California Coastal Commission v. Norton: a coastal state victory in the seaweed rebellion.

• Author: Fitzgerald, Edward A.

I.

INTRODUCTION

There has been a great deal of federal-state conflict regarding outer continental shelf (OCS) energy development, which is known as the Seaweed Rebellion. (2) California, which has experienced eleven OCS lease sales off its coast since 1961, (3) has been a leader of the Seaweed Rebellion. California has been involved in litigation regarding the tidelands controversy, (4) the disposition of section 8(g) revenues under the Outer Continental Shelf Lands Act (OCSLA), (5) and the development of the Department of Interior's (Interior's) five-year OCS leasing programs pursuant to section 18 of the OCSLA. (6) This article examines California's utilization of the Coastal Zone Management Act (CZMA) to influence OCS energy development. A brief history of the conflicts between California and the federal government regarding OCS energy development is set forth. The Ninth Circuit's decision in the latest battle, California Coastal Commission v. Norton, (7) is analyzed. The article concludes that the Ninth Circuit was correct in holding that the suspension of thirty-six OCS leases off California are subject to state consistency review pursuant to section 307(c)(1) of the CZMA. Furthermore, the Ninth Circuit properly determined that Interior should not have categorically excluded the OCS lease suspensions from National Environmental Policy Act (NEPA) analysis because the suspensions constituted extraordinary circumstances. Finally, the current Bush administration and congressional efforts regarding OCS energy development and the California leases are examined.

II.

OCS CONFLICTS OFF CALIFORNIA'S COAST REGARDING THE CZMA

The CZMA of 1972 establishes a "national policy ... to preserve, protect, develop, and where possible, to restore or enhance the resources of the Nation's coastal zone." (8) Coastal states are encouraged to assume planning and regulatory functions over their coastal zones. The CZMA accomplishes this in two ways. First, the coastal states receive grants to develop and administer coastal zone management programs. (9) Second, federal activities that affect the coastal zone must be conducted in a manner that is consistent "to the maximum extent practicable with state coastal zone management programs." (10) The California Coastal Commission (Commission), which was established by the California Coastal Act in 1972, (11) regulates activities along the California coast. The Commission developed the California Coastal Management Program (CCMP) that was submitted to the National Oceanic and Atmospheric Administration (NOAA) for approval. (12) In September 1977, several petroleum groups and companies brought suit, challenging NOAA's approval of the CCMP. The petroleum industry alleged that the program lacked specificity and did not adequately consider the national interest in energy facility siting. The federal district court upheld NOAA's approval, declaring that the program did not have to "include detailed criteria establishing a sufficiently high degree of predictability to enable a private user of the coastal zone to say with certainty that a given project must be deemed 'consistent' therewith." (13) The industry's contention that the "affirmative accommodation of energy facilities was made a quid pro quo" for program approval was rejected. (14) The Ninth Circuit affirmed. (15)

The controversy regarding state consistency review of OCS lease sales began in 1979. (16) The Commission requested a consistency determination for lease sale forty-eight, asserting that the Final Notice of Sale (FNOS) "directly affected the California coastal zone by conclusively establishing the size of the lease sale, the location of the tracts to be leased, the timing of the lease sale, and lease stipulations." (17) Interior refused, arguing that federal pre-leasing activities did not directly affect the coastal zone. The dispute was referred to the Department of Justice (DOJ), which concluded that the issue is a factual question to be decided on a case-by-case basis. (18) Interior still refused to conduct a consistency determination, but took steps to meet California's objections. The Commission requested mediation by the Secretary of Commerce (SOC), (19) who determined that the pre-lease activities directly affected the coastal zone, and thus were subject to section 307(c)(1). (20)

