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Minard Run Oil Company v. United States Forest Service

Legal Question:

Whether federal land management agencies may change their longstanding policies by executing "sweetheart" settlement agreements with environmental groups?

Plaintiffs:

Minard Run Oil Company; Pennsylvania Independent Oil and Gas Association (PIOGA); Pennsylvania Oil and Gas Association; Allegheny Forest Alliance; County of Warren, Pennsylvania

Defendants:

Federal Defendants: United States Forest Service; Kent P. Connaughton, Regional Forester; Leanne M. Marten, Forest Supervisor, Allegheny National Forest; and Eric Holder, U.S. Attorney General. FSEEE Defendants: Forest Service Employees for Environmental Ethics, Inc.; Allegheny Defense Project, Inc.; and Sierra Club

Court:

U.S. Court of Appeals for the Third Circuit
None.

The Allegheny National Forest (ANF) covers 500,000 acres in Elk, Forest, McKean and Warren Counties in northwestern Pennsylvania. Because the lands that now comprise the ANF were once privately owned and were purchased under the 1911 Weeks Act during the 1920s and because the United States bought only the surface estate, most of the mineral rights in the ANF are privately owned. Thus, there is no contractual basis for any federal government regulatory authority over outstanding oil, gas, and mineral (OGM) rights in the ANF.

Although, under Pennsylvania law, owners of OGM estates have the right to go on the surface to access their property and to occupy so much of the surface as necessary to remove it, the law provides for accommodation; thus, OGM rights must be exercised with "due regard" for the interests of surface owners. That the United States owns the surface does not change the law; thus, the Forest Service has only limited rights as to the use of OGM rights within the ANF, which is in accordance with the Forest Service Manual. This was recognized by a Pennsylvania federal district court in a 1980 ruling. For decades, the Forest Service adhered to the law and its policy and responded to an operator's 60-day notice of its plans with consultations and a notice to proceed. A notice to proceed, however, is not a decision to allow oil and gas development because the Forest Service has no regulatory power over OGM rights. Nonetheless, in May 2006, the Forest Service issued a revised ANF Forest Plan, which resulted, in March 2007, in an ANF Forest Plan, along with a Final Environmental Impact Statement and Record of Decision, which indicated that the National Environmental Policy Act (NEPA) should be applied to OGM development in the ANF. That rule making was appealed successfully and is the subject of litigation.

Meanwhile, on November 20, 2008, environmental groups sued the Forest Service asserting that the issuance of a notice to proceed is "major federal action" and subject to NEPA. Although oil and gas groups intervened in the case, the Forest Service entered into a hastily executed "Settlement Agreement" whereby it agreed to comply with NEPA; the lawsuit was then dismissed.

On June 1, 2009, Minard Run filed suit against the Forest Service and Forest Service Employees for Environmental Ethics, Allegheny Defense Project, and Sierra Club (FSEEE). Minard Run also sought to enjoin implementation of the Settlement Agreement until a decision on the merits. On June 25, 2009, the federal defendants filed a motion to dismiss, and on June 26, 2009, the FSEEE defendants filed a brief in opposition to the motion for preliminary injunction. A hearing on the motions to dismiss and for preliminary injunction was held on August 24-26, 2009.

On December 15, 2009, the Court ruled for Minard Run. It enjoined the Forest Service from requiring preparation of NEPA documents as a precondition to the exercise of private oil and gas rights in the ANF. It also enjoined enforcement of the forest-wide drilling ban in the ANF and ordered that proposals for drilling activity be processed as they had been prior to inception of the drilling ban.

On January 11, 2010, Minard Run filed a motion requesting the court to change its preliminary injunction opinion to a summary judgment opinion, which the district court denied. On January 12, 2010, the federal government filed a motion for reconsideration, which the district court denied on March 9, 2010. The district court also ordered the Forest Service to file the administrative record, which it did on March 23, 2010; the parties are negotiating over the completeness of the record.

FSEEE defendants subsequently appealed the decisions granting Minard Run a preliminary injunction and denying their motion for reconsideration to the Third Circuit. On May 6, 2010, the Forest Service filed a notice of appeal of the order granting the preliminary injunction and denying the motion for reconsideration, and the environmental groups filed an amended notice of appeal, adding to their appeal the order denying the motion for reconsideration.

On July 28, 2010, the Forest Service filed its opening brief, and on August 22, 2010, the environmental groups filed their opening brief. On September 9, 2010, Minard Run filed a response brief in each appeal to the U.S. Court of Appeals for the Third Circuit. On October 12, 2010, the Forest Service filed its reply brief. On October 15, 2010, the environmental groups filed their reply brief. Oral arguments were held on January 27, 2011. On September 20, 2011, the Third Circuit affirmed the district court's grant of a preliminary injunction.

Meanwhile, on July 15, 2011, Minard Run filed a motion to hold the Forest Service in contempt of court of the federal district court's December 15, 2009 order for denying access to oil, gas, and mineral rights. Briefing followed, culminating in oral arguments before the federal district court on November 14, 2011. On December 21, 2011, the parties filed post-hearings findings of fact and conclusions of law. On March 23, 2012, the district court denied the motion to hold the Forest Service in contempt of court.

Subsequently, Minard Run filed briefs urging the district court to issue a permanent injunction, which the Forest Service opposed. Meanwhile, FSEEE filed a motion for summary judgment, which Minard Run opposed. On July 2, 2012, oral arguments were held before the Pennsylvania federal district court on the pending motions.

On September 6, 2012, the district court issued an order granting summary judgment in favor of Minard Run and converted its December 15, 2009, order into a final declaratory judgment on the merits. On November 2, 2012, FSEEE filed a notice of appeal to the Third Circuit.

On March 11, 2013, FSEEE filed an opening brief. On April 22, 2013, Minard Run filed a response brief. On May 6, 2013, FSEEE filed a reply brief. On September 11, 2013, the Third Circuit heard oral arguments. On September 26, 2013, the Third Circuit affirmed the judgment of the district court.  On October 10, 2013, FSEEE filed a petition for rehearing and/or rehearing en banc.  On December 27, 2013, the Third Circuit denied the petition.

No Status Updates
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    Sep 11, 2013
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