STATE OF CALIFORNIA, ET AL., CROSS-PETITIONERS V. JAMES G. WATT, ET AL. No. 82-1511 In the Supreme Court of the United States October Term, 1983 On Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit Brief for the Federal Cross-Respondents TABLE OF CONTENTS Opinions below Jurisdiction Statutes Involved Statement Summary of argument Argument: I. The Court of Appeals properly addressed the meaning of the statutory phrase "To the maximum extent practicable" in formulating an appropriate remedy in this case II. The Ninth Circuit's construction of consistency "To the maximum extent practicable" is the necessary result of its erroneous deletion of Section 307(c)(1)'s "Directly affecting" threshold Conclusion OPINIONS BELOW The opinion of the court of appeals (Pet. App. 1a-33a) /1/ is reported at 683 F.2d 1253. The opinion of the district court (Pet. App. 34a-78a) is reported at 520 F.Supp. 1359. JURISDICTION The judgment of the court of appeals was entered on August 12, 1982 (Pet. App. 82a). A timely petition for rehearing was denied on November 10, 1982 (Pet. App. 83a). Two petitions for a writ of certiorari were filed on February 8, 1983 (James G. Watt v. State of California, No. 82-1326; Western Oil & Gas Association v. State of California, No. 82-1327), and were granted on May 16, 1983 (J.A. 156, 157). The present conditional cross-petition for a writ of certiorari was filed on March 11, 1983, and granted on May 16, 1983 (J.A. 158). The jurisdiction of this Court rests on 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), provides (Pet. App. 84a): 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. V) 1331 et seq., are reprinted at Pet. App. 87a-99a. QUESTIONS PRESENTED 1. Whether, in reviewing the district court's remedial decree, the court of appeals properly addressed the meaning of the phrase "to the maximum extent practicable," as used in Section 307(c)(1) of the Coastal Zone Management Act of 1972, 16 U.S.C. 1456(c)(1). 2. Whether, if Section 307(c)(1) is applicable at all to the oil and gas lease offerings at issue here, the court of appeals correctly held that the requirement of consistency with an approved State coastal zone management plan "to the maximum extent practicable," in the present context, neither mandates absolute consistency nor permits the State to make the final determination. STATEMENT On April 29, 1981, the State of California filed suit seeking to enjoin the Secretary of the Interior from offering 29 tracts for lease at an outer continental shelf ("OCS") lease sale scheduled to be held on May 28, 1981 (J.A. 12-34). /2/ The complaint filed by the State did not simply seek a determination that the lease sale was an activity "directly affecting" the coastal zone within the meaning of Section 307(c)(1) of the Coastal Zone Management Act ("CZMA"), 16 U.S.C 1456(c)(1), but rather sought to delete the 29 challenged tracts from the sale. The State requested the district court to order the Secretary to "conduct" a consistency determination, and "to retain jurisdiction * * * until the consistency determination has been made and the Coastal Commission concurs in the determination" (J.A. 26). The price of that concurrence was specifically stated: "The Coastal Commission has informed the Department (of the Interior) that the deletion of (29) tracts in the northern portion of the Santa Maria Basin is necessary for the leasing of the basin to be consistent with the California Management Plan" (ibid.). The district court subsequently granted cross-petitioners' motion for summary judgment on the CZMA issue (Pet. App. 79a-81a), and the relief granted by the district court went far beyond the declaration that OCS Lease Sale No. 53 met the "directly affecting" threshold test set forth in Section 307(c)(1) of the Act. /3/ The court's final order voided the proffered bids on the contested tracts, ordered the monies submitted to be returned, and enjoined the Secretary from issuing leases "until such time as defendants comply with the requirements of the Coastal Zone Management Act by conducting a consistency determination on the tracts at issue and by conducting all activities on these tracts in a manner consistent with California's Coastal Management Plan." Pet. App. 80a. /4/ On appeal, the federal government asserted that OCS Lease Sale No. 53 did not fall within the plain terms of Section 307(c)(1) of the CZMA. See 82-1326 Pet. Br. I, 16. The government also challenged the relief ordered by the district court on two grounds. First, we argued that the portion of the district court's order voiding the bids was excessive because, by effectively precluding preparation of a consistency determination for the contested tracts, the order offered no opportunity for an administrative cure of the statutory violation found by the district court (Brief for Federal Appellants at 48-49). Second, the government argued that the portion of the order that directed "that all activities" on the OCS tracts be conducted in a manner "consistent with California's Coastal Management Plan" was improper because Congress did not enact "an absolute requirement" of consistency in the CZMA (Brief for the Federal Appellants at 50, emphasis in original). Although the Ninth Circuit rejected the government's construction of Section 307(c)(1)'s threshold test, it agreed with the government's challenge to the breadth of the district court's remedial order. The court ruled that Section 307(c)(1) requires only that a federal activity "be consistent to the maximum extent practicable" with a state's coastal zone management program (Pet. App. 19a, emphasis in original), and concluded that the Executive Branch of the federal government possesses the final authority to determine whether the requisite degree of consistency exists for a federal activity, "subject, of course, to such judicial