NORRIS, Circuit Judge:
This appeal presents the question whether federal agencies violated the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321 et seq., or the Endangered Species Act of 1973 (ESA), 16 U.S.C.
FACTS AND PROCEDURAL HISTORY
The Flathead National Forest in northwestern Montana is a vast tract of rugged mountainous wilderness. Its many lakes and rivers provide exceptionally pure surface water, prized for trout fishing, and its undisturbed ecosystem is a sustaining habitat not only for game animals, but also for the bald eagle, the peregrine falcon, the gray wolf, and the grizzly bear — all listed as threatened or endangered species under the ESA.
Beneath the surface of these vast and beautiful national forests lies the reason for this litigation. Both forests are located in the geologic zone known as the Overthrust Belt, a formation running north-south from Canada to Mexico and thought to be a rich source of petroleum deposits. Since 1970, preliminary seismic explorations as well as oil seeps discovered in the area have triggered an avalanche of applications to the Bureau of Land Management (BLM) for oil and gas leases within the boundaries of the two forests.
In February and March of 1981, the United States Forest Service issued environmental assessments
Following the preparation of the EAs and the FONSIs, the BLM sold over 700 leases for oil and gas exploration, development,
In addition to issuing the EAs and FONSIs under NEPA, the Forest Service also initiated formal consultations with the Fish and Wildlife Service (FWS), as required under the ESA, 16 U.S.C. § 1536(b),
Following the issuance of the FONSIs, the EAs, and the biological opinions, administrative appeals were filed by James Conner, the Montana Wildlife Federation, and the Madison-Gallatin Alliance (appellees). See 36 C.F.R. § 211.19 (1980). Protests were also filed with the BLM in order to prevent leasing before the administrative proceedings were concluded. See 43 C.F.R. § 4.450-2 (1980). These appeals and protests were rejected and in 1982 leasing began in both the Flathead and Gallatin Forests.
Having exhausted their administrative remedies, the appellees then filed this action in federal district court in Montana, claiming that the sale of the leases without an EIS violated NEPA and that the sale of the leases without a biological opinion assessing the impact of post-leasing activities on the threatened and endangered species violated the ESA.
The district court granted appellees summary judgment on both their NEPA and ESA claims. Conner v. Burford, 605 F.Supp. 107 (D.Mont.1985). The court reasoned that NEPA requires a comprehensive EIS at the lease sale stage to project and analyze the cumulative effects of successive, interdependent steps culminating in oil and gas development and production. See id. at 108 (citing Thomas v. Peterson, 753 F.2d 754, 757 (9th Cir.1985)). Otherwise, the court feared, "a piecemeal invasion of the forests would occur, followed by the realization of a significant and irreversible impact." 605 F.Supp. at 109. Not even the NSO stipulations in some of the leases allayed the court's concerns: "[t]he issuance of a lease with an NSO stipulation does not guarantee an EIS before any development would occur." Id. Accordingly, the court ruled that the Forest Service's failure to prepare an EIS prior to the sale of any lease within the two national forests violated NEPA. In addition, the court ruled that the biological opinions of the FWS were inadequate to satisfy the ESA because they failed to address the effects
The district court ordered all "the agency actions allowing the issuance of the oil and gas leases on the Flathead and Gallatin National Forests ... set aside" and enjoined the government from issuing or recommending any more leases until it complied with NEPA and the ESA. Id. Soon after judgment was entered, and before the original federal defendants filed a notice of appeal, a number of lessees of lands within the two forests
On appeal, the federal appellants
We agree with appellants that the district court erred in ruling that the government violated NEPA when it sold NSO leases without preparing an EIS. We agree with the district court, however, that the government violated NEPA when it sold non-NSO leases without an EIS. We further agree with the district court that the government violated the ESA when it sold leases without preparing a comprehensive biological opinion on the effect of oil and gas activities on threatened and endangered species. Finally, we reject the lessees' various arguments collateral to the merits of the NEPA and ESA issues. We
THE NEPA ISSUES
Section 102(2)(C) of NEPA requires federal agencies to file an EIS before undertaking "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C); 40 C.F.R. § 1508.11 (1985). If the agency finds, based on a less formal and less rigorous "environmental assessment," that the proposed action will not significantly affect the environment, the agency can issue a Finding of No Significant Impact (FONSI) in lieu of the EIS. 40 C.F.R. § 1508.13 (1985). We will uphold an agency decision that a particular project does not require an EIS unless that decision is unreasonable. Friends of Endangered Species v. Jantzen, 760 F.2d 976, 985 (9th Cir.1985); Foundation for North Am. Wild Sheep v. United States, 681 F.2d 1172, 1177 (9th Cir.1982). The reviewing court must assure, however, that the agency took a "hard look" at the environmental consequences of its decision. Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 2730 n. 21, 49 L.Ed.2d 576 (1976); California v. Block, 690 F.2d 753, 761 (9th Cir.1982).
