Opinion
Case No. 98-MK-886 (PAC).
April 14, 2004
ORDER REVERSING IN PART AND AFFIRMING IN PART AGENCY ACTION
THIS MATTER comes before the Court pursuant to the Plaintiff's Brief (Motion) Compelling Agency Action Unlawfully Withheld (# 48), the Defendant's response (# 50), the Plaintiff's reply (# 51), and the Plaintiff's supplemental brief (# 62).
BACKGROUND
The Court's efforts to discern the specific factual background of this matter were complicated by the fact that neither side offers a detailed factual recitation in any brief or pleading and the fact that the administrative record was not compiled either chronologically or in any apparent order. In addition, the Plaintiffs' opening brief often cites to the Amended Complaint, not the administrative record, for the purpose of establishing facts.
At some point prior to or in 1997, Darren Stone obtained the rights to the mineral estate lying beneath approximately 160 acres of the BLM land in question. On or about April 21, 1997, Mr. Stone filed a Land Use Application with the BLM, seeking approval to engage in "[e]xploration for sand and gravel resources by multiple backhoe test pits" on the land
On May 27, 1997, the BLM responded to Mr. Stone's application, noting that "the mineral estate is paramount to the surface estate and [the mineral estate owner] do[es] not need a BLM permit to go upon the surface for activities related to the development of the minerals." Accordingly, citing its lack of apparent authority to do so, the BLM declined to issue any permit on Mr. Stone's application. However, the BLM expressed concern about two locations on the property that had yielded archaeological evidence of Anasazi Indian culture, at least one of which was potentially eligible for listing on the National Register of Historic Places. In its letter to Mr. Stone, the BLM expressed hope that it would "be able to work with you . . . to recover the cultural data contained within these sites before that information is lost as a result of the development of the gravel operation." In June 1997, Mr. Stone's company conducted initial exploratory work, digging a series of test pits under the supervision of a BLM archeologist. Although some surface artifacts may have been disturbed by machinery, none of the test pits revealed any archeological remnants.
On July 10, 1997, Mr. Stone applied to the Colorado Department of Natural Resources ("CDNR") for a Reclamation Permit to cover the proposed gravel mining operation. Although the BLM had already determined that Mr. Stone's mineral estate was dominant over the surface rights, and thus, that the BLM had no power under the National Historic Preservation Act ("NHPA"), 16 U.S.C. § 470 et seq. or the National Environmental Police Act ("NEPA"), 42 U.S.C. § 4321 et seq., to impose any additional permitting or other requirements on him, the BLM — being the surface landowner — was nevertheless solicited by the CDNR to comment on Mr. Stone's permit application. The BLM expressed concerns on several fronts to Mr. Stone, and negotiations ensued. These negotiations ultimately resulting in the BLM writing to CDNR on November 21, 1997, expressing five recommendations that Mr. Stone had agreed to and that should be included in any permit: (i) matters concerning fencing off excavation areas and road access; (ii) weed control; (iii) construction of a road to the excavation sites; (iv) use of topsoil; and (v) fencing off of the archeological areas.
A sixth recommendation, concerning water runoff, was added later.
Thereafter, CDNR scheduled a public hearing on Mr. Stone's permit. In advance of that hearing, the members of the Plaintiff organization began registering complaints with the BLM, CDNR, and various other officials, claiming that the BLM was in error over its claim that it had no obligations under NHPA or NEPA concerning Mr. Stone's permit. On February 25, 1998, despite the objections of the Plaintiff's members, the CDNR issued Mr. Stone's requested permit, subject to the recommendations urged by the BLM. Mr. Stone then began formal operations on the site.
The Plaintiff then commenced the instant action. The legal issues involved are fairly simple to state: (i) was the BLM's involvement with Mr. Stone's requests a "federal action" for purposes of invoking the requirements of NEPA; (ii) was the BLM's involvement with Mr. Stone's requests a "federal undertaking" for purposes of invoking the requirements of NHPA; and (iii) if either or both issues are resolved in the affirmative, what is the appropriate remedy. Notably, the Court is not called upon to decide whether the BLM correctly determined that Mr. Stone was not required to obtain a federal permit in the first instance.
JURISDICTION
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331.
