Shell Offshore Inc. v. Greenpeace, Inc. ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SHELL OFFSHORE INC., a Delaware No. 15-35392
corporation; SHELL GULF OF MEXICO
INC., a Delaware corporation, DC No.
Plaintiffs-Appellees, 3:15 cv-0054
SLG
v.
GREENPEACE, INC., a California OPINION
corporation,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Alaska
Sharon L. Gleason, District Judge, Presiding
Argued and Submitted
August 18, 2015—Pasadena, California
Filed March 4, 2016
Before: Alex Kozinski, A. Wallace Tashima,
and Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Tashima
2 SHELL OFFSHORE V. GREENPEACE
SUMMARY*
Mootness
The panel dismissed as moot an appeal from the district
court’s preliminary injunction against Greenpeace, Inc.,
concerning protests against oil exploration activities in the
Chukchi Sea.
The panel held that the appeal was moot because the
injunction had expired, and defendants Shell Offshore, Inc.,
and Shell Gulf of Mexico, Inc., did not seek to renew it. The
panel held that the district court’s coercive civil contempt
order issued against Greenpeace did not rescue the appeal
from mootness.
The panel dismissed the appeal, vacated the district
court’s contempt order, and remanded the case to the district
court for further proceedings consistent with this opinion.
COUNSEL
Matthew F. Pawa (argued), Benjamin Krass, Pawa Law
Group, P.C., Newton, Massachusetts; Laura W. Brill, Kendall
Brill & Klieger LLP, Los Angeles, California, for Defendant-
Appellant.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
SHELL OFFSHORE V. GREENPEACE 3
Jeffrey W. Leppo (argued), Jason T. Morgan, and Ryan P.
Steen, Stoel Rives LLP, Seattle, Washington, for Plaintiffs-Appellees.
OPINION
TASHIMA, Circuit Judge:
Plaintiffs Shell Offshore Inc. and Shell Gulf of Mexico
Inc. (together, “Shell”), subsidiaries of Royal Dutch Shell plc,
and Defendant Greenpeace, Inc. (“Greenpeace”), a non-profit
environmental organization, are long-term foes in this Court.
Shell has invested significant amounts of time and money in
its search for oil in the Chukchi Sea, a stretch of ocean off the
northwest coast of Alaska. Greenpeace regards Shell’s
efforts as dangerous and environmentally irresponsible. As
a result, it has engaged in several direct-action protests in an
effort to impede Shell’s exploration activities.
In this appeal, the parties once again clash over the
propriety of a preliminary injunction entered by the district
court to protect Shell from certain more vigorous and more
intrusive aspects of Greenpeace’s activism.
On appeal, Greenpeace challenges the injunction on
several jurisdictional bases, as well as on the merits. We do
not reach any of these issues, however, because we conclude
that the appeal is moot. Accordingly, we dismiss the appeal
and remand for further proceedings.
4 SHELL OFFSHORE V. GREENPEACE
I. BACKGROUND
A. The 2012 Litigation
In 2012, Greenpeace launched a campaign to “Stop Shell”
from drilling for oil in the Chukchi Sea, as part of its greater
efforts to “Save the Arctic.” Opposed to a project they
considered to be a critical threat to the environment,
Greenpeace activists unlawfully boarded several ships
employed by Shell in its offshore drilling operations. In
response, Shell filed suit in the District of Alaska. It sought
a preliminary injunction to prevent Greenpeace from
interfering with its vessels during the Arctic drilling season.
See Shell Offshore Inc. v. Greenpeace, Inc. (“Greenpeace I”),
864 F. Supp. 2d 839, 841–42 (D. Alaska 2012). The district
court granted Shell’s request. The resulting injunction
established safety zones around each of the vessels in Shell’s
Arctic drilling fleet, which Greenpeace was prohibited from
entering. Id. at 854–56. The injunction also barred
Greenpeace from committing various torts and acts of
trespass against Shell’s vessels. Id. at 855.
Greenpeace appealed the preliminary injunction, and we
affirmed. Shell Offshore Inc. v. Greenpeace, Inc.
(“Greenpeace II”), 709 F.3d 1281, 1292 (9th Cir. 2013).
While the appeal was pending, the Arctic drilling season
ended and the preliminary injunction expired. Id. at 1287.
We concluded that the case was nevertheless not moot
because the mootness exception for cases “capable of
repetition, yet evading review” applied. Id. We reasoned that
Shell held multi-year drilling rights in the Chukchi Sea and
“[a] preliminary injunction limited to a single Arctic Ocean
open water season . . . will never last long enough to allow
full litigation” of the merits. Id. Following our decision in
SHELL OFFSHORE V. GREENPEACE 5
Greenpeace II, Shell voluntarily dismissed the action without
prejudice.
