Read More:

See NATIONAL PARKS v. KAISER EAGLE MOUNTAIN

and Part 1 of Trott's Dissenting Opinion

III

EUTROPHICATION

What is it? Essentially, eutrophication is a term that refers to an increase in chemical nutrients in an ecosystem, either on land or in water. The word itself is derived from Greek, “eu,” meaning “good,” and “trophic,” meaning “food” or nutrients. Nitrogen, which is at the root of the controversy in this case, is an essential element in the lives of both animals and plants and, in fact, occurs naturally in great quantity in the atmosphere. Nitrogen is also a key element of the fertilizer used positively to increase the food productivity of land throughout the world.

The environmental “problem,” of course, occurs with anthropogenic eutrophication which causes alterations in plant or animal life — or both — in a manner regarded as not positive. I note that most of our national eutrophication concerns involve negative changes in bodies of water caused by the anthropogenic introduction of excessive amounts of phosphorus. I have yet to find a situation where the introduction of nitrates into a desert ecosystem has caused material environmental harm. The Charpieds fear that this is such a case, a concern refuted by the facts.

The parties cannot agree on the scope of alleged eutrophication concerns in this case as it relates to the consequences of nitrate deposition. As summarized by the district court,

Plaintiffs contend that BLM neglected to address significant impacts on the environment due to eutrophication including an increased presence of scavenger raven and coyote populations, impacts on bird, mice, and other small animal feeding habits due to the nutrients from the landfill and windblown trash, and irreparable impacts on the desert food chain.

Relying on the closed and covered nature of the landfill, Kaiser asserts that the only source of nitrates related to the landfill are an insignificant consequence of “atmospheric nitrate deposition from the emission and transport of anthropogenically generated nitrogen compounds.”

In the main, the plaintiffs complain that the defendants did not take a “hard look” at this problem, as they were required to do by NEPA. I disagree.

In their Statement of Reasons supporting their appeal to the IBLA, the Charpieds describe their eutrophication problems as follows:

A major concern to commenters, particularly NPS, was the impact of the dump adding a large volume of nutrients into an environment which has been nutrient scarce for millions of years (see FEIS/R under Agencies page 69). Despite repeated request [sic] from NPS to address the eutrophication process, BLM and Kaiser/MRC refused to conduct such an analysis.

The EIS/R admitted “an increase in road kills of local wildlife species would likely result from the project’s 12 to 16 hour per day truck traffic along access roads” (see DEIS/R 4.7-6)[.] It is also acknowledged that common raven and other scavenger populations “could increase in response to increased food in the form of road-killed animals[.]” Id. Yet, the EIS/R never grappled with the important concept of eutrophication from this increase, or other possible causes of eutrophication, such as adding 20,000 tons of food (garbage) to a nutrient scarce area. The EIS/R noted the Council on Environmental Quality’s (“CEQ”) description of biodiversity: “the concept that all components of ecological systems, both living and nonliving, are interconnected in a hierarchical continuum, and that changes in the diversity at any level in that hierarchy can have effects at other levels. . .” (see DEIS/R 3[.]7-28). The EIS/R also acknowledged that growing scientific evidence supported a deep concern for biodiversity caused by human activity that adversely affects the components of ecosystems and their interconnections; this results not only in species extinction, but in disruptions of the functions of ecosystems on which all life depends; and the introduction of exotic species can eliminate native species through predation, competition, or disease transmission, and alter interconnections between species, changing ecosystem functions (see DEIS/R 3.7-30). Further the EIS/R recognized that “because water and pri-mary productivity are limited, desert ecosystems recover very slowly from disturbances that disrupt the interconnections between living and nonliving components of the system” (see DEIS/R 3.7-31). Despite these important factors, the EIS/R failed to analyze eutrophication and its impact to JTNP’s ecosystem[.]

The Agreement between NPS and Kaiser/MRC does not remedy the inadequacy of the EIS/R’s assessments of impacts and mitigation measures. (See FEIS/R Appendix T for Agreement[.]) BLM mischaracterizes a side agreement (“Agreement”) entered into between the polluters and NPS, and then cite [sic] said Agreement 30 times in response to NPS’ concerns in defense of the adequacy of the EIS/R’s analysis[.]

This concern about an increase in raven and “other scavenger populations” (unnamed) due to “roadkill” strikes me from the record as greatly exaggerated, and it suggests simply going down the list of usual environmental concerns and then manufacturing a groundless make-weight argument to try to inject eutrophication into this case.

Contrary to (1) the Charpieds’ overblown concerns and claims, (2) the district court’s mistaken view of this record, and (3) my colleagues’ opinion, the BLM did examine eutrophication and determined — correctly so from the record — that it was not a serious issue. Here is what the IBLA had to say about the issue as raised by the Charpieds:

“Eutrophication” is a process, associated with aging aquatic ecosystems such as lakes, whereby concentrations of phosphorus, nitrogen, and other plant nutrients increase, altering the ecosystem by algae blooms or microscopic organisms. “Cultural eutrophication” occurs when the aging process is sped up by the activities of humankind by allowing excess nutrients in such forms as sewage, detergents, and fertilizers to enter the ecosystem. Encyclopedia Brittanica, Micropaedia Vol. III at 1007 (1979).

