FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MODESTO IRRIGATION DISTRICT;
TURLOCK IRRIGATION DISTRICT;
MERCED IRRIGATION DISTRICT;
OAKDALE IRRIGATION DISTRICT;
SOUTH SAN JOAQUIN IRRIGATION
DISTRICT; STOCKTON EAST WATER
DISTRICT,
Plaintiffs-Appellants,
v.
CARLOS M. GUTIERREZ, in his
official capacity as Secretary of No. 09-15214
Commerce; D. ROBERT LOHN, in
D.C. No.
his official capacity as Regional
Administrator of the Northwest 1:06-cv-00453-
Region of NMFS; NATIONAL OWW-DLB
OCEANIC AND ATMOSPHERIC OPINION
ADMINISTRATION, a federal agency;
CONRAD C. LAUTENBACHER, JR., in
his official capacity as
Administrator of National Oceanic
and Atmospheric Administration;
WILLIAM T. HOGARTH, in his
official capacity as Assistant
Administrator for Fisheries of
NMFS; NATIONAL MARINE
FISHERIES SERVICES, a federal
agency within the Commerce
12403
12404 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
Department; RODNEY MCINNIS, in
his official capacity as Regional
Administrator of the Southwest
Region of NMFS,
Defendants-Appellees,
and
CENTER FOR BIOLOGICAL DIVERSITY;
DELTA FLY FISHERS; FEDERATION OF
FLY FISHERS; NORTHERN CALIFORNIA
COUNCIL OF FEDERATION OF FLY
FISHERS; TROUT UNLIMITED,
Defendants-Intervenors-Appellees.
Appeal from the United States District Court
for the Eastern District of California
Oliver W. Wanger, District Judge, Presiding
Argued and Submitted
December 11, 2009—San Francisco, California
Filed August 20, 2010
Before: Mary M. Schroeder and Consuelo M. Callahan,
Circuit Judges, and Barbara M. Lynn, District Judge.*
Opinion by Judge Schroeder
*The Honorable Barbara M. Lynn, United States District Judge for the
Northern District of Texas, sitting by designation.
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12407
COUNSEL
Tim O’Laughlin, Chico, California, for plaintiffs-appellants,
Modesto Irrigation District, et al.
Anna T. Katselas, Department of Justice, Washington, D.C.,
for defendants-appellees, Gary F. Locke, Secretary of Com-
merce, et al.
Stephen D. Mashuda, Seattle, Washington, for the intervenor.
OPINION
SCHROEDER, Circuit Judge:
This Endangered Species Act (“ESA”) case is a challenge
to the decision of the National Marine Fisheries Service
(“NMFS”) to list the steelhead, a type of Pacific salmon, as
a threatened species in California’s Central Valley. In listing
the steelhead, NMFS defined it as a distinct species under the
ESA, separate from rainbow trout, another type of Pacific
salmon that breeds with and looks like the steelhead. The sep-
arate listing was a departure from the prior NMFS policy of
classifying interbreeding Pacific salmon as a single species.
Plaintiffs are irrigation districts in California’s Central Val-
ley whose operations are impeded by the listing. They con-
tend that the listing violated the ESA because steelhead and
rainbow trout interbreed, and the statute therefore requires
NMFS to treat them as a single species. Plaintiffs also con-
12408 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
tend that NMFS violated the Administrative Procedure Act
(“APA”) by failing adequately to explain its decision to adopt
a new policy for classifying the fish. We agree with the dis-
trict court that under the ESA, interbreeding is not alone
determinative of whether organisms must be classified alike
where, as here, they develop and behave differently. We also
find that NMFS’ explanation for its change of policy satisfies
the standards set forth in the Supreme Court’s recent decision
in F.C.C. v. Fox Television Stations, Inc., 129 S. Ct. 1800
(2009). We therefore affirm.
THE STEELHEAD AND RAINBOW TROUT
This case turns upon the distinctions between the steelhead
and rainbow trout, types of Pacific salmon that comprise the
Oncorhyncus mykiss (“O. mykiss”) species as scientifically
defined. The fish are born in fresh water, but the steelhead
migrate to the ocean anywhere from hours to years after their
birth. To transition from fresh water to salt water, steelhead
undergo a “smolt” stage, and then after one to five years in
the sea, return to the original stream to spawn. Because of
their migration pattern, steelhead are known as the anadro-
mous form of O. mykiss. The rainbow trout, on the other
hand, remain in fresh water their entire lives and are com-
monly known as the resident form of the O. mykiss species.
While the two fish grow to differing sizes as adults and
have different predators and prey, they do interbreed to some
extent, and the offspring can take on the form of either. An
excess of steelhead can regenerate the population of rainbow
trout, but the reverse does not seem to be the case. All parties
agreed in the district court and before us that the steelhead
population is in decline in the Central Valley of California.
