FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MODESTO IRRIGATION DISTRICT; 

TURLOCK IRRIGATION DISTRICT;

MERCED IRRIGATION DISTRICT;

OAKDALE IRRIGATION DISTRICT;

SOUTH SAN JOAQUIN IRRIGATION

DISTRICT; STOCKTON EAST WATER

DISTRICT,

Plaintiffs-Appellants,

v.

CARLOS M. GUTIERREZ, in his

official capacity as Secretary of No. 09-15214

Commerce; D. ROBERT LOHN, in

D.C. No. his official capacity as Regional  1:06-cv-00453- Administrator of the Northwest

OWW-DLB Region of NMFS; NATIONAL

OCEANIC AND ATMOSPHERIC OPINION

ADMINISTRATION, a federal agency;

CONRAD C. LAUTENBACHER, JR., in

his official capacity as

Administrator of National Oceanic

and Atmospheric Administration;

WILLIAM T. HOGARTH, in his

official capacity as Assistant

Administrator for Fisheries of

NMFS; NATIONAL MARINE

FISHERIES SERVICES, a federal

agency within the Commerce 

12403
Department; RODNEY MCINNIS, in 

his official capacity as Regional

Administrator of the Southwest

Region of NMFS,

Defendants-Appellees,

and 

CENTER FOR BIOLOGICAL DIVERSITY;

DELTA FLY FISHERS; FEDERATION OF

FLY FISHERS; NORTHERN CALIFORNIA

COUNCIL OF FEDERATION OF FLY

FISHERS; TROUT UNLIMITED,

Defendants-Intervenors-Appellees. 

Appeal from the United States District Court

for the Eastern District of California

Oliver W. Wanger, District Judge, Presiding

Argued and Submitted

December 11, 2009—San Francisco, California

Filed August 20, 2010

Before: Mary M. Schroeder and Consuelo M. Callahan,

Circuit Judges, and Barbara M. Lynn, District Judge.*

Opinion by Judge Schroeder

*The Honorable Barbara M. Lynn, United States District Judge for the

Northern District of Texas, sitting by designation. 

12404 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
COUNSEL

Tim O’Laughlin, Chico, California, for plaintiffs-appellants,

Modesto Irrigation District, et al.

Anna T. Katselas, Department of Justice, Washington, D.C.,

for defendants-appellees, Gary F. Locke, Secretary of Commerce, et al.

Stephen D. Mashuda, Seattle, Washington, for the intervenor.

OPINION

SCHROEDER, Circuit Judge:

This Endangered Species Act (“ESA”) case is a challenge

to the decision of the National Marine Fisheries Service

(“NMFS”) to list the steelhead, a type of Pacific salmon, as

a threatened species in California’s Central Valley. In listing

the steelhead, NMFS defined it as a distinct species under the

ESA, separate from rainbow trout, another type of Pacific

salmon that breeds with and looks like the steelhead. The separate listing was a departure from the prior NMFS policy of

classifying interbreeding Pacific salmon as a single species. 

Plaintiffs are irrigation districts in California’s Central Valley whose operations are impeded by the listing. They contend that the listing violated the ESA because steelhead and

rainbow trout interbreed, and the statute therefore requires

NMFS to treat them as a single species. Plaintiffs also conMODESTO IRRIGATION DISTRICT v. GUTIERREZ 12407
tend that NMFS violated the Administrative Procedure Act

(“APA”) by failing adequately to explain its decision to adopt

a new policy for classifying the fish. We agree with the district court that under the ESA, interbreeding is not alone

determinative of whether organisms must be classified alike

where, as here, they develop and behave differently. We also

find that NMFS’ explanation for its change of policy satisfies

the standards set forth in the Supreme Court’s recent decision

in F.C.C. v. Fox Television Stations, Inc., 129 S. Ct. 1800

(2009). We therefore affirm.

THE STEELHEAD AND RAINBOW TROUT

This case turns upon the distinctions between the steelhead

and rainbow trout, types of Pacific salmon that comprise the

Oncorhyncus mykiss (“O. mykiss”) species as scientifically

defined. The fish are born in fresh water, but the steelhead

migrate to the ocean anywhere from hours to years after their

birth. To transition from fresh water to salt water, steelhead

undergo a “smolt” stage, and then after one to five years in

the sea, return to the original stream to spawn. Because of

their migration pattern, steelhead are known as the anadromous form of O. mykiss. The rainbow trout, on the other

hand, remain in fresh water their entire lives and are commonly known as the resident form of the O. mykiss species.

