Save Lake Peigneur, Inc. v. Secretary, Louisiana Department of Natural Resources

Jefferson Island Storage & Hub, LLC applied to the Louisiana Department of Natural Resources (DNR), Office of Coastal Management (OCM) on 5 September 2012 for approval to construct two new natural gas storage caverns by dredging, solution mining, and injecting natural gas in the Jefferson Island salt dome underneath Lake Peigneur. A public notice was issued on 11 December 2012 and a public hearing was held on 20 February 2013. Various citizens and local authorities expressed opposition based on concerns about potential contamination of Lake Peigneur or the Chicot Aquifer from natural gas, arsenic, or saltwater, potential explosions, loss of life, and the failure to conduct a comprehensive Environmental Impact Statement. On 7 March 2013, OCM granted Jefferson Island Storage a Coastal Use Permit. Save Lake Peigneur, Inc., a non-profit corporation comprised of members living on and around Lake Peigneur organized for charitable, scientific, and educational purposes to protect citizens and the environment, filed a Petition for Judicial Review. Jefferson Island Storage intervened.

• Whether the OCM violated the Louisiana Constitution and its own guidelines by issuing a Coastal Use Permit without considering the potential adverse environmental impacts of the project as a whole
• Whether the OCM made the mandatory findings required by the Coastal Use Guidelines, specifically that the public safety would not be unreasonably endangered and that the lands have foundation conditions sufficiently stable to support the use
• Whether the OCM breached its constitutional duty as public trustee over the environment under Article IX, Section 1 of the Louisiana Constitution
• What is the appropriate standard of review for judicial review of administrative adjudications under the Louisiana Administrative Procedure Act

The Court found in favor of plaintiff Save Lake Peigneur and against defendants OCM and intervenor Jefferson Island Storage and Hub, LLC. The case was remanded for further proceedings in accordance with La. R.S. 49:964.

An administrative agency granting a coastal use permit must make all mandatory findings required by the Coastal Use Guidelines before issuing the permit. La. R.S. 49:214.27(B)(2) and Guideline 701(A) make the guidelines mandatory criteria for granting coastal use permits. Specifically, under Section 711, the agency must make express findings that the project will take place "on lands which have foundation conditions sufficiently stable to support the use" and "where the public safety would not be unreasonably endangered." An agency permitting action affecting the environment has a constitutional duty as public trustee over the environment under Article IX, Section 1 of the Louisiana Constitution to determine that adverse environmental impacts have been minimized or avoided as much as possible consistent with public welfare before granting approval. An agency cannot satisfy its duty by assuming it need only adhere to its own regulations rather than constitutional and statutory mandates. For purposes of judicial review, in contested cases involving complex issues, an agency must make basic findings supported by evidence and ultimate findings that flow rationally from the basic findings, and must articulate a rational connection between the facts found and the order issued. A court will not search the record to supply findings that the agency has not made or given. An agency's administrative decision is not supported and sustainable by a preponderance of evidence when it fails to make mandatory findings required by statute and guideline.

The Court noted that the record was devoid of consideration of many issues that OCM should have taken into account, such as the implications of bubbling in the lake, possible contamination of the Chicot Aquifer, possible collapse of salt dome caverns, and concerns about possible explosions in the lake. The Court observed that while the conclusory findings of the decision may not reflect that all mandatory findings were made by the administrative decision, it should be clear from a review of the decision that all criteria were considered and addressed. The Court noted that it is not the public's job to provide evidence that the Guidelines are not met. The Court also commented on defendants' argument regarding the division of roles and jurisdictions between OCM and the Office of Conservation, noting that defendants argued OCM plays a small role in the permitting process (dredging) while the Office of Conservation is wholly in charge of every major aspect of decision making and would analyze the Coastal Use Guidelines themselves.

This case is significant in Louisiana environmental and administrative law as it reinforces the mandatory nature of compliance with Coastal Use Guidelines and the constitutional duty of state agencies as public trustees over the environment. The case demonstrates that agencies cannot avoid making mandatory findings by attempting to delegate responsibility to other divisions within the same department. It reaffirms the principles established in Save Ourselves, Inc. v. Louisiana Environmental Control Commission regarding the requirement for agencies to conduct environmental impact analyses before granting permits affecting the environment and to make basic findings supported by evidence with ultimate findings that flow rationally from the basic findings. The case also demonstrates that courts will not search the record to infer findings that the agency did not explicitly make, and that agencies must articulate a rational connection between facts found and orders issued. This case emphasizes the importance of procedural compliance and substantive environmental analysis in the administrative permitting process.