Dissent by Judge GOULD.
Judges Farris and Nguyen voted to deny the petition for rehearing. Judge Nelson voted to grant the petition for rehearing. Judge Nguyen voted to deny the petition for rehearing en banc, and Judge Farris so recommended. Judge Nelson recommended granting the petition for rehearing en banc.
The full court was advised of the petition for rehearing en banc. A judge requested a vote on whether to rehear the matter en banc, and the matter failed to receive a majority of the votes of the nonrecused active judges in favor of en banc consideration. Fed. R.App. P. 35.
The petition for panel rehearing and the petition for rehearing en banc are
GOULD, Circuit Judge, with whom W. FLETCHER and CALLAHAN, Circuit Judges, join, dissenting from the denial of rehearing en banc:
I respectfully dissent from denial of rehearing en banc in this case, which concerns decisions by the Bureau of Safety and Environmental Enforcement (BSEE)
The majority's decision in this case encourages federal agencies to abrogate their oversight by deciding that a statute's requirements limit their discretion to the point of taking the ESA and NEPA off the table. The majority invites federal agencies to ignore their ESA and NEPA obligations, await a challenge, and then defend their inaction under the guise of Chevron deference. However, the federal courts should not be so eager to accept, under the guise of Chevron, an agency decision that violates existing case law interpreting the ESA and NEPA, as well as the very logic of those statutes. Chevron was meant to prevent courts from imposing their own construction of a statute where Congress has not "directly addressed the precise question at issue." Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Instead, courts should defer to an agency's "permissible interpretation of a statute." Id. Chevron was not meant to force courts into deferring to an agency's contention that it lacks discretion over statutorily mandated requirements. Such a ruling invites abrogation of statutory responsibilities.
A central flaw in the majority's decision is that it finds an ambiguity in 33 U.S.C. § 1321(j)(5) where none exists. According to this statute, part of the 1990 amendments to the CWA passed after the Exxon Valdez disaster, an oil company's oil spill response plan must show that the company is capable of "responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance." 33 U.S.C. § 1321(j)(5)(A)(i). To comply, the proposed plans must meet six specific requirements. 33 U.S.C. § 1321(j)(5)(D). The statute then directs that the President "shall" take several actions after an oil company submits its plan: "promptly review" it, "require amendments" to a plan that does not meet the statutory requirements, and "approve any plan" that does meet the requirements. 33 U.S.C. § 1321(j)(5)(E). According to the majority, the "shall" language suggests that BSEE "must approve" any conforming plan, and thus has no discretion over the adequacy of the plans. Alaska Wilderness League v. Jewell, 788 F.3d 1212, 1220 (9th Cir.2015) (emphasis in original). This led the majority to find an ambiguity in the statute: "It is unclear how the broad language of section 1321(j)(5)(A)(i), with its reference to the `maximum extent practicable,' interacts with the finite statutory criteria of section 1321(j)(5)(D)." Id. "And that means we . . . face a statute whose
However, there is no ambiguity in the statute that warrants Chevron deference. The CWA amendments unambiguously give BSEE discretion over oil spill response plan approval. Section 1321(j)(5)(A)(i) requires an oil spill response plan to respond "to the maximum extent practicable to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance." According to the majority, "the open-ended nature of [this] phrase . . . suggests agency discretion." Alaska Wilderness, 788 F.3d at 1220. The majority agreed with Judge Nelson, who dissented, that this portion of the statute could be read to "serve[ ] as an independent `standard' that must be met in addition to the list of enumerated requirements at § 1321(j)(5)(D)." Id. at 1222, 1229 (Nelson, J., dissenting) ("[T]he phrase `maximum extent practicable' . . . has a superlative quality and therefore must refer to the greatest option in a range of possibilities.").
The majority is wrong that the statute's "halves do not correspond to each other." Id. at 1220. Like the broad language in § 1321(j)(5)(A)(i), one of the six explicit criteria requires removal of a worst case discharge "to the maximum extent practicable." 33 U.S.C. § 1321(j)(5)(D)(iii). Accepting the majority's conclusion that this phrase "suggests agency discretion," there is no ambiguity entitling BSEE to Chevron deference on the issue of its discretion, because the phrase appears in both parts of the statute. See Chevron, 467 U.S. at 842, 104 S.Ct. 2778 ("If the intent of Congress is clear, that is the end of the matter . . . ."). The majority ignored that the statute's specific requirements include the same phrase as the statute's introduction, which the majority and dissent agreed suggests agency discretion over response plan approval.
