Minard Run Oil Company v. US Forest Ser ( 2013 )

  •                                                            NOT PRECEDENTIAL
                             UNITED STATES COURT OF APPEALS
                                  FOR THE THIRD CIRCUIT
                                           No. 12-4160
                           MINARD RUN OIL COMPANY;
                       ALLEGHENY FOREST ALLIANCE;
                       COUNTY OF WARREN, PENNSYLVANIA
             UNITED STATES FOREST SERVICE, an agency of the U.S. Department of
     Agriculture; ABIGAIL R. KIMBELL, in her official capacity as Chief of the U.S. Forest
      Service; KENT P. CONNAUGHTON, in his official capacity as Regional Forester for
    the U.S. Forest Service, Eastern Region; LEANNE M. MARTEN, in her official capacity
                     as Forest Supervisor for the Allegheny National Forest;
                       On Appeal from the United States District Court
                           for the Western District of Pennsylvania
                                (D.C. Civil No. 1-09-cv-00125)
                        District Judge: Honorable Sean J. McLaughlin
                               Argued on September 11, 2013
                             (Opinion Filed: September 26, 2013)
            Before: RENDELL, JORDAN and GREENAWAY, JR., Circuit Judges
    Marianne G. Dugan, Esquire (Argued)
    259 East 5th Avenue
    Eugene, OR 97401
                        Counsel for Appellants
    J. Michael Klise, Esquire
    R. Timothy McCrum, Esquire (Argued)
    Thomas R. Lundquist, Esquire
    Providence Spina, Esquire
    Crowell & Moring, LLP
    1001 Pennsylvania Avenue, N. W.
    Washington, DC 2004-2505
    Steven J. Lechner, Esquire
    Mountain States Legal Foundation
    2596 South Lewis Way
    Lakewood, CO 80227
    Matthew L. Wolford, Esquire
    638 West Sixth Street
    Erie, PA 16507
                        Counsel for Appellees
    RENDELL, Circuit Judge:
           The Allegheny Defense Project and Sierra Club (collectively “Appellants”) appeal
    from the District Court’s order granting summary judgment for the Minard Run Oil
    Company and Pennsylvania Independent Oil and Gas Association (collectively
    “Appellees”), essentially converting a preliminary injunction into a declaratory judgment.
    The issue raised on appeal is whether the District Court properly applied the law of the
    case doctrine to preclude arguments raised by Appellants in their cross-motion for
    summary judgment. For the reasons that follow, we will affirm the District Court’s order.
           This case arises from a dispute over the split-estate property rights of the federal
    surface owner and private mineral rights owners in the Allegheny National Forest
    (“ANF”). The facts of the case have already been extensively detailed in preceding
    opinions, so we will only summarize facts relevant to this appeal.
           The United States acquired the surface estates that now constitute the ANF
    pursuant to the Weeks Act of 1911. While the U.S. Forest Service (“the Service”)
    manages the surface of the ANF, the mineral rights in most of the ANF are privately
    owned. From 1980 until recently, the Service and private mineral rights owners utilized a
    cooperative process to manage access to and use of the surface to drill for oil and gas.
    Sixty days prior to any planned drilling, mineral rights owners would provide notice to
    the Service, and the Service would then issue a Notice to Proceed (“NTP”),
    acknowledging receipt of the owners’ notice and memorializing any agreements relating
    to the planned drilling. In 2008, a number of environmental groups, including the Sierra
    Club, filed a lawsuit against the Service, stating that its policy of issuing NTPs
    constituted a “major federal action[] significantly affecting the quality of the human
    environment,” under the National Environmental Policy Act of 1969 (“NEPA”), 42
    U.S.C. § 4332(c), and that therefore an NTP could not lawfully be issued before the
    appropriate environmental analysis under NEPA (an environmental impact study, or
    “EIS”) was conducted. In 2009, the parties to that litigation entered into a Settlement
    Agreement, requiring that the Service conduct the appropriate NEPA analysis prior to
    issuing further NTPs. Subsequently, the Service issued a statement to oil and gas
    companies operating in the forest, stating that no new drilling would be authorized until
    the forest-wide EIS was completed.
           In June 2009, mineral rights owners, including Appellees, filed a complaint in the
    District Court arguing that the de facto ban on drilling in the ANF exceeded the authority
    of the Service because a NEPA analysis was not required as a matter of law. The District
    Court granted their motion for a preliminary injunction, and on appeal, we affirmed in a
    precedential opinion. See Minard Run Oil Co. v. U.S. Forest Service, No. 09-125, 
    2009 WL 4937785
     (W.D. Pa. Dec. 15, 2009) (“Minard Run II”); Minard Run Oil Co. v. U.S.
    Forest Service, 
    670 F.3d 236
     (3d Cir. 2012) (“Minard Run III”). We reasoned that: (1)
    under the Weeks Act, both outstanding and reserved private mineral rights are subject to
    federal control only to the extent Service regulations are contained in the written
    instrument of conveyance; (2) the issuance of an NTP is, therefore, not a major federal
    action under NEPA; and (3) consequently, an EIS need not be completed prior to issuing
    an NTP. Minard Run III, 670 F.3d at 251-52, 254.
