Petition for Writ of Certiorari — Lower Tule River Irrigation District v. Natural Resources Defense Council

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Supreme Coun

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QB 926 vx? 1998

OFFICE OF THE cree.

In The

Supreme Court of the United States

October Term, 1998

LOWER TULE RIVER IRRIGATION DISTRICT, et al.,

Petitioners,

VS.

NATURAL RESOURCES DEFENSE COUNCIL, et al.,

Respondents.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

Law OFFICES OF Best Best & Kriecer LLP

Gary W. SAWYERS Grecory K. WILKINSON

Gary W. SAwyYERS Counsel of Record

MELANIE J. ALDRIDGE Eric L. GARNER

575 East Alluvial Avenue 3750 University Avenue

Suite 101 P.O. Box 1028

Fresno, CA 93720 Riverside, CA 92502

(209) 438-5656 (909) 686-1450

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Under Section 8 of the Reclamation Act (43 U.S.C.

§ 383), the operation of a federal project is subject to state

law unless the state law is inconsistent with congres-

sional directives. The question presented is:

Whether application of California law to the federal

Central Valley Project (“CVP”) conflicts with congres-

sional directives when the state law requires the owner of

a dam to pass water through the dam for downstream

fishery purposes and Congress has explicitly prohibited

the downstream release of water from the same dam

pending a further act of Congress?

2. Section 7(a)(2) of the Endangered Species Act (“ESA”)

(16 U.S.C. § 1536(a)(2)) requires federal agencies to con-

sult with the Secretaries of Interior and Commerce to

ensure that any action carried out by the agency is not

likely to jeopardize the continued existence of any threat-

ened or endangered species. The questions presented are:

a. Whether the consultation requirement is sat-

isfied when the Bureau of Reclamation requests

consultation and the Secretary of Commerce

refuses to consult?

b. Whether the completion of consultation and

a finding of no jeopardy by the Secretary of

Interior moots claims of a procedural violation

of the ESA arising from a failure to complete

consultation prior to commencement of the

agency action?

PARTIES

A. Plaintiffs and Respondents:

Natural Resources Defense Council; Trout Unlimited

of California; Bay Institute of San Francisco; California

Natural Resources Federation; California Sports Fishing

Protection Alliance; California Trout; Friends of the River;

Northern California Guides Association; Pacific Coast

Federation of Fisherman’s Associations; San Joaquin Rap-

tor Rescue Center; Sierra Club; Stanislaus Audubon Soci-

ety, Inc.; United Anglers of California; California Striped

Bass Association; and National Audubon Society.

B. Federal Defendants:!

Roger Patterson, as Regional Director of the Mid-

Pacific Region of the United States Bureau of Reclama-

tion; and Bruce Babbitt, as Secretary of the United States

Department of the Interior.

C. Non-Federal Defendants and Petitioners:

Friant Water Users Authority; Orange Cove Irrigation

District; Lindmore Irrigation District; Terra Bella Irrigation

District; Exeter Irrigation District; Ivanhoe Irrigation Dis-

trict; Lower Tule River Irrigation District; Sausalito Irriga-

tion District; Delano-Earlimart Irrigation District; Teapot

Dome Irrigation District; Arvin-Edison Water Storage Dis-

trict; Southern San Joaquin Municipal Utility District; Shaf-

ter-Wasco Irrigation District; Porterville Irrigation District;

Stone Corral Irrigation District; Chowchilla Water District;

Madera Irrigation District; Lindsay-Strathmore Irrigation

District; and Tulare Irrigation District.

' Have chosen not to appeal the Ninth Circuit decision.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .........--2cescccesceees i

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yy 3 Es Bae oye i.) >. Se eee iii

TABLE OF AUTHORITIES ..........ccececcececes iv

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STATEMENT OF THE CASE.............------05-: 3

TED hn wiheas cnc cevewedesvotestnsctnsdres eas 12

1. The CVPIA Conflicts with and Preempts State

Law Relating to the Release of Water from

ik Re pi Rede soared eboney eeb onge 12

(a) The Language of the CVPIA Expresses

Congress’ Intent to Preclude the Release of

Water From Friant Dam...............-. 14

(b) The Legislative History of the CVPIA Con-

firms Congress’ Preemptive Intent Regard-

ing Section 5937 .......--+.ssseeeseeeee: 19

This Court Should Grant Review to Resolve a

Conflict Among the Circuits on Mootness and

Subsequent Compliance with ESA Require-

SS thw edeeeeue uv o¥eu's shdvecesevecsees 20

3. The Ninth Circuit Erred in Ruling That the

Bureau Violated its ESA Obligations by Accept-

ing NMFS’ Refusal to Consult ............--. 23

4. The Ninth Circuit Erred in Concluding the

Bureau’s Consultation with FWS was Untimely 25

5. The Ninth Circuit Erred in Ruling That Rescis-

sion of the Friant Renewal Contracts was the

Sole Available Remedy. ........ cc cccececces 27

TABLE OF AUTHORITIES

Page

Cases

Amoco Production v. Village of Gamble, 480 U.S. 531

CREE dias we bo gi eekaued sen ve ceca dc eas ieee 27, 28

Arizona v. California, 373 U.S. 546 (1963)............. 19

Bay's Legal Fund v. Browner, 828 F.Supp. 102 (D.

Rc SOE au oak co or bck kee eke sk sek tee 26, 27

Bennett v. Spear, 520 U.S. 154 (1997)............-.05- 11

California v. United States, 438 U.S. 645 (1978) ....... 13

Dugan v. Rank, 372 U.S. 609 (1963)................ 4,14

Ingersoll-Rand Co. v. McClendon, 498 U.S. 133

CPSU NE buco esenns nerd vovns €cts ds oeaeeed eee eas 17

International Paper Co. v. Ouellette, 479 U.S. 481

CREE aah oS haa 0 babes Reb SPENT ob mawke> MUP ELS Ess 12

John Hancock Mutual Life Insurance Co. v. Harris

Trust & Sav. Bank, 510 U.S. 101 (1993)............. 19

Natural Resources Defense Council v. Patterson, 791

fo Sp i Se A ee) «2 Se a er ee 5

Pacific Rivers Council v. Thomas, 30 F.3d 1050 (1994) .... 29

Resets &. t7.5., 466 VS. 26 CIR 6k od iw ek se Kove 19

Sierra Club v. Glickman, 156 F.3d 606 (5th Cir.

SO bs FARR 09 5b eee 12; 21, 22

Sierra Club v. Marsh, 816 F.2d 1376 (9th Cir. 1987). ..25, 29

Southern Utah Wilderness Alliance v. Smith, 110

F.3d. 724 (10th Cir. 1997) .............. S42: 2k ae

Thomas v. Peterson, 753 F.2d 764 (1985).............. 29

eee os .

TABLE OF AUTHORITIES - Continued

Page

TVA v. Hill, 437 U.S. 153 (1978) ..........---- Zi, 20, a?

United States v. Gerlach Live Stock Co., 339 U.S. 725

Li) POPPE rr eter ee ee 4

United States v. State of California Water Resources

Control Board, 694 F.2d 1171 (9th Cir. 1982)........ 12

United States v. St. Paul, M. & M. R. Co., 247 U.S.

ME TEGO one's veka basen ed ee ese rere se Ve bsveves’s 19

Weinberger v. Romero-Barcello, 456 U.S. 305 (1982)....27, 28

STATUTES

California Fish and Game Code § 5937....... 12, 13, 19

California Water Code § 11226.........-.-++++e++05: 18

Central Valley Project Improvement Act

Pub. L. No. 102-575, 106 Stat. 4706, §§ 3401 et seq.

ve RRR see us ye Mere re Soe apree 14, 15, 17

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SANE cs snes pcecc sedak cus nessasnst aces: 15

SUURNE Re ea a 15

RERWIGD, ois cade ys anes teeter ey sneer 15

TABLE OF AUTHORITIES - Continued

Page

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Reclamation Act of 1902

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Reclamation Act of 1939

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Endangered Species Act

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eg Re eR eM Pe Pr ceed ee NPE ee AN 25

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50 C.F.R.

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OPINIONS BELOW

The decision of the United States Court of Appeals

for the Ninth Circuit is reported at 146 F.3d 1118. One of

several orders of the United States District Court is

reported at 791 F. Supp. 1425.

JURISDICTION

The decision of the United States Court of Appeals

for the Ninth Circuit was filed and entered on June 24,

1998. A Petition for Rehearing was filed on August 6,

1998, and was denied on September 8, 1998. The jurisdic-

tion of this Court is invoked under 28 U.S.C. § 1254{(a).

——@

APPLICABLE LAWS

The following are the laws applicable to this Petition:

1. Section 8 of the Reclamation Act of 1902 (43

U.S.C. § 383):

Nothing in this Act shall be construed as

affecting or intended to affect or to in any way

interfere with the laws of any State or Territory

relating to the control, appropriation, use, or

distribution of water used in irrigation, or any

vested right acquired thereunder, and the Secre-

tary of the Interior, in carrying out the provi-

sions of this Act, shall proceed in conformity

with such laws, and nothing herein shall in any

way affect any right of any State or of the Fed-

eral Government or of any landowner, appro-

priator, or user of water in, to, or from any

interstate stream or the waters thereof.

2. Central Valley Project Improvement Act Pub. L.

No. 102-575, 106 Stat. 4706, § 3401(c)(1):

During the time that the Secretary is developing

the plan provided for in this subsection, and

until such time as Congress has authorized the

Secretary to implement such plan, with or with-

out modifications, the Secretary shall not, as a

measure to implement this title, make releases

for the restoration of flows between Gravelly

Ford and the Mendota Pool and shall not there-

after make such releases as a measure to imple-

ment this title without a specific Act of Congress

authorizing such releases.

3. Section 7(a)(2) of the Endangered Species Act (16

U.S.C. § 1536(a)(2)):

Each Federal agency shall, in consultation with

and with the assistance of the Secretary, insure

that any action authorized, funded, or carried

out by such agency (hereinafter in this section

referred to as an “agency action”) is not likely to

jeopardize the continued existence of any

endangered species or threatened species or

result in the destruction or adverse modification

of habitat of such species. . . .

4. Section 7(d) of the Endangered Species Act (16

U.S.C. § 1536(d)):

After initiation of consultation required

under subsection (a)(2) of this section, the Fed-

eral agency and the permit or license applicant

shall not make any irreversible or irretrievable

Si Pe ee cee Seren

commitment of resources with respect to the

agency action which has the effect of foreclosing

the formulation or implementation of any rea-

sonable and prudent alternative measures which

would not violate subsection (a)(2) of this sec-

tion.

STATEMENT OF THE CASE

This case is appropriate for the granting of certiorari

because it raises three issues of national significance. The

first involves the exercise by Congress of the power to

preclude the application of state law to facilities by clear

statutory directive. The second is the scope of the consul-

tation obligation imposed by the Endangered Species Act

(“ESA”) and the third is whether implementation of that

consultation requirement and a no jeopardy finding moot

a procedural violation of consultation requirements.

In 1992, Congress exercised its power through the

Central Valley Project Improvement Act (“CVPIA”), Pub.

L. No. 102-575, 106 Stat. 4706, to preclude the application

of a state law requiring the downstream release of water

from dams to a key facility of the Central Valley Project

(“CVP”), the nation’s largest water supply project. In

doing so, Congress acted compatibly with a long-stand-

ing statutory program and federal plan which recognized

that the CVP would fail to serve its intended purpose if

downstream releases from the facility were compelled

without careful federal control.

Commencing in the mid-1930’s, Congress authorized

construction of the CVP for the purpose of supplying

water to several million acres of fertile land in Califor-

nia’s Central Valley. Included among the CVP facilities

was the Friant Unit, consisting of Friant Dam and Miller-

ton Reservoir on the San Joaquin Kiver as well as the

Friant-Kern and Madera canals. The Friant Unit provides

much needed irrigation water to approximately a million

acres of highly productive farms located along the east-

ern side of the San Joaquin Valley in Merced, Madera,

Fresno, Tulare and Kern Counties (the “Friant Service

Area”).

As recognized by several earlier decisions of this

Court, the Friant Unit was authorized by Congress with

the understanding that it would impound virtually the

entire flow of the San Joaquin River at Friant Dam and

that refreshing the semiarid land in the Friant Service

Area would come with a cost: except for occasional spills,

a dry riverbed would exist below the dam. (United States

v. Gerlach Live Stock Co., 339 U.S. 725, 729-730 (1950).)

Indeed, as this Court recognized some 10 years after

Friant operations commenced, the impairment of San Joa-

quin River flows at Friant was “most substantial — almost

three-fourths of the material flow of the river.” (Dugan v.

Rank, 372 U.S. 609, 620-621 (1963).) To increase down-

stream flows, however, “would force the abandonment of

the project which has not only been fully authorized by

Congress but paid for through its continuing appropria-

tions.” (/d.) It would cause the Government to be

“stopped in its tracks.” (Id.)

The water made available by the Friant Unit was

provided to farmers in the Friant Service Area by means

of 40-year contracts entered into pursuant to Section 9(e)

of the Reclamation Act of 1939. (43 U.S.C. § 485h(e).) In

1956, Congress amended the reclamation law to add a

right of renewal of Section 9e) contracts (43 U.S.C.

§ 485h-1) and each of the Friant water service contracts

was subsequently amended to incorporate such a right.

In June 1988, the Government began formal negotia-

tions with Friant Unit Water Service Contractors (“Con-

tractors”) for the purpose of renewing the long-term

contracts for water service. On November 2, 1988, the

Bureau of Reclamation (“Bureau”) announced the com-

pletion of negotiations with the Orange Cove Irrigation

District (“Orange Cove”), whose contract was the first to

expire. Less than two months later, a consortium of envi-

ronmental organizations commenced the present act:on

against the Government and the Friant Water Users

Authority seeking to invalidate the Orange Cove contract

and other water service renewal contracts. ‘-ontractors

then intervened.

Several years after the filing of their initial complaint,

the environmental plaintiffs were granted leave to amend

to assert that operation of the Friant Unit in accordance

with a California law, relating to the downstream release

of water from dams for fishery purposes, is required by

Section 8 of the Reclamation Act of 1902. (43 U.S.C.

§ 383.) The claim was met with motions to dismiss raised

by both the Government and the Friant water users. Each

argued that Section 8 of the 1902 Act does not mandate

compliance with state law. However, the district court

ruled that application of the California law was not pre-

empted. (Natural Resources Defense Council v. Patterson,

791 F. Supp. 1425 (E.D. Cal. 1992).)

Six months later, Congress enacted the CVPIA “to

address impacts of the Central Valley Project on fish,

wildlife and associated habitats” and “to protect, restore

and enhance fish, wildlife and associated habitats in the

Central Valley .. . of California.” (CVPIA, § 3402(b), 106

Stat. 4706.) In doing so, Congress directed the Secretary

of Interior to develop a “reasonable, prudent and feas-

ible” comprehensive plan that would address fish, wild-

life and habitat concerns on the San Joaquin River,

“including but not limited to streamflow.” (CVPIA,

§ 3406(c), 106 Stat. 4721.) Moreover, Congress directly

addressed the issue of reservoir releases from Friant Dam

prior to the implementation of such a federal plan:

“{U]ntii such time as Congress has authorized the Secre-

tary to implement such plan, with or without modifica-

tions, the Secretary shall not, as a measure to implement

this title, make releases for the restoration of flows

between Gravelly Ford and the Mendota Pool and shall

not thereafter make releases as a measure to implement

this title without a specific Act of Congress authorizing

such releases.” (Id.)

Following enactment of the CVPIA, renewed motions

to dismiss were brought by the Government and the

Friant water users. Each argued that the CVPIA pre-

empted plaintiffs’ claim that state law could be applied to

compel the release of water from Friant Dam. By order

issued October 12, 1993, however, the district court

denied the motions. (App. 38.) While the court concluded

that an order mandating compliance with California’s

Fish and Game Code might contravene the methodical

approach to San Joaquin River restoration laid out by

Congress, it determined that the restriction on flow

releases set forth in Section 3406(c) of the CVPIA applies

only to releases of water that might otherwise be required

by the CVPIA itself. (App. 72.) Accordingly, the district

court found no impediment to plaintiffs’ attempt to com-

pel downstream releases from Friant Dam by means of

state law. On appeal, the Ninth Circuit affirmed, holding

that despite the language of Section 3406(c), there is no

clear directive in the CVPIA that preempts application of

the state law if it can be implemented in a way that is

consistent with Congress’ plan to develop and restore

fisheries below Friant dam in a manner that is “reason-

able, prudent and feasible.” (App. 34.)

The second issue of significance raised by the present

case concerns the scope of the consultation obligation

imposed by Section 7 of the ESA. More specifically, it

raises the issue of the obligations imposed on a federal

action agency when the relevant wildlife agency refuses to

consult under the ESA. Also involved is the question

whether the action agency (the Bureau in this case) can be

charged with arbitrary and capricious conduct if the

wildlife agency declines to consult for the wrong reason.

Section 7(a)(2) of the ESA imposes a substantive duty

on federal agencies to “insure that any action authorized,

funded or carried out by such agency is not likely to

jeopardize the continued existence of any endangered or

threatened species. . . . ” Section 7(a)(2) also provides that

the federal action agency shall discharge this substantive

duty to avoid jeopardy “in consultation with and with the

assistance of [the appropriate federal wildlife agency.}”'

1 A Section 7 consultation regarding listed land-based

species is within the jurisdiction of the Fish and Wildlife Service

In August 1989, NMFS listed the Sacramento River

winter-run salmon as a threatened species under the

emergency provisions of the ESA. On November 20, 1990,

the Bureau, by letter, asked NMFS to concur in its deter-

mination that Friant contract renewals would not

adversely affect the winter-run salmon. On February 26,

1991, NMFS asked the Bureau to enter into formal Section

7 consultation regarding the effects of the Bureau’s overall

operation of the CVP on the winter-run salmon. On April

11, 1991, the Bureau agreed to a formal consultation on

the overall operation of the CVP. (App. 12, 215.)