B. The 2015 Litigation
In January 2015, Shell announced renewed plans to drill
in the Chukchi Sea during the summer drilling season. In
response, Greenpeace resurrected its “Stop Shell” campaign.
On April 6, 2015, six activists boarded and secured
themselves to the Polar Pioneer, a drilling vessel under
contract with Shell. The activists – one of whom was a
Greenpeace employee – remained on board the Polar Pioneer
for six days. One day after the activists commenced their
protest, Shell filed a new suit – the instant action – against
Greenpeace in the District of Alaska, asserting claims for
both injunctive relief and monetary damages.
After an evidentiary hearing, the district court granted
Shell a preliminary injunction against Greenpeace. Shell
Offshore, Inc. v. Greenpeace, Inc., 2015 WL 2185111 (D.
Alaska 2015). As in 2012, the preliminary injunction
established safety zones around each of Shell’s contracted
vessels. The injunction also established aerial safety zones
around all helideck-equipped ships; banned Greenpeace from
engaging in specified actions affecting Shell’s systems and
facilities; and prohibited Greenpeace from operating “any
drones anywhere within the Burger Prospect in the Chukchi
Sea” during the drilling season. Id. at *6–8. Greenpeace
timely appealed the preliminary injunction, challenging the
district court’s jurisdiction to issue the injunction, in addition
to contesting the injunction on the merits. We have
jurisdiction over this interlocutory appeal under 28 U.S.C.
§ 1292(a)(1).
6 SHELL OFFSHORE V. GREENPEACE
1. The St. John’s Bridge Protest
In July 2015, while this appeal was pending and the
preliminary injunction remained in effect, Greenpeace
activists suspended themselves from St. John’s Bridge over
the Willamette River in Portland, Oregon. As stated in an
email to supporters, the activists’ purpose was to block one of
Shell’s contracted vessels, the Fennica, from leaving the
Portland harbor. The Fennica fell within the preliminary
injunction’s safety zones, so Shell moved the district court to
enforce the injunction.
After an emergency hearing, the district court entered a
preliminary order of civil contempt (the “Contempt Order”).
The Contempt Order imposed sanctions “so long as
[Greenpeace] activists continue to hang from the St. John’s
Bridge in Portland.” The sanctions were structured as a
progressively increasing schedule of fines against
Greenpeace: $2,500 for each hour in contempt during the
first day; $5,000 per hour during the second day; $7,500 per
hour during the third day; and $10,000 per hour thereafter.
Shell contends that Greenpeace activists remained suspended
from the bridge for seven hours in violation of the Contempt
Order.1 The district court has yet to enter a final order
sanctioning Greenpeace.2
1
The Contempt Order was expressly denominated as “preliminary”
because it was “entered without a full evidentiary hearing in light of the
emergency, expedited nature of the situation in Portland.” It contemplated
an evidentiary hearing at a later date.
2
District court proceedings have been stayed pending this appeal.
SHELL OFFSHORE V. GREENPEACE 7
2. Shell Abandons Its Drilling Efforts
In September 2015, Shell announced that it would cease
exploration in offshore Alaska for the foreseeable future. We
issued an order to show cause why this appeal, and the
underlying action, should not be dismissed as moot. In
response, Shell argued that although the underlying litigation
continued to present a case or controversy to the district
court, this appeal would become moot upon the expiration of
the preliminary injunction. Greenpeace disagreed and argued
the inverse: that the pending preliminary Contempt Order
rescued the appeal from mootness, but that Shell’s actions
had rendered the underlying litigation moot. The preliminary
injunction expired on its own terms on November 1, 2015,
and Shell did not seek to renew it.
II. DISCUSSION
“We have an independent obligation to consider mootness
sua sponte.” Greenpeace II, 709 F.3d at 1286 (quoting NASD
Dispute Resolution, Inc. v. Judicial Council, 488 F.3d 1065,
1068 (9th Cir. 2007)). “A case is moot when the issues
presented are no longer ‘live’ or the parties lack a legally
cognizable interest in the outcome.” City of Erie v. Pap’s
A.M., 529 U.S. 277, 287 (2000) (quoting Cty. of L.A. v. Davis,
440 U.S. 625, 631 (1979)). When events change such that the
appellate court can no longer grant “any effectual relief
whatever to the prevailing party,” any resulting opinion
would be merely advisory. Id. (quoting Church of
Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992)).
