JAMES G. WATT, ET AL., PETITIONERS V. STATE OF CALIFORNIA, ET AL. No. 82-1326 In the Supreme Court of the United States October Term, 1982 The Solicitor General, on behalf of the Secretary of the Interior, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Ninth Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit PARTIES TO THE PROCEEDING This litigation was commenced by the filing of separate but virtually identical complaints by the State of California and various environmental action groups. Parties plaintiff included the State of California, the California Coastal Commission, the California Air Resources Board, the California Resources Agency, the California Department of Fish and Game, the California Department of Conservation, the Natural Resources Defense Council, Inc., the Sierra Club, Friends of the Earth, Friends of the Sea Otter, and the Environmental Coalition on Lease Sale No. 53. Several California political subdivisions intervened as parties plaintiff in the litigation brought by the State: the Counties of Humboldt, Marin, Mendocino, Monterey, San Diego, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, and Sonoma, and the Cities of Brisbane, Capitola, Carmel-by-the-Sea, Los Angeles, Morro Bay, Pismo Beach, San Francisco, San Luis Obispo, Santa Barbara, Santa Cruz, Santa Monica, and Seaside, as well as the Association of the Monterey Bay Area Governments. Named as defendants, in addition to the Secretary of Interior were the United States Department of the Interior, the United States Bureau of Land Management, Edward Hastey, then Acting Director of the United States Bureau of Land Management, and Robert Burford, then Director Designate and now Director, United States Bureau of Land Management. The Western Oil and Gas Association intervened as a party defendant in the litigation, as did Amoco Production Co., Atlantic Richfield Co., Champlin Refining Co., Chevron U.S.A., Inc., Cities Service Co., Conoco, Inc., Exxon Corp., Elf Aquitaine Oil & Gas, Getty Oil Co., Gulf Oil Corp., Phillips Petroleum Co., and Shell Oil Co. Amicus briefs were filed in the Ninth Circuit on behalf of the Coastal States Organization and the States of Maine, Massachusetts, North Carolina, Florida, Alaska and Oregon. TABLE OF CONTENTS Opinions below Jurisdiction Statutes involved Statement Reasons for granting the writ Conclusion Appendix A Appendix B Appendix C Appendix D Appendix E OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-33a) is reported at 683 F.2d 1253. The opinion of the district court (App. B, infra, 34a-78a) is reported at 520 F. Supp. 1359. JURISDICTION The judgment of the court of appeals was entered on August 12, 1982 (App. C, infra, 82a). A timely peititon for rehearing was denied on November 10, 1982 (App. D, infra, 83a). The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTES INVOLVED Section 307(c)(1) of the Coastal Zone Management Act of 1972, 16 U.S.C. 1456(c)(1): Each federal agency conducting or supporting activities directly affecting the coastal zone shall conduct or support those activities in a manner which is, to the maximum extent practicable, consistent with approved state management programs. Pertinent provisions of the Outer Continental Shelf Lands Act, 43 U.S.C. (& Supp. IV) 1331 et seq., are reprinted in App. E, infra 87a-99a. QUESTION PRESENTED whether an outer continental shelf lease sale that does not authorize any conduct having a physical impact upon the coast is a federal activity "directly affecting the coastal zone" within the meaning of Section 307(c)(1) of the Coastal Zone Management Act of 1972, 16 U.S.C. 1456(c)(1). STATEMENT Pursuant to Section 307(c)(1) of the Coastal Zone Management Act of 1972 (CZMA), 16 U.S.C. 1456(c)(1), federal "activities directly affecting the coastal zone" are subject to the substantive requirement that they be conducted in a manner that is consistent "to the maximum extent practicable" with an approved state coastal zone management program. This litigation raises the question whether the consistency requirement of Section 307(c)(1) properly applies to an outer continental shelf (OCS) oil and gas lease sale conducted pursuant to the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. (& Supp. IV) 1331 et seq., when that sale has no physical impact upon the coast. 1. a. The Coastal Zone Management Act, 16 U.S.C. 1451 et seq., was enacted in 1972 to encourage the wise use of land and water resources of the coastal zone through the development and implementation of state management programs. 16 U.S.C. 1452. /1/ Before a state management program becomes effective, it is approved by the Secretary of Commerce (Sections 1454(h), 1455(c)), who must insure that the views of the federal agencies principally affected by the state's program have been adequately considered (Section 1456(b)). Following approval of a state management program, the actions of federal government licensees and permittees, as well as the activities of the federal government itself, must meet the consistency requirements of the Act (Section 1456(c)). Section 307(c)(1) of the CZMA, 16 U.S.C. 1456(c)(1), requires that each federal agency "conducting or supporting activities directly affecting the coastal zone" conduct or support those activities "in a manner which is, to the maximum extent practicable, consistent with approved state management programs." Pursuant to Commerce Department regulations implementing this provision, federal agencies are required to prepare a document called a "consistency determination" for any activity that will have a direct effect upon a state's coastal zone (15 C.F.R. 930.34). The consistency determination identifies the direct effects of the federal activity and provides the state with an explanation of how the activity has been tailored to achieve consistency with the state program (Section 930.39). Section 307(c)(3) of the Act, 16 U.S.C. 1456(c)(3), deals with the consistency obligations of federal licensees or permittees. Applicants for federal licenses or permits are required to supply consistency certifications for any "activity affecting land or water uses in the coastal zone." 16 U.S.C. 1456(c)(3)(A) and (B). The state is then given an opportunity to concur in the certification. If the appropriate state authorities refuse to concur, the federal agency from whom the license or permit is sought must reject the application. The state's veto of an applicant's consistency certification can be