2021 WL 107228
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United States District Court, E.D. California.
PIT RIVER TRIBE; NATIVE COALITION FOR MEDICINE LAKE HIGHLANDS DEFENSE; MOUNT SHASTA BIOREGIONAL ECOLOGY CENTER; and QUALITY ENVIRONMENT, Plaintiffs,
BUREAU OF LAND MANAGEMENT; UNITED STATES DEPARTMENT OF THE INTERIOR; CALPINE CORPORATION; and CPN TELEPHONE FLAT, INC., Defendants.
ORDER DENYING FEDERAL DEFENDANT’S MOTION TO DISMISS AND GRANTING IN PART AND DENYING IN PART CALPINE’S MOTION TO DISMISS
This matter is before the Court on the Bureau of Land Management’s (“BLM” or “Federal Defendant”) and Calpine Corporation’s (“Calpine” or “Corporate Defendant”) (collectively “Defendants”) Motions to Dismiss. Fed. Def.’s Mot. to Dismiss, ECF No. 64; Corp. Def.’s Mot. to Dismiss, ECF No. 67. Plaintiffs filed an opposition, ECF No. 75, to which Defendants replied, ECF No. 76, 77. After consideration of the parties’ written arguments on the motions and relevant legal authority, the Court DENIES Federal Defendant’s Motion to Dismiss and GRANTS in part and DENIES in part Calpine’s Motion to Dismiss.1
I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
Plaintiffs include the Pit River Tribe and several regional nonprofit organizations with an interest in the Medicine Lake Highlands area (collectively “Pit River” or “Plaintiffs”). First Amended Compl. (“FAC”) ¶¶ 7-11, ECF No. 63. Defendant BLM is an agency within the United States Department of Interior charged with managing certain lands and natural resources owned by the federal government. FAC ¶ 12. Plaintiffs challenge the continued existence of federal Geothermal Resources Lease No. CA12372, issued by BLM pursuant to their statutory authority under the Geothermal Steam Act (“GSA”), which is currently held by Defendant Calpine Corporation. FAC ¶ 1. Plaintiffs also challenge the continuance of the BLM-managed Glass Mountain Unit, which Calpine operates and exclusively leases. Id.
This action is the latest in a series of suits brought by Pit River concerning the area. See Pit River Tribe v. U.S. Forest Serv. (“Pit River I”), 469 F.3d 768 (9th Cir. 2006); Pit River Tribe v. Bureau of Land Mgmt. (“Pit River II”), 939 F.3d 962 (9th Cir. 2019). The first Pit River case involved two other leases outside the original Glass Mountain Unit on which Calpine proposed to develop the so-called Fourmile Hill Geothermal Development Project. See Pit River I, 469 F.3d at 775-78. BLM extended those leases for a period of five years in a 1998 administrative decision, and then subsequently approved the project on them. Id. at 777. Plaintiffs successfully challenged those agency decisions under § 706(2) of the Administrative Procedure Act (“APA”) in Pit River v. U.S. Forest Serv. (“Pit River I”), 469 F.3d 769 (9th Cir. 2006).
In a separate 1998 administrative action, BLM continued twenty-six unproven geothermal leases within the Glass Mountain Unit for an additional forty years based on one productive lease in the Unit, Lease CA12372. Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 1147, 1151-53 (9th Cir. 2015). Plaintiffs separately and successfully challenged that agency decision under § 706(2) of the APA in Pit River Tribe v. Bureau of Land Mgmt. (“Pit River II”), 939 F.3d 962 (9th Cir. 2019). Specifically, this Court, which was subsequently affirmed by the Ninth Circuit, found that § 1005(a) of the GSA only permits production-based continuations on a lease by lease basis, not unit wide. See Pit River II, 939 F.3d at 975. Plaintiffs in Pit River II did not challenge the validity of the productive lease, Lease CA12372. See id. at 964.