ANALYSIS
A. Standard of review
The parties agree that this action is brought under the provisions of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. Pursuant to that Act, the Court may set aside the findings and conclusions of the BLM only if they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" or "without observance of procedure required by law." 5 U.S.C. § 706(2)(a), (d); Lamb v. Thompson, 265 F.3d 1038, 1045-46 (10th Cir. 2001).
B. Whether the BLM played a substantial role
Both causes of action by the Plaintiff inquire as to whether the role of the BLM was substantial with regard to Mr. Stone's mining operation. NEPA requires a federal agency to prepare a detailed environmental impact statement for every "major federal action" it participates in if such actions have the potential of significantly affecting the environment. 42 U.S.C. § 4332(c). NHPA requires that before any "federally assisted undertaking" occurs, the agency involved take into account the effect of that undertaking on any site that is listed on or eligible for listing on the National Register of Historic Places and permit the Advisory Council on Historic Places to comment on the matter. 16 U.S.C. § 470f.
The BLM argues that neither test is met because, under Colorado law, its rights in the surface estate of the lands is subservient to Mr. Stone's rights to exploit the mineral estate, and that as a result, the BLM lacks any authority to restrain or condition Mr. Stone's activities on the BLM's land The Plaintiffs, however, contend that recent trends in Colorado land law have moved away from the dominant-servient model of mineral and surface estates, and established the notion of co-dominance: that the surface and mineral estate owners must equally share the power to affect the exploitation of the land Because the relative rights of surface and mineral estate owners under Colorado law dictate the relative power the BLM could exercise, the Court will begin its analysis with that issue.
1. Rights of surface owners under Colorado law
The present state of Colorado law regarding the rights of mineral and surface estate owners was most recently addressed by the Colorado Court of Appeals in Burkett v. Amoco Production Co., 85 P.3d 576, 578 (Colo.App. 2003):
The lessee of a severed mineral estate is privileged to use that portion of the surface that is reasonably necessary to develop the mineral interest. However, the surface owner continues to enjoy the right to use the surface consistent with the burden of the mineral lessee's privilege to develop the mineral interest. Neither the owner nor the lessee has an absolute right to exclude the other from the surface, but rather, each must have due regard for the rights of the other in making use of the surface. This due regard concept requires the lessee to accommodate the surface owner to the fullest extent possible consistent with the lessee's right to use the surface for the reasonable development of the mineral estate. If the lessee's operation would impair or preclude uses by the surface owner, the owner's right to be accommodated includes the right to require the lessee to use reasonably available alternatives.Citing Gerrity Oil Gas Corp. v. Magness, 946 P.2d 913, 926-27 (Colo. 1997); see also Amoco Production Co. v. Thunderhead Investments, Inc., 235 F. Supp.2d 1163, 1171 (Colo. 2002). The right of access of a mineral estate is in the nature of an implied easement, since it entitles the holder to a limited right to use the land in order to reach and extract the minerals. Gerrity, 946 P.2d at 927. A trespass by the mineral estate holder occurs at the point when the holder exceeds the scope of that implied easement and thereby exceeds the legal authorization permitting mineral development activities. Id. However, these common-law rules apply only in the absence of contradictory regulatory requirements. Amoco, 235 F. Supp.2d at 1171, citing Gerrity, 946 P.2d at 926-27.
2. CDNR Permitting Authority
The next step in the analysis is to identify what role, if any, the BLM could play in the CDNR's process of granting Mr. Stone's application for a permit.
Pursuant to C.R.S. § 34-32.5-109, Mr. Stone was required to obtain a Reclamation Permit from the CDNR before commencing any gravel mining operations. C.R.S. § 34-32.5-112 establishes the required contents of an application for a Reclamation Permit. The statute provides that, once an application for a permit is filed, the applicant must mail a copy to the owner of the surface land C.R.S. § 34-32.5-113(9)(c). Parties wishing to be heard with regard to the application then have 20 days to file objections or statements with regard to the application. C.R.S. § 34-32.5-114. If an application is adequately contested, the CDNR then holds a public hearing before making a final ruling on the application. C.R.S. § 34-32.5-115(2).
