Court Opinion

ID: 8996864
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:46:18.281072+00
Date Added: 2024-06-11T17:11:05.481021
License: Public Domain

McMILLIAN, Circuit Judge,
concurring in part and dissenting in part.
I concur with the majority opinion to the extent it affirms the denial of damages for appellant mining companies. As to the decision to reverse the permanent injunction, I respectfully dissent. I would affirm the judgment of the district court granting the permanent injunction on grounds that the Secretary’s actions were arbitrary, capricious and not in accordance with law because the Secretary lacks authority to excuse the State of Arkansas from complying with the statutory conversion requirements by characterizing the proposed Phase I test drilling as a “temporary non-conforming use.”
I.
The majority opinion states “[t]he acting regional director did not articulate the basis for his decision that the Phase I testing was permissible as a temporary nonconforming use and, therefore, not a conversion under the L & WCFA.” At 1193 n. 11. Based on this premise, the majority opinion defines the issue as “whether the agency’s determination that Phase I testing would not constitute a conversion was a reasonable construction of the Act.” At 1193. I disagree with the statement that the acting regional director, the Secretary’s delegate, did not articulate the basis for his decision. The acting regional director approved the Phase I test drilling by letter dated July 18, 1989.1 In that letter, he specifically stated two bases for his decision as follows:
Since you have assured us that Phase I testing will have value for your park interpretive program, and [2] because the anticipated impacts of Phase I testing appear to be very short-termed and of limited geographic area, we have approved Phase I testing as a temporary non-conforming use, separate from subsequent testing or mining actions. This approval in no way commits the Federal government to making a similar finding for any testing beyond Phase I. Any future proposal will require rigorous review and analysis. Both of these determinations are contingent upon the accuracy of the estimate of the time needed for Phase I testing included in your proposal (8-9 weeks). A *1196temporary, non-conforming use is approved for 10-12 weeks.
* * * * * *
... [I]f the state can commit to a limited duration of 10-12 weeks, the [National Park] Service will approve implementation of the Phase I Testing Program as a temporary non-conforming use.
As acknowledged by the majority opinion, judicial review of an agency action, pursuant to 5 U.S.C. § 706(2)(A), begins with the analysis set forth in Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971) (Overton Park). In Overton Park, the Supreme Court explained that the reviewing court must first decide whether the agency acted within the scope of its authority. Id. at 415, 91 S.Ct. at 823. If the action is within the agency’s scope of authority, then the reviewing court is to decide whether the specific action was nonetheless arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; at this stage, the reviewing court may not substitute its judgment for that of the agency. Id. at 416, 91 S.Ct. at 823. The final inquiry, if necessary, concerns whether the agency followed the necessary procedural requirements in rendering its decision. Id. at 417, 91 S.Ct. at 824.
The agency action under review in this case is the Secretary’s2 approval of the Phase I test drilling, as set forth in the letter of July 18, 1989, from the acting regional director to the State. For the following reasons, I believe that neither the State’s assurance that the test drilling will have value to the park’s interpretive program, nor the geographic and time limitations of the proposed non-conforming use, is an allowable basis for the Secretary to authorize a non-conforming use of the park such that the State is excused from L & WCFA post-completion compliance responsibilities.
The Secretary determined, and no one can realistically dispute, that the proposed Phase I test drilling is “non-conforming” in nature — in other words, not for public outdoor recreation. The question then becomes whether there is any authority for the Secretary to approve the Phase I test drilling merely because it may have some positive spinoff application for the recreational purposes of the park (i.e., it “will have value for [the] park interpretive program”). Nothing in the language or history of § 6(f)(3) of the L & WCFA (codified at 16 U.S.C. § 460l-8(f)(3)), or the applicable regulations, 36 C.F.R. § 59.1-59.4 (1990), provides such authority. Nor does the L & WCF Grants Manual. To the contrary, the statute clearly states that
[n]o property acquired or developed with assistance under this section shall, without the approval of the Secretary, be converted to other than public outdoor recreation uses. The Secretary shall approve such conversion only if he finds it to be in accord with the then existing comprehensive statewide outdoor recreation plan and only upon such conditions as he deems necessary to assure the substitution of other recreation properties of at least equal fair market value and of reasonably equivalent usefulness and location.
16 U.S.C. § 460l-8(f)(3) (emphasis added). Thus, in my opinion, the Secretary lacks authority to permit the Phase I test drilling on grounds that it would have value for the park interpretive program.
Nor do I believe the Secretary has authority to approve the Phase I test drilling upon a determination that “the anticipated impacts of Phase I testing appear to be very short-termed and of limited geographic area.” First, the fact that the test drilling would cover a limited geographic area is not grounds for exemption from the L & WCFA conversion requirements. The L & WCF Grants Manual, as discussed in the majority opinion (at 1193), specifically recognizes that a conversion generally occurs when “[n]onrecreation uses (public or private) are made of the project area, or a portion thereof.” L & WCF Grants Man*1197ual, Chapter 675.9.3.A(2) (emphasis added). Moreover, the Department of the Interior’s own regulations require compliance with the statutory conversion requirements when a portion of an L & WCF-assisted area is affected; in contemplation of this possibility, the regulations state “[i]n the case of assisted sites which are partially rather than wholly converted, the impact of the converted portion on the remainder shall be considered.” 36 C.F.R. § 59.3(b)(5) (emphasis added). Even more to the point, the agency comment provided upon promulgation of the final rule states “a conversion of use occurs when an assisted site is wholly or in part converted to other than public recreation use.” 51 Fed.Reg. 34180 (Sept. 25, 1986) (emphasis added).
Second, the fact that the test drilling would be temporary is not grounds for exemption from the L & WCFA conversion requirements. The Secretary specifically stated his position that the limited duration of the proposed Phase I test drilling was critical to his approval, despite the absence of anything in the statute, regulations or Grants Manual which suggests that Congress ever intended to carve out an exception for non-conforming uses of limited duration. To the contrary, § 6(f)(3) states unqualifiedly that an L & WCF assisted property shall not be converted to nonconforming use unless the statutory conversion requirements are satisfied. Moreover, the Department of the Interior’s own regulations provide that