This unique biology of O. mykiss has complicated govern-
ment regulation of the species. In 1974, the United States Fish
and Wildlife Service (“FWS”) and NMFS entered into a
memorandum of understanding defining their respective juris-
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12409
dictions under the ESA. FWS has jurisdiction over predomi-
nantly freshwater fish including rainbow trout, and NMFS has
jurisdiction over ocean dwellers, including steelhead. This
concurrent jurisdiction has required the agencies to work
together in classifying O. mykiss under the ESA.
STATUTORY AND REGULATORY HISTORY
The ESA defines the term “species” to “include[ ] any sub-
species of fish or wildlife or plants, and any distinct popula-
tion segment of any species of vertebrate fish or wildlife
which interbreeds when mature.” 16 U.S.C. § 1532(16). Con-
gress added the term “distinct population segment” (“DPS”)
to the definition of species in 1978 so that agencies could
“provide different levels of protection to different populations
of the same species.” Nat’l Ass’n of Home Builders v. Norton,
340 F.3d 835, 842 (9th Cir. 2003). Congress did not define
DPS, nor is the term used in the scientific community. As a
result of this limited guidance from Congress, NMFS has
struggled for two decades over how to apply the term DPS
with respect to steelhead and rainbow trout.
NMFS’ first attempt at defining a DPS in this context
occurred in 1991 when the agency adopted a policy designed
specifically for classifying Pacific salmon such as O. mykiss.
See Policy on Applying the Definition of Species Under the
Endangered Species Act to Pacific Salmon, 56 Fed. Reg.
58,612 (Nov. 20, 1991) (“ESU Policy”). This policy did not
use the statutory term DPS, but instead created another new
term called the evolutionary significant unit (“ESU”). NMFS
also determined, however, that an ESU was the functional
equivalent of a DPS. See id. Under the ESU Policy, a salmon
stock had to satisfy two main criteria before NMFS could
place the stock in a distinct ESU:
(1) It must be substantially reproductively isolated
from other nonspecific population units; and
12410 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
(2) [I]t must represent an important component in
the evolutionary legacy of the species.
Id.
In 1996, in conjunction with FWS, NMFS promulgated a
more general policy defining the ESA’s operative concept of
DPS, a policy that would apply to all animal, bird and fish
species. See Policy Regarding the Recognition of Distinct
Vertebrate Population Segments Under the Endangered Spe-
cies Act, 61 Fed. Reg. 4,722 (Feb. 7, 1996) (“DPS Policy”).
The DPS Policy, like the ESU Policy, required NMFS to
examine multiple factors in determining whether an organism
qualified as a DPS. See 61 Fed. Reg. at 4,725. There was,
however, a key difference between the ESU and DPS Poli-
cies. Under the ESU Policy, a type of Pacific salmon had to
be “substantially reproductively isolated” from other salmon
stock before it could be classified in its own ESU, whereas,
under the DPS Policy, an organism could be placed its own
DPS so long as it was “markedly separated from other popula-
tions of the same taxon as a consequence of physical, physio-
logical, ecological, or behavioral factors.” See Endangered
and Threatened Species: Request for Comment on Alternative
Approach to Delineating 10 Evolutionary Significant Units of
West Coast Oncorhynchus mykiss, 70 Fed. Reg. 67,130,
67,131 (Nov. 4, 2005) (describing the history of the policies).
NMFS and FWS concluded in 1996 that the ESU Policy was,
despite this difference, “consistent with” the DPS Policy and
that both agencies would continue to apply the ESU Policy to
Pacific salmon, and apply the DPS Policy to all other organ-
isms. See 61 Fed. Reg. at 4,722.
When NMFS applied the ESU Policy to Pacific salmon in
1997, it determined that interbreeding steelhead and rainbow
trout populations should be classified in the same ESU
because they were not “substantially reproductively isolated.”
See Endangered and Threatened Species: Listing of Several
Evolutionary Significant Units (ESUs) of West Coast Steel-
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12411
head, 62 Fed. Reg. 43,937, 43,941 (Aug. 18, 1997). NMFS
noted, however, that “conclusive evidence d[id] not yet exist
regarding the relationship of resident and anadromous O.
mykiss,” which in most respects was “poorly understood.” See
id. at 43,938, 43,941.
Although NMFS and FWS agreed in 1997 that interbreed-
ing populations of steelhead and rainbow trout should be
placed in the same ESU, there was some dispute about how
to protect threatened O. mykiss populations. In many regions
the steelhead population was declining and NMFS desired to
list those populations as threatened or endangered. FWS,
however, opposed any listing that would have protected the
rainbow trout, having determined that its populations were in
no way threatened. See id. at 43,941. FWS thus did not want
to list any ESU containing both steelhead and rainbow trout,
even where the steelhead population within that ESU was
declining.
