Pit River Tribe Native Coalition for Medicine Lake Highlands Defense Mount Shasta Bioregional Ecology Center v. United States Forest Service Advisory Council on Historic Preservation United States Bureau of Land Management Calpine Corporation
Docket: 04-15746
Court: Court of Appeals for the Ninth Circuit; November 5, 2006; Federal Appellate Court
The Pit River Tribe, along with the Native Coalition for Medicine Lake Highlands Defense and the Mount Shasta Bioregional Ecology Center, appeals a district court's summary judgment favoring the Bureau of Land Management, United States Forest Service, and Department of the Interior regarding the approval of geothermal lease extensions and a proposed geothermal plant by Calpine Corporation in the Medicine Lake Highlands. The plaintiffs claim that the agencies violated several statutes, including the National Environmental Policy Act (NEPA), the National Historic Preservation Act (NHPA), and the Administrative Procedure Act (APA), as well as their fiduciary responsibilities to Native American tribes. The appeals court has jurisdiction under 28 U.S.C. § 1291 and finds that the agencies failed to adequately assess the environmental impacts of the 1998 lease extensions and did not sufficiently consider a no-action alternative. As a result, the court reverses the district court's ruling. The Medicine Lake Highlands hold significant spiritual importance for the Pit River Tribe and other regional Native American tribes, despite not being part of the tribe's reservation. The Geothermal Steam Act of 1970 allows federal leases for geothermal development, and the Medicine Lake Highlands were designated as a Known Geothermal Resource Area. A 1973 programmatic environmental impact statement (EIS) provided for a tiered environmental review but did not evaluate specific environmental consequences at individual locations, thus necessitating further detailed analysis before any leasing action.
The 1973 Environmental Impact Statement (EIS) acknowledged the need for subsequent EISs under the National Environmental Policy Act (NEPA) due to potential significant environmental impacts from issuing geothermal leases. It stated that further environmental evaluations would be required before constructing power plants or related facilities if significant adverse impacts were identified. In April 1981, the Bureau of Land Management and the Forest Service issued an Environmental Assessment (EA) for casual use exploration on approximately 266,800 acres of National Forest land, focusing on geothermal leasing while lacking a discussion of cultural or tribal impacts. The 1981 EA clarified that leasing allows for resource development, but detailed evaluations of future exploration and development would be necessary, with public participation and environmental safeguards at each stage.
In 1984, a Supplemented Environmental Assessment (1984 EA) explicitly addressed the exploration, development, and production phases of the geothermal program, requiring lessees to submit operating plans that necessitate additional environmental analyses. The 1984 EA, which was tiered to the 1973 EIS, incorporated its evaluations while also considering the cultural, recreational, and spiritual significance of the Medicine Lake area, noting potential impairments to natural attractions due to development. However, it also suggested that geothermal production could serve as an attraction in itself.
The document emphasizes the cultural significance of the study area to contemporary Native Americans, highlighting their ongoing use of resources and spiritual connection to various natural features, such as Mt. Shasta and Medicine Lake. It notes that these culturally significant areas have not been fully documented and emphasizes the requirement for ongoing consultation with Native American groups as mandated by the American Indian Religious Freedom Act of 1979 during land-altering activities.
The 1984 Environmental Assessment (EA) acknowledges the historical relevance of the area, indicating that while no sites are currently on the National Register of Historic Places, many are considered eligible, and some are in the nomination process. However, the process of nomination does not prevent sites from being disturbed by scientific excavation.
The EA outlines that any ground-disturbing activity could disrupt archaeological artifacts and the spiritual significance of the landscape for Native Americans. To mitigate these impacts, the EA proposed consultation with local Native American groups as a key measure, although it expressed optimism that this would be "100% effective." Contradictorily, it also acknowledged potential unavoidable adverse impacts on cultural resources due to geothermal development, suggesting that continuous consultation may help minimize conflict.
Regarding historical sites, the EA stated that the Bureau of Land Management (BLM) shares proposed operational plans with the State Historic Preservation Officer (SHPO) for comments. The BLM and the Forest Service distributed the EA to around one hundred interested parties, though it is unclear if Pit River was included in this distribution, as only four responses were received, none from Pit River.
