Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-35835/USCOURTS-ca9-13-35835-0/pdf.json

Parties Involved:
Alaska Wilderness League
Appellant
Center for Biological Diversity, Inc
Appellant
Greenpeace, Inc.
Appellant
National Audubon Society, Inc.
Appellant
Natural Resources Defense Council, Inc.
Appellant
Northern Alaska Environmental Center
Appellant
Ocean Conservancy, Inc.
Appellant
Oceana, Inc.
Appellant
Pacific Environment and Resources Center
Appellant
Redoil, Inc.
Appellant
Shell Gulf of Mexico Inc.
Appellee
Shell Offshore Inc.
Appellee
Sierra Club
Appellant
The Wilderness Society
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SHELL GULF OF MEXICO INC.; SHELL

OFFSHORE INC.,

Plaintiffs-Appellees,

v.

CENTER FOR BIOLOGICAL

DIVERSITY, INC; REDOIL, INC.;

ALASKA WILDERNESS LEAGUE;

NATURAL RESOURCES DEFENSE

COUNCIL, INC.; NORTHERN ALASKA

ENVIRONMENTAL CENTER; PACIFIC

ENVIRONMENT AND RESOURCES

CENTER; THE WILDERNESS SOCIETY;

OCEAN CONSERVANCY, INC.;

OCEANA, INC.; GREENPEACE, INC.;

SIERRA CLUB; NATIONAL AUDUBON

SOCIETY, INC.,

Defendants-Appellants.

No. 13-35835

D.C. No. 

3:12-CV-00048-

RRB

OPINION

Appeal from the United States District Court

for the District of Alaska

Ralph R. Beistline, Chief District Judge, Presiding

Argued and Submitted 

August 13, 2014—Anchorage, Alaska

Filed November 12, 2014

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2 SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV.

Before: Jerome Farris, Dorothy W. Nelson, and

Jacqueline H. Nguyen, Circuit Judges.

Opinion by Judge D.W. Nelson

SUMMARY*

Case or Controversy

The panel reversed the district court’s order denying

environmental groups’ motion to dismiss, due to lack of a

case or controversy under Article III of the U.S. Constitution,

a Declaratory Judgment Act lawsuit filed by Shell Gulf of

Mexico, Inc., seeking a declaration that the federal Bureau of

Safety and Environmental Enforcement’s approval of two oil

spill response plans, required by the Oil Pollution Act, for

Alaska’s Beaufort and Chukchi Seas did not violate the

Administrative Procedure Act.

The panel held that Shell’s lawsuit ran afoul of Article

III’s case or controversy requirement because Shell did not

have legal interests adverse to the Bureau under the

Administrative Procedure Act. The panel held that Shell may

not file suit solely to determine who would prevail in a

hypothetical suit between the environmental groups and the

Bureau.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV. 3

COUNSEL

Michael E. Wall (argued) and Jennifer A. Sorenson, Natural

Resources Defense Council, San Francisco, California;

Steven A. Hirsch, Rachael E. Meny, and Justina Sessions,

Keker & Van Nest LLP, San Francisco, California; George E.

Hays, Law Office of George E. Hays, San Francisco,

California, for Defendants-Appellants.

Kyle W. Parker, Crowell & Moring LLP, Anchorage, Alaska;

Kathleen M. Sullivan (argued), William B. Adams, andDavid

S. Mader, Quinn Emanuel Urquhart & Sullivan LLP, New

York, New York, for Plaintiffs-Appellees. 

OPINION

D.W. NELSON, Senior Circuit Judge:

The Beaufort and Chukchi Seas lie on Alaska’s Arctic

coast. This area contains a bountiful ecosystem that supports

a wide array of life, but it is also rich in natural resources,

specifically, oil and gas. Shell Gulf of Mexico, Inc. and Shell

Offshore, Inc. (collectivelyShell) have invested heavilyin the

exploration and development of oil and gas resources in the

Beaufort and Chukchi Seas.

To carry out its operations, Shell sought and obtained

approval from the Bureau of Safety and Environmental

Enforcement (the Bureau) of two oil spill response plans

required by the Oil Pollution Act. Shortly after obtaining

approval, Shell filed a lawsuit under the Declaratory

Judgment Act against several environmental organizations,

seeking a declaration that the Bureau’s approval did not

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4 SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV.

violate the Administrative Procedures Act (APA). Shell

claimed that it needed a swift determination of the legality of

the approval so it could conduct exploratory drilling without

worrying that the environmental groups would seek to

overturn the Bureau’s approval of the spill response plans.

