PORTLAND, Ore. (CN) — A Ninth Circuit panel took on arduous arguments from oil leaseholders on Friday for three appeals seeking to reverse two orders that favored the fate of greater sage grouse habitat in several western U.S. states.
The two underlying cases at hand began in 2018 when a coalition of conservation groups challenged Trump administration policies that removed protectors for greater sage grouse, a bird species native to the western U.S. and Canada that have been in decline for decades due to habitat loss.
One lawsuit, filed in the U.S. District Court of Boise, was led by Western Watersheds Project and the Center for Biological Diversity. The other, filed in Montana's federal court, was led by Montana Wilderness Federation and the Wilderness Society.
The two cases take on the same policies that erased the previous administration's measures in 2015 to preserve the imperiled species and curbed public input on oil and gas planning on public lands, allowing U.S. Bureau of Land Management to sell oil and gas leases across 1.9 million acres of sage grouse habitat.
Both lawsuits claimed that the bureau’s sale violated the National Environmental Policy Act and the Federal Lands Policy and Management Act and have, so far, prevailed on their claims for phase one lease sales.
In September 2018, U.S. District Judge Ronald E. Bush granted Western Watersheds' preliminary injunction. Bush’s order applied to leases scheduled after late 2018, requiring the bureau to implement Obama-era provisions involving public involvement and protest for oil and gas leasing processes while discontinuing conflicting procedures contained in the Trump administration’s new policies.
The injunction did not apply to leases on lands outside of federally recognized areas of sage grouse habitat or those that had already begun.
Following the injunction, Bush granted partial summary judgment for Western Watersheds, which upheld terms from the injunction while setting aside lease sales in Nevada, Utah and Wyoming that applied Trump-era provisions.
Similarly in March 2022, U.S. District Judge Brian Morris partially granted Montana Wilderness' motion for summary judgment, upholding similar findings for phase one and two lease sales, albeit with the vacatur stayed on phase two sales pending appeals.
The appeals on Friday came from Anschutz Exploration Corporation and Chesapeake Exploration in 2022, two intervening oil companies affected by the orders that were not parties to either case at the time of the rulings. The companies' attorneys took turns arguing that because the district courts did not add them as parties or allow them to intervene earlier — both of which could have allowed them to appeal much sooner and bring new arguments, they say — the courts did not have jurisdiction to vacate their leases.
U.S. Circuit Judge Marsha S. Berzon, a Bill Clinton appointee, had a hard time accepting this argument, particularly since the orders on appeal did not explicitly vacate any leases.
“The law in this circuit is that if you’re an absent oil and gas lessee like we were, then you cannot go the whole hog and wipe out our leases,” said Anschutz attorney Mark Gibson, explaining that the initial risk was that a no surface disturbance activity provision would have been put in place pending remand to the bureau. What shook them, he said, is when that didn’t happen.
“Instead, we get a letter from the BLM that says your leases are now cancelled. That is what matters in this case,” Gibson said.
Even Montana Federation attorney Michael Freeman agreed, stating, “I think everyone below, including the district court, understood that that order served to vacate the leases and they’ve all proceeded accordingly."
However, Freeman argued against reversing Bush's order overall, saying that the oil companies’ interests were adequately represented by intervenor Western Energy Alliance and that all adverse parties were given plenty of notice from the start. The attorney for the U.S., Daniel Halainen, made a similar note, though his stance leaned more toward a remand without vacatur.
"But BLM would have to start from scratch," Berzon noted, citing a remedy that Freeman opposed earlier. When Berzon had asked Freeman why the organization's interests are not accommodated by such a remedy, he said, "The mere presence of those existing leases will make it highly unlikely that BLM would actually cancel any leases."
After a two hours of arguments, the judge panel — also consisting of U.S. Circuit Chief Judge Mary H. Murguia, a Barack Obama appointee, and U.S. Circuit Judge Danny J. Boggs, a Ronald Reagan appointee — adjourned the hearing seemingly puzzled, leaving the question of how they may rule with so much at stake.
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