Case Information
*3 CALLAHAN, Circuit Judges, join, dissenting from the denial of rehearing en banc:
I respectfully dissent from denial of rehearing en banc in
this case, which concerns decisions by the Bureau of Safety
and Environmental Enforcement (BSEE) not to engage in
consultation pursuant to the Endangered Species Act (ESA),
and not to prepare an environmental impact statement (EIS)
pursuant to the National Environmental Policy Act (NEPA),
before approving Shell’s oil spill response plans for offshore
drilling in the Beaufort and Chukchi Seas. The majority’s
ESA analysis rests first on an erroneous decision to grant
BSEE
Chevron
deference, based on the majority’s finding an
ambiguity in the statute where none exists, and second on an
incorrect analogy to
National Association of Home Builders
v. Defenders of Wildlife
,
The majority’s decision in this case encourages federal
agencies to abrogate their oversight by deciding that a
*4
statute’s requirements limit their discretion to the point of
taking the ESA and NEPA off the table. The majority invites
federal agencies to ignore their ESA and NEPA obligations,
await a challenge, and then defend their inaction under the
guise of
Chevron
deference. However, the federal courts
should not be so eager to accept, under the guise of
Chevron
,
an agency decision that violates existing case law interpreting
the ESA and NEPA, as well as the very logic of those
statutes.
Chevron
was meant to prevent courts from imposing
their own construction of a statute where Congress has not
“directly addressed the precise question at issue.”
Chevron,
U.S.A., Inc. v. Nat. Res. Def. Council, Inc.
,
I.
A central flaw in the majority’s decision is that it finds an
ambiguity in 33 U.S.C. § 1321(j)(5) where none exists.
According to this statute, part of the 1990 amendments to the
CWA passed after the Exxon
Valdez
disaster, an oil
company’s oil spill response plan must show that the
company is capable of “responding, to the maximum extent
practicable, to a worst case discharge, and to a substantial
threat of such a discharge, of oil or a hazardous substance.”
33 U.S.C. § 1321(j)(5)(A)(i). To comply, the proposed plans
must meet six specific requirements.
33 U.S.C.
§ 1321(j)(5)(D). The statute then directs that the President
“shall” take several actions after an oil company submits its
plan: “promptly review” it, “require amendments” to a plan
that does not meet the statutory requirements, and “approve
any plan” that does meet the requirements. 33 U.S.C.
§ 1321(j)(5)(E). According to the majority, the “shall”
language suggests that BSEE “
must
approve” any conforming
*5
6
A LASKA W ILDERNESS L EAGUE V . J EWELL
plan, and thus has no discretion over the adequacy of the
plans.
Alaska Wilderness League v. Jewell
,
However, there is no ambiguity in the statute that
warrants
Chevron
deference. The CWA amendments
unambiguously give BSEE discretion over oil spill response
plan approval. Section 1321(j)(5)(A)(i) requires an oil spill
response plan to respond “to the maximum extent practicable
to a worst case discharge, and to a substantial threat of such
a discharge, of oil or a hazardous substance.” According to
the majority, “the open-ended nature of [this] phrase . . .
suggests agency discretion.”
Alaska Wilderness
,
The majority is wrong that the statute’s “halves do not
correspond to each other.”
Id.
at 1220. Like the broad
language in § 1321(j)(5)(A)(i), one of the six explicit criteria
requires removal of a worst case discharge “to the maximum
extent practicable.” 33 U.S.C. § 1321(j)(5)(D)(iii).
Accepting the majority’s conclusion that this phrase
“suggests agency discretion,” there is no ambiguity entitling
BSEE to
Chevron
deference on the issue of its discretion,
because the phrase appears in both parts of the statute.
See
Chevron
,
As explained more fully below, this case is unlike
Home
Builders
because the statutory duty at issue does not restrict
BSEE’s discretion over approval of oil spill response plans.
