Montana Wildlife Federation et al v. Zinke et al

Filing 335

ORDER: IT IS ORDERED as follows: Plaintiffs 197 Motion for Summary Judgment is GRANTED,IN PART. Plaintiffs claims that the 2018 IM and lease sales violated the FLPMA are granted. Plaintiffs 197 motion is also DENIED, IN PART. Plaintiffs claims th at the lease sales violated NEPA are denied without prejudice as moot. Federal Defendants 207 Motion to Remand to U.S. Bureau of Land Management is DENIED. Federal Defendants 210 Cross Motion for Summary Judgment is DENIED. Defendant-Intervenor S tate of Wyomings 217 Cross Motion for Summary Judgment is DENIED. Defendant-Intervenors Western Energy Alliances 219 Cross Motion for Summary Judgment is DENIED. Vacatur of the Phase 2 lease sales will be stayed and operations related to those leases will be suspended pending the Phase 1 appeal and any appeals arising from this order. SEE ORDER FOR FULL DETAILS. Signed by Judge Brian Morris on 3/11/2022. (SLR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION
MONTANA WILDLIFE FEDERATION,
et al.,

CV-18-69-GF-BMM

Plaintiffs,
ORDER
vs.
DAVID BERNHARDT, in his official
capacity as Secretary of the Interior, et al.,
Defendants,
WESTERN ENERGY ALLIANCE, et al.,
Defendant-Intervenors.

BACKGROUND
Plaintiffs challenge the Bureau of Land Management’s (“BLM”) issuance of
the 2018 Instruction Memorandum on Greater Sage Grouse conservation (“2018
IM”) and subsequent oil and gas leasing decisions. The Court explained the
background of this case in depth in the Phase One summary judgment order. (Doc.
147 at 1-13.) The Court will assume familiarity with the prior decision and will
summarize only the outcome of the Phase One order here.
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The Court vacated the 2018 IM and three lease sales in Montana and
Wyoming for violating FLPMA in the Phase One order. (Id. at 32.) The 2018 IM
directed BLM staff to disregard BLM’s 2015 Resource Management Plans’ (“2015
Plans”) prioritization requirements for fluid mineral leasing in Sage Grouse habitat.
BLM-IM026-001071 (Instruction Memorandum 2018-026 (Dec. 27, 2017)). The
2018 IM stated that prioritization would apply only where a “backlog” of leasing
requests exists. Id. The Court determined that the direction to apply leasing
prioritization only where a backlog of leasing proposals exists violated the Federal
Land Policy and Management Act (“FLPMA”) because “[t]he 2015 Plans do not say
that BLM will prioritize non-Sage Grouse habitat in some of its decisions. The
backlog limitation provides for precisely that result.” (Id. at 21 (emphasis added)).
The Court also determined that the 2018 IM unreasonably misconstrued the
purpose of the 2015 Plans’ prioritization requirement and rendered “the
prioritization requirement into a mere procedural hurdle.” (Doc. 147 at 23-24.) Such
an interpretation conflicts with U.S. Fish and Wildlife Service’s (“FWS”)
understanding of the requirement when it declined to list the Sage Grouse under the
Endangered Species Act. (Id.) The 2018 IM asserted that “BLM does not need to
lease and develop outside of [Sage Grouse] habitat management areas before
considering any leasing and development within [Sage Grouse] habitat.” BLMIM026-001071 (Instruction Memorandum 2018-026 (Dec. 27, 2017)). The 2018 IM
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thus ignored the goals of prioritization—to refrain from listing the Greater Sage
Grouse under the Endangered Species Act—by failing to “further limit future
surface disturbance and encourage new development in areas that would not conflict
with” Sage Grouse habitat. WY072017.
The Court determined that the three lease sales at issue in Phase One also
violated FLPMA for failing to properly implement the 2015 Plans’ priority
requirement. (Doc. 147 at 30-31.) The Court pointed to the Wyoming lease sale’s
direct reliance on the 2018 IM, and the BLM’s statements in the Montana lease sales
indicating that it did not apply the prioritization criteria. (Id. at 26-27.) The Court
also stated that BLM’s failure to apply the prioritization requirement violated
FLPMA regardless of whether the agency purported to follow the 2016 IM or the
2018 IM. (Id. at 27.)
Phase Two consists of Plaintiffs’ challenge to the five remaining lease sales
listed in the first amended complaint: the December 2017, March 2018, and June
2018 Nevada lease sales, and the December 2017 and March 2018 Wyoming lease
sales. (Doc. 19 at ¶¶ 68-82.) The Court heard argument on the Phase Two crossmotions for summary judgment and Federal Defendant’s motion to remand on June
14, 2021. (Doc. 260.)
LEGAL STANDARD

