## Facts

- The United States owned the surface of the Allegheny National Forest (ANF), while private parties owned many underlying oil and gas mineral rights, creating a split estate.
- Under state property law principles, mineral owners generally hold an implied easement to use the surface as reasonably necessary to develop the minerals, absent contrary deed terms.
- From about 1980 to 2008, mineral owners provided the Forest Service 60 days’ advance notice of proposed drilling; the Forest Service issued a Notice to Proceed (NTP) acknowledging notice and recording any mutually agreed surface-use conditions.
- Environmental organizations challenged the NTP practice, contending that the Forest Service unlawfully allowed drilling without broader NEPA review.
- After settling with those organizations, the Forest Service adopted a new policy postponing NTPs until completion of a forest-wide Environmental Impact Statement (EIS), effectively halting new drilling for years.
- Mineral owners and related entities alleged that the moratorium prevented access to vested mineral rights and caused irreparable harm through lost, time-sensitive extraction opportunities.
- The district court granted a preliminary injunction prohibiting the Forest Service from conditioning NTPs on the forest-wide EIS and directing a return to the prior cooperative notice/NTP approach.
- The Forest Service and intervenor environmental organizations appealed.

## Issues

1. Whether the Forest Service had authority to condition private owners’ exercise of outstanding mineral rights on completion of a forest-wide EIS, effectively converting NTPs into a federal permitting requirement.
2. Whether issuance or withholding of NTPs constituted a NEPA “major Federal action” supporting a drilling halt pending an EIS.
3. Whether the moratorium and policy shift were reviewable as final agency action under the APA and, if so, whether the change required notice-and-comment rulemaking.
4. Whether the plaintiffs satisfied the requirements for a preliminary injunction.

## Decision

- The Third Circuit affirmed the preliminary injunction in all respects.
- The court held the Forest Service likely lacked authority to impose a de facto permit regime over private, outstanding mineral rights; the Service could seek reasonable surface accommodations but could not require its approval as a precondition to drilling.
- The court held NTP issuance was not a NEPA “major federal action” because drilling authority derived from private property rights and state law, not federal permission.
- The court held the moratorium was final agency action with immediate, concrete consequences and was likely an unlawfully adopted substantive rule because it imposed new binding constraints without notice-and-comment procedures.
- The court agreed plaintiffs showed irreparable harm and that the balance of equities and public interest favored injunctive relief.

## Legal Principles

- In a split-estate setting where mineral rights are outstanding in private owners, the surface owner’s power is limited to requiring reasonable surface use consistent with the mineral owner’s implied easement; absent specific statutory authority, an agency cannot convert that relationship into discretionary federal permitting.
- NEPA applies only to “major Federal actions”; where an activity may proceed as a matter of private right without federal authorization or control, an agency’s administrative involvement does not itself create a NEPA trigger.
- An agency decision that marks the consummation of decision-making and has immediate legal or practical effects constitutes final agency action reviewable under the APA.
- Agency policy changes that function as substantive rules imposing new obligations or constraints generally require APA notice-and-comment rulemaking; adoption through settlement does not excuse procedural requirements.
- Preliminary injunctive relief may be warranted where plaintiffs show likely success on the merits, irreparable harm not fully compensable by later relief, and that equities and public interest favor preventing unauthorized agency restraint on property rights.

## Conclusion

The Third Circuit sustained an injunction against the Forest Service’s ANF drilling moratorium, concluding the agency likely exceeded its authority over private outstanding mineral rights, could not treat NTPs as a NEPA-triggering federal action, and likely adopted the moratorium through reviewable final action and unlawful rulemaking under the APA.


Minard Run Oil Co. v. U.S. Forest Serv., 670 F.3d 236 (3d Cir. 2011)