W. Watersheds Project v. Haaland

• Decision Date: 05 January 2022
• Docket Number: No. 20-35780,20-35780
• Citation: 22 F.4th 828
• Parties: WESTERN WATERSHEDS PROJECT; Center for Biological Diversity, Plaintiffs-Appellees, v. Deb HAALAND, Secretary of Interior; Bureau of Land Management, an agency of the United States, Defendants, State of Wyoming ; Western Energy Alliance, Intervenor-Defendants, v. Chesapeake Exploration, L.L.C., Movant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

22 F.4th 828

WESTERN WATERSHEDS PROJECT; Center for Biological Diversity, Plaintiffs-Appellees,

v.Deb HAALAND, Secretary of Interior; Bureau of Land Management, an agency of the United States, Defendants,State of Wyoming ; Western Energy Alliance, Intervenor-Defendants,

v.Chesapeake Exploration, L.L.C., Movant-Appellant.

No. 20-35780

United States Court of Appeals, Ninth Circuit.

Argued and Submitted September 28, 2021 Seattle, Washington

Filed January 5, 2022

William E. Sparks (argued), Beatty & Wozniak, P.C., Denver, Colorado, for Movant-Appellant Chesapeake Exploration, L.L.C.

Andrew R. Missel (argued), Sarah Stellberg, and Laurence ("Laird") J. Lucas, Advocates for the West, Boise, Idaho, for Plaintiffs-Appellees.

Before: Ronald M. Gould, Richard R. Clifton, and Eric D. Miller, Circuit Judges.

CLIFTON, Circuit Judge:

Western Watersheds Project and the Center for Biological Diversity brought this action against the Bureau of Land Management and the Secretary of the Interior, alleging that Defendants unlawfully issued oil and gas leases on federal land. Chesapeake Exploration, L.L.C. ("Chesapeake"), an independent producer of oil and natural gas, moved to intervene as a defendant in the case, but the District Court denied the motion.

The merits of the underlying dispute are not before us. They are the subject of a separate appeal from other orders of the District Court pending before a different panel of this court. We are concerned in this opinion only with the denial of Chesapeake's motion to intervene.

We conclude that Chesapeake was entitled to intervention as of right under Rule 24(a) of the Federal Rules of Civil Procedure. Chesapeake has a significantly protectable interest that could be impaired by the disposition of this action, its intervention motion was timely, and its interests will not be adequately represented by existing parties. We reverse and remand.

I. Background

A. The Bureau's Issuance of Oil and Gas Leases

The Bureau of Land Management (the "Bureau") is an agency within the U.S. Department of the Interior charged with stewarding federal land and its resources to "meet the present and future needs of the American people." 43 U.S.C. § 1702(c). Although the Bureau meets this obligation in part by leasing federal land for oil and gas development, see 30 U.S.C. § 226(a), it must also "take[ ] into account the long-term needs of future generations," which include "watershed, wildlife," and "natural scenic, scientific and historical values," 43 U.S.C. § 1702(c). The tension between these competing priorities provides the background for the underlying litigation.

The events underlying this dispute began over a decade ago. In 2010, the Bureau issued Instruction Memorandum ("IM") 2010-117, a policy that required the Bureau to conduct additional planning and analysis before issuing leases on certain public lands, including those that contain fisheries and wildlife habitats. This additional analysis was to be led by an "interdisciplinary team" that engaged with "the public and other stakeholders" who were potentially affected by the Bureau's leasing decisions.

Also in 2010, the U.S. Fish and Wildlife Service ("FWS") concluded that the greater sage-grouse, a bird species found throughout parts of the American West, warranted protection under the Endangered Species Act, 16 U.S.C. § 1531 et seq. See Endangered & Threatened Wildlife and Plants; 12-Month Finding on a Petition to List Greater Sage-Grouse (Centrocercus urophasiasnus ) as an Endangered or Threatened Species, 75 Fed. Reg. 13,910, 13,986 –88 (March 23, 2010). In 2015, after a multi-year planning process, the Bureau and the U.S. Forest Service amended or revised 98 "Resource Management Plans" to protect sage-grouse habitats across various Western states (the "2015 Sage-Grouse Plans"). Endangered & Threatened Wildlife and Plants; 12-Month Finding on a Petition to List Greater Sage-Grouse (Centrocercus urophasiasnus ) as an Endangered or Threatened Species, 80 Fed. Reg. 59,858 -01, 59,874, 59,935–36 (Oct. 2, 2015). These plans required the Bureau to prioritize oil and gas leasing outside sage-grouse habitats, id. at 59,876, and, in early 2016, the Bureau issued IM 2016-143 to guide enforcement of this prioritization requirement.