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A court should grant summary judgment where the movant demonstrates that
no genuine dispute exists “as to any material fact” and the movant is “entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). Summary judgment remains
appropriate for resolving a challenge to a federal agency’s actions when review will
be based primarily on the administrative record. Pit River Tribe v. U.S. Forest Serv.,
469 F.3d 768, 778 (9th Cir. 2006).
DISCUSSION
I.

The Phase Two Lease Sales Violated FLPMA.
Plaintiffs argue that the Phase Two lease sales conflict with the 2015 Plan’s

prioritization requirements for the same reasons as the Phase One sales: BLM relied
on the 2018 IM or failed to properly implement the 2015 plans’ priority requirements
established to conserve Sage Grouse habitat. Defendants contend that the Phase Two
lease sales differ from the Phase One lease sales because BLM complied with the
2015 plans’ prioritization requirement for these sales; BLM followed the 2016 IM,
rather than the 2018 IM, when conducting the lease sales; and BLM required that
stipulations be placed on the leases to reduce impacts to Sage Grouse.
The Defendants’ arguments prove unavailing. The Phase 2 lease sales suffer
from similar infirmities to the Phase 1 lease sales for the reasons discussed below.
a.

Lease stipulations cannot supplant the 2015 Plans’ prioritization
requirement.