Shell’s lawsuit represents a novel litigation strategy,

whereby the beneficiary of agency action seeks to confirm its

lawfulness by suing those who it believes are likely to

challenge it. We must decide whether this strategy runs afoul

of Article III’s case or controversy requirement. We hold that

it does. Shell does not have legal interests adverse to the

Bureau under the APA, and it may not file suit solely to

determine who would prevail in a hypothetical suit between

the environmental groups and the Bureau. Consequently, we

lack jurisdiction.

I. Background

Many environmental organizations and citizen activists,

including the defendants in this case, vehemently oppose

Shell’s Arctic oil and gas exploration activities. In addition

to making public statements condemning Shell’s plans,

several organizations have filed lawsuits challenging

regulatory approval of Shell’s activities. Some of these

organizations have proclaimed litigation to be a particularly

effective tool for achieving their goal of stopping oil and gas

exploration in the Arctic, and have stated their intentions to

continue resisting Shell’s plans in court.

A recent Arctic drilling dispute concerns Shell’s

compliance with the Oil Pollution Act, 33 U.S.C. § 1321(j). 

Under the Oil Pollution Act, Shell must file an oil spill

response plan with the Bureau and obtain the Bureau’s

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SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV. 5

approval for that plan prior to handling, storing, or

transporting oil. See id. § 1321(j)(5)(F). Shell filed oil spill

response plans with the Bureau for its operations in the

Beaufort and Chukchi Seas, which the Bureau approved.

Weeks after obtaining the Bureau’s approval, Shell filed

a lawsuit against the environmental groups seeking a

declaration that the Bureau’s approval did not violate the

APA. In its complaint, Shell alleged that the environmental

groups were engaged in an ongoing campaign to prevent

Shell from drilling for oil in the Arctic, and that some of the

environmental groups had threatened to bring litigation

challenging the Bureau’s approval of the oil spill response

plans. Shell alleged that the environmental groups’ history of

opposing Shell’s activities through litigation, coupled with

their public criticism, made it virtually certain that they

would file litigation challenging the Bureau’s approval. Shell

asserted that it needed to accelerate resolution of the allegedly

inevitable challenge to the Bureau’s action in order to protect

its investments and conduct exploratory drilling without the

threat of judicial intervention.

The environmental groups moved to dismiss Shell’s

complaint, arguing, inter alia, that Shell’s lawsuit did not

satisfy Article III’s case or controversy requirement. The

district court denied the motion to dismiss. Eventually, some,

but not all, of the environmental groups filed a lawsuit

challenging the Bureau’s approval of Shell’s oil spill response

plans. See Alaska Wilderness League v. Jewell, No. 13-

35866 (9th Cir. filed Sept. 17, 2013).1 This case was

consolidated with the case against the Bureau, and the district

1 Defendants Northern Alaska Environmental Center and The

Wilderness Society are not parties to the lawsuit against the Bureau.

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court entered summary judgment against the environmental

groups. The environmental groups now appeal the district

court’s denial of their motion to dismiss.

II. Legal Standard

We review the existence of subject matter jurisdiction

de novo. United States v. Peninsula Commc’ns, Inc.,

287 F.3d 832, 836 (9th Cir. 2002).

III. Discussion

The Declaratory Judgment Act provides that “any court

of the United States . . . may declare the rights and other legal

relations of any interested party seeking such declaration.” 

28 U.S.C. § 2201(a). This statute does not create new

substantive rights, but merely expands the remedies available

in federal courts. Countrywide Home Loans, Inc. v.

Mortgage Guar. Ins. Corp., 642 F.3d 849, 853 (9th Cir.

2011). Congress created this remedy, in part, to allow

potential defendants to file preemptive litigation to determine

whether they have any legal obligations to their potential

adversaries. Seattle Audubon Soc. v. Mosely, 80 F.3d 1401,

1405 (9th Cir. 1996). Filing a preemptive declaratory

judgment action benefits potential defendants by relieving

them “from the Damoclean threat of impending litigation

which a harassing adversary might brandish[.]” Hal Roach

Studios, Inc. v. Richard Feiner and Co., Inc., 896 F.2d 1542,

1555 (9th Cir. 1990) (quoting Societe de Conditionnement v.

Hunter Eng’g Co., 655 F.2d 938, 943 (9th Cir.1981)).