The purpose of an EIS is to apprise decisionmakers of the disruptive environmental effects that may flow from their decisions at a time when they "retain a maximum range of options." Sierra Club v. Peterson, 717 F.2d 1409, 1414 (D.C.Cir.1983); see also 40 C.F.R. §§ 1501.2, 1502.1 (1985); Thomas v. Peterson, 753 F.2d 754, 760 (9th Cir.1985); Environmental Defense Fund v. Andrus, 596 F.2d 848, 852-53 (9th Cir.1979) (EDF v. Andrus). Toward this end, the courts have attempted to define a "point of commitment" at which the filing of an environmental impact statement is required. Sierra Club v. Peterson, 717 F.2d at 1414. See 40 C.F.R. § 1502.5(a) (1985) (EIS must be prepared at the go/no go stage). Our circuit has held that an EIS must be prepared before any irreversible and irretrievable commitment of resources.
In this case the Forest Service gave three justifications for its finding that none of the proposed leases would have a significant impact on the human environment:
Gallatin FONSI at 2 (E.R. at 313); see also Flathead FONSI at 2 (E.R. at 177). Appellants add that, at the very least, the sale of an NSO lease cannot be considered to have a significant effect on the environment because,
A. The NSO Leases
For the purposes of this opinion, NSO leases are those leases that absolutely forbid the lessee from occupying or using the surface of the leased land
Appellants argue that the sale of an NSO lease has no effect on the environment, let alone a significant one. They assert that such leases make no commitment of any part of the national forests to surface-disturbing activities by the lessees because the government retains absolute authority to decide whether any such activities will ever take place on the leased lands.
We disagree with the district court's ruling that the sale of an NSO lease is an irreversible commitment of resources requiring the preparation of an EIS. In ruling that the NSO stipulation could be modified without the preparation of an EIS, the district court evidently relied on a provision in the NSO stipulation which reads: "The [NSO stipulation] may be modified when specifically approved in writing by the District Engineer, Geological Survey with concurrence of the authorized officer of the surface management agency." E.R. at 250. The mere inclusion of such a clause in the lease has no effect, however, on the obligation of the surface management agency to comply with NEPA. Modification or removal of an NSO stipulation would have the same effect as the sale of a non-NSO lease, which, as discussed below,
We find support for our conclusion in Sierra Club v. Federal Energy Regulatory Commission, 754 F.2d 1506 (9th Cir.1985) (Sierra Club v. FERC). There, the Federal Energy Regulatory Commission (FERC) granted a "preliminary permit" for the construction and maintenance of hydroelectric facilities on the Tuolumne River in California. The Sierra Club and others challenged FERC's failure to prepare an EIS before granting the permit. We rejected that challenge because the permit gave the applicant no entitlement to conduct any studies on federal land. Id. at 1509-10. Instead, "[t]he sole purpose of the preliminary permit is to maintain the applicant's priority of application for a license," and the applicants can only enter federal land after obtaining Forest Service and BLM special use permits. Id. at 1509.
In sum, we hold that the sale of an NSO lease cannot be considered the go/no go point of commitment at which an EIS is required. What the lessee really acquires with an NSO lease is a right of first refusal, a priority right much like the one granted in Sierra Club v. FERC. This does not constitute an irretrievable commitment of resources. Cf. Colorado River Water Conservation District v. United States, 593 F.2d 907, 909-10 (10th Cir.1977) (contract to supply water, contingent upon subsequent preparation of EIS and approval by Secretary of the Interior, does not constitute an irretrievable commitment of resources). Thus, we reverse the district court's judgment as it relates to NSO leases and remand with instructions for the court to determine which leases were NSO leases within the meaning of this opinion. See supra note 15.
B. The Non-NSO Leases
We next consider whether the sale of non-NSO leases without an EIS violates NEPA.
The identical question was decided by the District of Columbia Circuit in Sierra Club v. Peterson, 717 F.2d 1409, 1412-15 (D.C.Cir.1983). In that case, the government sold oil and gas leases on lands within the Targhee and Bridger-Teton National Forests of Idaho and Wyoming without first preparing an EIS. All leases contained standard and special mitigation stipulations for the protection of the environment, many of which were identical to the stipulations used in this case. Sierra Club v. Peterson, 717 F.2d at 1411 & nn. 4 & 5.
