Pittston Company v. Endangered Species Committee

No. 79-1851; 79-1779 (D.D.C. March 21, 1980)

In a case of first impression, the court rules that the Pittston Company's application for an exemption from § 7 of the Endangered Species Act (ESA) to enable it to build an oil refinery in Maine is not ripe for review. The Environmental Protection Agency (EPA) had preliminarily indicated that it would deny Pittston's application for a national pollutant discharge elimination system (NPDES) permit based on consultation with and biological opinions of the Department of the Interior and the Department of Commerce indicating threats to endangered bald eagle and humpback whale populations. Pittston requested reconsideration of this decision and applied for an exemption from the ESA within 90 days after completion of the consultation process. The court concludes that the Endangered Species Review Board, the first step in the exemption process established by the 1978 amendments to the ESA, does not have jurisdiction to consider Pittston's application because there has been no final decision by EPA on the NPDES permit. Because the statute is ambiguous as to when an application is ripe for consideration by the Board, the court turns to the legislative history and finds clear indications that the exemption process is available only after an application for a permit has finally been denied on § 7 grounds.

Counsel for Plaintiff Pittston Co.
Jonathan B. Hill, John R. Feore
Dow, Lohnes & Albertson
1225 Connecticut Ave. NW, Suite 500, Washington DC 20036
(202) 862-8103

Counsel for Plaintiffs National Wildlife Federation et al.
Patrick A. Parenteau
National Wildlife Federation
1412 16th St. NW, Washington DC 20036
(202) 797-6853

Michael J. Bean
Environmental Defense Fund, Inc.
1525 18th St. NW, Washington DC 20036
(202) 833-1484

Counsel for Defendants
Kenneth Berlin, Chief, Wildlife Section
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2716

[10 ELR 20249]

Greene, J.:

Opinion

These actions for declaratory and injunctive relief involve the question whether the Endangered Species Review Board (Board) or the Endangered Species Committee (Committee) has jurisdiction to consider two applications filed by the Pittston Company (Pittston) for exemption from § 7(a) of the Endangered Species Act, as amended, 16 U.S.C. § 1536(a).

The plaintiffs in the initial action (Civil Action 79-1779) include four environmental interest groups: National Wildlife Federation, Environmental Defense Fund, Inc., Natural Resources Council of Maine and Conservation Law Foundation of New England (collectively referred to herein as the environmentalists), and the defendants are the Committee, the Board, and the Board's members.¹ Pittston, plaintiff in Civil Action 79-1851,² has been in the process of applying for both state and federal licenses to enable it to construct an oil refinery in Eastport, Maine. Named as defendants in both actions are several government entities and individuals, including the Committee and the Board, which determine whether to grant exemptions from § 7 of the Endangered Species Act. The environmentalists have intervened as defendants in Pittston's suit against the federal defendants. Additionally, the New England Legal Foundation, a nonprofit corporation representing the public interest of the people in six New England states in litigation which affects the economy and environment of New England, has intervened as a plaintiff in Pittston's suit.

The policy underlying the Endangered Species Act is to further the conservation of endangered species. To that end, § 7 of the Act requires all federal agencies to insure that the actions they authorize, fund, or implement will not jeopardize the continued existence of endangered species or modify their critical habitats. Under subsection (a) of that section, each agency must consult with either the Secretary of the Interior or the Secretary of Commerce to ascertain the impact of its proposed action on any endangered or threatened species. Subsection (b) requires this consultation process to be concluded within ninety days after its initiation or within a time span mutually agreeable to the Secretary and the federal agency involved. After the conclusion of consultation, the Secretary must issue a written statement to the federal agency setting forth his opinion on how the proposed agency action would affect the species, and he must suggest reasonable and prudent alternatives which would avoid jeopardizing its continued existence. 16 U.S.C. § 1536(b).

