beckett ventures v. eagle ford order

7/27/2019 Beckett Ventures v. Eagle Ford Order

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Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 of 10

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

LAREDO DIVISION

BECKETT VENTURES, INC., et aL, §

§Plaintiffs, §

VS. § CIVIL ACTION NO. L-12-164

§EAGLE FORD MIDSTREAM, LP, et aL, §

§Defendants. §

MEMORANDUM & ORDER

Plaintiffs Beckett Ventures, Inc. and Hall of Fame Land Ventures, LP, owners and

operators of the Herradura Ranch in La Salle County, Texas, seek injunctive and declaratory

relief under the Endangered Species Act ("ESA") and the Declaratory Judgment Act against

Defendants Eagle Ford Midstream, LP and NET Midstream, LLC, who have obtained a natural

gas pipeline right-of-way through the Ranch under eminent domain. (Dkt. 1 3; Dkt. 7

3.) Plaintiffs' complaint alleges that the Ranch contains suitable habitat for the endangered

ocelot and that there is evidence of the ocelot's presence in the form of tracks and eyewitness

reports. (Dkt. 1 at 9.) According to Plaintiffs, Defendants' pipeline-related activities will

require the clearing away of ocelot habitat, resulting in ''takes" proscribed by the ESA. (Id. at mf1, 14; Dkt. 32 at pg. 1.) Invoking the ESA, Plaintiffs seek injunctive relief in the form of a

revised right-of-way that is less destructive to ocelot habitat but will still achieve Defendants'

objectives. (Dkt. 1 17.) Pursuant to 28 U.S.C. § 2201, Plaintiffs also seek a declaration that

Defendants violated Section 9 of the ESA, the ''take" provision, by harming and harassing the

ocelot. (ld. 94.)

Pending is Defendants' Motion to Dismiss pursuant to Federal Ru1e of Civil Procedure

12(b)(l) for lack of subject matter jurisdiction, Rule 12(b)(6) for failure to state a claim, and

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Rule 12(b)(7) for failure to join a required party. (Dkt. 30.) Upon an initial review of the

motion, the Court ordered additional briefing on a standing issue left unaddressedby the parties.1

(Dkt. 35.) Plaintiffs filed responsive briefing (Dkt. 36), as well as an unopposed motion for

leave to amend their complaint (Dkt. 37), which is also pending. For the reasons discussed

below, Defendants' Motion to Dismiss (Dkt. 30) is hereby DENIED in its entirety. Moreover,

Plaintiffs' motion for leave to amend the complaint (Dkt. 37) is hereby GRANTED.

Background

In the spring of2012, Defendants entered into negotiations with Plaintiffs to obtain their

right-of-way through the Ranch. (Dkt. I atmf

4-6; Dkt. 7 atmf

6-10.) During these negotiations,

Plaintiffs attempted to persuade Defendants to adopt a route around the Ranch that would be less

destructive of the claimed ocelot habitat. (Dkt. 1 at mf 4-5.) Apparently, however, negotiations

fell through. On May 24, 2012, Defendants filed the eminent domain proceeding. (!d. 3;

Dkt. 7 a t ~ 13; Attach. 6 at pg. 26.) On August 16, 2012, seeking recourse under the ESA,

Plaintiffs sent Defendants a Notice of Intent to Sue letter for violations ofSection 9. (Dkt. 1

8.) Nonetheless, on August 27, 2012, Defendants obtained their right-of-way across the Ranch

via a state court order. (Id. 3; Dkt. 7, Attach. 6 at pg. 26.)

To proceed with installation of the pipeline, federal law and regulation required that

Defendants obtain a permit from the United States Army Corps ofEngineers ("the Corps"), in

consultation with the United States Fish and Wildlife Service ("FWS"), regarding the effect on

any ESA-listed species or their designated habitat. See 16 U.S.C. § 1536(a)(2); see also 77 Fed.

1Plaintiffs originally alleged that they suffered injury to their environmental, aesthetic,

and recreational interests. (Dkt. I at mf 102-103.) However, the Court noted in its prior orderthat corporate entities like Plaintiffs cannot have such interests. See Citizens Coordinating

Comm. on Friendship Heights, Inc. v. Wash. Metro. Area Transit Auth., 765 F.2d 1169, 1173(D.C. Cir. 1985).