While the two fish grow to differing sizes as adults and

have different predators and prey, they do interbreed to some

extent, and the offspring can take on the form of either. An

excess of steelhead can regenerate the population of rainbow

trout, but the reverse does not seem to be the case. All parties

agreed in the district court and before us that the steelhead

population is in decline in the Central Valley of California.

This unique biology of O. mykiss has complicated government regulation of the species. In 1974, the United States Fish

and Wildlife Service (“FWS”) and NMFS entered into a

memorandum of understanding defining their respective juris12408 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
dictions under the ESA. FWS has jurisdiction over predominantly freshwater fish including rainbow trout, and NMFS has

jurisdiction over ocean dwellers, including steelhead. This

concurrent jurisdiction has required the agencies to work

together in classifying O. mykiss under the ESA.

STATUTORY AND REGULATORY HISTORY

The ESA defines the term “species” to “include[ ] any subspecies of fish or wildlife or plants, and any distinct population segment of any species of vertebrate fish or wildlife

which interbreeds when mature.” 16 U.S.C. § 1532(16). Congress added the term “distinct population segment” (“DPS”)

to the definition of species in 1978 so that agencies could

“provide different levels of protection to different populations

of the same species.” Nat’l Ass’n of Home Builders v. Norton,

340 F.3d 835, 842 (9th Cir. 2003). Congress did not define

DPS, nor is the term used in the scientific community. As a

result of this limited guidance from Congress, NMFS has

struggled for two decades over how to apply the term DPS

with respect to steelhead and rainbow trout. 

NMFS’ first attempt at defining a DPS in this context

occurred in 1991 when the agency adopted a policy designed

specifically for classifying Pacific salmon such as O. mykiss.

See Policy on Applying the Definition of Species Under the

Endangered Species Act to Pacific Salmon, 56 Fed. Reg.

58,612 (Nov. 20, 1991) (“ESU Policy”). This policy did not

use the statutory term DPS, but instead created another new

term called the evolutionary significant unit (“ESU”). NMFS

also determined, however, that an ESU was the functional

equivalent of a DPS. See id. Under the ESU Policy, a salmon

stock had to satisfy two main criteria before NMFS could

place the stock in a distinct ESU:

(1) It must be substantially reproductively isolated

from other nonspecific population units; and 

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12409
(2) [I]t must represent an important component in

the evolutionary legacy of the species.

Id.

In 1996, in conjunction with FWS, NMFS promulgated a

more general policy defining the ESA’s operative concept of

DPS, a policy that would apply to all animal, bird and fish

species. See Policy Regarding the Recognition of Distinct

Vertebrate Population Segments Under the Endangered Species Act, 61 Fed. Reg. 4,722 (Feb. 7, 1996) (“DPS Policy”).

The DPS Policy, like the ESU Policy, required NMFS to

examine multiple factors in determining whether an organism

qualified as a DPS. See 61 Fed. Reg. at 4,725. There was,

however, a key difference between the ESU and DPS Policies. Under the ESU Policy, a type of Pacific salmon had to

be “substantially reproductively isolated” from other salmon

stock before it could be classified in its own ESU, whereas,

under the DPS Policy, an organism could be placed its own

DPS so long as it was “markedly separated from other populations of the same taxon as a consequence of physical, physiological, ecological, or behavioral factors.” See Endangered

and Threatened Species: Request for Comment on Alternative

Approach to Delineating 10 Evolutionary Significant Units of

West Coast Oncorhynchus mykiss, 70 Fed. Reg. 67,130,

67,131 (Nov. 4, 2005) (describing the history of the policies).

NMFS and FWS concluded in 1996 that the ESU Policy was,

despite this difference, “consistent with” the DPS Policy and

that both agencies would continue to apply the ESU Policy to

Pacific salmon, and apply the DPS Policy to all other organisms. See 61 Fed. Reg. at 4,722.

When NMFS applied the ESU Policy to Pacific salmon in

1997, it determined that interbreeding steelhead and rainbow

trout populations should be classified in the same ESU

because they were not “substantially reproductively isolated.”

See Endangered and Threatened Species: Listing of Several

Evolutionary Significant Units (ESUs) of West Coast Steel12410 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
head, 62 Fed. Reg. 43,937, 43,941 (Aug. 18, 1997). NMFS

noted, however, that “conclusive evidence d[id] not yet exist

regarding the relationship of resident and anadromous O.

mykiss,” which in most respects was “poorly understood.” See

id. at 43,938, 43,941.

Although NMFS and FWS agreed in 1997 that interbreeding populations of steelhead and rainbow trout should be

placed in the same ESU, there was some dispute about how

to protect threatened O. mykiss populations. In many regions

the steelhead population was declining and NMFS desired to

list those populations as threatened or endangered. FWS,

however, opposed any listing that would have protected the

rainbow trout, having determined that its populations were in

no way threatened. See id. at 43,941. FWS thus did not want

to list any ESU containing both steelhead and rainbow trout,

even where the steelhead population within that ESU was

declining. 

