A Montana federal district court recently dismissed a challenge by an environmental group seeking to compel the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) to comply with certain provisions of the Mineral Leasing Act, 30 U.S.C. § 181 et seq.,. See Wildearth Guardians v. Chao, CV-18-110-GF-BMM, 2020 WL 1875472 (D. Mont. Apr. 15, 2020).  In this case, the environmental group Wildearth Guardians brought suit under the Administrative Procedure Act (“APA”) alleging that PHMSA failed to comply with its legal obligation under the Mineral Leasing Act to “[p]eriodically, but at least once a year,  . . . cause the examination of all pipelines and associated facilities on Federal lands[.]”  Although PHMSA did not contest Wildearth’s assertion that the agency had failed to periodically inspect certain pipelines on federal lands, PHMSA argued that the suit must be dismissed because Wildearth lacked standing to challenge PHMSA’s inaction and the environmental group was unable demonstrate that PHMSA’s failure to inspect the pipelines constituted a “failure to act” under the APA. The district court agreed and narrowly interpreted what constitutes a “failure to act” under  the APA in a manner that could present obstacles for third parties seeking to compel agencies to comply with its their regulatory obligations.

Although the court recognized that Wildearth had standing to bring suit, the district court ultimately dismissed Wildearth’s claims because the group failed to demonstrate that PHMSA’s failure to conduct regular inspections of pipelines under the Mineral Leasing Act constituted a “failure to act” pursuant to the APA, 5 U.S.C. § 706(1). Under the APA, a plaintiff can bring suit to compel agency action when the agency has “failed to take a discrete action that a statute or regulation requires it to take.” In this case, the district court recognized that PHMSA did not conduct regular examinations of the pipelines. The court found that PHMSA had taken at least some action in response to its regulatory obligation, however. These actions included promulgating regulations that required inspections of certain types of pipelines, incorporating a citation to the statute in those regulations, and rejecting a proposal to extend its inspection requirements to include additional types of pipelines. The court reasoned that while these actions may not have been sufficient to fully comply with the Mineral Leasing Act, PHMSA did not completely ignore its regulatory obligation.

Because the court recognized that PHMSA had taken at least some action in response to its regulatory obligations under the Mineral Leasing Act, the court found that Wildearth’s claim failed. The court found that Wildearth’s claim would be more accurately characterized as a challenge to the scope and adequacy of the agency’s actions that would fall under the purview of a claim that an agency’s action is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” 5 U.S.C. § 706(2).

In reaching its decision that Wildearth failed to properly assert a claim, the court also recognized that it would be unable to fashion a remedy that would effectively address the environmental group’s claims without improperly exerting judicial control over the agency. According to the district court, the APA “does not empower a court to supervise an agency’s compliance with a broad statutory mandate.” Wildearth, 2020 WL 1875472, at *9 (citing City of New York v. U.S. Dep’t. of Def., 1:17-CV-01464, 2018 WL 1937347, at *3 (E.D. VA. Apr. 24, 2018)). Instead, courts can only compel agency action when the agency has failed to comply with a discrete, non-discretionary legal obligation. Because Wildearth challenged the sufficiency of PHMSA’s actions, the court reasoned that it would be unable to implement and enforce any injunction or remedy that would not “entangle the [c]ourt into managing the specifics of agency compliance with” the Mineral Leasing Act. Id. at *10.

The district court’s narrow interpretation of what constitutes a “failure to act” under the APA may present an obstacle for third parties that wish to compel PHMSA or any other agency to comply with its regulatory obligations. In order to successfully bring suit for an agency’s “failure to act,” third parties must be able identify a discrete legal obligation that the agency has effectively ignored. In the event that an agency has taken any action that is related to its regulatory obligation, even if that action is limited and arguably insufficient, third parties may still be unable to compel agency action.

Instead, third parties may be forced to litigate their complaints about agency inaction under the APA provision which prohibits agency actions that are arbitrary and capricious. This is a highly deferential standard of review for courts to utilize when reviewing agency action and also sets a high bar for third parties to successfully challenge agency actions or decisions.

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Photo of Catherine D. Little Catherine D. Little

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and…

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and administrative adjudication under the Pipeline Safety Act, Natural Gas Act, Clean Water Act (including wetlands), Oil Pollution Act and National Environmental Policy Act. Her team has sought appellate review for enforcement matters with favorable results and works closely with industry and regulators alike to obtain favorable results for their clients. Catherine also regularly counsels clients with respect to pipeline construction and design issues, permitting, confidential investigations, spill and release reporting and response.

Photo of Annie M. Cook Annie M. Cook

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean…

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean Water Act, the Oil Pollution Act, National Environment Policy Act, TCSA, and related state and local laws.  Her team also represents clients regarding related transportation security issues and in responding to inquiries and investigations from the Department of Transportation’s Office of Inspector General.. Annie’s clients include owners and operators of oil and natural gas pipeline and related storage, terminal, and LNG facilities as well as other energy industry stakeholders.