NMFS addressed FWS’ concern by deciding that when an
ESU contained both steelhead and rainbow trout, NMFS
would list only the steelhead population within that ESU as
threatened or endangered. See 70 Fed. Reg. at 67,130. By list-
ing subdivisions of an ESU, NMFS was able to protect declin-
ing steelhead populations while acceding to FWS’ desire not
to list rainbow trout.
Such subdivision listings were challenged in court, how-
ever. In Alsea Valley Alliance v. Evans, 161 F. Supp. 2d 1154,
1161-64 (D. Or. 2001), the court held that the ESA requires
that agencies list (or not list) entire DPSs/ESUs, thus preclud-
ing any listings below the ESU/DPS level. The court in Alsea
found it was contrary to the ESA for NMFS to list only the
steelhead population of an ESU containing both steelhead and
rainbow trout. NMFS therefore had to revisit all of its prior
steelhead listings.
In 2004, NMFS promulgated a number of new listings to
conform with the Alsea decision. Relevant to this litigation,
12412 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
NMFS defined the California Central Valley O. mykiss ESU
as comprising all steelhead and rainbow trout that “co-
occur[red]” below impassible barriers. See Endangered and
Threatened Species: Proposed Listing Determinations for 27
ESUs of West Coast Salmonids, 69 Fed. Reg. 33,102, 33,115
(June 14, 2004). It proposed listing this ESU as threatened. Id.
at 33,103.
There were those, however, who opposed the new listings
on the ground that it was inappropriate to classify steelhead
and rainbow trout in the same ESU. They pointed out that
even though steelhead and rainbow trout interbreed to some
extent, they differ in behavior and in their ability to sustain
themselves as a distinct segment of Pacific salmon. NMFS
received several comments from environmentalists who “felt
that rainbow trout and steelhead should be considered sepa-
rate ESUs for biological reasons (differences in behavior,
morphology, and ecology); or for policy or legal reasons
(such as implementing the purposes of the ESA).” Endan-
gered and Threatened Species: Final Listing Determinations
for 10 Distinct Population Segments of West Coast Steelhead,
71 Fed. Reg. 834, 836 (Jan. 5, 2006).
FWS also disagreed with the proposed listings. The Direc-
tor of the FWS sent a letter to NMFS in June 2005 suggesting
that NMFS had erred in not considering all the biological dif-
ferences between the two fish when classifying them in the
same ESU. FWS indicated that NMFS had placed too much
emphasis on the fact that the two fish were a part of the same
scientifically defined species, and suggested that it would be
appropriate to stop applying the ESU Policy to O. mykiss and
instead use the more general DPS Policy so that steelhead and
rainbow trout could be treated differently. See 70 Fed. Reg.
at 67,130.
At about this same time, NMFS obtained new scientific
reports illuminating the differences between steelhead and
rainbow trout. These reports indicated that, despite the repro-
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12413
ductive exchange between the two fish, “it seem[ed] unlikely
that a population of resident trout c[ould] consistently reestab-
lish a steelhead population.” Independent Science Advisory
Board, Viability of ESUs Containing Multiple Types of Popu-
lations 29 (2005); see also Salmon Recovery Science Review
Panel, Report for the meeting held December 2004 12
(“[R]esident populations by themselves should not be relied
upon to maintain long-term viability of an ESU.”). In
response to both FWS’ concerns and the new scientific infor-
mation highlighting the importance of protecting the steel-
head, NMFS determined that it should delay the proposed
listings for six months.
On November 4, 2005, NMFS proposed to abandon the
ESU Policy with respect to O. mykiss. NMFS proposed using
the DPS Policy instead to classify O. mykiss so the steelhead
and rainbow trout could be treated separately under the ESA.
See 70 Fed. Reg. at 67,131. In support of the change in policy,
NMFS stated:
[I]t is appropriate that we consider departing from
our past practice of applying the ESU Policy to O.
mykiss stocks, and instead apply the DPS Policy in
determining “species” of O. mykiss for listing con-
sideration. Such an approach would also be consis-
tent with use of the DPS Policy by the agencies in
defining DPSs of Atlantic salmon . . . The primary
difference in the application of the two policies is
that the ESU Policy relies on “substantial reproduc-
tive isolation” as the primary factor in delineating a
group of organisms, while the DPS Policy relies on
“marked separation” to delineate the group. Within
a discrete group of O. mykiss populations, the resi-
dent and anadromous life forms of O. mykiss remain
“markedly separated” as a consequence of physical,
physiological, ecological, and behavioral factors.
