U.S. Supreme Court to Review Standard for Permanent Injunctive Relief in NEPA Cases

The U.S. Supreme Court has granted certiorari in Monsanto Company v. Geertson Seed Farms in order to determine, in part, whether the injunctive relief standard applied by the Ninth Circuit in a National Environmental Policy Act (“NEPA”) case – which may be more favorable to NEPA plaintiffs than intended by the Supreme Court – is appropriate.[1] The issue arises from Geertson Seed Farms v. Monsanto Co. (“Geertson Seed”),[2] a case in which the Ninth Circuit upheld a district court’s decision to permanently enjoin the planting of genetically modified “Roundup Ready” alfalfa (“RRA”) nationwide, pending federal environmental review.

In the Supreme Court’s last term, it reversed every Ninth Circuit opinion involving environmental laws, including Winter v. Natural Resources Defense Council, another NEPA case.[3] See S. Brandt-Erichsen, Supreme Court Rules on Preliminary Injunction Standard in Environmental Cases, Marten Law Environmental News (Nov. 13, 2008). The Ninth Circuit issued its opinion in Geertson Seed before the Supreme Court reiterated the standard for preliminary injunctions in Winter; namely: (1) likelihood of success on the merits; (2) likelihood of irreparable harm in the absence of preliminary relief; (3) the balance of equities between the parties; and (4) the public interest. Petitioners in Geertson Seed allege that the Ninth Circuit deviated from fundamental principles underlying injunctive relief that the Supreme Court reiterated in Winter.

Specifically, Monsanto argued in its petition for certiorari that the Ninth Circuit applied the wrong standard for permanent injunctive relief in Geertson Seed, effectively affording project opponents with a presumption of irreparable harm under the four-factor test for such relief, and threatening to “make blanket injunctions all but automatic in NEPA cases arising in th[e] circuit.” The company also argued that the district court’s decision not to hold an evidentiary hearing before granting injunctive relief, and the Ninth Circuit’s affirmance of that decision, runs counter to the trial-based adversarial system in place “[f]or nearly a millennium [of] Anglo-American jurisprudence.”[4]

The parties will submit their briefing on an expedited schedule. Oral argument will likely occur in April 2010, and a decision is expected by June 2010.[5] Justice Stephen Breyer has recused himself because his brother, U.S. District Judge Charles Breyer of the Northern District of California, entered the injunction at issue.

Background to the Case

In Geertson Seed, the district court concluded, and appellants did not dispute, that the U.S. Department of Agriculture (the “USDA”) violated NEPA by failing to adequately assess the environmental impacts of RRA before deregulating it. The Animal and Plant Health Inspection Service (“APHIS”) has since published the draft environmental impact statement (“EIS”) that the plaintiffs sought below, and is expected to finalize the EIS soon. The injunction could be lifted before the Court decides Geertson Seed, rendering questions about the proper scope of the injunction moot. The Supreme Court granted Monsanto’s petition regardless, presumably because disposition of the questions presented will affect the prerequisites to granting injunctive relief in other NEPA cases and the issue of whether evidentiary hearings are required before lower courts grant such relief.

Monsanto’s petition to deregulate RRA

In April 2004, Monsanto and Forage Genetics petitioned APHIS to deregulate RRA. Geertson Seed Farms and other alfalfa growers, along with the Center for Food Safety, Center for Biological Diversity, Western Organization of Resource Councils, Sierra Club and other non-profit organizations, opposed the petition. The groups argued that: (1) RRA would contaminate conventional and organic alfalfa through gene transmission; (2) due to contamination, deregulation could prohibit farmers from marketing natural products as organic or non-genetically engineered; (3) contamination would also impact organic livestock sellers; and (4) RRA would negatively impact the export market. Following the biotech companies’ petition, APHIS prepared an environmental assessment (“EA”) under NEPA, issued a Finding of No Significant Impact (“FONSI”) and granted Monsanto’s deregulation petition.

In February 2006, Geertson Seed, another conventional alfalfa seed producer, and several environmental groups filed suit against the Secretary of the USDA, APHIS and the U.S. Environmental Protection Agency, challenging the decision to deregulate RRA. The court allowed Monsanto, Forage Genetics, and three individuals to intervene as defendants.

Full articles on the district and appellate court decisions that followed are available in earlier editions of the Marten Law newsletter. See J. Ferrell, Ninth Circuit Upholds Permanent Injunction in NEPA Case Without Evidentiary Hearing, Marten Law Environmental News (Sept. 30, 2008); Faulty NEPA Analysis Results in Injunction Against Planting Genetically Modified Crops, Marten Law Environmental News (May 2, 2007). A synopsis of those opinions follows below.

