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Hornbeck and others plaintiffs provide services to support offshore oil and gas drilling exploration and production activities in the Gulf

 

Hornbeck Offshore Services, L.L.C. et al. v. Salazar 696 F. Supp. 2d 627 (E.D.La. 2010)

 

Drilling Down to the Core of APA

 

FACTS

 

Hornbeck and others (plaintiffs) provide services to support offshore oil and gas drilling, exploration, and production activities in the Gulf of Mexico. Kenneth Salazar is the Secretary of the Department of Interior (DOI), a federal agency that includes the Minerals Management Services (MMS).

 

Following the BP Deepwater Horizon drilling platform explosion on April 20, 2010, and the resulting devastation and unprecedented disaster, the President asked DOI to conduct a study to determine what steps needed to be taken to prevent another problem with oil rigs in the Gulf.

 

DOI did a 30-day study, consulting respected experts from state and federal governments, academic institutions, and industry and advocacy organizations. On May 27, 2010, DOI issued a Report that recommended a six-month moratorium on permits for new wells and an immediate halt to drilling operations on the 33 permitted wells in the Gulf of Mexico. The DOI report also stated that "the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering." The experts pointedly observed this statement was misleading and called it a "misrepresentation." Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts publicly stated that they "do not agree with the six month blanket moratorium" on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review and was never agreed to by them. The plaintiffs moved for a preliminary injunction against the DOI moratorium.

 

JUDICIAL OPINION

 

FELDMAN, District Judge

 

The Administrative Procedure Act authorizes judicial review of final agency action. The APA cautions that an agency action may only be set aside if it is "arbitrary, capricious, an abuse of discretion, or not otherwise in accordance with law." The reviewing court must decide whether the agency acted within the scope of its authority, "whether the decision was based on a consideration of the relevant factors and whether there has been a

clear error of judgment."

 

Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

 

After reviewing the Secretary's Report and the Moratorium Memorandum, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium. The Report describes the offshore oil industry in the Gulf and offers many compelling recommendations to improve safety. But it offers no time line for implementation. The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the 33 permitted rigs also reached by the moratorium. It is incident-specific and driven: Deepwater Horizon and BP only. None others. While the Report notes the increase in deepwater drilling over the past ten years and the increased safety risk associated with deepwater drilling, the parameters of "deepwater" remain confused. And drilling elsewhere simply seems driven by political or social agendas on all sides. The Report seems to define "deepwater" as drilling beyond a depth of 1,000 feet by referencing the increased difficulty of drilling beyond this depth; similarly, the shal- lowest depth referenced in the maps and facts included in the Report is "less than 1,000 feet." But while there is no mention of the 500 feet depth anywhere in the Report itself, "deepwater" [is now anything] more than 500 feet.

 

The Court recognizes that the compliance of the thirty-three affected rigs with current government regulations may be irrelevant if the regulations are insufficient or if MMS, the government's own agent, itself is suspected of being corrupt or incompetent. Nonetheless, the Secretary's determination that a six-month moratorium on issuance of new permits and on drilling by the 33 rigs is necessary does not seem to be fact-specific and refuses to take into measure the safety records of those others in the Gulf. There is no evidence presented indicating that the Secretary balanced the concern for environmental safety with the policy of making leases available for development. There is no suggestion that the Secretary considered any alternatives: for example, an individualized suspension of activities on target rigs until they reached compliance with the new federal regulations said to be recommended for immediate implementation.

 

The Deepwater Horizon oil spill is an unprecedented, sad, ugly, and inhuman disaster. What seems clear is that the federal government has been pressed by what happened on the Deepwater Horizon into an otherwise sweeping confirmation that all Gulf deepwater drilling activities put us all in a universal threat of irreparable harm. While the implementation of regulations and a new culture of safety are supportable by the Report and the documents presented, the blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.

 

[T]he Court has found the plaintiffs would likely succeed in showing that the agency's decision was arbitrary and capricious. An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.

 

The plaintiffs' motion for preliminary injunction is granted.

 

CASE QUESTIONS

 

Why is the problem with the experts' objections important in determining whether DOI's moratorium was arbitrary and capricious?

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