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Reg. 10184 (Feb. 21, 2012). Thus, in attempting to fulfill these requirements, Defendants hired

Zephyr Environmental Corporation to draft an environmental assessment report on the Ranch.

(Dkt. 1 60; Dk:t. 7 at mf 19-21.) Zephyr examined the potential effect of the pipeline on the

ocelot and concluded that no ocelot habitat existed within the right-of-way. (Dkt. 1 at 60-61;

Dkt. 7 at mf 21-26.) Defendants furnished their findings to the FWS. Their formal letter reads in

part that ''the general lack ofhabitat for any of the federally-listed species should negate the need

for any further measures or consultation in regards to the federally-listed species." (Dk:t. 4,

Attach. 5.) On September 6, 2012, the FWS affixed a stamp to the letter, which reads in its

entirety as follows:

Your letter indicates you have determined that the proposed action would have no

effect on federally listed species. Therefore, the Service believes your agency has

complied with section 7(a)(2) of the Endangered Species Act by making a

determination. No further action is required from this office.

(Dkt. 4, Attach. 5 at pg. 1.) Defendants also furnished their findings to the Corps, which granted

approval for the pipeline. (Dkt. 1 a t ~ 62; Dkt. 7 a t ~ 25.) On October 1, 2012, Defendants

began clearing the right-of-way for installation of he pipeline. (Dkt. 1 t ~ 11; Dk:t. 7 t ~ 17.)

Plaintiffs filed suit in this Court on October 16, 2012 (Dkt. 1), sixty days after filing their

notice of intent to sue letter, see 16 U.S.C. § 1540(g)(2)(A)(i). According to the complaint,

Plaintiffs' experts believe that ocelot habitat exists on the Ranch, based in part on the eyewitness

report of Mr. John Beckett. (Dkt. 1 at mf 9, 12, 59, 63.) The following day, Plaintiffs filed a

motion for a temporary restraining order and preliminary injunction to prevent Defendants from

laying the pipeline. (Dkt. 4 at pgs. 6-7.) Before the Court could issue a ruling, Defendants

completed installation, and Plaintiffs withdrew the motion. (Dk:t. 26.) Nonetheless, Plaintiffs

continue to seek a right-of-way that charts a course along the perimeter of the Ranch and

circumvents the supposed ocelot habitat. (Dkt. 32 at pg. 6.) According to Plaintiffs, abandoning

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the current right-of-way would allow the native ocelot habitat to re-grow. (Id.)

Discussion

Defendants now move to dismiss the complaint pursuant to Rule 12(b)(1) for lack of

subject matter jurisdiction, Rule 12(b)(6) for failure to state a claim, and Rule 12(b)(7) for failure

to join a required party. (Dkt. 30.) Each ground for dismissal will be discussed in turn.

I. Lack of subject matter jurisdiction

For purposes of Rule 12(b)(1), Defendants argue that the Court is without jurisdiction

based on Plaintiffs' lack of standing. (Dkt. 30, Attach. 1 at pg. 3.) According to Defendants, the

complaint is "facially defective as Plaintiffs merely recite that they have sustained an injury in

fact which is fairly traceable and fairly redressable, but the [c ]omplaint provides insufficient

supporting factual allegations of the elements pled.'' (Id.) Defendants also argue that Plaintiffs'

amended complaint fails to cure the injury-related pleading deficiencies previously raised by the

Court. (Dkt. 38 at pgs. 1-2.)

On a Rule 12(b)(1) motion to dismiss, the party asserting jurisdiction, generally the

plaintiff, bears the burden of proof Ramming v. United States, 281 F.3d 158, 161 (5th Cir.

2001). Where standing is at issue, the burden corresponds "with the manner and degree of

evidence required at successive stages of the litigation." Croft v. Governor of Tex., 562 F.3d

735, 746 (5th Cir. 2009) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). At

the pleading stage, as here, the plaintiff is only required to make "a short and plain statement of

the grounds for the court's jurisdiction" and "a short and plain statement of the claim showing

that [he] is entitled to relief." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Put

another way, all that is required is an allegation of facts giving rise to a plausible claim of

standing. Cornerstone Christian Sch. v. Univ. Interscholastic League, 563 F.3d 127, 134 (5th

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Cir. 2009). In determining whether this burden has been met, a court must assume that all of the

allegations in the complaint are true even if doubtful. Twombly, 550 U.S. at 555. Moreover, a

plaintiff must demonstrate standing separately for each form of relief sought. Friends of the

Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 185 (2000).