In such a case, the appellate court lacks jurisdiction and must
dismiss the appeal. SEIU v. Nat’l Union of Healthcare
Workers, 598 F.3d 1061, 1068 (9th Cir. 2010). We first
address, as we must, the question of mootness before we can
8 SHELL OFFSHORE V. GREENPEACE
consider the substance of the parties’ contentions.
Greenpeace II, 709 F.3d at 1286.
A. The Preliminary Injunction
All of the issues on appeal derive from the district court’s
May 8 order granting Shell a preliminary injunction. Thus,
our jurisdiction to hear this appeal hinges on whether the
parties have a continued, legally cognizable interest in the
validity of the injunction. The injunction expired on
November 1, 2015, and Shell has not sought to renew it. As
a result, the injunction no longer constrains Greenpeace, and
it can no longer be enforced by Shell’s motion. Because the
only order on appeal has now expired, we are unable to grant
any effectual relief to either party. This appeal is moot.3
Even though the preliminary injunction has expired and
Shell has pulled out of the Arctic, Greenpeace argues that the
still-pending contempt proceeding rescues its appeal from
mootness. This argument is unavailing. Only compensatory
contempt proceedings survive the termination of an
underlying injunction. Here, as we explain below, the district
3
Unlike our decision in Greenpeace II, 709 F.3d at 1287, the mootness
exception for disputes “capable of repetition, yet evading review” does not
apply to this appeal. In 2012, even after the preliminary injunction
expired, Shell continued to hold oil and gas leases in the Chukchi Sea. As
we stated then, there was no reason to believe that Greenpeace would not
renew its protest actions upon Shell’s return to the Arctic. Id. at 1288.
Indeed, that is exactly what occurred. By contrast, in 2015, Shell called
a halt to all Arctic exploration “for the foreseeable future.” Moreover, the
U.S. Department of the Interior has cancelled further lease sales for the
region through 2017. Thus, at this point, any assertion that Greenpeace is
likely to resume its Arctic protests against Shell would be purely
speculative.
SHELL OFFSHORE V. GREENPEACE 9
court imposed only a coercive civil contempt sanction.
Because the contempt proceeding at issue here is coercive, it
cannot rescue the appeal from mootness.
1. The District Court Issued a Coercive Civil
Contempt Order
A court’s contempt powers are broadly divided into two
categories: civil contempt and criminal contempt. “The
difference between criminal and civil contempt is not always
clear. The same conduct may result in citations for both civil
and criminal contempt.” United States v. Rylander, 714 F.2d
996, 1001 (9th Cir. 1983) (citing United States v. UMWA,
330 U.S. 258 (1946)). In distinguishing between criminal and
civil contempt, we must look to the sanction’s “character and
purpose.” Int’l Union, UMWA v. Bagwell, 512 U.S. 821, 827
(1994). “The purpose of civil contempt is coercive or
compensatory, whereas the purpose of criminal contempt is
punitive.” Koninklijke Philips Elecs. N.V. v. KXD Tech., Inc.,
539 F.3d 1039, 1042 (9th Cir. 2008) (quoting United States
v. Armstrong, 781 F.2d 700, 703 (9th Cir. 1986)). The civil
contemnor is said to “carr[y] the keys of his prison in his own
pocket,” whereas the criminal contemnor “is furnished no
key, and he cannot shorten the term by promising not to
repeat the offense.” Bagwell, 512 U.S. at 828–29.
A court may wield its civil contempt powers for two
separate and independent purposes: (1) “to coerce the
defendant into compliance with the court’s order”; and (2) “to
compensate the complainant for losses sustained.” UMWA,
330 U.S. at 303–04; see also Ohr ex rel. NLRB v. Latino
Express, Inc., 776 F.3d 469, 479–80 (7th Cir. 2015) (“A civil
contempt order can serve to coerce a party to obey a court
order, or it can be intended to compensate a party who has
10 SHELL OFFSHORE V. GREENPEACE
suffered unnecessary injuries or costs because of
contemptuous conduct.” (collecting cases)); Lasar v. Ford
Motor Co., 399 F.3d 1101, 1110–11 (9th Cir. 2005); Coleman
v. Espy, 986 F.2d 1184, 1190 (8th Cir. 1993); Whittaker
Corp. v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992).
“The test . . . is ‘what does the court primarily seek to
accomplish by imposing the sanction?’” Falstaff Brewing
Corp. v. Miller Brewing Co., 702 F.2d 770, 778 (9th Cir.