Amendments adopted by the Congress in 1978 in response to the Supreme Court's decision in Tennessee Valley Authority v. Hill, 437 U.S. 153 [8 ELR 20513] (1978) establish a procedure for allowing certain projects to proceed despite the strict proscriptions of § 7. 16 U.S.C. § 1531 et seq. These amendments establish two new governmental entities, and they prescribe a procedure for determining which federal actions would be exempt from the strict requirements of § 7. The Endangered Species Committee³ grants an exemption if there are no reasonable and prudent alternatives to the agency action, the "benefits of such action clearly outweigh the benefits of alternative courses of action consistent with conserving the species or its critical habitat, and such action is in the public interest," the action is of regional or national significance, and it establishes reasonable mitigating and enhancement measures. Before an application is considered by the Committee, it is screened by an ad hoc three-member Endangered Species Review Board, which determines whether it is appropriate to convene the full Committee. A refusal of the Board to refer the application to the full Committee, and a final determination by the Committee itself, are both considered final agency action for purposes of judicial review.⁴

The statute prescribes certain procedural requirements for individuals seeking to utilize the exemption process as follows. Only the federal agency involved, the governor of the state in which the action will occur, or a permit or license applicant may pursue the exemption process. The Act defines a permit or license applicant as "any person whose application to such an agency for a permit or license has been denied primarily because of the application of Section 7(a) to such agency action." 16 U.S.C. § 1532(12). More importantly for the present case, § 7(a)(2)(A) requires that an exemption application shall be submitted within ninety days after the completion of the consultation process. 16 U.S.C. § 1536(a)(2)(A).

The facts giving rise to the dispute are as follows.

In 1972, Pittston decided to construct an oil refinery in Eastport, Maine, to produce mainly low-sulfur home heating oil and industrial fuel oils, to be distributed in the northeastern United States, and it began applying for the necessary state and federal licenses. After three years of hearings, the Maine Board of Environmental Protection granted Pittston the air and water licenses necessary for the start of construction. Having obtained state licensing, Pittston filed on September 26, 1975, for a national Pollutant Discharge Elimination System (NPDES) permit with the Environmental Protection Agency under § 402 of the Clean Water Act, 33 U.S.C. § 1251. EPA, after holding public hearings, on June 19, 1978, published a Final Environmental Impact Statement, and at the same time, it indicated that it was EPA's tentative decision to grant Pittston a permit under the Clean Water Act.

However, two months after the release of the statement, for the first time in this six-year process, the Department of Commerce and the Department of the Interior raised endangered species issues,⁵ requesting "consultation" pursuant to the Endangered Species Act. On December 19, 1978, the U.S. Fish and Wildlife Service of the Department of the Interior issued a biological opinion, which concluded that construction and operation of the refinery was likely to jeopardize the continued existence of the bald eagle. Following this opinion, on January 17, 1979, the EPA Regional Administrator issued a notice of determination to deny the NPDES permit to Pittston. The Regional Administrator found that the proposed refinery was likely to jeopardize the continued existence of the bald eagle, and that it [10 ELR 20250] would also violate the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.

On February 7, 1979, Pittston requested reconsideration of this determination and an adjudicatory hearing pursuant to EPA regulations codified at 40 C.F.R. § 125.36. These regulations require the Regional Administrator to issue an initial decision at the conclusion of the hearing. This decision, in turn, may be appealed to the Administrator of EPA, whose decision becomes the final decision of the Agency. 40 C.F.R. § 125.36(1)(4).

In addition to its consultation with the Fish and Wildlife Service (FWS) of the Department of Interior, the EPA also conducted "consultation" with the National Marine Fisheries Service (NMFS) of the Department of Commerce regarding the effects of the proposed refinery on endangered marine species.⁶ On May 30, 1979, the NMFS issued its biological opinion that the granting of an EPA permit for the proposed oil refinery might jeopardize the continued existence of the humpback whale. Consequently, the EPA advised Pittston that its permit, which had already been denied because of jeopardy to the bald eagle's continued existence, was also being denied because of the refinery's possible adverse impacts on the humpback whale. EPA advised Pittston that any objections it intended to raise concerning the NMFS determination would be considered at the adjudicatory hearing the applicant had alreadyrequested.