NMFS addressed FWS’ concern by deciding that when an

ESU contained both steelhead and rainbow trout, NMFS

would list only the steelhead population within that ESU as

threatened or endangered. See 70 Fed. Reg. at 67,130. By listing subdivisions of an ESU, NMFS was able to protect declining steelhead populations while acceding to FWS’ desire not

to list rainbow trout.

Such subdivision listings were challenged in court, however. In Alsea Valley Alliance v. Evans, 161 F. Supp. 2d 1154,

1161-64 (D. Or. 2001), the court held that the ESA requires

that agencies list (or not list) entire DPSs/ESUs, thus precluding any listings below the ESU/DPS level. The court in Alsea

found it was contrary to the ESA for NMFS to list only the

steelhead population of an ESU containing both steelhead and

rainbow trout. NMFS therefore had to revisit all of its prior

steelhead listings.

In 2004, NMFS promulgated a number of new listings to

conform with the Alsea decision. Relevant to this litigation,

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12411
NMFS defined the California Central Valley O. mykiss ESU

as comprising all steelhead and rainbow trout that “cooccur[red]” below impassible barriers. See Endangered and

Threatened Species: Proposed Listing Determinations for 27

ESUs of West Coast Salmonids, 69 Fed. Reg. 33,102, 33,115

(June 14, 2004). It proposed listing this ESU as threatened. Id.

at 33,103. 

There were those, however, who opposed the new listings

on the ground that it was inappropriate to classify steelhead

and rainbow trout in the same ESU. They pointed out that

even though steelhead and rainbow trout interbreed to some

extent, they differ in behavior and in their ability to sustain

themselves as a distinct segment of Pacific salmon. NMFS

received several comments from environmentalists who “felt

that rainbow trout and steelhead should be considered separate ESUs for biological reasons (differences in behavior,

morphology, and ecology); or for policy or legal reasons

(such as implementing the purposes of the ESA).” Endangered and Threatened Species: Final Listing Determinations

for 10 Distinct Population Segments of West Coast Steelhead,

71 Fed. Reg. 834, 836 (Jan. 5, 2006). 

FWS also disagreed with the proposed listings. The Director of the FWS sent a letter to NMFS in June 2005 suggesting

that NMFS had erred in not considering all the biological differences between the two fish when classifying them in the

same ESU. FWS indicated that NMFS had placed too much

emphasis on the fact that the two fish were a part of the same

scientifically defined species, and suggested that it would be

appropriate to stop applying the ESU Policy to O. mykiss and

instead use the more general DPS Policy so that steelhead and

rainbow trout could be treated differently. See 70 Fed. Reg.

at 67,130.

At about this same time, NMFS obtained new scientific

reports illuminating the differences between steelhead and

rainbow trout. These reports indicated that, despite the repro12412 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
ductive exchange between the two fish, “it seem[ed] unlikely

that a population of resident trout c[ould] consistently reestablish a steelhead population.” Independent Science Advisory

Board, Viability of ESUs Containing Multiple Types of Populations 29 (2005); see also Salmon Recovery Science Review

Panel, Report for the meeting held December 2004 12

(“[R]esident populations by themselves should not be relied

upon to maintain long-term viability of an ESU.”). In

response to both FWS’ concerns and the new scientific information highlighting the importance of protecting the steelhead, NMFS determined that it should delay the proposed

listings for six months. 

On November 4, 2005, NMFS proposed to abandon the

ESU Policy with respect to O. mykiss. NMFS proposed using

the DPS Policy instead to classify O. mykiss so the steelhead

and rainbow trout could be treated separately under the ESA.

See 70 Fed. Reg. at 67,131. In support of the change in policy,

NMFS stated:

[I]t is appropriate that we consider departing from

our past practice of applying the ESU Policy to O.

mykiss stocks, and instead apply the DPS Policy in

determining “species” of O. mykiss for listing consideration. Such an approach would also be consistent with use of the DPS Policy by the agencies in

defining DPSs of Atlantic salmon . . . The primary

difference in the application of the two policies is

that the ESU Policy relies on “substantial reproductive isolation” as the primary factor in delineating a

group of organisms, while the DPS Policy relies on

“marked separation” to delineate the group. Within

a discrete group of O. mykiss populations, the resident and anadromous life forms of O. mykiss remain

“markedly separated” as a consequence of physical,

physiological, ecological, and behavioral factors.