As explained more fully below, this case is unlike Home Builders because the statutory duty at issue does not restrict BSEE's discretion over approval of oil spill response plans. The majority makes much of the statute's requirement that BSEE "shall" approve any plan that "meets the requirements of this paragraph," but it ignores the substance of those requirements. 33 U.S.C. §§ 1321(j)(5)(E)(i) & (iii). The requirements do not constitute mere "triggering events," as in Home Builders; they require a thorough evaluation of a response plan. Home Builders, 551 U.S. at 669, 127 S.Ct. 2518.
First, one of statute's explicit requirements is that response plans must "be consistent with the requirements of the National Contingency Plan [NCP] and Area Contingency Plans." 33 U.S.C. § 1321(j)(5)(D)(i). The NCP contains numerous phases of operational responses to a spill, including a special response to worst case discharges, see 40 C.F.R. §§ 300.300-300.335, and includes several protections for endangered species. See, e.g., 40 C.F.R. § 300.135(k). The NCP also requires that environmental evaluations "be performed to assess threats to the environment, especially sensitive habitats and critical habitats of species protected under the [ESA]." 40 C.F.R. § 300.430(e)(2)(i)(G). However, the majority does not explain how BSEE could determine whether a response plan meets the NCP's numerous independent requirements if BSEE's oversight role is truly just to check the boxes in a "checklist." Alaska Wilderness, 788 F.3d at 1220. Whether an oil company's oil spill response plan is "consistent with the requirements
Second, the CWA amendments require that a company's response plan "remove. . . a worst case discharge," specifically defining the term "remove" to mean "containment and removal of the oil . . . from the water and shorelines or . . . such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare, including . . . fish, shellfish, wildlife, and public and private property, shorelines, and beaches." 33 U.S.C. § 1321(a)(8). Whether an oil spill response plan provides the means to "remove" a worst case discharge is also a question that requires evaluation of the plan—it is not simply a "triggering event[ ]." Home Builders, 551 U.S. at 669, 127 S.Ct. 2518.
Third, other sections of the CWA governing the federal government's spill plans, 33 U.S.C. §§ 1321(d)(1)-(2) & (j)(4)(B)-(D), contain the same "shall" language as the sections governing oil spill response plans, yet are undisputedly subject to ESA consultation. The majority asserts that "[t]hese provisions . . . are different," but does not say why. Alaska Wilderness, 788 F.3d at 1224. The majority tries to distinguish § 1321(d)(1), which requires the President to prepare and publish an NCP, by claiming that "[n]othing in the text prohibits such a plan from being prepared in light of concerns that an ESA consultation might raise." Id. But the majority does not explain why its analysis of the statute at issue here looks for explicit mention of ESA consultation whereas its analysis of a parallel provision looks for an explicit prohibition on ESA consultation. It is the majority's inconsistent textual analysis, not any meaningful distinction in CWA provisions, that produces these contrary results.
Fourth, the majority attempts to distinguish response plan approval from the NCP, which according to the statute should "include, but not be limited to" a number of factors "that might be deemed necessary after an ESA consultation occurs," including "water pollution control and conservation and trusteeship of natural resources (including conservation of fish and wildlife)." 33 U.S.C. § 1321(d)(2); Alaska Wilderness, 788 F.3d at 1224. This argument by the majority apparently is intended to bolster its conclusion that unlike the NCP, 33 U.S.C. § 1321(j)(5)(E) "leaves no room for the inclusion of additional factors." Alaska Wilderness, 788 F.3d at 1224. But the majority does not mention that, as explained above, one of the very requirements BSEE must consider before approving an oil spill response plan is its "consisten[cy] with the requirements of the [NCP]." 33 U.S.C. § 1321(j)(5)(D)(i); Alaska Wilderness, 788 F.3d at 1224. It is unavailing to distinguish response plan approval from the supposedly more broad-based NCP, when consistency with the NCP is one of the factors to be considered in approving an oil spill response plan.
