Hornbeck Offshore Services, L.L.C. v. Salazar

WIENER, Before ELROD and SOUTHWICK, Judges. Circuit SOUTHWICK, H. LESLIE Circuit Judge: opinion filed this case on Novem- 2012,1 lished Outer Continental Shelf Over- is WITHDRAWN. ber sight Board. Deepwa- from the 2010 This ease arises later, About week an- of Mexico. Horizon accident the Gulf ter Deepwater nounced that “as a result of the workers, the An killed 11 caused explosion explosion spill, beginning Horizon and sink, in an drilling platform to and resulted April explosion 20—the date of the uncontrolled, lengthy and massive release —no drilling for direction, applications permits go [would] At those of oil. Presidential any drilling forward for new offshore activ- of the prompted Department events ity” report until his to the President. prohibit existing all new and oil Interior report Safety That Measures on the gas drilling operations and Outer —Increased Energy Development on the Outer The Shelf for six months. dis- Continental Shelf—was released on Continental enjoined preliminarily trict court enforce- variety 27. In addition to a of recommen- single the moratorium. The issue ment of studies, calling for regulations, dations new subsequent Interior’s appeal on is whether inspections, Safety Report and recom- of the specific provision actions violated a (1) mended “a six-month moratorium on finding of injunction, justifying court’s permits being using for new wells drilled contempt. civil The district court was cer- (2) floating rigs” and “an immediate halt to immediately tainly correct Interior drilling operations permitted on the 33 injunc- steps took to avoid the effect of the currently being wells that drilled tion, [were] actions but we conclude none of those using floating rigs in the Gulf of Mexico.” RE- violated the court’s order. We This recommendation of a six-month mora- VERSE. in appeared

torium the Executive Sum- AND mary body Safety FACTUAL PROCEDURAL but not of the Report.

HISTORY Safety Report The' stated that its recom- Deepwater tragedy Horizon oc- peer-reviewed by mendations had 2010, “been April curred on as the Trans- experts by identified the National seven drilling preparing crew was for a ocean Academy Engineering.” As later be- temporary abandonment of BP’s discov- known, experts came five of never those ery-well 52 miles from shore in almost agreed to mora- reviewed or the six-month 5,000 of Mexico. feet of water the Gulf Although wrongdoing was at- torium. explosion platform and fire caused the Interior, Inspector tributed to an Office of days to sink two later. For almost three report by cited the district court General months, gushed oil from the wellbore in review, peer found that after White House the sea floor. inappropriately officials had modified April the President ordered Sec- On report. to re- retary of the Interior Ken Salazar day after the On and, days, event within 30 view the release, Secretary Safety Report’s is- “what, if report any, precau- on additional Di- “May is referred to as the sued what technologies required tions and should be It stated that based on the rective.” improve safety gas explo- of oil and President, report on and further production operations ration and issue, Secretary] of the day, [the outer continental shelf.” That same evaluation current Secretary at this time and under find[s] with Order No. estab- Services, zar, (5th Cir.2012). 701 F.3d 810 1. Hornbeck L.L.C. v. Sala- Offshore adequately explained justi- not that offshore new were conditions Pro- poses unacceptable fied violation of the Administrative deepwater wells (“APA”), irreparable issuing harm cedures Act and that threat of serious marine, coastal, Secretary and the the Directive and the Notice the to wildlife specified authority exceeded his under the Outer human environment as is 250.172(b). (“OCSLA”), Act Continental Shelf Lands 30 C.F.R. §