Following the 1984 Environmental Assessment (EA), the Bureau of Land Management (BLM) committed to leasing 41,500 acres in a Resource Area through a Record of Decision (ROD) in 1985. The ROD acknowledged environmental concerns, particularly regarding the protection of cultural resources and consultation with local Native American groups, stating these issues would be addressed during the Plan of Operation review. It concluded that geothermal development could occur with appropriate mitigation, and the anticipated economic and energy benefits would outweigh any residual adverse impacts. On January 22, 1985, the BLM's California director approved the leasing, asserting no significant environmental impacts would arise, thus negating the need for an Environmental Impact Statement (EIS).
In June 1988, the BLM entered into two leases (CA 21924 and CA 21926) with Calpine's predecessor, Freeport-McMoran Resource Partners Limited Partnership, without additional environmental or cultural impact analysis. These leases, effective June 1, 1988, for an initial term of ten years, granted the lessee exclusive rights to geothermal resources, subject to applicable laws and regulations.
Both leases included stipulations:
1. Water in existing natural sources is not available for use unless permitted by the Forest Supervisor, and access for wildlife must be maintained; no surface disturbance is allowed within 700 feet of water sources without permission.
2. Surface-disturbing activities require demonstration to the Forest Service and BLM that unacceptable environmental impacts will not occur in areas with exceptional visual qualities.
Lease CA 21926 had an additional stipulation prohibiting surface-disturbing activities from April 1 to August 30, unless it could be shown that such activities would not adversely affect Goshawk nesting habitats.
Neither lease included additional restrictions on use, and the agencies did not conduct an EA or EIS or consult with interested tribes prior to issuing the leases. Minimal activity occurred during the initial lease term, with authorization for two exploration core holes in 1994 for lease CA 21926, and Calpine later conducted one temperature gradient core hole in 1994, receiving approval to deepen it in April 1995.
In 1995, Calpine proposed the Fourmile Hill Geothermal Exploration Project, submitting an Exploration Plan for leased parcels in the vicinity of a later power plant. Following a NEPA review, an Environmental Assessment (EA) was released in December 1995, garnering minimal public input and no response from the Pit River Tribe, leading to a Finding of No Significant Impact and project approval in April 1996. Concurrently, Calpine submitted a plan for the Fourmile Hill Geothermal Development Project, a 49.9 megawatt power plant to be situated three miles northwest of Medicine Lake, covering ten and a half acres with additional well pads and substantial surface disturbance for a transmission line.
In June 1996, the agencies began developing an Environmental Impact Statement (EIS) for the power plant, notifying over 750 stakeholders, and consulting with tribes, including the Pit River Tribe. An ethnographic report was commissioned to identify cultural resources in the area, with a draft completed by December 1996. The draft EIS issued in July 1997 faced public criticism, notably from the Pit River Tribe.
In May 1998, Calpine's leases were extended for five years without an environmental review. A final EIS was published in September 1998, exploring transmission line routing options and rejecting the "no action" alternative due to its failure to meet project objectives. The EIS outlined the project’s purpose as developing geothermal resources to supply electrical energy, citing various federal acts supporting alternative energy development. While all alternatives considered had significant adverse effects on traditional cultural values, the chosen alternative was deemed to have the least overall impact, particularly by avoiding effects near sensitive areas like Medicine Lake and Timber Mountain.
In July 1999, the Keeper of the National Register of Historic Places deemed the Medicine Lake caldera eligible for listing, prompting further studies on regional eligibility. A briefing paper in the same month recommended denying the Fourmile Hill Plant project due to its significant impact on the Medicine Lake area's intrinsic value, asserting no mitigation could offset this impact. Despite this, agencies issued a Record of Decision (ROD) on May 31, 2000, approving the project, citing Calpine's federal leases as a vested property interest that superseded an Executive Order on Indian Sacred Sites. The Bureau imposed a five-year moratorium on new geothermal development to assess impacts, leading to the suspension of operations on several leases.
