WILLIAM J. MARTINEZ, District Judge.
This matter is before the Court on Plaintiff National Ski Areas Association, Inc.'s ("NSAA" or "Plaintiff") Amended Complaint ("Complaint"). (ECF No. 8.) The Complaint seeks judicial review of the March 6, 2012 directive (the "2012 Directive"), promulgated by the United States Forest Service ("Forest Service" or "Defendants").
The Court has jurisdiction over this matter under 28 U.S.C. § 1331 (federal question), and 5 U.S.C. §§ 701-706 (the Administrative Procedure Act ("APA")).
The Defendant Forest Service authorizes ski areas to operate on National Forest System lands pursuant to long-term special use permits ("Ski Area Permits"). These permits are issued under federal law. 16 U.S.C. §§ 497, 497b, 497c. Throughout the United States, there are approximately 121 ski areas on National Forest System ("NFS") lands. (ECF No. 15-5 ¶ 2.) These ski areas span 13 states. (Id.)
This case involves Defendant's 2012 Directive — a water rights directive that is inserted into Ski Area Permits when such permits are modified or terminated. (AR 00524-26.) Ski areas rely on water rights for snowmaking, domestic uses, and other purposes. (ECF No. 15-5 ¶ 5). Snowmaking is critical to ski area operations. Most ski areas could not operate in an economic or efficient manner without water rights for snowmaking. (AR 00147; ECF No. 15-5 ¶ 5.)
Forest Service Ski Area Permits do not confer water rights on the permit holder. (AR 00018, 00658, 00664.) Ski Area Permit holders must acquire water rights for use on NFS lands for snowmaking and other purposes under state law at their own expense. (ECF No. 15-56-7; AR 00658, 00660, 00664.) Many ski areas on NFS lands have acquired water rights under state law for use in snowmaking and in other operations. (AR 00141, 00234; ECF No. 15-5 ¶¶ 7-10.)
The Forest Service issued special use permits for most ski areas nationwide in the 1960s and 1970s pursuant to Ski Area Permits that did not require ski areas to acquire water rights in the name of the United States. (AR 00608-644.) Nor did these permits transfer water rights to the United States as a condition of the permit. (Id.)
In 1982, Region 2 of the Forest Service — covering Colorado and Wyoming — adopted a Ski Area Permit clause that provided: "All water rights obtained for
In 1989, Region 2 adopted a new clause that provides: "All water rights acquired by the Holder during the term of this authorization which involve the diversion of water from National Forest System Lands, to the extent the same are applied to beneficial uses on National Forest System lands, shall be acquired in the name of or transferred to the United States. Such transactions are subject to the holder's right of use." (AR 00122 (the "Acquire and Transfer Clause")). Again, Region 2 of the Forest Service inserted this clause into some, but not all, Ski Area Permits. (AR 00612-622.)
In 1997, the Forest Service adopted its first national water rights clause, dubbed "X-99," which provides: "All water rights obtained by the holder for use on the area authorized must be acquired in the name of the United States." (AR 00071, 75, 79.) The Forest Service inserted this clause into some, but not all, Ski Area Permits. (AR 00608-644.) The "X-99" clause was controversial.
In April 2002, the White River National Forest ("WRNF") in Colorado adopted the X-99 clause as a binding standard in its applicable Land and Resource Management Plan ("Forest Plan"), which would give the standard the full force and effect of law under the National Forest Management Act, 16 U.S.C. § 1604(i). (Supp AR 000053.) NSAA members administratively appealed the Forest Plan water standard on the grounds that it was an illegal uncompensated taking and was arbitrary and capricious. (Supp AR 000028-38.)
In September 2004, the Chief of the Forest Service reversed the WRNF Forest Plan "X-99" standard, and directed the WRNF Forest Plan be amended to remove the water standard. (Supp AR 000026-27.) The Department of Agriculture affirmed the Chief's decision in December 2004. (Supp AR 000012-25.)
The record shows that over three decades, the Forest Service did not follow a uniform policy, and did not require federal ownership of water rights in all Ski Area Permits. (AR 00524-526, 531, 608-644.) Lack of federal ownership is reflected by the many ski areas which obtained water rights without naming the United States as owner. (AR 00215-216, 00234.)
