Skull Valley Band of Goshute Indians, The et al v. Cason et al

Filing 95

ORDER - the Court VACATES both the DOIs Calvert and its Cason RODs and REMANDS PFS right-of-way application and Plaintiffs lease to the DOI for further consideration consistent with this decision. The Court rejects Plaintiffs request, made for the fi rst time in their supplemental brief, that the Court retain jurisdiction during the administrative proceedings following remand. Therefore, because this order resolves all matters before the Court and because the Court does not intend to retain juris diction after remand, the Court will direct the clerk of the court to enter final judgment. See Fed. R. Civ. P. 58. The Court is cognizant of Plaintiffs request for attorneys fees and will consider that request if reasserted in an appropriate post-judgment motion, see 28 U.S.C. § 2412(d)(1)(B). Signed by Senior Circuit Judge David M. Ebel on 7/26/2010. (ce)

I N THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF UTAH C i v i l Action No. 07-cv-0526-DME-DON: S K U L L VALLEY BAND OF GOSHUTE INDIANS, and PRIVATE FUEL STORAGE, Plaintiffs, v. L A U R A DANIEL DAVIS, Associate Deputy Secretary of the Interior, CHAD C A L V E R T , Principal Deputy Assistant Secretary of the Interior for Land and M i n e r a l s Management, UNITED STATES DEPARTMENT OF THE INTERIOR, C. S T E P H E N ALLRED, Assistant Secretary of the Interior for Land and Minerals Management, Defendants. ORDER P l a i n t i f f s , the Skull Valley Band of Goshute Indians ("Skull Valley Band") a n d Private Fuel Storage, LLC ("PFS"), invoke the Administrative Procedure Act ( " A P A " ) , to obtain review of two decisions made by the Department of Interior ( " D O I " ) 1) denying a right-of-way application submitted by PFS and 2 ) disapproving a lease between the Skull Valley Band and PFS. Having j u r i s d i c t i o n under 28 U.S.C. §§ 1331 and 1362, 1 the Court VACATES those d e c i s i o n s and REMANDS the right-of-way application and Plaintiffs' lease to the

T h e APA waives the United States' sovereign immunity for purposes of t h i s suit, which seeks injunctive rather than damages relief. See 5 U.S.C. § 702; see also Normandy Apartments, Ltd. v. U.S. Dep't of Housing & Urban D e v . , 554 F.3d 1290, 1295 (10th Cir. 2009).

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D O I for further consideration. I . BACKGROUND A. F a c t u a l background T h e administrative decisions at issue here stem from Plaintiffs' c o n t r o v e r s i a l plan to store spent nuclear fuel ("SNF") on the Skull Valley Band's r e s e r v a t i o n , located in Tooele County, Utah. 2 SNF is a byproduct of nuclear g e n e r a t i o n of power; "[b]ecause SNF remains radioactive for thousands of y e a r s , long-term storage strategies are essential." Skull Valley Band of Goshute I n d i a n s v. Nielson, 376 F.3d 1223, 1227 (10th Cir. 2004). Many commercial r e a c t o r sites, however, were designed with minimal SNF storage because the u t i l i t i e s operating these plants had originally planned to reprocess the SNF. But t h a t has not occurred, due to the relative abundance of uranium in the United S t a t e s and the fear that plutonium created during reprocessing could be used f o r nuclear weapons. And, although the federal government agreed to take title t o the SNF from the commercial power companies generating it and to provide

T h e Skull Valley Reservation is located fifty-eight miles, as the crow flies, f r o m the state capitol in Salt Lake City (seventy-five miles by road), and fifty m i l e s from Salt Lake International Airport. Only 160 of the more than 18,000 a c r e s comprising the reservation are irrigable; the rest is suitable only for g r a z i n g . The Skull Valley Band has no natural resources except for its land. The reservation is surrounded by industrial uses, mostly involving hazardous m a t e r i a l s . Nearby is the Army's Dugway Proving Ground, where the military t e s t s chemical and biological weapons, the Army's Deseret Chemical Depot, the U n i t e d States' only incinerator for nerve gas, the Tooele Army depot, and a l o w - l e v e l nuclear waste disposal facility. In addition, Hill Air Force Base is also n e a r b y , and much of the air space in this area is restricted as part of the Air F o r c e ' s Utah Test and Training Range ("UTTR").

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f o r its permanent storage, that has not yet occurred. 3 See id. P l a i n t i f f PFS is a Delaware limited liability company described as "a c o n s o r t i u m of utility companies, which formed in order to seek temporary s t o r a g e options for" SNF until the federal government begins accepting SNF for p e r m a n e n t storage. Id. at 1227-28. Currently, these companies store SNF at t h e i r reactor sites. But that on-site storage is running out. Without additional s t o r a g e options, these power companies may be forced to shut down their r e a c t o r s prematurely. Additionally, these utilities cannot fully decommission a r e a c t o r , after permanently shutting it down, until the SNF at that site is removed. T o solve these storage problems, PFS, in 1996, entered into an a g r e e m e n t with the Skull Valley Band to lease approximately 820 acres of the B a n d ' s 18,000-acre reservation in order to build and operate an SNF storage f a c i l i t y . 4 PFS' general plan, which has already been licensed by the Nuclear I n 1977, the federal government announced that it would take title to c o m m e r c i a l SNF. To facilitate that, Congress, "[i]n 1982, . . . passed the N u c l e a r Waste Policy Act (NWPA), 42 U.S.C. §§ 10101-10270. The NWPA r e q u i r e [ d ] the United States Department of Energy ["DOE"] to construct a p e r m a n e n t storage facility for the disposal of SNF" by January 31, 1998. Skull V a l l e y Band, 376 F.3d at 1227. That has not yet occurred. Pursuant to the N W P A , the DOE has, however, entered into contracts with public utilities a g r e e i n g to dispose of their SNF permanently. In return, the utilities have been m a k i n g annual payments to the DOE, based upon the amount of nuclear power e a c h utility generates each year, to pay for the federal permanent storage f a c i l i t y . Because the United States has not yet built a permanent repository, s e v e r a l utilities have successfully sued the government for breach of contract, w i n n i n g damages for the utilities' cost of storing the SNF until the permanent r e p o s i t o r y is built. See Yankee Atomic Elec. Co. v. United States, 536 F.3d 1 2 6 8 , 1271-72 (Fed. Cir. 2008).
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T h e r e are three versions of the lease: the original lease executed in

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R e g u l a t o r y Commission ("NRC"), is to place the SNF, while it is still at the r e a c t o r sites, into sealed steel canisters that will then be encased inside N R C - c e r t i f i e d steel shipping casks. These 150-ton shipping casks would then b e loaded onto specially designed rail cars and shipped to the Skull Valley s t o r a g e site on commercial rail lines using trains dedicated only to transporting SNF. The commercial rail line closest to the Skull Valley reservation runs p a r a l l e l to Interstate 80 and is approximately twenty-four miles to the north of t h e site of the planned storage facility. Therefore, PFS intends to build an " i n t e r m o d a l transport facility" ("ITF") on federally-controlled land located b e t w e e n that commercial rail line and the interstate. At the ITF, PFS plans to u s e a crane to remove the 150-ton shipping casks containing the SNF from the r a i l cars and place those casks on "heavy haul" trucks that will then transport t h e casks the final twenty-four miles to the storage facility. These heavy-haul trucks will do so using the existing two-lane Skull Valley R o a d . The trucks can travel no more than twenty miles per hour, while the p o s t e d speed limit on Skull Valley Road is fifty-five miles per hour. Each trip f r o m the ITF to the storage facility by heavy-haul truck would take approximately 1 . 5 hours and would occur only during daylight. On each trip, these 150- to
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D e c e m b e r 1996; an amended lease, executed in May 1997, which the Bureau of I n d i a n Affairs ("BIA") conditionally approved a few days later; and a second a m e n d e d lease, executed in January 2002, which incorporated all of the m i t i g a t i o n requirements set forth in the final environmental impact statement ( " F E I S " ) . It is that second amended lease that is at issue here.

