350 Mont. v. Haaland

29 F.4th 1158

350 MONTANA; Montana Environmental Information Center ; Sierra Club; WildEarth Guardians, Plaintiffs-Appellants,

v.Debra HAALAND, Secretary of the Department of the Interior ; U.S. Office of Surface Mining, an agency within the U.S. Department of the Interior ; U.S. Department of the Interior ; Marcelo Calle, in his official capacity as Program Support Division Manager of U.S. Office of Surface Mining Western Region; David Berry, in his official capacity as Regional Director of U.S. Office of Surface Mining Western Region; Glenda Owens, in her official capacity as Deputy Director of U.S. Office of Surface Mining; Laura Daniel-Davis, in her official capacity as Principal Deputy Assistant Secretary of Land and Minerals Management of the U.S. Department of the Interior; Martha Williams, in her official capacity as Director of U.S. Fish and Wildlife Service ; United States Fish and Wildlife Service, an agency within the U.S. Department of the Interior, Defendants-Appellees,Signal Peak Energy, LLC, Intervenor-Defendant-Appellee.

No. 20-35411

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 16, 2021 Anchorage, Alaska

Filed April 4, 2022

Shiloh S. Hernandez (argued) and Melissa A. Hornbein Western Environmental Law Center, Helena, Montana; Nathaniel Shoaff, Sierra Club, Oakland, California; for Plaintiffs-Appellants.

Brian C. Toth (argued), Michelle-Ann Williams, and Robert J. Lundman, Attorneys; Eric Grant, Deputy Assistant Attorney General; Jonathan D. Brightbill, Principal Deputy Assistant Attorney General; Environment & Natural Resources Division, United States Department of Justice, Washington, D.C.; Kristen C. Guerriero and Emily D. Morris, Attorneys; Office of the Solicitor, United States Department of the Interior, Washington, D.C.; for Defendants-Appellees. John C. Martin (argued), Holland & Hart LLP, Washington, D.C.; Hadassah M. Reimer, Holland & Hart LLP, Jackson, Wyoming; Sarah C. Bordelon, Holland & Hart LLP, Reno, Nevada; for Intervenor-Defendant-Appellee.

Mark Norman Templeton and Robert Adam Weinstock, Attorneys; Andrew Burchett, Justin Taleisnik, and Daniel Abrams, Clinic Law Students; Abrams Environmental Law Clinic, Chicago, Illinois; for Amicus Curiae Professor Michael Greenstone.

Richard L. Revesz, Max Sarinsky, and Jason A. Schwartz, Institute for Policy Integrity, New York, New York, for Amicus Curiae Institute for Policy Integrity at New York University School of Law.

Before: Johnnie B. Rawlinson, Morgan Christen, and Ryan D. Nelson, Circuit Judges.

Dissent by Judge R. Nelson

CHRISTEN, Circuit Judge:

In 2018, the Department of the Interior's Office of Surface Mining Reclamation and Enforcement (Interior) approved a proposal to expand a coal mine in south-central Montana. The expansion is expected to result in the emission of 190 million tons of greenhouse gases (GHGs). Interior published an Environmental Assessment (EA) in which it explained that the amount of GHGs emitted over the 11.5 years the Mine is expected to operate would amount to 0.44 percent of the total GHGs emitted globally each year.¹ The 2018 EA also calculated the project's GHG emissions as a percentage of the United States' annual emissions and Montana's annual emissions, but these domestic calculations only included the emissions generated by extracting and transporting the coal. Emissions from combustion of the coal—which account for 97 percent of the projected GHG emissions from the project—were not included in the domestic calculations. Based on the above comparisons, Interior found that the project's GHG emissions would have no significant impact on the environment. Interior did not prepare an environmental impact statement (EIS).

We conclude that Interior violated the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321 et seq. , by failing to provide a "convincing statement of reasons to explain why [the] project's impacts are insignificant." Bark v. United States Forest Serv. , 958 F.3d 865, 869 (9th Cir. 2020). The 2018 EA fails to articulate any science-based criteria for significance in support of its finding of no significant impact (FONSI), relying instead on the arbitrary and conclusory determination that the Mine Expansion project's emissions will be relatively "minor." But comparing the emissions from this point source against total global emissions predestined that the emissions would appear relatively minor, even though, for each year of its operation, the coal from this project is expected to generate more GHG emissions than the single largest source of GHG emissions in the United States. Separately, the EA's domestic comparisons fail to satisfy NEPA because Interior did not account for the emissions generated by coal combustion, obscuring and grossly understating the magnitude of the Mine Expansion's emissions relative to other domestic sources of GHGs. See League of Wilderness Defs./Blue Mountains Biodiversity Project v. Connaughton , 752 F.3d 755, 761 (9th Cir. 2014). Though we conclude that Interior failed to articulate convincing reasons to support its FONSI, we are not persuaded that Interior was required to use the Social Cost of Carbon metric to quantify the environmental harms stemming from the project's GHG emissions. What is less clear is whether the agency had any other metric available to assess the impact of this project.

