Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_12-cv-01303/USCOURTS-caed-1_12-cv-01303-4/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:4332 Environmental Policy - Coop of Agency Reports

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

PACIFIC COAST FEDERATION OF

FISHERMEN’S ASSOCIATIONS and

SAN FRANCISCO CRAB BOAT

OWNERS ASSOCIATION, INC, 

 Plaintiffs, 

 v. 

UNITED STATES DEPARTMENT OF

THE INTERIOR and UNITED STATES

BUREAU OF RECLAMATION, 

 Defendants,

 and

WESTLANDS WATER DISTRICT, 

SAN LUIS WATER DISTRICT, and

PANOCHE WATER DISTRICT,

Intervenor Defendants.

1:12-CV-01303-LJO-MJS

MEMORANDUM DECISION AND 

ORDER RE MOTIONS TO DISMISS 

(DOCS. 45 & 46)

I. INTRODUCTION

This case concerns approval by the United States Department of the Interior and its member 

agency the United States Bureau of Reclamation (collectively, “Federal Defendants,” “Reclamation,” or 

the “Bureau”) of eight (8) interim renewal contracts (“Interim Contracts”) which authorize delivery of 

water from federal reclamation facilities to certain water districts served by the federal Central Valley 

Project (“CVP”) and provide for repayment of capital construction costs, as well as operational and 

maintenance expenses associated with CVP facilities. First Amended Complaint (“FAC”), Doc. 47 at ¶ 

2. Plaintiffs allege that Federal Defendants’ issued a deficient Environmental Assessment (“EA”) and 

associated Finding of No Significant Impact (“FONSI”) prior to approval of the Interim Contracts in 

violation of the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4321 et seq. Plaintiffs also 

allege that Federal Defendants should have prepared an Environmental Impact Statement (“EIS”), rather 

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than an EA/FONSI, in connection with approval of the Interim Contracts. 

Before the Court for decision is Federal Defendants’ motion to dismiss the FAC pursuant to Fed. 

R. Civ. P. 12(b)(1), (6), and/or (7). Doc. 45. Intervenor Defendants Westlands Water District, San Luis 

Water District, and Panoche Water District join the Federal Defendants and add one unique argument to 

the dispute. Doc. 46. Plaintiffs oppose. Doc. 48. The Bureau and Defendant Intervenors replied. Docs. 

49 & 50. The motions were taken under submission on the record without a hearing pursuant to Local 

Rule 230(g). Doc. 43 at 2. 

II. BACKGROUND

The CVP is “a system of dams, reservoirs, levees, canals, pumping stations, hydropower plants, 

and other infrastructure that distributes water throughout California’s vast Central Valley.” San Luis 

Unit Food Producers v. United States, --- F.3d ---, 2013 WL 765206, *1 (9th Cir. Mar. 1, 2013) (internal 

citation and quotation omitted). “The Bureau is the agency within the Department of the Interior charged 

with administering the CVP.” Id.

Congress initially prioritized the purposes of the CVP as follows: “[T]he said dam and 

reservoirs shall be used, first, for river regulation, improvement of navigation, and flood 

control; second, for irrigation and domestic uses; and, third, for power.” CVP Act § 2 

(1937) (emphasis added). However, Congress amended the CVP Act in 1992 with the 

Central Valley Project Improvement Act, Pub. L. No. 102–575, 106 Stat. 4600 

(“CVPIA”), which re-prioritized the purposes of the CVP. O'Neill v. United States, 50 

F.3d 677, 686 (9th Cir. 1995). The hierarchy of purposes now reads, “[T]he said dam and 

reservoirs shall be used, first, for river regulation, improvement of navigation, and flood 

control; second, for irrigation and domestic uses and fish and wildlife mitigation, 

protection and restoration purposes; and, third, for power and fish and wildlife 

enhancement.” CVPIA § 3406(a)(2) (emphasis added); CVP Act § 2. The CVPIA also 

requires that the Bureau operate the CVP 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 

seq.” CVPIA § 3406(b).

Id. at *2.

The CVPIA also provides for renewal of existing long-term water service contracts for 

successive periods of up to 25 years. CVPIA § 3404(c)(1), Pub. L. No. 102–575, 106 Stat. 4600 (1992). 

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The CVPIA specifically called for completion of a programmatic EIS pursuant to NEPA that would 

analyze 

the direct and indirect impacts and benefits of implementing this title, including all fish, 

wildlife, and habitat restoration actions and the potential renewal of all existing Central 

Valley Project water contracts. Such statement shall consider impacts and benefits within 

the Sacramento, San Joaquin, and Trinity River basins, and the San Francisco 

Bay/Sacramento-San Joaquin River Delta Estuary. 

CVPIA § 3409. Renewal of any long-term (i.e., 25-year) contract may not be authorized by Reclamation 

“until appropriate environmental review, including the preparation of the [PEIS] required in section 

3409... has been completed.” CVPIA § 3404(c)(1). This requirement culminated in adoption of the 

Central Valley Project Improvement Act Final Programmatic Environmental Impact Statement (“CVPIA 

PEIS”), which was completed in 1999. FAC at p.12. In addition, Reclamation began the process of 

preparing project-level EISs for long-term contract renewals for the West San Joaquin Division and San 

Luis Contractors. Id. In September 2005, Reclamation prepared and released a draft EIS for these longterm contract renewals, but no final EIS has yet been adopted. See id. 

The CVPIA provides for the eventuality that long-term contracts might expire prior to 

completion of appropriate environmental review: 

Contracts which expire prior to the completion of the environmental impact statement 

required by section 3409 may be renewed for an interim period not to exceed three years 

in length, and for successive interim periods of not more than two years in length, until 

the environmental impact statement required by section 3409 has been finally completed, 

at which time such interim renewal contracts shall be eligible for long-term renewal as 

provided above. Such interim renewal contracts shall be modified to comply with 

existing law, including provisions of this title. 

CVPIA § 3404(c)(1).

On or about February 29, 2012, Reclamation issued a FONSI and EA regarding the “Three Delta 

Division and Five San Luis Unit Water Service Interim Renewal Contracts 2012-2014.” FAC ¶ 25. 

These documents purport to “tier” off of the CVPIA PEIS. Doc. 4-1, FONSI at 2.

1 Based on the FONSI 

 

1 The FONSI and EA, Doc. 4-1, are public records subject to judicial notice for their content. See Ctr. for Envtl. Law & 

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and EA, Reclamation approved the eight Interim Contracts at issue in this case.2Id. Water delivery 

pursuant to the new two-year Interim Contracts commenced on March 1, 2012. Id.

III. DISCUSSION

A. Waiver. 

1. Standard of Decision. 

Federal Defendants appear to invoke Federal Rule of Civil Procedure 12(b)(1), which provides 

for dismissal of an action for “lack of subject-matter jurisdiction,” to argue that the FAC should be 

dismissed because Plaintiffs’ failed to exhaust their administrative remedies. Although “[t]here is some 

uncertainty regarding whether a failure to exhaust administrative remedies is properly brought in a Rule 

12(b)(1) motion as a jurisdictional defect, or in a Rule 12(b)(6) motion for failure to state a claim,” Hall 

v. Sebelius, 689 F.Supp.2d 10, 21-22 (D.D.C. 2009) (citing cases), the Ninth Circuit appears to treat

failure to exhaust under the Administrative Procedure Act (“APA”)3as a “legal question,” subject to 

Rule 12(b)(6), rather than as a jurisdictional issue, see Nw. Envtl. Advocates v. E.P.A., 537 F.3d 1006, 

1014 (9th Cir. 2008) (distinguishing between review of questions of subject matter jurisdiction and the 

“legal question of whether a plaintiff has exhausted the necessary administrative remedies”). 

Dismissal under Rule 12(b)(6) is proper where there is either a “lack of a cognizable legal 

theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balisteri v. Pacifica 

Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a 

claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the 

light most favorable to the party opposing the motion, and resolves all doubts in the pleader’s favor. 

 

Policy v. U.S. Bureau of Reclamation, 655 F.3d 1000, 1010 n. 5 (9th Cir. 2011) (taking judicial notice of draft EIS).

2 The Interim Contracts are with the City of Tracy, Pajaro Valley Water Management Agency, Santa Clara Valley Water 

District, Westlands Water District, Westlands Water District Distribution District #1, and Westlands Water District 

Distribution District #2. FAC at ¶ 25. 

3 Because NEPA does not provide a private right of action, NEPA claims must be brought under the APA. Cetacean Cmty. v. 

Bush, 386 F.3d 1169, 1179 (9th Cir. 2004); Cent. Delta Water Agency v. U.S. Fish & Wildlife Serv., 653 F. Supp. 2d 1066, 

1089 (E.D. Cal. 2009).