Despite the apparent lack of reproductive isolation
between the two forms within a given population or
12414 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
group of populations, under the DPS Policy anadro-
mous and resident O. mykiss may not warrant delin-
eation as part of the same DPS.
Id.
After receiving fifteen total comments, both opposed to and
in support of the policy change, NMFS formally announced
in January 2006 it would apply the DPS Policy to O. mykiss.
In support of the policy change, NMFS provided two justifi-
cations. NMFS first pointed to administrative consistency,
noting that it and FWS shared jurisdiction over Atlantic
salmon and had applied the DPS Policy to classify this type
of fish. NMFS also stated that it was no longer appropriate to
apply the ESU Policy to O. mykiss, because it was different
from other types of Pacific salmon. The full justification
stated:
Although the ESU Policy did not by its terms apply
to steelhead, the DPS Policy states that NMFS will
continue to implement the ESU Policy with respect
to “Pacific salmonids” (which include O. mykiss).
FWS, however, does not use our ESU policy in any
of its ESA listing decisions. In a previous instance of
shared jurisdiction over a species (Atlantic salmon),
we and FWS used the DPS policy in our determina-
tion to list the Gulf of Maine DPS of Atlantic salmon
as endangered (65 FR 69459; November 17, 2000).
Given our shared jurisdiction over O. mykiss, and
consistent with our approach for Atlantic salmon, we
believe application of the joint DPS policy here is
logical, reasonable, and appropriate for identifying
DPSs of O. mykiss. Moreover, use of the ESU policy
—originally intended for Pacific salmon—should
not continue to be extended to O. mykiss, a type of
salmonid with characteristics not typically exhibited
by Pacific salmon. NMFS and FWS also intend to
continue to evaluate application of the statutory term
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12415
“distinct population segment” in a process outside
the context of a species-specific listing.
71 Fed. Reg. at 834. Pursuant to the DPS Policy, NMFS listed
the Central Valley steelhead in its own DPS, apart from rain-
bow trout, and then listed steelhead as threatened.
THIS LITIGATION
Plaintiffs Modesto Irrigation District and other irrigation
and water districts (collectively, “MID”) formed a coalition in
2006 to file this suit under the APA in the Eastern District of
California challenging the listing. MID’s principal arguments
were that NMFS had not adequately justified the change of
policy, and that NMFS’ classification of steelhead in its own
DPS violated the plain language of the ESA because the steel-
head and rainbow trout were not sufficiently biologically dif-
ferent to justify separate treatment. The Center for Biological
Diversity (“CBD”) intervened to support the government.
The district court granted the government’s motion for
summary judgment in a published opinion. See California
State Grange v. Nat’l Marine Fisheries Serv., 620 F. Supp. 2d
1111 (E.D. Cal. 2008) (“Grange”). The opinion dealt with
this and related litigation not now before us. As relevant to
this appeal, the district court first rejected MID’s contention
that the ESA required interbreeding organisms to be included
in the same DPS. The ESA defines a species as “any subspe-
cies of fish or wildlife or plants, and any distinct population
segment of any species of vertebrate fish or wildlife which
interbreeds when mature.” 16 U.S.C. § 1532(16). The district
court found this definition ambiguous in that it did not clearly
state that all interbreeding organisms must be placed in the
same DPS. Grange, 620 F. Supp. 2d at 1174-76. The district
court also noted that Congress added the term DPS to the spe-
cies definition in order to provide agencies with greater flexi-
bility in their classifications. It concluded that MID’s
proposed limiting construction would be contrary to this
12416 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
intent. Id. at 1176. The district court also found that NMFS
had provided sufficient justification for the change from the
ESU to DPS Policy, applying then controlling law.
MID appeals and contends that under a proper interpreta-
tion of the ESA, the steelhead and rainbow should be classi-
fied in the same DPS because, to some extent, they interbreed.
MID also contends that the policy change for O. mykiss from
the ESU Policy to the DPS Policy was not adequately
explained or justified and hence was arbitrary and capricious.
WHETHER THE ESA REQUIRES SIMILAR
TREATMENT FOR STEELHEAD AND RAINBOW
TROUT
[1] The ESA provides that “[t]he term ‘species’ includes
any subspecies of fish or wildlife or plants, and any distinct
population segment of any species of vertebrate fish or wild-
life which interbreeds when mature.” 16 U.S.C. § 1532(16).
MID contends that in defining a species as a “[DPS] . . .
which interbreeds when mature,” the ESA requires agencies
to place all interbreeding organisms in the same DPS. MID
thus argues that NMFS violated the plain language of the ESA
by placing steelhead in their own DPS, because steelhead
sometimes interbreed with rainbow trout.