The District of Columbia Circuit found the distinction between the NSO and non-NSO leases critical. Even though the standard and special mitigation stipulations provided a modicum of protection for the environment, the court held that the sale of non-NSO leases entailed an irrevocable commitment of land to significant surface-disturbing activities, including drilling and roadbuilding, and that such a commitment could not be made under NEPA without an EIS. 717 F.2d at 1414-15.
We agree with the conclusions of the District of Columbia Circuit in Sierra Club v. Peterson. As in that case, the non-NSO leases in our case do not reserve to the government the absolute right to prevent all surface-disturbing activity. Indeed, one of the mitigation stipulations used both here and in Sierra Club v. Peterson specifically limits government control over post-leasing activities to reasonable regulations which are consistent with oil and gas development and production:
Flathead EA at 68 (Appendix E) (BLM Surface Disturbance Stipulations, Form 3109-5) (E.R. at 246) (emphasis added); see also Sierra Club v. Peterson, 717 F.2d at 1411 n. 4. ("`standard' stipulations include Stipulation for lands under jurisdiction of the Department of Agriculture, 3109-3 ..., the Surface Disturbance Stipulation, 3109-5 ..., and the Forest Service Supplement to Form 3109-3...."). Because the purpose of the leases sold in the Flathead and Gallatin National Forests is oil and gas exploration, development, and production, it would clearly be inconsistent with the purpose of the leases if the government prevented all drilling, roadbuilding, pipe-laying, and other lease-related surface-disturbing activities.
We are unpersuaded by appellants' argument that the mitigation measures reduce the effects of even oil and gas exploration, development, and production activities to environmental insignificance. We understand that the mitigation stipulations enable the government to regulate many of the adverse environmental impacts of oil and gas activities. We seriously question, however, whether the ability to subject such highly intrusive activities to reasonable regulation can reduce their effects to insignificance. NEPA does not require that mitigation measures completely compensate for the adverse environmental effects of post-leasing oil and gas activities, see Friends of Endangered Species v. Jantzen, 760 F.2d 976, 987 (9th Cir.1985), but an EIS must be prepared as long as "substantial questions" remain as to whether the measures will completely preclude significant environmental effects. Friends of the Earth v. Hintz, 800 F.2d 822, 836 (9th Cir.1986); Foundation for North Am. Wild Sheep v. United States, 681 F.2d 1172, 1180-81 (9th Cir.1982). Thus, even if there is a chance that regulation of surface-disturbing activities will render insignificant the impacts of those activities, that possibility does not dispel substantial questions regarding the government's ability to adequately regulate activities which it cannot absolutely preclude. In sum, we agree with the district court that the government violated NEPA by selling non-NSO leases without preparing an EIS.
Appellants also complain that the uncertain and speculative nature of oil exploration
Moreover, we agree with the District of Columbia Circuit in Sierra Club v. Peterson that the option of selling NSO leases rather than non-NSO leases provides a reasonable alternative approach for oil and gas leasing in the face of uncertainty:
717 F.2d at 1415.
In sum, the sale of a non-NSO oil or gas lease constitutes the "point of commitment;" after the lease is sold the government no longer has the ability to prohibit potentially significant inroads on the environment. By relinquishing the "no action" alternative without the preparation of an EIS, the government subverts NEPA's goal of insuring that federal agencies infuse in project planning a thorough consideration of environmental values. The "heart" of the EIS — the consideration of reasonable alternatives to the proposed action — requires federal agencies to consider seriously the "no action" alternative before approving a project with significant environmental effects. 40 C.F.R. § 1502.14(d) (1985). That analysis would serve no purpose if at the time the EIS is finally prepared, the option is no longer available. We agree with the District of Columbia Circuit that unless surface-disturbing activities may be absolutely precluded, the government must complete an EIS before it makes an irretrievable commitment of resources by selling non-NSO leases. See Sierra Club v. Peterson, 717 F.2d at 1412-15; see also Cady v. Morton, 527 F.2d 786, 793-95 (9th Cir.1975) (EIS required for decision to issue coal leases); Dept. of the Interior, 516 Dept.Manual 4.3A, promulgated at 45 Fed.Reg. 27,541, 27,546 (1980) ("The feasability analysis (go/no-go) state, at which time an EIS is to be completed, is to be interpreted as the stage prior to the first point of major commitment to the proposal. For example, this would normally be at ... the leasing stage for mineral resource proposals."); cf. South Dakota v. Andrus, 614 F.2d 1190, 1194-95 (8th Cir.1980) (issuance of mineral patent not a major federal action, because unlike a lease, mineral patent not a precondition to initiation of mining operations). We therefore affirm the district court's ruling on the NEPA issues with respect to those leases which, on remand, it determines are not NSO leases within the meaning of this opinion.
