The Ninth Circuit Interprets 'Agency Action' Under The Endangered Species Act - Again

On July 17, 2012, the Ninth Circuit ruled in Natural Resources Defense Council v. Salazar that the U.S. Bureau of Reclamation's renewal of water delivery contracts with senior priority water rights holders was not "agency action" under Section 7 of the Endangered Species Act ("ESA"). The court ruled that since the Bureau lacked discretion over whether to approve the renewals, there was no duty to consult with the U.S. Fish & Wildlife Service regarding the potential impacts on the delta smelt, an endangered fish species.

The decision is a strong counterbalance to the Ninth Circuit's June 1, 2012, opinion in Karuk Tribe of California v. U.S. Forest Service, 681 F.3d 1006 (9th Cir. 2012), which adopted an expansive definition of "agency action" under the ESA. For more information on this decision, please read our recent update "Ninth Circuit Expands 'Agency Action' for Endangered Species Act Consultation".

The decision also ruled that environmental plaintiffs groups lacked standing to challenge the Bureau's decision to renew other water service contracts. The court reasoned that there was no "causal connection" between the renewal of these contracts and possible harm to the delta smelt, as the Bureau retained the authority to protect fish by reducing water deliveries during drought years.

The decision is a victory for water users in continuing litigation over water deliveries and delta smelt protection in California's Central Valley that has lasted the better part of a decade.

Background

The Bureau operates the Central Valley Project ("CVP"), one of the world's largest water storage and transport systems, which consists of a network of dams, reservoirs and pumping facilities that provides water for the irrigation of about one-third of California's farmland. The CVP is managed in coordination with the State Water Project, a companion system operated by the California Department of Water Resources that provides drinking water for 25 million Californians. This federal/state cooperation began in the 1930s when, due to state budgetary constraints, the Bureau assumed control of the CVP. At that time, the Bureau had to obtain water rights under California state law in order to operate the CVP. Preexisting water rights owners claimed priority rights to available water. As part of a settlement agreement, the Bureau and those senior water rights owners entered into a series of 40-year water delivery contracts ("Settlement Contracts"). In addition, the...