Plaintiffs now challenge the continuing validity of Lease CA12372 and the Glass Mountain Unit. See generally FAC. Specifically, Plaintiffs allege that GSA § 1005(g)-(h) and BLM’s current “production extension” regulations impose ongoing requirements on lessees that Calpine has failed to satisfy, mandating termination. FAC ¶¶ 24-36, 55-64, 78-80. Relatedly, they also claim that the Glass Mountain Unit Agreement, GSA § 1017 and the implementing regulations, require BLM to ensure the Unit is administered in the public interest, including through diligent exploration, development and production. FAC ¶¶ 37-54, 65-77, 81-83. Plaintiffs claim BLM is obligated to terminate the Lease and Unit as these requirements have not been satisfied. FAC ¶¶ 78-83. Plaintiffs have brought both claims under § 706(1) of the APA which requires the court to “compel agency action unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 706(1).
A. Legal Standard
Under Rule 12(b)(1), a motion to dismiss for lack of subject matter jurisdiction will be granted if the complaint, on its face, fails to allege facts sufficient to establish subject matter jurisdiction. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). When a party brings a motion to dismiss under Rule 12(b)(1), the plaintiff bears the burden to prove jurisdiction exists. Sopack v. N. Mountain Helicopter Serv., 52 F.3d 817, 818 (9th Cir. 1995). There are two standards that can apply to a motion to dismiss under Rule 12(b)(1) depending on the nature of a party’s challenge. Crisp v. United States, 966 F. Supp. 970, 971-72 (E.D. Cal. 1997). If a party brings a facial challenge, the court accepts the factual allegations in the complaint as true akin to a Rule 12(b)(6) motion. Id. If a party brings a factual challenge, the court does not accept plaintiff’s factual allegations as true. Thornhill Publ’g. Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979).
A Rule 12(b)(6) motion challenges the complaint as not alleging sufficient facts to state a claim for relief. Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss [under 12(b)(6) ], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 279 (2009) (internal quotation marks and citation omitted). While “detailed factual allegations” are unnecessary, the complaint must allege more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Id. at 678. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).
1. Zone of Interest
To assert a claim under the APA, a plaintiff must be “adversely affected or aggrieved by agency action within the meaning of a relevant statute.” 5 U.S.C. § 702. To satisfy this requirement, the plaintiff “must assert an interest ‘arguably within the zone of interest to be protected by the statute or constitutional guarantee in question.’ ” Nev. Land Action Ass’n v. U.S. Forest Serv., 8 F.3d 713, 716 (9th Cir. 1993) (quoting Ass’n of Data Processing Serv. Org., Inc. v. Camp, 397 U.S. 150, 153 (1970)). This test “is not meant to be especially demanding” and is to be applied “in keeping with Congress’s ‘evident intent’ when enacting the APA ‘to make agency action presumptively reviewable.’ ” Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, 225 (quoting Clarke v. Sec. Indus. Ass’n., 479 U.S. 388, 399 (1987)). The zone of interest test does not require any “indication of congressional purpose to benefit the would-be plaintiff.” Clarke, 479 U.S. at 399-400. The word arguably in the test indicates that the benefit of any doubt goes to the plaintiff. Patchak, 567 U.S. at 225. “The test forecloses suit only when a plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot be assumed Congress intended to permit suit.” Id. (internal quotation marks and citation omitted).
