For many government projects involving manufacturers, the National Environmental Policy Act requires federal agencies to evaluate the environmental impact of their actions, and these evaluations are increasingly challenged in court by environmental groups. In such litigation, courts usually allow manufacturers to intervene in the suits to help defend the agency’s actions and to help the court understand the impact of the case on their business. If environmental analyses are deficient, the projects cannot proceed.
This case involves a Ninth Circuit procedure that generally bars such intervention. The practice, informally known as the “federal defendant rule,” is based on the premise that only the federal government can be held liable for failing to perform environmental assessments, and that private parties do not have a significant protectable interest in the litigation.
The NAM and other groups filed an amicus brief 10/21/2010 arguing that the rule should be abandoned. Private parties clearly have a substantial interest in defending agency actions under NEPA, and Federal Rules of Civil Procedure 24(a) allows such a party to intervene. We cited many examples where private parties have such interests, including development projects that involve work in wetlands, the construction of natural gas pipelines or nuclear power plants, and the development of genetically engineered crops.
Our concern is not just about the application of the federal defendant rule to projects subject to NEPA, but also to the fact that it has been extended to other statutes, including the Endangered Species Act, the National Forest Management Act, and the Plant Protection Act. Intervention should be allowed to parties with significant interests in the outcome of such litigation. Often, private parties have massive investments at stake.
On 1/14/2011, the Ninth Circuit rejected the federal defendant rule and said that lower courts should not automatically reject non-federal parties from intervening in litigation at the merits stage, or liability phase, of a law suit. Instead, courts should consider whether the party has a legally protectable interest in the litigation and a connection between that interest and the claims in the case. The decision was en banc, involving 11 of the judges in the Ninth Circuit, and provides great assurance that the federal defendant rule will no longer be used in that circuit. Thirty-seven amicus groups urged this result, and only one other federal circuit court of appeals hangs on to the federal defendant rule.