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Ocean Advocates v. United States Army Corps of Engineers

 

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Ocean Advocates, a group of environmental non-profit organizations dedicated to the preservation of the Washington Coast, brought suit against the United States Army Corps of Engineers (Corps) to enjoin its decision to issue and extend a permit to British Petroleum (BP) to build an additional dock on their existing oil refinery near Cherry Point, Washington. Allowing BP to intervene as defendants in the suit, the district court held that Ocean Advocates satisfied standing requirements to bring the suit, but granted summary judgment against the plaintiffs for their challenges under both the National Environmental Policy Act (NEPA)[1] and the Magnuson Amendment[2] to the Marine Mammal Protection Act (MMPA). [3] On review, the Ninth Circuit affirmed the district court’s decision to recognize Ocean Advocates standing in the suit but reversed the district court’s grant of summary judgment on the NEPA and Magnuson Amendment challenges.

The Ninth Circuit remanded consideration of the injunctive relief sought by Ocean Advocates to the district court, ordering an evidentiary hearing to consider the dock extension’s effect on tanker traffic and the potential harm BP would suffer under an injunction. The Ninth Circuit also instructed the district court to order the Environmental Protection Agency (EPA) to prepare a full Environmental Impact Statement (EIS) considering the project’s impact on reasonably foreseeable tanker traffic increases and potential violations of the Magnuson Amendment.

BP began construction of a refinery to process Alaskan crude oil in the Puget Sound in 1971 at a location ten miles south of Cherry Point, an area of the Washington coastline that contains significant fish and wildlife resources. Although BP planned to construct two docks on the refinery, it decided to defer construction of the second platform until production at the facility increased. BP attempted to construct the second dock in 1977, but again abandoned this plan after the Corps required the company to re-apply for a permit.

BP renewed its plans to build a separate dock in 1992, and opened its application up for public comment. Although the Fish and Wildlife Service (FWS), Lummi Nation, and Nooksack Tribe raised concerns that increased tanker traffic would increase the chance of oil spills in the area, BP indicated that the project would reduce traffic. BP argued that the newly constructed north dock would exclusively load refined product, thus reducing the amount of time tankers waited at sea to dock at the refinery, the time when tankers are most vulnerable to a spill. FWS also questioned the new dock’s effect on the marbled murrelet, a threatened species under the Endangered Species Act.[4] BP countered that the murrelet would only be affected in the unlikely event of an oil spill. Based on these arguments, the Corps made a Finding of No Significant Impact (FONSI) under NEPA, and granted the permit without an EIS because of the limited damage that would result from the dock’s construction.

In 1997, during the construction of the dock, Ocean Advocates asked the Corps to reconsider the FONSI and determine if the permit violated the Magnuson Act, which forbids any facility located on the Puget Sound from increasing its capacity to handle crude oil. The Corps declined to consider these factors, but was asked by the Washington State Department of Natural Resources and Ocean Advocates in 1999 to reconsider the effects that increased tanker traffic would have on the probability of an oil spill. After again declining these requests, the Corps granted BP’s request to extend the permit one year without any public notice or comment. Despite the concerns raised by Ocean Advocates, the Corps relied on its prior determination that the construction of the dock would have no significant cumulative impact on the environment and exempted the project from undergoing an EIS analysis. The Corps relied on BP’s claims that 1) the newly constructed platform would only increase the facility’s ability to offload refined oil, a situation that placed BP outside the Magnuson Act’s limitation on the handling of crude oil in the Puget Sound; and 2) the construction of the dock would decrease tanker traffic and the overall risk of an oil spill in the region.

Ocean Advocates brought an action in district court challenging these decisions under both NEPA and the Magnuson Act. The Corps alleged that the plaintiffs lacked standing. Although the district court ruled Ocean Advocates had standing, it granted the Corps summary judgment on the NEPA and Magnuson Act claims. The parties independently agreed to a stipulated injunction limiting BP to the use of only one platform at a time for unloading crude oil.

On appeal, the Ninth Circuit considered the district court’s grant of summary judgment de novo, and reviewed the Corps’s FONSI and compliance with the Magnuson Act under the arbitrary and capricious standard of the Administrative Procedure Act (APA).[5] The Ninth Circuit affirmed the district court’s ruling on Ocean Advocates’s standing, but overruled its grant of summary judgment on the NEPA and Magnuson Amendment claims. The Ninth Circuit held that the Corps’s FONSI failed to properly assess both the potential increase in tanker traffic created by the new platform and the subsequent effect the increase would have on the chance of oil spills in the area. In addition, the Ninth Circuit remanded the case to the district court with instructions to determine if the new dock increased the facilities overall capacity to process crude oil through 1) the capability of the new dock to handle crude oil, 2) the possibility of modifying the new dock to handle crude oil, and 3) the new dock’s increase in berthing capacity.