While the Declaratory Judgment Act therefore created a

new procedural mechanism for removing the threat of

impending litigation, it did not expand the jurisdiction of

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SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV. 7

federal courts. Skelly Oil Co. v. Phillips Petroleum Co.,

339 U.S. 667, 671 (1950). In particular, a federal court may

only grant a declaratoryjudgment in “controversies which are

such in the constitutional sense.” Aetna Life Ins. Co. of

Hartford, Conn. v. Haworth, 300 U.S. 227, 240 (1937). To

determine whether a declaratory judgment action presents a

justiciable case or controversy, courts consider “whether the

facts alleged, under all the circumstances, show that there is

a substantial controversy, between parties having adverse

legal interests, of sufficient immediacy and reality to warrant

the issuance of a declaratory judgment.” Md. Cas. Co. v.

Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).

Shell contends that this case is justiciable because the

parties have adverse legal interests and have been mired in a

substantial, real, and immediate controversy over the

lawfulness of its Arctic oil and gas explorations. Shell points

out that it brought this lawsuit to solve the precise problem

the Declaratory Judgment Act is meant to address. Shell

asserts that it needs a quick resolution of any challenge to the

Bureau’s approval before continuing its exploratory drilling,

and that in the absence of a preemptive lawsuit, it fears the

environmental groups would wait until the eve of the drilling

season to file litigation at the most inconvenient moment. 

Shell further claims that adverse legal interests are present in

this case because Shell and the environmental groups have

opposing legal positions regarding the lawfulness of the

Bureau’s approval of Shell’s oil spill response plans, and

because Shell would suffer economic harm if the

environmental groups’ view prevailed in court.

We need not address whether there is a substantial

controversy present in this case, because we hold that Shell

and the environmental groups do not have “adverse legal

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8 SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV.

interests.” Md. Cas. Co., 312 U.S. at 273. To determine

whether the parties to a declaratory judgment action have

adverse legal interests, we first identify the law underlying

the request for a declaratory judgment. Mylan Pharm., Inc.

v. Thompson, 268 F.3d 1323, 1330 (Fed. Cir. 2001); Collin

Cnty., Tex. v. Homeowners Ass’n for Values Essential to

Neighborhoods, (HAVEN), 915 F.2d 167, 171 (5th Cir. 1990)

(“A party’s legal interest must relate to an actual ‘claim

arising under federal law that another asserts against him[.]’”

(quoting Lowe v. Ingalls Shipbuilding, A Div. of Litton Sys.,

Inc., 723 F.2d 1173, 1179 (5th Cir.1984))). It is necessary to

first examine the underlying law because the Declaratory

Judgment Act only creates new remedies, and therefore, the

adverse legal interests required by Article III must be created

by the authority governing the asserted controversy between

the parties. When identifying the adverse legal interests

arising from the law underlying the request for declaratory

relief, courts examine both the persons who can assert rights

under that law and those who have obligations under it. See

Collin Cnty., 915 F.2d at 171 (“Since it is the underlying

cause of action of the defendant against the plaintiff that is

actually litigated in a declaratory judgment action, a party

bringing a declaratory judgment action must have been a

proper party had the defendant brought suit on the underlying

cause of action.”).

The law underlying Shell’s request for a declaratory

judgment is the APA, and we therefore consider the rights

and obligations created by that law. The APA allows a

person “aggrieved” by agency action to seek judicial review. 

5 U.S.C. § 702. Actions under the APA may be brought only

against federal agencies. City of Rohnert Park v. Harris,

601 F.2d 1040, 1048 (9th Cir. 1979). A claim under the APA

cannot be asserted against a private party. W. State Univ. of

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SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV. 9

S. Cal. v. Am. Bar Ass’n, 301 F. Supp. 2d 1129, 1133 (C.D.

Cal. 2004). Thus, with respect to declaratory judgment

claims arising out of the APA, the relevant “adverse legal

interests” are held by a federal agency and a person aggrieved

by that agency’s action.

Turning to the facts before us, it follows that the only

entities with adverse legal interests are the Bureau and the

environmental groups. The environmental groups were

“aggrieved” by the approval of Shell’s oil spill response

plans, and the Bureau is the federal agency responsible for

their approval. Since the APA therefore allows the

environmental groups to file suit against the Bureau, adverse

legal interests exist between those parties. Shell, by contrast,

does not have legal interests under the APA that are adverse

to either the Bureau or the environmental groups. Because its

plans were approved, Shell was not “aggrieved” by the

Bureau’s actions. Moreover, since Shell is not a federal

agency, it cannot possibly have any legal obligations under

the APA to the environmental groups. Put simply, the Bureau

lies at the center of the underlying controversy and is the

locus of the adverse legal interests created by the APA. 

Without its participation, no case or controversy can exist.

