Aug 252022

U.S. District Court Enjoins Biden Administration’s Nationwide Oil and Gas Leasing “Pause” Following Fifth Circuit’s Remand

Caleb J. Bowers, Emily P. Mallen, Jagdeep Singh and Samuel B. Boxerman
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On August 18, 2022, the federal district court for the Western District of Louisiana (the District Court) enjoined the nationwide pause of oil and gas leasing by the Biden administration (the Government). The District Court issued a permanent injunction just one day after the U.S. Court of Appeals for the Fifth Circuit (the Fifth Circuit) vacated and remanded the District Court’s order by which the District Court had previously issued a preliminary injunction enjoining the pause.

As explained in our previous post, this case concerns Section 208 of Executive Order 14008, issued by President Joe Biden on January 27, 2021, which, among other things, requires the Secretary of the Interior to “pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices” based on climate-related and other effects. On March 24, 2021, 13 states filed a complaint seeking injunctive relief, alleging that the Department of the Interior violated the Administrative Procedure Act (APA) by acting in a manner arbitrary and capricious, and contrary to law, and by failing to follow notice and comment procedures when implementing lease sale postponements or cancellations. The Government appealed to the Fifth Circuit, which vacated the injunction for lack of specificity on the grounds that the District Court failed to define the “pause” at issue in the injunction.

On remand, the District Court clarified its use of “pause” in the preliminary injunction as language pulled from Executive Order 14008. However, the court then described that in its view, the “most appropriate word to use would be ‘stop’ ” based on the complete stoppage of the offshore and onshore leasing process. In fact, the court noted, all scheduled lease sales (other than one of the sales that proceeded after filing of the lawsuit at hand) had been “paused” or “postponed” since Executive Order 14008 was signed.

The District Court then addressed two legal issues in detail: 1) President Biden’s authority to order the pause in light of the Outer Continental Shelf Lands Act (OCSLA) and Mineral Leasing Act (MLA) and 2) whether the Government’s implementation of Section 208 of the executive order violated the APA.

  • First, the court determined that the Secretary of the Interior (and not the President through an executive order) may make significant changes — such as the “stop” in this case — only by following the OCSLA’s four-step process for revising an existing leasing plan. The Secretary had failed to follow this process.
  • Second, the District Court found that the cancelling or postponing of the leases at issue were indeed final agency actions reviewable under the APA — which the Government had contested — and proceeded with reviewing the decision to “stop” the leases. The court determined that neither OCSLA nor the MLA provided the agencies with discretion to stop the lease process given Congress’s directive under each statute to make eligible lands available for development.

Based on its determinations, the District Court issued a permanent injunction that “enjoined and restrained [the Government] from imposing a Stop, referred to in Executive Order 14008 as a Pause, of federal oil and gas leases as to eligible lands, or by pretext, to make eligible lands ineligible.” This injunction applies to multiple previously scheduled leases including, specifically, Lease Sale 258 in Alaska (at issue in the case being decided), certain leases cancelled on March 1, 2021, in Utah and Montana, and certain leases cancelled before March 24, 2021, due to Section 208 of Executive Order 14008. The agencies must now take action to remove the stop or pause related to these leases.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Caleb J. Bowers

Los Angeles

cbowers@sidley.com

Emily P. Mallen

Jagdeep Singh

Samuel B. Boxerman

Washington, D.C.

sboxerman@sidley.com

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