43 U.S.C. 1332. a six also] direct[s] [The Finding only pertinent, the APA to be pending, all cur- suspension month provision and not the citizen-suit of the rent, approved drilling oper- or offshore OCSLA, on June the district court wells in the deepwater ations of new granted preliminary injunc- Hornbeck the of Mexico and the Pacific re- Gulf tion at the center of this case. That in- gions operators .... For those who are Interior, MMS, junction that and ordered wells, deepwater currently drilling new servants, agents, agen- their successor activity .... they drilling shall halt employees, persons cies and and all in Management the Service [and] [Mineral them, participation active concert of with (“MMS”)] any process shall not new who receive actual Notice of this Prelim- permits to drill consis- applications inary injunction immediately pro- [were] with directive. tent this Moratorium, enforcing hibited from the “Suspension entitled of Outer Continen- by Interior executed this directive issu- (OCS) Drilling Deepwa- tal Shelf of New ing general Oper- a Notice to Lessees and 28, 2010, May ter Wells” dated and NTL ators of Federal Oil and Gas Leases seeking implementation No. 2010-N04 (“NTL No. 2010-N04” or “Notice to Les- Moratorium, applied the to all sees”), May explained effective which on the at depths greater OCS water any that MMS would not consider new than 500 feet. drilling applications for six months in “deepwater,” depths greater defined as press issued a release re- 4,500 roughly than 500 feet. There were sponding day, stating to the that deepwater active leases the Gulfs at the impose decision to a moratori- “[t]he time. MMS also transmitted individual um on deepwater drilling was and is the operators permitted letters to the 33 right and that government decision” time, wells that being were drilled at the appeal ruling would to the Fifth Cir- providing notification that their activities by cuit. He concluded the release an- temporarily were suspended “consistent nouncing “ever-grow- that on the basis of with the Secretarial Directive and Notice evidence, ing I will issue a new order in to Lessees.” days coming any that eliminates doubt needed, that a appropriate, moratorium is operates

Hornbeck Offshore owns and a and within our authorities.” support deepwater fleet of vessels that exploration. nearly Simultaneously, It had contracts with took Interior some all operators steps injunction. of the of the 33 wells that to comply with the Inte- being again individually were drilled. Hornbeck and about rior sent addressed let- 40 other companies gas operators involved oil and ters to the of the 33 wells on exploration production, production stop, explaining filed suit on which was to seeking declaratory injunctive June 7 that neither the Notice to Lessees “nor the complaint alleged directing operations relief. The suspension order May legal Directive and the Notice to Lessees effect ón [the Directive] has at this time.” In contrast “asserted substantial reasons your operations suggesting moratorium, mootness,” inadequate our record was imposing actions A notify decide the issue. limited though, Interior did not the indus- remand was ordered for the district court to consider try-at-large, namely operators the issue of mootness. currently drilling. holders not lease remand, On the district court held that bearing subject A line “Imme- letter the suit was not moot: Enforcing Prohibition from the Mor- diate Because Drilling Deepwater on New this Court has determined that atorium process leading employees on first moratori- went to all Interior Wells” um probity; lacks because this court’s Court excerpted June 23. It district has determined that rational nexus explained employees order and were tragic exists between the fact of the any take action to enforce the “not to Deepwater placing Horizon blowout and or to Moratorium issued on culpability attainder of universal on enforce NTL No. 2010-N04” until the Sec- every other deepwater rig operator retary orders. Also on gave additional Mexico; the of Gulf because this Court day, Secretary appeared that the before has determined that the first moratori- on the United States Senate Subcommittee law; um is invalid in and because the Interior, Environment, Agen- and Related Secretary’s Interior second moratorium topic was Though cies. his scheduled bu- arguably changes fashions no substantial MMS, reorganizations affecting reaucratic moratorium, govern- from the first the Secretary the made several comments ment has failed to circumvent the volun- that about the moratorium bear on this tary exception cessation to mootness. litigation. We will discuss those below. The court that also stated the rescission immediately appealed Interior the in- May of the Directive did have “some ad- junction order to this court. It also filed a force,” ministrative a statement we would injunction. a stay motion for of the Interi- interpret later that month to mean that that it filing or noted intended injunc- “the moratorium the preliminary new, a A issue similar moratorium. divid- enjoined longer any operative tion ha[d] stay panel ed of our court denied the re- Concluding any opin- effect.” further that quest prejudice Secretary’s without by legali- ion our on “court the merits and if “right apply emergency for relief he ty preliminary of the of the in- issuance activity by deep- show that [could] junction injunction would address an that rigs water has commenced or about [was] dead,” legally practically is we dis- days to commence.” Four after that rul- appeal missed Interior’s merits as moot on 2010, 12, ing, July on Interior rescinded September 29. “July A May Directive. Directive” doubt, was substituted. Without the new After the district court denied Interior’s mootness, was the same “in motion to dismiss for but before suspension directive ruling appeal, this court’s on the Hornbeck scope and substance.” The difference was thorough explana- preliminary filed a motion to enforce the that it contained a more motion, ar- injunction. tion of reasons and referred to more volu- In that Hornbeck evidentiary gued by rescinding replacing Interior support. minous re- Directive, to diso- day, arguing turned to this court that Interior had chosen bey court’s order rather than we should vacate the district court’s June the district orderly process of injunction permit undergo of the Directive as moot. 30, dis- although Secretary judicial September ruled that had review. On We functory.” by light trict court determined of Id. Facts found the district “[i]n of Appeals accepted States Court court will clear- United be true unless erroneous, 29th September opinion ly Fifth Circuit’s de- interpretation but “the of appeal preliminary of the claring injunctive moot the scope of the is a order[] injunction, plaintiffs’ motion is DE- question by of law to be determined NIED.” judgment independent of this Court.” Drummond Co. v. Dist. Mine United July lifted the Directive (5th Cir.1979). Workers, 598 F.2d 12, 2010, which was a few on October anticipated weeks before the moratorium’s Contempt A. Finding Civil effectively expiration.

