Following the Drakes Bay Oyster Company Lawsuit: Ninth Circuit Denies Rehearing En Banc, But Chance at the Supreme Court?

by Lauren Bernadett, 01/27/2014

Photo credit: David Monniaux

Photo credit: David Monniaux

This article continues the story of Drakes Bay Oyster Company’s fight to stay open.  An earlier article detailing the history of Drakes Bay and the district court and Ninth Circuit opinions on the matter can be found here.

The struggle surrounding Drakes Bay Oyster Company (DBOC) continues.  The Ninth Circuit denied DBOC’s request for a rehearing en banc, but DBOC says that it plans to take its case to the Supreme Court. Due to an order granted by the Ninth Circuit, DBOC will continue operating for ninety days while it waits to see if the Supreme Court takes its case.

The Ninth Circuit’s Decision and DBOC’s Petition for Rehearing En Banc

On September 3, 2013, the Ninth Circuit  Court of Appeals affirmed the district court’s decision to deny DBOC’s request for a preliminary injunction.  The preliminary injunction, if granted, would have enjoined the U.S. Secretary of the Interior’s decision to let DBOC’s operating permits expire without granting a ten-year special use permit.  This would have allowed the commercial oyster company to continue operating instead of having to take steps to shut down.

However, the Ninth Circuit panel was not unanimous in its decision.  Judge Watford issued a strong dissent explaining why he would grant DBOC’s request for a preliminary injunction.  Most compellingly, he detailed how the Secretary misinterpreted the Wilderness Act and the Point Reyes Wilderness Act.  The Secretary’s misinterpretation led him to believe that the acts prohibited DBOC’s continued operation when they actually did not.  This misinterpretation was carried out in the National Park Service’s communications with Kevin Lunny, owner of DBOC, in 2004 when the agency notified Lunny that the oyster farm area would need to be converted to wilderness status as soon as the farm could be eliminated.  Judge Watford stated that the government’s actions and decision to let the special use permit lapse were based on misinterpretations of the acts and contrary to the legislative history of the Point Reyes Wilderness Act.

Judge Watford’s dissent gave DBOC new hope for success.  The company petitioned the Ninth Circuit for a rehearing en banc on October 18, 2013.  A rehearing en banc typically means that the case is reheard by the entire bench, and the en banc opinion can overturn the original decision made by the three-judge panel.  However, the Ninth Circuit bench, at twenty-nine active judgeships, is so large that Ninth Circuit en banc courts consist of the Chief Judge and ten randomly chosen additional judges.

A practice guide for appellate lawyers in the Ninth Circuit states that “[a] petition for rehearing en banc is appropriate when the panel’s decision generates significant legal issues that warrant the attention of a larger number of members of the court.”  In 2013, the Ninth Circuit granted only fifteen requests for rehearings en banc.

Federal Rule of Appellate Procedure 35 indicates that rehearings en banc are not favored “and ordinarily will not be ordered unless: (1) en banc consideration is necessary to secure or maintain uniformity of the court’s decisions, or (2) the proceeding involves a question of exceptional importance.”  DBOC argued both points in its petition for rehearing en banc.  First, DBOC argued that the panel’s majority opinion essentially writes out a part of the Administrative Procedure Act in conflict with three separate lines of cases.  Second, DBOC argued that the opinion allows an agency to disobey Congressional directives by ignoring the phrase “notwithstanding any other provision of law” in a statute.  Third, DBOC argued that the opinion limits the application of the National Environmental Policy Act in conflict with Ninth Circuit case law.

Eight different parties filed amicus briefs in support of DBOC in October.

On November 12, 2013, the Ninth Circuit issued an order requiring the government to respond to DBOC’s petition for rehearing en banc within twenty-one days.  While this did not guarantee that the Ninth Circuit would rehear the case en banc, it was a potentially promising sign, as Circuit Rule 35-2 requires the court to give the opposing party the opportunity to respond before ordering the rehearing.

The government filed its response to DBOC’s petition on December 2, 2013.  The response contested DBOC’s arguments, arguing that the case posed no question of exceptional importance and that the Ninth Circuit panel opinion did not conflict with precedent.  The response also took issue with the amicus briefs filed by DBOC supporters.  It asserted that half of the amicus briefs “were written or filed with the assistance of DBOC’s own counsel.”  Additionally, it concluded that none of the issues raised in the briefs gave persuasive reasons for a rehearing en banc.

Shortly after the government filed its response, the Environmental Action Committee of West Marin, National Parks Conservation Association, Natural Resources Defense Council, and Save Our Seashore jointly filed the sole amicus brief in support of the government’s position.

