1. Why is the problem with the experts’ objections important in determining whether DOI’s moratorium was arbitrary and capricious?

2. What is the significance of the difference between the factual information in the report and the terms of the moratorium?

3. What does the court see as alternatives to the moratorium?

Hornbeck and others (plaintiffs) provide services to support offshore oil and gas drilling, exploration, and production activities in the Gulf of Mexico. Kenneth Salazar is the Secretary of the Department of Interior (DOI), a federal agency that includes the Minerals Management.

Following the BP Deepwater Horizon drilling platform explosion on April 20, 2010, and the resulting devastation and unprecedented disaster, President Obama asked DOI to conduct a study to determine what steps were needed to be taken to prevent another problem with oil rigs in the Gulf. DOI did a 30-day study, consulting respected experts from state and federal governments, academic institutions, and industry and advocacy organizations. On May 27, 2010, DOI issued a Report that recommended a six-month moratorium on permits for new wells and an immediate halt to drilling operations on the 33 permitted wells in the Gulf of Mexico. The DOI report also stated that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” The experts pointedly observed that this statement was misleading and called it a “misrepresentation.”

Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy of Engineering experts and three of the other experts publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review and was never agreed to by them. The plaintiffs moved for a preliminary injunction against the moratorium.

JUDICIAL OPINION

FELDMAN, District Judge … The Administrative Procedure

Act authorizes judicial review of final agency action. The APA cautions that an agency action may only be set aside if it is “arbitrary, capricious, an abuse of discretion, or not otherwise in accordance with law.”

The reviewing court must decide whether the agency acted within the scope of its authority, “whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.”

The Supreme Court has explained that: Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

After reviewing the Secretary’s Report and the Moratorium Memorandum, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium. The Report describes the offshore oil industry in the Gulf and offers many compelling recommendations to improve safety. But it offers no time line for implementation. The Report patently lacks any analysis of the asserted fear of threat of irreparable injury or safety hazards posed by the 33 permitted rigs also reached by the moratorium. It is incident-specific and driven: Deepwater Horizon and BP only. None others. While the Report notes the increase in deepwater drilling over the past ten years and the increased safety risk associated with deepwater drilling, the parameters of “deepwater” remain confused.

And drilling elsewhere simply seems driven by political or social agendas on all sides. The Report seems to define “deepwater” as drilling beyond a depth of 1,000 feet by referencing the increased difficulty of drilling beyond this depth; similarly, the shallowest depth referenced in the maps and facts included in the Report is “less than 1,000 feet.” But while there is no mention of the 500 feet depth anywhere in the Report itself, “deepwater” [is now anything] more than 500 feet.