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Western Organization of Resource Councils v. Bernhardt

United States District Court, D. Montana, Missoula Division

August 13, 2019

DAVID BERNHARDT, et al., Defendants.


          Donald W. Molloy, District Judge

         In August 2018, Plaintiff Western Organization of Resource Councils ("Western") sued various officials within the Department of the Interior ("Defendants"), challenging the reestablishment and operation of the Royalty Policy Committee ("Royalty Committee" or "Committee") under the Federal Advisory Committee Act ("FACA"). The Secretary of the Interior ("Secretary") established the Committee to provide advice on issues related to the leasing of energy and mineral resources on federal and Indian lands. See 60 Fed. Reg. 43, 347, 43, 475 (Aug. 21, 1995). According to Western, "Rather than pursue its task with the full and transparent participation of. . . [the public], the Committee operates in secret and works to advance the goals of only one interest: the extractive industries that profit from the development of public gas, oil, and coal." (First Amend. Compl., Doc. 14 at ¶ 2.) Ultimately, because the Committee was improperly established, reliance on or use of its recommendations is enjoined.


         I. FACA

         "Congress passed FACA in 1972 to address whether and to what extent committees, boards, and councils should be maintained to advise Executive Branch officers and agencies." Cummock v. Gore, 180 F.3d 282, 284 (D.C. Cir. 1999) (internal citation omitted). "Congress recognized that advisory committees are frequently a useful and beneficial means of furnishing expert advice, ideas and diverse opinions to the Federal Government. However, Congress also feared the proliferation of costly committees, which were often dominated by representatives of industry and other special interests seeking to advance their own agendas." Id. (internal quotation marks and citation omitted). Enacting FACA,

Congress struck a balance between these concerns, by preserving the advisory committee mechanism for informing policy decisions, while ensuring "that new advisory committees be established only when essential and that their number be minimized; that they be terminated when they have outlived their usefulness; that their creation, operation, and duration be subject to uniform standards and procedures; that Congress and the public remain apprised of their existence, activities, and cost; and that their work be exclusively advisory in nature."

Id. at 285 (quoting Pub. Citizen v. U.S. Dep't of Justice, 491 U.S. 440, 446 (1989)).

         FACA outlines a number of requirements governing an agency's creation and operation of "advisory committees." See 5 U.S.C. app. 2 §§ 3(2), 9(a). For instance, FACA mandates that membership be "fairly balanced in terms of the points of view represented and the functions to be performed" and that a committee's advice reflect its "independent judgment" without inappropriate influences from the appointing authority or special interests. Id. at § 5(b)(2), (3). Additionally, once established, an advisory committee must open its meetings to the public, id. at § 10(a)(1), publish advance notice of its meetings, id. at § 10(a)(2), and make publicly available records, drafts, studies, and other documents that were made available to or prepared by or for the committee, id. at § 10(b). Additionally, FACA requires federal agencies to "establish uniform administrative guidelines and management controls for advisory committees established by the agency." Id. at § 8(a).

         II. Royalty Committee

         The first iteration of the Royalty Policy Committee was chartered by the Department of the Interior ("Department") in 1995. 60 Fed. Reg. 43, 347, 43, 475 (Aug. 21, 1995). Its charter was regularly renewed, and the Committee was imbued with a mandate to "review and comment on revenue management and other mineral-related policies" stemming from federal and Indian mineral leases. 69 Fed. Reg. 19, 876-02 (Apr. 14, 2004). The Committee was reestablished in its current form in 2017 to "advise on current and emerging issues related to the determination of fair market value, and the collection of revenue from energy and mineral resources on Federal and Indian lands," as well as "on the potential impacts of proposed policies and regulations related to revenue collection from such development, including whether a need exists for regulatory reform.'[1] 82 Fed. Reg. 16, 222-01 (Apr. 3, 2017); AR_0004.

         The Secretary signed the Committee's charter on March 29, 2017, AR_0016, and published a notice in the Federal Register on April 3, 2017, AR_0004. The Committee is comprised of:

- Seven officials from the Department of the Interior;
- Up to six representatives of governors of states that receive at least $10, 000, 000 annually in royalty revenues from federal leases;
- Up to four representatives of Indian Tribes that are subject to laws relating to mineral development;
- Up to six representatives of various mineral and/or energy stakeholders; and - Up to four members representing academic and public interest groups.

AR_0015. It is administered by the Office of Natural Resources Revenue.

         AR_0014. The Committee has three subcommittees: the Fair Return and Revenue Subcommittee (the Fair Return in Value Subcommittee); the Planning, Analysis & Competitiveness Subcommittee; and the Tribal Affairs Subcommittee (the Tribal Energy Subcommittee). See AR_0063-64. These subcommittees, in turn, formed various working groups to address specific issues. See, e.g., AR_0243 (describing Marketable Condition Working Group).