After the Bureau agreed to consult with NMFS about

overall CVP operations, NMFS responded to the Bureau’s

earlier November 20, 1990 letter which had stated the

Bureau’s view that renewal of the Friant contracts would

not adversely affect the salmon. NMFS’ November 1, 1991

letter replied that “[w]hile we disagree with the Bureau’s

determination that renewal of the Friant contracts are not

likely to affect winter-run [salmon] adversely, for the

reasons discussed below, we do not believe a formal consul-

tation on the Friant contract renewals is necessary.” (App.

229, emphasis added.)

Nonetheless, NMFS’ letter went on to state: “How-

ever, the issue of delta exports is being addressed in our

ongoing consultation on the CVP .. . and we believe this will

allow us to address the adverse impacts from activities interre-

lated to the renewal of the Friant contracts.” (App. 230.)

NMFS’ letter also commented on provisions that the

(“FWS”); consultation regarding listed marine species is within

the jurisdiction of the National Marine Fisheries Service

(“NMFS”).

Bureau had added to the renewed Friant contracts which

allowed for modification based on future ESA require-

ments. It then summarized NMFS’ conclusion why no

formal consultation over the winter-run salmon was

required for Friant contract renewal: “Given that the

issue of Delta exports is being addressed in ongoing

consultations [on overall CVP operations] and that the

Bureau is conditioning renewed Friant contracts so they

may be modified to compensate for changes in delta

exports if needed, we see no need to consult on Friant

contract renewals at this time.” (App. 231.)

On February 14, 1992, NMFS issued its biological

opinion on the winter-run salmon pursuant to its consul-

tation with the Bureau on overall CVP operations. (App.

215.) The biological opinion covered the 1992 operation of

all CVP units, except the Friant Unit: “NMFS and the

Bureau agreed that the scope of this consultation would

include operations of all CVP units, except the Friant

Unit. Operations of the Friant Unit do not directly affect

winter-run salmon, and the indirect impacts of Friant

operations are addressed in the discussion of the Delta

Division operations.” (App. 216.) While the 1992 salmon

biological opinion concluded that CVP operations would

jeopardize the salmon, the opinion included a reasonable

and prudent alternative (“RPA”), that, in NMFS’ opinion,

would avoid jeopardy to the salmon. Significantly, nei-

ther this RPA nor any other provisions of the biological

opinion called for any changes in Friant operations or the

Friant renewal contracts. (App. 219-228.)

Plaintiffs sued the Bureau contending that its renewal

of the Friant water supply contracts violated the pro-

cedural requirements of Section 7 of the ESA. In a 1995

order, the district court agreed, holding that the Bureau’s

failure to pursue formal consultation with NMFS over

Friant contract renewals was an independent procedural

violation of Section 7 which invalidated all of the Friant

contracts. (App. 130.) Even though NMFS had declined to

consult with the Bureau over Friant contract renewals,

the court concluded that NMFS’ reasons for not consult-

ing “were not rationally related to [the Bureau’s] obliga-

tions under ESA,” (App. 130) and had no bearing on the

Bureau's “independent affirmative duty” to ensure that

contract renewal did not jeopardize species. (App. 129.)

On appeal, the Ninth Circuit affirmed. It held that the

Bureau had acted arbitrarily and capriciously in relying

upon NMFS’ refusal to consult since, “[t]he reason that

the NMFS gave for stating that a consultation was unnec-

essary was not supported by statute or regulation and

had no rational relationship to the Bureau’s independent

obligation to ensure that its proposed actions were not

likely adversely to affect the salmon.” (App. 20.) In short,

the Ninth Circuit concluded the Bureau acted arbitrarily

and capriciously in relying upon the advice of the federal

agency charged with implementation of the ESA. Neither

the district court nor the Ninth Circuit explained how the

Bureau was expected to pursue consultation in the face of

a refusal by NMFS to consult.

The third issue of national significance raised by the

present petition involves a split among the circuits

regarding the issue of whether the completion of a Section

7 consultation and a finding of no jeopardy by the Secre-

tary of Interior will moot a claim of procedural violation

of the consultation requirements of the ESA. On April 18,

1988, before renewing any of the Friant contracts, the

Bureau also asked the FWS for a list of land-based species

that might be present in the area affected by the Friant

renewal contracts. (App. 232.) Thereafter, as the district

court found, extensive informal consultation occurred

between the Bureau and FWS. (App. 113-114.)

On April 29, 1991, the Bureau issued a draft biological

assessment for Friant contract renewals, which was sup-

plemented on June 14, 1991. On May 22, 1991, the Bureau

asked FWS to formally consult on the issue of contract

renewal. (App. 114.) Thereafter, on October 15, 1991, the

FWS issued its biological opinion which concluded that

renewal of the Friant contracts would not jeopardize any

listed land-based species. (App. 114.) By the date of FWS’

“no jeopardy” biological opinion, the Bureau had

renewed 10 of the 28 Friant Unit water supply contracts.

(App. 114.)

In its 1995 order, the district court concluded that

FWS’ later issuance of a “no jeopardy” opinion in 1991

did not moot plaintiffs’ claims of a procedural violation of

Section 7 of the ESA. (App. 122.) On appeal, the Ninth

Circuit concurred, holding that the process of consultation

protects against the risk of a substantive ESA violation

and ensures that environmental concerns will be factored

into the FSA decision making process as instructed by

Congress. (App. 24.) Notably, neither the district court

nor the Ninth Circuit explained why plaintiffs in the

present case could not simply have sued the Secretary of

the Interior if they believed his biological opinion regard-

ing Friant contract renewal was substantively defective.

(See Bennett v. Spear, 520 U.S. 154 (1997).) The Ninth

Circuit’s decision is in conflict with the opinion of the

Tenth Circuit in Southern Utah Wilderness Alliance v. Smith,

110 F.3d 724 (10th Cir. 1997) and the opinion of the Fifth

Circuit in Sierra Club v. Glickman, 156 F.3d 606 (5th Cir.

1998), both of which hold that the subsequent completion

of consultation under Section 7 of the ESA moots claims of

a procedural violation of the consultation requirements of

the Act.

ARGUMENT

1. The CVPIA Conflicts with and Preempts State Law

Relating to the Release of Water from Friant Dam

The Court of Appeals erred in holding that the appli-

cation of California Fish and Game Code Section 5937 to

the operation of Friant Dam is not preempted by federal

law. Section 8 of the Reclamation Act of 1902 requires

compliance with state law relating to water, unless the

state law conflicts with congressional directives: “A State

limitation or condition on the federal management or

control of a federally financed water project is valid

unless it clashes with express or clearly implied congres-

sional intent or works at cross-purposes with an impor-

tant federal interest served by the congressional scheme.”

(United States v. State of California Water Resources Control

Board, 694 F.2d 1171 (9th Cir. 1982), emphasis added.)

More recently as this Court has written: “A state law is

also preempted if it interferes with the methods by which

the federal statute was designed to reach [its] goal.”

(International Paper Co. v. Ouellette, 479 U.S. 481, 494

(1987).) The provisions of the CVPIA relating to the

release of water from Friant Dam create such a conflict

with Fish and Game Code Section 5937 and therefore

preempt its application. Furthermore, application of Sec-

tion 5937 to Friant Dam would work at cross-purposes

with the federal interest in its largest water project and

would be contrary to the congressional scheme for man-

agement of that project.

This case involves two long continued threads of

water law. The first is the general rule, as interpreted by

this Court in California v. United States, 438 U.S. 645

(1978), that through the federal-state relationship regard-

ing water usage “runs the consistent thread of purposeful

and continued deference to State water law by Congress.”

(Id. at 653.) In that decision, the Court wrote that because

of this deference to state water law, a state can impose

limits on water usage from a federal reclamation project

to the extent that such conditions are not “inconsistent

with congressional provisions authorizing the project in

question.” (Id. at 674.)

The second thread, as evidenced by this Court’s ear-

lier decisions, the language and legislative history of the

Friant Unit, and the CVPIA, is of not requiring - or even

allowing — fishery releases from Friant Dam. The conflict

between these two federal policies is resolved by the

CVPIA, comprehensive legislation adopted by Congress

in 1992, which preempts the application of Section 5937 to

Friant Dam. The Ninth Circuit’s opinion ignores this con-

gressional resolution, eviscerates the distinction articu-

lated in California v. United States and creates a precedent

where Congress can virtually never preempt state water

law.

(a) The Language of the CVPIA Expresses Con-

gress’ Intent to Preclude the Release of Water

From Friant Dam

The Ninth Circuit’s decision ignores the broad statu-

tory purposes of the CVPIA set forth in Section 3402 of

the Act (106 Stat. 4706):

(a) to protect, restore, and enhance fish,

wildlife, and associated habitats in the Central

Valley . . . of California;

(b) to address impacts of the Central Val-

ley Project on fish, wildlife and associated habi-

tats;

(f) to achieve a reasonable balance among

competing demands for use of Central Valley

Project water, including the requirements of fish

and wildlife, agricultural, municipal and indus-

trial and power contractors.

Given the breadth of these purposes, it is evident that

Congress’ intent was to set forth a statutory framework

that would integrate the operation of the CVP with the

needs of the environment. This framework distinguishes

the operation of Friant Dam from the rest of the CVP, and

provides a separate program “to address fish, wildlife

and habitat concerns” on the San Joaquin River between

Friant Dam and the Mendota Pool (where Sacramento

River water pumped from the Sacramento-San Joaquin

Delta is discharged to replace San Joaquin River water

diverted at Friant). (See Dugan v. Rank, 372 U.S. 609,

612-13 (1963).)

In Section 3406(b) of the CVPIA, Congress laid out a

comprehensive fish and wildlife restoration program

intended to achieve the broad protective purposes of the

Act set forth in Sections 3402(a), (b), and (f). Congress

described some 23 separate fish and wildlife restoration

activities including: a program to double the number of

anadromous fish in Central Valley streams by the year

2002 (§ 3406(b)(1)); the dedication of 800,000 acre-feet of

water to fish and wildlife purposes (§ 3406(b)(2)); and

programs to mitigate fishery impacts at the CVP’s Tracy

and Contra Costa Canal pumping plants (§ 3406(b)(14),

(15)) and (§ 3406(b)(5)). All of these measures are subject

to the requirement that they shall: ” . . . meet all obliga-

tions under State and Federal law, including but not

limited to the Federal Endangered Species Act... , and

all decisions of the California State Water Resources Con-

trol Board .... ” (§ 3406(b).)

However, when it came to achieving the broad fish,

wildlife and habitat restoration purposes of the Act by

means of flow releases from Friant Dam, Congress made

an exception. Thus, for example, when Congress manda-

ted a doubling in the natural production of anadromous

fish for the CVP (§ 3406(b)(1)), it also carved out an

exception which made the requirement inapplicable to

the San Joaquin River between Friant Dam and the Men-

dota Pool.? In providing for such an exception, Congress

2 The exception to the anadromous fish doubling goal

States:

“Provided, that this goal shall not apply to the San

Joaquin River between Friant Dam and the Mendota

Pool, for which a separate program is authorized under

removed Friant Dam from a series of measures requiring

the Secretary of the Interior to “modify Central Valley

Project operations” to provide flow releases for

anadromous fish. (See §§ 3406(b)(1)(A) and (B).)

Congress’ determination to treat the San Joaquin

River below Friant Dam differently than other streams

was expressed even more clearly in Section 3406(c) of the

Act. There, Congress sought to achieve the CVPIA’s

broad purposes by: (1) directing the Secretary to develop

a reasonable, prudent and feasible “comprehensive plan”

that would address “fish, wildlife, and habitat concerns

on the San Joaquin River,” including streamflow; (2) bar-

ring the Secretary from making releases for the restora-

tion of flows as a measure to implement the CVPIA

absent a further Act of Congress; and (3) establishing a

system of monetary surcharges in lieu of flow releases,

with the surcharge to be paid to a fishery Restoration )

Fund (§ 3407). Notably, Section 3406(c) contains no man-

date such as that found in Section 3406(b) (which is

applicable to other portions of the CVP) regarding com-

pliance with state law. Instead, Section 3406(c) prohibits

the release of water from Friant Dam absent a further act

of Congress. This prohibition is completely consistent

with the long-standing expressions of congressional

intent regarding operation of the Friant Unit.

If Congress had intended for Section 5937 to apply to

the operation of Friant Dam it could have easily done so

by simply adding Section 3406(c) to the list of restoration

subsection 3406(c) of this title.” (§ 3406(b)(1), emphasis

added.)

———————

activities described in subsection (b), or by moving the

“compliance with State law” provisions of subsection (b)

to the beginning of Section 3406 so that it would be

applicable to all of subsection 3406 including subsection

these things, and the Ninth Circuit’s editorial comments

on how Congress should have written Section 3406(b) if it

wanted to preempt state law completely ignore this dis-

tinction. (App. 33.)

The Ninth Circuit’s conclusion hinges on its narrow

reading of the language “as a measure to implement this

title,” which is used in Section 3406(c)(1). In focusing

solely on the language of the CVPIA, the Ninth Circuit

failed to apply this Court’s preemption test: “To discern

Congress’ intent we examine the explicit statutory lan-

guage and the structure and purpose of the statute.”

(Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138 (1990),

emphasis added.) Indeed, the primary difficulty with that

narrow reading is that it ignores the very broad nature of

the CVPIA. The purposes of “this title,” set forth in

Section 3402 of the Act, are “to protect restore and

enhance fish and wildlife and their associated habitats in

the Central Valley;” “to address impacts of the CVP on

fish;” and “to achieve a reasonable balance among com-

peting demands for use of CVP water.” (§§ 3402(a), (b),

and (f).) Moreover in Section 3406(c) Congress acted to

address “fish, wildlife and habitat concerns” on the lower

San Joaquin. Congress used the CVPIA to provide a

framework for comprehensive environmental protection

by the CVP including protection on the San Joaquin River

below Friant Dam. Reading the phrase “this title” nar-

rowly is improper and is inconsistent with this broad

purpose.

Second, Congress did not repeal any of the Govern-

ment’s ESA obligations on the San Joaquin River. Rather,

it decided that any fishery obligations of the Friant pro-

ject will be met through the development of a reasonable,

prudent and feasible “comprehensive plan” and through

the collection and disbursement of a monetary surcharge

to be imposed on the Friant water users and deposited in

the “Restoration Fund” established by the CVPIA.

(§ 3406(c)(1).) Under the terms of Section 3407, monies in

the Restoration Fund are to be used to carry-out the

fishery restoration activities mandated by the CVPIA in

cooperation with the Department of Fish and Game.

3 Another anomaly of the Ninth Circuit’s reasoning is that

to be consistent it implicitly acknowledges that the CVPIA does

preempt another provision of California law. California Water

Code Section 11226 provides:

Friant Dam shall be constructed and used primarily

for improvement of navigation, flood control, and

storage and stabilization of the water supply of the

San Joaquin River, for irrigation and domestic use,

and secondarily for the generation of electric power

and other beneficial uses. (Emphasis added.)

This statutory provision prioritizes irrigation and domestic use

above “other” beneficial uses of Friant Dam such as

environmental uses. Unless the CVPIA preempts this provision

of California law, irrigation and domestic use would continue to

have a priority over environmental uses under State law.

(b) The Legislative History of the CVPIA Con-

firms Congress’ Preemptive Intent Regarding

Section 5937

The legislative history of the CVPIA, which is

ignored by the Ninth Circuit, strongly supports an inter-

pretation that Congress intended the Act to preempt state

law relating to the release of water from Friant Dam. An

early version of the CVPIA specifically required compli-

ance with Section 5937. (App. 244.) This requirement was

omitted in the final version of the CVPIA.

Courts do consider and give weight to the “disap-

pearance” of proposed language in later versions or

amendments of a bill where an express or implied expla-

nation of the reasons for the change can be found in, or

derived from, the legislative history. (See United States v.

St. Paul, M. & M. R. Co., 247 U.S. 310, 318-19 (1918).)

Indeed, this Court has held that “where Congress

includes limiting language in an earlier version of a bill

but deletes it prior to enactment, it may be presumed that

the limitation was not intended.” (Russello v. U.S., 464

U.S. 16, 23-24 (1983) citing Arizona v. California, 373 U.S.

546, 580-81 (1963).) Further, in John Hancock Mutual Life

Insurance Company v. Harris Trust & Sav. Bank, 510 U.S.

101, 101 n.12 (1993), the Court made clear that while it

was “directed by” the words of a bill finally enacted,

Congress’ failure to pass a proposed provision “counsels

against” reading a different provision to imply what was

excluded by the unenacted provision. The Ninth Circuit's

ruling is inconsistent with these decisions.

In sum, the CVPIA is simply the latest congressional

statement regarding the operation of Friant Dam in a

continuum which stretches back to the 1930’s and

beyond. At no point in this continuum has Congress ever

directed that Friant Dam should be operated to restore

fisheries between the Dam and Mendota Pool. To the

contrary, it was recognized by Congress, and this Court,

that an effort to do so would impair the congressionally

intended purpose of Friant Dam and would not be in the

public interest. Section 3406(c) of the CVPIA is simply the

most recent expression of this long-continued congres-

sional thread.

2. This Court Should Grant Review to Resolve a Con-

flict Among the Circuits on Mootness and Subse-

quent Compliance with ESA Requirements

The Ninth Circuit concludes that procedural viola-

tions of the ESA are not necessarily mooted through

subsequent procedural compliance. It made this ruling

despite the fact that: (1) FWS issued a no jeopardy biolog-

ical opinion; and (2) NMFS issued a winter-run salmon

biological opinion which found that no changes in Friant

operations were needed for RPAs that would avoid jeop-

ardy to the salmon. Ignoring the decisions of the two

federal agencies charged with primary responsibility

under the ESA, the Ninth Circuit nonetheless concluded

that, regardless of substantive issues or results, the pro-

cess of consultation in and of itself is essential.4

* The Ninth Circuit concluded that Southern Utah

Wilderness Alliance is distinguishable because it involved a

The Ninth Circuit also speculates, without support,

that the Friant contracts might have been modified if the

biological opinion had been rendered before the contracts

were executed. This reasoning squarely conflicts with

Southern Utah Wilderness Alliance v. Smith, 110 F.3d 724

(10th Cir. 1997) and Sierra Club v. Glickman, 156 F.3d 606

(5th Cir. 1998).