Fifth, as the dissent explained, BSEE's implementing regulations make clear that the agency can exercise its discretion to benefit protected species. Alaska Wilderness, 788 F.3d at 1228 (Nelson, J., dissenting). For example, the regulations require operators to identify resources of "environmental importance" that could be harmed by a "worst case discharge scenario," and to provide strategies to protect them. 30 C.F.R. §§ 254.26(a), (c). The regulations also require operators to identify procedures to "protect beaches, waterfowl, other marine and shoreline resources, and areas of special . . . environmental importance." 30 C.F.R. § 254.23(g)(4). The majority does not explain how BSEE's cursory review of an oil spill response plan could be consistent with the agency's own regulations.
BSEE reasoned that its implementing regulations define "maximum extent practicable" as "within the limitations of available technology, as well as the physical limitations of personnel, when responding to a worst case discharge in adverse weather conditions." 30 C.F.R. § 254.6; Federal Defendants' Opposition to Rehearing En Banc at 12-13. According to BSEE, nothing in this language gives it the discretion to consider a wide range of factors consistent with the general meaning of the word "maximum." Id. at 12. That argument persuaded the majority. But Judge Nelson's dissent persuasively explains the unreasonableness of this reasoning. See Alaska Wilderness, 788 F.3d at 1229 (Nelson, J., dissenting). Even under BSEE's definition of "maximum extent practicable," BSEE must determine whether Shell's response plans met the standard. And, as even the majority reasoned, the term "maximum extent practicable" "suggests agency discretion because of [its] open-ended nature. . . ." Id. at 1220.
Finally, further evidence that the CWA amendments contemplated active review comes from 33 U.S.C. §§ 1321(j)(5)(E)(ii) & (iii), which direct BSEE to "require amendments to any plan that does not meet the requirements of this paragraph," or to approve a plan that does meet them. That Congress has given BSEE the responsibility to decide whether an oil spill response plan meets the statutory criteria, and has directed the agency to require amendments to nonconforming plans, is further evidence that the statute imparts discretion. Nowhere does the majority explain why Congress would task BSEE with requiring amendments to a nonconforming plan if it truly sought to cabin the agency's discretion or to make the requirements of the CWA amendments mere "triggering events." Home Builders, 551 U.S. at 669, 127 S.Ct. 2518.
The approval process for oil spill response plans requires agency discretion. It was wrong to grant BSEE Chevron deference on this issue.
Two flawed holdings flow from the majority's erroneous Chevron determination. Specifically, the majority narrowed the application of both the ESA and NEPA. First, the majority's approach sets a dangerous precedent for ignoring ESA § 7. Undisputedly, ESA consultation is only required when an agency takes a "discretionary" action. 50 C.F.R. § 402.03. As explained above, however, response plan approval pursuant to the requirements of 33 U.S.C. § 1321(j)(5)(D) is discretionary because it requires BSEE to analyze whether the requirements have been met. BSEE should therefore be required to consult under the ESA. The majority concluded otherwise based on its incorrect analogy to Home Builders. At issue in Home Builders was a requirement in CWA § 402(b) that the Environmental Protection Agency (EPA) "shall approve" a transfer of CWA permitting authority from the federal government to a state upon a showing that the state had met nine specified criteria.
However, this case differs from Home Builders for at least three reasons. First, Home Builders hinged partially on the fact that the ESA was passed after the CWA, and did not explicitly overrule CWA § 402(b). Home Builders, 551 U.S. at 662, 127 S.Ct. 2518. But here, 33 U.S.C. § 1321(j)(5) postdates the ESA by seventeen years. There is no concern here, as there was in Home Builders, that ESA consultation would implicitly amend a prior statute.
The second distinction is that in Home Builders, the parties appeared to agree that the state had authority to perform each of the nine enumerated functions in CWA § 402(b). Home Builders, 551 U.S. at 672, 127 S.Ct. 2518 ("[T]here is no dispute that Arizona has satisfied each of those statutory criteria"); see also Alaska Wilderness, 788 F.3d at 1229 (Nelson, J., dissenting). The parties' disagreement was instead about whether ESA consultation added an extra step to transfer of permitting authority. Here, the question is not whether the ESA adds an extra step to the approval process, but how much discretion there is in the existing steps of 33 U.S.C. § 1321(j)(5)(D). On this the parties do not agree. This distinction means that although Home Builders is controlling precedent, its particular out-come does not bind this case.
