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Save Our Cabinets v. United States Department of Agriculture

United States District Court, D. Montana, Missoula Division

May 30, 2017



          Donald W. Molloy, District Judge.

         The plaintiffs in this consolidated action seek review under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706, of federal agency actions and the associated planning documents relating to the approval of a proposed mining operation in the Cabinet Mountains Wilderness area in the Kootenai National Forest in northwestern Montana. The plaintiffs in CV 16-53-M-DWM are a coalition of environmental advocacy groups led by Save Our Cabinets. The plaintiff in CV 16-56-M-DWM is a private Montana mining company that owns 1, 000 acres of land adjacent to the proposed mine facilities. The cases are brought against the United States Department of Agriculture and the United States Forest Service ("Forest Service" or "Federal Defendants"). Montanore Minerals Corp. ("Montanore"), the owner and operator of the proposed mine, intervened as a matter of right. See Fed. R. Civ. P. 24(a)(2).

         The plaintiffs (collectively referred to as "Plaintiffs" unless context or specificity dictates otherwise) invoke the National Environmental Policy Act ("NEPA"), the Forest Service Organic Act of 1897 ("Organic Act"), the Federal Water Pollution Control Act ("Clean Water Act"), and the National Forest Management Act ("NFMA"). The challenged planning documents are the February 12, 2016 Record of Decision ("ROD"), the March 2015 Final Environmental Impact Statement ("FEIS"), the December 2015 Joint Final Environmental Impact Statement ("JFEIS"), and the July 22, 2015 Combined Response to Objections. Plaintiffs ask the Court to declare that the agencies violated the relevant statutes and enjoin them from authorizing any activity relating to the Montanore Mine Project (the "Project" or "Mine") until they have complied with all applicable statutes and regulations. Argument was heard on this matter along with a related Endangered Species Act case on March 30, 2017. See Save Our Cabinets v. U.S. Fish & Wildlife Serv., CV 15-69-M-DWM.

         For the reasons set forth below, Plaintiffs' claims are granted in part and denied in part. Approval of the Project would violate the Clean Water Act and the Organic Act as the approval violates Montana's nondegradation standards. The approval also fails to pass NFMA and NEPA muster.

         Factual Background

         I. The Montanore Mine Project

         The February 12, 2016 ROD states the Forest Service intends to approve a Plan of Operations for the Montanore Project, a copper and silver underground mine and associated facilities, including a new transmission line, located near Libby, Montana. ROD at 1, AR10522.[1] The Project will affect private, state, and National Forest System lands. Id. Montanore holds fee title by patent to mining claims (denoted HR 133 and HR 134), which lie partially within the Cabinet Mountains Wilderness Area ("Wilderness"). Id. While the ore body is located beneath the Wilderness, all Project mining access and surface facilities would be located outside the Wilderness boundary. JFEIS at 2, AR7862.

         The Project is to proceed in four phases: Evaluation, Construction, Operations, and Closure. ROD at 8, AR10529. The first phase, Evaluation, consists of extending the existing Libby Adit (mining tunnel) and collecting and analyzing additional geotechnical, hydrological, and other information to assess the mining prospects and environmental impacts of the Project. ROD at 9-10, AR10530-31. The Evaluation Phase is expected to last two years, Construction three years, Operations 16 to 20 years, and Closure and Post-Closure up to 20 years. JFEIS at 273, AR8133. The Project would consist initially of 12, 500 tons per day underground mining and would ultimately expand to 20, 000 tons of ore every day of operation. JFEIS at 7, AR7867. The ore deposit is estimated at 135 million tons, of which Montanore anticipates mining 120 million tons. The permit area is 2, 157 acres and expected disturbance area is 1, 565 acres. JFEIS at S-13, AR7807. Employment is estimated at 450 people at full production, JFEIS at 7, AR7867, assuming the Project meets all legal requirements imposed by law.

         II. Agency Action

         In order to operate, the Project requires a Plan of Operations approved by the Forest Service and permits as well as approvals from the Montana Department of Environmental Quality ("Montana DEQ"), the Bonneville Power Administration, the U.S. Army Corps of Engineers ("Corps"), and other state and local agencies. In conjunction with the Forest Service, the Montana DEQ is a lead agency on the Project with authority over permits for Montana water quality regulations and the Clean Water Act. The Forest Service and the Montana DEQ determined that the Project may significantly affect the quality of the human environment. ROD at 2, ARl 0523. Consequently they, along with the Corps and the Bonneville Power Administration, prepared an Environment Impact Statement ("EIS"). On February 27, 2009, a Draft EIS was issued for public comment. Id. In response to public comment, the agencies revised the mine alterative and transmission line alignments and issued a Supplemental Draft EIS on October 7, 2011. Id. As of April 1, 2015, the Forest Service issued a Final EIS ("FEIS") and Draft ROD. Id. A Joint Final EIS ("JFEIS") was issued in December 2015. Id.

