Hornbeck Offshore Services, L.L.C. v. Salazar , 701 F.3d 810 ( 2012 )

Case: 11-30936 Document: 00512064896 Page: 1 Date Filed: 11/27/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 27, 2012
No. 11-30936 Lyle W. Cayce
Clerk
HORNBECK OFFSHORE SERVICES, L.L.C.; BEE MAR - WORKER BEE,
L.L.C.; NORTH AMERICAN FABRICATORS, L.L.C.; BEE MAR, L.L.C.;
OFFSHORE SUPPORT SERVICES, L.L.C.; ET AL,
Plaintiffs-Appellees
v.
KENNETH SALAZAR, SECRETARY, DEPARTMENT OF INTERIOR, also
known as Ken Salazar; UNITED STATES DEPARTMENT OF INTERIOR;
BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT;
MICHAEL R. BROMWICH, In His Official Capacity as Director, Bureau of
Safety and Environmental Enforcement,
Defendants-Appellants
Appeal from the United States District Court
for the Eastern District of Louisiana
Before WIENER, ELROD and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
This case arises from the 2010 Deepwater Horizon accident in the Gulf of
Mexico. An explosion killed 11 workers, caused the drilling platform to sink, and
resulted in a major uncontrolled release of oil. At Presidential direction, those
events prompted the Department of the Interior to prohibit all new and existing
oil and gas drilling operations on the Outer Continental Shelf for six months.
The district court preliminarily enjoined enforcement of the moratorium. The
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single issue on appeal is whether Interior’s subsequent actions violated a specific
provision of the court’s injunction, justifying a finding of civil contempt. The
district court was certainly correct that Interior immediately took steps to avoid
the effect of the injunction, but we conclude none of those actions violated the
court’s order. We REVERSE.
FACTUAL AND PROCEDURAL HISTORY
The Deepwater Horizon tragedy occurred on April 20, 2010, as the
Transocean drilling crew was preparing to temporarily abandon BP’s discovery-
well prospect 52 miles from shore in almost 5,000 feet of water in the Gulf of
Mexico. The explosion and fire caused the platform to sink two days later. For
almost three months, oil gushed from the wellbore in the sea floor.
On April 30, the President ordered Secretary of the Interior Ken Salazar
to review the event and, within 30 days, to report on “what, if any, additional
precautions and technologies should be required to improve the safety of oil and
gas exploration and production operations on the outer continental shelf.” That
same day, with Order No. 3298, the Secretary established an Outer Continental
Shelf Oversight Board.
About a week later, the Secretary announced that “as a result of the
Deepwater Horizon explosion and spill, beginning April 20 – the date of the
explosion – no applications for drilling permits [would] go forward for any new
offshore drilling activity” until his report to the President. That report –
Increased Safety Measures for Energy Development on the Outer Continental
Shelf – was released on May 27. In addition to a variety of recommendations
calling for new studies, regulations, and inspections, the Safety Report
recommended (1) “a six-month moratorium on permits for new wells being
drilled using floating rigs” and (2) “an immediate halt to drilling operations on
the 33 permitted wells that [were] currently being drilled using floating rigs in
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the Gulf of Mexico.” This six-month moratorium appeared in the Executive
Summary but not in the body of the Safety Report.
The Safety Report represented that its recommendations had “been peer-
reviewed by seven experts identified by the National Academy of Engineering.”
It would later come to light that five of those experts never reviewed or agreed
to the blanket six-month moratorium. Although no wrongdoing was attributed
to Interior, an Office of Inspector General report cited by the district court found
that after expert review, White House officials had inappropriately modified it.
On the day after the Safety Report’s release, May 28, 2010, the Secretary
issued what the parties refer to as the “May Directive.” The May Directive
explained that based on the
report to the President, and further evaluation of the issue, [the
Secretary] find[s] at this time and under current conditions that
offshore drilling of new deepwater wells poses an unacceptable
threat of serious and irreparable harm to wildlife and the marine,
coastal, and human environment as that is specified in 30 C.F.R.
250.172(b).
...
[The Secretary also] direct[ed] a six month suspension of all
pending, current, or approved offshore drilling operations of new
deepwater wells in the Gulf of Mexico and the Pacific regions. . . .
For those operators who are currently drilling new deepwater wells,
they shall halt drilling activity . . . . [and] the [Mineral Management
Service (“MMS”)] shall not process any new applications for permits
to drill consistent with this directive.
Interior executed this directive by issuing a general Notice to Lessees and
Operators of Federal Oil and Gas Leases (“NTL No. 2010-N04” or “Notice to
Lessees”), effective May 30, which explained that MMS would not consider any
new applications for six months in “deepwater,” defined as depths greater than
500 feet. There were roughly 4,500 active leases in the Gulf’s deepwater at the
time. MMS also transmitted individual letters to the 33 operators of permitted
wells that were being drilled at the time, providing notification that their
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activities were temporarily suspended “consistent with the Secretarial Directive
and Notice to Lessees.”
Hornbeck Offshore owns and operates a fleet of vessels that support
deepwater exploration. It had contracts with nearly all of the operators of the
33 permitted wells ordered closed. Along with close to forty other companies
involved in oil and gas drilling, exploration, and production, Hornbeck filed suit
on June 7 seeking declaratory and injunctive relief. The complaint alleged that
the May Directive and the Notice to Lessees were inadequately explained and
justified, in violation of the Administrative Procedures Act (“APA”), and that in
issuing the Directive and the Notice the Secretary exceeded his authority under
the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. § 1332.
