* Latham & Watkins LLP
* Janice M. Schneider , James L. Arnone and Drew C. Ensign
* February 22 2011
In a significant decision issued in mid-January 2011, the U.S. Court of Appeals for the Ninth Circuit (en banc) abandoned its categorical rule that a party may not intervene of right in the merits of a National Environmental Policy Act (NEPA) case. In doing so, the court overturned its decades-old rule that had severely limited and often prevented holders and beneficiaries of federally issued permits and approvals from participating as a party in the merits of lawsuits challenging the government’s compliance with NEPA. This limitation was inconsistent with the plain language of the federal intervention rules, ignored the significant investments and interests private parties have in seeking and obtaining federal authorizations for a vast array of projects, and conflicted with the Ninth Circuit’s test in favor of liberal intervention in all other cases. Most importantly, the limitation ignored the very real practical impairment that project proponents would suffer if the agency approval(s) were set aside. Project proponents now have the opportunity to demonstrate that they have the requisite interests to participate in the merits of NEPA lawsuits brought against the government, and a greater ability to assist the government in defending project approvals while protecting their own interests. All we can say is, its about time.
Intervention of Right Standard
Federal Rule of Civil Procedure 24(a) provides:
Intervention as of Right. Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by the existing parties.
From Rule 24(a), the Ninth Circuit distilled a four-part test for intervention of right:
(1) the motion must be timely; (2) the applicant must claim a "significantly protectable" interest relating to the property or transaction which is the subject of the action; (3) the applicant must be so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest; and (4) the applicant’s interest must be inadequately represented by the parties to the action.
Sierra Club v. EPA, 995 F.2d 1478, 1481 (9th Cir. 1993) (quotations marks and citation omitted). A interest is "protectable" if is "protected by some law." Id. (emphasis added). The Ninth Circuit further provides that "[t]he rule is construed broadly, in favor of the applicants for intervention." Id. (quotation marks omitted).1
Prior Ninth Circuit NEPA Rule
Despite taking a generally liberal view towards intervention, the Ninth Circuit adopted a unique rule for NEPA cases. In Portland Audubon Society v. Hodel, 866 F.2d 302, 309 (9th Cir. 1989), the Ninth Circuit held that "purely economic interests" were not protectable interests that could support intervention of right in NEPA actions. The Ninth Circuit later broadened those restrictions such that "no one but the federal government can be a defendant" in NEPA actions. Sierra Club, 995 F.2d at 1485; see also Churchill County v. Babbitt, 150 F.3d 1072, 1082, as amended by 158 F.3d 491 (9th Cir. 1998).
The Ninth Circuit drew these restrictions from the Seventh Circuit’s generally restrictive view towards intervention of right in all cases. The Ninth Circuit, however, did not apply this restrictive standard to any statute other than NEPA. Nor did the Ninth Circuit base this NEPA-specific approach on any statutory language in NEPA or the federal intervention rules.
The Ninth Circuit’s NEPA-specific standard conflicted with the standard of every other circuit that had reached the issue, including the Third, Fifth, Tenth and D.C. Circuits. See WildEarth Guardians v. U.S. Forest Serv., 573 F.3d 992 (10th Cir. 2009); Kleissler v. U.S. Forest Serv., 157 F.3d 964, 969-74 (3d Cir. 1998) (explaining that Ninth Circuit approach is a "wooden standard [that] minimizes the flexibility and spirit of Rule 24"); Sierra Club v. Espy, 18 F.3d 1202 (5th Cir. 1994); Wilderness Soc’y v. Morton, 463 F.2d 1261 (D.C. Cir. 1972).
This NEPA-specific rule produced anomalous results. For example, the holder of a federal permit was denied any ability to defend the issuance of that permit against challenge under NEPA. Recognizing this injustice, the Ninth Circuit pared back its NEPA-specific rule a bit, by permitting private parties to intervene of right in the remedies stage of NEPA litigation. See Forest Conservation Council v. U.S. Forest Serv., 66 F.3d 1496-97 (9th Cir. 1996). The limitations on intervention of right in the merits stage, however, was retained. Id.
