Hayes v. Chaparral Energy, LLC

180 F. Supp. 3d 902, 2016 WL 1254427
CourtDistrict Court, N.D. Oklahoma
DecidedMarch 29, 2016
DocketCase No. 14-CV-495-GKF-PJC
StatusPublished
Cited by2 cases

This text of 180 F. Supp. 3d 902 (Hayes v. Chaparral Energy, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hayes v. Chaparral Energy, LLC, 180 F. Supp. 3d 902, 2016 WL 1254427 (N.D. Okla. 2016).

Opinion

SECOND AMENDED OPINION AND ORDER

GREGORY K. FRIZZELL, CHIEF JUDGE UNITED STATES DISTRICT JUDGE

The National Environmental Policy Act (“NEPA”) is a process-oriented statute, [905]*905requiring federal agencies to consider the environmental impacts of their actions. This case involves a dispute over the government’s obligations under NEPA with regard to its approval of an oil and gas lease and two (2) drilling permits in Osage County, Oklahoma.

In 2013, Chaparral Energy, LLC (“Chaparral”) entered into an oil and gas lease with the Osage Nation for a portion of the Osage mineral estate underlying plaintiff David P. Hayes’s property. Shortly thereafter, the government approved the lease as well as Chaparral’s applications for permits to drill on Hayes’s property. In turn, Hayes brought this action against defendants the United States of America, the Department of Interior (DOI), the Bureau of Indian Affairs (“BIA”) (collectively, “the government”), and Chaparral, alleging that the government’s approval of the lease and drilling permits failed to comply with NEPA. In response, the government submits that its approval of lease was exempt from NEPA’s procedural requirements and that it had already satisfied those requirements with regard to its approval of the drilling permits.

For the reasons set forth in this Opinion and Order, the court holds that the government failed to comply with NEPA prior to its approval of Chaparral’s lease and drilling permits. The court, therefore, declares these documents invalid.

I. BACKGROUND

A. Statutory Framework

“In 1872, Congress established a reservation for the Osage Nation in present day Oklahoma.” Osage Nation v. Irby, 597 F.3d 1117, 1120 (10th Cir.2010) (citing Act of June 5, 1872, ch. 310, 17 Stat. 228). In 1904 and 1905, large quantities of oil and gas were discovered on the reservation. See Cohen’s Handbook of Federal Indian Law § 4.07[l][d][ii], at 311 (Nell Jessup Newton et al., eds., 2005). To manage the Osages’ newfound wealth, Congress enacted the Osage Allotment Act which placed the mineral estate underlying Osage lands in trust and directed the Secretary of the Interior to collect and distribute royalty income to tribal members on a quarterly, pro rata basis. See Act of June 28, 1906, Pub. L. No. 59-321, § 4, 34 Stat. 539 (“1906 Act”). The government’s trusteeship over the Osage mineral estate was originally set to last twenty-five years, see 1906 Act §§ 3, 4, but has since been extended “in perpetuity,” see Pub. L. No. 95-496, § 2(a), 92 Stat. 1660 (1978).

Under the Act, the Osage Nation may lease portions of the- mineral estate for exploration and development “with the approval of the Secretary of the Interior, and under such rules and regulations as he may prescribe.” 1906 Act § 3. The Secretary has delegated this authority to the Superintendent of the Osage Agency. See 25 C.F.R §§ 226.4, 226.5(b). Pursuant to departmental regulations, “[n]o operations are permitted upon any tract of land until a lease covering such tract is approved by the Superintendent.” Id. § 226.34(a). Further, to commence drilling, a lessee must obtain additional approval from the Superintendent, in the form of a permit to drill. See id. § 226.34(b); [see also Dkt. # 77-5, pp. 40-41].

The Superintendent’s approval of leases and drilling permits on Indian lands constitutes federal action subject to NEPA. See Davis v. Morton, 469 F.2d 593, 596-97 (10th Cir.1972); see also Manygoats v. Kleppe, 558 F.2d 556, 557 (10th Cir.1977). NEPA “requires federal agencies ... to analyze environmental ■ consequences before initiating actions that potentially affect the environment.” Utah Envtl. Cong. v. Bosworth, 443 F.3d 732, 735-36 (10th Cir.2006).- Unlike other envi[906]*906ronmental statutes, however, NEPA does not mandate any particular substantive outcome. See Hillsdale Envtl. Loss Prevention, Inc. v. U.S. Army Corps of Engineers, 702 F.3d 1156, 1166 (10th Cir.2012). Rather, the Act merely “imposes procedural, information-gathering requirements on an agency,” id. so as “to ensure that the agency will only reach a decision on a proposed action after carefully considering [its] environmental impacts,” Forest Guardians v. U.S. Fish & Wildlife Serv., 611 F.3d 692, 717 (10th Cir.2010).

NEPA achieves this end by requiring federal agencies to prepare an environmental impact statement (“EIS”) before taking any “major Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(C)(ii). “An EIS is a detailed document that identifies the potential impacts a proposal may have on the environment.” Citizens’ Comm. to Save Our Canyons v. U.S. Forest Serv., 297 F.3d 1012, 1022 (10th Cir.2002). If an agency is uncertain whether an EIS is required, it may elect to prepare a less detailed environmental assessment (“EA”). See Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 145, 130 S.Ct. 2743, 177 L.Ed.2d 461 (2010). “An EA allows the agency to consider environmental concerns, while reserving agency resources to prepare full EIs’s for appropriate cases.” Park Cty. Res. Council, Inc. v. U.S. Dep’t of Agric., 817 F.2d 609, 621 (10th Cir.1987) (internal quotation marks omitted), overruled on other grounds by Vill. of Los Ranchos De Albuquerque v. Marsh, 956 F.2d 970 (10th Cir.1992). “If after preparing [an] EA, the agency concludes that a proposed action will not significantly affect the environment, the agency may issue a finding of no significant impact (FONSI) and need not prepare a full EIS.” McKeen v. U.S. Forest Serv., 616 F.3d 1244, 1248 n. 3 (10th Cir.2010) (internal quotation marks omitted). Finally, “[i]n certain narrow instances,... an agency is not required to prepare either an [EA] or an [EIS], This occurs when the proposed action falls within a categorical exclusion, ie., those actions predetermined [by the agency] not to ‘individually or cumulatively have a significant effect on the human environment.’ ” Utah Envtl. Cong., 443 F.3d at 736 (quoting 40 C.F.R. § 1508.4).

“The Council on Environmental Quality (CEQ) is tasked with interpreting NEPA and establishing regulations governing agencies’ responsibilities under the statute.” Sierra Club, Inc. v. Bostick, 787 F.3d 1043, 1063 (10th Cir.2015) (McHugh J., concurring); accord Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 757, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004).

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180 F. Supp. 3d 902, 2016 WL 1254427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hayes-v-chaparral-energy-llc-oknd-2016.