ÿWPC þ2ÐÓ=ùÓX=V”–BŒßúmTšü+íLò€2H5FuOa@ÕXÖ}GèÐýuw1ѼøQê×QFL…¿Œïè´zAƒí ÞgH¸cß91¤ø}ó .23KúŠ»Í4BNšù+,ß'=’nxùV7HÄÆÈ5RKùVXëHÕžšõælTF’¦;8È Ÿ–ò*àÎJz"ºÜ›­©qã’jËh’aM×½¥ŸÛ¼j‘axfwëC„sDþ ÝVVZ0k–$/›—Óc.Òƒ×DËëÔ§½€.lì"C$ ,]bÊa@Žÿ—€{Û5Sä¼áiÙKëY¤= UÍ}ö E/ýÞ¸Ù®ºY7^Vì,(;r·'ÿÊ #!šUN» %  0(^ 7wC4Sgv mx˜Lexmark Optra Rx,ä,,,,,ä0(ÖÃ9 Z‹6Times New Roman RegularX($¡¡²† )á(Vq(ê:i¢Ø+003|xÿU‹ÿÀÀÀÝ ƒ!ÝÝ  ÝññÔ_ÔññNo.€99-158Ð ° ÐÌÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€IN€THE€SUPREME€COURT€OF€THE€STATE€OF€MONTANAÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€2000€MT€209ÌÌÌÌÌÌFRIENDS€OF€THE€WILD€SWAN,€a€ÌÌnonprofit€corporation,ÌÌÌÌPlaintiff,€Respondent,€andÌÌCross-Appellant,ÌÌÌÌv.ÌÌÌÌDEPARTMENT€OF€NATURAL€RESOURCES€ÌÌAND€CONSERVATION,€ÌÌÌÌDefendant,€Appellant,€andÌÌCross-Respondent.ÌÌÌÌÌÌÌÌAPPEAL€FROM:€District€Court€of€the€First€Judicial€District,€Ð @-(, ЇIn€and€for€the€County€of€Lewis€and€Clark,ÌÌThe€Honorable€Thomas€C.€Ô_ÔHonzelÔ_Ô,€Judge€presiding.ÌÌÌÌCOUNSEL€OF€RECORD:ÌÌÌÌFor€Appellant:ÌÌÌÌTom€Butler€and€Michael€J.€Mortimer,€Montana€Department€ofÌÌNatural€Resources€&€Conservation,€Helena,€MontanaÌÌÌÌFor€Respondent:ÌÌÌÌStephen€C.€Pohl,€Attorney€at€Law,€Ô_ÔBozemanÔ_Ô,€MontanaÌÌÌÌFor€Amicus:ÌÌÌÌRebecca€W.€Watson,€Ô_ÔGoughÔ_Ô,€Ô_ÔShanahanÔ_Ô,€Johnson€&€Waterman,€ÌÌHelena,€Montana€ÌÌÌÌÌÌSubmitted€on€Briefs:€November€4,€1999€ÌÌDecided:€August€8,€2000ÌÌFiled:Ð @-(, ЇÌÌÌÌ__________________________________________ÌÌClerkÌÌJustice€Terry€N.€Ô_ÔTrieweilerÔ_Ô€delivered€the€opinion€of€the€Court.ÌÌ€€€1.ððThe€Plaintiff,€Friends€of€the€Wild€Swan,€brought€this€action€in€the€District€Court€for€theÏFirst€Judicial€District€inÌ€€€€€Lewis€and€Clark€County€to€challenge€the€sufficiency€of€the€Environmental€Impact€StatementÏ(Ô_ÔEISÔ_Ô)€prepared€by€theÌ€€€€€Defendant,€Montana€Department€of€Natural€Resources€and€Conservation€(Ô_ÔDNRCÔ_Ô),€for€theÏMiddle€Soup€CreekÌ€€€€€Project€pursuant€to€the€Montana€Environmental€Policy€Act€(Ô_ÔMEPAÔ_Ô)€ðððð€75-1-201,€et€seq.,ÏMCA.€The€District€CourtÌ€€€€€held€that€the€Ô_ÔEISÔ_Ô€prepared€by€the€Ô_ÔDNRCÔ_Ô€inadequately€addressed€the€cumulative€impacts€of€theÏproject€and€also€heldÌ€€€€€that€the€Ô_ÔDNRCÔ_Ô€should€have€prepared€a€supplemental€Ô_ÔEISÔ_Ô€due€to€changed€economicÏcircumstances€of€the€project.€TheÌ€€€€€District€Court€enjoined€any€harvest€of€timber€on€the€Middle€Soup€Creek€Project€until€theÏÔ_ÔDNRCÔ_Ô€prepares€theÌ€€€€€supplemental€Ô_ÔEISÔ_Ô.€Ô_ÔDNRCÔ_Ô€appeals€from€that€judgment.€Friends€of€the€Wild€SwanÏcross-appeals€from€the€DistrictÌ€€€€€Court's€denial€of€Rule€11€sanctions€against€the€Ô_ÔDNRCÔ_Ô.€We€affirm€the€judgment€of€the€DistrictÏCourt.€Ì€€€2.ððThe€following€issues€are€presented€on€appeal€by€the€Ô_ÔDNRCÔ_Ô:€Ì€€€3.ðð1.€Did€the€District€Court€err€when€it€held€that€the€Ô_ÔDNRCÔ_Ô€violated€the€Ô_ÔMEPAÔ_Ô€by€its€failure€toÏinclude€an€adequateÌ€€€€€cumulative€impacts€analysis€in€its€Ô_ÔEISÔ_Ô?€Ì€€€4.ðð2.€Did€the€District€Court€err€when€it€held€that€the€Ô_ÔDNRCÔ_Ô€was€required€to€prepare€aÏsupplemental€Ô_ÔEISÔ_Ô?€Ì€€€5.ðð3.€Did€the€District€Court€err€when€it€held€that€Friends€of€the€Wild€Swan€was€not€required€toÏprovide€a€Ô_ÔpostappealÔ_ÔÌ€€€€€injunction€bond€pursuant€to€ðð€77-1-110,€MCA?€Ì€€€6.ððThe€following€issue€is€presented€on€cross-appeal€by€Friends€of€the€Wild€Swan:€Ì€€€7.ðð4.€Did€the€District€Court€err€when€it€denied€Friends€of€the€Wild€Swan's€motion€forÏimposition€of€Rule€11,Ì€€€€€Ô_ÔM.R.Civ.P.Ô_Ô,€sanctions€against€the€Ô_ÔDNRCÔ_Ô?€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€FACTUAL€BACKGROUNDÌÌ€€€1.ððThis€dispute€relates€to€the€Ô_ÔDNRCÔ_Ô's€proposed€timber€sale,€known€as€the€Middle€Soup€CreekÐ @-(, ÐProject,€on€land€nearÌ€€€€€Swan€Lake,€Montana.€The€land€is€owned€by€the€State€of€Montana€and€held€in€trust€by€theÏÔ_ÔDNRCÔ_Ô€for€the€support€ofÌ€€€€€the€public€schools€pursuant€to€Article€X€of€the€Montana€Constitution.€The€purpose€of€theÏproject€is€to€generate€bothÌ€€€€€short-and€long-term€revenue€for€the€Montana€School€Trust.€The€project,€as€originallyÏproposed,€involved€the€harvestÌ€€€€€of€approximately€6€million€board€feet€of€timber€on€2591€acres€of€Swan€Valley€forest.ÏApproximately€50€percent€of€theÌ€€€€€Swan€Valley€forest€consists€of€old€growth,€including€one€of€the€last€large€stands€of€old€growthÏremaining€in€Montana.€Ì€€€2.ððIn€September€1996,€the€Ô_ÔDNRCÔ_Ô€issued€a€draft€Ô_ÔEISÔ_Ô€which€discussed€the€impacts€of€fourÏalternative€management€plansÌ€€€€€for€the€Middle€Soup€Creek€Project.€Alternative€"A"€required€no€action€and€would€have€left€theÏMiddle€Soup€CreekÌ€€€€€area€Ô_ÔunmanagedÔ_Ô€and€permitted€the€Ô_ÔDNRCÔ_Ô€to€enter€into€a€20-year€conservation€lease.ÏAlternative€"B"€requiredÌ€€€€€intensive€management€and€was€designed€to€promote€Ô_ÔsustainabilityÔ_Ô€of€the€ecosystem€byÏharvesting€approximately€5.2Ì€€€€€million€board€feet€of€timber.€Alternative€"C"€required€preservation€of€old€growth€timber,Ïwhile€permitting€the€harvestÌ€€€€€of€approximately€150,000€board€feet€of€saw-timber€stand.€Alternative€"D"€maximized€timberÏproductivity€byÌ€€€€€harvesting€approximately€5.6€million€board€feet€of€old€growth,€saw-timber,€and€multistoriedÏstands.€Ì€€€3.ððFollowing€public€hearings€and€comments,€the€Ô_ÔDNRCÔ_Ô€issued€the€final€Middle€Soup€CreekÏProject€Ô_ÔEISÔ_Ô€in€FebruaryÌ€€€€€1997.€Alternative€"B"€was€identified€as€the€preferred€alternative€because€of€its€economicÏviability€and€its€positiveÌ€€€€€short-€and€long-term€benefits€in€accordance€with€the€State€Forest€Land€Management€PlanÏphilosophy€and€its€ResourceÌ€€€€€Management€Standards.€Alternative€"B"€was€projected€to€generate€approximately€$1,045,572Ïin€net€revenue€in€theÌ€€€€€short-term,€and€was€to€be€accomplished€by€using€a€harvesting€process€known€as€"structuralÏenhancement,"€in€whichÌ€€€€€selected€trees€would€be€cut€in€order€to€mimic€historical€forest€conditions.€Ì€€€4.ððIn€July€1997,€the€Board€of€Land€Commissioners€approved€the€Middle€Soup€Creek€timberÏsale.€The€minutes€of€theÌ€€€€€board's€meeting€reflect€their€approval€of€a€harvest€of€approximately€3.8€million€board€feetÏfrom€970€acres€of€the€SwanÌ€€€€€Valley€forest.€There€was€no€explanation€for€reduction€of€the€sale€from€5.2€million€board€feetÏas€proposed€in€the€finalÌ€€€€€Ô_ÔEISÔ_Ô€to€3.8€million€board€feet€as€approved€by€the€board.€Ì€€€5.ððOn€September€4,€1997,€Friends€of€the€Wild€Swan,€a€Montana€nonprofit€corporationÏdedicated€to€preserving€theÐ @-(, Ѐ€€€€natural€environment€of€the€Swan€Valley,€filed€a€complaint€alleging€various€violations€of€theÏÔ_ÔMEPAÔ_Ô€by€the€Ô_ÔDNRCÔ_Ô€in€itsÌ€€€€€final€Ô_ÔEISÔ_Ô,€including€inadequate€environmental€analysis.€Friends€of€the€Wild€Swan€sought€anÏorder€directing€the€Ô_ÔDNRCÔ_ÔÌ€€€€€to€complete€an€Ô_ÔEISÔ_Ô€in€accordance€with€the€Ô_ÔMEPAÔ_Ô€and€an€injunction€prohibiting€the€Ô_ÔDNRCÔ_ÔÏfrom€proceeding€with€anyÌ€€€€€activity€in€furtherance€of€the€Middle€Soup€Creek€Project€until€a€proper€Ô_ÔEISÔ_Ô€was€prepared.€Ì€€€6.ððOn€September€10,€1997,€the€Ô_ÔDNRCÔ_Ô€entered€into€a€contract€with€Plum€Creek€ManufacturingÏCompany€for€theÌ€€€€€harvest€of€3.8€million€board€feet€of€timber€on€the€Middle€Soup€Creek€Project.€Pursuant€to€theÏcontract,€the€Ô_ÔDNRCÔ_ÔÌ€€€€€staff€marked€the€trees€to€be€harvested€by€Plum€Creek€with€orange€paint.€Ì€€€7.ððFollowing€the€Ô_ÔDNRCÔ_Ô's€selection€of€trees€to€be€harvested,€Friends€of€the€Wild€SwanÏrequested€Sara€Johnson,€Ph.D.,Ì€€€€€a€wildlife€biologist,€to€review€the€site€of€the€sale,€the€selection€of€trees€by€the€Ô_ÔDNRCÔ_Ô,€and€theÏfinal€Ô_ÔEISÔ_Ô.€JohnsonÌ€€€€€concluded€that€the€selection€of€trees€by€the€Ô_ÔDNRCÔ_Ô€was€more€extensive€than€described€by€theÏfinal€Ô_ÔEISÔ_Ô,€and€that€theÌ€€€€€final€Ô_ÔEISÔ_Ô€was€misleading€to€the€public€regarding€the€amount€of€old€growth€timber€to€beÏharvested.€Ì€€€8.ððOn€January€5,€1998,€Friends€of€the€Wild€Swan€and€the€Ô_ÔDNRCÔ_Ô€stipulated€that€no€timberÏwould€be€harvested€on€theÌ€€€€€Middle€Soup€Creek€Project€until€December€1,€1998.€As€a€result€of€the€parties'€stipulation,ÏFriends€of€the€Wild€SwanÌ€€€€€withdrew€its€pending€motion€for€a€preliminary€injunction.€Ì€€€9.