Succeeding in today’s litigious regulatory landscape

By Ryan Steen

Alaska’s abundant and varied natural resources have no equivalent in any of the other 49 states. This wealth of resources has been, is currently, and will continue to be the fuel that powers Alaska’s economy. This same wealth of resources provides a platform for the initiatives of non-governmental organizations (NGOs) that have devoted special attention to Alaska.

These NGOs vary widely in their goals, the strategies they pursue, and their geographic footprints. However, Alaska has arguably received increased attention from large, well-funded NGOs that are headquartered in other states or in other countries.

From a business perspective, Alaska presents the ideal opportunity for these NGOs to create rousing initiatives capable of grabbing the national or international spotlight and the attendant lucrative stream of contributions. These NGOs are sophisticated, nimble, and strategic. They have smart lawyers and creative campaigners.

Looking ahead, the successful resourcebased businesses and industries in Alaska will be those that recognize NGO initiatives are inevitably intertwined with the regulatory process and plan in a similarly strategic and proactive manner.

Federal environmental laws enacted in the late 1960s and early 1970s, such as the Endangered Species Act (ESA), the National Environmental Policy Act, the Marine Mammal Protection Act, and the Clean Water Act, frame the playing field on which many NGOs like to compete. In Alaska, NGOs primarily use these laws in two ways.

First, federal environmental statutes provide the basis for NGO challenges to agency regulations, permits, and other authorizations. Savvy NGO lawyers are adept at finding the weak spots in agency decisions and making them the focus of aggressive lawsuits.

Second, NGOs have increasingly used federal environmental laws to proactively change the regulatory baseline to make it more difficult for future projects to succeed. A common example is the petitioning of new species listings under the ESA and subsequent litigation to push federal agencies through the listing, critical habitat designation, and recovery planning processes. The existence of ESA-listed species and designated critical habitat in the area of a proposed project unquestionably adds a layer of complexity to the permitting process and provides a foundation for future legal challenges by NGOs. Making regulatory processes more complicated is a key long-term strategy used by NGOs to create advantages for future lawsuits.

For projects or industries that receive extra scrutiny from NGOs, the regulatory and litigation complexities are often layered with aggressive public campaigns, creative use of the media, extensive political lobbying, and even violations of the law designed to cause delay or attract attention (or both). All of these potential obstacles require strategic and thoughtful planning. Although each big project requires a custom approach and there is no universal golden ticket to success, the following presents some starting points for building an effective regulatory strategy.

1. Work within the system and push when appropriate. Except in rare circumstances, there is usually little to gain by trying to change the regulatory framework to fit a specific project. The better approach is to understand the existing process well and navigate it efficiently, partner with agencies, and be selectively aggressive when some “push” is needed in the permitting process. Fixes to ineffective or unworkable regulations are best accomplished through thoughtful long-term strategies undertaken by coalitions or industry trade groups, not on a project-by-project basis.

2. Build coalitions with local communities, industry groups, government entities, and/or private companies. This is particularly useful for regulatory decisions with broad-ranging effects or for large, controversial projects. For example, a coalition of state and local governments, Alaska Native groups, and industry was successful in challenging the polar bear critical habitat designation, which was the largest designation in the history of the ESA. Similarly, a diverse base of informed support for a specific project can help to neutralize the “controversy” generated by NGOs and make for a smoother permitting process.

3. Promote and develop good science. Resource-based projects often occur in remote areas that have a relatively undeveloped scientific baseline. Scientific uncertainty can plague the regulatory process because federal agencies will usually act with extreme caution in the face of uncertainty. Solid scientific information almost always shows that the default worst-case-scenario arguments of NGOs and presumptions of resource agencies are unwarranted.

4. Defend permits and reasonable regulations. The federal Department of Justice (DOJ) has very capable attorneys that generally do a good job of defending the decisions of federal agencies. However, a project proponent can add value by intervening to defend against NGO legal challenges by providing context that the DOJ may not provide and by advancing defenses that the government may not assert.

5. Take the fight to the NGOs. In exceptional circumstances, there may be good reason to proactively seek declaratory or injunctive relief from a court before NGO challenges are filed. This can be effective when there is a historical pattern of NGO challenges to certain activities or indications that an NGO may take other actions to block or impede activities.

Finally, it’s easy to get caught up in thinking that Alaska is just becoming an increasingly difficult place to get projects permitted. However, the reality is that the regulatory environment is not going to drastically change any time soon and NGO initiatives are not going away (for Alaska and other parts of the country). For project proponents with a detailed understanding of the regulatory landscape that approach their projects in an adaptive, strategic, and proactive way (not unlike the NGOs that will be opposing them), there is still plenty of room for success.

Ryan Steen is a partner at the law firm Stoel Rives LLP. He was a featured speaker at RDC’s Alaska Resources Conference in November.

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