D.D.C. denies preliminary injunction in tax credit case, but 9th Circuit raises serious questions
In a recent U.S. Supreme Court decision, the court discussed the test for issuance of a preliminary injunction in cases involving environmental harms, and adhered to the traditional test. "This court may issue interim injunctive relief only when the movant demonstrates “ that he is likely to succeed on the merits,  that he is likely to suffer irreparable harm in the absence of preliminary relief,  that the balance of equities tips in his favor, and  that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 129 S.Ct. 365, 374 (2008) citing Munaf v. Geren, 128 S.Ct. 2207, 2218-19 (2008). Despite its relative clarity, the appellate courts still wrestle with the application of this test. The two cases below, decided within two days of each other, remind us why scholars believe the Supreme Court may soon be revisiting the issue...
Appalachian Voices v, Chu, Civil Action No. 08-0380 (RMU), --- F.Supp.2d ----, 2010 WL 2902767 (D.D.C., July 26, 2010).
BACKGROUND: the plaintiffs, nonprofit organizations devoted to the environmental preservation of the Appalachian Mountains region, brought suit against the defendants, the Department of Treasury and the Department of Energy, alleging that the defendants erroneously failed to consider the environmental consequences of a program that provides tax credits to companies that use “clean coal” technology. The plaintiffs have now moved for a preliminary injunction to “immediately suspend allocation of the ... tax credit” ... The plaintiffs claim that the defendants violated the National Environmental Policy Act (“NEPA”), 42 U.S.C. §§ 4321 et seq., the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et seq ., and the Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531 et seq., by failing to evaluate the environmental impacts of the tax credit program and by failing to consult with the U.S. Fish and Wildlife Service and the U.S. National Marine Fisheries Service before allocating the tax credits.
EXCERPT: the court need only address the irreparable injury prong of the injunctive relief standard to rule on the plaintiffs' motion. As the plaintiffs themselves point out, an injunction suspending the allocation of the tax credit “will not prevent Duke Energy from moving forward with the Cliffside project.” Pls.' Mot. at 25. Indeed, the plaintiffs do not assert that the allocation of the tax credit will directly cause them irreparable harm.; rather, they predict that they will be harmed when the Cliffside plant becomes operational, which they concede is not expected to occur until the summer of 2012, see Pls.' Reply at 3. Because the plaintiffs' asserted injury is not imminent, and because the court will be able to render a decision on the merits of the plaintiffs' claims before the anticipated injury becomes imminent, the plaintiffs are not entitled to injunctive relief. Wis. Gas Co. v. Fed. Energy Regulatory Comm'n, 758 F.2d 669, 674 (D.C.Cir.1985)(holding that “the party seeking injunctive relief must show that the injury complained of is of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm”)
KEITHINKING: Based on a 9th Circuit case issued only two days later, the ruling in Appalachian Voices looks like an anomalous byproduct of the unique facts, because the planned operation of the power plant in summer 2012, not the IRS tax credit, injured the plaintiffs. In contrast, in the more traditional cases involving direct impacts to the habitat on which listed species depend, an injunction remains easier to obtain. As suggested in Alliance for the Wild Rockies v. Cottrell, in timber harvest cases, a plaintiff quickly proves irreparable injury simply by showing impacts to multiple acres. (In Endangered Species Act cases, plaintiffs could make similar arguments simply by counting the multiple acres of affected species habitat.) Then, with the irreparable harm proven, once the "sliding scale" analysis is applied, the likelihood of success on the merits threshold becomes fairly low.
Alliance for the Wild Rockies v. Cottrell, No. 09-35756, 9:09-cv-00107-DWM (9th Cir. July 28, 2010)
SUMMARY: Alliance for the Wild Rockies (“AWR”) appeals the district court’s denial of its motion for a preliminary injunction. AWR seeks to enjoin a timber salvage sale proposed by the United States Forest Service. Citing Winter v. Natural Resources Defense Council, 129 S. Ct. 365 (2008), the district court held that AWR had not shown the requisite likelihood of irreparable injury and success on the merits. After hearing oral argument, we issued an order reversing the district court and directing it to issue the preliminary injunction. Alliance for Wild Rockies v. Cottrell, No. 09-35756, 2010 WL 2640287 (9th Cir. June 24, 2010). In this opinion, we now set forth the reasons for our reversal, and we take this opportunity to clarify an aspect of the post-Winter standard for a preliminary injunction.
FACTS: In August and September of 2007, the Rat Creek Wildfire burned about 27,000 acres in the Beaverhead-Deerlodge National Forest in Montana. On July 1, 2009, almost two years later, the Chief Forester of the Forest Service made an Emergency Situation Determination for the Rat Creek Salvage Project (“the Project”)... The Project permits salvage logging of trees on approximately 1,652 of the 27,000 acres that were burned. The logging will take place (and to some degree has already taken place) on thirty-five units of land ranging from 3 to 320 acres in size...