First, the Ninth Circuit assessed whether Ocean Advocates met Constitutional standing requirements. The first requirement is Ocean Advocates’s ability to show injury-in-fact. Injury-in-fact is established by showing 1) concrete and particularized harm and 2) actual or imminent harm as opposed to conjectural or hypothetical harm.[6] The Ninth Circuit held that members of Ocean Advocates who studied wildlife and engaged in recreational activities at Cherry Point would suffer a “lessened enjoyment” of the area should an oil spill occur from the increased traffic generated by the new dock. Subsequently, the Ninth Circuit concluded that a plaintiff need not show actual evidence of environmental harm to satisfy injury-in-fact requirements, but may show an increased risk of harm to satisfy this requirement.[7]

The Ninth Circuit analyzed Ocean Advocates claim for the second requirement of standing, causation, to determine if the injury alleged by Ocean Advocates was traceable to the Corps’s actions.[8] Here, the Ninth Circuit recognized that tanker traffic generated by the new dock established a causal connection to the increased risk of oil spill in the Cherry Point region alleged by Ocean Advocates. For the final standing requirement, the Ninth Circuit undertook a redressability analysis that analyzed whether the remedy sought by Ocean Advocates would alleviate their concerns regarding possible oil spills. The court pointed out that Ocean Advocates did not seek a remedy to prevent construction of the dock, but rather the generation of an EIS and an injunction to limit tanker traffic under the Magnuson Amendment. The Ninth Circuit observed that the EIS might force BP and the Corps to take additional safeguards to guard against increased traffic and cumulative impacts in the region, therefore redressing the plaintiff’s injury.[9]

After considering the constitutional requirements of standing, the Ninth Circuit held that Ocean Advocates met the necessary prudential, organizational, and statutory requirements for standing. In assessing the prudential requirements, the Ninth Circuit held that Ocean Advocates were within the zone of interest protected by the broad environmental interests of NEPA and the reduction of international tanker traffic expressed in the Magnuson Amendment.[10] Next, the Ninth Circuit concluded that Ocean Advocates met the requirements for organizational standing because 1) its members would have standing to sue on their own behalf; 2) the interests at issue in the suit were germane to Ocean Advocates’s mission to preserve the oceans; and 3) the substantive claim or remedy sought did not necessitate the participation of any individual member.[11] Finally, the Ninth Circuit held that Ocean Advocates met the statutory requirements for standing by finding that the permit issued by the Corps constituted a “final agency action” under the APA and that Ocean Advocates were within the zone of interest of and the Magnuson Act.[12]

The Ninth Circuit then analyzed the affirmative defense of laches raised by BP to bar the action undertaken by Ocean Advocates. The court stated that BP must show that Ocean Advocates lacked diligence in pursuing this claim and this lack of diligence caused injury to BP. The Ninth Circuit commented that laches was strongly disfavored in environmental cases and largely turns on the individual facts of the case and the discretion of the trial court. The Ninth Circuit chose to judge Ocean Advocates’s diligence from the date of the requested permit extension in 2000, not the date of the initial permit grant in 1996.

The Ninth Circuit found the extension date to be the final authorization necessary to construct the dock. For this decision the court relied upon BP’s admittance to the Corps that the dock would not be completed within the original permit period, and that the delay was caused by the ESA consultation that evaluated the project’s impact on new additions to the threatened species list. Thus, the Ninth Circuit concluded that Ocean Advocates’ litigation commenced close in time to the final authorization date of the permit and did not lack diligence. In the alternative, the Ninth Circuit determined that Ocean Advocates’s ongoing requests that the Corps re-open BP’s permit before the 2000 permit extension, satisfied the plaintiff’s burden under the laches doctrine. Ocean Advocates had maintained a continued dialogue with both BP and the Corps as early as 1997 and attempted to resolve their environmental concerns through the administrative process before they litigated the claim. Thus, in the absence of Ocean Advocates’s lack of diligence, the court declined to analyze BP’s undue prejudice argument.

