Neil Levine
LAW OFFICE
1107 Auraria Parkway, Suite 106
Denver, CO 80204
303-455-0604
Attorneys for Appellant
Colorado Wild Public Lands Inc.
UNITED STATES DEPARTMENT OF THE INTERIOR
OFFICE OF HEARINGS AND APPEALS
INTERIOR BOARD OF LAND APPEALS
COLORADO WILD PUBLIC LANDS INC.,
Appellants
vs.
U.S. BUREAU OF LAND MANAGEMENT,
RUTH WELCH, Colorado State Director
STEVE BENNETT, Field Manager, Colorado
River Valley Field Office,
Appellees.
______________________________________
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
IBLA No.
Re: Colorado River Valley Field
Office Decision Record,
Environmental Assessment (DOIBLM-
CO-N040-2013-0061-EA)
and Finding of No Significant
Impact for the Sutey Land
Exchange
__________________________________________________________________
NOTICE OF APPEAL AND
PETITION FOR STAY PENDING APPEAL
______________________________________________________________
2
NOTICE OF APPEAL AND REQUEST FOR STAY
Pursuant to 43 C.F.R. §§ 4 et seq., the Colorado Wild Public Land Inc. (CWPL)
respectfully submits this timely Notice of Appeal of the Sutey Land Exchange (Land Exchange),
as approved through a June 20, 2014 Decision Record of the U.S. Bureau of Land Management
(BLM) and Environmental Assessment (EA) and Finding of No Significant Impact (FONSI).
This appeal also responds to the November 12, 2014 Colorado State Director’s Decision to deny
CWPL’s August 4, 2014 administrative protest (Protest Denial). In this appeal, CWPL
challenges the Land Exchange as violating the Federal Land Policy and Management Act
(FLPMA) and the National Environmental Policy Act (NEPA), as well as standards set forth
under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. Because BLM’s Land Exchange
does not comply with these laws, the Interior Board of Land Appeals (IBLA) should rescind
BLM’s approval.
Concurrently with this Notice of Appeal, CWPL requests a stay of the Land Exchange
through the duration of this appeal process. Under applicable regulations, a stay is imposed by
virtue of the filing of this appeal and a Request for Stay, and continues for 45 days thereafter,
unless the IBLA denies the stay request during that time. See 43 C.F.R. §§ 4.21; Jim Wilkin
Trucking, 142 IBLA 46, 47 (1997). Here, the stay should continue for the duration of this appeal
for two reasons. First, a stay of the Land Exchange is required under BLM regulations at 43
C.F.R. § 2201.7-2(b)(4) and the terms of BLM’s Exchange Agreement. Second, CWPL is likely
to succeed on the merits, will suffer irreparable harms absent a stay, CWPL’s harm outweighs
any delay in completing the Land Exchange, and the public interest favors the requested
temporary stay.
3
STATEMENT OF FACTS
I. Appellant Colorado Wild Public Lands
Appellant CWPL is a volunteer-based, non-profit corporation, based in Basalt,
Colorado and formed to protect the integrity, size and quality of Colorado’s public lands from
diminution by private interests. Rickenbaugh Decl. ¶ 3 (Exh. 13). CWPL’s members are
concerned citizens who value our public lands and waters for their recreational use, habitat for
wildlife and native plants, wild-land character, and their economic assets. Id. CWPL advocates
for economically and environmentally sensible management of public lands and related
resources and assets. Id. Through the monitoring of public land transactions, decision-making,
and management, CWPL advocates for the retention of public land assets, access to these lands,
maintaining their ecological integrity, and for ensuring their true economic value is considered
and realized. Id.
CWPL and its members regularly use and enjoy the federal lands at issue in the Land
Exchange, as well as the public lands adjacent to the private lands that are the subject of the
Land Exchange, for recreational, educational, aesthetic and conservation purposes. See
Rickenbaugh Decl. ¶¶ 5-7, 13 (Exh. 13); Greenway Decl. ¶¶ 1, 3-7 (Exh. 14); Froelicher Decl. ¶¶
3-5 (Exh. 15). The Land Exchange will harm CWPL and its members’ interests by conveying
accessible public lands to private ownership, by not ensuring the former federal lands are
managed to protect natural resources, and by stressing existing BLM management budgets in
relation to newly-acquired lands. Rickenbaugh Decl. ¶¶ 5-7, 11-14 (Exh. 13); Greenway Decl.
¶¶ 3-11 (Exh. 14); Froelicher Decl. ¶¶ 3-5 (Exh. 15). The Land Exchange also injures CWPL
and its members because it results in the loss of valuable public lands at below-market values,
4
and is poor public policy. Rickenbaugh Decl. ¶¶ 9-11, 14, 17 (Exh. 13); Greenway Decl. ¶¶ 3-11
(Exh. 14); Froelicher Decl. ¶¶ 3-5 (Exh. 15).
CWPL members provided comments on the Land Exchange, at both the scoping stage
and on the draft environmental assessment, and CWPL filed an administrative protest of the
Land Exchange Exh. 1 (Protest); Exh. 2 (Comments); Greenway Decl. ¶ 1 (Exh. 14); Froelicher
Decl. ¶ 6 (Exh. 15). The ability of CWPL members to provide fully informed comments was
hampered by BLM’s failure to fully inform the public of aspects of the Land Exchange. See e.g.,
Rickenbaugh Decl. ¶¶ 4, 15 (Exh. 13); Froelicher Decl. ¶ 6 (Exh. 15). The comments and protest
raised violations of FLPMA and NEPA. Exhs. 1 & 2. These laws, including their procedures,
protect CWPL members’ concrete interests. Voiding the Land Exchange will remedy CWPL
members’ concrete and procedural injuries.1
II. The Land Exchange and BLM’s Approval
The sprawling Two Shoes Ranch is owned by Leslie and Abigail Wexner. The Ranch is
located in Pitkin County, Colorado, near the town of Carbondale. It was assembled through the
acquisition of two base properties — the Bane Tracts and the Crystal Island Ranch, which
combined total 4,041 acres — at a cost of approximately $65,000,000. Exh. 21 (Weston Decl. ¶¶
4-6).
Two Shoes Ranch is divided by 1,240 acres of BLM lands, known in the Land Exchange
as Federal Parcel A, which lies at the base of the dramatic Mount Sopris. The Wexners sought to
1 CWPL is a proper party to pursue this appeal and has standing. Under 43 C.F.R. § 4.410,
“[a]ny party to a case who is adversely affected” by a BLM decision has a right to appeal to the
IBLA. National Wildlife Federation, 82 IBLA 303, 307-08 (1984). CWPL’s members use and
have personal interests in the lands involved in the Land Exchange. See Wyoming Outdoor
Council, 153 IBLA 379, 384 (2000); Craig M. Weaver, 141 IBLA 276, 281 (1997), Kendall’s
Concerned Area Residents, 129 IBLA 130, 136-37 (1994).
5
acquire Federal Parcel A to enhance their Two Shoes Ranch with the help of the Western Land
Group. Exh. 3 (Feasibility Report at 1). To facilitate this acquisition, in 2008, the Wexners
strategically purchased the 556-acre Sutey Ranch, private ranchlands that abut BLM’s Red Hill
Special Recreation Management Area. Exh. 4 (Pitkin County Memo at 2); Final EA at 1-2.2
Armed with Sutey Ranch, the Wexners approached BLM to complete a land exchange in
2008. Exh. 3 (Feasibility Report at 1). At first, the Wexners pursued a legislative land exchange
in order to bypass certain legal requirements under FLPMA and avoid public review. Id.; Exh. 4
(Pitkin County Memo at 2). Beginning in 2009, the Wexners took steps to obtain support for the
legislative exchange, including offering to Pitkin County $950,000 for certain county projects
and programs. Exh. 4 (Pitkin County Memo at 7). The County elected to not support the
Wexners’ proposal. Exh. 3 (Feasibility Report at 1). In 2010, the Wexners abandoned their
attempt for Congressional approval of the proposed land exchange. Id.
Shortly thereafter, BLM initiated the administrative land exchange process under
FLPMA. As proposed, the Wexners would trade 668 acres located on two parcels (the Sutey
Ranch and West Crown properties), for 1,470 acres located on six parcels, including Federal
Parcel A that would complete the Wexners’ Two Shoes Ranch. Exh. 3 (Feasibility Report at 1).3
Parcel A contains two creeks. Exh. 3 (Feasibility Report at 2). One of the creeks splits
this Parcel A into two livestock grazing allotments, known as the Thomas and Potato Bill
Allotments, which are permitted and managed by BLM. Id. In 2012, new grazing permits
imposed conditions on the permittee designed to improve conditions along the creeks. Final EA
2 The Final and Draft Environmental Assessments are available on BLM’s webpage at:
http://www.blm.gov/co/st/en/fo/crvfo/sutey_ranch_land_exchange.html.
3 Three BLM parcels located in Eagle County – Parcels C, D and E — are not relevant to
this appeal.
6
at 3-50. Both allotments contain populations of the Harrington’s penstemon, a wildflower that
BLM has designated as a “sensitive species” due to threats caused by, among other things,
livestock grazing. Exh. 3 (Feasibility Report at 2); Final EA at 3-113 – 3-114. In connection
with the Land Exchange, a conservation easement will be placed on Parcel A. The easement
“will prohibit development of the lands and limited permitted uses to historic grazing practices.”
