The State of California, together with the State of New Mexico, and a coalition of seventeen conservation and tribal citizens groups, brought suit against the Bureau of Land Management (the “Bureau”), Secretary of the Department of the Interior Ryan Zinke, and Acting Assistant Secretary for Land and Minerals Management, Department of the Interior Katharine S. MacGregor (collectively, “Defendants”), alleging that Defendants violated the Administrative Procedures Act (“APA”) when the Bureau published a notice in the Federal Register postponing the compliance dates for certain sections of the Waste Prevention, Production Subject to Royalties,
I. BACKGROUND
On November 18, 2016, the Bureau, an agency within the U.S. Department of the Interior, issued the Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule (the “Rule”). See 81 Fed. Reg. 83,008. The Rule’s purpose was to “reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore Federal and Indian (other than Osage Tribe) leases ... [and] also clarify when produced gas lost' through venting, flaring, or leaks is subject to royalties, and when oil and gas production may be used royalty-free on-site.” Id The Rule was promulgated to replace the then-existing regulations related to venting, flaring, and royalty-free' use of gas contained in the 1979 Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil and Gas Lost (NTL-4A). Id The Rule’s effective date was January 17, 2017. Id.
The Bureau began developing the Rule in 2014 in response to reviews from the Government Accountability Office and the Department of the Interior’s Office of the Inspector General which concluded that the Bureau’s then-existing regulations regarding waste and royalties were “insufficient and outdated.” Id at 83,009-10. The regulations in place in 2014 had not been revisited in at least three decades. Id. at 83,008. After receiving input from various stakeholders and the public, the Bureau released its proposed rule in February 2016. See 81 Fed. Reg. 6,616 (Feb. 8, 2016) (the “Proposed Rule”). To assist in gathering stakeholder comment before publishing the Proposed Rule, the Bureau conducted a series of forums in Colorado, New Mexico, North Dakota, and Washington, D.C., and held numerous meetings and calls with state representatives, individual companies, trade associations, and non-governmental organizations. Id. at 6,617. The Bureau received approximately 330,000 public comments on -the Proposed Rule. See 81 Fed. Reg. 83,021.
At the time the Bureau finalized the Rule in November' 2016, two industry groups and the States of Wyoming and Montana (later joined by North Dakota and Texas as intervenors) filed legal challenges to the validity of the Rule in federal court in Wyoming. See Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280-SWS (D. Wyo. filed Nov. 15, 2016); State of Wyoming et al. v. United States Dep’t of the Interior et al., Case No. 16-cv-00285-SWS (D. Wyo. filed Nov. 18, 2016). They alleged that the Bureau did not have statutory authority to regulate air pollution and that the Rule was arbitrary and capricious.
On January 17, 2017, the Rule went into effect. Approximately two months later, on March 28,2017, the President issued Executive Order No. 13783, which instructed each executive agency to review all agency actions to identify those that:
potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise,' or rescind those' that unduly burdenthe development of domestic energy-resources beyond the degree necessary to protect the public interest or otherwise comply with the law.
82 Fed. Reg. 16,093. On March 29, 2017, Secretary Zinke issued Secretarial Order No. 3349 to implement the executive order as it pertains to the regulatory actions of the Department' of the Interior. See Secretarial Order No. 3349, available at https:// www.doi.gov/sites/doi.gov/files/uploads/so_ 3349_-american_energy_independence.pdf.