The Tenth Circuit’s holding in Southern Uta Wilder-

ness Alliance is materially indistinguishable from this

case. There plaintiff contended that consultation should

have occurred prior to, rather than after, agency action.

The Tenth Circuit held that since consultation had subse-

quently been completed, plaintiff’s action seeking consul-

tation was moot:

Indeed, SUWA does not explain how an

injunction ordering another round of consulta-

tion would provide any meaningful relief.

SUWA does not show any reasonable likelihood

that such an order would result in any changes

to the Schedule, or that either the BLM or the

FWS would change its position on the Schedule.

(110 F.3d at 728.)

Thus, Southern Utah Wilderness Alliance holds that a pro-

cedural claim of improper agency action before comple-

tion of a Section 7 consultation is rendered moot, as a

matter of Article III jurisdiction, once the consultation is

history of consultation between the action agency and the FWS.

The Ninth Circuit ignores the district court's finding that there

was “extensive informal consultation” between the FWS and the

Bureau throughout 1990 and 1991. (App. 113-114.)

subsequently completed. (Id. at 727-729.)> Thus, while the

Ninth Circuit concluded that subsequent procedural com-

pliance cannot moot a procedural violation of Section 7,

the Tenth Circuit in Southern Utah held that it can and

that a court lacks Article III jurisdiction to entertain such

a moot claim.

The Fifth Circuit’s decision in the recent case of Sierra

Club v. Glickman, supra, is also in conflict with the Ninth

Circuit’s holding in this case. In Glickman, the Sierra Club

filed a motion to dismiss the United States Department of

Agriculture’s (“USDA”) appeal on the grounds that it

was moot. The Sierra Club had claimed the USDA had

breached its Section 7 duties by making certain contract

payments to farmers prior to engaging in formal consul-

tation. Subsequently, the USDA completed its consulta-

tion obligations. The Fifth Circuit held that because there

had been subsequent compliance with the consultation

requirement of Section 7 the issue was moot. (156 F.3d at

619.) Glickman and the present case are indistinguishable.

In both, the federal action agencies remedied any non-

compliance by completing their consultation require-

ments, yet the Fifth and Ninth Circuits reach opposite

results.

5 Southern Utah also recognizes the futility of “ordering

another round of consultation” where the plaintiff has utterly

failed to show that such an order would result in any changes of

position by FWS. (110 F.3d at 728.) Similarly, in the case at

bench, it is unclear how “another round of consultation” will

result in any change of position by FWS or NMFS when the

wildlife agencies have already decided that contract renewal

causes no jeopardy and need not be modified for RPAs that

avoid jeopardy.

3. The Ninth Circuit Erred in Ruling That the Bureau

Violated its ESA Obligations by Accepting NMFS’

Refusal to Consult

In the present case, the Bureau determined that

Friant contract renewals were too remote to adversely

affect the Sacramento River winter-run salmon. It asked

NMFS to concur in that conclusion in 1990, shortly after

the winter-run salmon was formally listed as a “threat-

ened” species. NMFS did not agree with the Bureau's

determination that the Friant contract renewals were too

remote to adversely affect the salmon. However, NMFS

declined to consult with the Bureau over impacts to the

salmon in a consultation over Friant contract renewals.

(App. 229.) Instead, NMFS told the Bureau that it would

consult on salmon impacts in the formal consultation

which NMFS had already initiated with the Bureau on

overall CVP operations.

The Ninth Circuit court reviewed these facts and

concluded that: ” . . . the Bureau was arbitrary and

capricious when it relied on the NMFS’ view that a con-

sultation was not necessary, despite NMFS’ refusal to

provide the required concurrence. By relying on the

NMFS in this case, the Bureau did not meet its indepen-

dent responsibilities under the ESA.” (App. 20.)

The Ninth Circuit’s decision is nonsensical in this

regard. Who was the Bureau supposed to consult with

about Friant contract renewals if NMFS —- the wildlife

agency with jurisdiction over the winter-run salmon -

refused to consult? Should the Bureau have sued its sister

agency, NMFS, to force it to consult? Or was it more

reasonable to conclude that the Bureau’s obligation to

pursue a consultation about Friant contract renewal

ended when NMFS refused to consult?

To compound the problem, the Ninth Circuit appar-

ently failed to understand that NMFS’ refusal to consult

did not mean there would be no consultation about CVP

impacts on the winter-run salmon. Instead, what was at

issue was simply where the consultation would occur.

NMFS declined to consult about Friant contract renewal

because it decided that it made more sense to consider

the impact of Friant operations on the salmon as part of an

already initiated consultation involving overall CVP

operation. This was an eminently reasonable decision.

The Ninth Circuit concluded that the Bureau failed to

discharge its “independent responsibilities” to avoid

jeopardizing the salmon. (App. 20.) In so doing, it missed

the point of NMFS’ decision and the Bureau’s response to

it. Because NMFS believed that Friant operations affect

Delta exports, and because Delta exports adversely affect

the salmon, any sensible consultation over the salmon

should include Delta exports. In short, NMFS’ preference

to consult with the Bureau in an overall CVP consultation

rather than in one limited to Friant contract renewal

made practical and scientific sense. In a highly technical

consultation over the operation of the largest reclamation

project in the nation, the Ninth Circuit should have

deferred to NMFS’ judgment, as the Bureau did, as to

how best to structure and organize the consultation.

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4. The Ninth Circuit Erred in Concluding the Bureau’s

Consultation with FWS was Untimely

The Ninth Circuit ruled that the Bureau violated

Section 7(d) of the ESA by executing the Friant contracts

prior to the completion of a biological opinion. (App. 23.)

This interpretation of Section 7 is erroneous for several

reasons. First, the Ninth Circuit wrongly assumes that

Section 7(d) is an authorization of agency action that oth-

erwise would be prohibited. It read Section 7 as a general

prohibition against any agency action before completion

of a biological opinion, and then interpreted Section 7(d)

to carve out an exemption to the general prohibition,

allowing certain types of “non-irreversible” actions which

can go forward after, but not before, formal consultation

is initiated. This turns Section 7(d) on its head.

Section 7(d) is not an authorization but a prohibition.

The heading of Section 7(d) describes it as a “Limitation

on commitment of resources.”® Indeed, Section 7(d) is

properly interpreted as a prohibition or limitation on the

types of agency action that can occur after consultation

begins. The Ninth Circuit essentially inverted the func-

tion and role of Section 7(d) in the statutory scheme by

presuming that Section 7(d) is a narrow authorization

enacted against the backdrop of a general prohibition

6 Section 7(a)(4) of the ESA, 16 U.S.C. Section 1536(a)(4),

also refers to the “limitation on the commitment of resources as

described in subsection (3) of this section.” (Emphasis added.)

The Ninth Circuit in Sierra Club v. Marsh, 816 F.2d 1376, 1389 (9th

Cir. 1987) also described Section 7(d) as a “statutory

prohibition.” (See also 50 C.F.R. § 402.09 (referring to Section

7(d) limitations on irreversible commitments as a “prohibition”

in force during the consultation process).)

against agency action prior to the initiation of consulta-

tion. The more natural reading of the statute is that

Section 7(d) is a limitation that applies after formal con-

sultation begins, and that it imposes restrictions on

agency action that do not exist before the initiation of

consultation. !

“Consultation” for purposes of Section 7(d) should

not be limited to formal consultation. Before an agency

makes a request for formal consultation pursuant to 50

C.F.R. Section 402.14(c), it is still engaged in “consulta-

tion” under Section 7. For example, under 50 C.F.R. Sec-

tion 402.12(c) of the Section 7 regulations, consultation

begins when an agency requests a list of species that may

be present in the proposed action area. This is so because

50 C.F.R. Section 402.12(d)(1) provides that if the wildlife

agency responds to this request by stating that no species

are present in the proposed action area, “further consulta-

tion is not required.” (Emphasis added.) “Further consul-

tation” means that consultation must have begun as a

result of the initial request for a list of species.” (See also

Bay’s Legal Fund v. Browner, 828 F. Supp. 102, 106 (D.

Mass. 1993) (noting that EPA “initiated this consultation

with the NMFS requesting information concerning the pres-

ence of endangered species in the proposed project area”).

Emphasis added.) In Bay’s Legal Fund, the federal agency:

(1) began Section 7 consultation in 1986 by requesting a

7 The regulations distinguish between actions that trigger

the “initiation” of consultation, see Section 402.14(c) and the

“termination” of consultation (see Section 402.14(1)), so the

reference to “further consultation” in Section 402.12(d)(1) is not

haphazard or unintentional.

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list of species in the project area (id.); (2) completed the

functional equivalent of a biological assessment in 1988

(id. at 106, 110, and 111 n.20); (3) let contracts for con-

struction and began construction in 1990 (id. at 106); (4)

first requested formal consultation with the wildlife

agency in 1993 (id. at 107); and (5) as of the date of the

opinion (1993), still had not received a biological opinion

on the project (id. at 107, 111). The district court in Bay’s

Legal Fund, supra, permitted the construction activities to

proceed, and rejected the plaintiffs’ ESA procedural

claims even though construction had begun before formal

consultation had been initiated.

In this case, the Bureau requested a list of species

present in the action area on April 13, 1988. (App. 232.)

Consequently, because Section 7(d) refers only to the

initiation of “consultation” and because the regulations

provide that consultation begins on the date a species list

is requested, consultation in this case, for purposes of

Section 7(d), began on April 13, 1988, not May 22, 1991, as

the Ninth Circuit concluded. (App. 21.)

5. The Ninth Circuit Erred in Ruling That Rescission

of the Friant Renewal Contracts was the Sole Avaii-

able Remedy

The Ninth Circuit’s decision ignores this Court’s rul-

ings in TVA v. Hill, 437 U.S. 153 (1978); Weinberger v.

Romero-Barcello, 456 U.S. 305 (1982); and Amoco Production

v. Village of Gamble, 480 U.S. 531 (1987). Contrary to the

Supreme Court’s findings in each of those cases, the

Ninth Circuit focused on the process of consultation and

inexplicably ignored the substantive issue of its ability to

preserve the contracts and resolve the procedural flaw. In

Romero-Barcello, this Court concluded that the purpose of

the Clean Water Act: “would not be undermined by

allowing the statutory violation to continue during the

permit application process because the . . . [discharge]

was not polluting the water. (456 U.S. at 314-315.) The

First Circuit had erroneously focused on the integrity of

the permit process rather than on the integrity of the

Nation’s waters.” (480 U.S. at 542-543.)

Amoco Production reached the same conclusion: “Like

the First Circuit in Romero-Barcello, the Ninth Circuit erro-

neously focused on the statutory procedure rather than

on the underlying substantive policy the process was

designed to effect — preservation of subsistence

resources.” (480 U.S. 544.) Both of those cases distin-

guished this Court’s seminal ESA opinion in TVA v. Hill,

supra, 457 U.S. 305. In Hill “only an injunction could

vindicate the objectives of the Act [ESA].” (456 U.S. 314.)

Here, rescission of the contracts was not the only way

the purposes of the ESA could be effectuated. Simply put,

the Ninth Circuit's judgment in this case is the only

decision on record which holds that the remedy for a

procedural violation of the ESA must, in all cases and

under all circumstances, ensure that a biological opinion

issues prior to the agency action in question. If that were

in fact the rule, then the remedy to be applied automat-

ically in all cases in which a procedural ESA violation is

found would be rescission of the lease, contract or other

action agency authorization in question. Amoco Production

and Romero-Barcello hold that is not the law.

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The cases involving procedural violations of the ESA

have consistently focused on whether or not the offend-

ing action will alter the physical status quo pending

compliance with the ESA's procedural requirements. (See,

e.g., TVA v. Hill, supra, 437 U.S. 153, 172; Thomas v. Peter-

son, supra, 753 F.2d 754; Sierra Club v. Marsh, 816 F.2d 1376

(9th Cir. 1987); Pacific Rivers Council v. Thomas, supra, 30

F.3d 1050, 1057.) Here, unlike Hill, execution of the long-

term renewal contracts did not result in a change in the

physical status quo. Indeed, the district court so con-

cluded. (App. 104.) The contract renewal accomplishes

nothing new, nor more extensive, nor other than that

contemplated when the original Friant water service con-

tracts were executed. In the circumstances of this case,

rescinding the renewed water supply contracts of the

Friant Intervenors thus does not serve the species protec-

tive purpose of the ESA. Accordingly, the Ninth Circuit's

holding that the Bureau violated Section 7 procedurally,

and that the proper remedy for such a violation was

contract rescission, should be reversed.

Respectfully submitted,

Law Offices OF Best Best & Kriecer LLP

Gary W. SAWYERS GreGcory K. WILKINSON

Gary W. SAWYERS Eric L. GARNER

MELANiE J. ALDRIDGE 3750 University Avenue

575 East Alluvial Avenue P.O. Box 1028

Suite 101 Riverside, CA 92502

Fresno, CA 93720 (909) 686-1450

(209) 438-5656

APPENDIX TABLE OF CONTENTS

FEN MPRCUE SAU oie bic ukcs cons cc wehces App

Some Seen net GOS APNE. os ie sis i oe eas ween App

EUee Baeeeae COURT CONE 8 6 ieee cca ceed App.

Order Denying Rehearing...............2.200: App.

Central Valley Project Improvement Act....... App.

Reclamation Act of 1902,

MES 6 chee thi tats an Noon skeeeneey App.

Endangered Species Act,

ese Oe a USS nbc tcee cua cub ou dalom App.

1992 National Marine Fisheries Service Biological

EE beck Kec d se ecbens cas hbiciculveiaete App.

November 1, 1991 National Marine Fisheries

a inn ci ria Rnd AS CaS ka leks va cea ve 8s App.

April 13, 1988 Bureau of Reclamation Memoran-

NU ood oy v ke Fh as Fee hs dees es App.

App. 1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NatTurRAL Resources DereNnse COuNCcIL;

Trout UNumitep oF CALIFORNIA; Bay

INSTITUTE OF SAN FRANCISCO; CALIFORNIA

NaturRAL Resources FEDERATION;

CALIFORNIA SPORTFISHING PROTECTION

ALLIANCE; CALIFORNIA TROUT; FRIENDS

: OF THE JRIVER; NORTHERN CALIFORNIA

Guipes AssociaATION; Pacific Coast

i FEDERATION OF FISHERMEN’S No. 97-16030

ASSOCIATIONS; SAN JOAQUIN RAPTOR

. Rescue CENTER; SIERRA CLUB; D.C. No.

STANISLAUS AUDUBON Society, INc.; CV 88-1658

Unitep ANGLERS OF CALIFORNIA; LKK

CALIFORNIA StriPpED Bass ASSOCIATION; OPINION

NationaL AUDUBON SOCIETY,

Plaintiffs-Appellees,

Davip G. Houston,

Defendant,

and

Lower Tue River IRRIGATION DisTRICT;

PORTERVILLE IRRIGATION DisTRICT;

SAUCELITO IRRIGATION District; STONE

CorrAL IRRIGATION District; TEAPOT

Dome Water District,

Defendants-Intervenors-

Appellants.

i ee ee ee ee ee a a i

RLS

OEE RM EER SE VEE I OES OEIC EEE ER LOU REY EEE SPE PSY INE

App. 2

NaturAL Resources DEFENSE

Councit; Trout UNLIMITED OF

CauirorRNiA; Bay INsTITUTE OF SAN

Francisco; CALIFORNIA NATURAL

Resources FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIENDS OF THE

River; NortHERN CALIFORNIA GUIDES

AssociaATION; Pactric Coast

FEDERATION OF FISHERMEN’S

ASSOCIATIONS; SAN JOAQUIN RapToR

Rescue CENTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INC.;

Unirep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION;

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellees,

Davip G. Houston,

Defendant,

and

ORANGE Cove IRRIGATION DisTRICT;

DeELANO-EARLIMART IRRIGATION

District; Exerer IRRIGATION DisTRICT;

IVANHOE IRRIGATION DrsTRICT;

LINDMORE IRRIGATION DisTRICT;

LinDsAY-STRATHMORE IRRIGATION

District; TERRA BELLA IRRIGATION

District,

Defendants-Intervenors-

Appellants.

a a a ee ee ee a

No. 97-16041

D.C. No.

CV 88-1658 LKK

;

san

ee ete Pe ar ros Paes ee

pa, eel aie Hae dat em RY,

ii oe

healed api bas Hable peat acon

App. 3

NaturRAL Resources DEFENSE

Councit; Trout UNLIMITED OF

CALIFORNIA; Bay INSTITUTE OF SAN

FRANCISCO; CALIFORNIA NATURAL

RESOURCES FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIENDS OF THE

River; NORTHERN CALIFORNIA GUIDES

AssociaTIONn; Paciric Coast

FEDERATION OF FISHERMEN’S

AssoOclATIONS; SAN JOAQUIN RAPTOR

Rescue CENTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INC.;

Unitep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION;

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellees,

Davip G. Houston,

Defendant,

sid aad Seat eat Neat at Seat eit ee eal et al att ea al al ee ae Seat AE A NE

and

FriANt Water Users AUTHORITY,

Defendant-Appellant.

No. 97-16042

D.C. No.