six-month This Hornbeck suit. Hornbeck mooted the “A party contempt commits when attorneys’ fees on two bases: moved for specific he violates a definite and of order (1)civil (2) litiga- bad-faith requiring perform the court him to or re court expressly tion tactics. The district performing particular frain from act or the bad-faith In- declined to reach basis. knowledge with acts of the court’s order.” stead, plaintiffs it concluded that “the have 'Travelhost, Blandford, Inc. v. 68 F.3d government’s established the civil con- Cir.1995). (5th contempt, For civil tempt preliminary of its order” by this must be established clear and con by convincing clear and evidence. It vincing evidence. Id. approve would later an award both fees convincing Clear and evidence is that $530,000. approximately and costs We weight proof produces which in the now consider the actions the district court mind the trier of fact a firm belief or contemptuous analyze and identified clear, conviction ... so direct and they whether violated its written order. weighty convincing and as to enable the conviction, fact finder to come to a clear

DISCUSSION hesitancy, without of the truth precise Federal courts have the inherent facts of the case. power punish contempt. Roadway for 752, Serv., 764, Army v. Express, Piper, Inc. v. 447 U.S. & Air Force Exch. Shafer (5th (1980). Cir.2004) 2455, 386, 376 F.3d 396 (quotation 100 S.Ct. 65 L.Ed.2d 488 omitted). marks and citations availability power promotes of that orderly jus “the due and administration of Though the court order must be safeguards authority. tice” and the court’s clear, a court anticipate every “need not States, (quoting Id. Cooke v. United order, action to be taken in response to its U.S. 45 S.Ct. 69 L.Ed. 767 in spell nor out detail the means in which (1925)). powers “Because inherent are its order must be effectuated.” Am. Air direct, controls,” shielded from democratic lines, Ass’n, Inc. v. Allied Pilots 228 F.3d Supreme “they Court instructs that (5th Cir.2000). 574, 578 The order must must be exercised with restraint and dis specifically; “state its terms and describe cretion.” Rather than stemming Id. from in reasonable detail ... the act or acts reservoir,” they a “broad “implied are required,” restrained or Fed.R.Civ.P. power[s,] squeezed from the need to make 65(d), but a district court to a is entitled Smith, the court function.” Crowe v. 151 degree flexibility vindicating au its (5th Cir.1998). F.3d that, thority against actions while not ex contempt review findings pressly prohibited, We nonetheless violate the discretion, abuse of but not per- reasonably “review is understood terms of the order. proper permission court identified the to seek for a remand The district before standards, proof legal developing burden of then additional rules on offshore contempt only in the laid out the reasons for its find- Gulf. The mandate categories returning court identified three about to the ing. The court was that Inte- held, “in provide describing of action that it when viewed rior a man- report “the importance compliance tandem” with the national of ner and form” of its with the injunction reimposition days. the case and the of the mora- within 21 There has been torium, allegation supported finding. duty. civil failed Specifically, it found “defiance” and “deter- For Interior to have been in contempt, the (1) injunction disregard” mined Interior’s failure to would have had to include an clearly express obligation seek a remand from the district court to or inferrable taking new administra- agency petition Armstrong before for a remand. Cf. (2) action; President, continuously pub- tive stated Exec. 1 F.3d Office of moratorium; (D.C.Cir.1993) lic resolve to restore the (vacating civil con- (3) industry that a its communications tempt against agencies federal because offing. moratorium was in the new We district court’s expressly “order did not favoring conduct). note that we see no clear effect direct” cited arguments arising either side’s from the were There several communications to significance national of the environmental industry manifesting “public Interior’s judicial disaster. executive and injunction. resolve” to overcome the Six co-equal, just branches are as the entered, days after the was In- responds executive branch to national meeting Washington, terior convened a judiciary that it emergencies, the ensures D.C., by Secretary attended Salazar and compliance so in with the law. does high-ranking other Ac- Interior officials. attendee,3 to an cording affidavit from dispute Hornbeck and Interior question posed government was required whether our law the case representatives deepwater “whether drill- agency have been remanded to the before time, ing the Gulf could resume at that it could issue a new directive. Each side