Pit River Tribe appealed the ROD, but both appeals were denied. While appeals were pending, the Bureau lifted the moratorium without public comment, citing changed energy conditions. In May 2002, the Bureau extended Calpine's leases for another forty years without further environmental analysis. Subsequently, Pit River initiated litigation in the Eastern District of California, alleging statutory violations linked to the leasing process. The district court granted summary judgment for the agencies on all claims on February 17, 2004.
The legal review process involves a de novo examination of the district court's summary judgment, applying the standards from the Administrative Procedure Act (APA), which allows agency actions to be overturned if found arbitrary, capricious, or not in accordance with the law. The review also considers whether Pit River has Article III standing to raise its claims and if the 2005 amendments to the Geothermal Steam Act affect the justiciability of these claims.
The Supreme Court outlines three constitutional standing requirements: (1) the plaintiff must have suffered an "injury in fact," (2) the injury must be fairly traceable to the defendant's conduct, and (3) a favorable court decision must likely redress the injury. In this case, Pit River asserts standing based on procedural harms. The agencies contest that Pit River fails to meet the first and third requirements.
To establish "injury in fact," a plaintiff claiming a procedural injury must demonstrate that the challenged procedures are intended to protect a concrete interest. Environmental plaintiffs can show injury by indicating that they utilize the affected area and that their aesthetic or recreational values will be diminished. Pit River claims it has used the lands for cultural and religious purposes for generations and thus demonstrates an injury in fact.
Once injury in fact is established under the National Environmental Policy Act (NEPA), the requirements for causation and redressability are relaxed, requiring only that the procedural right could protect concrete interests. The agencies do not dispute the traceability of harm to their conduct, but argue that Pit River's challenge to the 1998 lease extensions is no longer justiciable due to subsequent 2002 lease extensions, claiming these are not redressable. However, the court finds that the requested relief could remedy Pit River’s harm, noting that an inadequate environmental review would necessitate correction of the decision-making process, which could invalidate the leases or enjoin surface-disturbing activities until compliance with NEPA is achieved.
Lastly, the agencies argue that the 1998 Environmental Impact Statement (EIS) precludes relief for Pit River's claims, but the court rejects this assertion. Consequently, Pit River is found to have Article III standing.
In 2005, Congress amended the Geothermal Steam Act, specifically altering the Bureau of Land Management's discretion regarding geothermal lease extensions. The amendments stipulate that the Secretary must extend the primary term of a geothermal lease for five years if the lessee meets specific work commitment requirements or makes annual payments after the lease's tenth year. This change from "may" to "shall" removes the Bureau's discretion in granting lease extensions, contingent upon lessee compliance.
The implications of these amendments may render the current appeal moot, as a case is considered moot when it no longer constitutes an active controversy, particularly if there is no possibility of effective relief. The statute’s retroactive application could foreclose any relief for the Pit River, as it would limit rights previously held. The Supreme Court precedent in Landgraf v. USI Film Products outlines that for retroactive application, courts must first determine if Congress has explicitly indicated such intent. Without clear congressional intent, statutes are generally presumed not to have retroactive effects, particularly if they would affect rights or liabilities established before the statute’s enactment.
The court determined that the 2005 geothermal amendments to the Energy Policy Act should not be applied retroactively, as the statute does not explicitly allow for retroactive application, and transition rules for leases prior to the amendments have not been issued. Retroactive application would impose new obligations on Calpine, which is disfavored under Landgraf. Thus, the case remains relevant despite the amendments.
Pit River did not contest the 1988 leasing decisions due to the expiration of the statute of limitations, but claimed that the agencies failed to comply with NEPA, NHMA, and fiduciary duties by not conducting an environmental review before the 1998 lease extensions. The agencies countered that prior environmental reviews (1973 EIS, 1981 EA, and 1984 EA) were adequate for the lease extensions and argued that the subsequent 1998 EIS precluded effective relief.
NEPA mandates that federal agencies assess significant environmental impacts and inform the public of their considerations. The reviewing court must ensure the agency conducted a thorough assessment of environmental consequences, emphasizing procedural requirements over specific results. Pit River contended that an EIS was necessary before the 1998 lease extensions.
In reference to the Conner case, the court noted that federal agencies had previously issued findings of no significant impact after environmental assessments, allowing for lease sales without EIS requirements at the leasing stage. This case involved leases with varying stipulations regarding surface occupancy and the extent of government control over drilling and surface activities.