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Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). To survive a 12(b)(6) motion to 

dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff 

pleads factual content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Even if this aspect of Federal Defendants’ motion is subject to the Rule 12(b)(1) standard, this 

would be of little practical import. Faced with a Rule 12(b)(1) motion, a plaintiff bears the burden of 

proving the existence of the court’s subject matter jurisdiction. Thompson v. McCombe, 99 F.3d 352, 

353 (9th Cir. 1996). A challenge to subject matter jurisdiction may be facial or factual. White v. Lee, 227 

F.3d 1214, 1242 (9th Cir. 2000). As explained in Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1038 

(9th Cir. 2004):

In a facial attack, the challenger asserts that the allegations contained in a complaint are 

insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, 

the challenger disputes the truth of the allegations that, by themselves, would otherwise 

invoke federal jurisdiction.

“If the challenge to jurisdiction is a facial attack, i.e., the defendant contends that the allegations of 

jurisdiction contained in the complaint are insufficient on their face to demonstrate the existence of 

jurisdiction, the plaintiff is entitled to safeguards similar to those applicable when a Rule 12(b)(6) 

motion is made.” Cervantez v. Sullivan, 719 F. Supp. 899, 903 (E.D. Cal. 1989), rev’d on other grounds, 

963 F.2d 229 (9th Cir. 1992). “The factual allegations of the complaint are presumed to be true, and the 

motion is granted only if the plaintiff fails to allege an element necessary for subject matter 

jurisdiction.” Id.; see also Cassirer v. Kingdom of Spain, 580 F.3d 1048, 1052 n. 2 (9th Cir. 2009), rev’d 

on other grounds en banc, 616 F.3d 1019 (9th Cir. 2010) (applying Iqbal, 556 U.S. 662, to a facial 

motion to dismiss for lack of subject matter jurisdiction). Here, although the parties do reference 

documents subject to judicial notice and/or attached to the Complaint, Defendant does not offer any 

additional evidence in support of its jurisdictional arguments. This is a facial Rule 12(b)(1) attack.

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2. Exhaustion Requirement and Waiver Jurisprudence. 

The APA requires that plaintiffs exhaust administrative remedies before bringing suit in federal 

court. Great Basin Mine Watch v. Hankins, 456 F.3d 955, 965 (9th Cir. 2006). In the NEPA context, this 

means that a plaintiff “must structure [its] participation so that it ... alerts the agency [of its] positions 

and contentions, in order to allow the agency to give the issue[s] meaningful consideration.” Id. (quoting 

Dep't of Transp. v. Public Citizen, 541 U.S. 752, 764–65 (2004)). The purpose of the exhaustion 

requirement is to avoid premature claims and to ensure the agency is given “a chance to bring its 

expertise to bear to resolve a claim.” Id. “[A] claimant need not raise an issue using precise legal 

formulations, as long as enough clarity is provided that the decision maker understands the issue raised.” 

Lands Council v. McNair, 629 F.3d 1070, 1076 (9th Cir. 2010)(internal quotation and citation omitted). 

Accordingly, “alerting the agency in general terms will be enough if the agency has been given a chance 

to bring its expertise to bear to resolve the claim.” Id. If a plaintiff fails to meet exhaustion requirements, 

its claim is waived. See Public Citizen, 541 U.S. at 764–65.

Several district courts, including several within this Circuit and one within this District, have 

concluded that comments submitted by third parties may form the basis of a NEPA lawsuit, so long as 

the comments brought sufficient attention to the issue. See Wyoming Lodging and Restaurants Ass'n v. 

United States Dep’t of Interior, 398 F. Supp. 2d 1197, 1210 (D. Wyo. 2005) (“[S]o long as the agency is 

informed of a particular position and has a chance to address that particular position, any party may 

challenge the action based upon such position whether or not they actually submitted a comment 

asserting that position.”); Benton County v. United States Dept. of Energy, 256 F. Supp. 2d 1195, 1198-

99 (E.D. Wash. 2003) (“[A] plaintiff, or another, must bring sufficient attention to an issue to stimulate 

the agency’s attention and consideration of the issue during the environmental analysis comment 

process.”)(emphasis added); Conservation Congress v. United States Forest Service, 555 F. Supp. 2d 

1093, 1106 (E.D. Cal. 2008)(rejecting agency argument that plaintiffs failed to raise an issue at the 

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administrative level because “[t]here is no need for a litigant to have personally raised the issue, so long 

as the issue was raised by another party and the agency had the opportunity to consider the objection”); 

see also Kern v. Bureau of Land Management, 38 F. Supp. 2d 1174, 1180 (D. Or. 1999)(“There is no 

need for a litigant to have personally raised the issue, so long as the issue was raised by another party 

and the agency had the opportunity to consider the objection.”), rev'd on other grounds 284 F.3d 1062 

(9th Cir.); see also City of Sausalito v. O'Neill, 211 F. Supp. 2d 1175, 1198, n. 3 (N.D. Cal. 2002), aff'd 

in part and rev'd in part on other grounds 386 F.3d 1186 (9th Cir. 2004) (where “all the issues were 

raised by some participant in the proceedings,” this “gave the agency an opportunity to address them in 

the administrative process prior to litigation).

4

Here, Plaintiffs point to a comment letter submitted by a coalition of other environmental groups 

on the “Draft EA/FONSI for the Three Delta Division and Five San Luis Unit Water Service Interim 

Renewal Contracts 2012-2014.” Doc. 34-4.5The content of the FAC appears to track the letter almost 

exactly, and the letter, although it “need not raise an issue using precise legal formulations,” certainly 

provides “enough clarity [to ensure] the decision maker understands the issue raised.” Lands Council, 

629 F.3d at 1076. Defendants do not suggest otherwise. 

Federal Defendants’ motion to dismiss the FAC for failure to exhaust, which has been joined by 

Defendant Intervenors, is DENIED. 

 

4

Plaintiffs cite this controlling line of cases concerning exhaustion by third parties in their opposition brief. Federal 

Defendants entirely fail to address these authorities in reply, focusing instead on the several other arguments Plaintiffs make 

against waiver. The Court need not address these other grounds, as this one is sufficient to find that Plaintiffs have not 

waived their claims in this case. Defendant Intervenors mention the third party exhaustion cases in their reply, Doc. 50 at 4, 

but confuse this line of cases with ‘Ilio’ulaokalani Coalition v. Rumsfeld, 464 F.3d 1083, 1092-93 (9th Cir. 2006), which held 

that some types of “procedural” NEPA violations are “so obvious that there is no need for a commentator to point them out 

specifically in order to preserve its ability to challenge a proposed action.” Ilio’ulaokalani Coalition and its “so obvious” 

holding are simply inapposite here, where a third party clearly and specifically raised the claims in the FAC during the 

comment period. It is undisputed that the third parties who sent the comment letter filed a lawsuit based upon the issues 

raised therein, North Coast Rivers Alliance v. Salazar, 2:12-cv-00001 MCE GGH, which they later voluntarily dismissed. 

Defendant Intervenors’ suggestion that this “cast[s] doubt” on the merits of this case, see Doc. 50 at 3, is irrelevant to the 

waiver issue. 

5 This letter was appended to the Final EA along with Reclamation’s response thereto. The EA and its appendices are public 

records subject to judicial notice for their existence and content, although not for the truth of the matters asserted therein. See 

supra note 1; see also Coalition for a Sustainable Delta v. McCamman, 725 F. Supp. 2d 1162, 1183-84 (E.D. Cal. 2010).

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B. Motion to Dismiss NEPA Claims.6

1. Legal Framework.

“NEPA is our ‘basic national charter for protection of the environment.’ ” Ctr. for Biological 

Diversity v. Nat'l Highway Traffic Safety Admin., 538 F.3d 1172, 1185(9th Cir. 2008) (quoting 40 C.F.R. 

§ 1500.1). “Although NEPA does not impose any substantive requirements on federal agencies, it does 

impose procedural requirements.” N. Idaho Cmty. Action Network v. U.S. Dept. of Transp., 545 F.3d 

1147, 1153 (9th Cir. 2008). “Through these procedural requirements, NEPA seeks to make certain that 

agencies will have available, and will carefully consider, detailed information concerning significant 

environmental impacts, and that the relevant information will be made available to the larger public

audience. ” Id. (internal citations and quotations omitted).

NEPA requires federal agencies to analyze the potential environmental impacts of any “major 

Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C).