Defendants argue that Plaintiffs’ claims fall outside the zone of interest of the GSA and therefore they do not have a cause of action under the APA. See Fed. Def.’s Mot. at 8. Defendants claim that Plaintiffs’ first cause of action falls outside the zone of interest of § 1005(a) as this Court previously found that Plaintiffs’ environmental, cultural, spiritual and aesthetic interest and injuries do not fall within the zone of interest for BLM’s nondiscretionary duties under § 1005(a). Fed. Def.’s Mot. at 8-10. In Pit River II, Plaintiffs’ claimed that BLM violated the GSA by failing to terminate and unlawfully continuing twenty-six unproven leases. Pit River II, 793 F.3d at 1153-54. This Court held that none of the Plaintiffs’ claims were within the zone of interest of § 1005(a) because BLM considers environmental impacts when it makes discretionary decisions, but the actions challenged were nondiscretionary. Tribe v. Bureau of Land Mgmt., No. 2:04-CV-0956-JAM-JFM, 2013 WL 12057469, at *4-6 (E.D. Cal. July 30, 2013), rev’d sub nom. Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 1147 (9th Cir. 2015). Defendants argue that because the Lease at issue in Plaintiffs’ first cause of action was issued and continued pursuant to the nondiscretionary requirements of § 1005(a) their claims fall outside the zone of interest and must be dismissed. Fed. Def.’s Mot. at 10.
The Court disagrees. Plaintiffs in this case are not challenging the Lease extension under § 1005(a). Rather, Plaintiffs allege that BLM’s current production extension regulation, 43 C.F.R § 3207.15, which implements the diligent effort obligations of GSA sections § 1005(g)-(h), imposes ongoing requirements on lessees, that the lessee here has failed to satisfy those requirements making BLM obligated to terminate the Lease. FAC ¶¶ 24-36, 55-64, 78-80. Specifically, § 1005(g) states that any lease on which actual drilling operations were commenced prior to the end of its primary term and are being diligently prosecuted at that time shall be extended for five years and so long thereafter as geothermal steam is produced or utilized in commercial quantities. 30 U.S.C. § 1005(g) (emphasis added). 1005(h) states that produced or utilized in commercial quantities means the completion of a well producing geothermal steam in commercial quantities and wells capable of producing geothermal steam in commercial quantities so long as the Secretary determines that diligent efforts are being made toward the utilization of the geothermal steam. Id. § 1005(h) (emphasis added).
1005(g)-(h) therefore requires when as here, a Lease is allegedly not actually producing geothermal steam, that diligent efforts are being made toward the utilization. Thus, one of the interests arguably to be protected by 1005(g)-(h) is ensuring that leases are being productively used so that public lands are not indefinitely tied up by idling leases. Cf. Nat’l Credit Union Admin. v. First Nat. Bank & Trust Co., 522 U.S. 479, 492-93. Plaintiffs, as neighbors with an interest in using this land, are then arguably within the zone of interest to be protected by the statute. Cf. id.; see also Patchak, 567 U.S. at 225-28.
Relatedly, Plaintiffs allege that the Glass Mountain Unit Agreement and 30 U.S.C. § 1017, implemented through the unit agreement regulations 43 C.F.R Part 3280, require BLM to ensure that the Unit is administered in the public interest, including through diligent exploration, development and production. FAC ¶¶ 37-54, 65-77, 81-83. Plaintiffs allege that the unit operator has failed to satisfy these requirements and BLM is, therefore, legally obligated to terminate the Unit. Id. The language of § 1017 indicates a congressional purpose to benefit Plaintiffs as members of the public with an interest in this land. For these reasons the Court finds that both of Plaintiffs’ claims fall within the zone of interest.
2. Res Judicata
Claim preclusion bars a later claim where there is: (1) an identity of claims; (2) a final judgment on the merits; and (3) privity between the parties. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) (internal quotations and citations omitted). The parties do not dispute elements two and three, as there was a final judgment on the merits in a previous action, between the same parties. See Fed. Def.’s Mot. at 13; Pl.’s Opp’n at 17. The only question, then, is whether there is an identity of claims. In making this determination the court looks to: (1) whether the rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise of the same transaction nucleus of facts. Howard v. City of Coos Bay, 871 F.3d 1032, 1039 (9th Cir. 2017) (internal quotation marks and citations omitted). The fourth criterion, whether the two suits arise out of the same transaction nucleus of facts, is the most important. Harris v. City of Orange, 871 F.3d 1126, 1132 (9th Cir. 2012). In applying this test, the Court “must narrowly construe the scope of [the] earlier action.” Cent. Delta Water Agency v. United States, 306 F.3d 938, 953 (9th Cir. 2002).
Defendants argue that Plaintiffs’ suit is claim precluded as they allege many of the same facts regarding lease productivity and unit formation as they did in their first amended complaint in Pit River II. Fed. Def.’s Mot. at 12. Defendants argue that the suits arise out of the same transaction nucleus of facts, namely BLM’s geothermal lease administration practices and unit formation and maintenance. Id. Additionally, Defendants argue that Plaintiffs’ second cause of action is barred because it is the same claim they brought in Pit River II – failure to terminate the Glass Mountain Unit. Id. at 13.
In Fund for Animal, plaintiffs challenged the bison management practices of the federal government in Yellowstone. Fund for Animals, Inc. v. Lujan, 962 F.2d 1391, 1394 (9th Cir. 1992). The Ninth Circuit held that an action challenging bison management practices five years earlier did not have preclusive effect, as the earlier action challenged different governmental conduct than that involved in the later action, even though the harm alleged was the same. Id. at 1398-99.
Similarly, here Plaintiffs challenge different governmental conduct than was at issue in Pit River II. In Pit River II, Plaintiffs challenged a decision document issued by BLM extending twenty-six nonproducing leases in the Glass Mountain Unit. Pit River II, 793 F.3d at 1153-54. The issue in that case, was whether BLM could lawfully continue the non-producing leases for up to forty years pursuant to former GSA § 1005(a). Id. at 1159. Plaintiffs did not challenge Lease 12372, which is now at issue in this case. Plaintiffs here allege that the lessee of the potentially productive Lease 12372 is not making diligent efforts toward development, making BLM legally obligated to terminate the Lease pursuant to GSA § 1005(g)-(h) and the implementing regulations. FAC ¶¶ 24-36, 55-64, 78-80. This involves different governmental conduct, namely BLM’s failure to enforce the diligent efforts requirement regarding Lease 12372, compared to BLM’s decision to extend twenty-six other leases in Pit River II.
In Pit River II, Plaintiffs also claimed that BLM unlawfully failed to terminate or eliminate those twenty-six leases from the Glass Mountain Unit Agreement and unlawfully failed to contract the Unit to include only Lease 12372. First Amended Complaint, ¶¶ 107(a)-(b), Tribe v. Bureau of Land Mgmt., No. 2:04-CV-0956-JAM-JFM, 2013 WL 12057469, at *4-6 (E.D. Cal. July 30, 2013), rev’d sub nom. Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 1147 (9th Cir. 2015). Now Plaintiffs claim that the Unit itself should be terminated for lack of diligence on the remaining Lease 12372. FAC ¶¶ 81-83. While some of the background facts overlap, Plaintiffs’ current causes of action raise additional facts not alleged in the previous suit that give rise to new claims – that diligent efforts have not been made on Lease 12372 which require its termination and that of the Unit. For these reasons, the Court finds both of Plaintiffs’ causes of actions are not claim precluded.
3. 706(1) Claim
The APA provides relief for an agency’s failure to act in § 706(1): “The reviewing court shall … compel agency action unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 706(1). To state a claim under 706(1), a plaintiff must assert “that an agency failed to take a discrete action that it is required to take.” Norton v. S. Utah Wilderness All., 542 U.S. 55, 64 (2004). A plaintiff adequately states a claim under 706(1) where they have alleged both a legal duty to perform a discrete agency action and a failure to perform that action. Vietnam Veterans of America v. Cent. Intelligence Agency, 811 F.3d 1068, 1079 (9th Cir. 2016). The term law “includes, of course, agency regulations that have the force of law.” Norton, 542 at 65. Regarding the discreetness requirement, the “failure to act” is “properly understood as … a failure to take one of the agency actions (including other equivalents) earlier defined in [5 U.S.C] § 551(13)”. Id. at 62. Agency actions defined in 5
U.S.C. § 551(13) include issuance of a rule, order, license, sanction, relief or equivalent benefit. The discreteness limitation precludes using “broad statutory mandates” to attack agency policy. Id. at 64.