Indeed, since it is the Bureau, and not Shell, that can be

sued under the APA, it would be odd to conclude that a case

or controversy exists merely because Shell seeks to know

who would prevail if the environmental groups asserted an

APA claim against the Bureau. Were we to conclude that

jurisdiction exists, our holding would create several unusual

consequences, two of which are particularly noteworthy. 

First, it would allow a district court to declare the Bureau’s

actions unlawful under the APA in a judgment that is not

binding on the Bureau itself. After all, the Bureau need not

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10 SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV.

participate in this lawsuit, and it would therefore not be

bound by any judgment. Taylor v. Sturgell, 553 U.S. 880,

884 (2008). Thus, a district court entertaining Shell’s lawsuit

would be potentially unable to enter a judgment resolving the

very question Shell seeks to litigate. Second, absent agency

intervention, such a lawsuit would allow the lawfulness of

agency action to be adjudicated without hearing the agency’s

own justification for its actions. We conclude, therefore, that

it would be unwise to exercise jurisdiction over a dispute

concerning agency action while potentially omitting the

critically important perspective of the agency itself.

Shell emphasizes the sincerity of its legal disagreement

with the environmental groups and the substantial economic

effects it would suffer from a judgment against the Bureau,

but these alone do not create a justiciable case or controversy. 

It is axiomatic that differing views of the law are not enough

to satisfy Article III. Hollingsworth v. Perry, 133 S. Ct.

2652, 2661 (2013) (“The presence of a disagreement,

however sharp and acrimonious it may be, is insufficient by

itself to meet Art. III’s requirements.” (quoting Diamond v.

Charles, 476 U.S. 54, 62 (1986))). Moreover, Shell’s

economic interest in the outcome of a lawsuit between the

Bureau and the environmental groups is not a legal interest

merely because it relates to a lawsuit. “A party’s legal

interest must relate to an actual claim arising under federal

law that another asserts against him.” Collin Cnty., 915 F.2d

at 171 (internal quotation marks omitted) (emphasis added). 

Lawsuits affect a vast range of persons, and an Article III

case or controversy does not exist wherever an individual

possibly, probably, or even certainly affected by litigation

asks a federal court to resolve a legal question. Thus, it is not

enough for a declaratory judgment plaintiff to assert, as Shell

does here, a practical interest in the outcome of a lawsuit

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SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV. 11

between other parties. Instead, Article III requires the

existence of adverse legal interests arising from a legal claim,

and that is absent from this case.

The Fifth Circuit has also concluded that a practical

interest in the outcome of a lawsuit is not necessarily a legal

interest capable of satisfying the case or controversy

requirement. In Collin County v. HAVEN, HAVEN, a

homeowner’s organization, stated publicly that it intended to

file a lawsuit challenging the Federal Highway

Administration’s approval of an environmental impact

statement (EIS) drafted for a proposed state highway. 

915 F.2d at 172. Fearing delay in the highway’s construction,

Collin County sued HAVEN under the DeclaratoryJudgment

Act, seeking a declaration that the EIS was sufficient as a

matter of law. The Fifth Circuit held that there was no

justiciable controversy because HAVEN “could not have

sued Collin County or any of the other plaintiffs over the

sufficiency of the EIS.” Id. at 171. The Fifth Circuit

acknowledged that the county had strong practical interests in

the completion of the highway, but reasoned Collin County

had no legal interests adverse to HAVEN because it faced “no

actual liability for any deficiency in the EIS.” Id. Like the

plaintiffs in Collin County, Shell merely has a practical

interest in the outcome of a lawsuit between the Bureau and

the environmental groups, and that is not enough to satisfy

the case or controversy requirement.2

2 Shell contends that Collin County is distinguishable because Shell was

able to intervene in the APA action that was eventually brought against

the Bureau, whereas the plaintiffs in Collin County had no right to

intervene. See Collin County, 915 F.2d at 171. In its discussion of

whether one of the plaintiffs could have been added to an affirmative suit

brought by HAVEN, however, the Fifth Circuit made clear that its

decision rested on the premise that the plaintiffs “could not have been

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12 SHELL GULF OF MEX. V. CTR. FOR BIOLOGICAL DIV.

Thus, because no adverse legal interests exist between the

environmental groups and Shell, this case is not justiciable,

and we therefore lack jurisdiction. We reverse and remand

for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

sued directly on account of any alleged deficiency in the final EIS.” Id.

Thus, the holding in Collin County did not rest on the plaintiffs’ inability

to intervene, but on the lack of any claim against them.

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