Despite the apparent lack of reproductive isolation

between the two forms within a given population or

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12413
group of populations, under the DPS Policy anadromous and resident O. mykiss may not warrant delineation as part of the same DPS.

Id.

After receiving fifteen total comments, both opposed to and

in support of the policy change, NMFS formally announced

in January 2006 it would apply the DPS Policy to O. mykiss.

In support of the policy change, NMFS provided two justifications. NMFS first pointed to administrative consistency,

noting that it and FWS shared jurisdiction over Atlantic

salmon and had applied the DPS Policy to classify this type

of fish. NMFS also stated that it was no longer appropriate to

apply the ESU Policy to O. mykiss, because it was different

from other types of Pacific salmon. The full justification

stated:

Although the ESU Policy did not by its terms apply

to steelhead, the DPS Policy states that NMFS will

continue to implement the ESU Policy with respect

to “Pacific salmonids” (which include O. mykiss).

FWS, however, does not use our ESU policy in any

of its ESA listing decisions. In a previous instance of

shared jurisdiction over a species (Atlantic salmon),

we and FWS used the DPS policy in our determination to list the Gulf of Maine DPS of Atlantic salmon

as endangered (65 FR 69459; November 17, 2000).

Given our shared jurisdiction over O. mykiss, and

consistent with our approach for Atlantic salmon, we

believe application of the joint DPS policy here is

logical, reasonable, and appropriate for identifying

DPSs of O. mykiss. Moreover, use of the ESU policy

—originally intended for Pacific salmon—should

not continue to be extended to O. mykiss, a type of

salmonid with characteristics not typically exhibited

by Pacific salmon. NMFS and FWS also intend to

continue to evaluate application of the statutory term

12414 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
“distinct population segment” in a process outside

the context of a species-specific listing.

71 Fed. Reg. at 834. Pursuant to the DPS Policy, NMFS listed

the Central Valley steelhead in its own DPS, apart from rainbow trout, and then listed steelhead as threatened.

THIS LITIGATION

Plaintiffs Modesto Irrigation District and other irrigation

and water districts (collectively, “MID”) formed a coalition in

2006 to file this suit under the APA in the Eastern District of

California challenging the listing. MID’s principal arguments

were that NMFS had not adequately justified the change of

policy, and that NMFS’ classification of steelhead in its own

DPS violated the plain language of the ESA because the steelhead and rainbow trout were not sufficiently biologically different to justify separate treatment. The Center for Biological

Diversity (“CBD”) intervened to support the government. 

The district court granted the government’s motion for

summary judgment in a published opinion. See California

State Grange v. Nat’l Marine Fisheries Serv., 620 F. Supp. 2d

1111 (E.D. Cal. 2008) (“Grange”). The opinion dealt with

this and related litigation not now before us. As relevant to

this appeal, the district court first rejected MID’s contention

that the ESA required interbreeding organisms to be included

in the same DPS. The ESA defines a species as “any subspecies of fish or wildlife or plants, and any distinct population

segment of any species of vertebrate fish or wildlife which

interbreeds when mature.” 16 U.S.C. § 1532(16). The district

court found this definition ambiguous in that it did not clearly

state that all interbreeding organisms must be placed in the

same DPS. Grange, 620 F. Supp. 2d at 1174-76. The district

court also noted that Congress added the term DPS to the species definition in order to provide agencies with greater flexibility in their classifications. It concluded that MID’s

proposed limiting construction would be contrary to this

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12415
intent. Id. at 1176. The district court also found that NMFS

had provided sufficient justification for the change from the

ESU to DPS Policy, applying then controlling law. 

MID appeals and contends that under a proper interpretation of the ESA, the steelhead and rainbow should be classified in the same DPS because, to some extent, they interbreed.

MID also contends that the policy change for O. mykiss from

the ESU Policy to the DPS Policy was not adequately

explained or justified and hence was arbitrary and capricious.

WHETHER THE ESA REQUIRES SIMILAR

TREATMENT FOR STEELHEAD AND RAINBOW

TROUT

[1] The ESA provides that “[t]he term ‘species’ includes

any subspecies of fish or wildlife or plants, and any distinct

population segment of any species of vertebrate fish or wildlife which interbreeds when mature.” 16 U.S.C. § 1532(16).

MID contends that in defining a species as a “[DPS] . . .

which interbreeds when mature,” the ESA requires agencies

to place all interbreeding organisms in the same DPS. MID

thus argues that NMFS violated the plain language of the ESA

by placing steelhead in their own DPS, because steelhead

sometimes interbreed with rainbow trout. 