Finding only the APA, not the citizen-suit provision of the OCSLA,
pertinent, on June 22 the district court granted Hornbeck the preliminary
injunction at the center of this case. That injunction ordered that Interior,
MMS, and
their servants, agents, successor agencies and employees, and all
persons in active concert of participation with them, who receive
actual Notice of this Preliminary injunction [were] immediately
prohibited from enforcing the Moratorium, entitled “Suspension of
Outer Continental Shelf (OCS) Drilling of New Deepwater Wells”
dated May 28, 2010, and NTL No. 2010-N04 seeking
implementation of the Moratorium, as applied to all drilling on the
OCS in water at depths greater than 500 feet.
The Secretary issued a press release responding to the injunction that day,
stating that “[t]he decision to impose a moratorium on deepwater drilling was
and is the right decision” and that the government would appeal the ruling to
the Fifth Circuit. He concluded the release by announcing that on the basis of
“ever-growing evidence, I will issue a new order in the coming days that
eliminates any doubt that a moratorium is needed, appropriate, and within our
authorities.”
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Simultaneously, Interior took some steps to comply with the injunction.
Interior again sent individually addressed letters to the operators of the 33 wells
at which it had ordered a halt to production, explaining that neither the Notice
to Lessees “nor the order directing a suspension of operations [the May
Directive] has legal effect on your operations at this time.” In contrast to its
actions in imposing the moratorium, though, Interior did not notify the industry-
at-large, namely the operators and lease holders not currently drilling.
A letter bearing the subject line “Immediate Prohibition from Enforcing
the Moratorium on Drilling New Deepwater Wells” went to all Interior
employees on June 23. It excerpted the district court’s order and explained that
employees were “not to take any action to enforce the Moratorium issued on May
28, 2010, or to enforce NTL No. 2010-N04” until the Secretary gave additional
orders.
Also on June 23, the Secretary appeared before the United States Senate
Subcommittee on Interior, Environment, and Related Agencies. Though his
scheduled topic was bureaucratic reorganizations affecting MMS, the Secretary
made several comments about the moratorium that bear on this litigation.
Interior immediately appealed the injunction order to this court. It also
filed a motion for a stay of the injunction. Interior noted in its filing that it
intended to issue a new, similar moratorium. A divided panel of our court
denied the stay request, without prejudice to the Secretary’s “right to apply for
emergency relief if he [could] show that drilling activity by deepwater rigs has
commenced or [was] about to commence.” Four days after that ruling, on July
12, 2010, Interior rescinded the May Directive. A “July Directive” was
substituted. Without doubt, the new suspension directive was the same “in
scope and substance.” The difference was that it contained a more thorough
explanation of reasons and referred to more voluminous evidentiary support.
Interior returned to this court that day, arguing that we should vacate the
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district court’s June 22 injunction of the May Directive as moot. We ruled that
although the Secretary had “asserted substantial reasons suggesting mootness,”
our record was inadequate to decide the issue. A limited remand was ordered
for the district court to consider the issue of mootness.
On remand, the district court held that the suit was not moot:
Because this Court has determined that the process leading to the
first moratorium lacks probity; because this Court has determined
that no rational nexus exists between the fact of the tragic
Deepwater Horizon blowout and placing an attainder of universal
culpability on every other deepwater rig operator in the Gulf of
Mexico; because this Court has determined that the first
moratorium is invalid in law; and because the Interior Secretary’s
second moratorium arguably fashions no substantial changes from
the first moratorium, the government has failed to circumvent the
voluntary cessation exception to mootness.
The court also stated that the rescission of the May Directive did have
“some administrative force,” a statement we would interpret later that month
to mean that “the preliminary injunction enjoined no longer ha[d] any operative
effect.” Concluding further that any opinion by our “court on the merits and
legality of the issuance of the preliminary injunction would address an
injunction that is legally and practically dead,” we dismissed Interior’s merits
appeal as moot on September 29.
After the district court denied Interior’s motion to dismiss for mootness,
but before this court’s ruling on Interior’s appeal, Hornbeck filed a motion to
enforce the preliminary injunction. In that motion Hornbeck argued that by
rescinding and replacing the May Directive, Interior had chosen to disobey the
district court’s order rather than permit it to undergo an orderly process of
judicial review. On September 30, the district court determined that “[i]n light
of the United States Court of Appeals for the Fifth Circuit’s September 29th
opinion declaring moot the appeal of the preliminary injunction, the plaintiffs’
motion is DENIED.”
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The Secretary lifted the July Directive on October 12, 2010, which was a
few weeks before the moratorium’s anticipated six-month expiration. This
effectively mooted the Hornbeck suit. Hornbeck moved for attorneys’ fees on two
bases: (1) civil contempt and (2) bad-faith litigation tactics. The district court
expressly declined to reach the bad-faith basis. Instead, it concluded that “the
plaintiffs have established the government’s civil contempt of its preliminary
injunction order” by clear and convincing evidence. It would later approve an
award of both fees and costs of approximately $530,000. We now consider the
actions the district court identified as contemptuous and analyze whether they
violated its written order.
DISCUSSION
Inherent in the authority of the federal courts is the contempt power. See
Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980). The availability of
that sanction promotes “the due and orderly administration of justice” and
safeguards the court’s authority. Id. (quoting Cooke v. United States, 267 U.S.