overridden by the Secretary of Commerce, however, if he finds that the applicant's proposed activity is consistent with the CZMA or is otherwise necessary in the interest of national security (ibid.). b. The Outer Continental Shelf Lands Act was enacted in 1953 to authorize federal leasing of the outer continental shelf beyond the state territorial sea belt for oil and gas development (ch. 345, 67 Stat. 462). See note 1, supra. In 1978, Congress amended the OCSLA, Pub. L. No. 95-372, 92 Stat. 632, to provide for, inter alia, the "expeditious and orderly development, subject to environmental safeguards," of resources on the OCS. 43 U.S.C. (Supp. IV) 1332(3). The OCSLA, as amended, provides distinct stages for federal decisionmaking concerning oil and gas activities on the OCS. The stages can be described as (1) preparation and leasing (Section 1337(a)); (2) exploration (Section 1340); and (3) development and production (Section 1351). /2/ The solicitation of bids and issuance of a lease constitute the first stage in the OCS development process. 43 U.S.C. (Supp. IV) 1337(a). Under the OCSLA, a lease entitles its holder to undertake only extremely limited activity without further federal approval. See 43 U.S.C. (Supp. IV) 1340(c) (approval required prior to exploration), Section 1351 (approval required prior to development and production). Regulations promulgated by the Department of the Interior provide that a lease merely entitles its holder to conduct "preliminary activities" on the OCS. 30 C.F.R. 250.34-1. These "preliminary activities" are defined as "geophysical and other surveys necessary to develop a comprehensive exploration plan" so long as such activities "do not result in any physical penetration of the seabed of greater than 300 feet of unconsolidated formations" and "do not result in any significant adverse impact on the natural resources of the OCS" (ibid.). More extensive activity is permitted only upon a lessee's compliance with the procedures and substantive requirements of the next stage: exploration. Prior to commencing exploration activities, a lessee must submit a detailed exploration plan to the Secretary for approval. 43 U.S.C. (Supp. IV) 1340(c). The Secretary must disapprove a plan if it would likely cause serious harm or damage to life or property or to the marine, coastal or human environment. 43 U.S.C. (Supp. IV) 1340(c)(1). A lessee submitting a plan that affects any land or water use in the coastal zone of a state with an approved management program must also attach a certification that the plan is consistent with the state's coastal zone management program. 43 U.S.C. (Supp. IV) 1340(c)(2); 16 U.S.C. 1456(c)(3)(B). The Secretary may not grant any license or permit for any activity described in an exploration plan until the state concurs with the consistency certification, or a determination of consistency or necessity is made by the Secretary of Commerce. 43 U.S.C. (Supp. IV) 1340(c)(2). If, following exploration, commercial quantities of oil and gas are discovered, the final stage under the OCSLA is development and production. As with the exploration stage, the lessee must submit a development and production plan to the Secretary for approval. 43 U.S.C. (Supp. IV) 1351(a)(1). The plan must be in compliance with the OCSLA and its implementing regulations, 43 U.S.C. (Supp. IV) 1351(h)(1)(A), /3/ and must include a certification of consistency with the coastal zone management plan of any affected state. 43 U.S.C. (Supp. IV) 1351(d); 16 U.S.C. (Supp. V) 1456(c)(3)(B). Approval of development and production plans is contingent upon approval of the final consistency certification. 43 U.S.C. (Supp. IV) 1351(h)(1)(B). 2. On April 27, 1981, the Department of the Interior published a final notice of sale for Lease Sale No. 53, Santa Maria Basin (App. A, infra, 11a). The notice announced the Department's decision to offer 111 OCS tracts off central California for leasing under the OCSLA (46 Fed. Reg. 23678-23680 (1981). /4/ Two days later, on April 29, 1981, the State of California filed suit seeking to enjoin the sale of 29 tracts in the northern portion of the Santa Maria Basin. A group of environmental organizations, led by the Natural Resources Defense Council, Inc., filed a substantially identical suit. The complaints alleged that the Department of the Interior had violated Section 307(c)(1) of the CZMA by failing to prepare a consistency determination for Lease Sale No. 53. Plaintiffs also contended that the sale of the contested tracts would be inconsistent with the state's coastal zone management program because of the possible effects of oil development on the sea otter. /5/ The federal government contended that it was not in violation of its obligations under Section 307(c)(1) of the CZMA because Lease Sale No. 53 did not come within the terms of the statute. The government relied upon former Secretary Andrus' administrative determination, reaffirmed by Secretary Watt, that the lease sale had no "direct effects" on California's coastal zone (App. A, infra, 10a). The Secretary concluded that Lease Sale No. 53 did not come within the sweep of Section 307(c)(1) because it had no physical impact on the coastal zone. Moreover, the potential effects of oil and gas exploration, development and production on the OCS are specifically subject to the separate consistency certification procedure set forth in Section 307(c)(3)(B) of the CZMA. On August 18, 1981, the district court entered summary judgment for California and the intervening local governments on their CZMA claim. /6/ The court ruled (App. B, infra, 62a-65a) that OCS Lease Sale No. 53 directly affected the coastal zone and the Secretary erred in not providing California with a consistency determination. /7/ The court found that leasing directly affects the coastal zone because "leasing sets in motion the entire chain of events which culminates in oil and gas development" (id. at 46a). According to the district court, the "direct effects" of a lease sale include all the potential activities that might take place during the later stages of the OCS development process. For example, the court accepted the state's claim that the possibility of an oil spill at the development and production stage was a "direct effect" of the lease sale (id. at 63a). The court similarly concluded that all of the possible effects on the coastal zone listed in the Environmental Impact Statement (EIS) and the Secretarial