ððOn€March€16,€1998,€the€Ô_ÔDNRCÔ_Ô€sent€a€letter€to€all€interested€parties€and€acknowledged€that€itÏhad€made€a€mistakeÌ€€€€€when€it€identified€the€trees€to€be€harvested€by€Plum€Creek.€The€Ô_ÔDNRCÔ_Ô€explained€that€properÏidentification€of€theÌ€€€€€trees€would€result€in€a€harvest€of€fewer€and€smaller€trees,€which€in€turn€would€reduce€theÏvolume€of€timber€harvestedÌ€€€€€from€3.8€million€board€feet€to€1.99€million€board€feet.€Because€of€the€reduction€in€volume€andÏtree€size,€the€Ô_ÔDNRCÔ_ÔÌ€€€€€and€Plum€Creek€negotiated€a€reduced€price€per€thousand€board€feet€of€timber€harvested.€Ì€€10.ððOn€October€6,€1998,€Friends€of€the€Wild€Swan€filed€its€Second€Amended€Complaint€whichÏadded€the€alleged€Ô_ÔMEPAÔ_ÔÌ€€€€€violation€of€failure€to€prepare€a€supplemental€Ô_ÔEISÔ_Ô€in€light€of€the€changed€economicÏcircumstances€of€the€sale.€Ì€€11.ððOn€October€15€and€16,€1998,€the€District€Court€held€a€hearing€to€consider€the€merits€ofÏFriends€of€the€Wild€Swan'sÌ€€€€€complaint.€Ì€€12.ððThe€parties'€stipulation€that€no€harvest€would€occur€expired€on€December€1,€1998.€FriendsÏof€the€Wild€SwanÌ€€€€€received€a€letter€from€the€Ô_ÔDNRCÔ_Ô€dated€November€27,€1998,€which€informed€them€that€"PlumÏCreek€timber€CompanyÐ @-(, ÐÔ_Ô€€€€€is€preparing€to€begin€harvesting€operations€on€December€1€or€as€soon€after€that€date€when€theÏdesired€environmentalÌ€€€€€conditions€are€achieved."€The€letter€further€informed€them€that€the€"sale€contract€allowsÏlogging€activities€to€begin€onÌ€€€€€December€1,€1998,€if€there€is€at€least€18€inches€of€snow€accumulation€and€freezingÏtemperatures.€Logging€activitiesÌ€€€€€may€begin€on€December€15€if€there€is€at€least€24€inches€of€snow€accumulation,€even€thoughÏtemperatures€may€not€beÌ€€€€€freezing."€Friends€of€the€Wild€Swan€recognized€that€these€environmental€conditions€were€alsoÏset€forth€in€the€EIS€asÌ€€€€€required€mitigators€for€reducing€impact€upon€the€soil.€Ì€€13.ððIn€an€affidavit€dated€January€14,€1999,€Arlene€Montgomery,€Director€of€Friends€of€the€WildÏSwan,€stated€that€sheÌ€€€€€personally€made€visits€to€the€Middle€Soup€Creek€Project€area€on€November€28€and€DecemberÏ18,€1998,€and€on€bothÌ€€€€€occasions€it€was€raining€and€muddy,€there€was€no€measurable€snow€accumulation€on€theÏground,€nor€was€the€groundÌ€€€€€frozen.€Ì€€14.ððOn€December€23,€1998,€the€District€Court€issued€its€findings€of€fact,€conclusions€of€law,Ïand€order€in€which€theÌ€€€€€District€Court€held€that€the€DNRC€was€required€to€include€a€cumulative€impacts€analysis€inÏthe€EIS€and€aÌ€€€€€supplemental€EIS€as€a€result€of€the€change€in€economic€circumstances.€The€order€enjoined€theÏDNRC€fromÌ€€€€€proceeding€with€further€activities€relating€to€the€Middle€Soup€Creek€Project€until€theÏsupplemental€EIS€and€theÌ€€€€€cumulative€impacts€analysis€have€been€prepared.€Ì€€15.ððOn€December€29,€1998,€the€DNRC€filed€a€motion€and€brief€requesting€the€District€Court€toÏmodify€the€injunctionÌ€€€€€issued€in€its€December€23,€1998€order.€In€its€motion,€the€DNRC€admitted€that€it€had€allowedÏPlum€Creek€toÌ€€€€€commence€harvesting€timber€on€the€Middle€Soup€Creek€Project€on€December€15,€1998,€andÏthen€ordered€PlumÌ€€€€€Creek€to€cease€activities€upon€receipt€of€the€District€Court's€order€on€December€23,€1998.€AsÏa€result,€the€DNRCÌ€€€€€requested€the€District€Court€to€modify€its€injunction€to€allow€the€DNRC€and€Plum€Creek€toÏremove€any€timber€thatÌ€€€€€was€felled€prior€to€December€23,€1998.€Additionally,€the€DNRC€requested€that€the€DistrictÏCourt€require€Friends€ofÌ€€€€€the€Wild€Swan€to€post€an€injunction€bond€pursuant€to€ðð€77-1-110,€MCA,€to€compensate€theÏschool€trust€beneficiariesÌ€€€€€should€the€injunction€be€wrongful.€Ì€€16.ððOn€January€11,€1999,€the€DNRC€sent€a€letter€to€Arlene€Montgomery,€Director€of€Friends€ofÏthe€Wild€Swan,€whichÌ€€€€€detailed€the€timber€harvesting€that€occurred€prior€to€December€23,€1998€on€the€Middle€SoupÐ @-(, ÐCreek€Project.€TheÌ€€€€€DNRC€explained€that€90,000€board€feet€of€timber€was€cut€by€Plum€Creek€during€that€time€andÏthat€the€harvestingÌ€€€€€was€done€pursuant€to€a€timber€sale€inspection€report€in€which€the€DNRC€"gave€approval€forÏthe€felling€of€timber€inÌ€€€€€Unit€#1€to€proceed,€but€due€to€unfrozen€wet€soils€.€.€.€did€not€allow€skidding€activities€toÏproceed."€Ì€€17.ððOn€January€21,€1999,€Friends€of€the€Wild€Swan€sought€Rule€11,€M.R.Civ.P.€sanctionsÏagainst€the€DNRC€for€itsÌ€€€€€motion€to€modify€the€injunction€and€request€for€Friends€of€the€Wild€Swan€to€post€anÏinjunction€bond.€Ì€€18.ððOn€February€26,€1999,€the€District€Court€issued€its€memorandum€and€order€denying€theÏDNRC's€motion€forÌ€€€€€modification€of€the€injunction€and€request€for€an€injunction€bond€and€denying€Friends€of€theÏWild€Swan's€motion€forÌ€€€€€Rule€11€sanctions.€Ì€€19.ððThe€DNRC€filed€its€notice€of€appeal€on€March€2,€1999,€and€Friends€of€the€Wild€Swan€filedÏits€notice€of€cross-appealÌ€€€€€on€March€16,€1999.€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€STANDARD€OF€REVIEWÌÌ€€€1.ððThe€proper€standard€of€review€of€an€administrative€decision€pursuant€to€the€MontanaÏEnvironmental€Policy€ActÌ€€€€€(MEPA),€is€whether€the€record€establishes€that€the€agency€acted€arbitrarily,€capriciously€orÏunlawfully.€North€ForkÌ€€€€€Preservation€Ass'n€v.€Department€of€State€Lands€(1989),€238€Mont.€451,€465,€778€P.2d€862,Ï871.€In€North€ForkÌ€€€€€Preservation€Ass'n,€we€stated€that:€ÌÌ[I]n€making€the€factual€inquiry€concerning€whether€an€agency€decision€was€"arbitrary€orÏcapricious,"€the€reviewing€courtÌ"must€consider€whether€the€decision€was€based€on€a€consideration€of€the€relevant€factors€andÏwhether€there€has€been€aÌclear€error€of€judgment."€This€inquiry€must€"be€searching€and€careful,"€but€"the€ultimate€standardÏof€review€is€a€narrowÌone."ÌÌÌÌNorth€Fork€Preservation€Ass'n,€238€Mont.€at€465,€778€P.2d€at€871€(quoting€Marsh€v.€OregonÏNatural€Resources€Council€(1989),€490ÌU.S.€360,€378).ÌÌ€€€1.ððIn€Marsh,€the€U.S.€Supreme€Court€stated:€Ð @-(, Ї[I]n€the€context€of€reviewing€a€decision€not€to€supplement€an€EIS,€courts€should€notÏautomatically€defer€to€the€agency'sÌexpress€reliance€on€an€interest€in€finality€without€carefully€reviewing€the€record€and€satisfyingÏthemselves€that€the€agencyÌhas€made€a€reasoned€decision€based€on€its€evaluation€of€the€significance-or€lack€ofÏsignificance-of€the€new€information.€AÌcontrary€approach€would€not€simply€render€judicial€review€generally€meaningless,€but€would€beÏcontrary€to€the€demand€thatÌcourts€ensure€that€agency€decisions€are€founded€on€a€reasoned€evaluation€"of€the€relevantÏfactors."ÌÌÌÌMarsh,€490€U.S.€at€378.ÌÌ€€€1.ððIn€North€Fork€Preservation€Ass'n,€238€Mont.€at€460,€778€P.2d€at€868,€we€stated€that€theÏomission€of€the€cumulativeÌ€€€€€impacts€analysis€was€directly€relevant€to€the€"unlawful"€portion€of€our€standard€of€review.€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€DISCUSSIONÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ISSUE€1ÌÌ€€€1.ððDid€the€District€Court€err€when€it€held€that€the€DNRC€violated€the€MEPA€as€a€result€of€itsÏfailure€to€include€anÌ€€€€€adequate€cumulative€impacts€analysis€in€its€EIS?€Ì€€€2.ððThe€DNRC€asserts€that€the€District€Court€erred€when€it€found€that€the€EIS€prepared€by€theÏDNRC€for€the€MiddleÌ€€€€€Soup€Creek€Project€was€insufficient€because€it€did€not€adequately€analyze€and€discuss€theÏcumulative€impacts€of€theÌ€€€€€project.€The€DNRC€contends€that€the€District€Court€failed€to€comprehend€that€the€new€"coarseÏfilter"€ecologicalÌ€€€€€analysis€takes€into€account€all€of€the€prevailing€conditions€of€the€affected€lands€and€thereforeÏincorporates€aÌ€€€€€cumulative€effects€analysis.€The€DNRC€argues€that€the€District€Court's€primary€error€was€itsÏ"disregard€for€theÌ€€€€€evidence€presented€that€each€of€the€court's€concerns€had€in€fact€been€considered€in€theÏpreparation€of€the€final€EIS,Ì€€€€€and€that€the€cumulative€impacts€of€all€the€past€and€present€actions€were€carefully€considered."€Ì€€€3.