Federal Defendants do not here dispute that approval of the Interim Contracts constituted a “major 

federal action.”7 When an agency takes major federal action, the agency must prepare an EIS “where 

there are substantial questions about whether a project may cause significant degradation of the human 

environment.” Native Ecosystems Council v. U.S. Forest Serv., 428 F.3d 1233, 1239 (9th Cir. 2005). An 

agency may choose to prepare an environmental assessment (“EA”) to determine whether an EIS is 

needed. 40 C.F.R. §§ 1501.4, 1508.9(b). An EA is meant to be a “concise public document ... that 

serves to,” among other things “[b]riefly provide sufficient evidence and analysis for determining 

whether to prepare an environmental impact statement or a finding of no significant impact.” 40 C.F.R. 

§ 1508.9; see also Bob Marshall Alliance v. Hodel, 852 F.2d 1223, 1225 (9th Cir.1988); 40 C.F.R. 

 

6 This aspect of Federal Defendants’ motion is subject to Rule 12(b)(6). The relevant standard is discussed above. 

7

Federal regulations implementing NEPA define the term “major federal action” to “include[] actions with effects that may 

be major and which are potentially subject to Federal control and responsibility.” 40 C.F.R. § 1508.18. “Actions include new 

and continuing activities, including projects and programs entirely or partly financed, assisted, conducted, regulated, or 

approved by federal agencies; new or revised agency rules, regulations, plans, policies, or procedures; and legislative 

proposals....” § 1508.18(a).

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1501.4(e).

2. The NEPA Claims in this Case. 

The FAC contains two separate NEPA claims. The first alleges Federal Defendants violated 

NEPA by preparing an inadequate EA. Specifically, Plaintiffs allege that the EA and FONSI were 

unlawful because:

(1) “The EA fails to identify and analyze the interim contracts’ principal environmental 

impacts because it assumes incorrectly that Reclamation’s continued delivery of water in 

the same quantities is the baseline or background against which to measure the interim 

contracts’ impacts.” FAC ¶ 33a.

(2) The EA fails to consider a reasonable range of alternatives, having considered only 

the Proposed Action and the No Action Alternative, which are effectively the same with 

one small pricing difference. Alternatives proposing reduced “quantities of water 

deliveries” and/or “alternatives that increased prices and thereby reduced the interim 

contractors’ demand for CVP water” were eliminated from consideration. FAC ¶ 33b; see 

also FAC ¶ 31 (the EA and FONSI are based “on the false premise that in renewing the 

interim contracts it had no discretion to reduce or eliminate water deliveries”). 

(3) The EA uses an “unduly narrow” study area, thereby ignoring the environmental 

impacts of the interim contracts’ water deliveries on the source watersheds, imperiled fish 

and wildlife living there, water quality and fish species in San Joaquin Valley 

watercourses, and on the Delta. FAC ¶ 33c.

(4) The EA failed to consider the effect of water deliveries on Reclamation’s compliance 

with other environmental laws, such as the ESA, the Clean Water Act, 33 U.S.C. § 1251 

et seq., and the Migratory Bird Treaty Act, 16 U.S.C. § 703 et seq. FAC ¶ 33d.

(5) The EA ignores the cumulative impacts of all the interim contract renewals. FAC ¶ 

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33e.

The Second Claim for Relief alleges generally that approval of each of the Interim Contracts “is 

a major federal action that may significantly affect the quality of the human environment” requiring 

preparation of an EIS, which indisputably has not occurred. FAC ¶¶ 35-37.

3. The No Action Alternative.8

Federal Defendants directly challenge Plaintiffs’ allegation that the EA utilized an improper “no 

action” alternative. Doc. 45 at 10-12. Among the alternatives required to be discussed in every EA or 

EIS is the “no action” alternative. 40 C.F.R. § 1502.14.

9

“A no action alternative in an [EA or] EIS 

allows policymakers and the public to compare the environmental consequences of the status quo to the 

consequences of the proposed action.” Ctr. for Biological Diversity v. U.S. Dept. of Interior, 623 F.3d 

633, 642 (9th Cir. 2010). “The no action alternative is meant to provide a baseline against which the 

action alternative” may be compared. Id. (internal citation and quotation omitted). 

The EA in this case defines the “No Action Alternative” as follows:

The No Action Alternative is the continued delivery of CVP water under the interim 

renewal of existing contracts which includes terms and conditions required by nondiscretionary CVPIA provisions. The No Action Alternative, therefore, consists of the 

interim renewal of current water service contracts that were considered as part of the 

Preferred Alternative of the CVPIA PEIS (Reclamation 1999a) adapted to apply for an 

interim period.

The CVPIA PEIS Preferred Alternative assumed that most contract provisions would be 

similar to many of the provisions in the 1997 CVP interim renewal contracts, which 

included contract terms and conditions consistent with applicable CVPIA requirements. 

In addition, provisions in the existing long term contracts that are specific to the San Luis 

Unit contracts regarding O&M of certain facilities and drainage service under the 1960 

San Luis Act would be incorporated into the No Action Alternative without substantial 

 

8 The Parties disagree as to the scope of Federal Defendants’ motion to dismiss. Doc. 49 at 6 n. 5. Federal Defendants 

maintain it is an attack upon the entire complaint. Id. Plaintiffs assert it fails to address all of the claims in the FAC. Doc. 48 

at 15. Federal Defendants’ motion does open with a general argument that “under the facts alleged in the Complaint, 

Plaintiffs have failed to state any NEPA claim.” Doc. 45 at 10. However, the motion only directly challenges certain aspects 

of Plaintiffs’ allegations. To the extent Defendants’ arguments impliedly challenge and/or render legally untenable other 

aspects of the complaint, such implications will be discussed. 

9 Although this regulatory provision facially applies only to EISs, “[t]he alternatives provision of NEPA applies whether an 

agency is preparing an EIS or an EA.” Native Ecosystems, 428 F.3d at 1245. 

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change.

Section 3405(d) of the CVPIA requires tiered pricing to be included in contracts greater 

than three years in duration. Consequently, if at least 80 percent of the contract total is 

delivered in any year for contracts greater than three years, in such year incremental 

charges based on the 80/10/10 pricing structure would be collected and paid to the 

Restoration Fund.

[Subheading omitted] Several applicable CVPIA provisions which were incorporated into 

the Preferred Alternative of the Final PEIS and which are included in the No Action 

Alternative include tiered water pricing, defining M&I water users, requiring water 

measurement, and requiring water conservation. These provisions were also summarized 

in EA-07-56 (Reclamation 2007) and are incorporated by reference.

In addition, the No Action Alternative includes environmental commitments as described 

in the Biological Opinion for the CVPIA PEIS (Reclamation 2000c).

Doc. 4-1, EA at 12 (emphasis added). The “Proposed Action” is defined in the EA as follows:

The Proposed Action evaluated in this document is the execution of eight interim renewal 

water service contracts between the United States and the contractors listed in Table 2-1. 

These are the same eight contracts included under the No Action Alternative. WWD’s 

main contract (14-06-200-495A-IR2) is currently on its second interim renewal contract. 

The Proposed Action would be their third. The remaining seven interim renewal contracts 

listed in Table 2-1 are currently on their twelfth interim renewal contract. The Proposed 

Action would be their thirteenth.....

The Proposed Action would continue these existing interim renewal contracts, with only 

minor, administrative changes to the contract provisions to update the previous interim 

renewal contracts for the new contract period. In the event that a new long-term water 

contract is executed, that interim renewal contract would then expire.

No changes to the contractors’ service areas or water deliveries are part of the Proposed 

Action. CVP water deliveries under the eight proposed interim renewal contracts can 

only be used within each designated contract service area (see Appendix A for service 

area maps). The contract service area for the proposed interim renewal contracts have not 

changed from the existing interim renewal contracts. The proposed interim renewal 

contract quantities (Table 2-1) remain the same as in the existing interim renewal 

contracts. Water can be delivered under the interim renewal contracts in quantities up to 

the contract total, although it is likely that deliveries will be less than the contract total. 

The terms and conditions of the 2010 interim renewal contracts analyzed within EA-09-

101 and EA-09-126 (Reclamation 2010a and 2010b) are incorporated by reference into 

the Proposed Action.

The eight interim water service contracts contain provisions that allow for adjustments 

resulting from court decisions, new laws, and from changes in regulatory requirements 

imposed through re-consultations. Accordingly, to the extent that additional restrictions 

are imposed on CVP operations to protect threatened or endangered species, those 

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restrictions would be implemented in the administration of the eight interim water service 

contracts considered in this EA. As a result, by their express terms the interim renewal 

contracts analyzed herein would conform to any applicable requirements lawfully 

imposed under the federal ESA or other applicable environmental laws.

Id. (emphasis added).