On June 15, 2017, the Bureau issued a notice in the Federal Register that it was postponing the compliance dates for certain sections of the Rule. See Waste Prevention, Production Subject to Royalties, and Resource Conservation; Postponement of Certain Compliance Dates, 82 Fed. Reg. 27,430 (the “Postponement Notice”). The postponed sections of the Rule were subject to a compliance date of January 17, 2018. Id. The Postponement Notice invoked Section 705 of the APA and concluded that “justice requires [the Bureau] to postpone the future compliance dates for [certain] sections of the Rule” in light of “the substantial cost that complying with these requirements poses to operators ... and the uncertain future these requirements face in light of the pending litigation and administrative review of the Rule.” Id. at 27,431. The “pending litigation” referred to the legal challenges in the District of Wyoming. Id. The Postponement Notice stated that the Bureau interpreted the January 17, 2018 compliance date for these sections of the Rule to be “within the meaning of the term ‘effective date’ as that term is used in Section 705 of the APA.” Id. It further explained that the Bureau “believes the [Rule] was properly promulgated,” but determined that “[postponing these compliance dates will help preserve the regulatory status quo while the litigation is pending and the Department reviews and reconsiders the Rule.” Id. The Postponement Notice did not apply to provisions of the Rule with compliance dates that had already passed. Id. It concluded by noting that the Bureau “intend[ed] to conduct notice-and-comment rulemaking to suspend or extend the compliance dates of those sections affected by the Rule.” Id.
In a status report filed in the District of Wyoming litigation on September 1, 2017, the Bureau stated that it has drafted a proposed rule to suspend certain provisions of the Rule that were affected by the Postponement Notice and that proposed notice is currently under review by the Office of Information and Regulatory Affairs in the Office of Management and Budget before it is published for comment. See Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280-SWS, Dk. No. 131; State of Wyoming et al. v. United States Dep’t of the Interior et al., Case No. 16-cv-00285-SWS, Dkt. No. 136. According to the same status report, the Bureau is also developing a proposed rule to revise the Rule pursuant to Executive Order No. 13783. Id.
II. PROCEDURAL HISTORY
Plaintiffs the State of California and the State of New Mexico filed suit on July 5, 2017, alleging that the decision by Defendants to postpone certain compliance dates of the Rule, violated the APA. On July 12, 2017, the Court granted Plaintiffs’ unopposed motion to relate this case to another case pending before this Court, Sierra Club et al. v. Zinke et al., Case No. 17-cv-03885-EDL, which was filed by seventeen conservation and tribal organizations (the “Conservation and Tribal Citizen Groups” or the “Groups”)
On July 26, 2017, the State of California and the State of New Mexico filed a motion for summary judgment in State of California et al. v. U.S. Bureau of Land Management et al., Case No. 17-cv-03804-EDL. The next day, on July 27, 2017, the Conservation and Tribal Citizen Groups filed a motion for summary judgment in Sierra Club et al. v. Zinke et al., Case No. 17-cv-03885-EDL. Defendants opposed the motions, and Intervenors joined in Defendants’ opposition briefs. Intervenors have not filed separate motions for summary judgment or oppositions to Plaintiffs’ motions.
On July 26, 2017, Defendants filed a motion to transfer these cases to the United States District Court for the District of Wyoming. As noted above, Defendants are currently defending a challenge to the validity of the Rule before that court. The States of California and New Mexico and, separately, the Conservation and Trial Citizens Groups filed opposition briefs to the motion to transfer on August 9, 2017. The parties agreed that the motion to transfer was suitable for decision without a hearing. On August 10, 2017, Defendants moved to stay briefing and the hearing on Plaintiffs’ motions for summary judgment in both cases on the grounds that the Court should first resolve Defendants’ motion to transfer the cases to the District of Wyoming. Plaintiffs opposed the motion. The Court denied Defendants’ motion to stay on August 23, 2017, concluding that a stay would not meaningfully conserve judicial resources and that Plaintiffs had shown more than a fair possibility of harm due to the proposed stay, while Defendants had not established “a clear case of hardship or inequity” required for a stay. On September 7, 2017, the Court denied the motion to transfer, concluding that, among other reasons, there were no overlapping factual or legal issues that warranted overriding Plaintiffs’ choice of forum. Case No. 17-cv-3804, Dkt. No. 73; Case No. 17-cv-3885, Dkt. No. 62.
Upon reviewing inquiries from numerous groups seeking to file amicus briefs regarding Plaintiffs’ motions for summary
III. LEGAL STANDARD
Summary judgment shall be granted if “the pleadings, .discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ, Pro. 56(c). Material facts are those which may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc.,
A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion, and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett,
IV. DISCUSSION
A. Conservation and Tribal Citizen Groups’ Standing
The Conservation and Tribal Citizen Groups briefed their standing to bring their lawsuit under the doctrine of associational standing. Defendants have -not opposed the Conservation and Trial Citizens Groups’ motion for summary judgment for lack of standing.