THE ENDANGERED SPECIES ACT ISSUES
Section 7(a)(2) of the ESA, 16 U.S.C. § 1536(a)(2), requires the Secretary of the Interior to ensure that an action of a federal agency is not likely to jeopardize the continued existence
In this case, the ESA consultation process was triggered when the Forest Service notified the Secretary that the sale of oil and gas leases in the Flathead and Gallatin National Forests, proposed pursuant to the Mineral Leasing Act of 1920 (MLA), 30 U.S.C. § 181 et seq., might affect threatened and endangered species living there, including the grizzly bear, the bald eagle, the peregrine falcon, and the gray wolf.
The district court rejected the biological opinions because they were limited to the lease sale stage, holding that the FWS "violated ESA by failing to analyze the consequences of all stages of oil and gas activity on the forests." Conner v. Burford, 605 F.Supp. at 109. Appellants had argued that various lease stipulations protected the species by allowing for intervention if subsequent oil and gas activities, such as development and production, should threaten to jeopardize species' continued existence. By indicating that the lease issuance could proceed only on the basis of a "comprehensive" biological opinion which considered not only the leasing stage but leasing and all post-leasing activities, the district
Reviewing de novo the district court's grant of summary judgment, we will not reverse the FWS' decision to limit the biological opinion to the lease sale stage unless that decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Friends of Endangered Species v. Jantzen, 760 F.2d 976, 981-82 (9th Cir.1985). On this record, we agree with the district court that the FWS' decision was not in accordance with the law.
A. The Limited Scope of the Biological Opinions
The parties agree that before any leases could be sold, the FWS was required to prepare a biological opinion. See, e.g. Thomas v. Peterson, 753 F.2d 754, 763 (9th Cir.1985) (Forest Service's failure to prepare biological assessment prior to decision to build road violated ESA). The ESA requires that the biological opinion detail "how the agency action affects the species or its critical habitat." 16 U.S.C. § 1536(b)(3)(A) (emphasis added). Thus, the scope of the agency action is crucial because the ESA requires the biological opinion to analyze the effect of the entire agency action. North Slope Borough v. Andrus, 642 F.2d 589, 608 (D.C.Cir.1980), aff'g in part, rev'g in part, 486 F.Supp. 332 (D.D.C.1980) (legal adequacy of a `biological opinion' tested by matching the meaning of `agency action' with a legal definition of term). We interpret the term "agency action" broadly. TVA v. Hill, 437 U.S. 153, 173 & n. 18, 98 S.Ct. 2279, 2291 & n. 18, 57 L.Ed.2d 117 (1978). As the District of Columbia Circuit has noted, "[c]aution can only be exercised if the agency takes a look at all the possible ramifications of the agency action." North Slope, 642 F.2d at 608 (quoting North Slope, 486 F.Supp. at 351).
In North Slope, which involved an offshore oil lease sale under the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1331 et seq., the District of Columbia Circuit held that the "agency action" encompassed the entire leasing project, from the issuance of the leases through post-leasing development and production: "`[P]umping oil' and not `leasing tracts' is the aim of congressional [mineral leasing] policy." North Slope, 642 F.2d at 608. Following the District of Columbia Circuit, we hold that agency action in this case entails not only leasing but leasing and all post-leasing activities through production and abandonment. Thus, section 7 of the ESA on its face requires the FWS in this case to consider all phases of the agency action, which includes post-leasing activities, in its biological opinion. Therefore the FWS was required to prepare, at the leasing stage, a comprehensive biological opinion assessing whether or not the agency action was likely to jeopardize the continued existence of protected species, based on "the best scientific and commercial data available." 16 U.S.C. § 1536(a)(2).
Both the Flathead and Gallatin biological opinions pay lip service to this statutory duty. Each contains the statement that the "action" being considered "includes not just final lease issuance but all resulting subsequent activities." Gallatin Biological Opinion at D3 (E.R. at 397); see also Flathead Biological Evaluation at 82 (E.R. at 260). However, as noted above, both biological opinions concluded that there was insufficient information pertaining to the specific location and extent of post-leasing oil and gas activities to render a comprehensive biological opinion beyond the initial lease stage.