Issue Document (SID) prepared in conjunction with the lease sale were direct effects of the decision to lease (id. at 63a-65a). The district court therefore held that the tracts disputed by the State of California could not be leased until the Secretary prepared a consistency determination addressing the steps taken by him to insure that the sale would be consistent with the state's coastal management program. /8/ 3. On appeal, the Ninth Circuit affirmed. It ruled that an OCS lease sale "directly affects" the coastal zone within the meaning of Section 307(c)(1) of the CZMA because it establishes "the basic scope and charter for subsequent development and production" (App. A, infra, 13a). To support this conclusion, the court of appeals adopted the district court's list of direct effects developed from the EIS and SID prepared for Lease Sale No. 53 (id. at 12a-13a). The court of appeals reasoned that California's expansive interpretation of Section 307(c)(1)'s "directly affecting" threshold standard served the purposes of the Act better than the government's "narrow definition" because an OCS lease sale is "the first link in a chain of events which could lead to production and development of oil and gas on the individual tracts leased" (App. A, infra, 13a). Accordingly, it held that the Secretary of the Interior is required to prepare a consistency determination addressing all potential exploration, development and production activities prior to effectuating an OCS lease sale. /9/ REASONS FOR GRANTING THE WRIT The court of appeals has effectively amended the federal consistency requirements of the Coastal Zone Management Act of 1972 by reading the term "directly" out of Section 307(c)(1) of the Act. The decision below subjects an outer continental shelf lease sale to CZMA consistency requirements, even though Congress in the 1976 Amendments to the CZMA and the 1978 Amendments to the Outer Continental Shelf Lands Act clearly provided for a contrary result. The court of appeals' expansive construction of Section 307(c)(1), moreover, may well impose CZMA consistency requirements on a plethora of federal activities only tenuously connected with a coastal zone. Because the CZMA places substantive limitations upon federal activities, in contrast to the procedural, informational requirements of the National Environmental Policy Act of 1972, 42 U.S.C. 4331 et seq., the burden imposed upon the federal government by the lower court's overly broad reading of Section 307(c)(1) is both significant and unwarranted. 1. Section 307(c)(1) of the CZMA imposes consistency obligations only upon those federal actions "directly affecting the coastal zone." /10/ The decision of the court of appeals, however, subjects an OCS lease sale to the consistency provisions of Section 307(c)(1) notwithstanding the fact that any impact of the sale on California's coastal zone is speculative, remote, and subject to further consistency review under Section 307(c)(3) of the Act. The court, in short, has accorded no meaning to the statutory term "directly." Instead, the court has made its own perceptions of public policy "determinative of the outcome" (Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 220 (1980)), in apparent disregard of the statute actually enacted by Congress. While courts are not "'at liberty to imply a condition which is opposed to the explicit terms of (a) statute,'" neither are they free to delete a condition from the explicit terms of a statute, for to do so "'is not to construe the Act but to amend it.'" Fedorenko v. United States, 449 U.S. 490, 513 (1981), quoting Detroit Trust Co. v. The Thomas Barlum, 293 U.S. 21, 38 (1934). The court of appeals' construction of Section 307(c)(1) does not comport with the plain terms of the statute, its legislative history, or a functional analysis of its operation. Although the district court dismissed the government's appeal to plain meaning as a "subterfuge" (App. B, infra, 59a) and the court of appeals eschewed any "narrow definition" (App. A, infra, 13a) of the statute before it, the fact remains that the conventional construction of the term "directly" is at odds with the conclusion of both courts. "The word 'direct' implies that the activity or condition invoked or blamed shall operate proximately -- not mediately, remotely, or collaterally -- to produce the effect." Carter v. Carter Coal Co., 298 U.S. 238, 307 (1936). See also Webster's Third New International Dictionary, (3d ed. unabridged 1971) ("without any intervening agency or instrumentality of a determining influence"). Far from having a proximate impact on the coastal zone, an OCS lease sale is "only a preliminary and relatively self-contained stage within an overall oil and gas development program which requires substantive approval and review prior to * * * each (successive stage)." North Slope Borough v. Andrus, 642 F.2d 589, (D.C. Cir. 1980). While the possible impacts of oil exploration and production may be hypothesized at the lease sale stage of the OCS development process, these potential effects are remote in time from the OCS lease sale, depend upon the discovery of oil or gas on the lease site, and are preceded by a federal review procedure that includes a CZMA consistency determination. 16 U.S.C. (Supp. V) 1456(c)(3)(B); 43 U.S.C. (Supp. IV) 1351. The effects of an OCS lease sale on the coastal zone, including the ones noted by the courts below (App. A, infra, 12a-13a; App. B, infra, 62a-65a), are clearly "indirect." /11/ Thus, the plain import of the term "directly" requires reversal of the court of appeals. The legislative history of Section 307(c)(1) also contradicts the court of appeals' conclusion that the statute applies to an OCS lease sale because of the possible future effects of oil exploration and production. When the CZMA was originally drafted in 1972, there was substantial disagreement whether federal property physically located in the coastal zone -- such as parks and military installations -- should be subject to state coastal zone management programs. /12/ The Conference Committee created a compromise provision: it excluded federal lands from inclusion in the actual coastal zone but provided that consistency would be required for activities conducted on federal lands that "directly affect" the coastal zone. See H.R. Rep. No. 92-1544, 92d Cong., 2d Sess. 12 (1972). The term "directly affecting" the coastal zone, therefore, was created to serve