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Alaska Wilderness League v. Jewell

United States Court of Appeals, Ninth Circuit

June 11, 2015

ALASKA WILDERNESS LEAGUE; CENTER FOR BIOLOGICAL DIVERSITY, INC.; GREENPEACE, INC.; NATIONAL AUDOBON SOCIETY, INC.; NATURAL RESOURCES DEFENSE COUNCIL, INC.; OCEAN CONSERVANCY, INC.; OCEANA, INC.; PACIFIC ENVIRONMENT AND RESOURCES CENTER; REDOIL, INC.; SIERRA CLUB, Plaintiffs-Appellants,
v.
SALLY JEWELL, Secretary of the Interior; BRIAN SALERNO, Director of Bureau of Safety and Environmental Enforcement; MARK FESMIRE, Regional Director of Bureau of Safety and Environmental Enforcement, Alaska Region, Defendants-Appellees, SHELL GULF OF MEXICO INC.; SHELL OFFSHORE INC., Intervenor-Defendants--Appellees

Argued and Submitted, Anchorage, Alaska August 13, 2014.

Page 1213

Appeal from the United States District Court for the District of Alaska. D.C. Nos. 3:12-cv-00048-RRB, 1:12-cv-00010-RRB. Ralph R. Beistline, Chief District Judge, Presiding.

SUMMARY[*]

Environmental Law

The panel affirmed the district court's summary judgment in favor of federal defendants and Shell Gulf of Mexico, Inc. and Shell Offshore Inc. in an action brought by environmental groups alleging that the Bureau of Safety and Environmental Enforcement acted unlawfully in approving two of Shell's oil spill response plans for its oil leases in the Beaufort and Chukchi Seas on Alaska's Arctic coast.

The panel held that the Bureau's approval of Shell's oil spill response plans was not arbitrary, capricious, or otherwise not in accordance with law under the Administrative Procedures Act.

Concerning the plaintiffs' contention that the Bureau should have engaged in Endangered Species Act consultation before approving the plans, the panel applied Chevron analysis to the Clean Water Act provisions. At Chevron Step One, the panel held that the relevant portions of the Clean Water Act were ambiguous; and at Chevron Step Two, the panel held that the Bureau's interpretation of the provisions was reasonable. The Bureau interpreted the provisions to conclude that Congress limited the Bureau's discretion to only reviewing an oil spill response plan to determine if it met the six enumerated requirements of 33 U.S.C. § 1321(j)(5)(D), and the implementing regulations. According deference to the Bureau's interpretation of the Clean Water Act and its own regulations, the panel held that the Bureau lacked discretion to deny approval once it determined that the oil spill response plans satisfied the statutory requirements. The panel concluded that the Bureau's approval of the plans was a nondiscretionary act that did not trigger a requirement for interagency consultation under the Endangered Species Act.

The panel rejected plaintiffs' contention that the Bureau violated the National Environmental Policy Act by failing to prepare an Environmental Impact Statement before approving the plans. The panel held that the Bureau reasonably concluded that it must approve any plan that met the statutory requirements of the Clean Water Act. The panel concluded that the Bureau's approval of Shell's plans was not subject to the requirements of the National Environmental Policy Act.

Judge D.W. Nelson dissented. Judge Nelson concurred with the majority that the Bureau did not act in an arbitrary or capricious manner in approving the plans, but dissented from the remainder of the majority opinion. Judge Nelson would hold that the Bureau was required to engage in Endangered Species Act consultation, and conduct analysis pursuant to the National Environmental Policy Act, and she would reverse the summary judgment accordingly.

Holly A. Harris (argued), Brettny E. Hardy, and Eric P. Jorgensen, Earthjustice, Juneau, Alaska, for Plaintiffs-Appellants.

Maggie B. Smith (argued), Attorney; Robert G. Dreher, Acting Assistant Attorney General, and David B. Glazer, Bridget Kennedy McNeil, Kent E. Hanson, and David C. Shilton, Attorneys, United States Department of Justice, Environment and Natural Resources Division, Washington, D.C.; Sarah Doverpike, Office of the Solicitor, Department of the Interior, Washington, D.C., for Defendants-Appellees Sally Jewell, Brian Salerno, and Mark Fesmire.

Kathleen Sullivan (argued), William B. Adams, and David S. Mader, Quinn Emmanuel Urquhart & Sullivan LLP, New York, New York; Kyle W. Parker, Crowell & Moring LLP, Anchorage, Alaska, for Intervenors-Defendants--Appellees.

Before: Jerome Farris, Dorothy W. Nelson, and Jacqueline H. Nguyen, Circuit Judges. Opinion by Judge Nguyen; Dissent by Judge D.W. Nelson.