Appellees argue that the FWS failed to prepare biological opinions based on the best data available. We agree. The FWS took the position that there was insufficient information on post-leasing activities to prepare comprehensive biological opinions. Although we recognize that the precise location and extent of future oil and gas activities were unknown at the time, extensive information about the behavior and habitat of the species in the areas covered by the leases was available. For example, appellees point out that three-fourths of the area studied in the forests had been designated "essential" or "occupied"
We agree with appellees that incomplete information about post-leasing activities does not excuse the failure to comply with the statutory requirement of a comprehensive biological opinion using the best information available. 16 U.S.C. § 1536(a)(2). With the post-leasing and biological information that was available, the FWS could have determined whether post-leasing activities in particular areas were fundamentally incompatible with the continued existence of the species. Indeed, by recommending the exclusion of areas where leasing would conflict with the conservation of protected species, the FWS implicitly admitted that even minimal exploration and development would be incompatible with the conservation of the species in some areas that can be identified before any agency action is taken.
Furthermore, although the FWS justified the decision to delay completing comprehensive biological opinions on the inexact information about post-leasing activities. Congress, in enacting the ESA, did not create an exception to the statutory requirement of a comprehensive biological opinion on that basis. The First Circuit, for example, has recognized that the Secretary may be required to make projections, based on potential locations and levels oil and gas activity, of the impact of production on protected species. See Roosevelt Campobello Int'l Park Comm'n v. EPA, 684 F.2d 1041, 1052-55 (1st Cir.1982) (EPA must prepare "real time simulation" studies of low risk oil spills despite the fact that study will only produce informed estimate of potential environmental effects).
In light of the ESA requirement that the agencies use the best scientific and commercial data available to insure that protected species are not jeopardized, 16 U.S.C. § 1536(a)(2), the FWS cannot ignore available biological information or fail to develop projections of oil and gas activities which may indicate potential conflicts between development and the preservation of protected species. We hold that the FWS violated the ESA by failing to use the best information available to prepare comprehensive biological opinions considering all stages of the agency action, and thus failing to adequately assess whether the agency action was likely to jeopardize the continued existence of any threatened or endangered species, as required by section 7(a)(2). To hold otherwise would eviscerate Congress' intent to "give the benefit of the doubt to the species."
B. Incremental-Step Consultation as a Substitute for Comprehensive Biological Opinions
Appellants argue that the ESA's mandate to protect species is satisfied without a comprehensive biological opinion if an incremental-step consultation process is
Appellants reason that the T & E stipulations ensure that there will be adequate environmental review prior to the initiation of any activity which might jeopardize protected species.
Appellants ask us, in essence, to carve out a judicial exception to ESA's clear mandate that a comprehensive biological opinion — in this case one addressing the effects of leasing and all post-leasing activities — be completed before initiation of the agency action. They would have us read into the ESA language to the effect that a federal agency may be excused from this requirement if, in its judgment, there is insufficient information available to complete a comprehensive opinion and it takes upon itself incremental-step consultation such as that embodied in the T & E stipulations.
Appellants argue that their position — that an incremental-step consultation process is consistent with the ESA — is supported by North Slope. 642 F.2d 589. However, we read North Slope as supporting our view that incremental-step consultation does not vitiate the ESA requirement that the Secretary prepare a comprehensive biological opinion. As noted above, the District of Columbia Circuit recognized that the ESA on its face requires that a biological opinion consider the entire agency action and stressed that OCSLA "does not attenuate ESA's notion of `agency action.'" Id. at 609. The court wrestled with the apparent tension between the ESA, which requires that the entire agency action be considered in a biological opinion, and OCSLA, which provides for a segmented approach to offshore oil projects. It concluded that the two statutes were ultimately complementary because the segmented approach of OCSLA, which requires the Secretary to examine the effect of proposed oil leasing, exploration and drilling prior to their separate initiation, ensures "graduated compliance with environmental
Similarly, appellants also rely on Village of False Pass v. Clark, 733 F.2d 605, 609-12 (9th Cir.1984), aff'g, 565 F.Supp. 1123 (D. Alaska 1983) (False Pass), another case involving the proposed sale of oil leases under OCSLA, to support their contention that the FWS is not required to prepare comprehensive biological opinions in this case involving lease sales under the MLA. In False Pass, although we acknowledged that "agency action" is broadly construed under the ESA, we concluded that the agency action at issue was limited to the sale of leases. Id. at 611. We stressed that the Secretary was obligated to comply with the ESA at each stage of development, id. at 611 (citing Conservation Law Foundation v. Andrus, 623 F.2d 712, 715 (1st Cir.1979)), and that the regulations promulgated, in part under OCSLA, made the Secretary's plan to assess the impact on marine life prior to each stage of oil development "a real safeguard." Id. at 612. We concluded that the requirements of the ESA were satisfied by a biological opinion that was limited to the lease sale and exploration stages.