There are three elements to standing: (1) the plaintiff must have suffered an injury in fact,

which is an invasion of a legally protected interest that is concrete and particularized, and actual

or imminent, not conjectural or hypothetical; (2) there must be a causal connection between the

injury and the conduct complained of, which means that the injury has to be fairly traceable to

the challenged action of the defendant, and not the result of the independent action of some third

party not before the court; and (3) it must be likely, as opposed to merely speculative, that the

injury will be redressed by a favorable decision. Lujan, 504 U.S. at 560-61. Here, Plaintiffs

have satisfied their burden with respect to each of these elements.

A. Injury in fact

In their amended complaint, Plaintiffs allege an injury to their economic interests (Dkt.

37, Attach. 1 at 103 ), which is a type of injury that can be alleged by corporate entities in

support ofstanding.2

See Tex. Democratic Party v. Benkiser, 459 F.3d 582, 586 (5th Cir. 2006);

Citizens Coordinating Comm. on Friendship Heights, Inc. v. Wash. Metro. Area Transit Auth.,

765 F.2d 1169, 1172 (D.C. Cir. 1985). Here, Plaintiffs claim that the Ranch sees ecotourism

profits from guests who come to view wildlife, particularly the ocelot. (Dkt. 36, Attach. 1 a t ~ ~

4-5; Dkt. 37, Attach. 1 at 103.) According to Plaintiffs, destroying the ocelot habitat will

negatively affect the amount of wildlife and drive away the ocelots. (Dkt. 1 at W 58-59, 74.)

2 To the extent Defendants argue that economic interests fall outside the scope of nterests

protected by the ESA (see Dkt. 38 at pgs. 4-5), such has been foreclosed by the Supreme Court.

See Bennett v. Spear, 520 U.S. 154, 163-166 (1997).

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Supposedly then, over time, fewer guests will come to the Ranch for ecotourism, thus hurting

profits. (Dkt. 36, Attach. I a t ~ 4-5; Dkt. 37, Attach. I at -,r I03).

B. Traceability

Plaintiffs also allege the second element of standing-a causal connection between the

injury and the complained of conduct. To establish a causal connection, a plaintiff must plead

that the asserted injury is "fairly traceable" to the defendant's challenged action and not the

result of he independent action of some third party not before the court. Lujan, 504 U.S. at 560.

In meeting this requirement, Plaintiffs allege that Defendants' pipeline-related activities have

destroyed ocelot habitat, which will drive away the ocelots and lead to reduced profits from

ecotourism. (Dkt. 1 t ~ 50-59, 64-76, 77-82, 95-97; Dkt. 37, Attach. 1 at -,r 103.) Accordingly,

Plaintiffs' injury in fact is fairly traceable to Defendants' conduct.

C. Redressability

Finally, redressability exists for both types of actions brought by Plaintiffs, injunctive

relief and declaratory relief. A plaintiff meets the redressability prong of standing when "i t is

likely, as opposed to merely speculative, that the injury will be redressed by a favorable

decision." Friends of he Earth, Inc., 528 U.S. at 181; Lujan, 504 U.S. at 561. Here, the Court

can grant injunctive relief such as re-routing of the pipeline to minimize disturbance of the

endangered ocelot and restoring of the habitat. See Loggerhead Turtle v. Cnty. Council of

Volusia Cnty., Fla., 148 F.3d 1231, 1254-55 (11th Cir. 1998). Moreover, a declaratory judgment

can redress Plaintiffs' injury by providing the impetus necessary for persons to conform their

actions to avoid a violation of the law. Seattle Audubon v. Sutherland, 2007 WL 1300964, at *6

(E.D. Wash. May 1, 2007) ("Because it is likely that state officials would conform their actions

to avoid a violation of [the ESA], a declaratory judgment would likely redress Plaintiffs' alleged

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injury."); see also Franklin v. Mass., 505 U.S. 788, 801-03 (1992); Alaska Fish & Wildlife Fed'n

& Outdoor Council v. Dunkle, 829 F.2d 933, 937 (9th Cir. 1987).