CV 88-1658 LKK

App. 4

NaturAt Resources DerEeNse

Councit; Trout UNLIMITED OF

CauiFoRNIA; Bay INsTITUTE OF SAN

FRANCISCO; CALIFORNIA NATURAL

Resources FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIENDS OF THE

River; NorTHERN CALIFORNIA GUIDES

AssociaTION; Pacific Coast

FEDERATION OF FISHERMEN’S

ASSOCIATIONS; SAN JOAQUIN RAPTOR

Rescue CeNTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INc.;

Unitep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION;

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellees,

Davip G. Houston,

Defendant,

and

Mapera IRRIGATION District;

CHOWCHILLA Water District,

Defendants-Intervenors-

Appellants.

ee ee ee ee ee ee ee ee ee ee ee ee ee ee ae ee ee ee ee”

No. 97-16043

D.C. No.

CV 88-1658 LKK

™”

App. 5

NaTtuRAL Resources DEFENSE

Councit; TROUT UNLIMITED OF

CALIFORNIA; Bay INSTITUTE OF SAN

FRANCISCO; CALIFORNIA NATURAL

RESOURCES FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIENDS OF THE

River; NortTHERN CALIFORNIA GUIDES

AssociaATION; Paciric Coast

FEDERATION OF FISHERMEN’S

ASSOCIATIONS; SAN JOAQUIN RAPTOR

RescurE CENTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INC.;

Unirep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellees,

Davip G. Houston,

Defendant,

and

ArvIN-EpDIsOoN WATER STORAGE

District; SHAFTER-Wasco IRRIGATION

District; SOUTHERN SAN JOAQUIN

MunicipaL Utiry District,

Defendants-Intervenors-

Appellants.

Bs eee tie “nat Wat eat Weal ast Mgt ae it at Sat ae ent a? at A ad ea Sa et Senet PP OE

No. 97-16044

D.C. No.

CV 88-1658 LKK

App. 6

NaturAL Resources DEFENSE

Councit; Trout UNLIMITED OF

CALIFORNIA; Bay INSTITUTE OF SAN

FRANCISCO; CALIFORNIA NATURAL

RESOURCES FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIENDS OF THE

River; NorTHERN CALIFORNIA GUIDES

ASSOCIATION; PaciFic Coast

FEDERATION OF FISHERMEN’S

ASSOCIATIONS; SAN JOAQUIN RAPTOR

Rescue CENTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INC.;

Unitep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION;

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellees,

No. 97-16045

D.C. No.

CV 88-1658 LKK

Davip G. Houston,

Defendant,

and

TuLare IRRIGATION DistRICT,

Defendant-Intervenor-

Appellant.

tl i i ee ee a ee

App. 7

Natura. Resources DEFENSE

Counci.; Trout UNLIMITED OF

CaurorNiA; Bay InstiTuTE OF SAN

FRANCISCO; CALIFORNIA NATURAL

Resources FEDERATION; CALIFORNIA

SPORTFISHING PROTECTION ALLIANCE;

CALIFORNIA TROUT; FRIinNDS OF THE

River; NortHEeRN CALIFORNIA GUIDES

AssociaTION; Pacific Coast

FEDERATION OF FISHERMEN’S

AssociaTIONs; SAN JOAQUIN RAPTOR

Rescue CENTER; SIERRA CLUB;

STANISLAUS AUDUBON Society, INC.;

Unirep ANGLERS OF CALIFORNIA;

CALIFORNIA STRIPED Bass ASSOCIATION;

NATIONAL AUDUBON SOCIETY,

Plaintiffs-Appellants,

No. 97-16173

D.C. No.

CV 88-1658 LKK

Vv.

RoGeR Patterson as Regional

Director of the U.S. Bureau of

Reclamation; Bruce Bassitt; FRIANT

Water Users AUTHORITY,

Defendants-Appellees,

and

Lower Tute River IRRIGATION

District; PORTERVILLE IRRIGATION

District; SAUCELITO IRRIGATION

District; STONE CorRAL IRRIGATION

District; Teapot Dome WATER

District,

Defendants-Intervenors-

Appellees.

RS Nd i STI SBE

App. §

Appeals from the United States District Court

for the Eastern District of California

Lawrence K. Karlton, District Judge, Presiding

Argued and Submitted

December 8, 1997 — San Francisco, California

Filed June 24, 1998

Before: Otto R. Skopil, Jr., Dorothy W. Nelson, and

A. Wallace Tashima, Circuit Judges.

Opinion by Judge Tashima

COUNSEL

Gregory K. Wilkinson, Best, Best & Krieger, LLP, River-

side, California, for defendant-appellant and appellee

Friant Water Users Authority, and for defendants-inter-

venors-appellants Lindmore Irrigation District, Lindsay-

Strathmore Irrigation District, Terra Bella Irrigation Dis-

trict, Exeter Irrigation District, Ivanhoe Irrigation District,

Tulare Irrigation District, Lower Tule River Irrigation Dis-

trict, Saucelito Irrigation District, Delano-Earlimart Irri-

gation District, Teapot Dome Water District, Arvin-Edison

Water Storage District, Southern San Joaquin Municipal

Utility District, Shafter-Wasco Irrigation District, Porter-

ville Irrigation District and Stone Corral Irrigation Dis-

trict.

Philip F. Atkins-Pattenson, Sheppard, Mullin, Richter &

Hampton, LLP, San Francisco, California, for plaintiffs-

appellees and cross-appellants.

Michael Victor Sexton, Minasian, Spruance, Baber, Meith,

Soares & Sexton, LLP, Oroville, California, for defendant-

intervenor-appellant Orange Cove Irrigation District.

App. 9

Denslow Green, Madera, California, for defendants-

appellants Chowchilla Water District and Madera Irriga-

tion District.

Lois J. Schiffer, Assistant Attorney General, Robert L.

Klarquist, Department of Justice, Environment & Natural

Resources Division, Washington, D.C., for defendants-

appellees Roger Patterson and Bruce Babbitt.

Daniel E. Lungren, Attorney General of California, Cliff-

ord T. Lee and Linus Masouredis, Deputy Attorneys Gen-

eral, San Francisco, California, for amici curiae State of

California and California State Water Resources Control

Board.

OPINION

TASHIMA, Circuit Judge:

Various irrigation and water districts (Non-federal

Defendants), that rely on water from the Friant dam,

appeal the district court’s summary judgment decision

that the Bureau of Reclamation (Bureau or Federal Defen-

dant), violated the Endangered Species Act (ESA) by

renewing water contracts prior to completing required

endangered species consultations. These defendants also

appeal the district court's conclusion that Section 8 of the

Reclamation Act, 43 U.S.C. § 383, mandates compliance

with Section 5937 of the California Fish and Game Code.

Various environmental groups led by the National

Resources Defense Council (Plaintiffs), cross-appeal the

district court’s summary judgment decision that the

ph MM i

App. 10

Bureau was not required to comply with National Envi-

ronmental Policy Act (NEPA) and appeal the dismissal of

the Section 8/Section 5937 claim as unripe.

We affirm the district court’s holding that the ESA

was violated and its decision to rescind the contracts at

issue. We remand for a determination on the Section

8/Section 5937 claim.

BACKGROUND

The Central Valley Project (CVP) is a multi-unit recla-

mation project administered by the Bureau. The Friant

dam unit of the CVP was built on the San Joaquin River

by the Bureau in the 1940s. Prior to construction of the

dam, the San Joaquin River met the Sacramento River at

the Sacramento-San Joaquin Delta, where they then

flowed out to the Pacific Ocean. Since the time that the

dam was completed, the Friant unit has impounded the

San Joaquin River water behind the Friant dam and

diverted the water to surrounding irrigation districts.

This impoundment and diversion leaves a dry stretch of

San Joaquin riverbed.

In the late 1940s, the Non-federal Defendants!

entered into 40-year Friant water service contracts with

the government, pursuant to Section 9(e) of the Reclama-

tion Act of 1939, 43 U.S.C. § 485h(e). The contracts typ-

ically provided that they would be renewed no later than

one year prior to expiration on terms that “shall be

1 All of the Non-federal Defendants, except for the Friant

Water Users Authority, have water service arrangements with

the Bureau.

| ee

abt iti

I ERR TTI ts te cat ote

Se ee eR

App. 11

agreed upon.” In 1956, Congress mandated that contract

holders had a right to renewal “under stated terms and

conditions mutually agreeable to the parties.” 43 U.S.C.

§ 485h-1(1). Contract holders had “a first right... toa

stated share or quantity of the project’s available water

supply... .” 43 U.S.C. § 485h-1(4).

The first of these contracts, the contract with the

Orange Cove Irrigation District (Orange Cove), expired in

February of 1989. The Bureau began contract renewal

negotiations with Orange Cove in June, 1988, and exe-

cuted a renewal contract in May, 1989. By 1992, the

Bureau had executed 13 additional water contracts. All 14

contracts provided for water delivery for a 40-year period

under terms substantially similar to those in the previous

contracts.

In 1992, Congress enacted the Central Valley Project

Improvement Act (CVPIA), Pub.L. No. 102-575, § 3401 et

seq., 1992 U.S.C.C.A.N. (106 Stat.) 4600, 4706, which

required the government to perform an environmental

impact statement (EIS) on the Friant unit before it could

execute the remaining renewal contracts. The CVPIA also

limited the length of subsequently renewed contracts to

25 years. Therefore, of the 28 Friant water service con-

tracts that were up for renewal, only the first 14 contracts

are at issue.

Prior to construction of the Friant dam, the San Joa-

quin River supported a variety of fish species, including

the chinook salmon. The annual spring floods also fed the

surrounding wetlands with fresh water. After the Friant

dam was built, the San Joaquin River terminated at the

dam, and water from the Sacramento-San Joaquin Delta is

“

;

bse PETE SSR

nc aa ANP tN NOI Nt a

App. 12

exported upstream to water users below the dam through

a process of pumping and reverse flows. This situation

has adversely affected both wetlands and river fish,

including the winter-run chinook salmon. The salmon,

which was listed as threatened in August, 1989, and is

now endangered, is under the protective jurisdiction of

the National Marine Fisheries Service (NMFS). Other lis-

ted species under the jurisdiction of the Fish and Wildlife

Service (FWS) are also located in the Friant Service Area.

The Plaintiffs filed this action against the Bureau in

December, 1988, claiming that the Bureau violated NEPA

by renewing the water contracts without first performing

an EIS. The Plaintiffs sought a preliminary injunction

against further contracts. The district court denied the

injunction, but ordered the parties to include in the

remaining contracts a clause that conditioned the terms

on the final outcome of this case. All the renewal con-

tracts in this case, except for the Orange Cove contract,

contain this provision. The contracts also include a

clause, entitled “Compliance with Reclamation Laws,”

which permits minor modifications to the contracts in

order to comply with federal law. This clause is known as

Article 14.

The Plaintiffs’ amended complaint also alleges viola-

tions of the ESA, section 8 of the Reclamation Act (§ 8),

and section 5937 of the California Fish & Game Code

(§ 5937). The Non-federal Defendants were permitted to

intervene in 1989.

There are five district court orders that are now at

issue:

App. 13

(1) Order filed April 30, 1992. The district court

denied the Defendants’ motion to dismiss the

§ 8/§ 5937 claim. See 791 F.Supp. 1425

(E.D.Cal.1992).

(2) Order filed October 12, 1993. The district court

denied the Defendants’ motion to dismiss the

§ 8/§ 5937 claim as mooted or preempted by the

CVPIA.

(3) Order filed May 31, 1995. The district court

granted the Defendants summary judgment on

the NEPA claim, but granted the Plaintiffs sum-

mary judgment on the ESA claim.

(4) Order filed January 16, 1997. The district court

ordered the 14 contracts rescinded. The court

concluded that the § 8/§ 5937 claim was not

ripe.

: (5) Order filed April 16, 1997. The district court

: amended the January 16, 1997, judgment and

dismissed the Plaintiffs’ substantive ESA claim

without prejudice.

The Non-federal Defendants argue that: (1) the ESA

did not apply to their contracts; (2) but if it did, the ESA

was not violated; (3) but if the ESA was violated, the

claim is moot; (4) but if there was an ESA violation that

was not mooted, the remedy of contract invalidation was

inappropriate. The Non-federal Defendants also argue

that the CVPIA preempts § 5937. The Plaintiffs cross-

appeal the grant of summary judgment to the Defendants

on the NEPA claim and they appeal the court's

conclusion that the § 8/ § 5937 claim was not ripe. The

App. 14

Bureau is participating in the Plaintiffs’ cross-appeal

only.?

DISCUSSION

I. Endangered Species Act

A. Overview

Section 7(a)(2) of the ESA requires all federal agen-

cies “to insure that any action authorized, funded, or

carried out by such agency is not likely to jeopardize the

continued existence” of any endangered or threatened

species or result in the destruction of critical habitats. 16

U.S.C. § 1536(a)(2). If an agency determines that its pro-

posed action “may affect” an endangered or threatened

species, the agency must formally consult with the rele-

vant Service, the FWS and/or the NMFS, depending on

the species that are protected in the area of the proposed

action. See Pacific Rivers Council v. Thomas, 30 F.3d 1050,

1054 n.8 (9th Cir. 1994). After the formal consultation is

completed, the relevant Service will issue a Biological

Opinion evaluating the nature and extent of effect on the

threatened or endangered species. If the Biological Opin-

ion concludes that the proposed action is likely to jeopar-

dize a protected species, the agency must modify its

proposal. Section 7(d) of the ESA prohibits the “irrevers-

ible or irretrievable commitment of resources” during the

consultation process. 16 U.S.C. § 1536(d).

2 The Bureau does not challenge the district court's

determination that there was an ESA violation or the remedy of

contract rescission.

App. 15

As the district court observed, the ESA has “explicit

substantive goal[s] which [are] served by its procedural

requirements.” Order of May 31, 1995 at 20 (citing Thomas

v. Peterson, 753 F.2d 754, 763 (9th Cir. 1985)). The district

court concluded that the contracts amounted to an “irre-

versible and irretrievable commitment of resources” and

all contracts executed prior to completion of the required

consultations with the FWS and the NMFS violated

§ 7(d). The district court invalidated all of the contracts

which had been executed prior to the completion of the

required consultations.

Judicial review of administrative decisions involving

the ESA is governed by section 706 of the Administrative

Procedure Act, 5 U.S.C. § 706. A court may set aside an

agency action if it was “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law” or if

it was found to be “without observance of procedure

required by law.” 5 U.S.C. § 706(2)(A), (D); Pyramid Lake

Paiute Tribe of Indians v. United States Dep't of the Navy, 898

F.2d 1410, 1414 (9th Cir. 1990). The district court’s sum-

mary judgment decision is reviewed de novo. Forsyth v.

Humana, Inc., 114 F.3d 1467, 1474 (9th Cir.’, cert. denied,

118 S.Ct. 559 (1997).

B. Applicability of the ESA

As a threshold question, the Non-federal Defendants

argue that the ESA did not apply to the contract renewals

because the renewals were not “agency action.” See 16

U.S.C. § 1536(a)(2). This argument must fail. The term

“agency action” has been defined broadly. In TVA v. Hill,

437 U.S. 153 (1978), the Court stated:

5h ummm ama i a eR a

App. 16

One would be hard pressed to find a statu-

tory provision whose terms were any plainer

than those in § 7 of the Endangered Species Act.

Its very words affirmatively command all fed-

eral agencies “to insure that actions authorized,

funded, or carried out by them do not jeopard-

ize the continued existence” of an endangered

species or “result in the destruction or modifica-

tion of habitat of such species. ...” This lan-

guage admits of no exception.

Id. at 173. See also Pacific Rivers, 30 F.3d at 1055 (“Follow-

ing the Supreme Court’s lead in TVA, we have construed

‘agency action’ broadly.”) The regulation defining agency

action states:

Action means all activities or programs of any

kind authorized, funded, or carried out, in

whole or in part, by Federal agencies. . . .

Examples include, but are not limited to: . . . the

granting of licenses, contracts, leases, ease-

ments, rights-of-way, permits or grants in aid.

50 C.F.R. § 402.02. Clearly, negotiating and executing

contracts is “agency action.”

Orange Cove, the Madera Irrigation District (Mad-

era) and Chowchilla Water District (Chowchilla) contend

that the Bureau had no discretion to alter the terms of the

renewal contracts, particularly the quantity of water

delivered.* Where there is no agency discretion to act, the

ESA does not apply. Sierra Club v. Babbitt, 65 F.3d 1502,

1509 (9th Cir. 1995). The federal reclamation laws, which

3 This issue was raised for the first time on a motion for

reconsideration which the district court addressed in its Jan. 16,

1997, Order.

App. 17

provided the right to renewal, state that the government

is to renew the contracts on “mutually agreeable” terms,

43 U.S.C. § 485h-1(1), that water rights are based on the

amount of available project water, 43 U.S.C. § 485h-1(4),

and that the Secretary of the Interior (Secretary) has the

discretion to set rates to cover an appropriate share of the

operation and maintenance costs, 43 U.S.C. § 485h(e).

Clearly, there was some discretion available to the Bureau

during the negotiation process.

Orange Cove points to the opinion of the Solicitor of

the Interior that the Bureau had no discretion for pur-

poses of a NEPA analysis. Orange Cove argues that this

opinion was entitled to deference. The opinion, however,

only addresses the applicability of NEPA, not the ESA.

Even if this opinion were relevant, the district court cor-

rectly concluded that the Solicitor’s opinion was inconsis-

tent with the requirements of the ESA. First, the opinion

began from the premise that the government did not

intend to make any substantial changes in the renewal

contracts. The Solicitor, however, did not conclude that

there was no discretion to change the terms of the con-

tracts. He wrote:

If the Secretary exercises his discretion to make

other substantial changes in the contracts at the

time of renewal, then analysis must be under-

taken to determine whether the exercise cf dis-

cretion qualifies for a categorical exclusion from

preparation analysis under NEPA. . . . [While

there is no discretion to alter the quantity of

water received . . . the] Secretary has consider-

able discretion, however, to change other terms

of the renewed contracts.

mata si a i i

App. 18

The Solicitor concluded that there was no discretion to

change the quantity of water delivered under the con-

tracts because the districts have “a first right... to a

stated share or quantity of the project’s available water

supply. ... ” (Citing 43 U.S.C. § 485h-1(4)). The Solicitor,

however, assumed that the “project’s available water sup-

ply” included all of the Friant dam water, and he did not

address the issue of whether the total amount of available

project water could be reduced in order to comply with

the ESA or state law. See O'Neill v. United States, 50 F.3d

677, 686 (9th Cir. 1995) (noting that an agency can deliver

less than a contractually agreed upon amount of water in

order to comply with subsequently enacted federal law).