Exh. 3 (Feasibility Report at 3); Final EA at 2-4 (“At the foundation of the conservation
easements is the premise that the Federal Parcel[] A] would not be developed in the future”).
Sutey Ranch is private ranchland located two miles north of Carbondale, Colorado in
Garfield County. It is situated adjacent to BLM’s Red Hill Special Recreation Management, an
area used for non-motorized recreation (biking, hiking, horseback riding) that receives over
55,000 of local visitors a year. Exh. 3 (Feasibility Report at 4); Final EA at 2-16. Sutey Ranch
had been ranched and farmed from 1930 through 2005, when it was sold to the Wexners as a
development property. Exh. 3 (Feasibility Report at 4); Final EA at 1-2. A portion of Sutey
Ranch has a ditch and accompanied water rights, which have been used to irrigate 92 acres of the
ranch. Id. Because BLM lacks resources to fund and manage the property, the Wexners agreed
as part of the Land Exchange to fund ($1.1 million) development and implementation of a
management plan for Sutey Ranch. Exh. 6 (Decision Record at 3). BLM is authorized to accept
this financial donation under FLPMA, 43 U.S.C. § 11737(b).
In 2011, BLM prepared a Feasibility Analysis Report for the Land Exchange, wherein the
agency identified the lands involved and issues to be addressed. Exh. 3. Therein, BLM staff
recommended proceeding with the land exchange process. Id. (Feasibility Report at 9).
Still seeking Pitkin County’s support, the Wexners entered into an agreement with the
County in early 2013. Final EA at 2-6. The agreement included placing a conservation
7
agreement on existing Two Shoes Ranch property, extinguishing certain pre-existing
development rights, and providing a $700,000 contribution to the County. Final EA at 2-6 – 2-7.
In May 2012, because the Land Exchange is a major federal that may result in significant
environmental impacts, BLM initiated a NEPA process with “scoping.” Final EA at 1-9. In
November 2012, appraisals for each property involved in the Land Exchange were completed.
See e.g., Exhs. 7 & 8. BLM approved each one in January 2013. See e.g., Exhs. 9, 10. The
agency released a draft environmental assessment in April 29, 2013 for public review and
comment. Exh. 6 (Decision Record at 2). The comment period closed on May 29, 2013. Final
EA at 4-6. BLM withheld the appraisals from public during this comment period, only releasing
them in January 2014 in response to a lawsuit filed under the Freedom of Information Act.
Rickenbaugh Decl. ¶ 15 (Exh. 13).
After the comment period closed, BLM changed the scope of the Land Exchange,
because the appraisals indicated that the value of the Sutey Ranch and the other private parcels
far outweighed the federal lands. Consequently, BLM and the Wexners developed a plan to
address this problem and, in August 2013, divided Sutey Ranch into two separate parcels –
Parcel 1A and Parcel 1B. Exh. 11 (Supp. Appraisal, Sutey Ranch). BLM and the Wexners
agreed to include only Parcel 1A in the Land Exchange and have Parcel 1B donated to BLM.
Exh. 6 (Decision Record at 1). On August 23, 2013, a supplement to the Sutey Ranch appraisal
was issued, assigned value to both Parcel 1A and 1B based on the market values determined in
November 2012. Exh. 11.
The final EA and “finding of no significant impact” were released on June 20, 2014, at
which time BLM also issued its final approval of the Land Exchange. Exh. 6, 12. CWPL filed a
protest on August 4, 2014. Exh. 1. The State Director responded to the protest on November 12,
8
2014, which CWPL received on November 17, 2014. Exh. 5. The protest was denied, and this
appeal and stay request followed.
ARGUMENT
I. THE LAND EXCHANGE IS STAYED UNDER BLM REGULATIONS AND THE
BINDING EXCHANGE AGREEMENT
A stay of the Land Exchange through the duration of this IBLA appeal is required under
applicable regulations. Department of Interior regulations governing appeals provide standards
and procedures for obtaining a stay of a BLM decision. 43 C.F.R., § 4.21. A BLM Decision is
stayed, and not effective, during the time that a “person adversely affected may file a notice of
appeal.” Id. § 4.21(a)(1). After the appeal period expires, the decision becomes effective unless
a party files a petition for stay concurrently with an appeal. Id. § 4.21(a)(2). The regulations
further provide standards for a stay that an appellant must satisfy. Id. § 4.21(b).
The rules governing when a BLM decision becomes effective do not apply here. See 43
C.F.R., § 4.21(a). While the general rule dictates that an appealed decision is effective after a
stay request is denied or not ruled upon within 45 days, 43 C.F.R., § 4.21(a)(3), this rule does not
govern if “law or other pertinent regulations” provide otherwise. Id. § 4.21.
BLM regulations specific to land exchanges break from the IBLA’s general rule
regarding the effect of a BLM decision. After BLM approves a land exchange, the agency and
the proponents “may enter into exchange agreement.” 43 C.F.R. § 2201.7-2(a). Through an
exchange agreement, both parties are thereafter bound by its terms. Id. § 2201.7-2(b); id. §
2200.0-6(a) (detailing neither party obligated to complete transactions absent binding exchange
agreement). Notably, any exchange agreement is subject to final resolution of any protests and
appeals:
[A]n exchange agreement … is legally binding on parties …provided:
9
(4) In the event of a protest or of an appeal from a protest decision under 43 CFR part 4,
a decision to approve an exchange pursuant to § 2201.7-1 is upheld.
43 C.F.R. § 2201.7-2(b)(4) (emphasis added).
Based on these regulations, the Land Exchange cannot be implemented until this IBLA
appeal is resolved. BLM and the Wexners entered into “Binding Land Exchange Agreement” on
July 8, 2014. Exh. 16 (Binding Exchange Agreement). The Exchange Agreement includes a
provision reflecting 43 C.F.R. § 2201.7-2(b)(4), such that the Land Exchange may proceed
provided “[t]he BLM’s decision to approve the exchange is upheld in the event of a protest or
appeal.” Exh. 16 (Exchange Agreement at 2) (emphasis added). The Exchange Agreement also
provides that the Land Exchange will close “after completion of Federal requirements” (id. at 1),
including resolution of this appeal.
The May 7, 2012 Agreement to Initiate a Land Exchange between the Wexners and BLM
similarly provides Land Exchange cannot be completed until this appeal is resolved. Exh. 17.
That agreement provides “the proposed exchange is subject to the provisions of 43 CFR Part 4,
Department Hearings and Appeals Procedures, and in the event of a protest or appeal, is
contingent upon final disposition of that protest or appeal.” Exh. 17 (Agreement to Initiate a
Land Exchange at 6).
Accordingly, because CWPL has filed an appeal to the IBLA, Interior and BLM
regulations and the Binding Exchange Agreement preclude execution of the Land Exchange until
this appeal is resolved.
II. A STAY PENDING APPEAL IS WARRANTED
A stay of the Land Exchange should also be granted under 43 C.F.R. § 4.21(b)(1). This
provision authorizes a stay of a BLM project based on (1) the relative harm to the parties if a stay
is granted or denied, (2) appellants’ likelihood of success of the merits, (3) the likelihood of
10
irreparable harm to appellants, and (4) whether the public interest favors a stay. See Oregon
Natural Desert Association, 176 IBLA 371, 377 n.6 (2009). These standards mirror the
preliminary injunction standards applied by federal courts. Below, CWPL demonstrates that,
based on these four factors, a stay pending appeal should be issued.
A. Absent A Stay, Appellant Will Suffer Irreparable And Immediate Harm
The irreparable harm requirement is satisfied where there is a “significant risk” of
irreparable injury. Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250, 1258 (10th Cir.
2003); Winters v. Nat’l Res. Def. Council, 555 U.S. 7, 20 (2008) (must show irreparable harm is
“likely”). An injury is irreparable when it cannot be compensated after the fact by monetary
damages. Davis v. Mineta, 302 F.3d 1104, 1116 (10th Cir. 2002).
Absent an IBLA order staying implementation of the Land Exchange, CWPL and its
members will immediately and permanently lose access to public lands. CWPL and its members
will be prohibited from Federal Parcel A, where, as demonstrated in their declarations, members
hike, bike, ski, walk, run, hunt, birdwatch, watch wildlife, view wildflowers, enjoy spectacular
views of Mount Sopris, and access other public lands. Rickenbaugh Decl. ¶¶ 5-7, 12 (Exh. 13);
Greenway Decl. ¶¶ 3-11 (Exh. 14); Froelicher Decl. ¶¶ 3-5 (Exh. 15).4
Further, CWPL members’ interest is a rare wildflower will be irreparably harmed. See
Rickenbaugh Decl. ¶¶ 7, 13, 17 (Exh. 13); Greenway Decl. ¶ 7 (Exh. 14); Froelicher Decl. ¶¶ 3,
4 (Exh. 15). The Harrington’s penstemon occurs on the slopes of Mount Sopris, and on the BLM
lands included in the Land Exchange as Parcel A. Final EA at 3-114. As BLM determined,
livestock grazing within Parcel A threatens this plant, and thus the agency included conservation
4 As a result of the Land Exchange, there will be a “net loss” of over 55 acres of
Harrington’s penstemon occupied habitat, which will no longer be open to CWPL members.
Final EA at 3-123.