The majority makes much of the statute’s requirement that
BSEE “shall” approve any plan that “meets the requirements
of this paragraph,” but it ignores the substance of those
requirements. 33 U.S.C. §§ 1321(j)(5)(E)(i) & (iii). The
requirements do not constitute mere “triggering events,” as in
Home Builders
; they require a thorough evaluation of a
response plan.
Home Builders
,
First, one of statute’s explicit requirements is that
response plans must “be consistent with the requirements of
the National Contingency Plan [NCP] and Area Contingency
Plans.” 33 U.S.C. § 1321(j)(5)(D)(i). The NCP contains
numerous phases of operational responses to a spill, including
a special response to worst case discharges,
see
40 C.F.R.
§§ 300.300–300.335, and includes several protections for
endangered species.
See, e.g.
, 40 C.F.R. § 300.135(k). The
NCP also requires that environmental evaluations “be
performed to assess threats to the environment, especially
sensitive habitats and critical habitats of species protected
under the [ESA].” 40 C.F.R. § 300.430(e)(2)(i)(G).
However, the majority does not explain how BSEE could
determine whether a response plan meets the NCP’s
numerous independent requirements if BSEE’s oversight role
is truly just to check the boxes in a “checklist.”
Alaska
Wilderness
,
Second, the CWA amendments require that a company’s
response plan “remove . . . a worst case discharge,”
specifically defining
the
term “remove”
to mean
“containment and removal of the oil . . . from the water and
shorelines or . . . such other actions as may be necessary to
prevent, minimize, or mitigate damage to the public health or
welfare, including . . . fish, shellfish, wildlife, and public and
private property, shorelines, and beaches.” 33 U.S.C.
§ 1321(a)(8). Whether an oil spill response plan provides the
means to “remove” a worst case discharge is also a question
*7
that requires evaluation of the plan—it is not simply a
“triggering event[].”
Home Builders
,
Third, other sections of the CWA governing the federal
government’s spill plans, 33 U.S.C. §§ 1321(d)(1)–(2) &
(j)(4)(B)–(D), contain the same “shall” language as the
sections governing oil spill response plans, yet are
undisputedly subject to ESA consultation. The majority
asserts that “[t]hese provisions . . . are different,” but does not
say why.
Alaska Wilderness
,
Fourth, the majority attempts to distinguish response plan
approval from the NCP, which according to the statute should
“include, but not be limited to” a number of factors “that
might be deemed necessary after an ESA consultation
occurs,” including “water pollution control and conservation
and trusteeship of natural resources (including conservation
of fish and wildlife).” 33 U.S.C. § 1321(d)(2);
Alaska
Wilderness
,
Fifth, as the dissent explained, BSEE’s implementing
regulations make clear that the agency can exercise its
discretion to benefit protected species.
Alaska Wilderness
,
BSEE reasoned that its implementing regulations define “maximum extent practicable” as “within the limitations of available technology, as well as the physical limitations of personnel, when responding to a worst case discharge in adverse weather conditions.” 30 C.F.R. § 254.6; Federal Defendants’ Opposition to Rehearing En Banc at 12–13. According to BSEE, nothing in this language gives it the discretion to consider a wide range of factors consistent with the general meaning of the word “maximum.” Id. at 12. That argument persuaded the majority. But Judge Nelson’s dissent persuasively explains the unreasonableness of this reasoning. See Alaska Wilderness , 788 F.3d at 1229 (Nelson, J., dissenting). Even under BSEE’s definition of “maximum extent practicable,” BSEE must determine whether Shell’s response plans met the standard. And, as even the majority reasoned, the term “maximum extent practicable” “suggests agency discretion because of [its] open-ended nature . . . .” Id. at 1220.
Finally, further evidence that the CWA amendments
contemplated active review comes from 33 U.S.C.
§§ 1321(j)(5)(E)(ii) & (iii), which direct BSEE to “require
*9
amendments to any plan that does not meet the requirements
of this paragraph,” or to approve a plan that does meet them.
