California v. Watt

Nos. CV 82-2284-CHH, -2665-CHH (C.D. Cal. June 9, 1982)

The court enjoins the Secretary of the Interior from leasing oil and gas tracts off the California coast pending compliance with the Coastal Zone Management Act (CZMA). The court concludes that California has demonstrated a strong probability of success on the merits of its claim that the Secretary violated § 307(c)(1) of the CZMA by failing to determine whether the sale is consistent with the state coastal zone management plan. In addition, plaintiffs may suffer irreparable harm if Lease Sale No. 68 is not enjoined because a consistency determination will never be made. The court also concludes that California raised a serious question as to the Secretary's compliance with § 19 of the Outer Continental Shelf Lands Act (OCSLA). The Secretary failed to provide an explanation to California of the basis for the decision and to adequately consider the economic impact of the sale on coastal communities. However, the environmental impact statement for the sale complies with the National Environmental Policy Act. The court also rules that the Sierra Club does not have standing under § 307(c)(1) of the CZMA or § 19 of the OCSLA because its alleged injury does not fall within the zone of interests protected by those sections. However, plaintiff municipalities have standing under § 10 of the Administrative Procedure Act and the CZMA.

Counsel for Plaintiffs
John A. Saurenman
Office of the Attorney General
3580 Wilshire Blvd., Los Angeles CA 90010
(213) 736-2046

Counsel for Defendants
Carol E. Dinkins, Ass't Attorney General; Peter R. Steenland Jr., Anne S. Almy
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-4427

Gary Fisher
Office of the Solicitor
Department of the Interior, Washington DC 20240
(202) 343-5757

[12 ELR 21046]

Hall, J.:

Order Denying In Part and Granting In Part Preliminary Injunction

Plaintiffs' motions for preliminary injunction came before this Court for hearing on June 7, 1982. All parties appeared through their counsel of record. The Court, having carefully reviewed and considered the record before it, the points and authorities submitted in support of and in opposition to the motions, and oral argument of counsel, makes the following findings of fact and conclusions of law, which are made based only on the record as it now exists and for the purposes of this motion and without prejudice to the findings and conclusions required to be made upon trial of the cases.

Findings of Fact

1. The State of California is a sovereign state of the United States of America acting by the through Governor Edmund G. Brown, Jr., and the California Coastal Commission.

2. The intervenor-plaintiffs, the cities of Los Angeles, Santa Monica, Beverly Hills, Manhattan Beach, Torrance, San Clemente and Newport Beach, are cites of the State of California located on or near the California coast.

3. The Sierra Club is a nonprofit corporation organized under the laws of the State of California with its principal place of business at 530 Bush Street, San Francisco, California. The Sierra Club was founded as a national conservation organization in 1892 and presently has approximately 205,000 members, of whom about 85,000 reside in the State of California.

4. Laguna Beach is a city in the State of California located on the California Coast.

5. James G. Watt, sued herein in his official capacity, is Secretary of the Interior and is charged with administering the Outer Continental Shelf Lands Act pursuant to which Outer Continental Shelf oil and gas lease sales are conducted. The United States Department of Interior is the agency of the United States through which the Secretary of the Interior carries out his responsibilities including his responsibilities regarding Outer Continental Shelf oil and gas lease sales. Robert Burford, sued herein in his official capacity, is Director of the United States Bureau of Land Management. The Bureau of Land Management, an agency within the Department of the Interior, has responsibilities regarding Outer Continental Shelf oil and gas leasing.

6. Intervenor-defendant Western Oil and Gas Association ("WOGA") is a trade association comprised of nearly 100 member companies that conduct most of the production, refining, marketing and transportation of petroleum and petroleum products in the Western United States. Amoco Production Company, Atlantic Richfield Company, Chevron U.S.A., Inc., Exxon Corporation, Getty Oil Company, Gulf Oil Corporation, Mobil Oil Corporation, Phillips Petroleum Company, Shell Oil Company, Texaco, Inc., and Union Oil Company, each of which is a corporation organized under the laws of one of the United States and is actively engaged in the exploration for and development of oil and gas resources on the Outer Continental Shelf, are members of WOGA.

7. On December 28, 1979, a call for nominations and comments for proposed Lease Sale 68 was issued by the Bureau of Land Management ("BLM"). The area under consideration covered 16,300,000 acres on the Outer Continental Shelf ("OCS") offshore of Southern California. Following the call for nominations BLM announced that 10 oil companies had nominated 3,200,000 acres and that 94 comments from federal, state and local government agencies and other groups had been received indicating general concerns about offshore leasing or recommending that specific tracts be deleted.

