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Natural Resources Defense Council, Inc. v. United States Department of Interior, Bureau of Land Management

United States District Court, S.D. New York

December 11, 2014

NATURAL RESOURCES DEFENSE COUNCIL, INC., Plaintiff,
v.
UNITED STATES DEPARTMENT OF INTERIOR and BUREAU OF LAND MANAGEMENT, Defendants

Page 351

For Natural Resources Defense Council, Inc., Plaintiff: Selena K. Kyle, LEAD ATTORNEY, PRO HAC VICE, Natural Resources Defense Council, Chicago, IL; Nancy Sharman Marks, Natural Resources Defense Council, Inc., New York, NY.

For United States Department of Interior, Bureau of Land Management, Defendants: Christine Schessler Poscablo, LEAD ATTORNEY, U.S. Attorney Office SDNY, New York, NY.

Page 352

OPINION & ORDER

PAUL A.ENGELMAYER, United States District Judge

This opinion resolves the final outstanding portion of a dispute between the Natural Resources Defense Council (" NRDC" ), and the U.S. Department of Interior (" DOI" ) and Bureau of Land Management (" BLM" ) (collectively, the " Government" ). Under the Freedom of Information Act, 5 U.S.C. § 552 (" FOIA" ), the NRDC sought to obtain records of coal-mining leases previously awarded by the Government to private mining companies in the Powder River Basin in Montana and Wyoming. The Government produced the requested documents but redacted them extensively pursuant to FOIA Exemptions 4, 5, and 9. In a decision issued August 5, 2014, this Court granted summary judgment for the NRDC to the extent the Government redacted documents pursuant to Exemptions 4 and 9. See Dkt. 59. It also granted summary judgment for the Government as to certain quantitative information it had redacted pursuant to Exemption 5. See id. As to the balance of the redactions pursuant to Exemption 5, which reflected the BLM's qualitative reasoning in connection with its decisions as to coal-mining lease awards, the Court requested additional briefing addressing whether the redacted material, if disclosed, would significantly harm the Government's commercial interests. Id. at 47. For the following reasons, the Court now grants summary judgment for the Government as to this point, i.e., as to the balance of the redactions made pursuant to Exemption 5.

I. Background[1]

A. Factual Background

The facts of this case are reviewed in

Page 353

detail in the Court's August 5, 2014 opinion. See Dkt. 59, reported at Natural Res. Def. Council, Inc. v. U.S. Dep't of Interior, No. 13 Civ. 942 (PAE), 36 F.Supp.3d 384, 2014 WL 3871159 (S.D.N.Y. Aug. 5, 2014). In brief, the Mineral Leasing Act authorizes the Secretary of the Interior to lease public lands for coal-mining operations. See 30 U.S.C. § 201(a)(1). These public lands include almost all of the Powder River Basin, which contains one of the largest coal deposits in the world. P1. 56.1 ¶ ¶ 1-2. Since 1990, 28 tracts have been offered in competitive lease sales in the Powder River Basin, 27 of which have been leased. Hageman Decl. ¶ 5. There are currently seven lease sales pending in the Powder River Basin, for a total of more than four billion tons of coal. P1. 56.1 ¶ 9.

Under the Mineral Leasing Act, BLM cannot accept less than fair market value (" FMV" ) for the sale of a coal lease. 43 CFR § 3422.3-2(b). Fair market value is defined under federal regulations as the cash value at which a knowledgeable owner would sell or lease the land to a knowledgeable purchaser. Id. § 3400.0-5(n). Before every lease sale, BLM estimates the fair market value of the coal lease in a document called an " appraisal report." P1. 56.1 ¶ 16. The appraisal report, in turn, incorporates information from three other BLM-prepared reports: an economic report, an engineering report, and a geologic report. Hageman Decl. ¶ 8. BLM's estimate of fair market value is kept confidential. Pl. 56.1 ¶ 17.

Following a competitive bidding process, BLM awards the lease to the company that submitted the highest bid as long as the company is qualified to hold the lease, and the bid meets or exceeds BLM's confidential estimate of fair market value. 43 CFR § 3422.3-2(b). In 23 of the 28 Powder River Basin coal lease sales conducted during the past 20 years, BLM has received only one bid; in the remaining five cases, BLM received two bids. Hageman Decl. ¶ 10; Pl. 56.1 ¶ 14. In lease sales where there is only one bid, the vast ...


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