The FAC alleges, and Defendants do not appear to dispute, that the No Action Alternative 

defines the baseline as “continued delivery of water in the same quantities....,” FAC ¶ 33a, and that the 

“No Action Alternative ... is the same project as the Proposed Action, with only one small pricing 

difference,” FAC ¶ 33b (emphasis in original). The FAC further alleges that the No Action Alternative 

unlawfully “failed to consider non-renewal of the contracts.” FAC ¶ 33b (emphasis added). 

Federal Defendants make several arguments in support of their contention that the No Action 

Alternative was appropriate as a matter of law. First, Federal Defendants argue that it is appropriate to 

define a no action alternative as “no change” from current management intensity. There is considerable 

support for this proposition. Although the term “no action” alternative is not defined in the statute or 

NEPA regulations, in 1981, the Council on Environmental Quality (“CEQ”), the agency charged with 

designing NEPA’s implementing regulations, see 40 C.F.R. § 1500.3, issued an informatory 

“Memorandum to Agencies Containing Answers to 40 Most Asked Questions on NEPA Regulations.” 

46 Fed. Reg. 18,026-01 (March 23, 1981) (“40 Questions Memorandum”). The third question the 

Memorandum addresses is: “What does the ‘no action’ alternative include? If an agency is under a court 

order or legislative command to act, must the EIS address the ‘no action’ alternative?” Id. at 18,027. The 

CEQ’s answer provides in pertinent part: 

[] Section 1502.14(d) requires the alternatives analysis in the EIS to “include the 

alternative of no action.” There are two distinct interpretations of “no action” that must 

be considered, depending on the nature of the proposal being evaluated. The first 

situation might involve an action such as updating a land management plan where 

ongoing programs initiated under existing legislation and regulations will continue, even 

as new plans are developed. In these cases “no action” is “no change” from current 

management direction or level of management intensity. To construct an alternative that 

is based on no management at all would be a useless academic exercise. Therefore, the 

“no action” alternative may be thought of in terms of continuing with the present course 

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of action until that action is changed. Consequently, projected impacts of alternative 

management schemes would be compared in the EIS to those impacts projected for the 

existing plan. In this case, alternatives would include management plans of both greater 

and lesser intensity, especially greater and lesser levels of resource development.

The second interpretation of “no action” is illustrated in instances involving federal 

decisions on proposals for projects. “No action” in such cases would mean the proposed 

activity would not take place, and the resulting environmental effects from taking no 

action would be compared with the effects of permitting the proposed activity or an 

alternative activity to go forward.

***

In light of the above, it is difficult to think of a situation where it would not be 

appropriate to address a “no action” alternative. Accordingly, the regulations require the 

analysis of the no action alternative even if the agency is under a court order or legislative 

command to act. This analysis provides a benchmark, enabling decisionmakers to 

compare the magnitude of environmental effects of the action alternatives. It is also an 

example of a reasonable alternative outside the jurisdiction of the agency which must be 

analyzed. Section 1502.14(c). [] Inclusion of such an analysis in the EIS is necessary to 

inform the Congress, the public, and the President as intended by NEPA. Section 

1500.1(a).

Id (emphasis added).

Numerous cases have applied these instructions to “allow the status quo... to be the no action 

alternative.” Ass’n of Public Agency Customers, Inc. v. Bonneville Power Administration, 126 F.3d 

1158, 1188 (9th Cir. 1997). Association of Public Agency Customers concerned an EIS evaluating 

renewal by the federal Bonneville Power Administration of certain types of power supply contracts. Id. 

at 1165-70. The Ninth Circuit rejected the argument that the “no action” alternative should reflect nonrenewal of those contracts, citing the 40 Questions Memorandum for the proposition that “[t]he ‘no 

action’ alternative may be thought of in terms of continuing with the present course of action until that 

action is changed.” Id. at 1188; see also Westlands Water Dist. v. United States Dept. of Interior, 376 

F.3d 853, 869 (9th Cir. 2004) (noting that the no action alternative in the EIS for the Trinity River Flow 

Evaluation Study, a program designed “restor[e] and protect[] the fish and wildlife habitats of the 

Central Valley and Trinity River Basins,” was properly defined as the 340,000 AF/year minimum flow 

level prescribed by CVPIA § 3406(b)(23)”).

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Likewise, American Rivers v. Federal Energy Regulatory Commission, 201 F.3d 1186, 1200-01

(9th Cir. 2000), found a “status quo” no action alternative lawful under NEPA in the context of a federal 

hydropower relicensing proceeding. Plaintiffs attempt to distinguish American Rivers because of the 

unique legal framework imposed by the Federal Power Act (“FPA”) upon hydropower relicensing. 

Specifically, if the Federal Energy Regulatory Commission (“FERC”) failed to take action on a 

relicensing application, the FPA requires FERC to permit the applicant “to continue operating the 

project indefinitely subject to the terms and conditions of its expired original license.” Id. at 1200. This 

is a clear statutory command to maintain the status quo in the absence of re-licensing, directly 

controlling the form of the no action alternative.

In an attempt to set up a contrast, Plaintiffs maintain that Reclamation was not required to enter 

in the Interim Contracts. This argument is based upon the text of CVPIA § 3404(c)(1), which provides

in pertinent part: 

(c) Renewal of Existing Long-Term Contracts.--Notwithstanding the provisions of the 

Act of July 2, 1956 (70 Stat. 483), the Secretary shall, upon request, renew any existing 

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

Valley Project for a period of 25 years and may renew such contracts for successive 

periods of up to 25 years each.

(1) No such renewals shall be authorized until appropriate environmental review, 

including the preparation of the environmental impact statement required in 

section 3409 of this title, has been completed. Contracts which expire prior to the 

completion of the environmental impact statement required by section 3409 may 

be renewed for an interim period not to exceed three years in length, and for 

successive interim periods of not more than two years in length, until the 

environmental impact statement required by section 3409 has been finally 

completed, at which time such interim renewal contracts shall be eligible for longterm renewal as provided above. Such interim renewal contracts shall be modified 

to comply with existing law, including provisions of this title....

(Emphasis added.) Plaintiffs concede that the use of the term “shall” in reference to the renewal of longterm contracts means that Reclamation lacks discretion to disapprove requested long-term renewals, 

provided “appropriate environmental review, including the preparation of the environmental impact 

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statement required by [CVPIA § 3409] has been completed.”10 Doc. 48 at 2. However, Plaintiffs 

maintain that Reclamation retains full discretion to disapprove or alter the Interim Contracts, because 

CVPIA § 3404(c)(1) indicates they “may be renewed for an interim period.” Id. Normally when both 

“shall” and “may” are used in a statute, the “inference is that each is being used in its ordinary sense –

the one being permissive, the other mandatory.” Ctr. for Biological Diversity v. United States Fish and 

Wildlife Serv., 450 F.3d 930, 935 (9th Cir. 2006) (internal citations and quotations omitted). Here, 

however, Plaintiffs’ interpretation cannot be countenanced with the obvious (and conceded)

Congressional intent that the contractual relationship between Reclamation and water users is not to be 

interrupted. Rather, the Court is persuaded by Federal Defendants’ suggested interpretation of this 

statutory language, namely, that Congress used the term “may” in reference to interim contracts because 

re-using the term “shall” would lead to the absurd result that Reclamation would be required to keep 

issuing interim contracts even when long-term ones were in place. Here, the “may” is permissive only 

insofar as it permits Reclamation to use interim contracts as an alternative to mandatory long-term 

contracts.11

Accordingly, American Rivers is at least partially analogous. In American Rivers the FPA 

required perpetuation of pre-existing license terms as the status quo pending action on a new license. 

Here, because the CVPIA requires renewal of at least some form of interim contract, albeit not 

necessarily on exactly the same terms as a previous contract, this effectively renders a “no contract” 

alternative inappropriate, even as the “no action” alternative.

12

 

10 There appears to be no dispute that the EIS specifically called for in CVPIA § 3409, the CVPIA PEIS, was completed in 

1999. Whether other requisite “appropriate environmental review” is required and/or has been completed remains in dispute, 

an issue that need not be resolved to determine the appropriate “no action” alternative in this case. 

11 The Parties have not addressed, nor does the Court, the far more complicated question of whether, to what extent, and 

under what circumstances Reclamation has discretion to modify either interim or long-term contracts upon renewal. 

12 The 40 Questions Memorandum does indicate that the relevant NEPA “regulations require the analysis of the no action 

alternative even if the agency is under a court order or legislative command to act,” 46 Fed. Reg. at 18,027. Plaintiffs suggest 

that this language requires inclusion of a “no contract” alternative even when the contract renewal is required. Doc. 48 at 13. 