C.R.S. § 34-32.5-115(4) expressly sets forth the only permissible grounds upon which an application may be denied: (i) an incomplete application or inadequate financial warranties; (ii) non-payment of the required fee; (iii) that an aspect of the proposed operation is contrary to federal, state, or local law or regulation; (iv) that the proposed operation will affect man-made structures in the vicinity; (v) that the proposed operation is located on prohibited lands; or (vi) that the proposed reclamation plan is inadequate. Id. Notably, nothing in the law or regulations gives a surface landowner any power to veto or otherwise withhold consent to the approval of a permit application. A surface owner who objects to a proposed operation merely has the right to file an objection and seek to persuade the CDNR that the application is deficient in one of the stated categories.
3. "Major federal action" under NEPA
The Court next turns its attention to the federal statutes involved. NEPA does not statutorily define the phrase "major federal action." Regulations interpreting NEPA, promulgated by the Council on Environmental Quality, define "action" to include "projects and programs entirely or partly financed, assisted, conducted, regulated, or approved by federal agencies." 40 C.F.R. § 1508.18(a). The regulations go on to categorize four typical types of "major federal actions," the most relevant of which is described as "[a]pproval of specific projects, such as construction or management activities located in a defined geographic area. Projects include actions approved by permit or other regulatory decision as well as federal and federally assisted activities." 40 C.F.R. § 1508.18(b)(4). These regulations are entitled to substantial deference, Andrus v. Sierra Club, 442 U.S. 347, 358 (1979), and neither party has suggested that the Court reject the regulations or interpret NEPA in a manner inconsistent with the regulations.
As the regulations demonstrate, federal funding is not the sine qua non of a "major federal action." Projects funded entirely by state and private actors can nevertheless be considered "federal actions" if they are "potentially subject to Federal control and responsibility." Village of Los Ranchos de Albuquerque v. Barnhart, 906 F.2d 1477, 1482 (10th Cir. 1990), citing Sierra Club v. Hodel, 848 F.2d 1068, 1089 (10th Cir. 1988). Such "control and responsibility" results from a federal agency's authority to influence the nonfederal activity. Id. The influence must be more than the power to give nonbinding advice to the nonfederal actor, and must rise to the level at which the federal agency possesses actual power to control the activity. Id.
The preceding discussion of Colorado law establishes that, once the BLM determined that Mr. Stone's proposed actions did not require a federal permit — a determination that this Court again emphasizes is not before it for review — the CDNR became the sole agency with authority to review and approve the gravel operation. Pursuant to C.R.S. § 34-32.5-114, the BLM's role thereafter was limited to filing objections to Mr. Stone's Reclamation Permit application and attending the public hearing. Because the discretion to grant or deny the permit remained solely with the CDNR, notwithstanding any objections by the BLM or others, the BLM's objections, recommendations, or comments on Mr. Stone's permit were, at best, nonbinding advice. Under Los Ranchos and Sierra Club, then, this limited ability to influence the outcome of the CDNR permitting process does not rise to the level of "major federal action" for purposes of NEPA.
However, finding that the BLM merely had input into, but not the actual power to control, the state's permitting process, Sierra Club nevertheless suggests that the BLM might nevertheless engage in a "federal action" under NEPA in such circumstances. In Sierra Club, a county sought to improve a road on a right-of-way over federal land managed by the BLM. Other than determining that the county's proposed construction was constrained to the right-of-way, monitoring the construction to ensure that the county did not exceed its right-of-way, and suggesting that the county re-route certain sections that strayed from its right-of-way, the BLM was not involved with the project. Under these circumstances, the 10th Circuit held that the BLM's involvement did not amount to "major federal action" under NEPA. 848 F.2d at 1090. However, the court did find "major federal action" in another aspect of the project. A portion of the project was adjacent to and potentially affected a "wilderness study area" on BLM land The court found that, although the BLM lacked the authority to control the project on the right-of-way, it had a statutory and regulatory duty to regulate the project based on the potential effects to the wilderness study area. 848 F.2d at 1090-91, citing Federal Land Policy Management Act ("FLPMA"), 43 U.S.C. § 1782, and the Interim Management Policy and Guidelines for Land Under Wilderness Review ("IMP"), 44 Fed.Reg. 72,014. The 10th Circuit stated: "when a proposed road improvement will impact a [wilderness study area] the agency has the duty under FLPMA § 603(c) and the regulation to determine whether there are less degrading alternatives, and it has the responsibility to impose an alternative it deems less degrading upon the nonfederal actor. While this obligation is limited by BLM's inability to deny the improvement altogether, it is sufficient, we hold, to invoke NEPA requirements." 848 F.2d at 1090-91. The Plaintiff here argues that this portion of Sierra Club controls and warrants a similar outcome here.