Third, the conditions in § 1321(j)(5)(D) that must be met for response plan approval are substantively different than the conditions for state permitting authority in Home Builders. There, the Supreme Court characterized the conditions as "triggering events" with a mechanical cause and effect. Home Builders, 551 U.S. at 669, 127 S.Ct. 2518. Arizona had to show that it had the ability to perform nine specific tasks. Once it had done so, the agency had no choice but to transfer CWA permitting authority. Id. at 669, 127 S.Ct. 2518. This reading is consistent with the Supreme Court's conclusion that CWA § 402(b) imposed nondiscretionary requirements on EPA. Id. at 661, 127 S.Ct. 2518. Here, as explained above, the requirements are not simple enough to be considered mere "triggering events." Id. at 669, 127 S.Ct. 2518. They require evaluation of whether an oil spill response plan actually meets, for example, the requirement that it be consistent with the NCP, or the requirement that it ensure the availability of personnel and equipment necessary to remove a worst case discharge to the "maximum extent practicable." 33 U.S.C. §§ 1321(j)(5)(D)(i), (iii).
By not correcting the majority's holding through en banc rehearing, we have permitted
The majority's decision also misapplies NEPA precedent. NEPA requires federal agencies to prepare an EIS for all "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). In a narrow exception, NEPA does not apply where an agency lacks the discretion to consider environmental values in its decision making process. See Dep't of Transp. v. Public Citizen, 541 U.S. 752, 767-69, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004). Here, the majority held that BSEE reasonably concluded that it "must approve any [response plan] that meets the statutory requirements." Alaska Wilderness, 788 F.3d at 1225. "Thus, even assuming, without deciding, that BSEE's approval of Shell's [response plans] constitutes a `major Federal action,' its approval is not subject to NEPA's requirements." Id. The majority analogized this case to Public Citizen, where the governing statute required the Federal Motor Carrier Safety Administration (FMCSA) to register a person to provide transportation as a motor carrier if it found the person willing and able to comply with the statute's requirements. Public Citizen, 541 U.S. at 766, 124 S.Ct. 2204. NEPA review was not required in Public Citizen because the agency lacked the power to consider environmental consequences outside its statutory obligation. Id. at 768-70, 124 S.Ct. 2204.
The majority's analogy to Public Citizen is unsupported. As explained above, § 1321(j)(5)(D) imposes a discretionary duty on BSEE. In Public Citizen, the Supreme Court held that FMCSA did not have to account for certain environmental effects in its environmental assessment because it had "no ability to countermand" executive action by the President, so its action did not have a "reasonably close causal relationship" to any negative environmental impacts. Public Citizen, 541 U.S. at 766-67, 124 S.Ct. 2204. That is not the case here, because BSEE does have the authority to consider environmental values in its decision-making process. BSEE's approval of response plans is discretionary, and it would provide a "reasonably close causal relationship" between the agency action and environmental effects, including a "worst case discharge," stemming from a potential spill. See Public Citizen, 541 U.S. at 767, 124 S.Ct. 2204; 33 U.S.C. § 1321(j)(5)(A)(i).
I agree with the majority that the ESA and NEPA do not require an agency to provide redundant analysis. NEPA and its implementing regulations accommodate this concern by allowing agencies to take a "tiered" approach to environmental review. See 40 C.F.R. § 1502.20 (encouraging tiering of NEPA review). We have also allowed for tiering of ESA review. See Gifford Pinchot Task Force v. U.S. Fish & Wildlife Serv., 378 F.3d 1059, 1067-68 (9th Cir.2004). Thus, BSEE's NEPA and ESA review of the proposed approval of Shell's oil spill response plans need not be burdensome or redundant if the foreseeable impacts of approving the plans, and reasonable alternatives, were already addressed in an EIS and biological opinion completed at an earlier stage of development. If this were the case, BSEE could, for example, prepare a shorter environmental assessment tiered to the earlier EIS to satisfy NEPA. See 40 C.F.R. § 1508.9 (describing an environmental assessment). Here, the majority does not address whether BSEE satisfied NEPA and the ESA through tiered environmental review. Rather, the majority rules that oil spill response plan approval is exempt from the ESA and NEPA altogether.