In the present context, NPS used the term “eutrophication” to refer to the addition of nutrients (in garbage and trash) to the desert ecosystem, raising the possibility that the ecosystem would be upset by the proliferation of animal life such as insects and rats. NPS requested that this possibility be examined in the EIS/EIR process. NPCA II at 29-30.

The Charpieds assert that BLM failed to adequately assess “impact of the dump adding a large volume of nutrients into an environment which has been nutrient scare for thousands of years.” (Charpieds’ SOR at 39-30.)

n.16

We must . . . review each issue [including eutrophication] to determine whether the effects cited by the Charpieds are “relevant matters of environmental concern” or constitute “probable environmental consequences,” such that BLM was required to present a “reasonably thorough discussion” of them as part of its requisite “hard look.” The record shows that the EIS/EIR satisfies BLM’s obligation to take a “hard look” at such impacts. . . . .

The EIS/EIR addressed “eutrophication” and roadkill. (Draft EIS/EIR at Sec. 4.7.4, ROD at 15; Final EIS/EIR at 7-22 to 7-24; Response to Comments 1-123 and 1-153.) The Charpieds fail to specify how this assessment is deficient and thus fail to meet their burden of showing error in BLM’s review. Effects of night lighting were addressed. (Final EIS/EIR Sec. 6.6.)

To the extent that appellants fault BLM for not considering the possibility that mining of the site will resume at some point in the future, compounding environmental questions, this issue goes beyond presently foreseeable effects. BLM’s approval of the Project is subject to ongoing monitoring to determine whether additional adverse impacts to the ecosystem eventuate.

NEPA is primarily a procedural statute designed “to insure a fully informed and well-considered decision.” Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 558 (1978). That is, although NEPA requires an agency to prepare an EIS where significant impacts are identified (as BLM did here), nothing in NEPA restrains an agency from proceeding with an action that will have significant impacts where it decides that other values outweigh the environmental costs.

Robertson v. Methow Valley Citizens Council, 490

U.S. 332, 350-51 (1989); Paul Herman, 146 IBLA 80, 102 (1998). The purpose of preparing the EIS is to inform the agency of possible adverse environmental effects in hopes that the agency can mitigate them. This expectation was well rewarded in this case. As discussed herein, BLM did not disregard the adverse effects identified in its EIS/EIR, but proceeded to carefully consider them (as well as six other alternatives (ROD at 3)) and develop mitigat-ing measures to reduce or eliminate them, in consultation with Departmental agencies responsible for the subjects presented. We find no basis to disturb its decision.

My colleagues register concern that eutrophication discussions are found only in scattered sections of the EIS and that one has to “cull through entirely unrelated sections of the EIS and then put the pieces together” to find them. They call this a “patchwork,” and they find such to be a fatal flaw. All I can say is that (1) it was the Charpieds’ burden to identify the failures they alleged, (2) the California Court of Appeal thoroughly examined and analyzed the eutrophication allegations in 1999 and had no trouble finding its way through the record, (3) I had no trouble finding eutrophication in this voluminous record, and (4) neither did the IBLA.

I note here that the DEIS contains an enormous, detailed, and well-organized Table of Contents (with appendices) spanning 17 pages. Only someone intent on not finding what they hoped was not there could fail to locate matters of their concern in this admittedly gigantic document. But, the clear road map is there.

To save space, let’s go to the Response to Comments section of the EIS:

A commenter has stated that ecosystem impacts, such as eutrophication, are defined in the “broad sense, referring to the large-scale addition of nutrients (i.e., landfill trash) to the desert ecosystem” (Appendix 2 of Comment 1) and has requested that the EIS/EIR explain the impact of the proposed Project on the regional ecosystem, including impacts on “subtle and interconnected plants, animals, and processes, most of which presently are unknown.” (NPS, Joshua Tree National Park Issues Identification for the Eagle Mountain Landfill Environmental Impact Statement/Environmental Impact Report, 1995). The JTNP Issues Identification paper also identified possible ecosystem impacts attributable to the Project (i.e., wet dry deposition of nitrate, global warming, and invasion of exotic species) and requested additional studies and experiments to assess ecosystem impacts. Upon review of the requested studies and experiments suggested by the NPS, the lead agencies determined that existing data were available and sufficient for assessing impacts to biodiversity and ecosystem function. The Draft EIS/ EIR addresses all these possible impacts associated with the Project, including habitat loss, additional nutrients originating directly or indirectly from landfill material (defined as “eutrophication” by NPS), the introduction of exotic species, nitrate deposition, and global warming.

For example, the Draft EIS/EIR (Section 4.7.4) states that the proposed Project could affect biodiversity “primarily as a result of loss of habitat, habitat fragmentation, and changes in the relationship between species in the form of increases in predator/scavenger populations in response to increased food availability at the landfill site, and from increased roadkills.” The EIS/EIR presents a full analysis and discussion of these impacts and appropriate mitigation, where applicable.

Control measures proposed to be implemented are described above in General Response 3, and include continuous covering of waste, limiting the work face to 2 acres or less, litter fencing, litter patrols, and providing additional cover for any area that has not been active for 180 days.