Although the Court has some doubt as to whether Sierra Club is truly analogous to the instant case, there are enough points of similarity to warrant following it. Mr. Stone, who appears to own the mineral rights in fee, appears to stand in a somewhat stronger position relative to the BLM than did the county, whose use of the road in Sierra Club was pursuant to a right-of-way conveyance. However, under Colorado law, Mr. Stone's mineral estate effectively gives him an easement over the BLM's land to exploit that estate. In essence, then, Mr. Stone's easement and the county's right-of-way in Sierra Club are comparable licenses to cross land owned by the BLM. Likewise, the court in Sierra Club focused on the IMP, by which the BLM reserved the right to regulate activities on rights-of-way that potentially degraded wilderness areas. That IMP, which applies to wilderness areas, is not applicable here. However, the FLPMA imposes essentially the same obligation on the BLM to regulate conduct degrading public lands as does the IMP regulation. The IMP requires that "[w]hen it is determined that the rights conveyed can be exercised only through activities that will impair wilderness suitability, the activities will be regulated to prevent unnecessary and undue degradation." 848 F.2d at 1090, citing 48 Fed.Reg. at 31,855 (emphasis omitted). With regard to the land in question in the instant case, the BLM "shall, by regulation or otherwise, take any action necessary to prevent unnecessary or undue degradation of the lands." 43 U.S.C. § 1732(b). Both provisions require the BLM to act to prevent degradation of the public land Faced with largely similar legal provisions imposing a duty to prevent degradation of public lands, the Court finds that Sierra Club warrants the conclusion here that the BLM's duty to protect its surface estate from degradation resulting from Mr. Stone's project amounts to a "major federal action" for purposes of NEPA.
In view of the extensive requirements of C.R.S. § 34-32.5-116 for reclamation programs, it is difficult for the Court to conceive of a situation in which Mr. Stone can comply with the reclamation requirements of state law, and yet effect a "unnecessary or undue degradation" of the BLM's land However, the Defendants have not specifically argued that compliance with NEPA is not required because no potential for degradation exists, and thus, the Court will not make specific findings with regard to this issue.
This does not end the inquiry, however. NEPA requires that any "major federal action" be preceded by an Environmental Assessment pursuant to 42 U.S.C. § 4332(c). The contours of such an Assessment must logically be defined by the scope of the "major federal action" involved. In this case, the BLM's authority to act is even more constrained than in Sierra Club. Here, under Colorado law, the BLM cannot prevent Mr. Stone from engaging in the reasonable exploitation of his mineral estate. Likewise, having determined that such activities do not require BLM approval, the BLM's sole remaining avenue for carrying out its statutory obligation was to determine whether Mr. Stone's proposal would unreasonably degrade the surface lands and, if so, to file objections — such as proposing alternatives — to that permit application under C.R.S. § 34-32.5-114. Thus, its obligation under NEPA to conduct an Environmental Assessment is limited to that which was necessary to carry out the function of determining the degree of surface degradation and filing objections to the permit application at the CDNR.
The BLM argues that it conducted the functional equivalent of a NEPA Assessment before submitting its recommendations to the CDNR. That Assessment appears in pages 9-19 of the Administrative Record. To comply with NEPA, the BLM first determines whether a formal Environmental Impact Statement ("EIS") is categorically required or categorically excluded under 40 C.F.R. § 1501.4(a). Neither criteria is met here, and thus, pursuant to 40 U.S.C. § 1501.4(b), the agency then proceeds to conduct an Environmental Assessment as set forth in 40 C.F.R. § 1508.9. If, upon completing the Assessment, the agency determines that there is no significant environmental impact, it must make such a finding and distribute it publicly. 40 C.F.R. § 1508.13. Otherwise, if the agency determines that a full EIS is necessary, it proceeds to prepare such a statement.