a limiting function: to identify those federal activities that would be subject to the consistency requirements of Section 307(c)(1) while at the same time excluding other activities from the operation of the Act. /13/ The lower court's contrary conclusion (App. A, infra, 14a) that the term was designed by Congress to expand the consistency requirements of the Act is unsupported by the legislative history. /14/ Finally, the court of appeals' expansive interpretation of "directly affecting" cannot be reconciled with a functional analysis of how Congress intended the CZMA to operate. In Section 307(a) and (b) of the Act, 16 U.S.C. 1456(a), (b), Congress directed the Secretary of Commerce to coordinate his administration of the CZMA "with other interested federal agencies" and to refrain from approving a state program until the views of the federal agencies principally affected by a proposed management program "have been adequately considered." Through this process, Congress anticipated that any aspect of a state's coastal zone program that was deemed to be impracticable by federal agencies would be "iron(ed) out" prior to approval. H.R. Rep. No. 92-1049, 94th Cong., 2d Sess. 19 (1972). This federal agency pre-approval review process is vital because, once a state management plan is approved by the Secretary of Commerce, the consistency provisions of Section 307(c)(1) apply to federal actions that directly affect the coastal zone. The court of appeals' abandonment of the term "directly" in Section 307(c)(1) undermines this carefully designed congressional scheme. A federal agency cannot intelligently assess a proposed state management plan unless it knows which of its activities will be implicated by the state program. Section 307(c)(1) provides the agency with an important guidepost: a state management program will affect those activities that have a clear, immediate and identifiable impact on the coastal zone. The lower courts' deletion of the term "directly" from Section 307(c)(1), however, effectively eliminates this guidance. Henceforth, a federal activity will come within a state coastal management plan so long as a possible impact on the coastal zone can be hypothesized. /15/ Under the lower courts' approach, such a broad range of federal activities fall within Section 307(c)(1) that any "ironing out" of federal/state disagreements on future state management plans may well be impossible. The decision, furthermore, renders past federal agency input into approved management programs largely superfluous: the examining agencies clearly did not assume that a proposed state plan would control any federal activity possessing a foreseeable, albeit tenuous, link to the coastal zone. Unless the Court restores the term "directly" to Section 307(c)(1) of the CZMA, many federal activities not previously considered at the pre-approval stage will suddenly become subject to the consistency requirements of the Act. 2. The decision of the court of appeals disregards not only the plain language of Section 307(c)(1) of the CZMA, but a carefully designed congressional scheme for development of OCS resources as well. The outer continental shelf oil and gas development process is a controversial program with broad significance for the nation's economy, environment, foreign relations and tax revenues. Accordingly, Congress has devoted considerable attention to devising a balanced, yet effective, statutory structure for the program. See, e.g., OCSLA Amendments of 1978, Pub. L. No. 95-372, 92 Stat. 632. As part of that effort, Congress has expressly integrated the consistency requirements of the CZMA into the OCS oil and gas development process. The court of appeals' decision, however ignores this congressional prescription for application of the CZMA and works to undermine the effectiveness of the 1978 Amendments to the OCSLA. a. In 1978, the Outer Continental Shelf Lands Act was substantially rewritten by Congress to balance environmental protection with promotion of "the swift, orderly and efficient exploitation of our almost untapped domestic oil and gas resources in the Outer Continental Shelf." Watt v. Energy Action Educational Foundation, 454 U.S. 151, 154 n.2 (1981). In that measure, Congress recognized that the OCS oil and gas program is a unique federal undertaking because neither the government, the industry, nor the states can determine, at the outset, what actual oil and gas production activities (such as the placement of platforms and pipelines or the utilization of tankers) will eventually take place on the OCS. Unlike a dam, road, or waterway project, the final contours of the completed activity cannot be predicted until the leasing and exploration processes are well under way. Plainly put, the ultimate effects of issuing an OCS oil and gas lease depend not upon the contours of the lease sale but on the type, quantity and location of commercially valuable hydrocarbon resources discovered through exploration. Accordingly, Congress created a unique federal decisionmaking regime by dividing the OCS process into separate and discrete stages. Under this system of phased decisionmaking, the initial determination to authorize oil and gas activity on a tract in the OCS, by offering it at a lease sale, can be modified or reversed at the later exploration or development and production stages. The final House Report on the 1978 Amendments explained the purpose behind prescribing this staged method of federal decisionmaking (H.R. Rep. No. 95-590, 95th Cong., 1st Sess. 164 (1977)): Section 25 is intended to provide the mechanism for review and evaluation of, and decision on, development and production in a leased area, after consultation and coordination with all affected parties. The committee considers this one of the most important provisions of the 1977 amendments. It provides a means to separate the Federal decision to allow private industry to explore for oil and gas from the Federal decision to allow development and production to proceed if the lessee finds oil and gas. The failure to have such a mechanism in the past has led to extensive litigation prior to lease sales, when onshore and environmental impacts of production activity are not yet known. In fact, the failure to have this procedure has led, in part, at least one court to invalidate an entire lease sale. Thus, Congress dealt with the problem of incomplete information regarding OCS resources and the "onshore and environmental impacts of production activity" by altering the structure of federal decisionmaking. Rather than confronting every possible question regarding production at the lease sale stage, decisions would be made at later, specifically identified stages, when the maximum amount of information would be available. Under the amended OCSLA, a lease does not authorize the lessee to explore, develop or produce oil or gas. To engage in these activities, the lessee must seek separate federal approvals, first to explore for oil and gas and later to develop and produce the resource. 