           Thereafter, the mineral rights owners moved for summary judgment in the case
    before the District Court, requesting entry of judgment in their favor, conversion of the
    preliminary injunction order into a final declaratory judgment, and a permanent
    injunction against the Service. Appellants filed a cross-motion for summary judgment
    seeking vacation of the preliminary injunction order and judgment in their favor. The
    District Court granted the mineral rights owners’ motion in part (it denied the request for
    a permanent injunction), concluding that the arguments advanced by Appellants were
    “precluded by the application of the law of the case doctrine and/or otherwise lack[ed]
    merit” because our prior opinion had decided the very issue before it. Minard Run Oil
    Co. v. U.S. Forest Service, 
    894 F. Supp. 2d 642
    , 654 (W.D. Pa. 2012) (“Minard Run IV”).
    The Court vacated the Settlement Agreement, and converted its preliminary injunction
    order into a final declaratory judgment on the merits. It is this order that is challenged on
           Appellants argue that, for three reasons, the District Court improperly applied the
    law of the case doctrine to this Court’s ruling in Minard Run III : (1) the Court did not
    provide the parties with notice that its ruling on the preliminary injunction motion would
    reach the merits; (2) in general, a decision on a preliminary injunction does not constitute
    the law of the case for purposes of the merits since the standard for a preliminary
    injunction is “likelihood of success,” not actual success; and (3) the Minard Run III panel
    only reached the merits on the specific question of whether the Service’s moratorium was
    required by NEPA and consistent with the APA. Finally, Appellants argue that even if the
    law of the case doctrine is applicable to Minard Run III, an exception applies as
    “reconsideration is necessary to prevent clear error or manifest injustice.” Appellants’ Br.
    at 54 (quoting ACLU v. Mukasey, 
    534 F.3d 181
    , 188 (3d Cir. 2008) (internal quotation
    marks omitted)). These arguments are unavailing.
           With respect to Appellants’ first and second arguments, the District Court properly
    considered our holdings in ACLU v. Mukasey, and Pitt News v. Pappert, 
    379 F.3d 96
    Cir. 2004), in determining that the Minard Run III court had not stopped its analysis after
    concluding that Plaintiff-Appellees were likely to succeed on the merits of the
    preliminary injunction, but instead had decisively resolved the legal claims presented on
    appeal. See Minard Run IV, 894 F. Supp. 2d at 653-54. In Pitt News, we clearly stated:
           [A]lthough a panel entertaining a preliminary injunction appeal generally
           decides only whether the district court abused its discretion in ruling on the
           request for relief and generally does not go . . . any farther than is necessary
           to determine whether the moving party established a likelihood of success,
           a panel is not always required to take this narrow approach. If a preliminary
           injunction appeal presents a question of law and the facts are established or
           of no controlling relevance, the panel may decide the merits of the claim.
    379 F.3d at 104-105 (citations and internal quotation marks omitted). This principle was
    reaffirmed in Mukasey, where we expressly held that portions of a decision on an appeal
    of a preliminary junction had in fact reached the merits of the underlying claim. 534 F.3d
    at 188-90. To the extent that Appellants argue that they were not given adequate notice
    that the decision on the motion for a preliminary injunction would reach the merits,
    Mukasey and Pitt News served as notice that this was a real possibility.1
      Appellants state that the District Court frustrated the purpose of Rule 65(a)(2) of the
    Federal Rules of Civil Procedure in failing to provide notice that it was transforming a
    preliminary injunction proceeding into summary judgment. Appellants’ Br. at 50-51.
    First, the District Court did not transform the preliminary injunction hearing into a
    hearing on summary judgment. The District Court, in applying the law of the case in
    Minard Run IV, did not state that it had reached the merits of the claims in its
    consideration of the preliminary injunction; it held that the this Court had done so on the
    appeal in Minard Run III. Second, Rule 65(a)(2) describes courts’ right to consolidate a
    trial on the merits with a hearing on a preliminary injunction. The Rule makes no mention
    of summary judgment, rather it emphasizes that courts must preserve any party’s right to
    a jury trial. In reaching the merits of the claims presented, this Court acted squarely
    within the bounds of its authority, particularly given the extensive briefing and hearings
    spanning several months that had taken place.
           Furthermore, these opinions provided notice that such a decision would have
    binding effect on decisions by subsequent panels. In Pitt News, we stated, “[I]f the first
    panel does not stop at the question of likelihood of success and instead addresses the
    merits, the later panel, in accordance with our Court’s traditional practice, should regard
    itself as bound by the prior panel opinion.” 379 F.3d at 105 (referring to the law of the
    case and Third Circuit Internal Operating Procedure 9.1).2 Any conclusions as to the
    merits of Appellants’ claims reached by the Minard Run III panel are binding upon this
    Court since the panel made a precedential ruling.
