[Guest post by DRJ]
Here is the .pdf version of Judge Martin L.C. Feldman’s opinion issuing a preliminary injunction lifting the Obama Administration’s moratorium on offshore drilling. (H/T cboldt.) Note that all emphasis in the quotes is mine.
The issue before the Court was plaintiffs’ argument that the government’s action — specifically Secretary Salazar’s order imposing a 6-month moratorium on offshore drilling and related activity — was arbitrary and capricious under the Outer Continental Shelf Lands Act (OCSLA), the federal law that governs offshore oil and gas leasing, and the Administrative Procedures Act (APA), the federal law that governs how the government can legally make and notify its citizens of rule changes. The APA allows government great latitude in making decisions, except decisions cannot be “arbitrary, capricious, an abuse of discretion, or not otherwise in accordance with the law.”
In applying the “arbitrary, capricious, etc” standard, the law provides that a court cannot substitute its judgment for the government’s. Instead, the court will look at the evidence and uphold the government’s action (in this case, a moratorium on drilling) if it can find a “rational basis” for what the government did. Judge Feldman quoted the U.S. Supreme Court’s statement of the standard:
The Supreme Court has explained that:
Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision 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. The reviewing court should not attempt itself to make up for such deficiencies . . . . [But the court] will, however, ‘uphold a decision of less than ideal clarity if the agency’s path may be reasonably discerned.’
Typically, this is an easy standard for government to meet. Yet here, at page 13, Judge Feldman found that the government “failed to give any consideration to an obvious alternative.” Specifically, the Court found (at page 16 et seq) that the government’s stated reason for the moratorium was the unacceptable risk posed by offshore deepwater drilling operations and the government’s inability to handle another blowout if one occurred. Essentially, Judge Feldman responded that the government moratorium was overbroad and failed to consider less onerous alternatives:
After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium. The Report, invoked by the Secretary, describes the offshore oil industry in the Gulf and offers many compelling recommendations to improve safety. But it offers no time line for implementation, though many of the proposed changes are represented to be implemented immediately. The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the thirty-three permitted rigs also reached by the moratorium. It is incident specific and driven: Deepwater Horizon and BP only. None others. While the Report notes the increase in deepwater drilling over the past ten years and the increased safety risk associated with deepwater drilling, the parameters of “deepwater” remain confused. And drilling elsewhere simply seems driven by political or social agendas on all sides.
The opinion continues by detailing more conflicts between the stated reasons for the government’s moratorium and their impact, followed by this conclusion:
The Court cannot substitute its judgment for that of the agency, but the agency must “cogently explain why it has exercised its discretion in a given manner.” State Farm, 463 U.S. at 48. It has not done so.
The Deepwater Horizon oil spill is an unprecedented, sad, ugly and inhuman disaster. What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm. While the implementation of regulations and a new culture of safety are supportable by the Report and the documents presented, the blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.
On the record now before the Court, the defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review.
The Court further points out that the government failed to balance “the concern for environmental safety with the policy of making leases available for development” or to consider alternatives such as targeted suspensions, and indicated that evidence of balance might have yielded a different result. (Thus, on page 22 of the opinion, the Court states that targeted suspensions of activities “could outweigh the impact on the plaintiffs and the public” — suggesting that if the government had not acted in such an overbroad manner, the injunction might not have been granted.)
Finally, in granting a preliminary injunction, the law requires Judge Feldman find that plaintiffs showed:
(1) a substantial likelihood of prevailing on the merits;
(2) a substantial threat of irreparable injury if the injunction is not granted;
(3) the threatened injury outweighs any harm that will result to the non-movant if the injunction is granted; and
(4) the injunction will not disserve the public interest.
Preliminary injunctions are rarely granted and the appeals court will carefully scrutinize the standards applied and findings made by the Court. But Judge Feldman’s statement of the applicable law is basic and accepted by the federal courts. Thus, the appeals court will focus on whether the Court’s factual findings are
appropriate erroneous and, FWIW, I think the government will have a difficult time overturning this decision on appeal.
UPDATE: As Arch points out in the comments, Judge Feldman also found that the government incorrectly stated expert opinion (at page 3):
“Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them. A factor that might cause some apprehension about the probity of the process that led to the Report.”
As the Court states, incorrect statements are awkward at best for the government’s case but, as I understand the law, Judge Feldman still had the burden of reviewing all the facts and circumstances and deciding if there was a rational basis for what the government did. The fact that the government’s experts actually opposed the government’s position didn’t help, but I don’t think it is the overriding reason for the decision.