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The Court begins by addressing Defendants’ argument that placing
stipulations on leases might fulfill the prioritization requirement of the 2015 Plans.
This argument lacks merit. Stipulations and prioritization both represent tools to
protect Sage Grouse, but provide distinct mechanisms for achieving this goal.
BLM places stipulations on a lease to constrain the rights of the purchaser.
Stipulations restrict the type of use that can occur within the lease parcel. A no
surface occupancy requirement within 0.6 miles of an identified lek provides an
example of a lease stipulation used by the BLM. WY067952-53. Stipulations of this
type deter the intensity of oil and gas disturbance to Sage Grouse within a leased
area. The stipulations have no bearing on where a lease might be offered.
The 2015 Plans’ prioritization requirement, on the other hand, has no effect
on the intensity of use that may occur within any given lease. The 2015 Plans’
prioritization requirement instead controls where leases should be offered. The 2015
Plans establish two levels types of habitat management areas for Sage Grouse:
priority habitat management areas (“PHMA”), which are public lands with “the
highest value to maintaining sustainable [Sage Grouse] populations;” and general
habitat management areas (“GHMA”), which are “lands where some special
management will apply to sustain [Sage Grouse] populations” based upon “occupied
seasonal or year-round habitat outside” of Sage Grouse not rising to the level of a
PHMA. See, e.g., WY066635.
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The 2015 Plans’ prioritization requirement serves “to further limit future
surface disturbance and encourage new development in areas that would not conflict
with” greater Sage Grouse. WY072017 (Rocky Mountain Record of Decision
(ROD) at 1-25). To meet this purpose, BLM determined that it was required to first
focus on oil and gas leasing outside of PHMAs and GHMAs “in order to minimize
further fragmentation and impacts to [Sage Grouse] habitat or populations.”
BLMIM026-000751-752. BLM also must consider leasing in GHMA’s before any
leasing in PHMA’s. Id.
Lease stipulations and the 2015 Plans’ prioritization requirement thus differ
in how they protect Sage Grouse. Stipulations protect Sage Grouse without regard
for protecting particular areas of Sage Grouse habitat. Prioritization, on the other
hand, specifically protects Sage Grouse habitat based upon the type of habitat that a
given area provides. See, e.g., WY066635. To make this distinction clear, BLM
could include stipulations in every lease without ever having to consider what areas
should be prioritized for leasing and what areas should be prioritized for Sage Grouse
habitat. This outcome would violate of the 2015 Plans’ prioritization requirement.
The 2015 Plans themselves make plain that stipulations provide a separate
protection from prioritization:
When analyzing leasing and authorizing development of fluid mineral
resources … in [Priority Habitat Management Areas] and [General
Habitat Management Areas], and subject to applicable stipulations for
the conservation of [Sage Grouse], priority will be given to
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development in non-habitat areas first and then in the least suitable
habitat for [Sage Grouse].
WY066649 (Wyoming plan at 24) (emphasis added); Nevada plan at 2-28 (emphasis
added). Even when BLM applies stipulations, it still must give priority “to
development in non-habitat areas first.” Id. Lease stipulations may not be used as a
mechanism for the BLM to avoid the 2015 Plans’ prioritization requirement. The
Court cannot rely on stipulations provided by the Phase Two lease sales when
evaluating BLM’s compliance with the 2015 Plans’ prioritization requirement.
b. The Phase Two lease sales failed to incorporate the 2015 Plans’
prioritization requirement.
Nevada Lease Sales
BLM offered more than 750,000 acres of oil and gas leases in the Phase Two
Nevada lease sales. NV-DEC-010610 (December 2017 sale); NV-MAR-000820
(March 2018 sale); NV-JUN-004109 (June 2018 sale). BLM failed to consider the
2015 Plans’ prioritization requirements in the environmental assessments for these
lease sales.
Nothing in the administrative record for the Nevada lease sales suggests that
BLM considered prioritization’s purpose of guiding development away from Sage
Grouse habitat. BLM failed to address the proximity of leases in PHMA or GHMA
to existing oil and gas development. BLM failed to analyze whether the value of