43 U.S.C. (Supp. IV) 1340, 1351. As restricted by the OCSLA, a lease is a property interest that only entitles the holder to conduct certain preliminary surveys prior to submitting an exploration plan for approval (43 U.S.C. (Supp. IV) 1340(c)(1); 30 C.F.R. 250.34-1). The "direct" effects of a lease sale, therefore, are extremely limited, and do not include the effects of potential exploration, development and production activities for which the lessee may eventually obtain approval. /16/ b. The task of integrating the CZMA's consistency requirements into this unique decisionmaking process is not difficult, inasmuch as Congress has addressed the matter explicitly. In 1974, parallel to the efforts to amend the OCSLA to respond to the energy crisis, Congress initiated efforts to amend the CZMA to accommodate energy related activities, including expedited OCS oil and gas leasing. At the outset of this amendatory process, there was disagreement over whether the term "license or permit" in Section 307(c)(3) of the CZMA, 16 U.S.C. 1456(c)(3), covered leases under the OCSLA. S. Rep. No. 94-277, 94th Cong., 1st Sess. 19 (1975). To clarify this matter, bills reported out of committees in both the House and the Senate proposed inserting the term "lease" into Section 307(c)(3), 16 U.S.C. 1456(c)(3). Addition of the term "lease" to Section 307(c)(3) would mean: (I)n practical terms, * * * that the Secretary of the Interior would need to seek the certification of consistency from adjacent State governors before entering into a binding lease agreement with private oil companies. S. Rep. No. 94-277, 94th Cong., 1st Sess. 19-20 (1975). The Executive Branch, however, opposed this proposed amendment on the same ground that eventually persuaded Congress to amend the OCSLA: lack of information at the lease sale stage. An official of the Department of the Interior testified (Coastal Zone Management: Hearings on H.R. 1776, H.R. 2928, H.R. 3124, et al., Before the Subcomm. on Oceanography of House Comm. on Merchant Marine and Fisheries, 94th Cong., 1st Sess. 204 (1975) (statement of Royston C. Hughes, Assistant Secretary of the Interior)): Our concern is that people may construe this as a requirement that the lease applicant prove Federal consistency before he is physically able to do it. If he does not know what he is going to find out there and he has no way of quantifying what he intends to bring ashore, there may be, if this requirement is placed in amendment to the Coastal Zone Management Act, a legal bar to us issuing a lease. It is like a chicken-and-egg situation, from our point of view. Throughout this debate, the focus of attention rested solely on whether the consistency procedures of Section 307(c)(3) should apply at the leasing stage. No one suggested that the proposed amendment would be redundant because Section 307(c)(1) already required such a consistency determination. Although the amendment as proposed passed the Senate, it was deleted by the House. 122 Cong. Rec. 6128 (1976). The expressed purpose for this floor action was to permit the conference committee to study the impact of the amendment. Ibid. At conference, the committee did not restore the deleted amendment; instead it created a new subsection of Section 307(c)(3) that required lessees seeking federal approval of exploration, development and production plans to first comply with CZMA consistency certification requirements. Section 307(c)(3)(B), 16 U.S.C. (Supp. V) 1456(c)(3)(B). The Conference Report explained (S. Conf. Rep. No. 94-987, 94th Cong., 2d Sess. 30 (1976); H.R. Rep. No. 94-1298, 94th Cong., 2d Sess. 30 (1976)): The conference substitute * * * specifically applies the consistency requirement to the basic steps in the OCS leasing process -- namely, the exploration, development and production plans submitted to the Secretary of the Interior. This provision will satisfy state needs for complete information, on a timely basis, about the details of the oil industry's offshore plans. The conference substitute was enacted by Congress and this special consistency provision for oil and gas leases on the OCS, 16 U.S.C. 1456(c)(3)(B), was subsequently integrated into the 1978 Amendments to the OSCLA. 43 U.S.C. (Supp. IV) 1340(c)(2), 1351(d). The 1976 Amendments to the CZMA and the 1978 Amendments to the OCSLA thus represent a congressional repudiation of the court of appeals' conclusion that all the potential effects of OCS lease sales are subject to CZMA consistency review at the lease sale stage. Like most who first encounter the issue, the congressional committees in 1976 initially thought that consistency review at the OCS leasing stage was desirable. But, when acquainted with the practical consequences of such a requirement and the impossibility of satisfying it in a meaningful manner, Congress ultimately rejected that approach. Instead, it substituted special consistency requirements specifically designed to mesh with the structure of the OCS decisionmaking process. 16 U.S.C. (Supp. V) 1456(c)(3)(B); 43 U.S.C. (Supp. IV) 1340(c)(2), 1351(d). By expansively defining "directly affecting the coastal zone" and requiring a consistency determination at the leasing stage for potential OCS exploration, development and production activities, the court of appeals has adopted an approach that Congress expressly considered and rejected. The lower court's construction of Section 307(c)(1) is clearly a "creature of judicial cloth, not legislative cloth." Weinberger v. Catholic Action, 454 U.S. 139, 141 (1981). 3. The decision of the court of appeals will severely hamper congressionally mandated development of the nation's oil and gas reserves on the outer continental shelf. Congress carefully amended the OCSLA in 1978 to provide for "expedited exploration and development of the Outer Continental Shelf * * *." 