UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT · 21/06/2016 · Civil Action Nos....

Nos. 15-8126, 15-8134

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

STATE OF WYOMING, et al.,

Petitioner-Appellees, v.

DEPARTMENT OF THE INTERIOR, et al., Respondent-Appellants,

SIERRA CLUB, EARTHWORKS, WESTERN RESOURCE ADVOCATES, CONSERVATION COLORADO EDUCATION FUND, THE WILDERNESS

SOCIETY, and SOUTHERN UTAH WILDERNESS ALLIANCE. Intervenor-Respondent-Appellants.

On Appeal from the United States District Court for the District of Wyoming Civil Action Nos. 2:15-CV-00041-SWS, 2:15-CV-00043-SWS

The Honorable Scott W. Skavdahl _________________________________________________________________

INTERVENOR-RESPONDENT-APPELLANTS’

REPLY BRIEF _________________________________________________________________

Michael S. Freeman Earthjustice 633 17th Street, Suite 1600 Denver, CO 80202 (303) 623-9466 (phone) (303) 623-8083 (fax) [email protected] Attorney for Intervenor-Respondent-Appellants Sierra Club, et al.

Nathan Matthews Sierra Club 2101 Webster Street, Suite 1300 Oakland, CA 94612 (415) 977-5695 (phone) (510) 208-3140 (fax) [email protected] Attorney for Intervenor-Respondent-Appellant Sierra Club

June 20, 2016

ORAL ARGUMENT REQUESTED

Appellate Case: 15-8126 Document: 01019641007 Date Filed: 06/20/2016 Page: 1

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .................................................................................... ii ARGUMENT ............................................................................................................. 1 I. INTRODUCTION .......................................................................................... 1 II. BLM HAS AUTHORITY TO ISSUE THE RULE ........................................ 3 III. THE RULE IS NOT ARBITRARY AND CAPRICIOUS ............................. 5

A. The Administrative Record Supports BLM’s Decision To Update Its 30-Year-Old Regulations ................................................................. 5 B. BLM Did Not Disregard Existing State Regulations .......................... 10 C. Evidence Regarding Frack Hits Supports The Rule ........................... 12

D. The Rule’s Mechanical Integrity Test For Wellbores Is Not Arbitrary And Capricious .................................................................... 14

E. The Rule’s “Usable Water” Definition Is Not Arbitrary and

Capricious ............................................................................................ 17

F. It Is Not Arbitrary And Capricious For The Rule To Treat Confidential Information In Fracturing Approval Applications

Differently From Post-Fracturing Disclosures .................................... 19 G. North Dakota’s Split Estate Theory Is Meritless ................................ 21

IV. INDUSTRY DOES NOT FACE IRREPARABLE HARM FROM THE RULE ............................................................................................................. 22 V. NO INJUNCTION WAS NEEDED TO PREVENT IRREPARABLE HARM TO THE STATES ............................................................................ 26 CONCLUSION ........................................................................................................ 29


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TABLE OF AUTHORITIES

Page(s)

Cases

A.O. Smith Corp. v. Fed. Trade Comm’n, 530 F.2d 515 (3d Cir. 1976) ......................................................................... 24, 25

Am. Mining Cong. v. Thomas, 772 F.2d 617 (10th Cir. 1985) ............................................................................ 13

Am. Hospital Ass’n v. Harris, 625 F.2d 1328 (7th Cir. 1980) ............................................................................ 23

Cent. Valley Chrysler-Plymouth v. Cal. Air Res. Bd., No. CV-F-02-5017 REC/SMS, 2002 WL 34499459 (E.D. Cal.

June 11, 2002) ..................................................................................................... 24 Chamber of Commerce of the U.S. v. Edmondson,

594 F.3d 742 (10th Cir. 2010) ...................................................................... 24, 25 Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,

467 U.S. 837 (1984) .............................................................................................. 3 Davis v. Mineta,

302 F.3d 1104 (10th Cir. 2002) ............................................................................ 5

Dex Media W., Inc. v. City of Seattle, 696 F.3d 952 (9th Cir. 2012) ................................................................................ 3

Direct Mktg. Ass’n v. Huber, No. 10-cv-01546-REB-CBS, 2011 WL 250556 (D. Colo. Jan. 26, 2011) ................................................................................................................... 24

Entek GRB, LLC v. Stull Ranches, LLC, 763 F.3d 1252 (10th Cir. 2014) .......................................................................... 21

Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112 (2d Cir. 2005) ............................................................................... 23

Hydro Res., Inc. v. EPA, 608 F.3d 1131 (10th Cir. 2010) .......................................................................... 22


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Kiowa Indian Tribe of Okla. v. Hoover, 150 F.3d 1163 (10th Cir. 1998) ............................................................................ 3

Miami-Dade Cty. v. EPA, 529 F.3d 1049 (11th Cir. 2008) .......................................................................... 13

Nat’l Med. Care, Inc. v. Shalala, No. 95-0860 (WBB), 1995 WL 465650 (D.D.C. June 6, 1995) ........................ 24

Negonsott v. Samuels, 933 F.2d 818 (10th Cir. 1991) .............................................................................. 5

Okla. ex rel. Okla. Tax Comm’n v. Int’l Registration Plan, Inc., 264 F. Supp. 2d 990 (W.D. Okla. 2003) ............................................................. 28

Planned Parenthood of Kan. & Mid-Mo. v. Moser, 747 F.3d 814 (10th Cir. 2014) ............................................................................ 25

Ron Peterson Firearms, LLC v. Jones, 760 F.3d 1147 (10th Cir. 2014) ............................................................................ 7

S. Utah Wilderness All. v. Dabney, 222 F.3d 819 (10th Cir. 2000) .............................................................................. 3

Smoking Everywhere, Inc. v. U.S. Food & Drug Admin., 680 F. Supp. 2d 62 (D.D.C. 2010) ...................................................................... 24

Tafas v. Dudas, 511 F. Supp. 2d 652 (E.D. Va. 2007) ................................................................. 24

Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994) ............................................................................................ 24

Valley Cmty. Pres. Comm’n v. Mineta, 373 F.3d 1078 (10th Cir. 2004) ............................................................................ 5

Wis. Gas Co. v. Fed. Energy Regulatory Comm’n, 758 F.2d 669 (D.C. Cir. 1985) ............................................................................ 24

Wyoming v. U.S. Dep’t of Interior, 674 F.3d 1220 (10th Cir. 2012) .................................................................... 27, 28


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Statutes

5 U.S.C. § 553 .......................................................................................................... 12

30 U.S.C. § 225 .......................................................................................................... 4

30 U.S.C. § 229a(a) .................................................................................................... 4

43 U.S.C. § 1701(a)(8) ........................................................................................... 4–5

43 U.S.C. § 1712(c)(8) ............................................................................................... 4

43 U.S.C. § 1732(b) ................................................................................................... 4

43 U.S.C. § 1740 ........................................................................................................ 4

Federal Regulations

40 C.F.R. § 144.3 ..................................................................................................... 17

43 C.F.R. §§ 2.26–2.36 ...................................................................................... 21, 26

43 C.F.R. § 3162.3-2 ................................................................................................ 13

43 C.F.R. § 3162.3-3(c)–(d) ..................................................................................... 13

Federal Register

53 Fed. Reg. 46,798 (Nov. 18, 1988) .......................................................... 14, 15, 17

72 Fed. Reg. 10,308 (Mar. 7, 2007) ......................................................................... 21

77 Fed. Reg. 27,691 (May 11, 2012) ....................................................................... 12

78 Fed. Reg. 31,636 (May 24, 2013) ....................................................................... 12

80 Fed. Reg. 16,128 (Mar. 26, 2015) ................................................................passim

Legislative History

H.R. Rep. No. 93-1185 (1974), reprinted in 1974 U.S.C.C.A.N. 6454 ............. 17–18


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State Regulations

Colo. Code Regs. § 404-1:301 et seq. ...................................................................... 11

Colo. Code Regs. § 404-1:901 et seq. ...................................................................... 11

N.D. Admin. Code 43-02-03-01 et seq. .................................................................. 11

N.D. Admin. Code 43-02-03-07 .............................................................................. 22

Wyo. Admin. Code Oil Gen. Ch. 3 § 1 et seq. ........................................................ 11

Wyo. Admin. Code Oil Gen. Ch. 4 § 1 et seq. ........................................................ 11

Other

Br. of Colo. Oil & Gas Conservation Comm’n, City of Longmont v. Colo. Oil & Gas Ass’n, 369 P.3d 573 (Colo. 2016) (No. 15SC667) ..................................... 11


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ARGUMENT

I. INTRODUCTION

The Bureau of Land Management (BLM) hydraulic fracturing rule, 80 Fed.