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1 8 0 - f o o t - l o n g trucks would be accompanied by two escort vehicles, one t r a v e l l i n g 1,000 feet in front of the truck, and the other 1,000 feet behind it. PFS e s t i m a t e s that one to two trains will arrive at the ITF weekly, with each train c a r r y i n g two to three shipping casks. PFS further estimates that a heavy-haul t r u c k would need to make between two and four round trips per week, or b e t w e e n 100 and 200 round trips annually. 5 Once at the storage facility, PFS will remove the canisters containing the S N F from the shipping casks and place those canisters inside storage casks, w h i c h will be steel-lined, filled with concrete and weigh approximately 180 tons. The twenty-foot-high storage casks will then be placed on cement pads and c o o l e d in the open air. I n addition to applying for a right-of-way to build and operate the ITF, P F S also applied, alternatively, for a right-of-way to build instead a rail spur that w o u l d have run directly from the commercial rail line to the storage facility. PFS w o u l d have preferred to transport the SNF to the storage facility using this rail s p u r because then the SNF could remain on the same trains for the entire j o u r n e y to the storage facility. Not only would this have been logistically easier, b u t it would have exposed PFS' workers to less radiation than using the ITF and w o u l d not have involved transporting SNF using slow-moving heavy-haul trucks t r a v e l l i n g on a public road. Congress nixed the possibility of this rail spur, h o w e v e r , when it designated the area over which the rail spur would have run as w i l d e r n e s s area, through which no right-of-way could be granted, see 43 C.F.R. § 2801.6(b)(3) (noting that, with limited exceptions, BLM regulations authorizing r i g h t s - o f - w a y across federal land do not apply to designated wilderness areas). PFS then turned to its alternative plan to build the ITF and use the heavy-haul t r u c k s to complete transporting the SNF to the storage site. The final e n v i r o n m e n t a l impact statement ("FEIS") indicated that, although the ITF t r a n s p o r t a t i o n option would expose PFS' workers to more radiation than using t h e proposed rail spur, the doses of radiation could, nevertheless, be managed t o remain within acceptable limits. Further, although the ITF transportation o p t i o n would disrupt traffic on Skull Valley Road, the FEIS determined that the d i s r u p t i o n would be "small," which the FEIS defined as not detectable or so m i n o r that it would not destabilize or noticeably affect the resource.
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T h e NRC licensed PFS to store a total of 40,000 metric tons (44,000 tons) o f SNF at the Skull Valley facility. Because each cannister will hold ten metric t o n s of SNF, the facility will contain up to 4,000 storage casks, each e n c a p s u l a t i n g a cannister of SNF. PFS intends to accept for storage SNF from i t s own members, as well as from other utilities. Plaintiffs' lease runs for twenty-five years, with an irrevocable option for a n additional twenty-five-year term. The NRC has licensed the storage facility f o r twenty years; that license can be renewed for an additional twenty years. 6 See 10 C.F.R. § 72.42. When the NRC license expires and the lease ends, PFS must d e c o m m i s s i o n the facility. This will involve removing all SNF, as well as the s h i p p i n g and storage casks and, at the Band's request, any buildings and the c e m e n t s pads, too. The NRC license includes provisions to insure that PFS has a n d will maintain the economic wherewithal to complete this decommissioning. At the time they entered into this lease, Plaintiffs expected that, by the t i m e the NRC license expired and the lease ended, the DOE will have begun o p e r a t i n g a permanent storage facility that would then accept the SNF that had b e e n stored temporarily at Skull Valley. But even without the existence of such a permanent storage facility, the lease obligates PFS to remove all of the SNF f r o m the Skull Valley facility when the NRC license expires and the lease runs

T h e r e is apparently some disagreement on the extent to which the NRC l i c e n s e can be renewed, but that is not a critical fact to the determination of the i s s u e s currently before this court.

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o u t . PFS intends to fulfill this obligation through its contracts with the utilities w h i c h will be storing their SNF at the Skull Valley facility. Those utilities will c o n t i n u e to own the SNF, even while it is stored at the Skull Valley facility, and t h e y will be contractually obligated to remove their SNF from the Skull Valley s i t e when PFS' NRC license expires, regardless of whether or not there is a D O E - o p e r a t e d permanent storage facility available. B. A d m i n i s t r a t i v e proceedings I n order to begin operating this storage facility on the Skull Valley Band's r e s e r v a t i o n , Plaintiffs had to obtain the approval of several federal a d m i n i s t r a t i v e agencies. PFS, therefore, applied for a license from the NRC to o p e r a t e the storage facility, and for a right-of-way from the Bureau of Land M a n a g e m e n t ("BLM"), a bureau within the DOI, on which to build and operate its I T F . Further, because the Skull Valley Band is a federally recognized Indian t r i b e , see 61 Fed. Reg. 58211-02 (Nov. 13, 1996), and the United States holds i t s land in trust, Plaintiffs had to obtain the approval of their lease agreement f r o m the Bureau of Indian Affairs ("BIA"), another bureau within the DOI. In considering Plaintiffs' requested administrative actions, each of these a g e n c i e s first had to comply with the National Environmental Policy Act, 42 U . S . C . §§ 4321-4370f ("NEPA"). Briefly stated, NEPA requires a federal a g e n c y , "before undertaking `major Federal actions significantly affecting the q u a l i t y of the human environment,'" to evaluate and disclose the potential e n v i r o n m e n t a l impacts of that proposed action. Forest Guardians v. U.S. Forest S e r v . , 495 F.3d 1162, 1172 (10th Cir. 2007) (quoting 42 U.S.C. § 4332(2)(C)).

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T h i s requirement serves "twin aims": "First, NEPA forces government agencies t o consider every significant aspect of the environmental impact of a proposed a c t i o n . Second, NEPA mandates that government agencies inform the public of t h e potential environmental impacts of proposed actions and explain how their d e c i s i o n s address those impacts." Citizens' Comm. to Save Our Canyons v. U . S . Forest Serv., 297 F.3d 1012, 1021 (10th Cir. 2002) (quotations, citations o m i t t e d ) . NEPA imposes procedural, rather than substantive, requirements, h o w e v e r ; it "does not mandate particular results." Lee v. U.S. Air Force, 354 F . 3 d 1229, 1237 (10th Cir. 2004) (quotation omitted). Nor does it "require a g e n c i e s to elevate environmental concerns over other appropriate c o n s i d e r a t i o n s ; it requires only that the agency take a `hard look' at the e n v i r o n m e n t a l consequences before taking a major action. In other words, it p r o h i b i t s uninformed­rather than unwise­agency action." Citizens' Comm. to S a v e Our Canyons v. Kreuger, 513 F.3d 1169, 1178 (10th Cir. 2008) ("Kreuger") ( q u o t a t i o n , alteration omitted). Where, as here, "the action subject to NEPA r e v i e w is triggered by a proposal or application from a private party, it is a p p r o p r i a t e for the agency to give substantial weight to the goals and objectives o f that private actor." Fuel Safe Washington v. FERC, 389 F.3d 1313, 1324 ( 1 0 t h Cir. 2004) (quotation omitted). In this case, the administrative agencies involved in the PFS/Skull Valley p r o j e c t chose to comply with NEPA by acting together. The NRC took the lead, w i t h the BIA and BLM acting as cooperating agencies, in preparing a draft e n v i r o n m e n t a l impact statement ("DEIS"), seeking public comment on that

