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State v. Bureau of Land Management

United States District Court, N.D. California

February 22, 2018

STATE OF CALIFORNIA, et al., Plaintiffs,
BUREAU OF LAND MANAGEMENT, et al., Defendants. SIERRA CLUB, et al., Plaintiffs,
RYAN ZINKE, in his official capacity as Secretary of the Interior, et al., Defendants.


          William H. Orrick, United States District Judge


         This case addresses the burden a federal agency bears when it seeks to suspend a federal regulation for further analysis. Plaintiffs, the States of California and New Mexico, bring this action for a preliminary injunction enjoining the United States Bureau of Land Management (“BLM”), Katherine S. Macgregor, Acting Assistant Secretary for Land and Minerals Management, and Ryan Zinke, Secretary of the Interior, from instituting a rule suspending or delaying the requirements of the Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule. A coalition of 17 conservation and tribal citizen groups separately brought suit for a preliminary injunction against Zinke, the BLM, and the United States Department of the Interior seeking the same preliminary injunction. These two cases have been consolidated for review.

         The States of North Dakota and Texas, along with three industry groups, the Western Energy Alliance (“WEA”), Independent Petroleum Association of America (“IPAA”), and American Petroleum Institute (“API”), have moved to intervene in these consolidated actions in opposition to the preliminary injunction. The BLM and the States of North Dakota and Texas have also moved to transfer venue of this case to the District of Wyoming, where a case challenging the underlying rule is pending.[1]

         First, I deny the motion to change venue. As discussed below, the legal issues concerning the Waste Prevention Rule in the District of Wyoming go to the substance of that regulation; this lawsuit addresses the BLM's alleged procedural failure to justify a different rule, the Suspension Rule. The legal issues are distinct. In light of plaintiffs' choice of forum, venue is appropriate here.

         Second, I grant Plaintiffs' motion for a preliminary injunction. The BLM's reasoning behind the Suspension Rule is untethered to evidence contradicting the reasons for implementing the Waste Prevention Rule, and so plaintiffs are likely to prevail on the merits. They have shown irreparable injury caused by the waste of publicly owned natural gas, increased air pollution and associated health impacts, and exacerbated climate impacts. Plaintiffs are entitled to a preliminary injunction on this record.


         On November 18, 2016, after three years of development, the BLM published the final version of its regulations intended “to reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore Federal and Indian (other than Osage Tribe) leases.” See “Waste Prevention, Production Subject to Royalties, and Resource Conservation: Final Rule, ” 81 Fed. Reg. 83, 008 (Nov. 18, 2016) (“Waste Prevention Rule”). The Waste Prevention Rule became effective on January 17, 2017, with many of its requirements to be phased in over time up until January 17, 2018.

         In November of 2016, two industry groups, the Western Energy Alliance and the Independent Petroleum Association of America, as well as the states of Wyoming and Montana, separately filed lawsuits challenging the Waste Prevention Rule and seeking a preliminary injunction in the U.S. District Court for the District of Wyoming. See W. Energy All. v. Zinke, No. 16-cv-0280 (D. Wyo. filed Nov. 15, 2016); Wyoming v. U.S. Dep't of Interior, No. 16-cv-0285 (D. Wyo. filed Nov. 18, 2016). The two cases were consolidated, and the states of California and New Mexico, as well as a coalition of environmental groups, including all but one of the plaintiffs in this action, intervened in the lawsuits on the side of the government. The States of North Dakota and Texas intervened on the side of the petitioners. On January 16, 2017, the court denied the motions for preliminary injunction. See Wyoming v. U.S. Dep't of Interior, Nos. 16-cv-0285, 16-cv-0280, 2017 WL 161428 (D. Wyo. Jan. 16, 2017).

         On March 28, 2017, President Trump issued an Executive Order requiring the Secretary of the Interior to review the Waste Prevention Rule. Exec. Order No. 13, 783, 82 Fed. Reg. 16, 093, § 7(b) (Mar. 28, 2017). BLM reviewed the rule and drafted a proposed Revision Rule rescinding certain provisions of the Waste Prevention Rule and substantially revising others. BLM published the proposed rule in the Federal Register today, after conclusion of its review by the Office of Information and Regulatory Affairs. See “Waste Prevention, Production Subject to Royalties, and Resource Conservation: Rescission or Revision of Certain Requirements, ” 83 Fed. Reg. 7924 (proposed Feb. 22, 2018).

         In the interim, BLM developed a rule to delay for one year the effective date of the provisions of the Waste Prevention Rule that had not yet become operative and suspend for one year the effectiveness of certain provisions already in effect (“Suspension Rule”).[2] 82 Fed. Reg. 58, 050, 58, 051 (Dec. 8, 2017). BLM published the proposed Suspension Rule on October 5, 2017, and on December 8, 2017, published the final Suspension Rule. See 82 Fed. Reg. 46, 458, 58, 050. It took effect on January 8, 2018. The rule temporarily suspended or delayed certain requirements at the heart of the pending Wyoming litigation.