         The Forest Service did not select Montanore's proposed action as the preferred alternative; rather it selected "Alternative 3 Agency Mitigated Poorman Impoundment and Transmission Line Alternative D-R" that "incorporates modifications and mitigating measures proposed by the agencies to reduce or eliminate adverse environmental impacts." ROD at 14, AR10535. Under this alternative, the Libby Plant site would be on the ridge between Poorman and Ramsey creeks, with mine production and the ventilation adits in the Upper Libby Creek Drainage, about one mile from the Wilderness boundary. Id. A tailings impoundment site would be located north of Poorman Creek. Id.

         While authorizing the full project, the ROD requires additional Forest Service approval prior to each Project phase. ROD at 8, AR10529. It also requires that Montanore obtain all necessary Clean Water Act permits prior to approval of the amended Plan of Operations and before implementing each phase. Montanore does not yet have the required permits. Montana DEQ decisions are documented in a separate Record of Decision ("DEQ ROD"). After reviewing the Project, the Montana DEQ held in abeyance its decision on whether to amend the provisions of the current operating permit regarding the Construction, Operation, Closure, and Post-Closure Phases of the Project to make it consistent with the Forest Service's selected mine alternative. DEQ ROD at 15, AR11014. The DEQ approved amendments to Montanore's existing DEQ Operating Permit 00150 to conditionally allow only the Evaluation Phase. Id.; ROD at 1, AR10522.

         III. Plaintiffs' Claims

         The environmental plaintiffs assert violations of the Organic Act (Count I), the Clean Water Act (Count II), NFMA (Count III), and NEPA (Count IV). Their claims are based primarily on the Project's effects on water quality and stream flows, as well as the Forest Service's consideration of mitigation measures and public access during the NEPA process. Plaintiff Libby Placer Mining Company ("Libby Placer Mining"), also challenges the Project under NEPA (Counts I, II) and the Organic Act (Count III). Its arguments focus primarily on the decision to use the Poorman Creek tailings impoundment site.

         IV. Amicus

         The Attorney General for the State of Montana filed an amicus brief, arguing that Montanore should be allowed to complete the Evaluation Phase. (Doc. 46.) According to the amicus, the ROD granted only limited exploratory permit rights contingent on a determination by Montana DEQ that actions beyond the Evaluation Phase will comply with Montana's water quality laws. See ROD at 58, AR10579. The Attorney General argues that such "phased review" has previously been upheld and should be upheld here. That position is addressed in the context of the parties' substantive arguments.

         Summary Conclusion Federal Defendants insist that the existing baseline data enabled the Forest Service to evaluate the reasonably foreseeable significant effects of the Mine and to make a reasoned choice among alternatives as to all phases of the Project. The defendants and amicus emphasize, however, that while the ROD authorizes the full Project, further analysis and authorization is required after the Evaluation Phase and before the Project can proceed. They refer to this process as either "phased" or "adaptive management." Plaintiffs do not dispute the necessity of collecting additional data on hydrogeologic conditions during the Evaluation Phase, (Doc. 63 at 18), but argue the legal error is that the ROD covers all phases of the Project. Plaintiffs emphasize that the ROD, as final agency action, must be assessed and the Forest Service cannot simply defer its substantive environmental analysis pending the DEQ permitting process.

         Although the "phased" approach used by the Forest Service is not inherently flawed, its application in this case is problematic. The Forest Service's approval of the Project despite noncompliance with Montana's nondegradation standards is arbitrary and capricious in violation of the Clean Water Act, the Organic Act, and NFMA. Additionally, the agencies violated NEPA by failing to discuss mitigation with regard to the Poorman site.


         I. Legal Standards Applicable to All Claims

         A. APA

         Under the APA, a "reviewing court shall. .. hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A); San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 601 (9th Cir. 2014). The scope of review is narrow, and a court must "not [] substitute its judgment for that of the agency." Motor Vehicle Mfrs. Ass 'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). A decision is arbitrary or capricious:

only if the agency relied on factors Congress did not intend it to consider, entirely failed to consider an important aspect of the problem, or offered an explanation 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.