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d o c u m e n t , and then issuing a final environmental impact statement ("FEIS"). See 40 C.F.R. §§ 1501.5, 1501.6. The FEIS these agencies prepared r e c o m m e n d e d going forward with the PFS/Skull Valley project, but preferring the u s e of the rail spur, rather than the ITF, to transport the SNF to the storage facility. F o l l o w i n g completion of the FEIS, the NRC issued PFS a license to o p e r a t e the storage facility. 7 Upper level DOI officials then assumed control of P F S ' right-of-way application from the BLM and denied that application, after c o n c l u d i n g that to grant the application would be against the public interest b e c a u s e there still remained too many unanswered questions about the project. Upper level DOI officials also took over Plaintiffs' lease approval request from t h e BIA and disapproved the lease for a number of reasons, including the need t o protect the reservation for future generations of the Skull Valley Band. 8 Plaintiffs now invoke the APA to obtain judicial review of these two decisions. 9 T h e NRC's decision to issue PFS a license is being challenged in l i t i g a t i o n in the D.C. Circuit. That action has been stayed, however, pending a d e c i s i o n in this case. See Ohngo Gaudadeh Devia v. NRC, 492 F.3d 421, 422 ( D . C . Cir. 2007). O r d i n a r i l y the BIA and the BLM would make the initial decisions on these r e q u e s t s , and then that decision could be administratively appealed. But here, u p p e r level DOI officials made the initial decision, which represented the a g e n c y ' s final, and thus appealable, determination. I n addition to the DOI, Plaintiffs also originally named as defendants the i n d i v i d u a l DOI officials who issued these decisions, James E. Cason, Associate D e p u t y Secretary of the Interior, and Chad Calvert, Acting Assistant Secretary of t h e Interior for Land and Mineral Management. In their amended complaint, P l a i n t i f f s added a new assistant secretary for land and mineral management, C.
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S e e 5 U.S.C. § 702. I I . STANDARD OF REVIEW U n d e r the APA, "[t]he reviewing court shall . . . hold unlawful and set a s i d e agency action . . . found to be . . . arbitrary, capricious, an abuse of d i s c r e t i o n , or otherwise not in accordance with law . . . ." 5 U.S.C. § 706(2)(A); s e e also TMJ Implants, Inc. v. U.S. Dep't of Health & Human Servs., 584 F.3d 1 2 9 0 , 1299 (10th Cir. 2009). A court will also "set aside an agency's action if t h e agency has failed to follow required procedures." Krueger, 513 F.3d at 1176. A court's review under the APA is "highly deferential," id. (quotation o m i t t e d ) ; and the reviewing court may not substitute its judgment for that of the a g e n c y , see United Keetoowah Band of Cherokee Indians v. U.S. Dep't of H o u s i n g & Urban Dev., 567 F.3d 1235, 1239 (10th Cir. 2009). Nevertheless, the c o u r t is still "required `to engage in a substantial inquiry' and to conduct a ` t h o r o u g h , probing, in-depth review.'" Id. (quoting Citizens to Preserve Overton P a r k , Inc. v. Volpe, 401 U.S. 402, 415 (1971), abrogated on other grounds by C a l i f a n o v. Sanders, 430 U.S. 99, 105 (1977)). While administrative agencies'

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S t e p h e n Allred. And Defendants, in the caption of their pleadings, have now s u b s t i t u t e d Laura Davis for Cason. See Fed. R. Civ. P. 25(d) providing that, " w h e n a public officer who is a party in an official capacity . . . ceases to hold o f f i c e while the action is pending[,] [t]he officer's successor is automatically s u b s t i t u t e d as a party"). Because the substitution is "automatic," the caption h a s been changed to reflect the caption as it appears on Defendants' latest briefs.

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d e c i s i o n s are afforded a presumption of validity, 10 a decision will nonetheless be arbitrary and capricious if the agency entirely failed to consider an i m p o r t a n t aspect of the problem, offered an explanation for its decision t h a t runs counter to the evidence before the agency, or is so i m p l a u s i b l e that it could not be ascribed to a difference in view or the p r o d u c t of agency expertise. Furthermore, [the reviewing court] must d e t e r m i n e whether the disputed [agency] decision was based on c o n s i d e r a t i o n of the relevant factors and whether there has been a c l e a r error of judgment. Morris v. U.S. NRC, 598 F.3d 677, 690-91 (10th Cir. 2010) (quotation omitted). "Because the arbitrary and capricious standard [of review] focuses on the r a t i o n a l i t y of an agency's decision making process rather than the rationality of t h e actual decision, it is well established that an agency's action must be u p h e l d , if at all, on the basis articulated by the agency itself." Colo. Wild v. U.S. F o r e s t Serv., 435 F.3d 1204, 1213 (10th Cir. 2006) (quotation, alteration omitted). P l a i n t i f f s bear the burden of establishing that the agency's action is i n v a l i d . 11 See Sorenson Commc'ns, Inc. v. FCC, 567 F.3d 1215, 1221 (10th Cir. B e c a u s e the two DOI decisions at issue here must be vacated under this s t a n d a r d of review, the Court need not address Plaintiffs' argument that, in light o f the procedural irregularities occurring during the administrative proceedings, t h e DOI's decisions are not entitled to this presumption of validity or regularity. Plaintiffs argued that the DOI's decisions were not entitled to a "presumption of r e g u l a r i t y " because the DOI failed to consult with the Band in a proper manner. In particular, Plaintiffs asserted that, after the NRC issued PFS a license to o p e r a t e the Skull Valley storage facility, upper level DOI officials took over c o n s i d e r a t i o n of the lease and PFS' right-of-way application and succumbed to p o l i t i c a l pressure against the PFS/Skull Valley project. O r d i n a r i l y a reviewing court will consider only the administrative record t h a t was before the agency at the time it made the challenged decisions. See 5 U . S . C . § 706; Citizens for Alternatives to Radioactive Dumping v. U.S. Dep't of
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2009). III. DISCUSSION A. D O I ' s denial of PFS' right-of-way application P F S applied with the BLM for a right-of-way to build and operate its ITF o n federal land. The Federal Land Policy and Management Act, 43 U.S.C. § § 1701-87 ("FLPMA"), authorizes the Secretary of the Interior to grant r i g h t s - o f - w a y over public land for, among other purposes, transportation f a c i l i t i e s . 12 See id. § 1761(a)(6), (7). The Secretary manages public land
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E n e r g y , 485 F.3d 1091, 1096 (10th Cir. 2007). In this case, however, the Court p e r m i t t e d Plaintiffs minimally to supplement the administrative record because P l a i n t i f f s had adequately alleged that the DOI, in making the administrative d e c i s i o n s at issue here, both considered factors left out of the administrative r e c o r d and ignored other factors that were relevant to its decisions. After b r i e f i n g on the merits, Defendants complained that Plaintiffs attached additional m a t e r i a l s to their merits brief, materials that Defendants contend were not i n c l u d e d in the supplemented administrative record. In particular, Defendants m o v e d to strike two documents Plaintiffs had attached to their briefs: Plaintiffs' E x h i b i t 6, a "Cooperative Law Enforcement Agreement" involving Tooele County, t h e BIA, and the Skull Valley Band; and Plaintiffs' Exhibit 7, an agreement dated M a y 23, 2000, between PFS and Tooele County whereby PFS agreed to make p a y m e n t s to the County in order to mitigate some of the impact the storage f a c i l i t y might have on County resources. In light of Defendants' objection, P l a i n t i f f s withdrew these two exhibits during a hearing before this Court. Nonetheless, the administrative record contains the Cooperative Law E n f o r c e m e n t Agreement, as well as numerous references to the existence and t e r m s of the agreement between PFS and Tooele County. Therefore, the Court w i l l consider this information to the extent reflected in the administrative record. See 5 U.S.C. § 706. T h e term right-of-way, for FLPMA purposes, includes "an easement, l e a s e , permit, or license to occupy, use, or traverse public lands." 43 U.S.C. § 1702(f). PFS sought a right-of-way to build and operate its ITF on just a few a c r e s of public land located between Interstate 80 and the commercial railroad t r a c k on which PFS intended to ship the SNF this far. Many of the DOI's
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t h r o u g h the BLM. See id. § 1731(b). In its Record of Decision, issued by then Acting Assistant Secretary of the I n t e r i o r for Land and Minerals Management Chad Calvert ("Calvert ROD"), the D O I denied PFS' application after concluding that the requested right-of-way w a s contrary to the public interest, see 43 C.F.R. § 2804.26(a)(2). 13 More s p e c i f i c a l l y , the DOI concluded that the right-of-way was against the public