- Therefore, even if the original contracts guaranteed the

Non-federal Defendants a right to a similar share of

available water in the renewal contracts, the Bureau had

discretion to alter other key terms in the contract, and the

Bureau may be able to reduce the amount of water avail-

able for sale if necessary to comply with ESA.

C. Procedural Violations of the ESA

1. Failure to Consult with the NMFS

Before initiating any agency action in an area that

contains threatened or endangered species or a critical

habitat, the agency must (1) make an independent deter-

mination of whether its action “may affect” a protected

species or habitat, or (2) initiate a formal consultation

with the agency that has jurisdiction over the species. See

generally Peterson, 753 F.2d at 763. If an agency determines

that an action “may affect” critical species or habitats,

formal consultation is mandated. Id.; 50 C.F.R. § 402.14(a).

| AA MOR i a A Nc SN

App. 19

Formal consultation is excused only where (1) an agency

determines that its action is unlikely to adversely affect

the protected species or habitat, and (2) the relevant Ser-

vice (FWS or NMFS) concurs with that determination. 50

C.F.R. § 402.14(b); see Pacific Rivers, 30 F.3d at 1054, n.8.

The NMFS has jurisdiction over the winter-run chi-

nook salmon, which was listed as a threatened species

prior to execution of all but one of the water contracts.

The Bureau independently determined that the renewal

contracts and recommitment of all the Friant dam’s water

were not likely adversely to affect the salmon. The

Bureau then sought the NMFS’ concurrence with that

assessment. On November 1, 1991, the Director of the

NMFS refused to concur in the Bureau’s opinion that the

salmon would not be adversely affected. However, the

NMFS also stated that formal consultation was not

required. The Director wrote:

While we disagree with the Bureau’s determina-

tion that renewal of the Friant contracts are not

likely to affect the winter-run {chinook salmon]

adversely . . . we do not believe that a formal

consultation on the Friant contract renewals is

necessary. . . . [T]he issue of delta exports is

being addressed in our ongoing consultation on

the CVP ... and we believe this will allow us to

address the adverse impacts from the activities

interrelated to the renewal of the Friant con-

tracts.

The Bureau then proceeded to execute the water cortracts

without requesting a formal consultation with the NMFS.

The Bureau argued that it reasonably relied on the NMFS’

determination that a formal consultation was unnecess-

ary.

ee ee

App. 20

The Non-federal Defendants cite Stop H-3 Ass'n v.

Dole, 740 F.2d 1442 (9th Cir. 1984), and Pyramid Lake, 898

F.2d 1410, to support their argument that the Bureau’s

reliance on the NMFS opinion was not arbitrary and

capricious. These cases, however, do not support the

Non-federal Defendants’ position. Unlike both Stop H-3

and Pyramid Lake, the issue in this case is not whether the

Bureau was arbitrary and capricious in relying on a prop-

erly issued Biological Opinion. Instead, the issue is

whether the Bureau was arbitrary and capricious when it

relied on the NMFS’ view that a consultation was not

necessary, despite NMFS’ refusal to provide the required

concurrence. By relying on the NMFS in this case, the

Bureau did not meet its independent responsibilities

under the ESA.

The Bureau had an affirmative duty to ensure that its

actions did not jeopardize endangered species, and the

NMFS letter clearly disagreed with the agency’s deter-

mination of no adverse impact. See 16 U.S.C. § 1536(a)(2);

50 C.F.R. § 402.14. Under those circumstances, regardless

of the NMFS position that a formal consultation was

“unnecessary,” the Bureau had a clear legal obligation to

; at least request a formal consultation. See 50 C.F.R.

‘ §§ 402.13, 402.14. The reason that the NMFS gave for

stating that a consultation was unnecessary was not sup-

ported by statute or regulation and had no rational rela-

i tionship to the Bureau’s independent obligations to

ensure that its proposed actions were not likely adversely

to affect the salmon. The district court did not err in

concluding that it was arbitrary and capricious for the

Bureau to forgo a formal consultation with the NMFS

where the NMFS specifically refused to provide the

QR nt 06 1 A 8 ESB aan NIE! OIE hb Ie 5 os

App. 21

required concurrence of “no adverse impact.” Where the

Bureau executed these 40-year contracts without first

obtaining either the required concurrence from NMFS

that the proposed action was not likely to affect a threat-

ened species or a properly issued NMFS “no jeopardy”

Biological Opinion, the Bureau acted arbitrarily and

capriciously and not in accordance with the law. There-

fore, all of these contracts were subject to rescission.

2. Untimely Consultation with the FWS

In addition to failing to request and follow through

with a required consultation with NMFS, the Bureau also

failed to follow its obligations under law with respect to

its consultation with the FWS. The FWS has jurisdiction

over several protected species in the Friant area, and the

Bureau informally consulted with the FWS during 1990

and 1991. Formal consultation was requested on May 22,

1991. The FWS issued a “no jeopardy” Biological Opinion

on October 15, 1991. Ten of the Friant contracts had

already been executed by that time. The contracts con-

tained Article 14, which allowed some contract modifica-

tion pursuant to environmental review, and all but one of

the contracts contained a provision modifying the terms

dependent on the outcome of this litigation.*

4 The Orange Cove contract did not include this provision.

That contract was the first contract renewed and it was executed

prior to the court’s order requiring all future contracts to

contain such a provision. However, the Bureau and the FWS had

informally consulted and mutually agreed that the Orange Cove

contract was not likely adversely to affect any listed species.

SEIT AES AS tae Bee AER face te

App. 22

Section 7(d) of the ESA provides:

After initiation of consultation required under

subsection (a)(2) of this section, the Federal

agency and the permit or license applicant shall

not make any irreversible or irretrievable com-

mitment of resources with respect to the agency

action which has the effect of foreclosing the

formulation or implementation of any reasonable

and prudent alternative measures which would

not violate subsection (a)(2) of this section.

16 U.S.C. § 1536(d); see 50 C.F.R. § 402.09. The district

court concluded that the 40-year water contracts constitu-

ted an irreversible and irretrievable commitment of

resources and that the Bureau was not permitted to pro-

ceed until FWS found that the contracts were not likely to

affect a protected species.® See Pacific Rivers, 30 F.3d at

1056 (following discussion of § 7(a)(2) and § 7(d), court

concluded that “timber sales constitute per se irreversible

and irretrievable commitment of resources”); Lane County

Audubon Soc’y v. Jamison, 958 F.2d 290, 295 (9th Cir. 1992).

The Non-federal Defendants insist that even if the

water contracts are an irreversible and irretrievable com-

mitment of resources, Article 14 prevented the fore-

closure of reasonable and prudent alternatives and,

therefore, § 7(d) was not violated. We do not think that an

agency should be permitted to skirt the procedural

5 The district court also concluded that there was a per se

violation of the ESA even if the contracts in this case were not an

irreversible and irretrievable commitment of resources. We need

not decide whether the district court was mistaken because

there was an irreversible and irretrievable commitment of

resources.

App. 23

requirements of § 7(d) by including such a catchall sav-

ings clause in illegally executed contracts. However, even

if such a clause could preserve the contracts, Article 14 is

inadequate to serve that purpose here because it limits

conservation-based modifications to minor adjustments

and prohibits an adjustment in the amount of water

delivered. Because Article 14 does not permit a reduction

in the quantity of water delivered, the reasonable and

prudent alternative of reallocating contracted water from

irrigation to conservation is foreclosed. The district court

did not err in concluding that the Bureau violated § 7(d)

when it executed the contracts prior to completing the

formal consultation process with the FWS, and the con-

tracts executed prior to the issuance of the FWS Biological

Opinion are subject to rescission.®

3. Mootness

The Non-federal Defendants argue that if the Bureau

violated the ESA by executing the water contracts prior to

the issuance of the FWS Biological Opinion, this claim

became moot once a “no jeopardy” biological Opinion

was issued on October 15, 1991.7 In the May 31, 1991,

® The district court also correctly concluded that if the

Bureau is not permitted to execute contracts that constitute an

irreversible and irretrievable commitment of resources during

the formal consultation, it also was not permitted to do so before

it had initiated formal consultation. See 16 U.S.C. § 1536(d);

Pacific Rivers, 30 F.3d at 1056-57; Conner v. Burford, 848 F.2d 1441,

1455 (9th Cir.1988). Therefore, all contracts executed prior to

May 22, 1991, violated the ESA.

” This argument only applies to the ESA violation arising

out of the FWS consultation process. Even if the untimely FWS

App. 24

| Order, the district court concluded that the Biological

Opinion did not moot the procedural ESA violations

because the issuance of the Biological Opinion did not

provide all the relief that could have been granted. The

district court concluded that an appropriate remedy was

still available — contract rescission —- which would place

the Plaintiffs in the position they would have been had

the ESA been complied with before execution of the

contracts.

Mootness is a question of law reviewed de novo.

Native Village v. Blatchford, 38 F.3d 1505, 1509 (9th Cir.

1994). The Non-federal Defendants rely on Southern Utah

Wilderness Alliance v. Smith, 110 F.3d 724 (10th Cir. 1997),

as persuasive authority that the ESA claim was mooted.

In Southern Utah an informal consultation completed after

the agency action mooted the ESA claim. However, South-

ern Utah is distinguishable because (1) there was no irre-

versible and irretrievable commitment of resources, and

(2) the only relief requested was the completed consulta-

tion.

Procedural violations of the ESA are not necessarily

mooted by a finding by the FWS that a substantive viola-

tion of the ESA had not occurred. The process, which was

not observed here, itself offers valuable protections

against the risk of a substantive violation and ensures that

environmental concerns will be properly factored into the

decision-making process as intended by Congress. Also,

consultation could be mooted by the issuance of a “no jeopardy”

opinion, the failure to consult with NMFS still renders the

contracts subject to rescission.

App. 25

due to the procedural violations here, the Plaintiffs’ abil-

ity to enjoin the agency action while they challenged the

validity of the Biological Opinion was negated.®

Here, if the Biological Opinion had been rendered

before the contracts were executed, the FWS would have

had more flexibility to make, and the Bureau to imple-

ment, suggested modifications to the proposed contracts.

See 50 C.FR. § 402.14(g)(6), (j) (Service's responsibilities

include formulating “discretionary conservation recom-

mendations, if any, which will assist . . . agency in reduc-

ing or eliminating the impacts it may have on listed

species or critical habitats”). Even where there is a “no

jeopardy” Biological Opinion, the Service may make non-

binding conservation recommendations. 50 C.E.R.

§ 402.14(g)(6), (j). The failure to respect the process man-

dated by law cannot be corrected with post-hoc assess-

ments of a done deal.

D. Remedy of Contract Rescission

Where an agency acts arbitrarily or capriciously or

not in accordance with the law, the APA states that the

court shall set aside the agency action. 5 U.S.C.

§ 706(2)(A)-(D). While the court had the discretion to

preserve the contracts if the procedural flaw could have

been rectified in another way, see Weinberger v. Romero-

* In the district court, the Plaintiffs challenged the validity

of the FWS “no jeopardy” Biological Opinion. This claim was

dismissed without prejudice because the contract rescission

offered complete relief.

App. 26

Barcelo, 456 U.S. 305, 320 (1982), there is no reason to

compel that result here.

In Bob Marshall Alliance v. Hodel, 852 F.2d 1223, 1230

(9th Cir. 1988), the court stated that “the proper remedy

for substantial procedural violations of NEPA and the

ESA is an injunction.” In that case, however, the govern-

ment had been enjoined by the district court from enter-

ing into more leases and the leases that were already

entered into were set aside. Also, the agency action at

issue did not appear to involve an irreversible and irre-

trievable commitment of resources. In Forelaws on Board

v. Johnson, 743 F.2d 677, 685 (9th Cir. 1984), although we

refused to issue an injunction, we noted that for NEPA

violations, injunctions served the purpose of “pre-

serviing] the decision makers’ opportunity to choose

among policy alternatives.” Id. Where contracts have

already been entered into, the opportunity to “choose”

has been eliminated — all that remains is the limited

ability to make the path chosen as palatable as possible.

Therefore, an injunction would not serve any purpose if

the contracts are not invalidated. We conclude that the

district court’s decision to rescind the contracts was not

an abuse of discretion.

E. Unique Issues Related to Particular Contracts

1. Orange Cove

Orange Cove is uniquely situated from the rest of the

Non-federal Defendants. First, the Orange Cove contract

was the only contract that was executed after the Bureau

and the FWS had concurred that the contract was not

App. 27

likely adversely to affect any- protected species. There-

fore, for the Orange Cove contract alone, a formal consul-

tation with the FWS was not required before contract

execution and the ESA was not violated on those

grounds.

The district court concluded, however, that even

though the ESA was not violated because of a flawed

FWS consultation, the failure to consult with the NMFS

before executing the Orange Cove contract resulted in a

procedural violation. The Orange Cove contract, how-

ever, was also the only contract executed before the win-

ter-run chinook salmon was listed as threatened in

August of 1989. Orange Cove argues that because its

contract was executed before the salmon was listed, the

Bureau had no duty to consult with the NMBS, formally

or informally, under the ESA.

The district court, on Orange Cove’s motion for

reconsideration, concluded that until Orange Cove had

the contract validated in state court,? the Bureau had the

* Clause 30 of the Orange Cove contract provides as

follows: ya

The Contractor, after execution of this contract, shall

promptly seek to secure a decree of a court of competent

jurisdiction of the State of California, confirming the execution

of this contract. The Contractor shall furnish the United States

a certified copy of the final decree, the validation proceedings,

and all pertinent supporting records of the court approving

and confirming this contract, and decreeing and adjudging it

to be lawful, valid, and binding on the Contractor. This contract

shall not be binding on the United States until such final decree has

been secured.

Contract between the United States and the Orange Cove

Irrigation District (emphasis added).

App. 28

power and the obligation to withdraw the contract and

initiate consultation with the NMFS after the salmon was

listed in August, 1989. Orange Cove argues that the dis-

trict court improperly decided the validation argument

because it was not addressed by the parties in their

summary judgment briefs. Orange Cove also argues that

the district court erred as a matter of law.

Orange Cove implicitly raised the validation argu-

ment when it moved for reconsideration and pointed out

to the court that its contract was executed prior to the

threatened species listing. The Orange Cove contract, on

its face, states that it is not binding on the United States

until it is validated in state court. Both sides had an

opportunity to address this argument in writing a year

before the district court issued its January 16, 1997, Order.

Orange Cove argues that after the contract was exe-

cuted in May, 1989, there was no “agency action” that

would require reinitiation of an ESA consultation. How-

ever, even though the government was not under a con-

tractual obligation to deliver water to Orange Cove from

February 28, 1989, until February 22, 1990, the government

continued to do so and that activity constituted discretion-

ary agency action. The ESA regulations state that

“[rjeinitiation of formal consultation is required and shall

be requested . . . where discretionary Federal involvement

or control over the action has been retained or is autho-

rized by law and . . . a new species is listed... . ” 50 C.FR.

§ 402.16. The discretionary activity of delivering water

without a contract, coupled with the fact that the Orange

Cove contract explicitly stated that the United States was

not bound by the contract until it was validated in state

court, support the district court’s conclusion that the

App. 29

Bureau had an obligation to withdraw the contract and

initiate an NMFS consultation once the salmon was listed.

See Pacific Rivers, 30 F.3d at 1053-56 (ESA consultation

required for ongoing projects once new threatened species

listed). We conclude that the district court did not err in

setting aside the Orange Cove contract.

2. Chowchilla and Madera

Chowchilla and Madera argue that their contracts are

unique from the other Non-federal Defendants because

Madera and Chowchilla had Originally possessed the

land where the Friant dam was built and had adjudicated

rights to the water of the San Joaquin River. In return for

conveying the land and the water rights to the United

States, Madera and Chowchilla argue that their 1939 con-

tracts guaranteed a permanent supply of water from the

Friant dam of 270,000 acre feet of water annually. That

contract was replaced by a 1951 contract. Madera and

Chowchilla argue that when the 1951 contract expired,

they were reinvested with their rights under the 1939

contract and, therefore, they are exempt from the ESA.

However, in Madera Irrigation Dist. v. Hancock, 985 F.2d

1397, 1405-CS (9th Cir. 1993), the court concluded that

these districts are not exempt from requirements under

NEPA and the ESA. Chowchilla’s and Madera’s argu-

ments to the contrary are without merit.

3. Chowchilla, Terra Bella and Delano-Ear-

limart

Chowchilla, the Terra Bella Irrigation District and the

Delano-Earlimart Irrigation District argue that even

App. 30

though their contracts were executed by the Bureau prior

to the issuance of the FWS Biological Opinion, all three

were validated by the state court after the October 15,

1991, “no jeopardy” Biological Opinion was issued.

Therefore, they argue that the validation date serves to

keep their contracts from violating the ESA.

This argument was not raised in the district court

and we decline to consider it for the first time on appeal.

See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1487

n.4 (9th Cir. 1995) (failure to raise issue before the district

court constitutes a waiver of that issue).

II. National Environmental Policy Act

NEPA requires all federal agencies to consider the

environmenta! consequences of all “major Federal actions

significantly affecting the quality of the human environ-

ment” by preparing an EIS before undertaking the action.

42 U.S.C. § 4332(2)(C). Instead of preparing an EIS, an

agency may make a factual determination that an EIS is

unnecessary by conducting an environmental assessment

(EA) of its proposed action and issuing a Finding of No

Significant Impact (FONSI) on the environment. See 40

C.F.R. § 1501.4; Sierra Club v. United States Forest Serv., 843

F.2d 1190, 1193 (9th Cir. 1988). NEPA is not retroactive

and only applies to major agency actions that occurred

after 1969.