To control conditions at the Townsite that could also lead to an increase in predators, measures identified for predator control will also be employed at the Townsite. These measures will include educating Townsite residents of the factors that increase raven and other predator populations, and restrictions requiring disposal of trash and garbage only in tightly closing trash receptacles. Areas around businesses will be patrolled regularly to collect trash. Feeding domestic animals outside in areas accessible to ravens will be prohibited. Buildings and other structures that could provide nest sites for ravens will be monitored regularly. Other restrictions on Townsite activities are described in Section 4.7 of the Draft EIS/EIR.

The mitigation measures proposed for the Project address potential impacts to a broad range of plants and animals that occur in the Project area. Mitigation measures have been identified, in consultation with the appropriate regulatory agencies, for potential impacts to all special status species, and will be implemented as a condition of Project approval. At the request of the [California Department of Fish and Game] and other resource agencies, additional mitigation measures will be implemented for species that have no protected status and/or are not anticipated to experience significant impacts. For example, the California Barrel Cactus is not a protected species, but is considered an important food and water source for Nelson’s Bighorn Sheep, especially in time of drought. Mitigation for this species includes transplanting and monitoring to ensure the success of transplanting. Similarly, mitigation measures will be implemented for the Common chuckwalla, which has no formal protected status. These will include surveying and removing individual animals from Project areas. The aggregate of the mitigation measures proposed for protected and other species will help assure that the biodiversity of the Eagle Mountain Project area is protected and maintained. The availability of the Environmental Mitigation Fund as a tool to acquire and protect prime habitats in the Southeastern California desert will further contribute to the protection of biodiversity and ecosystem function.

Environmental Mitigation Trust

A number of commenters requested additional detail about how the Draft Environmental Mitigation Trust (Appendix U of the Final EIS/EIR) would function and how it would contribute to the mitigation of Project impacts. The overall goals and func-tions of the Environmental Mitigation Trust, as currently proposed, are described on pages 4.7-14 of the Draft EIS/EIR. The Draft Trust includes elements of the negotiated Agreement with Kaiser/ MRC and NPS and certain discussions with CDFG. Specifically, the Draft Trust specifies that 72 percent of the fees would be used to acquire lands that provide high-quality habitat for special status species in the region. In addition, 18 percent of the funds would be used for long-term monitoring, research, and mitigation. The remaining 10 percent of the funds would be used to acquire private parcels in JTNP and for long-term research and mitigation associated with potential Project impacts to JTNP. Lands to be acquired would be identified by an advisory committee appointed by the Trustees of the Trust (the County of Riverside Board of Supervisors).

The Draft Trust agreement specifies that the nine members of the advisory committee shall all be residents of Riverside County and comprise two members of the Board of Supervisors of the County of Riverside; two citizens appointed by the Board of Supervisors, one of whom must be a Native American; two citizens nominated by the Coachella Valley Mountains Conservancy; one citizen nominated by The Nature Conservancy; and one citizen nominated by The Desert Protective Council. Because land acquisition expenditures would be recommended by this advisory committee, specific acquisition loca-tions cannot be identified at this time. The Draft Trust Agreement, however, specifies that lands acquisition expenditures would be restricted to or for the benefit of lands within 15 areas in desert environments of Southern California identified in the Trust Agreement (with provisions for expenditures in other project areas if acquisition in the 15 identified areas have been reasonably met and with the consent of 4 of the 5 trustees). The 15 areas listed as priority areas for acquisition were identified in a January 1994 California Endangered Species Act Memorandum of Understanding between MRC and the CDFG.

Section 4.7.4 of the Draft EIS, “Biodiversity and Ecosystem Function,” says:

The NPS has expressed concern that operation of the landfill will result in eutrophication (increased primary productivity) at JTNP as a consequence of atmospheric nitrate deposition. Atmospheric nitrate deposition results from the emission and transport of anthropogenically generated nitrogen compounds. Sources include agricultural emission of ammonia/ ammonium and organic nitrogen from animal wastes and fertilizer applications, and oxides of nitrogen emitted from fossil fuel combustions (automobiles, power plants, industry) (Paerl, 1993). Recent studies indicate up to 30 kg/ha/yr of dry nitrate are deposited primarily from automobiles in the San Dimas Exper-imental Forest, just east of Los Angeles (Personal Communication, Kathy Freas/CH2M Hill with E. Allen. August 17, 1995).

Increasing nitrate deposition is of concern in desert ecosystems because desert soils typically are nutrient poor and primary production can be limited by nitrogen availability. Increased nitrogen could potentially allow the establishment and spread of plant species that otherwise would not occur in the desert because of nitrogen limitations. Sources of nitrate associated with the proposed Project are limited to fossil fuels used by trucks and trains delivering waste to the landfill and to the use of personal vehicles and home heating for occupants of the Townsite. Landfill gases include only methane and carbon dioxide and are not a source for oxides of nitrogen. The small amounts of nitrate produced as a result of fossil fuel use associated with landfill operation would be eclipsed by the amount of nitrate produced in the Los Angeles Basin and in urban desert communities closer to the landfill. Additionally, nitrate is transported by prevailing winds, which are westerly in the vicinity of the proposed Project. Because the landfill is southeast of JTNP, nitrates generated from landfill operations would be transported away from JTNP rather than toward it. JTNP expects to see an increase in visitorship to the park to 4 million persons per year by the year 2010 (NPS, 1995). Many, if not most, of these visitors will arrive by automobile and will drive through the park. This source of nitrates from fossil fuel combustion is expected to be greater than that produced by landfill operations. Nitrate deposition associated with landfill operations, therefore, is expected to have no effect on ecosystem function [in] JTNP (see Section 4.4 Air Quality).