Reg. 16,128 (Mar. 26, 2015) (the Rule) is not an unlawful federal power grab, as

Petitioner-Appellees contend. Multiple statutes authorize, and indeed require,

BLM to comprehensively regulate oil and gas development on federal lands. Nor

is there anything new or unusual about “overlapping” state and federal regulations.

Federal regulations governing mineral development on public lands have co-

existed with state oil and gas regulations for decades. The Rule is simply a long-

overdue update of BLM’s rules to address the recent hydraulic fracturing boom.

Petitioner-Appellees Western Energy Alliance and Independent Petroleum

Association of America (Industry), and Colorado, Wyoming, Utah, and North

Dakota (the States) largely repeat the district court’s errors without responding to

numerous counterarguments. Their argument that BLM lacks authority to issue the

Rule ignores the plain language and history of the relevant statutes, along with

decades of caselaw and regulations showing that the agency has a broad mandate

to manage mineral development and protect the environment on federal lands.

Nothing in the Safe Drinking Water Act (SDWA) or any other statute carves out an

exception for hydraulic fracturing.


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Moreover, Petitioner-Appellees’ argument that the Rule is arbitrary and

capricious attacks a straw man while ignoring the Rule’s actual provisions and

much of the evidence in the administrative record. Numerous record documents

support the benefits of updated well construction standards, limits on waste pits,

prior approval of hydraulic fracturing operations, and disclosure of fracturing

chemicals. Petitioner-Appellees largely disregard this evidence, which was raised

below by Intervenor-Appellants Sierra Club et al. (the Citizen Groups) and BLM.

Petitioner-Appellees’ claims of irreparable harm are similarly flawed,

ignoring the same regulations and controlling caselaw that the district court

overlooked.

Petitioner-Appellees clearly would prefer that BLM abdicate its statutory

responsibilities and allow states to manage oil and gas development on federal

lands. But that policy disagreement does not support enjoining the Rule. This

court should reverse the preliminary injunction.1

1 Petitioner-Appellees’ assertion that this appeal will be mooted by a final judgment from the district court is rank speculation. District court merits briefing was completed two months ago and the court has given no indication when it may rule, or whether such a ruling will be followed by remedy proceedings. Industry made the same mootness prediction earlier this year when it opposed Appellants’ request for a May 2016 oral argument date and unsuccessfully moved to dismiss or stay this appeal. See, e.g., Indus. Mot. to Dismiss 6–11 (Feb. 10, 2016); Indus. Resp. to Joint Mot. to Expedite Arg. 2, 10 (Feb. 19, 2016). Had Industry’s meritless arguments not delayed oral argument, this appeal could already have been decided.


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II. BLM HAS AUTHORITY TO ISSUE THE RULE

Petitioner-Appellees are unlikely to succeed on the merits because the plain

language of the Mineral Leasing Act (MLA) and Federal Land Policy and

Management Act (FLPMA) grant BLM broad authority to manage all aspects of

oil and gas development on federal lands. See Citizen Groups’ Opening Br. 8–14

(Mar. 21, 2016) (Op.Br.) (discussing Chevron, U.S.A., Inc. v. Nat. Res. Def.

Council, Inc., 467 U.S. 837, 842 (1984) (“If the intent of Congress is clear, that is

the end of the matter.”)). Congress’s 2005 amendment of SDWA—which

addressed the authority of a different agency to regulate hydraulic fracturing under

a completely different statute—did not limit BLM’s authority over federal lands.

Id. at 15–20. Moreover, BLM’s reasonable and long-standing interpretation of the

MLA and FLPMA is entitled to deference under Chevron Step 2. Id. at 20–26.2

Petitioner-Appellees have no response to most points the Citizen Groups

make in their opening brief. For example, they do not attempt to defend the district

court’s incorrect premise that BLM previously disavowed its authority over

If the district court does enter final judgment before this injunction appeal is resolved, judicial resources need not be wasted. This Court can consolidate the pending injunction appeal with any appeal from the final judgment, and order supplemental briefing on any new issues presented by the final judgment. See, e.g., Kiowa Indian Tribe of Okla. v. Hoover, 150 F.3d 1163, 1168 (10th Cir. 1998); Dex Media W., Inc. v. City of Seattle, 696 F.3d 952, 955–56 (9th Cir. 2012). 2 North Dakota is incorrect that this court cannot reach Chevron Step 2 because the district court did not do so. Compare North Dakota Br. 26–27 (May 26, 2016) (N.D.Br.) with S. Utah Wilderness All. v. Dabney, 222 F.3d 819, 826–27 (10th Cir. 2000).


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hydraulic fracturing. See id. at 23–26. Petitioner-Appellees do, however, offer a

handful of meritless arguments not articulated by the district court.

First, the States’ theory that the MLA’s purpose does not include protection

of groundwater, Resp. Br. of Wyo., Colo. & Utah 26–27 (May 25, 2016) (St.Br.),

conflicts with the plain language of the statute. See, e.g., 30 U.S.C. § 229a(a)

(authorizing purchase of well casing to protect water usable “for agricultural,

domestic, or other purposes”); id. § 225 (directing agency to prevent “waste” of

minerals, which occurs when oil or gas leaks into an aquifer because of poor well

construction). Accordingly, Interior Department oil and gas regulations have for

decades aimed to prevent groundwater contamination. Op.Br. 14, 21–22.

The States also claim that FLPMA does not allow BLM to limit groundwater

pollution on federal lands because FLPMA is a land use planning law, and

authorizes BLM to do nothing more than “provide for compliance with applicable

pollution control laws” administered by other agencies. St.Br. 31–33; 43 U.S.C.

§ 1712(c)(8). The States’ theory would render meaningless several other

provisions of FLPMA, including its rulemaking mandate, 43 U.S.C. § 1740, its

directive to avoid “unnecessary or undue degradation” of public lands, id.

§ 1732(b), and the obligation to “protect the quality of . . . ecological,

environmental, air and atmospheric, [and] water resource . . . values,” id.


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§ 1701(a)(8); see also Op.Br. 10–11.3 This would violate the statutory

interpretation principle that “statutes should be construed so that their provisions

are harmonious with each other.” Negonsott v. Samuels, 933 F.2d 818, 819 (10th

Cir. 1991).

III. THE RULE IS NOT ARBITRARY AND CAPRICIOUS

Petitioner-Appellees also fail in defending the district court’s determination

that the Rule is likely arbitrary and capricious under the Administrative Procedure

Act (APA).4 Like the lower court, they turn a blind eye to most of the record

support for BLM’s Rule.

A. The Administrative Record Supports BLM’s Decision To Update Its 30-Year-Old Regulations.

The district court’s holding that there is “no rational justification” for the

Rule ignored much of the administrative record. BLM explained that its

regulations had not been revised in nearly 30 years, necessitating an update to

3 BLM routinely requires measures to mitigate air and water pollution on federal lands, including measures not mandated by a pollution control statute. See, e.g., Jt. Appx.539–50 (Appx.) (requiring best management practices to limit groundwater contamination, dust and other air emissions). 4 Petitioner-Appellees incorrectly suggest this ruling is reviewed only for “clear error,” St.Br. 46; N.D.Br. 14, or “abuse of discretion.” Indus. Resp. Br. 25 (May 25, 2016) (Indus.Br.). None of the cases they cite involve administrative record review. See N.D.Br. 14, 29. In APA cases, likelihood of success on the merits is reviewed without deferring to the district court. Op.Br. 7; see, e.g., Davis v. Mineta, 302 F.3d 1104, 1117–26 (10th Cir. 2002); Valley Cmty. Pres. Comm’n v. Mineta, 373 F.3d 1078, 1087–93 (10th Cir. 2004).


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address “the increasing use and complexity” of modern hydraulic fracturing.

Op.Br. 27. Ample evidence supports this conclusion. Id. at 28–30.

By focusing on “the hydraulic fracturing process,” the district court attacked

a straw man rather than addressing the Rule’s actual requirements. The record

extensively documents the benefits from the Rule’s main provisions: (a) updated

well construction standards; (b) limits on the use of pits to store hydraulic

fracturing wastes; (c) prior BLM review and approval of fracturing operations; and

(d) disclosure of the chemicals used in hydraulic fracturing. The district court

ignored all of this evidence. Id. at 30–37.