         Plaintiffs in this action filed suit challenging the Suspension Rule on December 18, 2017, and moving for a preliminary injunction. California v. BLM, No. 17-cv-07186 (N.D. Cal. filed Dec. 19, 2017); Sierra Club v. Zinke, No. 17-cv-07187 (N.D. Cal. filed Dec. 19, 2017). On December 29, 2017, the court in the Wyoming cases stayed those cases in light of the Suspension Rule and BLM's continued efforts to revise the Waste Prevention Rule, as well as the present lawsuits, which raise procedural challenges to the Suspension Rule and seek to reinstate the Waste Prevention Rule. Wyoming, Nos. 16-cv-0280, 16-cv-0285 (D. Wyo. Dec. 29, 2017) [Dkt. Nos. 184, 189]. In that decision, the court explained that “it is fair to say those actions are inextricably intertwined with the cases before this Court and with the ultimate rules to be enforced.” Id. at 4.


         I. Transfer of Venue

         A court may transfer an action to another district “where it might have been brought” “[f]or the convenience of the parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). A motion for transfer lies within the broad discretion of the district court and must be determined on an individualized basis. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). Section 1404(a) requires the court to make a threshold determination of whether the case could have been brought where the transfer is sought. If venue is appropriate in the alternative venue, the court must weigh the convenience of the parties, the convenience of the witnesses, and the interest of justice. See 28 U.S.C. § 1404(a). In making its determination, the court may consider several factors, including: “(1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof.” Jones, 211 F.3d at 498-99.

         “The burden is on the party seeking transfer to show that when these factors are applied, the balance of convenience clearly favors transfer.” Lax v. Toyota Motor Corp., 65 F.Supp.3d 772, 776 (N.D. Cal. 2014) (citing Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979)). “The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).

         II. Preliminary Injunction

         In order to obtain a preliminary injunction, a plaintiff must demonstrate four factors: (1) “that he is likely to succeed on the merits, ” (2) “that he is likely to suffer irreparable harm in the absence of preliminary relief, ” (3) “that the balance of equities tips in his favor, ” and (4) “that an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). While this is a four-part conjunctive test, the Ninth Circuit has held that a plaintiff may also obtain an injunction if it has demonstrated “serious questions going to the merits, ” that the balance of hardship “tips sharply” in its favor, that it is likely to suffer irreparable harm, and that an injunction is in the public interest. See All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131- 35 (9th Cir. 2011). Injunctive relief is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter, 555 U.S. at 22.


         I. Motion to Transfer Venue

         The parties do not dispute that the District of Wyoming is a proper venue where this action could have been brought. Instead, they dispute how the convenience and interest of justice factors should be weighed. For the following reasons, I conclude that Defendants have not met their burden to show that the balance of all of the relevant factors clearly favors transfer such that I should upset Plaintiffs' choice of forum in this district.

         A. Convenience of the Parties and Witnesses

         Defendants' primary argument in support of the “convenience” factors is that litigating this case in the District of Wyoming would be more convenient because it would allow both the preceding Wyoming cases and this action to be litigated “in a coordinated fashion.” See Elecs. for Imaging, Inc. v. Tesseron, Ltd., No. 07-cv-05534 CRB, 2008 WL 276567, at *2 (N.D. Cal. Jan. 29, 2008). They point to Electronics for Imaging, in which a lawsuit was filed in the District of Ohio raising a patent infringement claim based on two patents. One of the defendants in that action filed a second suit in the Northern District of California for declaratory relief, seeking to determine its rights to those two (among other) patents. The Hon. Charles R. Breyer transferred the second suit to the District of Ohio, reasoning that “the pertinent question is not simply whether this action would be more conveniently litigated in Ohio than California, but whether it would be more convenient to litigate the California and Ohio actions separately or in a coordinated fashion.” Id.

         Those two cases each raised the issue of the parties' rights under the same two patents. This matter shares no identical issues with the Wyoming cases. It is true that the cases pertain to related rules, but the legal issues are distinct. Wyoming concerns a challenge to the Waste Prevention Rule in which the petitioners argue that BLM exceeded its authority by impermissibly encroaching on both the EPA's authority to regulate air pollution and states' regulatory authority over certain state lands, as well as that the Waste Prevention Rule is arbitrary and capricious because its cost-benefit analysis takes into consideration air pollution benefits rather focusing on waste prevention. The matter here deals with the procedural propriety of the Suspension Rule under the APA, and whether the Suspension Rule is arbitrary and capricious because, among other reasons, it does not provide the requisite detailed justification for relying on inconsistent and contradictory facts to its prior findings. This matter does not deal with any issues regarding BLM's authority to regulate air pollution, as is the focus of the Wyoming litigation. As the cases share no identical legal issues, there is no substantial convenience in litigating them “in a coordinated fashion” as there was in Electronics for Imaging. While the disposition of this matter may affect the proceedings in the Wyoming cases, the court's issuance of the stay in that litigation ensures that the Wyoming court is not wasting judicial resources or coming to a premature decision pending the outcome of this litigation.

