Entergy Gulf States Louisiana, L.L.C. v. United States Environmental Protection Agency
Docket: No. 15-30397
Court: Court of Appeals for the Fifth Circuit; March 17, 2016; Federal Appellate Court
Plaintiffs Entergy Gulf States Louisiana, L.L.C. and Entergy Arkansas, Inc. initiated a reverse-Freedom of Information Act (FOIA) suit against the United States Environmental Protection Agency (EPA) to prevent the release of documents requested by Sierra Club. Sierra Club appealed the district court's denial of its motion to intervene in this reverse-FOIA suit. The appeal was reversed, allowing Sierra Club to intervene.
In 2011 and 2013, Sierra Club submitted FOIA requests to the EPA for documents from Entergy related to three power plants, which Entergy designated as containing confidential business information (CBI) under FOIA Exemption 4. The EPA, after reviewing the documents, concluded that none contained Entergy's CBI but identified approximately 18,000 pages with third-party contractual information potentially eligible for confidential treatment. The EPA planned to temporarily withhold this third-party information until determining its CBI status, while releasing around 3,685 pages to Sierra Club.
Subsequently, in August 2014, Entergy filed the reverse-FOIA suit in the Eastern District of Louisiana, seeking to overturn the EPA's findings, declare the documents exempt under FOIA Exemption 4, and obtain an injunction against their disclosure. A joint motion to stay the case was filed by Entergy and the EPA to facilitate discussions regarding the disputed documents, during which the EPA agreed not to release any documents pending resolution of the suit, effectively addressing Entergy's initial motion for a preliminary injunction.
On September 29, 2014, Entergy and the EPA jointly requested to continue the stay of their case until the EPA completed its review of the confidentiality of third-party documents, arguing that this would enhance judicial efficiency by allowing for the narrowing of relevant documents. Sierra Club opposed the stay, claiming it would suffer prejudice due to delayed document disclosure. Nonetheless, the district court granted the stay, emphasizing the benefit of the parties collaboratively narrowing the litigation scope. On November 3, 2014, Entergy and the EPA reported that the review process was only 20% complete, prompting another request for a stay. Sierra Club submitted a report advocating for bifurcation of the case—supporting the stay for documents potentially containing confidential business information (CBI) but opposing it for documents already determined to lack such information. The district court favored Entergy and the EPA’s approach over Sierra Club's piecemeal strategy, maintaining the stay.
Sierra Club filed a motion to intervene on September 11, 2014, asserting inadequate representation by the EPA, which Entergy and the EPA opposed. A magistrate judge initially approved the intervention on October 15, 2014, but the district court later reversed this decision on March 4, 2015, leading Sierra Club to file an interlocutory appeal. The appeal’s review of the district court's denial of intervention of right is conducted de novo, under Federal Rule of Civil Procedure 24(a)(2), which outlines four requirements for intervention: timeliness of application, a related interest in the subject matter, potential impairment of that interest by the action’s outcome, and inadequate representation by existing parties. The standard for intervention is flexible and favors the proposed intervenor, emphasizing practical considerations over technicalities.
Entergy acknowledges that Sierra Club meets the first three criteria for intervention by right, leaving the fourth requirement—whether Sierra Club's interests are inadequately represented by the EPA—at issue. The burden of proof lies with the applicant, but it is minimal, requiring only a demonstration that representation may be inadequate rather than certain inadequacy. There are two presumptions of adequate representation: one arises when a party is legally representing an absentee, and the other when the intervenor shares the same ultimate objective as an existing party. In this case, the first presumption does not apply, as the EPA is not a legal representative of Sierra Club. The dispute centers on whether the second presumption applies and whether Sierra Club can show sufficient adversity of interest to overcome it.
To demonstrate adversity, Sierra Club must illustrate that its interests diverge from those of the EPA in a relevant manner. Sierra Club argues that it has divergent interests regarding document disclosure timing, emphasizing that it seeks prompt disclosure while the EPA favors eventual disclosure, as evidenced by opposing stances on a stay and bifurcation. The EPA has agreed to withhold document release until the issue of whether they contain Entergy’s confidential business information (CBI) is resolved, which could potentially delay Sierra Club's access to these documents. Additionally, the EPA's efforts to protect third-party CBI and its cooperation with Entergy further complicate Sierra Club's ability to obtain documents. Sierra Club initially opposed a stay, fearing prejudice from delayed disclosure, but later suggested bifurcation, which the EPA opposed. The analysis concludes that Sierra Club's interests diverge from those of the EPA concerning the stay, bifurcation, protection of third-party CBI, and cooperation with Entergy.
Entergy acknowledges that there are differing interests between Sierra Club and the EPA but argues that the issues of stay and bifurcation are merely tactical matters within the district court's discretion and do not merit intervention. Entergy claims that the EPA is meeting its legal obligations to identify third-party confidential business information (CBI) and that Entergy's assistance is essential for this process, asserting that these third-party interests do not significantly affect the Entergy CBI issue at hand. However, the court disagrees, noting that although the EPA must conduct the third-party CBI determination, both determinations could have proceeded concurrently. Instead, the EPA requested a stay of the entire case pending the completion of the third-party determination, which the court notes has already extended beyond eighteen months. The court emphasizes that had the case not been stayed, it could have been resolved much sooner. Furthermore, the stay aims to potentially reduce the volume of documents in dispute; if the EPA finds any document to contain third-party CBI, it will be excluded from the litigation, thus affecting the scope of the case. The court concludes that the divergent interests of Sierra Club and the EPA regarding the stay and bifurcation are relevant to the case, and the ongoing stay is delaying its resolution. Ultimately, the unique circumstances of this case mean that the EPA’s efforts to protect third-party CBI and collaborate with Entergy will likely lead to a narrower and significantly delayed ruling on Entergy's CBI. The court finds that these interests are indeed pertinent to the case, and the potential intervention by Sierra Club is justified given the divergence in interests.
Sierra Club is entitled to intervene of right in the case due to a divergence of interests from the EPA, overcoming the presumption of adequate representation typically afforded to governmental agencies. The court notes that, while a stronger showing of inadequacy is generally required when a governmental agency is involved, this requirement does not apply here since the EPA is not a sovereign interest. The court distinguishes the present case from prior rulings, emphasizing that the presumption of adequate representation arises only in suits involving sovereign interests. The ruling clarifies that Sierra Club's intervention is limited to allowing participation in the district court proceedings, without addressing the merits of related issues such as stay or bifurcation. The court identifies specific areas of divergent interests between Sierra Club and the EPA, including matters concerning stay, bifurcation, and the protection of third-party confidential business information (CBI), while choosing not to explore other potential divergent interests or claims of nonfeasance. The decision is reversed and remanded for Sierra Club to intervene.