517, 539 (1925)). “Because inherent powers are shielded from direct democratic
controls,” the Supreme Court instructs that “they must be exercised with
restraint and discretion.” Id. Rather than stemming from a “broad reservoir,”
they are “implied power[s,] squeezed from the need to make the court function.”
Crowe v. Smith, 151 F.3d 217, 226 (5th Cir. 1998) (internal quotations omitted).
We review contempt findings for abuse of discretion, but “review is not
perfunctory.” Id; see also United States v. Local 1804-1, Int’l Longshoremen’s
Ass’n, 44 F.3d 1091, 1095-96 (2d Cir. 1995) (appellate review of contempt order
“more rigorous than would be the case in other situations in which abuse-of-
discretion review is conducted”). Facts found by the district court will be
accepted as true unless clearly erroneous, but “the interpretation of the scope of
the injunctive order[] is a question of law to be determined by the independent
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judgment of this Court.” Drummond Co. v. Dist. 20, United Mine Workers, 598
F.2d 381, 385 (5th Cir. 1979).
A. Civil Contempt Finding
“A party commits contempt when he violates a definite and specific order
of the court requiring him to perform or refrain from performing a particular act
or acts with knowledge of the court’s order.” Travelhost, Inc. v. Blandford, 68
F.3d 958, 961 (5th Cir. 1995). For civil contempt, this must be established by
clear and convincing evidence. Id.
Clear and convincing evidence is that weight of proof which produces in
the mind of the trier of fact a firm belief or conviction . . . so clear, direct
and weighty and convincing as to enable the fact finder to come to a clear
conviction, without hesitancy, of the truth of precise facts of the case.
Shafer v. Army & Air Force Exch. Serv., 376 F.3d 386, 396 (5th Cir. 2004)
(quotation marks and citations omitted).
The district court identified the proper burden of proof and legal
standards, then laid out the reasons for its contempt finding. The court
identified three categories of action that it held, when viewed “in tandem” with
the national importance of the case and the reimposition of the moratorium,
supported a civil contempt finding. Specifically, it found “defiance” and
“determined disregard” in (1) Interior’s failure to seek a remand from the district
court to the agency before taking new administrative action; (2) its continuously
stated public resolve to restore the moratorium; and (3) its communications to
industry that a new moratorium was in the offing.
Hornbeck and Interior dispute whether our law requires a remand in this
type of situation. Each side has marshaled authorities.1 This case does not
1
Compare Broussard v. U.S. Postal Serv., 674 F.2d 1103, 1108 n.4 (5th Cir. 1982)
(stating that “prevailing jurisprudence” holds “that once a judicial suit is filed an agency
should not unilaterally reopen administrative proceedings – the agency should first ask the
court to remand the case to it”); with Am. Farm Lines v. Black Ball Freight Serv., 397 U.S.
532, 542 (1970) (noting that “since the stay order did not forbid it from acting . . . , it was not
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hinge on whose view is correct. Although a district court need not “spell out in
detail the means in which its order must be effectuated,” the injunction’s
provisions must be “clear in what conduct they [have] mandated and prohibited.”
Am. Airlines, Inc. v. Allied Pilots Ass’n, 228 F.3d 574, 578-79 (5th Cir. 2000).
The injunction did not state that Interior had to seek permission for a remand
before developing additional rules on offshore drilling in the Gulf. The only
mandate about returning to the court was that Interior provide a report
describing “the manner and form” of its compliance with the injunction within
21 days. There has been no allegation that it failed in that duty. For Interior
to have been in contempt, the injunction would have had to include an obligation
to petition for a remand. Cf. Armstrong v. Exec. Office of the President, 1 F.3d
1274, 1289 (D.C. Cir. 1993) (vacating civil contempt against federal agencies
because district court’s “order did not expressly direct” cited conduct).
There were several communications to the industry manifesting Interior’s
“public resolve” to overcome the injunction. Six days after the injunction was
entered, Interior convened a meeting in Washington, D.C., attended by Secretary
Salazar and other high-ranking Interior officials. According to an affidavit from
an attendee,2 the question was posed to the government representatives
“whether deepwater drilling in the Gulf could resume at that time, given the
existence of an injunction against the previously issued deepwater drilling
moratorium.” The response by an Interior Assistant Secretary was that it was
his Department’s intention “to issue a second moratorium,” a statement the
affiant understood as “a signal that the cost and expense of resuming drilling
necessary for the [agency] to seek permission of the court” before ruling).
2
Interior has not disputed the accuracy of this account, provided by James W. Noe.
Noe was Senior Vice President, General Counsel, and Chief Compliance Officer of Hercules
Offshore, Inc. as well as the Executive Director of the Shallow Water Drilling Coalition.
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should not be undertaken by industry because the second moratorium would
prevent that activity from continuing once it was issued.”
The relevant public communications, acknowledged by Interior, are the
Secretary’s press release responding to the injunction and his testimony to
Congress the next day. The press release does, as the district court recognized,
evince a resolve to reissue the moratorium. That intent was made explicit before
the Senate Subcommittee, just as it would be in Interior’s motion for a stay in
this court.
Q. Mr Secretary, do you plan to issue a new moratorium on all
exploration of oil in the Gulf of Mexico at depths of more than 500
feet?
A. The answer to that is yes, Senator Alexander.
Hornbeck also directs us to an answer the Secretary provided Senator
Murkowski, in which he stated:
[W]ith respect to the moratorium, I believe it was the correct
decision. I believe it’s a correct decision today. And with all due
respect to the honorable court, we disagree with the court. And so
we are taking that decision on appeal.
At the same time, it is important that this . . . moratorium
stay in place until we can assure that deepwater drilling can be
done in a safe way. We’re not there today. And so we move forward
with the executive authority which I have to make sure that the
moratori[um] does, in fact, stay in place.
Here, as well as in responding later to Senator Feinstein, the Secretary
referred to the moratorium as “in place.” Hornbeck argues that terminology is
a sign of defiance since an injunction prohibiting enforcement of the moratorium
had issued. Interior regards the choice of words as a simple misstatement and
also claims that because the May Directive had not been rescinded, the notion
that the moratorium was “in place” was in some sense accurate.
Taken together, the comments to industry, to the Senate, and to the public
support the district court’s factual conclusion that Interior was intent on
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reinstating a moratorium that imposed the same limitations as the May
Directive from the moment the court enjoined it. Neither harboring that intent
nor imposing a new moratorium, though, was a violation of the court order. The
district court did not conclude otherwise. Hornbeck’s motion for contempt
focused “on the government’s imposition of a second blanket moratorium hurried
on the heels of the first.” According to the district court, using the issuance of
the July Directive as a reason for contempt would require reading its
“preliminary injunction Order too broadly.”
The district court explained that the injunction had been based on a
finding that “the plaintiffs were substantially likely to prove that the process
leading to the first moratorium was arbitrary and capricious” in violation of the
Administrative Procedure Act. See, e.g., Jupiter Energy Corp. v. FERC, 407 F.3d
346, 349 (5th Cir. 2005) (explaining that the Act requires “reasoned analysis”
and a cogent explanation for agency action). In “answer to the plaintiffs’ quarrel
with the second moratorium,” the court explained that Interior took the position
that it had “met the Court’s concerns and resolved each of the procedural
deficiencies in the first.” Although the court expressed skepticism about
whether that would be borne out, it then ruled that under “these facts alone,” it
“could not, at least not clearly and convincingly, find the government in
contempt of the preliminary injunction Order.” We agree. See Test Masters
Educ. Servs., Inc. v. Singh, 428 F.3d 559, 582 (5th Cir. 2005).
Hornbeck’s complaint also asserted that a six-month moratorium on all
drilling exceeded the authority delegated to Interior under the Outer
Continental Shelf Lands Act. The court never reached that issue. Had the May
Directive been enjoined on that basis, this would be a very different case.
Instead, the sole justification for the preliminary injunction that did issue was
a procedural failure to explain. The court order did not explicitly prohibit a new,
or even an identical, moratorium. It is true that the district court identified
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additional potential APA deficiencies in the process surrounding the July
Directive,3 but those potential defects are presented here as a basis supporting
the contempt. Hornbeck’s “victory” was fleeting and frustrating to its goal of
actually allowing drilling to proceed.
In essence, the company argues that by continuing in its pursuit of an
effective moratorium, the Interior Department ignored the purpose of the district
court’s injunction. If the purpose were to assure the resumption of operations
until further court order, it was not clearly set out in the injunction. A more
broadly worded injunction that explicitly prohibited the end-run taken by
Interior would have set up issues more clearly supportive of contempt.
Interior was carrying out a policy decision made by the President. On
display throughout was the “decision, activity . . . and dispatch” that the
Framers envisioned for the Executive Department of government. THE
FEDERALIST NO. 70, at 423 (Alexander Hamilton) (Clinton Rossiter ed., 1961).
Litigation was not able to keep pace with these developments. See id.
(discussing the Executive’s unique role “in the most critical emergencies of the
state”). The national importance of this case weakens, not strengthens, the
propriety of the court’s contempt finding. The controversial policy decisions that
the May and July Directives reflected were made at the highest level of
government. In implementing those decisions, we do not discern a violation of
a clear provision of the district court’s order by the words expressed or actions
taken by the Secretary.
3
In its September 1, 2010, order refusing to dismiss the Hornbeck suit as moot, the
district court raised questions regarding whether the “618 new documents and over 6000
pages” that Interior pointed to as evidence of the deliberative process that went into the
second moratorium truly evidenced such deliberations. It noted that nearly every statement
in the July Directive had been “anticipated by documents in the May 28 record, or by
documents that were otherwise available to the Secretary before May 28.” It also recognized,
though, that since the Hornbeck complaint did not concern the July Directive, the issue of
whether the second moratorium complied with the APA was not part of this suit.
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The district court dealt expeditiously and forcefully with extremely
significant litigation. The potential APA violations that led to the initial
injunction are not at issue today, but such violations, if significant, would justify
a district court’s consideration of an injunction. Our decision is a narrow one.
We conclude that there is no clear and convincing evidence that Interior’s actions
after the injunction violated the clear terms of the injunction as drafted.
Therefore, there was no civil contempt.
B. Bad Faith Litigation
In the alternative, Hornbeck suggests the Equal Access to Justice Act
(“EAJA”) as a basis for the award of attorneys’ fees. See 28 U.S.C. § 2412(b), (d).
Interior counters that this alternative is inadequately briefed. See Fed. R. App.
