(CN) - The Obama administration should not have been held in contempt for continuing a drilling moratorium in the Gulf of Mexico over a judge's injunction, the 5th Circuit ruled.
Secretary of the Interior Ken Salazar placed the moratorium on new drilling in the Gulf one week after the April 20, 2010, explosion of the Deepwater Horizon rig, which killed 11 people and set off the worst oil spill in U.S. history.
A month later, the department issued a "May Directive" imposing a six-month moratorium on drilling operations in the Gulf. The department represented that seven engineering experts had peer-reviewed this policy, but it was later found that five of the seven experts never recommended the moratorium.
Hornbeck Offshore, which owns a fleet of vessels that support deepwater exploration, sued
the Salazar in federal court, claiming that the moratorium was neither adequately explained nor justified.
U.S. District Judge Martin Feldmean agreed, and granted a preliminary injunction
against the ban in June 2010.
Within weeks, the Interior Department issued a second moratorium
that purportedly included a more thorough explanation its necessity. Offshore drilling companies criticized it, however, as being nearly identical to the first.
Feldman held the Department of the Interior in contempt
for this move, finding that "each step the government took following the court's imposition of a preliminary injunction showcases its defiance."
He also awarded Hornbeck $530,000 in fees and costs.
On Tuesday, a divided three-judge panel of the 5th Circuit reversed the contempt finding and the fee award.
"Taken together, the comments to industry, to the Senate, and to the public support the district court's factual conclusion that Interior was intent on reinstating a moratorium that imposed the same limitations as the May Directive from the moment the court enjoined it," Judge Leslie Southwick wrote for the majority. "Neither harboring that intent nor imposing a new moratorium, though, was a violation of the court order."
"If the purpose were to assure the resumption of operations until further court order, it was not clearly set out in the injunction," Southwick added. "A more broadly worded injunction that explicitly prohibited the end-run taken by Interior would have set up issues more clearly supportive of contempt."
The court noted that the White House had a directly role in the decision to reissue the moratorium.
"Interior was carrying out a policy decision made by the president," Southwick wrote.
"The national importance of this case weakens, not strengthens, the propriety of the court's contempt finding," he added. "The controversial policy decisions that the May and July Directives reflected were made at the highest level of government. In implementing those decisions, we do not discern a violation of a clear provision of the district court's order by the words expressed or actions taken by the Secretary."
A fee award is also inappropriate because the "potential basis for maintaining the award ... has not been meaningfully briefed," the ruling states.
In an 11-page dissent, Judge Jennifer Elrod said "the totality of the circumstances supports the able district court's decision."
"The majority opinion weakens the contempt power of federal district courts by making unreasonably restrictive fact findings of its own to reach a narrow and unworkably technical result," Elrod wrote.
"In essence, the majority opinion suggests that a litigant can undermine and avoid a district court's order, provided that it does not, as a very technical matter, engage in activity that the order expressly prohibits," she added.