11
measures in its grazing permits and management plan to control livestock impacts. See id. at 3-
119 – 3-120. These measures include a reduction in livestock on the allotments, rotational
grazing, and reducing the number of summer grazing days. After the Land Exchange is
implemented, Parcel A will continue to be grazed. Id. at 3-53. However, BLM’s conservation
measures will no longer be in place, which will exacerbate grazing impacts on this rare plant
within Parcel A.5
The Supreme Court has held that “[e]nvironmental injury, by its nature, can seldom be
adequately remedied by money damages and is often permanent or at least of long duration, i.e.,
irreparable.” Amoco Production v. Village of Gambell, 480 U.S. 531, 545 (1987) (“[i]f such
injury is sufficiently likely, therefore, the balance of harms will usually favor the issuance of an
injunction to protect the environment”); Catron County v. U.S. Fish & Wildlife Service, 75 F.3d
1429, 1440 (10th Cir. 1996) (“An environmental injury usually is of an enduring or permanent
nature, seldom remedied by money damages and generally considered irreparable”). Here,
because livestock grazing is known to irreparably harm the Harrington’s penstemon and its
habitat, CWPL’s demonstrated interest in this native wildflower will be irreparably injured by
the ongoing livestock grazing operation in Parcel A.
Moreover, a stay is necessary to ensure CWPL can obtain meaningful relief in this case.
NEPA is a procedural statute that demands a comprehensive analysis before an agency takes an
action impacting the environment. NEPA procedures “ensure[] that important effects will not be
overlooked or underestimated only to be discovered after resources have been committed or the
5 A conservation easement will be placed on Parcel A to protect the land from potential
development activities. The easement does not purport to protect the Harrington’s penstemon
from livestock grazing however. At best, it proposes that a grazing management plan should be
developed at some point in the future, although there is no indication that measures to protect the
Harrington’s penstemon will be included in a future plan. See Final EA, App. A at A-3 – A-4.
12
die otherwise cast.” Robertson v. Methow Valley Resources Council, 490 U.S. 332, 349 (1989);
Marsh v. ONRC, 490 U.S. 360, 371 (1989). Agencies must therefore comply with NEPA at
earliest possible time, “before an irretrievable commitment of resources is made.” New Mexico
v. BLM, 565 F.3d 683, 718 (10th Cir. 2009); Davis, 302 F.3d at 1115 & n.7 (ruling delayed
compliance presents “serious risk” that NEPA process “will be skewed toward completion of the
entire Project”); Colorado Wild v. United States Forest Serv., 523 F.Supp.2d 1213, 1220-21 (D.
Colo. 2007) (finding irreparable harm in “difficulty of stopping ‘a bureaucratic steam roller’
once it is launched”).6 Further, unless NEPA compliance occurs before implementation, the
public “will have been deprived of the opportunity to participate in the NEPA process at a time
when such participation … is calculated to matter.” Save Strawberry Canyon v. Dep’t of Energy,
613 F.Supp.2d 1177, 1189 (N.D. Cal. 2009); High Country Citizen’s Alliance v. Norton, 448
F.Supp.2d 1235, 1244 (D. Colo. 2006) (“In their zeal to reach a resolution to the competing
interests … Defendants ignore the right of the public to be involved in such a major and
significant decision.”). Thus, even if CWPL prevails on the merits of their NEPA arguments,
NEPA compliance after the Land Exchange is implemented will make a fair and unbiased
environmental analysis impossible due to the bureaucratic momentum and political pressure for
the Land Exchange.
6 See also San Luis Valley Ecosystem Council v. USFWS, 657 F.Supp.2d 1233, 1241-42
(D. Colo. 2009) (finding NEPA remedy, “which would be to either require the USFWS conduct
an EIS or to cure the deficiencies in the EA, would be meaningless if drilling were to proceed
during the pendency of this litigation”); Colorado Wild, 523 F.Supp.2d 1213 (holding irreparable
injury includes “risk that in the event the Forest Service’s [decisions] are overturned and the
agency is required to ‘redecide’ the access issue, the bureaucratic momentum created by
Defendants’ activities will skew the analysis and decision-making of the Forest Service towards
its original, non-NEPA compliant access decision”).
13
Furthermore, the Land Exchange is complex, involving BLM and private parties and
multiple properties located in several Colorado counties. It requires a $1.1 million donation to
fund development of a BLM management plan, execution and implementation of a conservation
easement, a land donation that is dependent upon the Land Exchange, and tax implications for
private parties. The practical difficulty of unwinding this interlocking Land Exchange is
difficult. See Kettle Range Conservation Group v. U.S. Bureau of Land Management, 150 F.3d
1083, 1087 (9th Cir. 1998) (recognizing difficulties in “unscrambl[ing] the eggs”); see also
Tinoqui-Chalola Council of Kitanemuk and Yowlumne Tejon Indians v. Dep’t of Energy, 232
F.3d 1300, 1305 (9th Cir. 2000) (noting practical effect of rescinding transaction appropriately
considered when balancing equities). Thus, unless a stay is granted, CWPL’s ability to obtain
meaningful relief for BLM’s legal violations will be compromised.
CWPL highlights that this stay request seeks to preserve the status quo until the appeal is
resolved. See Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981) (purpose is to “preserve the
relative positions of the parties”); Schrier v. Univ. of Colo., 427 F.3d 1253, 1260 (10th Cir.
2005). That is, at this time, CWPL is not requesting BLM to take certain actions or seeking to
unwind the Land Exchange. See O Centro Espirita Beneficiente Uniao Do Vegetal v. Ashcroft,
389 F.3d 973, 975 (10th Cir. 2004) (en banc). Should the parties to the Land Exchange complete
the property transactions before IBLA rules on the merits, however, CWPL will be prejudiced
because, at that time, property and money will have to be returned.
B. The Relative Harms Favors Issuance Of A Stay During This Appeal
A temporary stay of implementing the Land Exchange, which preserves the status quo,
will not harm BLM or the Wexners. Significantly, as detailed above, BLM regulations and the
Binding Exchange Agreement executed shortly after BLM approved the Land Exchange
14
anticipated that its implementation will only occur after an IBLA appeal is resolved. 43 C.F.R. §
2201.7-2(b)(4) (“exchange agreement … is legally binding on parties …provided … a decision
to approve an exchange pursuant to § 2201.7-1 is upheld”); Exh. 17 (Exchange Agreement at 2)
(“[t]he BLM’s decision to approve the exchange is upheld in the event of a protest or appeal”).
Accordingly, there is no basis for BLM or the Wexners to argue that a stay will cause
them harm when their contract demonstrates otherwise. Both parties agreed to delay conveying
the relevant properties on their own volition. The Land Exchange will not fail by delaying its
implementation, and can still occur as presently proposed should the IBLA reject CWPL appeal.
Moreover, there is no urgency to completing the transactions involved: there are no dying trees
of limited economic value; no economic entity depending on revenues from this transaction.
In sum, the relative harms warrants granting CWPL’s requested stay.
C. The Public Interest Favors A Stay To Preserve The Status Quo
CWPL’s requested stay furthers the public interest because it ensures full compliance
with federal law, including FLPMA, NEPA and the APA standards for reviewing a federal
agency action. Davis, 302 F.3d at 1116 (finding construction of highway project had to yield to
agency’s obligation to comply with environmental laws); Colo. Wild, 523 F.Supp.2d at 1223
(“public has an undeniable interest in the Forest Service’s compliance with NEPA’s
environmental review requirements and in the informed decision-making that NEPA is designed
to promote”). In FLPMA, Congress authorized BLM to enter into land exchanges provided they
are undertaken in full compliance with law. See 43 U.S.C. § 1716; 43 C.F.R. §§ 2201 et seq.
Moreover, if the Land Exchange is completed and the properties are conveyed, BLM will
be forced to expend significantly more resources to manage the Sutey Ranch lands. This
property is adjacent to a recreation area and requires development of a new management plan.
15
The combined acreage of Sutey Ranch and the Red Hill Special Recreation Management Area
will be far more difficult and expensive to oversee. Indeed, BLM’s lack of resources explains
the Wexners’ $1.1 million donation for developing and implementing a management plan for the
Sutey Ranch. In contrast, management of Parcel A requires minimal BLM action, as these lands
are being grazing under existing permits and management plans.
D. CWPL Is Likely To Succeed On The Merits
In requesting a stay, an appellant need only raise “serious questions” going to the merits.
Wyoming Outdoor Council, 153 IBLA 379, 388 (2000); Sierra Club, 108 IBLA 381, 384-85
(1989). An appellant’s likelihood of success need not be “free from doubt.” Jan Wroncy, 124
IBLA 150, 152 (1992); Island Mountain Protectors, 144 IBLA 168 (1997). CWPL meets these
success standards, as BLM’s Land Exchange violates both FLPMA and NEPA.
1. The Land Exchange Violates FLPMA
FLPMA authorizes BLM to acquire lands via exchange or donation. 43 U.S.C. § 1715(a).
FLPMA also permits BLM to “dispose” of public lands through land exchanges. Id. § 1716(a).