P. 28(a)(9), (b). We agree.
Hornbeck’s bare-bones briefing of this issue fails to explain how the
substantive and procedural requirements for an award under the Act are
satisfied. First, we have held that to impose that sanction the “court must make
a specific finding that the sanctioned party acted in bad faith.” Matta v. May,
118 F.3d 410, 416 (5th Cir. 1997).4 The court refrained from reaching the issue
of bad faith and Hornbeck has offered no argument as to why that fact is not
dispositive. Second, the party wishing to recover under this Act must “within
thirty days of a final disposition in the adversary adjudication, submit to the
agency an application which shows that the party is a prevailing party and is
eligible to receive an award.” Boland Marine & Mfg. Co. v. Rihner, 41 F.3d 997,
1006 (5th Cir. 1995). In Boland, we declined to resolve whether a party was
4
See generally Sanchez v. Rowe, 870 F.2d 291, 293 (5th Cir. 1989) (explaining that the
EAJA authorizes attorneys’ fees when the Government runs afoul of the common-law rule
prohibiting parties from acting “vexatiously, wantonly, or for oppressive reasons.”) (quotation
and citation omitted). Further, the district court characterized Hornbeck’s claim as a
“common-law claim of bad faith,” although its motion had invoked the statute.
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entitled to attorneys’ fees without evidence in the record that these procedures
had been met. Id. Hornbeck has not alleged it complied.
Finally, without analysis, Hornbeck declares itself to be a prevailing party
citing to Dearmore v. City of Garland, 519 F.3d 517, 521-24 (5th Cir. 2008).
Dearmore announces a three-factor test for determining whether a plaintiff who
receives a preliminary injunction is a prevailing party under a civil rights
provision, 42 U.S.C. § 1988(b), when “the district court makes an unambiguous
indication of probable success on the merits of his claim and the defendant
subsequently moots the case before trial in direct response to the court’s
preliminary injunction order.” Id. at 521, 524. Hornbeck has not engaged with
any of those considerations. Importantly, it has not explained how it can escape
from its decision to stipulate to dismiss the case or from the district court’s
conclusion that the July Directive did not moot the case because the voluntary-
cessation exception applied. E.g., Pederson v. La. State Univ., 213 F.3d 858, 873
(5th Cir. 2000).
This potential basis for maintaining the award is waived because it has
not been meaningfully briefed. Nat’l Bus. Forms & Printing, Inc. v. Ford Motor
Co., 671 F.3d 526, 531 n.2 (5th Cir. 2012) (citing Fed. R. App. P. 28).
The finding of contempt and the award of fees and costs are REVERSED.
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JENNIFER WALKER ELROD, Circuit Judge, dissenting:
Because I would hold that the district court did not abuse its discretion
in holding Interior in contempt, I respectfully dissent. While the majority views
Interior’s acts in isolation, the totality of the circumstances supports the able
district court’s decision.
I.
The Gulf of Mexico is one of the largest oil and gas basins in the world.
Its wells accounted for almost one-third of the nation’s domestic oil production
in 2009. The Gulf’s Outer Continental Shelf (“OCS”) has thousands of active
leases, most in the deepwater, and is a vital national resource that Congress
has determined “should be made available for expeditious and orderly
development, subject to environmental safeguards, in a manner which is
consistent with the maintenance of competition and other national needs.” 43
§ U.S.C. 1332(3).
Deepwater drilling, exploration, and production operations in the Gulf of
Mexico keep thousands of Americans at work. An intricate network of
companies cooperate to provide the technology, assets, and human capital
necessary to keep the industry in motion. Cf. Interior’s Safety Report at 4 (“The
OCS oil and gas industry provides relatively high-paying jobs in drilling and
production activities, as well as employment in supporting industries. Offshore
operations provide direct employment estimated at 150,000 jobs.”). Take, for
example, Hornbeck. It contracts with oil and gas production companies to
provide supply vessels that are specifically designed to assist in the deepwater
drilling process. In 2010, it employed about 1300 people and maintained a
working relationship with almost 2000 other vendors and service providers.
Hornbeck is but one of thousands of companies whose viability depends on
deepwater drilling in the Gulf.
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The Deepwater Horizon tragedy rocked not only the business of
deepwater drilling in the Gulf, but also the region’s entire economic and
ecological system. Its devastating consequences reverberated across the nation.
In its wake, the President ordered Secretary Salazar to investigate the
Deepwater Horizon incident and recommend, if necessary, additional safety
requirements for OCS exploration and production efforts. Secretary Salazar
halted consideration of all new applications for drilling permits in the Gulf
while he complied with the President’s order.
During the course of Interior’s investigation, the Mineral Management
Service (now known as the Bureau of Ocean Energy Management) inspected
twenty-nine of the thirty-three permitted wells that were being drilled in the
Gulf’s deepwater. Of the twenty-nine inspected wells, twenty-seven were fully
compliant with all regulations. Only two had minor violations, which were
quickly corrected.
Interior’s research culminated in the Safety Report, issued on May 27,
2010, about five weeks after the Deepwater Horizon explosion. The body of the
Safety Report included numerous proposals to improve OCS drilling safety,
such as equipment enhancements, testing requirements, and certification
procedures. The report’s executive summary, however, included an additional
recommendation: a six-month halt to all drilling in the Gulf of Mexico.
Although the Safety Report stated that all of its recommendations were peer-
reviewed by seven experts identified by the National Academy of Engineering,
five of those experts, plus three consulting experts, later stated that the report
misrepresented their position. According to these experts, the moratorium
recommendation “was added after the final review,” and, therefore, not a part
of their analysis. An investigation by the Interior’s Office of Inspector General
later revealed that a White House edit “led to the implication that the
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moratorium recommendation had been peer-reviewed by the experts.” One day
after it published the Safety Report, Interior issued a memorandum effectuating
the six-month moratorium (the “May Moratorium”).