Gardner v. U.S. Bureau of LandMgmt, 638 F.3d 1217, 1224 (9th Cir. 2011) (quoting Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008) (en banc)). An agency's actions are valid if it "considered the relevant factors and articulated a rational connection between the facts found and the choices made." Id. (internal quotation marks omitted); Motor Vehicles Mfrs., 463 U.S. at 50.

         B. Summary Judgment

         Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Summary judgment is particularly applicable to cases involving judicial review of final agency action. Occidental Eng 'r Co. v. INS, 753 F.2d 766, 770 (9th Cir. 1985). Summary judgment is appropriate in this case because the issues presented address the legality of the agencies' actions based on the administrative record and do not require resolution of factual disputes.

         II. Clean Water Act and Organic Act

         Plaintiffs insist there are three sets of claims under the Clean Water Act and the Organic Act: (1) noncompliance with state water quality standards, (2) lack of proper certification under Clean Water Act Section 401, and (3) noncompliance with the EPA's zero discharge effluent rule. Although the Forest Service can legally rely on future approvals by Montana DEQ, Rock Creek II, 703 F.Supp.2d at 1169, baseflow model results show the Project will violate Montana's water quality requirements in the future; the Forest Service's decision to approve the Project despite that violation is arbitrary and capricious.

         A. Clean Water Act

         The Clean Water Act is designed "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). It establishes water quality standards to protect the desired condition of each waterway. 33 U.S.C. § 1313. "A water quality standard defines the water quality goals of a water body, or portion thereof, by designating the use or uses to be made of the water and by setting criteria that protect the designated uses." 40 C.F.R. § 131.2. "[A] project that does not comply with a designated use of the water does not comply with the applicable water quality standards." PUD No. 1 v. Wash. Dep 't of Ecology, 511 U.S. 700, 715 (1994). Under the Clean Water Act Section 313, the Forest Service cannot authorize mining operations that do not comply with state and federal water quality regulations, "including a state's antidegradation policy. 33 U.S.C. § 1323(a)." Idaho Sporting Congr. v. Thomas, 137 F.3d 1146, 1153 (9th Cir. 1998). The Act also prohibits the Forest Service from authorizing a project that does not comply with Clean Water Act Section 401, which requires certification that any activity receiving a "Federal license or permit" that may result in any discharge into navigable waters will comply with state water quality standards. 33 U.S.C. § 1341(a)(1). "Proposed mining activities on National Forest System lands are subject to compliance with [Section 401]." JFEIS at 622, AR8499.

         Montana DEQ administers the Clean Water Act under authority delegated from the United States Environmental Protection Agency ("EPA"). Here, Montanore possessed a discharge permit from Montana DEQ (MPDES Permit MT0030279) allowing discharges of water from the existing Libby Adit. DEQ ROD at 5, AR11004. Permit MT0030279 allows three points of discharge: "Outfall 001 - percolation pond, Outfall 002 - infiltration system of buried pipes, and Outfall 003 - pipeline outlet to Libby Creek." Id. Montanore also previously obtained a hard rock mine operating permit from Montana, DEQ Operating Permit #00150, with minor revisions in 2006 regarding approved Libby Adit evaluation drilling that were referenced and incorporated in an amended Operating Permit. Id. The actions under review by the DEQ for the Project also included a renewal of that Discharge Permit, upon which the DEQ ROD conditioned amendment of the Operating Permit for the Evaluation Phase. DEQ ROD at 15, AR11014.

         B. Organic Act

         The Organic Act authorizes the Forest Service to regulate use and occupancy, such as mineral operations, on National Forest System lands and to develop mineral regulations. See 16 U.S.C. §§ 475, 478, 551. Those regulations require that "all [mining] operations shall be conducted so as, where feasible, to minimize adverse environmental impacts on National Forest surface resources." 36 C.F.R. § 228.8. They further require that mining operators comply with applicable state and federal water quality standards including the Clean Water Act; take all practicable measures to maintain and protect fisheries and wildlife habitat; and construct and maintain all roads so as to assure adequate drainage and to minimize or, where practicable, eliminate damage to soil, water, and other resource values. See Rock CreekII, 703 F.Supp.2d at 1164.