That Congress has given BSEE the responsibility to decide
whether an oil spill response plan meets the statutory criteria,
and has directed the agency to require amendments to
nonconforming plans, is further evidence that the statute
imparts discretion. Nowhere does the majority explain why
Congress would task BSEE with requiring amendments to a
nonconforming plan if it truly sought to cabin the agency’s
discretion or to make the requirements of the CWA
amendments mere “triggering events.”
Home Builders
,
The approval process for oil spill response plans requires agency discretion. It was wrong to grant BSEE Chevron deference on this issue.
II.
Two flawed holdings flow from the majority’s erroneous Chevron determination. Specifically, the majority narrowed the application of both the ESA and NEPA. First, the majority’s approach sets a dangerous precedent for ignoring ESA § 7. Undisputedly, ESA consultation is only required when an agency takes a “discretionary” action. 50 C.F.R. § 402.03. As explained above, however, response plan approval pursuant to the requirements of 33 U.S.C. § 1321(j)(5)(D) is discretionary because it requires BSEE to analyze whether the requirements have been met. BSEE should therefore be required to consult under the ESA. The majority concluded otherwise based on its incorrect analogy to Home Builders. At issue in Home Builders was a requirement in CWA § 402(b) that the Environmental Protection Agency (EPA) “shall approve” a transfer of CWA permitting authority from the federal government to a state upon a showing that the state had met nine specified criteria. [1] Home Builders , 551 U.S. at 650–51. The Supreme Court described the “shall approve” language in CWA § 402(b) as “mandatory” and held that EPA did not have discretion to deny a transfer application. Id. at 661. Because the ESA required consultation for all discretionary agency actions, the Court’s majority concluded that application of the ESA would impermissibly “engraft[] a tenth criterion onto the CWA.” Id. at 663. Here, the majority claims that, like CWA § 402(b), the six requirements for response plan approval in 33 U.S.C. § 1321(j)(5)(D) are mandatory, and the ESA is not applicable.
However, this case differs from Home Builders for at least three reasons. First, Home Builders hinged partially on the fact that the ESA was passed after the CWA, and did not explicitly overrule CWA § 402(b). Home Builders , 551 U.S. [1] To become the permitting authority, the state must demonstrate that it has the ability: (1) to issue fixed-term permits that apply and ensure compliance with the CWA’s substantive requirements and which are revocable for cause; (2) to inspect, monitor, and enter facilities and to require reports to the extent required by the CWA; (3) to provide for public notice and public hearings; (4) to ensure that the EPA receives notice of each permit application; (5) to ensure that any other State whose waters may be affected by the issuance of a permit may submit written recommendations and that written reasons be provided if such recommendations are not accepted; (6) to ensure that no permit is issued if the Army Corps of Engineers concludes that it would substantially impair the anchoring and navigation of navigable waters; (7) to abate violations of permits or the permit program, including through civil and criminal penalties; (8) to ensure that any permit for a discharge from a publicly owned treatment works includes conditions requiring the identification of the type and volume of certain pollutants; and (9) to ensure that any industrial user of any publicly owned treatment works will comply with certain of the CWA’s substantive provisions. 33 U.S.C. §§ 1342(b)(1)–(9).
at 662. But here, 33 U.S.C. § 1321(j)(5) postdates the ESA by seventeen years. There is no concern here, as there was in Home Builders , that ESA consultation would implicitly amend a prior statute.
The second distinction is that in
Home Builders
, the
parties appeared to agree that the state had authority to
perform each of the nine enumerated functions in CWA
§ 402(b).
Home Builders
,
Third, the conditions in § 1321(j)(5)(D) that must be met
for response plan approval are substantively different than the
conditions for state permitting authority in
Home Builders
.
There, the Supreme Court characterized the conditions as
*11
“triggering events” with a mechanical cause and effect.