Then, there is the Agreement with the NPS covering ravens and other predators, which addresses any unanticipated predator and raven problems about which the Charpieds worry:

3.6 DESERT TORTOISE - Kaiser/MRC shall under-take the following obligations in connection with the Desert Tortoise:

3.6.1. Conduct and continue the existing raven monitoring program from at least twelve (12) months prior to commencement of operation for a period of at least 10 years.

3.6.2. Conduct, beginning at least twelve (12) months prior to commencement of operation of the Project and continuing for a period of at least 10 years, a predator monitoring program at the Project.

3.6.3. Mitigate potential increases in raven, coyote, kit fox, and other predator populations caused by the presence of trash at the Project. If the Common Raven population in the region of the Project increases as a result of landfill activities, then an active control program will be instituted. Kaiser/ MRC will present its control plan and depredation permits to NPS prior to start up of the landfill. If control measures are instituted, but found to be ineffective, Kaiser/MRC will revise its control plan and implement a new plan.

3.6.4. Fence the perimeters of all active landfilling and waste handling areas with fencing designed to exclude large scavengers and place a minimum of 6 inches of appropriate cover material over deposited and compacted refuse on a daily basis to minimize raven, rodent, and other opportunistic scavenging.

3.6.5. Conduct, upon commencement of landfill operations, a non-lethal predator control program, that will, as a minimum include hazing at the landfill site, coyote and kit fox aversion (aversive conditioning) techniques, prompt removal of road-killed wildlife along access roads, and the possible use of bird repellent methyl anthranilate.

The California Court of Appeal had this to say in 1999 about eutrophication:

Eutrophication (Nutrient Addition)

In its ruling, the [Superior] court found insufficient evidence to support the EIR’s conclusion that impacts to the Park will be less than significant regarding “the impact of the landfill on the biological resources of the [P]ark as a complex and interrelated system, which the [NPS] describes as eutrophication.” In 1995, the Park staff requested that as part of the EIR process, the involved agencies study the phenomenon of adding nutrients (trash) to the dry, harsh desert landscape, possibly causing insects and rats to proliferate, then starting the food chain going full tilt and upsetting the Park ecosystem. (This phenomenon is termed eutrophication after the similar effects of adding nutrients to lakes and upsetting their ecosystems.) The Park recommended such studies as computer modeling and animal tracking (trapping rats and insects at existing landfills, and inventorying animal feces to analyze whether human-generated trash was being transported) for several years to project the impact of the landfill, if it were to be built.

The EIR approached this problem in several ways, directed toward containment of the refuse: (1) The EIR proposed such measures as keeping incoming refuse in sealed containers until transported to a limited working area, creating litter fences, conducting a storm watch to avoid the scattering of materials by windstorms, and covering the waste with dirt and mining debris to avoid access by ravens. Similar measures have proved effective at other landfills. (2) The landfill will have a state-of-the-art liner and operations design as part of the system for confining the waste. (3) Studies were made of the Los Angeles experience with landfills, in which rats were fitted with radio transmitters and researchers found that daily landfill operations (bulldozing and compacting waste) kill rats. Other studies have shown that insects do not proliferate at landfills if daily cover is properly applied. (4) All ponds and water sources will be covered and the areas fenced to prevent access by predators such as ravens, coyotes, or kit foxes. (5) The proponents entered into the mitigation agreement with the NPS to provide for additional mitigation measures if necessary. (6) The EIR includes responses to comments, including the Park issues identification paper, stating that the lead agencies determined that existing data were available and sufficient to address impacts to biodiversity and ecosystem function. The EIR addresses such possible impacts from the project as “habitat loss, additional nutrients originating directly or indirectly from landfill material (defined as ‘eutrophication’ by NPS), the introduction of exotic species, nitrate deposition, and global warming.” The comments give the example that biodiversity could be affected by “ ‘changes in the relationship between species in the form of increases in predator/scavenger populations in response to increased food availability at the landfill site, and from increased road kills.’ ” These impacts and appropriate mitigation were discussed in the EIR.

Nat’l Parks & Conservation Ass’n v. County of Riverside, 84 Cal. Rptr. 2d 563, 576 (Cal. Ct. App. 1999). “It is speculative whether the eutrophication effect will occur, but if it does the NPS agreement provides for environmental mitigation measures to deal with the problems.” Id. at 577.

In conclusion, my colleagues claim that “[t]his patchwork cannot serve as a ‘reasonably thorough’ discussion of the eutrophication issue” demonstrably and grossly mischaracterizes the record, and is flatly wrong. It inappropriately gives the back of this Court’s hand to a massive and thorough process and resulting responsible environmental decisions and documents.

IV

HIGHEST AND BEST USE

The appellees now claim pursuant to the FLPMA that BLM’s appraisal of the value of the federal land to be transferred to Kaiser for the landfill failed to consider the “highest and best use” of that property as part of the intended commercial landfill. Their untimely assertion is that BLM’s selection of potential land uses for its highest and best use determination did not include the use as a landfill as one of its markers. See 43 C.F.R. § 2201.3-2(a)(1), (2). They argue that Kaiser is not paying enough for the federal lands it seeks to acquire.

