July 31, 2010

9th Circuit declines to rehear National Parks & Conservation Assoc. v. BLM (Kaiser Eagle Mountain case)

By 9th Circuit declines to rehear National Parks & Conservation Assoc. v. BLM (Kaiser Eagle Mountain case)

Author: Brandon Middleton

Yesterday the Ninth Circuit Court of Appeals declined to reconsider its November 2009 decision in National Parks & Conservation Assoc. v. Bureau of Land Management (available here), in which it held that a BLM land exchange with Kaiser Eagle Mountain, Inc., was improper under the National Environmental Policy Act.

The land exchange was supposed to be a win-win for all parties concerned.  Kaiser would give the government 2,800 acres of private land near other BLM lands and within an area designated as critical habitat for the desert tortoise–this would allow the government to better manage the tortoise and other species through enhanced contiguous federal land in Southern California.

In exchange, Kaiser would receive 3,500 acres of public land, land that was virtually valueless due to its proximity near an abandoned iron ore mine.  The public land, however, was better situated for Kaiser, and it would enable the company to develop a much needed landfill in Riverside County.  This landfill would address what has been described as a "critical need for additional disposal capacity" in Southern California and would have been the first to comply with new federal landfill guidelines, making it one of safest and environmentally sensible landfills in the world.

But, in a lawsuit brought by environmental groups, the Ninth Circuit determined that BLM was wrong to consider Kaiser's interest as a for-profit, private company in the land exchange.  According to the court in its November 2009 decision, BLM's approval document was illegal because it "sets out three private objectives as defining characteristics of the proposed project."

With yesterday's decision by the Ninth Circuit not to rehear National Parks, who knows what Kaiser (a company that has spent 20 years and $50 million in its attempts to get the project approved) will do next?  But, needless to say, there's a lot not to like about what the Ninth Circuit has done in this case.  Here a few thoughts:

1) The Ninth Circuit misread NEPA.  When an agency like BLM performs a NEPA review, the review must consider and state the underlying purpose and need for the proposed action.  See 40 C.F.R. § 1502.13. 

But nothing within NEPA or its implementing regulations prevents government agencies from considering private objectives in a NEPA review.  In fact, it wouldn't make sense for the government to completely ignore the objectives of a company with which it has reached an agreement.  As Judge Stephen S. Trott understood in his dissent to the November 2009 decision, Kaiser is not going to build a landfill if it is not profitable.  As he put it, "Of course there is a private purpose driving this project.  But the project benefits both [the government and Kaiser] parties, not just Kaiser.  To isolate one without factoring in the other is patently illogical."

2) Clarence Thomas had a better approach.  When he was at the D.C. Circuit Court of Appeals, then-Judge Thomas recognized the silliness of preventing the government from considering economic motivations in federal agency decision making.  In the 1991 decision of Citizens Against Burlington v. Busey, he wrote that agencies "should take into account the needs and the goals of the parties involved" in an application for a federal permit, or a land exchange.  The relationship between a federal agency and a private company in a mutual agreement should be straightforward: "Congress did expect agencies to consider an applicant's wants when the agency formulates the goals of its proposed action.  Congress did not expect agencies to determine for the applicant what the goals of the applicant's proposal should be."

Then-Judge Thomas' sensible explanation for how and why federal agencies should consider the goals of a private party during a NEPA review stands in sharp contrast to the hostile approach to business taken by the Ninth Circuit in National Parks.

3) This is why California's business climate is so screwed up.  As I mentioned above, Kaiser has spent 20 years and $50 million on this project–all to provide a needed landfill for Californians, but with nothing to show.  Judge Trott in dissent was right to ask "How many of the people who started this project are still employed by Kaiser, are still in public service, or for that matter, are still alive?  Yet the process has developed an eternal life of its own as full-employment for all swept along by it."

Judge Trott further wondered "What sane person would want to attempt to acquire property for a landfill?  Our well-meaning environmental laws have unintentionally made such an endeavor a fool's errand."

Indeed, as I explained in an amicus curiae brief in support of rehearing, the Ninth Circuit's decision as left in place is likely to be used in other litigation as precedent, leading regulated entities to become (to quote Judge Trott again) "weary . . . and throw in the towel, thwarted and defeated not by substance, but by interminable process."

Shrug, baby, shrug.

Update February 16, 2011: Kaiser has petitioned the Supreme Court to review the Ninth Circuit's decision.  Pacific Legal Foundation has filed a brief in support of Kaiser's petition.  More details, including relevant briefs, here.

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