Hornbeck, along with numerous other companies in the deepwater
drilling industry, quickly filed suit to enjoin Interior from enforcing the May
Moratorium. Among other things, they argued that the May Moratorium
violated the APA because it was arbitrary and capricious. The district court
held a hearing on Plaintiffs’ motion, at which it rigorously questioned counsel
for both parties for over two hours. According to the district court, the
government responded to one of its questions with an answer that was “wholly
at odds with the story of the misleading text change by a White House official,
a story the government does not now dispute.” One day after the hearing, the
district court granted Plaintiffs’ motion, carefully detailing the basis for its
decision in a twenty-two page opinion. The district court then entered an order
that “immediately prohibited” Interior from enforcing the moratorium “as
applied to all drilling on the OCS in water at depths greater than 500 feet.” The
order further specified that Interior was to file, within twenty-one days, a report
“setting forth in detail the manner and form in which [Interior] ha[d] complied
with the terms of [the] Preliminary Injunction.”
Immediately following the court’s entry of the preliminary injunction,
Interior took steps to ensure that the intended effect of the May
Moratorium—that no one drill in the Gulf—remained intact. For example:
C Within hours, Secretary Salazar publicly announced that the May
Moratorium “was and is the right decision” and promised to “issue
a new order in the coming days that eliminates any doubt that a
moratorium is needed, appropriate, and within our authorities.”1
1
The Secretary’s comments came on the heels of the district court’s holding that the
May Moratorium was so lacking in scientific support that it was likely arbitrary and
capricious. The short time that elapsed between entry of the district court’s order and these
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C The next day, Secretary Salazar attended a Senate subcommittee
hearing, where he again declared that he would issue an identical
moratorium in short order.
C At the Senate hearing, Secretary Salazar twice referred to the
moratorium as “in place.” First, after noting his disagreement with
the district court’s order, Secretary Salazar stressed, “it is
important that this . . . moratorium stay in place until we can
assure that deepwater drilling can be done in a safe way.” Then, he
responded to a question concerning the May Moratorium’s effect on
drilling in Alaska specifically stating: “You know, the moratorium
that is in place does, in fact, apply to Alaska wells and to the
exploration of wells that Shell had proposed to put into place.”
C Interior then hosted a meeting with numerous oil and gas
representatives. Although it acknowledged the injunction, it again
emphasized that it intended to issue a second moratorium. An
industry participant averred that this signaled “that the cost and
expense of resuming drilling should not be undertaken by [the]
industry because the second moratorium would prevent that
activity from continuing once it was issued.”
C Interior appealed the district court’s order and moved to stay the
injunction pending appeal. In its motion, Interior proclaimed that
“reducing deepwater drilling risks is a national priority; the
Secretary will pursue all avenues for addressing risky operations,
and will take new and immediately effective action as necessary.”2
C Further, Interior decided to notify thousands fewer entities of the
preliminary injunction order than it had of the May Moratorium.
When it issued the May Moratorium, Interior sent written notice to
all 4500 active leases in the Gulf’s deepwater. By contrast, its
notice regarding the preliminary injunction went to only the thirty-
comments is, therefore, an important part of the overall contempt equation. Regardless of
whether Interior had authority to issue a new moratorium, the district court recognized that
the immediacy of the Secretary’s public statements showed a “determination to issue a new
moratorium even before the consideration of any new information.”
2
This court denied Interior’s motion to stay, but ordered expedited briefing on its
appeal.
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three wells that were being drilled at the time of the Deepwater
Horizon incident.
Ultimately, these actions had the same effect as the May Moratorium: no one
resumed drilling.
As promised, Interior issued a new moratorium (the “July Moratorium”)
in place of the May Moratorium. As the majority recognizes, the July
Moratorium was “without doubt” the same in “scope and substance” as the May
Moratorium. They were mirror images of one another, covering the same rigs
and the same deepwater drilling for the same period. Indeed, as the district
court explained, “nearly every statement in the July 12 decision memorandum
is anticipated by documents in the [May Safety Report] record, or by documents
that were otherwise available to the Secretary” at the time he issued the May
Moratorium. Interior issued the July Moratorium without seeking remand to
reopen its administrative proceedings, despite the fact that its expedited appeal
of the district court’s preliminary injunction order on the May Moratorium was
pending before this court.
In motions before both the district court and this court, Interior sought to
avoid a final decision on the merits regarding whether the May Moratorium was
arbitrary and capricious. It argued that its rescission of the May Moratorium
rendered the issue moot. After a series of proceedings, including a remand to
the district court, we declined to address an injunction that was “legally and
practically dead,” and denied Interior’s merits appeal as moot. In light of that
decision, the district court declined to further enforce the preliminary
injunction. Interior lifted the July Moratorium on October 12, 2010, allowing
drilling operations to resume and essentially mooting Plaintiffs’ suit.
Plaintiffs moved for civil contempt in the district court, seeking their
attorneys’ fees in the suit. They argued that Interior’s actions following the
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entry of the court’s preliminary injunction reflected a “calculated plan to
interfere with enforcement of a remedy obtained by Plaintiffs and to insulate
the moratorium decision from judicial review.” By this time, the district court
had reviewed thousands of pages, held numerous hearings, thoughtfully
considered and decided multiple motions, and confronted the very issues in
play in the contempt order. In short, the district court knew this case inside
and out. Viewing the totality of the circumstances, the district court concluded
that Interior’s actions amounted to a “determined disregard” of the preliminary
injunction order and found Interior in contempt.