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Sage Grouse habitat warranted deferring some leases that were far removed from
existing development.
When BLM received protests that the 2015 Plans’ prioritization requirements
had not been met by the Nevada lease sales, BLM either pointed to the unlawful
2018 IM or suggested that lease stipulations supplanted the need for prioritization.
BLM expressly cited the 2018 IM in its dismissal of the June 2018 sale protests. NVJUN-002849. BLM stated that it followed the “specifically outlined guidance on
prioritization implementation listed in the [2018 IM]” when responding to a protest
from the Wilderness Society. Id.
BLM offered the same rationale in the December 2017 and March 2018 sales.
In the December 2017 sale, BLM offered 208 parcels in Nevada, totaling almost
389,000 acres. (Doc 198 at 10.) Roughly 95 percent of the parcels contained Sage
Grouse habitat. The NEPA document for the sale failed to mention the prioritization
requirement of the 2015 Plans. When protests complained that the BLM failed to
consider prioritization, BLM responded only that it had identified the habitat types
present and attached stipulations based on the mapping. See NV-DEC010888. The
March 2018 sale provided precisely the same reasoning and reliance on stipulations.
See NV-MAR000818-819.
BLM failed to demonstrate that it considered prioritization in these lease sales.
See NV-DEC-010610; NV-MAR-000820; NV-JUN-004109. BLM’s own responses
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to protests directly contradict prioritization. See NV-DEC010888; NVMAR000818-819; NV-JUN-002849. As a result, the Court must conclude that the
Phase Two Nevada lease sales violated FLPMA by failing to meet the 2015 Plans’
prioritization requirement.
Wyoming Lease Sales
BLM’s December Wyoming 2017 lease sale offered 45 parcels, 42 of which
overlapped with either PHMA or GHMA. WY120986. BLM noted that some parcels
contained “active [Sage Grouse] leks within their boundaries,” some parcels in
PHMA were distant from existing oil and gas production, and some were on lands
with low potential for oil and gas development. Id.; see also WY118239. BLM’s
March 2018 lease sale offered 170 leases totaling more than 170,500 acres in
Wyoming. The sale included 89 parcels in BLM’s Wind River/Bighorn Basin
District, of which 79 were within PHMA or GHMA. WY130986. An additional 81
parcels were in the agency’s High Plains District, of which 14 were within PHMA
and 23 were within GHMA. WY130898-899.
Similar to the Nevada lease sales, the administrative record contains nothing
to suggests that BLM considered prioritization’s purpose of guiding development
away from Sage Grouse habitat. Here too, BLM failed to address the proximity of
leases to existing oil and gas development. See generally WY120974; WY130847;
WY130933. BLM failed to consider whether the location of leases in PHMA or
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GHMA areas warranted deferring leases because of their overlap within PHMAs or
GHMAs.
The Wind River/Bighorn Basin District Environmental Assessment from the
March 2018 sale provides the only assessment to mention the prioritization
requirement. The document does not actually discuss prioritization. It simply states
that it had applied lease stipulations to leases in Sage Grouse habitat. WY130987.
BLM made no attempt to explain how that decision could follow the 2015 Plans’
prioritization requirement or the 2016 IM. Stipulations cannot substitute for
prioritization.
BLM relied on the same rationale adopted in the 2018 IM when responding
to protests to the December 2017 lease sale. BLM focused on the 2015 Plans’
designation of PHMA and GHMA as “open” for leasing and asserting that
stipulations provided the necessary protections under the 2015 Plans. WY121535.
BLM also stated that it declined to consider deferring leases in Sage Grouse habitat
because stipulations “provide for appropriate levels of Greater Sage-grouse
protection.” WY120968.
BLM quoted the 2018 IM’s direction in denying an administrative appeal to
the March 2018 lease sale. BLM noted that that the agency “does not need to lease
and develop outside of [Sage Grouse] habitat management areas before considering
any leasing and development within [Sage Grouse] habitat” WY131018-019, 025.
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BLM’s response to protests from the March 2018 sale also stated that prioritization
required only that it consider the factors from the 2016 IM. BLM suggested that
nothing required it to actually apply the requirements to guide leasing away from
Sage Grouse habitat. See WY121535 (Protest Dismissal at 16). As the Court
concluded in the Phase One order, this theory conflicts with the 2015 Plans, as it
makes prioritization nothing more than a “procedural hurdle.” (See Doc. 147 at 24.)
Both of the Wyoming Lease sales failed to adequately implement the 2015
Plans’ prioritization requirement. The Wyoming Lease sales violated FLPMA in
failing to implement the prioritization requirement.
II.

Vacatur of the Phase 2 lease sales represents the appropriate remedy.
The Court reviews the Phase 2 lease sales under the Administrative Procedure

