On June 23, a coalition of industry, states, and tribal interests convinced a federal judge to stay the effective date of the Bureau of Land Management's (BLM) hydraulic fracturing rule.
The stay demonstrates the first step for the industry in holding the BLM accountable to the requirements of the Administrative Procedure Act (APA) and the first step for the states in holding the BLM within its jurisdictional boundaries.
So what does the stay mean?
First, industry will not have to comply with the rule until the court decides on the coalition's preliminary injunction motions, which will likely not be until mid-August.1
Second, the stay indicates that the court believes that industry and the states will suffer irreparable harm from immediate implementation of the rule.
How did we get here?
BakerHostetler began the challenge to BLM's deficient rule with a petition for review filed on behalf of the Independent Petroleum Association of America and Western Energy Alliance. The states quickly followed, with Wyoming filing its own suit in which a consortium of North Dakota, Colorado, and Utah later joined. On the eve of the hearing, the Ute Tribe moved to intervene and requested a temporary restraining order.
IPAA's and the Alliance's arguments focus on the technical and administrative failures of the hydraulic fracturing rule. In contrast, the states' arguments focus on the BLM's infringement on state sovereignty.
Where do we go from here?
The court's ruling implies that the coalition has all but satisfied an important aspect of its preliminary injunction burden.2
The court stayed the effective date of the rule under the equitable authority granted by the APA.3 The APA allows the court to "issue all necessary and appropriate process to postpone the effective date of an agency action" to "prevent irreparable injury."4 Thus, the court's ruling suggests that industry and the states have all but proved the most important aspect of a preliminary injunction—irreparable harm.5
Furthermore, the court indicated that serious questions support the merits of the coalition's arguments and that the public interest would likely not be harmed by a stay of the rule's effective date. Specifically, the court found little likelihood of injury to the public interest, because 99.3 percent of all hydraulic fracturing occurs in states with existing extensive and effective hydraulic fracturing regulations.
With a stay in hand, the coalition will push forward to obtain a full preliminary injunction.
1 Currently, the record is scheduled to be lodged on July 22, 2015. The court ordered the parties to submit citations to the administrative record within seven days of BLM's lodging the record—i.e., on July 29. And the court has indicated that it plans to rule on the preliminary injunction within two weeks thereafter.
2 "A plaintiff seeking a preliminary injunction must establish 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., 555 U.S. 7, 20 (2008).
3 5 U.S.C. § 705.
5 "[A] showing of probable irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction . . . ." Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1256, 1260 (10th Cir. 2004).
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