In response to the controversy over X-99 clause, the Forest Service consulted 4 with NSAA in 2003 and 2004 and adopted a new half-page water rights clause for Ski Area Permits (the "2004 Clause"). (AR 00068-70.) The 2004 Clause provides: "[a]fter June 2004, any right to divert water from the permitted National Forest System land where the use of such water is on the same permitted National Forest System land shall be applied for and held in the name of the United States and holder." (AR 00070.) Under the 2004 Clause, ski areas were free to keep existing water rights they had already acquired and perfected. (AR 00070.)
The Forest Service invited ski areas on Forest Service lands nationwide to incorporate the 2004 Clause into their permits; thus replacing the unenforced prior clauses. (AR 00255 ("The USFS will insert the new clause into existing 1986 Act special use permits upon request by a resort, and the clause will replace existing water clauses in those permits.").) Approximately 79 NSAA ski areas on Forest Service lands have the 2004 Clause. (AR 00526.) Approximately 32 ski areas have Ski Area Permits that do not require any federal ownership of ski area water rights. (AR 00524-526.)
On November 8, 2011, the Forest Service Associate Deputy Chief James M. Peña exercised delegated authority of the Chief of the Forest Service and issued the seven page Forest Service Interim Directive 2709.11-2011-3 ("2011 Directive"). (AR 00036-44.) The 2011 Directive addressed ownership of water rights used within Ski Area Permit boundaries. (AR 00036.)
Since the Forest Service issued the 2011 Directive on November 8, 2011, the Forest Service issued three ski area special use permits under the 1986 Ski Area Permit Act
The 2011 Directive was short-lived because, soon after NSAA filed this lawsuit seeking judicial review of the 2011 Directive, Associate Deputy Chief Peña replaced the 2011 Directive with Interim Directive Number 2709.11-2012-2 (the "2012 Directive"), effective March 6, 2012. (AR 00024-32; ECF No. 53 Exh. 2.) Plaintiff seeks judicial review of the 2012 Directive in this action.
Although the Forest Service made minor changes to the 2011 Directive, the 2012 Directive is substantively the same as the 2011 Directive. (Cf. AR 00036-44 with AR 00024-32.) The 2012 Directive provides that Forest Service employees must insert the 2012 Directive into ski area special use permits when the permits are reissued or modified. (AR 00024-32; ECF No. 53 Exh. 2.)
Under the 2012 Directive, water rights are treated differently depending on where, when, and how they are acquired. (AR 00024-32.) Relevant clauses of the 2012 Directive that were directly in dispute between the parties can be found in ECF No. 53 Exh. 2.
Although the parties addressed many of the clauses in the 2012 Directive, it is worth summarizing some of the more pertinent clauses that are subject to the present dispute. For instance, paragraph F.2.d provides that when the permit is not reauthorized, the 2012 Directive forces permit holders to "transfer the holder's interest in water rights that are jointly owned .... to the United States." (AR 00031; ECF No. 15, Exh. 1 ¶ F.2.d.)
In paragraph F.2.e, the 2012 Directive provides that permit holder "grant" the United States a "limited power of attorney." (Id. Exh. 1 ¶ F.2.e.) This clause is designed so that the United States may "execute any document necessary to transfer water rights to the succeeding permit holder or the United States", or to "correct any failure to ensure that water rights [are] jointly held by the United States and the permit holder" (the "Power of Attorney Clause"). (AR 00031; ECF No. 15, Exh. 1 ¶ F.2.e.)
There are approximately 121 Ski Area Permits in effect today. (AR 00524.) The record shows that the Forest Service has not enforced a consistent water rights policy with those 121 Ski Area Permits. (AR 00526.) The Forest Service reports that thirty-two permits (26%) "do not require any U.S. ownership interest," seventy-nine (65%) have the 2004 Clause, seven (6%) require sole federal ownership, and three (2.5%) have the 2011 Clause. (AR 00526.)
The record also demonstrates that there is significant variation in permit terms over time for each ski area, and that all permits in effect at any given time have not had uniform water clauses. (AR 00608-644.) For example, it appears that the Forest Service has inserted the terms of the 2012 Directive into at least one NSAA-member's Ski Area Permit. (ECF No. 43-1 ¶ 3.)