[s]ection 6(f)(3) of the L & WCF Act is the cornerstone of Federal compliance efforts to ensure that the Federal investments in L & WCF assistance are being maintained in public outdoor recreation use. This section of the Act assures that once an area has been funded with L & WCF assistance, it is continually maintained in public recreation use unless [the National Park Service] approves substitution property of reasonably equivalent usefulness and location and of at least equal fair market value.
36 C.F.R. § 59.3(a) (emphasis added).
Had Congress intended to exempt temporary non-conforming uses from the usual statutory requirements, the enabling statute would have said so. Were the Secretary nonetheless to interpret the statute so as to allow such temporary non-conforming uses, regulations to that effect should have been promulgated through proper rulemaking procedures. Instead, the applicable regulations, by which the Secretary is bound, speak specifically of assuring that L & WCF-assisted areas be continually maintained in recreational use. Therefore, the Secretary lacks authority to excuse a state from complying with L & WCFA conversion requirements by characterizing a proposed activity as a “temporary non-conforming use.”
Notwithstanding the agency’s own characterization of the Phase I test drilling as a “temporary non-conforming use,” the majority opinion suggests that the proposed test drilling does not constitute a “use” of the park within the meaning of § 6(f)(3) on grounds that “[t]he park’s purpose is by no means turned nonrelational.” At 1193. I find no basis in the statute or regulations for the proposition that a “use” must rise to the level of changing the purpose of the park in order to constitute a conversion.
The majority opinion also states that the Phase I test drilling is permitted because it is a “de minimis” activity. The majority opinion states “[t]he agency clearly has determined that the statute requires more than de minimis and temporary intrusions on small portions of fund-assisted land to constitute a conversion.” At 1193-94 (emphasis added). There is no apparent authority for exempting “de minimis” uses from the statutory conversion requirements. Moreover, the acting regional director’s letter approving the Phase I test drilling says nothing about whether fencing off 5,000 square feet in the public digging area, for three months, to allow a drill rig to bore twenty-five to thirty holes to a maximum depth of 1,000 feet, is a “de minimis” use. Therefore, were I to agree with this approach, I would require at a minimum that any exemption for a so-called “de minimis” use be based upon rules promulgated by the agency setting forth the standards of such an exemption and findings by the agency that those stan*1198dards have been met. In the absence of such rules or agency findings, I believe the district court’s judgment should be affirmed.
II.
I also agree with the district court’s application of Friends of the Shawangunks, Inc. v. Clark, 754 F.2d 446 (2d Cir.1985) (Friends of the Shawangunks), to the case at bar. Sierra Club v. Davies, 743 F.Supp. 1334, 1339-40 (E.D.Ark.1990). As the majority opinion notes, Friends of the Sha-wangunks is the only circuit court decision addressing the definition of “conversion,” as used in § 6(f)(3). Significantly, Friends of the Shawangunks was also the only such case in existence when the Department of the Interior promulgated its regulations under § 6(f)(3) (36 C.F.R. Part 59) and when Congress amended § 6(f)(3), both of which occurred in 1986. Based upon the reasoning and holding of Friends of the Shawangunks, the district court concluded that the Phase I test drilling, in and of itself, would constitute a conversion under § 6(f)(3) of the L & WCFA. 743 F.Supp. at 1339.3
Friends of the Shawangunks stated the obvious — that the L & WCF Act “is after all a ‘conservation’ fund act.” 754 F.2d at 450. As explained by the district court, the Second Circuit noted that “conservation” may include “the protection of a present resource in its natural state.” Sierra Club v. Davies, 743 F.Supp. at 1340 (citing Friends of the Shawangunks, 754 F.2d at 450). The district court reasoned “the ‘natural’ state of the diamond mine, when it received the L & WCF grant, was a public park where members of the public could search for diamonds.” 743 F.Supp. at 1340. Thus, the district court held “Phase I testing is an alteration of that ‘natural’ state calculated to benefit private interests at the expense of park recreational uses and therefore constitutes a conversion under § 6(f)(3).” Id. I agree.
The Secretary also relied on Friends of the Shawangunks in making his initial determination that the Phase I test drilling would constitute a conversion within the meaning of § 6(f)(3). On review, the district court found compelling, as do I, the Secretary’s articulation of that original decision and the reasons behind it. That decision was set forth in a letter, dated May 24, 1989, from the acting regional director to the State. That letter states in pertinent part:
Because this proposal is complex and involves a considerable amount of public controversy, we sent the information you submitted to us to both the Environmental Compliance Division and the Office of the Solicitor. Their input has been incorporated into this determination.
Approval of your request would amount to the granting of permission for a temporary non-recreation use of the site, based upon a finding that such use would not constitute a conversion as defined by Section 6(f)(3) of the Land and Water Conservation Fund (L & WCF) Act.
Throughout the life of the [L & WCF] Program, numerous policy and legal opinions have been written pertaining to Section 6(f)(3), the cornerstone of Federal compliance efforts to ensure that the Federal investments are being maintained in public outdoor recreation use. *1199These interpretations have consistently maintained that once an area has been funded with L & WCF assistance, it is required to remain in public outdoor recreation use in perpetuity or replaced in accordance with the provisions set forth in Section 6(f)(3) of the Act. Furthermore, the United States Court of Appeals for the Second Circuit in Friends of the Shawangunks, Inc. et al. v. Secretary [Clark], U.S. Department of the Interior, et al., 754 F.2d 446 (2d Cir.1985), found that a change in the character of the land or the population having access to it for public recreation purposes constituted a conversion. In that both the testing or any mining of the Crater of Diamonds would result in 1) a diminution of the area that is accessible to the general public for public outdoor recreation, 2) the conversion of a portion of the area from public outdoor recreation use to non-public commercial/industrial use, and 3) a change in the character of the land, it is clear to us that either of these actions constitutes a violation of Section 6(f)(3) as well as the intent and purposes of the Land and Water Conservation Fund Act of 1965, as amended. Therefore, we cannot approve your request.4
This original agency decision was, in my opinion, legally sound. It certainly was not based upon “arbitrary distinctions,” as suggested by the majority opinion. At 1194.5
For the foregoing reasons, I would affirm the judgment of the district court in full.

