Ashley Creek Phosphate Co. (Ashley Creek) appealed a district court's dismissal for lack of standing in its suit against Secretary of the Interior, Gale Norton. Ashley Creek brought the claim under the National Environmental Policy Act (NEPA), [1] alleging that the Bureau of Land Management's (BLM) Environmental Impact Statement (EIS) failed to consider the option of obtaining phosphate mineral deposits controlled by Ashley Creek in a decision to expand mining into BLM controlled land. Under de novo review, the panel held that Ashley Creek possessed neither Article III nor prudential standing because Ashley Creek had only an economic interest in the outcome of the case, and thus failed to demonstrate an injury in fact, or an interest within the zone of interests protected by section 102(2)(C) of NEPA.[2] In so doing, the Ninth Circuit squarely rejected the Eighth Circuit's determination that section 102 protects "purely economic interests."[3] Judge McKeown wrote for the panel. Judge Beezer concurred in the first part of the opinion that contemplated constitutional standing and concurred in the decision.

Agrium Conda Phosphate Operations (Agrium), a manufacturer of phosphate-based fertilizer at the Conda Phosphate Processing Plant (the Plant) near Soda Springs, Idaho, historically obtained phosphate from the Rasmussen Ridge Mine (Rasmussen Ridge), about twelve miles from the Plant. In the late 1990's, with Rasmussen Ridge nearing depletion, Agrium began to explore alternative phosphate sources, one of which was deposits near Vernal, Utah (the Vernal deposits) controlled by Ashley Creek. Agrium decided the Vernal deposits were not a cost effective source of phosphate after considering the cost of mining and transporting the materials approximately 250 miles. Agrium decided instead to expand Rasmussen Ridge into North Rasmussen Ridge, a location not previously mined by Agrium and under BLM administration. Agrium's decision necessitated that Agrium submit a mine and reclamation plan (the Plan).

In response to Agrium's plan, BLM prepared an EIS considering three alternatives and evaluating prospective impacts of exposing selenium and other harmful materials, including possible harm to the Canada Lynx, The court noted that "exposure of selenium and other elements contained in phosphate increases the potential for release of those elements into the water and soil."[4] The EIS alternatives included the Plan as submitted and a no action alternative. In response, Ashley Creek commented that the draft EIS was deficient in failing to consider the Vernal deposits as an alternative. Further, Ashley Creek asserted that the Vernal deposits were environmentally superior to the Plan and were cost effective.

BLM declined to include the Vernal deposits as an alternative claiming that it had no responsibility to make any comparative analysis between the North Rasmussen Ridge Deposits and Vernal deposits. BLM believed that the EIS needed only address the issue of whether the North Rasmussen Ridge should be mined at that time. Furthermore, BLM explained that it did not choose to explore the Vernal deposits as an alternative because a past Agrium investigation had determined that the Vernal deposits could not provide an adequate supply of phosphate.

Ashley Creek filed suit in Idaho District Court after release of the final EIS, alleging deficiency in its alternatives analysis in view of its failure to consider the Vernal deposits. The district court dismissed the case for lack of standing after concluding Ashley Creek's motivation for the suit was purely economic and that economic interests fall outside the zone of interests protected by NEPA.

Ashley Creek's appeal required the panel to decide the threshold question of standing, "the question of . . . whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues."[5] "Because Article III of the Constitution limits the role of the judiciary to hearing only 'cases' or 'controversies,' constitutional standing ensures that a plaintiff has sufficient stake in a case to establish a 'case' or 'controversy.'"[6] The panel further considered the requirements of prudential standing "consisting of 'several judicially self-imposed limits on the exercise of federal jurisdiction.'"[7]

The Ninth Circuit defined the requirements of Article III standing:

as an 'irreducible minimum' that the plaintiff show (1) an injury in fact that is both (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) that the injury is fairly traceable to the challenged action of the defendant; and (3) a likelihood that the injury will be redressed by a favorable decision.[8]

The panel held that Ashley Creek failed to establish an injury in fact.