Although the Ninth Circuit’s rule only applied to intervention of right,2 many district courts extended that categorical bar on intervention to permissive intervention under Rule 24(b) as well. See, e.g., Center for Food Safety v. Connor, No. 08-484, 2008 WL 3842889 (N.D.Cal. Aug 15, 2008); Center for Tribal Water Advocacy v. Gutierrez, 2007 WL 527932, *4 (D.Or. Feb. 12, 2007); Olympic Forest Coal. v. U.S. Forest Serv., No. 07-5344, 2007 WL 3374996, at *2-3 (W.D. Wash. Nov. 9, 2007).
Anarchy in the District Courts
Egged on by plaintiffs seeking to preclude participation by project proponents in other environmental litigation, many district courts in the Ninth Circuit began to extend the Ninth Circuit’s restrictions on intervention of right to other environmental statutes, over the objections of project proponents.3 Cases were broadly split, with other district courts refusing to extend the doctrine, but nonetheless driving up litigation issues and costs across a broad array of environmental statutes.4
Wilderness Society: Background
Wilderness Society began as a challenge under NEPA to a decision by the U.S. Forest Service. Specifically, two environmental groups filed suit against the adoption of a "travel plan" that allowed motorized vehicles to use some 1,196 miles of trails in Idaho’s Sawtooth National Forest. The environmental groups argued that the Forest Service’s failure to prepare an environmental impact statement (EIS) violated NEPA.
Three recreational groups, Magic Valley Trail Machine Association, Idaho Recreation Council and Blue Ribbon Coalition, Inc., sought to intervene of right to defend the validity of the Forest Service’s approval of the travel plan. Applying the Ninth Circuit’s "federal defendant" rule, the district court denied intervention of right, and then also denied permissive intervention. When the recreational groups’ motion was denied, they appealed to the Ninth Circuit.
The Ninth Circuit panel sua sponte asked the parties on July 13, 2010 to file supplemental briefs addressing "[w]hether this case should be heard en banc to decide if this court should abandon the ‘federal defendant rule,’ which prohibits private parties from intervening of right as defendants under Federal Rule of Civil Procedure 24(a) on the merits of claims arising under the National Environmental Policy Act." Following those briefs, the Ninth Circuit granted en banc review on September 30.
There was an outpouring of support for abandoning the Ninth Circuit’s restrictions on intervention of right in NEPA cases. As the Ninth Circuit noted, "no fewer than thirty-seven amici — including conservation, recreation and commercial groups, state and local governments, Indian tribes, regional water authorities, and the federal government, among others — argue that we should abandon our categorical prohibition …." Wilderness Society, 2011 U.S. App. LEXIS 734, at *10-11. Notably, even the plaintiffs did not formally oppose abandonment of the "federal defendant rule," but instead merely argued that Wilderness Society presented a poor vehicle for considering the issue. (The government also argued the case did not present the issue properly.)
Wilderness Society: Holding
The Ninth Circuit squarely abandoned its restrictions on intervention of right in NEPA cases in a unanimous opinion written by Judge Silverman. Indeed, that court forthrightly admitted the many errors underlying its prior standard:
The "federal defendant" rule runs counter to all of the above standards. In applying a technical prohibition on intervention of right on the merits of all NEPA cases, it eschews practical and equitable considerations and ignores our traditionally liberal policy in favor of intervention. It also fails to recognize the very real possibility that private parties seeking to intervene in NEPA cases may, in certain circumstances, demonstrate an interest "protectable under some law," and a relationship between that interest and the claims at issue. Courts should be permitted to conduct this inquiry on a case-by-case basis, rather than automatically prohibiting intervention of right on the merits in all NEPA cases.
Wilderness Society, 2011 U.S. App. LEXIS 734, at *14. The court further acknowledge that the rule conflicted with virtually every other court of appeals that had addressed the issue. Id. at *16-18.
Abandoning its prior rule, the Ninth Circuit substituted a standard under which "the operative inquiry should be, as in all cases, whether ‘the interest is protectable under some law,’ and whether ‘there is a relationship between the legally protected interest and the claims at issue.’" Id. at *5. Importantly, the court held that "[a] putative intervenor will generally demonstrate a sufficient interest for intervention of right in a NEPA action, as in all cases, if "it will suffer a practical impairment of its interests as a result of the pending litigation." Id. at *19. The Ninth Circuit therefore vacated and remanded so that the district court could reevaluate the recreation groups’ motion under its new standard. Id. at *18-19.