The parties agree that the analysis set forth in Chevron

U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837

(1984), guides the present inquiry. Under Chevron, we first

determine whether Congress has “directly spoken to the precise question at issue.” 467 U.S. at 842. If Congress’ intent is

clear, that ends the matter. Id. at 842-43. If, however, the statute is ambiguous, we must next determine whether the agency’s interpretation of the statute is permissible. Id. at 843. 

For MID, the statute is not ambiguous and we need not proceed beyond Chevron’s first step. MID contends that the ESA

made interbreeding the single, definitive characteristic of a

12416 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
DPS; so long as interbreeding can take place, the fish should

be in the same DPS. 

NMFS’ position is that interbreeding is a necessary, but not

a sufficient condition for classification as a DPS. Some organisms may be distinguished by other factors that justify different classifications. The agency explained this in its final rule:

The ESA requirement that a group of organisms

must interbreed when mature to qualify as a DPS is

a necessary but not exclusive condition. Under the

definition, although all organisms that belong to a

DPS must interbreed when mature (at least on some

time scale), not all organisms that share some reproductive exchange with members of the DPS must be

included in the DPS. The DPS policy outlines other

relevant considerations for determining whether a

particular group should be delineated as a DPS (i.e.,

“marked separation” as a consequence of physical,

physiological, ecological or behavioral factors).

71 Fed. Reg. at 838. NMFS thus agrees the ESA requires

organisms to interbreed in order to qualify as a “distinct population segment,” or species as defined by the statute. It contends that because steelhead interbreed, the ESA’s species

definition has been satisfied. 

[2] We agree with the district court that the statutory definition of a species as a “[DPS] . . . which interbreeds when

mature” is “grammatically ambiguous.” See Grange, 620 F.

Supp. 2d at 1175. We also agree that the government’s reading of Section 1532(16) finds support in the statutory language. There is no indication within the text that Congress

intended to create a rigid limitation on an agency’s discretion

to define the statutorily undefined concept of a “distinct population segment.” Cf. Strunk & White, The Elements of Style

59 (3d ed. 1979) (stating that phrases using the relative pronoun ‘which’ can be unclear due to the pronoun’s frequent

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12417
misuse). The “[DPS] . . . which interbreeds when mature” language in Section 1532(16) is phrased in terms of interbreeding as a condition for a DPS to qualify as a species under the

ESA. Yet it does not necessarily indicate that interbreeding

must be the sole defining characteristic of a DPS, because, by

definition, a DPS must also be “distinct.” The statute certainly

cannot be read to support, unambiguously, MID’s contention

that all interbreeding organisms must be treated the same.

[3] Indeed, this court has already determined that “distinct

population segment” is an ambiguous term and that the DPS

Policy defining it is entitled to Chevron deference. See Nw.

Ecosystem Alliance v. U.S. Fish and Wildlife Serv., 475 F.3d

1136, 1141-44 (9th Cir. 2007). By inventing the term DPS

and then declining to define it, Congress intended to provide

agencies with discretion in deciding the composition of a

DPS. See Nat’l Ass’n of Home Builders, 340 F.3d at 842 (noting that Congress added DPS to the species definition to allow

agencies to “provide different levels of protection to different

populations of the same species”). MID’s suggestion that the

“interbreeds when mature” language somehow restricts that

discretion runs counter to Congressional intent and our decision in Northwest Ecosystem Alliance. Under our circuit law,

the DPS Policy rests on a permissible interpretation of the

ESA.

Moreover, contrary to MID’s suggestion, the decision in

Alsea does not support MID’s proposed statutory interpretation. See 161 F. Supp. 2d at 1161-64. There, NMFS defined

an ESU to consist of both naturally spawned and hatchery

spawned Oregon coast coho salmon, but listed only the naturally spawned population as threatened. Id. The court found

this listing arbitrary and capricious because the ESA permits

listing only an entire species as threatened or endangered. Id.

at 1162. Alsea held that once NMFS defines an ESU/DPS, it

cannot list only a portion of that DPS as threatened or endangered. See id. at 1161-63. 

12418 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
Here there has been no subdivision below the DPS level.

NMFS determined that the Central Valley steelhead warranted its own DPS. NMFS then listed that entire DPS as

threatened, thereby curing any Alsea problem. MID’s reliance

on Alsea is therefore misplaced.

[4] For these reasons, we conclude that Section 1532(16)

of the ESA does not require that interbreeding organisms be

placed in the same DPS.

