Court Declines to Vacate Environmental Assessment of Dakota Access Pipeline, Permitting Oil to Flow during Remand

by Cadwalader, Wickersham & Taft LLP
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On October 11, 2017, the United States District Court for the District of Columbia declined to vacate the U.S. Army Corps of Engineers’ (“Corps”) Environmental Assessment (“EA”) of the Dakota Access Pipeline while the agency addresses, on remand, certain deficiencies in the EA identified in a prior ruling.  The court’s decision—which permits the EA and a related easement granted by the Corps to remain in effect—will allow the pipeline to continue operating during the remand period.

The court stated that although vacatur is the “presumptive remedy” when an agency action violates the National Environmental Policy Act (“NEPA”), a two-prong test must be applied to determine whether vacatur during remand would be appropriate in this case.  The court considered: (1) the seriousness of the EA’s deficiencies, and the likelihood that the Corps would be able to substantiate its prior conclusions on remand; and (2) the disruptive consequences of vacatur.  The court concluded that the deficiencies the Corps must address on remand are not fundamental flaws, and that there is a significant possibility the Corps will be able to uphold its prior environmental determinations.  While noting that the potential disruptions of vacatur “tip only narrowly in favor of Defendants,” the court held that its findings under the first prong were sufficient to justify its decision not to vacate the EA.

The June 14, 2017 Opinion

In a June 14, 2017 opinion ruling on cross-motions for summary judgment filed by plaintiffs Standing Rock Sioux Tribe and Cheyenne River Sioux Tribe, and defendants Dakota Access and the Corps, the court largely upheld the Corps’ EA, but found that the agency failed to sufficiently address three issues:

(1) the degree to which the project’s effects are likely to be highly controversial;

(2) the consequences of an oil spill for the plaintiffs’ fishing and hunting rights; and

(3) the project’s environmental justice impacts.

The June 14 opinion remanded these issues to the Corps for further consideration, and directed the parties to submit briefing on whether remand with or without vacatur would be appropriate in this case. 

The Court’s Analysis under the Two-Prong Test

Seriousness of the Deficiencies

Under the first prong, the court evaluated the seriousness of the three deficiencies identified in the June 14 opinion.  In each case, the court found a substantial likelihood that the Corps would be able to justify its previous determinations on remand:

  • Highly Controversial: The June 14 opinion found the Corps did not fully consider “the degree to which [the pipeline’s] effects on the quality of the human environment are likely to be highly controversial” because it failed to address certain expert reports submitted by the plaintiffs that raised a substantial dispute as to the size, nature, or effect of the Corps’ action.  However, the October 11 opinion pointed out that the Corps is not required to completely redo its analysis, but rather to explain its reasoning as to the reports on remand.  Indeed, the court noted that the Corps already may have considered and concluded the reports were unreliable, but simply never articulated this conclusion in the EA.  Finding the issue of whether the project is likely to be highly controversial to be “squarely, within the realm of those ‘factual disputes’ committed to agency expertise,” the court concluded there is a significant possibility that the Corps will be able to substantiate its EA on remand.
  • Fishing and Hunting: The June 14 opinion held that the EA did not properly evaluate the effects of an oil spill on fishing and game, an issue that plaintiffs assert requires a deeper analysis in the form of an Environmental Impact Statement (“EIS”).  Again, the court found the EA’s errors were not incurable and would not require the Corps to completely redo its analysis because the agency already analyzed certain related issues and gathered data necessary to assess the project’s impacts on fish and game—in the court’s words “[o]n remand, the Corps must simply connect the dots.”  Moreover, the court noted, the Corps’ analysis of fish and game impacts will be made in light of the EA’s prior conclusion that the probability of an oil spill is low.  Accordingly, the court found there is a strong likelihood the Corps will uphold its prior determination on remand.
  • Environmental Justice: The court was most strongly persuaded by the plaintiffs’ environmental justice arguments (e., that the Corps failed to adequately analyze whether the current pipeline route would disproportionately impact low-income, minority communities), but nevertheless found in favor of the agency.  Although noting that the Corps must provide a fuller analysis on remand than its “bare-bones” conclusion that Standing Rock would not be disproportionately affected by an oil spill, the court found there is a substantial possibility the Corps would be able to justify its prior conclusion. The court disagreed with plaintiffs’ contention that environmental justice considerations necessitate an EIS, noting that the relevant NEPA guidance contemplates the use of an EA to evaluate such issues.  Moreover, the court found certain factors in the record (e.g., the minimal risk of an oil spill and relocation of Standing Rock’s water-intake structure), as well as the Corps’ previous determination that alternative routes may have greater environmental impacts, suggest the Corps may uphold its prior decision to prepare an EA. 

Disruptive Consequences

Next, the court considered the potential disruptive consequences of vacating the EA.  On balance, the court found that the second prong weighed only narrowly in defendants’ favor.

  • Economic Consequences: First, the court considered defendants’ contention that vacatur would cause numerous economic harms, such as lost profits, service disruptions, job losses, lost tax revenues, and impacts on consumers. The court agreed that financial injuries are relevant to its inquiry, rejecting plaintiffs’ assertion that economic concerns should be wholly disregarded.  Nonetheless, the court sought to minimize the weight accorded to defendants’ economic arguments for several reasons.  For example, the court noted there are inherent risks in an industry “fraught with bureaucracy and litigation.”  According to the court, Dakota Access knowingly assumed the risk of economic disruption by proceeding with its operations while the required easement was being challenged.  Furthermore, the court found defendants’ focus on economic harms ignored the potentially significant environmental consequences facing plaintiffs, noting that “[economic interests] do not inherently trump the risk of environmental disruption if vacatur is withheld.”  Finally, the court warned that denying vacatur to prevent economic harms may risk incentivizing companies and agencies to devote large amounts of resources to a project in order to immunize agency actions against vacatur on the basis of economic harm.  According to the court, such a result would be contrary to the purposes of NEPA.
  • Other Considerations: Next, the court rejected defendants’ argument that vacatur would require the pipeline to re-route its oil on trains, resulting in a higher risk of accidents and environmental injury.  The court found this argument speculative and unsupported by the record.  The court also rejected defendants’ assertion that vacatur is particularly disruptive in this case because construction of the pipeline has already been completed; the court pointed out that the plaintiffs do not seek to remove the pipeline, but rather to stop the flow of oil.  Finally, the court considered the timing of the remand process, finding that delays in the Corps’ review equally impacted both plaintiffs and defendants.

Conclusion

Plaintiffs alternatively requested that the court impose conditions on the continued operation of the pipeline in the event it declines to vacate the EA.  The October 11 opinion does not decide this issue, but gives defendants the opportunity to submit further abbreviated briefing to address the plaintiffs’ alternative request.

 

1   Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, No. 1:16-cv-01534-JEB (D.D.C. Oct. 11, 2017).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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