         To date, the Committee has held four meetings, see 82 Fed. Reg. 41, 646 (Sept. 1, 2017), AR_0052 (announcing Oct. 4, 2017 meeting); 83 Fed. Reg. 6, 613 (Feb. 14, 2018), AR_0232 (announcing Feb. 28, 2018 meeting); 83 Fed. Reg. 22, 989 (May 17, 2018), AR_0646-47 (announcing June 6, 2018 meeting); 83 Fed. Reg. 40, 081 (Aug. 13, 2018), AR_1263-64 (announcing Sept. 13, 2018 meeting), and maintained its materials at its website: However, the Committee's Charter lapsed in April 2019, two years after it was chartered. See AR0016 (dated April 21, 2017); 41 C.F.R. § 102-3.3 0(b)(4) (providing for automatic expiration after two years unless renewed).

         III. The Present Case

         Western is a Montana-based organization self-described as "a regional network of grassroots community organizations," that seeks "to build sustainable environmental and economic communities that balance economic growth with public health and stewardship of land, water, and air resources." (Doc. 14 at ¶ 17.) Western filed this action in August 2018, alleging that the Royalty Committee was established in violation of FACA (Count 1) and that its operation violates FACA's requirements that it: (1) provide public notice of its meetings and publicly disseminate its materials (Count 2); (2) ensure that its membership be "fairly balanced" (Count 3); and (3) exercise independent judgment without inappropriate influences from special interests (Count 4). (Id.) Following a January 16, 2019 hearing, Counts 3 and 4 were dismissed on Defendants' motion, leaving Counts 1 and 2. (Doc. 42); W. Org. Resource Councils v. Bernhardt (W. Org.), 362 F.Supp.3d 900 (D. Mont. 2019).

         Despite the lapse of the Committee's charter, Western argues that its "injuries persist in the form of (1) unlawfully withheld Committee materials; (2) the Committee's pending recommendations to the Department, and; (3) ongoing Committee work absent a valid charter." (Doc. 49 at 9.) While Defendants insist all Committee work has ceased, (see Docs. 52-1, 52-2 (summaries of April 10 and 12, 2019 meetings, indicating expiration of charter on April 21)), they concede that subcommittee and working group records have not been released, (Doc. 52 at 17), and maintain that potential future reliance by the Department on existing Committee recommendations is appropriate, (id. at 40-42).

         On May 2, 2019, Western filed its motion for summary judgment, (Docs. 48, 49), and on June 3, 2019, Defendants filed their cross-motion, (Docs. 51, 52).

         Summary Conclusion

         The establishment and operation of the Royalty Committee presents a concerning case study in the regulation of advisory committees and their role in government. Through the passage of FACA, Congress sought to make advisory committees transparent and accountable. Cummock, 180 F.3d at 284-85. Defendants, ignoring that mandate, seek to render FACA impotent while essentially conceding violations of the spirit, if not the letter, of the law. While Western should not succeed on all of its claims, it has identified a gaping hole in government accountability.

         Legal Standard

         Actions under FACA are evaluated under the standards set forth in the Administrative Procedure Act ("APA"), which authorizes a court to "compel agency action unlawfully withheld or unreasonably delayed," 5 U.S.C. § 706(1), and to "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 law," 5 U.S.C. § 706(2)(A). An agency action is unlawfully withheld if the agency fails to take a "discrete agency action that it is required to take," i.e., an action that is "demanded by law," including "agency regulations that have the force of law." Norton v. S. Utah Wilderness All, 542 U.S. 55, 64-65 (2004) (emphasis omitted). Agency action is arbitrary and capricious if the administrative record demonstrates that the "agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, [or] offered an explanation for its decision that runs counter to the evidence before the agency." Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Where an agency's administrative record is complete and constitutes the whole and undisputed facts underlying agency decisionmaking, summary judgment is the appropriate vehicle to address claims under both § 706(1) and (2). City & Cty. of S.F. v. United States, 130 F.3d 873, 877 (9th Cir. 1997) ("[T]he function of the district court is to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.").


         Two FACA considerations remain: (1) reestablishment of the Committee and (2) public access to subcommittee and working group meetings and materials.

         I. Reestablishment - Section 9 (Count 1)

         Pursuant to FACA, "new advisory committees should be established only when they are determined to be essential and their number should be kept to the minimum necessary." 5 U.S.C. app. 2 § 2(b)(2). An agency must also "determine [] as a matter of formal record . .., with timely notice published in the Federal Register," that the new committee is "in the public interest in connection with the performance of duties imposed on that agency by law." Id. at § 9(a)(2). Western argues that the Royalty Committee's reestablishment was infirm because the Department failed to follow the necessary consultation process or explain and justify its existence. In response, Defendants contend that Western's arguments exceed the scope of its pleadings, the Department followed the necessary consultation process, and its discretionary decisions are nonjusticiable. Ultimately, Western raises persuasive concerns regarding the consultation process and the underlying basis for the agency's actions.

         A. ...

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