The presumptive remedy for violations of NEPA and the Administrative Procedure Act is vacatur. 5 U.S.C. § 706 ("The reviewing court shall ... hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."); All. for the Wild Rockies v. U.S. Forest Serv. , 907 F.3d 1105, 1121–22 (9th Cir. 2018). Here, because additional factfinding is necessary to decide whether an EIS is required and, in any event, the record concerning the consequences of vacatur is not developed, we remand to the district court.

I

i

Intervenor-Appellee Signal Peak Energy, LLC operates Bull Mountains Mine No. 1 (the Mine), which is located approximately thirty miles north of Billings, Montana. In 2008, Signal Peak applied to the Bureau of Land Management (BLM) to lease approximately 2,679.76 acres of federal coal. See Mont. Env't. Info. Ctr. v. U.S. Off. of Surface Mining , 274 F. Supp. 3d 1074, 1083 (D. Mont. 2017). BLM processed Signal Peak's application, prepared an Environmental Assessment in conjunction with Interior, and issued a FONSI in 2011.²

In 2012, Signal Peak applied to the Montana Department of Environmental Quality (Montana DEQ) to amend its mining permit. Specifically, Signal Peak sought to expand its mining operation by 7,161 acres, "adding 176 million tons of coal to its permitted mineable reserves." Mont. Env't Info. Ctr. , 274 F. Supp. 3d at 1084. The Montana DEQ approved Signal Peak's application. Id.

In 2013, Signal Peak requested approval of a mining plan modification for its federal coal lease from OSMRE. Id. The 2013 modification request sought to expand coal development and mining operations into 2,539.76 acres of the remaining federal coal lands. Id. Signal Peak describes the area as "a ‘checkerboard’ of federal minerals interspersed with privately-owned and state-owned minerals." Interior prepared a second EA, issued a FONSI, and approved the mining plan modification in 2015.

Plaintiffs filed a complaint in the United States District Court for the District of Montana challenging Interior's 2015 EA, FONSI, and approval of the Mine Expansion on several different grounds. Mont. Env't Info. Ctr. , 274 F. Supp. 3d at 1084–85. Relevant here, plaintiffs argued Interior arbitrarily and capriciously quantified the socioeconomic benefits of the Mine Expansion while failing to use an available metric called the Social Cost of Carbon (SCC) to quantify the costs of GHG emissions. Id. at 1094–99. The district court agreed, reasoning that because the SCC was available and capable of quantifying the costs of GHG emissions, Interior improperly "place[d] [its] thumb on the scale by inflating the benefits of the [Mine Expansion] while minimizing its impacts." Id. at 1098. The district court partially granted plaintiffs' motion for summary judgment, vacated the 2015 EA, and enjoined mining of federal coal in the expanded Mine area pending Interior's compliance with NEPA.

On remand from the district court, Interior completed a third EA and FONSI and again approved Signal Peak's Mine Expansion in 2018. Interior's 2018 EA declined to employ the SCC to quantify the costs of the project's anticipated GHG emissions for four reasons: (1) the SCC was originally developed for use in rulemakings, not individual adjudications; (2) the technical supporting documents and associated guidance underlying the SCC had been withdrawn; (3) NEPA does not require agencies to perform cost-benefit analyses; and (4) the 2018 EA did not fully quantify the social benefits of "coal-fired energy production," and therefore using the SCC to quantify the costs of GHG emissions from the Mine Expansion "would yield information that is both potentially inaccurate and not useful."³

Plaintiffs returned to district court to challenge Interior's 2018 EA, FONSI, and approval of the Mine Expansion. Plaintiffs' first argument was that Interior violated NEPA again by declining to employ the SCC analysis. 350 Montana v. Bernhardt , 443 F. Supp. 3d 1185, 1197 (D. Mont. 2020). Plaintiffs also argued:

Signal Peak argues the Office acted reasonably when it quantified the greenhouse gas emissions from the mine expansion, calculated what percentage of total annual global emissions the mine's emissions represent (0.04%), and determined that the mine expansion's contribution would be minor. (Doc. 42 at 16.) The comparison of the mine expansion's emissions to global emissions is not reasonable; it is misleading; and it is unlawful. See supra note 10. It is easy, but misleading, to make highly significant

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