Wy Outdoor Council Powder River v. U.S. Army Corps

• Decision Date: 07 January 2005
• Docket Number: No. 02-CV-155-D.,02-CV-155-D.
• Citation: 351 F.Supp.2d 1232
• Parties: WYOMING OUTDOOR COUNCIL, POWDER RIVER BASIN RESOURCES COUNCIL, Biodiversity Associates, and Jerry Freilich, Petitioners, v. UNITED STATES ARMY CORPS OF ENGINEERS, Respondent, and Petroleum Association of Wyoming, Intervenor.
• Court: U.S. District Court — District of Wyoming

351 F.Supp.2d 1232

WYOMING OUTDOOR COUNCIL, POWDER RIVER BASIN RESOURCES COUNCIL, Biodiversity Associates, and Jerry Freilich, Petitioners, v. UNITED STATES ARMY CORPS OF ENGINEERS, Respondent, and Petroleum Association of Wyoming, Intervenor.

No. 02-CV-155-D.

United States District Court, D. Wyoming.

January 7, 2005.

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James B Dougherty, Washington, DC, McCrystie Adams, Earthjustice Legal Defense Fund, Neil Levine, Earthjustice,

Denver, CO, Steve Jones, Wyoming Outdoor Council, Lander, for Plaintiffs.

Carol A Statkus, U.S. Attorney's Office, Cheyenne, Caroline Meredith Blanco, Department of Justice, Environment & Natural Resources Division, Washington, DC, David A Carson, Department of Justice, Denver, CO, Eileen T McDonough, Department of Justice, Environmental Defense Section, Washington, DC, Lori L Caramanian, Department of Justice, Denver, CO, Thomas A Nicholas, III, Hirst & Applegate, Cheyenne, Zach C Miller, Davis Graham & Stubbs, Denver, CO, for Defendants.

ORDER ON PETITION FOR REVIEW OF AGENCY ACTION

DOWNES, District Judge.

This matter comes before the Court on Wyoming Outdoor Council, Powder River Basin Resource Council, and Biodiversity Conservation Alliance's Petition for Review of Agency Action. The Court having reviewed and carefully considered the extensive materials submitted in support and opposition, having heard oral argument, and being otherwise fully advised, FINDS and ORDERS as follows:

BACKGROUND

Petitioners Wyoming Outdoor Council, Powder River Basin Resource Council, and Biodiversity Conservation Alliance (collectively referred to as "WOC") challenge the decision of the U.S. Army Corps of Engineers ("Corps") to issue General Permit 98-08 ("GP 98-08"), a permit issued under the Clean Water Act ("CWA"), 33 U.S.C. § 1344(e). GP 98-08 was issued in large part to address the growing need for permits to discharge dredge and fill materials associated with the boom in development of coalbed methane gas ("CBM") in the Powder River Basin of Wyoming. The production of CBM necessarily requires that large amounts of subsurface water be released on to the surface. The quality of the released water varies depending on location and the effects of the released water on the environment are hotly contested. In many cases, the water is stored in containment ponds on the surface. One of the most controversial uses of GP 98-08 is to permit the release of dredge and fill material for the formation of reservoirs to contain the released CBM water.

GP 98-08 was issued on June 20, 2000, along with a Combined Decision Document ("CDD") that purports to comply with requirements under both the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4331 et seq., and the CWA, 33 U.S.C. § 1344(e), for issuance of general permits. GP 98-08 authorizes discharge of dredge and fill materials associated with several activities related to oil and gas development in the State of Wyoming, including surveys, roads, well pads, utilities, reservoirs, erosion control, hazardous waste cleanup, and mitigation. GP 98-08, Appx. A, A.R. 573-74. No activity can fill more than .30 acre of wetlands and any activity exceeding this maximum must receive an individual permit. Id. Several conditions are attached to the application of GP 98-08. GP 98-08, Appx. B, A.R. 575-77 ("Special Conditions"). The permittee must comply with the Wyoming Department of Environmental Quality's water quality certification pursuant to § 401 of the CWA. A.R. 575. To address impacts to threatened and endangered species, notice must be given to the Corps before activity can be undertaken on non-federal lands with non-federal minerals in certain geographical locations. A.R. 577. Wetland mitigation is also required. Temporarily filled wetlands must be restored and permanent fills of more than .25 acre must be replaced at a 1:1 ratio. A.R. 576.