A.

Failure to Exhaust

The first problem with this newly-minted claim is that the plaintiffs did not present it to the IBLA, as they were required to do pursuant to the jurisdictional doctrine of exhaustion. Great Basin Mine Watch v. Hankins, 456 F.3d 955, 965 (9th Cir. 2006) (“The APA requires that plaintiffs exhaust administrative remedies before bringing suit in federal court. 5

U.S.C. § 704. This requirement applies to claims under NEPA.”). I draw this conclusion from the Statements of Rea-sons for their appeal to the IBLA — one from the NPCA and one from the Charpieds.

First, the NPCA’s Statement of Reasons for the appeal:

II. THE BLM WILL NOT RECEIVE FAIR MARKET VALUE FOR THE EXCHANGE.

Any disposal of federal land must be compensated at “fair market value of the use of public lands and their resources.” 43 U.S.C.A. § 1701(a). Here, the compensation being offered in exchange for the public lands in question is inadequate, and egregiously low. As a part of the land exchange, BLM will hand over 3,481 acres of federal land just outside Joshua Tree, providing the bulk of lands needed by Kaiser for the proposed Landfill. In return, Kaiser will transfer 2,486 acres of private land to BLM. To compensate for the approximately 1,000-acre differential, Kaiser will also pay BLM a lump sum of $20,100, which is well below the fair market value. Kaiser anticipates huge profits from a landfill operation on the undervalued BLM land, well beyond the $20,000 amount that would be paid for approximately one third of the property. Here again, Kaiser and a few other parties will benefit at a significant cost borne by the national treasury.

As for specific defects in the method of evaluation, this is what NPCA said:

Here, BLM’s own analysis reveals its failure to incorporate wildlife and aesthetic value into the valuation of the federal lands. An appraiser, in determining market value, “shall include historic, wildlife, recreation, wilderness, scenic, cultural, or other resource values.” 43 C.F.R. 2201.3-2(a)(3). Certainly, BLM land in close proximity to Joshua Tree (1.5 miles away) carries significant wildlife, wilderness, scenic, and cultural value to the one million yearly visitors to Joshua Tree. The land exchange appraisal prepared for BLM does not accurately reflect this value.

Nowhere does this statement with sufficient clarity identify as a flaw BLM’s alleged failure to value its lands as part of a proposed landfill, nowhere does it use the term “highest and best use.” The reason given is generic and not specific or particularized.

“[A]dminstrative proceedings should not be a game or a forum to engage in unjustified obstructionism by making cryptic and obscure references to matters that ‘ought to be’ considered and then, after failing to do more to bring the matter to the agencies’ attention,” seeking to attack it in court. Vt. Yankee Power Corp. v. Natural Res. Def. Council, Inc., 435

U.S. 519, 553-54 (1978). The purpose of the exhaustion requirement is two-fold. The requirement is designed (1) to “avoid [ ] premature claims,” and (2) to “ensur[e] that the agency be given a chance to bring its expertise to bear to resolve a claim.” Great Basin Mine Watch, 456 F.3d at 965 (quotation omitted). The NPCA’s statement, vaguely alleging without explaining why the land was undervalued, serves neither of the twin objectives of exhaustion. The proof of this pudding is in the eating. Nowhere in the IBLA’s decision is the valuation as a landfill “issue” addressed, and not because they overlooked it, but because the plaintiffs did not raise it. Everything the plaintiffs did raise was addressed.

The Charpieds’ Statement of Reasons for the appeal is no better; in fact, it is worse. In what amounts to a 36-page jeremiad laced with invective and unsupported allegations of corruption, payoffs, and kickbacks against numerous individuals and all the agencies involved — including the Nature Conservancy — they attack everything in sight — except the BLM’s choice of its appraiser’s method of valuation. Again, no mention of a valuation-as-a-landfill deficiency, no use of the words “highest and best use,” and no reference to the relevant valuation rules. Instead, we find statements like this: “We charge the California BLM with the under-value of the select public lands in their continual serving of preferential treatment to the developers, while ripping off the taxpayers.” “The taxpayer is being swindled.” “BLM lied . . . .” “The U.S. Attorney advances ‘lame contentions’ . . . .” “The BLM shamelessly extorts from the Constitution and the people [powers it doesn’t have].” “Gee, some guys [like Kaiser] get all the breaks.” “In short, the smooth talking polluters played Washington D.C. officials like a fiddle.” “Payola.” “If we haven’t made ourselves clear, perhaps this is a good time to remind the [Administrative Law Judge] that this proposal stinks of back room deals, hidden agendas and intrigue, lacks any semblance of integrity or ethics in government, and is worthy of an Inspector General’s investigation.”

The only thing that is clear about this Statement of Reasons is that the Charpieds are against this proposal. They are not interested in a “hard look,” only in stopping the project, period. Interspersed between all the unproductive name calling, they raise every objection one might imagine — except the issue of “highest and best use” upon which they now attempt to prevail. Shades of Vermont Yankee.