Home Builders
,
By not correcting the majority’s holding through en banc rehearing, we have permitted a gross alteration of Supreme Court precedent and given federal agencies unwarranted and unprecedented authority over whether their statutory duties are discretionary or not, which directly impacts whether ESA consultation is required. ESA consultation is required for “any action authorized, funded, or carried out by” a federal agency—with the rare exception for cases such as Home Builders , where a statute’s requirements are clearly “triggering events” rather than independent requirements, and where there is no dispute that the requirements have been met. Neither is true of the statute at issue here, 33 U.S.C. § 1321(j)(5). This is clear from the statute itself, and the majority was wrong to adopt the agency’s contrary interpretation under the guise of Chevron .
The majority’s decision also misapplies NEPA precedent.
NEPA requires federal agencies to prepare an EIS for all
“major Federal actions significantly affecting the quality of
the human environment.” 42 U.S.C. § 4332(2)(C). In a
narrow exception, NEPA does not apply where an agency
lacks the discretion to consider environmental values in its
decision making process.
See Dep’t of Transp. v. Public
Citizen
, 541 U.S. 752, 767–69 (2004). Here, the majority
held that BSEE reasonably concluded that it “must approve
any [response plan] that meets the statutory requirements.”
Alaska Wilderness
,
A LASKA W ILDERNESS L EAGUE V . J EWELL
15
without deciding, that BSEE’s approval of Shell’s [response
plans] constitutes a ‘major Federal action,’ its approval is not
subject to NEPA’s requirements.”
Id.
The majority
analogized this case to
Public Citizen
, where the governing
statute required
the Federal Motor Carrier Safety
Administration (FMCSA) to register a person to provide
transportation as a motor carrier if it found the person willing
and able to comply with the statute’s requirements.
Public
Citizen
,
The majority’s analogy to
Public Citizen
is
unsupported. As explained above, § 1321(j)(5)(D) imposes
a discretionary duty on BSEE. In
Public Citizen
, the
Supreme Court held that FMCSA did not have to account for
certain environmental effects in its environmental assessment
because it had “no ability to countermand” executive action
by the President, so its action did not have a “reasonably
close causal relationship” to any negative environmental
impacts.
Public Citizen
,
III.
I agree with the majority that the ESA and NEPA do not require an agency to provide redundant analysis. NEPA and its implementing regulations accommodate this concern by allowing agencies to take a “tiered” approach to environmental review. See 40 C.F.R. § 1502.20 (encouraging tiering of NEPA review). We have also allowed for tiering of ESA review. See Gifford Pinchot Task Force v. U.S. Fish & Wildlife Serv. , 378 F.3d 1059, 1067–68 (9th Cir. 2004). Thus, BSEE’s NEPA and ESA review of the proposed [agency’s] interpretation of NEPA . . . because NEPA is addressed to all federal agencies and Congress did not entrust administration of NEPA to [BSEE] alone.” Grand Canyon Trust v. Fed. Aviation Admin. , 290 F.3d 339, 342 (D.C. Cir. 2002). Moreover, Congress demonstrated in the CWA that it knows how to exempt agency approvals from environmental review. See 33 U.S.C. § 1371(c) (exempting certain actions by EPA from NEPA review). That Congress did not similarly exempt BSEE’s oil spill response plan approval, pursuant to the CWA, from NEPA or ESA review strongly suggests that Congress intended the statutes to apply. 17 approval of Shell’s oil spill response plans need not be burdensome or redundant if the foreseeable impacts of approving the plans, and reasonable alternatives, were already addressed in an EIS and biological opinion completed at an earlier stage of development. If this were the case, BSEE could, for example, prepare a shorter environmental assessment tiered to the earlier EIS to satisfy NEPA. See C.F.R. § 1508.9 (describing an environmental assessment). Here, the majority does not address whether BSEE satisfied NEPA and the ESA through tiered environmental review. Rather, the majority rules that oil spill response plan approval is exempt from the ESA and NEPA altogether.