II. Fallure to state a claim upon which relief can be granted

Defendants argue, for purposes of Rule 12(b)(6), that Plaintiffs fail to state a claim

because the relief they seek is now moot; specifically, Defendants contend that relief is no longer

available because the pipeline has been completed. 3 (Dkt. 30, Attach. I at pg. 5.) A case

becomes moot only when it is impossible for a court to grant any effectual relief whatsoever to

the prevailing party. Erie v. Pap's A.M., 529 U.S. 277, 287 (2000) (quoting Church of

Scientology of Cal.v.

United States, 506 U.S.9, 12

(1992)). Here, relief is still possible for

Plaintiffs. For example, the Court could order a re-route of the pipeline and restoration of the

habitat. See Ctr. fo r Biological Diversity v. U.S. Bureau ofLand Mgmt., 698 F.3d 1101, 1106

n.2 (9th Cir. 2012) ("That the pipeline was completed and put into service during the pendency

of this lawsuit does not render the petitioners' challenges moot. It is still possible to mitigate the

project's adverse effects on listed species and critical habitat.'')

Defendants also argue that the Court cannot grant any relief for past takes by a private

party. (Dkt. 30, Attach. I at pg. 6.) Nonetheless, the Court need not address this issue.

Plaintiffs request injunctive relief to prevent, not just past takes, but ongoing and future takes as

well, either of which is sufficient to state a claim.

m. Joinder of parties

Defendants move to dismiss under Rule 12(b)(7) for failure to join parties required by

Rule 19, namely, the Corps and the FWS. (Dkt. 30, Attach. I at pg. 6.) Rule 19 requires a

3 A motion to dismiss under Rule 12(b (6) is analyzed under the same standard as amotion to dismiss under Rule 12(b)(l). Dooley v. Principi, 250 F. App'x, 114, 115 (5th Cir.

2007).

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person to be joined if either subsection 19(a)(1)(A) or 19(a)(1)(B) is satisfied. Rule 19(a)(1)(A)

provides that a person must be joined if the court cannot grant complete relief to existing parties

in the absence of hat person from the action. Fed. R. Civ. P. 19(a)(l)(A); see Huber v. Taylor,

532 F.3d 237, 248 (3rd Cir. 2008). Rule 19(a)(1)(B) requires the joinder of a person who claims

an interest in the action and is so situated that disposing of the action may impair that person's

ability to protect their interest or cause a substantial risk to existing parties of facing inconsistent

obligations. Fed. R. Civ. P. 19(a)(1)(B); see Image Masters, Inc. v. Chase Home Fin., 489 B.R.

375, 396 (E.D. Pa. 2013). The party advocating joinder has the initial burden of demonstrating

that a personis

a necessary party. Pulitzer-Polsterv.

Pulitzer, 784F.2d

1305, 1309 (5th Cir.

1986); JRG Capital Investors I, LLC v. Doppelt, 2012 WL 2529256, at *1 (S.D. Tex. June 28,

2012).

Here, Defendants claim that they relied upon the approval of the Corps and the FWS to

proceed with the pipeline project. (Dkt. 30, Attach. 1 at pg. 6-7.) They argue that under Rule

19(a)(I)(A), the Court cannot grant the complete relief sought by Plaintiffs because the Court

cannot compel these agencies to take any action unless they are joined in the lawsuit. (/d.)

Under Rule 19(a)(1)(B), Defendants assert that the Corps and the FWS have an interest in

protecting the implementation and administration of the ESA in these circumstances. (Id. at pg.

7.) According to Defendants, the Corps has an interest in protecting its implementation of the

Nationwide Permit Program, 77 Fed. Reg. 10184 (Feb. 21, 2012), and its conclusion that the

pipeline will have "no effect" upon endangered species, while the FWS has an interest in

protecting its concurrence with the Corps that the pipeline will have ''no effect," as well as its

own determination that "no further action is required." (Dkt. 30, Attach. 1 at pg. 7.)