The Forest Service's authority to manage lands under its jurisdiction derives from the Property Clause of the United States Constitution. The Property Clause empowers Congress to "make all needful Rules and Regulations respecting the ... Property belonging to the United States." U.S. Const. art. IV, § 3, cl. 2.
One of the first statutes Congress enacted relating to national lands was the Organic Act. That statute entrusts the Forest Service with authority to "make such rules and regulations" as necessary to regulate the "occupancy and use" of the national forests and to preserve them from destruction. 16 U.S.C. § 551.
Subsequent to the Organic Act, Congress has reiterated the authority of the Forest Service to regulate and condition the use and occupancy of NFS lands. See, e.g., Term Permit Act of 1915, 16 U.S.C. § 497 (authorizing the Secretary of Agriculture to permit use and occupancy of NFS lands "upon such terms and conditions as he may deem proper"); Multiple Use-Sustained Yield Act ("MUSYA"), 16 U.S.C. §§ 528-531 (authorizing the Secretary of Agriculture to develop and administer the surface resources of the national forests to provide for five multiple uses, including "outdoor recreation, "in perpetuity"); see also Federal Land Policy and Management Act ("FLPMA"), 43 U.S.C. § 1765.
In 1986, Congress directly addressed the Forest Service's authority to allow development of ski areas on NFS lands. In the National Forest Ski Area Permit Act of 1986 ("Ski Area Permit Act"), Congress provided that permits are to be issued "subject to such reasonable terms and conditions
On January 9, 2012, NSAA filed its original Complaint against the United States Forest Service, United States Department of Agriculture, and Harris Sherman, the Under Secretary for Natural Resources and Environment at the Department of Agriculture. (ECF No. 1.) The original Complaint sought judicial review of the Forest Service's 2011 Directive. (Id.)
On March 12, 2012, shortly after the Forest Service replaced the 2011 Directive with the 2012 Directive, Plaintiff filed an Amended Complaint seeking judicial review of the 2012 Directive. (ECF No. 8.)
In its Amended Complaint, Plaintiff seeks the issuance of a nationwide injunction to set aside the 2012 Directive under the Administrative Procedures Act ("APA"), 5 U.S.C. §§ 706(2) et seq. Plaintiff contends that the 2012 Directive is in excess of the Forest Service's statutory authority, compels an uncompensated taking of private property, was issued in violation of the Regulatory Flexibility Act ("RFA") 5 U.S.C. §§ 603 et seq. and was adopted without public notice or an opportunity to comment as required by both the APA and the National Forest Management Act ("NFMA"). See 16 U.S.C. §§ 1612 et seq. As to the substantive claims as previously noted, the Court has exercised it discretion not to address these claims,
Defendants filed the administrative record. (ECF Nos. 13, 14.) The parties fully briefed the issues and the Court held a hearing on November 15, 2012.
Standing under Article III of the Constitution requires: (1) an "injury in fact" that is "concrete and particularized"; (2) a "causal connection between the injury and the conduct complained of"; and (3) a likelihood that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Kerr v. Hickenlooper, 880 F.Supp.2d 1112 (D.Colo. 2012).
Defendants argue that Plaintiff lacks standing to pursue its procedural claims under the APA and NFMA.
Here, the Court finds that Plaintiff has Article III standing on its procedural APA and NFMA claims. The harmless error doctrine that Defendants assert is narrow and applies to technical or minor procedural violations, not total failures to comply with important rule-making processes. See, e.g., Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1487 (9th Cir. 1992) ("we must exercise great caution in applying the harmless error rule in the administrative rule-making context ... if the harmless error rule were to look solely to result, an agency could always claim that it would have adopted the same rule even if it had complied with the APA
Defendants argue, however, that they provided NSAA with input opportunities that went "far beyond" what the APA requires because the Forest Service met with NSAA, e-mailed with NSAA, and provided NSAA with an early draft of its proposed 2011 Directive. (ECF 37 at 18.) But, as the record demonstrates, the ability to communicate informally with an agency does not lawfully substitute for what the APA requires. The injuries incurred by the Plaintiff — and the relevant sections of the record — are well summarized as follows:
(See, Plaintiff's Facts and Conclusions, ECF No. 58 at 19-20.)