The parties agree that the analysis set forth in Chevron
U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984), guides the present inquiry. Under Chevron, we first
determine whether Congress has “directly spoken to the pre-
cise question at issue.” 467 U.S. at 842. If Congress’ intent is
clear, that ends the matter. Id. at 842-43. If, however, the stat-
ute is ambiguous, we must next determine whether the agen-
cy’s interpretation of the statute is permissible. Id. at 843.
For MID, the statute is not ambiguous and we need not pro-
ceed beyond Chevron’s first step. MID contends that the ESA
made interbreeding the single, definitive characteristic of a
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12417
DPS; so long as interbreeding can take place, the fish should
be in the same DPS.
NMFS’ position is that interbreeding is a necessary, but not
a sufficient condition for classification as a DPS. Some organ-
isms may be distinguished by other factors that justify differ-
ent classifications. The agency explained this in its final rule:
The ESA requirement that a group of organisms
must interbreed when mature to qualify as a DPS is
a necessary but not exclusive condition. Under the
definition, although all organisms that belong to a
DPS must interbreed when mature (at least on some
time scale), not all organisms that share some repro-
ductive exchange with members of the DPS must be
included in the DPS. The DPS policy outlines other
relevant considerations for determining whether a
particular group should be delineated as a DPS (i.e.,
“marked separation” as a consequence of physical,
physiological, ecological or behavioral factors).
71 Fed. Reg. at 838. NMFS thus agrees the ESA requires
organisms to interbreed in order to qualify as a “distinct popu-
lation segment,” or species as defined by the statute. It con-
tends that because steelhead interbreed, the ESA’s species
definition has been satisfied.
[2] We agree with the district court that the statutory defi-
nition of a species as a “[DPS] . . . which interbreeds when
mature” is “grammatically ambiguous.” See Grange, 620 F.
Supp. 2d at 1175. We also agree that the government’s read-
ing of Section 1532(16) finds support in the statutory lan-
guage. There is no indication within the text that Congress
intended to create a rigid limitation on an agency’s discretion
to define the statutorily undefined concept of a “distinct popu-
lation segment.” Cf. Strunk & White, The Elements of Style
59 (3d ed. 1979) (stating that phrases using the relative pro-
noun ‘which’ can be unclear due to the pronoun’s frequent
12418 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
misuse). The “[DPS] . . . which interbreeds when mature” lan-
guage in Section 1532(16) is phrased in terms of interbreed-
ing as a condition for a DPS to qualify as a species under the
ESA. Yet it does not necessarily indicate that interbreeding
must be the sole defining characteristic of a DPS, because, by
definition, a DPS must also be “distinct.” The statute certainly
cannot be read to support, unambiguously, MID’s contention
that all interbreeding organisms must be treated the same.
[3] Indeed, this court has already determined that “distinct
population segment” is an ambiguous term and that the DPS
Policy defining it is entitled to Chevron deference. See Nw.
Ecosystem Alliance v. U.S. Fish and Wildlife Serv., 475 F.3d
1136, 1141-44 (9th Cir. 2007). By inventing the term DPS
and then declining to define it, Congress intended to provide
agencies with discretion in deciding the composition of a
DPS. See Nat’l Ass’n of Home Builders, 340 F.3d at 842 (not-
ing that Congress added DPS to the species definition to allow
agencies to “provide different levels of protection to different
populations of the same species”). MID’s suggestion that the
“interbreeds when mature” language somehow restricts that
discretion runs counter to Congressional intent and our deci-
sion in Northwest Ecosystem Alliance. Under our circuit law,
the DPS Policy rests on a permissible interpretation of the
ESA.
Moreover, contrary to MID’s suggestion, the decision in
Alsea does not support MID’s proposed statutory interpreta-
tion. See 161 F. Supp. 2d at 1161-64. There, NMFS defined
an ESU to consist of both naturally spawned and hatchery
spawned Oregon coast coho salmon, but listed only the natu-
rally spawned population as threatened. Id. The court found
this listing arbitrary and capricious because the ESA permits
listing only an entire species as threatened or endangered. Id.
at 1162. Alsea held that once NMFS defines an ESU/DPS, it
cannot list only a portion of that DPS as threatened or endan-
gered. See id. at 1161-63.
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12419
Here there has been no subdivision below the DPS level.
NMFS determined that the Central Valley steelhead war-
ranted its own DPS. NMFS then listed that entire DPS as
threatened, thereby curing any Alsea problem. MID’s reliance
on Alsea is therefore misplaced.
[4] For these reasons, we conclude that Section 1532(16)
of the ESA does not require that interbreeding organisms be
placed in the same DPS.