Although this interpretation of the Memorandum is facially logical, it cannot be squared with binding Ninth Circuit caselaw 

permitting the “no action” alternative to represent the pre-existing status quo, even in the context of contract renewals. 

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Even if, arguendo, American Rivers is distinguishable on the ground suggested by Plaintiffs, 

other cases confirm that it is appropriate for a no action alternative to reflect “historical uses” of a 

resource. For example, in Natural Res. Def. Council, Inc. v. Hodel, 624 F. Supp. 1045, 1054-55 (D. Nev. 

1985), a decision affirmed by the Ninth Circuit in an opinion that adopted the district court’s reasoning, 

819 F.2d 927 (9th Cir. 1987), the Bureau of Land Management (“BLM”) prepared an EIS concerning 

various aspects of its grazing management activities in and around the Reno, Nevada area. Id. at 1048-

49. The plaintiffs argued that BLM should have included a “no grazing” alternative. Id. at 1054. This 

argument was rejected in part because it was “an indisputable fact that livestock grazing has been going 

on in the Reno planning area, on public lands, for more than a century.” Id. In addition, the mandate of 

Congress in relevant statutes “was that livestock use was to continue as an important use of public 

lands” and that such use “should be managed to maximize productivity for livestock and other specified 

uses.” Id. (citing 43 U.S.C. § 1903). “NEPA does not require examination of alternatives that are so 

speculative, contrary to law, or economically catastrophic as to be beyond the realm of feasibility.” Id. 

(citing Kilroy v. Ruckelshaus, 738 F.2d 1448, 1454 (9th Cir. 1985); California v. Block, 690 F.2d 753, 

767 (9th Cir. 1982)). 

The complete abandonment of grazing in the Reno planning area is practically 

unthinkable as a policy choice; it would involve monetary losses to the ranching 

community alone of nearly 4 million dollars and 290 jobs. Of course, compared with the 

economy of the Reno area as a whole, ranching plays only a negligible role. 

Nevertheless, eliminating all grazing would have extreme impacts on this small 

community. A “no grazing” policy is simply not a “reasonable alternative” for this 

particular area. 

Id. Finally, the district court found that a “no grazing” alternative was not required by CEQ’s “no 

action” alternative regulation, 40 C.F.R. § 1502.14(d). Id. “The ‘no action’ alternative studied in the EIS 

is the correct ‘no action’ alternative, as contemplated by the CEQ regulations, namely continuation of 

the status quo ante, in the absence of any of the proposed actions.” Id. “No action” was “certainly not, in 

this context, a complete reversal or abolition of a historical pattern of use over 100 years old.” Id.; see 

also Nw. Envtl. Def. Ctr. v. U.S. Army Corps of Engineers, 817 F. Supp. 2d 1290, 1312-13 (D. Or. 2011)

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(rejecting argument that “true” no action alternative for EIS evaluating agency’s proposal to create a 

streamlined permitting process for gravel mining in the Chetco River must reflect no mining at all; it 

was undisputed that mining occurred regularly since the 1900s and NEPA permits the no-action 

alternative to reflect the “context of the historical uses of the action area”).

Here, the historical use of CVP water by the Interim Contractors pursuant to previous long-term 

contracts is an indisputable matter of public record. See FAC at p. 12 (acknowledging that in 2005 the 

Bureau was in the process of renewing long-term contracts previously held by the interim contractors); 

cf. Natural Resources Defense Council v. Salazar, 686 F.3d 1092, 1095 (9th Cir. 2012) (discussing 

historical use by Delta-Mendota Canal Contractors). This provides additional support for Federal 

Defendants’ use of a “status quo” no action alternative. 

It is important to understand how the authorities cited above approving of the use of a “status 

quo” no action alternative relate to a separate line of cases cited by Federal Defendants which stand for 

the proposition that no EIS is required where a project maintains the status quo. “Discretionary agency 

action that does not alter the status quo does not require an EIS.” Nat'l Wildlife Fed'n v. Espy, 45 F.3d 

1337, 1344 (9th Cir.1995). “In other words, an EIS is not required in order to leave nature alone.” 

Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094, 1114 (9th Cir. 2002), abrogated on other grounds 

by Wilderness Soc. v. U.S. Forest Serv., 630 F.3d 1173 (9th Cir. 2011) (internal quotation marks and 

citation omitted). 

For example, in Espy, a federal agency took title to a ranch from a delinquent borrower and 

subsequently sold the property to a third party. 45 F.3d 1337. Because the new owners continued a 

longstanding practice of grazing cattle on wetlands located at the ranch, the Ninth Circuit held that the 

title transfer was not subject to NEPA because the status quo was not altered. Id. at 1343-44. Compare 

Burbank Anti–Noise Group v. Goldschmidt, 623 F.2d 115, 116–17 (9th Cir. 1981) (NEPA does not 

apply when an agency financed the purchase of an airport already built); Bicycle Trails Council of Marin 

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v. Babbitt, 82 F.3d 1445, 1446 (9th Cir. 1996) (closure of bicycle trails does not trigger EIS), with

Kootenai Tribe 313 F.3d at 1114 (transition to less active management of national forests that would 

result from agency rule constituted a change in the status quo because “human intervention, in the form 

of forest management, has been part of the fabric of our national forests for so long...”). 

Together, these two lines of cases establish that: (1) the “status quo” is an appropriate no-action 

alternative; and (2) where the project does not operate to alter the status quo, no EIS is required.

Emerging from within this second line of cases is the only factually analogous case that even arguably 

supports Plaintiffs’ position regarding the no action alternative. In Pit River Tribe v. United States 

Forest Serv., 469 F.3d 768 (9th Cir. 2006), the Ninth Circuit examined whether re-extension of leases 

permitting production of geothermal energy constituted preservation of the status quo. The Ninth Circuit 

emphasized that the status quo before any extension was that the lessee owned rights to produce 

geothermal steam valid through the end of the lease period, after which it “owned nothing.” Id. at 784. 

This was distinguishable from the “continued use” scenario presented in Espy because without 

“affirmative re-extension” of the lease, the lessee “would have retained no rights at all to the leased 

property and would not have been able to go forward with [a project].” Id. “Instead of preserving the 

status quo, the lease extensions gave [the lessee] an extra five years to develop the land and the 

possibility of obtaining a future lease extension of up to forty years.” Id. Critically, both the original 

lease and the extension “did not reserve to the agencies the absolute right to deny development” so “did 

not merely preserve the status quo” of undeveloped land. Id. Accordingly, “the agencies were required 

to complete an environmental impact statement before extending the leases.” Id.

Although Pitt River does not specifically address the nature of any “no action” alternative, the 

reasoning certainly suggests that it would not have been appropriate for the no action alternative in that 

case to define the “status quo” to include the existence of the lease terms (i.e. the right to develop the 

energy resource). See also Friends of Yosemite Valley v. Kempthorne, 520 F.3d 1024, 1026-27 (9th Cir. 

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2008) (finding a NEPA violation where the “no-action” alternative assumed the existence of the very 

plan being proposed); North Carolina Wildlife Fed’n v. North Carolina Dept. of Transp., 677 F.3d 596, 

603 (4th Cir. 2012) (“courts not infrequently find NEPA violations when an agency miscalculates the 

“no build’ baseline or where the baseline assumes the existence of the proposed project”). 

But, defining the baseline to be the status quo, which is clearly permissible under Ninth Circuit 

authority, is not the same thing as assuming the baseline includes aspects of the proposed project, which 

is not permissible. For example, in Pitt River, because there was no history of energy development at the 

site, the status quo was a site without energy development. In contrast, in Association of Public Agency 

Customers, it was appropriate for the “no action” alternative to reflect the renewal of energy contracts, 

which represented “continuing with the present course of action....” 126 F.3d at 1188. In American 

Rivers, a “status quo” no action alternative appropriately assumed “continue[d] operat[ion] [of] the 

project [] subject to the terms and conditions of [the] expired original license” because the governing 

statute required as much. 201 F.3d at 1200. Likewise, in NRDC v. Hodel, 624 F. Supp. at 1054-55, the 

no-action alternative correctly assumed continuation of historical grazing practices, particularly in light 

of the fact that governing statutes indicated Congress’ intent that livestock use was to continue on public 

lands. 

Here, assuming the truth of the facts alleged in the FAC, the Bureau appropriately defined the 

status quo as the “continued delivery of CVP water under the interim renewal of existing contracts

which includes terms and conditions required by non-discretionary CVPIA provisions.” Doc. 4-1, EA at

12. As in Association of Public Energy Customers, the Bureau appropriately assumed continuation of 

the present course of action. The indisputable historical pattern of use of the resource (water) further 

supports the Bureau’s definition of the no-action alternative in this case. 