The district court opinion in Geertson Seed

 Plaintiffs in Geertson Seed brought claims under NEPA, the Endangered Species Act, and the Plant Protection Act. In a February 2007 order, Judge Breyer found that the petition raised “substantial questions” as to whether (1) “deregulation of RRA without any geographic restrictions will lead to the transmission of the engineered gene to organic and conventional alfalfa; (2) the possible extent of such transmission; (3) farmers’ ability to protect their crops from acquiring the genetically engineered gene; [and (4)] the extent to which RRA will contribute to the development of Roundup-resistant weeds … and how farmers will address such weeds.” He reserved consideration of plaintiffs’ other claims pending APHIS’ preparation of an EIS. With those findings, and without an evidentiary hearing, Judge Breyer vacated the federal defendants’ decision deregulating RRA and enjoined all future planting of RRA nationwide, pending APHIS’ completion of an EIS.[6]

The Ninth Circuit opinion in Geertson Seed

Monsanto appealed the injunction to the Ninth Circuit, arguing that: (1) the district court should have held an evidentiary hearing before issuing a nationwide injunction; and (2) the district court “erred in ordering injunctive relief because it improperly presumed irreparable injury instead of applying the traditional four-factor test for the issuance of a permanent injunction, as required under eBay v. MercExchange, L.L.C.” and, as a result, ordered overbroad injunctive relief.[7]

The Ninth Circuit affirmed the lower court. It held that, under eBay, to obtain permanent injunctive relief a plaintiff must show: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”[8] The court held that this “traditional balancing of harms” also applies in the environmental context, and that courts cannot categorically grant or deny injunctive relief without applying the eBay test. The Ninth Circuit also found that the district court properly applied thattest.[9]

In affirming the district court’s decision not to hold an evidentiary hearing, the Ninth Circuit conceded that, “generally,” a district court must hold such a hearing before issuing a permanent injunction “unless the adverse party has waived its right to a hearing or the facts are undisputed.”[10] However, the Ninth Circuit found that the NEPA injunction at issue in the case “is not a typical permanent injunction.” Instead, the court determined that because the injunction is designed to ensure compliance with NEPA, it is therefore more limited in “purpose and duration.” Citing judicial economy and the district court’s consideration of extensive documentary submissions in the remedy phase, the Ninth Circuit held that the district court did not err by declining to hold an evidentiary hearing before enjoining RRA planting nationwide. The court found that an evidentiary hearing would have required the district court “to engage in precisely the same inquiry it concluded APHIS failed to do and must do in an EIS,” and that the appellants “in effect” asked the court “to accept its truncated EIS without the benefit of the development of all the relevant data and … without the opportunity for and consideration of public comment.”[11]

Dissent to the majority Ninth Circuit opinion

Dissenting, Circuit Judge N. Randy Smith noted that the nationwide injunction has “severe economic consequences” for appellants, as well as farmers and distributors across the country. Judge Smith opined that, by affirming the district court's decision not to hold an evidentiary hearing, the majority effectively created “a third exception to the evidentiary hearing requirement.” According to Judge Smith, a court may now forego an evidentiary hearing “simply because (1) the injunction may dissolve at some point and (2) the issues, to be raised at the hearing, overlap with the issues the agency must consider.” Describing the majority’s “deference” to the district court as a “mistake” – particularly in light of the district court’s “wholesale rejection” of the agency’s position – Judge Smith opined that “[t]here aren’t many environmental cases that don’t fit into the majority’s newly-created exception.”[12]

Monsanto petitioned the Ninth Circuit for panel rehearing and rehearing en banc. The Ninth Circuit amended its original opinion (as summarized above), but denied both petitions. Monsanto’s petition to the Supreme Court followed.

Questions Presented to the U.S. Supreme Court

In its petition to the Supreme Court, Monsanto summarized the case as follows:

In this case, after finding a violation of … NEPA, the district court imposed, and the Ninth Circuit affirmed, a permanent nationwide injunction against any further planting of a valuable genetically engineered crop, despite overwhelming evidence that less restrictive measures proposed by an expert federal agency would eliminate any non-trivial risk of harm.

Monsanto framed the questions presented as whether the Ninth Circuit erred:

1. … in holding that NEPA plaintiffs are specially exempt from the requirement of showing a likelihood of irreparable harm to obtain an injunction.

2. … in holding that a district court may enter an injunction sought to remedy a NEPA violation without conducting an evidentiary hearing sought by a party to resolve genuinely disputed facts directly relevant to the appropriate scope of the requested injunction.