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c o n c e r n s in denying PFS' right-of-way application, however, involved the use of S k u l l Valley Road to transport the SNF from the ITF to the storage facility l o c a t e d on the reservation. But PFS did not need to obtain a right-of-way from t h e DOI to transport the SNF down Skull Valley Road. 4 3 C.F.R. § 2804.26(a) provides the BLM with six reasons for denying a r i g h t - o f - w a y application: B L M may deny your application if: ( 1 ) The proposed use is inconsistent with the purpose for w h i c h BLM manages the public lands described in your application; ( 2 ) The proposed use would not be in the public interest; ( 3 ) You are not qualified to hold a grant; ( 4 ) Issuing the grant would be inconsistent with the Act, o t h e r laws, or these or other regulations; ( 5 ) You do not have or cannot demonstrate the technical o r financial capability to construct the project or operate f a c i l i t i e s within the right-of-way; or ( 6 ) You do not adequately comply with a deficiency notice ( s e e § 2804.25(b) of this subpart) or with any BLM r e q u e s t s for additional information needed to process the application.
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i n t e r e s t because "[t]oo many questions remain unanswered to grant the r i g h t - o f - w a y at this time. . . . We cannot agree . . . that all appropriate land m a n a g e m e n t questions have been answered at this time." (Calvert ROD at 10.) In support of that conclusion, the DOI determined that the FEIS both failed to c o n s i d e r a number of relevant questions adequately and also could not have a d d r e s s e d several pertinent new developments occurring after the FEIS was i s s u e d . However, because the DOI was relying upon the information in the FEIS t o inform its decision on PFS' right-of-way application, and because it was the D O I ' s obligation under NEPA to prepare an adequate FEIS, see Kreuger, 513 F . 3 d at 1177-78, the DOI's decision to deny PFS' right-of-way application b e c a u s e of its own failure to prepare an adequate FEIS was arbitrary and capricious. In denying PFS' application, the DOI specifically determined that, while t h e FEIS fully considered how the SNF would be transported to the storage f a c i l i t y , the FEIS had not fully considered the impact that the removal of SNF f r o m the Skull Valley storage facility, and the use of Skull Valley Road to remove t h e SNF, would have on the environment. The DOI also suggested that the F E I S was inadequate because it failed to address sufficiently the possibility of a t e r r o r i s t attack. 14 B e c a u s e the DOI was obligated to prepare an FEIS that adequately a d d r e s s e d the environmental impacts of the proposed right-of-way, see Kreuger, 5 1 3 F.3d at 1178, the DOI's reasoning in the Calvert ROD, that its FEIS did not a d e q u a t e l y consider this matter, appears to concede that the DOI did not fulfill i t s obligations under NEPA. See Lee, 354 F.3d at 1241 (noting "[a]n agency
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T h e DOI also determined that it had not fully considered new c i r c u m s t a n c e s occurring after the cooperating agencies issued the FEIS in 2001. Those new circumstances include the Skull Valley Band's current operation of t h e "Tekoi Balefill, a disposal site for bundled waste," which has increased truck t r a f f i c on Skull Valley Road, 15 and Congress' designation of the nearby Cedar
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m u s t obtain and include in the EIS information on reasonably foreseeable s i g n i f i c a n t adverse impacts that are essential to a reasoned choice among a l t e r n a t i v e s if the costs of obtaining such information are not exorbitant," citing 4 0 C.F.R. § 1502.22) (quotation omitted). That, alone, would warrant vacating t h e DOI's decision to deny PFS' right-of-way application and remanding PFS' r i g h t - o f - w a y application in order for the DOI to consider adequately the impacts o f the removal of SNF from the proposed Skull Valley storage facility. See U t a h n s for Better Transp. v. U.S. Dep't of Transp., 305 F.3d 1152, 1163, 1192 ( 1 0 t h Cir. 2002) (remanding to agency where FEIS was inadequate). T h e FEIS, issued in 2001, noted that transporting SNF down Skull Valley R o a d would have only a "small," or "small to moderate," impact. Several years a f t e r the FEIS was issued, however, in 2004, the Skull Valley Band began o p e r a t i n g the Tekoi Balefill. The balefill is essentially a landfill, but the refuse h a s been bundled into bales before being transported for disposal. The DOI, in i t s Calvert ROD, estimated that the balefill receives 130 to 160 truckloads of b u n d l e d refuse from the Salt Lake City area each day. However, the portion of t h e balefill DEIS found in this administrative record indicated that if and when P F S begins transporting SNF down Skull Valley Road using the slow-moving h e a v y - h a u l trucks, the balefill traffic will use an alternate route during the s p e c i f i c times that the heavy-haul trucks are travelling down Skull Valley Road. In its Calvert ROD, the DOI indicated that the Balefill's traffic on Skull V a l l e y Road causes two problems that the agency has not fully considered. First, the DOI did not consider the impact of this increased traffic on Skull Valley R o a d . Second, the ROD noted, inconclusively, that members of the public c o m m e n t e d that this increased traffic on Skull Valley Road might result in the S N F staying longer at the ITF than originally intended. Plaintiffs justifiably r e s p o n d that there is no evidence in the record to support the DOI's concern t h a t the SNF would be delayed at the ITF so long that it would essentially be s t o r e d there. In any event, the FEIS already previously considered and rejected t h e general argument that SNF waiting at the ITF to be transported to the
15

(continued...) 15

M o u n t a i n Wilderness area, which requires further study both to determine w h e t h e r the ITF will affect that area and, because the wilderness area e l i m i n a t e d the FEIS' preferred alternative­shipping the SNF to the storage f a c i l i t y via the new rail spur­to give a closer look at the ITF transportation a l t e r n a t i v e than the FEIS originally gave it. 16 Based on these determinations­that the FEIS failed to consider a d e q u a t e l y the removal of the SNF from the PFS storage facility and the p o s s i b i l i t y of terrorist attacks, and because the FEIS could not have considered

15

(...continued)

s t o r a g e facility would be "stored" there. A n FEIS must include a discussion of alternatives to the proposed a c t i o n ; that is, the FEIS must "evaluate[] the environmental impacts of the p r o p o s e d action, as compared with the impact of alternative course of action." Fuel Safe Washington, 389 F.3d at 1323; see also 42 U.S.C. § 4332(2)(C)(iii). In fact, "[t]he consideration of alternatives to a proposed action is `the heart of t h e environmental impact statement.'" Lee, 354 F.3d at 1238 (quoting 40 C.F.R. § 1502.14). Therefore, "Council on Environmental Quality (CEQ) regulations i m p l e m e n t i n g NEPA require agencies to `rigorously explore and objectively e v a l u a t e all reasonable alternatives,'" and not just the alternative the FEIS p r e f e r r e d . Id. (quoting 40 C.F.R. § 1502.14) (alteration, emphasis omitted); see a l s o 43 C.F.R. § 46.425(c) (DOI regulations pertaining to public lands requiring a g e n c y to "rigorously explore" alternatives); see Colo. Wild, 435 F.3d at 1209 ( n o t i n g CEQ regulations bind every federal agency). So the DOI's reasoning in t h i s regard, that here the FEIS did not adequately consider the transportation a l t e r n a t i v e involving use of the ITF, again calls into question whether the DOI i n i t i a l l y fulfilled its NEPA obligations. Before this court, Defendants further assert that the harms recognized in t h e FEIS associated with using the ITF­greater radiation exposure of PFS' e m p l o y e e s and disruption of traffic on Skull Valley Road­justify denying PFS' r i g h t - o f - w a y application outright. But the DOI, in its Calvert ROD, did not rely on t h a t reasoning to deny PFS' right-of-way application, and this Court's review is l i m i t e d to the reasons proffered by the DOI in its challenged decision, see Colo. W i l d , 435 F.3d at 1213.
16