Federal Defendants’ motion to dismiss Plaintiff’s NEPA claim that the “no action” alternative 

was unlawful is GRANTED WITHOUT LEAVE TO AMEND, as Plaintiffs have not requested leave to 

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amend and amendment could not possibly cure the defect.

4. Federal Defendants’ Argument that the Project Does Not Alter the Status Quo. 

As discussed above, Federal Defendants rely on a line of cases which stand for the proposition 

that no EIS is required for a project that does not alter the status quo. Federal Defendants argue it is 

“undisputed” that the Proposed Action does not alter the status quo in this case and, therefore, that the 

issuance of a FONSI was appropriate. The FAC in fact alleges that the “No Action Alternative ... is the 

same project as the Proposed Action with only one small pricing difference.” FAC at ¶ 33b. The FAC 

does not allege that this “small pricing difference” will have any material effect on the environment.13

Nor does Plaintiff contest Federal Defendants’ assertion that, if the no action alternative was correctly 

formulated, the Proposed Action would not alter the status quo. This renders Plaintiffs’ Second Claim 

for Relief, which alleges Reclamation unlawfully failed to prepare an EIS, ineffective as a matter of law. 

The caselaw discussed above clearly establishes that where the Proposed Action does not alter the status 

quo, no EIS is required. Federal Defendants’ motion to dismiss the Second Claim for Relief is 

GRANTED WITHOUT LEAVE TO AMEND, as amendment on this issue would be futile.

5. Other Challenges to the Content of the EA.

The above conclusion does not automatically obviate the remainder of Plaintiffs’ claims 

regarding the content of the EA. Under some, unique circumstances, a finding that no EIS is required 

would automatically obviate the need for any EA. See Douglas County v. Babbitt, 48 F.3d 1495, 1505 

(9th Cir. 1995) (given that preparation of an EIS is never required for a designation of critical habitat 

under the ESA, because Congress intended for ESA critical habitat procedures to replace NEPA 

requirements, the agency’s failure to prepare an EA did not violate NEPA). However, although 

preparation of an EA is arguably “optional” under NEPA, Grand Canyon Trust v. U.S. Bureau of 

 

13 The FAC does allege that Reclamation failed to consider alternatives that included different pricing structures designed “to 

reduce water demand and thus reduce exports and their environmental impacts.” FAC ¶ 2; see also FAC ¶ 33b. 

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Reclamation, 691 F.3d 1008, 1013 (9th Cir. 2012) (“An agency undertaking a major federal action may 

first prepare an [EA] to determine whether an EIS is necessary.”), an agency that chooses to prepare an 

EA gains the benefit of a more relaxed standard of review of any decision not to prepare an EIS, High 

Sierra Hikers Ass'n v. Blackwell, 390 F.3d 630, 640 (9th Cir. 2004) (“Typically, an agency’s decision 

not to prepare an EIS is reviewed under the arbitrary and capricious standard; however, where an agency 

has decided that a project does not require an EIS without first conducting an EA, we review under the 

reasonableness standard.”). 

In addition, NEPA contains separate, specific requirements regarding the content of an EA:

Environmental Assessment:

(a) Means a concise public document for which a Federal agency is responsible that 

serves to:

(1) Briefly provide sufficient evidence and analysis for determining whether to 

prepare an environmental impact statement or a finding of no significant impact.

(2) Aid an agency's compliance with the Act when no environmental impact 

statement is necessary.

(3) Facilitate preparation of a statement when one is necessary.

(b) Shall include brief discussions of the need for the proposal, of alternatives as required 

by section 102(2)(E), of the environmental impacts of the proposed action and 

alternatives, and a listing of agencies and persons consulted.

40 C.F.R. § 1508.9. An EA that is followed by a FONSI must provide sufficient information and detail 

to demonstrate that the agency took the required “hard look” at the environmental consequences of the 

project before concluding that those impacts were insignificant. Save the Yaak Comm. v. Block, 840 F.2d 

714, 717 (9th Cir. 1988) (“[A]n agency's decision not to prepare an EIS will be considered unreasonable 

if the agency fails to supply a convincing statement of reasons why potential effects are insignificant.”). 

To be adequate, an EA, like an EIS, must analyze cumulative impacts and respond to public comments 

concerning the project. Native Ecosystems, 304 F.3d at 893, 896; Found. for North Am. Wild Sheep v. 

U.S. Dept. of Agr., 681 F.2d 1172, 1178 (9th Cir. 1982). Furthermore, the conclusions in the EA must be 

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supported by “some quantified or detailed information,” and the underlying environmental data relied 

upon to support the expert conclusions must be made available to the public. Klamath–Siskiyou 

Wildlands v. Bureau of Land Mgmt., 387 F.3d 989, 993, 996 (9th Cir. 2004). 

These requirements suggest that once an agency elects to prepare an EA, the EA is subject to 

independent review, even if it has already been determined that no EIS is required. See Natural Res. Def. 

Council, Inc. v. U.S. Forest Serv., 634 F. Supp. 2d 1045, 1059-60 (E.D. Cal. 2007) (requiring 

consideration of alternatives, albeit a more limited number, in an EA, even where EIS is not required); 

Sabine River Auth. v. U.S. Dept. of Interior, 745 F. Supp. 388, 394 (E.D. Tex. 1990), aff'd, 951 F.2d 669 

(5th Cir. 1992) (independently analyzing challenges to the content of an EA after rejecting challenge to 

agency’s failure to prepare EIS on the ground that the project did not alter the status quo). Federal 

Defendants do not point to any authority suggesting otherwise. 

a. Reasonable Range of Alternatives. 

Plaintiffs independently allege that the EA fails to consider a reasonable range of alternatives, 

including alternatives that would “reduce[] [the] quantity of water deliveries” and/or alter the pricing 

structure to “reduce the interim contractors’ demand for CVP water.” FAC ¶ 33b; see also FAC ¶ 2. 

Generally, “NEPA requires the agencies to ‘study, develop, and describe appropriate alternatives to 

recommended courses of action in any proposal which involves unresolved conflicts concerning 

alternative uses of available resources.’ ” N. Idaho Cmty. Action Network, 545 F.3d at 1153 (quoting 42 

U.S.C. § 4332(2)(E)). “This alternatives provision applies whether an agency is preparing an [EIS] or an 

[EA], and requires the agency to give full and meaningful consideration to all reasonable alternatives.”

Id. (citing Native Ecosystems, 428 F.3d at 1245). However, “an agency’s obligation to consider 

alternatives under an EA is a lesser one than under an EIS.” Id. “[W]hereas with an EIS, an agency is 

required to ‘[r]igorously explore and objectively evaluate all reasonable alternatives,’ with an EA, an 

agency only is required to include a brief discussion of reasonable alternatives.” Id (comparing 40 

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C.F.R. § 1502.14(a), with § 1508.9(b)); see also Te-Moak Tribe of W. Shoshone of Nevada v. U.S. Dept. 

of Interior, 608 F.3d 592, 602 (9th Cir. 2010).

The purpose and need of a project determines the range of alternatives that an agency must 

consider. N.W. Envt’l Defense Center v. Bonneville Power Admin., 117 F.3d 1520, 1538 (9th Cir. 1997). 

“Where the expected impacts of a project are narrower, such that an EIS is not required, the agency may 

consider a smaller number of alternatives.” Natural Res. Def. Council, Inc. v. U.S. Forest Serv., 634 F. 

Supp. 2d at 1059-60 (citing Native Ecosystems, 428 F.3d at 1246). In Native Ecosystems, for example, 

an EA that only considered in detail two alternatives -- a “no-action” alternative and the “preferred 

alternative” -- fully satisfied NEPA. 428 F.3d at 1245-46.

Here, the EA “considered” but “eliminated” two alternatives other than the No Action and 

Proposed Action alternatives, namely “non-renewal of [the] contracts” and “reduction in interim renewal 

contract water quantities.” Doc. 4-1, EA at 13-14. Federal Defendants’ motion to dismiss does not 

discuss the reasons why these alternatives were “eliminated,” nor whether the remaining two alternatives 

constitute a “reasonable range.” Federal Defendants cite no authority to support a conclusion that the 

fact that an EIS is not required obviates as a matter of law the need for the Bureau to consider a 

reasonable range of alternatives in its EA. The Court will not manufacture arguments for either party. 

Apart from the finding that the “no action” alternative was lawfully framed, this order does not address 

Plaintiffs’ claims regarding the EA’s other alternatives. 

b. Failure to Consider Environmental Impacts Beyond Application Area. 

