Free Appellant's Reply Brief - District Court of Colorado - Colorado

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 1 of 8

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-AP-1071-MSK San Luis Valley Ecosystem Counsel, Nancy Albright, James Martin, Jerre Guthals, Antlers Rio Grande Lodge, Inc., a Colorado Corporation, and Charles C. Powers, Plaintiffs, V. United States Forest Service Defendant and ALXCHNG, LLC, a Texas Limited Liability Company CNXCHNG, LLC, a Texas Limited Liability Company RIO OXBOW RANCH, Inc., a Colorado Corporation Interveners ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

________________________________________________________________________ REPLY TO DEFENDANT'S NOTICE OF SUPPLEMENTAL AUTHORITY IN SUPPORT OF ITS RESPONSE BRIEF ________________________________________________________________________

Comes Now the Plaintiffs and replies to the Defendant's Notice of Supplemental Authority In Support Of Its Response Brief as follows: 1. Utah Association of Counties v. Bush, 2006 WL 2045822, (10th DCA, 2006) does not support the Defendants' position in this case. Plaintiffs agree that the burden is initially on the Plaintiffs to satisfy the requirement of standing. This requires only that the Plaintiffs adequately allege facts which would support standing. The Court Ordered

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 2 of 8

on September 1, 2004 that the Court would Order an evidentiary hearing on the issue of standing if the Court determined it was necessary after determination of the motions to dismiss on that subject. Plaintiff's allegations of standing in the amended complaint were determined by the Court to be adequate in the Courts early ruling denying the Defendants Motion to Dismiss on the issue of standing and determining the legal sufficiency of Plaintiffs allegations and denying motion for evidentiary hearing on the basis that the issues were adequately determined on the record. Minute Order September 28, 2005 and Minute Order November 1, 2005 (Document 78). The burden to support standing with proof by affidavit arises only in response to a motion for summary judgment on the issue of standing, Utah at page 4. Defendants have not moved for summary judgment on the issue of Plaintiffs standing. Plaintiff's filed affidavits in any event by stipulation and were acknowledged filed by the Court's Order re: Parties Joint Stipulation Concerning Standing Affidavits of January 27, 2006. Defendants have not filed any contradictory proofs contesting the Plaintiffs standing. Utah holds that associational standing (applicable only to the Plaintiff, San Luis Valley Ecosystem Counsel, Inc., in this case) requires only one member of the association to have standing for the association to have standing to protect that interest... "if even one member of the association would have standing to sue in his or her own right, that is sufficient, see Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d. 343 (1975)." Utah at page 4. Plaintiffs have met that burden and the Defendants have filed nothing to contradict the truth of the plaintiff's allegations and affidavits.

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 3 of 8

This Court has ruled as a matter of law that the Plaintiffs have standing on the valuation issues. Defendants have not moved for summary judgment and have offered nothing to refute the plaintiff's allegations supported by affidavits. There is nothing in the Utah case that warrants reversing the Courts Order already entered on this subject. 2. Defendants rely on the recent case of Gulf Restoration Network v. United States Dep't. of Transp., 452 F.3d. 362 (5th Cir 2006). The case holds that it was not arbitrary or capricious for the DOT to fail to consider the potential cumulative impact of three proposed future refineries in its cumulative impact analysis. There the DOT did in fact consider past, present and future projects and their impact when considered in light of the project in question. Plaintiffs alleged that the analysis should have included the additional three proposed projects. The Court merely found that the standard the DOT used to determine the likelihood that a particular project would occur in the future was not arbitrary in eliminating the three potential future projects in question. The case does hold that an agency must do a cumulative impact analysis and failure to do so is a violation of law and regulation. Plaintiff here have shown that there were other known exchanges and changes occurring in the private sector in the past in the present and probable in the future and that FS did not consider any such impact because it determined that it did not have to do a cumulative impact analysis. (An analysis of RA 59 through 66, the cumulative impact analysis, shows not a single past, present or reasonably foreseeable future action is identified and discussed in the EA). This decision is beyond arbitrary and capricious and is a direct violation of law and regulation which requires reversal under the Gulf Restoration case and many other cases cited by Plaintiffs.

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 4 of 8

Defendants also cite Gulf Restoration for the proposition that the Secretary of the DOT did not require the best available technology. The Secretary was applying the Deepwater Port Act in that case and that Act's requirements were being reviewed. The Deepwater Port Act has no application to the case before the Court and is irrelevant to the analysis here on this point. 3. Defendants cite Environmental Protection Information Center v. United States Forest Service, 451 F.3d 1005 (9th Cir., 2006) for the proposition that the FS obligation to consider alternatives under an EA is lesser than under an EIS., id. at 1016. This is a correct statement of the holding; however, Defendants omit reference to the important relevant details of the holding. The case is clear that alternatives must be considered and that there is a minimum threshold of required analysis discussed in the case that is applicable here. The FS must articulate a rational reason for excluding a particular

alternative. If the alternatives do not advance the object of the proposed action then this is an adequate reason to exclude a particular alternative: "USFS also considered six additional alternatives, but eliminated them from detailed study for various reasons. To the extent EPIC argues that USFS did not give a sufficient explanation for rejecting these additional alternatives, the explanations were not arbitrary or capricious, and were tied to the stated propose of the Project, FN7" Environmental Protection Information, at 1016.

