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Supreme Court Reasserts Standard for Injunctive Relief in NEPA Cases

June 28, 2010

Reversing a nationwide injunction, the United States Supreme Court reiterated the four-part standard for injunctive relief it announced in 2008, confirming that this same standard applies in cases arising under NEPA. In a 7-1 opinion[1] delivered by Justice Alito in Monsanto Co. v. Geertson Seed Farms (Monsanto),[2] the Court relied on its earlier opinions in Winter v. Natural Resources Defense Council,[3] and eBay Inc. v. MercExchange, L.L.C.,[4] holding that showings of irreparable injury, inadequacy of legal remedies, a balance of hardships tipping in favor of the party seeking the injunction and consideration of the public interest are all necessary before an injunction may issue.[5]

Background

Monsanto presented the issue of whether cases arising under the National Environmental Policy Act (NEPA) are subject to a standard for injunctive relief that is more favorable to NEPA plaintiffs, effectively affording project opponents with a presumption of irreparable harm. In the case below, the Ninth Circuit upheld a district court’s decision to permanently enjoin the planting of genetically modified “Roundup Ready” alfalfa (RRA) nationwide, pending preparation of an environmental impact statement (EIS) under NEPA.[6]

In Monsanto, the Court relied heavily on its 2008 opinion in Winter v. Natural Resources Defense Council, another NEPA case.[7] The decision in Winter was reviewed in this newsletter. See Supreme Court Rules on Preliminary Injunction Standard in Environmental Cases, Marten Law Environmental News (Nov. 13, 2008). The Ninth Circuit issued its opinion in Monsanto before the Supreme Court reiterated the standard for preliminary injunctions in Winter – in that case, the Court held that injunctive relief required a showing of: (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) that the public interest would not be disserved.[8] Petitioners in Monsanto alleged that the Ninth Circuit applied the wrong standard for permanent injunctive relief, threatening to make blanket injunctions all but automatic in NEPA cases.

Monsanto’s Petition to Deregulate Roundup Ready Alfalfa

In April 2004, Monsanto and Forage Genetics petitioned the Animal and Plant Health Inspection Service (a division of the USDA) (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. They 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.

In response to the deregulation petition, APHIS prepared an environmental assessment under NEPA, issued a Finding of No Significant Impact, and then granted the 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 are available in earlier editions of this 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).

The District Court’s Injunction

Plaintiffs in Geertson Seed brought claims under NEPA, the Endangered Species Act, and the Plant Protection Act. In a February 2007 order, Judge Charles 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. Based on those findings, and without holding 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.[9]

The Ninth Circuit’s Opinion

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.[10]

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.”[11] 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 found that the district court properly applied that test.[12] In affirming the district court’s decision not to hold an evidentiary hearing, the Ninth Circuit conceded that, a district court must generally 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.”[13]

The Ninth Circuit found, however, that the injunction in the case “is not a typical permanent injunction.” Instead, the court determined that, because the injunction was designed to ensure compliance with NEPA, it was 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” were asking 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.”[14]

A Dissent in the Ninth Circuit Draws Notice from the Supreme Court

In a dissent specifically referenced in Justice Alito’s opinion,[15] Circuit Judge N. Randy Smith noted that the nationwide injunction imposed “severe economic consequences” on the appellants, as well as farmers and distributors across the country. Judge Smith stated 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 not 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.”[16]

The Supreme Court Requires a Showing of Irreparable Harm, Even Under NEPA

The Supreme Court noted that the district court's injunction sought to remedy APHIS’ NEPA violation in three ways: (1) by vacating the agency’s decision completely deregulating RRA; (2) by enjoining APHIS from deregulating RRA in any fashion until it completed an EIS; and (3) by entering a nationwide injunction prohibiting almost all planting of RRA.[17] In rejecting this approach, the Court made clear that its “traditional four-factor test applies when a plaintiff seeks a permanent injunction to remedy a NEPA violation.”[18]

In reversing the injunction, the Supreme Court rejected the approach taken by both the Ninth Circuit and the district court. The district court had held that “in the run of the mill NEPA case,” an injunction delaying the contemplated government project is proper “until the NEPA violation is cured.”[19] Both the district court and Ninth Circuit stated that “in unusual circumstances, an injunction may be withheld, or, more likely, limited in scope” in NEPA cases.[20] While acknowledging that both of those decisions pre-dated the Court’s opinion in Winter, the Court pointedly noted that the approach taken by both the district court and the Ninth Circuit “invert the proper mode of analysis.”[21] Concluding that both lower courts had it backwards, Justice Alito stated:

[T]he statements above appear to presume that an injunction is the proper remedy for a NEPA violation except in unusual circumstances. No such thumb on the scales is warranted.… It is not enough for a court considering a request for injunctive relief to ask whether there is a good reason why an injunction should not issue; rather a court must determine that an injunction should issue under the traditional four-factor test set out above.[22]

The District Court Acted Prematurely In Enjoining the Agency Before It Exercised Its Authority

The Court also held that the district court abused its discretion in enjoining APHIS from pursuing any deregulation of RRA whatsoever, since the agency had not taken final action in determining the breadth of its deregulation decision. “Until such time as the agency decides whether and how to exercise its regulatory authority, however, the courts have no cause to intervene. Indeed, the broad injunction entered here essentially pre-empts the very procedure by which the agency could determine, independently of the pending EIS process for assessing the effects of a complete deregulation, that a limited deregulation would not pose any appreciable risk of environmental harm.”[23]