         Defendants' remaining contentions in support of the convenience factors amount to arguments that Plaintiffs cannot show that the Northern District of California is a more convenient forum. That is not Plaintiffs' burden. Defendants must show that the convenience of the parties and the witnesses favors the District of Wyoming. Defendants assert that Plaintiffs' California connections are limited and tempered by their voluntary participation in the Wyoming litigation, that the Northern District of California is less convenient for Defendants than the District of Wyoming, and that Wyoming has just as much interest in and ties to these cases as California. Defendants' first and third points are true but not relevant to the question of convenience. That most of the plaintiffs in this matter are litigating a case in the District of Wyoming does not somehow mean that litigating a second case there is not an additional burden or inconvenience to them. Defendants' arguments boil down to the District of Wyoming being more convenient for themselves only, due to the cost of litigating a second set of cases in this district. The transfer of venue, however, “would merely shift rather than eliminate the inconvenience” from Defendants to Plaintiffs. Decker Coal, 805 F.2d at 843. This is insufficient to show that the convenience of the parties and witnesses weighs in favor of transferring the case to the District of Wyoming.

         B. Interest of Justice

         Defendants argue that the interest of justice heavily favors transfer of these cases because of the strong interest in having a single court review issues arising out of the same rulemaking, emphasizing the District of Wyoming's familiarity with the Waste Prevention Rule. They urge the court to focus its attention on this analysis because “[t]he question of which forum will better serve the interest of justice is of predominant importance on the question of transfer, and factors involving convenience of parties and witnesses are in fact subordinate.” Wireless Consumers All., Inc. v. T-Mobile USA, Inc., No. 03-cv-3711-MHP, 2003 WL 22387598, at *4 (N.D. Cal. Oct. 14, 2003). In opposition, Plaintiffs argue that Defendants mischaracterize the relationship between the two actions, and that none of the legal issues before the Wyoming court are before this one.

         As discussed above, this case and the Wyoming litigation involve separate legal issues. That the subject matter at the heart of both of these actions is the same is hardly grounds for transfer. Indeed, many cases may arise from a single rule or statute. But Section 1404(a) “was designed to prevent” “a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts.” Elecs. for Imaging, 2008 WL 276567, at *1 (emphasis added). It is not enough that these cases deal with and require me to become familiar with the substance of the Waste Prevention Rule; instead, Defendants must show that the two cases present the same legal questions so that litigating them separately would be a waste of judicial resources. This Defendants cannot do.

         Defendants make much of the Wyoming court's statement that these two cases are “inextricably intertwined.” Wyoming, Nos. 16-cv-0280, 16-cv-0285 (D. Wyo. Dec. 29, 2017) [Dkt. Nos. 184, 189] at 4. For purposes of the Wyoming court's decision to issue the stay, I agree that the resolution of this litigation is “inextricably intertwined . . . with the ultimate rules to be enforced” because the resolution here determines the timing of the effectiveness of the Waste Prevention Rule's provisions, and therefore which provisions the Wyoming court will review and the ripeness of those cases. While the cases can be said to be inextricably intertwined due to the implications on timing and effectiveness of the Waste Prevention Rule's provisions, they are otherwise substantively distinct, and the challenges to each raise unique legal questions and require the evaluation of two separate rules promulgated for different reasons.

         Given the distinctions between the two cases, Defendants' arguments regarding the threat of “inconsistent judgments” are unfounded because this litigation does not require an evaluation of the Waste Prevention Rule. Defendants argue that disposition in this case will necessarily require me to review the underlying Waste Prevention Rule and evaluate its substantive provisions, as it serves as the benchmark by which the Suspension Rule will be judged. While it is true that I must review the Waste Prevention Rule insofar as I am required to determine whether, for example, the Suspension Rule rests on factual findings that contradict those underlying the Waste Prevention Rule, that is the extent to which I am required to review the Waste Prevention Rule. I need not evaluate the merits of its substance or the persuasiveness or propriety of its justifications. Indeed, I express no judgment whatsoever in this opinion on the merits of the Waste Prevention Rule. Instead, I need only look to see whether any contradictions exist between the two rules, and if so, whether the Suspension Rule provides the necessary detailed justification for such a contradiction.

         For that reason, this case is distinguishable from v. Zinke, Nos. 17-CV-03739-YGR, 17-CV-3742-YGR, 2017 WL 3727467 (N.D. Cal. Aug. 30, 2017). In that case, an initial suit was filed in the Eastern District of California in 2005 challenging the United States Fish and Wildlife Service's (“FWS”) biological opinions supporting two water projects, which plaintiffs alleged would harm the delta smelt. Id. at *2. A separate case was filed in 2017 in the Northern District of California challenging the biological opinion underpinning a new FWS water project, which plaintiffs alleged “[wa]s the latest in a long line of water diversion projects and policies, including the [earlier two projects], which have had devastating effects” on the delta smelt. Id. at *3. Those cases required the court to make substantive determinations regarding the biological opinions for three related water projects in the same region, all challenged on similar grounds, and plaintiffs in both cases sought “an order instructing the FWS to reinstate consultation with the relevant organizations to develop different plans.” Id. at *5. Thus, there was both “overlap in the issues” and a serious possibility for “inconsistent ...

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