Looking at the IBLA’s opinion, one sees that the IBLA directly addressed all the objections the Charpieds and NPCA did raise. This fact underscores the wisdom of the exhaustion rule. If you raise it, the IBLA will examine and answer it. Again, I turn to the record:

Section 206(b) of the FLPMA requires that the values of the public and private lands exchanged be equal or equalized by the payment (absent waiver in appropriate circumstances) of not more than 25 percent of the total value of the land transferred out of Federal ownership. 43 U.S.C. § 1716(b) (1994); 43 C.F.R. §§ 2201.3(a) and 2201.5(c)(2); see Brent Hansen, 128 IBLA 17, 19 (1993); Havasu Heights Ranch & Development Corp., 102 IBLA 1, 7-8 (1988).

The Charpieds assert that BLM undervalued the selected public lands taken by KEM in the exchange (Charpieds’ SOR at 1-2), suggesting that it did not meet the requirements of 43 C.F.R. §§ 2201.3(a) and 2201.5(c)(2). NPCA also argues that BLM will not receive fair market value for the exchange. (NPCA SOR at 5-6). It is well established that a party challenging an appraisal determining fair market value is generally required to either show error in the methodology used in determining fair market value or, alternatively, submit its own appraisal establishing fair market value. See Voice Ministries of Farming-ton, Inc., 124 IBLA 358, 361 (1992); High Country Communications, Inc., 105 IBLA 14, 16 (1988). Appellants have submitted no appraisal here. Nor have they shown error in the methodology of the appraisal. We accordingly do not agree that the public is not receiving full value for the selected public lands. In these circumstances, the BLM appraisal is properly upheld. See, e.g., Brent Hansen, 128 IBLA at 19; City of Santa Fe (On Judicial Remand), 120 IBLA at 315; Burton A. McGregor, 119 IBLA at 105.

We specifically reject the Charpieds’ argument (SOR at 1) that BLM failed to properly value the reversionary interest in the tract of land they describe as the campsite/millsite lands. BLM instructed the appraisers to appraise the reversionary interest in the surface estate of the tract in terms of the “fee simple estate, disregarding the [e]ffect of any title encumbrances,” including the reversionary interest, and to appraise the tract “as if in a raw, unoccupied state, disregarding any of the existing improvements.” (Appraisal Report, Vol. II, at iv, 4, 14). The record indicates that these instructions resulted from an agreement between BLM and KEM which was designed to resolve the problem of how to appraise the reversionary interest, under which KEM agreed to pay for the full fee simple title to the campsite/ millsite lands even though it already held the principal interest in those lands. (Letter to BLM from KEM dated May 5, 1993). The surface estate was patented to KSC in 1955 and was being held subject only to KEM’s continued compliance with the terms of the patent. So long as it did so, KEM could hold the surface estate indefinitely, subject to the possibility of reverter. We find no fault with this compromise, and appellants have provided no basis to disturb it. To avoid even the possibility of undervaluing its reversionary interest, BLM instructed the appraiser to value that interest as if it were a fee simple interest in the surface estate of the land, that is, as if the reverter had occurred. This undoubtedly increased the value attributable to the reversionary interest, thus maximizing its value for purposes of the exchange and benefitting the United States by increasing the overall value of the selected public lands in the exchange.

We also reject the Charpieds’ argument (Charpeids’ SOR at 1) that, by disregarding revenue from improvements that have been built on the campsite/ millsite lands, BLM undervalued the reversionary interest. That argument disregards the critical fact that, if the lands ever had reverted to the United States, those improvements could be removed. Such improvements and associated “revenue stream” belong to KSR and its successors, not to the United States, which has no claim to reimbursement for their value.

By the same token, the valuation of the offered private lands is not defective because it did not include the value of railroad tracks which cross the property (see Charpieds’ SOR at 2), as those improvements will not belong to the United States following the exchange, but will remain in Kaiser’s possession on the property under authority granted by the right-of-way. In these circumstances, it was appropriate to value the lands “as if in a raw, unoccupied state, disregarding any of the existing improvements,” (Appraisal Report, Vol. III at 5, 23), as those improvements can be removed by the right-of-way holder.

The Charpieds assert that the appraisal misstates the present use classification of the selected public lands as “designated for Open Space and Conservation.” (Charpieds’ SOR at 1-2). We are unable to find such statement, and the Charpieds provide no citation. The appraisal Report expressly states to the contrary that the selected public lands were “appraised based on [their] estimated highest and best use as if available in the open market, in accordance with the underlying zoning regulations, County of Riverside General Plan land use recommendations, and [CDCA] Plan land use recommendations” (Appraisal Report Vol. I at 43-44), concluding, in view of the absence of “imminent development potential,” that “the highest and best use of the selected public lands is estimated to be holding for speculative investment and future capital appreciation.” Id. at 47.

The Charpieds argue that the Notice of Exchange Proposal (NOEP) violated 43 C.F.R. § 2201.2(a)(1), because it failed to name Kenneth Statler as a party “involved in the present exchange.” (Charpieds’ SOR at 2). Appellants have failed to show that Statler, who apparently at one time held a leasehold interest in a portion of the campsite lands that has now expired, owns any interest in the lands involved in the exchange. Accordingly, we agree with KEM that he is not “involved in the present exchange” and need not have been identified under 43 C.F.R. § 2201.2(a)(1). Nor did the NOEP need to mention MWD (Charpieds’ SOR at 20), which is not a participant in the exchange, but is instead the grantee of a right-of-way.