16

t h e now-operating Tekoi balefill and the newly-designated Cedar Mountain W i l d e r n e s s Area­the DOI denied PFS' right-of-way application. The Court does n o t question that the DOI needs to consider fully these matters before ruling on P F S ' right-of-way application. But here, the DOI denied that application b e c a u s e its own FEIS was not adequate. That was arbitrary and capricious. See Kreuger, 513 F.3d at 1177-78 (quotation omitted) (noting that NEPA places t h e burden of conducting an adequate study of the environmental impacts of a p r o p o s e d action on the agency and "prohibits uninformed . . . agency action"). This is particularly true where, as here, the DOI, acting through the BLM, h a s readily available mechanisms which it could have invoked to obtain the i n f o r m a t i o n it found lacking in the FEIS. CEQ regulations require an a g e n c y ­ h e r e the DOI­to prepare a supplemental environmental impact s t a t e m e n t ("SEIS") when "[t]here are significant new circumstances or i n f o r m a t i o n relevant to environmental concerns and bearing on the proposed a c t i o n or its impacts"; CEQ regulations further provide that the agency­here the D O I ­ " [ m ] a y also prepare supplements when the agency determines that the p u r p o s e s of [NEPA] will be furthered by doing so." 17 43 C.F.R. § 1502.9(c)(1)(ii), (2). See Ecology Ctr., Inc. V. U,S, Forest Serv., 451 F.3d

N E P A created the Council on Environmental Quality ("CEQ"), see 42 U . S . C . § 4342, and charged that agency with administering NEPA and p r o m u l g a t i n g regulations related to NEPA that are binding on all federal a g e n c i e s , 40 C.F.R. Pts. 1500-08. See Colo. Wild, 435 F.3d at 1208-09. In a d d i t i o n to those CEQ regulations, "[e]very federal agency then drafts its own a d m i n i s t r a t i v e regulations to implement and supplement the CEQ regulations." Id, at 1209; see also 40 C.F.R. §§ 1505.1, 1507.3.

17

17

1 1 8 3 , 1189 (10th Cir. 2006) (noting agency prepared SEIS after deeming EIS i n c o m p l e t e ) ; see also Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 371 ( 1 9 8 9 ) (noting NEPA ensures agency will not act on incomplete information). B e y o n d the NEPA process, however, the DOI, through the BLM, "may r e q u i r e [a right-of-way applicant] to submit additional information at any time w h i l e processing the application," and can "[t]ake any other action necessary to f u l l y evaluate and decide whether to approve or deny [the] application." 43 C . F . R . § 2804.25(b), (d)(6); see also 43 U.S.C. § 1761(b); 43 C.F.R. § 2884.11(c)(8), (11). If the applicant fails to provide information requested by t h e BLM, then the BLM or the DOI can deny the application on that basis. See 4 3 C.F.R. § 2804.26(a)(6). But there is no indication here that either the BLM or t h e DOI ever requested that PFS provide the additional information the DOI d e e m e d necessary in its Calvert ROD. Thus, the DOI had an obligation to prepare an adequate FEIS and had a v a i l a b l e to it a number of mechanisms to obtain the information it determined it n e e d e d in order to consider thoroughly PFS' right-of-way application. Moreover, t h e information the DOI found the FEIS lacked generally appears to be readily o b t a i n a b l e . Cf. 40 C.F.R. 1502.22(a) (noting that, "[i]f the incomplete i n f o r m a t i o n relevant to reasonably foreseeable significant impacts is essential to a reasoned choice among alternatives and the overall costs of obtaining it are n o t exorbitant, the agency shall include the information in the" EIS). Because t h e DOI did not invoke any of these available mechanisms to obtain the a d d i t i o n a l information it deemed necessary for a thorough consideration of PFS'

18

r i g h t - o f - w a y application, but instead simply denied PFS' right-of-way application b e c a u s e there were too many questions left unanswered, the DOI's decision w a s arbitrary and capricious, and an abuse of discretion. 18 See Colo. Wild, 435 F . 3 d at 1213 (requiring, under arbitrary-and-capricious review, "reasoned basis f o r agency action"). Finally, the DOI denied PFS' right-of-way after noting that PFS would not b e eligible for public funding. However, because the PFS/Skull Valley project w a s not premised on any public funding, this point does not support DOI's d e c i s i o n to deny the right-of-way. For these reasons, the DOI's decision to deny PFS' right-of-way a p p l i c a t i o n was arbitrary and capricious, and an abuse of discretion. 19 On P l a i n t i f f s suggest that the DOI was required to prepare an SEIS. Defendants counter with several arguments why they believe Plaintiffs cannot a s s e r t such a claim under NEPA. Although Plaintiffs invoke NEPA in their a r g u m e n t s to this Court, they do so only in response to the DOI's decision to d e n y PFS' right-of-way application after determining that the DOI's own FEIS w a s inadequate. Plaintiffs certainly have standing, see 5 U.S.C. § 702, and can i n v o k e NEPA to challenge the denial of PFS' right-of-way application on that basis. D e f e n d a n t s further assert that the DOI denied PFS' right-of-way a p p l i c a t i o n , despite not having adequate information to consider that application f u l l y , because the Skull Valley Band insisted on a quick decision. But this C o u r t ' s review is limited to the reasons given in the agency's decision, see Colo. Wild, 435 F.3d at 1213, and the DOI, in its Calvert ROD, did not mention t h e need for a quick decision to justify its denial of PFS' right-of-way application. To the extent Plaintiffs asserted a separate claim in their amended c o m p l a i n t alleging the DOI's Calvert ROD violated the Band's 1863 Treaty with t h e United States, the Court deems Plaintiffs to have waived that separate claim b y not addressing and developing it in their briefs. See D.L. v. Unified Sch.
19 18

(continued...) 19

r e m a n d , the DOI can, of course, consider additional evidence concerning the m a t t e r s the Calvert ROD deemed the FEIS to have given insufficient c o n s i d e r a t i o n , as well as the more recent matters that the FEIS could not have considered. B. D O I ' s disapproval of Plaintiffs' lease T h e Indian Long-Term Leasing Act ("ILTLA") required PFS and the Skull V a l l e y Band to obtain the Secretary of the Interior's approval of their lease: " [ a ] n y restricted Indian lands, whether tribally, or individually owned, may be l e a s e d by the Indian owners, with the approval of the Secretary of the Interior, f o r . . . business purposes." 25 U.S.C. § 415(a). However, [p]rior to approval of any lease or extension of an existing lease p u r s u a n t to this section, the Secretary of the Interior shall first satisfy h i m s e l f that adequate consideration has been given to the relationship b e t w e e n the use of the leased lands and the use of neighboring lands; t h e height, quality, and safety of any structures or other facilities to be c o n s t r u c t e d on such lands; the availability of police and fire protection a n d other services; the availability of judicial forums for all criminal a n d civil causes arising on the leased lands; and the effect on the e n v i r o n m e n t of the uses to which the leased lands will be subject. I d . Applying § 415(a), the DOI, in a Record on Decision signed by Associate D e p u t y Secretary of the Interior James Cason ("Cason ROD"), disapproved P l a i n t i f f s ' lease. Plaintiffs contend that that decision was contrary to law, as w e l l as arbitrary and capricious, and an abuse of discretion. 1. T h e Cason ROD was "not in accordance with law"