In light of the above, the harmless error doctrine is especially inappropriate where, as here, the rule in question involves complex matters,
Article III standing also requires causation, which is easily satisfied here because
Defendants finally argue that Plaintiff cannot demonstrate that its procedural injury is redressable because it cannot show how it could have commented differently had Defendants fully complied with the APA. (ECF No. 37 at 16-19.).
This argument is rejected for two reasons: (1) the APA deficiencies going to "legal basis" are, inter alia, significant. (ECF 39-12 ¶ 7) Had Defendants complied with this requirement, Plaintiff would have been able to comment on the 2012 Directive far more effectively; and (2) the normal redressability requirement does not apply in cases such as the instant one where Plaintiff seeks to enforce procedural rights under the APA and NFMA. Parties seeking to enforce procedural rights need not show that they face imminent harm. Lujan, 504 U.S. at 573 n. 7, 112 S.Ct. 2130 ("There is much truth to the assertion that `procedural rights' are special: the person who has been accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability or immediacy.") Additionally, it is abundantly clear that the relief sought by Plaintiff seeks to redress NSAA's alleged procedural injuries under the APA and NFMA claims. Defendants do not challenge NSAA's organizational or prudential standing at all, and do not challenge NSAA's Article III standing as to NSAA's non-procedural claims.
In sum, the Court finds that Plaintiff has standing to sue under Article III of the Constitution.
The Court now turns to the merits of Plaintiff's administrative appeal.
The APA requires that the Court "shall set aside agency action ... found to be ... arbitrary, capricious, an abuse of discretion ... in excess of statutory authority... [or] without observance of procedure required by law." See 5 U.S.C. §§ 706(2)(A), (B), (C), (D). Judicial review of agency action in district courts must be processed as an appeal. Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1580 (10th Cir.1994). In such circumstances, the "district court should govern itself by referring to the Federal Rules of Appellate Procedure." Id. at 1580. A district court does not find facts, but rather must determine solely whether "substantial evidence" in the administrative record submitted by the agency supports the decision made. Id. at 1575.
The APA requires agencies to adhere to three steps when they promulgate rules: (1) give notice of the proposed rulemaking
The distinction between those agency pronouncements subject to APA notice-and-comment requirements and those that are exempt has been aptly described as "enshrouded in considerable smog," General Motors Corporation v. Ruckelshaus, 742 F.2d 1561, 1565 (D.C.Cir.1984) (en banc). It appears, however, that courts are generally in agreement that only "legislative" rules require public notice-and-comment; whereas "interpretive rules" do not. See 5 U.S.C. § 553(b)(3)(A),(d); Sorenson Communications v. F.C.C., 567 F.3d 1215, 1222-23 (10th Cir.2009). Legislative rules create "new rights," "duties" and, "obligations." See Morton v. Ruiz, 415 U.S. 199, 232, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974); Ballesteros v. Ashcroft, 452 F.3d 1153, 1158 (10th Cir.2006); Sorenson, 567 F.3d at 1222 (stating that legislative rules carry the full force and effect of the law).
Interpretive rules merely explain, but do not alter, the substantive law that already exists in the form of a statute or regulation. Rocky Mountain Helicopters v. F.A.A., 971 F.2d 544, 546-47 (10th Cir. 1992) (stating that an interpretive rule "attempts to clarify an existing rule but does not change existing law or policy"). "If a challenged agency action creates a `legislative rule,' then full compliance with the APA's [processes] is required." Ballesteros, 452 F.3d at 1158.
From the substantial weight of the evidence, the Court has little difficulty in concluding that Plaintiff must prevail on its APA claim. This is because the 2012 Directive is a legislative rule, and as such was issued in violation of notice-and-comment processes.