Petitioner-Appellees make the same mistake. They assert there is “no

correlation between fracking and underground aquifer contamination.” St.Br. 46;

see also N.D.Br. 29. But they do not dispute that the record contains extensive

evidence of contamination from waste pits, improperly constructed wells, frack

hits, and incidents like the one in Pavillion, Wyoming that support the Rule’s

requirement for prior approval of fracturing. Indus.Br. 14–23; St.Br. 46–50;

Op.Br. 35–36 (citing testimony by Wyoming about problems with Pavillion wells);

Appx.2187.

Instead, they try to dismiss this evidence as a post hoc, “after-the-fact

explanation” in court. Indus.Br. 18–19. This defense mischaracterizes the record.

BLM’s explanations for limiting waste pits, updating well construction


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requirements, and other new provisions are all found in the Rule’s preamble. See

Op.Br. 31–37 (citing preamble references). The district court’s failure to address

those parts of the preamble does not make them post hoc rationalizations.

Similarly, Industry suggests that two studies cited in the preamble represent the

only evidentiary support for BLM’s Rule. Indus.Br. 15–16. Judicial review,

however, is “based on the full administrative record.” Ron Peterson Firearms,

LLC v. Jones, 760 F.3d 1147, 1164 (10th Cir. 2014). As previously demonstrated,

the full administrative record contains extensive support for the Rule. Op.Br. 28–

37; BLM Opening Br. 37–42 (Mar. 21, 2016).5

Petitioner-Appellees also argue that the record evidence supporting the Rule

was not presented to the district court. St.Br. 45–46; Indus.Br. 18. That is

incorrect. Before entering its Order, the district court directed the parties to

identify administrative record documents supporting their preliminary injunction

arguments. In their filing, the Citizen Groups submitted more than 200 references

addressing the same points they raise in this Court. See Appx.1367–1416. BLM

5 Petitioner-Appellees rely heavily on two documents authored by BLM staff. St.Br. 14, 46–47, 49 (citing Appx.1760, Appx.2454); Indus.Br. 3 (same). These dissenting opinions do not make it arbitrary for BLM to act on the overwhelming evidence and recommendations from sources like the Secretary of Energy’s expert advisory committee and the Environmental Protection Agency (EPA). Op.Br. 29. Moreover, the two cited documents acknowledge that modern oil and gas development causes environmental damage. See Appx.2454 (admitting that Vernal, Utah field office has “had our share of undesirable events”); Appx.1760 (acknowledging that “issues have occurred” when fracturing shallow formations).


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also submitted numerous references from the administrative record, see

Appx.1354–63, and raised the same arguments that it makes in this Court. See

Appx.127–32 (groundwater contamination); Appx.122–24 (mechanical integrity

testing); Appx.124–27, Appx.138–40 (usable water); Appx.132–34 (disclosure

requirements).6 There is no question that the issues and evidence in this appeal

were fairly raised in the district court.

The district court, however, did not address that evidence in its Order. After

receiving the parties’ extensive record submissions, the district court took only 12

days to review them and issue its Order. While the Order ignored the evidence

cited by the Citizen Groups and BLM, that was not because it had not been

presented to the district court.

Industry also is wrong that BLM failed to address comments asserting that

contamination of groundwater from “upward migration of [fluids] through

bedrock” is implausible. Indus.Br. 17 (quotation omitted). BLM specifically

discussed this point and agreed that such migration is unlikely. 80 Fed. Reg. at

16,193–94. The agency explained, however, that contamination is more likely to

6 The States’ list of BLM’s supposedly new evidence includes a number of errors and lists several documents multiple times. Compare St.Br. 44–45 & n.7 with Appx.1313–1366 (citing several documents overlooked by the States). Moreover, the handful of new citations BLM offers in this Court are merely additive of the dozens BLM cited below to support the same proposition. See Appx.1356–61.


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occur through other pathways, such as “leaky gas-well casings,” “surface spills”

(e.g., from pits), and frack hits. Id. These are the pathways the Rule addresses.

Petitioner-Appellees make a half-hearted effort to question whether the

larger, more intense and complex fracturing operations that have developed since

the 1980s warrant an update to BLM’s regulations. They cite the district court’s

reference to several documents explaining that the technique of hydraulic

fracturing has existed for decades. See St.Br. 46 (citing Appx.1511 (the Order) 23

n.18). But those documents also reflect that the combination of large-scale

fracturing operations and horizontal or directional drilling began much more

recently. See, e.g., Appx.1647 (chart reflecting dates of different technologies);

Appx.1760–61 (while fracturing has occurred since 1940s, “modern . . . practices

have become more complex”). Similarly, Industry’s suggestion that “massive

hydraulic fracturing” has been the norm since the 1970s mis-quotes the record.7

Indus.Br. 19 n.5 (quoting Appx.2400). These record documents actually support

BLM’s view that the growth of modern hydraulic fracturing merited an update to

its 1980s regulations.

7 The cited article states that “[t]he increase in oil and gas prices during the 1970s led to . . . the development of new technologies, such as massive hydraulic fracturing,” not that “massive hydraulic fracturing” has been occurring since the 1970s. Appx.2400. For example, the article mentions the growth of horizontal drilling of the Barnett Shale in Texas between 1999 and 2006. Id.


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B. BLM Did Not Disregard Existing State Regulations.

The district court also erred in finding the Rule arbitrary because BLM had

not determined that existing state regulations are “inadequate to protect against the

perceived risks to groundwater.” Order 27. Nothing in the MLA or FLPMA

requires BLM to defer to state law when managing federal lands. Op.Br. 37.

Industry mischaracterizes the record by suggesting BLM failed to conduct “a

meaningful review of existing state and tribal law.” Indus.Br. 20. BLM

extensively reviewed state regulations, and discussed them repeatedly in the Rule’s

preamble. Op.Br. 38. BLM found that state standards are “inconsistent,” and

concluded that its Rule sets different and more protective requirements than many

states. Id. Most state regulations do not address “frack hits,” or require the use of

tanks instead of pits statewide. Id. at 39. And where a state law is more protective,

BLM’s Rule accommodates it. Id.

The States devote several pages to describing their own oil and regulations

and suggesting that BLM must identify inadequacies in state law before it can

adopt its own rules. St.Br. 10–12, 47–49. But BLM has no such legal obligation,

and the States fail to identify a single case supporting their argument. Id.

Moreover, the States ignore several provisions of the BLM Rule, such as prior

approval of fracturing and limits on waste pits, that will yield benefits not provided

by existing state laws. Op.Br. 38–39. There was nothing arbitrary and capricious


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about BLM’s decision to issue its own updated rules for operations on federal

lands.8

In objecting to “overlapping” federal and state regulations, St.Br. 48, the

States actually describe a situation that has existed for decades. BLM has never

relied on states to manage oil and gas development on federal lands. Even prior to

the Rule, state and federal regulations both addressed well construction standards,

permitting, waste management, and many other facets of oil and gas development.

Compare Op.Br. 14 n.2, 21 (existing BLM regulations) with Colo. Code Regs.

§§ 404-1:301 et seq. & 404-1:901 et seq.; Wyo. Admin. Code Oil Gen. Ch. 3 § 1 et

seq. & Ch. 4 § 1 et seq.; N.D. Admin. Code 43-02-03-01 et seq. For years, BLM

and the States have had memoranda of understanding to coordinate regulation on

federal lands.9 While Petitioner-Appellees clearly would prefer BLM to change its

8 Petitioner-Appellees also suggest that it is arbitrary for BLM to prefer uniform federal regulations. Indus.Br. 21; St.Br. 19. This is ironic, because the States themselves insist on uniformity when regulating private lands. For example, Colorado recently argued to that state’s appellate courts that local governments’ ability to regulate oil and gas development must be constrained because: “[t]he State has found uniform regulation of oil and gas reserves to be crucial to efficient and fair production of resources. For example, without uniform regulation the development of oil and gas resources in Colorado would be inefficient . . . .” Br. of Colo. Oil & Gas Conservation Comm’n at 31–32, City of Longmont v. Colo. Oil & Gas Ass’n, 369 P.3d 573 (Colo. 2016) (No. 15SC667) (in addendum). BLM’s desire for uniform management regulations is no more unreasonable than Colorado’s desire for the same. 9 See, e.g., Appx.1622 (Wyoming); Appx.1728 (Colorado); see also Appx.3452–54 (listing memoranda); Appx.3775 (California).