II.
“Courts have, and must have, the inherent authority to enforce their
judicial orders and decrees in cases of civil contempt. Discretion, including the
discretion to award attorneys’ fees, must be left to a court in the enforcement
of its decrees.”3 Cook v. Ochsner Found. Hosp., 559 F.2d 270, 272 (5th Cir.
1977) (citing United States v. United Mine Workers, 330 U.S. 258, 303-304
3
On appeal, this Court reviews a district court’s finding of contempt for abuse of
discretion. Whitcraft v. Brown, 570 F.3d 268, 271 (5th Cir. 2009) (citing United States v. City
of Jackson, 359 F.3d 727, 731 (5th Cir. 2004)). Relying on the Second Circuit’s opinion in
United States v. Local 1804-1, the majority opinion suggests that a “more rigorous” abuse-of-
discretion standard applies to the district court’s civil contempt finding and award of
compensatory sanctions. 44 F.3d 1091, 1095–96 (2d Cir. 1995) (stating the proposition that
appellate review of a contempt order is “more rigorous than would be the case in other
situations in which abuse-of-discretion review is conducted.”). If the majority opinion simply
means that a district court’s discretion is subject to certain limitations—such as the clear and
convincing evidentiary standard—in the civil contempt context, then I agree. See, e.g.,
Spallone v. United States, 493 U.S. 265 (1990) (noting that the use of the contempt power
“places an additional limitation on a district court’s discretion” because “in selecting contempt
sanctions, a court is obliged to use the ‘least possible power adequate to the end proposed”
(internal quotation and citation omitted)); Travelhost, Inc. v. Blandford, 68 F.3d 958, 961 (5th
Cir. 1995) (noting that a court must find contempt by clear and convincing evidence). If,
however, the majority has applied a heightened standard of review on appeal (essentially
abuse-of-discretion-plus), then I am aware of no support in our precedent for that approach.
To the contrary, we have consistently applied an ordinary abuse-of-discretion standard in the
civil contempt context. See, e.g., Whitcraft, 570 F.3d at 271; Jackson, 359 F.3d at 731; Am.
Airlines, Inc. v. Allied Pilots Ass’n, 228 F.3d 574, 578 (5th Cir. 2000). As such, we are not at
liberty to deviate from the ordinary abuse-of-discretion standard.
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(1947)); see Spallone v. United States, 493 U.S. 265, 276 (1990) (expressing “the
axiom that courts have inherent power to enforce compliance with their lawful
orders through civil contempt” (internal quotation marks omitted)); Positive
Software Solutions, Inc. v. New Century Mortg. Corp., 619 F.3d 458, 460 (5th
Cir. 2010) (recognizing district courts’ inherent authority to impose sanctions)
(citing Chambers v. NASCO, Inc., 501 U.S. 32, 32 (1991)). “The theory for
allowing attorneys’ fees for civil contempt is that civil contempt is a sanction to
enforce compliance with an order of the court or to compensate for losses or
damages sustained by reason of noncompliance.” Cook, 559 F.2d at 272. A
district court’s contempt power extends to the actions of government officials
with equal force. See Gilbert v. Johnson, 490 F.2d 827, 831 n.6 (5th Cir. 1974)
(affirming the district court’s “right to apply the sanctions of contempt even
though Government officials are involved”).
A court may exercise its contempt power over actions that constitute
“disobedience to the orders of the Judiciary.” Chambers, 501 U.S. at 44. While
the relevant order must be specific and definite, the district court “need not
anticipate every action to be taken in response to its order, nor spell out in
detail the means in which its order must be effectuated.” Am. Airlines, 228 F.3d
at 578 (citing N. Alamo Water Supply Corp. v. City of San Juan, 90 F.3d 910,
917 (5th Cir. 1996)). In other words, an order simply must be “framed so that
those enjoined will know what conduct the court has prohibited.” Id. (quoting
Meyer v. Brown & Root Const. Co., 661 F.2d 369, 373 (5th Cir. 1981)).
In analyzing a district court’s contempt finding, it is essential to view the
facts in their totality. This court should remain cognizant that the imposition
or denial of sanctions is necessarily “fact-intensive.” Test Masters Educ. Servs.
Inc. v. Singh, 428 F.3d 559, 582 (5th Cir. 2005) (quoting Thomas v. Capital Sec.
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Serv., Inc., 836 F.2d 866, 873 (5th Cir. 1988)). Factual findings are subject to
the deferential “clear error” standard on appeal. Whitcraft, 570 F.3d at 271; see
Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573–74 (1985) (noting
that clear error does not exist if a factual finding is “plausible in light of the
record viewed in its entirety,” even if we would have weighed the evidence
differently (emphasis added)). The district court judge, not this court, is in the
“best position to review the factual circumstances and render an informed
judgment as he is intimately involved with the case, the litigants, an the
attorneys on a daily basis.” Test Masters, 428 F.3d at 582. A “second-hand”
review of the facts adds “no advantage,” as the “district court will have a better
grasp of what is acceptable trial-level practice among litigating members of the
bar.” Id.
