Taylor Energy Co. v. United States

TAYLOR ENERGY COMPANY LLC, Plaintiff, v. UNITED STATES OF AMERICA, acting by and through theUNITED STATES COAST GUARD NATIONAL POLLUTION FUNDS CENTER, Defendant.

Civil Action No. 20-1086 (JDB)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

February 15, 2021

MEMORANDUM OPINION

Taylor Energy Company LLC ("Taylor Energy") brought this lawsuit under the Administrative Procedure Act ("APA") seeking judicial review of the National Pollution Funds Center's ("NPFC") denial of a reimbursement claim for oil removal costs. Now before the Court is Taylor Energy's combined motion to supplement the administrative record and conduct limited discovery on the NPFC's retention and tasking of independent scientific experts. The government has agreed to complete the administrative record with a few documents that it inadvertently excluded, but otherwise opposes Taylor Energy's motion. See Def.'s Opp'n to Pl.'s Mot. to Complete Admin. R. or, in Alternative, to Introduce Extra-R. Evid. ("Gov't's Opp'n") [ECF No. 61] at 1-2, 5. For the following reasons, the Court will order the NPFC to complete the administrative record with three specific documents but will deny the remainder of Taylor Energy's requests.

BACKGROUND

As of 2004, Taylor Energy owned and operated an offshore oil and gas production platform on a leased tract in the Gulf of Mexico. See Compl. to Vacate & Set Aside Final Agency Action & for Other Relief ("Compl.") [ECF No. 1] ¶ 6. Hurricane Ivan passed through the Gulf in September 2004 and, along its way, caused significant damage to Taylor Energy's oil platform, ultimately leading to the platform's collapse into the Gulf and the discharge of oil into the water and surrounding seafloor sediments. Id. The Coast Guard thereafter designated Taylor Energy the "Responsible Party" for the oil spill under the Oil Pollution Act of 1990 ("OPA"), meaning that Taylor would be strictly liable for clean-up costs and damages resulting from that spill, unless a specific statutory defense to liability applied. See 33 U.S.C. § 2702; Compl. ¶¶ 7, 67.

In November 2018, Taylor Energy presented a reimbursement claim to the NPFC, invoking the "act of God" defense to liability under the OPA. Compl. ¶¶ 7-9, 85. Taylor Energy submitted evidence that the waves generated by Hurricane Ivan qualified as an "act of God" and caused the platform's collapse. See id. ¶¶ 85-87. The NPFC, however, denied Taylor Energy's claim and subsequent request for reconsideration, concluding that the MC20 platform's destruction "was not solely caused by an act of God." Id. ¶¶ 88-89, 105, 111. In rendering its decision, the NPFC relied on several technical reports prepared by outside subject matter experts ("SMEs"), who the NPFC had retained to address various scientific questions. See id. ¶¶ 95, 112.

Taylor Energy filed this lawsuit in April 2020, challenging the NPFC's denial as arbitrary and capricious under the APA. See id. ¶¶ 3, 5-18. One of the primary allegations in Taylor Energy's complaint is that the NPFC "improperly and consciously manipulated the evaluation process," through its control of "task assignments and reliance on consultants that were unqualified and/or ill-informed" in light of the NPFC's failure to "provide said experts with relevant information." Reply Mem. in Further Supp. of Pl.'s Objections to Admin. R., Mot. to Suppl. Admin. R. & Mot. for Discovery ("Pl.'s Reply") [ECF No. 62] at 1. Taylor Energy thereafter moved to strike six expert reports from the administrative record on the ground that the NPFCcould not rely on "new" evidence at the reconsideration stage without giving Taylor Energy an opportunity to rebut that evidence. See Pl.'s Mem. of P. & A. in Supp. of Mot. to Strike Select Tech. Reps. from Admin R. [ECF No. 25-1] at 5-7. The Court denied that motion, concluding that the six reports were properly part of the administrative record because the NPFC considered them in adjudicating Taylor Energy's claim. See Mem. Op. (Oct. 14, 2020) [ECF No. 52] at 10-13. The Court also determined that federal regulations authorized the NPFC to obtain new evidence at the reconsideration stage and did not grant Taylor Energy a right to respond to that evidence. See id. at 12.

In August 2020, the NPFC filed the administrative record in this case—comprising 727 documents and over 21,000 pages—and "certified [that] record as a complete accounting of all documents the NPFC relied upon for its decision." Gov't's Opp'n at 4-5; see Cert. of Admin. R. [ECF No. 41-1]. The NPFC subsequently acknowledged that it had "inadvertently omitted" a few specific documents from the administrative record and agreed to supplement the record accordingly. See Pl.'s Mem. of P. & A. in Supp. of Objections to Admin. R., Mot. to Suppl. Admin. R. & Mot. for Discovery ("Pl.'s Br.") [ECF No. 58-2] at 12; Gov't's Opp'n at 5. But the NPFC declined Taylor Energy's requests to add various other materials. See Pl.'s Br. at 12; Gov't's Opp'n at 6. Taylor Energy then filed the instant motion to supplement the record with a book on the history of natural disasters and four categories of documents: (1) all task orders issued by the NPFC to its SMEs relating to Taylor Energy's claim and reconsideration request; (2) all documentation and correspondence regarding those task orders; (3) all documents exchanged and correspondence between the NPFC and its SMEs; and (4) all draft technical reports provided to the NPFC. See Pl.'s Br. at 19, 22, 23, 26. At the same time, Taylor Energy also sought leave "to conduct limited discovery regarding the irregular and particularly curious circumstances relatingto the various tasks and SMEs." Id. at 32. The motion has been fully briefed and is now ripe for the Court's consideration.