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practice and begin deferring to state regulations, that policy preference does not

render the Rule arbitrary and capricious.

C. Evidence Regarding Frack Hits Supports The Rule.

By requiring companies to get prior approval for hydraulic fracturing

operations, the Rule allows BLM to ensure that no pathways would allow gas or

fluids to escape, contaminate aquifers, or cause other accidents. Op.Br. 34–36.

“Frack hits,” where fractures created from one wellbore intersect with another

wellbore, are one such type of accident. Id. at 36.

Petitioner-Appellees do not dispute the record evidence showing that frack

hits are a growing problem, or that prior approval will help prevent them.

Indus.Br. 21–23; St.Br. 49–50. Instead, Industry objects that frack hits were not

specifically discussed in BLM’s 2013 proposal.10 But the APA requires an agency

to allow public comment on a proposed rule—not on every piece of evidence

supporting a rule. 5 U.S.C. § 553. The prior approval requirement has been part of

the Rule at every stage of this rulemaking. See 77 Fed. Reg. 27,691, 27,695,

27,705 (May 11, 2012) (initial proposed rule); 78 Fed. Reg. 31,636, 31,646, 31,675

(May 24, 2013) (supplemental proposed rule). BLM did not need to request

10 The States assert that frack hits have not yet been shown to contaminate usable water. St.Br. 50. This is irrelevant because frack hits cause other problems, including surface spills and related accidents. Op.Br. 36.


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additional comments on frack hits before citing that evidence as additional support

for the prior approval requirement.

Industry also is wrong in asserting that BLM violated the “logical

outgrowth” rule for notice-and-comment rulemaking. Indus.Br. 21. An agency

responding to comments on a proposed rule may make changes that are a “logical

outgrowth” of the earlier proposal without circulating the rule for another round of

public comment. Miami-Dade Cty. v. EPA, 529 F.3d 1049, 1059 (11th Cir. 2008);

see also Am. Mining Cong. v. Thomas, 772 F.2d 617, 637 (10th Cir. 1985).

Industry suggests BLM improperly made significant changes addressing frack hits

in the final Rule that were not a “logical outgrowth” of the earlier proposal—but

they never discuss what those new provisions are. See Indus.Br. 21–23 (describing

“provisions to address ‘frack hits’” and “proposed solutions” for frack hits in final

Rule). This is because no major changes were made in the final version of the

Rule to address frack hits.11 The preamble simply points to preventing frack hits as

a benefit of the prior approval provision, with the same regulatory provisions that

11 The only change in the final Rule was adjusting three details that must be included in a map that was already required under the proposed rule as part of the prior approval application. 80 Fed. Reg. at 16,149. Industry also claims that there are no comments in the record addressing “who is financially responsible when repairs need to be made” to wells to avoid frack hits, or the impacts “of compelling offset well owners to shut in” their wells. Indus.Br. 23. That is not surprising, because the Rule does not require such repairs, impose financial liability, or compel companies to shut in wells. 43 C.F.R. §§ 3162.3-2, 3162.3-3(c)–(d).


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were in earlier drafts of the rule. Industry’s logical outgrowth argument is

meritless.

D. The Rule’s Mechanical Integrity Test For Wellbores Is Not Arbitrary And Capricious.

The Rule requires operators to perform a mechanical integrity test (MIT)

(sometimes called a casing pressure test) on well casing before hydraulic fracturing

occurs. Op.Br. 40–41. The MIT replaces a well pressure test BLM has required

since 1988. See 53 Fed. Reg. 46,798, 46,808–09 (Nov. 18, 1988) (existing

Onshore Order No. 2). The district court erred in ruling that BLM “offer[ed] no

explanation” for the change. Op.Br. 40–41. BLM explained that the new MIT

accounts for increased pressures used during modern hydraulic fracturing

operations. 80 Fed. Reg. at 16,147. It applies the “maximum anticipated surface

pressure” that will be used during hydraulic fracturing, instead of a numeric

pressure threshold that was established in the 1980s. Id. at 16,160, 16,219; Op.Br.

40–41.

Industry does not seriously challenge this explanation. Instead, they

mischaracterize the district court’s order by asserting that it was appropriate for the

court to “reject the notion that a modified test is required.” Indus.Br. 25. But the

district court never held that BLM’s rationale for the new MIT was arbitrary—it

(incorrectly) believed that the agency had failed to offer a rationale at all. Order

28. Industry’s defense is a red herring.


15

Moreover, it was reasonable for BLM to update its pressure test. The record

provides ample evidence supporting the importance of well construction standards

that reflect modern operations. See Op.Br. 26–30, 33–34; compare 53 Fed. Reg. at

46,809 (Onshore Order No. 2 testing to 1,500 pounds per square inch (psi)) with

Appx.1953 (2011 EPA technical workshop paper stating “fracture treatment

pressures . . . can be as high as 13,000 psi”).

BLM, in fact, adopted a pressure-testing standard recommended by the

American Petroleum Institute (API). 80 Fed. Reg. at 16,187; Appx.3935. Like

BLM’s Rule, API recommends that testing be “conducted at pressure that will

determine if the casing integrity is adequate to meet the well design and

construction objectives.” Appx.1745. While Industry attempts to distinguish the

tests, Indus.Br. 25–26 n.7, BLM expressly provided that that the API-

recommended pressure test “meets the intent of the MIT required by the rule.” 80

Fed. Reg. at 16,159. It was not arbitrary and capricious for BLM to follow the

industry’s own recommended approach.

The district court and Industry also err in claiming that BLM failed to

explain why the MIT requires “testing of the lateral portion” of the well bore on a

horizontal well, as opposed to just the vertical segment. Order 28–29; Indus.Br.

26–27. The record explains that hydraulic fracturing occurs on the well’s lateral

segment. If the lateral cannot “withstand the applied pressure [from fracturing]


16

and contain the” fluids, 80 Fed. Reg. at 16,159, they can escape upward from the

portions being fractured into other formations. Op.Br. 41. The reasonableness of

this requirement is confirmed by the API standards, which also call for testing the

lateral leg of horizontal wells. Appx.1740–46.12

Industry also ignores the record by asserting that it was arbitrary for BLM to

conclude that the MIT will impose no additional costs. Indus.Br. 27–28. As the

API guidance indicates, this test is already the industry standard. Moreover,

BLM’s Economic Analysis found that state regulations also mandate pressure

testing of production and other casing, without regard to whether a vertical or

horizontal well is involved.13 This was confirmed by numerous energy companies

and trade associations that commented on the initial proposed rule. Those

comments stated that (as the API standards indicate) MITs were already an

established practice. See Op.Br. 41 n.12 (collecting comments). Industry

steadfastly ignores all this record evidence, but it amply supports BLM’s

conclusion that replacing the existing pressure test with the MIT will not impose

additional costs.

12 Like the district court, Industry suggests that the requirement to test the full well bore was improperly added to the final Rule without opportunity for public comment. Indus.Br. 26–27; Order 29. This is incorrect, as explained previously. See Op.Br. 41–42 n.12 (noting that initial proposed rule did not limit the MIT to the vertical portion of the well bore). 13 See, e.g., Appx.3948–52 (Colorado, North Dakota, New Mexico, Utah and Wyoming).


17

E. The Rule’s “Usable Water” Definition Is Not Arbitrary and Capricious. The district court erred in holding that BLM “provides no reasoned basis or

factual support” for requiring companies to isolate and protect aquifers containing

water with up to 10,000 parts per million (ppm) total dissolved solid (TDS), which

are known as “usable water.” Order 31. The Rule simply brings a 1982 BLM

regulation into conformity with the 10,000 ppm standard that has been required by

the agency’s Onshore Order No. 2 since 1988. Op.Br. 42–43. BLM’s decision

was supported by the record, and did not ignore the burden on companies of

identifying these aquifers. Id. at 44–45.