         The Organic Act limits the Forest Service's regulatory authority, however, by requiring that no such regulation "prohibit any person from entering upon such national forests for all proper and lawful purposes, including that of prospecting, locating, and developing the mineral resources thereof." 16 U.S.C. § 478. The Forest Service does not have authority to prohibit or deny mine proposals that can be approved in a manner that will comply with applicable environmental laws that are reasonably necessary to mining of a private mineral estate or the use of unpatented claims on National Forest System lands subject to the General Mining Act. See 30 U.S.C. §§ 22-42 (giving United States citizens the right to explore, locate, patent, and develop claims on National Forest System lands). Holders of validly existing mining claims within the Wilderness are accorded the rights provided by the United States mining laws and must comply with the Forest Service mineral regulations.[2] 36 C.F.R. § 228.15. Operations in the Wilderness

shall be conducted so as to protect National Forest surface resources in accordance with the general purposes of maintaining the [Wilderness] unimpaired for future use and enjoyment as wilderness and to preserve its wilderness character, consistent with the use of the land for mineral location, exploration, development, drilling, and production and for transmission lines, water lines, telephone lines, and processing operations, including, where essential, the use of mechanized transport, aircraft or motorized equipment.

36 C.F.R. § 228.15(b).

         C. Analysis

         Plaintiffs argue that the selected alternative will violate Montana's water quality requirements and that the Forest Service failed to comply with the Clean Water Act Section 401 and the EPA's zero-discharge effluent rule. Those arguments are addressed in turn.

         1. Montana Water Quality Requirements

         Montana law requires that "[e]xisting uses of state water and the level of water quality necessary to protect those uses must be maintained and protected." Mont. Code Ann. § 75-5-303 (the "nondegradation" standard). Montana law further requires that waters be "maintained suitable for .. . growth and propagation of salmonid fishes and associated aquatic life" and that "[n]o increases are allowed above naturally occurring concentrations of sediment or suspended sediment... which will or are likely to .. . render the waters harmful, detrimental, or injurious to ... fish." Admin. R. Mont. 17.30.623(1), (2)(f). In addition to "maintaining" waters suitable for aquatic life, Montana law states that only "a 1 ° maximum increase above naturally occurring water temperature is allowed within the range of32°Fto66°F." Admin. R. Mont. 17.30.623(2)(e). Plaintiffs challenge the Project's compliance with all three standards: (1) nondegradation, (2) sediment, and (3) temperature.

         According to the defendants, because the State of Montana has been delegated authority to issue discharge permits and has adopted water quality standards approved by the EPA, the State is the primary decision-maker regarding compliance with the Clean Water Act, including compliance with state water quality standards. For that reason, they argue that the Forest Service properly determined that reliance on Montana DEQ's decisions constitutes compliance with Clean Water Act requirements. ROD at 58, AR10579; see Rock Creek Alliance v. United States Forest Service (Rock Creek II), 703 F.Supp.2d 1152, 1169 (D. Mont. 2010) ("The permit is the means by which the Montana DEQ enforces state water quality standards, and the Forest Service is allowed to rely on the Montana DEQ to issue and enforce a valid permit."). Although the Montana DEQ determined that "the Libby Adit during the Evaluation Phase will comply with all water quality standards, " it chose to hold in abeyance its compliance determination for the remaining phases of the Project. DEQ ROD at 18, AR11017. Federal Defendants insist the status of the permit is irrelevant because the Forest Service's proposals are expressly contingent upon Montana DEQ approval of operations. See ROD at 8, AR10529; see Rock CreekII, 703 F.Supp.2d at 1169 n.13 (noting that the status of a similar State DEQ permit was "irrelevant to the consideration of compliance with the Organic Act). The Montana Attorney General echoes that such reliance on the Montana DEQ is consistent with the law. (See Doc. 46.)

         Plaintiffs argue that by deferring to the State's future permit process, despite the current record which predicts that State water quality standards will be violated, the Forest Service ignores Section 313's creation of a separate and independent duty on federal agencies to comply with all federal and state water quality standards, and that judicial review of current compliance is appropriate under the APA, Idaho Sporting Cong'r, 137F.3datll53, and the Clean Water Act's citizen suit provision, Rock CreekII, 703 F.Supp.2d at 1163-65.[3]

         a. Nondegradation[4]

         Plaintiffs first argue that the Alternative 3 selected by the ROD will result in violation of Montana's nondegradation requirements. Montana law requires that "[e]xisting uses of state waters and the level of water quality necessary to protect those uses must be maintained and protected." § 75-5-303(1). Degradation of "high quality" waters is prohibited unless the DEQ issues an authorization to degrade. §§ 75-5-103(13), 75-5-303. No degradation of "outstanding resource waters" is allowed, such as surface waters within a wilderness. Admin. R. Mont. 17.30.705(2)(c); DEQ ROD at 18, AR11017 ("Surface waters located within the boundaries of the [Wilderness] ...

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