The central issue in Conner was whether selling leases constituted an irreversible commitment of federal forest land with significant environmental impacts. The court determined that non-NSO leases did represent such a commitment, as they did not grant the government absolute rights to prevent surface-disturbing activities. The relinquishment of the 'no action' alternative without an Environmental Impact Statement (EIS) undermined NEPA's objective of thorough environmental consideration, particularly regarding reasonable alternatives.
In Bob Marshall Alliance v. Hodel, the court reaffirmed this position, ruling that the sale of leases necessitated an EIS unless surface disturbance was absolutely prohibited without specific government approval. Conversely, in Friends of Southeast's Future v. Morrison, an EIS was deemed unnecessary where the agency retained discretion over resource management.
The current litigation requires determining if the leases and extensions allow agencies to prevent surface disturbance. The 1988 leases and 1998 extensions grant exclusive rights to the lessee for geothermal resource development without reserving the agencies' absolute denial power. Although some limitations on surface disturbance exist, they are not comprehensive and apply only to specific lease sections or times. The agencies have interpreted the lease language as granting the lessee significant development rights, with the Bureau and Forest Service considering the 'No Action Alternative' for certain projects in the Medicine Lake area.
Department of the Interior Solicitors indicated that denying geothermal projects could constitute a taking of private property rights associated with existing leases, suggesting decision-makers lacked the authority to deny such projects without compensating leaseholders. The Record of Decision (ROD) for the Fourmile Hill Plant recognized Calpine's vested property rights, implying that the leases granted an absolute right to develop. It assessed the project against Executive Order 13007 regarding Indian Sacred Sites, concluding that while adverse effects on sacred sites were present, denying the project would infringe on Calpine's rights. This interpretation aligns with previous Environmental Impact Statements (EIS) and Environmental Assessments (EA), which acknowledged that issuing geothermal leases could significantly impact the environment and necessitate further EIS evaluations.
The 1973 EIS acknowledged that geothermal leasing might require further environmental analysis due to its potential effects, while the 1981 EA emphasized that leasing entails the right to resource development, subject to lease limitations. The 1985 ROD allowed for development in conditional no surface occupancy zones, contingent upon agency approval but offered no guarantees of feasibility for proposed operations.
A programmatic impact statement typically negates the need for subsequent specific analyses unless new significant environmental impacts arise. However, the 1973 EIS was deemed inadequate in assessing leasing impacts, as established in Sierra Club v. Hathaway, where the court denied an injunction against casual use geothermal exploration leases, determining that such leases did not represent irreversible commitments of resources. This decision hinged on the expectation that the Bureau of Land Management (BLM) and the U.S. Geological Survey (USGS) would adhere to National Environmental Policy Act (NEPA) EIS requirements as the leasing program advanced. Moreover, the 1981 and 1984 EAs were found insufficient as they failed to evaluate actual geothermal development impacts, focusing instead only on leasing and casual use exploration, leading to inconsistencies with the leases granted. The court's ruling in Salmon River clarified that site-specific impact evaluations are only required following a significant decision to proceed with development.
Critical decisions regarding lease extensions occurred in 1988 and 1998, granting absolute development rights. The agencies argued that the 1998 lease extensions merely maintained the status quo, which, per case law, does not necessitate an Environmental Impact Statement (EIS). However, previous rulings indicated that agency actions altering the status quo require an EIS. Unlike the situation in *National Wildlife Federation v. Espy*, where no change occurred, the 1998 extensions provided Calpine with additional rights to develop the land, diverging from merely preserving conditions prior to 1988. Thus, the agencies were obligated to prepare an EIS before extending the leases, as earlier environmental reviews did not suffice.
Calpine contended that any shortcomings in the environmental review prior to the 1998 extensions were rendered moot by the EIS prepared for the Fourmile Hill Plant. The district court supported this view, but the issue hinges on standing rather than mootness, since the EIS was completed before litigation commenced. The central question is whether the relief sought by Pit River effectively addresses its harm. Additionally, NEPA mandates that federal agencies include a detailed statement of alternatives to proposed actions that significantly affect environmental quality.
