March 01, 2014

Consent decree cannot circumvent the statutory public review process to change federal management plans

Scott W. Horngren and Shay S. Scott

Litigation settlements that affect the management of public lands will be more difficult after the Ninth Circuit’s decision in Conservation Northwest v. Sherman, 715 F.3d 1181 (9th Cir. 2013). Litigants will have to be more careful that settlements do not substantively change land management plans or circumvent plan amendment and public participation procedures. The Ninth Circuit’s reasoning could limit settlements under other statutes that also require public involvement in agency decision making. In Conservation Northwest there was some question about whether the agreement between the plaintiffs and federal defendants was a “settlement agreement” or “consent decree.” The distinction, however, was not central to the court’s decision.

The concept of “sue and settle”—as a means to evade public involvement in agency rulemaking and decisions—has been addressed in federal legislation introduced to require an opportunity for public comment on settlement agreements and consent decrees before court approval. Sunshine for Regulatory Decrees and Settlements Act of 2013, S. 714 and H.R. 1493, 113th Cong. 2013–2014. The concern is that settlements can impose significant costs and expand the regulatory burden on industries while contravening statutory and regulatory review procedures. The attorneys general of 12 states have sued the U.S. Environmental Protection Agency (EPA) under the Freedom of Information Act to disclose documents related to agreed settlements with environmental groups regarding adoption of regulations for the Clean Air Act’s Regional Haze program. Oklahoma v. EPA, Case No. 5:13-cv-00726-M (W.D. Okla. July 16, 2013).

Survey and Manage

Conservation Northwest involved the U.S. Forest Service and Bureau of Land Management (BLM) decisions to remove a time-consuming, multimillion-dollar, species-survey requirement that prevented achieving the economic goals of the 1994 Northwest Forest Plan (officially referred to as the Standards and Guidelines for Management of Habitat for Late-Successional and Old-Growth Forest Related to Species within the Range of the Northern Spotted Owl). Courts have considered federal land-managing agencies’ plans as rules because they are adopted through public notice and comment. The Northwest Forest Plan covers 24 million acres and includes a “mitigation measure” called “Survey and Manage” that imposes region-wide and project-level survey requirements for Survey and Manage species. These 400 or so species include fungi, bryophytes, lichens, mollusks, amphibians, plants, and a mammal—none of which are listed under the Endangered Species Act. The species were subject to the Survey and Manage program either because they were apparently rare and thought to have a close association with old growth forest or because the agencies simply lacked information about them. Survey and Manage is time consuming, costly, and limits timber production. It can take up to two years to complete a survey; many species have a narrow seasonal “window” for surveys; and for certain species, the agency precludes some management activities such as timber harvesting if the species is found.

Agencies’ failed attempt to eliminate Survey and Manage through the public process

In 2001, timber industry groups sued to set aside the Survey and Manage program as illegal. The case was settled in 2003 on terms that required the agencies to consider an amendment to the Northwest Forest Plan that would include as one alternative the elimination of Survey and Manage. Douglas Timber Operators v. Secretary of Agriculture, Case No. 6:01-cv-6378-AA (D. Or. 2001). In 2004, the agencies completed an environmental impact statement (EIS) and selected the alternative that eliminated Survey and Manage. The court found that the EIS violated the National Environmental Policy Act (NEPA). Northwest Ecosystem Alliance v. Rey, 380 F. Supp. 2d 1175 (W.D. Wash. 2005). Then in 2007, the agencies completed another EIS amending the Northwest Forest Plan to eliminate Survey and Manage entirely. Plaintiff environmental groups challenged the action on various grounds, and the district court again held that the EIS violated NEPA. Conservation Northwest v. Rey, 674 F. Supp. 2d 1232 (W.D. Wash. 2009). The court declined to address the issue of a remedy “[d]ue to the highly complex issues at stake.” Id. at 1257.

Following the 2009 decision, the environmental groups and the agencies engaged in settlement discussions for over a year, but intervenor D.R. Johnson Lumber Company (D.R. Johnson) was excluded from the discussions. In July 2011, the court approved a consent decree entered into by the plaintiffs and the agencies (but not the intervenor). The consent decree was not subject to public notice or comment.

The consent decree and the appeal

The extensive 20-page consent decree resolved which species remained subject to Survey and Manage under the Northwest Forest Plan, which species were exempt from Survey and Manage, the intensity of survey effort required for the remaining species, and how forest practices had to be restricted if smaller reserves for species were used. For example, for the lichen Nephroma occultum, no predisturbance surveys were required under the Northwest Forest Plan, but the consent decree increased the surveying obligation by requiring surveys for all ground-disturbing activities. The district court concluded that approving a consent decree invokes a “judicial act,” and not agency action, so the general rules applicable to agency action do not apply. Conservation Nw. v. Rey, Case No. C08-1067-JCC (W.D. Wash. July 6, 2011) (ECF No. 91 – Stipulation and Order).

