff failed to seek a stay of the order pending appeal. On appeal, Weyerhaeuser argued the dispute was moot because the land exchange, which involved the transfer of patents and deeds, had been completed; it had obtained a state logging permit; and it had already logged approximately ten percent of the land acquired through the exchange. See id. at 814-15. We concluded that the evidence established only that the property transfer had occurred, which was insufficient to establish mootness. Id. at 815. We explained"[t]he fact that Weyerhaeuser may have `destroyed' a portion of the land does not alter the ability of the government to accept a reas-signment of the property, if required." Id . (emphasis added).

In this case, Occidental argues the appeal is moot because the status quo cannot be restored. Occidental contends that the DOE lacks the practical means to resume oil and gas opera-tions at Elk Hills if the sale were rescinded because govern-ment, contractor and subcontractor personnel have been replaced by Occidental's employees. Many of these employ-ees have been transferred to Elk Hills from facilities outside California. Moreover, in reliance on the sale, Occidental has executed contracts with more than one hundred suppliers and purchasers. Additionally, if the court were to order rescission,.the DOE would have to return the $3.5 billion purchase price and reinitiate bidding for a contractor who could resume oper-ations at...