Lead Opinion
In these cases, we are asked to decide whether the Bureau of Land Management (BLM) acted beyond its statutory authority when it promulgated a regulation—43 C.F.R. § 3162.3-3 (2015)
I
A
Fracking is a “well stimulation” technique that oil and gas producers use to extract greater volumes of oil and natural gas than is otherwise possible. During fracking, “oil and gas producers inject water, sand, and certain chemicals into tight-rock formations to create fissures in the rock that allow oil and gas to escape for collection in a well.” Industry Petitioners Aple. Br. at 2. Chemicals are added in the injection process to delay pipe corrosion and kill unwanted bacteria, as well as for other purposes. Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands, 80 Fed. Reg. 16,128, 16,131 (Mar. 26, 2015).
Although first used by the oil and gas industry in the 1940s, fracking became more effective and complex around 2000 once industry combined fracking with horizontal drilling. “A horizontally drilled well starts as a vertical or directional well, but then curves and becomes horizontal, or nearly so, allowing the wellbore [i.e., drilled hole] to follow within a rock stratum for significant distances and thus greatly increase the volume of a reservoir opened by the wellbore.” Aplt. App. at 43. Today, ninety percent of the oil and gas wells on federal lands involve the use of hydraulic fracking.
As fracking became more common, public concern increased about whether frack-ing was contributing to or causing “contamination of underground water sources, whether the chemicals used in [fracking] should be disclosed to the public, and whether there [wa]s adequate management of well integrity and the ‘flowback’ fluids that return to the surface during and after [fracking] operations.” Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands; Rescission of a 2015 Rule, 82 Fed. Reg. 34,464 (July 25, 2017). The BLM responded by preparing to draft the current regulation in 2010. Oil and Gas,
On May 11, 2012, the BLM published its proposed regulation. As part of its rule-making, the BLM alleges it met with affected Indian tribes on at least four occasions from 2012 to 2014. At the public commenters’ request, the BLM extended the comment period for 60 days and received over 177,000 comments on the first draft of the proposed regulation. Oil and Gas,
The Fracking Regulation attempts to regulate fracking in four ways. It imposes new well construction and testing requirements, new flowback storage requirements (tanks, not pits), new chemical disclosure requirements, and also generally increases BLM’s oversight of fracking. The estimated cost to comply with the Fracking Regulation is “about $11,400 per well, or about $32 million per year. On average this equates to approximately 0.13 to 0.21 percent of the cost of drilling a well.” Id. at 16,130. The Fracking Regulation would impact an estimated 2,800-3,800 fracking operations per year. Id Although the Fracking Regulation expands the scope of federal regulation of fracking, most frack-ing regulation occurs at the state level. However, state regulation of fracking is relatively recent; before 2005, few States had fracking laws.
B
On March 20, 2015, shortly before the Fracking Regulation was to take effect, the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (WEA) (together: Industry Peti
The Petitions for Review asserted that the Fracking Regulation violated two provisions of the APA: Petitioners alleged the Fracking Regulation was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” under 5 U.S.C. § 706(2)(A), and also was “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right” under § 706(2)(C). The Ute Tribe also raised separate, tribe-specific arguments.
Petitioners individually filed preliminary injunction motions. After a hearing on these motions, the district court postponed the effective date of the Fracking Regulation on the same day it was to take effect, pending the district court’s resolution of the preliminary injunction motion. On September 30, 2015, the district court granted the requested preliminary injunction. The court reasoned that Petitioners were likely to succeed on the merits on both APA grounds raised. The BLM and Citizen Group Intervenors both appealed the grant of the preliminary injunction to this court (Nos. 15-8126 and 15-8134).
While those appeals were pending, the district court reached the merits and entered a judgment on June 21, 2016 setting aside the Fracking Regulation. The district court invalidated the Fracking Regulation under § 706(2)(C) of the APA, concluding the BLM had acted beyond its statutory authority. Applying the two-step review set forth in Chevron U.S.A., Inc. v. NRDC, Inc.,
Even if these Acts could be read to authorize the BLM’s regulation of frack-ing, the district court reasoned that a 2005 amendment to the Safe Drinking Water Act (SDWA) precluded all federal regulation of non-diesel fracking. The SDWA is a comprehensive regime protecting America’s drinking water. In particular, it protects “public water systems” and underground water sources. See 42 U.S.C. §§ 300g et seq., 300h et seq. (respectively). The goals of the SDWA are achieved
Given the district court’s ruling that the BLM lacked statutory authority to promulgate the Fracking Regulation, it declined to address whether the BLM’s actions in promulgating the Fracking Regulation were arbitrary and capricious in violation of § 706(2)(A) of the APA. As a result of the timing of the district court’s rulings, the Fracking Regulation has never taken effect.
After the district court ruled on the merits, we dismissed the preliminary injunction appeals as moot. The parties supporting the regulation brought the instant appeals, challenging the district court’s June 21, 2016 Order.