LEGAL STANDARD

Typically, a court's review of agency action under the APA is limited to the full administrative record that was before the agency at the time of its decision. Cmty. for Creative Non-Violence v. Lujan, 908 F.2d 992, 998 (D.C. Cir. 1990); see also SEC v. Chenery Corp., 318 U.S. 80, 87-88 (1943). "The full administrative record consists of 'all documents and materials that the agency directly or indirectly considered' in making its decision." Oceana, Inc. v. Ross, 454 F. Supp. 3d 62, 68 (D.D.C. 2020) (quoting Maritel, Inc. v. Collins, 422 F. Supp. 2d 188, 196 (D.D.C. 2006)). "[A]n agency is entitled to a strong presumption of regularity, that it properly designated the administrative record." Pac. Shores Subdivision, Cal. Water Dist. v. U.S. Army Corps of Eng'rs, 448 F. Supp. 2d 1, 5 (D.D.C. 2006) (citing Maritel, 422 F. Supp. 2d at 197).

That said, an "agency may not skew the record by excluding unfavorable information," Blue Ocean Inst. v. Gutierrez, 503 F. Supp. 2d 366, 369 (D.D.C. 2007) (citing Fund for Animals v. Williams, 391 F. Supp. 2d 191, 197 (D.D.C. 2005)), and it may not omit information simply because "it did not 'rely' on the excluded information in its final decision," Maritel, 422 F. Supp. 2d at 196 (citing Ad Hoc Metals Coal. v. Whitman, 227 F. Supp. 2d 134, 139 (D.D.C. 2002)). Instead, "a complete administrative record should include all materials that 'might have influenced the agency's decision.'" Amfac Resorts, L.L.C. v. U.S. Dep't of Interior, 143 F. Supp. 2d 7, 12 (D.D.C. 2001) (quoting Bethlehem Steel v. EPA, 638 F.2d 994, 1000 (7th Cir. 1980)). And "if the agency decisionmaker based his decision on the work and recommendations of subordinates, those materials should be included as well." Id. (citing Bar MK Ranches v. Yuetter, 994 F.2d 735, 739 (10th Cir. 1993)). However, documents that are predecisional and deliberative may be excludedfrom the record pursuant to the deliberative process privilege. Am. Petroleum Tankers Parent, LLC v. United States, 952 F. Supp. 2d 252, 265-66 (D.D.C. 2016).

A plaintiff in an APA case may move to supplement the administrative record in two different ways. First, the plaintiff may seek to "complete" the record with "evidence that was allegedly before the agency but nevertheless excluded from the administrative record." Oceana, Inc. v. Ross, 290 F. Supp. 3d 73, 78 (D.D.C. 2018) (citation omitted). However, to overcome the strong presumption of regularity, a plaintiff "must present 'non-speculative, concrete evidence . . . that the specific documents allegedly missing from the administrative record were directly or indirectly considered by the actual decision makers." Oceana, Inc. v. Pritzker, 217 F. Supp. 3d 310, 316 (D.D.C. 2016) (quoting Dist. Hosp. Partners, L.P. v. Sebelius, 971 F. Supp. 2d 15, 20 (D.D.C. 2013)). This means that the plaintiff must describe the omitted materials "with sufficient specificity, as opposed to merely proffering broad categories of documents and data that are 'likely' to exist as a result of other documents that are included in the administrative record." Id. at 316-17 (quoting Dist. Hosp., 971 F. Supp. 2d at 20-21).

Second, the plaintiff may seek to introduce "extra-record evidence"—meaning "'evidence that was not initially before the agency' but that the plaintiff 'believes should nonetheless be included in the administrative record." Oceana, 290 F. Supp. 3d at 77 (quoting Univ. of Colo. Health at Mem'l Hosp. v. Burwell, 151 F. Supp. 3d 1, 13 (D.D.C. 2015)). To do so, the plaintiff must "demonstrate unusual circumstances justifying a departure from the general rule." Id. (quoting City of Dania Beach v. FAA, 628 F.3d 581, 590 (D.C. Cir. 2010)). Only three circumstances qualify: "(1) if the agency 'deliberately or negligently excluded documents that may have been adverse to its decision,' (2) if background information [is] needed 'to determine whether the agency considered all the relevant factors,' or (3) if the 'agency failed to explain administrativeaction so as to frustrate judicial review.'" City of Dania Beach, 628 F.3d at 590 (quoting Am. Wildlands v. Kempthorne, 530 F.3d 991, 1002 (D.C. Cir. 2008)). The first circumstance requires "evidence of bad faith on the...