OPINION

Page 1214

NGUYEN, Circuit Judge:

Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively " Shell" ) for many years have sought to develop offshore oil and gas resources in the remote Beaufort and Chukchi seas on Alaska's Arctic coast. Shell secured leases for the Beaufort Sea in 2005 and 2007, and the Chukchi Sea in 2008, but its exploration efforts have been waylaid by a variety of legal, logistical, and environmental problems, including multiple lawsuits,[1] the wreck of one of its drill rigs,[2] and the temporary suspension of drilling activities in the Arctic after the Deepwater Horizon Spill.[3] We review here another challenge, a claim by a coalition of environmental groups that the Bureau of Safety and Environmental Enforcement (" BSEE" ) acted unlawfully in approving two of Shell's oil spill response plans (" OSRPs" ). The district court granted summary judgment in favor of the federal defendants and intervenor-defendant Shell. We affirm.

BACKGROUND

I.

The Statutory Schemes

We begin with an overview of the complex statutory backdrop to BSEE's approval of the OSRPs in this case.

The Outer Continental Shelf Lands Act (" OCSLA" ), 43 U.S.C. § 1331 et seq., establishes

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a four-stage process for the exploration and development of offshore oil and gas resources. First, the Secretary of the Interior prepares and maintains a five-year oil and gas leasing program. 43 U.S.C. § 1344(a). Second, the Secretary may grant oil and gas leases for submerged lands in the outer continental shelf at a lease sale, subject to certain terms and provisions. See id. § 1337(a)--(b). Third, a lessee must " submit an exploration plan to the Secretary for approval," id. § 1340(c)(1), accompanied by an Oil Spill Response Plan required under the Clean Water Act, see 30 C.F.R. § 550.219 (the approval of which is at issue in this case). In the fourth and final phase, if exploration reveals oil or gas, a lessee must then submit " a development and production plan" for the Secretary's approval. 43 U.S.C. § 1351(a)(1). Each stage triggers certain environmental analysis, and the Bureau of Ocean Energy Management (" BOEM" ) is responsible for managing the process, including the necessary environmental reviews. See Native Vill. of Point Hope v. Salazar, 680 F.3d 1123, 1128 (9th Cir. 2012).

While OCSLA governs the development of oil and gas resources, the Clean Water Act provides a framework for preventing and responding to potential oil spills. See 33 U.S.C. § 1321(b). The Clean Water Act mandates oil spill contingency planning at four levels: the national, regional, and area levels, and, lastly, at the level of individual owners and operators of offshore oil facilities. First, at the national level, the President prepares a National Contingency Plan that sets forth " efficient, coordinated, and effective action to minimize damage from oil and hazardous substance discharges." Id. § 1321(d)(2). Second, Regional Response Teams, co-chaired by the Environmental Protection Agency and the Coast Guard, prepare Regional Contingency Plans that coordinate " planning, preparedness, and response activities" across federal agencies, " states, local governments, and private entities." 40 C.F.R. § 300.105(a); see also id. at 300.115. Third, Area Committees prepare Area Contingency Plans that, " when implemented in conjunction with the National Contingency Plan, [are] adequate to remove a worst case discharge, and to mitigate or prevent a substantial threat of such a discharge." 33 U.S.C. § 1321(j)(4)(C)(i).

Fourth and finally, and most relevant to this litigation, the President must promulgate regulations that require owners and operators of offshore oil facilities[4] to submit an OSRP " for responding, to the maximum extent practicable, to a worst case discharge . . . of oil or a hazardous substance." Id. § 1321(j)(5)(A)(i). The Secretary of the Interior delegated this responsibility to BSEE.[5] 56 Fed.Reg. 54,757, 54,761-62

Page 1216

(Oct. 18, 1991); 76 Fed.Reg. 64,432-01, 64,448 (Oct. 18, 2011). OSRPs must comply with the Clean Water Act's six requirements, listed at 33 U.S.C. § 1321(j)(5)(D), one of which is compliance with the governing Area Contingency Plan. Id. § 1321(j)(5)(D)(i); 30 C.F.R. § 550.219. BSEE must " promptly review" submitted plans, " require amendments to any plan that does not meet the requirements of this paragraph," and " shall. . . approve any plan that meets" the statutory requirements. Id. § 1321(j)(5)(E)(i)--(iii) (emphasis added).

Environmental consultation occurs at several points throughout both OCSLA and the Clean Water Act's four-tiered processes. National Environmental Policy Act (" NEPA" ) and Endangered Species Act (" ESA" ) consultations occur when oil and gas exploration leases are first issued (at OCSLA's second stage), 43 U.S.C. § 1344(a)(1) & (b)(3); see also Sec'y of the Interior v. California, 464 U.S. 312, 338, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984), and again when lessee exploration plans are submitted (at OCSLA's third stage), 43 U.S.C. § 1340(c). Additional environmental review takes place upon submission of lessee development and production plans (OCSLA's fourth stage), including another round of NEPA review, see id. § 1351(c), and the submission of environmental impact statements (" EIS" ) to the governors of any affected states, id. § 1351(f)--(g). The Secretary may " approve, disapprove, or require modifications" of development plans, and must reject any plan that would " probably cause serious harm or damage to . . . the marine, coastal, or human environments," when weighed against the extent of the threat and the potential advantages of allowing production. Id. § 1351(h)(1).