Within ninety days of the issuance of the biological opinions of the Secretaries of Commerce and Interior, and prior to the commencement of the EPA's adjudicatory hearing on the permit denial, and the issuance of an initial or a final decision by EPA, Pittston filed applications for exemption from § 7(a) of the Act. Despite objections from the environmentalists, the Board which had been assembled to consider Pittston's applications determined that Pittston's exemption application was ripe for adjudication. Thereafter, on July 9, 1979, the environmentalists filed No. 79-1779 in this Court in which they claim that the Board lacks jurisdiction to consider Pittston's exemption applications because there has been no final decision by EPA on the denial of Pittston's permit.⁷ One week after the filing of the environmentalists' suit, the Committee voted to disssolve the Board upon its determination that the matter was not yet ripe for review. Following this action, Pittston filed Civ. No. 79-1851 which challenges the decision of the Committee. The matter is now before the Court on cross motions for summary judgment.⁸

The central issue in this case is whether Pittston's exemption application is ripe for review by the Board or the Committee.⁹ Resolution of this issue involves an interpretation of several, apparently conflicting provisions of the Endangered Species Act which have never been considered by any court.

Pittston contends that under §§ 3(12) and 7(g)(2)(A) of the Act its application is ripe for consideration by the Board because (1) it has been denied a permit or license primarily on endangered species grounds and (2) it has filed its exemption application within 90 days of the completion of consultation.

Section 3(12) defines a "permit or license applicant" as "any person whose application to such agency for a permit or license has been denied primarily because of the application of Section 7(a) to such agency action," and § 7(g)(2)(A) further requires that "an exemption applicant shall submit a written application to the Secretary . . . not later than 90 days after the completion of the consultation process." The environmentalists and the federal defendants, relying on the legislative history of the Act, argue that Pittston is not a "permit or license applicant" within the meaning of the statute because there has been no final decision on its application for a permit.¹⁰ They note that at the same time it applied for an exemption from the Act, Pittston had pending an application for an adjudicatory hearing by the EPA ito review the Regional Administrator's denial of Pittston's NPDES permit.¹¹ Pittston contends in response that the statute is unambiguous in not requiring finality with respect to the denial of a license or permit as prerequisite to resort to the exemption process, and that consideration of legislative history is therefore neither necessary nor appropriate.

The Court rejects Pittston's suggestion that the statute should be interpreted solely on its face. In the first place, the statute is not unambiguous. It does not clearly indicate, one way or the other, whether use of the word "denial" refers to denial of a permit at some intermediate stage of administrative consideration, as distinguished from its ultimate stage. Moreover, even if the law appeared to be clear on its face, reference to the legislative history would still be appropriate to assure that the court's interpretation not be based on "superficial examination" of the statute. Train v. Colorado Public Interest Research Group, 426 U.S. 1, 10 [6 ELR 20549] (1976). A statute should be construed in accordance with its overall purpose and the public policy which it is intended to promote, and resort to the legislative history is therefore proper in construing its terms. United States v. American Trucking Associations, Inc., 310 U.S. 534, 543-44 (1940).

The legislative history clearly shows that Congress intended the exemption process to be available only as a last resort.

The 1978 amendments are the product of bills passed by the senate in July 1978 and by the House in October 1978. The Senate bill (S. 2899, 95th Cong., 2d Sess. (1978)) provided that only agency heads could file exemption applications, after determining that an irresolvable conflict existed,¹² i.e., that an agency's action [10 ELR 20251] would likely jeopardize the survival of an endangered species. The bill did not provide for recourse to the exemption process by private applicants, and it therefore provides little guidance on the issue here involved.

The House bill allowed for either an agency head or a permit applicant to invoke the exemption process. Thus, it is more pertinent to congressional intent on this issue. This intent may be discerned most clearly by reference to the markup sessions on the bill that ultimately passed the House, H.R. 14104, 95th Cong., 2d Sess. (1978). That bill reflected a compromise among five different proposals sponsored by members of the Subcommittee on Fisheries, Wildlife Conservation and the Environment of the Committee on Merchant Marine and Fisheries. Despite disagreement on other aspects of the exemption procedure, all five congressmen agreed that the exemption process was to be available only after all other administrative remedies had been exhausted. The following statements from the transcript of the House Subcommittee's markup sessions are representative of House sentiment¹³ in this regard:¹⁴

Mr. Leggett. But before you could get exemption, you must necessarily go to the end of the road. And I think that necessarily our procedure would look forward to the resolution of the conflict within the framework of the administrative and legal procedure and the Presidential exemption or administrative court exemption or whatever would only come later and would be extraordinary . . . . (pp. 75-76).