1983) (quoting Shillitani v. United States, 384 U.S. 364, 370
(1966)). Because civil compensatory sanctions are remedial,
they typically take the form of unconditional monetary
sanctions; whereas coercive civil sanctions, intended to deter,
generally take the form of conditional fines.4 See id. at 780
(citing Gompers v. Buck’s Stove & Range Co., 221 U.S. 418,
444 (1911)). Thus, the ability to purge is perhaps the most
definitive characteristic of coercive civil contempt. Bagwell,
512 U.S. at 829 (“Where a fine is not compensatory, it is civil
only if the contemnor is afforded an opportunity to purge.”);
see also Lasar, 399 F.3d at 1110.
Further complicating matters, it is possible for sanctions
that were initially imposed for a civil, coercive purpose to
change over time; indeed, civil coercive contempt may
eventually evolve into criminal contempt. Richmark Corp. v.
Timber Falling Consultants, 959 F.2d 1468, 1481 (9th Cir.
4
Whether fines are payable to the opposing party or to the court may
also be a factor in deciding whether they are coercive or compensatory.
This factor alone, however, is not determinative. Cf. Lasar, 399 F.3d at
1111 (not determinative as between civil and criminal contempts); F.J.
Hanshaw Enters., Inc. v. Emerald River Dev., Inc., 244 F.3d 1128, 1138
n.7 (9th Cir. 2001) (“Whether a fine is payable to the court . . . as opposed
to the complainant is a relevant, although not necessarily determinative,
factor in determining whether a sanction is punitive.” (citing, inter alia,
Hicks v. Feiock, 485 U.S. 624, 631–32 (1988))).
SHELL OFFSHORE V. GREENPEACE 11
1992) (noting that “the propriety and even the nature of the
contempt sanction can change over time”); see also United
States v. Rylander, 460 U.S. 752, 757 (1983) (stating that the
test for civil contempt on appeal is whether contemnor has the
present ability to comply, not whether it could have complied
in the past); SEC v. Elmas Trading Corp., 824 F.2d 732,
732–33 (9th Cir. 1987) (noting that civil contempt may
become criminal over time). This is because, in order to
categorize the contempt properly, a court must look to the
purpose of the contempt at the time it is enforced, rather than
at the time it is imposed. “A court’s power to impose
coercive civil contempt depends upon the ability of the
contemnor to comply with the court’s coercive order,”
something which may change over time. Falstaff Brewing
Corp., 702 F.2d at 778 (citing Shillitani, 384 U.S. at 371).
Here, the district court’s Contempt Order imposes
sanctions “so long as [Greenpeace] activists continue to hang
from the St. John’s Bridge in Portland.” As described above,
the Contempt Order fined Greenpeace $2,500 per hour for the
first 24-hour period it violated the injunction, then
incrementally increased the hourly fine per 24-hour period
until it reached a cap of $10,000 per hour. The sanctions
were thus imposed primarily to coerce Greenpeace into
compliance with the preliminary injunction. Further accrual
of the conditional fines could have been avoided by
Greenpeace at any time, should it have choosen to recall the
activists and comply with the injunction. The district court’s
civil sanctions are therefore properly understood to be
coercive. See also Consol. Rail Corp. v. Yashinsky, 170 F.3d
591, 596 (6th Cir. 1999) (“[T]he Supreme Court has
recognized that per diem fines like this one are generally
coercive.” (citing Bagwell, 512 U.S. at 826)).
12 SHELL OFFSHORE V. GREENPEACE
2. A Coercive Civil Contempt Order Is Moot When
the Underlying Preliminary Injunction
Terminates
As described by our sister circuits, the “general rule”
requires that “[i]f a civil contempt order is coercive in nature
. . . it is mooted when the proceeding out of which it arises
terminates.” Ohr, 776 F.3d at 479–80; see also Travelhost,
Inc. v. Blandford, 68 F.3d 958, 961–62 (5th Cir. 1995); Klett
v. Pim, 965 F.2d 587, 590 (8th Cir. 1992) (“A court cannot
impose a coercive civil contempt sanction if the underlying
injunction is no longer in effect.” (citing Shillitani, 384 U.S.
at 370)).
While our own caselaw has never clearly expressed this
principle, it is implicit in the logic of our previous decisions.
In Frankl v. HTH Corp., for example, we held that an
otherwise-moot preliminary injunction continued to raise a
“live” controversy “because its resolution [was] crucial to a
pending claim for retrospective monetary relief . . . .”