ððIn€response,€Friends€of€the€Wild€Swan€contends€that€even€if€the€DRNC's€new€"coarse€filter"Ïapproach€is€recognizedÌ€€€€€as€valid€and€includes€cumulative€impacts€analysis€as€part€of€its€methodology,€the€MEPA€stillÏrequires€a€cumulativeÌ€€€€€impacts€analysis€in€every€EIS€and€therefore€the€DNRC€is€required€to€include€the€requisiteÏdiscussion€in€its€EIS.€Ð @-(, Ѐ€€4.ððThe€Administrative€Rules€of€Montana€provide€in€relevant€part€as€follows:€ÌÌ36.2.529€Preparation€and€Contents€of€Draft€Environmental€Impact€StatementsÌÌIf€required€by€these€rules,€the€agency€shall€prepare€a€draft€environmental€impact€statement€usingÏan€interdisciplinary€approach€andÌcontaining€the€following:ÌÌÌÌ.€.€.€.ÌÌÌÌ(4)€a€description€of€the€impacts€on€the€quality€of€the€human€environment€of€the€proposed€actionÏincluding:ÌÌÌÌ.€.€.€.ÌÌÌÌ(b)€primary,€secondary,€and€cumulative€impacts;ÌÌÌÌÌÌ36.2.522€DefinitionsÌÌÌÌ.€.€.€.ÌÌÌÌ(7)€"Cumulative€impact"€means€the€collective€impacts€on€the€human€environment€of€theÏproposed€action€when€considered€inÌconjunction€with€other€past€and€present€actions€related€to€the€proposed€action€by€location€orÏgeneric€type.€Related€future€actions€mustÌalso€be€considered€when€these€actions€are€under€concurrent€consideration€by€any€state€agencyÏthrough€pre-impact€statement€studies,Ìseparate€impact€statement€evaluation,€or€permit€processing€procedures.ÌÐ @-(, ЇÌ.€.€.€.ÌÌÌÌ(12)€"Human€environment"€includes,€but€is€not€limited€to€biological,€physical,€social,€economic,Ïcultural,€and€aestheticÌfactors€that€interrelate€to€form€the€environment.€As€the€term€applies€to€the€agency's€determinationÏof€whether€an€EIS€isÌnecessary,€economic€and€social€impacts€do€not€by€themselves€require€an€EIS.€However,Ïwhenever€an€EIS€is€prepared,Ìeconomic€and€social€impacts€and€their€relationship€to€biological,€physical,€cultural€and€aestheticÏimpacts€must€be€discussed.ÌÌÌÌ€€€1.ððThe€District€Court€found€that:€ÌÌThe€purpose€of€allowing€public€involvement€in€environmental€decision-making€is€frustrated€if€anÏEIS€does€not€accuratelyÌdescribe€the€impact€of€proposed€action€in€the€context€of€past,€present€and€future€proposed€action.ÏThe€average€member€ofÌthe€public€must€rely€on€DNRC's€expertise,€and€therefore,€DNRC€must€give€sufficient€informationÏso€that€the€public€canÌmake€a€meaningful€evaluation€of€the€proposed€action.€To€do€so,€a€thorough€analysis€andÏdiscussion€of€cumulative€impactsÌis€necessary.€The€legislature€recognized€as€much,€making€a€cumulative€impacts€analysisÏmandatory.€A€thorough€analysis€ofÌcumulative€impacts€is€lacking€here.ÌÌÌÌ€€€1.ððThe€DNRC€argues€that€the€District€Court's€findings€were€erroneous€because,€although€RuleÏ36.2.529,€ARM,€requiresÌ€€€€€a€cumulative€effects€analysis,€the€Administrative€Rules€do€not€dictate€any€particularÏmethodology.€However,€weÌ€€€€€conclude€that€Rule€36.2.529(4)(b),€ARM,€clearly€states€that€the€EIS€shall€contain€a€descriptionÏof€the€cumulativeÌ€€€€€effects€and€does€not€allow,€as€the€DRNC€suggests,€mere€analysis€implicit€within€the€EIS.€TheÏpublic€is€not€benefitedÌ€€€€€by€reviewing€an€EIS€which€does€not€explicitly€set€forth€the€actual€cumulative€impacts€analysisÏand€the€facts€whichÌ€€€€€form€the€basis€for€the€analysis.€Ì€€€2.ððThe€DNRC€additionally€argues€that€the€District€Court€erred€when€it€relied€on€RuleÏ36.2.524(1)(g),€ARM,€to€concludeÐ @-(, Ѐ€€€€that€the€DNRC's€cumulative€impacts€analysis€was€also€inadequate€for€its€failure€to€reconcileÏthe€proposed€action€withÌ€€€€€the€State€Forest€Land€Management€Plan€(SFLMP).€The€DNRC€states€that€Rule€36.2.524,ÏARM,€"applies€only€to€theÌ€€€€€analysis€performed€in€attempting€to€ascertain€whether€an€EIS€should€be€prepared.€.€.€.€ThisÏsection€is€not€a€substantiveÌ€€€€€element€to€be€contained€within€an€EIS."€Ì€€€3.ððRule€36.2.524,€ARM,€states,€in€relevant€part:€ÌÌ(1)€In€order€to€implement€75-1-201,€MCA,€the€agency€shall€determine€the€significance€of€impactsÏassociated€with€aÌproposed€action.€This€determination€is€the€basis€of€the€agency's€decision€concerning€the€need€toÏprepare€an€EIS€and€alsoÌrefers€to€the€agency's€evaluation€of€individual€and€cumulative€impacts€in€either€EAs€or€EISs.€TheÏagency€shall€considerÌthe€following€criteria€in€determining€the€significance€of€each€impact€on€the€quality€of€the€humanÏenvironment:ÌÌÌÌ.€.€.€.ÌÌÌÌ(g)€potential€conflict€with€local,€state,€or€federal€laws,€requirements,€or€formal€plans;ÌÌÌÌ(Emphasis€added.)€Clearly,€Rule€36.2.524,€ARM,€pertains€to€the€contents€of€an€EIS,€in€additionÏto€the€decision€of€whetherÌor€not€to€prepare€an€EIS.ÌÌ€€€1.ððThe€DNRC€further€contends€that€the€EIS€did€discuss€the€SFLMP.€We€note€that€the€DistrictÏCourt€did€recognizeÌ€€€€€discussion€of€the€SFLMP,€stating€that:€"Although€the€Middle€Soup€Creek€final€EIS€doesÏdiscuss€old€growth€andÌ€€€€€fragmentation,€listing€them€as€'concerns,'€it€does€not€discuss€the€SFLMP's€objective€toÏpreserve€old€growth,€reduceÌ€€€€€fragmentation,€and€protect€unique€habitat."€The€District€Court€was€correct.€Ì€€€2.ððAccordingly,€we€conclude€that€the€EIS€prepared€by€the€DNRC€fails€to€comport€with€theÏprovision€in€RuleÌ€€€€€36.2.529(4)(b),€ARM,€which€requires€an€explicit€discussion€of€the€cumulative€impactsÏanalysis,€in€accordance€with€theÌ€€€€€definitions€of€"cumulative€impact"€and€"human€environment"€set€forth€at€Rule€36.2.522,ÏARM,€or€with€the€provisionÐ @-(, Ѐ€€€€provided€by€Rule€36.2.524(1)(g),€ARM.€As€a€result,€we€conclude€that€the€DNRC€actedÏunlawfully,€in€violation€of€theÌ€€€€€MEPA,€in€its€preparation€of€the€EIS€for€the€Middle€Soup€Creek€Project.€Therefore,€we€furtherÏconclude€that€theÌ€€€€€District€Court€did€not€err€when€it€held€that€the€DNRC€violated€the€MEPA€as€a€result€of€itsÏfailure€to€include€anÌ€€€€€adequate€cumulative€impacts€analysis€in€its€EIS.€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ISSUE€2ÌÌ€€€1.ððDid€the€District€Court€err€when€it€held€that€the€DNRC€was€required€to€prepare€aÏsupplemental€EIS?€Ì€€€2.ððThe€DNRC€contends€that€the€District€Court€erred€by€concluding€that€a€supplemental€EIS€isÏrequired,€because€thereÌ€€€€€was€no€proof€offered€by€Friends€of€the€Wild€Swan€that€a€reduction€in€the€total€timber€saleÏrevenue€would€result€in€anyÌ€€€€€physical€impact€to€the€human€environment.€The€DNRC€argues€based€on€Rule€36.2.522(12),ÏARM,€that€a€change€inÌ€€€€€economic€impacts€alone€does€not€compel€the€preparation€of€a€supplemental€EIS.€The€DNRCÏfurther€asserts€that€itÌ€€€€€acted€reasonably€in€preparing€its€economic€estimate€and€did€not€portray€the€economic€returnsÏin€the€EIS€as€reliableÌ€€€€€estimates€of€absolute,€guaranteed€revenues.€Ì€€€3.ððIn€response,€Friends€of€the€Wild€Swan€asserts€that€the€DNRC's€failure€to€supplement€the€EISÏwas€arbitrary€andÌ€€€€€capricious€in€light€of€the€substantial€changes€in€the€proposed€action.€Friends€of€the€Wild€SwanÏpoints€out€that€the€finalÌ€€€€€EIS€described€a€sale€of€nearly€6€million€board€feet€of€timber,€estimated€to€net€over€a€millionÏdollars€in€revenue€for€theÌ€€€€€school€trust.€Whereas,€the€sale€as€now€proposed€describes€a€sale€of€1.99€million€board€feet€ofÏtimber,€which€isÌ€€€€€estimated€to€result€in€a€loss€to€the€State.€Ì€€€4.ððThe€final€EIS€identifies€Alternative€"B"€as€the€preferred€alternative€and€sets€forth€anÏestimated€sale€of€5.2€millionÌ€€€€€board€feet€of€timber.€The€final€EIS€further€states€that€Alternative€"B"€is€projected€to€generateÏapproximatelyÌ€€€€€$1,045,572€of€net€revenue€in€the€short-term.€The€final€EIS€states€that:€ÌÌThe€objective€of€the€Middle€Soup€Creek€Project€is€to€generate€the€largest,€reasonable€monetaryÏreturn€to€the€school€trust€inÌboth€the€short€term€and€long€term€by€either€selling€approximately€six€million€board€feet€of€timberÏor€selling€a€twenty-yearÌconservation€lease.€Alternatives€A€and€C€are€each€projected€to€generate€negative€net€revenue€ifÏharvested€this€year€or€ifÌharvesting€is€deferred€for€twenty€years.€These€alternatives€do€not€meet€the€project€objective€andÐ @-(, Ðtherefore€are€notÌconsidered€further.ÌÌÌÌ€€€1.ððIt€appears€that€by€the€time€of€the€meeting€of€the€Board€of€Land€Commissioners€on€July€21,Ï1997,€the€DNRC€hadÌ€€€€€re-estimated€the€Middle€Soup€Creek€Timber€Sale€to€include€the€sale€of€3.8€million€board€feetÏof€timber€and€$812,605Ì€€€€€in€revenue.