The panel characterized the wrong asserted by Ashley Creek, that BLM failed to consider the Vernal deposits as an alternative within the EIS, as procedural because BLM failed to follow procedures set forth in section 102(2)(C)(iii) of NEPA, which requires consideration in an EIS of alternatives to a proposed action. The panel held that procedural injuries may suffice to provide standing in light of NEPA's procedural nature,[9] but to establish standing, a plaintiff must demonstrate that the "procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing."[10] Further, the panel held that a "free-floating assertion of a procedural violation, without a concrete link to the interest protected . . . does not constitute an injury in fact."[11]

Relying on a previous Ninth Circuit opinion, Cantrell v. City of Long Beach,[12] the panel held that the "concrete interest" test under NEPA requires a "geographic nexus" between the plaintiff alleging an injury and the locus of the environmental impact. The panel thus held that "plaintiffs who use the area threatened by a proposed action or who own land near the site of a proposed action have little difficulty establishing a concrete interest."[13]

However, the panel held that Ashley Creek failed to demonstrate "any judicially recognizable geographic nexus to the area that would be affected by mining on the North Rasmussen Ridge,"[14] some 250 miles from Ashley Creek's Vernal deposits and across the Idaho-Utah border. The panel noted that 250 miles does not represent a threshold distance beyond which a geographic nexus may not be found to assert standing, but that the distance did prevent an assumption, on the facts before the panel, that Ashley Creek was geographically connected to North Rasmussen Ridge. The panel went on to hold that Ashley Creek did not demonstrate that its phosphate reserves were connected to the proposed mining or that its property interests would be affected by the proposed mining. Further, Ashley Creek did not allege "it uses, appreciates, or in any way has an interest in the region surrounding North Rasmussen Ridge."[15]

Thus, the court held that Ashley Creek failed to demonstrate a "legally sufficient link between Ashley Creek's interest-getting the BLM to analyze unrelated phosphate deposits 250 miles away from the proposed mines-and NEPA's procedural requirement that agencies analyze the environmental impact of the proposed mining at a specific site, North Rasmussen Ridge. Not only [was] the geographic link missing, the substantive concrete injury [was] wholly absent."[16]

The panel emphasized its holding in two ways. First, the panel extended its interpretation of Ashley Creek's theory. The court opined that "any owner of a phosphate mine, whether located in Alaska, Utah, or Florida, would have standing to challenge the EIS. Why stop there? Taking Ashley Creek's framework one step further, the BLM would be obligated not only to analyze the environmental suitability of unrelated phosphate deposits, but also phosphate substitutes that might be more eco-friendly."[17] Second, the panel analogized Ashley Creek to "Justice Scalia's example of the kinds of plaintiffs who cannot assert procedural injuries: 'persons who have no concrete interests affected-persons who live (and propose to live) at the other end of the country from the [proposed project].'"[18] Absent evidence showing a geographic nexus between Ashley Creek's holdings and the location of the proposed project, the Ninth Circuit held that Ashley Creek's holdings are "at the other end of the country" for purposes of standing, and thus Ashley Creek was precluded "from alleging a procedural injury sufficient to confer standing."[19]

As an alternative theory for the Ninth Circuit's decision, a majority of the panel held that Ashley Creek did not satisfy the zone of interests test, a requirement of prudential standing. "The prudential standing analysis examines whether 'a particular plaintiff has been granted a right to sue by the statute under which he or she brings suit.'"[20] The court concluded Ashley Creek's purely financial interest in challenging the EIS' alternatives analysis contrasted with NEPA's environmental purposes and thus held that Ashley Creek's interest fell outside the zone of interests protected under NEPA. Thus, the court concluded that Ashley Creek also lacked prudential standing. In so holding, the panel acknowledged its split with the Eighth Circuit.

The panel began by relying on a prior Ninth Circuit opinion[21] holding that NEPA does not provide a private right of action and that plaintiffs challenging an action agency in light of NEPA must do so under the Administrative Procedure Act (APA).[22] The panel described, "the Supreme Court has interpreted this section of the APA as imposing a prudential standing requirement that the interest sought to be protected by the complainant [must be] arguably within the zone of interests to be protected or regulated by the statute . . . in question."[23]

The panel held that the zone of interests test does not present "an onerous burden on the plaintiff" nor is it "meant to be especially demanding."[24] However, the court held that a when a plaintiff in general, and Ashley Creek in particular, is not "the subject of the contested regulatory action, the test denies a right of review if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit."[25]

Because the Ninth Circuit concluded that purely financial interests fall outside NEPA's zone of interests, "[a] plaintiff who asserts purely economic injuries does not have standing to challenge an agency action under NEPA."[26] Thus, the court held Ashley Creek failed to demonstrate prudential standing because Ashley Creek failed to assert an interest "even remotely intertwined with the environment."[27] Rather, Ashley Creek's conceded interest was selling phosphate to Agrium, an interest unlinked to the environment or environmental impacts evaluated by the EIS.

The court squarely rejected Ashley Creek's argument that the zone of interests rule under NEPA, precluding pecuniary interests, ceases to apply once an agency moves forward on an EIS. Ashley Creek's argument derived from its position that section 102, defining EIS content once an agency determines an EIS is required, protects pure pecuniary interests. The court rejected Ashley Creek's argument on the basis that the argument required a bifurcated reading of NEPA that would provide different standing requirements for cases in which an EIS is clearly required and threshold cases where an agency may not be required to generate an EIS.