First, the 2012 Directive is legislative as it carries the full "force and effect of law". Chrysler v. Brown, 441 U.S. 281, 295, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979). Specifically, the 2012 Directive creates binding legal obligations that are inserted by line officers into ski area permits to include the terms of the 2012 Directive. (ECF 15-1 at 3.) This occurs when the permits are "reissued or modified under 36 C.F.R. § 251.61." (Id.) Line officers have no discretion over the terms of the 2012 Directive. (Id.) These terms — such as the Waiver Clause — impose obligations on NSAA members, making them legislative for the purposes of the APA claim. As such, the Forest Service cannot have it both ways. It cannot seek to have the 2012 Directive inserted into new ski permits (having binding effect, as would a legislative rule); and then contend that the 2012 Directive is only interpretive (non-binding), so to be exempt from notice-and-comment requirements.
Second, the 2012 Directive is not interpretive. Contrary to Defendant's position, the 2012 Directive does not clarify existing policy — it creates it. (ECF No. 37 at 20-25.) When asked by the Court to address this argument, Defendants' Counsel resiled from its previous position:
While the response above was qualified, Counsel's answer confirms that clauses in the 2012 Directive are legislative. That is, the clauses do impose new rights and obligations. Defendants' Counsel could point to no prior water clause that compels permit holders to waive Constitutional rights as to compensation. (AR 00032 at ¶ F.2.f; AR 00068-70, 639-642.) Nor could counsel point to any prior clause compelling permit holders to grant the United States a power of attorney for the purposes of transferring water rights to itself. (AR 00031 at ¶ F.2.e; AR 00639-642.) These are just two clauses in the 2012 Directive, among others, that cut against Defendants' position. Because these clauses impose new rights and obligations, the rule is legislative requiring notice-and-comment compliance under the APA. Indeed the fact that Defendants admitted that they did not follow APA procedures only reinforces the result against them.
Third, and as a related matter, there is nothing in the Ski Area Permit Act (or any other statute) that the power of attorney clause, inter alia, specifically interprets for the purposes of the APA procedural claim.
Id. at 784.
Here, and like the 85/15 rule in Mission Group, the 2012 Directive is "the clearest possible example of a legislative rule" because it is intended to impose new duties, rights, and obligations on permit holders. The Power of Attorney and Waiver Clauses are illustrative — making the 2012 Directive a legislative rule.
Accordingly, the Court concludes the 2012 Directive is: (1) a legislative rule and (2) procedurally invalid given that Defendants did not follow the requisite APA procedures when they adopted it.
The RFA requires that agencies consider the economic impacts to small businesses of new rules that are subject to APA compliance. 5 U.S.C. § 553; 603(a). The RFA "obliges federal agencies to assess the impact of their regulations on small businesses." U.S. Cellular Corp. v. F.C.C., 254 F.3d 78, 88 (D.C.Cir.2001).
Pursuant to the RFA, agencies must notify and make available for public comment an initial regulatory flexibility analysis ("Initial RFA"). 5 U.S.C. § 603(a). Agencies must use statutorily-prescribed elements that describe the impact of the action on small businesses. Id. When an agency promulgates a final rule, it must prepare a final regulatory flexibility analysis ("Final RFA"), also using specific, statutorily-prescribed elements. i § 604(a). These, too, must be made available to the public and published in the Federal Register. Id. § 604(b). Importantly, the agency must provide an opportunity for small entities to participate in the rule-making process. Id. § 609(a). A ski area that has less than $7 million in annual receipts averaged over three years is a "small entity" within the meaning of the RFA. See 5 U.S.C. §§ 601(6), 601(3); 15 U.S.C. § 632; 13 C.F.R. §§ 121.104, 121.201.
Because the Forest Service admits that it did not assess whether the 2012 Directive would have a significant economic impact on these entities, the Court finds that the Forest Service has not complied with the RFA.
Plaintiff asserts that the Forest Service issued the 2012 Directive in violation of the procedural requirements of the NFMA. (ECF No. 8 at 22-23; ECF No. 15 at 30-32;
16 U.S.C. § 1612(a). (emphasis added.)
The Forest Service regulations define "standards, criteria, and guidelines" as the written policies contained in the Forest Service Manual. 36 C.F.R. § 216.2(c). The regulations exempt materials issued in the Forest Service Handbook from NFMA's public notice-and-comment requirements. 36 C.F.R. § 216.3(a)(2). Here, the Forest Service houses the 2012 Directive in the Forest Service Handbook, not the Manual. (AR 00024.) Since the 2012 Directive is housed in the Handbook, Defendant argues that it is not subject to mandated procedures outlined above. The Court rejects this argument.