However, FLPMA imposes certain requirements on a BLM land exchange and a land
donation. Conveying land out of federal ownership must be in the “public interest,” which
means the land exchange must result in better federal land management and provide for the
needs of the public. 43 U.S.C. § 1716(a); see id. § 1701(a)(1). Further, BLM must receive “fair
market value” for lands being disposed. 43 U.S.C. § 1701(a)(9). In establishing market value,
BLM is required to, among other things, (1) “determine highest and best use of the property” and
(2) assume private ownership. Id. § 2201.3-2(a). Further, the lands being exchanged must be
equal in value based on an appraisal. 43 U.S.C. § 1716(b) & 1716(d)(1). Land acquisitions must
16
be consistent with existing resource management plans and goals. 43 U.S.C. § 1732(a); §
1715(b); 43 C.F.R. §§ 1610.5-3(a), 1601.0-5(b), 1601.0-5(c).
a) The Appraisals Were Outdated Based On BLM’s Own Standards
And Could Not Be Used For The Land Exchange
Appraisals performed for BLM have a defined validity period of between six and twelve
months. The Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA) provide
that “[a]ll agencies should develop procedures for automatic reviews of [appraisal] reports on a
scheduled periodic basis.” UASFLA, § D-13.7 In accordance with this direction, BLM
developed its 2005 Land Exchange Handbook, which recognized that “[a]ppraisal opinions are
as of a certain fixed date.” BLM Land Exchange Handbook at 7-7.8 The Handbook then sets the
validity period for appraisals at between 6 and 12 months from their effective date. Id. (Chapter
9, Section J provides: “Approved appraisal reports or appraised values generally remain accurate
for about six to twelve months from the effective date of the value opinion”). There is some
flexibility within this six-month window, based on local market conditions or physical changes
to the property. Id. However, an appraisal that is older than 12 months requires BLM to initiate a
new appraisal. Id.
7 In an Agreement to Initiate the Land Exchange, executed on May 7, 2012, BLM and the
Wexners agreed to have appraisals done “in accordance with the appraisal standards as
prescribed in 43 CFR 2201.3 and the Department of Justice Uniform Appraisal Standards for
Federal Land Acquisitions.” Exh. 17 (Initiation Agreement at 3). BLM regulations provide that
appraisals are to follow regulatory standards and “to the extent appropriate, with the Department
of Justice ‘Uniform Appraisal Standards for Federal Land Acquisitions.” 43 C.F.R. § 2201.3.
The Uniform Appraisal Standards for Federal Land Acquisitions is available at:
http://www.justice.gov/enrd/3044.htm.
8 This BLM Handbook and BLM’s Acquisition Handbook are available at:
http://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/blm_handbook
s.html.
17
Consistent with the Land Exchange Handbook, a 2006 BLM Instruction Memorandum
provides that “a new appraisal would generally be required” for appraisals older than 12 months.
Exh. 18 (BLM Instruction Memorandum (Sept. 14, 2006)) (while further providing that “the
standard validity period for most appraisals would be at least six months from the date of
valuation”). Because the validity period is limited, the Instruction Memorandum also provides
that “field offices are encouraged to schedule and request appraisals so they are one of the last
tasks, if not the last task, to be completed before the decision.” Id.
The appraisals for each property involved in the Land Exchange were completed and
effective on November 15, 2012. See Exh. 7, 8 & 20.9 Contrary to the Instruction Memorandum,
the appraisals were not “one of the last tasks.” See Exh. 18. Instead, based on these appraisals,
BLM approved the Land Exchange nineteen months later, on June 20, 2014. See Exh. 6
(Decision Record at 1). Accordingly, the Land Exchange and BLM’s ‘equal value’
determination relied on appraisals that were beyond their validity period, and thus could not be
used to support BLM’s decision. Rather, under BLM’s own standards, new appraisals were
required.10
9 BLM performed a “supplement” to the Sutey Ranch appraisal in August 2013 (Exh. 11),
but this supplement was not to update market conditions. Rather, as detailed below, it simply
divided the value of the Sutey Ranch into two parcels, whereby Parcel 1A is the ‘exchange’
parcel and Parcel 1B is the ‘donation’ parcel. The supplement calculated values for the two
newly-divided parcels based on the market values found in the November 2012 appraisal —
$9,500/acre.
10 While some appraisals may articulate a “life” during which the analysis of market values
remains valid, the appraisals prepared here did not. Moroever, long after the November 2012
appraisals became invalid, in July 2014, BLM and the proponents signed a Binding Exchange
Agreement that agreed to “fix the values of the offered non-Federal lands and selected Federal
lands at the approved appraised values until completion of the land exchange.” Exh. 16 (Binding
Land Exchange at 1). However, the parties’ Exchange Agreement was completed 20 months
after the appraisals’ effective date, and after the validity period expired.
18
Citing the UASFLA, the State Director’s Protest Denial claims there is no “hard rule” as
to when an appraisal requires updating. Exh. 5 (Protest Denial at 1). However, the State Director
ignores the subsequent UASFLA narrative that requires agencies to develop formal regulations
and procedures detailing “automatic reviews of reports on a scheduled periodic basis,” and that
the BLM’s Land Exchange Handbook dictates that 6-12 months is the appropriate validity period
before an appraisal update is required. Indeed, the UASFLA expressly notes that “various
government agencies recognize some rules of thumb in this regard (e.g., ever 6 months; every 12
months).” UASFLA D-13.11
Neither the State Director nor BLM supported the claim that relevant land values were
not volatile (see Exh. 5 (Protest Denial at 2)), such that BLM may deviate from its Handbook’s
6-12 month validity period. See Olenhouse v. Commodity Credit, 42 F.3d 1560 (10th Cir. 1994)
(finding agency conclusions will be set aside “if unsupported by substantial evidence”). To the
contrary, the record shows the region’s market is volatile and Pitkin County property values are
among the highest in the country. Exh. 21 (Weston Decl. ¶ 3) (identifying variables that impact
local market values); Exh. 4 (Pitkin County Memo at 8). For example, one of the Land
Exchange properties — non-Federal Parcel 2 — was sold in 2010 for significantly more (62.5%)
than five years earlier. Exh. 9 (Appraisal, Parcel A at 41). According to the appraisal for Federal
Parcel A, this change in value was evidence of a volatile market, such that the more recent 2010
sale was deemed unfitting as a comparable sale to establish Federal Parcel A’s market value. Id.
(characterizing purchaser as “highly motivated”).
11 The State Director suggests that new appraisals are not needed because the values of
properties in land exchanges are relative. Exh. 5 (Protest Denial at 2). This reasoning is not
persuasive because BLM’s Land Exchange Handbook and the requisitie 6 to 12-month validity
period apply specifically to land exchanges.
19
In sum, BLM must have the appraisals for all properties involved in the Land Exchange
redone. The appraisals from November 2012 are past their validity period and cannot be relied
upon to support BLM’s “fair market” and “equal value” findings under FLPMA. See 43 U.S.C. §
1701(a)(9); § 1716(b).
b) The November 2013 Supplement Appraisal For Sutey Ranch Did
Not Comply With Required Procedures And Must Be Redone
The Uniform Standards of Professional Appraisal Practice (USPAP) requires compliance
with applicable certain procedures for all appraisals. BLM Land Exchange Handbook at 1-6;
UASFLA at 7 (“Appraisal preparation, documentation and reporting shall be in conformity with
these [UASFLA] Standards, which are compatible with standards and practices of both the
appraisal industry and the current edition of the Uniform Standards of Professional Appraisal
Practice”).12 BLM violated these procedures for a November 2013 appraisal of Sutey Ranch.
A one-page memorandum dated November 5, 2013 reveals that a verbal appraisal for
Sutey Ranch was provided to BLM. Exh. 19 (BLM Appraisal DOI Memorandum, Nov. 5, 2013).
The record indicates that this “appraisal” involved “a telephone conversation on November 1,
2013” between the appraiser Kevin Chandler and the BLM’s Kent Stevens. Id. As reported by
BLM, the appraisal reviewed market values relevant to the Sutey Ranch and concluded “the
current market still accurately reflects the values previously reported.” Id.
This November 1, 2013 verbal appraisal is subject to USPAP requirements. The USPAP
does not forbid verbal appraisals, but they must comply with relevant procedures. “An oral real
property appraisal must address the substantive matters set forth in Standards Rule 2-2(b).”
USPAP, Standards Rule 2-4. Rule 2-2(b) of the USPAP Standards articulates reporting options
12 The Uniform Standards of Professional Appraisal Practice is available at:
http://www.uspap.org/.
20
available to appraiser, including the content of a Summary Appraisal Report. The Summary
Appraisal Report must contain: identity of client and intended users, intended use of appraisal,
detailed description of property, basis of market value opinion, effective date of appraisal and
summary report, appraisal methods used, techniques employed and reasoning supporting the
opinion. USPAP, Standards Rule 2-2(b). Further, USPAP Standards Rule 2-1 requires “[e]ach
written or oral real property appraisal report must: (a) Clearly and accurately set forth the
appraisal in a manner that will not be misleading; (b) contain sufficient information to enable the
intended users of the appraisal to understand the report properly; and (c) clearly and accurately
disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting
conditions used in the assignment.”
Nothing in the Sutey Ranch November 2013 verbal appraisal indicates that the USPAP
requirements were followed. Just like the other Land Exchange appraisals, it must adhere to
aforementioned standards and requirements, its conclusion must be memorialized in a new
appraisal report, and it must reflect any changes in the market and/or subject properties.
Accordingly, the new appraisal for the Sutey Ranch described in BLM’s November 5, 2013
memorandum must be redone.
