Dock Extension Delayed because of Inadequate EIS

Ocean Advocates v. U.S. Army Corps of Engineers, 361 F.3d 1108 (9th Cir. 2004).

Stephanie Showalter, J.D., M.S.E.L.

In March, the Ninth Circuit Court of Appeals delayed the planned expansion of an oil refinery dock in Washington State until the U.S. Army Corps of Engineers (Corps) prepares a full Environmental Impact Statement (EIS) and reassesses the permit under the Magnuson Amendment. This is a case of first impression with respect to the Magnuson Amendment.

Background
In 1969, BP West Coast Products (BP) received a permit from the Corps to build a dock for the delivery of crude oil. BP’s refinery was built in 1971 in Cherry Point, Washington. The original dock design called for two platforms, one for the unloading of crude oil and one for loading the refined product. During construction, however, BP chose to build only the southern platform which was altered to handled both the unloading of crude and loading of refined product.

In 1992, BP applied for a permit from the Corps to build the northern platform and return to the refinery’s original plans for separate docks for loading and unloading. During the public comment period, the U.S. Fish and Wildlife Service (FWS) expressed concern that the increase in tanker traffic as a result of the expansion would increase the possibility of a major oil spill. The Lummi Indian Nation and the Nooksack Indian Tribe expressed similar misgivings.

On March 1, 1996, the Corps approved BP’s permit application, finding that the construction of the northern platform would not result in adverse cumulative impacts to fish and wildlife in the Cherry Point area. The Corps claimed that the dock expansion would reduce the risk of oil spill because of a decrease in tanker wait time and the installation of oil spill containment booms around the new platform.1 The Corps determined that the expansion would not “significantly affect the quality of the human environment” and issued a Finding of No Significant Impact (FONSI) under the National Environmental Policy Act (NEPA) thereby excusing the agency from preparing an EIS.2

In 1997, Ocean Advocates contacted the Corps requesting a more thorough analysis of the cumulative impacts of the dock expansion on vessel traffic and whether the permit violated the Magnuson Amendment3 which regulates permits for oil transport terminals in Puget Sound. The Corps denied both requests. Ocean Advocates submitted a second request for reconsideration in 1999.

In 2000, the Corps granted BP a one-year extension to its 1996 permit to complete construction, finding that the dock extension did not violate the Magnuson Amendment because the extension would not increase the facility’s capacity to offload crude oil. The Corps again determined that an EIS was unnecessary. The northern platform is currently operational.

The Lawsuit
Ocean Advocates filed suit against the Corps in November 2000 arguing that BP’s permit violated the Magnuson Amendment and that the Corps violated NEPA by failing to prepare an EIS. The U.S. District Court for the Western District of Washington granted summary judgment in favor of the Corps and BP holding that an EIS was not required because the northern platform would alleviate existing vessel traffic problems and traffic would increase regardless of BP’s planned expansion. The court also agreed with the Corps that the permit did not violate the Magnuson Amendment. Ocean Advocates appealed the district court’s decision to the Ninth Circuit.

Preliminary Matters
On appeal, BP argued that Ocean Advocates lacked standing. To bring a cause of action in federal court, a plaintiff must show s/he has suffered an “injury in fact” that is traceable to the challenged action of the defendant and redressable by a favorable decision.4 The Ninth Circuit held that Ocean Advocates had standing. In environmental cases, injury in fact is satisfied if an individual or organization provides evidence “that she has an aesthetic or recreational interest in a particular place, or animal, or plant species and that that interest is impaired by a defendant’s conduct.”5 Ocean Advocates’ members have an interest in the Cherry Point area for recreation and wildlife viewing which would be impaired by a major oil spill, which is made more likely by the construction of the northern platform. The court found that Ocean Advocates showed injury in fact clearly traceable to BP’s proposed dock expansion. Finally, Ocean Advocates’ injury is redressable through court action because OA sought an injunction to restrict tanker traffic which, if granted, would reduce OA’s concerns regarding spills and increased traffic.

BP also argued that OA’s action was barred on the basis of laches. Laches is disfavored in environmental cases, but it is an affirmative defense if a defendant can show that the plaintiff lacked diligence in pursuing her claim and that lack of diligence resulted in prejudice to the defendant. The Ninth Circuit held that laches does not bar OA’s action, due to OA’s diligent pursuit of its claim from the Corps’ issuance of the first permit in 1996.

