Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 1 of 10

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS LAREDO DIVISION BECKETT VENTURES, INC., et aL, Plaintiffs, VS. EAGLE FORD MIDSTREAM, LP, et aL, Defendants.

CIVIL ACTION NO. L-12-164

MEMORANDUM & ORDER Plaintiffs Beckett Ventures, Inc. and Hall of Fame Land Ventures, LP, owners and operators of the Herradura Ranch in La Salle County, Texas, seek injunctive and declaratory relief under the Endangered Species Act ("ESA") and the Declaratory Judgment Act against Defendants Eagle Ford Midstream, LP and NET Midstream, LLC, who have obtained a natural gas pipeline right-of-way through the Ranch under eminent domain. (Dkt. 1 at~ 3; Dkt. 7
at~

3.) Plaintiffs' complaint alleges that the Ranch contains suitable habitat for the endangered ocelot and that there is evidence of the ocelot's presence in the form of tracks and eyewitness reports. (Dkt. 1 at
~

9.) According to Plaintiffs, Defendants' pipeline-related activities will

require the clearing away of ocelot habitat, resulting in ''takes" proscribed by the ESA. (Id. at mf 1, 14; Dkt. 32 at pg. 1.) Invoking the ESA, Plaintiffs seek injunctive relief in the form of a revised right-of-way that is less destructive to ocelot habitat but will still achieve Defendants' objectives. (Dkt. 1 at~ 17.) Pursuant to 28 U.S.C. 2201, Plaintiffs also seek a declaration that Defendants violated Section 9 of the ESA, the ''take" provision, by harming and harassing the ocelot. (ld.
at~

94.)

Pending is Defendants' Motion to Dismiss pursuant to Federal Ru1e of Civil Procedure 12(b)(l) for lack of subject matter jurisdiction, Rule 12(b)(6) for failure to state a claim, and

1 I 10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 2 of 10

Rule 12(b)(7) for failure to join a required party. (Dkt. 30.) Upon an initial review of the motion, the Court ordered additional briefing on a standing issue left unaddressed by the parties. 1 (Dkt. 35.) Plaintiffs filed responsive briefing (Dkt. 36), as well as an unopposed motion for leave to amend their complaint (Dkt. 37), which is also pending. For the reasons discussed below, Defendants' Motion to Dismiss (Dkt. 30) is hereby DENIED in its entirety. Moreover, Plaintiffs' motion for leave to amend the complaint (Dkt. 37) is hereby GRANTED. Background In the spring of 2012, Defendants entered into negotiations with Plaintiffs to obtain their right-of-way through the Ranch. (Dkt. I at mf 4-6; Dkt. 7 at mf 6-10.) During these negotiations, Plaintiffs attempted to persuade Defendants to adopt a route around the Ranch that would be less destructive of the claimed ocelot habitat. (Dkt. 1 at mf 4-5.) Apparently, however, negotiations fell through. On May 24, 2012, Defendants filed the eminent domain proceeding. (!d. Dkt. 7
at~ at~

3;

13; Attach. 6 at pg. 26.) On August 16, 2012, seeking recourse under the ESA,

Plaintiffs sent Defendants a Notice of Intent to Sue letter for violations of Section 9. (Dkt. 1 at~ 8.) Nonetheless, on August 27, 2012, Defendants obtained their right-of-way across the Ranch via a state court order. (Id.
at~

3; Dkt. 7, Attach. 6 at pg. 26.)

To proceed with installation of the pipeline, federal law and regulation required that Defendants obtain a permit from the United States Army Corps of Engineers ("the Corps"), in consultation with the United States Fish and Wildlife Service ("FWS"), regarding the effect on any ESA-listed species or their designated habitat. See 16 U.S.C. 1536(a)(2); see also 77 Fed.