8. In its comments on the call for nominations, the California Coastal Commission reiterated its position that the final notice of sale for an OCS lease sale was subject to consistency review to determine whether the lease sale decision was consistent with California's federally approved Coastal Management Program.

9. BLM ultimately established, for purposes of the environmental impact statement, that the total sale area would involve 218 tracts comprising about 1.1 million acres. The Final Environmental Impact Statement ("FEIS") was issued in November 1981. California state agencies participated in the review of the EIS by providing extensive comments on the draft environmental impact statement. California also requested that Interior conduct a consistency determination pursuant to the Coastal Zone Management Act ("CZMA") and the applicable regulations of the National Oceanic and Atmospheric Administration ("NOAA").

10. By a letter dated January 29, 1982 to Governor Brown, the Secretary announced the proposed notice of sale for Lease Sale 68. The proposed notice scheduled the lease sale for June 1982 and indicated that the sale would include 172 tracts.

11. By a letter of January 28, 1982, Interior informed the California Coastal Commission that it [Interior] had determined that Lease Sale 68 would not "directly affect" the California coastal zone within the meaning of § 307(c)(1) of CZMA (16 U.S.C. § 1456(c)(1).) Nevertheless, the Coastal Commission thereafter again informed Interior that a consistency determination was required prior to the final notice of sale.

12. In a letter dated March 29, 1982, Governor Brown submitted extensive recommendations and comments pursuant to § 19 of the Outer Continental Shelf Lands Act ("OCSLA") (43 U.S.C. § 1345) concerning the size, timing and location of Lease Sale 68. The Governor recommended, inter alia, that 32 tracts in 4 areas (8 tracts in the Santa Barbara Channel Ecological Preserve, 12 tracts adjacent to the mouth at Santa Monica Bay, 2 tracts in the Coast Guard Precautionary area at the entrances to the Ports of Los Angeles and Long Beach and 9 tracts offshore Orange County) be deleted from the sale.

13. The Executive Director of the California Coastal Commission, in a letter of April 26, 1982, informed Interior that the deletion of 24 tracts in the same four areas was required to make the final notice of sale consistent with the California Coastal Management Program: 8 tracts in the Santa Barbara Channel Ecological Preserve, 10 tracts adjacent to Santa Monica Bay, 2 tracts in the precautionary area at the entrances to the Ports of Los Angeles and Long Beach and 4 tracts offshore Orange County.

14. On May 7, 1982, the final decision on Lease Sale 68 was made, the Final Notice of Sale was announced, and the sale was scheduled for June 11, 1982. The recommendations of the Governor that tracts adjacent to Santa Monica Bay, offshore Orange County and in the Coast Guard precautionary area be delated from the sale were rejected. The 8 tracts in the Santa Barbara Ecological Preserve were not offered for leasing.

15. The Department of Interior has not conducted a consistency determination as required by § 307(c)(1) and the applicable NOAA regulations.

16. On May 11, 1982, this case was filed as was California's motion for preliminary injunction. In a letter to Governor Brown dated May 19, 1982, the Department of Interior explained why most of Governor Brown's recommendations were rejected. This letter and its enclosures were prepared after the May 7, 1982, final decision on the lease sale. The letter and its enclosures contained analyses that do not appear elsewhere in the record before the Court.

17. To the extent that these findings of fact are deemed conclusions of law, they are incorporated into the conclusions of law.

Conclusions of Law

1. To the extent that these conclusions of law are deemed findings of fact, they are incorporated into the findings of fact.

2. This Court has jurisdiction over the claims asserted herein pursuant to 28 U.S.C. § 1331(a); 28 U.S.C. §§ 2201-2202 (Declaratory Judgment Act); 28 U.S.C. § 1361 (Mandamus); 43 U.S.C. § 1349 of the Outer Continental Shelf Lands Act of 1978 ("OCSLA"); the Coastal Zone Management Act ("CZMA"), 16 U.S.C. § 1451 et seq.; and the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq.

Coastal Zone Management Act:

3. The standard in this Circuit for determining whether a preliminary injunction is appropriate is articulated in Benda v. Grand Lodge of International Machinists, 584 F.2d 308, 314-315 (9th Cir. 1978).