The Charpieds also argue that the NOEP violated 43 C.F.R. §2201.2(a)(2) by not identifying 400 acres of desert tortoise habitat that KEM will donate to BLM. That “donation” is actually being made as mitigation for the expected loss of desert tortoise habitat caused by the widening of Eagle Mountain Road. We agree with KEM that it was not required to list those lands in the NOEP because, at the time of the preparation of that document, the extent of loss of habitat was not known and could not have been accurately foreseen. At this time, KEM has committed itself (as a condition of the land exchange agreement) to purchase 400 acres of tortoise habitat and donate it to the United States for preservation to mitigate expected damage to 160 acres of tortoise habitat resulting from the widening of Eagle Road. We find nothing impermissible in that. The valuation of the selected public land and offered private lands are not affected. Public involvement in this process can await the execution of the agreement.

Both NPCA and the Charpieds argue that BLM erred by failing to take into account that title to the campsite/millsite lands had reverted to the United States because the terms of the reverter in the patent had occurred. Indeed, they presume that title to the lands has reverted and make further assumptions accordingly. See, e.g., Charpieds’ SOR at 2-3 (asserting that KEM’s occupancy of these lands is trespass, and challenging the legality of a lease of surface rights issued by KEM to Statler). In view of the fact that BLM has agreed to deed its interest in the lands (whatever it may be) to KEM, this land exchange will resolve these questions once and for all. As noted above, BLM has valued the campsite/ millsite lands as if the land had already reverted to the United States. This moots the question of whether title to the lands has, in fact, reverted.

There is no doubt that the Charpieds were aware of the precise “highest and best use” argument they chose not bring to the attention of the IBLA. They asserted this very same argument in earlier cases; see, e.g., Donna Charpied, 137 IBLA 45, 47 (1996). To quote the IBLA from that case,

They [the Charpieds and others] contend that the appraisers failed to consider that the Federal land to be exchanged is proposed to be used as a landfill, and that, as a result, the land should be . . . valued in comparison to landfill sites, instead of being treated as mine support lands . . . .

Id. (emphasis added).

Notwithstanding their clear awareness of this “comparison” issue, the Charpieds did not raise it in this matter until they arrived in federal court, an acute violation of the exhaustion rule. Then, they finally hired their own appraiser — Stephen Roach — and offered to the district court new “evidence” on this new issue. Too late, fatally too late. NPCA recognizes this deficiency, claiming that to have raised this valuation issue to the IBLA would have been “futile.” NPCA’s Answering Brief at 56. Why futile? Because it did not work in the Charpieds’ earlier case. In short, both decided not to pursue it here — but only the NPCA explains why.

B.

The Herzog Appraisal

Nevertheless, when they did insert this new issue into the district court case, allegedly supported by an appraiser, Stephen Roach — who was never involved in the administrative process at all — BLM did what it would have done had it been given timely notice of this additional concern: they hired a new independent appraiser — Steven Herzog — to evaluate it. So much for futility. BLM instructed Mr. Herzog independently to review David Yerke’s earlier 350 page appraisal “[i]n light of the Desert Citizens decision,” referring to our opinion in Desert Citizens Against Pollution v. Bisson, 231 F.3d 1172 (9th Cir. 2000). In that case, we held that the use of property should be “considered” in evaluating the highest and best use. Desert Citizens, 231 F.3d at 1180-84. The purpose of Mr. Herzog’s report was to “supplement the adminis-trative record.”

Steven Herzog holds the designation of MAI from the Appraisal Institute. He is also a Certified General Real Estate Appraiser in California, a Registered Professional Forester, and the President of the Herzog Group. To assist him in this endeavor, he hired the Recon Research Corporation for its discount rate as applied to future income for landfill lands expertise, and EMCON, a civil engineering company with landfill experience.

Despite the Charpieds’ fatally tardy assertion of this matter, Mr. Herzog did what BLM and Desert Citizens asked him to do: he thoroughly considered the value of the land in connection with its value as a landfill and filed his report accord-ingly. He concluded as of the relevant date that the landfill was “not a financially feasible use of the selected [federal] land.” It follows that the “highest and best use” of the federal lands being appraised could not have been for a landfill. He noted that as of 1993, “difficulties faced by landfill developers in obtaining required approvals impacted the ability and desire of companies to finance such projects.” He pointed out that operators such as Waste Management, Inc., Western Waste, and BFI began to abandon their investments. He opined that “[t]he opportunity costs of investing tens of millions of dollars in a high-risk venture, without any return on that investment for at least ten years are enormous,” and that “[a] knowledgeable investor with millions of dollars to invest would not have considered investment in a rail-haul landfill to be the route to obtaining a reasonable return on the investment.”

So, if this is true, that there was no market for the federal lands as a landfill, why would Kaiser doggedly pursue this proposal? Because Kaiser already owns the abandoned holes in the ground and the railroad necessary to serve it and has a considerable investment in the project. The idea that someone else might purchase the selected federal lands for a landfill is palpably and demonstrably hallucinatory.