Federal Defendants do directly challenge Plaintiffs’ contention that the EA must evaluate the 

environmental impacts of the Interim Contracts on the source watersheds, on water quality and fish 

species in the San Joaquin Valley, and on the Delta itself. Id. The EA restricts its “Study Area” solely to 

the service areas of the Interim Contractors. FAC ¶ 33c; see generally Doc. 4-1, EA. Although the 

argument is not well focused, it appears that Federal Defendants maintain that the EA did not need to 

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evaluate impacts beyond the application area because such impacts are covered by other environmental 

documents. 

In support of this proposition, Federal Defendants cite a 2008 ruling in Natural Resources 

Defense Council v. Kempthorne, 1:05-cv-1207 OWW TAG, 2008 WL 5054115 (E.D. Cal. 2008),14

which concerned Reclamation’s execution of 41 long-term CVP contracts. Environmental plaintiffs in 

Kempthorne argued that Reclamation violated the ESA by failing to ensure that its actions with respect 

to contracting for water deliveries would not jeopardize the continued existence of the threatened Delta 

smelt nor adversely modify its critical habitat. Id. at *2. The district court found that Plaintiffs lacked 

standing to sue as to certain long-term contracts belonging to certain south-of-Delta water service 

contractors because those contracts contained a “pass-through” shortage provision which specifically 

absolves the Bureau from any liability for non-delivery of water and/or any other actions required to 

comply with the ESA and other Federal and State laws. Id. at *15. As a result of this shortage language, 

the district court found that the contracts in question could not cause any additional harm to the smelt, 

above and beyond that which might be caused by operation of the CVP. See id. at *17. Critically, 

because the Bureau chose to evaluate impacts to and/or protections required for the smelt in another 

document (the “OCAP BiOp”), plaintiffs could not establish a causal connection between execution and 

performance of these contracts and harm to the smelt. Id.

15

Here, Federal Defendants seek to extend this holding to absolve the Bureau of the need to 

comply with NEPA in this case. Federal Defendants argue that although execution of these Interim 

Contracts is “necessary ... to provide for continued repayment of certain construction and operating 

costs associated with the CVP, they are not the documents (and their execution is not the agency action) 

that deals with CVP operations (including water deliveries to CVP contractors) or the potential 

 

14 Although this decision was affirmed sub nomine, 686 F.3d 1092 (9th Cir. 2012), rehearing en banc was granted on March 

5, 2013, --- F.3d ---, 2013 WL 794343. 

15 It is worth noting that this standing impediment did not exist with respect to other types of CVP contracts that did not 

contain complete “pass-through” shortage provisions. Id. at *19-*20.

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environmental effects of such operations.” Doc. 45 at 11. Rather, “[t]hose potential operational effects 

are addressed by the Bureau through other actions and processes.” Id.

It is true that NEPA permits tiered environmental review. 40 C.F.R. § 1502.20 (“Agencies are 

encouraged to tier their environmental impact statements to eliminate repetitive discussions of the same 

issues and to focus on the actual issues ripe for decision at each level of environmental review.”). The 

term “tiering” refers to “the coverage of general matters in broader environmental impact statements 

(such as national program or policy statements)” followed by “narrower statements or environmental 

analyses (such as regional or basinwide program statements or ultimately site-specific statements) 

incorporating by reference the general discussions and concentrating solely on the issues specific to the 

statement subsequently prepared.” 40 C.F.R. § 1508.28. 

Federal Defendants correctly point out that impacts of CVP operations on species listed as 

threatened and endangered under the ESA are being evaluated in other contexts. See Consolidated Delta 

Smelt Cases, 2013 WL 394025, *1 (E.D. Cal. Jan. 30, 2013) (summarizing remand schedules in that 

case and the Consolidated Delta Smelt Cases). Federal Defendants are also correct that NEPA analyses 

are being prepared in connection with these cases. See id. However, the NEPA analysis associated with 

these ESA cases is not yet complete. Id. (indicating remand, including completion of NEPA analysis, 

will not be complete until December 1, 2013 according to current schedule in the Consolidated Delta 

Smelt Cases and April 29, 2016 in the Consolidated Salmonid Cases). Federal Defendants fail to explain 

how an EA can tier off of a non-existent EIS. Moreover, the scope of the NEPA analyses required by 

court order in connection with the OCAP BiOps is limited to the environmental impacts of specific 

actions planned to be taken to protect endangered species (including actions that will curtail water 

deliveries), not the full scope of environmental impacts of the water deliveries themselves. See generally

Consolidated Delta Smelt Cases, 686 F. Supp. 2d 1026 (E. D. Cal. 2009); Consolidated Salmonid Cases, 

688 F. Supp. 2d 1013 (E.D. Cal. 2010).

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As discussed above, the Bureau has already prepared a programmatic EIS for implementation of 

the CVPIA in 1999. FAC at p. 12. However, while the CVPIA PEIS may have evaluated the 

environmental impacts of water deliveries across the entire CVP system, the existing record does not 

establish that the CVPIA PEIS completely satisfies NEPA with respect to the requisite analysis of such 

impacts. According to the allegations in the FAC, the Bureau believed additional site-specific NEPA 

review was necessary when it proposed to renew long-term contracts for the West San Joaquin Division 

and San Luis Contractors. FAC at p. 12. Why, then, would interim contract renewal not require such 

site-specific review? Perhaps there is a basis for such a distinction, but no such explanation is offered in 

the current record. Federal Defendants’ motion to dismiss Plaintiff’s claim that the EA improperly 

limited its scope is DENIED WITHOUT PREJUDICE to this argument being raised on a more complete 

record. 

c. Remaining Allegations. 

Likewise, Federal Defendants’ motion does not directly address Plaintiffs’ allegations that the 

EA was based on outdated water needs assessment, that the EA failed to consider the effects of water 

diversions on certain other environmental laws, and that the EA failed to address the cumulative impacts 

of the contracts. 

As to the water needs assessment allegation, Plaintiffs allege that the EA unlawfully relied upon 

a 2006 water needs assessment. FAC ¶ 32. According to the FAC “[s]ince 2006, the contractors’ water 

needs have changed significantly, based in part on retirement of farmland plagued by drainage and 

groundwater contamination problems.” Id. As a result, “Reclamation’s analysis of purpose and need 

violates NEPA.” Id. Federal Defendants cite no authority, and the Court has been unable to locate any, 

that supports automatic dismissal of such a claims based upon the conclusions reached elsewhere in this 

Order. This Order, therefore, does not address this claim.

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As to the effect of diverting and delivering water pursuant to the contracts on Reclamation’s 

compliance with other environmental laws, NEPA requires an EIS to “state how alternatives considered 

in it and decisions based on it will or will not achieve the requirements of ... other environmental laws 

and policies.” 40 C.F.R. § 1502.2(d). It is not clear to what extent this is required in an EA, because the

pleadings do not discuss this allegation. To the extent Federal Defendants impliedly assert that this 

obligation is satisfied because the EA tiers off of other documents, any such argument has been rejected 

above, at least on the present record.

As to the cumulative impact analysis claim, it is well established that NEPA “requires that an 

environmental analysis for a single project consider the cumulative impacts of that project together with 

‘past, present and reasonably foreseeable future actions.’ ” Native Ecosystems Council v. Dombeck, 304 

F.3d 886, 894 (9th Cir. 2002) (quoting 40 C.F.R. § 1508.7). It is particularly important that EAs 

consider the “additive effect of many incremental environmental encroachments” because “so many 

more EAs are prepared than EISs....” Id. at 896 (internal citations and quotations omitted). Again, the 

Court has been unable to locate authority to support dismissal of this claim based upon conclusions 

reached elsewhere in this Order.

6. Defendant Intervenors’ Challenge to Claims Concerning the Long-Term Contract 

EIS. 

Defendant Intervenors additionally argue that Plaintiffs challenge the Interim Contracts 

prematurely because ongoing litigation concerning the impact of CVP and SWP operations on ESAlisted species will significantly impact the environmental reviews required by the Bureau for long-term 

contract renewal. Doc. 46-1 at 3. Defendant Intervenors maintain that because approval of long-term 

contracts is still “in progress” the Bureau has “taken the required steps to properly approve the interim 

contracts,” leaving Plaintiffs “without the required standing” and requiring dismissal of their claims as 

“premature and not ripe.” Id. These arguments ignore the fact that the FAC specifically alleges that the 

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Bureau’s approval of the Interim Contracts violated NEPA. Plaintiffs’ case rises and falls on those 

claims, not on their relationship to the long-term contracting process. Moreover, Defendant Intervenors 

do not raise any specific arguments suggesting Plaintiffs lack standing to sue. 

