Court Opinion

ID: 6934712
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:25:04.627147+00
Date Added: 2024-06-11T16:07:22.982767
License: Public Domain

HEANEY, Senior Circuit Judge,
dissenting.
The teapot tempest which Judge Conmy so poetically evoked in his Order below1 appears to have inspired a burst of unwarranted judicial enthusiasm to decide issues not properly before this court.
Accurately viewed, this is a case in which a federal agency applied an insufficiently deferential standard of review to the determination of a state agency. The appropriate remedy is to send the matter back to Office of Surface Mining, Reclamation and Enforcement (OSM) and to require that the agency perform its review under the correct standard. Because I cannot concur in straying beyond those parameters, I respectfully dissent from the court’s decision to grant preliminary injunctive relief.
The court’s opinion is flawed in two respects. First, the majority opinion steps well beyond the bounds of what is required to adjudicate this appeal by reaching to find— on the basis of an inadequately developed record — that no linkage exists between Basin and Coteau. Even if that question were properly before us at this time, I cannot agree with the majority opinion that OSM’s determination of linkage was arbitrary and capricious. Second, no credible showing of irreparable harm has been made. In light of Coteau’s concession that no outstanding violations exist and OSM’s assurance that compliance with its Final Agency Decision (FAD) requires Coteau merely to verify the accuracy of already-extant OSM data to the best of its current knowledge, the record establishes, at most, that Coteau faces an uncertain and contingent possibility of reparable harm at some point in the nebulous future.
I.
It is clear, and the majority correctly concludes, that OSM should have reviewed the *1482linkage determination of the North Dakota Public Service Commission (PSC) only for arbitrary or capricious action or abuse of discretion. See 30 C.F.R. § 842.1l(b)(l)(ii)(B). As administrative law has evolved over recent decades, courts have nevertheless adhered to the principle that the appropriate remedy for agency errors of law is a remand so that the agency can get it right, properly fulfilling its statutory mandate and employing its particular expertise. Under the Administrative Procedures Act (APA), the duty of this court is to “hold unlawful and set aside agency action, findings and conclusions found to be ... not in accordance with law ... [or] without observance of procedure required by law_” 5 U.S.C. § 706(2)(A), (D).
The Supreme Court has elaborated upon the reviewing court’s limited remedial role:
When an administrative agency has made an error of law, the duty of the Court is to “correct the error of law committed by that body, and after doing so to remand the case to the [agency] so as to afford it the opportunity of examining the evidence and finding the facts as required by law.”
N.L.R.B. v. Enterprise Ass’n of Steam, Hot Water, Hydraulic Sprinkler, Pneumatic Tube, Ice Machine & Gen. Pipefitters of New York, Local Union No. 638, 429 U.S. 507, 522 n. 9, 97 S.Ct. 891, 900 n. 9, 51 L.Ed.2d 1 (1977) (quoting I.C.C. v. Clyde S.S. Co., 181 U.S. 29, 32-33, 21 S.Ct. 512, 513-14, 45 L.Ed. 729 (1901)). In other words, where administrative error has been identified, a reviewing court “should ordinarily remand the matter to the agency rather than compensate] for the agency’s oversight by launching a freewheeling judicial inquiry into the merits.” R.I. Higher Educ. Assistance Auth. v. Secretary, U.S. Dep’t of Educ., 929 F.2d 844, 857 (1st Cir.1991). Accord, e.g., Couty v. Dole, 886 F.2d 147, 149 (8th Cir.1989); Pollgreen v. Morris, 770 F.2d 1536, 1544 (11th Cir.1985).
There is little evidence in the record before us to suggest that a remand will prove futile, see Thornburgh v. American College of Obstetricians & Gynecologists, 476 U.S. 747, 756 n. 7, 106 S.Ct. 2169, 2176 n. 7, 90 L.Ed.2d 779 (1986) (remand not required in cases of futility), or that OSM will carry out its properly deferential review other than in good faith and with diligence. “[T]he general rule in administrative law cases is that courts, upon finding that an agency made an error of law, are not to presume that an agency will adhere to its original decision notwithstanding its prior misconception of the legal standards.” Florida Dep’t of Labor & Employment Sec. v. U.S. Dep’t of Labor, 893 F.2d 1319, 1324 (11th Cir.1990).
Thus, given the authorities counselling a remand, I can find scant justification for the majority opinion’s lengthy digression into the merits of the linkage determination. Our role as a reviewing court is to keep OSM within its statutory bounds, not to make decisions committed to the agency by Congress.
The improvidence of reaching the merits in this case is aggravated by the inadequacy of the record before us. The OSM should have the opportunity to review the North Dakota PSC’s determination that no linkage exists in light of the appropriate standard of review. The reasoning behind the resulting agency FAD would then be subject to challenge in the district court on the merits and with the benefit of expert agency analysis rooted in a properly developed record.
While I recognize that the majority opinion’s linkage analysis constitutes dicta,21 set *1483forth, briefly, what I consider to be some of its more serious flaws. The majority opinion holds that (1) OSM’s withdrawal of former director Harry Snyder’s decision was arbitrary, and (2) OSM’s finding of linkage was arbitrary. Both of these conclusions seem to me to run counter to the weight of the evidence made available to us.
First, OSM’s decision to withdraw the former director’s determination cannot be considered arbitrary in light of the strong appearance of impropriety it created. Only a day after handing down his decision upholding the linkage finding of the PSC, thereby adopting a position of considerable benefit to Coteau, Snyder recused himself from participation in any matters concerning Coteau’s parent corporation or its affiliates, including Coteau. Alone, that sequence of events warranted legitimate suspicion of Snyder’s motives and justified the withdrawal of his determination. To hold that Snyder’s actions did not justify the reexamination of his assessment is to ignore the critical importance in a democracy of avoiding even the appearance of impropriety in governmental deci-sionmaking. I take strong exception to the majority opinion’s suggestion that only “smoking gun” evidence of impropriety will suffice to justify the withdrawal and reconsideration of a former official’s determination. Moreover, bolstering his contention that he sought not to grind a political axe but to get to the bottom of the matter, Snyder’s successor requested and received additional information and analysis from Coteau, Basin, and OSM staff before weighing the evidence and issuing the agency’s FAD. The process by which OSM’s FAD was arrived at may have been somewhat messy, but it was not arbitrary and capricious.
Second, the incomplete record before us contains considerable support for the proposition that Coteau and Basin are linked by a relationship of ownership or control within the meaning of 30 C.F.R. § 778.13(c). As then-Judge Sealia set forth in Ass’n of Data Processing Serv. Orgs. v. Board of Governors of the Fed. Reserve Sys., 745 F.2d 677, 683 (D.C.Cir.1984), agency action will not be set aside as arbitrary unless it is unsupported by “substantial evidence.” Evidence is substantial under the APA if it is “enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion to be drawn ... is one of fact.” Id. at 684 (quoting Illinois Cent. R.R. v. Norfolk & Western Ry., 385 U.S. 57, 66, 87 S.Ct. 255, 260, 17 L.Ed.2d 162 (1966)). Under that standard, the pages of facts and arguments set forth in OSM’s FAD are sufficient to withstand arbitrary and capricious review at this stage. Both sides concede that as a matter of law Coteau is presumed to be “owned or controlled” by Basin on the basis of their contractual relationship. The question, then, is whether Co-teau has adequately rebutted that presumption. The PSC certainly felt that the presumption had been rebutted, but OSM concluded otherwise, finding that Basin retained the ability to exercise control over Coteau’s operations. FAD at 9. Ultimately, this is a fact-intensive determination that must be reviewed by OSM under the arbitrary and capricious standard.
II.
Even if this court were justified in usurping the role of OSM in making the “linkage” determination, no preliminary relief should be granted because Coteau has failed to establish that it will suffer irreparable harm while this case is pending. Such a showing is required by the first prong of the Dataphase test. See Dataphase Sys., Inc. v. CL Sys., Inc., 640 F.2d 109, 113 (8th Cir.1981).
The majority opinion rests its finding of irreparable harm on a series of, at best, contingent possibilities. The majority opinion’s language is telling: “[I]f Basin or its linkages commit a violation and refuse to remedy it, Coteau could lose its permits indefinitely.” Supra at 1480 (emphasis added). The court goes on to speculate that a loss of permits would cause Coteau to breach contracts, and that such breaches would then be irreparable.
The majority opinion ignores the fact that a number of obstacles stand between Coteau and the denial or suspension of its mining permits. First, OSM reports that currently *1484neither Basin nor any of its owners or controllers have unabated violations requiring permit denial or suspension. Interior Br. at 37. Basin has ceased mining operations entirely. Any violations committed by Basin’s owners and controllers will not limit Coteau’s ability to renew its existing permits, because the regulations provide that permittees are entitled to renewal unless there exists a violation at the permit site in question. 30 C.F.R. §§ 774.15(a), (c). Thus, Coteau’s ability to meet its existing contractual obligations is not likely to be endangered by the actions of third parties. Second, OSM’s regulations provide for elaborate due process procedures prior to any deprivation of permits, including notification letters and opportunities for notified parties to rebut the claim.
In the meantime, the actual burden imposed on Coteau by the FAD is negligible due to OSM’s willingness to allow Coteau to meet its reporting obligation by certifying that the linkage data on OSM’s AVS computer system regarding Coteau and Basin is accurate to the best of Coteau’s knowledge. Gov’t Br. at 38. Such a burden falls far short of irreparable harm.
As this court indicated in Columbia Transit Corp. v. Jones, 572 F.2d 168, 173-74 (8th Cir.1978), merely hypothetical threats of future harm are insufficiently immediate to justify the granting of preliminary relief. Should a sufficient number of the feared contingencies take place so as to place Co-teau in immediate danger of losing permits, Coteau will have an unimpeded opportunity to seek and obtain a preliminary injunction against OSM. At this time, however, the threat of irreparable harm is simply too distant and speculative to warrant preliminary relief.
III.
In sum, I would refrain from addressing the merits of the linkage dispute and would affirm the district court’s denial of Coteau’s motion for preliminary relief. Accordingly, I respectfully dissent.

