9th Circuit rejects Shell pre-emptive appeal

A panel of judges from the U.S. Court of Appeals for the 9th Circuit has rejected a highly unusual lawsuit, filed by Shell in 2012, attempting to pre-empt litigation against the company’s Chukchi Sea oil spill response plan. Shell filed the lawsuit in federal District Court in Alaska against 13 environmental organizations as part of the run-up to the company’s summer Chukchi Sea drilling program. The company, anticipating legal action against its planned drilling, asked the court to declare the approval of its response plan by the Bureau of Safety and Environmental Enforcement to be legally valid.

In the event this court case became consolidated with a subsequent appeal against the spill response plan. However, District Court Judge Ralph Beistline refused to dismiss Shell’s pre-emptive lawsuit and the case eventually made its way to an appeal in the 9th Circuit.

In a Nov. 12 court opinion 9th Circuit Judge Dorothy Nelson said that Shell’s lawsuit amounted to a request for a declaratory judgment over the application of the Administrative Procedures Act, or APA, the federal act that governs how agencies carry out their permitting obligations. But under that act any dispute regarding the legality of Shell’s permits would be between an aggrieved person and the government agency, in this case the Bureau of Safety and Environmental Enforcement. Shell has no legal obligations under the APA to the environmental groups, Nelson wrote.

“Indeed, since it is the Bureau and not Shell, that can be sued under the APA, it would be odd to conclude that a case or controversy exists merely because Shell seeks to know who would prevail if the environmental groups asserted an APA claim against the Bureau,” she wrote.

Moreover, the possibility of a district court finding the Bureau’s actions unlawful in a case such as this would lead to an untenable situation in which the court could adjudicate over the agency’s actions, without agency intervention in the lawsuit and with the resulting judgment not being binding on the agency, Nelson wrote.

- Alan Bailey