Under the doctrine of associational standing, “an association has. standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks, to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Wash. State Apple Advert., Comm’n,
' As to the interests being germane, the Groups have submitted declarations affirming that “reducing waste and air and climate pollution from oil and gas development on public lands is central to the Conservation and Tribal Citizen Groups’ institutional missions.” Groups’ Mot. at 20; Ex. 1, Standing Decís, at 1, 75, 90-91, 102, 106, 119, 128, 136. The Groups were also actively involved in the development of the Rule and defending the Rule’s validity in the District of Wyoming litigation. See Groups’ Mot., Ex. 1. As to the third element, as the issues raised here are purely legal and do not require any involvement of the individual members or their “unique facts” to resolve the issues raised or grant the relief sought. See Int’l Union, United Auto, Aerospace & Ag. Implement Workers of Am. v. Brock,
The injuries discussed above are traceable to the postponement of the Rule because the postponed provisions would have reduced waste of royalty-bearing resources and reduce emissions of air pollutants and greenhouse gases. A ruling in the Groups’ favor .vacating the Postponement Notice and directing the Bureau to implement the Rule would redress their members’ injuries.
Accordingly, the Groups have associational standing to bring this lawsuit.
B. Timing of Motions
Defendants contend that the Court should not reach the merits of Plaintiffs’ motions for summary judgment because they are premature, having been filed before Defendants have answered the complaint, before the initial case management conferences, and before Defendants have filed an administrative record. They argue that Plaintiffs are seeking to evade the
These motions are timely under Rule 56 and the Court is fully able to resolve the motions at this phase of the litigation because they are limited to legal issues that do not depend on the administrative record, aside from the few key documents the parties cited in their motions, which the Defendants do not dispute are subject to judicial notice.
C. Standard of Review
As the parties are aware, this Court recently decided a case against the Department of the Interior that raised many of the same issues presented in this case. See Becerra v. U.S. Dep’t of Interior, Case No. 17-cv-02376-EDL,
As Plaintiffs persuasively argue, the Bureau’s decision to postpone the Rule is not entitled to deference. Chevron U.S.A., Inc. v. Natural Res. Def. Council,
The underlying dispute here, however, centers upon the Bureau’s application of section 705 of the APA. Under Mead Corp., “administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” Mead,
Defendants have not pointed to any authority delegating the Bureau authority to interpret section 705 of the APA. As in Becerra, Defendants have failed to show that the Bureau’s interpretation of section 705 of the APA is entitled to deference.
D. The Bureau’s Invocation of Section 705 of the APA
On June 15, 2017, the Bureau relied on Section 705 of the APA to postpone the compliance date for certain sections of the Rule. Section 705 provides:
When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as maybe required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court- to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.
Plaintiffs argue .that postponing implementation of the Rule after it has already gone into effect runs afoul of the plain language of Section 705. Plaintiffs point to the only decision on this issue, Safety-Kleen Corp. v. Envtl. Prot. Agency, 1996 U.S. App. LEXIS, at *2 (D.C. Cir. Jan. 19, 1996), which held that Section 705 does not permit an agency to suspend a promulgated rule without notice and comment.
In Becerra, as in this case, Defendants contended that the term “effective date” in Section 705 encompasses .effective dates and compliance dates. This is also the reasoning set forth in the Postponement Notice itself. See 82 Fed. Reg. 27,430. To support their position, Defendants raise several arguments. Defendants argue that in many instances, an agency will not have time to exercise its Section 705 authority after a lawsuit is filed and before the challenged rule’s stated effective date, thus rendering the authority provided by the statute of little use. Defendants also argue that “compliance dates” are the “dates with teeth,” and Section 705 is meant to allow an agency to maintain the status quo pending judicial review.