Next, the Ninth Circuit analyzed whether the Corps put forth an adequate explanation of why construction of the new dock would not have a significant impact on the environment, a determination that exempted the project from an EIS under the NEPA’s requirements. The court articulated that NEPA required an EIS for all “major Federal actions significantly affecting the quality of the human environment,”[13] a standard which includes projects that raise substantial questions of environmental impact or indicate that a project may have a significant impact.[14] The court also evaluated the Corps’s decision under The Council on Environmental Quality’s regulations that the level of uncertainty or unknown risks to the environment can be a determinative issue when deciding if a project merits an EIS.[15] Thus, the Ninth Circuit held that the Corps failed to take the requisite hard look at the possible environmental impact of the project because Ocean Advocates raised “a substantial question as to whether the dock extension may cause significant degradation of the environment.”[16]

The Ninth Circuit revisited the FONSI conducted by the Corps in granting the 1996 permit and held that it failed to provide a convincing analysis of why the project would have no significant impact, but instead simply stated that the project would have no significant impact. The Ninth Circuit held that, although the Corps recounted the considerations that the increase in tanker traffic caused by the new dock might increase the chance of oil spills, the Corps never fully investigated this possibility because it relied upon BP’s determination that the new dock would result in increased efficiency and safety. The court also criticized the Corps’sconclusion that the facility’s capacity would not increase with the new dock because the facility had already been functioning at full capacity before the dock was built. The Ninth Circuit described this statement as a “patently inaccurate factual contention” that could not sufficiently support the agency’s decision to preclude further analysis under NEPA. The Ninth Circuit also took issue with the Corps’s lack of independent analysis of the possibility that the dock would increase traffic, a deficiency that stemmed from the agency’s over-reliance on BP’s claims. Therefore, the Ninth Circuit determined that the Corps provided no convincing statement of reason in the 1996 FONSI that a comprehensive analysis of environmental impact was unnecessary under NEPA.

The Ninth Circuit found the Corps’s 2000 FONSI pertaining to BP’s permit extension equally deficient as its 1996 counterpart. Once again, the Ninth Circuit concluded that the Corps did not provide adequate statements for why an EIS was unnecessary. The court particularly criticized the Corps’ continued reliance on findings prepared by BP alleging that the new dock would not increase tanker traffic, and that this increase could only be caused by a shift in market forces. The Ninth Circuit determined that the Corps should have undertaken an independent analysis of the potential effects the dock would have on tanker traffic to adequately justify the FONSI.

The Ninth Circuit then held that Ocean Advocates’s concerns about tanker traffic presented a substantial question concerning the significance of the impact the project would have on the region. The Ninth Circuit classified this question of traffic as a necessary part of the tanker’s severity inquiry. The court indicated that the Corps did not address evidence that use of the facility had greatly increased since the mid-1980s and that the new dock would double the berthing capacity of the facility. The Ninth Circuit also concluded that although market forces largely determined increases in tanker traffic, the construction of the dock constituted an additional factor that would allow BP to handle an influx of tankers. Thus, the Ninth Circuit found that these factors elevated the risk of an oil spill in the area brought about by an increase in tanker traffic, a consideration essential to the impact the new dock would have on the area.

The Ninth Circuit next assessed whether the Corps took a fully informed and well considered look at the cumulative impacts the project would have on the Cherry Point coastal region, an analysis of the incremental effects of past, present, and reasonably foreseeable future actions. An adequate cumulative impact analysis should have a detailed analysis of the effects that individually minor, but collectively significant, actions would have on the region.[17] Under this standard, the court concluded that the Corps’s analysis lacked any detailed assessment of the increase in crude oil tankers among the rest of commercial and recreational ships in the area. Additionally, the court criticized the Corps’s reliance on BP’s claim that it had methods of oil transport available other than sea travel, as well as the Corps lack of analysis pertaining to traffic increase in the area. The Ninth Circuit also found the Corps improperly focused on the potential decrease in the possibility of an oil spill occurring while the tankers were moored around the facility, while it ignored the greater risk of an oil spill occurring while tankers traveled to and from the facility. Thus, the Ninth Circuit concluded that the Corps failed to undertake an adequate evaluation of the cumulatively significant impact the project would have on past, present, and future projects in the area.

Next, the Ninth Circuit held that when the effects of a proposed action present uncertain issues in evaluating the risks of environmental impact, the project should be resolved in favor of preparing an EIS. Here, the court held that the Corps should have further evaluated the unknown amount of increase in tanker traffic through an analysis of relevant criteria, and that a lack of knowledge regarding a project’s impact did not excuse an agency from preparing an EIS under NEPA. Overall, the Ninth Circuit determined that Ocean Advocates raised substantial questions about the environmental impact of the new dock, and that the Corps responded to this question in an arbitrary and capricious manner. However, the Ninth Circuit declined to decide the issue of the injunctive relief requested by Ocean Advocates, and instead remanded this decision to the district court. The Ninth Circuit instructed the district court to determine whether Ocean Advocates made the requisite showing to merit injunctive relief, and to analyze the potential harm to BP and the public that an injunction might impose.