43 U.S.C. (Supp. IV) 1802(1). See Watt v. Energy Action Educational Foundation, supra, 454 U.S. at 154 n.2. One of the prime goals of the 1978 Amendments to the OCSLA was to avoid "extensive litigation prior to lease sales." H.R. Rep. No. 95-590, 95th Cong., 1st Sess. 164 (1977). By reducing the scope and consequences of the decision to issue an OCS lease, Congress sought to avoid the major cause of delay in the OCS process: injunctive litigation over lease sales. Ibid. /17/ The decision below, however, undermines this congressional objective and actually invites litigation at the lease sale stage. The court of appeals' broad reading of Section 307(c)(1) will prompt an increase in OCS litigation for at least two reasons. First, by imposing a consistency requirement on potential exploration, development and production activities at the lease sale stage, the opinion forces substantive decisions to be made prematurely, when adequate information is not available to support a reasoned choice. Such federal decisions can be expected to be prime targets for the opponents of OCS lease sales. /18/ Second, the Ninth Circuit's suggestions concerning a standard for consistency at the leasing stage are inherently vague. The court stated that "Interior * * * must set the leasing, development, and production activities on a path that is consistent with the state plan to the maximum extent practicable in the light of the then available knowledge" (App. A, infra, 22a). But the court confessed that it was unable to "delineate()" when the appropriate degree of consistency would be achieved for a particular lease sale (ibid.). While it prescribed a "path" to eventual consistency, it refused to provide a "verbal formula()" to test the adequacy of the government's efforts at the lease sale stage (ibid.). Instead, the court suggested that each OCS lease sale would have to be examined on a case-by-case basis (ibid.). This case-by-case approach will stall the OCS oil and gas leasing process for years while the states and the federal government litigate the procedural adequacy and substantive content of discrete lease sale consistency determinations. /19/ 4. In addition to hampering the OCS oil and gas leasing process, the court of appeals' expansive definition of "directly affecting the coastal zone" may severely disrupt a wide range of federal activities. As explained above (page 12, supra), Congress assumed that federal objections to state coastal zone management programs would be resolved prior to program approval by the Secretary of Commerce. Twenty-eight programs of state or territorial governments have now been approved, and federal agencies, including the Department of Defense, are obligated to conduct any activities "directly affecting the coastal zone" in a manner that is consistent "to the maximum extent practicable" with those programs. /20/ 16 U.S.C. 1456(c)(1). The court of appeals' conclusion that a mere indirect influence on the coastal zone satisfies the "directly affecting" threshold test subjects a wide range of federal actions and programs to the substantive limitations of Section 307(c)(1). /21/ The court's expansive reading of "directly affecting the coastal zone," therefore, extends the reach of the CZMA far beyond what was contemplated when the Act was passed or the state programs were approved. The court of appeals' wholesale use of the environmental impacts disclosed by Lease Sale No. 53's environmental impact statement (EIS) in identifying direct effects under Section 307(c)(1) of the CZMA is particularly disturbing. Under the National Environmental Policy Act of 1969, a federal agency preparing an EIS must address both the direct and the indirect effects of its proposed action upon the environment. /22/ By treating all of the potential coastal zone effects identified in an impact statement as direct effects for CZMA purposes, the lower courts have obliterated the difference between a direct and an indirect effect. In terms of complying with NEPA, the distinction between the two types of effects may not be significant, but for CZMA purposes the difference is vital. The consistency requirement of the CZMA imposes a substantive limitation on federal activities. NEPA, in contrast, has a fundamentally procedural, informative purpose, and does not prescribe the substantive content of federal decisions. See Strycker's Bay Neighborhood Council v. Karlen, 444 U.S. 223 (1980). By employing the table of contents of an EIS to determine the "direct effects" upon the coastal zone, and reading the word "directly" out of Section 307(c)(1) of the CZMA, the court has transformed the procedural obligations of NEPA into a substantive limitation on federal action. This result invites chaos for the activities of the federal government as a whole. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. REX E. LEE Solicitor General CAROL E. DINKINS Assistant Attorney General LOUIS F. CLAIBORNE Deputy Solicitor General RICHARD G. WILKINS Assistant to the Solicitor General PETER R. STEENLAND, JR. ANNE S. ALMY Attorneys FEBRUARY 1983 /1/ Under the Act, the coastal zone includes coastal waters and adjacent shorelands with the exception of federal property. The zone extends seaward to the outer limit of United States territorial waters, normally three geographical miles from the coastline. 16 U.S.C. 1453(1). The outer continental shelf, by definition, lies outside the coastal zone and beyond the belt conceded to the states by the Submerged Lands Act of 1953. 43 U.S.C. 1301(a)-(b), 1331(a). In the case of California, like all other states bordering on the Pacific or Atlantic Oceans, the "coastal zone," like the Submerged Lands Act grant, extends three geographical miles seaward from the coastline. 43 U.S.C. 1301(b). See United States v. California, 381 U.S. 139 (1965). /2/ Some provisions of the OCSLA apply throughout all stages of the OCS development process. Regulations promulgated pursuant to 43 U.S.C. (Supp. IV) 1334(a)(1)(B) provide for suspension or temporary prohibition of all OCS operations if "there is a threat of serious, irreparable or immediate harm" to life or the environment. 30 C.F.R. 250.12(a)(1)(ii). The regulations also provide for cancellation of leases if such dangers cannot be resolved. 43 U.S.C. (Supp. IV) 1334(a)(2); 30 C.F.R. 250.12(d)(4). /3/ The Secretary will disapprove a development and production plan if exceptional geological conditions, marine or coastal resource values, or other exceptional circumstances dictate disapproval despite compliance with the OCSLA and its implementing regulations. 