Contrary to Plaintiff's position, the Court finds that the NFMA procedures apply because the Forest Service cannot exempt itself by simply housing the 2012 Directive in its Handbook.
The Court's holding is supported by Back Country Horsemen of America v. Johanns, 424 F.Supp.2d 89, 95 (D.D.C. 2006). There, the defendant asserted that it had no obligation under 16 U.S.C. § 1612(a) to provide public notice and comment before adopting binding directives because it published the directives in its handbook. The court rejected that argument. The court ruled, that as the policy was intended to "guide the trail manager's decision-making process," the agency's action fell within the ambit of "written policies, instructions or orders". Id. This, the court said, established the general "framework for the management and conduct of Forest Service programs." Id. at 97. Therefore, the court held that the agency's action constituted the formulation of standards and guidelines applicable within the meaning of 16 U.S.C. § 1612(a). Back Country Horsemen of America, 424 F.Supp 2d at 96.
Similarly, here, the Court holds that the 2012 Directive falls within the meaning of NFMA. Like the trail policy in Back Country Horsemen, the 2012 Directive establishes binding legal terms for implementing Defendants' ski area water rights policy. (ECF No. 37 at 14.) It is a "general framework" for a Forest Service "program" and Defendants' adoption of it — without the procedures guaranteed by 16 U.S.C. § 1612(a) — violates the NFMA.
Accordingly, Plaintiff's procedural claim under the NFMA prevails because (1) the NFMA applies to the 2012 Directive and (2) that the Forest Service violated its requirements under that statute.
Plaintiff NSAA seeks relief from Defendants' action pursuant to the APA. The judicial review provision of the APA provides that courts "shall ... hold unlawful and set aside agency action ... found to be ... arbitrary, capricious, ... in excess of statutory ... authority ... [and adopted] without observance of procedure required by law." 5 U.S.C. § 706(2); see also Ctr. For Native Ecosystems v. Salazar, 795 F.Supp.2d 1236, 1240 (D.Colo. 2011) (holding that "reviewing courts are directed to summarily set-aside agency action found to be arbitrary, capricious ... or otherwise not in accordance with law.")
As a matter of equitable jurisdiction, this Court retains its full equitable authority to craft the appropriate remedy. 5 U.S.C. § 702 ("[n]othing herein ... affects... the power or duty of the court to dismiss any action or deny any relief on any other appropriate legal or equitable ground.") The lack of an express jurisdictional limitation is significant because absent an express congressional mandate to the contrary, courts retain traditional equitable discretion.
"Vacatur is an equitable remedy ... and the decision whether to grant vacatur is entrusted to the district court's discretion." Rio Grande Silvery Minnow v. Bur. of Reclamation, 601 F.3d 1096, 1139 (10th Cir.2010). Vacation of an agency action "without an express determination on the merits is well within the bounds of traditional equity jurisdiction." See Ctr. For Native Ecosystems, 795 F.Supp.2d at
To determine whether an order to vacate is warranted, courts consider a two-part test. Allied-Signal, Inc. v. NRC, 988 F.2d 146 (D.C.Cir.1993); see also United Mine Workers v. Dole, 870 F.2d 662, 673 (D.C.Cir.1989). Both those cases were cited and applied by Judge John L. Kane of this District Court in Ctr. For Native Ecosystems, 795 F.Supp.2d at 1240. There, Judge Kane held that because vacatur is an equitable remedy — and since the APA does not expressly preclude the exercise of equitable jurisdiction — the "APA does not preclude the granting of vacatur without a decision on the merits." Id. In applying its equitable discretion, the court stated that it must consider: (1) "the seriousness of the deficiencies in the completed rule-making and the doubts the deficiencies raise about whether the agency chose properly from the various alternatives open to it in light of statutory objectives," which is in turn weighed against (2) any harm that "might arise from vacating the existing rule, including the potential disruptive consequences of an interim change." Id. at 1240. As discussed below, the Court finds that these factors ultimately weigh in favor of vacating the 2012 Directive.