The BLM makes a brief argument that an EIS is categorically excluded because Mr. Stone's proposal amounts to "disposal of mineral materials." Because Mr. Stone's proposal clearly does not entail "disposing" of the gravel onto BLM land, the BLM's argument for categorical exclusion is without merit.
40 C.F.R. § 1508.9(b) provides that an Environmental Assessment "shall include brief discussions of the need for the proposal, of alternatives as required by [ 42 U.S.C.A. § 4332(2)(E)], of the environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted." The BLM's Environmental Assessment in the record contains a brief description of Mr. Stone's proposal. See Administrative Record at 11. Because there are no apparent "unresolved conflicts concerning alternative uses of available resources" under 42 U.S.C. § 4332(2)(E), the Assessment need not and, indeed, does not contain any analysis of potential alternatives to Mr. Stone's project. The BLM's Assessment does contain an extensive review of potential environmental impacts. See Administrative Record, pp. 12-16.
Although it does not specifically contain "alternatives" regarding these environmental impacts, the Assessment does contain several "recommendations" that the BLM made to Mr. Stone and the CDNR to address certain environmental impacts. See Administrative Record at 16-17. In this regard, the Court sees no meaningful difference between "alternatives" to the project's environmental impacts and the BLM's "recommendations." The BLM's recommendations simply requested Mr. Stone to make slight changes to his proposal to minimize the effect of the environmental impacts the BLM discovered, precisely as the BLM would have attempted to implement alternative measures had the project been solely within its control.
The Plaintiff argues that these proposed mitigation measures are "given only cursory attention" in the Assessment, and that this is insufficient to satisfy NEPA. The Court disagrees. The recommendations reflect several exchanges between the BLM and Mr. Stone to sharpen the points in dispute and reach an acceptable compromise between both parties' positions. The Plaintiff's citation to Robertson v. Methow Valley Citizens' Counsel, 490 U.S. 332, 352 (1989) for the proposition that "omission of a reasonably complete discussion of possible mitigation measures" is necessary is misplaced. The Supreme Court's statement in Robertson involved the requirements of a much more detailed EIS, not the "brief discussion" called for in the more abbreviated Environmental Assessment. Given that the Environmental Assessment is merely a screening tool, designed to aid the agency in determining whether a more detailed environmental analysis should be conducted, the Court finds that the BLM's discussion of potential mitigation measures in its Environmental Assessment satisfies NEPA.
The Assessment does not contain a listing of the agencies and persons consulted. It is in this sole respect that the BLM's environmental assessment differs from NEPA's requirements. In addition, it does not appear that the BLM has formally made a finding as to whether an EIS is required, or whether the project may be deemed to have no significant environmental impact. In order to minimize redundant effort and the needless expenditure of resources, the Court finds that it is a small matter to merely permit the BLM to amend the Environmental Assessment to set forth the information regarding persons and agencies consulted, rather than requiring the preparation of an entirely new document simply to include this ministerial content. Thus, the sole remaining matter is for the BLM to review the Environmental Assessment and make a determination as to whether to proceed to the drafting of an EIS or to issue a finding of no significant environmental impact, and to proceed accordingly. The Court will remand this matter to the BLM to make such a determination within 30 days of this order, unless the BLM formally requests additional time to complete its analysis.
40 C.F.R. § 1501.4(b) and § 1506.6(a) require that the BLM make diligent efforts to involve the public in its efforts to comply with NEPA. The Plaintiff contends that it was never granted an opportunity to be heard with regard to the BLM's Environmental Assessment. The Court notes that, beyond general statements encouraging the agency to involve the public, there is no express requirement in any regulation that requires the BLM to solicit public comments on a proposed Environmental Assessment or otherwise refrain from acting until the public has been heard. Moreover, the record reflects and the Plaintiff acknowledges that various members of the public contacted the BLM with their views on Mr. Stone's proposal and its purported environmental impacts prior to the drafting of the Environmental Assessment. While perhaps not ideal, the Court nevertheless finds that the Plaintiff's members have had an adequate opportunity to provide their views to the BLM in advance of the publication of the Environmental Assessment, and they retain the opportunity to comment on the matter as the BLM weighs whether to prepare an EIS.
