Pacific Coast Federation v. U.S. Dept. of the Interior

FILED
NOT FOR PUBLICATION MAR 28 2016

MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

PACIFIC COAST FEDERATION OF No. 14-15514
FISHERMEN’S ASSOCIATIONS; et al.,
D.C. No. 1:12-cv-01303-LJO-MJS
Plaintiffs - Appellants,

v. MEMORANDUM*

UNITED STATES DEPARTMENT OF
THE INTERIOR; et al.,

Defendants - Appellees,

and

WESTLANDS WATER DISTRICT; et al.,

Intervenor-Defendants -
Appellees.

Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O’Neill, District Judge, Presiding

Argued and Submitted February 9, 2016
San Francisco, California

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
 Submission Withdrawn February 9, 2016

Resubmitted March 28, 2016**

Before: SILVERMAN, FISHER, and TALLMAN, Circuit Judges.

Pacific Coast Federation of Fishermen’s Associations, Inc., and San

Francisco Crab Boat Owners Association, Inc. (“plaintiffs”) appeal the district

court’s partial dismissal and partial summary judgment of their action under the

National Environmental Policy Act (“NEPA”) against the United States

Department of the Interior and the United States Bureau of Reclamation. We have

jurisdiction under 28 U.S.C. § 1291. We affirm in part, reverse in part, and

remand.

Prior to approving eight interim two-year contracts for the delivery of water

from the Central Valley Project to California water districts, Reclamation issued an

environmental assessment (“EA”) and a finding of no significant impact

(“FONSI”). Plaintiffs seek declaratory and injunctive relief on the basis of alleged

violations of NEPA in (1) an inadequate EA and FONSI and (2) failure to prepare

an environmental impact statement (“EIS”) for the interim contracts. The district

court dismissed plaintiffs’ claims that an EIS was required and that the EA’s “no

**
This case is resubmitted the date the memorandum is filed.

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action” alternative was deficient, and it granted summary judgment in favor of

defendants on the remaining challenges to the EA.

Even though the two-year contracts expired on February 28, 2014, this

appeal is not moot. The short duration and serial nature of Reclamation’s interim

water contracts place plaintiffs’ claims within the mootness exception for disputes

capable of repetition yet evading review. See A.D. ex rel. L.D. v. Haw. Dep’t of

Educ., 727 F.3d 911, 914 (9th Cir. 2013).

We review de novo a dismissal for failure to state a claim under Fed. R. Civ.

P. 12(b)(6). Chubb Custom Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 956

(9th Cir. 2013). We also review de novo the district court’s ruling on summary

judgment. San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 601

(9th Cir. 2014), cert. denied, 134 S. Ct. 948 & 950 (2015). Claims under NEPA

are reviewed under the standards of the Administrative Procedure Act, which

provides that an agency action must be upheld unless it is “‘arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.’” Id. (quoting 5

U.S.C. § 706(2)(A)).

I. “No Action” Alternative

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 The EA’s “no action” alternative complied with NEPA even though it

assumed continued interim contract renewal. A “no action” alternative is

“meaningless” if it assumes the existence of the very plan being proposed. Friends

of Yosemite Valley v. Kempthorne, 520 F.3d 1024, 1038 (9th Cir. 2008).

Nonetheless, when an agency action is mandatory, the “no action” alternative is

properly defined as the carrying out of that action. Dep’t of Transp. v. Pub.

Citizen, 541 U.S. 752, 769 (2004) (holding that Federal Motor Carrier Safety

Administration was not required to produce an EIS due to the environmental

impact of an action it could not refuse to perform); Am. Rivers v. Fed. Energy Reg.

Comm’n, 201 F.3d 1186, 1199-1201 (9th Cir. 1999) (holding that EIS for the

Federal Energy Regulatory Commission’s reissuance of licenses for continued

operation of two hydroelectric power facilities properly identified the “no action”

alternative as continued operation under the terms of the expired original licenses,

as required by the Federal Power Act). The “no action” alternative may also be

defined as the status quo; that is, no change from a current management direction,

or the continuation of a historical practice or use. Ass’n of Pub. Agency

Customers, Inc. v. Bonneville Power Admin., 126 F.3d 1158, 1188 (9th Cir. 1997)

(holding that the EIS for the Bonneville Power Administration’s renegotiation of

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long term power sales contracts properly defined the “no action” alternative as the

status quo of continuing the existing contracts).