In exercising equitable discretion, the Court turns to Defendants' procedural deficiencies. First, there have been significant violations of the APA by Defendants in promulgating the 2012 Directive.
Second, the Forest Service, inter alia, did not evaluate the economic impact on small business entities when the 2012 Directive was being developed. (ECF No. 15-9 ¶¶ 9-12, ECF No. 15-11 ¶¶ 9-10.) Among other things, these requirements of the RFA are intended to ensure that small entities have an opportunity to participate in the rule-making process. Id. § 609(a). Third, like it did with respect to the requirements of the APA, the Forest Service also failed to comply with notice-and-comment procedures guaranteed under the NFMA. 16 U.S.C. § 1612(a); (ECF No. 37 at 14.)
The Court must also consider whether vacating the 2012 Directive will lead to disruptive consequences. Ctr. For Native Ecosystems, 795 F.Supp.2d at 1242. the Court finds it will not. The record indicates that the 2012 Directive has to date only been inserted into one permit. (ECF No. 15-1 ¶ 3.)
The Forest Service argues that "[v]acating the 2012 Clause ... creates uncertainty as to the terms to be included in ski area permits and would result in considerable disruption of the ski program, likely delaying issuance of any permits while the Agency completes a new clause." (ECF No. 37 at 45.) But the burden is on the Forest Service to put forth a factual basis, and not just conclusory policy statements, for any "disruptive consequences" that it alleges could result. See, e.g., Building Indus. Legal Defense Found. v. Norton, 231 F.Supp.2d 100, 105-06 (D.D.C.2002) ("the Court cannot rely upon ... abstract policy arguments; rather there must be some factual basis for determining what the disruptive consequences might be.")
Here, vacating the 2012 Directive will simply eliminate a national rule that directs line officers to insert procedurally invalid water clauses into Ski Area Permits. The Court concludes that any disruptive effect would be minimal — particularly where the Forest Service admits it operated for decades without a national directive regarding ski area water rights. (ECF No. 37 at 6.)
In sum, the Court finds that the equities favor Plaintiff NSAA. Because of the severity of Defendants' many procedural violations — coupled with the complexity of the 2012 Directive and its impact spanning 13 states — the Court grants vacatur of the 2012 Directive.
In addition to vacatur, Plaintiff seeks to enjoin enforcement of the 2011 and 2012 Directives that are included in existing Ski Area Permits.
Specifically, as to the 2011 Directive, Plaintiff seeks to enjoin the Forest Service from enforcing the terms of the 2011 Directive
The Court notes that the remedial analysis — as to the class of permit holders described above — will be addressed collectively because enforcement of procedurally invalid 2011-2012 clauses constitutes common injuries to each.
Plaintiff contends that the Court may enter injunctive relief in addition to vacating the 2012 Directive if vacatur is not sufficient to remedy NSAA members' injuries. See, e.g., Monsanto Co. v. Geertson Seed Farms, ___ U.S. ___, 130 S.Ct. 2743, 2761, 177 L.Ed.2d 461 (2010) (stating "[i]f a less drastic remedy — such as partial or complete vacatur of an [agency] deregulation decision, was sufficient to redress respondents' injury — no recourse to the additional and extraordinary relief of an injunction was warranted.");
Injunctive relief rests within the equitable discretion of district courts. eBay v. MercExchange, 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). To determine whether to grant injunctive relief, courts apply a four-factor test:
Monsanto, 130 S.Ct. at 2756 (quoting eBay, 547 U.S. 388, 391, 126 S.Ct. 1837 (2006)); see also Colo. Envt'l Coal., 819 F.Supp.2d at 1223 (applying the "traditional four-factor test" for permanent injunctions).
