Great Basin Mine Watch and the Mineral Policy Center (collectively Great Basin) appealed a district court grant of summary judgment to defendants United States Department of the Interior and the Bureau of Land Management (collectively Bureau). Great Basin had alleged that the Bureau's approval of two gold mining permits for the Newmont Mining Corporation (Newmont) violated several federal statutes, including the National Environmental Policy Act (NEPA),[1] the Clean Water Act (CWA),[2] and the Administrative Procedure Act (APA),[3] but the district court disagreed and granted summary judgment for the Bureau on every claim. On appeal, Newmont intervened in the case, and the Ninth Circuit affirmed in part, reversed in part and remanded.

Newmont had submitted a proposal to expand its South Operations Area mining facility, located six miles northwest of Carlin, Nevada. The expansion project (South Project) intended to deepen and continue dewatering an existing mine and to continue discharging groundwater into a nearby creek. Upon receipt of the proposal, the Bureau ordered the preparation of a draft and final Environmental Impact Statement (EIS) pursuant to NEPA. The Bureau also prepared a cumulative impact analysis, which detailed the hydrological effects of the Amended South Project and other proposed and existing mines nearby, including another mine of Newmont's called the Leeville Project. The Bureau's Record of Decision ultimately chose an alternative to Newmont's proposal and implemented a mitigation plan. The Bureau then required Newmont to post an incremental bond for the first phase of the project as well as a bond groundwater and surface water monitoring.

One month after submitting the proposal for the South Project to the Bureau, Newmont submitted a separate proposal to expand its Leeville mine, located twenty miles northwest of Carlin, Nevada. This proposal involved plans to expand Leeville's existing mine and plans to haul Leeville's refractory ore to a processing mill at the South Operations Area. Upon considering the proposal, the Bureau released a draft and a final EIS, and the Bureau used the Cumulative Impacts Analysis it had developed for the South Project as a foundation for determining the cumulative impacts of Leeville. The Bureau's Record of Decision selected a modified alternative to the project and implemented a mitigation plan, and the Bureau ordered Newmont to post bonds for post-mine closure reclamation as well as for groundwater and surface water monitoring.

Great Basin filed suit, seeking judicial review of the final EISs, the Bureau's ultimate permitting decisions, and the bonding determinations. Both parties filed motions for summary judgment, and Great Basin sought to introduce an "extra-record document."[4] The district court refused to admit the document into the administrative record, and it granted summary judgment for the Bureau on all of Great Basin's claims, finding that, for several of the claims, Great Basin had not exhausted its administrative remedies and thus could not raise them for them for the first time before the district court. The Ninth Circuit reviewed the district court's grant of summary judgment de novo,[5] stating that it would review the Bureau's decisions under the APA and overturn if the decisions were arbitrary and capricious.[6] The Ninth Circuit reviewed the district court's refusal to admit extra-record evidence for abuse of discretion.[7]

The Ninth Circuit first addressed Great Basin's two arguments under the CWA: (1) that the Bureau's approval of Newmont's mining permits violated ambient water quality standards because the mining projects would extend the periods during which existing bodies of water were dry, and (2) that the Bureau's approval of the mining permits violated Newmont's effluent standards because the mining projects' groundwater discharged pollutants in excess of the amount allowed by Newmont's pollution permit. The district court dismissed both arguments by granting summary judgment for the Bureau, explaining that the "drying effect" argument was within the factual expertise of the agency and that groundwater argument was not raised before the Bureau.

The CWA regulates both the concentration of pollutants in bodies of water, or ambient water quality standards, as well as the discharge of pollutants from individual sources, or effluent limitations.[8] Under section 1319(a) of the CWA, a state is responsible for enforcing ambient water quality standards,[9] and, under section 401, a state must "provide a water quality certification before a federal license or permit can be issued for activities that may result in any discharge into intrastate navigable waters."[10] The CWA gives authority to the states to administer ambient water quality standards and effluent limitations, and allows states to impose stricter standards then the federal minimums.[11]

Great Basin argued the Bureau's approval of the mining permits violated section 401 of the CWA, because the permitted operations would result in a drying effect, and such a drying effect violated federal ambient water quality standards. Great Basin relied on PUD No. 1 of Jefferson County v. Washington Department of Ecology (PUD) as support, claiming PUD heldthat the CWA's definition of pollution "encompasses the effects of reduced water quality."[12] The Ninth Circuit disagreed with this interpretation, explaining that PUD holds a state "may set minimum flow standards as part of section 401 certification; it does not hold that states must do so."[13] The Ninth Circuit bolstered its holding by pointing to cases from other jurisdictions in which the courts had held that the withdrawal of water did not constitute pollution.[14] The Court also reconciled its holding with the recent Supreme Court case S.D. Warren Co. v. Maine Board of Environmental Protection (S.D. Warren),[15] which held that release of water from a hydroelectric dam constituted a potential discharge under section 401 of the CWA. The Court explained that S.D. Warren "did not address whether individual states are required to regulate withdrawal of water under the [CWA]."[16] Rather, S.D. Warren merely "reiterate[d] that individual states have the responsibility of regulating water pollution and water use."[17] The court next addressed Nevada law and concluded that it does not regulate the withdrawal of water under the CWA even though it may under PUD No. 1.[18]