It is true that BSEE reviewed Shell’s oil spill response plans only after other higher-level planning activities, including preparing an EIS for each of its five-year leasing programs and preparing a biological opinion evaluating the *14 likelihood that drilling will jeopardize species protected by the ESA. See, e.g. , NMFS, Beaufort and Chukchi Seas Biological Opinion, http://goo.gl/YECHFu. But an oil spill response plan may raise significant environmental risks beyond those analyzed at a granular level at a previous stage of development. For example, alternative means of containing an oil spill, such as the controversial use of dispersants, may themselves significantly impact listed species, other environmental resources, and the safety of first responders and the public to varying degrees. Review of these risks and of alternative response actions would not be redundant or duplicative if they were not considered in a previous EIS and biological opinion. Indeed, the higher planning levels govern the whole gamut of offshore drilling operations. Oil spill response plans—while nominally a “lower,” implementation-level action—are the first component to be deployed when a spill actually happens. It is ill-advised for the court to accept, under the guise of Chevron , BSEE’s refusal to complete NEPA and ESA review of these plans, especially since these plans may not be as effective in redressing spills and preserving the environment as they could be with environmental review of alternatives and input from federal wildlife agencies.
I also emphasize this case’s importance notwithstanding Shell’s recent suspension of its Arctic drilling program. Although the program is on hold, and the administration has recently canceled existing Arctic lease sales, oil markets are cyclical and it is all but certain that higher future oil prices, a warming Arctic, or both will once again make drilling in the Arctic cost-effective. The Department of the Interior’s latest five-year drilling plan still includes offshore lease sales in Alaska. Whenever Shell begins its Arctic drilling permitting process again, BSEE will give Shell’s oil spill response plans the same cursory review it did here. If this case is not corrected by Supreme Court review, it will have two severe consequences. First, it will preclude judicial review of oil spill response plans when Shell’s Arctic drilling plans resume. In light of BSEE’s obvious reluctance to give the term “maximum extent practicable” its natural meaning in 33 U.S.C. §§ 1321(j)(5)(A)(i) & (j)(5)(D)(iii), it is undeniable that Shell’s oil spill response plans will not be as responsive to the needs of endangered and threatened species as they would be with ESA consultation. And it is all but certain that BSEE’s review of the response plans—the first line of defense in the event of a major oil spill—will be far more cursory than it would be if the public process, review of *15 foreseeable impacts, and consideration of alternatives necessary under NEPA were provided.
Second, and equally important, our court now has chosen
to accept an agency’s own opinion about the scope of its
discretion in order to make this case fit into the narrow
exceptions of
Home Builders
and
Public Citizen
. By ignoring
our proper role in this litigation, we have enabled BSEE’s
abrogation of its oversight role over response plan approval,
and we have invited other federal agencies to do the same any
time a statutory duty could arguably be cast as “mandatory”
or “nondiscretionary.” The message we send to agencies, and
to oil companies, is “we trust you and will rely on your
judgment without review by federal agency experts and
public input.” This is not the role envisioned by Congress
when it passed the 1990 CWA amendments, which require an
oil spill response plan to demonstrate its ability to respond,
“to the maximum extent practicable, to a worst case
discharge,” or when it passed the ESA, which requires
“[e]ach Federal agency” to consult with federal wildlife
agencies to “insure that any action authorized, funded, or
carried out by such agency” is not likely to jeopardize
protected species or adversely modify their critical habitat.
33 U.S.C. § 1321(j)(5)(A)(i); 16 U.S.C. § 1536(a)(2). It is
not the role envisioned by NEPA, which mandated that “all
agencies” shall utilize a “systematic, interdisciplinary
approach” in planning and decision making, and shall prepare
an EIS for all major federal actions significantly affecting the
human environment, which include “any irreversible and
irretrievable commitments of resources which would be
involved in the proposed action should it be implemented.”
42 U.S.C. § 4332. It is not the role for the courts
Chevron
envisioned by approving deference to an agency’s
“permissible construction of the statute” only in response to
statutory ambiguity.
Chevron
,
By not correcting the majority’s holding through en banc review, we have let stand a decision that misapplies core principles of administrative and environmental law, and have set a dangerous precedent of deferring to a federal agency’s view of its own discretion, even when a statute is not ambiguous. I respectfully dissent.