P l a i n t i f f s first assert that the DOI decision reached in the Cason ROD was
19

(...continued) 20

D i s t . No. 497, 596 F.3d 768, 775 (10th Cir. 2010) (per curiam).

c o n t r a r y to 25 C.F.R. § 162.107(a), which provides that, "[i]n reviewing a n e g o t i a t e d lease for approval, [the agency] will defer to the landowners' d e t e r m i n a t i o n that the lease is in their best interest, to the maximum extent p o s s i b l e . " 20 Under the circumstances presented here, the Court agrees. T h e ILTLA authorized the DOI to promulgate regulations pertaining to l e a s e s involving Indian land. See 25 U.S.C. § 415(a) ("[A]ll leases and renewals s h a l l be made under such terms and regulations as may be prescribed by the S e c r e t a r y of the Interior."); see also Red Mountain Mach. Co. v. Grace Inv. Co., 2 9 F.3d 1408, 1410-11 (9th Cir. 1994). In 2001, the DOI revised its lease r e g u l a t i o n s , see 25 C.F.R. Pt. 162, in order, among other things, to "[i]dentify t h e conditions and authorities under which certain interests in Indian land and G o v e r n m e n t land may be leased," 25 C.F.R. § 162.100(a)(1). See 66 Fed. Reg. 7 0 6 8 - 0 1 (Jan. 22, 2001). It was at this time that the DOI added 25 C.F.R. § 162.107. By that time, however, the BIA had already conditionally approved P l a i n t i f f s ' Lease. Nonetheless, the DOI subsequently disavowed that conditional a p p r o v a l when it ultimately disapproved the Lease in September 2006, five y e a r s after 25 C.F.R. § 162.107 went into effect. Under these circumstances, t h e parties agree that 25 C.F.R. § 162.107 applies here. That regulation, then, p r o v i d e s in full: ( a ) We will assist Indian landowners in leasing their land, either t h r o u g h negotiations or advertisement. In reviewing a negotiated l e a s e for approval, we will defer to the landowners' determination that t h e lease is in their best interest, to the maximum extent possible. In g r a n t i n g a lease on the landowners' behalf, we will obtain a fair annual r e n t a l and attempt to ensure (through proper notice) that the use of t h e land is consistent with the landowners' wishes. We will also r e c o g n i z e the rights of Indian landowners to use their own land, so l o n g as their Indian co-owners are in agreement and the value of the l a n d is preserved. ( b ) We will recognize the governing authority of the tribe having j u r i s d i c t i o n over the land to be leased, preparing and advertising l e a s e s in accordance with applicable tribal laws and policies. We will p r o m o t e tribal control and self-determination over tribal land and other l a n d under the tribe's jurisdiction, through contracts and s e l f - g o v e r n a n c e compacts entered into under the Indian
20

(continued...) 21

T h e DOI, in its Cason ROD, did not even mention 25 C.F.R. § 162.107(a) o r its requirement that the DOI defer, "to the maximum extent possible," to the S k u l l Valley Band's determination that its lease with PFS was in the Band's best i n t e r e s t . 21 Nor did the DOI employ § 162.107(a)'s language or otherwise discuss w h y it was rejecting the Band's determination that its lease with PFS was in its b e s t interest. To the contrary, the DOI focused only on its role as trustee for the B a n d , concluding that it had "weigh[ed] the benefits to the Band against the s i g n i f i c a n t uncertainties and other factors" and "conclude[d] that it is not c o n s i s t e n t with the conduct expected of a prudent trustee to approve a proposed l e a s e that promotes storing SNF on the reservation." 22 (Cason ROD at 19.)
20

(...continued)

S e l f - D e t e r m i n a t i o n and Education Assistance Act, as amended, 25 U . S . C . § 450f et seq. 2 5 C.F.R. § 162.107 (emphasis added). The regulation's use of the word "we" r e f e r s to the BIA, to which the Secretary has delegated his lease-approval a u t h o r i t y , see Garreaux v. United States, 544 F. Supp.2d 885, 893 (D. S.D. 2008). T h e DOI, in its Cason ROD, only makes two passing, non-substantive r e f e r e n c e s to 25 C.F.R. Part 162 generally. (Cason ROD at 12 n.10, 18.) T h e DOI did acknowledge the Skull Valley Band's interest in having its l e a s e with PFS approved, but the DOI did so only with a focus on its role as t r u s t e e for the Band: A s trustee-delegate, the Secretary has the complex task of weighing t h e long-term viability of the Skull Valley Goshute reservation as a h o m e l a n d for the Band (and the implications for preservation of Tribal c u l t u r e and life) against the benefits and risks from economic d e v e l o p m e n t activities proposed for property held in trust by the U n i t e d States for the benefit of the Band. . . .
22 21

(continued...) 22

F u r t h e r m o r e , all of the cases on which the DOI relied, in the Cason ROD, to set f o r t h the standard the DOI was applying to consider Plaintiffs' lease predate 25 C . F . R . § 162.107. Moreover, the manner in which the DOI considered Plaintiffs' lease further i n d i c a t e s that the DOI did not comply with 25 C.F.R. § 162.107(a)'s mandate to " d e f e r to the landowners' determination that the lease is in their best interest, to t h e maximum extent possible." After the NRC, in February 2006, issued PFS a l i c e n s e to operate the storage facility on the Skull Valley reservation, the Skull V a l l e y Band wrote to and met with DOI officials, urging the DOI to approve

22

(...continued)
....

. . . We see our primary duty as trustee-delegate, under the law r e g a r d i n g this and other proposed leases, to be the protection of the t r u s t res as a future homeland and productive land base for the Band t h r o u g h the prudent exercise of informed discretion after considering a l l the relevant factors. W e are cognizant of and have carefully considered the e c o n o m i c impact to the Band in making this decision. We are aware o f the income the proposed lease would provide the Band, and that e c o n o m i c benefit has weighed heavily in our consideration of the p r o p o s e d lease. Upon weighing the benefits to the Band against the s i g n i f i c a n t uncertainties and other factors discussed below, we c o n c l u d e that it is not consistent with the conduct expected of a p r u d e n t trustee to approve a proposed lease that promotes storing S N F on the reservation. In reaching this conclusion, we emphasize t h a t the decision to disapprove the proposed lease and choose the [ F E I S ' s ] no action alternative in this ROD does not foreclose other e c o n o m i c development activities that the Band could pursue. ( C a s o n ROD at 18-19.)

