Preliminary Injuctions in the Ninth Circuit: “Serious Questions” after High Court’s Winter Decision

Guest Commentary

Murray Feldman, Holland & Hart LLP

Synopsis: Three years ago, the U.S. Supreme Court rejected the Ninth Circuit’s permissive test for granting environmental plaintiffs a preliminary injunction in Winter v. NRDC.  A recent ruling reflects that circuit’s interpretation of Winter as well as the Ninth Circuit’s penchant for following its own path when implementing Supreme Court precedent.

In Alliance for the Wild Rockies v. Cottrell (“Alliance”), 632 F.3d 1127 (9th Cir. 2011), the U.S. Court of Appeals for the Ninth Circuit recently clarified the “sliding scale” and “serious questions” standards for granting injunctive relief following the Supreme Court’s decision in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008).  In Winter, the Supreme Court held that plaintiffs must establish that irreparable harm is likely, not just possible, to obtain a preliminary injunction.  Alliance, 632 F.3d at 1131 (citing Winter, 129 S.Ct. 365, 375-76).

But in Alliance, the Ninth Circuit held that its “serious questions” approach—that a preliminary injunction may issue where the likelihood of success is such that “serious questions going to the merits were raised and the balance of hardships tips sharply in [plaintiff’s] favor,” 632 F.3d at 1131-32—survives Winter when applied as part of the classic four-element test for a preliminary injunction.  That four-factor test requires a plaintiff to show (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) and that an injunction is in the public interest.  See Winter, 129 S.Ct. at 374.

Overall, Alliance signals that the Supreme Court’s Winter decision may not have cut back on either the ability or propensity of courts within the Ninth Circuit to grant preliminary injunctive relief in environmental and natural resources cases as much as some observers originally thought.  But Alliance does show Winter’s effect in modulating the Ninth Circuit’s preliminary injunction standard both to require satisfaction of all four elements of the Winter test and to reinforce the Ninth Circuit’s acceptance of Winter’s elimination of the mere “possibility” of irreparable harm to support a preliminary injunction.

In Alliance, two plaintiff environmental groups (the Alliance and the Native Ecosystems Council) challenged the Forest Service’s “emergency situation determination” (“ESD”) for the Rat Creek salvage project.  That project permitted salvage logging of trees on approximately 1,652 of the 27,000 acres in Montana’s Beaverhead-Deerlodge National Forest that burned in the fall 2007 Rat Creek wildfire.  Two years later, the Chief of the Forest Service made an ESD authorizing immediate logging without an administrative appeal opportunity.  The ESD was premised on the potential for a substantial economic loss to the federal government if the project was delayed because the trees continued to decay and rapidly lose their value and merchantable volume.

The district court refused the Alliance’s request for a preliminary injunction, citing Winter and stating that plaintiffs had not shown a likelihood of success on the merits or irreparable injury.  On appeal—after clarifying its continued application of the “sliding scale” approach and the “serious questions” test—the Ninth Circuit held that the Alliance had shown that there was a likelihood of irreparable harm, that there were at least serious questions on the merits concerning the validity of the Forest Service’s ESD, that the balance of hardships tipped sharply in plaintiffs’ favor, and that the public interest favored a preliminary injunction.  Reviewing the court’s evaluation of each of these four Winter factors highlights the potential future application of the preliminary injunction test not only in the Ninth Circuit, but also in the other circuits that continue to apply the “serious questions” test, including the Second, Seventh, and Tenth circuits.  632 F.3d at 1133-34.

On the likelihood of irreparable harm, the court held that the Rat Creek project would prevent the Alliance members’ use and enjoyment of 1,652 acres within the overall project, and that this was “hardly a de minimus” injury.  632 F.3d at 1135.  The Ninth Circuit recognized that not “any potential environmental injury” warrants an injunction.  But the Alliance’s claims that the project would interfere with work and recreational purposes such as hunting, fishing, hiking, horseback riding, and cross-country skiing, as well as the Alliance members’ ability to “view, experience, and utilize” the areas of the Rat Creek project in their undisturbed state, was an “actual and irreparable injury” that satisfied the “likelihood of irreparable injury” requirement.  Id.