review as is appropriate" (id. at 19a). Although the appeals court could not prescribe a "verbal formula()" for consistency, it 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" (id. at 22a). Accordingly, the Ninth Circuit stayed that portion of the district court's order decalring the bids received on the contested tracts null and void, and modified the permanent injunction (Pet. App. 24a-25a). The court of appeals struck the language requiring absolute consistency with the state program because the "premise on which (the district court's order) rests appears to be that California's view of consistency ultimately will be controlling" and the court "(did) not agree with this premise" (id. at 23a). The court retained jurisdiction pending preparation of a consistency determination and the resolution of other administrative procedures (id. at 24a-25a). SUMMARY OF ARGUMENT 1. From the outset of this litigation, the federal government has claimed that OCS Lease No. 53 does not come within the terms of Section 307(c)(1) of the Coastal Zone Management Act, 16 U.S.C. 1456(c)(1), because the proposal to issue these OCS leases is not an activity "directly affecting" the coastal zone. The court of appeals disagreed with this contention, and ordered the Secretary of the Interior to determine whether the lease sale, as proposed, is consistent "to the maximum extent practicable" with California's coastal zone management program. Cross-petitioners now assert that the court of appeals erred in setting forth any standards to guide the Secretary in making that determination on remand. We first answer that argument. Although the court of appeals need not have addressed the meaning of the statutory phrase "to the maximum extent practicable" if it had agreed with the government's construction of Section 307(c)(1)'s threshold test, the court did not err in construing that language in the process of formulating an appropriate remedy in this case. While cross-petitioners assert that only the "directly affecting" portion of Section 307(c)(1) is at issue here, they did not seek a mere declaratory judgment that OCS Lease Sale No. 53 "directly affects" the coastal zone, but rather requested and received broad injunctive relief that effectively removed the OCS tracts contested by them from the sale. The court of appeals, in reviewing the remedy ordered by the district court, necessarily had to construe more than Section 307(c)(1)'s threshold trigger to assure that the district court's order fit "the necessities of the particular case." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). Unlike the district court, the court of appeals concluded that the failure to prepare a consistency determination for Lease Sale No. 53 did not void, ab initio, the bids on the contested tracts. Rather, the court of appeals remanded the matter to the Secretary of the Interior for a determination whether Lease Sale No. 53, as proposed, was consistent "to the maximum extent practicable" with the California coastal zone management plan. In these circumstances, the court of appeals properly set forth the standards and considerations that should guide the Secretary in making that determination. See Industrial Union Department v. American Petroleum Institute, 448 U.S. 607, 639-646 (1980). And, contrary to the assertions of cross-petitioners (Cr. Pet. Br. 17-20), the court of appeals' construction of "maximum extent practicable" was based on a well-developed administrative record and arose out of a hotly contested dispute between the parties; indeed, the California Coastal Commission has repeatedly claimed that Lease Sale No. 53 "is not consistent * * * to the maximum extent practicable" with its coastal management plan (J.A. 113, emphasis in original; see also id. at 73-80). The decision attacked by cross-petitioners is not, in any sense of the word, premature. The dispute between the federal government and the State of California regarding the consistency obligations imposed by Section 307(c)(1) of the CZMA has been a long standing one; since 1977 the federal government has asserted that it has met its obligations under the CZMA while California has claimed that Lease Sale No. 53 is not consistent to the maximum extent practicable with its coastal management program. Therefore, should this Court affirm the court of appeals' construction of Section 307(c)(1)'s "directly affecting" threshold, it should not further delay the outcome of this litigation by declining to construe the section as a whole. Substantial sums of money are being held in separate, interest bearing accounts pending the outcome of this litigation. The construction of the phrase "maximum extent practicable," moreover, is a question of law well suited for judicial resolution at the present time. Because the question is genuinely disputed by the parties to this litigation, and the withholding of judicial attention would unnecessarily prolong this already lengthy litigation to the detriment of all concerned, review is entirely appropriate. Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149 (1967). 