Appellants argue that North Slope and False Pass are authority for using a similar segmented approach, "incremental-step consultation," with respect to oil and gas leases issued under the MLA.
Finally, appellants rely on Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678 (D.C.Cir.1982), a non-OCSLA case involving copper and silver exploration in a Montana wilderness area, for the proposition that biological opinions assessing onshore mineral development may be limited to the leasing stage. In Cabinet Mountains Wilderness, however, the agency action at issue was limited to the Forest Service's approval of a four-year exploratory drilling proposal. In that case the FWS' biological opinion detailed the effects of the four-year program and thus considered the effect of the entire agency action. Id. at 680. The District of Columbia Circuit specifically emphasized that "our review of the agency's action is limited to approval of the four-year exploratory drilling proposal.... Any future proposals ... to conduct drilling activities in the Cabinet Mountains area will require further scrutiny under ... the ESA." Id. at 687. Hence Cabinet Mountains Wilderness does not support appellants' contention that the ESA is satisfied by a biological opinion which addresses only a portion of the agency action at issue.
We conclude that the ESA does not permit the incremental-step approach under the MLA advocated by appellants.
THE RULE 19 ISSUES
After judgment was entered below, a number of lessees attempted to intervene as necessary and indispensable parties. They also filed motions to vacate, reconsider, or amend the judgment, arguing that the district court had violated Fed.R.Civ.P. 19 and the due process clause of the Fifth Amendment by adjudicating their property interests without notice and an opportunity to be heard. In addition, they argued that the appellees' action was moot and barred by estoppel, laches, and the statute of limitations. In light of the lessees' delay in attempting to join litigation that had been filed two years earlier, the district court refused to reopen the judgment to consider the lessees' arguments. The district court did, however, permit intervention for the purposes of appeal so that the lessees could press their arguments before this court.
The heart of the lessees' collateral arguments is their contention that all lessees were indispensable to the action below. They argue that without first joining the lessees, the district court should not have, "in equity and good conscience," proceeded to a judgment setting aside the agency actions allowing the issuance of oil and gas leases.
The Supreme Court enunciated the public rights exception in National Licorice Co. v. National Labor Relations Board, 309 U.S. 350, 60 S.Ct. 569, 84 L.Ed. 799 (1940), declaring, "In a proceeding ... narrowly restricted to the protection and enforcement of public rights, there is little scope or need for the traditional rules governing the joinder of parties in litigation determining private rights." Id. at 363, 60 S.Ct. at 577 (emphasis added). In National Licorice, the National Labor Relations Board (NLRB) had set aside, as a violation of the National Labor Relations Act (NLRA), contracts that the National Licorice Company had procured from its employees by means of unfair labor practices. Id. at 356, 60 S.Ct. at 573. The company challenged the authority of the NLRB to enter such an order in the absence of the employees, arguing in essence that they were indispensable because they were parties to the contracts.
The Supreme Court disagreed. Comparing the NLRB action to suits brought under the Sherman Act, the Court noted that antitrust injunctions often affect nonparties by preventing the offending company from meeting contractual obligations to others not before the court. Id. at 365, 60 S.Ct. at 578. Similarly, the Court reasoned, the Federal Trade Commission often enters orders restraining unfair methods of competition that preclude the offender from performance of outstanding contracts. In either case, "the public right [is] vindicated by restraining the unlawful actions of the defendant even though the restraint prevent[s] his performance of the contracts." Id. at 366, 60 S.Ct. at 578. The Court felt that this burden on the contractual rights of nonparties was acceptable, however, because such adjudications do not destroy the legal entitlements of the absent parties: "In every case the third persons were left free to assert such legal rights as they might have acquired under their contracts." Id. at 366, 60 S.Ct. at 578.
In National Licorice itself, the public rights at stake were the policy objectives of the NLRA. To require joinder of employees covered by labor contracts obtained through unfair labor practices would effectively undermine the ability of the NLRB to enforce the NLRA.
Subsequent courts have also refused to require the joinder of all parties affected by public rights litigation — even when those affected parties have property interests at stake — because of the tight constraints traditional joinder rules would place on litigation against the government. See, e.g., Jeffries v. Georgia Residential
Kirkland v. New York State Dept. of Correctional Services, 520 F.2d 420 (2d Cir.1975), in particular, illustrates the potential danger of expanding joinder requirements in the public rights area. In that case, a class of black corrections officers challenged the constitutionality of a civil service examination used for the determination of promotions in the New York State Department of Corrections. Although 30.8% of the white officers taking the test passed, only 7.7% of the blacks also passed. Id. at 422. Midway through the trial, a group of white officers who had passed the examination attempted to intervene, arguing that they were indispensable parties. The district court permitted intervention but precluded the relitigation of matters already considered by the court. Upon conclusion of the trial, the court entered an order declaring the examination unconstitutional and enjoining the department from making appointments as a result thereof. On appeal, the Second Circuit admitted that because the district court injunction kept the intervenors from being promoted, these officers had an interest in the litigation that was adversely affected. The court rejected the intervenors' argument that they were indispensable parties, however, citing to National Licorice. Id. at 424.