It is undisputed that the Bureau did not prepare an

EA or an EIS before renewing these water contracts. The

Bureau argues that there is no need for this court to

address the NEPA issue because if these 14 contracts are

rescinded, then the Plaintiffs have received complete

App. 31

relief. The CVPIA requires the government to complete

an EIS before it may enter into any subsequent Friant

renewal contracts. CVPIA, Pub.L. 102-575, § 3404(c)(1),

1992 U.S.C.C.A.N. (106 Stat.) at 4709. Where intervening

legislative changes settle a controversy, the action may be

moot. Nevada v. Watkins, 943 F.2d 1080, 1083 (9th Cir.

1991). We conclude that the NEPA issue has been mooted

by the remedy of contract rescission and CVPIA’s require-

ment that an EIS be completed on this dam before the re-

execution of the contracts.

III. Section 5937 of the Fish and Game Code

Section 5937 of the California Fish and Game Code

States:

The owner of any dam shall allow sufficient

water at all times to pass through a fishway, or

in the absence of a fishway, allow sufficient

water to pass over, around or through the dam,

to keep in good condition any fish that may be

planted or exist below the dam.

In the Order of April 30, 1992, the district court con-

cluded that the Bureau was not exempt from § 5937 and

denied the motion to dismiss. See 791 F.Supp. at 1431-36.

The district court also concluded that the CVPIA did not

preempt § 5937. See Order of October 7, 1993. In the

January 16, 1997, Order, the district court concluded that,

due to the contract invalidations, the § 5937 claim was not

ripe. We hold that the district court erred and remand for

a determination on the merits.

Ripeness is a question of law reviewed de novo. San

Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1124

App. 32

(9th Cir. 1996). A case is generally considered ripe if: (1)

the relevant issues are sufficiently focused to permit judi-

cial resolution without further factual development, see

Clinton v. Acequia, Inc., 94 F.3d 568, 572 (9th Cir. 1996);

and (2) the parties would suffer a hardship by the post-

ponement of judicial action, see Abbott Lab. v. Gardner, 387

U.S. 136, 149 (1967). Where the Bureau is not complying

with § 5937 and its obligation to comply with § 5937 is in

dispute, a determination of the § 5937 issue is ripe. The

rescission of the 14 water contracts is unrelated to the

timeliness of the § 5937 claim. The § 5937 claim is directed

towards the owner of the dam, the Bureau, whose duty to

comply with state law, if the law applies, exists indepen-

dent of any contractual arrangements with the Non-fed-

eral. Defendants.

Che Non-federal defendants challenge the district

court's ruling that § 5937 was not, on its face, preempted

by federal law. We affirm on the facial preemption issue.

Section 8 of the Reclamation Act provides:

Nothing in this Act shall be construed as

affecting or intended to affect or to in any way

interfere with the laws of any State or Territory

relating to the control, appropriation, use, or

distribution of water used in irrigation, or any

vested right acquired thereunder, and the Secre-

tary of the Interior, in carrying out the provi-

sions of this Act, shall proceed in conformity

with such laws. . .

43 U.S.C. § 383. In California v. United States, 438 U.S. 645

(1978), the Court stated that the “cooperative federalism”

of § 8 required the United States to comply with state

water laws unless such a law was directly inconsistent

ee ee a

App. 33

with clear congressional directives regarding the project.

Id. at 650, 678. On remand to the Ninth Circuit, this court

concluded that the term “congressional directive” meant

a preemptive federal statute. United States v. California,

694 F.2d 1171, 1176-77 (9th Cir. 1982).

The CVPIA provides that Friant dam water is not to

be released from the Friant dam to comply with the

provisions of the CVPIA regarding the development of a

plan to reestablish fish below the dam. CVPIA, Pub.L.

No. 102-575, § 3406(c)(1), 1992 U.S.C.C.A.N. (106 Stat.) at

4721.!° The Non-federal Defendants argue that this provi-

sion is a clear congressional directive that water is not to

be released from the Friant dam pursuant to any law,

State or federal, until it is specifically approved by Con-

gress. However, the statute states that there are not to be

any releases of the Friant dam water “aS a measure to

implement this title,” this title being the CVPIA. It would

have been a simple matter for Congress to bar the release

of Friant dam water, without including the clause “as a

measure to implement this title” twice in the same sen-

tence. There is no clear directive in the CVPIA which

10 Section 3406(c)(1) of the CVPIA provides:

The Secretary shall . . . develop a comprehensive plan,

which is reasonable, prudent, and feasible, to address fish,

wildlife, and habitat concerns on the San Joaquin

River . . . During the time that the Secretary is developing the

plan provided for in this subsection, and until such time as

Congress has authorized the Secretary to implement such

plan... the Secretary shall not, as a measure to implement this

title, make releases for the restoration of flows between

Gravelly Ford and the Mendota Pool and shall not thereafter

make such releases as a measure to implement this title without

a specific Act of Congress authorizing such releases.

App. 34

preempts the application of § 5937 if the state law could

be implemented in a_way that is consistent with Con-

gress’ plan to develop and restore fisheries below the

Friant dam in a manner that is “reasonable, prudent, and

feasible.” CVPIA, Pub.L. 102-575, § 3406(c), 1992

U.S.C.C.A.N. (106 Stat.) at 4721.

The district court, as the Bureau points out, never

explicitly ruled that § 5937 applied to the Friant dam.

There are several other issues that the district court did

not address. For example, the district court did not deter-

mine whether § 5937 is applicable to the Friant dam

under state law. It is preferable to determine whether the

state law applies before reaching a determination that

state law has been preempted. The district court also did

not reach the issue of whether the actual application of

§ 5937 is inconsistent with the CVPIA. It has yet to be

determine how much water release would be required

under § 5937 and whether that would be consistent with

the CVPIA. We remand these issues to the district court

for a determination on the merits.

IV. Improper Use of Evidence

With their summary judgment motion, the Plaintiffs

filed three expert affidavits which addressed the environ-

mental impacts of the Friant dam. The Non-federal

Defendants filed a motion to strike these affidavits which

the court denied. The Non-federal Defendants claim that

these affidavits addressed disputed factual issues, and

that they were not permitted to cross-examine the experts

or conduct discovery to respond to the assertions in the

affidavits. In the Order of May 31, 1995, the district court

OE —— ———

i a a ee ae le

App. 35

appears to rely on these affidavits, in part, and stated that

the Plaintiffs’ “extensive scientific ecological evidence

documents” indicated that the total diversion of the river

caused environmental harm. The Non-federal Defendants

contend that the district court abused its discretion in

denying further discovery in violation of Fed.R.Civ.P.

56(f). The Non-federal Defendants also claim that the

affidavits were irrelevant to the legal questions at hand.

We review the district court's discovery rulings for

an abuse of discretion. Amarel v. Connell, 102 F.3d 1494,

1515 (9th Cir. 1996). The district court may continue a

motion for summary judgment if the opposing party

needs time to conduct further discovery. See Fed.R.Civ.P.

56(f); Garrett v. City and County of San Francisco, 818 F.2d

1515, 1518 (9th Cir. 1987). A refusal to permit further

discovery pursuant to Rule 56(f) is reviewed for an abuse

of discretion. Nidds v. Schindler Elevator Corp., 113 F.3d

912, 920 (9th Cir. 1996), cert. denied, 118 S.Ct. 369 (1997).

“We will only find that the district court abused its dis-

cretion if the movant diligently pursued its previous dis-

covery opportunities, and if the movant can show how

allowing additional discovery would have precluded

summary judgment.” Qualls v. Blue Cross of Cal., Inc., 22

F.3d 839, 844 (9th Cir. 1994).

The Non-federal Defendants’ Rule 56(f) argument is

without merit. The Non-federal Defendants never for-

mally filed a Rule 56(f) motion requesting a continuance

of the summary judgment hearing to conduct further

discovery. They contend that their motion to strike

should have served as a Rule 56(f) motion. But that

motion, which was not made until six months after the

summary judgment decision was issued, was clearly

App. 36

untimely for Rule 56(f) purposes. Regardless of whether

the Non-federal Defendants raised a timely 56(f) motion

or diligently pursued discovery, the Non-federal Defen-

dants have not pointed to any evidence that they could

have discovered that would have precluded summary

judgment. See Garrett, 818 F.2d at 1518.

On the relevancy issue, the Plaintiffs assert that the

expert affidavits were relevant to the legal issue of

whether the water contracts were an irreversible and

irretrievable commitment of resources. The district court

did rely on the declarations regarding environmental

harm to conclude that there was an irreversible and irre-

trievable commitment of resources. However, it appears

that the court could have reached the same legal conclu-

sion without any concrete evidence of ecological harm.

See Pacific Rivers, 30 F.3d at 1057 (timber sales constitute

per se irreversible and irretrievable commitment of

resources). Therefore, if there were any error it was harm-

less.

CONCLUSION

We conclude that the Bureau violated the ESA by

making irreversible and irretrievable commitments of

resources prior to completing the required consultations

with the FWS and the NMFS. The remedy of contract

rescission was well within the district court’s discretion.

The NEPA issue is moot. However, we reverse the hold-

ing that the § 5937 claim was unripe and remand for a

determination of that issue. The Plaintiffs shall recover

their costs on appeal from the Non-federal Defendants.

App. 37

The Federal Defendants Shall bear their own costs on

appeal.

AFFIRMED in part, REVERSED and REMANDED

in part.

App. 38

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

NATURAL RESOURCES

DEFENSE COUNCIL, NO. CIV. S-88-1658 LKK

et al., ORDER

Plaintiffs, (Filed Oct. 12, 1993)

Vv.

ROGER PATTERSON, etc.,

et al.,

Defendants.

ORANGE COVE

IRRIGATION DISTRICT,

et al.,

Defendant-Intervenors.

This matter is before the court on defendants’ motion

to dismiss pursuant to Fed. R. Civ. P. 12 (b) (1) and 12 (b)

(6) . For the reasons stated below, defendants’ motion will

be denied. As the length of this order demonstrates, the

reasons for denial are complex. In an effort to make clear

the reasons for this disposition, I begin with a review of

the case’s procedural history thereby putting this motion

in context.

PRIOR PROCEEDINGS

Plaintiffs, various environmental groups, originally

filed suit against officers of the Bureau of Reclamation

App. 39

(“Bureau”) on December 21, 1988. They sought to prevent

the Bureau from entering 28 renewal contracts to supply

water from the Friant Dam unit of the Central Valley

Project. The 28, 40-year water contracts at issue were first

entered into by the Secretary of the Interior, acting

through the Bureau, beginning in 1949. On February 28,

1989, the first of these contracts expired.

Beginning in approximately June 1988, the Bureau

engaged in formal negotiations with the defendant irriga-

tion districts to develop a new form of long-term con-

tract. On November 2, 1988, the Bureau announced

completion of negotiations with Orange Cove Irrigation

District, the first of the renewed contracts. on April 4,

1989, and before any further contracts were renewed, the

court denied plaintiffs’ motion for a preliminary injunc-

tion enjoining the negotiation, implementation, and exe-

cution of the renewal of all Friant Unit water service

contracts, conditioned upon each subsequent renewal of

any contract prior to the final order in this case contain-

ing the following provision: “The terms of this contract

are subject to the final order in NRDC v. [Patterson], No.

CIV-S-88-1658-LKK-[GGH].” Order filed April 4, 1989.

Subsequent negotiated amendments were ordered to con-

tain similar language.

Plaintiffs’ original complaint alleged that the Bureau

was renewing those contracts in violation of the National

Environmental Policy Act (“NEPA”), 42 U.S.C. § 4332, the

Administrative Procedure Act (“APA”), 5 U.S.C.

§§ 701-06, and various federal regulations and guidelines

promulgated under those statutes. On February 6, 1989,

plaintiffs filed their first amended complaint adding a

claim based on defendants’ alleged violation of the

App. 40

Endangered Species Act (ESA), 16 U.S.C. § 1536. By order

filed February 6, 1989, non-federal defendant irrigation

districts were permitted to intervene as defendants in this

action.

On January 7, 1992, plaintiffs were granted leave to

amend to assert an APA claim premised on the Bureau's

alleged violation of Section 8 of the Reclamation Act of

1902 (“Section 8”), 43 U.S.C. §§ 372, 383. That complaint

was filed on February 4, 1992. Plaintiffs maintain that

Section 8 mandates compliance by the Bureau, as owner

of Friant Dam, with California Fish & Game Code § 5937

and that the Bureau has failed to comply with this state

law.

On April 30, 1992, this court denied defendants’

motion to dismiss this fourth cause of action. See NRDC v.

Patterson, 791 F. Supp. 1425 (E.D. Cal. 1992). The parties

cross-moved for summary judgment on plaintiffs’ NEPA

and ESA claims on May 19, 1992. Plaintiffs additionally

moved for summary judgment as to the section 5937

claim. Following a Status (Pretrial Scheduling) Confer-

ence on June 3, 1992, in an effort to trim this complex case

to manageable proportions, a special hearing was set for

arguments relative to the NEPA discretion issue, i.e.,

whether the government had discretion to renew the

water contracts thereby implicating NEPA and requiring

that an Environmental Impact Statement (“EIS”) be pre-

pared. In addition, hearing on the ESA motions were

stayed, plaintiffs were granted 15 days to amend their

ESA claim, and federal defendants were to begin compil-

ing the administrative record relative to this claim. It was

App. 41

also determined that plaintiffs’ motion addressing its sec-

tion 5937 claim would not be heard until resolution of

various additional motions to be filed by defendants.

Plaintiffs filed their third amended complaint on June

17, 1992. The amended complaint added to their ESA

claim allegations that the Secretary’s reliance on the Octo-

ber 15, 1991 Biological Opinion is unreasonable, arbitrary,

capricious and thus not in accordance with ESA.

Following the August 21, 1992 special hearing, this

court set for special hearing, on September 17, 1992,

defendants’ motion for joinder of the State Water

Resources Control Board and the remaining issues rela-

tive to the NEPA claim, i.e., whether the renewal of water

contracts by the Bureau is categorically excluded from

NEPA review, and whether contract renewal should be

considered a continuation of the status quo thus exclud-

ing the renewal from NEPA review.

Following the September 17, 1992 hearing, by order

dated September 21, 1992, this court ordered further

briefing relative to the NEPA claim, specifically, whether

the Bureau has discretion in setting the rate terms of the

renewal contracts, and the relevance of the 40-year maxi-

mum period for renewal of water contracts. Defendants

filed their supplemental brief on October 20, 1992. Defen-

dants’ joinder motion was denied on January 8, 1993.

On October 30, 1992, former President Bush signed

into law the Reclamation Projects Authorization and

Adjustment Act of 1992. Pub. L. No. 102-575 (1992). Title

XXXIV of this Act, the Central Valley Project Improve-

ment Act (“CVP Improvement Act”), 106 Stat. 4706-31

(1992), appeared to dramatically alter the nature of this

App. 42

litigation. Thus, on December 7, 1992, a further status

conference was held to determine the future course of

this litigation. Following that conference, by order filed

December 14, 1992, the court vacated the order taking

under submission the cross-motions for summary judg-

ment on the NEPA claim and stayed further proceedings

on that issue, directed defendants to file a motion to

dismiss in light of the CVP Improvement Act, and

granted plaintiffs leave to file an amended complaint.

Plaintiffs filed their fourth amended complaint on

December 18, 1992. Until the filing of this fourth

amended complaint, plaintiffs’ initial complaints sought,

inter alia, an order from the court voiding or rescinding

the 28 contracts or amendments to contracts entered into

by defendants for the deliveries of water from Friant

Dam which were not in compliance with NEPA, ESA, and

regulations promulgated thereunder, the Department of

the Interior Manual, Section 8, or the APA, and prelimi-

nary and permanent injunctive relief requiring the prepa-

ration of all environmental documents required by law,

including a programmatic EIS and a proper biological

assessment and biological opinion before any further

action is taken in connection with the negotiation,

approval, execution or implementation of the new Friant

contracts or amendment of the Original Orange Cove

Irrigation District or other contracts. At the time the CVP

Improvement Act was enacted, 14 of those contracts had

yet to be renewed or amended. Because the CVP

Improvement Act specifically mandated that the Bureau

prepare a programmatic EIS before it enters or renews

any long-term water service contracts for the delivery of

Central Valley Project water, CVP Improvement Act

App. 43

§§ 3404(c) and 3409, plaintiffs’ fourth amended complaint

no longer seeks relief relative to the contracts that have

not yet been renewed.! Instead, they now seek an order

declaring the Bureau’s actions contrary to law and

Judgment voiding or rescinding any contracts,

or amendments to contracts, entered into by

defendants for the deliveries of water from

Friant Dam which are not in compliance with

NEPA, ESA, regulations promulgated there-

under, the DOI Manual, Section 8 or the APA.

Fourth Amended Complaint at 40. Plaintiffs also seek

Preliminary and permanent injunctive relief

requiring the Bureau to comply fully with Sec-

tion 8, Section 5937 and the APA by allowing

* Although at oral argument aad in their Papers filed in

opposition to defendants’ motion plaintiffs’ only remaining

NEPA/ESA dispute appears to be with the execution of those

contracts already renewed subsequent to their expiration, some

of the language in plaintiffs’ third request for relief appears to

request relief as to contracts not yet renewed. Plaintiffs’ third

request for relief seeks “[p]reliminary and permanent injunctive

relief requiring the preparation of all environmental documents

required by law, including a Programmatic EIS and a proper

biological assessment and proper biological opinions, and

compliance with all other provisions of NEPA and ESA, before

any further action is taken in connection with the negotiation,

approval, execution or implementation of the original Orange

Cove Irrigation District or other contracts.” Because defendants

can no longer argue that NEPA is inapplicable to their actions in

connection with these contracts or that they need not properly

comply with ESA in this regard and because these contracts

have yet to be negotiated, approved, executed, or implemented,

insofar as plaintiffs seek an order mandating compliance with

these statutes, their claim for injunctive relief is not ripe and

will not be addressed.

