Bloomberg News

Obama Administration Contempt Ruling in Drill Ban Overturned

November 28, 2012

A contempt citation against the Obama administration for instituting a second deep-water drilling ban after a lower-court judge rejected an initial moratorium was thrown out by a U.S. appeals court.

U.S. offshore regulators temporarily suspended drilling in Gulf of Mexico waters deeper than 500 feet in May 2010, in reaction to a massive oil spill caused by the explosion of an offshore well owned by BP Plc. (BP/)

U.S. District Judge Martin Feldman of New Orleans sided with oilfield companies and regional business leaders who opposed the ban, which they said crippled the industry and the Gulf Coast economy. The day after Feldman ordered regulators not to enforce the ban, U.S. Interior Secretary Kenneth Salazar called for a second, almost identical ban in what Feldman later declared was “determined disregard” of his order.

In a two-to-one opinion, a panel of the U.S. Fifth Circuit Court of Appeals in New Orleans ruled that regulators could legally impose the second drilling ban because Feldman’s narrowly worded injunction didn’t specifically prevent them from doing so. The panel said it was also swayed by the fact the case involved a controversial policy decision made by U.S. President Barack Obama during a national emergency.

‘End-Run’

“A more broadly worded injunction that explicitly prohibited the end-run taken by Interior would have set up issues more clearly supportive of contempt,” U.S. Circuit Judge Leslie Southwick wrote for the majority, in an opinion handed down yesterday. “The national importance of this case weakens, not strengthens, the propriety of the court’s contempt finding.”

U.S. Circuit Judge Jennifer Walker Elrod, in a dissent, said the majority opinion sets a “troubling” precedent because it undermines the independence of the judiciary and “renders it a subordinate branch of government.”

“The court’s power to enforce its orders must remain intact even in the midst of the most critical emergencies of the state,” Southwick said. “The judiciary’s inherent contempt power is essential to preserve judicial independence and to ensure that judicial decrees are not impotent.”

Judges Disagreed

The appellate judges disagreed on whether regulators violated the spirit of Feldman’s order rather than the letter of his injunction blocking the drilling ban. The majority ruling overturned the contempt finding and reversed Feldman’s order for the government to pay $530,000 in legal fees and costs to Hornbeck Offshore Services Inc. (HOS:US), one of the companies that led the legal challenges against the two drilling moratoriums.

“We thought that the dissent got this right, but the Fifth Circuit has ruled and obviously we respect that ruling,” Sam Giberga, Hornbeck’s general counsel, said today in a telephone interview. He said the company is evaluating the ruling for possible further appeal.

“We’re pleased with the court’s decision,” Wyn Hornbuckle, a Justice Department spokesman, said in an e-mail.

The case is Ensco Offshore Co. v. Salazar, 2:10-cv-01941, U.S. District Court, Eastern District of Louisiana (New Orleans). The appeal case is 11-30225, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

To contact the reporters on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha in San Francisco at mhytha@bloomberg.net.


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • HOS
    (Hornbeck Offshore Services Inc)
    • $39.4 USD
    • -0.03
    • -0.08%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus