Steamboaters v. Federal Energy Regulatory Commission

Nos. 83-7444 et al. (9th Cir. December 5, 1985)

The court holds that owners of a hydroelectric project granted a licensing exemption in violation of the National Environmental Policy Act (NEPA) are not entitled to an injunction allowing operation of the project while an environmental assessment of the project is prepared. The court notes that usually it only allows an action to proceed in the face of a NEPA violation where halting the action would cause environmental harm. This rule does not apply to the instant situation, even though allowing the project to proceed might not cause any irreparable harm. The court further holds that no direct statutory conflict exists between NEPA and the Energy Security Act, under which the project was approved. Although the Act encourages expeditions development of hydropower, it sets no timetable inconsistent with NEPA compliance. Also, the court rejects as unproven the owners' contention that a shutdown will cause them irreparable financial harm.

Turning to motions made by opponents of the project, the court denies as moot a motion to enjoin operation of the plant pending decision on the just-decided owners' petition and denies as premature motions for permanent injunctions against the project.

[The original opinion of the court appears at 15 ELR 20505.]

Counsel for Petitioners
Allen L. Johnson, Bill Kloos
Sullivan, Vosselson, Johnson & Kloos
915 Oak St., Suite 101, Eugene OR 97401
(503) 687-1004

David C. Shilton
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-5580

Counsel for Respondents
Joshua Z. Rakach
Federal Energy Regulatory Commission
825 N. Capitol St. NW, Washington DC 20002
(202) 357-5200

Stephen T. Janik
Ball, Janik & Novak
One Main Pl., 101 SW Main St., Portland OR 97204
(503) 228-2525

R. Keith Guthrie
Van Ness, Feldman, Sutcliffe, Curtis & Levenberg
1050 Thomas Jefferson St. NW, 7th Fl., Washington DC 20007
(202) 331-9400

Before Alarcon and Norris, JJ.

[16 ELR 20169]

Sneed, J:

ORDER

In Steamboaters v. FERC, 759 F.2d 1382 (9th Cir. 1985), we reversed and rescinded an order of the Federal Energy Regulatory Commission (FERC) which granted an exemption from licensing to the Winchester Dam Hydropower Project because of a failure to comply with the procedural requirements of the National Environmental Policy Act (NEPA). Intervenors now file a petition for rehearing requesting us to modify our opinion to permit the project to operate pending remand to the agency. In response, the Steamboaters has filed a motion for a preliminary injunction pending our decision on the petition for rehearing for a permanent injunction. We deny the petition and all the motions for injunctive relief.

1. PETITION FOR REHEARING

Intervenors argue that in fashioning a remedy, we failed to consider equitable principles. They analogize their case to other cases where this court, for equitable reasons, refused to enjoin activity even though there had been a failure to comply with NEPA.

The cases Intervenors cite are distinguishable from this case. As a general rule, we have declined to enjoin action allegedly in violation of NEPA only in the unusual case where an injunction "might actually jeopardize natural resources." American Motorcyclist Association v. Watt, 714 F.2d 962, 966 (9th Cir. 1983) (court refused to enjoin environmental plan designed to protect desert resources); see also Alpine Lakes Protection Society v. Schlapfer, 518 F.2d 1089 (9th Cir. 1975) (court refused to enjoin grant of access to permit logging of infested trees because of risk that timber would be worthless and risk that adjacent forestland would be infested). Intervenors do not argue that an injunction would cause environmental harm. Rather, they ask the court to find that continued operation of the project would not cause irreparable harm.

Intervenors argue, however, that this is an unusual case because of the public interest in promoting small hydropower projects. They rely on Forelaws on Board v. Johnson, 743 F.2d 677 (9th Cir. 1984). There, we held that the Bonneville Power Administration violated NEPA when it offered power contracts without developing an environmental impact statement (EIS), but refused to enjoin the contracts pending completion of the EIS. Forelaws is clearly distinguishable, however, because of the "clear tension between NEPA's charge to the agency to evaluate the effects of action upon the environment and the command of the Regional Act that the contracts be in place within 21 months of its passage." Id. at 686.

Such a statutory conflict does not exist between NEPA and the statute under which the exemption was granted, the Energy Security Act (ESA). Although the ESA encourages the expeditious development of hydropower, it sets no time schedule for specific projects. Furthermore, the statute governing exemptions from licensing incorporates by reference NEPA's procedural requirements. 16 U.S.C. § 2705(b). Thus, the delay caused by compliance with NEPA is built into the ESA. Furthermore, Intervenors make no showing that the electrical power the project generates is vital to satisfy the public's needs.

Finally, Intervenors argue that a shutdown of the hydropower project would harm their private investment. Although we acknowledge that a shut down will deprive Intervenors of revenue, we find no evidence that it will cause irreparable financial harm.

In short, Intervenors have failed to show that this is an "unusual case" such that we must clarify our decison to permit operation of the hydropower project. Accordingly, we deny the petition.

2. MOTIONS FOR INJUNCTIVE RELIEF

The Steamboaters has filed a motion to enjoin operation of the plant pending our decision on Intervenors' petition. Because this order denies the petition, it renders Steamboaters' motion moot. Accordingly, we deny the motion.

The Steamboaters has also filed two requests for permanent injunction. They contend that the project is presently causing irreparable environmental harm and that Intervenors will operate the hydropower project in violation of this court's decision. The Steamboaters' motions are premature pending remand of this case to FERC for a clarification of its decision not to prepare an Environmental Impact Statement. Accordingly, we deny the motions for a permanent injunction without prejudice.

Petition and Motions DENIED.