Agencies are required by statute to study and present alternatives to proposed actions that involve unresolved resource conflicts, as mandated by 42 U.S.C. § 4332(2)(E). The "alternatives" section is considered central to the Environmental Impact Statement (EIS) process, ensuring decision-makers evaluate all potential approaches, including project abandonment, that could affect environmental impact and cost-benefit analysis (40 C.F.R. § 1502.14). The EIS aims to inform decision-makers of potential environmental disruptions while options remain open (Conner, 848 F.2d at 1446).
It has been determined that agencies should have prepared an EIS during the 1998 lease extensions; relying on a later EIS would contravene federal regulations and established case law. Regulations specify that timely environmental reviews must be integrated at the earliest planning stages to reflect environmental values and prevent future conflicts (40 C.F.R. § 1501.2). The EIS must start close to the proposal development stage to effectively inform decision-making, not to rationalize pre-existing decisions (40 C.F.R. § 1502.5).
Failure to conduct timely environmental reviews cannot be rectified by subsequent reviews, as established in cases like Save the Yaak Committee v. Block, where a delayed Environmental Assessment (EA) was deemed untimely (840 F.2d 714). Delays can lead to a rigid approach, resulting in increased environmental harm tolerated after significant investments. The agencies' noncompliance with NEPA’s timing requirements has been found to hinder the incorporation of environmental values into planning decisions (Metcalf v. Daley, 214 F.3d 1135).
The agencies issued a final Environmental Assessment (EA) and a Finding of No Significant Impact (FONSI) after signing two agreements to support the Tribe's proposal. Plaintiffs subsequently filed a lawsuit claiming violations of the National Environmental Policy Act (NEPA) and other statutes due to the agencies' support of the Makah's proposal without prior environmental review. The court upheld the plaintiffs' claims, finding that the agencies had made an "irreversible and irretrievable commitment of resources" before conducting the required review.
It was noted that the later Environmental Impact Statement (EIS) did not rectify the initial failure because it failed to address whether the land should have been leased at all. The 1998 EIS did not consider the "no-action" alternative and only focused on developing geothermal resources on specific federal leases. The court emphasized that allowing the 1998 EIS to justify prior decisions would improperly rationalize decisions already made without adequate review.
Furthermore, the court referenced a precedent indicating that completing an action does not moot a NEPA claim if the agency bypasses statutory requirements at critical stages. The 1998 EIS assumed the leases were valid and did not conduct the necessary review regarding the development of the Medicine Lake Highlands. Consequently, the court concluded that the lease extensions and the approval process for the Fourmile Hill Plant violated NEPA. Additionally, Pit River claimed that the agencies violated the National Historic Preservation Act (NHPA) by not identifying traditional cultural properties on the leaseholds before issuing or extending the leases.
The district court determined that the preparation of the 1998 Environmental Impact Statement (EIS) addressed all claims raised. Alternatively, it ruled that the lease extensions were exempt from the National Historic Preservation Act (NHPA) since they did not alter the existing conditions. The NHPA mandates federal agencies to consider the impact of their actions on historic sites, requiring early consultation with affected tribes when such properties may be impacted. No consultation occurred regarding the lease extensions, although NHPA review was conducted during the Fourmile Hill Plant approval process. The agencies justified this lack of analysis by asserting that no review was necessary, arguing that subsequent analyses rectified earlier deficiencies. However, the court found that the lease extensions constituted a federal undertaking necessitating NHPA review, and the later review could not remedy the initial failure to assess whether the land should have been leased.
The Pit River Tribe claimed that the agencies breached their fiduciary duty by not safeguarding the Tribe's interests. The district court ruled that the agencies fulfilled their fiduciary obligations as they did not violate any statutes during the Fourmile Hill approval process. However, since the court concluded that the agencies violated both NEPA and NHPA, it followed that they also infringed upon their fiduciary duty to the Pit River Tribe. Consequently, the court overturned the district court's judgment, stating that the lease extensions must be revoked due to the lack of an EIS prior to their approval. The court directed the district court to enter summary judgment in favor of the Pit River Tribe, without addressing additional claims related to later agency actions.