THE GOVERNMENT PROVIDED AN ADEQUATE

RATIONALE FOR THE CHANGE IN POLICY

NMFS changed its policy when it applied the DPS Policy

to O. mykiss after it had previously applied the ESU Policy,

and it is undisputed that such a policy change requires an

explanation. See F.C.C. v. Fox Television Stations, Inc., 129

S. Ct. 1800, 1810-11 (2009). MID questions whether NMFS

provided sufficient explanation for the change. We hold that

the record reflects that NMFS engaged in a careful decisionmaking process and provided a sufficient explanation for its

decision to apply the DPS Policy. 

The district court held, on the basis of aging authority, that

NMFS’ decision to adopt the DPS Policy for O. mykiss was

supported by the record and sufficiently explained. See

Grange, 620 F. Supp. 2d at 1161-62 (relying on Motor Vehicles Mfrs. Ass’n of the United States v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 29 (1983)). Subsequent to the district

court’s decision, however, the Supreme Court provided new

guidance to courts reviewing an agency’s change in policy,

that in effect confirmed the validity of the district court’s

analysis. See Fox, 129 S. Ct. at 1810-11. 

In Fox, the Court examined the FCC’s change in its definition of what constituted an indecent broadcast. Id. at 1806-07.

Under the FCC’s old policy, a broadcast with a “fleeting” or

non-literal expletive was rarely deemed indecent. Id. The new

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12419
policy made such “fleeting” and non-literal expletives actionably indecent. Id. The Second Circuit struck down the change,

ruling that the FCC was required to provide a thorough justification of why the new policy was necessary, and that the

agency had failed to do so. Id. at 1810. The Second Circuit

interpreted the Supreme Court’s decision in State Farm as

requiring courts to conduct a “more searching review” of an

agency’s decision to abandon an old policy in favor of a new

one. Fox, 129 S. Ct. at 1810.

The Supreme Court reversed and upheld the FCC’s new

indecency definition. It held that neither the APA nor State

Farm require courts to subject an agency’s policy change to

heightened judicial review. Id. Rather, the Court noted that an

agency need only satisfy certain criteria in order to justify a

policy change. First an agency must “display awareness that

it is changing position.” Id. at 1811. An agency must then

explain its reasoning, but it need not demonstrate that the new

policy is an improvement. It must: 

show that there are good reasons for the new policy.

But it need not demonstrate to a court’s satisfaction

that the reasons for the new policy are better than the

reasons for the old one; it suffices that the new policy is permissible under the statute, that there are

good reasons for it, and that the agency believes it to

be better, which the conscious change of course adequately indicates. 

Id.

Some circumstances require that an agency provide a

greater justification for changing a policy than for adopting a

new one. In such cases, the justification must be greater than

what “would suffice for a new policy created on a blank

slate.” Id. The Court suggested such heightened explanation

may be appropriate, for example, if the new policy rests upon

factual findings that contradict those which underlay the pre12420 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
vious policy or if the old policy has “engendered serious reliance interests.” Id. Neither side has argued that such a

heightened standard applies here.

[5] Agencies thus have flexibility to alter policies under

Fox. The other Circuits that have already applied its standard

have recognized that the Supreme Court intended to provide

agencies considerable latitude to change course. So long as

the agency “fully explain[s] how its new construction is permissible under the statute, that there are good reasons for the

new construction, and that [the agency] believes the new

interpretation to be better,” a previous position is “no obstacle” to adoption of a new course. Ad Hoc Shrimp Trade

Action Comm. v. United States, 596 F.3d 1365, 1372 (Fed.

Cir. 2010) (upholding policy change where agency determined that a “better reading” of the controlling statute

required a departure from previous practice); see also Westar

Energy, Inc. v. Fed. Energy Regulatory Comm’n, 568 F.3d

985, 988-89 (D.C. Cir. 2009) (finding that where agency

“carefully explained” policy change it must be upheld under

Fox). At the same time, because judicial deference is not

unlimited, departures from prior policy must be recognized

and explained. Courts will not “assume [an agency] has

engaged in reasoned decision making” when it “implicitly”

departs from its prior precedent and provides no explanation

for doing so. See Dillmon v. Nat’l Transp. Safety Bd., 588

F.3d 1085, 1091 (D.C. Cir. 2009). 

[6] Here NMFS recognized the policy change and

explained it. The explanation for the change appeared in the

final rule as follows:

Although the ESU Policy did not by its terms apply

to steelhead, the DPS Policy states that NMFS will

continue to implement the ESU Policy with respect

to “Pacific salmonids” (which include O. mykiss).

FWS, however, does not use our ESU policy in any

of its ESA listing decisions. In a previous instance of

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12421
shared jurisdiction over a species (Atlantic salmon),

we and FWS used the DPS policy in our determination to list the Gulf of Maine DPS of Atlantic salmon

as endangered . . . Given our shared jurisdiction over

O. mykiss, and consistent with our approach for

Atlantic salmon, we believe application of the joint

DPS policy here is logical, reasonable, and appropriate for identifying DPSs of O. mykiss. Moreover,

use of the ESU policy — originally intended for

Pacific salmon — should not continue to be

extended to O. mykiss, a type of salmonid with characteristics not typically exhibited by Pacific salmon.

