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Federal District Court Upholds Uranium Mining Within a Traditional Cultural Property Without Further NEPA Review and With Abbreviated NHPA Consultation

June 4, 2015
By Joan E. Drake

On April 7, 2015, in Grand Canyon Trust v. Williams,¹ the United States District Court for the District of Arizona granted summary judgment to the U.S. Forest Service (“USFS”) on claims brought by the Grand Canyon Trust (“Trust”) that USFS violated the National Environmental Policy Act (“NEPA”) and the National Historic Preservation Act (“NHPA”) in 2012 when it issued a Valid Existing Rights Determination (“VER”) and approved resumption of operations at a uranium mine that had been in stand-by status since 1992.

This decision will be of interest to the many uranium and other mines in the West that received approvals many years—sometime decades—ago, and are now considering resumption of mining with the rise in commodity prices. Importantly, the court found that continuation of mining under valid existing mineral rights does not trigger NEPA where the prior approved plan of operations provided for stand by operation and continuation of mining, and needs no modification. Further, the court upheld USFS’s abbreviated NHPA consultation process even regarding a newly designated Traditional Cultural Property (“TCP”) that is of great importance to tribes.

Background:

The Canyon Mine, a uranium mine located six miles south of Grand Canyon National Park, received USFS approval of its Plan of Operations (“1986 Plan”) in 1986. The Havasupai Tribe challenged that approval, claiming USFS failed to comply with NEPA. The District Court granted summary judgment to USFS, and the Ninth Circuit affirmed in 1991.² The mine owner, Energy Fuels Nuclear, Inc. (“EFN”), started work on the mine, but when uranium prices fell in 1992, ENF placed the mine on stand-by status and maintained the mine under the 1986 Plan’s interim management provisions.

In 2010, USFS designated nearby Red Butte and the surrounding area, including the location of the Canyon Mine, as a TCP, due to its “ongoing, and historic cultural and religious significance to multiple tribes.” In 2012, the Department of Interior withdrew approximately 633,547 acres of public lands and 360,002 acres of National Forest lands, including the location of the Canyon Mine, for up to 20 years from location and entry under the Mining Law of 1872 (the “Withdrawal”). The environment impact statement (“EIS”) for the Withdrawal identified Canyon Mine and assumed that the mine would continue operations.

In 2011, Energy Fuels Resources (USA), Inc. (“EFR”), Canyon Mine’s successor owner, notified USFS it intended to resume operations under the 1986 Plan. USFS completed a VER Determination to confirm the owner had valid rights to the uranium deposit, and undertook a “Mine Review” to evaluate the sufficiency of the 1986 Plan and original EIS, and to review historical, religious, tribal, and environmental issues. USFS concluded EFR had valid existing rights and that the operations could resume at the Canyon Mine under the 1986 Plan without modification.

The Arizona State Historic Preservation Office, the Advisory Council on Historic Preservation (“ACHP”), and various tribes advised USFS that it should undertake a full consultation under Section 106 of the NHPA. USFS disagreed and instead undertook a reduced consultation process, which involved letters, meetings, site visits, and workshops. A memorandum of agreement was in preparation when the Trust and tribes filed suit in 2013, seeking declaratory and injunctive relief under the Administrative Procedures Act (“APA”), claiming NEPA and NHPA violations, and challenging the adequacy of the VER Determination and the Withdrawal.

The Legal Effect of the Withdrawal and the VER Determination:

The court found that the questions of the legal necessity of the VER Determination and the legal effect of the Withdrawal were threshold considerations. The court first concluded that the VER Determination was a “practical requirement” but not a legal requirement for the Canyon Mine to resume operations. The purpose of the VER Determination was to allow USFS to determine whether the mine owner had valid existing rights and whether USFS should contest the claim.

The court next rejected Plaintiffs’ argument that the Withdrawal required that the VER Determination be completed before the Canyon Mine could resume operations, because, according to the court, the Withdrawal did not extinguish pre-existing mining rights, and the Withdrawal EIS specifically contemplated that four uranium mines, including the Canyon Mine, would continue in operation. The court took particular note of Bureau of Land Management’s (“BLM”) Surface Management Handbook, which provides that approved plans of operation in effect prior to a withdrawal “are not subject to the mandatory valid existing rights determination procedures [and] . . . . can continue as accepted or approved and do not require a validity determination unless or until there is a material change in the activity. . . .”³  The court found that because no new plan was required for Canyon Mine after the Withdrawal, the relevant regulations and guidance documents did not require a VER Determination and mining could resume without one.

No Additional NEPA Compliance Required:

The court rejected Plaintiffs’ argument that USFS violated NEPA by not preparing an EIS in connection with the VER Determination, because USFS prepared a full EIS and took its Major Federal Action on the Plan in 1986. Further, the VER Determination was not required as a matter of law before Canyon Mine could resume operations, and the Mine Review concluded that no modification or amendment of the existing Plan was necessary for mining to resume. Thus, the 1986 Plan approved after a full EIS evaluation continued to govern operations at the Canyon Mine.

The court next held that continued operations under an approved Plan do not trigger NEPA. The court noted that the Ninth Circuit has held that where a proposed federal action would not change the status quo, an EIS is not necessary, and that EIS requirements do not apply to mere continued operation of a facility. Here, the Major Federal Action was the same as approved in 1986—mining under the Plan of Operations. The court relied upon Center for Biological Diversity v. Salazar (“CBD“),⁴ which involved nearly identical facts. In CBD, the same District Court found, and the Ninth Circuit affirmed, that a Supplemental EIS was not required for BLM to approve resumed operations of a uranium mine, located on the north side of the Grand Canyon, that had been in stand-by status for several years because the owner proposed to resume operations under the original Plan of Operations that had been approved in 1988 after completion of a full EIS. The BLM had required the mine owner to update its reclamation bond and obtain a clean air permit before resuming operations. The court found the Major Federal Action occurred in 1988 when BLM approved the mine’s Plan of Operation after a full NEPA review, and that the updating of the bond and the obtaining the air permit were mere ministerial tasks.