The State Director’s Protest Denial offers a circular rebuttal. The State Director reasons
that there was no new appraisal subject to USPAP requirements because, according to the
November 2013 verbal appraisal, the values of the Sutey Ranch had not changed. Exh. 5 (Protest
Denial at 2). However, an appraisal’s results do not dictate whether, in fact, an appraisal took
place. The USPAP defines an appraisal as “the act or process of developing an opinion of
value.” USPAP at U-1 (further noting appraisal’s relationship to “previous value opinion” may
be expressed). The November 2013 verbal appraisal meets this definition. Indeed, as USPAP
21
Advisory Opinion 3 states: “Regardless of the nomenclature used, when a client seeks a more
current value or analysis of a property that was the subject of a prior assignment, this is not an
extension of that prior assignment that was already completed, it is simply a new assignment.”
(emphasis added). That the appraiser did not change his opinion in the November 1, 2013
appraisal does not excuse non-compliance with USPAP procedures.
c) The Land Exchange’s Division Of The Sutey Ranch And Donation
of Parcel 1B Resulted In FLPMA Violations
FLPMA requires that the lands to be exchanged are “of equal value.” 43 U.S.C. §
1716(b); 43 C.F.R. § 2200.0-6(c). When the market values are not equal, the values may be
“equalized” by modifying the lands involved in the land exchange, cash equalization payments,
or through a waiver. 43 C.F.R. § 2201.6(a)-(c). Cash equalization payments cannot exceed 25%
of the value of the federal parcels. Id. § 2201.6(b). A waiver of a cash equalization payment may
not exceed 3% of the federal lands being exchanged. Id. § 2201.6(c).
In December 2011, BLM prepared a “Feasibility Analysis Report” for the Land
Exchange. Exh. 3. Generally, a feasibility report identifies “potential issues and concerns” that
may arise in completing a proposed land exchange. BLM Land Exchange Handbook at 2-4; 2-9.
It must also “[s]ummarize the outcome of the valuation analysis process as it relates to the
potential for the transaction to be of equal value following completion of the appraisals.” Id. at 2-
8. Relevant here, a feasibility report reveals “the strategy for equalizing the exchange by
adjusting the properties included in the proposal and how the strategy will be incorporated in the
appraisal and environmental documentation processes.” Id. BLM’s 2011 Feasibility Report for
the Land Exchange anticipated that the “value of the non-Federal parcels in this proposal is
expected to exceed the value of the Federal lands.” Exh. 3 (Feasibility Report at 6). According
22
to the Feasibility Report, the excess value would exceed $500,000, but the Wexners were willing
to waive any cash equalization payment or donate any excess land value to BLM. Id.
The November 2012 appraisals confirmed BLM’s Feasibility Report. The appraisal for
the 556-acre private Sutey Ranch showed its value significantly exceeded the market value of the
federal parcels (Parcels A, B and B1). Exh. 6 (Decision Record at 4). Sutey Ranch’s value
amounted to $6,240,000, whereas the federal lands totaled $4,000,000. Id.
Recognizing that accepting land as a donation was not permissible for a land exchange,
BLM describes the proposed Land Exchange in its April 2013 draft environmental assessment as
including the entire 556-acre Sutey Ranch. Draft EA at 2-2 – 2-3. The Draft EA is noticeably
silent as to the results of the November 2012 appraisals. It also does not disclose that Sutey
Ranch would be divided into two parcels; nor does it identify the Sutey Ranch donation as a
NEPA-alternative or even an alternative that was rejected. See Draft EA 2-7 – 2-10.
Yet, as soon as the comment period closed, BLM immediately changed course. BLM
and the Wexners agreed to: (1) divide Sutey Ranch into two, whereby Parcel 1A would be
valued at $3,050,00 for 321 acres and Parcel 1B at $2,240,000 for 235 acres; and (2) claim
Parcel 1B was no longer part of the Land Exchange and instead would be donated. An August
22, 2013 supplement to the Sutey Ranch appraisal confirms this division and donation. Exh. 11
(Supplement Appraisal, Sutey Ranch at 1) (“[T]he parties involved in the exchange desire to
separate the parcel into two tracts in order to equalize the value of private land ownership in
regards to the Federal (BLM) ownership”). When BLM approved the Land Exchange in its June
2014 Decision Record, the Land Exchange only included Sutey Ranch, Parcel 1A, although
Parcel 1B was used to support the agency’s decision. Exh. 6 (Decision Record at 1-2, 6).
23
BLM’s treatment of the Sutey Ranch in the Land Exchange violated FLPMA. By
including Parcel 1A in the Land Exchange and accepting Parcel 1B as a donation, BLM
exceeded its FLPMA authority, violated rules ensuring properties included in a land exchange
are of equal value, and violated requirements for land donations. See 5 U.S.C. § 706(2).
1) Equal Value Violation
Nothing in FLPMA contemplates the use of land donations in Land Exchanges. There
are three ways to satisfy FLPMA’s ‘equal value’ requirement, and land donations are not one of
them. FLPMA regulations expressly permit limited cash equalization payments and waivers of
cash equalizations so that land exchanges are equal value. See 43 C.F.R. § 2201.6(b) & (c); 43
U.S.C. § 1716(b). Because Sutey Ranch was valued at $2,240,000 more than the Federal lands
in the Land Exchange, neither a cash equalization payment nor a waiver was available, as this
difference in value exceeded the 25% limit and the 3% waiver cap. See 43 C.F.R. § 2201.6.
When the difference is too great for cash equalization payments or waivers, the
regulations contemplate eliminating lands from an exchange to ensure the values are equal. See
43 C.F.R. § 2201.6(a). Here, BLM did more than just eliminate a portion of Sutey Ranch (Parcel
1B) from the Land Exchange. Rather, it concurrently took Parcel 1B as a land donation.
However, FLPMA regulations explicitly limit ‘donations’ to cash equalization payments and
waivers — land donations are not an authorized means of achieving FLPMA’s equal value
requirement. BLM blatantly disregarded FLPMA’s equal value rules by purporting to accept
Parcel 1B as a land donation. In doing so, the agency exceeded its FLPMA authority and abused
its discretion. See 5 U.S.C. § 706(2)(a) & (C).
Notably, the Wexners entered into the Land Exchange with BLM willing to ‘donate’ a
sizable chunk of their private property (Parcel 1B) and take a $2,240,000 loss in a real estate
24
transaction. To ensure the Land Exchange happens, the Wexners also agreed to donate $1.1
million for development of a management plan for Sutey Ranch, and, to obtain support for the
Land Exchange, the Wexners contributed $700,000 to Pitkin County. Final EA at 2-6 – 2-7.
Presumably, private proponents do not enter land exchanges to lose money, as would result from
these components of the Land Exchange. The only rationale basis for agreeing to the unequal
Land Exchange is that the Wexners believed the land they are acquiring — specifically, Federal
Parcel A – has been significantly undervalued. See Exh. 4 (Pitkin County Memo at 9). Indeed,
as detailed below, the appraisal for Parcel A contains several errors that explain the Wexners’
actions and their “donations.”
2) BLM’s Public Interest Determination Was Unlawful
Due to the land donation, BLM also violated FLPMA’s ‘public interest’ requirement.
BLM must consider several relevant factors in assessing whether a land exchange is in the public
interest. 43 U.S.C. § 1716(a). A land exchange is in the public interest if it provides for better
federal land management and the needs of the public. See 43 C.F.R. § 2200.0-6(b); Desert
Citizens Against Pollution v. Bisson, 231 F.3d 1172, 1180 n. 8 (9th Cir. 2000) (FLPMA
authorizes land exchange “only on condition that the public interest will be served by the trade”).
BLM’s public determination must be supported by the record. 43 C.F.R. § 2200.0-6(b).
Here, the scope of BLM’s Public Interest Determination went beyond the lands included
in the Land Exchange. As set forth in its Decision Record, BLM concluded that “[t]he resource
values of the non-Federal lands are greater than the resource values of the Federal lands.” Exh. 6
(Decision Record at 2). However, this conclusion was based on the entire Sutey Ranch property
(non-Federal Parcel 1), and not limited to the portion that remained in the Land Exchange after
Parcel 1B was excised. Id. (“In addition to its natural resource values, non-Federal Parcel 1 has
25
high recreational values because …”) (emphasis added). As BLM states in its Decision Record,
“we determined that the exchange and donation under the Proposed Action Alternative would
better support local economies, community growth, and expansion goals of the three counties.”
Exh. 6 (Decision Record at 4). BLM touts the fact that “the exchange will place the AVLT’s
highest priority parcel in 2008 – the Sutey Ranch – into public ownership,” and that the entire
Sutey Ranch could have been “legally subdivided … into as many as 278 buildable lots.” Exh. 6
(Decision Record at 3). BLM further claims:
The Sutey Ranch has critical big game winter habitat in an area where large blocks of
undeveloped habitat are rapidly disappearing due to development pressures in the
Roaring Fork Valley. Protection of the ranch as open space will be of great benefit to
wildlife and the local community.
Id.
In sum, nowhere in the Decision Record or administrative record did BLM articulate the
values specific to Parcel 1-A of Sutey Ranch and use those values to evaluate the public interest
of the Land Exchange. As a result, the public interest benefits are overstated, and the values of
acquiring the entire Sutey Ranch were unlawfully weighed against the Federal lands being
disposed. BLM thus abused its discretion in rendering a FLPMA public interest determination.