On the likelihood of success on the merits, the Ninth Circuit scrutinized the Forest Service’s ESD and found it wanting, questioning the basis for the $70,000 “potential loss” to the federal government, whether that constituted a “substantial loss” and determining that the figure was “highly speculative.”  Id. at 1136.  In doing so, the court engaged in the type of “fine-grained” examination for the Forest Service’s justification for the ESD determination that an en banc panel of the Ninth Circuit in the Lands Council decision had said it would eschew.  See Lands Council v. McNair, 537 F.3d 981, 993 (9th Cir. 2008) (en banc).  The Ninth Circuit also found fault, on a firmer legal basis, with the Forest Service’s reliance on the project’s potential impact on the local economy as supporting the ESD determination.  Under the applicable regulations and the Forest Service Appeals Reform Act statute, local economic effects are not a factor to be considered in making an ESD determination.  632 F.3d at 1137.

On the balance of the hardships, the court noted that once the 1,652 acres were logged, the work and recreational opportunities that would otherwise be available on that land “are irreparably lost.”  Id.  By contrast, the hardship to the Forest Service—the potential foregone revenues from the salvage sale—estimated to be “as much as $16,000” and possibly a more speculative loss of up to $70,000—were “so small that they cannot provide a significant counterweight to the harm caused to” the Alliance.  Id. at 1138.  Thus, the balance of hardships tipped sharply enough in favor of the Alliance to warrant a preliminary injunction.

Finally on the public interest factor, the court recognized the well-established public interest in preserving nature and avoiding irreparable environmental injury.  Id.  The court also recognized “the public interest in careful consideration of environmental impacts before major federal projects go forward,” and that it had “held that suspending such projects until that consideration occurs comports with the public interest.”  Id.  Importantly, the court will not grant a preliminary injunction unless those environmental and process public interests outweigh other public interests that favor not issuing an injunction.  Id.  In this case, the court held that the public interest asserted by the Forest Service was an aid to the struggling local economy and the prevention of job losses.  The court acknowledged that the potential injunction’s “effect on the health of the local economy is a proper consideration in the public interest analysis.”  Id.  However, it then dismissed this factor, noting that the Forest Service asserted that the salvage project would directly create 18 to 26 temporary jobs and have an indirect beneficial effect on other aspects of the local economy.  In short, the court concluded that those temporary jobs and indirect economic benefits were outweighed by the nature preservation objectives advocated by the Alliance, and that therefore “issuing the injunction is in the public interest.”  Id. at 1139.

The Ninth Circuit then directed the entry of a preliminary injunction, instead of remanding to the district court for application of the correct legal standard.  The Ninth Circuit may have ordered the injunction itself at least in part because the salvage logging had already commenced, and by the time the case reached the appellate court approximately 49 percent of the planned logging was already completed.

As District Judge Mosman, sitting with the Ninth Circuit Panel by designation, observed in his concurring decision, the importance of the continued application of the “serious questions” test emphasizes that framing the issue can be outcome determinative in preliminary injunction situations such as this.  Judge Mosman further noted that when issues come before the court on an accelerated schedule in the preliminary injunction context, “it can seem almost inimical to good judging to hazard a prediction about which side it likely to succeed.  There are, of course, obvious cases.  But in many, perhaps most, cases the better question to ask is whether there are serious questions going to the merits.  That question has a legitimate answer.  Whether plaintiffs are likely to prevail often does not.”  632 F.3d at 1140 (Mosman, D.J., concurring).  Thus, under this perspective—and the framework now adopted by the Ninth Circuit—the continuation of the sliding scale approach, including the “serious questions” test, “preserves the flexibility that is so essential to handling preliminary injunctions, and that is the hallmark of relief in equity.”