€In€April€1998,€following€the€discovery€of€the€mismarked€trees€in€the€Middle€SoupÏCreek€Project,€theÌ€€€€€DNRC€notified€Friends€of€the€Wild€Swan€that€the€project€would€be€further€reduced€to€1.99Ïmillion€board€feet€ofÌ€€€€€timber€and€$350,000€in€revenue.€However,€the€costs€to€the€State€of€the€Middle€Soup€CreekÏProject,€including€theÌ€€€€€MEPA€costs,€sale€preparation€costs,€administrative€costs€and€treatment€costs€has€reachedÏapproximately€$500,000.Ì€€€€€Accordingly,€the€DNRC's€proposed€sale€of€1.99€million€board€feet€results€in€a€loss€ofÏapproximately€$150,000€to€theÌ€€€€€State.€Ì€€€2.ððRule€36.2.533,€ARM,€provides€in€relevant€part€as€follows:€ÌÌ(1)€The€agency€shall€prepare€supplements€to€either€draft€or€final€environmental€impact€statementsÏwhenever:ÌÌÌÌ(a)€the€agency€or€the€applicant€makes€a€substantial€change€in€a€proposed€action;ÌÌÌÌ.€.€.€.ÌÌ(2)€A€supplement€must€include,€but€is€not€limited€to,€a€description€of€the€following:ÌÌÌÌ.€.€.€.ÌÌÌÌ(c)€any€impacts,€alternatives€or€other€items€required€by€ARM€36.2.529€for€a€draft€EIS€or€ARMÏ36.2.531€for€a€final€EISÌthat€were€either€not€covered€in€the€original€statement€or€that€must€be€revised€based€on€newÏinformation€or€circumstancesÐ @-(, Ðconcerning€the€proposed€action.ÌÌÌÌ€€€1.ððWe€conclude€that,€contrary€to€the€DNRC's€assertions,€there€is€no€requirement€in€RuleÏ36.2.533,€ARM,€that€aÌ€€€€€substantial€change€must€result€in€an€additional€impact€to€the€environment€before€aÏsupplemental€EIS€is€required.€ThereÌ€€€€€is€no€limitation€on€what€may€be€considered€a€"substantial€change".€Accordingly,€we€furtherÏconclude€that€a€substantialÌ€€€€€economic€change€in€a€project€can€serve€as€the€basis€for€the€supplemental€EIS€required€by€RuleÏ36.2.533,€ARM.€Ì€€€2.ððIn€this€case,€the€District€Court€found€that:€ÌÌThe€substantial€change€in€the€harvest€quantity€and€in€the€net€revenue€resulting€from€the€harvestÏcertainly€are€"substantialÌchanges"€to€the€proposed€action.€Indeed,€the€motivation€for€the€sale,€producing€net€revenue€forÏthe€trust,€has€beenÌcompletely€removed.€The€sale€now€will€cost€the€State€money.€The€public€and€the€Board€of€LandÏCommissioners€may€haveÌbeen€willing€to€lose€valuable€old€growth€timber€for€the€benefit€of€substantial€revenue€to€the€trust,Ïbut€the€cost€benefit€hadÌnow€been€substantially€changed.€The€public€may€not€be€willing,€and€the€Board€of€LandÏCommissioners€may€not€wish€toÌrequire€the€public€to€pay€to€lose€its€old€growth€timber.€ÌÌÌÌ€€€1.ððWe€conclude€that€the€change€in€economic€circumstances€in€the€Middle€Soup€Creek€ProjectÏwas€a€"substantialÌ€€€€€change"€pursuant€to€Rule€36.2.533,€ARM,€which€required€the€preparation€of€a€supplementalÏEIS.€Accordingly,€weÌ€€€€€conclude€that€the€DNRC's€decision€not€to€supplement€the€EIS€was€a€clear€error€of€judgment.ÏTherefore,€we€furtherÌ€€€€€conclude€that€the€District€Court€did€not€err€when€it€held€that€the€DNRC€was€required€toÏprepare€a€supplemental€EIS.€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ISSUE€3ÌÌ€€€1.ððDid€the€District€Court€err€when€it€held€that€Friends€of€the€Wild€Swan€was€not€required€toÏpost€a€postappealÌ€€€€€injunction€bond€pursuant€to€ðð€77-1-110,€MCA?€Ì€€€2.ððThe€DNRC€contends€that€ðð€77-1-110,€MCA,€required€the€District€Court€to€order€Friends€ofÏthe€Wild€Swan€to€postÌ€€€€€an€injunction€bond€during€the€pendency€of€this€appeal.€Ð @-(, Ѐ€€3.ððSection€77-1-110,€MCA,€provides:€ÌÌIn€any€civil€action€seeking€an€injunction€or€restraining€order€concerning€a€decision€of€the€boardÏapproving€a€use€orÌdisposition€of€state€lands€that€would€produce€revenue€for€any€state€lands€trust€beneficiary,€theÏcourt€shall€require€a€writtenÌundertaking€for€the€payment€of€damages€that€may€be€incurred€by€the€trust€beneficiary€if€the€boardÏis€wrongfully€enjoined€orÌrestrained.ÌÌÌÌ€€€1.ððThe€District€Court€concluded€that€because€the€Middle€Soup€sale€was€expected€to€loseÏmoney,€it€would€be€difficult€toÌ€€€€€comprehend€how€damages€might€be€incurred€as€a€result€of€enjoining€the€project€and,Ïtherefore,€concluded€thatÌ€€€€€Friends€of€the€Wild€Swan€was€not€required€to€post€a€bond.€Ì€€€2.ððOn€appeal,€Friends€of€the€Wild€Swan€contends€that€the€DNRC€has€no€standing€to€invoke€ððÏ77-1-110,€MCA,€becauseÌ€€€€€that€statute€only€pertains€to€actions€enjoining€a€decision€of€the€State€Land€Board.€Friends€ofÏthe€Wild€Swan€arguesÌ€€€€€that,€here,€no€injunction€has€been€issued€against€the€Land€Board,€nor€is€the€Land€Board€even€aÏparty€to€this€action.€Ì€€€3.ððSection€77-1-110,€MCA,€provides€for€a€bond€in€a€civil€action€"seeking€an€injunction€orÏrestraining€order€concerningÌ€€€€€a€decision€of€the€board"€for€damages€"that€may€be€incurred€by€the€trust€beneficiary€if€the€boardÏis€wrongfullyÌ€€€€€enjoined€or€restrained."€(Emphasis€added.)€This€statute€does€not€apply€to€this€case€which€dealsÏwith€an€injunctionÌ€€€€€against€the€DRNC€based€on€the€inadequacy€of€its€EIS€and€has€no€effect€on€the€Land€Board'sÏdecision.€Ì€€€4.ððTherefore,€we€conclude€that€the€District€Court€came€to€the€right€conclusion,€whether€or€notÏit€was€for€the€rightÌ€€€€€reason€and€that€Friends€of€the€Wild€Swan€was€not€required€to€post€an€injunction€bondÏpursuant€to€ðð€77-1-110,€MCA.€ÌÌ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ISSUE€4ÌÌ€€€1.ððThe€following€issue€is€presented€on€cross-appeal€by€Friends€of€the€Wild€Swan:€Ì€€€2.ððDid€the€District€Court€err€when€it€denied€Friends€of€the€Wild€Swan's€motion€for€impositionÏof€Rule€11,€M.R.Civ.P.,Ì€€€€€sanctions€against€the€DNRC?€Ì€€€3.ððThis€Court€gives€a€district€court€broad€discretion€to€determine€whether€the€factualÏcircumstances€of€a€particular€caseÌ€€€€€amount€to€frivolous€or€abusive€litigation€tactics.€Accordingly,€we€apply€the€following€standardÐ @-(, Ðof€review:€ÌÌA€district€court's€findings€of€fact€will€be€overturned€if€clearly€erroneous.€The€court's€legalÏconclusion€that€the€factsÌconstitute€a€violation€of€Rule€11€will€be€reversed€if€the€determination€constitutes€an€abuse€ofÏdiscretion.€We€will€review€theÌcase€de€novo€only€if€the€violation€is€based€on€the€legal€sufficiency€of€a€plea€or€motion.€ÌÌÌÌD'Agostino€v.€Swanson€(1990),€240€Mont.€435,€446,€784€P.2d€919,€926.ÌÌÌÌ€€€1.ððFriends€of€the€Wild€Swan€contends€that€Rule€11,€M.R.Civ.P.€clearly€applies€to€theÏcircumstances€underlying€theÌ€€€€€DNRC's€request€for€an€injunction€bond€pursuant€to€ðð€77-1-110,€MCA,€and€request€forÏmodification€of€the€DistrictÌ€€€€€Court's€injunction.€Friends€of€the€Wild€Swan€asserts€that€the€DNRC's€request€of€the€DistrictÏCourt€to€allow€it€to€sellÌ€€€€€the€"illegally€harvested€timber"€and€to€require€an€injunction€bond,€was€made€solely€to€harassÏand€cause€needlessÌ€€€€€increase€in€the€costs€of€this€litigation.€Ì€€€2.ððRule€11,€M.R.Civ.P.,€provides:€ÌÌThe€signature€of€an€attorney€or€party€constitutes€a€certificate€by€the€signer€that€the€signer€had€readÏthe€pleading,€motion,€orÌother€paper;€that€to€the€best€of€the€signer's€knowledge,€information,€and€belief€formed€afterÏreasonable€inquiry€it€is€wellÌgrounded€in€fact€and€is€warranted€by€existing€law€or€a€good€faith€argument€for€the€extension,Ïmodification,€or€reversal€ofÌexisting€law,€and€that€it€is€not€interposed€for€any€improper€purpose,€such€as€to€harass€or€to€causeÏunnecessary€delay€orÌincrease€in€the€cost€of€litigation€.€.€.€.€If€a€pleading,€motion,€or€other€paper€is€signed€in€violation€ofÏthis€rule,€the€court,€uponÌmotion€or€upon€its€own€initiative,€shall€impose€upon€the€person€who€signed€it,€a€representedÏparty,€or€both,€an€appropriateÌsanction€.€.€.€.ÌÌÌÌ€€€1.ððThe€District€Court€found€the€following:€ÌÌThe€fact€that€DNRC€may€have€violated€the€mitigation€controls€prescribed€in€the€EIS€does€notÏimplicate€Rule€11.€If€Ô_ÔÔ_ÔDNRCÔ_ÔÐ @-(, Ðacted€in€bad€faith€or€violated€the€Ô_ÔEISÔ_Ô,€there€are€specific€statutory€remedies,€but€Rule€11€sanctionsÏis€not€one€of€thoseÌremedies.€Nor€does€Rule€11€constitute€grounds€to€impose€sanctions€merely€because€Ô_ÔDNRCÔ_ÔÏsought€to€have€a€bond€posted.ÌSection€77-1-110,€MCA,€is€a€fairly€new€provision,€having€been€enacted€in€1995.