2. The court of appeals' construction of "maximum extent practicable" is not, as cross-petitioners assert (Cr. Pet. Br. 22-27), illinformed judicial exegesis. The court was well aware of the administrative regulation interpreting the phrase, but recognized that its application of Section 307(c)(1) to an OCS lease sale created problems of uncertainty not contemplated by the regulation. The court, therefore, concluded that an OCS lease sale need not "be as consistent with (a state) plan as is possible," but rather "consistent to the maximum extent practicable" in light of then available knowledge (Pet. App. 19a, emphasis in original). The court also found that the federal government, not the State, has the "final authority to determine whether the required consistency exists" (ibid.). Both conclusions are correct. At the lease sale stage of the OCS oil and gas process, it is impossible to ascertain the exact outlines of future activities that may occur on the continental shelf. Because conflicts with a state management plan can always be hypothesized at this stage, the consistency obligation cannot be absolute, as cross-petitioners assert (Cr. Pet. Br. 24-26), or all OCS leasing would be precluded. The court of appeals properly found that Section 307(c)(1), as applied to an OCS lease sale, does not contemplate absolute consistency. Indeed, the "maximum extent practicable" term was inserted into Section 307(c)(1) expressly to provide "some leeway * * * with respect to activities of federal agencies in connection with approved programs." H.R. Rep. No. 92-1049, 92d Cong., 2d Sess. 20 (1972). The CZMA, furthermore, was not intended to alter the federal government's fundamental control over the natural resources on the OCS. Section 307(e), 16 U.S.C. 1456(e). To give California the final authority to determine whether the Section 307(c)(1) consistency obligation has been met in this case would give the state a potent veto over OCS decisionmaking, and would "weigh() too lightly the interests of the nation against that of a state" (Pet. App. 20a). The Ninth Circuit's construction of Section 307(c)(1) may well portend substantial difficulties in the administration of the CZMA. But this is not, as cross-petitioners assert (Cr. Pet. Br. 22-27), the result of an erroneous or premature construction of the phrase "maximum extent practicable." Once the court of appeals extended Section 307(c)(1)'s consistency obligation to the indirect, unknown and unknowable effects of an OCS lease sale, it perforce had to construe Section 307(c)(1) so that it would not present an insurmountable barrier to federal activities on the OCS. Although the court of appeals' construction of "maximum extent practicable" is correct, the interests of the states, the federal government -- and the federal courts -- would be better served by restoring the "directly affecting" threshold to Section 307(c)(1). ARGUMENT I. THE COURT OF APPEALS PROPERLY ADDRESSED THE MEANING OF THE STATUTORY PHRASE "TO THE MAXIMUM EXTENT PRACTICABLE" IN FORMULATING AN APPROPRIATE REMEDY IN THIS CASE Cross petitioners' (hereinafter "California") principal argument to the Court is that the appeals court erred in addressing the meaning of the phrase "to the maximum extent practicable" in Section 307(c)(1) of the CZMA because the legal interpretation of that phrase is not "ripe" for review (Cr. Pet. Br. 10). California's ripeness argument might have some force if the state simply had requested a declaratory judgment that OCS Lease Sale No. 53 is an activity "directly affecting" the coastal zone within the meaning of Section 307(c)(1); if California had so limited its request for relief, the only issues before the appellate court would have been the legal construction of the term "directly affecting the coastal zone" and the application of that term to the facts of OCS Lease Sale No. 53. California, however, sought more than a simple declaratory judgment -- it asked for an injunction restraining the federal defendants from leasing the contested tracts, an order requiring the Secretary to prepare a consistency determination, and retention of jurisdiction by the court until the contested tracts were removed from the sale -- i.e., until "the Coastal Commission concurs in (Interior's consistency) determination" (J.A. 26, 33). The State, in short, requested and received more than mere declaratory relief in the district court (Pet. App. 79a-81a). And, as the Ninth Circuit noted, the question whether the district court's injunctive orders were proper in scope and effect "unavoidably raises additional issues" (Pet. App. 19a). /5/ 1. The Ninth Circuit addressed the term "maximum extent practicable" not, as California would have it, to render an advisory opinion (Cr. Pet. Br. 16), but rather to determine whether the relief ordered by the district court ought to be modified to afford the Secretary of the Interior an opportunity to effect a post-sale cure (Pet. App. 23a-25a). Unlike the district court, the court of appeals concluded that the sale of the disputed tracts should not be voided prior to granting the Secretary the opportunity to comply with Section 307(c)(1), as construed by the court. "(D)rastic measures," the court reasoned, "should be deferred at least until it is finally decided whether Lease Sale 53 can go forward in its present form" (Pet. App. 24a). The court of appeals' construction of "maximum extent practicable," therefore, was plainly not unwonted judicial exegesis, but was required "to mould (the) decree to the necessities of the particular case." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). In the present case, the court of appeals was faced with two principal questions in analyzing the propriety of the district court's broad remedial order: first, what standard of consistency is applicable to an OCS lease sale, and second, which government -- state or federal -- has final authority over OCS oil and gas activities. Indeed, whether or not a post-judgment administrative cure could be effected in this case turns on these two issues. /6/ Both of these issues, of such importance to the issuance of the remedial decree in this case, necessarily hinge upon the construction of the phrase "to the maximum extent practicable," for that phrase controls the consistency obligations as well as the decisional authority of the federal government. As we detail in Part II of this brief, the court of appeals' resolution of these issues is correct. But, regardless of the validity of the Ninth Circuit's substantive construction of "maximum extent practicable," the appellate court examined the phrase, not to render premature advice, but "to arrive at a 'nice adjustment and reconciliation'" in formulating the equitable decree in this case. Weinberger v. Romero-Barcelo, supra, 456 U.S. at 312. 