President Reagan came to office in 1981. The Reagan administration urged the reinvigoration of federalism, but was hostile to the coastal state concerns regarding OCS energy development. The battle over consistency review of OCS lease sales continued. After Interior refused to conduct a consistency determination for lease sale fifty-three off central and northern California, California brought suit to enjoin the sale of twenty-nine tracts in the Santa Maria Basin. In May 1981, the federal district court issued an injunction preventing Interior from taking any action on the disputed leases. (21) In August 1981, the federal district court concluded that the FNOS directly affected California's coastal zone and was subject to consistency review pursuant to section 307(c)(1). (22) After the Ninth Circuit concurred, (23) Interior appealed to the Supreme Court. During the interim, lease sale sixty-eight off southern California was halted by the federal district court, which held that a consistency determination was required. (24) Lease sale seventy-three off central California was also delayed because the consistency determination was inadequate. (25)

In 1984, the Supreme Court issued a narrow five to four decision in Secretary of Interior v. California, which held that only federal activities occurring within the geographical boundaries of the coastal zone can directly affect the coastal zone. (26) Examining the legislative history, the Court determined that the conference committee's substitution of "directly affecting" for "in" the coastal zone was a "simple compromise" over the definition of the coastal zone that was not meant to expand the scope of section 307(c)(1). (27) Four proposals extending the CZMA to activities conducted beyond the coastal zone had been rejected in 1972. (28) The Court maintained that section 307(c)(3), which deals with federally approved actions, not section 307(c)(1), which addresses federal actions, was "more pertinent" to OCS lease sales. (29) Finally, the Court held that the enactment of the OCSLA Amendments in 1978, which divided OCS development into four distinct stages, clearly separated the lease sale from the issuance of subsequent permits. (30) The lease sale only entitled the lessee to priority in the submission of subsequent plans and did not directly affect the coastal zone. The carefully delineated OCS development process would not be upset "by a superficially plausible but ultimately unsupportable construction of two words in CZMA [section] 307(c)(1)." (31) Congressional efforts to reverse the Court's decision failed in 1984 and 1985. (32)

The battle over consistency review and the aggressive OCS leasing program of the Reagan administration caused Congress to establish moratoria on leasing in OCS planning areas off northern, central, and southern California from 1982 through 1985. (33) The moratoria off California ceased in 1985 because an agreement between Interior and California only permitted leasing in 150 of the 6460 tracts that had been included in the moratoria since 1982. (34) Secretary Hodel backed out of the agreement in September 1985, alleging that too much promising acreage had been eliminated. Secretary Hodel claimed that there had been no agreement, just a proposal that was subject to change. (35) The 1986 Interior appropriation bill did not provide for any moratoria off California, but instructed the Secretary "to make every effort during the balance of FY 1986 to resolve the outstanding conflicts with respect to future leasing" off California. (36) In 1986, Congress continued to encourage federal state negotiations, authorized Interior to accept the state's proposals, and delayed leasing off California until 1989. (37) The OCS moratoria off the coast of California were restored in 1986 and continued throughout the remainder of the Reagan administration. (38)

President Reagan came to office seeking to reduce the federal deficit by terminating the funding for many vital ocean and coastal programs, including the CZMA. Despite coastal state assertions, the Reagan administration argued that coastal states would continue the programs if federal funding was stopped. Congress initially went along with the administration and cut the funding for the CZMA. During this time Congress began to consider OCS revenue-sharing proposals as an alternative means to fund vital ocean and coastal programs. (39) An OCS block grant proposal failed in 1984, but Congress restored CZMA funds and reauthorized the CZMA in 1985. (40)

There was another battle between California and the federal government regarding the scope of state authority pursuant to section 307(c)(3)(B). (41) In 1983, Exxon, the designated operator of a quadrant in the Santa Barbara Channel, submitted an exploration plan and environment report to Interior and the CCC, seeking approval for three wells. In July 1983, the Commission objected to Exxon's consistency certification, asserting that Exxon's exploration activity would interfere with thresher shark fishing, which occurred from May through December. California fishermen used drift gill nets, which required the fishermen to drift with the current pulling nets as long as 6000 feet. The ships were not under power and could collide with drill rigs. After drift gill netting was prohibited from January through April because of whale migration, the Commission approved drilling of well A, which would occur before thresher shark fishing season. After the Commission rejected Exxon's plans for wells B and C, Exxon appealed to SOC. (42) When the SOC refused to overturn the Commission...