Plaintiffs originally alleged that they suffered injury to their environmental, aesthetic, and recreational interests. (Dkt. I at mf 102-103.) However, the Court noted in its prior order that corporate entities like Plaintiffs cannot have such interests. See Citizens Coordinating Comm. on Friendship Heights, Inc. v. Wash. Metro. Area Transit Auth., 765 F.2d 1169, 1173 (D.C. Cir. 1985). 2/10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 3 of 10

Reg. 10184 (Feb. 21, 2012). Thus, in attempting to fulfill these requirements, Defendants hired Zephyr Environmental Corporation to draft an environmental assessment report on the Ranch. (Dkt. 1 at~ 60; Dk:t. 7 at mf 19-21.) Zephyr examined the potential effect of the pipeline on the ocelot and concluded that no ocelot habitat existed within the right-of-way. (Dkt. 1 at ~~ 60-61; Dkt. 7 at mf 21-26.) Defendants furnished their findings to the FWS. Their formal letter reads in part that ''the general lack ofhabitat for any of the federally-listed species should negate the need for any further measures or consultation in regards to the federally-listed species." (Dk:t. 4, Attach. 5.) On September 6, 2012, the FWS affixed a stamp to the letter, which reads in its entirety as follows: Your letter indicates you have determined that the proposed action would have no effect on federally listed species. Therefore, the Service believes your agency has complied with section 7(a)(2) of the Endangered Species Act by making a determination. No further action is required from this office. (Dkt. 4, Attach. 5 at pg. 1.) Defendants also furnished their findings to the Corps, which granted approval for the pipeline. (Dkt. 1
at~

62; Dkt. 7

at~

25.) On October 1, 2012, Defendants

began clearing the right-of-way for installation of the pipeline. (Dkt. 1 at~ 11; Dk:t. 7 at~ 17.) Plaintiffs filed suit in this Court on October 16, 2012 (Dkt. 1), sixty days after filing their notice of intent to sue letter, see 16 U.S.C. 1540(g)(2)(A)(i). According to the complaint, Plaintiffs' experts believe that ocelot habitat exists on the Ranch, based in part on the eyewitness report of Mr. John Beckett. (Dkt. 1 at

mf 9, 12, 59, 63.) The following day, Plaintiffs filed a

motion for a temporary restraining order and preliminary injunction to prevent Defendants from laying the pipeline. (Dkt. 4 at pgs. 6-7.) Before the Court could issue a ruling, Defendants completed installation, and Plaintiffs withdrew the motion. (Dk:t. 26.) Nonetheless, Plaintiffs continue to seek a right-of-way that charts a course along the perimeter of the Ranch and circumvents the supposed ocelot habitat. (Dkt. 32 at pg. 6.) According to Plaintiffs, abandoning 3 I 10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 4 of 10

the current right-of-way would allow the native ocelot habitat to re-grow. (Id.) Discussion Defendants now move to dismiss the complaint pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction, Rule 12(b)(6) for failure to state a claim, and Rule 12(b)(7) for failure
to join a required party. (Dkt. 30.) Each ground for dismissal will be discussed in turn.

I. Lack of subject matter jurisdiction For purposes of Rule 12(b)(1), Defendants argue that the Court is without jurisdiction based on Plaintiffs' lack of standing. (Dkt. 30, Attach. 1 at pg. 3.) According to Defendants, the complaint is "facially defective as Plaintiffs merely recite that they have sustained an injury in fact which is fairly traceable and fairly redressable, but the [c ]omplaint provides insufficient supporting factual allegations of the elements pled.'' (Id.) Defendants also argue that Plaintiffs' amended complaint fails to cure the injury-related pleading deficiencies previously raised by the Court. (Dkt. 38 at pgs. 1-2.) On a Rule 12(b)(1) motion to dismiss, the party asserting jurisdiction, generally the plaintiff, bears the burden of proof Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). Where standing is at issue, the burden corresponds "with the manner and degree of evidence required at successive stages of the litigation." Croft v. Governor of Tex., 562 F.3d 735, 746 (5th Cir. 2009) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). At the pleading stage, as here, the plaintiff is only required to make "a short and plain statement of the grounds for the court's jurisdiction" and "a short and plain statement of the claim showing that [he] is entitled to relief." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Put another way, all that is required is an allegation of facts giving rise to a plausible claim of standing. Cornerstone Christian Sch. v. Univ. Interscholastic League, 563 F.3d 127, 134 (5th 4/10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 5 of 10

Cir. 2009). In determining whether this burden has been met, a court must assume that all of the allegations in the complaint are true even if doubtful. Twombly, 550 U.S. at 555. Moreover, a plaintiff must demonstrate standing separately for each form of relief sought. Friends of the
Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 185 (2000).