€The€CourtÏcannot€say€Ô_ÔDNRCÔ_Ô€acted€in€badÌfaith€by€seeking€to€have€a€bond€posted.€Therefore,€the€Court€declines€to€impose€Rule€11Ïsanctions€against€Ô_ÔDNRCÔ_Ô.ÌÌÌÌ€€€1.ððWe€conclude€that€the€District€Court's€findings€that€the€Ô_ÔDNRCÔ_Ô€did€not€act€in€bad€faith€are€notÏclearly€erroneous,€andÌ€€€€€that€the€District€Court€did€not€abuse€its€discretion.€Therefore,€we€affirm€the€District€Court'sÏdenial€of€Rule€11,Ì€€€€€Ô_ÔM.R.Civ.P.Ô_Ô€sanctions€against€the€Ô_ÔDNRCÔ_Ô.€Ì€€€2.ððThe€judgment€of€the€District€Court€is€affirmed.€ÌÌÌÌ/S/€TERRY€N.€Ô_ÔTRIEWEILERÔ_Ô€ÌÌÌÌÌÌÌÌÌÌWe€Concur:ÌÌÌÌ/S/€Ô_ÔKARLAÔ_Ô€M.€GRAYÌÌ/S/€JIM€Ô_ÔREGNIERÔ_Ô€ÌÌ/S/€JAMES€C.€NELSONÌÌ/S/€W.€WILLIAM€Ô_ÔLEAPHARTÔ_ÔÌÌÌÌññññññNo.€99-158ÌÌÌÌIN€THE€SUPREME€COURT€OF€THE€STATE€OF€MONTANAÌÌ2000€MT€209ÌÌÌÌÌÌFRIENDS€OF€THE€WILD€SWAN,€a€ÌÌnonprofit€corporation,ÌÌÌÌPlaintiff,€Respondent,€andÌÌCross-Appellant,ÌÌÌÌv.ÌÌÌÌDEPARTMENT€OF€NATURAL€RESOURCES€ÌÌAND€CONSERVATION,€ÌÌÌÌDefendant,€Appellant,€andÌÌCross-Respondent.ÌÌÌÌÌÌÌÌAPPEAL€FROM:€District€Court€of€the€First€Judicial€District,€Ô_ÔÐ @-(, ЇIn€and€for€the€County€of€Lewis€and€Clark,ÌÌThe€Honorable€Thomas€C.€Ô_ÔHonzelÔ_Ô,€Judge€presiding.ÌÌÌÌCOUNSEL€OF€RECORD:ÌÌÌÌFor€Appellant:ÌÌÌÌTom€Butler€and€Michael€J.€Mortimer,€Montana€Department€ofÌÌNatural€Resources€&€Conservation,€Helena,€MontanaÌÌÌÌFor€Respondent:ÌÌÌÌStephen€C.€Pohl,€Attorney€at€Law,€Ô_ÔBozemanÔ_Ô,€MontanaÌÌÌÌFor€Amicus:ÌÌÌÌRebecca€W.€Watson,€Ô_ÔGoughÔ_Ô,€Ô_ÔShanahanÔ_Ô,€Johnson€&€Waterman,€ÌÌHelena,€Montana€ÌÌÌÌÌÌSubmitted€on€Briefs:€November€4,€1999€ÌÌDecided:€August€8,€2000ÌÌFiled:Ð @-(, ЇÌÌÌÌ__________________________________________ÌÌClerkÌÌJustice€Terry€N.€Ô_ÔTrieweilerÔ_Ô€delivered€the€opinion€of€the€Court.ÌÌ1.ððThe€Plaintiff,€Friends€of€the€Wild€Swan,€brought€this€action€in€the€District€Court€for€the€FirstÏJudicial€District€in€Lewis€and€Clark€County€to€challenge€the€sufficiency€of€the€EnvironmentalÏImpact€Statement€(Ô_ÔEISÔ_Ô)€prepared€by€the€Defendant,€Montana€Department€of€Natural€ResourcesÏand€Conservation€(Ô_ÔDNRCÔ_Ô),€for€the€Middle€Soup€Creek€Project€pursuant€to€the€MontanaÏEnvironmental€Policy€Act€(Ô_ÔMEPAÔ_Ô)€ðððð€75-1-201,€et€seq.,€MCA.€The€District€Court€held€that€theÏÔ_ÔEISÔ_Ô€prepared€by€the€Ô_ÔDNRCÔ_Ô€inadequately€addressed€the€cumulative€impacts€of€the€project€andÏalso€held€that€the€Ô_ÔDNRCÔ_Ô€should€have€prepared€a€supplemental€Ô_ÔEISÔ_Ô€due€to€changed€economicÏcircumstances€of€the€project.€The€District€Court€enjoined€any€harvest€of€timber€on€the€MiddleÏSoup€Creek€Project€until€the€Ô_ÔDNRCÔ_Ô€prepares€the€supplemental€Ô_ÔEISÔ_Ô.€Ô_ÔDNRCÔ_Ô€appeals€from€thatÏjudgment.€Friends€of€the€Wild€Swan€cross-appeals€from€the€District€Court's€denial€of€Rule€11Ïsanctions€against€the€Ô_ÔDNRCÔ_Ô.€We€affirm€the€judgment€of€the€District€Court.€Ì2.ððThe€following€issues€are€presented€on€appeal€by€the€Ô_ÔDNRCÔ_Ô:€Ì3.ðð1.€Did€the€District€Court€err€when€it€held€that€the€Ô_ÔDNRCÔ_Ô€violated€the€Ô_ÔMEPAÔ_Ô€by€its€failure€toÏinclude€an€adequate€cumulative€impacts€analysis€in€its€Ô_ÔEISÔ_Ô?€Ì4.ðð2.€Did€the€District€Court€err€when€it€held€that€the€Ô_ÔDNRCÔ_Ô€was€required€to€prepare€aÏsupplemental€Ô_ÔEISÔ_Ô?€Ì5.ðð3.€Did€the€District€Court€err€when€it€held€that€Friends€of€the€Wild€Swan€was€not€required€toÏprovide€a€Ô_ÔpostappealÔ_Ô€injunction€bond€pursuant€to€ðð€77-1-110,€MCA?€Ì6.ððThe€following€issue€is€presented€on€cross-appeal€by€Friends€of€the€Wild€Swan:€Ì7.ðð4.€Did€the€District€Court€err€when€it€denied€Friends€of€the€Wild€Swan's€motion€for€impositionÏof€Rule€11,€Ô_ÔM.R.Civ.P.Ô_Ô,€sanctions€against€the€Ô_ÔDNRCÔ_Ô?€ÌÌFACTUAL€BACKGROUNDÌÌ1.ððThis€dispute€relates€to€the€Ô_ÔDNRCÔ_Ô's€proposed€timber€sale,€known€as€the€Middle€Soup€CreekÏProject,€on€land€near€Swan€Lake,€Montana.€The€land€is€owned€by€the€State€of€Montana€and€heldÏin€trust€by€the€Ô_ÔDNRCÔ_Ô€for€the€support€of€the€public€schools€pursuant€to€Article€X€of€the€MontanaÏConstitution.€The€purpose€of€the€project€is€to€generate€both€short-and€long-term€revenue€for€theÏMontana€School€Trust.€The€project,€as€originally€proposed,€involved€the€harvest€ofÏapproximately€6€million€board€feet€of€timber€on€2591€acres€of€Swan€Valley€forest.ÏApproximately€50€percent€of€the€Swan€Valley€forest€consists€of€old€growth,€including€one€of€theÏlast€large€stands€of€old€growth€remaining€in€Montana.€Ì2.ððIn€September€1996,€the€Ô_ÔDNRCÔ_Ô€issued€a€draft€Ô_ÔEISÔ_Ô€which€discussed€the€impacts€of€fourÏalternative€management€plans€for€the€Middle€Soup€Creek€Project.€Alternative€"A"€required€noÏaction€and€would€have€left€the€Middle€Soup€Creek€area€Ô_ÔunmanagedÔ_Ô€and€permitted€the€Ô_ÔDNRCÔ_Ô€toÐ @-(, Ðenter€into€a€20-year€conservation€lease.€Alternative€"B"€required€intensive€management€and€wasÏdesigned€to€promote€Ô_ÔsustainabilityÔ_Ô€of€the€ecosystem€by€harvesting€approximately€5.2€millionÏboard€feet€of€timber.€Alternative€"C"€required€preservation€of€old€growth€timber,€whileÏpermitting€the€harvest€of€approximately€150,000€board€feet€of€saw-timber€stand.€Alternative€"D"Ïmaximized€timber€productivity€by€harvesting€approximately€5.6€million€board€feet€of€old€growth,Ïsaw-timber,€and€multistoried€stands.€Ì3.ððFollowing€public€hearings€and€comments,€the€Ô_ÔDNRCÔ_Ô€issued€the€final€Middle€Soup€CreekÏProject€Ô_ÔEISÔ_Ô€in€FebruaryÌ1997.€Alternative€"B"€was€identified€as€the€preferred€alternative€because€of€its€economic€viabilityÏand€its€positive€short-€and€long-term€benefits€in€accordance€with€the€State€Forest€LandÏManagement€Plan€philosophy€and€its€Resource€Management€Standards.€Alternative€"B"€wasÏprojected€to€generate€approximately€$1,045,572€in€net€revenue€in€the€short-term,€and€was€to€beÏaccomplished€by€using€a€harvesting€process€known€as€"structural€enhancement,"€in€whichÏselected€trees€would€be€cut€in€order€to€mimic€historical€forest€conditions.€Ì4.ððIn€July€1997,€the€Board€of€Land€Commissioners€approved€the€Middle€Soup€Creek€timber€sale.ÏThe€minutes€of€the€board's€meeting€reflect€their€approval€of€a€harvest€of€approximately€3.8Ïmillion€board€feet€from€970€acres€of€the€Swan€Valley€forest.€There€was€no€explanation€forÏreduction€of€the€sale€from€5.2€million€board€feet€as€proposed€in€the€final€Ô_ÔEISÔ_Ô€to€3.8€million€boardÏfeet€as€approved€by€the€board.€Ì5.ððOn€September€4,€1997,€Friends€of€the€Wild€Swan,€a€Montana€nonprofit€corporation€dedicatedÏto€preserving€the€natural€environment€of€the€Swan€Valley,€filed€a€complaint€alleging€variousÏviolations€of€the€Ô_ÔMEPAÔ_Ô€by€the€Ô_ÔDNRCÔ_Ô€in€its€final€Ô_ÔEISÔ_Ô,€including€inadequate€environmentalÏanalysis.€Friends€of€the€Wild€Swan€sought€an€order€directing€the€Ô_ÔDNRCÔ_Ô€to€complete€an€Ô_ÔEISÔ_Ô€inÏaccordance€with€the€Ô_ÔMEPAÔ_Ô€and€an€injunction€prohibiting€the€Ô_ÔDNRCÔ_Ô€from€proceeding€with€anyÏactivity€in€furtherance€of€the€Middle€Soup€Creek€Project€until€a€proper€Ô_ÔEISÔ_Ô€was€prepared.€Ì6.ððOn€September€10,€1997,€the€Ô_ÔDNRCÔ_Ô€entered€into€a€contract€with€Plum€Creek€ManufacturingÏCompany€for€the€harvest€of€3.8€million€board€feet€of€timber€on€the€Middle€Soup€Creek€Project.ÏPursuant€to€the€contract,€the€Ô_ÔDNRCÔ_Ô€staff€marked€the€trees€to€be€harvested€by€Plum€Creek€withÏorange€paint.€Ì7.ððFollowing€the€Ô_ÔDNRCÔ_Ô's€selection€of€trees€to€be€harvested,€Friends€of€the€Wild€Swan€requestedÏSara€Johnson,€Ph.D.,€a€wildlife€biologist,€to€review€the€site€of€the€sale,€the€selection€of€trees€byÏthe€Ô_ÔDNRCÔ_Ô,€and€the€final€Ô_ÔEISÔ_Ô.€Johnson€concluded€that€the€selection€of€trees€by€the€Ô_ÔDNRCÔ_Ô€wasÏmore€extensive€than€described€by€the€final€Ô_ÔEISÔ_Ô,€and€that€the€final€Ô_ÔEISÔ_Ô€was€misleading€to€theÏpublic€regarding€the€amount€of€old€growth€timber€to€be€harvested.€Ì8.ððOn€January€5,€1998,€Friends€of€the€Wild€Swan€and€the€Ô_ÔDNRCÔ_Ô€stipulated€that€no€timber€wouldÏbe€harvested€on€the€Middle€Soup€Creek€Project€until€December€1,€1998.€As€a€result€of€the€parties'Ïstipulation,€Friends€of€the€Wild€Swan€withdrew€its€pending€motion€for€a€preliminary€injunction.€Ì9.ððOn€March€16,€1998,€the€Ô_ÔDNRCÔ_Ô€sent€a€letter€to€all€interested€parties€and€acknowledged€that€itÏhad€made€a€mistake€when€it€identified€the€trees€to€be€harvested€by€Plum€Creek.