Court: District Court, N.D. Oklahoma; June 1, 2016; Federal District Court
The court addresses a Motion to Dismiss for Lack of Subject Matter Jurisdiction filed by the government entities involved in the permitting process for oil and gas operations in Osage County, Oklahoma. The Osage Producers' Association (OPA) initiated this action under the Administrative Procedure Act, challenging the government's handling of drilling and workover permits. The OPA claims unreasonable delays in permit issuance, the issuance of permits with additional, unnecessary requirements, and the unlawful rejection of permit applications due to purported failures to provide environmental information.
The court notes that the government’s motion constitutes a facial attack on the OPA’s Amended Complaint, which means it will assume the truth of the allegations to determine if they sufficiently establish subject matter jurisdiction. The government presents three arguments for dismissal: (1) the Amended Complaint constitutes an impermissible programmatic challenge; (2) the OPA lacks standing to bring the case; and (3) the OPA and its members have not exhausted necessary administrative remedies. The court will evaluate these arguments sequentially.
The government contends that the OPA’s Amended Complaint inadequately specifies the agency actions it seeks to challenge, arguing that it fails to meet the requirements outlined in the Administrative Procedure Act (APA). Under Section 702 of the APA, a plaintiff must identify a final agency action and demonstrate that they have experienced a legal wrong or been adversely affected by that action. The term "agency action" encompasses specific agency rules, orders, licenses, or similar actions, and the APA prohibits broad programmatic challenges against an agency's administration of a program.
The Supreme Court case Lujan v. National Wildlife Federation established that challenges must be made on a case-by-case basis rather than as a broad attack on an agency program. The government asserts that the OPA's claims are impermissibly programmatic and therefore outside the limited waiver of sovereign immunity provided by Section 702. In contrast, the OPA argues that it is targeting specific agency actions rather than a program, asserting that the APA does not require it to detail every individual permitting decision it contests.
The court sides with the government, noting that the OPA's Amended Complaint fails to identify specific agency actions and instead generically describes certain agency practices, such as delays in issuing drilling permits. This vague characterization mirrors the challenge in Lujan, where the court could not pinpoint the specific agency actions at issue. Consequently, the court finds the OPA's challenge indistinct, making it difficult to identify the agency actions subject to the suit.
The OPA's lawsuit is dismissed because it does not challenge a specific agency action, thus falling outside the limited waiver of sovereign immunity provided by 5 U.S.C. § 702. Additionally, the government argues that the OPA lacks associational standing, which requires that (1) at least one member has standing to sue, (2) the interests being protected relate to the organization's purpose, and (3) individual member participation is not necessary in the lawsuit. The OPA failed to identify any specific member harmed by the agency actions, which is essential for establishing standing. The court agrees with the government, emphasizing that standing cannot be broadly assumed and must be demonstrated for each agency action challenged. Furthermore, the OPA's claims to compel agency action are dismissed for not exhausting required administrative remedies, as the agency actions must be "final" and all administrative avenues must be pursued before seeking judicial review.
Courts cannot impose additional exhaustion requirements when agency action has reached a 'final' status, as established in Darby v. Cisneros. Under the Administrative Procedure Act (APA), an appeal to a superior agency authority is only mandatory when specified by statute or agency rule. If exhaustion is required solely by agency rule, the agency action must remain 'inoperative' pending that review to avoid being considered final. Inactions by an agency, such as not acting on permit or license applications, qualify as 'inoperative' under 5 U.S.C. § 704. The Bureau of Indian Affairs (BIA) regulations stipulate that all decisions made by the Superintendent can be appealed, and exhaustion of these procedures is necessary for APA review. Specifically, decisions subject to appeal are not final unless an immediate decision is warranted for public safety or exigency. The BIA’s regulations also allow appeals regarding official inaction. The government argues for the necessity of administrative exhaustion, asserting that the Office of Public Advocacy (OPA) failed to exhaust its claims. The OPA acknowledges the need for exhaustion but seeks to have the court excuse this requirement on futility grounds. The court agrees that exhaustion is necessary, noting that the agency actions are currently inoperative. It has ordered the parties to submit supplemental briefs on whether futility can excuse the required intra-agency review process, referencing Supreme Court cases that indicate such exceptions do not apply to statutory exhaustion requirements. The parties hold differing opinions on the applicability of these precedents.