While these appeals were pending, the BLM asked this court to hold these appeals in abeyance pending its pursuit of further rulemaking pertaining to the Fracking Regulation. The BLM explained that President Trump’s Executive Order No. 13,771 (January 30, 2017) required the DOI to review its regulations, including the Fracking Regulation, “for consistency with the policies and priorities of the new Administration.” Fed. Aplt. Mot. at 2, Mar. 15, 2017. The President issued another Executive Order, No. 13,783, directing the Secretary of the Interior “as soon as practicable,” to “publish for notice and comment proposed rules suspending, revising, or rescinding” the Fracking Regulation at issue in these appeals. Id §§ 7(a), (b)(1) (Mar. 28, 2017). Secretary of the Interior, Ryan Zinke, later clarified, in Order No. 3349 dated March 29, 2017, that the BLM would rescind the regulation in full: “BLM shall proceed expeditiously with proposing to rescind the final rule entitled, ‘Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands.’ ” Id. at § 5(c)(i). On June 22, 2017, the BLM published a notice in the Federal Register reinforcing that commitment: “BLM will proceed expeditiously with a proposed rule to rescind the final rule entitled ‘Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands,’ 80 FR 16128 (March 26, 2015).” Evaluation of Existing Regulations,
II
The single merits issue addressed by the district court and at issue in these pending appeals is: whether the FLPMA, MLA, and the Indian mineral statutes, read in light of the SDWA, provide the BLM with authority to regulate fracking on lands owned or held in trust by the United States and thereby to promulgate the Fracking Regulation. Given the recent rulemaking activity undertaken by the BLM, however, we must first address whether we should proceed to the merits.
A
The Supreme Court has “recently] reaffirm[ed] the principle that ‘a federal court’s obligation to hear and decide’ cases within its jurisdiction ‘is virtually unflagging.’ ” Lexmark Int’l, Inc. v. Static Control Components, Inc., — U.S. —,
B
We ask, then, whether these appeals fall within our obligation to “hear and decide,” or whether we should abstain from the exercise of our jurisdiction because these appeals are prudentially unripe? We analyze prudential ripeness by evaluating “both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” Abbott Labs.,
(1) Fitness for review
With respect to this question, we consider a number of factors, such as whether the issue is a purely legal one, whether the agency decision in dispute was final, and whether “further factual development would ‘significantly advance our ability to deal with the legal issues presented.’ ” Nat’l Park Hosp. Ass’n,
A handful of factors cut in favor of our concluding that these appeals are, in fact, ripe for review. These appeals do present a clear legal issue: whether the BLM had statutory authority to promulgate the Fracking Regulation. See Abbott Labs.,
However, our proceeding to address whether the district court erred in invalidating the BLM’s Fracking Regulation when the BLM has now commenced rescinding that same regulation appears to be a very wasteful use of limited judicial resources. Utah v. United States DOI,
(2) Hardship to the parties of withholding review
With respect to this question, we consider whether withholding review would “create adverse effects of a strictly legal kind” to the party seeking judicial review. Nat’l Park Hosp. Ass’n,
In cases challenging agency actions, we have held that a party seeking judicial review suffers adverse effects if, absent judicial review and while the appeal is pending,- it would need to comply with the challenged agency regulation. Abbott Labs.,
We focus here upon the harm caused by the challenged action, which, in this instance, is the Fracking Regulation. Withholding review of the Fracking Regulation will not impose a hardship on the two parties seeking judicial review: the Citizen Group Intervenors and -the BLM. The'only “harm” the Citizen Group Inter-venors will suffer is the continued operation of oil and gas development on federal lands, which represents no departure from the status quo since 2015. And while they seek to benefit from the regulatory protection of the Fracking Regulation, which they hope our judicial review will insure, that is not a “hardship” contemplated by the prudential ripeness rubric. Nor will our withholding review create a hardship for the BLM. The BLM will be able to proceed with its proposed rule rescinding the Fracking Regulation. And, in these unique cases, the BLM would face more uncertainty if these appeals, which concern the scope of the BLM’s authority, were to remain under advisement, or if we were to rule in the midst of the BLM’s ongoing rulemaking process that the BLM had no authority to act. We conclude these appeals are prudentially unripe and thus unfit for judicial review.
C
We must next decide whether to abate these appeals, or to dismiss them. The D.C. Circuit has abated appeals that it found prudentially unripe when the promulgating agency decided to revise the contested regulation while an appeal was pending. For instance, in API v. EPA, both the American Petroleum Institute and the Sierra Club petitioned for review of a 2008 EPA regulation that failed to exclude refinery catalysts from a list of deregulated chemicals. 6.