23

P l a i n t i f f s ' lease. 23 In at least three letters sent to the DOI during this time frame, t h e Skull Valley Band indicated that, if the DOI still had concerns about a p p r o v i n g the lease or if there were issues the DOI still needed to resolve r e g a r d i n g the lease, the Band would be happy to address these issues and c o n c e r n s . The DOI, however, never responded to the Band's offers, nor did the D O I ever seek any additional information. 24 Yet, similar to its decision in the C a l v e r t ROD, the DOI in its Cason ROD disapproved Plaintiffs' lease in part b e c a u s e the DOI concluded that it did not have sufficient information about the 2 5 U.S.C. § 415(a) factors relevant to the approval or disapproval of Plaintiffs' l e a s e . These circumstances, then, further indicate that the DOI, in disapproving W h e n the BIA originally approved Plaintiffs' lease, in 1997 (an approval t h e agency later disavowed), the agency conditioned its approval on the o c c u r r e n c e of several things, including the completion of the NEPA analysis, P l a i n t i f f s ' incorporation of any mitigation efforts the FEIS suggested, and the N R C ' s issuance of a license. When the NRC issued PFS a license in February 2 0 0 6 , all of these conditions had been met. It was in light of that that the Skull V a l l e y Band urged the DOI finally to approve Plaintiffs' lease. It was not until t h e Cason ROD, issued in September 2006, that the DOI withdrew its earlier c o n d i t i o n a l approval of the lease, at the same time DOI finally disapproved P l a i n t i f f s ' lease. Plaintiffs are challenging the final disapproval of the lease. P l a i n t i f f s further point out that sections of the DOI's "Departmental M a n u a l " require the agency to "consult with tribes on a g o v e r n m e n t - t o - g o v e r n m e n t basis whenever plans or actions affect tribal trust r e s o u r c e s , trust assets or tribal health and safety." (Plaintiffs Br. 18, ex. 5 at 1.) The manual also provides that, for any proposed agency action that might affect t r i b a l trust resources, the DOI must "[c]learly state the rationale for the r e c o m m e n d e d decision" and "[e]xplain how the decision will be consistent with t h e Department's trust responsibility." (Id. at 2.) Further, the Manual requires t h a t "[e]ach bureau and office within the [DOI] be open and candid with tribal g o v e r n m e n t ( s ) during the consultations so that the affected tribe(s) may fully e v a l u a t e the potential impact of the proposal on trust resources and the affected b u r e a u ( s ) or office(s), as trustee, may fully incorporate tribal views in its d e c i s i o n - m a k i n g processes." (Id.)
24 23

24

P l a i n t i f f s ' lease, did not defer to the Band's determination of its best interests, to t h e maximum extent possible. In reaching this conclusion, the Court need not s p e c i f y exactly what efforts the DOI should have undertaken to fulfill its o b l i g a t i o n under 25 C.F.R. § 162.107(a) because here the DOI did not undertake a n y such effort. At a minimum, the DOI should have at least responded to the B a n d ' s offer to address any concerns the DOI had about the lease before d i s a p p r o v i n g that lease. For these reasons, the Court vacates the DOI's d e c i s i o n to disapprove Plaintiffs' lease and remands the lease to the DOI for its f u r t h e r consideration in light of 25 C.F.R. § 162.107(a). I n doing so, the Court notes that this regulation clearly does not mandate t h a t the agency simply acquiesce to the Indian landowner's wishes, because the r e g u l a t i o n qualifies the DOI's deference to the Band's own determination of its b e s t interest with the phrase "to the maximum extent possible." Further, this r e g u l a t i o n implements 25 U.S.C. § 415(a), which still requires the Secretary, in d e c i d i n g whether or not to approve a lease of Indian land, to consider a number o f factors beyond just the Indian landowner's wishes. Nevertheless, deferring to the Indian landowners' determination as to what i s in their best interest is consistent with 25 U.S.C. § 415(a), which is "intended t o protect Native American interests." Nulankeyutmonen Nkihtaqmikon v. I m p s o n , 503 F.3d 18, 30 (1st Cir. 2007) ("Impson") (quotation, alteration o m i t t e d ) ; see also Bullcreek v. U.S. Dep't of Interior, 426 F. Supp.2d 1221, 1230 ( D . Utah 2006) (noting § 415(a) "protects the ability of owners of restricted I n d i a n lands to lease those lands"); Utah v. U.S. Dep't of Interior, 45 F. Supp.2d

25

1 2 7 9 , 1283 (D. Utah 1999) (noting that "§ 415(a) is primarily concerned with p r o t e c t i n g Native American interests by insuring that their land transactions with t h i r d parties are advantageous"). And courts have note[d] that the long-standing objective spurring passage of the L o n g - T e r m Leasing Act was to encourage and enable Indian l a n d o w n e r s to handle their own affairs without assistance from the f e d e r a l government. It is consistent with this basic objective that the d u t i e s of the government be interpreted minimally, ensuring that I n d i a n s receive the full responsibility of managing their own affairs. Brown v. United States, 42 Fed. Cl. 538, 553 (Fed. Cl. 1998) (addressing United S t a t e s ' role in ensuring that lessee complies with terms of approved lease; f u r t h e r noting that the Act provides the government with a "limited . . . caretaker r o l e " of approving the lease, after "ensur[ing] that the lease, being of long d u r a t i o n , is not harmful to the Indian[s'] long-term interests"), aff'd, 195 F.3d 1 3 3 4 (Fed. Cir. 1999). Similarly, the DOI promulgated 25 C.F.R. § 162.107, as w e l l as other regulations in 25 C.F.R. Pt. 162, in part to "provide for more p e r v a s i v e deference to tribal law and tribal self-determination." 66 Fed. Reg. 7 0 6 8 - 0 1 , 7080; see also Siemon v. Rocky Mountain Reg'l Dir., 48 IBIA 249, 254 ( F e b . 5, 2009) ("BIA's decision whether to approve a lease is based on the best i n t e r e s t of the Tribe," citing e.g., 25 C.F.R. § 162.107); Anderson v. Acting Sw. R e g ' l Dir., 44 IBIA 218, 227 (Apr. 9, 2007) (noting that, "in exercising its trust o b l i g a t i o n , BIA is entitled to give considerable deference to the Pueblo's j u d g m e n t of what is in its own interest," citing 25 C.F.R. § 162.107(a)). 25 T h e Court rejects Plaintiffs' assertion that 25 C.F.R. § 162.107 signals t h a t the DOI no longer acts as a trustee for the Skull Valley Band. Prior to the
25

(continued...) 26

2.

T h e Cason ROD was arbitrary and capricious, and an abuse of discretion

A l t h o u g h the DOI's failure to comply with 25 C.F.R. § 162.107(a) requires t h i s Court to remand Plaintiffs' lease to the agency for further consideration, P l a i n t i f f s also challenge a number of the grounds on which the Cason ROD d i s a p p r o v e d their lease as arbitrary and capricious, or an abuse of discretion. The Court will also address those arguments here because doing so may better i n f o r m the agency's consideration of the lease on remand. a. I t was arbitrary and capricious for the ROD to justify d i s a p p r o v i n g the lease because the record before the

25

(...continued)

B I A ' s promulgating this regulation, courts recognized that the DOI, in deciding w h e t h e r to approve a lease of Indian land under 25 U.S.C. § 415, was acting as a trustee for, or in a fiduciary capacity toward, the Indian landowner. See Brown v . United States, 86 F.3d 1554, 1563 (Fed. Cir. 1996); Utah, 45 F. Supp.2d at 1 2 8 3 . Even after the DOI promulgated 25 C.F.R. § 162.107(a) in 2001, courts h a v e continued to recognize a fiduciary or trust relationship. See Oenga v. U n i t e d States, 83 Fed. Cl. 594, 621-22 (Fed. Cl. 2008) (citing Brown, 86 F.3d at 1 5 6 3 ) ; Garreaux, 544 F. Supp.2d at 896 (noting BIA owes fiduciary duty to l a n d o w n e r ) ; Saguaro Chevrolet, Inc. v. United States, 77 Fed. Cl. 572, 580 (Fed. C l . 2007) ("The general purpose of the BIA regulations in the area of leasing I n d i a n land, as indicated in recent revisions to the regulations, is to `further fulfill t h e Secretary's fiduciary responsibility to federally-recognized tribes and i n d i v i d u a l Indians," quoting 66 Fed. Reg. 7068); see also United States v. T o r l a w Realty, Inc., 348 Fed. App'x 213, 218-19 (9th Cir. Sept. 2, 2009) ( u n p u b l i s h e d ) (noting that 25 U.S.C. § 415 "places the Government, in its c a p a c i t y as landowner and trustee, in the paternalistic position of sanctioning o n l y those land uses which strike an appropriate balance between economic d e v e l o p m e n t for the allottees and the impact of that development on the e n v i r o n m e n t a l health and safety of the allotment property and surrounding c o m m u n i t y , " citing only pre-2001 cases for support; but noting that Government m a y have given short shrift in that case to its role of representing Indian a l l o t t e e s ' economic interests). That is consistent with the language of both 25 U . S . C . § 415(a) and 25 C.F.R. § 162.107(a) which requires or at least permits t h e DOI to consider other factors, beyond the Indian landowners' determination o f their best interest, in deciding whether or not to approve a lease.