3. … when it affirmed a nationwide injunction entered prior to this Court's decision in Winter … which sought to remedy a NEPA violation based on only a remote possibility of reparable harm.[13]

Monsanto’s primary arguments in support of review are that the Ninth Circuit: (1) denied an evidentiary hearing on the ground that “the likelihood of irreparable harm is immaterial to the issuance of a NEPA injunction”; (2) denied an evidentiary hearing on the ground that NEPA injunctions – even if styled “permanent” – are in fact “temporary”; and (3) affirmed an injunction based on the “mere possibility of reparable harm[.]”[14] Monsanto argues that the Ninth Circuit, “freed from the discipline imposed by the traditional likelihood-of-harm standard … imposed an injunction that is so broad that it prohibits beneficial activities that pose no risk of harm whatsoever.”

Monsanto further argues that, in its amended opinion issued after Winter, the Ninth Circuit gave the Supreme Court’s decision in that caseshort shrift by merely citing it “as support for a preexisting sentence approving the district court’s conclusion.”[15] Emphasizing the “extraordinary” nature of injunctive remedies, Monsanto argues that the Ninth Circuit’s “deprivation of an evidentiary hearing in the face of genuine disputes over material facts conflicts with centuries of common law and the holdings of numerous other courts of appeals[,]” and that failure to reverse Geertson Seed would “effectively nullify th[e Supreme C]ourt’s holdings in Winter, eBay … , and Amoco [Production Co. v. Village of Gambell, 480 U.S. 531 (1987)], make broad injunctive relief all but automatic … whenever a district court finds a NEPA violation in the Ninth Circuit, and impermissibly expand the scope of NEPA.”[16]

Agbiotech company PhytaGro, LLC filed an amicus curiae brief in support of Monsanto’s petition, alleging that: (1) genetically-modified alfalfa is safe and important to provide for world food needs; and (2) the Ninth Circuit’s alleged presumption in favor of injunctive relief “chills scientific advancement in an industry that needs more technology, not less, and causes significant unjustified economic losses.”[17] The American Farm Bureau Federation, Biotechnology Industry Organization, American Seed Trade Association, and National Corn Growers Association also filed a brief in support of Monsanto’s petition, making arguments similar to PhytaGro’s.[18] The Washington Legal Foundation, a non-profit public interest law and policy center, also filed a brief in support of review out of “concern … that the decision below, if allowed to stand, will effectively limit Winter to cases raising NEPA issues in a national security context.”[19]

The federal government and the Center for Food Safety (the “Center”) opposed Monsanto’s petition. While the government agrees with Monsanto that the Ninth Circuit “erred in determining that the permanent injunction … was appropriately tailored and that the district court applied the correct legal standard[,]” it does not think further review is warranted because the Ninth Circuit “set forth the correct legal standard and its decision does not squarely conflict” with any Supreme Court or appellate court opinion.[20]

The Center argued that review is unwarranted because: (1) APHIS has published a draft EIS on RRA and will likely finalize it before the Court decides the case, rendering consideration of the proper scope of injunctive relief a moot issue;[21] and (2) the Ninth Circuit and lower court applied the correct standard for injunctive relief. The Center also takes issue with Monsanto’s characterization of the Ninth Circuit’s opinion as “brazen defiance” of Winter. The Center asserts that the Ninth Circuit did not apply a “mere possibility” of harm standard as alleged by Monsanto, nor did it otherwise fail to follow Winter or eBay. The Center argues that “Monsanto’s depiction of a circuit in open revolt against [Supreme Court] rulings is not just hyperbolic but outright false.”[22]

Conclusion

Since the Ninth Circuit amended its Geertson Seed opinion in June 2009, courts have cited it in five opinions, primarily in conjunction with a parallel citation to eBay, and have not applied it to categorically assume irreparable harm based on NEPA violations in the context of injunctive relief requests.[23] The four courts that cited the original opinion also did so with a citation to eBay and an application of the standard four-part test for injunctive relief.[24] However, Monsanto argues that the Ninth Circuit “invented a new special rule that will effectively permit district courts … to presume irreparable harm in NEPA cases.”[25] If Geertson Seed indeed provides NEPA plaintiffs with a presumption of irreparable harm for purposes of injunctive relief requests, then the Supreme Court may well reverse that result by applying eBay and Winter in the pending Monsanto case. If the Court does not reverse that holding, then NEPA plaintiffs have a considerable advantage in requests for injunctive relief.

For more information, contact Jessica Ferrell or any other member of the Marten Law Environmental Litigation or Permitting & Environmental Review practice groups.