App. 44

sufficient water to pass over, around or through

tt Dam to keep in good condition fish life

below Friant Dam.

Id.

Defendants now move to dismiss plaintiffs’ entire

complaint.

MOOTNESS

Defendants concede that the CVP Improvement Act

established that the Bureau must conduct an EIS for each

of the water contracts renewed since January 1, 1988.

Although filing separate motions, both federal and non-

federal defendants argue that the NEPA and APA claims

(collectively referred to as the “NEPA claims”) are

mooted by the CVP Improvement Act.

Plaintiffs oppose the motion. They note that their

fourth amended complaint does not challenge the Secre-

tary’s decision to negotiate or execute the 14 contracts

which have not yet been renewed. However, as to the 14

which have been renewed, plaintiffs argue that they were

renewed in violation of NEPA and ESA, are illegal, and

therefore should be rescinded, thus subjecting them to

the sare requirements as those contracts that have yet to

be renewed. The CVP Improvement Act, they argue, does

not excuse past NEPA and ESA violations.

A. Standards to be Applied

Where Congress has taken action which has rendered

a case moot, there is no “case or controversy” for Article

x—E————— ee

App. 45

III purposes and the federal court thus lacks jurisdiction.

State of Nevada v. Watkins, 943 F.2d 1080, 1083 (9th Cir.

1991). Thus, a mootness attack necessarily constitutes an

attack on the court’s subject matter jurisdiction pursuant

to Fed. R. Civ. P. 12(b)(1). The standards to be applied on

such a motion are well known and need not be set forth

here. ITSI T.V. Productions v. Cal. Auth. of Racing Fairs, 785

F. Supp. 854, 857-58 (E.D. Cal. 1992), aff'd in part, rev'd in

part, __ F.2d __, 1993 WL 327132 (9th Cir, Aug. 31,

1993). Where, as here, the challenge is a facial attack, the

plaintiff is entitled to safeguards similar to those applica-

ble when a Rule 12 (b) (6) motion is made. See, 2.g.,

NRDC, 791 F. Supp. at 1428-29.

The party seeking to dismiss a claim on mootness

grounds is said to bear a “heavy” burden. Headwaters, Inc.

v. Bureau of Land Management, 893 F.2d 1012, 1015 (9th Cir.

1989).

B. Analysis

“A moot action is one where the issues presented are

no longer live or the parties lack a legally cognizable

interest in the outcome.” Headwaters, 893 F.2d at 1015.

Where intervening legislative changes settle a contro-

versy, the action may be moot. State of Nevada, 943 F.2d at

1083; Stop H-3 Ass'n v. Dole, 870 F.2d 1419, 1432 (9th Cir.

1989). See also 13A Wright, Miller & Cooper, Federal Prac-

tice and Procedure § 3533.6. While an intervening legisla-

tive act may moot some claims, so long as other claims or

alternative grounds for resolving the issue remain, the

action is not mooted. Daingerfield Island Protective Soc. v.

Lujan, 920 F.2d 32, 36-37 (D.C. Cir. 1990), cert. denied, 112

App. 46

S. Ct. 54 (1991); Montana Wilderness Ass'n v. U.S. Forest

Service, 655 F.2d 951, 958 (9th Cir. 1981), cert. denied, 455

U.S. 989 (1982). The “critical question” in determining

mootness is whether a court may grant “any effective

relief.” State of Nevada, 943 F.2d at 1083. Thus, even

though a plaintiff may avail himself of relief provided by

newly-enacted legislation which is essentially the same as

that sought under the litigation, a plaintiff maintains

sufficient interest to permit him to continue his action

where variances, such as delayed relief, exist in the relief

available pursuant to the new legislative act. INS v. Car-

doza-Fonseca, 480 U.S. 421, 426 n.3 (1987).

1. NEPA Claim

CVP Improvement Act § 3404(c), the section permit-

ting renewal of existing long-term water delivery con-

tracts, amends the 1956 Act allowing for 40-year contracts

to permit the Bureau to renew, contracts for lengths not to

exceed 25 years. It further provides:

With respect to all contracts renewed by the

Secretary since January 1, 1988, the Secretary

shall incorporate in said contracts a provision

requiring payment of the charge mandated in

subsection 3406(c) and subsection 3407(b) of this

title and all other modifications needed to com-

ply with existing law, including provisions of

this title. This title shall be deemed “applicable

law” as that term is used in Article 14(C)? of

2 Relevant portions of Article 14(c) in each of the contracts,

with the exception of the Orange Cove contract, provide:

“Notwithstanding any other provisions of this contract . . . the

App. 47

contracts renewed by the Secretary since Janu-

ary 1, 1988.

CVP Improvement Act § 3404(c)(1).

CVP Improvement Act section 3409, the section relat-

ing to environmental review, provides in relevant part as

follows:

Not later than three years after the date of

enactment of this title, the Secretary shall pre-

pare and complete a programmatic environmen-

tal impact statement pursuant to the National

Environmental Policy Act analyzing the direct

and indirect impacts and benefits of implement-

ing this title, including all fish, wildlife, and

habitat restoration actions and the potential

renewal of all existing Central Valley Project

water contracts.

CVP Improvement Act § 3409.

Because section 3409 of the CVP Improvement Act

mandates that a programmatic EIS be prepared regarding

Provisions of this contract covering right to long-term renewal

and quantity of water are non-discretionary and not subject to

change except as required by applicable law.”

The Orange Cove contract had a different provision,

although its effect due to the change in law is similar. Section

14(a) provides “The parties agree that the delivery of water or

the use of the Federal facilities pursuant to this contract is

subject to Reclamation law, as amended and supplemented,

including, but not limited to, the RRA.” Because the CVP

Improvement Act amended reclamation law, see section 3408(g)

(“Reclamation- Law. - This title shall amend and supplement

the Act of June 17, 1902, the Act supplementary thereto and

amendatory thereof”) , it clearly applies under the contract

Provisions as “applicable law.”

App. 48

the effects of renewal of the water contracts, and because

CVP Improvement Act § 3404 mandates that the Secretary

incorporate in all contracts, even those already renewed,

a provision requiring compliance with the provisions of

the CVP Improvement Act, including conducting the EIS,

plaintiffs no longer seek relief as to the 14 contracts

remaining to be negotiated and executed.

Plaintiffs request, however, that the contracts already

executed allegedly in violation of NEPA and the APA be

“voided and rescinded. If this court granted their

requested relief, under the CVP Improvement Act those

contracts would essentially convert from being “contracts

already renewed” to “contracts up for renewal which

have expired prior to the completion of an EIS.” Under

the CVP Improvement Act, “contracts up for renewal”

can be renewed for no greater than 3-year intervals, and

for successive interim periods of not more than two years

in length, until the EIS is completed. Section 3404(c)(1).

Thus accepting as true plaintiffs’ allegations that defen-

dants entered those contracts in violation of NEPA and

the APA, the current 25-year? contracts would be

rescinded and the longest time for which they could be

renewed initially is three years.

The potential impact of this result is substantial

because as the renewed contracts now stand, they have

been renewed prior to completion of an EIS. As explained

by the Supreme Court, while NEPA does not “mandat[e]

Se RT ee nae ng om

i a hh _

* Although these contracts were initially entered as 40-year

contracts, section 3404(c) of the CVP Improvement Act

effectively amended them to 25-year contracts. This suit raises

no issue as to the propriety of such legislation.

App. 49

that agencies achieve particular substantive environmen-

tal results,” Marsh v. Oregon Nat. Resources Council, 490

U.S. 360, 371 (1989), its purpose is “to prevent or elimi-

nate damage to the environment and biosphere by focus-

ing Government and public attention on the

environmental effects of proposed agency action. Id. See

also Sierra Club v. Marsh, 872 F.2d 497, 500 (1st Cir. 1989).

Such attention is to be focused “before decisions are

made and before actions are taken,” 40 C.ER. § 1500.1(b),

and at a time to ensure that they “will not be used to

rationalize or justify decisions already made.” 40 C.ER.

§ 1502.5.4 See also Friedman Bros. Inv. Co. v. Lewis, 676 F.2d

1317, 1320 (9th Cir. 1982) (“the purpose of an EIS is to

provide decisionmakers with the information required to

evaluate the environmental impact of their decision

before they make it”). As explained by the First Circuit,

“NEPA’s object is to minimize . . . the risk of uninformed

choice, a risk that arises in part from the practical fact

that bureaucratic decisionmakers (when the law permits)

are less likely to tear down a nearly completed project

than a barely started project.” Sierra Club, 872 F.2d at

500-01. It should go without saying that “[i]t is far easier

* 40 C.F.R. § 1501.2 further provides that agencies “shall

integrate the NEPA process with other planning at the earliest

possible time to insure that planning and decisions reflect

environmental values, to avoid delays later in the process, and

to head off potential conflicts.” Regarding the timing of

preparing an EIS, the regulations provide that 8[t]he statement

shall be prepared early enough so that it can serve practically as

an important contribution to the decision-making process and

will not be used to rationalize or justify decisions already

made. ...” 40 C.F.R. § 1502.5. These regulations are entitled to

“substantial deference.” Marsh, 490 U.S. at 372.

App. 50

to influence an initial choice than to change a mind

already made up.” Id. at 500 (quoting Commonwealth of

Massachusetts v. Watt, 716 F.2d 946, 952 (1st Cir. 1983)). See

also Save the Yaak Committee v. Block, 840 F.2d 714, 718 (9th

Cir. 1988) (“The rationale behind [the rule requiring fed-

eral agencies to integrate NEPA process at the earliest

possible time] is that inflexibility may occur if delay in

preparing an EIS is allowed: after major investment of

both time and money, it is likely that more environmental

harm will be tolerated.”) (citations omitted). Thus,

because it is plainly preferable, if not required by law,

that the EIS be prepared before commitment of resources

for any length of time, and because rescission of the

contracts would return the situation to that which existed

prior to renewal of the contracts allegedly in violation of

NEPA, it is not true that plaintiffs could not achieve “any

effective relief” by way of their NEPA claim. Moreover, as

in INS v. Cardoza-Fonseca, 480 U.S. 421 (1987), the possi-

bility remains that the relief sought by plaintiffs through

this action may vary, for instance, by the required time

for completion of the EIS, and therefore be more advan-

tageous than that envisioned by the CVP Improvement

Act. Thus, this court cannot conclude that plaintiffs’

NEPA claim is moot.

2. ESA Claim

Plaintiffs’ ESA claim alleges violations based on two

theories: (1) a procedural violation, i.e., whether the

defendants properly negotiated and renewed contracts

and only thereafter prepared a biological opinion; and (2)

a substantive violation, i.e., whether the section 7 consul-

tation and biological opinion prepared were inadequate.

App. 51

Defendants move to dismiss plaintiffs’ ESA claim as moot

arguing that federal defendants have completed an ESA

consultation under section 7. Moreover, they argue, to the

extent the CVP Improvement Act requires the Secretary

to complete all appropriate environmental studies prior

to executing new long-term renewal contracts, — includ-

ing studies equivalent to ESA studies, the ESA claim is

moot because any potential relief has already been

ordered by Congress. Alternatively, they assert that the

question as to what consultation may be required to

comply with the CVP Improvement Act is premature.

Section 3406 of the CVP Improvement Act, the only

section explicitly mentioning ESA provides:

FISH AND WILDLIFE RESTORATION ACTIV-

ITIES. — The Secretary, immediately upon the

enactment of this title, shall operate the Central

Valley Project to meet all obligations under State

and Federal law, including but not limited to the

Federal Endangered Special Act, 16 U.S.C.

S 1531, et sem... .

CVP Improvement Act § 3406(b).

As plaintiffs point out, this provision does not

require the Secretary to prepare a new biological opinion

as to the renewed contracts, but rather to generally com-

ply with ESA. As with plaintiffs’ NEPA claim above,

defendants’ failure to comply with ESA when executing

the already renewed contracts may be grounds for rescis-

sion of those contracts, thus subjecting them to the three-

year limitation pending environmental review. See, e.g.,

Conner v. Burford, 848 F.2d 1441, 1451-58 (9th Cir. 1988),

cert. denied, 489 U.S. 1012 (1989); Tribal Village of Akutan v.

Hodel, 869 F.2d 1185, 1193 (9th Cir. 1988), cert. denied, 493

App. 52

U.S. 873 (1989) (under ESA, agency's actions may be set

aside if they were “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with the law”).

That the CVP Improvement Act specifically directs the

Secretary to comply with ESA in operating the CVP is

irrelevant to the question whether the already-renewed

contracts are valid. Thus, the ESA claim, insofar as it

alleges a procedural violation, is not moot.

Plaintiffs have not alleged that they have any dispute

with future ESA consultations and studies conducted

pursuant to the CVP improvement Act, nor could they, as

such a claim would not be ripe. It does not follow, how-

ever, that the ESA claim plaintiff’s have made is not ripe.

Plaintiffs’ ESA claim is premised upon alleged past viola-

tions of ESA — for the defendants’ failure to properly

comply with ESA’s requirements prior to entering the

renewal contracts.

Finally, in a footnote, federal defendants argue that

plaintiffs’ ESA claim based on the alleged preparation of

an inadequate biological opinion should be dismissed

because they failed to provide 60-days written notice as

required by 16 U.S.C. § 1540(g)(2)(C).> See Fed. Defs.’ Br.

5 16 U.S. C. § 1540(g)(2)(C) is part of the citizen suit

provisions of ESA. It provides in pertinent part: “No action may

be commenced under subparagraph (1) (C) of this section prior

to sixty days after written notice has been given to the

Secretary. . . . ” Subsection (1)(C) provides that a person may

commence a civil suit on his own behalf “against the Secretary

where there is alleged a failure of the Secretary to perform, any

act or duty under section 1533 of this title which is not

discretionary with the Secretary.” Section 1533 generally relates

to the determination of endangered species and threatened

species.

— Oe eo 7

App. 53

in Supp. of Mot. to Dismiss Pls.’ Compl. at 14 n.4 (filed

1/29/93). The 60-day notice provided by plaintiffs in

November 1988 before the suit was filed is insufficient,

they assert, to cover both of the ESA claims set out in the

fourth amended complaint.

In Plaintiffs’ Opposition to Federal And Non-Federal

Defendants’ Motion to Dismiss at 12 n.6 (filed 4/15/93),

plaintiffs respond to defendants’ footnoted argument

asserting the 60-day notice should be interpreted flexibly.

See, e.g., Chesapeake Bay Found. v. Bethlehem Steel Corp., 652

F. Supp. 620, 628 (D. Md. 1987); Kitlutsisti v. Arco Alaska,

Inc., 592 F. Supp. 832, 842 (D. Alaska 1984), vacated on

other grounds, 782 F.2d 800 (9th Cir. 1986). The cases upon

which plaintiffs rely appear to no longer be the law.

Failure to provide timely written notice pursuant to

section 1540 is a jurisdictional defect. Save the Yaak Com-

mittee, 840 F.2d at 721. The purpose of the notice require-

ment is to provide agencies a 60-day nonadversarial

period to achieve compliance. Hallstrom v. Tillamook

County, 493 U.S. 20, 32 (1989).¢ Its requirements are strict

and may not be varied on equitable grounds. Id. at 27.

compliance may not be achieved by filing suit, providing

notice to the agency and then staying the case for 60 days.

Id. at 26.

® Although Hallstrom involved the 60-day provision

provided in the Resource Conservation and Recovery Act of

1976 (“RCRA”), 42 U.S.C. § 6972(b)(1), the Court noted that

many environmental statutes, including ESA, have the same 60-

day notice all derived from section 304 of the Clean Air

Amendments of 1978, 42 U.S.C. § 7604. Hallstrom, 493 U.S. at 23

n.1. The Ninth Circuit treats the 60-day notice period in RCRA

the same as ESA's. Save the Yaak, 840 F.2d at 721.

App. 54

Plaintiffs’ original complaint, filed December 21,

1988, did not contain an ESA claim. Their first amended

complaint, filed February 6, 1989, contained an ESA claim

and included as an exhibit their November 18, 1988 letter

to the Secretary of the Interior stating their intent to sue.

That letter indicated plaintiffs’ contention that endan-

gered species existed in the area affected by the renewal

contracts and that full compliance with ESA was required

prior to the execution of these contracts: “Notice is

hereby given that if full compliance is not achieved, some

or all of the above-mentioned organizations intend to file

an action pursuant to 16 U.S.C. § 1540(g) and other appli-

cable statutes.” Plaintiffs’ revised second amended com-

plaint, filed February 4, 1992, contains a similar ESA

claim.

Following the cross-motions for summary judgment

filed May 19, 1992, in which plaintiffs also argued that

the biological opinion finally conducted was inadequate,

defendants filed a status report raising the issue that

plaintiffs had moved in part on their ESA claim arguing

that the completed biological opinion was inadequate,

but that their complaint had never been amended to state

such a claim. Plaintiffs were thus granted leave to file a

third amended complaint. This complaint, filed June 17,

1992, alleges violations of ESA both for defendants’ fail-

ure to conduct appropriate environmental review under

ESA prior to contract renewal, and also that the October

15, 1991 biological opinion was inadequate. However,

plaintiffs have not pointed to anything in the record

indicating that they have notified defendants of their

intention to file an ESA claim based on an inadequacy

App. 55

theory. Under these circumstances, and following Hall-

strom, several cases suggest that plaintiffs may not be able

to proceed on the inadequacy theory of their ESA claim.

See Monongahela Power Co. v, Reilly, 980 F. 2d 272, 275 n.2

(4th Cir. 1992). But see Dagge v. City of Burlington, 935 F.2d

1343 (2d Cir. 1991), rev'd in part on other grounds, 112 S. Ct.

2638 (1992); Zands v. Nelson, 779 F. Supp. 1254 (S.D. Cal.

1991). Arguably, plaintiffs may be able to demonstrate

compliance with the notice Provision. See, e.g., Klickitat

County v. Columbia River Gorge Comm'n, 770 F. Supp. 1419,

1424 (E.D. Wash. 1991); Birkenfeld Trust v. Bailey, __ F.