The government argues that 5 U.S.C. 704, in conjunction with 25 C.F.R. 2.6(a), 2.8, and 226.69, mandates administrative exhaustion and that the court cannot waive this requirement on futility grounds. The OPA counters that 704 of the APA does not explicitly require exhaustion and that the cases cited by the government are not applicable. The court supports the government's position, stating that whether exceptions like futility apply depends on the source of the exhaustion requirement—whether statutory or judicial. When Congress explicitly mandates exhaustion, it must be followed, and courts cannot dismiss it based on futility alone. The APA limits judicial review to final agency actions, which are not considered final until all administrative remedies prescribed by statute or agency rule have been exhausted. Consequently, 704 requires exhaustion when agency regulations dictate it, establishing a statutory requirement that cannot be overridden by the courts. The court emphasizes that if Congress has imposed a clear exhaustion requirement, it cannot be waived by judicial discretion. The OPA's belief that the exhaustion requirement is less mandatory due to its basis in both statutory and regulatory provisions is rejected, drawing parallels to the Supreme Court's handling of a similar situation in Salfi regarding the Social Security Act.
Section 405 of the Social Security Act restricts judicial review to the 'final decision' of the Secretary, allowing the Secretary to issue regulations that define what constitutes finality. These regulations require the exhaustion of specific intra-agency review procedures before a decision is deemed final. The Supreme Court determined that these exhaustion requirements are mandatory and cannot be waived based on judicial findings of futility. In the present case, the court emphasizes that the combination of 5 U.S.C. 704 and relevant C.F.R. sections mandates exhaustion of claims to compel agency action, and the court lacks authority to bypass these procedures due to futility. Consequently, because the Office of Public Affairs (OPA) has not exhausted the relevant agency actions, these actions are not considered 'final' and are therefore not subject to judicial review under the Administrative Procedure Act (APA). This constitutes a basis for granting the government’s motion to dismiss.
The court grants the government’s Motion to Dismiss for Lack of Subject-Matter Jurisdiction, allowing the OPA to file a second amended complaint by June 10, 2016, to address the identified deficiencies. If no amended complaint is filed, the case will be dismissed without prejudice. The OPA's claim regarding unreasonable delays in issuing drilling permits lacks specificity, requiring the court to consider every pending application, which is not justiciable under the APA. Challenges must be directed at specific agency actions rather than broad policies or practices; therefore, the OPA’s general challenges do not meet the justiciability standard outlined in case law.
Plaintiffs cannot challenge an entire program by merely citing specific allegedly improper final agency actions within that program, as established in *Sierra Club v. Peterson*. The case illustrates that using specific actions as evidence to argue against the Bureau of Indian Affairs (BIA) leasing program's compliance with the National Environmental Policy Act (NEPA) is insufficient. The issue may not strictly pertain to Rule 12(b)(1), as noted by *Kwai Fun Wong*, which clarifies that time limits on government actions are not necessarily jurisdictional, and that the judicial review provisions of the Administrative Procedure Act (APA) are also not jurisdictional.
Regardless of whether assessed under Rule 12(b)(1) or Rule 12(b)(6), the court would arrive at the same conclusion. The Oil Producers Association's (OPA) Amended Complaint identifies two companies affected by government decisions, but lacks evidence that these companies are OPA members. The court emphasizes that deficiencies in the complaint cannot be remedied by claims made in a response brief, following precedents that assert additional facts in opposition memoranda are not considered pleadings. The government's position that member participation is necessary for the OPA’s claims is not addressed due to the lack of clarity regarding specific actions to be challenged.
According to 5 U.S.C. § 704, agency actions are subject to judicial review if they are final and no other adequate remedy exists, and such actions remain final regardless of pending applications for reconsideration or appeals unless explicitly stated otherwise by the agency. An initial decision is deemed inoperative if it does not affect the status quo, even if a claim is denied or a license is not granted, as supported by administrative law principles.
Agency actions cannot be enforced while an applicant's appeals are pending, but this does not imply that agencies must take affirmative steps to assist applicants, such as issuing licenses or granting benefits, if an appeal is required prior to judicial review. The government does not argue that exhaustion is necessary for claims under the OPA related to new permit requirements. Exhaustion of administrative remedies is mandated only when Congress explicitly requires it, as established in prior cases. While the Supreme Court has recognized a narrow exception to the exhaustion requirement for constitutional claims that are collateral to agency issues, the OPA's claims do not meet this criterion. The claims relate to a qualification that denies benefits based on a relationship duration, and the OPA's references to cases that suggest futility in the intra-agency review process do not apply here, as those cases did not involve statutory exhaustion under the APA. In the Tenth Circuit, jurisdiction to review agency actions is limited to "final agency actions" under the APA, and since neither the OPA nor its members have exhausted the required agency actions, the court's outcome remains unchanged regardless of the interpretation of the exhaustion requirement.