There are three elements to standing: (1) the plaintiff must have suffered an injury in fact, which is an invasion of a legally protected interest that is concrete and particularized, and actual or imminent, not conjectural or hypothetical; (2) there must be a causal connection between the injury and the conduct complained of, which means that the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Lujan, 504 U.S. at 560-61. Here, Plaintiffs have satisfied their burden with respect to each of these elements.

A. Injury in fact
In their amended complaint, Plaintiffs allege an injury to their economic interests (Dkt.

37, Attach. 1 at

103 ), which is a type of injury that can be alleged by corporate entities in

support ofstanding. 2 See Tex. Democratic Party v. Benkiser, 459 F.3d 582, 586 (5th Cir. 2006);
Citizens Coordinating Comm. on Friendship Heights, Inc. v. Wash. Metro. Area Transit Auth.,

765 F.2d 1169, 1172 (D.C. Cir. 1985). Here, Plaintiffs claim that the Ranch sees ecotourism profits from guests who come to view wildlife, particularly the ocelot. (Dkt. 36, Attach. 1 at~~ 4-5; Dkt. 37, Attach. 1 at
~

103.) According to Plaintiffs, destroying the ocelot habitat will

negatively affect the amount of wildlife and drive away the ocelots. (Dkt. 1 at

W 58-59, 74.)

To the extent Defendants argue that economic interests fall outside the scope of interests protected by the ESA (see Dkt. 38 at pgs. 4-5), such has been foreclosed by the Supreme Court. See Bennett v. Spear, 520 U.S. 154, 163-166 (1997). 5 I 10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 6 of 10

Supposedly then, over time, fewer guests will come to the Ranch for ecotourism, thus hurting profits. (Dkt. 36, Attach. I B. Traceability Plaintiffs also allege the second element of standing-a causal connection between the injury and the complained of conduct. To establish a causal connection, a plaintiff must plead that the asserted injury is "fairly traceable" to the defendant's challenged action and not the result of the independent action of some third party not before the court. Lujan, 504 U.S. at 560. In meeting this requirement, Plaintiffs allege that Defendants' pipeline-related activities have destroyed ocelot habitat, which will drive away the ocelots and lead to reduced profits from ecotourism. (Dkt. 1 at~ 50-59, 64-76, 77-82, 95-97; Dkt. 37, Attach. 1 at -,r 103.) Accordingly, Plaintiffs' injury in fact is fairly traceable to Defendants' conduct. C. Redressability Finally, redressability exists for both types of actions brought by Plaintiffs, injunctive relief and declaratory relief. A plaintiff meets the redressability prong of standing when "it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, Inc., 528 U.S. at 181; Lujan, 504 U.S. at 561. Here, the Court can grant injunctive relief such as re-routing of the pipeline to minimize disturbance of the endangered ocelot and restoring of the habitat. See Loggerhead Turtle v. Cnty. Council of Volusia Cnty., Fla., 148 F.3d 1231, 1254-55 (11th Cir. 1998). Moreover, a declaratory judgment can redress Plaintiffs' injury by providing the impetus necessary for persons to conform their actions to avoid a violation of the law. Seattle Audubon v. Sutherland, 2007 WL 1300964, at *6 (E.D. Wash. May 1, 2007) ("Because it is likely that state officials would conform their actions to avoid a violation of [the ESA], a declaratory judgment would likely redress Plaintiffs' alleged
at~ 4-5;

Dkt. 37, Attach. I at -,r I03).

6110

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 7 of 10

injury."); see also Franklin v. Mass., 505 U.S. 788, 801-03 (1992); Alaska Fish & Wildlife Fed'n
& Outdoor Council v. Dunkle, 829 F.2d 933, 937 (9th Cir. 1987).