Defendants argue that Plaintiffs have failed to bring a claim under 706(1) because they have not identified any legal duty of BLM’s to perform a discrete action. See Fed. Def.’s Mot. at 14. The Court disagrees. Plaintiffs rely on 43 C.F.R § 3207.15 which states that where, as here, there has never been any actual production on the Lease the lessee “must demonstrate on an annual basis that [they] are making diligent efforts toward utilization of the resource,” 43 C.F.R 3207.15(c) (emphasis added), and that production extension will continue only as long as those diligent efforts are being demonstrated. Id. § 3207.15(g). Further, it provides that “BLM will terminate your lease unless you meet the conditions set forth in 3212.15 or 3213.19.” Id. (emphasis added). These regulations provide a “specific, unequivocal command” to take “discrete agency action” namely, terminate the Lease unless diligent efforts are made, or other conditions met. Calpine contends that these regulations do not apply, as the current regulations did not govern BLM’s decision to extend their lease. Corp. Def.’s Mot. at 8. But Plaintiffs’ claim is not about BLM’s decision to extend the lease. FAC ¶¶ 2, 79. Instead, it is about the ongoing diligence requirements of the current regulations which Calpine elected to have govern their lease. Pit River Tribe v. U.S. Forest Serv., 615 F.3d 1069, 1084 (9th Cir. 2010). Plaintiffs have alleged that Calpine has not and cannot demonstrate compliance with these requirements and thus BLM is legally obligated to terminate the Lease. FAC ¶¶ 55-64, 78-80. This is sufficient to state a claim under APA § 706(1). See Vietnam Veterans, 811 F.3d at 1079. Defendants may, of course, dispute this factually, but not at the motion to dismiss stage. See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001) (noting a claim may be dismissed only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.)
Similarly, Plaintiffs have alleged in their second claim that the Glass Mountain Unit Agreement requires the Unit operator to continue diligent exploration through timely drilling under an approved plan and that failure to comply shall result in automatic termination of the agreement. FAC ¶¶ 66-67. Additionally, they point to 43 C.F.R. § 3284.3 which states that “if the unit operator does not drill a well designed to produce or utilize geothermal resources in commercial quantities within the timeframe specified in the unit agreement … BLM will deem the unit agreement void as though it was never in effect.” 43 C.F.R. § 3284.3 (emphasis added). Plaintiffs allege that these requirements have not been met mandating termination of the Unit. FAC ¶¶ 68-77, 81-83. Again, this provides a specific unequivocal command to take a discrete agency action – terminate the Unit when there hasn’t been diligent exploration. See Norton, 542 at 69 (suggesting an agency may be bound by something other than a rule or regulation where there is a clear indication of a binding commitment to the terms). Because both claims allege a legal duty to perform a discrete agency action and a failure to perform that action, the Court finds Plaintiffs have stated a claim under 706(1).
4. Statute of Limitations
Title 28 United States Code, section 2401(a) provides a six-year statute of limitations to civil action commenced against the United States. 28 U.S.C. § 2401(a). This limitation applies to cases brought under the APA. Hells Canyon Pres. Council v. United States Forest Serv., 593 F.3d 923 (9th Cir. 2010). The Ninth Circuit has suggested, without specifically addressing the issue, that § 2401(a) may not be applicable in 706(1) failure to act claims under the APA. See id. at 933 (noting that had the Forest Service failed to act at all Plaintiffs may have had a 706(1) claim despite their 706(2) claims being time barred) (citing Wilderness Soc’y v. Norton, 434 F.3d 584, 588-89 (D.C. Cir. 2006) for the proposition that 706 relief is available notwithstanding 28 U.S.C. § 2401(a), where the agency ignored a statutory deadline).