This is what Mr. Herzog has to say about Kaiser’s determined motivation in a declaration provided to the district court summarizing his 108-page report (plus attachments) submitted to BLM: 61. . . . Under this analysis, the net present value [“NPV”] of the income generated from the project would be $2.48 million. Not included in the calculation of this figure is any allowance for entrepreneurial profit, the $13 million spent on permitting after September 25, 1997, the $17 million that would be required to upgrade the railroad and relocate and upgrade the paved road, or any allowance for on-site infrastructure cost and staffing. Consequently, the NPV for the net income to the landfill operation is dwarfed by the expenditures that would be required to obtain that income — a conclusion BFI obviously reached in 1994. Report pp. 106 - 107.

62. I reached the conclusion that, as of the effective date, landfill use was not financially feasible. Yet, Kaiser and its remaining associated investors went on to spend $13 million more pursuing final permits. Through 1994, approximately $49 million had been spent on the project. However, BFI had spent $45 million of that, and walked away. The remaining proponents had only $4 million invested, but the only way to recover any of the investment was to press on with the permitting effort. The internal dynamics of the stakeholders in the endeavor created a situation where motivations existed that were different from what a single entity, which had been solely financing the project from the beginning, would have faced. Report p. 108.

63. In addition, the expectation constantly existed that the time when final permits would be obtained was near at hand. The obtaining of the goal always seemed to be near enough that continued expenditures were justified. To stop the process would have meant the forfeiting of all prior expenditures, because the final permits were needed to put the project in its most marketable condition. As noted earlier, the pending sale is contingent upon final permits being obtained and all litigation being resolved.

Report p. 108.

64. The conclusion of Mr. Roach that a landfill was economically feasible is based completely on the observation that Kaiser was investing in a landfill at the site. First, this “observation” is not a proper method of assessing the economic feasibility of a landfill use. See definition of economic feasibility at ¶ 11. Moreover, this “observation” does not consider the circumstances and history of Kaiser’s investment in the project or the fact that Kaiser, since it owned the railroad, the permits, and other aspects of the project related to the selected lands, had different motivations than others in the marketplace would have had. Mr. Roach’s conclusion appears to be without market support, and is based on an incom-plete understanding of the factors motivating Kaiser to continue to invest in Eagle Mountain.

Kaiser is correct when it argues that BLM’s chief state appraiser in California, Nancy Ortiz, reviewed Mr. Herzog’s report and said in a 12-page report:

From my review it appears that Mr. Herzog has been conscientious in providing an independent analysis and his report meets applicable [UAS] and Federal standards and the requirements of the instructions for the assignment provided by the BLM. He has thoroughly analyzed the subject’s potential for landfill as a highest and best use, using appropriate methods and consultants, and provided a feasibility conclusion based on his analysis. As the reviewer, I believe that the appraiser has addressed concerns relative to the landfill as a potential highest and best use . . . .

The BLM District Manager added this perspective to Mr. Herzog’s appraisal:

We feel the administrative record supports BLM’s decision in this case, and disagree with Plaintiff’s assertions to the contrary. However, in light of the Ninth Circuit’s opinion in Desert Citizens, we felt an independent analysis of whether a landfill was the highest and best use of the federal lands was justified. We were prepared to accept the results of this new analysis, regardless of its implications to the District Manager’s decision of September 25, 1997.

In conclusion, he said, “I have reviewed Mr. Herzog’s report and found nothing which indicates that it is necessary to revise or revisit the District Manager’s decision of September 25, 1997 approving the exchange.” This decision was served on the Charpieds in January, 2003; and Mr. Herzog’s report, plus the reports of the chief appraiser and the district manager were formally made part of the administrative record and officially certified and lodged as such with the district court on February 7, 2003. How my colleagues can claim that this is not a “final, appealable decision” is a mystery.

Did the plaintiffs timely appeal the District Manager’s final conclusion to the IBLA, as they could have pursuant to 43

C.F.R. § 4.410(a)? No. This failure alone should bar them from bringing it sideways into this case. So what the Charpieds say BLM did not do has in fact been done, and remains unchallenged by them.

We faced a similar problem in Warm Springs Dam Task Force v. Gribble, 621 F.2d 1017 (9th Cir. 1980). In that case, a deficiency in the Army Corps of Engineers NEPA process had been cured during litigation. Calling these “supervening events,” we denied remand to the Corps because the Corps had already conducted studies definitively to answer the matter at issue. Id. at 1026. As we said in Friends of the Clearwater v. Dombeck, 222 F.3d 552, 560 (9th Cir. 2000), “if extra-record evidence shows that an agency has rectified a NEPA violation after the onset of legal proceedings, that evidence is relevant to [what] relief should be granted.” See also Forest Guardians v. U.S. Forest Serv., 329 F.3d 1089, 1095-96 (9th Cir. 2003). At the very least, we should follow this example. BLM has done what we suggested in Desert Citizens. It has thoroughly “considered” the issue and issued a manifestly defensible answer. To remand at this point is a clear exercise in blind form over substance.

CONCLUSION

I end with the Technical Advisory Panel’s evaluation: “the proposed Eagle Mountain Landfill could well become one of the world’s safest landfills and a model for others to emulate.” Don’t hold your breath.

Read More:

See NATIONAL PARKS v. KAISER EAGLE MOUNTAIN

and Part 1 of Trott's Dissenting Opinion

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