2. Despite the necessity of (1) establishing appropriate standards for OCS lease sale consistency and (2) resolving whether the State's views on consistency will be controlling prior to formulating any remedy in this case, California and its supporters protest that the Ninth Circuit should not have examined such questions because there is no administrative record and no actual dispute between the parties on those issues (Cr. Pet. Br. 17-20). There is, of course, an ample administrative record concerning the facts and circumstances of OCS Sale No. 53 and the considerations informing the decision to offer the challenged tracts at the lease sale. /7/ See 82-1326 Pet. Br. 9-14. That record, moreover, specifically includes the resolutions of the California Coastal Commission that disapprove offering the disputed tracts for lease (J.A. 73-80; 109-132). California can hardly claim that the "maximum extent practicable" phrase is extraneous to the outcome of this litigation when its own coastal commission resolved that "even if Interior issues a determination of consistency * * * , (Lease Sale No. 53) is not consistent with the CCMP to the maximum extent practicable" (id. at 112-113), and the State's complaint sought an injunction preventing leasing of the disputed tracts "until the consistency determination has been made and the Coastal Commission concurs in the determination" (J.A. 26). There is, therefore, a clear dispute between the parties on the meaning of "maximum extent practicable," and the only "factual" omissions in the administrative record are an actual consistency determination and whatever response the State would formulate to that determination. See 15 C.F.R. 930.34, 930.39, 930.42. /8/ These omissions might be significant if the Ninth Circuit had attempted to determine whether OCS Lease Sale No. 53 could proceed in its present form. /9/ The appellate court, however, did not attempt to determine whether leasing the contested tracts would be consistent "to the maximum extent practicable" with California's coastal zone management program (Pet. App. 24a). Instead, the court set out a standard for consistency for an OCS lease sale, listed the relevant factors that the Secretary should consider in making his inquiry, and remanded the matter to the Secretary for preparation of a consistency determination (Pet. App. 22a). The federal courts of appeals commonly set such standards in remanding cases to federal agencies for further analysis and documentation, /10/ and the decisions of this Court are not to the contrary. Indeed, in Industrial Union Department v. American Petroleum Institute, 448 U.S. 607, 640 (1980), relied upon by California (Cr. Pet. Br. 16), the Court did not, as California suggests is proper, remand the case immediately upon finding that the Secretary of Labor "did not make the required threshold finding" that a health and safety standard was reasonably necessary and appropriate under Section 3(8) of the Occupational Safety and Health Act, 29 U.S.C. 652(8). Rather, the plurality opinion of the Court described in some detail the standards and considerations the Secretary should weigh in making that eventual determination. 448 U.S. at 639-646. In this case, the court of appeals sought to remand the litigation for a determination by the Department of the Interior whether OCS Lease Sale No. 53 is consistent to the maximum extent practicable with California's coastal zone management plan. The court, in these circumstances, quite properly set forth standards to guide the agency it had enjoined to make the determination requested by California. The State's ripeness arguments cannot obscure the fact that its requested relief required the appellate court to survey territory that California now wishes the court had avoided. 3. California also asserts that the Ninth Circuit's prescription of a standard for consistency is premature because there may not be any actual disagreement between the parties concerning the challenged tracts and no hardship would be suffered by the parties by waiting for a dispute to develop (Cr. Pet. Br. 14-15). Interpretation of the phrase "maximum extent practicable," however, is purely a question of law, well-suited "for judicial resolution at this time" (Abbott Laboratories v. Gardner, 387 U.S. 136, 149 (1967)), and both the federal and WOGA cross-respondents are suffering continual harm by the injunctive relief entered in this case. /11/ Any prospect that the parties might agree on the propriety of leasing the challenged tracts, moreover, is remote at best. /12/ Therefore, should the Court affirm the Ninth Circuit's interpretation of Section 307(c)(1)'s "directly affecting" threshold, the Court should reach the questions challenged by California as unripe. In the end, deferral of the "maximum extent practicable" issue will merely prolong the final determination whether the contested tracts can be leased, condemning the parties to further piecemeal litigation. Cf. Abbott Laboratories v. Gardner, supra, 387 U.S. at 148-149 (ripeness doctrine not designed to prevent review of issues fit for judicial decision when withholding court consideration would create hardship). II. THE NINTH CIRCUIT'S CONSTRUCTION OF CONSISTENCY "TO THE MAXIMUM EXTENT PRACTICABLE" IS THE NECESSARY RESULT OF ITS ERRONEOUS DELETION OF SECTION 307(c)(1)'S "DIRECTLY AFFECTING" THRESHOLD Although California does not purport to attack the merits of the court of appeals' construction of "maximum extent practicable," it nevertheless presents to this Court all the arguments it previously made to the Ninth Circuit in a rehearing petition that did