43 U.S.C. (Supp. IV) 1351(h)(1)(D). /4/ The Governor of California had previously recommended pursuant to Section 19 of the OCSLA, 43 U.S.C. (Supp. IV) 1345, that certain northern tracts in the Santa Maria Basin be excluded from the sale because they are "directly seaward of the habitat, breeding, and food supply areas of the Southern Sea Otter." C.R. 85; A.R. 224w, at 2 ("C.R." refers to the Clerk's Record, "A.R." refers to the Administrative Record.) The Secretary of the Interior determined to lease the entire Santa Maria Basin, despite the Governor's objections, "based on a finding of overriding national interest" (App. A, infra, 11a; 43 U.S.C. (Supp. IV) 1345(c)). The Fish and Wildlife Service, under Section 7 of the Endangered Species Act of 1973, 16 U.S.C. (Supp. V) 1536, had concluded earlier that the sale of the disputed tracts would not "jeopardize the continued existence of the sea otter" (C.R. 85, attachment to A.R. 204w at 13). /5/ In addition, California's and the environmental groups' complaints claimed violations of the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., Section 19 of the OCSLA, 43 U.S.C. (Supp. IV) 1345; the Endangered Species Act of 1973, 16 U.S.C. 1331 et seq., and the Marine Mammal Protection Act of 1972, 16 U.S.C. (Supp. V) 1361 et seq. The district court resolved these issues in the government's favor (App. B, infra, 65a-78a). The court of appeals affirmed (App. A, infra, 25a-30a). /6/ The district court had previously entered a preliminary injunction that barred the Department of the Interior from accepting bids on the challenged tracts, although the court permitted the bids to be received and opened on May 28, 1981. Bids totalling approximately $220,000,000 were received on 19 of the challenged tracts in the Santa Maria Basin. /7/ The district court ruled that the environmental organizations "had no implied right of action to bring claims under the CZMA" (App. A, infra, 30a). On appeal, the court of appeals reversed, holding that such organizations had standing under Section 10 of the Administrative Procedure Act, 5 U.S.C. 702 (App. A, infra, at 31a). We do not raise standing as a separate issue in this petition because, as to this lease sale, the claims of the state and the environmental groups coincide. Because the state clearly has standing to pursue these issues, no live standing issue is presented. See Watt v. Energy Action Educational Foundation, 454 U.S. 151, 160 (1981). We reserve the right to challenge the standing of non-governmental entities, including environmental organizations, in future CZMA cases. /8/ The district court's injunction also declared that the bids received on the disputed tracts were "null and void" (App. B., infra, 80a). The injunction was stayed pending appeal, and was ultimately modified by the court of appeals. As modified, the portion of the district court's order that voids the bids on the disputed tracts is stayed pending the preparation of a consistency determination by the Secretary of the Interior (App. A, infra, 24a). /9/ The court of appeals held that the Secretary of the Interior must prepare a consistency determination for Lease Sale No. 53 (App. A, infra, 24a). The court declared, however, that federal activities directly affecting the coastal zone need not be "as consistent with (a state) plan as is possible" (App. A, infra, 19a) (emphasis in original). Rather, the Secretary "must set the leasing, development, and production activities on a path that is consistent with the state plan to the maximum extent practicable in light of the then available knowledge" (id. at 22a). /10/ Congress prescribed two discrete thresholds for the consistency limitations contained in Section 307(c) of the CZMA. Applicants for federal licenses or permits must comply with the consistency obligations of the Act if they are "to conduct an activity affecting" the state's coastal zone (16 U.S.C. 1456(c)(3)(A)). In contrast, the consistency obligations of the federal government are triggered only when government activities "directly affect ( )" the coastal zone (Section 1456(c)(1)). Congress presumably intended that the term "directly affecting" in Section 307(c)(1) be given a different and more restrictive meaning than the "affecting" standard utilized in Section 307(c)(3). See generally, Russell v. Law Enforcement Assistance Administration, 637 F.2d 354, 356 (5th Cir. 1981); Lankford v. Law Enforcement Assistance Administration, 620 F.2d 35, 36 (4th Cir. 1980); cf. FTC v. Simplicity Pattern Co., 360 U.S. 55 (1959). But, whatever the scope of the "affecting" standard in Section 307(c)(3) -- an issue not presented here -- it is clear that Congress pointedly qualified the trigger for consistency determinations in case of governmental activities by adding the word "directly" in Section 307(c)(1). /11/ This conclusion comports with regulatory language developed under the National Environmental Policy Act of 1969. NEPA regulations define "direct effects" as those "which are caused by the action and occur at the same place and time," while "indirect effects" are those "reasonably foreseeable" effects that are "caused by the action" but "are later in time or farther removed in distance." 40 C.F.R. 1508.8. See page 21, infra. /12/ The bill passed by the Senate defined the "coastal zone" as excluding federal property. See S. Rep. No. 92-753, 92d Cong., 2d Sess. 8-9, 45 (1972). The House bill, however, included federal property within the definition of "coastal zone." See H.R. Rep. No. 92-1049, 92d Cong., 2d Sess. 2 (1972). Both bills imposed consistency requirements only on federal activities "in" the coastal zone (H.R. Rep. No. 92-1049, supra, at 5; S. Rep. No. 92-753, supra, at 54). Thus, the House bill would have required consistency for all federal activities on government lands physically located in the coastal zone; the Senate bill would have exempted government activities on federal lands from such a requirement. /13/ The "directly affecting" threshold of Section 307(c)(1) was clearly designed to limit the consistency obligations of the federal government for activities conducted on federal lands within the confines of a state's coastal zone. A fortiori, the standard limits the consistency obligations of the government for activities -- such as OCS oil and gas leasing -- that take place outside the coastal zone. /14/ The only legislative