€The€Ô_ÔDNRCÔ_ÔÏexplained€that€proper€identification€of€the€trees€would€result€in€a€harvest€of€fewer€and€smallerÏtrees,€which€in€turn€would€reduce€the€volume€of€timber€harvested€from€3.8€million€board€feet€toÏ1.99€million€board€feet.€Because€of€the€reduction€in€volume€and€tree€size,€the€Ô_ÔDNRCÔ_Ô€and€PlumÏCreek€negotiated€a€reduced€price€per€thousand€board€feet€of€timber€harvested.€Ì10.ððOn€October€6,€1998,€Friends€of€the€Wild€Swan€filed€its€Second€Amended€Complaint€whichÏadded€the€alleged€Ô_ÔMEPAÔ_Ô€violation€of€failure€to€prepare€a€supplemental€Ô_ÔEISÔ_Ô€in€light€of€theÐ @-(, Ðchanged€economic€circumstances€of€the€sale.€Ì11.ððOn€October€15€and€16,€1998,€the€District€Court€held€a€hearing€to€consider€the€merits€ofÏFriends€of€the€Wild€Swan's€complaint.€Ì12.ððThe€parties'€stipulation€that€no€harvest€would€occur€expired€on€December€1,€1998.€Friends€ofÏthe€Wild€Swan€received€a€letter€from€the€Ô_ÔDNRCÔ_Ô€dated€November€27,€1998,€which€informed€themÏthat€"Plum€Creek€timber€Company€is€preparing€to€begin€harvesting€operations€on€December€1€orÏas€soon€after€that€date€when€the€desired€environmental€conditions€are€achieved."€The€letterÏfurther€informed€them€that€the€"sale€contract€allows€logging€activities€to€begin€on€December€1,Ï1998,€if€there€is€at€least€18€inches€of€snow€accumulation€and€freezing€temperatures.€LoggingÏactivities€may€begin€on€December€15€if€there€is€at€least€24€inches€of€snow€accumulation,€evenÏthough€temperatures€may€not€be€freezing."€Friends€of€the€Wild€Swan€recognized€that€theseÏenvironmental€conditions€were€also€set€forth€in€the€Ô_ÔEISÔ_Ô€as€required€mitigators€for€reducingÏimpact€upon€the€soil.€Ì13.ððIn€an€affidavit€dated€January€14,€1999,€Arlene€Montgomery,€Director€of€Friends€of€the€WildÏSwan,€stated€that€she€personally€made€visits€to€the€Middle€Soup€Creek€Project€area€on€NovemberÏ28€and€December€18,€1998,€and€on€both€occasions€it€was€raining€and€muddy,€there€was€noÏmeasurable€snow€accumulation€on€the€ground,€nor€was€the€ground€frozen.€Ì14.ððOn€December€23,€1998,€the€District€Court€issued€its€findings€of€fact,€conclusions€of€law,€andÏorder€in€which€the€District€Court€held€that€the€Ô_ÔDNRCÔ_Ô€was€required€to€include€a€cumulativeÏimpacts€analysis€in€the€Ô_ÔEISÔ_Ô€and€a€supplemental€Ô_ÔEISÔ_Ô€as€a€result€of€the€change€in€economicÏcircumstances.€The€order€enjoined€the€Ô_ÔDNRCÔ_Ô€from€proceeding€with€further€activities€relating€toÏthe€Middle€Soup€Creek€Project€until€the€supplemental€Ô_ÔEISÔ_Ô€and€the€cumulative€impacts€analysisÏhave€been€prepared.€Ì15.ððOn€December€29,€1998,€the€Ô_ÔDNRCÔ_Ô€filed€a€motion€and€brief€requesting€the€District€Court€toÏmodify€the€injunction€issued€in€its€December€23,€1998€order.€In€its€motion,€the€Ô_ÔDNRCÔ_Ô€admittedÏthat€it€had€allowed€Plum€Creek€to€commence€harvesting€timber€on€the€Middle€Soup€CreekÏProject€on€December€15,€1998,€and€then€ordered€Plum€Creek€to€cease€activities€upon€receipt€ofÏthe€District€Court's€order€on€December€23,€1998.€As€a€result,€the€Ô_ÔDNRCÔ_Ô€requested€the€DistrictÏCourt€to€modify€its€injunction€to€allow€the€Ô_ÔDNRCÔ_Ô€and€Plum€Creek€to€remove€any€timber€that€wasÏfelled€prior€to€December€23,€1998.€Additionally,€the€Ô_ÔDNRCÔ_Ô€requested€that€the€District€CourtÏrequire€Friends€of€the€Wild€Swan€to€post€an€injunction€bond€pursuant€to€ðð€77-1-110,€MCA,€toÏcompensate€the€school€trust€beneficiaries€should€the€injunction€be€wrongful.€Ì16.ððOn€January€11,€1999,€the€Ô_ÔDNRCÔ_Ô€sent€a€letter€to€Arlene€Montgomery,€Director€of€Friends€ofÏthe€Wild€Swan,€which€detailed€the€timber€harvesting€that€occurred€prior€to€December€23,€1998Ïon€the€Middle€Soup€Creek€Project.€The€Ô_ÔDNRCÔ_Ô€explained€that€90,000€board€feet€of€timber€wasÏcut€by€Plum€Creek€during€that€time€and€that€the€harvesting€was€done€pursuant€to€a€timber€saleÏinspection€report€in€which€the€Ô_ÔDNRCÔ_Ô€"gave€approval€for€the€felling€of€timber€in€Unit€#1€toÏproceed,€but€due€to€unfrozen€wet€soils€.€.€.€did€not€allow€skidding€activities€to€proceed."€Ì17.ððOn€January€21,€1999,€Friends€of€the€Wild€Swan€sought€Rule€11,€Ô_ÔM.R.Civ.P.Ô_Ô€sanctionsÏagainst€the€Ô_ÔDNRCÔ_Ô€for€its€motion€to€modify€the€injunction€and€request€for€Friends€of€the€WildÏSwan€to€post€an€injunction€bond.€Ì18.ððOn€February€26,€1999,€the€District€Court€issued€its€memorandum€and€order€denying€theÏÔ_ÔDNRCÔ_Ô's€motion€for€modification€of€the€injunction€and€request€for€an€injunction€bond€andÏdenying€Friends€of€the€Wild€Swan's€motion€for€Rule€11€sanctions.€Ì19.ððThe€Ô_ÔDNRCÔ_Ô€filed€its€notice€of€appeal€on€March€2,€1999,€and€Friends€of€the€Wild€Swan€filedÐ @-(, Ðits€notice€of€cross-appeal€on€March€16,€1999.€ÌÌSTANDARD€OF€REVIEWÌÌ1.ððThe€proper€standard€of€review€of€an€administrative€decision€pursuant€to€the€MontanaÏEnvironmental€Policy€Act€(Ô_ÔMEPAÔ_Ô),€is€whether€the€record€establishes€that€the€agency€actedÏarbitrarily,€capriciously€or€unlawfully.€North€Fork€Preservation€Ô_ÔAss'nÔ_Ô€v.€Department€of€StateÏLands€(1989),€238€Mont.€451,€465,€778€P.2d€862,€871.€In€North€Fork€Preservation€Ô_ÔAss'nÔ_Ô,€weÏstated€that:€ÌÌ[Ô_ÔI]nÔ_Ô€making€the€factual€inquiry€concerning€whether€an€agency€decision€was€"arbitrary€orÏcapricious,"€the€reviewing€court€"must€consider€whether€the€decision€was€based€on€aÏconsideration€of€the€relevant€factors€and€whether€there€has€been€a€clear€error€of€judgment."€ThisÏinquiry€must€"be€searching€and€careful,"€but€"the€ultimate€standard€of€review€is€a€narrow€one."ÌÌÌÌNorth€Fork€Preservation€Ô_ÔAss'nÔ_Ô,€238€Mont.€at€465,€778€P.2d€at€871€(quoting€Marsh€v.€OregonÏNatural€Resources€Council€(1989),€490€U.S.€360,€378).ÌÌ1.ððIn€Marsh,€the€U.S.€Supreme€Court€stated:€ÌÌ[Ô_ÔI]nÔ_Ô€the€context€of€reviewing€a€decision€not€to€supplement€an€Ô_ÔEISÔ_Ô,€courts€should€notÏautomatically€defer€to€the€agency's€express€reliance€on€an€interest€in€finality€without€carefullyÏreviewing€the€record€and€satisfying€themselves€that€the€agency€has€made€a€reasoned€decisionÏbased€on€its€evaluation€of€the€significance-or€lack€of€significance-of€the€new€information.€AÏcontrary€approach€would€not€simply€render€judicial€review€generally€meaningless,€but€would€beÏcontrary€to€the€demand€that€courts€ensure€that€agency€decisions€are€founded€on€a€reasonedÏevaluation€"of€the€relevant€factors."ÌÌÌÌMarsh,€490€U.S.€at€378.ÌÌ1.ððIn€North€Fork€Preservation€Ô_ÔAss'nÔ_Ô,€238€Mont.€at€460,€778€P.2d€at€868,€we€stated€that€theÏomission€of€the€cumulative€impacts€analysis€was€directly€relevant€to€the€"unlawful"€portion€ofÏour€standard€of€review.€ÌÌDISCUSSIONÌÌISSUE€1ÌÌ1.ððDid€the€District€Court€err€when€it€held€that€the€Ô_ÔDNRCÔ_Ô€violated€the€Ô_ÔMEPAÔ_Ô€as€a€result€of€itsÏfailure€to€include€an€adequate€cumulative€impacts€analysis€in€its€Ô_ÔEISÔ_Ô?€Ì2.ððThe€Ô_ÔDNRCÔ_Ô€asserts€that€the€District€Court€erred€when€it€found€that€the€Ô_ÔEISÔ_Ô€prepared€by€theÐ @-(, ÐÔ_ÔDNRCÔ_Ô€for€the€Middle€Soup€Creek€Project€was€insufficient€because€it€did€not€adequately€analyzeÏand€discuss€the€cumulative€impacts€of€the€project.€The€Ô_ÔDNRCÔ_Ô€contends€that€the€District€CourtÏfailed€to€comprehend€that€the€new€"coarse€filter"€ecological€analysis€takes€into€account€all€of€theÏprevailing€conditions€of€the€affected€lands€and€therefore€incorporates€a€cumulative€effectsÏanalysis.€The€Ô_ÔDNRCÔ_Ô€argues€that€the€District€Court's€primary€error€was€its€"disregard€for€theÏevidence€presented€that€each€of€the€court's€concerns€had€in€fact€been€considered€in€theÏpreparation€of€the€final€Ô_ÔEISÔ_Ô,€and€that€the€cumulative€impacts€of€all€the€past€and€present€actionsÏwere€carefully€considered."€Ì3.ððIn€response,€Friends€of€the€Wild€Swan€contends€that€even€if€the€Ô_ÔDRNCÔ_Ô's€new€"coarse€filter"Ïapproach€is€recognized€as€valid€and€includes€cumulative€impacts€analysis€as€part€of€itsÏmethodology,€the€Ô_ÔMEPAÔ_Ô€still€requires€a€cumulative€impacts€analysis€in€every€Ô_ÔEISÔ_Ô€and€thereforeÏthe€Ô_ÔDNRCÔ_Ô€is€required€to€include€the€requisite€discussion€in€its€Ô_ÔEISÔ_Ô.€Ì4.