Supp. __, 1993 WL 275877 at 10 (E.D. Wash. May 27,

1993). Nevertheless, as the record now stands, this court

is unable to make that determination or to risk putting

this determination off indefinitely. Cf. Hallstrom, 493 U.S.

at 32 (rejecting plaintiffs’ plea not to dismiss the case on

notice grounds because the case was a complex environ-

mental case that had proceeded for four years and

resulted in a determination on the merits).

Because this significant argument was raised by

defendants in a footnote, however, the court concludes

that further briefing on this issue is appropriate. Thus,

not later than twenty (20) days from the effective date of

this order, plaintiffs shall file with the court a memoran-

dum setting forth their position on the issue of whether

under the circumstances of this case, ESA’s 60-day notice

requirement is applicable to plaintiffs’ inadequate biolog-

ical opinion claim under ESA, and if they assert that they

have in fact satisfied that requirement, shall provide

the relevant evidence. Not later than twenty (20) days

thereafter, defendants shall respond to plaintiffs’

App. 56

memorandum and evidence, if any. The court will there-

after take the matter under submission without hearing.

Ill

VALIDATION OF THE RENEWAL CONTRACTS

Detendants argue that through the CVP Improve-

ment Act, Congress implicitly affirmed or validated the

renewal contracts and therefore, this court may not

invalidate those contracts for failure to comply with

NEPA or ESA. In support of this argument, defendants

point to the several places in the CVP Improvement Act

where Congress evidenced its understanding that several

contracts had already been renewed and assumed their

continued existence.” Because Congress enacted

7 Examples of provisions of the CVP Improvement Act

dealing with existing contracts include section 3404 (c) (1)

which provides: “With respect to all contracts renewed by the

Secretary since January 1, 1988, the Secretary shall incorporate

in said contracts a provision requiring payment of the charge

mandated in subsection 3406(c) and subsection 3407(b) of this

title and all other modifications needed to comply with existing

law, including provisions of this title. T’ us title shall be deemed

‘applicable law’ as that term is used in Article 14(c) of contracts

renewed by the Secretary since January 1, 1988.”

In mandating compliance with law in the renewal of

contracts, section 3404 (c) (2) provides: “Upon renewal of any

long-term repayment or water service contract . . . the Secretary

shall incorporate all requirements imposed by existing law,

including provisions of this title, within such renewed

contracts. The Secretary shall also administer all existing, new

and renewed contracts in conformance with the requirements

and goals of this title.”

In discussing contract provisions to encourage early

renewal, section 3404(c)(3) provides: “Provided however, That

;

App. 57

legislation affecting those contracts, defendants urge,

Congress did not contemplate that they could be invali-

dated wy this suit; that in fact, Congress’ recognition of

those contracts suggests it meant to affirm them.

It is not disputed that Congress has the authority to

validate contracts which otherwise would be void. In

McNair v. Knott, 302 U.S. 369, 372-73 (1937), the Court

explained

There is nothing novel or extraordinary in

the passage of laws by the Federal Government

and the States ratifying, confirming, validating,

or curing defective contracts. Such statutes, usu-

ally designated as “remedial,” “curative,” or

“enabling,” merely remove legal obstacles and

permit parties to carry out their contracts

according to their own desires and intentions.

See also Swave & Hoyt v. United States, 300 U.S. 247, 301-02

(1937) (Congress may ratify actions which it might have

otherwise authorized); 15 Williston on Contracts § 1758,

Effect of Illegal Performance Becoming Legal (“It is within

the power of a legislature to validate an existing contract

made in violation of the law theretofore in force... . ”)

und 6A Corbin on Contracts § 1532, Effect of a Change in

the Law, or other Subsequent Factors, Upon an Illegal Bargain

— Ratification (while mere repeal of prohibitory statute

does not validate a contract contemplating such a prohib-

ited act, where statute expressly or impliedly ratifies

contracts, contract is validated).

this paragraph shal' not apply to contracts renewed after

January 1, 1988, and prior to the date of enactment of this

App. 58

The parties do not identify, nor has this court's inde-

pendent research uncovered, cases which provide stan-

dards for determi*ing when an act of Congress validates

an otherwise illegal contract. Examples gleaned from case

law, however, suggest that the validation must be rela-

tively explicit.

In Portland Audubon Soc. v. Hodel, 866 F.2d 302 (9th

Cir.), cert. denied, 492 U.S. 911 (1989), environmental

groups sought to enjoin harvesting and sale of old-

growth forests as a violation of NEPA and other statutes.

In response to the litigation, Congress included in a con-

tinuing budget resolution language that, in essence,

barred federal courts from hearing several of plaintiffs’

claims.*®

The Ninth Circuit explained that

The statute merely precludes judicial review

when the only basis upon which the plaintiffs

seek review is that the plan did not incorporate

newly discovered information . . . not available

to the BLM when the plan was adopted.

Id. at 307. The court concluded that because the statute

did not exclude challenges to timber sales, the statute did

not amount to an implied repeal of those environmental

laws otherwise applicable to this project.

8 The statute provided in relevant part: “There shall be no

[judicial] challenges to any existing plan on the sole basis that

the plan in its entirely is outdated, or in the case of the Bureau of

Land Management, solely on the basis that the plan does not

incorporate information available subsequent to the completion

of the existing pian: Provided further, That any and all particular

activities to be carried out under existing plans may

nevertheless be challenged.

App. 59

Other examples of court’s review of Congress’

attempt to ratify a federal agency's actions have similarly

required specificity. In EEOC v. Westinghouse Elec. Corp.,

765 F. 2d 389 (3d Cir. 1985), the EEOC brought an action

against a private employer which defended on the

grounds that under a reorganization plan the EEOC

lacked authority to bring such a suit. Pending appeal,

Congress passed a statute retroactively ratifying the

EEOC’s actions.® Given the specificity of the statute, the

Third Circuit had no difficulty concluding that Congress

intended the statute to ratify EEOC’s actions. Id. at 391.

Congress is clearly aware of how to validate other-

wise invalid contracts, see, e.g., Utter v. Franklin, 172 U.S

416, 422 (1899); Seese v. Bethlehem Steel Co., 168 F.2d 58, 64

(4th Cir. 1948); Cleveland-Cliffs Iron v. Chicago & N.W

Transp. Co., 581 F. Supp. 1144, 1151 (W.D. Mich. 1984). See

also West Side Belt Railroad Co. v. Pittsburgh Construction

Co., 219 U.S. 92, 100 (1911) (state statute providing that

certain contracts previously entered by foreign corpora-

tions are valid and binding). Moreover, Congress is cer-

tainly aware of how to carve out exceptions to federal

environmental laws. See Stop H-3 Ass'n, 870 F.2d at 1430.

° The statute provided: “Section 1. The Congress hereby

ratifies and affirms as law each reorganization plan that has,

prior the date of enactment of this Act, been implemented

pursuant to the provisions of chapter 9 of Title 5, United States

Code. . . . section 2. Any action taken prior to the date of

enactment of this Act pursuant to a reorganization plan that is

ratified and affirmed by section 1 shall be considered to have

been taken pursuant to a reorganization expressly approved by

Act of Congress.” Id. at 391 (citing Pub. L. No. 98-532, 98 Stat.

2705 (1984)).

App. 60

Here, while the plain terms of the CVP Improvement

Act demonstrate that Congress knew renewal contracts

existed, no provisions mandate that they remain in effect

or affirm these contracts. Clearly, Congress could have,

but did not, specifically provide that notwithstanding

NEPA, ESA or other statutes, those contracts previously

entered into are to remain in full force and effect so long

as they are in compliance with the CVP Improvement

Act. Because it would do no violence to the CVP

Improvement Act, nor render any of its language sur-

plusage to rule these contracts invalid, the Act’s provi-

sions relating to these contracts may be construed as

merely establishing a procedure for dealing with these

contracts if, and only if, they are not invalidated.

Defendants’ argument falters for yet another reason.

A necessary consequence of their contention is that Con-

gress meant to affirm these contracts regardless of

whether they were entered into in violation of other

environmental statutes. Put another way, the defendants

are contending that the CVP Improvement Act renders

NEPA and ESA inapplicable to these contracts. Standard

rules of statutory construction, however, counsel against

such a repeal by implication. It is fundamental that

“{rlepeals by implication . . . are not favored.” In re

Glacier Bay, 944 F.2d 577, 581 (9th Cir. 1991). Two general

categories of repeal by implication exist:

(1) where provisions in the two acts are in

irreconcilable conflict, the later act to the extent

of the conflict constitutes an implied repeal of

the earlier one; and (2) where the later act cov-

ers the whole subject of the earlier one and is

App. 61

clearly intended as a substitute, it will operate

as a repeal of the earlier act.

Id. (quoting Radzanower v. Touche Ross & Co., 426 U.S. 148,

154 (1976)). In each of these circumstancest the intent of

the legislature to repeal must be “clear and manifest.” Id.

See also TVA v. Hill, 437 U.S. 153, 189-93 (1978) (Congress’

continuing appropriations for dam did not implicitly cre-

ate exception to ESA - nothing in TVA appropriations

demonstrates intent to repeal ESA)

There is nothing in the CVP Improvement Act which

suggests that Congress meant to weaken any of its

broader environmental statutes. Indeed, the CVP

Improvement Act refers several times to the “require-

ments imposed by existing law,” see, e.g., section

3404(c)(2), thereby acknowledging the continued viability

of those statutes as they apply to the projects regulated

under the Act. Under these circumstances, it cannot be

said that in enacting the CVP Improvement Act, Congress

intended to repeal by implication the environmental stat-

utes at issue in this case as they apply to the CVP.

While it may be argued that in ruling that the CVP

Improvement Act did not ratify or affirm these previ-

ously renewed contracts, the Court is implicitly modify-

ing the language of the CVP Improvement Act referring

to “all contracts renewed by the Secretary since January

1, 1988” to refer to all “valid contracts,” such a reading

- does no violence to the statute. Contracts are presumed to

‘ be legal and enforceable, Walsh v. Schlecht, 429 U.S. 401,

408 (1977) (citing 6A Corbin, Contracts §§ 1499, 1533

(1962)) and nothing suggests that Congress intentionally

App. 62

omitted words connoting validity. Simply put, an inter-

pretation that the word contract as used in the Act

imports notions of validity is consonant with Congress’

expressed intent to mandate compliance with existing

environmental statutes when renewing long-term water

contracts.

Thus, absent more specific direction from Congress, I

cannot conclude that the CVP Improvement Act explicitly

or implicitly affirmed these contracts regardless of

whether they were entered into in violation of other

federal environmental statutes.

SECTION 8/SECTION 5937

Defendants next argue that the CVP Improvement

Act preempts plaintiffs’ claim under Section 8 of the

Reclamation Act of 1902!° insofar as it mandates

10 Section 8 provides: “Nothing in this Act shall be

construed as affecting or intended to affect or to in any way

interfere with the laws of any State or Territory relating to the

control, appropriation, use or distribution of water used in

irrigation, or any vested right acquired thereunder, and the

Secretary of the Interior, in carrying out the provisions of this

Act, shall proceed in conformity with such laws, and nothing

herein shall in any way affect any right of any State or of the

Federal Government or of any landowner, appropriator, or user

of water in, to, or from any interstate stream or the waters

thereof: Provided, That the right to the use of water acquired

under the provisions of this Act shall be appurtenant to the land

irrigated and beneficial use shall be the basis the measure and

limit of the right.” 43 U.S.C. § 383 (up until “Provided”), § 372

(following “Provided”).

App. 63

compliance with Cal. Fish & Game Code § 5937.1!

Because specific provisions of the CVP Improvement Act

require the Secretary to prepare a comprehensive plan to

address fishery issues in the San Joaquin River, yet limit

his authority to release water from the Friant Dam in

furtherance of the Act, defendants argue that plaintiffs’

section 5937 claim is preempted? insofar as it seeks

release of water from Friant Dam to re-establish flows in

the San Joaquin River for fish.!> Defendants note that the

CVP Improvement Act mandates payment by water users

of a surcharge as a substitute for instream flows and

argue that requiring a release pursuant to section 5937 to

'l Cal. Fish & Game Code § 5937 provides: “The owner of

any dam shall allow sufficient water at all times to pass through

a fishway, or in the absence of a fishway, allow sufficient water

to pass over, around or through the dam, to keep in good

condition any fish that may be planted or exist below the dam.

During the minimum flow of water in any river or stream,

permission may be granted by the department to the owner of

any dam to allow sufficient water to pass through a culvert,

waste gate, or over or around the dam, to keep in good

condition any fish that may be planted or exist below the dam,

when, in the judgment of the department, it is impracticable or

detrimental to the owner to pass the water through the

fishway.”

12 A more appropriate characterization of the issue is

whether previous federal law has been displaced. As I explain

infra, however, that issue is resolved by application of

ccaventional preemption principles.

8 As stated earlier, plaintiffs’ fourth request for relief

contained in its Fourth Amended Complaint seeks

“[pjreliminary and injunctive relief requiring the Bureau to

comply fully with Section 8, Section 5937 and the APA by

allowing sufficient water to pass over, around or through the

Dam to keep in good condition fish life before Friant Dam.”

App. 64

establish these flows at this time would be inconsistent

with Congress I intention that the flow would not be

resumed for several years.

Plaintiffs and amicus California State Water

Resources Control Board argue that the CVP Improve-

ment Act section prohibiting the Secretary from making

releases for the re-establishment of fish below Friant Dam

pursuant to section 5937 pending a further act of Con-

gress is limited to releases made “as a measure to imple-

ment this title.” Moreover, they argue, throughout the

CVP Improvement Act, Congress mandates compliance

with state law and amends the goals of the Reclamation

Act to include the preservation and establishment of fish

and wildlife, which are the same goals as section 5937.

Section 3406, titled “Fish, Wildlife and Habitat Resto-

ration” establishes goals and a plan for developing and

protecting fish and wildlife in relation to the CVP gener-

ally and in regard to the Friant Dam specifically."

14 Section 3406(b) provides: “Fish and Wildlife Restoration

Activities. - The secretary, immediately upon the enactment of

this title, shall operate the Central Valley Project to meet all

obligations under State and Federal law, including but not

limited to the Federal Endangered Species Act, 16 U.S.C. § 1531,

et seg., and all decisions of the California State Water Resources

Control Board establishing conditions on applicable licenses

and permits for the project. The Secretary, in consultation with

other State and Federal agencies, Indian tribes, and affected

interests, is further authorized and direct to:

“(1) develop within three years of enactment and

implement a program which makes all reasonable efforts to

ensure that, by the year 2002, natural production of anadromous

fish in Central Valley rivers and streams will be sustainable, on

a long-term basis, at levels not less than twice the average levels

App. 65

Subsection (c) of section 3406 specifically provides a

means for re-establishing fish and wildlife in the San

Joaquin River between Friant Dam and the Mendota

Pool.’* The issue tendered is whether these statutes pre-

empt application of California law.

attained during the period of 1967-1991; Provided, That this goal

shall not apply to the San Joaquin River between Friant Dam

and the Mendota Pool, for which a separate program is

authorized under subsection 3406(c) of this title... . ”

8 Section 3406 provides: “San Joaquin and Stanislaus

Rivers. —- The Secretary shall, by not later than September 30,

1996: (1) develop a comprehensive plan, which is reasonable,

prudent and feasible, to address fish, wildlife, and habitat

concerns on the San Joaquin River, including but not limited to

the streamflow, channel, riparian habitat, and water quality

improvements that would be needed to reestablish where

necessary and to sustain naturally reproducing anadromous

fisheries from Friant Dam to its confluence with the San

Francisco Bay/Sacramento San Joaquin Delta Estuary. Such

plan shall be developed in cooperation with the California

Department of Fish and Game and in coordination with the San

Joaquin River Management Program under development by the

State of California; shall comply with and contain any

documents required by the National Environmental Policy Act

and contain findings setting forth the basis for the Secretary's

decision to adopt and implement the plan as well as

recommendations concerning the need for subsequent

congressional action, if any; and shall incorporate, among other

relevant factors, the potential contributions of tributary streams

as well as the alternatives to the investigated under paragraph

(2) of this subsection. During the time that the Secretary is

developing the plan provided for in this subsection, and until

such time as the Congress has authorized the Secretary to

‘implement such plan, with or without modifications, the

; Secretary shall not, as a measure to implement this title, make releases

‘and for the restoration of flows between Gravelly Ford and the

Mendota Pool and shall not thereafter make such releases

App. 66

Although the parties each focus on preemption anal-

ysis, each assumes a preliminary issue which must be

examined first. Plaintiffs’ section 8 claim asserts that the

Bureau, as owner of the Friant Dam, has violated the APA

in failing to comply with Cal. Fish & Game Code § 5937.

When Congress passed the CVP Improvement Act, it

provided that the new Act “shall amend and supplement

the Act of June 17, 1902, and Acts supplementary thereto

and amendatory thereof.” CVP Improvement Act

§ 3408(g). Section 8, of course, is part of that 1902 Act.

There is no indication, however, that the CVP Improve-

ment Act was intended to alter section 8 analysis. Nev-

ertheless because Section 8 has been interpreted to

mandate federal compliance with state water law so long

as the conditions imposed are consistent with congres-

sional directives, California v. United States, 438 U.S. 645,

679 (1978); see also United States v. State of Cal., State Water

Resources, 694 F.2d 1171, 1182 (9th Cir. 1982); NRDC, 791

F. Supp. at 1435, the provisions of CVP Improvement Act

§ 3406 relating to releases of water for fish at Friant Dam

as a measure to implement this title without a specific Act of Congress

authorizing such releases. In lieu of such requirement, and until

such time as flows of sufficient quantity, quality and timing are

provided at and below Gravelly Ford to meet the anadromous

fishery needs identified pursuant to such plan, if any, entities

who receive water from the Friant Division of the Central Valley

Project shall be as

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