Standing

In addition to reaffirming the injunctive standards in Winter and eBay, the Court also rejected challenges advanced by both petitioners and respondents, each of whom argued that the other lacked standing. The Court held that the possibility that the petitioners could not sell or license RRA to prospective customers and that their injuries could be redressed by an order from the Court constituted a concrete, particularized, imminent injury that was traceable to the challenged action, thereby creating Article III standing.[24] Similarly, the respondents “established a reasonable probability that their organic and conventional alfalfa crops will be infected with the engineered gene” contained in RRA, if it was completely deregulated.[25] The Court held that “[s]uch harms, which respondents will suffer even if their crops are not actually infected with the Roundup ready gene, are sufficiently concrete to satisfy the injury-in-fact prong of the constitutional standing analysis.”[26]

Justice Stevens’ Dissent

Justice Steven filed a lone dissent, highlighting that “[w]hen a district court takes on the equitable role of adjusting legal obligations, we review the remedy it crafts for abuse of discretion. ‘[D]eference, we have explained, ‘is the hallmark of abuse-of-discretion review.’ Although equitable remedies are ‘not left to a trial court’s inclination,’ they are left to the court’s ‘judgment.’”[27] Justice Stevens would have sustained the district court’s injunction as both an “equitable application of administrative law,” and also as a “reasonable response to the nature of the risks posed by RRA.”[28] Given the facts, Justice Stevens felt that “it was perfectly reasonable to wait for the EIS”[29] and he would, accordingly, have sustained the district court’s approach.

Conclusion

Having reiterated its four-part standard for injunctive relief in both 2006 and again in 2008, the Supreme Court has once again emphasized that those same principles apply across the board, and that NEPA cases do not present an exception to their application.

For more information, contact any member of our Litigation or Permitting and Environmental Review practice groups.

[1] Justice Stevens authored the lone dissent.  Justice Breyer did not participate because his brother, Northern District of California Judge Charles J. Breyer, authored the district court opinion in the case.

[2] No. 09-475, __ S.Ct. ___, 2010 WL 2451057 (June 21, 2010).  All citations in this article are to the version of the opinion appearing on Westlaw.

[3] 555 U.S. ___, 129 S.Ct. 365, 380-82 (2008).

[4] 547 U.S. 388, 391 (2006).

[5] Monsanto, 2010 WL 2471057, * 11.

[6] See Geertson Seed Farms v. Monsanto Co., 570 F.3d 1130 (9th Cir. 2009).  The Ninth Circuit issued its first decision in Geertson in September 2008 before the Supreme Court decided Winter, then withdrew that opinion and re-issued the opinion in 2009.  Citations are to the later (2009) version of the opinion.

[7] 129 S.Ct. 365 (2008).

[8] Winter, 129 S.Ct. at 380-82.

[9] Geertson Farms Inc. v. Johanns, No. 06-01075, 2007 WL 776146, (N.D. Cal. Mar 12, 2007), reconsideration denied, 2007 WL 1302981 (N.D. Cal. May 03, 2007), order and scope of injunctive relief modified (upon Rule 59(e) motion by defendants and defendant-intervenors), 2007 WL 1839894 (N.D. Cal. 2007).

[10] Geertson Seed, 570 F.3d at 1136 (citing eBay v. MercExchange, L.L.C., 547 U.S. 388 (2006)).

[11] Id. (quoting N. Cheyenne Tribe v. Norton, 503 F.3d 836, 843 (9th Cir. 2007); eBay, 547 U.S. at 391).

[12] The lower court found the following: (1) with respect to harm, genetic contamination of organic and conventional alfalfa had already occurred; (2) the harm was sufficient to merit “broad injunctive relief”; (3) the harm to growers of non-genetically engineered alfalfa (and consumers) outweighed the financial hardships to Monsanto, Forage Genetics and growers; and (4) it would be in the public interest to enjoin use of RRA before the USDA studies its impact, as failing to do so could make non-genetically engineered alfalfa unavailable in the marketplace. Id.

[13] Id. at 1139.

[14] Id.

[15] See Monsanto, 2010 WL 2471057, * 7.

[16] Geertson Seed, 570 F.3d at 1141-42 (Smith, J., dissenting).

[17] Monsanto, 2010 WL 2471057, * 11.

[18] Id. (citing Winter, 129 S.Ct. at 380-82).

[19] Monsanto, 2010 WL 2471057, * 11 (quoting Monsanto’s cert. petition, which in turn quoted the District Court’s permanent injunction).

[20] Id. (quoting Nat’l Parks & Conservation Ass’n v. Babbit, 241 F.3d 722, 737 n 18 (9th Cir. 2001)).

[21] Id. at * 12.

[22] Id. (italics in original opinion).

[23] Id. at * 16 (italics in original opinion).

[24] Id. at * 8.

[25] Id. at * 10 (quoting the appendix to the Petition for Cert., which in turn, quoted the District Court’s order).

[26] Id.

[27] Id. at * 21 (Stevens, J., dissenting) (citing General Elec. Co. v. Joiner, 422 U.S. 405, 416 (1975)).

[28] Id. at * 22, * 24

[29] Id. at * 24.

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