Mr. Forsythe. Well, I think that really all the legislation here — there is a very significant attempt to force the ultimate in consultation, of working it out between agencies, and to make that ultimate exception decision only as the last resort (pp. 126-127).

Mr. Bowen. . . . We are not here to exterminate species. We are here to try to protect them and so we want to have as much compromise and as many alternatives explored and as much take place in the process prior to reaching that ultimate judgment as possible.

Mr. McCloskey. Can we not then agree that that is one of the principles of what we will seek to do? We want to postpone the final confrontation to the last stage in the proceeding (p. 127).

Mr. Dingell. . . . I want to know about the exception procedure. I would like to know who shall do it and I should like to know when it occurs.

Now the gentleman from California [Mr. McCloskey] says it should occur as late as possible and in that I fully agree.

Mr. Leggett. I think that everybody agrees it ought to occur as late as possible (pp. 127-128) (emphasis added throughout).

This conclusion is buttressed by legislation enacted since that time. On December 28, 1979, an amendment to § 7(g)(2)(A) was enacted, providing that "[a]n exemption applicant shall submit a written application to the Secretary . . . not later than 90 days after the completion of consultation or, in case of any agency action involving a permit or license applicant, not later than 90 days after the date on which the Federal agency concerned takes final agency action, for purposes of chapter 7 of title, 5, United States Code, with respect to the issuance of the permit or license" (emphasis added). S. 1143, Endangered Species Act Amendments, § 4(7) (1979).

To be sure, the general rule is that the views of a subsequent Congress form a "hazardous basis" for inferring the intent of a previous Congress. International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977); Portland Cement Ass'n v. Ruckelshaus, 158 U.S. App. D.C. 208, 486 F.2d 375, 383 [3 ELR 20642] (1973). These hazards are diminished, however, when, as here, the subsequent expression of congressional purpose follows the basic action of Congress by only a few months, the legislators with primary responsibility for the legislation are the same, and the Congress clearly expresses itself and specifically addresses an earlier ambiguity in the statute.

The Conference Report on S. 1143 recognizes the confusion created by the original amendment with respect to a situation such as the one involved in this case — where final agency action had not been completed but consultation had taken place. The Report indicates a congressional intent to reserve the exemption process for the last resort situation, to be considered after an applicant had been finally denied a permit or license. As the Report explains (Cong. Rec., Dec. 11, 1979, H11801 at p. H11804):

The term 'permit or license applicant' is defined in the Act to mean any person whose permit or license application has been denied primarily because of the application of Section 7(a) to such agency action. Section 7(g)(2)(A) of the Act currently requires applications to be filed not later than 90 days after the completion of the consultation process. The existing language of the Act has resulted in confusion in those instances when a biological opinion has been issued although the Federal agency has not taken final action with respect to the permit at issue. The conference report clarifies the intent of the 1978 Amendments by providing that applications for exemptions in these circumstances should not be filed until after final agency action on the permit or license application at issue.

The exemption process was designed to resolve endangered species conflicts after other administrative remedies, including consultation have been exhausted. It makes no sense to initiate an exemption process before it has been determined that there is a need for an exemption in the first place. This provision insures exemption applications will be filed, in cases involving permit or license applicants, when the application is ripe for review.

Thus, legislative intent appears squarely to favor the position of federal agencies and the environmentalists.

Both sides advance public policy arguments. The federal agencies and the environmentalists argue that Pittston's position would lead to duplicative proceedings, with hearings occurring simultaneously before EPA bodies and the Endangered Species Review Board and Committee. These parties also claim that, on Pittston's view of the statute, some applicants might forfeit an opportunity for any resort to the exemption process even though a permit had been denied.¹⁵

Pittston, on the other hand, makes the point that § 7(g)(2)(A) requires an applicant to file its exemption application not later than ninety days after the consultation process. It is argued that, under the interpretation advocated by Pittston's opponents, it would be difficult for anyone ever to avail himself of the exemption process because it is unlikely that he could secure a final action on his application within ninety days after the completion of consultations.

