350 Mont. v. Haaland

50 F.4th 1254

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

v.Deb 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 October 14, 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 and 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) and Bryson C. Smith, Holland & Holland LLP, Washington, D.C.; Hadassah M. Reimer, Holland & Hart LLP, Jackson, Wyoming; Sarah C. Bordelon, Holland & Hart LLP, Reno, Nevada; Victoria A. Marquis, Crowley Fleck PLLP, Billings, Montana; Derek Shaffer, Quinn Emanuel Urquhart & Sullivan LLP, Washington, D.C.; Sage V. Heuvel and Kathleen M. Sullivan, Quinn Emanuel Urquhart & Sullivan LLP, Los Angeles, California; for Intervenor-Defendant-Appellee.

Mark N. Templeton and Robert A. Weinstock ; Andrew Burchett, Justin Taleisnik, and Daniel Abrams, Certified 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.

Brent Mead, Assistant Solicitor General; David M. S. Dewhirst, Solicitor General; Austin Knudsen, Attorney General of Montana; Office of the Attorney General, Helena, Montana; for Amici Curiae State of Montana and 15 Other States.

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

Order;

Opinion by Judge Christen ;

Dissent by Judge R. Nelson

ORDER

The opinion filed on April 4, 2022, is amended as follows: On slip opinion page 8, lines 19–20, delete < additional factfinding is necessary to decide whether an EIS is required and, in any event,>.

On page 36, line 22, replace the final period of the paragraph with < ; see also Ctr. for Biological Diversity, 538 F.3d at 1225 (If the evidence in the record demonstrates that a project may have a significant impact, it is appropriate to remand with instructions to prepare an EIS). On remand, the district court may reconsider, based on the existing record, whether to order an EIS, or remand to the agency to determine whether to prepare a new EA or an EIS.>

On page 36, line 23, replace the word < Plaintiffs> with < With regard to Interior's approval of the Mine Expansion, plaintiffs>.

On page 37, lines 16–17, replace < . Further,> with < , and>.

On page 37, lines 22–23, delete < preparation of an EIS and>.

On page 37, line 27, delete footnote 28.

The following changes are made to the dissent:

On page 49, line 17, insert < impacts> between < change> and < under NEPA>.

On page 57, line 6, capitalize < climate>.

On page 60, line 11, replace < 2020> with < 2021>.

With these amendments, Judges Rawlinson and Christen vote to deny the petitions for panel rehearing and rehearing en banc filed on June 21, 2022, and Judge Nelson votes to grant the petitions. The Petitions for Rehearing and Rehearing En Banc are DENIED. No further petitions for rehearing will be accepted.

AMENDED OPINION

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 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...