In Becerra, the Court rejected all of Defendants’' arguments. See Becerra,
Upon consideration of the motion of in-tervenors to'vacate administrative stay, the responses thereto and the reply, it is ORDERED that the motion be granted. Respondent improperly justified the stay based on 5 U.S.C. § 705 (Í994). That statute permits an agency to postpone the effective date of a not yet effective rule, pending judicial review. It does not permit the agency to suspend without notice and comment a promulgated rule, as respondent has attempted to do here. If the agency determines the rule is invalid, it may be.able to take advantage of the good cause exception, 5 U.S.C. § 553(b).
Safety-Kleen Corp., 1996 U.S. App. LEXIS, at *2-3.
This reasoning is equally applicable here. Effective and compliance dates have distinct meanings. See Silverman v. Eastrich Multipie Inv’r Fund, L.P.,
Defendants argue that this case is distinguishable from Becerra for two main reasons. First, they contend that the Bureau did not postpone the entire Rule at issue here, whereas the Department of the Interior had postponed the entire rule that was the subject of the litigation in Becerra. Defendant argue that this distinction is important because the Postponement Notice preserved the status quo by leaving in place the parts of the Rule that were
This reasoning is circular at best. It tacitly acknowledges that the. Postponement Notice did not maintain the status quo for those parts of the Rule with a compliance date of January 17, 2018 because the year leading up to that date was intended to give operators in the oil and gas industry the time they needed to adjust their operations to come into compliance. At the time that the Bureau issued the Postponement Notice on June 15,2017, the regulated parties either had to start preparing or continue preparing to make the necessary changes in light of the Rule’s impending compliance date. Similar to the regulation at issue in Becerra, the Rule imposed compliance obligations starting on its effective date of January 17, 2017 “that increased over time but did not abruptly commence” on January 17, 2018. Becerra,
Second, Defendants argue that the Rule at issue here, unlike the one in Becerra, specifically referenced compliance dates in the regulation that were meant to phase in over time, which thereby established at least two different “effective dates” under the Rule. Defendants analogize the one-year period between the January 17, 2017 effective date and the January 17, 2018 compliance date with the period between publication of a final rule and its effective date. During the time between publication and its effective date, Section 705 expressly permits the agency to invoke its Section 705 authority pending judicial review. According to Defendants, by analogy, the agency should also be able to use Section 705 after the official effective date but before the January 17, 2018 compliance date comes due because the compliance date is functionally equivalent to a second effective date. Not only is this argument contrary to the plain language of the statute, but it collapses the clear statutory distinction between the two periods before and after a rule takes effect.
The remaining arguments that Defendants repeat from Becerra are likewise unavailing here. With • respect to Defendants’ claim that limiting Section 705 to situations where the effective date of a regulation has not passed would unduly hamper its ability to use this authority, Plaintiffs persuasively argue that the challenges to the Rule in the District of Wyoming prove the fallacy of this argument. There, the industry groups moved quickly (in one case, even before the final Rule was published in the Federal Register) to initiate litigation challenging the validity of the Rule and seek a preliminary injunction.
Defendants’ policy argument that the Court should construe Section 705 to include “compliance dates” because Section 705 is meant to allow an agency to maintain the status quo pending judicial review is equally unpersuasive. Indeed, Defendants’ position undercuts regulatory predictability and consistency. See Price,
Finally, Defendants argue that the term “effective date” in Section 705 must be interpreted broadly based on its context in the overall scheme of the APA. Under their interpretation, the definition of effective date in Section 705 must be broader than the definition in Section 553(d) of the APA, which applies to rulemaking, because Section 705 applies more broadly to all agency action rather than just rulemaking. See 5 U.S.C. § 705 (allowing an agency to postpone “action taken by it”); 5 U.S.C. § 551(13) (defining agency action to include “the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act”). Their argument is not persuasive. While Section 705 allows the postponement of the effective date of a broader range of agency actions than a complete rule, such as a part of a rule or a license, and would have allowed the agency lawfully to postpone certain parts of the Rule, rather than its entirety, had it done so before the effective date of January 17, 2017, that possibility does not alter the plain meaning of “effective date.”