II. Fallure to state a claim upon which relief can be granted Defendants argue, for purposes of Rule 12(b)(6), that Plaintiffs fail to state a claim because the relief they seek is now moot; specifically, Defendants contend that relief is no longer available because the pipeline has been completed. 3 (Dkt. 30, Attach. I at pg. 5.) A case becomes moot only when it is impossible for a court to grant any effectual relief whatsoever to the prevailing party.
Erie v. Pap's A.M., 529 U.S. 277, 287 (2000) (quoting Church of

Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992)). Here, relief is still possible for

Plaintiffs. For example, the Court could order a re-route of the pipeline and restoration of the habitat. See Ctr. for Biological Diversity v. U.S. Bureau of Land Mgmt., 698 F.3d 1101, 1106 n.2 (9th Cir. 2012) ("That the pipeline was completed and put into service during the pendency of this lawsuit does not render the petitioners' challenges moot. It is still possible to mitigate the project's adverse effects on listed species and critical habitat.'') Defendants also argue that the Court cannot grant any relief for past takes by a private party. (Dkt. 30, Attach. I at pg. 6.) Nonetheless, the Court need not address this issue.

Plaintiffs request injunctive relief to prevent, not just past takes, but ongoing and future takes as well, either of which is sufficient to state a claim.

m. Joinder of parties
Defendants move to dismiss under Rule 12(b)(7) for failure to join parties required by Rule 19, namely, the Corps and the FWS. (Dkt. 30, Attach. I at pg. 6.) Rule 19 requires a

A motion to dismiss under Rule 12(b)(6) is analyzed under the same standard as a motion to dismiss under Rule 12(b)(l). Dooley v. Principi, 250 F. App'x, 114, 115 (5th Cir. 2007). 7 I 10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 8 of 10

person to be joined if either subsection 19(a)(1)(A) or 19(a)(1)(B) is satisfied. Rule 19(a)(1)(A) provides that a person must be joined if the court cannot grant complete relief to existing parties in the absence of that person from the action. Fed. R. Civ. P. 19(a)(l)(A); see Huber v. Taylor, 532 F.3d 237, 248 (3rd Cir. 2008). Rule 19(a)(1)(B) requires the joinder of a person who claims an interest in the action and is so situated that disposing of the action may impair that person's ability to protect their interest or cause a substantial risk to existing parties of facing inconsistent obligations. Fed. R. Civ. P. 19(a)(1)(B); see Image Masters, Inc. v. Chase Home Fin., 489 B.R. 375, 396 (E.D. Pa. 2013). The party advocating joinder has the initial burden of demonstrating that a person is a necessary party. Pulitzer-Polster v. Pulitzer, 784 F.2d 1305, 1309 (5th Cir. 1986); JRG Capital Investors I, LLC v. Doppelt, 2012 WL 2529256, at *1 (S.D. Tex. June 28, 2012). Here, Defendants claim that they relied upon the approval of the Corps and the FWS to proceed with the pipeline project. (Dkt. 30, Attach. 1 at pg. 6-7.) They argue that under Rule 19(a)(I)(A), the Court cannot grant the complete relief sought by Plaintiffs because the Court cannot compel these agencies to take any action unless they are joined in the lawsuit. (/d.) Under Rule 19(a)(1)(B), Defendants assert that the Corps and the FWS have an interest in protecting the implementation and administration of the ESA in these circumstances. (Id. at pg. 7.) According to Defendants, the Corps has an interest in protecting its implementation of the Nationwide Permit Program, 77 Fed. Reg. 10184 (Feb. 21, 2012), and its conclusion that the pipeline will have "no effect" upon endangered species, while the FWS has an interest in protecting its concurrence with the Corps that the pipeline will have ''no effect," as well as its own determination that "no further action is required." (Dkt. 30, Attach. 1 at pg. 7.) However, Defendants' arguments are not supported by the case law. In fact, federal