ððThe€Administrative€Rules€of€Montana€provide€in€relevant€part€as€follows:€ÌÌ36.2.529€Preparation€and€Contents€of€Draft€Environmental€Impact€StatementsÌÌIf€required€by€these€rules,€the€agency€shall€prepare€a€draft€environmental€impact€statement€usingÏan€interdisciplinary€approach€and€containing€the€following:ÌÌÌÌ.€.€.€.ÌÌÌÌ(4)€a€description€of€the€impacts€on€the€quality€of€the€human€environment€of€the€proposed€actionÏincluding:ÌÌÌÌ.€.€.€.ÌÌÌÌ(b)€primary,€secondary,€and€cumulative€impacts;ÌÌÌÌÌÌ36.2.522€DefinitionsÌÌÌÌ.€.€.€.Ð @-(, ЇÌÌ(7)€"Cumulative€impact"€means€the€collective€impacts€on€the€human€environment€of€theÏproposed€action€when€considered€in€conjunction€with€other€past€and€present€actions€related€to€theÏproposed€action€by€location€or€generic€type.€Related€future€actions€must€also€be€considered€whenÏthese€actions€are€under€concurrent€consideration€by€any€state€agency€through€pre-impactÏstatement€studies,€separate€impact€statement€evaluation,€or€permit€processing€procedures.ÌÌÌÌ.€.€.€.ÌÌÌÌ(12)€"Human€environment"€includes,€but€is€not€limited€to€biological,€physical,€social,€economic,Ïcultural,€and€aesthetic€factors€that€interrelate€to€form€the€environment.€As€the€term€applies€to€theÏagency's€determination€of€whether€an€Ô_ÔEISÔ_Ô€is€necessary,€economic€and€social€impacts€do€not€byÏthemselves€require€an€Ô_ÔEISÔ_Ô.€However,€whenever€an€Ô_ÔEISÔ_Ô€is€prepared,€economic€and€social€impactsÏand€their€relationship€to€biological,€physical,€cultural€and€aesthetic€impacts€must€be€discussed.ÌÌÌÌ1.ððThe€District€Court€found€that:€ÌÌThe€purpose€of€allowing€public€involvement€in€environmental€decision-making€is€frustrated€if€anÏÔ_ÔEISÔ_Ô€does€not€accurately€describe€the€impact€of€proposed€action€in€the€context€of€past,€present€andÏfuture€proposed€action.€The€average€member€of€the€public€must€rely€on€Ô_ÔDNRCÔ_Ô's€expertise,€andÏtherefore,€Ô_ÔDNRCÔ_Ô€must€give€sufficient€information€so€that€the€public€can€make€a€meaningfulÏevaluation€of€the€proposed€action.€To€do€so,€a€thorough€analysis€and€discussion€of€cumulativeÏimpacts€is€necessary.€The€legislature€recognized€as€much,€making€a€cumulative€impacts€analysisÏmandatory.€A€thorough€analysis€of€cumulative€impacts€is€lacking€here.ÌÌÌÌ1.ððThe€Ô_ÔDNRCÔ_Ô€argues€that€the€District€Court's€findings€were€erroneous€because,€although€RuleÏ36.2.529,€ARM,€requires€a€cumulative€effects€analysis,€the€Administrative€Rules€do€not€dictateÏany€particular€methodology.€However,€we€conclude€that€Rule€36.2.529(4)(b),€ARM,€clearlyÏstates€that€the€Ô_ÔEISÔ_Ô€shall€contain€a€description€of€the€cumulative€effects€and€does€not€allow,€as€theÏÔ_ÔDRNCÔ_Ô€suggests,€mere€analysis€implicit€within€the€Ô_ÔEISÔ_Ô.€The€public€is€not€Ô_ÔbenefitedÔ_Ô€by€reviewingÏan€Ô_ÔEISÔ_Ô€which€does€not€explicitly€set€forth€the€actual€cumulative€impacts€analysis€and€the€factsÏwhich€form€the€basis€for€the€analysis.€Ì2.ððThe€Ô_ÔDNRCÔ_Ô€additionally€argues€that€the€District€Court€erred€when€it€relied€on€RuleÏ36.2.524(1)(g),€ARM,€to€conclude€that€the€Ô_ÔDNRCÔ_Ô's€cumulative€impacts€analysis€was€alsoÏinadequate€for€its€failure€to€reconcile€the€proposed€action€with€the€State€Forest€Land€ManagementÏPlan€(Ô_ÔSFLMPÔ_Ô).€The€Ô_ÔDNRCÔ_Ô€states€that€Rule€36.2.524,€ARM,€"applies€only€to€the€analysisÐ @-(, ÐÔ_Ôperformed€in€attempting€to€ascertain€whether€an€EIS€should€be€prepared.€.€.€.€This€section€is€not€aÏsubstantive€element€to€be€contained€within€an€EIS."€Ì3.ððRule€36.2.524,€ARM,€states,€in€relevant€part:€ÌÌ(1)€In€order€to€implement€75-1-201,€MCA,€the€agency€shall€determine€the€significance€of€impactsÏassociated€with€a€proposed€action.€This€determination€is€the€basis€of€the€agency's€decisionÏconcerning€the€need€to€prepare€an€EIS€and€also€refers€to€the€agency's€evaluation€of€individual€andÏcumulative€impacts€in€either€EAs€or€EISs.€The€agency€shall€consider€the€following€criteria€inÏdetermining€the€significance€of€each€impact€on€the€quality€of€the€human€environment:ÌÌÌÌ.€.€.€.ÌÌÌÌ(g)€potential€conflict€with€local,€state,€or€federal€laws,€requirements,€or€formal€plans;ÌÌÌÌ(Emphasis€added.)€Clearly,€Rule€36.2.524,€ARM,€pertains€to€the€contents€of€an€EIS,€in€additionÏto€the€decision€of€whether€or€not€to€prepare€an€EIS.ÌÌ1.ððThe€DNRC€further€contends€that€the€EIS€did€discuss€the€SFLMP.€We€note€that€the€DistrictÏCourt€did€recognize€discussion€of€the€SFLMP,€stating€that:€"Although€the€Middle€Soup€CreekÏfinal€EIS€does€discuss€old€growth€and€fragmentation,€listing€them€as€'concerns,'€it€does€notÏdiscuss€the€SFLMP's€objective€to€preserve€old€growth,€reduce€fragmentation,€and€protect€uniqueÏhabitat."€The€District€Court€was€correct.€Ì2.ððAccordingly,€we€conclude€that€the€EIS€prepared€by€the€DNRC€fails€to€comport€with€theÏprovision€in€RuleÌ36.2.529(4)(b),€ARM,€which€requires€an€explicit€discussion€of€the€cumulative€impacts€analysis,Ïin€accordance€with€the€definitions€of€"cumulative€impact"€and€"human€environment"€set€forth€atÏRule€36.2.522,€ARM,€or€with€the€provision€provided€by€Rule€36.2.524(1)(g),€ARM.€As€a€result,Ïwe€conclude€that€the€DNRC€acted€unlawfully,€in€violation€of€the€MEPA,€in€its€preparation€of€theÏEIS€for€the€Middle€Soup€Creek€Project.€Therefore,€we€further€conclude€that€the€District€Court€didÏnot€err€when€it€held€that€the€DNRC€violated€the€MEPA€as€a€result€of€its€failure€to€include€anÏadequate€cumulative€impacts€analysis€in€its€EIS.€ÌÌISSUE€2ÌÌ1.ððDid€the€District€Court€err€when€it€held€that€the€DNRC€was€required€to€prepare€a€supplementalÏEIS?€Ì2.ððThe€DNRC€contends€that€the€District€Court€erred€by€concluding€that€a€supplemental€EIS€isÏrequired,€because€there€was€no€proof€offered€by€Friends€of€the€Wild€Swan€that€a€reduction€in€theÏtotal€timber€sale€revenue€would€result€in€any€physical€impact€to€the€human€environment.€TheÐ @-(, ÐDNRC€argues€based€on€Rule€36.2.522(12),€ARM,€that€a€change€in€economic€impacts€alone€doesÏnot€compel€the€preparation€of€a€supplemental€EIS.€The€DNRC€further€asserts€that€it€actedÏreasonably€in€preparing€its€economic€estimate€and€did€not€portray€the€economic€returns€in€the€EISÏas€reliable€estimates€of€absolute,€guaranteed€revenues.€Ì3.ððIn€response,€Friends€of€the€Wild€Swan€asserts€that€the€DNRC's€failure€to€supplement€the€EISÏwas€arbitrary€and€capricious€in€light€of€the€substantial€changes€in€the€proposed€action.€Friends€ofÏthe€Wild€Swan€points€out€that€the€final€EIS€described€a€sale€of€nearly€6€million€board€feet€ofÏtimber,€estimated€to€net€over€a€million€dollars€in€revenue€for€the€school€trust.€Whereas,€the€saleÏas€now€proposed€describes€a€sale€of€1.99€million€board€feet€of€timber,€which€is€estimated€toÏresult€in€a€loss€to€the€State.€Ì4.ððThe€final€EIS€identifies€Alternative€"B"€as€the€preferred€alternative€and€sets€forth€an€estimatedÏsale€of€5.2€million€board€feet€of€timber.€The€final€EIS€further€states€that€Alternative€"B"€isÏprojected€to€generate€approximately€$1,045,572€of€net€revenue€in€the€short-term.€The€final€EISÏstates€that:€ÌÌThe€objective€of€the€Middle€Soup€Creek€Project€is€to€generate€the€largest,€reasonable€monetaryÏreturn€to€the€school€trust€in€both€the€short€term€and€long€term€by€either€selling€approximately€sixÏmillion€board€feet€of€timber€or€selling€a€twenty-year€conservation€lease.€Alternatives€A€and€C€areÏeach€projected€to€generate€negative€net€revenue€if€harvested€this€year€or€if€harvesting€is€deferredÏfor€twenty€years.€These€alternatives€do€not€meet€the€project€objective€and€therefore€are€notÏconsidered€further.ÌÌÌÌ1.ððIt€appears€that€by€the€time€of€the€meeting€of€the€Board€of€Land€Commissioners€on€July€21,Ï1997,€the€DNRC€had€re-estimated€the€Middle€Soup€Creek€Timber€Sale€to€include€the€sale€of€3.8Ïmillion€board€feet€of€timber€and€$812,605€in€revenue.€In€April€1998,€following€the€discovery€ofÏthe€mismarked€trees€in€the€Middle€Soup€Creek€Project,€the€DNRC€notified€Friends€of€the€WildÏSwan€that€the€project€would€be€further€reduced€to€1.99€million€board€feet€of€timber€and€$350,000Ïin€revenue.€However,€the€costs€to€the€State€of€the€Middle€Soup€Creek€Project,€including€theÏMEPA€costs,€sale€preparation€costs,€administrative€costs€and€treatment€costs€has€reachedÏapproximately€$500,000.