NMFS and FWS also intend to continue to evaluate

application of the statutory term “distinct population

segment” in a process outside the context of a

species-specific listing. 

71 Fed. Reg. at 834.

NMFS explicitly recognized it was changing policy when

it determined the DPS Policy to be a better fit for O. mykiss.

See Fox, 129 S. Ct. at 1811 (requiring agencies to recognize

that they are changing policy). While a new policy must rest

upon a permissible construction of the controlling statute, see

Fox, 129 S. Ct. at 1811, we have here and previously determined that the DPS Policy represents a permissible construction of the ESA. See Nw. Ecosystem Alliance, 475 F.3d at

1150 (“The DPS Policy is entitled to Chevron deference.”). 

The more serious question here is whether NMFS provided

“good reasons” for the policy change. See Fox, 129 S. Ct. at

1811. MID does not argue that NMFS proffered bad reasons

in choosing to use the DPS Policy. Rather it contends that the

“good reasons” offered by NMFS have no support in the

record. As the ESU Policy was designed specifically for

Pacific salmon, MID points to NMFS’ lack of detailed explanation for its conclusion that O. mykiss are subject to the DPS

12422 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
Policy because they differ materially from other Pacific

salmon.

[7] Even if we were to agree with MID that NMFS’ explanation leaves several unanswered questions, the law does not

require the explanation to be exhaustive. We must “uphold a

decision of less than ideal clarity if the agency’s path may

reasonably be discerned.” See id. (citation omitted). Here the

notice and comment process reveals NMFS’ evolving understanding of O. mykiss and reflects NMFS’ determination that

the differences between steelhead and rainbow trout set O.

mykiss apart from other Pacific salmon.

When NMFS first attempted to list the steelhead in 1997,

it recognized there were “uncertainties about the relationship

of resident and anadromous O. mykiss.” See 71 Fed. Reg. at

834. The proposed rule, issued almost a decade later,

describes at length the differences between the two fish, evidencing that the agency had since determined that the distinctions between steelhead and rainbow trout were expansive:

Despite the apparent reproductive exchange between

resident and anadromous O. mykiss, the two life

forms remain markedly separated physically, physiologically, ecologically, and behaviorally. Steelhead

differ from resident rainbow trout physically in adult

size and fecundity, physiologically by undergoing

smoltification, ecologically in their preferred prey

and principal predators, and behaviorally in their

migratory strategy. Where the two life forms cooccur, adult steelhead typically range in size from

40-72 cm in length and 2-5 kg body mass, while

adult rainbow trout typically range in size from 25-

46 cm in length and 0.5-2 kg body mass. Steelhead

females produce approximately 2,500 to 10,000

eggs, and rainbow trout fecundity ranges from 700 to

4,000 eggs per female, with steelhead eggs being

approximately twice the diameter of rainbow trout

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12423
eggs or larger. Steelhead undergo a complex physiological change that enables them to make the transition from freshwater to saltwater (smoltification),

while rainbow trout reside in freshwater throughout

their entire life cycle. While juvenile and adult steelhead prey on euphausiid crustaceans, squid, herring,

and other small fishes in the marine environment, the

diet of adult rainbow trout is primarily aquatic and

terrestrial insects and their larvae, mollusks, amphipod crustaceans, fish eggs, and minnows. Finally,

steelhead migrate several to hundreds of miles from

their natal streams to the ocean, and spend up to 3

years in the ocean migrating thousands of miles

before returning to freshwater to spawn. Rainbow

trout, in contrast, may exhibit seasonal migrations of

tens of kilometers but generally remain associated

with their natal drainages.

70 Fed. Reg. at 67,132 (internal citations omitted). In later

extending the comment period, NMFS noted that it had

received and was considering a number of new scientific

studies bearing on the relationship between steelhead and

rainbow trout. See Endangered and Threatened Species: 6-

month Extension of the Final Listing Determinations for Ten

Evolutionary Significant Unites of West Coast Oncorhynchus

mykiss, 70 Fed. Reg. 37,219, 37,220 (June 28, 2005). These

reports demonstrated that, despite the reproductive exchange

between the fish, rainbow trout probably cannot regenerate a

steelhead population. See Independent Science Advisory

Board, Viability of ESUs Containing Multiple Types of Populations 29 (2005) (stating that it is “unlikely that a population

of resident trout can consistently reestablish a steelhead population”); Salmon Recovery Science Review Panel, Report for

the meeting held December 2004 12 (2004) (“[R]esident populations by themselves should not be relied upon to maintain

long-term viability of an ESU.”). 