8 I 10

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 9 of 10

courts in several circuits have held that as a general rule federal agenctes charged with administering the various federal environmental laws-such as the Clean Air Act, 42 U.S.C. 7604, the Clean Water Act, 33 U.S.C. 1365, and the Surface Mining Control and Reclamation Act, 30 U.S.C. 1270---are not necessary parties to citizen suit actions. 4 To hold otherwise would negate one of the primary purposes of environmental citizen suit provisions-to provide a means by which citizens can seek enforcement or relief where the regulatory authority has failed to properly enforce the law. See McCracken v. Black Diamond Co., 2012 WL 5439857, at *5 (W.D. Va. May 6, 2012); see also Bennett v. Spear, 520 U.S. 154, 170 (1997). Here, the citizen suit provision of the ESA, 16 U.S.C. 1540(g), has nearly identical language and purpose to the citizen suit provisions of the three environmental acts above. Furthermore, Defendants have failed to discharge their burden of showing that the Corps and the FWS claim interests that need to be protected.5 Here, Defendants provide only

unsubstantiated assertions as to the interests held by the Corps and the FWS. (See Dkt. 30,
4

See e.g., Ass'n to Protect Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299 F.3d 1007, 1014 (9th Cir. 2002) (Clean Water Act); Hawai'i Wildlife Fund v. Cnty. of Maui, 2012 WL 3263093, at *6 (D. Haw. Aug. 8, 2012) (Clean Water Act); McCracken v. Black Diamond Co., 2012 WL 5439857, at *5-6 (W.D. Va. May 6, 2012) (Surface Mining Act); Wis. Res. Prot. Council, Ctr. for Biological Diversity v. Flambeau Min. Co., 2012 WL 5191992, at *17-18 (W.D. Wis. Apr. 13, 2012) (Clean Water Act); Or. State Pub. Interest Research Grp., Inc. v. Pacific Coast Seafoods Co., 341 F. Supp. 2d 1170, 1179 (D. Or. 2004) (Clean Water Act); Sierra Club v. Young Life Campaign, Inc., 176 F. Supp. 2d 1070, 1078-80 {D. Colo. 2001) (Clean Water Act); Student Pub. Interest Research Grp. of NJ., Inc. v. Monsanto Co., 600 F. Supp. 1479, 1484 (D.N.J. 1985) (Clean Water Act); Friends of Earth v. Carey, 535 F.2d 165, 173 (2d Cir. 1976) (Clean Air Act); Metro. Wash. Coal. for Clean Air v. D.C., 511 F.2d 809, 814-15 (D.C. Cir. 1975) (Clean Air Act). See Indian Harbor Ins. Co. v. K.B Lone Star, Inc., 2012 WL 1038658, at *1-2 (S.D. Tex. Mar. 27, 2012); see also 5C, Federal Practice and Procedure, 1359 (3d ed. 2013) ("The cases make it clear that the burden is on the party moving ... to show the nature of the unprotected interests of the absent individuals or organizations and the possibility of injury to them or that the parties before the court will be disadvantaged by their absence[, and t ]o discharge this burden, it may be necessary to present affidavits of persons having knowledge of these interests as well as other relevant extra-pleading evidence."). 9 I 10
5

Case 5:12-cv-00164 Document 39 Filed in TXSD on 09/27/13 Page 10 of 10

Attach. 1 at pg. 7; Dkt. 33 at pgs. 4-10.) Indeed, should these agencies' interests be prejudiced in their absence, they are free to intervene. Accordingly, Defendants have failed to satisfy their initial burden of demonstrating that the Corps and the FWS are necessary parties. Conclusion For the reasons discussed above, Defendants' Motion to Dismiss (Dkt. 30) is hereby

DENIED in its entirety.

Moreover, Plaintiffs' unopposed motion for leave to amend the

complaint (Dkt. 37) is hereby GRANTED. The Clerk of Court is hereby DIRECTED to docket Plaintiffs' amended complaint (Dkt. 37, Attach. 1). This case is now referred to the Magistrate Judge for pre-trial handling.

IT IS SO ORDERED.
SIGNED this 27th day of September, 2013.

Diana Saldaiia United States District Judge

10/10