NEW ORLEANS (CN) – The federal judge who barred the Obama administration’s 6-month moratorium on offshore drilling refused to recuse himself. Secretary of the Interior Ken Salazar and several environmental groups claimed that even though U.S. District Judge Martin Feldman had sold some of his energy stock before presiding over the hearing on the moratorium, Feldman “owns and/or recently has owned an interest in several companies that comprise part of the network that supports the Gulf’s oil and gas industry,” and should step down.
Judge Martin Feldman found the motion for disqualification “without merit.”
Salazar, the Defenders of Wildlife and others asked Feldman to recuse himself on July 2.
Joining in the challenge were the Sierra Club, the Florida Wildlife Federation, the Center for Biological Diversity and the Natural Resources Defense Council. They sought recusal “for two distinct and independent reasons.”
The groups claimed that Feldman’s “financial holdings in various companies involved in oil and gas drilling raise in an objective mind a reasonable question concerning the Court’s impartiality in these proceedings.”
“This obligation is not mitigated by the Court’s sale of some of this stock prior to the issuance of the preliminary injunction on June 22, 2010, since, prior to that time the Court must have formed substantive opinions about the case from both the briefs filed by the parties and the hearing on June 21.”
At the time of the June 22 hearing, Feldman had no direct holdings in stock related to the offshore drilling company Hornbeck Offshore Services, which filed the original lawsuit in May that challenged the moratorium. But Feldman’s 2008 financial disclosure report indicated he had owned stock in Transocean, which owned the Deepwater Horizon rig, and in other companies that could be affected by the moratorium, including Exxon Mobil.
Secondly, the motion for disqualification claimed that Feldman could not be impartial about the moratorium as its financial implications would affect him directly, according to his June 21 ruling, in which he stated that the moratorium would cause irreparable harm to the State of Louisiana.
“To rule that the moratorium would injure irreparably a network in which the Court was financially invested creates an impermissible appearance of partiality in the mind of a reasonable observer, which is enough to trigger the duty to recuse,” the motion for recusal states. “Furthermore, the Court’s interests are not remote, contingent, or speculative; they are direct, explicit, and certain.”
The environmental groups wrote that disqualification is required by law if there is “a financial interest in the subject matter of the controversy or if there could be a substantial effect on the interest. Both of these standards are met here.” (Emphasis in original.)
The Interior Department imposed a moratorium on drilling, saying it was necessary because of uncertainties of the cause of the April 20 explosion and blowout of BP’s Macondo well, the shortage of response equipment and the need for stronger drilling regulations.
Judge Feldman overturned the moratorium June 22, finding that it was arbitrary and would disastrously affect the economy in Louisiana and other Gulf states.
After the White House appealed, the case went to the 5th Circuit in New Orleans, which refused to stay the moratorium. The 5th Circuit found that the administration had failed to show how it would be irreparably harmed if a stay were not granted. It also ruled that said the United States had “made no showing that there is any likelihood that drilling activities will be resumed pending appeal.”
On July 12, the Interior Department issued revised rules for the 6-month drilling moratorium.
On July 16, Judge Feldman ruled that the “Motion for Disqualification is without merit” and “is denied.”
Critics of the moratorium – both the original and revised version – cited BP’s disastrous history of safety violations, the fact that the company was drilling 2,000 feet deeper than its permit allowed at the time of the explosion, and a litany of other allegations of permit abuse. They pointed out that the government had stringent regulations about deepwater drilling, but didn’t bother to enforce them.