. The Order begins with this image: "The tempest is raging. Waves tower, winds shriek, spume blows and the tea bag cowers in the dark confines of the pot.” Coteau Properties Co. v. U.S. Dep't of Interior, No. A1-93-112, Order at 1 (D.N.D. Nov. 23, 1993).

. The "substantial likelihood of success on the merits” prong of the Dataphase test constitutes mere predictive forecasting entitled to no real weight when the merits of the dispute ultimately reach the trial court. The law of the Eighth Circuit on this point could not be clearer:
A preliminary injunction is not a decision upon the merits of the underlying case. As we stated in Benson Hotel Corp. v. Woods, 168 F.2d 694, 697 (8th Cir.1948):
It must be borne in mind that the parties did not submit the case to the trial court on its merits. * * * The decision of the trial court on granting the motion for preliminary injunction will not estop either of the parties on the trial of the case on its merits, nor would any determination of those questions by this court on appeal be binding on the trial court nor upon either of the parties in considering and determining the merits of the controversy.
Campbell “66” Exp., Inc. v. Rundel, 597 F.2d 125, 130 (8th Cir.1979). Thus, even after today’s decision on preliminary injunctive relief, it is well within the discretion of the district court to remand the linkage question back to OSM for a *1483proper determination under the arbitrary and capricious standard of review.