Like the cases cited above, this case is amenable to the application of the National Licorice public rights doctrine.
As a factual matter, it is not clear that the district court actually intended to set aside the leases.
The order as modified does not adjudicate or "prejudge" the rights of the lessees against the government.
As far as the substantive issues under NEPA and the ESA are concerned, we find that the absent lessees were adequately represented by the government below. The government vigorously defended its leasing decisions under both NEPA and the ESA, and the district court was not required to reopen the case only to rehash old evidence. See Kirkland, 520 F.2d at 423-24 (approving district court's decision to limit late intervention to matters not already litigated). The other claims raised by the lessees are meritless. Appellees were clearly diligent in prosecuting this litigation, so laches does not apply. See Preservation Coalition v. Pierce, 667 F.2d 851, 854 (9th Cir.1982) (noting the "sparing" invocation of laches in environmental cases). To find appellees' claims moot, we would have to hold that no injunction can issue which affects the leases already issued; we have declined to so rule above. Similarly, we would only reach the statute of limitations and estoppel questions were we to hold, which we do not, that the lessees must be joined in this action.
The federal agencies violated NEPA by issuing non-NSO leases without preparing an EIS. They violated the ESA by making lease sales without preparing a biological opinion which considers the effects of post-leasing oil and gas activities. Accordingly, the agencies are enjoined from allowing any surface-disturbing activity on the lands already leased and from selling any more leases in the Flathead and Gallatin National Forests until they comply with NEPA and the ESA.
We hereby AFFIRM the judgment in part, REVERSE in part, and REMAND with instructions that the district court determine which leases are NSO leases within the meaning of this opinion.
Costs are awarded to appellees.
WALLACE, Circuit Judge, concurring in part and dissenting in part:
The factual and procedural description in part I is adequate for our decision and I concur in parts II and IV. I dissent from part III.
In part III, the majority concludes that the federal agencies involved here violated the Endangered Species Act of 1973 (ESA), 16 U.S.C. §§ 1531-43, when they leased national forest lands pursuant to a biological opinion which considered only the leasing stage itself. To reach this conclusion, the majority must attempt to distinguish our opinion in Village of False Pass v. Clark, 733 F.2d 605 (9th Cir.1984) (False Pass). The majority's effort clearly fails. Because we are required to follow our own precedent, I dissent from the majority's holding in part III. False Pass controls this case and it mandates the result opposite to the one the majority reaches.
The majority cannot brush aside False Pass. In False Pass, we held that the Secretary of the Interior did not violate the ESA when he limited his biological opinion to the lease sale stage in offering leases under the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§ 1331-56. The majority attempts to distinguish False Pass
The development scheme contemplated in the leases in this appeal creates, as a practical matter, at least two similarly distinct stages. Notwithstanding the majority's contention in footnote 39, the leases contain a "Threatened and Endangered Species" stipulation that permits the agency to put a complete stop to any project prior to or after the commencement of any surface-disturbing activities if it finds that such activities would have a deleterious effect on an endangered species. See maj. op. at 1455 (quoting the stipulation). As a result of this stipulation, as the Fish & Wildlife Service observed, holders of leased tracts may still "have no opportunity for surface occupancy due to irresolvable conflicts with wildlife resources." Gallatin Biological Opinion, ER 400. In other words, all that the agency has done in selling the "leases" is conveyed priorities in submitting plans for development of these tracts; it has not obligated itself to approve any of these plans. As such, the leasing stage under the terms of the leases before us is as discrete a stage as that mandated by the OCSLA. See Secretary of Interior v. California, 464 U.S. 312, 339, 104 S.Ct. 656, 670, 78 L.Ed.2d 496 (1984).
The ESA still obligates the agency to perform appropriate biological studies before a leaseholder can engage in any surface-disturbing activities at all on the tracts. As the majority reminds us, "[w]e cannot assume that government agencies will not comply" with the law. See maj. op. at 1448. Yet this position, which I also adopt, stands in stark contrast to the assumption apparently made by the majority that the agency will let the fact that the lessee expended substantial sums of money in preparing to exploit its lease pressure it into acting illegally by failing to live up to the mandate of the ESA. The lessees, after all, bear the potential risk of financial loss, as the terms of the leases obviously made them aware. The agency has irrevocably promised nothing beyond a right of first refusal.