More broadly, Pittston points to the fact that it began eight years ago the process of seeking permits to build an oil refinery in the northeastern United States, an area which now depends entirely upon importation to supply its demand for petroleum products, and that, under the construction advocated by its opponents, it may have to wait a considerable additional period before it [10 ELR 20252] receives a definitive answer.¹⁶ Pittston's suggestion that environmental decisions should not be delayed ad infinitum¹⁷ appears to be supported by President Carter who, in his message to Congress dated August 2, 1979, proposed creation of an Energy Mobilization Board to accelerate environmental decision-making on critical energy facilities. The Court agrees that in the interest of orderly government, decisions ought to be made directly rather than by a process of attrition.¹⁸ But the last word of the Congress is that the EPA process must be exhausted before resort may be had to the Endangered Species Committee, and its will, of course, controls.

The motions for summary judgment of the federal parties and of the environmentalists will be granted, and the motion of Pittston for summary judgment will be denied.

Order

In accordance with the findings of fact and conclusions of law contained in the Opinion published contemporaneously herewith, it is this 21st day of March 1980

ORDERED that the motions of Pittston Company for Summary Judgment and to Dismiss be and they are hereby denied, and it is further

ORDERED that the motions of National Wildlife Federation et al. for Summary Judgment be and are hereby granted insofar as they request a declaration on the ripeness of Pittston's exemption applications for consideration before the Endangered Species Review Board and Committee, and they are hereby denied insofar as they request this Court to declare the Interim Rules unlawful, and it is further

ORDERED that the motion of the Endangered Species Committee et al. for Summary Judgment be and it is hereby granted, and it is further

ORDERED that the motion of defendant-intervenor's New England Legal Foundation for Summary Judgment be and it is hereby denied, and it is further

ORDERED that the Pittston Company may not apply for an exemption from § 7 of the Endangered Species Act unless and until it has been finally denied a permit by the Environmental Protection Agency.

1. The Board's members are the Secretary of the Interior Andrus, Secretary of Commerce Kreps, and Francis L. Young, Chairman. The original complaint sought an injunction to prevent the Committee from considering exemption applications filed by Pittston and to preclude the Board from holding hearings on the applications until final agency action had been taken by the Environmental Protection Agency. After the action was filed, the federal defendants agreed with the environmentalists that the applications were not ripe for processing by the Board and moved for dismissal of the case. Thereafter, Pittston filed suit against the same federal defendants, requesting the Court to order the Board to process Pittston's exemption applications. By stipulation, the parties to both actions agreed that the Review Board hearings would be stayed pending resolution of the issues involved by this Court.

2. The defendants are the same as in No. 79-1779.

3. The Committee is to be composed of the Secretary of Agriculture, the Secretary of the Army, the Chairman of the Council of Economic Advisors, the Administrator of the EPA, the Secretary of the Interior, the Administrator of the National Oceanic and Atmospheric Administration, and a changing member appointed by the President from the state affected by the particular exemption application.

4. Section 7(n) of the Act specifies that a final decision of the Committee is reviewable in the U.S. Court of Appeals for the Circuit where the agency action concerned will be or is being carried out.

5. When Pittston filed an environmental assessment with EPA in March 1976, it disclosed the presence in the area of whales and, at the request of EPA, it gathered information on the bald eagle from the Department of the Interior. All of that information was also included in the environmental impact statement.

6. The involvement of two executive departments, the Departments of Interior and Commerce arises from division of responsibilities provided for in the Endangered Species Act. The Secretary of Interior, through FWS, has responsibility for primarily terrestrial and fresh water species, and the Secretary of Commerce, through the NMFS, has responsibility for marine species. 16 U.S.C. § 1532(15).

7. The environmentalists also challenged the legality of the Interim Final Rules pursuant to which the Board had assumed jurisdiction of Pittston's exemption applications. These Rules are regulations prescribing the procedures to be followed after an application had been submitted to the Board. The Rules, published by the Committee on June 8, 1979, do not address specifically the issue of when an application is ripe for review.

8. On February 22, 1980, Pittston moved for this Court to defer its ruling until a final decision had been rendered by EPA on Pittston's application for an NPDES permit. The EPA concluded an adjudicatory hearing to review the Regional Administrator's denial of Pittston's NPDES permit on February 8, 1980, and it expects to issue a final decision by this summer. However, Pittston has shown no compelling reason for a deferral of this Court's decision until the EPA renders its final decision. It is not certain that the decision will be solely on endangered species grounds. Certainly, the issues are ripe for decision now. If Pittston were willing to abandon this action in favor of an exhaustion of the EPA process, irrespective of the grounds upon which the matter may be decided this summer, the matter might be moot. But Pittston has expressly disavowed such an intention.