However, Defendants' arguments are not supported by the case law. In fact, federal

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courts in several circuits have held that as a general rule federal agenctes charged with

administering the various federal environmental laws-such as the Clean Air Act, 42 U.S.C. §

7604, the Clean Water Act, 33 U.S.C. § 1365, and the Surface Mining Control and Reclamation

Act, 30 U.S.C. § 1270---are not necessary parties to citizen suit actions.4

To hold otherwise

would negate one of the primary purposes of environmental citizen suit provisions-to provide a

means by which citizens can seek enforcement or relief where the regulatory authority has failed

to properly enforce the law. See McCracken v. Black Diamond Co., 2012 WL 5439857, at *5

(W.D. Va. May 6, 2012); see also Bennett v. Spear, 520 U.S. 154, 170 (1997). Here, the citizen

suit provision of the ESA,16

U.S.C. § 1540(g), has nearly identical language and purpose to the

citizen suit provisions of he three environmental acts above.

Furthermore, Defendants have failed to discharge their burden of showing that the Corps

and the FWS claim interests that need to be protected.5

Here, Defendants provide only

unsubstantiated assertions as to the interests held by the Corps and the FWS. (See Dkt. 30,

4See e.g., Ass'n to Protect Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299

F.3d 1007, 1014 (9th Cir. 2002) (Clean Water Act); Hawai'i Wildlife Fund v. Cnty. ofMaui,

2012 WL 3263093, at *6 (D. Haw. Aug. 8, 2012) (Clean Water Act); McCracken v. Black

Diamond Co., 2012 WL 5439857, at *5-6 (W.D. Va. May 6, 2012) (Surface Mining Act); Wis.

Res. Prot. Council, Ctr. for Biological Diversity v. Flambeau Min. Co., 2012 WL 5191992, at

*17-18 (W.D. Wis. Apr. 13, 2012) (Clean Water Act); Or. State Pub. Interest Research Grp.,

Inc. v. Pacific Coast Seafoods Co., 341 F. Supp. 2d 1170, 1179 (D. Or. 2004) (Clean Water Act);

Sierra Club v. Young Life Campaign, Inc., 176 F. Supp. 2d 1070, 1078-80 {D. Colo. 2001)

(Clean Water Act); Student Pub. Interest Research Grp. ofNJ., Inc. v. Monsanto Co., 600 F.

Supp. 1479, 1484 (D.N.J. 1985) (Clean Water Act); Friends ofEarth v. Carey, 535 F.2d 165,

173 (2d Cir. 1976) (Clean Air Act); Metro. Wash. Coal. for Clean Air v. D.C., 511 F.2d 809,

814-15 (D.C. Cir. 1975) (Clean Air Act).

5See Indian Harbor Ins. Co. v. K.B Lone Star, Inc., 2012 WL 1038658, at *1-2 (S.D. Tex.

Mar. 27, 2012); see also 5C, Federal Practice and Procedure, § 1359 (3d ed. 2013) ("The cases

make it clear that the burden is on the party moving . . . to show the nature of the unprotected

interests of he absent individuals or organizations and the possibility of injury to them or that the

parties before the court will be disadvantaged by their absence[, and t ]o discharge this burden, it

may be necessary to present affidavits of persons having knowledge of these interests as well as

other relevant extra-pleading evidence.").

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Attach. 1 at pg. 7; Dkt. 33 at pgs. 4-10.) Indeed, should these agencies' interests be prejudiced in

their absence, they are free to intervene. Accordingly, Defendants have failed to satisfy their

initial burden ofdemonstrating that the Corps and the FWS are necessary parties.

Conclusion

For the reasons discussed above, Defendants' Motion to Dismiss (Dkt. 30) is hereby

DENIED in its entirety. Moreover, Plaintiffs' unopposed motion for leave to amend the

complaint (Dkt. 37) is hereby GRANTED. The Clerk of Court is hereby DIRECTED to docket

Plaintiffs' amended complaint (Dkt. 37, Attach. 1). This case is now referred to the Magistrate

Judge for pre-trial handling.

IT IS SOORDERED.

SIGNED this 27th day ofSeptember, 2013.

Diana Saldaiia

United States District Judge

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beckett ventures v. eagle ford order

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