THE GOVERNMENT PROVIDED AN ADEQUATE
RATIONALE FOR THE CHANGE IN POLICY
NMFS changed its policy when it applied the DPS Policy
to O. mykiss after it had previously applied the ESU Policy,
and it is undisputed that such a policy change requires an
explanation. See F.C.C. v. Fox Television Stations, Inc., 129
S. Ct. 1800, 1810-11 (2009). MID questions whether NMFS
provided sufficient explanation for the change. We hold that
the record reflects that NMFS engaged in a careful decision-
making process and provided a sufficient explanation for its
decision to apply the DPS Policy.
The district court held, on the basis of aging authority, that
NMFS’ decision to adopt the DPS Policy for O. mykiss was
supported by the record and sufficiently explained. See
Grange, 620 F. Supp. 2d at 1161-62 (relying on Motor Vehi-
cles Mfrs. Ass’n of the United States v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29 (1983)). Subsequent to the district
court’s decision, however, the Supreme Court provided new
guidance to courts reviewing an agency’s change in policy,
that in effect confirmed the validity of the district court’s
analysis. See Fox, 129 S. Ct. at 1810-11.
In Fox, the Court examined the FCC’s change in its defini-
tion of what constituted an indecent broadcast. Id. at 1806-07.
Under the FCC’s old policy, a broadcast with a “fleeting” or
non-literal expletive was rarely deemed indecent. Id. The new
12420 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
policy made such “fleeting” and non-literal expletives action-
ably indecent. Id. The Second Circuit struck down the change,
ruling that the FCC was required to provide a thorough justifi-
cation of why the new policy was necessary, and that the
agency had failed to do so. Id. at 1810. The Second Circuit
interpreted the Supreme Court’s decision in State Farm as
requiring courts to conduct a “more searching review” of an
agency’s decision to abandon an old policy in favor of a new
one. Fox, 129 S. Ct. at 1810.
The Supreme Court reversed and upheld the FCC’s new
indecency definition. It held that neither the APA nor State
Farm require courts to subject an agency’s policy change to
heightened judicial review. Id. Rather, the Court noted that an
agency need only satisfy certain criteria in order to justify a
policy change. First an agency must “display awareness that
it is changing position.” Id. at 1811. An agency must then
explain its reasoning, but it need not demonstrate that the new
policy is an improvement. It must:
show that there are good reasons for the new policy.
But it need not demonstrate to a court’s satisfaction
that the reasons for the new policy are better than the
reasons for the old one; it suffices that the new pol-
icy is permissible under the statute, that there are
good reasons for it, and that the agency believes it to
be better, which the conscious change of course ade-
quately indicates.
Id.
Some circumstances require that an agency provide a
greater justification for changing a policy than for adopting a
new one. In such cases, the justification must be greater than
what “would suffice for a new policy created on a blank
slate.” Id. The Court suggested such heightened explanation
may be appropriate, for example, if the new policy rests upon
factual findings that contradict those which underlay the pre-
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12421
vious policy or if the old policy has “engendered serious reli-
ance interests.” Id. Neither side has argued that such a
heightened standard applies here.
[5] Agencies thus have flexibility to alter policies under
Fox. The other Circuits that have already applied its standard
have recognized that the Supreme Court intended to provide
agencies considerable latitude to change course. So long as
the agency “fully explain[s] how its new construction is per-
missible under the statute, that there are good reasons for the
new construction, and that [the agency] believes the new
interpretation to be better,” a previous position is “no obsta-
cle” to adoption of a new course. Ad Hoc Shrimp Trade
Action Comm. v. United States, 596 F.3d 1365, 1372 (Fed.
Cir. 2010) (upholding policy change where agency deter-
mined that a “better reading” of the controlling statute
required a departure from previous practice); see also Westar
Energy, Inc. v. Fed. Energy Regulatory Comm’n, 568 F.3d
985, 988-89 (D.C. Cir. 2009) (finding that where agency
“carefully explained” policy change it must be upheld under
Fox). At the same time, because judicial deference is not
unlimited, departures from prior policy must be recognized
and explained. Courts will not “assume [an agency] has
engaged in reasoned decision making” when it “implicitly”
departs from its prior precedent and provides no explanation
for doing so. See Dillmon v. Nat’l Transp. Safety Bd., 588
F.3d 1085, 1091 (D.C. Cir. 2009).
[6] Here NMFS recognized the policy change and
explained it. The explanation for the change appeared in the
final rule as follows:
Although the ESU Policy did not by its terms apply
to steelhead, the DPS Policy states that NMFS will
continue to implement the ESU Policy with respect
to “Pacific salmonids” (which include O. mykiss).