support for the court of appeals' expansive interpretation of Section 307(c)(1) is derived from post-enactment statements contained in House and Senate Committee Reports prepared in connection with the 1980 Amendments to the CZMA. H.R. Rep. No. 96-1012, 96th Cong., 2d Sess. 34 (1980); S. Rep. No. 96-783, 96th Cong., 2d Sess. 10 (1980). Both reports, in nearly identical language, suggest that the Commerce Department adopt an expansive definition of "activities directly affecting the coastal zone." The 1980 Amendments to the CZMA, however, did not address -- through enactment or amendment -- any of the consistency provisions of the CZMA. These statements, therefore, are entitled to little weight. CPSC v. GTE Sylvania, Inc., 447 U.S. 102, 118 n.13 (1980); County of Washington v. Gunther, 452 U.S. 161, 176 n.16 (1981); United States v. Clark, 445 U.S. 23, 33 n.9 (1980); Oscar Mayer & Co. v. Evans, 441 U.S. 750, 758 (1979). Moreover, when the chairman of the House subcommittee was queried about the language of the pending 1980 report on the floor of the House, he replied that it was not intended to "modify the term directly affecting." 126 Cong. Rec. H10111-H10112 (daily ed. Sept. 30, 1980). /15/ See note 21, infra, pages 20-21. /16/ Other courts have recognized the limited nature of the lease sale decision, and have accordingly molded the obligations of other generally applicable procedural and substantive federal laws to the OCS process. County of Suffolk v. Secretary of the Interior, 562 F.2d 1368 (2d Cir. 1977), cert. denied, 434 U.S. 1064 (1978) (NEPA); North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir. 1980) (Endangered Species Act); Conservation Law Foundation v. Andrus, 623 F.2d 712 (1st Cir. 1979) (NEPA). As the District of Columbia Circuit noted, "(m) andatory stage-by-stage review prevents the telescoping of any and every projected hazard to * * * the environment into one overwhelming statutory obstacle. The OCSLA standards are not less strict, they simply rely more on achieving compliance than on exacting proscription." North Slope Borough v. Andrus, supra, 642 F.2d at 609. /17/ In recent years, suits to enjoin OCS lease sales have been filed by the States of Alaska, California, Maine, Massachusetts, New Jersey, New York, and North Carolina. California alone has initiated litigation against five of the last six OCS sales off its coast. Even after enactment of the 1978 Amendments to the OCSLA, Congress noted that litigation was a major obstacle to expeditious oil and gas development on the OCS (H.R. Rep. No. 95-1835, 95th Cong., 2d Sess. 20 (1979)): Most agree that the main reason for delays in OCS development have been the lawsuits which even when successful (for the federal government) have led to extensive stays of activities. /18/ Since the decision below, two other courts have issued injunctions against OCS lease sales pending the preparation of consistency determinations. California v. Watt, No. 82-2284 (CHH) (GH) (C.D. Cal. June 9, 1982); Governor Thomas Kean v. Watt, No. 82-2420 (D. N.J. Oct. 8, 1982). Many of the upcoming OCS lease sales are adjacent to states within the Ninth Circuit. Therefore, the Department of the Interior will prepare consistency determinations for all sales scheduled to be held prior to this court's disposition of this case. States that have already received such consistency determinations have disputed the conclusions and the adequacy of the analysis contained in the statements. Letter from James Souby (State of Alaska) dated December 30, 1982, regarding Sale 57 (Norton Sound); Letter from James Hoyte (Commonwealth of Massachusetts) dated January 17, 1983, regarding Sale 52 (Georges Bank). /19/ The Ninth Circuit apparently sought to alleviate the inevitable litigation delays engendered by its decision by providing a role for the Secretary of Commerce in the Section 307(c)(1) consistency process. The court concluded that the Secretary of Commerce was authorized to mediate a resolution of opposing viewpoints (App. A, infra, 23a). Despite the absence of a national interest override provision in Section 307(c)(1), the court suggested that the Secretary could "reconcile the paramountcy of the national interest with the concerns of the state" according to "those procedures explicitly set forth in subsections (307((c)(3) and (h)" (ibid.). Existing regulations, however, clearly state that mediation of disputes by the Secretary of Commerce is wholly voluntary and the states are free to seek relief in the courts without resorting to mediation. 15 C.F.R. 930.43; 930.116. Moreover, even if the Secretary of Commerce did possess some binding decisionmaking power, his ruling may well be subject to judicial review as final agency action under the Administrative Procedure Act, 5 U.S.C. 701 et seq. /20/ By statute, a coastal state is any state bordering the Atlantic, Pacific, or Arctic Oceans, the Gulf of Mexico, Long Island Sound, or the Great Lakes. 16 U.S.C. (Supp. V) 1453(4). /21/ By holding (App. A, infra, 13a) that a direct effect upon the coastal zone exists whenever a federal agency set in motion a chain of events that may lead to impacts on the coastal zone, the Ninth Circuit has adopted a test that requires consistency for federal activities having no identifiable, immediate, or clear relationship with a coastal zone. Virtually any tenuous connection between a decision to authorize a federal activity and a subsequent potential impact on the coastal zone could qualify as a direct effect under the court's definition. If consistency with the oil pipeline provisions of a coastal state's management plan is required before an OCS lease sale can be held, consistency might also be required for a federal coal lease sale in Wyoming. There, the "direct effect" upon the coastal zone would be the possibility that a lessee might use a proposed slurry pipeline to transport coal to a Gulf Coast port. In neither case does the initial federal decision have an immediate impact upon a coastal zone. But, as reasoned by the Ninth Circuit, each activity does set in motion a chain of events that may impact the coastal zone. /22/ The regulations define the term "effects" to include: (a) Direct effects, which are caused by the action and occur at the same time and place. (b) Indirect effects, which are caused by the action and are later in time or farther removed in distance, but are still reasonably forseeable. * * * 40 C.F.R. 1508.1. Appendix Omitted