given injunction against the existence of an has marshaled authorities.2 The outcome previously deepwater drilling not on issued hinge does whose view is correct. Although “spell response by a district not moratorium.” The an Interi- court need out detail the means which its order or Assistant was that it was his effectuated,” injunction’s pro Department’s must be intention “to issue a second moratorium,” visions must be “clear in what conduct a statement the affiant un- they prohibited.” signal mandated and derstood as “a that the cost and [have] Airlines, expense resuming drilling Am. 228 F.3d at 578-79. The should not be injunction by industry did not that Interior because the sec- state had undertaken Serv., Compare sary [agency] permission of the 2. Broussard v. U.S. Postal 674 for the to seek (5th Cir.1982) (stating F.2d 1108 n. 4 ruling). court” before "prevailing jurisprudence” that holds “that filed, judicial agency once a suit is should accuracy disputed the 3. Interior has not unilaterally reopen pro- not administrative account, provided by this James W. Noe. Noe ceedings agency should first ask the —the President, Counsel, was Senior Vice General it”), court to remand the case to with Am. Compliance and Chief Officer of Off- Hercules Serv., Freight Farm Lines v. Black Ball shore, Executive Director Inc. as well as the U.S. 90 S.Ct. 25 L.Ed.2d 547 Drilling Water Coalition. of the Shallow (1970) (noting stay that "since the order did ..., acting not forbid it from it was not neces- rescinded, saying had not been prevent that activi- rective ond moratorium would place” it was issued.” moratorium was “in was some ty continuing from once sense accurate. communications, ac- public The relevant Interior, are the Secre- knowledged by together, the comments to indus- Taken responding to the in- tary’s press release Senate, try, public sup- and to the testimony junction Congress to and his (the finding court’s factual port the district does, day. release as the press next contested) hardly fact that Interior was evince a resolve recognized, district court reinstating a moratorium was intent on That the moratorium. intent reissue that, imposed the same limitations as the explicit was made before the Senate Sub- the court May Directive from the moment committee, just as it would be Interior’s that intent enjoined harboring it. Neither stay for a in this court: motion moratorium, though, imposing nor a new Q. Secretary, you plan Mr. do to issue a violation of the court order. The was exploration a new moratorium on all of district court did not conclude otherwise. depths oil in the Gulf of Mexico at contempt Hornbeck’s motion for focused more than 500 feet? imposition of a sec- government’s “on the to that yes, A. The answer is Senator ond blanket moratorium hurried on the Alexander. According heels of the first.” to the dis- court, using July trict the issuance of the also directs us to an answer Hornbeck Directive as a reason for would Secretary provided Senator Murkow- require reading “preliminary ski, in which he stated: broadly.” Order too moratorium, respect I [W]ith the correct I believe was decision. explained court that the in district today. it’s a correct believe decision junction finding had been based on a that respect And with all due to the honor- plaintiffs substantially likely “the were court, disagree able we with the court. prove process leading that the to the first taking And we are on so decision arbitrary capricious” moratorium was appeal. in violation of the Administrative Proce time, At the same it is important See, e.g., Jupiter Energy Corp. dure Act. stay place this ... moratorium until (5th Cir.2005) FERC, F.3d deepwater drilling we can assure that (explaining requires the Act “rea way. can in a be done safe We’re not analysis” cogent explanation and a soned today. there And so we move forward action). agency In “answer to the authority with the executive which I plaintiffs’ quarrel with the second morato have to make sure that the moratorium] rium,” explained the court that Interior does, fact, in stay place. position took the that it had “met the Court’s concerns and resolved each of the Here, responding as well as in later to Al procedural deficiencies the first.” Feinstein, the Senator referred though expressed skepticism the court place.” to the moratorium as “in Horn- out, about whether that would be borne argues sign beck that terminology is alone,” then ruled that under “these facts injunc- an contumacious defiance because not, clearly it “could at least not and con prohibiting tion the mora- enforcement of vincingly, government find the regards torium had issued. Interior the preliminary injunction of the Order.” We choice of words as a misstatement at Servs., Moreover, Di- agree. worst. because the See Test Masters Educ.