attack the merits of that ruling (Cr. Pet. Br. 22-27). Relying on those claims, California asserts that the appellate court "fundamentally misconceived" the meaning of the term (id. at 23). Contrary to California's contention, however, the Ninth Circuit was fully aware of the National Oceanic and Atmospheric Administration's (NOAA) regulatory definition of the term "maximum extent practicable" when it decided this case. The federal cross-respondents specifically directed the court's attention to that regulatory definition (Reply Brief for the Federal Appellants at 24) and quoted the operative language (ibid.). The court of appeals, moreover, obviously considered but rejected California's other claims when it denied the State's petition for rehearing. The appellate court's interpretation of the term, therefore, did not result from ignorance of the NOAA regulatory definition or the other matters raised by California. Instead, the court of appeals' ruling resulted from the obvious necessity of construing Section 307(c)(1) as a whole in a coherent manner once it had effectively eliminated the statute's "directly affecting" threshold. See 82-1326 Pet. Br. 20-27. The NOAA regulation defining "maximum extent practicable" requires federal actions directly affecting a coastal zone to be "fully consistent" with an approved state management program "unless compliance is prohibited based upon the requirements of existing law applicable to the Federal agency's operations." 15 C.F.R. 930.32(a). When the precise contours of a federal activity are known, this regulatory definition of "maximum extent practicable" can be readily applied to determine whether any impact of the activity on the coastal zone meets the required level of consistency. But, when the future effects of a federal activity on the coastal zone are uncertain, remote, or speculative, this regulatory definition simply offers no effective guidance. Does "fully consistent" mean that the activity cannot proceed unless there is no possibility of future inconsistency, or does the term merely require that consistency in the future can reasonably be expected or is more likely than not? Put simply, because the Ninth Circuit interpreted "directly affecting the coastal zone" to include the effects of remote, speculative and uncertain activities, it had to go beyond the regulatory definition of the term "maximum extent practicable" to deal with the problem of uncertainty. /13/ Because of the uncertainty necessarily involved in applying Section 307(c)(1)'s consistency obligation at the lease sale stage of the OCS oil and gas process, the court of appeals, as noted earlier in this brief (pages 11-12, supra), was forced to confront two important issues: (1) whether Section 307(c)(1) imposes an absolute obligation of consistency at the lease sale stage of the OCS oil and gas process, and (2) whether the state or federal government has the ultimate authority to determine if that consistency obligation has been met. The answers to both of these inquiries are inextricably intertwined and both hinge upon the proper interpretation of "maximum extent practicable" in Section 307(c)(1). After examining the structure of the CZMA, congressional intent, and the nature of the decision involved in issuing an OCS lease, the court of appeals held that an OCS lease sale "need not be configured so as to preclude any possible future inconsistency from arising as development proceeds," and similarly found that the "final authority to determine whether the required consistency exists" resides "in the Executive Branch of the federal government" (Pet. App. 19a, 22a, emphasis in original). Both conclusions are plainly correct. 1. The court of appeals correctly rejected a construction of "maximum extent practicable" that would have precluded an OCS lease sale unless there was no possibility of future inconsistency. Such a construction, favored by California (Cr. Pet. Br. 23-27), would give the states a potent veto over OCS oil and gas activities: at the lease sale stage some adverse impact inconsistent with a state management plan can always be hypothesized. But, quoting this Court's decision in Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 482 (1981), the court of appeals noted that Congress has "'assure(d) federal control over the (Outer Continental) Shelf and its resources'" (Pet. App. 21a, emphasis added). "The CZMA," the court concluded, "was not intended to change this division of control" (ibid.). Indeed, Section 307(e) of the CZMA, 16 U.S.C. 1456(e), expressly provides that "(n)othing in this (title) shall be construed * * * to diminish either Federal or state jurisdiction, responsibility, or rights in the field of planning, development, or control of water resources, submerged lands, or navigable waters * * * ." The consistency obligation and decisional authority California reads into "maximum extent practicable" (Cr. Pet. Br. 23-27), the court of appeals properly concluded, "weighs too lightly the interests of the nation against that of a state" (Pet. App. 20a). Contrary to California's assertions (Cr. Pet. Br. 24-26), moreover, the legislative history of Section 307(c)(1) of the CZMA and applicable NOAA regulations support the Ninth Circuit's interpretation of "maximum extent practicable." Despite California's attempt to avoid the issue (Cr. Pet. Br. 26 n.22), the fact remains that the "maximum extent practicable" term in Section 307(c)(1) of the CZMA was expressly inserted into the statute to provide "some leeway * * * with respect to activities of federal agencies in connection with approved programs." H.R. Rep. No. 92-1049, 92d Cong., 2d Sess. 20 (1972). /14/ And, although NOAA consistency regulations offer an opportunity for state disagreement with a federal consistency determination, 15 C.F.R. 930.41, 930.42, they do not mandate that the federal agency acquiesce in the state's views. /15/ In sum, the Ninth Circuit's conclusions that absolute consistency is not required at the lease sale stage and that the federal government -- not California -- makes the final determination that the requisite degree of consistency exists are unassailable. 