E. APA’s Notice-and-Comment Requirements
Plaintiffs also argue that Defendants violated the APA’s notice-and-comment requirements by effectively repealing the Rule without engaging in the process for obtaining comment from the public. Sections 553(b) and (c) of the APA set forth the notice-and-comment requirements for agency “rule making.” 5 U.S.C. § 553. “Rule making means agency process for formulating, amending, or repealing a rule.” 5 U.S.C. § 551(5). The retraction of a duly-promulgated regulation requires compliance with the APA’s notice-and-comment procedures. See Envt’l Def. Fund, Inc. v. Gorsuch,
Defendants respond that Section 705 does not refer to notice-and-comment requirements. Without citing any authority, Defendants also argue that notice-and-comment would impede its ability to act swiftly to maintain the status quo, as Congress envisioned when it crafted the Section 705 authority. Defendants rely on Sierra Club v. Jackson,
guide a future rule through the rulemak-ing process, promulgate a final rule, and then effectively repeal it, simply by indefinitely postponing its operative date. The APA specifically provides that the repeal of a rule is rulemaking subject to rulemaking procedures.
Nat. Res. Def. Council,
As the Court observed in Becerra, the policy underlying the statutory requirement of notice-and-comment is equally applicable to the repeal of regulations as to their adoption. See Consumer Energy Council of Am. v. Fed. Energy Regulatory Comm’n,
F. Bureau’s Justification under Section 705
In addition to contending that Defendants exceeded their power under Section 705, Plaintiffs also argue that the Postponement Notice was unlawful because it was arbitrary and capricious and did not meet the additional statutory requirements of “pending litigation” and “justice so requires.”
1. Reconsideration of the Rule
First, Plaintiffs argue that one of the Bureau’s stated justifications for the Postponement Notice was to delay compliance while it “reviews and reconsiders the Rule.” 82 Fed. Reg. 27,431. Citing Sierra Club, Plaintiffs argue that invoking Section 705 for this purpose was arbitrary and capricious because Section 705 is not applicable where “[t]he purpose and effect of 'the [Postponement] Notice plainly are to stay the rules pending reconsideration, not litigation.”
As in Sierra Club, however, Defendants have merely paid “lip service” to the pending judicial review in the District of Wyoming. See Sierra Club,
2. “Justice So Requires” and the Failure to Consider the Foregone Benefits
Alternatively, Plaintiffs argue that the Bureau’s decision was arbitrary and capricious because it only took into, account the costs to the oil and gas industry of complying with the Rule and completely ignored - the benefits that would result from compliance. It is a fundamental principle of the APA that an agency’s decision is arbitrary when it “entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfs.,
Here, based on the rationale' stated in the Postponement Notice, the Bureau entirely failed to consider the benefits of the Rule, such as decreased resource waste, air pollution, and enhanced public revenues. Defendants’ argument that Section 705 “places no limitations on an agency’s determination of what ‘justice so requires,’ ” (Defs.’ Opp. at 13), would render that language mere surplusage, contrary to a basic rule of statutory construction. If the words “justice so requires” are to mean anything, they must satisfy the fundamental understanding' of justice: that it requires an impartial look at the balance struck between the two sides of the scale, as the iconic statue of the blindfolded goddess of justice holding the scales aloft depicts. Merely to look at only one side of the scales, whether solely the costs or solely the benefits, flunks this basic requirement. As the Supreme Court squarely held, an agency cannot ignore “an important aspect of the problem.” Motor Vehicle Mfs.,
Instead of taking into account the benefits of the Rule when issuing the Postponement Notice, Defendants. premised
New presidential administrations are entitled-to change policy positions, but to meet the requirements of the APA they must give reasoned explanations for those changes and “address [the] prior factual findings” underpinning a prior regulatory regime. See Organized Vill. of Kake,
3. “Justice So Requires” and the Preliminary Injunction Test
Finally, Plaintiffs argue that the Bureau was required to apply the four-part preliminary injunction test to show that “justice so requires” postponing compliance under Section 705, which the Bureau did not reference or apply in the Postponement Notice. Plaintiffs rely on Sierra Club- in which the court found-that the EPA’s invocation of Section 705 was arbitrary and capricious based on EPA’s failure to apply the four-part preliminary injunction test. See Sierra Club,
This Section permits either agencies or courts, if the proper showing be made, to maintain the status quo. ... The authority granted is équitable and shouldbe used by both agencies and courts to prevent irreparable injury or afford parties an adequate judicial remedy.