ÌAccordingly,€the€DNRC's€proposed€sale€of€1.99€million€board€feet€results€in€a€loss€ofÏapproximately€$150,000€to€the€State.€Ì2.ððRule€36.2.533,€ARM,€provides€in€relevant€part€as€follows:€ÌÌ(1)€The€agency€shall€prepare€supplements€to€either€draft€or€final€environmental€impact€statementsÏwhenever:ÌÌÌÌ(a)€the€agency€or€the€applicant€makes€a€substantial€change€in€a€proposed€action;ÌÌÌÐ @-(, Ð.€.€.€.ÌÌ(2)€A€supplement€must€include,€but€is€not€limited€to,€a€description€of€the€following:ÌÌÌÌ.€.€.€.ÌÌÌÌ(c)€any€impacts,€alternatives€or€other€items€required€by€ARM€36.2.529€for€a€draft€EIS€or€ARMÏ36.2.531€for€a€final€EIS€that€were€either€not€covered€in€the€original€statement€or€that€must€beÏrevised€based€on€new€information€or€circumstances€concerning€the€proposed€action.ÌÌÌÌ1.ððWe€conclude€that,€contrary€to€the€DNRC's€assertions,€there€is€no€requirement€in€RuleÏ36.2.533,€ARM,€that€a€substantial€change€must€result€in€an€additional€impact€to€the€environmentÏbefore€a€supplemental€EIS€is€required.€There€is€no€limitation€on€what€may€be€considered€aÏ"substantial€change".€Accordingly,€we€further€conclude€that€a€substantial€economic€change€in€aÏproject€can€serve€as€the€basis€for€the€supplemental€EIS€required€by€Rule€36.2.533,€ARM.€Ì2.ððIn€this€case,€the€District€Court€found€that:€ÌÌThe€substantial€change€in€the€harvest€quantity€and€in€the€net€revenue€resulting€from€the€harvestÏcertainly€are€"substantial€changes"€to€the€proposed€action.€Indeed,€the€motivation€for€the€sale,Ïproducing€net€revenue€for€the€trust,€has€been€completely€removed.€The€sale€now€will€cost€theÏState€money.€The€public€and€the€Board€of€Land€Commissioners€may€have€been€willing€to€loseÏvaluable€old€growth€timber€for€the€benefit€of€substantial€revenue€to€the€trust,€but€the€cost€benefitÏhad€now€been€substantially€changed.€The€public€may€not€be€willing,€and€the€Board€of€LandÏCommissioners€may€not€wish€to€require€the€public€to€pay€to€lose€its€old€growth€timber.€ÌÌÌÌ1.ððWe€conclude€that€the€change€in€economic€circumstances€in€the€Middle€Soup€Creek€ProjectÏwas€a€"substantial€change"€pursuant€to€Rule€36.2.533,€ARM,€which€required€the€preparation€of€aÏsupplemental€EIS.€Accordingly,€we€conclude€that€the€DNRC's€decision€not€to€supplement€theÏEIS€was€a€clear€error€of€judgment.€Therefore,€we€further€conclude€that€the€District€Court€did€notÏerr€when€it€held€that€the€DNRC€was€required€to€prepare€a€supplemental€EIS.€ÌÌISSUE€3ÌÌ1.ððDid€the€District€Court€err€when€it€held€that€Friends€of€the€Wild€Swan€was€not€required€to€postÏa€postappeal€injunction€bond€pursuant€to€ðð€77-1-110,€MCA?€Ì2.ððThe€DNRC€contends€that€ðð€77-1-110,€MCA,€required€the€District€Court€to€order€Friends€ofÏthe€Wild€Swan€to€post€an€injunction€bond€during€the€pendency€of€this€appeal.€Ð @-(, Ð3.ððSection€77-1-110,€MCA,€provides:€ÌÌIn€any€civil€action€seeking€an€injunction€or€restraining€order€concerning€a€decision€of€the€boardÏapproving€a€use€or€disposition€of€state€lands€that€would€produce€revenue€for€any€state€lands€trustÏbeneficiary,€the€court€shall€require€a€written€undertaking€for€the€payment€of€damages€that€may€beÏincurred€by€the€trust€beneficiary€if€the€board€is€wrongfully€enjoined€or€restrained.ÌÌÌÌ1.ððThe€District€Court€concluded€that€because€the€Middle€Soup€sale€was€expected€to€lose€money,Ïit€would€be€difficult€to€comprehend€how€damages€might€be€incurred€as€a€result€of€enjoining€theÏproject€and,€therefore,€concluded€that€Friends€of€the€Wild€Swan€was€not€required€to€post€a€bond.€Ì2.ððOn€appeal,€Friends€of€the€Wild€Swan€contends€that€the€DNRC€has€no€standing€to€invoke€ððÏ77-1-110,€MCA,€because€that€statute€only€pertains€to€actions€enjoining€a€decision€of€the€StateÏLand€Board.€Friends€of€the€Wild€Swan€argues€that,€here,€no€injunction€has€been€issued€againstÏthe€Land€Board,€nor€is€the€Land€Board€even€a€party€to€this€action.€Ì3.ððSection€77-1-110,€MCA,€provides€for€a€bond€in€a€civil€action€"seeking€an€injunction€orÏrestraining€order€concerning€a€decision€of€the€board"€for€damages€"that€may€be€incurred€by€theÏtrust€beneficiary€if€the€board€is€wrongfully€enjoined€or€restrained."€(Emphasis€added.)€ThisÏstatute€does€not€apply€to€this€case€which€deals€with€an€injunction€against€the€DRNC€based€on€theÏinadequacy€of€its€EIS€and€has€no€effect€on€the€Land€Board's€decision.€Ì4.ððTherefore,€we€conclude€that€the€District€Court€came€to€the€right€conclusion,€whether€or€not€itÏwas€for€the€right€reason€and€that€Friends€of€the€Wild€Swan€was€not€required€to€post€an€injunctionÏbond€pursuant€to€ðð€77-1-110,€MCA.€ÌÌISSUE€4ÌÌ1.ððThe€following€issue€is€presented€on€cross-appeal€by€Friends€of€the€Wild€Swan:€Ì2.ððDid€the€District€Court€err€when€it€denied€Friends€of€the€Wild€Swan's€motion€for€imposition€ofÏRule€11,€M.R.Civ.P.,€sanctions€against€the€DNRC?€Ì3.ððThis€Court€gives€a€district€court€broad€discretion€to€determine€whether€the€factualÏcircumstances€of€a€particular€case€amount€to€frivolous€or€abusive€litigation€tactics.€Accordingly,Ïwe€apply€the€following€standard€of€review:€ÌÌA€district€court's€findings€of€fact€will€be€overturned€if€clearly€erroneous.€The€court's€legalÏconclusion€that€the€facts€constitute€a€violation€of€Rule€11€will€be€reversed€if€the€determinationÏconstitutes€an€abuse€of€discretion.€We€will€review€the€case€de€novo€only€if€the€violation€is€basedÏon€the€legal€sufficiency€of€a€plea€or€motion.€ÌÌÌÌD'Agostino€v.€Swanson€(1990),€240€Mont.€435,€446,€784€P.2d€919,€926.ÌÌÌÔ_ÔÐ @-(, Ð1.ððFriends€of€the€Wild€Swan€contends€that€Rule€11,€Ô_ÔM.R.Civ.P.Ô_Ô€clearly€applies€to€theÏcircumstances€underlying€the€Ô_ÔDNRCÔ_Ô's€request€for€an€injunction€bond€pursuant€to€ðð€77-1-110,ÏMCA,€and€request€for€modification€of€the€District€Court's€injunction.€Friends€of€the€Wild€SwanÏasserts€that€the€Ô_ÔDNRCÔ_Ô's€request€of€the€District€Court€to€allow€it€to€sell€the€"illegally€harvestedÏtimber"€and€to€require€an€injunction€bond,€was€made€solely€to€harass€and€cause€needless€increaseÏin€the€costs€of€this€litigation.€Ì2.ððRule€11,€Ô_ÔM.R.Civ.P.Ô_Ô,€provides:€ÌÌThe€signature€of€an€attorney€or€party€constitutes€a€certificate€by€the€signer€that€the€signer€had€readÏthe€pleading,€motion,€or€other€paper;€that€to€the€best€of€the€signer's€knowledge,€information,€andÏbelief€formed€after€reasonable€inquiry€it€is€well€grounded€in€fact€and€is€warranted€by€existing€lawÏor€a€good€faith€argument€for€the€extension,€modification,€or€reversal€of€existing€law,€and€that€it€isÏnot€interposed€for€any€improper€purpose,€such€as€to€harass€or€to€cause€unnecessary€delay€orÏincrease€in€the€cost€of€litigation€.€.€.€.€If€a€pleading,€motion,€or€other€paper€is€signed€in€violation€ofÏthis€rule,€the€court,€upon€motion€or€upon€its€own€initiative,€shall€impose€upon€the€person€whoÏsigned€it,€a€represented€party,€or€both,€an€appropriate€sanction€.€.€.€.ÌÌÌÌ1.ððThe€District€Court€found€the€following:€ÌÌThe€fact€that€Ô_ÔDNRCÔ_Ô€may€have€violated€the€mitigation€controls€prescribed€in€the€Ô_ÔEISÔ_Ô€does€notÏimplicate€Rule€11.€If€Ô_ÔDNRCÔ_Ô€acted€in€bad€faith€or€violated€the€Ô_ÔEISÔ_Ô,€there€are€specific€statutoryÏremedies,€but€Rule€11€sanctions€is€not€one€of€those€remedies.€Nor€does€Rule€11€constituteÏgrounds€to€impose€sanctions€merely€because€Ô_ÔDNRCÔ_Ô€sought€to€have€a€bond€posted.ÌSection€77-1-110,€MCA,€is€a€fairly€new€provision,€having€been€enacted€in€1995.€The€CourtÏcannot€say€Ô_ÔDNRCÔ_Ô€acted€in€bad€faith€by€seeking€to€have€a€bond€posted.€Therefore,€the€CourtÏdeclines€to€impose€Rule€11€sanctions€against€Ô_ÔDNRCÔ_Ô.ÌÌÌÌ1.ððWe€conclude€that€the€District€Court's€findings€that€the€Ô_ÔDNRCÔ_Ô€did€not€act€in€bad€faith€are€notÏclearly€erroneous,€and€that€the€District€Court€did€not€abuse€its€discretion.€Therefore,€we€affirmÏthe€District€Court's€denial€of€Rule€11,€Ô_ÔM.R.Civ.P.Ô_Ô€sanctions€against€the€Ô_ÔDNRCÔ_Ô.€Ì2.ððThe€judgment€of€the€District€Court€is€affirmed.€ÌÌÌÌ/S/€TERRY€N.€Ô_ÔTRIEWEILERÔ_Ô€ÌÌÌÌÌÌÐ @-(, ЇÌÌWe€Concur:ÌÌÌÌ/S/€Ô_ÔKARLAÔ_Ô€M.€GRAYÌÌ/S/€JIM€Ô_ÔREGNIERÔ_Ô€ÌÌ/S/€JAMES€C.€NELSONÌÌ/S/€W.€WILLIAM€Ô_ÔLEAPHARTÔ_ÔÌÌÌÌññ