The court distinguished this situation from that in Pit River Tribe v. U.S. Forest Service,⁵ because in that case, without the BLM’s extension of the expired leases, the activity (geothermal development) could not proceed. In contrast, Canyon Mine’s approved 1986 Plan had no time limit and the 1986 Plan’s interim management provisions continued to govern while the Mine was on stand-by status. Unlike the expiration of leases in Pit River Tribe, ENF’s rights were never terminated and did not require affirmative renewal.

Abbreviated NHPA Consultation Upheld:

Plaintiffs argued that NHPA Section 106 consultation was required because, according to Plaintiffs, the VER Determination was an “undertaking,” which the NHPA defines as a “project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including . . . those requiring a Federal permit, license or approval.”⁶ The court rejected this argument for two reasons. First, since the VER Determination was not legally required, it could not be considered a Federal permit, license, or approval when mining operations could have resumed without it. Second, because mining operations were to resume under the original Plan; there was no new or modified plan. If mining at the Canyon Mine was an undertaking for purposes of NHPA, that undertaking was approved in 1986.

The court acknowledged one significant change had occurred since the 1986 approval—the designation of Red Butte and the surrounding land, including the location of the Canyon Mine, as a TCP. USFS chose to treat the TCP status as a “new discovery” under the NHPA regulations.⁷ The “new discovery” regulations apply when historic properties or effects on historic properties are discovered after a Section 106 process has been completed. One subsection applies when the Section 106 process is finished but the agency has not approved the undertaking or construction on the approved undertaking has not yet commenced, and requires a full consultation (subparagraph (b)(1)).⁸ A different subsection applies when the Section 106 process is finished, the agency has approved the undertaking, and construction has commenced (subparagraph (b)(3)). In those circum-stances, the regulation provides for a less demanding process and merely requires the agency to notify interested parties, including Indian tribes, within 48 hours of the discovery, who must then respond with recommendations within 48 hours. USFS must then take into consideration the recommendations and “carry out appropriate actions.”⁹

USFS decided that the abbreviated consultation process under subparagraph (b)(3) applied because full Section 106 consultation had been completed and construction had already started on the Canyon Mine many years ago. However, in lieu of requiring responsive recommendations within 48 hours, USFS allowed tribes and other interested parties 30 days to respond. USFS also held various meetings, site visits, and workshops with tribes, and a memorandum of agreement was in preparation when this lawsuit was filed.

Plaintiffs argued that subparagraph (b)(3) applies only in “emergencies,” which this was not, and consequently USFS was required to engage in full Section 106 consultation under subparagraph (b)(1). The court concluded that Plaintiffs’ arguments did not satisfy the “highly deferential” standard of review under the APA.¹⁰ The court characterized the undertaking as “continuation of mining operations” under the 1986 Plan, without modification, and, consequently, there was no new undertaking that required another approval. The court concluded that it need not resort to statutory or regulatory construction or history to determine whether subparagraph (b)(3) applied only to emergencies because the regulation’s language was not ambiguous and, by its plain language, applied where the agency had already approved the undertaking and construction had commenced.

The court also found that USFS had complied with subparagraph (b)(3), even though it did not send notice within 48 hours of being informed of the intent to reopen the mine, because it sent notice letters to tribes and other interested parties the same day it determined that this subparagraph applied to the Canyon Mine situation. The court reasoned that in this unusual situation, it took some time for the agency to determine what kind of review was required.

In a letter to USFS, ACHP interpreted the abbreviated consultation procedures under subparagraph (b)(3) to apply where there was limited time and opportunity for consultation, and instead recommended a full consultation due to concerns regarding “unproductive conflict” between USFS and the tribes. The court noted ACHP’s recommendation appeared to be more tactical advice than an interpretation of the regulation, and more of a comment on the situation than on the meaning of the regulation. Even if ACHP’s letter was the agency’s interpretation of subparagraph (b)(3), the court concluded that it need not defer to ACHP under the U.S. Supreme Court’s decision in Auer v. Robbins,¹¹ because, under Auer, deference to an agency’s interpretation of its regulations is warranted only when the regulation’s language is ambiguous. The court concluded that the language of subparagraph (b)(3) was not ambiguous and clearly applied. The court reasoned that accepting ACHP’s recommendation would essentially allow the agency to create a new category for undertakings approved, started, and then stopped, which would improperly allow the agency “under the guise of interpreting a regulation, to create de facto a new regulation.”¹²

The Havasupai Tribe, and Sierra Club, Center for Biological Diversity and Grand Canyon Trust, have filed appeals of the decision with the Ninth Circuit.

Take-Aways:

Like Canyon Mine, many uranium mines throughout the West have been in stand-by status for years. With the price of uranium rising, mine owners may be considering resumption of operations. This decision provides welcome news to miners pondering what further federal agency approvals and consultation may be needed to continue mining operations after many years on stand-by status. Specifically, to the extent that a mine’s prior approved plan of operations includes provisions for operation in stand by status and for continuation of mining thereafter, this decision supports a conclusion that no further NEPA review is needed provided no modifications to the plan of operations and no additional federal agency approvals are needed. Further, this decision supports an abbreviated NHPA consultation process even where the project may affect a TCP or other sensitive resource discovered or designated after the initial approval.

Nevertheless, mine owners should expect that federal agencies and courts will require mine plan reviews to confirm that the approved plan of operations needs no modification, and will require further, albeit abbreviated, consultation under NHPA for historic properties discovered following the original approval.

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