Id. at 31 (quoting Administrative' Procedure Act, Pub. L. 1944-46, S. Doc. 248 at 277 (1946) (describing the intent of 5 U.S.C. § 1009(d), the prior version of Section 705)). Sierra Club reasoned that there was nothing in the text of Section 705 or its legislative history that suggested that the standard for a stay pending judicial review differs between agencies and courts. Sierra Club,
Defendants disagree that they were required to consider the four-part preliminary injunction test when issuing the Postponement Notice pursuant to Section 705 and that Sierra Club was wrongly decided. Defendants point out that the text of Section 705 requires neither a court nor an agency to make findings about the four preliminary injunction factors when issuing a Section 705 stay:
When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may. issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.
5 U.S.C. § 705 (emphasis added). They argue that the text of Section 705 only requires an agency to base its decision to implement a stay on a finding that “justice so requires,” and that the next sentence, which references certain factors of the preliminary injunction test, only refers to court-issued stays. In response to the legislative history noted by Plaintiffs and the court in Sierra Club, Defendants point to subsequent legislative history from 1946 that they argue more closely tracks the statutory language and supports their position that Section 705 does not require an agency to weigh the four factors of the preliminary injunction test when determining if “justice so requires”:
[Section 705] provides that any agency may itself postpone the effective date of its action pending judicial review, or, upon conditions and as may be necessary to prevent irreparable injury, reviewing courts may postpone the effective date of contested action or preserve the status quo pending conclusion of judicial review proceedings.
S. Doc. 248 at 369 (1946).
Finally, Defendants argue that requiring agencies to weigh the four factors of the preliminary injunction test is impractical. For instance, an agency would be required to find that a party who is challenging a regulation is likely to succeed on the merits, which would undermine the agency’s litigation position and hinder its defense. Defendants claim that the test is particularly troubling in situations where an agency is reconsidering a regulation; as the Bureau is doing here, because it essentially forces an agency to admit error in order to provide relief to regulated parties pending judicial review and reconsideration, even though agencies can reconsider regulations for policy reasons without admitting error.
The Parties and amici vigorously contest whether Defendants were required to satisfy the four-factor preliminary injunction test when they relied upon Section 705 to postpone the compliance date under the justification that “justice so requires.” The plain language of the statute leaves room to dispute whether such an analysis is required, and the legislative history provides
V. REMEDY
Having concluded that Defendants violated the APA when the Bureau issued the Postponement Notice, the Court must consider the appropriate remedy. Plaintiffs have requested declaratory relief and vaca-tur of the Postponement Notice.
Vacatur is the standard remedy for violation of the APA. See Se. Alaska Conservation Council v. U.S. Army Corps of Eng’rs,
As to the first factor, the Bureau’s errors in illegally invoking Section 705 to issue the Postponement Notice and circumvent the APA’s notice-and-comment requirements were serious. See Nat. Res. Defense Council v. Envtl. Prot. Agency,
The second factor is the potential disruptive consequences that would arise from vacatur. Defendants argue that vaca-tur would require regulated entities to spend approximately $114 million dollars to achieve compliance. Requiring these entities to spend that much money is unnecessarily disruptive and inequitable, they contend, because the Bureau is planning to lawfully suspend the Rule and ultimately revise or rescind it. They also note that the court presiding over the District of Wyoming challenge to the Rule expects to issue its decision before the January 17, 2018 compliance date, which could mean that the Rule will be invalidated, even though the court denied a preliminary injunction in part based on plaintiffs in that case not having shown a sufficient likelihood of success at that time. Intervenor Western Energy Alliance also contends that some of its members relied on the Postponement Notice and the District of Wyoming litigation to defer compliance efforts, so it may well be impossible at this point for at least some of the larger-scale regulated entities to meet the January 17, 2018 compliance deadline.