C. Failure to Join Indispensable Parties.

Federal Defendants and Defendant Intervenors argue that to the extent Plaintiffs seek to “set 

aside” or “impair” the Interim Contracts, Plaintiffs claims should be dismissed because they have failed 

to join the contracting water districts as indispensible parties. See Doc 49 at 8; Doc. 50 at 5. Federal 

Rule of Civil Procedure 19, which governs the circumstances under which persons must be joined as 

parties to a lawsuit, provides in relevant part:

(a) Persons Required to Be Joined if Feasible.

(1) Required Party. A person who is subject to service of process and whose 

joinder will not deprive the court of subject-matter jurisdiction must be joined as a 

party if:

(A) in that person's absence, the court cannot accord complete relief 

among existing parties; or

(B) that person claims an interest relating to the subject of the action and is 

so situated that disposing of the action in the person's absence may:

(i) as a practical matter impair or impede the person's ability to 

protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring 

double, multiple, or otherwise inconsistent obligations because of 

the interest.

***

(b) When Joinder Is Not Feasible. If a person who is required to be joined if feasible 

cannot be joined, the court must determine whether, in equity and good conscience, the 

action should proceed among the existing parties or should be dismissed. The factors for 

the court to consider include:

(1) the extent to which a judgment rendered in the person's absence might 

prejudice that person or the existing parties;

(2) the extent to which any prejudice could be lessened or avoided by:

(A) protective provisions in the judgment;

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(B) shaping the relief; or

(C) other measures;

(3) whether a judgment rendered in the person's absence would be adequate; and

(4) whether the plaintiff would have an adequate remedy if the action were 

dismissed for nonjoinder.

The district court in Natural Res. Def. Council v. Kempthorne, 539 F. Supp. 2d 1155, 1182-83 (E.D. Cal. 

2008), succinctly summarized the relevant standard: 

The “[a]pplication of Rule 19 involves three successive inquiries.” Wilbur [v. Locke],

423 F.3d [1101,] 1111 [(9th Cir. 2005) abrogated on other grounds, Levin v. Commerce 

Energy, Inc., 130 S. Ct. 2323 (2010)]. “First, the court must determine whether a 

nonparty should be joined under Rule 19(a).” The term “necessary” is used to describe 

those persons to be joined if feasible. Id. at 1112. “The inquiry is a practical one and fact 

specific, and is designed to avoid the harsh results of rigid application.” Shermoen v. 

United States, 982 F.2d 1312, 1317 (9th Cir.1992). “If an absentee is a necessary party 

under Rule 19(a), the second stage is for the court to determine whether it is feasible to 

order that the absentee be joined.” Wilbur, 423 F.3d at 1112. “Finally, if joinder is not 

feasible, the court must determine at the third stage whether the case can proceed without 

the absentee, or whether the absentee is an ‘indispensable party’ such that the action must 

be dismissed.” Id.; Shermoen 982 F.2d at 1317 (a court must determine whether the 

absent party is “indispensable” “so that in ‘equity and good conscience’ the suit should be 

dismissed.”). 

The first inquiry is whether the absent water contractors are “necessary” parties to this lawsuit. This 

inquiry proceeds in two steps. “First, the court must decide if complete relief is possible among those 

already parties to the suit.” Id. at 1183 (quoting Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th 

Cir. 1990)). “This analysis is independent of the question whether relief is available to the absent party.” 

Id. “Next, the court must determine whether the absent party has a legally protected interest in the suit.” 

Id. “If a legally protected interest exists, the court must further determine whether that interest will be 

impaired or impeded by the suit.” Id. “Impairment may be minimized if the absent party is adequately 

represented in the suit.” Id. “The court must also determine whether risk of inconsistent rulings will 

affect the parties present in the suit.” Id. at 558-59 (emphasis in original). 

Federal Defendants and Defendant Intervenors cite NRDC v. Kempthorne as an example of how 

Rule 19 should be applied in this case. There, a coalition of environmental groups challenged the 

Bureau’s attempt to issue long term contracts “promising delivery of substantially increased quantities 

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of water” under the Endangered Species Act (“ESA”), arguing that entering into those contracts would 

constitute an unlawful “irretrievable and irreversible” commitment of resources that would foreclose 

implementation of corrective measures required under the ESA to protect listed species. Environmental 

plaintiffs in that case sought “to invalidate numerous water service contracts between the Bureau and 

various third parties.” 539 F. Supp. 2d at 1180. After an extended discussion, the district court 

concluded that if environmental plaintiffs sought “to invalidate, rescind, or enjoin the Bureau’s 

performance under water service contracts...” they must join all the absent contractors. Id. at 1192. 

Here, however, the “public rights exception” to the joinder rules applies. “Under this exception, 

even if [the absent party is a] necessary party, [the absent party is] not deemed indispensable, and, 

consequently, dismissal is not warranted.” Kescoli v. Babbitt, 101 F.3d 1304, 1311 (9th Cir.1996) (citing 

Makah, 910 F.2d at 559 n. 6). Generally, to fall within the public rights exception, “the litigation must 

transcend the private interests of the litigants and seek to vindicate a public right.” Id. (internal citation 

omitted). For the exception to apply, the litigation must not “destroy the legal entitlements of the absent 

parties.” Id. (citations omitted) (finding the public rights exception inapplicable because rights of absent 

parties under lease agreements “could be significantly affected” if the action proceeded in their

absence).

This exception was applied in Conner v. Burford, 848 F.2d 1441, 1442-43, 1460 (9th Cir. 1988), 

to permit environmental groups to bring a NEPA and ESA challenge the sale of oil and gas leases in 

Montana without joining all of the lessees. The Ninth Circuit reasoned that “the litigation against the 

government does not purport to adjudicate the rights of current lessees; it merely seeks to enforce the 

public right to administrative compliance with the environmental protection standards of NEPA and the 

ESA.” Id. at 1460. Likewise, in Southern Utah Wilderness Alliance v. Kempthorne, 525 F.3d 966, 967-

68 (10th Cir. 2008), the Tenth Circuit applied the public rights exception to permit a NEPA challenge to 

BLM’s issuance of leases on parcels of land in Utah. Although the district court’s finding that BLM 

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violated NEPA effectively “froze” the leases pending NEPA compliance, the lessees were not 

indispensable parties. Id. at 969. In Makah, the Ninth Circuit concluded that third parties were not 

indispensable in an action that sought to require an agency follow certain procedures in establishing 

future fishing quotas. 910 F.2d at 559 n.6. In contrast, Am. Greyhound Racing, Inc. v. Hull, 305 F.3d 

1015, 1026 (9th Cir. 2002), refused to apply the exception where the relief sought would not only 

require adherence to certain procedures but also would prevent new gaming compacts that would cause 

competitive harm to the plaintiff. Because “the rights in issue between the [parties] are more private than 

public,” the public rights exception did not apply. Id. 

Here, Plaintiffs insist that they “do not seek to invalidate the interim contracts.” Doc. 48 at 16. 

They simply wish to obtain “prospective injunctive relief that would only affect the future conduct of the 

administrative process.” Id. This will operate to limit significantly any remedies available to Plaintiffs, 

but also confirms applicability of the public rights exception to the joinder rules. Plaintiffs seek to 

vindicate the public right to procedural compliance with NEPA. This “transcend[s] the private interests 

of the litigants and seek[s] to vindicate a public right,” without “destroy[ing] the legal entitlements of 

the absent parties.” Kescoli, 101 F.3d at 1311. 

The motion to dismiss the FAC for failure to join indispensable parties is DENIED. 

IV. CONCLUSION AND ORDER

For the reasons set forth above:

(1) Federal Defendants’ and Defendant Intervenors’ motions to dismiss the FAC on the ground 

that Plaintiffs have waived their claims are DENIED;

(2) Federal Defendants’ and Defendant Intervenors’ motions to dismiss the FAC for failure to 

state a claim are

(a) GRANTED WITHOUT LEAVE TO AMEND as to Plaintiffs’ allegation that the no 

action alternative is unlawful;

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(b) GRANTED WITHOUT LEAVE TO AMEND as to Plaintiffs’ Second Claim for 

Relief that Federal Defendants unlawfully failed to prepare an EIS;

(c) DENIED as to all other allegations in the FAC.

(3) Defendant Intervenors’ motion to dismiss on the ground that Plaintiffs’ challenges are 

premature is DENIED;

(4) Federal Defendants’ and Defendant Intervenors’ motions to dismiss for failure to join 

indispensable parties are DENIED in light of Plaintiffs’ indication that the relief they seek is 

limited. 

SO ORDERED

Dated: March 7, 2013

 /s/ Lawrence J. O’Neill

United States District Judge

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