3) The Land Donation Violated FLPMA’s Consistency
Requirement
For a similar reason, BLM violated FLPMA’s consistency requirements for land
donations. See 43 U.S.C. § 1715(b). In particular, BLM did not evaluate the donation of Parcel
1B independently of the Land Exchange to ensure this parcel satisfied all applicable standards.
See BLM Land Exchange Handbook at 7-9 (requiring donations to be analyzed separately).
FLPMA, its implementing regulations and BLM’s Acquisition Handbook require BLM to
determine that acquiring the donated property is “consistent with land use plans and is needed to
26
enhance management goals.” BLM Acquisition Handbook at IV-9; 43 U.S.C. §§ 1732(a);
1715(b); 43 C.F.R. §§ 1610.5-3(a), 1601.0-5(b), 1601.0-5(c).
None of BLM’s findings are specific to Parcel 1B. According to the Decision Record,
BLM made the required consistency finding based on the Sutey Ranch property and its entire
556 acres. Exh. 6 (Decision Record at 6). BLM made no consistency finding specific to Parcel
1B and its 235 acres. The Decision Record also identifies “recreation, habitat [and] watershed”
as significant resource values found on Sutey Ranch. Id. at 6. However, these values are specific
or applicable to Parcel 1B because water rights and irrigated land characterize Parcel 1A only,
and not Parcel 1B. Exh. 11 (Supplemental Appraisal, Sutey Ranch at 1).
d) The Parcel A Appraisal Erred In Determining The Market Value
Of This Property
As noted above, FLPMA and its regulations require that appraisals are performed to
ensure that the lands being exchanged are “of equal value.” 43 C.F.R. § 1716(b). The appraisals
determine the properties’ “market values,” which requires first determining “the highest and best
use of the property” and then estimating their value “as if in private ownership and available for
sale in the open market.” 43 C.F.R. § 2201.3-2(a)(1) & (2). The regulations provide that the
“[h]ighest and best use means the most probable legal use of a property, based on market
evidence as of the date of valuation, expressed in an appraiser’s supported opinion.” Id. §
2200.0-5(k). The UASFLA provides that the use must be “physically possible, legally
permissible, financially feasible, and result in the highest value” UASFLA at 17. In determining
the value of federal lands involved, the appraisal must be based on intended future use. Desert
Citizens Against Pollution v. Bisson, 231 F.3d 1172 (9th Cir. 2000); U.S. v. Benning, 330 F.2d
527, 531 (9th Cir. 1964) (“The highest and best use is not found from the past history or present
27
use of these lands but from reasonable future probability in the light of the history of the region
in general.”).
1) Wrong Future Use
For Federal Parcel A, the appraisal established a market value of $2,500 per acre based
on BLM’s current use of the property — “agriculture and/or recreation.” Exh. 7 (Appraisal,
Parcel A at 31); Exh. 9 (BLM’s Appraisal Review, Parcel A at 5) (“The Appraiser concluded that
the three parcels would have the same price per acre based on the highest and best use
conclusion of agriculture and recreation”). The appraisal explains this use determination: “the
lack of vehicle access limits physically possible uses to agriculture and/or recreation.” Exh. 7
(Appraisal, Parcel A at 30).
BLM’s reliance on the appraisal for Parcel A was unlawful. The agency must determine
market value for federal lands as “if in private ownership” and based on intended uses. 43 C.F.R.
§ 2201.3-2(a)(2). Indeed, courts have rejected appraisals that fail to assess future uses in
determining “highest and best use.” In Desert Citizens Against Pollution v. Bisson, 231 F.3d
1172 (9th Cir. 2000), a land exchange involved conveying federal lands to a private party for use
as a landfill; under federal ownership, the same lands had been used as a mine. Bisson, 231 F.3d
at 1175. The appraisal valued the federal lands for mining use, and not its intended use as a
landfill. Id. The court set aside the land exchange “because landfill use was reasonably
probable” and “the appraisal report failed to consider market demand for this potential future
use.” Id. at 1181-83. Several years later, the same proposed land exchange was before the Ninth
Circuit. NPCA v. BLM, 606 F.3d 1058 (9th Cir. 2010). Again, the court ruled that, although the
intended use of federal parcel was still a landfill, the appraisal wrongly valued the parcel as
though it would continue to be a mine or as open space. Id. at 1067-69. Citing its prior decision,
28
the Ninth Circuit ruled that “the use of the land as a landfill was not only reasonable, it was the
stated intent of the exchange.” Id. at 1068.
It is without dispute that the known intended use of Federal Parcel A (1,240 acres) – not
merely the reasonably probable use — is an exclusive ranch retreat, to be added in the Wexners’
privately-owned 4,300-acre Two-Shoes Ranch. Exh. 7 (Appraisal, Parcel A at 12). The State
Director claimed that “market value cannot be predicated upon potential uses that are speculative
and conjectural.” Exh. 5 (Protest Denial at 8). But the Wexners’ use of the property is neither
speculative nor conjectural, and the record demonstrates that Parcel A will become part of a
private ranch estate upon conveyance. Indeed, the only reason the Wexners are engaged in the
Land Exchange is to enlarge their ranch. The appraisal was deficient, therefore, because it
determined market value based on the use of Parcel A for agriculture and recreation, and not on
the Wexners’ intended use as part of the Two Shoes Ranch.
2) Federal Parcel A Has Vehicle Access
Relatedly, the appraisal for Federal Parcel A erred by reducing Parcel A’s value based on
a purported lack of access. The appraisal states that “a lack of vehicle access significantly
impacts values.” Exh. 7 (Appraisal, Parcel A at 52, 53). The appraisal finds that Parcel A lacks
vehicle access and, consequently, reduced the value of comparable properties to determine Parcel
A’s market value. Id. The State Director supports the appraisal’s rationale by offering that
“Parcel A is land locked and currently does not have any legal vehicle access.” Exh. 5 (Protest
Denial at 8) (emphasis added); see also Exh. 7 (Appraisal, Parcel A at 12) (“there is no vehicle
access to the subject property”); id. (adjusting downward to account for lack of access); Exh. 9
(BLM’s Appraisal Review, Parcel A at 5) (“Access is an important issue with each of the subject
parcels and especially with 1,240 acre Parcel A.”)
29
However, the appraisal did not consider access the available access to Parcel upon
completion of the Land Exchange, as the law requires. See 43 C.F.R. § 2201.3-2(a)(2); Bisson,
231 F.3d at 1175; Benning, 330 F.2d at 531. Parcel A will be easily accessible once it is
conveyed to the Wexners. It will have the same access as any other part of the Two Shoes
Ranch, including from Prince Creek Road across the Wexners’ existing ranch. Exh. 7 (Appraisal,
Parcel A at 12) (noting “private roads that traverse the holding are controlled by the proponent”);
id. at 21 (same).
Had the appraisal evaluated Federal Parcel A as including vehicle access, this would have
significantly changed the market value assigned to this property. The appraisal determined
Parcel A’s market value is $2,500/acre based on six sales of comparable properties. Exh. 7
(Appraisal, Parcel A at 35-48). Sales 1-3 had vehicle access and thus were adjusted downward
to compare to Parcel A. Sale 1 sold for $11,262 per acre, but the appraisal applied “a negative
adjustment of 75% for access results,” and thus was reduced to “$2,816 per acre.” Exh. 7
(Appraisal, Parcel A at 56). Sale 2’s market value was reduced by 50% due to vehicle access,
resulting in a downward adjustment from $9,107 per acre to a $4,554 per acre value. Id. Sale 3
was similarly reduced; its per acre value of $8,571 was reduced by 65% to account for vehicle
access, resulting in a $3,000 per acre value. Id.
These downward adjustments, however, were based on the false premise that Parcel A
lacked access. Because Parcel A will have access by its inclusion in the Two Shoes Ranch, the
appraisal was required to use the actual values of Sales 1-3. This would have resulted in a
market value of $9,646/acre for Parcel A, a significant increase from the market value of
$2,500/acre provided in the appraisal.
30
For the same reason, the appraisal should not have used Sales 4-6 as comparable sales, or
adjusted upwards significantly, because these properties lacked access. The appraisal claims that
these three properties have similar access problems as Federal Parcel A. Exh. 7 (Appraisal,
Parcel A at 57) (“the holding lacked legal or physical access from any public roadway”); id.
(“only has seasonal vehicle access from jeep trails that cross the [adjacent] BLM tract”); id.
(“seasonal vehicle access only from County Road 121 via jeep trails that cross intervening public
land”). But, as detailed, Federal Parcel A will be completely accessible and thus Sales 4-6 are
not comparable properties for determining Parcel A’s market value.
3) The Appraisal Did Not Include Related Sales, Including
Those Involving The Two Shoes Ranch
In separate transactions, the Wexners purchased two base properties (the Bane Tracts and
Crystal Valley Ranch) to create their Two Shoes Ranch. Exh. 21 (Weston Decl. ¶¶ 4-6). These
properties were acquired for $65,000,000, at an average purchase price of $16,0085/acre. Id.
Other parcels were later added to the Ranch, including the property identified as Sale 3 in the
Parcel A appraisal in 2010, at $13,929/acre. Exh. 8 (Appraisal, West Crown at 31); see Exh. 7
(Appraisal, Parcel A at 41). Federal Parcel A is surrounded by, and contiguous with, the Two
Shoes Ranch and contains the same physical features. The Wexners sought out the Land
Exchange and Parcel A to complete their Two Shoes Ranch.