FWS, however, does not use our ESU policy in any
of its ESA listing decisions. In a previous instance of
12422 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
shared jurisdiction over a species (Atlantic salmon),
we and FWS used the DPS policy in our determina-
tion to list the Gulf of Maine DPS of Atlantic salmon
as endangered . . . Given our shared jurisdiction over
O. mykiss, and consistent with our approach for
Atlantic salmon, we believe application of the joint
DPS policy here is logical, reasonable, and appropri-
ate for identifying DPSs of O. mykiss. Moreover,
use of the ESU policy — originally intended for
Pacific salmon — should not continue to be
extended to O. mykiss, a type of salmonid with char-
acteristics not typically exhibited by Pacific salmon.
NMFS and FWS also intend to continue to evaluate
application of the statutory term “distinct population
segment” in a process outside the context of a
species-specific listing.
71 Fed. Reg. at 834.
NMFS explicitly recognized it was changing policy when
it determined the DPS Policy to be a better fit for O. mykiss.
See Fox, 129 S. Ct. at 1811 (requiring agencies to recognize
that they are changing policy). While a new policy must rest
upon a permissible construction of the controlling statute, see
Fox, 129 S. Ct. at 1811, we have here and previously deter-
mined that the DPS Policy represents a permissible construc-
tion of the ESA. See Nw. Ecosystem Alliance, 475 F.3d at
1150 (“The DPS Policy is entitled to Chevron deference.”).
The more serious question here is whether NMFS provided
“good reasons” for the policy change. See Fox, 129 S. Ct. at
1811. MID does not argue that NMFS proffered bad reasons
in choosing to use the DPS Policy. Rather it contends that the
“good reasons” offered by NMFS have no support in the
record. As the ESU Policy was designed specifically for
Pacific salmon, MID points to NMFS’ lack of detailed expla-
nation for its conclusion that O. mykiss are subject to the DPS
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12423
Policy because they differ materially from other Pacific
salmon.
[7] Even if we were to agree with MID that NMFS’ expla-
nation leaves several unanswered questions, the law does not
require the explanation to be exhaustive. We must “uphold a
decision of less than ideal clarity if the agency’s path may
reasonably be discerned.” See id. (citation omitted). Here the
notice and comment process reveals NMFS’ evolving under-
standing of O. mykiss and reflects NMFS’ determination that
the differences between steelhead and rainbow trout set O.
mykiss apart from other Pacific salmon.
When NMFS first attempted to list the steelhead in 1997,
it recognized there were “uncertainties about the relationship
of resident and anadromous O. mykiss.” See 71 Fed. Reg. at
834. The proposed rule, issued almost a decade later,
describes at length the differences between the two fish, evi-
dencing that the agency had since determined that the distinc-
tions between steelhead and rainbow trout were expansive:
Despite the apparent reproductive exchange between
resident and anadromous O. mykiss, the two life
forms remain markedly separated physically, physio-
logically, ecologically, and behaviorally. Steelhead
differ from resident rainbow trout physically in adult
size and fecundity, physiologically by undergoing
smoltification, ecologically in their preferred prey
and principal predators, and behaviorally in their
migratory strategy. Where the two life forms co-
occur, adult steelhead typically range in size from
40-72 cm in length and 2-5 kg body mass, while
adult rainbow trout typically range in size from 25-
46 cm in length and 0.5-2 kg body mass. Steelhead
females produce approximately 2,500 to 10,000
eggs, and rainbow trout fecundity ranges from 700 to
4,000 eggs per female, with steelhead eggs being
approximately twice the diameter of rainbow trout
12424 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
eggs or larger. Steelhead undergo a complex physio-
logical change that enables them to make the transi-
tion from freshwater to saltwater (smoltification),
while rainbow trout reside in freshwater throughout
their entire life cycle. While juvenile and adult steel-
head prey on euphausiid crustaceans, squid, herring,
and other small fishes in the marine environment, the
diet of adult rainbow trout is primarily aquatic and
terrestrial insects and their larvae, mollusks, amphi-
pod crustaceans, fish eggs, and minnows. Finally,
steelhead migrate several to hundreds of miles from
their natal streams to the ocean, and spend up to 3
years in the ocean migrating thousands of miles
before returning to freshwater to spawn. Rainbow
trout, in contrast, may exhibit seasonal migrations of
tens of kilometers but generally remain associated
with their natal drainages.
70 Fed. Reg. at 67,132 (internal citations omitted). In later
extending the comment period, NMFS noted that it had
received and was considering a number of new scientific
studies bearing on the relationship between steelhead and
rainbow trout. See Endangered and Threatened Species: 6-
month Extension of the Final Listing Determinations for Ten
Evolutionary Significant Unites of West Coast Oncorhynchus
mykiss, 70 Fed. Reg. 37,219, 37,220 (June 28, 2005). These
reports demonstrated that, despite the reproductive exchange
between the fish, rainbow trout probably cannot regenerate a
steelhead population. See Independent Science Advisory
Board, Viability of ESUs Containing Multiple Types of Popu-
lations 29 (2005) (stating that it is “unlikely that a population
of resident trout can consistently reestablish a steelhead popu-
lation”); Salmon Recovery Science Review Panel, Report for
the meeting held December 2004 12 (2004) (“[R]esident pop-
ulations by themselves should not be relied upon to maintain
long-term viability of an ESU.”).