Defendants argue that Plaintiffs’ claims are barred by the six-year statute of limitations because “all the events that purportedly give rise to Plaintiff’s claims occurred in the 1980’s and 1990’s.” Fed Def.’s Mot. at 15. Plaintiffs contend that because they allege Defendants haven’t complied with their ongoing duty to act under the GSA, the statute of limitations does not bar their claims as “BLM’s ongoing failure to satisfy its legal obligations under the GSA accrues continually until the agency complies with the law.” Pl.’s Opp’n at 27.
The Court agrees with Plaintiffs, that the statute of limitations does not bar their claims. Plaintiffs allege that BLM has an ongoing obligation to ensure diligent efforts are being made on the Lease and the Unit and that BLM is not currently fulfilling this obligation. Plaintiffs seek an order from the Court that they do so. FAC ¶¶ 78-83. Each day that BLM fails to ensure compliance with the diligent effort requirements constitutes a single, discrete violation of the statute. See Padres Hacia Una Vida Mejor v. Jackson, No. 1:11-CV-1094 AWI DLB, 2012 WL 1158753, at *9 (E.D. Cal. Apr. 6, 2012); Inst. for Wildlife Prot. V. U.S. Fish and Wildlife Serv., No. 07-CV-358-PK, 2007 WL 4117978, at *6 (D. Or. Nov. 16, 2007). Thus, Plaintiffs action is timely because it seeks relief for BLM’s failure to meet its ongoing duty.
5. Prayers for Relief Against Calpine
The APA provides no right of action against a non-federal party. See 5 U.S.C. § 702. Non-federal parties, however, may be named as defendants in APA actions for the “sole purpose of making it possible to accord complete relief between those who are already parties” under the Federal Rules of Civil Procedure Rule 19, joinder of indispensable parties. Nat’l Wildlife Fed’n v. Epsy, 45 F.3d 1337, 1344-45 (9th Cir. 1995). Rule 19 does not create any substantive cause of action against non-federal parties. Equal Emp’t Opportunity Comm’n v. Peabody W. Coal Co., 400 F.3d 774, 783 (9th Cir. 2005). As such, a plaintiff may not seek any affirmative relief against a non-federal defendant joined under Rule 19 in APA actions. Quechan Indian Tribe v. U.S. Dep’t of the Interior, No. CV07-0677-PHX-JAT, 2007 WL 2023487, at *8 (D. Ariz. July 12, 2007).
Calpine requests the Court dismiss Plaintiffs’ First and Fifth prayer for relief against Calpine as Plaintiffs only basis for naming Calpine as a defendant is under Rule 19. Corp. Def.’s Mot. at 11-15. Plaintiffs’ First prayer for relief requests this Court “[d]eclare that Calpine is not in compliance with the requirements of the Geothermal Steam Act, its implementing regulations, the Lease, and the Unit Agreement and that such violations continue to this day.” FAC at 18. Plaintiffs’ Fifth prayer for relief requests this Court to “[e]njoin any further activity in reliance on the Lease or Unit Agreement.” Id. Because the First prayer for relief seeks affirmative declaratory relief against Calpine, it is dismissed. See Whittlestone Inc. v. Handi-Craft Co., 618 F.3d 970, 974 (9th Cir. 2010) (holding that a motion to dismiss under Rule 12(b)(6) is the appropriate means of disposing of an improper claim for relief). Plaintiffs’ Fifth prayer for relief, however, does not seek any affirmative relief against Calpine. For these reasons the Court GRANTS Calpine’s Motion to Dismiss the First prayer for relief and DENIES its Motion to Dismiss the Fifth prayer for relief.
For the reasons set forth above, the Court DENIES Federal Defendant’s Motion to Dismiss and GRANTS in part and DENIES in part Calpine’s Motion to Dismiss.
IT IS SO ORDERED.
This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for October 13, 2020.