In footnote 7 of the opinion, the reasons for excluding the alternatives by FS are synopsized. These reasons all pertain to why the specific alternative is not feasible or would not achieve the stated goals. The case cites these reasons as minimal albeit rational and adequate. In this case, FS has failed to meet even this minimum standard. F.S. articulated that there were benefits of the proposed alternatives. The FS proceeded to explain why

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 5 of 8

the primary proposed action would be modified to reduce the adverse impacts that would be spared by choice of the alternatives. However, a close reading of the FONSI shows that there is no explanation as to why the alternatives are excluded or rejected. Here the FS explains that the properties N2 and L3 could be excluded from the exchange and that significant valid public complaints could be addressed by this choice. No explanation why the FS chose to reject these alternatives is given anywhere in the FOSNI that even approximates the kinds of explanations given in the EPIC case. FS only outlines the significant benefits to the overall exchange that would be achieved by these alternatives (AR 12). Therefore FS did not give the minimum required consideration to viable alternatives required by law and regulation, requiring reversal of the action. 4. FS claims that the recent case of Mt. St. Helens Mining and Recovery v. United States, 384 F.3d 721 (9th Cir. 2004) holds that a Plaintiff can not complain about property valuation in an exchange unless that party produced an opposing appraisal. This is not the holding of the case. There the opponent of the exchange was given an opportunity to review and comment on the FS appraisal. This was important to the 9th Cir. in concluding the action was not arbitrary: "The Forest Service approved Halmbacher's supplemental appraisal and provided the Partnership with an opportunity to review and comment on the new figure." Mt. St. Helens at 727; and "It articulated that offer to the Partnership and gave the partnership the opportunity to respond." Mt. St. Helens at 728. Here the Plaintiffs, Powers and Antlers, were designated by the FS early in the process as legally interested parties. Powers and Antlers requested an opportunity to review and comment on the appraisals and possibly to provide responsive appraisals before the final agency action (AR 1077). In spite of this request, FS had the appraisals

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 6 of 8

in its possession for many months before the final decision and did not disclose the same to the public but did disclose them to the proponents. Plaintiffs were able to acquire the appraisals only through the normal request process after the agency action was final and were given no formal period to comment. Plaintiffs were able to provide some comments as to how the appraisals did not comply with law and regulation and some proof that available comparables were not properly analyzed during the appeals process to the appeal officer. The deciding officer did not consider these materials and issues before the decision. Additionally the Mt. St. Helens case does not hold that a competitive appraisal is a requirement to challenge a valuation. In that case, the partnership that opposed the valuation was arguing that an analysis of the amount of money that could be netted from future mining operations should have been the standard of valuation. The Court called this valuation method the "potential value." The partnership specifically argued that fair market value was not the proper valuation but rather "potential value" was the correct standard. Mt. St. Helens at 729. The Court ruled that 36 CFR§ 254 expressly adopts "fair market value" as the standard and that "potential value" is not the statutory standard. The Court recognized that fair market value can be determined by appraisal, through bargaining based on appraisals, or through other acceptable and commonly recognized methods of determining market value...' Mt. St. Helens at 729. "Under the arbitrary and capricious standard, a reviewing Court must determine whether an agency's decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Mt. St. Helens at 728. Here, Plaintiffs agree that fair market value is the standard. Plaintiffs showed that the appraiser failed to

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 7 of 8

consider required factors under the regulations as part of the fair market value analysis. Plaintiffs showed the appraiser distorted the facts in certain instances. And Plaintiffs show that there were many comparables not even considered in coming to its conclusions and no explanation for not considering the many similar sales in the relevant time frame are given. There is nothing in Mt. St. Helens that shows that the points raised by the Plaintiffs here regarding the sufficiency of the appraisals and which go directly to the relevant issue, a good faith and objective analysis of "fair market value" should not be considered by the Court. Dated this 22nd day of August, 2006 s/ Charles C. Powers Charles C. Powers 0020 Lodge Drive P.O. Box 1273 South Fork, Colorado 81154 Telephone: 719-873-1740 FAX: 719-873-1742 E-mail: [email protected] Attorney for Plaintiffs

Case 1:04-cv-01071-MSK

Document 107

Filed 08/22/2006

Page 8 of 8

CERTIFICATE OF SERVICE

I hereby certify that on the 22nd day of August, 2006, I electronically filed the foregoing with the Clerk of Court using the ECF system which will send notification of such filing to the following e-mail addresses: Roxane Perruso [email protected] Jennifer Lynn Soice [email protected]@petros-white.com Charles B. White [email protected]@petros-white.com Terry Fox [email protected],[email protected]

s/ Beverly Darrow