[8] This record thus contains ample support for the reasons
NMFS stated when it decided to use the DPS Policy. The final
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12425
rule stated that the ESU Policy was no longer appropriate for
classifying O. mykiss because it is “a type of salmonid with
characteristics not typically exhibited by Pacific salmon.” 71
Fed. Reg. at 834. The final rule may not explicitly describe
why and how O. mykiss differ from other species of Pacific
salmon, but the rule does provide an extensive discussion of
the similarities and differences between steelhead and rain-
bow trout that are not shared by other Pacific salmon. It “may
reasonably be discerned,” then, that NMFS determined that O.
mykiss is distinct from other types of Pacific salmon. See Fox,
129 S. Ct. at 1811.
MID also points to scientific evidence in the record it sug-
gests shows that steelhead and rainbow trout are not as differ-
ent as NMFS states. Yet our task is not to second guess the
agency’s action. We must defer to a reasonable agency action
“even if the administrative record contains evidence for and
against its decision.” See Trout Unlimited v. Lohn, 559 F.3d
946, 958 (9th Cir. 2009).
Moreover, NMFS provided reasons for the policy change
that MID does not meaningfully challenge or dispute. The
final rule cited precedent for applying the DPS Policy, stating
that NMFS and FWS, in another instance of overlapping juris-
diction, had jointly applied the DPS Policy to Atlantic
salmon. 71 Fed. Reg. at 834. The final rule explained it was
in accord with FWS’ expressed preference for the DPS Pol-
icy. Id. at 837. These administrative justifications demonstrate
that the agencies were seeking to adopt a consistent approach
to a similar issue, and we view this to be a “good reason” for
a policy change.
MID’s principal reliance is on three cases, all decided
before the Supreme Court’s decision in Fox. They are, hence,
of questionable value, because it is doubtful any applied the
deference Fox now requires. Even if we were to assume they
did apply the proper deferential standard, however, they are
all distinguishable in any event.
12426 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
In Defenders of Wildlife v. Hall, 565 F. Supp. 2d 1160,
1171-78 (D. Mont. 2008), the court enjoined a delisting
because the government did not explain a sudden change in
policy. The record in this case reflects how NMFS’ improved
scientific understanding of the characteristics of O. mykiss led
eventually to the policy change. In Northwest Environmental
Defense Center v. Bonneville Power Administration, 477 F.3d
668, 686-90 (9th Cir. 2007), the government relied exces-
sively on language in a Congressional committee report. Here,
following a lengthy notice and comment period, the govern-
ment offered scientific evidence in support of the change.
Finally, in Western Watersheds Project v. Kraayenbrink,
538 F. Supp. 2d 1302, 1312-14 (D. Idaho 2008), the govern-
ment justified a policy change on the basis of generalized con-
cerns for cost and efficiency. The change in this case has been
shown to be attributable to information about biological dif-
ferences between the steelhead and rainbow trout. The agen-
cy’s pathway and rationale for the change was thus apparent,
and its decision was not arbitrary or capricious. See Fox, 129
S. Ct. at 1811.
[9] In light of the evolving understanding of the differ-
ences between the fish, the desire for a flexible policy, and the
depth of consideration that NMFS has given the issue over
close to two decades, we conclude that the agency was not
arbitrary or capricious in changing its policy in order to pro-
tect the steelhead. We therefore affirm the district court’s
holding that the explanation for the policy change was suffi-
cient. Its ruling was fully consistent with the Supreme Court’s
subsequent decision in Fox.
We are aware of the practical difficulties the classification
decision creates for management of the Irrigation and Water
Districts. The two types of fish look and behave the same dur-
ing their early years in the rivers and streams in the area, and
the practical effect of our decision is that plaintiffs may have
to protect both the steelhead and rainbow trout, even though
MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12427
only the steelhead is threatened. The flexibility to make policy
changes in response to such concerns, however, remains in
the agencies administering the provisions of the ESA and not
with the courts.
CONCLUSION
The two narrow issues before this panel involve first a
question of statutory interpretation and second, whether an
agency provided an adequate justification for a policy change.
We agree with the district court that the definition of “spe-
cies” in the ESA did not require NMFS to place interbreeding
steelhead and rainbow trout in the same DPS. We further hold
that, under the Supreme Court’s decision in Fox, NMFS suffi-
ciently justified its decision to apply the DPS Policy to O.
mykiss. We therefore affirm the district court.
AFFIRMED.