Act (“APA”). The APA permits the Court to “set aside” final agency actions deemed
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 702(2)(A); see Ctr. for Biological Diversity v. Nat’l Highway
Traffic Safety Admin., 538 F.3d 1172, 1194 (9th Cir. 2008).
The Ninth Circuit remands agency actions without vacating that action only
in “limited circumstances.” Pollinator Stewardship Council v. EPA, 806 F.3d 520,
532 (9th Cir. 2015) (quoting Cal. Cmtys. Against Toxics v. EPA, 688 F.3d 989, 994
(9th Cir. 2012)); see Wood v. Burwell, 837 F.3d 969, 975-76 (9th Cir. 2016)
(recognizing that remand without vacatur is a remedy “used sparingly”). A court
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must “weigh the seriousness of the agency’s errors against ‘the disruptive
consequences of an interim change that may itself be changed’” when determining
whether to leave an agency action in place on remand. Cal. Cmtys. Against Toxics,
688 F.3d at 992 (quoting Allied–Signal, Inc. v. U.S. Nuclear Regulatory Comm’n,
988 F.2d 146, 150–51 (D.C.Cir.1993)).
The Court will vacate the Phase 2 leases. BLM’s errors in granting these leases
undercut the purpose of the 2015 Plans’ priority requirement and prevent BLM from
fulfilling the requirement’s goals. Given the agency’s errors, the Court cannot see “a
serious possibility that the [agency would] be able to substantiate its decision on
remand.” Allied-Signal, Inc., 988 F.2d at 151. The failure to consider the 2015 Plans’
prioritization requirement infected every step of the environmental assessment
process and cannot be remedied after the fact. Adequate implementation of the 2015
Plans’ priority requirement may necessitate that BLM not include parcels included
in the lease sales. The Court must vacate the lease sales in their entirety.
The Court will deny Federal Defendant’s motion to remand the December
2017 Nevada lease sale without vacatur (Doc. 207) for the same reason. Federal
Defendants state that the motion serves to conduct additional analysis of the impacts
of December 2017 Nevada lease sale leasing decision on Sage Grouse while
maintaining the leases sold in the lease sale. (Doc. 208 at 3.) The Court has “broad
discretion” in deciding whether to grant requests for voluntary remand. Utility Solid
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Waste Activities Group v. EPA, 901 F.3d 414, 436 (D.C. Cir. 2018). The Court will
not remand without vacatur here, as the lease sale violated FLPMA. BLM’s purpose
for the motion—to maintain the lease sales—serves as a mechanism to avoid judicial
review. See Cal. Cmtys., 688 F.3d at 992, citing Lutheran Church–Mo. Synod v.
FCC, 141 F.3d 344, 349 (D.C. Cir. 1998).
III.

The Court will stay the Phase 2 lease vacatur and suspend any
operation or production related to those leases pending appeal.

The Court stayed vacatur of the Phase 1 lease sales pending appeal.
(Doc. 189.) The Court has relied on similar reasoning in vacating the Phase 2 lease
sales as it did in vacating the Phase 1 lease sales. The Court will stay vacatur of the
Phase 2 lease sales pending appeal of the Phase 1 lease sales and any appeals that
may arise from this order. Just as was the case for the Phase 1 lease sales, a stay
which leaves things as they are currently in place, not to move forward nor to move
backward, achieves a sensible and fair balance of the competing interests at this stage
of the case. (See id. at 2-6.) The Phase 2 lease sales are not to be undone at this time,
but are suspended—there shall be no further work developing the Phase 2 leases or
obtaining production from such leases in any way pending appeal.
The Court will consider motions from any party requesting additional detail
as to what work, if any, to maintain the suspended status quo will be permitted. Any
such motion should be accompanied by information about the nature and need for

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such work to allow other parties to respond to the motion and for the Court to make
an informed decision.
ORDER
Accordingly, IT IS ORDERED as follows:
• Plaintiffs’ Motion for Summary Judgment (Doc. 197) is GRANTED, IN
PART. Plaintiffs’ claims that the 2018 IM and lease sales violated the
FLPMA are granted.
• Plaintiffs’ motion (Doc. 197) is also DENIED, IN PART. Plaintiffs’ claims
that the lease sales violated NEPA are denied without prejudice as moot.
• Federal Defendants’ Motion to Remand to U.S. Bureau of Land
Management (Doc. 207) is DENIED.
• Federal Defendants’ Cross Motion for Summary Judgment (Doc. 210) is
DENIED.
• Defendant-Intervenor State of Wyoming’s Cross Motion for Summary
Judgment (Doc. 217) is DENIED.
• Defendant-Intervenors Western Energy Alliance’s Cross Motion for
Summary Judgment (Doc. 219) is DENIED.
• Vacatur of the Phase 2 lease sales will be stayed and operations related to
those leases will be suspended pending the Phase 1 appeal and any appeals
arising from this order.
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DATED this 11th day of March, 2022.

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