On September 28, 2011 the Interior Board of Land Appeals of the US Department of Interior (Board of Appeals) took the unusual step of setting aside a decision of the Bureau of Land Management (BLM) denying three right-of-way (ROW) applications filed by CAM-Colorado, LLC and CAM Mining LLC (hereinafter CAM), both subsidiaries of Rhino Energy of Lexington, Kentucky. The Board of Appeals set aside the decision, on the grounds that the BLM failed to support their decision based upon a properly compiled administrative record.
CAM is developing a new underground coal mine project, known as Red Cliff, located in Northwestern Colorado, which would produce more than 8 million tons of clean coal per year to be transported by rail. The draft Environmental Impact Statement expressly acknowledged that the purpose and need for this project is to provide better access to CAM’s existing coal leases in the area immediately adjacent to Red Cliff, as well as potential federal coal leases within the Red Cliff area. Access requires ROWs on BLM lands for surface facilities and linear features essential for the processing and transport of the coal.
CAM, at BLM’s instruction, filed its first ROW application in 2005 seeking land use authorization for a water pipeline, coal load-out facility, railroad line and associated access roads. Almost a year later, CAM filed an application to lease 11,735 acres of federal coal. In 2009, CAM filed two other ROW applications, which included additional overland access. In 2010, after more than five years of statutory reviews by BLM and third-party contractors (at CAM’s expense), BLM abruptly asked CAM to withdraw its ROW applications. CAM declined and, in April 2011, the BLM denied CAM’s ROW applications with BLM asserting for the first time there was no need for the ROWs unless and until CAM had been awarded new federal coal leases (the Decision).
In May 2011, Squire Sanders, on CAM’s behalf, filed an appeal of the Decision with the Board of Appeals. Two weeks later, the BLM transmitted to the Board of Appeals a 60,000- page administrative record, but refused to provide the same record to CAM – even after CAM sought and obtained a Board order requiring the BLM to produce the record to CAM.
After months of litigating Freedom of Information Act and administrative procedure issues, the BLM moved in August for the Board’s permission to withdraw some documents from the record and to add other documents. CAM responded with an unprecedented cross-motion to vacate the Decision, reinstate the ROW applications and remand the case to the BLM. After extensive briefing and parallel FOIA proceedings, including preparation by Squire Sanders of a draft complaint for mandamus to be filed in federal court, on September 28, the Board of Appeals issued its order granting CAM’s cross-motion in all respects.
The Board directed that the BLM “[o]n remand, …should consider the matters raised in this appeal [that is, the merits of the appeal]. Should BLM again reject the ROW applications, it should clearly set forth its rationale for doing so in its decision and provide appellants the right of appeal. If an appeal is filed, BLM shall properly compile the administrative record, forward it to the Board, and make a copy available for appellants.” (Emphasis in original).
This unusual Decision by the Board of Appeals is a significant success for CAM and ensures that the BLM will need to properly consider the merits of the ROW applications on remand. The grant also is important precedent for other applications before the BLM and can be relied upon to challenge a BLM decision where the basis of the agency action is uncertain in any material respect or is not adequately supported by the administrative record compiled by the agency.