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a g e n c y was deficient 2 5 U.S.C. § 415(a) directs, in part, that "[p]rior to the approval of any l e a s e . . . , the Secretary of the Interior shall first satisfy himself that adequate c o n s i d e r a t i o n has been given to . . . the effect on the environment of the uses to w h i c h the leased lands will be subject." In addition, NEPA requires the DOI to c o n s i d e r the environmental impacts of the proposed lease, see 42 U.S.C. § 4332(2)(C); Davis, 469 F.2d at 596-98, and "NEPA's scope of review s i g n i f i c a n t l y exceeds that required by § 415(a)," Utah, 210 F.3d at 1196. In this c a s e , the DOI expressly considered the environmental impacts of the proposed S k u l l Valley storage facility through the FEIS. Like its decision in the Calvert ROD, the DOI, in the Cason ROD, d i s a p p r o v e d Plaintiffs' lease, in part, after concluding that its own FEIS i n a d e q u a t e l y addressed a possible terrorist attack and failed to consider fully the p r o c e s s by which the SNF would be removed from the Skull Valley facility after t h e NRC license expires and the lease ends. And like the Calvert ROD, the DOI c o n c l u d e d in the Cason ROD that the DOI had not adequately considered how t h e Tekoi Balefill and the designation of the Cedar Mountain Wilderness Area w o u l d impact, and be impacted by, the PFS/Skull Valley storage facility. For the s a m e reasons discussed above in vacating the Calvert ROD, see supra § III.A, t h e Court also concludes that the DOI's reliance in the Cason ROD on these g r o u n d s to disapprove Plaintiffs' lease was arbitrary and capricious, and an

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a b u s e of discretion. 26 See Impson, 503 F.3d at 29 ("The federal government's d u t y under the Leasing Act [25 U.S.C. § 415(a)] . . . is to ensure that the parties t o a lease of Indian land have given adequate consideration to the impact of the l e a s e on, inter alia, neighboring lands and the environment.") This is all the m o r e true here, where, as discussed above, the Government has a trust r e l a t i o n s h i p with the Skull Valley Band and the DOI's own policies dictate that t h e agency should consult with the tribe. 27 On remand, the agency can, of c o u r s e , consider evidence presented in these matters. b. I t was arbitrary and capricious for the DOI to disapprove P l a i n t i f f s ' lease for reasons contradicted or unsupported b y the record

A n agency's decision will be arbitrary and capricious if the agency "offered a n explanation for its decision that runs counter to the evidence before the a g e n c y . " Morris, 598 F.3d at 690 (quotation omitted). Plaintiffs contend that the D O I disapproved Plaintiffs' lease for several reasons that were contradicted or u n s u p p o r t e d by evidence in the administrative record. Again, the Court agrees. (1) P o l i c e protection

T h e parties interpret the DOI's decision in the Cason ROD to conclude f u r t h e r that the DOI did not adequately consider the police protection available f o r the project, the BIA's ability to enforce Plaintiffs' lease, and the d e c o m m i s s i o n i n g process. To the extent that the DOI concluded in its Cason R O D that the DOI failed to consider these questions adequately, the ROD would a l s o be arbitrary, capricious, and an abuse of discretion, for the same reasons s t a t e d above. F o r the same reasons discussed earlier, the Court rejects Defendants a s s e r t i o n that Plaintiffs cannot assert a NEPA claim challenging the DOI's d e c i s i o n in the Cason ROD.
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26

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I n addition to considering the environmental impacts of the proposed l e a s e , 25 U.S.C. § 415(a) requires the Secretary to "satisfy himself that a d e q u a t e consideration has been given to the relationship between the use of t h e leased lands and use of neighboring lands . . . [and] the availability of police a n d fire protection and other services." The DOI noted, in the Cason ROD, that w h i l e the NRC, in its licensing proceeding, gave "exhaustive consideration to s e c u r i t y at the proposed" storage facility, the DOI instead "is responsible for law e n f o r c e m e n t on the Goshute Reservation and throughout all of Indian Country." (Cason ROD at 24.) The DOI further concluded that neither the BIA, the Skull V a l l e y Band, nor the Tooele County Sheriff's office had the "resources to p r o v i d e adequate law enforcement support for the proposed" PFS/Skull Valley p r o j e c t . (Id.) The DOI specifically noted that BIA "managers estimate that s e v e n full-time law enforcement officers and two support staff would be required t o adequately provide law enforcement services to the Reservation if the [PFS s t o r a g e project] is built." (Id. at 25.) Further, the DOI indicated that the P F S / S k u l l Valley project would require "round-the-clock [law] enforcement s e r v i c e s . . . due to additional traffic and other activities on the Reservation as a r e s u l t of the proposed" storage facility. (Id.) Defendants, however, fail to point out, and the Court has not found, a n y t h i n g in the administrative record to support the DOI's determination that t h e r e will be an increased need for police protection on the reservation (apart f r o m the storage facility's own security), nor that there is a specific need for s e v e n additional full-time BIA law enforcement officers or for round-the-clock law

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e n f o r c e m e n t . 28 To the contrary, the FEIS indicated instead that there would be n o need to increase police protection on the reservation. Therefore, because t h e r e was nothing in the administrative record to support the DOI's d e t e r m i n a t i o n that there is a need for additional police protection, the agency's d e c i s i o n to disapprove the lease on this basis was arbitrary and capricious. 29 See Morris, 598 F.3d at 690. If evidence of such a need is presented to the DOI o n remand, however, the agency can of course consider it. (2) D O I ' s lack of specialized monitoring resources

A f t e r approving a lease of Indian land, the DOI must then enforce the l e a s e and insure that the tenant abides by its terms. See 25 C.F.R. §§ 162.108, 1 6 2 . 6 1 5 - 2 3 . In disapproving Plaintiffs' lease, the DOI appears to identify two

T h e only thing Defendants point to is the FEIS' note that there may be a " s m a l l " increase in traffic on Skull Valley Road and a letter submitted to the DOI f r o m a neighboring tribe concerning its worry that there would be a need for a d d i t i o n a l police officers. That concern, without further support, is insufficient to s u p p o r t this reason the DOI proffered for disapproving the lease. P l a i n t i f f s point out that, if DOI officials had brought their concerns about t h e need for increased law enforcement to Plaintiffs' attention, Plaintiffs could h a v e addressed those concerns to the DOI's satisfaction. Plaintiffs further i n d i c a t e that the Skull Valley Band previously had a contract with the Tooele C o u n t y Sheriff's Department for the provision of police protection, and they s u g g e s t that they could seek to negotiate such an agreement again in the future. Further, Plaintiffs point to a contract that PFS entered with Tooele County w h e r e b y PFS agreed to pay the County approximately $91 million over the life of t h e project in order to ameliorate any impact on the County's services caused by t h e project. Plaintiffs sought to attach as exhibits to their brief both the prior c o n t r a c t between the Skull Valley Band and Tooele County, whereby Tooele C o u n t y agreed to provide law enforcement on the reservation, and the $91 m i l l i o n contract between PFS and the County. In light of Defendants' objection, h o w e v e r , Plaintiffs withdrew those exhibits. As previously mentioned, all of this i n f o r m a t i o n is, in any event, already part of the administrative record.
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d i f f e r e n t problems that would interfere with its ability to enforce the terms of that a g r e e m e n t on the Skull Valley Band's behalf. (a) T h e need for "highly technical" expertise

T h e DOI first determined that the "highly technical nature of the propose