State of California v. Bureau of Land Management

Background

The opinion resolved cross-motions for partial summary judgment in two related cases: State of California v. Bureau of Land Management, No. 18-cv-00521-HSG, and Sierra Club v. Zinke, No. 18-cv-00524-HSG. The plaintiffs challenged BLM’s December 2017 final rule repealing a 2015 rule regulating hydraulic fracturing on federal and Indian lands. The 2015 rule addressed well construction and testing, storage of hydraulic-fracturing waste, agency oversight, and disclosure of chemical additives.

The plaintiffs alleged that the repeal violated the Administrative Procedure Act (APA), the National Environmental Policy Act (NEPA), and the Endangered Species Act (ESA). California also relied on the Federal Land Policy and Management Act, the Mineral Leasing Act, and the Indian Mineral Leasing Act. Wyoming, the American Petroleum Institute (API), and the Independent Petroleum Association of America and Western Energy Alliance, referred to collectively as the Associations, intervened and supported the repeal.

Standing

The court first considered whether the plaintiffs could sue. It held that California established standing because the repeal allegedly increased the state’s costs and regulatory responsibilities by removing additional federal protections on BLM-managed lands. The court also found that California adequately alleged a procedural injury based on BLM’s alleged failure to comply with NEPA.

The court held that the citizen groups lacked standing for their APA claims. Their declarations described past or hypothetical environmental harms and recreational and aesthetic injuries from hydraulic fracturing generally, but did not sufficiently connect those injuries to the repeal or show that restoring the 2015 rule would remedy them. The court nevertheless held that the citizen groups had standing to pursue procedural NEPA and ESA claims because their declarations identified concrete interests in specific locations, species, and habitats and showed that the challenged action could affect those interests.

APA Claim

The court applied the APA’s arbitrary-and-capricious standard, under which an agency action may be set aside if the agency failed to consider relevant factors, offered an explanation contrary to the evidence, or otherwise failed to provide a rational explanation. The court applied the rule for agency policy changes from FCC v. Fox Television Stations: an agency must recognize that it is changing course, show that the new policy is legally permissible, believe the new policy is better, and provide good reasons for the change.

The court concluded that BLM satisfied those requirements. BLM explained that additional state and tribal regulations, existing BLM regulations, and industry guidance made the 2015 rule duplicative and unnecessarily costly. BLM also analyzed the costs and foregone benefits of repeal, including environmental protections and nationwide regulatory consistency. Although the court stated that BLM could have provided more detail, it found that the agency gave an adequate reasoned explanation and that the record did not compel a different result.

The court declined to decide whether BLM had statutory authority to issue the 2015 rule. It said that the 2015 rule was not before it and that BLM had not conceded that it lacked authority; instead, BLM had cited the previous litigation as part of its reasoning for repeal.

NEPA Claim

The plaintiffs argued that BLM should have taken a hard look at the repeal’s environmental effects and prepared an Environmental Impact Statement (EIS). The court rejected the claim because the 2015 rule had been enjoined before it took effect. As a result, the court found that the repeal did not change the environmental status quo: hydraulic fracturing operations remained governed by preexisting BLM regulations and state and tribal regulations both before and after the repeal. The court therefore concluded that NEPA did not apply to the repeal under the unusual facts of this case.

ESA Claim

The citizen groups argued that BLM violated the ESA by failing to consult with the Fish and Wildlife Service before repealing the 2015 rule. BLM had determined that the repeal would have no effect on listed species or their habitats because it would not authorize or prohibit hydraulic fracturing operations or change the number of such operations.

The court held that BLM provided a rational connection between the facts and its no-effect determination. It relied on existing environmental protections, BLM’s authority to impose site-specific measures, and the fact that the repeal did not remove ESA protections applied through site-specific analyses. The court found that BLM’s determination was not arbitrary and capricious.

Disposition

The court granted the federal defendants’ motions for summary judgment on all grounds and denied the plaintiffs’ motions for summary judgment. It also granted Wyoming’s, API’s, and the Associations’ motions for summary judgment, limited to the reasoning in the order. Finally, the court granted the Institute for Policy Integrity at New York University School of Law leave to file an amicus brief and directed the parties to submit an agreed proposed judgment within 14 days.