Ashley Creek's argument derived from Bennett v. Spear,[28]where the Supreme Court considered the zone of interests under the Endangered Species Act (ESA).[29] There, the Supreme Court pronounced that the zone of interests "is to be determined not by reference to the overall purpose of the Act in question . . . , but by reference to the particular provision of law upon which the plaintiff relies."[30] The Court held that a primary object of the disputed section in Bennett was to prevent needless economic harm from a "haphazard" implementation of species protection. Thus, plaintiffs in Bennett asserted pecuniary interest, which fell within the zone of interests of the disputed section 7 of the ESA.

The Eighth Circuit applied Bennett's rule to section 102 of NEPA in Friends of the Boundary Waters Wilderness v. Dombeck.[31] There, the Eighth Circuit examined section 102 and its regulations requiring an EIS to contemplate economic effects "interrelated with physical environmental effects" and determined that NEPA's zone of interest encompasses both economic and environmental concerns. The Eighth Circuit distinguished between cases requiring an EIS, in which Plaintiffs with purely economic interests may bring suit to challenge the agency's decision under NEPA, and threshold cases in which the general environmental purposes of NEPA apply exclusively. Under this reasoning, purely economic interests give rise to standing when a plaintiff asserts a deficient EIS because NEPA's general environmental purposes do not govern specific provisions controlling the EIS process.

The Ninth Circuit disagreed with the Eighth Circuit's conclusions that section 102 protects purely economic interests and "that it can be severed from NEPA's overarching purpose."[32] The panel held that section 102(2)(C) "acknowledges economic concerns [but those] concerns are not divorced from environmental considerations. In other words, § 102(2)(C) does not set out a purely economic factor, unconnected to environmental concerns."[33] The panel's analysis of section 102(2)(C) began by holding that "the human environment is the overarching principle driving the provision."[34] The Ninth Circuit then read environmental considerations into each EIS requirement listed in section 102(2)(c) which "[left] no room for economic interests divorced from the environment."[35]

The panel found historical support for its interpretation of section 102(2)(C)'s [36] exclusively environmental focus and interpreted Metropolitan Edison Co. v. People Against Nuclear Energy[37] to hold that NEPA requires agency contemplation of not all project impacts but only "those that have a 'reasonably close causal relationship' with 'a change in the physical environment.'"[38] Further, the panel found support in the implementing regulations, holding that 40 C.F.R. § 1508.14 (2005) "indicates that [while] economic considerations may be relevant, those economic effects matter only when they are 'interrelated' with 'natural or physical environmental effects.'"[39] Thus, the Ninth Circuit interpreted relevant case law and agency regulation to exclude plaintiffs with purely economic interests from section 102(2)(C)'s zone of interests.

Finally, the panel concluded its prudential standing analysis by holding that section 102 may not be divorced from the overarching environmental purpose of NEPA, further rejecting Ashley Creek's urging to follow the Eighth Circuit's interpretation of Bennett. The Ninth Circuit panel held the Supreme Court's ruling in Bennett that divorced the general purpose of the ESA (species preservation) from the section 7 purpose (preventing economic waste) does not create a presumption that all statutes' general and specific purposes are different.

The panel distinguished NEPA and the ESA and held that while the substantive provisions of the ESA may be separated and analyzed independently, "each section of NEPA is a purely procedural one that furthers the general purpose of the statute,"[40] and thus cannot be bifurcated from the statute's general purpose. The Ninth Circuit concluded that this overarching purpose was to "declare a national commitment to protecting and promoting environmental quality"[41] and that each NEPA provision, procedural in nature, furthers that purpose. Thus, the panel concluded, the purpose of each section of NEPA coincides identically with the purpose of NEPA as a whole: "protection of the environment."[42]

Thus, the panel concluded its opinion by refuting the Eight Circuit's distinction between cases involving NEPA's threshold applicability and cases involving evaluation of the EIS process. In doing so the panel repeated its view that "a purely economic injury that is not intertwined with an environmental interest does not fall within § 102's zone of interests."[43] Thus, the Ninth Circuit affirmed the district court's dismissal of Ashley Creek's suit for lack of standing because Ashley Creek failed to establish an injury in fact or an interest falling within NEPA's protected zone of interests.

In a concurrence in part, and concurrence in the judgment, Judge Beezer concluded that because Ashley Creek failed to establish Article III standing, the court should have foregone holding that the prudential standing doctrine forecloses a suit under section 102 of NEPA by any plaintiff asserting a purely economic harm.