The Ninth Circuit next analyzed the project’s compliance with the plain language of the Magnuson Act which states: “No officer, employee, or other official of the Federal government shall, or shall have authority to issue, renew, grant . . . any permit, license, or other authority . . . in the state of Washington east of Port Angeles which will or may result in any increase in the volume of crude oil capable of being handled at any such facility.”[18] First the court noted that the term “any such facility” refers to the past language “terminal, dock, or other facility,” and in the present case refers to the capacity of the terminal as a whole, not an individual dock. The court observed that BP may have violated the Magnuson Amendment if it in any way increased the volume of crude oil capable of being handled at the terminal.

To determine if BP increased the volume, the court examined the capability of the platform to handle crude oil. Reviewing the district court’s finding that the platform only handled “petroleum product” and not “crude oil,” the Ninth Circuit declared this decision erroneous. Here, the Ninth Circuit disagreed with the district court over the parenthetical description “petroleum product loading/unloading facility” in BP’s project description. While the district court relied on this language to limit the dock’s ability to handle crude, the Ninth Circuit held that the language did not contemplate a legal limitation on the platform’s ability to handle crude oil. The Ninth Circuit concluded that BP may consider the entire terminal as a petroleum product “loading/unloading” facility and that if BP is able to make modifications that may allow the new dock to handle crude oil in the future, the Corps may have subsequently violated the Magnuson Amendment by approving a facility to handle an increased amount of crude in the Puget Sound.

As an additional consideration, the Ninth Circuit held that the new dock’s projected increase in the terminal’s overall berthing capacity must be considered in determining whether the permit allowed the facility to handle an increased amount of crude oil. Based on these conclusions, the Ninth Circuit remanded for further consideration of the permit’s compliance with the Magnuson Amendment to the district court to determine: 1) if it is “physically possible for the new platform to handle crude oil today,” 2) if it is “physically possible to modify the new platform such that it could handle crude oil, without requiring additional permitting,” and 3) if “the modifications authorized by the permit increase the potential berthing capacity of the terminal for tankers carrying crude oil.”[19]

In conclusion, the Ninth Circuit held that Ocean Advocates had standing to pursue their claims. The Ninth Circuit also concluded that the Corps acted arbitrarily and capriciously when it failed to adequately assess the considerations raised by Ocean Advocates concerning the increased tanker traffic in the area and the subsequent risk of oil spill. Finally, the Ninth Circuit remanded the issue of whether the permit violated the limitations on crude oil the Magnuson Amendment places on facilities in the Puget Sound.


[1] National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4370e (2000).

[2] Magnuson Amendment, 33 U.S.C. § 476 (2000) (amending Marine Mammal Protection Act of 1972, 16 U.S.C. §§ 1361-1421h, Pub. L. No. 95-136, 91 Stat. 1168).

[3] Marine Mammal Protection Act of 1972, 16 U.S.C. §§ 1361-1421h (2000).

[4] 16 U.S.C. §§ 1531-1544 (2000).

[5] 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (2000).

[6] Friends of the Earth v. Laidlaw Envtl. Servs. (Laidlaw), 528 U.S. 167, 180-81 (2000).

[7] Friends of the Earth v. Gaston Copper Recycling Corp., 204 F.3d 149, 160 (4th Cir. 2000).

[8] Ecological Rights Found. v. Pac. Lumber Co. 230 F.3d 1141, 1152 (9th Cir. 2000).

[9] Hall v. Norton, 266 F.3d 969, 977 (9th Cir. 2001).

[10] Clarke v. Sec. Indust. Ass’n, 479 U.S. 388, 399 (1987).

[11] Laidlaw, 528 U.S. at 181 (2000) (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977)).

[12] Churchill County v. Babbitt, 150 F.3d 1072, 1078 (9th Cir. 1998).

[13] National Environmental Policy Act of 1969, 42 U.S.C. § 4332(2)(C) (2000).

[14] Idaho Sporting Cong. v. Thomas, 137 F.3d 1146, 1149-1150 (9th Cir. 1998) (quoting Greenpeace Action v. Franklin, 14 F.3d 1324, 1332 (9th Cir. 1992)).

[15] National Parks & Conservation Ass’n v. Babbitt, 241 F.3d 722, 731 (9th Cir. 2001).

[16] Ocean Advocates v. United States Army Corps of Eng’rs, 402 F.3d 846, 864 (9th Cir. 2005).

[17] Kern v. United States Bureau of Land Mgmt., 284 F.3d 1062, 1075 (9th Cir. 2002) (quoting Churchill County v. Norton, 276 F.3d 1060, 1072 (9th Cir. 2001)).

[18] The Magnuson Amendment, 33 U.S.C. § 476(b) (2000).

[19] Ocean Advocates, 402 F.3d at 874-875.

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