The Ninth Circuit next addressed Great Basin's second argument under the CWA--that the Bureau erred in approving Newmont's mining permits, because the mining projects' discharge of groundwater violated is discharge limitations permit. The district court had dismissed the claim by summary judgment on the ground that Great Basin had not exhausted its administrative remedies under the APA by raising the argument before the Bureau. On review, the Ninth Circuit interpreted the APA's exhaustion requirement broadly, explaining that the requirement was met if "the [administrative] appeal, taken as a whole, provided sufficient notice to the [agency] to afford it an opportunity to rectify the violations that plaintiffs alleged."[19] The Ninth Circuit noted that Great Basin had briefly mentioned, but clearly expressed, its concerns about groundwater in its comment letter to the Bureau on the South Project draft EIS. The Ninth Circuit held that Great Basin's clearly-expressed concern was sufficient to put the Bureau on notice, and Great Basin had exhausted its administrative remedies.

Having held that Great Basin could raise the groundwater issue on appeal, the Ninth Circuit next addressed the merits of the claim. Great Basin had alleged that Newmont's groundwater discharges exceeded the limitations in Newmont's National Pollution Discharge Elimination System (NPDES) permit and water quality standards. Great Basin relied on a table attached to the South Project EIS that showed that groundwater pumped from the South Project had exceeded the NPDES permit limits. The Ninth Circuit reviewed the table and held that Great Basin's reliance on it was misplaced. The court explained that, while the table showed some occasional discharges beyond the NPDES limits, the discharges were generally within the permit limits. The Ninth Circuit also explained that the Bureau had found "no significant non-compliance,"[20] and the court held that such a finding was not arbitrary or capricious. Thus, the Ninth Circuit reversed the district court's decision as to whether Great Basin had exhausted the groundwater claim but ultimately dismissed the claim on the merits.

The Ninth Circuit next addressed Great Basin's argument that the Bureau's permitting decision violated Public Water Reserve No. 107 (PWR).[21] The purpose of PWR is to prevent the monopolization of water on public land and to reserve such water for public use. Great Basin had argued to the district court that the Bureau's approval of mining permits for Newmont violated PWR because the mining plan would reduce the availability of springs and waterholes in the region. The district court dismissed the claim by summary judgment because it found that Great Basin had not raised the claim before the Bureau. On appeal, the Ninth Circuit affirmed the district court grant of summary judgment, because Great Basin's commenting on its concerns about groundwater did not put the Bureau on notice of a claim under PWR. The Ninth Circuit reasoned that the connection because groundwater concerns and PWR was too attenuated, and the court affirmed the district court's finding that Great Basin had not exhausted its administrative remedies for the PWR claim.[22]

Next, the Ninth Circuit addressed Great Basin's claims under National Environmental Policy Act (NEPA). Great Basin had made two arguments under NEPA before the district court, which the Ninth Circuit reviewed de novo: (1) that the Bureau should have evaluated Newmont's two mining projects in a single EIS because the projects were connected actions, and (2) that the Bureau's cumulative impact analysis was inadequate. The district court dismissed both claims on the grounds that Great Basin did not raise them before the Bureau and, in the alternative, that they each failed on the merits. The Ninth Circuit held that Great Basin had exhausted its administrative remedies and could raise the issues on appeal, because Great Basin had submitted comments to the Bureau that discussed concerns about both issues. Having held that Great Basin had exhausted its administrative remedies, the Ninth Circuit then addressed the merits of each argument.

As for Great Basin's first argument, that the Bureau should have evaluated Newmont's projects in a single EIS, the Ninth Circuit held that projects were not sufficiently connected so as to require two EISs. NEPA requires that connected actions be evaluated in a single EIS, because such a requirement "prevent[s] an agency from dividing a project into multiple 'actions,' each of which individually has an insignificant environmental impact, but which collectively have a substantial impact."[23] The Ninth Circuit applied an "independent utility"[24] test to determine whether Newmont's two mining projects were so connected that the Bureau should have evaluated them in a single EIS. Under this test "[w]hen one of the projects might reasonably have been completed without the existence of the other, the two projects have independent utility and are not 'connected' for NEPA's purposes."[25] Great Basin argued that Newmont's projects were connected because Leeville's ore was processed at a facility in the South Project. The Ninth Circuit rejected the sufficiency of this fact to show the projects were connected, because the Leeville draft EIS specifically stated that the South Project's facility could process Leeville's ore without any modifications. Thus, although South Project was undergoing modifications generally, none of these modifications affected the facility that was to process Leeville's ore. The Ninth Circuit concluded that, although Great Basin had exhausted its administrative remedies with respect to this claim, the claim ultimately failed because Great Basin had presented insufficient evidence to show the two projects were interdependent.