We do not agree with the district court that the Central Valley Project

Improvement Act (“CVPIA”), a part of the Reclamation Projects Authorization

and Adjustment Act of 1992, required Reclamation to enter into the interim

contracts. The CVPIA requires “appropriate environmental review,” including the

preparation of a programmatic EIS (“PEIS”), before Reclamation is authorized to

renew an existing long-term water service contract. CVPIA § 3404(c)(1). After

the completion of the PEIS, Reclamation “shall, upon request, renew any existing

long-term repayment or water service contract for the delivery of water from the

Central Valley Project for a period of twenty-five years.” Id. Prior to the

completion of the PEIS, Reclamation “may” renew water service contracts for

interim three- or two-year periods. Id. As the district court acknowledged,

normally, when “may” and “shall” are used in the same statute, the “‘inference is

that each is being used in its ordinary sense—the one being permissive, the other

mandatory.’” Ctr. for Biological Diversity v. U.S. Fish & Wildlife Serv., 450 F.3d

930, 935 (9th Cir. 2006) (quoting Haynes v. United States, 891 F.2d 235, 239-40

(9th Cir. 1989)) (interpreting Endangered Species Act).

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 Nonetheless,, the status quo was the historical use of Central Valley Project

water by the water districts. See Ass’n of Pub. Agency Customers, Inc., 126 F.3d at

1188. The EA’s “no action” alternative therefore complied with NEPA.

II. Statement of Purpose and Need

The EA’s statement of purpose and need did not unreasonably narrow

Reclamation’s consideration of alternatives. See Alaska Survival v. Surface

Transp. Bd., 705 F.3d 1073, 1084 (9th Cir. 2013). The statement did not assume

that contract quantities would remain the same, and it was not an abuse of

discretion. See id.

III. Reduction in Water Quantity

Reclamation’s decision not to give full and meaningful consideration to the

alternative of a reduction in maximum interim contract water quantities was an

abuse of discretion, and the agency did not adequately explain why it eliminated

this alternative from detailed study. See Te-Moak Tribe of W. Shoshone of Nev. v.

U.S. Dep’t in Interior, 608 F.3d 592, 602 (9th Cir. 2010); Native Ecosys. Council

v. U.S. Forest Serv., 428 F.3d 1233, 1245 (9th Cir. 2005). The four reasons set

forth in the EA do not establish the non-viability of the alternative of maximum

water quantity reduction. See W. Watersheds Project v. Abbey, 719 F.3d 1035,

6
1050 (9th Cir. 2013) (holding that existence of viable but unexamined alternative

renders EA inadequate).

The first reason given by Reclamation was that the Reclamation Project Act

mandates renewal of existing contract quantities when beneficially used. See 43

U.S.C. § 485h-1(1) & (4). The EA stated that the water districts had complied with

contract terms, and, according to water needs assessments performed by

Reclamation, each water district’s needs equaled or exceeded the current total

contract quantity. Plaintiffs exhausted administrative remedies as to their

argument that Reclamation did not know whether existing water quantities were

“beneficially used” because Reclamation did not conduct a proper water needs

assessment, as contractually required, and Reclamation’s 2006 assessment was

inadequate because it was prepared with data from 1999 that predated a land

retirement project. See Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1132 (9th

Cir. 2011) (holding that issue was exhausted when agency had independent

knowledge of EA flaw); Lands Council v. McNair, 629 F.3d 1070, 1076 (9th Cir.

2010) (holding that issue is exhausted if agency is provided sufficient information

to give it a chance to bring its expertise to bear to resolve the claim). As plaintiffs

argue, Reclamation acted unreasonably by relying on stale water needs data. See

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W. Watersheds Project, 719 F.3d at 1052 (holding that “an agency errs when it

relies on old data without showing that the data remain accurate”).