After the 2016 presidential election, however, the federal government's land-use priorities shifted. Under the new administration, the Bureau accelerated oil and gas leasing, including on land that contained ecologically significant habitats identified in the 2015 Sage-Grouse Plans. Of relevance here, the Bureau conducted an auction of oil and gas leases in Wyoming in March 2018. Chesapeake, the would-be intervenor in this case, was the high bidder on five leases sold at this auction, for which the company paid over $5.2 million. At another Wyoming auction held in September 2018, Chesapeake paid over $3.2 million for two additional leases. Chesapeake then began drilling wells on its leases under the relevant state and federal permits.

B. Plaintiffs Challenge Leases on Sage-Grouse Habitats

Plaintiffs-Appellees Western Watersheds Project and the Center for Biological Diversity are non-profit organizations that seek to preserve public lands, natural resources, and ecosystems across the American West. In April 2018, Plaintiffs sued the Bureau to challenge its issuance of oil and gas leases on sage-grouse habitats identified in the 2015 Sage-Grouse Plans. They also alleged that the Bureau and Interior Secretary (collectively, the "Federal Defendants") had improperly adopted several policies that undermined sage-grouse protections established under the previous administration.¹

In particular, Plaintiffs alleged that IM 2018-026, issued by the Bureau in December 2017 to replace IM 2016-143, "effectively repeal[ed]" the requirement that the Bureau prioritize oil and gas leasing outside sage-grouse habitats. The complaint asserted that the Bureau improperly issued IM 2018-026 without amending or revising its existing Resource Management Plans as required under the Federal Land Policy and Management Act of 1976 ("FLPMA"), 43 U.S.C. § 1701 et seq. , or the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq. Plaintiffs also challenged IM 2018-034, a separate instruction memorandum issued by the Bureau in January 2018. According to Plaintiffs, IM 2018-034 "overhauled" the requirements established in IM 2010-117 and directed the Bureau "to accelerate approval of oil and gas leases at the expense of conducting [a] full environmental analysis" or ensuring public involvement in the Bureau's leasing decisions. Plaintiffs alleged that the Bureau issued IM 2018-034 without complying with the requirements of NEPA or the Administrative Procedure Act ("APA"), 5 U.S.C. § 500 et seq. Finally, Plaintiffs alleged that the Bureau had improperly auctioned oil and gas leases on "hundreds of thousands of acres" that were designated for protection in the 2015 Sage-Grouse Plans without conducting the required "site-specific" environmental reviews.

In terms of relief, Plaintiffs asked the court to declare IM 2018-026 and IM 2018-034 unlawful under the FLPMA, NEPA, and the APA, and to enjoin the Federal Defendants from continuing to implement either policy. Plaintiffs also asked the court to "[r]everse, set aside, hold unlawful, and/or vacate" the Bureau's sale of various oil and gas leases in 2017 and 2018, including the five leases Chesapeake had purchased in March 2018. All told, Plaintiffs challenged over 2,200 leases covering more than 2.39 million acres across multiple states, arguing that the sales of these leases were "individually and cumulatively unlawful under [the] FLPMA, NEPA, their implementing regulations, and the APA."

After Plaintiffs filed their complaint, the Western Energy Alliance ("WEA") moved to intervene as a defendant. W. Watersheds Project v. Zinke , No. 18-CV-187, 2018 WL 3997259, at *1 (D. Idaho Aug. 21, 2018). WEA, a regional trade association representing more than 300 member companies in the oil and gas industry (including Chesapeake), argued that its members had considerable financial interests in the challenged leases. Id. at *3. The District Court granted WEA's motion along with a similar motion by the State of Wyoming. Id. at *4.

In September 2018, the District Court issued a preliminary injunction requiring the Bureau to conduct future lease sales in accordance with the procedures previously outlined in IM 2010-117 until Plaintiffs' claims could be adjudicated on the merits. W. Watersheds Project v. Zinke , 336 F. Supp. 3d 1204, 1212 (D. Idaho 2018). Shortly thereafter, Plaintiffs filed an amended complaint challenging additional oil and gas leases issued throughout the summer and fall of 2018, including those purchased by Chesapeake at the September 2018 auction. In December 2018, the District Court issued a case management order dividing the litigation into discrete phases based on specific lease sales. In "Phase One," the court agreed to consider Plaintiffs' challenge to IM 2018-034 and a subset of contested lease sales, including the two leases Chesapeake acquired in September 2018. Chesapeake's five leases from the March 2018 auction were to be considered in a subsequent phase of the litigation.

Finally, on February 27, 2020, the District Court entered partial summary judgment in Plaintiffs' favor with respect to the Phase One claims. See W. Watersheds Project v. Zinke , 441 F. Supp. 3d 1042, 1049 (D. Idaho 2020). The court held, in relevant part, that IM 2018-034 was improperly promulgated without notice-and-comment rulemaking in violation of the APA and FLPMA; that it improperly constrained public participation in the Bureau's leasing decisions in violation of the FLPMA and NEPA; and that the policy's issuance was arbitrary and capricious under the APA. See id. at 1049, 1059–75. Having found that IM 2018-034 improperly restricted public involvement in the Phase One lease sales, id. at 1075–82, the court...