Agency discretion, water, & endangered species

A month ago, the Ninth Circuit Court of Appeals decided a case that will help ensure that the Endangered Species Act remains applicable to federal agency actions affecting western rivers. The case involved the Bureau of Reclamation’s renewal of certain water supply contracts from the massive Central Valley Project (CVP) in California. A panel of three judges from the same court had earlier held that Reclamation could renew these contracts without engaging in ESA “consultation” to determine the impact of renewal on protected fish species. When environmental groups challenged that decision, the Ninth Circuit granted “en banc” review (before a larger panel of judges) and held in NRDC v. Jewell that consultation was required.

Why is that decision significant? Simply put, no environmental law has had as much impact on western rivers–or created as much controversy–as section 7 of the ESA. This provision requires federal agencies to “consult” on the effects of their proposed actions on threatened or endangered species, and prohibits federal actions that would jeopardize the survival of listed species. Back in the 1970s, the Supreme Court said this language reflects Congress’ judgment that saving endangered species should be “the highest of priorities.” In that same case the Court stated that the language of section 7 “admits of no exception,” but in a later case, the Court essentially said that an exception does exist for actions that a federal agency has no choice but to take. Thus, federal agencies now have an escape hatch, allowing them to evade their section 7 duties if they can show that their actions are “non-discretionary.”

The Ninth Circuit’s original decision suggested that a federal agency could open this escape hatch rather easily, if its discretion to take an action were “substantially constrained.” The three-judge panel found that in renewing forty-year contracts for CVP water supply, Reclamation had no ability to change the quantity of water to be delivered, so consultation was not required. But the en banc panel unanimously rejected that reasoning, saying that consultation was required so long as the agency has “some discretion” to act for the benefit of listed species. And it said that Reclamation had some discretion to modify contract terms other than quantity–for example, by changing the price of water or the timing of deliveries–or even to refuse to renew the contracts at all.

But the most important questions about Reclamation’s discretion are about project operations, not contract renewals. Most of the agency’s water supply contracts are “repayment” contracts that do not need to be renewed, so the contracts themselves do not raise the exact issue involved in the recent Ninth Circuit case. For most projects, the question will be whether Reclamation has enough discretion in operations–that is, in storing and releasing water for irrigation and/or other purposes–that it can make changes for the benefit of listed species affected by those operations. The Ninth Circuit decision means that if Reclamation has some discretion in its operations, it must consult on them.

The discretion issue was the key focus of the Rio Grande silvery minnow litigation a decade ago. Since then the Supreme Court issued its 2007 decision that shed light on the exemption from section 7 for non-discretionary actions. I then wrote a long article, Dams, Duties, and Discretion arguing that Reclamation’s project operations should be viewed as discretionary actions for purposes of section 7 compliance. There will be more litigation, perhaps from the Middle Rio Grande, over the application of the non-discretionary exemption to federal water project operations. For now, the Ninth Circuit was right to keep the exemption narrow.