[8] This record thus contains ample support for the reasons

NMFS stated when it decided to use the DPS Policy. The final

12424 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
rule stated that the ESU Policy was no longer appropriate for

classifying O. mykiss because it is “a type of salmonid with

characteristics not typically exhibited by Pacific salmon.” 71

Fed. Reg. at 834. The final rule may not explicitly describe

why and how O. mykiss differ from other species of Pacific

salmon, but the rule does provide an extensive discussion of

the similarities and differences between steelhead and rainbow trout that are not shared by other Pacific salmon. It “may

reasonably be discerned,” then, that NMFS determined that O.

mykiss is distinct from other types of Pacific salmon. See Fox,

129 S. Ct. at 1811. 

MID also points to scientific evidence in the record it suggests shows that steelhead and rainbow trout are not as different as NMFS states. Yet our task is not to second guess the

agency’s action. We must defer to a reasonable agency action

“even if the administrative record contains evidence for and

against its decision.” See Trout Unlimited v. Lohn, 559 F.3d

946, 958 (9th Cir. 2009). 

Moreover, NMFS provided reasons for the policy change

that MID does not meaningfully challenge or dispute. The

final rule cited precedent for applying the DPS Policy, stating

that NMFS and FWS, in another instance of overlapping jurisdiction, had jointly applied the DPS Policy to Atlantic

salmon. 71 Fed. Reg. at 834. The final rule explained it was

in accord with FWS’ expressed preference for the DPS Policy. Id. at 837. These administrative justifications demonstrate

that the agencies were seeking to adopt a consistent approach

to a similar issue, and we view this to be a “good reason” for

a policy change. 

MID’s principal reliance is on three cases, all decided

before the Supreme Court’s decision in Fox. They are, hence,

of questionable value, because it is doubtful any applied the

deference Fox now requires. Even if we were to assume they

did apply the proper deferential standard, however, they are

all distinguishable in any event.

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12425
In Defenders of Wildlife v. Hall, 565 F. Supp. 2d 1160,

1171-78 (D. Mont. 2008), the court enjoined a delisting

because the government did not explain a sudden change in

policy. The record in this case reflects how NMFS’ improved

scientific understanding of the characteristics of O. mykiss led

eventually to the policy change. In Northwest Environmental

Defense Center v. Bonneville Power Administration, 477 F.3d

668, 686-90 (9th Cir. 2007), the government relied excessively on language in a Congressional committee report. Here,

following a lengthy notice and comment period, the government offered scientific evidence in support of the change. 

Finally, in Western Watersheds Project v. Kraayenbrink,

538 F. Supp. 2d 1302, 1312-14 (D. Idaho 2008), the government justified a policy change on the basis of generalized concerns for cost and efficiency. The change in this case has been

shown to be attributable to information about biological differences between the steelhead and rainbow trout. The agency’s pathway and rationale for the change was thus apparent,

and its decision was not arbitrary or capricious. See Fox, 129

S. Ct. at 1811.

[9] In light of the evolving understanding of the differences between the fish, the desire for a flexible policy, and the

depth of consideration that NMFS has given the issue over

close to two decades, we conclude that the agency was not

arbitrary or capricious in changing its policy in order to protect the steelhead. We therefore affirm the district court’s

holding that the explanation for the policy change was sufficient. Its ruling was fully consistent with the Supreme Court’s

subsequent decision in Fox.

We are aware of the practical difficulties the classification

decision creates for management of the Irrigation and Water

Districts. The two types of fish look and behave the same during their early years in the rivers and streams in the area, and

the practical effect of our decision is that plaintiffs may have

to protect both the steelhead and rainbow trout, even though

12426 MODESTO IRRIGATION DISTRICT v. GUTIERREZ
only the steelhead is threatened. The flexibility to make policy

changes in response to such concerns, however, remains in

the agencies administering the provisions of the ESA and not

with the courts.

CONCLUSION

The two narrow issues before this panel involve first a

question of statutory interpretation and second, whether an

agency provided an adequate justification for a policy change.

We agree with the district court that the definition of “species” in the ESA did not require NMFS to place interbreeding

steelhead and rainbow trout in the same DPS. We further hold

that, under the Supreme Court’s decision in Fox, NMFS sufficiently justified its decision to apply the DPS Policy to O.

mykiss. We therefore affirm the district court. 

AFFIRMED.

MODESTO IRRIGATION DISTRICT v. GUTIERREZ 12427