EXCERPT RE: LIKELIHOOD OF SUCCESS ON THE MERITS: In Winter, the Supreme Court disagreed with one aspect of this circuit’s approach to preliminary injunctions. We had held that the “possibility” of irreparable harm was sufficient, in some circumstances, to justify a preliminary injunction. Winter explicitly rejected that approach. Winter, 129 S. Ct. at 375-76. Under Winter, plaintiffs must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction. Id. ... The majority opinion in Winter did not, however, explicitly discuss the continuing validity of the “sliding scale” approach to preliminary injunctions employed by this circuit and others. Under this approach, the elements of the preliminary injunction test are balanced, so that a stronger showing of one element may offset a weaker showing of another. See, e.g., Clear Channel Outdoor, Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir. 2003). This circuit has adopted and applied a version of the sliding scale approach under which a preliminary injunction could issue where the likelihood of success is such that “serious questions going to the merits were raised and the balance of hardships tips sharply in plaintiff’s favor.” Id. That test was described in this circuit as one alternative on a continuum. See, e.g., Lands Council v. McNair, 537 F.3d 981, 987 (9th Cir. 2008) (en banc). Three other circuits have directly confronted the question whether some version of a sliding scale test has survived Winter. They have split. The Fourth Circuit has held that the sliding scale approach is now invalid. Real Truth About Obama, Inc. v. Fed. Election Comm’n, 575 F.3d 342, 347 (4th Cir. 2009) (holding that the circuit’s prior test, which permitted “flexible interplay” among the elements, “may no longer be applied” after Winter), vacated on other grounds, 130 S. Ct. 2371 (2010). The Seventh and Second Circuits have held to the contrary.
EXCERPT RE: APPLICATION OF THE "SERIOUS QUESTIONS" TEST: In granting the ESD for this Project, the Chief Forester considered three factors: (1) the loss of receipts to the government due to delayed commencement of the Project; (2) the potential loss of an “opportunity to accomplish Douglasfir planting and dwarf mistletoe control objectives”; and (3) the “importance this project has to the local economy of southwest Montana.” We hold that, at a minimum, there are “serious questions” on the merits whether these three factors are sufficient to justify the ESD. We consider in turn the three factors upon which the Chief Forester relied...
KEITHINKING: So much for my predicted 9th Circuit shift to judicial restraint. See prior ESA blawg on Lands Council. Taking a cynical realist view, perhaps the outcome is a result of the different judges? (Not one of the Lands Council judges sat on the Alliance for Wild Rockies panel.) Or then again, perhaps this is just another case of bad facts make bad law? I find it remarkable that the 9th Circuit didn't take on the facts of the case, reaching a conclusion that, indeed, plaintiffs were likely to succeed on the merits, because the plaintiffs were likely to prevail on their argument that the economic impacts at stake did not justify an emergency authorization of timber salvage sales, two years after the fire. Instead of embracing this fact-specific approach, the 9th Circuit reaffirmed its less-rigid "serious questions" approach to its analysis of preliminary injunctions. Compare this approach with the D.C. Circuit, which emphasizes the "likelihood of success on the merits" prong. As the Court explained in Appalachian Voices, "absent a substantial indication of likely success on the merits, 'there would be no justification for the court's intrusion into the ordinary processes of administration and judicial review.' " quoting Am. Bankers Ass'n v. Nat'l Credit Union Admin., 38 F.Supp.2d 114, 140 (D.D.C.1999). Or, alternatively, consider the 10th Circuit, which, as explained in the Alliance for Wild Rockies opinion, has carefully avoided the issue:
The Tenth Circuit has a “modified test,” similar to the “serious questions” test, under which “a movant need only show ‘questions going to the merits so serious, substantial, difficult and doubtful, as to make the issues ripe for litigation and deserving of more deliberate investigation.’ ” RoDa Drilling Co. v. Siegal, 552 F.3d 1203, 1208-09 n.3 (10th Cir. 2009) (quoting Walmer v. U.S. Dep’t of Def., 52 F.3d 851, 854 (10th Cir. 1995)). Since Winter, the Tenth Circuit has mentioned its “modified test” but indicated that it was not applicable to the case before the court. Id.
BOTTOM LINE: Is it Groundhog day? In Winter, the 9th Circuit reasoning was rejected by the Supreme Court because it had modified the traditional irreparable harm standard for an injunction to require only a mere "possibility" of irreparable harm. Here, the 9th Circuit again emphasized its alternative views of a traditional test. -- the "likelihood of success on the merits" analysis -- and replaced it with a lesser "serious questions on the merits" analysis. Deja vu anyone?