650 F.3d 1334, 1342 (9th Cir. 2011) (emphasis added).
While we did not discuss the distinction between
compensatory and coercive civil contempt, our holding was
explicitly premised on the compensatory nature of the
pending contempt proceeding. See also Lasar, 399 F.3d at
1108–09 (finding litigation not moot where compensatory
contempt sanctions still pending); cf. Falstaff Brewing Corp.,
702 F.2d at 780 (recognizing that, in the discovery context,
coercive contempt is unenforceable when compliance with
underlying order becomes “impossible” or “futile”).
The justification for this bright-line distinction between
compensatory and coercive contempts arises out of their
disparate purposes. Once an injunction has been terminated,
SHELL OFFSHORE V. GREENPEACE 13
a court may still award compensation to the plaintiff as a
result of injuries caused by its opponent’s contumacy. But a
coercive sanction would no longer serve any purpose: Once
the injunction has expired, there is no longer anything left to
coerce. Instead, enforcing the sanctions could only serve to
punish the contemnor. See Bagwell, 512 U.S. at 829 (“When
a contempt involves the prior conduct of an isolated,
prohibited act, the resulting sanction has no coercive effect.”).
Thus, once the underlying injunction has been terminated and
the contemnor can no longer purge its contempt through
compliance, the contempt becomes criminal.
“Criminal contempt is a crime in the ordinary sense, and
criminal penalties may not be imposed on someone who has
not been afforded the protections that the Constitution
requires of such criminal proceedings.” Bagwell, 512 U.S. at
826 (citations and internal quotation marks omitted). Thus,
in cases where the underlying proceeding has been rendered
moot, the coercive contempt proceeding must be vacated in
order to avoid a due-process violation. See FTC v. Verity
Int’l, Ltd., 443 F.3d 48, 70 (2nd Cir. 2006); Yashinsky,
170 F.3d at 596 (explaining that the contemnor “need not pay
the [accumulated] fines . . . because those fines no longer
serve the purpose of coercing his compliance . . . and
requiring [him] to pay the accumulated fines now would only
serve to punish him for his intransigence”).
Here, the preliminary injunction has expired and will not
be renewed. Thus, there is no longer anything left for the
district court to coerce Greenpeace to do. Enforcing the fee-
schedule monetary sanction would only serve to punish
Greenpeace for its past contumacious actions. Accordingly,
the pending contempt proceedings must be vacated. With no
14 SHELL OFFSHORE V. GREENPEACE
surviving contempt proceedings, the appeal has lost any
legally significant, present effects; it is therefore moot.5
B. The Underlying Proceeding
Even where one issue in a case has been rendered moot,
others may remain. See, e.g., Camenisch, 451 U.S. at 394;
Powell v. McCormack, 395 U.S. 486, 497 (1969). As
discussed above, Greenpeace’s appeal of the preliminary
injunction is moot. Shell’s complaint, however, also seeks
damages for injuries allegedly arising out of Greenpeace’s
2015 “Stop Shell” campaign.6 These issues were not settled
– or mooted – either by the expiration of the preliminary
injunction or by Shell’s announcement that it has cancelled
further exploration in the Arctic. Whether and to what extent
Greenpeace injured Shell in the course of its 2015 “Stop
Shell” campaign remains a live controversy as to which the
district court retains the jurisdiction to award appropriate
5
Greenpeace also argues that the appeal is not moot because the
preliminary injunction order raised issues on the merits that “could affect
the future of litigation in the district court.” This argument ignores the
rule that “the findings of fact and conclusions of law made by a court
granting a preliminary injunction are not binding at trial on the merits.”
Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981). The validity of the
preliminary injunction may become an issue in future district court
proceedings – but at this point, that is only speculation. We thus leave it
to the district court to address the remaining merits issues in the first
instance.
6
For example, in Paragraph 4 of the Complaint’s Requests for Relief,
Shell prays for “[a]n award of damages including incidental damages for
all economic harm resulting from the tortious actions of Greenpeace Inc.
and the individual defendants, and economic harm to Shell as a result of
tortious actions by others with whom Greenpeace Inc. is acting in
concert.”
SHELL OFFSHORE V. GREENPEACE 15
relief, if a finding of liability is made. We leave it to the
district court to consider Shell’s remaining claims in the first
instance on remand.
III. CONCLUSION
This appeal is moot, and therefore must be dismissed.
Accordingly, we also vacate the district court’s July 30, 2015,
Contempt Order. The case is remanded for further
proceedings consistent with this opinion. Each side shall bear
its own costs on appeal.
DISMISSED and REMANDED.