4. The Court concludes that plaintiffs have demonstrated a strong probability of success on the merits of the Coastal Zone [12 ELR 21047] Management Act ("CZMA") claim. See State of Cal. by and through Brown v. Watt, 520 F. Supp. 1359 [11 ELR 20870] (C.D. Cal. 1981). The Final Notice of Lease Sale No. 68 directly affects the coastal zone. "Only a definition [of directly affects] which provides for the application of § 307(c)(1) at the decision-making stage of the leasing process will effectuate the congressional intent and give proper meaning and focus to the Act. Clearly, the consistency requirement should apply when a federal agency initiates a series of events which have consequences in the coastal zone. Any other interpretation would thwart the purposes of the Act." Id., at 1374. In this case, the Final Notice of Lease Sale has many of the same direct effects found to exist with Notice of Lease Sale No. 53. The threshold test under § 307(c)(1) requires the finding of only one such effect on the coastal zone. Id., at 1382. The Court follows State of Cal. by and through Brown v. Watt, supra, and therefore does not need to reach the collateral estoppel issue.

5. Plaintiffs have demonstrated a possibility of irreparable harm if the lease sale is not enjoined. If a consistency determination is not made at this time, the consistency of the entire lease sale with the California Coastal Management Plan will never be determined. While the Court recognizes the strong public interest in developing domestic oil and gas resources, the balance of hardships in this case tips in plaintiffs' favor.

Outer Continental Shelf Lands Act:

6. Section 19 of the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1345, provides for the submission to the Secretary of recommendations by the governor of the affected state regarding the size, timing or location of a proposed lease sale, 43 U.S.C. § 1345(a), and the Secretary's acceptance of the recommendations "if he determines . . . that they provide for a reasonable balance between the national interest and the well-being of the citizens of the affected states." 43 U.S.C. § 1345(c).

7. The legislative history of § 19 of the OCSLA repeatedly emphasizes that the governors of affected states are to have a "leading role" in decisions as to potential lease sales, and that their recommendations are to be given "full and careful consideration" by the Secretary.

8. The Secretary's acceptance or rejection of the governor's recommendations "shall be final . . . unless found to be arbitrary and capricious." 43 U.S.C. § 1345(d).Under the arbitrary or capricious standard, the reviewing court may decide only whether the Secretary has made a clear error of judgment or whether the Secretary's decision was based upon a consideration of the relevant factors. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 426 [1 ELR 20110] (1971); Nance v. Environmental Protection Agency, 645 F.2d 701, 705 [11 ELR 20526] (9th Cir.), cert. denied, 102 S. Ct. 635 (1981). The Court may not substitute its judgment for that of the Secretary. See Citizens to Preserve Overton Park v. Volpe, supra, at 416; State of Cal. by and through Brown v. Watt, 520 F. Supp. 1359, 1384 [11 ELR 20870] (C.D. Cal. 1981).

9. In State of Cal. by and through Brown v. Watt, 520 F. Supp. 1359, 1385 [11 ELR 20870] (C.D. Cal. 1981), Judge Pfaelzer upheld the Secretary's decision on the basis that "the announced agency decision was accompanied by a contemporaneous explanation of some of the considerations that formed a basis of the decision, and where the administrative record len[t] some support to the explanation." Despite Judge Pfaelzer's admonition that the Secretary "quite clearly violated the spirit of the Act," ibid., here, less than eight months later, the Secretary has done even less to comply with the OCSLA. The Secretary's May 7, 1982, announcement of the sale was not accompanied by any explanation of the considerations that formed the basis of the Secretary's decision. No such explanation was provided until May 19, 1982, when the Secretary sent the governor an explanatory letter which contained information not set forth elsewhere in the record before this Court. Additionally, it does not appear that the Secretary has adequately considered the economic impact of the lease sale on the coastal communities.

10. The Court concludes that plaintiffs have raised a serious question whether the Secretary has given the governor's recommendations full and fair consideration and that the balance of hardships tips decidedly in favor of plaintiffs. See Los Angeles Memorial Coliseum Com'n v. Nat. Football League, 634 F.2d 1197, 1201 (9th Cir. 1980); Benda v. Grand Lodge of International Association of Machinists, 584 F.2d 308, 315 (9th Cir. 1978).

Secretary's Duty:

11. While the Secretary clearly has a duty to protect the environment, see Sun Oil Co. v. United States, 572 F.2d 786, 804 (Ct. Cl. 1978), citing Gulf Oil Corp. v. Morton, 493 F.2d 141 [4 ELR 20086] (9th Cir. 1973), that duty does not extend beyond his duty to comply with relevant environmental statutes and accordingly does not create a cause ofaction apart from those statutes. See State of Cal. by and through Brown v. Watt, 668 F.2d 1290, 1324-1325 [12 ELR 20001] (D.C. Cir. 1981); North Slope Borough v. Andrus, 642 F.2d 589, 612 [10 ELR 20832] (D.C. Cir. 1; Comm. of Mass v. Andrus, 594 F.2d 872, 892 [9 ELR 20162] (1st Cir. 1979).