The appraisal arbitrarily ignored these prior Wexner acquisitions. First, the appraisal did
not include the Wexners’ acquisition of the Two Shoes Ranch base properties as comparable
sales. See Exh. 7 (Appraisal, Parcel A at 35) (listing all comparables considered). Instead, six
other land transactions were used to establish a market value of $2,500 per acre for Parcel A. Id.
Although the appraisal itself is silent as to why these relevant properties were omitted, the State
Director explains that the Two Shoes Ranch acquisitions were not comparable because they
31
involved larger parcels, came with vehicle access, improvements, water rights, and development
rights. Exh. 5 (Protest Denial at 9). These explanations, however, are factually incorrect, based
on a misunderstanding of the law, or are irrelevant.
The size of the two properties purchased previously for the Two Shoes Ranch is of no
moment, as the value is determined on a per acre basis. That is, whereas the Two Shoes Ranch
acquisitions were valued at $16,085/acre, the appraisal determined Parcel A’s market value at
$2,500/acre. In any case, at 1,240 acres, Federal Parcel A is comparable in size to the two base
properties acquired to establish Two Shoes Ranch. Exh. 21 (Weston Decl. ¶ 5) (revealing one of
the base properties acquired was 1,560 acres).
The State Director’s claim that Parcel A lacks vehicle access is flawed for the reasons
stated above — upon completing the Land Exchange, Parcel A will have access via the Two
Shoes Ranch. The State Director’s claim that the properties purchased for the Two Shoes Ranch
included “improvements” is wrong. The Bane Tracts – one of the base properties the Wexners
acquired – was vacant land at the time of purchase. Exh. 21 (Weston Decl. ¶ 4). The other base
property – the Crystal Island Ranch – contained a home that was immediately demolished by the
Wexners upon acquisition, and thus this “extensive improvement” did not contribute to its
market value. Exh. 21 (Weston Decl. ¶¶ 8-9).
Lastly, the development rights on the properties acquired to establish the Two Shoes
Ranch contained the same development rights available on Parcel A. Specifically, the owner of
the Bane Tracts had applied for and received an exemption from Pitkin County’s Growth
Management Quota System (GMQS) and was provided with 20-year vested residential
development rights for very large homes. Exh. 21 (Weston Decl. ¶ 10). The same exemption is
32
available for Parcel A, and the evidence shows that the acquisition of such development rights
was reasonably probable if desired. Id.
In addition to the two base properties, the Parcel A appraisal dismissed the Wexners
purchase of 140-acre West Crown parcel. Exh. 7 (Appraisal, Parcel A at 41). The appraisal
included the purchase of this same property in 2005, but rejected the Wexners’ 2010 acquisition.
Exh. 7 (Appraisal, Parcel A at 41). The 2005 transaction amounted to $8,571/acre and the 2010
transaction totaled $13,928/acre. Id. at 35. The appraisal explains that it rejected the 2010 sale
price because that transaction involved “a highly motivated buyer” (the Wexners) and this meant
the price did not reflect market value. Id. at 41. The State Director offers the same explanation.
Exh. 5 (Protest Denial at 9).
The record, however, does not support this reasoning. As an initial matter, the 2010 sale
($1,950,000) was far below the asking price. According to the Parcel A appraisal, “the parcel
was available for $3,000,000 through a local realtor.” Exh. 7 (Appraisal, Parcel A at 41).
Further, although the appraisal states this property appreciated 62.5% between 2005 ($1.2
million) and 2010 ($1.95 million) (id.), the appraisal provides no support for the proposition that
the price reflects a motivated buyer, as opposed to a typical increase in this particular
marketplace. Exh. 4 (Pitkin County Memo at 8); Exh. 21 (Weston Decl. ¶ 3). Moreover, while
the appraisal chose to ignore the 2010 sale altogether, it fails to explain why this acquisition
could not have been discounted — the comparable sales included in the appraisal were discounted
based on access and development rights. Exh. 7 (Appraisal, Parcel A at 56).
The appraisal’s rationale for rejecting this 2010 sale also ignores the relevant market.
The market for Federal Parcel A and Non-Federal Parcel 2 in 2010 was the same – the Wexners.
To the extent the Wexners were motivated buyers in 2010 in acquiring the West Crown parcel
33
(Exh. 8 (Appraisal, West Crown at 31)), they were motivated for the exact same reason in
engaging the Land Exchange – completing their Two Shoes Ranch.
2. The Land Exchange Violates the National Environmental Policy Act
NEPA was enacted “to reduce or eliminate environmental damage and promote the
understanding of the ecological systems and natural resources important to the United States.”
Wyoming v. Dep’t of Agric., 661 F.3d 1209, 1236 (10th Cir. 2011). These goals are
accomplished through two main directives. First, NEPA requires federal agencies to take a “hard
look” at environmental impacts of their proposed actions. New Mexico v. BLM, 565 F.3d 683,
704 (10th Cir. 2009). Second, NEPA mandates agency transparency by informing and involving
the public in the process. Baltimore Gas v. NRDC, 462 U.S. 87, 97 (1983); Dine Citizens
Against Ruining our Environment v. Klein, 747 F.Supp.2d 1234, 1256 (D. Colo. 2010). “By
focusing both agency and public attention on the environmental effects of proposed actions,
NEPA facilitates informed decision-making by agencies and allows the political process to check
those decisions.” New Mexico, 565 F.3d at 703. “NEPA ensures that the agency will not act on
incomplete information, only to regret its decision after it is too late to correct.” Marsh v. Or.
Natural Res. Council, 490 U.S. 360, 371 (1989).
Under NEPA, each federal agency must circulate for public review an environmental
impact statement (“EIS”) for all “major Federal actions significantly affecting the quality of the
human environment.” 42 U.S.C. § 4332(2)(C); 40 C.F.R. § 1501.4. Federal agencies may first
prepare an EA that includes “sufficient evidence and analysis” to determine whether impacts are
significant enough to warrant an EIS. 40 C.F.R. §§ 1508.3; 1501.4(c), (e), 1508.9(a). If an
agency determines that an EIS is unnecessary, it must issue a “finding of no significant impact”
(FONSI) that provides a convincing statement of reasons why the action “will not have a
34
significant effect on the human environment.” Id. §§ 1508.9, 1508.13; Wilderness Soc’y v.
Wisely, 524 F. Supp.2d 1285, 1308 (D. Colo. 2007); Ocean Advocates v. Army Corps of Eng’rs,
402 F.3d 846, 864 (9th Cir. 2005).
NEPA regulations dictate that impacts are assessed based on their “context” and
“intensity.” 40 C.F.R.§ 1508.27(a)-(b). Agencies must analyze and disclose all “direct,”
“indirect,” and “cumulative” impacts of its actions as well as impacts of “connected actions.” Id.
§§ 1508.7, 1808.8(a) & (b), 1508.25(a) & (c); Sierra Club v. DOE, 275 F.Supp.2d 1177, 1183-85
(D. Colo. 2002). Agencies must conduct this analysis “before an irretrievable commitment of
resources is made.” New Mexico, 565 F.3d at 718.
a) BLM Violated Notice And Comment Requirements
BLM determined that public notice and comment was warranted and practicable on the
Land Exchange’s draft EA. The agency thus circulated the draft EA for public review and
comment on April 29, 2013, providing a 30-day comment period. Exh. 6 (Decision Record at 2);
Final EA at 4-6. However, BLM violated NEPA by not providing CWPL members and the
public an opportunity to comment on two aspects of the Land Exchange: (1) the appraisals; and
(2) the removal of a significant portion of the Sutey Ranch from the Land Exchange.
First, prior to the draft EA and the close of the public comment period, BLM did not
release the November 2012 appraisals. CWPL members were unable to comment on them.
Rickenbaugh Decl. ¶¶ 4, 15 (Exh. 13); Froelicher Decl. ¶ 6 (Exh. 15). The appraisals were
relevant to determining ‘significance’ under NEPA, specifically, “whether the action threatens a
violation of Federal … law.” See 40 C.F.R. § 1508.27(b)(10). It is not as if the appraisals were
not available prior to BLM’s comment period on the draft EA; all the appraisals had been
35
completed six months before the draft EA was circulated for public comment. See Exh. 7, 8, 20.
Rather, BLM simply withheld them from public review.
BLM thus violated one of NEPA primary goals – agency transparency that informs and
involves the public in a decision-making process. See Baltimore Gas, 462 U.S. at 97; New
Mexico, 565 F.3d at 703; Klein, 747 F.Supp.2d at 1256. BLM undermined CWPL members’
ability to meaningfully participate in the NEPA process. See Bering Straight Citizens v. Army
Corps of Engineers, 524 F.3d 938, 953 (9th Cir. 2008); Kern v. BLM, 284 F.3d 1062, 1073 (9th
Cir. 2002).
Notably, CPWL members took steps to obtain the appraisals to ensure their comments
were considered at a time when it mattered. On May 2013, CWPL members filed a Freedom of
Information Act (FOIA) request with BLM to obtain the appraisals. Rickenbaugh Decl. ¶ 15
(Exh. 13). When BLM failed to provide the appraisals and after an administrative appeal, CWPL
members filed a FOIA suit on December 13, 2013. See Rickenbaugh v. USDOI, 13-cv-3341 (D.