Notably, the rare exceptions to vacatur involve irreparable and severe disruptive consequences that went far beyond the potential disruptive consequences that Defendants
By contrast, as Plaintiffs point out, vacating the Postponement Notice and reinstating the Rule is predicted to .result in a' net positive financial and environmental benefit, according to the agency’s analysis, because compliance will reduce the waste of public resources, curb the emission of harmful environmental pollutants, increase royalty payments, and, for many of the new requirements relating to reducing the waste of valuable resources, pay for itself over time. Moreover, vacating the Postponement Notice would merely put the regulated parties back in the position of working toward compliance. If some of the regulated entities of the oil and gas industry will not be able to meet the January 17, 2018 compliance date because they suspended compliance efforts after the District of Wyoming denied the preliminary injunction and the Bureau issued the Postponement Notice, that is a problem to some extent of their own making and is not a sufficient reason for the Court to decline vacatur. This lawsuit by California and New Mexico has been on the public docket since July 5, only 20 days after the Bureau issued the Postponement Notice, and the related case whs filed five days later. As evidenced by its trade association’s intervention in this ease, the oil and gas industry was well aware that the Postponement Notice was potentially vulnerable to invalidation. Moreover, denying the standard remedy of vacatur based on less severe disruptive consequences than those previously recognized as warranting keeping the unlawful regulation in place could be viewed as a free pass for agencies to exceed their statutory authority and ignore their legal obligations under the APA, making a mockery of the statute.
This is not like the situation in Becerra where the agency had already finalized a new rule and vacatur would only return the parties to the previous regulatory regime for a short one week period. Under those very unusual circumstances, vacating the illegal postponement of the regulation was not warranted. In this case, however, the Bureau has not yet promulgated a replacement for the Rule. Although the Bureau intends to engage in actual rule-making to postpone the Rule’s compliance dates and issue a proposed rule for public notice and comment, that proposal is still under review within the agency and by the Office of Management and Budget (“OMB”). Furthermore, once promulgated, Defendants acknowledged at oral argument that the Bureau would engage in a 30-day notice-and-comment period. Indeed, if the Bureau receives “significant” comments to the proposed rule, as seems likely given the numerous comments it originally received in favor of as well as against the Rule that it seeks to functionally suspend, it will need to provide written responses, which will take additional time. See Am. Mining Congress v. Envtl. Prot. Agency,
VI. CONCLUSION
For the reasons set forth above, the Court GRANTS Plaintiffs’ motions for summary judgment and vacates the Postponement Notice.
IT IS SO ORDERED.
Notes
. All Plaintiffs to this case, with the exception of Fort Berthold Protectors of Water and Earth Rights, intervened in the two cases in the District of Wyoming.
. The organizations that comprise the Conservation and Citizen Tribal Groups are: Sierra Club, Center for Biological Diversity, Environmental Defense Fund, National Wildlife Federation, Natural Resources Defense Council, The Wilderness Society, Citizens for a Healthy Community, Dine Citizens Against Ruining Our Environment, Earthworks, Environmental Law and Policy Center, Fort Bert-hold Protectors of Water and Earth Rights, Montana Environmental Information Center, San Juan Citizens Alliance, Western Organization of Resource Councils, Wilderness Workshop, WildEarth Guardians, and Wyoming Outdoor Council.
. Specifically, Plaintiffs the State of California and the State of New Mexico have requested judicial notice of five documents, including the Proposed Rule, the Rule, and the Postponement Notice.
. Indeed, Defendants stipulated to a briefing schedule for the summary judgment motions that did not provide for the filing of an administrative record.
. While Defendants’ failure to fully consider all important aspects of postponing the compliance deadlines when issuing the Postponement Notice was arbitrary and capricious, this result does not necessarily resolve the issue raised by amicus The Institute for Policy Integrity that Defendants were required to support their change in policy with a full cost-benefit analysis; Because the Postponement Notice was arbitrary and capricious for its failure to consider the foregone benefits of compliance at all, the Court need not resolve this question,