Contrary to Industry’s arguments, the record amply supports BLM’s policy

choice to protect such aquifers for potential future use. Comments from EPA, the

Association of Metropolitan Water Agencies, and other sources predict that

aquifers with more than 5,000 ppm TDS may be needed in the future—and in some

cases are already being used for drinking water. Op.Br. 43–44. Notably, EPA

regulations take the same precautionary approach as BLM to defining aquifers that

merit protection.14

14 In Onshore Order No. 2, BLM borrowed the 10,000 ppm standard from EPA’s SDWA regulations. See 53 Fed. Reg. at 46,798 (citing 40 C.F.R. § 144.3). EPA uses that threshold because SDWA’s legislative history expressly references 10,000 ppm and explains that Congress intended to “protect not only currently-used sources of drinking water, but also potential drinking water sources for the future.” H.R. Rep. No. 93-1185 at 32 (1974), reprinted in 1974 U.S.C.C.A.N.


18

There was nothing “speculative” about BLM’s choice. Indus.Br. 28–30. No

law required BLM to prove with certainty that these aquifers will be used for

drinking water. See id. at 30. BLM can take a precautionary approach that avoids

contaminating water supplies that may be needed in the future. See Op.Br. 28

(citing cases).

Nor was it arbitrary for BLM to treat the 10,000 ppm threshold as a pre-

existing standard, as Industry claims. Indus.Br. 31–33. BLM explained that

Onshore Order No. 2 (a binding regulation) has used this definition since 1988.15

The record amply supports this explanation of current practice, see Op.Br. 43 &

n.15 (collecting examples), a point Industry apparently recognizes: it “[g]iv[es]

BLM the benefit of the doubt and presum[es]” that BLM has been applying the

standard required by its Onshore Order. Indus.Br. 35.16 Having made this

6454, 6484. While BLM is not regulating under SDWA, EPA regulations underscore the reasonableness of BLM’s decision to protect these aquifers. 15 Industry asserts that Onshore Order No. 2 could only “supplement” the 1982 regulation, but not “supersede” it. Indus.Br. 31 n.10. This is just quibbling over semantics. While the 1982 regulation may have remained in effect, since 1988 companies also were required to comply with the 10,000 ppm standard in Onshore Order No. 2. As a result, amending the Code of Federal Regulations provision so that it also includes a 10,000 ppm definition does not subject companies to a new requirement. 16 While Industry suggests otherwise, the record citations they offer do not conflict with BLM’s explanation. Indus.Br. 31–32 & n.11. Most simply note that the Code of Federal Regulations provision is being changed (which is not in dispute), or ask questions about the usable water definition. Id. None of Industry’s citations dispute that BLM already has been applying the Onshore Order No. 2 standard. See, e.g., Appx.2354 (change in regulation “would align these regulations with its


19

concession, Industry cannot claim that it was arbitrary and capricious for BLM to

take the same approach.

Industry also is wrong that BLM failed to consider the burden on companies

of determining whether aquifers meet the 10,000 ppm standard. Indus.Br. 34–35.

They acknowledge that “under current practice,” companies already “identify

usable water zones in their pre-drilling disclosures.” Id. at 34. And those zones

already are defined by TDS levels. Op.Br. 42 (citing Onshore Order No. 2).

Industry suggests, however, that companies will face difficulty in identifying

“usable water of which even the regulators are unaware.” Indus.Br. 35. But BLM

responded to industry’s concern over this issue by stating that the Rule only

requires the “best available information,” which can be obtained from the U.S.

Geological Survey, state regulators, or existing wells in the same area. Op.Br. 44–

45. BLM’s conclusion was not arbitrary and capricious.

F. It Is Not Arbitrary And Capricious For The Rule To Treat Confidential Information In Fracturing Approval Applications Differently From Post-Fracturing Disclosures.

The district court also erred in ruling that BLM failed to explain why the

Rule “draw[s] a distinction between pre- and post-hydraulic fracturing

information” that companies claim is a trade secret. Order 35. BLM explained

that confidential information submitted with applications for approval of fracturing

onshore orders”); Appx.3634 (Rule adopts standards set in “Onshore Order No. 2, in effect since 1987”).


20

operations, and information in post-fracturing disclosures, are treated differently

because they serve different purposes. Op.Br. 45–47.

Companies seeking approval for fracturing operations must provide a

complete application, even when it involves trade secrets, because BLM needs that

information to evaluate the proposal and avoid potential hazards. Id. But those

applications remain subject to long-established regulations protecting confidential

information submitted to BLM. Id. In contrast, the Rule allows companies to

withhold confidential information from their post-fracturing public disclosures. Id.

BLM explained that, given their public information purpose, the agency does not

need to receive confidential information in every post-fracturing disclosure “in

order to make informed management decisions.” Id. Moreover, post-fracturing

disclosures of chemical information are posted to a publicly-available web site,

FracFocus.org, to which the agency’s confidentiality regulations do not apply. Id.

Industry ignores BLM’s explanation of the different purposes served by pre-

and post-fracturing submittals. Indus.Br. 36–39. As a result, their assertion that

the Rule “applies disparate treatment to functionally indistinguishable products” is

not credible. Id. at 39 (quotation omitted). Fracturing applications and post-

fracturing disclosures are not “functionally indistinguishable” because they serve

different purposes.


21

Industry also suggests that that BLM will not protect trade secrets submitted

in fracturing approval applications, because the agency may disagree with

companies about whether information is entitled to confidential treatment.

Indus.Br. 38. This speculation is baseless: the existing regulations already provide

for resolution of such disputes (and judicial relief if necessary). 43 C.F.R.

§§ 2.26–2.36. Industry offers no reason to doubt that BLM will comply with those

regulations. Op.Br. 52–53.

G. North Dakota’s Split Estate Theory Is Meritless.

Finally, North Dakota argues that BLM lacks authority to regulate oil and

gas development on split estate lands where federal minerals underlie privately-

owned surface. N.D.Br. 30–32. This is incorrect.17 BLM has authority under the

MLA and FLPMA to manage federally-owned minerals even where they lie under

private land. See Entek GRB, LLC v. Stull Ranches, LLC, 763 F.3d 1252, 1254–

57 (10th Cir. 2014) (BLM authority over federal minerals includes authority to

regulate surface access over private lands); 72 Fed. Reg. 10,308, 10,308–09,

10,336 (Mar. 7, 2007) (Onshore Order No. 1) (identifying BLM’s duties on split

estate lands).

17 Contrary to North Dakota’s suggestion, split estate lands are not “unique” to that state. N.D.Br. 30; see Appx.4201 (map showing large areas where BLM owns only the mineral estate in other states). No other Petitioner-Appellees question BLM’s split estate authority, however.


22

The only federal authority North Dakota cites, Hydro Res., Inc. v. EPA, 608

F.3d 1131 (10th Cir. 2010), involves SDWA permitting—not BLM’s MLA and

FLPMA duties. Id. at 1134–35. In fact, North Dakota’s argument conflicts with

the state’s own regulation for “United States government leases,” which provides

oil and gas operations “shall comply with the United States government

regulations.” N.D. Admin. Code 43-02-03-07.18

IV. INDUSTRY DOES NOT FACE IRREPARABLE HARM FROM THE RULE

The district court made two fundamental legal errors in ruling that Industry

is likely to suffer irreparable harm. First, it disregarded well-established law that

ordinary regulatory compliance costs do not represent irreparable harm. Op.Br.

48–49. A business seeking to enjoin an agency regulation must show that it will

suffer significant damage above and beyond a minor profit reduction. Id. The

modest compliance costs associated with the Rule—amounting to a small fraction

of 1% of the cost of drilling each well—will not irreparably harm Industry’s

18 Contrary to North Dakota’s theory, BLM does not question its authority to apply the Rule to split estate situations. See N.D.Br. 31 n.6. The record excerpts North Dakota cites actually reflect BLM’s view that it has authority over federal minerals, regardless of surface ownership. See Appx.2347 (acknowledging BLM authority over “public/federal minerals”); Appx.3766 (limiting Rule’s requirements to avoid split estate concerns). As one BLM representative explained, “if it’s split estate, we own the minerals, we own that [Application for Permit to Drill (APD)]. It’s our APD.” Appx.2641.


23

members. The district court misapplied the law in reaching the opposite

conclusion. Id.

Industry acknowledges the “requirement that irreparable harm be more than

de minimis.” Indus.Br. 47. But it uses a straw man to defend the district court’s

ruling, arguing that the irreparable harm requirement does not allow BLM “to

impose compliance costs with impunity” so long as “petitioners do not go out of

business.” Id. That is not the situation here: the district court based its irreparable

harm ruling on the Rule’s minimal compliance costs, and did not require Industry

to show its members would suffer any significant injury. See Order 42.