Colo). The appraisals were released to CWPL and the public almost immediately thereafter,
when BLM posted them on the agency’s website in January 2014. Rickenbaugh Decl. ¶ 15 (Exh.
13). At that time, however, the comment period had closed and was not reopened by BLM.
Second, through the close of the public comment period, BLM had represented to the
public that the Land Exchange included the entire 556-acre Sutey Ranch. The Wexners had
purchased Sutey Ranch in 2008 with the intent to exchange it for the BLM parcel (Federal Parcel
A) that split their Two Shoes Ranch. Exh. 4 (Pitkin County Memo at 2); Final EA at 1-2. The
November 15, 2012 appraisal valued Sutey Ranch and its “556.63 acres of vacant land” at
$5,290,000. Exh. 20 (Appraisal, Sutey Ranch at 2). BLM approved this appraisal on January 10,
36
2013. Exh. 10 (BLM Appraisal Review, Sutey Ranch). The April 2013 draft EA described the
Land Exchange as inclusive of the entire Sutey Ranch. Draft EA at 1-2.
BLM’s final approval on June 20, 2014, however, changed the Land Exchange in relation
to Sutey Ranch. Now, the Land Exchange included only 321 acres of Sutey Ranch. Exh. 11
(Supp. Appraisal, Sutey Ranch at 1) (“divide the parcel into two tracts,” with Parcel 1A
containing 321.25 acres and Parcel 1B containing 235.38”). The remainder of Sutey Ranch
would be donated to BLM, a transaction that was not included in the Draft EA or any other
public document. As a result, BLM prevented the public and CWPL members from reviewing
and commenting on this new Land Exchange, including whether the Land Exchange and land
donation complied with federal law. See 40 C.F.R. § 1508.27(b)(10) (NEPA requiring agencies
to assess whether action “threatens a violation of Federal…law”); Rickenbaugh Decl. ¶ 4,
15 (Exh. 13); Froelicher Decl. ¶ 6 (Exh. 15).
The State Director highlights the fact that the final EA contemplated the land donation of
Parcel 1B. Exh. 5 (Protest Denial at 7). This is true, but does not address the relevant issue. The
public was unable to comment on this significant change in the proposed Land Exchange
because it was absent from the draft EA. BLM did not re-open the public comment period to
ensure the public could weigh in on this issue, even though BLM decided to divide Sutey Ranch
into Parcels 1A and 1B almost immediately after the comment period closed on the draft EA.
b) BLM’s EA/FONSI Violated NEPA In Relying On Mitigation
Measures
Agencies must support their reliance on mitigation measures, such as the management
plans identified for Federal Parcel A and the Sutey Ranch, to formulate a FONSI. Davis, 302
F.3d at 1125; Wyoming Outdoor Council v. Army Corps, 351 F. Supp.2d 1232, 1250-52 (D. Wy.
2005). “A perfunctory description or mere listing of mitigation measures, without supporting
37
analytical data, is not sufficient to support a finding of no significant impact.” NPCA v. Babbitt,
241 F.3d 722, 733-34 (9th Cir. 2001); O’Reilly v. United States Army Corps of Engineers, 477
F.3d 225, 234 (5th Cir. 2007) (where “feasibility of the mitigation is not self-evident” district
court did not err in determining that EA did not provide rational basis for determining that
agency had complied with NEPA); see also Colo. Envtl. Coal. v. Dombeck, 185 F.3d 1162, 1173
(10th Cir. 1999) (requiring evaluation of adverse effects, and prohibiting “mere list of possible
mitigation measures”).
Several courts have rejected an agency’s reliance on mitigation to offset known impacts
under NEPA. One court found the mitigation measures “were not even developed, much less
evaluated.” San Luis Valley Ecosystem Council, 657 F.Supp.2d at 1245-46 (noting FWS did not
“evaluate[] the efficacy of many of the proposed safeguards”). Another court determined that
absent “detailed mitigation plans,” BLM could not support a FONSI because the severity of
impacts was unknown. Klein, 747 F.Supp.2d at 1258-59 (noting “permit revision decision
document contains only vague reference to ‘mitigation/data recovery plans’ which will be
conducted”). Further, a court also held an agency’s reliance on mitigation was unlawful because
the EA/FONSI only provided a “cursory discussion of the reclamation activities it plans to
perform following the logging.” Rocky Mountain Wild v. Vilsack, 843 F.Supp.2d 1188, 1197
(D. Colo. 2012).
To address the Land Exchange’s adverse impacts, BLM relies upon mitigation measures:
(1) a conservation easement on Federal Parcel A and (2) BLM’s development and
implementation of a management plan for the Sutey Ranch (both Parcels 1A and 1B), which will
be paid for by a $1.1 million donation. These two mitigation measures fail to meet NEPA
standards and do not support BLM’s FONSI.
38
On BLM’s Parcel A, there are 55 acres of habitat occupied by the Harrington’s
penstemon – a plant designated as a “sensitive species” by BLM. Final EA at 3-114 – 3-116; 3-
123. Livestock grazing within Parcel A under the terms of BLM grazing permits adversely
impact this plant. Final EA at 3-119. BLM had adopted certain conservation measures in its
grazing permit and allotment management plan to address grazing impacts on riparian habitat,
which BLM claimed would also improve condition for the Harrington’s penstemon. Final EA at
3-119, 120 (measures include reduction in livestock on allotment, rotational grazing, and
reducing number of summer grazing days). Upon completion of the Land Exchange, 55 acres of
Harrington’s penstemon habitat will be lost (Final EA at 3-123) and BLM’s conservation
measures will no longer apply. Absent such measures, continued livestock grazing on Parcel A
will have significant impacts on populations and habitat of the Harrington’s penstemon.
BLM cannot rely on the conservation agreement to eliminate impacts to the Harrington’s
penstemon. The Parcel A conservation easement will protect against residential development
associated with the Two Shoes Ranch. Final EA at 2-4 (“The conservation easements would
extinguish the Proponents’ development rights on the parcels, prevent any future subdivision of
the parcels and restrict the improvements allowed.”). However, the conservation agreement does
not specifically address the Harrington’s penstemon. It discloses that livestock grazing will
continue on Parcel A, and notes that a grazing management plan will be developed in the future.
Final EA, App. A at A-3 – A-4. But it fails to require development of such a plan by a date
certain, nor does it include specific management requirements that address impacts to the
Harrington’s penstemon. See Id. Accordingly, BLM had no factual basis in the record to
39
conclude that the Land Exchange will result in no significant impacts to the Harrington’s
penstemon.13
BLM’s reliance on the development of a future management plan for the Sutey Ranch is
similarly unlawful. BLM anticipates environmental impacts on the Sutey Ranch parcels from
recreation activities. Final EA at 3-29 – 3-30. According to BLM’s Final EA, these impacts will
be addressed through a management plan. Id.; Final EA at 2-4 – 2-5.
Like the grazing management plan contemplated by the conservation agreement, BLM
had no support to conclude the impacts from recreational use of Sutey Ranch will result in no
significant impacts. There is no management plan, and thus adequacy of a future plan is
unknown.14 BLM notes there is an Implementation Plan for the Red Hill Special Recreational
Management Area and that management plan could provide a template for the Sutey parcels.
Final EA at 2-5. However, the Red Hill Implementation Plan was prepared in 1999, over 15
years ago. BLM has not shown the Plan contains objectives and management actions applicable
to Sutey Ranch, or that the objectives and actions identified in 1999 continue to be relevant and
applicable. Further, although the 1999 Implementation Plan adopts deadlines for completing
certain management actions, BLM has provided no information or supporting documentation
detailing whether these actions were implemented in a timely fashion, if at all, and their efficacy.
In sum, BLM lacks a factual basis upon which to rely on a proposed, undeveloped management
plan to mitigate the adverse environmental impacts of the Land Exchange.
CONCLUSION
13 NEPA was also violated on this issue because there was no grazing management plan
included in BLM’s EA, and thus CWPL was unable to review and comment on this future plan.
14 Similarly, BLM also violated NEPA because CWPL was unable to review and provide
comments on an undeveloped management plan for the Sutey Ranch parcels.
40
For the foregoing reasons, the IBLA should grant Appellant Colorado Wild Public Lands’
Request for Stay pending the outcome of this appeal.
December 17, 2014
By: __________________________
Neil Levine
LAW OFFICE
1107 Auraria Parkway, Suite 106
Denver, CO 80204
303-455-0604
Attorneys for Appellant
Colorado Wild Public Lands
41
CERTIFICATE OF SERVICE
I, Neil Levine, hereby certify that I served the foregoing Appeal and Request for Stay
upon the following individuals by placing it in the U.S. Mail, first-class postage prepaid, certified
return receipt requested, this 17th day of December, 2014:
Ruth Welch
State Director
Colorado State Office
Bureau of Land Management
2850 Youngfield St.
Lakewood, CO 80215
Steven Bennett
Field Manager
Colorado River Valley Field Office
U.S. Bureau of Land Management
2300 River Frontage Rd.
Silt, CO 81652
Regional Solicitor’s Office
U.S. Department of the Interior
755 Parfet St., Ste. 151
Lakewood, CO 80215
Interior Board of Land Appeals
801 N. Quincy St.
Arlington, VA 22203
_/s/ Neil Levine_______
Neil Levine