795 (5th Singh, Inc. v. expeditiously F.3d Cir. The district court dealt 2005). forcefully extremely and with significant litigation. potential The APA violations complaint also asserted that Hornbeck’s injunction that led to the initial are not at on all ex- a six-month moratorium violations, today, issue but such if signifi- to Interior authority delegated ceeded the cant, justify would a district court’s consid- under the Outer Continental Shelf Act. injunction. of an eration Our decision ais never reached that issue. Had court narrow one. We conclude that Interior’s enjoined on that the Directive been injunction actions did not violate the basis, very this would be a different case. reasonably drafted interpreted. Instead, justification pre- the sole for the Therefore, contempt. there was civil injunction that liminary did issue as the procedural Directive was a failure to first explicitly The court order did not

explain. B. Litigation Bad Faith new, identical, mora- prohibit a or even alternative, In the Hornbeck sug torium. It is true that the district court gests Equal Access to Justice Act potential identified additional APA defi- (“EAJA”) as a basis for the award of attor surrounding process ciencies (d). 2412(b), fees. See 28 U.S.C. neys’ § Directive,4 July potential but those defects that Interior counters this alternative is presented support- are not here as a basis briefed. See Fed. inadequately R.App. P. ing contempt. “victory” Hornbeck’s (b). 28(a)(9), agree. We frustrating to fleeting goal was actually proceed. allowing drilling to briefing Hornbeck’s bare-bones of this explain issue fails to how the substantive essence, company argues by