Although the Plaintiff requests an injunction as part of its remedy, the Court will not grant such relief. First, such an injunction would necessarily affect Mr. Stone's right to continue his gravel mining operations, yet the Plaintiff has chosen not to make Mr. Stone a party to this action. Moreover, the potential harm that may result in the 30 days that the Court has given the BLM to complete the NEPA procedures is minimal, particularly in light of the fact that Mr. Stone has been removing gravel for several years while this case has been pending. If the BLM determines that a full EIS is warranted and requests a significant amount of time to complete its preparation, the Court will entertain a renewed request by the Plaintiff for an injunction.
4. "Major federal undertaking" under NEHA
NEHA provides that
The head of any Federal agency having direct or indirect jurisdiction over a proposed Federal or federally assisted undertaking in any State and the head of any Federal department or independent agency having authority to license any undertaking shall, prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license, as the case may be, take into account the effect of the undertaking on any district, site, building, structure, or object that is included in or eligible for inclusion in the National Register. The head of any such Federal agency shall afford the Advisory Council on Historic Preservation established under part B of this subchapter a reasonable opportunity to comment with regard to such undertaking.16 U.S.C. § 470f. An "undertaking" is "a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including — (A) those carried out by or on behalf of the agency; (B) those carried out with Federal financial assistance; (C) those requiring a Federal permit[,] license, or approval; and (D) those subject to State or local regulation administered pursuant to a delegation or approval by a Federal agency. 16 U.S.C. § 470w(7); 36 C.F.R. § 800.16(y). Although the term "undertaking" is defined broadly by NHPA and its regulations, the requirements of § 470f apply only to those "undertakings" that also rise to the level of being "federally assisted" or federally licensed. National Mining Ass'n. v. Fowler, 324 F.3d 752, 759-60 (D.C. Cir. 2003), citing Sheridan Kalorama Historical Ass'n v. Christopher, 49 F.3d 750, 755-56 (D.C. Cir. 1995). In other words, NHPA's requirements apply only if a project is both an "undertaking" and if it is either federally assisted or licensed.
Even assuming that Mr. Stone's gravel operation is an activity "subject to State . . . regulation" under § 470w(7), and thus, an "undertaking," there is no indication that BLM funds were expended to assist Mr. Stone's operation in any way. Similarly, there is no dispute in this action that the BLM found that no federal permit was required for Mr. Stone to commence operations. Accordingly, even if the gravel operation is an "undertaking" under NHPA, it is neither "federally assisted" or federally licensed, and thus, the BLM was not required to notify or consult with the Advisory Council on Historic Preservation under § 470f.
Although the provisions of NHPA do not apply to the BLM in this circumstance, the Court is satisfied that the purpose of NHPA — discouraging federal agencies from ignoring preservation values in projects they initiate, approve funds for or otherwise control, Waterford Citizens Ass'n v. Reilly, 970 F.2d 1287, 1291 (4th Cir. 1992) — was nevertheless satisfied. The record reflects that the BLM arranged to have an archaeologist present during the digging of test pits on the land; conferred with the Colorado Historic Preservation Office about the site during the CDNR permitting process; and negotiated with Mr. Stone to isolate the one known area of historic interest from gravel mining operations until it could be further studied and, if appropriate, registered and protected.
CONCLUSION
For the foregoing reasons, the Court REVERSES the BLM's determination that the gravel operation is a "major federal action" under NEPA. The BLM's Environmental Assessment of that operation substantially complies with its obligations under NEPA but is technically incomplete. Within 30 days of this Order, the BLM shall file an amended Environmental Assessment identifying the persons and agencies consulted, and a statement pursuant to 40 C.F.R. § 1508.13 that either the project poses no significant impact or that a full EIS is necessary. Unless the BLM finds that an EIS is necessary, the Court will thereafter enter a declaratory judgment that the BLM complied with NEPA regarding the gravel operation. The Plaintiff's request for an injunction is denied without prejudice to renewal upon a request for additional time by the BLM or a conclusion by the BLM that a full EIS is necessary.The Court AFFIRMS the BLM's finding that the gravel operation is not a "federal undertaking" for purposes of NEHA. For purposes of economy, a declaratory judgment on this claim shall enter upon the BLM's completion of the acts referenced above.