May 2010 Update: Environmental Lender Liability
Inadequate Superfund Monies May Result in New Trust Fund Taxes

Court Grants Preliminary Injunction Blocking Deepwater Oil Drilling Moratorium

Torrence_Allison_COLORBy Allison Torrence

 

On June 22, 2010, Judge Martin Feldman, of the U.S. District Court for the Eastern District of Louisiana, issued a preliminary injunction blocking the Obama Administration’s moratorium on deepwater oil drilling. The lawsuit, Hornbeck Offshore Services, LLC, et al. v. Salazar, et al., Case No. 10-1663, was originally brought by a company that owns a fleet of vessels that support deepwater oil exploration in the Gulf of Mexico. Additional vessel owners and companies that otherwise support offshore exploration and drilling joined the case as plaintiffs soon after it was filed. After the plaintiffs’ filed a motion for preliminary injunction, several environmental organizations, including the Sierra Club, intervened as defendants supporting the government’s position.

The legal issues in this case are governed by the Outer Continental Shelf Lands Act ("OCSLA"). The federal regulations implementing the OCSLA allow for a suspension of drilling activities "[w]hen activities pose a threat of serious, irreparable, or immediate harm or damage. This would include a threat to life (including fish and other aquatic life), property, any mineral deposit, or the marine, coastal or human environment" or "when necessary for the installation of safety or environmental protection equipment." 30 C.F.R. § 250.172(b).

 

Judge Feldman ruled that the government’s justification for suspending all deepwater drilling in the Gulf of Mexico for six months was arbitrary and capricious because the government did not show how the evidence supported its decision. Judge Feldman criticized the government’s moratorium as "blanket, generic, [and] indeed punitive." The Judge’s order prohibits the government from enforcing its deepwater drilling moratorium until a full trial can be had on the merits of this case. The Obama administration has indicated it will immediately appeal the preliminary injunction to the Fifth Circuit Court of Appeals. Secretary of the Interior, Ken Salazar, has also stated that he will issue a new order imposing a moratorium on deepwater oil drilling that would contain additional justification for the moratorium.

 

The district court’s opinion is available at the Eastern District of Louisiana website. Click here for opinion.