D.R. Johnson argued that the terms of the consent decree imposed permanent and substantive changes to the Northwest Forest Plan. The statutes and regulations governing management plan amendments—the National Forest Management Act (NFMA), the Federal Land Policy and Management Act (FLPMA), and NEPA—require that changes to management plans must comply with plan amendment procedures and public participation requirements. For example, for BLM plans, “[t]he public shall be provided opportunities to meaningfully participate in and comment on the preparation of plans, amendments and related guidance and be given early notice of planning activities.” 43 C.F.R. § 1610.2(a).

The common law provides that a court should not approve a consent decree if it violates the law or public policy. Sierra Club v. Elec. Controls Design, Inc., 909 F.2d 1350, 1355 (9th Cir 1990). D.R. Johnson appealed the approval of the consent decree on the grounds that a court cannot approve a consent decree that would allow plaintiffs and the agencies to modify management plans without following the law governing plan amendment and public participation procedures in NFMA, FLPMA, and NEPA.

Consent decree held to be an improper means to amend plans

The Ninth Circuit concluded that although courts should encourage settlement of disputes, the district court cannot approve a consent decree under the guise of a judicial act when it significantly amends an agency rule without going through statutorily required procedures. The court held that “the district court abuses its discretion when it enters a consent decree that permanently and substantially amends an agency rule that would have otherwise been subject to statutory rulemaking procedures.” Conservation Northwest, 715 F.3d at 1187. The court found that the consent decree established the rules for Survey and Manage that were essentially permanent unless and until the agencies decide to conduct further analysis and decision making. The court noted that if the agencies are satisfied with the version of the Survey and Manage as amended by the consent decree, they could simply let it stand indefinitely. While it is true that courts should encourage settlement, “[b]ecause the consent decree in this case allowed the Agencies effectively to promulgate a substantial and permanent amendment to Survey and Manage without having followed statutorily required procedures, it was improper.” Id. at 1188. Setting aside the consent decree, the Ninth Circuit remanded the case to the district court for further proceedings on injunctive relief.


The Ninth Circuit decision supports the argument that federal agencies cannot indiscriminately use the “sue and settle” strategy involving sweetheart lawsuits as a means to make substantive policy changes without going through rulemaking procedures. Even if a suit is not prearranged and an agency finds itself faced with an adverse court decision, it cannot solve its problem by agreeing to capitulate to the plaintiff if the demanded consent decree terms permanently and substantially change an agency rule. The Ninth Circuit decision has accomplished in small part what Congress is currently considering in the Sunshine for Regulatory Decrees and Settlements Act of 2013.

In the case of federal land managing agencies, the decision also means that the agencies and a plaintiff cannot make a deal through a consent decree to change the terms of a Forest Service forest plan or a BLM resource management plan. This does not mean the agencies are powerless to enter into a consent decree that involves changing a management plan. A consent decree that proposes rather than adopts a substantive change to a management plan would be legally sound. A consent decree is valid if it requires an agency to pursue a proposed change to the management plan through required plan amendment procedures or a proposed rule change following statutorily required rule making procedures. For example, a consent decree in which an agency agrees to consider an alternative to amend the management plan to prevent ground-disturbing activities on steep slopes as an alternative in an EIS circulated for public comment would be consistent with the Conservation Northwest decision. However, the consent decree would run afoul with Conservation Northwest if the decree committed the agency to prevent ground-disturbing activities on steep slopes under the terms of the decree. Likewise, a consent decree in which an agency agrees to consider modifying a rule through notice and comment procedures under the Administrative Procedure Act would likely survive attack, while a decree that makes a permanent rule change would not.

The Conservation Northwest decision will also provide a basis to challenge an agency’s de facto amendment to management plans through internal administrative action without following procedures for public input. Agencies are often tempted to abandon (or revise) provisions of their management plans internally in response to new information or changed thinking about resource management to avoid cumbersome plan amendment and public participation procedures, particularly with resource management plans that have been in place for a decade or more. For example, an agency decision to expand restrictions on the location or type of grazing, timber harvest, or oil and gas leasing areas beyond the provisions of a management plan is not uncommon. However, the Conservation Northwest decision will make these internal agency changes more vulnerable to challenge in the future.

Scott W. Horngren and Shay S. Scott

Scott W. Horngren is staff attorney for the American Forest Resource Council. Shay S. Scott is a partner in the firm of Haglund Kelley, LLP. They represented the appellant D.R. Johnson Lumber Company in Conservation Northwest v. Sherman.