2. To be sure, the court of appeals was unable to "delineate()" an exact standard for the consistency obligation imposed by Section 307(c)(1), nor was it able to provide a "verbal formula()" for testing the adequacy of the government's efforts at the lease sale stage (Pet. App. 22a). Rather, the court concluded that 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" (ibid.). The court's inability to supply an exact standard for lease sale consistency is not surprising. Because of the uncertainties at the lease sale stage regarding the timing, scope and content of activities at the exploration, development, and production stages of the OCS process (see 82-1326 Pet. Br. 43-45), there is no principled way short of case-by-case litigation to determine whether a particular OCS lease sale is consistent "to the maximum extent practicable" with an approved state coastal management program. /16/ The court, however, did properly note that the Secretary may "take into account" that further consistency requirements will apply at the exploration, development, and production stages of the OCS process (Pet. App. 22a). Section 307(c)(3)(B), 16 U.S.C. (& Supp V) 1456(c)(3)(B). These future consistency requirements, which specifically apply to later stages in the OCS oil and gas process, are certainly relevant factors to be considered in forecasting at the least sale stage whether those activities will be consistent with a state's coastal zone management program. See 82-1326 Pet. Br. 28-35. /17/ It may well be that the Ninth Circuit's construction of "maximum extent practicable" will not lead to determinations that meaningfully serve the purpose of the consistency provisions of the Coastal Zone Management Act (see 82-1326 Pet. Br. 41-43). Indeed, the necessarily imprecise standard for consistency could breed years of case-by-case litigation over whether the proper degree of consistency has been achieved for each OCS lease sale. See Conservation Law Foundation v. Watt, 560 F.Supp. 561 (D. Mass. 1983), appeal pending, Nos. 83-1258, 83-1265 (1st Cir.). But, if this is the result, it is not attributable to the appellate court's adoption of what California claims is a demonstrably wrong interpretation of "maximum extent practicable;" instead, the problem arises because of the premature application at the lease sale stage of substantive consistency limitations that more rationally apply at the exploration, development and production stages of the OCS oil and gas process. Once the Ninth Circuit had embraced an expansive definition of the threshold term "directly affecting the coastal zone" that encompassed remote, speculative and uncertain effects, it "unavoidably" (Pet. App. 19a) had to adopt a definition of "maximum extent practicable" that recognized the limited information available about those effects. As we stated in our Brief as Petitioners (82-1326 Pet. Br. 32-35), Congress considered and rejected as impractical the imposition of a mandatory consistency requirement at the lease sale stage of the OCS process. In coming to a contrary conclusion, and despite California's protestations, the appellate court perforce had to address and accommodate the practical problems that its erroneous decision created. CONCLUSION Should the judgment of the court of appeals be affirmed insofar as it is challenged by petitioners in Nos. 82-1326 and 82-1327, that judgment likewise should be affirmed insofar as it is challenged by the cross-petition. If the portion of the judgment challenged in 82-1326 and 82-1327 is reversed, the balance of the judgment should be vacated as moot. Respectfully submitted. REX E. LEE Solicitor General F. HENRY HABICHT, II Acting Assistant Attorney General LOUIS CLAIBORNE Deputy Solicitor General RICHARD G. WILKINS Assistant to the Solicitor General PETER R. STEENLAND, JR. ANNE S. ALMY Attorneys AUGUST 1983 /1/ "Pet. App." refers to the Appendix to the Petition in James G. Watt v. State of California, No. 82-1326. /2/ A full description of the statutory provisions governing the OCS oil and gas process and the administrative history of OCS Lease Sale No. 53 is set forth in our earlier brief in No. 82-1326. 82-1326 Pet. Br. 2-16. /3/ 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. /4/ The final order of the district court was stayed pending appeal (J.A. 9, Docket Entry 119). /5/ The court of appeals' construction of the phrase "to the maximum extent practicable" was "unavoidabl(e)" only because it and the district court found OCS Lease Sale No. 53 to be a federal activity "directly affecting the coastal zone" within the meaning of Section 307(c)(1) of the CZMA. Had the lower courts ruled in the federal government's favor on this threshold issue, there would have been no obligation to formulate an appropriate remedy and no occasion to address the "maximum extent practicable" portion of the statute. Accordingly, should this Court reverse the lower courts' judgment on the meaning of "directly affecting the coastal zone" (the issue presented in Nos. 82-1326 and 82-1327), all injunctive relief would be vacated and this Court need not address the "maximum extent practicable" issue. /6/ As we have already explained (82-1326 Pet. Br. 43-48), there is insufficient information at the lease sale stage to predict accurately whether future OCS oil and gas activities will, in all possible eventualitites, be consistent with a state program. Similarly, the state coastal commission has already unequivocally declared that leasing the contested tracts is inconsistent with