Environmental Impact Statement:

12. Section 102(2) of the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4332(2)(C), requires an environmental impact statement ("EIS") where a major federal action significantly affects "the quality of the human environment." An EIS complies with NEPA when it is sufficient to ensure that the decision-makers and the public can independently evaluate the environmental consequences of the project. Columbia Basin Land Protection Ass'n v. Schlesinger, 643 F.2d 585, 592 [11 ELR 20537] (9th Cir. 1981), citing Trout Unlimited v. Morton, 509 F.2d 1276, 1283 [5 ELR 20151] (9th Cir. 1974). The adequacy of the EIS is determined by a "rule of reason, which requires only '[a] reasonably thorough discussion of the significant aspects of the probable environmental consequences.'" (Citations omitted.) Columbia Basin Protection Ass'n v. Schlesinger, supra, at 592; State of Cal. by and through Brown v. Watt, 520 F. Supp. 1359, 1382 [11 ELR 20870] (C.D. Cal. 1981). There is no requirement that every potentially significant statistic be included in an EIS, and an EIS is adequate where a good faith attempt has been made "to identify and to discuss all foreseeable environmental consequences." Id. at 1382, quoting Columbia Basin Land Protection Ass'n v. Schlesinger, supra, at 592. The Final Environmental Impact Statement in this case meets these requirements.

Standing:

13. The Sierra Club does not have standing under the CZMA. The Sierra Club relies on § 10 of the Administrative Procedure Act ("APA"), 5 U.S.C. § 702, to support its claim. As the Supreme Court explained in Sierra Club v. Morton, 405 U.S. 727, 733 [2 ELR 20192] (1972), "persons [have] standing to obtain judicial review of federal agency action under § 10 of the APA where they [have] alleged that the challenged action [has] caused them 'injury in fact,' and where the alleged injury [is] to an interest 'arguably within the zone of interests to be protected or regulated' by the statutes that the agencies [are] claimed to have violated." See also, Starbuck v. City and County of San Francisco, 556 F.2d 450 (9th Cir. 1977). The Court concludes that the Sierra Club's Alleged injury does not fall within the zone of interest protected by § 307(c)(1) and that the Sierra Club has failed to show that the Secretary's action pursuant to § 307(c)(1) has caused the Sierra Club injury in fact.

14. San Clemente and Laguna Beach have standing pursuant to § 10 of the APA. They have sufficiently alleged that the challenged action has caused them injury in fact and that that injury is to an interest within the zone of interest to be protected by the CZMA. See Sierra Club v. Morton, supra, 405 U.S. at 733. Local governments have been given a prominent role in the legislative scheme under the CZMA.

15. Relief to San Clemente and Laguna Beach pursuant to their CZMA claims is limited to tracts located within a reasonable proximity to those communities. They have demonstrated that they will suffer injury in fact only from the leasing of those tracts. Tract No. 182 is the only tract in this zone not included under California's claims.

16. The Court further concludes that neither the local governments nor the Sierra Club have standing to seek broader injunctive relief for the Secretary's violation of § 19 of the OCSLA, 43 U.S.C. § 1345, than that sought by the governor. Any broader relief [12 ELR 21048] would fall outside the zone of interest to be protected by the OCSLA. See Sierra Club v. Morton, supra, 405 U.S. at 733.

Order

IT IS HEREBY ORDERED:

That plaintiff's applications for preliminary injunction are granted as to California's claim under the CZMA with respect to tract numbers 128, 129, 136, 137, 138, 145, 146, 147, 151, 152, 164, 165, 176, 177, 178 and 184; as to Laguna Beach's and San Clemente's claims under the CZMA with respect to tract number 182; and as to California's claim under the OCSLA with respect to tract numbers 122, 123, 128, 129, 136, 137, 138, 145, 146, 147, 151, 152, 164, 165, 174, 175, 176, 177, 178, 183, 184, 187 and 188. In all other respects, the motion for preliminary injunction is denied.

IT IS FURTHER ORDERED that federal defendants, their agents, servants, employees, attorneys, successors, assigns and all persons in active concert and participating with them, are hereby restrained and enjoined from conducting an oil and gas lease sale and from receiving and opening bids, from accepting or rejecting any bids, issuing any leases or taking any other action in connection with OCS Lease Sale 68 (Southern California) for tract numbers 122, 123, 128, 129, 136, 137, 138, 145, 146, 147, 151, 152, 164, 165, 174, 175, 176, 177, 178, 182, 183, 184, 187 and 188. This preliminary injunction has no effect on the leasing of other tracts identified in the Final Notice of Lease Sale for OCS Lease Sale 68.

Dated: June 8, 1982.