The first factor for injunctive relief — irreparable injury
Here, Plaintiff contends that the four permit holders (and any other future permit holder where the 2012 Directive has been inserted) will be irreparably injured if the directives are enforced. The Court agrees. The 2012 Directive requires the permanent transfer of valuable water rights to the federal government. The application of the Power of Attorney Clause and the Waiver Clause reinforce this view. Specifically, in this case, the clauses in the 2012 Directive were intended to bind permit holders. Those clauses have been found to be procedurally invalid. And those permits, with procedurally invalid clauses (like the uranium leases) have "tangible effects" on permit holders' rights — i.e., the clauses tangibly effect water rights, among other things. As this Court found irreparable injury in Colorado Environmental Coalition because the issued leases had tangible effects (exploration activities etc); the Court similarly finds that there is irreparable injury in this case for permit holders if the 2012 Directive is enforced as to water rights (at least until APA compliance has been satisfied.) Given that enforcement of the of the directives by Forest Service employees would have "tangible effects" on the permits that contain the 2011-12 Directives, the Court finds that irreparable injury exists. Colorado Environmental Coalition, 819 F.Supp.2d at 1224.
As to the second factor — the inadequacy of remedies at law — this factor also favors Plaintiff. First, monetary damages at law will not remedy the four permit holders: the APA does not afford monetary relief. APA, 5 U.S.C. §§ 701-706. Second, if the 2012 Directive was enforced by the Forest Service, one of the clauses therein prevents a permit holder from claiming compensation — i.e. the Waiver Clause. Enforcement of the 2012 Directive thus precludes money damages being awarded to any of the relevant permit
Third, Defendants contend that injunctive relief is not warranted because they will not enforce the 2011-2012 Directives if the Court grants vacatur. And, even if Defendants did enforce those directives, the four permit holders can still challenge the such action based on "ordinary principles of stare decisis." (ECF No. 57 at 49.) These contentions (in the alternative) lack merit. Uncertainty of when, and if, the Forest Service attempts to enforce a clause — pursuant to the 2011 or 2012 Directives — is precisely what the injunction seeks to prevent. Moreover, the injunctive relief in this case will be narrow. The relief ordered will only enjoin the Forest Service from exercising discretion to enforce clauses in existing permits — an injury that would be irreparable for the four permit holders (and others if the 2011-2012 Directives are inserted into further Ski Area Permits). As such, this factor weighs heavily in Plaintiff's favor.
As to the third factor, the balance of the hardships favors an injunction. Here, the requested injunctive relief simply prohibits the Forest Service from enforcing procedurally invalid rules while it reevaluates the 2012 Directive in light of its statutory authority and consistent with its obligations under APA, NFMA, and RFA. The inconvenience caused by requiring the agency to adhere with statutory requirements and mandatory procedures does not outweigh the very real harm that the 2012 Directive has caused NSAA members. This factor also weighs heavily in Plaintiff's favor.
And finally, with respect to the fourth factor, the Court concludes that there is public interest in ensuring that federal agencies adhere to rule-making processes in the APA, RFA and NFMA statutes. The Forest Service adopted the 2012 Directive without involving the public, as required by these statutes. Requiring the Forest Service to involve the public in important decisions regarding the use and administration of federal lands is in the public interest; ever more so where those lands span 13 states nationwide. (ECF No. 15-5 ¶ 2.) Accordingly, the public interest would not be disserved by issuance of the injunction.
The Court holds that all of the factors support issuance of the narrow injunctive relief requested.
Based on the foregoing reasons, the Court ORDERS as follows:
Id. In the Court's view, such broad language does not assist the Defendants on the APA procedural claim. While argument may exist that the Ski Permit Area Act might possibly authorize the Forest Service to "impose these duties", Defendant can only (at best) argue that this allows for a delegation of power to make a "legislative rule", as to which `notice-and-comment procedure' are mandated by Mission Group, 146 F.3d at 784; (see also Plaintiff's Proposed Facts and Conclusions of Law, ECF No. 57 at 50, stating "the only possible authority [for Defendants] contains only a delegation to legislate.") And that argument is made before the Court even determines the substantive merits. But that is not how Defendants have put their case. Defendants have argued the interpretive rule exception, and therefore sought to be exempt from APA compliance. The Court rejects position for the reasons stated above and reserves any view on the substantive claims. Id. (emphasis added.)
Id. The court stayed enforcement of the rule and remanded to the agency. Id. at 43. In the present case, a similar result follows in accordance with the Court's Orders, below.