Likewise, the Clean Water Act has several types of environmental review built in throughout its various stages. At the Area Contingency Plan level, Area Committees must consult with both the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration to prepare " a detailed annex containing a Fish and Wildlife and Sensitive Environments Plan" that " provide[s] the necessary information and procedures to immediately and effectively respond to discharges that may adversely affect" the environment. 40 C.F.R. § 300.210(c)(4)(i). An operator's OSRP must be consistent with the protocols established at this stage. See 33 U.S.C. § 1321(j)(5)(D)(i). The National Contingency Plan also lays out procedures for emergency consultation in the case of an actual oil spill. See 40 C.F.R. § 300.305(e).

II.

The Current Dispute

The case before us arises in the context of these overlapping statutory schemes, and represents " the latest chapter in a long-running saga beginning back in April 2002, when the Minerals Management Service (" MMS" ) established a five-year lease sale schedule for the outer continental shelf of Alaska." Native Vill., 680 F.3d at 1126. After Shell acquired offshore oil leases in the Beaufort Sea in 2005 and 2007, and in the Chukchi Sea in 2008, it submitted exploration plans, and the required OSRPs, for activities that were scheduled to commence in the summer of 2010. MMS, which was then in charge of approving exploration plans and OSRPs, id. at 1127, approved Shell's Beaufort Sea OSRP in March of that year and approved Shell's Chukchi Sea OSRP the following month.

The April 2010 Deepwater Horizon oil spill in the Gulf of Mexico shifted the landscape in a number of ways. BOEM assumed control over the approval of exploration plans, and BSEE assumed responsibility

Page 1217

for approving OSRPs. Id. at 1128. Also, following a moratorium on all oil and gas drilling, the Department of the Interior issued new guidance regarding the content and analysis that should be provided in OSRPs. See, e.g., U.S. Department of the Interior, Bureau of Ocean Energy Management, Regulation, and Enforcement, Information Requirements for Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents on the OCS 3 (2010), available at http://www.boem.gov/Regulations/Notices-To-Lessees/2010/10-n06.aspx .[6] In response, Shell updated its OSRPs for the Chukchi and Beaufort Seas in May 2011, and again in early 2012. BSEE approved the two OSRPs in February and March of 2012, respectively.

Following these approvals, Plaintiffs sued the Secretary of the Interior and the Department of the Interior under the Administrative Procedure Act, challenging BSEE's approval of the OSRPs. Shell successfully intervened. The parties filed cross-motions for summary judgment. The district court, following extensive briefing and argument, granted summary judgment in favor of the federal defendants and Shell. Shell Gulf of Mex. v. Ctr. for Bio. Diversity, Inc., No. 3:12-CV-00048-RRB, (D. Alaska Aug. 5, 2013). This appeal followed.

STANDARDS OF REVIEW

" We review the grant of summary judgment de novo, thus reviewing directly the agency's action under the Administrative Procedure Act's (" APA" ) arbitrary and capricious standard." Gila River Indian Cmty. v. United States, 729 F.3d 1139, 1144 (9th Cir. 2013), as amended (July 9, 2013) (quoting Gifford Pinchot Task Force v. U.S. Fish & Wildlife Serv., 378 F.3d 1059, 1065 (9th Cir. 2004)) (internal quotation marks omitted). Review under this standard " is narrow, and [we do] not substitute [our] judgment for that of the agency." Ecology Ctr. v. Castaneda, 574 F.3d 652, 656 (9th Cir. 2009) (quoting Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008) (en banc)) (alterations in original) (internal quotation marks omitted). Rather, reversal is only proper

if the agency relied on factors Congress did not intend it to consider, entirely failed to consider an important aspect of the problem, or offered an explanation 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 Lands Council, 537 F.3d at 987) (internal quotation marks omitted).

Additionally, under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we engage in a three-step inquiry when reviewing an agency's interpretation of a statute that it is entrusted to administer. First, we must decide whether Congress intended " the agency to be able to speak with the force of law when it addresses ambiguity in the statute or fills a space in the enacted law." United States v. Mead Corp., 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Next, we ask " whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress."

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Chevron, 467 U.S. at 842-43. Finally, if the statute is silent or ambiguous as to the issue at hand, we then defer to the agency's reading so long as its ...


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