New Orleans U.S. District Judge Martin Feldman, who in June blocked the federal government from enforcing a moratorium on deepwater drilling in the Gulf of Mexico, Wednesday denied the government’s second attempt to dismiss the lawsuit challenging the six-month moratorium. The Interior Department asked the court to dismiss the industry challenge as moot since the department had revoked the first moratorium that was the target of the June court ruling and replaced it with a second moratorium.

“The court finds no way on this record to accord the defendants [Interior] the solicitude they claim they deserve when only hours after this court enjoined the enforcement of the first moratorium, Secretary [Ken Salazar] stated publicly on more than one occasion his resolve to soon issue a new moratorium. When faced with losing its motion to stay pending appeal before the Fifth Circuit, the government plainly admitted that a related moratorium was going to be imposed. And indeed, four days after that motion was denied, the secretary issued the successor moratorium,” Feldman said in a 20-page opinion.

“It is difficult to square such public expressions of resoluteness, with the government’s assertion that its rescission of the first moratorium and its issuance of a new moratorium is entitled to solicitude and should not be considered litigation posturing,” he said.

On June 22, Feldman granted the motion of Covington, LA-based Hornbeck Offshore Services LLC and other oil service companies for a preliminary injunction and ordered the Obama administration not to enforce the initial moratorium (see Daily GPI, June 23). He said the Interior Department failed to justify its decision to impose a prolonged ban on deepwater drilling in the wake of the explosion on board the BP plc-leased Deepwater Horizon rig, and essentially sought swift retribution against an entire industry for the actions of one company — BP.

In early July, the U.S. Court of Appeals for the Fifth Circuit rejected the federal government’s appeal of Feldman’s ruling (see Daily GPI, July 12). Shortly afterward, Salazar rescinded the original May 28 moratorium and ordered a second moratorium (see Daily GPI, July 14). Producers, oil service firms and end-users immediately slammed the new drilling freeze, saying it was no different than the original moratorium despite hints from Salazar that he was considering narrowing the scope of the ban.

“This new moratorium purports to apply to all rigs that use subsea blowout preventers or surface blowout preventers on a floating facility and applies through Nov. 30. In reality, the new moratorium covers precisely the same rigs and precisely the same deepwater drilling in the Gulf of Mexico as did the first moratorium,” the judge said.

Interior argued that the oil service companies’ complaint “must be dismissed as moot because the challenged agency decision, the first moratorium, has been revoked and superseded by a new, second moratorium…[Interior denied] that the new moratorium is a device to manipulate the legal system,” the court said.

But the oil service companies contend their lawsuit has not been mooted by the second moratorium. They point out that the superseding moratorium “makes only superficial changes to the first moratorium by referring to the type of blowout preventers used rather than the depth drilled,” Feldman noted.

“Because this court has determined that no rational nexus exists between the fact of the tragic Deepwater Horizon blowout and placing an attainder of universal culpability on every other deepwater rig operator in the Gulf of Mexico; because this court has determined that the first moratorium is invalid in law; and because the Interior secretary’s second moratorium arguably fashions no substantial changes from the first moratorium, the government has failed to circumvent the voluntary cessation exception to mootness. Accordingly [its] motion to dismiss, or alternatively for a stay, is denied without prejudice.”

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