           This brings us to the question raised by Appellants’ third argument, which is: what
    conclusions on the merits did the Minard Run III panel actually reach? Appellants argue
    that the only conclusion on the merits, rather than on the likelihood of success, that the
    Court reached was that the Service’s moratorium on issuing NTPs, specifically, was
    unlawful. Appellants’ Br. at 53. Appellants seem to suggest that if the panel wished to
    rule on the merits on any other legal issues, it should have explicitly stated its intention to
    do so. This simply is not required of the Court. The panel in Minard Run III could not
    have been more clear in indicating that it was not stopping its analysis after concluding
    that Appellees were likely to succeed on the merits of their preliminary injunction, but
    rather was ruling on the underlying legal claims.
      Third Circuit Internal Operating Procedure 9.1 reads, “It is the tradition of this court
    that the holding of a panel in a precedential opinion is binding on subsequent panels.
    Thus, no subsequent panel overrules the holding in a precedential opinion of a previous
    panel. Court en banc consideration is required to do so.” Though the District Court was
    not bound by Internal Operating Procedure 9.1, this Court undoubtedly is.
           We will not repeat Judge McLaughlin’s thorough analysis of the binding effect of
    the Minard Run III opinion, but will merely add that Appellants in their briefing, appear
    to concede that the Court reached the merits on other legal claims. For example,
    Appellants state, “The district court and this Court’s preliminary [injunction] ruling
    properly found that the USFS’s moratorium was unreasonable and illegal. By going
    further, both rulings unnecessarily and improperly construed the Weeks Act as restricting
    USFS’s ability to reasonably regulate access to the surface in order to protect the federal
    estate.” Appellants’ Br. at 21-22. To call the Court’s construction of the Weeks Act
    unnecessary, or to imply that it was dicta, is essentially to claim that a court may never
    actually reach the merits at the preliminary injunction stage. That is not the case. Cf.
    Thornburgh v. Am. Coll. of Obstetricians & Gynecologists, 
    476 U.S. 747
    , 756-57 (1986),
    overruled on other grounds, Planned Parenthood of Se. Pa. v. Casey, 
    505 U.S. 833
    (1992); Pitt News, 379 F.3d at 104-05.
           In their cross-motion for summary judgment, Appellants pointed to legislative
    history and state law which was not presented at the preliminary injunction stage. They
    also directed the District Court to reconsider the Minard Run III panel’s interpretation of
    a number of cases including Kleppe v. New Mexico, 
    426 U.S. 529
     (1976) and United
    States v. Srnsky, 
    271 F.3d 595
     (4th Cir. 2001). These arguments could have been raised
    earlier and are precisely the kinds of arguments precluded from consideration under the
    law of the case.3 Accordingly, the District Court did not need to address these arguments
    unless an exception to the doctrine applied.4
           We may revisit a legal question which has already been resolved where any of the
    following “extraordinary circumstances” exist: “‘(1) there has been an intervening change
    in the law; (2) new evidence has become available; or (3) reconsideration is necessary to
    prevent clear error or a manifest injustice.’” Mukasey, 534 F.3d at 188 (quoting Council
    of Alternative Political Parties v. Hooks, 
    179 F.3d 64
    , 69 (3d Cir. 1999)). Appellants
    contend that the third exception to the application of the law of the case is implicated
    here. They state that this Court’s ruling that Section 9 of the Weeks Act provides that
    reserved mineral rights are subject only to regulations in the instrument of conveyance,
    was clearly erroneous. In Minard Run III, however, Judge Roth provided ample
    reasoning for the Court’s statutory interpretation, which Judge McLaughlin quoted at
    length in Minard Run IV. See Minard Run IV, 894 F. Supp. 2d at 657-58 (quoting Minard
    Run III, 670 F.3d at 251-52). To the extent that Appellants simply disagree with the
      Appellants also suggest that they have further developed the factual record by
    presenting deeds containing different language than the 1911 rules and regulations
    previously considered by this Court, but these deeds do not change the binding effect of
    our prior interpretation of the reserved rights. Our determination that the 1911 regulations
    were the standard version of the rules contained in the deeds remains uncontradicted. See
    Minard Run III, 670 F.3d at 254 n.12. As stated by Judge McLaughlin in Minard Run IV,
    “the Third Circuit has already determined as a matter of law that the 1911 rules and
    regulations contained in the ANF deeds do not provide the federal government with the
    broad regulatory authority claimed by the . . . Defendants.” 894 F. Supp. 2d at 663.
      Appellants argue that the fact that the District Court selectively applied the law of the
    case doctrine in Minard Run IV, sometimes addressing the merits of Appellants’ claims,
    shows that the law of the case was not applicable at all. This argument is unconvincing;
    the District Court did not need to address any of the new arguments presented by
    Appellants, but in doing so merely emphasized its agreement with the conclusions
    reached in Minard Run III.
    conclusion reached, they could have sought en banc review. This panel will not disturb
    the well-reasoned legal conclusion reached by the prior panel.
           Because we find that Judge McLaughlin properly applied the law of the case to
    this Court’s opinion in Minard Run III, we will affirm the District Court’s order.