The majority opinion weakens the contempt power of federal district courts
by making unreasonably restrictive fact findings of its own to reach a narrow
and unworkably technical result. It stresses that the preliminary injunction
order did not expressly prohibit Interior from harboring an intent to reinstate
an identical moratorium, or from stating that intent in the public forum.
Likewise, the preliminary injunction order did not expressly require Interior “to
seek permission for a remand before developing additional rules on offshore
drilling in the Gulf.” In essence, the majority opinion suggests that a litigant
can undermine and avoid a district court’s order, provided that it does not, as
a very technical matter, engage in activity that the order expressly prohibits.
This court’s precedent is not so cramped, however. A district court order
need not anticipate every creative or strategic tactic a litigant may take to
evade it. See N. Alamo, 90 F.3d at 917 (“Although this order does not
choreograph every step, leap, turn, and bow of the transition ballet, it specifies
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the end results expected and allows the parties the flexibility to accomplish
those results.”); see also Am. Airlines, 228 F.3d at 576. American Airlines is
instructive on this point. There, the district court issued a temporary
restraining order mandating that union officials call off a “sick-out” by the
union’s pilot members. Id. While the union officials engaged in a number of
technical steps to comply with the court order, their initial communication was
“so lacking in authoritative forcefulness that [it] either [was] not heard at all .
. . or [was] discounted as being merely stage lines parroted for the benefit of
some later judicial review.” Id. at 921 (quoting United States Steel Corp. v.
United Mine Workers of Am., Dist. 20, 598 F.2d 363 (5th Cir. 1979)). The
district court held certain union defendants in contempt based on this “wink-
and-a-nod” approach. Id. at 928-29. We affirmed. Am. Airlines, 228 F.3d at
576. Other cases decided by courts in this circuit illustrate the same general
approach. See S.E.C. v. Reynolds, No. 3:08-CV-438-B, 2011 WL 903395, at *1
(N.D. Tex. Mar. 16, 2011) (holding a defendant in contempt for violating the
terms of an asset freeze order after he failed to pay taxes and assessments on
a condominium, even though the order did not expressly require the defendant
to pay taxes or assessments); Greater New Orleans Fair Hous. Action Ctr. v. St.
Bernard Parish, 641 F. Supp. 2d 563, 565 (E.D. La. 2009) (concluding that a
Parish Council’s moratorium on the construction of multi-family housing
violated the terms of a consent order, even though that order did not explicitly
prohibit the Council from imposing the moratorium).
Here, the purpose of the district court’s order was clear: Interior could not
enforce the May Moratorium on drilling. By, among other things, referring to
the May Moratorium as “in place” without simultaneously indicating that
drilling could proceed pursuant to the court’s injunction, emphasizing its
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immediate intent to issue a new, identical moratorium, and notifying only the
thirty-three wells that were being drilled at the time of the Deepwater Horizon
incident, Interior ensured that the May Moratorium remained de facto in place.
Considering these circumstances as a whole, the district court concluded that
“each step the government took following the Court’s imposition of a
preliminary injunction showcase[d] its defiance” of the court’s order.
Viewing the facts and the district court’s preliminary injunction in their
totality, I cannot say that the district court abused its discretion in finding
Interior in contempt. For that reason, I would affirm.
III.
In reaching its conclusion, the majority opinion stresses that this was a
case of national importance—a fact that, in the majority opinion’s view,
“weakens, not strengthens the propriety of [a] court’s contempt finding.” I find
this troubling.
Our Founding Fathers stressed the necessity of protecting the
independence of the Judiciary, especially in light of its unique vulnerability to
attack by the other branches of government. See The Federalist No. 78 at 227
(Alexander Hamilton) (Roy P. Fairfield ed., 1961) (“[T]he judiciary is the
weakest of the three departments of power . . . all possible care is requisite to
enable [the Judiciary] to defend itself.”); see also N. Pipeline Const. Co. v.
Marathon Pipe Line Co., 458 U.S. 50, 58 (1982) (“The Federal Judiciary was
. . . designed by the Framers to stand independent of the Executive and
Legislature—to maintain the checks and balances of the constitutional
structure.”).
The Judiciary’s inherent contempt power is essential to preserve judicial
independence and to ensure that judicial decrees are not impotent. In
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describing its nature and importance, the Supreme Court has stressed that
“[t]he power to punish for contempt . . . is essential to . . . the enforcement of the
judgments, orders and writs of the courts and, consequently, to the due
administration of justice.” Ex parte Robinson, 86 U.S. 505, 510 (1873); see
Gompers v. Buck’s Stove & Range Co., 221 U.S. 418, 450 (1911) (“[T]he
[contempt] power has been uniformly held to be necessary . . . to enable [the
Judiciary] to enforce its judgments and orders necessary to the due
administration of law and the protection of the rights of citizens.”); see also In
re Bradley, 588 F.3d 254, 265 (5th Cir. 2009) (quoting Gompers, 221 U.S. at
450). Leaving the Judiciary powerless to enforce its own orders incontestably
renders it a subordinate branch of government.
As the majority opinion states, the “controversial policy decisions” at issue
here were “made at the highest levels of government.” But that does not
insulate those decisions from judicial review. The district court determined that
the Interior’s actions amounted to a “determined disregard” of its preliminary
injunction order. The court’s power to enforce its orders must remain intact,
even in the midst of the most critical emergencies of the state. Simply put, the
Judiciary may be the least dangerous branch, but it is not entirely toothless.
For these reasons, I respectfully dissent.
25