Prior injunction, pending appeal may be moot; Status of court's apparent conflicts-of-interest remain an open question...
By Ernest A. Canning on 7/13/2010, 2:50pm PT  

Guest blogged by Ernest A. Canning

As noted in today's Green News Report, Secretary of the Interior Ken Salazar has ordered a new moratorium on exploratory deepwater drilling in the Gulf of Mexico and elsewhere off the continental shelf of the U.S.. The new suspension may make prior court battles over the previous moratorium moot, even as questions linger concerning apparent conflicts-of-interest by the judge who originally heard the case.

Stating that he was basing his decision on "an extensive record of existing and new information indicating that allowing new deepwater drilling to commence would pose a threat of serious, irreparable, or immediate harm or damage to the marine, coastal, and human environment," Salazar sent a memo yesterday to Michael R. Bromwich, the Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM), directing him to issue new suspensions of deepwater drilling on the Outer Continental Shelf (OCS). The new suspensions, presuming they withstand another inevitable court challenge from the oil industry, will run through November 30 and apply to both the Pacific and Gulf Coast regions.

In revealing the new suspensions, Salazar announced...

I remain open to modifying the new deepwater drilling suspensions based on new information, but industry must raise the bar on its practices and answer fundamental questions about deepwater safety, blowout prevention and containment, and oil spill response.

The new suspension, which the Department estimates will apply to just 21 rigs, comes four days after a three-judge panel of the heavily-Republican 5th Circuit Court of Appeal in New Orleans rejected the Department of Interior's request for an emergency stay of Judge Martin Feldman's June 22, 2010 preliminary injunction [PDF]. That injunction prevented enforcement of the Department of Interior's six month moratorium on exploratory drilling on only 33 "of the approximately 3,600 structures in the Gulf dedicated to offshore oil exploration and production."

Because it is based on new evidence, the status of both the appeal and injunction in the previous case, Hornbeck Offshore Services, Inc. vs. Salazar, is in doubt.

New suspension guidelines

In his memorandum, Salazar directed Bromwich to utilize the suspension for:

1. The submission of evidence by operators demonstrating that they have the ability to respond effectively to a potential oil spill in the Gulf, given the unprecedented commitment of available oil spill response resources that are now being dedicated to the BP oil spill;

2. The assessment of wild well intervention and blowout containment resources to determine the strategies and methods by which they can be made more readily available should another blowout occur; and

3. The collection and analysis of key evidence regarding the potential causes of the April 20, 2010 explosion and sinking of the Deepwater Horizon offshore drilling rig, including information collected by the Presidential Commission and other investigations.

The one thing not mentioned is the lasting impact of oil spill disasters. Consider the fact that Dec. 7, 2011 will mark the 60th anniversary of the "date which will live in infamy." Yet, after all these years, if you stand on the deck of the Arizona Memorial and look down into the water, you will still see oil seeping up from below. The Memorial guides refer to it as "the ship's tears."

In its previous 5th Circuit motion for a stay [PDF], the government advised the court that Salazar was pursuing "all avenues for addressing risky operations, and will take new and immediately effective action as necessary." It noted that even the plaintiff, Hornbeck, admitted that Salazar "has the authority to do so."

The government brief announced a new suspension would soon issue, noting:

The district court never disputed that the OCSLA [Outer Continental Shelf Lands Act] grants Interior the authority to issue the suspensions at issue. It merely complained that Interior had not adequately explained its reasons for doing so.

In explaining Salazar's new, July 12 directive, the Department of Interior stressed [PDF] that the "new" suspension was based on "new evidence regarding safety concerns, blowout containment shortcomings within the industry, and spill response capabilities that are strained by the BP oil spill. Moreover, the new decision by the Secretary establishes a process through which BOEM will gather and analyze new information from the public, experts, stakeholders, and the industry on safety and response issues...In addition, the May 28 moratorium proscribed drilling based on specific water depths; the new decision does not suspend activities based on water depth, but on the basis of the drilling configurations and technologies."

A moot case and an interest-conflicted judge?

If the government's previous brief is accurate, the appropriate appellate course would be to rule that the previous moratorium has been superseded by the new one necessitating that the case be remanded to the District Court for further proceedings. If that occurs, the parties will be back to square one with Hornbeck having the burden of showing that the "new" moratorium is arbitrary and capricious.

But if Hornbeck files a motion seeking a new preliminary injunction the question remains as to whether Judge Feldman must recuse himself in light of the conflicts-of-interest we discussed in Case for Impeachment of Judge Martin Feldman Strengthened by New Details on Oil Firm Holdings.

As we have previously detailed, according to the Alliance for Justice [PDF]:

In 2009, Judge Feldman had financial investments valued at between $36,000-515,000 in twenty-eight individual energy and energy-related corporations, among them Exxon Mobil, Transocean, General Electric, Tyco International, and numerous smaller companies such as Ocean Energy, El Paso, and Quicksilver Resources. Additionally, in 2009 Judge Feldman invested between $7,000–105,000 in Blackrock, a money management firm that is BP’s biggest shareholder.

While the government did not previously move to disqualify Judge Feldman, the Alliance for Justice reported that "a group of environmental groups intervened and filed a motion for his disqualification, arguing that his financial holdings in oil and gas companies create the appearance of partiality."

In the opinion of this writer, the government can and should move to disqualify Judge Feldman if and when this matter is returned to the District Court for further proceedings.

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Ernest A. Canning has been an active member of the California state bar since 1977. Mr. Canning has received both undergraduate and graduate degrees in political science as well as a juris doctor. He is also a Vietnam vet (4th Infantry, Central Highlands 1968).