A recent dispute between a federal agency, states, and industry and environmental groups sheds light on effective arguments to counter a party’s attempt to prematurely obtain a final judgment, as well as how a party’s missteps during discovery can negatively impact its future motions during the lifetime of the case.

As previously reported, in the spring of 2015, the BLM issued new rules governing fracking on federally owned and tribal lands. Two industry groups–the Independent Petroleum Association of American and the Western Energy Alliance–and four states–Wyoming, North Dakota, Colorado, and Utah–filed suits challenging both the BLM’s authority to regulate fracking and the process by which the BLM created the rules.  A number of environmental groups, including the Sierra Club and Earthworks, intervened as respondents. These suits were consolidated before the District Court for the District of Wyoming.

In June, the plaintiffs moved for a preliminary injunction to prevent the implementation of the BLM’s fracking rules while the lawsuit was ongoing. The district court granted the preliminary injunction in September, finding that they were likely to succeed on the merits of their case against the BLM’s rules.  In his opinion, the judge noted that at that point, he “did not believe” that the agency had authority to promulgate the regulations.

While the preliminary injunction dispute was ongoing, the BLM was preparing to file its administrative record, which includes all documents that were considered by agency decision-makers in formulating the rule. Although minutiae of discovery deadlines are not usually of interest to many readers, the agency’s actions in gathering the administrative record would later become a liability in their efforts to hasten a final order, and therefore the discovery process merits a brief overview. Because the District of Wyoming’s local rules provide the agency 90 days to submit the record to the court, the agency was originally supposed to submit the record by June 24, 2015. However, citing its lack of sufficient resources, the agency twice sought extensions to this deadline, extending the due date to August 28. The BLM submitted an incomplete record on August 28, and upon an order from the court to supplement the record, it promised to supplement the record by mid-January 2016.

After the preliminary injunction was issued in September, the BLM and the environmental groups made separate and apparently uncoordinated attempts to get a final order for all or part of the case. On November 16, the environmental groups filed a motion requesting that the court consolidate the preliminary injunction order “with a final judgment on the merits.” In their motion, the groups argued that (1) the court had “ruled as a matter of law” that the BLM did not have the authority to regulate fracking; (2) the administrative record was “immaterial” to this determination; (3) “further proceedings … would be unnecessary and wasteful”; and (4) petitioner states and industry groups would not be prejudiced because consolidation “will give them all the relief they can obtain after further proceedings on the merits: a decision setting aside the Rule as unlawful.”

In separate motions, the states and the industry groups both opposed the environmental groups’ attempt to convert the preliminary injunction order into an appealable final order. Both parties noted that the case was not limited to purely legal issues, and that there were disputed issues of fact. Moreover, they emphasized that they did not have notice that the preliminary injunction order might be consolidated with a final order, and as such they had not had a fair opportunity to review the complete administrative record and fully develop all arguments against the BLM’s final rule.

Two weeks after the environmental groups submitted their motion for consolidation, the BLM launched its own attempt to acquire a final order on the merits. Rather than seeking a final order on the entire case, the agency asked the court to bifurcate from the rest of the case the question of whether the BLM has authority to regulate fracking. Under the agency’s plan, the court would implement an expedited briefing schedule on the agency’s authority, while the remainder of the case (such as whether the agency’s actions were arbitrary or capricious) would proceed upon completion of the administrative record. The agency argued that bifurcation would promote judicial economy and the interests of justice by swiftly bringing about a “clear and final judgment.” Additionally, the BLM claimed that bifurcation would not prejudice the petitioner states and industry groups, because if the district court or the Tenth Circuit determined that the agency did have authority to regulate fracking, the petitioners could fully brief their other arguments at that time.

The states and industry organizations filed separate motions opposing bifurcation, both arguing that bifurcation would create piecemeal litigation that would prejudice them. Additionally, both oppositions pointed to the government’s own role in postponing the resolution of the litigation. The states indicated that any delays “are tied” to the BLM’s failure to submit a complete administrative record, while the industry groups took a harder line, arguing that the BLM was “ask[ing] the Court to resolve – and Petitioners to bear the burden of – a problem entirely of [the BLM’s] own making.”

In two successive opinions filed in December, the district court denied both the environmental group’s motion for a final order and the BLM’s motion for bifurcation. The commonalities between the two opinions help identify the arguments that may be most persuasive in defeating a motion to hasten a final judgment.

  • Prejudice to the counterparty: The court found that either a final judgment or bifurcation would prejudice the petitioners because it would deny them the full opportunity to “develop all arguments and evidence supporting their petitions for review.”
  • Any benefits outweighed by potential risk: The court expressed an unwillingness to “assume” that the BLM’s administrative record is not relevant to whether the agency has authority to regulate fracking. Whatever hypothetical efficiencies gained by issuing a final order or bifurcating the issue of the BLM’s authority could not outweigh the risk of the prejudice that would result if the court expedited the case without the administrative record, only to discover later that the record does contain relevant evidence.
  • “Unclean hands”: In response to the BLM’s motion, the court was clearly persuaded by the states’ and industry groups’ argument that the agency had played a role in the delays to that date. The court noted that the delay “was largely a problem of [the BLM’s] own making,” and that the “most efficient way to resolve this case is to have the BLM finally lodge a complete administrative record which will trigger the briefing schedule set forth by this Court’s local rules.”

If the BLM actually submits the administrative record next week, the case may be briefed and ready for judgment as soon as April.