But the present appeals differ from API in two critical ways. First, in API, the EPA was legally required by a settlement agreement to issue a final regulation by a specific date, just over a year after the case was argued. Id. at 389. Here, the BLM stated at our very recent oral argument that the 60 day notice and comment period could be extended, to say nothing of how many additional months or years would be needed to issue a final rule rescinding the regulation. Indeed, this court has traditionally abated appeals only for a short or definite period of time, and most commonly to allow other tribunals time to adjudicate related issues or cases. E.g., Thlopthlocco Tribal Town v. Stidham,
We acknowledge the difficult position in which the BLM finds itself by first filing an appeal to challenge the district court’s invalidation of the Fracking Regulation, only now to ask this court to withhold ruling on its appeal pending final resolution of the BLM’s action to rescind the very regulation it had initially sought to uphold and enforce. And although we acknowledge the BLM’s offer to provide regular status reports while the proposed rescission of the Fracking Regulation is ongoing, it is not the role of Article III courts to supervise or monitor the rule-making efforts of an Article II agency. See Marbury v. Madison,
Second, API involved the direct judicial review of an agency’s regulation; here, the appeals are challenging a final judgment of a federal district court striking down an
We conclude these appeals should be dismissed. We have previously dismissed appeals upon finding the subject matter unripe, particularly where the record is notably undeveloped or the future particularly uncertain. E.g., United States v. Bennett,
D
We turn, then, to the effect our dismissal of these appeals has upon the underlying district court ruling. This court has authority under 28 U.S.C. § 2106 to craft whatever remedy is appropriate, including vacatur. United States Bancorp Mortg. Co. v. Bonner Mall P’ship,
We are also guided by our cases discussing mootness. When an appeal becomes moot, we generally vacate the district court’s judgment to prevent it “from spawning any legal consequences.” United States v. Munsingwear, Inc.,
Applying this precedent to the present appeals, we note that the party seeking vacatur did not cause these appeals to become prudentially unripe. The Conservation Group Intervenors was the only party to request vacatur in its supplemental briefing, but it came to that suggestion only after arguing these appeals were prudentially moot. Conservation Groups Supp. Br. at 29-31. We note also that it was the actions of Secretary Zinke and the BLM that rendered these appeals prudentially unripe; namely, the issuance of Secretarial Order No. 3349 and the July 25, 2017 notice proposing a proposed rule that will rescind in full the Fracking Regulation. Rescission of a 2015 Rule,
Finally, we must decide whether we should also dismiss the underlying action. As a practical matter, dismissing the underlying action is appropriate in this case given that there would be nothing for the district court to do upon remand except wait for the BLM to finalize its rule rescinding the Fracking Regulation. Moreover, in similar cases, we have dismissed the underlying action after concluding on appeal that the subject matter of the case was unripe. E.g., Utah,
Given that we are vacating the district court’s opinion and dismissing the underlying action, we need not address the additional arguments raised by the Ute Indian Tribe challenging the district court’s ruling as regards the Tribe.
Ill
We DISMISS these appeals as prudentially unripe, VACATE the district court’s judgment invalidating the Fracking Regulation, and REMAND with instructions to dismiss the underlying action without prejudice.
Notes
. Although the parties and this opinion refer to the contested regulation in the singular, two regulations are implicated. The BLM added § 3162.3-3 but also revised § 3162.3-2, the existing regulations governing fracking. Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands, 80 Fed. Reg. 16,128, 16,-137 (Mar. 26, 2015).
. “We have also articulated the factors relevant for evaluating ripeness as: '(1) whether
Concurrence Opinion
concurring and dissenting:
I agree with much in the panel opinion. In particular, I am in full accord that “our proceeding to address whether the district court erred in invalidating the BLM’s Fracking Regulation when the BLM has now commenced rescinding that same regulation appears to be a very wasteful use of limited judicial resources.” Op. at 1142. Even if we were to decide within a relatively short period that the district court erred on the principal issue now before us, it would likely still be a long time before the Regulation could be judicially affirmed. The district court originally granted a preliminary injunction on both the ground before us and an additional ground—that the regulation was “arbitrary,, capricious, an abuse of discretion, or otherwise not in accordance with law,” and therefore invalid under 5 U.S.C. § 706(2)(A). Thus, if we reverse, the district court may well reinstate a preliminary injunction. That would certainly lead to another round of review. And the. second round could be lengthy. This round began two years ago with the original grant of a preliminary injunction. Before the second round is complete the new administration may rescind the Regulation. The Citizen Group Intervenors suggest that even so, our ruling would be useful in settling the legal issues now on appeal. But a decision by one circuit court is hardly definitive.
That presents the question of what to do while awaiting a new regulation. Should we leave in effect the district court’s order invalidating the Regulation, or should we vacate or stay that order, giving effect to the Regulation? The majority has chosen to' vacate the district court’s order. Perhaps that is the proper choice. In my view, however, we do not have adequate information to make that determination. One important, and perhaps decisive, consideration is the extent of potential harms to the parties and the public. And on the record before us, I cannot assess how much, if any, environmental risk would be created by keeping the district court’s injunction in effect or how much, if any, harm would be caused to the industry or the governmental parties by vacating the injunction. The proper institution'to make that assessment, after an evidentiary hearing,, is the district court. I would remand to that court for this purpose.