. This letter is cited in the district court opinion. Sierra Club v. Davies, 743 F.Supp. 1334, 1337 (E.D.Ark.1990).

. Where the acting regional director acts as the Secretary of the Interior under delegated authority, I will sometimes refer to the actions of the acting regional director as those of the Secretary.

. The majority opinion states that the district court’s decision was based upon the premise that Phase I test drilling is "inextricably intertwined” with commercial' mining. At 1189 ("The district court concluded that the initial testing was inextricably intertwined with mining and therefore constituted a nonrecreational use under the Act.”) (emphasis added). To the contrary, the district court specifically stated "[e]ven if this Court should choose to regard Phase I testing as a separate, distinct activity, this Court would nevertheless construe Phase I testing as a conversion of park property to non-recreational use.” Sierra Club v. Davies, 743 F.Supp. at 1339. Moreover, the district court considered the issue of whether or not Phase I testing could be "segmented” from commercial mining in the context of whether the State must prepare an environmental impact statement under the requirements of the National Environmental Policy Act; despite the district court’s stated belief that segmentation was improper in this instance, the district court specifically found it “unnecessary to decide this issue at this time." Id. at 1340.

. This letter is cited in the district court opinion. Sierra Club v. Davies, 743 F.Supp. at 1339-40.

. The agency’s May 1989 decision followed over a year and a half of consideration and study; two months later, the agency reversed itself.