The Ninth Circuit, however, agreed with Great Basin's second claim under NEPA, that the Bureau's cumulative impact analysis was inadequate. Under NEPA "[a] proper consideration of the cumulative impacts of a project requires some quantified or detailed information; general statements about possible effects and some risk do not constitute a hard look absent a justification regarding why more definitive information could not be provided."[26] An EIS "must give a sufficiently detailed catalogue of past, present, and future projects, and provide adequate analysis about how these projects, and difference between the projects, are thought to have impacted the environment."[27] Similarly, conclusions without supporting data do not fulfill NEPA's requirement unless there is some explanation for why such data is not provided.[28] The Ninth Circuit explained that, although the South Project EIS made conclusions regarding air toxics and hazardous wastes from the other mines, it did not discuss the relative contribution of each mine in the area or provide any objective data to support its conclusions. With regard to the Leeville EIS, the court specifically noted "the analysis of cumulative impacts on air is only five sentences long and includes no mine-specific or cumulative data . . . ."[29] The court also agreed with Great Basin that the Leeville EIS contained no discussion of the effects of sludge or hazardous waste disposal. The Bureau argued that it did not need to examine sludge, because the toxicity of sludge had not been determined, but the court responded that allowing such an argument "would vitiate the Bureau's duty to take a 'hard look' at the cumulative impacts of the action."[30] Thus, the Ninth Circuit held that the Bureau's cumulative impacts analyses in both EISs were deficient and therefore reversed the district court.

The Ninth Circuit next discussed and rejected Great Basin's numerous arguments regarding the financial assurances that the Bureau had set for Newmont. In order to meet the statutory requirement, such financial assurances "must cover the estimated costs as if [the Bureau] were to contract with a third party to reclaim [the] operations according to the reclamation plan . . . ."[31] The district court rejected Great Basin's argument that the Bureau's decision to allow Newmont to bond the South Project in phases was arbitrary and capricious. On appeal, Great Basin argued that the Bureau was required to calculate the full cost of reclamation before approving a bond for the first phase of the operation, but the Court disagreed, explaining that the Bureau was only required to "obtain a financial guarantee before permitting."[32] Great Basin also argued, relying on reports from a consultant, that the Bureau's calculation of the bond amount was "grossly inadequate"[33] but the Ninth Circuit rejected this argument as well, reasoning that the Bureau was entitled to rely on its own experts and therefore it had not acted arbitrarily or capriciously. Lastly, Great Basin argued that the Bureau should have required Newmont to post a proper financial instrument rather than a corporate guarantee, but the court explained that this argument failed as a matter of law. The court explained that the regulatory prohibition on corporate guarantees[34] does not apply to corporate guarantees in effect before a certain date, and Newmont's bond referred to corporate guarantees that were in effect prior to that date.

Lastly, the court reviewed Great Basin's argument that the district court should have admitted a document into the record even though Great Basin had submitted it after the deadline. Courts are generally limited to the agency records and cannot admit additional evidence except in "limited circumstances."[35] The document Great Basin submitted was a notice from the Nevada Division of Environmental Protection (NDEP), and it demonstrated that NDEP and Newmont both considered the South Project, Leeville, and another Newmont mine to be a single project for permitting purposes. The district court refused to admit the document or take judicial notice of the facts contained in it because the court found that Great Basin had not shown that the NDEP's criteria were relevant to a NEPA analysis. The Ninth Circuit reviewed for abuse of discretion and affirmed the district court, because the Bureau had not relied on the document, the document did not demonstrate bad faith, and the document was not necessary to explain technical terms.

Judge Thomas wrote separately, concurring in part and dissenting in part. He agreed with the majority that the Bureau's cumulative impact analysis was insufficient under NEPA, but he disagreed with the majority's holding that the South Project and Leeville were not connected under the independent utility test. Judge Thomas opined that the South Project was essential to Leeville because "[i]t would be not merely unwise, but also entirely irrational to proceed with the mining of Leeville in the absence of available processing facilities."[36] Thus, Judge Thomas concurred with the majority's decision as to the cumulative impacts analysis, but he disagreed with the majority's holding that Newmont's two mining projects did not require a single EIS.

To summarize, the Ninth Circuit reversed the district court on the issue of whether Great Basin had exhausted its claims under the CWA but ultimately rejected those claims on the merits. As for NEPA, the Ninth Circuit reversed the district court's holding that the Bureau had conducted an adequate cumulative impact analysis but affirmed the district court's finding that Newmont's two mining projects were not interdependent. The Ninth Circuit also rejected Great Basin's claims concerning the Bureau's bonding calculation as well as its claims under PWR, and the court held that the district court did not abuse its discretion in refusing to admit an extra-record document that Great Basin had submitted after the deadline for filing extra-record documents.