NEPA
Federal agencies must prepare an EIS for “major Federal actions significantly affecting the quality of the human environment.”6 In situations where it is unclear whether the federal action will significantly affect the quality of the human environment, federal agencies may initially prepare an Environmental Assessment (EA). If, through the EA, the agency determines the action will significantly affect the human environment, it must prepare an EIS. If not, it may issue a FONSI. However, an agency must prepare an EIS if significant questions are raised regarding whether a project “may cause significant degradation of some human environmental factor.”7

The Ninth Circuit was not persuaded that the Corps took a “hard look” at the environmental impacts of the proposed dock expansion. The court held that the Corps failed, in both 1996 and 2000, to “provide any reason why an EIS was unnecessary.”8 The Corps simply stated that the project would not have a significant impact on the quality of the human environment. Such a statement alone, without supporting reasons, is insufficient to satisfy the NEPA requirements.

The court found that an EIS is required for the dock expansion. First, in its communications with the Corps, the court found that OA raised a substantial question regarding whether the northern platform might cause significant degradation of the environment. In addition, the court determined that the Corps failed to adequately examine the cumulative effects of multiple projects in the Cherry Point area as required under 40 C.F.R. § 1508.27(b)(7). Finally, an agency must prepare an EIS when the effects of the project are highly uncertain.9 The court determined that the Corps did not have the necessary data to determine whether tanker traffic would increase as a result of the expansion and therefore should have prepared an EIS.

Magnuson Amendment
Under the Magnuson Amendment,

No officer, employee, or other official of the Federal Government shall, or shall have authority to, issue, renew, grant, or otherwise approve any permit, license, or other authority for constructing, renovating, modifying, or otherwise altering a terminal, dock, or other facility in, on, or immediately adjacent to, or affecting the navigable waters of Puget Sound, or any other navigable waters in the State of Washington east of Port Angeles, which will or may result in any increase in the volume of crude oil capable of being handled at any such facility (measured as of the date of enactment of this section [Oct. 18, 1977]), other than oil to be refined for consumption in the State of Washington.10

BP claimed that the northern platform cannot and would not be used to unload crude oil and, therefore, the expansion did not increase the amount of crude oil which could be handled. However, the court held that the phrase “any such facility” refers to more than the northern dock expansion itself. The relevant question is whether the permit enabled BP to increase the capacity of its entire Cherry Point Marine Terminal to handle more crude oil.

The Ninth Circuit could not answer this question because it was not clear from the record whether the terms of BP’s permit limited BP’s ability to handle crude oil at the northern platform. While BP argued that the platform was physically incapable of handling crude oil, BP’s permit does not clearly prohibit BP from modifying the new platform to handle crude oil. If the permit allows BP to modify the platform, then the Corps may have increased the capacity of the Cherry Point terminal to handle crude oil in violation of the Magnuson Amendment.
To determine whether the new platform could handle crude oil, the court remanded the case to the district court to answer the following questions:

1. Is it physically possible for the new platform to handle crude oil today?
2. Is is physically possible to modify the new platform such that it could handle crude oil, without requiring additional permitting?11

If the answer to either of these questions is yes, then the permit violates the Magnuson Amendment and is invalid. Stated another way, BP and the Corps must prove on remand that the new platform cannot handle crude oil without additional permits from the Corps.

The Ninth Circuit also directed the district court to investigate whether the permit allowed BP to increase the berthing capacity of the Cherry Point Terminal. If so, the increased berthing capacity could potentially increase the capacity of the terminal to handle crude oil, again in violation of the Magnuson Amendment.

Conclusion
Ocean Advocates had standing to bring suit against BP and the Corps for violations of NEPA and the Magnuson Amendment. The Ninth Circuit remanded the case to the district court directing the Corps to (1) prepare a full EIS considering the impact of reasonably foreseeable increases in tanker traffic on the environment around the terminal and (2) reevaluate the permit in light of a potential Magnuson Amendment violation.

Endnotes
1. Ocean Advocates v. U.S. Army Corps of Engineers, 361 F.3d 1108, 1116 (9th Cir. 2004).
2. 40 C.F.R. § 1501.4 (2004).
3. 33 U.S.C. § 476 (2004).
4. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000).
5. Ocean Advocates, 361 F.3d 1108, 1120 (citing Ecological Rights Found. v. Pac. Lumber Co., 230 F.3d 1141, 1147 (9th Cir. 2000)).
6. 42 U.S.C. § 4332(2)(C) (2004).
7. Idaho Sporting Cong. v. Thomas 137 F.3d 1146, 1149 (9th Cir. 1998).
8. Ocean Advocates, 361 F.3d 1108, 1125-26.
9. 40 C.F.R. § 1508.27(b)(5) (2004).
10. 33 U.S.C. § 476(b) (2004) (emphasis added).
11. Ocean Advocates, 361 F.3d 1108, 1132-33.

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