Reclamation’s second reason for concluding that consideration of a

reduction in interim contract water quantities was not warranted was that the

Central Valley Project-wide PEIS for long-term contract renewal selected a

preferred alternative of renewal “for the full contract quantities.” Additionally, the

PEIS took into account the balancing requirements of the CVPIA, which provides,

among other things, for the weighing of fish, wildlife, and habitat restoration goals.

The PEIS did not, however, address site-specific impacts of individual contracts.

See W. Watersheds Project, 719 F.3d at 1050-51 (holding that when modification

of grazing practices was not considered at programmatic level, it must be given

hard and careful look at site-specific level). The government’s position that the

consideration of reduced-quantity alternatives should be required only with respect

to “long-term contract renewals” is unreasonable under the circumstances

presented here, involving an ongoing – and hence long-term – series of interim

renewals.

Reclamation’s third reason was that a shortage provision in the interim

contracts provided it with a mechanism for annual adjustments in water supplies.

As plaintiffs argue, however, the existence of a mechanism for adjusting water

8
quantities after contract approval did not relieve Reclamation of its obligation to

consider a reduction in quantities prior to contract approval. See id. at 1050.

Reclamation’s fourth reason was that “retaining the full historic water

quantities under contract provides the contractors with assurance the water would

be made available in wetter years and is necessary to support investments for local

storage, water conservation improvements and capital repairs.” This reasoning in

large part reflects a policy decision to promote the economic security of

agricultural users, rather than an explanation of why reducing maximum contract

quantities was so infeasible as to preclude study of its environmental impacts. See

id. Moreover, given the shortage provisions in the interim contracts and recent

drought conditions, the water districts have not been able to rely on delivery of

consistent quantities.

We therefore reverse as to the district court’s grant of summary judgment on

plaintiffs’ claim that the EA was inadequate because it did not give full and

meaningful consideration to the alternative of a reduction in maximum water

quantities. See id.

IV. Geographic Scope

Plaintiffs contend that the EA’s geographic scope was improperly limited to

the delivery areas and should also have considered the effects, including

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cumulative effects, of interim contract renewal on the California River Delta, the

source of the water, and on the Delta’s fish and other wildlife. See Save Our

Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1122 (9th Cir. 2004) (holding that agency

must analyze all environmental consequences of action). This contention lacks

merit because the EA was tiered off of the PEIS, which addressed Central Valley

Project-wide effects of long-term contract renewal. See 40 C.F.R. § 1508.28

(describing tiering). In light of Reclamation’s obligation to conduct a more

comprehensive analysis in the PEIS, it would be impractical to require the agency

to trace the incremental effects of each two-year water service contract on the Delta

and all Central Valley Project waters. See Friends of the Wild Swan v. Weber, 767

F.3d 936, 943 (9th Cir. 2014) (stating that agency must balance need for

comprehensive analysis against considerations of practicality).

V. Impacts on Listed Species and Cumulative Impacts

Plaintiffs waived their argument that the EA’s analysis of the giant garter

snake and the California least tern impermissibly equated a finding of no jeopardy

under the Endangered Species Act with a finding of no significant impact under

NEPA. See Lands Council, 629 F.3d at 1076. Impacts on salmonids and green

sturgeon, as well as cumulative impacts related to drainage and selenium, were

more appropriately addressed in the PEIS and the San Luis Drainage Feature Re-

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Evaluation Final EIS, rather than the EA for interim contract renewal. See Friends

of the Wild Swan, 767 F.3d at 943.

We affirm the district court’s judgment in part. We reverse in part and

remand with instructions for the district court to vacate its grant of summary

judgment in favor of defendants on plaintiffs’ claim that the EA was inadequate

because it did not give full and meaningful consideration to the alternative of a

reduction in maximum water quantities. On remand, the district court shall direct

Reclamation consider such an alternative in any future EA for an interim contract

renewal. In satisfying this duty, Reclamation may rely upon any water needs

assessment for which the data remain accurate. See W. Watersheds Project, 719

F.3d at 1052.

Each party shall bear its own costs.

AFFIRMED in part, REVERSED in part, and REMANDED.

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