its plan, and it had baldly asserted that no leasing should be permitted within twelve miles of the sea otter habitat (J.A. 73). If this state agency is empowered by the CZMA to make the final determination on federal consistency, no post-judgment cure could be effective. /7/ The administrative record consists of over 600 separately numbered documents compiled by both the Bureau of Land Management and the United States Geological Survey, the Environmental Impact Statement found to be fully adequate by the lower courts (Pet. App. 25a-27a; 65a-68a), and transcripts of the public hearings held in California. This record more than adequately describes, to the extent possible at the lease sale stage, the proposed activity and its effects. /8/ California continues to suggest that NOAA's views on consistency could be obtained through invocation of the mediation provisions of the CZMA regulations (Cr. Pet. Br. 18). 15 C.F.R. 930.110 et seq. Mediation, however, is not arbitration. The Secretary of Commerce has previously explained to California that it is beyond the role of a mediator to express a view on the merits of a controversy brought before him (Letter from Secretary Klutznick to Michael Fischer, Cr. 19, Def. Ex. L-AA). /9/ The federal cross-respondents view with alarm the cross-petitioners' evident assumption that the adequacy vel non of a consistency determination, rather than consistency of the federal activity, should be the proper subject for litigation under the CZMA (Cr. Pet. Br. 13-16). Section 307(c)(1) of the CZMA imposes a substantive, not a procedural limitation on federal activities directly affecting the coastal zone -- it requires them to be consistent with approved state management programs "to the maximum extent practicable." Unlike the National Environmental policy Act of 1969, 42 U.S.C. 4321 et seq., the statute does not prescribe the type and content of documents to be prepared in conjunction with federal decision-making. The consistency determination is a creation of administrative regulations. Those regulations are designed to implement Section 307(c)(1) by providing record evidence that the federal decisionmaker considered the relevant factors in making the decision that a proposed activity is consistent "to the maximum extent practicable" with a state coastal zone management program. The consistency determination, however, is only part of the administrative record supporting the federal decision. State disagreement with a federal agency's determination of consistency and the federal agency's answer to or refutation of the state's views could well appear elsewhere in the record. As a result, a court is not called upon, in CZMA litigation, to determine whether the consistency determination itself is "adequate," as courts do in NEPA litigation considering environmental impact statements. Instead, the judicial focus should be on the activity itself. Thus, a court should inquire whether the federal decision to go forward with an activity directly affecting coastal zone should be set aside as arbitrary and capricious based on an examination of the administrative record as a whole. This distinction is not immaterial. One district court already has confused the adequacy of a consistency determination with the substantive issue whether the federal activity is consistent to the maximum extent practicable with the state coastal zone management program. In Conservation Law Foundation v. Watt, 560 F.Supp. 561 (D. Mass. 1983), appeal pending, No. 83-1258 (1st Cir.), the district court enjoined a portion of a lease on CZMA grounds because the consistency determination did not articulate, in the district court's view, a proper basis for consistency. In so ruling, the district court failed to consider other portions of the administrative record that refuted the state's views on the issue. Indeed, that court declined to address whether the activity was or was not consistent, holding only that the determination reflected in the document was insufficient. /10/ See, e.g., Louisiana Environmental Society, Inc. v. Coleman, 537 F.2d 79, 86 (5th Cir. 1976) (determination that chosen route minimizes harm to recreational lake under Section 4(f)(2) of the Department of Transportation Act, 49 U.S.C. 1653(f)(2)); California v. Watt, 668 F.2d 1290, 1311-1313 (D.C. Cir. 1981) (consideration of relative environmental sensitivity and marine productivity among various areas of the OCS under Section 18 of the OCSLA, 43 U.S.C. (Supp. V) 1344); National Resources Defense Council, Inc. v. Morton, 458 F.2d 827, 836-838 (D.C. Cir. 1972) (scope of alternatives analysis in remand for preparation of a supplemental EIS); Defenders of Wildlife, Inc. v. Endangered Species Scientific Authority, 659 F.2d 168, 177-178 (D.C. Cir. 1981), cert. denied, sub nom. International Ass'n of Fish & Wildlife Agencies v. Defenders of Wildlife, Inc., 454 U.S. 963 (1981) (creation of a population estimate for bobcats as a predicate for a no detriment finding under Article IV of the Convention on International Trade in Endangered Species as implemented by Section 8(e) of the Endangered Species Act of 1973, 16 U.S.C. 1537(e)). /11/ The federal government has been prevented from executing leases on the contested tracts despite the overall purpose of the OCSLA to promote "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). Moreover, some $44 million (20% of the high bids) has been held in a special account, unavailable to either the industry bidders or the federal government, pending resolution of the question whether these tracts may be leased. /12/ The State has participated extensively in the preparations for OCS Lease Sale No. 53 from the time of the call for nominations in 1977 through the submission of recommendations pursuant to Section 19 of the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. (Supp. V) 