9. The environmentalists and Pittston have raised subsidiary issues relating to the Interim Final Rules promulgated by the Endangered Species Committee. The environmentalists claim that the Committee exceeded its statutory authority in requiring the Board to determine whether "the finding of irresolvable conflict which resulted in the exemption application is supported by substantial evidence," thereby allowing the Board to review the factual bases undering the biological opinions of the FWS and the NMFS. Pittston, on the other hand, contends that the Interim Rules are too narrow and should provide for complete de novo review by the Board of the agencies' biological opinions via the irresolvable conflict determination. 50 C.F.R. § 452.03(c)(4). Pittston also challenges the Interim Rules procedurally, claiming that they were adopted in violation of the Administrative Procedure Act.

The Court declines to reach any conclusions on these issues because of its ruling on the ripeness of Pittston's exemption applications to the Board. The Interim Rules were promulgated on June 8, 1979, and they were made effective upon publication in order to provide guidance to the Board empaneled to consider Pittston's applications. Any applications filed hereafter will not be governed by the Interim Rules, for they lapsed on February 7, 1980. The Departments of Interior and Commerce have proposed Final Rules on Endangered Species Exemption Applications which treat the irresolvable conflict determination differently than the Interim Rules and which will be published as final rules within several weeks. 45 Fed. Reg. 8624. Since this Court has ruled that Pittston's applications are not ripe for review by the Board, any ruling on the Interim Rules is unnecessary, and the validity of the Final Rules would be more appropriately addressed in a proceeding involving them directly.

10. The federal defendants and environmentalists have raised a second argument to support their assertion that Pittston's application is not ripe for review. They claim that Pittston's permit was not denied "primarily because of the application of § 7(a)" based on the EPA Regional Administrator's determination which stated that the permit denial was based on both the Endangered SpeciesAct and the National Environmental Policy Act. Because of this Court's resolution of the final decision issue, it is not necessary to consider this argument made by the federal defendants and environmentalists.

11. EPA Regulations provide that a proposed permit modification or denial made by the Regional Administrator becomes final action of th EPA "unless a request for an adjudicatory hearing is granted." 40 C.F.R. § 125.35(a) and (c).

12. The Endangered Species Act defines an irresolvable conflict as "a set of circumstances under which, after consultation as required in Section 1536(a) of this title, completion of such action would (A) jeopardize the continued existence of an endangered or threatened species, or (B) result in the adverse modification or destruction of a critical habitat." 16 U.S.C. § 1532(11).

13. The Senate bill limited recourse to the exemption process to agency heads after they had made determinations on whether the proposed agency action would threaten an endangered species. The inference may be drawn that the Senate envisioned the exemption process as an alternative only after the endangered species issue had been finally determined within the agency.

14. See Transcript of Hearings Held Before Subcommittee on Fisheries, Wildlife Conservation and the Environment, Markup Sessions, H.R. 13807 — Amendments to the Endangered Species Act of 1973 (August 15, 16, 17; Sept. 11, 13, 19, 1978).

15. For example, if a permit applicant were required to file his exemption application within ninety days after the Secretary issues an adverse biological opinion but may not file the application until its request for a permit is even preliminarily denied, then those persons whose applications are denied more than ninety days after an adverse biological opinion has been rendered would never be able to seek an exemption.

16. The National Marine Fisheries Service at one time indicated that its projected study of the impact of the proposed plan on whales will take five years and cost one million dollars. Now it appears that some kind of decision may be made as early as this summer, although this is by no means assured.

17. It should be noted, however, that Pittston might have been able to secure a decision on its exemption application had it not chosen to seek reconsideration of the EPA Regional Administrator's decision. In the absence of an application for reconsideration, that decision would have been the the final EPA action and the matter would have been ripe for exemption review on any view of the statute.

18. There appears to be no valid reason why the EPA could not have decided the endangered species issue during the six years of its consideration of this matter.