Industry also mischaracterizes or ignores the consistent law from other

Circuits recognizing that ordinary regulatory compliance costs do not constitute

irreparable harm. Indus.Br. 46 n.16. Contrary to Industry’s claim, Freedom

Holdings, Inc. v. Spitzer, 408 F.3d 112 (2d Cir. 2005), addresses non-compensable

compliance costs, which the Second Circuit held “are typically insufficient to

constitute irreparable harm.” Id. at 115. Similarly, American Hospital Ass’n v.

Harris, 625 F.2d 1328 (7th Cir. 1980), involved future compliance and

administrative costs associated with new regulations. Id. at 1331. The Seventh

Circuit rejected these as “too insubstantial” to support an injunction, and noted that

“injury resulting from attempted compliance with government regulation ordinarily

is not irreparable harm.” Id. Industry also ignores the D.C. Circuit and Third


24

Circuit decisions reaching the same holding. See Wis. Gas Co. v. Fed. Energy

Regulatory Comm’n, 758 F.2d 669, 675 (D.C. Cir. 1985) (“[M]ere economic loss”

caused by agency order “will not support a finding of irreparable injury”); A.O.

Smith Corp. v. Fed. Trade Comm’n, 530 F.2d 515, 527–28 (3d Cir. 1976).19

This Court does not apply a radically different irreparable harm standard

than other circuits. Industry mis-reads Chamber of Commerce of the U.S. v.

Edmondson, 594 F.3d 742 (10th Cir. 2010), as holding that a mere $1,000 in

compliance costs will support a preliminary injunction. Indus.Br. 45–49. But

Chamber found irreparable harm based not just on compliance costs, but also from

19 Industry also cites a number of district court cases that do not help its argument. None of these decisions enjoined a regulation based solely on the harm from minor compliance costs. See Direct Mktg. Ass’n v. Huber, No. 10-cv-01546-REB-CBS, 2011 WL 250556, at *6 (D. Colo. Jan. 26, 2011) (finding irreparable harm from constitutional violation, not just compliance costs); Smoking Everywhere, Inc. v. U.S. Food & Drug Admin., 680 F. Supp. 2d 62, 77 (D.D.C. 2010) (finding irreparable harm where agency decision “threaten[ed] plaintiffs’ very existence”); Tafas v. Dudas, 511 F. Supp. 2d 652, 669 (E.D. Va. 2007) (noting that “mere cost of implementing otherwise reasonable regulations is not in itself irreparable harm,” but finding that plaintiffs would suffer irreparable harm from impact to patent rights); Cent. Valley Chrysler-Plymouth v. Cal. Air Res. Bd., No. CV-F-02-5017 REC/SMS, 2002 WL 34499459, at *7 (E.D. Cal. June 11, 2002) (constitutional challenge to state law that imposed extremely large costs on auto manufacturers and threatened “competitive injuries such as loss of goodwill and profits”); Nat’l Med. Care, Inc. v. Shalala, No. 95-0860 (WBB), 1995 WL 465650, at *3 (D.D.C. June 6, 1995) (where retroactive application of regulation was “overwhelming[ly]” likely to be overturned, requiring “massive re-billing efforts” and “more than 90,000 man hours of work and over $1 million” would be inappropriate); see also Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 220–21 (1994) (Scalia, J., concurring) (declining to join majority in rejecting claim of irreparable harm).


25

a threat of enforcement litigation, “debarment from public contracts” and “other

consequences” of violating an unconstitutional state law. 594 F.3d at 771.

The Chamber plaintiffs’ own briefing emphasized that they were not basing

their irreparable harm argument solely on compliance costs. Op.Br. 50. Instead,

they sought to avoid a threat of enforcement and financial penalties for failing to

comply with the unconstitutional law, as well as disruption of hiring and

reputational injuries from being accused of hiring illegal aliens. Id. Industry

ignores this flaw in its reading of Chamber. Later decisions of this Court,

however, have recognized that Chamber involved more than just compliance costs.

Id.; Planned Parenthood of Kan. & Mid-Mo. v. Moser, 747 F.3d 814, 833 & n.4

(10th Cir. 2014).

Unlike in Chamber, Industry does not claim BLM’s Rule is unconstitutional,

or that it faces reputational injury, an enforcement action, or other similar harms.

Industry just seeks to avoid the Rule’s modest compliance costs. If that were

sufficient, it would effectively eliminate the irreparable harm requirement: “Any

time a corporation complies with a government regulation that requires corporation

action, it spends money and loses profits; yet it could hardly be contended that

proof of such an injury, alone, would satisfy the requisite for a preliminary

injunction.” A.O. Smith Corp., 530 F.2d at 527. Industry fails to show that it faces

irreparable harm from compliance costs.


26

Second, the district court erred in finding a threat that BLM would

irreparably harm Industry by disclosing trade secret information submitted to the

agency under the Rule. The court disregarded other regulations that (independent

of the Rule) protect confidential information filed with BLM. 43 C.F.R. §§ 2.26–

2.36. As a result, no injunction against the Rule was necessary to prevent

disclosure. Op.Br. 52–53.

Like the district court, Industry ignores these existing regulations. Indus.Br.

50–51. Industry asserts that BLM may take a different view than companies do

about the confidentiality of certain materials, id. 38–39, but it fails to acknowledge

the existing procedures that address such disputes. Without addressing the

agency’s long-established procedures, Industry cannot claim that an injunction is

necessary to prevent irreparable harm. Its silence on these regulations confirms

that district court committed legal error.

V. NO INJUNCTION WAS NEEDED TO PREVENT IRREPARABLE HARM TO THE STATES

The States completely fail to address the legal flaws in the district court’s

irreparable harm finding identified by the Citizen Groups.20

20 Contrary to the States’ assumption, St.Br. 55 (mentioning clearly erroneous standard), these errors are reviewed de novo because they involve issues of law. Op.Br. 7.


27

First, the claim that the Rule irreparably injures the States’ “sovereign

interests in regulation of hydraulic fracturing” just restates their meritless argument

that BLM lacks authority to issue the Rule. St.Br. 51–53. The States have no

sovereign right to regulate activities on federally-owned lands free from federal

oversight. Op.Br. 54–55. Their responses offer no basis to hold otherwise.

Second, the States do not even attempt to show that their speculation about

lost taxes and mineral revenue meets this Court’s requirements for establishing

standing or injury. Op.Br. 56–58. When a state alleges an injury from reduced tax

revenue due to a federal regulation, a high level of specific evidence is required—

not just speculation. See Wyoming v. U.S. Dep’t of Interior, 674 F.3d 1220, 1231–

35 (10th Cir. 2012) (rejecting a similar claim of injury by Wyoming).

The district court failed to apply this legal standard, under which the States

have not even established their Article III standing to bring this case, much less

shown irreparable injury. Op.Br. 57–58. The court did not rely on, or even

mention, the affidavits presented by the States. But instead of denying injunctive

relief, the Order cited a handful of administrative record comments that expressed

generalized concern about discouraging oil and gas production but offered no

supporting evidence. This fell far short of what Wyoming requires. Id. at 58.


28

The States do not attempt to defend the district court’s reliance on

speculative administrative record documents. They also disregard their lack of

Article III standing, and make no mention of Wyoming.21

Instead, the States fall back on the materials they presented below, on which

even the district court did not rely. For example, Colorado and Utah failed to offer

any evidence supporting their irreparable harm argument—a point they do not

dispute. Op.Br. 58; St.Br. 55. For their part, Wyoming and North Dakota just

summarize their district court briefing and affidavits, which speculated about

future state revenues without supporting evidence or analysis. See St.Br. 54–55

(citing conclusory statements from Wyoming’s district court affidavit); N.D.Br.

33–39 (citations regarding volume of tax revenues and impacts if those revenues

drop because of the Rule—but failing to show that such a decline would actually

occur).22

These citations come no closer to meeting the applicable legal standard than

they did in the district court. The States’ complete failure to explain how their

21 While ignoring Wyoming, North Dakota inexplicably relies on an earlier district court decision. N.D.Br. 34 (citing Okla. ex rel. Okla. Tax Comm’n v. Int’l Registration Plan, Inc., 264 F. Supp. 2d 990 (W.D. Okla. 2003)). Oklahoma cannot override this Court’s 2012 Wyoming ruling. Moreover, unlike this case, there was no dispute that Oklahoma actually was suffering a significant injury: an interstate regulatory organization imposed sanctions directing other states to withhold vehicle registration fees from Oklahoma. 264 F. Supp. 2d at 993, 997. 22 North Dakota’s assertion that the Rule conflicts with a state law preventing release of certain records for six months, N.D.Br. 32, 34–35, is meritless. See Op.Br. 59 n.20.