In that procedural requirements for an award continuing pursuit in its of an effective First, under EAJA are satisfied. we have moratorium, Department ig- the Interior impose held that that sanction the purpose nored the of the district court’s specific finding “court must make a injunction. purpose If the were to assure party sanctioned acted bad faith.” until resumption operations further (5th v. May, Matta 118 F.3d order, clearly court it was not set out in Cir.1997).5 court refrained from reach- injunction. broadly A more worded ing the issue of bad faith and Hornbeck explicitly prohibited the argument why has offered no as to by end-run taken Interior would have set Second, clearly up supportive dispositive. party issues more of con- fact is not tempt. wishing to recover under this Act must September refusing complied part 4. In its order with the was not of this APA moot, dismiss the Hornbeck suit as the dis- suit. questions regarding trict court raised whether the “618 new documents and over 6000 Rowe, generally 5. See 870 F.2d Sanchez pages” pointed that Interior to as evidence of (5th Cir.1989) (explaining that EAJA process the deliberative that went into the attorneys’ when the authorizes fees Govern- truly second moratorium evidenced such de- pro- ment runs afoul of the common-law rule nearly every liberations. It noted that state- hibiting parties acting "vexatiously, from July in the ment Directive had been "antici- reasons”) wantonly, oppressive (quota- or for record, pated by documents in the 28 or Further, omitted). tion and citation the dis- by documents that were otherwise available trict court characterized Hornbeck’s claim as to the before 28.” It also faith,” although a claim of bad "common-law recognized, though, that since the Hornbeck had its motion invoked statute. Directive, complaint July did not concern the the issue of whether the second moratorium 796 finding contempt of and the award thirty days disposition of a final

“within adversary adjudication, submit of fees and costs are REVERSED. that the which shows agency application an party eligible and is party prevailing is a ELROD, JENNIFER WALKER Marine & to receive an award.” Boland dissenting: Judge, Circuit (5th Rihner, 997, 41 F.3d

Mfg. Co. v. majority opinion addresses Cir.1995). Boland, revised In declined to re- we troubling issues raised in some of the most party a was entitled to at- solve whether dissent, in the rec- torneys’ my original fees without evidence but still reaches procedures had been met. majority ord that these wrong Although opin- result. alleged complied. it Id. Hornbeck has not recognizes ion now this circuit’s well-estab- precedent may lished that a court look to Finally, analysis, without Hornbeck de- totality of the circumstances in deter- prevailing party citing a clares itself to be mining litigant a violated the rea- whether Garland, City to Dearmore v. 519 F.3d of order, sonably terms of its understood (5th Cir.2008). 517, Dearmore an- 521-24 majority opinion’s cramped application of determining nounces a three-factor test disregards that standard the deference prelimi- a who a plaintiff whether receives owed to the district court’s find- nary prevailing party is a under Moreover, majority ings. opinion’s ap- rights provision, civil 42 U.S.C. may 1988(b), proach give litigants incentive for § when “the district court makes unambiguous probable creatively suc- to circumvent district court or- indication where, the merits of his claim and the especially troubling cess on ders. This is subsequently here, defendant moots the case be- represents a co- the contemnor response to the court’s fore trial direct equal government.1 branch of As the least 521, preliminary injunction order.” Id. at among equals, dangerous branch the Judi- any engaged 524. Hornbeck has not with ciary vigilant regarding compli- must be Importantly, considerations. those orders, ance with its lest it become tooth- explained escape not how it can from has less. stipulate decision to case dismiss the

or from the district court’s conclusion July Directive did not moot the case voluntary-cessation exception

because the Univ.,

applied. E.g., Pederson v. La. State (5th Cir.2000).

213 F.3d potential maintaining

This basis for waived because it not been

award is has

meaningfully briefed. Nat’l Bus. Forms & Co.,

Printing, Inc. v. Ford Motor 671 F.3d (5th Cir.2012) (citing n. 2 Fed. 28).

R.App. P. Co., (Alexan- Pipe 1. See The Federalist No. 78 at 227 Marathon Line 458 U.S. ed., Hamilton) 1961) (1982) ("The (Roy der P. Fairfield S.Ct. 73 L.Ed.2d 598 Fed- ("[T]he judiciary Judiciary designed by is the' weakest of the three eral was ... the Fram- departments power possible independent of the ... all care ers to stand Executive is requisite Judiciary] Legislature to enable to defend maintain the checks and [the —to itself.”); structure.”). Pipeline see also N. Const. Co. balances of the constitutional

Case Details

Case Name: Hornbeck Offshore Services, L.L.C. v. Salazar

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Apr 9, 2013

Citation: 713 F.3d 787

Docket Number: 11-30936

Court Abbreviation: 5th Cir.