Despite the existence of discrete stages, the majority seeks to argue that I am giving an "expansive reading" to False Pass and that False Pass does not control here because the application of that case is limited to cases involving leases under the OCSLA. Maj. op. at 1457 n. 39. The majority cites nothing from our False Pass opinion to support this proposition, and I find nothing that would lead me to believe it to be true. In fact, an objective reading would, I suggest, lead to an opposite conclusion. In False Pass it was the Secretary's "plan" for ensuring compliance with the ESA at each successive stage that we found "insure[d] that the many agency actions that may follow indirectly from the [lease] sale w[ould] not [place endangered species in jeopardy]." False Pass, 733 F.2d at 611. We did not say that it was the OCSLA that provided this insurance. In fact, in examining the "plan" involved in False Pass, we looked not only to the legal requirements of the OCSLA, but to two other elements as well: (1) the special disclaimers that the
Although lease applications are filed with the Bureau of Land Management (BLM), the Forest Service has primary responsibility for both making recommendations as to specific lease sales and performing the environmental analyses required by NEPA. See 49 Fed.Reg. 37,440 (1984). The BLM may accept or reject the Forest Service recommendation based on the BLM's independent evaluation, but in practice the BLM generally accepts the Forest Service recommendations.
In explaining why it has not appealed with respect to non-NSO leases in roadless areas, the government has advised the court that the Forest Service is currently preparing an EIS for the roadless areas of the Gallatin and has recently completed a new EIS for the roadless areas of the Flathead. See Brief for the Federal Appellants at 14 n. 9.
In distinguishing between roadless and roaded areas in the two forests, all appellants argue that oil and gas development and production will have comparatively little impact on roaded areas. However, we find nothing in the record to show that the mere fact that a parcel of national forest land is "roaded" renders the environmental impact oil and gas activities insignificant. In fact, there is nothing in the record to indicate that the effects of oil and gas activities in roaded areas are generally less severe than their effects in roadless areas. The EAs do not attempt to distinguish roaded land as significantly less affected by oil and gas development and production than roadless areas. Indeed, it seems to us that the cumulative impact of oil and gas activities in an area already somewhat disturbed by human contact could be even more significant than similar activities in a more pristine area. Since we find nothing in the record to support appellants' position, we reject the suggestion that our analysis should treat roaded areas differently from roadless areas.
Secretary of Interior v. California, 464 U.S. at 339-40, 104 S.Ct. at 670 (emphasis added).
Moreover, we seriously doubt that Congress intended to give federal agencies carte blanche to initiate, prior to the completion of a biological opinion, any program subject to continued federal control in the absence of specific congressional approval such as that embodied in OCSLA.
The dissent does not argue that the MLA establishes a segmented approach similar to OCSLA's, nor can it. See supra note 37. Instead, the dissent asserts that in False Pass we relied not only on the segmented approach of OCLSA but also on disclaimers which the Secretary had placed in the Final Notices of Sale and the Secretary's regulations, "only a portion of which had been promulgated under OCSLA." Dissent at 1464. However, the dissent's insistence that the "system" before us "will serve precisely the same function and have precisely the same effect as a practical matter" as the leasing plan approved in False Pass is not borne out by the facts of this case. See Dissent at 1464. First, the T & E stipulations do not guarantee that the FWS will examine leased land before surface-disturbing activities begin and do not expressly permit the Federal surface management agency to halt surface-disturbing activities once they have begun. See supra notes 32 & 33. Second, the dissent points to no regulations which provide for incremental-step consultation under the MLA or any other statute. In fact, as noted above, FWS regulations allow partial assessment of an agency action only when the action is statutorily segmented. See supra note 38.
Thomas v. Peterson, 753 F.2d 754, 764 (9th Cir.1985).
The lessees' citation to Naartex Consulting Corp. v. Watt, 722 F.2d 779 (D.C.Cir.1983), is also inapposite. In Naartex, plaintiff sued to cancel oil and gas leases that it alleged had been wrongfully issued to its competitors in the application lottery. Plaintiff claimed that it had been denied a lease because various other applicants had conspired to violate the lottery's one-application-per-person rule. Thus, the suit focused mainly on plaintiff's personal right to a lease against the allegedly wrongful actions of the absent defendants. Naartex was not a public rights case, nor did the court analyze it as such. See id. at 788-89.