29

evidence meets the Wyoming standard for establishing injury from lost tax revenue

confirms that the district court erred as a matter of law.

CONCLUSION

The district court’s preliminary injunction order should be REVERSED.

DATED: June 20, 2016

s/Michael S. Freeman Michael S. Freeman Earthjustice 633 17th Street, Suite 1600 Denver, CO 80202 (303) 623-9466 (phone) (303) 623-8083 (fax) [email protected] Attorney for Respondent-Intervenor-Appellants Sierra Club, et al. s/Nathan Matthews Nathan Matthews Sierra Club 2101 Webster Street, Suite 1300 Oakland, CA 94612 (415) 977-5695 (phone) (510) 208-3140 (fax) [email protected] Attorney for Respondent-Intervenor-Appellant Sierra Club


CERTIFICATE OF DIGITAL SUBMISSION

I hereby certify that with respect to the foregoing:

(1) all required privacy redactions have been made per 10th Cir. R. 25.5;

(2) if required to file additional hard copies, that the ECF submission is an exact copy of those documents;

(3) the digital submissions have been scanned for viruses with the most recent version of a commercial virus scanning program, Kaspersky Endpoint Security 10, Version 10.2.4.674 (mr2), dated June 20, 2016, and according to the program are free of viruses.

s/Michael S. Freeman


CERTIFICATE OF COMPLIANCE WITH RULE 32(a) 1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because:

[X] this brief contains 7,000 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii), or

[ ] this brief uses a monospaced typeface and contains ______ lines of text, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because:

[X] this brief has been prepared in a proportionally spaced typeface using Word 2010 in 14 point font size and Times New Roman, or

[ ] this brief has been prepared in a monospaced typeface using ______ with _____ characters per inch and ____.

Date: June 20, 2016 s/Michael S. Freeman Michael S. Freeman Attorney for Intervenor-Respondents-Appellants Sierra Club, et, al. Earthjustice

633 17th Street, Suite 1600 Denver, CO 80202 (303) 623-9466 (303) 623-8083 (fax) [email protected]


CERTIFICATE OF SERVICE

I hereby certify that on June 20, 2016 I electronically filed the foregoing INTERVENOR-RESPONDENT-APPELLANTS’ REPLY BRIEF using the court’s CM/ECF system which will send notification of such filing to the following: Jeremy A. Gross – [email protected] Michael McGrady – [email protected] Frederick Richard Yarger – [email protected] Mark Simeon Barron – [email protected] L. Poe Leggette – [email protected] Alexander K. Obrecht – [email protected] Nicholas DiMascio – [email protected] Matthew A. Sagsveen – [email protected] Paul Martin Seby – [email protected] Steven F. Alder – [email protected] Sean David Reyes – [email protected] John Robinson, Jr. – [email protected] Jeremy Patterson – [email protected] Jeffrey S. Rasmussen – [email protected] Rebecca Sher – [email protected] Jonathan S. Franklin - [email protected] Jamie N. Cavanaugh - [email protected] Steven J. Lechner - [email protected] Stanford Purser - [email protected] Tyler R. Green - [email protected] s/ Michael Freeman


ADDENDUM


ADDENDUM INDEX

DESCRIPTION PAGE NO.

H.R. Rep. No. 93-1185 at 32 (1974), reprinted in 1974 U.S.C.C.A.N. 6454, 6484 (excerpt)

1–2

N.D. Admin. Code 43-02-03-07 3

Br. of Colo. Oil & Gas Conservation Comm’n at 31–32, City of Longmont v. Colo. Oil & Gas Ass’n, 369 P.3d 573 (Colo. 2016) (No. 15SC667) (excerpt)

4–6

Mot. for Determination of Jurisdiction, City of Longmont v. Colo. Oil & Gas Ass’n (Colo. Ct. App. Aug. 17, 2015) (Nos. 15SC667 & 15SC668)

7–14

Order Granting Certiorari, Food & Water Watch v. TOP Operating Co., No. 15SC667, 2015 WL 5554333 (Colo. Sept. 21, 2015)

15

Notice Regarding Briefs, City of Longmont v. Colo. Oil & Gas Ass’n, No. 15SC667 (Colo. Sept. 22, 2015).

16–17


93D CONGRESS HOUSE OF REPRESENTATIVES REPORT2d Session No. 93-1185

SAFE DRINKING WATER ACT

JULY 10, 1974.-Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. STAGGERS, from the Committee on Interstate and Foreign Com-merce, submitted the following

REPORT

[To accompany H.R. 13002]

The Committee on Interstate and Foreign Commerce. to whom wasreferred the bill (H.R. 13002) to amend the Public Health ServiceAct to assure that the public is provided with safe drinking water, hav-ing considered the same, report favorably thereon with one amendmentand recommend that the bill as amended do pass.

The amendment strikes out all after the enacting clause and insertsa new text which appears in italic type in the reported bill.

PURPOSE OF LEGISLATION

The purpose of the legislation is to assure that water supply systemsserving the public meet minimum national standards for protection ofpublic health. At present, the Environmental Protection Agency isauthorized to prescribe Federal drinking water standards only forwater supplies used by interstate carriers. Furthermore, these stand-ards may only be enforced with respect to contaminants capable ofcausing communicable disease. In contrast, this bill would (1) author-ize the Environmental Protection Agency to establish Federal stand-ards for protection from all harmful contaminants, which standardswould be applicable to all public water systems, and (2) establish ajoint Federal-State system for assuring compliance with these stand-ards and for protecting underground sources of drinking water.

BRIEF SUMMARY

In summary, this legislation would-(1) (a) require the Administrator of the Environmental Protec-

tion Agency to prescribe national primary drinking water regulationsfor contaminants which may adversely affect the public health;

(b) provide that such regulations are to apply to public water sys-tems and are to protect health to the maximum extent feasible;

38-006

Addendum - 001


32

Endangerment of drinking water sourcesThe section also defines "underground injection which endangers

drinking water sources." It is the Committee's intent that the definitionbe liberally construed so as to effectuate the preventive and publichealth protective purposes of the bill. The Committee seeks to protectnot only currently-used sources of drinking water, but also potentialdrinking water sources for the future. This may include water sourceswhich presently exceed minimum intake water quality requirementsor maximum contaminant levels or which are not presently accessiblefor use as a community drinking water supply source.

Thus, for example, the Committee expects the Administrator's regu-lations at least to require States to provide protection for subsurfacewaters having less than 10,000 p.p.m. dissolved solids, as is currentlydone in Illinois and Texas, even though water containing as muchas 9,000 p.p.m. would probably require treatment prior to humanconsumption.

Further contamination of such sources should not be permitted ifthere is any reasonable likelihood that these sources will be needed inthe future to meet the public demand for drinking water and if thesesources may be used for such purpose in the future.

The Committee was concerned that its definition of "endangeringdrinking water sources" also be construed liberally. Injection whichcauses or increases contamination of such sources may fall withinthis definition even if the amount of contaminant which may enter thewater source would not by itself cause the maximum allowable levelsto be exceeded. The definition would be met if injected material werenot completely contained within the well, if it may enter either a pres-ent or potential drinking water source, and if it (or some form intowhich it might be converted) may pose a threat to human health orrender the water source unfit for human consumption. In this connec-tion, it is important to note that actual contamination of drinkingwater is not a prerequisite either for the establishment of regulationsor permit requirements or for the enforcement thereof.

Coordination with USGSThe Committee intends that the Environmental Protection Agency

will, in the exercise of its responsibilities under this bill, coordinateand consult with the United States Geological Survey so that EPAwill not duplicate efforts of the U. S. G. S. to prevent groundwater con-tamination under the Mineral Leasing Act. The Committee does notintend any of the provisions of this bill to repeal or limit any authoritythe U. S. G. S. may have under any other legislation.

SECTION 1422. STATE PRIMARY ENFORCEMENT RESPONSIBILITY

This section requires the Administrator to list all States which oughtto have underground injection control programs. It is anticipated thatthis list, which must be published within 180 days of enactment, wouldinclude all 50 States, but perhaps not the District of Columbia andvarious territories and possessions.

