On July 6, the US District Court for the District of Columbia found that the Dakota Access Pipeline (DAPL) must shut down while the US Army Corps of Engineers (Corps) prepares an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act (NEPA).

As noted in our  October 16, 2017 blog post, large infrastructure projects, such as oil and natural gas pipelines, are often the target of legal challenges filed by opposition groups who claim that environmental review of the government’s authorization was insufficient.  If a court finds errors in the NEPA analysis, the court is often faced with a tough question – whether to vacate the government authorization and halt construction or operation of the project, even after years of project design, permit approvals at all levels of government, and millions (or billions) of dollars in investment.  While in 2017 Judge James Boasberg found DAPL’s NEPA deficiencies did not warrant vacatur of the Corps authorization, Judge Boasberg reached a different conclusion on Monday, ordering the oil to stop flowing and the pipeline to be emptied by August 5, 2020.

2017 Court Decisions

In the DAPL case, two tribes – the Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe – filed suit attempting to block construction and operation of a segment of the pipeline passing beneath Lake Oahe by challenging the easement granted to DAPL by the Corps.  In 2017, two weeks after the oil pipeline became fully operational, Judge Boasberg found three deficiencies in the Corps’ NEPA review.  Specifically, the court found the Corps failed to adequately address: (i) the degree to which the pipeline’s effects are likely to be “highly controversial,” a factor considered when determining whether an EIS is warranted (ii) the impacts of a potential oil spill on fish or wildlife and the Tribes’ fishing and hunting rights, and (iii) whether, under a required environmental-justice analysis, Standing Rock would be disproportionately harmed by a spill.  The court ordered the Corps to consider whether granting the easement required preparation of an EIS, rather than a more concise environmental assessment (EA).

In terms of remedy, Judge Boasberg determined not to vacate the easement on remand, finding that there was a serious possibility that the Corps would be able to substantiate its prior conclusions.  The court ordered the Corps to give “serious consideration to the errors” and expected the Corps “not to treat remand as an exercise in filling out the proper paperwork post hoc.”

2020 Court Decisions

The Corps considered its position on remand but determined again that an EIS was not warranted, and the Tribes challenged this determination.

In March 2020, the court concluded that facts surrounding DAPL remained “highly controversial” and that the Corps did not “succeed” in resolving concerns raised by other agencies and the public relative to the environmental impact of DAPL.  The court relied heavily on a new US Court of Appeals for the D.C. Circuit decision holding that it was not sufficient for an agency to simply “acknowledge and try to address concerns raised during the NEPA process…The question is…whether [the agency] succeeded,” in resolving the controversy.  Nat’l Parks Conservation Ass’n v. Semonite, 916 F.3d 1075, 1085-86 (D.C. Cir. 2019).

Accordingly, Judge Boasberg held that the Corps violated NEPA by determining an EIS was unnecessary even though the “highly controversial” trigger was met, and remanded to the Corps to complete an EIS.  The court did not reach the other two deficiencies identified in its 2017 decision, because it found that an EIS would require consideration of the other two topics anyways (the impacts of a potential spill on fish and wildlife and whether Standing Rock would be disproportionately harmed by a spill).

As to the remedy, Judge Boasberg determined that “although mindful of the disruption,” vacating the easement and shutting down the pipeline was warranted.  Similar to its analysis in 2017, the court relied on the two-factor test in Allied-Signal v. U.S. Nuclear Regulatory Commission, 988 F.2d 146, 150–51 (D.C. Cir. 1993), but reached the opposite conclusion.

• Seriousness of the Deficiencies. Judge Boasberg found that the first Allied-Signal prong, the seriousness of the agency’s deficiencies, weighed strongly in favor of vacatur.  In its 2017 decision, the court found that the Corps was likely to be able to substantiate its prior decision to issue an EA.  Now, it noted the Corps had already reconsidered its EA on remand once and had failed to substantiate its decision.  Thus, the Corps could not find an adequate explanation for its actions and must perform a full and complete EIS for the entire project.

• Disruptive Consequences. The court found that the second prong, the disruptive consequences of vacatur, was less straightforward.  DAPL argued that shutting down the pipeline would cause significant economic harm, including revenue losses of up to $643 million in 2020 and $1.4 billion in 2021, significant job losses, and stranding up to 34.5% of North Dakota crude production.  In response, the Tribes and other parties noted that such estimates were significantly exaggerated given the collapse in oil prices, demand, and production caused by the COVID-19 pandemic.  The court, noting that it “does not take lightly” the effects of the shutdown, found that vacatur was appropriate because the Corps anticipates the EIS process will take approximately 13 months, which would be a relatively short interruption, and that, without vacatur, the Corps would have little incentive to finish the EIS in a timely manner.  When it comes to NEPA, Judge James Boasberg stated “it is better to ask for permission than forgiveness.”  The court also noted the environmental consequences of remand without vacatur: the risk of a potential spill under Lake Oahe, the Tribes’ chief concern.

The court, acknowledging the significant disruption to DAPL and the North Dakota oil industry, found that the first Allied-Signal factor weighed heavily in favor of vacatur.  Given the seriousness of the Corps’ NEPA error, and the unlikelihood of a simple fix, Judge Boasberg concluded that DAPL’s flow of oil must cease.  The Corps and/or DAPL will certainly appeal the decision to the D.C. Circuit.