By Kerry Shapiro and Daniel Quinley
On March 9, 2023, the US District Court for the Eastern District of California issued its ruling in Friends of the Inyo, et al., v. U.S. Forest Service, et al., in favor of the Forest Service and JMBM client KORE Mining Limited, in a challenge under the National Environmental Policy Act (“NEPA”) against the Forest Service’s approval of KORE’s small-scale, mineral exploration plan, brought by multiple environmental groups, including Friends of the Inyo and Center for Biological Diversity.
The case concerned a challenge to the Forest Service’s approval of KORE’s limited exploration project on mining claims located in the Inyo National Forest. KORE originally filed a plan of operations in the summer of 2020, proposing a small-scale mineral exploration project, comprising less than 1 acre of disturbance across twelve drill pads, and construction of a third of a mile of temporary access roads. The exploration project would be completed in under a year.
In late 2020, the Forest Service determined that KORE’s project likely fell within the bounds of a categorical exclusion under the National Environmental Policy Act (“NEPA”) for mineral exploration activities, and initiated the process, including public scoping, to evaluate the project. During this process, the Forest Service received multiple public comments. To address concerns raised during this process, the Forest Service took a closer look at two potentially impacted resources – groundwater and the bi-state sage grouse – and added a three-year monitoring component to the overall project. This monitoring component was to ensure that after KORE completed reclamation activities, there was also habitat enhancement, such as successful native revegetation. In September 2021, the Forest Service approved KORE’s project, relying on two categorical exclusions – one for the mineral exploration component and one for the habitat enhancement component.
Shortly after approval, the environmental group plaintiffs filed suit in the Eastern District of California, challenging the approval and alleging that the Forest Service’s approval of the project was “arbitrary and capricious” under the Administrative Procedure Act (“APA”) because it relied on two categorical exclusions, and ignored purported “extraordinary circumstances” that precluded use of the categorical exclusions.
KORE intervened in the lawsuit in December 2021, and the case was briefed and argued in 2022. The District Court rejected all of the environmental groups’ arguments. First, the court found that under the Forest Service regulations, use of the two categorical exclusions at issue (one for mineral exploration, one for habitat improvement) was reasonable, and illustrated how the use of multiple categorical exclusions could be reasonable given the appropriate facts and project circumstances. The court cautioned against the absurd use of multiple categorical exclusions – for example, in a project that contemplated multiple different and unrelated actions – but found that here, the “Forest Service reasonably concluded KORE’s project fit within the categorical exclusions for short-term mining exploration and for wildlife habitat improvement activities … [and] was also reasonable in relying on two categorical exclusions.”
Second, the court rejected plaintiffs’ claims of “extraordinary circumstances” relating to purported impacts to groundwater and bi-state sage grouse, finding that during the Forest Service’s review, it adequately evaluated concerns surrounding these resources, and that the record supported the Forest Service’s ultimate conclusion that no such “extraordinary circumstances” existed.
The court’s decision was not only a significant win for JMBM client KORE, but also provides important guidance in the Ninth Circuit for anyone seeking to undertake small-scale operations in a responsible manner on federal land, by recognizing and understanding that Federal decision-makers can utilize common sense and flexibility under NEPA to not only approve projects but also ensure that such projects are implemented in a responsible manner.
Kerry Shapiro chairs the Natural Resources & Mining Practice Group at Jeffer Mangels Butler & Mitchell LLP. He has represented the mining, construction and building materials industries on mineral extraction and land development projects for more than 25 years. Kerry also serves as General Counsel to the California Construction and Industrial Materials Association (CalCIMA). Contact Kerry at KShapiro@jmbm.com.
Daniel Quinley is an environmental and land use lawyer at Jeffer Mangels Butler & MItchell LLP. He represents clients in complex regulatory, permitting, policy, and litigation arenas. Contact Dan at DQuinley@jmbm.com.
JMBM’s Natural Resources & Mining Law Group
Jeffer Mangels Butler & Mitchell LLP has one of California’s leading natural resources and mining law practice groups. The group is comprised of lawyers with over 25 years of practice in law firms, government, and consulting, and provides companies and trade associations with unparalleled counseling, compliance, and litigation services in nearly every area of federal and California natural resources and mining law.