Each State which is listed must adopt an underground injectioncontrol program which meets the requirements of the Administrator'sregulations for such program. The State's program must be adopted

Addendum - 002


43-02-03-07. United States government leases., ND ADC 43-02-03-07

© 2016 Thomson Reuters. No claim to original U.S. Government Works. 1

North Dakota Administrative Code CurrentnessTitle 43. Industrial Commission

Article 43-02. Mineral Exploration and DevelopmentChapter 43-02-03. Oil and Gas Conservation

NDAC 43-02-03-07

43-02-03-07. United States government leases.

The commission recognizes that all persons drilling and producing on United States government land shall comply with theUnited States government regulations. Such persons shall also comply with all applicable state rules and regulations. Copiesof the sundry notices, reports on wells, and well data required by this chapter of the wells on United States government landshall be furnished to the commission at no expense to the commission. Federal forms may be used when filing such noticesand reports except for reporting the plugging and abandonment of a well. In such instance, the plugging record (form 7) mustbe filed with the commission.

History: Amended effective April 30, 1981; January 1, 1983; May 1, 1994.

General Authority: NDCC 38-08-04

Law Implemented: NDCC 38-08-04

Current through Supplement 360 (April 2016).

NDAC 43-02-03-07, ND ADC 43-02-03-07

End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works.

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COURT OF APPEALS, STATE OF COLORADO 2 East 14th Avenue Denver, CO 80203 District Court, Boulder County, Colorado Honorable Dolores Mallard Case Number: 2013CV63 Appellant: CITY OF LONGMONT, COLORADO, Appellant-Intervenors: OUR HEALTH, OUR FUTURE, OUR LONGMONT; SIERRA CLUB; FOOD AND WATER WATCH; AND EARTHWORKS, v. Appellees: COLORADO OIL AND GAS ASSOCIATION and COLORADO OIL AND GAS CONSERVATION COMMISSION, Appellee-Intervenor: TOP OPERATING CO. COURT USE ONLY CYNTHIA H. COFFMAN, Attorney General MICHAEL FRANCISCO, Assistant Solicitor General* JAKE MATTER, Assistant Attorney General* JULIE MURPHY, Assistant Attorney General* Ralph L. Carr Colorado Judicial Center 1300 Broadway, 10th Floor Denver, Colorado 80203 Direct: (720) 508-6289 [email protected] [email protected] [email protected] Registration Number: 39111, 32155, 40683 *Counsel of Record

Case No.: 2014CA1759

COMBINED ANSWER BRIEF OF THE COLORADO OIL AND GAS CONSERVATION COMMISSION

DATE FILED: March 5, 2015 1:45 PM FILING ID: 8F3B6E08F54A1 CASE NUMBER: 2014CA1759

Addendum - 004


mailto:[email protected]



31

P.2d at 1067. All parties agree with the applicability of these factors.

The district court independently analyzed the factors and found the

first three favored preemption and the fourth factor was not applicable.

These findings were sound. Order at 11-12; CF, 2048-2049.

First, the need for statewide uniformity in regulation of hydraulic

fracturing strongly favors preemption. Oil and gas development

represents a multi-billion dollar industry in Colorado as of 2012,

playing a prominent role in the state economy. See fn.8, supra. As the

Colorado Supreme Court noted in Bowen/Edwards, there “is no

question that the efficient and equitable development and production of

oil and gas resources within the state requires uniform regulation of the

technical aspects of drilling, pumping, plugging, waste prevention,

safety precautions, and environmental restoration.” 830 P.2d at 1058.

This need for uniform regulation stems from the reality that oil and gas

reserves do not conform to the boundaries of any particular local

government (e.g. the Greater Wattenberg Area underlies numerous

counties north of Denver, and thus the location and spacing of oil wells

is most efficiently controlled by State. See Comm’n Rule 318A). The

State has found uniform regulation of oil and gas reserves to be crucial

to efficient and fair production of resources. For example, without

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32

uniform regulation the development of oil and gas resources in Colorado

would be inefficient because a patchwork of local regulations would

distribute the benefits and burdens artificially based on local

government jurisdiction, as opposed to regulations targeting the oil and

gas reserves as a whole.

Uniform regulation of hydraulic fracturing is also necessary because

the process is a quintessentially technical aspect of oil and gas

operations. The procedure involves injecting large quantities of water,

gels, acids or gases underground to stimulate the production of oil and

gas from a target geologic formation. See Comm’n Rule 100 Series

Definition of Hydraulic Fracturing Treatment. The Commission’s

regulatory regime is replete with technical requirements pertaining to

hydraulic fracturing. See, e.g., Comm’n Rule 341 (requiring operators to

monitor pressures during hydraulic fracturing). Because hydraulic

fracturing is a technical aspect of oil and gas operations, the State has a

strong interest in uniform regulations to ensure the efficient and

equitable development and production of the state’s oil and gas

resources. See Bowen/Edwards, 830 P.2d at 1066 (preemption occurs

where local government “impose[s] technical conditions on the drilling

or pumping of wells under circumstances where no such conditions are

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DATE FILED: August 17, 2015 CASE NUMBER: 2015SC668

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Food and Water Watch v. Top Operating Company, Not Reported in P.3d (2015)

© 2016 Thomson Reuters. No claim to original U.S. Government Works. 1

2015 WL 5554333Only the Westlaw citation is currently available.

Supreme Court of Colorado.

FOOD AND WATER WATCH; City of Longmont,Colorado; Sierra Club; Earthworks; andOur Health, Our Future, Our Longmont,

v.TOP OPERATING COMPANY; ColoradoOil and Gas Association; and ColoradoOil and Gas Conservation Commission.

No. 15SC667|

SEPTEMBER 21, 2015

Court of Appeals Case No. 14CA1759

En Banc.

Opinion*1 Petition for Writ of Certiorari Pursuant to C.A.R. 50

GRANTED.

Summary of the Issue:Whether home-rule cities are preempted from promulgatinglocal land-use regulations that prohibit the use of hydraulicfracturing in oil and gas operations and the storage of suchwaste products within city limits when the Colorado Oil andGas Conservation Commission regulates hydraulic fracturingwithin the state.

All Citations

Not Reported in P.3d, 2015 WL 5554333

End of Document © 2016 Thomson Reuters. No claim to original U.S. Government Works.

Addendum - 015


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Colorado Supreme Court 2 East 14th Avenue Denver, CO 80203

Transfer C.A.R. 50 Certiorari to the Court of Appeals, 2014CA1759 District Court, Boulder County, 2013CV63

Petitioners: City of Longmont Colorado; Food and Water Watch; Sierra Club; Earthworks; and Our Health, Our Future, Our Longmont; v. Respondents: Colorado Oil and Gas Association, Colorado Oil and Gas Conservation Commission, and Top Operating Company.

Supreme Court Case No: 2015SC667

NOTICE REGARDING BRIEFS

In anticipation of setting your case for oral argument, the Colorado Supreme Court

requests that you e-mail a copy of all briefs on the merits which you filed in the

above listed case. The schedule of oral argument dates for 2015 is posted on the

Court’s website at:

http://www.courts.state.co.us/Courts/Supreme_Court/Oral_Arguments/Index.cfm.

The Court will issue a formal Order setting your oral argument for one of these

dates specifying the exact date and time the case will be heard.

Please see the guidelines below for e-mailing your briefs:

DATE FILED: September 22, 2015 CASE NUMBER: 2015SC667

Addendum - 016


http://www.courts.state.co.us/Courts/Supreme_Court/Oral_Arguments/Index.cfm

1) Word format is preferred, but we are also able to accept documents in WordPerfect.

2) The emailed briefs must include the entire document exactly as it was filed with the court (i.e. indexes, appendices, exhibits, etc.).

3) If you only have appendices, exhibits etc. available in PDF format, you must still email them; however, it is requested that PDF documents be submitted in text searchable format.

4) Include amicus briefs.

5) If you file any supplemental authorities, they must also be emailed at the time they are filed with the court.

Please email these documents as soon as possible, but no later than OCTOBER 6,

2015 to the following e-mail address: [email protected].

Thank you for your assistance in this matter. If you have any questions or

problems, please contact the Supreme Court Clerk’s Office at 720-625-5150.

DATE: SEPTEMBER 22, 2015

CHRISTOPHER T. RYAN CLERK OF THE SUPREME COURT

Addendum - 017



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