350 MONTANA V. DEBRA HAALAND, No. 20-35411 (9th Cir. 2022)
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Appellee, Signal Peak Energy, sought to expand its mining operations, resulting in the expected emission of 190 million tons of greenhouse gases (“GHGs”). The Department of the Interior (“Interior”) published an environmental assessment (“EA”) which explained that the amount of GHGs emitted would amount to .44 percent of the total GHGs emitted each year globally. A group of environmental groups challenged the Interior's approval of the proposed expansion.
The Ninth Circuit first noted that the parties’ dispute was not moot. The panel further held that Interior violated the National Environmental Policy Act by failing to provide a convincing statement for why the project’s impacts were insignificant. Moreover, the panel was unpersuaded that Interior was required to use the social cost of carbon metric to quantify the harm. Further, the panel found that it was less clear whether the agency had any other available metric to evaluate the project's impact. The panel remanded to the district court to decide whether an environmental impact statement was required.
Court Description: Mining / Environmental Law. The panel affirmed in part, and reversed in part, the district court’s summary judgment in favor of the U.S. Department of the Interior (“Interior”) on all but one claim in an action brought by environmental groups challenging Interior’s Office of Surface Mining Reclamation and Enforcement’s approval of a proposal to expand a coal mine in south-central Montana. Signal Peak Energy, LLC, an intervenor-appellee, sought to expand its mining operations. The expansion is expected to result in the emission of 190 million tons of greenhouse gases (GHGs). Interior published an Environmental Assessment (EA) in which it explained that the amount of GHGs emitted over the 11.5 years the Mine is expected to operate would amount to 0.44 percent of the total GHGs emitted globally each year. Based on a 2018 EA, Interior found that the project’s GHG emissions would have no significant impact on the environment. The district court granted summary judgment in favor of Interior on all but plaintiffs’ claim that Interior failed to consider the risk of coal train derailments. The district court vacated the 2018 EA, but not Interior’s approval of the Mine Expansion, and remanded the matter to Interior to consider the risk of train derailment. Interior subsequently published 4 350 MONTANA V. HAALAND a fourth EA that incorporated the 2018 EA and considered train derailment risks for the first time. As a threshold issue, Signal Peak argued that the case was moot because plaintiffs challenged the 2018 EA, but the 2018 EA was superseded by the EA Interior published in 2020 after the district court remanded the case to the agency to consider the risk of train derailments. The panel held that the parties’ dispute was not moot. The 2018 EA pertaining to the Mine Expansion neither disappeared nor was it replaced. The relevant portions of it were expressly incorporated into the 2020 EA and reissued. Accordingly, the panel retained the ability to order relief in this case. The panel held that Interior violated the National Environmental Policy Act (NEPA) by failing to provide a convincing statement of reasons why the project’s impacts were insignificant. The 2018 EA failed to articulate any science-based criteria of significance in support of its finding of no significant impact (FONSI), but instead relied on the arbitrary and conclusory determination that the Mine Expansion project’s emissions would be relatively minor. The panel, however, was not persuaded that Interior was required to use the Social Cost of Carbon metric (a method of quantifying the impacts of GHGs that estimates the harm, in dollars, caused by each incremental ton of carbon dioxide emitted into the atmosphere in a given year) to quantify the environmental harms stemming from the project’s GHG emissions. The panel further held that it was less clear whether the agency had any other metric available to assess the impact of this project. Because additional factfinding was necessary to decide whether an environmental impact statement (EIS) was required, and the record concerning the 350 MONTANA V. HAALAND 5 consequences of vacatur was not developed, the panel remanded to the district court. Judge R. Nelson dissented. He would hold that the agency’s finding – that the incremental effects of 0.04% of annual GHG emissions were “minor” – was not arbitrary or capricious under the Administrative Procedure Act (APA); and the majority’s contrary holding was wrong given the deferential APA review. Judge Nelson agreed with the majority’s decision not to vacate Interior’s approval of the Mine Expansion or direct Interior to prepare an EIS. He would hold that Interior’s FONSI was neither arbitrary nor capricious under NEPA. Even if it were, the action should be remanded to the agency to compile a new administrative record and final decision, not to the district court.
The court issued a subsequent related opinion or order on October 14, 2022.
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