1345. See 82-1326 Pet. Br. 9-14. The state coastal commission has made its opposition to any leasing of the disputed tracts unequivocally clear. See J.A. 73-80, 109-132. California has been given all the information the federal defendants possess regarding OCS Lease Sale No. 53; presumably, California will not claim that it has been misinformed about or misunderstood the proposal to lease the contested tracts. Finally, the standard for consistency California appears to embrace (Cr. Pet. Br. 23-25) leaves no room for compromise, cooperation or mutual give-and-take (id. at 21-22). /13/ To the extent that the Ninth Circuit's interpretation of "maximum extent practicable" differs from NOAA's regulatory definition, those differences are compelled by the fact that the regulation was designed to address and resolve the consistency obligations of the federal government for actions "directly affecting" the coastal zone. Section 307(c)(1), 16 U.S.C. 1456(c)(1). The regulation does not address uncertain future events. The regulatory definition of "maximum extent practicable," therefore, is additional evidence that the threshold term "directly affecting the coastal zone" in Section 307(c)(1) was not intended to embrace effects that are remote, speculative, and uncertain of occurrence. /14/ The predecessor to Section 307(c)(1), as originally passed by the Senate, provided that federal agencies conducting or supporting activities "in" the coastal zone "shall administer their programs consistent with approved coastal management programs except in cases of overriding national interest as determined by the President." S. 3507, 92d Cong., 2d Sess. Section 314(b)(1) (1972). The House version, which was eventually adopted by the full Congress, substituted the "maximum extent practicable" term for the Presidential override contained in the Senate bill. H.R. Rep. No. 92-1049, 92d Cong., 2d Sess. 20 (1972). Like the Presidential override, the term was designed to give the federal government "some leeway" with respect to the consistency obligations of the federal government (ibid.), and California's attempt to confine the term solely to "unforeseen circumstances" is unpersuasive (Cr. Pet. Br. 26 n.22, emphasis deleted). There is no clear indication in the House Report that the "leeway" provided by "maximum extent practicable" reaches only to "unforeseen circumstances"; the Report merely cites unforeseen circumstances as one example where "leeway" in the application of Section 307(c)(1)'s consistency obligations would be appropriate. H.R. Rep. No. 92-1049, supra, at 20. Moreover, even assuming, arguendo, that the leeway provided by "maximum extent practicable" does extend only to unforeseen circumstances, that condition is plainly met in the circumstances of this case. As we have already explained in detail (82-1326 Pet. Br. 24-27), federal-state disagreements regarding a state coastal zone management plan are to be "iron(ed) out" prior to the plan's approval. H.R. Rep. No. 92-1049, supra, at 20. But, prior to the approval of the California coastal management plan, the federal government could not foresee that the state would transmute its general policy objective of maintaining, enhancing and, where feasible, restoring marine resources (Cal. Pub. Res. Code Section 30230 (West 1977)) into a 12-mile buffer zone in which OCS leasing would be prohibited for the protection of the southern sea otter. /15/ Indeed, NOAA explicitly stated in formulating its consistency regulations that the federal agency makes the final determination of consistency: "In response to comments requesting clarification, Subpart C makes clear that Federal agencies, rather than coastal States, have the authority to determine * * * whether (their) activities are 'consistent to the maximum extent practicable' with an approved management program." 42 Fed. Reg. 43586, 43590 (1977). In contrast, the regulations implementing Section 307(d), which governs consistency for federal funding programs, 15 C.F.R. 930.97, requires acquiesence in the state's views. "Following receipt of a State agency objection, the Federal agency shall not approve assistance for the activity * * * " (ibid.). /16/ The only way to preclude any possibility of future inconsistency at the lease sale stage would be to cease leasing anywhere on the OCS because of lack of knowledge regarding future events on any and all OCS tracts offered for lease. In the present case, for example, future activities on all the tracts offered for lease in OCS Lease Sale No. 53 offer some prospect (however small) of creating an oil spill that would adversely affect the sea otter habitat (C.R. 85, 183W at 9-10). In fact, the Acting Deputy Assistant Secretary for Fish and Wildlife and Parks estimated that deleting the contested tracts from Lease Sale No. 53 will reduce this risk by only five to six percent (C.R. 85, 237W at 2). If the Secretary were required to preclude any possibility at the lease sale stage that an oil spill would reach the sea otter habitat, no leasing could occur at all in the Santa Maria Basin. /17/ As we have explained (82-1326 Pet. Br. 29 n.22, 46-47 n.43), the federal courts have molded the procedural and substantive obligations of other federal statutes to the staged OCS oil and gas process. See, e.g., County of Suffolk v. Secretary of the Interior, 562 F.2d 1368 (2d Cir. 1977), cert. denied, 434 U.S. 1064 (1978); North Slope Borough v. Andrus, 642 F.2d 589 (D.C. Cir. 1980). The rationale behind such phased compliance applies with even greater force in the context of the CZMA; consistency with a state coastal management program cannot be assured until the federal government is informed regarding the location, type and quantity of recoverable hydrocarbon resources as well as a lessee's plans for their extraction. 82-1326 Pet. Br. 43-46.