A federal appeals-court panel on Thursday quickly rejected the Obama administration’s bid to keep intact a moratorium on deepwater drilling while it appealed a federal judge’s decision overturning the ban.
The three-judge panel ruled that Interior Secretary Ken Salazar didn’t prove the U.S. would suffer irreparable harm without an immediate ban on exploratory drilling in deep waters.
“The secretary has failed to demonstrate a likelihood of irreparable injury if the stay is not granted,” reads the panel’s decision, issued late Thursday shortly after the panel heard arguments from both sides in the Fifth Circuit Court of Appeals in New Orleans. “He has made no showing that there is any likelihood that drilling activities will be resumed pending appeal.”
The Interior Department didn’t have immediate comment.
The decision came quicker than expected as the judges announced Thursday that they would rule by early next week.
President Barack Obama enacted the six-month ban on exploratory drilling in water of depths of 500 feet or greater on May 27 in the weeks following the blowout of a BP PLC-owned well off Louisiana’s coast. The government argues that it needs time to determine what caused the disaster and how it can be prevented in other wells.
However, a few oil-services companies led by Hornbeck Offshore Services LLC sued to overturn the ban, arguing that it unfairly hurt companies with good operating records. On June 22, U.S. District Judge Martin Feldman sided with the oil-services companies and struck down the moratorium, saying that it was arbitrary.
The government had hoped to get permission to stop any drilling in deep water until the appeals court ruled on Judge Feldman’s decision later. The panel indicated it expected to hear arguments next month on the appeal of the decision to strike down the ban.
But throughout the hearing Thursday, the judges appeared skeptical of the government’s arguments. While they also peppered lawyers for oil-services companies who opposed the ban, they aimed their harshest inquiries at the government.
Judge Eugene Davis noted that Interior hadn’t requested emergency relief, meaning it hadn’t shown that it would suffer irreparable harm without the ban in place in the short term. “I have inferred from that [failure to request emergency relief] that there really is no likelihood that drilling will commence during the pendency of this appeal,” Judge Davis said to Interior’s lawyers.
The hearing and subsequent ruling came as a group comprised of an alliance of civil-rights advocates issued a report showing that the three judges on the panel have past ties to oil and energy companies.
A report from the Washington D.C.-based Alliance for Justice shows that when Judge Jerry Edwin Smith was in private practice as a litigator at Fulbright & Jaworski, he worked “with groups of attorneys in various law firms representing major oil companies in lawsuits,” according to his testimony at his confirmation hearing in Congress. Judge Smith defended oil companies including Exxon Mobil Corp., ConocoPhillips and Sun Oil Co. in cases that challenged Department of Energy regulations and an antitrust suit, Alliance for Justice said.
While in private practice at two Louisiana firms, Judge Davis represented offshore drilling and oil companies, defending them against a wrongful death and separate negligence claim for accidents on drilling barges or platforms. Financial disclosure reports from 2008 show Judge Davis had investments in oil and energy companies, Alliance for Justice said.
Judge Dennis also had investments in oil and energy companies in 2008, the alliance said his financial disclosure report shows.
However, none of the three judges on the panel had investments in BP during the time reviewed by the Alliance. The Administrative Office of the U.S. Courts, which maintains the judges’ financial disclosure records, said the most recent reports weren’t immediately available.
Lyle Casey, clerk of 5th Circuit Court of Appeals said the three judges declined to comment on the report from the Alliance because of the pending case.
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