It is true that BSEE reviewed Shell's oil spill response plans only after other higher-level planning activities, including preparing an EIS for each of its five-year leasing programs and preparing a biological opinion evaluating the likelihood that drilling will jeopardize species protected by the ESA. See, e.g., NMFS, Beaufort and Chukchi Seas Biological Opinion, http://goo.gl/YECHFu. But an oil spill response plan may raise significant environmental risks beyond those analyzed at a granular level at a previous stage of development. For example, alternative means of containing an oil spill, such as the controversial use of dispersants, may themselves significantly impact listed species, other environmental resources, and the safety of first responders and the public to varying degrees. Review of these risks and of alternative response actions would not be redundant or duplicative if they were not considered in a previous EIS and biological opinion. Indeed, the higher planning levels govern the whole gamut of offshore drilling operations. Oil spill response plans—while nominally a "lower," implementation-level action—are the first component to be deployed when a spill actually happens. It is ill-advised for the court to accept, under the guise of Chevron, BSEE's refusal to complete NEPA and ESA review of these plans, especially since these plans may not be as effective in redressing spills and preserving the environment as they could be with environmental
I also emphasize this case's importance notwithstanding Shell's recent suspension of its Arctic drilling program. Although the program is on hold, and the administration has recently canceled existing Arctic lease sales, oil markets are cyclical and it is all but certain that higher future oil prices, a warming Arctic, or both will once again make drilling in the Arctic cost-effective. The Department of the Interior's latest five-year drilling plan still includes offshore lease sales in Alaska. Whenever Shell begins its Arctic drilling permitting process again, BSEE will give Shell's oil spill response plans the same cursory review it did here. If this case is not corrected by Supreme Court review, it will have two severe consequences. First, it will preclude judicial review of oil spill response plans when Shell's Arctic drilling plans resume. In light of BSEE's obvious reluctance to give the term "maximum extent practicable" its natural meaning in 33 U.S.C. §§ 1321(j)(5)(A)(i) & (j)(5)(D)(iii), it is undeniable that Shell's oil spill response plans will not be as responsive to the needs of endangered and threatened species as they would be with ESA consultation. And it is all but certain that BSEE's review of the response plans—the first line of defense in the event of a major oil spill—will be far more cursory than it would be if the public process, review of foreseeable impacts, and consideration of alternatives necessary under NEPA were provided.
Second, and equally important, our court now has chosen to accept an agency's own opinion about the scope of its discretion in order to make this case fit into the narrow exceptions of Home Builders and Public Citizen. By ignoring our proper role in this litigation, we have enabled BSEE's abrogation of its oversight role over response plan approval, and we have invited other federal agencies to do the same any time a statutory duty could arguably be cast as "mandatory" or "nondiscretionary." The message we send to agencies, and to oil companies, is "we trust you and will rely on your judgment without review by federal agency experts and public input." This is not the role envisioned by Congress when it passed the 1990 CWA amendments, which require an oil spill response plan to demonstrate its ability to respond, "to the maximum extent practicable, to a worst case discharge," or when it passed the ESA, which requires "[e]ach Federal agency" to consult with federal wildlife agencies to "insure that any action authorized, funded, or carried out by such agency" is not likely to jeopardize protected species or adversely modify their critical habitat. 33 U.S.C. § 1321(j)(5)(A)(i); 16 U.S.C. § 1536(a)(2). It is not the role envisioned by NEPA, which mandated that "all agencies" shall utilize a "systematic, interdisciplinary approach" in planning and decision making, and shall prepare an EIS for all major federal actions significantly affecting the human environment, which include "any irreversible and irretrievable commitments of resources which would be involved in the proposed action should it be implemented." 42 U.S.C. § 4332. It is not the role for the courts Chevron envisioned by approving deference to an agency's "permissible construction of the statute" only in response to statutory ambiguity. Chevron, 467 U.S. at 843, 104 S.Ct. 2778.
Although this case deals with a complicated regulatory framework, at bottom it turns on simple answers to simple questions: If an oil company submits an oil spill response plan to BSEE, does the federal government have discretion to consider alternative response actions in order to ensure that any approved plan responds to a worst case spill to the maximum extent practicable? Could alternative methods
By not correcting the majority's holding through en banc review, we have let stand a decision that misapplies core principles of administrative and environmental law, and have set a dangerous precedent of deferring to a federal agency's view of its own discretion, even when a statute is not ambiguous. I respectfully dissent.