At the end of December, DBOC motioned for permission from the court to file a brief replying to the government’s response and in support of its petition for rehearing en banc.  DBOC’s proposed reply brief mainly took issue with what it believed to be a repeated misstatement by the government’s counsel that was made during oral argument and repeated in its response to DBOC’s petition.  The supposed misstatement involved a claim in the 2012 environmental impact statement (EIS) that the oyster operation harmed harbor seals.  This statement was later found to not be supported, but only after the Secretary made his decision to not grant the special use permit to DBOC.  DBOC stated that this means the Secretary could not have been fully aware of all the scientific disputes in the EIS when he made his decision, yet the government made statements implying the contrary in its response.  In an email to DBOC counsel, government counsel said that the scientific controversies did not carry weight in the Secretary’s decision and that later claims of scientific misconduct do not make these earlier statements false.  On January 2, 2014, the Ninth Circuit panel denied DBOC’s motion for leave to file its reply brief, so this discrete issue was taken no further.

On January 14, 2014, the Ninth Circuit denied DBOC’s petition for rehearing en banc.

The Journey Through Federal Court Continues

So is the Ninth Circuit’s denial the end of the journey for DBOC?  Not quite.

Photo credit: Joe Ravi, CC-BY-SA 3.0

Photo credit: Joe Ravi, CC-BY-SA 3.0

DBOC is filing a petition for writ of certiorari with the United States Supreme Court.  A petition for writ of certiorari is the process for asking the Supreme Court to review some or all of the issues in a case decided by a lower court.  As petitioners do not have a right to have their case reviewed by the Supreme Court, they must petition the Court.  Through the certiorari process, the Supreme Court will decide whether it wants to hear any of the issues presented by DBOC’s case.  If it wants to hear any of the issues, it will grant certiorari.

Unfortunately for DBOC, the Supreme Court grants certiorari in very few cases every year.  For example, between June 30, 2011 and July 2, 2012, the Court granted certiorari for only .862% of the petitions filed.  This means that any party seeking certiorari has a very slim chance of having it granted.

How DBOC Continues Operating Despite Losses in Court

Some may wonder why DBOC has not stopped operating even though it has not yet won in court.  After all, the National Park Service ordered Drakes Bay to cease operations after the Secretary denied DBOC’s special use permit application in 2012.  The answer lies in civil procedure that, while not as attention-grabbing as the main case, is crucial to help parties such as DBOC maintain the status quo during times of legal uncertainty until a final decision is rendered and litigation ends.

When DBOC appealed the district court’s decision to the Ninth Circuit, it also moved to enjoin the government’s order pending the appeal of DBOC’s case in the Ninth Circuit.  The motions panel granted the injunction.  This allowed DBOC to continue operating during the appeal process in the Ninth Circuit.

Once DBOC’s appeal in the Ninth Circuit was complete, it had to find another mechanism that would permit it to carry on business while waiting to hear whether the Supreme Court grants certiorari.

On January 20, 2014, DBOC filed with the Ninth Circuit a motion to stay the mandate pending petition for certiorari.  It requested that the Park Service’s mandate for DBOC to cease operations be suspended for ninety days.  This gives DBOC time to see if the Supreme Court grants DBOC’s petition for writ of certiorari.  A stay on a mandate to cease operations can be important because even if a company ultimately prevails in the Supreme Court, all will be for naught if the company had to shut down and release all its employees and customers during litigation.  DBOC’s motion listed issues that it sees as circuit splits, or disagreements between the Ninth Circuit’s decision and decisions of other circuit courts or the Supreme Court.  Circuit splits are issues that the Supreme Court may be interested in reviewing to promote consistency in case law, thus improving DBOC’s odds of having certiorari granted.

The government filed its opposition to DBOC’s request to stay the mandate on January 27, 2014.  The government noted that a motion for a stay may be denied because the motion “depends upon a petition for certiorari that is not likely to succeed.”   The government’s opposition argued that the circuit split conflicts listed by DBOC do not exist and that none of the issues presented by DBOC will draw the four votes required to grant certiorari.  The government also disputed factors that DBOC advanced in support of maintaining the status quo through a stay.  These disputed factors included that DBOC employees would be forced out of their housing, that DBOC would not be able to regain customers, and that terminating DBOC operations would have significant negative effects on the surrounding habitat and wildlife.

The Ninth Circuit granted DBOC’s motion to stay on the same day that the government filed its opposition brief.  The Ninth Circuit’s decision means that DBOC can continue to operate for ninety days during the process of filing and waiting for the Supreme Court’s disposition on DBOC’s petition for certiorari.

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