GP 98-08 permits dredge and fill activities on any land in Wyoming if the permit specifications are met. However, the role of the Corps with respect to different types of land across the state varies. For dredge and fill on land where the surface and minerals are privately owned, the Corps is the only permitting authority and administers GP 98-08. On federal public lands, the Bureau of Land Management ("BLM") is the permitting authority that generally regulates oil and gas development and grants applications for permits to drill. 43 C.F.R., pt 23; 43 C.F.R. § 3162.3-1. In conjunction with any application for a permit to drill, an oil and gas developer must submit to the BLM a surface use plan. 43 C.F.R. § 3162.3-1. The surface use plan will be reviewed by the BLM if development is proposed on BLM land or by the United States Forest Service ("USFS") if development is proposed in a National Forest. Id.; 36 CFR § 228.106(a). The surface management agency, whether it be BLM or USFS, administers the use of GP 98-08 in conjunction with approval of surface use plans when the plan proposes discharge of dredge and fill material into waters of the United States on federal lands. As such, after issuing GP 98-08, the Corps' generally administers the application of GP 98-08 only on private land.

WOC presents two basic issues in its Petition for Review: (1) whether the Corps violated NEPA, 42 U.S.C. § 4332, by failing to consider cumulative impacts to non-wetland resources, impacts to water quality, impacts to private ranchlands, impacts to threatened and endangered species, and impacts to wetlands, while relying on unsupported mitigation measures to support a finding of no significant impact and issuance of an Environmental Assessment ("EA"); and (2) whether the Corps violated the CWA, 33 U.S.C. § 1344(e), and its implementing regulations, 40 C.F.R. § 230.7, by failing to support its findings that the impacts of GP 98-08 would be cumulatively minimal and that the activities permitted would be both similar in nature and similar in impact.

The Court finds that the Corps violated NEPA by failing to consider the cumulative impacts of GP 98-08. The fact that cumulative impacts were not discussed in relation to any resource other than wetlands, necessitates the Court's conclusion that the Corps could not have found the cumulative effects of GP 98-08 to be minimal in order to comply with the CWA. The Corps also failed to sufficiently consider the potential impacts to ranchlands held by private surface owners with no rights to the minerals. Finally, the Court holds that the Corps' reliance on mitigation measures that were unsupported by any evidence in the record cannot be given deference under NEPA. The Court remands to the Corps for further findings on cumulative impacts, impacts to ranchlands, and the efficacy of mitigation measures.

STANDARD OF REVIEW

A federal agency's compliance with NEPA and the CWA is subject to review under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq. Review of agency action in this Court is treated as an appeal. 5 U.S.C. § 706; Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1580 (10th Cir.1994). The Court must set aside agency action that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Greater Yellowstone Coalition v. Flowers, 359 F.3d 1257, 1274 (10th Cir.2004). "[T]he scope of review under the `arbitrary and capricious' standard is narrow, but not without dimension." Olenhouse, 42 F.3d at 1576. The Court is first required to "review the [agency's] decisionmaking process and determine whether the [agency] examined all relevant data and articulated a satisfactory explanation for its action, including a rational connection between the facts found and the choice made." Id. (citing Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). The Court must decide whether the agency made a "clear error in judgment." Id. at 1574. Agency action will be set aside

if the agency relied on factors which Congress has not intended for it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Id. (quoting Motor Vehicle Mfrs., 463 U.S. at 43, 103 S.Ct. 2856.)

The Court is also charged under an arbitrary and capricious standard with a plenary review of the record as it existed before the agency to determine "whether the agency's action was supported by substantial evidence." Id. at 1576. "Substantial evidence" is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Pennaco Energy, Inc. v. U.S. Dept. of Interior, 377 F.3d 1147, 1156 (10th Cir.2004) (quoting Doyal v. Barnhart, 331 F.3d 758, 760 (10th Cir.2003)). "This is something more than a scintilla but something less than the weight of the evidence. Evidence is generally substantial under the APA if it is enough to justify, if the trial were to a jury, refusal to direct a verdict on a factual conclusion." Id. (citations and quotations omitted). If the agency's findings of fact are supported by substantial evidence, they are conclusive. Custer County Action Ass'n. v. Garvey, 256 F.3d 1024, 1030 (10th Cir.2001). "The substantial-evidence standard does not allow [the court] to displace the [agency's] choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo." Id. (citations and quotations omitted).

Although the arbitrary and capricious standard is "searching and careful," ultimately, the standard of review "is a narrow one." Id. (quoting Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 378, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989)). "[A]dministrative determinations can...