Implications Going Forward
Most obviously, Wilderness Society will permit intervention of right far more broadly in NEPA actions by removing the prior categorical bar and substituting a liberal standard that favors intervention. In addition, Wilderness Society should stop and reverse the trend of district courts precluding intervention of right in suits involving other environmental statutes or denying permissive intervention categorically in NEPA suits.
Wilderness Society should therefore allow much broader participation by individuals and groups that are likely to be affected by litigation. This is critically important as in many instances this will allow parties and counsel with greater familiarity and involvement in specific projects during the regulatory compliance stage (such as development of a proposed project’s EIS) to contribute to resolving the litigation. And this in turn should lead to better judicial decision making, consistent with the purposes underlying Federal Rule of Civil Procedure 24. See County of Fresno v. Andrus, 622 F.2d 436, 438 (9th Cir. 1980) (the interest test is primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process).
In some instances, Wilderness Society will permit private parties to advance arguments that the government was not inclined to make. In recent litigation concerning genetically modified sugarbeets, for example, the government declined to raise a laches defense despite plaintiffs’ nearly three-year long delay in filing suit. See Center for Food Safety v. Vilsack, No. 08-484, 2009 WL 3047227, at *9 n.4 (N.D. Cal. Sept. 21, 2009). In that case, while the owner of the intellectual property and growers of the crop applied for intervention, the district court categorically denied both intervention of right and permissive intervention — allowing the permit holders to participate only as amici, who were not permitted to take discovery on or otherwise pursue the laches defense. In other instances, this may take the form of advancing different statutory or record-based arguments.
The Wilderness Society decision may also affect the tendency of district courts to bifurcate NEPA actions into merits and remedies phases. This approach paralleled the Ninth Circuit bifurcation previously recognized for intervention, which gave the intervenor a clear role in the remedy, if any, that should be applied if a NEPA violation was found. Instead, district courts may increasingly ask for briefing on both merits and potential remedies issues to be combined, although intervenors should be vigilant in pressing for a remedies phase if necessary given prevailing case law. See, e.g., Monsanto Co. v. Geertson Seed Farms, 130 S. Ct. 2743, 2756 (2010) ("The traditional four-factor test applies when a plaintiff seeks a permanent injunction to remedy a NEPA violation"); Northern Cheyenne Tribe v. Hodel, 851 F.2d 1152, 1158 (9th Cir. 1988) (NEPA "does not show a congressional intent to foreclose equitable balancing by a court enforcing its requirements"); High Sierra Hikers Ass’n v. Blackwell, 381 F.3d 886, 898-99 (9th Cir. 2004) (affirming limited, "fair and balanced" NEPA injunction where district court expressly "balanced the environmental and economic concerns").5
Another major impact is that intervenors will now be able to appeal of the merits of NEPA decisions even when the government declines to file its own appeal. From a private project proponent’s perspective, this can be critically important because the result of a government decision to not appeal from an adverse decision may be years of additional NEPA review and associated significant costs. Indeed, reversing a litigation loss can mean the difference in a successful project versus an abandoned one.
This change may have other foreseeable consequences: (1) there may be a noticeable increase in the Ninth Circuit’s NEPA docket, and (2) the government’s ability to act strategically by restricting the NEPA cases it appeals to the Ninth Circuit will likely be diminished. As a result, more NEPA cases may reach the Supreme Court on the merits. Notably, two of the government’s recent victories in Supreme Court environmental cases were in cases where intervenors successfully sought Supreme Court review over the government’s opposition. See Monsanto Co. v. Geertson Seed Farms, 130 S. Ct. 2943 (2010);6 Entergy Corp. v. Riverkeeper, Inc., 129 S. Ct. 1498 (2009).
Now that the Ninth Circuit has abandoned the "federal defendant" rule, project proponents can expect to more significantly and directly influence NEPA and other environmental litigation in order to protect their interests.